Certain Days 2013

Divided World Divided Class: Global Political Economy and the Stratification of Labour Under Capitalism



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Dope will get you through times of no money better than money will get you through times of no dope.

-  F. Franklin

These notes were written because several comrades who didn't know anything about it, asked me if marxist theory explains the world capitalist crisis or not? This is such a good question that i found myself pulling together these notes for them. And for myself, it turned out. i don't have any brilliant thoughts here. Compared to some other papers on the crisis this is pretty simple. But if it only opens a door, that is good enough.

The world capitalist crisis has produced many radical papers analyzing the Crash from widely different points of view. There are also many new voices among them. This is definitely healthy, starting a discussion that has not been routine for anyone. One interesting side of these radical papers is the role of theory. Some papers confront the crisis ad hoc, as it were, using little theory besides the bare recognition that there is a class antagonism in society. Others, both liberal and leftist, explain the crisis as one of the business supply-demand cycle, which even Bush's former treasury secretary and federal reserve chairman conceded is part of the basic nature of the capitalist market. Some papers make passing reference to the law of value or the crisis of over-accumulation, but don't explain just how this marxist theory relates to their analysis of the Crash. And while some writers boldly predict the final end of capitalism in this crisis, others more cautiously see the full cyclical recovery of capitalism but with sharply reduced working class living conditions paying for the recovery. What i want to do here is to explore how useful anti-capitalist theory is to us in lighting the path ahead.

"Twilight capitalism" is an expression common on the Left now. Even as vanilla a social-democrat as Cornell West speaks of our "twilight civilization." But what does it mean? Do we use it just to reassure ourselves at a time when the Left in the metropolis has weakened so greatly?  Is this crisis a stage in the protracted fall of capitalism as a world system? We will come back to this.

To start, we should keep in mind Marx's comment that there really is no such thing as "economics". There are only human beings working to sustain themselves, tied in daily life to each other through social relationships of production and distribution. Capitalism alienates this activity from its living matrix, and calls the object "economics"...

Capitalism's top economists and corporate managers could not predict this present general crisis. Those who mocked Marxism for not being able to predict crisis well enough proved themselves far more clueless. It isn't just that the well-funded, fulltime economics departments at Harvard and Yale failed to see this crisis coming (just as they also famously failed to do in 1929). Economist James Galbraith of the University of Texas says that of 12,000 professional economists in the u.s. today, only "ten or twelve" predicted this crash. Perhaps for the same reasons that fish canneries and supermarkets can't predict when massive overfishing creates "marine deserts" out at sea?

The loudest liberal criticisms of Wall Street and its obedient government regulators conceal within them new untruths, which only disorient people all over again. One is the often-heard, Barney Frank line that speculation--financial gambling--is at the center of the crisis problems. But looking at it another way, speculation wasn't so much Wall Street's problem, but Wall Street's attempt at a solution. The other misunderstanding being peddled is that the 2007-2008 collapse of the biggest world financial centers proves the failure of conservative economics. It is understandable to believe that, but what this general crisis really proves is the failure of Keynesian economics.

This brings us to the area of anti-capitalist theory.

Our political toolboxes are jumbled with theoretical tools old and new. Some we don't use because they appear nonfunctional, obsolete now if they ever worked. Many of us don't use theoretical tools at all, approaching politics with bare hands, because we have been taught to distrust tools in general. It's basic that a tool has to be grasped the right way. Which is another way of saying that perhaps our cultural "handle" is wrong. The approach we use on radical theory like Marx's on capitalist crisis is wrong. Not so much the theory but how we take it.

Marx is a big case in point, usually exceptionalized  either as some improbable thinker far above us or dismissed as a monumental relic, another piece of dour Victorian mental furniture. In the first case he is like a genius too complex to be understood by the rest of us, and in the second case he is someone to be politely ignored lest we set off his worshipers. He is rarely accepted as just another revolutionary against capitalism, with his own contribution. Although one shaped by a different time than ours. To me, it is better to simply take his analysis of capitalist crisis as the insights good and bad of another revolutionary. Like the thoughts our own contemporaries exchange right now, it may be wrong in ways but still give us an unexpected insight into the crowded reality of capitalism.

The question of capitalist crisis is bound up with that of business cycles, of boom and bust. Cycles that we are used to without even thinking about them, as an inescapable part of capitalist life. Bush's last Treasury Secretary Henry Paulson even admitted that he personally expects such economic downturns "every five to ten years. I don't think any regulatory system is going to change that."  Unconsciously echoing what Marx wrote long ago of: "The characteristic life course of modern industry, which takes the form of a ten-year period of moderate activity, feverish production, crisis and stagnation... ."

