In 2011, Leo Panitch wrote a piece, The Left’s Crisis, examining the Left’s response to the present crisis. He noted the Left’s response could be broken into two types: “irresponsible” and “fundamentally misleading”. In the irresponsible group, he puts those who called on Washington to let the banks fail, which, he asserted, gave no thought to the consequences of such an event. In the fundamentally misleading group he put those who called for tighter regulation of banks, which he asserted are already the most regulated in the world market.
The Left’s “lack of ambition” in the crisis, says Panitch, was indicated by the fact that there were far more calls for salary limits on top mamagers of Wall Street investment firms, than calls for turning the banks into public utilities. This was true, Panitch notes, despite the fact that turning banks into publicly owned utilities is a long-standing communist measure dating back to the Communist Manifesto. The fact that even some bourgeois writers were calling for just such a measure while the Left was not shows its lack of ambition and self-confidence.
Panitch states, fundamental change can only happen through a class struggle that would involve a massive transformation of the state itself. Getting reforms like converting banks into utilities is not going to happen by bringing a bunch of lawyers into a room. Even something as mundane as better regulation cannot be won without a mobilization of the working class:
“[We] ought to be trying to educate people on how capitalist finance really works, why it doesn’t for them and why what we need instead is a publicly owned banking system that is part of a system of democratic economic planning, in which what’s invested and where it’s invested and how it’s invested is democratically decided.”
The banking nationalization that is now occurring in the wake of the financial crisis by the government all over the world only involved socializing financial losses, while leaving the structures that lead to these losses in place:
“…this really represented “not the nationalisation of the banks, but the privatisation of the Treasury as a new kind of fund manager.”
Panitch argues the most important reason to nationalize the banks is to cripple finance capital and change the balance of forces. Additionally, according to Panitch, the socialist argument for nationalizing the banks would be to put credit to work for socially useful ends. Despite the disastrous collapse of the Soviet Union, socialists can’t avoid the need for planning, says Panitch, and credit is the core of any planned alteration of industry. Controlling credit provides for democratic control of investment. However, Panitch notes, people are not motivated by democratic control of investment, which, even if it does not fall prey to the errors of the Soviet Union, will not deliver benefits for decades.
“People need to be mobilized by immediate demands, as they were by the demands for trade union rights, a reduced workweek, a public educational system a welfare state, etc”
The solution is to combine a long term vision of democratic investment with immediate benefits that sustain it and make it possible. A case for this might be made for a massive public housing program, universal public pensions, free public transit, etc. These efforts would be aimed at decommodifying basic needs as far as this is possible within capitalist society. People like these things, but you very quickly face the problem of where the money for such programs will come from. This question can be addressed by bringing credit under the control of the state.
The Left on defense
The Left, Panitch argues, has been very defensive in its thinking:
“We need to try to see this moment of crisis from the perspective of what openings it could create. The limitations of a purely defensive response to the crisis lie in not taking advantage of the opportunity that the crisis creates. Despite the ‘Another World Is Possible’ rhetoric, the left has been more oriented to attempting to hold on to things than to taking things in a new direction.”
This is the defect of the view that says you can change things without taking power: we are left preventing the state from doing things, but do not advance our goals. You don’t engage on the terrain of the state or transform the structures of the state. While Panitch understand the current streak of anti-statism, he argues, “we need to go beyond protest, or we will be trapped forever in organizing the next demo.”
The state will transfer the crisis down to regional and local levels, and hopes thereby to impose limits on the response to the crisis. We must learn how to link up local struggles and turn them into a struggle for state power, otherwise we will be trapped by local limits.
I don’t think Panitch’s argument can just be dismissed. Unlike a lot of the shit I read, this guy appears to have decades of practical work and an encyclopedic knowledge of organizing history covering many countries. I was just floored by the breadth and depth of his argument here and here for instance. Moreover, there are two things about his argument that I find fascinating. First, he admits his ideas have gone nowhere practically — this admission is very fucking refreshing on the Left. Second, his argument that the Left has no ambition or self-confidence is frighteningly on fucking target.
