Ukraine Positions

Ukraine: The risks of supporting the Maidan protesters is the unleashing of fascism (Svoboda, Right Sektor). If the nationalists can avoid witch-hunts, be inclusive, and leave the far right behind, then that would be positive, but I doubt this can happen, since it would mean abandoning what they are and have fought for. Now rightist identity politics is in power (ostensibly) it usually asserts itself in scapegoating ways rather than reconciliation – the start of this may be the focus on revenge and on Yanukovich, the ousted president.

The deaths that have occurred are sad, tragic, as they always are, but if this is a revolution, then the events have in fact been remarkably peaceful (so far, perhaps), especially given the involvement of the far right as the spearhead..

But it is not really a revolution (so far at least), it is more akin to a coup, with outside interference (EU, USA), in a situation where the masses are fairly passive about politics, due to the particular history of the country.

Historically, Russia has more right to 'interfere' in Ukraine than the EU, and this fact has been trampled on, but we can only support the Russian leaders, who are also only interested in exploiting Ukraine, insofar as they act as defenders of self determination for Ukraine and against sectarianism and terror. In this situation Russia is and would be right to assert itself against the elements of neo-Nazism in the coup and the west.

The peculiar and telling aspect is actually its lack of assertion of such rights and the weakness of the ousted leadership it seemed to be backing.

The latter itself points to corruption and the rule of capitalists in both Ukraine and Russia, they are vying for profit and 'reforms', the Russian bourgeoisie vacillate, not too sure that they would not actually benefit from an even more rightist capitalist neoliberal Ukraine. This is the class dimension of the picture. The Ukrainian 'oligarchs' (big capitalists) think the same, some seeing the EU as a source of new openings and new ways to exploit their working class, others will have ties to Russia.

So we have capitalist powers, including Russia, competing for Ukraine's wealth and strategic position. The hypocrisy of the west's rhetoric can be grasped clearly when you look at Bahrain, with its protests, where the USA has a naval base just as Russia has a naval base in Ukraine (on the Black Sea). The USA did not support the protests in Bahrain for democracy, even allowed the sending in of tanks to quell the popular uprising. The USA has of course far less claims with regard to Bahrain than Russia has to Ukraine, although we must remember Russia also interferes in Syria to support the dictator Assad. All of this is cynical imperialist competition.

Sometimes the western 'soft' Left is confused and confusing about these complications, they stick to Russia like a limpet from the Cold War, and so do the rightists, whose identity politics sees the differences as essential to human nature anyway, so a Ruskie is always a Ruskie and a commie. In fact we have here the two great identity politics opposing in a false dialectic (left v right), and this is always the pincer movement of bourgeois ideology that we see in the mainstream press, because the concept of class is disallowed and they must resort to some other interpretation of global political events. It is an ideological strategy that allows in fascism though, and this is its danger in the present conflict for Europe and the EU, which is edging noticeably towards the far right in its ideology.

Mr Lavrov added that "it is in our interest for Ukraine to be part of the broad European family" but against Russia's interest to "allow the radicals and nationalists who are clearly trying to take centre stage to prevail."http://www.bbc.co.uk/news/world-europe-26333587

Some useful links:

Description of far right Svoboda party

http://www.ucsj.org/2013/08/22/svoboda/

Nuland phonecall on Ukraine

https://www.youtube.com/watch?v=MSxaa-67yGM#t=89

Left-Gramscian interpretation wuth local knowledge

http://revolution-news.com/maidan-contradictions-interview-ukrainian-revolutionary-syndicalist/

Notes on Stalinist Humanism, Italian politics and the 'Grillini'

I realized recently that it was hard to accurately name a certain type of 'communist' (an unusual situation in itself) that I regarded as having a retrograde effect in today's political arena, specifically in Europe. But now I think I've nailed it: Stalinist-humanists. These communists (or 'communists', it depends) come from the history of the notion of 'actually existing communism' and its post war social imperialist past, particularly the Soviet Union.

The idea that 'communism existed' was an error or at least a deviation from Leninist theory, given that what actually existed was socialism and continued class struggle (excepting with the previous main class relations inverted). - Post WWII Stalinism tended to assert that the class struggle was concluded for it. This state position was combined with the cult of personality and a socialist-but-imperialist foreign policy. - Both of these positions also deviated from Leninism. It is possible to trace the roots of this deviation but I shall not here, suffice to say WWII had a big effect (which is of course an understatement).

There are certain parties in Europe that owe their existence to a past allegiance to the Soviet Union, as is natural, and these often had or have a peculiarly fusty, conservative flavor which seems, today, extremely anti-radical, promoting a sort of humanist gradualism and compromise with, even fondness for, almost any fixed authority, even while being able to propagate classic Marxist critical analysis. One traditional reaction to this co-option with the state is to counteract this, 'within the fold' so to speak, through Trotskyist anarchism directed from outside the traditional corridors of bourgeois power, i.e. with an extreme 'militancy'.

The current European 'communist' movement is split by this division between Stalinism and Trotskyism, as played out in the political arena. It is, I suggest, a false dialectic that actually represents a threat to Marxist theory and practice in the day-to-day struggles we currently see in the severe global capitalist crisis. It is fairly apparent the bourgeois media enjoys this agonistic situation. 

- Not that I wish to create some kind of 'grand unity' here, and I recognize that often the arguments between factions are productive, and this isn't ever a pure thing, but what I suggest this represents, basically, is the repression of the Bolshevik position within current revolutionary communist politics and the splitting of an old Menshevik type position into two essentially humanist tendencies: Stalinist humanism and Trotskyist humanism.

Bolshevik versus Menshevik was an old struggle in revolutionary Russia that most comrades will know about. I am unable here to go into the details of the historical differences between them, but the Menshevik position tended to represent bourgeois reformist 'Marxism' in a more social democratic flavor, seeking to stick with the then existing bourgeois state structures. The Bolshevik position was that of the early revolutionary Soviet Union, one of its famous slogans was "All Power to the Soviets" (worker councils). 

