Notes on the Obama-Clinton Economic Strategy

         Alan Nasser wrote an interesting piece on Clinton's economic agenda that puts the relationship between the domestic US economy, foreign aggression and the sprawling radical "trade" deals known as the TTP and TTIP in a clearer light. Basically, the way the American elite see it they can no longer count on the American consumer to drive the domestic economy, much less the global economy; the logical conclusion is that they must export more. Then comes the obvious unasked question--export what? Bonds, movies, pornography or maybe real estate get-rich-quick schemes? More serious answers include food, software, and oil.  Every now and then, some US industry bull comes out of the woodwork to claim that US industry is healthy, enormous, and world-class with bright rosy prospects.  Such protestations belie the actual point, US industry constitutes a very small proportion of both the employed labor force and a small and diminishing proportion of US GDP; profits on the whole are about 3-400 billion which while it may seem large is small in comparison to FIRE sector profits, capital gains, and rents. Taken by itself at 1.7 trillion dollars the US manufacturing economy on its own would be classed as one of the world's largest economies  but again it is rather small in comparison to the rest of the economy and rather pathetic when compared to the sheer size of the US population and available labor force. America's status as a great manufacturer is not the achievement of a present generation but an enormous inheritance that was handed down to us from more than a century ago--one, I might add, that is rapidly being squandered. In the present decade, industrial job loss is reported to be worse than the Great Depression with declining or stagnant output in the largest industries showing that this declining job-share is not a cinderella story of exploding productivity to be celebrated; a painful pitstop to a post-industrial leisure economy.

     The problem I suppose, is not so much the aim as it is the implementation; for 40 years the industrial base has been increasingly crushed, eviscerated, degraded and worn down, and now we must jump back in to compete for consumer dollars primarily in Asia. I suspect readers well-know that East Asian economies boast both enormous industrial belts themselves and, generally, have very low-wages in comparison to American wages and living standards. That Asian middle class consumer dollar is limited too, both because the emergence of even poorer manufacturing locations is putting the squeeze on wage growth and because American monetary imperialism (along with neoliberalism) is either vacuuming value out of the region or stifling further growth. Meanwhile the American industrial base and working class, both rusty, aging, and scarified, must energetically gear up to compete for fickle Asian consumers whose home governments tend to practice either shadow protectionism or open protectionism as angry American protestations have long made known. This is not the worst of it, since after all US corporations and its government flunkies are some of the worst practitioners of shadow protectionism and free-market cheating,  rather state-support for industry, infrastructure and redistribution in Asian nations make competing for that Asian consumer dollar (or should we say yuan?) a difficult endeavor on the basis of the wild, hyper-individualistic, postmodern free-market Anglo-American finance capitalism that the US loves to practice. Perhaps there are those who are deluded enough into believing that all America needs to do is produce more software engineers and  hedgefund brokers who will busily work towards transferring their product into "exports" which the world will gladly accept. That doesn't leave much work for the rest of us except cleaning the toilets, changing adult diapers, driving the ubers, serving tables and tending the bar. Perhaps that is why we are seeing such energetic promotion of the "gig economy" as an alternative to both the higher costs of steady employment and labor resistance that tends to grow with regularity.  Having experienced this world of under-the-table employment and high-tech digital precarity along with its consequent periods of long under and unemployment I can say that is a fast lane trip to poverty and immiseration. No path could create a nation of welfare queens quicker than trying to reimagine labor as either a musical gig or a kind of  impromptu street hustling that you might see with copycat or illegal goods. Newsflash: ordinary people stay out of the music business not due to some lack of passion but because they don't want to starve. I suppose that's not very romantic to say, 

because true art can only emerge from suffering and poverty, or so the narrative goes anyway, but fuck that mythos anyways since its been deployed to justify the appalling labor standards and precarity of industries of cultural production.

     More work exploring the "gig-economy" may or may not appear on this blog thanks to the precarity and lack of compensation that comes from being a writer, especially one that would prefer to remain anonymous in an age where the persona and online social media politicking is as important as the work itself, in the present times. It is something I want to explore but like with everything else on this blog, not something I get paid to do. When we surmise three-basic trends together: mass unemployment/informalization of labor, a desire to increase exports, and rhetorical claims that consumers must either lower their expectations or cut back, then we see that key-feature is the immiseration of American labor, as indeed the only solution, that our betters are capable of dreaming up in order to increase competition in the world economy. US citizens, especially workers, need to expect more hard times ahead because unfortunately this is the new normal, the new "business-as-usual" and not the effect of a new crisis or super-crisis.  Here are some basic reasons why I find this broad strategy implausible for creating a renewed bout of mass prosperity, much less even job growth.

1. The US sustains an enormous trade deficit and thanks in large part to its hegemonic monetary imperialism has served as the "consumer of last resort" for sometime; increasing exports will only diminish the trade deficit in the best case scenario, but it will not necessarily boost domestic consumption. Global demand weakness and economic slow-down makes growing the US economy via the export strategy seem unrealistic; especially when some foreign industrialists desperately wish that the US would consume more.

2. Foreign trade only makes up 23% of US trade and while that is a record for the US where foreign trade made up 6-8% of trade in the early 20th century it is generally lower than the foreign trade proportions of a large number of nations. Overall quantity does not mean that the quality of the effect that foreign trade has on the domestic economy can be underestimated but the large amount of resources and labor that the US has at its disposal and its protectionist history makes an inward turn a likely one. Especially when faced with economic decline and necessity for what you may call "re-development"

3. The FIRE sector makes the US cost of living too high for industrial labor to compete with Germany, much less Taiwan, China or Bangladesh. Leaving the FIRE sector out of control while trying to reform labor in order to export is building a castle on a sand.

4. Stagnant wages often translates into low-producitivity, and whether the US really can compete in the world of race-to-the-bottom makes little difference to workers who've known decades of stagnant wages and are used to a higher living standard. 

5. Continued monopoly on innovation and the rents/super-profits derived thereof are unlikely to be a plausible driver in bringing the US to new prosperity. To put it simply people don't want to pay for something intangible that's already been invented, especially in the neocolonial world where the widespread feeling is that they've been ripped off or are being ripped off by the hegemonic powers. Likewise, innovation tends to occur where manufacturing also occurs; fundamentalist market-ideology poses a serious threat to public institutions and government research that serves as a counter-tendency to that decline.  China has moved into second place  for high quality science and it seems implausible the problem can be solved by the current conservative-liberal guilt-tripping that asks college debt-serfs to forsake their passion or a more lucrative field in favor of STEM.
6. As far as manufacturing itself goes only the most extreme neoliberals argue that the US can do without manufacturing but these extremists set the tone of the conversation. The real debate is whether American workers should do the "unskilled" industrial labor that is considered low on the value chain or whether they should only do the high-tech high-value added work that is requires a high-degree of technical and educational training. The typical answer has been all the "low-value added" labor should be left to Asian workers either making far less or working in conditions of semi-slavery while Americans should only do high-value added work due to their high-wages. The problem is there isn't enough high-tech industrial work to go around or enough highly educated high-tech workers. The unemployment problem is greatly concerned with people at the bottom of the labor market who are considered "unskilled"and so-called low-value added industrial work would be a much better use of that scarified and underutilized labor then generic service work. The general tendency of capitalism excepting certain counter-tendencies is towards de-skilling anyways. Supposedly, the US with 12-15 million industrial workers produces just as much value as China with its 100 million+ industrial workers. That seems far-fetched indeed when you compare output as well as the internal weaknesses of American industry, China bulls and defenders of China correctly note that its probably a world market-price evaluation and monetary devaluation problem more than the internal weakness and inefficiency of Chinese industry.

Other factors like the TTP and TTIP as well as the ultra-aggressiveness of the democratic foreign policy program in this witches brew must be left aside for now, although no doubt they play a massive role.  This immiseration program is one of blood tribute from a working class already experiencing major mortality increases while being bled dry, it is not a concrete program of re-industrialization. Hudson is saying that prominent economists are expecting mass expatriation and further demographic collapse of the American body politic especially when Obama is expected to hammer the TTP hardcore on the domestic population after the elections. The caveat here is that Americans have no place to go, in general, they only speak one language: English. That was not the case in the Greek, Latvian or Russian situations. It should be noted that 2016 saw record levels of US expatriates renouncing their citizenship thanks to absurd rules that tax private foreign income of citizens while leaving foreign earnings of major US corporations largely untouched or smuggled in through the back door.  Dissatisfaction with the quality of American economic or social life as well as the general deterioration in the quality of American culture is one major factor in this that the US media will probably never bring themselves to admit. Disgust at America's horrid reactionary and bellicose politics as well as its hyper-liberal and individualist "left-wing" is another factor that I think could even make Superman say "I Quit!" or turn Captain America onto fascism. 

Either way the American elite have no solutions to offer. They are so rapacious that if they had solutions they would not offer them, they are rabid opponents of the most niggardly economic reforms that might diminish their wealth and power.

The Weirdness of Post-Modern America; Or How Donald Trump Can Exist

        George Carlin once said: "When you're born you get a ticket to the freak show. When you're born in America, you get a front row seat." and that one observation by Carlin was worth all the famous Tocqueville quotes about America combined. I was very stunned and surprised by new data  about rising mortality among the white population (especially the uneducated and middle aged) that surfaced recently but perhaps nothing surprised me more than the lack of reaction to it on social media and in the nation's media generally. I found a surprisingly good run-down of the data on mic.com but not surprisingly, the article was posted to the "policy" section of their website and not their blasé--and more popular, "Identities" section. You'd think an issue affecting the majority population of the US population might count as an "identities" issue. But for identity politics to maintain its cosmic solidity and balance being white, straight, or male must not be counted as a valid identity--otherwise the point of a politics of identity is meaningless for a variety of reasons. But that is not to say that a white christian identity politics does not arise, it does and sometimes with a vengeance within the Republican party.