On the basis of just those two statements alone, this guy deserves everyone’s attention, I think. He has given a lot of thought to the problem and invested a lot of effort figuring out a solution and clearly he cannot be accused of thinking on the margins. Moreover, I don’t think it is enough to say his conceptions of change are fundamentally flawed, since they are evidently no more flawed than any other ideas among, for instance, parties like SYRIZA, etc.
SYRIZA is rushing headlong into a crisis right now for ideas not much different than the ones for which Panitch argues. The only difference here is that the crisis for SYRIZA results from actually winning political power, not by a failure to win it. But failing to win political power and winning it makes all the difference in the world no matter how flawed our conceptions.
See, for instance, the Paris Commune, when the communards were faced with the necessity of breaking the state power, not reforming it. There is no hint of this necessity to be found in the Communist Manifesto — it was imposed on the Communards by the reality of implementing their program. All the measures indicated in the Communist Manifesto program had to take the back seat to the necessity, first of all, to break the state. When Panitch refers to this program — “Marx made – among his list of ten reforms – for the centralization of credit in the hands of the state” — he completely overlooks that these demands were superseded by breaking the state, not simply “transforming the structures of the state”.
Is breaking the state as valid as public banking?
Was this lesson from the Commune valid? By the time of the Great War there were clearly two opinions on this. Some Marxists held the state had to be broken, others argued the existing state did not have to be broken. The Bolsheviks, who argued for the former, upon taking power changed their view and actually proposed to employ the existing state to build socialism. By the end of World War II, this debate over the state was further distorted into whether there had to be a violent revolution or not. So the question hinged, it seems, on whether this state would be “seized” or simply won by “peaceful means” in an election.
In Panitch’s opinion, the distinction is now between “change the world without taking power” and “engaging on the terrain of the state”. But, there is a fallacy in Panitch’s argument regarding the need to engage on the terrain of the state: simply stated society at large is the terrain of the state. By supposedly engaging on the terrain of the state, Panitch clearly means engaging within the machinery of state itself, as distinct from society. Which is to say, Panitch is suggesting we attempt to transform society by means of the state machinery. This is pretty much the gist of what he means when he says, “a system of democratic economic planning, in which what’s invested and where it’s invested and how it’s invested is democratically decided.”
However, if these decisions are not already being democratically decided, they must be despotically imposed by the state. The leads us to another problem with Panitch’s argument: if the decisions of the democratic state are being despotically imposed on society despite democracy, it seems to me this would be easier to explain this to people than it would to explain, “how capitalist finance really works, why it doesn’t for them and why what we need instead is a publicly owned banking system that is part of a system of democratic economic planning.” It should, in other words, be easier to explain why democracy itself is a farce and must be replaced by an association of producers. This is particularly true since it is widely felt that Washington is just not at all responsive to the control of voters.
It seems Panitch is ready to accept the then innovative ideas of mid-19th century communists when it comes to such standard present day bourgeois practices as a progressive income tax, credit socialization, land use regulation, free education, public roads and infrastructure, etc., but he is not willing to accept the addition of the lesson, hard won at the cost of the lives of many communards, that the state must be broken to this list. I am not sure why this is, and can find no reason for this except that it is the one item not accepted by the fascists. Almost every measure in the Communist Manifesto is standard practice by the fascist states in every country except the replacement of the state itself by association.
A further objection can be made to Panitch’s argument: As he states,
“But you do have to be a Marxist to understand that [reform] is not going to happen by bringing some lawyers into a room and signing a few documents. … fundamental change can only really happen through a massive class struggle, which would involve a massive transformation of the state itself.”
