Tuesday, December 19, 2006

More HM Stuff - Poulantzas, Miliband and Others

Warning - this is likely to be a little scrappy.

I have a few sheets of paper with scribbled notes taken at the Historical Materialism conference last week still to write up here. I've written up the notes on the plenary session on China in a post below. I have yet to write up some notes from a few sessions on Poulantzas, a session on Miliband, one on ecological crisis and one on the international state system today. I thought I had better write these up while the memory is still vaguely fresh.


Poulantzas, it seems, is sexy again. There is, apparently, a significant re-awakening of interest in Poulantzas in Left academia at the moment. For a while (the last 20 -30 yrs or so!) the old boy was regarded as a little old hat. Yesterday's sensation. Outmoded. Rather unfashionably 'structuralist'. Now, however, he is set to make a big wowee comeback. A bit like Peter Andre I suppose. That's very very good news for me. Bob Jessop commented, at the start of his paper that Poulantzas would, very soon, come to be regarded as one of THE major figures in political theory of the 20th Century. I suppose Bob Jessop would say that, wouldn't he? But it doesn't seem a particularly wild prediction to me. So read your Poulantzas if you want to be hip (although I advise you not to attempt Political Power and Social Classes unless you are really, really sure about it).

Clyde Barrow presented an interesting paper on the matter of Poulantzas' supposed 'Althusserian' theoretical foundations - a paper delivered, rather bewilderingly, in an American deep south accent. I can't be sure, but I should think that Barrow usually speaks with a deep south accent, rather than saving it for the delivery of papers on Poulantzas. It's quite odd, at first, listening to someone who sounds not completely unlike Deputy Dawg talking about the structural configuration of different modes of production - but one gets used to it after a while. I liked Barrow very much - seemed like a really nice guy.

Basically, Barrow's argument (and one with which I fully agree) was that people are wrong to pigeon-hole Poulantzas as an 'Althusserian'. I certainly get rather annoyed when people dismiss P's later work for 'incorporating substantial Althusserian residues' - even if it does (which I don't think it does in any meaningful sense - what, exactly, are 'Althusserian residues' anyway?) there is a real wealth of stuff in State, Power, Socialism which people tend to miss if they are busily hunting for Althusserian left-overs. I suppose most people would agree that P had made a significant (if not decisive - which I think he had) break with Althusser with the publication of SPS - but Barrow wanted to push this further and argue that even the early Poulantzas (you know, the Poulantzas in his 'Althusserian phase' - that one) is not, in any significant sense, working within an Althusserian paradigm (or should I say 'problematic') - (No, I shouldn't).
Barrow pointed out that there are very clear differences between the early P and Althusser and Balibar. Althusser and Balibar operate with what Barrow described as a 'Platonic' conception of the constitutive elements which go to make up a mode of production in their structuralist schema. Althusser argues, basically, that each mode of production is made up of a particular configuration of pre-existing elements - 'the economy', 'the political' etc. (an analysis which seems rather to mirror liberal categorisation). They reproduce the capitalist assumption that the economy is an autonomous entity - a spontaneously self-reproducing thing into which the political/state intrudes from the outside if it has anything to do with it at all. Poulantzas, however, starts his analysis at the level of the mode of production - rather than at the level of transhistorical 'ideological', 'political' or 'economic' elements of reality. So, he is not best pigeon-holed as Althusserian. And he is better than those clueless schmucks, Althusser and Balibar.

Jessop's paper aimed to convince us that P's State, Power, Socialism is a 'modern classic'. I completely agreed with him. In fact I agreed with him so much that I forgot to make any notes. What I remember of his presentation, however, is his argument that the section of SPS on 'Authoritarian Statism' is a remarkably prescient account of 21st Century politics - in particular, it is impossible to read this chapter without thinking 'Blimey, you're describing Blairism there even though you were writing in 1978, you remarkably prescient old fox, you'. Read it and see what I mean. The only thing P gets wrong is that he fails he anticipate the Thatcherite/Reaganite turn - he suggests that the politics of his near future would involve an extension of state ownership rather than privatisation and that 'economic' questions, would therefore, become increasingly 'politicised.' In that sense it is very much a book of its time - the 1970s. But, again, read it - and tell me that the stuff about managerialism, the hollowing out of politics, the creation of unaccountable, semi-militarised 'parallel state systems', about the increasing concentration of political power at the apex of the state executive does not describe what we have today. P, of course, goes further than this. He doesn't just 'predict' this process - he provides an intricate account of just why such a process would unfurl.

