Nazis

Image: dpa | Sebastian Willnow, reprinted by Left Voice

I have to take issue with the headline on Nathaniel Flakin's recent article in Left Voice, entitled How East Germany Got Overrun by Nazis.

The headline makes no sense. Presumably the last person to voluntarily join the National Socialist Workers (Nazi) Party would have done so by 1943. It's hard to imagine that anybody younger than, say, 25 would have had the political awareness and gumption to consort with what was by then an overwhelmingly unpopular movement. A 25-year-old in 1943 will have been born in 1918. Our new recruit would today be 105 years old.

Yet, according to Mr. Flakin's headline, East Germany is today overrun by 105 year old Nazis! Amazing! And it can't possibly be true.

Silly me! Of course Mr. Flakin doesn't mean literal "Nazis." Instead he's using the term metaphorically--but then it's very unclear precisely what he does mean. Probably the word just refers to anybody Mr. Flakin doesn't like, and since he doesn't like anybody outside of his own small sect, then of course East Germany is "overrun by Nazis."

In the essay itself he uses the term "fascist" as a synonym for "Nazi." But fascist is also a weasel-word, and as a substitute for Nazi it's rather a poor one. Fascism certainly has to include the founder of the tendency, Benito Mussolini, whose sins are well-known, but who did not commit mass murder. He wasn't even antisemitic.

Mussolini was not strongly antisemitic. He had close ties to Italian Jews, including several early founders and members of the Fascist movement. He was also strongly affected by two Jewish women: Angelica Balabanoff, from Russia, and Margherita Sarfatti, an Italian. After Mussolini rose to national power, he reassured Italian Jewry of their safety in an interview with the Chief Rabbi of Rome.

Mussolini considered himself a socialist, and about the only thing he agreed with the Nazis on was the word "Socialist" in their title: National Socialist Workers Party. His wartime alliance with Hitler was mostly one of necessity.

So while the Nazis were fascist, they were their own unique and especially horrible brand, rather analogous to how Stalinism and Maoism are akin to communism. Hitler was sui generis--the term fascism doesn't give him enough credit. Using Nazi as a synonym for fascist is remarkably imprecise and unjust.

My sister and I visited Berlin for a week last June for a family reunion. My father was born there, and I lived there as a teenager, attending high school (Gymnasium). The reunion was with a group of second cousins, all of whom had parents born in Berlin, and all are in some fraction Jewish (none sufficiently so to be recognized as such by an Orthodox rabbi). Some of us (like me) were born abroad, others were born in Berlin but left the city before the wall was built, and yet others were raised in the GDR. We are now all in our 70s, slightly older than Angela Merkel, who is only 69.

I also spent a day with a classmate from high school--a native Berliner who has lived in the City his entire life. Along with some time visiting my sister's friends.

Those Germans of my generation--my cousins, my classmates, my sister's friends, and millions of others--confronted a dauntingly difficult task. They're the people who had to clean up after the Nazis--I mean real Nazis, not the imaginary ones of Mr. Flakin's invention. And in this endeavor they've been remarkably successful. They have commemorated the Holocaust. They have honored their Jewish exiles (they literally begged my father to take up his German citizenship--he refused), they built museums, they hosted Nuremburg trials and hunted down Nazi war criminals, and they found a way to work with Israel. They made it illegal to be a Nazi, and frankly--at least among my generation--Nazism is as dead as a doornail.

Short of resurrecting seven million people, it's hard to see how they could have done any more to atone for the sins of the Nazis.

Most important, they built the Bundesrepublik (Federal Republic). It's not perfect--not even close. They have something akin to a constitution (Grundgesetz) but it isn't really a constitution, and is in any case not the work of inspired genius that is the American Constitution. They're not as committed to free markets as I would prefer, they've been unreasonably (if understandably) pacifist, and their dedication to the Green agenda is as unreasonable as it is foolish. Still, compared to any plausible alternative, the Bundesrepublik has successfully provided peace and prosperity for Germany for the past 75 years, and by extension for all of Europe.

But Mr. Flakin is not impressed. He writes (GDR refers to former East Germany),

It wasn’t the 40 years of the GDR, but rather the 30 years since then, that saw the rise of fascist forces. After the Wende, when the capitalist West swallowed up its smaller neighbor, the planned economy was sold for scrap. That left millions of former GDR citizens poor, atomized, and open for authoritarian fantasies. ...

Along with an economic shock doctrine, the East also got a new state apparatus, with intelligence agencies that had been founded by Nazi war criminals. For a recent example, look at Hans-Georg Maaßen, a former head of the Verfassungsschutz who has since outed himself as an antisemitic conspiracy theorist, raving against “globalists” who secretly control the world. During the 1990s, that agency funneled lots of money to Nazi groups across the East — if you believe their version, they had to fund Nazis in order to know what Nazis were up to.

The first paragraph is arguably true. The East German economy largely was scrap--it's been widely reported that the infamous East German car, the Trabi, was worth less than the cost of raw materials required to make it. 

The second paragraph is at best a gross exaggeration, if it is true at all. That one bureaucrat (Mr. Maaßen) out of thousands turns out to be a nutcase is not much of a surprise. And one has to ask if serious money was ever given to "Nazi" groups in E. Germany--though if "Nazi" is defined as anybody Mr. Flakin doesn't like, then it's likely true.

Does any of this diminish the serious and decades-long efforts of Germans of my generation to clean out the Nazis? No it does not, and I'm insulted by Mr. Flakin's cavalier dismissal of their efforts.

Mr. Flakin looks to be the age of my children--thirty-something. He is not responsible for the Nazis, the Holocaust, the World War, or any of the other sins perpetrated by his grandparents or great-grandparents. On these he is as innocent as my children.

But by the same token he's not responsible for the clean-up effort afterwards. This was done by his parents--and he should give them and their generation credit. He does his country a great disservice by not doing so.

Mr. Flakin picks on a poor fellow named Hannes Loth--apparently the second coming of Hitler himself--recently elected mayor of a small town in Eastern Germany. Mr. Loth represents the "far right" Alternative für Deutschland (AfD) party--most popular in Eastern Germany.

The AfD supports some positions that I agree with. I do think Wokeism is a problem and needs to be dealt with. I also think that "climate change" is at best grossly exaggerated, for which the proposed cures are far worse than the disease. I disagree (but am sympathetic) with his views on immigration. These are all public policy issues on which reasonable people can disagree. No opinion on any of these topics will define you as either a communist or a fascist. Democratic institutions, such as exist in the Bundesrepublik, are the appropriate venues in which to have these debates.

But what to me is beyond the pale is when somebody objects to the Bundesrepublik altogether. Insofar as AfD really is "far right", it's because at least some of their members want to end the Republic and reestablish some sort of dictatorial rule.

And I object to Mr. Flakin for the same reason--he's against the very concept of a democratic Republic. I'd put him in the same category as the AfD.

The Bundesrepublik not only cleaned up the Nazi shit, but as Mr. Flakin notes, they also had to deal with the Stalinist-Commie shit when the wall came down. On this front they've been somewhat less successful, as the dichotomy between East and West Germany indicates. The old GDR was not as bad as Hitler--not by a long shot. They probably weren't even as bad as Stalin. I'd put them in a category like Mussolini--whether you want to call them fascist or communist doesn't really matter. The difference is only in fine points of Marxist theology.

That Mr. Flakin writes for Neues Deutschland, named after the former East German government mouthpiece, shows what he thinks of the Bundesrepublik. He opposes the hard fought, hard won efforts of my generation to remake Germany into a civilized country. He should be ashamed of himself.

