blogorrhoea
Wednesday, April 16, 2003
 
A RAMBLING MAN TRYING TO FIND OUT WHAT HE THINKS
BY SEEING WHAT HE WRITES AND WHO HE QUOTES

(*SELF-INDULGENT LENGTH ALERT)

I've been nursing a cold made miserable by its indecision. It deigns neither to drop its victim flat nor allow him the gamut of activity to which his magnificently tuned body is accustomed. I tried a DVD of Apocalypse Now, but lost my enthusiasm when Brando's Kurtz embarked on that bit about how a pile of little arms had afforded him insight into the essence of war. Too compelling in too many ways. So I donned my new $7.95 Woollies flanellette shirt, allowed its warm comfort to sweep aside Schumpetarian doubts concerning the prospects of global profitability prospects in conditions of currently enhanced competition and information, and made for the blogoshed. If I was too ill to handle the fine detail of asymmetrical warfare and power relations within the US state aparatus, I might at least be able to handle another rheumy scan across the big canvas.

Mebbe try to tie a few blogospherical threads together in one big ramble.

Immanuel Wallerstein's canvas is bigger than most, and he does fine work with a big brush. He begins by taking a leaf out of Marx's book and assuming capitalism at its most pure and ideal: a continuum of competitive traders, a continuum of economically rational consumers, and everyone in a perfect state of information, " and the lowest possible price would soon be battered down to an infinitesimal amount over the cost of production price and you couldn't make a profit. This is in fact what happens with most of the poorly
profitable industries in the world. If today you don't make very much money from selling
clothing, its because everybody's doing it [hence my $7.95 Woollies flanellette shirt: ed.] … and the margin you can make on that is very small. What you need for capitalism to make real profits is relative monopolies. This is not a late adaptation of the system as some people say, but is in fact the basic principle. You have to create a situation in which there are relatively few sellers and their position as sellers is relatively protected. That's not a free market."

If you're the sort of person who defenestrates any argument that might be associated with Karl Marx, be assured the currently very fashionable Joe Schumpeter thought the very same thing. And if a 'free market' is not a working proposition, then the state maintains a rather important role after all: " capitalism needs the State, desperately needs the State. It talks an anti-State line but it is really very very pro-State." Istvan Meszaros makes a similar observation: " representatives of the 'Radical Right' continue to fantasise about 'rolling back the boundaries of the state', although in reality the opposite trend is clearly observable, due to the inability of the system to secure capital-expansion on the required scale without the administration of ever greater doses of 'extraneous help' by the state in one form or another." Indeed, Steven Vogel, a voice from the dry right, wrote a whole book bewailing this trend. But Wallerstein reckons that they're wrong: "States are indeed truly beginning to lose that ability to help capitalism in this way."

After a thirty-year crisis, western capitalists have been obliged to whittle what they can out of the state just to survive - corporate, investor and high-level taxes have been pushed down, anti-trust standards have been pared down, industry regulators muzzled, privatisation has ballooned, social policy lies at the mercy of currency speculators, and so on. Gone is the state's capacity enduringly to guarantee the social stability that comes with class compromise; gone is its capacity to tax sufficiently to provide the social services western populations have come to expect; gone is its facilitating and regulating presence in industry; and gone is a conception of the state as guarantor of the human and physical infrastructure whence industry extracted its private profit at public cost. Which matters because, as Wallerstein reminds us, " A second secret of capital which it doesn't boast about is that the way you make money in capitalism is that you don't pay all your bills. For example, If I have a factory do I pay the entire costs of production in the factory and in fact we don't. Economists have a fancy name for this. They call it the externalization of costs."