I have a scribble at the top of the Jessop page which tells me, by the way, that Althusser refused to publish an early work by Poulantzas because it was 'too historicist.' More ammunition, then, for the Poulantzas-as-not-an-Althusserian position.

In his paper, Peter Thomas argued that, if anything, Poulantzas is best thought of as a Gramscian. He focused on the final chapter (first published as an article in NLR) of SPS (a brilliant if flawed attempt to draw out the practical strategic implications of his theory of the state). It focused on Poulantzas' reading of Gramsci's conception of the distinction between 'state' and 'civil society'. Thomas argued that Poulantzas wrongly attributed to Gramsci, the idea that the state is 'a closed place' - a self-contained entity, separated and distinct from 'civil society', whereas the whole thrust of P's argument in SPS is that the state is a social relation and that it is therefore continually modified by changing balances of social forces - that 'the state is traversed from end to end by the effects of popular struggles' (I'm quoting from memory there, so that's probably wrong - but it's something like that. I am, of course, too lazy to go and get the book from my office.) Poulantzas' and Gramsci's understanding of the state, Thomas suggested, was much closer than Poulantzas thought. Thomas also provided, along the way, an incidental critique of Anderson's 'The Antinomies of Antonio Gramsci' - one of the most celebrated and thorough analyses of Gramsci's thought. I wish I could remember what the criticism was exactly. There is some flaw in Anderson's approach - no can't remember it. Drat.


One of the main things to emerge from the Miliband session was that - just as it makes little sense to categorise Poulantzas as an Althusserian structuralist - it is a mistake to think of Miliband as an 'instrumentalist'. There are countless 'Introduction to Political Science/Theory' books, where Marxist state theory is framed in terms of a 'structuralist/instrumentalist' debate and in which the NLR Poulantzas-Miliband debate is wheeled out as the structuralist-instrumentalist bun fight par excellence. The NLR Poulantzas-Miliband (and Laclau sticks his big waggling oar in at one stage, too) is actually pretty unenlightening. In fact its a bit shit if you ask me. Miliband and Poulantzas simply talk past each other. Poulantzas starts it by (unfairly) accusing Miliband of being a crude instrumentalist and Miliband responds (quite understandably) by arguing that, 'Well, Mr Poulantzas, you are just a structuralist abstractionist and you talk bollocks'. So it's Poulantzas' fault. Miliband, however, was not an 'instrumentalist' - his 'instrumentalist' book, The State in Capitalist Society is an intervention in a particular debate and can only be understood properly in that context. What Miliband was trying to do in that book, was to prove 'pluralism' wrong on its own terms, by pointing out the continuing salience of class and showing that power (particularly the levers of state power) was/were not evenly distributed amongst social groups.

In fact (as Paul Wetherley stressed in his paper) Miliband does provide a fairly robust account of the 'structural constraints' which state agents encounter and which tend to safeguard capitalism from political courses of action which my have the effect of weakening it. See his NLR essay, State Power and Class Interests for example. But even in The State in Capitalist Society Miliband is quite clear that the state is not capitalist simply because of the class background of senior state managers (the argument wrongly attributed to him on a frequent basis). In fact he provides a whole chapter on 'structural constraints' in that book!