     Increases in mortality are rare outside of war-time and famine and the only time I can recall a mortality spike this dramatic in a developed country outside of war was in post-Soviet Russia during the "shock treatment" of the 90s. There are certain similarities and obvious differences. In both cases, opioids and alcohol took a savage toll on society, especially on men. Some have tried to argue away the effects of shock therapy on Russia's population and ascribe it solely to an increase in alcohol consumption, as if millions of homeless and jobless workers and a loss in general security for the whole population had nothing to do with the mortality spike or the increase in alcohol consumption itself. Since possible economic causes of this spike are never addressed such as the effects of work stress/pain and poverty upon health, I suspect we will try to attempt to explain this phenomenon away  in a similar manner. As if a large portion of the population commit suicide, drink and drug themselves to death in good times and as if that situation has nothing to do with the economic situation.
Russian people would never buy that for a second and some Russians even talked about putting the ultra-capitalist reformers on trial for "genocide" (a mostly useless term in general, but not designed to apply in a case like this). But America is the land where the phrase misattributed to PT Barnum "There's a sucker born every minute." was coined. And Americans inhabit an alternate universe on par with anything imagined by Orwell or Huxley--whose works American writers frequently reach for because of their own failure of imagination to comprehend the conditions around them. And it is not entirely their fault, the American education system, media, and the generally unspoken rules of conduct and social interaction seem to be a giant machine oriented toward the purpose of crushing creativity, cultural sophistication, and frank expression.

      In a nation where "racism" and "whiteness" supposedly rules over everything-- even America's loudly worshiped and intertwined religious icons of capitalism and vehement anti-communism (again supposedly), the lack of reaction to this trend is strange to see. The liberal intelligentsia did not have much to say, for that matter neither did most mainstream conservatives. In any ordinary country, if prominent scientists had shown that there was a spike in mortality among the majority of the population then a national emergency would be declared and parliament and other government bodies would do whatever they could to solve the problem. Not in America. And that's partially due to rapaciousness of the American oligarchy and partially due to the inability of liberals and conservatives to think in class terms. Liberals have given it up altogether, especially not that there aren't any bomb-throwing anarchists or communist parties conducting street marches or weapons training for the coming revolution. Conservatives reach for it instinctively to draw class hatred towards the liberal elite and the democratic party but shirk immediately when it touches the religious icons of capitalism and anti-communism. As Thomas Frank argued in his famous book What's The Matter With Kansas: How Conservatives Won the Heart of America the Democratic Party is the party of the 10%; or, the party of upper-middle class college-educated urban/suburban professionals.

      For the Democrats the opportunity might exist to reconstitute Social Democracy on a multi-racial basis subordinate to finance capital but the magic key, if it exists, has not been found. Pretty soon the question of whether classes exist or, to put it differently, whether it matters, in America must arise in such discussions. And for modern liberals it is much easier to call for an end to privilege in racial or gender matters then to broach the question of whether economic privilege exists. Now the question arises are there classes in White America or is every member of White America part of a ruling class dominating non-white America? To anyone who accuses me of being uncharitable, I am only formulating what is implicit in much of the argument in today's Identity polemics. Marxists know that  even White America is a class society, and a surprisingly brutal one given the resources it has at hand; and deep down so do the identity politics folks.

       Then there is the question of what it actually means to be multi-cultural or "multi-racial" in America in 2016. In an interesting article written as far back as 1998 Eugene Volokh writes: "Asians aren't just white: They are lilly white. I first noticed this effect 10 years ago, where a friend of mine commented that the guests were all white.  I responded by mentioning about a dozen Asians; oh, she said, that's right, but you know what I mean. At a recent UCLA conference I attended, two speakers complained that everyone on the panel was white, without even realizing that one of the speakers was ethnically Chinese, and another was an Asian Indian with skin darker than that of many American blacks." This in itself is an interesting case of the weirdness of the distribution of power between groups in the United States; in the same country where mass panic gripped society a century ago about Asian immigration there is now a silent consensus that Asians or white, or maybe just white enough. Asian immigration to the United States in the 20th century has a great deal to do with the Cold War and America's military presence in Korea, Japan, and Vietnam. Migrants were often selected for admission due to anti-communist views, relative wealth, education, and skills, marriages to US soldiers etc or favored refugee status. The Asian immigration was usually not of the same type as the "coolies" or the poorest of the poor who often came to the US for the purposes of the most dangerous manual labor a century ago. Today, adherents of the Hindu religion have the highest per capita income beating out Judaism, Buddhism, and all branches of Christianity. This undoubtedly has a great deal to do with the brain drain of highly-skilled Indians from the upper-castes of Indian society to the United States; America, in many ways, reaps the rewards of this post-colonial harvest. "Whiteness" has a physical basis but more often than not in the United States it signifies loyalty to the American Empire and proximity to the bourgeois class dictatorship in the United States. After all, many "non-white" groups like Southern Europeans, the Irish, and Jews were later promoted to white status in the United States.

      There is no reason to think this won't reoccur or isn't occurring now; with a lot of the hoopla about the end of a white majority in the United States, few have considered the fact that when "Hispanic Whites" (and trust me, this wasn't just made up by the US government, there are plenty of them in Western states and elsewhere in Latin America) are included then the United States will retain a white majority well past 2050. In fact, the white population including hispanic whites will probably stay around 75-80%. Ironically, Middle Eastern immigrants had been able to integrate into the "white" population in the United States relatively seamlessly prior to 9/11.  Democrats who think in old terms, using static identity politics categories that are themselves almost 40 years old think the decline in a  traditional white majority hands them electoral hegemony for the foreseeable future. The democrats gave up on winning the vote of the white working class along time ago, and reasons that portion that votes for it will have no where else to go for the foreseeable future. But their biggest captive voter base is that of the "non-whites" who fear the return of the brutal old-fashioned "settler"-hegemony of the past.

      But that is a shell-game and when even Nazi prison gangs  begin to accept Latino members then you know something really is changing. And likewise, when I was attempting to get a handle on the size of the white prison population (statistics on this are actually hard to come by) I found it quite fascinating that according to BOP statistics 56% of their prisoners were white; there was no separate category for Latinos. My back of the envelope calculation, for anyone interested, based on incarceration per 100,000 is about 760,000 for non-Hispanic European whites--still larger than China's official prison population.  In the face of all this, what is the meaning of Donald Trump who is running the most revanchist (to liberal pundits) and fiery conservative campaign in recent history? It isn't exactly clear how a Trump presidency will shake out but we can offer some suggestions about what it is and why it can do well--despite claims that the a Trump victory is politically or demographically impossible.

      The "aggrieved white working class" thesis comes into play and the fact that if you do a search on white men in prison you get very few relevant articles of interest is telling.  As fashionable as it is to talk about intersectionality there is very little of it on matters of class and its unsurprising that the white working class feels excluded as what passes for the Left in the US has no genuine interest in their problems or in trying to build solidarity on a class basis. So they do turn to reactionary politicians to hear their concerns out of frustration, deception and inclination.

       But that really can't explain everything and it doesn't. The US is in a very deep crisis in both its role as the guarantor of global capital and as a world empire. Previous neoliberal "globalizers"argued that the working class and American industry had to take some licks in order to preserve America's international interests--and pay they did.  But in the aftermath of financial bubble collapses, stagnant wages, and industrial capital flight/bankruptcy each crisis has wrought deeper and deeper scars in the social fabric--even in the nation considered to be capital's heartland, its true Empire. Even if American transnational corporations still dominate the global economy, nothing says that translates into greater competitiveness and higher living standards at home. To be clear, there was something of a humane alternative, as humane an alternative as could be found under capitalist-imperialism at least, which was Bernie's suggestion of a fair trade regimen with countries with rough wage parity with the United States. This would have been effective US support for a global minimum wage and at least plays some justifying role in Bernie's social vision: a new type of social democracy for the United States in a  "globalized" world. Who knows how serious it really was or its level of political feasibility. The point being that if capitalists in the Global North are increasingly accepting the arguments of the anti-WTO protestors: that what we increasingly have now is freedom of movement for capital and not for people then it follows some rough parity should exist if goods and labor forces are to be permitted to move from North to South and vice versa without restriction. For the vast majority of people, some security would have to be the precondition for "opening" up their societies and thinking of themselves as global instead of national citizens. Bernie could have proposed Universal Basic Income and a shorter workweek to encourage job creation, job sharing and poverty alleviation for the working poor. Clinton perhaps would represent the status quo but on an even vaster scale which is politically difficult and unpalatable for a number of reasons.

     What Trump had which Bernie didn't was an emphasis on jobs, especially manufacturing jobs which are a slipping proportion of American employment constituting a sign of capitalism's agonizing death for Westra and the descent of the US into a Third World economy for many other critics.There is the question of whether the US economy, as dependent on it is on unproductive service work and finance could even survive without financial bubbles; because what drives the economy if the production of real products take-up an increasingly declining share of the labor force, GDP proportion and output?

     So here we have a real estate mogul, the very essence of the FIRE sector which is strangling the US economy arguing for greater protection and increasing the output of US industry. But of course, here he runs into the problem of arguing that he would tariff "US" corporations who operate overseas and US firms still make up a large proportion of trans-national corporations; for Trump "US" corporations are killing the US economy and workforce by employing foreign labor and importing "foreign" products. But this message is popular, even among people who don't have "white" skin.  Some polls suggest inordinately large support for Trump among minority voters compared to past republicans. This is an appeal that has dollars and cents behind it; not Jesus and Cowboy hats like during the Bush administration. The man who refers to Alabamians as: "the real America" also defends New York from other conservative republicans proclaiming that his home city has "the best values".  For the insiders in the Establishment it does not help that America has a long history of protectionism and economic populism.

     What Trump is doing in my view is attempting to enclose America off as a global Empire; so America is no longer in German and Japan too, but it is in the territorially constituted boundaries of the United States. This is not to say that America will have no foreign role but for Trump it will now be on America's terms; with the Cold War over there is no need to extend deals that Trump views as being extortionately magnanimous to our friends and allies. America's role will be to look after American capitalism not global capitalism Trump seems to say; whatever that even means in an era where American capital has so effectively colonized the structure of the global economy that sometimes it seems that "capital" and "America" are effectively the same thing. It certainly marks dangerous times, but for those "non-whites" within US borders I believe that Trump wants to make them an offer they won't refuse by trading global solidarity for prosperity, or even at this point, just a job. Trump wants to reorient citizens towards the classic imperial conception of republicanism that the founders inscribed with the emphasis on values, culture, and birth-right. Essentially, I believe that Trump has no problem with Hispanics who are loyal to the Empire but his gripe is with those who stream across the border working in the Empire's construction sites and farms without changing to please the Empire. Maybe it could be said that they change the Empire itself. And this is not the first time that has happened.

