Re: <nettime> A Historian of Economic Crisis on the World After

A technical point that I think needs to made is that monetary creation involves both the US Congress, Treasury and Federal Reserve Bank. So anti-austerity or what in Keynseian terms would be call "counter-cyclical" response to crisis is not a question of central banking primarily, but of politics more broadly.

Clearly the Fed and to a certain extent the Trump administration (case in point $1200 CARES Act checks) agrees that austerity is not the best policy to achieve the so-called "V-shaped" economic recovery they're after. Especially after this administration tries to differentiate itself from the technocratic solutions enacted by the Obama administration. The Fed in particular has set up several new "facilities" to buy back US Treasury, corporate and even municipal bonds, in order to keep interest rates low and promote liquidity in the markets—Quantitative Easing all the way down, if you will. The current "political debate" in Congress is a stalemate between $3Trillion (CARES ACT) plus a new proposed fund of $1 (repub) or $2 (dems) trillion in direct fiscal spending. Frankly, I don't even think our representatives even know much more than one or two line items of what the spending will fund or collateralize in the case of offsetting the risk of those Fed facilities.

Brian, I agree with you that a massive federal investment stands to greatly broaden the scope of participation and meaningfulness of in public (and private) sector work, but I guess what rubbed me the wrong way about the Toose interview is the framing around conflict between hegemonic (US) and emerging China superpowers. I see the current situation as less of a global conflict and more of a general deficit within political discourse to organize the terms of direct action by empowering ordinary people, aka liberating the citizenry. The political problem at the heart of our bad economy is that the monetary resources (available to make things happen) have become almost totally abstracted from the materials and tools to support real quality of life. Basically the current political agenda is not about making things, it is about qualifying for credit. That is a sorry excuse for politics especially for Lefties (and also for critical academic historians concerned about the changing climate). Anti-austerity is good but not good enough.

Political demands need to be fought within a field of actual "ways of life". To put it another way, a better politics advocates for specific future traditions. This goes beyond the question of money supply and starts to organize institutions that will actually broaden "accreditation" within our diversity of human methods. For example, right now these methods are being loosely organized algorithmically (rather than politically) by Youtube, who suggests playlists of how-to videos that relate to each other. Could we "ally" with Google to encourage greater social bonding or to enable a social provisioning function, like direct voting from online conferences who caucus for home improvement resources from the state? I don't know... Seems like the wrong way around. Google seems more interested in flattening the world into hybrid subjects that are both amature marketers and ad consumers. That's why I disagree with setting out business alliances first strategy.

The neoliberal frame privileges flows of money and goods. A different order promotes flows of human experiential know-how and the ability of people to aggregate a sense of what they can concretely do for themselves and others.

I think we can agree that if China does have some ascendant "advantage" over the US, it may be along the lines of China's privileging of mass exposure to material processes (even if their intermediate economic model aims at global consumer markets). If I am not mistaken, Brian, you have referred to this in the past as China's "culture of engineering". The current US culture is predominated by a general inflation of nearly all "barriers of entry"--to resources, education, industries, identities, and literal geographies. On the Right it is a culture of virtuous exclusion and righteousness of State violence (vice signalling), and on the Left it is a culture of "discipline" that tends toward puritanical consumption (virtue signalling).

As an adequate Left, we have to better organize our experiments in future traditions with the goal of aggressively converting a broader and broader field of living space. Not unlike the US Military, we will know we have achieved political power when there is a recruitment office in every small town or urban district where people can sign up to join our experiments and traditions in concrete ways of living.

On Fri, Aug 21, 2020 at 7:26 PM Brian Holmes <bhcontinentaldrift@gmail.com> wrote:

On Fri, Aug 21, 2020 at 5:20 AM Vincent Gaulin <gvincentgaulinjr@gmail.com> wrote:
This article is like a neoliberal apologist’s playbook.

“I don’t like the green new deal because it doesn’t define it’s business

alliances [paraphrase]”, I guess they couldn’t join WWII without first

defining their business alliances first, either. Utter nonsense.

Vincent, it's good to hear from you. I disagree a little bit, but it's a friendly kind of disagreement.

Adam Tooze is a critical academic historian, not a neoliberal. His question in this interview is what political moves would be necessary to seize the socially transformative possibilities of monetary creation by central banks - that's the opposite of neoliberal austerity. The biggest difference between him and you could be that you're rightly furious about all that is NOT happening in terms of seizing the opportunity, whereas he just asks coldly critical questions and gives no clear answers.

I would be curious to hear more about what you propose. Clearly you have ideas on the subject. People have to articulate, not just their demands, but also their plans. This is something very positive about the DSA (yes, for all of you in other countries, there is an increasingly influential party called the Democratic Socialists of America). Echoing Warren Buffet, Tooze says the class war is over and the billionaires won, but that was yesterday. The point is to prove him wrong today, something which is starting to happen.

Concerning Tooze's remark about the Green New Deal not defining its business alliances, it's a strategy question. The American government, like every capitalist government but even more so, is weak compared to the large corporations. Its footprint is large - the public sector accounts for almost 15% of total employment in the US case - but it's fragmented into an infinity of services and scales, with tightly restrictive mandates and operating codes, and the real neoliberals have starved most of those services of tax revenue, not to mention legitimacy. The most significant forces that the federal government can mobilize directly and immediately are the military ones, but even Trump has had a lot of difficulty doing that, although he has done so on a very small scale for building little bits of his great big beautiful wall. I am sadly certain that we'll frequently see the military mobilized on domestic soil as the Anthropocene sets in with a vengeance over the next decade -- but for disaster management, not for the energy transition or carbon sequestration. Technical endeavors of those kinds are carried out in the US by corporations (though often with payment from the state). We don't have state-owned enterprises as in China, or the ability to command ostensibly private corporations. Defining business alliances with a political strategy for changing the course of capitalist development is of the essence.