Further Reading:

• Cozzarelli on Chicago's Mayor Race
• The Harm Reduction Team
• Left Voice and the SWP

 

Socialist Action Goes AWOL

The very first post on this blog was commentary on Socialist Action's (SA) 2012 convention. It's a rather dense dissection of SA's understanding of economics. Everything was new back then--I took great pleasure in the argument.

Two years later I blogged about the 2014 conclave. This covers much the same ground as the 2012 piece. The convention concluded poverty was increasing in Europe--I put that exaggerated claim into perspective.

Then I commented on the 2016 convention, criticizing them for the seeming disconnect between the enormous economic crisis supposedly engulfing the world proletariat, compared to the pathetic response of the Party. The imminent destruction of the planet/immiseration of the working class/irremediable crisis of capitalism--all those challenges were to be met by increased sales of their print newspaper, a $25,000 fundraiser, and the sorriest presidential campaign ever launched in American history.

Finally, in February, 2017, I responded to the Declaration of a Faction Fight within the Fourth International, where SA proclaimed its heroic stand defending a proletarian outlook. I accused SA of setting "the bar for success very low." Definitely an understatement. We have, by the way, heard nothing about the faction fight since.

So now we come to 2018. At some point in October, SA announced that their paper would be taking a short break to allow for a convention later that month. The announcement is no longer on the web, but to the best of my memory the convention was held in the 3rd or 4th week of October. For most previous conventions the event was reported at length within a week or two after the meeting.

This year? Crickets. Not a word so far.

Now maybe it will still come--if so, I'm happy to eat my words--I'd love to find out what SA has planned for the coming period. Nevertheless, I'm getting worried. I'm afraid the Party is crawling into a hole and hiding from the limelight. Why?

One possible reason is that SA has become increasingly incoherent. That certainly seems to be the trend from 2012 to 2016. They've lost their Marxist bearings. They have no unique perspective on world politics. They're lost at sea when it comes to both strategy and tactics--and they're ashamed of themselves.

Or it could be there is a big faction fight in the organization and they haven't figured out what to write yet. I doubt that.

Or they just don't like criticism--not that they get very much of it. As far as I know I'm the only blogger who pays them any attention at all. My reach is pretty small, so it seems a stretch to think they're afraid of me. Yet they surely have gotten very secretive of late--they no longer publish locations or phone numbers of their branches, nor have they said anything about attendance at any of their conventions, and now they don't even want to say what they talked about at their meeting. It looks downright paranoid.

A pair of recent issues indicates the confusion. For starters, there has so far been no analysis of the Yellow Vest protests in France. SA is not alone--so far on my Beat only The Militant has covered the protests (here and here). Part of that is the Trotskyist news cycle is very slow. But I think the Yellow Vest movement must be especially embarrassing for Socialist Action.

The Yellow Vests put paid to the idea of a "Vanguard Party." The movement has no leadership--it is an entirely organic creation of social media. It's not organized around any coherent platform, much less the uniquely correct program sanctified by The Revolutionary Party. As far as I know, no Trotskyist organization of any denomination has played any role in the movement whatsoever. All SA can do is kibbutz from the sidelines.

Then the movement is a "weird" coalition between Left and Right--supported by both the National Front and far-left movements. I say "weird" because it's only weird from a Marxist perspective. Us normal folks see a confluence of interests between far Left and far Right--you both support more government intervention in the economy. In France they call that dirigisme. It's the very opposite of Trumpism.

Finally, and most disturbing for SA, is the movement's anti-environmentalism. The proximate cause of the riots was the imposition of a carbon tax (The Militant calls it a gas tax), ostensibly imposed to prevent global warming. Apparently French workers will have none of this global warming nonsense, especially since "fighting" it involves a severe hit to their standard of living. Can't say as I blame them.

SA, meanwhile, has gone whole hog for the most crackpot version of environmentalism. For example, in a recent article by Marc Rome on the role of the electric utility PG&E in "causing" the wildfires in California. The company is now subject to potentially bankrupting lawsuits from fraudster lawyers trying to make a killing.

SA apparently thinks those lawyers are heroes. After all, forcing the electric company out of business will certainly save on emissions--everybody will be cutting back when their power is turned off. And California has a warm climate, so what do all those people need electricity for anyway? Especially given the catastrophic threat imminent global warming poses.

Like the lawyers, SA is convinced the PG&E caused the fires. Now it may be true that the company caused the spark that lit the fires, but that's hardly the big story. According to Mr. Rome, the real cause is "climate change," that ill-defined, protean boogeyman that's about to destroy us all. SA apparently thinks PG&E singlehandedly caused "climate change," and therefore should pay the full bill.

So let's double or triple everybody's electricity rates. That seems to be SA's solution. Because somebody has to pay all those lawyers, and that somebody is gonna be rate payers. Or taxpayers, which is the government's solution. Mr. Rome's article is entitled California governor signs legislation to bail out utility that sparked deadly fires.

Actually, it's not PG&E that's getting bailed out. It's the shyster lawyers. SA is taking the side of lawyers--that's not very revolutionary of them. Here I thought they were supposed to be defending the interests of the working class?

Further Reading:

• Proyect & Schreiber on the 2018 Election
• Bangladesh Factory Disasters are Good for Capitalism
• New Media: Socialist Action's Second Best Friend

Book Review: The Absent Superpower

So I'm on a Peter Zeihan tear this month--this is the third post in a row about that author. But now is the end of it, for as much as I agree with his premises and some of his conclusions, his recent (2016) book goes off the rails.

The first section, entitled Shale New World, is worth the read no matter what you think of Mr. Zeihan's opinions. It is a concise and clear description of the US and global shale industry, including relevant facts about technology, geology, chemistry and finance, all very clearly explained. In particular, my Trotskyist friends would do well to read this--not that it will change their minds, but at least they could argue their environmental extremist positions knowledgeably.

American frackers have worked hard to ameliorate the environmental problems of their trade, also making it cheaper in the process. For example, there has been much talk about the amount of water used in fracking. That was never as big problem as it was cracked up to be--the US industry uses less water American golf courses. Still, especially in arid areas, water had to be trucked to the site, and the resulting waste water was no longer usable by humans or agriculture.

What frackers have since discovered is that accompanying shale oil is also a layer of water far below the shallow ground water that makes up important aquifers. This deep groundwater is brackish, meaning it can't be used as fresh water, which is an advantage to frackers since they need to add salt to frack-water anyway. Further, organic material--algae, etc.--is a problem and aquifer water needs to be filtered to remove that. The deep groundwater contains little or no life, which saves money. Finally, they drill through the layer on their way to the oil, so water can be extracted on site, eliminating trucking costs.

While shale producers recycle as much wastewater as possible, eventually there is a disposal problem, which remains the largest environmental issue associated with fracking. Accordingly frackers have worked hard to make their solutions as non-toxic as possible. Today they restrict themselves to using non-toxic, consumer products as additives. Apparently there are YouTube videos showing frack executives drinking frack water!

The result is that the American frack industry is profitable at $35/barrel, competitive even with Saudi Arabia.

A second important point is that fracking is overwhelmingly an American industry, and Mr. Zeihan explains why that will remain true even two or three decades into the future, despite the fact that there are massive shale reserves elsewhere on the planet.

And that leads to the remainder of the book, which reads very much like a war thriller. It's as compelling as fiction largely because it mostly is fiction--at least in my opinion.

I accept Mr. Zeihan's two premises: 1) North America is already energy independent, and does not depend on global trade for oil; and 2) the United States no longer has any compelling reason to remain engaged in world affairs outside the Western Hemisphere, and therefore will no longer police global sea lanes or enforce international borders. 

