Category Archives: crisis

Global Organic Crisis and Geopolitics

[This essay is a slightly revised version of  Stephen Gill (2015) ‘The Geopolitics of Global Organic Crisis.’ In Greek, Translated by Iraklis Oikonomou. Utopia – Review of Theory and Culture. April-May, Νo. 111: 25-36. An English version was also published online in AnalyzeGreece! on June 5, 2015: http://www.analyzegreece.gr/topics/greece-europe/item/231-stephen-gill-the-geopolitics-of-global-organic-crisis ]

This essay sketches aspects of the constitution of geopolitical power in world capitalism and a conceptualization of organic crisis relative to questions of debt, dispossession and the “new constitutionalism”. It highlights contradictions, questions and potentials that concern the making of our collective future.

The Geopolitics of Market Civilization

In a geopolitical political situation where communism and the lefts have weakened, the last 30 years have seen a remarkable and truly global restructuring of power. It is reflected in extraordinary, accelerating concentrations of capital and wealth in a tiny proportion of the world’s population – a global plutocracy supported by a governing class that principally rules on behalf of capital. This is partly reflected in the following graphic.[1]

Wealthy80_WEB190115

Today, capital is increasingly concentrated in most of the key sectors in an expanded capitalist world market: e.g. media, computing, energy, pharmaceuticals, autos, finance. Previously state owned or public enterprises are being rapidly privatized, amid a general process of the commodification of public goods, knowledge and public services.

The new capitalist order is structured hierarchically: it is simultaneously class-based, racialized, and gendered. It operates to systematically empower privileged social strata and the affluent, the principal beneficiaries of what I call neo-liberal market civilization. “Market civilization” is now the dominant model of capitalist development – one that is possessively individualistic, me-oriented, consumerist, exploitative of human beings and nature; it is unequal, energy-intensive, wasteful and ecologically myopic. This pattern of development is, by definition, exclusive and can be only available to a minority of the population of the planet, but a pattern that, nevertheless, is serving to consume the vast bulk of global resources.

None of this means that the market civilisation model and the disciplinary power of capital that governs it – primarily through market mechanisms – is uncontested; indeed one of the reasons why such power is not hegemonic and subject to resistance and struggle is because of its distributional consequences, which raise fundamental issues of inequality and social justice.

The system of governance that oversees this market-based mode of development, I call disciplinary neo-liberalism. It is backed by the systematic use of unequal geopolitical arrangements (such as the nuclear non-proliferation treaty). It involves the extended use of surveillance by NASA and its ‘Five Eyes” partners (Australia, Canada, Great Britain and New Zealand). More generally, it relies upon an enormous concentration of military capabilities linked to systems of policing/military power and securitization of state apparatuses that have proliferated since the attacks on the Pentagon and the World Trade Center on September 11, 2001.

Such mechanisms of global surveillance/policing and capacity for intervention, principally dominated by the United States, have outflanked the previous geopolitical rival to capitalism, the USSR. The US holds massive military preponderance with many thousands of bases and installations worldwide. In sum, the USA – along with its key allies – uses military and security power as well as extended panoptic mechanisms to keep friends and enemies alike under a condition of constant surveillance, thereby guarding the citadels of corporate and political power.

These elements all reflect the post 911 increasing securitization of world capitalism under continuing conditions of political and economic emergency.[2]

Organic Crisis and Morbid Symptoms

Some of the key issues associated with this situation have worsened since the global crash of 2007-8. Yet even before the crash in 2006 the leading organ of capitalism, the Financial Times asked how, without reading Marx’s Capital, could one possibly explain how the world’s richest 2% of people now owned more than 50% of the world’s global assets – a form of inequality which is subsequently worsened during the global financial and economic crisis.[3] By contrast, perhaps 90% of the world proletariat are “unprotected” or precarious workers, who are non-unionized and deemed to be disposable by the employers, and a full 70% of them have no social protection (ILO 2015). They are often landless workers and peasants who are marginalized from integration into world capitalism but still subjected to many of its forces and pressures, insofar as they are dispossessed of their basic means of livelihood and forced to migrate to the urban centres of the Third World, usually to live in slums, searching for work in entirely unregulated labour markets.

With such observations in context, this essay assumes that the present crisis is very deep and it involves much more than a crisis of capitalist accumulation or a necessary self-correction aided by macroeconomic intervention and bailouts. To capture the scale and depth of this crisis, this essay reformulates and extends Gramsci’s concept of organic crisis.

I will suggest that any resolution of the global organic crisis requires a revitalisation of democracy and much wider mobilization of progressive social forces to press for measures that are sustainable and that are not one-sidedly implemented on behalf of capital. Indeed it might be argued that the present conjuncture corresponds, in part, to the Chinese character for crisis, a character that combines moments of danger and opportunity.  It is linked to the fact that the current global political situation is pregnant with the following paradox once formulated by Gramsci (1971: 276): “The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear.”

In this period of morbid symptoms, therefore, the central hypothesis of this essay is that the future of the world involves a multiplicity of intersecting and interrelated crises, each of which presents moments of danger and opportunity for different political forces, although these limits and possibilities are structured by the relations of force – economic, political and military that operate in and across jurisdictions and regions according 21st geopolitics and the global political economy.

When Gramsci reflected on developments in the 1930s he saw organic crisis as involving a crisis of representation and decay in prevailing forms of ideology and political organization – this was reflected in not only the eclipse of the old order in Russia but also in the collapse of liberalism and the rise of fascism.

In the early 21st century there is also a crisis of representation although it is structured in different ways. Certainly recent substantial evidence in much of the world indicates that mainstream political parties (such as Christian and Social Democrats, Conservatives and Liberals in Europe) associated with varying degrees of support for disciplinary neo-liberal capitalist governance have rapidly lost members and political support (Gill and Solty 2013).  At the same time there has been a growth in support for alternatives, many on the right, e.g. in Europe, where in some countries, fascism and Nazism is on the rise; in others a new left seems to be emerging, e.g. in Greece and Spain. It seems that once again there is an impasse for the old frameworks of politics and a search for new directions.  In this context our local and global political predicaments go well beyond questions of capital accumulation and poses fundamental and global questions concerning ethics, politics and governance in the making of our collective future.[4]

Nonetheless we should not underestimate the robustness of geopolitical and legal strategies to contain challenges to the status quo, for example those, as noted, that are associated with intensification of state surveillance and the criminalization of dissent.  Indeed in addition what is also frequently overlooked is institutionalization of measures to prevent democratic governance of key elements of the global political economy. A good example of the latter is new constitutionalism (discussed in more detail below in relation to central banking).

New constitutionalism encompasses a myriad web of bilateral regional and multilateral trade and investment agreements, as well as balanced-budget laws and other mechanisms that embody a most peculiar version of the rule of law: one that guarantees overriding status to private property rights, including full entry and exit options for capital (“free trade”) and full security of ownership for capital whilst simultaneously preventing democratic control over the political economy. The attempts by the major capitalist powers, especially over the past 30 years, to consistently apply new constitutional measures to guarantee the liberalization of trade and investment (e.g. the WTO and NAFTA) stand in contrast to the world geopolitical arrangements, which have a decidedly arbitrary quality that operates well beyond any coherent or consistent conception of the rule of law (Gill and Cutler 2014).

