analysis

Analysis of current economic conditions, theory of social change and opportunities for the moment

NOTES ON THE CRISIS
The nature of this economic crisis is a crisis of capitalism, not its collapse. We know the broad outline: years of deregulation, betting on exotic financial products and the merging of financial firms into a few hands led to a catastrophic breakdown.

While something had to be done – banking is the heart that pumps money through the economy – the bipartisan political response has been to bestow more than $1 trillion on finance capital and big corporations to shore up the wealth of the elite. The public is being forced to pay now with massive funding cuts in and loss of access to healthcare, public education and mass transit, and it will pay later through huge budget deficits and currency devaluation.

Obama’s plan is just to smooth the rough edges. There will be token tax rebates, modest relief for some homeowners facing foreclosure, a bit more unemployment insurance and food stamps, and public works programs mainly designed to aid domestic industries such as transportation, construction and manufacturing.

Banks and powerful corporations will get more bailouts that prop up share prices while containing few limits on executive compensation and dividends. The public will be told they must accept lower wages and fewer entitlements. Capital will consolidate, meaning more economic and political power in fewer hands – unless the left organizes against it.

In the near term, Obama will introduce a large stimulus shortly after Jan. 20 that will probably pass. Liberal groups will lobby heavily for it, the left is in little position to influence it, and in the long run the stimulus plan will almost certainly fail to address the root causes or the most significant symptoms of the economic crisis.

Even if it comes with a $700 billion price tag, it’s too little too late. There are two simple reasons. First, the Democrats are talking about “preserving and creating” 2.5 million jobs by 2010, when the real number of jobs needed in this period will be 10 million+. The plan is too limited to get the economy moving again.

Second, there is no coherent planning, which requires a national debate over who wins and who loses from trillions in expenditures. Instead, business sectors will pressure politicians behind closed doors to grab a slice of the pie. Much of the money will be misallocated to favor various industries and based on the assumption that the public will be happy with the scraps.

Rational and democratic policy demands solutions that address the crisis in ways that serve the public interest. Take universal single-payer healthcare. The winners would be the public foremost, and many industries would benefit by being able to control costs, but insurance, HMO and pharmaceutical companies would all lose. Similarly, banking and manufacturing is necessary to an advanced economy, but they should be restructured in the public interest, such as by nationalizing them, which means shareholders would lose.

Thus, the stimulus plan is too small and too beholden to the same political and economic forces that created this disaster to be able solve the crisis. There will have to be more governmental action in the future, which means the left should organize to shape future action, rather than the coming stimulus plan.

NOTES ON POLITCAL CHANGE
In thinking about how to effect positive political change, looking at the past is always a useful starting point. At least in modern U.S. history, there are specific conditions that seem to typify successful movements: mass-based agents and organizations of change that use disruptive tactics against political, economic and social structures to reveal the dominant power structure’s key contradictions.

Some examples can help illuminate this statement. Take the 1960s civil rights movement: Black-led churches and student groups employed Gandhian protest tactics against local Jim Crow socio-political entities in the South to reveal how U.S. democracy was based on legal racial oppression.

Disruptive tactics don’t necessarily mean violence or property destruction. During the civil rights movement, Black-led student groups effectively targeted segregation in public facilities through the lunch counter sit-in movement and the Freedom Rides.

Such tactics disrupt entrenched power structures of the legal, political, economic, social and cultural variety. The notion of disruption is based on the idea that those who hold real power will cede nothing without a fight. And from a progressive grassroots perspective, this means mass-based movements raise the cost of a particular system or practice’s functioning to the point positive changes result, often in policy and legislation.

As for “agents and organizations of change,” various sectors of society, organizational forms or even individual organizations play a leading role in specific historical struggles. In the 1930s, during the Great Depression, unemployed councils were central to anti-eviction actions that resulted in some cities no longer carrying out legally sanctioned evictions. In automobile factories, industrial workers used sit-down strikes to win wage increases, prevent firings and gain greater control of the production process.

The sit-down strike was a tactical innovation that spread quickly because it allowed a few workers to shut down an entire factory, and they were battling on a terrain, the shop floor, that was both conducive to organizing other workers and easy to defend.

This is another key principle: tactics have to be reproducible and able to achieve tangible victories, which allows them to go viral, such as the lunch-counter sit-ins during the Civil Rights Movement, draft-board break-ins during Vietnam, or attempting to shut down meetings of international bodies during the heyday of the global justice movement.

The structures to be confronted are the institutions that embody a key contradiction of the historical moment. A simple definition of an antagonistic contradiction under capitalism is one that involves different social classes with contradictory interests.

Thus, American apartheid was a contradiction because it pitted African-Americans with severely limited economic opportunities and political rights against a ruling white structure that benefited materially from the oppressive system. The global justice movement tried to heighten the contradiction of undemocratic transnational bodies enforcing free-market ideology on the poor and workers worldwide in the name of freedom and democracy.

THE CURRENT MOMENT
The key contradiction of this historic moment is the fallacy of neoliberalism. It was capitalism unfettered of government oversight and regulation that created this crisis, but to save the economic order, losses are being socialized through massive government intervention by redistributing wealth upward.

For the left, one opening is to organize around the idea if losses should be socialized, so should wealth. The roots of this crisis lie in the stagnant wages and reduced social benefits under neoliberalism. Creating a productive economy means ending debt-driven consumption by raising wages and making more social benefits universal, such as healthcare, housing and education. And this means redistribution of wealth.

A final note. The ecological crisis is intertwined with the economic crisis, so green solutions have to be central to economic restructuring. The “green jobs” proposal is a bit of a scam, however. It will probably be crafted to inflate a new speculative bubble, both in the stock prices of alternative energy companies and in financial products related to trading in pollution credits, e.g., capping and trading carbon emissions. It’s not designed to address the ecological crisis so much as the financial crisis.

As long as Wall Street calls the shots, it will structure the economy for its class interests at the expense of workers and the public. The left needs new mass-based movements that aren’t just in opposition, but have a clear vision and strategy for the future.

   

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