Capital, Wealth & Poverty

reviewed by MC5

We review these books together, because they complement each other nicely. They are important books to MIM, because their authors agree with MIM's third cardinal principle, the scientific truth that the majority of the oppressor nation workers are not exploited.

On the one hand we have Arjun Makhijani, who according to the book jacket is "President of the Institute for Energy and Environmental Research near Washington, has worked in India's villages, organized for nuclear disarmament in the U.S. and written widely on energy, environmental and economic issues. He has a Bachelor of Engineering degree from the University of Bombay and a Ph.D. from the University of California." Arjun Makhijani represents the most radical thinking of the Third World petty-bourgeoisie possible.

W. Paul Cockshott and Allin Cottrell are academics in computer programming and economics respectively. Towards a New Socialism contributes to overcoming petty-bourgeois thinking by discussing how advances in technology make centralized planning of the economy easier with every passing year. At the same time, the authors are internationalists, just not as thoroughly internationalist as Arjun Makhijani.

Petty-bourgeois internationalism

Arjun Makhijani does not claim to be Marxist, and for this reason he is a good friend of the people, because many people with similar views - Karl Kautsky for instance - would attempt to pass themselves off as Marxist.

Makhijani shares MIM's vision of internationalism, and we vouch for his staunch anti-imperialism and anti-militarism. He also has the factual understanding of the international class structure correct, often using phrases MIM has also used to describe it: "The well-being of the capitalist countries has been inextricably intertwined with exploitation of the Third World." (p. 74). Makhijani's program is identical to MIM's on opening borders as well (p. 104).

Pointing out that one-third of the world consumes 95% of all resources, Makhijani has a firm grip on conditions of the Third World. Makhijani also refers to "global apartheid" (p. x) and the opposition of oppressor nation workers to change. For this reason, we agree with Makhijani right down to the details of the political economy of the oppressor nation workers: "Even as Marx was writing Das Kapital, the mechanisms for the transfer of poverty out of the capitalist countries were operating in full swing"(p. 63). See also his contrast of the Third World and "the majority of Whites in their own countries" (p. 43).

Grasping the nature of superexploitation, Makhijani explains transfer pricing within multinational companies as a means of hiding profits obtained from the Third World (p. 14) - something that Cockshott and Cottrell fail to do in their calculations of the exploitation of workers in the United Kingdom. Makhijani also dedicates a considerable part of the book to the political (non-market) process which impinges on exchange rates among countries, thereby cheapening Third World labor. He then suggests a program of action to reform capitalism to radically improve Third World conditions without a program of redistributing existing industrial fixed assets.

Rejection of Leninism

Makhijani does not deny that the most important statistical comparisons show that Lenin's communist system defeated the capitalist system (pp. 74-75) and was only destroyed for reasons other than success or failure in terms of providing for the social good. On the other hand, Makhijani rejects "the violence of Stalinism" (p. 59), the vanguard party idea (p. 61) and the dictatorship of the proletariat (p. 136). Forced to hang his hat on the example of Kerala in India (pp. 132-137), Makhijani nonetheless correctly points out that communist-led socialism has been a less violent system than capitalism. (We leave it to our comrades in India to explain why they believe the Kerala example is a false road forward.)

Along these lines, Makhijani accepted that the communist system lost out in the race to provide consumer goods and turns it into a gender issue by saying wimmin were the ones who had to stand in line (unpaid) in the Soviet Union. Although Makhijani never addressed how far behind Russia was in the consumer goods race before the Revolution of 1917, the point will appeal to the historically ignorant or lying bourgeoisie that Makhijani is writing for.

Makhijani

"Human life is lived individually, in families and in the small structures of communities. The intimate decisions of everyday life are best made at that level, if only because the knowledge of what needs to be done is greatest at that level. The love and nurture that are needed in everyday life also cannot be dispensed by macroeconomic structures, but must necessarily be in the small structures of everyday life. Whether it is husbanding the land, bringing up and educating children in homes and schools, deciding where a sign for a deaf child should be put up on a street or what parts of a house or office need fixing, or any of the myriad decisions that people make every day, considerable control over property at the local level is essential. In that respect, capitalist theory is closer to what we need than Marxist theory" (pp. 109-110).

Makhijani agrees with MIM on the international class structure and many fundamental values while disagreeing with MIM on how the world works. The petty-bourgeoisie is the class most inclined to champion the efforts of the individual overcoming the obstacles placed by larger capitalists or the discipline of proletarian movements.

According to Makhijani, Lenin and Mao's successes came because they bowed to the petty-bourgeoisie in the countryside: "There were strong demands for a plot of land that the peasant could control, no matter how small" (p. 66).

Makhijani is able to explain the economic rationale underlying the petty-bourgeois position very clearly: "It is therefore incorrect to view the property of the poor peasant or small scale property held in a manner of a farmer in the same light as that held for profit. When earnings from such holdings are comparable to income from holding a job, it is more appropriate to view such forms of property as means for the control of one's labor and as insurance for hard times" (p. 108). MIM disagrees with this, because while the worker obtains income from a highly centralized and social process, the petty-bourgeoisie described by Makhijani can obtain the same income without an understanding of the rest of the world, and thus holds relatively parochial views incompatible with internationalism and world peace.

We must concede that there is a material basis for Makhijani's views in that studies show that in much labor-intensive agriculture, there is nothing more productive than small-scale farming. Such agriculture is not susceptible to improvement through capital investment, collective farming or centralization and a substantial section of the world's population still undertakes such farming - coffee-bean growing for instance.

Where MIM disagrees with Makhijani is that the type of farming best suited to the petty-bourgeoisie is not really typical of the global economy and is in fact becoming evermore irrelevant. We continue to support the land-to-the-tiller new democratic stage of revolution in the semi-feudal countries as Lenin and Mao did before us, but such a stage must be led by the proletariat, which is the class capable of looking toward the future. In contrast, Makhijani advocates that everyone have a small piece of property for which he or she is responsible. Makhijani does not see how tending to one's own plot of land or property or locality is blinding and leads to destructive anti-social behavior including the cut-throat economic competition that underlies the war and environmental destruction that Makhijani seeks to eliminate.

Petty-bourgeois environmentalism

Like some in the First Nations and the petty-bourgeois environmentalists, Makhijani opposes large-scale production. Speaking of Leninism, Makhijani says: "Both of these problems have been reinforced by the uncritical acceptance of large-scale industrialism as the vehicle of 'progress'" (p. 61).

MIM disagrees with the petty-bourgeoisie's idealized view of how to restore nature to a mythical time when natural people lived on individual plots or areas of land. Every little farm having its own tractor or car is a perfect example of environmental waste but it would be classic petty-bourgeois thinking. Likewise, there is nothing more centralized or "large-scale" - and industrial - than public transportation, but that is crucial to protecting the environment.

True internationalism merges with environmentalism, because no locality should have the "right" to pollute more than is necessary with the most environmentally advanced techniques of production feasible. Self-interested communities that pollute the air, water and land used by others violate the principles of internationalism where all peoples are equal. Thus, in practice, there is no true petty-bourgeois internationalism or true petty-bourgeois environmentalism.

Centralized planning: Cockshott & Cottrell

Advances in computers make socialist economic planning more feasible than ever. According to Cockshott & Cottrell, socialist planning is possible using spreadsheet and database software already available in the capitalist world. There is no need for supercomputers, because even intermediate technology is plenty good enough for the task of replacing the marketplace:

"If there are one million products, then teletext should be able to broadcast revised labour values every 20 minutes. The products would be identified by their universal product codes. The personal computers listen in and update their spreadsheet model in response to any broadcast changes in labour values.

"If for any reason the personal computer in a place of work decides that the labour value of the product produced there has changed, it dials up the central teletext computer and informs it of the change. These changes might either be due to some change in local production technology, or a broadcast change in the value of one of the inputs. The whole system would be acting as a huge distributed supercomputer continuously evaluating labour values by the method of successive approximation" (p. 59).

In this system, people would be programming the computers to know when production techniques changed. Included in the possibilities of such a system are a computer-created equivalent of a market to account for demand quickly. "It depends neither on private property in the means of production, nor on the formation of market prices for the inputs to the production process" (p. 125). Hence, the question of whether to have a computer facsimilie of a market without exploitation or a system in which political leaders decide appropriations can be left for later. MIM believes that at least until we reach a more perfect stage of communism, the ex-imperialist countries will require centralized control in order to overcome past imbalances with other economies.

In the past, the petty-bourgeoisie and bourgeoisie have criticized socialism because socialist governments allegedly cannot act as quickly as a spontaneous market of millions of people. In capitalism, supposedly, if people buy Barbie dolls, the "market" wants them, and so on - which is faster than accumulating information and passing it on to a socialist planner to make a decision in an office far away. As Cockshott & Cottrell have proved, this may have been true in the distant past, but it is no longer close to being true. Today we have the technical capacity to disseminate economic information very quickly and much more thoroughly and extensively than the market has in the past. All that is lacking is the political will.

Note that this argument is just about the information/efficiency side of the debate. Socialism has been able to better provide for people already, but just making a few big correct decisions - such as making food instead of Barbie dolls, or satisfying needs at home before exporting luxury commodities to imperialist countries, and so on.

Back to information. In the past, thanks to private property, much economic information of corporations has been labeled "confidential" and other kinds of important information affecting the composition of production can be protected by trademarks. These elements of private property block the flow of information upon which the market depends. Such distortions of economic information created by the profit motive are removed under socialism. Petty-bourgeois views of local control seek to keep in place such barriers to the flow of information and indeed the petty-bourgeois view starts with the assumption of such barriers. As Marx predicted, petty-bourgeois views become increasingly out-of-date. "To establish the free and open flow of information demanded of a rational planning system will require not only the legal abolition of commercial confidentiality, but also the redesign of most of the installed computer software currently in use" (p. 128). In a system of economic cooperation, people don't hide information from each other to damage each other. The petty-bourgeois view presumes just such behavior, whether consciously or unconsciously.

The Internet

Contrary to the petty-bourgeois line, centralization often creates important opportunities for the masses to gain access to the means of production and the process of production. In addition to the examples provided by Cockshott & Cottrell, nothing makes this clearer than the Internet.

1. From its earliest days, the Internet has made clear the possibility for global dissemination of software at a rapid pace. Law enforcement against computer hackers and pirates represents only the latest capitalist clampdown holding back production. The existence of free technical advice on the Internet makes it ever clearer that private property is holding back production.
2. For the environment, the Internet provides a global mechanism for whistle-blowing with an audience larger than any newspaper's. Whereas those with their noses stuck in their own property and locality will have an incentive to pollute other communities, those with access to the Internet will have a means of shooting down such selfish endeavors.
3. For those who would otherwise be living in limited communities scientifically-speaking, the Internet provides a means of gaining the scientific and environmental know-how to understand the issues of pollution in one's own locality.
4. The Internet stimulates all the communications and scientific endeavors of the masses by making a wide variety of such practices possible quickly and easily. Just as public transport should be owned by the public and free for each rider for the good of the environment, so should the Internet be free. Having a series of smaller community networks (like that championed by BBS administrators) is actually a waste both to the environment and in terms of labor - and it promotes parochialism. The only reason the BBS is progressive at this time is that property relations contaminate the Internet, making it possible that it can be easily controlled by the capitalist class and its state; hence, we sometimes prefer variety in our computer administrators, some BBS and some Internet.

The power of something like a "search engine" which explores everything on the worldwide web to find answers is available to any user and hence is a boon to the masses' scientific level. Software that makes computer power available to users without knowledge of computer programming is also progressive. To those who say the increasing use of computers and robots in production will obviate the labor theory of value, because it appears labor is unnecessary in production, we say the opposite: what could once only be done by science management experts is now far surpassed and available to the masses through computers.

