Colin Powell's Endorsement of Obama

Colin Powell’s Endorsement of Obama

The endorsement of Barack Obama by Colin Powell, retired General, Chairman of the Joint Chiefs of Staff under George I during the First Persian Gulf War, and Secretary of State during W’s first term of office, is very, very significant.

Powell speaks for a very large sector of the military and diplomatic leadership of US imperialism. Bush and his cronies have fired, forced out of office, and reassigned to nowhere the top echelons of generals, colonels and career diplomats of the post-Viet Nam era. Promoting syncophants in their places, and treating them in the same manner when they have not achieved the impossible (like winning in Iraq and Afghanistan.), Bush and friends have won the enduring enmity of the officer corps, and much of the diplomatic and spy corps. In the process they have gone a long way towards destroying the morale of the military, and to a real, but lesser, extent the diplomatic and spy corps.

Maverick McCain’s candidacy was supposed to heal the rift between the Republican Party and the military. Obviously, it has not.

Powell’s endorsement, cautious as it was in words, (either man would make a good president) has ended all talk about Obama not having the experience needed to lead imperialism. And it almost certainly has deepened the desperation of the McCain campaign.

The next two weeks should show us just how desperate they have become.

While stealing this election will be much more difficult than previous elections, especially since the Democrats seem to have mobilized a major effort to stop the theft of the election including an unprecedented mobilization of volunteers of all types – from hackers to lawyers, many Republican state officials will be under strong pressure to pull out all the stops to steal the election.

But how many of them will? What is happening to the morale within the Republican Party? How many Republicans are working over time to cover up their own tracks? None of them want to be the next Senator Ted Stevens, but certainly many of them could easily be the next to fall. Will they be sticking their necks out for a candidate who looks and acts a lot more like Mr. McGoo than Bart Maverick?

And, Sarah Palin’s witchhunting, mobilization of racism, and character assassination will escalate. No doubt to no effect in terms of changing the electoral equation, but potentially endangering the lives of Barack Obama, his family, and of all people of color during the election period.

More later, Anthony

Articles about the Bush Administration’s deconstruction of the military and diplomatic hierarchy

http://www.tomdispatch.com/post/28817/nick_turse_casualties_of_the_bush_administration

http://www.msnbc.msn.com/id/12313869/

http://thinkprogress.org/2006/04/13/the-chorus-grows-another-general-calls-for-rumsfelds-resignation/

http://www.rawstory.com/news/2006/Bush_replaces_top_general_in_Middle_0104.html

http://www.huffingtonpost.com/2008/06/02/general-ricardo-sanchezs_n_104664.html

The Great Crash of 2008: Notes On Origins, Part I

The below is a counterpart to Anthony Boynton's historical overview of capitalist crisis and overproduction. It seeks to begin an examination of the structural causes of the present crisis in light of what Marx had to say, and what he could not say, about financial capital in Part V of the third volume of Capital, a book that lately seems to be flying off the shelves: Booklovers turn to Karl Marx as financial crisis bites in Germany

Here I seek to throw down a few theoretical markers for analysis of the crisis. This is in no way an exhaustive analysis. The essential thesis is that unlike in Marx's time, when it was considered that money capital was loaned only to industrial capitalists and not to wage laborers, financial capital today has entered into direct relations with wage labor in the form of "consumer" credit of all types. Money capital, capital as commodity, possesses as a commodity both unitary and universal attributes - it is always a sum of money, the universal exchange equivalent - unlike all other commodities whose exchange value is of partial and particular origins. Therefore financial capital acts as the single universal social personification, or concrete universal instantiation, of capitalist social relations across the entire social spectrum - and that is why financial capital always bears a close relation to the capitalist state - but a direct relation to wage labor in the form of credit, in a moment of financial crisis, threatens to project the class struggle between wage labor and capital across the whole spectrum, including the political sphere via the relations to the state.

That is exactly what we are witness to right now.

Capital as a (particular) commodity, whose form is money capital, must be analyzed quite differently from (all) commodities as attributes of capital, and that is exactly what I am reading from Marx in the relevant chapters of vol. 3.

"Driving down the cost of production, basically speeding up workers and cutting wages and benefits, does not alleviate a crisis of overproduction. In fact it aggravates it by causing the market for consumer goods to shrink. It can however, maintain profitability for businesses as profits begin to fall in the early stages of a crisis of overproduction." (Boynton, not Marx :-)

I'd add to this that extension of credit to wages in the form of credit cards, auto loans and mortgage loans, i.e. 'consumer credit', as a means to address the overproduction of capital, has as its precondition precisely this stagnation or fall in real wages. This introduces some important contradictions that are critical to understanding how a crisis in consumer credit - involving quite literally hapless Mexican immigrants trying to buy into "the American Dream" on the south side of Stockton, California, just think of it! - acted as the detonator for a generalized financial meltdown:

1) Assuming the onset of an overproduction of capital - a chronic state until now - on the one hand financial capital has a positive interest in stagnating or declining real wages, and in particular in wages that fall below refurnishing the necessities of life as determined by the prevailing standard of living, as this provides a widening market for its product;

2) On the other hand real wages can never fall so low that they cannot service the interest on the credit required for the necessities of life.