The call that immigrants must be "American" is an old one and I do not think Trump will rule out letting more immigrants in--on the condition that they become "Americans". After all, what capitalist could rule out allowing valuable labor at a lower cost if a new economic boom were to actually occur.
But I think the identity politics Left is going to find that avoiding economic self-interest questions and their divisive and undisciplined practice has won them little affection from real people, beyond when they occasionally talk about issues that matter to them in the right way. The white working class might not be Tumblr but for that matter Tumblr doesn't exist in the barrio or the ghetto either. Tumblr-world only exists in elite liberal institutions, college campuses, and a make-up/porn sharing website for bitches who were bullies in high school but  who want to feel good about themselves and who want to feel like they are still in the in-crowd. Not-so short memories even in amnesiac post-modern America may soon teach Hillary a painful lesson.

Zizek BTFO by a Post-Modernist?

     Recently, a particularly uninspired and uninspiring article on counterpunch caught my eye. The article is written in the really trite open letter style that swamps articles on social media,  which despite the best attempts of a few brave souls still hasn't earned the mass derision that it richly deserves. Every so-often the politically correct Left decides to launch an attack on Zizek and the reason why is patently obvious--his books sell well and theirs don't. This attempt will probably not do any more to dint his popularity than previous attempts and its notable that this is the first article for counterpunch written by the "concerned" letter writer. Typically open letters often start with false praise and this letter is no different when the author isn't praising Zizek's brain, books or contrarianism, she is informing him that he is wrong about everything.  It is often said that nothing identifies a hipster more than the rabid denial that someone is one and the charge of post-modernism is no different: "...but my criticism is not in the post-modern vein of refusing the notion of the universal." Who else sees where this is going?

      My intention here is not to defend Zizek whose eclecticism and shock jock antics are well-known, but to point out that he is here merely a rorschach test for those portions of the Left that the author would like to attack directly but for some reason has chosen not to. The author excerpts a section from one of Zizek's well-known hobby-horses of emphasizing the need to defend Western values on the Left and his analysis of "capitalism with Asian values" which emphasizes that capitalism no longer needs the Western-centric radically emancipatory universal values that the (postmodern) Left commonly critiques. The author decides it opportune to engage in a rather shallow discussion of the nature of the Enlightenment without touching his essential point. Zizek in first presenting his argument confined it mainly to the authoritarian polities of Singapore (where the term "capitalism with Asian values" originated) and China and proceeded with some well-worn academic tripe about Buddhism and capitalism in the Weberian vein. But since then recent developments have far from disproved his contention with the rise of Hindu fascist Nahrendra Modi to power who Zizek calls "a most brutal neoliberal" and even the acceptance of many elements of capitalism by the so-called Islamic State. We analyzed Westra's bare-bones conception of capitalism as a mode of production for profit that is oriented towards the abstract accumulation of mercantile wealth from the perspective of the seller. From that perspective its pretty clear that the Enlightenment thought and values that served as capitalism's justification is no longer really necessary, especially after escaping its European shell.

       To be clear, the values of the Enlightenment are no longer really necessary in the rest of the West, in fact they've been or are being steadily abandoned. Some feints towards those values will always probably be necessary but that is a distraction from the real substantive content. Michael Hudson in his book Killing The Host: How Financial Parasites and Debt Bondage Destroy the Global Economy makes a solid case that the economic legacy of the Enlightenment and classical political economy is in their program to liberate the barely post-feudal economies of Europe and its offshoots from rentier interests for the purposes of reducing economic costs and increasing efficiency. Under the umbrella of what may broadly be called rentier interests were the landlord classes, chartered monopoly merchants and financial/usurer's capital. In his superb book Beyond Mainstream Explanations of the Crisis: Parasitic Finance Capital Ismael-Hussein Zadeh explains some of reasons that the European bourgeoisie began to retreat from this radical legacy of attacking the unearned economic privilege of the rentier classes: 1. the necessity of forming a united front among the propertied classes against the proletariat 2. changes in the structure of capitalist ownership bringing the world outlook of the productive bourgeoisie closer to that of the rentiers they had previously decried. I will go more in-depth in the post on economic thought and the Enlightenment but for now it is sufficient to say that these changes began to occur in the late 19th century and that economic thought has increasingly reflected it.

     Returning to the author's conception of the Enlightenment the author starts from a loaded position about how the Enlightenment could be defended and then seems to work in a discussion of Hegel's merits and demerits--as if he was the entire Enlightenment or a substitute for the phenomenon as a whole. Hegel has not been fashionable since the 1840s and hence rarely deeply studied but here the author is repeating a narrative about him that anyone vaguely familiar with post-colonial studies must already know. But this shallow dismissal of Hegel reminds me of a habit of intellectual derision and feigned knowledge popular in academia today that John Dolan sums up: "The notion that Stevens might be a racist AND a great poet, just as Dworkin might be a fat loon AND a crucial figure in feminist intellectual history is simply beyond our Beige compatriots." he goes on to cite a scene from the day after tomorrow where a male character argues that Nietzsche was the most profound thinker of the 19th century only to be trumped by the female love interest who says that he was a chauvinist in love with his sister. So suffice it to say that the notion that Hegel might have been a racist as well as one of the greatest philosophers in intellectual history with something still salvageable in his thought is beyond our author here. Just like the notion that the Enlightenment could have been a major progressive step for mankind as well as also having devastating consequences.

       Implicitly understanding that her position is the politically correct orthodoxy of the academic "Left" the author attempts to lure us in with false contrarianism. Zizek may seem like an unorthodox radical contrarian, the author seems to say, but are YOU ready for the redpill about Europe that even Zizek won't touch? The author sets it up for us: Enlightenment Europeans didn't just fail to live up to their values but Enlightenment ideals were far from innocent. This position, in one form or another, was expressed to great academic acclaim by Adorno, Focault, Furet, Blaut, Said and others decades ago.  What is the clincher for her? That slavery and the Atlantic slave trade took place during the Enlightenment. Neglecting that it also took place before the Enlightenment and was also plied in the Indian Ocean over a longer period of time, the author fails to point out that Enlightenment-inspired movements were the first to successfully abolish slavery and challenge a barbaric social relation that was practiced nearly everywhere. But that history is small beans compared to the author's main contention: the Enlightenment's conception of freedom is racist. And why is that? "What freedom meant, and what being a human being meant, was premised on having an opposite--the non-being of the slave." You can see where this is going. A similar argument is presented Greg Grandin's overall decent book The Empire of Necessity if anyone needs a reference, which argues that for people at the time to conceive of themselves as free beings they needed an opposite for reference. Now, for people in pre-modern times living in traditional class societies, "freedom" in the modern sense usually never meant much more then the absence of slavery. The Roman Patricians taught their children that the worst fate that could befall a person was to become a slave--while keeping slaves themselves. Nor was there anything unique in European slavery in considering the slave "a non-being"; Orlando Patterson in studying slavery in sixty-six societies argues that the position of the slave as being a "socially dead" being is common practice. The other position that what made European slavery in the Atlantic world unique was that it was a racialized and heritable position is also questionable in my view. Michael Parenti in his book The Assassination Of Julius Caesar: A People's History of Rome (whatever its flaws) draws on some sources and scholars that convincingly argue that German slaves in Rome were "racialized" by the slaveholding class and that the remittance of the children of slaves from slavery was far less common than usually thought. I would not be surprised to find out that other romantic views about the benign character of slavery in non-western societies also turned out to be false.

       But returning to the author, from all this the privileging of whiteness flows, so that therefore it is impossible to have Enlightenment-inspired freedom without privileging "whiteness" and therefore oppressing the Other. I'm going to take a small moment here to ask: who invented the concept of white privilege? Was it the Weathermen? Was it Fanon? Was it Du Bois or even Frederick Douglas? It was actually none of these. During the French Revolution, the French radicals were on the outs with the American revolutionaries that had partially inspired the French Revolution in the first place. At this point they began to critique what they increasingly saw as the American Revolution's conservative nature: they had thrown off Britain, a state dominated by old regime aristocrats, and had moved towards instituting many popular liberties amongst themselves but what they retained was what the French radicals called "the aristocracy of the epidermis." according to Domenico Losurdo. Its notable that the reactionaries that opposed the radical revolutionaries tried to re-institute the slave trade and slavery. Similarly, during this same time, critiques of Empire, however limited, began to emerge; Empire and colonialism were hardly dirty words before modern times, they seem to have existed in most class societies.  The direct correlation between the Enlightenment and King Leopold's Congo or the Holocaust hardly seems sustainable as Anthony Pagdin correctly argues in the preface to his book on the Enlightenment.

      When the author tells us that all the hopes and horrors of modernity are intertangled and therefore it should be dispensed with, she may think she is saying something profound but only tells us that there are contradictions in history and the world. Utilizing Jaffe's reading of Western democracy as a global form of apartheid she chides Zizek that "our" democracies cannot be disentangled from whiteness. There is a theoretical problem with equating settler-colonial societies like South Africa and others with European ones--imperialist nations they maybe. It is not as if Zizek doesn't talk about "new apartheids" as a feature of our age, anyway. But it raises the question, is bourgeois democracy white? One feature of our time, has been the spread of bourgeois democracy through the Third World beginning in the late 80s and continuing into our time through the so-called third and fourth waves of democratization. These developments thrilled identity circles even when they led to ruin like during the Arab Spring. Even in the mid-19th century most of the world's political democracies were actually in Latin America.  We will leave aside the true nature of these democracies.

