Hegemony

2
Dec


 

By JERRY HARRIS

Race and Class

Abstract: The Russian invasion of the Ukraine is a powerful assertion of geopolitical power and conflict. But Russia’s nationalist and expansionary drive takes place within the context of transnational economic ties. Such ties help define the nature of the war, and both the Russian and western response. The contradictory pressures of nationalist desires conflicting with transnational integration is an underappreciated complexity of the war that this article will explore.

 Keywords: energy resources, finance capital, nationalism, oligarchy, Russian invasion, sanctions, transnational capitalist class, Ukraine.

 Introduction

The invasion of Ukraine is seen by most as a geopolitical conflict between the West and Russia. Nationalist ideologies and power competition do play a significant role, but such competition takes place within the context of transnational relations that also define the nature of the struggle. Unlike the invasion of Czechoslovakia, which took place during limited economic and cultural ties between the West and Soviet Union, the current war is deeply affected by mutual economic relationships between transnational capitalists and links between transnational corporations. Exploring how the contradictions between national and transnational elements structure the character of the war is the purpose of this article.

Global capitalism has gone through tremendous change over the past forty years, building a system of transnational integration characterised by global financial flows and production. This has profoundly changed a world built around nation-centric power. The emergence of the transnational capitalist class (TCC) reshaped domestic economies and social relations by restructuring state institutions and rules to serve the new forms of global accumulation. Major trade arrangements were ratified, banks bailed out, corporate taxes cut, transnational corporations promoted and social contracts undermined. And yet the old forms of power, habits, identities and privileges still fight to maintain their existence. This mixture of national structures overturned by transnational forces creates a powerful vortex of tensions.

In Russia, this process took place first under Yeltsin and then Putin, turning the country into a neoliberal state. As the new ruling class sought a capitalist identity outside the Soviet experience, it linked to its imperial past. As a result, Russian national concepts of power rooted in Tsarist imperialist expansion reasserted their influence, even as the oligarchy made use of transnational accumulation. Neither did Great Power concepts fully fade in the West, as NATO’s eastward expansion shows. As globalisation entered a sustained period of economic, environmental and social turmoil, transnational hegemony was opened to greater challenge, particularly from authoritarian state capitalism, which finds inspiration in fascism and empire. As the globalist project of a fully integrated economic world floundered under the weight of its own excess, nationalist ideology and power projections re-emerged.

Mike Davis hits home when he describes the Putin government as one that hates Lenin and the Bolshevik position on self-determination, a government drenched in Great Russian chauvinism and supported by the reactionary religious hierarchy of the Eastern Orthodox Church. A government that invites the backing of pan-Slavic neo-fascists, that idealises the Tsarist empire, with Putin himself an iconic hero of far-right nationalists throughout Europe and the US.[1]

And yet it is a government that has structured its economy to serve and benefit from transnational capitalism. That contradiction, between nationalist ideology and its transnational model of accumulation, is the Russian trap. And it works both ways, for Russia and for its global partners.

Global capitalism and Russia

In Russia, the creation of a TCC took place primarily through the privatisation of state assets, in combination with private/state ownership arrangements in energy and finance. The state did not represent a national capitalist class, nor was its primary concern building a modern industrial base. Rather, the state played a central role in integrating the key sectors of the Russian economy into global capitalism. Russian oligarchs also rushed to integrate into elite cultural and financial networks. They sent billions into offshore havens, spent hundreds of millions on London and New York real estate, lived on their yachts, and sent their children to elite western schools.

But the full political integration of the Russian state was stymied by the western architecture of power. NATO’s expansion eastward clashed with Russia’s intent to re-establish its own sphere of influence. This was an uneven process, unfolding over a period of three decades. The G7 became the G8 as Russia was given a seat at the elite table. But tensions never fully resolved. Political, social and environmental problems continued to sharpen, giving rise to security concerns and a renewal of nationalist rhetoric to regain state legitimacy. In turn, rivalries became more aggressive, and the balance between globalism and nationalism began to shift.

To explore the above process, we begin with Russia’s internal transformation and the creation of its transnational capitalist class.

Scholar Oleg Komolov describes the Russian economy primarily as a supplier of resources, with the TCC deeply integrated into global capitalism. He points out how the ruling class that emerged from the privatisation of state assets occupies primarily the role of an intermediate seller of Russian commodities on world markets and is not interested in improving the efficiency of the economy, developing competitive manufacturing industries and technological progress. [Moreover] the export economy was developed with large-scale participation of foreign capital in all sectors of the economy, the artificial devaluation of the ruble and net capital outflow to countries of the center.[2]

Between 1997 and 2017, the outflow of capital exceeded inflows, with offshore havens the destination for 70 per cent of capital exports. The two most prominent outflow years were during the global crash of 2008 and the Russian seizure of Crimea in 2014, with a combined total of $285 billion.[3] Outside the flight to offshore havens, Russian energy TNCs had made foreign direct investments of $335.7 billion by 2017.[4]

The Russian state and private oligarchy worked together in the outflow of capital, which reduces the amount of held dollars and keeps the value of the rouble low. In turn, this helps the export of fossil fuels and minerals. According to the World Bank, the rouble is one of the world’s most undervalued currencies.[5] Oil and gas make up 65 per cent of Russian exports, but minerals and wheat also play an important role. The state has supported this process by increasing its overseas holdings in US Treasury bonds from $8 billion to $164 billion between 2007 and 2013.[6]

Keeping the value of the rouble low meant undercutting investments in the modernisation of manufacturing. The results being high import prices for machinery and agricultural inputs, as well as high consumer prices for foreign goods. In 2017, machinery and equipment made up 47 per cent of imports, and chemical products 18 per cent.[7] Thus, a low-valued rouble drove up the cost of tractors, combines, transport and machine tools, fertilisers and chemicals – a typical pattern among transnational petro-states. Privileging globalist accumulation over the national market marked the Russian ruling class with a transnational character and strategy.

Another aspect of Russia’s integration was creating an attractive market for foreign speculative capital. During the 2005–08 financial frenzy, capital flowed into Russia, benefiting from liberalisation of currency regulations. During these years, transnational capitalists sank $325 billion into Russian corporations, with large amounts going to state-owned entities like Sberbank and the energy giant Gazprom. Among the biggest investors were financial giants JPMorgan, BlackRock and Pimco.[8] Loans were also made, reaching $400 billion from some of the biggest global banks including Citigroup, HSBC, BNP Paribas and Deutsche Bank. The benefits for finance capital were double: debt from loans and earnings from investments meant profits for transnational investors the world over. The outflow of profits over a twenty-year period reached $1.2 trillion, and taking on foreign liabilities certainly didn’t support the rouble.

Energy, transnational capital and sanctions

Key to the Russian economy, and indeed the world economy, are energy resources. Russia’s fossil fuel industry has been largely exempt from the sanctions in 2022, as it was in 2014. In both cases, transfer payments for energy continued to flow through the SWIFT computers, and in 2022 these were worth about $350 million per day. Between 24 February and 24 March 2022, Russia sold $19 billion in fossil fuels. The links between western oil majors and Russian TNCs deeply influences the limits and impacts of sanctions, and so deserves attention.

First, we can review the degree of joint ventures between Russian and transnational energy majors. Rosneft emerged as Russia’s largest oil producer when Putin dismantled Yukos, and sold its $90 billion in assets for just $2 billion. Western banks rushed to loan Rosneft $22 billion as it became Russia’s dominant energy company. Financial backing came from ABN Amro, Barclays, BNP Paribas, Citigroup, Goldman Sachs, JPMorgan and Morgan Stanley. Rosneft then raised $10.7 billion in an IPO on the London Stock Exchange with BP taking a 20 per cent stake. Other strategic investors included Petronas (Malaysia) and CNPC (China). Russian oligarchs joined in, with Roman Abramovich, Vladimir Lisin and Oleg Deripaska each investing $1 billion. As Hans-Joerg Rudloff, chairman of Barclays and Rosneft board member, noted, Russia was ‘on the track of international economic integration’.[9] In 2006 Rosneft turned east, joining with China’s Sinopec in a $13.7 billion buyout of TNK-BP’s Udmurtneft Oil. In a key deal after the 2014 imposition of sanctions, Rosneft signed a thirty-year contract with the state-owned China National Petroleum Corporation worth about $400 billion. Furthermore, Exxon had a $3.2 billion Arctic offshore drilling deal with Rosneft in which the Russian TNC obtained minority stakes in the Gulf of Mexico and oil fields in Texas. Rex Tillerson, chief executive of Exxon Mobile and future Secretary of State, received the Order of Friendship award from Putin in gratitude for Exxon’s commitment.[10]

Gazprom also has a significant level of transnational integration. In developing Shtokman, one of the world’s largest gas fields, Gazprom partnered with Total from France and StatoilHydro of Norway. Total has a close relationship with the Russians. The French oil major has investments in two other Russian oil fields, and a 16 per cent stake in Novatek, the country’s largest gas producer after Gazprom. The largest foreign investment project in Russia, the Sakhalin-2 oil field, involved the British and Japanese. Although Gazprom retains majority ownership, Shell held 27.5 per cent, Mitsui 15 per cent, and Mitsubishi 10 per cent.[11]

Overall, more than 400 foreign financial institutions have provided $130 billion to Russian energy companies, $52 billion in investments and $84 billion in credit. A total of 154 US financial companies hold almost half of these investments at $23.6 billion. JPMorgan is the largest with investments and loans of $10 billion. Other major investors include Qatar’s sovereign wealth fund with $15.3 billion invested in Rosneft. The UK was the third largest investor, where 32 financial institutions contributed $2.5 billion. Other important investors come from Italy, Netherlands, Norway, Switzerland, Japan and China.[12]

To understand how sanctions disrupted these transnational relations, we need to investigate sanctions from 2014 and 2022. In 2014, companies weren’t banned from conducting business with Russian state-owned energy giants, although banks were sanctioned from making loans. The policy allowed protection for transnational institutional investors. But the US did move to sanction Rosneft’s president, Igor Sechin. This prompted Jack Ma, founder of China’s Alibaba, and John J. Mack of Morgan Stanley, to resign from the Rosneft board; while Donald Humphreys, former chief financial officer of Exxon Mobil, and BP chief executive Bob Dudley continued to serve. As western sanctions tightened, they did cause some difficult problems, forcing Eni, Exxon and Statoil to withdraw from a $20 billion Rosneft Arctic exploration project. But to replace the loss of advance drilling technology, Rosneft took a 30 per cent stake in North Atlantic Drilling, a subsidiary of Seadrill, the world’s largest offshore driller controlled by Norway’s richest man, John Fredriksen. Rosneft also faced problems when sanctions cut access to foreign capital markets. To counteract the sanctions, it arranged a series of prepayment deals with some of the largest western oil traders including Glencore, Trafigura and BP. Furthermore, Rosneft bought Morgan Stanley’s global oil trading business, obtaining an international network of oil tank storage contracts, supply agreements and freight shipping contracts, as well as a 49 per cent stake in Heidmar, a manager of oil tankers. So, while the 2014 sanctions caused a number of real problems, Rosneft’s transnational relationships provided important avenues to avoid major disruptions.[13]

Overall, the 2014 sanctions did hurt Russia. FDI inflows fell from $69 billion in 2013 to $21 billion in 2014. But the Obama administration also faced stiff resistance not only across Europe, but in the US as well. Hostility to the sanctions came from the two most influential US business groups, the National Association of Manufacturers and the US Chamber of Commerce. Both lobbied and took out critical ads in national newspapers, insisting that sanctions should not hurt financial institutions that held significant Russian debt. Among the corporations who lobbied against the sanctions were Exxon Mobil, BP, American Petroleum Institute, Amway, Caterpillar, Chevron and GM.[14]

In implementing sanctions, the US believed Russia would view its global business ties as too valuable to lose, and so economic pressure would force a retreat from eastern Ukraine. But from the other side of the mirror, Putin believed global business’s ties to Russia were too valuable and would undercut western sanctions. In important ways both were right, and the same dynamic is at play in 2022. In the recent crisis the US Chamber of Commerce has again lobbied Congress arguing sanctions should be ‘as targeted as possible in order to limit potential harm to the competitiveness of U.S. companies’.[15]

The magnitude of the 2022 invasion has caused the current sanctions to be deeper and broader. What Russian Marxist Boris Kagarlitsky pointed out in 2014 is even more true today:

The situation confronting our elites … is more or less straightforward, they cannot enter actively into confrontation with the West without dealing crushing blows to their own interests, to their own capital holdings and to their own networks, methods of rule and way of life.[16]

But this is a two-way street – the West can’t sanction Russia without hurting itself, so the question becomes who hurts the most. For example, the world’s largest asset manager BlackRock took a loss of $17 billion on their Russian exposure.[17]

Because Russia is the main supplier of oil and gas to Europe, its energy industry is a major focus of new sanctions. ExxonMobil is beginning steps to exit the Sakhalin-1 project and cease operations it carries out on behalf of a consortium of Japanese, Indian and Russian companies. Shell also announced plans to leave Sakhalin and ‘withdraw all involvement in Russian hydrocarbons’.[18] BP has moved to offload its 20 per cent stake in Rosneft and may take a hit estimated at $25 billion. BP’s move comes after thirty years of joint venture. Additionally, the Singapore-based trading company Trafigura is threatening to opt out of its 10 per cent shareholding of Vostok Oil, a vast gas project led by Rosneft. And Norway’s Equinor will also begin to exit its joint ventures. But TotalEnergies, the large French transnational, while committing to no new investments, is holding on to its nearly 20 per cent of Novatek.

Yet none of these companies may end up leaving. Exxon, BP and Shell need to find someone to buy out their interests. That will not be easy in the present circumstances, and they may have to appeal to their Russian counterparts to take their shares. Furthermore, oil tankers continue to transport millions of barrels of oil from Russian ports, estimated to be worth $700 million per day. These include tankers from Greece, and those chartered by US oil giant Chevron.[19] And SWIFT payment transfers for energy continue at the above-mentioned $350 million per day. Consequently, for all the difficulties of the sanctions, global energy integration affords Russia significant amounts of capital, which helps to finance the war.

India’s case is yet another example of the complexity of transnational production. Obtaining about a 33 per cent discount from Russia, India’s oil imports have surged by 700 per cent.[20] Some of these imports go to Reliance Industries, which has the world’s largest refinery complex, and also to an affiliate of Rosneft, Nayara Energy. Using Russian crude, Indian refineries produce diesel and jet fuel, which is sold to Europe, whose imports from India have jumped. As Shell’s chief executive explained, oil substantially treated or changed loses it national origin. ‘We do not have systems in the world to trace back whether that particular molecule originated from a geological formation in Russia, [therefore] diesel going out of an Indian refinery that was fed with Russian crude is considered to be Indian diesel.’[21]

One particularly ironic aspect of transnational relations is that Russian gas flows through pipelines running through Ukraine to Italy, Austria and eastern Europe. Russia pays transport fees to the government, thus supplying funds to Ukraine even as the war raged. And, of course, gas reaching the EU means more money for Russia. It wasn’t until May 2022 that Ukraine stopped the Sokhranovka pipeline that operates from the Russian-controlled Luhansk region. The value of the gas is about $1 billion each month. But Sudzha, Russia’s main pipeline, is, at the time of writing, still in Ukrainian-held territory, allowed to operate, and expected to take on some of the lost capacity.