In this broader context we note that many morbid symptoms are experienced unequally in the global North and the global South, although some of the conditions in both regions seem to be converging with the effects of debt imperialism, dispossession, authoritarianism, dictatorship, and foreign intervention – underlining the vast disparities in life chances within and across classes and nations.  We live in a world characterized by the ever-greater exploitation of human beings and nature by capital, whose power, as noted above, is increasingly concentrated in fewer giant monopolies or oligopolies, e.g. much of the media where a type of neo-liberal newspeak, providing the official versions of the truth, prevails.

Nevertheless, contestation is emerging over questions of lifestyle and sustainability, and deadlocks over climate change and food and health security are linked to political struggles over corporate domination and private control of world agriculture, life sciences, medicine, and pharmaceutical industries.

The world food crisis involves global patterns of malnutrition and health: 25% of the world is obese or overweight; 25% is starving (Albritton 2009); indeed 1 in 7 people on the planet go hungry in the face of plenty.   In a market system prices and incomes determine if one eats or starves or has medical care: if you have no income you cannot be a consumer or a buyer of medical services or drugs, i.e. such goods and services are bought in the market. Indeed, capital (including that developed by the pharmaceutical corporations and other enterprises associated with private provision of drugs and health sciences, as well as insurance) is not focused upon the promotion of global health but on the accumulation of capital via the profit system. Capital will profit from obesity as well as from hunger.

Similarly, food prices are increasingly determined through a global market-based system based on the control of agriculture by a relatively small number of giant corporate oligopolies.  This system is driven by the accumulation of capital via profits; indeed since the start of the 21st century much of that profit has been associated with global futures trading linked to speculation by banks and other investors flocking to seek profits from buying and selling land and agricultural commodities. The obverse of such trends is a secular reduction of self- sufficiency and greater destruction of local systems of livelihood.  Corporate controlled agrarian systems have tended to increase use of non-renewable sources of energy and chemical fertilizers as well as the world’s freshwater supplies.  This fossil-fuel intensive and export-orientation of agriculture is driving crop monocultures and massive damage to biodiversity whilst contributing substantially to global warming.

Debt, Accumulation by Dispossession and New Constitutionalism

Accelerated privatization of water, land, natural resources, and public goods such as education and health systems is occurring at the very moment when broad swathes of public opinion support social protection and universal access to public education and health care.  The struggles over the global organic crisis are exacerbated by these “new enclosures” which involve the expropriation of the “social commons.”

Such dispossession is paralleled by the wholesale defunding of the development potentials of many of the countries in the world as they struggle to pay their accumulated debts, typically to the very foreign bankers who have made reckless, highly leveraged investments that have been bailed out by governments.

Third World indebtedness – and increasingly that of the metropolitan heartlands of capitalism – constitutes a means of expropriation or “accumulation by dispossession” akin to what Marx – in Capital – characterized as primitive accumulation through colonization.  It has been estimated that many of the poorest countries pay up to 20% of their annual fiscal revenues in foreign debt servicing, often in repayment of debts whose principal has already been repaid several times over, even though the original loans may have been used to fill the coffers of dictators and potentates – now in offshore bank accounts.  These “public” debt obligations are overseen by combinations of private banks and public institutions such as the IMF and World Bank along with the governments of wealthier countries, for example the so-called “troika” (IMF, EU, ECB) in the European Union.  The trillions of dollars paid by the global South for the debt servicing since at least the early 1980s has come at the expense of cuts in social programs, which particularly affect women and children, especially with respect to education and health care, although recent policies of the World Bank have attempted to mitigate some of these effects in the global South.

Put differently, recurring financial and debt crises, with their devastating social and economic effects, are not new in the global South, even though, up until recently, they have been largely avoided in much of the North.  After 2010 financial and debt crises migrated to Europe and to other heartlands of global capitalism – to be followed by a politics of austerity and with it, a further expropriation of the social commons.

Such globalizing contradictions have important gender and racial dimensions. A majority of the world’s work, including caring work, is done by women and a majority of the world’s poor are women in the global South.[5]

Nevertheless, the forces of disciplinary neo-liberalism have so far retained the upper hand in defining the responses to the organic crisis –the various lefts of the world have appeared relatively weak or internationally isolated, with a number of notable exceptions such as in Latin America.  This seemed to be the case when Syriza was elected in January 2015 on a radical anti-austerity platform in Greece to be encircled by opposition from all other Eurozone members who stood in line behind Germany’s form of neoliberalism.

As noted above, one of the key elements of neoliberal governance is a range of arrangements I call the new constitutionalism, the legal centrepiece of neoliberal economic orthodoxy.  It is intended to insulate the commanding heights of economic policy from democratic control or scrutiny and place it in the hands of capital, and primarily financial interests.  A quintessential example is the European Central Bank, one of many “independent” central banks that have mushroomed in the neo-liberal era since the early 1980s.  Indeed, this independence gave central banks substantial latitude to act as a lender of last resort and thus to massively bail out banking interests as well as other corporations following the crash of 2008.

Whilst central banks are independent of governments, their boards of governors are largely drawn from the ranks of private financial interests (not from trade unions or from the ranks of progressive political economists).

Central banks have been the principal drivers in the issuance of massive and rising sovereign debts since the 2008 crash, debts that have now been estimated to have risen by US$57 trillion (government debts have increased by $25 trillion) over the last seven years, to stand at $199 trillion or 286% of GDP.[6]

Huge political battles over future fiscal stringencies to pay for these debts can therefore be anticipated over coming years. Global indebtedness on this scale clearly tilts the balance of power in the global political economy into the hands of creditors and bondholders.

Much of the monetary expansion has enriched super wealthy plutocrats in the context of rapidly accelerating global inequality to levels that were last seen in the 1920s.  Normally the class-based nature of central banking and monetary policy is rarely debated in mainstream media and political discourse, but it was demystified recently by one of its primary beneficiaries, wealthy financier George Soros, in a speech at the 2015 World Economic Forum in Davos Switzerland. Soros warned that the planned Eurozone stimulus measures under the aegis of the ECB, to inject (in effect to create) EUROS 1.1 trillion into the Eurozone economy (i.e. make cheap money available to private banks) in the form of “quantitative easing”, would “increase inequality between rich and poor both in regards of the countries and people”.  Soros pointed out that “excessive reliance on monetary policy tends to enrich the owners of property and at the same time will not relieve the downward pressure on wages”.[7]

To make this point about monetary policy under new constitutionalism and class politics clearer, the following chart shows the European Economic Recovery Program (designed to invest in job creation measures) plan had a mere $200 billion in bailout allocations after 2008 (1.5% of the EU’s GDP).  This contrasts with the huge Euros 4.5 trillion in bailout aid transferred to the European financial sector (37% of total EU GDP) – and again, this was prior to any additional funds that might come from “quantitative easing.” Such a massive socialization of the losses and debts of the private financial sector represents arguably the largest transfer of funds from citizens to private creditors and financial interests in the history of the continent.[8]

8-7-2015 12-50-17 PM

 

Furthermore, despite claims that central banks are “independent” of political influence or geopolitical inclinations, the new left-wing SYRIZA government in Greece that was elected in January 2015 will not be able to take advantage of the benefactions of the ECB since the latter has refused to lend to Greek banks against the security of Greek government bonds, a measure that does not apply to other Eurozone members.