In the S.U. the New Economic Policy and the war tended to reduce the impact of Bolshevism, even though Lenin was a revered Bolshevik figure. The embalming of Lenin's body after he died represents, I think, a stage in the eventual victory of this humanism, and reveals a resort to political social democracy within (a denegated) socialism in the Soviet Union's state apparatus - to cut a long story short of course.

We all recognize, even when we are sympathetic to the Soviet war-time experience, that the Soviet Union began at some stage in its later social evolution to resemble the more rightist type of authoritarian state, particularly in its superstructure and culture. It is a matter of irony that this statism derives from the return of humanism and social democracy, exactly what the external bourgeoisie decried as missing in such an 'authoritarian' or 'totalitarian country', but this is, I submit, the case. What else could it be? After all the normal bourgeois answer boils down to the idea that there is something innately wrong with all socialists.

Stalinist humanism is a bourgeois ideological variant of Marxism. As such it is a reversion to the Menshevik position, which is as I have described dualistic. It does not just contain Stalinism: the dualism derives from the way the Menshevik humanist position acts on the current political stage. Its gradualism and Statist reformism corresponds to the fondness for stability and authority that we see today among the 'communist' parties that cooperate within the European bourgeois parliamentary systems, while the sometimes sudden and forced realization that this is obviously not producing the desired social results ('actually existing communism') leads to, as it were, an extreme reaction that goes the opposite way: to a rejection of all gradualism, reform, and authority, even in socialism.

We should be quite familiar with humanist dualism as a bourgeois philosophy, it is a source of a lot of cultural angst, anguish and stress, the constant swinging from love and peace to extreme violence and hatred, because of its belief in and sometimes abandonment of (in disgust) the 'human spirit' and God; it goes back to Descartes at least and is tied into religion. Indeed it is to a large extent a religious attitude and aesthetic more than a strict ideological system and corresponds to the feelings of alienation that are not eliminated by the socialist state merely asserting that those problems have evaporated.

The Marxist philosopher Louis Althusser addressed in his work the subject of Marxist humanism and critiqued the phenomenon of cult of personality and Stalinism, but not from the standard rightist position, in fact he demonstrated that the rightist critique was actually the same position (theoretically) as Stalinism. It is also possible, though, as I think the above shows, to extend this critique into the modern political arena, for example the career of Giorgio Napolitano the Italian politician who has been the 11th President of the Italian Republic since 2006 and who has just been re-elected (April 2013) due to a political deadlock. He was a long-time member of the Italian Communist Party but later the Democrats of the Left, and served as President of the Chamber of Deputies from 1992 to 1994 and as Minister of the Interior from 1996 to 1998. The current radical intervention into parliamentary politics of Beppe Grillo's party has upset the old established left and right political cartel and false dialectic, but it has also discredited, thankfully, much of the Stalinist humanist conservative communists. At least at the moment M5S is more communist than the communists.

Neoliberalism, Marx and the 'Marginal Revolution'

Neoliberalism is a contemporary form of economic liberalism that emphasizes the efficiency of private enterprise, liberalized 'free' trade and open markets to promote globalization (a term which might also be interpreted as neo-imperialism). Neoliberals therefore seek to maximize the role of the 'private sector' in determining the political and economic priorities of the world. Neoliberalism seeks to transfer control of the economy from 'public sector' (or state) to the 'private sector' under the belief that it will produce a more efficient government and improve the economy.

The definitive statement of the concrete policies advocated by neoliberalism is often taken to be John Williamson's 'Washington Consensus', - a list of policy proposals that appeared to have gained consensus approval among the Washington-based international economic organizations such as the International Monetary Fund (IMF) and World Bank. Though apparently not Williamson's original intent, the Washington Consensus has anyway become synonymous with the ideas of neoliberal market fundamentalism.

Some claim that Chicago School economists are associated with Washington Consensus The 'Chicago school' of economics describes the neoclassical school of thought within the academic community of economists focusing around the faculty of The University of Chicago, sometimes referred to as the 'freshwater school' of economics in contrast to the 'saltwater school' based in US coastal universities, notably Harvard, MIT, and Berkeley; Chicago is considered one of the world's foremost economics departments; Milton Friedman taught there for more than three decades. A significant body of economists and policy-makers argues that what was wrong with the Washington Consensus as originally formulated by Williamson had less to do with what was included than with what was missing in it, arguing that it was an incomplete project, and that countries in Latin America and elsewhere need to move beyond 'first generation' macroeconomic and trade reforms to a stronger focus on productivity-boosting reforms and direct programs to support the poor.

How did we get to this point in economic science?

'Classical economics' is the term used for the first modern school of economics. The publication of Adam Smith's Wealth of Nations in 1776 is considered to be the birth of the school. Perhaps the central idea behind it is on the ability of the market to be self-correcting as well as being the most superior institution in allocating resources. The implicit assumption is: that all individuals maximize their economic activity. At the root of Smith's modernity, though, is his and Marx's philosophical attitude towards the object of their enquiry and the way this grasped the concept, crucial to economic theory, of value.

The so-called 'paradox of value', or the diamond–water paradox, is the apparent contradiction that, although water is more useful in terms of human survival than diamonds, diamonds command a higher price in the market; Adam Smith is the classic presenter of this paradox. To paraphrase Smith: the one may be called 'value in use' and the other, 'value in exchange', the things which have the greatest value in use often have little or no value in exchange; on the contrary, those which have the greatest value in exchange have frequently little or no value in use; nothing is more useful than water, for example, but it will purchase almost nothing; almost nothing can be gained in exchange for it, whilst a diamond has scarce any use-value; but a very great quantity of other goods may frequently be had in exchange for it. For Smith, the real price of every thing, what every thing really costs to the person who wishes to acquire it, is the toil of acquiring and making it, so Smith thereby denied a necessary relationship between price and utility, and price in this view was related to productive labor. In this he was followed by Marx. Advocates of the labor theory of value saw it as the philosophically materialist resolution of the paradox of value.

