26.03.2009
Revolutionary charades and musical chairs
The April 2 G20 meeting in London symbolises in a distorted way the world's need for global solidarity and common action, writes Mike Macnair. It will also symbolise the capitalist world order's inability to provide either
Around the G20 meeting, the ‘international floating crowd’ of anti-globalisation activists will attempt yet again to trigger the world revolution by symbolic minority actions, from forms of street theatre to punch-ups with the police and breaking things. Beyond the ‘r-r-revolutionary’ symbols, however, the substantive ‘alternatives to capitalist globalisation’ on offer are ... forms of nationalism and localism.
Behind the G20 charade is a gradually developing game of beggar-my-neighbour or musical chairs between the various capitalist states. Hence it is appropriate in an ironical way that the ‘anti-globalisation’ left should mirror both the charade and the games.
The real, possible alternative is derided as ‘utopian’ by the large majority of the left as much as by the right: the practical cooperation of the working class as an international class to fight for global solutions to problems which everyone can see are global.
G20 charade
The G20 meeting, like other summitry, is about the capitalist governments appearing to take common action to deal with a ‘crisis’. The original G6 (‘group of six’) - France, West Germany, Italy, Japan, UK and US - was French president Valéry Giscard d’Estaing’s 1975 attempt to be seen to be doing something about the ‘oil price crisis’. The 1976 addition of Canada (presumably merely so that the US would not be ‘outnumbered’) made it the G7.
Clinton brought Russia in, first informally, in the mid-1990s. Then, in 1997, the year of the ‘east Asian crisis’, Russia was formally added, making the G8. The same crisis produced the G22 meeting of finance ministers, which morphed in 1999 first into the G33 and then into the G20. This group purports to bring into the ‘world leadership role’ a number of countries outside the G8 which have big economies: Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Saudi Arabia, South Africa, South Korea and Turkey - the 20th member being the European Union. In November last year the ‘credit crunch’ led to the first G20 heads of government meeting; this weekend sees the second.
The track record of the G8, etc makes perfectly clear that these summits are not real decision-making bodies, but merely a form of spin. It is not wholly impossible that real bilateral or multilateral deals may be reached between some of the governments in informal consultations behind the scenes, though it is more likely that these are set up well away from the G8/G20 circuses. The formal ‘decisions’ or communiqués issued by the meetings are masterpieces of diplomatic obfuscation and unanimous votes for motherhood and apple pie. Who now takes seriously, for example, the communiqué of the Gleneagles summit (2005) on world poverty? The G8/G20 can thus be seen to be what Walter Bagehot called (referring to the ceremonies round the monarchy) the ‘dignified part of the constitution’, as opposed to its ‘efficient part’.
The question this poses, though, is: why is this particular form of spin thought to be necessary? The answer is political. Our rulers are not able to act just as they please. In order to rule us, they need active support from state officials, passive support from the middle classes and the upper (skilled) layers of the working class, and to be ‘put up with’ most of the time by the rest.
To get these different levels of support, governments in particular are expected to ‘do something about’ visible problems. The result is often stupid knee-jerk legislation like the Dangerous Dogs Act and disastrous policies like the ‘war on drugs’. This should not be overstated. For all the talk about the ‘blame culture’ no-one blames governments for natural disasters. What governments get blamed for is failing to prepare properly for such disasters or deal with them effectively after the event (eg, Hurricane Katrina).
However, economic crises are not seen as analogous to natural disasters. The reason is apparent from the current situation. Economic crises are visibly caused by human actions and, moreover, ones intended to enrich the actors. If real estate speculators enrich themselves out of Hurricane Katrina, that is a scandal; but the real estate speculators did not cause the hurricane and the wind was not enriched. But capitalist economic crises inherently involve some people whose bets have been lucky enriching themselves at the expense of a majority who are impoverished by it.
It has been said that “in a recession assets return to their rightful owners”.1 This begs the question, who are these “rightful owners”? The answer is not based on any moral theory of property. It is purely and simply those who have the good luck to hold a lot of hard currency (in an extreme crisis, gold) when the crisis reaches bottom.
