Moon of Alabama Brecht quote
June 01, 2015

The Current Overproduction Crisis And War

Ian Welsh makes Fourteen Points on the World Economy as the US GDP Drops .7 Percent. He believes that the economy is again turning towards a global recession. This recession comes even as there has not been a real recovery from the last global economic crisis:

Let me put this another way: The developed world is in depression. It has been in depression since 2007. It never left depression. Within that depression, there is still a business cycle: There are expansions, and recessions, and so on. Better times and worse times.

The business cycle is again turning down and is doing so sharply. Not only in the U.S. but also in Europe and Asia.

Every central bank has been throwing money at the local economies but that money finds no productive use. Why would a company invest even at 0% interests when nobody will buy the additional products for a profitable price? How could consumers buy more when wages are stagnant and they are already overburdened with debt taken up in the last expansion cycle? The central banks are pushing on a string while distorting normal market relations. This intensifies the original crisis.

My belief is that the global crisis we see is one of overproduction, an excess or glut of supplies and on the other side a lack of consumption. The exceptional cheap money created by the central banks makes  investment in machines preferable over employment of a human workforce. The result: Manufacturing hub starts work on first zero-labor factory

Chen predicted that instead of 2,000 workers, the current strength of the workforce, the company will require only 200 to operate software system and backstage management.

The (Central) bank gave Mr. Chen cheap money and at an interest rate of 0% a complete automation of his company may indeed be profitable. It is unlikely though that he would make the same move at an interest rate of 10%. But on the larger macro economic scale Mr Chen needs to ask this question: "How will the 1,800 laid off workers be able to buy the products my company makes?" Some of the laid off people may find marginal "service" job but the money they will make from those will likely be just enough to keep them alive. And over time flipping burgers will also be automated. And then?

Karl Marx described such overproduction crises. Their cause is a rising share of an economy's profits going to an ever smaller class of "owners" while the growing class of marginal "workers" gets less and less of the total pie. In the last decades this phenomenon can be observed all over the developed world. The other side of the overproduction crisis is an underconsumption crisis. People can no longer buy for lack of income.

While a realignment of central bank interest rates to historical averages, say some 6%, would help to slow the negative process it would not solve the current problem. Income inequality and overproduction would still increase though at a lesser pace. The historic imperialist remedy for local overproduction, capturing new markets, is no longer available. Global trade is already high. There is little land left to colonize and to widen the markets for ones products.

There are then two solutions to such an crisis.

One is to tackle the underconsumption side and to change the distribution of an economy's profits with a much larger share going to "workers" and a smaller share going to "owners". This could be achieved through higher taxes on "owners" and redistribution by the state but also through empowerment of labor unions and like means. But with governments all over the world more and more captured by the "owners" the chance that this solution will be chosen seem low.

The other solution for a capitalist society to a crisis of overproduction is the forced destruction of (global) production capabilities through a big war. War also helps to increase control over the people and to get rid of "surplus workers".

The U.S. was the big economic winner of World War I and II. Production capacities elsewhere got destroyed through the wars and a huge number of global "surplus workers" were killed. For the U.S. the wars were, overall, very profitable. Other countries have distinct different experiences with wars. In likely no other country than the U.S. would one find a major newspaper that arguing that wars make us safer and richer.

I am therefore concerned that the intensifying crisis of overproduction and its seemingly casual preference for war will, in years to come, push the U.S. into starting a new global cataclysmic conflict.

Neoconservatives like Victoria Nuland tried to goad Russia and the EU into a big war over Ukraine. The top lobbyist of the military industrial complex, U.S. Secretary of Defense Ash Carter is trying to instigate a war between China and its neighbors over some atolls in the South China Sea. The U.S. is at least complicit in the rise of the Islamic State which will leave the Middle East at war for the foreseeable future.

Are these already, conscious or by chance, attempts by the U.S. to solve the problem of global overproduction in its favor?

Posted by b on June 1, 2015 at 17:18 UTC | Permalink


And good timing, b. Where are the 1% going to hide until the smoke settles?

Posted by: Hoarsewhisperer | Jun 1 2015 17:38 utc | 1

Marx's early writings, including the Communist Manifesto, did indeed focus on crises of overproduction. But, in Capital, he explained that falling rates of profit are the key dynamic. For a popular blog on these issues, see Michael Roberts:

Of course, there is plenty of debate on these matters within Marxian political economy. The best academic source is the journal, Historical Materialism:

Posted by: | Jun 1 2015 18:05 utc | 2

Last night, CCTV (China) interviewed Susan Shirk a Professor of (pretending to be impartial & former Assistant Secretary of State in the Clinton Admin) at UCLA, San Diego on US bluster over China's island building. She emphasised that the US "is an Asia Pacific power."

Posted by: Hoarsewhisperer | Jun 1 2015 18:13 utc | 3

QE is not directed to the real economy. It is circulated among the biggest banks in the financial sector.

Posted by: nmb | Jun 1 2015 18:23 utc | 4

I think you're right, b. The U.S. will not allow regional hegemons who are not clients let alone a global one to challenge its unipolar world. That's why we're seeing all these wars in various stages -- hot in the Middle East; hot and cold in Ukraine; cold in Southeast Asia. The U.S. prefers smashed failed states to anything remotely challenging its full-spectrum dominance.

The neoliberal prescription for low growth/no growth is the complete cannibalization of the state. Privatized health care is being exported to Europe, while in the U.S. public education is being devoured by corporations.

Posted by: Mike Maloney | Jun 1 2015 18:38 utc | 5

thanks b.. overproduction, combined with a laid off work force due automation and etc. - doesn't bode well for all concerned.. mr chen got the 0% loan, and lays off 1800 people.. capitalism eating itself...

Posted by: james | Jun 1 2015 18:47 utc | 6

Since the subject is blacked out by corporate media, we have to decipher the news to try to figure what is actually happening. The only stimulus acceptable to the elite and their politicians is war. 2,300 Humvees seized by Islamic State. Instead of containment, ship thousands of anti-tank missiles to Baghdad; more money in the pocket of the Military Complex. The problem is that it is psychotic. The Islamic State’s end game is Mecca. The shutoff of 11% of the world’s oil supply will collapse the world economy. Yet, this is not an aberration. A civil war was started in Ukraine right on Russia’s border; a nuclear power who has said they will use them if there is a shooting war with NATO. The Greeks are being pillaged to pay debts that cannot ever be paid back. Unless the debt is written off, the Eurozone will splinter asunder. The only description for this is greed. Get rich today; the hell with tomorrow and the rest of mankind.

Posted by: VietnamVet | Jun 1 2015 19:01 utc | 7

@ 7 VV:

Right on. This is the only sensible reason I can come up with for war against non -threatening and/or stable nations. A small group of vile skumbags (ie, "Job creators") make more money on top of the pile they already sleep on.

The "good" news is, not only does it leave many unemployed young people ready to fight eternal global war for the owner class to get even more rich, it also leaves many marginalized people of all stripes looking for payback. The surveillance state combined with the Idiocracy we are fast becoming means many will get caught or have their palns disrupted, even be called terrorists - but not all of them.

Posted by: farflungstar | Jun 1 2015 19:24 utc | 8

The good news is that this U.S.-led neoliberal hegemony (what Tariq Ali calls the "Radical Center") is rapidly losing any popular legitimacy. Syriza in Greece, Podemos in Spain, Sinn Fein in Ireland, SNP in the UK, even Bernie Sanders in the U.S. His first day of campaigning last week in Iowa 700 hundred people showed up to hear him speak, compared to 50 for Martin O'Malley, another corporate shill. Sanders is no antiwar crusader, but his basic ideas -- cutting military spending, breaking up the big banks, raising marginal tax rates on the wealthy, creating jobs by investing in infrastructure -- have proven the most popular, at least based on turnout, in Iowa of any candidate, Republican or Democrat, so far.

Posted by: Mike Maloney | Jun 1 2015 19:57 utc | 9

We have to look at the perspective of the class war too, where the corporate and elite class have growing contempt for the lower/middle classes more than they already do. So, how can one grow the economy, when the elite and corporate class are exploiting, growing inequality, and hate for us even more ?

Posted by: tom | Jun 1 2015 20:17 utc | 10

Thanks for Ian link and here is more news on the recovery that never happened and is about to get worse, sadly.

Nothing like cooking the books with your rose colored glasses on.