The Internet is proof that where property relations are minimized, the gains in scientific advance and communication can be rapid. Feeble notions of "local control" pale in comparison. Already many people use the Internet as a cheap international telephone. For $20 a month and a local phone hook-up (which most in the imperialist countries already have) people can communicate for unlimited periods of time with people overseas. Those who would glorify local economy and control over such an advance make us doubt their connection and love of the rest of civilization. Such could serve as the definition of anti-internationalist chauvinism.

The Internet has demonstrated its capacity for stimulating internationalism more than any number of cultural exchanges more limited in scope. It will be our goal to hook up every village to the Internet with access for all. If it also carries such decadent and oppressive features as pornography, that may be attributed to the class and gender character of its creators and the societies in which it emerged.

Centralized solutions for imperialist super-exploitation

Makhijani designed his book to have some appeal to the internationalist imperialist bourgeoisie. What Makhijani offers the internationalist bourgeoisie is no less than a plan to undercut the protectionist sectors of the ruling class and labor aristocracy, a means to stimulate the global economy and a centralized and coherent way of stabilizing "free trade." As such, Makhijani's petty-bourgeois internationalist view picks up where the most left-wing flank of the internationalist bourgeoisie leaves off.

Makhijani's program appeals to the internationalist bourgeoisie as follows:

1. Ridding the world of superexploitation will stimulate the global economy: "What incentive is there for people who make 50 cents a day to excel and innovate?" (p. 93). We Marxists call this glorifying the "bourgeois right to distribution," something progressive at this stage of history where there is no socialism yet but reactionary once we reach socialism. Makhijani's point three below guarantees an increase in Third World purchasing power and the consequent stimulation of the global economy.
2. Offering Third World petty-bourgeois acceptance of a U.N. global army and navy, a pet concern of the long-range view of the internationalist bourgeoisie (p. 118).
3. Setting exchange rates based on a real basket of goods in each country (p. 123). This is a lynchpin of the whole reform Makhijani proposes and it contains a hugely progressive content recognizable to Marxists. No longer would political processes (military aid to U.S. puppets in most cases) hold down Third World labor costs. Currencies would exchange in such a fashion that everyday needs exchange for the same price in any two countries. Such a maneuver of international bankers could not be parried by local elites seeking to maintain their death-squad control over labor.
4. Issuing a new international currency (p. 123). This combined with point three allows for free trade integration without "readjustment," because inflation is automatically and realistically accounted for. An international bourgeoisie seeking to implement its policies with less resistance will find this idea extremely persuasive - if it can cut through its own commodity fetishism long enough to understand it.
5. Creating a stock of reserve commodities in each country ready to make up for any trade deficit (p. 123). This idea is thrown as a bone to those retrograde thinkers longing for the gold standard to guarantee currency stability.

The ideas of Makhijani and his international finance partner Robert S. Browne are a challenge to the intelligence and especially the training of international bankers and economists. However, in the pinch, these ideas might yet prove to be the right ones at the right place and the right time for the internationalist bourgeoisie.

Stalled as it has been since Adam Smith and other economists published books in the 1700s and early 1800s advocating "free trade," the internationalist bourgeoisie is not strong enough to implement true free trade via NAFTA, GATT and the EEC or any combination of regional treaties. Hence, there is some chance that Makhijani's ideas or something like them may form the basis of an attempt at radical capitalist reform by the imperialist bourgeoisie in order to save its system from crisis.

Makhijani admits that the banking solution offered in the book seems to involve centralism of the highest level - a world bank (p. 124). We do not believe Makhijani succeeded in denying this. Instead, we believe that any solution to the world's global problems caused by a global class structure require a global understanding and action. The days when societies will live in autarky (distinctly apart from each other economically) are gone in the long-run. Those seeking to overcome the injustice of superexploitation have no choice but a globally centralized solution. We at MIM do not believe that such a system can be created within the context of private property.

The future of internationalism

There will be a choice between bourgeois globalism and proletarian internationalism. A third current of protectionism and oppressor nation fascist movements will seek to restore the past order of domination, but they cannot succeed either, because of the demands of all peoples for equality, self-determination and respect which all peoples back with military force. This third current can lead nowhere but to the end of civilization. The bourgeois internationalist option is where the action is for the system to sustain itself, but it too will prove unstable and liable to break down into the third current. A portion of the bourgeois internationalist current will discover in the upcoming crisis of bourgeois internationalism that "free trade" as an ideal can be preserved but only through implementation under communism.

The enemy of the environment and peace is not centralization or decentralization. It is property relations which seep into both centralized and decentralized systems. Tito's Yugoslavia pursued "local control" of enterprises and encouraged parochialism economically without a view for the overall production of commodities and appropriation of labor. The result is there for everyone to see - the most virulent and petty of parochial nationalisms and war. In contrast, Mao's view was correct during the Cultural Revolution: there was no choice for the masses but to understand the whole ball of wax. They must become red politically and expert in both science and administration.

The petty-bourgeois view is doomed to the trashcan of history, because communications and transport advances will make the local view of community obsolete. Already Internet communities put internationalism increasingly into practice.

In the squeeze between communist revolution in the Southern Hemisphere and protectionism within the imperialist countries, Makhijani's ideas may come to sound very good to the internationalist bourgeoisie. The Mensheviks of the world should at least get on board with Arjun Makhijani and stop trying to whip up oppressor nation nationalism amongst the workers - and stop trying to claim Marxism.

Buy From Global Capitalism to Economic Justice
Buy Towards a New Socialism

Global Paradox: The Bigger the World Economy, the More Powerful Its Smallest Players
by John Naisbitt
(NY: William Morrow & Co., 1994)
304 pp. hb

Naisbitt is a futurologist and author of Megatrends. His book Global Paradox received advance praise from many in the corporate world, no doubt because of his typical business pulp writing style of name-dropping and bourgeois optimism appropriate for a concatenation of extended corporate press releases. We can only recommend this book to the Rip Van Winkles of the imperialist countries who have kept their heads under a technological rock regarding the computer and telecommunications advances of the last few years. Otherwise the book lacks in rigor and thoroughness to back its many assertions.

Dialectics

The main theses of the book do take dialectical form; although Naisbitt is business-savvy enough not to call them such.

He predicted that 100 countries would form in the last few years of the 1990s.(e.g., p. 274) He proved wrong, but his reasoning was that increased globalization and Amerikan domination would give rise to efforts to preserve small aspects of culture. We see this as a dialectical thesis, because it points to the rise of one force as a result of the rise of another opposite force.

China

The mantra of the book is that smaller business actors with fewer rules and regulations will do better than larger corporations and bureaucracies. Using the mainframe computer as a metaphor for centralization and large size, Naisbitt says the world no longer needs mainframe computers, mainframe governments or mainframe bureaucracies. He accepts without proof or detailed knowledge the most basic shibboleths about socialism as restrictive to knowledge and bureaucratic. (e.g. p. 72, p. 99)

Although he considers China to be the most centralized country in the world, he concedes it is the fastest growing and he counts it as capitalist. When it comes to counting whether a country proves his thesis or not, he counts China as capitalist so he can claim its economic growth for capitalism. Yet when it comes to politics or centralization, he says that China is on the wrong side. It is typical of the bourgeois propagandists to attribute all good things in China to capitalism while all bad things are a result of not being capitalist enough; even though, by their own standards of economic growth China is growing the fastest in the world.

Naisbitt's line is music to the ears of the petty-bourgeoisie. Again and again we are told that the individual is the great economic actor and does not need to be told what to do. The ideal corporation is in fact just a network of entrepreneurs according to Naisbitt and for this reason, China and its overseas community of 55 million Chinese are a model of economic growth for the future.

According to Naisbitt, the Cultural Revolution was "a decade of nihilistic repression," (p. 182) in which art was supposedly banned (see p. 212 for this idiotic assertion), but China today is the most important economic event of the close of the 20th century.(p. 225) He predicts that China will surpass the U.$. economy in size very shortly and unlike Lester Thurow at MIT who holds that the Chinese are as yet too poor, Naisbitt holds that even without Japan, the Chinese-led economic community will lead the world in the early 21st century.(e.g., p. 256) MIM itself did not make any such prediction on which bloc would lead early next century, but we agree with Naisbitt indirectly, because we believe that the surplus labor appropriated by U.$. imperialism from China (including Hong Kong and Taiwan), Korea and Singapore is a large and unrecognized part of the reason for white-collar prosperity in the United $tates.

Not surprisingly, Naisbitt sings the praises of the counterrevolutionary Deng Xiaoping for China's consumer revolution supposedly more profound than the one Mao brought to power in 1949. Of note is his completely erroneous prediction that Taiwan and the Mainland would patch up relations in 1994 and 1995.(pp. 219-20) Instead, also contrary to predictions, Taiwan and Mainland China are drifting apart and there has been an Asian economic crisis.

Naisbitt was one of the many ubiquitous bourgeois propagandists saying that Malysia, Thailand and Indonesia were joining "China, Taiwan, Hong Kong and Singapore" in wealth.(p. 257) In contrast, MIM had already predicted prior to Naisbitt's 1994 book publication that Malysia, Thailand and Indonesia would not "make it." These countries still had their old landlord classes in power and endured semi-feudal conditions not undone by land reform as in the other places called "Four Tigers." The Asian crisis has proved once again that there is no short-cut around vigorous class strugge against the agrarian landlord class.

Environment

Naisbitt took a few bites on the environment question and then spit them out. He says that warnings about another Ice Age or global warming may be just socialist propaganda.(p. 159) We agree in the sense that any humyn activities that could tip the planet toward cold or hot temperatures show how meaningless it is to talk about the individual as the center of analysis. The environment cannot be compartmentalized or divided up into little bits and sold off. That is why the bourgeoisie fears environmentalism as socialism. Nixon spoke of watermelons, "green on the outside, but red on the inside."

Naisbitt seems to realize that the environment may justify centralized impositions. He merely says it is not possible to make everyone happy.(p. 158) He also spews Al Gore type line on corporate executives as green and says in one isolated paragraph that the main alternative to capitalism will be "stewardship" of the resources.(p. 176)

This is one of those books celebrating every action of the consumer to be lazy and inclined toward capitalism. It never answers whether a global slide to consumerism and "pragmatic" economics will be the species's undoing. Our intellectual leaders should do more than just reflect the state of trends amongst the masses. To note what the people are doing and their trends without answering whether those trends are environmentally sustainable is just plain dumb.

Buy This Book

Bukharin wrote this book just before Lenin wrote his extremely influential "Imperialism: The Highest Stage of Capitalism." Bukharin finished it in 1915 and Lenin wrote an introduction. Bukharin's book came out in November, 1917, because censors had grabbed it before.

While Lenin was alive, Bukharin served as a theoretician for the party. He had his disagreements with Lenin, but Lenin approved of this book. Later in life, Bukharin turned against Stalin and his own previous views and Stalin had him shot. However, his disgraceful death does not change the truth printed in this book.

This book has many classic qualities, because World War I sharpened up Marxist analysis of imperialism. That's one reason why it is incorrect to refer to Lenin's earlier work such as "What Is To Be Done?" when it comes to issues of class structure, economism and imperialism. Our analysis of these issues must take World War I and the highest stage of capitalism into account.

Bukharin's fight against social-democratic chauvinism is unfinished today, because all the same issues he raised then arise again today. In fact, 1915 was really the last year of naivete for the communist movement. Thereafter, its line on imperialism and the labor aristocracy only hardened.