Hence, if they want to retain the support they need, governments have to appear to ‘do something about’ economic crises. But for decades now it has been trivially obvious to anyone who is paying attention - which means, to the majority of the population, not just to capitalists and ‘experts’ - that economic crisis is an international phenomenon. That means that governments have to appear to ‘do something’ on an international scale.
Why not go through the United Nations or International Monetary Fund? The answer is that that only ‘official communists’ and their academic hangers-on really take the UN seriously. The general assembly gives equal votes to large and small countries, to rich and poor ones. This is neither a democratic structure (votes according to population) which would give the UN one sort of legitimacy. Nor is it a timocratic one (votes according to wealth), which would give it another, capitalist, sort of legitimacy. One vote per state makes the UN general assembly a pure contradiction: an ‘international’ institution for whom the only ground of its legitimacy is ... nationalism and the doctrine of the absolute sovereignty of states. The security council has no more legitimacy. It combines the permanent members with vetoes - ie, the victors of World War II - with a random selection of other countries.
In 1975 the UN was merely an arena in which the cold war blocs engaged in propaganda plays. The IMF, meanwhile, was already identified as merely an instrument of US policy. Giscard d’Estaing was trying to create a club of industrialised - ie, rich - countries, which would not quite so obviously be merely a front for US policy.
Today the G8 still has the character of a club of rich countries with Russia tagged on. The addition of Russia, which is a great power but not really a rich country, is another aspect of its character as a dumb show. The G20 offers the pretence of integrating ‘newly industrialising countries’. Since the whole thing is a charade, letting in these ‘rising lesser players’ is costless. The real decisions - if they are taken at all - are taken elsewhere.
But the charade persists because the need for global decision-making is real. The real need means that appearing to take purely national action is insufficient to win public support. This, in turn, imposes on our rulers the need to pretend to act internationally, and the G8/G20 is the form of this pretence. Real, coordinated action is beyond them.
Capitalist musical chairs
The Obama administration has proposed yet another and even larger bank bailout. The stock markets initially responded positively, while some economists, like Joseph Stiglitz, were critical: this proposal will give the potential gains to the banks, while the government will carry the potential risks.2 Meanwhile, the Chinese government has expressed concern about the safety of its foreign exchange reserves held in US treasury stocks: if the bailouts produce a falling dollar and/or inflation, the Chinese will lose vast amounts of money.3 They have, in fact, already lost vast amounts in the falling markets. The Chinese Central Bank has now proposed that the role of the dollar as reserve currency should be replaced by a new international reserve currency based on the IMF’s ‘special drawing rights’.4
Other straws in the wind. The Czech government this week became the third eastern European government to fall, as the crisis bites home across the region.5 As a small sample of what is going on, Renault is moving some car production from Slovenia to France in a quid pro quo for French government support.6 Across the world, the bailouts only benefit the richer countries: for the poorer countries, the crisis is already acute.
These are in different ways symptoms of a beggar-my-neighbour or ‘zero-sum’ game: for every winner there is a necessary loser. In fact, it is sharper than that. In boom periods, capitalism is a positive-sum game: while not everyone wins, the overall cake to be divided gets larger. In recessions and slumps, capitalism turns into a negative-sum game, like musical chairs: the overall cake to be divided gets smaller as the game goes on.
With the crisis, states and their relative strength come to the fore. The so-called “transnational capitalist class” turns out to be dependent on them for handouts. And these states are much more willing to bail out ‘their’ banks, car makers, etc than others, and to save jobs in the home country rather than those abroad.
It is for this reason that the G8/G20 can agree nothing more than empty words. It is also for this reason that the Chinese proposal for a new and international reserve currency organised by the IMF is utopian.
Why? The answer is that at base money is a public phenomenon, like public highways and so on: even gold only works as money if it is generally accepted as such. In modern capitalist society money is therefore at base a state phenomenon. Credit chains can work as money ... as long as we are not in a crisis like the present one. Then it is necessary to fall back on state money. The relative strength of different currencies therefore reflects the economic strength of the issuing countries as mediated by the perceived power of their states.
The dollar is the international reserve currency immediately by virtue of US victory in World War II and the global strength of the US military (as powerful as all its potential rivals put together). For the dollar to be the reserve currency is in the immediate interests of the US: it allows the US to borrow cheap and lend dear and to run large deficits at need which will be balanced by ‘invisible earnings’. The same was true of the UK in the later 19th century. Hence the US will not voluntarily give up the reserve status of the dollar.