Put simply, at the time of writing (April 17, 2015), the ECB was threatening Greece with a credit crunch at precisely the moment it sought a breathing space to renegotiate its debts. As was noted earlier when this denial of credit by the ECB began: “The ECB will be seen in Greece to have punished the Greek people for daring to vote for an alternative to Eurozone economic orthodoxy”.[9]

Green Capitalism versus Green Alternatives

Turning now to the relationship between capital and the environment, and the proposals for “green capitalism” that were widely discussed prior to the financial meltdown of 2008, these should be judged in terms of whether they address not only specific ecological challenges, but also the general crisis of social reproduction and livelihood that compounds the ecological problem. Indeed there is some substantial thinking on the left along these lines to develop a European Green Alternative but as yet there is insufficient political support for such measures in the EU.

Of course it is desirable for capital to be constrained from completely reckless exploitation of global resources and forced to use energy more efficiently.  However, green capitalism is entirely compatible with the prevailing forms of consumerist growth associated with market civilization, even if such consumption might be reconciled with lower levels of fossil fuels use, lower amounts of chemical fertilizers, and the introduction of more renewable sources of energy.  It can also go with land grabs, (including massive recent purchases of land by oligarchs, celebrities and politicians seeking remote bolt-holes in case of political threats) as well as wider use of genetically modified seeds and new technologies of control over life-forms, e.g. bigger feedlots and expanded use of hormones to feed meat-based diets.  More fundamentally, green capitalism is still characterized by the contradiction between private accumulation and enclosure of the social commons versus social needs.

Following the adoption of the Kyoto Protocol in 1997, there has been acceleration in the commodification of the atmosphere via the “new carbon economy” in which actors can buy and sell carbon credits or carbon offsets in capitalist markets (Gill and Cutler 2014).

Moreover, the question of intellectual property rights is at the heart of the impasse between the global North and the global South in the climate change negotiations.  The same applies to agricultural technologies, including private control over seeds.  Private corporations want rents for their technologies which poorer farmers and poorer countries can ill afford to pay.  Green capitalism will therefore do very little to address the intensification of economic and social insecurity of a majority of people throughout the globe.

In my view Alternative Left arguments that address this question should be based on the view that technologies to ameliorate environmental problems should be global public goods – not mechanisms of control by corporations, codified as they currently are by intellectual property rights in national legislation in the bigger nations (e.g. USA and EU) and in the new constitutionalist organizations such as the WTO which has gained jurisdiction over intellectual property rights, redefining them as tradable commodities.

 “The Return to Normalcy” versus the Making of the Future

What will this all mean politically in the affluent countries? In most of the North Atlantic countries about 70% of workers are in services, many in public services now threatened with further privatization.    Moreover, in northern regions of Western Europe (and especially in Germany where governmental crisis management has kept unemployment surprisingly low, allowing a successful export-oriented growth model), many remain sympathetic to the argument that G20 leaders can resolve the crisis and return to “normalcy”.  Indeed many “protected” workers in unions are shielded from some of the worst effects of the crisis (i.e. partly as a result of Keynesian automatic stabilizers such as unemployment insurance), whereas insecurity is increasing for the vast majority of workers worldwide.

Nevertheless, the idea of an early return to “normalcy” would seem delusional in light of the global financial situation – and the fiscal situation of many countries – that continues to be far worse than political leaders dare admit.  Moreover the “normalcy” of the past few decades meant not only a deep crisis of social reproduction but also relentless environmental destruction, ever increasing and obscene levels of inequality, and not least, global economic stagnation with much of the world, e.g. Japan and Europe facing deflation; in Europe mass unemployment, especially for young people, is reminiscent in scale to the 1930s.[10]

The question of “normalcy” is therefore a global question.  We can expect global political conflict to begin to increase; the question is how to channel this for progressive ends.

In my view, therefore, the principal challenge for the progressive political forces and political economists in the coming decade is mobilizing forces and arguments – as well as policies and governance proposals – to create a new “common sense” that can address the global organic crisis.  In so doing diverse progressive forces will help to foster new forms of political agency, involving both men and women in the North and the South: what I have called a new, diverse, and creative post-modern Prince.[11]

Immediate challenges for progressive policies include continuing policy responses to the costs of gigantic bailouts, which, as noted, run into the many trillions of dollars.  As I observed in 2009, neo-liberal governments, assuming they are able to hold onto power, will continue to download the burden of payment on the backs of ordinary people in the form of wage cuts, reductions in social benefits and health expenditures, privatization of education, in an attempt to continue fiscal and social austerity – the very types of ongoing surplus extraction that have characterized Third World development for much of the past three decades.  Indeed, despite the recent recovery in stock market prices in many countries unemployment is still high and rising, particularly amongst the young (although it is very unevenly distributed across countries), world hunger is growing, and serious social dislocations have already emerged worldwide as a result of cuts in public provisions, health care, and wages.

In this conjuncture, some elements of the progressive lefts have begun to argue more systematically that economic emergency measures should and could have been targeted in ways that would have been less costly and more socially efficient, e.g. strengthening public goods for the social, health, and educational commons, and promoting democratic control over the commanding heights of the economy so that they are also made less risky and more stable – something partly reflected in recent regional initiatives.[12]  Concrete steps in that direction that many, including myself, have advocated, would be to systematically introduce and enforce much more progressive and fair taxation (e.g. particularly for the top 20% of wealthy people), enforce a major crackdown on tax evasion and the regulation of offshore centers (both of which would alleviate fiscal problems), and the promotion of tax regimes and pricing strategies designed to channel production towards more socially and ecologically useful ends.  A progressive strategy would also be international, involving strategies for global redistribution with a qualitative component (e.g. to provide the means to healthier food and improvements in medical care globally).

I would argue therefore that the central contradiction of global capitalism is not that between capital and democracy as such – the concentration of capital allows for socialization of the means of production, or at least their “commanding heights”, and thus a solution to this problem. The main contradiction we face is deeper and much broader and it is dramatized by a global struggle of power and resistance, and one that is not simply over the terms of fiscal austerity. It concerns the degree to which a continuation of neo-liberal globalization will intensify what feminists have called a crisis of social reproduction (Bakker and Gill 2003) and with it, a restructuring of our basic social institutions for health, care, welfare and livelihood – all issues that have fundamental implications for the question of democracy.

The wide-ranging and challenging nature of this global organic crisis may seem intractable.  However, when we consider the nature and future trajectory of world order and the forms of power and rule that go with it, we should remember that these are contested, transient and governed by violence as well as by forms of mutability that are not all progressive nor inevitable: we should remember Marx’s maxim that human beings make their own history but not necessarily under conditions of their own choosing.   This leads us to believe that the global organic crisis and its associated stalemate over basic conditions of existence and the future of the planet – cannot last indefinitely.

 

References

 Albritton, Robert. (2009) Let Them Eat Junk: How Capitalism Creates Hunger and Obesity, New York: Pluto.

Bakker, Isabella & Gill, Stephen, editors. (2003) Power, Production and Social Reproduction: Human In/security in the Global Political Economy. London: Macmillan Palgrave.

