crisis

Crisis in the Carolinas: The Lowcountry and Climate

By Erica Veal and Karl Malone


Republished from Hood Communist.


Africans are largely left out of conversations about environmentalism, despite the fact that we suffer from the triple threat of climatic, environmental and human rights crises. Our communities bear the brunt of the climate catastrophe, and this is especially true in the South Carolina Lowcountry where sea level rise threatens to wash away our Gullah Geechee homelands. Our relationship to environmental racism stretches back to the emergence of the local phosphate mining industry in the 1860’s and manifests today in the disproportionate exposure of Black and low income residents to environmental hazards. Today, Gullah Geechee communities disproportionately neighbor hazardous waste sites like landfills, sewage plants, incinerators and manufacturing facilities. Add to this gaping racial disparities rooted in the region’s history of chattel slavery, and it becomes clear why Black people should be the vanguard of the environmental movement.


Cooperation Jackson and the Black Environmentalist Movement

When people think about environmentalists, stereotypes about white, tree-hugging hippies come to mind. For Black environmentalist Kali Akuno, co-founder and co-director of Cooperation Jackson in Jackson, Mississippi, it is important for Black people to challenge these stereotypes by taking charge of the environmental movement. As someone who has closely followed the climate crisis, he calls attention to the fact that by 2050 the large portions of the Black Belt will be underwater if the predictions of environmental scientists are accurate. The Black Belt refers to the crescent shaped strip of fertile land in the Southeastern United States which has historically been home to an almost unbroken chain of majority (or near majority) Black counties stretching from Virginia to East Texas. It is the historic homeland of Africans trafficked to North America to build the wealth of this nation during the Trans Atlantic Slave Trade and where the majority of their descendants still live today. According to Akuno, the land millions of Africans in North America currently occupy is some of the most vulnerable to climate change and, as such, Black people are most likely to be displaced as a result of climate change induced natural disasters. The rising costs of housing means finding new homelands for ourselves may prove an insurmountable task, which is why our stake in the environmental movement is so high.

Sitting less than 20 feet above sea level, Charleston, South Carolina is extremely vulnerable to sea level rise. For Gullah Geechee residents, the constant flooding, brought about by regular storms and unusually high tides, exacerbate the racial disparities we face. Flooding causes transportation delays and can mean missing work. It also causes property damage for residents whose homes flood constantly, as is the case for several public housing projects across the Charleston peninsula. Wading through flood waters can mean exposure to raw sewage, which can lead to adverse medical outcomes, medical expenses and the list goes on. For Black residents on fixed incomes, many of whom live below the poverty line, flooding is a constant nuisance and it’s only getting worse.

In the few weeks of lockdown we experienced during the early days of the COVID-19 pandemic we saw how quickly the environment regenerated albeit temporarily. Industrial emissions dropped, the air became cleaner, as did waterways, migratory patterns of wildlife improved, and the list goes on. We saw that change is possible, but we live in a capitalist system that puts profits before people and the planet. We cannot afford to be silent and sit idly by while billionaires and private corporations continue to pollute our world and the people living on it to enrich themselves. Akuno says we’ve already surpassed the worst case scenario according to many climate models. Therefore to “curb ecological destruction,” Black people have a compound responsibility to organize against the systems that oppress us and take climate change seriously.


Learning from Cuba’s Fight Against Climate Change

We don’t have to reinvent the wheel in our effort to fight the climate crisis. We can learn from places like Cuba, a majority African, island nation in the Caribbean, that is largely the most sustainable country in the world. Cuba has embraced environmentalism like no nation has. It is the only country to meet the World Wildlife Fund’s definition of sustainable development. Its government has implemented policies to reduce the waste of natural resources and minimize its carbon footprint in the form of a successful 100 year plan to combat climate change called Tarea Vida (Life Task). Tarea Vida includes a ban on new home construction in potential flood zones, the introduction of heat-tolerant crops to cushion food supplies from droughts, and the restoration of Cuba’s sandy beaches to help protect the country against coastal erosion. Cuba is a leader in the environmental movement and all while struggling under an unjust and deadly 60+ year economic blockade imposed by the United States government.

Cuba underwent a successful, largely Black-led socialist revolution in the 1950’s, freed itself from the imperialist exploitation of the United States and naturalized its resources. In addition to leading the environmental movement, Cuba leads in medicine (sending doctors all over the world), has eradicated illiteracy, subsidized housing and food, has universal education from pre-K to PhD and is a shining example of what the world could be if we put people before profits. Although socialism in Cuba poses no threat to the United States, the government has kept the blockade in place and caused shortages in food, medicine, gas and other essential items at the expense of the Cuban people. Most recently, under the Trump administration, Cuba was added to the State Sponsors of Terrorism (SSOT) list, further exacerbating shortages on the island.

In the face of all this, there are many parallels around the climate crisis between Cuba and Gullah Geechee communities in the South Carolina Lowcountry, e.g. soil erosion and sea level rise are clear. Additionally, when considering the racial disparities faced by Gullah Geechee people (and the entire Black Belt region), it is as if we, too, are living under a form of economic blockade. Africans in North America are more likely to face food and housing insecurities and less likely to have access to quality schools, day care, health services, and a living wage. We are more likely to be exposed to environmental hazards that expose us to adverse health outcomes and all of this is a direct result of the choices made by our bought and paid for government officials, both democrats and republicans alike. Yet, Cuba, the socialist capital of the western world, has shown us things do not have to be this way. For these reasons and more we should actively organize against the US economic blockade and the removal of Cuba from the SSOT list. The future of Gullah Geechee communities may literally depend on our ability to learn from Cuba’s people centered policies and innovations in environmental science.


Environmental Racism in North Charleston

The socio-economic state of the Gullah Geechee people is daunting and stretches back to the era of slavery. Africans in North America were never meant to be anything more than a source of cheap labor for Europeans to exploit. We were kidnapped, enslaved and trafficked here for our knowledge of rice agriculture and we transformed the landscape of the Southeast Atlantic coast from a vast expanse of Bottomland Hardwood Forests to a seemingly never ending complex of rice fields working in some of the harshest conditions as chattel slaves. As a result, Charleston became the richest city in colonial America and with the the largest slave port on the continent.

After the Civil War ended in 1865, phosphate mining became the most successful form of industry in the Lowcountry, replacing the major agricultural and textiles industries that could no longer be sustained due to the loss of the free labor of enslaved Africans. Since calcium phosphate was discovered in the beds of the Ashley River, it provided former the enslavers who owned this land an opportunity to “recoup some of their financial losses after the Civil War” by either selling their land, leasing it out to mining companies that began forming everywhere, or establishing mining companies of their own. The increasing demand for labor was quickly filled by newly “freed” Gullah Geechee people, who dominated this industry due to their being locally available and accustomed to working in the sub tropical Lowcountry climate.

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Though the rise and fall of the phosphate industry in South Carolina lasted roughly 20 years, the long term damage to the environment is still being felt today. This period marked the beginning of a long history of environmental racism in the Gullah Geechee community. Studies show that “exposure to these harmful conditions results in negative health outcomes, stressed communities, and reduction in quality of life and neighborhood sustainability.” The Environmental Protection Agency has identified many of these old mining and processing locations as hazardous waste sites. One such waterfront site in North Charleston, could potentially be developed into another heavy industrial boat manufacturing facility, but Black residents are actively fighting against this.

In 2015, the Charleston County Park and Recreation Commission (CCPRC) acquired the former Baker Hospital site off Azalea Drive in North Charleston with the intention of developing the 57 acre property into a waterfront park. It has since leased 11 acres to a local company called Sea Fox Boats. According to an online petition circulated in March 2024, although “The City of North Charleston has zoning in place that will keep industrial uses off of the park property,” CCPRC applied to change the zoning to either heavy or light industrial to accommodate their new lease agreement. CCPRC claims profits from the tenant will fund the environmental cleanup and development of the remaining 46 acres park site while representatives for Sea Fox claim the manufacturing plant will bring jobs to the community. Black residents like KJ Kearney, from communities surrounding the proposed park site, are pushing back on this saying they already have jobs and this segment of North Charleston has one of the lowest unemployment rates in the area. Others have said they don’t need or want heavy industry in their communities, particularly on a site that is already contaminated because of decades of industrial use. Jobs won’t matter if residents are sick from exposure to contaminants and they don’t want jobs that will lead to the death and destruction of the environment.

While North Charleston’s city planning commission voted to deny CCPRC’s recommendation to rezone the site in March, the ultimate decision is up to city council. On Thursday, April 18th, 2024, Black residents again voiced their concerns at a public meeting saying they felt left out of the decision making process. Yes, residents want a waterfront park in that area of North Charleston, but not at the expense of exacerbating environmental conditions and hazards. The controversy surrounding the Baker Hospital site is an example of environmental racism at its best. While proponents of Sea Fox push the narrative of job creation, Kearney says, “the community is not against jobs” rather they are against the idea that “the only value historically Black communities have to their city is as a labor force.” He went on to talk about how the plant will produce tons of hazardous air pollutants and that, for a community which ranks” in the 95 percentile for asthma,” that is a risk they cannot afford to take. He suggested that the paternalistic framing of the situation by Sea Fox supporters is clear– Black people should be grateful for the opportunity to work for a rich white man who wants to invest in their communities and simply ignore the impact of the plant on their quality of life. After a long and heated meeting, the council voted to postpone making a decision on the rezoning for another 60 days so the council can gather more information, but the people who live in this area have made their position clear.

While the city council in North Charleston is mostly Black and so is the new mayor, that is not enough to ensure the will of the people is carried out. The masses of Africans in the Lowcountry must continue to actively organize against this type of blatant environmental injustice to mitigate damage to our communities and the environment. We already suffer tremendously under the crushing weight of capitalism and its partners in crime (racism, white supremacy, sexism, gender bias, etc.), but this isn’t just about us. We know the success of our liberation struggles benefit all oppressed people. If we don’t act, the climate crisis will be the death knell that marks the permanent destruction of our communities. None of us will be free until all of us are free, but what use is freedom on a dead planet?



The authors represent the Lowcountry Action Committee, a Black led grassroots organization dedicated to Black liberation through service, political education, and collective action in the Lowcountry.



Sources

  1. Jackson Rising: The Struggle for Economic Democracy and Black Self-Determination in Jackson, Mississippi, edited by Kali Akuno and Ajamu Nangwaya

  2. “Is Pollution Poisoning Charleston’s African American and Low Income Communities?” https://charlestoncitypaper.com/2016/03/09/is-pollution-poisoning-charlestons-african-american-and-low-income-communities/

  3. “Free the Land w/ Kali Akuno” Hood Communist Radio https://open.spotify.com/episode/789OXvt1LdjEJ5e8pFCMUp

  4. The Black Belt Thesis: A Reader by the Black Belt Thesis Study Group

  5. “Flooding Intensifies Charleston Region’s Racial and Wealth Inequalities” https://pulitzercenter.org/stories/flooding-intensifies-charleston-regions-racial-and-wealth-inequities

  6. Could Covid lockdown have helped save the planet? https://amp.theguardian.com/world/2020/dec/29/could-covid-lockdown-have-helped-save-the-planet

  7. Cuba’s Life Task: Combatting Climate Change documentary by Helen Yaffe https://www.youtube.com/watch?v=APN6N45Q6iU

  8. “Consequences of a Blockade of Cuba” 23 April 1962 Central Intelligence Agency https://www.cia.gov/readingroom/docs/CIA-RDP79R00904A000800020016-7.pdf

  9. “The State of Racial Disparities in Charleston County, South Carolina, 2000–2015” https://avery.charleston.edu/wp-content/uploads/2017/01/The-State-of-Racial-Disparities-in-Charleston-County-SC-Rev.-11-14.pdf

  10. History of the Corridor: Industry https://ashleyriverhistoriccorridor.org/history/industry/#:~:text=In%201883%20over%203%2C000%20African,well%20as%20state%20convict%20labor

  11. History of the Corridor: Bulow/Long Savannah https://ashleyriverhistoriccorridor.org/sites/long-savannahbulow-plantation/

  12. “A History of the Phosphate Mining Industry in the South Carolina Lowcountry” http://nationalregister.sc.gov/SurveyReports/hyphosphatesindustryLowcountry2SM.pdf

  13. “Baker Hospital site to become a new county park” https://www.postandcourier.com/archives/baker-hospital-site-to-become-a-new-county-park/article_0630e058-999d-5de4-9319-5addea566537.html

  14. “Public input process to start this winter for Charleston County Parks’ North Charleston Ashley River Site” https://www.ccprc.com/ArchiveCenter/ViewFile/Item/1423

  15. “Preserve the Former Baker Hospital as a Park” https://www.change.org/p/preserve-the-former-baker-hospital-site-as-a-park?original_footer_petition_id=35513102&algorithm=promoted&source_location=petition_footer&grid_position=15&pt=AVBldGl0aW9uAEWcQgIAAAAAZe1wynNJJ%2BAxMzdmNTMxMQ%3D%3D

  16. “N. Charleston argues plans for former Baker Hospital site, fate in council hands” https://www.live5news.com/2024/03/12/n-charleston-argues-plans-former-baker-hospital-site-fate-council-hands/

  17. “Delay in North Charleston zoning decision fuels frustration over old Baker Hospital site” https://abcnews4.com/news/local/delay-in-north-charleston-zoning-decision-fuels-frustration-over-old-baker-hospital-site-south-carolina-wciv-news-4

Palestinian Resistance and the Crisis of Liberal Humanism

By Yanis Iqbal

Operation Al-Aqsa Flood, launched by Hamas on October 7, 2023, was a huge blow to the settler-colonial state of Israel: Al-Qassam Brigades captured 20 settlements and 11 military sites in merely a few hours. The attacks on Israeli civilian and military outposts destroyed the narcissistic sense of security associated with the carefully orchestrated narratives of Zionist dominance, surveillance and intelligence. In the words of Saree Makdisi, the breakout “smashed, hopefully once and for all, the very idea that the Palestinians can just be ignored, talked to, or talked about rather than talking for and representing themselves, their interests and their rights.” Earlier, it was Palestinians who had to explain their presence and prove their humanity. Now, it is they are setting the contours of the narrative. That’s why Zionists are terrified.

Unqualified solidarity with the anti-colonial violence of the Palestinian resistance has been hindered by liberal humanism, a bourgeois ideology that uses abstract slogans of peace to accelerate the genocide of Palestinians. There are two components in this ideology. First, the supreme value of human life is proclaimed as an unproblematic moral statement, which everyone has to support. While liberal humanists may admit that the Israeli occupation has given rise to Palestinian violence, they remain adamant that the death of individuals can never be justified. Judith Butler, for instance, criticizes those who blame Zionist apartheid for contemporary violence, saying that “nothing should exonerate Hamas from responsibility for the hideous killings they have perpetrated”.

In the above conception, violence is conceived as an infringement of the individual human body, whose sanctity is guaranteed by an unquestionable morality. The physiological and juridical body is innately exposed to physical, psychological and moral persecution. This kind of body has no positive project; it is entirely defined by its vulnerability to attacks, which requires protection. Christopher Caudwell traces this ethical ideology to the systemic logic of the capitalist economy. In the struggle against feudal fetters, the bourgeoisie saw freedom as the abolition of social organization, as the ability of every individual to pursue his own affairs and interests. This is articulated “in the absolute character of bourgeois property together with its complete alienability.”

On the ideological terrain, this gives rise to the “bourgeois dream – freedom as the absolute elimination of social relations,” by which is meant the absence of any restraint on the ownership, acquisition and alienation of private property. Here, private property isn’t considered as a social restraint that should be abolished, as the bourgeois project is inevitably bound to its particularistic interests. When assembled into ethics, the bourgeois dream translates into ultra-individualist pacifism, wherein the purity of the soul has to be guarded from the “heinous guilt” of the “sin” that is violence. Caudwell calls this “spiritual laissez-faire,” which uses the commercial mentality of capitalists – its concern with economic status – to proclaim the right of remaining preoccupied with one’s own soul.

When liberal humanists talk about mushy-mushy sentiments of individual human life, it is crucial to ask whether such an abstraction even exists in the horrors of Israeli barbarism. On one side, we have settlers, whose material security is guaranteed by an authoritarian state apparatus. On the other side, we have natives, whose wretchedness is maintained through incessant violence. In this scenario, I ask you: where is the pristine divinity that you label as “human life”? I can only see the all-too onerous divides constructed by Zionist settler-colonialism. Preaching a higher moral reconciliation beyond these divides, trying to organize a peaceful dialogue between two completely antagonistic camps, is a pathetic attempt that is bound to fail. In the open-air concentration camp that is Gaza, it is criminal to think that there is an ever-present and ready-at-hand reserve of morality that can calm the clamor of reality. We have to dive into reality, into its thundering materiality, if we want to shoulder the global responsibility of solidarity that has been forced upon us by the Palestinian resistance.

When an interviewer told Ghassan Kanafani that it would be better for the Popular Front for the Liberation of Palestine (PFLP) “to stop the war to stop the death,” Kanafani said, “Maybe to you, not to us. To us, to liberate our country, to have dignity, to have respect, to have our mere human rights; these are something as essential as life itself.” By absolutizing life, liberal humanists ignore how such a life doesn’t exist in a settler-colonial society. The boundary between life and death is not clear-cut. Huey P. Newton said, “I tell the comrades you can only die once, so do not die a thousand times worrying about it.” Liberal humanists ignore how death already walks among the Palestinians. This allows them to construe life as a personal capacity, as a possibility, that can be realized through a dialogue between the colonizer and the colonized. For the colonized, life is never a possibility. Colonialism is the violent closure of possibilities for the colonized. In the words of Mehdi Amel: “It…became impossible to define the structure of the colonized countries’ specific trajectories of becoming except within the colonial relation. What was possible before this relation became impossible after. This is what is novel in the structure of these countries’ history.”

Kanafani dispels the naive hope of humanistic possibility in the colonial context, starkly portraying the inhuman impossibility of peace talks between Israel and Palestine as “a conversation between the sword and the neck”. There is no mention here of the personal, biographical details of an abstract human life; they are replaced by impersonal metaphors. Why so? Because the liberal focus on human life conveys an ambience of integrity and security in a situation that is marked by disorder and destruction. By preserving the edifice of individual, non-violent agency, liberal humanism says that violence is optional, it is a matter of condonation or denunciation. Kanafani explodes this pious optimism by depicting Zionism as a structurally violent tool that is indifferent to our subjective feelings. Between the sword and the neck, there lies no other possibility than death.