Bukharin's book comes with no real surprises for those of us trained in Lenin's theory of imperialism. Here we only list some of the notable quotes, all except the first being rejected by social-chauvinists, people calling themselves social-democrats or socialists in name but who are nationalists of imperialist countries in deed. The social-chauvinists work to slow the struggle against imperialism by flattering the imperialist nation working classes with fantastic tales of their own exploitation. We who carry the torch of Marxism-Leninism-Maoism reproduce the quotes below to shed light on the historic privilege and complicity of the First World workers -- Engels's and Lenin's labor aristocracy -- in the exploitation of the international proletariat.

1. "Just as there is formed a world commodity market in the sphere of commodity exchange, so there is formed a world market of money capital. This is expressed in an international equalisation of the interest and discount rates. Thus, 'the element of finance also shows a tendency to aid in substituting for the market conditions of an individual country, the world market conditions." (p. 25)

2. "Sombart drew a queer conclusion concerning the diminishing significance of foreign trade in general. However as Harms correctly remarks, even assuming that manufactured goods gravitate towards the internal market more than towards foreign markets (a conclusion to which Sombart arrives from the analysis of German data only), one must not, on the other hand, overlook the increasing import of raw materials and foodstuffs which serve as a prerequisite for the home trade in manufactured goods, for the internal market, since it is due to such an import that the country is not compelled to waste productive forces on the production of raw materials and food. . . . The tendencies of modern development are highly conducive to the growth of international relations of exchange." (pp. 38-9)

3. "Quite wide-spread is the practice of establishing branches in the form of nominally independent corporations whose funds, however, are held by their 'mother' corporation. The latter phenomenon is often observed in international relations. To avoid legal obstacles in a 'foreign' country and to be able to use the privileges of native industrialists in the new 'fatherland,' branches are being established in those countries under the guise of independent corporations." (pp. 46-7)

4. "Are not the costs of the struggle, i.e., military expenditures, perchance so large that it does not pay for the bourgeoisie to continue in this way? Is not such a plan as the proposed militarisation of England an expression of bourgeois 'stupidity' which is blind to its own interests? Alas, it is not so. We must attribute this quality rather to the naive pacifists rather than to the bourgeoisie. The latter keeps its balance sheet in perfect shape. The truth of the matter is that those who make such arguments ordinarily lose sight of all the complex functions of military power. Such power, as we have seen above, functions not only in times of war but also in times of peace, to back up its finance capital in 'peaceful competition.' The pacifists forget that the war burdens, due to the incidence of taxation, etc., are borne mainly by the working class, partly by the intermediary economic groupings which are being expropriated during the war (which means in the process of the greatest centralisation of production. . . . A series of wars is unavoidable. In the historic process which we are to witness in the near future, world capitalism will move in the direction of a universal state capitalist trust by absorbing the weaker formations." (p. 139)

5. "There is an opinion current among many moderate internationalists to the effect that the colonial policy brings nothing but harm to the working class and that therefore it must be rejected. Hence the natural desire to prove that colonies yield no profit at all, that they represent a liability even from the point of view of the bourgeoisie, etc. Such a point of view is being propounded, for instance, by Kautsky.

"The theory unfortunately suffers from one shortcoming, namely, it is out and out incorrect. The colonial policy yields a colossal income to the great powers, i.e., to their ruling classes, to the 'state capitalist trust.' This is why the bourgeoisie pursues a colonial policy. This being the case, there is a possibility for raising the workers' wages at the expense of the exploited colonial savages and conquered peoples.

"Such are the results of the great powers' colonial policy. The bill for this policy is paid, not by the continental workers, and not by the workers of England, but by the little peoples of the colonies. It is in the colonies that all the blood and the filth, all the horror and shame of capitalism, all the cynicism, greed and bestiality of modern democracy are concentrated. . . .

"All the relative 'prosperity' of the European-American industry was conditioned by nothing but the fact that a safety valve was opened in the form of colonial policy. In this way the exploitation of 'third persons' (pre-capitalist producers) and colonial labour led to a rise in the wages of the European and American workers. . . .

"It was pointed out by Friedrich Engels who referred to the monopoly situation of England in the world market and to the conservatism of the English proletariat that resulted therefrom." (pp. 165-166)

Buy This Book

Upon the recommendation of Dennis Brutus, MIM reviewed Masters of Illusion. We recommend this book as if it were an extended and thorough journalistic account of the World Bank from its beginning. Learning about the World Bank from this bourgeois source should be eye-opening to anyone considering communism.

The World Bank is an institution funded by the industrial countries to lend money for large projects in the Third World that no commercial bank would loan money for. The plurality of its staff is Amerikan economists.

Environment not counted Catherine Caufield correctly points out that bankers and economists by training and predisposition naturally incline to giving the environment short shrift. If there is no price on polluting or even killing, then economists do not usually take pollution or premature death into account. As a result with is large capital for large projects, the World Bank is behind some of the world's most destructive economic projects.

Throughout the Third World, bourgeois ideas of development have come along with environmental catastrophes sponsored by industrial country "experts" and bankers. Caufield provides the details and shows how difficult it is for the World Bank to change.

Agency of neo-colonialism The World Bank is to neo- colonialism what the missionary was to colonialism. Unwilling to work with local experts and government officials in the Third World, the World Bank provides the funding to establish entirely new agencies that fill the role that governments usually do in industrial countries. "By the early 1970s, more than half of all its loans went to autonomous agencies it had helped to establish in scores of countries."(p. 60) For this reason, some have seen the UN as a competitor of the World Bank, because both organizations set up their own branches in the Third World and both have pretensions of being world governments.

Theoretical Problems

While we recommend this book sheerly on a journalistic level, it has numerous theoretical flaws. The most grating flaw is to read this book as an indictment of the intelligence of bourgeois economists and Third World government officials, as if becoming a wealthy country the way these economists want is just a matter of applying the expertise of a handful of people.

MIM has to agree with Caufield that the Harvard, MIT and Oxford trained economists at the World Bank are especially stupid, because they tend to have little creativity and confuse their theories with the scientific and mathematical methods they learned in graduate schools. However, the ultimate underlying problem is the system arranging economic education and rewarding it to be removed from practical reality. Otherwise, these economists would notice that capitalism has a far bigger record of failure than socialism.

Based on the reports of World Bank staff, Caufield's report never rises to the level of thinking of systems that influence the behavior of large numbers of people. Hence, she lightly reports that bank insiders believe they undercut themselves by having quotas of loans to make. These quotas reduce their bargaining power with regard to the strings attached when it comes to working with government officials in the Third World. We are asked to be concerned that the "true rate of erosion in the Bank's bargaining power was more like from 50 to 35 percent [of what they want-- ed.]."(p. 103) This is despite the fact that no systematic evidence comes forth to show that increasing the Bank's power would be good for anyone but the Bank.

Even more neo-colonial in outlook is her comment that the Peruvian people were victims of demagoguery when some protested ceding control of the economy to the World Bank. (p. 136) Here the obsession with intelligence applied to rational policy merges with neo-colonialism of the sort that says the Peruvian people should just accept the supposedly more intellectually sound leadership at the World Bank.

Elsewhere Caufield sides with the bankers wondering if investments in education, housing and health pay off.(p. 125)

Typical of her whole atheoretical approach to development is her statement quoting one World Bank officer on why education projects fail : "'The best and the brightest' in government end up in the finance ministries and not in the education ministry." (p. 295)

Lenin Vindicated

If the reader reads Lenin's Imperialism before reading this book, the reader will see Lenin's theory vindicated by the facts throughout the book. Most interesting is the picture of commercial banks in the Third World, begging to make a loan, so that they can collect interest, and then having multi- lateral agencies like the World Bank clean up after them. According to Lenin, the capitalist system develops into finance capitalism and the finance capitalists must find some outlet for their surplus capital. It turns out that the World Bank annual meeting is a great chance for commercial bankers to meet Third World clients.(pp. 136-7) Observing one such meeting gives the reader the sense that Lenin had about what imperialists with surplus capital lying around have to do.

Even the World Bank itself feels pressure to release capital to the Third World, and its top leaders have adopted a sham planning system to reach their goals of loans made. Seeing this, the far right has labelled the World Bank a socialist plot. Caufield caters to this militia-type rightist throughout the book.

In reality, the World Bank is not just an "adjustor" for Third World economies: it is a central actor in rationalizing the flow of capital from the industrial countries (imperialist) to the Third World. According to one Kidder Peabody executive, the World Bank "earned its keep" during crises of the private sector.(p. 143)

While some right-wing militia types may not like being involved in multi-nation organizations like the World Bank, the truth is that Amerikan corporations are even more involved abroad than the World Bank and they are the ones requiring the World Bank to go on. In this way, taxpayers of the imperialist country middle-classes subsidize the failures of the bankers. After all in 1977, the top nine U.$. banks received more than half their profits from loans to the Third World.(p. 128) Moreover, "By 1982 Citibank's loans to just five of its Latin American clients amounted to twice its net corporate assets."(p. 129) On account of these profits sometimes the private bankers complain about the World Bank's stealing business, but on the other hand, the World Bank is bailing out the commercial banks and spurring economic infrastructure projects that the commercial banks would be afraid to undertake. Nor is it just U.$. capital at stake. The Bank of Tokyo has the equivalent of 80 percent of its net assets at stake in Mexico. (p. 138) From the point of view of these banks, the World Bank may be a failure, but not relatively speaking. The bankers themselves know what it is like to have to find large profitable outlets for their capital or accept losses, and they cannot think of any better way to do what the World Bank does within the existing system. If the World Bank is eventually replaced, it will be by an institution that is very similar.

The World Bank is also a means of outlet for the overproduction of capital goods in the imperialist countries: "Most of our money doesn't go to the South, it goes straight from Washington to Pennsylvania, where they manufacture the turbines, or Frankfurt, where they produce the dredging equipment."(p. 242) For this reason, the World Bank has its patrons in the super-elite.

Despite all the efforts of the bankers both multi- lateral and private, the capitalists fail to export away their crisis. "In 1994, for example, the developing world received $167.8 billion in foreign loans and paid out $169.5 billion in debt service - - a net transfer from the poor to the rich nations of $1.7 billion."(p. 335) This is a small token of the imperialists' worst nightmare -- surplus capital lying around with no profitable place to invest it. This sort of mechanism is typical of why imperialism is always in crisis.

Adjustment Failure

Caufield has the facts showing that World Bank economic policies imposed on Third World countries do not work. So-called adjustment loans have failed. Such loans go to countries willing to change their economic policies to the likings of the World Bank.

In Mexico where the money has been dumped by the international banking community, economic growth is only keeping pace with population growth. Thus Mexico has stabilized for now to the likings of the banking community, but it has not accomplished anything worthwhile to the proletariat by following the imperialist-dictated course: "In 1992, average wages were - in real term - half what they had been ten years earlier. . . Investment in health, education, and basic physical infrastructure was cut roughly in half, with predictable results. Between 1980 and 1992, infant deaths due to malnutrition almost tripled."(p. 153) The poorest 20 percent of Mexico receives less than 5 percent of the income. "The country's richest man, Carlos Sim, had more money than the country's 17 million poorest people combined."(p. 153)

In conclusion, we do not agree that hiring more staff at the World Bank or increasing the number of ecologists there is going to help the systematic problems underlying the World Bank. It should be abolished like many other imperialist entities that block the initiatives of the toiling classes for their own economic well-being.

(from MIM Notes 146, Sep. 15, 1997)

Buy This Book

Myths of Rich and Poor: Why We're Better Off Than We Think
by W. Michael Cox and Richard Alm
(New York: Basic Books, 1999), 256pp.

W. Michael Cox is a Vice President at the Federal Reserve Bank in Dallas and Richard Alm is a Dallas journalist. Together they have written a book praised by libertarian organizations on why the U.$. people are better off than they think.