The result will be the Great Disorder as the rest of the world fails on short notice to establish their own order. Mr. Zeihan predicts three wars, all occurring roughly simultaneously. The Twilight War, centered around the Baltic Sea, will pit Russia against Scandinavia, Poland, England, and probably Germany. Related to the Twilight War will be Russia's effort to secure its southeastern flank against Turkey by occupying land to the banks of the Danube in Romania.

The second war is the (Next) Gulf War which will pit Iran against Saudi Arabia, precipitated by the withdrawal of American forces from the Persian Gulf. This will lead, in extremis, to the complete de-civilization of the entire Middle East, including the destruction of the electricity network from Oman to Lebanon. It will result in 60 million deaths and/or refugees.

And finally is the Tanker War, caused by the closure of the Persian Gulf, along with most Russian oil exports. The Tanker War will be a struggle between China, Japan, Korea, and Taiwan to secure whatever little oil is left on the open market, and to protect their ships from the depredations of enemies, pirates, and third-party countries such as India that will engage in privateering.

Of course all of this could happen--anything could happen--but it's not likely. When I mentioned these scenarios to a friend of mine, he immediately asked Don't any of the countries have any diplomats? It's a good question--Mr. Zeihan's scenario assumes they don't and they all go for absolutely the worst possible outcome.

Let's take the Twilight War as an example--so named because Russia is in terminal demographic decline and has only a few more years to wage war of any sort. It will spend this opportunity attempting to recover the defensible boundaries of the former Soviet Union. Of course they will probably lose, and either way their demography will still decline, so this really doesn't make too much sense.

It's easy to come up with a diplomatic solution to the Twilight War. Germany, far from fighting Russia, has every reason to ally itself. In return for a guaranteed supply of oil and access to the Russian market, Germany will guarantee Russian borders. Indeed, Germany can guarantee all the borders in the Baltic region. As Mr. Zeihan points out, the Russians could invade the Baltic countries on a Sunday afternoon. There's no reason for them to do it preemptively when there is no military threat on the Western frontier. By treaty both Poland and the Baltics could be demilitarized.

Further, the Germans will float a flotilla down the Danube to Romania, and set up camp on the Black Sea. Of course they'll be keeping an eye on Russia, but their primary mission will be to defend against the real rising power in Eurasia--Turkey. On this front, too, the Germans and Russians are allies. Germany has been very quiet about objections to the Russian reconquest of Crimea, and is not all that upset by the Russian invasion of Ukraine precisely because the Turks are a bigger threat.

If the French navy can secure the Eastern Mediterranean, Russia can fortify the northern shores of the Black Sea, and Germany can defend Romania, Bulgaria, and mainland Greece against Turkey, then Europe is as secure as possible against either military or refugee invasions from the Middle East. The Russians can get back to doing what they most urgently need to do--make babies.

Turkey can relieve Iranian pressure on Saudi Arabia simply by attacking, or threatening to attack, Azerbaijan. With this tool the Turks can turn Saudi Arabia into a vassal state, reminiscent of the Ottoman Empire. By building a pipeline from Ghawar (Saudi's oil-producing region) to the Mediterranean, Turkey will have both the Iranians and Arabs by the short hairs.

There is no shortage of oil in the world--the only issue is transport disruption due to war. Get rid of the other wars, then the tanker war becomes unnecessary. Peace will prevail. And we'll all live happily ever after.

Or maybe not. It may not end as cheerily as I suggest. But Mr. Zeihan's predictions I think are almost certainly wrong.

Further Reading:

• Book Review: The Accidental Superpower
• New World Disorder
• North Korea

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. [I've since posted reviews of Mr. Zeihan's books here and here.-ed]

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:

• Venezuela
• Book Review: Rise & Fall of American Growth
• Capitalism Just Won't Sit Still

Refugees in Hungary

Louis Proyect writes a complex (perhaps even incoherent) post comparing 1956 Hungary with Syria today. I won't presume to summarize it here, but one theme is a polemic against the stupid Left (my term). These are Leftists who support Assad today, or who supported the Soviet invasion of Hungary in 1956. I call them stupid (perhaps violating my rules for this blog) because they let Barack Obama do all their thinking for them--whatever the US government supports they must oppose, and vice versa, regardless of any other considerations.

Mr. Proyect's opinion (which I share) is that the rebels in 1956 were on the side of angels, and that the murderous Assad regime is a major cause of the refugee crisis emanating from Syria. Where he and I disagree is on the responsibility of European nations to accept large or even unlimited numbers of these refugees. Specifically, he condemns Hungary's Prime Minister Viktor Orban for coddling fascists and mistreating Syrians.

Mr. Proyect puts the rap sheet this way:

But it is Hungary that takes the cake apparently. 

• It put a razor-wire fence on the border with Serbia to keep refugees out. 

• It put up billboards (in Hungarian no less) warning anybody who made it through the razor-wire fence that “If you come to Hungary, don’t take the jobs of Hungarians!” 

• A TV news photographer kicked and tripped refugees running away from the police. The station she worked for was connected to the far-right Jobbik party that lines up with the “axis of resistance” on Syria, opposing “the systematic attempts of the West to find a casus belli for an armed intervention against the Assad government.” 

• At an internment camp for refugees in Hungary, cops threw bags of food to them as if they were hungry animals. 

Since the refugees are only interested in making their way to Germany or Britain, the xenophobia is likely a strategy to mollify Hungary’s burgeoning ultraright groups like Jobbik and their voters.

Of course even as Mr. Proyect penned those words Germany closed its border with Austria, forcing Austria to secure its Hungarian border. Anticipating this, the Hungarians built the razor-wire fence.

Mr. Proyect is correct in saying that "Hungary takes the cake." The country really is more xenophobic than most in Europe, and accordingly its fascist movement, Jobbik, is stronger. But he's wrong to condemn Mr. Orban. I think he should read an article by George Friedman that describes the tightrope that Mr. Orban has to walk. The Hungarian body politic will simply not tolerate a large refugee influx, and were Mr. Orban to allow that it would quickly lead to Jobbik taking power.

I do not speak Hungarian, but over the years I have probably spent cumulatively several months in the country. I think two observations clarify why Hungary is more refugee-averse than most countries.

Mr. Proyect--ace historian--probably knows about the Treaty of Trianon, though I'll hazard most of my readers do not. But I will guarantee that every Hungarian schoolchild is intimately familiar with it. When I visited Szeged, a city a few kilometers from the Serbian border, the first thing my host told me about the place is that it was historically at the very center of Hungary. For prior to the Trianon agreement in 1920, Hungary included most of Vojvodina (Vajdasag in Hungarian), a bit of the Croatian coast, and all of Transylvania (Erdely). Today's Slovak capital, Bratislava (Pozsony), was once the seat of an Hungarian empire.

Hungarians feel, almost to a person, that the Treaty of Trianon was a grave injustice. Sober people, undoubtedly including Mr. Orban, have come to terms with it. But much of the population--especially those whose families came from the former lands--remain very bitter. This is the root of Jobbik. Their principle concern is to retrieve lost lands, especially Transylvania, for Hungary. The Trianon Accord is a big reason why "Hungary takes the cake."

One result of the Treaty is that the Hungarian rump state--modern Hungary--is practically monoethnic. Of people declaring their ethnicity to the census bureau, 98% claim to be Hungarian. The largest minority are Roma, and they are certainly not integrated into the society.

This leads to the second reason why Hungary is different. Hungarian is not an Indo-European language, and is radically different from all other languages in Europe, apart from Finnish. It is very distantly related to Turkish. Even an international word such as police in Hungarian becomes an unrecognizable rendorseg. Hungarian is a famously difficult language to learn, and likewise, for Hungarians learning English is a real challenge.