The so-called 'marginal revolution' which is based on the subjective theory of value, that is understood to have occurred in Europe, led by Carl Menger, William Stanley Jevons, and Leon Walras, gave rise to what is known as the neo-classical synthesis. As we have seen, Marx had developed and used the materialist concept of use-value versus exchange value. Use-value was classically understood to give some measure of objective material usefulness. This was later 'rebranded' in the 'marginal revolution' as 'marginal benefit', which is understood as the utility of a thing counted in terms of 'common units of value', while exchange value is given as the measure of how much one good was priced in terms of another, namely what is now called relative price. The subjective theory of value identifies value as based in the inner desires and needs of the members of a society, as opposed to value being inherent to an object that exists independently of any observer or user. Once this idealist epistemology is taken as the given grounds, it is able to refer to the units of value as subjective units. Today, the marginal utility of a good or service is seen as the utility gained (or lost) from an increase (or decrease) in the consumption of that good or service, so it is the action of subjective consumption that defines the value not the objective existence of the object. Economists therefore sometimes speak of a law of diminishing marginal utility, meaning that the first unit of consumption of a good or service yields more utility than the second and subsequent units.

The concept of marginal utility played a defining conceptual role in the (so-called) marginal revolution of the late 19th century that led to the replacement of the labor theory of value of Adam Smith and Karl Marx by neoclassical value theory in which the relative prices of goods and services are thought to be simultaneously determined by marginal rates of substitution in consumption and marginal rates of transformation in production, which are apparently equal in 'economic equilibrium'. This neo-classical formulation had also been formalized by Alfred Marshall. However, it was the concept of the general equilibrium of Walras that helped solidify the research in economic science as a mathematical and deductive enterprise, the essence of which is still defined as neo-classical and makes up what is currently found in mainstream economics textbooks today. The key implication is usually that what is new (revolutionary) here is the scientific rigor, i.e. that Marx specifically is not supposed to have. In actual fact this rigor is precisely what is missing in this fudge and mystification of use value and exchange value through the concept of the marginal, which serves to obscure its idealist philosophical roots.

Macroeconomics in its modern form began with the publication of John Maynard Keynes's General Theory of Employment, Interest and Money in 1936. Keynes projected an aggregated framework to explain macroeconomic behavior, leading us to the current distinction between micro and macroeconomics. According to Keynesian theory, some individually-rational microeconomic-level actions—if taken collectively by a large proportion of individuals and firms—can lead to inefficient amassed macroeconomic outcomes, wherein the economy operates below its potential output and growth rate. Such a situation had previously been referred to by classical economists as a general glut, which in Marx is described as overproduction. Keynesian economics argues that private sector decisions sometimes lead to these inefficient macroeconomic outcomes and, therefore, advocates interventionist policy responses by the public sector, including monetary policy actions by the central bank and fiscal policy actions by the government to stabilize output over the 'business cycle'. Of special importance in Keynes' theories was his explanation of economic behavior as also being led by 'animal spirits'. In this sense, it limited the role for the so-called rational (maximizing) agent. In fact, this foundational ideology of a division of the rational ('angelic') and the irrational ('bestial') in the human subject seems to underpin the whole of modern post Smithian-Marxian economics, as well as the accepted division of macro from microeconomic theory. It avoids confronting the concept and existence of contradiction in the economic system by founding any antagonism ultimately in innate human attributes; although this underlying thesis is rarely invoked as such (it could sound racist), it is nevertheless always implied.

The neo-classical school dominated the field up until the event of the Great Depression. When the Great Depression struck, classical economists (other than Marx), had difficulty explaining how goods could go unsold and workers could be left unemployed, thus with Keynes's publication, certain of its assumptions were rejected. Keynes argued the solution to the Great Depression was to stimulate the economy ('inducement to invest') through a combination of two approaches: a reduction in interest rates and government investment in infrastructure; the theory has it that investment by government injects income, which results in more spending in the general economy, which in turn stimulates more production and investment involving still more income and spending and so on and so forth. The initial stimulation is seen as beginning a concatenation of events, whose total increase in economic activity is a multiple of the original investment; it does not explain why the situation arises in the first place, i.e. why the investments that have taken place always/already in the economy are not producing this effect, or the answer is left simply as a fault of policy. The Post-World War II period saw the widespread implementation of Keynesian economic policy in the United States and Western European countries. Its dominance in the field by the 1970s was best reflected by the controversial statement attributed to ex-President Richard Nixon and economist Milton Friedman: "We are all Keynesians now."

A central conclusion of Keynesian economics is that, in some situations, no strong automatic mechanism moves output and employment towards full employment levels. This conclusion conflicts with economic approaches that assume a strong general tendency towards 'equilibrium'. In the 'neoclassical synthesis', which combines Keynesian macro concepts with a micro foundation, the conditions of general equilibrium allow for price adjustment to eventually achieve this goal. General equilibrium theory seeks to explain the behavior of supply, demand, and prices in a whole economy with several or many interacting markets, by seeking to prove that a set of prices exists that will result in an overall equilibrium. What here seems to have been omitted is the political as such, politics is subordinated to a technical and instrumental understanding of the problem, and (for instance) an effect, prices, are treated as a cause, or as both cause and effect of its own function. Generally speaking any material foundations or groundings are lost.

With microeconomics, macroeconomics is now one of the two most general fields in economics; the fact that macroeconomics is 'smaller' than economics seems to render the terms faintly ridiculous, notwithstanding. Macroeconomics (from Greek prefix "makros-" meaning "large" + "economics") is the branch of modern economics dealing with the performance, structure, behavior, and decision-making of the whole economy. This includes a national, regional, or global economy. Macroeconomists study aggregated indicators such as GDP, unemployment rates, and price indices to understand how the whole economy functions. They develop models that explain the relationship between such factors as national income, output, consumption, unemployment, inflation, savings, investment, international trade and international finance. In contrast, microeconomics is primarily focused on the actions of individual agents, such as firms and consumers, and how their behavior 'determines' prices and quantities in specific markets.