Another example of the complexity of transnational production is how the invasion impacted Rusal, the world’s second-largest aluminium producer, owned by Oleg Deripaska and listed on the Hong Kong market. Rusal has a joint venture with Australian mining giant Rio Tinto. But because of sanctions, their joint refinery, Queensland Alumina, will not ship products to Russia. The result is that Rusal had to halt production at its Nikolaev refinery located in Ukraine, which accounts for 23 per cent of its annual production. Nikolaev is one of the most modern refineries in the world and employs about 1,500 people. To make up the shortfall Rusal may divert production from its Aughinish refinery in Ireland to feed its Russian smelters.[22] In turn, that will reduce supplies in Europe where materials are already short. The end result is higher unemployment in Ukraine, higher prices in Europe, and a lower stock price for Rusal.

Data compiled by the Yale School of Management reported 253 TNCs are making a clean break with Russia, essentially leaving no operations behind. Some of these include Uber, Shell, Salesforce, Reebok, McKinsey, Nasdaq, eBay, Delta, Deloitte, BP, BlackRock, American Airlines and Alcoa. Another 248 companies have suspended their operations without permanently exiting or divesting. Among these are Adidas, American Express, Burger King, Chanel, Coca-Cola, Dell, Disney, GM, Hewlett Packard, Honeywell, Hyundai, IBM, McDonalds, Mastercard, Nike, Oracle, Starbucks, UPS, Visa and Xerox. Some seventy-five companies have suspended a significant portion of their business. These include Caterpillar, John Deere, Dow, GE, Goldman Sachs, JPMorgan, Kellogg’s, Pepsico and Whirlpool. Pausing new investments are ninety-six companies. This is different from JPMorgan and Goldman Sachs who, while suspending some operations, continue to snatch up depressed Russian securities at very low prices. Among those pausing new investments are Cargill, Colgate-Palmolive, Credit Suisse, Danone, Johnson & Johnson, Siemens and Unilever. The total so far is 672 companies taking various forms of action. Yale reported 162 companies staying the course, including Acer, Alibaba, International Paper, Koch, and Lenovo.[23]

Some funds not appearing in the Yale report include the important financial centres in Singapore, which has halted any new economic activity with four major Russian banks. And Singapore’s large sovereign wealth funds, which have about $6 billion invested in Russia, have also suspended activity.[24] Two of China’s largest state-owned banks are limiting loans for purchases of Russian commodities.[25] The New Development Bank, established by Russia, China, Brazil and South Africa, put new transactions on hold. And the Asian Infrastructure Investment Bank, whose major shareholder is China, stopped its projects in Russia and Belarus. As of the middle of March 2022, there were more than 3,600 sanctions on Russian individuals and companies.

Table 1: Estimated and potential losses of companies leaving Russia[26]

Companies Leaving Russia

Estimated and Potential Loss (US$ million)

BlackRock $17,000
Bank of America $700
BNY Mellon $200
Citigroup $1,900
Ericsson $95
Goldman Sachs $300
JPMorgan $1,000
Nokia $109
Shell $5,000
Société Générale $3,300
Volvo $423

 

The rush to boycott Russia reminds one of the corporate rush to endorse Black Lives Matter; essentially a marketing strategy to stay in front of popular politics. And while the costs are disruptive, transnational corporations are large enough to swallow such losses. For example, as the price for oil rose, Shell increased its early quarterly profits by 300 per cent to $9.1 billion – already enough to cover its projected $5 billion loss. Most of these sanctions will only harm the Russian people without having any real effect on the ruling class or the invasion. Russian citizens are already experiencing a dramatic decline in purchasing power and may soon face growing unemployment and a lack of consumer goods. The larger developing crisis is in world food supplies as Russia and Ukraine export a significant amount of the world’s wheat, corn, barley and sunflower oil. Shortages and price increases will hit the poor in the Global South the hardest.

Financial institutions and the TCC

Because of the integration of the global financial system, Russian capital was exposed to severe sanctions in 2022 that constituted a geo-economic break. There has been a general belief in the sanctity of foreign reserves. The US often talks about a ‘rules-based world order’. This includes open capital markets and accounts, deeply integrated financial markets, and benchmark assets in US dollars. Putin counted on all of this to keep the Russian economy functioning during the invasion. But seven of the largest Russian banks have been removed from the SWIFT interbank system. This severely limits the ability to pay for imports or receive payment for exports, as SWIFT is used to link funds for transnational deals. Russia’s central bank also kept about half its $630 billion dollars and euro reserves in foreign institutions residing in London, New York, Paris and Tokyo, and from $86 to $140 billion in Chinese bonds. Except for the Chinese holdings, these funds are now frozen, causing the rouble to lose about 40 per cent of its value, although with capital controls the rouble regained most of its value. Moreover, the collapse of Russian corporate stocks triggered the multi-week closure of the Russian stock market. And both Moody and Fitch downgraded Russian sovereign debt to ‘junk’. Russia is moving towards its first foreign currency debt default in one hundred years, but, as of May 2022, was still making payments using money from energy exports.

The severity of the economic sanctions is a radical step. Even during the second world war, relations between the Bank of England and the Reichsbank continued into the 1940s. And the Bank of International Settlements continued to allow the German central bank access to its clearing and settlement facilities throughout the war.

As Dominik Leusder points out:

More than any armed conflict, the current international monetary system has laid bare the folly of this romantic liberal portrait of globalisation. The sanctions against Russia are the clearest manifestation yet of a distinct undercurrent of financial globalisation … the West’s ability to coerce states has only increased as a function of their integration [so] as Russia became a central node [of] the global economy, it became more vulnerable.[27]

 

And yet western investors and companies are also in danger, as sanctions over the transfer of funds may mean Russia defaults on billions in loans. Facing such problems, US authorities gave the okay to JPMorgan to process interest payments due on dollar bonds from the Russian government. Citigroup is another payment agent for about fifty corporate bonds tied to Russian TNCs like Gazprom and MMC Norilsk Nickel. [28] Furthermore, the important financial institution Gazprombank is spared from sanctions and continues to be a conduit for commodity transactions. For example, working with Citibank it helped Brazil purchase Russian fertiliser, which is not sanctioned. Thus, the flow of capital continues, at least in part, despite sanctions.

Again, Leusder provides insightful analysis:

As globalization underwrote Putin’s militarism and his increasingly hostile posture toward Russia’s neighbors, it simultaneously rendered the country’s economy fatally reliant: on the net demand from other countries such as Germany and China; on imports of crucial goods such as machinery, transportation equipment, pharmaceutical and electronics, mostly from Europe; on access to the global dollar system to finance and conduct trade … This is one way to construe the deceptively simple insight of Henry Farrell and Abraham L. Newman’s theory of weaponized interdependence: the logic of financial globalization that generated Russia’s trade surplus and gave Putin room to maneuver also provided the economic and financial weaponry that was turned against him.[29]

Thus, a nationalist strategy to reconstitute the Russian empire, using the profits and ties that come with globalisation, is undercut by the contradiction of those same ties and relationships.

Weaponised interdependence is a good description of the financial markets in metals. Alongside Russian fossil fuels are its exports of metals, including copper, alumina and nickel, which is used in making stainless steel and batteries for electric cars. Here are the complications of transnational capitalism. Tsingshan Holding Group in China is the world’s largest nickel producer, China’s second largest steel producer, and is involved in electric vehicle batteries. Tsingshan made an enormous $3 billion bet shorting the price of nickel, counting on its own increased production in creating an abundance of supplies. This bet was made on the London Metal Exchange (LME), which is a unit of Hong Kong Exchanges and Clearing Limited. With the Russian invasion, although nickel was not sanctioned, fear took hold of the market and prices jumped 250 per cent. The short bet based on lowering cost was a disaster. Trade chaos took hold, leaving Tsingshan with two choices. Either deliver tons of nickel or pay for margin calls, which means coming up with the cash or securities to cover potential losses. But Tsingshan only held 30,000 tons of its 150,000-ton bet. The remainder was held by JPMorgan, BNP Paribas, Standard Chartered and United Overseas Bank. On the cusp of a global financial disaster, LME suspended trading and retroactively cancelled $3.9 billion of trades, blaming banks for preventing efforts to create greater transparency that could have revealed the interconnected problem.[30] Consequently, the Russian invasion set off a financial crisis that punished transnational capitalists that have no part in the war.

Facing sanctions, oligarchs can’t be happy with the war, and a number have stated their opposition. Nevertheless, the global financial system has been built to safely hide their money, as well as the wealth of others in the TCC. It’s estimated that oligarchs have hidden about half their wealth offshore, amounting to some $200 billion. Somewhere between 10,000 to 20,000 Russians hold more than $10 million each in offshore assets and havens.[31] Still, that is significantly less than their American counterparts who have an estimated $1.2 trillion in offshore tax havens. Much of the Russian money is in US, UK and EU assets. Transparency International has estimated about $2 billion just in UK property.[32]

But much of this wealth is difficult to discover because the TCC has structured international laws to hide wealth in complex trusts and shell corporations.[33] Global accounting firms PwC, KPMG, Deloitte and EY helped oligarchs move money to offshore shell companies for years before currently withdrawing services. Rosneft, VTB, Alfa Bank, Gazprom and Sberbank have been represented by leading US law firms, including White & Case, DLA Piper, Dechert, Latham & Watkins and Baker Botts. And Baker McKenzie, one of the world’s largest law firms, continues to represent some of Russia’s largest companies, including Gazprom and VTB.[34] Concord Management specialised in serving ultra-wealthy Russians, helping them invest in hedge funds, private equity and real estate. Since 1999, Concord has channelled billions to BlackRock, Carlyle Group and others. Wall Street banks such as Credit Suisse, Goldman Sachs and Morgan Stanley often acted as intermediators, linking Concord to hedge funds.[35] Such well-worn networks tie the Russian TCC to global capitalists and financial institutions in a mutually beneficial relationship, and creates a shared culture that exalts the privileges of wealth and common ideas about how the world economic system works.

Capitalists the world over make use of sophisticated accountants, bankers and lawyers to hide their assets. An agent will set up an offshore shell company in a country with little transparency. This company then creates more shells in other low-transparency jurisdictions – about forty-two exist across the world, including the US states of Delaware and South Dakota. This allows the ‘ultimate beneficial owner’, often unknown, to have multiple bank accounts and the ability to move money and invest without any scrutiny. Government investigators in both the US and the UK regularly ignore suspicious banking activity. In 2018, the EU passed regulations demanding access to information on the ownership of European companies nested in shell companies. Yet in 2022 no such registry exists. Congress passed a transparency law in 2021 with a $63 million budget, but never provided the money to the Treasury Department. Consequently, the effort to sanction oligarchs is undercut by the global financial system built to the demands of the TCC, of which Russian capitalists are members. While some pressure is being directed on the oligarchs, the system of hidden cross-border capital flows is too valuable to end, allowing the Russian TCC to escape greater harm.

A good example of how shell corporations function is the effort to sanction Arcady Rotenberg. Rotenberg is worth about $3 billion with an estimated $91 million invested in the US and a $35 million mansion outside London, bought through an entity in the British Virgin Islands. He has at least 200 companies located across dozens of countries. Even after coming under sanctions in 2014, Rotenberg became the owner of two additional companies located in Luxembourg, well known as a haven for billionaires. Although senate investigators found countless bank filings on suspicious Rotenberg activities, none of them have been investigated by the Treasury Department.

As Cihan Tuğal reminds us, Putin and his cronies

are a solid part of world capitalism, and their apparently insane actions are intended to produce a better place at the table. They want to be recognized as legitimate imperialists in the new, post-Wilson and post-Lenin world of the 21st century … [Putin] is not only serving his ego, but a capitalist class fostered by post-1991 reforms, which were selective appropriations of free market ideas. The gang of cronies is not Putin’s creation alone. It is an outcome of transnational dynamics. This class is hungry for markets, and it cannot help but look for ways to burst out of Russia.[36]

German/Russian economic relations

Moving from a picture of transnational markets, industries and finance, we can explore the specific relationship between Germany and Russia. Germany as the largest European economy is also the most integrated with Russia. For Russia, it’s their most important economic partner alongside China. In 2021, German exports to Russia were worth more than $28.4 billion, and it invested a further €25 billion in operations.[37] Germany still depends on Russia for about 55 per cent of its natural gas, 35 per cent of its oil, and half its coal.

Before 2014, there were 7,000 German companies inside Russia representing some of the largest TNCs in the world, such as Adidas, BASF, Siemens, Volkswagen, Opel and Daimler. On the financial side, all major German commercial banks were active in Russia. In terms of oil and gas, Germany’s biggest energy group Eon was the largest foreign shareholder in Gazprom, which, alongside BASF, was building the $6.6 billion Baltic Sea pipeline. The Germans held 20 per cent of the Nord Stream joint venture, with former chancellor Gerhard Schröder as chairman and Matthias Warnig of Dresdner Bank its chief executive. Even after the seizure of Crimea, Siemens CEO Joe Kaeser confirmed its commitment to Russia to sell trains, energy infrastructure, medical technology and manufacturing automation technology. Cross-border deals also continued, with RWE selling its oil and gas subsidiary to Russia’s LetterOne for over $7.5 billion. But, with the 2014 sanctions, German trade with Russia dropped by 35 per cent, and German firms investing in Russia dropped to just under 4,000 by 2020.[38]

Now the invasion of Ukraine has shaken the German/Russian relationship in a very significant manner, particularly in the auto and energy industries. Wintershall Dea, an oil and gas TNC, will stop payments to Russia and write off its €1 billion investment in Nord Stream 2. Additionally, it will not receive revenues from its Russian operations, which accounted for about 20 per cent of its 2021 profits. The company issued a statement on the turmoil caused by the invasion lamenting,

What is happening now is shaking the very foundations of our cooperation. We have been working in Russia for over 30 years … We have built many personal relationships – including in our joint ventures with Gazprom. But the Russian war of aggression against Ukraine marks a turning point.[39]

Nord Stream 2 has been a contentious issue between the US and Germany for years. The pipeline running through the Baltic goes directly to Germany. The US has pressured Germany to end the project, but Angela Merkel refused to do so. The project, worth $11 billion, is registered as a Swiss firm whose parent company is Gazprom. Gazprom owns the pipeline and paid half the costs, the rest shared by Shell, Austria’s OMV, France’s Engie, and Germany’s Uniper and Wintershall DEA.[40] The invasion has prompted Germany to halt the project. The suspension of Nord Stream 2 may not be permanent, but even a temporary suspension is a huge shift.

Russia exports fifty-six billion cubic metres of liquefied natural gas to Germany yearly. Inside Germany, Gazprom owns and operates thousands of miles of pipeline, key storage facilities, and the largest underground storage tank for natural gas in western Europe. Russia also supplies German refineries with a third of their oil, a number with long-term contracts that Russia is not willing to cancel. Particularly ironic are the weapons sent by the German government to Ukraine that use steel produced in German factories powered by coal coming from Russia. As Putin has stated:

Let German citizens open their purses, have a look inside and ask themselves whether they are ready to pay three to five times more for electricity, for gas and for heating … You can’t isolate a country like Russia in the long run, neither politically nor economically. German industry needs the raw materials that Russia has. It’s not just oil and gas, it’s also rare earths. And these are raw materials that cannot simply be substituted.[41]

Turmoil has also hit the auto industry. Volkswagen, Mercedes-Benz and BMW halted production in Russia, and also suspended all vehicle exports. But the invasion has had an even bigger impact because of the coordination of production between Ukraine and European auto companies. With its low labour costs and educated workforce, Ukraine became a manufacturing centre of systems which connect electronic components, like tail lights and car entertainment systems. The work, done by hand, requires a large number of skilled workers. The fighting brought production to a sudden halt, and within days the lack of parts shut down European factories. BMW shut several plants in Germany, Austria and Britain, while VW was brought to a standstill at multiple locations, including its main site in Wolfsburg. Electric vehicle production at Zwickau stopped, including its SUV exports to the US, and Porsche idled manufacturing the Cayenne sport utility vehicle in Leipzig. As Jack Ewing noted:

No car can operate without wiring systems, which are often tailor-made to specific vehicles. So-called wiring harnesses are among the first components to be installed in a new vehicle, and their absence brings assembly lines to a standstill.[42]

Furthermore, Ukraine is also a major source of neon, a gas used for high-performance lasers required for production of scarce semiconductors, adding more woes to the industry.