         With the disappointments of national liberation struggles in the 1960s the discourse has increasingly shifted to "race" as the mode of analysis. Now the struggle and accepted parameters of debate revolves around abolishing "whiteness" whatever that may actually mean; the more sophisticated notions of this discourse hold that anyone who has darker skin is inherently more oppressed than someone who has lighter skin. The latter increasingly encompasses people who are not European or who do not have skin traditionally considered "white". Some people realize the problems of this shifting scale and try to form a united front against Europeans and European settlers on an anything-but-class basis. In reality, hatred of whites usually isn't enough to hold the various oppressed nations together in the United States or anywhere, much less lead them to victory. What is necessary is to identity specific conditions of national oppression and to organize on the basis of a particular nation, as a cultural and social entity, not just a skin color. A "white" left-wing Venezuelan patriot can do more to advance revolution than someone on twitter  or tumblr denouncing whiteness. But the post-modern project does not respect nation-states, even those of the oppressed, and what they profess is a kind of cosmopolitanism of différance to use Derrida's term.
     
      Styve proceeds with the usual postmodern performative contradiction: "Don't get me wrong, I was incredibly hopeful and in awe when the Greeks went to the polls last year and voted OXI." This should be read: "look, its not like I don't see what your saying but...you (we) need to check your (our) privilege." she continues by mournfully admitting: "...we have come to the extreme position where even arguing for a full welfare state seems incredibly radical." And here it is, the friction between "white" imperialist social democracy and neoliberal identity politics. As a liberal, Styve wants to believe but also what about people of color™? If we can't guarantee that everything will be perfect for them then it would be better just to not do anything. Don't build solidarity; break down barriers.
While this all might seem like a serious competition between Zizek's evil modernist white male communism and Styve's "radical" post-modern racial abolitionism it is nothing of the sort. It is a struggle between two competing post-modernisms, the one we are analyzing currently, and Zizek's weird project of trying to push communism through the EU. She refers to the dependency theorists of the 1970s who sought analyze how the core working class was benefiting from imperialism and says: "Now, despite the relative and increasing poverty of the European precariat to what extent are they (we!) willing to give up the privileges that being a citizen of the Core gives?" I have already analyzed the issue of the labor aristocracy here but it pains me to say that while as much I found Third Worldist (again for lack of a better term) theory exhilarating in its willingness to question popular Left orthodoxy the politics of it are sometimes not much different than neoliberalism. It maybe forgotten that some of Milton Friedman's most acclaimed work was when he appropriated Marx and Engels concept of a labor aristocracy for capitalist purposes and argued that unions hurt members of the working class outside of its membership and in developing countries. What feeling human being or revolutionary could argue with such logic? It didn't help that the leadership of the developed nation unions were often reactionary.

         For Adolph Reed, identity politics isn't just co-opted by neoliberalism, it is neoliberalism. Aside from the superficial similarity between identity politics and neoliberalism in the promulgation of a strange brew of ultra-individualism, anti-communism, and red baiting, we see a proliferation of talking points designed to handle privilege from the Right.  This is indeed where the original neoliberals got their start; Union-busting for the less fortunate. It is pretty blatant in some of Friedman's documentaries, when he wasn't tipping his fedora and going on about how inheriting millions is the same as inheriting musical ability and eye color, he was walking around the streets of Singapore or Hong Kong showing vibrant displays of lights and commodities, small street venders cart-pushing their way out of poverty. The message: stepping in the way of capitalism's exploitation of the less fortunate was not only the privilege of the fortunate but a racist Euro-centric approach. Don't protest sweatshops. For that matter, you shouldn't protest political repression in a place like South Korea either because capitalism is bringing home the goods there.

        Fortunately, for neoliberalism and the resentful right, there is no end to privilege politics, and it never will, as capitalism will never be able to provide prosperity, much less employment for all of humanity. What the ruling class fears is not paying more or having to bestow more privileges to certain segments of the population but independent working class organization. Contrary to Styve who says we have no credibility to lead the revolution in the West, the real privilege is that of doing nothing. Many non-Westerners have said it, the idea that Westerners should await liberation from capitalism while non-Westerners die fighting to overthrow it is a privileged one. The historical case shows that revolution was easier when there was a highly-organized radical movement in the global North.

     Fortunately, some on the Left are questioning identity dogma and its practice. Contrary to identity politics attacking "whiteness" or encouraging mass migration of "non-white" people into Europe will not destroy the European or white identity. If we follow Stalin's theory of nationalism, nations aren't completely a creation of capitalism and they won't disappear until the advanced stage of communism. Stalin maybe getting his revenge as the EU is increasingly torn apart by nationalist divisions proving not only the hard reality of inter-imperialist struggle within the EU banner but also the division between core and periphery in Europe. A common subcontinental civilization may not be enough to unite Europe especially under capitalism. Likewise, there's more to being German or French then being white and many oppressed groups and nations in Europe and Russia are "white". Stalin in his time criticized Zionism as being an unscientific idea as it posited that Jews as members of a "race" were the same everywhere and thus ignored real national differences between Jews across countries. Unfortunately for people who live in imperialist nations there are cultural and ideological reasons for chauvinism and if the intention in joining the struggle is to purify oneself of it there then we will never be pure. People are trained to think that the way to undo "racism" from their minds is to not think or express any chauvinist thought rather than trying to change social relations or build solidarity. Imperialism uses this to its advantage by thinking the less offensive it makes itself and the more people from oppressed nations it invites to join the oppressor nations, the longer it can prolong this existence. In some ways, immigration bolsters oppressor nation privileges by inviting workers from the outside to fill the lowest and hardest work in society, in order to dent class consciousness or contradiction within or to move more native citizens into the middle class. This is not always the case though but the irony is that immigration can advance "white privilege" or at the least help keep imperialism going contrary to stated intentions.

       History offered us one glimpse into a terrifying vision of capitalism without "whiteness" when fascist Japan was rampaging across Asia killing millions of people in the nations it "liberated"; it was proclaiming the end of white colonialism in Asia in its propaganda and maybe even the world. Its propagandists proclaimed that communism was a European ideology and that it was a screen for greater "white" domination. It is eeiry how much post-modernists echo Japanese fascist propagandists  sometimes. It wasn't for nothing that the German philosopher Habermas called Focault: "a young conservative" because of the way he and other post-modernists integrated irrational conservative ideas reminiscent of the interwar period into a left-guise. It is likely that as capitalism dies it will increasingly conceal itself beneath a "non-white" mask. What we need is real proletarian politics and that is admittedly difficult to develop and push in the West but class is the key to ending other oppressions. Identity politics offers an ameliorative and libertarian edge for the system, implicitly feeding the illusion that imperialism would end of its own accord if the more repressive and chauvinistic elements of it disappeared. To appropriate Zizek *sniff* the Truth is exactly the opposite as what Styve maintains: "whiteness" could collapse and capitalism could keep going. This is especially the case that now that so much of its key architecture is located in Asia and elsewhere. Styve says that only the end of the world would end whiteness; but as Jameson and Zizek point out in the developed nations it is easier to imagine than the end of the world than the end of capitalism.

        Hopefully this will be the last time I write about the identity wars on this blog for sometime because of discomfort with it, boredom with it, and the pens of superior critics out there. But I could not avoid commenting on this little piece because as bad as Zizek can be at least he doesn't lie to the people and say he's not part of the European elite, he admits that it would be a lie, as European to say that he does not have a Eurocentric point of view. Can we say the same about those feigning anti-racist purity?

Review: "Unleashing Usury" by Richard Westra

      While not my favorite book on finance capital or financialization generally, Unleashing Usury: How Finance Opened The Door For Capitalism Then Swallowed It Whole by Richard Westra offers some novel arguments and interesting information about the state of global capitalism today. Perhaps Westra's most novel argument is that capitalism as a mode of production no longer exists; that may seem like a very strange argument to make when capitalism seems stronger than ever before. According to Westra we are living in a very peculiar form of post-capitalism that he dubs "capitalists without capitalism" inverting Peter Drucker's conception of "capitalism without capitalists" from which he draws the argument. Drucker was referring to the rise of so-called "institutional investors" retirement funds, pension funds, insurance funds etc. which constituted new forms of social saving which unleashed a veritable capital glut upon global markets. Drucker rejected the idea that these funds could really be called "capital" and found no pre-existing theory or framework that could explain it. He posited that this form of post-capitalism would move forward in a rational and positive way, i.e. everyone would more or less be a capitalist, meaning no one would be--the need for the social role provided by either individual capitalists or the collective class has disappeared. Like many revisionist Marxists of Old,  for Drucker capitalism was moving towards its opposite; something very much like socialism. Westra views things differently, for him, the unleashing of these huge pools of idle money (or M) on the market which cannot be invested productively signals the end of the capitalist system which can only be kept alive through intensified human misery. The faustian energies conjured by letting loose these idle funds, are rushing to the point that the neoliberal revolution which unleashed these forces will eat its own children--as well as the mother that spawned it. The argument here is pretty good for the most part: so-called assets under management (AUM) makes up 181% of OECD GDP. This clearly shows the social obsolescence of the role played by the capitalist class in the core countries and for Westra the inability to invest even a large proportion of this "capital" productively means that the form it must take to valorize itself is that of usurer's capital of profit earned without production M-M^ in Marxist terms. Profit (^) made purely from lending money and charging interest.

         At this point, some person either an internationalist neoliberal or a Third Worldist might object that while there are serious barriers to further real accumulation in the core capitalist countries that in fact new avenues and conditions for capitalism have been opened in the developing world. Westra rejects this on the grounds that many nations now are experiencing a phenomenon dubbed "premature deindustrialization" where gains made in industrialization are rapidly disappearing and many peasants are moving from subsistence agriculture straight to service work with no stage of productive industrial employment in between. Even in China with its enormous labor force of over 100 million manufacturing workers there have been reported stagnations in the overall number of workers for sometime (though some argue the real number is revised downwards for political reasons) and even workers at the notorious Foxconn plant are facing fierce challenges posed by automation. Few developing nations have made the transition to a fully-fledged industrial society over the course of the 20th-21st centuries. South Korea and Taiwan are two of the few that have ever boasted manufacturing  proportions of the labor force on par with that in the advanced countries (between 40-60% on average) and the window for other upstarts is closing. The core countries are likewise stagnating or declining in terms of the proportion of the labor force employed productively, with a few exceptions like Germany and South Korea as I noted in the last post.  For many Marxists and other economists, this trend might be worrying but not much of a big deal as far as the continued function of the system is concerned but for Westra it is essential. To sustain human society any economic system must "round the bases" as far as Westra is concerned which means 1. meeting the minimum standards of societal reproduction and growth 2. allocating resources with some degree of efficiency.

