Brian Holmes on Thu, 31 May 2001 21:58:57 +0200 (CEST)

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<nettime> Re: Public Electricity Production

Ben Moretti's post on industrial planning in South Australia brought this
thread toward political economy (my favorite angle). Then Simon Biggs
contributed a first-hand recap of the South Australian situation, full of
details and insights. Simon wrote: "Arguing that South Australia's wealth
was built through a kind of New Deal program centred on housing
construction and the centralisation of the means of production (putting
various private utility companies into public trust) is to miss the point."
The point might be: what did New Deal-type strategies become when they were
applied full-scale in the fifties-sixties, in the context of the postwar
I know zip about Australia. I basically just guessed from the description
of Thomas Playford that South Australia took up the same centralized
planning as most industrial nations after the Second World War, whereby the
state orchestrated the growth of complex economies. Simon confirmed that:
"...the Leigh Creek coal fields... became the property of the SA
Electricity Trust, however whilst much of the power generated was used for
the growing cities of the State the key factor in this was the
establishment of the steel industry in the three cities of Port Augusta,
Whyalla and Port Pirie. Each of these cities was given a role, by the
state, in the industry as a whole.... This is a great example of
socio-economic engineering, almost Soviet in its scope..."

In California where I grew up, the subsidized industries were more
diversified, and more research-based than in South Australia: among them
were civil aeronautics, a wide range of defense industries, nuclear power,
and so on - with labor-intensive agri-business playing a counterpart to the
brain-intensive factories. It was at the center of the imperialism that
Simon talks about, what radicalized people in those days started calling
"the system." But from thirty-forty years distance, you can see how complex
that system and its break-up really were.

Throughout the industrialized countries, the centrally planned economy had
been a regulative response to the crisis of the thirties and the collapse
of nineteenth-century liberal capitalism (where the owners really were
individuals, and not conglomerates responsible to the state). In the
forties, central planning also became a necessity of war, installing the
military-industrial complex at the heart of the response to crisis. But
then after the destruction and sacrifices, the command economies had to be
justified by something more than the need to win. Integrated social and
industrial development was the great promise, all around the world.

Beyond arguably good things like housing, utilities and basic health care,
or what Marxists call "reproduction of the labor force," the state in that
period had to provide educational and cultural supplements to the quality
of daily life - extensions of consciousness which were necessary for
certain aspects of industrial growth. This is where the socio-economic
engineering gets interesting, and contradictory. Those educational
provisions, which in the large sense could include parks and museums and
public TV, were also a vote-winning ploy that could facilitate the deficit
spending policy of the time: the old Keynesian trick, using state credit to
prime the economic pump. But mass public education is a dangerous good to
throw into the mix. It is a more-than-Keynesian multiplier, it doesn't just
stimulate economic growth, but opens up new spaces of autonomy. The
necessary expansion of education turned out to foster a critique of the
state that provided it, and of the bureaucratic rationality that guided
technological development. So that the whole complex system that had
developed in most industrialized countries after the war began to split
itself apart internally - a process exacerbated by the fact that the
welfare state brought enormous expenses, and it was getting difficult to
politically agree on who should pay.

The way the break-up of the system occurred means everything to us today.
In some respects, we are still living through a distorted reflection of it.
Simon writes: "After the dry and constrained decades of Playford the sense
of release and creativity that Dunstan's election brought with it was
overpowering.  Although I was only a teenager at the time I remember very
very well the excitement of the period, as a visceral memory.  Ultimately
those events shaped my political outlook and that of a generation."

The consciousness revolution ran ahead of, and to a certain extent helped
provoke the economic crisis. Throughout the world-economy, 1965 to 1973
were the jagged, heady, unpredictable years that closed the long wave of
postwar growth, and brought the industrialized countries to a point where
Keynesian deficit-spending was no longer practicable. It was a creative
time, when individuals could shake off the regimentation that had been the
essence of central planning and factory work-discipline. Having gained in
rights and entitlements, huge numbers of people found themselves with
unexpected agency, and an ambition to derail their little bit of the system
- an ambition spurred by the rising awareness of how imperialist and
oppressive it really was. That movement was the first to reject the central
planners and their entire bureaucratic construction, well before the
neoliberals came in to "get the state off our backs." At the same time, the
'68 generation pressed for even greater entitlements. Wages rose, bringing
inflation; capital interests were threatened and conflicts emerged. Strikes
and recession set in to plague the advanced economies in the seventies, and
in many places, the machinery of production practically ground to a halt.
In the late seventies, under conditions of industrial stagnation and
inflation ("stagflation"), no one could see how to get the whole thing
rolling again.

A new economic paradigm doesn't crystallize all at once, and its
transformations are only partially engineered by the elites. What happens
is that certain innovations start to dovetail and produce noticeable
effects, which are then analyzed, identified, encouraged by other
innovations. The first key innovation was financial: with the "monetary
turn" in 1979, the US began to float its national debt not through
traditional bond issues, which aimed at recycling national savings, but
rather through bonds which had been made entirely liquid, turned over to
speculation on a volatile world financial market. This not only meant that
Japanese investors could now temporarily pay for American spending
programs, lessening the political pressure on the executive. Above all it
meant that a new niche was created in the world-economy where capital could
appreciate in value, rather than depreciating as it did when invested into
stagnating, more-or-less state-managed industry. As the paradigm
crystallized, the "fictitious" surplus value added in transnational
financial markets would increasingly serve as the spark to ignite new
production cycles, often across national boundaries, through what is called
"foreign direct investment." That's the beginnings of globalization. In
retrospect, you can see it as a way of sidestepping the Keynesian use of
national tax money for economic planning. Which is also a way of escaping
any democratic control over the directions growth would take.

