Saturday, October 14, 2017

Book Review: The Accidental Superpower

The Accidental Superpower, by Peter Zeihan, has a long subtitle: "The Next Generation of American Preeminence and the Coming Global Disorder." The thesis is summarized in a talk Mr. Zeihan recently posted here, and which I reviewed in my previous post, here. Both the book and the talk are a perfect trifecta of things that interest me: geography, politics and economics. Accordingly, my enthusiastic account of the video might be described as "breathless."

I found the book equally fascinating, and I pretty much inhaled it as others might a good novel. Mr. Zeihan is a talented writer and makes an excellent case. But now I will force myself to take a more critical eye and look for weaknesses. There are a few.

Briefly, Mr. Zeihan's thesis is that two things have changed: 1) the Soviet Union is no more, and even Russia itself is in the process of disintegrating; 2) The shale revolution means that the United States is largely energy independent, and therefore no longer relies crucially on foreign trade as it once did.

The result is that the global free trade regime, institutionalized under the Bretton Woods framework, is breaking down. From the US perspective, Bretton Woods provided lots of allies as a bulwark against the Soviets, and also guaranteed American energy supplies, including from the Persian Gulf. In return, the US policed global sea lanes, ensuring safe travel from the Skagerrat and Malaccan Straits, all the way to the Straits of Hormuz and everything in between.

The result is the Soviet Union was defeated, and everybody got rich--from Western Europe to Japan, Korea, and even China, Israel, Chile, and more.

But now, because of shale oil, America has little incentive to patrol the global trade routes. Accordingly we will no longer guarantee shipping through the Persian Gulf or the Indian Ocean, or over much of the rest of the world as well. Absent energy needs, the USA depends less on trade than any other country on earth, and can simply rely on itself. Or so Mr. Zeihan maintains.

The US can get away with this new isolationism because it is blessed in two ways: geography and demographics.

Geographically, America has more navigable, internal waterways than the rest of the world combined, not even counting the intracoastal waterway from Chesapeake to the Rio Grande. Since transport by water--even today-- is more than a factor of ten cheaper than by truck, and still a factor of three cheaper than rail, the US has a huge advantage. Further, our water network overlaps the largest bit of agricultural land in the world. Put bluntly, a homesteader in Iowa had, via the Mississippi, cheap access to global markets, even from Day One in the early 19th Century. By comparison, today's small farmer in Mexico's Chiapas state still has no cheap access to any market, not even Mexico City.

The Iowan will get rich. The Chiapas peasant will remain poor no matter how much some stupid Commandante rails against the injustice.

Second, while birth rates have declined in most of the world, the US still has relatively bright demographic prospects (though perhaps not as bright as Mr. Zeihan imagines). By contrast, countries like Canada, Japan, Greece, and especially China and Russia, are facing a crisis.

Using these two factors as a guide, Mr. Zeihan offers predictions for the next 15 years, beginning in 2015. The book was written in 2014--a very long time ago. Back then oil cost $100/bbl, the Canadian dollar fetched US$1.05, and the word "trump" doesn't even appear in the index. Further, he never mentions robotics (a subject in the more recent video), which certainly changes the situation considerably.

Still, for all that, his predictions hold up reasonably well:

  • Russia is at the point of demographic collapse and will cease to be a viable nation within the next decade.
  • The Chinese economy will collapse, and China as a unitary state will disintegrate. He points out that China throughout its history has only briefly existed as a single state.
  • Japan, no longer able to source oil from the Persian Gulf, will need to conquer neighboring, oil-bearing territories to meet its needs. He predicts that Manchuria and Sakhalin Island will fall to the Japanese.
  • The fastest growing economy over the next fifteen years will be Mexico (though the spread of robotics might change this).

So I think all of this makes sense, and I am now making sure that my retirement funds don't include any investments in China--that part of his argument is completely convincing. Still, there are some flaws, and it is now my duty to point them out.

1) Geography and demographics are certainly important, but hardly determining. That America has a near-perfect geography is as much historical accident as anything. Andrew Jackson could have lost the Battle of New Orleans, or worse yet, not fought it at all. A president not named Lincoln might have agreed to Southern succession on the condition of peace. A talented Canadian negotiator could have settled on the 42nd parallel rather than the 49th. Any of these would have changed American history dramatically, negating our geographical advantage.

History is contingent. Or put another way, history is just one damn thing after the other. Geography is the stage on which it all takes place, but it really doesn't tell us very much about the ultimate outcome. None of Mr. Zeihan's predictions will come true if the US descends into civil war, or if California really secedes from the union, geography notwithstanding.

Demography isn't all that it's cracked up to be, either. For example, Greece and Japan both have similar geographies (mountainous, seafaring nations), and similar demographics (old). Yet the prognoses are very different: Greece is predicted to be a failed state, while Japan will muddle through mostly as is. Culture matters a lot. Mr. Zeihan gives it too short shrift.