Gill, Stephen. (2008) Power and Resistance in the New World Order. London: Macmillan Palgrave.

Gill, Stephen, editor (2015) Critical Perspectives on the Crisis of Global Governance: Reimagining the Future. London: Macmillan Palgrave.

Gill, Stephen. & Cutler, A. Claire, editors. (2014) New Constitutionalism and World Order. Cambridge University Press.

Gill, Stephen. & Solty, Ingar. (2013) Crisis, Legitimacy and the Future of Europe: A Research Framework (In German). Das Argument No. 301: 82-94.

Gramsci, Antonio. (1971) Selections from the Prison Notebooks, New York: Progress.

International Labour Organisation (2015) World Social Protection Report 2014-15. http://www.ilo.org/wcmsp5/groups/public/—dgreports/—dcomm/documents/publication/wcms_245201.pdf.

[1] Retrieved from http://www.theguardian.com/business/2015/jan/19/global-wealth-oxfam-inequality-davos-economic-summit-switzerland.

[2] Also involved are diplomacy, covert intervention and the growth in the criminalisation of dissent. Geopolitical arrangements are often justified by the expediency of forms of law that are applied in arbitrary ways. Geopolitical practice is typically hypocritical (e.g. NATO backing for the most corrupt regime in Europe in Ukraine in order to countervail Russian power). Its practices are frequently antithetical to any concept of the rule of law that requires all people(s) be treated equally, fairly, with due process and impartiality.

[3] Financial Times, December 28, 2006, p. 13.

[4]  On this, see the critical essays on the crisis of global governance in Gill (2005).

[5]  The UN Population Fund has stated that the single biggest cause of global health inequalities – as well as the principal cause of death for women – is childbirth.

[6] Robert Peston, “Global Debts Rise $57 Trillion since Crash”.  BBC News Business, 4 February 2015.  These sums are based on a survey by McKinsey and Co. See:  http://bbctakeaway.herokuapp.com/news/business-31136707

[7] Joe Miller, “Eurozone stimulus reinforces inequality’, warns Soros”.  BBC News Business 22 January 2015. http://www.bbc.com/news/business-30943216

[8]  I thank Michele Benericetti for researching these numbers and for making the chart. The data is from: Oxfam, A cautionary tale.  Briefing Paper No.174 (2013), p. 7: See http://www.oxfam.org/sites/www.oxfam.org/files/bp174-cautionary-tale-austerity-inequality-europe-120913-en_1.pdf

[9] Robert Peston, “Why has the ECB punished Greece?”  BBC News Business 5 February 2015. See:  http://www.bbc.com/news/business-31148199

[10] This is despite rapid growth in countries such China and India, involving the intensification of consumerism.

[11] See Gill 2008. The concept invokes Machiavelli’s The Prince and Gramsci’s The Modern Prince.

[12] The financial crisis may be stimulating some decentralization of the financial architecture with many new initiatives, e.g., the Latin American Reserve Fund (FLAR), a regional reserve pooling arrangement with a capitalization of just over US$2.3 billion that largely lends to members’ central banks; and the BRICS’ (Brazil, Russia, India, China, South Africa) commitment to the creation of a new development bank with a capitalization of US$100 billion, to finance joint development ventures and bypass the World Bank and the IMF.  I thank Isabella Bakker for highlighting this point.

 

Who Elected the Bankers?

Who Elected the Bankers?

Capital and resistance in an era of transnational technocratic politics

What follows is an interview with Dr Iraklis Oikonomou on neo-liberal politics, capital and resistance in the context of the current sovereign debt and political crisis in Greece, Italy and Europe, also with reference to the role of the Trilateral Commission.

It was published in Iskra, 18 December 2011 (ed. and transl. in Greek by Iraklis Oikonomou). Iskra (www.iskra.gr) is one of Greece’s leading online platforms for radical political thought.  The Greek version can be found at:

http://www.iskra.gr/index.php?option=com_content&view=article&id=5908:gill-oikonomou&catid=54:anpolitiki&Itemid=284

Iraklis Oikonomou: Your seminal work American Hegemony and the Trilateral Commission remains one of the most significant contributions to a historical materialist theory of international relations. What were the main impulses that led you to engage with the Trilateral Commission as a field – or an object – of study?

Stephen Gill: It was not so much the Trilateral Commission that was my field of study – rather it was the nature of global power and its use in shaping world order. My study combined sociology, political theory, political economy and international relations and it invoked what C. Wright Mills called a “sociological perspective” on the world. My study built, at the global level on books such as The Power Elite, which focused on the USA. My work is a form of social theory that addresses how such national power structures relate to, shape and are shaped by global power relations. What I study is simply another way of addressing, in a contemporary context, the question of how human beings make history but do not necessarily do so under conditions of their own choosing. I was therefore specifically interested in identifying those conditions and the potentials for social transformation in a progressive way, inscribed by the nature of politics towards the end of the Cold War. I looked for a method to analyse it realistically. Thus my work uses a much more self-consciously historical materialist perspective than did Wright Mills, influenced by the thinking of Gramsci, Marx, Braudel and Polanyi. This approach allowed me to include questions of class consciousness and how transnational forces were reshaping global politics.

Studying the Trilateral Commission was in that sense, simply a means to an end – ruling class forces use many different institutional frameworks, some of them public and many of them private in seeking to influence global politics. What the study of the Trilateral Commission did reveal to me however was the way in which national power structures were interwoven in a very complex manner on a transnational basis, rooted in what was in effect a transatlantic ruling class which was extending its reach globally, and in the case of the Trilateral Commission in the 1970s and 1980s, incorporating Japan.

Why are the two EU member-states most threatened by the financial crisis (Greece and Italy) currently undergoing such a change in political leadership, from party politics to technocratic “bankers’ politics”?

Certainly it is true that both the new Prime Minister’s of Italy and Greece are bankers, both with links to private and central banking institutions, as well as, not least, to Goldman Sachs. Mario Monti held a position as a senior adviser at Goldman Sachs, and Loukas Papademos, the former vice president of the European Central Bank, was at the Central Bank of Greece when Goldman helped Greece to manage the transition into the Eurozone. We now know that Goldman – perhaps the world’s most powerful private bank – helped Greece to camouflage its true fiscal position prior to entering the Euro by means of complex financial derivatives. Both Monti and Papademos are part of a network of private and central bankers – the late political economist Susan Strange used to call them an ‘international freemasonry’ – bankers that know each other well and that have been intimately involved in, and often profited directly from, the neoliberal era of financialized capitalism. Incidentally the new President of the European Central Bank, Mario Draghi has also held significant positions at Goldman Sachs, as well as running the Italian Treasury and Italian Central Bank. It is also well known that Goldman typically provides the Treasury Secretary and other key financial officials in US administrations.

So in one sense you are partly correct that there has been a shift from party politics to bankers’ politics in the two countries. However, the more significant questions in my view are what kinds of bankers and what kind of policies that are being implemented in response to the crisis?

Nevertheless and for the record, as far as I understand it in Greece, three of the main political parties, including the far right (now in government for the first time since the right-wing military dictatorship) have provided members of the new 2011 Cabinet. The Greek left and Communist Party have refused to cooperate and are outside of the government. So therefore it is not a “national unity” government in the sense of the types of coalitions that responded to the crisis of the 1930s in many parts of Europe. However, we should remember that in the 1930s these governments also sought to do so by implementing the financial orthodoxy at the time, which involved sacrificing the interests of workers to the defence of the international gold standard – the equivalent of the defence of the Euro today.