The elision of the historical depth of Zionist violence is a core component of liberal humanism. Slavoj Žižek denounced the “barbarism” of Hamas by writing that the choice is not between Palestinian anti-colonial violence and Zionist settler-colonial violence but “between fundamentalists and all those who still believe in the possibility of peaceful coexistence”. The ruse of humanist possibility allows him to frame violence as a simplistic choice, whereas the toothless policy of dialogue comes off as the superior, more complex option. According to Joseph Stalin: “the Communists regard the substitution of one social system for another, not simply as a spontaneous and peaceful process, but as a complicated, long and violent process.” Here, the order of valuation is reversed. It is violence which is accorded the dignity of historical complexity. It is liberal humanism which is faulted for uncritically regarding the peacefulness of human life as an immediate, incontrovertible fact.

Reading Žižek, one is reminded of people whom Vladimir Lenin called the “spineless hangers-on of the bourgeoisie with intellectualist pretensions”. These “tyrannized, shocked and scared” intellectuals “have been flung into consternation at the sight of this unprecedentedly acute class struggle, have burst into tears, forgotten all their premises and demand that we perform the impossible, that we socialists achieve complete victory without fighting against the exploiters and without suppressing their resistance.” Decolonization is imagined as a peaceful project that can be “introduced” into the settler-colonial society. Liberal humanists forget how decolonization is forged in the intensity of national liberation, in “the struggles, the exploiters’ gnashing of teeth, or their diverse attempts to preserve the old order, or smuggle it back through the window”. What accounts for this ignorance? It can be traced to the liberal humanist delusion that a higher unity might emerge from the Zionist machine, that there is an element that might immediately unify the colonial compartments, that there is a humanist sensibility that lies hidden beneath colonialism. There is no such sensibility. Colonial violence has to be broken.

Instead of framing resistance in terms of the individual metric of human life, we have to take recourse to discourses that stress the concrete realities of colonized society. By inflating human life into a mythical capacity, liberal humanism paradoxically reveals a fundamental disregard for the human realities present in concrete societies. In order to avoid this extra-human concept, we must begin from the anti-colonial struggle. Liberal humanists begin with spiritual wishes for peace, attempting to convince people of an ideal method of resistance that will involve the least amount of death and suffering. Marxism doesn’t have any place for such a higher level of reconciliation. Lenin notes that Marxists appraise resistance “according to the class antagonisms and the class struggle which find expression in millions of facts of daily life.” Freedom is not a ready-made skill that can be invoked “in an atmosphere of cajoling and persuasion, in a school of mealy sermons or didactic declamations”. Rather, it is formed in the “school of life and struggle,” wherein the interests of the colonizers are exposed to the counter-interests of the colonized. Lenin puts it expressively:

“The proletariat must do its learning in the struggle, and stubborn, desperate struggle in earnest is the only real teacher. The greater the extremes of the exploiters’ resistance, the more vigorously, firmly, ruthlessly and successfully will they be suppressed by the exploited. The more varied the exploiters’ attempts to uphold the old, the sooner will the proletariat learn to ferret out its enemies from their last nook and corner, to pull up the roots of their domination, and cut the very ground which could (and had to) breed wage-slavery, mass poverty and the profiteering and effrontery of the money-bags.”

In a colonial situation, resistance is evaluated not according to the ethical ideology of human life but according to the contribution it makes to the opening of historical possibilities. Amilcar Cabral notes, “Resistance is the following: to destroy one thing for the sake of constructing another thing.” This terse statement is instructive because liberal humanists think of colonialism as a malleable arrangement that can be re-jigged to allow for a better outcome. Cabral brooks none of this. He identifies the inertia of colonialism that has to be destroyed, not merely reformed, to emancipate the colonized. It is because liberal humanists think that the possibility for life remains intact under colonialism that they are unable to appreciate the fight for such a life waged by the colonized. That’s why it is so clarifying to read Cabral’s searing words on the objective of national liberation:

“At the end of the day, we want the following: concrete and equal possibilities for any child of our land, man or woman, to advance as a human being, to give all of his or her capacity, to develop his or her body and spirit, in order to be a man or a woman at the height of his or her actual ability. We have to destroy everything that would be against this in our land, comrades. Step by step, one by one if it be necessary – but we have to destroy in order to construct a new life…our work is to destroy, in our resistance, whatever makes dogs of our people – men or women – so as to allow us to advance, to grow, to rise up like the flowers of our land, whatever can make our people valued human beings.”

Death, the Crisis of Meaning, and Capitalism

By Carlos L. Garrido

 

Republished in modified form from Midwestern Marx.


The Moving finger writes; and, having writ,

Moves on: nor all thy Piety nor Wit

Shall lure it back to cancel half a Line,

Nor all thy Tears wash out a Word of it.

 

- The Rubáiyát of Omar Khayyám

 

Death as the Nexus for the Possibility of Meaning in Human Life

In This Life, philosopher Martin Hägglund argues that:

To attain a peaceful state of eternity you must be liberated from the risk of losing what you love. Were such liberation possible, however, nothing would matter to you. You literally would not care. There would be no urgency to do anything or maintain love for anyone, since nothing of value could be lost.

Homer’s The Odyssey presents us with a similar message in Book Five. The situation Odysseus (the central character) is thrust into on Calypso’s Island reflects the meaninglessness of eternal life (Calypso is a beautiful female deity who detains Odysseus for seven years). On the Island, Odysseus is guaranteed immortality and all the bodily pleasures he can imagine. However, when the character’s stay on the Island is introduced to the reader, Odysseus is weeping, missing his family, and longing to return to them. 

In our contemporary logic of shallow hedonism (or non-Epicurean hedonism) [1], where the satisfaction of desires and pleasures has raised itself into an ethical imperative, Odysseus’s actions reflect those of a madman. Within this contemporary logic, Odysseus’s actions are as unfathomable as Abraham’s killing of his son, Isaac, on God’s orders. Abraham’s action, as the Danish existentialist Søren Kierkegaard notes, is beyond the limits of comprehension, it is absurd and cannot be grasped as a “distinction among others embraced by understanding.” 

Within the logic of contemporary bourgeois society, our dominant mode of experience is having. We are what we have and what we consume. In our capitalist hyper-consumerist societies, the Cartesian cogito, ergo sum (I think, therefore I am) is turned into cōnsūmere, ergo sum (I consume, therefore I am). The world presents itself as a big “theater of consumption,” where meaningless enjoyment — whose real and well-hidden telos [2] is the realization of profit obtained in the consumed commodities — becomes life’s prime want. An island of infinite pleasure would seem, within the confines of this mode of relationality and irrational rationality, the purest form of good — a heavenly island. 

But it isn’t enough for Odysseus. Why? 

Well, not only are there things that matter more than pleasure (if you wish, think of a hierarchy of values, some of the higher ones which are inaccessible in Calypso’s Island), such as honor, loyalty, family, etc., but the possibility of anything mattering at all within the confines of immortality is impossible. Odysseus’s life on the Island might have been pleasureful, but — insofar as it was sustained within conditions of immortality — it would have also been meaningless.

Only when the ever-present reality of our finitude is the background of all our actions can life obtain meaning. Death, that which Martin Heidegger called “the possibility of the impossibility of any existence at all,” is the nexus through which meaning can emerge in our life. It is the fragile character of our lives which functions as the conditions for the possibility of meaning.

Odysseus’s struggle to leave the Island is a struggle for life, for family and honor, but most importantly, for a return to the finitude which underlays our being-in-the-world and provides us with the conditions for living meaningful, truly human lives.

As Achilles (played by Brad Pitt) in Wolfgang Petersen's 2004 masterpiece Troy says: “The gods envy us. They envy us because we’re mortal, because any moment may be our last. Everything is more beautiful because we’re doomed.”

 

The Crisis of Meaning and Bourgeois Finitude 

While it is our finitude which grounds our ability to lead meaningful lives, an awareness of our finitude does not guarantee that we’ll find, or create, meaning in our lives. An awareness of our mortality, therefore, while necessary, is not in itself sufficient.

We know we are not immortal. In fact, in our hyper-consumerist societies, the primacy of shallow hedonism is often rooted in a deep sense of our mortality. For instance, just a few years ago, the acronym that grasped the American zeitgeist was “YOLO,” which stood for “you only live once”. Under this motto, pleasure-centered licentiousness [3] was legitimized. After all, why shouldn’t I enjoy myself to the fullest if I only live once?  

But this sense of mortality has not, and (under the conditions in which it exists) cannot, provide the fertile ground needed for us to create meaning in our lives. We live in societies riddled with depression, anxiety, stress, etc. As the young Karl Marx had already observed by 1844, capitalism systematically alienates us from our labor, its product, our fellow human beings, nature, and from our species-essence (gattungswesen, by which he meant our ability to creatively objectify ourselves onto nature through our labor) [4]. These are profound crises at the human level (crisis comes from one of the Greek words for separation, krísis), and pervade our lebenswelt (life-world) or forms of being-in-the-world under our current capitalist-imperialist mode of life.

In many ways, a lot of these social-psychological ills have been normalized. Even things like chronic illness, which we often take to be a result of genetics or some other form of a “bad luck of the draw,” are in many cases traceable to stress patterns formed out of the habits people are thrusted into by the dominant order. As Dr. Gabor Mate shows in The Myth of Normal, these illnesses are anything but arbitrary and normal. In fact, they are “profoundly abnormal” in just about every way possible. For instance, a 2019 study in Cancer Research found that “women with severe post-traumatic stress disorder (PTSD) were found to have twice the risk of ovarian cancer as women with no known trauma exposure.” Trauma (both its big T and small t iterations) is essentially rooted, as Dr. Mate notes, in a “fracturing of the self and of one’s relationship to the world.” This is, in essence, another way of describing the same crises Marxism has explained, condemned, and combatted since the middle of the 19th century. It is a crisis precisely because it is not “normal,” it is a separation rooted in our historically constituted mode of life. 

In the midst of our alienated, exploited, and oppressed mode of existence, the form of life we live in must, in order to successfully finish the cycle of capital accumulation for which we were exploited in the first place, bombard us with advertisements destined to make us Homo consumericus [5] in those few hours of the days were — although feeling the lingering effects of the work day – we are not directly getting exploited. The consumption of advertisements — which studies have shown take up, on average, four years of our lives — is a form of consumption which proliferates our desires to consume. It is the equivalent of drinking Coca-Cola, a drink shown to dehydrate us further, in order to quench our thirst. 

Additionally, since we often can’t afford this (wages have stayed low, prices and job precarity have risen), we are forced to turn to borrowing to pay for what we consume. The American working class is undoubtedly among the most indebted in history. This debt slavery, which characterizes the lives of the modern American proletariat and reproletariat (i.e., the section of the last century’s middle classes which have fallen back to precarity and instability), is a form of what Marx calls in Capital III the “secondary exploitation… which runs parallel to the primary exploitation taking place in the production process itself.” This has ushered into world-history a new form of super-exploitation within the metropole itself, where its working masses are not only exploited (direct, primary exploitation) but cripplingly indebted (secondary exploitation), and therefore, doubly, or, super-exploited.

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How can any meaning arise in lives plagued by alienated work and meaningless consumption? It is not enough to show that we are dealing, as a society, with a deep crisis of meaning. Viktor Frankl, for instance, already described in the middle of the last century through many widely read and celebrated books the universal character of meaninglessness in modern bourgeois society. But is this recognition enough? Must we not inquire as to its origins? Must we not explain, and not just describe, these crises?  

A scientific explanation of these pervasive social-psychological ills would have, as Dr. Mate notes, “revolutionary implications.” The question would be, can the sciences in these fields (especially its mainstream trends), be able to overcome what the Marxist scientists Richard Levins and Richard Lewontin have called their “Cartesian reductionism?” Can they move away from bourgeois philosophical assumptions which divide mind and body, individual and society, which observe things as dead and static entities, and which reify them from the larger totalities whose existence they presuppose? In short, can these sciences adopt — either consciously or not — the materialist dialectic and its focus on universal motion, interconnection, contradiction, totality analysis, etc.? These are the foundations through which we may reproduce the concrete concretely in thought, and hence, understand the world in all its complexities.

A central obstacle in this task is not only the bourgeois character of the institutions the sciences are forced to operate through, but, as an ideological reflection of this, their adoption of the view that they are (and this is especially true in the “hard” sciences) somehow above ideology and philosophy. What an ideologically loaded sentiment! We are back to Plato’s cave, back to prisoners who take the conditions of their particular enchainment to be the whole of reality itself. The truth is, while the sciences often fancy themselves to be “above” philosophy and ideology, “in most cases,” as Friedrich Engels had noted, they are “slaves to precisely the worst vulgarized relics of the worst philosophies.” 

“Nothing evokes as much hostility” in scientists, Levins and Lewontin write, “as the suggestion that social forces influence or even dictate either the scientific method or the facts and theories of science.” A regrounding of the mainstream sciences in a consistent dialectical materialist worldview, along with the uprooting of the profit motive that dictates its telos in our mode of life, would readily provide a richer, more comprehensive, and — necessarily — a more revolutionary understanding of our crisis of meaning and what overcoming it entails [6]. 

 

Finding Meaning in the Struggle for a New World 

The crisis of meaning we are experiencing is systematically rooted in the capitalist mode of life. This is something which can, and has, been scientifically proven. It is not simply a question of “culture” or “individual accountability.” While the crisis manifests itself in our culture and individual lives, its existence there reflects the forces at play in the economic base of society. The crisis in our culture and in our individual lives is a product of the heightening of the contradictions at the foundation of a moribund capitalist-imperialist order. 

This is where a lot of the commentary (especially critical in character) on the crisis of meaninglessness misses the mark. Most of it merely describes the way the crisis looks by the time it gets to the social-psychological level, remaining “cultural” in its critique through and through, never explaining the underpinning motion and contradictions producing that which they critique. The superiority of the Marxist outlook (i.e., dialectical materialism) is found in its ability to do precisely this — to explain and not just describe, to show the underlying foundations producing movement at the surface, and not simply taking that surface for the whole of reality. 

It is important to note, however, that our contemporary crisis of meaning doesn’t necessarily entail that meaningful lives are impossible. On the fringes of quotidian society, there are still people who, like Odysseus, find meaning in tending to familial duties. There are also, like Odysseus, people who may be rooted in a strong sense of honor, in a deep drive for greatness in their respective fields. This is certainly a reality for many athletes, whose striving within their sports provides a source of meaning in their lives.

However, no greater meaning can be derived than that which arises from fighting against the system that produces these crises of meaning. The greatest and most memorable human beings in history have been those, like Socrates, Jesus, Simón Bolívar, John Brown, Frederick Douglass, Marx and Engels, José Martí, Vladimir Lenin, Mao, W. E. B. Du Bois, Ho Chi Minh, Fidel Castro, Che Guevara, and many more, who have found their life’s purpose in the struggle to move humanity forward into a more rational and free world. There is, therefore, tremendous meaning to be found in the struggle against a world governed by exploitation, alienation, and oppression. A capitalist-imperialist order that has murdered tens of millions (four million in the Muslim world in the last two decades alone) and that is threatening humanity with nuclear Armageddon to sustain its hegemony, is worth making the object we commit our lives to destroying. 

But a purposeful and meaningful life does not have as its only end destruction. We seek to destroy this order, not so that we can dance on the rubble, but so that the fetters it has set on humanity are destroyed. We seek to destroy not for destruction’s sake, but because what we destroy is itself a system, as the British Marxist William Morris called, of waste and destruction. We destroy, in other words, so that we may construct a future free of poverty, exploitation, plunder, war, oppression, alienation, meaninglessness, bigotry, etc. We destroy so that we may construct a world in which humanity can flourish, where people of all creeds may, as Che Guevara hoped, achieve their “full realization as a human creature.”



Carlos L. Garrido is a philosophy teacher at Southern Illinois University, Director at the Midwestern Marx Institute, and author of The Purity Fetish and the Crisis of Western Marxism (2023), Marxism and the Dialectical Materialist Worldview (2022), and Hegel, Marxism, and Dialectics (2024).


Footnotes

[1] Epicurus’s hedonism has little to do with how we understand the concept today. Today, the hedonist is understood to be the person who concerns themselves with the basest pleasures of the body. The image of someone in a bubble bath, drinking sparkling wine, eating chocolate-covered strawberries usually comes to mind. However, for the Epicurean school of hedonism, pleasures and pains are of different kinds. There are natural, necessary, and vain pleasures we encounter. The goal of the enlightened pleasure seeker is to distinguish amongst these — to avoid those immediate pleasures that cause pain in the long run (e.g., drugs, unhealthy food, etc.), to contain the natural desires to a rational limit (e.g., sex, while natural, if not taken in moderation can lead to sex addictions, and this takes this natural pleasure to the point of ‘“pain”), and to recognize those immediate forms of pain that might actually lead to pleasure in the long run (e.g., exercise, medicine, etc.). All in all, the Epicurean enlightened hedonist will, in their actions, look a whole lot more like they’re following an Aristotelian virtue ethic than the base hedonism we encounter today.

[2] Its end, goal, purpose, highest good, etc.

[3] This term is not limited to its sexual connotation but refers to any notion of liberty” that operates through the abandonment of necessity — a state of lawlessness, an absence of social rules.

[4] For more on the development of the concept of alienation through Marx’s work, see my review article.

[5] A neologism that describes the turning of human beings into “consumerist animals” in modern bourgeois society.

[6] I have shown elsewhere how this poverty of outlook, conjoined with the material incentives of capitalism, has led to the utter failure of the sciences (the mainstream ones; there’s always good folks doing work that goes against the grain) to understand social-psychological ills such as depression (see: “The Failed Serotonin Theory of Depression: A Marxist Analysis”)

Manufactured Crisis Over US Debt Ceiling Sets Stage for Bipartisan Assault on Social Security and Medicare

[AP Photo/Mariam Zuhaib]

By Barry Grey

Republished from World Socialist Website.

It is now one week out from the “X-date,” June 1, when the US will purportedly default on its debt obligations, triggering a “catastrophe,” unless the Democrats and Republicans can agree on a bipartisan deal raising the debt ceiling in return for brutal cuts in social programs on which tens of millions of working people rely.

Behind the mutual recriminations between the two capitalist parties and the stage-managed crisis negotiations, there is a basic agreement: All of the social gains made by the working class in the course of more than a century of struggle must be wiped out to pay for the drive by the American ruling class to remove, by force of arms, Russia and China as obstacles to US hegemony, even if it means triggering a nuclear war.

The social cuts implemented in an eventual debt limit/budget deal will be only a down payment. They will set the stage for an assault on the core entitlement programs—Medicare and Social Security—extracted from the ruling class in the class battles of the 1930s and 1960s.