2)  I don't think Mr. Zeihan understands very much about economics. Some of this is just semantic--he refers to geographically-rich countries such as the US as "capital-rich." I think "resource-rich" would be more precise. Capital is investment in plant and equipment, which can be bought and sold and where depreciation is a problem. None of that applies to the Mississippi River, at least not in any meaningful sense.

Despite having no navigable waterways, Japan is a capital-rich country because of its beautiful cities, high-tech factories, elaborate rail system, and skilled labor force.

3) Mr. Zeihan claims that because of the retirement of the baby-boomers, total capital will decline. This is partly because we're not saving anymore (I stopped saving last month), and also because we're living off our accumulated wealth.

And this is true as far as it goes, but Mr. Zeihan leaves out the other half of the picture. Beyond withdrawing our savings, we are also withdrawing our labor. Capital is often usefully expressed as capital density: capital per worker. If total capital declines and the total number of workers declines, there is no obvious change in the capital density. So I think Mr. Zeihan exaggerates the scale of this problem.

The more important problem is the decline in the labor force. If Mr. Zeihan had phrased his argument from that point of view I think he'd make a stronger case.

4) Despite the crystal clarity in most of the book, there are a few sections that just didn't make any sense. For example, he claims that the Mexican drug war will lower the cost of labor--and for the life of me I don't understand his argument. It doubt it's true. First, a drug business, and much more a war, requires labor and therefore competes with other industries, raising wages. And second, civil discord makes labor less flexible and less productive, increasing the total cost. Again, I don't believe he thinks like an economist.

5) Mr. Zeihan apparently has never heard of comparative advantage. While the geopolitics he describes will undoubtedly change the comparisons by which the advantage is calculated, the principle will still hold.

Mr. Zeihan lumps all 1.2 billion Chinese together as "low-cost labor." But surely among that mass of humanity there exists particular skills and infrastructure that are comparatively advantageous--be it porcelain or shoelaces or rice or whatever. The US will still trade with China.

So I am skeptical that there will be the collapse in world trade that he predicts. Yes, the Americans will withdraw from the Persian Gulf and the Indian Ocean. And maybe even from the Mediterranean. But likely not from other important trade routes.

So he's left out culture and economic complexity. That let's him tell a simple, engaging, largely convincing story. It's fun to read. I think it's mostly true. But it is far from inevitably true. And indeed, there are enough differences between the book (2014) and the video (2017) to indicate that it won't be true.

Further Reading:

Wednesday, October 4, 2017

New World Disorder

My Trotskyist friends celebrate the supposed decline of American empire. They see this as the beginning of the end; the start of the breakdown that will climax in World Revolution. US imperialism is playing a losing game of whack-a-mole trying to smash rebellions in remote corners of the world: Syria, Afghanistan, Venezuela, Iran, etc. The Socialist Workers Party takes this furthest, going so far as to claim the US lost the Cold War in 1991.

So last night I listened to an amazing talk by Peter Zeihan, entitled The New President & World Challenges (h/t Arnold Kling). It's a bit over an hour long, but Mr. Zeihan is an entertaining speaker, and his ideas are very provocative. Highly recommended! Indeed, I'm sufficiently inspired to write about it now, despite the fact that I've just ordered his book and should probably wait until after I've read it.

Mr. Zeihan does say that we're at an inflection point in world history, symbolized not by the end of the Cold War, but rather by the end of Bretton Woods (BW). BW was an agreement between the United States and the Free World that the US would control the world financial system, while in return we would 1) guarantee global security, specifically the flow of trade routes and oil supplies, and 2) allow free entry into the US marketplace. To keep its end of the bargain, the US built by far the strongest military in the world.

That agreement worked spectacularly well. After Nixon visited China, that country also became part of the "free world", and the system brought 400,000,000 people out of poverty. Japan and South Korea took maximum advantage of BW, to spectacular effect. And of course the Marshall Plan (which depended crucially on open US markets) was a smash hit. Organizations such as NATO prevented global war for 70 years, and the European Union was founded on the assumption that global peace was durable.

So what went wrong? Nothing, really, but something very dramatic went right. Fracking. Within a period of about 10 years the US went from being dependent on oil imports to being a net oil and gas exporter. Today we buy next to nothing from the Persian Gulf. Our need for the Venezuelan resource has dwindled to nearly zero, and even Mexico can't sell oil to it's northern neighbor.

For years this was euphemistically proclaimed as North American energy independence, as if we were dependent on Canada. And perhaps at one point we were, but no longer today. The much maligned Keystone Pipeline would have found a ready market as recently as 2008, but today it becomes irrelevant. American shale gas and oil are more than sufficient to supply the entire economy.

Further, they are now competitive on price with everybody but the Persian Gulf states, and on present trends US frackers will be the world's low-cost producers by 2022 or so.

Good news! Right?

