Populism as Legitimate Class Politics

“As philosophy finds in the proletariat its material weapons, so the proletariat finds in philosophy its intellectual weapons, and as soon as the lightning of thought has struck deep into the virgin soil of the people, the emancipation of the Germans into men will be completed […] The head of its emancipation is philosophy; its heart is the Proletariat. Philosophy cannot realize itself without transcending the Proletariat, the Proletariat cannot transcend itself without realizing philosophy”. [Karl Marx, 'Towards a Critique of Hegel’s Philosophy of Right: Introduction']

In his latest post David Harvey explains the current financial crisis and touches upon a number of points. Given its sweep, it is not possible for me to summarize it here, and it is best if you can read the whole post in its entirety.

The only point that I want to make is that the question that he raises about class politics and the leading role ascribed to the industrial working class aka the proletariat. This is because Harvey addresses a question that has befuddled me for over a decade and a half. A classical Marxist position has been the leading role of the proletariat in socializing the means of production and therefore the social surplus (profits) that accrue. The proletariat, whether in the industrialized world or its nascent cousin elsewhere has not taken a leading or even a participant role in anti- capitalist struggles. Lenin explained the absence of a revolutionary proletariat in the West due to the emergence of a ‘labour aristocracy’.

“I have found a flaw in free markets”. Wow

It is almost like live blogging as history is being made right in front of our eyes- today we have Allen Greenspan admitting that that he has finally found a flaw in the free- market system that he has believed to be working exceptionally well for the last 40 years.

It is one thing when the heathen criticize the neo- liberal assault, another when the gods themselves begin to doubt the divine.

Allen Greenspan: “I have found a flaw“

“I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms,” Mr. Greenspan said.

Referring to his free-market ideology, Mr. Greenspan added: “I have found a flaw. I don’t know how significant or permanent it is. But I have been very distressed by that fact.”

Who is to Blame?

Is it that the Indian champions of the ‘free- market’ and liberalization-as-magic-wand have disappeared or is it just that I am not reading enough?

One of them, Swaminathan Anklesaria Aiyar, whose column ‘Swaminomics’ has been a byword for the neo- liberal assault in the Indian media for many years, does write on the debacle on the Wall Street, but  blames it on the ‘perils of giving loans to the poor’!

The crisis arose from the bursting of a housing bubble. That bubble was created, fundamentally, by government policies and institutions seeking home ownership for all Americans, including low-income ones. Politicians rooted for such inclusive finance. But this ‘inclusion’ extended finance to ever more borrowers with fragile and low incomes,  causing disaster. This holds lessons for India.

Capitalism: A system built to fail

Professor, Richard Wolff of the University of Massachusetts explains in this superb lecture, why the financial crisis is the biggest crisis of capitalism in his, and our, lifetime. Listen till the end, because that is where the symphony’s crescendo is.

Click here to watch the video (38mins). Link via Lenin’s Tomb

[and WordPress- I hate you, for once, because I can't embed a google video in the post].

Read also Prof Wolff’s recent articles in MR.

Capitalism happens.  When and where it does, capitalism casts its own special shadow: a self-critique of capitalism’s basic flaws that says modern society can do better by establishing very different, post-capitalist economic systems.  This critical shadow rises up to terrify capitalism when — in crisis periods such as now — capitalism hits the fan.  Karl Marx poetically called that shadow the specter that haunts capitalism.

This one is on the so- called distinction between the main street and wall Street, or regulated and un- regulated capitalism. Capitalism is capitalism, in whatever form in comes. The main street leads to the Wall Street.

Capitalism has everywhere oscillated between private and public phases.  Private capitalism minimized government interventions and mostly kept state officials off boards of directors.  In capitalism’s public phases, governments intervened and sometimes replaced private with public members of boards of directors.  Crises of one phase often provoked transition to the other.

When it Rains, it Trickles

The trickle down of the “free market”… it’s finally there!

Source: Tom Tooles at NYT

‘Bailouts’: Socialism (and Capitalism) on its head

John Lanchester, writing in the LRB has one of the finest writings from the left on the financial crisis (no, unlike the fall of ’socialism’, it is a mere crisis, not the ‘End of History’!). Lanchester also ends with the general pessimism on the left regarding the lack of a left alternative despite the optimism generated by the vindication of its theoretical criticism of capitalism in general and the neo- liberal led globalization in particular.

Perhaps, Francis Fukuyama was right and it indeed is the end of history.

The invention which made it possible for the lending to become so reckless was securitisation: the process by which loans were added together and sold on to other institutions as packages of debt. This had the effect of making the initial lender indifferent to whether or not the loan could be repaid – he’d already sold the debt to someone else, so he didn’t need to care. These packages of debt were then sold on and resold in the form of horrendously complex and sophisticated financial instruments, and it is these which are the basis of the global jamming-up of capital markets.