New classical macroeconomics, sometimes simply called new classical economics, is a school of thought in macroeconomics that builds its analysis on the neoclassical framework; specifically, it emphasizes the importance of supposedly rigorous foundations based on microeconomics. Macroeconomics descended from the hitherto divided fields of business cycle theory and monetary theory. The quantity theory of money was particularly influential prior to World War II. It took many forms including the version based on the work of Irving Fisher. His work on the quantity theory of money inaugurated the school of economic thought known as monetarism. Both Milton Friedman and James Tobin called Fisher "the greatest economist the United States has ever produced." New classical macroeconomics strives to provide neoclassical microeconomic foundations for macroeconomic analysis; this is in contrast with its rival, the new Keynesian school that uses microfoundations such as 'price stickiness' and imperfect competition to generate macroeconomic models similar to earlier, Keynesian ones.

Problems arose in the Keynesian theory in the 1970s and early 1980s with the onset of 'stagflation'. Stagflation is a situation in which the inflation rate is high and the economic growth rate slows down but unemployment also remains high. The reasons for this were and are often placed upon factors such as oil. The decade of the 1970s saw rising oil prices caused by an OPEC oil embargo on the United States. This oil embargo ostensibly caused both high inflation and a steep economic downturn that in turn generated high unemployment. However, the question arises: what caused the high oil prices in the first place? Is the price of oil an extra economic factor, or totally political? And what was the politics based on which here apparently 'caused' the higher price of oil, if not economic factors? Keynesians were perplexed by the outbreak of stagflation because the original concept of the Phillips curve ruled out concurrent high inflation and high unemployment. The Phillips curve is a historical apparent inverse relationship between the rate of unemployment and the rate of inflation in an economy. Put simply, the lower the unemployment in an economy, the higher the rate of inflation should be. The new classical school emerged in the 1970s as a response to this failure of Keynesian economics to explain stagflation.

During the 1970s in the United States and several other industrialized countries, the Phillips curve concept and analysis became less popular. The new classical and monetarist criticisms led by Robert Lucas, Jr. and Milton Friedman respectively forced the rethinking of Keynesian economics. In particular, Lucas made the 'Lucas critique' that cast doubt on the Keynesian model. The Lucas critique suggested that if we want to predict the effect of a policy experiment, we should model the 'deep parameters' that govern individual behavior, because only such deep models can avoid merely aggregating previous policy; only then can we predict what individuals will do, taking into account the change in policy, and then aggregate the individual decisions to calculate the macroeconomic effects of the policy change. His idea of deep, though, only meant relating to preferences, technology and resource constraints and not a deeper theoretical model in the sense of its philosophical foundations (such as the theory of value). This nevertheless strengthened the case for macro models to be based on microeconomics.

Milton Friedman (July 31, 1912 - November 16, 2006) had already proposed before the phenomenon of stagflation that the Phillips curve did not exist and would fail. On this basis he theorized the existence of a 'natural rate of unemployment' that contradicted the then accepted relationship between inflation and unemployment rate, and this became a concept fundamental to monetarist economics, on which also worked Lucas Papademos (who was to become the 'technocratic' prime minister of Greece during the 2011-12 years of the crisis,; in January 2012 he warned that workers would have to accept cuts in income for a default to be avoided, he also told business and labor leaders that the 'troika'—the European Union, the IMF and the European Central Bank—was looking for Greece to take steps to open up so-called closed professions, as well as adjustments to the minimum wage, abolition of Christmas and summer vacation 'bonuses' and automatic wage increases) and Franco Modigliani. As far as many economists were concerned, the Phillips curve had little or no theoretical basis anyway. Critics like Friedman argued that the Phillips curve could not be a fundamental characteristic of economic general equilibrium because it showed a correlation between a real economic variable (the unemployment rate) and an only nominal economic variable (the inflation rate). Their counter-analysis was that government macroeconomic policy (primarily monetary policy) was being driven by a low unemployment target and that this caused expectations of inflation to change, so that steadily accelerating inflation rather than reduced unemployment was the result.

In economics, 'adaptive' expectations means that people form their expectations about what will happen in the future based on what has happened in the past. For example, if inflation has been higher than expected in the past, people would revise their expectations for the future. Chicago macroeconomic theory, as above rejected Keynesianism in favor of monetarism until the mid-1970s, when it turned to new classical macroeconomics based on the concept of rational expectations. Rational expectations is a hypothesis in economics which holds that agents' predictions of the future value of economically relevant variables are not systematically wrong in that all errors are random. Equivalently, this is to say that agents' expectations equal true statistical expected values. An alternative formulation is that rational expectations are model-consistent expectations, in that the agents inside the model assume the model's predictions are valid. Since most macroeconomic models today study decisions over many periods, the expectations of workers, consumers and firms about future economic conditions are an essential part of the model. How to model these expectations has long been controversial, and it is well known that the macroeconomic predictions of the model may differ depending on the assumptions made about expectations (e.g. see Cobweb model).

To assume rational expectations in this view is to assume that agents' expectations may be individually wrong, but are correct on average. In other words, although the future is not fully predictable, agents' expectations are assumed not to be systematically biased and use all relevant information in forming expectations of economic variables. This way of modeling expectations was originally proposed by John F. Muth (1961) and later became influential when it was used by Robert E. Lucas Jr. and others. Modeling expectations is crucial to all models which study how a large number of individuals, firms and organizations make choices under uncertainty. For example, negotiations between workers and firms will be influenced by the expected level of inflation, and the value of a share of stock is dependent on the expected future income from that stock.

Rational expectations theory is the basis for the 'efficient market hypothesis' (efficient market theory). If a security's price does not reflect all the information about it, then there exist 'unexploited profit opportunities': someone can buy (or sell) the security to make a profit, thus driving the price toward equilibrium. In the strongest versions of these theories, where all profit opportunities have been exploited, all prices in financial markets are deemed 'correct' and reflect market fundamentals (such as future streams of profits and dividends). Each financial investment is as good as any other, while a security's price reflects all information about its intrinsic value.

