01/05/2019

The French poet Charles Baudelaire wrote in 1864 that “the cleverest ruse of the Devil is to persuade you he does not exist!”¹ I will argue here that this is directly applicable to today’s neoliberals, whose devil’s ruse is to pretend they do not exist. Although neoliberalism is widely recognized as the central political-ideological project of twenty-first-century capitalism, it is a term that is seldom uttered by those in power. In 2005, the New York Times went so far as to make neoliberalism’s nonexistence official by running an article entitled “Neoliberalism? It Doesn’t Exist.”²

Behind this particular devil’s ruse lies a deeply disturbing, even hellish, reality. Neoliberalism can be defined as an integrated ruling-class political-ideological project, associated with the rise of monopoly-finance capital, the principal strategic aim of which is to embed the state in capitalist market relations. Hence, the state’s traditional role in safeguarding social reproduction—if largely on capitalist-class terms—is now reduced solely to one of promoting capitalist reproduction. The goal is nothing less than the creation of an absolute capitalism. All of this serves to heighten the extreme human and ecological destructiveness that characterizes our time.

The Origins of Neoliberalism

The notion of neoliberalism is nearly a century old, although its main political influence is much more recent. It first arose as an ideology in the early 1920s in the face of the collapse of liberalism nearly everywhere in Europe, and in response to the rise of German and Austrian social democracy, particularly developments in Red Vienna.³ It had its first notable appearance in Austrian economist and sociologist Ludwig von Mises’s three works: Nation, State, and Economy (1919), Socialism (1922), and Liberalism (1927).⁴ Mises’s ideas were immediately recognized as representing a sharp departure from classical liberalism, leading the prominent Austro-Marxist Max Adler to coin the term neoliberalism in 1921. Mises’s Socialism was subjected to a sharp critique by another gifted Austro-Marxist, Helene Bauer, in 1923 and to a more extended critique entitled “Neoliberalism” by the German Marxist Alfred Meusel, writing for Rudolf Hilferding’s Die Gesellschaft in 1924.⁵

For Meusel and Bauer, the neoliberal doctrine presented by Mises was far removed from classical liberalism and constituted a new doctrine devised for the era of “mobile capital” or finance capital, of which Mises was a “faithful servant.”⁶ It was expressly aimed at justifying the concentration of capital, the subordination of the state to the market, and an openly capitalist system of social control. Mises’s neoliberalism, Meusel wrote, was characterized by the “merciless radicalism with which he attempts to derive the totality of social manifestations from a single principle” of competition. Everything opposed to the complete ascendance of the competitive principle was characterized by Mises as “destructionism,” which he equated with socialism. For Mises, Charles Dickens, William Morris, George Bernard Shaw, H. G. Wells, Émile Zola, Anatole France, and Leo Tolstoy were all “without perhaps being aware of it…recruiting agents for Socialism…paving the way for destructionism,” while actual Marxists were nothing more than destructionists, pure and simple.⁷

In Liberalism, Mises explicitly distinguished between “the older liberalism and neoliberalism” on the basis of the former’s commitment, at some level, to equality, as opposed to the complete rejection of equality (other than equality of opportunity) by the latter.⁸ The question of democracy was resolved by Mises in favor of “a consumers’ democracy.” Where democracy is concerned, he wrote, “free competition does all that is needed.… The lord of production is the consumer.”⁹

Mises was to exert an enormous influence on his younger follower Friedrich von Hayek, who was originally drawn to Mises’s Socialism and who attended Mises’s private seminars in Vienna. They shared a hatred of the Austro-Marxists’ Red Vienna of the 1920s. In the early 1930s, Hayek left Vienna for the London School of Economics at the invitation of Lionel Robbins, an early British neoliberal economist. Mises took on the role of economic consultant to the Austrofascist Chancellor/dictator Engelbert Dollfuss prior to the Nazi takeover. In his work Liberalism, Mises declared: “It cannot be denied that Fascism and similar movements [on the right] aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history.”¹⁰ He later emigrated to Switzerland and then to the United States with the support of the Rockefeller Foundation, taking up a teaching post at New York University.

The Great Transformation Reversed

The most important critique of neoliberalism in the early post-Second World War years was to be Karl Polanyi’s attack on the myth of the self-regulating market in The Great Transformation, published in 1944, at a time when the allied victory was already certain and the nature of the postwar order in the West was becoming clear. Polanyi’s critique grew out of his earlier defense of Red Vienna in the 1920s, where he had identified to a considerable extent with Austro-Marxists like Adler and Otto Bauer, strongly opposing the views of Mises, Hayek, and others on the right. The neoliberal project, Polanyi explained in The Great Transformation, was to embed social relations in the economy, whereas prior to capitalism the economy had been “embedded in social relations.”¹¹ Polanyi’s book, however, appeared in a context in which it was assumed that the neoliberal perspective was all but doomed, with the “great transformation” standing for the triumph of state regulation of the economy, at a time when John Maynard Keynes was recognized as the dominant figure in state-economic policy, in what came to be known as the Age of Keynes.

Nevertheless, Polanyi’s deeper concerns regarding attempts to rejuvenate market liberalism were, in part, justified. The Walter Lippmann Colloquium held in France in 1938, just prior to the outbreak of the Second World War, with Mises and Hayek both present, had constituted the first step at creating a capitalist international among major intellectual figures. At the time, the term neoliberalism was explicitly adopted by some participants, but was to be later abandoned, no doubt with the memory of the strong critiques that arose in the 1920s.¹² Still, the neoliberal project was taken up again after the war. In 1947, a mere three years after the publication of Polanyi’s The Great Transformation, the Mont Pèlerin Society was established. It was to become the institutional basis, along with the University of Chicago Department of Economics, for the reemergence of neoliberal views. A key participant in the inaugural conference, in addition to Mises, Hayek, Robbins, Milton Friedman, and George Stigler, was Karl Polanyi’s younger brother, Michael Polanyi, the noted chemist, philosopher of science, and virulent Cold Warrior.¹³

Keynesianism dominated the entire period of what is now sometimes called the Golden Age of capitalism in the first quarter-century after the Second World War. But in the mid–1970s, with the appearance of a major economic crisis and the beginnings of economic stagnation first manifested as stagflation, Keynesianism disappeared within the economic orthodoxy. It was to be replaced by neoliberalism, first in the guise of monetarism and supply-side economics, and then in the form of a generalized restructuring of capitalism worldwide and the creation of a market-determined state and society.¹⁴

The critical figure who best captured the essence of neoliberalism almost the moment that it rose to dominance, analyzing it extensively in his 1979 lectures at the Collège de France on The Birth of Biopolitics, was Michel Foucault.¹⁵ As Foucault brilliantly explained, the role of the state is no longer to protect property, as in Adam Smith, or even to be an executive for the common interests of the capitalist class, as in Karl Marx. Rather, its role under neoliberalism became one of the active expansion of the market principle, or the logic of capitalist competition, to all aspects of life, engulfing the state itself. As Foucault wrote,

Instead of accepting a free market defined by the state and kept as it were under state supervision—which was, in a way, the initial formula of liberalism, [neoliberals]…turn the formula around and adopt the free market as [the] organizing and regulating principle of the state.… In other words: a state under the supervision of the market rather than a market supervised by the state.…

And what is important and decisive in current neo-liberalism can, I think, be situated here. For we should not be under any illusion that today’s neo-liberalism is, as is too often said, the resurgence or recurrence of old forms of liberal economics which were formulated in the eighteenth and nineteenth centuries and are now being reactivated by capitalism for a variety of reasons to do with its impotence and crises as well as with some more or less local and determinate political objectives. In actual fact, something much more important is at stake in modern neo-liberalism.… What is at issue is whether a market economy can in fact serve as the principle, form, and model for a state which, because of its defects, is mistrusted by everyone on both the right and the left, for one reason or another.¹⁶

In a nutshell, Foucault declared: “The problem of neo-liberalism is…how the overall exercise of political power can be modeled on the principles of the market economy.” Its single-minded goal is “privatized social policy.”¹⁷

In the neoliberal era, the state was not to intervene to counter the effects of the system, but was simply to promote through its interventions the spread of the rule-based system of the market into all recesses of society. It was thus the guarantor of a self-regulating and expansive market, from which neither the society nor the state itself were immune.¹⁸ Monopoly and oligopoly were no longer considered violations of the principle of competition, but mere manifestations of competition itself.¹⁹ Perhaps most important in distinguishing classical liberalism and neoliberalism, according to Foucault, was the emphasis of the former on a fictional equal exchange or quid pro quo. For neoliberalism, in contrast, free competition, reinterpreted to embrace monopoly power and vast inequalities, was the governing principle, not exchange.²⁰

The overriding of the state’s social-reproductive role in favor of neoliberal financialization was most apparent, Foucault argued, in the demise of social insurance, along with all forms of social welfare. In the neoliberal system, “it is up to the individual [to protect himself against risks] through all the reserves he has at his disposal,” making the individual prey to big business without any protection from the state. The result of this shift was the further growth of privatized financial assets monopolized by a very few.²¹

Neoliberalism, conceived in this way, is the systematic attempt to resolve the base-superstructure problem, perceived as an obstacle to capital, through the introduction of “a general regulation of society by the market” to be carried out by a state—itself subordinated to the market principle. This new capitalist “singularity” is to be extended to all aspects of society, as an all-inclusive principle from which no exit is possible.²² Even economic crises are to be taken as mere indicators of the need to extend the logic of the market further.

As Craig Allan Medlen, building on Paul A. Baran and Paul M. Sweezy’s Monopoly Capital, explains in Free Cash, Capital Accumulation and Inequality, today’s neoliberal order involves a systematic shift in the “boundary line” between state economic activities and the private sector. This boundary line has now shifted decisively against the state, leaving little room for the state’s own consumption and investment, outside of the military sector, and with the state increasingly subsidizing the market and capital through its fiscal and monetary operations.²³

When neoliberalism reemerged in the late 1970s, it was thus as an opportunistic virus in a period of economic sickness.²⁴ The crisis of Keynesianism was related to deepening problems of surplus capital absorption or overaccumulation in the developing monopoly-capitalist economy. Neoliberal restructuring arose in these circumstances first in the forms of monetarism and supply-side economics, and then evolved into its current form with the financialization of the system, itself a response to economic stagnation. With the growth of excess capacity and stagnant investment, money capital increasingly flowed into the financial sector, which invented new financial instruments with which to absorb it.²⁵ Financial bubbles propelled the economy forward. None of this, however, removed the underlying stagnation tendency. In the decade since the Great Recession, as distinguished from all previous post-Second World War decades, the capacity-utilization rate in manufacturing in the United States has never surpassed 80 percent—a level chronically insufficient to ignite net investment.²⁶

All of this reflects the transition from twentieth-century monopoly capital to twenty-first-century monopoly-finance capital.²⁷ This is evident in an explosion of credit and debt, institutionalized within the system despite periodic financial crises, leading to a whole new financial architecture for amassing wealth. The seizure of excess profits on a world scale through the new imperialism of the global labor arbitrage was made possible by digital systems of financial and technological control, and the opening of the world market after 1989. All of this has culminated in a globalized process of financialization and value capture, directed by the financial headquarters of multinational corporations at the apex of the capitalist world economy.²⁸

The diminishing role of the state both as an instrument of popular sovereignty and of social protection has led to a crisis of liberal democracy. The greatest inequality in history plus the undermining of the economic and social conditions of the vast majority of the population has given rise to massive, but still largely inarticulate, discontent.²⁹ Capital’s response to this destabilizing situation has been to try to mobilize the largely reactionary lower-middle class against both the upper-middle class and the working class (especially through racist attacks on immigrants), while making the state outside the market the enemy—a strategy that David Harvey has recently referred to as a developing “alliance” between neoliberalism and neofascism.³⁰

Absolute Capitalism and Social-System Failure

In Foucault’s interpretation, neoliberalism is as remote from laissez-faire as it is from Keynesianism. As Hayek argued in The Constitution of Liberty, the neoliberal state is an interventionist, not laissez-faire, state precisely because it becomes the embodiment of a rule-governed, market-dictated economic order and is concerned with perpetuating and extending that order to the whole of society. If the neoliberal state is noninterventionist in relation to the economic sphere, it is all the more interventionist in its application of commodity principles to all other aspects of life, such as education, insurance, communications, health care, and the environment.³¹

In this ideal, restructured neoliberal order, the state is the embodiment of the market and is supreme only insofar as it represents the law of value, which in Hayek’s terms is virtually synonymous with the “rule of law.”³² The hegemonic class-property relations are encoded in the juridical structure and the state itself is reduced to these formal economic codes embodied in the legal system.³³ What Hayek means by “the rule of law,” according to Foucault, is the imposition of “formal economic legislation” that “is quite simply the opposite of a plan. It is the opposite of planning.” The object is to establish “rules of the game” that prevent any deviation from the logic of commodity exchange or capitalist competition, while extending these relations further into society, with the state as the ultimate guarantor of market supremacy.³⁴ Foucault contends that this principle was most explicitly enunciated by Michael Polanyi, who wrote in The Logic of Liberty: “The main function of the existing spontaneous order of jurisdiction is to govern the spontaneous order of economic life.… [The] system of law develops and enforces the rules under which the competitive system of production and distribution operates.”³⁵

Hence, the supremacy of the dominant social relations of production or hegemonic class-property forms is encoded in the rule of a commodified legal structure. The new Leviathan, which has discarded any precapitalist trappings, is no longer a force above or external to the realm of commodity exchange—that is, a superstructure—but is subordinated to the logic of the market, which it is its role to enforce.³⁶ This, Foucault suggests, is Max Weber’s rational-legal order, which turns out to be simply the imposition of formal economic relations circumscribing the state. At the same time, the state is given the role of enforcing this new privatized order through its monopoly of the legitimate use of force.³⁷

Hence, Abraham Bosse’s famous frontispiece for Thomas Hobbes’s Leviathan, depicting the giant sovereign composed of individuals who have transferred their sovereignty to the monarch, would today take the form of a giant rational-legal individual in a two-piece suit composed internally of corporations, replacing the multitude.³⁸ The crownless sovereign power would now be portrayed as holding not a scepter in one hand and a sword in the other, but the fourteenth amendment of the U.S. Constitution (originally meant to ensure the rights of former slaves but transformed into the basis of corporate personhood) in one hand and a cruise missile in the other. The neoliberal Leviathan is a state that increasingly has a single function and follows a single market logic—and in those terms alone it is absolute and represents an absolutist capitalism.