For the United States, yes, but not for the rest of the world. The US now has no economic interest in the Persian Gulf, and therefore no incentive to maintain security there. Mr. Zeihan points out that historically the US maintained an aircraft carrier group in the Persian Gulf at all times. Today our ships are there only half the time. He predicts that soon enough there will be no American naval presence in the Persian Gulf at all.

Of course protecting the Persian Gulf means defending the sea lanes approaching the Gulf, especially from northeast Asia, which countries depend crucially on that energy source. But America's enthusiasm for defending their trade routes has also diminished. Japan and China are in a panic--they do not have the ability to protect those trade routes themselves, much less preserve peace in the Middle East.

A knock-off effect is the US no longer needs bases in Western Europe, which were used as a forward base for the Middle East. Indeed, Mr. Zeihan claims that the US now has fewer troops posted abroad than any time in postwar history. And our footprint is about to shrink further.

Of course Europe also depends on Persian Gulf oil, and will be equally unable to secure it for itself. The result is that Germany becomes dependent on Russia (and vice versa). The geopolitical calculus that led to the Hitler-Stalin pact reasserts itself. NATO is dead. So is the EU.

So doesn't the US care about the fate of its allies? A whole lot less than you might think, and that leads to the second disastrous piece of good news: artificial intelligence (AI).

AI reduces the need for large amounts of low-cost labor. All those women slaving away in the textile mills of China, Vietnam, Bangladesh, etc. are about to be rendered redundant. That manufacture will now be done by machine, with only a small fraction of the employees. Labor costs will not be the determining factor, but instead electricity (cheaper in the US than anyplace else), proximity to markets, and availability of natural resources will clinch the deal.

In a word, manufacturing moves back to the United States. Big time. That's already occurring. Instead of the infernal mills, it will be local, flexible, small-scale, cheap, and very close to the customer. It's all very good news...for the United States.

China, meanwhile, goes bankrupt. Mr. Zeihan points out that China has existed as a unified state only for brief periods in its history. He predicts disintegration, or perhaps only civil war possibly leading to disintegration. China will resume its historical role of not being part of the world economy. Poverty for Everybody Now--my Trotskyist friends should be happy.

Donald Trump has likely never seen Mr. Zeihan's video nor read his book. He's not an intellectual sort. But he clearly has an intuitive sense of the immense bargaining power the United States now has over its so-called "allies." 

President Xi, Angela Merkel, Theresa May, Shinzo Abe, and Justin Trudeau all paid Mr. Trump a visit. (You really need to watch the video to see the humor in that situation.) Trump somehow understands that these people have absolutely no bargaining power whatsoever! Mr. Xi (according to Zeihan) basically conceded everything that Trump asked for in the vain hope that the US will continue to trade with China as it always has.

Theresa May offered a free trade deal with the US, pretty much entirely on American terms and in violation of EU law (Brexit hasn't happened yet).

Angela Merkel had nothing to offer the US, and thus came away with nothing. Germany is no longer a US ally in any meaningful sense of the word.

Justin Trudeau wants to maintain NAFTA, but Trump understands that Trudeau has no choice but to accept American terms of trade no matter what. NAFTA will turn into an American diktat.

All of these world leaders need the US way more than the US needs them. They came to Washington not to negotiate or bargain, but rather in abject supplication.

Welcome to the New World Order. And be very grateful that you live in the United States of America.

Further Reading:

Sunday, October 1, 2017

Hurricanes

The Militant does us a service with two articles about hurricane damage. Brian Williams covers destruction by hurricanes Harvey and Irma to Texas and Florida, while the second, by Seth Galinsky, describes the effects of Irma on Cuba. The comparison is instructive. In addition, I draw on this report from Houston by the Libertarian activist Leo Linbeck.

First, some basic data, courtesy of Wikipedia. Cuba has a population of 11 million people, only some of whom were impacted by Irma (which sideswiped the northern coast of the island). Cuba's total area is 46,000 square miles, but judging roughly from the TV maps, I'll estimate that about 10,000 square miles were affected by the storm. Mr. Galinsky reports that 1,738,000 people were evacuated, which we can take as a rough estimate of the area's population. Cuba's GDP is about $87 billion. Assuming that GDP scales proportionally to population, the GDP of the affected region is about $14 billion. Irma hit Cuba on September 8th.

Greater Houston has a population of 6.5 million people living in about 10,000 square miles. The GDP of the metropolitan area is about $450 billion. In addition, Harvey badly damaged the Beaumont-Port Arthur region, along with bits of Louisiana, for which I haven't compiled data. Harvey pounded Houston for several days beginning on August 25th.

