Prof. Costas Lapavitsas and Dr. Geoffrey Ingham discuss 'Thinking about Money' on 18 January 2017 at the SOAS, London.

https://soundcloud.com/soaseconomics/thinking-about-money-part-i

The recording is part of the symposium and launch of Marxist Monetary Theory,a collection of papers by Costas Lapavitsas part of the HM book series published by Brill. 

Money and finance are pre-eminent, even dominant, features of contemporary capitalism. Costas Lapavitsas was among the first political economists to notice their ascendancy and devote his research to it. The collected volume ranges far and wide, including papers on markets and money, finance and the enterprise, power and money, the financialisation of capitalism, finance and profit, even money as art.

Richard Seymour on Enzo Traverso and Daniel Bensaïd

Richard Seymour is an author, broadcaster and a founding editor of Salvage. Most recently he is the author ofCorbyn: The Strange Rebirth of Radical Politics (Verso, 2016). This review was originally posted on hisblog Lenin's Tomb on 28 December 2016, and is a helpful introduction to Historical Materialism's symposium on Daniel Bensaïd in our journal's issue24.4.

This began as a review of Enzo Traverso's Left-Wing Melancholy: Marxism, History and Memory. But a review is usually a conclusion, the verdict on a closed book. This is, in fact, the beginning of something else.

I.

Our defeat is their redemption. The most raging, downwardly mobile, insecure, isolated, almost eclipsed social forces turn out to have a trump, after all.

The axis of global reaction encompasses Modi, Erdogan, Putin, and now the president-elect of the United States. The Brexit Right is victorious in Britain, and Marine Le Pen’s fascists are on the brink of another breakthrough in France. The revanchists of ‘white nationalism’ are energised, already racking up a body count, acutely aware that they have only a few years to “make America,” or its nearest equivalent, “great again”. Meanwhile, the Left is momentarily stunned, feeling almost a physical annihilation.

However, defeat should not be disabling. The history of the Left is a history of defeats. It is the history of the vanquished, necessarily. Marxism, Enzo Traverso reminds us, is a science of defeat. “The whole road of socialism,” said Rosa Luxemburg, “is paved with nothing but thunderous defeats”. In the traditions of the left, defeat is recognised as a vital pedagogical process, even as its tragic dimension overwhelms us.

The novelist Jules Valles dedicated The Insurrectionist, on the Paris Commune, “to the dead of 1871” and all who “formed, under the flag of the Commune, the great federation of sorrows”. But from the crushing of the Paris Commune came, thirty years later, an age of mass socialist parties all over Europe. From the demolition of the internationalist left in 1914, came the electrifying revolution of 1917.

Even the brutal murder of left leaders from Che Guevara to Victor Jara summon mass funerals, not as a symbol of “the end of a communist hope” but as “one of its expressions”. Defeat formed part of a texture of collective memory, a strategic factor in struggle.

Robert Motherwell - Plato's Cave.

II.

But to fight is also to mourn, since the Left “cannot refurbish its intellectual armoury without identifying empathetically with the vanquished of history”. And there is a work of mourning that has yet to be done. The sudden outbreaks of collective grief over dead celebrities are not in this sense fraudulent or mawkish. These deaths remind us of something that we're already feeling. A mourning that is thwarted.

For what collapsed with the disintegration of the USSR was not just an appalling dictatorship, but an “entire representation of the twentieth century” filled with revolutionary hopes. The Velvet Revolutions, unlike their forebears, did not arouse new utopias, but confirmed a regression to minimal liberal ideas of freedom and representation, already underway since the late Seventies.

Given the drastic contraction of historical possibilities disclosed by this process, the momentous defeat of left-wing struggles and working class movements unveiled, the absence of mourning is striking. Former communist parties, instead of working through their loss, chose to repress their past, opting to rename themselves ‘Democratic Left’ or similar substitutions. If Trotskyist currents did not collapse in the same way, they were left similarly adrift, where they did not simply enter into denial. The spectre of communism, Traverso argues, no longer haunts the bourgeoisie, announcing a “presence to come” – it haunts and taunts its former adherents, pricking their bad conscience.

For some reason, this was not a sinless defeat. A sin can, in secular terms, be seen as a special kind of defeat, a capitulation which attracts guilt. And the internalised stigma and guilt arising from the reduction of communism to its “totalitarian dimension” became, even in dissident, anti-Stalinist strains of socialism which had never invested their hopes in the Kafka’s Castle of the East, a resistance to working through this defeat. This “impossible mourning” is one way to understand the pervasiveness of left melancholia. Even the spurious ‘optimism’ of some of the remaining shards of the Left after 1989 was a result of disavowed melancholia, the refusal to mourn, the refusal to accept a loss.

Traverso’s work is therefore, firstly, a work of mourning. It aims to come to terms with left-wing melancholy, as a necessary condition for redemption. It offers us the image of what the psychoanalyst Jean Allouch calls a “dry loss”. According to Freud, mourning ends when we finally alight upon a new object, a new love. Allouch rejects this metonymy of objects. We don’t substitute one for the other, gaining something to compensate our loss. We have to make do with a loss with no compensation whatsoever. We have to go on having a relationship with someone who is no longer there. This is the working through that Traverso doesn’t so much propose as perform.

Historical Materialism's London Annual Conference 10-13 November 2016 

Please find here the audio recording of the conference's closing plenary session that took place Sunday 13 November, 17.15-19.00.

With Ashok Kumar, Tithi Bhattacharya, Susan Ferguson and David McNally.

Chair: Ashok Kumar

Tithi Bhattacharya – The Ontology of Labour Power: Producing and Social Reproducing Capital

Susan Ferguson – The Child, the Market, and Capitalism: a Social Reproduction Perspective on Children’s Subjectivities

David McNally – Dialectics and Intersectionality: Critical Reconstructions in Marxism and Social Reproduction Theory

Tony Norfield reviews François Chesnais's Finance Capital Today: Corporations and Banks in the Lasting Global Slump, Brill, Leiden, 2016.

Tony Norfield worked for nearly 20 years in the dealing rooms of banks in the City of London, completing his role as Executive Director and Global Head of FX Strategy for ABN AMRO. He has a wide experience of international financial markets, having travelled extensively on business. In 2014, he was awarded a PhD in Economics at SOAS, University of London, on the thesis topic of 'British imperialism and finance'. His book, The City: London and the Global Power of Finance, was published by Verso in April 2016. This review was originally postedhere on Tony's blogThe Economics of Imperialism on 24 November 2016.

This book is well worth reading. It is written in a clear and accessible style and discusses key points about the limitations of capitalism and the role of contemporary finance. Perhaps its most important point is how the financial system has accumulated vast claims on the current and future output of the world economy – in the form of interest payments on loans and bonds, dividend payments on equities, etc. These claims have outgrown the ability of the capitalist system to meet them, but government policy has so far managed to prevent a collapse of financial markets with zero interest rate policies, quantitative easing, huge deficits in government spending over taxation, and so forth. The result is an unresolved crisis, a ‘lasting global slump’, in which economic growth remains very weak and vast debts remain in place.

There are two related points in his approach to the world economy and finance that distinguish Chesnais from many other writers, and for which he deserves to be commended. Firstly, he states clearly that we are in a crisis of capitalism tout court (pp1-2), not a crisis of ‘financialised’ capitalism – the latter being one that could presumably be fixed if only the evil financiers were dealt with by a (capitalist) reforming government. Secondly, he takes ‘the world economy as the point of departure’ for his analysis, although that is ‘easier said than done’ (p11). While he shows the central role of the US, he avoids the wholly US-centred analysis common to radical critics of contemporary capitalism, and instead highlights how the other powers also play a key part in the imperial machine.

Finance Capital Today helps the reader’s understanding of the realities of contemporary global capitalism by providing a wealth of material evidence. It also helps one to clarify views about what is going on by discussing the theoretical context. In this review I will highlight the key points raised in the book and also discuss where I have a number of differences with Chesnais. These differences are sometimes merely of emphasis, or what may look like simply an alternative definition of a commonly used term. However, poor formulation of an argument can also lead to theoretical problems.

Chesnais begins by outlining the origins of the 2008 crisis, arguing that this had been postponed since 1998 by the growth of debt in the US and elsewhere, and by the surge of growth in China. In 2008, ‘the brutality of financial crisis was accounted for by the amount of fictitious capital accumulated and the degree of vulnerability of the credit system following securitisation’. The backdrop to the latest phase of crisis was also one that has made this crisis a global one to a degree unknown to previous crises (p25). It involved a far more integrated world economy, following the break up of the USSR and the incorporation of many more countries into the world trade and financial system. The crisis is one characterised by ‘over-accumulation of capital in the double form of productive capacity leading to overproduction and of a “plethora of capital” in the form of aspiring interest-bearing and fictitious capital’. But major governments tried to prevent the crisis from running its course in the way that occurred in the 1930s (p35).

Within the global set up, Chesnais has an interesting view of China, which he characterises as not suffering national domination by the major powers (p43). He notes its subordinate position in the world division of labour, having offered its cheap labour workforce up to the world market, but includes this as part of the development of the world market rather than being a sign of its oppression in the Leninist sense. This reflects the mixed dimensions of China’s economic and political status, and one that I would also characterise as being in transition to the premier league of major powers (China is actually number three in my ranking of countries by global power).[1]

Chapter 3 is titled ‘The Notion of Interest-Bearing Capital in the Setting of the Present Centralisation and Concentration of Capital’. This is an important topic, but one in which Chesnais’s commendable approach is let down by his exposition. He starts by arguing that ‘the channelling of surplus value in contemporary capitalism, through both the holding of government loans and the possession of stock, by a single small group of highly concentrated financial and non-financial corporations and private high-income-bracket asset holders, requires that several features of interest-bearing capital that were treated partly separately by Marx now be approached in toto’ (p67). I would certainly agree with this, especially since the relevant section in Capital, Volume 3, is a complete mess, one that Engels found extremely difficult to edit and to try and salvage. However, Chesnais does little to develop the argument at this point, and he tends to keep it focused on banks. Only later in the book does he explain better how interest-bearing capital is a more universal phenomenon for modern capitalism. Even then, I would argue that the forms it takes, especially in proprietary trading, are not fully or well explained by taking interest to be the source of revenue, or, as he notes from Hilferding, by taking one speculator’s gain as a loss to another speculator.[2]

This chapter also contains a discussion of two issues of Marxist theory on finance. One is the difference of opinion between myself (and others) and Costas Lapavitsas on the question of banks ‘exploiting’ workers through the charging of interest on loans, etc (pp76-77). He correctly notes that this interest is, in any event, only a small portion of bank profits, not the big event claimed by the ‘exploiting’ school. However, citing Rosa Luxemburg, he comes down on the side of the view that these deductions are a reduction of the value of labour-power. I disagree, and not only because Luxemburg’s judgements in matters of economic theory, let alone political strategy, leave very much to be desired. My argument, which Chesnais cites, is that the charging of interest does not by itself suggest a lowering of the value of labour-power. If this interest deduction became a significant part of workers’ incomes, then wages would tend to rise to offset this, making it effectively a deduction from corporate profits. This is not to exclude that the value of labour-power can be forced down, but it is in the febrile imagination of the anti-finance populists that this process results from banks charging workers interest on loans.

A second issue of theory raised in Chapter 3 is on the question of bank lending. In contrast to many other Marxists, Chesnais recognises that banks can themselves create new deposit assets. However, he confusingly calls these ‘fictitious capital’ (p84). This is a relatively common perspective, as seen also in David Harvey’s The Limits to Capital, but it is not consistent with Marx’s definition. A bank loan can be created out of thin air by a bank, and is not dependent upon a ‘real’ deposit of cash, so in that sense it is indeed fictitious. But it should then simply be called a ‘fictitious’ deposit or asset of the bank. Fictitious capital, by contrast, can most easily be described as a financial security that is traded in the market and which has a price that is a function of interest rates and future expectations of returns to the buyer of that security.[3] That is not true of bank deposit or loan assets, which remain on the bank’s books. Only if the loan assets later became securitised – that is, when the loans are the basis for payments made to owners of a tradeable security – would they become fictitious capital This was the gist of Marx’s definition of fictitious capital, although one that was not clearly spelled out in Capital (and neither was his view of bank loans/deposits). To call bank loans or deposits ‘fictitious capital’ can only lead to confusion when analysing developments in contemporary financial markets.