None of these economic disruptions are welcomed by the TCC. But the German government has taken a major step away from its previous positions. At first opposed to banning Russia from SWIFT, and refusing to send arms to Ukraine, it has now reversed on both those issues. And the sizeable increase in its military budget surprised everyone. Although transnational links are deep, for now geopolitical tensions are riding roughshod over economic concerns. But such concerns have not gone away. The New York Times observes that ‘multiple cracks’ have already occurred over ‘lost trade, higher energy prices, slimmer profits and lower economic growth’, as well as lower employment.[43] As Martin Brudermüller, the chief executive of the chemical giant BASF stated, ‘Cheap Russian energy has been the basis of our industry’s competitiveness’.[44] And again, ‘Do we want to blindly destroy our entire national economy? What we have built up over decades?’[45] What is true for BASF is true for the German economy, whose success is built upon cheap gas from Russia and exports to China.

Conclusion

There are a number of questions not explored in this article. NATO’s eastward expansion, Great Russian chauvinism, fascist forces in both Russia and Ukraine, the meaning of independence and self-determination, US hypocrisy on foreign interventions, China’s role, and growing debates within the Left over the war. All these topics already have a growing and substantial body of literature. Also, events continue to rapidly develop and so the article has some time limitations. But the deeper issues on the intersections between national geopolitics and transnational economics, and how the resulting contradictions affect the war, will continue. What is clearly evident is that global capitalism has plunged the world into yet another crisis. A crisis that ignores a pandemic that threatens the health of every human on the planet, and an environmental crisis that threatens every species. The failure is staggering in its ignorance.

What the new global configuration will look like is difficult to tell. Much depends on how the conflict ends. A long-term occupation will freeze Russia’s transnational links, a rapid conclusion may mean the easing of sanctions. The invasion is a further deconstruction of the global capitalist system built over the past forty years of neoliberal hegemony. But there are still many trillions of dollars in cross-border accumulation, and global assembly lines continue to churn out commodities in a coordinated system of production and trade. The current problems in logistics and supplies are not because of too little demand, but because of too much, with the infrastructure of ports, shipping and transportation actually too limited. Such problems might call for an expansion of globalisation, which is at the heart of China’s Belt and Road strategy. But economic, political and social disruptions cause states to look to their own national security. As a result, the contradictions between national and transnational forces continue to be the nexus for world events, changing the balance of forces into new configurations of struggle.

This complex relationship between nationalism and globalism needs to be understood through historical materialism, which defines the world as a continual process of movement. Marx saw everything in motion – production, distribution, environmental metabolic relationships, the class struggle, and all human interactions. Change was driven by the balance between opposing forces, and the results were defined by the power between the aspects. How much of the old that remained, and how much of the new that was asserted, continually set the conditions for the movement to continue. This process of motion and change results in contradictions unfolding in many different forms. There is no historic queue in which socialism waits its turn to appear at the front of the line.

In the current capitalist world, neither nation-centric nor transnational relationships exist in isolation from the other. They exist in the same institutions and continually define and determine each other within a changing balance of forces. This unity of opposites in tension and conflict is what produces the historic transformation towards a new synthesis. No outcome is predetermined, but produced by the dynamic itself. Consequently, what aspects of nation-centric relationships survive or re-emerge depend on the agency of political struggle. Under pressure of globalist economic and environmental crisis, nationalist antagonisms have rematerialised, but within the context of transnational relationships. Globalisation didn’t create the ‘end of history’ because the past continues to exist in the present.[46]

We can see this contradiction in the balance between national and transnational forces in the Russian invasion. A balance in which nationalism and inter-state conflict has grown stronger as the forty-year hegemony of neoliberal globalisation has faced a series of economic, environmental and social crises. As the balance of power shifts, aspects of the old system reassert themselves, but deeply affected and redefined by the changes globalisation engendered. Old ideas and conflicts may re-emerge, yet they are never the same, but contextualised through the new forces that have asserted themselves. So, in analysing the Russia/Ukraine/NATO conflict, we must be careful not to place it in the world of the 1960s, but a world deeply restructured by transnational capitalism.

References

 Jerry Harris is national secretary of the Global Studies Association of North America. He is the author of over 100 journal and newspaper articles, and his latest book is Global Capitalism and the Crisis of Democracy (Atlanta, GA: Clarity Press, 2016).



[1] M. Davis, ‘Thanatos triumphant’, New Left Review (Sidecar), 7 March 2022.

[2] O. Komolov, ‘Capital outflow and the place of Russia in core-periphery relationships’, World Review of Political Economy 10, no. 3 (2019).

[3] Komolov, ‘Capital outflow’.

[4] UNCTAD (United Nations Conference on Trade and Development), 2017 Foreign Direct Investment: Inward and Outward Flows and Stock, 1970–2016 (NY: UNCTAD, 2017).

[5] World Bank, ‘PPP conversion factor, GDP (LCU per international $)’, 11 October 2018, https://data.worldbank.org/indicator/pa.nus.ppp.

[6] US Department of Treasury, ‘Major foreign holders of Treasury securities (in billions of dollars)’, 9 July 2019, http://ticdata.treasury.gov/Publish/mfh.txt.

[7] Federal Customs Service of the Russian Federation, ‘Foreign trade of the Russian Federation on Goods, Federal Customs Service of the Russian Federation’, 27 November 2018, http://www.customs.ru/index.php?option=com_newsfts&view=category&Itemid=1978.

[8] L. Thomas Jr, ‘Foreign investors in Russia vital to sanctions debate’, The New York Times, 17 March 2014, https://dealbook.nytimes.com/2014/03/17/foreign-investors-in-russia-vital-to-sanctions-debate/.

[9] S. Wagstyl, ‘Russian boom will end in pain, says banker’, Financial Times, 24 April 2007, p. 5.

[10] D. Filipov, ‘What is the Russian Order of Friendship and why does Rex Tillerson have one?’, The Washington Post, 13 December 2016, https://www.washingtonpost.com/news/worldviews/wp/2016/12/13/what-is-the-russian-order-of-friendship-and-why-does-trumps-pick-for-secretary-of-state-have-one/.

[11] C. Chyong and V. Tcherneva, ‘Europe’s vulnerability on Russian gas’, European Council on Foreign Relations, 17 March 2015, http://www.ecfr.eu/article/commentary_europes_vulnerability_on_russian_gas.

[12] D. Carrington, ‘UK and US Banks Among Biggest Backers of Russian ‘Carbon Bombs”, Data Shows’, The Guardian, 24 August 2022. https://www.theguardian.com/environment/2022/aug/24/uk-and-us-banks-among-biggest-backers-of-russian-carbon-bombs-data-shows.

[13] J. Harris, Global Capitalism and the Crisis of Democracy (Atlanta, Clarity Press, 2016).

[14] Open Secrets, ‘Clients lobbying on H.R. 5859: Ukraine Freedom Support Act of 2014’, https://www.opensecrets.org/federal-lobbying/bills/summary?cycle=2021&id=hr5859-113.

[15] H. Tabuchi, ‘How Europe got hooked on Russian gas despite Reagan’s warning’, The New York Times, 23 March 2022, https://www.nytimes.com/2022/03/23/climate/europe-russia-gas-reagan.html.

[16] B. Kagarlitsky, ‘Crimea annexes Russia’, LINKS International Journal of Socialist Renewal, 9 April 2015, http://links.org.au/node/3790.

[17] Daily Business Briefing, ‘Here’s how much it is costing companies to leave Russia’, The New York Times, 11 April 2022.

[18] S. Reed, ‘The future turns dark for Russia’s oil industry’, The New York Times, 8 March 2022, https://www.nytimes.com/2022/03/08/business/russian-oil-industry.html.

[19] H. Tabuchi, ‘Citing a Chevron tanker, Ukraine seeks tougher restrictions at Russian ports,’ The New York Times, 16 March 2022; I. Ouyang, ‘LME nickel mayhem: London to resume trading after Chinese ‘Big Shot’ Tsingshan lines up bank credit to forestall market chaos over its short positions’, South China Morning Post, 15 March 2022, https://www.scmp.com/business/banking-finance/article/3170570/lme-resume-nickel-trading-after-chinese-short-seller; J. Farchy and M. Burton, ‘LME boss says banks are partly to blame for nickel short squeeze’, Bloomberg, 18 March 2022, https://www.bloomberg.com/news/articles/2022-03-18/lme-boss-says-banks-are-partly-to-blame-for-nickel-short-squeeze.

[20] H. Tabuchi and B. Migliozzi. ‘A tanker’s giant U-turn reveals strains in the market for Russian oil’, 2 April 2022, The New York Times, https://www.nytimes.com/2022/04/02/climate/oil-tankers-russia.html.

[21] S. Reed, ‘Shell reports a record $9.1 billion profit’, The New York Times, 5 May 2022, https://www.nytimes.com/2022/05/05/business/shell-earnings-record-profit.html

[22] E. Ng, ‘Ukraine conflict: Hong Kong-listed aluminium giant Rusal’s shares plunge after Australia bans export of key materials to Russia’, South China Morning Post, 21 March 2022, https://www.scmp.com/business/article/3171224/ukraine-conflict-hong-kong-listed-aluminium-giant-rusals-shares-plunge.

[23] J. Sonnenfeld and S. Tian, ‘Some of the biggest brands are leaving Russia. Others just can’t quit Putin. Here’s a list’, The New York Times, 7 April 2022, https://www.nytimes.com/interactive/2022/04/07/opinion/companies-ukraine-boycott.html.

[24] Sovereign Wealth Fund Institute (SWFI), ‘GIC sovereign wealth fund and Temasek turn their backs to Russia over Ukraine invasion’, 7 March 2022, https://www.swfinstitute.org/news/91630/gic-sovereign-wealth-fund-and-temasek-turns-their-backs-to-russia-over-ukraine-invasion.

[25] Bloomberg, ‘Ukraine crisis: crude oil price soars as sanctions on Russia spur fear of a global energy crisis’, South China Morning Post, 28 February 2022, https://www.scmp.com/business/commodities/article/3168654/ukraine-crisis-crude-oil-price-soars-sanctions-russia-spur.

[26] Daily Business Briefing, ‘Here’s how much it is costing companies to leave Russia’, The New York Times, 11 April 2022.

[27] D. Leusder, ‘The art of monetary war’, 12 March 2022, https://www.nplusonemag.com/online-only/online-only/the-art-of-monetary-war/.

[28] Bloomberg, ‘Russia default averted for now as JPMorgan processes bond payments’, 17 March 2022, https://www.businesslive.co.za/bloomberg/news/2022-03-17-russia-default-averted-for-now-as-jpmorgan-processes-bond-payments/.

[29] D. Leusder, ‘The art of monetary war’.

[30] I. Ouyang, ‘LME nickel mayhem’.

[31] R. Reich, ‘We aren’t going after Russian oligarchs in the right way. Here’s how to do it’, RSN.org, 9 March 2022, https://www.rsn.org/001/we-arent-going-after-russian-oligarchs-in-the-right-way-heres-how-to-do-it.html.

[32] Transparency International UK, ‘Stats Reveal Extent of Suspect Wealth in UK Property and Britain’s Role as Global Money Laundering Hub, 18 February 2022, https://www.transparency.org.uk/uk-money-laundering-stats-russia-suspicious-wealth.

[33] M. Apuzzo and J. Bradley, ‘Oligarchs got richer despite sanctions. Will this time be different?’, The New York Times, 16 March 2022, https://www.nytimes.com/2022/03/16/world/europe/russia-oligarchs-sanctions-putin.html.

[34] M. Goldstein, K. P. Vogel, J. Drucker, M. Farrell and M. McIntire, ‘How western firms quietly enabled Russian oligarchs’, The New York Times, 9 March 2022, https://www.nytimes.com/2022/03/09/business/russian-oligarchs-money-concord.html.

[35] M. Goldstein and D. Enrich, ‘How one oligarch used shell companies and Wall Street ties to invest in the U.S.’ The New York Times, 21 March 2022, https://www.nytimes.com/2022/03/21/business/russia-roman-abramovich-concord.html.

[36] C. Tuğal, ‘Putin’s invasion: imperialism after the epoch of Lenin and Wilson’, LeftEast, 6 March 2020, https://lefteast.org/putins-invasion-imperialism-after-the-epoch-of-lenin-and-wilson/.

[37] M. Eddy, ‘For German firms, ties to Russia are personal, not just financial’, The New York Times, 6 March 2022, https://www.nytimes.com/2022/03/06/business/germany-russia-companies.html.

[38] M. Eddy, ‘For German firms’.

[39] M. Eddy, ‘For German firms’.

[40] J. Mason, ‘U.S. slaps sanctions on company building Russia’s Nord Stream 2 pipeline’, Reuters, 23 February 2002, https://www.reuters.com/business/energy/us-plans-sanctions-company-building-russias-nord-stream-2-pipeline-cnn-2022-02-23/.

[41] K. Bennhold, ‘The former Chancellor who became Putin’s man in Germany’, The New York Times, 23 April 2022, https://www.nytimes.com/2022/04/23/world/europe/schroder-germany-russia-gas-ukraine-war-energy.html.

[42] J. Ewing, ‘Car industry woes show how global conflicts will reshape trade’, The New York Times, 7 March 2022, https://www.nytimes.com/2022/03/07/business/cars-russia-china-trade.html.

[43] K. Bennhold and S. Erlanger, ‘Ukraine war pushes Germans to change. They are wavering’, The New York Times, 12 April 2022, https://www.nytimes.com/2022/04/12/world/europe/germany-russia-ukraine-war.html.

[44] K. Bennhold and S. Erlanger, ‘Ukraine war pushes’.

[45] M. Eddy, ‘Why Germany can’t just pull the plug on Russian energy’, The New York Times, 5 April 2022, https://www.nytimes.com/2022/04/05/business/germany-russia-oil-gas-coal.html.

[46] J. Harris, Global Capitalism.

Category : Capitalism | Globalization | Hegemony | Russia | Theory | Blog
27
Feb

Click HERE for a closeup view of the graphic.

By Carl Davidson

Feb. 27, 2022

“If you know the enemy and know yourself, your victory will not stand in doubt; if you know Heaven and know Earth, you may make your victory complete.”

 –Sun Tzu, The Art of War

Successful strategic thinking starts with gaining knowledge, in particular gaining adequate knowledge of the big picture, of all the political and economic forces involved (Sun Tzu’s Earth) and what they are thinking, about themselves and others, at any given time. (Sun Tzu’s Heaven). It’s not a one-shot deal. Since both Heaven and Earth are always changing, strategic thinking must always be kept up to date, reassessed and revised.

This statement above was part of the opening to a widely circulated article I wrote four times now, about two, four, six, and eight years ago. With the upcoming November 2022 elections, it’s time to take my own advice again and do another update. The electoral strategic terrain is constantly changing, and we don’t want to be stuck with old maps and faulty models.

In the earlier versions, I suggested setting aside the traditional ‘two-party system’ frame, which obscures far more than it reveals, and making use of a ‘six-party’ model instead. I suggested that the new hypothesis had far more explanatory power regarding the events unfolding before us. I still like this hypothesis.