This cycle comes from a basic imbalance between business production and consumer production. Between supply and demand. It isn't what kind of product that is determining, but to which side of the economy it belongs. A power drill owned by a home-remodeling company is part of business capital, while an identical model power drill owned by a consumer as part of their hobby equipment is a part of consumer production. During the boom upsurge of the business cycle, both production for business growth (new factories and mines, full inventories, expanded transportation, research and development, etc.) and production for mass consumption are growing side-by-side. But at a certain point, business expansion has reached the limits of the current market (or beyond--for example, for years automobile industry financial analysts have been warning that global truck & auto production capacity is at least one third more than the number of vehicles that can actually be sold). Soon capital investment in new production slackens, which inevitably leads to lower levels of employment & income. Leading to lessening of capital investment in consumer production and distribution. Consumer demand declines in a downward spiral with falling employment and income. This crisis manifests itself on the surface then in the form of a crisis of insufficient demand.

Which is why the "search for the holy grail" of capitalist economic planning is the Keynesian belief in "fine-tuning" the economy. In which state intervention alternately cools down or adds economic demand to a rocketing or stalling economy. In reality, at least since the Reagan administration, conservatives no less than liberals acted not only by fiscal measures (raising or lowering bank interest rates and the money supply) but by Keynesian massive state deficit spending to boost economic demand. One telling fact is that during the Bush-Cheney regime in 2000-2008, the government share of the national economy was over one-third larger than under the Roosevelt New Deal of the 1930s. As early as 1971, prezzy Nixon declared: "We are all Keynesians now." That the Republicans wanted to massively deficit finance new high-tech militaries and ruling class personal spending, rather than the new highways and larger police forces that the Democrats do, makes a big difference socially but not to the blind maw of the capitalist economy.

Their problem is that despite the near-religious belief in it by liberals, there is no evidence that state "fine-tuning" can work in the long run. Even for the world's most prosperous, high-technology societies. During the past twenty years much of Western Europe has been governed by social-democratic parties, and the level of Keynesian social welfare spending has been high by any past standards. And yet, the current crash has swept Western Europe no less than the u.s.a. and the rapidly rising "BRIC" economies (Brazil, Russia, India, China) that are said to be the new capitalist centers of the future.

During the Great Depression, u.s. unemployment was still officially at over 14% in 1940, after eight years of the Democratic Party's Keynesian deficit spending policies. And real u.s. unemployment was over 30% for that period. It wasn't until the Total War economy of World War II kicked in that the u.s. Depression disappeared. As in 1944, when there was effectively no u.s. unemployment and  government spending was 70% of the total u.s. economy. Just as German capitalism couldn't shake off its even-worse economic crisis until Nazism had fully transformed society into a slaughter house. Which raises certain questions about the post-modern capitalist future.

Marx theorized that beneath the easily visible cycle based on the dis-synchronization of supply and demand, which even the capitalists can now see, there exists another imbalance pulling on cycles of capitalist production and distribution. A second, longer kind of economic cycle.

To correctly scan this, we have to capture Marx's background in the dawn of the first industrial capitalist society.  Where "science" was a hot word, and people were trying to explain things in the new scientific way as parts of entire systems which governed how they developed. The most sensational example of this, Charles Darwin's theory of evolution, had just exploded old ideas of both the biblical and biological worlds at once. ( Marx himself was very impressed by this theory of evolution, and even wrote Charles Darwin a letter seeking his permission to dedicate the first volume of Capital to Darwin. Darwin wrote back to Marx that he was honored, but felt that he must refuse in order not to shock his still-religious family by association with Marx's well-known radical atheist beliefs). Of course, the science of that time was often wrong just like ours is. Marx, for instance, was also a convert to phrenology, the theory that the shape of peoples' skulls indicated their mental tendencies and talents. He would examine the bare heads of young workers who had volunteered to help him in his endless research, to try and see if they had the requisite mental abilities.

[The following nine paragraphs are an unauthorized supersimplification of one part of Marx's big, big blueprint of how capitalism works. If you've read the paperback or seen the movie, feel free to skip down]

Industrial capitalism was the world-shaking phenomenon of Marx's time, and Marx searched for an understanding of it as an entire system. What unified its structure, inner workings, and the laws of its motion and evolution. Much as 19th century European scientists tried to discover what the basic stuff of the physical universe was. In his investigation, Marx joined the path already broken by the classical capitalist economists of the 18th century, notably Adam Smith and David Ricardo (whose writings are still read in petrified universities today as significant knowledge ). None of this matters now, except to know that Marx's elaborate system theories about capitalist economy didn't just pop up in his mind. It was part of the whole intellectual fabric, the cultural approach of his time & place.

The classical capitalist economists had already dispelled the primitive belief that there was some inherent value in specific money or precious metals. As one society may use sea shells or bits of copper as a currency, while other societies may judge these items worthless. Still other societies use livestock or printed pieces of paper. David Ricardo posited that the value in all commodities or products in the capitalist marketplace really came from the human labor that went into their making. The young Marx and Engels were also inspired along this line by the idiosyncratic French anarchist pioneer Proudhon, whom they praised in this regard: "Proudhon makes the human element decisive, while in the previous political economy this role is given to the material power of capital and of landed property. " From this starting point, Marx developed his economic theories.

