[-empyre-] Debt Culture--types of debt

Brian Holmes bhcontinentaldrift at gmail.com
Tue Nov 27 21:09:29 EST 2012

On 11/26/2012 01:10 PM, Annie McClanahan wrote:
 >Thanks, Brian. I take the claim about the ultimate intractability of
 > crises in surplus value extraction from the long tradition of Marxist
 > political economy; contemporarily, I'd recommend post-'08 essays by
 > folks like Gopal Balakrishnan and Robert Brenner, among others

Well, I have read those people. I just don't think Brenner's analysis of 
declining profitability in manufacturing gives any particular clue about 
the shape of the future. Balakrishnan's piece on the "Stationary State" 
gets closer to the real problems, as summed up in his opening quote from 

"A crisis occurs sometimes lasting for decades. This exceptional 
duration means that incurable structural contradictions have revealed 
themselves and that despite this the political forces which are 
struggling to conserve and defend the existing structure itself are 
making every effort to cure them within certain limits and to overcome 
them. These incessant and persistent efforts (since no social formation 
will concede that it has been superseded) form the terrain of the 
conjunctural, and it is upon this terrain that the opposition organizes."

What I'm trying to say is that without a radical demand for a different 
model of development, the crisis can just go on, and new 
pseudo-solutions can continue both to cement the power of elites and to 
distract from the deep contradictions of inequality and ecological 
unsustainability. The difficult thing is that the radical demand has to 
be formulated within the conditions of the conjuncture. Which are the 
conditions of the world as it is being produced and reproduced today, so 
very badly, under the financially coordinated regime of 

The idea that a decline of manufacturing (or of the surplus value 
produced by labor in manufacturing) would be enough to derail the global 
economic system has already been proven false by history. Way back in 
the Seventies, one could easily have supposed that the decline of 
manufacturing, and the inflation and unemployment that resulted from it, 
were about to spell the end of capitalism -- or at least of American 
hegemony. Instead, after a protracted period of crisis, we got the 
US-led financial turn from 1979 onwards, which deeply and durably 
changed the class structures of the core countries, while reorganizing 
the world economy to sustain those changes. In the US, automation was 
developed very extensively in the continuous-flow industries (oil, 
chemicals, steel) and a flexible work regime was imposed on an expanding 
service sector, including research, marketing, information-processing 
and all that. Unemployment was camouflaged by a system of mass 
imprisonment. A new just-in-time production and distribution system 
brought very cheap manufactured goods to consumers, which helped make 
the lower wages bearable. An entrepreneurial ideology promised success 
to the most ruthlessly competitive individuals. Rising asset prices 
(stocks and homes) did in fact deliver a wealth effect to the upper 20 
or 30%. And credit made up for the rest. By the late Nineties, 
variations on the same social deal had spread across the developed and 
developing world. That was neoliberalism.

Now all the above is in crisis. Most of the characteristic features of 
neoliberalism are likely to morph into something very different over the 
course of the next decade, as we lurch from palliative measure to 
palliative measure. But nothing guarantees this crisis will produce an 
ultimate collapse of the capitalist system, or an inevitable revolution. 
That's the sobering lesson of what's currently going on in Greece: 
intense opposition in the streets, but no plan B. Instead, the great 
powers -- which in our time are the central banks -- have now concerted 
to apply the same solution: quantitative easing to wipe away the worst 
of the debts, essentially an attempt to reboot the system. This is how 
the trillion-dollar holes are filled. It's not just an American 
strategy, though it originated here. Instead it's being applied 
simultaneously, by the US, the UK, the EU, Japan and China, so there is 
considerably less risk of a run on the dollar and a cataclysmic 
transformation of the world economy. Sudden, uncoordinated changes in 
the world monetary regime are considered too risky, because they could 
lead to war. This kind of limited concertation was established back in 
the 1980s and 90s, with the Plaza and Reverse Plaza exchange-rate 
accords. Giovanni Arrighi does a great analysis of it, in his critique 
of Brenner in NLR 20. We are seeing the same kind of thing at work again 
today. In fact that's largely what Gopal Balakrishnan describes in his 
text: the palliative measures that sustain the stationary state. The 
question he does not deal with, in his otherwise very probing essay, is 
how to organize an opposition on this terrain.

History suggests that after a period of relative chaos (how intense no 
one knows) a new, more-or-less contradictory "fit" will emerge between 
what people produce and how that production circulates through national 
and global markets. It's not likely to be a fudamental change in the 
system, or even a very good fit, but it will work somehow, for a while. 
Financial arrangements, wage structures, technologies, institutions 
including the military and the police, and also cultural forms will all 
gradually change to establish the new pattern -- and undoubtedly there 
will be very dramatic moments and events along the way, as there already 
have been over these last four years. The Left needs to develop a 
strategy to influence this gradual change and push it in a 
transformative direction, both through meaningful social conflict and 
through the propagation of a new analysis that can resolve into a new 
common sense. This would be the process of formulating a radical demand, 
to which I referred above.

The extraordinary thing about the student debt problem is that it puts a 
crucial question on the table: the question of what knowledge is good 
for in society. Do we go to the university just to be more-or-less 
enslaved into the roles of middle-managers who will carry out the next 
restructuring of capitalism? Or do we insist on a public mission that 
cannot be carried out under the conditions of super-exploited 
intellectual labor (for the teachers) and debt peonage (for the 
students)? David Golumbia is totally right to say that the capacity of 
critique is being targeted right now by the neoliberal elites, as part 
of their struggle to conserve and defend the existing rotten structure. 
He's also right to say that this capacity of critique is something 
essential -- IF, I would add, it can be turned into a real power, the 
power to propose and demand a different development model, one that is 
precisely NOT based on the surplus value of Fordist manufacturing, which 
is actually the last thing we need. We need an economy of care, for each 
other, for the social peace and for the environment, and that cannot be 
a predatory capitalist economy, even though it will still involve a 
complex fit between what people produce and how that production circulates.

The question is how to develop a strategy for moving through this crisis 
and exerting transformative effects. I'm wondering what David might have 
to say about this. From my viewpoint (which is not that of a career 
academic, by the way) I think the university has to be part of the 
strategy. It's a key site, both for perceiving the conjuncture, and for 
organizing an opposition within it.

all the best, Brian

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