So don't let those talented, multi-lingual Hungarian expats fool you--very few people in Hungary speak any language besides Hungarian. In the northwest corner of the country, near the Austrian border, German is widely spoken. In Budapest, German and tourist English are often understood. But outside of that it's pretty exclusively magyar.

Mr. Proyect's account of the billboard in Hungarian doesn't surprise me at all.

The result is the country is isolated. Hungarians' understanding of the outside world is limited. They don't travel much. I believe that the level of political discourse is correspondingly very shallow. It's an atmosphere that breeds paranoia and xenophobia. Yet again, "Hungary takes the cake."

Under these circumstances it is truly impossible for any Hungarian government to accept even a small number of refugees. One doesn't have to be a fascist to turn them away. I think Mr. Proyect is too hard on Mr. Orban. He is not a fascist, but he is Hungarian, and he knows the country he lives in.

Note: My daughter got married over the Labor Day weekend. That, along with the house guests that have only recently departed, accounts for the sparse blogging.

Further Reading:

• Book Review: Nigel Farage
• Turkish Politics From Socialist Action
• Fascism!

Jeff Mackler's Greek Post-Mortem

The article by Socialist Action's Jeff Mackler reprises Syriza's humiliating capitulation to the Troika. Mr. Mackler gets some basic facts all wrong.

Here's the big howler:

Greece today, as with all capitalist states, is ruled by an elite ruling class that long ago established the fundamental rules that govern social relations. Its highly profitable shipbuilding industry and related merchant-marine manufacturing stands second or third in the world. Yet these industries are virtually untaxed by the state. The same situation exists with virtually all major Greek private capitalist corporations and financial institutions.

A quick check of the CIA Factbook shows that Greece has no shipbuilding industry at all. The top four shipbuilding nations are China, S. Korea, Japan, and the Philippines, who between them manufacture over 90% of gross tonnage. Greece doesn't even show up in the top ten. Of course Greece has a large merchant marine, essentially a ferry boat service between their myriad islands, analogous to the highway department in most countries.

So it's hardly surprising that shipbuilding is untaxed. Even for the most devout revolutionary taxing a non-existent industry will prove to be a challenge.

But Greece does have a problem collecting taxes--tax evasion is endemic since Ottoman times. By far the biggest export industry is tourism, contributing 18% to GDP. This led to the humorous attempt by the government to ask tourists to rat out restaurants and hotels who didn't provide receipts.

More seriously, Mr. Mackler doesn't understand what "austerity" is. I don't totally blame him since most media reports are similarly unclear. But it's important to get this straight.

The problem Greece has is that it has been living off borrowed money. Germany has been by far the biggest lender, and some blame Germany for causing Greece's problems in the first place. (That's like blaming Budweiser for alcoholism.) Whoever is to blame, Germany is no longer willing to lend money to Greece except under very stringent conditions.

So when you're living off the credit card and the credit card is taken away, then of course your standard of living is going to go down. This accounts for the decline in GDP and living standards in Greece--nothing more.

Now Germany--as I think Mr. Mackler hints at--does not want to lend Greece any more money under any conditions. They prefer that Greece leave the Eurozone, after which Germany and other countries can provide humanitarian assistance--a gift rather than a loan, and money that remains entirely under the control of the donor. Though for a whole bunch of reasons, some of which Mr. Mackler alludes to, Germany didn't get its way. So the Germans are now on the hook for yet another bailout.

The conditions are that Greece run a primary surplus. That means they must meet their daily expenses without having to incur more debt. (If they have a symbolic amount left over to repay the principal, so much the better.) Then the Troika will provide Greeks with enough money to pay the interest on the debt already accrued. That is, it's really a bailout of European banks rather than Greek citizens. The advantage to the Greeks is they don't default, i.e., they remain members in good standing in both the Eurozone and the world economy. That's a huge advantage!

And that's the third thing that Mr. Mackler doesn't comprehend. Giving the world market the middle finger is a really bad idea. North Korea is the country that's gone furthest with that, and they're poor as rats. Cuba and Argentina aren't far behind. Greece is historically a trading nation. You can't be a trading nation if you promise up front that you'll never pay your debts. Welshing on world trade will drive Greece into African levels of poverty.

The Greek people understand that. They overwhelmingly do not want to leave the Euro. Whatever had to be done to avoid defaulting on their debt needed to happen. I think that's why the pushback against the Tsipras surrender has been so modest. Only random Trotskyist grouplets and sundry fascists have opposed it. Everybody else is smarter than that.

Fourth, Mr. Mackler doesn't quite understand Syriza's class character. He describes them as washed-up Stalinists, unrepentant liberals, and fuzzy-minded socialists--all people without the proletarian sensibilities necessary to lead a socialist revolution.

All true as far as it goes. But the key point is that Syriza represents government employees, i.e., the 40% of the workforce employed by the state. Since the government can't collect taxes and relies on borrowed money, they're the folks who are most hurt by cutting up the credit card. They'd also be most hurt by leaving the Euro. So frankly, Mr. Tsipras did as much for them as he could. At the end of the day that constituency wants to stay in the Euro, and that's what has happened.

So what would a true revolutionary leadership have done?

Had Syriza spent its first six months governing Greece looking to the working-class masses as its source of strength and power, the result might well have been inspirational to the workers of the rest of the oppressed European states and beyond.  

But instead of mobilizing its millions to challenge capitalist rule, to take over the major industries, to tax and/or expropriate the rich, to national the banks and major corporations, all under the control of the working masses, Syriza and its sycophants (blind and obedient followers) envisioned social change as a product of clever negotiations with the capitalist elite, employing leading intellectuals to press for modest reforms within the framework of capitalism. Greece’s working-class masses were shunted to the sidelines by the Syriza/ANEL government.

Given that the major industry doesn't even exist, this will not prove easy. The biggest money earner is tourism, which depends crucially on small restaurants and stores, along with foreign expertise and capital to run hotels and cruise ships. You can't nationalize this stuff!

All in all, Mr. Mackler's article is a waste of time.

Further Reading:

• Against Reformism in Greece
• The People Are Stupid
• What Would Lenin Do?

Against Reformism in Greece

Trotskyists are uncompromising. The class line cannot be crossed. Accordingly they oppose popular fronts like Syriza, which consist of unprincipled alliances with bourgeois parties. That Syriza's coalition partner is a small, center-right outfit called ANEL simply demonstrates the perfidy.

Nevermind that the Left wing of Syriza is a sundry mob of Maoists, pseudo-Trotskyists, anarchists, etc. Nevermind that Alexis Tsipras has resolutely refused to compromise with the Troika on core issues. True Trotskyism, as expressed by Socialist Action, regards the whole movement as nothing but a bourgeois front, just waiting to sell out the working class as soon as politically expedient.

The global organization of Trotskyists is something called the Fourth International. The Greek section of the Fourth International is a grouplet that not even I had previously heard of: OKDE-Spartacos. If bombastic proclamations are a mark of revolutionary fervor, then these folks take the cake. Their statement is reprinted in Socialist Action. (The translation isn't very good.)

Of course no proclamation is complete without a list of demands at the end. These range from the stupid to the ridiculous. I've copied them below, along with my comments.

• No new austerity measures, no new agreement, no negotiations

Why should there be no negotiation? What can one possibly lose by talking? Even Trotsky negotiated at Brest-Litovsk. Otherwise, this sounds also like Syriza's strategy. If Syriza is going to sell out the working class, then they've only got a few days left to do it.

• Reduction of working hours, along with raises in wages and pensions

Greeks already don't work very hard--that surely is part of the problem. And where is the money for the wage & pension increase going to come from? Our Trotskyist friends don't say.