President Joe Biden and House Speaker Kevin McCarthy of California walk down the House steps Friday, March 17, 2023, on Capitol Hill in Washington. [AP Photo/Mariam Zuhaib]

On Wednesday, with the talks between President Joe Biden and House Speaker Kevin McCarthy having hit a “speed bump” and the financial markets indicating increasing nervousness, the Washington Post published an editorial backing Biden’s proposal for a two-year spending freeze and $1 trillion in cuts over the next decade. At the same time, the newspaper owned by Amazon billionaire Jeff Bezos reiterated its demand that both parties tackle what it deems the real problem, the cost of the mandatory programs that stand outside of annual discretionary spending—Social Security and Medicare.

“Mr. McCarthy keeps claiming the nation has a ‘spending problem,’” the Post wrote. “The part he leaves out is the spending problem is driven largely by the fact that Social Security, Medicare and health-care costs are shooting up. Yet House Republicans and Mr. Biden don’t want to touch Social Security and Medicare.”

The editorial is part of an expanding wave of media commentary on the need to “reform” or privatize these core social programs. On Sunday, CNN’s “State of the Union” program featured Louisiana Republican Senator Bill Cassidy, a so-called “moderate” who advocates tying Social Security to the stock market and essentially privatizing it.

“Face the Nation” host Margaret Brennan interviewed congressmen Brian Fitzpatrick, Republican of Pennsylvania, and Josh Gottheimer, Democrat of New Jersey, members of the “moderate” Problem Solvers Caucus in the House. Fitzpatrick declared:

Medicare will run out of money in 2028. Social Security will run out of money in 2034 … until we tackle the mandatory spending and get a handle on our long-term sustainability of our debt and deficit, we’re just playing around the margins.

McCarthy himself spoke along similar lines before his meeting Monday with Biden, while refraining from explicitly targeting Social Security and Medicare. “I don’t want you to think at the end of the day, the bill that we come up with is going to solve all this problem,” he told reporters. “But it’s going to be a step to finally acknowledge our problem and put one step in the right direction. And we’re going to come back the next day and get the next step.”

Biden has already made a large down payment on the new austerity drive with his ending of the national COVID-19 emergency, which has not only increased the risk of infection and death from the ongoing pandemic, but authorized state governments to review their Medicaid rolls in order to terminate people’s benefits. The Kaiser Family Foundation estimates that between 5.3 million and 14.2 million people will lose Medicaid coverage just through that process alone.

Graph showing decline in tax receipts even as corporate profits rise. [Photo: This graph was published by the Center for American Progress. (online)]

Far from increased social spending driving the rise in the national debt, it remains sharply down, when adjusted for inflation and population growth, from the levels preceding the bipartisan Budget Control Act of 2011. That bill, which followed the financial collapse of 2008, the multitrillion-dollar bailout of Wall Street, and the imposition of wage and benefit cuts and wage tiers under the auto restructuring overseen by the Obama administration, marked the first use of the debt ceiling, previously raised as a matter of course, to impose brutal attacks on the working class.

In all the media coverage, no explanation is given as to the real causes of the soaring national debt or why it is the working class that must pay the price.

What are the real sources of the increase in the national debt to its current $31.4 trillion?

  • Military and war spending: The United States spent between $4 trillion and $6 trillion on the 20 years of war in Iraq and Afghanistan, according to a Harvard analysis.

    Last year alone, the Biden administration allocated $113 billion in arms to Ukraine and this year proposed a record $1 trillion Pentagon budget. Last week at the G7 summit in Hiroshima, before returning to the US and holding budget talks with McCarthy, Biden announced an additional $375 billion in arms for the right-wing puppet regime in Kiev.

  • Tax cuts for corporations and the rich: The George W. Bush administration enacted two rounds of tax cuts, overwhelmingly benefiting the wealthy. The Obama administration made them permanent in 2012. That has cost $4 trillion over 10 years, according to the Congressional Budget Office.

    The Trump tax cut of December 2017 handed over $2 trillion to the corporate elite, including the reduction of the official corporate tax rate to 21 percent. As Biden noted in his press conference last Sunday from Hiroshima, 55 US corporations that made $400 billion last year paid zero in taxes, and US billionaires pay an average tax rate of 8 percent.

    According to the US Bureau of Economic Analysis, corporate profits rose by 20 percent between 2014 and 2020, while corporate tax receipts fell by more than 60 percent.

    In 2018, according to the Organization for Economic Cooperation and Development (OECD), corporate tax revenue as a share of GDP in the US, at 1.1 percent, was lower than every other member country except Latvia.

Graph showing the US has the second-lowest percentage of corporate tax revenue as a share of gross domestic product, just above Latvia. [Photo: This graph was published by the Center for American Progress. (online)]

  • Bank and corporate bailouts: The Bush and Obama administrations enacted $2 trillion in emergency measures following the subprime mortgage collapse in 2008 and the ensuing Great Recession. In addition, the Federal Reserve funneled trillions more to Wall Street through its program of “quantitative easing.” Meanwhile, tens of millions of workers lost their homes and life savings as a result of the criminal practices of the bankers.

    The Trump administration, with the support of the Democrats in Congress, allocated $3.4 trillion in the March 2020 CARES Act to unfreeze the Treasury bond market and rescue banks and corporations from the impact of the COVID-19 pandemic. The Fed added trillions more through its expansion of “quantitative easing.”

War mongering, greed, and criminality have impelled the policies pursued by the parasitic American ruling elite and driven up the national debt.

Housing is Determined By Class Power and Profit, Not "Supply and Demand"

By Shi Sanyazi

There is a widely accepted belief among the journalists, think tanks, and politicians who animate the housing discourse that a lack of housing supply is the source of tenants’ present conditions (ever-rising rents, primarily). It follows that these thinkers advocate for a variety of policies which will, in their eyes, allow the market to “self-correct.” Once the supply of housing has met the demand, they argue that rents should go down (just like in the graphs we drew in high-school economics class!).

We shouldn’t deny that the idea has a comforting appeal. It offers a neat, ostensibly “common-sense” solution that all sides — developers, landlords, tenants — can theoretically get behind. It’s very easy to say: “match supply and demand and rents will go down — that’s just how markets work.” It’s more difficult to admit the inconvenient truth. 

The truth is that — especially in the era of algorithmic price-setting and increasingly financialized, corporate ownership of rental housing — our conditions as tenants are determined by the balance of class power, not the balance of supply and demand. 

Landlords, developers and their financiers are classes with class interests — namely, making the fattest profits possible. They are highly organized and have historically been willing to wage war on anyone who challenges their bottom line. Real estate capital’s return-on-investment depends on their capacity to out-organize and overpower tenants. 

Tenants' class interests — community control over our housing and the basic need for shelter — are, by definition, the opposite of real estate capital’s class interests.

The “supply crisis” narrative is deficient because it makes no attempt to reckon with the class relationships which define the housing market. The assumptions this narrative makes about the behavior of the housing market hinge on ignoring the structural imbalance of power between tenants and landlords, developers and their financiers. 

Landlord’s profit margins are determined by their level of organization (aided nowadays by political corruption, algorithmic financialization and consolidation of the rental housing stock) and the state’s ability to enable their exploitation with neglect, violence, and the threat of violence. Developers similarly ensure their profits by working in tandem with local governments and the police to forcibly remake neighborhoods to their liking, displacing working-class Black and brown communities. Lurking in the shadows, backing the landlords and developers, is the ruthlessly efficient and sophisticated arm of finance capital.

If we understand real estate capital as an organized class pursuing its class interests, and if we take the “pro-housing” argument at face value (i.e; increased supply will decrease rents), then we would expect real-estate interests (whose profits would be cut into if rents decreased) to oppose their policy prescriptions.

It’s quite curious then that the real-estate lobby and their political bedfellows openly support “pro-housing” non-profits and propagate their political lines. Powerful lobbying groups like the Real Estate Board of New York (REBNY) and the National Multifamily Housing Council revel in parroting “pro-housing” talking points. From REBNY’s 2022 testimony on Mayor Adams’ housing plan: 

New York is facing a housing crisis. A key driver of this crisis is the lack of housing production and inadequate supply to meet the needs of our growing and diverse city.

They go on to — shocker! — recommend the city and state remove regulatory barriers to development and continue to subsidize their lucrative construction projects. It shouldn’t come as a surprise that NYC Mayor, Eric Adams, agrees: he’s pledged to administrate a “city of yes,” arguing bluntly in The Economist that “although many factors contribute to the problem, at its core we have a housing crisis because we are not building enough housing.” NY Governor Kathy Hochul’s housing proposals echo the same logic. For what it's worth, Adams and Hochul have both been consistently showered with real-estate donations.

So, despite the promise that building more housing will bring down rents, the real-estate lobby embraces the prospect of building more housing! Why? Because the “supply crisis” narrative is an idea working in defense of their class interests.

Do we really believe that landlords and developers will actively support a reduction in their profits? Do we think they’re going to resign themselves with a deep sigh and a “well, that’s just the way the cookie crumbles?” How naïve can we possibly be? As James Baldwin once wrote of capitalism, to imagine these leeches ceding power and profits willingly demands “yet more faith and infinitely more in schizophrenia than the concept of the Virgin Birth.” 

Landlords and developers have no interest in solving the housing crisis because the permanence of that crisis is the condition of their wealth and power. This understanding has serious practical implications. 

In other words, if we understand our conditions to be a result of class struggle (rather than a market imbalance), it becomes quite clear that our conditions will be determined by our level of organization as tenants and our ability to wage struggle against the force that commodifies our need for shelter: real-estate capital.

The magic lies in our hands and our hands alone

This conclusion is the same as that at the core of all consciousness-raising movements, indeed at the core of all anti-capitalist, anti-colonial, anti-racist, anti-patriarchal movements (see, for example, the Black Consciousness movement in South Africa; the Combahee River Collective; or the Landless Workers Movement in Brazil). It's the same conclusion which the legendary anti-colonial thinker Frantz Fanon came to:

[Political education] means driving home to the masses that everything depends on them, that if we stagnate the fault is theirs, and that if we progress, they too are responsible, that there is no demiurge, no illustrious man taking responsibility for everything, but that the demiurge is the people and the magic lies in their hands and their hands alone.

The magic lies in our hands and our hands alone.

When we get organized, we have the capacity to transform our conditions. Will we win collective control over our cities? Will the threadbare protections we have left be rolled back? Will we stagnate? It’s up to us! 

Through militant organization, tenants wield — and historically have wielded! — a tremendous amount of power. Every concession from the landowning class; thus, every victory for tenants, has been won through this organization. 

The first rent control laws in New York City were passed due to pressure created by waves and waves of militant rent strikes (not to mention the fears of a Bolshevik-style revolution that these strikes helped inspire). Great Depression-era tenant activism — which included the successful efforts by the Communist Party to reverse evictions of working class tenants — was the impetus for New York City’s first public housing projects (FDR himself said that the concessions of the New Deal were driven by a desire to “save our system, the capitalist system…”). Mass agitation by Black organizers led to the passage of Fair Housing laws (while the real estate lobby was organizing against them). The COVID-19 eviction moratorium in New York was fought for and repeatedly extended due to pressure from organized tenant unions.

These are all tenuous and often contradictory reforms (public housing in the US, for instance, often deepened racial segregation), class truces which politicians negotiated in exchange for relative peace and quiet. The goal is not to aspire to reform, but to highlight that these reforms were not enacted because of our participation at the ballot box, nor passed by a benevolent state, nor advocated for by benevolent landlords and developers — they were fought for, collectively, in the streets and hallways and lobbies of our neighborhoods. 

Tenants are and always have been the protagonists of the struggle for control over our buildings, neighborhoods, and cities. 

OK. With that in mind, we can move on to addressing the core claim — that the “housing crisis” is caused by a supply deficit — in detail. Through this, we can highlight that the “housing crisis” is not “fixable” with “policy.” Our conditions as tenants are determined by our level of organization and effectiveness at waging class struggle.

The “supply crisis”

An imbalance between supply and demand is not the source of tenants’ present conditions. The real source — as has been the case since capitalism violently imposed its will on the world four centuries ago — are the private property relations which enable the exploitation of working people by the landowning class. Present-day gentrification is just one chapter in the centuries-long story of displacement, enclosure and imperialism which has marked the penetration of capital into indigenous and working class communities. So long as these relations remain intact, our struggle will persist. 

This is not to say that we should never build housing. There’s no doubt that under the collective governance of the working class (god-willing), the supply of housing would be responsive to migration and other fluctuations in demand. The disagreement stems from a core question: who is building housing and for whom are they building housing?

The alternative to the current arrangement, wherein tenants have next to zero democratic control over their communities, is to organize towards a world where tenants themselves collectively control and direct the development of safe, beautiful, ecological housing. 

That’s the polemic response — let’s dive a little deeper. As we work through the details, let’s keep the argument in mind:

Tenants’ conditions are determined by the balance of class power, not “supply and demand.”

This section is divided into a few parts to make it a bit more digestible. 

Mind the rent gap!

We can start by exploring the process of gentrification, where we can very clearly observe how real estate capital wields its class power to mold cities to its liking. Notably, its class organization has become increasingly sophisticated in recent years, as the rental housing stock has been consolidated in fewer and fewer hands. It can be quite challenging nowadays to figure out who your landlord actually is, as they usually hide behind a maze of shell companies, LLCs and Real Estate Investment Trusts (REITs). An army of supers and management companies further distance landlords from tenants, acting as convenient buffers for the corporate owners and private equity firms pulling the strings.

As a result of this consolidation, private equity firms, mega-developers and corporate landlords execute rent hikes, serve evictions, illegally (and legally) deregulate apartments and in sum, cause displacement, in an increasingly coordinated manner. 

In our organizing, more often than not, we work with tenants in buildings owned by a landlord with hundreds to thousands of units in their portfolio. (The average apartment in New York City is part of an 893 unit portfolio.) When we visit other buildings in that portfolio, we’ll usually find the same issues, whether disrepair, harassment, skyrocketing rents, and (illegal and legal) deregulation. 

(If you are interested in researching the owner of your building in NYC and kick-starting a tenants association in your building, JustFix is an incredible asset.)

To streamline gentrification, mega-developers, corporate landlords, and private equity firms utilize sophisticated algorithms to identify “rent gaps.” A rent gap is the difference between the rent currently being paid by tenants and the rent that could be potentially charged in the same location if the current tenants were evicted through legal or illegal means. PropTech companies like Skyline AI and RealPage are accomplices in this plunder. Their business is that of identifying apartments which are “‘inefficient’ in the rental market in relation to their total cost, before teaming up with the largest property investment companies to make an offer.” 

These advanced techniques (enabled by troves of data collected by big tech firms) allow investors to target optimal neighborhoods for gentrification with pinpoint accuracy. It shouldn’t surprise us that at a neighborhood level, there is a direct correlation between concentrated corporate ownership and gentrification. 

Naturally, real estate capital’s drive to extract as much profit out of our cities as possible does not care much for pesky renter protections like rent-stabilization and public housing. In fact, the relatively low rents in rent-stabilized apartments and public housing (as compared to market-rate) make them even more appealing, in the sense that they present even larger rent gaps to “close.” 

From a private equity firm’s perspective: Imagine a rent-stabilized building which rents for an average of $800/mo per unit, in a neighborhood where rents are averaging $1500/mo per unit (and climbing!), or are where rents are primed to increase to that price (in accordance to the precise calculations of algorithms from RealPage and Skyline AI). To a private equity firm, the building represents an opportunity for superprofits. To the building’s working class, usually Black and brown tenants, the building is not an investment opportunity — it’s home, a small pocket of resistance to the waves of real estate capital engulfing their communities. But if the private equity firm can evict the current residents, destabilize the building, and slap on a gentrification mask — then they can charge many times as much in rent and make a fat profit. All in a day's work for the vampires sucking our cities dry. 

Real estate capital also pushes this class agenda through legal action. For instance, New York City landlords are currently suing to wipe out rent regulations which protect around 1 million tenants from naked exposure to the “free market.” This case will go to the revanchist Supreme Court, who will likely rule in favor of the landlords. Once again, we can plainly observe that our class enemies are organized and aggressive!

It’s not an accident that in our organizing we encounter and experience consistent patterns of harassment, disrepair, and neglect in rent-regulated buildings. In New York City, deregulation is most commonly allowed upon vacancy, so it follows that landlords and speculators doggedly pursue vacancy via eviction. Some of their choice strategies include: buyouts, fake eviction notices, illegal refusal to renew leases, intimidation, neglect, intentional disrepair, cutting off heat, electricity and water, calling the police on tenants, and direct harassment. There are technically legal protections against strong-arming tenants out of regulated apartments, but they’re rarely enforced. Like other tenant’s rights (or, for that matter, any right “granted” by the state), protection from harassment is generally only realized when enforced by organized tenants. 

It’s also not an accident that the real-estate lobby and their politician friends have intentionally neglected to fund the upkeep of New York City’s remaining public housing stock. After all, NYCHA’s repair backlog (many tens of billions dollars) makes for a very convenient political device. When it came time to justify the “Preservation Trust” — nothing more than a scheme to privatize and commodify that remaining bastion of working class affordability — NYCHA’s repair backlog was cynically presented as evidence that public funding is no longer feasible. When challenged by outraged NYCHA tenants, conservative and “socialist” politicians alike argued that we have no option but to turn to the private sector to save NYCHA. As Holden Taylor writes

The line of reasoning put forth by the policy wonks and “socialists” advocating for the trust is, as usual, one of pragmatism and practicality. The Trust is the only way to get money for repairs, they say. This boils down, to butcher Rosa Luxemburg’s aphorism, a framework of “Privatization or Barbarism,” as these experts claim that the only alternative to the Trust is the status quo and the ever more crumbling infrastructure and dire quality of life that define it. Again, this is a failure of imagination. It is the socialist’s responsibility to push past the status quo, to fight for socialism, not merely a different form of marketization.

These observations about de-regulation and the privatization of public housing also help us to understand why the minority of left YIMBYs — who argue we should pair market solutions with an increase in social housing and tenant protections — are so woefully misguided. There is no way to guarantee that any housing we build will stay affordable when landlords, developers and finance capital have demonstrated they will wield their class power to commodify every inch of the city they can get their grubby hands on. Even our supposedly “socialist” elected officials are liable to bend to the will of real-estate capital without an organized mass movement to back them. The sober reality is: the remaining sources of off-market housing are being eroded because we are not sufficiently organized to protect them. The only way to protect those apartments and reverse the trend is through organized struggle. 

For instance, in 2020, organized community groups resisted the illegal eviction of tenants at 1214 Dean St. in Crown Heights. By occupying the stoop and physically resisting the eviction, the tenants eventually forced the city to buy the apartments and convert them into publicly-funded, affordable housing.

Build, baby, build! What could go wrong?