Naturally, absolute capitalism is not without contradictions, of which five stand out: economic, imperial, political, social-reproductive, and environmental. Together, they point to a general system failure. The economic-crisis tendencies are best viewed from the standpoint of Marx’s wider critique of the laws of motion of capital. Economically, neoliberalism is a historical-structural product of an age of mobile monopoly-finance capital that now operates globally through commodity chains, controlled by the financial headquarters of the multinational corporations in the core of the world economy, which dominate international capital flows.³⁹ The inherent instability of the new absolute capitalism was marked by the Great Financial Crisis of 2007–9.⁴⁰ Overaccumulation and stagnation remain the central economic contradictions of the system, leading to corporate mergers and financialization (the shift toward the amassing of financial assets by speculative means) as the main countervailing factors. All of this, however, simply exacerbates the top-heavy character of twenty-first-century capitalism intensifying its already-existing long-term tendencies toward disequilibrium and crisis.⁴¹

Neoliberal globalization refers specifically to the system of global labor arbitrage and commodity chains, coupled with the growth of worldwide monopolies. The fulcrum of this form of imperialism is the systematic exploitation of the fact that the difference in wages between the global North and South is greater than the difference in their productivities. This creates a situation whereby the low unit labor costs in emerging economies in the global South become the basis of today’s supply chains and the new system of value capture.⁴² These international economic conditions mark the advent of a new imperialism that is generating increasing global inequality, instability, and world struggle, made worse in our age by declining U.S. hegemony, which points to the prospect of widening and unlimited war.

As indicated above, the neoliberal regime represents a new synergy of state and market, with the increasing subordination of the social-reproduction activities of the state to capitalist reproduction. Whole sections of the state, such as central banking, and the main mechanisms of monetary policy, are outside effective governmental control and under the sway of financial capital. Under these circumstances, the state is increasingly viewed by the population today as an alien entity. This raises contradictions with respect to the three key social classes below the super-rich and the rich: the upper-middle class, the lower-middle class, and the working class.

In a broad sketch focusing on advanced capitalist society, the upper-middle class can be seen as consisting predominantly of a professional-technical stratum deeply suspicious of any attacks on government, since its position is dependent not simply on its economic class but also on the general system of political rights. It is therefore wedded to the liberal-democratic state. In contrast, when taken by itself, the lower-middle class, made up mainly of small business owners, middle management, and corporate-based white-collar salaried and sales workers (particularly the white, less-educated, rural, and fundamentalist-religious sectors), is generally antistate, procapital, and nationalist. It sees the state as chiefly benefitting its two main enemies: the upper-middle class and the working class—the former perceived as benefitting directly from the state, the latter increasingly designated in racial terms.⁴³ The lower-middle class includes what C. Wright Mills called “the rearguarders” of the capitalist system, mobilized by the wealthy in times of crisis when a defense of capitalist interests is considered essential, but represents in itself an extremely volatile element of society.⁴⁴ The working class, essentially the bottom 60 percent of income earners in the United States, is the most oppressed and most diverse population (and thus the most divided), but nonetheless the enemy of capital.⁴⁵

The biggest threat to capital today, as in the past, is the working class. This is true both in the advanced capitalist countries themselves and even more so in the periphery, where the working class overlaps with the dispossessed peasantry. The working class is most powerful when able to combine with other subaltern classes as part of a hegemonic bloc led by workers (this is the real meaning of the Occupy Wall Street movement’s “we are the 99%”).

The 1 percent thus find themselves potentially without a political base, which remains necessary to continue the neoliberal, absolute-capitalist project. Thus, from Donald Trump to Jair Bolsonaro, we see the emergence of a tenuous working relationship between neoliberalism and neofascism, meant to bring the rear guard of the system into play. Here, the goal is to enlist the white, rural, religious, nationalistic lower-middle class as a political-ideological army on behalf of capital. But this is fraught with dangers associated with right-wing populism and ultimately threatens the demise of the liberal-democratic state.⁴⁶

The major gender, race, community, and class contradictions of capitalist society today reflect crises that extend beyond the narrow confines of workplace exploitation to the wider structures in which the lives of working people are embedded, including the major sites of social reproduction: family, community, education, health systems, communications, transportation, and the environment. The destruction of these sites of social reproduction, along with deteriorating working conditions, has brought back what Frederick Engels called “social murder,” manifested in the declining life expectancy in recent years in the mature capitalist economies.⁴⁷ It is in these wider social domains that such issues as the feminization of poverty, racial capitalism, homelessness, urban-community decay, gentrification, financial expropriation, and ecological decline manifest themselves, creating the wider terrains of class, race, social-reproductive, and environmental struggle, which today are merging to a remarkable degree in response to neoliberal absolute capitalism.⁴⁸

The conflict between absolute capitalism and the environment is the most serious contradiction characterizing the system in this (or any)phase, raising the question of a “death spiral” in the human relation to the earth in the course of the present century.⁴⁹ The age of ecological reform, in the 1970s, was soon displaced by a new age of environmental excess. In absolute capitalism, absolute, abstract value dominates. In a system that focuses above all on financial wealth, exchange value is removed from any direct connection to use value. The inevitable result is a fundamental and rapidly growing rift between capitalist commodity society and the planet.

Exterminism or Revolution

As we have seen, Mises employed the notion of destructionism to characterize the role of socialism. So important was this in his perspective that he devoted the entire fifty-page-long Part 5 of his book Socialism to this topic. “Socialism,” he wrote, “does not build; it destroys. For destruction is the essence of it.” It simply carries out the “consumption of capital” with no replacement or increase. Destructionism was best characterized, in his view, as a society that in the present consumed to the utmost extent, with no concern for the future of humanity—a future which he saw as residing in the accumulation of capital.⁵⁰

Ironically, today’s monopoly-finance capital is typified by the very kinds of absolute destructionism that Mises so deplored. Although technological change (particularly via the military) continues to advance, capital accumulation (investment) is stagnant at the center of the system, except where spurred on temporarily by tax cuts on corporations and privatization of state activities. Meanwhile, income and wealth inequality is rising to stratospheric levels; workers worldwide are experiencing a decline in material conditions (economic, social, and ecological); and the entire planet as a place of human habitation is in jeopardy. All this is the result of a system geared toward the most egregious forms of exploitation, expropriation, waste, and predation on a world scale. Science now tells us that the capitalist juggernaut, if present trends continue, will soon undermine industrial civilization and threaten human survival itself—with many of the worst effects occurring during the lifetime of today’s younger generations.

A useful reference point, with which to gain a historical and theoretical perspective on the present planetary emergency, is Marx and Engels’s analysis of conditions in colonial Ireland from the 1850s to the 1870s.⁵¹ Here, the operative term was extermination. As Marx wrote in 1859, English (and Anglo-Irish) capitalists after 1846—marking the Great Irish Famine and the Repeal of the Corn Laws—were involved in “a fiendish war of extermination against the cotters,” or the mass of Irish peasant subsistence farmers “ground to the dust” and dependent on the cultivation of potatoes as a subsistence crop. Irish soil nutrients were being exported with Irish grain, without return, to feed English industry.⁵² The decades immediately following the Great Famine were thus referred to by Engels as the Period of Extermination.⁵³ The term extermination as used here by Marx and Engels, along with many of their contemporaries, had two related meanings at the time: expulsion and annihilation.⁵⁴ Extermination thus summed up the terrible conditions then facing the Irish.

At the root of the Irish problem in the mid–nineteenth century was a “more severe form of the metabolic rift” associated with the colonial system.⁵⁵ With the gradual expulsion and annihilation after 1846 of the poor peasant farmers, who had been responsible for fertilizing the soil, the entire fragile ecological balance underlying the production of crops and the replacement of nutrients in Ireland was destabilized. This encouraged further rounds of clearances, expulsion of the peasantry, consolidation of farms, and the replacement of tillage with pasture geared to English meat consumption. The Irish peasants were thus faced, as Marx put it in 1867, with a choice between “ruin or revolution.”⁵⁶

Today, analogous conditions are arising on a planetary scale, with subsistence farmers everywhere finding their conditions undermined by the force of global imperialism. Moreover, ecological destruction is no longer mainly confined to the soil, but has been extended to the entire Earth System, including the climate, endangering the population of the earth in general and further devastating those already existing in the most fragile conditions. In the 1980s, Marxist historian E. P. Thompson famously penned “Notes on Exterminism, the Last Stage of Civilisation” examining planetary nuclear and environmental threats.⁵⁷ It is no secret that human lives in the hundreds of millions, perhaps billions, are threatened this century by material destruction—ecological, economic, and military/imperial. Innumerable numbers of species are now on the brink of extinction. Industrial civilization itself faces collapse with a 4°C increase in global average temperature, which even the World Bank says is imminent with the continuation of today’s business as usual.⁵⁸ Hence, the old socialist slogan famously associated with Rosa Luxemburg, Socialism or Barbarism!, is no longer adequate and must be replaced either by Socialism or Exterminism!, or with Marx’s Ruin or Revolution!

The neoliberal drive to absolute capitalism is accelerating the world toward exterminism or destructionism on a planetary scale. In perpetrating this demolition, capital and the state are united as never before in the post-Second World War world. But humanity still has a choice: a long ecological revolution from below aimed at safeguarding the earth and creating a world of substantive equality, ecological sustainability, and satisfaction of communal needs—an ecosocialism for the twenty-first century.

