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Wednesday, August 19, 2015

Not My Stonewall.

Erasure of people of colour in a Hollywood feature is nothing new. Nor is the tired practice of casting a cisgender man in the role of a Transgender Female character. Roland Emmerich’s Stonewall movie however takes erasure to new heights. The 1969 stonewall uprising was by all means the turning point for LGBT liberation
The stonewall uprising it ‘self was not an Isolated incident but rather another in a series of protest actions in major cities across the United States of America the earliest occurring a decade before stronewall at Coopers Doughnuts in Los Angeles. This was followed by other direct actions throughout the United States most being led by Transgender Women of colour. Its important to realize the class as race distinctions played a huge part in LGBT oppression during this era. Rich Homosexual men tended to suffer under the anti-gay laws in the USA during this time period. Working class Queers suffered far more than the rich and Queer people of Colour faced discrimination even within the LGBT community (some would argue they still do to this day). Trans people were themselves seen as bellow most of the gay community. And Homeless Trans women of colour very much bore the brunt of the anti LGBT laws of that time.
The stonewall story can’t be told properly without understanding the dynamics of oppression that caused not only stonewall but also the preceding actions of the prior decade. Without this basic understanding the Roland Emmerich movie is nothing more than a Hollywood fantasy that shares only the name and location of a significant historical event.  

Saturday, August 15, 2015

Solidarity with and for meat workers more important than ever

originally published on the Daily Blog. published here with the permission of the author.

Solidarity with and for meat workers more important than ever

More than 70% of AFFCO’s meat workers are Maori, in communities where alternative work options are few, where jobs are a scarce and valued commodity, and where loyalties to the industry are strong.
The wealth of the Talley family is over $300 million. That’s more than any family needs to meet reasonable life time aspirations. It’s certainly enough to carry great currency in a country where family dynasties influence environmental and employment law. It’s an obscene amount when Talley’s workers face worsening employment conditions under increasing pressure to maximise throughput, long hours in dangerous settings, increasing casualization, real health and safety risks, threatened loss of seniority rights and a stripping away of union protections and voice.
But there’s a convergence of both class and racial injustice in the way the Talley family acquires companies, strips union and workers’ strength and pushes employment conditions to the wire in pursuit of yet more profit. Here’s a white family with more money than anyone could ever need, screwing thousands of (mainly) Maori workers and forcing them to work harder, increase process outputs, under less safe conditions, with fewer rights so the Talleys themselves can accumulate more.
More than 70% of AFFCO’s meat workers are Maori, in communities where alternative work options are few, where jobs are a scarce and valued commodity, and where loyalties to the industry are strong. With families to feed, workers do not take strike action lightly. But given the power imbalance between the employer and employed, workers have to stand together if they are to stand at all. In the long struggle against workplace oppression in AFFCO meat plants, solidarity between iwi, workers and unions has been key. The important force of this relationship was proven in 2012 when after a three month lock-out by Talley’s of its workers, iwi interests threatened to withhold stock supplies until an agreement with Maori workers was reached, broke the stalemate, and forced Talley’s back to the negotiating table in principle if not in good faith intent.
But last weekend, this essential troika that gave Maori / working class interests power against the Talley bosses, was undermined by arguably unmandated and illegitimate agreement reached between shed president/secretaries, Tuku Morgan and Ken Mair, and Peter Talley, which saw this week’s well planned and supported strike, and rally at Parliament, called off. The disappointment, disbelief and dismay among workers, unionists and supporters, was palpable. What had been given up, and why?
The common interests of Maori and workers were fractured. The union was undermined, by an agreement that pulled the legs from the common call to stand together and strike. The shed bosses, the ‘iwi representatives’ and Talley’s agreed to a two month negotiating period, as long as the strike was called off, all legal cases were dropped, and the Meat Workers’ Union was dismissed from negotiations. Despite the illegality of this proposal, and lack of vote –and even meetings- from many union members on some of these sites, Talley’s managed to exercise their vicious divide and rule tactics and drive a wedge between the overlapping interests of class and race. The unrepresentative representatives of the workers were conned into believing the wiley old Talley leopard had changed its spots and was finally ready to negotiate in good faith. All this has done is undermine the union, give extra confidence to Talley’s, (another round to Talleys in the long fight), given Talley’s a bit of breathing and production time while they pursue employment law changes as a bigger agenda.
The Government’s support for greedy mistreatment of workers saw Peter Talley receive a knighthood for services to industry and philanthropy earlier this year. Clearly the state condones, and even repackages as benevolence, anti-worker, anti-safety, punitive and exploitative employment conditions.
But all is not lost in the battle between meat workers and the hard-nosed capitalists, Talley’s. The tenuous agreement for further negotiation excluding the Meat Workers’ Union may yet unravel. Dissent about the decisions made by Morgan, Mair et al, may yet lead to a revised position. The facts of the matter haven’t changed – and Talley’s continues to use night shift and other sanctions to punish resistance. It’s an opportunity for the Meat Workers’ Union to regroup, and to consolidate its position and its power. A class based alliance would see iwi as again key to this bulwark against Talley’s exploitation of workers and Maori.
In the meantime, the market is king, and the way those of us who aren’t meat workers, can support those who are, is by using the market to punish Talley’s, and to undermine their market share. As consumers we have a role in resisting oppression of those who have a vital role in putting the food on our table. Mike Treen advises a boycott of Talley’s products, and John Minto discusses economic sabotage in the form of damaging Talley’s goods; other non-economic options include targeting the Talley family in their Nelson mansions as was done in 2012, taking the fight to the source of the oppression in their opulent towers. As members of other unions, we also need to stand side by side with our brothers and sisters in the meat industry. No one is without power, and we all need to lend our power, whatever its form, in support of those who are obviously exploited by the food barons of this land.