On the other hand, in Italy, Mario Monti has managed to do something which the forces of the Italian left have been unable to do for years, which is to oust Berlusconi and his supporters (which included neo-fascists in his Cabinet). In their place Monti has put together a cabinet of so-called independents. I have not heard of all of them, but several have academic links (including to a university founded by the Italian Confederation of Industrialists), and like many so-called technocrats (such as Prime Minister Papademos) generally have training in neoliberal economics.  The new Italian Cabinet mainly reflects the interests of business, entrepreneurship and banking (both private banks and the World Bank) as well as including the Catholic Church, whose influence will be felt in the ministries of health and education.  The latter can be seen as acknowledging the role of the Church in criticising Berlusconi’s morality and behaviour as well as forging links between Christian Democracy and neo-liberal restructuring.

These individuals have been represented as independent technocrats with no ties to the main political forces in the country.

As a point of background to the above, it is worth underlining the fact that one of the key developments over the past 30 years is the so-called emergence of “independent central banks”, which are supposedly free of the influence of elected governments and popular-democratic political forces. However, in practice, as Monti and Papademos clearly reflect, private financial capital has very significant representation in the key matters of monetary and financial policy, whilst by statute, wider democratic accountability is largely locked out. This is one of the “technocratic” consequences of the Maastricht Agreements and of the Lisbon Accords, consequences that will be intensified if recent measures to strengthen the role of the European Community with respect to fiscal policy are accepted by the member states.  This will transfer sovereignty over fiscal policy to the European institutions to unelected figures and to institutions that are not accountable to the people.

What both the new Greek and Italian cabinets seem to have in common is their willingness to attempt to implement the orthodox neoliberal financial policies that have been agreed at the European level, and to a certain extent, with the International Monetary Fund (and therefore with its key members such as the United States, and key creditor countries such as Japan and increasingly China). What that means as the Greek people know all too well, is commitments on the part of the new government to implement austerity measures in the form of particularly savage public sector expenditure reductions, reductions in pension entitlements, privatisation, and regressive tax increases (and better tax collection). This is supposedly in exchange for a write-down of some of the debts (e.g. perhaps 50% of what is owed to Greek bondholders). This is so that Greece does not trigger off more significant pan-European problems when the solvency of many banks in various European countries is at issue, and might be caused by a complete default on Greece’s debts.

What does not seem to be on the table is the possibility of Greece leaving the Eurozone and resorting to its previous currency the drachma, engaging in depreciation in order to regain competitiveness and cushion the deep recession which the orthodox policies will undoubtedly intensify. In fact, all of the measures that have been proposed are framed by precisely the mindset which has governed most of the responses to the global debt crisis since 2008. Real alternative policies have never been debated actively, either at the national or indeed at the European level, such as the creation of a European Monetary Fund, that would force social and ecological as well as democratic criteria into the making of financial policies and bailouts, and onto crisis management mechanisms, in ways that would challenge the undemocratic rule of the international freemasonry of bankers, who see crisis as an opportunity to deepen neoliberal restructuring and to protect financial interests. One of the big questions is therefore just how far the strategy used for much of the past 30 years can continue to succeed since resistance is bound to intensify.

Is Monti’s and Papademos’ membership in the Trilateral Commission a sheer coincidence, or would you say that this is still an organisation with a strong political clout in the countries of developed capitalism?

When I did my research for my book on the Trilateral Commission, one of its initial principal funders, the Ford Foundation, noted in a report on its activities that the Commission served as an institution for grooming future leaders. So their membership is probably no coincidence since the political forces that they are connected to want to see particular solutions emerge from the respective crises that surround the sovereign debt of Italy and Greece in ways that protect the interests of capital. It is important to remember that the Trilateral Commission is a private organisation which is chartered as a charity in the United States. However in many respects it is a kind of transnational political party of dominant capitalist interests, and many of its members are drawn from the leading institutions in political and civil society in the various member nations. When it was formed it was very controversial and it gained a lot of publicity and criticisms from left and right of the political spectrum, as well as from nationalists, but it has continued to operate. If you look at its membership list (available on Wikipedia) you will see that many of the world’s most influential politicians have been members (e.g. US President Clinton, Vice-President Cheney), and it certainly continues to reflect a very powerful set of overlapping networks of influence. I would say that its influence is not necessarily direct in the sense of “political clout” on particular issues, more in terms of framing the strategic responses that are deemed to be politically permissible or possible for example in situations of crisis.

Its initial membership when it was founded in 1973 was drawn from the so-called “trilateral” countries – the US and Canada, members of the European Union (prior to its eastern enlargement) and Japan. This membership has now grown to include all of the major poles of accumulation in global capitalism. Of course it is also important to underline that the Trilateral Commission is not a democratic institution since its members are involved on a private basis and they are selected rather than elected on the basis of their wealth, political significance and institutional and cultural influence. Their considerations are particularly connected to the governance of national, regional and global economic activities and questions of geopolitics and security. More broadly they are fostering a particular kind of world order that is congenial to dominant corporate interests. Of course there are many disagreements and differences of view in the ranks of its membership, based upon the different sets of geographical, sectoral, and to a certain degree the liberal, conservative or social democratic political interests “of the centre” that they represent. Nevertheless there is a broad consensus in favour of policies that broadly speaking seek to sustain the “centrist” projects of a neoliberal world order, growth based on the free enterprise system, and not least, the forces of the world market as the principal shapers of governance in world society. What Susan Strange called the international freemasonry of the banking fraternity is therefore a subset of the above set of networks of power and influence.

Of the two individuals Mario Monti would seem to be clearly much more influential since he is the European Chairman of the Trilateral Commission, which means that he is one of the most significant politicians in Europe if not the world and that he is extremely well-connected with his counterparts in Europe and the Pacific. He also would have been the consensus selection of a majority of the European membership of the Trilateral Commission in order to become one of its three Regional Chairmen. Monti is also a regular participant at the annual and much more secretive and much more selective Bilderberg Meetings, so he is a member of the inner circle of the global ruling classes. The Bilderberg Meetings began in 1954 and were initially chaired by Prince Bernhardt of the Netherlands and they have been connected to the furtherance of the European project in the light of the Cold War and to the deepening of transatlantic relations as a means of sustaining Western dominance in world order under American leadership. The stance of Bilderberg was, of course, premised on consistent opposition to communism since its creation.

Lucas Papademos has been a member of the Trilateral Commission since 1998, so that has given him plenty of time to extend his networks and gain some influence in that particular forum. All of these forums – the most open and largest is the World Economic Forum in Davos, Switzerland – bring together selected leaders from corporations, the media, academia, culture and the world of celebrities from different countries – to seek to try to generate a consensus on common projects such as economic integration on a European, transatlantic an increasingly global scale, as well as to participate in a collective strategies for crisis management. Of course the national political leaders that are involved may or may not be able to translate such a strategic consensus directly into their own policies. However one of the features of the recent phase of neoliberalism is the very commonality of policies that have characterised responses to crises.