In Marx's analysis the exchange of commodities is the fundamental relationship in capitalist society. The term "commodity" is used by Wall Street today to mean raw materials or products contracted for in undifferentiated bulk lots, such as wheat, ore or beef carcases. In Marx's terminology, however, a commodity is anything that has both use-value (that fulfills a human want or need) and exchange-value (is a product of human labor for the marketplace). So the life-giving oxygen we breathe every minute has use-value but no exchange-value, since we take it ourselves from the atmosphere. But the same oxygen in a medical oxygen mask has been separated, compressed, packaged and transported by human labor, and is very definitely a commodity. The most important commodity is the labor-power of workers, which is the commodity which more than reproduces itself once in the hands of  the capitalist.

This value of commodities eventually expresses itself indirectly on the workaday surface of capitalist life as price. While that share of value not consumed in production of the commodities or returned to the workers as wages to sustain or reproduce their labor-power, is termed surplus-value, which eventually surfaces as capitalist profit. Marx cautions that there is no direct, one-to-one correlation between the value and surplus value created by a given worker or even a certain factory and the amounts of prices and profits that result. The process is more indirect and averaged out. To Marx this was not the kind of tool to predict the stock market with, but a tool to radically understand the inner workings of the system's dynamic.

It's tempting to compare Marx's concept of value & surplus-value to the invisible particles and matter  that have conveniently filled in theoretical niches in the history of the European physical sciences. Once, centuries ago, European scientists theorized that a transparent substance that they named "ether" must fill in the vast stretches of the universe between the stars and planets and other solid heavenly objects. Or today it is accepted in physics that there are many sub-atomic particles--often given whimsical laboratory names such as "gluons" or "right-handed snarks"--which are not only necessarily invisible but in some cases only exist as a useful piece of theory without any scientific proof of existence. To a degree, Marx's invisible "particles" of value & surplus-value might be thought about like that.

Although Marx specifically says that value & surplus-value are not any material properties of commodities, but rather properties of the social relationships that really are capitalist economics. Which our daily life of the constant exchange of commodities dialectically both manifests and conceals under frenzied and fetishistic activity. A fetish is a non-living object that is thought of as having living characteristics, the typical examples of which are voodoo charms or the wafer and wine at Catholic communion services. In Marx's cultural criticism, the dead objects which capitalism exchanges in the market, like money, real estate, or corporations, are given life-like power and vitality under capitalism; while the people whose work produced them are not only subordinated to commodities but are also forced to take on themselves the aspects of non-living things.

This is frustrating to many readers, because it's so elusively non-material. Marx is saying that value & surplus value are essential parts of everything economic from syringes full of penicillin to automobile tires, but don't have any definite, fixed quantitative form in or attached to these things. They don't even have any physical existence you can find, but seem to exist in... like, a dimension of philosopical reality. Which Marx says is more real than what we appear to see. Since value & surplus-value are supposedly aspects of the social or societal relationships that are production & distribution. It may be strange to just ride with this, but it's easier to not worry temporarily about whether it's true and just follow its logic step by step.

The central pivot comes from the dis-equilibrium in commodity production between the increasing role of mechanization versus the production of human labor-power. This to Marx was the second type of contradiction, beneath the more surface one of supply and demand.

Both aspects of production, both that of machine technology and that of human labor-power, churn out commodities and thus capital. But in Marx's insight only the part coming from human labor-power produces surplus-value, and thus profits. So the total of the combined capital from both machine-production and human labor-power must always increase more rapidly than the total of profits, which originate in human labor-power alone. In a gradual cycle that is built into the DNA of industrial capitalism, there is an inherent tendency for the overall rate of profit to fall as profits are gradually outpaced by the faster growth of capital from always increasing mechanized production. The rate of profit is squeezed by the sheer mass of capital that has accumulated. According to this theory, when the mass of capital has grown so disproportionately large compared to the sum of profits, business activity cannot find adequate profit rewards and falls off. Stores and factories slow down, layoffs spread, the value of stocks and other investments go down, the system is plunged into crisis and a period of stagnation.

In Marx's theoretical analysis, no matter how modern our capitalism becomes, the eventual cycles of economic crash rooted in the very fact of that technological modernization only deepen. Fortelling the future end point of this capitalist mode of production and the coming of an entirely new mode of production & distribution, a new type of society.

But Marx's vision of capitalist crisis and the fall of the system itself never happened...or is it gradually taking place right now?