Christine Rose

Christine Rose is employed as Kauri DieBack Community Co-ordinator by the Auckland Council. All opinions expressed herein are Christine’s own. No opinion or views expressed in this blog or any other media, shall be construed as the opinion of the Council or any other organisation.

Another Aotearoa Is possible Tppa protest 15/8/15

A return to street politics with nationwide demonstratons against the tppa

A return to street politics with tppa demos throughout Aotearoa.

Thousands of peeople took to the streets of Auckland and many more in other centres throught Aotearoa to protest the tppa. Socialist Aotearoa were out in force at the auckland demo.

Saturday, March 21, 2015

The Time has Come for Rent Control

By any measure, the housing market in Auckland is overheated.  Thousands of Kiwi first home buyers are being forced out by Speculators looking for a way to trade printed  money for physical assets.  New Zealanders are witnessing the effects of the quantitative easing “tsunami” washing up on our shores.  Some see this as an opportunity, a rising tide.  But all tides must eventually turn, and when this one does, the Working Class will watch helplessly as all prospects of ever enjoying housing security will be washed out to sea.

Ordinary home owners have to work for their money, and they pay significantly more than the 0% interest rates offered to Wall Street insiders. New Zealand has one of the most open housing markets in the world.  Unlike Greece, Mexico, China and even Australia, where it is difficult for foreigners to buy houses without meeting stringent requirements, foreigners can buy New Zealand residential property over the phone, so long as they are prepared to do a little paperwork afterward. Additionally, there is no Capital Gains Tax, and no limitation on the number of properties that can be owned.  Because of this, New Zealand homes are bought and sold on the global market, exposed to the chill winds of international arbitrage.

Competition from overseas buyers has only served to stoke the enthusiasm of local speculators.  There is a seemingly inexhaustible supply of money for lending through our foreign-owned banks.  Unfortunately, money borrowed overseas for local property purchases must be repaid overseas, with interest, creating generational problems in our balance of payments. Rising house prices beggar the nation.  Our children will be forced to repay these loans by surrendering all the wealth built up by their parents, without ever getting the enjoyment of it.  Interest on loans based on inflated property valuations is “magic money”, created at the stroke of a pen, but it must be repaid in money earned by real work.  This is how International Banking works, or rather, how you work for International Banking.

This situation could be alleviated with legislation designed to cool off speculation, but no such legislation is even contemplated at this time.  The “Housing Accord” purports to have built thousands of houses, but there is little evidence of this; the median price for an Auckland home has just passed $700k.  Labor and National together have almost identical do-little policies, proving once again that New Zealand has had what amounts to a One Party political system since 1984. 

This forment of market activity over the last 30 years has been hailed as a resurgence of “capitalism” after the long years of the New Deal era.  However, collecting rental properties is not genuine capitalist investment, as no real surplus value is created in the form of new goods and services, except where new housing stock is built.  “Rents” collected are not production, they are transfers. The “Rentier Economy” simply churns property, while producing little economic growth. This is because houses are homes, not businesses or factories.  A residential property is not a “means of production”.  Even the Real Estate service sector actually produces nothing -  it and the banking sector with it are essentially economic “drag”.

Once we clear away the brain-fogging hype of property marketeers, what we have at the base of everything is the honest urge to live securely in a healthy, stable home.  Whether it is by renting or buying matters little, it is security that is at issue.  The dream is to live somewhere safe and secure for long enough to accomplish one's real life-goals; the raising of children, the creation of community and the actualisation of self.

Americans know all about this;  Americans once confronted property speculation in their cities with implacable collective action.  Unable to compete with speculators, many workers revolted, and won what is now known as “Rent Control”.  In San Francisco, and in New York, two famous Rent Control cities that could hardly be called “Bastions of Communism”, many tenants enjoy lifelong right of occupation in rented homes, with no rent increases.  Ever.  They are as secure in their homes as if they effectively owned them.  And while some of the controls have been eroded over time, many tenants in Rent Controlled properties have continued under these agreements for decades, paying the same rents they paid in the 1980s when they first moved in.

Despite the dire predictions of many, San Francisco did not fall into the ocean, the rich of the city were not strung up from lamp posts, and indeed the property market in San Francisco remains the picture of health.  If you have the money, mortgage free, you can buy whole apartment buildings, happily and securely tenanted, with predictable rental returns sufficient to pay property taxes and reasonable maintenance.  But what you can't do is buy buildings wholesale using mortgage debt;  the rents won't cover the loan repayments, and that is actually by design.

Why are even the rich of San Francisco happy with Rent Control?  Because the beast Speculation was stopped from devouring the people who made the city what it was.  Rent Control preserved the quality of life and the character of the city.  San Francisco is in many respects a much more liveable city than Auckland, and this is directly attributable to the longevity and stability of its residents.  San Franciscans looked at where they lived, on a narrow harbour peninsula not too different from Auckland, and realised that urban growth was something they did not want.  Today, San Francisco is a colourful, low-rise city, made up mostly of homes and apartments.  There are very few high-rise towers.  When you are in San Francisco, you know it, you are not confused by the globalist homogeneity that characterises most of the world's major city centres.  Rather, throughout San Francisco, vibrant communities thrive, producing culture, the arts, music, theatre, political engagement, generating a stable tax base for the city administration.  Even low-paid workers are able to spend and contribute to the economy, because of their improved purchasing power.  Only in areas where residential tenancy is short-term and unstable, as it is near the Tenderloin do San Franciscans see serious crime.