      The relationship between this and the trends outlined is simple but still carries with it some nuance--for Westra, the primary consideration and necessity for the reproduction of any capitalist society is the reproduction and commodification of productive labor. The price of productive labor is the primary cost and consideration of any ruling class in a capitalist society. In the past, peasantries making up 80-90% of the population were employed in agriculture and had direct recourse to the means of production, for this reason it was historical necessity for the capitalist mode of production that larger proportions of the laboring population be employed in manufacturing. As labor productivity in agriculture rose on the one hand and means of production/land were increasingly concentrated in the hands of the bourgeoisie on the other, this meant an alternate outlet of productively employed labor had to be found. This was found in the industrial society, a novelty in human history, where the proportions employed in manufacturing that we previously mentioned prevailed along with a population employed in agriculture constituting 20% or less of the population. For Westra, the increasing proportion of workers selling their commodified labor productively and rising real wages constitute one of the bases that must be rounded in order for a capitalist society to survive. We will explain his reasons for thinking so later on.

                                 Westra on capitalism and the "economic"
    Westra's definition and conception of the rise of capitalism as a system should be treated briefly. For Westra, capitalism is the subordination of human society to the pursuit of the abstract accumulation of mercantile wealth. Westra points out that typical Smithian conceptions of trade (John trades a shirt he made for a keg of beer made by Jack) is similar to sharing even if money is used to facilitate the trade. Whether the commodities are exchanged directly or the difference in time and input is split using money, the trade in this situation revolves around the two individuals desire in terms of use-value. The object in this case is to save time and resources, for each person to compensate the other for the particular use-value (commodity) that he lacks, not to earn a profit. The historical/anthropological case also lies against Smith as historical evidence suggests that trade first evolved as a form of exchange between communities and not between individuals. As you could imagine, people living in tight-knit communities with close kinship bonds would probably just share their produce in the first place instead of bothering with money or barter. Contrary to marginalist orthodoxy that tries to make sense of capitalism from the perspective of a rational consumer, capitalism instead makes the most sense from the perspective of the seller.  In other words, from the perspective of an individual or class whose primary purpose is not fair exchange but rather to make profit. Classical economics at least implicitly understood this essential aspect of capitalism.

      But as Marx explained, if every individual strove to cheat everyone whom he exchanges with then all the cheating would eventually be balanced out and collectively society would enjoy no increase in wealth (or profit for that matter). Thus to enjoy an increase in wealth and to produce a collective profit the capitalist class must at some point take up the capitalist production process of: M-C-P-C-M^ (P=Production). Thus capitalism as a system of production is qualitatively different from the  profit-making, labor exploitation, commodity trade, monetary exchange, speculation or huckstering that has existed through most of the history of civilization in some form or extent. These are all features of capitalism but are somewhat different from a society reliant on a system of production for profit. The capitalist class must collectively squeeze more value out of productive labor then what it costs to acquire it to make a collective profit. Theoretically, when freely-contracted, the worker enters this relationship as a seller of labor power and this would seem to put the worker on the same level as the capitalists as they are both sellers of a "product" looking out for their individual interests.  But the object of the individual industrial capitalist here is to acquire labor that is as cheap and productive as possible. The objective of the worker is to find work that is as pain-free, safe, and well-compensated as possible. Here interests begin to diverge and we have already noted that exceptions to the rule cannot collectively be the norm.  Therefore, Westra is completely correct to argue that the primary cost from the perspective of the capitalist system of production is (and should be) the cost of acquiring productive labor. A quick aside, if we take choice out of the equation and a capitalist buys a slave for labor as was common in the South before the Civil War, the slaves cannot collectively cost the slave-owning capitalists collectively more than what they are paid for or what it costs to keep them up.

      To re-emphasize with regards to exceptions on the labor-side of capitalism such as labor laws, government subsidies for workers, worker-owned businesses, other ethical/legal concerns and even trade between capitalist countries and nominally communist countries either must be twisted to conform to the logic of this system of production or is not strong enough to overthrow or impede the system's implicit function. For the record, no "pure" capitalist society has ever existed and it never will given the contradiction between human desires and need and the "abstract" push of the system to arbitrarily seek maximum profits. Westra emphasizes that in this respect it is an inhuman system and is not in the long-term compatible (whether we are talking decades or centuries) with human society. To use an extreme example, a hypothetical society that monetarized the relationship between mother and child and expected new born babies to pay the mother (and by extension society) the costs of "investment" in the child at profit on pain of cessation of care (death) would collapse very quickly. It is not necessary to resort such extreme thought experiments to come to the conclusion that the cumulative effect of a relentless and absent-minded quest for profit will inevitably be the collapse of human society.

       For capitalists themselves, the all-out war to produce as much as the market will bear in order to earn profit is a more efficient (though brutal) pricing mechanism than what prevailed under previous systems of production. Inefficient producers are wiped out. Meaning that even the integrity of capitalist property itself in individual cases is put on the chopping bloc when it does not conform with  the principles ordained in the system as part of an inter-ruling class promise. The intention of promoting efficiency and lower consumer prices being that every capitalist is also a consumer himself as he obtains many different things form the market (usually from other capitalists) in order to carry-on business in addition to his personal revenue. The bourgeoisie and their economists often misconstrue their own interest as the interests of society as a whole; while a case can be made that lower prices are in the interest of workers, the real intention is often to lower the costs of living in order to avoid over higher wages or to be able to get away with paying lower wages. Selling overproduced goods is often a goal as well. But this pricing system itself is not perfect, it does not merely assume itself through the magic of the market and for Westra this pricing system has been consistently malfunctioning in the leading sector of the global economy in what is probably by now the majority of capitalist history. For Westra (though perhaps not for all Marxists) this malfunctioning is a signal of the system's coming doom.

       At this point we begin to leave the realm of the "economic" in the sense that Westra understands it (but perhaps not in Marx's sense himself) which is in the emergence of bourgeois economics as an independent field of study separate from the study of history, religion and society as a kind of sphere operating autonomously independent from historical factors or anyone's will. The key to this conception of economics is the naturalization and idealization of capitalist social relationships that began as capitalism started to become dominant and has only intensified as this dominance increased. Of course this reading of classical political economy as merely a device for justifying de facto slavery of the wage-worker and the tyranny of the capitalist "meritocracy" is a shallow reading of that canon as well as its overall importance.

       We will treat the legacy of classical political economy and the Enlightenment in relationship to the capitalist system of production in another post.

               Value-Production Complexes, Finance and The End of Capitalism (?)
     Westra puts forth an interesting argument about what he terms "value-production complexes" in the history of capitalism. The first great and most successful value production complex was cotton production and cotton goods manufacturing. I have already written on new literature on cotton and cotton-led industrialization here. Suffice it to say, it is hard to disagree with his assertion. What is interesting about his argument is that he calls cotton production and manufacturing the perfect value production complex for capitalist pricing which we referred to earlier. He doesn't completely explain why this is but I can suggest some reasons for it. Unlike other crops, the primary limit to cotton production was the human labor necessary to pick, haul, and gin the cotton. The semi-tropical nature of cotton-growing precluded the use of free European labor and made slavery necessary.  The nature of the social relations used to produce cotton made it easy to produce it cheaply and the diffuse nature of cotton growing and slave-ownership lent itself to what bourgeois economists have dubbed perfect competition. No farmer held more than 1% of the market share hence no one could rest on his laurels as landowning classes were apt to do,  intense competition reigned in this sphere that drove farmers to produce cotton as cheaply as possible. American cotton farmers also produced primarily for the world market and not a local or national one.

     Cotton manufacturing on the other hand emerged from regions where textile weaving and manufacturing historically had relatively strong roots. Although the production of cotton cloth and goods was relatively new in European history it was relatively easy to do and hence also constituted a highly-competitive market. The invention of the water-frame initiated the labor productivity explosion of the Industrial Revolution. Now a worker in Northern England getting paid four times as much (in money wages) could produce cotton goods at a lower cost than Indian artisans on the open-market whereas previously Britain could not compete with India in textiles. Many more inventions for simplifying labor tasks and increasing productivity began to proliferate, including the steam engine. During this period of time, the technology used to produce cotton goods was easy to copy and  factories with identical capabilities could be set up next door, in the next county,  across the channel, or across the Ocean. Cotton-led industrialization resulted in one of the most rapid proliferation of advanced industry in modern history and most of the nations who had joined the club of cotton-based industrializers would go on to remain in the category of advanced industrial nations for the next 150 years. In mid-19th century Britain, which held a near-monopoly on world industrial production, there were over 4,000 owners of textile mills. While not seemingly impressive in proportion to Britain's population it would be hard to imagine 4,000 individually owned steel mills in the United States (or anywhere). Industrialists heavily utilized the labor of women and children in order to get the best price for productive labor and these child and female workers were largely classed as being "unskilled".  Inefficient producers and artisans were constantly being bankrupted but the conditions of competition were such that new industrialists or particularly motivated artisans could take up some of the slack if the large producers stagnated or went bankrupt themselves. The cotton textiles themselves were popular with all social classes and had near-universal worldwide appeal; it fit the near-universal human need and want for clothing. Clothes and Cloth not sold in London could be sold in China, India and Latin America. Poorly made American clothes that couldn't be sold abroad or even find an enthusiastic domestic market could be sold to American slave owners to fit the enslaved ("Lowell"in the parlance of Southern slaves). German or French workers could afford to buy their own nations manufactures without experiencing a drastic increase in the size of their wages.  The trend for commodity prices in most Western nations was deflationary for most of the 19th century.