Some critics have objected to my use of the term ‘party’ for factional or interest group clusters. The point is taken, but I would also argue that U.S. major parties, in general, are not ideological parties in the European sense. Instead, they are constantly changing coalitions of these clusters with no firm commitment to program or discipline. So I will continue to use ‘parties,’ but with the objection noted. You can substitute ‘factions’ if you like. Or find us a better term.

For the most part, the strategic picture still holds. The ‘six parties’, under two tents, were first labeled as the Tea Party and the Multinationalists under the GOP tent, and the Blue Dogs, the Third Way New Democrats, the Old New Dealers, and the Congressional Progressive Caucus, under the Democratic tent. We had three ‘parties’ under each tent in the second and following versions.

There are still a few minor players outside of either tent—the Green Party campaigns in California, Kshama Sawant’s ongoing battles in the Seattle City Council, the local independent candidates of the Richmond Alliance, and a few more. They might be pretty important in local areas, but still lack the weight to be featured in this analysis.

But let’s move to the central terrain.

First and most essential for us on the left now is Biden’s victory over Trump alongside the persistent clout of Senator Bernie Sanders, who keeps showing far more strength than imagined. Today we would also certainly add the gains made by Alexandra Ocasio Cortez (D-NY) and the growth of ‘the Squad.’ Other progressives wins in Congress and DSA gains in several state legislatures are also noteworthy.

But here’s the danger. Biden’s won by a clear margin, but Trump also gained in total votes over his past numbers. This is dangerous and too close for comfort. Given a 50/50 Senate and a narrow margin in the House, Biden has to govern, as best as he can, alongside the continuing power of Trump and rightwing populism. Moreover, the right includes the full integration of Trump’s forces into the GOP national and state apparatus and Trump’s now overt alliances with growing fascist militias and related groups

Trump’s still refuses to accept his defeat by more than 7 million votes. Acceptance of this ‘Big Steal,’ transformed into a ‘Big Lie,’ is now a loyalty test throughout the Republican party, from top to bottom. Moreover, we all witnessed Trump’s attempted coup on Jan. 6, 2021, complete with an insurrectionary assault on the Capitol. Hundreds are now sitting in jail and their trials are underway. . The number of Oath Keepers and Proud Boys on trial is a case in point. More importantly, the House Committee on Jan. 6 is starting its public hearings, which promises to be a powerful media exposure.

Therefore, what has moved from the margins to the center of political discourse is the question of a clear and present danger of fascism. Far from an ongoing abstract debate, we are now watching its hidden elements come to light every day in the media. We also see the ongoing machinations in the GOP hierarchy and in state legislatures reshaping election laws in their favor. Now, the question is not whether a fascist danger exists, but how to fight and defeat it.

The outcomes for Biden and Trump, then, challenge, narrow, and weaken the old dominant neoliberal hegemony from different directions. For decades, the ruling bloc had spanned both the GOP transnationals and those transnational globalists in the Third Way Democrats. Now neoliberalism is largely exhausted. This is a major change, opening the terrain for new bids for policy dominance. Team Biden is groping for a yet-to-be-fully -defined LBJ 2.0, largely making major investments in physical and social infrastructure, like universal child care or free community college. Weirdly, the GOP claims to stand for nothing, save fealty, Mafia-style, to Trump. Behind that smokescreen are the politics of fascism and a neo-confederacy.

But the GOP still has three parties. Back in 2016, Politico had characterized them this way: “After the Iowa caucuses” the GOP emerged “with three front-runners who are, respectively, a proto-fascist, [Trump] a Christian theocrat [Cruz] and an Ayn Rand neoliberal [Rubio] who wants to privatize all aspects of public life while simultaneously waging war on the poor and working classes.”

 

So here’s the new snapshot of the range of forces for today (including a graphic map above).

Under the Dem tent, the three main groups remain as the Blue Dogs, the Third Way Centrists and the Rainbow Social Democrats. Although small, the Blue Dogs persist, especially given their partnership with West Virginia’s Joe Manchin in the Senate. With Biden in the White House, the Third Way group keeps and grows its major clout and keeps most of its African American, feminist and labor allies. The Sanders Social Democratic bloc has gained strength, especially with the growing popularity of Alexandria Ocasio-Cortez and the growth of ‘The Squad. ‘Sanders has also formed and kept a progressive-center unity against Trump and has helped define ‘Build Back Better’ and other Biden reform packages.

The changes under the GOP tent have been radical, although keeping its three parties. The ‘Never Trumpers’, despite voting for Biden, have yet to split off entirely. In fact, despite the efforts to purge her, Liz Cheney of Wyoming continues fighting fiercely against Trump and his fascist measures and minions. The Jan. 6 insurrection also brought to the surface the tensions between the Christian nationalists headed by former Vice President Mike Pence and Trump’s rightwing populists. Apart from tactics, a key difference between the two is Koch money and its institutional power. The Koch brothers never liked or trusted Trump, and never funded him directly, pouring their millions into the Christian Nationalist bloc instead.

Trump still has a tight grip on the entire party, but without his White House power, the number of his GOP critics is on the rise. Daily. Trump has denounced all rivals from these two groupings, and is building his alliances with the Jan. 6 insurrectionist supporters in state legislatures. The goal is new anti-voter laws to control those counting the votes and defining the districts in the years ahead.

Let’s now look closer, starting from the left upper corner of the map:

The Rightwing Populists

This ‘party’, as mentioned, has taken over the GOP and is now tightening its grip. Trump was originally an ‘outlier elite’ with his own bankroll but now supplemented with funds from Russian oligarchs and Arab oil fortunes (See ‘Proof of Conspiracy ‘by Seth Abhramson). He is also still directly connected to the Robert Mercer family fortune, the 4th ranking billionaire funding rightwing causes. For example, the Mercers keep Breitbart News afloat and funded the career of Steve Bannon, former Trump ‘strategist’ that took him to victory in the last stretch. Along with Breitbart, Fox News is the main hourly mouthpiece for Trump’s war against the mainstream ‘fake news’ mass media. There are dozens of smaller outfits, but with millons of followers

Trump is also pulling in some new wealth. One example is Julia Jenkins Fancelli, an heiress to the fortune of the popular Publix supermarket chain. Alternet reports others: “One example is Dan and Farris Wilks, two billionaire siblings who have worked in the fracking industry in Texas and have “given a combined $100,000 toward the president’s reelection.” The Wilkes Brothers supported Sen. Ted Cruz over Trump in the 2016 GOP presidential primary but are supporting Trump in 2020.”

But major events reveal some fault lines. The House has now impeached Trump twice, once following the Jan. 6 events and earlier in 2019. The Senate followed up by acquitting him in both cases. In Trump’s second impeachment, 10 GOPers in the House and seven in the Senate votes against him. This is as good of an indictor as any of the remaining small but persistent strength of ‘regular’ Republicans in their own party.

The impeachment efforts, worthy in their own right, were also a major result of Trump’s fierce ongoing political warfare against the ‘Deep State.’ The battle is actually a contest for a new ‘America First’ white nationalist hegemony against the old neoliberal globalists under both tents. The ‘Deep State’ is the federal civil service and includes the ‘Intelligence Community,’ with a long list of Trump-targeted CIA and FBI leaders, supposedly corrupt, of which FBI director James Comey was the first to be purged. The real ‘corruption’ was their refusal to pledge loyalty to Trump personally, again like an old-style Mafia boss.

In the first impeachment vote in Feb. 2020, the sole breakaway vote was Mitt Romney on Article One. Romney, with considerable wealth himself, is also a Mormon bishop, and his LDS church recently listed holdings of over $37 billion with the SEC. This is a factor in Romney’s ability to stand alone. At the moment, however, the much-weakened GOP’s old Establishment is left with the choice of surrender, or crossing over to the Third Way bloc under the Dem tent. A good number already did so to vote for Biden in the Dem 2020 primary and general, expanding the Dem electorate to the right.

Trump now needs even more to shore up an alliance with the Blue Dogs. But it remains tactical, stemming from his appeals to ‘Rust Belt’ Democrats and some unions on trade and tariff issues, plus white identity resentment politics. The economic core of rightwing populism remains anti-global ‘producerism’ vs ‘parasitism’. Employed workers, business owners, real estate developers, small bankers are all ‘producers’. They oppose ‘parasite’ groups above and below, but mainly those below them—the unemployed (Get a Job! as an epithet), the immigrants, poor people of color, Muslims, and ‘the Other’ generally. When they attack those above, the target is usually George Soros, a Jew.

Recall that Trump entered politics by declaring Obama to be an illegal alien and an illegitimate officeholder (a parasite above), but quickly shifted to Mexicans and Muslims and anyone associated with ‘Black Lives Matter.’ This aimed to pull out the fascist and white supremacist groups of the ‘Alt Right’–using Breitbart and worse to widen their circles, bringing them closer to Trump’s core. With these fascists as ready reserves, Trump reached farther into Blue Dog territory, and its better-off workers, retirees, and business owners conflicted with white identity issues—immigration, Islamophobia, misogyny, and more. Today they still largely make up the audience at his mass rallies.

Trump’s outlook is not new. It has deep roots in American history, from the anti-Indian ethnic cleansing of President Andrew Jackson to the nativism of the Know-Nothings, to the nullification theories of Joh C. Calhoun, to the lynch terror of the KKK, to the anti-elitism and segregation of George Wallace and the Dixiecrats. Internationally, Trump combines aggressive jingoism, threats of trade wars, and an isolationist ‘economic nationalism’ aimed at getting others abroad to fight your battles for you. At the same time, your team picks up the loot (‘we should have seized and kept the oil!’).

Trump’s GOP still contains his internal weaknesses: the volatile support of distressed white workers and small producers. At present, they are still forming a key social base. But the problem is that Trump did not implement any substantive programs apart from tax cuts. These mainly benefited the top 10% and created an unstable class contradiction in his operation. Moreover, apart from supporting heavy vaccine research, his inability to deal adequately with the coronavirus emergency– over 900,000 dead—is is still undermining the confidence of some of his base. Most of what Trump has paid out is what WEB Dubois called the ‘psychological wage’ of ‘whiteness’, a dubious status position. Thus white supremacist demagogy and misogyny will also continue to unite a wide array of all nationalities of color and many women and youth against him.

Trump’s religious ignorance, sexual assaults and a porn star scandal always pained his alliance with the Christian Nationalist faction: (Mike Pence, Betsy DeVos, et. al.), and the DeVos family (Amway fortune). They were willing to go along with it for the sake of judicial appointments, with the 5-4 Supreme Court ruling against Black voters in Alabama only one major achievement. The alliance, nonetheless, has become more frayed since Jan. 6 and the ‘Hang Mike Pence’ spectacle.  But some stalwarts stood fast. The billionaire donor to the GOP right, Devos’s brother Erik Prince is a case in point. He amassed billions from his Blackwater/Xe firms that train thousands of mercenaries, These forces serve as ‘private contractors’ for U.S. armed intervention anywhere. Prinz is now reportedly preparing to spend a few million sending spies and other disruptors into ‘liberal groups’ to do dirty work in Trump’s favor.

The Christian Nationalists

This ‘party’ grew from a subset of the former Tea Party bloc. It’s made up of several Christian rightist trends developed over decades, which gained more coherence under Vice President Mike Pence. It includes conservative evangelicals seeking to recast a patriarchal and racist John Wayne into a new warrior version of Jesus. It was strengthened for a period by the  addition of William Barr as the Attorney General, He brought Opus Dei and the Catholic far-right, a minority with the American Catholic Church, closer to the White house. But seeing that Trump was about to go beyond the law in trying to overturn the 2020 election, Barr jumped ship and resigned just in time

A good number of Christian nationalists, however, are the Protestant theocracy-minded fundamentalists, especially the ‘Dominionist’ sects in which Ted Cruz’s father was active. They present themselves as the only true, ‘values-centered’ (Biblical) conservatives. They argue against any kind of compromise with the globalist ‘liberal-socialist bloc’, which ranges, in their view, from the GOP’s Mitt Romney to Bernie Sanders. They are more akin to classical liberalism than neoliberalism in economic policy. This means abandoning nearly all regulations, much of the safety net, overturning Roe v. Wade, getting rid of marriage equality (in the name of ‘religious liberty’) and abolishing the IRS and any progressive taxation in favor of a single flat tax. Salon in April 2018 reported:

“This rightwing Christian movement is fundamentally anti-democratic. Their ‘prayer warriors’ do not believe that secular laws apply to them, thus making it acceptable, if not honorable, to deceive non-believers in order to do God’s work. Many evangelicals in the Christian nationalist or ‘dominionist’ wing of the movement want the United States to be a theocracy. In some ways, this subset of the evangelical population resembles an American-style Taliban or ISIS, restrained (so far) only by the Constitution.”

The classic liberalism of most Christian Nationalist is also a key reason they attract money from the Koch Brothers networks. While the Koch’s hold Trump and his populists in some contempt, as mentioned above, the Christian Nationalist faction has access to Koch funds and its ALEC legislative projects, along with access to the DeVos fortunes. Effectively, Christian nationalist’ prosperity economics’ amounts to affirmative action for the better off, where the rise of the rich is supposed to pull everyone else upwards. Those below must also pay their tithes and pull upward with their ‘bootstraps.’ They argue for neo-isolationism on some matters of foreign policy. But as ‘Christian Zionists’ they favor an all-out holy war on ‘radical Islamic terrorism,’ to the point of ‘making the sand glow’ with the use of nuclear weapons. They pushed for moving the U.S. Embassy in Israel to Jerusalem and ripping up the Iran nuclear deal. All this is aimed at greasing the skids for the ‘End Times,’ the ‘Rapture, ‘and the ‘Second Coming.’ With Cruz, Pence and Devos as leaders, they have become the second most powerful grouping under the GOP tent, and the one with the most reactionary platform and outlook, even more so than Trump himself in some ways.

 The Establishment Neoliberal ‘RINOs’

This is the name now widely used in the media for what we previously labeled the Multinationalists. It’s mainly the upper crust and neoliberal business elites that have owned and run the GOP for years, but are now largely out in the cold. It included the quasi-libertarian House’ Freedom Caucus,’ the smaller group of NeoCons on foreign policy (John Bolton and John McCain), and the shrinking number of RINO (Republican In Name Only) moderates in The Lincoln Project. The Establishment also favors a globalist, U.S. hegemonist and even, at times, unilateralist approach abroad, with some still defending the Bush-Cheney disaster in Iraq. Their prominent voice today is Liz Cheney of Wyoming.

We also need to keep in mind the global backdrop to these shifts. The worldwide process of technology-driven financialization has divided the ruling class of late capitalism in every major country into three—a local sector of the transnational capitalist class, the nation-based multinationals, and an anti-globalist national sector. Thus among traditional U.S. neoliberals, some are U.S. hegemonists, but many have a transnational globalist understanding of the world with vast amounts of their money in foreign stock. China and global value chains integrate them with other global capitalists. This is why Trump’s trade policy is so controversial with Wall Street elites of both Republican and Democratic leanings. U.S. economic hegemony makes no sense at this financial and productive integration level. The global three way division also serves to explain why Trump’s rightwing populism, despite its American characteristics, is connected to the rightwing nationalist-populist rise in all European countries. He is not ‘explainable’ in American terns alone.

This subordination is a big change for the traditional GOP top dogs. They would like to purge a weakened Trump from the party and rebuild, but so far lack the ability. They could try to form a new party with neoliberal Dems. Or, more likely, they could join the Dems and try to push out or smother those to the left of the Third Way grouping.

Now let’s turn to the Dem tent, starting at the top right of the graphic.

The Blue Dogs

The Blue Dogs, according to the online newsletter Sludge, “operates a political action committee, Blue Dog PAC, that raises millions of dollars each election cycle, mainly from corporate PACs, and spends money to help elect more conservative Democrats. Corporate PACs that donated to Blue Dog PAC in the 2018 election cycle include those affiliated with drug company Pfizer, defense contractor Northrop Grumman, oil company ExxonMobil, and Wall Street bank Citigroup.”