Social-democratic mainstream

Cox and Alm level their attack on the New York Times and other newspapers in particular which reported anecdotal evidence that economic times are hard, that people have gone from good jobs to hamburger-flipping jobs. Not surprisingly, the authors review the evidence that MIM has already published in the Spring of 1992 in MIM Theory #1.

The New York Times, social-democrats and unconscious social-democrats including most calling themselves Marxist harp on the factoid of falling U.$. wages since 1973 when inflation is accounted for.(p. 5) As MIM long ago pointed out, that particular factoid leaves out benefits. Total compensation per worker has always increased in the United $tates, and at an astonishing rate.

The notion that the country is becoming a people of hamburger-flippers is also wrong. Almost 70% of fast-food workers are teenagers (p. 147) as MIM has pointed out before. We may even hope that teenage boys are doing more cooking and middle-aged wimmin less thanks to the popularity of fast-food.

MIM also agrees with the fact evident for anyone to see that there is class mobility within the United $tates. We see it to such an extent that MIM does not believe it is possible to speak of a white proletariat. Before they know it, people who would be white proletariat find themselves in the middle-classes or if they do not find themselves as such, they know many people from their milieu that have "gotten ahead." Thus, no class identity can form. Almost 30% of the people in the bottom fifth find themselves in the top fifth within 16 years based on a study covering 1975 to 1991.(p. 73) Less than 20% of the bottom fifth stays in the bottom two-fifths of income. The reason for this is that the bottom fifth contains a large portion of youth and immigrants who will "make it" with time. People who fall into the bottom fifth are largely retirees.

As MIM noted in a 1998 Congress resolution, even most of the internal semi-colonies are petty-bourgeoisie. The bottom fifth has a higher chance of generating oppressed nation consciousness, but it is not based on the status of individuals. It has more to do with the possibility of looking around and gathering national consciousness. Less than 1% of people in the bottom fifth stayed in that bottom fifth every year between 1975 and 1991.(p. 74) Such a miniscule pocket of people less than 0.2% of the population cannot form a class. It is too isolated and influenced by other groups. It is unfortunate that among those calling themselves "Marxists," only MIM is not perpetuating massive delusions on this score.

Getting physical

Unlike social-democrats who fight for principles no longer environmentally sustainable and unlike economists who likewise get caught up in abstractions unconnected to us down here on earth, Cox and Alm take the trouble to talk about physical reality. By doing so, they unconsciously go back to the last major economist to talk about the physical world--Karl Marx. Marx attacked as "commodity fetishism" those who followed non-physical (currency-denominated) statistics in their own right.

For example, the average persyn in 1970 had 478 square feet of house space. In the mid-1990s the figure was 814. Color TV went from 34% ownership to 97.9% ownership.(p. 7) Going to college went from 25.4% of high school graduates in 1970 to 60% in 1996.(p. 56)

In 1971, 31.8% of all households had air-conditioners. In 1994, 49.6% of households below the poverty-line had air-conditioners.(pp. 14-5) The poor also do better than 1971 U.S. households in clothes dryers, dishwashers, refrigerators, stoves, microwaves, VCRs and Personal Computers. That is not comparing the poor of now with the poor of the past. We are comparing the poor of now with all households of 1971 and the poor of now are better off.

There are countless facts like these and they prove that the standard of living is getting better, sometimes for reasons of purely technological progress--which MIM points out is paid for by the cheap food and manufactured goods produced by the Third World. Cox and Alm show that a food basket containing three pounds of tomatoes, one dozen eggs, five pounds of sugar, one pound of bacon, one dozen oranges, one pound of coffee, a half gallon of milk, one pound of ground beef, one pound of lettuce, one pound of beans, one pound of bread and one pound of onions costs less as time goes on. Between 1970 and 1997, the real price of that bread basket fell so that it took 26% less of the workers' time to buy that food basket.(pp. 40-1) To get at this calculation, the authors used the wages of manufacturing production workers who are not supervisors.(pp. 215-6) That is exactly the question Marx was also interested in. Wages did not shrink relative to the food necessary to reproduce workers. Wages increased, not through arduous unionization and class struggle within the United $tates, but by class struggle against the rest of the world, the Third World in particular.

Scientific responsibility

There are numerous lying, wishful and half-assed "leftists" who are determined to drive Marxism to an early death with their sentimental drivel. In contrast, we at MIM believe it is necessary to accept the truth, no matter who presents it or how it is arrived at.

Even these two bourgeois mouthpieces Cox and Alm have a greater grip on economic reality than most "leftists" and economists, so we feel obliged to agree with almost all their main points and wish them success in destroying social-democracy. The twelve points summarizing the book (pp. 195-6) are basically all true of the United $tates in isolation from the majority of the world's population suffering under capitalism and contributing to U.$. wealth. In the United $tates, the standard of living has risen the last 25 years; the poor are getting richer and life is easier in the material sense. So-called Marxists who fail to recognize this only prove to the people their disconnection from reality. They deserve not the slightest trust. The bourgeoisie and proletariat are engaged in a global war and accuracy counts in war. It means the difference between more or fewer casualties.

For those who equate Marxism with what Lenin derided as "economism," Cox and Alm have delivered a death blow. Amerikans achieve advances in the workplace, including flexible hours and reduced hours -- without even organizing more labor unions to do so. People who organize for such economic reforms are absolutely no threat to the system. They find themselves lying and exaggerating in order to make themselves seem of some use with their social-democratic politics.

Capitalism as a lifestyle of imperialism

For Cox and Alm, capitalism is clearly just a lifestyle of ever better technological gizmos and higher income. Whether such a successful system leads to war or environmental catastrophe does not enter in any meaningful way into their thinking. The limited insight they provide into the conditions of Amerikan capitalism cannot be denied.

Here is their whole sentence on the environment: "Environmentalists warn of global warning, deforestation, hazardous-waste dumping, and the loss of endangered speices."(p. 201) Now if only our phony communists and social-democrats would abandon the field so gracefully! Cox and Alm know enough not to say things about what they don't know about or don't care about. Could there be a connection between the profit-system and environmental devastation that would be undercut by the dictatorship of the proletariat? Cox and Alm don't provide answers.

Nor do they provide any answers about militarism. The causation of war is not something they attempt to address. MIM asks why the Amerikan chauvinist "leftists" have to contest Cox and Alm on their own terrain of living standards in an imperialist country when they have conceded us the field on the environment and war. Cox and Alm have left themselves open for target practice by making concessions on the last page of their book: "We shouldn't let a few aspects of life overshadow two decades -- no, two centuries -- of progress in our living standards."(p. 202) Starvation, war and ecological catastrophe be damned! We have garage-door openers now! (We should have TWO garage-door openers the social-democratic and phony Marxist morons chime in oh-so "critically.")

The one claim that Cox and Alm make that they should not make is about the rest of the world outside the United $tates. They have no comparative evidence for the Third World and no sense of comparative history enough to say "Why has it paid off so handsomely for the United States? Because U.S. citizens have been working hard within an economic system that gives individuals free reign to reap the rewards of their efforts, imaginations, talents, and good fortune."(p. 187)

MIM does not deny the wealth of the United $tates. It only denies the sources and associated costs of obtaining that wealth are as the bourgeois mouthpieces say. U.$. wealth is great because of the super-exploitation of the Third World and the U.$. system is unsustainable environmentally and creates additional impetus to war. That is more than reason enough for socialism.

Buy This Book

Buy This Book

Profit Over People: Neoliberalism and Global Order
by Noam Chomsky
(NY: Seven Stories Press, 1999), 175 pp. pb.
reviewed by MC5, September 10, 1999

MIM finds this book to be mildly useful to the cause of the international proletariat. Noam Chomsky is a noted "socialist libertarian" or "anarchist" who manages to pack the halls at many speaking engagements in the United $tates.

The role of leadership

Noam Chomsky's example brings up starkly the question of leadership. He is known much more as an individual leader than as a member of a particular organization, though he has been at least at times, a member of the Democratic Socialists of America (DSA) -- reformists working in the Democratic Party.

As a tenured professor at MIT (Massachusetts Institute of Technology) and a major thinker in linguistics, many consider Chomsky the leading intellectual of the United $tates alive today. In many ways, his model of individual success extends right into political work where he spends much time criticizing Liberalism and neo-Liberalism.

We do not wish to take away from Chomsky in the least in his work as "a critic of U.S. foreign policy" as respectable bourgeois circles would say. At his public speeches, he always comes prepared with an encyclopedia-like command of details that skewer the hypocrisy of U.$. imperialism. Maybe more than anyone else, he has been able to lay bare for the people the truth about U.$. foreign policy. He cuts through illusions and presents the raw interests involved. Another small book recently published called "What Uncle Sam Really Wants" is a typical example of Chomsky at his sharpest -- exposing U.S. interventions, military aid and CIA ("intelligence") subversion work in the Third World; although William Blum's book titled "The CIA: A Forgotten History" would be a better start.

We only wish that a variety of intellectuals and journalists would start from Chomsky's true knowledge of U.$. history as their starting point and stop writing various fairy tales in politics and economics about a non-coercive and democratic U.$. influence in the world. A most recent example would be Chomsky's role since the late 1970s in exposing the truth about East Timor. To this date, the New York Times does not ever connect U.$. military aid to Indonesia with the genocide committed in East Timor historically. Only now does it write stories about the United $tates' having to cut off aid to Indonesia if Indonesia does not restore order in East Timor and allow it to move toward nationhood -- without noting the historical blame the United $tates has to bear. For that matter, this approach of talking only of the united snakes cutting aid to stop the genocide gives u.$. actions the air of rectitude -- of being the motive force behind the end of genocide.

Still it is worth pointing out how Amerikans prefer to hear individual leaders than to be their own leaders and work in coordinated ways. Chomsky is proof of the need for leaders in political work, not proof of the underlying assumption of anarchism. Many intellectual radicals tremendously enjoy listening to and reading Chomsky and discussing his work. By his very example they engage in no political work themselves, preferring the activity of discussing the world to the difficult work of changing it. We must produce change from the humyn materials at hand as Lenin explained in a corollary of materialism, and at hand are people like Chomsky with considerable advantages in being able to contribute to the struggle.

Weak points in Chomsky

We can point to three main weak points for Chomsky. 1) Political economy. He utilizes no thoroughgoing system of thought in his economic analysis, despite the fact that he has at least tangential awareness of Marxism. 2) Marxism and socialist society or the dictatorship of the proletariat. 3) Nihilism.

While not naive, Chomsky is a moralist. He skewers and skewers U.$. imperialism for hypocrisy, especially with regard to its claims to "democracy" and "liberty." It is obviously a great strain for him to write without sarcasm -- such is his correct disdain for U.$. imperialism. Criticizing and criticizing, Chomsky does have a strain of nihilism, the attitude that "everything sucks" and the lack of a scientific determination of how to progress. Such an approach of criticizing all the time not balanced with upholding a victorious strategy connected to real world forces is what we call "idealism."

Thus, Chomsky tends to leave his analysis at the political and ideological level and make mistakes at the economic level. Such is the case in this book where he points to various inter-imperialist trade agreements such as the GATT, NAFTA and MAI as if they were new threats to "democracy" and not more of the same old unaccountable capitalism.

The introduction to the book by Robert McChesney points out that "one-quarter of one percent of Americans make 80 percent of all individual political contributions and corporations outspend labor by a margin of 10-1."(p. 10-1) Aware of such facts, McChesney and Chomsky still do not conclude in a Marxist way about what is happening. Chomsky dances away from Marxism as a theory of leadership of the proletarian class and never demonstrates a thorough understanding of it. Marxism addresses capitalism as a system of labor extraction from the proletariat by the bourgeoisie. In no more complicated terms, MIM organizes for the end of capitalism because we wish to reorganize the flow of labor: from the proletariat to the proletariat. Failing to address this basic mechanism of the economic substructure, Chomsky has no guide for activism.