It doesn’t matter how “market optimistic” you are (as one reporter recently described the “pro-housing” non-profit Open New York) — when we let developers build freely, they will always be incentivized to build market-rate housing because those are the developments with the juiciest profit margins (and often the juiciest subsidies). This is not a neutral outcome. Building housing which people in surrounding neighborhoods cannot afford is the one of the first steps in the process of gentrification. 

In response to residents’ concerns about displacement, politicians will often promise that developments will meet the needs of communities because they contain 10% or 20% affordable units. This logic is premised on the idea that flooding a working class neighborhood which desperately needs cheap housing with, for instance, 900 market-rate units and 100 “affordable” units (which, due to the way affordability is measured, are often not actually affordable to those who most desperately need them), will produce anything but an influx of wealthier people who will displace the current residents. Just the announcement of permits for new market-rate developments can set off a frenzy of speculation, as investors look to sink their grimy fingernails into the imminently gentrifying neighborhood. 

The rise in the median income of an area (which inevitably accompanies market-rate development in working class neighborhoods) is often the impetus for steep hikes in the median rent. Which is to say: when people have more money, landlords generally raise rents (and rents usually rise faster than income — a few studies to reference: here, here and here.) Income inequality ensures that rising median rents disproportionately displaces working class tenants, as Francesca Manning explains:

While some people’s income is increasing at a rate to keep pace with rising rents, a large group of people’s wages are stagnating, falling, or rising far too slow to keep them housed … households that live in high-income [areas], whether or not they are themselves high income, end up paying a higher and higher percentage of their wages in rents.

In locales where market-rate development is not profitable, developers will not develop unless subsidized. This is a prominent form of “organized abandonment,” the movement of capital and social services away from populations and geographies deemed surplus and/or no longer profitable. Working class Black and brown communities are the first victims of this abandonment. These communities are faced with either: investment and gentrification; or disinvestment and abandonment. It’s russian roulette, except all of the chambers are loaded. Flint’s working-class Black population is one such example of a community which has been systematically abandoned by capital and the state.

Even with an understanding that developers will always build for profit, some will maintain that new housing supply at the top-end creates downward pressure on the market and “filters” units down to working class tenants. This is not an effective strategy, especially with the urgency that present conditions demand. Even when a filtering effect can be observed over decades, it is usually outweighed by the more immediate effects — sharply increased rent burdens and displacement  — that market-rate development set in motion. It’s important to understand that the “housing market” is not a single, unified market, but rather a series of income-level based sub-markets. Increased supply at the top end of the market can simultaneously stabilize rents for high-income tenants and increase rents for low-income tenants.

The “filtering” theory makes more than a few dubious presumptions. Three more are:

  1. that new apartments will be occupied by warm-blooded humans;

  2. that tenants are able to move constantly to and from apartments in the name of market equilibrium; 

  3. that landlords who were recently collecting rent from a wealthier tenant will suddenly have a change of heart and lower their rent to accommodate the new, lower-income tenant who is moving into the “filtered” apartments.

1) ignores the reality, which is that many of these apartments are destined to be bought for investment purposes. At least a hundred thousand units in New York City are investment properties and second homes for the ultra-rich. As Raquel Rolnik writes, luxury real estate in places like New York City has increasingly become a “safe-deposit box for the transnational wealthy elite,” rendering many new apartments un-filterable.

2) and 3) are even further divorced from reality. I’m not quite sure where the filtering theory nerds are finding landlords willing to grant day-to-day leases to allow for this kind of flexibility — nor where they find landlords willing to sacrifice their bottom line for the sake of market equilibrium. 

To this point (that supply and rents are not necessarily, or even likely to be correlated), we can briefly look at two of the metropolitan areas which produced the most housing in the last decade (2010-2019): Raleigh, NC and Austin, TX. Both of these cities maintained a ratio of 1-2 jobs per new housing unit, which mainstream economists consider to be “healthy.”

In Raleigh, housing construction kept pace with population growth from 2010-2019. Did rents stabilize or go down in accordance with the magic supply and demand graph? No! They rose 53%, miraculously spurning the ironclad economic law of supply and demand.

In Austin, between 2010 and 2020, new housing production actually outpaced population growth (25.5% to 21.7%). According to the “supply crisis” narrative, rents should have gone down or at least stabilized, right? You’ll be shocked to learn that between 2010 and 2020, rents in Austin increased by 93%. Historically Black enclaves like East Austin have rapidly gentrified in spite of the growth in housing construction. The supposedly common sense relationship between housing supply and median rents is, uh, not so apparent to the average tenant in Austin.

The shock troops of real-estate capital

Class power requires enforcers, and real-estate capital’s war on working-class tenants is no different. The police are intimately involved in the process of displacement. 

The police are, after all, the most visible manifestation of the violence which undergirds private property relations. When you don’t (or can’t) pay your rent, you come face to face with the enforcers of the private-property relation: the court sending a Marshall to serve you with an eviction notice, and the police forcefully and violently executing that eviction if you resist. Landlords rely on the police to backstop evictions, which is the most fundamental mechanism for the reproduction of privately-owned housing. Without the threat of eviction, the landlord's power would evaporate, as we experienced during the COVID-19 eviction moratoriums. The state’s power is also felt implicitly: even if a tenant association is interested in taking a radical action like resisting a fellow tenant’s eviction, they understand that the state will almost certainly intervene on the side of the landlord, and can therefore be discouraged from acting. 

The process of eviction is nothing less than the state using their monopoly on legal violence to privilege the landlord’s right to exploit us over our human need to have a roof over your head. 

Gentrification relies on the same violence to function. In its infancy, gentrification is marked by the violent projections of private property relations onto working class communities, which solidify in physical form as the police. Cops consistently step up broken windows policing in neighborhoods which are gentrifying, further exposing working class Black and brown communities to the carceral state. Broken windows policing is the proverbial stick to the carrot of tax abatements, rezoning and developer incentives which open the floodgates for real estate capital. 

In the process of gentrification, homeless tenants (homeless people are tenants in that they do not control their housing; the struggles of housed tenants and homeless tenants exist along the same spectrum of precarity) are brutalized and disappeared. Eric Adams’ assault on homeless tenants which we have resisted over the past year is inseparably part of this same project. He is not uniquely evil either; his predecessors De Blasio and Bloomberg similarly utilized the NYPD to terrorize homeless tenants and remake the city to the real estate lobby’s liking. Connecting the struggles of homeless tenants to housed tenants — not just in solidarity, but as a movement united in opposition to the same forces of real estate capital — is a crucial task.

As many have compellingly argued, including her own family, Breonna Taylor was, at least in part, a victim of state-sanctioned gentrification. Breonna was murdered in the Russell neighborhood, which was being explicitly targeted for gentrification by the city of Louisville. Before and after her murder at the hands of the state, there was an observable “sharp increase in public nuisance cases, with 84% of those cases occurring in Louisville’s predominantly Black western half, which includes the Russell neighborhood.” As the Root Causes Research Center explains:

… the forces of property and police converged in Russell to acquire the remaining property for the redevelopment of Elliott Ave through the collaboration of the Louisville Metro Develop Louisville Office and the Louisville Metro Police Department’s Placed Based Investigations Squad (PBI). Increased pressure from the Louisville Mayor's Office to acquire these properties led directly to the rapid employment of PBI. The PBI Squad, then, employed a concept they were barely familiar with, to create the false evidence needed for the "No-Knock Warrant" that led to the murder of Breonna Taylor.

Gentrification is a process which travels along the existing contours of racial capitalism. Working-class Black communities (including homeless tenants) are the first to encounter — and the first to resist — the rusty knife edge of displacement. 

In sum: Gentrification is initiated by speculative, algorithmically-backed, financialized development and landlord harassment; enabled by racist police violence, tax abatements, developer incentives and capitalist urban planning; and resulting in displacement and harm (sometimes death) for the working class Black and brown communities who stand in its way. Gentrification is, in other words, not a natural phenomenon, not an unavoidable but necessary process, but rather one front in real estate capital’s organized class war on working class tenants.

Does this evidence point to a solution which gives more freedom to developers and landlords? No. Gentrification can only be stopped by collective control of our buildings, neighborhoods and cities. After all, it's highly unlikely that communities would displace themselves if and when they win control over their space.

One glimmer of hope we can look to for inspiration: In Los Angeles, after being confronted with rent increases of up to 200%, the tenants of Hillside Villa organized, militantly — in Spanish, Cantonese and English, no less. In 2022, their organizing paid off: they successfully pressured the city to buy their building on their behalf, thwarting their landlord's attempt to fatten his profit margins and placing their housing under some level of community control.

Ransom, manipulation, collusion

Organized real-estate capital demonstrates every day that it will protect its profits by any means necessary — regardless of “market equilibrium.” Outside of the strategies we’ve already covered, some of their choice tactics include market manipulation, legal action and collusion.

For instance: CHIP — a New York landlord advocacy group — is currently keeping 20,000 rent-stabilized units vacant (an act that is particularly malicious considering that over a hundred thousand New Yorkers are homeless, including thirty thousand children). In total, over 60,000 rent stabilized units are currently vacant across the city. Why? As a threat! A show of force! An act of organized class war! CHIP has openly stated that they won’t put these apartments back on the market until the state legislature repeals the 2019 Housing Stability and Tenant Protections Act, which limits their ability to jack up rents after making necessary renovations. It’s a “ransom!”

As Karl Marx himself pointed out (and others have more recently argued), the tendency of the landowning class to withhold their land from the market, and to threaten to withhold land from the market, is intrinsic to capitalism. Holding land off the market is not an irrational action for landlords — it is a rational, profit-maximizing strategy that is employed everyday by landowners across the world. This tendency is why, seemingly paradoxically, increases in vacancy rates do not always correspond with reduced rents.

This tendency explains why property owners will always fight vigorously against any regulation which would restrict their ability to keep units vacant. For example, in response to a newly passed vacancy tax which would fine landlords for failing to rent empty apartments, organized San Francisco landlords (through lobbying groups representing thousands of property owners) are suing the city, arguing they have “constitutional and statutory rights to keep their units vacant if they so choose.” Constitutionally speaking, they’re correct — the Supreme Court will always protect property owners “right to exclude” — but that’s only because the Supreme Court is designed to codify and protect private property relations.

According to the most recent statistics (from 2021), there are around 250,000 (officially) vacant units in New York City. Importantly, the vacancy rate does not include the hotel rooms which sit empty while homeless tenants beg for change just outside their doors, nor unreported warehoused market-rate apartments, nor the hundred thousand or so units which are kept as investment properties and second homes for the ultra-rich.

While in any context, there will be some vacancies, to really understand this number we have to understand which apartments are vacant. Low-cost apartments are at near-zero vacancy levels while the vacancy rates  in high-cost apartments remain extraordinarily high. Tracy Rosenthal of the LA Tenants Union sums up this disparity bluntly: “There is no shortage of housing except for poor and working people, which the market has never and will never provide.” 

In their 2022 report, the Community Service Society of New York echoes Rosenthal, writing that many of New York’s vacancies can be attributed to “long-term overproduction of luxury condos/co-ops as investment vehicles.” They sum up their findings neatly:

There is very little available housing at low rents, but a lot available at rents most New Yorkers couldn’t possibly pay. At the same time, more and more apartments are going unused, not because nobody wants them – clearly there’s plenty of demand for housing – but because their owners are keeping them as pieds-a-terre, Airbnbs, investment properties, or warehoused rentals.

One example of this phenomenon, from Madden and Marcuse:

On January 16, 2015, a limited liability corporation named P89-90 bought a single penthouse apartment in Midtown Manhattan for $100,471,452.77 … the luxury tower that it tops, branded as One57, is not likely to be a particularly sociable environment. Chances are that none of the building’s ninety-two condominium units will be their owner’s sole residence. In fact, many of the apartments in One57 will remain empty. They will be held as investments or as vanity homes for people who do not lack for places to live. One57 is not high-rise housing so much as global wealth congealed into tower form.”

In recent years, the rental housing stock has become increasingly concentrated in larger and larger portfolios controlled by private equity firms and corporate landlords. In New York City, around 9 in 10 apartments are owned by corporate landlords. 

One important implication of this trend: the more organized and concentrated ownership is, the easier it is for landlords to collude and fix prices — a task made significantly easier due to the rise of algorithmically-informed price-setting. Services like the now infamous RealPage — which uses advanced data to help landlords charge the highest possible rents for their units — openly boast about their role in driving the staggering rent hikes of recent years. A ProPublica investigation revealed RealPage has “recommended that landlords in some cases accept a lower occupancy rate in order to raise rents and make more money.” RealPage and other similar services are a potent tool for cartel style market collusion, a fact which has not escaped the ire of the Department of Justice's antitrust lawyers. 

A common “pro-housing” argument is that increased supply gives renters more options, thus allowing us to play landlords off of eachother and secure lower rents. Again, this line of thinking ignores the sordid reality, which is that landlords will flex their class muscle to keep rents high — and that without organization, tenants have no power to contest their ever-worsening conditions. What good is a market equilibrium if the landlords are almost certain to collude, warehouse apartments and keep rents high regardless?

Landlord’s profit-maximizing behavior plainly highlights the irrationality endemic to capitalism. Well, let's amend that: it's quite rational for those who own the property. For the rest of us (the vast majority) — not so much. A system which distributes (and chooses not to distribute!) housing based on the profits that will accrue to its owners is a system which is incapable of ending the precarity which defines our lives as tenants. 

The “housing crisis” is not so much a crisis as a permanent feature of urban capitalism, an unavoidable consequence of developing and distributing housing as a commodity to line the pockets of the few, rather than organizing housing around the social need for shelter. Framing our experience as a “crisis” insinuates that it is an aberration from the norm, an aberration which can be “solved” with policy fixes, new legal protections and, most insidiously, the market. The system is not in crisis; the crisis is the system!

It's all about class power? Always has been.

What we’re observing here is the all too familiar dissonance between capitalism’s economic theories and its economic realities. Despite what free-market proselytizers and “market optimists” alike want us to believe (as if there’s any functional difference between the two), capitalism is a system whose outcomes are ultimately determined by the balance of class power. Landlords, developers and financiers, who are single-mindedly driven by a desire to extract as much profit as possible out of tenants, do not submit meekly to the “laws” of supply and demand. 

To imagine that rent prices hinge on supply and demand rather than class power is completely ahistorical. Time and time again, capitalism has demonstrated an inherent tendency towards monopoly, cynical market manipulation and organized class warfare. 

Understanding the balance of class power as the condition of our exploitation is simultaneously key to grasping that our exploitation can only be limited and abolished through the exercise of our own class power as tenants. We’re engaged in a class war which only one side is consciously fighting. Our choice as tenants is whether or not we want to fight back.

If the future came on a platter…

The common sense which commands our collective reflexes does not permit us to think of revolution. After all, “it is easier to imagine the end of the world than the end of capitalism.”

So it’s natural that we’re derided as unrealistic for striving towards the abolition of the landlord class, and by extension the abolition of capitalism — but are we the unrealistic ones?

Our critics (liberals!) — on all issues, not just housing; think climate change, for instance — position themselves as “realistic” for arguing that handing the reins to organized capital will alleviate the conditions of the working class. Don’t we have hundreds of years of experience telling us that the exact opposite will happen? We can look to our cities as they are right now to understand that control of our buildings and neighborhoods by profit-motivated landlords, financiers and developers is a disastrous arrangement.

There’s nothing realistic about giving capital the freedom to roam where it wants and praying that it will magically change course and defy its five hundred year history of ravaging indigenous and working class communities for profit.

It's nonsense. Don’t listen to these people — they are the ones being unrealistic. 

And yes, to organize towards community control of our buildings and neighborhoods is a tremendous, daunting task. But let’s remember that we don’t organize simply because we believe in a political program. To struggle, to think — to really think! — to learn, is nothing less than the process of being alive. To not be in the struggle is a much more demoralizing proposition.

So let's get to it! Landlords and developers, and the financiers that back them, are tremendously well organized. To beat them, we have to turn to the only method by which we have historically won: that is, through our militant organization. If history has taught us anything, it's that we can only win by out-organizing our class enemies. 

Check out the Autonomous Tenants Union Network to see if there’s an existing organization in your area. In New York City: the Crown Heights Tenant Union, the Ridgewood Tenants Union, Brooklyn Eviction Defense and Tenant Union Flatbush; nationwide, the aforementioned Los Angeles Tenants Union; Tenants and Neighborhood Council (TANC) in the Bay Area; Stomp Out Slumlords in DC; and many more are doing incredible, principled work. 

You can find some resources and thoughtful reflections on tenant organizing here, here, here, here, here and here.

I like to think of this essay as a small contribution to uncovering the shape of the conjuncture, as Stuart Hall would call it. There is, of course, much more to be uncovered (and much more that has already been uncovered!), such as: the relation of tenants in the imperial core to the global anti-imperialist movement; how the tenant movement can resist settler-colonialism and aid the struggle for indigenous sovereignty; feminism and the tenant movement; the homeless industrial complex; and the ideology of homeownership, to name a few.

None of this work is easy. But, as Eduardo Galeano reminds us: “If the future came on a platter, it would not be of this world.”

Currency Crisis In The West (1965)

By Hsiang Chung

Republished from Black Agenda Report.

Editor’s Note from BAR: This 1965 essay appeared in Kwame Nkrumah’s journal, The Spark. If it were around today, The Spark would probably carry a warning in the US that it was “state-affiliated media.” Its editors probably wouldn’t care. The Spark was published by Kwame Nkrumah’s Bureau of African Affairs and its explicit mission was to build socialism in Ghana and to aid in fomenting working-class revolution throughout Africa.

The Spark’s content reflected this mission. The weekly paper ran essays articulating the theory of Nkrumaism and published detailed analysis of neocolonialism and imperialism, and of socialism and development. It considered the class struggle in Africa and examined anti-colonial struggles across the continent. In its pages appeared statements of solidarity with Cuba, Algeria, and Black America, and contributions from Amilcar Cabral, Fidel Castro, and Che Guevera. When W.E.B. Du Bois passed away in 1963, an issue appeared in his honor.

For the US State Department, The Spark represented a dangerous tendency within Nkrumah’s Ghana.  In January, 1964 the US Central Intelligence Agency issued a classified report titled “The Leftward Trend in Ghana .” The report noted that the US Embassy in Ghana had characterized a recent speech of Nkrumah’s “as perhaps his most extreme anticapitalist and revolutionary performance.” The speech, according to the CIA, “included [Nkrumah’s] first known specific use of such phrases as ‘class interests’ and ‘class politics,’” it criticized the US “as the citadel of reactionary opposition to progressive forces everywhere,” and it aligned Ghana with “the international ‘socialist’ fraternity.” “Subsequently,” the report continued, “[Nkrumah]  has increasingly tended to mouth the Communist-derived jargon appearing continually in The Spark.”