Chapter 4 is my favourite of the whole book. Titled ‘The Organisational Embodiments of Finance Capital and the Intra-Corporate Division of Surplus Value’, it does not bend to media demands for a snappy one-liner, but it does provide the reader with valuable information and analysis. Chesnais discusses the different forms of the evolution of capitalism in today’s major powers, focusing on Germany, the US, the UK and France. He examines the relations between the state, private corporations, banks and imperial power. While noting the importance of pension funds from the 1990s as major equity owners of big corporations, he argues that ‘rather than bankers, it is industrialists with financial connections that form the core of the European corporate community’ (p108). Despite some views that there is an ‘international’ capitalist class, his view, with which I agree, is that the main groups of ‘finance capitalists’ are domiciled within single countries.

One important point he makes, and one that he could have developed more, is how in contemporary capitalism, by contrast to the views of Marx and Hilferding, merchant capital (essentially commercial capital and finance) is not subordinate to industry, although it is dependent upon industrial profit, (p113). However, he does discuss the role of large commodity traders and retailers. In my view, this reflects the way in which the major powers have used the financial/commercial system to consolidate their economic privileges, something that was true for the UK even from the mid-late nineteenth century. Today, as most people should be aware, it is the poorer, subordinated countries that do most of the producing, at least in the non-monopolised fields of production.

In Chapters 5 and 6, Chesnais covers global oligopolies and the operations of international companies. He reviews theories of monopolisation and how the development of the European single market was favourable both for European and for US corporations. There is some overlap in this material with that covered by John Smith’s book, Imperialism in the Twenty-First Century (Monthly Review, 2016), with a predatory appropriation of value by the ‘buyer-driven global commodity chains’ of the major corporations (p161). However, Chesnais disagrees with Smith’s earlier work on a number of points, and argues that China, India and Brazil are not in the classical position of being oppressed countries, having a different, and higher, status in the world market. On a separate, important point regarding data on the global economy, Chesnais notes UNCTAD’s estimate that about 80% of global trade is linked to the international production networks of international companies, and that it would be wrong to focus on foreign direct investment data as giving a complete picture of international investment. This is due both to the blurring of lines between FDI and portfolio investment and to the importance of offshore centres as the apparent location of the headquarters of many companies.

Chapter 7 discusses the globalisation of financial markets and new forms of fictitious capital. This is a useful review of the growth of financial markets, although it relies very much on secondary sources, so the data is already several years out of date, and his coverage of financial derivatives misleadingly characterises them as being ‘claims on claims’, when derivatives are better described as difference contracts based on the price of the underlying security to which they refer. The fundamental point he makes is nevertheless that the apparent diversion of investment to financial markets has been prompted by the decline in profitable investment opportunities (p174). The chapter concludes with a review of financial and (foreign) debt developments in Ecuador, Brazil, Argentina and South Africa, including the role of ‘vulture funds’ dealing in Argentina’s defaulted debt.

Chapters 8 and 9 discuss contemporary developments in financial markets, focusing on banking and credit. This is well-covered ground, but is useful for those who are less familiar with recent history, and especially so in explaining the development of mortgage-backed securities, ‘universal banks’ in Europe, the monopolisation of banking, shadow banking, etc. There is also a discussion of how ‘leverage’ – ie borrowing to fund the growth of assets – rose to extreme levels due to the decline in profitability among financial companies (pp221-). I would note, however, the publisher’s poor proofreading: ‘over-the-counter’ (OTC) securities dealing is described as ‘off the counter’ in Chapter 7 and here has the designation ‘ODT’.[4]

Chapter 10 highlights ‘global endemic financial instability’ and points out that there is a ‘plethora of capital in the form of money capital centralised in mutual funds and hedge funds, bent on valorisation through the holding and trading of fictitious capital in the form of assets more and more distant from the processes of surplus value production. Financial profits are harder and harder to earn’ (p245). I would go further and also note how asset managers, pension funds and insurance companies – far more important investors in financial markets than hedge funds or mutual funds – are now finding their mountain of assets unable to generate the returns they have, implicitly or explicitly, promised, although Chesnais does mention this later in the chapter.

The ‘plethora of capital in the form of money capital’ is related to the declining profitability of capitalist investment. Chesnais notes how official reports, from the Bank for International Settlements, for example, allude to this problem, but also how they also mix in a description of low productivity growth and low economic growth in general. He correctly makes the point that the fall in interest rates long preceded the ‘quantitative easing’ policies that occurred after 2008.[5]

It is difficult to spell out these relationships empirically, given the available data, and Chesnais does not try to do this. It is also important to distinguish the rate of interest from the rate of profit on capital investment, which are two different things. However, I would suggest a measurement of how much global financial assets have accumulated – meaning principally equities, bonds and bank loans – against some measure of absolute global profitability over time. This would measure how far the financial claims on social resources have grown, in the form of interest and dividend payments, compared to the surplus revenues available to pay off these claims. My initial work on this suggests a decline in the rate of return from 2007 to 2014, whatever the more distorted profitability figures available for the US alone might say, data that are often used by people wanting a ready calculation of the ‘rate of profit’. The rate of return I suggest is not a ‘Marxist rate of profit’, as traditionally understood, but it would better reflect the malaise of the global capitalist system, especially from the perspective of the major claimants upon its resources, the ones based in the rich powers!

Chesnais finishes his book with two themes. One is a lament on the lack of Marxist study in universities and the lack of journals in which Marxist studies of capitalism can be published. This is true enough, and I am glad not to have been an undergraduate university student in the past few decades! Even apparently radical journals such as the UK’s Cambridge Journal of Economics are basically rather conservative in outlook, and are dominated by a facile Keynesian approach that dismisses a Marxist perspective out of hand if it upsets their advocacy of ‘progressive’ policies for the capitalist state to consider. Repeating radical consensus nonsense will get a pass; revealing the imperial mechanism of power has to jump a hundred hurdles to be an acceptable journal article. Such is the almost universal climate in academia today, despite the evidently destructive outcomes from the system they claim to be analysing.[6] Ironically, this is why the most trenchant and incisive critiques of capitalism today – at least from a descriptive point of view – often come from analysts working in the financial markets. They have to tell their clients what is really going on!

Friends have suggested to me that the situation for critical academics is even worse in the US, something I find easy to believe. I have some knowledge of, and better hope for, the development of a more critical intellectual climate coming from outside the Anglosphere. This should not be too difficult to achieve.

The second concluding remark by Chesnais is the question of how a new phase of capital accumulation might emerge. There is the plethora of (fictitious) capital with its claims on social revenue that cannot be met, but which, on the other hand, has not been devalued in a crisis collapse, because the major governments have done their best to prevent it, fearing the consequences. Chesnais discusses technical innovation to some extent, but sees this as being overshadowed by capital’s degradation of the environment. One is left with the ‘notion of barbarism, associated with the two World Wars and the Holocaust’ (p267). That is a downbeat but telling point about the progress of opposition to imperialism today. In the main imperial countries, the answer to the question of ‘Socialism or Barbarism’ is biased in favour of the latter.

Finishing on a more general comment, my own preference is to avoid the term ‘finance capital’ completely, whereas the book is titled Finance Capital Today. The term is associated with Hilferding and used by Lenin, but the definition is too bound up with Hilferding’s notion that banks control industry. This was not a good description of the situation in the early 20th century, and is far less true today. Chesnais would accept this and instead defines ‘finance capital’ as the ‘simultaneous and intertwined concentration and centralisation of money capital, industrial capital and merchant or commercial capital as an outcome of domestic and transnational concentration through mergers and acquisitions’ (p5). He explains how the different forms of finance capital evolved in different countries, making an important distinction between the privileges of the major powers and the subordinate position of others. I would go along with this definition, but I would argue for putting fictitious capital at the centre of attention, not ‘finance capital’. This would show more clearly that what Marx called the ‘law of value’ is today mainly expressed, or at least expressed more directly, via the markets for financial securities, rather than in the markets for commodities, although the latter are of course important. A company’s ability to access funds and at what cost, via the equity market or bond market, or a government’s ability to borrow and spend, is each signalled by the markets for their securities. These markets show what is good, bad and acceptable in the imperialist world economy today.

[1] See my book, The City: London and the Global Power of Finance, Verso, 2016, p111.

[2] The City, pp144-147.

[3] For an explanation, see The City, pp83-92.

[4] The book is expensively priced, so order it for your library! The book will be cheaper when later published in paperback, however.

[5] See the note on this blog from a Bank of England report here.

[6] It works like this. Academic journals are graded according to their supposed value, and getting an article published in a highly ranked journal is the objective of all academics. Think what you like about the journal’s real worth, these grades are important for the scores achieved by contributors in the assessment they get from their universities, and, most importantly, in the assessment of their universities for government funding purposes. Over recent decades, this has led to a small group of mainstream, conservative, uncritical journals becoming the favoured destination for research articles, which in turn means that academics orient their work to what these journals will accept. It is a machine for generating very little worth reading, and also a system for maintaining a conservative status quo. That system is further maintained by a journal editorial board and a group of ‘peer reviewers’ with the same general outlook. A similar mechanism also leads academics to have absurdly long bibliographies and excessive citations in their articles, since citing their friends will encourage the return favour, and citations are another means by which academic value is assessed.

HM London 2016 conference: Panagiotis Sotiris on Rethinking Popular Sovereignty: From the Nation to the People of a Potential New Historical Bloc

Abstract[1]

During the past decades traditional notions of sovereignty have been challenged in Europe. First, we have the erosion of sovereignty induced by the process of European Integration. Secondly, the new waves of migrants and refugees arriving in Europe and the anti-immigrant and anti-refugee policies of ‘Fortress Europe’ and ‘closed borders’ along with the intensification of racism and islamophobia, both as ideological climate but also as official state policy, have opened up the debate regarding the relation between sovereignty and ethnicity. On the one hand, any attempt towards a rupture with the embedded and constitutionalised neoliberalism of the EU in order to initiate processes of social transformation and emancipation, should necessarily take the form of a reclaiming of popular sovereignty and democratic control over crucial aspects of economic and social policy. On the other hand, we must deal with the association of sovereignty with nationalism, racism and colonialism, tragically exemplified in the way the Far Right links the question of sovereignty to its own authoritarian racist agenda. To deal with these challenges I take a critical position to both neo-Kantian conceptions of cosmopolitan rights and ‘neo-republican’ defences of the nation-state and the people as common history and shared values. In contrast I suggest that we rethink the people in a ‘post-nationalist’ and de-colonial way as the emerging community of all the persons that work, struggle and hope on a particular territory, as the reflection of the emergence of a potential historical bloc.

Keywords: People; Nationalism; EU; Racism; Gramsci; Historical Bloc; Popular Sovereignty.

The very notion of sovereignty and all the political notions associated with it have been facing a series of important challenges, especially in Europe. On the one hand we have, all the recent developments in the construction of the European Project and the entrance to the era of the ‘Memoranda of Understanding’ that represent an even more aggressive version of the reduced sovereignty that has been, one way or the other, at the centre of European Integration from the beginning. The very notion that a country, such as Greece and to a lesser degree Ireland or Portugal, can be put under supervision and surveillance, with all major policy decisions be referred to the endless negotiations with the ‘Institutions’ (EU-IFM-ECF-ESM), exemplify this tendency. From the euro as a form of ceding of national monetary sovereignty to the Treaties that give priority to European Institutions and the new mechanisms of disciplinary supervision of member-states’ economies, exemplified in the Greek experience, the European Integration process has been a process of imposition of a condition of reduced and limited sovereignty, affecting not only ‘peripheral countries’ but also countries of the EU core. Moreover, these developments make sovereignty a particular exigency, in the sense that any break with austerity and neoliberalism has to take the form of the exercise of a sovereign collective will over other institutional constraints, such as the terms of the EU treaties, the role of the ECB or the financial, monetary and institutional architecture of the Eurozone.