What national or transnational social forces are represented by the respective political figures? In other words, does the appointment of Monti and Papademos reflect a “trilateral” attempt to resolve the crisis of legitimacy, a European attempt, or simply a choice of the national bourgeoisies?

I think both of these two individuals reflect the dominant forms of financial capital which have profited most from the neoliberal restructuring of national and global economies since the Third World Debt Crises of the early 1980s. In that sense they are simultaneously operating at all three levels you note, although they need to have a base in the politics of their own countries to be able to do so. Again, in each of the debt and financial crises, including the so-called Asian financial crisis of the late 1990s, these dominant forces have used the crisis as an opportunity to deepen and extend neoliberal reforms, and to roll back the power of labour and the left. And throughout that period, the forces of the so-called Washington Consensus that represents the neoliberal orthodoxy have seen it implemented in Pinochet’s Chile, Yeltsin’s Russia, and throughout the Third World and Eastern Europe, involving so-called technocrats who have usually been trained in Anglo-American schools of macroeconomics and policy sciences at Ivy League or Oxbridge universities.

On the question of legitimacy, the strategy is to consistently deal with contestation over such political questions by separating the “economic” and the “political”, the “public” and “private” so that in neoliberal discourse key public institutions such as central banks are represented as non-political or beyond politics, and as only operating in the economic sphere. In practice of course these policies involve a combination of public and private power and have deep implications for questions of social justice, distribution and economic performance, all of which are deeply political questions.

More generally, how do you assess this trend towards the removal of the “political” in today’s times of crisis? Is this a sign of weakness on behalf of the bourgeoisie, denoting its lack of trust to mainstream political personnel, or is this a sign of strength, securing its interests more closely?

[As I noted in my previous post on Red October] “In responding to financial and debt crises since the 1980s, G8 political leaders have (a) frequently drawn on their unholy alliances with authoritarian and dictatorial forces, particularly in much of the Third World; (b) sought to maintain a condition of de-politicization and political apathy, and, where necessary (c) to channel and incorporate forms of resistance”. The removal of the political as you put it has been central to the ascendancy of neoliberalism – reflected in former UK Prime Minister Thatcher’s favourite expression There Is No Alternative (TINA) to the policies that she represented, in her quest to eradicate socialism; the wider discourse was Francis Fukuyama’s famous dictum that with the collapse of the Soviet Union we had reached the end of history, and the only viable politics in future would be a liberal politics.

It seemed until 2008, at least in Europe and North America, that this perspective had achieved dominance if not hegemony. This of course was much less the case in Latin America, where after several decades of austerity presided over by neoliberal technocrats, new forces began to create 21st Century Socialism, reflecting a much more general awakening of the left and progressive, broad-based forces combining indigenous people, the peasantry, industrial workers, intellectuals and people from all walks of life searching for a new politics. So you might say up until the 2008 global financial crisis that originated in Wall Street, as well as the continuing deepening of social and ecological crises, as well as crises of ethics – what I have been calling in recent work a global organic crisis – the removal of the political as you put it has been a sign of strength on the part of the bourgeoisie, and a sign of weakness on the part of the lefts.

In this situation, G8 leaders have continued to deny their responsibility for the crises and claim they have “expertise” to stabilize and promote economic growth and to master crises of accumulation – a claim now widely and increasingly challenged.  Indeed, while they have been preoccupied with saving capitalism, their policies tend to simply worsen the fundamental crises of welfare, livelihood and social reproduction that afflict a majority of the world’s population, e.g. global health, food, energy and ecological crises. What they are seeking to stabilize is unsustainable: a particular form and pattern of capitalist development, which I call a “market civilization”: an energy intensive, consumerist, individualist form of corporate-dominated development that is found in the USA, and to a lesser or greater extent, emulated throughout the world. Such practices have served to maintain the prerogatives of a global plutocracy of billionaires, whilst inequality deepens to levels last seen just before the Great Depression of the 1930s.

What opportunities do you envision for the development of counter-hegemonic forces, given the translation of the economic crisis into a political crisis? What is the way forward for these forces?

That is a key question, and of course the struggles in Greece are symptomatic of what is at issue. The details of those struggles are known very well to your readers so I will not elaborate on them here.

Nevertheless, in several parts of the world, the neoliberal governing formula of authoritarianism and/or controlled electoral democracy/de-politicization via technocracy is increasingly coming under popular, grassroots pressure. What is emerging in response is, of course, complex and uneven, and has to be read very carefully. Many communities in both north and south experience dispossession and intensified exploitation, whereas others are still relatively protected from such oppression: workers in many countries of Europe have been relatively cushioned from the effects of the crisis of accumulation, for example in Germany, Holland, the Nordic countries. Elsewhere in Europe and North America, on the one hand there is also a rise in right-wing populism and right-wing reaction, e.g. the Tea Party movement in the US; on the other hand, as many have noted, despite mass protests and riots in Greece and Spain, there has been little from the left in the largest capitalist economies – at least until recently.

However, if we think globally, since the later 1990s we can discern the outlines of a set of shared and progressive conceptions of the world, of forms of organized resistance and differentiated but inter-linked political potentials that are developing in the plural, albeit unevenly and, in a variety of contexts. These self actualising potentials are in very important ways, showing the world variety of paths forward, and in particular it should be underlined how they are reflected in a variety of radically democratic practices. They challenge the mantra that there is no alternative to neo-liberal capitalism, and in its place offer new conceptions of society. Indeed many of these forces show that throughout the world there are millions of progressive organic intellectuals, in the sense used by Gramsci, who are forging new projects and connecting them to changing the real material and political conditions of existence that people face in their everyday lives. Other developments which had been going on now for over a decade are reflected in umbrella organisations such as the World Social Forum, which may develop into a much more action-oriented political organisation of the lefts (in the plural).

Recently the so-called Arab spring of 2011 provided an inspiration and a catalyst for the Occupy Movements that have spread rapidly throughout the world, and perhaps significantly, awakened political forces in the United States on the left for the first time in a broad-based way since the 1960s.  Many people with little previous engagement in politics have begun to think and act politically. What is remarkable about these occupations and the challenge to the politics of neo-liberal capitalism that they represent, is that they have gained the support of the vast majority of people in every country where the occupations have occurred. It shows that today’s youth – and the population more generally – are not fooled by false promises and have developed a fairly radical political economy perspective on the world, appreciating its deep injustices and opposing the almost obscene levels of inequality that have developed.

I call these emergent forces a post-modern Prince (my concept builds on Machiavelli’s The Prince, and Gramsci’s The Modern Prince). The post-modern Prince should be understood as a broad, plural set of potentials and forces in formation and in movement, a process with no specific leadership structure or fixed organizational form. What it is important to emphasize however is how this process is producing innovations in thought and action which are directly linked to changing the actual practices of local, regional and global politics. Indeed the links between these forces are growing, and are connected to the globalization of new concepts of solidarity, democracy and social justice as well as ecological and economic sustainability.

A good example of grassroots organisations that form part of this process are the Landless Workers Movement (MST) in Brazil, which forms a part of the wider small farmer’s global political organization, Via Campesina. The motto of the latter is “small famers can feed the world and cool the planet”.  They champion a localized, agro-organic and smaller scale conception of farming and the fair distribution of food, and oppose the corporate dominance of agriculture and the world market for food, or “food from nowhere”. They condemn a world food order where the capitalist world market is the new arbiter of starvation for billions of people.

