Saturday, March 20, 2004


The alterations of general economic perspectives must lead to alterations of the relationship between the workers and their employers. The suddenly change of circumstances coincided with many strikes that had already begun, and with many more, that were being prepared. Doubtless, they will be proceed in spite of the Depression and will lead to even higher wages. The factory owners will argue that they are not in the position to pay higher wages, to which the workers will respond that the cost of living has become higher, and so the two arguments will equally weigh against each other. In case of the Depression lengthening, which is what I assume will happen, the workers will soon receive the whole brunt of it, and they will – without intending it – have to struggle against the fall of wages. Then their activity will flow into the political plane, whereby the new economic organizations created by the strike will be of invaluable worth to them. – Marx, the New York Tribune, 27. September 1853

Marx was writing at the time of the Crimean War. The railroad frenzy in England had collapsed (as has been often remarked, the political and economic consequences of the oversupply of rail and of the oversupply of optic fiber cable, one hundred forty some years later, display remarkably similar trajectories). Britain’s war was being fought for cloudy reasons, and had no visible exit to it. The economy was in Depression – a term that has been daintily replaced, in the modern lexicon, by recession, euphemism being the last resort of economists when all else fails. Marx, at this time, was stuffing himself with despair, beer, lust for house maids, and blue-books. As James Buchan, I believe, has noted, with the job for the Tribune, and his other writings, Marx wasn’t making bad money – yet his household was always near the very end of its financial tether.

Here’s what he says in a letter to Engels written about the same date:

Above all I want to slay the fellows with my pen, the moment being propitious, and if at the same time you keep me supplied with material, I can spin out the various themes over longer periods.

Why the quotes from Marx? Well, we’ve been pondering an article in Slate by Chris Suellentrop about the Spanish socialists. No, it isn’t about whether they have definitively leaped off the Good Ship Lollipop and joined the Barbary Corsairs (leave that to the ever ignorant Christopher Hitchens). It is about the hollowed out status of European Socialism:

“Despite what you may have heard, socialism isn't dead. It's undead, a zombie that still roams the earth uncertain what to do with itself since its demise. It was sighted again this week, somewhere on the Iberian Peninsula, though some observers dismissed the reports. Sure, a group named the Socialist Workers Party won the elections in Spain, and a Socialist named José Luis Rodríguez Zapatero is slated to become the country's next prime minister. But it says something about the state of small-"s" socialism—in addition to the state of the world—that conservatives are attacking Zapatero for his response to terrorism, not his attitude toward capitalism.”

That is fair enough play with the specter that haunted Europe. And it is certainly true that Zapatero’s ministers assured the financial markets that the election of socialists does not entail the implementation of socialism – which is what socialists have been doing since Ramsay McDonald assured the City that he had no intention of producing policies that would actually benefit the working class, or chip even the slightest percent from the Bank’s bonds. Suellentrop is right to say that the neo-liberal agenda, in Europe, almost always advances in the Trojan horse of socialist parties.

“In One Hundred Years of Socialism, the historian Donald Sassoon notes that over the course of the 1960s, '70s, and '80s, European socialists went from wanting to get rid of capitalism to declaring "that they were the ideal managers of it."

But Zapatero, Blair, and Schröder are taking this a step further: They're dropping much of the socialist project of economic interventionism. The vestige of socialism they cling to is the commitment to a strong social safety net that can balance the inequities of unbridled capitalism. Schröder may be going the furthest: He's trying to cut Germany's welfare state in order to save it. (Americans might be amused that some Germans are outraged because they now pay $12.40 each time they visit the doctor.) Zapatero's shift toward market economics is understandable: He has to live up to the stellar performance of his predecessor. As the Wall Street Journal Europe noted this week, during José Maria Aznar's eight years as Spain's prime minister, unemployment dropped from 20 percent to 11 percent, and the country created 40 percent of the European Union's new jobs, 4.2 million of them. During the Socialists' 20-year reign from 1976 to 1996, the country's job growth netted out at zero.”

However, the crowing tone is rather odd, given that in the current Depression, the U.S. economy is being supported by a mortgage market that is, in effect, guaranteed by the government and financed through huge public/private corporations; that the record trade and spending deficits are being underwritten by Asian central banks – not least the central China bank, which is controlled by the Communist party of China; and that the most conservative president we have ever seen is running partly on a record that includes running up Medicare entitlements some five hundred billion dollars.