Mr. Galinsky writes about Cuba.
More than 1,738,000 people were evacuated in advance of the storm by Civil Defense committees, minimizing the loss of human life. The committees made sure shelters — from community centers to caves — were comfortable and adequately provisioned. Students went door to door to persuade and help anyone in a danger zone who was hesitating, to evacuate. Tens of thousands of electrical and construction workers moved into action as soon as the storm died down.
By comparison, Mr. Williams describes Houston.
In Houston, where flooding levels were much worse, mounds of debris from about 126,000 damaged homes line the streets three weeks after Hurricane Harvey hit. Across Texas, the debris “could reach 200 million cubic yards — enough to fill up a football stadium almost 125 times,” reported Reuters. Tens of thousands still haven’t been able to return to their flood-ravaged homes. In many, sewage and other contaminants have left them permanently uninhabitable.
Mr. Linbeck reports that there are 1.6 million housing units in Houston (that seems low to me, but I'll take his number). That means that 6.25% of Houston housing units were damaged, some of which were left uninhabitable.

Mr. Linbeck also informs us that 30,000 people stayed in shelters during the storm. Of course many other people hopped into the RV and left town on their own or went to stay with relatives, or made some other arrangement--I have read no estimates about how many. But let's suppose it was 250,000 people--I think that's a very high estimate. It implies that less than 5% of Houston's population was rendered homeless, however temporarily.

In contrast, the entire population of the Cuban region was evacuated--they got to sleep in caves, which we're assured were "comfortable." Wikipedia reports:
Widespread destruction of housing was reported in the provinces of Ciego de Ávila and Villa Clara. In the city of Santa Clara, 39 buildings collapsed. Overall, Irma is estimated to have caused at least $2.2 billion (2017 USD) in damage and at least 10 deaths across the country.
"Widespread" surely implies more than 6%, and given the sorry state of Cuban housing to begin with, it's probably a lot more than 6%. Electricity was knocked out to the entire region, but Mr. Galinsky assures us that "as of Sept. 16, 87% of the population had some electricity restored." Which, given that electricity in Cuba is hit or miss to begin with, I guess that's something.

Mr. Galinsky adds detail.
The challenges are formidable. In addition to the electrical grid, tens of thousands of homes were damaged — 24,000 in Camagüey province alone. Dozens of oil wells, sugar refineries and more than 100,000 acres of banana, sweet potato, grapefruit, oranges, sugar cane and other crops, as well as chicken coops and feed lots for pigs and cattle were hard hit.
Wikipedia tells us that 74 people lost their lives to Harvey on the US Mainland, approximately 50 of whom lived in Houston. The ratio of deaths in Cuba vs. Houston is at least 0.20. The population ratio between the two is 0.26, or comparable. Further, the 10 deaths in Cuba is a minimum--so the ratios may in fact be even closer. There is no evidence that Cuba was better prepared to prevent deaths from the natural disaster than Houston. Nor did it do any worse, but at the cost of evacuating the entire population.

It's instructive to compare the ratios of monetary loss to GDP. For Cuba, from the data above, that number is $2.2 billion/$14 billion, or 0.16. A very high estimate of the damage to Houston is $180 billion, or about 0.4 fraction of GDP. Thus by this measure Harvey did more than twice as much damage to Houston as Irma did to Cuba.

There are a couple of ways to interpret this result. One is that Houston was just unprepared for a hurricane, which then ran rampant across the region. This does not strike me as credible.

The second is that Houston has more infrastructure. It's the petrochemical hub for North America, with lots of refineries and chemical plants. The media reported at length about the chemical explosions due to loss of power and loss of back-up power. Nothing like that happened in Cuba because Cuba has no petrochemical industry and no chemical plants. It's really hard to destroy something that doesn't exist.

No Cuban freeways got flooded either--because there aren't any Cuban freeways. Mr. Linbeck tells us that Houston freeways were built purposely to serve as detention ponds, so to prevent water from going into people's basements.

The ideologically pro-Castro Militant makes the best case it can for socialist virtues in a natural disaster. I don't think that case is very convincing, but that's not the bit that most offends me about their reportage.

Mr. Williams, who is usually a very careful reporter, makes the following claim.
Nowhere have government officials mobilized the forces to deal swiftly with this social crisis, destroying the lives of tens of thousands. At best they hope to get some paltry compensation by and by.
This seems slanderously untrue. As The Militant often points out, the media is happy to blame President Trump for almost anything. The fact that there has been very little blame about the Harvey recovery (apart from Melania's shoes), indicates that relief efforts have gone as well as can be expected. Mr. Trump notwithstanding, local government gets more of the credit.

Put bluntly, even if I were poor, during a hurricane I'd much rather be living in Houston than in Havana. So much for socialism.

Further Reading




Thursday, September 21, 2017

Louis "Lyndon LaRouche" Proyect

In a comment (here), Louis Proyect takes me to task for writing obsessively about unimportant things (such as his blog). He urges me to "get a f***ing life."

So it comes as a surprise that Mr. Proyect has devoted four long posts (he promises a fifth) to the political career of that truly unimportant figure, Lyndon LaRouche. I confess I have read only the fourth in the series, which is more than enough. I'm ashamed to say that LaRouche was a comrade of ours (Proyect and me) in the Socialist Workers Party (SWP), though he left well before my time.