For the dollar to cease to be the reserve currency therefore requires the military strength of the US to be tested and overthrown in actual open war, as happened to the UK in 1914-45. It is only under war conditions that countries’ productive capacities are immediately tested against each other without the mediation of the ownership rights and income flows which inhere in possession of the international reserve currency. Hence it is only by war that an international reserve currency can be replaced.
The military overthrow of the US is a pretty unattractive way out. But even this would not create true world money without the creation of a world state. The more probable outcome would be a new world hegemon replacing the US.
How this might happen can be seen by using the analogy of two recent transitions from one global reserve currency to another. Imagine that the European Union breaks free of the present US political control of the several European states and creates a Europe-wide state: this would be analogous to the revolution of 1688 in England or the US civil war. Now (perhaps some time later) the US becomes embroiled in a major war with China, which forces it to transfer funds and overseas interests to the EU in payment for munitions: this would be analogous to the wars of the 18th century or 1914-18 and 1939-45. As a result the Euro-state emerges as a new capitalist hegemon and the euro as a new global reserve currency.
But such a new world regime would at its roots merely be a rerun of the British hegemony of the 19th century or the US hegemony of the later 20th-early 21st century. This would be true, however different its forms were: for example, if the UN and IMF were reformed or replaced with stronger institutions. The military-coercive state power of the hypothetical Euro-state would still be the core of the ‘system’. This state would display the same dynamics as the 19th century UK or later 20th century US: shift to dominance of finance and overseas investments, and relative productive decline propped up by the advantages of having the reserve currency. Its ability to create order would decline and monetary problems would increase, and so on, leading to new crises and in the end to a new cycle of war.
We are nowhere near such an outcome and in the epoch of strategic nuclear weapons it may be impossible. But without such an outcome, within capitalism musical chairs is the only real option. Capitalism requires money (and other aspects of the public sphere), and money requires the state. If those states ‘virtuously’ sacrifice themselves to the needs of capitalism considered as an international market, they will not sustain the consent of their subjects and will fail as states. So they must try to bail out the ‘national’ economy, ‘national’ banks and ‘national’ industries.
Hence, in spite of all the clouds of talk about ‘avoiding protectionism’ and ‘fighting to defend free trade’, protectionism has already begun. Within a global capitalist order, bailouts and reflationary stimulus packages are in themselves protectionist: they are different ways of protecting business and employment in the territory of the nation-states. The strong states protect ‘their’ capitals, the weak begin to go to the wall.
Charades of the revolution
G8 meetings have been repeated targets of ‘anti-globalisation’ protests and this one will no doubt be no different.
The BBC reports: “G20 Meltdown is appealing to those who have lost their ‘homes, jobs, savings or pensions’ to join what they call a ‘Financial Fools Day’ targeting the banking elite on April 1. Organisers say they have seen a ‘groundswell’ in support since the start of the recession and their Facebook site has attracted more than 1,000 members. ‘There really is a shift because people feel no-one is listening - the government is in some world of its own,’ said one of the organisers, Camilla Power. ‘Our aim is to challenge the legitimacy of the G20 summit.’”7
This has, of course, been the aim of the several anti-globalisation protests at international capitalist events and summits since 1994 in Madrid and the ‘battle of Seattle’ 10 years ago; and of the World Social Forum meetings since 2001. Camilla Power rightly says that the crisis changes the terms of engagement. But then the question is: why the same methods which have been used unsuccessfully for the last 15 years?
The anti-globalisation ‘direct action’ enthusiasts have hold of some fundamental truths; but they also cling to some fundamental mistakes.
First and most prominently, the activists correctly understand that to confine protest and resistance within the boundaries of legality is to confine it to forms of protest acceptable to our rulers. But this is also to confine what may be said to what is acceptable to our rulers. Corporate political donations to political parties and the advertising-funded media are in substance forms of corruption of electoral politics no different in their end result from bribes paid to individual MPs and public officials. The ‘free market in legal services’ is in substance a form of corruption of the judicial process no different in its end result from bribes paid to individual judges. ‘New Labour’ is precisely what results from accepting these ‘democratic’ - actually timocratic - limits on opposition.