As for job growth – well, perhaps U.S. job growth shouldn’t exactly be bragged about right now. During Bush’s three year reign, the country’s job growth netted out as a loss of 3 million jobs, and that is probably a conservative estimate.

On the first point – as Hamish McDonald put it in the Sydney Morning Herald:

“Asia's depressed currencies and massive US dollar reserves are a recipe for an American recession...

Despite some evident misgivings about his rising level of indebtedness, US President George Bush's bankers of last resort are continuing to lend him the funds to pay for vital necessities like tax cuts, the war in Iraq and missile defence.

Toshihiko Fukui and Zhou Xiaochuan no doubt have their disagreements about Mr Bush's priorities, but as governors of the central banks of Japan and China, respectively, they are continuing to build up already massive holdings of US Treasury securities.”

Thus Lenin’s supposed dictum is neatly inversed. The capitalists, you remember, were supposed to sell the communists the rope with which they were to be hung. It appears that the communists are now doing the rope selling, and the capitalists are busy weaving it into nets to engage in hugely expensive adventures in neo-colonialism. Nowadays, you can’t tell the weaver from the weave.

But it is the trade deficit that points to an underlying story about the end of socialism as a “new economic arrangement that emerges on the political plane.” We have always thought that the decline in socialism, including the decline in labor unions, worked in tandem with the invention of the expanded consumer credit market. In short, the Bank America card was the potent weapon that destroyed Das Kapital.

This is a thesis that we have never seen pursued. This is odd. It is only by retaining that penumbra of credit that American families, in the early 80s, were able to initiate their middle class lifestyle survival technique, which consisted of pouring women into the marketplace. It is only by retaining their ability to take out mortgages on ever easier terms that the American consumer has floated even the weak American economy we see at present. In the meantime, what would appear to be the best opening for union activity in the past fifty years – the revelation after revelation of the gouging of corporations by top management – has resulted in nothing. If anything, a shift towards a lower and lower union membership.

We wonder whether the strains in this system are going to continue to deliver the benefits of social welfare under the aegis of New Economy capitalism, or not. The system itself has retained a stubborn invisibility – it does not seem to have occurred to any economic historian to inquire about the macroscopic effects of expanded consumer credit on the cultures of the Western countries even as economists push for policies that require an ever greater credit market to finance an ever greater level of demand.

There’s a nice moment in the French Lieutenant’s Woman (LI is reading John Fowles at the moment, since we’ve been hired to write a review of a John Fowles biography). The time is 1865. Sam, a valet, tells his employer, Charles, a fairly well to do scion of an aristocratic house, that he wants to get married and set up a shop. Sam claims that he has saved up 30 pounds – an incredibly good sum, over two years, considering that it is more than a fourth of his pay. To set up a shop, he needs 200 pounds. Where is he going to get it? He applies to Charles, naturally.

Today, Sam would probably apply to a bank. More than that, however: Sam would have been able to live above the immediate purchase power of his salary because he is surrounded by the invisible, omnipresent means to do so. In 1865, or 1853, banks would simply not loan money to the likes of Sam. In order to borrow money, Sam has to turn to his very human network – his family, his employer, his friends.

We underestimate the massiveness of these exchanges. It was in getting credit, as well as higher wages, that the working class came to know the bourgeoisie. It was face to face knowledge, it was indelible, and the hostility it created ensured the creation of further hostilities all over the West for two hundred years. The collapse of this face to face encounter erased a factor that played a huge role in the creation of class consciousness. In its place has come a form of mimetism – the imitation of the wealthier by the less wealthy. This is the prevailing mode in our everyday symbolic interactions.

The long implementation of the new form of capitalism, in the sixties and seventies, provoked a crisis of authenticity among the left’s intellectuals of the period. It is this that partly explains the popularity of total systems of control – whether it is Foucault’s regime of surveillance, or Galbraith’s technostructure. By removing the traditional modes of hostility from the relationship between the working class and the management class -- by removing, in effect, the theater of the negotiation -- the system, in effect, paralyzed the working class, and put its intellectuals into an untenable position. The smartest of them, like Foucault, realized that the dialectical truth of the moment was not simply that control had achieved a greater level of penetration and invisibility, but that it had suddenly created both the means and the necessity of producing pleasure.