       For Westra, the existence of the value-production complex of the global cotton industry was the pre-requisite for taming usury and orienting finance towards socially productive activity. Without the power of cotton as the leading industrial sector of the world-market then capitalist growth would be slow, if it occurred at all, European civilization would have been wracked by the debt claims of finance. No one (who is not a banker) believes that debt service can realistically continue if an economy experiences no economic growth so this is not in much dispute. But Westra's conception of finance contains some questionable claims as he does not explain how or what the "socially productive" that finance carries out actually is.  He correctly points out that finance does not actually finance Industry and I'm sure other critics of financialization would argue that it never has had much of a history of doing so. He points out correctly that the bank of England actually funded war and had little to do with financing the Industrial Revolution. Westra gets the odd-idea that the private banking cartels that served as de facto state banks in much of the Western world were somehow the same in this era as a "socialized" and "national" state-bank. As the hoarder and creditor of last resort, these banks play and continue to play an important role in holding up states and national economies but their primary intention was (arguably still is) to change governments for the privilege of using their own money. Westra argues that they de facto played this role by socializing the gold bullion of the country and preventing credit from exceeding this, but credit-money and claims to credit money always went beyond the actual gold in reserve or circulating. When downturns came, credit money would be destroyed with bankruptcy of private banks, cashed in for gold or securities, taken out of circulation or denied convertibility; debtors would pay back loans using by taking out even bigger loans at higher interest, or undergo bankruptcy. Precious metal often fled abroad as a means of settling debts abroad leaving reserves depleted. Every time this happened, the depth and seriousness of the crisis intensified each time, leading to the near-bankruptcy of the Bank of England on more than one occasion.

     The English banking system is often portrayed in idyllic terms by Marxist theorists because of the role it holds in Volume III but a cursory reading of that section reveals that Marx feared that segment of the British economy was growing more parasitic, more opulent, and more dangerous.  It seems very far from the role of a state bank intended to provide cheap money to the productive bourgeoisie as well as the economic needs of ordinary citizens. The main economic purposes of the British banking system during the heyday of free competition appears to have been providing loans for long-distance trade, the bills of which circulated as the debts were traded to third parties which evolved a cottage industry of discounting the bills and the other function appears to have been providing cheap loans for stock market gamblers. One practice, even if it adds cost to the economy, greases the wheels of trade by providing a type of informal fiat currency that the bank itself was unwilling to issue; the detriment caused by the other practice is obvious. This is part of what Hudson terms the "destructive Anglo-Dutch model of finance" as opposed to French-German model of state universal banks. This latter model was intended to finance industry but perished with the reconstruction of continental banking after WWI. Finance, it seems, thrives by being ruthless and even the caution of others can provide subsidy for its own excess.The argument that Westra initially presents about social saving being monetized into the global economy probably isn't nearly as novel as it seems. Marx noted in 1865 that workers deposits were increasingly a factor in undergirding bank reserves, so that the savings of least in society come to finance the speculation and spending of the great. Much of what capitalism does is about transforming social endeavors into private profits, therefore the glut of AUM as a form of social capital is problem of quantity and not necessarily something fundamentally at odds with the system.

     To move back to Westra's conception of capitalist history in the 1870s something strange happened in the history of capitalism. In 1873, Europe and America entered a depression that it would struggle for over 20 years to escape. Around that time, according to Westra, the West began to move to a new value production complex. But this new value production-complex was focused on the production of a new use-value that was far more difficult to subject to the rigors of capitalist pricing: steel. Steel rarely moved outside national borders and it was too expensive to find much of a market in developing nations. Unlike cotton it wasn't a true consumer good but was typically a constituent of production in other commodities. Steel companies also did far more business with national militaries than textile companies. The production of steel on a modern scale was a high-tech process involving large quantities of capital which few individual capitalists were willing to undertake. As a result, steel firms were more and more founded through joint-stock operations and the practice of using joint-stock corporations to found companies proliferated. Steel companies quickly developed into monopolies both due to the high composition of capital required, the difficulty of replacing shuttered steel firms, and the low-rate of profit. As steel oligopolies formed they spurned competition both nationally and internationally. Whereas in the previous epoch of capitalist production, individual ownership both justified entrepreneurship and obscured industrial capitalist profits by portraying them as the wages of productive managerial labor and risk-taking, in the joint-stock operation this was no longer obscured. Firms were founded by monied men who earned both interest on their initial stake in ownership (dividends) and who shared in company profits,  the real business of management and technical knowledge was demoted to a mere waged occupation. This was a new type of social property designed to benefit the bourgeoisie an effective abolition of tangible private property. The work was dangerous and physically arduous and hence steel industrialists could not long get away with using the least valuable forms of productive labor available. It was a labor force of adult men and therefore far less easy to control. This meant the cost of reproducing the working class and that of socially necessary productive labor would have to rise.

      For Westra, it seems the malfunctioning of this mechanism resulted in imperialism: the policy of the export of financial capital to underdeveloped countries as both a source of raw material and super-profits. This explanation is not wholly convincing and is somewhat analogous to the monthly review school's argument (whatever their merits) that the rise of finance is tied to the malfunctioning of real accumulation. In reality, finance is probably its own parasitic entity with its own nature, although it has linkages that meet with rest of the real economy. The structural cause of the Long Depression was probably a result of a crisis in the cotton industry as the result of the Civil War which was overcome only with great difficulty; cotton was likely surpassed by steel and oil somewhere around 1900. The theory of technologically induced waves of depression has its merits. What is also noticeable during this period is the rising proportion of state spending from 5% of economic activity in mid-Victorian Britain to 13% in 1913.  In the present day, the US and UK often portray themselves as the most liberal, free trading and capitalistic nations of the developed nations but maintained proportions of government spending as a percentage of GDP at near half. Brutal austerity campaigns only managed to knock that down by five percent.

        Increasingly, developed capitalist nations have been forced over the past century to increase state-spending seemingly in spite of itself. This entails redistribution in some form which Westra maintains is a violation of capitalist principles. As capitalist pricing mechanisms on new use-values malfunctioned and state spending increased, the bourgeoisie was still unwilling to admit defeat wholesale and concede that private production for profit for the market was not the best way to organize society. To return to the question of rising real wages as "a base to be rounded" in capitalist society we should point out that much of the "easy" development was through by the end of the 19th century. Previously, much of society had been confined to premodern sectors of society and so they were often not  direct competitors on workers wages but also often played the role of subsidizing the working class, such as when the rest of a farmer's family helps support a member who gets a job in a factory. But when the majority of society enters the workforce, thanks to rising agricultural productivity and rural proletarianization, that means nearly all of a working class's wants and needs must be provided through the market--and that raises the cost of living considerably. Perhaps another reason why real wages must rise for Westra is that a working class that is too impoverished not only cannot buy back (some) of the products it produces but it also cannot reproduce itself. Westra argues that living standards are socially and historically determined and therefore workers had to have a great deal more money for their new needs and wants produced by capitalist society than they did in say 1850.  Westra does not show himself hostile to the labor aristocracy question but stays the course here on pretty firm Marxist grounds. He argues and cites others who make the same argument that without the social democratic welfare state the working class probably could not have survived but he does not explain why this actually is. I would argue it is probably because unlike before, and in many Third World nations today, there was no premodern or alternative sector of the economy to go back to. 10-15% unemployment may not mean much when most of the labor force is seasonal and much of the population is still traditionally employed in agriculture but in a society where the vast majority consists of full-time workers it is devastating. Therefore unemployment insurance is necessary to keep members of the working class alive or from falling into deep deprivation. Old people and disabled people cannot be left with rural extended families and therefor the state steps in to provide care. Beyond reproductive considerations for the working class, the specter of revolution also weighs heavily on the mind of the ruling class.

      One thing Westra pays particular attention to is the transition from an economy where steel was the leading industry to one dominated by automobile production. This transition was a long-time coming and did not fully manifest itself until two World Wars and a Great Depression had cleared up the structural capitalist crisis. Market-solutions did not work in paving the way for this transition as even with Henry Ford's vaunted $5 day workers largely could still not afford cars.  And in the United States and Europe there were efficient and cheap public transportation alternatives. Real workers wages had to rise significantly in order for them to afford the cars and other consumer durables at the prices they were being sold. If steel posed difficulties for capitalist pricing then the car was near-impossible--with thousands of moving components that were all produced within the same company and many aligned industrial-sellers who only produced for the big monopoly car firms. Westra is not far off base when he argues the car industry is an enormous Soviet-style planned economy where parts are not properly valued by capitalist principles but in fact are produced, bought, and sold within the company through noncompetitive transfer-pricing. Many firms had to offer financial services as a car was still (and still is) a very large lump-sum payment for a consumer to make. At the height of the Cold War the car might've been called "ideology on four wheels" as an individualized mode of transit with consumerist comforts but its production was intimately social.

     By the 1980s, the US car market was saturated and foreign competitors had succeeded in breaking into the US market. At this time, Information Communication Technologies began to proliferate as Cold War technological secrets were allowed to concentrate in private hands. This became a major leading industry but has so far been even more insulated from capitalist pricing then the car industry. Over 60% of the cost of an iPhone comes from intellectual property not production costs. Most of the costs of tech industry goes towards paying rents and unproductive labor. Production in many more traditional industries, which might have taken up the slack, has shifted to Third World nations were goods can be produced at low-prices in authoritarian polities. While this may seem like a victory for nations that have struggled for 200 years to achieve industrial development in reality a vast majority of global production is concentrated in Special Economic Zones (SEZs) where foreign-owned companies and their subsidiaries can can skirt the laws of the host country. These now operate in 130 foreign countries up from 25 in 1975. Likewise, even this has been a development hard-won through great pain, the Volcker shock in 1979 that raised US interest rates under the guise of fighting inflation leveled many Third World debtors.  These nations did not regain their 1979 levels of output until 1996. The car industry is still the largest global industry in the traditional sense according to Westra.

       So far no new "value-production complex" suitable to take up the slack in the global economy has emerged. Credit has been the most "outstanding" growth market since the 1980s.  No segment of the global economy appears able to drive the global economy to a new boom, or even prevent an inevitable super-crisis. Financial bubbles appear to be an essential way of maintaining seeming equilibrium. More Americans are on food stamps than the population of Kenya and 95 million Americans aren't even in the labor force.  As productive sector sector workforces decline, many Americans do not even have the "privilege" of having their labor productively commodified. With such high proportions of state-spending one economist cited in the book argues that "austerity" or budget slashing to promote capitalist "efficiency" effectively is economic collapse in slow-motion.

      To my mind,  the space-industry, as far-fetched as it seems, is probably the only new "value-production complex" capable of driving the global economy to new heights and providing the stimulative effects experienced by old leading industries.  But this is largely in the hands of governments, and the vast majority of the R&D is done by governments. So far private space-exploration is tiny and lacks a clear capitalist goal that would attract anyone besides wealthy hobbyists. The fraught transitions from cotton to steel to cars would seem far easier than creating a "space-based" economy.