It is time to introduce Rent Control in Auckland.  Auckland needs to learn how to create urban community, similar to that found in San Francisco and New York.  This cannot be done while tenants are kept in a constant state of precarity and farmed for rent like battery hens.  If the city of Auckland does not correct itself, it risks becoming an urban desert or worse. Auckland is headed toward a sterile future, resembling inner London, where social policies which favour rich property speculators have created gleaming towers of empty apartments devoid of genuine cultural life and the diversity that goes with it.  The urban working poor who created the “Swinging London” that fostered the likes of David Bowie, the Rolling Stones and of course, the Beatles are gone now. The hoard of grasping Trust Babies, Sloan Rangers or Princeling-Brats are no replacement; they have cash, but create nothing.

As important as cultural arguments are, there are serious issues which make Rent Control especially urgent.  Workers need action now on housing security.  If gleaming sterility was the worst that could happen, we could bear it.  But those soul-less towers in London are surrounded by a growing-thing to be dreaded; “The Favela”. You will never see the “Favela” mentioned in any of Auckland Council's glossy brochures.  But it is definitely there, if you look beyond the sunny scenes of face-painted children and cardboard carnival attractions.  It is conspicuous by its absence to those who actually live in the city and know of its existence. “Favela” is the Portuguese word for the massive super-slums growing up around most of the super-cities around the world, like Rio, New Delhi and Mexico City.  Favela's are populated by workers surviving off of the refuse of the gleaming precincts at the centre of their sprawl.  Its inhabitants service the sprawl, and subsist on it.

In his outstanding book, “Planet of the Slums,” Mike Davis explains how “Landlordism” is the spine of the Favela, running from top to bottom, preventing anyone in its clutches from ever escaping.  A towering chain of property rights and sub-leases create a grubby aristocracy linking penthouses at the top to the local Patron collecting rag-bags for rent at the bottom.  The residents of the Favela must pay rent to sleep and eat, even if the space they rent is barely enough to lay down in.  Rents of more than half of all earnings are common.  And flowing upward, ever upward, billions of tributaries tinged with blood converge to make a mighty river running uninterrupted from leachate pond to presidential palace.

The most horrifying aspect of the Favela that Davis describes is the impossibility of escape or any hope of returning to one's former prosperity, once entered.  Without a safety net, even traditionally stable middle class public servants and well-educated professionals can trip and fall into the maw.  New residents are immediately and mercilessly exploited by landlords sub-leasing space in dangerous shacks perched on the smoking slopes of the toxic waste-dump where they will likely spend the rest of their short unhappy lives.  In this hell, there is no leisure, no saving for emergencies, no chance to get clean or relax, as each day leaves you with just enough money to begin the next day at zero again.
This process has already begun in New Zealand.  There are thousands of workers who live like this, unsuspected, in our city.  They sleep 5 to a room, and wash at work, making just enough money for bus fare to and from the mouldy rooms they rent from their exploiters.  We are barely cognisant of them when they serve us.

What was once unimaginable is now an alarming reality on the streets of Auckland. Uncontrolled residential property speculation and uncontrolled rents are the fuel for the fire in the Favela.  It is not the evidence of third-world conditions, but the precarity of the workers and the degree of their exploitation which is at issue.  The Favella exists all around us.  The accelerating mass-migration of workers to the outskirts, and their subsequent disproportionately high rents indicates the trend.
What drives people into the Favella?  It is the inability to pay rent which causes the inexorable slide, forcing people lower and lower into the depths.  As more workers slide into the Favela, the Favela becomes a self-sustaining vortex, pulling more and more people into it, as its edges blur, converge and intrude on us all.  Once the Favela takes hold, it becomes permanent – not even fire, or regular surging invasions by police can touch it. Auckland may be years away from seeing slums like Rio, but by that time, but that is more due to differences in scale and initial conditions – the tendency follows the same trajectory.  The Favela becomes a seething mass of population, trapped in what the French call “System-D”, without laws or regulations, but by no means free.  With no place else to go, without even the ability to escape in their dreams, till the garbage-generating civilisation which supports it collapses.

We can stop this.  The Workers of Auckland must combine to resist this tendency before it is so deeply established that it can never be reversed.  Nothing less than a united coalition of all workers, unions and social justice organisations can avert the crisis.  Rent Control has been the remedy used in some of America's largest cities, and it can work here. But stop it we must, before it is too late, and the Favela grows to consume us all.

Linda SA

Monday, November 10, 2014

A Critique of Crisis Theory- a Socialist day school with Mike Treen

The following is based on talks given by Mike Treen, national director of the New Zealand Unite Union, at the annual conference of the socialist organisation Fightback, held in Wellington, May 31 - June 1, 2014, and a seminar hosted by Socialist Aotearoa in Auckland on October 12. 

The National Business Review reported a comment by our Minister of Finance Bill English on August 15 that he had occasionally pointed out in speeches to business audiences that New Zealand has had post World War Two recessions roughly every 10 years: in 1957-58; 1967-68; the mid 1970s; the mid 1980s; 1997-98 and 2007-8. He would observe laconically: “You'd think we would see them coming”

But of course bourgeois economists, commentators and journalists don't generally see them coming. One problem, however, is that sometimes the Marxist alternative sees them coming a little too often.
But it is a simple fact of life that capitalism has had economic crises on a periodic basis at least since 1825. Every 10 years or so, capitalism goes through a cycle of boom and bust. The following charts for the US economy illustrate this reality.