Well, we will see if this system can overcome its contradictions. One thing is for sure: the death of socialism was not a victory for capitalism. Both were utterly transformed in that struggle. To tell you the truth, the struggle still goes on. In spite of Suellentrop’s crowing.

Thursday, March 18, 2004


Shell Comes clean

Published: March 18, 2004

LONDON (AN) -- In a surprise step, the Royal Dutch/Shell Group of Cos. said Thursday that it hadn’t been in the oil business for twenty years. “All our profit comes from selling clothes to second hand clothes stores,” new CEO “Crazy” Jan van Alpers admitted. “Jeans and sh*t like that. Also, we are into selling returnable bottles. My vice president just made like 10 Euros this morning, man. We slapped that right in the profit column. It is like these bottle are just sitting out there. People put ‘em in their trash cans, can you believe that sh*t?” As to the reasons for the announcement, van Alpers claims “we used to go out and look for oil and that kind of sh*t, but it was so expensive, dude.” Reducing its estimated reserves of oil by an additional 250 billion barrels, van Alpers added, “the only oil left in this company is olive oil. We mix it with a little feta cheese, a little vinegar, briskly shake it up, and pour it over our salads at the board meets before we light up a blunt. Do you want some?”

LI is writing a review of Niall Ferguson’s new book for the National Post. And so we’ve been thinking about vedette English historians. And that got us thinking about AJP Taylor. We are shamefully ill versed in Taylor, and so we’ve been eagerly making up for our ignorance. He is a famously wonderful writer, who favors a crisp military organization of the sentences in his paragraphs. They have that imperative ring, like Napoleon’s dispatches to his troops. Except the imperatives, here, are about sorting through the on-coming mass of historical detail to charge through the progress of characters and their downfalls in endless traps of irony, accident and misunderstanding. Taylor is Rorty’s kind of historian – he has a weather eye for contingency. For him, the story of what caused WWI has to take into account that, on a simple level, it was caused by the assassination of a non-descript archduke and his frowsy wife in a peripheral town. The great structure of underlying causes remains, in Taylor’s view, petrified if the contingent act – and its prolongation in other contingent acts – does not come to free them. An essay on Taylor by John Boyer puts it well: Namier [ Taylor’s mentor] enabled Taylor to use the ‘great men and nation state” model of Central European political history in a way which revolutionized it twice over, once by the idea of catastrophe rather than progress as the principle mode of continuity and evolution in Central Europe, and again by contingency and accident as a new kind of individualism in political history. For what Taylor did to central European history of he neo-Rankean mode was to stand it on its head. He retained the idea of evolution but converted it into a catastrophic pattern for Germany rather than an optimistic providential one…”

Taylor begins one of his essays with a parable/joke that explains a little bit how a catastrophe can be a mode of continuity. A man is asking his parish priest about miracles, and he says, well, if I fell off the cathedral to the ground and was unhurt, what would that be? The priest replies, an accident. Well, says the man, what if I did it a second time. It would still be an accident, the priest replied. Okay, said the man, what if I did it a third time. Then it would be a habit, says the priest.

Such a view, at the moment, is in heavy disfavor. We live in a moment in which all the lumbering, bogus historical models that had their great moments in the 19th century, and after WWI, have been dusted off. Representative of this: a few years ago, Paul Kennedy wrote an essay in the Atlantic about Taylor that was an assault on the anti-generalist history he represented. The causes, in this return to a romantic historical philosophy, discover their moments, lurking underneath, as Intentional as the Furies, and only the shallow mind claims it is all accident or habit.

Well, too much looking for what is underneath or above does tend to distract one from what is right before one’s eyes. When Spain, this week, pretty much signaled that it is an unwilling member of the coalition of the willing, much rightwing indignation was spilled about appeasement. We thought the appeasement charge was bogus, but we also thought of Taylor’s description of a proposed alliance between Germany and England in 1905: ‘What the British wanted was an ally against Russia in the Far East. They would provide a navy, and the ally would provide the men. Very nice for the British. But from the German point of view it was an insane proposition… to commit themselves to a largescale war, a war of life and death, for the sake of British investments in Shanghai and the Yangtse valley.”

