Archive for January, 2012

Why is the Bank for International Settlements interested in Karl Marx? (Part three)

January 14, 2012 Leave a comment

In my previous post, I stated:

In reality, there was nothing in Bohm-Bawerk’s argument to be disproved. Bohm-Bawerk had indeed cited the essential contradiction at the core of capitalism. His problem, however, was to imagine the contradiction to be a defect of Marx’s theory, and not a fatal flaw laying at the heart of the capitalist mode of production itself.”

Bohm-Bawerk had inadvertently confirmed the rather grim future arrived at by Marx’s theory: Capitalism would kill the so-called free market, and in so doing, would destroy itself. It was, as Marx argued, creating its own gravediggers, a mass of directly social laborers who did not need it, and would see it as an impediment to their very survival, owing to obstacles it put in the way of its own operation.

By the 1970s, economists finally were forced to acknowledge there was in fact no inconsistency in Marx’s argument. Marx had, just as Bohm-Bawerk accused him, arrived at a theoretical description for why prices, although resting on the socially necessary labor time required to produce commodities, nevertheless appeared to reflect the prices of production of these commodities and not their labor times. It was not, as Werner Sombart feared, that from Marx’s labor theory of value “emerges a ‘quite ordinary’ theory of cost of production”, but precisely that Marx’s theory predicted from the first that the value of commodities must appear in the form of prices of production.

Moreover, Marx had demonstrated his proof almost in real time, so to speak, in front of his audience in a painstakingly detailed series of volumes — subject to the critical purview of his opponents. He had, as it were, made the elephant in the room — socially necessary labor time — disappear before the disbelieving eyes of his skeptical audience. It was a performance so dramatic and unprecedented, it took decades for the skeptics even to figure out what they had just witnessed with their own eyes.

The acknowledgement of Marx’s triumph took the form of a paper by Paul A. Samuelson, and was couched in the form of the complaint echoing that leveled against Marx by Sombart, as previously quoted by Bohm-Bawerk :

“…if I have in the end to explain the profits by the cost of production, wherefore the whole cumbrous apparatus of the theories of value and surplus value?”

Taking a cue from Sombart, Samuelson, in a paper titled “Understanding the Marxian Notion of Exploitation: A summary of the So-Called Transformation Problem Between Marxian Values and Competitive Prices”, introduced his so-called erasure method arguing,

It is well understood that Karl Marx’s model in Volume I of Capital (in which the “values” of goods are proportional — albeit not equal — to the labor embodied directly and indirectly in the goods) differs systematically from Marx’s model in Volume III of Capital, in which actual competitive “prices” are relatively lowest for those goods of highest direct-labor intensity and highest for those goods of low labor intensity (or, in Marxian terminology, for those with highest “organic composition of capital”). Critics of Marxian economics have tended to regard the Volume III model as a return to conventional economic theory, and a belated, less-than-frank admission that the novel analysis of Volume I — the calculation of “equal rates of surplus value” and of “values” — was all an unnecessary and sterile muddle.’

Samuelson gave a simple straightforward explanation of his “erasure method”:

I should perhaps explain in the beginning why the words “so-called transformation problem” appear in the title. As the present survey shows, better descriptive words than “the transformation problem” would be provided by “the problem of comparing and contrasting the mutually-exclusive alternatives of `values’ and `prices’.” For when you cut through the maze of algebra and come to understand what is going on, you discover that the “transformation algorithm” is precisely of the following form: “Contemplate two alternative and discordant systems. Write down one. Now transform by taking an eraser and rubbing it out. Then fill in the other one. Voila!

For all his genius, Samuelson argued, Marx had produced a theory which offered no greater insight into the social process of production than was already present in the form of mainstream economics. It could, for this reason, be entirely ignored.

Ignored also, however, would be the entire point of Marx’s “unnecessary and sterile” detour: namely, to demonstrate in comprehensive and theoretically ironclad fashion why the capitalism mode of production is doomed.

This only deepens the mystery of David Bieri’s interest in a theory routinely dismissed by economists as, at best, a vestigial remnant of classical political-economy. Why would this former bureaucrat of the Bank for International Settlements still be reviewing an obscure technical problem of a long dead theory?