In my opinion LaRouche is not a political figure at all. He made his mark raising money by fair means and foul--a boiler room telemarketing operation followed by credit card fraud, for which he spent five years in jail. I don't think he had (has) any political convictions at all beyond what he thought would raise him the most money and influence.

Yet for no reason that I can discern (at least from post #4) Mr. Proyect refers to him as a "fascist." This is a word I avoid because it no longer has any meaning--it's just an expletive. That, along with the word "racist," is precisely how Mr. Proyect uses the term. Anybody with any association with Mr. LaRouche (however tangential) gets tagged as "racist" and/or "fascist," with no other evidence necessary.

Mr. Proyect reports that "[a]t the peak of his powers when he was a presidential candidate, LaRouche used to buy an hour’s worth of time on network TV to present his rather convoluted mixture of leftish sounding attacks on the IMF and bizarre conspiracy theories about how Queen Elizabeth was a drug lord." Are those beliefs hallmarks of fascism? Or racism? Mr. Proyect doesn't say.

Mr. Proyect purports to document the extensive influence that LaRouche wielded during the Reagan administration. Upon even casual examination it collapses into hilarious rubble. He quotes journalist Dennis King as follows:
Its fund raisers brought in tens of millions of dollars while its candidates attracted over 4 million votes, including voting percentages above 10 percent in hundreds of contests. In at least 70 statewide, congressional, or state legislative races, LaRouche candidates polled over 20 percent of the vote. At least 25 appeared on the general election ballot as Democratic nominees, either by defeating a regular Democratic opponent or by running in the primary unopposed. Although none was actually elected to any public office higher than a local school board, hundreds won Democratic Party posts (mostly county committee seats) across the country.
That proves what money can buy, but upon closer examination it's not very dramatic. We're told that this happened over several elections from 1982 to 1988. That's four presidential and off-year cycles. Suppose 30 million people cast ballots each cycle, meaning that 120 million ballots were cast over the six years. But each ballot contains many contests--for president, congressman, city council, family court judge, etc. A reasonable estimate is that on each ballot a voter would have marked ten candidates for 10 different offices. That means 1.2 BILLION votes were cast, of which the LaRouchians got only 0.3% of the total.

Hardly a mass movement. Even the Green Party does better than that! And LaRouche looks even worse when one notes that for minor offices people often vote randomly.

Here's another example of LaRouche's supposed reach.
The Reagan White House and LaRouche saw eye-to-eye particularly on the need for Star Wars and pushing for nuclear power. They had even beaten Reagan to the punch. In the late 70s they were lining up rightwing atomic scientists like Edward Teller to support the goals of the Fusion Energy Foundation that promoted a Star Wars type anti-missile defense, fusion energy, and bigger and more powerful thermonuclear devices. While Teller considered them too weird to network with, a close friend of his and highly respected scientist named Robert Budwine from the Livermore Labs was drawn into their periphery.
Mr. Proyect uses this trick several times. First, LaRouche purports to agree with some commonly held opinion, in this case supporting nuclear power. Then LaRouche "lines up" Edward Teller, who we're supposed to believe wouldn't otherwise have championed nuclear power. Mr. Teller is smart enough to dismiss LaRouche as a crank, but somehow one of his colleagues (Teller had thousands of them), gratuitously dubbed "a close friend," falls into the periphery. This is the extent of LaRouche's influence in high places--it amounts to nothing.

Then there's this slander by (slight) association:
By providing a platform for softball interviews, the EIR [LaRouche's magazine--ed] cultivated ties to the Republican Party elite. Among the politicians whose views could be seen in this fascist journal were Agriculture Secretary John Block, Defense Under Secretary Richard DeLauer, Commerce Under Secretary Lionel Olmer, Treasury Under Secretary Norman Ture, Assistant Attorney General Lowell Jensen, Murray Weidenbaum, the chairman of the President’s Council of Economic Advisers, and Senators Orrin Hatch and John Tower.
Mr. Proyect makes no claim that these people wrote anything for the EIR. They were simply fooled into contributing interview remarks, which hardly demonstrates any LaRouche influence on them whatsoever. Note the gratuitous expletive.

That same paragraph goes on to say:
No matter how much Richard Spencer has praised Donald Trump, he never could have gotten through the front door to the equivalent of such pols today. That’s the big difference between LaRouche and the alt-right. He was far more interested in influencing public policy than doing half-assed imitations of a Nuremberg rally.
This is ridiculous. LaRouche got away with his antics only because there was no Google. He could reinvent himself with impunity and pretend to be an establishment figure whenever he wanted to. Richard Spencer can't do that--a single search will turn up his past. And to what end did LaRouche want to influence public policy? Mr. Proyect offers no clue. Did he really believe that Queen Elizabeth was a drug lord?

No. LaRouche's only goal was to raise money, and to shanghai these officials onto his cause helped him do that. Mr. Proyect completely overstates his significance.