Capitalism also goes through historical periods where the industrial cycles of boom and bust are more pronounced one way or another. That is, capitalism goes through periods of several decades such as the post-World War II “Long Boom” involving multiple cycles where the upturns are relatively stronger than the downturns.
Similarly there are other periods such as the decades following the crisis of 1873 where the upward phases of the cycle are relatively weak and the downward phases more pronounced.
Understanding these cyclical fluctuations is also closely connected to another element of Marxist theory that is important to explaining what is happening —historical materialism – which is simply a way of viewing and understanding history.
Human societies, ever since we humans began generating a consistent surplus, have been divided into classes where each class is defined by its relationship to the means and mode of production. The legal, political, social, and cultural elements of society arise from this economic foundation.
The relations and modes of production, which determine how the economic system is produced and reproduced, have gone through various stages as technology and the forces of production have advanced. The main stages have been slavery, feudalism, capitalism and the beginning efforts to construct socialism.
Economic systems do not pass away until they have exhausted their progressive functions in terms of increasing society's productive capacity, which in turn enables population growth and cultural development. When the growth of the productive forces reaches a certain limit within the framework of the existing society, the question is posed: Can the fetters of the existing social relations be thrown off and a new society established?

Marx's answers
Marx devoted his life to answering this question in relationship to capitalism. This was THE question from his point of view. Decades of research, decades of writing, decades of reflection—in between throwing himself into labour struggles and the odd revolution when they were happening. But he always returned to this basic task.
The key questions were understanding why capitalism operates the way it does and whether capitalism is a historically limited system—whether it will reach a limit and need to be superseded. Marx's answers are to be found in his writings, especially his great work known as “Capital”.
Our inability, so far, to supersede capitalism on a world scale means that periodic crises return again and again, each one causing great hardship while giving a powerful impetus to the centralisation of capital and the growth of monopoly domination.

The system's dependence on relentless expansion over time and its inherent drive to maximise profit rather than meet human needs means that we now face the incompatibility of this system with our coexistence with mother Earth.
That has become an element of crisis theory in the broader sense—demonstrating the increasing incompatibility between a livable environment and the way the system is organised through private property and ownership.

The crises, therefore, tend to get bigger, more prolonged, and more socially destabilising. I think we have entered with the 2007-08 world recession a new period like that.

But there is no final crisis in this system—other than a descent into nuclear war, or barbarism arising from the sort of ecological winter or runaway ecological collapse that capitalism appears to be preparing for us. Short of such a disastrous outcome, the system will continue to carry on with its booms and busts until it is overthrown and replaced.
That can only be carried out by a conscious social and political force, by a class that is not bound to the system by material interest. That is why the working class is the only class that can overthrow this system. It is the only class not bound by property and profit to its perpetuation. It is the only class with the numbers and social power, if organised, if conscious enough, to effect this outcome and bring about real majority rule.

Marx's challenge
The problem faced by Marx was that the challenge he took on in his writing of “Capital” was so daunting that all we got during his lifetime was the first part of a planned six-part work.
Marx published a Volume 1 which was part of his planned first volume in several editions. Engels, using Marx's notebooks, produced what we know of as Volumes 2 and 3 after Marx's death. Then there was the “Theories of Surplus Value”—a part of a rough draft of a history of economic thought. All of that was originally going to be the first volume of the planned six-part project.

There were to be additional volumes on wage labour, the state, the world market and competition. The entire work was to culminate in the volume on the world market. It was there logically that crises were to be dealt with in a systematic way. Marx does not deal with crises except in scattered references, mostly in Volume 3 of “Capital” and in his correspondence.

Marx's method was to begin at the most abstract level before moving progressively to the more concrete. In “Capital” he begins with the abstract categories of the commodity and value and moves through to the formation of prices and the role of money and the market.
He goes on to explain the origin of profit in surplus value and ties this all in with the origin of capitalism in what he called “primitive accumulation”. Systematic treatment of things like exchange rates, world trade and so on were to come later.
There was an added problem with what we know as Volume 2, published after Marx's death. Volume 2 is actually more a volume about how capitalism works rather than how it doesn't. Marx explains how capitalism must be a system of expanded reproduction and he presents formulas to prove that is how it must exist and in a sense how it can exist.
There was a certain consternation and debate inside the socialist movement when Volume 2 was published. The revolutionary ideas of Marx and Engels were already under attack within German Social Democracy, the German workers party at the time, which was led by followers of Marx and Engels. Volume 2 was used by critics of these revolutionary ideas to “prove” that capitalism worked and could last indefinitely—in support of the views of the reformist wing of German Social Democracy led by Eduard Bernstein.
Because the cause of crises wasn't fully spelt out in Marx and Engels' work, revolutionaries like Rosa Luxemburg started to look for explanations for why crises happen that didn't quite fit in with the logic of what Marx and Engels had written. She looked at the exhaustion of the world market. Others looked at things like the tendency of the rate of profit to fall, which was viewed as a long-term historical tendency by Marx.
This logic can be deduced not only from their major economic works but also from their journalism and correspondence where they wrote about and analysed actual crises until Marx's death in 1883 and Engels' in 1895.
Capitalism has also changed significantly since Marx and Engels wrote. These changes need to be incorporated into our understanding of crises. The system has evolved from industrial capitalism based on free competition to monopoly capitalism.

We have been through the Great Depression of the 1930s. We have had the experience of the “Keynesian revolution”. We have had the Friedmanite counter-revolution and the debates in economic theory around that.
We have had an end of the international gold standard, a very important event. We had the stagflation of the 1970s, and the neoliberal turn in the 1980s, which continues.
Most recently, we have had the global “Great Recession” of 2007-2009, followed by an unprecedentedly weak recovery, anaemic at best for most of the world.