If even a simple reform recommended by bourgeois writers, and proposed by communists 150 years ago, like making banks public utilities, requires a massive class struggle involving a massive transformation of the state, why not simply aim at the outset to replace the state by association — thus ending the false distinction between changing the world without taking power and engaging on the terrain of the state. The only argument for not aiming at the outset to replace the state by association is that simple reforms like public banking is easier than wholesale reorganization of society. Panitch’s argument is that this is not true: even such a modest and self-evident reform of banks, recommended by a bourgeois writer, requires a massive class struggle.
Changing the world without taking power over others
I think Panitch definitely falls for a phony and entirely meaningless distinction between “changing the world without taking power” and “engaging on the terrain of the state”, i.e., within society itself. Both can be accomplished by changing the world without taking power over others, i.e., by replacing the state by association. If, as Panitch argues, even simple reforms require massive class struggle, the working class cannnot afford to dispense with its own organization. The aim of mobilization cannot be to turn this power over to the state, as was done in Egypt, but to become the new conditions of society.
In Tahrir Square all were equal and no one was able to dictate the views of others, this short-lived association, however, soon gave way to talk of constitutions and ministries. The association that had brought down the Mubarak regime was deemed unfit to manage its own affairs. Although for three decades no political party was able to do what the association did in 18 days, “commonsense” ruled this association too inept to manage society. In other words, “commonsense” decided that the working class should only serve as cannon fodder. The working class should be “mobilized” whenever some faction or another wishes to marginally change the existing state with some piecemeal reform and then rapidly demobilized once success has been secured.
I am not suggesting this is what Panitch is trying to do, but he has to see events like Egypt in this light as well as the danger hidden beneath SYRIZA’s growing popularity and likely victory. If upon winning the coming election, SYRIZA does not immediately begin replacing the state with association it must fail.
T.I.N.A.: There is no alternative to the fascist state?
Panitch’s essay led me to contemplate what he called the lack of ambition and self-confidence of the Left. People have completely accepted T.I.N.A. The Left is now incapable of articulating an alternative that does not go through the existing state. The healthy section of the Left now no longer even tries — it has given up entirely — while the unhealthy section is mired in opportunism.
I think this is a good thing.
Fascism has completely broken the Left down: appropriated its symbols and converted its highest ideals into election Newspeak. Fascism has made it impossible for the Left to formulate its argument in a political form by immediately expropriating every instance.
Just look how Tahrir Square turned into the FSA — T.I.N.A writ large.
Every time the Left looks for a political exit from this crisis it must fall into the lap of fascism — T.I.N.A. Fascism thrives on politics, since it is an entirely political mode of production — the production of surplus value in the form of the state. If the Left are having a problem articulating their aims in a political form is it not just possible “political aims” are the problem? It is not a problem of finding the correct political aim, but of realizing politics itself is a dead end.
For you mainstream Marxists out there, that means there is no longer any possibility of a so-called “minimum program” for the working class. Another way to put it: the first act of the Commune was to break the state. This is no longer possible without breaking capitalism entirely. When the state is the capitalist, the first cannot be separated from the second. Breaking the state was always the “minimum program” of communism — you just forgot this. Everything else proposed to be undertaken in the Communist Manifesto — which is still the only common program adopted by all communists alike, irrespective of whether they call themselves Marxist or anarchist — depended on immediately breaking the state. It is the development of the capitalist mode of production itself that has altered this and made it impossible to do one without the other. So the task hasn’t changed in 150 years, the implications of breaking the state has: it must immediately lead to breaking capitalism itself.
So let’s assume there is a need for a so-called “minimum program” as proposed by mainstream Marxism. This means a set of measures communists propose must be accomplished by the working class upon assuming power. This is based on some assessment of the current situation and the difficulties the class will face once in power. This fucking minimum program itself rests on the assumption the working class will replace the state with its association. It is not as if replacing the state is a long term goal; it is the precondition of an assumption of power, the form this assumption takes. Before embarking on any sweeping changes to society, in other words, as Marx argued against Bakunin, “the whole thing begins with the self-government of the commune.”