MIM predecessors were among the first to distribute Chomsky's work on East Timor, but we concluded other than Chomsky did. The massacres in East Timor are only a continuation of a long historical line of slaughters by the exploiters. Unfortunately, intellectuals like Chomsky share some blame for how the struggle there chose to go in a pacifist direction and leave the people open for slaughter at an obvious time such as after a referendum on affiliation with Indonesia which Indonesia lost and East Timor nationhood won. The historical knowledge that classes do not surrender their power voluntarily is lacking or in the case of Chomsky -- downplayed.

It is impossible to maintain "libertarian" and "anarchist" ideas once one recognizes that groups of people do not surrender their oppressive status voluntarily. Once one recognizes that groups of the oppressed must defend their "rights" to survive by force, anarchism and libertarianism become impossible, except as moralistic pipe-dreams. Something as elementary as abolishing slavery required organized force by groups of people.

As a result of his moralistic stance, Chomsky constantly criticizes his targets for "Stalinism," by which he simply means use of repressive violence or repression of thought in any context. He does not distinguish between the violence of the oppressed seeking to defeat Hitler and the violence of the U.$. state imprisoning Blacks in peace-time. Such moralism like any other moralism can never instruct us on how to overthrow oppression. No idea that fails to address causation can bring a solution. The Quakers, Buddhists, Kantians, admirers of John Rawls and people like Chomsky fail to face this truth courageously and thereby hold back humyn progress.

It is the unwillingness to face causation and the nature of classes and nations that makes Chomsky and others speak of NAFTA, GATT and the MAI as if they were new things without histories and without being part of the puzzle of imperialism. They would rather defend illusions of existing freedom and democracy than admit that imperialism was already unaccountable before NAFTA, GATT and MAI.

According to Chomsky, fascists and communists alike are at fault for thinking of groups -- "collectivist legal entities" -- where "organic entities have rights over and above those of persons."(p. 52) In this complaint we see most clearly how anarchists seek principally to avoid responsibility for combatting oppression. Yes, professor Chomsky, we knew from the history of nations and classes that the East Timor vote was a danger. We did not have to know the persyns. Yes, and without knowing the persyns slaughtered and piled up in the jail cells in East Timor, we speak in a general way against the repression by the oppressors and exploiters. How we wish a "collectivist legal entity" were in place backed by force in East Timor, and if need be, repressing perpetual complainers.

Amnesty International also feels that it has to document each case one-at-a-time, MIM is quite prepared to defend the "rights" of groups of people we have never seen against the "rights" of exploiters and oppressors. It is not Bill Clinton or even Ronald Reagan who oppressed the East Timor people, but a whole system and group of people. The circumstances leading to the creation of this group of people exploiting and repressing the East Timorese and over a hundred other peoples in the world are what we communists aim at. Yes, we know that without meeting anyone we want a "collectivist entity" to uphold the "rights" to food, clothing and shelter by force against those who resist. We are only sorry that you lack the intellectual courage or anti-idealist training to walk yourself out of the absurd set of individualist thoughts that constitute your moralism.

In response to questions about nihilism, Chomsky has started taking up "realism" and detailed responses to the U.$. foreign policy establishment. He noted the possibility of humanitarian missions by the U.S. military forces, as in Kosovo. He is also willing to side with authoritarian states against U.$. neo-liberalism by arguing (correctly, factually speaking) that the fastest economic growth has not been achieved by free marketeering. This is a turn in Chomsky work that we do not approve. As we have noted elsewhere, people who start in moralism often end in mud.

Indeed, Chomsky has accepted wholesale that the success of the "Four Tigers" in East Asia is on account of Japanese imperialism's relatively benevolent nature,(p. 29) as argued by Bruce Cummings. Since Japan used the state extensively in its development, Chomsky is taking a stab at the dogmas of the economic Liberals and neo-liberals. In contrast, MIM has already explained the "Four Tiger" exceptions to capitalist underdevelopment of the Third World in MIM Theory #4. Economic history is not Chomsky's strong point. He simply tailors his points to skewer neo-liberalism without regard to a thorough answer to cause and effect in development.

Chomsky teaches that the imperialists evade their own "free trade" principles when it suits them, and he knows that "The 1996 'Global Report' of the UN Industrial Development Organization estimates that the disparity between the richest and poorest 20 percent of the world population increased by over 50 percent from 1960 to 1989, and predicts 'growing world inequality resulting from the globalization process.'"(p. 112) Yet, Chomsky does not answer what caused the inequality up to this point, as if globalization were some entirely new thing and not the latest ideological buzzword of imperialism, a system that has been stripping the Third World of its labor and resources for over 100 years.

Buy This Book

Bourgeois internationalist split revealed in "Depression Economics"

The Return of Depression Economics
by Paul Krugman
(New York: W.W. Norton & Co., 1999), 176pp. reviewed by MC5

Influential economics professor and government consultant Paul Krugman has rushed to publish a book updating the situation of the economic crisis in Asia. Extolled by Fortune Magazine, the Boston Globe and Newsweek, Krugman is someone to read to know what the ruling class economists are thinking. There is nothing otherwise remarkable about this book.

The title will help to sell books, but Krugman does not predict immediate and dire depression for the United $tates or European economies. He calls the current situation in Asia the "Great Recession."(p. xi) "Over the course of the last two years seven economies -- economies that still produce about a quarter of the world's output and that are home to two-thirds of a billion people -- have experienced an economic slump that bears an eerie resemblance to the Great Depression. Now as then, the crisis has struck out of a clear blue sky, with most pundits predicting a continuing boom even as the slump gathered momentum; now as then the conventional economic medicine has proved ineffective, perhaps even counterproductive."(pp. vii-viii)

The book actually turns into a discussion of economic development internationally. We shall have to agree with Krugman that it ends in "amateur sociology," because it simply does not take up the issues exhaustively. He claims that 1977 to 1997 were years of "unmistakable improvement in the lives of ordinary people,"(p. 17) but he provides no systematic evidence. On this point, we prefer the MIT Business School Dean Lester Thurow to the MIT professor Krugman. Thurow has demonstrated a more thorough statistical and historical sense of the failure of capitalism for most of the world's countries as MIM has reviewed elsewhere.

Overproduction and economic dislocation

The conclusion Krugman draws to justify the title of the book is that "for the first time in two generations, failures on the demand side of the economy -- insufficient private spending to make use of the available productive capacity -- have become the clear and present limitation on prosperity for a large part of the world."(p. 155)

Recent reports from China add vindication for Krugman's thesis. China is currently experiencing deflation -- falling prices -- resulting from classic capitalist overproduction. Chinese rulers are trying to encourage spending over saving by promising guaranteed income for the poor. The thought is that if people feel secure in the event of retirement or economic crisis, they will spend more.

For Japan, Krugman advises the government to create inflation so that consumers know they cannot save their money. He says that is the only way out of Japan's "liquidity crisis," which is as bad as anything in world history. The "liquidity crisis" right now means that in Japan it is possible to borrow money at 0% interest and still no one does so to undertake successful expansion of business.

From MIM's point of view, these are not the most interesting aspects of the book. Although it is interesting to note the splits in the imperialist ruling class and resistance to Keynesian thinking,(1) what Krugman says on this score is not all that surprising. Krugman finds it interesting because "I continue to be astonished at how few economists around the world have realized just how important a problem Japan's trap is both as a practical matter and as a challenge to our economic doctrines."(p. 77)

Let us complete this thought for Krugman. The reason the press and respectable government officials howl at Krugman is that inflation with a 0% interest rate is a negative interest rate. That means owners of capital are giving their capital away. As MIM has explained before, such conditions eliminate the rationale for capitalism. Krugman tells a metaphorical story in which the loss of capital is temporary, but it is understandable that the capitalists don't want to hear about it even temporarily.

The Keynesian "liquidity trap" is especially bad for capitalists, because the answer of cracking down on worker wages to raise profits and interest rates only worsens the "effective demand" problem according to Keynesian theory. The way the United $tates has gotten out of such traps in the past is by destroying some of its capital and people in war. Environmental devastation will do equally well within the logic of the capitalist system.

Comments on Mao

Interestingly enough, Krugman starts the book with comments on Mao. As MIM does, Krugman concludes that the steam went out of our movement with the defeat of the Cultural Revolution in China. Next the Soviet Union collapsed.(p. 3) Also like MIM, he notes that certain trends for armed struggle in Europe relied on Soviet aid(p. 5) -- even while making vague noises for Mao without supporting the idea of the Cultural Revolution. Similar such tendencies arose here in the United $tates with certain descendants of the Weather Underground that gave up criticizing the Soviet Union while still claiming independence from it. Unfortunately, some claiming inspiration from the comrades in Peru following the great Maoist leader Comrade Gonazalo are busy chasing after the remnants of this movement and they know not what they are tailing.

Krugman's point is that we communists are dead and that has changed the economic situation in the world, with more investors willing to invest in the Third World than ever -- without fear of expropriation. In contrast, MIM points to Mao on development questions because only those countries that uprooted semi-feudalism through harsh class struggle managed to get on the positive economic growth path. That is why Indonesia and Thailand recently collapsed and could not sustain the momentum that imperialist speculators had created in those two countries. MIM explained the success of the "Four Tigers" -- exceptional successes in neo-colonial Asia -- in 1993.(2)

Like some of the most superficial and ahistorical sociologists, Krugman believes the idea that the "Confucian ethic" explains why Taiwan, Korea, China etc. are experiencing economic growth. Confucius was a teacher around 500 B.C. who founded a secular religion. His influence existed for thousands of years, so the obvious question was why Confucianism did not bring economic growth much earlier. To avoid Marxist explanations of economic development, Krugman and others prefer to muse about Confucianism as the cause of change in East Asia today.(p. 36)

The bourgeois mouthpieces come up with mini-theories the way some people eat potato-chips to avoid the simple truth that Japan, Taiwan, Korea and China all crushed their landlord classes and were therefore able to develop as capitalist economies while other countries continue to stifle under semi-feudalism backed with U.$. military aid. At least Krugman is still admitting that Stalin's economy was the fastest growing one in the world up to the immediate aftermath of World War Two. He says Japan became the first to surpass it in the 1953 to 1973 period(p. 61) -- a period MIM will point out came directly after the U.S. Army imposed land reform in Japan.

The role of speculators

Bourgeois economics has become a branch of psychology and Krugman provides the proof. (See for example how NAFTA was purely psychological and merely reflected what was already happening.(p. 44))

MIM has previously reported on a very significant split in the bourgeois internationalist camp between those grouped around the International Monetary Fund (IMF) and those grouped around the World Bank. Jeffrey Sachs and Krugman line up against the IMF. However, Krugman explains the rationale that the IMF has for its line of approach.

All over the world, the IMF demands austerity policies of countries on the brink or in the midst of total economic collapse. Asking for and obtaining 50% interest rates, higher taxes and lower social spending is the norm in order for the IMF to loan out money to desperately poor countries. Most of these countries need a massive boost in "effective demand" as the Keynesians say. But instead of following the prescriptions of Arjun Makhijani, reviewed by MIM in MIM Theory and in our bookstore,(3) the IMF makes a bad situation worse in country after country.

Significantly, the academic economists have finally figured out why the IMF does this. The role of the IMF is essentially psychological. There may be no good economic reason to impose austerity and raise interest rates in a crisis-ridden country, but the IMF demands it anyway to appease speculators. Investor perception matters more than economic reality.