He similarly grossly exaggerates LaRouche's interactions with the CIA. Apparently he had a few meetings with a couple third or fourth tier officials (stupid ones). And this is supposed to be consequential?

At the top of his piece Mr. Proyect links to the video produced as an infomercial by LaRouche's presidential campaign. It's 28 minutes long--I gave up after the first three. It's the most banal, tedious speech I've ever heard, delivered in an ultra-pretentious and faux-intellectual style. The content, such as it is, would be agreeable to Marxists and Conservatives alike--it's that anodyne.

I can't believe an intelligent man like Mr. Proyect sat through the whole thing. If so, he wasted his time. For that matter, I can't believe he has invested so much effort writing about an irrelevant con man.

Though I guess we can thank him for one thing. He's preserved the virtue of the British monarchy. At least now we know that the Queen isn't a drug lord.

Further Reading:

Thursday, August 31, 2017

Charlottesville

My Trotskyist friends have a lot to say about what happened in Charlottesville. They don't agree with each other.

For Louis Proyect it is mostly about Antifa. He reposts a piece by Leighton Woodhouse entitled The Ugly Side of Antifa. The lede paragraph reads:
Yesterday, at the anti-Alt-Right rally in Berkeley, I watched groups of masked Antifa members in Black Bloc formation swarm individuals who were apparently antagonizing them, and pummel them with their fists, feet, and flagpoles. When the victims tried to escape, they were run down, and in at least one case, cut off by the Antifa mob and beaten down some more. In the incidents I witnessed, about 5 or 6 Antifa members at a time participated in the attacks, while perhaps 100 others stood behind them, forming an impenetrable wall that blocked bystanders from intervening, or documenting the violence on camera. Those people would also help chase the victims when they fled.
Mr. Proyect files it under the label black bloc idiots.

In another piece of his own, Mr. Proyect puts Antifa in perspective.
With strikes being undermined for the past twenty years, a trade union resisting the bosses is something that the left should get behind. Maybe we should put punching fascists on the back burner for a while and spend more time punching a corporation like Time-Warner instead, the corporation that owns Spectrum Cable, the ever-so-progressive HBO, and CNN, the 24/7 enemy of Trumpism. After all it is capitalism that is the enemy, not just fascism.
The reference to the president reflects Mr. Proyect's objection to the media making everything about Trump. Indeed, Mr. Proyect is the only one of my correspondents who doesn't put Donald J. Trump on center stage. Though maybe Mr. Proyect goes too far with this--expecting the world to ignore Trump is not a likely outcome.

Socialist Action (SA), meanwhile, has Trump on the brain--the whole Charlottesville episode is nothing more than a window into his soul. And there one sees racists, Nazis, White supremacists, etc., though they do finally admit that "...Trump is not a fascist,..."

Though if you believe SA, his spokesmen are all fascists.
David Duke, apparently irritated by Trump’s mild rebuke, tweeted, “I would recommend you take a good look in the mirror & remember it was White Americans who put you in the presidency, not radical leftists.”
But other rightists took Trump’s statement as a victory. “Did Trump just denounce anti-fa?” tweeted Richard Spencer, using a term used to describe anti-fascist protesters. And the Nazi Daily Stormer wrote gleefully that Trump had “outright refused to disavow” the fascists. “He didn’t attack us. … When asked to condemn, he just walked out of the room. Really, really good.”
The key graf is this indictment of Mr. Trump.
Trump has been silent about the large number of racist and anti-Semitic hate crimes that have taken place since he took office. In a rambling and barely-coherent statement following the clashes in Charlottesville, Trump neglected to mention the murder of Heather Heyer. He condemned the violence on “many sides” and refused to condemn the white supremacists and fascists specifically.
I hope SA provides us with a list of that "large number of racist and anti-Semitic hate crimes." Are there really more of them since Trump took office? And is Trump actually responsible even tangentially for any of them?

I think there was more racial animosity under the Obama administration than there is today.

Then I encourage everybody to listen to Mr. Trump's initial speech about Charlottesville, which SA ludicrously describes as "barely coherent." There is nothing wrong with that talk; it is completely unremarkable. The most egregious thing is CNN's headline describing it: "Donald Trump's incredibly unpresidential statement on Charlottesville."

I suppose one could criticize him for not mentioning Heather Heyer. In his defense I'm not sure the murder motive was definitively established when he gave this speech. Even so, it hardly indicates that he supports murdering people.

And why should he even mention the neo-Nazis? They worked hard nationally to build a "Unite the Right" rally, and all they can muster are 500 people! These people (mostly pretty dysfunctional) are a sideshow. They don't deserve their 15 minutes of fame--they don't even deserve five seconds. They certainly shouldn't get a call-out from the President of the United States.