The idea behind the natural rate hypothesis put forward by Friedman was that any given labor market structure must involve a certain amount of unemployment, including 'frictional' unemployment associated with individuals changing jobs and possibly classical unemployment described as arising from real wages being held above the market-clearing level by minimum wage laws, trade unions or other labor market institutions. Unexpected inflation might allow unemployment to fall below the 'natural rate' by temporarily depressing real wages, but this effect would dissipate once the expectations about inflation were corrected. Only with continuously accelerating inflation could rates of unemployment below the 'natural rate' be maintained. The resulting prescription was that government economic policy (or at least monetary policy) should not be influenced by any level of unemployment below a critical level, the so-called 'natural rate'.

The analysis supporting the natural rate hypothesis proved controversial, because empirical evidence suggested that the 'natural rate' varied over time in ways that could not easily be explained by changes in labor market structures. And the analysis is especially problematic if the Phillips curve displays 'hysteresis', that is, if episodes of high unemployment raise the rate. This could happen, for example, if unemployed workers lose skills so that employers prefer to bid up of the wages of existing workers when demand increases, rather than hiring the unemployed. As a result of such problems the 'natural rate' terminology was largely dropped in favor of the NAIRU (Non-Accelerating Inflation Rate of Unemployment) , which referred to a rate of unemployment below which inflation would accelerate, but did not imply a commitment to any particular theoretical explanation, or a prediction that the rate would be stable over time. In short, the conceptual basis of the concept was left fallow, undecided, and ambiguous. There is no theoretical basis for predicting the NAIRU. The NAIRU theory was mainly intended as an argument against active Keynesian demand management and in favor of free markets (at least on the macroeconomic level).

Friedman was an economic advisor to conservative President Ronald Reagan, and his political philosophy extolled the virtues of a free market economic system with minimal intervention. In his 1962 book Capitalism and Freedom, he advocated policies such as a volunteer military, freely floating exchange rates, abolition of medical licenses, a negative income tax, and education vouchers. His ideas concerning monetary policy, taxation, privatization and deregulation influenced government policies, especially during the 1980s, and his monetary theory influenced the Federal Reserve's response to the current global financial crisis (2008-12). The advent of the global financial crisis in 2008 caused some resurgence in Keynesian thought and the Chicago school came under attack and has been at least partly blamed for the growing income inequality in the United States. Economist Brad DeLong of the University of California, Berkeley for instance says the Chicago School has experienced an 'intellectual collapse', while Nobel laureate Paul Krugman of Princeton University, said that recent comments from Chicago school economists were "the product of a Dark Age of macroeconomics in which hard-won knowledge has been forgotten." Critics also charged that the school's belief in human rationality contributed to bubbles such as seen in the financial crisis, and that the school's trust in markets to self-regulate has offered no aid to the economy in the wake of the crisis. The 'new Keynesian' view of the backlash rests on microeconomic models that indicate that nominal wages and prices are 'sticky', i.e. do not change easily or quickly with changes in supply and demand, so that quantity adjustment prevails. According to Paul Krugman, "while I regard the evidence for such stickiness as overwhelming, the assumption of at least temporarily rigid nominal prices is one of those things that works beautifully in practice but very badly in theory." This integration is further spurred by the work of other economists that questions rational decision-making in a perfect information environment as a necessity for micro-economic theory. Imperfect decision-making such as that investigated by Joseph Stiglitz underlines the importance of the management of risk in the economy. Notwithstanding, over time, many macroeconomists have returned to the IS-LM model and the Phillips curve as a first approximation of how an economy works. New versions of the Phillips curve, such as the 'Triangle Model', allow for stagflation, since the curve can shift due to supply shocks or changes in built-in inflation. In the 1990s, the original ideas of 'full employment' had been modified by the NAIRU doctrine. NAIRU advocates suggest restraint in combating unemployment, in case accelerating inflation should result. However, it is unclear exactly what the value of the NAIRU should be—or whether it even exists.

What seems obvious to any reader of Marx is that the effort in modern economics is to avoid looking at contradictions in the capitalist mode of production and how these contradictions enter into the ideology of the economy, the illusions about what the economy is doing and how it is working. Both the Keynesian and Friedmanite economic theories tackle significant problems and proffer solutions to actual economic strife, but they do so one-sidedly so that they are still unable to explain significant factors commonly occurring in the economy: high unemployment while high inflation (stagflation) for Keynes, and now, the collapse of neoliberal economics in the same kind of crisis. Neither form of the perfect market exists in which their respective theories would make sense, yet also putting them together in their positivist (a priori pre-Marxian) synthesis provides no way out. Many other commentators have suggested going back to basics and to the concept of value to look for answers. To look at one, specifically, there are the arguments of Ecological Economics: for this understanding the primary example of the concept of value in neo-classical economics is 'market value', or 'willingness to pay', which is the principal method of accounting used in 'receiver-type' theories, where the receiver (the 'interpreter of the world') determines the value. By contrast, in Ecological Economics value theory is separated into two types: 'donor-type' value and 'receiver-type' value. Ecological economists tend to believe that 'real wealth' needs a donor-determined value as a measure of what things were needed to make an item or generate a service (H.T. Odum 1996). Marx's and the Smithian labor theory of value and the 'Energy' concept is in this interpretation 'donor-type' value theories. Energy theorists, agreeing perhaps with Marx's concept of labor power, believe that this conception of value has relevance to all of philosophy, economics, sociology and psychology as well as Environmental Science (something which Marx was of course aware of long ago).