While the notion of "contagion" has become disrespected in bourgeois sociology, Krugman uses it to refer to speculator behavior. The reason the East Asian economies fell like dominoes is that international investors viewed all East Asian countries as in the same boat, regardless of the facts.(p. 97)

Without using the word "racism," Krugman admits that there is a double-standard. Speaking of the U.S. Treasury (which emerges as "good guys") and the IMF, Krugman says, "why did these extremely clever men advocate policies for emerging market economies that would have been regarded as completely perverse if applied at home? . . . The short answer is 'fear of speculators.'"(p. 104) If there is a double-standard in the thinking of capital investors, then there is a double-standard in capitalist reality.

According to Krugman, "Thus it is possible in principle that a loss of confidence in a country can produce an economic crisis that justifies that loss of confidence -- that countries may be vulnerable to what economists call 'self-fulfilling speculative attacks.' And while many economists used to be skeptical about the importance of such self-fulfilling crises, the experience of the 1990s in Latin America and Asia has settled those doubts, at least as a practical matter."(p. 110)

What the IMF has done is "an exercise in amateur psychology, in which the IMF and the Treasury Department tried to persuade countries to do things they hoped would be perceived by the market as favorable."(pp. 113-4) For Krugman to say this in public is a little like pulling the curtain on the Wizard of Oz. It too can have effects on speculative action and perhaps make the bluffing job of the IMF and treasuries everywhere more difficult. If he is right, Krugman is showing a slight lack of bourgeois discipline by crowing about it.

The role of speculators' perceptions is the revenge of reality on bourgeois economics referred to as "neoclassical theory" in the Ivory Tower. Over a hundred years ago, these bourgeois economists abandoned physical theories of economics and took up subjectivist ones based in such phoniness as "marginal utility." Now they wonder why they have to pander to speculators' inconsistent mentalities to make the economy or at least their perceptions of the economy work. Yet books like ITAL Against the Gods END have already argued that it is not possible to know scientifically anything that goes into market decisions. People have too many inner mental contradictions as psychologists and market researchers have already revealed.

Krugman himself ends up being for capital controls -- meaning restrictions on the movement of capital across borders. He defended Malaysia's actions to cut off speculators. Describing how capital sometimes needs to be "grounded" the way a parent disciplines a child, Krugman says "it would be safe for each investor if he were sure that other investors were not about to take flight. But investors mistrusted ITAL each other END -- and the crisis came."(p. 164) Communists have known since Marx that such individualist mistrust is built into the capitalist system. This is why we refer to an anarchy of capitalist production -- because private investment and production leave economic policy to the realm of individualist choice.

Krugman himself is for growth and full employment, but speculators can make money whether the economy is growing or not as Krugman proves. In fact, the most famous speculation in history was by Soros against the British Pound. He made money when the British currency went down. The aspirations of workers, the petty bourgeoisie and even the aspiring nouveaux riche center on economic growth, but speculators don't care. One speculator's loss is another's gain. A broke speculator has no power; once s/he realizes the nature of the system and is angered by it, s/he is no longer powerful enough to do anything about it.

At the moment, the left-leaning faction of bourgeois internationalists has the IMF faction of bourgeois internationalists back on its heels. The IMF is also getting criticism from the far right. Roughly-speaking, the way Krugman paints it this is a conflict between New Money and Old Money. Old Money leads a purely hereditary and paper existence while New Money arises in the process of economic growth. Old Money believes economic crises are caused by "bad loans" that require more self-discipline or regulation. Old Money will abide by government regulation if taxpayers pay for Old Money's mistakes in making bad loans. New Money cannot dispense with Old Money, because the two both agree that merely owning things should be rewarded with profits or interest income.

Notes:
1. John Maynard Keynes was the British economist who became famous during the Great Depression of the 1930s for advising government intervention to save capitalism from itself.
2. MIM Theory 4: A Spiral Trajectory, The Failure and Success of Communist Development, pp. 76-9. (Available from MIM for $6.)
3. http://www.prisoncensorship.info/archive/etext/bookstore/

Buy This Book
Back to top of this page

Samir Amin is the director of the Third World Forum in Dakar, Senegal. Trained as an economist, his work is relatively close to Maoist political economy compared with other academicians. This particular book is a collection of theoretical observations that would be difficult to understand outside the ivory tower. We canıt recommend it across-the-board, even though we agree with most of it.

The irony of this book is that if Samir Amin had been in an Amerikan university, he would have been seen as another token, just another voice of relative truth. Here in this book we have Samir Amin rejecting tokenism and the philosophical underpinnings of it called post-modernism. Oh horror of horrors when the would- be tokens reject anti-scientific philosophies of thought.

Postmodernism

As might be expected with an author with which we have a relatively high degree of unity, we fully agree with Samir Aminıs attacks on current intellectual fashions including postmodernism and neo-liberalism. In fact, we take the title of the book to refer to the way postmodernism leads to neo-liberalism. If all the existing nationalities, sexual orientations and genders etc. tolerated each other what would we have? Capitalism still.

"Postmodernism is a wayward conceit expressing disconcertedness at foresight, will, and consequential action, which is distinguished by distrust for systematic thought, in the place of which it puts what Gianni Vattimo aptly terms 'flaccid thought', ready to accept anything since all theories are equally [in]valid and nothing is objectively true." (p. 113)

Postmodernism is the intellectual equivalent of MTV. We agree with Amin that imperialismıs academy has done some things with postmodernism that it would not have otherwise done, but on the whole the result is still just a reflection of the crisis capitalism puts academic research in.

Underdetermination

Something we like about this book is the idea of "underdetermination." We find it a nice contrast to "overdetermination." Readers who have read MT will recall that overdetermination is most known in its popular form that "it's all one system" and more importantly therefore, "it doesn't matter which oppression is principal." Some alleged Marxists mean for this concept to be an olive branch to pseudo-feminism in particular.

In contrast, Samir Amin puts forward the idea that the various social logics of class, nation, gender etc. result in "underdetermination." This means there is a role for struggle to tip the balance in some situations while some logics become subordinate to others. (pp. 49-56)

Economics

The economic theory aspects of this book would be especially rare in public discussion. Suffice it to say that we agree with Amin on many points as usual:

1) Capitalism did overcome its alleged "general crisis" after World War II, (p. 25) which is not to say that capitalism benefited the majority of people. There is no denying capitalismıs economic growth, only its distribution and usefulness to the people and side-effects.

2) "The law of value governing really existing capitalism (globalized capitalism) is not the law of value as deduced from the capitalist mode of production considered in abstraction, but is what I term the globalized law of value. This latter form brings about a systematic distortion by virtue of the fact that workers in the peripheral countries are paid at a lower rate than equally productive workers in the metropolitan centers. The global price system, which constitutes the reference point for rational capitalist economic calculation, is thus the result of a double transformation of value."(pp. 77)

3) Some of the current criticism of "globalization" and "neo- liberalism" is in fact reformist Liberalism of another kind. Indeed, Samir Amin disagrees with the people talking about "globalization" as bringing about a leveling that turns the United $tates into another Brazil.(p. 88) Discussion of "globalization" is something that David Duke, Pat Buchanan, Ross Perot and others like them agree with. It is no substitute for talking about capitalism and imperialism.

What is new in what Samir Amin is saying is a new set of principal contradictions that he believes we should talk about 1) the environment 2) economic alienation 3) class polarization globally.

Without saying so, we also believe Samir Amin is starting to cast doubt on the labor theory of value. Like Huey Newton in his later years, Samir Amin is talking about "citizenship" rights or rights to distribution regardless of work.(p. 89)

Buy This Book

reviewed by MC5

David Landes is a retired Harvard professor aiming squarely at an issue we Maoists see underlying what we call the "principal contradiction" between oppressor nations and oppressed nations. He claims to examine the last 1000 years of history and finds that Europe is the main contributor to economic and technological progress, modernity.

Review of reviews

MIM's glee over the publication of this book is also connected to all the ivory tower leading lights willing to go down with Landes' imperialist chauvinist sinking ship. As Reason Magazine's contributing editor Deirdre McCloskey practically admitted in a review of the Landesí book, the field of economic history is dominated by Marxism even in the ivory tower. Rarely do we find anything that the bourgeois economists (and Landes claims to be one) will hoist as their banner and be accountable for.

In the case of this book, we have Nobel Prize winners Robert Solow and Kenneth Arrow in addition to John K. Galbraith lined up to champion Landes' book. In addition we have the New York Times, Wall Street Journal and Los Angeles Times singing the praises of Landes. As such, the book is irresistible target practice for us Maoist scientists.

Generally, Landes received favorable but lightweight reviews. We will add a few remaining points of agreement with these reviewers. Landes indeed has launched a very lucid attack on post-modernism and Marxism. Partaking in frequent sentence fragments, Landes clearly indicates a willingness to pay the price for clarity. We agree with him and his reviewers who pointed this out.

However, we find it regrettable the Kirkus Review could only say the book borders on the chauvinist. Landes has long been about as conscious an imperialist chauvinist as there can be.

Third World anecdotes, not systematic evidence

What Landes does say about Third World societies is either stereotypical or ad- hoc. It takes little analytical effort to say that Third World culture must be holding back industrial development, because the Third World is relatively underdeveloped compared with Europe and Amerika. Such becomes a circular argument when the details of Third World society are either unknown or not gathered up in systematic ways.

J. Bradford De Long points out that Landes talks about China being the most scientifically advanced in the earlier part of the millenium but fails to offer a convincing reason for why China lost its edge. Relying on the academic work of others, Landes puts forward that China's Confucian culture vested business and state power in one place and thwarted the efforts of a potential business class to innovate.

In contrast, Marxism does not attempt to explain development by timeless cultural arguments. Marxism refers to modes of production that change over time. We Marxists also do not feel compelled to justify European superiority on the basis of evidence that does not exist.

Landes and many others in the tradition of "cultural" explanations cannot explain why Confucian culture was the most advanced scientifically at one time, because Confucianism is a constant and China's global scientific leadership role has been a variable. Furthermore, since Landes believes that Taiwan, Hong Kong and southern Korea have "made it," he has no explanation there either. They should still be stifling under Confucian mores against profit.

Other reviewers gave Landes credit in the sense that we are "all postmodernists now." He admits that European civilization was inferior to Egyptian and Sumerian civilizations for thousands of years. The reason he gives is that Europeans didn't have the tools to handle Europe's dense forests (p. 19) and today many tropical countries still do not have the tools to deal with their environment. Landes does not tell us whether other societies were ahead in their forest- chopping technology, but he only asks to be accountable for the last 1000 years of history anyway.

Also in the everyone-is-post-modernist-now spirit, Landes trots out a story about a fabulously wealthy African king (p. 73-) without ever explaining the details of how this African king and his culture failed along the criteria that Landes say are necessary for development.

In the case of India, Landes tells us that Hindu religion saw no need to minimize the use of labor.(p. 227) He does not connect that to anything specific in the culture, so it is a fairly circular argument buttressed by ad-hoc arguments, such as that India had no screws.(p. 228) What is more he misses a chance to discuss diversity within Hinduism along the lines of his own concepts of "openness" and "tolerance" of discussion. Instead, what Landes does is explain the trivial with the trivial on an ad hoc basis.

He admits that when it comes to India and its relationship to British imperialism, he found published works lacking. "Almost no written documentation comes down to us from the Indian side."(p. 163) It seems to Landes that even Indian scholars base their books on Western documents.

While Landes bashes the post-modernists, he is simply the twin evil of post- modernism. Landes conducts poor science or pseudo-science in the name of not having to study or know much about Third World society. The post-modernists point to those like Landes and conclude (correctly) that we must study Third World society as part of "diversity." Yet on account of poor science by the likes of Landes, post-modernists reject all science.