• Stop paying off the debt and fully cancel it

Greece has long since stopped paying off its debt, and nobody is suggesting that they start now. The only issue is how the debt going to be refinanced so that the country doesn't default. Greek bailouts consist of money lent by European banks, which is then paid back to European banks to avoid the appearance of default. There is no advantage to anybody in letting Greece default--certainly not to the Greeks. By advocating default, OKDE shows why they are such a small, irrelevant organization.

Far from asking Greece to repay its debts, the Troika is merely insisting that it break even, i.e., run a primary surplus. That's a reasonable request, but the country can't do that with stifling regulations, a retirement age at 50 or 55, and a completely bloated public sector. (Some argue that Greece also needs to cut defense spending.) These misnamed "austerity" measures will bolster the Greek economy and enrich Greek consumers.

• Expropriation of banks and big enterprises, with no compensation for capitalists, and operation under workers control

Greek banks are broke and continue to exist only by the generosity of the ECB. Expropriating them will yield no assets--only debts. And of course the ECB won't continue to put in money. Regarding "big enterprises", it's not clear that Greece actually has many of those, and decapitating a company hardly improves its chances of success. See, e.g., Zimbabwe.

• Self-management of closing factories and enterprises

Good luck with that. I don't care who manages it, but without access to either capital or markets no business can flourish.

• Disengagement from the euro and the EU, for an anticapitalist internationalist perspective For the self-organization, the government and the power of the working people

So 70% of Greeks want to stay in the Euro no matter what. That's because their standard of living depends on it. If Greece is forced out of the Euro instant poverty will follow. I've always said that Trotskyists are pro-poverty, but rarely is it so dramatically illustrated.

Frankly, this is just pathetic. There is such a thing as intelligent Trotskyism--I've remarked on it many times on the blog. But that Socialist Action reprints the foolish ramblings of silly people is beneath their dignity.

Further Reading:

• Predictions for 2015
• Trotskyists Down on the Farm
• The Ukraine and the Other Ukraine

Election Eve: Greece

We'll let Tariq Ali (a long time British Leftist who at least orbits Trotskism) be our guide to tomorrow's Greek elections. An interview with him appears in Counterpunch.

Let's stipulate that Syriza, the radical Leftist party headed by Alex Tsipras, will probably win the election. That's not in too much doubt. The interesting question is what happens after that. Mr. Ali's lede indicates.

If SYRIZA wins it will mark the beginnings of a fightback against austerity and neo-liberalism in Europe. Two concurrent processes will be in motion from the beginning of the victory. There will be a strong attempt by the EU elite led by Germany to try and tame SYRIZA via a combination of threats and concessions. The aim of this operation is simple. To try and split SYRIZA at a very early stage.

Let's leave aside the term neo-liberalism for the moment--that ill-defined boogeyman. Mr. Ali predicts that the EU (specifically Germany) cares enough about Greece to engage in ornate political machinations, eventually reaching some compromise accord with the new Syriza government.

I don't think that's likely. I think Germany wants to expel Greece from the Eurozone. They have no interest in any compromise.

In 2010 Greece signed an agreement with the EU, the IMF, and the ECB (the Troika) in exchange for a bailout. This prevented a default on Greek debts. In return, Greece agreed to austerity measures, including structural reforms and privatization of government assets. Austerity has been especially difficult.

Greece hugely over-regulates large swathes of its economy, as this article about drug stores indicates. One needs a government license to sell products such as Tylenol or Advil. Thus Greece is plagued with an overpaid, inefficient workforce, along with under-served, needlessly poor consumers. Regulations prevent people from buying products they want and need, much as the taxi medallion system prevents consumers from procuring taxi services conveniently and cheaply.

Syriza represents the protected workers, who despite their inefficiency nevertheless feel entitled. This is the conservative movement in Greece, doing everything possible to maintain the status quo. They want to stay in the Eurozone, because their standard of living depends on cheap credit from Germany. But they don't like structural change, because that will open up the market to the benefit of consumers.

Accordingly, Syriza wants to ditch "austerity," and replace it with a free lunch, i.e., more cheap loans from abroad. It won't work. The Germans won't lend the money. Further, I think Germany believes they can expel Greece relatively painlessly now, i.e., it won't result in a Euro-wide financial crisis.

So contrary to Mr. Ali's prediction of a tense negotiation, I predict an early Grexit. The Troika will yield only on the most superficial, cosmetic points. Syriza can't give that much away--they campaigned on their ability to renegotiate. But they won't be able to deliver. So unless Syriza completely caves, Greece will default on its debt.

Default means that the ECB will cut off the Greek banks. Euros within Greece will flee the country as fast as they can. The Greeks will be forced to print up Drachmas in order to pay their employees. Greeks, who don't yet know the meaning of poverty, will soon find out.

Neo-liberalism is a dysphemism for efficiency and globalization. Contrary to what Mr. Ali maintains, efficiency benefits consumers first and foremost. Walmart, for example, assures always low prices because of the efficiency of their supply chain. Globalization gives consumers more choices in what to buy. They can purchase the best possible product and the cheapest possible price from anywhere in the world.

So neo-liberalism, properly understood, is good for human beings. It has pulled 400,000,000 Chinese out of poverty. But I take Mr. Ali's point--it's bad for the workers in highly protected, over-regulated, uncompetitive industries. Those, unfortunately, are Syriza's constituents.

Countries that have rejected neo-liberalism are either poor, very poor, or total basket cases. Argentina is perhaps the best off of the bunch. Because of an earlier default, they haven't been able to access foreign capital markets for a couple of decades now. But they're still able to buy products on the global market.

Venezuela, while not yet in default, has destroyed its own economy. Its trade with the rest of the world is in terminal decline. The oil industry lies in ruins because of stunningly bad management and lack of foreign investment. Shoppers Beggars now wait in line for things like milk and toilet paper.

Cuba has long since renounced trade. Recent TV clips filmed on Havana's seaside boulevard show as much--the dilapidated buildings, the ancient cars, the small-town traffic, etc. Like Venezuela, even common consumer goods are tightly rationed. Nobody is allowed to buy anything. This is the socialism of poverty.

We need not speak of North Korea, the current socialist utopia.

There is much in Mr. Ali's article that I agree with. He says,

[The European Union is] in a very bad state. It subordinated politics to economics and was undemocratic from the very beginning. Blaming ‘lazy Southerners’ for the crisis is grotesque. Its not just the Left which argues this (in fact the Left has been with some exception very weak on the EU), but hedge-fund kings like George Soros who recently said: “My worst fears are confirmed…This is what I was afraid of, that the Euro would be preserved. …pervert the venture, and destroy the European Union. Instead of the solidarity (the EU) was supposed to have embodied, it became every country for itself.” And Pope Francis in the Vatican, to the left of every EU govt today proclaimed that: “The great ideas that inspired Europe seem to have lost their attraction, only to be replaced by the bureaucratic technicalities of its institutions.” The single-formula approach on the currency union is dead in the waters of the Mediterrenean. An alternative needs to be developed. It would be better if this were done by common agreement, but that is unlikely so new radical governments might have to take unilateral decisions.

This is mostly correct. And the first step to dismantling the euro is a Grexit. A more graceful way will be found to facilitate a further breakup. The euro was always a very bad idea.

Just to be clear, this post predicts that:

• Syriza will win tomorrow's election.
• Greece will be out of the Eurozone before the end of 2015.

Tell me if I'm wrong.

Further Reading:

• Are Swiss Bankers Stupid?
• Left Labor's Lost Cause
• Book Review: Nigel Farage

Are Swiss Bankers Stupid?

Are Swiss bankers stupid?