Up to now we've been laying out this very stripped-down version of the core of Marx's theory. But is any of it true? More to the point, is it useful? It seems to me that Marx's theories on political economy can't be proven in any usual sense of the word. Being that they are more like a brilliantly arcane cultural criticism. i have only read the thick volumes of Capital once in my life, and it wasn't an experience i would urge on the innocent (only on the guilty). Parts threw light on capitalism, but on many pages my eyes glazed over with non-comprehension. i tend to agree with the anarchist Michael Bakunin's unhappy thoughts as he was trying to earn rubles translating Capital Vol. 1 into Russian for a publisher: Capital was a "frightful work", he confided to a friend, although he also said that it was "extremely important, learned and profound, if very abstract."

As an experiment, we can take this one theoretical insight and see if applying it helps us understand better the path of this crisis. After all, even clues at a crime scene don't have to explain everything or be some final truth, in order to help an investigation advance. How does the landscape change in our vision?

It is easy to pick up things in the present crisis that fit the jigsaw puzzle shape of what Marx was theorizing. Last year a business journalist said that in a global perspective, this crisis could be seen as "a crowd of Asian capital chasing each other around the world in search of profit." In other words, this crisis that has suddenly paralyzed country after country into Depression is a crisis of profitability not primarily of insufficient demand. Last year statist economies such as Arab Emirates or China had many hundreds of billions of dollars piled up as investment capital with shrinking choices of where to profitably land it. As we know, there has been a overflowing of investment capital for skyscraper office towers and luxury condominium complexes and multi-billion dollar hedge funds without end. But few of these had any real profitability in the end.

The most glaring feature of this type of landscape is that Keynesian state deficit remedies won't function very well here. Public works projects and improved jobless benefits will ameliorate some of the distress, but will not of themselves revive the capitalist economy. Since this crisis is not simply about stimulating demand at the shopping mall. As a theoretical tool, the concept of profitability crisis explains why the sainted liberal Keynesian regime of Franklin Roosevelt and its all-pervasive public works programs in every neighborhood went on year after year but didn't restore full employment and economic vitality. State spending can give society new highways and even a thin social "safety net" for the working classes, but do not basically change the system's overall profitability until they reach the level of a state capitalism (which has its own contradictions).

Wall Street speculators have become the "Jews" of this Crash, convenient one-stop shopping propaganda targets to take the blame. But speculation was not so much a furtive excess of the few as an entire stage of world capitalist activity. Lock-stepped into by the largest banks and openly encouraged by all the governments. Because the dwindling of profit margins in ordinary production & distribution forced them into a zone of artificial profits by financial manipulation. We could say that speculation didn't cause the Crash since it was the other way around. The underlying crisis in profitability forced capitalists to jump towards speculation as their desperate solution.

Of course, nothing is free, as the capitalist saying goes. Speculation always undergoes a Dr. Jekyll-to-Mr. Hyde transformation, from being the capitalist's savior to being the capitalist nightmare. When the speculative bubble finally bursts, economic collapse is triggered and the artificial profits of speculation evaporate into thin air. Like the bankrupt Wall Street corporations whose vaults were stuffed with worthless paper billions in sub-prime mortage bonds, real estate loans, and devalued stocks. This all turns out to be the normal progression of crises of the falling rate of profit.

"Financialisation" is the term for the shift of capital from ordinary production into the fantasy of a purely financial civilization.  And this "financialisation" took over the center of the u.s. economy, which was the central economy in the capitalist world system. By the start of the 21st century, financial institutions accounted for nearly 30% of total u.s. corporate profits, a near-doubling in one generation. Although they produced nothing of human need in the real world. Financial employees earned nearly one out of every ten dollars in all u.s. wages & salaries. In the financial center of New York, Wall Street employed but 5% of the city's workforce but accounted for 23% of all personal income in 2008. "Financialisation" grew past these road markers, infecting and replicating itself within all other business activity. Without the artificial profits from speculation, today's capitalist economy would have crashed long before this. It has been held aloft by sucessive waves of speculation, such as the dot.com bubble, the housing bubble, the oil & commodities bubble, and the underlying credit card debt bubble.

The point is that far from a "mistake" which must be prevented, speculation is capitalism's life raft to artificially extend their boom beyond its natural sinking. It will never not be used. Time after time, no matter that each shipload of capitalists pledge like boy scouts to never touch it again. But life rafts of themselves seldom reach shore.

What Marx and Engels came to believe later in life was that the tendency towards the falling rate of profit was working very differently than they had originally thought & wrote about. The economic depressions that were so devastating and regular in the early decades of industrial capitalism in the 19th century, had levelled out near the end of that century. Becoming much further apart. Marx and Engel's analysis was that like any living organism, capitalism had developed defense mechanisms to cope with this potentially fatal cycle. The two most important of these "immune system responses" were the forming of giant national industrial trusts or cartels to fix prices and limit production, and the expansion abroad into world-spanning colonial empires. The far-flung occupied territories both absorbed "excess" investment capital, while returning homeward the super-profits wrung from involuntary colonial labor (a small part of which could be used to raise domestic living standards and bribe an important strata of the domestic imperial working class). Thus, the imbalance between the accumulation of capital and the rate of profit had been partially rebalanced at one shot of the gun. But it was not, obviously, from any peacefully productive, voluntary, or even civilian process.