1. ↩ Charles Baudelaire, “The Generous Player,” in Baudelaire: His Prose and Poetry, ed. Thomas R. Smith (New York: Modern Library, 1919), 82.
2. ↩ Daniel Altman, “Neoliberalism? It Doesn’t Exist,” New York Times, July 16, 2005. Altman’s article begins by mocking frequent Monthly Review author Patrick Bond (they apparently sat next to each other on a plane) for believing that neoliberalism exists, and for seeing it as connected to contemporary imperialism and issues such as the commodification of water. “The problem is,” Altman, himself clearly a neoliberal, writes, “the real neoliberals don’t seem to exist.”
3. ↩ On the collapse of liberalism in the 1920s, see Eric Hobsbawm, The Age of Extremes (New York: Pantheon, 1994), 109–41.
4. ↩ Ludwig von Mises, Nation, State, and Economy (Indianapolis: Liberty Fund, 1983), Socialism (Indianapolis: Liberty Fund, 1981), Liberalism (Indianapolis: Liberty Fund, 2005).
5. ↩ Phillip W. Magness, “The Pejorative Origins of the Term ‘Neoliberalism,’” American Institute for Economic Research, December 10, 2018; Peter Goller, “Helene Bauer Gegen die Neoliberal Bürgliche Ideologie von Ludwig Mises (1923),” Mitteilungen der Alfred Klahr Gesellschaft 4 (2005), http:// klahrgesellschaft.at; Alfred Meusel, “Zur Bürgerlichen Sozialkritik der Gegenwart: Der Neu-Liberalismus (Ludwig von Mises),” Die Gesellschaft: Internationale Revue für Sozialismus und Politik 1, no. 4 (1924): 372–83. For a more detailed discussion of the early origins of neoliberalism and a more complete set of citations, see John Bellamy Foster, “Capitalism Has Failed—What Next?,” Monthly Review 70, no. 9 (February 2019): 1–24.
6. ↩ Meusel, “Der Neu-Liberalismus,” 383. The term mobile capital gained currency in Marxian theory through Rudolf Hilferding’s Finance Capital. See Rudolf Hilferding, Finance Capital (London: Routledge, 1981), 325–30, 342.
7. ↩ Meusel, “Der Neu-Liberalismus,” 372–73, Mises, Socialism, 413, 422. I would like to thank Joseph Fracchia for translations from the German.
8. ↩ Mises, Liberalism, 9.
9. ↩ Mises, Socialism, 400–401.
10. ↩ Mises, Liberalism, 30; Herbert Marcuse, Negations (Boston: Beacon, 1968), 10.
11. ↩ Karl Polanyi, The Great Transformation (Boston: Beacon, 1944), 57. Polanyi’s analysis of embeddedness, which is at the center of his critique of neoliberalism, was originally based on Marx’s discussion of Aristotle’s inability to fully explore the distinction that he had made between use value and exchange value, given that the separation of economy from its embeddedness in the polis had not yet taken place. Polanyi’s treatment is thus most fully developed in “Aristotle Discovers the Economy,” in Trade and Market in the Early Empires, Karl Polanyi, Conrad M. Arensberg, and Harry W. Pearson (Glencoe, Illinois: The Free Press, 1957), 64–94.
12. ↩ Philip Mirowski, Never Let a Serious Crisis Go to Waste (London: Verso, 2013), 24, 37–50.
13. ↩ Eamonn Butler, “A Short History of the Mont Pèlerin Society,” The Great Offshore, “Mont Pelerin Society” (encyclopedia entry) http://rybn.org/thegreatoffshore.
14. ↩ For an important work that described this transition as it was occurring, concentrating on the role of international economic elites, see Joyce Kolko, Restructuring the World Economy (New York: Pantheon, 1988).
15. ↩ Michel Foucault, The Birth of Biopolitics (New York: Palgrave Macmillan, 2008).
16. ↩ Foucault, The Birth of Biopolitics, 116–17.
17. ↩ Foucault, The Birth of Biopolitics, 131, 145.
18. ↩ Foucault, The Birth of Biopolitics, 145.
19. ↩ Foucault, The Birth of Biopolitics, 133–38, 176–78; Joseph Schumpeter, Capitalism, Socialism, and Democracy (New York: Harper and Row, 1942), 81–86; Mirowski, Never Let a Serious Crisis Go to Waste, 64; Mises, Socialism, 344–51; George Stigler, Memoirs of an Unregulated Economist (New York: Basic, 1988), 92, 162–63.
20. ↩ Foucault, The Birth of Biopolitics, 118. Foucault’s remarks are related to the comments of Baran and Sweezy on how capitalism with growing monopoly has abandoned its classical principle of quid pro quo. Paul A. Baran and Paul M. Sweezy, Monopoly Capital (New York: Monthly Review Press, 1966), 336–41.
21. ↩ Foucault, The Birth of Biopolitics, 145. The square brackets in the quotation were inserted by the editor of Foucault’s lectures.
22. ↩ Foucault, The Birth of Biopolitics, 145, 165.
23. ↩ Craig Allan Medlen, Free Cash, Capital Accumulation and Inequality (London: Routledge, 2019), 149–69; Baran and Sweezy, Monopoly Capital, 142–77.
24. ↩ Samir Amin, The Liberal Virus (New York: Monthly Review Press, 2004).
25. ↩ See Harry Magdoff and Paul M. Sweezy, Stagnation and the Financial Explosion (New York: Monthly Review Press, 1987); John Bellamy Foster and Fred Magdoff, The Great Financial Crisis (New York: Monthly Review Press, 2009); John Bellamy Foster and Robert W. McChesney, The Endless Crisis (New York: Monthly Review Press, 2012); Costas Lapavitsas, Profiting Without Producing (London: Verso, 2014); and Medlen, Fresh Cash, Capital Accumulation and Inequality.
26. ↩ Federal Reserve Board of Saint Louis Economic Research, FRED, “Capacity Utilization: Manufacturing,” February 2019 (updated March 27, 2019), http://fred.stlouisfed.org.
27. ↩ Foster and Magdoff, The Great Financial Crisis, 63–76.
28. ↩ On the imperialist aspects of this, see John Smith, Imperialism in the Twenty-First Century (New York: Monthly Review Press, 2016); Intan Suwandi, R. Jamil Jonna, and John Bellamy Foster, “Global Commodity Chains and the New Imperialism,” Monthly Review 70, no. 10 (March 2019): 1–24. On the connection between financialization and expropriation, see Lapavitsas, Profiting Without Producing, 141–47, 166–68.
29. ↩ On the deepening global inequality, see Jason Hickel, The Divide (New York: W. W. Norton, 2017).
30. ↩ David Harvey, “The Neoliberal Project Is Alive but Has Lost Its Legitimacy,” Wire, February 9, 2019. See also John Bellamy Foster, Trump in the White House (New York: Monthly Review Press, 2017).
31. ↩ F. A. Hayek, The Constitution of Liberty (Chicago: Henry Regnery, 1960), 221.
32. ↩ Hayek, The Constitution of Liberty, 232–33.
33. ↩ Michael Tigar, Mythologies of State and Monopoly Power (New York: Monthly Review Press, 2018).
34. ↩ Foucault, The Birth of Biopolitics, 171–73; Hayek, The Constitution of Liberty, 220–33.
35. ↩ Michael Polanyi, The Logic of Liberty (Chicago: University of Chicago Press, 1951), 185; Foucault, The Birth of Biopolitics, 174; Hayek, The Constitution of Liberty, 220–33. See also Tigar, Mythologies of State and Monopoly Power.
36. ↩ “Why Leviathan?… The answer is both very simple and painfully difficult. Very simple in the sense that the state—despite the great variety of its forms, as constituted in history, from the time of the so-called oriental despotism and the early empires to the Modern Liberal State—cannot be other than Leviathan in imposing its structurally entrenched power on overall societal decision-making” (István Mészáros, “Preface to Beyond Leviathan,” Monthly Review 69, no. 9 [February 2018]: 47). While this remains true, in neoliberalism the state is selectively withered away in its relation to capital, confined by its own self-imposed rational-legal character that must conform to the formal economic laws of the capitalist system, of which it is, paradoxically, the main legitimating force and official guarantor. The extent of these limitations is apparent whenever a social democratic government is brought to power, thinking it can institute reforms, only to discover that it is compelled to enforce neoliberal policies.
37. ↩ Foucault, The Birth of Biopolitics, 105, 172.
38. ↩ “Leviathan Frontispiece,” Willamette.edu.
39. ↩ See Samir Amin, Modern Imperialism, Monopoly Finance Capital, and Marx’s Law of Value (New York: Monthly Review Press, 2018). On the role of neoliberalism to finance, see also Gérard Duménil and Dominique Lévy, Capital Resurgent (Cambridge, Massachusetts: Harvard University Press, 2004), 110–18; David Harvey, The Enigma of Capital (Oxford: Oxford University Press, 2010), 11.
40. ↩ The extreme monetization of information in our era induced by the Internet has led to an era of surveillance capitalism. See John Bellamy Foster and Robert W. McChesney, “Surveillance Capitalism,” Monthly Review 66, no. 3 (July–August 2014); Shoshana Zuboff, The Age of Surveillance Capitalism (New York: Public Affairs, 2019).
41. ↩ John Bellamy Foster and Michael D. Yates, “Piketty and the Crisis of Neoclassical Economics,” Monthly Review 66, no. 6 (November 2014): 1–24.
42. ↩ Suwandi, Jonna, and Foster, “Global Commodity Chains and the New Imperialism”: 15.
43. ↩ On the class analysis provided here and its relation to neoliberalism and neofascism, see Foster, Trump in the White House.
44. ↩ C. Wright Mills, White Collar (Oxford: Oxford University Press, 1951), 353–54.
45. ↩ R. Jamil Jonna and John Bellamy Foster, “Beyond the Degradation of Labor,” Monthly Review 66, no. 5 (October 2014): 7. For a rough demarcation of the major class divisions in the United States, see Dennis Gilbert, The American Class Structure in an Age of Growing Inequality (Los Angeles: Sage, 2011), 14, 243–47. The divisions between the working class and the lower-middle class obviously cannot be determined with precision. As Karl Marx wrote, “Middle and transitional levels always conceal the boundaries.” Karl Marx, Capital, vol. 3 (London: Penguin, 1981), 1025.
46. ↩ See Henry A. Giroux, “The Nightmare of Neoliberal Fascism,” Truthout, June 10, 2018.
47. ↩ Karl Marx and Frederick Engels, Collected Works, vol. 4 (New York: International, 1975), 330.
48. ↩ There has recently been a convergence of Marxian analyses of ecological crisis, social reproduction, and racial capitalism, all of which increasingly emphasize the dialectic of exploitation and expropriation. See Nancy Fraser, “Behind the Hidden Abode,” New Left Review 86 (2014): 60–61; Michael D. Yates, Can the Working Class Change the World? (New York: Monthly Review Press, 2018), 52–56; Michael C. Dawson, “Hidden in Plain Sight,” Critical Historical Studies 3, no. 1 (2016): 143–61; John Bellamy Foster and Brett Clark, “The Expropriation of Nature,” Monthly Review 69, no. 10 (March 2018): 1–27.
49. ↩ George Monbiot, “The Earth Is in a Death Spiral. It Will Take Radical Action to Save Us,” Guardian, November 14, 2018.
50. ↩ Mises, Socialism, 413–14, 452.
51. ↩ The brief comments on Marx and Engels’s Irish writings here are inspired by research I have carried out with Brett Clark to be included in our forthcoming book, The Robbery of Nature (New York: Monthly Review Press, 2020).
52. ↩ Karl Marx and Frederick Engels, Ireland and the Irish Question (Moscow: Progress, 1971), 90, 124; Karl Marx, Capital, vol. 1 (London: Penguin, 1976), 860.
53. ↩ Marx and Engels, Ireland and the Irish Question, 210.
54. ↩ “Extermination,” The Compact Edition of the Oxford English Dictionary (Oxford: Oxford University Press, 1971), 938.
55. ↩ Eamonn Slater, “Marx on the Colonization of Irish Soil” (Maynooth University Social Science Institute Working Paper Series no. 3, January 2018), 40.
56. ↩ Marx and Engels, Ireland and the Irish Question, 142.
57. ↩ E. P. Thompson, Beyond the Cold War (New York: Pantheon, 1982), 41–79. Thompson made it clear at times that he thought of exterminism as generally applicable to the environment. Others were to develop this notion explicitly in terms of ecological crisis. See especially Rudolf Bahro, Avoiding Social and Ecological Disaster (Bath: Gateway, 1994), 19–25; John Bellamy Foster, The Ecological Revolution (New York: Monthly Review Press, 2009), 22–28; and Ian Angus, Facing the Anthropocene (New York: Monthly Review Press, 2016), 179–80.
58. ↩ David Roberts, “The Brutal Logic of Climate Change,” Grist, December 6, 2011; World Bank, Turn Down the Heat: Why a 4°C Warmer World Must Be Avoided (Washington, D.C.: World Bank, 2012), http://documents.worldbank.org.

https://monthlyreview.org/2019/05/01/absolute-capitalism/

01/04/2019

In the Notes from the Editors of the January 2019 issue of Monthly Review, the editors commented on a blog post of mine dealing with the term financialization and whether it is a meaningful and useful description of or hypothesis about modern capitalism.¹ While the editors did not deal with my arguments on that issue, they took me to task for claiming that the term was first used by non-Marxist sociologist Greta Krippner. They reckoned that the term goes much further back and is in fact “part of a long and distinguished socialist tradition of the critique of finance capital.” Indeed, it is very much part of the Marxist analysis of capitalism, in particular with “earlier usages of the concept by Marxian theorists, including Harry Magdoff and Paul M. Sweezy—the editors of Monthly Review, who spent decades analyzing how financialization arose out of a stagnating monopoly capitalist economy.”

Well, I concede that the general idea that finance is coming to dominate the whole economy was already at play before Krippner, but not only in Marxian analysis. The idea was already present within mainstream economics, but the specific concept of financialization had not yet been formulated. Moreover, within Marxism—even in Rudolf Hilferding’s Finance Capital and Sweezy’s late remarks—nobody questioned that financial profits derive from surplus value and that financial turbulence had its roots in the sphere of production. This started to change, as Krippner accurately pinpoints, with David Harvey’s Condition of Postmodernity (Blackwell Publishers, 1989), in which Harvey remarked that if there was any novelty to post-1973 capitalism, it lies not in labor nor product markets, but in finance. Later, Giovanni Arrighi in the Long Twentieth Century (Verso Books, 1994) observed that capitalist economies regularly cycled between phases in which profits accumulated primarily through material production and phases in which profits accumulated through financial channels.

Krippner was probably the first to define the concept of financialization supported by “stylized facts,” like the rise of shadow banking, derivatives, shareholder value, and the indebtedness of private households. These modern elements were missing from Arrighi and Sweezy, and it is these facts that are used by mainstream and post-Keynesian economists to promote the term financialization. Thus, I am not convinced that Marxism can claim to own the expression.

More importantly: Should it? Financialization can mean many things. If financialization is just a description of the huge rise in the financial sector since the early 1980s in many (but not all) major capitalist economies and, with it, the rise in the share of profits going to the financial sector, then it is possibly a suitable term. If financialization means that finance capital based on banks and insurance has now merged with nonfinancial capital through shadow banking and the financial functions of big corporations, then that is also an interesting question to analyze. But financialization is now mainly used as a term to categorize a completely new stage in capitalism, in which profits mainly come not from exploitation in production, but from financial expropriation (resembling usury) in circulation. It is now finance that rules, so that capitalism is increasingly unproductive. Crises are thus the result of financial instability and recklessness, and not of any underlying contradiction between profit and production. Finance—not capital, as Marx recognized 150 years ago—is now the enemy of labor. If that is the meaning of financialization (and I think it is the dominant meaning among many), then I do not think that Marxism can and should own the term. It leads to the abandonment of the labor theory of value, an erroneous understanding of modern capitalism’s modus operandi and, I think, eventually to reformist politics.

The important question to consider is whether financialization helps us better understand capital accumulation and its contradictions in modern capitalism and imperialism, or if, instead, it really is what Stavros Mavroudeas calls “an explanatory blind alley.”

Notes

1. ↩The Editors, Notes from the Editors, Monthly Review 70, no. 8 (January 2019): 64–63; Michael Roberts, “Financialisation or Profitability?” Michael Roberts blog, November 27, 2018, http://thenextrecession.wordpress.com

https://monthlyreview.org/2019/04/01/owning-financialization/

Columnista: KAUSHIK BASU (24 de Julio de 2019)

La tecnología digital y las redes sociales están aumentando el alcance de conflictos y travesuras políticas al reunir a un gran número de personas de diferentes orígenes culturales y políticos. Para muchos, la misma palabra puede tener una valencia emocional o política diferente, y la misma secuencia de palabras puede interpretarse de maneras contradictorias.

NEW DELHI – Estaba almorzando en un restaurante de Ithaca con mi suegra, que estaba de visita en India, cuando la camarera china que nos atendió le preguntó de dónde venía. «Kolhapur», respondió mi suegra, refiriéndose a la pequeña ciudad de Maharashtra donde nació. Para mi sorpresa, la camarera parecía muy contenta. «Viví allí durante varios años», dijo.