We can expect to be going into a new downturn in a few years' time, which could turn out to be even worse than the last crisis.

Conflicting crisis theories
Marx had identified the essence of the periodic crises of capitalism as crises of overproduction very early on, even in the Communist Manifesto in 1848.

I am emphasising this because there has been a retreat from this analysis including among followers of Marx. In fact the two main schools of Marxist crisis theory today are not schools based on periodic overproduction crises.
One school is based around the primacy of the tendency of the rate of profit to fall (TROPF). Marx introduced this idea in Volume 3 of “Capital” as an important long-term historical tendency in capitalism. Marx also pointed out many counter tendencies, but over long periods the tendency is true. Many Marxist economists use that important theory as the primary explanation for why capitalism has crises.
This school of thought is associated with the US academic Andrew Kliman, and British theorists from the Trotskyist tradition including the British SWP leader Alex Callinicos and the prolific blogger Michael Roberts. All three writers deserve to be read, and there is much to learn from their writings.
But the almost monomaniacal attachment to the TROPF to explain crises leads them astray.
Michael Roberts even tries to explain the 10-year cycle under capitalism as a result of the fall in the rate of profit. It is of course true that every crisis is associated with a fall in the rate of profit, but that temporary decline is a result of the crisis not the cause.

Callinicos seems to deny the real growth of capitalism since the 1980s. Because the early 1980s crisis must have been the result of the TROPF, and since there has been no counter tendency big enough to overcome the falling rate of profit sufficiently, the crisis must be permanent. However, the world economy has more than doubled in size in that period, and we have seen an explosive growth in capitalist production in China.
The other significant school of thought is associated with the US Monthly Review magazine and its editor John Bellamy Foster. Foster is an important writer on economic matters for the magazine as well as being a leading theorist on the relevance of Marxism to understanding the ecological challenges of today. The Monthly Review school is very influenced by Keynesian ideas. John Maynard Keynes was a pro-capitalist economist who became very influential in the wake of the Great Depression of the 1930s.
Traditional bourgeois economic theory denied that capitalism could have crises. Keynes, looking at the crisis of the 1930s was forced to acknowledge the reality staring him in the face – that capitalism can have crises and in fact it seemed to him to have a tendency towards stagnation But he believed the state could intervene to greatly alleviate crises if not eliminate them altogether.
So from a Keynesian point of view you do not have a crisis of overproduction relative to monetarily effective demand, determined ultimately by the existing size and rate of growth of the global hoard of the money commodity—gold.

Rather, with Keynes you have a crisis of under-consumption that can be resolved by the state stepping in to purchase goods directly or printing money to give people to spend themselves and/or using government deficit spending to put more money into the economy. Part of the reason Keynes favoured ending he gold standard was to allow this to happen more easily.
Overproduction as the underlying cause of crisis which is based on Marx's concept of money as the universal equivalent has been, especially since the end of what remained of the international gold standard in 1971, all but forgotten including by most of those claiming to be Marxist.

System requires measure of value that is itself a commodity
A central part of Marx's perfected labour theory of value was that it requires—as does commodity production as a system—a measure of value that is itself a commodity.

Ultimately, gold emerged as the main money commodity because it is durable, contains significant value (amount of abstract human labour measured in units of time) in a small quantity, and is easily divisible. It can only be a measure of value, however, because it has value as a product of labour itself, measured by its monetary use value in units of weight.
The pro-capitalist alternative to that theory, as well as to Keynesian under-consumptionism, is dubbed Say's Law—an economic principle of early “vulgar” economics named after the French businessman and economist Jean-Baptiste Say (1767–1832). Marx dubbed them “vulgar” economists because they had ceased to seek a scientific explanation for what was happening and instead provided simple apologies for capitalism and its laws.
Say stated that production creates its own demand. Commodities are bought with commodities. Money plays no particular role except as an intermediary.

This idea, combined with marginalism—the theory that commodities have exchange value because of their scarcity relative to human needs—tries to banish the labour theory of value by claiming things have value due to their marginal utility and that generalised overproduction of commodities is impossible.
Essentially, this is a subjective rather than objective theory of value. Marginalism, which assumes Say's Law either explicitly or implicitly, was the end of bourgeois economics as any form of science. All bourgeois economics today is built on these two theories and can't escape them.
The abolition of the gold standard has created very real problems with the modern US dollar-based international monetary system, with permanent inflation, regular exchange rate crises and so on. Following the Bretton Woods monetary conference in 1944 up to 1971 when Nixon took the dollar off the gold standard money in everyday use nearly always had a legally fixed relationship to gold via the US dollar.
You could go to a central bank and demand a certain amount of dollars for your currency, which in turn would represent a specific amount of gold, backed by the bullion hoard in Fort Knox.
Prior to 1933, individuals as well as countries could demand gold for their paper U.S. dollars. After 1933, up to 1971, foreign governments and their central banks—but not individuals—could do the same.

But after the gold standard was completely abandoned, there was an assumption on the part of many Marxist economists that maybe Keynes was right on one point. Maybe now you could just create money at will. The state had the power not just to create tokens representing gold but create currency at will with no relationship to gold—now supposedly “just another commodity” like all others with no special role..

