Political Economy

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eumaas
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Political Economy

Post by eumaas » 17 Nov 2017, 2:42pm

Recently been reading Minqi Li and his analysis is persuasive. I recommend checking out his lectures:





The first one has the bulk of his argument, and is the essential viewing. I add the others in because he explains things a bit differently here and there, which helps if the first is unclear.

As a Marxist, Li is a bit too optimistic about future developments (kind of funny to say given his emphasis on impending doom). For one thing he neglects the rise of neo-fascism as a factor. Crisis conditions seem to precipitate fascism as much as they do socialism. The balance of forces on the eve of crisis may determine the direction of various nations. I could easily see a resource squeeze under fascism leading to a horrifying drive to reduce "surplus" population. He also makes the case that the social-democratic Keynesianism advocated by Sanders etc as a solution to crisis doesn't have enough economic basis to succeed, nor ultimately to forestall the fundamental crisis of the system. That leaves us back at the old question of socialism or barbarism. I am not convinced that socialism would inevitably win out given the extreme ecological pressures at work and the comparatively more favorable institutional conditions for reaction instead of revolution.

I also think the change may be slightly less rapid than he projects, but not for any specific reason, just being cautious about giving a date for crisis. But I do think that the crisis is inevitable.
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Re: Political Economy

Post by Dr. Medulla » 17 Nov 2017, 2:51pm

I'll try to watch these this weekend. Just a few quick comments.
eumaas wrote:
17 Nov 2017, 2:42pm
As a Marxist, Li is a bit too optimistic about future developments (kind of funny to say given his emphasis on impending doom). For one thing he neglects the rise of neo-fascism as a factor. Crisis conditions seem to precipitate fascism as much as they do socialism.
What an odd omission for him to make given the 1930s was a major crisis that led not to socialism but fascism (even the Soviet Union went in a more fascist direction).
I also think the change may be slightly less rapid than he projects, but not for any specific reason, just being cautious about giving a date for crisis. But I do think that the crisis is inevitable.
Crisis is inevitable and it'll be rooted in climate change and scarcer resources. Capitalism is predicated on, among other things, a limitless supply of raw material to manufacture into conmodities. Scarcity that limits production will fuck with a core principle. That and, you know, people not having food and water will make for instability. I've said before that the first decade of this century will perversely be seen as the good old days and hated for all the wasted dedication to awful choices.
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eumaas
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Re: Political Economy

Post by eumaas » 17 Nov 2017, 3:10pm

Dr. Medulla wrote:
17 Nov 2017, 2:51pm
I'll try to watch these this weekend. Just a few quick comments.
I would watch the first and only the others if something was unclear.
What an odd omission for him to make given the 1930s was a major crisis that led not to socialism but fascism (even the Soviet Union went in a more fascist direction).
It is an odd omission, but also the rise of neo-fascism has become more pronounced recently. These were recorded beforehand.
Crisis is inevitable and it'll be rooted in climate change and scarcer resources. Capitalism is predicated on, among other things, a limitless supply of raw material to manufacture into conmodities. Scarcity that limits production will fuck with a core principle. That and, you know, people not having food and water will make for instability. I've said before that the first decade of this century will perversely be seen as the good old days and hated for all the wasted dedication to awful choices.
I agree with all of this.

Li argues that the endless accumulation and growth has been heavily dependent upon on the one hand, superexploitation of labor (China having the biggest contribution), and exploitation of natural resources on the other. If China were to try to transition to a consumption-based economy by curbing superexploitation of labor in order to drive up domestic demand, that would rob the core countries of a primary source of growth. But this shift would also run up against the ecological constraints, precipitating crisis (China is the world's biggest importer of oil).

With the resource squeeze in effect, the ability of core countries to transition to social-democratic Keynesianism would be dependent upon superexploitation of the periphery/semi-periphery. But superexploitation itself causes a demand crisis as people don't have the means to consume. Neoliberalism saved core capitalists from profit squeeze by dismantling workers' rights and driving down wages only to precipitate a demand crisis in turn. They addressed that by heavily financializing the economy and driving demand through debt (although actually this process began before neoliberalism), but as we saw in 2008, debt-driven demand is destabilizing.