In their summary of the situation in Ghana, the CIA concluded that, “Barring a successful coup against his regime, it will probably be increasingly difficult for the West to maintain an effective presence in Ghana.”

Nkrumah was overthrown by a CIA-backed military on February 24, 1966.

Below we reprint an article from The Spark titled “Currency Crisis in the West.” Its author is Hsiang Chung, a Chinese economist of whom, we admit, we know little more than his name. Even so, the essay has a crystalline analysis of how monetary policy has been used as a tool of imperial and neocolonial rule. Moreover, in charting the historical reasons for the rise of the dollar’s global supremacy in the twentieth century, it establishes the historical conditions precipitating the dollar’s imminent twenty-first century fall. This is being republished for both historical perspective and relative analysis to the current state of the US dollar. It is important to note that much has changed since this was written in 1965, most notably the varying methods of imperialism/colonialism that have developed by the US and West, the fall of the USSR, and the abandoning the gold standard in 1971.

***

Hsiang Chung, “Currency Crisis in the West,” The Spark: A Socialist Weekly of the African Revolution, January 29, 1965.

The imperialist scramble for world domination is usually marked by a struggle for financial supremacy, for monetary policy is one of the heavy weapons of the imperialist countries in their drive, for expansion--a weapon they use to strangle their rivals and extend their spheres of influence.

In the struggle for monetary supremacy, an imperialist country invariably uses its political and economic power to establish a monetary bloc in which its own currency is made to take a leading position while the currencies of its colonies and dependencies as well as other states associated with it are reduced to a subordinate status.

It has to link to currencies of the monetary bloc members with its own, and at the same time to make them keep their gold and foreign exchange reserves in its central bank to be used by them for “unlimited buying and selling” on foreign exchange market at fixed rates. Consequently, its commodity in capital exports will not have to suffer from the fluctuation of the currency of the monetary bloc members and it will not have to pay more for raw material imports because of the devaluation of its own currency.

Moreover, since the gold and foreign exchange reserves of its monetary bloc members are deposited in its own central exploitation, and this leads to the formation of a financial centre within its own sphere of influence over which it is able to establish its financial supremacy. That is why currency warfare in capitalist international finance is an important means in the imperialist scramble for markets, outlets, for investment and sources for raw materials, as well as an indispensable factor in their constant redivision of the capital of this world.

The Monetary System Crisis Sharpened

The deepening of the general crisis of capitalism, especially the emergence of the crisis in the capitalist monetary system, has intensified the monetary warfare among the imperialist powers. As a result of the world economic crisis of 1929–33, normal financial relations among the capitalist countries were disrupted as never before; the gold standard completely collapsed, and the monetary system of the capitalist countries became chronically unstable.

From that time onwards, in their efforts to maintain currency stability, and to ward off the crisis in the monetary system, monopoly capitalist groups in the imperialist countries were compelled to resort to government intervention on a larger scale than before and adopt such measures in the field of international finance as  moratoria on foreign debts currency depreciation, foreign exchange  restrictions and control etc., in order to consolidate their position in the better struggle for markets and spheres of influence. However, all the steps, which were designed to shift the crisis onto others failed to extricate the imperialists from their plight, but instead made the struggle still sharper and more complicated.

Following the end of World War II, as a result of the formation of the socialist camp and the upsurge of the national liberation movement the areas dominated or exploited by the imperialist countries have become smaller and smaller. In this predicament, the inter-imperialist struggle for markets and spheres of influence has become more acute and currency has been used on a still larger scale as an instrument in defeating their adversaries. Not only have they subjected the currencies of their colonies and dependencies to their own as in the past; they have also exerted great efforts to make their own currency the dominant one within the shrinking imperialist camp. At the same time, the deepening of the general crisis of capitalism has been accomplished by an intensified crisis in the monetary system, and the imperialist countries have been forced to take further steps to intervene in various forms in the field of international finance. However, whenever they are taken by the strong to bully the weak or the weak to counteract an adversary’s pressure, the steps are bound to aggravate the imperialist monetary struggle, and make it more severe than was the case before World War II.

Domination vs Independence

The characteristic of postwar inter-imperialist relations is that US imperialism has increasingly endeavored to consolidate and extend its dominant position while the other imperialist powers refused to reconcile themselves to US control from which they have done all they can to free themselves. This rivalry between US imperialism and the other imperialist powers struggle between domination and independence— is also reflected in capitalist, world finance.

During World War II, US imperialism amassed enormous wealth and greatly expanded  its productive capacity and export trade. In the early post-war years, Washington took advantage of the temporary disappearances of three fascist countries, Germany, Italy, and Japan from the capitalist world arena of competition and of the heavy destruction suffered by the two old imperialist powers, Britain and France; it went all out for economic expansion abroad and consequently had a huge surplus in its balance of international payments and piled up vast gold reserves. In 1938 the US gold reserves amounted to $14,594 million or 56.1 per cent of the gold reserves of the capitalist world. In 1948, they jumped to $24,399 million, or 70.3 per cent of the capitalist world’s total. During this period, the other capitalist countries incurred huge deficits in their international accounts with the United States, resulting in a serious “dollar shortage” and massive gold outflows to the United States.

In the decade between 1938 and 1948, the gold reserves of Britain, the sterling area and the West European countries dropped from $9,511 million to $5,707 million, and their share of the capitalist world's gold reserves fell from 36.6 per cent to 16.4 per cent. At that time the disruption of domestic production, the heavy increases in budgetary deficits, and the impact of deficits in the payment of international payments brought about serious currency depreciation in most of the capitalist countries except the United States. Under the circumstances, the governments of these countries were constrained to their foreign exchange restrictions and controls to achieve, and to stabilize the value of their currencies by artificial means. The result was that they’re currencies became “soft”, i.e., could not be freely converted into other foreign currencies, they were in no position to compete with the dollar, a hard currency which was freely convertible.

Shift in Economic Power

This shift in economic power was much to the advantage of US imperialism in its greedy bid for world leadership. It has made every effort to form a big dollar bloc to dovetail plans to build an unprecedentedly big empire in the world. In addition to adopting political, military, economic and other measures, US imperialism, in order to fulfill this grandiose plan, must take the following steps in the monetary field. On the one hand, it needs to consolidate the external value of the dollar and maintain its “free convertibility” so that fixed exchange rate between the dollar and other currencies can be preserved, and the dollar can have the same status as gold in the capitalist world's current reserves.

This would provide favourable conditions for New York to become the capitalist world’s sole international financial centre.

On the other measures both at home, and in the currency blocs, they control in order to check economic penetration by their competitors. US imperialism therefore found it necessary to do the utmost to intervene in their international financial policies and foreign exchange systems, thus enabling it to maintain normal trade relations with them, and paying the way for its further economic expansion.

In effect, this US imperialist rapid plan is nothing but a refurnished version of the currency blocs established by Britain, France, and other old imperialist powers in their colonies and spheres of influence. But in order to ward off the strong opposition of other imperialists, the United States had to resort to more covert and slyer tactics in pushing forward this plan in the capitalist world.

Price of Gold Kept Down

In the first place, relying on its substantial gold reserves, US imperialism artificially kept down the price of gold in its dealings with other governments or their central banks. It is common knowledge that as early as 1934 the US government prescribed the external value of the dollar, i.e., the parity between the dollar and gold, at $35 an ounce. But since the latter part of the 1930s and particularly since World War II, the value of the dollar has been frequently devalued internally because of inflation. In 1948 the purchasing power of the dollar was only 57.8 per cent of what it was in 1939. In 1963 it further dropped to 44 per cent. In order to stabilize the external value of the dollar by artificial means, the U.S. government, irrespective of the frequent devaluation of the dollar internally, has always exchanged it for gold at the official rate of $35 percent ounce in its dealings with other countries. And so the external value of the dollar has long been out of tune with the extent of its internal devaluation while the price of gold has been greatly kept down.

Other capitalist countries were then suffering from a widespread “dollar shortage” and they virtually had very little or no dollars with which to buy US gold. Therefore, keeping the price of gold down actually meant compelling other capitalist countries to sell gold cheaply to the United States in order to make good their dollar deficits. This increased the surplus in the US balance of international payments, and gave it the opportunity to rake in gold at a low price made it difficult for the latter to relieve their “dollar shortage”. And this also became a pressure under which they had to accept the Marshall plan and other types of “aid,” and thus subject themselves to enslavement by US imperialism.

Another major aim of US imperialism in keeping down the price of gold is to irrigate the same role as gold to the dollar, whose external value was artificially stabilized, and serving as a world currency. Since the currencies of most other capitalist countries were unstable and their foreign exchange reserves, along with, and in preference to pound sterling. This facilitated US imperialism control of their currencies in one way or another, and it’s becoming the biggest International exploiter in capitalist world finance.

Washington’s Building Tactics

In the second place, in the early post-war years, Washington spread such false ideas as “the elimination of foreign exchange control,” “the stabilization of exchange rates,” and “avoidance of competitive currency depreciation.” These were designed to compel other countries to abandon their foreign exchange restrictions and controls, and relatively stabilize their exchange rates in a way advantageous to the United States. It pushed this policy in order to ensure that the proceeds of America commodity exports and the remittance to the United States of profits from overseas investment may be protected from other countries’ foreign exchange restrictions.

It is true that US imperialism, at least on the surface, has not imposed downright control over the currencies of its “allies.” In reality, however, it did all it could to achieve this purpose by bullying tactics and cajolement. As mentioned above, Washington compelled the recipients of its “aid“ to accept such terms as the introduction of free convertibility within a certain period of time and the scrapping of their foreign exchange controls and restrictions.

A notable example of this took place when Britain received a big US loan amounting to $3,750 million in 1945 and two years later was compelled to introduce free convertibility for the pound sterling, which lasted for only five weeks. Of great importance is the fact that the International Monetary Fund set up in the early postwar years— a major instrument of US imperialism in the international monetary field— dangled the bait of short term loans before member states in order to induce them to accept conditions involving the loss of national sovereignty. These included the abolition of foreign exchange, controls and restrictions, the definition of the foreign exchange value of a currency in terms of the dollar containing a specific weight of gold and the obligation to obtain the funds agreement to specific changes in foreign exchange rates.

Struggle Between Dollar and Pound

All these measures were naturally resented by other imperialist powers. However, West Germany and Japan were then dominated by Washington, and it was on the basis of formulas prepared by the US government that the exchange rates for the West German mark and the Japanese yen were established. Inflation of considerably serious proportions and a rapid deterioration in the balance of international payments overtook France and Italy; the franc and the lira were frequently devalued; it was difficult for them to compete with the dollar. Only the pound sterling could initiate limited counter- offensives against it. Although Britain’s power has declined since World War II, it still has the backing of the sterling area in international finance, the pound remains the reserve currency of sterling area countries and a number of other capitalist countries in the world network of overseas banks, which was set up by Britain in the last century, retains considerable influence. In these circumstances, the struggle between the dollar and the pound was naturally the most prominent one in the imperialist currency warfare.

The comprehensive system of foreign exchange restrictions and control set up by Britain in the sterling area was a powerful fulcrum strengthening British imperialist exploitation of the commonwealth countries and checking US economic penetration. And it was a serious handicap to US imperialist expansion in the capitalist world.

In the first few years since World War II, by means of loans, “aid” and pressure by different US controlled international organizations, Washington devised every possible means to compel Britain to open the door to the sterling area, and restore the free convertibility of the pound so as to pave the way for the control of the whole sterling area, including Britain itself. For a time British imperialism refused to take orders from Washington and adopted delaying tactics. But in 1949 a pound was devalued by 30.5 per cent against the dollar, followed by a corresponding currency to valuation by 35 other capitalist countries–to a large extent the result of pressure from Washington.

Nevertheless, Britain and other imperialist powers, wherever possible, dealt Washington’s high-handed policy, a rebuff. The sterling area and the currency blocs of other imperialist countries—such as the franc bloc—clung stubbornly to their spheres of influence. Moreover, on the question of the price of gold, because gold produced in the sterling area makes up more than 70 per cent of the total annual production of the capitalist world, Britain and South Africa have more than once battled for a rise in the gold price as a countermeasure to US control. They eventually succeeded in wrestling some concessions from Washington and were permitted to sell their gold for industrial purposes on the free market at a higher price than the official US price of $35 per ounce. The International Monetary Fund's demand for the abolition of foreign exchange controls, and for the institution of a fixed parity between the dollar and other currencies were ignored by many countries. France and Italy, for instance, did not institute fixed exchange rates until the mid-1950s. This shows that, despite Washington’s desperate efforts to put the capitalist world's monetary system under its control, other imperialist powers have been unwilling to accept permanent subordination, they have exerted every effort to free themselves from the claws of the dollar. With the shift in the balance of forces between the United States and other imperialist powers, both Washington’s efforts at domination in the monetary field, and the other imperialist’s resistance are growing more intense.

No More Dollar Dominance

With the advent of the 1950s and the aggravation of the uneven development of capitalism, new changes have taken place in the balance of forces among the imperialist countries. Propped up by the United States, West Germany, Italy, and Japan, have recovered from their position as defeated countries. The power of France has steadily increased, enabling it gradually to speak on equal terms with the United States. Although it keeps getting weaker, Britain too has no desire to be at the mercy of Washington. US dominance, which was attained during and immediately after World War II, has begun to falter.  

This shift in the balance of forces which is unfavorable to US imperialism is also reflected in international finance. After the war of aggression against Korea broke out in 1950, deficits began to appear in the US balance of payments and outflow of gold started, because its policies of war and aggression made it increasingly difficult for its trade surplus and proceeds from overseas investment to meet its huge military expenditures, foreign “aid” commitments and private capital export.

A similar situation recurred during US economic crisis of 1953–54. After 1956, taking advantage of the Anglo-French aggression against Egypt, the United States sold a large amount of oil and cotton to Western Europe, and this helped to bring about a turn for the better in the US balance of payments. However, from 1950 to 1957, the US gold flow to other countries amounted to $1,700 million. Added to this were mounting short term debts, and the annual rate of deficit in its balance of payments averaged about $1,200 million. During the same period the gold reserves of other capitalist countries increased by $3,700 million and their dollar reserves by $6,400 million. By the 1950s, the widespread “dollar shortage” of the early posts were years had virtually become a thing of the past.

A New State

After 1958, a new state was reached in the struggle between the United States and other imperialist powers to strengthen their respective positions in world finance. On the one hand, as a result of its intensified policies of war and aggression, US imperialism had to spend on an average more than $10,000 million a year for its overseas military expenditures, foreign “aid” and private capital export. This led to an increase in the serious dollar crisis, which was manifested in the form of balance of payment deficits, and of gold outflows. The dollar crisis and the recurrent economic crisis erupted either simultaneously or alternately.

Whatever methods it uses, it is impossible for US imperialism to prevent a continual deterioration in the position of the dollar. On the other hand, with the rapid growth in their political and economic power, the tremendous improvement in the balance of payment, and the big increase in their gold reserves, other major capitalist countries, and particularly several of the Common Market Six with France and West Germany as their nucleus, were able greatly to strengthen their currencies on the international finance market. From 1958 to 1962 the gold flowing from the United States to other countries totaled $6,800 million. These rises in the short term debts owed to other countries made for an average annual rate of deficits of about $3,000 million from 1950 to 1957. At the same time, the increase in the gold reserves of other capitalist countries amounted to $8,700 million. If increases in foreign exchange holdings are added to this the total increase in their gold and foreign exchange reserves during the period was $14,500 million. Most of these increases went to West European countries. France’s increases amounted to $3,400 million, Italy’s $2,200 million, and West Germany’s $1700 million. Next came Britain, the Netherlands and Belgium.

Dollar Crisis— Incurable Disease

By 1963, the incurable disease of the dollar crisis remained serious. The deficit in the US balance of payments in that year still stood at $3,000 million. At the end of December, its gold and foreign exchange reserves totaled $32,179 million, of which gold accounted for $19,790.million, or 47% of the capitalist world's total. Thus US gold reserves are far below their pre-war level while those of the West European countries are far above it.

Five Points About the Climate Crisis

[Pictured: Deforesting in Tasmania, Australia. Photo by Matt Palmer]

By Jerome Small

Republished from Red Flag.

This article is based on a speech given by Jerome Small, Victorian Socialists Northern Metro candidate in the upcoming state election, at the 30 July United Climate Rally in Melbourne.

Point number one is acknowledging whose land we’re on: the First Nations people, the Wurundjeri people and the entire Kulin nations, and the Aboriginal people around this state and around this country.  More than 200 years ago, these First People had a social system imposed on them that turned land into a commodity, that turned human beings into a commodity, that turned everything in the world into a commodity to be bought and sold for a profit.

That social system decided very quickly that it was more profitable to run sheep on this part of the world than to let human beings live on it as they had always done. And the genocide ensued. That social system continues to decide that it’s more profitable to rip coal and gas from the ground than to let Aboriginal people live on their country. That dispossession continues to this day.

So it should be both an inspiration and an education for all of us that, despite everything that that social system has visited on First Nations people, they are still here and still fighting for justice. That should be a reminder to all of us that sometimes the very survival of people depends on resistance, depends on fighting, depends on organising.

That social system is still with us, of course, and still turning the planet and everything on it into a commodity, regardless of the consequences. Which gets to my second point—that capitalism has brought us to a dire situation.

We’ve heard about wildfires in countries, like the UK and Poland, that are not accustomed to seeing wildfires, due to the massive heatwave in Europe. We know a bit about this from the Australian bushfire summer of 2019-20. It’s not hard to find accounts of firefighters attempting to fight flames 70 metres tall. Next time you’re in the city, find a fifteen-storey building. That’s 70 metres, give or take. It’s terrifying. We’re talking about flames that high—in some cases twice as high, up to 150 metres.

That’s not the scariest thing, though. The scariest thing isn’t the 33 people who died from the flames that summer, or the 400 people who died from the smoke, or the 1 billion animals that died from the fire and the smoke and the after-effects. The scariest thing isn’t that 7 percent of New South Wales, an area bigger than several European countries, burned in that year.

The scariest thing is that, according to the Bureau of Meteorology and the CSIRO, that year of 2019—the hottest year ever recorded in Australia—will be the average temperature of a year in Australia once we get 1.5 degrees of global warming. All those flames, all that death, all that ash—they’re saying will be our average temperature.

And Labor is looking at 1.5 degrees out its rear vision mirror as it zooms past, on its planet-incinerating 43 percent target. This gets to my third point: Labor and fossil fuels.

It’s hard to picture the scale of the fossil fuel export projects that Labor is prepared to approve.