If we follow Marx and Engel's thinking on this: paradoxically, a new level of contradiction was created out of capitalism's successful adaptation. Without frequent "burn offs" to destroy industrial capital, the long-term accumulations of capital started becoming unprecedented mountains, theatening slides that blocked economic progress and could turn into avalanches. As Engels wrote underlining this observation in 1892, the violent holding back of economic depressions only laid the groundwork for far greater cataclysms: "So, each element that works against the repetition of the old crisis conceals within itself the seeds of a much more widespread and powerful crisis in the future."

And now we get to the heart of the matter. In a crisis primarily of the over-accumulation of capital relative to profits, if there is no magic wand to give capitalists instant tons of profits (such as the u.s. capitalists were given with military-economic hegemony over most of Europe and Asia in 1945), the only way to restore a working balance within capitalism is on the over-accumulation side of the equation. By destroying or "burning off" capital until an underlying balance is restored. But there is no control room at a mythical Capitalist Headquarters with a big dial that let's someone measure how much capital has been destroyed and how much yet to go. Nor is there a big joy stick attached to a capital-destroying robot that lets the capitalists guide the violent pulverization. Even Wall Street or Washington is far less powerful than that. Practically speaking, falling into this situation capitalism neither knows what to do nor how to do it. The steering wheel disappears at the drivers seat temporarily.

If fact, maybe the way we are supposed to think about severe economic crisis is off-center?Remember how Marx keeps insisting that the "real" capitalist business world of commodities flashing all over the globe is on a deeper level an illusion? Why should the destruction of capital solely be an "economic" activity? We are led to assume that manipulating capital and profits must be something safely confined to a civilian zone called "business" or "economics". Certainly, this does happen there. Capital pulled over to the side of the road is capital evaporating. Factories and houses become empty derelict buildings. Machinery becomes rusty scrap. Famous brand names and companies vanish from the material world into the history books. But as of New Years Day 2009, the capitalist crisis had already "burned up" well over $2 trillion in business capital; in suddenly worthless bonds and devalued stocks, in shut factories and bankrupt companies--and the  economic plunge hasn't found bottom yet. If Marx's theory about value is a guide, no one knows how much capital must be destroyed for capitalism to come out of a real depression. Perhaps a qualitative level more than anyone usually thinks about.

As an example: Europe and Japan in the 1920s already had walking wounded economies, already were in economic crisis, and were easily pulled into the abyss of the 1930s Great Depression. Clawing at each other for survival, the major capitalist classes saw the imperative of survival in winning each other's colonies and markets. Which directly led to World War 2. The conventional capitalist wisdom today is that this was a political problem, which could have been avoided if the competing capitalist classes had shared instead of excluded each other from markets and raw materials; instead of arms races and clashes, compromising and working together to stabilize the entire world system of corporate dominance bit by bit into a general revival. In other words, a forerunner to today's Globalization. Probably, that capitalist dream was unrealistic, since the amount of capital that needed to be "burned off" was so huge that it required social processes that could not be neatly controlled, and that would spill over in systemic conflict. Overrunning and blotting out the shape of what is "normal". The general crisis and the world war were not two separate events, then, but different stages in one event. This is an interesting hypothesis for our own future (not that the massive "burn off" of capital over-accumulation requires a formal world war, since things like the protracted downsizing of a population and society or other such events could do as well).

After all, the world depression of the 1930s didn't start in 1929, but years before in most of the world. Nor did it end in 1940. The process played itself out into World War 2, when over 100 million people were killed, many large industrial cities became miles of burnt-out rubble, four major imperialist powers were bled and reduced to secondary status. And had to lose their colonial empires one by one. But, as many Western economists have said, this "creative destruction" of capitalism was enough to clear the ground for a vigorous revival of the world capitalist system in the 1950s. It worked. Was that unnecessary "overkill", too much destruction of capital beyond what was needed? Possibly. But as we said before, there is no joy stick guiding unleashed destructive social processes that go far beyond the boundaries of "economy".

This analysis is only an exploration, a test run. We don't know whether this particular theoretical tool actually works well. The broad outlines of the situation that it projects for us are thought-provoking. But no one theory can explain all of the dense unfolding of contradictions in any general capitalist crisis. Let me end with some quick, general thoughts on this crisis:

Each general crisis in production & distribution historically has its own specific character and conditions, in which the sheer size of the changes can accelerate the falling away of an old order and the rise of a new one. This goes far beyond the insight that in the actual inner workings of the system in a general crisis, Keynesian state "recovery" plans simply will not work.  This is even beyond the control of capitalists in their board room or radical protesters in the streets, save those that are part of what is coming into being, the future-as-now. In the last such great crisis of the 1920s-1940s, progressive classes as world-important as the German industrial working class were stripped of their identity and became sleep-walkers. Just as the even larger u.s. white working class ended up retiring politically to the apartheid suburbs. While untold millions of "backward" people of color in the colonial periphery experienced the crisis and world war as an unprecendented learning experience, their angry anti-colonial rising of many millions in the 1930s-1970s shifting the center of the radical world outwards beyond us.