A big mistake
I think that is a big mistake. Ultimately, all non-commodity money—that is, token money and credit money—must have a relationship to a real money commodity like gold. This is true whether a formal gold standard exists or not. This lawful economic relationship still exists and therefore continues to be the underlying cause of crises of overproduction.
When they started to print money at will, in the 1970s, when Nixon said, “We are all Keynesians now”, what you ended up with was a severe bout of inflation as printed money lost value and lost its fixed relationship to the money commodity, which remained gold.
The “price” of gold surged—that is, it took more and more tokens to represent the same amount of gold. Monetary tokens were being devalued, and inflation was the inevitable result.

Engels (and Marx) on overproduction crises
The nature of a crisis as an overproduction crisis was spelt out by Engels in 1873.
Engels was a remarkable man. He worked managing his family business in Manchester for some decades operating as a capitalist in the textile trade. He did that so he could keep his friend and intellectual partner free to work on “Capital”. He hated what he did.
Engels was a brilliant man but he knew there was one person—Karl Marx—who alone at that time was both willing and able to carry through the critique of bourgeois political economy. Engels was willing to do whatever was necessary to enable Marx to work. The correspondence of Marx and Engels is extraordinarily rich in political and economic analysis.

Engels begged Marx to get on with the task of writing the book. Marx promised again and again that it was just around the corner. There came a certain point in his life when Engels could give the business up, and there is a wonderful letter where he expressed his joy at being liberated from his role as an industrial capitalist.
Engels did a lot of writing in defence of the joint views of Marx and Engels. On of his major works was a polemical work in 1877 called “Anti-Duhring” against a then fashionable but now obscure German professor that became an exposition of the mature views of Marx and Engels on a broad range of political, historical, philosophical, and economic ideas.
By this time, all of Marx's major economic concepts had been developed. He even wrote a chapter of “Anti-Duhring” himself. For those attached to the TROPF it is not mentioned once as a cause of crisis. However they did write an important paragraph summarising their joint views on the origin of crises under capitalism. It reads:
We have seen that the ever-increasing perfectibility of modern machinery is, by the anarchy of social production, turned into a compulsory law that forces the individual industrial capitalist always to improve his machinery, always to increase its productive force.
The bare possibility of extending the field of production is transformed for him into a similarly compulsory law.
The enormous expansive force of modern industry, compared with which that of gases is mere child’s play, appears to us now as a necessity for expansion, both qualitative and quantitative, that laughs at all resistance.
Such resistance is offered by consumption, by sales, by the markets for the products of modern industry.
But the capacity for extension, extensive and intensive, of the markets is primarily governed by quite different laws that work much less energetically. (Emphasis added)
The extension of the markets cannot keep pace with the extension of production.
The collision becomes inevitable, and as this cannot produce any real solution so long as it does not break in pieces the capitalist mode of production, the collisions become periodic.
Capitalist production has begotten another ‘vicious circle’.
The problem is Engels didn't spell out what these laws are that govern the capacity for growth of the markets and why they work much less energetically.

But he spells out that he see the cycles of capitalism and the crises they produce as a periodic collision of two counterposed forces—the physical ability of capitalism to use modern science and technology to expand production without limit, and the different, less energetic laws governing the growth of the markets.

Laws governing growth of markets
The laws that govern the growth of markets are connected to the role of the money commodity as a measure of value and periodic changes in the relative profitability of gold production versus the production of other commodities.

Gold is both the universal equivalent, the measure of value, and a commodity in its own right. Therefore its production remains key to understanding the laws of capitalism that determine value, price and profit.
But if you look at the history of capitalism there is a peculiarity about gold, because it is the ultimate measure of value, that production of gold tends to move counter cyclically to overall commodity production. So when there is an overall boom in production in society gold production tends to decline and during overall depressions in society, gold production tends to increase. This is an important mechanism for regulating capitalism.
As prices in gold terms (in weights of gold) rise during the rising phase of the industrial cycle, gold's purchasing power falls, gold production becomes relatively less profitable, and capital flows out of that sector, gold production slows, interest rates rise as money becomes tight, and the boom ends in a crash.
When prices in gold terms fall sharply in a crisis, gold's purchasing power rises, gold production becomes relatively more profitable, and capital flows into the sector causing gold production to rise, adding to the growing idle money hoard resulting from the crisis itself, pushing down interest rates, and the economy recovers.
The capitalist system seeks to escape the limits of monetarily effective demand by, as Marx explained some 150 years ago, expanding credit. But credit cannot, even with all the miracles performed by modern computers today, expand forever. In the end, the debt must be serviced—interest and principle paid—and eventually the game is up. Interest rates rise during the boom (overproduction) phase of the industrial cycle, credit collapses and another crisis is born.

'Critique of Crisis Theory' blog
In the last two years or so, I have been working with a small group of Marxists in North America who are doing a blog focused on economics that I highly recommend. It is called “A Critique of Crisis Theory”. What I have been explaining are essentially their ideas.
The first 40 or so posts of the blog are being turned into the draft of a book. The author of the blog, Sam Williams, and his collaborators have been working on their economic ideas for some decades. The creation of the Internet has allowed these ideas to be shared with a much wider audience than was possible before.
More recently, Williams has been responding to new developments and discussing with others who have engaged or critiqued his ideas.
I tried to critique his views on an aspect of economic theory I thought I had some familiarity with—productive and unproductive labour.
Classical economists and Marx recognised that not all labour performed was productive of value and surplus value. We can see this easily when we look at the “labour” of a policeman, priest or soldier versus the labour of a miner or factory worker. I think we can identify who is a productive worker in that picture.
It gets a more complicated when we look at the labour of bank workers and retail workers whose labour may or may not be necessary for production to occur. It gets even more complicated when we look at workers in health and education who may be employed in a private business producing a profit for the capitalist. Anyway that is the area I wanted to discuss.
Sam was patient in his responses and took the time to respond to my first questions in a very pedagogical way.
Then when I wrote back still disagreeing, he wrote an even longer and more thorough response that included a reference to Einstein, who, he said, proved that matter and energy are different forms of the same thing, just as physical goods and “non-material” services can both be commodities embodying labour value. That sealed the issue for me and I conceded that they had a far better understanding on this issue.