Se cayeron bien. Mi suegra dijo que el mejor helado del mundo proviene de allí, y la camarera acordó que nunca había mejorado desde que se fue. Después de un rato, me di cuenta de lo que estaba sucediendo: mi suegra estaba hablando de Kolhapur y la camarera de Kuala Lumpur. Pero todos sus hechos coincidían perfectamente, así que decidí no estropear su alegría. El lenguaje es una cosa extraña. Es un facilitador del progreso humano y la felicidad (incluso a través de malentendidos divertidos como el de Ítaca), pero también puede ser una fuente de conflicto y un instrumento de opresión. La conexión entre lenguaje y conflicto no está tan alejada de las ciencias sociales, incluida la teoría de juegos, como muchos piensan. Al explorar este importante vínculo más de cerca, los economistas y otros investigadores podrían realizar un gran servicio al ayudarnos a comprender el mundo contemporáneo. Después de todo, vivimos en los mejores y peores momentos. El mundo nunca ha sido tan rico como lo es hoy. Sin embargo, se está desmoronando, en medio de la creciente polarización política, la rivalidad de las grandes potencias y la xenofobia. La combinación actual de prosperidad creciente y divisiones cada vez más profundas recuerda a la Revolución Industrial que comenzó a mediados del siglo XVIII y duró casi cien años. Como era de esperar, esa era coincidió con importantes avances teóricos en la economía política, desde La riqueza de las naciones de Adam Smith en 1776, hasta las contribuciones de Augustin Cournot y Léon Walras. Los suyos no fueron hallazgos de investigación cotidianos. Al igual que el trabajo seminal posterior de John Hicks, Paul Samuelson y Kenneth Arrow en el siglo XX, produjeron ideas profundas que proporcionaron una claridad repentina y cegadora sobre cómo funciona la economía y cómo la política interactúa con los mercados y el bienestar económico.

Link:  https://www.project-syndicate.org/commentary/language-conflict-economic-research-benefits-by-kaushik-basu-2019-07 
Por: Estrada Contreras Ximena

01/07/2019

Harry Magdoff’s The Age of Imperialism is a classic work that shows how postwar political decolonization does not negate the phenomenon of imperialism. The book has two distinct aspects. On the one hand, it follows in V. I. Lenin’s footsteps in providing a comprehensive account of how capitalism at the time operated globally. On the other hand, it raises a question that is less frequently discussed in Marxist literature—namely, the need for imperialism. Here, Magdoff not only highlighted the crucial importance, among other things, of the third world’s raw materials for metropolitan capital, but also refuted the argument that the declining share of raw-material value in gross manufacturing output somehow reduced this importance, making the simple point that there can be no manufacturing at all without raw materials.¹

Magdoff’s focus was on a period when imperialism was severely resisting economic decolonization in the third world, with newly independent third world countries taking control over their own resources. He highlighted the entire armory of weapons used by imperialism. But he was writing in a period that predated the onset of neoliberalism. Today, we not only have decades of neoliberalism behind us, but the neoliberal regime itself has reached a dead end. Contemporary imperialism has to be discussed within this setting.

Globalization and Economic Crisis

There are two reasons why the regime of neoliberal globalization has run into a dead end. The first is an ex ante tendency toward global overproduction; the second is that the only possible counter to this tendency within the regime is the formation of asset-price bubbles, which cannot be conjured up at will and whose collapse, if they do appear, plunges the economy back into crisis. In short, to use the words of British economic historian Samuel Berrick Saul, there are no “markets on tap” for contemporary metropolitan capitalism, such as had been provided by colonialism prior to the First World War and by state expenditure in the post-Second World War period of dirigisme.²

The ex ante tendency toward overproduction arises because the vector of real wages across countries does not increase noticeably over time in the world economy, while the vector of labor productivities does, typically resulting in a rise in the share of surplus in world output. As Paul Baran and Paul Sweezy argued in Monopoly Capital, following the lead of Michał Kalecki and Josef Steindl, such a rise in the share of economic surplus, or a shift from wages to surplus, has the effect of reducing aggregate demand since the ratio of consumption to income is higher on average for wage earners than for those living off the surplus.³ Therefore, assuming a given level of investment associated with any period, such a shift would tend to reduce consumption demand and hence aggregate demand, output, and capacity utilization. In turn, reduced capacity utilization would lower investment over time, further aggravating the demand-reducing effect arising from the consumption side.

While the rise in the vector of labor productivities across countries, a ubiquitous phenomenon under capitalism that also characterizes neoliberal capitalism, scarcely requires an explanation, why does the vector of real wages remain virtually stagnant in the world economy? The answer lies in the sui generis character of contemporary globalization that, for the first time in the history of capitalism, has led to a relocation of activity from the metropolis to third world countries in order to take advantage of the lower wages prevailing in the latter and meet global demand.

Historically, while labor has not been, and is still not, free to migrate from the third world to the metropolis, capital, though juridically free to move from the latter to the former, did not actually do so, except to sectors like mines and plantations, which only strengthened, rather than broke, the colonial pattern of the international division of labor.⁴ This segmentation of the world economy meant that wages in the metropolis increased with labor productivity, unrestrained by the vast labor reserves of the third world, which themselves had been caused by the displacement of manufactures through the twin processes of deindustrialization (competition from metropolitan goods) and the drain of surplus (the siphoning off of a large part of the economic surplus, through taxes on peasants that are no longer spent on local artisan products but finance gratis primary commodity exports to the metropolis instead).

The current globalization broke with this. The movement of capital from the metropolis to the third world, especially to East, South, and Southeast Asia to relocate plants there and take advantage of their lower wages for meeting global demand, has led to a desegmentation of the world economy, subjecting metropolitan wages to the restraining effect exercised by the third world’s labor reserves. Not surprisingly, as Joseph Stiglitz has pointed out, the real-wage rate of an average male U.S. worker in 2011 was no higher—indeed, it was marginally lower—than it had been in 1968.⁵

At the same time, such relocation of activities, despite causing impressive growth rates of gross domestic product (GDP) in many third world countries, does not lead to the exhaustion of the third world’s labor reserves. This is because of another feature of contemporary globalization: the unleashing of a process of primitive accumulation of capital against petty producers, including peasant agriculturists in the third world, who had earlier been protected, to an extent, from the encroachment of big capital (both domestic and foreign) by the postcolonial dirigiste regimes in these countries. Under neoliberalism, such protection is withdrawn, causing an income squeeze on these producers and often their outright dispossession from their land, which is then used by big capital for its various so-called development projects. The increase in employment, even in countries with impressive GDP growth rates in the third world, falls way short of the natural growth of the workforce, let alone absorbing the additional job seekers coming from the ranks of displaced petty producers. The labor reserves therefore never get used up. Indeed, on the contrary, they are augmented further, because real wages continue to remain tied to a subsistence level, even as metropolitan wages too are restrained. The vector of real wages in the world economy as a whole therefore remains restrained.

Although contemporary globalization thus gives rise to an ex ante tendency toward overproduction, state expenditure that could provide a counter to this (and had provided a counter through military spending in the United States, according to Baran and Sweezy) can no longer do so under the current regime. Finance is usually opposed to direct state intervention through larger spending as a way of increasing employment. This opposition expresses itself through an opposition not just to larger taxes on capitalists, but also to a larger fiscal deficit for financing such spending. Obviously, if larger state spending is financed by taxes on workers, then it hardly adds to aggregate demand, for workers spend the bulk of their incomes anyway, so the state taking this income and spending it instead does not add any extra demand. Hence, larger state spending can increase employment only if it is financed either through a fiscal deficit or through taxes on capitalists who keep a part of their income unspent or saved. But these are precisely the two modes of financing state expenditure that finance capital opposes.

Its opposing larger taxes on capitalists is understandable, but why is it so opposed to a larger fiscal deficit? Even within a capitalist economy, there are no sound economic theoretical reasons that should preclude a fiscal deficit under all circumstances. The root of the opposition therefore lies in deeper social considerations: if the capitalist economic system becomes dependent on the state to promote employment directly, then this fact undermines the social legitimacy of capitalism. The need for the state to boost the animal spirits of the capitalists disappears and a perspective on the system that is epistemically exterior to it is provided to the people, making it possible for them to ask: If the state can do the job of providing employment, then why do we need the capitalists at all? It is an instinctive appreciation of this potential danger that underlies the opposition of capital, especially of finance, to any direct effort by the state to generate employment.

This ever-present opposition becomes decisive within a regime of globalization. As long as finance capital remains national—that is, nation-based—and the state is a nation-state, the latter can override this opposition under certain circumstances, such as in the post-Second World War period when capitalism was facing an existential crisis. But when finance capital is globalized, meaning, when it is free to move across country borders while the state remains a nation-state, its opposition to fiscal deficits becomes decisive. If the state does run large fiscal deficits against its wishes, then it would simply leave that country en masse, causing a financial crisis.

The state therefore capitulates to the demands of globalized finance capital and eschews direct fiscal intervention for increasing demand. It resorts to monetary policy instead since that operates through wealth holders’ decisions, and hence does not undermine their social position. But, precisely for this reason, monetary policy is an ineffective instrument, as was evident in the United States in the aftermath of the 2007–09 crisis when even the pushing of interest rates down to zero scarcely revived activity.⁶

It may be thought that this compulsion on the part of the state to accede to the demand of finance to eschew fiscal intervention for enlarging employment should not hold for the United States. Its currency being considered by the world’s wealth holders to be “as good as gold” should make it immune to capital flight. But there is an additional factor operating in the case of the United States: that the demand generated by a bigger U.S. fiscal deficit would substantially leak abroad in a neoliberal setting, which would increase its external debt (since, unlike Britain in its heyday, it does not have access to any unrequited colonial transfers) for the sake of generating employment elsewhere. This fact deters any fiscal effort even in the United States to boost demand within a neoliberal setting.⁷

Therefore, it follows that state spending cannot provide a counter to the ex ante tendency toward global overproduction within a regime of neoliberal globalization, which makes the world economy precariously dependent on occasional asset-price bubbles, primarily in the U.S. economy, for obtaining, at best, some temporary relief from the crisis. It is this fact that underlies the dead end that neoliberal capitalism has reached. Indeed, Donald Trump’s resort to protectionism in the United States to alleviate unemployment is a clear recognition of the system having reached this cul-de-sac. The fact that the mightiest capitalist economy in the world has to move away from the rules of the neoliberal game in an attempt to alleviate its crisis of unemployment/underemployment—while compensating capitalists adversely affected by this move through tax cuts, as well as carefully ensuring that no restraints are imposed on free cross-border financial flows—shows that these rules are no longer viable in their pristine form.

Some Implications of This Dead End

There are at least four important implications of this dead end of neoliberalism. The first is that the world economy will now be afflicted by much higher levels of unemployment than it was in the last decade of the twentieth century and the early years of the twenty-first, when the dot-com and the housing bubbles in the United States had, sequentially, a pronounced impact. It is true that the U.S. unemployment rate today appears to be at a historic low, but this is misleading: the labor-force participation rate in the United States today is lower than it was in 2008, which reflects the discouraged-worker effect. Adjusting for this lower participation, the U.S. unemployment rate is considerable—around 8 percent. Indeed, Trump would not be imposing protection in the United States if unemployment was actually as low as 4 percent, which is the official figure. Elsewhere in the world, of course, unemployment post-2008 continues to be evidently higher than before. Indeed, the severity of the current problem of below-full-employment production in the U.S. economy is best illustrated by capacity utilization figures in manufacturing. The weakness of the U.S. recovery from the Great Recession is indicated by the fact that the current extended recovery represents the first decade in the entire post-Second World War period in which capacity utilization in manufacturing has never risen as high as 80 percent in a single quarter, with the resulting stagnation of investment.⁸

If Trump’s protectionism, which recalls the Smoot-Hawley tariff of 1931 and amounts to a beggar-my-neighbor policy, does lead to a significant export of unemployment from the United States, then it will invite retaliation and trigger a trade war that will only worsen the crisis for the world economy as a whole by dampening global investment. Indeed, since the United States has been targeting China in particular, some retaliatory measures have already appeared. But if U.S. protectionism does not invite generalized retaliation, it would only be because the export of unemployment from the United States is insubstantial, keeping unemployment everywhere, including in the United States, as precarious as it is now. However we look at it, the world would henceforth face higher levels of unemployment.

There has been some discussion on how global value chains would be affected by Trump’s protectionism. But the fact that global macroeconomics in the early twenty-first century will look altogether different compared to earlier has not been much discussed.

In light of the preceding discussion, one could say that if, instead of individual nation-states whose writ cannot possibly run against globalized finance capital, there was a global state or a set of major nation-states acting in unison to override the objections of globalized finance and provide a coordinated fiscal stimulus to the world economy, then perhaps there could be recovery. Such a coordinated fiscal stimulus was suggested by a group of German trade unionists, as well as by John Maynard Keynes during the Great Depression in the 1930s.⁹ While it was turned down then, in the present context it has not even been discussed.

The second implication of this dead end is that the era of export-led growth is by and large over for third world economies. The slowing down of world economic growth, together with protectionism in the United States against successful third world exporters, which could even spread to other metropolitan economies, suggests that the strategy of relying on the world market to generate domestic growth has run out of steam. Third world economies, including the ones that have been very successful at exporting, would now have to rely much more on their home market.

Such a transition will not be easy; it will require promoting domestic peasant agriculture, defending petty production, moving toward cooperative forms of production, and ensuring greater equality in income distribution, all of which need major structural shifts. For smaller economies, it would also require their coming together with other economies to provide a minimum size to the domestic market. In short, the dead end of neoliberalism also means the need for a shift away from the so-called neoliberal development strategy that has held sway until now.

The third implication is the imminent engulfing of a whole range of third world economies in serious balance-of-payments difficulties. This is because, while their exports will be sluggish in the new situation, this very fact will also discourage financial inflows into their economies, whose easy availability had enabled them to maintain current account deficits on their balance of payments earlier. In such a situation, within the existing neoliberal paradigm, they would be forced to adopt austerity measures that would impose income deflation on their people, make the conditions of their people significantly worse, lead to a further handing over of their national assets and resources to international capital, and prevent precisely any possible transition to an alternative strategy of home market-based growth.