Accelerating inequality

"The difference in income per head between the richest industrial nation, say Switzerland, and the poorest nonindustrial country, Mozambique, is about 400 to 1. Two hundred and fifty years ago, this gap between richest and poorest was perhaps 5 to 1, and the difference between Europe and, say, East or South Asia (China or India) was around 1.5 or 2 to 1."(p. xx)

Landes himself raises the fact of accelerating economic inequality, but none of his arguments address that acceleration. He contents himself with pointing out differences, differences that have been more or less constant and hence not useful to explain larger and larger gaps. In fact, the differences Landes notices have gotten smaller over time while the economic gap between imperialists and oppressed nations has gotten larger.

Readers can judge for themselves whether or not Landes' own criteria have become more true or less true in the time that acceleration of inequality took place:

"If I had to single out the critical, distinctively European sources of success, I would emphasize three considerations: (1) the growing autonomy of intellectual inquiry; (2) the development of unity in disunity in the form of a common implicitly adversarial method, that is, the creation of a language of proof recognized, used, and understood across national and cultural boundaries, and (3) the invention of invention, that is, the routinization of research and its diffusion." (p. 201)(italics removed)

In other words, Landes says Europe took up science and engineering and had the openness and freedom to do so. Science led to overall economic leadership, he says.

Readers need to ask themselves if it is not true that more of the world has been exposed to science and even the Anglo view of things than ever before. Yet just as Anglo "openness" and media and demonstrations of science and engineering reach more people more often in faster communication than ever before, the gap between rich and poor continues to widen.

Ironically, Landes does acknowledge the obvious facts of the situation. Science has made the rounds globally now. He derides those who believe China still needs to be cheer-led into science.(p. 349)

Even more telling is some evidence he presents from Africa in 1962: "Without significant exception, all African leaders . . . share the passionate desire to acquire all the good things which western civilization has produced in the two millennia of its history. They want especially to get the tehnological blessings of American civilization, and to do so as quickly as possible.(pp. 499-500) Despite this fact, Africa is where the most countries with negative income growth can be found. Once again, if it is true that scientific method and Anglo influence are global now more than ever, why is the gap between rich and poor expanding if Landes is right?

For us Marxists with the labor theory of value, it is not difficult at all to come up with a theory about an exponential growth rate in one group of countries and stagnation or regression in another group. Quite simply, the surplus-labor of one society contributes to the wealth of another. Even only a few percentage points of the total labor being appropriated from the Third World will explain European growth the same way a savings account grows exponentially in size over decades and centuries.

In addressing similar arguments from the "dependency" school of thought in Latin America, Landes said that even if foreign interference is the real reason for poverty, it would be better to "stow" the theories that were true and concentrate on self-improvement.(p. 328) On the last page of the book, he returns to this theme talking about the need for an optimistic and striving culture and not a pessimistic one.(p. 524)

To the extent that talking about imperialism is an excuse for whining, MIM has to agree with Landes. However, his remark on this in all italics shows an improper understanding of the importance of science. A bleak theory blaming foreign influence of imperialism, if it is true, means that development can only occur by destroying the link to imperialism. In other words, there are practical implications of "science" and they cannot just be "stowed." An accurate view of a problem is necessary before one solves it with the least waste of energy.

Social-democratic view of imperialism

In reply, Landes says that the imperialists already withdrew from the colonies. The reason they leave is that the cost of administration of colonialism became too expensive.(pp. 393,423)

Social-democrats have always differed with Lenin's theory of imperialism. According to the social- democrats, when imperialism becomes too costly, policy changes. Landes accepts that view.

From the Leninist view, the imperialists only withdraw when the cost to them is too great. The imperialists hardly care if the exploited or the oppressed bear the costs of empire. A war may be very expensive, but if the imperialists are not paying the taxes, then they see benefit in that war for colonial plunder.

It is also important to point out in this context that Lenin never said a system had to export capital steadily without crisis to be imperialist. If a society is characterized by export of capital but more capital flows back as accumulation from foreign investments, then that is exactly what we Leninists believe. Lenin's theory of imperialism is a theory of crisis. Certainly there is much capitalism that never reaches the multinational corporate stage, but once it does reach that stage, we Leninists never claimed it would be stable or successful.

Pre-capitalist militarism

Although Landes does discuss the genocide committed against indigenous peoples, he is untroubled by the possibility that militarism might have been the real reason some societies failed or ceased to exist while the Europeans went ahead. Perhaps development has not much to do with protecting private property and quite the contrary many societies more advanced perished on its account already.

The discussion of militarism by Landes is totally lacking. He is irked that some progressive historians treat European military superiority as an accident of history.(p. 89) He knows that all of European progress can be linked to the use of force against Third World peoples, so he goes to great lengths to show that Europe was already more advanced than the Third World and that is why it had military superiority.

His own story on the Chinese undercuts him. The Chinese invented gunpowder; yet they did not plunder the world with the invention. In fact, Landes implies the Chinese didn't really understand their invention and mystified themselves with war as if it "were a display of recipes."(p. 53)

This observation and many similar ones did not stop Landes from saying later that imperialism "is the expression of a deep human drive."(p. 63) A mere 12 pages later, he quoted Columbus on how the natives of North America did not covet property and "they know nothing of killing one another."(p. 75) So much for Landes's "deep human drive" idea.

Landes admits that the white man was baffled by the indigenous people and that contributed to genocide, but Landes seems unwilling to consider the possibility of peoples more restrained than Europeans and also perhaps less restrained in militarism and now gone forever.

On the other hand, Landes also never tallied up all the imperialist military aid from Anglo-Amerikan imperialism to pre-capitalist ruling cliques. Even mentioning the global military aid of U.$. imperialism to repression would have undercut the European tradition he wants to credit for economic progress. Thus, if openness is crucial to development as Landes said, then U.$.-backed military repression throughout the world is a perfect explanation for lack of Third World development.

No Soviet Union treatment

It appears that at least in the case of the Soviet Union, the more Western openness, the slower the economic growth. Economic growth was fantastic under Stalin and has steadily decelerated since his rule. The more capitalism the Soviet Union took up, the worse its economy became. Now in this last bit of Yelstin-era capitalism, the economy has shrunk 40 percent.

The success of Stalin and the failure of Yelstin is something Landes does not even attempt to address. What little he says treats the Soviet Union as one thing from 1917 to 1986.(p. 497) We Maoists say it went state-capitalist after Stalin died in 1953.

Points of unity with Landes

David Landes is an historian who attacks Marxism as "too simple." When he needs to use a little Marxism, he uses it, but in an explanation with several other chains of reasoning as well.David Landes rejects Marxism as too simple essentially because he rejects the discipline of science. That is why he is unable to sustain his own comparisons and analysis throughout the world and the book he wrote.

Thanks to his deliberate eclecticism ("Monocausal explanations will not work." (p. 517)), it is necessary to point out those snippets of work he did that we do agree with. Examples would include his admission of genocide by the white oppressor nation against the indigenous peoples of America and his admission that slavery also killed millions even just in the voyage over. This kind of thing that is impossible for the slightly-read historian to ignore anymore without looking dumb in front of the masses -- Landes is inclined to concede.One of his theses going along with Western Liberalism is that societies with religious restrictions fell behind economically. Landes's message is tolerance of Jews and Protestants. Islam and the Inquisition and other religious intolerance cut into business and technology. According to Landes, religious bigotry is such a problem that Portugal and Spain started out leading the quest for empire in the last several hundred years, but they lost on account of their reactionary religious views.(e.g., pp. 134-5)MIM agrees with Landes on this point. He serves as the memory of the bourgeoisie and we agree that capitalism is superior to pre-capitalist modes of production, so his pointing to pogroms holding back economic development -- we see this as a case of the superstructure holding back the mode of production. Historically the bourgeoisie is correct about its struggles against pre-capitalist societies in which religious authority was higher than business authority.

Landes did not discuss British intolerance of Catholicism. His book is solidly pro-Protestant and he admits to adhering to Max Weber's theses on the Protestant Ethic; (p. 177) although they have been disproved specifically with regard to Protestantism many times since Weber wrote his theses.

Overall amongst religions and cultures, the book is most favorable to the Jews, Anglo-American imperialism and Zionism as contributors to modernity. He notes correctly that the Catholic Church squelched the famous scientist Galileo 400 years ago and is only now getting around to rehabilitating him. (p. 181) For the Germans, he mentions their racial intolerance.(p. 467)

Thus, the typical bourgeois view includes tolerance -- gender, race and religious tolerance. Another important thing is "openness." Japan ordered its people not to travel in the 1600s.(p. 356) Ocean vessels have been put under restriction many times in history. Yet opposing immigration, emigration or foreign travels is just another way inquiry falls down and contention of views is diminished. According to Landes, and we believe he is correct in the transition from pre-capitalist to capitalist, lack of openness will lead to lack of development.Another area we agree with is Landes's attacks on post-modernism in defense of science: "One must reject the implication that outsideness disqualifies; that only Muslims can understand Islam, only blacks understand black history, only a woman understand women's studies, and so on. That way lies separateness and a dialogue of the deaf."(p. 417)

(from MIM Notes 178, Jan. 15, 1999)

Buy This Book

This book seeks to prove that there is enough food in the world to end world hunger, but political structures perpetuate mass starvation.

In a brief 149 pages, the authors bring potent facts to bear to support numerous theories of theirs (taken from others) that could fill several books. For example, Lappe cites a World Bank study to show that overpopulation results from the conditions of the poor. When the poor enjoy a secure life, they no longer have so many children. (p.27) Another example used to criticize export- led development is that Kenyan export income quadrupled between 1970 and 1980, but malnutrition increased. (p. 87) Also, Lappe and Collins make an interesting feminist observation that where women are central to the economy and enjoy reproductive rights, hunger is lower. As such, women oppose the trend towards the cash- crop economy in their own subsistence interests. (p. 90)

Ultimately though, the book does not deserve to be on the MIM literature list in this author's opinion because it has a worked out line on capitalism and socialism. The Lappe and Collins support a populist capitalism against landlord oligarchies. They do not oppose private property, but only want the peasants to be able to use the land as part of their right not to be hungry. They do not oppose market society, but they support income redistribution so that the world's half a billion starving people can eat. (p. 81,82)

They have praise for Nicaragua, Mondragon and China. They oside with the Eritreans. They criticize the struggle between the East and West blocs as detracting from efforts to end world hunger. Their line on the Soviet Union is that it is a "statist" society.

Lappe and Collins consciously oppose state intervention in the market except where necessary to save the market from statist revolution. They view "statism" as an "economic dogma" and they support civil liberties as necessary to ending world hunger.

If there is such a thing as progressive capitalist revolution against feudalism anymore, Lappe and Collins would be spokespeople for the ascendant capitalist class. On these grounds one could argue that the book deserves MIM's support as part of the two-stage revolution still required in parts of the Third World. Perhaps this review is only the beginning of a debate within MIM about the book. If so, cast this vote against distributing it. (From MN 30, May 29, 1987)

Buy This Book

With the largest petty-bourgeoisie in history worrying about its mutual funds, the time was right for a best-seller highly approved by bourgeois newspapers and economists on the question of risk. Not surprisingly, as a book written by an investment counselor, this is a story of heroes and geniuses--not the masses. Despite its basic bourgeois appeal, MIM considers this book mildly progressive as the best that bourgeois science has to offer in its attacks on religion and its dragging of the Western individualist into scientific subject areas that are necessary for the abandonment of individualism.

Bernstein takes us through history in search of the development of the idea of probability with a special focus on what is relevant to investors. We learn that the Hindus passed along the very concept of numbers we use today to the Arabs, who passed it along to the Europeans. Not until then were major advances possible in mathematics.