What is obviously specific to this crisis is the "creative destruction" of Globalization, as the capitalist system's metropolitan center and post-colonial periphery collide and merge into each other. Like Mexico disintegrating as a whole nation and merging into Amerikkka.This is the center of the crisis. Not speculation or financialization or housing sales. It's like the IBM building or some corporate skyscraper awkwardly doing brisk business as usual, only with one side blown off and in shreds. Whole sections of classes in the metropolis are being torn off and disintegrated, only to be rematerialized abroad. If u.s. capitalism must on pain of death transport large chunks of its production and its production roles to Mumbai or Shanghai, then the roles for managers, supervisors, engineers, designers, white collar workers, must eventually be transported there as well. The explosive growth of middle and upper classes in the former periphery is the explosive decompression of middle and upper classes in New York and Cleveland. As Budweiser becomes a Brazilian business and the venerable New York Times must ask Mexican capitalist Carlos Slim to rescue it and become a major shareholder. So the national class system here is partially collapsing into itself, and then reforming again to a seemingly discordant world rhythm.

The long-term evolution of capitalist civilization, as seen in other of Marx's theories, is pushing in this direction; The continuing concentration of capital into larger and larger and fewer and fewer companies. Which has reached a critical point of contradiction now, with the entire gigantic u.s. finance industry as mostly only different "storefronts" for one government-backed enterprise. The contradiction about the only increasingly evident need for social control and ownership of the means of production & distribution, paired with the ruling class death-grip on the rotting form of private ownership--even to having mercenary gunmen corporations help the u.s.a. invade other countries, as though now is still Dodge City. One after another, key u.s. industries leave Amerikkkan control, as multi-national corporations become too large for any national framework and drift out over the continents. The critical worldwide growth of the urban working class, which is finally surpassing the peasantry worldwide, is taking place completely outside and around the old u.s.a.

Many of those who formerly were allowed to be in privileged demi-classes, allowed a little addict's taste of the parasitic life, are now being thrown overboard. Not only in the u.s., because every major metropolitan nation today has growing numbers of "useless" citizens, who it no longer has any need for in production or in running their tattered empires. Who are privileged "surplus" except as consumers or soldiers. Like the privileged lower class of permanently jobless "proletarii" of the decaying Roman empire, free citizens without an economic role in a master-slave society; who were given meager "bread and circuses" welfare and told to breed more sons for Rome's imperial armies.

Endgame? "Some say the world will end in fire, some say in ice..."

At the start we noticed how "twilight capitalism" has become an expression common on the Left now.  i think that this phrase resonates to us at least in part because we here are living through the sudden end of day of the u.s. empire. It is twilight here in North America. Only a few years ago anti-imperialists were like Chicken Little, warning everyone of what they said was unprecedented danger from the "lone superpower" superduper u.s.a. Now, after military bankrupcy in Iraq, after financial bankrupcy in Wall Street, that seems almost embarrassing. There are many capitalist powers still  but no longer any capitalist "superpowers". It is reasonable to think that this general crisis is a turning point, an important stage in the protracted decline and fall of capitalism as a world system.

It is hard to seriously discuss "endgame" without theory (or generalized conceptual frameworks) about how societies die and are born. To start with, radical theory, both about how human society evolves and specifically about the endgame of world capitalism, already exists, although much of it is old. Lenin, in his major work, Imperialism: The Highest Stage of Capitalism, written around 1920, believed that capitalism for the first time was one single world-covering system, but that had peaked and was starting to decline.

Without bothering to enumerate all his conclusions ( or Marx's on his theory of historical materialism and the evolution of societies from one to another), Lenin's capitalism was a system where class worked through the outward form of nations. Of oppressor and oppressed nations, or a handful of imperialist powers each owning and parasitic over a number of colonies and neo-colonies. To Lenin, this stage of capitalism, however powerful industrially and militarily, was already decadent and "overripe", starting to decay as a civilization. Because in this stage entire large nations had become parasitic, no longer self-supporting, with parasitic working classes, even. That this kind of society could resolve its systemic economic crisis only through unprecedented world wars with itself-- wars that were destructive beyond any previous limits to the point of being suicidal-- were widely believed to be one important symptom of such systemic decline. While Lenin is often criticized for the bold use of state dictatorship that paved the way to stalinism, he was an unusually creative and innovative political theorist and strategist in action. It is important to understand his theories on imperialism as a distinct stage of capitalism, because without it we don't have a foundation theoretically to explore a post-imperialist capitalism that we are rocketing towards.