As the contradictions of the capitalist mode of society become irksome to the capitalists, capital seeks to fly the coop: "Capitalists move their structures eventually to other places where they can find relatively lower wage levels. This is a constant process but it requires certain possibilities. It requires zones of the world into which to move where the workers
are going to be willing to accept significantly objectively lower real wage rates … Basically the areas ultimately into which all this has been happening for 500 years are areas where you move populations from essentially rural zones into urbanized zones. Workers are willing in this condition when they're first moved to accept this - astonishingly low wages by world standards for two reasons. (1) They're disorganized, disoriented, they're in new situations, they don't know how to operate politically yet, but (2) and more important,
often moving into these urban zones at phenomenally low wages represents in fact an important increase in their real income. So they see it as a plus. But after 20, 30, 40, 50 years in these zones, they begin to become more clever politically, more aware of their
possibilities, they begin to organize and begin to push up in effect the real world-wide wage level that they're being paid." On this account, what looks at first to be a 'race to the bottom', as states vie for direct investment by way of tax breaks and relaxed regulation, comes eventually to create a world of ever better paid workers amidst ever more despoiled natural and infrastructural environments and ever harder-pushed profit margins.

Actually existing 'globalisation' might be deemed the "tail-end of this process … if you look at it on a statistical, structural basis over 500 years what you see is the de-ruralisation of the world whereas, even as late as 1945, something like 75% of the world's population was in rural areas. We are way under 50% now and going down very very fast. We're exhausting the zones."

But globalisation du jour remains rooted in capitalist relations and thus capitalist dynamics. Western Capital may run, but it can not hide. Wallerstein again: "I see a pattern, a trend over a long period of time that is in fact increasing real wage rates and therefore is squeezing profit rates. Now if this were the only thing it wouldn't be a problem or it might be a relatively lesser problem. It goes along with other long-run trends. "

Which brings us back to those all-important externalities: " If I had to produce the object without creating the waste or store the waste in some expensive way or restore the original ecological balance etc. that would add very significantly to the costs of production. I externalize the costs and it is the State that permits me to do that. They aid me in doing this. Now again you can do this and do this and do this, but you use up possibilities. The reason ecology is such a big issue today is not that its a new problem. It was a problem in the 17th Century - all the trees of Ireland were cut down. Nobody screamed about it because there were other trees in other parts of the world. But we've got to a point in the last 25-50 years where we are all talking about the exhaustion of various kinds of resources."

Environmental and accumulation crises are pointier now than they've ever been, but, as I've already suggested, the transformation of the state under globalisation is such that it has lost the very capacities it needs to save capital in the long run. More on that from Wallerstein: "[T]here are really only two things Governments could do. One is that they could tax. You see the bill at this point for true clean up, and … [i]t's an astronomical bill in point of fact. So where is that money going to come from? It can come from two places. We could increase the taxes absolutely significantly and collectively pay that bill and then the industries would yell correctly that they were being taxed out of existence, or we could say to companies you have to internalize all costs. There are no costs that can be externalized. Every cost involved in production has to be taken into account by the enterprise and put into its bill and then they'll say we can't make any profit on this basis. They are correct."

Cheery stuff, eh? We're talking about a "basic squeeze on profits" to
which the present system has no palatable solution. Add to this the irksome little residue that is actually existing democracy (before Samuel Huntington made himself famous talking about clashes of civilisations and the evils of multiculturalism, he was best known for deeming democracy too heavy a burden for a state to bear) and you have the whole thing exacerbated by pesky electorates demanding the political relevance, public health insurance, public education, minimum wage, and guaranteed pensions the twentieth century taught them were their due. This has culminated in what Jim O'Connor (*The Fiscal Crisis of the State*, New York: St. Martin's Press, 1973) recognised way back in 1973 as 'the fiscal crisis of the state'. In Wallerstein's words: "The real problem however is the sense that it is no longer likely that the states will be able to move the structures in an egalitarian direction. So the hope that bred patience is dying out, in many cases has died out. As a result, they withdraw legitimacy from the states, and are less willing to support the states in efforts to suppress so-called anti-social activities. As the states' legitimacy declines, the states' ability to guarantee order declines."

The state and capital have always constituted a unity, and it is now becoming apparent the unity is a contradictory one. It was a succession of governments that brought about globalisation, because, as the likes of Habermas and Offe point out, the political consequences of spiralling welfare cost-projections and direct state responsibility for sectors slowly decaying have proven intolerable. Fixing the short-term books by way of a quick privatisation might transfer power from public to private hands, but it also gets rid of the responsibility. Manuel Castells saw this: " economic globalisation 'was made possible, and, by and large induced, by deliberate government policies. The global economy was not created by markets, but by the interaction between markets and governments and international financial institutions acting on behalf of markets - or of their notion of what markets ought to be." On this account, it was state policiy, specifically deregulation, trade liberalisation and privatisation, that "created the foundations for globalisation".

