Firm Level Price Determination: A Comparison of Theories (Perfect Competition, Imperfect Competition, and the Theory of Real Competition)

By Ezra Pugh

“The best of all monopoly profits is a peaceful life,” (John Hicks, 1935).

“The division of labor within society brings into contact independent producers of commodities, who acknowledge no authority other than that of competition…the ‘war of all against all,’”      (Karl Marx, 1867)

George Stigler defines the term competition as “the absence of monopoly power in a market,” (Stigler 1957, 14). This could seem a curiously narrow definition to the businessperson or the worker. But this notion has been ubiquitous in the teaching of economics for decades. It originates, of course, from the Neo-Classical theory of perfect competition. Abstraction is necessary to any theoretical investigation. Assumptions must be made for the purpose of conducting analysis. But in flattening the meaning of a term like competition in such a way, is there a risk that some essential insights may be lost?

Perfect Competition

Perfect competition is the foundational parable of orthodox economics. A perfectly competitive market is an abstract ideal with a number of specific attributes:

•          There is a very large number of firms, such that no single firm can affect the overall market for its product.

•          There is a very large number of buyers for the industry’s product.

•          Each firm produces exactly the same undifferentiated product.

•          Firms, and their consumers, have perfect knowledge of all relevant economic information related to their industry and its product.

•          Firms have unrestricted power of entry and exit in their industry.

•          Firms are entitled to a ‘normal rate’ of profit, which is included in its operations costs.

• ·         Marginal costs drop at first then eventually increase with each unit sold. As a result, average cost is also upward sloping.

From its perspective, a firm in perfect competition is just a speck, dwarfed by the size of the market it competes in. The market can absorb whatever the firm can produce, provided it is sold at market price. The firm’s perceived demand curve is horizontal, or perfectly elastic. As a result, the demand curve is identical to its supply curve. The overall demand curve of the market, however, is downward sloping.

The firm must accept the prevailing market selling price for its good. If it sets its price above the prevailing price, even by an iota, the firm will lose all of its sales to the myriad other sellers. If it sets its price below, it will not be able to make enough profit to survive. A firm in a perfectly competitive market is therefore known as a price-taker, as it is powerless in the face of market pressures. Consequently, “a perfectly competitive firm has only one major decision to make—namely, what quantity to produce,” (Greenlaw 2018, 189).

Being rational, the firm’s motivating goal is to generate profit. Its profit (r), is defined as total revenue (TR) minus total cost (TC). Total revenue is made up on the products price (P) multiplied by the quantity produced (Q) minus the average cost per unit (AC) multiplied by the quantity produced. This can be written as:

To maximize its profit, the firm must continue producing more output up until the point its marginal revenue equals its marginal cost – the point where an additional unit of output contributes no more profit. Marginal revenue (MR) and marginal cost (MC) are defined thus:

Because the market price the firm experiences does not change based on its output, the firm’s marginal revenue is a constant. Each additional unit sold adds the same value, which is equal to the price of the product. If marginal revenue is equal to price, and profit maximization occurs when marginal revenue equals marginal cost, the firm should produce up until the point where its marginal costs equals the price of its product.

The firm’s average cost is its total cost divided by quantity produced, and is assumed to initially fall then eventually be upward sloping. Because innumerable sellers all sell the same good, in the long run (which generally does not have a specific definition), all ‘economic’ profits—those which are above the assumed ‘normal’ profits—are eventually eroded completely away. If positive economic profits existed, more firms would enter the market, increasing supply and lowering price. If economic profits are negative, firms would leave the market, causing the opposite effect. As a result, in the long run perfect competition causes sellers to produce their goods at the lowest point on their average cost curve.

“When profit-maximizing firms in perfectly competitive markets combine with utility-maximizing consumers, something remarkable happens,” we are told, “the resulting quantities of outputs of goods and services demonstrate both productive and allocative efficiency,” (Greenlaw 2018, 206). Productive efficiency is attained because in the long run, firms produce at their absolute lowest cost. Allocative efficiency is achieved because the resulting goods’ price is equal to its marginal cost—precisely the value of the ‘social cost’ of producing it.

Imperfect Competition and Monopoly

But of course, this state of affairs does not resemble the world in which we live. This utopian optimality, we are told, is distorted and mutated by the anti-competitive behavior of firms and government. Due to that meddling, we live in a world of imperfect competition—monopoly, monopolistic competition, and oligopoly. Paradise lost. In monopoly, a firm is the lone provider of a good, in monopolistic competition many firms produce differentiated products, and in oligopoly a small cabal of firms control the marketplace and exert price pressure.

The culprit which creates each of these distorted market types is barriers to entry. Whether natural or legal, barriers to entry prevent firms who would otherwise enter a market from entering. The few firms which are active in the market have control of too large a slice. As a result, they can affect the market price based on how many units they produce. Instead of a horizontal perceived demand curve, the firms in imperfect competition face a downward sloping demand curve.

To maximize its profit, the imperfectly competitive firm still produces at the level where MR = MC. But because of its outsized effect on the market, P no longer equals MR. With each unit produced, the increased supply exerts downward pressure on the price, which effects the price of all other units produced by the same amount. If such a firm produces too much, it can hurt its own bottom line. Because it supplies as much as it wants and not what consumers want, a true monopoly will have perpetual positive economic profits at a level which depends on the elasticity of the product’s demand schedule. Monopolistic competition, however, will in the long run result in a total erosion of economic profit as firms enter the market, all producing at a point on the AC curve, albeit not at its minimum point. As a result, none of these markets is productively or allocatively efficient. The amount of goods produced is below what consumers would have wanted under perfectly competitive conditions, they are more expensive than they are socially worth, and firms inefficiently do not produce at their minimum average cost. Customers are robbed of potential utility. Such markets are sadly the norm, because, we are told, “firms have proved to be highly creative in inventing business practices that discourage competition,” (Greenlaw 2018, 220). This is a great state of affairs for the firms, however, because “once barriers are erected, once a barrier to entry is in place, a monopoly that does not need to fear competition can just produce the same old products in the same old way,” (Greenlaw 2018, 229). Managers can kick back and watch the profits roll in.

Historical Overview

Sketched out above is the dominant parable in economic thought and teaching. Interestingly, almost none of this resembles the real world. How did we get here? An outline is sketched below.

Adam Smith is generally credited with establishing economic thought, or Political Economy, as a distinct field of study. His work An Inquiry into the Nature and Causes of the Wealth of Nations (1776) is regarded as the first modern work of economics. A key figure in the Scottish Enlightenment, Smith was interested in observing economic phenomena, describing them, and discovering the hidden patterns within. David Ricardo furthered and built on Smith’s ideas, advancing theories on rent, trade, and value. Over the course of the three volumes of Capital (1867), Karl Marx extended this theoretical framework even further with sharpened historical and class analysis, building a signature value theory in the process. Along with others, these thinkers are referred to as the Classical economists.

But in the 1870’s there occurred what is known as the Marginalist Revolution. The Long Depression (1873-96) caused a crisis of confidence in the capitalist world. Interestingly, it was during this period that the most utopian theoretical depictions of capitalism were popularized. W.S. Jevons (1871), Carl Menger (1871), and Leon Walras (1874) independently and almost simultaneously developed this new theoretical paradigm. They perceived fundamental flaws in the theoretical framework and methodologies of the Classical economists and sought to “pick up the fragments of a shattered science and to start anew,” (Jevons 1879/1965, Preface lii). The Classicals believed that the ultimate source of an item’s value was the amount of labor embodied in it and that market prices were connected to costs—prices of production. The Marginalists vehemently disagreed. “Value,” wrote Jevons, “depends entirely upon utility” (Jevons 1871/1965, 1). Echoing this sentiment, Menger wrote “there is no necessary and direct connection between the value of a good and whether, or in what quantities, labour and other goods of higher order were applied to its production” (Menger 1871/2007, 146). Value then stemmed from a buyers utility gained from a good; that utility being an index of the good’s scarcity.

Jevons and Walras both used advanced mathematics to express their ideas. Adopting algebra and calculus, they could express complex ideas with greater accuracy than was possible previously. "Why should we persist in using everyday language to explain things in the cumbersome and incorrect way, as Ricardo has often done,” wrote Walras, “when these things can be stated far more succinctly, precisely, and clearly in the language of mathematics?" (Heilbroner 1997, 226). Walras pioneered what is known as general equilibrium theory—the notion that a complex balance of supply and demand can exist in and between markets.

It is during this period that supply and demand curves and the modern theory of perfect competition are introduced. In order to make their highly abstract models functional and defined, economists had to make assumptions that did not necessarily fit with, and often outright contradicted economic reality. "The pure theory of economics, it must precede applied economics,” wrote Walras, “and this pure theory of economics is a science which resembles the physic-mathematical sciences in every respect," (Heilbroner, 224). Actual people and actual societies faded from the picture in favor of platonic ideals. This fundamental methodological shift opened up many new avenues of exploration for economists, but the descriptive and predictive usefulness of the new models was not necessarily clear. Perfect competition became the theoretical jumping off point for all ‘rigorous’ analysis, and Marshall (1890) systematized the theoretical structure into what would recognize as modern Neo-classical economics. Dobb notes, "at the purely formal level, there can be little doubt that the new context and methods, with their mathematical analogy if not mathematical form, resulted in enhanced precision and rigor of analysis…the cutting knives of economic discussion became sharper -- whether they were used to cut so deeply is another matter" (Dobb 1973, 176).

In the 1920s, unease with the dominance of perfect competition was growing. Sraffa (1925) aimed a potentially devastating critique at the then-dominant Marshallian partial equilibrium theory, demonstrating that the theoretical structure was not capable of dealing with non-constant returns (increasing or decreasing costs) adequately (Mongiovi 1996). The next year, Sraffa (1926) suggested a solution might be found using the lesser utilized monopoly theory as a starting point. Even in competitive markets, monopolistic tendencies could easily be observed because 1.) firms can exert some control over their own prices, and 2.) they frequently experience increasing returns (decreasing costs). Sraffa argued that these circumstances are not the exception, “rather they are normal and persistent features of the economic landscape, with 'permanent and even cumulative' consequences for market equilibria. When these influences are operative, each firm is to be viewed as having its own distinct market; prices are set so as to maximise profits on the supposition that the relevant demand curve is not perfectly elastic,” (Mongiovi 1996, 214). Building on these ideas, Robinson (1933) and Chamberlain (1933) independently, but simultaneously, developed the theory of imperfect competition that is taught today. Eventually abandoning Marshallian theory altogether, Sraffa’s publication of Production of Commodities by Means of Commodities (1960) is credited with establishing a distinctive Sraffian or Neo-Ricardian school.

Real Competition

In Capitalism: Competition, Conflict, Crises (2016), Anwar Shaikh erects a theoretical framework independent of perfect and imperfect competition. Formalizing insights developed by the Classical economists, a theory is built which is both analytically sound and corresponds to observed economic phenomena. The theory of real competition, as it is called, “is as different from so-called perfect competition as war is from ballet,” (Shaikh 2016, Ch. 7.I.). The classical economists stressed themes that were either diminished or omitted completely by Neo-classical economists, including conflict, class, and temporality. In Capital, Volume 1, Karl Marx writes that the economic realm is bellum omnium contra omnes, ‘war of all against all,’ (Marx 1867/1990, 477). All evidence of this is lost in the parables of perfect and imperfect competition. But in Capitalism, the theory of real competition “pits seller against seller, seller against buyer, and buyer against buyer. It pits capital against capital, capital against labor, and labor against labor,” (Shaikh 2016, Ch. 7.I.). Abstracting away from the essentiality of conflict to capitalist production and distribution makes Neo-Classical analysis not only unrealistic, but totally misleading.

But even on pure theoretical grounds there are issues with the theory of perfect competition. For one, there is a fundamental contradiction within the assumptions. Firms are assumed to have perfect knowledge of the market in which they are competing, yet their perceived demand curve is assumed to be flat. These two assumptions cannot hold at the same time. “If firms are assumed to be sensible in their expectations, then the theory of perfect competition collapses. More generally, even mildly informed firms would have to recognize that they face downward sloping demand curves under competitive conditions,” (Shaikh 2016, Ch. 8.I). If a firm in a perfectly competitive market has perfect knowledge, it would quite easily deduce that the market signals it is receiving are being received by every other firm, and those firms will react in a predictable manner. As a result, the firm would know that it does not face a flat, perfectly elastic demand curve, and would act in exactly the same manner as a monopolistic firm, with just the same results.