Read more…

Why is the Bank for International Settlements interested in Karl Marx? (Part two)

January 13, 2012 5 comments

Bohm-Bawerk's "Marx and the Close of His System"

In the previous blog post, I argued that in each of the three great capitalist catastrophes of the 19th and 20th Centuries — the Long Depression, the Great Depression and the Great Stagflation — economists scurried to bone up on Marx in an effort to understand practical problems of state economic policy confronting them at the time.

Naturally, the connection between these catastrophes and interest in Marx intrigued me, since this guy Bieri is now interested as well. If Bieri were just another Marxian economist I could understand his interest but his connection to the BIS and Bankers Trust, London intrigued me. Bankers Trust, one of the many institutions with which Bieri has been associated, is not exactly your typical local community credit union. It was up to its neck in the dirty dealings that led to financial crisis, and has long been implicated with equally shady dealings in the market in general. Here is what Wikipedia has to say about it:

“In 1995, litigation by two major corporate clients against Bankers Trust shed light on the market for over-the-counter derivatives. Bankers Trust employees were found to have repeatedly provided customers with incorrect valuations of their derivative exposures. The head of the US Commodity Futures Trading Commission (CFTC) during this time was later interviewed by Frontline in October 2009: “The only way the CFTC found out about the Bankers Trust fraud was because Procter & Gamble, and others, filed suit. There was no record keeping requirement imposed on participants in the market. There was no reporting. We had no information.” -Brooksley Born, US CFTC Chair, 1996-’99.

Several Bankers Trust brokers were caught on tape remarking that their client [Gibson Greetings and P&G, respectively] would not be able to understand what they were doing in reference to derivatives contracts sold in 1993. As part of their legal case against Bankers Trust, Procter & Gamble (P&G) “discovered secret telephone recordings between brokers at Bankers Trust, where ‘one employee described the business as ‘a wet dream,’ … another Bankers Trust employee said, ‘…we set ‘em up.”

Perhaps I am just being a tad paranoid, but when a guy with these kinds of connections starts sniffing around dusty old volumes of Capital just before the outbreak of the financial crisis of 2008, I begin to wonder what’s up.

But, I’m getting ahead of myself, am I not? I have not yet even explained what all the fuss is about. This tale begins with a little known simpleton scribbler, whose name is probably unfamiliar to anyone outside of the field of economics: Eugen von Bohm-Bawerk.

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Why is the Bank of International Settlement interested in Karl Marx?

January 9, 2012 3 comments

I’m reading, “The Transformation Problem: A Tale of Two Interpretations”, by David Bieri.

According to his profile,

David studied economics at the London School of Economics and international finance at the University of Durham (UK). In 2006, he started his Ph.D. studies in SPIA.

From 1999 until 2006, David held various senior positions at the Bank for International Settlements, most recently as the Adviser to the General Manager and CEO. From 2002 to 2004, he held the position of Head of Business Development in which capacity he was responsible for new financial products and services and reserve management advisory for central banks. From 2004 to 2005, David worked as an economist in the BIS’ Monetary & Economics Department.

Prior to joining the BIS, David worked as a high-yield analyst at Banker’s Trust in London and in fixed-income syndication at UBS in Zurich.

What caught my attention is the notable resume of this author, which is quite unlike that of the typical Marxian economist. High-yield analyst, central bank bureaucrat, mainstream economist? This is not the sort of person you will find at your local Occupy campsite.

Why, I wondered, is the Bank of International Settlement interested in an obscure technical problem of Marx’s theory? So, I decided to give the paper a read.

Read more…

Occupy, the Tea Party, and The Rebellion of “Ignorant” Foxes

January 6, 2012 2 comments

Although generally called ignorant and uncultured, the Lollards were simultaneously portrayed by the Church as sly foxes seducing members of society and then devouring them.

To understand the significance of the Occupy and Tea Party movements to anti-statism, look at their predecessor movement, the Lollards of the 14th and 15th Century England. This movement, which arose in England during the period leading to the Great Reformation, imposed its will on the state and the church in a fashion similar to the way our own Occupy and Tea party movements are making their power felt in politics today.