Interestingly, Barrow (in his Miliband paper) suggested that the category 'instrumentalism' was invented almost arbitarily by Gold, Lo and (Erik Olin) Wright in a graduate paper they had published in Monthly Review in 1975 (‘Recent Developments in Marxist Theories of the Capitalist State’). They simply made up the category for the sake of convenience and proceeded to dump a few theorists into it. For some reason, the term became popular and the categorisation of Miliband (and Domhoff - who, amusingly, produced, at some point, an essay entitled 'I am not an Instrumentalist') just stuck. An interesting question then - have there ever been any Marxist 'instrumentalist' state theorists?

Paul Blackledge began his paper on Miliband by sticking his tongue out at my girlfriend, causing her to go into an uncontrollable giggling fit for the duration of the session. The substance of his paper consisted of the argument that Miliband's position on socialist strategy in the last chapter of Marxism and Politics (1977) is flawed since it is based on a faulty view of the relationship between Leninism and the Popular Front strategy. It seems to me that Blackledge is right about Miliband's conflation of Leninism with Popular Front strategies. However, I wasn't convinced by his argument. He got a bit of a telling off from Hilary Wainwright and Leo Panitch looked distinctly hostile. The argument (as I remember) from the floor was that Miliband (and other New Left figures such as E P Thompson and Raymond Williams) objected to Leninism for reasons that could not be boiled down to Miliband's mistaken reading of Popular Front politics. They (Miliband, Thompson, Williams) never made the leap into Leninism/Trotskyist politics (even though they produced some fearsome critiques of both Stalinism and parliamentary labourism) quite simply because they just didn't like the look of Leninism or Trotskyism. Seems about right to me actually. Miliband didn't have an 'incorrect' or 'partial' or 'incomplete' analysis of Stalinism or reformism or whatever. He didn't make the leap because, very simply, he was just waiting for something rather more agreeable to come along.

Peter Burnham presented an interesting paper on Miliband's Parliamentary Socialism - a classic which every left-leaning member of the Labour Party should read. Burnham's argument, which seems about right to me, was that Miliband oscillated throughout his life between calling for battle within the Labour Party and calling for the building of a new party. I wonder if this oscillation wasn't at all conditioned by his dislike of Leninist parties - the thought, that is, that all of those (in many ways) rather unattractive Trot parties out there had cornered the extra-Labour Party market as it were so, bollocks, we'd better look again at the Labour Left.

This post is now far too long. I'll end it there. I may write up the Ecological crisis and the international state system stuff in a couple of days.


This post is probably best described as a 'splurge of consciousness' rather than a coherent summary of a set of academic papers. I'm sorry. But it's late, I'm tired and it's nearly Christmas.

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Monday, December 18, 2006

Rapid News Reaction


Saturday, December 16, 2006

HM Conference

I said I'd write up a little report on the Historical Materialism conference (pdf.) last weekend. So here it is.

First of all, I have to say (a little shamefacedly) that I didn't make it to the paper on George A. Romero - the one I was enthusing about before I went. The problem was that this paper was presented at 9 O'Clock in the morning and that I had been out a-boozin' the night before. It just didn't work out the way I planned. Never mind.

One of the difficulties I encountered at the conference (apart from the absolutely mad starting times - 9 in the morning... 9 in the morning??!!) was that there was just too much to take in. This isn't a criticism of the conference of course (no one was forced to attend all the slots after all). I suppose I am just trying to register my disappointment about the particular limits to human concentration and endurance. I found that by the last slot in the evening my mind had turned to slush and that I really couldn't take in what anyone was saying. I'll just provide a synopsis here, then, of those papers which I attended when still in full possession of my mental faculities and which I found particularly interesting (and during which I remembered to take notes).

The most fascinating set of papers - a plenary session on 'China and the Future of the Global Economy' - was by far the best attended. It was held in the dungeon pit of the UCL Students' Union (at least I think that's what it was) and was absolutely full to bursting. The speakers were Andrew Glyn, David Harvey and Simon Clarke. I'm afraid that I didn't take any notes on Clarke's speech because he spoke last and by that time my capacity for concentration had collapsed. Glyn's paper consisted really of a run through of a set of facts and figures about Chinese growth and its significance for the global economy. His main argument was that the huge reserves of cheap labour in China would progressively undermine wages and living standards in the advanced West. He also argued interestingly, that some of the old Marxian predictions about a progressive declining share of income for labour under capitalism, although they seem to have been confounded over the course of the late 19th and 20th centuries, would over the course of the next few years be proved right - ie that this prediction was right in terms of long term tendencies.