Yes, answer most commentators. Paul Krugman thinks their depegging the franc from the euro is simply inexplicable. Scott Sumner is similarly perplexed. He calls the act "panicky." Megan McArdle writes "[f]rom an economist’s perspective, this seems like the wrong decision, not just because of the chaos, but because, as Krugman notes, this is going to be hell on the exporters." But she's more generous--they're not stupid. Instead they just made a politically-motivated mistake.

Only the New York Sun editorializes in favor of the gnomes. "Congratulations to the doughty Swiss, we say." But then they ruin their argument with gold-buggery, claiming the world should go onto the gold standard.

So I will rise--somewhat lamely--in defense of the Swiss. But the main purpose of this post is to explain precisely what happened, especially to those who don't follow the financial news as closely as I do.

The Swiss National Bank (SNB) is a private bank that serves as the country's equivalent to the Fed. It has a special deal with the government that enables it to act as a central bank. That is, it is the lender of last resort, guaranteed never to be illiquid, and accordingly it can print money. It's charged with a mission: "It is obliged by Constitution and statute to act in accordance with the interests of the country as a whole. Its primary goal is to ensure price stability, while taking due account of economic developments."

So last Thursday at 9:30 am the SNB did some very strange things. First, they reneged on a pledge they had made to peg the Swiss franc (CHF) to the euro (EUR). The promise had been reiterated even just days before, and that the bank would renounce it so precipitously took everybody by surprise.

The pledge consisted of this. The SNB guaranteed that the euro would never cost less than 1.20 francs. If the euro fell below that price the SNB would print francs (they can print as many as they want) and buy euros until the market priced them at CHF 1.20 or above. Because the euro has been weak, the SNB was printing goo-gobs of francs to maintain the peg. Accordingly, the SNB owned lots and lots of euros.

The Swiss actually had a good problem--they were trying to keep their currency from rising (identical to keeping the euro from falling). Any central bank can do that by simply printing more money. The opposite problem--the one now faced by Russia or Venezuela among others--is to keep their currencies from falling. Those countries have to sell foreign reserves to make that happen--which works until they run out of foreign exchange. Russia, for example, can't print euros or Swiss francs.

So there was, in fact, no intrinsic reason why the Swiss couldn't just keep printing francs indefinitely and maintain the peg forever. That's what they said they'd do. And they did that until they broke their promise.

What happened is that within minutes of the announcement the euro dropped from 1.20 francs to 1.05 francs, or about a 13% drop. (As of this writing, 1.01 francs buys a euro.) This in a market where fluctuations are typically in the 0.1% range or less, and it put a number of foreign exchange brokers out of business. Also hurt were Polish and Hungarian homeowners. Since the zloty and the forint are not regarded as stable currencies, home mortgages in those two countries were issued in Swiss francs, thought to be the gold standard. Those poor slobs now owe 20% more on their mortgages than they did last week.

So that's the first mystery--why did they break their promise? The second mystery is why they did it on Thursday morning at 9:30 am, in the middle of a trading day? Normally--according to the wise and the good--such announcements are made over a weekend, just after the close on Friday. This gives people a chance to adjust and plan, and so minimize losses. The Swiss didn't do that--instead they picked the most disruptive time possible--the morning of a busy trading day.

So it's been described as a "panicky mistake," the kind of thing you'd do if you're in a corner with only bad options. But that hardly describes Switzerland. The problem with the "panic theory" is there was no good reason for the SNB to panic. There are any number of things that could have solved their problem (if they had a problem) that wouldn't have been as disastrous. They could, for example, have moved the peg from 1.20 to 1.18--a small but meaningful change. That would have shocked the markets, but hardly been the "disaster" that happened.

Conventional wisdom has it that the cause of the SNB's decision was the imminent quantitative easing by the European Central Bank (ECB), the keepers of the euro. The ECB has promised that they were going to print euros in an attempt to induce inflation in the Eurozone. Inflation is needed because governments and people are hopelessly in debt. Inflation effectively lowers the interest rates on existing debt.

Of course printing euros will lower the value of the euro, which means the Swiss would have to print overtime to maintain the peg. The Swiss apparently decided they didn't want to do that. So now people are predicting that the euro will fall to parity with the dollar (as I predicted here, quite by accident).

But the ECB's quantitative easing, while imminent, does not spell crisis for the SNB. It has been announced for some months now--no surprise there--and likely had already been priced into the market. So I simply don't buy the panic theory. I think the Swiss acted with due diligence.

One reason people claim this was a mistake will be massive deflation in Switzerland. Any exports to the Eurozone are now 19% more expensive than before. This will kill exporters, such as the vaunted watch industry. And no doubt this is a problem. But as this Der Spiegel article (in German) indicates, the Swiss are already adjusting. There is a concerted move to lower wages across the board. Swiss in border areas (e.g., Basel or Geneva) can easily buy groceries in Germany or France at a considerable discount. So deflation will hurt them in the short term, but probably not the medium or long term. In a year they'll have adjusted.

Another reason for thinking it's an error is that the SNB will lose credibility. They said they'd keep the peg indefinitely, and then they broke their word--in the most dramatic way imaginable. But the incredible Swiss are crying all the way to the bank--their currency is now worth 19% more than before. Every Swiss citizen is now substantially richer than they were before.

So I think the SNB dropped the peg for good reasons. And here they are:

1) While deflation is bad for debtors, the Swiss are not in debt. Indeed, quite the opposite. They're global creditors. Deflation is good for creditors. So if any country can withstand a bout of deflation, Switzerland can.

2) The Swiss franc is not going to be a reserve currency. It's a tiny country with only eight million people. There is no way they can bail out the euro, which is what everybody was expecting. Far from being a mistake, breaking the peg was the right thing to do. It corrected the previous error of making the peg in the first place.

3) As a small country dedicated to free markets and free trade, the Swiss do not have much macroeconomic control over their economy. They can't regulate either inflation or unemployment. All they can do is set the value of their currency. By tying it to the euro they forfeited even that control. The SNB has credibly reclaimed what little power it once had.

4) Anybody who has savings in Swiss francs is now 19% richer than they were last week. Most Swiss bank savers are Swiss. So what's wrong with that?

5) By doing it suddenly and dramatically, the prevent anybody gaming the system to Swiss disadvantage. Also, all the bad news is out there. There are no more shoes to drop. Folks can get back to their business.

So I don't think the Swiss are stupid. But even smart people make mistakes. We'll know that by this time next year--if unemployment rises substantially then yeah. But I don't think that will happen. Switzerland has never been a low-cost country. Their products are not price sensitive. They'll be able to adjust.

Further Reading:

• The Laws of Economics
• Book Review: Arnold Kling's Macroeconomics Book
• Imperialism

Socialist Action's Convention 2014

Trotskyists, armed with the Marxist ideological arsenal, pride themselves on offering a unique and intelligent opinion of world affairs. So it is a disappointment to read excerpts from Michael Schreiber's World Political Situation Report only to discover warmed-over, cherry-picked conventional wisdom.

Socialist Action (SA) has apparently not inherited Jack Barnes' talent for storytelling. Mr. Barnes' convention reports are masterful exercises in persuasive, sentimental argument, aimed primarily at comrades, but readable by a larger public. Importantly, he gets his facts mostly right. By contrast, SA's documents are sloppy, full of over-the-top claims that seem unlikely to be true.

The piece in question is about Europe's economy. The lede sets the tone.

Capitalism’s offensive against the world’s working class—which gathered momentum as a consequence of the major economic recession that began in late 2007—continues unabated. Even in the major industrial nations, the ruling class has been waging an all-out struggle to make working people shoulder the debilitating effects of the economic crisis.