The Lollards were a dissident sect within Catholicism who argued there was an “invisible” church as well as a visible one. The visible church was the Catholic hierarchy, the invisible church, however, was composed of the entire body of believers. According to the Wikipedia, the movement attacked the authority of the church and its priests. They insisted lay persons could as well perform the religious functions as well as any priest.

According to the Wikipedia: “A Lollard blacksmith in Lincolnshire declared that he could make ‘as good a sacrament between “… ii yrons as the prest doth upon his auter (altar)'”

Lollard, Lollardi or Loller was the popular derogatory nickname given to those without an academic background, educated if at all only in English, who were reputed to follow the teachings of John Wycliffe in particular, and were certainly considerably energized by the translation of the Bible into the English language. By the mid-15th century the term lollard had come to mean a heretic in general. The alternative, “Wycliffite”, is generally accepted to be a more neutral term covering those of similar opinions, but having an academic background.

The term is said to have been coined by the Anglo-Irish cleric, Henry Crumpe, but its origin is uncertain. The Oxford English Dictionary has no doubt:

  1. from “M[iddle] [Dutch] lollaerd, lit. ‘mumbler, mutterer’, f[rom] lollen to mutter, mumble”.
  2. Three other possibilities for the derivation of Lollard have been suggested:
    1. the Latin name lolium (Common Vetch or tares, as a noxious weed mingled with the good Catholic wheat);
    2. after the Franciscan, Lolhard, who converted to the Waldensian way, becoming eminent as a preacher in Guienne. That part of France was then under English domination, influencing lay English piety. He was burned at Cologne in the 1370s;
    3. the Middle English loller (akin to modern, albeit semi-archaic, verb loll), “a lazy vagabond, an idler, a fraudulent beggar”; but this word is not recorded in this sense before 1582. It is recorded as an alternative spelling of Lollard.

The Dutch derivation is the most likely. It appears to be a derisive expression applied to various people perceived as heretics — first the Franciscans and later the followers of Wycliffe. Originally the word was a colloquial name for a group of the harmless buriers of the dead during the Black Death, in the 14th century, known as Alexians, Alexian Brothers or Cellites. These were known colloquially as lollebroeders (Middle Dutch), ‘mumbling brothers’, or “Lollhorden”, from Old German: lollon, meaning “to sing softly,” from their chants for the dead. The modern Dutch word is lullen, meaning to babble, to talk nonsense.

Church propaganda of the time portrayed the lollardy as unscrupulous foxes who were out to seduce the Churches vulnerable members:

Lollards were represented as foxes dressed as monks or priests preaching to a flock of geese on misericords. These representations alluded to the story of the preaching fox found in popular Medieval literature such as The History of Reynard the Fox and The Shifts of Raynardine (the son of Raynard). The fox lured the geese closer and closer with its words until it was able to snatch a victim to devour. The moral of this story was that foolish people are seduced by false doctrines.

Does this characterization sound familiar? How often have you heard someone from the Tea Party characterized as ignorant, or someone from the Occupy characterized as filthy, uneducated and lacking both useful work skills and a job? Lollardy was a pejorative term applied to the crude folk who imagined they could replace the elites with their own self-activity. Like the Occupy and the Tea Party, the lollards were “uneducated” common folk, who had the nerve to confront elites in the church and the state.

In an 1885 introduction to Fortescue’s “The Governance of England”, Charles Plummer wrote:

“Henry IV came to the throne as the representative of the ‘possessioned’ classes–to use a contemporary expression. The crude socialism of the Lollards, as the barons saw, and as the Churchmen were careful to point out, threatened the foundations not merely of the Church, but of all property.”

(Fucking anarchists and socialists screwing things up even in the Fifteenth Century.)

The Lollards movement is interesting in itself, but Plummer’s commentary is just as interesting. Plummer points out the anti-clerical and anti-property character of the lollards, but he also points out how the dissent expressed in the lollard movement effected the monarchy. The crown, as the general representative of property, was under duress for the whole of Henry IV’s reign, by the commons. Henry IV was dependent on Parliament to raise the taxes necessary to defend property interests, “against foreign and domestic enemies.” It was this dependence on the Parliament, that Plummer cites as one of the chief sources of trouble during Henry IV’s reign.