Glyn started by pointing out that the centre of world capital accumulation is now shifting from the US and Europe to China (and to India, too, although to a lesser extent than to China). At the moment the level of China's exports is no larger than Japan's - but of course China has huge capacity and, in particular, a huge labour force (or, at least, potential labour force - it has a huge reserve of rural peasants yet to be proletarianised). The key thing to understand about Chinese growth, and its potential for further growth, Glyn pointed out, was the level of wages in that country. Despite huge growth in the Chinese economy and despite rising levels of productivity there has been no increase in wage levels in that country as compared to US wages (not sure what the time scale is here - the main thing is that wage levels are held down much lower than rates of productivity gain and much much lower than in the US and Europe). The rate of profit in China is about twice that of the US and Europe. So, Glyn pointed out, China (and India) are a huge pole of attraction for foreign investment. Glyn admitted that there was not yet the flood of investment going to China that you might expect (more on this later) - FDI from global north to global south (which of course includes China and India) is still only about 4% of the level of FDI between countries of the north. But an increasing share of global FDI was now going to China and India and this, Glyn argued would soon turn from the 'trickle' it was now to a 'flood'. He pointed out the rate of growth in capital stock in the north from 1945 to the mid 60s was about 45%. It is now about 2 - 2%. Under these conditions China and India with much higher rates of growth and rates of profit will look increasingly attractive to northern investors. In other words the working class in the north is doomed. As is the welfare state and anything else which reduces the 'competitiveness' of the northern economies in relation to those of the booming economies of the south.

Glyn finished up by providing a kind of periodisation of the fortunes of northern labour. He pointed out that labour's share of income in the period from the publication of Smith's The Wealth of Nations to the publication of Marx's Capital was declining (and this, of course, shaped Marx's analysis). However in the period up until the 'profits squeeze' of the 1970s labour's share of income improved. It was in this period, of course, that Crosland and others argued that the injustices of capitalism had been (or were in the process of being) ironed out - that Marxist economics were outdated. But since the 1970s labour's share of income has been falling again. Competition from low wage economies in this period has been one factor (amongst many) in this drop off in the share of income going to labour. Now, with the emergence of China as a global super-economy boasting low wages and relatively high productivity levels and rates of profit, labour's share of income in the north will start to drop off dramatically.

All very doom and gloom. However, Alex Callinicos made the point from the floor that low wages are only one (very minor) determinant of investment levels. He pointed out that if Glyn's thesis about a coming slump in western living standards was true we would expect to see much more than a 'trickle' of northern FDI going to China right now. In fact there are many factors which investors hold to be more important that wage levels when deciding on where to invest - these include proximity of the place of investment to affluent markets, the level of skill of labour, the infrastructural provision on offer and the political and economic stability of the place of investment. In fact Glyn's argument seems to replicate a lot of the wilder claims of the 'hyper-globalists' in the globalisation debate of the 1990s. Glyn's argument was quite comprehensively dealth with by 'sceptics' such as Hirst and Thompson in that debate to my mind.

Harvey was up next. If you've ever read the first chapter of the Communist Manifesto - you'll know that it provides the most extraordinary grand sweeping vision of historical development - a vision, in particular, of the merciless dynamism of capitalist development. It manages to be electrifying and terrifying at the same time. Well, Harvey's speech was a bit like that. I can't really do it justice here - but he provided a description of Chinese growth in terms that just made the hairs on the back of my neck stand on end. It was this sweeping description of the development of economic and political forces which are quite out of control.