Exactly. Only a nation that mistakes the interests of its policy elite for morality itself would ask such a thing. We won’t draw the parallels any further.

Tuesday, March 16, 2004


Since LI has gone hardcore about the missing Osama bin Laden (day 921 since the promise of his capture), we’ve gotten some flack for putting a premium on his capture or death.

There’s an interesting story in the Chronicle of Higher Education about terrorist cells. According to Jonathan David Farley, a mathematician, the connectionist idea that was so popular in the wake of 9/11, according to which one terrorist are nodes on a graph, connected by links, understates the organizational resiliency of cells:

“When FBI agents arrest a few members of a terrorist cell, how can they know if the cell has been disabled? Several scholars have brought mathematical tools to bear on that crucial question. Social scientists have imagined individual terrorists as nodes on a graph, most of whom are connected to only one or two other nodes. Using such cellular graphs, the scholars have proposed ways of estimating whether a chain of relationships has been effectively shattered, even when some of its members elude capture. But those models are too simple and too optimistic, according to Jonathan David Farley, a visiting associate professor of mathematics at the Massachusetts Institute of Technology. In the November-December issue of Studies in Conflict and Terrorism, Mr. Farley proposes an alternative method. We should imagine terrorist cells not as graphs but as ordered sets, he says. "Lattice theory, my field, is the abstract study of order and hierarchy. In terrorist organizations, hierarchy appears to matter."

As LI understands it, there are two major kinds of networks – egalitarian networks, in which the ordering is non-hierarchical, and hubs, in which networks form around or through 1+ intersections, with a disproportionate number of short distance lengths from the intersection to other links in the network compared to other links. Farley’s idea is that using the model of weak ties between cell members as a template for rolling up terrorist groups ignores the importance of hierarchical structure in sustaining and regenerating cells.

Here’s the money shot graf:

“Mr. Farley offers an equation for calculating the probability that a given cell has been disrupted. His formula is gloomier than the "graphic" models offered recently by other scholars. In an example in
which four members of a 15-member cell have been captured, he says,
the standard graphic model would suggest a 93-percent probability that
the cell had been broken; Mr. Farley's equation yields only a
33-percent probability. "I'm not selling mathematical snake oil,
suggesting that we can actually make exact predictions," he says. The
point is instead to give law-enforcement agencies a rough idea of how
to allocate their resources.”

My guess is that Bush’s comments (rare as they have been) about having killed or captured ¾ of the Al Qaeda organization is using an extrapolation from a graph model of the kind Farley is countering. We are not mathematical enough to even pretend to compute Farley’s equation, but we can make common sense of his assumption about hierarchy – it is the old chain of being metaphor equipped with plastic explosives.

Is it true? Well, we’d guess that it is at least plausible. The NYT contains Kerry’s first shot against Bush, and it is a hopeful one. Poor Kerry – since the Dems rolled on their belly before Bush in 2002, he has to break the shell of invincibility that has been woven around Bush since 9/11 on his own. It isn’t going to sink in immediately. Let’s hope Kerry realizes that he has to keep attacking here. Bush’s unwillingness to go for the kill – in fact, his frank disinterest in the only terrorists that really threaten the U.S., since Tora Bora – could undo our woeful Childe Bush by the fifth act.

Monday, March 15, 2004


930 days since Osama has not been brought in Dead or Alive.
Where is your promise, George Bush?

We usually avoid referring to certain popular rightwing weblogs on this site. There are plenty of other sites to do that. But we couldn’t help but peek at the Instapunditry about Spain. Naturally, they were bummed. Andrew Sullivan’s comment was the most typical.

He begins: “It’s a spectacular result for Islamist terrorism…” Of course. The Spanish people were moved, after having 200 of their fellow citizens blown into nothingness, to embrace Islamic fundamentalism. Or no – it turns out that they were embracing something else: fear. Sissies all, unlike the testosterone fueled Sullivan.