Posted by: jo6pac | Jun 1 2015 20:39 utc | 11

The prime vote holder of the IMF himself states the IMF has "served US National and economic interests" since it's inception, across Latin America, Europe and the world, and that "US Leadership" in the IMF is "critical".

The ideas behind the institutions that came out of Bretton Woods were already in the mind of FDR and Keynes long before the conference. One of FDR's key advisors was James Warburg whose father had funded Hitler as well as the USSR, and founded the Federal Reserve Bank.

US financiers funded Russian manufactured trucks which went to the North Vietnamese forces, and today BP hold stakes in Russian energy firms while Hilary Clinton sells Russia the US Uranium supply.

As Major General Smedley Butler said in 1935 "War is a Racket". All that has changed is the quality of the supporting propaganda.

Posted by: Bill | Jun 1 2015 21:15 utc | 12

@9The US won't change its ways because of any vote. they need access to foreign markets and resources on their own terms. Otherwise, the rickety structure of American society will collapse. No welfare, no pensions, no healthcare, no foot stamps. No more trickling. They have no choice but to sell guns and ammo(or just leave them lying around!) to the bribed and the threatened who do their bidding. Sanders is a fool if he doesn't understand this.

Posted by: ruralito | Jun 1 2015 21:37 utc | 13

Whatever else we can say about the USSR, they never suffered from overproduction of consumer goods...

Posted by: ralphieboy | Jun 1 2015 21:37 utc | 14

And to add a very prescient quote from Butler if I may, bearing in mind that this man is one of the most decorated generals in US marines history

War is a racket. It always has been. It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives.

A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small ‘inside’ group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes…

I spent 33 years and four months in active military service and during that period I spent most of my time as a high class thug for Big Business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism.

I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902–1912. I brought light to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras right for the American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went on its way unmolested.

Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents.

Posted by: Bill | Jun 1 2015 21:40 utc | 15

I think that it is not "overproduction", but the result of improved transportation, communication and more free trade. What is the advantage of paying wages in USA or Western Europe if you can put all labor consuming operations in China, where there is good infrastructure, or in countries where infrastructure is not as good but the labor much cheaper, like Bangladesh? The answer is that while some advantages do exists, there are less and less frequent. Even automation can be performed elsewhere.

Historically,in 16-th century The Netherlands were the chief European center of non-agricultural production, international trade and banking, and afterwards there was less and less production, but the country retained for a while its position in trade and banking. That cycle affected northern Italy earlier, and England, later. I think that one part of the solution would be a moderate, and yet effective, policy supportive of domestic production and domestic employment.

But there is also a bit of overproduction. Average American could perfectly well live in a smaller home, drive a smaller vehicle, buy fewer gadgets etc. with hardly decreasing the quality of life. Those below the average income can be out of luck, but they do not consume much anyway. Additionally, there is an excessive gap between "micro-economic" and "macro-economic" optimum behavior. Most American household has so little savings that the suffer a crisis very easily, so it would be better for them to spend less, e.g. by cooking more and eating out less, cutting down impulse buying etc. However, the cut in demand is recessionary on a macro-scale. It would be sensible to have policies that would concentrate not on "growth" but on satisfaction of needs.

Posted by: Piotr Berman | Jun 1 2015 21:50 utc | 16

I agree ruralito. The U.S. will not change based on any vote, but the voters will. U.S. voters are much closer to the type of counter-hegemonic consciousness that the New Left longed for that at any other time in the post-WWII period. The U.S. warfare state is discredited, despite massive infusions of commercial patriotism; the financial system is despised; racial solidarity is far stronger now than ever before; the movement to legalize dope and marriage equality is on the ascent. Hillary very well could be knocked off. These are all good omens.

Posted by: Mike Maloney | Jun 1 2015 22:01 utc | 17

America is drowning in the sewer of the national political system. There is no candidate or incumbent in Washington, DC who serves the country. These elitists rape our liberties, steal our wealth, entice our grandchildren into killing people in foreign lands and subject the future of the nation to be slaves to the debt masters.

The American people must exercise the only peaceful option left to restore the federal republic which is rapidly being transformed into a unitary style government like much of Europe. On November 8, 2016, the nation must stay home and not give its consent to continue being abused by the plutocracy of puppets bribed by the global bankers, multinational corporations and foreign state lobbyists.

Abstinence is not benign as some would believe, it is a very powerful check on government when it becomes so infested with opportunists who pursue their own self-serving aggrandizement through the passage of law and regulation to benefit themselves and their criminal syndicate. Without a democratic mandate the cabal cannot hold power and therefore the legislative function of law making is extinguished. The bureaucracy remains in place until the fiscal budget ends in October of the following year which means social security payments will still be made, Medicare claims will still be processed and other central government functions will continue. During those 10 months, the people must demand from the governors of each of their respective States new elections with candidates who are independent of the two-party dogma that has corrupted Washington, DC. An implied vote of 'No Confidence" or "None of the Above" is the only sensible way to end this long running nightmare of tyrannical fascism and nationalism that is destroying the country.

The motto of new liberty must be, "Dissolve it, start over!"

Posted by: PokeTheTruth | Jun 1 2015 22:11 utc | 18

So much for the surplus value of labor... All surplus and no labor... The global capitalist system has become bulimic.

Posted by: chuckvw | Jun 1 2015 23:26 utc | 19

I remember in school in the early 1980's a teacher said something really disgusting to the class: "want to boost an economy, have a war" (clearly the powers that be have made sure that there propaganda gets fed to the public) another ugly thing a teacher tried to push was the notion that WWII's economic effect was some sort of special boost yet at the same time trying to obscure the basic fact that it was government spending that took us out of the depression so war was not needed at all. A lot of work has gone into pushing the manipulative propaganda which is meant to manipulate and sell the agenda of the powerful. How it was presented was "FDR tried the New Deal but it took WWII to get us out of the Great Depression." The framing of it that way is intentionally manipulative in order to obscure the role government spending had in getting us out of the depression and it is phrased that way to sell war.

Posted by: Tom Murphy | Jun 2 2015 0:59 utc | 20

in re 14 --

Nor did they suffer from overproduction of T-34's, even though they cut cost and production time in half. But they still had sufficient to defeat Hitler, thank Ford! The Space Station is in trouble if there are shortages of Proton rockets. And the Federation is still enjoying some Union leftovers in education and healthcare, see Lisa Marie White's accounting of why American liberals are wrong about Russia.

For an artistic take on overproduction in capitalism, see Brave New World. Ending is better than mending!

Whatever happened to waste not, want not? Just a throwaway line....

Posted by: rufus magister | Jun 2 2015 1:08 utc | 21

Piotyr Berman @ 16

I think you're on the right track. Before capitalism ran amok and metastasized into a global zombie, there were guilds. I believe the Netherlands had a rich history of those organizations. These were created to protect the rights and privileges of members (to be sure); but they also preserved and improved the skills, and passed these on through apprenticeship. The obsession in consumerism is about having something brand new, and also relies on planned obsolescence, which needs to produce shoddy goods such as plastic footwear, that will be discarded as junk in a few months. Having things made which are durable enough to go through several cycles of repair, would moderate the overheated production.

If labor is expunged by automation-crazed corporations; then war or revolution, or even both at once, is possible. The cataclysmic outcome that b sketched out is then possible. Of course it's all very short-sighted; but I once read somewhere that at the onset of the 1930s Great Depression, the capitalists examined the option of reducing working hours for everyone so that workers might still muddle through.

On closer examination, capitalists calculated that dumping workers into the trash heap would add a few dollars more to the corporate bottom line, and be more agreeable to shareholders.

Posted by: Copeland | Jun 2 2015 1:12 utc | 22


Since you mentioned Karl Marx, the exclusion of a very valid third option, revolutionary war/class struggle, makes itself evident. From the trend we witnessed after WWII, we cannot expect as you correctly noted, a redistribution of wealth out of the greedy and gluttonous transatlantic empire and its minions, since concentration, centralization and consolidation of capital has been the order of the day ever since. The other major trend after WWII has been imperial wars, either by proxy or direct intervention, fought against countries that followed the path to independence from colonial powers by means of revolutionary wars, in Asia, Africa and Latin America. The potential for another period of revolutionary war is real, given the abject misery of the wretched of the earth, which have been left with nothing to lose but their chains. The main obstacle they face is the lack of a scientific tool to interpret their current predicament, and at the same time provide them with a vision of the social paradigm they aspire at, out of the ruins left of their societies. With its inherent limitations given by dogma, Marxism was that tool for Mao, Lumumba, Ben-Bella, Ho Chi Minh, Castro, and many other African, Asian and Latin American leaders who took upon their shoulders to shake their peripheral dependency. Many of them were successful in their revolutionary endeavors, and were able to trace an independent path for their societies, even if burdened with all the problems typical of the “third world.” Nevertheless, even before the fall of the Soviet Union, Marx and Marxism were thrown under a pile of dead dogs, even more after the fall, which was attributed to the utter failure of Marxism as a social science.