I went to the Latrobe Valley last week. As you enter the town of Morwell, you can see on your right-hand side a massive pit 100 metres deep and the size of the Melbourne CBD, all the way from Docklands through to the MCG. It was an open-cut coal mine that for 60 years fed Australia’s highest emitting power station, Hazelwood. The best estimate I’ve seen is that all of the coal fed into that power station produced 400 million tonnes of CO2. A huge contribution to global heating.

But the Scarborough gas project in Western Australia, which Labor is prepared to sign off on, will release 1.4 billion tonnes of CO2— three and a half times the amount that came from that enormous pit next to Morwell in the Latrobe Valley. Then there’s the Beetaloo project, which is a similar size—and that’s just the first of the massive gas fracking projects that Labor is prepared to endorse in the Northern Territory. Add Narrabri in NSW. Add Beach Energy down in the Otway Basin in Victoria. Thank you, Daniel Andrews, for your contribution to runaway heating.

That tells us everything we need to know about where we’re headed under Labor. They have no intention of interfering with a social system that turns everything into a commodity to be bought and sold for profit, regardless of consequences.

This gets me to the fourth point—what have we got going for us, in the face of all this? In my opinion, quite a bit.

We’ve got the huge majority of humanity who do not make billion-dollar profits from cooking the planet.

We’ve got many people in the Latrobe Valley. There’s a stereotype that the coal regions are wall to wall coal-loving blue-collar workers. That’s bullshit, and it’s an insult to say it. You go to the Latrobe Valley and, just like any other part of the country or the world, there’s a significant argument taking place. There are people in that community—and in those power stations, in fact—making arguments about the need to get out of fossil fuels as soon as possible. That’s something that we have going for us.

We’ve got the potential for mass movements like what the climate strikers showed us in 2019 around the world: some of the biggest protests that have happened in this town for a hell of a long time. We’ve got that going for us.

We’ve got civil disobedience going for us. Whether it’s Extinction Rebellion, whether it’s Blockade IMARC, whether it’s Blockade Australia, we’re going to need a shit ton more of that.

We’ve got the truth going for us—but the truth is never going to be enough. We need organisation to turn all of that into a mass movement.

One thing that we also need, if our movement is going to succeed, is radical politics. That is my final point. That’s something that a lot of people here from different perspectives share. And that’s something that the Victorian Socialists are very much building in the few months ahead in the election campaign.

Yes, we’ll be talking about reversing privatisations. Yes, we’ll be talking about zero-emissions electricity grids by 2030 and a zero-carbon economy by 2035—because I think that’s the only thing that we can be talking about if we’re serious about stopping the temperature rising far past 2019.

We’ll also be talking about a vision of a society that is not a social system that turns everything into a commodity to be bought and sold for a profit, even as the bodies pile high.

We’ll be talking about a vision of a society founded on solidarity and cooperation, which comes out of the struggles of today, and which doesn’t rely on billion-dollar corporations running our energy system and running the world. A society that says to those corporations: Do not pass go, do not collect $11.7 billion from the federal government this year. Your time is up. You’re done. Get out of the way.

You can take your 43 percent greenwashing target, you can take your coal and gas, and you can go to hell with them because we’re taking our world back. We’ll be talking about ordinary people making history over the next few months. And organising to do just that.

Russia and the Ukraine Crisis: The Eurasian Project in Conflict with the Triad Imperialist Policies (2014)

By Samir Amin

Republished from Monthly Review.

This was originally written by Samir Amin in 2014, at the time of the Maidan Coup in 2014. It provides insight into today’s conflict in the region.

The current global stage is dominated by the attempt of historical centers of imperialism (the U.S., Western and Central Europe, Japan—hereafter called “the Triad”) to maintain their exclusive control over the planet through a combination of:

  1. so-called neo-liberal economic globalization policies allowing financial transnational capital of the Triad to decide alone on all issues in their exclusive interests;

  2. the military control of the planet by the U.S. and its subordinate allies (NATO and Japan) in order to annihilate any attempt by any country not of the Triad to move out from under their yoke.

In that respect all countries of the world not of the Triad are enemies or potential enemies, except those who accept complete submission to the economic and political strategy of the Triad—such as the two new “democratic republics” of Saudi Arabia and Qatar!  The so-called “international community” to which the Western medias refer continuously is indeed reduced to the G7 plus Saudi Arabia and Qatar.  Any other country, even when its government is currently aligned with the Triad, is a potential enemy since the peoples of those countries may reject that submission.

2. In that frame Russia is “an enemy.”

Whatever might be our assessment of what the Soviet Union was (“socialist” or something else), the Triad fought it simply because it was an attempt to develop independently of dominant capitalism/imperialism.

After the breakdown of the Soviet system, some people (in Russia in particular) thought that the “West” would not antagonize a “capitalist Russia”—just as Germany and Japan had “lost the war but won the peace.”  They forgot that the Western powers supported the reconstruction of the former fascist countries precisely to face the challenge of the independent policies of the Soviet Union.  Now, this challenge having disappeared, the target of the Triad is complete submission, to destroy the capacity of Russia to resist.

3. The current development of the Ukraine tragedy illustrates the reality of the strategic target of the Triad.

The Triad organized in Kiev what ought to be called a “Euro/Nazi putsch.”  To achieve their target (separating the historical twin sister nations—the Russian and the Ukrainian), they needed the support of local Nazis.

The rhetoric of the Western medias, claiming that the policies of the Triad aim at promoting democracy, is simply a lie.  Nowhere has the Triad promoted democracy.  On the contrary these policies have systematically been supporting the most anti-democratic (in some cases “fascist”) local forces.  Quasi-fascist in the former Yugoslavia—in Croatia and Kosovo—as well as in the Baltic states and Eastern Europe, Hungary for instance.  Eastern Europe has been “integrated” in the European Union not as equal partners, but as “semi-colonies” of major Western and Central European capitalist/imperialist powers.  The relation between West and East in the European system is in some degree similar to that which rules the relations between the U.S. and Latin America!  In the countries of the South the Triad supported the extreme anti-democratic forces such as, for instance, ultra-reactionary political Islam and, with their complicity, has destroyed societies; the cases of Iraq, Syria, Egypt, Libya illustrate these targets of the Triad imperialist project.

4. Therefore the policy of Russia (as developed by the administration of Putin) to resist the project of colonization of Ukraine (and of other countries of the former Soviet Union, in Transcaucasia and Central Asia) must be supported.  The Baltic states’ experience should not be repeated.  The target of constructing a “Eurasian” community, independent from the Triad and its subordinate European partners, is also to be supported.

But this positive Russian “international policy” is bound to fail if it is not supported by the Russian people.  And this support cannot be won on the exclusive basis of “nationalism,” even a positive progressive—not chauvinistic—brand of “nationalism,” a fortiori not by a “chauvinistic” Russian rhetoric.  Fascism in Ukraine cannot be challenged by Russian fascism.  The support can be won only if the internal economic and social policy pursued promotes the interests of the majority of the working people.

What do I mean by a “people-oriented” policy favoring the working classes?

Do I mean “socialism,” or even a nostalgia of the Soviet system?  This is not the place to re-assess the Soviet experience, in a few lines!  I shall only summarize my views in a few sentences.  The authentic Russian socialist revolution produced a state socialism which was the only possible first step toward socialism; after Stalin that state socialism moved towards becoming state capitalism (explaining the difference between the two concepts is important but not the subject of this short paper).  As of 1991 state capitalism was dismantled and replaced by “normal” capitalism based on private property, which, as in all countries of contemporary capitalism, is basically the property of financial monopolies, owned by the oligarchy (similar to, not different from, the oligarchies running capitalism in the Triad), many coming out of the former nomenklatura, and some newcomers.

The explosion of creative authentic democratic practices initiated by the Russian (October) revolution was subsequently tamed and replaced by an autocratic pattern of management of society, albeit granting social rights to the working classes.  This system led to massive depoliticization and was not protected from despotic and even criminal deviations.  The new pattern of savage capitalism is based on the continuation of depoliticization and the non-respect of democratic rights.

Such a system rules not only Russia, but all the other former Soviet republics.  Differences relate to the practice of the so-called “Western” electoral democracy, more effective in Ukraine, for instance, than in Russia.  Nonetheless this pattern of rule is not “democracy” but a farce compared to bourgeois democracy as it functioned at previous stages of capitalist development, including in the “traditional democracies” of the West, since real power is now restricted to the rule of monopolies and operates to their exclusive benefit.

A people-oriented policy implies therefore moving away, as much as possible, from the “liberal” recipe and the electoral masquerade associated with it, which claims to give legitimacy to regressive social policies.  I would suggest setting up in its place a brand of new state capitalism with a social dimension (I say social, not socialist).  That system would open the road to eventual advances toward a socialization of the management of the economy and therefore authentic new advances toward an invention of democracy responding to the challenges of a modern economy.

It is only if Russia moves along such lines that the current conflict between, on the one hand, the intended independent international policy of Moscow and, on the other hand, the pursuit of a reactionary social internal policy can be given a positive outcome.  Such a move is needed and possible: fragments of the political ruling class could align on such a program if popular mobilization and action promote it.  To the extent that similar advances are also carried out in Ukraine, Transcaucasia, and Central Asia, an authentic community of Eurasian nations can be established and become a powerful actor in the reconstruction of the world system.

5. Russian state power remaining within the strict limits of the neo-liberal recipe annihilates the chances of success of an independent foreign policy and the chances of Russia becoming a really emerging country acting as an important international actor.

Neo-liberalism can produce for Russia only a tragic economic and social regression, a pattern of “lumpen development” and a growing subordinate status in the global imperialist order.  Russia would provide to the Triad oil, gas, and some other natural resources; its industries would be reduced to the status of sub-contracting for the benefit of Western financial monopolies.

In such a position, which is not very far from that of Russia today in the global system, attempts to act independently in the international area will remain extremely fragile, threatened by “sanctions” which will strengthen the disastrous alignment of the ruling economic oligarchy to the demands of dominant monopolies of the Triad.  The current outflow of “Russian capital” associated with the Ukraine crisis illustrates the danger.  Re-establishing state control over the movements of capital is the only effective response to that danger.

Further Readings

Refinancing the Climate Crisis: The Disaster Politics of Climate Change and Datafication of Capital

By Julius Alexander McGee

As the climate crisis escalates, the contradictions of the nation-state as both a facilitator and regulator of capital become increasingly apparent. The increase of natural disasters sparked by global warming have produced civil unrest and calls for change to our current social structures. These calls for change include a Green New Deal; divestment from fossil fuel industries; and a redistribution of wealth, all of which threaten the existing mechanism of capital accumulation. In response, the state has turned to the disaster capitalist playbook, turning the risk of civil unrest into new modalities of capital accumulation that maintain the status quo. This includes the creation of new low carbon markets that recapitulate pre-existing modalities of capital accumulation[1]. Recent attempts by nation-states to mitigate global warming through the creation of low carbon markets reveal how the climate crisis is being used to facilitate the expansion of capital into markets of data accumulation. This expansion is characterized by a process where data is created, collected, and circulated to generate wealth. Specifically, data extracted from low carbon technology to improve operational efficiencies ultimately functions to increase overall energy demand, as vast quantities of electricity are necessary to store data on computer servers. Such processes, unfortunately, of course, serve to undermine climate mitigation efforts. Further, the datafication of capital enhances surveillance technology that is used to disenfranchise Black and Brown communities through enhanced policing. Police departments around the United States as well as the Immigration and Customs Enforcement (also known as ICE) are using data to target communities that are left most vulnerable by the unrest of the climate crisis[2]. Meanwhile, lithium, an alkali metal essential to many low-carbon technologies is mined at the expense of indigenous communities in South America in response to increased demand for electric vehicles (henceforth EVs) and large-scale batteries required to store deployable renewable energy. Simply put, these outcomes reveal the racial character of economic development and the tendency for capital to maintain the settler colonial project that established capitalism as a system of social organization. 

The automobile industry and widespread electrification were each established in the United States by dispossessing Black, Brown, and indigenous communities. The automobile industry thrived in the United States after the states demolished Black owned businesses and homes to build highways, and electrification was used to dispossess Black farmers of their wealth[3]. Moreover, the fossil fuels used to power automobiles and electricity are extracted on land dispossessed from indigenous people[4]. Indeed, it is increasingly clear that the continual dispossession and disenfranchisement of Black, Brown, and indigenous communities the world over is the true engine of capital accumulation. Specifically, by maintaining the historical expropriation of populations outside the terrain of capitalist production such that processes of uneven development favoring privileged Westerners might continue even in the face of socio-ecological instability. This paper intends to demonstrate how state policies aimed at creating low carbon markets are positioned as a reactionary force under disaster capitalism, which create new modalities of capital accumulation. I illustrate some of the key functions of this emergent phenomenon by examining the relationship between state sponsored low carbon markets and big data — a dynamic interplay that, despite appearances, fosters further dependence on fossil fuels through the dispossession of Black, Brown and indigenous communities around the world. 

First, I explore the crisis that facilitated the datafication of capital -- the dot-com bubble burst of the early 2000s. Second, I explore the implications of the crisis that facilitated the creation of low carbon markets -- the crisis of the fossil economy. Third, I examine how low carbon markets perpetuate the datafication of capital such that data supplants fossil fuels as an organizing structure of the system of capitalism. I conclude by exploring how the internal dynamics of capitalism as a system are maintained through the combination of these two wings of the high technology sector.      

 

The dot-com bubble burst and the rise of data as capital 

In the neoliberal era, modalities of capital accumulation that emerge in the wake of social, economic, and ecological crises (be they actual or perceived), facilitate the redistribution of wealth from poor to rich through combined and uneven development[5]. Abstractly, this usually means new capital is created for the wealthy to own, new revenue streams are created to preserve the status of the middle class (that simultaneously undermine their stability), and new mechanisms of extraction are created that target/create the dispossessed -- this is what Naomi Klein refers to as “disaster capitalism”. In essence, disaster capitalism recapitulates the dynamics of capital accumulation in response to crises by passing down the risk from the wealthy to the poor. 

In response to the dot-com bubble burst of 2000 as well as the events of September 11th, the Federal Reserve (the central banking system of the United States) continuously lowered interest rates for banks to help the United States’ economy emerge from a recession[6]. This created new capital in the form of AAA-rated mortgage-backed securities, because banks were incentivized to lend in order to generate new revenue from interest on loans[7]. Specifically, banks relied on individual home mortgages as a revenue stream by passing the Federal Reserve’s lower interest rates down to middle class homeowners who could take out cash from their homes through mortgage refinancing or cash-out refinancing to counteract stagnating wages. The federal reserve lowered interest to 1% in 2003, where it stayed for a year. In that time, inflation jumped from 1.9% to 3.3%. However, this proved to be extremely volatile due to lending practices that targeted Black and Brown communities in the United States with predatory loans. The subsequent Great Recession of 2008, disproportionately decimated wealth within Black and Brown communities through housing foreclosures, which redistributed wealth upwards, widening the racial wealth gap[8]. As Wang says, “these loans were not designed to offer a path to homeownership for Black and Brown borrowers; they were a way of converting risk into a source of revenue, with loans designed such that borrowers would ultimately be dispossessed of their homes”[9]. The transfer of capital from the productive sphere into the financial sector of the economy resulted in the financialization of capital via dispossession, breathing new life into the system through the construction of a new frontier for capital.  

The dot-com bubble burst of the early 2000s was a crisis created by failed attempts to transform the technology of the internet into capital. Internet companies during this time absorbed surplus from other markets through investments but failed to turn a profit, creating a crisis that was solved through finance capital and the transfer of risk from wealthy to poor. In the 1990s and early 2000s, internet companies merged with media corporations to create a new frontier for capital based on the increasing popularity of the internet. For example, the America Online (AOL) Time Warner merger, seen as the largest failed merger in history[10], represented a merger of the largest internet subscription company and one of the largest media corporations in the United States. However, this merger failed after dial-up internet was supplanted by broadband -- a much faster and more efficient way to use the internet. Broadband connections, which allowed for continuous use of the internet, helped usher in the Web 2.0 era. Unlike its predecessor, Web 2.0 is defined by internet companies, such as Google, whose value derives in part from its ability to manage large databases that are continuously produced by internet users[11]. Investments in internet technology in the form of data, as opposed to software tools such as internet browsers (e.g., Netscape), transforms data into a modality of capital accumulation akin to fossil fuels. Data, like fossil fuels, supplants pre-existing modalities of capital accumulation by refining their ability to produce a surplus. Thus, whereas the dot-com bubble burst was produced because the internet could not turn a profit after absorbing the surplus of other markets, Web 2.0 is defined by its ability to enhance the surplus produced by other markets by refining their mechanisms of capital accumulation. In the proceeding section I explore how fossil fuels as capital are based on the continued oppression of Black, Brown, and indigenous communities in order to demonstrate how data is supplanting fossil fuels as capital.

 

Fossil fuels and the cycle of dispossession

Fossil fuels have been an emergent feature of capital accumulation since they were first tied to human and land expropriation at the start of the industrial revolution in Great Britain. Factory owners in British towns used coal to power the steam engines that manufacture textiles from cotton, which was picked by enslaved Africans on land stolen from indigenous peoples. This tethered the consumption and production of coal to the expropriation of enslaved Africans and indigenous ecologies. As a result, coal, alongside enslaved Africans and indigenous ecosystems, became capital -- a resource that could be converted into surplus. Eventually, the steam engine gave the industrial bourgeoisie primacy over the plantation system that preceded it. Coal became the central driver of capital accumulation, which has borne an unsustainable system rife with contradictions. The natural economy, once based on human and land expropriation, gave way to the fossil economy, which uses fossil fuels to extract profit from human and ecological systems. 

Prior to the “industrial revolution” the contradictions of human and land expropriation were apparent in the multitude of slave revolts across the West Indies; in San Domingo, Jamaica, Barbados, etc. These rebellions were not simply slave revolts, they were outgrowths of the contradictions of the plantation system, which were apparent from the time they were established. As Ozuna writes, “centuries of sustained subversive activity prompted colonial authorities to rethink their relationship to the enslaved, and oftentimes, make concessions to preserve the body politic of coloniality”[12]. That is, the fossil economy emerged as a way to avert the crisis of the plantation system.   

The ability to manufacture cotton into textiles at an accelerating rate through the consistent use of coal, which was abundant on the island of Great Britain, became the precedent for colonial expansion in the United States, as well as the slave trade. Thus, human and land expropriation were fused to fossil fuel production and consumption. To put it succinctly, the fossil economy is an outgrowth of the plantation system, which automizes labor to efficiently accumulate capital. In supplanting the “natural economy” coal, and eventually petroleum, became emergent forms of capital accumulation that shifted the apparent contradictions of human and land expropriation.  

