Monthly Archive for July, 2011

China’s economy by Humphrey McQueen

Chinese Crackers (pdf, 35pp)

This article is an analysis of China’s economy by Humphrey McQueen, published in February 2011 by Surplus Value. Thanks to Jim Sharp for drawing our attention to this. I don’t currently feel expert enough to evaluate Humphrey’s detailed research and interpretations but it does strike me as well worth discussion.

uncomfortable science

Uncomfortable Science

In her new blog Nicole Pepperell points out that a scientific approach requires epistemological humility but this does not preclude scathing critique and social activism. The nature of the scientific approach requires both.

It will likely be counter-intuitive for many readers for me to suggest that Marx’s work operates from a similar standpoint of humility – a similar sense of the boundedness and limitations of our present time – encased in a scathing critique of the so-called “scientists” of Marx’s own time, who claimed to be able to find a solid and incontestable ontological ground for their fleeting “discoveries”, who pretended to elevate short-term insights of a particular historical configuration – as if these had always and ever been the implicit and latent truths of material nature or human history. In Marx, this sense of humility – this awareness of our boundedness to our own time – did not stand in the way of a present-day commitment to practical transformation: it was instead its very basis. But even revolutionary transformation stands at a kind of event horizon – obliquely reaching forward with sensibilities engendered in our own moment, grasping for gratifications we have been socialised to desire – but in the process creating a new world, whose sensibilities and desires are necessarily opaque to us.

What is the nature of Marx’s contribution to the scientific world view? I’m looking forward to more discussion of this question.

marx and the domains of ignorance

The domains of ignorance:

Known unknowns: All the things you know you don’t know
Unknown unknowns: All the things you don’t know you don’t know
Errors: All the things you think you know but don’t
Unknown knowns: All the things you don’t know you know
Taboos: Dangerous, polluting or forbidden knowledge
Denials: All the things too painful to know, so you don’t
– from The Domains of Ignorance

The domains of ignorance are relevant to Marx. Some people don’t read it because it is taboo. Some people read it and think they understand it and they don’t. Some people have a superficial knowledge of Marx and think that is good enough. But none of that really explains the extent of the marginalisation of Marx. I think the main issue is that he is difficult to understand. The thing missing from the domains of ignorance is contradictory knowledge.

This problem is not new. Isaac Deutscher provides an anecdote about the knowledge of Marx in that era (the 1930s):

“Capital is a tough nut to crack, opined Ignacy Daszyński, one of the best known socialist “people’s tribunes” around the turn of the 20th century, but anyhow he had not read it. But, he said, Karl Kautsky had read it, and written a popular summary of the first volume. He hadn’t read this either, but Kazimierz Kelles-Krauz, the party theoretician, had read Kautsky’s pamphlet and summarised it. He also had not read Kelles-Krauz’s text, but the financial expert of the party, Hermann Diamand, had read it and had told him, i.e. Daszynski, everything about it”

Marx’s critique of political economy is old knowledge, forbidden or marginalised knowledge and difficult to understand knowledge. Because it was written 150 years ago many think it is no longer relevant. Because communism is believed to have been tried and found wanting many who want radical change think it could not provide the answers. Because Marxism is an insignificant part of mainstream education and in particular not taught in the economics faculty then it is only going to be accessed by those who think outside of the mainstream. Finally, the many volumes of Capital and related works are difficult to understand for a variety of reasons.

Conceptually the work is very rich and it is difficult to keep the whole of it in your head. Marx uses a method of investigation (his adaptation of Hegelian dialectics) that is unfamiliar to moderns. Much of the language he uses is unfamiliar and this issue is exacerbated through a variety of translations. The prose is dense. Marx established a precise, strict terminology, eg. use value, exchange value, value, relative and absolute surplus value and then uses it rigorously for hundreds of pages. Therefore you must pay close attention, otherwise you are lost. He frequently uses French and Latin quotations. He also employs fascinating, tangential footnotes, which must be read.

The economic crisis which began in 2007 revealed an intellectual crisis, which did already exist, but was not so obvious before the economic crisis. For much of time following WW2 economic crisis was absent, the capitalists had appeared to work out how to stabilise an unstable system. That assumption has now been shown to be false.

My contention is that to understand the inner workings of capitalism you have to understand Marx. Although this will not provide a magical solution to the current issues of ongoing economic crisis it will provide a deep appreciation of the inner contradictions of capitalism that make it forever an unstable and unpredictable system.

the grapes of wrath

The Grapes of Wrath (1940) is a movie based on John Steinbeck’s Pulitzer Prize-winning, widely-read 1939 novel. I watched it in my youth and was moved by the graphic descriptions of grinding poverty in The Great Depression and the fight by the Joad family underdogs (and their preacher friend, Casy, who stopped preaching because he didn’t know what to preach anymore) against the powerful forces of the State.