In the 1940s, Roosevelt was only able to definitively solve the economic crisis by mobilizing the corporations for total war. You know, this was the era of the "dollar a year men," dispatched to Washington to co-manage their corporations' participation in the war effort. But while engaging the corporations in this way, he basically did their bidding, placing federally orchestrated research and development at their service (where it has remained), integrating productive capacities at continental scale, and opening up a militarily defended world market for this expanded productive apparatus. All of that was accepted by the population as a pathway to the good life: it was broadly legitimate from a national perspective. This is how the monster of American global dominance emerged from the Roosevelt administration's wartime strategy. Neil Smith's books - American Empire and The Endgame of Globalization - are what helped me understand that. The strategy that won the war was later disastrous for much of Roosevelt's social-democratic project.

Responding to Max Herman, when Tooze says it's a dirty little secret that large owners of capital put their money in government debt in times of crisis, well, that's a useless and misleading bit of irony. For both standard Keynesian and Marxist economics this is an obvious fact, and what's more, it's fundamental to the daily operations of the global financial markets, where the risk of potential profitability is always balanced against the security of government bonds. This is only a contradiction, or a dirty little secret, from the viewpoint of free-market ideology. The question is, why has so much effort been made to defend that ideology against such a flagrant contradiction? Why cover up the obvious?

The reason why is that public investment, in combination with taxation and legally binding regulation, can both shift the developmental pathways of large corporations AND establish a larger, more capable and more meaningful public sector. The neoliberals are exactly those who stand to lose from such a shift, and who have fought tooth and nail against anything like it, starting way back in the 1970s. The thing is, large-scale public investment on the basis of monetary creation by the state is not just a theoretical possibility, neither back then, in the Kennedy-Johnson era of the Second Welfare State, nor even less now, when both civil rights movements and climate change demand major structural changes in political economy. And all the more so since, as Tooze points out, the bugbear of inflation has so far failed to materialize. Even the current Democratic campaign platform, as well as the massive spending bill passed a month or two ago by the House (and killed in the Senate, obviously) aim to do exactly that - not just tax and spend, but create money and spend it. Still, really transforming anything is not an easy task, when organizations like huge "public" utilities, or even bigger oil companies, use their considerable resources to block those changes. Any transformation of the energy system - including electrical generating capacities, industrial process heat, grid modernization and the crucial carbon sequestration effort that Vincent talks about - is going to require the mobilization of large corporations, just as producing a vaccine does. Such a transformation will also have to generate at least some partial equivalent of the kind of jobs offered by the current energy sector, especially oil & gas. Why? Because if those sectors are not restructured in a way that buys off at least some of their participants, we will have a full-on civil war in the US, as you can already see from the Trump era.

That being said, the Democratic plans, and even more, the Green New Deal proposal, do not neglect the public sector. Instead they propose massive employment programs in weatherization and climate retrofitting at the urban level, where so many millions of unemployed and disenfranchised people live. The point is to overcome the incredible cruelty of capitalist society, which has now alienated large fractions of the population. These efforts would require a lot of public administration at all levels of the state, and they alone could gain the allegiance of the precarious and disenfranchised sectors of the population.

As Max points out it's definitely true that capitalist states have done this kind of thing since the Great Depression, that's how they staved off the Communist threat. Social democracy is one form that this response took, but unfortunately it was everywhere accompanied by corporate globalization (look at what Norway has done with its oil). I don't really know anything about Mr. Janeway, Max, but if you expand your reading you will find that these kinds of proposals to relegitimize the state through public investment are legion right now: that's the basis of the theoretical Green New Deal and of its really existing social-democratic counterpart, the European Green Deal. It might be better to drink your social democracy from a wider range of sources, and not only from enlightened representatives of the corporate order - though as I am arguing, with Tooze, they should not be neglected either.

I think the state must be relegitimized in this way, through a strong grassroots strategy that takes both state and corporate development into account, and then holds them to account. Just as people held the DNC to account yesterday, when they tried to take the promised end to fossil fuel subsidies out of their platform. Popular power is the key - but it has to be really popular, including large sectors of the middle classes too. The only way to realize the promise of a Green New Deal is to develop a broadly sharable, clearly articulated strategy that is rooted in the needs and aspirations of precarious and working-class sectors, with support from all kinds of professionals and intellectuals, and with full recognition and willingness to act against the systemic racism inherited from colonial history. Ocasio-Cortez, Sanders, the Sunrise Movement, the DSA, have all been able to formulate such a strategy. But it has a long way to go before it is understood and embraced by a rightfully suspicious population. That's tragic, because the alternative is living in the ruins under constantly intensifying disasters of the kind unfolding in California right now.

There are currently many people who believe that living joyfully and cooperatively in the ruins is the only available future. Well, most likely we are all going to get many chances to find out if we like living in the ruins...

all the best, Brian

G. Vincent Gaulin

211 Keese St.

Pendleton, SC

m. 864-247-8207