He started out by telling us how he explained the concept of over-accumulation to his students. Quite useful I thought. What he does is he tells them to imagine a day in the life of a capitalist. He or she starts off with x amount of capital and (if things work out how they should) he or she ends the working day with x amount of capital plus a bit more. The problem for the capitalist, then, is to work out what do do with this extra capital - how to absorb the surplus. He or she will, under pressure of competition from rivals, have to find a productive outlet for it. This happens, of course, day after day, week after week, with the capitalist having to find something to do with an accumulating amount of extra capital. There come periods when there is so much surplus that capitalists simply can't find outlets for it and the system becomes unstable. The other problem is that capitalists will have invested a lot of this surplus in building extra capacity - and there will come a point when this capacity becomes surplus to requirements - ie they just can't shift the stuff they are producing and they just don't need those 5 extra factories. Harvey argues that one method of dealing with these crises of overaccumulation is for the state to take on responsibility for the absorption of the surplus in order to stabilise the system (the other option I suppose is to induce or allow some sort of mass devalorisation of capital - a slump - to get rid of the surplus and get rid of inefficient capitals). He argued that quite often the surplus is absorbed in projects of massive urban regeneration. In 1848 the French state dealt with a crisis of overaccumulation by re-engineering Paris - famously, the boulevards of that city were greatly widened and the narrow streets of Paris cleared out. Similar re-engineering of city centres has occurred in New york, Los Angeles and Chicago. The 20th Century rise of the surburbs, Harvey argues, was a response to overaccumulation crises.

But the absorption of capital isn't simply conducted at national scale. There is also an international dimension - Harvey argues for something called a 'spatial fix' where excess capital is diverted overseas to a new 'space'. Harvey's argument was that the epicentre of global surplus absorption - the current point of 'spatial fix' - is now China. There is a massive project of construction and development going on in that country. Harvey has, apparently visited China on a few occasions - and he describes the rate of construction there as absolutely 'scary'. It is a boom economy completely out of control. It is Chinese demand for materials that is driving the world economy. Apparently it's Chinese demand for copper, for example, which is driving the growth of Chile and China is currently consuming half the world's cement supplies! But much of this frantic construction in China is unnecessary. Harvey pointed out, for example, that in one valley in China (don't know how big) they had built 5 airports in the past few years - when they only needed one. There are many other examples of unsustainable construction. Harvey pointed out that in one small village he visited the local authorities were building a state of the art school and hospital which, as I remember, was far too big for local requirements. But of course, not everyone in China is enjoying the fruits of the boom - as Glyn pointed out, the Chinese working class is being paid extremely low wages. Interestingly, though, the new Chinese rich are not just from the government bureaucracy or well connected party members. Some peasants were wise enough to draw up contracts with construction firms - so that, in return for giving their land over for appartment construction, they arranged ownership of, say, the first floor of the building and have now become quite rich in renting out the rooms to incoming labourers. Those labourers of course work 12 hours a day or something, often don't get paid (because construction firms go bust all the time) and live in squalid conditions. As an aside, Harvey referred to a conversation he had with some Chinese new rich party members - he asked them what they thought of the growing inequalities in their country. He was told that they deserved their money because they had worked hard to attain it. As Harvey pointed out - clearly, very few people in China have ever heard of the concept of surplus value.

Anyway, Harvey's argument was that there is now massive over-investment in China - that there is a growing crisis of over-accumulation in what is now the epicentre for the absorption of the global surplus. Already, he pointed out, the Chinese are starting to expand outwards - to look for their own 'spatial fix' - they are expanding car production abroad for example. In another aside Harvey told us that he (in his capacity as a rep of a US university) had been offered 60 million dollars on the spot by a Chinese vice-chancellor (or whatever the Chinese equivalent of that role is) - it was to go his university and in return, staff from his university would work for 6 months in the year at the Chinese university (clearly, the Chinese universities want US knowledge). It shows just how much excess money there is sloshing around in China.