Another problematic assumption within the orthodox framework is that firms are entitled to a normal rate of profit, which is included within its cost structure. The action of competition completely erodes excess profits away but leaves normal profits intact. This, of course, is wildly unrealistic because “no capital is assured of any profit at all, let alone the “normal” rate of profit. Indeed, all capitals face losses at some point, and a certain number drown in red ink in every given interval. It is therefore completely illegitimate to count “normal profit” as part of operating costs,” (Shaikh 2016, Ch. 7.I.). The prospect of making a loss is the dark cloud that hangs over every business manager, driving them unceasingly into conflict with agents both inside and outside the firm. Abstracting away from this motive force fundamentally misdiagnoses the motivations of economic agents.

In the theory of perfect competition, a firm’s only decision is how much to produce. Likewise, in imperfect competition, pricing and quantity decisions are mechanically connected. But in the works of the Classicals and in the theory of real competition, firms are active price setting, cost cutting entities. Neo-Classical theory stresses that firms will flock to higher profit rates at a given price. But once firms have the power to set their own price, the picture becomes more complicated. In their endless search for higher rates of return, firms cut prices to attract more buyers and increase market-share. In the process, “the advantage in this perpetual jousting for market share goes to the firms with the lowest cost,” (Shaikh 2016, 7.II.). If firms have the power to cut their own prices, they have the power to starve out other firms—even ones that are potentially more profitable at initial prices. Neo-Classical theory stresses that firms will adopt whatever method yields the highest profit at a given price, but “when costs differ, there is always a set of prices at which the lower cost firm has the higher profit rate. This does not mean that [it] has to drive the price down to that level. It has only to get the message across to its competitor that the future has arrived,” (Shaikh 2016, 7.VII.). This is demonstrated in Table 1 below. Pricing wars, which are extremely common occurrences in the real economy, highlight the conflictual nature of economic relations—"these are the operative principles of warfare: attackers try to impose greater losses on the other side. We will see that such behavior is the norm in the business world. It follows that the highest profit that is sustainable in the face of price-cutting behavior is generally different from the price-passive profit assumed in theories of perfect and imperfect competition,” (Shaikh 2016, 7.II.). Only the theory of real competition deals with this common behavior adequately.

Conclusion

Contrary to Hicks’ assertion, a peaceful life is not included in a firm’s profit—no matter their degree of monopoly. There is perpetual conflict generated both inside and outside of the firm that must always be contended with. For real firms, “price is their weapon, advertising their propaganda, the local Chamber of Commerce their house of worship, and profit their supreme deity,” (Shaikh 2016, 7.II.). Abstraction is a necessary tool for analysis. But the specific method of abstraction used in the theories of perfect and imperfect competition does not serve to elucidate truths that would be otherwise unattainable. Neo-Classical economics was formulated during a crisis of capitalism to create a utopian vision in order to justify capitalist social relations. Capitalist relations have been shown to be the most powerful and productive in history, but that does not justify obscuring their fundamentally destructive and chaotic elements. Competition is not merely the absence of monopoly power—it is the struggle of all against all.

References

Dobb, M. (1973). The ‘Jevonian Revolution’. In Theories of Value and Distribution since Adam Smith: Ideology and Economic Theory (pp. 166-210). Cambridge: Cambridge University Press. doi:10.1017/CBO9780511559457.007

Cohen, A. J., & Harcourt, G. C. (2003). Retrospectives: Whatever Happened to the Cambridge Capital Theory Controversies? Journal of Economic Perspectives, 17(1), 199–214. doi: 10.1257/089533003321165010

Greenlaw, S. A., Taylor, T., & Shapiro, D. (2018). Principles of Microeconomics. Houston, TX: OpenStax, Rice University.

Heilbroner, R. L. (1997). Teachings from the Worldly Philosophy. New York: W.W. Norton.

Hicks, J. (1935). Annual Survey of Economic Theory: The Theory of Monopoly. Econometrica, 3(1), 1-20. doi:10.2307/1907343

Jevons, W. S. (1965). The Theory of Political Economy (5th ed.). New York, Ny: Augustus M Kelley.

Marx, K., Fowkes, B., & Fernbach, D. (1990). Capital: a Critique of Political Economy; vol.1. London New York, N.Y: Penguin Books in association with New Left Review.

Menger, C. (2007). Principles of Economics. Auburn: Ludwig von Mises Institute.

Mongiovi, G. (1996). Sraffa’s Critique of Marshall: a Reassessment. Cambridge Journal of Economics, 20(2), 207–224. doi: 10.1093/oxfordjournals.cje.a013613

Sen, A. K. (1977). Rational Fools: A Critique of the Behavioral Foundations of Economic Theory. Philosophy and Public Affairs, 6(4).

Shaikh, A. (2016). Capitalism: Competition, Conflict, Crises [Kindle version]. New York: Oxford University Press.

Smith, A., Heilbroner, R. L., Malone, L. J., Smith, A., & Smith, A. (1987). The Essential Adam Smith. New York: W.W. Norton.

Sraffa, P. (1926). The Laws of Returns under Competitive Conditions. The Economic Journal, 36(144), 535. doi: 10.2307/2959866

Sraffa, P. (1960). Production of Commodities by Means of Commodities: Prelude to a Critique of Economic Theory.

Stigler, G. J. (1957). Perfect Competition, Historically Contemplated. Journal of Political Economy, 65(1), 1–17. doi: 10.1086/257878

Well, What Are Y'all Going To Do Then?

By Mack

On Tuesday, August 11, 2020, democratic presidential nominee Joe Biden, announced his VP pick, Kamala Harris, to a flurry of mixed reactions online. As with all events that make up the political theatre typically observed in our country, there were corners of praise and corners of dissent. On one hand, Harris’ nomination symbolizes a potential historic “first” for Black and South Asian women in the US. It’s an opportunity to be represented in the second highest office in the world. But for many like myself, the optics are totally overshadowed by the bleak reality of electing the white supremacist, grandfather of mass incarceration, and a woman who has unironically self identified as California’s “top cop”.

Under a true democracy, people should be allowed to ask questions. Under a true democracy, people should be allowed space for criticism and dissent. But in the illusion of a democracy that we find ourselves under in the so called united states, where elections cost millions of dollars to participate in, where all parties besides two are rendered virtually invisible, and where the two visible parties pull strings behind the scenes to usher forward uninspiring candidates, dissent is often viewed as life-threatening. We are taught that democracy should be free, but every four years the american people are held at gunpoint and forced to make a decision. Every election becomes “the most important election of our lifetime”.

When those among us who choose to dissent speak up, we are often met with a few similar retorts. They don’t vary much, but one that we can constantly depend on is, “So what do you want me to do then?” I want to recognize that often this question is asked from a genuine place. When you are held politically hostage the way we continue to be in this country, we find ourselves destitute and miseducated. People’s concerns about the future are real.

But more often than not, “So what do you want me to do then?” is a question asked in bad faith, particularly to leftists, people who identify as communists, socialists, anarchists, or any other faction of the true left, who, after lifetimes of study and lived experience, have decided to opt out of the dog and pony show that is american electoral politics. It’s a question asked to invoke shame. To suggest that we are the true failure of this country. To remind us that if we just took this thing a little more seriously, maybe we’d all be in a better place. This question often leads to arguments that don’t go anywhere and don’t yield any solutions. This question only serves to further isolate the people.

I do not like being asked this question, because I believe that most people who ask it, do not want the answer, and most certainly will not like mine. But for the last time, here, I will answer it: I don’t want you to do anything. I literally just want you to stop. I want you to read. I want you to listen. And then, and only then, do I want you to act.

The big issue with being socialized in a patriarchal society, which is to say, a society governed by and constructed in the benefit of men, is that solutions are constantly valued over concrete analysis. We continue to leap for solutions to problems that we do not fully understand. And that is why we continue to find ourselves repeating the same mistakes and asking the same questions (read: “So what do you want me to do then?”) over and over again. Before asking this question, understand that you need new tools. You need a new framework from which to understand the world around you.

Marxists value a process known as dialectical materialism. What dialectical materialism allows us to do is to step back from the noise— the non-stop hysteria on TV and the bought-and-paid-for political chatter, and actually evaluate the material conditions around us. Dialectical materialism reminds us that almost everything in life can be explained when you look at real world conditions and apply the context of history. It asks us to sit with the history of our world, and evaluate the contradictions that come up in our society. A person constantly asking “So what do you want me to do then?” is very far removed from this crucial process of interrogation. And what I need you to do is unplug from the theatre and join me in struggle and in material evaluation. In essence, I need you to take a break from being condescending as I invite you into the thought exercise of a lifetime.

“So what do we do then?” To tell you the truth, it would actually be great if you commit to coming back into the streets with us. I want you to stop ignoring houseless people in your own community. I want you to give them money and food and clothes every chance you get. I want you to band together with your friends and figure out ways to get them off the streets permanently. And I want you to study the history of houselesnees in your city. Why are so many people without homes where you live, while so many homes sit empty? What are your local politicians doing to address it and what’s taking them so long? I want you to get so angry about that, that you do something.

“So what do we do then?” To be really honest with you, there are likely hundreds or thousands of people where you live who have been laid off. I think it would be great if you got organized in your city and learned how to do an eviction blockade. Because people are about to get evicted. Bonus point: it would be really awesome if you have a home that someone who’s getting evicted could live in while they work to sort out their life. I’d love it if we stopped shaming people who are receiving the extra $600 a week in unemployment benefits. I’d like it if you developed a better class analysis and stopped going to war with people who share similar material interests as you on behalf of the ruling class. We all deserve more. I want you to get so angry about that, that you do something.

“So what do we do then?” I want you to figure out what resources the elderly in your community need access to. Can you help someone do some grocery shopping? Is an elder struggling to afford prescriptions? As it stands, no one running for office in this country is interested in even discussing universal healthcare. Perhaps you can help an elder pay for their meds? Maybe do some crowdfunding to help them afford them? What about the single parent households where you live? Will you be a resource to those who are about to struggle with starting virtual learning in the fall? Can you talk to them and find out what they need? Can you and a group of your friends mobilize around that? I want y'all to get so angry about what’s about to happen, that you do something.

“So what do we do then?” Well, right now we’re living through a moment where more people than ever are ready to explore getting rid of one of the deadliest forces in our country: the police. At this moment, Harris wants to “reimagine” them, an exercise we’ve done before with no result, and Biden wants more of them. It’s likely that with the current presence of police, your community already isn’t safe. Are you a cishet man? If so, you should be talking with other cishet men about the ways in which women and LGBTQ+ folks in your community are not safe and may require protection. Can you organize a system of protection for people harmed in your community, and a system of accountability and restoration for those who do harm? Are you trying to put ego aside and unlearn so much of the toxicity that persists in our society? For everyone else, will you organize with folks around you on ways to divest from violence and punishment? It would be dope if you could have a conversation or two about how your community wants to handle interpersonal conflict. I think it would be great if we all took some time to think about how we model ideas like abolition in our everyday lives. I want us to get so mad about this shit, that we do something about it.

“So what do we do then?” I want you to develop a better analysis of the country you live in and begin to engage it in a more ethical way. I want you to really process what it means to live at the heart of the US empire. I want you to not be ok with disposing of the lives of Black and Brown people in the global south on the premise of representation. Change.org petitions aren’t cutting it anymore. I want you to interrogate why you even want to be represented as the face of the death machine that is the united states. No more Black Panther cosplay until you understand the politic that set them on fire. I want you to be pissed off about the fact that you’ve never participated in a truly democratic election in your entire life. I want you to get angry about the electoral college. I want you to stop hypothetically asking me “So what are you going to do then?”, and maybe ask yourself what YOU are going to do in the event that November 2020 ends up being just like November 2016— a scenario where your favorite war criminal wins the popular vote, but still loses the election.

What a proper analysis of our situation tells us is that we did not get here by some slip of a lever. Nothing about our current situation is by mistake. The path that we continue to go down is totally predictable, in fact, people have been theorizing our current reality for decades. What a proper analysis tells us, is that if we don’t completely halt and bring the US empire to its knees, it is going to swallow the rest of the world, and when it’s done, it’s going to cannibalize itself. What it tells us is that until we wake up and stop feeding the machine, nothing is going to change. The only realistic and material way to stop this, is to start building a new world from the ground up. First, with ourselves, and then in our communities.