Says Plummer:

“But the causes of his weakness are plain enough. He was weak through his want of title, weak through the promises by which he had bound himself to those whose aid had enabled him to win the crown, weak most of all through his want of money.”

Henry IV’s own want of money was not merely his own, but a general monetary crisis perhaps traceable to political causes as Plummer argued:

“This scarcity of money was due partly to the general want of confidence in the stability of the government which succeded the brief enthusiasm in Henry’s favour, and which led people to hoard their gold and silver, so that not only was none forthcoming to meet the demands of the government, but capital, which ought to have been employed productively, was withdrawn from circulation, thus causing for the time a general diminution of the resources of the country.”

Fortesque argued, the crown needed its own independent source of income and standing that was not dependent on the periodic challenges of economic and political events. I think it is fair to state from Fortescue’s time  to today the over-riding impulse of the state has been to acquire an independent existence from society as representative of the interest of property within society.

And, I think it is no accident that Adam Smith’s masterwork of economics is not titled, “The Wealth of Individuals”, but “The Wealth of Nations”. The subject of contemplation for economists has never been “the economy” as we might imagine — it is the state and how to manage the economic activity of society on behalf of the state. Seeking its own independent existence as a form of property has always been the aim of the state and this has led it into conflict with society.

I think it is necessary to clear up the standing misinterpretation, widespread among anti-statists, that the state is either neutral, or at worst, a representative of some particular property interest in society. Fortescue’s argument demonstrates the state is, and has always been, a distinct interest in society — in particular a distinct property interest hostile to other property interests in society. It is a player in the economy, and by no means, just a corrupt refereee among economic players in the great game.

For Marxists who might object to this argument, I offer none other than Marx himself, who deliberately characterized the capitalist as only the personification of the relation between capital and wage labor. The popular caricature of the lone Koch Brother type capitalist lording it over his private empire of dependent wage slaves is not necessary to the relationship, and, moreover, is not even an accurate model of Marx’s theory but a crass vulgarization.

First, as Marx himself clearly stated, the worker is entirely capable of acting as her own capitalist, and has not the slightest need for the capitalist to accomplish this disgusting task. Second, he and Engels noted by the late 1800s the personification itself was being socialized through the emergence of  joint-stock companies and cartelization. Finally, Engels argued it was inevitable the state would become the national capitalist.

The ultimate exploiter of labor power is not Mr. Moneybags, but Barack Obama; which is to say, the modern executive branch of the state, whose lineage is directly traceable to the crown, not the much praised and condemned private entrepreneur. Properly understood, the state is not corrupted by property interests in society, it is both the general form of these property interests within society and an interest its own right.

This is the background to the Occupy and Tea Party movements, a general social discontent with this independent and unaccountable social power among all classes and strata within society. The fascist state is an unaccountable social power made all the more so by the modern money system, which frees the state from any dependence on taxes and debt, and, which has allowed it to become entirely “self-financing”, so to speak. With the capacity to print money into existence, the state achieved a degree of independence hitherto unequaled in the history of the state. It has acquired the monetary and practical means to commit the nation to war on any pretext whatsoever; it has expressed absolute hostility to every form of property that it cannot make subordinate to its own interest as property. Most of all, it has become the largest and most ruthless exploiter of labor power in the annals of history — actually converting other national capitals into mere means of its own self-expansion.

The absolutism of the fascist state, its totalitarian character, has brought the category of state to its most perfect expression: it is, at once, both the perfection of the state and the perfection of capitalist relations in one social body. Against this absolutist power is arrayed nothing more than a rebellion of the ignorant — those who are so uneducated and uncultured only they can see through the silly mystifications of fascist state ideologues.

If You Want to End Poverty, You Should Oppose Poverty Programs

January 5, 2012 Leave a comment

Today and tomorrow Washington will publish a host of meaningless, but anxiously awaited, jobs numbers. Indications are these numbers will be unprecedentedly awful by any historical standard, but your expectations will be managed in such a way, that, by the end of the nightly news, you too will view them as at least weakly positive.

So, what does it mean to say the jobs numbers are positive? Are fewer jobs bad when you’re utterly dependent on wage labor? Are more jobs good, when you’re nothing more than a wage slave? Frankly, in my opinion the only good jobs figure is zero, folks: No one has a job; no one has a wage; we are all unemployed. When that makes sense, you’ve figured out the secret of capitalism.