On the other hand, the new waves of migrants and refugees arriving in Europe and the anti-immigrant and anti-refugee policies of ‘Fortress Europe’ and ‘closed borders’ along with the intensification of racism and islamophobia, both as ideological climate but also as official state policy, have opened up the debate regarding the relation between sovereignty and ethnicity.

The reaction to the current wave of refugees and migrants from the entire systemic political spectrum along with the new versions of the ‘clash of civilizations’ associated with an antiterrorist policy that is based even more upon islamophobia, stress the fact that questions of identity and ethnicity remain a highly contested terrain and that we are facing a return to nationalist and racist discourses and practices. The same goes for the recurring insistence of the Far Right on a form of sovereignty strongly associated with the nation, defined in an almost racist way.

Recent developments, such as the British vote in favour of recuperating the aspects of sovereignty that were ceded as part of the participation in the European Union and the political and ideological confrontations surrounding the British debate, before and after the referendum, also brought forward this challenge. Without underestimating all the ugly aspects of xenophobia and racism expressed in parts of the Brexit campaign, it is obvious that important segments of the working class and other subaltern classes saw in the reclaiming of sovereignty a way out of austerity, lack of democracy, lack of control over their lives.[2]

At the same time, in contemporary debates in the Left one can see the tension between different positions but also the tension inside each position. For example, the supporters of the position that any attempt to establish social and political rights for those that fall outside the limits of the nation necessarily implies some form of transnational polity, have to face the fact that contemporary transnational institutions such as the EU in fact not only are instrumental in establishing new forms of exclusion (such as increased barriers on refugees and migrants and in general non ‘EU-nationals’), but also play an important part in the erosion of any possibility of democratically opting for policies representing the collective interests of the subaltern classes.[3] At the same time, those that support some form of reclaiming sovereignty as part of an attempt to re-establish democracy in opposition to neoliberalism, have to face the fact that any return to a traditional ‘national’ definition of the collective political body of democracy will lead to various forms of exclusion.

So the question I will try to deal with in this presentation, albeit in a rather schematic way, is whether it is possible to articulate the demand to reclaim sovereignty as part of a democratic and emancipative project from the part of the subaltern classes, that will take account of the fact of mass migration and mass refugee movements and avoid falling into the pitfalls of varieties of nationalism, exclusion and even state-sanctioned racism. But first we must see the answers that have been offered so far.

                                                                                         *

One is what we might call the Neo-Kantian answer. Kant formulated his conception of cosmopolitan rights in his text on perpetual peace[4] when he suggested three interconnected principles in order to attain peace in the new international landscape that was formed by the emergence of the nation-state. A) that the civil constitution of every state must be republican, b) that the rights of nations shall be based on a federation of free states, and c) and that the cosmopolitan right shall be limited to conditions of universal hospitality. As many commentators have already noted,[5] one can already see here the expression of tensions that we also see today, such as the tension between the nation-state and a universal form of rights, leading to Kant substituting the fully cosmopolitan right, namely a global form of full political rights, with a right of hospitality. We also know, both from historical experience and from writings such as Hannah Arendt’s, how the contemporary international law on migrants and refugees was formed after the experience of big masses of stateless populations in the first half of the 20^th century and the emergence as a political and juridical question of the ‘right to have rights’.

Man of the twentieth century has become just as emancipated from nature as eighteenth-century man was from history. History and nature have become equally alien to us, namely, in the sense that the essence of man can no longer be comprehended in terms of either category. On the other hand, humanity, which for the eighteenth century, in Kantian terminology, was no more than a regulative idea, has today become an inescapable fact. This new situation, in which “humanity” has in effect assumed the role formerly ascribed to nature or history, would mean in this context that the right to have rights, or the right of every individual to belong to humanity, should be guaranteed by humanity itself. It is by no means certain whether this is possible. For, contrary to the best-intentioned humanitarian attempts to obtain new declarations of human rights from international organizations, it should be understood that this idea transcends the present sphere of international law which still operates in terms of reciprocal agreements and treaties between sovereign states; and, for the time being, a sphere that is above the nations does not exist.[6]

Today, the neo-Kantian perspective mainly takes the form of an increased emphasis on the emergence of institutional forms of transnational political cooperation and the potential creation of elements of a global political cooperative and even federative form that would guarantee the universal character of basic human rights and exactly guarantee the ‘right to have rights’.

Jürgen Habermas’ propositions regarding the emergence of a postnational configuration presents exactly this tendency. Naturally, Habermas is well aware of the neoliberal and undemocratic character of the actual construction of European Union, yet he sees it as the only way to actually create a postnational political form that would guarantee rights, reinstate the welfare state and create conditions, provided that there are is an enhancement of democratic procedures and forms of postnational political education. Habermas’ suggestion that it is possible as part of the process of European Integration to see the emergence of democratic forms at the European level that could foster the development of a cosmopolitan consciousness and forms of truly global citizenship is based upon his particular conception of democracy itself. Democracy is not the exercise of a collective popular will, but rather a complex series of deliberative processes as communicative practices that enhance the emergence of more rational forms,

Today, the public sovereignty of the people has withdrawn into legally institutionalized procedures and the informal, more or less discursive opinion- and will-formation made possible by basic rights. I am assuming here a network of different communicative forms, which, however, must be organized in such a way that one can presume they bind public administration to rational premises. In so doing, they also impose social and ecological limits on the economic system, yet without impinging on its inner logic. This provides a model of deliberative politics. This model no longer starts with the macrosubject of a communal whole but with anonymously intermeshing discourses.[7]

Then democracy at the European level does not imply the emergence of a European people or demos (as collective will and identity) but rather the intensification of these processes of deliberation in all their complexity.

The European market will set in motion a greater horizontal mobility and multiply the contacts among members of different nationalities. In addition to this, immigration from Eastern Europe and the poverty-stricken regions of the Third World will heighten the multicultural diversity of society. This will no doubt give rise to social tensions. But if those tensions are dealt with productively, they can foster a political mobilization that will give additional impetus to the new endogenous social movements already emergent within nation-states – I am thinking of the peace, environmental, and women's movements. These tendencies would strengthen the relevance that public issues have for the lifeworld. At the same time, there is a growing pressure of problems that can be solved only at a coordinated European level. Under these conditions, communication complexes could develop in Europe-wide public spheres. These publics would provide a favorable context both for new parliamentary bodies of regions that are now in the process of merging and for a European Parliament furnished with greater authority.[8]

Habermas is fully aware that at the international level there are difficulties even for this communicative and argumentative form of deliberation that he offers as an alternative to popular sovereignty with the boundaries of the nation-state.

In a politically constituted community organized via a state, this compromise formation is more closely meshed with procedures of deliberative politics, so that agreements are not simply produced by an equalization of interests in terms of power politics. Within the framework of a common political culture, negotiation partners also have recourse to common value orientations and shared conceptions of justice, which make an understanding beyond instrumental-rational agreements possible. But on the international level this “thick” communicative embeddedness is missing.[9]

Habermas thinks that we can find new forms of postnational unifying identity in exactly this attachment to these democratic procedures, at the national and transnational level, which he defines as a form of ‘constitutional patriotism’.

As the examples of multicultural societies like Switzerland and the United States demonstrate, a political culture in which constitutional principles can take root need by no means depend on all citizens' sharing the same language or the same ethnic and cultural origins. A liberal political culture is only the common denominator for a constitutional patriotism (Verfassungspatriotismus) that heightens an awareness of both the diversity and the integrity of the different forms of life coexisting in a multicultural society. In a future Federal Republic of European States, the same legal principles would also have to be interpreted from the perspectives of different national traditions and histories.[10]

However, it is exactly here that the problem with Habermas position lies: in his conception of democratic politics. His communicative conception of the ‘categorical imperative’, ever since Theory of Communicative Action, means that both at the national and the international level he moves away from politics as confrontation or struggle between antagonistic class strategies (even if they are articulated as competing versions of what is the ‘collective will’ of society), towards a normative and procedural conception of politics as attempt towards creating optimal conditions of communication and argumentation.

Such a discourse-theoretical understanding of democracy changes the theoretical demands placed on the legitimacy conditions for democratic politics. A functioning public sphere, the quality of discussion, accessibility, and the discursive structure of opinion- and will-formation: all of these could never entirely replace conventional procedures for decision-making and political representation. But they do tip the balance, from the concrete embodiments of sovereign will in persons, votes, and collectives to the procedural demands of communicative and decision-making processes. And this loosens the conceptual ties between democratic legitimacy and the familiar forms of state organization.[11]

That is why Habermas tends towards rather modest proposals for increased participation of NGOs and social movements in negotiation processes, as part of this procedural and communicative conception of collective practice.

[T]he institutionalized participation of non-governmental organizations in the deliberations of international negotiating systems would strengthen the legitimacy of the procedure insofar as mid-level transnational decision-making processes could then be rendered transparent for national public spheres, and thus be reconnected with decision-making procedures at the grassroots level.[12]

However, the experience of all recent negotiations of international agreements and treaties along with the everyday functioning of the EU has shown that such deliberations do not fundamentally alter the course of things or affect the actual decision processes. In certain cases, they are simply attempts to offer legitimization to processes that are fundamentally authoritarian and undemocratic.

From her part, Seyla Benhabib has offered a problematized version of the Kantian conceptualization of cosmopolitan rights, by means of a reading of Arendt’s critical approach to both the nation-state and world government. She is aware of what she defines as the ‘paradox of democratic legitimacy’, namely the fact that the rights of the subaltern have to be negotiated upon a terrain ‘flanked by human rights on the hand and sovereignty assertions on the other’.[13] Consequently, what she suggests is a form of cosmopolitan federalism, based upon porous not open borders based upon a combination between the rights of refugees and migrants and the acceptance of the continuous existence of nation-states.

In the spirit of Kant, therefore, I have pleaded for moral universalism and cosmopolitan federalism. I have not advocated open but ratherporous borders. I have pleaded for first-admittance rights for refugees and asylum-seekers, but have accepted the right of democracies to regulate the transition from full membership.[14]

The main problem with this neo-Kantian approach is, in my opinion, two-fold. Based with the contradiction between the abstract universalism of a normative conception of cosmopolitan rights, itself based upon the projection of a universal community of human beings as subjects, which is obviously unattainable, they easily opt for a more realistic approach of trying to guarantee some aspects of these rights as part of actual national or supranational configuration, leading to all forms of compromises with current policies, policies that in the end run counter to exactly this conception of universal rights.

In this sense, it is exactly the European Union and its evolution that up to now offers a very material counterargument to the neo-Kantian position. The emerging constitutionalism without democracy, in the form of a guarantee of basic rights (for ‘EU nationals’) that goes hand and in hand with an authoritarian erosion of democratic process without precedent and with the dismantling of social rights and the welfare state, offers the absolute limit of any attempt to think of European Integration as the materialization of Kant’s vision.[15]

Moreover, the new forms of exclusion and the new barriers to migration and the right to safe passage of refugees make it evident that the EU is far from enforcing any kind of cosmopolitan rights. Finally, the new forms of anti-terrorist preventive practices such as attempts at detecting early signs of ‘radicalisation’ along with officially treating the Muslim segments of the European working classes as potentially ‘dangerous classes’, imply the continuity of elements of a colonial ideology and practice, this time turned towards the interior of European Union.[16]

                                                                                           *

Some, exemplified by Sandro Mezzadra and Brett Nielson’s conceptualization of a radical politics of border struggles as productions of new commons, have attempted to go beyond the normative universalism of this Kantian conception of cosmopolitan rights. However, in the end they cannot avoid the oscillation between a radical emphasis on the singularity of struggles that create, in their multitudinous plurality, the new translations of the common, and an acceptance of the framework of European Integration or other institutional forms of ‘globalization’ as given. This is based upon the premise that many struggles can no longer be waged at the level of the national-state:

While the exclusionary dimension of the nation-state, symbolized and implemented by the border, is still very much present in the contemporary world, there still are “defensive” struggles, for instance, for social commons, that are fought at the level of the state. This is probably rightly so. But independently of what we have written about the structural antinomy between the public and the common, the political production of space historically associated with the state no longer offers an effective shield against capital. This means it is a matter of realism for the political project of the common to refuse the idea of positioning itself within existing bounded institutional spaces and to look for the necessary production of new political spaces.[17]

This leads to a position that while it is oriented toward radical forms of emancipation that transcend the capitalist horizon, at the same time it is ready to accept the possibility of more ‘realist’ positions within the framework even of European Integration.