 The fossil economy has never transcended the contradictions embedded in human and land expropriation. The climate crisis consolidates the dialectical tension of fossil fuel production and the expropriation of humans, land, and human relationships with land. Likewise, the inability of nation-states to address the climate crisis is embedded in an unwillingness by ruling classes to address the core contradictions of capital accumulation. To address the climate crisis in a socially and ecologically sustainable way these contradictions must also be addressed. The climate crisis can be averted without addressing the contradictions of human and land expropriation, but such attempts will cost more in human life and ecological longevity by recapitulating human and land expropriation through the construction of new modalities of capital accumulation. In the same way that coal enabled the industrial bourgeoisie to expand capital accumulation while deepening its contradictions in centuries prior, data will recapitulate capitalism today. 

 

Low carbon markets as disaster capitalism

Low carbon markets, such as cap-and-trade, carbon taxes, and consumer tax rebates are market-based, regulatory, environmental policies that seek to disincentivize environmental degradation by establishing a competitive market for low carbon technology to compete with fossil fuel-based markets. The logic of these policies is to encourage fossil fuel companies to pay for the future ecological cost of their markets and to use the funds obtained from these policies to establish new markets that can replace fossil fuels. 

In the case of cap and trade (perhaps the most widely used strategy), a central authority allocates and sells permits to companies that emit CO2, which allows them to emit a predetermined amount of CO2 within a given period. Companies can buy and sell credits to emit CO2 on an open market, allowing companies that reduce emissions to profit from companies’ that do not. This approach was first established over thirty years ago in the United States to phase out lead in gasoline, and sulfur dioxide emissions from power plants that resulted in acid rain[13]. In 2003, the European Union adopted a cap-and-trade approach to CO2 emissions to reach emission reduction goals established during the Kyoto Protocol. Since then, more than 40 governments have adopted cap-and-trade policies aimed at reducing CO2 emissions while introducing minimal disruption to dominant economic processes[14]

If we accept the reality that fossil fuels were used to stave off the crisis of the plantation system and maintain capital accumulation via expropriation of human and ecological processes, then it points to the possibility that any new energy source created to maintain capitalism as a system will recapitulate the human and ecological expropriation that is foundational to the system. Thus, economic policies that facilitate the construction of low carbon markets, and that do not question the emergent character of fossil fuels under capitalism, invariably create new frontiers for capital accumulation. Opening such frontiers has been a primary role of the state under capitalism. 

The abolition of enslavement by nation-states across the capitalist system aided in efforts to stave off the crisis of the plantation economy by alleviating the political and ecological tension the slave trade created. Nonetheless, many nation-states continued to expropriate formerly enslaved Africans by forcing them into labor conditions that were conducive to the overarching dynamics of capitalism[15]. Further, other forms of expropriation (e.g., the coolie trade) in newly established colonies within Southeast Asia were made possible by and undergirded the technology produced via the fossil economy. Thus, similar to how capitalism recapitulated its internal dynamics following abolition, it recapitulates its internal dynamics in its efforts to transition off of fossil fuels.   

 This plays into what Naomi Klein termed the politics of disaster capitalism[16]. Under the impetus of averting a climate catastrophe, climate mitigation policies allow industries to profit from the perceived disasters that will be caused by the climate crisis. While the climate crisis is no doubt a real threat to life on this planet, the new orchestrators of disaster capitalism have successfully commodified climate change in perception and solution. The perception is commodified through the implicit narrative that the market is the only solution to a crisis of its own making. Sustainable energy companies, like Tesla Motors, suggest that they have proved “doubters” wrong by producing electric vehicles that perform better than their gasoline counterparts, implying that the only obstacle in the way of addressing the vehicle market’s contribution to the climate crisis is the vehicles themselves. This feeds into the tautological logic used to commodify the solution, which assumes that the market simply needs to reduce CO2 emissions and, because electric vehicles are less CO2 intensive than their gasoline counterparts, they result in less CO2 emissions overall. Nonetheless, because the market operates under the logic of capital accumulation, companies that profit from the disaster playbook are incentivized to create more capital with their surplus, and companies create this surplus capital through datafication.           

 

The datafication of capital

Data operating as capital has three fundamental components that allow it to operate as a distinct form of capital that is dialectically bound to broader systems of exchange. (1) As capital, data is valuable and value-creating; (2) data collection has a pervasive, powerful influence over how businesses and governments behave; (3) data systems are rife with relations of inequity, extraction, and exploitation[17]. Like other forms of capital, data’s value derives from its ability to create a market irrespective of its utility. The creation of data hinges on its potential to generate future profits, and not on its immediate usefulness. As such, the goal of this section is to establish how data is transformed into capital, not how it is used by any particular firm or institution.  

The disaster politics of the climate crisis are similar in character to the tactics used by Wall Street financiers in the wake of financial crises. However, in addition to using crises as a launching pad for capitalist plunder, the orchestrators of the disaster politics of the climate crisis take advantage of the groundwork laid by finance capital. This is best exemplified in the ascendency of Elon Musk, a Silicon Valley entrepreneur who rose to prominence through an unregulated data-driven financial tool, and subsequently became one of the world’s richest people, in part through his companies’ ability to transform the shock of the climate crisis into an endless opportunity for data capital accumulation.

In 1999 Musk co-founded X.com, one of the first online payment systems. It later merged with Confinity Inc. to become PayPal, which is one of the largest online payment platforms in the world today. Similar to other tech companies from Silicon Valley, such as Uber, PayPal functions as a deregulated variant of a pre-existing market. Musk and others recognized the “inefficiency” of checks and money orders used to process online transactions. Online payment platforms bypassed regulations applied to banks when processing payments and led to these inefficiencies; PayPal created a new payment system that regulated itself based on data instead of bureaucracy. 

In many respects PayPal is a digital bank whose main activity is in data instead of finance. PayPal claims that the data it collects is used to increase the security of its transaction, allowing money transfers to occur faster and with more convenience[18]. PayPal obtains its revenue through processing customer transactions and value-added services, such as capital loans. Online payment platforms such as PayPal are increasingly blurring the lines between retail and investment banking, again. For example, the loans that PayPal distributes to businesses are based on PayPal transactions, which are enhanced by PayPal’s data collection techniques. Thus, instead of accumulating wealth from financial instruments, PayPal accumulates wealth from the data it obtains from transactions, which it uses to finance more businesses and expand the number of consumer transactions it processes. This reality on its own has numerous implications for the climate crisis, as data centers, which store data at an exponential rate, rely on fossil fuel energy to operate[19] -- a fact that we will return to later. 

Online payment platforms have also become the shadow benefactors of financial deregulations. For example, the repeal of Obama-era financial regulations in 2016 (installed in the wake of the 2008 financial crisis) that required financial institutions to disclose fees and protections against fraudulent charges benefited online payment platforms who were also subject to these regulations until 2016[20]. Here one can see the interest of data and finance aligning around market deregulation. As Sadowski writes, “Like finance, data is now governed as an engine of growth. If financial firms are free to shuttle capital from country to country, then similarly technology corporations must also be free to store and sell data wherever they want.” This is an expansion of the neoliberal project that began decades ago. 

Data, like finance, is being used as a transnational modality of capital accumulation that transforms the role of the nation-state in relation to capital. Similar to how the state became a “lender of last resort, responsible for providing liquidity at short notice”[21] to encourage finance capital, the nation-state is facilitating the rise of data capital through tax-credits, rebates, and cap and trade. To be clear, at the end of the day the state is merely supporting long standing markets of capital accumulation, such as transportation and electricity, by aiding their efforts to create capital from data. Moreover, the state’s encouragement of data capital’s accumulation is increasingly occurring under the veneer of efforts to mitigate global warming.    

 

Bitcoin’s legacy of expropriation and the climate crisis

After his departure from PayPal Elon Musk founded Tesla, an electric vehicle and clean energy company, in 2003. As a company, Tesla manufactures and sells electric cars, battery energy storage systems, solar panels, and solar roof tiles. However, Tesla’s profits derive from more than just the sale of its products. For example, in the first quarter of 2021 the bulk of Tesla’s profits came from the sales of emissions credits to other automakers, and sale of its bitcoin holdings[22]. This represents the new reality created through the disaster politics of the climate crisis, which merges financial speculation and data capital. 

Carbon credits sold by Tesla to other auto manufacturers, who would otherwise incur fines, allow Tesla to profit from environmental degradation. This is the goal of policies such as cap and trade, as Tesla is profiting from the production and consumption of its low-carbon commodities, which in theory should facilitate the rise of low-carbon markets at the expense of fossil fuel-intensive companies. In addition to cap and trade policies, Tesla benefits from a number of tax credits and rebates that exist across the United States and European Union to encourage growth in low carbon energy markets[23]. Similar to the way cap and trade is meant to incentivize low-carbon technology, the logic of tax credits and rebates is to encourage both producers and consumers to adopt cleaner energy practices as an alternative to fossil fuels by reducing the cost of implementation, and increasing overall capital accumulated from low carbon technology. In theory, this should progress the consumption of less CO2 intensive commodities at the expense of CO2 intensive commodities. However, by using a portion of these profits to buy bitcoin, Tesla is expanding its holdings through the speculative value of Bitcoin, which derives from the ongoing exchange of Bitcoins and the vast stores of energy used to validate these transactions, produce and distribute the currency, and store its data. 

Bitcoin is a popular cryptocurrency, the value of which is determined by a decentralized database known as a blockchain. This is distinct from the valuation of fiat currency, which is typically an outcome of inflation rates and the internal working of a central bank. The data that determines Bitcoin’s value encapsulates the supply and demand of Bitcoin on the market (the same as fiat currencies), competing cryptocurrencies, and the rewards issued to bitcoin miners for verifying transactions to the blockchain. Instead of storing its data in a central location, the data used to verify Bitcoin transactions is stored on multiple interconnected computers around the world. Each time a transaction using Bitcoin occurs, an equation is generated to be solved by a computer in order to confirm the validity of the transaction. The transaction is then stored permanently on data storage devices in 1MB chunks of transactional information. The completed block is then appended to previously existing ones, creating a chain of data that stores the history of all Bitcoin transactions. In effect the Bitcoin blockchain contains the entire history of all transactions that have ever occurred through Bitcoin, and this blockchain is repeated across every data storage device, or node, that composes the Bitcoin blockchain network. Thus, every time a block is completed and chained to the previous blocks, the solution is distributed to every node in the network where the block’s authenticity (the solution to the equation) is verified, and subsequently stored.

As blocks are added to the chain, which verify new transactions through the solution of a complex mathematical equation, new Bitcoin are produced. The equations are structured to identify a 64-digit hexadecimal number called a “hash.” The difficulty of the equations is determined by the confirmed block data in the Bitcoin network. The difficulty of the equation is adjusted every 2 weeks to keep the average time between each block at 10 minutes[24]. “Miners,” those who solve the equations and thereby verify the transactions that make up each block are rewarded for this work with Bitcoin, making it a lucrative market activity in and of itself. Thus, miners are in competition with one another to create new blocks; the more computing power the higher likelihood of successfully earning more coins. Because computers need electricity to function, and more computationally intensive tasks require more electricity, the process of creating new Bitcoin is very energy intensive. A study published in the journal Nature Climate Change in 2018[25] warned that due to its high electricity demands and increasing usage, Bitcoin mining could put the world over the two-degree Celsius tipping point, which would lead to an irreversible climate catastrophe. 

The decentralized structure of blockchains grants Bitcoin users a level of anonymity that is not accessible through traditional currency. Further, as data-based currency is not regulated as traditional currencies are, Bitcoin transfers can be cheaper than a traditional bank’s transactions.  As a result, many Bitcoin transactions are money transfers that benefit from anonymity and “cheapness.” Because Bitcoin’s value is determined in part by the number of transactions, companies, such as Tesla, that trade Bitcoin for profit derive surplus from how Bitcoin is used. This has numerous implications as to how datafication is deriving surplus from the disenfranchisement of Black and Brown communities. 

The climate crisis has created an impetus for the data-based currency, Bitcoin. For example, migrants from the nation-states of Guatemala, El Salvador, Honduras, and Nicaragua are increasingly using Bitcoin for remittances[26]. Remittances are funds sent as gifts to friends and relatives across national borders. They comprise more than 20% of El Salvador and Honduras’ GDP, and nearly 15% of Nicaragua and Guatemala’s GDP, as of 2020[27]. Guatemala, El Salvador, Honduras, and Nicaragua have been ravaged by a five-year long climate change-induced drought, which reduced crop yields from corn and beans -- food staples in the region[28]. The recent drought coupled with oppressive government regimes that were supported by the United States’ neoliberal policies are themselves indirect drivers of these currency transfers–– resulting in large-scale migration out of these regions and into relatively stable and wealthy nation-states, such as the United States (where they will be exploited either in ICE detention centers, prisons, jails, or other low-paid wage labor most frequently available to migrants).[29].  

Bitcoin has become an increasingly popular form of currency to send remittances through because (like PayPal) it is cheaper, more efficient, and subject to less regulation than most banks[30]. In early 2021, El Salvador made headlines by announcing that Bitcoin would become a legal currency[31]. The logic behind this move is that Bitcoin will make it easier for people who do not have access to a bank to transfer money back to El Salvador.  Here we see an explicit example of how the politics of disaster capitalism facilitate the construction of new frontiers that recapitulate the environmental harm (e.g. climate change through increased use of fossil fuels) and generate surplus from the climate crisis. Specifically, patterns of migration onset by climate change and U.S. policy create space for new financial tools, such as Bitcoin to fill. The carbon intensity of Bitcoin recapitulates the environmental harm that is partially responsible for mass migration.

 

Data, renewable energy, and the expropriation of Black and indigenous peoples

Tesla’s investment in Bitcoin demonstrates how low carbon markets recapitulate the internal dynamics of the fossil economy, deriving surplus from the legacy of human expropriation and exasperating the climate crisis. In addition to creating capital from data in the form of Bitcoin, electric vehicle companies like Tesla also create their own data. For decades, automobile producers and rideshare companies have been increasing the data they collect from drivers in an effort to profit from an emerging data market. Everything from speed, breaking habits, vehicle position, and music preferences are collected from individual vehicles and sold to various interests[32]

Electric vehicles like Teslas collect and store far more data than their predecessors, and the amount of data collected grows with every new product line. This is due to the ever more complicated hardware and software that comes stock on new vehicles. Specifically, new vehicles are equipped with internal cameras that are capable of capturing video of drivers who use autopilot[33], the reaction of drivers just before a crash, as well as infrared technology to identify a driver’s eye movements or head position[34]. New vehicles also connect directly to smartphones, allowing third parties to collect data on a driver’s travel and driving habits. Further, states are beginning to put forth laws that require automakers to include driver monitoring systems, increasing the pace at which data is extracted from vehicles. For example, driver monitoring systems will be a part of the requirements for Europe’s Euro NCAP automotive safety program as of 2023[35]. All of this increases the demand for data centers to store new data collected from vehicles as well as the propensity for data to operate as capital. 

While a large portion of the data is sold to third parties such as insurance companies who can use data to determine rates, repair shops that can use data to assist mechanics, and automakers who use data to improve their products, vehicle data is also being used to expand the police state. Companies like Berla Corporation are working with police departments to extract data collected from vehicles, which can be used to surveil the population[36]. Through third parties, police departments are able to access data from smartphones that have been linked with vehicles, giving them access to anything from text messages to GPS location[37]. Considering the broader structure of the police state, this data can be used to expand the scope, scale, and authority of an institutionally racist organization, furthering the dispossession of Black and Brown communities. 

New policies implemented by the state, such as the United States’ proposed 1 trillion dollar infrastructure plan[38], include incentives to increase the consumption of electric vehicles, accelerating the number of vehicles that can extract data from drivers. While the goal of these incentives is to increase adoption of electric vehicles to mitigate climate change, the vehicle market will also benefit from the new data collecting techniques embedded in electric vehicles, which will exponentiate the data stored in centers. Moreover, most electric vehicles are still far more expensive than gasoline vehicles, making them only accessible to the middle or upper classes. Thus, efforts to encourage consumption, such as tax rebates to consumers, results in combined and uneven development as middle-class consumers increase their long-term savings while poor people are left out. Moreover, in the past cap and trade has resulted in higher gasoline prices, which means those left out may also absorb the cost of these policies on the petroleum industry[39].  

The apparent silver lining in all of this is the rise of renewable electricity, which could theoretically reduce the amount of fossil fuels used to capture and store data. Crypto currencies and the data collected from an evolving vehicle fleet could theoretically, then, grow without deepening the climate crisis as long as they rely on renewable sources of electricity. Nonetheless, when it comes to capital, there is nothing new under the sun. The climate crisis itself is an outgrowth of the continuous dispossession of the natural economy. Fossil fuels are merely an energy source that aids in this process. The ability to transcend ecological boundaries has facilitated the slow death of populations around the world since before the widespread use of fossil fuels. The first sugar plantations were erected in Madeira and the Canary Islands, to help the Genoese outcompete their Venetian rivals in the European sugar market at the expense of the indigenous life dependent on these islands. Capital’s maturation has been on an ongoing journey of death and destruction. While tracing this legacy is beyond the scope of this paper, suffice it to say that we are currently at a crossroads in the narrative of capital. The disaster politics of the climate crisis and data capital have created a new frontier in the lithium mines of Bolivia, Chile, and Argentina. These mines exist on indigenous land, which belongs to the Atacama people.      

Renewable electricity, such as that drawn from wind and solar power, as well as EVs require large lithium batteries to store the energy they use[40]. Lithium, a major component in all of these batteries, is currently being mined at the expense of indigenous people. The Lickanantay who live in the Atacama salt flat of northern Chile, consider the water and brine of this land as sacred[41]. As a result of lithium mining, the Atacama water table is losing an estimated 1,750-1,950 liters per second[42], depleting the sacred resource of Lickanantay people. Moreover, it has been argued that the increased demand for lithium mining has led to a recapitulation of the old neoliberal playbook - military coups. Specifically, the 2019 ousting of then president Evo Morales in Bolivia has been called a coup d'etat against indigenous people in Bolivia[43] in favor of lithium mining interests. 

 

Conclusion

These recent developments bring us full circle as we can now see the outcome of the disaster capitalist playbook. The state responds to a crisis that it has aided and abetted by creating a new frontier - the low carbon market. The crisis is not global warming per se, rather, the civil unrest that the climate crisis creates. This unrest is addressed through the commodification of both the perception and solution to climate change - e.g. sustainable products such as EVs. The widespread consumption of low carbon technology results in combined and uneven development, allowing the middle class to reduce the long-term cost of travel and electricity at the expense of the underclass who absorb the cost of “environmentally sustainable” technology by becoming more surveilled and incurring the added costs borne by the fossil fuel industry due to its shrinking market share. The widespread consumption of low carbon technology facilitates and accelerates the datafication of capital, expanding the demand for energy within capitalist markets. As of now this demand has been met by fossil fuel interests who have become the benefactors of data capital's need for cheap energy. Nonetheless, as the renewable energy market expands, the need for lithium, located on indigenous land will encourage the further dispossession of indigenous ecologies. In the end, the natural resources needed to produce EVs and the data they gather are a new lease for capital; a new loan for endless dispossession; a refinancing of the climate crisis.                