Via electoralism, we are being continuously asked to feed into our own demise. And no matter how much people claim “we can do both”, history shows us that until we don’t, by and large we continue to rely on elections to solve our societal problems. But no matter who sits at the helm, the machine is never going to slow,  turn around, or stop. The only path this machine is taking, is forward. So please don’t treat questions like “So what do we do then?” like big jokers in a game of spades. Before asking “What are yall going to do then?” or “What are the alternatives?” understand that those who fully understand the problem aren’t looking for alternatives. We’re trying to build something new, and we are asking you to join us.

Gold and Oil: A Tale of Two Commodities

By Contention News

Enjoy this special edition of Contention News — a new dissident business news publication — with analysis exclusive to Hampton Institute. You can read more and subscribe here. 

Gold broke $1,930 an ounce this week, its highest level ever. This follows weeks of record inflows to gold-related exchange traded funds (ETFs), and comes alongside silver’s biggest weekly gain in four decades.

Oil also advanced last week, but prices remain depressed -- the fracking industry now faces “extinction.”

Solving the puzzle of how metals can be gaining while the production of the most crucial commodity of our times can “peak without ever making money in the aggregate” unlocks important insights into how our global system works at its core. 

Money and the world of commodities

To repeat: money exists to circulate commodities. [1] Anything can serve as money as long as there is a stable relationship between the value of money at large and the world of commodities it circulates. The best way to do this: pick a representative commodity to serve as money. [2] Metals have low carrying costs and are easily divisible, so most epochs have settled on gold or some other metal for this purpose.

Since 1973, however, the world money system has not relied upon a representative commodity. Instead it has relied upon the United States to use political and military means to keep commodity prices stable. [3] The easiest way to keep prices steady: pin them down. Prices and profits serve as the signal for action: higher commodity prices = higher input costs = squeezed margins. 

Politicians don’t have to worry about the monetary system, they just have to think about corporate earnings. 

Oil prices and economic crisis

This worked for most of the world’s commodities save one: petroleum. The oil crises of the 1970s prompted a multi-year inflation crisis and economic “stagflation.” The United States responded with the Carter Doctrine, which defined the free flow of oil in the Persian Gulf region as a matter of U.S. national interest, justifying persistent military presence in the region and strategic alliances with key oil-producing states to keep prices low.

This system broke down between 2003 and 2008, with oil prices spiking more than $120 a barrel over that period. What caused the spike? The most likely causes:

• unanticipated popular resistance to the U.S. intervention in Iraq 

• accelerating energy demand from China’s rapid economic development

• significant financial speculation [4]

This price rise reached crisis levels in 2008 immediately prior to the Great Recession. Correlation isn’t causation, but it isn’t out of line to think that rising fuel and other commodity costs might have prompted an uptick in mortgage defaults. The same goes for investors selling off previously iron-clad securities as prices in general grew unstable. 

Fracking provides a crucial response to this kind of crisis. Not profitable under normal conditions, rising prices draw investment into the sector, bringing on new supply, driving prices down again. Companies borrow big to get started and go bust quickly, but executives get their golden parachutes, creditors get their settlements, attorneys make killer fees, and large firms gobble up all the abandoned assets. Only oil workers, royalty owners, and taxpayers lose.

Gold’s moment today 

Now a new crisis from outside the energy sector has destroyed demand and plummeted prices. [5] Central bank “money printing” in response should be inflationary, and thus the rise in gold prices, according to conventional economic wisdom.

Except that conventional wisdom is actually backwards. The money supply does not determine prices, commodity production determines how much money you need. If production goes up or production costs get bid upwards, [6] you need more money. Money gets pulled out of savings, banks increase lending, and the supply and velocity of money goes up.

Simply pouring more money into a depressed market, on the other hand, drives that cash into savings. This oversupplies money markets, driving down interest rates. As real rates — interest minus expected inflation — dip into negative territory, gold’s zero yield becomes a better bet than anything else. That’s how you end up with low oil prices, a collapsing fracking industry, and rising gold values. 

But now U.S. political failure is putting the whole dollar system into question over and on top of this. The result: investment flowing out of the dollar and into the yuan and the Euro. Without a clear alternative to the dollar as “world money,” gold is even more attractive as an asset. If rising demand in countries outside the United States drives up oil costs, price instability could make it even better. 

The puzzle still has pieces that have yet to be placed, but the image is clear: a fragile system is coming to an end, and when it falls who has the gold will rule. 

For more anti-imperialist business analysis, subscribe to Contention. 

Notes

[1] Much of the analysis here is inspired by collective study of The Value of Money by Prabhat Patnaik

[2] Any advances in the productive forces at large will shift the marginal value of all commodities, the money commodity included. Industrialization, for example, allowed the same amount of labor-power to produce a larger quantity of commodities, lowering the marginal value of each. Industrialization did the same for gold production, shifting its relative value to the world of commodities in the same way.

[3] The recent right-wing coup in Bolivia represents an example of this strategy. The United States could not tolerate an independent government controlling a significant supply of lithium. Even if Tesla buys its lithium in Australia, the prospect of an anti-colonial government controlling enough supply to boost prices — especially in alliance with China — not only impacts the automotive industry, it actually poses a risk for the whole monetary system. 

[4] Another way of putting this: the falling rate of profit produced rampant financialization which collided with class struggle against imperialist occupation and Western hegemony to destabilize commodity exchange on a fundamental level. 

[5] The crisis is internal to capitalism, not exogenous, the result of rampant deforestation and imperialist supply chains. See Rob Wallace et al. “COVID-19 and the Circuits of Capital.”

[6] Bid upwards by class struggle — workers fighting for higher wages, peasants demanding fairer prices for their outputs, colonized countries taking charge of their resources, etc.

Remembering Guaidó’s Last Stand

[Photo: Mark Wilson/Getty Images]

By Matthew Dolezal

Originally published at the author’s blog.

The year of our Lord 2020 will likely go down in the history books as one of the most existentially ridiculous years ever. It began with President Donald Trump belligerently assassinating Iranian General Qassem Soleimani, who was on a peace mission in Iraq. Unlike many controversial Middle Eastern figures, Solemani was universally beloved in Iran and played a leading role in the defeat of ISIS in Syria. Shortly thereafter, Chinese officials isolated a novel coronavirus strain noticing a strange influenza-like ailment afflicting residents in and around the city of Wuhan weeks earlier. Needless to say, the coronavirus behind what is now referred to as Covid-19 has led to a massive global pandemic. On May 25, with said catastrophe in full effect, a white Minneapolis police officer lynched an unarmed, nonviolent black man named George Floyd, causing nationwide rebellions and calls to defund/abolish the institution of American policing. And that’s just the tip of the quickly melting iceberg.

It has certainly been a hell of a year. But there’s a special little story that may have barely registered on the radar of all but the most avid connoisseurs of current events. During the first week of May, a ragtag gang of mercenaries launched from Colombia and was quickly apprehended by Venezuelan forces and socialist fishermen after attempting to invade the neighboring country via the coastal La Guaira State and the peninsula of Chuao. In the wake of this misadventure, news broke that two of the approximately sixty combatants were in fact American citizens and former Green Berets Luke Denman and Airan Berry. This embarrassingly botched mission, coined “Operation Gideon”, was quickly revealed to be yet another coup attempt against democratically-elected Venezuelan President Nicolás Maduro and the Bolivarian government more broadly. A leaked contract described tactics that included captures, assassinations, drone strikes, and even death squads in order to “liberate” the oil-rich nation.

The lead planner behind the foiled operation was none other than Silvercorp CEO Jordan Goudreau. Gourdreau's Florida-based private security firm was contracted for $212.9 million, yet only offered the aforementioned mercenaries between $50,000 and $100,000 each for their life-threatening services. Silvercorp USA initially began with hopes of converting military veterans into school security personnel — theoretically to protect students from school shooters for a small subscription fee — but the scheme appears to have been shelved. Gourdreau, himself a U.S. Army veteran, teamed up with retired Venezuelan General Cliver Alcala, who had previously been involved in various coup plots, often with assistance from the right-wing Colombian government. This was supposed to be Silvercorp’s big break.

As journalist Lucas Koerner summarized, “Jordan Goudreau, 43, was responsible for training a contingent of 300 Venezuelan army deserters in Colombia, who were to penetrate Venezuela in a heavily armed caravan and seize the capital of Caracas within 96 hours.” These details and more had been laid out in the aforementioned contract, which, thankfully, also contained an equal opportunity employment clause, promising to be inclusive “across gender, ethnicity, age, disabilities and national origin…”

One of the most notable aspects of the contract, however, is the fact that it named Juan Guaidó as the operation’s “Commander in Chief.” Guaidó, who initially denied any involvement, is a disgraced Venezuelan politician who clumsily declared himself “interim president” of the Bolivarian republic early last year and has since become embroiled in a corruption scandal.

The political trajectory of Guaidó is fascinating in its own right. In 2007, after graduating from Andrés Bello Catholic University in Caracas, Guaidó moved to Washington, D.C. to study under neoliberal economist Luis Enrique Berrizbeitia at George Washington University. Later that year, he took part in anti-government rallies after the Venezuelan government declined to renew the license of Radio Caracas Televisión (RCTV) — a privately owned station that played a prominent role in the 2002 coup attempt against then-president Hugo Chávez (an event chronicled in a documentary entitled, "The Revolution Will Not Be Televised"). And thus began Guaidó’s tumultuous tenure in the realm of Venezuelan politics.

The young Guaidó continued taking part in anti-government demonstrations with “Generation 2007” youth activists, and, in 2009, helped establish the Popular Will Party with infamous right-wing political figure Leopoldo Lopez. During the subsequent years, Guaidó met with various regime change specialists and wealthy business owners, and even participated in the violent guarimbas in 2014, which aimed to destabilize and ultimately overthrow the government. The emerging political figure then proceeded to publicly whitewash the deadly tactics used by right-wing protesters, presenting himself as a polished and professional advocate for democracy.

Guaidó also participated in Venezuela’s National Assembly, spending many years as an alternate deputy, until the 2015 elections when he narrowly secured a seat on the governing body. The opposition-dominated National Assembly eventually selected Guaidó as its president — a position that is awarded on a rotating basis. This new development made Guaidó the perfect candidate for Washington’s regime change efforts. Despite still being unknown to 81% of Venezuelans, Guaidó declared himself “interim president” on January 22, 2019 with the full support of the Trump administration. What followed was a series of Western media misinformation campaigns, bungled coup attempts, and, after all else failed, a new wave of U.S. economic sanctions that killed an estimated 40,000 Venezuelans in just one year.

After losing his National Assembly seat in early January, 2020, Guaidó staged a childish scene in which he attempted to climb over the fence surrounding parliament. The floundering politician then faded from the spotlight until the recent failed incursion. Indeed, Operation Gideon — also referred to as “Stupid Bay of Pigs” — appears to have been a pathetic, last-ditch effort to install Guaidó as Venezuela’s president and implement a program of neoliberal “shock therapy”, primarily focused on privatizing the country's vast oil reserves.

Though appearing exotic on its surface, this quaint anecdote also fits into the “bigger picture” of 2020’s troubling zeitgeist. As part of its long-standing policy of violent imperialism throughout Latin America, the U.S. government funded the aforementioned 2002 coup attempt in Venezuela, hoping to oust popular president Hugo Chávez. Despite its consistent two-decade commitment to disrupting the progressive Bolivarian Revolution, the world’s only remaining empire has evidently failed miserably. This defeated regime change effort mirrors other recent U.S. foreign policy failures, such as that of the devastating Syrian proxy war. In keeping with its increasingly desperate imperial ambitions, the U.S. has now lashed out against China — its main competitor on the global stage and a nation that has aided Venezuela amid the aforementioned brutal sanctions. The epic downfall of Juan Guaidó is not only a tale of personal and professional shortcoming, but could also symbolize a decline in the neoliberal global order more broadly, with new possibilities on the horizon.

Childhood and Exodus

By Richard Allen

Originally published at Theology Corner.

…Truly I tell you, unless you change and become like children, you will never enter the kingdom of heaven.

Matthew 18:3 (NRSV)

The praxis of the linguistic animal does not have a definite script, nor does it produce a final outcome, precisely because it continuously retraces anthropogenesis.