Anti-statists wax eloquent about abolishing the state, but here is a hint: wage slavery is the state.

The number of Marxists who know the state is founded on wage slavery, yet weep when unemployment increases, is shocking. Marxists typically treat any rise in unemployment as if it is the end of the world. The argument made by some silly Marxists is that if we do not demand an end to unemployment we are banking on the resulting mass suffering as a trigger for a revolution.

I’m not buying into that argument. Honestly, to my mind this seems to place us in a bind: to prevent mass suffering from unemployment, we have to promote ever increasing wage slavery. We end up opposing wage slavery only to the extent it does not cause any actual suffering.

By contrast, libertarians of the Austrian type, who oppose any state effort to stabilize the economy, come off looking like cold-blooded savages. In the public mind, to oppose state countercyclical policy intervention, you have to be an Austrian knuckle-dragger, who views society as some Darwinistic nightmare.

Frankly, this predicament is not the least bit satisfying; I don’t want to have to choose between wage slavery and starvation. I’m just thinking out loud about this problem. It seems to me we are not limited to the two choices offered by capital and the state.

I think, we should be prepared to state that, as anti-statists, we would rather starve than live on handouts from the state — fuck the state, and fuck politicians who promise to ease our burden of wage slavery.

Of course, some will argue we are being heartless as @zappdos pointed out graphically on Twitter:

“I’m not sure about that one. Opens up to a myriad of “let them die” moments- they don’t tend to go over well.”

I agree that this position is subject to that interpretation, but @zappdos is only looking at one side of the equation: the dirty little secret of capital is they need unemployment insurance more than we do. Refusing any offer of state aid has a bigger impact on the business cycle than on us — which is why they prefer it.

As @PunkJohnnyCash argued

“Safety nets are to prevent uprising. It’s what @StatelessWonder calls the pressure relief valve.”

I think this is precisely correct. I think we have to call the Democrat/GOP bluff, and demand they end all state welfare of any type. This is a very hard argument to make — one that cannot be made effectively by Austrian knuckle-draggers, because — frankly — they hate working people.

Fundamentally, however, the Austrians are correct: state subsidies of poverty only make it possible for inefficient capitals to exist. Remove state subsidies and these capitals must go belly up, including those devoted to state militarism. The end of these subsidies will be deflationary in the extreme; which is why they were implemented in the first place. Deflation shifts income from profits to wages; inflationary state countercyclical economic policy, does the reverse — it is purposely designed to reduce the purchasing power of wages and increases profits.

We have been fooled for decades into believing state economic policy helps the poor, when, in reality, it only enriches the wealthy and increases poverty. The term “poverty program” is a slick marketing gimmick; ending state welfare programs is the surest way of ending poverty. The argument is extremely bizarre unless you actually understand how poverty programs work. But. think about what food stamps do to subsidize industrial agriculture, and you get some idea of how this program serves only to subsidize Archer Daniels Midland — without in the least ending the scourge of hunger.

I think we should not be embarrassed to call for the end to these programs, and to state they are designed to perpetuate poverty not end it. No doubt, we will get a lot of pushback from progressives, who will rightly point to the results of neoliberal policies since the Reagan administration. I would not disagree with them on this. Exporting industrial capacity has intensified the crisis of poverty. But, logic dictates the state only creates so-called poverty programs by diverting social resources. And, it alone has been responsible for the unequal distribution of social resources in the first place, though its neoloberal “free trade” policies.

The state has purposely created the mass poverty it now pretends to address with its neoliberal policies. Washington has encouraged the export of industrial capacity to the lowest wage nations in the world market, and propose to fix this by offering retraining here. On this basis, it is no surprise neoliberal policies only exacerbates poverty — how could it be otherwise. We should tell them: “Fuck you, sell your iPods to poverty-stricken Chinese peasants, bitches.”

We should not be embarrassed to confront progressives with the patent insanity of their worldview. They will paint anti-statists as heartless insensitive bastards who thrive on hunger and poverty — we need to call them out on this shit. Not once in the past forty years has progressive politics succeeded in reversing the decline in wages and living standards.