3) Further, by extending credit directly to wages, the competition for credit by industrial capital is undercut and bypassed in two ways:

a) Simply because the individual wage earner exercises much less market leverage than the industrial capitalist, interest rates can be much higher for consumer credit than for industrial loans, raising the average rate of profit of the financial sector, thereby attracting more capital investment into this sector;

b) Because wages as the variable part of industrial capital must be sufficient to cover consumer loan interest, this becomes an increment to the total interest paid by industrial capitalists to financial capitalists, and a subtraction from demand available for wage goods, further exacerbating the overproduction of commodities in the long run in this sector and depressing profits here, in turn adding further downward pressure on real wage levels in this sector.

Note that finance capital does not cease to function as capital once put into circulation in the commodity form of consumer credit, as the interest becomes a component part of variable capital while the principle remains in the form of fictitious capital as a lien on labor power.

Marx states that there is no "natural rate of interest", no equilibrium rate of interest as there is with the (general) rate of profit, therefore there is no theoretical limit on the proportion of wages or gross profit absorbed as interest, only the practical limit of the real extent of wage or profit levels. This alone gives the financial capitalist a certain advantage in competition with the industrial capitalist for profits. Marx also states that the financial capitalist does not stand in direct relation to the capitalist labor process as does the industrial capitalist, however, Marx never had the occasion to analyze money capital extended in the form of of consumer credit directly to wages, as this phenomenon began emerging in mass form only in the early 20th century, with the Great Depression being one of the first financial crises with significant involvement of consumer credit, though this was not a detonator of that crisis. It is my thesis based on the above points that this does bring the finance capitalist into such a direct relation to the wage laborer as a component part of productive capital and is therefore a relation that is a direct form of the class struggle but, unlike the relation with the industrial capitalist, presents itself immediately as a total global relation between two social classes at the moment of crisis. Some obvious reform demands spring from this: cancellation of consumer debts, caps on interest rates, etc.

Here I will not go into other key dimensions of the "financialization of wages" such as in the form of retirement plans of privileged workers being funneled into the stock market, etc., as well as the whole consumer insurance sector It is more important to move to an analysis of the other characteristic pole of the present crisis, the vast financial universe of derivatives. For if the present tendency for wages to stagnate and fall to the point where a crisis in payment of consumer loan interest was unavoidable was the detonator for this crisis, the fuse to exploding much of the global banking system outside of Asia - including the so-called 'shadow banking system' of hedge funds and whatnot - was the packaging of these soon to not be performing consumer loans into mortgage backed securities (MBS) derivatives atop which was pyramided a second order of derivatives known as credit default swaps (CDS) - essentially insurance on the MBS - in themselves amounting to an approximately $65 trillion powder keg, a sum equal to the entire global GDP in 2007.

That is for another writing. Suffice to summarize that if ever a practical proof was presented of the critical role of the balance of forces in the class struggle, here in the form of the balance between wages and capital - capital and not simply profits - as the primary motor of capitalism, this is it.

Crises of overproduction

Crisis of overproduction of commodities and capital

“The Basic Theories of Karl Marx” Chapter 9, on “Marx’s Theory of Crises”. has to be one of the worst things Mandel ever wrote. He belittles the importance of the difference between crises of overproduction of commodities, and crises of overproduction of capital, as being essentially meaningless and irrelevant. (The passages are quoted below, along with the URL for the whole article.)

Mandel correctly notes that there are different forms of capital. Since commodities are on form of capital, he posits that a crisis of overproduction of commodities is a crisis of overproduction of capital, so why bother trying to figure anything else out!

Here is why.

A crisis of overproduction can occur in any particular sector of capitalism, and within a national or regional market. When there is a competitive market, not a monopoly or oligopolistic market, individual producers can not tell in advance how big of a market share they can win. All try to introduce economies of scale and scope if they have the financial capital available to invest and the creativeness to steal or invent new techniques, in the process the scale of production increases, and the total production exceeds the total demand.

You can have a crisis of overproduction of garlic in Gilroy, or shoes in Medellin.

When you approach a crisis of overproduction of goods or services (e.g. garlic or accounting), the rate of profit drops in that sector. Capital seeks higher profits, especially where it can achieve either monopoly profits or rents in addition to normal profits. Investment moves to sectors other than garlic or accounting services.

A generalized crisis of overproduction occurs when markets in all of the main productive sectors become saturated. At this point you also develop a crisis of overproduction of finance capital.

For the capitalist class there are several potential solutions: A) enlarge markets, historically by exporting and investing in other countries. B) create new markets, historically by developing new technology. C) enlarge markets by artificially expanding demand, especially through the extension of credit, military production, and other government subsidies (the New Deal). D. Regulate markets, including production and prices (also the New Deal, especially during WWII.)

Driving down the cost of production, basically speeding up workers and cutting wages and benefits, does not alleviate a crisis of overproduction. In fact it aggravates it by causing the market for consumer goods to shrink. It can however, maintain profitability for businesses as profits begin to fall in the early stages of a crisis of overproduction.