Harvey finished up by pointing to the huge environmental problems being stored up by this out of control growth. Things aren't great in China ecology-wise it seems. He also pointed, of course, to the hugely unstable nature of this global arrangement. There was some cross over between Harvey and Glyn in that Harvey also pointed out that the only way that the US and Europe could compete with this rousing giant in the long run would be to force down the wages of its workforce. He ended his speech with a suggestion. It was that the only alternative to this out of control nightmare was socialism or something.

Anyway, this post is now far too long, so I think I'll leave the rest of it for another time. I still want to write something up about Poulantzas and Miliband briefly - and also the Socialist Register stuff about ecological crisis.

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Friday, December 15, 2006

Google Can Bog Off

Blogger.com users will have noticed over the past couple of weeks that they are being encouraged to update their Blogger templates - and that in order to do so you must first register for a Google account. Of course all of this hard sell is pitched in terms of how very lucky we are to be given such a wonderful opportunity, followed by a casual 'oh-by-the-way you'll have to take out a new account to do so'. Yes, I know it's free - but I don't want a Google account. All of this, of course, has something to do with Google's recent acquisition of Blogger.com - which, in turn, has something to do with capital's tendency towards concentration and stuff.

I was fairly sure that the Blogger's polite invitations to its users to join up with the new master would become progressively more and more of a Godfather type of offer - you know, the ones that the invitee can't refuse. And do you know, I was right. I think. It seems that you can no longer log on to your Blogger account in the Blogger comments boxes in order to leave a comment. You have to do it through a Google account. I tried to leave a comment on a couple of Blogger blogs today and it just wouldn't let me sign in. Bah.

Luckily there's always Haloscan what like I've got. But what's next? The bastards.

Thursday, December 14, 2006

Bean-Counters Will Not Save the Planet

Derek Wall has a very interesting critique of the Stern Review in this month's Red Pepper. I recommend that you read it.

"Stern’s solution to climate change will make the average economist swoon. Sir Nicholas and his team have reached for their micro economic textbooks in the way that a Midwest preacher would reach for the bible. Economists are not centrally concerned with the ‘end of civilisation’ as we know it, social justice or ecological sustainability. They are out to maximise ‘welfare’. Conventional economics is based on utilitarianism, the greatest good for the greatest number. Costs must be minimised and ‘benefits’ maximised. Costs and benefits are measured in cash terms. Where supply and demand curves meet, overall benefits are maximised.

Viewed in these terms, environmental problems come down to unpaid costs. For example, the motorist pays the private cost of the car, petrol and other expenses of keeping on the road but does not pay for the ecological and social costs of car use. Economists argue that by calculating the monetary costs to society of pollution, congestion and the other ills from car use, and then making the motorist pay, efficiency can be restored.

Stern takes this approach. Climate change costs money, the cost can be measured and added to the price of all the things we do that lead to climate change. If consumers choose to pay and continue wrecking the planet, so be it."

There was a discussion of 'ecosocialism' at the HM conference I went to a few days ago, to mark the launch of the Socialist Register 2007, which, this year, focuses on the (rather pressing!) issue of ecological crisis. One of the the questions the participants addressed was that of whether capitalism could find any solution to the looming environmental crisis. Interestingly the various speakers disagreed about this - at least one, Daniel Buck, suggested that capitalism might well find a 'solution' to the fossil fuel pollution/global warming crisis under the pressure of looming catastrophe (incentive and all that). He did suggest, however, that this solution would come at the cost of the further commodification of the environment, of the further exacerbation of international inequalities and would involve a significantly authoritarian dimension. The other participants disagreed. I'll see if I can write this up more fully in a few days. Really busy at the moment. I've got loads of notes on the Harvey/Glyn/Clarke plenary session on Chinese growth and the global economy (in which Harvey, in particular, was fantastic) which I hope to write up in some detail on this blog when I get a chance. The gist of the Harvey argument was that the rate of over-accumulation and developing over-capacity in China is of huge proportions - in his words it's absolutely 'scary'. He brought in his notion of 'spatial fix' - the idea that capital must continually expand in spatial terms and colonise new territory in order to avert crisis - in a really interesting way.