There are also new configurations of interstate power emerging such as the Bolivarian Alternative for the Americas (ALBA). Such configurations reject North American and Western imperialism and interventionism, as well as neoliberal capitalism in favour of new forms of “21st century socialism” based on regional solidarity and new concepts of military defence that are linked to egalitarian concepts of development.  ALBA reflects an effort to promote social justice, the recognition of the “rights of the rightless” (e.g. indigenous communities), a politics of human dignity and redistribution, and not least, the agro-ecological notions of food sovereignty associated with Via Campesina.

Can these movements combine effectively and lead to a restructuring of global power structures?  This is still an open question.  Nonetheless, what seems to be reflected in the Occupy and other movements is a collective effort to foster new forms of knowledge, modes of communication and culture that visually and conceptually contest the prevailing neo-liberal common sense that there is no alternative to the growth-oriented and ecologically myopic mentality of market civilization. This “common sense” is endlessly repeated and reinforced by the dominant organs of communication.  But is this common sense also “good sense”? This is the question that is posed by the Occupy (99%) Movements (comprising people of all ages, backgrounds, various religious persuasions, occupations and political aspirations) and their answer is a resounding ‘no!’

A final note on theory. In 1993, you edited the book Gramsci, Historical Materialism and International Relations, providing students of international relations with a valuable set of critical notions and frameworks. How would you assess the neo-Gramscian moment in IR theory? Has it fulfilled its promise?

When I first began to read and to publish in the field of international relations, it was (and still is) a very conservative field. At least in the West, it was dominated by frameworks of thought that were consciously constructed to advise and consolidate constituted or established power as well as to exclude or to marginalise Marxism and other strands of critical thinking. So one of the aims of that edited work – building on an earlier book which I wrote with David Law called The Global Political Economy: Perspectives, Problems and Policies – was pedagogical. I believed that the pedagogy of international relations necessarily had to include the full range of theoretical perspectives, and an adequate consideration of their strengths and weaknesses. To simply marginalize an entire body of thinking seemed to me to be an unethical denial of the ability of human beings to learn from and differentiate between various forms of argumentation and theory.

Has it fulfilled its promise? I think the only way to consider this question is as a part of wider currents of change and political potentials. I think it is fair to say that the neo-Gramscian approach has been influential, and along with other critical perspectives, it has widened the theoretical scope and the explanatory depth of the field of international relations very considerably. However, in a sense, a critical perspective on the world only fulfils its promises if it is able to not only demystify and critique the actual exercise of power and set of social relations, but also to imagine new ways of thinking about the world and to connect to them organically to change the common sense of a particular period, and further the arguments that can promote a new kind of society and civilisation.  More fundamentally, in so far as neo-Gramscian ideas are connected to the emergence of a post modern Prince, and new imaginaries concerning society, politics and ethics, or a new common sense about the world and its re-making, then it is in the process of developing important ways to fulfil some of its promise. If and when these changes begin to really affect and to change the extreme injustices and obscene inequalities of our world, and to help challenge the unsustainability of the present frameworks of world order, then, and only then, can we consider that it actually has fulfilled some of its promise.

 

In Praise of Red October

In Praise of Red October

The political leaders of the largest economies (the G8) rule principally to preserve and extend the growth of capitalist ‘market civilization’: an energy intensive, consumerist, individualist form of corporate-dominated development that is found in the USA, and to a lesser or greater extent, emulated throughout the world. This form of development has produced deepening inequality and an unsustainable assault on the ecology of the planet. Such dominant practices of global politics have served to maintain the prerogatives of a global plutocracy, whilst inequality deepens to levels last seen during the Great Depression of the 1930s.

In this situation, G8 leaders claim they have ‘expertise’ to stabilize and promote economic growth and to master crises – a claim now widely challenged.  Indeed, while they have been preoccupied with saving capitalism, their policies simply worsen the fundamental crises of welfare, livelihood and social reproduction that afflict a majority of the world’s population, e.g. global health, food, energy and ecological crises.

Also, we might note that in responding to crises, G8 political leaders have (a) frequently drawn on their unholy alliances with authoritarian and dictatorial forces, particularly in much of the Third World; (b) sought to maintain a condition of de-politicization and political apathy, and, where necessary (c) to channel and incorporate forms of resistance.

In sum, the strategy of dominant forces has been to contain fundamental political contestation on the nature and purposes of rule, allowing them to continue to promote the market civilization model or ‘really existing capitalism’. This strategy has worsened what I call a global organic crisis, indeed, we may be at a turning point in the destiny of humankind and the planet.

However, in several parts of the world, this neoliberal governing formula of authoritarianism and/or controlled electoral democracy/de-politicization is increasingly coming under popular, grassroots pressure.

What is emerging in response is complex and uneven. Many communities in both north and south experience dispossession and intensified exploitation, others are still relatively protected from such oppression. On the one hand there is a rise in right-wing populism and right-wing reaction, e.g. the Tea Party movement in the US; on the other hand, many have noted that there has been little from the left in the largest capitalist economies – at least until recently.

If we think more globally, however, I think we can discern the outlines of what I have called a ‘post modern Prince’ – a set of progressive conceptions of the world, organized resistance and differentiated political potentials that are developing in the plural, albeit unevenly and, in a variety of contexts.   These self actualising potentials are reflected in a variety of radically democratic practices, interpret dominant power as supremacy or as ‘dominance without hegemony’ and they challenge the mantra that there is no alternative to neo-liberal capitalism.  We can identify the post-modern Prince as a set of potentials and forces in movement and in formation, with no fixed organizational structure as such.  What it is important to emphasize is how this process is producing innovations in thought and action which are directly linked to the actual practices of local, regional and global politics.

A good example is grassroots organisations such as the Landless Workers Movement (MST) in Brazil, which forms part of the small farmer’s world political organization Via Campesina, whose motto is ‘small famers can feed the world and cool the planet’.  The champion a localized, agro-organic and small scale conception of  farming and the distribution of food, and it opposes the corporate dominance of agriculture and the world market for food, or ‘food from nowhere’, in a world where over a billion people are starving and where global food prices have massively increased over the past decade, making the world market the new arbiter of starvation for billions of people.

There are also new configurations of interstate power emerging such as the Bolivarian Alternative for the Americas (ALBA). Such configurations reject North American and Western imperialism and interventionism, as well as neoliberal capitalism in favour of new forms of ‘21st century socialism’ based on regional solidarity and new concepts of military defence that are linked to egalitarian concepts of development.  ALBA reflects an effort to promote social justice, the recognition of the ‘rights of the rightless’ (e.g. indigenous communities), a politics of human dignity and redistribution, and not least, the agro-ecological notions of food sovereignty associated with Via Campesina.