This small ‘party’ has persisted and gained some energy. The recent effort of West Virginia’s Senator Joe Manchin to bloc or gut Biden’s reforms is a case in point. One earlier reason was that the United Steel Workers and a few craft unions had decided ‘to work with Trump’ on tariffs and trade. The USW also got firmly behind Connor Lamb (D-PA) for Congress. Lamb won a narrow victory in a Western PA CD in a rural and conservative area, but with many USW miner’s votes. He was endorsed by the Blue Dog PAC, although he is not yet a formal member of the caucus. Getting into a nearly physical floor fight with the GOP over Jan. 6 ‘radicalized’ Lamb a bit, moving him leftward.

But the small Blue Dog resurgence may not last. On the one hand, the DNC Third Way gang currently loves people like Lamb, and wants to see more candidates leaning to the center and even the right. On the other hand, an unstableTrump out of office has little to offer on major infrastructure plans save for ‘Build The Wall’ chanting at rallies. His potential votes among USW and other union members may shrink.

The Third Way New Democrats

First formed by the Clintons, with international assistance from Tony Blair and others, this dominant ‘party’ was funded by Wall Street finance capitalists. The founding idea was to move toward neoliberalism by ‘creating distance’ between themselves and the traditional Left-Labor-Liberal bloc, i.e., the traditional unions and civil rights groups still connected to the New Deal legacy. Another part of ‘Third Way’ thinking was to shift the key social base away from the core of the working class toward college-educated suburban voters, but keeping alliances with Black and women’s groups still functional.

Thus the Third Way had tried to temper the harsher neoliberalism of the GOP by ‘triangulating’ with neo-Keynesian and left-Keynesian policies. But the overall effect is to move Democrats and their platform generally rightward. With Hillary Clinton’s narrow defeat, the Third Way’s power in the party has diminished somewhat but gained clout with the victory of Biden. As mentioned above, its labor alliances have weakened, with unions now going in three directions. Most of labor has remained with the Third Way. Some moved rightward to the Blue Dogs while others—Communications Workers, National Nurses United, and the U.E.—are part of the Sanders bloc. Regarding the current relation of forces in the party apparatus, the Third Way has about 60% of the positions and still controls the major money. In California in 2018, for example, the Regulars kept control of the state party committee only with extremely narrow margins over Bernie supporters.

The key test was the November battle with Trump: Who inspired and mobilized the much-needed ‘Blue Wave’, gave it focus and put the right numbers in the right places? The measured Third Way moderates? Or the Social Democrat insurgents? This question brings us to the last of the six’ parties.’

The Rainbow Social Democrats

This description is better than simply calling it the Congressional Progressive Caucus (CPC), as this article’s first version did. I’ve kept the ‘Rainbow’ designation because of the dynamic energy of AOC and the Squad. The Third Way, which has kept the older and more pragmatic voters of the rainbow groupings under its centrist influence, can still share it as well.

As explained before, the ‘Social Democrat’ title doesn’t mean each leader or activist here is in a social-democrat or democratic socialist group like DSA. It means the core groups–the Congressional Progressive Caucus, Progressive Democrats of America (PDA), Working Families Party (WFP), Democratic Socialists of America (DSA), Justice Democrats and Our Revolution and Indivisible—all have platforms are roughly similar to the left social democrat groupings in Europe. This is made even more evident with AOC’s and Bernie’s self-description as ‘democratic socialists’ in the primaries and the general, where it only seemed to help. The platform, however, is not socialist itself, but best described as a common front vs finance capital, war, and the white supremacist and fascist right. This is true of groups like Die Linke (‘The Left’) in Germany as well, which met recently with PDA and CPC members. In that sense, the ‘Third Reconstruction,’ promoted by Rev William Barber and the Poor People’s Campaign, might also serves as a good designation and goal.

Finally, there is the ongoing dramatic growth of the DSA due to their wise tactics in the 2016 Bernie campaign. They went all in for Bernie but also lost no opening to make themselves visible. Prominent Justice Democrat and DSAer Alexandra Ocasio Cortez, who has been a firebrand in the House, has made the ‘Green New Deal’ a household term, and joined Sanders in his efforts to shape Biden’s agenda. Now with nearly 100.000 members with chapters in every state, DSA has already won a few local and statehouse races the first time out. They are now an important player in their own right within these local clusters. But their growth may have peaked for a while. Their surfacing weaknesses reside in sorting out their own internal differences with sectarianism and even chauvinism against Black candidates.

This overall growth of this ‘party’ is all to the good. The common front approach of the Social Democratic bloc can unite more than a militant minority of actual socialists. Instead, it has a platform that can also unite a progressive majority around both immediate needs and structural reforms, including both socialists and non-socialists, the ‘Third Reconstruction.’ Apart from winning 46% of the 2016 Dem convention delegates and a good number of statehous seats, this ‘party’ is now noted for two things. First is the huge, elemental outpourings of young people–mainly women, students and the young workers of the distressed ‘precariat’ sector of the class–in the elemental risings of millions after Trump took office. Second was the enormous risings following the murder of George Floyd by the police—over 20 million, the largest in U.S history. With other mass groups like Our Revolution and Indivisible, they all added a higher degree of organization at the base to this dynamic and growing cluster.

What does it all mean?

With this brief descriptive and analytical mapping of the upper crust of American politics, many things are falling into place. The formerly subaltern rightist groupings in the GOP have risen in revolt against the Neoliberal Establishment of the Cheneys, Romneys and the Bushes. Now they have rightwing populist and white nationalist hegemony. The GOP, then, can be accurately called the party of the neo-Confederates and the main target of a popular, anti-fascist front. Under the other tent, the Third Way is seeking a new post-neoliberal platform, through President Joe Biden’s reforms. The progressive-center unity of the earlier Obama coalition, with all its constituency alliances, is still in place. At the same time, the Third Way still wants to co-opt and control the Social Democrats as an energetic but critical secondary ally. The Sanders’ forces have few illusions about this pressure on them, and don’t want to be anyone’s subaltern without a fight. So we are continuing to press all our issues, but adapting some policies to the common front vs. the fascist right. If we work well, we will build more base organizations, more alliances, and more clout as we go.

This ‘big picture’ also reveals much about the current budget debates. All three parties under the GOP tent still advocate neoliberal austerity. The Third Way-dominated Senate Democrats and Blue Dogs push for an ‘austerity lite’ budget and some Keynesian infrastructure programs. Team Biden, the Social Democrats and the Congressional Progressive Caucus are working on ‘Build Back Better’ programs and ‘Green New Deal’ projects that might expand advanced manufacturing jobs.

However, we must keep in mind that favorably ‘shifting the balance of forces’ in election campaigns is often an indirect and somewhat ephemeral gain. It does ‘open up space’, but for what? Progressive initiatives matter for sure, but much more is required strategically. Strategically, we are in a war of position, with periodic tactical ‘war of movement’ elemental risings. In that framework, we are interested in pushing the popular front vs. finance capital to its limits and developing a 21st-century socialist bloc. If that comes to scale in the context of a defeat of the pro-Trump right bloc, the Democratic tent is also going to be stretched and strained. It could even collapse and implode, given the sharper class contradictions and other fault lines that lie within it, much as the Whigs split four ways in the 19th Century. This ‘Whig option’ tactic would demand an ability on the part of the left to regroup all the progressive forces, inside and outside, into a new ‘First Party’ alliance or counter-hegemonic bloc. Such a formation also includes a militant minority of socialists, which will then be able to contend for governing power. The tricky part is to do this in a way that keeps the right at bay.

An old classic formula summing up the strategic thinking of the united front is appropriate here: ‘Unite and develop the progressive forces, win over the middle forces, isolate and divide the backward forces, then crush our adversaries one by one.’ In short, we must have a policy and set of tactics for each one of these elements, as well as a strategy for dealing with them overall. Moreover, take note of a warning from the futurist Alvin Toffler: ‘If you don’t have a strategy, you’re part of someone else’s strategy.’ Then finally, as to tactics, ‘wage struggle on just grounds, to our advantage and with restraint.’

To conclude, we still need to start with a realistic view of ourselves as an organized socialist left. Save for DSA, we are mostly quite small as organizations, but now we can see we are swimming in a sea of millions open to socialism. What can we do now? If you can see yourself or your group honestly working to achieve DSA’s stated program, by all means, join them and make them even larger. Or set up Jacobin / In These Times Reading Groups in your living rooms and unite socialists and close friends with them. The same goes with the new Convergence project growing out of Organizing Upgrade. Or join CCDS, CPUSA, Left Roots, or Liberation Road—socialist groups which largely share some or most of the perspective here. Join or start PDA or WFP chapters everywhere, use organizations and broad ‘Third Reconstruction’ and ‘Modern Tecumseh’ alliances and popular rainbow assemblies to build mass mobilizations, register new voters and defeat the GOP in November 2022 and 2024.

With both socialists and rainbow progressives, start at the base, focus on city and state governments, and expand the Congressional Progressive Caucus. We rarely gain victories at the top that have not been won and consolidated earlier at the base. Most of all, in order to form broader and winning coalitions, you need base organizations of your own to form partnerships and alliances WITH! Seize the time and Git ‘er done!

Category : Democracy | Elections | Fascism | Hegemony | Neoliberalism | Rightwing Populism | Strategy and Tactics | Blog
5
Sep

By TIM LACY

US Intellectual History Blog

FEB 20, 2014

Thinking Like a Gramscian Historian: An Introduction, a Provocation, and Guide to the Basics

What follows is a guide and provocation—not a formula—for writing as a mature, unorthodox Marxist historian. By the latter I mean as a “Gramscian Historian,” or perhaps something like a Critical Theorist historian. As the points below accumulate, moreover, you might see this as a guide to thinking like a Gramscian Intellectual Historian. We’ll see. [Note: This could be read as a companion to Kurt Newman’s November 19, 2013 post on Gramsci.]

The deeper I delve into the darkest corners of my theoretical self (an ongoing preoccupation over the past year, by choice and accident), I’m seeing myself as a someone who could get comfortable writing in a Critical Theorist-Gramscian historical mode of analysis. By this I do not mean using that mode to direct my selection of evidence, guide all of my interpretive decisions, or to depart from a factually rich style of writing (hopefully that sense of self will be confirmed as reviews of my book begin to appear). Rather, in a fashion true to the historicism of Max Horkheimer and the concreteness of Antonio Gramsci, I mean using that mode to help one make sense of the abstractions, generalizations, and inductions that arise from a deep immersion in evidence. A Gramscian-Critical Theorist mode of analysis is another important tool in my box of interpretive tools.

The immediate inspiration for this post is the death of Stuart Hall, but through a recommendation by James Livingston. When Jim posted a reflection about Hall on his Facebook page, he included a reference to Stuart Hall’s 1986 article “Gramsci’s Relevance for the Study of Race and Ethnicity” (Journal of Communication Inquiry, vol. 10, no. 5, pp. 5-27). I would’ve never noticed this without Jim’s shout-out, which included this marketing tag: “The best single piece on Gramsci I have ever read is not by Cammett or Genovese, or Nairn or Anderson, or, for that matter, Laclau and Mouffe, but by Hall, in the Journal of Communications Inquiry.” That is no small praise. I bought Livingston’s pitch, and this post is the result.

Almost everything in the outline, or program, below derives from the Hall article. That piece, in turn (which sadly contains no bibliography), relies primarily on Gramsci’s Prison Notebooks. But Hall also references a number of other pieces that may (I’m not sure) exist outside the Notebooks. Finally, in a bibliography afterwards I cite some other potentially useful secondary sources.

———————————————————————
How to Think Like a Gramscian Historian, as Inspired By Stuart Hall

Note: All page references are to the Hall article. Other sources are sprinkled throughout.

1. Like any good orthodox Marxist—as distinct from a unorthodox Marxist thinker like Gramsci—you must still know and understand the economic terrain/base. This means thinking about the period, particulars, and specifics of capital and labor. Be sensitive to communities and various regional differences. This is what helps make your historical thinking historicist. This means knowing both qualitative and quantitative data, as much as is possible. (pp. 14, 18)

2. Having learned the economic terrain, let it simmer in the background. Think about the contours of the story you have just ascertained—it’s elements of commodification and reification (the ‘thingification’ of social relations, as a relation of tradeable objects).

3. Ask how these contours, in turn, affected “superstructures” as manifest in culture, thought worlds, ideology, politics, psychology, and personality. Again, sensitivity to particular communities and regions, as well as periodization, is a necessity. (p. 14)

4. Think about the relations of conceptual superstructures to social forces and individuals. What are the various levels of articulation between these classes and forces, and how do they compete with each other? Be aware of sites of struggle and crisis. Think about whether the social force, movements, and individuals (all the players) are ‘organic’ (meaning historical and deep) or incidental (“occasional, immediate”). An ‘organic’ crisis can last for decades and is not static. (p. 13)

5. Has the interaction or coordination between these forces created a ‘hegemony’ or effected a historical bloc that sustains hegemonic environment? This definition of hegemony seems useful (from here): “the success of the dominant classes in presenting their definition of reality, their view of the world, in such a way that it is accepted by other classes as ‘common sense’.” Hegemonies are seen through their effects of power and control. Hall also seems to imply, to me anyway, that for Gramsci not all hegemonies are necessarily bad; they can dominate in positive and negative ways. Hegemony is, then, more of a descriptor than a shadowy monster. Hall notes that “‘hegemony’ is a very particular, historically specific, and temporary ‘moment’ in the life of a society.” It is multi-dimensional and has a multi-arena character that involves many fronts in society’s superstructure. Finally, it is a ‘historic bloc’ rather than a ‘ruling class’ that includes the “strata of the subaltern and dominated classes, who have been won over by specific concessions and compromises and who form part of the social constellation but in a subordinate role.” (pp. 14-15)

6. Is the hegemonic class dominating or leading? Domination can maintain the ascendancy of a class, but only with limited reach. A leading hegemonic bloc wins consent by taking into account “subordinate interests” and attempts to maintain popularity. Coercion and consent run together for Gramsci, and run the gamut of cultural, moral, ethical, and intellectual concerns. (p. 16-17)

7. Consider the power—“the sturdy structure”—of “civil society” when analyzing struggles. Most all struggles, in liberal democracies, are won by protracted and complex ‘wars of position’ rather than momentary ‘wars of maneuver” that are reminiscent of WWI trench battles. Those wars of position occur in the context of civil society. The ‘art of politics’, then, is what happens in the context of “voluntary associations, …schooling, the family, churches and religious life, cultural organizations, so-called private relations, gender, sexual and ethnic identities, etc.” The state, in this scenario, is both “educative and formative”—a “point of condensation” for those diverse kinds of institutions and their relations. The state is a function of the “civil hegemony” that derives from that civil society. The complexity of these historical circumstances cannot be emphasized enough. In Hall’s words (as inspired by Gramsci): “This points irrevocably to the increasing complexity of the inter-relationships in modern societies between state and civil society.” Hall adds: “The effect is to multiply and proliferate the various fronts of politics, and to differentiate the various kinds of social antagonisms.” (pp. 17-20)

8. Enter ideology, and how it affects civil society and hegemony. Gramsci defines ideology as “a conception of the world, any philosophy, which becomes a cultural movement, a ‘religion’, a ‘faith’, that has produced a form of practical activity or will in which a philosophy is contained as an implicit theoretical ‘premiss’. …In its best sense [it is]…a conception of the world that is implicitly manifest in art, in law, in economic activity and in all manifestations of individual and collective life.” Given this definition, Gramsci declares that the essential problem of ideology is how it “preserve[s] the ideological unity of the entire social bloc which that ideology serves to cement and unify.” Ideology consists of a philosophical core or nucleus that is linked and elaborated, in Hall’s words, “into practical and popular forms of consciousness” as they affect (and effect) “the broad masses of society, in the shape of a cultural movement, political tendency, faith or religion.” Gramsci is less concerned with the philosophical nucleus than ideology as an organic form which touches thinking people and “practical, everyday, common sense.’ The key here is that philosophy values coherence while common-sense thinking is eclectic—concerned with effectiveness and practice. Common-sense thinking, to Gramsci, is “not rigid and immobile but is continually transforming itself.” It also more likely to be a deep product of historical process. Finally, Gramsi circles back to everyday politics: “The relation between common sense and the upper-level of philosophy is assured by ‘politics’.” (p. 20-21)

9. At this point you, as an historian, might be asking about ‘the self’ and real people. What of the individual thinker, however complex or simple? Gramsci hasn’t forgotten you and them. Gramsci recognizes the individual via plurality. According to Hall, Gramsci “refuses any idea of a pre-given unified ideological subject.” There is a “‘plurality’ of selves or identities of which the so-called subject of thought and ideas is composed.” As such, “the personality is strangely composite.” And on that individual’s consciousness (always a tricky subject in Marxist thought), Hall sees Gramsci as drawing “attention to the contradiction in consciousness between the conception of the world which manifests itself…in action, and those conceptions which are affirmed verbally or in thought.” The result is a “complex, fragmentary and contradictory conception of consciousness” that surpasses considerably the “false consciousness” of traditional/orthodox Marxist thought. In sum, there is no “‘given’ and unified ideological class subject” (p. 22-23). We must try to understand those who participate in hegemonies in the smallest units possible to as to reflect individual and group agency (the final term being my import).