     This book contains a great interesting facts and concepts but is very one-sided and deterministic in its presentation of economic trends and the legacy of political economy. It is not my favorite book on financialization, as the author spends to spend more time explaining his conception of the rise of capitalism and capitalist economic history than even the casino capitalism that one would assume would be the main subject of the book. But this book will certainly remain challenging for both orthodox economists and radical reformers in its conclusions and outlook.

Commentary on: "First World and Third World in the Age of Austerity"

       An organization calling itself: "Institute for National Revolutionary Studies" published an interesting article  which I would like to make some comments on. It seems like INRS is influenced a great deal by revolutionary socialist nationalism, anti-colonial nationalism and national bolshevism. The latter would be a turn-off for most Leftists but I think the degree to which revolutionary nationalists are anti-imperialist and anti-capitalist should determine the level of support. I am sure many would be quick to label this organization right-wing but the degree to which it reps revolutionary socialist nationalism makes me think "eclectic" might be a better term. They certainly seem more revolutionary than the insufferable SJWs that make participation in Left Wing politics in the United States not only frustrating but near impossible. Perhaps it would be better to avoid labels for an organization that seems to be just getting started and whose core principles seem mostly sound.

      The author comprehends Leninist and "Third Worldist" theory (for lack of a better term) fairly well and even covers some points that I think are not well-handled by labor aristocracy theorists.  On the phenomenon of welfare austerity and de-industrialization the author writes: "First World welfare states, funded in part from the profits of Third World exploitation would seem to justify this analysis. However, in an age of austerity this critique is proving increasingly antiquated. In the United States and Western Europe vast swaths of once vital industrial territory rust away. The welfare state that once provided for the victims of outsourcing has been shredded over the past 30 years. There are no 'labor aristocrats' in Detroit and Appalachia, nor in Glasgow or Languedoc-Roussillon." This seems to be an accurate description of many de-industrialized regions in the West; as anecdotal as it maybe, certain family members of mine think parts of Birmingham remind them of Mexico. These "sacrifice zones" as Chris Hedges calls them seem to be expanding in the US heartland as the economic priorities of the more prosperous regions in neoliberal America take precedence over what many conservatives like to call: "the real America". The response to this by some labor aristocracy theorists, at least when it comes to the white working class, in some ways precedes Kevin Williamson who recently wrote of the white working class: "They need real opportunity...they need U-Haul." Aside from the obvious that that is easier said then done, especially when you have no money, increasingly there are fewer prospering places to load up a U-Haul and drive to.  Certain regions of the US will not fully recover from the Great Recession, if current trends continue, until the 2020s. And that assumes there won't be another crisis which is unlikely both given the state of America's bubble economy and Marxist theory of recurrent crises cycles. Government statistics are often adjusting to create an artificial picture of prosperity, whether its through "reforming" price indexes to hide inflation or counting out discouraged workers, the US government, and perhaps Western govs in general, have many ways of making things look better than they are.  For instance, real unemployment is estimated at 23% by some but given the U-6 figure it isn't less than 10%. That's double the phony 5% figure given by the Obama administration. For the most part, labor aristocracy theorists usually take US government statistics at face-value in economic analysis and there is really no reason to do so.

      Likewise, the costs associated with de-industrialization cannot be completely figured in wage-terms--it means lower taxes available for government revenue, falling property values from increasing crime and reduced economic prospects, communal/demographic collapse from the "U-Haul" phenomenon.  Successful industries typically have knock-on effects for the broader economy which means greater economic stimulation and increased quantities of goods and services produced as a result. Even by the reckoning of bourgeois economists, productive capital, such as industry, usually adds a far greater amount of value-added to the products they produce than service jobs such as waitressing and hair-dressing. Against the post-modern sophists of finance capital, Paul Craig Roberts raised the question if Industry doesn't matter (since allegedly money is money no matter how its earned) then how did China get rich? That is clearly inexplicable to the neoliberal mind--unless China is merely at an immature stage, and it is hard for any sane person to see how being the world's greatest industrial power is an "immature stage". The lack of thriving industry means that any subsequent booms are unlikely to reach the working class in quite the same way it did in the 1950s when workers proximity to the means of production and productive work gave them real leverage in negotiation along with the knock-on effects of higher productivity to help capitalists pay for it. That was a question that Michael Hudson raised when he noted that wage compensation was stagnant despite exploding productivity (at least according to bourgeois statistics) according to economic futurists in the 19th to early 20th century we should be living in a luxury economy of short hours and very high wages. The observation itself is not groundbreaking but the answer is, in fact the productivity gains have been bled from both productive capital and the working class in the form of debt and other costs imposed by finance capital.
   
    That leaves the question of defining where we are at, and on that note I have a post on finance capital coming so stay tuned. I have pointed out the issue of declining life-expectancy among uneducated whites in a  previous post and if that isn't a sign of what some theorists call "re-proletarianization" than I don't know what is. At the same time, most Americans are not employed in what would traditionally called productive work, e.g. industry, agriculture, construction etc. Depending on how you tabulate the figure it would seem about 9-12% of Americans are employed in the productive sector; a stark contrast to 1950 when 30% of the workforce was employed in production. I have read that some rich nations like Germany and South Korea still boast employment proportions like 1950s America but even they have not escaped the restructuring and labor precarity/flexibility demanded by neoliberalism. There is no doubt that American industrial workers are much more productive than they were in the 50s but it is quite unlikely that they produce enough to pay their own relatively high wages (on a world scale) and pay the wages of every non-productive service sector worker in America plus the income that accrues to American millionaires and billionaires, hence the necessity of imperialist theory. A Third Worldist Marxist sees American manufacturing wages are a little over 20 dollars an hour (some figures put the median at $13) while Chinese wages are between $1.50-$4 dollars per hour and Mexican wages are about five dollars an hour etc, etc. Of course, this leaves aside certain underpaid positions in American, some of which are sub-minimum, such as the $4.35 minimum  in the garment industry or the approximate two dollar an hour minimum in agriculture. That these startlingly exploitative wages are much better than the satanic garment mills of Bangladesh or the condition of farm workers in Indonesia really does not need much comment.

     The existence of worse conditions does not prove a lack of exploitation; in fact, Marx assumed in his model in volume one  that the worker would at least earn enough to reproduce his existence and also showed a worker could be more exploited under conditions of rising or high wages if productivity was far beyond the worker's compensation. Exploitation is not reckoned merely in long hours or low wages but also in the intensity of work and output and the types of technology applied. To be sure, industry in the developing world or NIC nations are often by no means primitive, the notion that they usually are, even in the past,  is an oversimplification, but an overlooked factor in moving to developing countries is that there is far less pressure to modernize a plant or upgrade safety standards.

      So far we have only looked at a relatively small portion of the American workforce but doing so allows us to explore both a major selling point in Third Worldist theory and a major conundrum. The fact of the decline of the productively employed portion of the American workforce and many other Western economies proves the parasitism of the US and the wider West without a doubt. But if we adjust the minimum wage according to inflation we find that during the 60s when far more people were productively employed the real minimum wage adjusted for inflation was about $11 dollars an hour, as opposed to the current federal minimum wage of $7.25 with individual states having minimum wages between $8-10 and with one major city like Seattle setting the wage at $15. So the average hourly compensation is less and it by no means follows that welfare services or employee benefits are superior and larger in order to offset this-- if anything the high rate of per capita government spending is mostly attributable to military spending. There are other ways that the working class could benefit from the global system, such as cheaper prices for bananas, coffee, shoes. foreign cars/electronics etc. but this is by no means clear when US industry could've filled the role in several places and commodity indexes are doctored to hide inflation. The notion that the working class is spoiled by foreign luxuries and trinkets goes at least back to t views expressed in the Economist in the 1850s that Marx critiques in Volume One--that is not to say that there wasn't a labor aristocracy in his time either, but it was also a time of rampant super-exploitation even in England. Overall, the conundrum we face is that by any standard the American economy taken as a whole is more parasitic than in the past but the American worker is doing worse, at least in dollar terms, than his grandparents and subject to new and volatile forms of precarity.

      The financial capitalists could theoretically raise every working American's standard of living up to that of the American middle class but choose not to for reasons we will discuss in a later post. It would certainly build up greater social support for imperialism but the lack of interest in doing this suggests that either entrenched interests are too powerful and/or the system has reached an unreformable stage. Which would seem to justify the author when he says the era of the social democratic compromise 1945-1975 are gone for good.  While a 15 dollar minimum wage would entail a full doubling of wages for low-waged workers it can easily be pissed away by inflation caused by rampant money printing and weakening dollar hegemony, and that will probably happen. I guarantee that a significant rise in the minimum wage will not be enough to curtail rampant inequality because it does not focus issues like debts and the vast pools of money accruing to creditors. Every "progressive" tax-plan in America entails raising taxes on upper-income brackets when wage inequality is not the most significant cause of inequality. These plans largely aim to saddle the middle and upper-middle class with the tax burden as the vast majority of 1% wealth is received in the form of profits, dividends, and assets--not wages or salaries. Debt exploitation is an under-theorized concept in Marxism and hence most labor aristocracy theorists downplay or dismiss it outright; it seems clear that debt has exploitation overtaken waged exploitation in the developed world. Even workers getting paid "super-wages" in Third Worldist parlance can be exploited by the debt weapon therefore the issue of "net exploitation" maybe irrelevant if the debt relationship is usurious enough.