Alex Callinicos invokes Polanyi's The Great Transformation to highlight the historical role of the state in constituting and nurturing capitalism. " Karl Polanyi famously argued that, far from corresponding to the requirements of human nature, the formation of markets in labour, land and money required the large-scale state-directed reconstruction of European society. What we are seeing today is a similar process on a world scale, as Western governments, acting through agencies such as the IMF and the WTO, seek to remove national boundaries to neo-liberal policies." Nothing new under the sun, eh?

Something else that isn't new is war. The MidEast Mirror (12 March 1998) quotes Yale historian and futurologist Paul Kennedy, who "often makes comparisons between the U.S. in the 1990s and Spain in the 1630s and 40s -- two declining empires justifying intervention on grounds of "reputation." Emphasizing the non-military dimensions, Kennedy drew up a list of ills facing the Spanish empire and now facing the American empire: less competitive industries, a torn social fabric, archaic tax structure, rural poverty, low productivity, national indebtedness, mediocre education systems, crumbling infrastructure, decayed inner cities, and yet despite all these things, massive global commitments. Kennedy commented that the decline of American power is illustrated in the kind of military interventions whose real purpose is merely the recovery of America's lost self esteem."

To go back to Wallerstein for a minute, it may be that we can read more into the US's current adventure than Kennedy does. Sure, the state, at least the US nation state, has been undergoing a rebirth since the slaughter of S11. It has managed to accrue possibly shallow but currently decisive legitimacy in the eyes of its citizenry by way of its conquests and Washington has, for more than two decades, become ever more a corporatist nexus - of mercantilist proportions that would outrage Adam Smith and with an attitude to trade that would outrage David Ricardo (the advantage the new corporatist elite seeks is not comparative). 'Democratising' a billion people at MOAB-point could be read, if you read Wallerstein as I do, as drawing them into the seamless web of integrated variations that capital so badly needs if the effects of its constitutive contradictions are to be forestalled. That the process involves large-scale capital destruction (curtailing competition in the energy sector, curtailing competition from those who depended on pre-war energy arrangements and now depend on the US; producing a huge reconstruction project; and bankrupting several national economies in one fell swoop) is all to the system's good. If the crisis shows up as low profitability, crippling competition, excess capacity and associated investment disincentives, then war is just the ticket.

So when Gary Sauer-Thompson observes that "we citizens are anxious because of the speed of change; a governance vacuum due to the disintegration of traditional political power of the state; and an abdication of governments due to the shift to a smaller role of government," he is right to imply (or am I inferring?) that Tony Harris does not so much make the case for sunshine, as ask us to avert our eyes from the dark shadow scudding at us from our future. It'll darken other parts of the world before ours, but mayhap it'll darken ours before it reaches the USA, arguably the one state with the discretion of what we used to mean by 'state'. So I reckon Claude Smadja's comforting words assume a state the configuration of which lies in the dustbin of history.

Ramble over. Am looking forward to tomorrow, when I read this and try to work out what I thought I was getting at.


 
Monday, April 14, 2003
 
A MOMENT'S REFLECTION

To have one's blog stare e-death in the face and survive is to be put in mind of why one resolved to blog in the first place. 'Dismal dilettantism' is what I wrote when The Machine demanded of me a description for my project. And what have I served up this last year? Why, a concerted dismarrhoea, unalloyed by the barest whiff of the promised dilettantism, that's what! All Smiths and no Kinks. All Jonathan Swift and no Horace Walpole. All Edvard Munch and no Claude Monet. All Nobby Styles and no George Best. All medieval gargoyles and no Minoan dolphins. All Canberra and no Narooma. All Boycott and no Gower. All Miss Moneypenny and no Emma Peel. All Sumeria and no Egypt. All Malthouse and no Sheedy. All Schopenhauer and no ... aw shit, who am I fooling ...

I see Syria and those gosh-darned weapons of mass destruction have already found their way into the same sentence. S'pose it's only sensible to waste Damascus while they have all those aid agencies in theatre and ready to go ...



 
political economic and cultural observations in the register of dismal dilettantism

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