It would be too easy, but no less true, to maintain that the current crisis of European integration makes the huge intellectual investments since the early 1990s in the postnational citizenship emerging in its frame at least overproportioned. This is not to say that we do not see a chance for the political project of the common in the gaps of official institutional structures, which are themselves in-the-making, multilevel, and crisscrossed by multiple crises in Europe and elsewhere in the world. We are convinced that social struggles can nurture a new political imagination capable of working through current processes of regional integration and of opening them toward a reinvention of internationalism.[18]

In a similar manner we see in Saskia Sassen’s work an attempt to re-think the possibility of a ‘global civil society’ not in terms of a normative conception but of an articulation of struggles at the global level that also has the problem of taking as somewhat given the current forms of ‘globalization’, even if the emphasis is on struggles rather than institutional forms.

The category of global civil society is, in a way, too general to capture the specific transboundary networks and formations connecting or articulating multiple places and actors. A focus on these specifics brings “global civil society” down to the spaces and practices of daily life, furthered by today’s powerful imaginaries around the idea that others around the world are engaged in the same struggles. This begins to constitute a sense of global civil society that is rooted in the daily spaces of people rather than on some global stage. It also means that the poor, those who cannot travel, can be part of global civil society. I include here cross-border networks of activists engaged in specific localized struggles with an explicit or implicit global agenda and non cosmopolitan forms of global politics and imaginaries attached to local issues and struggles.[19]

                                                                                              *

In light of the above, Étienne Balibar’s attempts to rethink questions of citizenship are of great interest. Balibar underlines the fact that the exclusionary aspect of nationalism and even racism were one pole of the contradiction of the emergence of contemporary political forms associated with the nation-state, the other being the demand for equality and liberty, what he defines with the neologism ‘equaliberty’.

Here is the extraordinary novelty and at the same time the root of all the difficulties, the nub of the contradiction. If one really wants to read it literally, the Declaration in fact says that equality is identical to freedom, is equal to freedom, and vice versa. Each is the exact measure of the other. This is what I propose to call, with a deliberately baroque phrase, the proposition of equalibertym – a portmanteau term, impossible and yet possible only as a play on words, that alone expresses the central proposition.[20]

The key point is a new form of citizenship based upon the contradictory identification of rights of citizen and rights of man. This new form of citizenship opens up a way for the expansion of the very sphere of politics in ways that also enable the political participation and demands of the subaltern classes.

[T]he signification of the equation Man = Citizen is not so much the definition of a political right as the affirmation of a universal right to politics. Formally, at least-but this is the very type of a form that can become a material weapon-the Declaration opens an indefinite sphere for the politicization of rights claims, each of which reiterates in its own way the demand for citizenship or for an institutional, public inscription of freedom and equality. The rights claims of workers or of dependents as well as those of women or slaves, and later those of the colonized, is inscribed within this indefinite opening, as we see in attempts beginning in the revolutionary period.[21]

Moreover, this emerging new conception of citizenship is also accompanied by a new conception of sovereignty based upon this new conception of politics, this new politicisation of society, this new opening up of the political space.

As far as sovereignty is concerned, as I have tried to show elsewhere, the revolutionary innovation consists precisely in subverting the traditional concept by posing the highly paradoxical thesis of an egalitarian sovereignty-practically a contradiction in terms, but the only way to radically get rid of all transcendence and inscribe the political and social order in the element of immanence, of the self-constitution of the people. From there, however, begins the immediate development of a whole series of contradictions that proceed from the fact that so-called civil society and especially the state are entirely structured by hierarchies or dependencies that are both indifferent to political sovereignty and essential to its institutionalization, even though society or the modern city no longer has at its disposal the means of the ancient city for neutralizing these contradictions and pushing them out of the public sphere, namely, the rigorous compartmentalization of the oikos and the polis.[22]

However, this new formulation of politics is from the beginning traversed by an important contradiction between a politics of insurrection, the revolutionary aspect of the emergence of democratic politics, and a politics of constitution, the politics associated with the State and the established order.

[T]his affirmation introduces an individual oscillation, induces a structural equivocation between two obviously antinomic politics: a politics of insurrection and a politics of constitution-or, if you prefer, a politics of permanent, uninterrupted revolution and a politics of the state as institutional order.[23]

It is here that we find the problem with the emergence of the Nation as the political and ideological form of the new collective subject of democratic politics. Balibar insists that we can witness this tension even at the moment of the French Revolution:

The system of Fraternity tends to be doubled into a national fraternity and, before long, a statist, revolutionary, social fraternity wherein extreme egalitarianism finds expression in communism. The meaning of the Nation changes: it no longer means all the citizens in opposition to the monarch and the privileged, but the idea of a historical belonging centered on the state. At the extreme, through the mythification of language, culture, and national traditions, it will become the French version of nationalism, the idea of a moral and cultural community founded on institutional traditions. Opposed to it, on the contrary, the notion of the people drifts toward the general idea of the proletariat as the people’s people.[24]

For Balibar this tension points to the fact that ‘political modernity comprises two antithetical movements with respect to “anthropological differences”’. On the one hand, we have the universalism that ‘promoted or invented a notion of the citizen that implies not only that an individual belongs to a community but also that he has access to a system of rights from which no human being can be legitimately excluded.’[25] On the other hand, ‘modernity enlarges as never before the project ofclassifying human beings precisely in terms of their differences’.[26] This can explain the violence and brutality of modern forms of exclusion and racism.

Because the human and the political (the “rights of man” and the “rights of the citizen”)are coextensive “by right,” the human being cannot be denied access to citizenship unless, contradictorily, he is also excised from humanity. Therefore— and I apologize for the brutality of a formulation that is nonetheless all- too- relevant in reality because of past and present exclusions based on race, sex, deviance, pathologies, to mention only a few— the human being can be denied such access only by being reduced to subhumanity or defective humanity.[27]

Consequently, Balibar’s proposition for a ‘transnational citizenship’[28] is an attempt to answer the problems associated with racism and exclusion and the grand movements of migrants and refugees, at the same time acknowledging the persistence of the nation-state and the new challenges posed by the emergence of forms like the European Union. This is also evident in his attempt to discuss ways to ‘democratize democracy’ in ways that incorporate contemporary struggles, treating insurrection as the ‘active modality of citizenship: the modality that it brings intoaction.’[29] The problem, is that although Balibar is in no way a naive partisan of European Integration, something exemplified in his insistence that ‘along with the development of a formal “European Citizenship”, a real “European Apartheid” has emerged’,[30] in the end he attempts to take it for granted as the terrain for such a strategy.

                                                                                             *

A certain opposition to the above discussed positions comes in the form of what we can define as a neo-republican defence of the nation-state and of national identities. Here the line of reasoning is the following. Despite the rhetoric of globalization nation-states remain indispensable nodes for the reproduction of capitalism. Emerging supranational forms, such as the European Union and the entire drive towards European Integration tend to undermine nation-states in favour of the forces of globalized capital and also to erode democracy by sharply reducing the terrain and scope of popular sovereignty. Capitalist elites accept this condition of limited or eroded sovereignty because they want to be part of globalized reproduction of capitalist accumulation. This erosion of democracy undermines democracy, because democracy can only be an active political condition when there are a demos and a popular will that can be exercised in a particular territory. There can be no supranational demos and consequently no cosmopolitan democracy.

Up until this point, this neo-republican argument indeed points to actual problems with contemporary forms of reduced sovereignty and the absence of real democratic process at the level of supranational institutional arrangements such as the European Union. However, there is another aspect to this argument: the association of demos with the nation. According to this argument the political body, in order to be a democratic political body it requires an element of common culture, history and community, a necessary commitment to a common identity. Consequently, the argument goes, contemporary ‘multiculturalism’, in the sense of mass migration but also in the sense of emergence of a globalized mass culture undermined the necessary common identity and common commitment that is the backbone of the emergence of the modern forms of popular sovereignty. Some versions of this argument have been used by the Far-Right in order to defend their own version of neoracist politics, especially in relation to closed borders and discriminations against migrants and refugees in the name of a return to the necessary supposed ‘purity of the nation’ or of the purity of the ‘national culture’.

In other instances, this discourse distances itself from any openly racist arguments, but it does centre upon the need for some common elements of political culture that supposedly enable this re-emergence of the demos-people of the nation-state. The French version of ‘Republicanism’ offers such a case.[31] And it is interesting to see the positions of some of the left-wing proponents of neo-republicanism.

Perhaps the most telling case is that of Régis Debray. The former guerrillero already in 1978 insisted on the importance of the national aspects of any revolutionary sequence:

The reason is that if the masses do make history, and if they are not an abstraction roaming around above existing frontiers and languages—if they exist only within circumscribed cultural and natural communities—then they make history as and where they are, from below and not above, piece-meal and not globally. There is no one single history for everybody; the time of history is not the same in Tokyo, Paris, Peking and Venezuela. When a world revolutionary programme attempts to gather multiplicity into unity and rationalize the whole movement, it goes against the historical process itself, for the latter proceeds from unity to multiplicity. Things always happen from below, multiplicity is always victorious.[32]

It is obvious that we are still dealing here with an attempt to see the national aspects of any potential revolutionary sequence, echoing in a certain manner the relation of national and social struggles in the revolutionary movements in the Third World. However, from the 1980s onwards Debray’s positions moved from the question of revolution to the question of what constitutes the reclaiming of the French republican tradition. As Emile Chabel has stressed for Debray the Republic as ‘a repository of national memory, cultural heritage and enlightenment values [...] is the only possible bulwark against the decadence of Democracy and the warped ethics of financial capitalism’.[33] More recently, he has offered an impressive defence of frontiers in which he attacks all those that call for a world without borders as being defenders of the economism of the ‘global marketplace’, of ‘technicism’, of ‘absolutism’ and of imperialism, against which he calls for ‘a right to the frontier’.[34]

Another example is the work of Jacques Sapir, a former student of Charles Bettelheim, a specialist in the transition from USSR to Russia and one of the fiercest critics of globalization but also of European Integration. However interesting many of his observations regarding globalization, the problems with the Eurozone and his critique of the EU are, at the same time, his positions encapsulate the problem with a certain version of the neo-republican argument. Sapir is careful to avoid any identification of the Nation to race or even common origin. What he insists upon is the centrality of the people, defined as political body sharing common values and not common ancestry. This unity of the political body is threatened, according to Sapir by new forms of communitarianism, especially those related to religion. For Sapir the attack on sovereignty opens up the way for its dissolution. The unity of the people requires secularism, because it is secularism that relegates these religious and communitarian elements to the private sphere. ‘We cannot have a people, the base of the political construction of popular sovereignty, without secularism which confines to the private sphere the divergences upon which no discussion can be held.’[35] Sapir refuses any conceptualization of ethnicity in biological terms, yet he insists on the need of anyone participating in the nation to share the history and the language of any society he participates in. Consequently, in a certain way he isa posteriori making a certain reference to national identity a prerequisite for the participation of the political process.

Ethnicity [l’ethnie] is a social construction and not a biological reality and sometimes it has to do with a discursive myth used to separate one population from another. But after we have repeated these truths, we will, nevertheless, be confronted with the acquisition of the necessary rules for a life in society by those that newly arrive to become part of a population. And it is here that we find the frontier between the mythical discourse of a “big replacement” and the fact, equally real, of the failure of integration of a part of the immigrant populations, because these do not have the references that they could assimilate. Integration is a process of assimilation of rules and customs which is in part conscious– we make an effort to learn the language and history into which we want to integrate into –but it is equally unconscious. For this unconscious mechanism to be put into motion there is also need of a reference point. Disappearing or effacing this reference point in the name of a multiculturalism that only means the tolerance to practices that are very different is a real obstacle to this integration.[36]

It is here that we see the crucial semantic shift of this neo-republican defence of the nation. The very notion of common culture brings us very close to classical nationalism and it is a well documented fact that most versions of racism in Europe in the past decades do not focus on origin but upon sharing of a common culture. Sapir is very clear that the formation of a people requires common values: ‘it is clear that without “common value”, a human community cannot constitute a political community’.[37] And here is the problem with this position: How can we define these common values? How we deal with the fact that in class societies these values represent hegemonic strategies? What about the challenge posed by colonialism, both in its past but also in its present in the form of discrimination against former colonial subjects now living in the metropolis.