The premise is completely wrong. Capitalists make money by selling better products at lower prices to more people. How can that be interpreted as an "offensive against the world's working class?" Quite the contrary, capitalism enriches all of us. Perhaps Mr. Schreiber has purchased the new iPhone 6, or maybe he recently flew on the Boeing Dreamliner airplane, or perhaps like me he takes statins for high cholesterol. Maybe he just bought a car with intelligent cruise control. And he certainly posts articles on to the web. My family buys fresh blueberries in January, imported from Chile. They're no more expensive than the blueberries we buy in the summer imported from New Jersey.

Gas prices are down by 20%. My wife is flying half-way round the world for less money than it cost her three years ago. Even food prices are starting to go down.

How can this guy claim that we're all getting poorer and keep a straight face? There's no way.

Well, there is a way, and of course it involves Greece--a cherry-picked example if there ever was one. German capitalists (evil bastards) sold the Greeks a bunch of new Mercedes on credit--money that now needs to be paid back. Mr. Schreiber doesn't give German workers any credit for building fine motorcars for Greek drivers, but now complains when they want to get paid for it. The problem is the Greeks want a free lunch (or at least a free Mercedes).

So I'll grant Mr. Schreiber that bit of his argument--people in Greece are poorer now than they were ten years ago. But if this is argument by cherry-picking, then I can pick cherries better than he can. The country with the largest proven reserves of crude oil is--wait for it--Venezuela. By all rights it should be a wealthy place.

Yet Venezuela, once the darling of the American Left, has destroyed its oil industry. Today the oil fields have gone to rot, with infrastructure lying in ruins. Venezuelans are much poorer today than they use to be. There are shortages of toilet paper and milk, along with most other consumer products. Caracas has one of the highest crime rates in the world.

Mr. Schreiber's article contains some glaring contradictions. In one paragraph, he complains on behalf of European heating oil refiners that the market is completely glutted, in part by imports of American oil and gas. Accordingly, in Italy 3500 jobs are at risk.

The very next paragraph, however, claims that "imperialist powers" are falling all over themselves to invest in Ukraine, which "might have the fourth largest deposits of frackable shale gas in the world." Go figure. Why would they do that if there's a huge glut of oil and gas on the market? This is what happens when you cherry-pick factoids and have no understanding of underlying economic principles.

Mr. Schreiber goes further and claims that "[t]his explains, for example, the intense interest of Western capitalism in bringing Ukraine into the European Union and into NATO, while muscling Russian capitalism out of the picture." Since when? There isn't a single country willing to put any boots on the ground to make Ukraine part of NATO. And it boggles the mind that anybody wants it in the (disintegrating) European Union. Mr. Schreiber lives in a fantasy land.

The summary of "facts" concludes with this howler.

In summary, despite continued and heightened attacks on the working class by international capitalism—leading to a huge increase in poverty worldwide and a huge shift of wealth upward to the already wealthy— none of the efforts by the masses to thwart these attacks has yet resulted in lasting victories.

There is no huge increase in global poverty. For example, China has suffered a slowdown since 2007--today it's growing at only 7% annually. Given 1% annual population growth, it's hard to see how the Chinese are getting poorer. Likewise, the US has been growing at 2-3% annually since 2010, again significantly above population growth. While some aspects of the American lifestyle are worse than before (most notably, job security), there is little evidence that people are actually poorer. On a global scale, among nations participating in the global economy, that is clearly not true.

Mr. Schreiber points out that Germany's economy shrank by 0.2% last year, after increasing for the past five years. Germany's population isn't growing at all, so this represents at worst an extremely modest decline in the standard of living. But given persistent deflation in the Eurozone, it probably doesn't even mean that much. Like the rest of us, Germans have a higher standard of living than they have ever had before in history.

At the end of the article Mr. Schreiber recounts how the European working class is reacting to this supposedly dire state of affairs. He starts oddly, with the demonstrations in Hong Kong! Not sure what the relevance of that is.

Then he talks about the rise of far right parties in Europe, from the Sweden Democrats to France's National Front. He asserts that the "absence of effective working-class leadership has allowed ultra-right, ultra-nationalist, and fascist parties to grow in some areas, luring petty bourgeois and even working-class sectors into their ranks with rhetoric that blames social problems on immigrants or minority ethnic populations."

But the rise of the extreme right has nothing to do with "working-class leadership," or, for that matter, even economics. It is, instead, because of the democracy deficit intrinsic to the European Union. A bunch of technocrats in Brussels claim to know what's best for every country, and the people never really get a say in the matter. Of course they object to that.

There are crises in Europe--a democracy deficit, and a currency union that doesn't make social sense. The European Union has gotten too big and too powerful. It needs to be reduced to the free trade area it was originally.

But growing European-wide poverty is not the problem. Because there isn't any.

Further Reading:

• Left Labor's Lost Cause
• Socialist Action Jumps the Shark
• Jack Barnes' Next Book

Socialist Action Jumps The Shark

Admittedly, there is a difference between political opinions with intellectual rigor and those that appeal to sentiment. A political party ideally hits both those buttons, at least partially. For example, when I was a Trotskyist, the intellectual argument against the Vietnam war was opposition to imperialism, while sentiment was rooted in the horror of the war. The two matched up more or less, and the result was a growing Party.

Today, both Socialist Action and The Militant have lost their way. The former strives for intellectual rigor (such as it is), while the latter appeals to sentiment. Neither is successful.

A recent article by Jeff Mackler in Socialist Action touts the thesis of the aging muckraker, Seymour Hersh. He's the fellow who exposed the My Lai massacre some forty six years ago, and now he claims that the Syrian rebels are responsible for the sarin gas attack on the Damascus suburb of Ghouta. That is the red line supposedly crossed by the Assad government that nearly led to US retaliation.

The consensus view is that crime was committed by the government, not by the rebels. I acknowledge there is some disagreement, and I certainly don't know enough about the mechanics of gas attacks to resolve the issue. But I find Mr. Hersh's claim, and by extension Socialist Action's position, untenable.

The Leftist expert on Syria is Louis Proyect, who has devoted a lengthy article on Seymour Hersh here. Mr. Proyect pretty convincingly debunks the Hersh thesis. Unfortunately, his argument is too ad hominem for my taste: Mr. Hersh is wrong because he agrees with right-wing news sites, such as World Net Daily. But of course there's no reason why Right and Left couldn't agree on a factual matter (were it factual). I'm a Right-winger and on this I agree with Mr. Proyect. Does that make Mr. Proyect wrong?

I think believing in a rebel sarin attack on their own position is a conspiracy theory. It requires that the rebels would use one of their few artillery shells to attack their own, very strategic position, and this apparently just to prod the US into retaliating against the government. Surely, if the rebels really did have access to artillery-deliverable sarin gas, they would have employed it against the enemy, rather than betting on the fanciest billiard ball bounce ever.

Socialist Action advances this theory in part to demonstrate that the rebels are really evil people. Therefore, just as a matter of basic human morality, you should support the government. This is an appeal to sentiment. The effort is belied somewhat by the caption to the photo: "Assad is guilty of many atrocities, as this photograph taken after a government airstrike on the town of Maarat al-Noaman shows. But did his regime use sarin gas?"

More, Socialist Action tries to show that the US is really siding with the rebels. In particular, they assert that we are trying to provide the rebels with shoulder-fired, anti-aircraft missiles (MANPADS), capable of shooting down civilian aircraft. For whatever reason we're trying to keep this effort a secret--to this day the mainstream media is completely bamboozled. It's not clear why we'd be trying to keep it a secret, nor could we were it true. The Israelis would have a conniption fit if they really believed we were trying to so arm the rebels, and would shout to the heavens.