In other words, we shall now have an intensification of the imperialist stranglehold over third world economies, especially those pushed into unsustainable balance-of-payments deficits in the new situation. By imperialism, here we do not mean the imperialism of this or that major power, but the imperialism of international finance capital, with which even domestic big bourgeoisies are integrated, directed against their own working people.

The fourth implication is the worldwide upsurge of fascism. Neoliberal capitalism even before it reached a dead end, even in the period when it achieved reasonable growth and employment rates, had pushed the world into greater hunger and poverty. For instance, the world per-capita cereal output was 355 kilograms for 1980 (triennium average for 1979–81 divided by mid–triennium population) and fell to 343 in 2000, leveling at 344.9 in 2016—and a substantial amount of this last figure went into ethanol production. Clearly, in a period of growth of the world economy, per-capita cereal absorption should be expanding, especially since we are talking here not just of direct absorption but of direct and indirect absorption, the latter through processed foods and feed grains in animal products. The fact that there was an absolute decline in per-capita output, which no doubt caused a decline in per-capita absorption, suggests an absolute worsening in the nutritional level of a substantial segment of the world’s population.

But this growing hunger and nutritional poverty did not immediately arouse any significant resistance, both because such resistance itself becomes more difficult under neoliberalism (since the very globalization of capital makes it an elusive target) and also because higher GDP growth rates provided a hope that distress might be overcome in the course of time. Peasants in distress, for instance, entertained the hope that their children would live better in the years to come if given a modicum of education and accepted their fate.

In short, the ideology of neoliberal capitalism was the promise of growth. But with neoliberal capitalism reaching a dead end, this promise disappears and so does this ideological prop. To sustain itself, neoliberal capitalism starts looking for some other ideological prop and finds fascism. This changes the discourse away from the material conditions of people’s lives to the so-called threat to the nation, placing the blame for people’s distress not on the failure of the system, but on ethnic, linguistic, and religious minority groups, the other that is portrayed as an enemy. It projects a so-called messiah whose sheer muscularity can somehow magically overcome all problems; it promotes a culture of unreason so that both the vilification of the other and the magical powers of the supposed leader can be placed beyond any intellectual questioning; it uses a combination of state repression and street-level vigilantism by fascist thugs to terrorize opponents; and it forges a close relationship with big business, or, in Kalecki’s words, “a partnership of big business and fascist upstarts.”¹⁰

Fascist groups of one kind or another exist in all modern societies. They move center stage and even into power only on certain occasions when they get the backing of big business. And these occasions arise when three conditions are satisfied: when there is an economic crisis so the system cannot simply go on as before; when the usual liberal establishment is manifestly incapable of resolving the crisis; and when the left is not strong enough to provide an alternative to the people in order to move out of the conjuncture.

This last point may appear odd at first, since many see the big bourgeoisie’s recourse to fascism as a counter to the growth of the left’s strength in the context of a capitalist crisis. But when the left poses a serious threat, the response of the big bourgeoisie typically is to attempt to split it by offering concessions. It uses fascism to prop itself up only when the left is weakened. Walter Benjamin’s remark that “behind every fascism there is a failed revolution” points in this direction.

Fascism Then and Now

Contemporary fascism, however, differs in crucial respects from its 1930s counterpart, which is why many are reluctant to call the current phenomenon a fascist upsurge. But historical parallels, if carefully drawn, can be useful. While in some aforementioned respects contemporary fascism does resemble the phenomenon of the 1930s, there are serious differences between the two that must also be noted.

First, we must note that while the current fascist upsurge has put fascist elements in power in many countries, there are no fascist states of the 1930s kind as of yet. Even if the fascist elements in power try to push the country toward a fascist state, it is not clear that they will succeed. There are many reasons for this, but an important one is that fascists in power today cannot overcome the crisis of neoliberalism, since they accept the regime of globalization of finance. This includes Trump, despite his protectionism. In the 1930s, however, this was not the case. The horrors associated with the institution of a fascist state in the 1930s had been camouflaged to an extent by the ability of the fascists in power to overcome mass unemployment and end the Depression through larger military spending, financed by government borrowing. Contemporary fascism, by contrast, lacks the ability to overcome the opposition of international finance capital to fiscal activism on the part of the government to generate larger demand, output, and employment, even via military spending.

Such activism, as discussed earlier, required larger government spending financed either through taxes on capitalists or through a fiscal deficit. Finance capital was opposed to both of these measures and it being globalized made this opposition decisive. The decisiveness of this opposition remains even if the government happens to be one composed of fascist elements. Hence, contemporary fascism, straitjacketed by “fiscal rectitude,” cannot possibly alleviate even temporarily the economic crises facing people and cannot provide any cover for a transition to a fascist state akin to the ones of the 1930s, which makes such a transition that much more unlikely.

Another difference is also related to the phenomenon of the globalization of finance. The 1930s were marked by what Lenin had earlier called “interimperialist rivalry.” The military expenditures incurred by fascist governments, even though they pulled countries out of the Depression and unemployment, inevitably led to wars for “repartitioning an already partitioned world.” Fascism was the progenitor of war and burned itself out through war at, needless to say, great cost to humankind.

Contemporary fascism, however, operates in a world where interimperialist rivalry is far more muted. Some have seen in this muting a vindication of Karl Kautsky’s vision of an “ultraimperialism” as against Lenin’s emphasis on the permanence of interimperialist rivalry, but this is wrong. Both Kautsky and Lenin were talking about a world where finance capital and the financial oligarchy were essentially national—that is, German, French, or British. And while Kautsky talked about the possibility of truces among the rival oligarchies, Lenin saw such truces only as transient phenomena punctuating the ubiquity of rivalry.

In contrast, what we have today is not nation-based finance capitals, but international finance capital into whose corpus the finance capitals drawn from particular countries are integrated. This globalized finance capital does not want the world to be partitioned into economic territories of rival powers; on the contrary, it wants the entire globe to be open to its own unrestricted movement. The muting of rivalry between major powers, therefore, is not because they prefer truce to war, or peaceful partitioning of the world to forcible repartitioning, but because the material conditions themselves have changed so that it is no longer a matter of such choices. The world has gone beyond both Lenin and Kautsky, as well as their debates.

Not only are we not going to have wars between major powers in this era of fascist upsurge (of course, as will be discussed, we shall have other wars), but, by the same token, this fascist upsurge will not burn out through any cataclysmic war. What we are likely to see is a lingering fascism of less murderous intensity, which, when in power, does not necessarily do away with all the forms of bourgeois democracy, does not necessarily physically annihilate the opposition, and may even allow itself to get voted out of power occasionally. But since its successor government, as long as it remains within the confines of the neoliberal strategy, will also be incapable of alleviating the crisis, the fascist elements are likely to return to power as well. And whether the fascist elements are in or out of power, they will remain a potent force working toward the fascification of the society and the polity, even while promoting corporate interests within a regime of globalization of finance, and hence permanently maintaining the “partnership between big business and fascist upstarts.”

Put differently, since the contemporary fascist upsurge is not likely to burn itself out as the earlier one did, it has to be overcome by transcending the very conjuncture that produced it: neoliberal capitalism at a dead end. A class mobilization of working people around an alternative set of transitional demands that do not necessarily directly target neoliberal capitalism, but which are immanently unrealizable within the regime of neoliberal capitalism, can provide an initial way out of this conjuncture and lead to its eventual transcendence.

Such a class mobilization in the third world context would not mean making no truces with liberal bourgeois elements against the fascists. On the contrary, since the liberal bourgeois elements too are getting marginalized through a discourse of jingoistic nationalism typically manufactured by the fascists, they too would like to shift the discourse toward the material conditions of people’s lives, no doubt claiming that an improvement in these conditions is possible within the neoliberal economic regime itself. Such a shift in discourse is in itself a major antifascist act. Experience will teach that the agenda advanced as part of this changed discourse is unrealizable under neoliberalism, providing the scope for dialectical intervention by the left to transcend neoliberal capitalism.

Imperialist Interventions

Even though fascism will have a lingering presence in this conjuncture of “neoliberalism at a dead end,” with the backing of domestic corporate-financial interests that are themselves integrated into the corpus of international finance capital, the working people in the third world will increasingly demand better material conditions of life and thereby rupture the fascist discourse of jingoistic nationalism (that ironically in a third world context is not anti-imperialist).

In fact, neoliberalism reaching a dead end and having to rely on fascist elements revives meaningful political activity, which the heyday of neoliberalism had precluded, because most political formations then had been trapped within an identical neoliberal agenda that appeared promising. (Latin America had a somewhat different history because neoliberalism arrived in that continent through military dictatorships, not through its more or less tacit acceptance by most political formations.)

Such revived political activity will necessarily throw up challenges to neoliberal capitalism in particular countries. Imperialism, by which we mean the entire economic and political arrangement sustaining the hegemony of international finance capital, will deal with these challenges in at least four different ways.

The first is the so-called spontaneous method of capital flight. Any political formation that seeks to take the country out of the neoliberal regime will witness capital flight even before it has been elected to office, bringing the country to a financial crisis and thereby denting its electoral prospects. And if perchance it still gets elected, the outflow will only increase, even before it assumes office. The inevitable difficulties faced by the people may well make the government back down at that stage. The sheer difficulty of transition away from a neoliberal regime could be enough to bring even a government based on the support of workers and peasants to its knees, precisely to save them short-term distress or to avoid losing their support.

Even if capital controls are put in place, where there are current account deficits, financing such deficits would pose a problem, necessitating some trade controls. But this is where the second instrument of imperialism comes into play: the imposition of trade sanctions by the metropolitan states, which then cajole other countries to stop buying from the sanctioned country that is trying to break away from thralldom to globalized finance capital. Even if the latter would have otherwise succeeded in stabilizing its economy despite its attempt to break away, the imposition of sanctions becomes an additional blow.

The third weapon consists in carrying out so-called democratic or parliamentary coups of the sort that Latin America has been experiencing. Coups in the old days were effected through the local armed forces and necessarily meant the imposition of military dictatorships in lieu of civilian, democratically elected governments. Now, taking advantage of the disaffection generated within countries by the hardships caused by capital flight and imposed sanctions, imperialism promotes coups through fascist or fascist-sympathizing middle-class political elements in the name of restoring democracy, which is synonymous with the pursuit of neoliberalism.

And if all these measures fail, there is always the possibility of resorting to economic warfare (such as destroying Venezuela’s electricity supply), and eventually to military warfare. Venezuela today provides a classic example of what imperialist intervention in a third world country is going to look like in the era of decline of neoliberal capitalism, when revolts are going to characterize such countries more and more.

Two aspects of such intervention are striking. One is the virtual unanimity among the metropolitan states, which only underscores the muting of interimperialist rivalry in the era of hegemony of global finance capital. The other is the extent of support that such intervention commands within metropolitan countries, from the right to even the liberal segments.

Despite this opposition, neoliberal capitalism cannot ward off the challenge it is facing for long. It has no vision for reinventing itself. Interestingly, in the period after the First World War, when capitalism was on the verge of sinking into a crisis, the idea of state intervention as a way of its revival had already been mooted, though its coming into vogue only occurred at the end of the Second World War.¹¹ Today, neoliberal capitalism does not even have an idea of how it can recover and revitalize itself. And weapons like domestic fascism in the third world and direct imperialist intervention cannot for long save it from the anger of the masses that is building up against it.

Notes

1. ↩ Harry Magdoff, The Age of Imperialism (New York: Monthly Review Press, 1969).
2. ↩ Samuel Berrick Saul, Studies in British Overseas Trade, 1870–1914 (Liverpool: Liverpool University Press, 1960).
3. ↩ Paul A. Baran and Paul M. Sweezy, Monopoly Capital (New York: Monthly Review Press, 1966).
4. ↩ One of the first authors to recognize this fact and its significance was Paul Baran in The Political Economy of Growth (New York: Monthly Review Press, 1957).
5. ↩ Joseph E. Stiglitz, “Inequality is Holding Back the Recovery,” New York Times, January 19, 2013.
6. ↩ For a discussion of how even the recent euphoria about U.S. growth is vanishing, see C. P. Chandrasekhar and Jayati Ghosh, “Vanishing Green Shoots and the Possibility of Another Crisis,” The Hindu Business Line, April 8, 2019.
7. ↩ For the role of such colonial transfers in sustaining the British balance of payments and the long Victorian and Edwardian boom, see Utsa Patnaik, “Revisiting the ‘Drain,’ or Transfers from India to Britain in the Context of Global Diffusion of Capitalism,” in Agrarian and Other Histories: Essays for Binay Bhushan Chaudhuri, ed. Shubhra Chakrabarti and Utsa Patnaik (Delhi: Tulika, 2017), 277-317.
8. ↩ Federal Reserve Board of Saint Louis Economic Research, FRED, “Capacity Utilization: Manufacturing,” February 2019 (updated March 27, 2019), http://fred.stlouisfed.org.
9. ↩ This issue is discussed by Charles P. Kindleberger in The World in Depression, 1929–1939, 40th anniversary ed. (Oakland: University of California Press, 2013).
10. ↩ Michał Kalecki, “Political Aspects of Full Employment,” Political Quarterly (1943), available at mronline.org.
11. ↩ Joseph Schumpeter had seen Keynes’s The Economic Consequences of the Peace as essentially advocating such state intervention in the new situation. See his essay, “John Maynard Keynes (1883–1946),” in Ten Great Economists (London: George Allen & Unwin, 1952).