Paolo Virno, When the Word Becomes Flesh: Language and Human Nature (2015)

By any reasonable metric, I am a bad Marxist. I never finished reading the first volume of Capital. Moreover, my entrance to the Marxist ecosystem came through a circuitous route, beginning with Christian appropriators of Derrida, slowly working through assorted figureheads within twentieth-century critical theory, and settling on the Italian autonomia movement as my base framework. Clearly, orthodoxy is not my strong suit. Likewise, one might also say that I am a bad Christian. I tend to bristle at vehement defenses of objectivity and static truth within Christian discourse. Certainly, it would be unfair to label oneself as “Christian” without basic affirmation of specific theological assumptions. However, suffice it to say, I find inventiveness a far more enticing approach than mere acquiescence to “the way things are.” Truth, at least the sort of truth necessary for spiritual or political liberation, needs more emphasis on radical potential compared to aged rigidity.

One of the underlying questions common to any version of Marxist thought and practice is: how does one exit an oppressive environment? What tools, paths, and ideas aid the quest for liberation? How do we actualize liberation? Furthermore, we see that this question assumes any oppressive environment exists within tangible, fleshly materiality. In other words, even in spiritual or religious contexts, oppression always takes material form, despite any connection to metaphysical or revelatory ideas. It affects our bodies and consciousness. We sense this cognitively and feel it physically. It changes the material nature of our existence. Put simply, if oppression always takes a material form and alters our tangible experience of the world, then liberation will always respond in like kind. If oppression is material, so too is liberation.

Returning to the initial question—how does one exit an oppressive environment?—it seems clear that a turn toward static truth is not necessarily the wisest decision. How can we solely rely upon elements and ideas of old in order to actualize the liberation we seek for oppressed peoples? In my view, a turn toward inventiveness, the process of creating “new” truth by “resting” within the expansive field of pure potentiality (more on this later), carries within it greater capacity for liberation. This is not to say what passes for orthodoxy in any tradition, spiritual or otherwise, holds no value. Rather, at some point we must return to a new understanding of subjectivity and being in our way of analyzing the world so that we can more easily see through the structures which sustain oppression. We must recognize that as conditioned subjects within the ecosystem of late capitalism we learn to make basic assumptions which arguably sustain the very structures that sustain oppression, even if our intention resists that assumption (I’ve written more about this here).

In his latest piece for Cultural Politics entitled “The Aesthetics of Exodus: Virno and Lyotard on Art, Timbre, and the General Intellect” educator and activist Derek R. Ford uses Virno’s analysis of potential, performance, and the “general intellect” in conjunction with Lyotard’s treatment of art and music to describe an “exodus” from subjectivity as such toward a “de-individualized,” fugitive retreat from capitalism. Ford offers an erudite reading of both Virno and Lyotard, and his use of aesthetic theory to ground this fugitive act toward exodus carries great potential for liberative politics. My goal in this response is to expand upon Ford and Virno’s work. As an (informal) student of Virno and the Italian autonomia movement more broadly, I share similar conclusions to what Ford suggests. Say what you will about the sometimes fraught relationship between postmodern thought and Marxism (in this case, represented by Lyotard) or autonomia and Marxism (represented by Virno) there is certainly no shortage of radical, liberative possibilities when these respective traditions encounter each other.

More specifically, Virno’s treatment of infancy and the radical potential inherent to language should be a necessary component of any radical politic. Ford describes Virno’s reinterpretation of the “general intellect” in Marx’s writings as “indeterminate,” preferring instead to read the general intellect as pure potential rather than “particular knowledges and thoughts.” As I’ve written elsewhere, Virno’s understanding of “potential” as an unlimited field of productive praxis—since the linguistic animal speaks but does not exhaust the potential of the speech-act—represents a helpful corrective to aged assumptions common to the most militantly orthodox Marxists among us. In short, by recognizing a space wherein praxis finds its potential before actualization allows for a renewed understanding of how much power we have in the pursuit of liberation or “exodus” (both for the individual and the multitude). If I consciously remain aware that my speech does not ever touch the boundary lines of pure potential, which lies in wait before the utterance, then I can find new ways of living and being through the field of potential, boundless and unformed as it is. However, in order to more clearly see the usefulness of said potential, we must all undergo “desubjectification.”

In Virno’s text When the Word Becomes Flesh: Language and Human Nature, he describes the speech-act as ritualistic. “The ceremony of the voice, the occurrence of speech, makes the speaker visible as the bearer of the power to speak” (p. 56). Language is performative, similar to the virtuosity of a musician playing an instrument or an actor transforming into another character. There is something ethereal to the act of speaking, where we enact cultural and environmental rituals unconsciously, expressed through the declarative utterance (“egocentric”) “I speak.” We bring to presence the power of language’s potential as we speak. Additionally, Virno brings the “egocentric” language of children into play just a few pages over, “The child, when verbally announcing what he or she is doing, is not describing an action, but completes a secondary, auxiliary action (the production of an enunciation), whose goal is the visibility of its subject” (p. 63). When one speaks, they perform two tasks: first, they consciously emit vocalized sounds; second, they unconsciously enact “anthropogenesis,” or the production of the subject. This second task, which Virno describes as an “auxiliary action,” is where we find the liberative potential of human language. It is how the subject presents themselves as a subject, or how they “individualize” themselves, which means that behind any form of language (intelligible or otherwise) there lies a space of limitless potential, the potential for speech, which cannot be exhausted. If the multitude understands the power of potential then they can more easily engender new speech to actualize liberation.

Likewise, Ford is correct when, in tandem with Virno, he writes:

Through the acquisition of language, the child is separated from their surroundings through individuation, hence the significance of “I speak.” By learning language, we encounter the disjuncture between the world and ourselves because we discover that we can change the world and that the world can change us.”

Through childhood and the development of our linguistic faculties, we undergo conscious and unconscious individualization, a gradual understanding of our distinction from the world even as we recognize our place within it and its effects upon our life. The problem lies in the ways capitalism forms our respective identities or individualization as we practice the act of speech. This conditioning teaches us prescriptive or authoritative ways of speech which only serve to reify existing structures and assumptions. Thus, while in a general sense, despite these oppressive restrictions upon the way in which the individual speaks under capitalism the individual never truly loses access to pure potential behind the utterance, exodus allows us to retreat from the confines of capital in order to learn new ways of speaking. Because the capacity for speech is limitless, the potential for new language to unlock liberation awaits us, so long as we make an exodus from capitalism. The way out is through a regression of sorts or a “de-individualization,” a return to childhood. In Ford’s words, “As a recursive state, childhood…is the return to potentiality in order to actualize differently.”

Turning our attention toward the biblical text cited above, when asked who deserves recognition as the “greatest” in the kingdom of heaven, Jesus responds with a seemingly odd analogy. Bringing a child to his side, Jesus instructs his followers that “unless you change and become like little children, you will never enter the kingdom of heaven” (emphasis added). At first glance, Jesus’ words seem to refer to obvious differences in societal status (the child being one of the “lowest” members of society) as a way to highlight the necessity of humility when responding to the divine. However, in light of what Ford and Virno suggest in reference to childhood, we see an expanded, materialist vision of the spiritual insight Jesus offers. Childhood is not merely a state of simple humility, although it includes this dimension. Instead, childhood is the closest any of us come to understanding and accessing the pure potential of language. Put another way, childhood is the closest we come to the innocence of simply being human in the world, unburdened by the demands we experience later in our life through capitalist individualization. If childhood is where we learn language, then the only way we can actualize liberation under the confines of the world is to learn to speak differently. In the same way that the only way one can “enter” the kingdom of heaven is to become like a child, the only way we can “enter” liberation is to, in some sense, leave “adulthood” or what passes for our being as we age. I must emphasize that all of this takes place within material form. None of this regression is possible in the abstract. It relies upon the physical and biological capacity to speak.

Thus, I contend, in what I believe to be a shared pursuit of both Ford and Virno, that the only way to liberation is through an exodus of being, leaving behind and stripping away the linguistic assumptions of late capitalism. By returning to a state of being closest to the often untapped potential of speech, we can more easily learn new words, new phrases, and new public utterances which aid the quest for liberation. This process de-individualizes from the world in order to fashion a radical understanding of subjectivity over and against the assumptions made toward subjectivity through capitalism. As Ford states:

Exodus subverts the dominant ideology of individuality by posing childhood as a project that connects the individual back to the general intellect in its potentiality rather than its potential actualizations.

In short, in order to progress, we must first regress and mine the fields of potential we have long forgotten; we must become like children in order to retrace our steps in the pursuit of justice and liberation for all. As mentioned earlier, what passes for orthodoxy tends to reify existing structures and assumptions. Orthodoxy will not save us. We must remake the world entirely, and the only path toward this vision is through childlike inventiveness.

Let us all make the exodus from subjectivity, individualization, and being toward the horizon of pure potentiality, where like children, we have the chance to form ourselves.

Yes, the U.S. Response to COVID-19 is a Genocide

[PHOTO CREDIT: Aaron Ontiveroz/MediaNews Group/The Denver Post via Getty Image]

By Alex Harley

Republished from Emphasis Added.

A Yale epidemiologist was castigated for equating the virus to a genocide in a series of tweets. Why? The answer lies in a foundational understanding of white supremacist capitalism: death for profit isn’t murder.

As hundreds of thousands, if not millions, of people living in the U.S. protest racist police violence in all fifty states, another act of racist violence is being perpetrated through governmental policy and business practice: The COVID-19 Genocide.

While scientists agree that the virus itself was a natural, and not lab-created phenomenon, its handling in the US is an unequivocal disaster. As of June 29, 2020, the crises is forty-two times the size of 9/11 casualties: 128,000 deaths. So where are the calls for accountability and justice?

It is not despicable to characterize the U.S. response to COVID-19 a genocide. It is imperative. It is an assertion that clarifies U.S. behavior. Unfortunately, MacLeod’s hesitance to call it genocide is no outlier. It is the default reaction from defenders of the status quo.

One British legal authority agrees that the case for genocide is weak, citing “specific intent” (Heieck, 2020).

But it is no insult to victims of state and vigilante violence to call it genocide. It is the acknowledgement of historical record.

The capitalist ideological foundations of the U.S., and all modern states built on settler-colonialism, do not frame death through exploitation as a crime. It’s the price of doing business. They’ve been in excess of deadly business for over four centuries now, and it hasn’t stopped.

When one individual inflicts bodily injury upon another such that death results, we call the deed manslaughter; when the assailant knew in advance that the injury would be fatal, we call his deed murder.

But when society places hundreds of proletarians in such a position that they inevitably meet a too early and an unnatural death, one which is quite as much a death by violence as that by the sword or bullet; when it deprives thousands of the necessaries of life, places them under conditions in which they cannot live — forces them, through the strong arm of the law, to remain in such conditions until that death ensues which is the inevitable consequence — knows that these thousands of victims must perish, and yet permits these conditions to remain, its deed is murder just as surely as the deed of the single individual; disguised, malicious murder, murder against which none can defend himself, which does not seem what it is, because no man sees the murderer, because the death of the victim seems a natural one, since the offence is more one of omission than of commission. But murder it remains.

- Fredrich Engels, The Condition of the Working-Class in England

The (predominantly white) federal government and the (predominantly white) business elites are both guilty of sacrificing working people to profit from and during the COVID-19 crisis. Their (predominantly white) adherents, with their anti-lockdown demos, anti-mask violence, victim blaming, hoax conspiracy theories, and scapegoating of China, are equally culpable.

The rulers of the U.S. do not recognize their own extant record of mass murder: not in illegal military operations; not at the hands of police; not in the workplace; not in the streets. The nation socializes its citizens to normalize systemic murder, successfully. It is a critical piece of settler-colonial ideology. Deception is another key piece.

From “Heroes” to Fodder

Early on in the crisis, front-line workers were heralded for their bravery. They were called “heroes”. But in reality, the fanfare was a just nice way to say “Get back to work!” And this, of course, was reserved for those who weren’t laid off.

Corporations were quick to slash their rosters as soon as the crisis reared its head. The Federal Government acted just as quickly to “bolster the economy” by pouring trillions directly into corporate pockets. Corporations, and especially their rich executives, made out handily.

Between March 18 and April 10, 2020, over 22 million people lost their jobs as the unemployment rate surged toward 15 percent. Over the same three weeks, U.S. billionaire wealth increased by $282 billion, an almost 10 percent gain. (Institute for Policy Studies, 2020)

To secure the fortunes of the wealthy, businesses must stay open, with severely reduced staff (and overhead!). Retail and service employees must relent to exposing themselves to infection by interacting with large, diverse segments of the population. They must take on new duties, including enforcing social distancing measures, which exposes them to violent reaction. Doctors and nurses must work without enough equipment, beds, or sometimes even space. And all the while, protests against police violence must be brutally repressed with the billy club, rubber bullet, sound cannon, and tear gas canister. In some cases, the police have directly targeted children and the elderly. And, the police continue to murder civilians.