I mean, how much clearer could Marx have been on this, Marxists? Did he mumble? So before you can even articulate a minimum program, you have to explain how the existing state must be replaced by association. In other words, you can’t articulate political aims but aims that are entirely anti-political. You begin with the notion that, in any case, the existing state will be leveled in its entirety and replaced by association — no fucking minimum wage, no fucking social security, no fucking EPA, no fucking defense department — only association. If you can’t get on-board with this — which is ONLY the precondition for a minimum program — stop calling yourself a Marxist, please. Call yourself a progressive, or better yet, a fucking fascist, which you are.
Do we need a state to care for the elderly?
Yes, the environment, the disabled, the elderly, the unemployed etc. have to be cared for — but it is the association that does this! The task is not left to a bunch of elite managers who move back and forth from Wall Street to federal agencies. The association of producers decides EVERYTHING. This is already a more audacious program than conceived in any party program produced by a Marxist party today. And I think I can say this without reservation: Marxist programs do not even come up to this minimum requirement for a minimum program.
The point is not how much of the social product is devoted to education of children, but who decides this. Is this decided by bureaucrats in the Department of Education or by an association of producers?
T.I.N.A. is not about where social resources go or how they are employed, it is about where these decisions are being made. Once the association of producers has taken command of the social resources, these resources no longer exist as forms of capital. They are transformed into mere use value — objects of utility for the mass of society and subordinated to their needs alone. Marxists and the Left in general focus on how the social product will be divided, when the real question is who is making this decision.
Folks, the capitalist class is trapped. It is utterly dependent on the state and has no options in this regard. It cannot go back to an earlier mode of accumulation, which is why as a class it is desperate and violent in the extreme. There is not one country today where the capitalist class can survive the replacement of the state by an association of producers. And, as Egypt proved, there is not one country today where the working class can “take power” without replacing the state with its association.
Marxists and the Left in general keep trying to avoid this brutal fact, by articulating a set of demands aimed at less than association. It will not work: as Tahrir Square shows, anything less than association will be co-opted by the fascist state.
Keynesian economic policies don’t work, but fighting for these policies will?
Guglielmo Carchedi’s essay on the so-called Marxist multiplier has me bugging. He is handing out bad advice to activists in the social movements and telling them this bad advice is based on Marx’s labor theory of value. The bad advice can be summed up concisely: Keynesian policies do not work and cannot work, but the fight for these policies (as opposed to neoliberal policies) can help end capitalism:
From the Marxist perspective, the struggle for the improvement of labour’s lot and the sedimentation and accumulation of labour’s antagonistic consciousness and power through this struggle should be two sides of the same coin. This is their real importance. They cannot end the slump but they can surely improve labour’s conditions and, given the proper perspective, foster the end of capitalism.
Frankly, Carchedi’s advice is the Marxist academy’s equivalent of medical malpractice. (For the record, Michael Robert’s has his own take on the discussion raised by Carchedi’s essay.)
Based on what I have described of Bernanke’s policy failure so far, is it possible to predict anything about the future results of an open ended purchase of financial assets under QE3? I think so, and I share why in this last part of this series.
I stopped my examination of Bernanke’s approach to this crisis and the problem of deflation after looking at his 1991 paper and his speech in 2002. I now want to return to that series, examining two of his speeches this to discuss the problems confronting bourgeois monetary policy in the crisis that began in 2007-8.
The world market had been shaken by a series of financial crises, and the economy of Japan had fallen into a persistent deflationary state, When Ben Bernanke gave his 2002 speech before the National Economists Club, “Deflation: Making Sure “It” Doesn’t Happen Here”. Bernanke was going to explain to his audience filled with some of the most important economists in the nation why, despite the empirical data to the contrary, the US was not going to end up like Japan.
So I am spending a week or so trying to understand Ben Bernanke’s approach to this crisis based on three sources from his works.