Neoliberal Capitalism at a Dead End

https://monthlyreview.org/2019/07/01/neoliberal-capitalism-at-a-dead-end/

Columnista: JEFFREY FRANKEL (25 de Julio de 2019)

A pesar de años de estímulo monetario, la inflación en los Estados Unidos, Japón y la eurozona sigue superando el objetivo del 2% de los bancos centrales. Sin embargo, en lugar de duplicar su objetivo a menudo perdido, quizás la Fed y otros bancos centrales deberían dejar de perseguirlo agresivamente.

CAMBRIDGE – La Reserva Federal de los Estados Unidos tiene algunas razones para reducir las tasas de interés en su reunión del 31 de julio, o posteriormente si la economía de EE. UU. Se debilita. (También hay un caso para mantener las tasas estables, si el crecimiento sigue siendo tan fuerte como lo ha sido durante el año pasado). Pero un argumento para la flexibilización es menos persuasivo: un imperativo percibido de elevar la inflación de EE. UU. Hasta el 2% o más.

La Fed estableció el objetivo de inflación del 2% en enero de 2012 bajo el ex presidente Ben Bernanke, después de que otros bancos centrales ya lo hubieran hecho. Japón hizo lo mismo un año después, poco después de que el primer ministro Shinzo Abe volviera al poder con la promesa de que la política monetaria aumentaría la inflación (Japón había sufrido previamente la caída de los precios). La lógica fue impecable. Con el desempleo aún alto y el crecimiento aún bajo después de la crisis financiera mundial de 2008, se necesitaba más estímulo. Pero los bancos centrales ya habían reducido las tasas de interés nominales a cero y no podían reducirlas mucho más. Por lo tanto, los responsables de la política monetaria intentaron estimular la actividad económica aumentando la inflación esperada. Un aumento en la tasa de inflación esperada reduciría la tasa de interés real (la tasa de interés nominal menos la inflación esperada). Y al hacer más barato el préstamo en términos reales, los bancos centrales esperaban persuadir a los hogares y las empresas para que compraran más automóviles, edificios y equipos. Las autoridades monetarias tomaron varias medidas para impulsar las expectativas inflacionarias entre el público. Destacaron su objetivo de inflación del 2% o más; fueron sinceros al hacerlo; y mantuvo su pie en el acelerador monetario (a través de la flexibilización cuantitativa) siempre que la inflación se mantuviera por debajo del objetivo. En el proceso, los bancos centrales aumentaron su base monetaria muchas veces. Es difícil ver qué más podrían haber hecho. ¿Funcionó? Por un lado, la inflación todavía está por debajo del 2% en los EE. UU., Japón y la eurozona. Mes tras mes, año tras año, las autoridades han tenido que explicar que alcanzar el objetivo llevaría un poco más de tiempo.

Link:  https://www.project-syndicate.org/commentary/central-banks-inflation-target-expectations-by-jeffrey-frankel-2019-07 
Por: Estrada Contreras Ximena

Columnista: NINA L. KHRUSHCHEVA (10 de Junio de 2019)

En un momento en que el presidente de Estados Unidos, Donald Trump, está librando una guerra comercial contra China, el presidente chino, Xi Jinping, ha encontrado un nuevo «mejor amigo» en su homólogo ruso, Vladimir Putin. ¿Pero es esta nueva amistad realmente en el mejor interés de Rusia?

MOSCOW – El presidente chino, Xi Jinping, hizo un brindis por Rusia la semana pasada. Sonrió al zoológico de Moscú mientras el presidente ruso, Vladimir Putin, admiraba los pandas que Xi había traído (un regalo chino estándar a los países que corteja). En San Petersburgo, recorrió el Aurora, el buque de guerra que disparó el lanzamiento que marca el comienzo de la Revolución Bolchevique en 1917, y realizó un crucero nocturno en barco con Putin. En el Foro Económico de San Petersburgo, citó a Fyodor Dostoievski.

En un momento en que el presidente de los Estados Unidos, Donald Trump, que una vez calificó su relación con su homólogo chino como «sobresaliente», está librando una guerra comercial contra China, Xi necesita un nuevo «mejor amigo». En sus propias palabras, eso es lo que ha encontrado en Putin ¿Pero es todo este afecto mutuo realmente en el mejor interés de Rusia? Sin duda, este no es un nuevo desarrollo. En los últimos seis años, Putin y Xi se han reunido al menos 30 veces, y el comercio anual entre sus países asciende a más de $ 100 mil millones. Pero la relación bilateral se ha profundizado significativamente últimamente, ejemplificada por el Foro de la semana pasada, que resultó en más de 25 acuerdos comerciales y otros acuerdos que cubren áreas que van desde la agricultura hasta la tecnología. Ambos líderes dicen que sus dos países están ahora en mejores condiciones que nunca. Para Rusia, los lazos más estrechos con China son indudablemente tentadores. Después de cinco años de sanciones internacionales, impuestas a Rusia después de su anexión de Crimea, las oberturas de Xi proporcionan un aplazamiento aparentemente bienvenido. Pero, antes de que Putin confíe demasiado en Xi, haría bien en recordar una canción disidente soviética de la década de 1960: “La gente es hermanos; Voy a abrazar a los chinos «, que se burló de los primeros intentos fallidos de una unión ruso-china. A principios de la década de 1950, poco después de que el Partido Comunista tomara el poder en China, formó una alianza con la Unión Soviética. Sin embargo, la relación siempre fue tensa, porque Joseph Stalin y Mao Zedong estaban compitiendo para liderar el movimiento comunista internacional. Aunque Stalin tenía la ventaja, Mao sabía que los regímenes comunistas debían formar un frente unificado contra el Occidente capitalista. Es por eso que Mao estaba tan indignado en 1956, cuando Nikita Khrushchev, quien había asumido el cargo después de la muerte de Stalin tres años antes, denunció a su predecesor. ¿Cómo podría Jruschov atreverse a desafiar el estado exaltado de Stalin (y, por extensión, amenazar a Mao con un destino similar)? Aunque la Unión Soviética representó el 60% de las exportaciones de China, las tensiones llevaron a una división de una década.

Link: https://www.project-syndicate.org/commentary/russia-china-friendship-competition-by-nina-l-khrushcheva-2019-06 
Por: Estrada Contreras Ximena 

01/09/2019

This special issue of Monthly Review honors the fiftieth anniversary this month of Margaret Benston’s landmark “The Political Economy of Women’s Liberation,” reprinted here together with related pieces by Silvia Federici, Martha E. Gimenez, Selma James (interviewed by Ron Augustin), Leith Mullings, Marge Piercy, and Lise Vogel, all of whom have played leading roles since the 1970s in the development of feminist historical materialism. In 1969, Harry Magdoff, coeditor of Monthly Review, visited Simon Fraser University in Burnaby, British Columbia, invited by anthropologist and MR author, Kathleen Gough. There, Magdoff met Benston, who was a professor in the Chemistry Department and who he recalled “had a marvelous point of view” on the relation of women to society. He urged her to “write it up” for publication in the magazine and she sent it in not long after, leading to its publication in the September 1969 issue of Monthly Review. Benston’s article is widely known as the first attempt to theorize women’s work in the household as integral to the political economy of capitalism. It was to generate wide-ranging debates and theoretical advances in Marxist and socialist feminism, originally known as the domestic labor debate. These theoretical discussions (and the concrete practices that this inspired, such as the Wages for Housework movement) have been carried down to the present day, leading to the development of contemporary social reproduction theory, representing a distinctive tradition of historical materialist feminist theory and practice.

—The Editors

The position of women rests, as everything in our complex society, on an economic base.

—Eleanor Marx and Edward Aveling

The “woman question” is generally ignored in analyses of the class structure of society. This is so because, on the one hand, classes are generally defined by their relation to the means of production and, on the other hand, women are not supposed to have any unique relation to the means of production. The category seems instead to cut across all classes; one speaks of working-class women, middle-class women, etc. The status of women is clearly inferior to that of men, but analysis of this condition usually falls into discussing socialization, psychology, interpersonal relations, or the role of marriage as a social institution.¹ Are these, however, the primary factors? In arguing that the roots of the secondary status of women are in fact economic, it can be shown that women as a group do indeed have a definite relation to the means of production and that this is different from that of men. The personal and psychological factors then follow from this special relation to production, and a change in the latter will be a necessary (but not sufficient) condition for changing the former.² If this special relation of women to production is accepted, the analysis of the situation of women fits naturally into a class analysis of society.

The starting point for discussion of classes in a capitalist society is the distinction between those who own the means of production and those who sell their labor power for a wage. As Ernest Mandel says:

The proletarian condition is, in a nutshell, the lack of access to the means of production or means of subsistence which, in a society of generalized commodity production, forces the proletarian to sell his labor power. In exchange for this labor power he receives a wage which then enables him to acquire the means of consumption necessary for satisfying his own needs and those of his family.

This is the structural definition of wage earner, the proletarian. From it necessarily flows a certain relationship to his work, to the products of his work, and to his overall situation in society, which can be summarized by the catchword alienation. But there does not follow from this structural definition any necessary conclusions as to the level of his consumption…the extent of his needs, or the degree to which he can satisfy them.³

We lack a corresponding structural definition of women. What is needed first is not a complete examination of the symptoms of the secondary status of women, but instead a statement of the material conditions in capitalist (and other) societies which define the group “women.” Upon these conditions are built the specific superstructures which we know. An interesting passage from Mandel points the way to such a definition:

The commodity…is a product created to be exchanged on the market, as opposed to one which has been made for direct consumption. Every commodity must have both a use-value and an exchange-value.

It must have a use-value or else nobody would buy it.… A commodity without a use-value to anyone would consequently be unsalable, would constitute useless production, would have no exchange-value precisely because it had no use-value.

On the other hand, every product which has use-value does not necessarily have exchange-value. It has an exchange-value only to the extent that the society itself, in which the commodity is produced, is founded on exchange, is a society where exchange is a common practice.…

In capitalist society, commodity production, the production of exchange-values, has reached its greatest development. It is the first society in human history where the major part of production consists of commodities. It is not true, however, that all production under capitalism is commodity production. Two classes of products still remain simple use-value.

The first group consists of all things produced by the peasantry for its own consumption, everything directly consumed on the farms where it is produced.…

The second group of products in capitalist society which are not commodities but remain simple use-value consists of all things produced in the home. Despite the fact that considerable human labor goes into this type of household production, it still remains a production of use-values and not of commodities. Every time a soup is made or a button sewn on a garment, it constitutes production, but it is not production for the market.

The appearance of commodity production and its subsequent regularization and generalization have radically transformed the way men labor and how they organize society.⁴

What Mandel may not have noticed is that his last paragraph is precisely correct. The appearance of commodity production has indeed transformed the way that men labor. As he points out, most household labor in capitalist society (and in the existing socialist societies, for that matter) remains in the premarket stage. This is the work which is reserved for women and it is in this fact that we can find the basis for a definition of women.

In sheer quantity, household labor, including child care, constitutes a huge amount of socially necessary production. Nevertheless, in a society based on commodity production, it is not usually considered “real work” since it is outside of trade and the market place. It is precapitalist in a very real sense. This assignment of household work as the function of a special category “women” means that this group does stand in a different relation to production than the group “men.” We will tentatively define women, then, as that group of people who are responsible for the production of simple use-values in those activities associated with the home and family.

Since men carry no responsibility for such production, the difference between the two groups lies here. Notice that women are not excluded from commodity production. Their participation in wage labor occurs but, as a group, they have no structural responsibility in this area and such participation is ordinarily regarded as transient. Men, on the other hand, are responsible for commodity production; they are not, in principle, given any role in household labor. For example, when they do participate in household production, it is regarded as more than simply exceptional; it is demoralizing, emasculating, even harmful to health. (A story on the front page of the Vancouver Sun in January 1969 reported that men in Britain were having their health endangered because they had to do too much housework!)

The material basis for the inferior status of women is to be found in just this definition of women. In a society in which money determines value, women are a group who work outside the money economy. Their work is not worth money, is therefore valueless, is therefore not even real work. And women themselves, who do this valueless work, can hardly be expected to be worth as much as men, who work for money. In structural terms, the closest thing to the condition of women is the condition of others who are or were also outside of commodity production, i.e., serfs and peasants.

In her recent paper on women, Juliet Mitchell introduces the subject as follows: “In advanced industrial society, women’s work is only marginal to the total economy. Yet it is through work that man changes natural conditions and thereby produces society. Until there is a revolution in production, the labor situation will prescribe women’s situation within the world of men.”⁵ The statement of the marginality of women’s work is an unanalyzed recognition that the work women do is different from the work that men do. Such work is not marginal, however; it is just not wage labor and so is not counted. She even says later in the same article, “Domestic labor, even today, is enormous if quantified in terms of productive labor.” She gives some figures to illustrate: In Sweden, 2,340 million hours a year are spent by women in housework compared with 1,290 million hours spent by women in industry. And the Chase Manhattan Bank estimates a woman’s overall work week at 99.6 hours.

However, Mitchell gives little emphasis to the basic economic factors (in fact she condemns most Marxists for being “overly economist”) and moves on hastily to superstructural factors, because she notices that “the advent of industrialization has not so far freed women.” What she fails to see is that no society has thus far industrialized housework. Frederick Engels points out that the “first premise for the emancipation of women is the reintroduction of the entire female sex into public industry.… And this has become possible not only as a result of modern large-scale industry, which not only permits the participation of women in production in large numbers, but actually calls for it and, moreover, strives to convert private domestic work also into a public industry.”⁶ And later in the same passage: “Here we see already that the emancipation of women and their equality with men are impossible and must remain so as long as women are excluded from socially productive work and restricted to housework, which is private.” What Mitchell has not taken into account is that the problem is not simply one of getting women into existing industrial production but the more complex one of converting private production of household work into public production.

For most North Americans, domestic work as “public production” brings immediate images of Brave New World or of a vast institution—a cross between a home for orphans and an army barracks—where we would all be forced to live. For this reason, it is probably just as well to outline here, schematically and simplistically, the nature of industrialization.