Notes

[1] Sadowski, Jathan. “When data is capital: Datafication, accumulation, and extraction.” Big Data & Society 6, no. 1 (2019):

[2] Rani Molla “Law enforcement is now buying cellphone location data from marketers” February 7, 2020.

[3] Eric. The folklore of the freeway: Race and revolt in the modernist city. U of Minnesota Press, 2014.

[4] Simpson, Michael. “Fossil urbanism: fossil fuel flows, settler colonial circulations, and the production of carbon cities.” Urban Geography (2020): 1-22.

[5] Rodney, Walter. How Europe Underdeveloped Africa. Verso Trade, 2018.

[6] Kimberly Amadeo “Fed Funds Rate History: Its Highs, Lows, and Charts” September 24 2021

[7] Celi, Chris, “Redefining Capitalism: The Changing Role of the Federal Reserve throughout the Financial Crisis (2006–2010)”. Inquiry Journal. No. 3 (2011)

[8] Rakesh Kochhar and Richard Fry “Wealth inequality has widened along racial, ethnic lines since end of Great Recession” December 12th, 2014

[9] Wang, Jackie. Carceral Capitalism. Vol. 21. MIT Press, 2018.

[10] Rita Gunther McGrath “15 years later, lessons from the failed AOL-Time Warner merger” January 10, 2015.

[11] Tim O’Reilly “What Is Web 2.0: Design Patterns and Business Models for the Next Generation of Software” No. 4578 2007.

[12] Ana Ozuna. “Rebellion and Anti-colonial Struggle in Hispaniola: From Indigenous Agitators to African Rebels.” Journal of Pan African Studies 11, no. 7 2018: 77-96.

[13] Richard Conniff “The Political History of Cap and Trade” Smithsonian Magazine August, 2009;

[14] Brad Plumer and Nadja Popovich “These Countries Have Prices on Carbon. Are They Working?” The New York Times April 2, 2019.

[15] Sherwood, Marika, and Christian Hogsbjerg. "After Abolition: Britain and the Slave Trade since 1807." African Diaspora Archaeology Newsletter 11, no. 1 (2008).

[16] Klein, Naomi. The shock doctrine: The rise of disaster capitalism. Macmillan, 2007.

[17] Sadowski, Jathan. “When data is capital: Datafication, accumulation, and extraction.” Big Data & Society 6, no. 1 (2019):

[18] Adam Dillon. “How Paypal Turns Customer Data into Smoother Safer Commerce” Forbes May 6th 2019.

[19] Tom Bawden. “Global warming: Data centres to consume three times as much energy in next decade, experts warn” The Independent. January 23rd 216.

[20] Matthew Zeitlin “Venmo Could Be A Big Winner As Obama-Era Financial Rules Are Scrapped” Buzzfeed February 28th 2017.

[21] Foster, John Bellamy. "The financialization of capitalism." Monthly review 58, no. 11 (2007): 1-12.

[22] Jay Ramey “Tesla Made More Money Selling Credits and Bitcoin Than Cars” Auto Week April 27th 2021

[23] https://www.tesla.com/support/incentives accessed 8/9/2021

[24] https://www.blockchain.com/charts/difficulty accessed 8/11/2021

[25] Mora, Camilo, Randi L. Rollins, Katie Taladay, Michael B. Kantar, Mason K. Chock, Mio Shimada, and Erik C. Franklin. “Bitcoin emissions alone could push global warming above 2 C.” Nature Climate Change 8, no. 11 (2018): 931-933.

[26] Enrique Dans. “Bitcoin And Latin American Economies: Danger Or Opportunity?” Forbes July 14, 2021

[27] World Bank Developmentl Indicators https://data.worldbank.org/indicator/BX.TRF.PWKR.DT.GD.ZS?locations=SV accessed 8/13/2021

[28] Jeff Masters “Fifth Straight Year of Central American Drought Helping Drive Migration” Scientific American December 23, 2019

[29] Michael D McDonald. “Climate Change Has Central Americans Fleeing to the U.S.” Bloomberg Businessweek June 8, 2021

[30] Roya Wolverson. “Bitcoin is wooing the millions of workers who send their earnings abroad” Quartz Africa March 26, 2021

[31] Mitchell Clark “Bitcoin will soon be an official currency in El Salvador” The Verge June 9, 2021

[32] Matt Bubbers. “What kind of data is my new car collecting about me? Nearly everything it can, apparently” The Globe and Mail January 15, 2020

[33]  Fred Lambert. “Tesla has opened the floodgates of Autopilot data gathering”. Electrek June 14, 2017

[34] Keith Barry. “Tesla's In-Car Cameras Raise Privacy Concerns” Consumer Reports March 2021.

[35] Euro NCAP. “In Pursuit of Vision Zero”  https://cdn.euroncap.com/media/30700/euroncap-roadmap-2025-v4.pdf accessed 08/3/2021

[36] Mitchell Clark. “Your car may be recording more data than you know” The Verge December 28, 2020.

[37] Sam Biddle. “Your Car is Spying on you, and a CBP Contract shows the Risks” The Intercept, May 3, 2021.

[38] Niraj Chokshi. “Biden’s Push for Electric Cars: $174 Billion, 10 Years and a Bit of Luck” The New York Times March 31, 2021.

[39] Mac Taylor. “Letter to Honorable Tom Lackey” https://lao.ca.gov/reports/2016/3438/LAO-letter-Tom-Lackey-040716.pdf accessed 8/22/2021

[40] Xu, Chengjian, Qiang Dai, Linda Gaines, Mingming Hu, Arnold Tukker, and Bernhard Steubing. “Future material demand for automotive lithium-based batteries.” Communications Materials 1, no. 1 (2020): 1-10.

[41] Amrouche, S. Ould, Djamila Rekioua, Toufik Rekioua, and Seddik Bacha. "Overview of energy storage in renewable energy systems." International journal of hydrogen energy 41, no. 45 2016.

[42] By Ben Heubl. “Lithium firms depleting vital water supplies in Chile, analysis suggests” Engineering and Technology August 21, 2019.

[43] Kinga Harasim. “Bolivia’s lithium coup” Latin America Bureau October 7, 2021.

The End of Growth?: The Capitalist Economy and Ecological Crisis

By Conor Payne and Chris Stewart

Republished from Socialist Alternative.

Many ecologists, activists and academics argue that an obsession with economic growth is the cause of our current ecological crisis and a commitment to “degrowing” the economy is the solution.

Too often, however, this discussion lacks a sufficient class or anti-capitalist content and workers are blamed for our supposedly destructive “consumption patterns”. Instead, socialists should be clear that the cause of the climate crisis is the capitalist system and its incessant drive to accumulate profits, and that the only way to solve the crisis is to struggle for a socialist world where human need, including a sustainable relation to nature, comes before private greed.

Capitalism’s “boom and bust” cycle

Under capitalism, the driving force of the economy is the pursuit of profit. The competition between companies and even different capitalist powers for markets and resources means that this drive for profit is relentless and expansive. Therefore, capitalism also involves a continuous quest for economic growth.

At the same time, these companies will seek to “externalize” the cost of their activities, to leave them to be paid by someone else. The capitalist firm doesn’t care on what basis it grows; whether its products are useful or cause harm, or if its activities are environmentally sustainable.

Capitalism is a system of contradictions. The capitalists get their profits by exploiting workers, as well as the resources extracted from nature in the labor process. The constant need to accumulate more profits means capitalism extracts more and more resources in increasingly destructive ways, ultimately leading to the depletion of soils, minerals, forests, the life in our oceans etc — which undermines the system’s own sources of wealth.

Capitalism is increasingly coming up against the ecological barrier to its unrestrained development, as seen in mounting natural disasters, the recent shutdown of the power system in Texas, and a global pandemic, all at least partly attributable to humanity’s increasing incursions into nature.

As well as this, capitalism is a system that primarily organizes investment through the chaos of the stock market, where investment is motivated only by the pursuit of profit. Today, capitalists increasingly choose to speculate with their wealth through complex financial products that have little relation to actual value in society – what Marx termed “fictitious capital”. This is because they can make more short-term profits here than they can through actual productive investment.

At the same time, the desire of the capitalists to drive down the share of wealth that goes to the working class means that workers collectively are not able to buy all the goods the capitalists put to market. This is one way that capitalist growth eventually comes up against its limits and throws the system into crisis and recession. We are now experiencing this process of crisis in Ireland and internationally for the second time in just over a decade.

When growth has been rooted in productive investment, it has often led also to increases in working class living standards, although workers’ gains are usually dwarfed by those of corporations and the rich. Periods of economic growth, for example in the decades following World War 2, were also sometimes used by capitalist governments to grant social reforms in the interests of working people, such as pensions, public health and education services, welfare protections etc. This was done not out of any innate kindness but as a mechanism to stave off potential revolutionary challenges to the system from the working class.

However, in the preceding decades of neo-liberal capitalism, the basis for growth has been precisely the reduction of the share of wealth going to the working class. Capitalism has suppressed wages, gutted public services, eroded economic security. Inequality has exploded as the gains of economic growth congealed at the top. At the same time, the capitalists have promoted more and more consumption fueled in significant measure by debt. This means that today capitalist economic growth often means little real gain for working class people.

The recovery from the great recession of ’08 was largely a joyless one. This was illustrated graphically here in Ireland in the 2020 election when the establishment did not benefit from any “feel good” factor whatsoever — in fact suffering a historic defeat. This was despite nominally impressive growth rates in the preceding years. The recovery did not alter the reality of low pay, precarity and housing distress. In Britain, the Office of National Statistics found that, despite a decade of “growth”, real wages only recovered to the level of 2008 at the end of 2019 — just in time for the next crisis! At the same time, the numbers on zero hours contracts were the highest on record, at just under a million workers.1

Meanwhile, the mounting burden of ecological breakdown will not be shared equally; as those with wealth move to insulate themselves from the consequences of the economic system they have profited from. As unprecedentedly low temperatures drove catastrophic power outages in Texas, working-class, poor and minority neighborhoods bore the brunt of the power cuts while empty skyscrapers lit up the city skyline.

Karl Marx said that under capitalism: “Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery, agony of toil slavery, ignorance, brutality, mental degradation, at the opposite pole.”2 This sums up the capitalist economy today. At the same time, of course, workers are still liable to pay the price when the system goes into recession. The reality is that at no stage in its cycle of boom and bust, does the capitalist economy operate in the interests of the working class.

An economy for need, not greed

While economic growth undoubtedly drives carbon emissions and all forms of environmental destruction, contraction on a capitalist basis does not deliver an equivalent let up in environmental intensity. According to one study, examining 150 countries over the period of 1960-2008, a 1% increase in GDP meant on average a 0.73% increase in carbon emissions, while a 1% decline in GDP meant only a 0.4% decrease in carbon emissions.3 This is because the environmentally inefficient goods and infrastructure created during a boom generally continue in use during a downturn. Less consumption in itself can never deliver the necessary reduction in carbon emissions. Instead we need a fundamental change in how we produce.

This means that without a planned transition to a sustainable means of life the tendency will be for ever increasing emissions. So the debate about growth and degrowth is useless unless linked to the need to bring an end to the chaos of the capitalist market.

The purpose of the capitalist economy is to deliver increased profit for the bosses. The purpose of the economy under socialism would be to fulfill human need in a sustainable way. This means taking the key sectors of the economy out of the hands of big business and bringing them into public ownership, under democratic control. This means we can reorganize the energy industry, transport, agribusiness and production overall on a planned basis, in the interests of both people and the planet.

Socialists want a better life for the vast majority on this earth. We know many, even in the richer countries, are in poverty or barely keeping their heads above water, do not have access to decent housing or healthcare, or have no economic security for the future. We believe this to be completely unjustifiable in a world of incredible abundance. For this reason, we reject attacks on working-class living standards, even those that are introduced with an environmental veneer, e.g. water charges, or carbon taxes.

The vast majority of the world’s population is responsible for very little in terms of carbon emissions. A recent UN report shows that globally the top 1% of earners are responsible for a yearly per capita average of 74 tons of C02 per year. Meanwhile for the bottom 50% of earners the figure is 0.7 tons.4 In much of the world a socialist system would need to increase production on a sustainable basis and redistribute wealth. Even in the wealthier capitalist countries many sectors that are not prioritized for capitalist investment would need to be expanded under a socialist system, not reduced — healthcare, housing, renewable energy for a start.

A world of waste

At the same time, capitalist production involves enormous waste. We should not underestimate the extent of this:

  • 690 million people around the world went hungry in 2019, with the UN Food and Agriculture Organisation projecting that the impact of the pandemic could add a further 132 million people to that number.5 Yet, during the pandemic, the closure of restaurants and other disruptions cause the widespread dumping of perfectly good produce. Even in “normal” times, while the world already produces enough food to feed everyone, a minimum of one third of this food is lost or wasted. Many things cause this but the status of food as a commodity to be sold for profit is at the centre of the problem. Agribusiness leaves food to rot in the fields to keep prices high, supermarkets throw out edible food they don’t think they can sell, good food is even discarded because its size or shape makes it “unmarketable”.6

  • In 2020, approximately $569 billion was spent on advertising, projected to grow to $612 billion this year.7 You can add to this, the resources spent on sales promotion, public relations, “direct marketing” and other forms of corporate self-promotion. The vast bulk of this money is wasted, spent not to inform us but to convince us to buy as much as possible or to buy one identical brand of a product over another, often preying on our anxieties and insecurities in order to create false needs in our minds that can be “solved” through consumption.

  • Because capitalism doesn’t produce for need but for profit, advertising and marketing become bound up with the process of production itself. The packaging industry is now the third largest on earth and much packaging is not mainly functional but a form of product promotion. Packaging costs amount to somewhere between 10% and 40% of total product cost.8

  • Planned obsolescence means that products are consciously not built to be durable and must be frequently replaced by consumers. This includes fast fashion made from low quality material and electronics with batteries that can’t be replaced, contributing to 500 million tonnes of E-waste in 2019.9

  • There are a plethora of other industries and products of no use to working-class people: from the armaments industry producing weapons of death, to luxury goods like private jets — an industry which has benefitted from a raft of new, wealthy customers seeking to avoid commercial flights during the pandemic. As a result of yet another capitalist speculative bubble, the cryptocurrency Bitcoin now consumes more energy than all of Argentina, a country of 45 million people.

  • Competition between firms means that research and development efforts are often duplicated.

As we can see, the mountains of waste produced under capitalism are not a product mainly of the demands of consumers, but instead serve the needs of capitalist profiteering. The structure of capitalist society itself also partly conditions our consumer needs. Those who don’t live near reliable public transport “need” to buy cars, people on low incomes will “choose” to buy fast fashion etc.

To create more and more products that aren’t needed or will be sent rapidly to landfill, or to generate more and more artificial demand is all “growth” in capitalist terms, but it isn’t human progress. A democratic, planned economy could do “more with less” as part of a planned ecological transition — retooling useless or destructive industries, eliminating duplication, overproduction and planned obsolescence, focusing on fulfilling needs not generating artificial wants and transforming agriculture, transport and energy production on a sustainable basis. In such a system whole industries, communities and cities would be planned democratically and on a completely different basis, putting an end to capitalist overproduction and waste and allowing for a more rational allocation of resources.

Sustainable future means socialist planning

Some argue that a simple transition to renewable energy will solve the ecological problems we face. This transition is both necessary and possible, but won’t be done under capitalism that will extract every source of fossil fuels down to the last, so long as there is profit to be made from them.

But even if this were achieved, we would still face a range of looming ecological catastrophes. The fact is that capitalism is already exceeding a number of planetary boundaries for safeguarding a safe environment for human civilization on earth.

These include species extinction, soil degradation and deforestation, to name only a few. Their common source is the increasing scale and intensity of humanity’s incursions into nature, which are now undermining the basis of our own existence on the planet.

Nor will technological changes alone solve the problem of a sustainable relationship with nature. Under capitalism, the opposite is the case: while technological changes result in the more efficient use of energy, this then creates the basis for further expansion and so paradoxically technological development often results in a net increase in the amount of energy used.10

While technology may alter to some degree what the limits are, we have to accept the reality that “you can’t have infinite growth on a finite planet”. Capitalism means an increasingly destructive and frantic search for resources that can be extracted and land which can be developed, with the benefits of this activity more and more concentrated in the hands of the few.

Socialist planning can ensure the rational development of the quality of our lives without increasing environmental intensity. Only on this basis can we restructure our society around need, not profit, creating countless socially necessary jobs in pursuit of building a sustainable system.

Socialists stand for massive investment in low carbon jobs and sustainable infrastructure, as well as the introduction of a four-day work-week with no loss of pay. This would not only solve the problem of permanent unemployment under capitalism by distributing work to all those who need it, but would also free workers up to participate in political and economic decision-making, and would achieve a better balance between work, our social lives and leisure.

This will still pose complex questions about how products, industries and practices can be maintained, but these are best resolved on the basis of democratic discussion in a society founded on equality and solidarity.

Notes

1. Richard Partington, Feb 18, 2020 “Average Wages Top Pre-Financial Crisis Levels”, The Guardian, www.theguardian.com 

2. Karl Marx, Capital Volume 1, www.marxists.org

3. Richard York, Oct 7, 2012, “Asymmetric effects of economic growth and decline on CO2 emissions”, Nature Climate Change, www.nature.com

4. UN Environment Program “Emissions Gap Report 2020”, Dec 9, 2020 

5. UN Food and Agriculture Organisation, July 13, 2020, “As more go hungry and malnutrition persists, achieving Zero Hunger by 2030 in doubt, UN report warns”, www.fao.org

6. Andrew Smolski, Mar 29, 2017, “Capital’s Hunger in Abundance”, Jacobin, jacobinmag.com

7. Brad Adgate, Dec 14, 2020, “Ad Agency Forecast: Expect The Advertising Market To Rebound In 2021”, Forbes, www.forbes.com

8. John Bellamy Foster and Brett Clark, 2020, The Robbery of Nature: Capitalism and the Ecological Rift, Monthly Review Press, p. 364

9. John Harris, Apr 15, 2020, “Planned obsolescence: the outrage of our electronic waste mountain”, The Guardian, www.theguardian.com

10. Foster and Clark, 2020, p.352-3.