Moreover, Sapir is very clear that he considers that there is a problem with certain immigrant communities and that he believes that they can’t integrate. He thinks that there is a certain segment of the immigrant youth that shows elements of anomie and their opting of identity reveals the kind of narcissism that Sapir associates with fundamentalism. It is in these terms that he designates multiculturalism as the enemy, in the sense that he thinks that a multiculturalist embracing of heterogeneity undermines the convergence in terms of culture of values that is necessary for the political construction of the people.

There is here a dialectic that we cannot surpass and with which we are condemned to live. If heterogeneity is a state of the political community, its constitution in ‘people for itself’, can only be made by means of a convergence of aspirations and views on the future. This convergence implies a common political culture and this is contradictory with the multiculturalism.[38]

However, despite Sapir’s attempts to offer a conceptualization of the political construction of the people of popular sovereignty in the end he opts for a rather classical conception of the Nation, along with the State, as the basis of popular sovereignty, a position that brings us back to all the classical problems associated with a national conception of contemporary societies.

Therefore, the idea of separating the people from the nation and from the State, even if it is necessary from an analytical point of view, it is impossible from the point of view of practical result. The people, conceived as political community, have no concrete existence outside the State and the nation, even if it can consciously, but also unconsciously, transform both. There are complex relations between the people, the nation and the State and these relations defy simplifications. The constitution of a people unite in its will to live together and to create in common, even if this will can partly be the fruit of institutions that have constructed necessary affects, is well the point of obligatory passage without which the constitution of a nation will fail. This is one of the lessons that we must retain from the centrality of the concept of sovereignty. When a population, whatever it is, desires to make something in common, there is sovereignty. But from the moment that this population is heterogeneous, it helps to move out of the public space certain questions. That is why, since many centuries, sovereignty and secularism have forged a pact of necessary alliance.[39]

Therefore in the case of Sapir from the question of the political construction of the people, we move back to the nation as common culture, history, and language and as need to exclude from the political (and cultural) space of the people certain cultural or religious reference points, however important they might be for large segments of the subaltern classes of immigrant origin. And in the case of Sapir, this can lead to dangerous political associations, such as his recent insistence to treat the Far Right Front National as a potential part of a broader front in favour of sovereignty.

In general, it would be unfair to say that this conception of the secular and democratic nation as the community of the demos is based upon strictly national or racial elements. One might say that most supporters of a neo-republican conception of the nation-state opt for some form of a performative conception of nationhood. For them it is not a question of race, ethnicity or colour, but of the performance of certain cultural and discursive elements that guarantee the unity of the demos: rationalism, secularism, tolerance, multiculturalism and a certain form of feminism. Especially the feminist aspect was particularly important in France, in the support given by mainstream feminism to repressive measures such as the ban on the scarf in the name of liberation of women, despite the opposition from exactly the subjects supposed to be liberated.[40] However, the end result is the same as with typical racism: a multiplication of forms of exclusion and an increasing tendency towards treating collective practices, cultures, discourses as inappropriate for democratic participation, as reasons to forbid the participation in the collective political body of the people.

                                                                                               *

Moreover, in the debates on secularism, especially in France with all the political confrontations around the notion of laïcité we can see the reproduction of elements of a certain Islamophobia and a certain reluctance to deal with the colonial past and its continuous effectivity in order to understand the forms of contemporary racism. The 2003 debate around the question of the scarf brought forward the unease of certain segments of the Left, including some from the anticapitalist Left, with the reality of the cultural referents of subaltern strata of immigrant origin, and the danger that a certain kind of neo-republican defence of secularism andlaïcité can lead to alliances with systemic political forces. Laurent Lévy has offered a very powerful account of these debates.[41] It is also important to note that there have also been other important contributions recently to these debates that highlight that the ‘divergences’ in French society that Sapir stressed are not the result of the supposed narcissistic attachment of immigrant youth to fundamentalism but of the actual continuation of colonialisminside French society, not only in the form of ideological prejudice but also of real exclusion. Sadri Khiari offers an important account of the history of racism and discrimination in France and how racism was in fact a class political strategy from the part of the dominant classes.[42] Moreover, recent developments and anti-racist and anti-colonial struggles have shown that integration is not an attempt towards creating a more open political community but in reality a way to enhance exclusion and separation. It is obvious that we are also dealing here with the fact that from the very beginning colonialism was the dark side of the construction of the modern nation-state, especially in Europe, exemplified in the way both the war and the liberation of Algeria was perceived in France. In a similar manner, contemporary interventions from the part of radical antiracism especially in France, such as the collective effort of the current associated with theParti des Indigènes de la République,[43] offer an important reminder of the persistence of a neo-colonial form of state-induced racism still active at the heart of the European Project. Moreover, they make it evident that contemporary forms of attacks against the Muslim segments of the working classes of Europe, supposedly in the name of containing ‘radical Islam’, in fact represent class strategies in order to keep them in a very particular condition of subalternity. However, what is most worrying is the tendency by certain segments of the radical Left, including the anticapitalist left, to accept some of the basic tenets of such positions, exemplified in the support of the Left of certain forms of ‘forced emancipation’ in the name of the secular state.

However, the same trauma at the heart of the modern nation-State could also be observed elsewhere. Hannah Arendt, a critical witness to one of the most important recent conscious attempts at nation-building, namely the formation of modern Israel, offered in the 1940s important warnings about the association of popular sovereignty and nationalism, especially in cases where the political establishment of the nation was based also on a founding moment of exclusion and oppression of other people already there.[44]

                                                                                                *

So the question remains: is it possible to conceive of some form of recuperation of popular sovereignty, without having to fall back into some form of nationalism or any variety of the political and ideological constructions that tend to reproduce exclusion or neo-colonial exclusion?

One way to deal with this is by a detour through Gramsci. Gramsci's preoccupation with the emergence of what he defined the national-popular will is well known.[45] For Gramsci the ‘national-popular’ collective will, represents a form of modern statehood associated with the revolutionary ‘Jacobin’ tradition of the bourgeoisie, an element missing from the emergence of the Italian State, in many instances.

One of the first sections must precisely be devoted to the "collective will", posing the question in the following terms: "When can the conditions for awakening and developing a national-popular collective will be said to exist?" Hence an historical (economic) analysis of the social structure of the given country and a "dramatic" representation of the attempts made in the course of the centuries to awaken this will, together with the reasons for the successive failures. Why was there no absolute monarchy in Italy in Machiavelli's time? One has to go back to the Roman Empire (the language question, problem of the intellectuals, etc.), and understand the function of the mediaeval Communes, the significance of Catholicism etc. In short, one has to make an outline of the whole history of Italy-in synthesis, but accurate.

The reason for the failures of the successive attempts to create a national-popular collective will is to be sought in the existence of certain specific social groups which were formed at the dissolution of the Communal bourgeoisie; in the particular character of other groups which reflect the international function of Italy as seat of the Church and depositary of the Holy Roman Empire; and so on. This function and the position which results from it have brought about an internal situation which may be called "economic-corporate" –politically, the worst of all forms of feudal society, the least progressive and the most stagnant. An effective Jacobin force was always missing, and could not be constituted; and it was precisely such a Jacobin force which in other nations awakened and organised the national-popular collective will, and founded the modem States.[46]

However, Gramsci stresses the fact that this kind of formation of the national-popular will represents only a particular ‘revolutionary’ phase of the bourgeoisie and that ‘[a]ll history from 1815 onwards shows the efforts of the traditional classes to prevent the formation of a collective will of this kind, and to maintain "economic-corporate" power in an international system of passive equilibrium.’[47]

Gramsci uses the French example and the particular importance of the role of the subaltern classes in the formation of the national-popular will in order to emphasize the absence of such an element in the Italian case. However schematic his conceptualization of the French case might be, the important point lies in his attempt to emphasize the possibilities of alternative forms of formation of the national-popular element, depending upon different national histories.

The works of French historians and French culture in general have been able to develop and become ‘national-popular’ because of the very complexity and variety of French political history in the last 150 years. [...] A unilinear national ‘hagiography’ is impossible: any attempt of this sort appears immediately sectarian, false, utopian, and anti-national because one is forced to cut out or undervalue unforgettable pages of national history (see Maurras’ current line and Bainville’s miserable history of France). That is why the permanent element of these political variations, the people-nation, has become the protagonist of French history. Hence a type of political and cultural nationalism that goes beyond the bounds of the strictly nationalist parties and impregnates the whole culture. Hence also a close and dependent relationship between people-nation and intellectuals.

There is nothing of the sort in Italy, where one must search the past by torchlight to discover national feeling, and move with the aid of distinctions, interpretations, and discreet silences. [...] Consequently, in the history of the nineteenth century, there could not have been national unity, since the permanent element, the people-nation, was missing. On the one hand, the dynastic element had to prevail given the support it received from the state apparatus, and the divergent political currents could not have had a shared minimum objective. [...] Due to this position of theirs, the intellectuals had to distinguish themselves from the people, place themselves outside, create or reinforce among themselves a spirit of caste and have a deep distrust of the people, feeling them to be foreign, fearing them, because, in reality, the people were something unknown, a mysterious hydra with innumerable heads.

[...] But one must not deny that many steps forward have been taken in every sense: to do so would be to fall into an opposite rhetoric. On the contrary, many intellectual movements, especially before the war, attempted to renew the culture, strip away its rhetoric and bring it nearer to the people, in other words nationalize it. (The two tendencies could be called nation-people and nation-rhetoric.)[48]

It is interesting the distinction that Gramsci makes between nation- people (popolo-nazione) and nation-rhetoric, that marks exactly the negative version of nationalism that does not incorporate the popular, the subaltern element. The same goes for Gramsci’s critique of any conception of the eternity of the nation (an important point taking into consideration the element of a perceived historical continuity in the Italian peninsula). ‘The preconception that Italy has always been a nation complicates its entire history and requires anti-historical intellectual acrobatics’.[49] Hence, we have Gramsci’s denouncement of easy nationalist rhetorical constructions.

This fact is the most peremptory confirmation that in Italy writers are separated from the public and that the public seeks ‘its’ literature abroad because it feels that this literature is more ‘its own’ than the so-called national literature. In this fact lies an essential problem of national life. If it is true that each century or fraction of a century has its own literature, it is not always true that this literature is produced in the same national community. Every people has its own literature, but this can come to it from another people, in other words the people in question can be subordinated to the intellectual and moral hegemony of other peoples. This is often the most strident paradox for many monopolistic tendencies of a nationalistic and repressive character: while they make magnificent hegemonic plans, they fail to realize that they are the object of foreign hegemonies, just as while they make imperialistic plans, they are in fact the object of other imperialisms.[50]

For Gramsci the national element cannot be identified to the nationalistic element. The national element, regarding culture and ideological production, refers to a particular relation with a national history and a historical / cultural environment not with loyalty to a national group. One might say that it is an analytic not a prescriptive term:

National, in other words, is different from nationalist. Goethe was a German ‘national’, Stendhal a French ‘national’, but neither of them was a nationalist. An idea is not effective if it is not expressed in some way, artistically, that is, particularly. But is a spirit particular in as much as it is national? Nationality is a primary particularity, but the great writer is further particularized among his fellow countrymen and this second ‘particularity’ is not the extension of the first. Renan, as Renan, is by no means a necessary consequence of the French spirit. Through his relation to it he is an original event, arbitrary and (as Bergson says)unpredictable. And yet, Renan remains French, just as man, while being man, remains animal. But his value, as is true of man, lies precisely in his difference from the group from which he was born.