The more China develops, the more pressures there are for it to move away from its status as a peripheral or semi-peripheral economy, but that means trying to drive up demand. If they try to maintain the current superexploitation, that would require the entry into the debt economy of millions more people, which seems unsustainable and crisis-inducing. But then improving wages (which Li sees as the current economic trend in China), which avoid this debt trap, would also deprive the core of a superexploited labor force, which alone would remove an essential countervailing check against stagnation.

Li's argument is kind of an interlocking series of Catch-22s.
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Re: Political Economy

Post by Dr. Medulla » 17 Nov 2017, 7:41pm

eumaas wrote:
17 Nov 2017, 3:10pm
I would watch the first and only the others if something was unclear.
Alrighty. Downloading that one right for later viewing.
It is an odd omission, but also the rise of neo-fascism has become more pronounced recently. These were recorded beforehand.
And it's not like it's something Marxists haven't considered. That was one of the key questions Marxists had to respond to after World War II—was Marx wrong that a crisis in capitalism would lead to socialism? And many intellectuals concluded, fuck no, the masses are dangerous monsters and the revolution must be placed in the hands of (huh) intellectuals. Never fucking mind that a revolution led by intellectuals like Lenin and Trotsky also led to a totalitarian state.
With the resource squeeze in effect, the ability of core countries to transition to social-democratic Keynesianism would be dependent upon superexploitation of the periphery/semi-periphery. But superexploitation itself causes a demand crisis as people don't have the means to consume. Neoliberalism saved core capitalists from profit squeeze by dismantling workers' rights and driving down wages only to precipitate a demand crisis in turn. They addressed that by heavily financializing the economy and driving demand through debt (although actually this process began before neoliberalism), but as we saw in 2008, debt-driven demand is destabilizing.
How familiar are you—and I mean the board more generally—with Fordism? The thumbnail version is that Gramsci observed that Henry Ford had, however crudely or unconsciously, understood that a structural problem with capitalism is that it produces more than can be consumed, leading to an accumulation of unsold goods. Production is cut until those goods are moved, which, spread widely enough, is a recession. The boom and bust cycle. Ford understood that he needed to create more customers, so he raised wages so that his employees would buy his cars. However, and here's the real key, how do you make sure the working class spend that money rather than save it for the next recession? You start to teach them not to worry and to enjoy the here and now of material luxury. Ford was an outlier amongst industrial titans, but into the 1930s onward, advertising and the federal government worked to encourage people to spend to get out of the Depression. After WWII, a grand bargain was struck whereby capital would forego maximizing profit by driving down wages. Instead, labour was allowed to enjoy more real income gains, which they were expected to spend. Organized labour would forego militancy and instead buy into capitalism to enjoy material luxuries. And government would be allowed by both groups to regulate and tinker to encourage growth and spending. So it was about capital reining in its interests while teaching labour to spend.

By the 1970s, capital withdrew from the deal (i.e., neoliberalism, post-Fordism), but consumers still adhere to the demands of consumption. With stagnating, if not declining real wages, our acceptance—our requirement—to consume pushes us to take on debt and to desperately accede to capital's ever more punitive measures to stay afloat. All of which isn't to suggest that we are to blame for our own misery, but part of the way out is to stop acting like we are in a culture of abundance (we are still, but environmental crisis will take care of that sooner or later) and return to a more modest culture of scarcity that has been the norm for almost all of human existence (which, again, will be thrust upon us). It's like preparing for winter—put up the storm windows and stop eating all the grain just because the silos are full. The nineteenth and twentieth centuries' growth should be seen not as culmination but aberration. This also seeks to put limits on the "production uber alles" rationale of capitalism. Not to say any of this is easy, maybe even feasible without first some kind of greater environmental and economic collapse, but to at least be aware that our own expectations of material luxury—to think that it isn't luxury—is feeding our own impoverishment. It necessarily requires thinking socially and not individually, to ask whether your personal desires are harmful to the much larger group. That's a lot of unlearning to work on. I'm necessarily skeptical.
Endut! Hoch Hech!

I feel that, had he lived, John Lennon would have loved Donkey Kong.

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