What I found by following the blog was that it appeared to answer many of the questions and doubts I had from my own reading of Marxist economic theory which has been an interest of mine though I am no “expert” which I will come back to. From a young age I had been very interested in Marxist economic theory. Initially I had been quite strongly influenced by a prominent Belgian Marxist economist by the name of Ernest Mandel. Much of what he wrote remains useful.
Mandel hints at the continuing importance of the role of gold as the money commodity in some things he wrote in the 1970s. He played an important role in analysing the “long waves” of 40 or 50 years' duration that appear to be a feature of capitalism, which I believe is correct.
The Critique blog author also believes long waves play an important role and provides an explanation for a long cycle based on long-term swings in gold production, which makes the argument for its importance even more powerful.
Another fine economist (Anwar Shaikh) who knows his Marx and supports an understanding of the history of capitalism involving long waves has produced a graph that supports the Critique of crisis theory on this point. He follows the long term movement of wholesale prices in the Us and the UK.

He shows in his graph that there is a movement in wholesale prices upwards during a period of the long wave that is dominated by strong upturns in the business cycles and trend downward in prices during a period of the long wave where business cycles are dominated by the downward phase of the cycle. The decline in wholesale prices is associated with a period of stagnation or long depression under capitalism. So we have the 1873-1893 decline, the Great Depression of 1929-1939, the Great Stagflation of 1967-1982 and a similar decline which he argues indicates a new Great Depression beginning in 2008.
To produce an accurate version of the graph he needed to measure the prices in terms of gold since in the period since the abolition of the gold standard there has been a permanent inflation in paper money prices that hides the real movement of prices in gold terms
This fits very closely with the Critique of Crisis Theory blogs view. This is summarised well in a recent blog which argues that:

As the production of money material declines, the quantity of money grows at an increasingly slow rate relative to real capital—productive and commodity capital. As a result, credit increasingly replaces money, eventually stretching the credit system to its limits.
Money becomes tight and interest rates rise. This situation, assuming capitalist production is retained, can only be resolved by a crash or a series of crises and associated depressions of greater than average intensity, duration, or both.
One result of a crisis or series of crises of greater than usual violence or duration is a lowering of the general price level—measured in terms of the use value of gold bullion—once again to below the value of commodities. This makes gold production and refining industries more profitable than most other industries.
Capital once again flows into gold mining and refining, causing the production of gold bullion to rise once again. The quantity of money then expands with low interest rates and “easy money.”
As the process of liquidating the previous overproduction goes on, especially of those commodities that serve as means of production, the accumulation of (real) capital stagnates. As a result, for a period of time, money capital is accumulated at a faster rate than real capital.
But once the accumulated overproduction—especially in the form of surplus productive capacity—is liquidated, a new “sudden expansion of the market” occurs leading to a series of industrial cycles dominated by the boom phases rather than the crisis or depression phases.
This “long cycle” is built into the commodity foundation of capitalist production and is the inevitable result of the commodity form itself once it is fully developed.
But this cycle is also affected by accidental events such as discoveries of rich new gold mines and technological improvements in gold mining or refining that can either weaken or reinforce it depending on circumstances, as well as by such “accidents” as wars and revolutions.

So history is not an automatic repetition of cycles but a complex process involving both chance and necessity.
Williams and his collaborators are very orthodox in demanding a return to Marx on the nature of capitalist crises as crises of the general overproduction of commodities, as well as incorporating major developments of the capitalist system in the 150 years since Marx and Engels wrote and incorporating it into a better way of explaining what is happening today.

An important contribution
The Critique of Crisis Theory blog is making an important contribution to Marxist economic theory today. The blog is getting thousands of page views a month and becoming influential in Marxist economic debates. It is getting the recognition and respect it deserves.
The world reality we face today is conforming to the central theses of the blog. The 2007-2009 crisis more than any since the 1930s was clearly a global crisis of overproduction. There were simply too many houses, too many cars and so on. Of course “too many” from the point of view of being “too many” to be sold for a profit not in terms of human need.

Can't leave it to 'experts'
I think we all should pay respect to the founders of scientific socialism and give this issue of crisis theory the attention and importance it deserves. We cannot leave it to others, to so-called experts.

I am not an “expert” on this stuff. It has been a continuing interest of mine, because it is important that we understand it and because it is important we understand who we are, what our role is, what we expect will happen to this system, who the agent of social change is going to be, and what the prospects are for making that happen in the world today. Those are all issues we can begin to address.

Wednesday, November 05, 2014

TPPA, bad for your health?

Is the Trans Pacific Partnership Agreement (TPPA) the biggest threat to our democracy in a generation, or is it really going to be everything the government says it will be? As a nurse working in the New Zealand health care system, this is an issue that will impact on the way healthcare will be delivered for New Zealanders. It's important to look at the issues the TPPA raises with a critical eye so we can confront the corporate agenda with an informed argument.