 It is precisely this that the nationalists do not want. For them the value of the masters (great intellectuals) consists in their likeness to the spirit of their group, in their loyalty, in their punctual expression of this spirit (which is, moreover, defined as the spirit of the masters (great intellectuals) so one always ends up being right).[51]

For Gramsci the national element refers not to some ideal or some form of social essence but rather to the different and specific histories of each social formation, and the different historicities expressed in the particular relations of force that determine the context of each society. Moreover, this is something that has to be taken into account in any attempt to formulate a revolutionary strategy that has to be national, in the sense that the point of departure of any revolutionary project is national, any hegemonic project must take into account these national peculiarities.

In reality, the internal relations of any nation are the result of a combination which is "original" and (in a certain sense) unique: these relations must be understood and conceived in their originality and uniqueness if one wishes to dominate them and direct them. To be sure, the line of development is towards internationalism, but the point of departure is "national"-and it is from this point of departure that one must begin. Yet the perspective is international and cannot be otherwise. Consequently, it is necessary to study accurately the combination of national forces which the international class [the proletariat] will have to lead and develop, in accordance with the international perspective and directives [i.e. those of the Comintern]. The leading class is in fact only such if it accurately interprets this combination--of which it is itself a component and precisely as such is able to give the movement a certain direction, within certain perspectives.[52]

Despite the fact that the working class is the only class truly internationalist in scope and in a sense the bearer of a new type of universalism, any strategy for working class hegemony passes through this attention to the national element, this need to ‘nationalize’ itself to a certain extent:

It is in the concept of hegemony that those exigencies which are national in character are knotted together; one can well understand how certain tendencies either do not mention such a concept, or merely skim over it. A class that is international in character has in as much as it guides social strata which are narrowly national (intellectuals), and indeed frequently even less than national: particularistic and municipalistic (the peasants)-to "nationalise" itself in a certain sense.[53]

It is also interesting that Gramsci insisted on the different qualities that a proletarian or popular version of collective will might have, insisting on the ‘cosmopolitan’ and internationalist elements in the proletarian collective will. In contrast to the attempt by Enrico Corradini to justify nationalism and imperialist expansion on the basis of the character of Italy as ‘proletarian nation’ and Giovanni Pascoli’s hybrid ‘proletarian nationalism’,[54] Gramsci insists on the emancipatory and transformative elements in a potential Italian working class ‘cosmopolitanism’, enhanced by the experience of migration and based not upon some abstract universalism but upon the very particular universality of the working class condition, the universality of subalternity. It is this that makes it part of a broader project of social transformation and emancipation.

At present in Italy the element ‘man’ is either ‘man-capital’ or ‘man-labour’. Italian expansion can only be that of ‘man-labour’ and the intellectual who represents man-labour’ is not the traditional intellectual, swollen with rhetoric and literary memories of the past. Traditional Italian cosmopolitanism should become a modern type of cosmopolitanism, one that can assure the best conditions for the development of Italian ‘man-labour’ in whatever part of the world he happens to be. Not the citizen of the world as civis romanus or as Catholic, but as producer of civilization. One can therefore maintain that the Italian tradition is continued dialectically in the working people and their intellectuals, not in the traditional citizen and the traditional intellectual. The Italian people are the people with the greatest ‘national’ interest in a modern form of cosmopolitanism. Not only the worker but also the peasant, especially the southern peasant. It is in the tradition of the Italian people and Italian history to collaborate in rebuilding the world in an economically unified way not in order to dominate it hegemonically and appropriate the fruit of others’ labour but to exist and develop precisely as the Italian people. It can be shown that Caesar is at the source of this tradition. Nationalism of the French stamp is an anachronistic excrescence in Italian history, proper to people who have their heads turned backwards like the damned in Dante. The ‘mission’ of the Italian people lies in the recovery of Roman and medieval cosmopolitanism, but in its most modern and advanced form. Even indeed a proletarian nation, as Pascoli wanted; proletarian as a nation because it has been the reserve army of foreign capitalism, because together with the Slavic peoples it has given skilled workers to the entire world. For this very reason, it must join the modern front struggling to reorganize also the non-Italian world, which it has helped to create with its labour.[55]

Gramsci had this conception of the proletariat as the only truly ‘national’ class – in the sense of achieving a higher form of unity of a society but also with an internationalist scope – already in 1919. In an article in October 1919 in Ordine Nuovo, Gramsci insists that:

Today, the ‘national’ class is the proletariat, and the multitude of the workers and peasants, of Italian working people, who cannot allow the break-up of the nation, because the unity of the State is the form of the organization of production and of exchange constructed by Italian labour, is the patrimony of social wealth that the proletarians want to bring to the Communist International. Only the proletarian State, the proletarian dictatorship, can today stop the process of dissolution of the national unity. [56]

It is on the basis of this assumption regarding the inability of the bourgeoisie to actually lead the project for the formation of such a national-popular will, that Gramsci assigns this task to the ‘Modern Prince’ the political form of a potential working class hegemony. Here the emergence and formation of national-popular will is linked both to a process of socialist transformation at the economic sphere, but also to ‘intellectual and moral reform’

The modern Prince must be and cannot but be the proclaimer and organiser of an intellectual and moral reform, which also means creating the terrain for a subsequent development of the national-popular collective will towards the realisation of a superior, total form of modern civilisation.

These two basic points-the formation of a national-popular collective will, of which the modern Prince is at one and the same time the organiser and the active, operative expression; and intellectual and moral reform-should structure the entire work. The concrete, programmatic points must be incorporated in the first part, that is they should result from the line of discussion "dramatically", and not be a cold and pedantic exposition of arguments.

Can there be cultural reform, and can the position of the depressed strata of society be improved culturally, without a previous economic reform and a change in their position in the social and economic fields? Intellectual and moral reform has to be linked with a programme of economic reform-indeed the programme of economic reform is precisely the concrete form in which every intellectual and moral reform presents itself. The modern Prince, as it develops, revolutionises the whole system of intellectual and moral relations, in that its development means precisely that any given act is seen as useful or harmful, as virtuous or as wicked, only in so far as it has as its point of reference the modern Prince itself, and helps to strengthen or to oppose it. In men's consciences, the Prince takes the place of the divinity or the categorical imperative, and becomes the basis for a modern laicism and for a complete laicisation of all aspects of life and of all customary relationships.[57]

It is important to note that the notion of ‘moral and intellectual reform’, which Gramsci borrows from but uses beyond its original coinage by Ernest Renan and its reading by Sorel, not only forms an important part of Gramsci’s critique of Croce, but also can be associated with Lenin’s notion of the ‘cultural revolution’, referring to the extent and depth of the intellectual, ideological and cultural transformation that any hegemonic project requires.[58] Leonardo Rapone, in his detailed study of Gramsci’s formative years (1914-1919) has shown that Gramsci from the beginning, faced with various forms of Italian nationalism had this conception of socialism not only as a transformation of the economic structure but also as a profound ‘intellectual renovation and moral transformation’[59] of Italian life. It is obvious that here Gramsci refers to the national popular will being the result of a process of profound economic, social and ideological transformation as part of a socialist strategy and not just the articulation of existing national elements. It is also significant that in the first version of this passage in Q4, §33 instead of people-nation the reference is to people-masses, something that emphasizes that for Gramsci the emergence of the contemporary nation is inextricably linked to the collective practices of the popular masses. Moreover, it stresses the fact that for Gramsci the ‘nation’ in fact refers, to a great extent, to the subaltern classes and in particular the working class.

Now, can we find in Gramsci’s writings a way to deal with the challenges associated with questions of popular sovereignty and the potential collective body that would express and implement it? I understand that a possible objection would be that Gramsci dealt with a period when the question was still about recognizing subalternity as part of nationhood, that is of actually unifying the nation and dealing with forms of internal exclusion, exemplified in the Italian case with all the contradictions of the vicissitudes and complexities of the Southern Question [questione meridionale]. However, a closer reading of Gramsci’s various references to the Southern Question even in his pre-prison writings suggests that his conception of new process of unification under proletarian leadership was not just about ‘unity’ but also overcoming forms of exclusion that resemble contemporary questions about decolonial struggles.[60] Already in January 1920 Gramsci insisted that

The Northern bourgeoisie has subjugated the South of Italy and the Islands, and reduced them to exploitable colonies; by emancipating itself from capitalist slavery, the Northern proletariat will emancipate the Southern peasant masses enslaved to the banks and the parasitic industry of the North. The economic and political regeneration of the peasants should not be sought in a division of uncultivated or poorly cultivated lands, but in the solidarity of the industrial proletariat. This in turn needs the solidarity of the peasantry and has an "interest" in ensuring that capitalism is not re-born economically from landed property; that Southern Italy and the Islands do not become a military base for capitalist counter-revolution.[61]

Gramsci elaborates these questions more in his 1926 Some Aspects of the Southern Question[62], which deals more with the complexities and difficulties in the creation of this new form of national-popular unity, the role of intellectuals and the questions that would late drive a great part of his elaborations around the concept of hegemony.

At the same time, it is obvious that Gramsci’s writings dealt with another conjuncture which to a certain extent justifies Stefan Kipfer and Gillian Hart’s assessment that Gramsci is ‘both vital and insufficient to approach anti- and post-colonial nationalisms’.[63] I would also agree with Kipfer and Hart on the need to ‘stretch’ Gramsci beyond whatever ‘Eurocentric’ limitations his view had, into questions of ‘“race” and ethnicity, as well as sexuality and gender’[64] and into a dialogue with the work of Fanon, since ‘[l]ike Gramcsi, Fanon saw organic intellectuals as organizers whose leadership grows out of and constantly returns to the common and good sense of subaltern life’.[65]

Yet I would like to insist, that despite certain blind spots in his thinking Gramsci remains more pertinent in these contemporary debates, exactly because he suggested a redefinition of the popolo-nazione based upon the determining inclusion and influence of the subaltern classes, of the popular masses. In a certain manner, this remains the case today.

                                                                                           *

Therefore, I would suggest that the only way to rethink the possibility of reclaiming popular sovereignty in a manner that does avoid the pitfalls of both cosmopolitan universalism and exclusionist nationalism is by means of a redefinition of the people based upon the contemporary condition of subalternity in the context of contemporary capitalist accumulation, which in fact has expanded the linkages between subalternity and the subjection to capitalist accumulation, in both direct and indirect ways. This implies a redefinition of the people that delinks it from ethnicity, origin or common history and instead links it to common condition, present and struggle. It is a rather scissionist conception of the people because it also includes an oppositional approach to the ‘enemies of the people’, many of them nominally ‘members of the nation’. Frédéric Lordon has offered a sufficiently provocative description of this transformative and emancipatory conception of the people, in terms of what he defines as the new landscape of the nation, one which includes also this conception that not everyone can belong to the people...

Here is the new landscape of nationality: Bernard Arnault ? Not French. Cahuzac? Not French. Johnny and Depardieu who wander around the world like a self-service shop for passports? Not French. The Mamadous and the Mohammeds that toil in sweatshops, that do the work that no one else wants to do and pay their taxes are a thousand times more French than this race of masters. The blue-bloods of tax evasion, out! Passport and welcome to all the dark-coloured people are dwelling on this territory, those that have contributed twice, by their labour and their taxes to collective life, a double contribution that gives its own unique criterion to the belonging to what, yes, continues to be called a nation![66]

It is obvious that we need a conception of the people that is post-national and de-colonial. I would like to insist that we can have a political conception or more exactly a politically performative conception of the people and of – to use Gramscian terminology – the people-nation. We are no longer dealing with the ‘imaginary community’ of ‘common blood’; it is the unity in struggle of the subaltern classes, the unity of those that share the same problems, the same misery, the same hope, the same struggles. The people are not a common origin; they represent a common condition and perspective. It is an antagonistic conception of the nation that also demands a ‘decolonialisation’ of the nation, as recognition of the consequences of colonialism and state racism, the struggle against all forms of racism within a potential alliance of the subaltern classes.

Institutionally, it is based upon the offering of full political rights and not just ‘rights of hospitality’, to everyone that is living and working in a given territory. Culturally it answers the dangers of predefined cultural norms and values with a conception of democratic political culture as constant reconstruction and constant ‘work in progress’.