10. Finally, Gramsci even addresses paradigm change—the transformation of hegemonies. Hall found an extraordinary passage in the Prison Notebooks that hits Kuhnian tune. Here’s Hall’s narration:

“The multi-accentual, inter-discursive character of the field of ideology is explicitly acknowledged by Gramsci when…he describes how an old conception of the world is gradually displaced by another mode of thought and is internally reworked and transformed: ‘what matters is the criticism to which such an ideological complex is subjected…This makes possible a process of differentiation and change in the relative wight that the elements of the old ideologies used to possess…what was previously secondary and subordinate…becomes the nucleus of a new ideological and theoretical complex” (p. 23).

A Gramscian vision of benign or pernicious ideological, or hegemonic, change is one where the new paradigm always contains residues of the old. New ideas are articulated, and old one disarticulated. In either case history and historical circumstance are respected.

I noted this on the USIH Facebook page, but consider the “how to” outline above my own kind of tribute to both Stuart Hall—and James Livingston?. The latter probably gets more credit as an antagonist and provocateur than as an authentic person and inspiration to good historical thinking. This one is for you, Jim, even if you think it comes off as sucky, programmatic b.s. – TL

———————————————————————
Secondary Bibliography

Notes: (a) These are in addition the abovementioned Hall article and his embedded citations of Gramsci’s works. (b) I do not endorse these in their particulars, but rather as broad guides to thinking about Gramsci’s thought

“A Gramsci Glossary.” Workers’ Liberty. March 27, 2013.

Raney, Vanessa. “Gramsci Outside of Marx?: Defining Culture in Gramscian Terms.” Web essay, Claremont Graduate University (Fall 2003).

Rosengarten, Frank. “An Introduction to Gramsci’s Life and Thought.” Marxist Internet Archive Library, Antonio Gramsci Archive.

Category : Hegemony | Marxism | Theory | Blog
24
Jun

 

How Hegemony Ends: The Unraveling of American Power

By Alexander Cooley and Daniel H. Nexon
Foreign Affairs July/August 2020

Multiple signs point to a crisis in global order. The uncoordinated international response to the COVID-19 pandemic, the resulting economic downturns, the resurgence of nationalist politics, and the hardening of state borders all seem to herald the emergence of a less cooperative and more fragile international system. According to many observers, these developments underscore the dangers of U.S. President Donald Trump’s “America first” policies and his retreat from global leadership.

Even before the pandemic, Trump routinely criticized the value of alliances and institutions such as NATO, supported the breakup of the European Union, withdrew from a host of international agreements and organizations, and pandered to autocrats such as Russian President Vladimir Putin and the North Korean leader Kim Jong Un. He has questioned the merits of placing liberal values such as democracy and human rights at the heart of foreign policy. Trump’s clear preference for zero-sum, transactional politics further supports the notion that the United States is abandoning its commitment to promoting a liberal international order.

Some analysts believe that the United States can still turn this around, by restoring the strategies by which it, from the end of World War II to the aftermath of the Cold War, built and sustained a successful international order. If a post-Trump United States could reclaim the responsibilities of global power, then this era—including the pandemic that will define it—could stand as a temporary aberration rather than a step on the way to permanent disarray.

After all, predictions of American decline and a shift in international order are far from new—and they have been consistently wrong. In the middle of the 1980s, many analysts believed that U.S. leadership was on the way out. The Bretton Woods system had collapsed in the 1970s; the United States faced increasing competition from European and East Asian economies, notably West Germany and Japan; and the Soviet Union looked like an enduring feature of world politics. By the end of 1991, however, the Soviet Union had formally dissolved, Japan was entering its “lost decade” of economic stagnation, and the expensive task of integration consumed a reunified Germany. The United States experienced a decade of booming technological innovation and unexpectedly high economic growth. The result was what many hailed as a “unipolar moment” of American hegemony.

But this time really is different. The very forces that made U.S. hegemony so durable before are today driving its dissolution. Three developments enabled the post–Cold War U.S.-led order. First, with the defeat of communism, the United States faced no major global ideological project that could rival its own. Second, with the disintegration of the Soviet Union and its accompanying infrastructure of institutions and partnerships, weaker states lacked significant alternatives to the United States and its Western allies when it came to securing military, economic, and political support. And third, transnational activists and movements were spreading liberal values and norms that bolstered the liberal order.

Today, those same dynamics have turned against the United States: a vicious cycle that erodes U.S. power has replaced the virtuous cycles that once reinforced it. With the rise of great powers such as China and Russia, autocratic and illiberal projects rival the U.S.-led liberal international system. Developing countries—and even many developed ones—can seek alternative patrons rather than remain dependent on Western largess and support. And illiberal, often right-wing transnational networks are pressing against the norms and pieties of the liberal international order that once seemed so implacable. In short, U.S. global leadership is not simply in retreat; it is unraveling. And the decline is not cyclical but permanent.

THE VANISHING UNIPOLAR MOMENT

It may seem strange to talk of permanent decline when the United States spends more on its military than its next seven rivals combined and maintains an unparalleled network of overseas military bases. Military power played an important role in creating and maintaining U.S. preeminence in the 1990s and early years of this century; no other country could extend credible security guarantees across the entire international system. But U.S. military dominance was less a function of defense budgets—in real terms, U.S. military spending decreased during the 1990s and only ballooned after the September 11 attacks—than of several other factors: the disappearance of the Soviet Union as a competitor, the growing technological advantage enjoyed by the U.S. military, and the willingness of most of the world’s second-tier powers to rely on the United States rather than build up their own military forces. If the emergence of the United States as a unipolar power was mostly contingent on the dissolution of the Soviet Union, then the continuation of that unipolarity through the subsequent decade stemmed from the fact that Asian and European allies were content to subscribe to U.S. hegemony. continue

Category : China | Fascism | Globalization | Hegemony | Rightwing Populism | Russia | USSR | Blog
29
Aug

The challenge of Amin’s call for an Internationale of workers and peoples

By William I. Robinson
Globalizations

Samir Amin, a leading scholar and co-founder of the world-systems tradition, died on August 12, 2018. Just before his death, he published, along with close allies, a call for ‘workers and the people’ to establish a ‘fifth international’ [https://www.pambazuka.org/global-south/letter-intent-inaugural-meeting-international-workers-and-peoples] to coordinate support to progressive movements. To honor Samir Amin’s invaluable contribution to world-systems scholarship, we are pleased to present readers with a selection of essays responding to Amin’s final message for today’s anti-systemic movements. This forum is being co-published between Globalizations [https://www.tandfonline.com/rglo], the Journal of World-Systems Research [http://jwsr.pitt.edu/ojs/index.php/jwsr/issue/view/75] and Pambazuka News [https://www.pambazuka.org/]. Additional essays and commentary can be found in these outlets.

Aug 27, 2019 – Samir Amin’s call for an ‘Internationale of workers and peoples’ could not be timelier. If we are to face the onslaught of the neo-fascist right, the left worldwide must urgently renovate a revolutionary project and a plan for refounding the state. It must do so across borders under an umbrella organization that puts forth a minimum program around which popular and working-class forces can unite, and that establishes mechanisms for transnational struggle. While I concur with much of Amin’s call I also have some significant differences as well as specifications with respect to the call that I will attempt to explicate below.

Global capitalism is facing a spiraling crisis of hegemony that appears to be approaching a general crisis of capitalist rule. In the face of this crisis there has been a sharp polarization in global society between insurgent left and popular forces, on the one hand, and an insurgent far right, on the other, at whose fringe are openly fascist tendencies (Robinson, 2019 Robinson, W. I. (2019). Global capitalist crisis and twenty-first century fascism: Beyond the Trump hype.). Yet the far-right has been more effective in the past few years than the left in mobilizing disaffected populations around the world and has made significant political and institutional inroads. It would seem that Rosa Luxemburg’s dire warning at the start of the World War I that we face ‘socialism or barbarism’ is as or even more relevant today than when she issued it, given the magnitude of the means of violence worldwide and the threat of ecological holocaust. If left, popular, and working-class forces are to regain the initiative and beat back barbarism they need a transnational umbrella organization with a minimum program against global capitalism around which they can coordinate national and regional struggles and transnationalize the fightback.

The international of capital and the specter of 21st century fascism

The theme of transnational struggles from below has been discussed at great length for several decades now. Capital has achieved a newfound transnational mobility yet labor remains territorially bound by the nation-state. In the wake of the structural crisis of the 1970s, emergent transnational capital went global as a strategy to reconstitute its social power by breaking free of nation-state constraints to accumulation, to do away with Fordist-Keynesian redistributive arrangements, and to beat back the tide of revolution in the Third World. continue

Category : Capitalism | Fascism | Globalization | Hegemony | Blog
10
Aug

Lowwagecapitalism.com

During the Cold War and the struggle that put the USSR and China on one side and imperialism headed by Washington on the other side, revolutionaries used to characterize the conflict as a class war between two irreconcilable social systems.

There was the socialist camp, based upon socialized property, economic planning for human need and the government monopoly of foreign trade on the USSR-China side, and capitalism, a system of production for profit, on the other.

That the two systems were irreconcilable was at the bottom of the conflict dubbed the Cold War. In light of the current sharpening economic, diplomatic, political and military conflict between U.S. imperialism and the People’s Republic of China (PRC), it is time to revive the concepts that were applied during the height of the Cold War.

Of course it is necessary to make modifications in these formulations with respect to socialism in China, with its mix of controlled capitalism and guided socialism.

Nevertheless, the conflict between imperialist capitalism, headed by Washington, Wall Street and the Pentagon, and the Chinese socialist economic system, which has state-owned industry at its core and planned economic guidance, is becoming much sharper, and imperialism is growing more openly hostile.

U.S. imperialism’s long-standing effort to overthrow socialism in China, Chinese capitalism notwithstanding, has been concealed beneath sugary bourgeois phrases about so-called “common interests” and “economic collaboration.”  But this kind of talk is coming to an end.

Washington’s first campaign to overthrow China — 1949-1975

This struggle has been ongoing since 1949, when the Chinese Red Army drove U.S. puppet Chiang Kai-shek and his nationalist army from the mainland as it retreated to Taiwan under the protection of the Pentagon.

The conflict continued through the Korean War, when Gen. Douglas MacArthur and the U.S. high command drove the U.S. troops to the Chinese border and threatened atomic war. Only the defeat of the U.S. military by the heroic Korean people under the leadership of Kim Il Sung, with the aid of the Chinese Red Army, stopped the U.S. invasion of China.

The struggle further continued with the U.S. war against Vietnam. The war’s strategic goal was to overthrow the socialist government of Vietnam in the north and drive to the border of China to complete the military encirclement of the PRC. Only the world-historic efforts of the Vietnamese people under the leadership of Ho Chi Minh stopped the Pentagon in its tracks.

The Pentagon’s plans for military conquest failed

With the rise of Deng Xiaoping and the opening up of China to foreign investment beginning in December 1978, Wall Street began to reevaluate its strategy. The U.S. ruling class began to take advantage of the opening up of China to foreign investment and the permission for private capitalism to function, which could both enrich U.S. corporations in the massive Chinese market and at the same time penetrate the Chinese economy with a long-range view to overturning socialism.

U.S. multinational corporations set up operations in China, hiring millions of low-wage Chinese workers, who flocked to the coastal cities from the rural areas. These operations were part of a broader effort by the U.S. capitalists to set up low-wage global supply chains that integrated the Chinese economy into the world capitalist market. The U.S.’s recent sharp turn aimed at breaking up this economic integration with the Chinese economy, including the witch hunt against Chinese scientists and the U.S. Navy’s aggressive behavior in the South China Sea (called the Eastern Sea by Vietnam), is an admission that the economic phase of the U.S. attempt to bring counterrevolution to China has failed.

China is now a growing counterweight to Washington in international economics, high technology, diplomacy and regional military might in the Pacific, which the Pentagon has always considered to be a “U.S. lake” ruled by the Seventh Fleet.

The attack on Huawei

A dramatic illustration of the developing antagonisms is the way the U.S. had Meng Wanzhou, the deputy chairwoman and chief financial officer of Huawei, arrested in Canada for supposed violations of U.S. sanctions against Iran — an outrageous example of imperialism exercising extraterritoriality. The Trump administration has also leveled sanctions against Huawei electronics, the world’s largest supplier of  high-tech operating systems in the world. Huawei employs 180,000 workers and is the second largest cell phone manufacturer in the world after the south Korean-based Samsung.

The sanctions are part of the U.S. campaign to stifle China’s development of the latest version of data-transmission technology known as Fifth Generation or 5G.

The Trump administration has barred U.S. companies from selling supplies to Huawei, which has been using Google’s Android operating system for its equipment and Microsoft for its laptop products — both U.S.-based companies. Huawei is contesting the U.S. ban in court.

Meanwhile, as a backup plan in case Washington bans all access to Android and Microsoft, Huawei has quietly spent years building up an operating system of its own. Huawei developed its alternative operating system after a 2012 finding by Washington that Huawei and ZTE, another Chinese giant cell phone maker, were in criminal violation of U.S.“national security.” ZTE was forced to shut down for four months. (South China Morning Post, March 24, 2019)

But the conflict is about more than just Huawei and ZTE.

The new ‘red scare’ in Washington

The New York Times of July 20, 2019, carried a front page article entitled, “The New Red Scare in Washington.” A few excerpts give the flavor:

“In a ballroom across from the Capitol building, an unlikely group of military hawks, populist crusaders, Chinese Muslim freedom fighters and followers of the Falun Gong has been meeting to warn anyone who will listen that China poses an existential threat to the United States that will not end until the Communist Party is overthrown.

“If the warnings sound straight out of the Cold War, they are. The Committee on the Present Danger, a long-defunct group that campaigned against the dangers of the Soviet Union in the 1970s and 1980s, has recently been revived with the help of Stephen K. Bannon, the president’s former chief strategist, to warn against the dangers of China.