A preindustrial production unit is one in which production is small-scale and reduplicative; i.e., there are a great number of little units, each complete and just like all the others. Ordinarily such production units are in some way kin-based and they are multi-purpose, fulfilling religious, recreational, educational, and sexual functions along with the economic function. In such a situation, desirable attributes of an individual, those which give prestige, are judged by more than purely economic criteria: for example, among approved character traits are proper behavior to kin or readiness to fulfill obligations.

Such production is originally not for exchange. But if exchange of commodities becomes important enough, then increased efficiency of production becomes necessary. Such efficiency is provided by the transition to industrialized production which involves the elimination of the kin-based production unit. A large-scale, non-reduplicative production unit is substituted which has only one function, the economic one, and where prestige or status is attained by economic skills. Production is rationalized, made vastly more efficient, and becomes more and more public—part of an integrated social network. An enormous expansion of man’s productive potential takes place. Under capitalism such social productive forces are utilized almost exclusively for private profit. These can be thought of as capitalized forms of production.

If we apply the above to housework and child rearing, it is evident that each family, each household, constitutes an individual production unit, a preindustrial entity, in the same way that peasant farmers or cottage weavers constitute preindustrial production units. The main features are clear, with the reduplicative, kin-based, private nature of the work being the most important. (It is interesting to notice the other features: the multi-purpose functions of the family, the fact that desirable attributes for women do not center on economic prowess, etc.) The rationalization of production effected by a transition to large-scale production has not taken place in this area.

Industrialization is, in itself, a great force for human good; exploitation and dehumanization go with capitalism and not necessarily with industrialization. To advocate the conversion of private domestic labor into a public industry under capitalism is quite a different thing from advocating such conversion in a socialist society. In the latter case the forces of production would operate for human welfare, not private profit, and the result should be liberation, not dehumanization. In this case we can speak of socialized forms of production.

These definitions are not meant to be technical but rather to differentiate between two important aspects of industrialization. Thus the fear of the barracks-like result of introducing housekeeping into the public economy is most realistic under capitalism. With socialized production and the removal of the profit motive and its attendant alienated labor, there is no reason why, in an industrialized society, industrialization of housework should not result in better production, i.e., better food, more comfortable surroundings, more intelligent and loving child care, etc., than in the present nuclear family.

The argument is often advanced that, under neocapitalism, the work in the home has been much reduced. Even if this is true, it is not structurally relevant. Except for the very rich, who can hire someone to do it, there is, for most women, an irreducible minimum of necessary labor involved in caring for home, husband, and children. For a married woman without children this irreducible minimum of work probably takes fifteen to twenty hours a week; for a woman with small children the minimum is probably seventy or eighty hours a week.⁷ (There is some resistance to regarding child rearing as a job. That labor is involved, i.e., the production of use-value, can be clearly seen when exchange-value is also involved—when the work is done by babysitters, nurses, child care centers, or teachers. An economist has already pointed out the paradox that if a man marries his housekeeper, he reduces the national income, since the money he gives her is no longer counted as wages.) The reduction of housework to the minimums given is also expensive; for low-income families more labor is required. In any case, household work remains structurally the same—a matter of private production.

One function of the family, the one taught to us in school and the one which is popularly accepted, is the satisfaction of emotional needs: the needs for closeness, community, and warm secure relationships. This society provides few other ways of satisfying such needs; for example, work relationships or friendships are not expected to be nearly as important as a man-woman-with-children relationship. Even other ties of kinship are increasingly secondary. This function of the family is important in stabilizing it so that it can fulfill the second, purely economic, function discussed above. The wage earner, the husband-father, whose earnings support himself, also “pays for” the labor done by the mother-wife and supports the children. The wages of a man buy the labor of two people. The crucial importance of this second function of the family can be seen when the family unit breaks down in divorce. The continuation of the economic function is the major concern where children are involved; the man must continue to pay for the labor of the woman. His wage is very often insufficient to enable him to support a second family. In this case his emotional needs are sacrificed to the necessity to support his ex-wife and children. That is, when there is a conflict the economic function of the family very often takes precedence over the emotional one. And this in a society which teaches that the major function of the family is the satisfaction of emotional needs.⁸

As an economic unit, the nuclear family is a valuable stabilizing force in capitalist society. Since the production which is done in the home is paid for by the husband-father’s earnings, his ability to withhold his labor from the market is much reduced. Even his flexibility in changing jobs is limited. The woman, denied an active place in the market, has little control over the conditions that govern her life. Her economic dependence is reflected in emotional dependence, passivity, and other “typical” female personality traits. She is conservative, fearful, supportive of the status quo.

Furthermore, the structure of this family is such that it is an ideal consumption unit. But this fact, which is widely noted in Women’s Liberation literature, should not be taken to mean that this is its primary function. If the above analysis is correct, the family should be seen primarily as a production unit for housework and child rearing. Everyone in capitalist society is a consumer; the structure of the family simply means that it is particularly well suited to encourage consumption. Women in particular are good consumers; this follows naturally from their responsibility for matters in the home. Also, the inferior status of women, their general lack of a strong sense of worth and identity, make them more exploitable than men and hence better consumers.

The history of women in the industrialized sector of the economy has depended simply on the labor needs of that sector. Women function as a massive reserve army of labor. When labor is scarce (early industrialization, the two world wars, etc.) then women form an important part of the labor force. When there is less demand for labor (as now under neocapitalism) women become a surplus labor force—but one for which their husbands and not society are economically responsible. The “cult of the home” makes its reappearance during times of labor surplus and is used to channel women out of the market economy. This is relatively easy since the pervading ideology ensures that no one, man or woman, takes women’s participation in the labor force very seriously. Women’s real work, we are taught, is in the home; this holds whether or not they are married, single, or the heads of households.

At all times household work is the responsibility of women. When they are working outside the home they must somehow manage to get both outside job and housework done (or they supervise a substitute for the housework). Women, particularly married women with children, who work outside the home simply do two jobs; their participation in the labor force is only allowed if they continue to fulfill their first responsibility in the home. This is particularly evident in countries like Russia and those in Eastern Europe where expanded opportunities for women in the labor force have not brought about a corresponding expansion in their liberty. Equal access to jobs outside the home, while one of the preconditions for women’s liberation, will not in itself be sufficient to give equality for women; as long as work in the home remains a matter of private production and is the responsibility of women, they will simply carry a double workload.

A second prerequisite for women’s liberation which follows from the above analysis is the conversion of the work now done in the home as private production into work to be done in the public economy.⁹ To be more specific, this means that child rearing should no longer be the responsibility solely of the parents. Society must begin to take responsibility for children; the economic dependence of women and children on the husband-father must be ended. The other work that goes on in the home must also be changed—communal eating places and laundries for example. When such work is moved into the public sector, then the material basis for discrimination against women will be gone.

These are only preconditions. The idea of the inferior status of women is deeply rooted in the society and will take a great deal of effort to eradicate. But once the structures which produce and support that idea are changed then, and only then, can we hope to make progress. It is possible, for example, that a change to communal eating places would simply mean that women are moved from a home kitchen to a communal one. This would be an advance, to be sure, particularly in a socialist society where work would not have the inherently exploitative nature it does now. Once women are freed from private production in the home, it will probably be very difficult to maintain for any long period of time a rigid definition of jobs by sex. This illustrates the interrelation between the two preconditions given above: true equality in job opportunity is probably impossible without freedom from housework, and the industrialization of housework is unlikely unless women are leaving the home for jobs.

The changes in production necessary to get women out of the home might seem to be, in theory, possible under capitalism. One of the sources of women’s liberation movements may be the fact that alternative capitalized forms of home production now exist. Day care is available, even if inadequate and perhaps expensive; convenience foods, home delivery of meals, and take-out meals are widespread; laundries and cleaners offer bulk rates. However, cost usually prohibits a complete dependence on such facilities, and they are not available everywhere, even in North America. These should probably then be regarded as embryonic forms rather than completed structures. However, they clearly stand as alternatives to the present system of getting such work done. Particularly in North America, where the growth of “service industries” is important in maintaining the growth of the economy, the contradictions between these alternatives and the need to keep women in the home will grow.

The need to keep women in the home arises from two major aspects of the present system. First, the amount of unpaid labor performed by women is very large and very profitable to those who own the means of production. To pay women for their work, even at minimum wage scales, would imply a massive redistribution of wealth. At present, the support of a family is a hidden tax on the wage earner—his wage buys the labor power of two people. And second, there is the problem of whether the economy can expand enough to put all women to work as a part of the normally employed labor force. The war economy has been adequate to draw women partially into the economy but not adequate to establish a need for all or most of them. If it is argued that the jobs created by the industrialization of housework will create this need, then one can counter by pointing to (1) the strong economic forces operating for the status quo and against capitalization discussed above, and (2) the fact that the present service industries, which somewhat counter these forces, have not been able to keep up with the growth of the labor force as presently constituted. The present trends in the service industries simply create “underemployment” in the home; they do not create new jobs for women. So long as this situation exists, women remain a very convenient and elastic part of the industrial reserve army. Their incorporation into the labor force on terms of equality—which would create pressure for capitalization of housework—is possible only with an economic expansion so far achieved by neocapitalism only under conditions of full-scale war mobilization.

In addition, such structural changes imply the complete breakdown of the present nuclear family. The stabilizing consuming functions of the family, plus the ability of the cult of the home to keep women out of the labor market, serve neocapitalism too well to be easily dispensed with. And, on a less fundamental level, even if these necessary changes in the nature of household production were achieved under capitalism it would have the unpleasant consequence of including all human relations in the cash nexus. The atomization and isolation of people in Western society is already sufficiently advanced to make it doubtful if such complete psychic isolation could be tolerated. It is likely in fact that one of the major negative emotional responses to women’s liberation movements may be exactly such a fear. If this is the case, then possible alternatives—cooperatives, the kibbutz, etc.—can be cited to show that psychic needs for community and warmth can in fact be better satisfied if other structures are substituted for the nuclear family.

At best the change to capitalization of housework would only give women the same limited freedom given most men in capitalist society. This does not mean, however, that women should wait to demand freedom from discrimination. There is a material basis for women’s status; we are not merely discriminated against, we are exploited. At present, our unpaid labor in the home is necessary if the entire system is to function. Pressure created by women who challenge their role will reduce the effectiveness of this exploitation. In addition, such challenges will impede the functioning of the family and may make the channeling of women out of the labor force less effective. All of these will hopefully make quicker the transition to a society in which the necessary structural changes in production can actually be made. That such a transition will require a revolution I have no doubt; our task is to make sure that revolutionary changes in the society do in fact end women’s oppression.

Appendix: Passages from V. I. Lenin, On the Emancipation of Women (Moscow: Progress Publishers, 1965).

Large-scale machine industry, which concentrates masses of workers who often come from various parts of the country, absolutely refuses to tolerate survivals of patriarchalism and personal dependence, and is marked by a truly “contemptuous attitude to the past.” It is this break with obsolete tradition that is one of the substantial conditions which have created the possibility and evoked the necessity of regulating production and of public control over it. In particular,…it must be stated that the drawing of women and juveniles into production is, at bottom, progressive. It is indisputable that the capitalist factory places these categories of the working population in particularly hard conditions, but endeavors to completely ban the work of women and juveniles in industry, or to maintain the patriarchal manner of life that ruled out such work, would be reactionary and utopian. By destroying the patriarchal isolation of these categories of the population who formerly never emerged from the narrow circle of domestic family relationships, by drawing them into direct participation in social production,…industry stimulates their development and increases their independence. (p. 15)

Notwithstanding all the laws emancipating woman, she continues to be a domestic slave, because petty housework crushes, strangles, stultifies, and degrades her, chains her to the kitchen and the nursery, and she wastes her labor on barbarously unproductive, petty, nerve-racking, stultifying and crushing drudgery. The real emancipation of women, real communism, will begin only where and when an all-out struggle begins (led by the proletariat wielding the state power) against this petty housekeeping, or rather when its wholesale transformation into a large-scale socialist economy begins.