      The "net-exploitation" measure has an interesting history as MIM's work was perhaps the first body of labor aristocracy theory to actively reject the classical leninist notion of a bribed working class that was still exploited. They viewed it as "dogmatism" on Lenin's part but Lenin's view is actually a more fluid and holistic view of reality then that of an arbitrary line of net-exploitation. A manufacturing worker in an imperialist country could produce say 30,000 dollars in value per year and earn 25,000 dollars per year. That worker is in the privileged position of being allowed to earn back such a large portion of what he produces in comparison to other workers globally. The global exploitation of others does allow his boss or the state to give back far more. At this point he is likely not being starved or shot, so 5,000 dollars a year might not be worth fighting a revolution for; he may reason that it isn't even worth striking for. There are other ways he could conceivably get it back from  investing in home ownership as an asset (if he can sell it in the black), working towards career advance/career change or from state social expenditure (depending on how anti-labor the tax code is).   Or if he is brainwashed by the media or unaware of the Marxist concept of exploitation he maybe uninterested in it altogether. Bromma argues that there is a morale/dignity factor that plays into the formation of a worker elite not merely a monetary one. Unfortunately, the concept of privilege has been so degraded and worn out thanks to the identity liberals that it is almost of no use and it is understandable why some would prefer to go with a narrow "exploited vs. exploiter" view in assessing the balance of forces.

         Zak Cope gave $20,000 per year as the output figure for manufacturing globally in 2012 that is his estimate for what an average global manufacturing worker should be entitled to earn. But that is an average so it leaves out that in certain situations it could be more like 30,000-40,000 for example. We leave aside the issue of distribution to the wider working class. But there are still productive workers making less than 20,000 in First World manufacturing so it follows there is some sort of exploited working class and there are at least 120 million manufacturing workers in the developed world. Cope tallied up the collective profits of the OECD and found estimated 97% of OECD profits to be the result of imperialist profits. You can pick at his methods, for this or that reason, but at least there is the singular an advantage that his estimate is not likely to be an underrestimate.  Lastly, the issue of tax havens which house trillions upon trillions and illicit profits (such as the drug trade) rarely enter into Third Worldist political economy, for two reasons 1. they are a kind of financial black hole, as no one knows their true extent 2. published legitimate profits are a lot easier to tally up. That may make the profits extracted from the developed world working class seem smaller than they really are meaning that often for the employer there is little balance sheet average profit in employing first world workers.  And not all surplus-value will end up on a corporate balance sheet in the neat form of profits, some of it will naturally end up expressed in rising asset prices, which may or may not be sold down the line. Oxfam's new study would seem to prove that the profits accruing to the oligarchy are much greater than many critics assume.

      The question of what Westerners do at work and what to do with the Western working class is still an open one. It is still undefined. Marx seemed to have two minds about unproductive/service workers: 1. that they are largely parasites since they rarely produce a tangible commodity 2. they can be exploited if their compensation falls below the average of the working class. Now whether this is a national or global standard we are talking about might be an open question as different countries have different standards of living which are historically determined. Since a Western worker employed in service takes home a wage far above global standards many labor aristocracy theorists reason that that worker cannot be exploited. But service work in the neoliberal era is a strange mix between production and service, for instance a fast food chain mixes the affection associated with emotionally catering to the consumer with the production of finished meals on a semi-industrial scale. The food, as critics correctly note, is not produced on-site, but more fair-minded critics concede that assembly and processing is still part of the production process. Real knowledge of First World working conditions is perhaps confined more to certain Marxist authors who might be called "revisionist" such as Berardi, Perelman, Hudson and liberal authors like Ehrenreich, Mark Ames (along with the conservative exception of Edward Luttwak). It is understandable why that is, there is a certain tendency which seems to believe that First World workers will not be free until they make 80,000 dollars a year working five hours a week. No matter what they get, it will never be enough for some critics, even if it prolongs global suffering. The logic of counting service workers as "productive" can also be taken to ludicrous extremes like counting the action of a butler in dropping sugar cubes into a hot cup of tea as "productive" labor because it counts towards the "assembly" of a product. If the focus on economic production is dropped altogether than a maid, even if overpaid, or a housewife are imminently revolutionary since they produce the "product" of a clean house. There can arise an extortionist logic that consumers (whether workers or not) justly resist such as when a waitress looks askew at bill leaving "only" a 25% tip for taking orders and carrying food and drinks. Perhaps this where Bromma goes astray looking at housewives as revolutionary agents or de facto proletarians simply because they clean houses without receiving a direct wage. Cope is correct that this "feminist" line merely aims the "Left" search for a stand-in proletariat as he terms it, and legitimizes work that should be abolished. I would add that it deliberately confuses and distorts the line between productive and unproductive labor.

      Marazzi sees the growth of the service economy as being the natural corollary of a digitalized financial economy and compares the complaint against service to the physiocrats complaint against industry on the grounds that "you can't eat machines." Putting aside the fact that the physiocrats did not make that critique in good faith as their emphasis on agriculture was something of a scheme to get the landlords to pay the taxes instead of the Third Estate, they were at least correct that an agricultural surplus was necessary for the industrial sector to exist. Marazzi argues that is natural that one part of the World (e.g. the West) would be placed in the primary position of offering services to the rest. This is only natural for imperialism and is by no means some sort of "natural" condition befalling Western humanity independent of anyone's will. Likewise, IT or live-music maybe services that the West provides to the rest of humanity but it is not the case that the flow of services provided is one way (as Indian telecom/IT services show).

Most service workers do not produce hamburgers, stock shelves, or cut hair for people thousands of miles away, many contemporary services are only exported with great difficulty. Speaking of hamburgers, a factor rarely taken squarely into account is that the Big Mac Index (a notable index for international purchasing power parity) is half for a worker in China then it is in the US--meaning that a Chinese workers wage package maybe smaller but it goes further, even if that fact still doesnt make up for the large inequality. Hudson points out that the FIRE sector and its policies raises the cost of workers standard of living effectively pricing US manufacturing  out of international competition in many realms. According to Hudson a typical American worker may pay 75-85% of his paycheck to the FIRE sector and to the employer there are a great many direct and indirect costs associated with financial dominance. Although a final conflict between bosses and workers is inevitable, it is clear that when critically assessing the current state of American (and broadly Western) economy that  the cost of a workers standard of living and a manufacturers cost of doing business could be significantly lessened  just by cracking down on the rentier sector of the economy. The benefits of financial imperialism are often tabulated by critics but rarely are the costs that impact even the oppressor nations.

    It should be noted that an avant-garde model for capitalist exploitation in the developed world is the development of "labor-free" models of capitalist expansion on the part of Tech companies.  It has reached an extraordinary height with the take-off of Uber which exploits both its drivers and customers alike through the rent it collects via its ownership of the app that connects drivers and passengers. Pricing is often determined by algorithms that determine price-surges based on supply and demand--an automation of the rentier's interest, moving along neo-liberal supply models without having to justify price increases or decreases in even a cold bureaucratic way. Uber, is in fact, difficult to imagine without the policies of neoliberal finance capital aimed at "starving the beast" of government in order to leave more interest available for collection; broken and decaying public infrastructure itself, such as woeful or non-existent public transport makes Uber possible. Once more we see the high-costs of privatizing what classical economists once referred to as the public good. But going further, although the Uber model may herald a more dystopian manner of exploitation and business, it is not in fact new in itself. From the beginning of the Tech industry's rise with with the popularization of personal computers in the late 70s and early 80s it depended on the unpaid labor of "hobbyists" and marketed itself as something of a hobby along these lines. Whether its beta testers of video games or other products, amateur software programers, "freeware" tinkerers, unpaid internships, or even social media users, the tech industry has always relied on the unpaid labor of volunteers. Even the platform I am currently using gains revenue from writing that would otherwise have been paid for before the invention of blogging. Youtube and Facebook largely do the same thing as unpaid labor forces and volunteers for data-farming and collection. Crowdsourcing can also be considered another veiled form of exploitation, for instance in the case of a crowdsourced documentary the consumer may play the double-role as both a lender of capital (with no return) and as a paying customer when the film is released. The kickstarter capitalist in essence is a failed capitalist as he makes profit without fulfilling his traditional social role as either a hoarder and investor; he often invests nothing and earns profits. It is the social media equivalent of the financial bailout where monetary costs are increasingly transferred onto society, with or without their consent. Crowdsourced begging, where individuals ask crowds to finance their dreams involves shifting costs traditionally borne by governments and employers onto society at large. These trends may seem marginal to the global economy now but it seems almost certain that they will continue to lay deeper social roots and become more sophisticated and rapacious in the future. These attempts to extract unpaid labor and surplus-value will continue to proliferate and while the First World Left is well-known for its dramatics, it isn't too dramatic to say that the result of this model in its highest incarnations will be a form of high-tech neo-slavery or neo-serfdom. Not surprising for an industry that kicked off (at least in the US) by privatizing the tax-payer subsidized fruits of technologies developed in the military-industrial complex.
   
    Taking all these new factors into account, the author would seem justified in making the statement, even if it is at this time somewhat premature that: "...the rentier-state has been reduced, in the age of neo-liberalism, to the rentier city, and perhaps the rentier neighborhood (Wall Street and the City of London)."  this statement can be doubted: "Moreover, this situation is impacted by the mass importation of immigrants form the Third World in order to undercut the wages of the First." Not to deny supply and demand like some pro-immigration advocates but immigration does not effect all of the working class equally, ironically it can suit the portion oriented towards upward mobility and actually advance "white privilege"--contrary to the stated intentions of its advocates. Certain portions of the class may not be affected one way or the other. Closed borders is often billed as the main cause of inequality by advocates for open borders and the major cause for inequality on the part of the anti-immigration advocates. But if the more perceptive critics of finance capitalism are correct than finance is the major cause of global inequality. I will have more on the discourse of the "moral Left" around immigration in a later post.  

      Contrary to anyone's best intentions de-Industrialization has not resulted in a working class that is                          more radical or revolutionary and therefore a better ally for internationalist struggles. Part of that can be ascribed to the extreme hegemony of bourgeois culture and media in the West but we must honestly say the miseries inflicted on the Western working class has brought mainly lumpenization instead of a revival of radical class politics. Many lumpen are great revolutionaries and allies of the cause but they do not necessarily make for consistent allies with consistent politics--they can just easily turn to nihilism, criminality, dependency and criminal intrigue. Ironically, the US working class was far more likely to fight for socialism during the halcyon days of the 60s than they are today. But the ease with which "anti-establishment" candidates trounce their opposition and win affection maybe an indicator that a socialist renaissance, perhaps beyond the limits of the politics of that era, may not be far off. The author is certainly correct that without a fluid and holistic view "Third Worldist" theory is very quickly becoming antiquated. The study of the condition of Western workers must be deepened.