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Thursday, December 07, 2006

Do You Like George A Romero?

I'm just printing out some abstracts and papers for the Historical Materialism conference. There's a very short paper on '"Just in Case Society Crumbles": George A Romero and Marxism' by Marco Maurizi which I intend to read on the train this afternoon. It looks good. As a rule of thumb, I would say anything with zombies in it is usually a good thing. Except food, obviously. I wouldn't want zombies in my tuna and mayo sandwich. I thought some of my readership might be interested in having a look at this paper.

You can get to the papers and abstracts from here. Click on the name of the author for a pdf file. The full papers are towards the bottom of the page.

As a Poulantzas anorak, I would also recommend, in particular, Bob Jessop's paper on why Poulantzas' State, Power, Socialism is brilliant. See also Clyde Barrow's paper.

Wednesday, December 06, 2006

Now I Am Famous.

One of my blogposts has been included in The Blog Digest 2007. Apparently, the book could well be the biggest selling Blog Digest publication of 2007. It might well be purchased, perhaps even read, by literally many people.

Apparently Boris Johnson's done a review of it, too. Or maybe he hasn't. I'm sure I read, somewhere, that Boris Johnson had reviewed the book. Anyway, Boris Johnson might have reviewed it - and if he has, then that must probably mean that this book is going to be big. Andy McNabb big. Boris Johnson wouldn't just review any old shit, you know. Not that I'm particularly bothered about Boris Johnson. I'm not one of those people who is impressed by a book simply because Boris Johnson might have done a review of it. I'm just saying that Boris Johnson, as a book reviewer, is not to be sniffed at. He's a very capable reviewer of books. I'm not actually sure whether Boris Johnson's review of the book, if he did indeed produce one, was favourable or not. But I'm fairly sure that he liked the book. If he was deeply offended by it, or thought it was really really stupid he probably wouldn't have reviewed it would he? Reviewing a really really stupid or deeply offensive book just eats into one's mistress boffing time and is not, therefore, a rational course of action. If I was Boris Johnson and had the choice of reviewing a really really stupid or offensive book on the one hand, or, on the other hand, having a quick shag with Petronella Wyatt or someone, I would probably choose the latter. If I was Boris Johnson, that is - if it was me I would probably review the really really stupid or offensive book because a) I could do with the money, b) I don't fancy Petronella Wyatt, c) I am not so stupid as to attempt to develop some sort of romantic relationship with slightly unpleasant journalists working for The Spectator and, d) if I was a book reviewer I would be very conscientious about my job, unlike that flighty, unreliable Boris Johnson character. So, anyway, I'm sure that Boris Johnson's review was favourable, if indeed he did one, and that, therefore, the book is looked upon with admiration by Spectator types who, although I may not agree with them about the key causes of inflation or about the nature of unemployment and although I do not fancy Petronella Wyatt, really know a good book when they see one.

Anyway, being an insufferably holy lefty, of course, I am not in the business of advertising. I am definitely not advertising this book or anything. If you want to find out more you can have a look at Chicken Yoghurt - the proprietor of which blog, Justin McKeating, was responsible for putting together and editing the book. And he's done it very well, too.

Anyway I'm off to London for this HM conference thing.

Monday, December 04, 2006

Chavez Wins!

Really good news.

Green Left report:

The wealthy elite, which back the opposition and own the media, are terrified of the growing radicalisation of Venezuela’s working people. Chavez explicitly made the elections a referendum on his stated goal of constructing a “socialism of the 21st century”, and dramatically deepening the revolutionary transformation of the country. Yet again, the working people sent a powerful message: there should be no return to the past — the revolution must continue.

The elite are running out of options.

Note the ominous tone of that last line, though.