The second and most fundamental truth is symbolised by the attacks on the junkets of the international institutions. It is that the basic enemy of humanity is capitalism as a world system. This system can only be replaced - or even in the slightest degree reformed - at an international level. Where single countries attempt reforms, they are met with flights of capital and runs on the currency; to attempt to opt out of the system altogether on a national level, even the level of a very big nation like Russia or China, produces sanctions, blockade and military pressure from the capitalist powers and in the end failure, Soviet-style.
Thirdly, the activists understand that fundamental change is needed - not just small reforms - ‘Another world is possible’. The present economic crisis is just one of the symptoms of this need. Among others: human-induced climate change requires both global and radical measures. Capitalism displays a systemic dynamic towards increasing inequality both within countries and between countries. Imperialist wars and ‘interventions’ in third-world countries have continued more or less unceasingly since the emergence of European capitalism in the 16th century and have certainly not declined in the late 20th and early 21st. ‘Musical chairs’ competition between states implies an objective dynamic towards great-power war - however unthinkable and irrational it may seem now.
The fourth and fifth points are both truths and weaknesses. Fourth: fundamental change means revolution: a rapid and radical reconstruction of the social order. And revolutions, we know from history, are not orderly, regimented processes which follow neat, bureaucratic lines. They are extraordinarily chaotic mass outpourings of human creativity, as the old order fails and millions of people set about creating a new one. The direct-action-istas therefore counterpose creativity and spontaneity to permanent organisations and structured majority decision-making.
Fifth: the precise timing and form of the outbreak of revolutions is unpredictable. There is always, as in the Chinese proverb quoted by Mao, some ‘spark that lights a prairie fire’: from Jenny Geddes’ stool thrown at the Anglican Dean in Edinburgh in 1637 to the women who went out on strike on International Women’s Day in Petrograd in February 1917.
Both truths and weaknesses, because both points are true. But, while it is true that revolution is a mass outpouring of human creativity, organisation and democratic decision-making on common concerns are also necessary. They are, if anything, more necessary to a revolution against capitalism than to the revolutions which brought capitalism in. Capitalism provides - in money and markets - forms which allow partial coordination of human productive activity without conscious coordination: ie, organisation and democratic decision-making. Taking capitalism away without working out an alternative means of coordinating our diverse activities results, not in a better society, but in mass starvation. That is a lesson of April 1917-April 1918 which the left often forgets.
And, while it is true that the precise timing and form of revolutions is unpredictable and there is usually a ‘spark that lights the prairie fire’, breakdown of the old order is usually eminently predictable from visible symptoms. The English revolution took place amidst a general crisis of the European polities; the American revolution was preceded by a decade of conflicts and mass struggles; the French revolution of 1789 was in the immediate wake of the American revolution; the Russian Revolutions of both 1905 and 1917 were preceded by a dramatic rise in strikes and other mass actions. In all these cases, too, the existing state and social order was obviously failing. For the spark to light the prairie fire, the grass must be dry.
In the late 20th and early 21st century the grass has not been dry. The bubble economy has certainly produced losers, but it has produced enough winners in the main capitalist countries that broad millions have not felt the immediate need to revolt. The present crisis is gradually drying the grass out, but in Britain at least not yet so sharply as to produce an epidemic of mass struggles. The regimes may be staring into the abyss, but they are not yet - in the core capitalist countries - divided and despairing.
Under these conditions the minority initiatives of the anti-globalisation ‘direct action’ campaigners do not trigger revolutions, but produce small-group ‘spectaculars’ and clashes with the riot cops which, far from ‘lighting the prairie fire’, merely make a short-lived news story: charades of the revolution.
Leftwing beggar-my-neighbour
“Nation states with the right to self-determination and their governments are the only institutions that can control the movement of big capital and clip the wings of the transnational corporations and banks.” This quotation comes from the “No2EU - yes to democracy” platform for the Euro-elections, backed by the Rail, Maritime and Transport Union, the Communist Party of Britain and the Socialist Party in England and Wales).8
On March 11 another group of MPs and union leaders launched the “People’s charter for change’. The charter avoids the explicit nationalism of “No2EU”; indeed, it demands: “Get rid of the debt economy in Britain and cancel the debts of the poor of the planet.” But the charter, like No2EU, is a programme for Britain only. In the same text we are told: “Existing jobs must be protected. Public and private investment must create new jobs paying decent money. In particular in manufacturing, construction and green technology. More jobs mean more spending power to stimulate the economy, increased tax revenue and fewer people on benefit.”9
In this form, these are in substance demands for more of what the government is already doing: Keynesian economic stimulus and protectionism within the framework of capitalism. The consequences we can already see: the economic crisis is partially offloaded from the stronger capitalist countries, to take the form of more acute crisis in the weaker countries.