“Once dismissed as xenophobes and fringe elements, the group’s members are finding their views increasingly embraced in President Trump’s Washington, where skepticism and mistrust of China have taken hold. Fear of China has spread across the government, from the White House to Congress to federal agencies.”

The Trump administration has opened up a tariff war against the PRC, imposing a 25-percent tariff on $250 billion worth of Chinese exports and threatening tariffs on another $300 billion. But there is much more to Washington’s campaign than just tariffs.

The FBI and officials from the NSC (National Security Council) have been conducting a witch hunt, continues the Times article, “particularly at universities and research institutions. Officials from the FBI and the National Security Council have been dispatched to Ivy League universities to warn administrators to be vigilant against Chinese students.”

And according to the Times there are concerns that this witch hunt “is stoking a new red scare, fueling discrimination against students, scientists and companies with ties to China and risking the collapse of a fraught but deeply enmeshed trade relationship between the world’s two largest economies.” (New York Times, July 20, 2019)

FBI criminalizes cancer research

According to a major article in the June 13, 2019, Bloomberg News, “Ways of working that have long been encouraged by the NIH [National Institutes of Health] and many research institutions, particularly MD Anderson [a major cancer treatment center and research institute in Houston], are now quasi-criminalized, with FBI agents reading private emails, stopping Chinese scientists at airports, and visiting people’s homes to ask about their loyalty.

“Xifeng Wu, who has been investigated by the FBI, joined MD Anderson while in graduate school and gained renown for creating several so-called study cohorts with data amassed from hundreds of thousands of patients in Asia and the U.S. The cohorts, which combine patient histories with personal biomarkers such as DNA characteristics and treatment descriptions, outcomes, and even lifestyle habits, are a gold mine for researchers.

“She was branded an oncological double agent.”

The underlying accusation against Chinese scientists in the U.S. is that their research can lead to patentable medicines or cures, which in turn can be sold at enormous profits.

The Bloomberg article continues, “In recent decades, cancer research has become increasingly globalized, with scientists around the world pooling data and ideas to jointly study a disease that kills almost 10 million people a year. International collaborations are an intrinsic part of the U.S. National Cancer Institute’s Moonshot program, the government’s $1 billion blitz to double the pace of treatment discoveries by 2022. One of the program’s tag lines is: ‘Cancer knows no borders.’

“Except, it turns out, the borders around China. In January, Wu, an award-winning epidemiologist and naturalized American citizen, quietly stepped down as director of the Center for Public Health and Translational Genomics at the University of Texas MD Anderson Cancer Center after a three-month investigation into her professional ties in China. Wu’s resignation, and the departures in recent months of three other top Chinese-American scientists from Houston-based MD Anderson, stem from a Trump administration drive to counter Chinese influence at U.S. research institutions. … The collateral effect, however, is to stymie basic science, the foundational research that underlies new medical treatments. Everything is commodified in the economic cold war with China, including the struggle to find a cure for cancer.”

Big surprise. A world famous Chinese epidemiologist, trying to find a cure for cancer, collaborates with scientists in China!

Looking for the ‘reformers’ and the counterrevolution

For decades, the Chinese Communist Party has had changes of leadership every five years. These changes have been stable and managed peacefully. With each changeover, so-called “China experts” in the State Department in Washington think-tanks and U.S. universities have predicted the coming to power of a new “reformist” wing that will deepen capitalist reforms and lay the basis for an eventual full-scale capitalist counterrevolution.

To be sure, there has been a steady erosion of China’s socialist institutions. The “iron rice bowl” which guaranteed a living to Chinese workers has been eliminated in private enterprises. Numerous state factories and enterprises have been sold off to the detriment of the workers, and in the rural areas land was decollectivized.

One of the biggest setbacks for socialism in China and one which truly gladdened the hearts of the prophets of counterrevolution, was the decision by the Jiang Jemin CCP leadership to allow capitalists into the Chinese Communist Party in 2001.

As the New York Times wrote at the time, “This decision raises the possibility of Communists co-opting capitalists — or of capitalists co-opting the party.” (New York Times, Aug. 13, 2001) It was the latter part that the capitalist class has been looking forward to and striving for with fervent anticipation for almost four decades.

But on balance, this capitalist takeover has not materialized. Chinese socialism, despite the capitalist inroads into the economy, has proved far more durable than Washington ever imagined.

And, under the Xi Jinping leadership, the counterrevolution seems to be getting further and further away. It is not that Xi Jinping has become a revolutionary internationalist and a champion of proletarian control. But it has become apparent that China’s status in the world is completely connected to its social and economic planning.

China’s planning and state enterprises overcame 2007-2009 world capitalist crisis

Without state planning in the economy, China might have been dragged down by the 2007-2009 economic crisis. In June 2013, this author wrote an article entitled, “Marxism and the Social Character of China.” Here are some excerpts:

“More than 20 million Chinese workers lost their jobs in a very short time. So what did the Chinese government do?”

The article quoted Nicholas Lardy, a bourgeois China expert from the prestigious Peterson Institute for International Economics and no friend of China. (The full article by Lardy can be found in “Sustaining China’s Economic Growth after the Global Financial Crisis,” Kindle Locations 664-666, Peterson Institute for International Economics.)

Lardy described how “consumption in China actually grew during the crisis of 2008-09, wages went up, and the government created enough jobs to compensate for the layoffs caused by the global crisis,” this author’s emphasis.

Lardy continued: “In a year in which GDP expansion [in China] was the slowest in almost a decade, how could consumption growth in 2009 have been so strong in relative terms? How could this happen at a time when employment in export-oriented industries was collapsing, with a survey conducted by the Ministry of Agriculture reporting the loss of 20 million jobs in export manufacturing centers along the southeast coast, notably in Guangdong Province? The relatively strong growth of consumption in 2009 is explained by several factors.

“First, the boom in investment, particularly in construction activities, appears to have generated additional employment sufficient to offset a very large portion of the job losses in the export sector. For the year as a whole the Chinese economy created 11.02 million jobs in urban areas, very nearly matching the 11.13 million urban jobs created in 2008.

“Second, while the growth of employment slowed slightly, wages continued to rise. In nominal terms wages in the formal sector rose 12 percent, a few percentage points below the average of the previous five years (National Bureau of Statistics of China 2010f, 131). In real terms the increase was almost 13 percent.

“Third, the government continued its programs of increasing payments to those drawing pensions and raising transfer payments to China’s lowest-income residents. Monthly pension payments for enterprise retirees increased by RMB120, or 10 percent, in January 2009, substantially more than the 5.9 percent increase in consumer prices in 2008. This raised the total payments to retirees by about RMB75 billion. The Ministry of Civil Affairs raised transfer payments to about 70 million of China’s lowest-income citizens by a third, for an increase of RMB20 billion in 2009 (Ministry of Civil Affairs 2010).”

Lardy further explained that the Ministry of Railroads introduced eight specific plans, to be completed in 2020, to be implemented in the crisis.

According to Lardy, the World Bank called it “perhaps the biggest single planned program of passenger rail investment there has ever been in one country.” In addition, ultrahigh-voltage grid projects were undertaken, among other advances.

Socialist structures reversed collapse

So income went up, consumption went up and unemployment was overcome in China — all while the capitalist world was still mired in mass unemployment, austerity, recession, stagnation, slow growth and increasing poverty, and still is to a large extent.

The reversal of the effects of the crisis in China is the direct result of national planning, state-owned enterprises, state-owned banking and the policy decisions of the Chinese Communist Party.

There was a crisis in China, and it was caused by the world capitalist crisis. The question was which principle would prevail in the face of mass unemployment — the rational, humane principle of planning or the ruthless capitalist market. In China, the planning principle, the conscious element, took precedence over the anarchy of production brought about by the laws of the market and the law of labor value in the capitalist countries.

Socialism and China’s standing in the world

China has lifted hundreds of millions of people out of poverty. According to a United Nations report, China alone is responsible for the global decline in poverty. China’s universities have graduated millions of engineers, scientists, technicians and have allowed millions of peasants to enter the modern world.

Made in China 2025

In 2015, Xi Jingping and the Chinese CP leadership laid out the equivalent of a ten-year plan to take China to a higher level of technology and productivity in the struggle to modernize the country.

Xi announced a long-range industrial policy backed by hundreds of billions of dollars in both state and private investment to revitalize China. It is named “Made in China 2025” or “MIC25.” It is an ambitious project requiring local, regional and national coordination and participation.

The Mercator Institute for Economics (MERICS) is one of the most authoritative German think tanks on China. It wrote a major report on MIC25 on Feb. 7, 2019. According to MERICS, “The MIC25 program is here to stay and, just like the GDP targets of the past, represents the CCP’s official marching orders for an ambitious industrial upgrading. Capitalist economies around the globe will have to face this strategic offensive.

“The tables have already started to turn: Today, China is setting the pace in many emerging technologies — and watches as the world tries to keep pace.”

The MERICS report continues, “China has forged ahead in fields such as next-generation IT (companies like Huawei and ZTE are set to gain global dominance in the rollout of 5G networks), high-speed railways and ultra-high voltage electricity transmissions. More than 530 smart manufacturing industrial parks have popped up in China. Many focus on big data (21 percent), new materials (17 percent) and cloud computing (13 percent). Recently, green manufacturing and the creation of an “Industrial Internet” were given special emphasis in policy documents, underpinning President Xi Jinping’s vision of creating an ‘ecological civilization’ that thrives on sustainable development.

“China has also secured a strong position in areas such as Artificial Intelligence (AI), new energy and intelligent connected vehicles. …

“Chinese state-owned enterprises (SOEs) continue to play a critical role for the development of strategic industries and high-tech equipment associated with MIC25. In so-called key industries like telecommunications, ship building, aviation and high-speed railways, SOEs still have a revenue share of around 83 percent. In what the Chinese government has identified as pillar industries (for instance electronics, equipment manufacturing, or automotive) it amounts to 45 percent.”

Breakup of U.S.-China relationship inevitable

The tariff war between the U.S. and China has been going back and forth. It may or may not be resolved for now or may end up in a compromise. The Pentagon’s provocations in the South China Sea and the Pacific are unlikely to subside. The witch hunt against Chinese scientists is gaining momentum.

The U.S. has just appropriated $2.2 billion for arms to Taiwan. National Security Adviser and war hawk John Bolton recently made a trip to Taiwan. The president of Taiwan, Tsai Ing-wen, made a recent stopover in the U.S. on the way to the Caribbean and is scheduled to make another one on the way back.

All these measures indicate the end of rapprochement between Beijing and Washington. This breakup between the two powers is not just the doing of Donald Trump. It flows from the growing fear of the predominant sections of the U.S. ruling class that the gamble they took in trying to overthrow Chinese socialism from within has failed, just as the previous military aggression from 1949 to 1975 also failed.

High technology is the key to the future

Since as far back as the end of the 18th century, the U.S. capitalist class has always coveted the Chinese market. The giant capitalist monopolies went charging in to get joint agreements, low wages, cheap exports and big superprofits when China “opened up” at the end of the 1970s.

But the stronger the socialist core of the PRC becomes, the more weight it carries in the world and, above all, the stronger China becomes technologically the more Wall Street fears for its economic dominance and the more the Pentagon fears for its military dominance.

The example of the stifling of international collaboration on cancer research is a demonstration of how global cooperation is essential not only to curing disease, but also to the development of society as a whole. International cooperation is needed to reverse the climate disaster wrought by private property — none of this can be carried out within the framework of private property and the profit system. Only the destruction of capitalism can bring about the liberation of humanity.

Marxism asserts that society advances through the development of the productive forces from primary communism, to slavery, feudalism and capitalism. Marx wrote: “The hand-mill gives you society with the feudal lord; the steam-mill society with the industrial capitalist.” (“The Poverty of Philosophy,” 1847) And now the revolution in high technology lays the basis for international socialism.

The bourgeoisie knows that the society that can advance technology to the highest degree will be triumphant in shaping the future. This is why imperialism, headed by the U.S., imposed the strictest blockade of the flow of technology to the Soviet Union, as well as the Eastern Bloc and China. This was done by COCOM, an informal organization of all the imperialist countries, which was created in 1949 and headquartered in Paris.

The main targets were the USSR and the more industrialized socialist countries, such as the German Democratic Republic, the Czech Republic, etc. Detailed lists were drawn up of some 1,500 technological items that were forbidden to export to these countries.

Marx explained that developed socialist relations depend upon a high degree of the productivity of labor and the resulting abundance available to the population (“Critique of the Gotha Program,” 1875).

However, as Lenin noted, the chain of imperialism broke at its weakest link in Russia — that is, the revolution was successful in the poorest, most backward capitalist country. The result was that an advanced social system was established on an insufficient material foundation. This gave rise to many, many contradictions. The countries that revolutionaries correctly called socialist, were in fact really aspiring to socialism. Their revolutions laid the foundations for socialism. But imperialist blockade, war and subversion never allowed them to freely develop their social systems.

The great leap forward in technology in China today has the potential of raising the productivity of labor and strengthening the socialist foundations. It is this great leap forward that is fueling the “new cold war” with China and the real threat of hot war.

Category : China | Cold War | Hegemony | Trump | Uncategorized | Blog
11
Jun

Washington Squandered the Unipolar Moment

By Fareed Zakaria
Foreign Affairs, July-August 2019

Sometime in the last two years, American hegemony died. The age of U.S. dominance was a brief, heady era, about three decades marked by two moments, each a breakdown of sorts. It was born amid the collapse of the Berlin Wall, in 1989. The end, or really the beginning of the end, was another collapse, that of Iraq in 2003, and the slow unraveling since. But was the death of the United States’ extraordinary status a result of external causes, or did Washington accelerate its own demise through bad habits and bad behavior? That is a question that will be debated by historians for years to come. But at this point, we have enough time and perspective to make some preliminary observations.

As with most deaths, many factors contributed to this one. There were deep structural forces in the international system that inexorably worked against any one nation that accumulated so much power. In the American case, however, one is struck by the ways in which Washington—from an unprecedented position—mishandled its hegemony and abused its power, losing allies and emboldening enemies. And now, under the Trump administration, the United States seems to have lost interest, indeed lost faith, in the ideas and purpose that animated its international presence for three-quarters of a century.

U.S. hegemony in the post–Cold War era was like nothing the world had seen since the Roman Empire. Writers are fond of dating the dawn of “the American century” to 1945, not long after the publisher Henry Luce coined the term. But the post–World War II era was quite different from the post-1989 one. Even after 1945, in large stretches of the globe, France and the United Kingdom still had formal empires and thus deep influence. Soon, the Soviet Union presented itself as a superpower rival, contesting Washington’s influence in every corner of the planet. Remember that the phrase “Third World” derived from the tripartite division of the globe, the First World being the United States and Western Europe, and the Second World, the communist countries. The Third World was everywhere else, where each country was choosing between U.S. and Soviet influence. For much of the world’s population, from Poland to China, the century hardly looked American.

The United States’ post–Cold War supremacy was initially hard to detect. As I pointed out in The New Yorker in 2002, most participants missed it. In 1990, British Prime Minister Margaret Thatcher argued that the world was dividing into three political spheres, dominated by the dollar, the yen, and the deutsche mark. Henry Kissinger’s 1994 book, Diplomacy, predicted the dawn of a new multipolar age. Certainly in the United States, there was little triumphalism. The 1992 presidential campaign was marked by a sense of weakness and weariness. “The Cold War is over; Japan and Germany won,” the Democratic hopeful Paul Tsongas said again and again. Asia hands had already begun to speak of “the Pacific century.”

U.S. hegemony in the post–Cold War era was like nothing the world had seen since the Roman Empire.