In short, new forms of political and civil society are emerging in Latin America; and indeed, such developments are increasingly institutionalized in government. Can this be emulated elsewhere? The ‘Arab Spring’ of 2011 involved the relatively spontaneous emergence of democratic communities of resistance to authoritarianism, dictatorship and the intensification of capitalist disciplines and inequalities.  Relatively spontaneous but nonetheless organized resistance to such forces is also growing quickly across Europe and, for the first time since the 1960s, across the United States, with the recent and apparently spontaneous occupations of key urban spaces of capital that began with Occupy Wall Street (OWS). The occupations and demonstrations are now spreading throughout the US and Canada, and indeed to many other parts of the world.  OWS protagonists take inspiration from the Tunisian and Egyptian uprisings and claim that they reflect the 99% of the American population which is being oppressed by the 1% that constitutes the ruling class and plutocracy.  Similar claims have been expounded in many other locations as the groundswell of protest and occupation intensified during October 2011, in ways that have captured the attention of the world.

Can these movements lead to a restructuring of global power structures?  This is still an open question.  Nonetheless, what seems to be reflected in the Red October occupations is a collective rather than an individual effort to foster new forms of knowledge, modes of communication and culture that visually and conceptually contest the prevailing neo-liberal common sense that there is no alternative to the growth-oriented and ecologically myopic mentality of market civilization. This ‘common sense’ is endlessly repeated and reinforced by the dominant organs of communication.  But is this common sense also ‘good sense’?  This is the question that is posed by the Occupy (99%) movements (comprising people of all ages, backgrounds, various religious persuasions, occupations and political aspirations) and their answer is a resounding ‘no!’

Indeed, in so far as such critiques of neo-liberal common sense are part of a collective and democratic process involving broad social forces on a mass basis, it constitutes an event  of great  philosophical and political significance:

For a mass of people to … think coherently and in the same coherent fashion about the real present world is a ‘philosophical’ event far more important and ‘original’ than the discovery is by some philosophical ‘genius’ of a truth which means that remains the property of a small group (Antonio Gramsci, Prison Notebooks, my emphasis).

This may be a clue to the significance of Red October.

For images of the Occupy encampments and protests throughout the world see:

http://www.guardian.co.uk/world/gallery/2011/oct/15/occupy-wall-street-movement-global#/?picture=380791860&index=40

So what are the achievements of Occupy and the movements of Red October?  First, Occupy is breaking the shackles of a political common sense restricted by ‘horizons of necessity’: the minimalist notion that the future must necessarily be more or less like the past, that there is no alternative to rule of the 99% by the 1%. Second, Occupy reflects the formation of new ‘horizons of desire’, in the plural, its forces are collectively imagining desirable and possible futures; rendering necessary what had previously thought to be politically impossible.*

* On these horizons see Richard Falk, ‘Horizons of Desire.’  Opening address to conference: The Future of Global Governance? York University, Toronto, 25 May 2011. The lecture can be viewed on: http://www.yorku.ca/lefutur/.

The Politics of the New Austerity

The strategies adopted to bail out Wall Street, the City of London, and banks in Frankfurt, Paris and other capitals have resulted in very high levels of public debt for a number of countries.  The costs of the planned austerity measures to pay for the bailouts in Greece, Ireland, the UK and France for example, will fall disproportionately on the backs of the poor. In the UK, the Conservative-Liberal coalition government has announced the elimination of about 500,000 public sector jobs involving deep cuts to education, welfare and policing budgets to pay for the huge bailouts of City of London firms. These job losses will also affect women the most (about 350,000 of the jobs scheduled to be terminated).

This explains why political struggles over the new austerity are intensifying, e.g. in France as of October 2010. The struggles point to questions that have been largely missing from the way that conservative and social democratic governments have defined their responses to issues of public finance. These questions include: (a) what could have been the alternative uses of these gigantic sums of public money? (b) Who will pay for these debts?

The answer given to question (b) by the International Monetary Fund, and most G20 governments is, “the people.”  The IMF has said that it will take 10 to 20 years of austerity measures, involving cuts in public sector wages, jobs and public services, raising the retirement age, and increased privatization of public assets to pay back not only the large government debts incurred in bailing out the banks but also to pay for “future” bailouts. As the Director-General of the International Labour Organisation noted in 2009, the bailout strategies involve “billions for the banks and pennies for the people”. Now the people are being made to pay for the bailouts with the new austerity measures.

The new austerity is something that has feature of the economies of the global South for much longer, at least 30 years  — in many parts of the world the austerity is not all that “new”.  More to the point, the debt crisis is therefore becoming more “global” in the sense that it is experienced in both North and South, and it operates not only at the level of the sovereign debt of countries such as Greece but also at the level of firms and workers.

In some parts of the global South – for example in Latin America – austerity has not prevented the emergence of progressive alternatives – what has come to be called “21st century Socialism”.  However – up until recently – in much of the global North, in the absence of significant political pressures, governments have simply responded to the crisis in favour of the interests of financial capitalism – or what I call “financial orthodoxy”.

For example, in its response to the Greek debt crisis in May 2010 the European Union formed a kind of European version of the IMF, with new bailout funds of €1 trillion in an attempt to “stabilize the financial markets”.  However, hardly debated at the time was how much of the debt of countries such as Greece is owed to private banks in Germany, France and the United States, so the Greek bailout was as much a bailout of these banks as it was for the government of Greece. In response Greece has made draconian cuts in social benefits and pensions that reverse approximately 30 years of workers’ gains. Of course the Greek fiscal crisis has also been caused by poor tax collection (allowing wealthy people and middle-class professionals to evade paying taxes) as well as by previous governments manipulating statistics and using financial innovations with the help of big private banks such as Goldman Sachs in order to camouflage the true condition of government finances.

The key point however is there has been little or no public debate upon the alternative ways in which such resources could be used. A very different kind of (and indeed a much larger) European Monetary Fund should be created, linked to more socially sustainable economic development, and geared to improve education, health and the environment. This would produce a greener and more socially just form of economic growth that would in turn improve the public finances of European governments – provided that tax collection was improved and made more equitable. This fund in turn should be much more democratically governed than the present “independent” European Central Bank, which is responsive mainly to private financial interests.

What we have learned during the present crisis in Europe is that banking is much too important to be left to either to mainstream politicians or the bankers themselves. Indeed there are many gifted, critical and more democratic economists who could be recruited to help build such an institution and run it effectively.

I raised some of these issues in a 20-minute presentation at the public event, Critical Perspectives on Global Governance, University of Helsinki, 7 May 2010; the talk was called The Greek Tragedy and the Global Debt Crisis.

This talk explains aspects of the Greek financial bailout of May 2010. It argues that we should not witness events such as those in Greece in response to austerity measures, as if we are simply the passive audience of a drama, a “Greek tragedy” as it were.  Progressive forces should press for socially just responses to the crisis and for more democratically accountable institutions of economic governance.

For the video see http://uni-utopia.net/

As a footnote, viewers of the video will note how at one point a videographer in the audience interrupts me; in case it is not clear from the narrative, what I was referring to was the way that a computer error transposed an automated market “sell” trade of $16 million dollars in shareholdings as $16 billion.  This massive sell-off of stocks immediately caused the market value of many shares on the New York Stock Exchange to drop as if the companies were going bankrupt.  The example highlights the way that the turnover time of financial capital is accelerated by computerization and 24/7 trading strategies.

Audio podcasts of all the presentations at the Critical Perspectives on Global Governance, were posted on: http://www-hotel1.it.helsinki.fi/~optek/podcast/ (Posted May 2010).