In this part, the source is an essay published in 1991: “The Gold Standard, Deflation, and Financial Crisis in the Great Depression: An International Comparison”. In this 1991 paper, Bernanke tries to explain the causes of the Great Depression employing the “quantity theory of money” fallacy. So we get a chance to see this argument in an historical perspective and compare it with a real time application of Marx’s argument on the causes of capitalist crisis as understood by Henryk Grossman in his work, The Law of Accumulation and Breakdown.
In the second part, the source is Bernanke’s 2002 speech before the National Economists Club: “Deflation: Making Sure “It” Doesn’t Happen Here”. In this 2002 speech, Bernanke is directly addressing the real time threat of deflation produced by the 2001 onset of the present depression. So we get to compare it with the argument made by Robert Kurz in his 1995 essay, “The Apotheosis of Money”.
In part three, the source will be Bernanke’s recent speech before the International Monetary Fund meeting in Tokyo, Japan earlier this month, “U.S. Monetary Policy and International Implications”, in which Bernanke looks back on several years of managing global capitalism through the period beginning with the financial crisis, and tries to explain his results.
To provide historical context for my examination, I am assuming Bernanke’s discussion generally coincides with the period beginning with capitalist breakdown in the 1930s until its final collapse (hopefully) in the not too distant future. We are, therefore, looking at the period of capitalism decline and collapse through the ideas of an academic. Which is to say we get the chance to see how deflation appears in the eyes of someone who sees capitalist relations of production, “in a purely economic way — i.e., from the bourgeois point of view, within the limitations of capitalist understanding, from the standpoint of capitalist production itself…”
This perspective is necessary, because the analysis Bernanke brings to this discussion exhibits all the signs of fundamental misapprehension of the way capitalism works — a quite astonishing conclusion given that he is tasked presently with managing the monetary policy of a global empire.
We have to change the terms of the debate on jobs and debt. We need to insist a job is nothing more than wage slavery and we don’t need Washington’s effort to create more of it by adding to this wage slavery even with more debt slavery. It is not like we have to argue existing jobs need to go away; why is Washington creating more of them, when existing hours can be reduced to solve the problem of unemployment rather than more debt?
2. Monetary Policy, or what happens when a hyperinflationary collapse of the dollar is NOT the worst possible outcome
The media is abuzz with speculation following the Federal reserves announcement of quantitative easing version 3.0. This version calls for the Federal Reserve to pour unlimited quantities of currency created out of nothing into the market, buying up worthless assets on a monthly basis to the tune of $40 billion per month. The result could be the printing of nearly a half trillion dollars in new, freshly produced, token money being forced into the economy every year until further notice.
The implications of this monetary insanity can be understood simply by reading the opinions of any number of economists and market watchers who are very delicately raising the spectre of a Zimbabwe style hyperinflation. Still subdued but growing talk of such an event has moved from the periphery of “financial advisers” and gold bugs into the mainstream argument of some pretty staid experienced players.
Take, for instance, a recent comment by Art Cashin, a veteran of the stock market who has probably seen every high risk moment in the market since well before Nixon closed the gold window in 1971, up to and including witnessing the market plunge 25% in a single day in 1987. Cashin oversees the management of more than $600 billion in assets and is not given to losing his head over every minor fluctuation in the S&P 500. A market crash is not Cashins concern, however — he fears hyperinflation. Cashin notes Weimar Republic hyperinflation did not burst out all at once, but was preloaded by continuous money printing that only made its way into the market over time:
“It (the inflationary spiral) was in fact delayed for a couple of years. But once it started, it could not be taken back. So here in the United States and in the European Union, there are very few, if any, signs of inflation because people are so concerned (that they are hoarding money).
“[You] will have to keep an eye on the velocity of money. Watch figures like, here in the United States, the M2 (figure), and see if it begins to grow through velocity, and get very cautious at that point. There are some potentially eerie parallels (today vs the Weimar Germany era). The United States trauma was unemployment and deflation (in the 30s), but in Germany in the 20s, it was money that ruined an entire society.”