There was one exception to this analysis, a prescient essay in the pages of this magazine by the conservative commentator Charles Krauthammer: “The Unipolar Moment,” which was published in 1990. But even this triumphalist take was limited in its expansiveness, as its title suggests. “The unipolar moment will be brief,” Krauthammer admitted, predicting in a Washington Post column that within a very short time, Germany and Japan, the two emerging “regional superpowers,” would be pursuing foreign policies independent of the United States.

Policymakers welcomed the waning of unipolarity, which they assumed was imminent. In 1991, as the Balkan wars began, Jacques Poos, the president of the Council of the European Union, declared, “This is the hour of Europe.” He explained: “If one problem can be solved by Europeans, it is the Yugoslav problem. This is a European country, and it is not up to the Americans.” But it turned out that only the United States had the combined power and influence to intervene effectively and tackle the crisis.

Similarly, toward the end of the 1990s, when a series of economic panics sent East Asian economies into tailspins, only the United States could stabilize the global financial system. It organized a $120 billion international bailout for the worst-hit countries, resolving the crisis. Time magazine put three Americans, Treasury Secretary Robert Rubin, Federal Reserve Chair Alan Greenspan, and Deputy Treasury Secretary Lawrence Summers, on its cover with the headline “The Committee to Save the World.”

THE BEGINNING OF THE END

Just as American hegemony grew in the early 1990s while no one was noticing, so in the late 1990s did the forces that would undermine it, even as people had begun to speak of the United States as “the indispensable nation” and “the world’s sole superpower.” First and foremost, there was the rise of China. It is easy to see in retrospect that Beijing would become the only serious rival to Washington, but it was not as apparent a quarter century ago. Although China had grown speedily since the 1980s, it had done so from a very low base. Few countries had been able to continue that process for more than a couple of decades. China’s strange mixture of capitalism and Leninism seemed fragile, as the Tiananmen Square uprising had revealed. continue

Category : Globalization | Hegemony | US History | Blog
5
May

In his final years, Poulantzas seemed to be straining against the seams of his thinking— and perhaps even against the Marxist tradition itself.

Poulantzas tried to envision how the left could simultaneously champion rank-and-file democracy at a distance from the state and push for radical transformation from within it.

As Marxism’s old messianic character faded in the late twentieth century, too many forgot that wandering in the wilderness is often the precondition of a prophet’s appearance. With the collapse of “really existing” socialism came what seemed like a permanent triumph of capitalism and the slow, grinding destruction of whatever resisted the market’s advance. But the far-too-unexpected renaissance of socialism in the twenty-first century reveals not only how much ground has been lost, but how much baggage has been shed. The presence of an authoritarian communist superpower was not only an ideological ball and chain for left politics outside the Eastern bloc, but also a real geopolitical straitjacket: at the electoral peak of European communist parties in the 1970s, the Soviet Union never kept secret that it preferred reactionaries in power in the West.

Now that this old shadow has passed and socialists are making a slow exit from the desert, they have a chance to redefine themselves for a new century. That involves taking bigger and more difficult steps, and it is not surprising that the effort has sent contemporary democratic socialists back to the 1970s, the last historical moment when socialist thinkers enjoyed even the illusion of political possibilities. In the brief window before the neoliberal era, socialists were just beginning to ask what a left politics that could win elections in a democratic system would look like. Who would its base be—what sort of alliance between classes and identity groups would it appeal to? How would it act toward a “bourgeois” political system that communists had always seen as an unredeemable instrument of class domination? Is it even possible to be a democratic revolutionary?

These questions came together in the work of Nicos Poulantzas, a Greek thinker who spent much of the 1960s and 1970s in Paris. There, Poulantzas argued that a sophisticated understanding of the capitalist state was central to a strategy for democratic socialism. Pushing as far as possible toward a Marxist theory of politics while still holding onto the central role of class struggle, Poulantzas tried to combine the insights of revolutionary strategy with a defense of parliamentary democracy against what he called “authoritarian statism.”

Recent signs of a Poulantzas renaissance, including the republication of several of his books in French and English, have a lot to do with the fact that his dual strategy for democratic socialism resonates with the task of today’s socialists: to understand how to use the capitalist state as a strategic weapon without succumbing to a long history of failed electoral projects and realignment strategies. The tensions in Poulantzas’s thinking resemble the current tensions within the left: is winning back power a matter of casting the oligarchs out of government and restoring a lost fairness, or is a more radical transformation of the state required?

It is an open question whether Poulantzas himself was able to articulate a satisfying vision for democratic socialism. His work, nevertheless, goes straight to the heart of the problems that twenty-first-century socialism must face.

Toward a Structural Theory of the Capitalist State

Nicos Poulantzas was born in Athens in 1936. In his twenties, he began a law degree at the University of Athens as a back door into philosophy. Jean-Paul Sartre’s writings became a conduit for Marxism among young Greek intellectuals since, as Poulantzas later explained, it was difficult to get the original canonical Marxist texts in a country that had suffered Nazi occupation, then civil war, then a repressive anticommunist government. After a brief stint in legal studies in Germany, Poulantzas made his way to Paris, where he was soon teaching law at the Sorbonne and mingling with the editors of Sartre and Simone de Beauvoir’s journal Les Temps modernes. Poulantzas was drafted among a crop of new, younger writers for the journal, which published his earliest writings on law and the state and his engagements with British and Italian Marxists, including the Italian Communist Party’s in-house theorist, Antonio Gramsci. His 1964 doctoral thesis on the philosophy of law was broadly influenced by Sartre’s existentialism and the thought of Georg Lukács and Lucien Goldmann, who harmonized with the Hegelian Marxism dominant in France.

Louis Althusser, then a more marginal French philosopher but soon to be famous across Europe, dissented from this Hegelian turn. Althusser’s 1965 seminar, “Reading Capital,” was a curious event in the history of Marxism that marked the intellectual itineraries of well-known theorists like Étienne Balibar and Jacques Rancière. The framework it launched into Marxist theory, usually described as “structuralism,” was inextricable from Althusser’s dual opposition to Stalinist economism and the humanism of thinkers like Sartre. In the classic Marxist schema, the economic “base” gives rise to political and ideological “superstructures”—in other words, most everything about capitalist society, from its political institutions to its culture, are ultimately fated by the laws of economics. The Althusserians argued that, on the contrary, all of the domains of capitalist society operate quasi-independently of one another in order to more flexibly reproduce capitalist domination. Of course, they are tightly interrelated, and the economic decides “in the last instance” whether economics or something else will take priority, but, according to Althusser himself, “the lonely hour of the ‘last instance’ never comes.” continue

Category : Capitalism | Fascism | Hegemony | Marxism | Strategy and Tactics | Blog
1
Dec


 

October 2018:An exchange prompted by the essay 

The Precariat: Today’s Transformative Class? 


A headshot of Bill Fletcher

Bill Fletcher
Taking a long view of precariousness as an inherent feature of capitalism can shed light on the contemporary debate on “the precariat.”
 Read


A headshot of Nancy Folbre

Nancy Folbre
The focus on “the precariat” is useful but limited: the fight over distribution isn’t just between labor and capital.
 Read


A headshot of Azfar Khan

Azfar Khan
A universal basic income is key to delivering security and autonomy to people in a precarious world. 
Read


A headshot of Alexandra Köves

Alexandra Köves
Beyond policies like a universal basic income, a transition to a equitable and sustainable society requires the redefinition of well-being, needs, and work itself.
 Read


A headshot of George Liodakis

George Liodakis
There is no “precariat,” per se—the working class as-a-whole remains the necessary agent for transformation.
 Read


A headshot of Ronaldo Munck

Ronaldo Munck
Work in the Global South has always been precarious, but the resurgence of global labor organizing offers a way forward.
 Read


A headshot of William I. Robinson

William I. Robinson
The “precariat,” rather than a new class, is part of the global proletariat, on whose struggle with transnational capital our fate depends.
 Read


A headshot of Pritam Singh

Pritam Singh
A basic income alone is not transformative, but a feature of a broader ecosocialist vision of dismantling capitalism. 
Read


A headshot of Eva-Maria Swidler

Eva-Maria Swidler
Workers in the Global North have a lot to learn from the past struggles of workers in the Global South (as well as in their own countries). 
Read


A headshot of Evelyn AstorA headshot of Alison Tate

Alison Tate and Evelyn Astor
Labor unions must continue to play an important role in the fight for economic justice and against precariousness. 
Read



A headshot of Guy Standing

Author’s Response
Guy Standing addresses points raised by the contributors to this roundtable. Read
 

Category : Capitalism | Globalization | Hegemony | Marxism | Organizing | Strategy and Tactics | Theory | Working Class | Youth | Blog
18
Feb

Revisiting Patriarchy and Hegemony

 

By Martha Sonnenberg
Tikkun.org

I was 24 years old in 1970, when I read Shulamith Firestone’s The Dialectic of Sex, a year younger than she was when she wrote the book. The book catapulted me from the limitations of the Left organization of which I was a member into the world of Women’s Liberation.  There was no going back once I saw and felt the chauvinism of the Left, how women’s issues were  seen as tangential to the more important priorities of  “real” radical politics, rather than seeing feminism as “central and directly radical in itself.” Women in my organization typically played a supportive role to the men, the theorists, the writers, the speakers—we made coffee, mimeographed pamphlets, passed out the pamphlets, sometimes we spoke at meetings, and even had a women’s caucus within the organization, but, as Firestone told us, we were still “in need of male approval, in this case anti-establishment male approval, to legitimate (ourselves) politically”.

When Shulamith Firestone died, at the age of 67, in 2013, ravaged by mental illness and forgotten by many, her sister, Rabbi Tirzah Firestone said in her eulogy, “She influenced thousands of women to have new thoughts, to lead new lives.  I am who I am, and a lot of women are who they are, because of Shulie.”  I was one of those women.

Recently, I took my dog eared copy of The Dialectic of Sex down from my bookshelf as the #MeToo movement evolved, and was once again astounded by the incendiary brilliance of the book, now nearly 50 years old.  Shulamith Firestone was the first, and maybe the only, to probe the depths to which a misogynistic patriarchy permeated our society, developing a concept of a “sexual class system” which ran deeper than economic, racial, or social divisions.  With prescient analytical perspective, she placed the traditional family structure at the core of women’s oppression.  She wrote, “Unless revolution uproots the basic social organization, the biologic family—the vinculum through which the psychology of power can always be smuggled—the tapeworm of exploitation will never be annihilated.”  While the establishment press characterized her ideas as preposterous, many of her notions of how patriarchal social organization would be “uprooted” have come to realization—in vitro fertilization, how children are socialized, children’s rights,  gay rights and the legalization of  gay marriage, the whole LGBTQ movement, ending traditional marriage roles,  the freeing of gender identity from biologic destiny.  And it is within the context of these historical developments, upending the socio-economic buttress of traditional gender roles and identities that #MeToo has emerged. These factors have given #MeToo  a power and force that previous “waves” of women’s liberation lacked, not because previous issues or efforts were any less important, but because they were unable to reach women in all levels of society, transcending class, race, profession, and age. #MeToo , with its revelations of the ubiquity of abuse and violence against women,has reached all these women.  Importantly, too, it  is a movement that began not with “leaders”, but from grass roots in communities all across the country, and, in fact, all across the world.

The history of #MeToo has been obscured by the media frenzy that concurrently emerged.  Tarana Burke, an African American woman, created a non-profit organization called Me Too in 2006, to help women of color who had been sexually abused or assaulted. This was not about naming perpetrators or holding them accountable; it was only to give the affected women a voice. This, the media ignored.  But in 2017 two things happened which did get media attention:  The New York Times published revelations about Harvey Weinstein’s sexual abuse of Hollywood women, and following that, an actress, Alyssa Milano, who became aware of Tarana Burke’s work, wrote in social media, “If all the women who have been sexually harassed or assaulted wrote “Me Too” as a status, we might give people a sense of the magnitude of the problem.”  What followed was the flooding of social media with stories of abuse and harassment, and a way for women to tell their experience and stand in solidarity with other abuse survivors. In the first 24 hours of Milano’s post, more than 12 million “MeToo” posts appeared.   All these aspects of #MeToo, its mass base and its revelation of the pervasive and perverse alignment of misogyny and power, make it dangerous to the established power structure.  Not surprisingly, that power structure has responded quickly in its attack on #MeToo.

Power and patriarchy defends itself

Efforts to maintain current power structures and cultures take multiple forms.  One of the most insidious forms of preserving the current power relationships lies with the established media.  While the “media” is not an autonomous entity, the individuals who contribute to it, the writers, the pundits, the “newsmakers”, promote in various ways the dominant culture of institutionalized sexism, and the undermining of #MeToo.  It does so in the following ways:

1) It focuses on individuals, primarily celebrities or people of power—thus, the “Harvey Weinstein” phenomenon, which unleashed multiple “outings” of famous  men who abused, assaulted or harassed women.  The focus on individuals took public attention away from the mass movement underlying #MeToo.  It made the problem one of famous “bad apples”, and ignored the systemic problems that #MeToo was revealing–not about famous people, but about abuse, violence and harassment in all workplaces, in families, in doctors’ offices, in schools, in churches and temples and mosques.

2) It separates the “good guys” from the “bad guys”. If there are “Bad Apples” among men, then the rest of them must be “Good Apples.”  There followed a flurry of more articles by men who professed their support of feminism, and who proclaimed they had never abused anyone, or weren’t aware that such abuse existed.  One is reminded of the white liberals who professed themselves free of racism, like the father in the film “Get Out”: “I would have voted for Obama a third time!” A few of these “good apples”, however, got caught in the media’s attention: Louis C.K., John Conyers, Al Franken. How, liberal pundits fretted, could #MeToo, take down such good guys? And it was true: none of these men had raped women. But they had engaged in various behaviors that would be considered harassing, from masturbation in front of women, to imposing unwanted kisses, to taking “comic” photographs touching the breast of a sleeping woman.  The pundits protested that these men were talented, creative, politically progressive men, and some allowance should be made. But when all was said and done, these protests were nothing more than a liberal version of the “Boys will be boys” meme, a widely held enabler of rape culture, and once again, left the underlying problems intact and unquestioned.

3) It focuses on consequences and punishment of these individuals, implying that once individuals were punished, or otherwise held accountable, the problem would be solved–A few firings, new policies, maybe some reforming legislation, and the problem would go away.  These punishments, however, also left the dominant power relationships and the social-psychology of misogyny/patriarchy unchallenged.

The anti-#MeToo “feminists”

In response to all of the above, a new wave of punditry evolved, this time mostly from other women, many calling themselves feminists, who attacked #MeToo for being a ”witch hunt”, “McCarthyism” and yes, totalitarian.  The most blatant example of this was the letter from 100 French women to Le Monde, and famously signed by Catherine Deneuve.  #MeToo was castigated for enslaving  women “to a status of eternal victim,” and further victimizing the  men “who’ve been disciplined in the workplace, forced to resign…when their only crime was to touch a woman’s knee, try to steal a kiss, talk about “intimate” things during a work meal, or send sexually charged messages to women who did not return their interest.”  This has led, the letter stated, “to a climate of totalitarian society.” The letter further defended the “freedom to offend” as essential to artistic creation and…”we defend a freedom to bother as indispensable to sexual freedom.”  Women, the letter states “need not feel traumatized by a man who rubs himself against her in the subway,” but rather should consider it a “nonevent.”  In a subsequent statement, published in Liberation, Deneuve said she signed the statement because she opposed the “media lynching” of men accused of inappropriate behavior.  One writer characterized #MeToo as responsible for the same “vigilantism” that characterized the Salem Witch Trials and the McCarthyism….(Continued)

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