It is worth noting finally again how these ideas of value are inevitably epistemological (theory of knowledge) definitions and these definitions have inevitable political overtones. The two great camps of philosophy are materialist and idealist. In short, materialism holds that matter exists independently of thought, while idealism takes the contrary view. Marx and Smith's concept of value in their economic theory is philosophically speaking materialist in its theory of knowledge: In this, it is not the receiver's understanding and subjective valuation on the market which determines value, or the movements of the market itself, which would only explain the market by the market and therefore be tautological, but the independent properties of the entity combined with human labor power. Marx (in Volume I of Capital) distinguishes the value of a commodity into its use-value (utility) and exchange (market) value, both of which (aside from naturally occurring use values) are produced through the labor process by labor power, human effort or energy. This division is a theoretical distinction however, and not an absolute epistemological division. A characteristic of modern economics is to take exchange value as the dominant side, to extend its dominance to include dominance over use value, and then to regard this as the actual manifestation of the truth of philosophical idealism, of abstraction and the mind over matter, which in all other respects is the dominance of capital over labor, or as Marx says the dominance of dead labor over living.

Gary Tedman

The Class Struggles in Southern Europe (1)

The embourgeoisment that has been enabled by the massive credit injection over the last years, plus the shifting to the super-exploitation of overseas workers ('outsourcing') rather than those at home, plus the expert predominance of bourgeois culture through the media, has seemed to create European societies without working classes. It is not that the economic relations of class difference have disappeared, far from it, but that these were smoothed over and erased as feelings, and so as corresponding ideas:- there is no working class culture, or if there is, it is rather like dark matter and dark energy in the cosmos (it is there, it has mass, has a huge effect, but it is unknown). This is one reason why the big economic crisis has had few obvious political effects by the standard routes so far. Parliaments remain what they are, representative democracies unshaken by the crisis, except in the places in Europe where the effects have been most acute, where the crisis brings the reality of class exploitation into sharper relief, Greece for example, where Syriza, a radical left party, has risen dramatically to become the second primary force, dissolving the hitherto entrenched certainties of the false dialectic of the 'balance' of pseudo Left and Right. What we see, therefore, is a slow dawning realization of the shakiness and falsity of the bourgeois sensibility and ideology as it comes into contradiction with the economic reality of the crisis for large sections of 'middle class' people who are being thrown down (losing their employment, being evicted from their homes, falling into debt and poverty).

One feature of this is and has been the sense of indignation (i.e. the 'Indignado' movement) that the 'middle class' sensibility has when it finds itself in this situation. To be 'indignant' expresses the loss of dignity, but also a dignified sense of that loss: so it is actually an assertion of dignity against the forces that are stripping it away. For this section of the people the relation between them and workers unions and the working class who also struggle, always, but also specifically now against the effects of the capitalist crisis in various, usually traditional, ways is not exactly or always harmonious, they grate against each other and jockey for position. So this is a cause of division among those who oppose such policies as the troika directed austerity drive, and prevent a Popular Front from being as effective as it could be, although things are still rapidly developing. The case of Argentina is mildly instructive, their earlier, similar, crisis led to the fall of governments and leaders, a great amount of suffering for ordinary people, inspirational uprisings, and a similar movement to the Indignados (the piquiteros, or pickets), but not so much has changed in terms of class division in Argentina, to an extent because of the separation of the opposition into factions and the lack of clarity about what was (and is) to be done.

This lack is to be expected and is not to be taken as a sign of failure, I suggest. The strongest positions become adopted through the struggle and not by imposition, but it is always necessary to point this up and engage in the ideological debate. Socialism remains the only real alternative to the neoliberal policies of the European bourgeoisie and its troika, whose aim is always to push more loans and debt as the answer, but there are so many illusions about what constitutes socialism, and illusions that are 'made real' and acted out too, that the broad Popular Front is the best current movement that serves these struggles. One fear is that 'socialist' or 'communists' wish to impose their 'grid' for revolutions upon these struggles, probably harking back to the USSR's socialist imperialism in Eastern Europe. This could not be further from Leninist principles, but nevertheless these feelings are widespread, there is a great deal of associating the name with the thing itself, as if all Communist Parties in Europe are by default therefore communist or Marxist, as if the act of naming alone means that. And then there is the question of democracy. Probably the most advanced critique of the current democracy in Europe is that of the updated Hannah Arendt version of performative democracy, which in the end and in practice seems to have the US republic as its ideal form, and so is very limited given this form is also currently being severely criticized as failing to represent. Will this theoretical limit form the actual limit of these anti-austerity protests? It looks as if Argentina reached this limit, a kind of buffer zone, hovering at the edge of something new, something greatly resisted by the established powers.

Gary Tedman

Notes on Fidel Castro (part 1) on Obama’s speech to the 60th Session of the United Nations General Assembly regarding Libya, Syria, Palestine, and the Arab Revolutions of 2011

by Gary Tedman

The Fidel text was published online in Granma (English) Havana, dated September 26, 2011

See:
http://www.granma.cu/ingles/reflections-i/26sept-40Reflex1a.html


I would like to first point out that I have the utmost respect for Fidel, but at the moment I find the arguments of some socialists and communists to be mistaken, at least in part, and I would like here to focus on a text by him which gives the chance to approach the subject head on.

To begin with, Fidel asks the rhetorical and rather loaded question:

“…what position to adopt on the NATO genocide in Libya?”

The conclusion contained in this question is that genocide has in fact taken place in Libya, conducted by NATO.

Now, asking loaded questions are more a trick of bourgeois law than Marxist science (it seeks to win the argument through rhetorical means), but here we have it. Fidel asserts the intervention in Libya is essentially the same as that of Serbia, Iraq, and Afghanistan and uses the same reasoning to justify it. To justify these assertions, he uses the following evidence drawn from past history:

“Was it not precisely the government of the UN host state which ordered the butchery in Vietnam, Laos and Cambodia, the mercenary Bay of Pigs attack on Cuba, the invasion of the Dominican Republic, the "dirty war" in Nicaragua, the occupation of Grenada and Panama by the U.S. military forces and the massacre of Panamanians in El Chorillo? Who promoted the military coups and genocide in Chile, Argentina and Uruguay, which resulted in tens of thousands of dead and disappeared?”