The whole theory is just malarkey. As Mr. Proyect demonstrates, the US policy is to let the two sides fight it out and exhaust each other.

In a similarly perverse position, Socialist Action has come down on the side of the Russians in Ukraine.

The conflict in Ukraine has greatly escalated in recent days, as open revolt against the right-wing government in Kiev sweeps through the eastern and southern sections of the country. Protesters state that they are trying to protect the Russian-speaking population from discrimination and fascist attacks. Many call for autonomy for their region, while others say they are seeking to secede from Ukraine and to join Russia—as Crimea did following its March 16 referendum.

This thesis loosely agrees with Pat Buchanan's, who argues that Putin is defending Christendom. Buchanan's piece is better argued, and indeed, who one sides with here is a matter of taste. But Socialist Action is going against sentiment, which belongs to the freedom-fighting rebels in Kiev. Both The Militant and Mr. Proyect are on the side of the Maidan Square demonstrators.

So for both Syria and Ukraine Socialist Action goes against sentiment and instead argues for "principle." The principle is to oppose anything the American government supports. If the US supports the Maidan square crowd, then of course it's only because they're a bunch of fascists. If America opposes Assad, it can only be because the Baathist regime represents some residue of Marxism, and is in any event less vile than the evil Jihadis.

But since sentiment and principle have to sort-of align, it is necessary to come up with completely bogus crimes, such as the rebel's sarin gas attack. In the cause of sentiment, Socialist Action finds a fascist under every bed. It won't work--it's really hard to distinguish the Black Hats from the White Hats in either Syria or Ukraine. None of the hats are Red, either.

The Militant, in siding with sentiment on both Syria and Ukraine, has lost sight of principle. It's program has become increasingly incoherent, as I've documented elsewhere (most recently here). They're flailing around trying to find a thread on which to hang a position. To use the old Trotskyist lingo, The Militant is opportunist, while Socialist Action is sectarian. My 18-year-old self would still have joined with The Militant. I'd have nothing to do with Socialist Action.

Zoltan Grossman, writing in Socialist Viewpoint in one of the best articles about Ukraine I've read anywhere, puts it best: "The enemy of your enemy is not always your friend." Words to live by.

Further Reading:

• The Ukraine & The Other Ukraine
• Turkish Politics From Socialist Action
• Imperialism

Book Review: Nigel Farage

I'd love to like Nigel Farage.

But after reading Matthew Lynn's short biography, Independently Minded, I find it increasingly hard to do so.

For those of you living under a rock, Mr. Farage is the long-time leader of the UK Independence Party (UKIP), the closest thing the Brits have to a Tea Party. And who among us Tea Party types aren't thrilled by Mr. Farage's eloquent revelation of truth to power from his perch as a member of the European Parliament. For those of us who believe in small, limited government and individual freedom, this is music to our ears.

Born in 1964, Mr. Farage hails from Downe, Kent (one of the home counties surrounding London), also famous as Charles Darwin's birthplace. He's a hail-fellow-well-met guy who loves his pub and brew, and was a semi-professional golfer in his younger years. Not much of one for school, he chose a career as a commodity trader in the City--a job where his natural gregariousness and people-skills would be put to good use. He possessed "a formidable ability to hold his drink."

Not formidable enough, apparently. In 1985, his walk back to the train station after an evening of drinking led to an accident that destroyed his golf ambitions. That pushed him into a career in politics, inspired in part by the well-known Conservative politician, Enoch Powell. He joined the incipient UKIP and soon became its leading member.

Mr. Farage loved campaigning, especially in the home counties where he could move from pub to pub and commune with the locals. But running a successful political organization was another story, and that Mr. Farage would rather have left to somebody else. The problem was that somebody else usually had ideas of his own not to Mr. Farage's liking. So while he was never interested in climbing the greasy pole, that's part of what he did, and not unsuccessfully. UKIP, while it still does not have a seat at Westminster, holds a disproportionate number of seats in the European Parliament and is a player in British politics.

In 2010 he was involved in another accident, as a passenger in a small campaign plane forced into a crash landing. It took him a year to recover, though he remains in poor health. While his previous accident inspired a career in politics, the latest one is pushing him away. We may, sadly, be seeing the end of Mr. Farage's public career.

Mr. Farage is a politician with many positive qualities. Unlike so many politicos, he really is a nice guy. He's been able to dispense with the handlers and consultants, and just be himself. There is a refreshing honesty about both his persona and his program.

His argument against the EU is compelling. It really is run by a bunch of unelected bureaucrats who have no right to be deciding how people should lead their lives. His funny criticisms of Herman van Rompuy and Jose Barroso, satirical to be sure, are right on point. The EU is a utopian vision that is doomed to fail, causing misery and suffering across the continent.

That said, the Euro has survived longer than many would have thought. Kicking the can down the road, as the EU government has done, apparently works, at least in the short term. Not that the vast army of unemployed in Greece, Italy, or Spain are better off because of it.

So what's not to like about Mr. Farage?

First, he and (especially) some of his colleagues are prone to accuse Germans of fascism simply because they are German. This is a cheap shot, and not a true one. There is a problem of fascism in Europe, but almost none of it comes from Germany. Instead, I'd finger groups like France's National Front or the overtly racist Golden Dawn in Greece. The comparable organizations in Germany are much smaller. Accusing Angela Merkel of being the second coming of Hitler (as some Greek protesters are wont to do) is as unfair as it is unhelpful. Mr. Farage should distance himself from this sentiment.

Second is that UKIP has acquired some unpleasant bedfellows. UKIP has long prided itself on being a "non-racist" party, and distinguished itself from thug groups such as the British National Party. Unfortunately, according to his biographer, Mr. Farage is now proud that his anti-EU alliance includes organizations such as the National Front and the True Finn party. In particular, Mr. Farage is increasingly campaigning on an anti-immigrant platform, which verges on racism.

Immigration is a very difficult issue. At one extreme is the dreamer, Bryan Caplan, who argues that if only people could move freely to where they could earn the most money, the world economy would instantly grow by another 2-3%. This, of course, is how it works within the United States--overtaxed New Yorkers can move to Texas without asking anybody for permission first.

Unfortunately, this very sensible economic argument runs up against cultural resistance, and so free immigration across international frontiers is simply not practicable. But it's one thing to argue for well-regulated immigration (as Mitt Romney did), and yet another to blame immigrants for all or most of a nation's problems. In extremis, the latter conforms to the fascist meme: we're poor because the foreigners stole all the money.

No prominent politician on the American scene is anywhere close to the fascist meme. The closest was Tom Tancredo who ran on an anti-immigration platform, and lost badly. But the same is not true in Europe. In particular, the National Front is against immigration per se, not just for its better regulation.

Now I understand that Europe is not the US. Relatively open borders in a big, diverse country like the US means something very different than it does in Finland. It may be the Finns have good reasons to be much more cautious about immigration. That said, I'm pretty nervous about the True Finn party, and I get pretty nervous about Nigel Farage when he comes out in their support.

Apparently Mr. Farage is proud that he has built an anti-EU alliance that includes these fascist or fascist-leaning groups. I think he's lost sight of the goal. The goal is not to abolish the EU. The goal is to expand individual liberty, toward which the EU is undoubtedly an obstacle. But replacing unelected bureaucrats with politicians who don't believe in free markets, democracy, liberty to begin with is not progress.

I'd like Mr. Farage much better if he would disavow some of his so-called allies.

Mr. Lynn's biography is a short, entertaining read. At 61 pages it is just the right length for a (so far) minor political figure. For a clear introduction to Mr. Farage and the movement he represents, this is a very good place to start.

Further Reading:

• Christie vs. Paul
• Fascism!
• Immigration? Si!