The connection between racist policing and racist capitalism must be highlighted. They are thoroughly enmeshed.

COVID-19 in Racial and Ethnic Minority Groups, CDC

Nationally, hospitalizations show a rate 15 times higher for oppressed nation’s peoples as opposed to whites. The statistics of death rates among them are equally disparate (Ford, 2020).

Race gaps in COVID-19 deaths are even bigger than they appear. Brookings.

Reservations have been some of the hardest hit areas in the nation. But instead of aid, the federal government sent body bags to the Seattle Indian Health Board (Grande, 2020).

What is this brazen attitude, if not dripping with intent? The intent is to make money, whatever sacrifice working and oppressed people must make.

How do you characterize a nation which denies its people access to a functional, modern health system by means of predatory business practices and fiscal austerity? And when centuries of racist capitalist underdevelopment magnify the crisis within the oppressed and working class communities of the US?

This is not by accident, but design. Uneven capitalist development and sheer disregard for human life have proven “profitable” time and time again; and, will continue to do so. Theft and murder are profitable. But who are the murderers? Can we see them clearly?

Responsible Parties

The virus is not the main agent; willful, deliberate neglect is; the result of governmental policies and business operations which have identifiable delegates. There are responsible parties. We must not lose sight of that.

Working solutions were and are available to solve this crisis. This is illustrated by the disparity in how effective certain responses have shown to be across the globe. Nations who took the crisis seriously have fared demonstrably better than the US. They mustered human and material capital to create solutions, during the time they bought through strict containment policies.

Instead, the U.S. flouted scientific consensus and advice from other nations. The U.S. eventually locked down, but did nothing substantial with the time bought. All of the states which re-opened under business and right-wing popular pressure have all surged again (Hawkins, 2020). The infection curve should look like a bell by now; instead, it looks like an insurmountable mountain. And until a vaccine is found, it will continue to do so, if the U.S. ruling class continues its regime of denial.

They withheld vital aid through confiscation of protective equipment and economic sanction. They continued high-tech military operations during a global viral outbreak. In May, the U.S blocked a vote in the UN for a global ceasefire (Borger, 2020). The rulers of the U.S. do not seek peace, but war. War with the world’s oppressed people, domestically and abroad. War for profit.

At every turn, American bourgeoisie will try to make money, no matter how insidious it may seem. As reported by Qiao Collective, US corporation Gilead’s vaccine is slated to cost the American public “$3,120 per [patient] with private insurance.” If China finds a vaccine, they will make it a “global public good” (Qiao Collective, Twitter).

While the ruling class can largely isolate themselves in their lavish homes, padded from infection by layers of workers, the crisis outside is just a complication. The deaths of workers are simply inconvenient, when there is a surplus of unemployed laborers from which to draw. Our deaths truly mean nothing to them. If a guardian‘s charge dies by neglect, it is considered murder. What about when a nation allows its subjects to die?

We should consider it murder.

Taken independently, the historical abuses perpetuated by the leaders and ruling class of the United States are reprehensible. When viewed as a singular phenomenon, they amount to genocide. COVID-19 is just another blood-soaked chapter in the American project of unlimited exploitation.

The Minneapolis Uprising and the Heavy Stick of Reaction

[PHOTO CREDIT: David Gannon/AFP/GETTY]

By Ashton Rome

Republished from Left Voice.

Vladimir Lenin is once supposed to have said, “There are decades where nothing happens, and there are weeks where decades happen.” The events following the murder of George Floyd prove the dictum. Floyd was murdered on May 25, and less than a month later, the world looks completely different. The cops who killed Floyd were fired, and Derek Chauvin, who had his knee on Floyd’s neck for almost nine minutes, was charged with second-degree murder. The other three officers, Alexander Kueng, Thomas Lane, and Tou Thao, were charged with aiding and abetting second-degree murder and second-degree manslaughter. Floyd’s murder happens in the broader context of the murders Breonna Taylor, Ahmaud Arbery, and now Rayshard Brooks. Within the first 10 days after Floyd’s murders, protests spread from Minneapolis to cities around the country and internationally, to Germany, England, and elsewhere. Not surprisingly, it has also inspired state and reactionary responses. This rebellion has quickly gone to phase 2 — the heavy stick of the state.

The Carrot and the Stick

The protests are going on during a period of economic and social crisis, exacerbated by a global pandemic and fueling — and being fueled by — a historic decline of U.S. global hegemony. The crisis is marked by a collapse in confidence in traditional institutions of power in the United States, and growing approval of “socialism,” especially by young people and people of color. It is yet to be seen how much the capitulation of Bernie Sanders’s campaign and his endorsement of Biden has affected people’s political consciousness, but it is likely a significant factor. It has at a minimum prompted reflection on the political expediency of inside-outside and similar strategies. When the old rules and traditional institutions of a society can no longer deliver stability amid crisis, the ruling class is prone to rely on naked violence from the state and “stormtrooper”-like elements.

In the face of crisis, the capitalist class maintains power by using a combination of “carrots” and “sticks,” reform and repression. The exact ratio depends on the ruling class’s ability to contain the crisis at particular moments. The stick is often used during a crisis of legitimacy, in which the ruling class feels itself under existential threat. The reforms are meant to placate the most moderate wings of the movements. They are also an ideological tool to convince a movement that the system is “reformable,” which means that more confrontational approaches to politics are not needed. The stick, on the other hand, is meant to serve both an ideological and coercive goal — to show what happens when individuals and movements verge outside of acceptable boundaries.

A good example of these tactics is found in response to the unrest in the 1960s. In response to the challenges against what Martin Luther King called the “three evils” (racism, poverty, and war), the state combined repressive initiatives like the Counter Intelligence Program (Cointelpro) and LBJ’s Omnibus Crime and Safe Streets Act with reforms like the War on Poverty and initiatives that supported “Black capitalism” and Black elected leadership. In his book Black Awakening in Capitalist America, Robert Allen argues that the ruling class was terrified by the mass movements and promoted the ideas of “Black capitalism” and community development programs to redirect current and potential radicals into safe channels. By contrast, Cointelpro was the stick — surveilling, infiltrating, discrediting, and disrupting organizations deemed subversive.

As the U.S. economy shifted toward neoliberalism, the carrot has been significantly impoverished, consisting now mainly of favorable media attention, foundation funding, and positions within nonprofits. “Black capitalism,” embodied in the 1960s slogan “Black Faces in High Places” — now called “trickle-down social justice” — was promoted as a way of integrating a section of Black Americans into mainstream society. These “representational demands” were placed in contrast to the revolutionary aims of the Black Left like the Black Panther Party.

Under neoliberalism, nonprofits have also proliferated, existing within a set of relationships that link political parties and the state, donor foundations and educational institutions, leftist movements and capitalist enterprises. Because this arrangement involves class collaboration instead of class conflict, nonprofits are ripe for co-optation. The number of nonprofits in the United States has risen from 3,000 in 1960 to more than 1.5 million in 2016. Individuals and charities typically fund the bulk of these organizations, alongside philanthropic foundations redistributing a micro-percentage of the wealth accumulated by the 1 percent.

Funding from the 1 percent and nonprofits’ needs for funding have helped the financial backers direct and moderate organizations and movements. In her essay “The Price of Civil Rights,” Megan Francis shows how the NAACP’s early civil rights litigation agenda was redirected from a focus on white-supremacist violence and lynching during the crucial Red Summer of 1919 and redirected toward education and integration. The author discusses a phenomenon called “movement capture,” which she describes as “the process by which private funders use their influence in an effort to shape the agenda of vulnerable civil rights organizations.”

The usual co-option will unlikely hold in the face of the current level of social instability, anger, and scale of the protests. As Lara Putnam, Erica Chenoweth, and Jeremy Pressman point out in the Washington Post, protests are even spreading to conservative towns in rural and suburban America. They have likely occurred in more places and in greater numbers than even the Women’s Marches of 2017. The twin crises of the pandemic and economic downturn have the potential to incite protests beyond even what occurred after the 2007–8 economic crisis. Currently, just 19 percent of Americans say they can trust the government always or most of the time, among the lowest levels in the past half-century. The burning of the 3rd Precinct police station in Minneapolis is more popular than Biden and Trump. Though May’s unemployment figures may look positive due to “cooking the books,” the unemployment rate is the worst since World War II, with some estimating that 42 percent of recent layoffs could become permanent job losses.

Fascism

Political and economic crises spur mass action and sometimes even revolution, but they also provoke state reaction and counterrevolution. At the same time, fascism, a political movement that uses brute force to eliminate workers’ organizations and liberal democracy, unfolds in a way corresponding to the crisis that creates the conditions for it. The intense state reaction to the current rebellion, alongside the political violence and increased organization of the Far Right, should be cause for concern. Fascists seek to use the mass anger of a crisis situation like the one we now face — a crisis that under the right circumstances can lead to mass class action — and divert it through appeals to racism, xenophobia, and conspiracy theories.

During the 1960s, the Far Right grew substantially, waiting in reserve for when things got out of hand. It is important to remember that the massive civil rights movement was accompanied by the rise of far-right groups like the Minutemen, the KKK, and the John Birch Society. The latter had in 1966 an estimated 80,000 members, operating with a revenue of $5 million. According to Eckard Toy in The Right Side of the 1960s, the John Birch Society’s inaugural meeting included among its luminaries President Eisenhower’s first commissioner of Internal Revenue, a former personal aide of General Douglas MacArthur, two past presidents of the National Association of Manufacturers, a banker, and a University of Illinois professor and rich businessmen. These far-right groups and others aimed to figure out how to mobilize the white working class in the interest of a reactionary and violently oppressive racial order. This goal subsequently became central to the remaking of the Republican Party, reaching its apotheosis in the current presidency.

Protests by heavily armed conservative activists against the Covid-19 lockdowns suggest what can be expected if traditional state means of controlling the working class fail. The protests included an array of explicitly far-right groups, including the Proud Boys and militia groups like the Boogaloos. The majority of the attendees were small-business owners but also disgruntled workers upset by the economic devastation due to the pandemic and lockdown.

The Michigan Freedom Fund, cohost of one such rally, received more than $500,000 from the family of Secretary of Education Betsy DeVos, which includes among its luminaries the far-right businessman and mercenary-supplier Erik Prince. It was also assisted by Fox News, which ran favorable coverage, and President Trump, who used Twitter to mobilize his base around the protest.

State Repression

Scenes reminiscent of Ferguson have appeared throughout the country as states have deployed the National Guard and militarized police to enforce curfew orders and protect private property. So far, the National Guard has been activated in 15 states and Washington, DC, and 40 cities have imposed curfews. While police in militarized gear like tactical uniforms and utilizing armored personnel carriers were seen in previous events like Occupy and the Ferguson Protests, the Blackhawk helicopter at a DC protest on June 1 and a Predator droneat a protest in Minneapolis, are emblematic of the escalation in state repression. Equally threatening, Trump threatened to invoke the Insurrection Act to deploy active-duty soldiers if governors do not themselves violently crackdown on the protests.

Such a deployment would be the first since the 1992 Rodney King riots and the 1967 riots in Detroit. From January 1965 to October 1971, guard units were used in 260 disturbances, whereas from 1945 to 1965 they were used to handle 88 disturbances. Ironically, the Kerner Commission, which produced a presidential study of the riots of the 1960s, determined that instead of calming communities, the National Guard (as well as inadequate housing, high unemployment, and voter suppression, and racial discrimination) contributed to the years of rioting. The death of David McAtee calls into question their effectiveness in restoring “law and order” currently.

Even before the current protests, Trump and the DOJ were looking for more ways to indefinitely detain people in order to curb the protests. Importantly, Trump and Attorney General William Barr used the DOJ to help whip up the far-right and “angry middle class” protests against social distancing policies. The DOJ’s actions under Trump makes it harder for it to serve the same role as it did in response to rebellion under Obama with Eric Garner. This is because Barr’s predecessor, Jeff Sessions, severely restricted prosecutors’ ability to seek consent decrees and court-enforced agreements.

Simultaneously, Trump has again invoked the threat of “Antifa” and “anarchists,” promising on May 31 that “the United States of America will be designating ANTIFA as a Terrorist Organization.” Terrorist organizations, not ideology, are typically designated by the secretary of state, and once selected, they become illegal to join. Even if Trump and the security apparatus of the state do not have the constitutional authority to designate Antifa a terrorist group, there are several essential considerations. Simply threatening to label Antifa a terrorist group may signal to law enforcement that they are expected to investigate and aggressively single out one section of protesters.