Note that, while all these latter accusations are correct, this does not by itself prove or mean that by default today’s military intervention by NATO in Libya is the same. For each intervention and each revolution, conflict or war has to be judged according to its specific material situation and historical circumstance. This must be done according at least to Lenin’s principles.

“Socialists have always condemned war between nations as barbarous and brutal. But our attitude towards war is fundamentally different from that of the bourgeois pacifists (supporters and advocates of peace) and of the Anarchists. We differ from the former in that we understand the inevitable connection between wars and the class struggle within the country; we understand that war cannot be abolished unless classes are abolished and Socialism is created; and we also differ in that we fully regard civil wars, i.e., wars waged by the oppressed class against the oppressing class, slaves against slave-owners, serfs against land-owners, and wage-workers against the bourgeoisie, as legitimate, progressive and necessary. We Marxists differ from both the pacifists and the Anarchists in that we deem it necessary historically (from the standpoint of Marx’s dialectical materialism) to study each war separately.”

It is a slightly worrying sign when past history is used exclusively to damn certain actions, because history is undergoing development all the time, and things, especially political positions in a time of massive economic crisis, change and often invert. We must study each war separately.

Besides, military interventions by ‘western’ powers have not all been imperialist and negative in history: the most obvious example is the intervention against the Nazi’s in Europe in WWII.

Is NATO’s intervention in Libya genocidal? Did it seek to wipe out all Libyan citizens?

I think this is untrue, I suggest that there are two sides to the conflict in Libya, and this means the situation cannot be reduced to a simple ‘NATO genocide’, ‘against Libya’. It is only possible to assert such a thing by completely separating the popular revolution that began there from its roots in the Arab Revolutions across the region, in Egypt and Tunisia, and the other uprisings that began in Algeria, Morocco, Bahrain, Yemen, Syria and Oman, as well as the protests in Iraq, and by failing to even acknowledge that the ‘rebels’ in Libya were revolutionary and received de facto support from NATO (yes, not for ‘pure’ humanitarian reasons, but the reasons do not matter much to a materialist, what matters is the act). Does Fidel think that the siege of Misrata by Gaddafi’s forces and the attack on Benghazi should have been allowed to go ahead, to proceed to their conclusion? The answer seems sadly to be, yes. With the firepower available to a modern army it is possible for a relatively small unpopular contingent, a regime, to massacre very many protesting people, perhaps to commit genocide, in order to protect its position. What was possible in the Cuban revolution (the armed guerrilla struggle against the unpopular regime) was not possible in Libya, with its different landscape (desert), number of people, and large number of foreign workers and the pre-planned use by the regime of foreign mercenaries, as well as the particular history of the borders being created to corral the Arab people into different areas capable of being overseen by imperial powers. None of this can be passed over without comment, and, frankly, the attempt to do so points to problems.

Let me skip this next bit of Fidel’s piece, where he refers to the 'race' of certain South American political leaders, I find it embarrassing that a communist should worry about ‘race’ in this way, and refer to Evo Morales as “pure millenary indigenous origin” as if it were by itself a good thing, as proof of something. It is not.

Fidel quotes extensively Chavez’s message to the UN:

“I address these words to the General Assembly of the United Nations Organization […] to confirm, on this day and in this forum, Venezuela’s total support of Palestinian statehood: the right of Palestine to become a free, sovereign and independent country. It is an act of historical justice to a people who have carried within themselves, always, all the pain and suffering of the world…”

Of which this support for Palestinian statehood is an exemplary Marxist position, without any doubt. Of the rest of the quotations we can only agree too, Chavez provides a very good, clear analysis of the Israel/Palestine situation.

We move on here to Fidel’s analysis of Obama’s comments on Tunisia and Egypt and the Arab Revolutions.

It is perhaps noteworthy that Chavez, at least in the quotes that Fidel sets before us, do not contain any reference to these massive revolutions, which you might think a little surprising from a communist point of view, and which you might think would have a profound bearing upon the Palestinian situation.

Fidel:

“…A bit later he [Obama] mentions Tunisia and takes credit for the popular movement which overthrew the government in that country, which was an ally of imperialism.
Even more astonishingly, Obama fails to acknowledge that the Untied States was responsible for the installation of the tyrannical, corrupt government in Egypt of Hosni Mubarak who, absconding with the principles of Nasser, allied himself with the imperialists, stole billions from his country and tyrannized his valiant people.”

This is true, but again rather rhetorical, and what can be said of Mubarak can equally be said of Gaddafi, they follow the same mould. And can we really expect a President of the US, even if he were to disagree with past US actions, to openly criticise past US foreign policy under past Presidents? Not really. So a ‘failure to acknowledge’ is not surprising and beside the point. What matters is what this relatively new President of the US does and is doing today. We know that the US supported these tyrannical leaders during the post WWII period and they should be and are condemned for that. What’s harder to explain here is not Obama’s position, but the small element of sleight-of-hand and evasion in this argument of Fidel’s.

Fidel quotes from Obama’s speech:

“Day after day, in the face of bullets and bombs, the Libyan people refused to give back that freedom. And when they were threatened by the kind of mass atrocity that often went unchallenged in the last century, the United Nations lived up to its charter. The Security Council authorized all necessary measures to prevent a massacre. The Arab League called for this effort; Arab nations joined a NATO-led coalition that halted Qaddafi’s forces in their tracks.
"Yesterday, the leaders of a new Libya took their rightful place beside us, and this week, the United States is reopening our embassy in Tripoli.
"This is how the international community is supposed to work — nations standing together for the sake of peace and security, and individuals claiming their rights.
"All of us have a responsibility to support the new Libya — the new Libyan government as they confront the challenge of turning this moment of promise into a just and lasting peace for all Libyans.
"The Qaddafi regime is over. Gbagbo, Ben Ali, Mubarak are no longer in power. Osama bin Laden is gone, and the idea that change could only come through violence has been buried with him.”