I have stressed the element of the struggle against racism in all its form as an important aspect of this (re)construction of people. In contemporary societies, where racial divisions inside the working class are becoming more important, the challenge of overcoming racism is not just about unity of the working and popular masses. As Jacques Rancière has suggested the crucial aspect is the identification with the cause of the other as a constituent moment of the production of the people. Writing about the importance of the movement against the French’s State war in Algeria as a crucial aspect of political subjectification, he insists that the crucial step was the dis-identification with the French State that was responsible for repression, including the infamous 17 October 1961 police murders of more than 100 Algerian protesters in Paris. This process of dis-identification with the State and the identification with the cause of the other is ‘the production of a people that is different of the people that is seen, talked, counted by the State, a people defined by the manifestation of a harm made to the constitution of a common, which constructs by itself another space of community’.[67]

In this sense, following Deleuze we are talking about a people that is missing, a people that has to be produced, a people-to-come, ‘[n]ot the myth of a past people, but the story-telling of the people to come. The speech-act must create itself as a foreign language in a dominant language, precisely in order to express an impossibility of living under domination.’[68]

                                                                                            *

Consequently, we must return to Gramsci and his strategic and transformative conception that links the popolo-nazione and a potential historical bloc.

If the relationship between intellectuals and people-nation, between the leaders and the led, the rulers and the ruled, is provided by an organic cohesion in which feeling-passion becomes understanding and thence knowledge (not mechanically but in a way that is alive), then and only then is the relationship one of representation. Only then can there take place an exchange of individual elements between the rulers and ruled, leaders [dirigenti] and led, and can the shared life be realised which alone is a social force with the creation of the "historical bloc".[69]

Now this conception of the historical bloc points to something more complex than the formation of the people by means of a process of signification that creates both a common identity and an opposition to a common ‘enemy’, however important such aspects are for this re-emergence of the people as the collective agent of transformation and emancipation. When dealing with the particular problems posed by the need to create new forms of popular unity between the different segments of the subaltern classes and groups divided as they are by ethnic or religious lines, but also by the institutional division between citizens and migrants as well as undocumented migrants, more important than the common ‘cultural referents’ are the collective practices, demands, strategies, re-writings of histories, understandings of each other, and –above all – common aspirations, that can indeed induce the common identification as people. This process also requires concrete struggles for the institutional forms that enable this convergence, especially full social and political rights, but also the forms of political organizing and mass political intellectuality that link this common condition to common hegemonic projects of transformation and emancipation and help the articulation of common struggles and alliances. In sum, it is what Gramsci tried to define as the ‘Modern Prince’, the political form of a modern United Front.

Moreover, the people are not just a ‘discursive’ construction, in the sense of an arbitrary articulation of disparate elements into a temporary form of coherence. Our conception of the people in based upon class analysis and the potential for alliances of the subaltern classes. Following Poulantzas we can say the people is a ‘concept for strategy’,[70] that today point to the direction of an actual social alliance, formed as a result of the evolution of the contemporary forms of capitalist accumulation that create ‘objective’ material conditions that bring together working class strata with new petty bourgeois strata (in the Poulantzian sense), state employees and even segments of the traditional petty-bourgeois strata, as a result of the inability of contemporary neoliberal policies to enhance a lasting historical bloc around finance and multinational capitals, and the new forms of precariousness, flexibility and over-exploitation that have been intensified against both manual and intellectual labour. This indeed creates common demands and interests, based upon the common condition of labour, precariousness, unemployment, exploitation, increased difficulty in dealing with basic needs that, that in a certain manner unite the undocumented migrant with the young degree holder that moves from unemployment into precarious part-time work and back into unemployment. Moreover, all these segments share the same contradiction running through contemporary capitalism: the fact that contemporary labour force is at the same time more precarious, more insecure, more subject to forms of systemic violence, more fragmented, but also more in possession of those intellectual and communicative skills to realize its role as producer of social wealth and also to articulate demands and grievances (a comparison between the communication strategies of modern grass-root movements and certain aspects of the ingenuity of collective resistances by refugees and undocumented migrants can be really illuminating on this subject). Moreover, all these have also taken actual collective forms of ‘encounters’ between the different segments of a potential ‘people’ in contemporary movements.

Such a perspective poses important challenges regarding the hegemonic aspects of such a strategy. They pose the need to rethink the question of re-creating the collective subject of emancipation to look directly at the traumas linked to oppression and colonialism and to reconfigure, as Houria Bouteldja has suggested, the ‘we’ of a new political identity to be collectively invented.[71] They require a certain encounter between different currents, not only in the sense of political differences but also of the differences created by the reproduction of the colonial condition, inside European States. Sadrik Khiari posits this exigency when he calls for the construction of a ‘decolonial majority, which will be constituted by an alliance between indigenous political forces and non indigenous decolonial political forces’ or when he calls for a ‘politics of hegemony inside the French white population, a cultural, moral, ideological politics in order to be, one day, conceivable that there are inside the white political forces decolonial composing elements that will be based upon a broad consensus inside the population’.[72] In a similar manner it is interesting to note his suggestions on how the movements of what he defines as ‘indigenous’ (namely the former colonial subjects living as citizens or migrants in European states) can contribute to the broader redefinition of movements of emancipation.

[T]he French Indigenous but also non indigenous population suffers a degradation not only of its economic conditions of life but also of its entire life environment, a destruction of cultures, of popular knowledges, of traditions, of citizenship, of many social links, problems that cannot be resolved simply by the nationalisation of the means of production and by planification, either statist or self-managed. To these questions, which are complicated questions, I think that the indigenous are maybe more in position than the left or the far left to find answers, to the extent that these are questions that are being directly posed to them because they are the fundamental forms of racialisation.[73]

And it is here that we find the importance of solidarity and solidarity movements to refugees, especially forms that attempt to create common spaces and practices of solidarity, such as self-managed forms of hospitality that combine an immediate answer to a humanitarian crisis with struggles that treat refugees as collective subjects and not simply ‘victims’. The example of the self-managed Plaza Hotel in Athens and other self-managed centres that offer forms of hospitality to refugees is one such example. The same goes for all forms of common struggle across Europe, all attempts to create new alliances based upon a common condition of subalternity. From struggles for the rights of migrant labour to initiatives such as the ‘March for Dignity’ in France, these are all aspects of an attempt to ‘create people’.

It is also important to note that this conception of the people in terms of a potential new ‘historical bloc’ in sharp contrast to both a certain version of ‘multiculturalism’,[74] that treats societies as simple aggregations of individuals and differences but also from the neo-republican version of the people as common history and shared values. It points to a people to be created, it accepts all the referents of subaltern classes as necessarily contradictory elements of a people to come, of a ‘national-popular’ element that has yet to be constructed, in a constant process of reconstruction / reproduction / renewal. Above all, it is a conception of the construction of the people that does not put class antagonism into brackets; rather it takes it as a starting point.

 All this suggests that simply thinking about the rights of those not included in the nation, however important this might be, is not enough, because it does not challenge the current erosion of both democracy and popular sovereignty as part of very specific social and political strategies that enhance developments such as European Integration. Moreover, an emphasis upon rights, without a challenge of European Integration can lead either to fruitless pursuit of inscribing those rights within the institutional framework of ‘Fortress-Europe’, at a phase when the opposite is more probable, or to various forms of compromises, such the current distinctions between ‘refugees’ and ‘migrants’. And the answer to this impasse cannot be the invocation of a utopian ‘global’ right to nomadic movement – however important it is to guarantee full social and political rights to anyone living and working in a country – exactly because as in the former case it does not point to the actual political forms than can account both for the defence of these rights but also for the possibility to really struggle against racism by creating the kind of antagonistic political body that would re-signify both democracy and social transformation. In contrast, the choice of reclaiming popular sovereignty, in the form of ruptures with international institutional forms that undermine democracy, such as the EU and the Eurozone, along with the demand for full rights and citizenship for anyone living and working in a country (and in general contributing to its collective social life), indeed offers an alternative creating conditions for broader process of transformation. It is exactly the prospect of social transformation, a common future instead of a common history or origin that creates a different antagonistic (and agonistic) form of ‘popular unity’.[75] In this sense, a renewed socialist perspective, along the lines of such an emergence of a new historical bloc, is both a potential outcome and a necessary condition of dealing with the new forms of exclusion that emerge. And it is here that we can find the basis of a new internationalism, new forms of cooperation and solidarity. Solidarity inside a country is the condition for solidarity abroad; a different social and political configuration is the condition for a different ‘foreign policy’.

Consequently, it is exactly the emergence of a new historical bloc than can actually give a different meaning to sovereignty, linking it to social transformation and emancipation, basing it upon a strategy to actually fight racism and neocolonialism and transforming into a form of a potentially revolutionary ‘general will’, representing the democratic instance that is at the heart of communism as a material tendency.

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Liguori, Guido 2015, Gramsci’s Pathways, Leiden: Brill / Historical Materialism Book Series.

Lévy, Laurent 2010, La «gauche», les Noirs et les Arabes, Paris : La Frabrique

Lordon, Frédéric 2013, ‘Ce que l’extrême droite ne nous prendra pas’,http://blog.mondediplo.net/2013-07-08-Ce-que-l-extreme-droite-ne-nous-p…

Mezzadra Sandro and Brett Neilson 2013, Border as Method, or, the Multiplication of Labor, Durham: Duke University Press.

Poulantzas, Nicos 1975, Classes in Contemporary Capitalism, translated by David Fernbach, London: Verso.

Rancière, Jacques 1997, ‘La cause de l'autre’, Lignes 30 : 36-49.

Rapone, Leonardo 2011, Cinque anni che paiono secoli. Antonio Gramsci dal socialimo al comunismo (1914-1919), Rome : Carroci editore.

Santoro, Vito 2009, ‘Quistione nazionale’, in Dizzionario Gramsciano 1926-1937, edited by Guido Liguori and Pascale Voza, Rome: Carocci editore.

Sapir, Jacques 2016, Souveraineté, démocratie, laïcité, Paris: Michalon (Kindle version)

Saskia, Sassen 2006, Territory, authority, rights: from medieval to global assemblages, Princeton: Princeton University Press.

Sekyi-Otu, Ato 1996, Fanon’s Dialectic of Experience, Cambridge MA: Harvard University Press.

Sudais, Michel 2015, ‘Juncker dit “non” à la Grèce et menace la France’, http://www.politis.fr/articles/2015/01/juncker-dit-non-a-la-grece-et-me… (last accessed 28 October 2016).

Thomas, Peter D. 2009, The Gramscian Moment. Philosophy, Hegemony and Marxism, Leiden: Brill / Historical Materialism Book Series.

Todd, Emanuel 2015, Who is Charlie? Xenophobia and the New Middle Class, translated by Andrew Brown, London: Polity.

Watkins, Suzan 2016, ‘Casting Off?’, New Left Review 2/100: 5-31.

[1] Panagiotis Sotiris (b. 1970) has a PhD from Panteion University and has taught philosophy and social and political theory at various Greek universities, as an adjunct lecturer. He has published widely on Marxist theory and on social and political developments in Greece. His bookA Philosophy for Communism. Rethinking Althusser is forthcoming in the Brill/Historical Materialism Book series. He currently works as a journalist and independent researcher in Athens.panagiotis.sotiris@gmail.com. The presentation of this paper also included Frédéric Lordon as discussant. This version of the text benefited from Lordon’s observations, but also by comments and suggestions made by Stella Magliani-Belkacem, Félix Boggio Éwanjé-Épée, Stefan Kipfer, and Maïa Pal for which I am grateful.

[2] For a detailed analysis of the different dynamics inside the Leave vote in the British Referendum see Watkins 2016.

[3] This was exemplified in Jean Claude-Juncker’s statement that ‘there can be no choice against European treaties’ (Sudais 2015).

[4] Kant 1795.

[5] See for example Benhabib 2004.

[6] Arendt 1958, p. 298.

[7] Habermas 1996, p. 505.

[8] Habermas 1996, pp. 506-507.

[9] Habermas 2001, p. 109

[10] Habermas 1996, p. 500.

[11] Habermas 2001, pp. 110-111.

[12] Habermas 2001, p. 111.

[13] Benhabib 2004, p. 47

[14] Benhabib 2004, p. 220-221.

[15] On the evolution of the EU see Anderson 2009; Lapavitsaset al. 2012; Durand (ed.) 2013.