For individual capitalists there are other measures that can be taken: trying to drive your capitalist competitors into bankruptcy, for one.

And, if none of the above measures work, the only other solution for capitalism is to resolve the crisis of overproduction of capital by destroying capital. This means more than destroying fictitious capital and values through market crashes. It means closing factories, destroying “excess” commodities (also a New Deal policy), and if the crisis is bad enough destroying the factories and workers in a war. This was the solution resorted to between 1914 and 1945.

More later, Anthony

“The question of determining whether according to Marx, a crisis of overproduction is first of all a crisis of overproduction of commodities or a crisis of overproduction of capital is really meaningless in the framework of Marx’s economic analysis. The mass of commodities is but one specific form of capital, commodity capital. Under capitalism, which is generalized commodity production, no overproduction is possible which is not simultaneously overproduction of commodities and overproduction of capital (overaccumulation).

“Likewise, the question to know whether the crisis ‘centres’ on the sphere of production or the sphere of circulation is largely meaningless. The crisis is a disturbance (interruption) of the process of enlarged reproduction; and according to Marx, the process of reproduction is precisely a (contradictory) unity of production and circulation. For capitalists, both individually (as separate firms) and as the sum total of firms it is irrelevant whether more surplus-value has actually been produced in the process of production, if that surplus-value cannot be totally realised in the process of circulation. Contrary to many economists, academic and marxist alike, Marx explicitly rejected any Say-like illusion that production more or less automatically finds is own market.”

http://www.internationalviewpoint.org/spip.php?article289

Notes on the current crisis of capitalism

Notes on the current crisis of capitalism

The crisis of capitalism is moving from the esoteric realm of obscure derivatives into the real economy rapidly, and relentlessly.

In truth, its source has always been in the “real” economy: the financial sector is an extension of the real economy, the apex of the pyramid (should I say pyramid scheme?).

What we are at the beginning stages of is the first ever global general crisis of overproduction coupled with the first ever global general crisis of overproduction of capital.

Background

Capitalism as a world system entered into crisis at the end of the 19th century because its nationally limited markets were individually reaching crises of overproduction, and in a related process, crises of overproduction of capital. The obvious solution for these individual, but connected national crises, was to expand markets and investment beyond national borders. The attempts to do so led to World War I and World War II, and their consequences led to the Russian revolution and the great depression.

The crisis of the first half of the twentieth century was resolved, temporarily, by those cataclysmic historic events.

An enormous amount of both fixed and variable capital – human lives – was destroyed. National limitations to markets were also destroyed. The cold war system divided the world into two great economic zones: a capitalist market system dominated by the United States covering the Western Hemisphere, Europe, Africa, the East Asian Rim, and South Asia; and an isolated zone of planned economies stretching from Eastern Europe to China, and dominated by the Soviet Union.

Enormous advances in technology due to war related research and development opened gigantic new markets which had not previously existed – transistor radios to computers - and dramatically lowered costs of production and transportation in older markets. Markets grew to undreamt of size due to very rapid and continuous population growth resulting mostly from the green revolution and the wide spread use of antibiotics which dramatically cut mortality rates after WWII.

The new system was structured through a series of international agreements and organizations: the Bretton Woods Agreement, GATT (which evolved in the World Trade Organization) , the IMF, the World Bank, the United Nations, the European Coal and Steel Community (which evolved into the European Economic Community (EEC) and now the European Union.) and NATO.

All of these agreements in one way or another were undemocratically structured to give the United States of America predominance over all other countries. All of them depended in turn on the common fear of socialist revolution among the ruling capitalist classes of Europe and the United States. That fear was made palpable by the revolutionary victories at the end of the second world war, the continuous revolutionary turmoil in the post colonial world, and by the military power of the Soviet Union, its victories in the Second World War, and its development of nuclear weapons.

The social and political instability of this new global system of capitalism were enormous, especially in the immediate aftermath of World War II and in the post colonial world.

Imperialism could not control the processes which were unleashed especially in the countries which had been conquered and subjugated most recently by Japanese and German imperialism in Eastern Europe and East Asia. The Chinese revolution and the Red Army of the Soviet Union swept away imperialism, and temporarily established revolutionary dictatorships and planned economies.

In the dismantling of the British and French empires national and social revolutionary movements emerged and won partial complete or partial independence from imperialism, opening up the possibility of advancing further toward socialist revolution.

Ironically, the danger of revolution was a key political element in the revival of capitalism: it pushed the ruling classes of the world together behind the United States in forging a previously unimaginable political unity which made possible the dismantling of trade barriers, the establishment of the dollar (at first backed by gold) as the world currency, and the establishment of a world wide financial system.

This new structure, combined with the new technologies developed during World War II, combined with the dramatic reversal of the long term crisis of overproduction (i.e. destruction of war had destroyed both inventories and factories, reversing the imbalance of supply over demand and creating an imbalance of demand over supply to lead to a very long period of economic growth from 1946 to 1973.