Marx and Marxism were part of the “end of history,” a thing of the past, a post-Hegelian utopian philosophy whose ultimate results were the creation of dystopian societies…until the crisis of 2007, when suddenly everybody wanted to understand WTF is a cyclical crisis, and why do they happen. Das Kapital became a best seller in Germany and beyond; becoming a model for new works tailored after Marx’s statistically saturated magnus opus, e.g. Thomas Piketty's “Capital in the Twenty-First Century, ” and others. Despite all the intellectually gifted resisters to the empire, and the vast expansion of knowledge of the digital age, no new revolutionary theory has appeared, able to inspire the masses of dispossessed as Marxism did at the turn of the XIX c., one that changed the course of history forever during the XX c.

It is in this vacuum, a modern epistemological crisis, that the neocons, bastard children of Trotskyism, took ownership of Trotsky’s “Theory of Permanent Revolution,” and turned it into a counterrevolutionary instrument for their nefarious global domination purposes. Hence revolutions became bastardized, categorized by “colors” or “seasons” according to the whims of the vulgar ruling elites, and lost their power to change societies from the bottom up. This crisis of knowledge of their own socio-economic/political conditions are having a profound effect on the masses worldwide, who in many instances rise up against their oppressors, e.g. Egypt/Arab “Spring,” without a leadership, without a clear vision of their goals, without a social agenda that guides their movements, and they end up getting crushed or coopted by the new rulers, toys for the empire games of regime change. These are the “Twitter” and “Facebook” so-called “revolutions,” mass movements with no direction, no aim, and no strategy for social change. What kind of society did the Egyptians, Tunisians, et al want? Did they have a program for the society they wanted to build? Was there a clear strategy and tactics to achieve their goals? “Crisis,” say Gramsci, that giant of Italian Marxism, “is when the old has not died and the new has not been born.” Humanity is now facing an epistemological crisis of galactic proportions, in serious need of a new revolutionary theory that, like Marxism in the XIX/XX c., gives the masses a vision of a future to build with their own hands, and hope there is a better world other than sweat-shops, slavery, toiling without rewards, exploitation, misery, crime, and an ever-growing gap between the ruling elites and the working masses.

Posted by: Lone Wolf | Jun 2 2015 1:46 utc | 23

There could be a helicopter drop ala Ben Bernanke.

I like Gail Tverberg on diminishing returns/oversupply.

I like Andrew Kliman on the declining rate of profit.

Thanks for connecting the dots on this B.

Posted by: Nana2007 | Jun 2 2015 2:11 utc | 24

@12, Sutton is an ass. He pushes the theory that Communism and Fascism are equally bad and what is needed is some mystical third way: Libertarians with their squirrel rifles hunkerin down behind cotton bales. So Wall St. offered Lenin free cash, and he took it! Well, duh!

Posted by: ruralito | Jun 2 2015 2:11 utc | 25

The motto of new liberty must be, "Dissolve it, start over!"

PokeTheTruth@18- I tend to agree, with the caveat that plenty people need to be held accountable.

Texas might be getting that idea.

Posted by: Nana2007 | Jun 2 2015 2:19 utc | 26

PB @ 16, Copeland at 22

Historians of the United Provinces point out that Holland and her allied provinces lacked a sufficient population base to administer and defend the holdings she gained in her revolt against Spain ("The Eighty Years War"). With the loss of revenue, croqetten and circuses became less affordable. The House of Orange were elevated from elected Statholders to Kings, the thinking being a monarchy would better keep the lower classes down than a republic. This environment proved conducive to the spread of revolutionary ideas in the Low Countries after 1789.

Historian of the later Renaissance attribute the decline of the urban republics to several factors. The prevailing aristocratic values induced merchant families to move their capital from commercial and industrial operations to urban and rural real estate -- especially country tracts that came with patents of nobility. Failing that, you could, like the Medici, subvert the Republic with wealth and buy a title from the Papacy or Holy Roman Emperor. And a more mundane factor -- they ran out of good shipbuilding timber.

England for her part had a large population. It had plenty of timber -- North America was a shipwright's wet dream, and before this, measures prioritized available timber for maritime uses.

When elites think protecting domestic markets and workers will add to their bottom line, they will. But if the see money to be made in "outsourcing" and "off-shoring", well, away the factories, jobs, salaries, and purchases from suppliers go.

England began to lose her superiority in textiles and iron and steel to cheaper American and German production. And these two rivals took advantage of what Gershenkron has called "the advantage of the latecomer." The major industrial expansions of both took place in the Second Industrial Revolution, where steel, chemicals, and electrics were the new driving technologies, and both were leaders in these fields. After a rearguard action up to World War II, they accepted de-industrialization whole-hearted under Thatcher.

PTT at 18 -- The elite will be totally fine with abstention. Less voters to bribe. Not only will things continue as they were, we'll have to endure fools like David Brooks lecturing us on our lack of civic engagement.

Go to the polls. If you can't bring yourself to vote for the left(over) parties down the ballot, write in you favorite choice -- "none of the above" will do. And not just for President, do it for all the races. The rightists will bring more of the same, only with more Pharisee-style false piety or boring Ayn Rand novels. Friends don't let friends vote Tea Party.

Lone Wolf at 23 -- Time permits me only to say -- Gramsci Rules!

Posted by: rufus magister | Jun 2 2015 2:44 utc | 27

I think the over-production we see is caused by zombie companies all around the world, that don't generate any profit, sustained by zero interest rate loans, over produce goods, causing a glut of products, and cause price deflation.

Posted by: meofios | Jun 2 2015 2:55 utc | 28


The 'elites' spend billions of dollars every election cycle to encourage or frighten people into the voting booth. Without that 'consent of the people' their minions have no mandate or legal right to rule over us. Throwing your vote away by voting for or against someone or even writing FU on the ballot is still supporting the corrupt system that they will continue to use to rule and if voting could change anything, it would be illegal.

This doesn't mean that elections and voting may not someday be useful again but there is no possibility they can now be used to change our corrupt system.

Posted by: Wayoutwest | Jun 2 2015 3:58 utc | 29

Posted by: Wayoutwest | Jun 1, 2015 11:58:39 PM | 29

I agree with that.
Lone Wolf @ #23's Gramisci perspective is on the money.
Russell Brand, my favourite non-revolutionary revolutionary, makes the (laboured) point that a govt elected by less than 50% of eligible voters cannot claim legitimacy. But Gramisci was righter than everyone else in pointing out that “Crisis is when the old has not died and the new has not been born.”
It should be obvious to everyone, by now, that Twitter and Facebook "revolutions" aren't revolutions, or journeys, and have no useful or coherent destination.

Posted by: Hoarsewhisperer | Jun 2 2015 5:32 utc | 30


This is the 'atto-fox problem' in biology, addressed by the Lotka-Volterra equation in Brauer, F. and Castillo-Chavez, C., Mathematical Models in Population Biology and Epidemiology, Springer-Verlag, (2000), and many others, the bifurcation relationship allowing two mutually independent steady-state solutions, one with higher predation and lower prey population used to justify higher resource extraction rates, ...but it remains just a theory and requires a rigorous definition of who is the 'prey'.

Is the prey the poor and downtrodden? No, those are the losers.

We can all agree the 'prey' is ultimately the energy needed to continue surviving for another day, not the staid pedantic 19thC Marxist 'Das Kapital', but just the 'real' value of evolutionary currency and trade. We've transferred the value of energy into gold, then fiat paper today 1's and 0's, and now there's too many of them. They'really part of a non-viable fractional-reserve usury-based ecosystem that's running out of balance, Koyaanisqatsi.

The rich prey on the energy developed by the poor through usury and credit, but also, the socialist state preys upon the destitute as a source of $Bs public program, using public tax extraction to generate private wealth in much the same way as usury and credit. More rice tents!!

If we de-anthropomorphize the Marxist class-struggle dialectic, and the rabbinical Maker-Taker meme, the answer pops right out like a jujube: not overproduction, not QEn, not oligarchs and monopolies, but usury and taxes.