Finally, SA tells us who the counter-protesters were:
Without warning, Fields drove his car into a column of marchers, killing Heyer and injuring at least 19 others. Among the injured were members of the International Socialist Organization (ISO), the Democratic Socialists of America (DSA), and the IWW.
This is a list of the folks who benefit most from building up the neo-Nazis--you need fascists before a party of anti-fascists makes any sense. These groups are hardly more representative of Americans than the Rightists. Trump was quite right when he says there is blame on both sides.

The Militant (representing the Socialist Workers Party (SWP)) also thinks Charlottesville is mostly about Trump, but from a completely different perspective. In their view Trump is merely a passive bystander, or perhaps even a victim of the tumult.
At the same time, the liberal capitalist media, Democratic and some Republican party politicians, and the middle-class left used the ultrarightist actions and resulting deadly violence to blame President Donald Trump — and especially the workers who elected him — for what happened. They view everything in politics today through the lens of how to get Trump indicted or impeached.
They claimed that the white supremacists are Trump’s “base,” slandering the working class, particularly workers who are Caucasian, as backward, racist and reactionary.
The Militant provides an extended blow-by-blow of how the Charlottesville events transpired, which I found useful. That information is not readily available in the mainstream media. The article is worth reading just for that.

The main political message is that Trump is leading a working-class movement. That's not to say that Trump himself is pro-worker (he isn't), but only that his message has resonated with a broad slice of today's proletariat. They essentially echo Michael Moore's famous rant, here.

The SWP's goal, therefore, is to steer this legitimate working-class movement in a revolutionary direction before Trump manages to betray and demoralize it. That's likely a pipedream, but it at least enables them to be more or less truthful about Charlottesville.

Opponents of this strategy, which certainly includes Socialist Action, are in the uncomfortable position of writing off 40% of the American electorate as racist and fascist. The Militant quotes the Workers World Party.
“Media manipulation and financial maneuvering by a significant far-rightwing section of the billionaire class to get one of their own into the White House,” they said in a public statement, “has emboldened the most racist, anti-immigrant, anti-Muslim, anti-Semitic, misogynist, male supremacist, murderous scum of this decaying capitalist society.”
The Militant goes on to say (truthfully) that "it’s simply not true that there is a rise in racism or anti-immigrant, anti-Muslim sentiment among the working class in the U.S."

A revolutionary who writes off a major part of the working class in such terms has become, in The Militant's view, allied with the class enemy. Or at least a useful idiot.

So we have three very different points of view coming from the Trotskyist movement (broadly defined). 1) Trump is unimportant and should be ignored. Antifa is evil. 2) Trump is shilling for fascists and needs to be soundly defeated (albeit by different tactics than Antifa). Trump's followers are themselves either fascists or very stupid people. And 3) Trump is leading a working-class movement, and while he's a false prophet, the people supporting him have legitimate grievances and deserve to be protected (from Antifa and the mainstream media).

I don't fully agree with any of those options, but it is notable that there's more diversity of opinion among Trotskyists than there is in the mainstream media.

Further Reading:

Friday, August 25, 2017

Author's Note

Effective September 1st I will retire from SUNY New Paltz. That means I no longer need to worry about being fired for political incorrectness. Accordingly, I will henceforth blog under my real name, Daniel Jelski, Professor of Chemistry (emeritus), SUNY New Paltz.

Monday, August 21, 2017

Freedom Socialist Party Reads Marx

The Freedom Socialist Party (FSP) certainly belongs on my Beat! They're professed Trotskyists, having split off from the Socialist Workers Party in 1966. That was before my time, and indeed, these folks come across as frozen in amber. Being early-birds to the web, they've cornered the handle socialism.com.

The FSP started in Seattle, where apparently the entire branch left the SWP. The reasons for the split are here, and don't make too much sense to a modern audience. They disagreed only on fine points related to the civil rights movement, the anti-war movement, and the SWP's attitude toward (then) Maoist China. And typical of all splitters, they accused the SWP leadership of unprincipled, undemocratic behavior that forced the issue. Today these issues are mostly moot. 

They also believed the SWP underestimated the importance of the women's movement, and this looks to be the primary distinguishing aspect of the FSP today. The Party briefly became an all-woman organization, but has since charitably admitted men. "Party men today are engaged feminists."

That left the feminist impulse unsatisfied, and so a sisterly organization was established: Radical Women (RW), which does exclude men. I'm not sure how the goals or responsibilities of RW differ from the FSP.

The Party had it's share of scandal. The leading lady of the movement was Clara Fraser (1923-1998). At the founding she was joined by her husband, Richard, who then soon filed for divorce. The spat was very public and led to a split in the Party, likely accentuating its feminist flavor.

In 1984 a disgruntled ex-comrade sued for a refund of contributions he'd made to the Party toward rebuilding their headquarters. The Party was then located at Freeway Hall--today it's at New Freeway Hall. The dispute was again very public and drawn out, with Leonard Boudin serving as the FSP's lawyer. Eventually the Party was vindicated, but not until 1992.