From a neo-Leninist vantage point, then, the decline of world industrial capitalism began roughly one hundred years ago . So, in that moment of history, imperialism was both still furiously industrializing, energetically integrating all other local economies in the world into itself, and at the same time starting a decay and decline that most could only see in retrospect (major societies often take a long time in human years to decline--famously, both slave-based Imperial Rome and the mercantilist Turkish Ottoman empire took centuries to decline and fall).

World capitalism as a civilization is visibly decomposing before our eyes. It isn't just anachronistic phenomena such as pirates as a major illegal industry off a Thailand or a Somalia. We see the growing number of "failed states", where there is a crude capitalist economy but the supposed government and nation simply don't exist practically speaking. Even long-established nations such as Mexico and Russia are sliding closer to the edge of that dead zone. The most important military "surge" taking place right now by the u.s. isn't in Iraq or Afghanistan, but on the mutating moving u.s.-Mexican border. Where u.s. homeland security and the u.s. defense department have prepared for a major federal police and active-duty military troop shift to try and stop the Mexican narco-gangs from establishing informal but complete zones of state power over the border itself and much of the lower Southwestern u.s.a. Which they have already done in Northern Mexico, of course. In growing areas of Mexico there no longer is any central government.

Warlordism, which is when the strongest armed organizations of whatever kind simply informally assume the powers of government in the absence of any civil order, has arisen to become a major form of capitalist government. While the treaties and commercial integration of Globalization prohibit wars between major capitalist states, more and more of the "post-colonial" world seems to be in constant civil wars. These are as far away as many areas of the former USSR or as near as the South Side of Chicago. Being security guards or soldiers in some mafia are major male occupations, in some Brazilian cities accounting for as much as one-third of all the regularly employed.

Much of the discussion we've heard around this world economic crisis assumes that the capitalism that is being remade is going to be just a poorer version of today's society. That the struggle will obediently follow the familiar painted lines on the street of civilian society. In other words, "business as usual" only a bit less of it. Nero and Tupac Shakur will sing together at the Met before that happens.

So radicals like the words, "Twilight capitalism".  But are we ready to admit that since "twilight" is a different situation, a different period of world capitalism, we need theory to help us organize and adjust? There is a lot of theory that has dealt with transitional periods, which is what this "twilight" is. One characteristic of this time is that the capitalist ruling class cannot automatically hold the power anymore, but we cannot hold onto it, either. We've just seen the revolution in Nepal, where a democratic front led by Maoist guerrillas seized power and abolished the former monarchy and its feudal-capitalist regime. But only to create a more India-like capitalism. In the u.s. during the 1960s, revolutionary forces here learned how to take over neighborhoods, schools, and factories from capitalist domination. But we couldn't hold any of it; not only because of repression or for military reasons, but because we failed at building a new anti-capitalist culture for people to live in. Just like anti-colonial revolutions in Africa, Asia, the Middle East and Latin America forced Western colonialism out of the capitol, but completely failed to build liberated societies yet. The battleline keeps shifting from one side to the other.

As you can either sharpen or dull a knife against a stone, this crisis makes certain we will either sharpen anti-capitalist theory or blunt it. One or the other will take place.

                                                                                                            J. Sakai
                                                                                                            February 2009




Some radicals are saying that this crisis is an emergency situation, and therefore we must help lead massive new working-class movements to force economic concessions from the ruling class. Or a big united front to fight back against the imminent threat of a major white fascist offensive backed by the capitalists. Or some such talk. There are a number of problems with such perspectives, but the first one and smallest one is that it encourages corrupt thinking about ourselves. In the actually-existing Amerikkka, when the newspapers or television say "left" everyone knows that they mean Nancy Pelosi. Or maybe Howard Dean. Revolutionaries here do not yet have anything like the political strength or numbers to be leading any such imaginary movements. Even if we knew what we were doing. This is like the king has no clothes time, guys. We have to stop wasting our limited attention span on such talk.

We know that the general crisis effects everything that is happening politically, but too many people have stopped thinking about other things. This is like a record storm. It covers everything, changes everything to some degree, but it isn't necessarily the most important thing that is happening. If while you were trudging through the bad weather at night, several guys jumped you with knives and you were fighting for your life, you wouldn't appreciate a passerby yelling, "Keep your mind on preventing flooding, neighbor!" For you right then the very most important thing is surviving the knife fight by any means necessary.

i use that parable deliberately, because to many people under immediate attack by capitalism, the idea that economic crisis is the most crucial problem isn't true. Not in Darfur for sure, not in the neo-fascist turf in the former East Germany, not in Gaza, definitely not in divorce court, not in so many places. Take an event so ordinary that it never gets talked about on national television news or in politician's press conferences. There are no t-shirts about it, no NGOs play at solving it, and no celebrities adopt it:

In the early 2000s, famous Cook County Hospital was in unsustainable financial crisis. This is the hospital model for television's "E.R." show, and the hospital of last resort for Chicago's lower working class. With shrinking government funding, the large public hospital for the Chicago ghetto could no longer keep going on as usual. The background is that like all government here, the hospital is not only a token reform to relieve class discontent, but also an important site of profitable corruption for the local Democratic Party's legendary Daley Machine. Cook County Hospital was not only free for patients, but also free for insurance companies and Medicare. No bills for patient care were ever paid because none were ever sent out. There was no functioning billing department at all. It was riddled with "no show, no work" patronage employees whose real jobs were elsewhere carrying out work for the Democratic Party.