We should have no illusions that progressives will be convinced by these arguments. They are fascists ideologues who only see progress measured by the size of the fascist state and its programs.

As @postleftanarchy stated:

“It’s a difficult task. When I try to talk to statists about anarchy they immediately shut down. Either troll me or insult me.”

Another anarchist, @ChuckBaggett, made the progressive argument, when he asked me:

“Would you deny the starving the right to take what they need to eat? Does that sound familiar?”

No. I would not deny this — the problem is that Washington is denying it right now. They are taking supposedly scarce social resources and pouring them into wars of aggression all over the planet. Yet, progressives have been mute about this vile practice to preserve their alliance with the Democrats. The past 40 years has been rule by misdirection: Progressives want to keep our attention on the GOP, while the Democrats voted to export the industrial base of the country through NAFTA and other such “free trade” agreements. They played this role just as they kept our attention on Bush, while the Democrats voted for the Patriot Act, authorized the Bush wars, etc.

I think anti-statists need to give serious thought to opposing all forms of state aid for unemployment and poverty on the right grounds. We need to be able to make the argument not that working people are shiftless welfare recipients, but that the state is deliberately creating poverty. We need to show Washington is engaged in spreading poverty and these “poverty programs” are a fig leaf to cover official state policy.

I am not saying this is an easy argument to make, but it is a necessary one if anti-statism will gain any following. For too long the anti-state message has been abandoned to cranks, racists, and Koch-suckers — we need to change this. The hardest argument to make is why ending unemployment compensation entirely will force the end of all joblessness – if you can’t make that argument, you’re finished. If you cannot make that argument, you have no argument against the state. Unemployment under capitalism is as normal as sunrise — if the only way to deal with it is unemployment compensation and job retraining, it will not be politically possible to abolish the state.

That is a political fact all anti-statists should memorize. Anti-statism is a pipe-dream, if we have no solution to poverty and joblessness, but state programs. I just want to call on all anti-statists to craft their own argument for why the state itself creates poverty. All of our arguments will necessarily be different, but we should have one when confronting silly fucking progressives.

While I was outlining this post, one anarchist, @roastydog interjected that some agorist and mutualist type models focus on non-state support networks. He argued:

“mutual aid networks are the only effective way to tell the State to fuck off without dooming millions to starvation.”

While I do not agree the mutualism is the only alternative to the fascist state, at least mutualism and agorism have thought about how to make an argument for an alternative approach to poverty — something most anti-statists, like, for instance, Marxists, don’t even think about.

Don’t concede the argument to those statist assholes. Don’t let them intimidate you on moral grounds. Shove Obama’s “failures” in their pie holes and watch them choke on that shit. Poverty today would be impossible without the active participation of the state in maintaining and spreading it.

Message from Iowa: Occupy — and Run — everything!

January 4, 2012 Leave a comment

(Click to enlarge)

Take a look at the Iowa results from last night, and smile!

I think this is justified for two reasons: first, the elections are a snapshot of the dynamically changing opinion among the American population. Of course, this snapshot is limited to those who actually attended the GOP caucuses, and it does not reflect the mass of the population except in some statistical fashion. But, it is the largest of snapshots likely to be gained in iowa until the general election.

Second, the election can help us to understand how anti-statism is expressed ion the outcome. I admit this political expression of anti-statism is only evident in a fundamentally flawed fashion — in the form of Ron Paul own person. As @punkjohnnycash on Twitter noted, Paul more accurately can be described as an anti-federalist, rather than an anti-statist. Still, i think, his support in the election can serve as a sort of proxy for anti-statist sentiment, so long as we remember @punkjohnnycash’s caveat.

So, with those two caveats in mind — Iowa is only a limited sample of a proxy an anti-statist position — let’s look at the results.

Returns indicated GOP Grandparents  (65 and olde), are going for Romney, parents (40-65) went for Santorum, and their adult children (17-39) went for Paul. Paul also pulled from lower the working class. The income distribution of the vote reflects the age distribution, and this tends to support Paul among the young. Since younger voters are also over-represented in the lower income range of the population, the data seems consistent.