The threat could inspire the creation of a category such as “Black Identity Extremist (BIE),” which was cooked up after the Ferguson Protest. Then, it was used to justify assessments or informal investigations by the FBI, subjecting protesters to physical surveillance, informants, and other means. By singling out “anarchists” and “outside agitators,” the state can likely pursue harsh charges against one section of protesters and follow up with others.

In response to inauguration protests led by DisruptJ20, an umbrella coalition of groups, 234 people, including activists, journalists, medics, and legal observers, were arrested and charged with felonies, including inciting to riot, assaulting a police officer, and conspiracy to riot, all of which carry long prison sentences. The case of Ferguson activist and live streamer Michael Avery, who was arrested by the FBI for a social media, post is worrying. They claim that he encouraged looting in Minneapolis. Such an incident, unfortunately, will not be isolated.

Relying on police and the coercive state to subdue movements is complicated. As the degree of conflict intensifies, and the police assume a greater role in repressing demonstrations, strikes, and other forms of resistance, pressure may grow among law enforcement officers to break with the state. During times of mass action and reaction, law enforcement’s everyday functions and legitimacy are called into question, and police experience broad public hostility. This development is embodied by recent calls to “Defund the Police” as a means of curtailing departments’ coercive power. Protests tend to cause splits, as seen in the wave of Black police associations created across the country to deal with racism during the civil rights era. It has also inspired police organizations to react to crisis conditions by using trade union tactics to advocate benefits or defenses against cuts. Repression is not automatic. All these reactions by the police challenge the ordinary functioning of class rule and create another reason for the state to rely on an auxiliary of far-right militants.

The “Anarchist Threat”

Within the first couple of days of the George Floyd protest in the San Francisco Bay Area, “calls to action” were posted online, some of which could easily be attributed to right-wing trolls. The “calls” have no political content and typically call for looting. These likely fake posts created local hysteria that has whipped up the right-wing reaction, up to and including armed citizen patrols, and contributed to a wave of curfews and other restrictions on freedom of movement for activists.

Across the country, news articles have detailed the violent reactions in this environment of hysteria. Only recently, a multiracial family of four visiting Forks, Washington, was confronted by cars full of people, some with semiautomatic weapons, spouting allegations that they were Antifa. There have also been social media posts alleging buses full of Antifa protesters coming to local areas. These posts are tailored to even rural counties throughout the country. These social media posts seems to be in line with a white-supremacist strategy called accelerationism, which says that supremacists should foster polarization to “accelerate” its destruction of the current political order.

Tactics

Aside from the provocations launched through fake accounts, genuine anger has led to looting. This has led to renewed conversations on the Left about tactics. The article “In Defense of Looting,” published by the New Inquiry during a wave of “riot shaming” in the Ferguson Uprising, makes some very good points. Importantly, it shows that the distinction between violent and nonviolent protesters stems from a long-standing discourse about Black criminality and ignores that, historically, change has not come through nonviolence. The author correctly points out that the attention produced by property destruction reflects the primacy of private property for the rich. In this context, the author questions the often-repeated attack that “protesters are burning down their communities”:

Although you might hang out in it, how can a chain convenience store or corporate restaurant earnestly be part of anyone’s neighborhood? The same white liberals who inveigh against corporations for destroying local communities are aghast when rioters take their critique to its actual material conclusion.

But what is the usefulness of looting as a tactic? The article says that “it represents a material way … to help the community by providing a way for people to solve some of the immediate problems of poverty and by creating a space for people to freely reproduce their lives rather than doing so through wage labor.” This could be true at an individual level, but when we talk about a capitalist system and a state that serves the ruling class, we are talking about a question of power.

Spontaneous action like looting and rioting can help disrupt business as usual. Relying on spontaneous action, however, doesn’t get past pressuring those in power to alleviate the issue. Spontaneous action may get the ruling class to pay attention. It does not answer tactical questions like how to turn a temporary rebellion into a movement by bringing in new people. Riots bring increased attention to immediate grievances, which means funding for nonprofits, career opportunities, media appearances, and VIP visits; but by failing to address the root causes of the crisis, it results in a worsening condition for Black people.

At many protests, voting has been a major theme. In November, there will be elections for all 435 seats in the House of Representatives, 35 of the 100 seats in the Senate, and, most notably, the presidency. Joe Biden likely hopes that this uprising can be captured to bring much-needed enthusiasm to his campaign. The election might be why demands like “Dismantle/Defund the Police” have gained popularity among some elected Democrats, at least in word.

If this election cycle is anything like 2016, the Democratic Party will be cautious not to offer concrete proposals, as was recommended in a memo to the Democratic Congressional Campaign Committee. We must also be realistic and understand that no single election decides questions of power, and that the threat of fascism is not a short-term problem. The Democratic Party’s identity as a capitalist party, albeit one based in the labor and other social movements, means that it can not offer radical solutions willingly.

The risk of fascism highlights the need for a multiracial working-class movement. Though legal support, countersurveillance, and physical defense are important, it is essential to transform the current rebellion into a movement. The economic and social crisis can be exploited to grow the ranks of the Far Right, but it can also be used to build the workers’ movement. The Left can do more than demand the conviction of the four officers who murdered George Floyd. It can and must lay out a program that will address the root causes of the current crisis.

In Our Flag Stays Red (1948), Phil Piratin, an MP for the Communist Party of Great Britain, describes how the party used its tenant associations and trade union work in the 1930s and 1940s to undercut inroads by the British Union of Fascists (BUF) in his borough of Stephaney, London. The BUF, led by former Labor MP Osward Mosley, held meetings throughout the country and was making advances into working-class communities. The party organized unemployed workers in the National Unemployed Workers’ Movement and did work to strengthen the trade union movement. As well, the party famously organized counterdemonstrations like the one that led to the Battle of Cable Street on October 4, 1936.

The CP deduced that the BUF’s anti-Semitic propaganda struck a chord among some workers, but especially in areas of East London where people were living in miserable conditions and facing unemployment and low pay. The party organized demonstrations like the famous “Battle on Cable Street” that used direct action to limit the spread of the BUF and show that it could be defeated. They also organized in working-class areas where the BUF was creating a base. In the midst of its tenant organizing, the CP discovered that one of its families were members of the BUF. Piratin wrote,

I discovered that in both cases they were members of the BUF and obviously wanted no truck with us. The other was prepared to listen. We pointed out to them, so far as we could judge … that the bailiffs had the law on their side and the only thing to do was to prevent the bailiffs gaining access. This might mean a fight, but we convinced them that it would be worth while. … We called a meeting of as many tenants as possible in one of the rooms, put to them our proposals, and they agreed to make the fight. As a result of this solidarity the other family the next morning decided to take part. Meanwhile, in conversation, we asked this member of the BUF about to be evicted what the fascists had done for him. He said that he had raised the matter, but they had no intention of doing anything. This was a very valuable piece of information to be used by us in disillusioning many of the BUF supporters.

What this historical example shows is that we can undercut the basis of fascism before it forms by appealing to economic interests. This would be much easier if we had an actual left political party and left leadership in this country that could expose the limitations of right-wing populism and fascism. Unfortunately, in its absence we are left with milquetoast Democrats who dress in kente cloth and put forth Band-Aid reforms.

Conclusion

This historical example does not mean that socialists should reduce the unique oppression of the Black working class into a “secondary contradiction.” The anti-Blackness of capitalism is the skeleton key to unlocking all the contradictions of this system for ordinary working people. It exposes the role of the police and state violence in maintaining capital’s domination of society, it exposes how race and class determine who will die from the Covid-19 pandemic, and it exposes the primacy of property in our society.

This period brings profound opportunities and dangers. The crises that define this period have created openings for the Left to grow and challenge the legitimacy of traditional institutions of power and capitalism itself. Already a majority of Americans support the protests, and white Americans’ favorable perceptions of the police have dropped by 10 points to 61 percent. This is particularly noteworthy because “riots” in the United States typically cause pro-police beliefs to rise. But we must also be attuned to, and weave into our tactics, the unique conditions that exist today for the emergence of a fascist movement.

The Quest For a Revolutionary Theory: Gramsci in Althusser's Eyes

By Youssef Shawky Magdy

"There is no revolutionary movement, without a revolutionary theory"

-V.I. Lenin ("What is to be done?")

In order to continue to be a theory that interests in Reality and at the same time provides critical concepts and theoretical tools to interpret this reality, Marxist theory should not fold upon itself in a dogmatic manner, as this self closure is contradicting the theory itself and its alluding to reality, as well as its finite formulation; as the importance of Marxist theory (especially, Marxist critique to capitalism) will diminish upon changing conditions and Realities, this changing what the theory is all about.

On the other hand, we find many revisionist approaches and the harmonizing tendency with the spirit of the era: as the mechanistic and economistic views of Marxism, Neo-kantian formulations, humanistic interpretations, postmodern Marxism...Etc. All these discourses, regardless of their different forms and the conditions in which they are produced, have the tendency to minimize or cut the critical distance between Marxism and other philosophies and Ideologies.

But as we know, Marxist theory contains a critical philosophy, as it tries to absorb or enclose other philosophies within the Marxist framework; this closure means simply interpreting these ideologies from an objective materialistic stance by relating them to the social formation with its interwoven complex structures. This implies that in order to do this job, Marxist theory should not subordinate theoretically to the problematics of these philosophies which means fleeing their magic and "laying bare" what is consolidated under colorful rhetoric. What makes this clearer is the discovery of struggle between Idealism and Materialism in every ideological or philosophical system. In this context we may refer to how Lenin read Hegel, as Lenin had discovered that the Hegelian "absolute idea" is Materialistic rather than idealistic. This discovery or laying bare was done through Hegel's system itself, as Hegel had asserted that: "Logic" is a process without a subject or a center, even Logic negates itself and with that, negating the center or the beginning. This negation corresponds to scientific objectivity that Marx adopted in Das Kapital (Althusser 1971, 123).

The pioneers of this Marxist critical stance are Antonio Gramsci and Louis Althusser, as they had gone beyond the return and rereading of Marx and emancipation of Marxism from prevalent ideologies, drawing great attention to more or less successful revolutionary practices which happened around them and extracting from their critique very important theoretical conclusions.

From this stance, it is important to make up an imaginary discussion between the two figures, and that’s what Althusser did. But from the point of view of justice is it right to hold this discussion when one of the two figures didn't reply to the other? It is not that simple, as there is no winner and loser here, rather what should concern us is the struggle over the interpretation of Gramsci and currents of thoughts that try to absorb him. This struggle has originated partially because of special conditions related to the life and thought of Gramsci as can be discussed in few points:

1. Althusserian theses were directed partially to prevalent Humanistic Marxism in France, so in case of Gramsci we can't separate between theoretical abstract theses of Gramsci and what happened in Italy in the period that preceded the rise of Fascism when the labor movements had lost many decisive battles. According to Gramsci, this loss was linked to the economistic view that was adopted by Italian socialist party, this stance implies that the economic struggle (strikes and so on)  is sufficient for the workers to win their battles against capitalism , so accordingly the party was not interested in the formation of coalitions between different factions of popular classes (Simon 1999, 15) as peasants, Agricultural laborers, low middle class employees and so forth, these coalitions which would have taken a political color. And from this point we can understand Gramsci's assertion about the importance of both political and ideological moments in the struggle for Hegemony. These moments which need a kind of human volunteerism or agency.

2. In some cases we may find a difficulty to fully understand some of Gramsci's theses but of course that isn't related to the difficulty of Gramsci's style of writing or thought, but to the circumstances in which Prison Notebooks had been written as it included a severe watchful periodical inspection from the guards, this dictated a self censorship carried by Gramsci through a distracting style of writing and choosing of words. This in addition to his illness and great difficulty to have books in prison.

3. When Gramsci wrote about Marx, he warned us from oeuvres that were published posthumously, as they are far from being complete and distinct but they contain ideas which are in development and adjustment, and if the author had an opportunity to complete or adjust his works, he might denounce them or regard them as insufficient (Gramsci 1999, 715-716), this short story says a lot about what Gramsci had thought about the notebooks he was writing.

And now we can tell that the struggle about Gramsci is related to two points:

Firstly: interpretation of Gramsci, as Humanistic Marxism in France, had given a humanistic interpretation to Gramsci supported by some obvious texts, as well as the Neo-Marxist interpretation that exploits the notion of historical bloc to take in theoretically the new type of protests which can be designated as liberal, for example: 3rd wave feminism and environmentalism. The direct obvious content of these protests didn't change considerably but what changed is the social relationship that this content has kept with the whole social struggle, especially class struggle. What is obvious today is detachment of the content from the whole social framework and harmonization of these movements with late capitalist context.  