Events are not yet to the point where Cashin is advising his clients to take their worthless fiat currency and sell it for gold, silver and other precious commodities, but he is suggesting there is such a heightened level of potential for a monetary catastrophe at present to warn people should begin to look for indicators of hyperinflation in the data:
“I think you are certainly at a ‘flashing yellow alert.’ You have in place a variety of things that could begin to react somewhat domino-like. As I said, there are measures and items that the listeners (and readers) can look for themselves. Look at, what is the growth in the money supply, M2? It comes out every week.
If [the M2 measure of the money supply] begins to grow rapidly, then the money that the Fed has created will be seen as moving through the system. That will create the high risk of accelerated inflation, and perhaps, God forbid, runaway inflation.”
Even if we discount Cashin’s argument as just another example of fringe hysteria, Zero Hedge recently explained, there are voices within the Federal Reserve’s own research department that echo Cashin’s argument:
Yes, it is ironic that the Fed is talking about “common sense”, we know. But the absolute punchline you will never hear admitted or discussed anywhere else, and the reason why the Fed can no longer even rely on its models is that…
Carlstrom et al. show that the Smets and Wouters model would predict an explosive inflation and output if the short-term interest rate were pegged at the ZLB (Zero Lower Bound) between eight and nine quarters. This is an unsettling finding given that the current horizon of forward guidance by the FOMC is of at least eight quarters.
In short: the Fed’s DSGE models fail when applied in real life, they are unable to lead to the desired outcome and can’t predict the outcome that does occur, and furthermore there is no way to test them except by enacting them in a way that consistently fails. But the kicker: the Fed’s own model predicts that if the Fed does what it is currently doing, the result would be “explosive inflation.”
You read that right: if Bernanke does what he not only intends to do but now has no choice but doing until the bitter end, the outcome is hyperinflation. Not our conclusion: that of Smets and Wouters, whoever they are.
And these are the people who are now in charge of everything.
Is there anything worse than a hyperinflation for capitalism?
The warnings by Cashin and the writers at Zero Hedge suggest Bernanke’s Federal Reserve is engaged in an extremely risky gamble on a policy that could lead to the dollar replacing Kleenex as the preferred method of catching sniffles during cold and flu season. I think it is safe to say the Fed would not be undertaking this gamble just to move unemployment a few points. A high risk gamble on this scale with the world’s reserve currency clearly hints what is at stake is likely much worse than a mere outburst of hyperinflation.
So what is worse than a hyperinflation of the dollar? What threat could there be to capitalism right now that risks reducing the dollar to a worthless piece of scrip with no purchasing power whatsoever? How about, a hyperdeflation, an inverse condition where all prices instead of going to infinity and beyond go to zero?
But there is a big problem with this argument: There is not a single recorded instance of hyperdeflation in history, we are told, and logically it cannot happen. Zero Hedge remarks on the question in a caustically titled post “The Monetary Endgame Score To Date: Hyperinflations: 56; Hyperdeflations: 0”:
We won’t waste our readers’ time with the details of all the 56 documented instances of hyperinflation in the modern, and not so modern, world. They can do so on their own by reading the attached CATO working paper by Hanke and Krus titled simply enough “World Hyperinflations.” Those who do read it will discover the details of how it happened to be that in post World War 2 Hungary the equivalent daily inflation rate of 207%, the highest ever recorded, led to a price doubling every 15 hours, certainly one upping such well-known instance of CTRL-P abandon as Zimbabwe (24.7 hours) and Weimar Germany (a tortoise-like 3.70 days). This and much more. What we will point is that at no time in recorded history did a monetary regime end in “hyperdeflation.” In fact there is not one hyperdeflationary episode of note. Although, we are quite certain, that virtually all of the 56 and counting hyperinflations in the world, were at one point borderline hyperdeflationary. All it took was central planner stupidity to get the table below, and a paper with the abovementioned title instead of “World Hyperdeflations.”