Do we in practice pay sufficient attention to this question, which in theory every Communist considers indisputable? Of course not. Do we take proper care of the shoots of communism which already exist in this sphere? Again, the answer is no. Public catering establishments, nurseries, kindergartens—here we have examples of these shoots, here we have the simple, everyday means, involving nothing pompous, grandiloquent or ceremonial, which can really emancipate women, really lessen and abolish their inequality with man as regards their role in social production and public life. These means are not new, they (like all the material prerequisites for socialism) were created by large-scale capitalism. But under capitalism they remained, first, a rarity, and secondly—which is particularly important—either profit-making enterprises, with all the worst features of speculation, profiteering, cheating and fraud, or “acrobatics of bourgeois charity,” which the best workers rightly hated and despised. (pp. 61–62)

You all know that even when women have full rights, they still remain downtrodden because all housework is left to them. In most cases, housework is the most unproductive, the most savage, and the most arduous work a woman can do. It is exceptionally petty and does not include anything that would in any way promote the development of the woman. (p. 67)

We are setting up model institutions, dining-rooms and nurseries, that will emancipate women from housework.…

We say that the emancipation of the workers must be effected by the workers themselves, and in exactly the same way the emancipation of working women is a matter for the working women themselves. The working women must themselves see to it that such institutions are developed, and this activity will bring about a complete change in their position as compared with what it was under the old, capitalist society. (p. 68)

Notes

1. ↩Marlene Dixon, “Secondary Social Status of Women.” (Available from U.S. Voice of Women’s Liberation Movement, 1940 Bissell, Chicago, IL 60614.) The biological argument is, of course, the first one used, but it is not usually taken seriously by socialist writers. Margaret Mead’s Sex and Temperament is an early statement of the importance of culture instead of biology.
2. ↩This applies to the group or category as a whole. Women as individuals can and do free themselves from their socialization to a great degree (and they can even come to terms with the economic situation in favorable cases), but the majority of women have no chance to do so.
3. ↩Ernest Mandel, “Workers Under Neocapitalism,” (paper presented at Simon Fraser University, Burnaby, British Columbia, Canada, available through the Department of Political Science, Sociology and Anthropology).
4. ↩Ernest Mandel, An Introduction to Marxist Economic Theory (New York: Merit, 1967), 10–11.
5. ↩Juliet Mitchell, “Women: The Longest Revolution,” New Left Review 40 (1966).
6. ↩Frederick Engels, Origin of the Family, Private Property and the State (Moscow: Progress, 1968), chap. 9, 158. The anthropological evidence known to Engels indicated primitive woman’s dominance over man. Modern anthropology disputes this dominance but provides evidence for a more nearly equal position of women in the matrilineal societies used by Engels as examples. The arguments in this work of Engels do not require the former dominance of women but merely their former equality, and so the conclusions remain unchanged.
7. ↩Such figures can easily be estimated. For example, a married woman without children is expected each week to cook and wash up (ten hours), clean house (four hours), do laundry (one hour), and shop for food (one hour). The figures are minimum times required each week for such work. The total, sixteen hours, is probably unrealistically low; even so, it is close to half of a regular work week. A mother with young children must spend at least six or seven days a week working close to twelve hours.
8. ↩For evidence of such teaching, see any high school text on the family.
9. ↩This is stated clearly by early Marxist writers besides Engels. Relevant quotes from Engels have been given in the text; those from V. I. Lenin are included in the Appendix.

https://monthlyreview.org/2019/09/01/the-political-economy-of-womens-liberation/

Columnista: NINA L. KHRUSHCHEVA (24 de Julio de 2019)

En el mundo de hoy, los hombres continúan teniendo un poder desproporcionado, que a menudo usan de manera que evitan que las mujeres ganen más. Pero, a juzgar por el número cada vez mayor de mujeres en el escenario político, y dado que incluyen fascistas, liberales, verdes y socialistas, los días de la supremacía masculina están contados.

MOSCOW – La reciente declaración del presidente de los Estados Unidos, Donald Trump, de que cuatro congresistas demócratas de color, Ayanna Pressley, Alexandria Ocasio-Cortez, Ilhan Omar y Rashida Tlaib, deberían «regresar» a sus países fue otro recordatorio de su evidente racismo y sexismo. (Tres de ellos nacieron en los Estados Unidos, y el cuarto se convirtió en ciudadano estadounidense cuando era adolescente). Pero también destacó los crecientes perfiles de las mujeres en la política, una tendencia que continuará, sin importar cuánto aterrorice a los hombres inseguros como Triunfo.

Hace un siglo en Europa, las principales sufragistas, como Inessa Armand, Rosa Luxemburgo y Clara Zetkin, tenían pocas opciones más que buscar hombres poderosos para validar sus aspiraciones. Uno de esos hombres fue el líder soviético Vladimir Lenin, quien abogó por la eliminación de «viejas leyes que colocaban a la mujer en la desigualdad en relación con el hombre». Armand estuvo (supuestamente) involucrado sentimentalmente con Lenin, y Zetkin lo entrevistó sobre «la cuestión de las mujeres» en 1920 , después de su discurso de 1919 sobre las «tareas del movimiento de mujeres trabajadoras en la república soviética». Este enfoque era comprensible, pero resultó ineficaz. Lenin insistió en que solo el socialismo, con su promesa de igualdad para todos, podría liberar a las mujeres. «Dondequiera que se conserve el poder del capital», declaró en ese discurso, «los hombres conservan sus privilegios». Pero, mientras más del 80% de las mujeres en la Unión Soviética entre 15 y 54 años tenían trabajo (a partir de 1983), pocas tenían carreras. Durante la era estalinista, a las mujeres se les dijo explícitamente que regresaran al «frente familiar». Mi propia abuela se vio obligada a renunciar a su puesto de educadora después de que mi abuelo, Nikita Khrushchev, fuera nombrada jefa del Partido Comunista de Ucrania en 1937. Ella se suponía que serviría como ejemplo para otras esposas trabajadoras de funcionarios políticos. Hoy, no solo hay muy pocas mujeres en el gobierno del presidente ruso Vladimir Putin; sus roles son en gran parte ceremoniales. De manera reveladora, en un país donde el abuso doméstico mata a una mujer cada 40 minutos, en promedio, una enmienda que despenaliza algunas formas de violencia doméstica pasó por la Duma (parlamento de Rusia) en 2017, antes de ser firmada por Putin. Por el contrario, si bien muchas democracias europeas se quedaron atrás de los soviéticos en el sufragio femenino (Bélgica, Francia e Italia otorgaron a las mujeres derechos de voto completos solo en la década de 1940), han resultado ser mucho más propicias para el ascenso profesional de las mujeres. Hace cuarenta años, la primera ministra británica Margaret Thatcher, aunque a menudo inflexible y dogmática, ayudó a romper el techo de cristal proverbial. Y, en los últimos 15 años más o menos, la escalera se ha vuelto más alta y más llena que nunca. Angela Merkel se ha convertido en la tercera canciller de mayor antigüedad en Alemania desde que se convirtió en la primera mujer en ocupar ese puesto en 2005. Otra mujer, Annegret Kramp-Karrenbauer, actualmente ministra de Defensa de Alemania, probablemente la sucederá en 2021.

Link: https://www.project-syndicate.org/commentary/women-on-top-in-democracies-by-nina-l-khrushcheva-2019-07 
Por: Estrada Contreras Ximena 

Columnista: DARON ACEMOGLU (07 de Agosto de 2019)

Al mismo tiempo que la ciencia y la tecnología han mejorado enormemente la vida humana, también han dado a ciertos visionarios los medios para transformar sociedades enteras desde arriba. Ominosamente, lo que era cierto para los planificadores centrales soviéticos es cierto para Big Tech hoy: a saber, la suposición de que la sociedad puede mejorarse a través de la «racionalidad» pura.

CAMBRIDGE: la tecnología digital ha transformado la forma en que nos comunicamos, viajamos, compramos, aprendemos y nos entretenemos. Muy pronto, tecnologías como la inteligencia artificial (IA), Big Data e Internet de las cosas (IoT) podrían rehacer la atención médica, la energía, el transporte, la agricultura, el sector público, el entorno natural e incluso nuestras mentes y cuerpos.

La aplicación de la ciencia a los problemas sociales ha traído grandes dividendos en el pasado. Mucho antes de la invención del chip de silicio, las innovaciones médicas y tecnológicas ya habían hecho nuestras vidas mucho más cómodas, y más largas. Pero la historia también está repleta de desastres causados ​​por el poder de la ciencia y el celo por mejorar la condición humana. Por ejemplo, los esfuerzos para aumentar los rendimientos agrícolas a través del aumento científico o tecnológico en el contexto de la colectivización en la Unión Soviética o Tanzania fracasaron espectacularmente. A veces, los planes para rehacer las ciudades a través de la planificación urbana moderna casi las destruyen. El politólogo James Scott ha denominado tales esfuerzos para transformar las vidas de otros a través de instancias científicas de «alto modernismo». Una ideología tan peligrosa como dogmáticamente excesiva, el alto modernismo se niega a reconocer que muchas prácticas y comportamientos humanos tienen una lógica inherente que se adapta al complejo entorno en el que han evolucionado. Cuando los altos modernistas descartan tales prácticas para instituir un enfoque más científico y racional, casi siempre fracasan. Históricamente, los esquemas de alta modernidad han sido más dañinos en manos de un estado autoritario que busca transformar una sociedad postrada y débil. En el caso de la colectivización soviética, el autoritarismo estatal se originó a partir del autoproclamado «papel principal» del Partido Comunista, y persiguió sus esquemas en ausencia de organizaciones que pudieran resistirlos eficazmente o brindar protección a los campesinos aplastados por ellos. Sin embargo, el autoritarismo no es exclusivo de los estados. También puede originarse de cualquier reclamo de conocimiento o habilidad superior desenfrenada. Considere los esfuerzos contemporáneos de corporaciones, emprendedores y otros que desean mejorar nuestro mundo a través de tecnologías digitales. Las innovaciones recientes han aumentado enormemente la productividad en la fabricación, mejoraron la comunicación y enriquecieron la vida de miles de millones de personas. Pero podrían fácilmente convertirse en un fiasco de alta modernidad.

Link:  https://www.project-syndicate.org/commentary/big-tech-high-modernist-disaster-by-daron-acemoglu-2019-08 
Por: Estrada Contreras Ximena.

04/09/2019

Donald Trump said on Tuesday that Chinese manufacturing would “crumble” if the country did not agree to the United States’ trade terms. 

His comments come as newly released data shows his trade war was washing back to American shores and hurting the factories that the president has aimed to protect.

Days after new tariffs went into effect on both sides of the Pacific, a closely watched index of American manufacturing activity fell to 49.1 from 51.2, signalling a contraction in US factory activity for the first time since 2016.

The companies responding to the Institute for Supply Management survey, which the index is based on, cited shrinking export orders as a result of the trade dispute, as well as the challenge of moving supply chains out of China to avoid the tariffs.

The manufacturing sector’s struggles are likely to increase as the world’s two largest economies continue to escalate their trade fight.

On Sunday, the president placed a new 15 per cent tariff on a range of consumer goods, including clothing, lawn mowers, sewing machines, food and jewellery.

Beijing retaliated by increasing tariffs on $75 (£61.7) billion worth of American products. China also said on Monday that it was filing a complaint at the World Trade Organisation over Mr Trump’s new tariffs.

Markets sank on weaker economic news and worries about the trade war. The S&P 500 was down about 0.9 per cent, with particular weakness in industrial and energy stocks.

Prices of key industrial commodities were also lower, with futures prices for benchmark American crude oil down roughly 3 per cent.

Copper, considered a barometer of the health of the global industrial sector, was down a bit less than 1 per cent.

The yield on the 10-year Treasury note declined to 1.45 per cent, as jittery investors continued to buy government bonds, pushing prices up and yields lower.

The drop in bond yields this year — the yield on the 10-year note was above 3 per cent in late 2018 — suggests a broad-based cut in expectations for economic growth among investors.

“The US trade war with the world has blown open a great big hole in manufacturers’ confidence,” Chris Rupkey, the chief financial economist at MUFG Union Bank, wrote in a note Tuesday. “The manufacturing sector has officially turned down and is falling for the first time this year as the China tariffs and slowdown in exports has really started to bite.”

The president has continued to insist that pain from the trade war is falling primarily on China, not the United States.

On Friday, he said American companies were leaving China in response to his tariffs, a development that put the United States in an “incredible negotiating position”. And he said any business that complained about financial pain from the tariffs was suffering from bad management, not the trade war.

On Tuesday, he warned Beijing not to try to wait for a new administration to come into office after the 2020 election, saying that China’s supply chain “will crumble” and that it would be “a long time to be haemorrhaging jobs and companies on a long-shot”.

Many chief executives and trade groups say they support the president’s goal of changing China’s economic practices, particularly those that require businesses to hand over valuable technology as a condition of operating in China.

But businesses have begun to express concern about the seemingly unending trade war.

Many big companies, particularly those in the retail and manufacturing sectors, have downgraded sales and profit forecasts as a result of the tariffs.

The trade war’s potential to slow America’s economic expansion, including its impact on the manufacturing sector, has already prompted concern from Federal Reserve officials.

The Federal Reserve cut rates for the first time in more than a decade in July and officials have said they are prepared to cut further to protect the economy against fallout from slowing global growth and trade risks.Fox News anchor Shep Smith deconstructs Trump’s rhetoric as his trade war heralds potential recession

Even some officials who did not vote in favour of July’s rate cut say economic risks have increased.

Eric Rosengren, president of the Federal Reserve Bank of Boston and a monetary policy voter this year, indicated that he still favours waiting and watching incoming economic data before making interest rate cuts beyond the July move, which he voted against.

But he also said it is “clearly reasonable” to judge that risks to the economy are elevated, and “should those risks become a reality, the appropriate monetary policy would be to ease aggressively”, suggesting that he might favour rapid interest rate cuts if economic data soured meaningfully.

The Trump administration has been pressuring China for more than two years to make a trade deal that would strengthen its protections for American intellectual property and result in large purchases of American products.

But the two sides continue to have significant disagreements, including which of Mr Trump’s tariffs should be rolled back and what kind of legal changes China must make to treat American companies more fairly.

Since talks between the two countries stalled in May, Mr Trump has moved ahead with his threat to tax nearly everything China sends to the United States.

On Sunday, the Trump administration placed a 15 per cent levy on roughly $112 (£92.1) billion worth of Chinese goods and plans to place tariffs on roughly $160 (£131.7) billion worth of cellphones, laptops, clothing and toys on 15 December.

The US president has also said the United States will raise tariffs on $250 (£205.7) billion worth of products to 30 per cent from 25 per cent on 1 October.

China has vowed to retaliate on 15 December with more tariffs of its own.Independent Minds Events: get involved in the news agenda

While a deal appears far from certain, the two sides could still avert the increases and declare another ceasefire.

The United States and China have discussed a meeting in Washington in September, and American and Chinese officials will both be present on the sidelines of the UN General Assembly meeting in New York later in the month.

Myron Brilliant, the executive vice president of the US Chamber of Commerce, said the two governments would have to work to restore some trust before any conclusion to the trade war would be reached — perhaps through Chinese purchases of American agricultural goods, something Mr Trump has long focused on.

“There’s a trust deficit between the two governments,” he said. “We need steppingstones to build confidence in the relationship so both governments are positioned to get a deal down the road.”

The New York Times

https://www.independent.co.uk/news/world/americas/us-politics/china-us-trade-war-trump-tariffs-economy-impact-a9091221.html