Mayor Daley's solution was to pass the hospital over to public control of the Stroger family, one of the three great Black political clans enforcing imperial rule in neo-colonial Chicago. Then Cook County Board president John Stroger pushed through a puzzling new plan, in which the old County Hospital would be replaced by a brand-new one next door. How could throwing up a dazzling new building be an answer to a financial shortfall? Needless to say, the construction of an expensive new hospital provided the Daley Machine with a festival of rewards & contracts & bribes & corruption.

Most important of all, although the shining new hospital looked as large as the old one, it was a "Potempkin village" hospital. Like a Hollywood stage set, the new building was impressively wide and tall but behind that big facade physically very shallow. Ten years ago the old Cook County Hospital held some 3,000 patients, with beds crammed into crowded rooms and some patients sleeping on gurneys lining hallways. But getting needed care of some kind. Today, John H. Stroger County Hospital (yes, before he died and passed his County neo-colonial chiefdom on to his young son, Stroger modestly named the new hospital after himself ) accommodates only slightly over 300 patients. A wonderful 90% reduction in inpatient care for Chicago's primarily Black and Latino lower working class without health insurance. Disposable people who don't need to be given hospital care at all, since their assigned role is to die when they can no longer usefully labor for capitalism. And since new buildings are costly, some specialty clinics were closed, breast cancer biopsies postponed for months, oby-gyn care cut way back, voluntary surgeries indefinitely postponed. The large general medicine clinic in the old Fantas building nearby was essentially closed to most new admissions.

Crisis successfully dealt with in the liberal neo-colonial way. "Change We Can Believe In." The Stroger clan awards itself and its friends high-paying jobs in new offices. Thousands and thousands of working class women and men denied life or death health care. Through it all, one important man who was right there carefully did nothing and said nothing. But what family man can blame him? For Mayor Richard Daley and the Stroger clan are among this man's nearest true kinfolks--his criminal co-conspirators. This guy is Barak Obama, of course.

It isn't about Obama as just another corrupt and indifferent politician. It's about how the neo-colonial destruction of one local hospital--and the wall of lies covering it all up--is a small window into a much larger ruling class strategy. We mean the systematic forced depopulation and razing of the Black inner cities, one after another. While he was their "representative" in the state legislature, the Lawndale neighborhood had 57% of its adult male population under the crushing thumb of the neo-colonial slave system--in federal or state prison, local jail, on parole or probation. A community as an "open-air prison" with no economy except the police regulated drug trade and the auto-homicide of Black youth. With Obama as one of the well-paid deputy wardens. All so that the dangerous Black lower classes can be killed off or dispersed away from the cities to the unwanted places, the margins of society. Always being moved on. Like what is being done to Palestinians today. And the large, complex and fertile urban Black communities themselves destroyed, like the original Indian Nations before them.

While in capitalism's eye the u.s. empire's old center cities can become profitable white-majority real estate of the future again. All of which couldn't be done without the raising of a whole new "post-civil rights" African-American bourgeoisie to cover up and mislead the way. The class that Obama is now the poster child for, passing out the kool-aid with a warm smile on his face. In the past, even the Booker T. Washingtons had a connection to and a need for the survival of their Black Nation. Now, for the first time, there is an African-American leadership class (whom some call the "mis-leadership class" ) who have no common class interest with the Black Nation. Whether other Black people live or die is only a tactical matter to them. They are out of there. This is a leadership that is being specially trained and chosen by advanced capitalism, of course. The lies & misdirection are far more than just "Ponzi bonds" and stolen pensions.


What is an emergency is our need to orient ourselves in the crisis first of all. To seriously step up our political understanding, and thus our ability in the real world to help others make sense for themselves of a dramatically changing situation. A crisis for the capitalists is only great weather for us, because revolutionaries were made for crisis. This is our perfect environment, to move in the storm. It's exciting to see in the deepening crisis the things that radical theory has long analyzed. To use theory to trace the landscape that is coming into being. Because new groups of people are going to create unexpected movements with strategies and tactics that will surprise everyone. Count on it. And if this general crisis is going to last for many years, revolutionaries need to spend some time at the start to orient ourselves in the right direction.


                                                            ........... End...........