CURRENT POLITICS - Rhinocerous in the Room - Capital

3CR,   26 November 2016

I’d like to start with two confessions.

One is cinematic, the other personal.

 I encourage comrades to track down a movie from this year’s Italian Film Festival.

It’s called The Confessions.

There’s no sign of a general release but the well-to-do can afford a DVD to share with the rest of us.

The rest of us might find some way of downloading it for next-to-nothing.

The Confessions is very humourous, very sharp and exceedingly well informed about the condition of global capitalism.

That one-line pitch for funding would have gone something like this:

‘The head of the IMF confesses his sins to St Francis of Assisi.’

 ‘Great!’ chorus the consortium of producers.

Then they ask: ‘What next?’

Without being a spoiler, here’s the context:

The G8 Finance ministers are meeting to trigger a global crash.

They know a smash is coming.

They know that it will wreck havoc on capitalism.

So, they plan to bring on a crash in a way which will protect the rich and powerful.

To this end, the head of the IMF has come up with an algorithm.

That twist in the script is not as way-out as it sounds.

The new governor and deputy at the Reserve Bank of Australia are the end products of a regime of indoctrination that convinces otherwise intelligent people that only algebra is real.

Well, so much for fictional confessions.

I also need to fess up.

Throughout the year, I’ve been reporting that the global economy is headed back to where it was in 2007.

 In June that year, the Bank for International Settlements warned of a 1930s style crash.

That almost in September 2008 when Lehman Brothers went bust.

Governments stepped in. They took-over other bankrupt banks and then pumped out a trillion dollars.

Here we are at the end of 2016 and the second crash has not happened.

Yet the Masters of the Universe still expect one.

In 2014, the annual Report from the Bank for International Settlements warned that governments and corporations had only postponed the day of reckoning.

In June this year, the BIS Report added a new warning.

The pumping out of money would make that inevitable reckoning worse.

Some of the powerful know what has to be done to serve capitalism.

Excess capacity has to be driven out of the system.

That means a massive devalorisation of capital, with terrible consequences for the rest of us.

Why haven’t they done it?

They’re not game.

Here’s the President of the European Union, Jean-Claude Juncker:

‘We all know what to do, but we don’t know how to reelected after we’ve done it.’

That much is true.

But defeat at the polls is not even one half of what alarms them.

Nor are they worried about a new Bolshevik revolution.

Rather, our masters fear a breakdown of social controls.

Their world is ungovernable enough already.

During the year, we’ve looked at China, Japan, Deutsche Bank, the Italian banks, and the Baltic Dry Index.

This morning, I’ll glace at only the first of those case studies - China.

For the third quarter in a row, Beijing has reported growth of 6.7 percent.

As we’ve noted often enough: Chinese statistics are a particularly boring form of science fiction.

Is Beijing managing a soft landing – or managing the numbers yet again?

China is the leading example of excess capacity.

Indeed, it’s got worse since 2008.

To reduce even the six worst industrial sectors by only 10 percent would cost 4.3 million jobs.  

There is no electoral cycle to worry about.

 The threat to the rulers is that the thousands of incidents and protests that have being growing year by year will get out of control:

‘A single spark might once again start a prairie fire.’

The prospect from the consequent upheaval goes a good way to explain why the government spends so much on the army.

The PLA is not about to invade Tasmania.

Its role to keep a lid on things at home.

This morning, I want to bring in a pressure point which I’ve ignored over the years.

I’m talking about the prospects for the EURO and, indeed, for the European Union.

Six weeks ago, the retiring chief economist at the European Central Bank: ‘One day, the house of cards will collapse.’[1]

At the same time, the politician who oversaw the introduction of the Euro, Jacques Delors, had this to say:

‘It is essential and urgent: at some point in the future, Europe will be hit by a new economic crisis. We do not know whether this will be in six weeks, six months or six years. But in the current set up the euro is unlikely to survive that currency crisis.’

The current conventional wisdom is that the EURO should never have been introduced.

The expert predicts that it cannot survive in its present form, but will spit into two.

One for the rich nation-market-states led by Germany.

The other for the PIGS – Portugal, Italy, Greece and Spain.

More broadly, will the next crash bring down the EURO or will the break-up of the EURO trigger another global implosion?

After eight years of dire warnings about capitalism from people with a vested interest in its survival, why no second smash?

Why did it not happen six weeks ago rather than in six years time?

We’re not Christodelphians predicting the Second Coming.

As Marxists, we don’t depend on ‘faith’, but on analysing material realities.

The biggest reality working against a second smash continues to be the printing of money.

Is pump-priming a sufficient explanation for why the smash has not happened?

If not the total explanation, everything else seems secondary.

Cheap money is everywhere.

Indeed, sub-zero interest rates mean that corporates and governments are being paid to borrow.

The U.S. economy is the only big one to show any sign of recovery.

Yet even the U.S. has not been game to lift interest rates.

We’ll see what happens next week in Washington at the Federal Reserve; and more importantly, what will be the impact of a even tiny rise during the following weeks.

That uncertainty about a 0.25 percent increase above zero comes on top of the uncertainties at every level from the coming Trump rampage.

The German people say they fear inflation more than they fear cancer.

Yet the European Central Bank, which their government dominates, has joined the lemmings in the chase for growth from negative interest rates.

The UK has given up austerity to print money.

That solution is part of what the BIS warns against.

Governments are making the day of reckoning worse by running up debts.

We’re all in unchartered territory.

Everything I have to say is a paraphrase of what I get from the BIS, the IMF and the business media.

The experts now admit that they can’t understand why none of their policies works.

The Left remnants fare no better placed.

Yesterday, I gave a paper at a so-called Historical Materialism Conference in Sydney.

If you want to be depressed go on-line and look at the program.

Capitalism is staggering and two thirds of the papers are fairly floss.

It’s unfair to single out anyone but on the morning of the first day you could chose between a panels on

‘Critique, Form, Language’ and one on ‘Ontology, Power, Poetics’.

The third session was about the politics of Spain and Greece, but not starting from the economy.

The best that much of the Left can do is to go on bleating that it’s all the fault of some beastie call neo-liberalism.

And that neo-liberalism is a bad in the heads of nasty people, mostly men.

Some time ago I used one of these sessions to point out that neo-liberalism is a very good for the corporates;

And that neo-liberalism is secondary to the needs of capital.

Neo-liberalism as a bad idea in the brains of nasty people.

How often do you hear anyone penetrate into the catch-phrase ‘globalisation’ in terms of socially necessary labour-times?

Why this avoidance of the rhinoceros in the room?

Much of what used to be commonplace around the Left has been lost.

For thirty years, the basics of Marx’s critique of political economy have not been front and center.

No one knows better than I do how much yakka has to go into keeping even two steps behind the unfolding chaos.

I suspect that our ‘brightest and best’ know that there is something huge coming down.

Confronted by a decade of global stagnation punctuated by multiple crises, the options are to fight or to flee.

Deprived of the weapons that Marx and Engels fashioned for us, is it any wonder that so many of the intelligentsia have taken flight into the la-la land?

The Young Hegelians of Marx’s youth have regressed into the disorder of infantile Hegelianisms.

New things happen. That’s dialectics for you, comrade.

Opening any of the four volumes of Capital will not explain what has happened inside capitalism since the 1940s.

However, two features of capitalism remain.

The first is its need to expand.

The second is that capital can expand only through the exploitation of our labour and by plundering the wealth of nature.

Those features will be constant for as long as capitalism exists.

What must keep changing is how the agents of capital organise the exploitation and the plunder to ensure its expansion.

Eight weeks ago, we devoted a session to next year’s sesqui-centenary of Das Kapital.

In September 2017, it will be 150 years since 1,000 copies rolled of the presses in Hamburg.

To encourage 3CR comrades to make next year a year of especial attention to Capital.

Next time, I’ll say something about two of Trump’s major economic policies.

Tax cuts and protectionism.

We’ll view them through the lenses that Marx ground for us which Engels polished.

Until then, I’ll leave you with this confidence boosting comment from the Secretary to the Treasury, John Fraser:

‘Everything is fine until it is not.’ 

[1] Otmar Issing, Australian Financial Review, 20.10.16)