By 1976 the Party had branches in Seattle, Los Angeles, New York, San Francisco, and Portland, which is where they are still located. These are the "billionaire cities"--between them they're probably home to three quarters of the country's billionaires. Of course Seattle wasn't like that in 1970--then it was a decaying rust belt town, famous for the billboard: "Will the last person to leave Seattle please turn out the lights." But then a young man named Bill Gates decided to come home to live closer to his parents.

It is ironic that a supposedly vanguard, working-class Party, even today, can only exist in the richest places on earth.

I'm turned on to the Freedom Socialists by an article in North Star written by an FSP member, Susan Williams, entitled Marx's Capital for the 21st century. It's an intriguing title and could be a good article, but it isn't. Instead it's a poorly written piece composed by somebody who knows nothing about economics. But the author can't be stupid--she identifies as a medical doctor and "doctor's union organizer." So we can forgive her economic ignorance. If I'm ever in Seattle (if that's where she lives) and not feeling very well, I'll look her up and engage her in topics she undoubtedly knows more about.

I'm not going to make fun of Dr. Williams, which would be too easy and not much sport. I will also confess I haven't read Capital, nor do I intend to. In my old age I no longer have the patience for bad writing. So I will assume that Dr. Williams' description of Marx is accurate, at least for the topic I wish to consider. She inadvertently points out a place where the world really has changed, and while Marx may have been correct in the 1850s, he is certainly wrong now.

Dr. Williams writes:
Capital begins with the individual cell of the capitalist organism: the commodity (an object made to be sold). Marx explains step by step the process by which human labor-power adds economic value to commodities above and beyond the owner’s costs. And he shows how this process inherently steals from the worker. If you know in your gut that you are being robbed at work even though you get a paycheck, Marx demonstrates logically why you are absolutely correct.
Marx laid out how capitalist economy would unavoidably suffer periodic crises worsening over time while the general rate of profit would slow.
Marx may have used the word commodity in just the way she describes, namely as a product to be sold. Today, however, the term is used in a much narrower sense. Sometimes it refers to raw materials, i.e., the stuff that comes from mines, oceans, or farms. Thus oil, copper, and pork bellies are all commodities, and are commonly traded on commodity exchanges.

In Marx's time, commodities in that sense did make up the major portion of the economy. Today they are a much smaller percentage.

There's another definition of commodity that I think is more useful: A commodity is a product where competition is entirely on price. Gasoline is a commodity--when I shop around I only compare prices, and only secondarily service, cleanliness, quality of the gasoline, etc. Economy class airline seats are a commodity. Tourists look for the cheapest fares, and beyond that they don't care which airline they fly. Business and first-class travel, on the other hand, does not compete on price. They are not commodities, and Singapore Airlines has established a prominent brand name.

Marx may also have used commodities in this sense. He lived during the industrial revolution, when the major industrial output was textiles. They were certainly commodities in the sense that manufacturers competed mainly on price.

And if competition is only on price, then of course profit margins will get squeezed. Marx's conclusion of a declining rate of profit (as a fraction of operating costs) will certainly be true, and is true today for commodities. Gas stations run on very thin margins, as do airlines, and stores like Walmart.

But unlike in Marx's day, most things we buy are not commodities. Let's use a more general term: consumer products are things that consumers buy. I like to include the qualifier consumer because what the consumer can buy will determine his or her standard of living. The more consumer products, the better we shall live.

In today's world, few consumers purchase raw iron ore, raw textiles not yet cut or sewn into clothes, unroasted coffee beans, bushels of wheat straight off the farm, or crude oil. Those are commodities, but today they aren't consumer products. In Marx's time, however, many more of them might have been consumer products. Families, for example, purchased yards of cloth, and then it was up to the women or the servants to fashion that into clothes. We don't do it that way anymore--we're richer than that.

Even if she's not from Seattle, Dr. Williams has likely heard of Starbucks. Starbucks buys two commodities in bulk: coffee and sugar. These get fashioned into elaborate concoctions, prepared using custom equipment by specially trained personnel, and served in bespoke locations designed specifically for that purpose.

Of course all that comes at a price: Starbucks is not cheap. Starbucks is not selling a commodity, but rather a branded product that consumers choose to spend money on. Indeed, it's a good rule of thumb: branded products are not commodities. Instead they're sold because they add some extra value for the consumer that elevates them above the price war. There are lots of branded products: iPhones, Cadillacs, Cheerios, Harvard University, Singapore Airlines, etc. They're a ubiquitous part of our lives, and none of them are commodities.

The declining rate of profit does not apply to non-commodities. Starbucks charges a premium for the benefits of it's brand, which are quite substantial.

Marx did not live in our world. He may never have encountered a consumer product like what we have today. In his world all one could buy were commodities, and it was up to the household to make something more out of them. He lived in a world of commodities; we live in a world of consumer products.

The rules are different. Marx was right. Now he's wrong.

Further Reading: