Saturday, December 29, 2012

Is The SWP A Cult?

This is the second article inspired by Louis Proyect’s post entitled Cult Leaders Reward Themselves Handsomely. The title refers to the modern Socialist Workers Party (SWP), under the leadership of Jack Barnes. I think the SWP is frequently characterized as a cult--see also this article by Lynn Henderson  in Socialist Viewpoint, which even contains a section entitled On Cultism. In Socialist Action’s obituary for Gerry Foley, one finds the sentence, “[h]is departure from the SWP, which expelled Gerry retroactively, stemmed from his opposition to the bureaucratic and cult-like practices of SWP National Secretary Jack Barnes...” Finally, Mr. Proyect and others contributed to this discussion thread.

The word is used sloppily and one shouldn’t take it too seriously. Still, the question presents itself: Is the SWP a cult? And if not, then what is it?

When I think of “cult,” I think of Jonestown (Guyana), or the Branch Davidians, or perhaps Charles Manson-style wackiness. The Socialist Workers Party definitely does not fit that mold. My former Comrades are surely needy and I feel sorry for them, but they’re not certifiably insane.

According to Wikipedia:

The word cult in current popular usage usually refers to a new religious movement or other group whose beliefs or practices are considered abnormal or bizarre.

This description doesn’t fit the Party, either.

Because of the Pope, some Protestants refer to the Catholic Church as a cult. By this standard any organization under a single, all-powerful leader will qualify. Thus the examples above are cults, and if Jack Barnes is an “all-powerful leader,” then the SWP is also a cult. That appears to be Lynn Henderson’s argument.

But the Pope is not an all-powerful leader, infallibility notwithstanding. He is bound by Biblical teaching, along with the long history of the Church. He has no more power to ordain women than I do, nor can he single handedly change Church teachings on homosexuality. Such big decisions are reserved for Ecumenical Councils, such as Vatican II--these meet approximately every hundred years. The old saw--”the Church thinks in centuries”--is largely true. The Pope can’t lead it off a cliff, and hence in no way is it a cult.

Likewise, the Mormon church is frequently described as a cult. Certainly that was true in its early days--polygamy was an “abnormal or bizarre” practice. Founder Joseph Smith was arguably a cult figure, as was the church’s greatest leader, Brigham Young. But in abandoning polygamy in order to secure statehood for Utah, the Mormons sacrificed their cult. Today they have a system of governance that is at least as convoluted as the Catholic Church, and similarly bound by both text and tradition. No one person can inspire collective suicide.

These examples show that “cult” and “crackpot” are not synonyms. One can be the latter without belonging to the former.

So, in addition to “abnormal or bizarre” practices, we have a second criterion for a cult--namely the presence of a charismatic, all-powerful leader, who can lead the group off the rails if he so chooses. The SWP fails the “abnormal or bizarre” test. And I think it fails the “charismatic leader” test as well.

By jettisoning Trotskyism, the Party gave Jack more flexibility than he used to have. But Trotskyism, vague to begin with, isn’t much of an anchor anyway. Socialist Action, for example, seems to interpret it very flexibly. And despite partially rejecting its founding dogma, the Party is severely constrained by history. After all, The Militant has been published since 1928, and the Party can no more disown that than Catholics can the Bible.

This distinguishes Jack Barnes from real cult leaders, like Lyndon Larouche or Bob Avakian. Those grouplets report to no authority beyond their leader. Jack certainly has disproportionate influence, but more in the style of Gus Hall or the Pope, rather than like David Koresh.

So the SWP is not a cult. Then what is it?

The important answer to that question is old. The median age of Comrades must now be close to sixty. Jack himself is 72. This fact alone explains most of the changes that have happened in the Party. For 2012, the search term “Young Socialists” yields only four hits from The Militant website. Long gone are YS conventions and manifestos. Also vanished are the YS leaders. Samantha Kern left the group in about 2000. Jack Willey disappeared under mysterious circumstances in 2002. The staff writers for The Militant are mostly people I remember from my youth (including my former roommate).

Jack depends on regular, sustainer income. He can’t afford defections, but at the same time he needs a loyal, homogeneous organization (hence the expulsions). On the one hand Comrades need to feel that they are an Elite Group, members of the Anointed Vanguard Party, part of a continuous tradition that dates back to Leon Trotsky.

At the same time, this has to be very low-impact, feel-good socialism. No hard effort is demanded. Sub drives only require 3,000 subs--easy work for 400 Comrades. Gone are the days of arduous fraction work--retired folks won’t be getting union jobs in factories anyway. Pay your sustainer and sell a few subs, and you, too, can take credit for the Great Events Of Human History.

The religious analogy is the feel-good mega-churches, such as Rick Warren’s Saddleback Church, Bobby Shuler’s Crystal Cathedral (Hour of Power), or Oral Roberts’ Expect A Miracle. Like the SWP, these crusades promise free unicorns for everybody in the sweet bye & bye, without imposing any real sacrifices in the here and now. All glory--no cross. Or, all vanguard party feel good stuff--no Trotsky.

Even if its not a cult, the Party isn’t a political organization anymore, either. It has effectively forfeited any claim to power. What it really is is a church--a feel-good church where Comrades go for fellowship and “prayer.” Prayer, in this context, means a ritual (the branch meeting) that connects the “parishioner” with the meaning and purpose of life.

The Party recently opened a new branch in Lincoln, Nebraska. This seems mysterious, especially since the word “meatpacking” isn’t even mentioned in the announcing article. But it is entirely consistent with the Party as a feel-good church for old people. Lincoln is a smallish city with a low cost of living and a low crime rate. It’s a great place for retired Comrades living on social security, who will then still have some pennies left over for a sustainer.

The “church’s” Bishop, Jack Barnes, issues his biannual sermons in the form of political documents, such as Capitalism’s Long Hot Winter Has Begun. I’ve read some of these books, including that one. They are well-written, entertaining, sentimental, and flattering--Rick Warren couldn’t do better. They emphasize the importance of the current moment--how close we are to a pre-revolutionary situation--though he’s always careful to say that future timing can’t be predicted. Comrades, with their deep, proletarian understanding of Marxist principles, will soon be thrust into powerful, leadership roles. The Rapture is near at hand. In the meantime, nobody really needs to do very much--just make sure the printing presses are well-oiled and the Party is well funded.

Amen, Comrade. Amen.

Further Reading:

Thursday, December 27, 2012

Paying The Pastors

Louis Proyect has performed a useful service by publishing the 2011 compensation given Jack Barnes and Mary-Alice Waters. These are the two leaders of the Socialist Workers Party. Jack has been National Secretary (yes--they still use Soviet-style nomenclature) since 1972. Mary-Alice has some other role--historically she's been the boss of Pathfinder Press, but I don't know what her current role is.

Proyect's scoop is that these worthies were paid $94,400 apiece, presumably from Party coffers. Proyect exaggerates slightly in the title: "Cult Leaders Reward Themselves Handsomely." From this money they had to pay the full 15% payroll tax (no benefits were covered), plus they are responsible for their own health insurance, etc. (Though Jack is over 65 and thus qualifies for Medicare). Still, after taxes and benefits they probably each take home around $60K. It's definitely a living wage, but it hardly puts them in the 1% category. "Handsome" is too generous a term.

Still, Proyect's main point is true. There is nothing wrong with Party leaders getting paid. What does raise eyebrows is the surreptitious nature of the reward. Why the ruse to keep it a secret? The reason is pretty obvious. The SWP has two annual fund drives, during which Comrades are asked to contribute their "blood money" bonuses to the cause. These funders have a goal in the $100K range, or about $200K annually. Apparently most of this income is spent as compensation for Jack and Mary-Alice. What a rip-off! Especially since most Comrades make nothing close to $60K in after-tax income.

I don't think this was a problem when I was in the Party in the early to mid-70s. Jack had just been appointed "National Secretary," and hadn't been in office long enough to become corrupt. But there is something wrong when there is no leadership turnover in 40 years. The "democratic-centralist" model of governance invites corruption. I hazard that the real reason for the Socialist Action split in the 1980s was precisely for this reason.

So why do Comrades put up with it? It certainly can't be that they are unaware. But they derive social and psychic benefits from their membership, and that makes it worth the cost. In this sense Jack and Mary-Alice are like church pastors, most of whom get paid and a few of whom are spectacularly corrupt. Barnes and Waters tend their flock, fostering the illusion that together they will someday reach the promised land lead the world revolution.

Of course this is a self-limiting movement. A group of elderly men and women who have devoted their lives to a lost cause will not mind contributing a bit to the welfare of their leaders. But new recruits, who lack the sentimental attachment, certainly won't sign up for this. It's a raw deal, and hence no surprise that the SWP is not recruiting new members.

Sunday, December 23, 2012

The Militant Reads ZeroHedge

Suppose, by some fluke, you woke up on the right side of bed one morning. The sun was shining, the birds were singing, you were in love, and even the coffee smelled unreasonably delicious. Don’t worry--the financial blog ZeroHedge has a cure for this ailment.

ZeroHedge, whose masthead reads “On a long enough timeline, the survival rate for everyone drops to zero,” will never fail to give you the bad news of the day. If you read ZeroHedge instead of the morning paper, the morning sun, singing birds, and aromatic coffee will turn into black swans, crony capitalists, and rigged markets in coffee grounds. And Good Morning to you, too.

So is it any wonder that The Militant reads ZeroHedge? After all, they--no fans of capitalism--have been predicting the apocalypse for nearly a century now, and ZeroHedge simply fills in day-to-day on how the catastrophe is unfolding. That The Militant reads ZH is a reasonable inference from Brian Williams’ front page piece in the Christmas Eve issue. The article includes two graphs, both of which could have come from ZeroHedge, about employment in the USA.

The first shows the stagnant value of labor since 1980.

The second graph is entirely consistent with this. If the value of labor is declining, then the demand for employment also declines, and there will be fewer people in the workforce.

Employed persons as a percent of adult population.

Now there are at least four theories that explain this phenomenon:

  • Tyler Cowen’s Great Stagnation theory, which states that technological progress on the scale of electrification, mass transport, mass communication, and health care, has mostly ceased since 1970, leading to a stagnation in wages and standards of living. See Tyler’s book, here. The subtitle is “how America ate the low-hanging fruit.”
  • A theory (I don’t know who to attribute it to) that holds, contrary to the Great Stagnation, that there has been huge progress in the past couple of decades in automation. We are now automating drivers, lawyers, college professors, doctors, machinists, etc. That means there is a much larger demand for capital, and a correspondingly lower demand for labor. Hence labor gets devalued, even though the overall standard of living goes up.
  • The ZeroHedge theory (which does not preclude the others) is that fiat money is the culprit. Central banks, by running the printing presses non-stop since the Nixon administration, have distorted finance now to the point where markets no longer give honest signals. The villains are the “Bernanke put,” the “zero interest rate policy,” or “the right hand lending money to the left hand, and calling that economic growth.”
  • The Militant’s theory that capitalists suffer from a “declining rate of profit,” and in order to forestall this inevitable trend, they try to reduce the living standards of workers. They are doing this by increasing “productivity,” a term The Militant puts in scare quotes. They view it as a euphemism for speed-up, that is, capitalists just working their employees harder. This theory ignores automation or any other kind of technological progress.

Personally, I vote for the second and third items on the list. I don’t find the Great Stagnation theory plausible--there simply is way too much new stuff out there. Fracking technology alone is a huge game-changer. Add to that additive manufacturing, nano-technology, and the fact that even complex tasks like driving a car can be completely automated. It looks to me like our economic future is very bright.

On the other hand, the ZHers are right about fiat money. It is simply impossible to run a capitalist system without honest information about interest rates, stock prices, and government obligations. Central banks are inadvertently impoverishing the producing class (workers & capitalists alike) by destroying their savings and livelihoods. I don’t buy the conspiracy theories that populate the pages of The Militant and, on occasion, ZeroHedge. I don’t think Ben Bernanke is either evil or stupid. But he is trying to do the impossible, and it remains impossible.

The Militant’s solution to fiat money is socialist revolution. If there is one economic fact we know for certain, it’s that socialism doesn’t work. It never has, and never will. This is a non-starter.

ZH’s solution is what they sometimes call the Great Reset. While short of the apocalypse predicted by revolutionaries, fiat money will simply collapse, as has happened many times before--from Argentina to Zimbabwe, famously including the Weimar Republic. This, say the ZHers, will happen to the dollar, the Euro, and the Yen. People will lose their savings, trillions of dollars of assets will be wiped out, and we’ll all be a whole lot poorer.

But the very next morning the sun will shine, the birds will sing, we’ll still be in love, and somebody will be selling a really good cup of coffee at an amazingly low price. Capitalism will thrive.

Friday, December 14, 2012

The Problem Of Global Warming

Socialist Action (SA) has just published the second installment of documents from its August convention, entitled How Can We Combat Global Warming? (For comments on the first installment, see here.)

There is one paragraph in the document that is unambiguously false.

Science gives us not only dire warnings but hopeful options of clean, renewable, safe, and largely free energy sources—solar, wind, tidal, geothermal, hydro, etc.—that can replace our dependence on fossil fuels. Combined with sensible conservation, and reduction in wasteful consumption promoted by capitalist marketing, restructuring our economies around these alternative fuels can give us a shot at stopping climate change short of irreversible disaster.

The untrue part are the proposed options--there is no conceivable means by which solar or wind will ever supply more than a tiny fraction of the world’s energy. Despite massive government subsidies in the US, and even more so in Germany and Spain, these technologies simply do not work outside of niche markets. And they never will work--the energy storage problem is profoundly intractable. 

SA’s thesis is that we are prevented from using cheap, clean, renewable energy because of the profit earned by the big oil companies, who will now do anything to protect their undeserved rents. But this cannot be true, as there is no cheap, clean, renewable alternative. The maligned oil companies are actually providing us with the cheapest and cleanest possible energy. That energy may or may not be cheap or clean enough--perhaps fossil fuels really are a problem that we need to deal with. But it is not helpful to paint it all as some kind of global conspiracy to dirty the planet in pursuit of private profit. That is just not the case. Oil companies earn money because they provide consumers with the energy they need at a price (both monetary and environmental) they can afford.

So the socialist solution is simply to abolish the evil oil companies, and replace them with renewable energy and free unicorns. This is a dream world. Sadly, the dream is not restricted to Trotskyist grouplets, but has corroded the environmentalist movement generally. I have faculty colleagues who are just as enamored of the conspiracy theory as SA. Abolishing the oil companies would not only lead to a dirtier world (think Haiti), but also to the mass impoverishment of hundreds of millions of people.

Given a choice between socialism and oil companies, I’ll take Exxon/Mobil any day.

Let me say a few words about why some skepticism about the global warming thesis is in order. A comparison with evolution is instructive.

Evolution, famously, makes no predictions. No evolutionist will ever say something like “I have a computer model that shows that within 200 years humans will have evolved horns on top of their heads. Within 95% confidence limits, those horns will be between 1 cm and 5 cm long.” Any so-called “scientist” who offered such a prediction would be laughed out of town.

Evolution can’t even predict the past. There are no computer models that show how we inevitably evolved from apes, or how apes evolved from monkeys. The processes involved are said to be “random,” but that just means that the chain of cause and effect is so complicated that we can’t follow it. It gets approximated as a random distribution.

Evolution does say is that some things are impossible. Human beings, for example, will not, within the next 100 years, turn into angels. Thus the Marxist view of human nature--that we can radically change it simply by altering the economy--is just wrong. Human nature might change, but if so that will happen over many generations, and probably for reasons that have little or nothing to do with the economy.

So now come the climatologists with complex computer models that purport to predict the climate over the next 100 years. These models are heavily parameterized and very complicated. A sufficiently complicated model can be tweaked to provide any prediction you want. In technical language, they are unstable with respect to the parameter space--a small change in parameters can result in a large change in the outcome. Computer models of complex systems have no predictive value whatsoever.

This doesn’t mean models are useless. They offer considerable explanatory value--that is, one can identify the important factors in a particular circumstance. As such, they can suggest experiments or provide understanding. But they are not valid for predicting either the future or the past.

Case in point are models predicting the stock market. They work--until they don’t work anymore, and then they fail catastrophically. Ask the principals of Long Term Capital Management for how that works.

Unlike evolution, which one can establish via multiple arguments, none of which depend on computer models, proof of global warming depends on predictions coming true. That the computer models mimic the past is self-evident--the models are fit to the past. And with enough parameters one can mimic anything, even the past. But it is highly doubtful that the models correctly predict the future. Thus the climatologists’ assertion that the globe will heat up by 20C in 50 years is dubious. If it does happen it will likely be coincidence, not because the predictors were so smart.

Global warming remains a reasonable hypothesis. That human activity is now of sufficient scale to alter the climate is a sensible idea. Some people speculate about our evolutionary future. Others, like Richard Muller, speculate about our future climate. But both of these are at best educated guesses. We won’t know what the temperature change will be over the next 50 years until 2062.

The financial world talks about “black swans,” i.e., a conjunction of circumstances that lead to the cataclysmic collapse of markets around the world. The events of 2007 are called a black swan. Black swans are always a threat, but they’re unlikely. Most people go through life expecting they won’t happen.

Our climate may encounter a black swan. It may be that the world really does heat up, and the consequences are all bad, and society can’t cope, and we’ll all die a miserable death. This is the scenario painted by the most ardent climatologists and Trotskyists. For them, the black swan is not only possible, but probable. I call this the inevitable black swan theory.

But even if global warming is true, the black swan is not inevitable. It isn’t even probable. It is unlikely that everything will all go wrong at the same time. There is plenty of time to deal with global warming--a phenomenon that will likely be modest, partly (or mostly) beneficial, and tractable. People in the future will both know much more about the problem than we do, and will have many more tools at their disposal to deal with it.

The best course of action for dealing with global warming today is to do absolutely nothing at all.

Sunday, December 9, 2012

In Principled Opposition To Gangnam Style

The South Korean rapper, PSY, has released a viral video entitled Gangnam Style. It's been viewed by nearly a billion people worldwide. If you're one of the remaining five billion who hasn't seen it yet, follow the link. It's catchy and very well done. Plus it's a good dance tune.

Gangnam is a neighborhood in Seoul roughly equivalent to our Beverly Hills. It's where the movie stars and the rich people live--home to the 1%. Gangnam Style aspires to a life of affluence, ease, and sex with beautiful women--a dream which apparently much of the world shares.

But not, it seems, our comrades in the Trotskyist movement. All of the grouplets I follow have no use for Gangnam Style, but instead offer "critical support" to the Democratic People's Republic Of Korea (DPRK), aka North Korea. Critical support is a uniquely Trotskyist term of art, and refers to countries that have done the hard work of socialist revolution, but have subsequently degenerated under Stalinist mis-leadership. Trotskyist parties compliment such societies on their hard work, and mostly as an afterthought criticize the Stalinist deviation from pure socialism. In this view, the DPRK represents a step forward for human progress--quite unlike the lewd, crude and bourgeois Gangnam Style.

Socialist Action reported on Kim Jong-Il's death with this lede:
The death of Kim Jong Il, on Dec. 17, caught the attention and imagination of the capitalist media hucksters. His death, which wasn’t reported for two whole days, was in many ways symbolic of his life. It was a life that, through the lens of the Western media, was obscured by secrecy and unflattering portrayals. This distorting lens is designed to sell American workers on U.S. intervention in Korea.  
Hmm--Kim Jong-Il's evil reputation is principally an artifact of the American media? This hypothesis is just silly.

Half way through the article we finally encounter the "critical" part of critical support. "There is no denying the fact that North Korea is indeed a brutal Stalinist dictatorship that represses its own people and puts the interest of the ruling bureaucracy and its armed forces above all else. Nevertheless, it is not the job of the United States to police the Korean peninsula."

If Socialist Action merely excuses the DPRK, The Militant goes whole hog. Their 2009 Convention drafted an official statement, which opens: 

September 4, 2009
Kim Jong Il
General Secretary
Workers’ Party of Korea
Democratic People’s Republic of Korea
Dear Comrade Kim Jong Il,
The Socialist Workers Party and Young Socialists send revolutionary greetings on the 61st anniversary of the Democratic People’s Republic of Korea.... We salute the DPRK’s recent initiatives on cross-border transport, family reunions, and other matters."
The letter concludes

The Socialist Workers Party and Young Socialists congratulate you on this 61st anniversary of the Democratic People’s Republic of Korea. We welcome the DPRK’s latest initiatives to advance peace and national unity in Korea. And we stand together with our brothers and sisters in Korea and worldwide in demanding: End the sanctions against the Korean people! Stop the piracy against the DPRK’s ships and cargo, under United Nations or any other auspices. U.S. troops, “anti-ballistic missile” ships, and weapons—conventional and nuclear—out of Korea and the Pacific!
Korea is one!
Steve Clark
Steve Clark is a long-time leader of the SWP whom I knew quite well from my time in Chicago.

I am reminded of this by an article in this month's Commentary (Jay Lefkowitz, Escaping from the North Korean Stalemate, December, 2012, p. 39). The article describes the miserable life of a certain Shin In-Geun, born and raised in a Democratic People's Republic prison camp, who witnessed the executions of his mother (hanging) and brother (firing squad), before himself being tortured over burning charcoal until he passed out. This, apparently, is Pyongyang Style, and represents progress toward our socialist future. Uniquely, Steve Clark and his Trotskyist comrades prefer this proletarian, consciousness-raising experience to the socially and morally degenerate ideas of Rapper PSY. The technical term that Trotskyists use is "human progress." They're welcome to it.

PSY doesn't have completely clean hands. He participated anti-American protests in the past, ungrateful for our country's sacrifices on his behalf. He's had the decency to subsequently apologize. Whatever mistakes Truman and MacArthur may have made sixty years ago, the USA was surely on the side of angels.

Trotskyists are fools (or worse). PSY may be ungrateful, but he is an entertainer and one needn't take his political views too seriously. As for me, I'm a fan of Gangnam Style.

Friday, December 7, 2012

A Socialist Misrepresentation of a Capitalist Crisis

This post is in response to an article in Socialist Action (SA) entitled A Socialist Answer To Capitalist Crisis. The article is Part One of an abridged version of the Draft Political Report, a product of the Socialist Action 2012 convention.

It is difficult to know where to begin. The article is a mish-mash of fact, fiction, non-sequitur, and sloppy reasoning. Indeed, every sentence could generate an entire essay explaining why it is not true--but I don’t have the patience to write so much, nor would I expect you to read it. So this post is not comprehensive, and is instead limited to more egregious errors.

There are two fundamental facts that the article gets wrong. First, it wrongly claims that working people are, as a long term trend, being impoverished by capitalism. And second, it wrongly attributes the source of profit in today’s economy.

While the article never comes out and directly says it, the implication is that capitalism has made millions of people poorer. For example, they say “Germany, the most economically powerful European nation, has experienced a steady decline in wages.” And, “the rise in the GDP of the BRICS nations—Brazil, Russia, India, China and South Africa—masks the impoverishment of the great majority of the populations of all these countries.” And again, this time quoting an entire paragraph,

China’s new generation of  “middle-class” consumers, touted by the bourgeois press, is countered by hundreds of millions pressed into a government-controlled transient internal migrant workforce, with virtually no rights. Eighty percent of Beijing’s industrial workers, for example, are migrants, mostly young women from the countryside, who labor at sub-minimum wages aimed at satisfying the competitive needs of Chinese and world capitalism. Half of China’s multi-national corporations are U.S.-owned.

Now the truth of these statements depends somewhat on what timeframe one is looking at. Certainly, over the past five years, some of these points are arguably correct, as would be true during any recession. The article is vague about timeframes, which makes it difficult to pin down. But I think one has to look over a longer period than just five years. Let’s instead use the beginning of Deng Xiaoping’s reign in China as the benchmark--he assumed office in 1978, or 35 years ago.

And here is the unavoidable truth: since 1980 more people have been pulled out of poverty in China than ever before in human history. Per capita GDP has increased approximately 30-fold since 1980. Gone are the mass famines, the shoddy Mao suits, the candlelit nights, and the back-breaking, agricultural labor. Instead. China has modern cities, a “middle class” of 250 million people, a working class with food, real clothes, and electric lights, a transportation network, access to the Internet, and is part of the world economy. Of course China still has problems, and of course the current financial crisis makes things harder, and of course they will not progress at anything like the same trajectory in the future (how could they?). But this undeniable fact is irrefutable--because of capitalism and globalization, China is vastly, vastly, vastly richer today than it was 35 years ago. SA’s claim to the contrary is simply absurd.

Likewise, Brazilian per capita GDP has nearly doubled since 1980, India is richer by a factor of three, and wealth has increased four-fold in the USA. The US, however, is a bit of a laggard. Global per capita GDP has increased by almost a factor of five. SA’s claims about China and the world, that “the capitalist-created small layer of ‘middle class’ or higher-paid worker/consumers, usually in the range of 10-15 percent, promoted to create the semblance of an internal market, has been more than offset by the immiserization of the vast majority,” is patently, obviously, and glaringly false. Capitalism and global trade are simply good for children and other living things.

But even the increases in per capita GDP understate progress. The numbers have been corrected for inflation, but over 30+ years inflation is only crudely measured. Corrections fail to take account of technological progress. Consider the following list of things that didn’t exist in 1980: Shenzhen, Pudong, Baidou, Google, statins, hybrids, fuel cells, Internet, parallel processing, Amazon, Acer, Hyundai, Arcelor, FAX, e-mail, smart phones, driverless cars, Watson (of Jeopardy fame), 3D printing, nanotechnology, fracking, GM foods. Who, in 1980, could have guessed that the richest, non-oil-based economy in the world in 2012 is...Hong Kong! All of these are products of capitalism, and all of them make our lives better, cheaper, richer, happier, healthier.

SAs claim that capitalism impoverishes working people is not true.

A second flaw in the Draft Political Report comes from two sources. One is straight from Karl Marx himself, namely the labor theory of value. The second is Lenin’s book, Imperialism: The Highest Stage of Capitalism (now available on Kindle for $5.22). The former theory states that the value of a product is exclusively invested labor, arbitrarily ignoring the other two factors of production, namely capital and raw materials. The latter theory asserts that the rich countries remain rich only by extracting resources and cheap labor from “neo-colonial” countries. Lenin’s theory posits the global economy as a zero-sum game--if I win, then you must lose. Another way to phrase it is as theft--”imperialists” steal from the “neo-colonial” countries.

Thus, according to SA, US-China trade cannot be to the benefit of both countries--if the US benefits, then China must be “immiserated.” Of course this is obviously false--why would China trade with the US if there were no benefit for China? Indeed, we have already described the stunning benefits which China has reaped from global trade. Trade, almost by definition, benefits both parties. If I buy an tomato, I get a tomato and you get some money. We’re both better off.

In SAs particular model, what US imperialism is stealing is labor. By way of example, the article cites Apple and the iPhone:

The recent exposure of Apple Computer’s super-profits from the exploitation of Chinese workers, on a scale unimagined in the past, shocked more than a few. Apple’s China-based iPhone and iPad factories, employing some 1.2 million workers, were recently exposed as classic super-low-wage sweatshops, with workers forced to labor endless hours on demand under unsafe conditions, including breathing in poisonous chemicals.

The moral, as I read it, is that US profits (and, specifically, Apple’s profits) arise only from the gross “exploitation” of Chinese labor. But I think SA has cause and effect precisely reversed: Apple hires Chinese labor because Apple is profitable, and not the other way round.

The error in SA’s reasoning is they fail to notice that the iPhone is not a commodity. It is, instead, a custom product uniquely designed by Steve Jobs that turns the traditional cell phone into something completely different--a smartphone. Even today, the iPhone is priced well above competing smartphones as it delivers high quality, great style, and cool status. The profit margins are correspondingly huge--sufficient to hire 1.2 million Chinese workers.

For a high-margin item, the per-item manufacturing cost is not a significant issue. The iPhone only costs about $8 to manufacture, even with 1.2 million employees. But as smartphones become a commodity the assembly cost will become significant. Per-item cost is reduced by capital investment and automation--so expect the number of employees to fall dramatically in coming years (or months). Today Apple can afford all those employees only because the iPhone isn’t a commodity and has a value well beyond the cost of production. The labor theory of value is precisely wrong.

And this leads to the final point. The article states that:

It is increasingly obvious to workers everywhere that the only way for capitalists to compete on world markets is to adopt the Chinese “model.” In the U.S. this means the classic race to the bottom—the off-shoring of jobs and the use of low-wage immigrant and near slave-wage prison labor.

If the labor theory of value were the only truth, then this paragraph would follow. But there are at least two caveats to the theory. One, that we’ve just mentioned, is that it only really applies to commodities--items that compete only on price. The second is also important, and that is the capitalist can vary the ratio between capital investment and labor--i.e., he can reduce labor costs by investing in automation. For bulk commodities automation reduces the per-item cost. This is why primarily low-wage jobs are offshored; for those the benefit of automation is the smallest.

And here is the clinker: the ability to automate jobs has increased exponentially over the past ten years. Computers have already automated the secretary, the receptionist and the travel agent. Lawyer jobs are now computerized and the job market for that profession is going through the floor. Doctors are next in line--there will be far fewer doctors in the near future. Likewise, college professors are about to be computerized away. Google has developed self-driving cars, and has signed an agreement to begin replacing New York Taxicabs in 2014. Within a few years cab drivers will be a job of the past--followed soon by truck drivers. Fighter pilots are already extinct--can commercial airline pilots be far behind?

3D-printing, also known as additive manufacturing, will revolutionize the way things are built. No more rivets, no more welding, no more assembly, no more parts manufacturers--most of these jobs will disappear. The 1.2 million Chinese workers whom SA feels so sorry for will really be miserable when they lose their jobs, replaced by a few dozen employees in Pittsburgh who will “print” iPhones out by the millions.

The global financial crisis is serious. It will impoverish millions and set the world back by a decade or more. But slightly longer term there are untold riches on the horizon. My grandchildren (should I ever be so lucky) will be vastly richer than anybody alive today.

Thursday, December 6, 2012

About this blog

My interest in Trotskyist politics dates from my membership in the Young Socialist Alliance (YSA) and Socialist Workers Party (SWP) from 1969 until about 1977. My politics have since changed. In 1976 I voted for the SWP presidential ticket (Peter Camejo & Willie Mae Reid). In 1980 I voted for Jesse Jackson, then running as a 3rd party candidate. And in 1984 I cast the best vote I ever cast--I voted for Ronald Reagan. And I've never looked back since.

Well, I guess I have looked back. I've always followed the SWP's newspaper, The Militant. and in the mid 90s I hosted a blog (then called an "e-zine") called The Anti-Militant. That was posted at the long since defunct site, Geocities, and was on-line for maybe a couple of years. Unfortunately, I don't believe I have an archive of those articles, some of which were actually pretty good. I briefly resurrected the Anti-Militant, but nothing really came of it. It wasn't strictly about Trotskyism.

So now comes the third try. While this blog will be exclusively about Trotskyism, my interest is now broader than just the SWP, whose paper has gotten rather boring. More interesting are split-offs from the SWP, Socialist Action, Socialist Viewpoint, and Solidarity. Many of the people in these latter organizations were my comrades back in the 70s. I will also try to cover the Worker's World group, arguably the most successful Trotskyist organization in the US. But they split from the SWP before I joined, so I have no personal contact with them.

Anyway, as much as I oppose Marxism, I enjoy Marxist polemics and conversation. That's really what this is all about. None of these organizations will have any impact on America's future, so this effort is all just for fun. Nothing important here. 

Here are some ground rules:
  • These people were my comrades and friends back in the 1970s. I like them. I wish them no personal ill and I don't want them mistreated. Thus ad hominem or insulting remarks are off-limits. On the other hand, vanguard party grouplets frequently descend into hilarious self-parody, so you'll have to excuse occasional ridicule.
  • Some words are not helpful and no longer mean anything. They cannot be used in this blog without very good reason. Such words include Hitler, Nazi, Fascism, KKK, lynching, racist, etc. Normally I'd include Communist on this list, but since comrades claim themselves to be communists, we have to use that term.
  • Most posts are 1200 words or less, and none will ever be longer than 2000 words. Brevity is clarity.
I hope to post something once every week or so. You can reach me at dan (at) dankingbooks {dot} com.