But to go on and spray paint over the low level of Sullivan’s dull tabloid-isms is unworthy of this blog. Let’s skip to his point, which is here:

“But there’s a real ironic twist: if the appeasement brigade really do believe that the war to depose Saddam is and was utterly unconnected with the war against Al Qaeda, then why on earth would Al Qaeda respond by targeting Spain.”

Let’s also skip the “appeasement brigade” thing. LI is tempted to respond “…crypto-fascist…” but that would be, as George Bush might piously say, wrong. Let’s go into those verb tenses, shall we? The “is and was” thing? There were two schools about the invasion of Iraq. The larger school had not opposed the invasion of Afghanistan. Why? Because they felt that the U.S. had the right to respond to an attack. The attackers were located in Afghanistan, and they were protected by the Taliban. Hence, to get them, one had to overthrow the protecters. Which was done. Horribly enough, after that was done, the Wrong Way brigade, as we will call, for convenience sake, Bush’s administration and his supporters, did not finish the job. No, they left Osama bin Laden to hang there. Bush, by relentlessly and consistently refusing to pronounce his name in any of his speeches over the past six months, seems to believe that he disposed of him.

Now notice, here, that it was the right that made a big point of disparaging Kerry’s idea that terrorism should be dealt with as a law enforcement matter. And notice what they did: they treated catching Osama bin Laden as a law enforcement matter.

Let’s hypothesize, for a moment, that Osama bin L. was really connected to Saddam before the invasion. Then wouldn’t it be logical, before the invasion, to mop up with the central symbol of the terrorist threat, which after all could be carried into the backyards of any of the Coalition of the Willing?

Of course it would. But then again, these people didn’t really believe their own propaganda. This is why they have left us pretty much unprotected while they took a turn in the “war on terrorism” that had nothing to do with terrorism.

End of hypothesis. Back in 2001, Al Q. had minimal contact with Iraq – although as we know, it had great contacts with our ally, Pakistan. That Al Qaeda is now willing to embrace the cause of Iraq has everything to do with something Sullivan seems to have forgotten: Saddam H. is in prison. Yes, time marches on. Because Sullivan wants to confound the ‘is” with the “was,” here, he ignores the very history he has been busy celebrating elsewhere. You have to go back to Clinton to find a more interesting use of the meaning of “is.”

A child of five could see through Sullivan’s rhetoric. That is when, I believe, Piaget claims that children begin to understand the difference between the truth and lying. But the arguments of such as Sullivan are starting to play badly with the rest of the world. They are starting to sound like the robotic repetitions of a cult, with its wearying faith in the bogus messiahs of the American Defense Department . One is reminded of an old psychology classic – the Seven Christs of Ypsilanti. Seven men, each of whom was possessed of the delusion that he was Jesus Christ, were put into a room together. Cruel, I know. The results were interesting. Each came up with a highly entertaining version of the delusions entertained by the others in the company, as in possession by the devil, electrode implanted in the brain, and so on. Sullivan has never been a logical guy, but this raving is more in the range of that kind of experiment. However, reality is starting to shudder through the cult. Suddenly, Osama can loom as an issue again – and not as the captive at George Bush’s convention feast, but as the man who got away, and has been away for 930 days. I believe that is the count. I am going to begin keeping that count on my log. I think that the question of the lapse of U.S. vigilance, as the pursuit of private ideological ends dragged us into Iraq, will possibly skew in ways which will not be pleasant to the Right. Even if, as seems probable, Bush is stirred to finally fulfill his promise. Too late. Too late, in that the network has ramified. Too late, in that the Bush people have cynically concluded that the American people won’t pay attention to the increasing cycle of violence. Too late, in that the claim that 2/3 of Al Q. has been rendered inoperative turns out to be a big lie. Another big lie.

Sunday, March 14, 2004


I’ve been having an interesting email fire fight with my friend B., a Bush supporter. Yes, Virginia, I know Bush supporters. Plenty of them. Some people I know have expressed shock -- myself, I think if you don't know anybody who supports Bush, you are living in a bit of a bubble, no? Anyway, like other Bush supporters I’ve met, there is one area in which they respond as though bitten by a snake: that is the accusation that Bush has displayed vast incompetence as a military leader.