Wah-lah. Usury. Taxes. Same as it ever was. Que sera, sera.

Posted by: Chipnik | Jun 2 2015 11:25 utc | 31

Wayout at 29 --

The standard line of us reds is that participation in elections is a useful tool for educating the masses and marshaling and mobilizing progressive forces. And that mass action, e.g., the general strike, is the real means of social change.

Bhagavan Chippy at 31 --

I'd stick to physics and Eastern mysticism.

Predation occurs between, not within species. Socialism is about the workers controlling the means of production that they service. Social welfare capitalism bought their birthright for "a mess of pottage" (Gen. 25: 29-34). But austerity is taking that off the table.

I find the overtones of the "rabbinical meme" and the emphasis on usury and taxes disturbing. See this handy comparative chart; fascism is "Strongly against international financial markets and usury." The Abolition of Income Tax and Usury Party is recent spawn of that brood.

Our own home-grown TeaBaggers don't feel too good about it either.

You might consider a clarification or restatement of your position.

Posted by: rufus magister | Jun 2 2015 12:16 utc | 32

"We've transferred the value of energy into gold, then fiat paper today 1's and 0's, and now there's too many of them"

Well, there;s too much savings (accumulated financial wealth) but not enough spending. We know this because we have too much unemployment. Properly targeted spending cures unemployment.

Spending is a function mainly of money printing, existing money (previously created) mostly just earns interest and so is parasitic to the system in the net (economic rent), which leads to a paradox.

In the old days in the U.S. between 1933 and the mid-1960's the top marginal tax rate remained around 90% and then around 70% until Reagan was elected.

This maintained some sort of balance between money printing and saving. Now, money creation just piles up at the top which creates huge inequalities of power.

Posted by: paulmeli | Jun 2 2015 12:28 utc | 33

It's simple to conclude that the "ruling class" and their spokes-people are if not absolutely greedy and mendacious, then at least criminally stupid. But I think that's short-sighted. The financial crisis could be resolved in a moment's notice, since money is more or less an "imaginary" construct, especially now that it's just 1s and 0s, as was mentioned. The population is clamoring for "higher wages," but if we here were the small ruling class, we must know that "higher wages" means more mouths to feed from a growing population. Or, it means more disgruntled minions crying for "revolution" carrying pitch forks to the very gates of the gated communities and wilderness tracts where the very wealthy keep themselves concealed, when calamity strikes and food is scarce.

And the "ruling class" despite their equivocations, surely discusses amongst themselves the growing unsustainability of the ever encroaching environmental calamities, and dwindling resources, etc. What wars are being threatened between great powers, are are not about the resolution of world wide perils in terms of repairing the global over indulgence in carbon based technologies, in fact they seem to be based on increasing their use and further extracting scarce resources and more rapidly burning down the house.

Intelligent discussions are conducted here at MOA, it would be foolish to conclude that some semblance of intelligent discussions are not also held in the upper rooms and chambers of power, stripped of pretense and falsehood. If so, if one of us were sitting with those chosen few, I'm sure we would come to the conclusion that we were in a serious fix. And our backs are up against the wall. "Austerity" would be pushed to its extremities to decrease productivity and reduce the population through Urie's principle of immiseration.

Put yourself in the shoes of this ruling class, our primary MO would no doubt be self-preservation from the encroaching revolutions and chaos, and destruction, and a preservation of some kind of status quo. Otherwise, all that we had, were we sitting on the porch overlooking our estate, would be gone.

If nothing else works like the current financial immiseration to reduce the current state of affairs to a simpler and more manageable system where our ruling class rank and stature in society remained permanent and secure (because really our whole being has been reduced to measuring ourselves by our imagined sense of self-worth determined by our wealth, etc.) but the elimination of so many annoying minions through some kind of controlled burn, like a war, then certainly we would go about that?

I'm sure nothing pleases these folks more but for us to deride them constantly and poke fun at their ineptitude and call them all sorts of "evil," because that would just be so much more grist for the mill.

Posted by: geoff29 | Jun 2 2015 13:24 utc | 34

Todays lying times says polls show people want campaign finance reform.But you can bet that the Zionists don't.Same with Rand Paul and the NSA.Wapo?says,insurers are raising rates over future uncertainties.Hey thanks Obomba!
What a colossal fraud,FIFA notwithstanding!HoHo!

Posted by: dahoit | Jun 2 2015 14:19 utc | 35

There is a famous anecdote about a General Motors executive showing off their newest automated assembly line to a United Auto Workers Union boss and remarking "Not one of them is a union member!"

To which the UAW boss replied, "And not one of them is a GM customer, either."

Posted by: ralphieboy | Jun 2 2015 14:25 utc | 36

It sure would be interesting to see a respectable politician i.e not a lefty firebrand, getting serious about the 1% just to watch how they deal with him/her.

Posted by: dh | Jun 2 2015 14:36 utc | 37


The Reds should have stuck to Armed Revolution because the voting program they follow now has led to political oblivion, even the RCP is little more than a Cult Of The Leader that the FBI probably doesn't waste much time on except for cheap laughs. They don't even rate much on Google and a RCP search produces 'Rich Client Platform.

Posted by: Wayoutwest | Jun 2 2015 14:50 utc | 38


You lost me at 'respectable politician', dh!

Posted by: Wayoutwest | Jun 2 2015 14:54 utc | 39

There's a lack of demand worldwide because since say 1981 workers/employees have received wage increases below inflation. In that regard workers have seen their purchasing power being reduced for over 30 years. No wonder, households/workers aren't able or willing spend lots of money.

From 1981 up to 2008 households/workers were willing to increase their debtload. By going deeper into debt those households were able to keep their spending at a reasonable level.

But since 2008 households are reluctant to go deeper into debt and that has weakened the worldwide economy.

As long as workers don't get wage increases at or above inflation (levels) or are willing increase their debtloads (again) there's no chance for a economic recovery.

Posted by: Willy2 | Jun 2 2015 15:15 utc | 40


you normally publish highly insightful analyses and information nuggets that I have trouble finding elsewhere. On this topic, however, you jumped short.

Yes, we are struggling with overproduction and lack of consumption, but it is important to know where this development comes from. If you look at historical data, then you might realize that the purchasing power of people in the Western World started decreasing at the start of the 80s last century. The *growth* in purchasing power decreased since the 1960s. And debt is a significant, but small, part of it. The average growth in GDP has been consistently shrinking since the 1960s. Can you even remember a time, when the economy in one of the Western countries has been growing by more than 4% YoY? I don't. For Germany you have to go back to before the 70s oil crisis to find two years with a consecutive growth of 4% for more than one year. I wasn't even born then.

The main problem is this: We have to invest more and more energy to pump the same amount of oil, mine the same amount of ores and produce the same amount of food. And there are more and more people living right now.

This main problem, the diminishing returns, makes it that people have to spend more and more to afford the basic necessities. Corporations and enterprises react to their diminishing sales by cutting their costs to pay their loans. The easiest way to cutting costs is letting go of workers.

Since 2008, the crash happened after the crash of the oil price, Western Central Banks needed to keep their interest rates a 0%, because there was no growth. If they are ever crazy enough to raise interest rates, they will be blamed for the worst market crash in human history.

The reason is that we have reached the limits to growth. There is no more growth to be had for the industrialized civilization. That is over. For good. Unless we find an unlimited energy source that is very, very cheap. None is on the horizon so far.

Currently, a country can only produce growth, for a very short time, at the expense of others. That too will stop. Then, in a few years at the latest, global GDP will start to shrink. That is when the wars will start in earnest. That is when the killing and dying will start in earnest.

That killing and dying will not stop, until the world will have found a means to reduce its energy consumption to the physical and geological realities out there. That will take a while, and I have no clue how the world will look like.

Best wishes,

Posted by: HnH | Jun 2 2015 15:23 utc | 41

@39 Yes. Of course I meant respectable in the eyes of people who vote. I'm not looking for a miracle.

Posted by: dh | Jun 2 2015 15:36 utc | 42

Sorry, but I again disagree.

First of all, the robots in the example are there because there the Chinese labor pool has been growing slower than the economy for years now.

Secondly, robots need to be made by somebody. They cost lots of money. They have to be maintained and often upgraded. The physical operation of the plant might take 90% less workers, but the remaining workers are paid as much or more as the previous entire work force.

Thirdly, the production noted in the article isn't for China - at least, not yet. It is for the 1st world. Thus the "replacement" of the worker is a dynamic of cheaper labor elsewhere rather than actual replacement with mechanization.

As for economics: an entire series of fallacies.

a) Overproduction. While I will certainly agree that the 1st world can do with less, this is irrelevant. Every labor saving device ever created has ultimately had the labor savings spent on higher standards of living. There is nothing to indicate any change in this dynamic. Thus while we no longer have tens and hundreds of thousands of workers making automobiles, we now have tens and hundreds of thousands of workers doing other things like fracking oil and natural gas, servicing the cars via a nationwide array of repair, refueling, and upkeep (car washes, etc). Equally, we don't drive Model T's anymore. Ford used to be nearly entirely self sufficient outside of the metals - this is no longer true. Ford doesn't make computer chips or any of hundreds of parts in present day Fords.

b) Labor isn't the problem - consumption is. In terms of overall productivity, Americans as a whole are producing more than ever before. Hours worked has been inching down, but hours of work isn't what dictates the actual output - it is a function of productivity times hours worked, and that product continues to increase overall.

The primary difference between today and post World War II is that of the economic rewards. Americans who aren't in the managerial class get paid a smaller percentage of the overall production created than ever before. This also has been decreasing for decades.

Thus the problem isn't one of too much productivity or too much automation - the problem is one where the rich get all the money.

Posted by: ǝn⇂ɔ | Jun 2 2015 15:38 utc | 43

"The main problem is this: We have to invest more and more energy to pump the same amount of oil, mine the same amount of ores and produce the same amount of food."

This may well be true, but if one looks at the history of spending growth (or more accurately public investment) by the U.S. federal government one will see that spending growth suddenly dropped by 1/3rd in the early 1980's (around the beginning of Ronald Reagan's presidency). This can be observed visually very easily by looking at the FRED series FGEXPND on a log scale…the breakpoint is obvious and so is the one at around 2010.

U.S. federal spending has averaged 7% since WWII overall…about 9% through 1985 dropping to about 5% thereafter. Since 2010 growth has been an anemic 1.6%.

It's no wonder GDP growth has been on decline since the 80's, and it's no wonder we are experiencing a slowdown now.

Posted by: paulmeli | Jun 2 2015 16:16 utc | 45

Only two solutions?
Can't we as a society come up with more then just 'either' and 'or'?

Posted by: Penny | Jun 2 2015 16:32 utc | 46

@43 ǝn⇂ɔ quote.. "Thus the problem isn't one of too much productivity or too much automation - the problem is one where the rich get all the money."

who is buying the produce ǝn⇂ɔ ?

Posted by: james | Jun 2 2015 16:34 utc | 47

@46 A lot of money goes into remodelling. Look at the proliferation of home improvement stores.

Posted by: dh | Jun 2 2015 16:38 utc | 48

@47 dh.. the big money is in the mic/fic complex... chump change in most other areas relatively speaking.. i think the big money is coming from gov't spending.. it is a self sustaining vicious circle for everyone.. that's my simplistic rendition of it! who pays for those orange jump suits anyway?

Posted by: james | Jun 2 2015 17:22 utc | 49

@48 Not everybody in the US is in jail or on food stamps. There is a lot of disposable income in the US. People buy new vehicles, improve their homes, upgrade their entertainment systems, send kids to college, go on trips. The trick is to keep interest rates low and keep printing money. So far it seems to be working.

Posted by: dh | Jun 2 2015 17:33 utc | 50

sorry for the off topic post but Blatter just quit from FIFA. and the Empire has a couple of a targets in its sights.

The [english]FA’s chairman, Greg Dyke, is delighted and asks questions about what will happen to the two World Cups (2018 and 2022) that are at the heart of the corruption scandal that has enveloped Fifa: “Something has come out of the events of last week that has caused Mr Blatter to resign … He’s gone. At long last we can sort out Fifa. We can go back to looking at those two World Cups. If I were Qatar right now I wouldn’t be feeling very comfortable.”

Posted by: heath | Jun 2 2015 17:44 utc | 51

@50 Obviously the next step will be for Greg Dyke and Co to get their own guy into the top job.

Posted by: dh | Jun 2 2015 17:48 utc | 52

@geoff29 @34

And the "ruling class" despite their equivocations, surely discusses amongst themselves the growing unsustainability of the ever encroaching environmental calamities, and dwindling resources, etc.

I am sure they discuss those and many other subjects under heaven, problem starts with their conclusions. Ever heard of the “smart idiot effect”?

(...)Buried in the Pew report was a little chart showing the relationship between one’s political party affiliation, one’s acceptance that humans are causing global warming, and one’s level of education. And here’s the mind-blowing surprise: For Republicans, having a college degree didn’t appear to make one any more open to what scientists have to say. On the contrary, better-educated Republicans were more skeptical of modern climate science than their less educated brethren. Only 19 percent of college-educated Republicans agreed that the planet is warming due to human actions, versus 31 percent of non-college-educated Republicans.

For Democrats and Independents, the opposite was the case. More education correlated with being more accepting of climate science—among Democrats, dramatically so. The difference in acceptance between more and less educated Democrats was 23 percentage points.

This was my first encounter with what I now like to call the “smart idiots” effect: The fact that politically sophisticated or knowledgeable people are often more biased, and less persuadable, than the ignorant. It’s a reality that generates endless frustration for many scientists—and indeed, for many well-educated, reasonable people.(...)

I'm sure nothing pleases these folks more but for us to deride them constantly and poke fun at their ineptitude and call them all sorts of "evil," because that would just be so much more grist for the mill.

Well, their lack of awareness is legendary, and their indifference to their damage on the planet and the suffering of others is their trademark. They might laugh all the way to the bank, in total ignorance of the legacy their greed and possessiveness are leaving in their wake.

Posted by: Lone Wolf | Jun 2 2015 19:09 utc | 53

From Cooperation to Competition -
The Future of U.S.-Russian Relations

May 2015

A Report on an Interdisciplinary Wargame conducted by the
U.S. Army War College

Carlisle, Pennsylvania

Posted by: Lone Wolf | Jun 2 2015 19:52 utc | 54

@49 dh.. i know that but thanks for the reminder..almost zero interest rates is the name of the game and has been for some time.. if people had a different interest rate on their line of credit - the jig would be up.. for now it is 'free money' with anyone silly enough to not 'invest' in the wall st casino, or is in any way pragmatic financially - will watch what money they have devalue quicker then you can say 'quicksand'..and, i am always reminded of the racial divide when i think of the states - food stamps verses big brand new automobiles.. what a weird culture.. canada isn't a lot different in some regards.. it is and it isn't..

Posted by: james | Jun 2 2015 20:04 utc | 55
by Chris Hedges
Karl Marx exposed the peculiar dynamics of capitalism, or what he called “the bourgeois mode of production.” He foresaw that capitalism had built within it the seeds of its own destruction. He knew that reigning ideologies—think neoliberalism—were created to serve the interests of the elites and in particular the economic elites, since “the class which has the means of material production at its disposal, has control at the same time over the means of mental production” and “the ruling ideas are nothing more than the ideal expression of the dominant material relationships … the relationships which make one class the ruling one.” He saw that there would come a day when capitalism would exhaust its potential and collapse.
The final stages of capitalism, Marx wrote, would be marked by developments that are intimately familiar to most of us. Unable to expand and generate profits at past levels, the capitalist system would begin to consume the structures that sustained it. It would prey upon, in the name of austerity, the working class and the poor, driving them ever deeper into debt and poverty and diminishing the capacity of the state to serve the needs of ordinary citizens.
The corporations that own the media have worked overtime to sell to a bewildered public the fiction that we are enjoying a recovery. Employment figures, through a variety of gimmicks, including erasing those who are unemployed for over a year from unemployment rolls, are a lie, as is nearly every other financial indicator pumped out for public consumption. We live, rather, in the twilight stages of global capitalism, which may be surprisingly more resilient than we expect, but which is ultimately terminal. Marx knew that once the market mechanism became the sole determining factor for the fate of the nation-state, as well as the natural world, both would be demolished. No one knows when this will happen. But that it will happen, perhaps within our lifetime, seems certain.

“The old is dying, the new struggles to be born, and in the interregnum there are many morbid symptoms,” Antonio Gramsci wrote.

What comes next is up to us.

Posted by: okie farmer | Jun 2 2015 20:13 utc | 56

@54 Canada is getting hurt by low oil prices at the moment. Good for drivers, bad for mutual funds. I doubt if it will affect the standard of living much.

Posted by: dh | Jun 2 2015 21:15 utc | 57

lonewolf #52

Your comment reminds me of something once said by a retired law professor. "We spend considerable effort looking for bright young students for admittance into law school. Then we spend the next three years beating out their common sense". Having been involved in graduate school education during my career that statement also applies to grad student education in English and Social Science departments.

Posted by: ToivoS | Jun 3 2015 0:18 utc | 58

Wayout @ 38

Electoralism is a tactic, not a strategy for much of the revolutionary left. This was settled for Marxists by the comdemnation of revisionism before the Great War, and the subsequent split between revolutionary communists and reformist socialists after the October Revolution. One participates in elections not in the expectation of voting socialism in, but for the mass agitational possibilities.

The reformist left achieved the sort of power they desired through the means they preferred. As evidenced by the political fates of Labour, Parti Socialiste, and the Social Democrats, they failed to transform society and are now reduced to arguing for a kinder and gentler austerity. The misinterpretation of the collapse of the Soviet Union as "the end of history" produced demoralization and ideological confusion. The right, not the left, so far stands as the greater beneficiary of popular discontent generated by the 2008 Crisis.

I can't speak for the Maoists of Chairman Bob's RCP. Though "Revolution in the 80's -- Go for it!" was a memorable slogan, I never took them seriously enough to follow the evolution of their political lines.

I can say any no. of tendencies amongst the Trotskyist Fourth International have kept the faith (so to speak). Given their small size, agitation and education will of necessity remain the order of the day.

The commitment is not to armed insurrection per se, but to the use of all means of struggle, both parliamentary and extra-parliamentary. What is I believe Engels last work, the 1895 Introduction to The Class Struggles In France discusses developments in weaponry (particularly the bolt-action rifle) that made a military victory in street fighting, a la 1848, increasingly unlikely.

With this successful utilization of universal suffrage, an entirely new mode of proletarian struggle came into force... [as] the state institutions, in which the rule of the bourgeoisie is organized, offer still further opportunities for the working class to fight these very state institutions.... And so it happened that the bourgeoisie and the government came to be much more afraid of the legal than of the illegal action of the workers' party, of the results of elections than of those of rebellion.

For here, too, the conditions of the struggle had essentially changed. Rebellion in the old style, the street fight with barricades, which up to 1848 gave everywhere the final decision, was to a considerable extent obsolete.

Let us have no illusions about it: a real victory of an insurrection over the military in street fighting, a victory as between two armies, is one of the rarest exceptions. But the insurgents, also, counted on it just as rarely. For them it was solely a question of making the troops yield to moral influences.... If they succeed in this, then the troops fail to act, or the commanding officers lose their heads, and the insurrection wins. If they do not succeed in this, then... the superiority of better equipment and training, of unified leadership... makes itself felt.

It is the unity and self-discipline of the class-conscious proletariat that will make for revolution. Luxemburg's 1906 essay on The Mass Strike, the Political Party and the Trade Unions drew the appropriate conclusions just over a decade later.

The mass strike is the first natural, impulsive form of every great revolutionary struggle of the proletariat and the more highly developed the antagonism is between capital and labour, the more effective and decisive must mass strikes become. The chief form of previous bourgeois revolutions, the fight at the barricades, the open conflict with the armed power of the state, is in the revolution today only the culminating point, only a moment on the process of the proletarian mass struggle.... [The mass strke] unites with the revolutionary period and enormous cultural work in the most exact sense of the words: the material and intellectual elevation of the whole working class through the “civilising” of the barbaric forms of capitalist exploitation.

It is worth noting that revisionist opposition prevented the Second International from formally adopting this as a tactic. Accordingly, the 1907 Stuttgart Resolution on Militarism limited itself to generalities: its constituent parties would "prevent the outbreak of war by the means they consider most effective, which naturally vary according to the sharpening of the class struggle and the sharpening of the general political situation."

Posted by: rufus magister | Jun 3 2015 3:55 utc | 59

Lone Wolf at 23 --

I can add little to your perceptive analysis, except to argue that historical materialism still offers the only way forward.

The fundamental problems that Marx and Engels described - the contradiction between the social nature of production and the private control of the appropriation of the surplus, and the tendency for the rate of profit to fall and the resulting problems of over-investment and -production - are unchanged.

The Bolsheviks knew that pitiful state of socio-economic development in Russia meant that there was not the necessary industrial base for "to each according to their need." They counted on revolution in Western Europe -- and nearly got it in Berlin and Munich in the aftermath of the Great War.

I see the failure of the socialism afterwards due not to the Communists, but to the revisionist Social Democrats. They made a bargain with the rump of the Germany Army, organized in the various Freikorps (an importance source of later brownshirts), to snuff out the Communists and allow them to fold the Second Reich into the Weimar Republic. That worked out well, right?

So as a matter of defense, "socialism in one country," forced-march industrialization, and the cult of personality. Khrushchev and Gorbachev for their parts tried to eliminate the effects of these distortions, and but for Western intervention (financial and ideological, not military, as in 1918) Gorbachev might have done so.

The needed re-statement of historical materialism must of necessity begin with a proper, objective assessment of the legacy of the Soviet Experiment.

Posted by: rufus magister | Jun 3 2015 4:24 utc | 60

okie farmer at 55 --

I had a quick skim of Hedges while at lunch earlier today. Good stuff. If I might rework one of Tricky Dicky's re-election slogans -- "Marx & Engels: Now More Than Ever."

Thanks for posting it, spared me the need for writing another long-winded post.

Better yet, it saved y'all from having to read or scroll over it!

Posted by: rufus magister | Jun 3 2015 4:31 utc | 61

President Bill Clinton, and those in Congress who revoked the Glass-Steagall Act, should explain before the nation, just why they imagined that human nature had changed, after a few decades had passed, since the Great Depression.

On the Subject of Usury:

I found this, and more, over at the Jewish Virtual Library, and it's interesting reading:

Linked Loans

The steep inflation that has become a relatively common economic phenomenon has given rise to a new financial instrument: loans whose values are linked to the inflation index. This financial instrument is intended to protect the lender from a decrease in the value of his loan in terms of its buying power. In a linked loan, the borrower undertakes to repay the amount of the loan linked to the value of a foreign currency, to the cost of living index, or to the building price index, as agreed between the parties. The issue of linked loans is problematic vis-à-vis the prohibition on interest and remains complicated and convoluted.

The central problem regarding this context is the tension existing in defining the meaning of money: should it be defined in nominal terms, or should it be defined in real terms (i.e., its real value)? During a period of inflation, the borrower will insist on repaying the loan according to the specified, nominal amount of the loan, while the lender will argue that what is of importance is not the nominal value of the loan, but rather its actual value, that is, the purchasing power of the money in the marketplace of goods and services. It is clear that, if the nominal value is the criterion, any nominal addition will be considered as prohibited interest.

Some applications of usury, in this tradition of religious law, are considered more reprehensible than others. Taking undue advantage of your indigent brother, or bilking the poor with this scheme, are examples of the worst moral posture.
It has been said that the prohibition on interest rests on two grounds: firstly, that the prosperous ought to help the indigent, if not by gifts, then at least by free loans; and secondly, that interest (or excessive interest) was seen to lie at the root of social ruin and was therefore to be outlawed in toto. Both these considerations would apply only internally: there could be no obligation to help foreigners, nor was public policy concerned with their well-being. Moreover, moneylending transactions with foreigners were motivated solely by the legitimate desire to make profits, while the internal economy was eminently agrarian and had no money markets of any importance. It follows from the charitable nature of the prohibition on interest that its violation was not regarded as a criminal offense to which any penal sanctions attached, but rather as a moral transgression; in other words, while taking interest would not entail any punishment, granting free loans and refraining from taking interest would lead to God's rewards and blessings (Deut. 23:21 ...[...]

"He that augmenteth his substance by interest and increase" is listed among the "evil men" (Prov. 28:8); while "He that putteth not out his money on interest" is among the upright and righteous (Ps. 15:5).

While biblical law allowed the taking of interest from foreigners, excluding alien residents (Lev. 25:35), talmudic law extended the exemption: "One may borrow from them [foreigners] and lend them on interest; similarly in the case of an alien resident" (BM 5:6, 70b–71a). However lawful interest transactions with foreigners were, they were looked upon with disapproval: some jurists held that they were permissible only when no other means of subsistence was available (BM 70b); others would allow them only to persons learned in the law, as the uneducated might fall into the error of believing that interest is permissible in general (BM 71a). The psalmist's praise of the man who would not lend his money on interest (Ps. 15:5) was interpreted to apply to the man who would not take interest from a foreigner (Mak. 24a).
We cannot seriously respect the idea that capitalism is a failure because the split is not right for the overseer class on this plantation. The obsession implanted in the people is to consume in disproportion to their needs, to borrow dangerously and foolishly. And austerity is the final, criminal stage in this capitalist nightmare, when the process of extraction and theft is extended further against people who already have been driven into ruin.

The barbarism of this system continues to grow, punishing the vulnerable and the poor, and rewarding the treachery of the political class, which would turn over the sovereignty of governments, and the jurisdiction of the nation's judiciary, to direct corporate rule.

Posted by: Copeland | Jun 3 2015 4:33 utc | 62

en1c at 43 --

You might not have noticed, I finally saw your latest posting on the "Movie Recommendation" open thread and replied.

As you were kind enough to answer my query, I wanted to let you know -- that was the name I was thinking of. Have a look here, if you are so inclined.

Posted by: rufus magister | Jun 3 2015 4:39 utc | 63

Hmm, odd, thats pg 1, try here, look for 191.

Posted by: rufus magister | Jun 3 2015 4:43 utc | 64

@rufus magister@59

The needed re-statement of historical materialism must of necessity begin with a proper, objective assessment of the legacy of the Soviet Experiment.

As a comprehensive theory for socio-economic, political and historical analysis, and for interpretation of complex social dynamics, I fully agree, for as long as rotten capitalism rules, historical materialism will be the only theory to fully explain the inner workings of a market-based system. As a revolutionary theory, Marxism/historical materialism need to be rethought at the light of the revolutionary experience of the XX c., not only of the Soviet Experiment, but the entire legacy of the application of historical materialism as a social paradigm in the former USSR, China, et al.

The dogmatic traits Marxism suffered once it became the ideological base of the so-called “socialist” societies (in essence state-capitalism with a five-year plan) need to be reexamined, a revitalization of Marxism is impossible without it, let alone it becoming an instrument for social change. The damage done to the revolutionary movements the world over, which became appendages to the Soviet Union first, via the III International, and later to the Chinese after the disgraceful Sino-Soviet split, can be felt even now. Revolutionary movements lost their independence of thought and action, and those who dared to question the Moscow party line, were either shot, ostracized, sent into exile, or forced into the creation of a Maoist alternative.

For example, the imposition of the “popular front” by Moscow pre and during WWII, as a world-wide recipe in the struggle against Nazi-Fascism, blocked many revolutionary movements from taking power, and tamed many communist parties in Europe and elsewhere into becoming cogs within the capitalist system. The Sino-Soviet split only contributed to a greater confusion among the masses world-wide, and to a permanent division within the revolutionary movements that only benefited the empire and the ruling classes in the capitalist world. I could go on with many more examples, but your grasp of history makes it unnecessary.

The point I left without much elaboration in my former post for space considerations, has to do with the need for that “objective assessment” you pointed out, of the reasons why Marxism/historical materialism has lost its position as a vanguard theory of revolution, leaving the masses lost, confused, making SMS “revolutions” with no direction, no purpose, no goals, no program, and no strategy for change. That assessment needs to be done by “organic intellectuals” (Gramsci), integrated into the new wave of revolutionary movements that will give life to a refreshed, rejuvenated theory of revolution, one that will give the capitalist system its final push into the “trash bin of history” (Trotsky).

(Sorry for my brief answer to a complex subject, I only found your comments a bit late into the night.)

Posted by: Lone Wolf | Jun 3 2015 8:38 utc | 65

32, 33, 34, 41

These lengthy Aristotelian teleological passages you describe are all just popular memes re-pablumized. The relentless 'Now' of history being rewritten into some political branding.

The old growth forest, on the other hand, doesn't suffer from these memes. It absorbs all the energy it needs to survive for another day, and redistributes that energy through the forest ecology, and has, succesfully, for 1,000,000s of years. The difference between old growth forest, or any mature stable biome, and the various conflicting human species, is simply reduced, once you eliminate all the pottage and verbiage, to --- usury and taxes.

The infamous Vampire Squid nee Uncle Samuel, endemic to all institutional human societies.

All the rest of it is bullshit media and politics: Red Army versus White Army! Red Team versus Blue Team!! Kapital versus Labor!!! Blacks against Whites!! Muslims against Jews!
You will never, ever, ever, hear a politician talk about meaningful elimination of usury or taxes. That gigantic sonic void amidst this hellish cacophony is all you need to know!

Le petite morte, how's that? The Touch. The Bite. The Sting.

Posted by: Chipnik | Jun 3 2015 11:33 utc | 66

Lone Wolf at 69 --

No problem, solid answer, thanks.

I had to wait myself 'til time permitted my query. I was worried you were one of those searching for the mystical "Third Way" btw. labor and capital. Stalin restrained the Fr. & It. CP's post WWII as well.

A few of the CP dissenters did migrate to the Fourth International. IMHO, Trotsky's analysis of the Soviet Union in The Revolution Betrayed was spot on. Either renewed proletarian revolution, or a return to capitalism by a section of the apparatchiki. DC made sure they got the later.

Off to work now myself.

Posted by: rufus magister | Jun 3 2015 11:41 utc | 67


The Butterfly Effect

SecState Kerry-Kohn breaks a leg.

77,000,000 Iranians starve for another month or two.

7,125,000,000 Earthlings pay $10 a barrel extra for sanctions-spiked oil.

$60,000,000,000 or $70,000,000,000 disappears into the desert sands on a sheik's camel.

Posted by: Chipnik | Jun 3 2015 11:44 utc | 68

Bhagavan Chippy at --

How is usurious elites vs. virtuous peasant-artisans fundamentally different than the binaries you list?

I think you're quite correct, I've heard all I need to, my GreenTea Party friend.

Aristotelians of the worlld unite! Cartesian dualism rules!

"Oh can't you see, it's Ontology? Every proposition you make, every syllogism you take, it's the logic, too." (With apologies to Sting and his bandmates.)

Posted by: rufus magister | Jun 3 2015 11:59 utc | 69

Financialization has been setting "policy" for far too long (stealing from those that actually produce and save to give to those that profit by pushing paper). Time for the laws of physics to re-assert themselves.

Posted by: Cynthia | Jun 3 2015 13:06 utc | 70

@ 64
The content of your comment is rubbish.

This can be splendidly demonstrated with your forest metaphor. The forest does not grow any further because the adjacent area does not allow further growth (i.e. geology, soil, climate, competitors, natural enemies).

It is one of the fundamental drivers of any life-form to grow and multiply until it can grow no further and its ecological niche is filled. If another ecological niche can be filled any life-form will do so. Humans do it, chimpanzees do it, fish do it, plants do it, bacteria do it. Every living thing does it. It is one of the imperatives of life.

Humankind had for millennia an ecological niche of about 1 billion. This changed drastically, when hydrocarbons (coal, oil and gas) became additional energy sources that could be exploited. This allowed the rise to 7+ billion. This happened with or without capitalism.

Capitalism can be seen as an economic system that imitates that need for growth. That's why it managed to outcompete any other economic system, e.g. communism.). It did this with debt and the coercion of debtors to pay back the debt with interest.

Yes, debt is a fundamental driver of the capitalist system, but it is not the aspect that is the fountain of all evil.

The fountain of all evil is that we cannot forgo, on a global level, our innate drive to multiply and fill every ecological niche that is available to us.

That makes your teleologic rubbish quite irrelevant, since your model does not capture the behavior of the forest, and its reasons to do so, in any accurate way.

Posted by: HnH | Jun 3 2015 15:17 utc | 71

Part of the over-production and stagnation of the economy (taking those on board for now as valid concepts) is due to the replacement of human labor by machines, a process that began way back when but lets consider only post WW2, 1955, 1960, forward.

Production relies on energy inputs - FF and electricity— and what can be done, or not, depends on the availability and price of energy, which is in itself tricky, as supply chains (for energy input and the machinery, other inputs extracted with energy, not to mention yet other raw material inputs such as milk, timber, iron ore, rare metals, etc. also run by machines…) are very long and complex, and rather rigid, not easily ‘malleable’ or ‘changeable’, in a large part because world finance and business is *profit* and *politically* driven; monopolies are built into the ‘free market’; therefore energy supply becomes a geo-world-political cause of war.

side bar: Seeking out cheaper labor was / is one solution but it has a lot of pitfalls and is far more expensive, cumbersome, even dangerous than is ever admitted.

So the model is very fragile, and limping, gasping, because peak-oil, peak energy, and in a way, peak food (machine / transport / tech driven), poor or pretend - corrupt, oligarchic, elitist, corporatist, ersatz democratic, fascist, etc. - Gvmt, and Finance exist only for profits and skimming, yet both hold a great deal of power.

The system is broken, and therefore one sees wealth accumulation (top 15% not 1%), future returns are moot, no uses for the slosh of cash flowing around the world - aka workers are just useless eaters, social aid, food stamps, to stop uprisings, etc. -, with at the same time debts up the wazoo that cannot be honored. And War. Because productivity gains and a new tech and competition and all that jazz don’t furnish enough profits, safe energy routes etc.

Posted by: Noirette | Jun 3 2015 17:28 utc | 72

A note about American manufacturing, and the impact on geo-political situation. NYT today:

Pentagon Fights Ban on Using Russian Rocket Engines
The ban was meant to punish Russia for its annexation of Crimea, but military officials say the space program will need the engines for at least a few more years to launch defense and intelligence technology.

Perhaps Pentagon can rent Russian spy satellites until it can launch on its own? There is no reason for USA to be self-sufficient in everything, but the outsourcing should have some limits.

Before yesterday I decided to have a low-tech backup for measuring temperature. Now I have to check on internet, So I splurge $1.99 _+ tax on a thermometer that can be affixed to a window with a pair of suction cup. a neat bargain made in China. It had fallen down after few minutes, I put the tube with red liquid back in, pressed really hard, and the outcome was different: after a few minutes it had fallen down again and the glass tube broke. I still had a decorative plastic backround for the attractive price of $2.11. Of course, we can produce crap domestically as well, but it is hard to monitor the quality of cheap stuff produced by the lowest bidder on the opposite side of the globe. Sometimes low quality kills, but more often it kills jobs. OTOH, the Russian rockets that Pentagon imported were apparently very good.

Posted by: Piotr Berman | Jun 3 2015 21:48 utc | 73

HnH at 71 -- I think you might mean 66, not 64. Perhaps you missed the forest for the trees. I slip up on the nos. from time to time.

Posted by: rufus magister | Jun 3 2015 23:17 utc | 74

b, love ya and your international political analysis, but you're no economics wiz. Let me try to help you out

1. Cheap money supplied by the central bank is a good thing if it is directed into employment-creating, efficiency creation and economic-efficiency and wealth producing infrastructure. In fact, in a wise social democratic society cheap money would only go to such uses and other socially beneficial uses.

2. That 'zero-labor' factory, you'll notice, was not zero-labor. Instead of 2,000 workers there were 200. That is a very very good thing for workers if you solve the problem of income distribution in the workers' and society's favor. First of all why not 400 workers working 25 hours a week instead of (I assume) 200 working 50? Then let the workers decide on distribution of the factory's income. In fact that last should be a condition the state imposes on modern capitalism, exactly to prevent the 'overproduction/underconsumption' problem.

The scenario I've described, in which there are vast increases in worker productivity (which is what reducing from 2,000 to 200 workers but getting the same production actually means), actually has played out over the last several centuries. Sometimes workers greatly benefit from it, most times they don't. What we need is a redistribution of power between workers and 'owners' (by taking away the income distribution right from the owners) and then you'll get the redistribution of economic wealth that is essential for maximum prosperity, a challenge that becomes acute in 'mature', financial-sector-dominated economies.

Let's see, what else ...

3. "The central banks are pushing on a string while distorting normal market relations." There are no 'normal market relations'. Or, if there are, you don't want them. There's nothing necessarily good or bad about 'normal market relations', and since human agency is also 'normal', why not do what works best for economic prosperity, whether it is 'natural/normal' or not? Keynes talked about always at least somewhat 'overheating' an economy, that if you let it fall back to its 'natural' ways you weren't maximizing production and income. Whatever works, f#ck natural.

That's not to say that the central banks aren't in fact pushing on a string. There is no reason for banks to invest in factories and other forms of 'employment at good wages' creation, when most of the world economy is flatlining. But, aside from the pointlessness of pushing on that string, the other main problem with shoving vast paper wealth at banks is that it makes them extraordinarily wealthy, but that wealth is locked up in their vaults or used for economically damaging market manipulation that actually decreases most people's real wealth by overpricing assets like housing.

A simple solution to the excess wealth in the wrong hands problem and the not enough money in the workers' hands problem, by the way, is a 95% wealth tax (NOT income tax) on estates over, say, $2 million. And you can't exclude anything from the tax. The fact that just doing that and then distributing the funds to the bottom half of the population and into (mostly 'green') infrastructure would generate a great deal of prosperity should tell us that our problem is pretty simple: power. The people need it, in part because they generate vastly superior economic management compared to what is produced when power is concentrated almost entirely in the .1%.

Posted by: fairleft | Jun 4 2015 1:01 utc | 75

"... the other main problem with shoving vast paper wealth at banks is that it makes them extraordinarily wealthy" ... I should also mention that making the banks even more extraordinarily wealthy also makes them even more extraordinarily powerful in the political system. And being led even more tightly by the nose by the banks is the worst possible kind of capitalism.

Posted by: fairleft | Jun 4 2015 1:06 utc | 76

Thank you, fairleft at 76.

I believe you've hit the nail squarely on the head.

Posted by: juliania | Jun 4 2015 5:10 utc | 77

@74 rufus magister

Sorry, you're right of course. Too many trees, too little forest.

Posted by: HnH | Jun 4 2015 7:04 utc | 78

HnH -- No prob, been there done that. Your post was some nice work, BTW. I plan to attend if our resident Bhagawan gives another GreenTeaParty ceremony, see you there!

Posted by: rufus magister | Jun 4 2015 10:36 utc | 79

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Posted by: Alan | Jun 4 2015 11:24 utc | 80

re #21

the allies sent some tanks to the USSR in WWII, but their chief contribution was in over a quarter million trucks and jeeps, thousands of locomotives and tens of thousands of railway wagons. That allowed Soviet industry to focus on turning out tanks.

Posted by: ralphieboy | Jun 4 2015 13:38 utc | 81

ralphie at 81 --

As with the First World War, our entry into the Second brought heavy battalions of American industry into the battle, to decisivie effect.

See the details of Lend-Lease; most went to the United Kingdom. It received about 10 pct. of the USD50 bil. (about USD656 bil. today), with England getting over half. At least some of this material the Soviets paid for in gold.

The Murmansk Run delivering this aid to Russia was dangerous and the weather challenging. Wiki on the Arctic convoys notes, "It has been said that the main value of the convoys was political, proving that the Allies were committed to helping the Soviet Union at a time when they were unable to open a second front." Russia Insider reposts a somewhat more negative assessment. Much of the military equipment provided was obsolete, with deliveries suspended at several points, including during Stalingrad.

You might recall veterans of this Run took the place of Western no-shows at the 70th. anniv. of VE Day; I cannot immediately find a ref.

I seem to recall from Alexander Werth's book Russia At War, 1941-1945 that the most useful component of the materiel was the provision of motorized transport. The Dodge and Packard trucks gave the Red Army needed mobility and, if memory serves, logistical capacity especially. The rank and file appreciated this greatly. The Soviets received nearly 500,000 vehicles.

Given that the defeat of fascism came at the hands of Soviets at Stalingrad in 1943, it would seem the aid was of great utility to the United States.

Posted by: rufus magister | Jun 5 2015 5:40 utc | 82

All those vehicles helped the Red Army sustain a massive offensive through Poland all the way to Berlin and the Elbe.

Posted by: Ralphieboy | Jun 5 2015 9:02 utc | 83

ralphie at 83 --

Rather like the Energizer bunny -- the Red Army kept going, and going, and going. I'm sure they looked good rolling into Red Square in the 1945 Victory Parade.

Hey, I think we have a clip! My favorite bit is at about 10.40, some victory swag. They start rolling the mechanized formations at about 13.50.

Posted by: rufus magister | Jun 5 2015 11:40 utc | 84

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Posted by: Oui | Jun 5 2015 12:42 utc | 85

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