Tuesday, May 5, 2009

If wishes were horses then beggars would ride

Economic crises, while bad for those living through them, are often good for the reputations of past radical thinkers. There has been some talk recently of the renewed relevance of Marx and perhaps also some talk about the old Marxist debates on "finance capital." The phrase came to mind when I read Jason Schulman's review of Robert Reich's Supercapitalism in the spring '09 issue of Democratic Left. Schulman writes:
"Today, capitalism is dominated by finance capital, abstract capital.... Subordinating productive capital to itself, finance capital makes the economy function on a short-term and unproductive basis. It is therefore fundamentally predatory and parasitic, increasing investment in circulation rather than production -- spending vast levels of resources on income property [sic], commodity, equity and bond speculation."
To the fairly standard complaint about excessive speculation, Schulman adds the morally charged epithet "parasitic," and he goes on to say that the U.S., where only 15 percent of the labor force "is directly involved in actual production," acts as "a parasite in the world economy."

While I happen to agree that it would be better if a larger percentage of people in the U.S. made things as opposed to pushing paper (or -- dare I say it -- writing blogs!), I'm not sure I entirely buy the notion that the production of tangible goods is non-parasitic and all other economic activity is parasitic upon it. This is a quibble, however, since I do not of course want to speak up in favor of short-term speculation (who does?).

Writing in a democratic socialist publication, Schulman asserts, not surprisingly, that Reich in his book displays the timidity characteristic of New Deal liberals. Reich notes trends but fails to explain them (Schulman says), and "Reich fails to understand...that the American state....is very much a capitalist state...part of an international state system, subject to the world market, through which capital reigns."

Oh boy. Anyone up for a re-run of the Miliband-Poulantzas debate? Hmm, not right now, I'm not even typing this at my home computer.

Moving right along, we come to the very end of Schulman's review (a longer version of which is apparently going to appear in the journal New Political Science). Here there is this sentence: "...the fight for economic democracy is intrinsically tied to the fight for greater political democracy than capitalists and their political representatives will ever be willing to accept: to go beyond the freedoms of speech, assembly, association, movement, etc., and onto democratic control of the economy and real control of the state."

Now, I agree with Schulman on the need for "democratic control of the economy." (I wouldn't be a member of the organization that publishes Democratic Left if I didn't.) There's just one little problem: leftists have been calling for democratic control of the economy for decades, with distressingly little to show for it in terms of results. Am I blaming the left for all the malign world-historical events, from the breakdown of the Keynesian accommodation to the rise of neoliberalism, that have occurred in the last 30 years? Of course not. But I do think that, as someone who read Michael Harrington as a teenager and joined DSOC when I was in high school, I am entitled to be just a little bit weary when, roughly 35 years later, I read yet another series of clarion calls for "democratic control of the economy," having read quite a few such calls in the intervening years.

Democratic control of the economy. Democratic control of investment. Genuine political and economic democracy. Transcending capitalism.

Great. I'm all for it. But I'm not holding my breath.


Anonymous said...

That's just it, isn't it, LFC. The left does not have a viable political theory of transformation. A lot of us agree that we need to deepen the kinds of democracies we now have in place in many countries. But, we don't have any theory on how to do it (strategy, or even on the ends to be achieved. This is the task of the left intellectual, isn't it?

LFC said...

"The left does not have a viable political theory of transformation," and the key word is viable.

In fairness to generations of 'left intellectuals,' I would not want to say that all the talking, theorizing, all the journals etc have been a waste of time. Some of it doubtless gets into the atmosphere, so to speak, and exerts a kind of influence, now stronger now weaker, on politics and outcomes. But it's usually a pretty attenuated influence.

I think left or left-liberal intellectuals who work on specific policy issues are going to start having more influence now that there is an administration that wants to do something about health care, climate change, reforming the tax code, etc. But all that, while very necessary and all to the good, is of course not the kind of transformation that Schulman is talking about.

I respect intellectuals who try to link normative theory/political theory and policy, and there are some who do. I probably should try to read them more than I do now.

Anonymous said...

Thanks for the quick response. I am not talking about policy or the link between policy and political theory. I am talking about a political theory. Capital P and capital T. And yes, I am not talking about left-liberals in terms of the American political spectrum - should have clarified that.

LFC said...

OK, noted.
Are you familiar w/ D. Archibugi and Held & others on democratizing global institutions? I have only a quite vague idea of what they say, but if you put that together w some other stuff (wh/ i will leave even vaguer) might start to have the beginnings of a capital P capital T theory (?).

The one-year anniversary of this blog is coming up later this month, and it would be a great time for a guest post. Subtle, eh? :)

Anonymous said...

Two quick reactions:

1. Schulman's claim that only 15% of the workforce is involved in direct production betrays a lack of understanding about what constitutes economic activity in the 21st century. Without actually looking it up, I have to presume this figure pertains to physically-tangible goods (if even that's correct). I'm just getting Louis' summary here, but one has to wonder if Schulman appreciates that the production of goods is no longer, nor should it be-- from the standpoint of ecological survival-- the bedrock of 21st century economies. I'm talking knowledge and services here, not speculative finance.

2. Let's not forget there's at least a moderately-substantial literature on market socialism and its variants which has tried to move well beyond theoretical abstractions into the realm of viable, structural, economic changes (Verso's "The Real Utopias Project," as one example in the last decade).

I'm not sure it's more left intellectuals we need-- rather, more left organizers.


LFC said...

Thanks for the points. They open some interesting issues which I hope to address later on.

Anonymous said...

Thanks for the reference to Verso's Real Utopias Project, K. I am wondering if you would mind elaborating about left organizing. Organizing whom? For what? Towards what ends? I realize these are big questions, but any ideas/hints would be much appreciated. Thanks.

Anonymous said...

A one-off reply to N's query, given time constraints. Was responding to your earlier remark about theories of transformation being the task of left intellectuals. This may be so, but I'm far less troubled about a dearth of left-wing scholars or even theories of transformation, than I am about the absence of organized social movements in the U.S. Witness how many folks turned up in Euro capitals to protest the financial meltdown vs. here in the U.S.-- not necessarily a "social movement" over there, but at least a mass response. Even nonagenarian Daniel Schorr, in an NPR commentary, puzzled over why Americans weren't out in the street in droves over the last months. The internet-based initiative, "A New Way Forward," seems to have had little traction on the ground. Intellectuals certainly play a part in fomenting social movements, but the real work in building mass movements is always more tedious, protracted, and painstaking. We need recruits for this endeavor more than a new cadre of left intellectuals. Plenty of good ideas already out there, just not the popular pressure to transform ideas into practice.


LFC said...

A couple of off-the-top-of-head thoughts re the relative weakness of organized social movements (or movements for organized social-economic change) in the U.S. in particular, and the relation of intellectuals (however defined exactly) to them:
When you think of reasonably large mass movements in recent U.S. history (i.e. since c.1955 or thereabouts), one comes up with the civil rights mvt, 60s anti-war mvt, 60's welfare rights mvt (not strictly a mass mvt perhaps, but fairly effective in some ways), nuclear freeze mvt of the '80s, recent anti-Iraq war mvt (to some extent), and that's close to it (might want to throw in pro-choice and gay rights mvts also -- 'mass' status of these is debatable).
It seems hard to generate mass mvts around broad economic class-based issues -- the financial meltdown and wall st scandals, wage stagnation and income inequality, executive compensation and corporate malfeasance, deindustrialization, etc etc. The Obama campaign tapped into discontent on these issues, but that was obviously in an electoral context not a mass-mvt one in the sense of those listed above.

Intellectuals however defined often prefer to sit in a room reading or/and tapping at a keyboard than do the often dirty, slow, difficult work of organizing etc. Now it is true that a number of ex New Leftists became community organizers (as did some people born later) but in some cases the 'career' aspects of that might have taken precedence over the 'movement' aspect.

A political-social movement has to be willing to dissolve itself once its goals have been achieved. Someone whose career and livelihood is tied to a movement may be, unsurprisingly, less than willing to make that commitment. What if, by some totally implausible miracle, a wand were waved and world poverty were ended tomorrow? What happens to the careers of those people who work for Oxfam and all the other anti-poverty NGOs? What happens, for that matter, to some people in certain parts of the World Bank (e.g.,IDA)? They're all out of a job. Now, world poverty is not going to end tomorrow so the example is fanciful, but I'm trying to raise the issue of social change as a profession versus something else.
Well, I've rambled on long enough.

hank_F_M said...

Some thoughts.

About the 16% involved in production.

This is because there has been a tremendous increase in the productivity of of the average manufacturing worker. 16% can produce what even a few decades agos would have required over 50 %. The other workers moved to service areas which on one hand makes for a higher standard of living on average, but since productivity has not gone up any where as much in the service area they end up being a lower paid group.

One of the criticisms of socialist concepts is that in practice they fail to maintain the capitol necessary to maintain production and thus “eats” its capital and becomes poorer every year until it is unable deliver what is promised. (The Soviet Union comes to mind) I think on of the reasons socialist or quasi-socialist systems have been doing much better lately is that the increased production per worker is off setting this trend.

A political-social movement has to be willing to dissolve itself once its goals have been achieved. Someone whose career and livelihood is tied to a movement may be, unsurprisingly, less than willing to make that commitment.Well of course world poverty isn’t going to end tomorrow. But given a choice between two alternatives might the bureaucrats you mentioned be inclined to support the one with better career prospects rather than the one with the most promise?

LFC said...

First, on the 15% "involved in production" -- I assume what Schulman meant here is that this is the percentage directly involved in growing things or making tangible products in factories. But there are of course lots of other "productive" occupations/activities, even if you define "productive" narrowly. Someone constructing a building (an energy-efficient building, let's say) may not be "directly involved in actual production" but is doing something productive. That's the first point -- directed at Schulman not the commenters in this thread.

Hank--I don't agree that the drop in number of manufacturing workers in the U.S. (and, for that matter, other "advanced" economies) is primarily the result of increased productivity. A lot of things that used to be manufactured here are being made elsewhere where labor and other costs are lower. As many so-called
'emerging market countries,' above all China of course, have opened themselves to foreign direct investment (i.e. factories and other production facilities), as int'l communication and -- until recently -- transport costs have dropped, multinationals have been able to disperse production to sites scattered in a number of countries, so that for example a car all of whose components were made in the U.S. 50 years ago is now assembled from components made, say, in 6 or 7 different countries. I think this is all reasonably widely accepted and non-controversial and it has really nothing to do w/ increases of productivity of manufacturing workers here. No doubt, given technological advances, such productivity increases have occurred, but alone they cannot possibly account for the huge drop in manufacturing jobs.

On transport costs (mentioned above): Marc Levinson's article "Freight Pain" (Foreign Affairs, Nov/Dec '08) argues, according to the summary, that "slower, costlier, and less certain transportation" means "the golden age of globalization is over." I've only read the little summary not the article itself, so don't know what he says on specific implications.

Finally, I didn't mean to cast aspersions on the people working for anti-poverty organizations. I think on the whole that no one would be happier than they if "world poverty ended tomorrow."