The Trans Pacific Partnership Agreement (TPPA) is a regional trade agreement currently being negotiated by 11 Pacific Rim countries, excluding China. To put it in context, the countries involved include 10% of the worlds population and their economies account for 30% of global gross domestic product (GDP). The negotiations are now in their 10th year and while the negotiations are being conducted under a veil of secrecy, substantive leaks over the past 4 years have revealed a broad view of the proposed content. Citizens of the involved countries are actively excluded from the negotiation, although many senior corporate executives and their representatives are active participants. Even the US congress; the elected officials of the most powerful country on the planet, have only recently been given limited access to the interim proceedings of the TPPA. This is not acceptable. We have the right to know about significant changes for New Zealand, and to have a say about it.

The stated goals of the TPPA are to improve the exchange of goods and services, enhance global industrial vertical integration and enlarge the scope of intellectual property protection. However from the leaks that have been made available, it is clearly much more than this. The dictates of the agreement, in all but name a treaty, could, for the most part, override national guidelines and regulations in the corporate arena that pertain to health. The regulatory structure embedded in the TPPA withdraws jurisdiction from national judicial systems and puts it in extraterritorial tribunals designed to favor trade/corporate interests.

The fact that this agreement is being negotiated in secret should raise alarm bells. Its content will not be disclosed to the people of New Zealand and the New Zealand Parliament until after it has been signed, by which time the terms will have been agreed among the twelve participating countries. In addition, it is understood that the United States of America claims the right to decide whether New Zealand has altered its laws to comply with the Trans-Pacific Partnership Agreement and to require further changes to our laws if they have a different interpretation of New Zealand’s obligations.

It is difficult to accept assurances from the former Minister of Health that health is high on the agenda of TPPA negotiators when there has been so little public health representation in the negotiation process. Whereas hundreds of US corporate advisors have been granted access to negotiation drafts of the TPPA. Independent health advisors, including representatives from the WHO, have effectively been excluded. But the muzzling of health policy is probably even more concerning. Under the TPPA, foreign investors would be able to sue the Government if changes to health policy affect an investment, say significantly reducing expected profits. The TPPA would for the first time expose the NZ Government to possible Investor State Dispute Settlement (ISDS) lawsuits from transnational corporations based in the USA. US companies have an extensive track record of aggressively pursuing claims under existing trade agreements. The director general of the World Health Organisation Dr. Margaret Chan calls this "handcuffing". In practice, even the threat of action can have a handcuffing effect. She goes on to say;

"One particularly disturbing trend is the use of foreign investment agreements to handcuff governments and restrict their policy space... In my view, something is fundamentally wrong in this world when a corporation can challenge government policies introduced to protect the public from a product that kills."

In Canada, where they are subject to the terms and conditions of NAFTA and other 'free trade' deals, all new health laws must be screened to make sure they are compatible with trade agreements. In New Zealand, action on plain packaging of cigarettes has already been delayed; we're waiting because a tobacco company is suing Australia.

As it stands the TPPA poses serious risks to global public health, particularly chronic, non-communicable diseases. At greatest risk are national tobacco regulations (such as plain packaging), regulations governing the emergence of generic drugs and controls over food imports by transnational corporations.

The way in which the TPPA will affect generic drugs are through greater corporate access to Pharmac. Pharmac is very successful in doing what it was set up to do: making medicines more affordable. Pharmac is the national medicines purchasing agency that has achieved the greatest success anywhere in the world in balancing the health interests of people and communities against the business interests of big medicines companies. Pharmac is under attack by the pharmaceutical industry because it is successful, and the ‘Pharmac model’ is being adopted by other countries needing a better balance between business and health interests. Pharmac purchases medicines for New Zealanders at prices around half those achieved by Australia’s medicines purchasing agency and around a third the price demanded in the US. Yes, this is painful to the medicines industry but it means huge savings for the New Zealand health sector.

With greater access to Pharmac, pressure on the nation's health budget would escalate because of delayed introduction of generic medicines, longer exclusive protections for expensive new cancer and immunosuppressant medicines and weakening of Pharmac. Medicines would become less affordable overall.

Under the TPPA, we could effectively forfeit our right to make sensible laws. Instead, foreign investors would be given a powerful new lever to delay sound new health regulations for their own commercial interests. Good public health policy should respond to new evidence. Lead paint was used for many years before the health risks to young children became undeniable; until recently synthetic cannabis-like drugs were sold over the counter in NZ; and thalidomide was initially sold without prescription to thousands of pregnant women before leading to death and serious deformity in thousands of children. As evidence of harm accumulated, governments brought in controls. 

These examples illustrate why New Zealand's freedom to modify regulation based on the ‘precautionary principle' must not be undermined by the TPP. Indeed, even when the evidence of harm is substantial, industries such as Tobacco have a long and consistent history of systematically undermining and legally contesting the available scientific evidence, aiming to ensure that the benefit of any doubt is given to their own commercial interests rather than health.

Concern about the TPPA is not just a fringe Left concern, warnings are being sounded across the spectrum. This was expressed succinctly by the Nobel Prize winning economist, and former Chief Economist of The World Bank, Joseph Stiglitz, in the New York Times earlier this year:

“There is a real risk that it (the TPP) will benefit the wealthiest sliver of the American and global elite at the expense of everyone else”

“Corporations may profit (from the TPP), and it is even possible, though far from assured, that gross domestic product as conventionally measured will increase. But the well-being of ordinary citizens is likely to take a hit.”

The TPPA represents the biggest corporate power grab in a generation and its implications for health will be widely felt. Resistance to the TPPA needs to come from all angles before it's too late. Talk to your workmates, inform yourself, attend one of the many protest actions, organise one yourself. The fight isn't over.

Organise, Agitate, Resist.

See you in the streets.
Nico, SA.

Look for events happening nationwide this saturday as part of the international day of action here