It has become a default in American politics that Republicans are strong on defense, as the press likes to say – strong War-makers, to be less euphemistic – and we are worried that Kerry, who is a process Democrat, is going to let that reputation go unscathed. He shouldn’t. He should scathe it every chance he gets, and stuff his inclination to reference the U.N. like a maniac every time talks about U.S. Foreign Policy. Process is for cheese sandwiches, Senator. Attack is what is called for.

The latest NYT story about the selling of weapons by Pakistan is a perfect illustration of the Bush administration’s failure to mount a competent war. Our critical dependence on Pakistan has been aggravated by Bush’s decision virtually to suspend the hunt for Osama bin Laden, and the difficult work of capturing important Al Q operatives, in order to invade Iraq. Bush’s decision was made all the easier by the process politics favored by the Dems. Instead of sustaining a count down, on the model of the hostage crisis count down, of days that Osama bin Laden has escaped the force Bush promised would bring him in, dead or alive, the Dems have basically given Bush a pass. That pass is going to cost them in this election.

It doesn’t have to. Here’s how Bush's masked timidity has played out in the crucial Central Asian area.

1.By allowing Osama bin Laden to play the traditional game of bandit leader, Bush's victory over the Taliban looks increasingly hollow. Don't mistake me -- that the Taliban regime no longer rules from Kabul is a good thing. But the Taliban was a secondary goal. They never attacked the U.S. -- they confined themselves to bombing age old and precious statues of the Buddha. Their sole role, in this game, was to protect Al Qaeda. That is why they went down. Al Q. didn't. The bandit leader wins, in this game, by transforming his mere survival into a symbol. After Osama's group attacked on 9/11, the world, and especially the Central Asian world, expected Osama's group to suffer. They have, but in proportion to their crime, they remain remarkably intact as a force. And that survival is a recruiting advantage. Bringing down Osama bin wasn't going to end attacks against the U.S, but it would make them look increasingly ridiculous. Instead of pursuing this course, Bush has presided with his usual sublime oblivion over a spate of violence that has extended, now, from Saudi Arabia to Madrid. His only response has been to assure Americans that two thirds of the Al Q. force has been captured or killed. Unlikely, we reply. The main issue is to discourage Al Q. -like groups from multiplying. That Al Q. itself is wounded means little, if its spin offs, using the same networks, are able to work within the umbrella of its symbolic power.
2. Osama is not the only beneficiary of the hiatus in the war against Al Q. Think the Pakistan military. With the withdrawal of focal American forces to fight in Iraq, we have been thrown on the tender mercies of the most sophisticated network for diffusing under the table nuclear materials in the world. Of course, God knows what else they have diffused. Or no... we don’t have to consult the almighty on the question of diffusing aid dollars to Swiss bank accounts. We’ve known about that for some time.
3.So now we are in a political season in which Bush is surely going to rekindle the search for Osama, meaning that he is stuck sucking up to the Pakistanis, with the full approval of a Republican propaganda machine that went into motion against Saddam because of a vague threat to assassinate an ex president ten years ago. Well, in comparison, the incineration of Tokyo is peanuts. It is easy to predict that the lag between threat and realisation has allowed Osama to accrue the kind of symbolic power that will make the result of his capture destabilizing. Unlike Saddam Hussein, Osama is a hero in some parts of the world –namely, among the poorer people of Pakistan. Capturing Osama might well read to such a revolt in Pakistan that the leadership could either be damaged or brought down. We all know that Bush’s hopes reside on some outstanding reminder, to the American people, of how successful he has been as a War leader. The affection that will flow to Bush from the capture of Osama could certainly carry him into a second term. But that capture, if it isn’t timed right, could easily be overshadowed by the unexpected consequences deriving from his real incompetence – from the lag between the vow to capture Osama and the reality of the capture.

Kerry can’t counterpunch Bush by reverting to the genial mush of foreignpolicy speak. If he doesn’t use this time to frankly mount those attacks on Bush’s foreign policy leadership that will impact here, at the crux of the issues that engage us emotionally, Bush will Aznar him – polticize a terrible mistake into an electoral victory.

olivier blanchard and the free lunch: a comedy of errors

  The neolib economist Oliver Blanchard tweeted a very funny comedy bit, in which he played the part of “social democrat”. And he wrote: “As...