Larry Elliott has a piece in today's Guardian about the gathering financial crisis in the US. He suggests that the only real option the Federal Reserve has is to cut interest rates and risk higher inflation. This should have the happy effect of cutting the price of US exports, leading, therefore, to increased US manufacturing competitiveness. But, surely, there is a reason why the Federal Reserve has refused to take this step for such a long time - one which, as far as I can make out, neo-classical orthodoxy would recommend (because market forces, supply and demand, tend, spontaneously, towards equilibrium innit). Elliott doesn't mention this, but (in my limited understanding) US global hegemony depends, in great part, on its financial clout - on Wall Street's centrality to the whole financial system and on the dollar's status as the world's preferred trading and reserve currency. Peter Gowan refers to the system of US hegemony the 'Dollar Wall Street Regime' for good reason. If the dollar is weakened significantly then so is the DWSR and so, in turn, then, is US power. Maybe I've got this all wrong - but the current crisis isn't just some technical concern with exchange rates, inflation and manufacturing competitiveness. The crisis runs much deeper than that - the dilemma the Federal Reserve faces incorporates extremely important geopolitical and hegemonic concerns. That's why the Federal reserve is dithering, it seems to me.

Dislaimer: of course, you shouldn't listen to me because I'm not a trained economist and I don't really know what I'm talking about.

Saturday, December 02, 2006

There May be Trouble Ahead

The frontpage of the Indie, today, focuses on the weakening dollar. It's now worth about $1.9848 against Sterling and $1.3180 against the Euro. The signs are, apparently, that the dollar is set to tumble even further. Larry Elliott suggests that there are 3 major reasons for this pressure on the US currency.

Firstly, the US is running a colossal current account deficit, [$869bn (£450bn, €664bn)] which it funds by borrowing money from the rest of the world. Secondly, the economy is clearly slowing following the steady increase in interest rates from 1% to 5.25% since 2004. The boom in the housing market that artificially inflated growth a year ago has turned, predictably to bust. Thirdly, the differential between US interest rates and those in the rest of the world is narrowing. Despite all its tough anti-inflationary rhetoric, the Federal Reserve will not raise rates again.

Clearly (?), it's the second factor here which has been the catalyst for this anxious selling of dollars (perhaps someone can put me right, here, if I'm wildly off). The visible slowing of growth in the US economy has made the underlying weakness of the US economy (the first factor Elliott mentions) much more pressing, while the Federal Reserve's reluctance/inability to raise interest rates even more (because to do so would further damage US manufacturing competitiveness I suppose) means that they cannot offer further inducements to traders to buy dollars to plug the growing trade deficit gap. So, what we have might here, then, is the start of a vicious spiral downwards for the US economy. As Elliott concludes, the "dollar's weakness is no flash in the pan; it is the start of something big."

The FT provides further reasons to suspect that the US economy might soon be in for a little tumble. There is, apparently:

growing talk of global central banks diversifying their foreign exchange reserves away from the US currency. One factor supporting the dollar has been huge purchases by foreign central banks. Since 2001, global currency reserves have soared from $2,000bn to $4,700bn according to the IMF, with two-thirds of the world’s stockpiles held by six countries: China, Japan, Taiwan, South Korea, Russia and Singapore.

Anxieties over reserve diversification have been around for at least six months, with central banks in Russia, Switzerland, Italy and the United Arab Emirates announcing plans to cut the proportion of dollars held in their reserves. A shift by central banks away from dollars would remove a key source of financing for the US deficit.

... speculation is increasing that China, which is thought to hold 70 per cent of its foreign currency stockpile in dollars, is considering a fundamental change in its reserve allocation. Mitul Kotecha, head of foreign exchange research at Calyon, the French bank, [said] “The Chinese authorities are becoming increasingly nervous about holding too many dollars,” ...

If the Chinese and others sell their dollar holdings - ie refuse to prop up the US's deficit - then (in my understanding) that's it for the US economy. It's had it. I suppose it's not in the interests of the Chinese and others, however, to pull the rug out from under the feet of the US economy very rapidly - a US crash, means a world crash. They'll want to manage the decline of the US as an economic superpower (and that's what this amounts to) as carefully as possible. The thing about capitalism, though, is that it's notoriously difficult to manage in such a way - the anarchy of the market and all that.

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