These are merely British examples. Similar programmes for individual countries can be found worldwide. Moreover, the term ‘anti-globalisation movement’ says something fundamental about its nature. Even though the capitalists’ charades of international decision-making have been targeted by the protests, the demands put forward are not ones for democratic global decision-making for global solidarity to make a better world. They are demands to free the nation-states and the localities from the fetters of the IMF and WTO.
Proponents of this sort of politics imagine that by getting rid of capitalist globalisation would get us back to the (in some ways nicer) world of the cold war, when the capitalists made extensive concessions to both labour and third-world nationalism in order to keep them onside against the Soviet Union. But that world was in fact guaranteed by US supremacy; and the Soviet Union is gone. What ‘freeing us from globalisation’ by restoring power to the nation-states would produce would not be concessions to labour, but intensified competition between capitalist states, each of which ‘unable to afford’ welfarism. In other words, ‘anti-globalisation’ is still within the capitalist game of musical chairs.
Alternative
What we need is not to ‘go back to the nation-state’ (which is anyhow still very much with us). It is real, democratic global decision-making in the interests of human needs: a liveable planet in which humans stand in a sustainable metabolic relation to nature; basic living standards for all; education; useful work; and participation in the decisions that shape our lives. In one word: communism.
Real democratic decision-making necessarily requires that no individual or family gets control over major productive assets by virtue of ‘ownership’. Put another way, it means that no-one gets more than a living wage: because once no-one gets more than a living wage, the wage itself is merely a living and not part of the system of wage-slavery. In other words, the general human interests I listed above are also the interests of the wage-earning class as such.
The alternative to the charades and musical chairs, then, is for the working class to take over on a world scale. Without this we cannot end the economic crisis or even palliate its effects to more than a limited extent.
How to get to the point of the working class taking over is not through a state-by-state struggle for nationalisations and economic planning. The workers’ movement needs to organise itself at the base for immediate defensive measures (against job cuts and wage cuts; for the organisation of the unemployed; for cooperatives and mutuals as partial measures of self-defence; and so on). This sort of work carries with it an immediate implication: that the workers’ movement needs to cooperate internationally against capital, which operates internationally.
The movement needs to fight for political democracy in its own organisations, against bureaucratic control, manipulation and secrecy. It needs to carry this fight into the public politics of the nation-states, against the exact same control, manipulation and secrecy and also against the judicial power, the militarised police forces, the standing armies, the advertising-funded media and so on. All these are mechanisms of political corruption by which capital monopolises decision-making behind a pretence of ‘democracy’.
If we fight for political democracy in the workers’ movement alongside fighting to build this movement at the base and for international cooperation in practice; and if we carry the struggle for political democracy into the nation-states; the idea of political democracy and workers’ power is then one which could be counterposed to the corruption and uselessness of the existing international institutions.
This perspective looks ‘unrealistic’ right now because the organised working class movement is both very weak and dominated by nationalists and bureaucrats. But there is no real alternative to it. As long as we cling to nationalism and bureaucracy in the organised workers’ movement, all there will ever be is the capitalist and leftist versions of charades and musical chairs.
Notes
1. The tag is variously attributed; among others, to the financier JP Morgan (1837-1913) and to Andrew Mellon, US treasury secretary in the 1920s.
2. www.reuters.com/article/newsOne/idUSTRE52N1IW20090324
3. Wall Street Journal March 13.
4. Financial Times March 23.
5. news.bbc.co.uk/1/hi/world/europe/7962177.stm
6. Daily Mail March 21.
7. news.bbc.co.uk/1/hi/uk/7946068.stm
8. no2eu.com/economiccrisis.html
9. www.thepeoplescharter.com/moreinfo.html (emphasis added).