The Cato Institute’s paper presents a very powerful empirical argument against the case for deflation and hyperdeflation. Unfortunately it rests entirely on two fallacies that are hidden in its very title: First, hyperdeflation has nothing to do with the fate of any fiat currency, even the world reserve currency, the US dollar. A hyperdeflation is not the death of any particular currency nor even a series of currency collapses — it is the death of money itself.
The second fallacy in the Cato paper will take a bit longer to explain and once explained will show why it is so important to every anarchist, libertarian and Marxist.
Can there be such a thing as a hyperdeflation?
A hyperdeflation might possibly be defined as a situation where prices of commodities declined even as the supply of money increased. As the Cato Institute paper explains — there is no recorded instance of a hyper-deflation in the historical record. Of course, mild and even very severe deflations did occur several times up until the Great Depression; but history has many more examples of hyperinflations, as the Cato paper argues.
The problem with the Cato paper, however, is that its argument rests on the “quantity theory of money” fallacy — which according the Wikipedia states “that money supply has a direct, proportional relationship with the price level.” Which is to say, the Federal Reserve can force prices to increase — create inflation — if it increases the quantity of currency in circulation. In fact, this theory is wrong. The prices of commodities do not depend on the quantity of money in circulation, but on the quantity of socially necessary labor time required for their production. And here, at least theoretically, the case against hyper-deflation falls apart.
Here is the problem at the end of capitalism’s life: If the Marxist writers Moishe Postone and Robert Kurz are correct, the socially necessary labor time of commodities now have two distinct and contradictory measures: its labor time as a simple commodity and its labor time as a capitalistically produced commodity — yielding two quite different potential prices.
To put this in simpler terms, the price paid in a store for a typical commodity like an iPhone is mostly a reflection of the costs of economically wasted labor. The iPhone itself takes very little direct labor to produce, but, if its production is to be profitable, the accumulated costs of waste within the economy requires a massive mark up in the price you pay for it at the checkout counter.
What is this waste? Well, one source is the overhead created by the costly burden of government at present. Since the government doesn’t produce anything, its entire cost is borne by the rest of society. If, for instance, government accounts for about 50% of GDP, this means every product has a 100% markup just to pay for the operating expense of federal, state and local government. So about half the cost of your iPhone goes to cover things like drone attacks on Afghanistan civilians or corn subsidies to agribusiness. These cost don’t appear anywhere unless it comes directly from your wages in taxes, but even in this case the costs must be passed on in commodity circulation and will accumulate there in the costs of each commodity.
So every commodity essentially has two prices: the one that you pay at the checkout counter, which includes all the wasted economic activity in society, and the other, hidden, true price, which is the actual direct cost of producing to commodity. Surprisingly, this latter price is now only a negligible fraction of the total price of an iPhone, a pair of shoes, or even an automobile — the overwhelming bulk of the price of every product you buy consists of the hidden costs of economic waste within society that has accumulated over the past eighty years.
This is why, as I discussed in part one of this series, it now takes as much as seven dollars of debt, or even more, to create a single dollar of wages through fascist state economic policies designed to create jobs. Simply put, this internal discordance in the price of every commodity is a hyperdeflation weapon of mass destruction just waiting for a triggering event. What is making the Federal Reserve risk even the total collapse of the dollar on an insane gamble is the fact that this implosion can be triggered by the mildest hint of deflation. To prevent this event, the Federal Reserve must restart the failed system of debt accumulation that crashed in the financial meltdown of 2008.
Anarchists, libertarians and Marxists have a chance to put sand in the gears of the fascist state and bring it down along with the entire mode of production. All it requires is for us to change the debate over jobs and debt — opposing both Federal Reserve monetary and Washington fiscal policy aimed at expanding still further the system of wage slavery through policies designed to promote economic waste and debt.
But we can do this only if we are willing to take capital and the state head on by demanding an immediate reduction in hours of work until everyone who wants to work has a job, along with the elimination of all public and private debts, and abolition of all taxes.