I would imagine, the distribution in the military is similar, with the lower ranks, who are being ground up by war, going with Paul. Politically, we might be looking at significant anger in the lower rank military due to the lethality of constant combat. A distinguishing feature of this election season are the donation to Paul from the military to the exclusion of almost all other candidates.

The results show 80%, of the GOP lodged firmly in what we can define as the statist camp — non-Ron Paul voters from the older and higher income base. The younger and lower income base is firmly anti-Washington, at least, and possibly anti-statist to the extent this anti-statism can have a political expression in the GOP as anti-federalist sentiment.

I think, the future is with the young, lower income mass. Parents will follow their children. This is true in thinking and in actual circumstances, for two reason: austerity is forcing parents to provide less support to their kids, and you can bet this is having a profound psychological impact on them. It is very difficult to turn your kids away for support for education, or tiding them over early financial burdens. Add to this, the adult children who are no longer leaving home to start their own families because of economic stress.

My conclusion from this: with 20 percent of the GOP already openly hostile to Washington, the stage is being set for a large-scale political crisis.

The remaining GOP is split between a larger evangelical base and the traditional business community and these folks should not be ignored. The division between the business community and the evangelicals is bitter and unbridgeable. The business community is not at all on board for the dogmatic pietism of the evangelicals — the workplace is hostile to that shit. Moreover, unlike the Democrats, the GOP has no figure to unite around and hold the fractures in place.

Ron Paul’s anti-federalism plays in all three sections of the GOP, but for different reasons. There is hostility to Washington as an political-economic entity (anti-statism); cultural entity (evangelicals); and regulatory (business). Don’t underestimate these anti-Washington attitudes: business, even dominating Washington, still is antagonistic to Washington at the granular level.

Capitals are fiercely competing with each other over the levers of power, and this is a life or death struggle among them. The domination of finance capital over Washington is not at all supportive of the interests of non-finance capital. Moreover, there is huge mass of capital unable to function as capital, that has retreated to gold, speculation and treasuries. These capital are being screwed right now — this is FOFOA and followers of Austrian economists. They are on the edge of extinction.

The MF Global collapse sent a shock-wave through this mass of dead capital; as the banksters essentially ripped them off in broad daylight. MF Global was a wholesale looting of small capital by big capital. These folks will also fuel the anti-Washington anger.

The anti-statist argument is in very good position this morning — we should be happy! Next up: Obama’s progressive base.

Among the progressives, Washington has done much of our job for us by destroying the independent worker organizations in the past 30 years. Resistance through these working  class organizations is now impossible, the working class can no longer act politically as a class but as individuals. This might seem bizarre, but the these organizations were the primary social base of the fascist state. The divisions within the class domestically and internationally allowed capital to consolidate its grip on state power. And, the American labor movement played a pivotal role in Washington’s international strategy.

This corrupt fascistic labor movement no longer exists; over the past 30 years, it has been systematically dismantled, to imposed the neo-liberal agenda. A national labor movement within a globally evolved capitalism is an anachronism. A global labor movement is an oxymoron, since we are talking about all of humanity against a tiny stratum of parasites.

Occupy and the Tea Party are the new models for working class resistance — no leaders, because we all control only ourselves. The thing to note in this election is how the AstroTurf of the Tea Party led not to its dissolution, but the emergence of Ron Paul’s anti-federalist message as a force within the GOP — anti-statist sentiment is adapting itself to ready made forms. The GOP corporate center did not kill the Tea Party message, it only infected itself with that message.

All in all, we are in good position to establish a movement to replace the state with an association that is global. An association that recognizes no class, no dogmas and no national borders. The message of anti-statist should be:

“Occupy AND RUN everything, from your job to your planet.”

The union sit downs of the 1930s and the civil rights sit-ins of the 1960s are antiquated forms of 20th Century resistance; we now need to actively recognize our own capacities for self-activity. Both the sit-down strikes and the sit-ins were attempts by the oppressed to gain recognition, now the oppressed need to recognize their own capacities as their own. I really think we need to begin where we are – in our communities and workplaces – take control of these and manage them ourselves.

Also read: Robert Wenzel: “HOT: Did Ron Paul Just Win Iowa?” Ron Paul supporters are being very aggressive in their effort.

Categories: politics