Secondly: does Gramsci represent a self-sufficient (Adequate) intellectual system? Does he provide concepts and theoretical tools (which as any tools need to be improved continuously) wich make up a system that doesn't contain any central or fundamental  problems within the structure of the theory itself (regardless of regular problems that face any intellectual system and get resolved with time)?

Roughly, we can say that Althusser was interested in the second point, which means that he didn't think that Gramsci's intellectual project can form a complete or self-sufficient theoretical system. But this didn't stop Althusser from appreciating what Gramsci asserted about the state, which can't be reduced to a coercive apparatus but also includes the civil society with its different organizations, even if Gramsci didn't indicate systematically the effect of each apparatus and its relatively different role (Althusser 2014, 242, note 7). And in other places, Althusser appreciated the welding nature of ideology that was discovered by Gramsci (Althusser 2014, 227), who said that ideology resembles cement because it connects different elements of the hegemonic/ruling bloc.

This doesn't mean that Gramsci's system doesn't contain crucial flaws that, according to Althusser, can have serious outcomes in relation to theoretical and political practice.  For example, Gramsci's failure to formulate an obvious relationship between philosophy and science (Althusser 2016, a letter) as we will discuss shortly.

Althusser's critique, which is somehow scattered in various texts, culminated into an article which then became a chapter in Reading Capital. This article will be our main source besides Gramsci’s Prison Notebooks.

The distinct trait in Gramsci's texts is "humanistic historicism," which means that every social phenomena is in an ongoing state of change and historical development as successive historical eras, thus there is no kind of knowledge that supersedes history. To make it simple: historical era dictates any kind of knowledge. That's the historical part; the other part indicates that people or "Human" is responsible for this historical process by taking part through her free will in various practices that change history.  And of course these practices are participated in the "present" (a moment in history) which humans want to change.  

There is a distinction between historicism and humanism but, according to Althusser, this difference is superficial and they share the same problems.

First: Historicism

Gramsci puts history above everything, including philosophy, science, and politics. That, of course, includes Marxism. He went further to say that Marxism is an "absolute Historicism" (Gramsci 1999, 836) which means that he views Marxism as a methodology which interprets various phenomena in the light of history, historical eras, and its peculiarities — even Marxism itself is part of this history. Thus, all different forms of human knowledge and practice occur in a specific moment in history called "present.” This occurrence makes these forms of knowledge carry the present within it and express the present.  And there is also an expressive relationship between forms of knowledge (scientific, political…etc.) so everything expresses everything with the same structural degree because they are exposed to the same "present.” This is what what Althusser called "direct expression." (Althusser 2015, 211) This leads to the idea of contemporaneity, which will be discussed shortly.

Accordingly, we can then understand Gramsci telling that philosophy can't be separated from the history of philosophy and also culture from the history of culture (Gramsci 1999, 628). Thus philosophy can't break with its history as new philosophy will enclose the old within itself considering it as history. But what about Science? Science also behaves like philosophy in this historical path, based on this, Gramsci wrote that electricity for example has its historical significance only when it has become an essential element in production process, and here manifests the instrumental tendency Gramsci had about science (Althusser 2016, a letter). According to that, by inclusion in history (its peculiarities and specific eras) science has the same epistemological value as philosophy and may be as  politics also, as the result of "direct expressionism", so at the end we find that peculiarity of science is lost. But science is the peculiar element of Marxism and it is what separates it from other ideologies (Althusser 2015, 211); what is important about science is its formulation and concepts which try to catch up with  objective reality which is separated from subject's experience; this reality Gramsci views as metaphysical as it related to human existence, and if a human is a historical being, then this reality and knowledge related to it and resulted from it are also historical beings (Gramsci 1999, 807). This asserts the Gramsci's devaluation of science and objectivity which is a theoretical tendency that is adopted by material philosophy as Linen indicated in "Materialism and empirio-criticism" (Althusser 1971, 48-49) this materialism is what Gramsci called metaphysical (Gramsci 1999, 836 ).

So according to what preceded, we find that the distance separating Marxist philosophy (Dialectical materialism) and science (Historical materialism) disappeared in Gramscian thought where Historicism swallows everything and then the material science of history becomes a mere organic ideology incorporated in the historical bloc and included in the superstructure of society (Althusser 2016, a letter).

And here comes the idea of "contemporaneity" that we referred to earlier. "Direct Expressionism" makes all instances; scientific, philosophical, political…etc, are exposed by the same degree to the historical present (Althusser 2015, 212) and also exposed to themselves by an equal extent. That manifests a Hegelian influence especially Hegelian Totality that designates everything as the reflection of the internal dialectic of the absolute idea. But the Marxist totality is different in the sense that it separates between different instances and provides each instance with a degree of "Relative Autonomy". So Superstructure is relatively autonomous from "the Base", and the ideological apparatuses is relatively autonomous from coercive ones and the components of the ideological apparatus each has a degree of independence and so on, not to mention the political structure and its great degree of independency and determining power. Here we find that different instances are not the same in effect and we can't reduce them to be mere reflections of history.

We can conclude from what previously stated that different practices related to distinct instances can also be reduced to one practice which is historical practice. Althusser refused this concept in the light of his own theoretical concept of practice, as every practice is an activity that transforms a raw material (not only material one but also intellectual as the raw materials are more or less the products of other practices; empirical, ideological…etc.) through definitive methods, means and conditions to obtain a specific product (Althusser 1969, 166-167)

And so the unification of practices and their processes in maxim of history can be considered a dissociation of the uniqueness of each practice and its break with other practices in the specificity of production process, i.e. adopting this notion, the ideological practice is then homogenizes with scientific one without a break. So the specific traits of each practice can be designated to other practices, and this appears in Gramscian thought as a general methodological trend (Althusser 2015, 217) as for example, Gramsci sometimes attributes to political practice a deterministic power or ability equivalent to that of economic social relations.

Althusser attributes all these ideas to the theoretical play of Gramscian thought discovered by the analysis of the internal logic of this thought, but we can find the origin in Gramsci's text itself, as he thought that, considering philosophy, politics, and economy, if the three elements adopted the same notion about the world, then they should hold within themselves an ability to transfer the theoretical fundamentals from element to another and to conduct a mutual translation between them (Gramsci 1999, 745 )

Second: Humanism

Man can understand history because s/he who made it. Thus spoke Vico. Here we can distinguish between two roles:

firstly, the making of history or the actor role, that's the role we all familiar with in which man is the obvious actor who leads revolutions, declares war, discovers, Etc. in fact that's the ideological role by which we perceive history.

Secondly, the author of history which is the non-human conditions (and yet not natural) that make history. These are the relations of productions that constitute the economic structure and also the political and ideological relations and structures. these determinants are not human in the sense that although humans are the smallest elements of that system, what should be counted for are the relations between these elements, these relations have a non-human nature because they sublime above  humans as they control and coerce them materially and symbolically. So the relations with their complicated intercalation, are structuring structural positions which humans fit in. we can say that, This role is the real role in history.

According to Althusser, Gramsci wants to make human both the actor and the author of history by his stress on human agency and consciousness as we referred earlier. This should be accompanied by substitution of relations of production with human relations (Althusser 2015, 218), these new relations expand to include knowledge, objectivity, and science, the latter is considered as the human relation with history and nature (the concept of nature presents in history), and so history returns again but this time, it revolves around human and its different relations, and human becomes the inducer of human nature change by his role in making history, accordingly the real conditions that constitute human are eliminated.

Words are possibilities!

We can't doubt the growing importance of Gramsci and Althusser with the development of international and national statuses, the recognition of this importance must be fortified by the discussion between the two in addition to other thinkers. No doubt that Althusser had caught up with Gramsci's literal words, but we shouldn't forget that although theory isn't mere words and language, it is represented by these tools. And we should remember also that theory although it doesn't make the world, it reveals how it is constructed, and accordingly what are the possible strategies to change this construction, so we can say that words have an important weight in determining the scope of potential and our capability.

References 

Althusser, Louis, For Marx, Translated by Ben Brewster, (Paris:  Allen Lane, The Penguin Press, 1969).

Althusser, Louis, Lenin and philosophy and other essays, translated by Ben Brewster, ( NY and London: Monthly review press, 1971). 

Althusser, Louis, On the reproduction of capitalism: ideology and ideological state apparatuses, preface by Etienne balibar, translated by G.M. Goshgarian (NY and London: verso, 2014).

Althusser, Louis, Reading capital : the complete edition /; introduction by Etienne Balibar ; contributions by Roger Establet ; contributions by Jacques Ranciere ; contributions by Pierre Macherey ; translated by Ben Brewster and David Fernbach, ( NY and London: verso, 2015).

Althusser, Louis, "A Letter from Louis Althusser on Gramsci's thought", Decalages, 2016, Vol.2, iss 1.

 Gramsci, Antonio, Selections from the prison notebooks, Edited and translated by Quentin Hoare and Geoffrey Nowell Smith, (London: Lawrence & wishart, 1999).   

Simon, Roger, Gramsci's political thought, an introduction (London: Lawrence & wishart, 1999).  

Neoliberalism, Identity, and Class: A Theoretical Re-consideration

By Yanis Iqbal

Ever since the inception of right-wing populism as a dominant political force, the contentious issue of identity politics has re-surfaced. This is mainly due to the fact that right-wing populism actively utilizes identitarian tools to augment its electoral edifice. A right-wing populist usage of identity involves the subjective solidification of a parochial identitarian consciousness and its consequent constitution as a politics of woundedness or ressentiment which proclaims the “triumph of the weak as weak”. According to Wendy Brown, this politics of ressentiment serves a threefold function - ‘it produces an affect (rage, righteousness) that overwhelms the hurt; it produces a culprit responsible for the hurt; and it produces a site of revenge to displace the hurt (a place to inflict hurt as the sufferer has been hurt).’ Through these three steps, right-wing populism is able to fulfill two important tasks:

(1) It is able to exploit and parochially politicize the ontological insecurities of neoliberalism generated due to institutionalized individualization and neoliberal de-communitarianization. This exploitation of ontological insecurities is effectuated through the creation of endogenously enclosed identities which culturally unify the victims of neoliberalization. (2) It is able to artificially separate the sphere of circulation from the sphere of production with a non-hierarchized culturalization of the sphere of circulation. This guarantees the continued existence of capitalism in which the question of the ownership of the means of production has to be insulated from disruptive politicization. 

Right-wing populism, therefore, relies on identity politics to segregate the political from economic formation. In this entire operation of dissociation of the economic and political, the presence of class structures gets completely obfuscated and obscured. As a consequence of the blurring of class distinctions, the overthrow of the Capitalist Social Structure of Accumulation (SSA) becomes more difficult and economic differentiational configurations get culturally cloaked in non-economic encrustations. But instead of countering this identitarian obscuration of class configuration, matters are further complicated by the left-wing camp itself which readily asserts that class too is an identity. This is an ambivalent strategic-theoretical impasse because it conveys that the Left selectively prioritizes class and chooses to ignore other identities. Due to the portrayal of the Left as apathetic towards non-class identities, coalitional opportunities are lost and the possibility of presenting an integrated opposition to capitalism is weakened. In order to move away from this opposition between class identity and non-class identities and correspondingly re-alter leftist political praxis, this article will re-theorize the notion of class within the problematic of anti-capitalist struggle and right-wing populism.

The consideration of class as an identity ignores its role in the construction of capitalism. Rather than being an identity, classes are the constitutive coordinates of capitalism. Within the sphere of the relations of production, classes act as materio-empirical ensembles, structurally embedded in the objective matrix of capitalism. As cardinal components of the system of capitalism, classes facilitate our insertion into the architectural organization of capital accumulation by unequally distributing economic resources. This insertion happens through people’s material objectification/structural determination by the exclusive possession of productive forces by bourgeoisie. The consequence of this structural determination by the prevailing material-economic circumstances of capitalism is our integration into the system of capital accumulation through the pre-existing arrangement of classes. This line of reasoning posits that capitalism pre-supposes the existence of an arrangement of classes and classes pre-exist our insertion into the system of capital accumulation. Accordingly, it is through the pre-established structural arrangement of classes that individuals enter into the regulated totality of capitalism.