This is the point where Fidel’s logic begins to show the strain of its position. There is an attempt in the following, while commenting upon Obama’s speech, to make us somehow feel sorry for Osama bin Laden and the manner of his killing, and then, the (unproved, even un-evidenced in this article) re-invocation of Libya as a NATO conducted genocide is used to defend the Syrian regime from similar intervention and interference. There is no real challenge to Obama’s remarks on Libya, no grappling with the detail of the story of the conflict in Libya.

In effect, this is an attempt to theoretically defend the very obviously fascist regime in Syria from revolutionary justice, from the same justice as has been meted out in Tunisia and Egypt, against Ben Ali and Mubarak and their regimes.

By implication Fidel’s justification for his position is that US –

“…intelligence services along with those of Israel, systematically assassinate the most outstanding scientists involved in military technology”

This is decidedly weak. In those countries, this, while it may be true, does not mean (pretty obviously) that the peoples uprising in Syria (like in Libya) is any less legitimate. It just means it is complicated.

It is in any case, as Obama’s speech demonstrates with its calls for ‘peaceful transition’, by no means certain that any military intervention on the side of the people of Syria or Yemen will happen from the direction of the US or Europe, and certainly the interests of the US are at this moment on the side of the repressive regime in Bahrain, where a hypocritical reformist agenda is being supported (Fidel notes the US has the naval base there). But it would seem that from the statements of Fidel he would not support any help to the Bahraini, Syrian or Yemeni people either, anyway, so in this sense would be in fact in the same essential (materially speaking) boat as Obama -: the people, through weak theoretical pseudo justifications, must be left to ‘their own’ brutal repression. This kind of conclusion I suggest is not worthy of a communist or Marxist, doing nothing is not an option.

We move on here rapidly to the question of Israel and Palestine in Obama’s speech.

Says Fidel of Obama:

“He then launches into a long lecture explaining and justifying the inexplicable and unjustifiable”

He is right about this, what follows is mealy-mouthed and half baked pseudo justifications for the status quo to remain as it is, and Fidel points out -:

“The least Obama could have done was acknowledge that Israel's own citizens are tired of the squandering of resources invested in the military, denying them peace and access to the basic means of life. Like the Palestinians, they are suffering the consequences of policies imposed by the United States and the most bellicose, reactionary sectors of the Zionist state.”

And Fidel rightly shows how Obama edges sneakily from talking about Palestine into talking about nuclear weapons, and from here brings in the argument against Iran and North Korea, as if this has a bearing (unstated in an open fashion) on what can happen, or be allowed to happen, with the Palestinian situation.

When UNICEF confirms Cuba as the only Latin American country with no child malnutrition I consider this as more important to Cuba than the above theoretical disagreement. However, to the people suffering and fighting in Syria and Yemen, their own circumstances and the foreign support they get is more important to them, even if it is only theoretical support, and I think the position as regards much of the South American progressive leaderships towards their comrades in the Middle East and North Africa is inconsistent and mistaken in many crucial respects.

The Libyan intervention was and is a complex event. It did not happen in isolation from the people of Libya, who were uprising against the Gaddafi regime, nor did it happen in isolation from the revolutions that happened in neighbouring Arab countries, Tunisia and Egypt. This in itself is a great difference, and a crucial one, to that of Afghanistan and Iraq, which were imposed under false pretences. Also the method that NATO and the US used to intervene was different in terms of tactics and strategy: there was to be no occupying force, and the intervention sought approval from the Arab League and not only the UN Security Council.

Whilst the intervention was put forward ideologically as to be on ‘humanitarian grounds’ to protect the civilians from massacre and genocide (from Gaddafi’s forces and their threats), you cannot bomb people in a humanitarian fashion, and so we can see here the limits of the bourgeois understanding of its intervention as far as the UN is concerned. Yet this does not of itself de-legitimise the intervention. It had to be sided, and in fact it was sided. The notion of humanitarian protection was and is a myth that is always present in bourgeois ideology – the myth of the universal middle line, countering the false dialectic of opposed forces of good and evil, and the UN has to stick to this

The reasons for the NATO intervention were probably ‘impure’, in the sense that one consideration was probably the oil resources and that they (the nations represented by NATO) might lose access to them if they lost. Another reason was probably that Gaddafi often pretended to socialist credentials, and the intervention could ostensibly appear as also an anti-socialist intervention at a time when capitalist democracy was under severe threat from internal strife due to the economic crisis, i.e. in Spain and Greece in particular, and it wanted to portray itself as progressive but anti-socialist (famously Gaddafi was thought to perhaps be escaping to Venezuela in a mischievous comment by Hague). That Gaddafi was not socialist in any genuine sense seems to have been shown up even more through the revelations about western collusion with the regime since the liberation of Tripoli and since Gaddafi has reverted to being the terrorist that he always aided while keeping up the rhetoric against terrorism.

But to understand the reasons for the intervention we must understand what it would have meant had the western powers generally sided with the forces of reaction in the Middle East and North Africa, against specifically the Egyptian people. Faced with such an obvious and open reactionary stance, the people of Europe, already angry at the austerity measures being thrown at them, would be far more sure of who their social enemy was. After the Libya intervention, the global bourgeoisie have for once shown a small progressive side, and we must give credit to the people of Europe for pressurising for this. At the same time, though, if the Tunisian and Egyptian people had not struggled quite so hard and not been so brave and resolute, the western powers would have continued to support these regimes in total.

It is clear at the moment that the Arab revolution is not over, that it has many facets, and that the position of the advanced western powers towards them vacillates. The circumstances, however, of the Palestinian people are now greatly enhanced. No longer do they need to see the endless almost ritual violence between the Israeli rightist government and the Palestinian factional leaders as the only ‘solution’, or the fake ‘peace negotiations’. Now the solution appears to be happening by default through the revolutions in the region, and it is with these revolutions that the Palestinians will find their goal, as too will the Israeli ordinary people, who have shown that their voice is also being ignored and that they too are part of the movement.