Just hang on, we're getting closer to electricity production in 2001.

This fundamental change in the way surplus value is reinjected into the
system marks a new regulation of the world-economy. But production itself
had to change, for the solution to work both politically and industrially.
A couple of eggheads named Piore and Sabel make some brilliant remarks in a
book called _The Second Industrial Divide_: "The brief moments when the
path of industrial development itself is at stake we call industrial
divides. At such moments, social conflicts of the most apparently unrelated
kinds determine the direction of technological development for the
following decades. Although industrialists, workers, politicians and
intellectuals may only be dimly aware that they face technological choices,
the actions that they take shape economic institutions for long into the
future. Industrial divides are therefore the backdrop or frame for
subsequent regulation crises."

Why did the personal computer, and the associated products from software to
media, finally end up at the center of the new "long wave" of growth that
followed the recession of the 1970s? My reading is that the personal
computer answered the desires of different constituencies within the
advanced economies. It helped meet the aspirations of person-to-person
communication, spontaneous cooperation and direct democracy that underlay
the self-management ideal of the left in the sixties and seventies. But at
the same time it was the perfect tool for an emerging, psychologically
savvy new managerial elite, globally nomadic and attuned to the
split-second fluctuations of the financial markets; and of course, it made
the contemporary, world-spanning financial markets possible. The computer
sits, or rather spins, at the heart of a production process giving rise to
the kinds of symbolic goods that flatter the post-68 emphasis on culture
and volatile fashion. But as if by coincidence, these same goods are much
more adapted than heavy industrial products to the turnover speed required
by the profit-hungry financial markets.

The computer permits the labor form that Piore and Sabel call "flexible
specialization." As they write: "This strategy is based on flexible -
multi-use - equipment; skilled workers; and the creation, through politics,
of an industrial community that restricts the forms of competition to those
favoring innovation." Toni Negri, Maurizio Lazarrato and the others of that
group have brilliantly demonstrated how this kind of cooperative,
semi-autonomous labor emerged from the refusal of Fordist productive
discipline and welfare-state rationality. And they have gone further,
showing how that kind of labor developed, with the information economy,
into what they call "mass intellectuality." Most of us on this list are in
a version of that bag, I think. Our working style of cooperative
cultural/informational production began to take form in the late
sixties-early seventies, and actually influenced public policy from the
very outset, starting with the Dunstans in Australia or the Jerry Browns in
California, and continuing on a vaster level with the Clintons and Blairs
today (don't know the Australian equivalents).

What I'm trying to get at is that the media-universe of mass
intellectuality we are now inhabiting - with its extremely ambiguous stance
toward the "public" dimension and towards the role of the state in creating
and maintaining it - actually developed most of its discourses and
attitudes directly out of the central contradiction I was pointing to
before: the contradiction between the economic priorities of central
planning and the spaces of autonomy that developed massively in the
population, via the entitlements and rights brought by the welfare state.
That could sound like another sophisticated bit of useless history, but
there's a political point to it. If you want to develop an effective social
critique today, if you want to effectively question what's public and
what's private, or where technological development is going - if you want,
like myself, to help provoke a _new_ regulation crisis that might unseat
the domination of the financial markets over the directions of world
technological development - you have start by asking this: How has the
social formation we are part of, the flexible intellectual laborers, been
neutralized? What is it, in the political outlook of a generation that
Simon described, that has led to us being so ineffective, after the crisis
period around 1965 to 1975? Where, along the path from the welfare state to
neoliberalism, did the critical power get lost? And what makes the
neoliberal regime, as Beiberger writes in _99 francs_, "the first system of
man's domination by man against which even freedom is powerless"?

All this was supposed to be about electrical production. Currently the
Americans are talking about restarting the enormous industrial program of
nuclear power (which, of course, American companies. Westinghouse and GE,
never stopped selling outside the US). And Japan is talking about
installing solar panels in outer space! It would be absurd to think that
this kind of stuff is going to be carried out by the media-happy
intellectual laborers of "flexible specialization." But Piore and Sabel
point out that flexible specialization was only one side of the response
that emerged to the crisis and recession of the seventies. The other
strategy "aims at extending the mass-production model. It does so by
linking [computer again, BH] the production facilities and markets of the
advanced countries with the fastest-growing third-world countries. This
response amounts to the use of the corporation (now a multinational entity)
to stabilize markets in a world where the forms of cooperation among states
[i.e. imperialism, BH] can no longer do the job."

Corporate power over technological development, guided by the imperatives
of the stock market, and given a legal and diplomatic frame by power groups
within the national states which have pulled away from any democratic
control (like the executive power we could see operating at the FTAA summit
in Quebec). That's what you're facing when you ask the question, What kind
of electrical production will we have tomorrow? Will it be public? What
does the word public mean? People are finally now asking those kinds of
questions again, and using the media tools at their disposal to amplify and
intensify their questioning, in the attempt to give it an effective, active
place in society. To do that, they have to reevaluate their own attitudes,
their own histories. That's the beginnings of the movement of resistance to
corporate globalization, or the globalization of capital, as we say here in
France. It is like watching a whole social formation wake up from a dream:
the dream that you could carry on a public conversation within a space that
is almost entirely private - like the Internet, like the American
universities, and so on. How to change the architecture of the dream? How
to make effective contact with the people exploited and dominated by the
corporations, outside the privileged circles of flexible specialization and
the media-sphere? How to gain new agency, and exert some control over the

Though I've never been to Australia, nor experienced the power blackouts in
California, those are the questions and reflections that the piece on
Thomas Playford, the memories of Simon Biggs, and the issue of public
electricity production inspire in me. As if we were living in the same
world after all.

Brian Holmes

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