Despite the constructural centrality of classes in constituting capitalism, we seldom observe its conspicuous deployment on the political terrain. Moreover, the subjective self-certainty of being a part of class is never fully realized. This indicates a gap between the objective structure of class and its self-conscious subjective awareness among the people belonging to that class. The contributory causal factors behind the absence of the discursive dominance of class can be located within the schema of class and class struggle. Class is politically-electorally unrepresented or poorly represented because it is deliberately disorganized and ideologically invisibilized by the facilitators of capitalism. This is a part of class struggle wherein the ruling class continuously decomposes and recomposes classes to discursively disrupt it and prevent it from subjectively hegemonizing the popular imaginary. The discursive deconstruction of class is necessary for capitalism insofar that it has to prevent the objective structure of capitalist inequality from appearing in the domain of politics and culture.

Systematic origination of a class-blind political and cultural morphology is aided by the concentrated cultural clout and political hegemony which the ruling class possesses. Along with the continuous construction of a non-class matrix, the ruling class also inhibits the development of class politics through the “selectivities” which are embedded in the system of capitalism. Capitalism is arranged in a way that prevents and constricts the emergence of counter-hegemonic class politics. The various modalities through which it selects and retains certain practices are referred to as selectivities. According to the classificatory schema developed by Bob Jessop, there are 4 selectivities i.e. structural, discursive/ideological, technological and agential. Through the criss-crossing interaction between these selectivities, the emergence of class-based counter-hegemonic program is impeded.

In contradistinction to classes, identities are differentiated subject positions which individuals occupy. While identities are constructed to provide us with variegated subject positions and a symbolic world, classes are pre-fabricated structural assemblages which are later ideologically concealed through diverse semiotic techniques. Moreover, despite being shrouded by the ideologists of capitalism, classes don’t disappear and we continue to remain associated with specific classes. This is because of the fundamental fact that as long as capitalism exists, classes will also exist and our locationality within this system of classes will also persist insofar that we cannot transcend the limits of capitalism and remain within its economic confines. Identities, on the other hand, are not materially rooted in the formational processes of capitalism and are negotiable, moldable and de-composable. Their symbolic elasticity derives from the fact that they are not the constitutive-structural components of capitalism. Instead, they are the ramified excrescences of class which acts as a generative core.

The status of class as a generative core can be clarified by using the concept of “generative entrenchment”. Generative entrenchment refers to the creation of dependency networks in which a structure has many things operating on or within it. Class is generatively entrenched due to its qualitative specificity in the constitution of capitalism. It is an omnipresent fundamental feature of capitalism within which polymorphic identities operate. Therefore, different identities aggregate and disaggregate within the spatial bounds of class structure and class acts as the material plexus in which identities are interlarded.

This underlying theoretical explication of class and identity has been mystified by the concept of “intersectionality” which has acquired unprecedented popularity within identitarian theorizations. While it is true that a multiplicity of identities are contemporaneously acting and converging, intersectionality’s depiction of identities as mere descriptive categories leads to the absence of an active interpretation of oppression. According to Myra Marx Ferree, intersectionality theory highlights the ‘infinitely multiple substantive social locations, generates a long list of important intersectional locations to be studied and offers voice to the perspectives of many marginalized groups’. In this description of intersectionality theory, one can clearly observe that there is a complete non-existence of an interpretative-analytical focus on the origins of oppression. This gives rise to the framing of identities as static and freely floating in an undefined atmosphere of interpersonal relations. Classism is a paradigmatic example of a failed intersectional theorization of class in which systemic questions were reduced to questions of interpersonal sensibilities. Classism’s “objection is to the way snotty rich (or middle-class) people treat poor people, not to the system that produces these divisions in the first place”.  In this way, oppression is reduced to personalized inferiorization, inequality is reduced to the snobbishness of the rich and the answer to capitalism’s destructive tendencies becomes a change in attitudinal practices.

As this article is operating within a problematic of anti-capitalism and right-wing populism, it is necessary that a new strategy for strategically deploying the revised understanding of identity and class be crafted. It is clear that polycontextural identities are interpolated in the reticulation of class structure and it is on the generatively entrenched surface of class that identities operate. In present-day circumstances, right-wing populism has synthetically separated identity from class by emptily culturalizing and traumatizing the experience of neoliberal entrepreneurialization and de-communitarianization. This emphasis on cultural wounds has led to the creation of an antagonistic frontier in which antipathy towards neoliberalism has been funneled in the direction of an “excluded other”. Consequently, essentialized identities have solidified and sedimented with the aim of engaging in a moralized politics of revenge. What has led to the essentialization and sedimentation of identities is the ideological concealment of classes. With the conjoint involvement of class and identity, a dynamic politics of revolution is produced which refuses to being tethered to the putative particularity of hollow identity. This happens as a result of the ultimate aim of class-conscious politics which is the comprehensive elimination of class itself. For example, subaltern classes participate in revolutionary class struggle to obliterate their subalternity. Matt Bruenig aptly sums this up when he says that “justice for poor people requires their elimination”.

When the radical universality of revolution is introduced through a class-conscious politics, the specificity of identity gets entwined in the progress towards a “radical humanism”. This radical humanism has to be achieved through a careful movement of the particularity to universality which humanizes and incorporates this closed particularity. The humanization and incorporation of identity into revolutionary universality will yield what can be called “democratic cultural identity”. Democratic cultural identity stresses the need to continuously re-compose identitarian specificity and organically combine the multiplicitous I’s to concretely progress towards a revolutionary “we”. It is only through this concrete and open-textured articulation of I’s that we can achieve a humanized and sonorous democratic cultural identity.  

The Capitalist “Great Reset” and the Descent Into Techno-Tyranny

By Rainer Shea

Republished from the author’s blog.

Covid-19 has brought about the era of biopolitics, an era that will continue for the foreseeable future. This is because the virus is far from being defeated; a resurgence of it is likely to happen this fall, and the neoliberal world’s refusal to sacrifice business for public health is sure to perpetuate the pandemic for as long as neoliberalism exists. Biopolitics is also here to stay because we’ve reached a point in the climate crisis where global weather patterns are much more compatible with viruses than they used to be. More viruses are going to appear in the coming years with increasing ferocity, while will necessitate an irreversible series of changes to how society functions.

What kinds of changes do multinational corporations and their partnered governments want to enact in response to this permanent crisis? Whatever they end up doing, the narratives of biopolitics are what will be used to sell it to the masses; we’ll be told that all of the corporatocracy’s measures are for our own safety, and that anyone who objects to these measures is working in the service of an enemy power.

This is at least how biopolitics is taking shape within the core imperialist countries. Preoccupied with an escalating cold war against China, the U.S., the U.K., Australia, and the other countries in the NATO empire are stirring up anti-Chinese sentiment by falsely blaming China for the pandemic. The economic isolationism from China that these countries are increasingly embracing goes along with their desire for what they call a “great reset” to their economic systems, where the initial damages to corporate profit from the pandemic are compensated for by a new approach to ordering how their societies work.

The first part of this “great reset” is the use of biopolitics to justify a growing amount of corporate censorship. In this last week alone, Venezuelan regime change operatives have blacklisted several anti-imperialist media outlets so that they can no longer be used as sources on Wikipedia, Twitter has deleted 170,000 accounts for “spreading narratives favorable to the Communist Party of China,” and Facebook has added misleading labels on Russian and Chinese media outlets about these outlets being “state controlled.” All these geopolitically motivated actions are reflective of big tech’s recent trend of openly working with governments to censor “dangerous” material related to the pandemic; because of the precedent this trend has set, suppressing dissent is now easier than ever.

Such is the deceptive nature of the narrative about the tech industry acting as an unambiguous force for good during the “great reset.” There’s been talk in the media and in elite circles about big tech needing to radically restructure how it manages online information; for example, a recent article on the “great reset” from the World Economic Forum says that “The use of digital technology during the COVID-19 crisis offers clear lessons: focus on the safety of essential organizations; protect work-from-home capabilities; and target mistrust broadly to enable specific crisis-relevant tech.”

The article was talking about mistrust as it relates to digital tools, but the same kind of language is what’s also being used in the effort to preserve trust in military, media, intelligence, and law enforcement institutions. The solution to this kind of mistrust is evidently to remove online content deemed to be “misinformation.”

Other statements about the “great reset” that are being put forth by the Western capitalist intelligentsia have to do with adapting the global economic system to the challenges it’s facing. This month, managing director of the International Monetary Fund Kristalina Georgieva made a statement saying that “From the perspective of the IMF, we have seen a massive injection of fiscal stimulus to help countries deal with this crisis, and to shift gears for growth to return. It is of paramount importance that this growth should lead to a greener, smarter, fairer world in the future.”

What does this mean? Given that the IMF’s historic and current role is to advance profits for multinational corporations, it means a campaign to expand the roles of green capitalism and the high-tech sector. Mega-corporations like Amazon, which have lately been seeking to rebrand themselves as environmentally friendly while investing in newly profitable “green” technologies, stand to profit from this aspect of the “great reset.” Amazon in particular will have a significant role to play in this reordering of global capitalism, since it’s one of the companies that’s big enough to survive the 2020 economic crash.

These monopolies that stand to profit from the crisis-the Silicon Valley giants, the Wall Street entities, the pharmaceutical companies-see the growing unrest from the increasingly impoverished lower classes, and they seek to make the “great reset” into a project for restoring order. Last year, the U.S. government organization the National Security Commission on Artificial Intelligence layed out a plan for creating an AI-driven mass surveillance system which far surpasses the spying apparatus of any other country. This plan, which has been gaining a more traction during the pandemic, would fulfill a truly dystopian vision of a surveillance society.

The NSCAI believes that in order to “address the national security and defense needs of the United States,” the country will need to replace its traditional infrastructure with “smart cities.” These urban centers, a document from the organization says, will consist of self-driving electric cars, shopping that’s done exclusively online, and an integration of everyday devices into the Internet.

The goal of this, aside from providing an opportunity for big tech to sell their “green” and AI-driven products, is to expand the opportunities for state surveillance. The NSCAI says that “streets carpeted with cameras is good infrastructure for smart cities,” and the “internet of things” that it envisions will no doubt be used to give the intelligence agencies more opportunities for monitoring people’s everyday activities; if the CIA can already listen to people through smart TVs, they’ll be able to do a lot more when the smart cities come.

The NSCAI explicitly praises the potentials for helping law enforcement that all these new technologies will provide, stating that “police are making convictions based on phone calls monitored with iFlyTek’s voice-recognition technology” and that “police departments are using [AI] facial recognition tech to assist in everything from catching traffic law violators to resolving murder cases.” You can imagine what such a drastic expansion of these surveillance tools will mean for political organizers who represent the “dangerous” ideas that are now being censored so heavily.

If you think this kind of future is only a far-fetched idea, look at the changes that have already been made during the pandemic. Last month, Google CEO Eric Schmidt met with New York Governor Andrew Cuomo about integrating the company’s technologies into the city, about which Schmidt explained: “The first priorities of what we’re trying to do are focused on telehealth, remote learning, and broadband…We need to look for solutions that can be presented now, and accelerated, and use technology to make things better.”

Additionally, after partnering with the Bill and Melinda Gates Foundation, Cuomo said that we’re at “a moment in history when we can actually incorporate and advance [Gates’s] ideas…all these buildings, all these physical classrooms.” Since Gates’ long-term plans involve the creation of a “digital immunity proof” that tracks people in relation to diseases, surveillance capitalism looms over this partnership as well.

As Pepe Escobar explained in April, the next tool for social control may be universal basic income:

You don’t need to read Michel Foucault’s work on biopolitics to understand that neoliberalism — in deep crisis since at least 2008 — is a control/governing technique in which surveillance capitalism is deeply embedded. But now, with the world-system collapsing at breathtaking speed, neoliberalism is at a loss to deal with the next stage of dystopia, ever present in our hyper-connected angst: global mass unemployment…Endless permutations of the toxic cocktail of IoT, blockchain technology and the social credit system could loom ahead…Already Spain has announced that it is introducing UBI, and wants it to be permanent. It’s a form of insurance for the elite against social uprisings, especially if millions of jobs never come back.

In the U.S., it’s unlikely that poor and working people will even get this meager version of economic relief. The Republican Party’s only plans for now are increased austerity and continued corporate bailouts, along with whatever privatizations and deregulations they can manage. So it makes sense that the U.S. is where the police state is planned to be made the most extensive and intrusive; they’ll try to use brutal repression and intensive surveillance to keep us from rising up. In the imperial core, techno-tyranny is what biopolitics will inevitably lead to.