I watched it again a few days ago (here is the torrent) and it is still an amazing movie. The overall wealth of industrialised countries has improved dramatically since The Great Depression. Rather than abject, grinding poverty and starvation the poor are better off absolutely although not relatively. Nevertheless, the fundamentals haven’t changed, the rich get richer and the poor adapt and / or resist according to their organisation and circumstances. How much things have changed and yet how much they remain the same.

Filmsite Movie Review: The Grapes of Wrath

I just love this sentence

“The discussion at the Sydney Writers Festival is an extraordinary example of group-think, with opponents demonised, prejudices reinforced, counter arguments totally ignored and platitudes treated as profundities.”  Andrew Bolt – Monday, July 18

Why do we still have waiters?

If anything indicates the tardiness of capitalism to introduce new technologies, it would have to be the continued existence of waiters. The Associated Press has a gee whiz piece on a London restaurant where rather than ordering with one of those annoying pests you use a touch screen.   A waiter is still required to deliver your food to the table so the technology is only halfway there. How come some “entrepreneur” has not made a move on this one before now? Why don’t we have chains of restaurants where you place you order electronically and wait for the meal to arrive via some gadget attached to the ceiling?


making sense of the eurozone

Will Greece default? Or will the debt be restructured? What will then happen to Portugal, Ireland, Spain, Italy etc.? Does the structure of the eurozone create its own special problems on top of the declining world economy?

In searching for answers I have found the analysis of blogger Protesilaos Stavrou (Critical views on current affairs) helpful. Although the following does not directly address the wider problem of the ailing world economy he does make a strong case that there is a problem with the euro itself which makes things worse:

European leaders created a monetary union, a single currency, without a coordinated fiscal policy (a fiscal union), thus leaving the euro open to serious shocks that would hit directly at this systemic flaw. This is the reason why the once two-speed eurozone has become two-tier, since national economies grew unequally, as the economies of the more efficient countries of European center were concentrating the surpluses of the eurozone, while the periphery was left with debt and the illusion of prosperity that came from the once cheap loans. That is the reason why we say that the surpluses of the North (Center) are the deficits of the South (Periphery).

Failing to address the structural flaws of the euro, means failing to see the real problem, which is basically what happens today, since all European officials speak of the “Greek”, “Irish”, “Portuguese” crises, as if those are not related anyhow to the way that the single currency functions. That kind of approach, is made manifest in the bailout packages that are given to these countries, which do not aim at preventing defaults and bringing national economies back on track, but at buying precious time for German and French banks, who hold around 30% of their respective countries GDP in government bonds of the European South, so as to avoid a more generalized crisis. The bailouts are thus a means of indirectly financing German and French banks and minimizing loses.

These practices will not solve the problem. All they will do is accumulate more problems that go beyond the scope of economics into social and political spheres that will at some point erupt with unpleasant consequences for the EU architecture. For as long as the systemic flaws of the single currency are not touched upon, there will be no viable solution to the eurozone’s debt crisis
Systemic flaws of the Euro are the root of the debt crisis

Here are direct links to some of his key blogs:

update: July 6: An overview of the four dimensions of the Greek Crisis

July 4: Systemic flaws of the Euro are the root of the debt crisis

July 3: Eurogroup chairman speaks of limited Greek sovereignty

July 1: Market relief will be short lived over Greek debt

June 29: Evaluation of the new austerity measures in Greece

June 28: Ad hoc measures can not save the EU

June 19: The effects of a Greek debt restructuring

June 1: The scenario of Greece switching to the Drachma – Goodbye Euro

update: May 30: About the “change” the Indignant want

May 23: Better for Greece to default rather than take new austerity measures

May 16: What if Greece goes bankrupt?

May 10: Two-speed Europe becomes TWO-TIER

May 4: The European safety mechanism dooms Greece

update: April 7: The Greek Odious Debt and its Essential Lies

July 4 : Long live the revolution!

Bunker Hill





Happy birthday America!






“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.”



Pretty good stuff, I’ve always thought.

During the Vietnam war it was in the spirit of 1776 to celebrate July 4 by taking to the streets in support of the revolutionary struggle of the Vietnamese people.

Now it’s in the spirit of 1776, to demand that the US and its allies stay in Afghanistan, that they continue to back the revolution in Libya, and that they get serious about outlawing dictatorship everywhere.