The history of probability that Bernstein narrates shows that it has become increasingly possible to talk scientifically about the effects of humyn actions in dollar amounts. For MIM this figuring is useful because it helps us argue to people that participating in revolutionary struggle is "worth it," and not just from a moral standpoint. Anti-militarist activism may have a very small chance of making nearly infinite gains for human productivity. Faced with this equation, even the Amerikan petty bourgeoisie should be able to relate to the politics of revolution as the risk-gain ratio is certainly more favorable to humanity than investing in retirement accounts.

Various European mathematicians developed the concept of probability, but not till this millenium, because the ancient Greeks apparently believed mostly in deductive reasoning and could not come to any conclusions about the gambling games they played. MIM cannot vouch for this book as being accurate on which culture came up with which idea first. To study Chinese culture's math and science alone to answer Bernstein would take a lifetime--which is not to say that someone somewhere does not know the answer better than MIM does now. That's not to mention the many lost cultures whose works are still being dug up and translated.

Gender and gambling

Bernstein does not mention gender oppression anywhere in the book, but MIM reads it between the lines. According to Bernstein, gambling was a major contributor to mathematical advance, and we find this aspect of his story credible, because it confirms what we Marxists believe to be true--that usually an economic activity exists first and then a major thought system revolves around it.

MIM finds gambling to be of interest, because along with liquor, it has figured into the leisure-time of men for thousands of years of recorded history. Wine, wimmin, song and gambling-- these go together.

Although the intellectuals Bernstein talks about all had sources of money, and none were professional gamblers, they were interested in gambling, sometimes moreso than their academic work. If it were not for this fact, it might be dubious whether they would have set about solving certain scientific problems according to Bernstein. That is to say an aspect of leisure-time influenced the advance of science.

Gambling and drinking by men traditionally have been thought of as ruinous to families. The image of a womyn at home waiting for a drunk and impoverished husband to come home is not without basis. This is especially ruinous in exploited families, less so in the kinds of intellectual elite families that Bernstein is talking about. Nonetheless, the elite men shared in the same culture of the exploited men.

Gambling is an activity that occurs outside the sphere of the family, outside of reproduction. Hence, it occupies the same location as the major and defining part of gender--the part that men and male pleasure-identified wimmin consider fun.

In part, gambling and drinking are expressions of the alienation of work in class society. Marx believed that eventually humyns would take control of their work and find it more enjoyable and not need so many escapes from it. It would be interesting to know to what extent primitive non-class societies gambled, maybe only by "playing with fire"!

World-famous mathematicians like Blaise Pascal (1623-1662) credited with developing probability theory lived on that edge between reckless leisure-time abandonment and strict religious self-control. In fact the picture emerges that the harder some of these mathematicians including Pascal worked, the less they got done. The more they worked, the more they stood as pillars in their churches.

Church

The book is titled "Against the Gods," because probability has to do with prediction. Being able to quantify some things for prediction cut into the role played by the gods--that according to all good scientists of the Enlightenment tradition including Marxism. We do not have to know what will happen in every instance, but being able to say something will happen a certain percentage of the time was a great advance that meant humyns could perform something formerly reserved for oracles and gods.

The first astronomers, physicists and mathematicians of modern Europe had heavy ties to the Church. When Pascal looked to do his godly duties, he got no work on probability done. Indeed, the health of statisticians seemed to deteriorate the more religious they were. Today we might say this of anyone who "doesn't get out much."

In fact, Pascal abandoned science completely despite his leading achievements and took up the church full time. One probability question that we appreciate was central to this decision: given the choice between the possibility of God and no possibility of God, choosing to believe which has what consequences? Believing in God promised eternal life and freedom from hell, while not believing in God just meant having more fun temporarily. When the question is phrased this way, MIM has to agree that with no bias or information on which choice is correct(50-50), Pascal took the right choice and become ultra-religious.

For MIM, Pascal started the question of evaluating the future ideologically from the point of view of probability. We all have the choice to do drugs and just live as pleasurably as we can and die fast or we can live long and act toward the planet's living even longer. It's an ideological decision, but there is a scientific way to put this decision together. As soon as we start to place value on the future, the short-sighted failures of the class society's philosophy of "pragmatism" become clear.

As MIM recently pointed out in an article about Kosovo, if there is a (statistically independent) one percent chance of utter nuclear war destruction each year, the probabilities of surviving start to become less than half in 70 years or less than a lifetime. If we value the lifetimes of our children or friends' children or just our own "posterity," then it becomes even clearer that we must insist on an anti-militarist solution of the utmost stability and certainty. Certainly a system where it is possible to make profits selling arms or through "ethnic cleansing," cannot be a part of the future.

Whereas Pascal concerned himself about his own afterlife, MIM concerns itself concretely with the next 50, 75, 175 or more years on this Earth. It is possible to say that both Pascal and MIM might be considering something in the future of infinite value. The difference is that MIM would say that there is no doubt that what it is considering is of near-infinite value, because MIM is considering the future of the proletariat and basically the whole humyn species as it exists now. At best, an agnostic reading would be that Pascal has a 50 percent chance of being right about God and we atheists would say Pascal's pursuits get in the way of action protecting something definitely of near-infinite value. Pascal's own life is the proof, since he gave up science for religion. Pascal should have focussed his brain on the posterity of this existing Earth and not the afterlife.

Classical economics

Bernstein comes up with a couple cliched sentences saying that socialism failed because it did not allow risk and tried to stamp it out. What he means is that socialism did not have heroic entrepreneurs taking investment risks and so there was no innovation.

Rocket-science advanced under Stalin and allowed the world's first satellite shortly after his death and other military science advances defeated the most powerful army in history up to that point, but somehow, these ignorant bourgeois critics say socialism disallowed risk. Quite the contrary, socialism plans risk and does so on behalf of the whole society. Socialism does not allow individuals to risk large amounts of property that they become irrational about from self-interest. It is true the risk of violent irrationality is not worth taking.

Readers of Bernstein's book may be surprised how much the great European mathematicians of history also inclined toward classical economics and the MIM sort of Enlightenment thought. Classical economics focuses on the physical world, such as labor, products and the future of the planet; whereas starting in the 1800s "neoclassical" economic thought introduced the concept of individual subjectivity as important.

Survival of the species became unimportant to neoclassical economics and instead, we were handed a pseudo-science of individual, subjective "utility." After a somewhat self-critical phase, the bourgeois economists landed in a somewhat more logical "marginal utility." This philosophy was specifically devised to prevent the comparison of physical realities with physical realities without the subjective opinion of individuals intervening. To MIM, this is generally not a useful approach, especially in any approach concerning militarism or the environment.

The species either dies from war or it does not. That should be the goal of inquiry and not what people think of actions as individuals, consciously or unconsciously leaving out war and environmental risks.

Physically speaking, handing someone a dollar or handing them a pair of dice in a game with a one percent chance of winning $100 is the same thing. That scientific notion is a probability notion called "expected value." Expected value=(probability of winning)times(the value of the object won).

Because of how individuals feel about $100 versus the possibility of $0 or $1, neoclassical theory asks individual subjective questions about such dice games. Such questions prove that even when two things are of equal value, individuals pick one over the other, because they have subjective preferences. The neoclassicals thus develop their ideas further in their pseudo-theories of rational actors.

The bourgeoisie generally argues that the chance of revolution in the activist's lifetime is small and the value of it is also small, because it mostly affects the future. Hence, the view of the bourgeoisie is usually short-sighted "pragmatism."

Evaluating the physical possibility of species self-annihilation is far outside of neoclassical economic or financial theory possibilities. It is silly. Brokers will concern themselves with the risk that their bonds or dividends will not be paid and how they feel about that in various quantitative degrees, but not the risk that a bomb might land on their house and blow up their assets. Suburban Amerikans will pay thousands of dollars in commuting and burglar alarm systems to avoid an infinitesimal chance of murder (that surveys show are overestimated by the public by more than a factor of 10 as Bernstein shows.) Worse still, war-inflicted deaths might be insured against in some rare cases, but a notion of how to calculate war's prevention and acts against it does not exist in bourgeois economic thought.

That's why MIM prefers Pascal and even moreso the mathematicians after him who leaned as most intellectuals did to classical economics concerned with physical reality without intervening subjectivities. Such ideas of subjectivity are easily food for thought for individual investors, hence their popularity. They help investors evaluate their own preferences for risk and return on investment consistently, but they do nothing more.

As Mancur Olsen wrote in the "Logic of Collective Action," a bourgeois economics inspired question that might be more interesting is whether the individual benefits from social movements the individual participates in and how much can the individual make a difference? Since MIM takes the perspective of classes, nations and genders and not individuals, it is difficult for us to answer the question.

Nonetheless, what MIM says boils down to the fact that an individual is part of a family, class and nation. All of those are threatened by capitalism. If all we need to know about is how to spend the next dollar in the next minute, then perhaps there is not much beyond neoclassical economics. If the individual places any value on the future of any length--as Pascal did or as MIM does--then it becomes impossible to defend capitalism and therefore neoclassical thought is of little value. Even a small chance of affecting the future when the future holds infinite or close-to-infinite value will immediately dictate a choice of political activism even by neoclassical theory so expanded.

If the future is discounted but still weighs more than the next 70 years of an individual's life, then the only rational choice is a system with a less than one percent annual chance of nuclear catastrophe each year. The pragmatists would say we do not get this choice to impact such a decision, because the individual does not contribute to revolution.

It's a curious argument that the pragmatists make, because so many revolutions have happened in the 20th century. They must have happened by someone's actions. Let us simplify this question down to the level the individualists are asking us: Lenin and Mao certainly did have a chance to impact the system. Let us take the pragmatists seriously and say that most anti-militarist efforts will fail, but let's say that there is a chance that someone will come up with a revolution like a Lenin or Mao and be effective against militarism.

What is the value of taking a chance that "you" might "be the one" as they said in the "Matrix"? If we knew your action prevented nuclear annihilation for a year, your action would be worth at least the product of 5 billion people--something in the trillions of dollars. So by the old probability formula, we would multiply (probability of your success (winning)) by the (value of your success in dollars(jackpot)). Your probability of success may be very small but your value of success or jackpot is very high. The result of the multiplication would be the monetary value of your anti-militarist actions. If a ticket has only a 1 in 1,000 chance of winning a lottery, but the jackpot is $1 billion, then the ticket is worth $1 million, not subjectively, but actually. It seems to MIM that such a ticket would be worth considerable effort to obtain, unless there are even better ones to be found for the same effort.

The humyn species has only lived about two million years. Many species last hundreds of millions of years. Anti-militarist action has that possibility of prolonging species existence not just a year or two. It becomes very clear, very quickly that unless one subjectively discounts the future of the Earth beyond's one's own life completely, the expected value of anti-militarist action is very high, even if one's probability of success is one in a billion. Hence, although probability theory is not taught this way in college, MIM is tired of all the stupid textbooks and political pundits placing little value on our future. If they attached any reasonable value to the future, they would not tolerate the least bit of militarist motivation from the organization of their society.

MIM does not believe the necessary stable system could possibly be a class system, since all class systems so far have gone to all-out war, sooner or later, twice or more this century already. Only primitive communist tribal societies have records of no war.

In the last chapters of the book, Bernstein reviews some of the work of social psychology which shows that individuals do not answer the questions put to them on their subjective preferences consistently. Thus from our perspective, there is another reason neoclassical thought is a dead-end anyway.

Neoclassical and associated finance theory ends up asking investors their subjective opinions about how much they are risk "averse" and how much they "discount" the future. If such questions are subjective for the individual, we might as well proceed from objective realities and present them for evaluation to the individual as MIM does in its educational work. People with a long-run view will tend to agree with us.

Buy this book