[16] On Islamophobia as an alarming global trend see Kumar 2012; Kundnani 2014; Todd 2015.

[17] Mezzandra and Nilson 2013, p. 303.

[18] Mezzandra and Nilson 2013, p. 305.

[19] Sassen 2006, p. 318.

[20] Balibar 2014, p. 46.

[21] Balibar 2014, p. 50.

[22] Balibar 2014, p. 42.

[23] Balibar 2014, p.p. 52-53.

[24] Balibar 2014, p. 55.

[25] Balibar 2017, p. 275.

[26] Balibar 2017, p. 276.

[27] Ibid.

[28] Balibar 2003.

[29] Balibar 2015, p. 131

[30] Balibar 2003, p. 121

[31] For a definition and critique of current neo-republicanism in the French context, see Todd 2015.

[32] Debray 1978, p. 37.

[33] Chabel 2015, p. 41

[34] Debray 2010.

[35] Sapir 2016, Kindle locations 308-314.

[36] Sapir 2016, Kindle location 1058-1067

[37] Sapir 2016, Kindle locations 1542-1544

[38] Sapir 2016, Kindle locations 873-879.

[39] Sapir 2016, Kindle locations 2829-2838.

[40] Levy 2010; Boggio Éwanjé-Épée and Magliani-Belkacem 2012.

[41] Lévy 2010.

[42] Khiari 2009.

[43] Houria Bouteldja and Sadri Khiari 2012.

[44] Arendt 2007.

[45] On the broader notion of the ‘national-popular’ in Gramsci, from literature to politics see Durante 2009.

[46] Q13 §1;SPN, pp. 130-131.

[47] Q13§1;SPN, p. 132.

[48] Q3, §82;CW, pp. 255-7

[49] Ibid

[50] Q23, §57;CW 255.

[51] Q2, §2;CW, pp. 260-1

[52] Q14, §17;SPN, p. 240.

[53] Q14, §17;SPN, p. 241.

[54] On Gramsci’s interest on this attempt towards the construction of a ‘proletarian nationalism’, which coincided with Italian imperial ambitions at the beginning of the 20^th century (leading to the invasion and occupation of Libya in 1911) see the references in the text on the ‘Southern Question’ (Gramsci 1978, p. 450) and in the Prison Notebooks: Q2, §51 and 52 (PN1, p. 295-300).

[55] Q19 §5 ;CW, pp. 246-247.

[56] Gramsci 2008, p. 19. On Gramsci’s thinking on the ‘national question’ see Santoro 2009.

[57] Q13§1;SPN, p. 132.

[58] Frosini 2009; Thomas 2009, p. 420; Rapone 2011, p. 113.

[59] Rapone 2011, p. 109.

[60] And of course there are many references in his writings for his clear support of decolonial struggles. See the following extract from a 1919Ordine Nuovo article: ‘For several years we Europeans have lived at the expense of the death of the coloured peoples: unconscious vampires that we are, we have fed off their innocent blood. [...]But today flames of revolt are being fanned throughout the colonial world. This is the class struggle of the coloured peoples against their white exploiters and murderers. It is the vast irresistible drive towards autonomy and independence of a whole world, with all its

spiritual riches’ (Gramsci 1977, p.p. 59-60). See also the following passage, again from a 1920 Ordine Nuovo article: ‘In this way the colonial populations become the foundation on which the whole edifice of capitalist exploitation is erected. These populations are required to donate the whole of their lives to the development of industrial civilization. For this they can expect no benefit in return; indeed, they see their own countries systematically despoiled of their natural resources, i.e. of the necessary conditions for their own autonomous development.’ (Gramsci  1977 p. 302).

[61] Gramsci 1977, p. 148.

[62] In Gramsci 1978.

[63] Kipfer and Hart 2013, p. 335.

[64] Kipfer and Hart 2013, p. 332

[65] Kipfer and Hart 2013, p. 333. In a similar tone Ato Sekyi-Otu has suggested that ‘I am tempted to call Gramsci a precocious Fanonist. A Fanonist reading of Gramsci would indeed locate the historical conditions of possibility of the "popular-national" as project of the modern prince in his portrait of the arrested development of the Italian bourgeoisie, the poverty of what he calls (again prefiguring Fanon) its "national consciousness," its twin cultural vices of cosmopolitanism and narcissism, its historical inability to summon the oppressed of the countryside onto the stage of national regeneration. [...]Without a doubt, the conceptual supports of Fanon's vision of the national, the social and the revolutionary as cognate terms of a new political practice, have an elective affinity with Gramsci's philosophy of praxis and its political implications.’ (Sekyi-Otu 1996, pp. 118-119).

[66]Lordon 2013.

[67] Rancière 1997, p. 43

[68] Deleuze 1989, p. 223.

[69] Q11, §67;SPN, p. 418.

[70] ‘The articulation of the structural determination of classes and of class positions within a social formation, the locus of existence of conjunctures, requires particular concepts. I shall call theseconcepts of strategy, embracing in particular such phenomena as class polarization and class alliance. Among these, on the side of the dominant classes, is the concept of the 'power bloc', designating a specific alliance of dominant classes and fractions; also, on the side of the dominated classes, the concept of the 'people', designating a specific alliance of these classes and fractions.’ Poulantzas 1975, p. 24.

[71] ‘We are the some of our acts of cowardice and of our resistances. We will be what we will be worthy to be. That’s all. This is true for all of us, whites or blacks. It is there that the question of the big WE will be posed. The We of our encounter, the We of the surpassing of race and its abolition, the We of a new political identity that we must invent together, the We of the decolonial majority. [...] This will be the We of a revolutionary love’. Bouteldja 2016, pp. 139-140.

[72] Bouteldja and Khiari (eds.) 2012, p. 394.

[73] Bouteldja and Khiari (eds.) 2012, 396-397.

[74] Especially since, as Himani Bannerji (2000) has suggested, a certain version of multiculturalism can be fully compatible with neoliberalism.

[75] ‘Our politics must sidestep the paradigm of "unity" based on "fragmentation or integration" and instead engage in struggles based on the genuine contradictions of our society.’ (Bannerji 2000, p. 120).

HM London 2016 conference: Pete Green on Michael Roberts's The Long Depression.

Pete Green is an independent researcher, retired Further Education lecturer and UCU activist in the UK.

The panel discussion of The Long Depression, therecent book by Michael Roberts, was one of the highlights of this year’s 2016 Historical Materialism conference in London. Michael himself opened the session with a summary of the core arguments of the book, focusing on what he describes as the third great depression in the history of capitalism, triggered but not fundamentally caused by, the financial crisis of 2007-8. Jim Kincaid responded with some of the questions he hasalready raised on this blog about Michael’s use of data. Al Campbell, the final speaker on the panel, provided some alternative charts, based on his work with Erdogan Bakir, suggesting that the rate of profit in the US economy had been on a rising curve in the period before the financial crisis exploded in 2007. For Al this was a crisis of the neo-liberal  regime which emerged in response to the crisis of profitability of the 1970s and early 1980s, but it could not be a function of a recent fall in the US rate of profit as that is not supported by the evidence.

In this ‘guest blog’ I am not going to engage with the data, not least because I share Jim Kincaid’s skepticism about the reliance on US national income accounts as a source for corporate profitability – whilst acknowledging that there is no adequate alternative available for those engaged in empirical investigation.  Instead I want to step back a little from the immediacies of that argument and consider the theoretical framework of Roberts’ book. Critically, I want to question the assumption that reliance on Marx’s analysis of the tendency of the rate of profit to fall, and the counter-tendencies to that process over the long-term, is sufficient for an explanation of the cyclical fluctuations which have characterised capitalism since the early 19th century.  Please note that I am not denying the logical coherence or the relevance of Marx’s Volume 3 analysis of tendency and counter-tendency to analyzing the whole period since the 1960s.  I am challenging what I consider to be over-reductionist and two-dimensional applications of Marxist theory to the latest phase of global crises.

In my own paper for the HM conference which Michael Roberts mentions in passing in his recent blog “Transformation and Realisation – No Problem”, I began by recommending Richard B. Day’s bookThe Crisis and the Crash (published by Verso back in 1981) which surveys the debates in the USSR in the 1920s and 30s over Marxist analysis of Western capitalism in that epoch. Two debates are highlighted. The first focused on Kondratiev’s theory of long-waves and featured Trotsky’s critical response of 1923. The second on Day’s account derived from the respective legacies of Hilferding and Rosa Luxemburg and came to a head in the late 1920s as a cyclical upturn in Western capitalism reached its limit with the Wall Street crash.  On the one side were those, such as Maksakovsky (who died at an early age in 1928) and Preobrazhensky, for whom imbalances  between departments of reproduction (of which more below) were critical to explaining cyclical fluctuations and who are now categorized as ‘disproportionality’ theorists. On the other side, which eventually prevailed as Stalinist orthodoxy, were those led by Varga, who emphasized the limited consumption of the masses and can be labelled as ‘underconsumptionist’.

One significant difference was that the former school consistently located crises as only one phase in a cyclical process which could change in character and amplitude (as Preobazhensky emphasized in his 1931 book The Decline of Capitalism, translated into English by Richard B. Day himself) but would not disappear as long as capitalism survived. The Varga school by comparison, especially in the 1930s, was stagnationist, denying the very  possibility of any sustained recovery of capitalism.    Marx’s tendency for the rate of profit to fall,as a function of a rising organic composition of capital, plays no role at all in these debates. The rate of profit features as a variable, especially for Maksakovsky, but the determinants of fluctuations in profitability over the cycle are rather different. The disproportionality theorists focused on Volume 2 of Marx’sCapital and in the Russian debates this emphasis derived from Lenin’s debates with the Narodniks (who denied the possibility of capitalist development in Russia) in the 1890s. They certainly did not rely, as Michael Roberts mistakenly suggests in hisblog comment, on another Russian theorist, who also criticized the Narodniks for underconsumptionism, the  notorious ‘harmonist’ Tugan-Baranovsky.

What’s curious about contemporary Marxist debates, stretching back to the first serious crisis of the postwar period in the mid 1970s, is that we have a comparable polarization but now its the ‘disproportionality’ theories that have disappeared from view. Although this is to oversimplify a many-sided debate, the dominant currents evident in Marxist writing on the crisis of 2007-8 are both two-dimensional. On the one hand, there are those such as Michael Roberts, and Robert Brenner, who despite certain differences, emphasise a long-term decline in the rate of profit since the late 1960s combined with a financial system characterized by excessive debt levels. On the other there are those such as the Monthly Reviewcurrent of Foster and Magdoff, and for the 2007-8 crisis at least, Dumenil and Levy, who emphasise growing inequality, with underconsumption accompanied by excessive levels of debt. Michael Roberts is quite correct to note the similarities of the latter position with that of certain left Keynesians such as Joseph Stiglitz. He is incorrect in his frequent suggestion that his own approach is the only other viable Marxist theoretical framework available.

What we  need, as an alternative to both, is a more complex multi-dimensional theory of crisis as I suggested in my paper at the HM conference and which I will seek to develop at more length in an article to be submitted to the HM journal. Here, I  will focus on what I think is missing from  Michael’s theoretical framework, at least in his latest book  and recent blogs.  One way of doing that is to consider the flow-chart which appears on page 15 of the book,  borrowed  from a San Francisco Marxist study group and described by Michael as ‘clever’:   [you may need to click on the chart to enlarge it]

I’ve omitted some of the options on the right hand side of the original chart (indicated by the …) in order to highlight the critical binaries from a Marxist perspective. Michael obviously wants readers to follow him down the left hand side of the chart with a YES, YES, YES, YES . But I’ve added in three question-marks to register my objection to the choices as presented in the chart. The first (?) arises in response to the second question and its reference to a kernel of crisis. What this fails to register is that capitalism as a system is a contradictory unity of both production and circulation. Production of value and surplus-value is primary but the process of circulation is still necessary to the ‘realisation’ of value, with the sale of commodities in the market. Volume 1 of Capital comes first with its detailed exploration of the capitalist production/labour process which, Michael correctly observes, is ignored  in the Keynesian/Kaleckian tradition. But the widely neglected, comparatively arid, Volume 2 ofCapital which focuses on the  circuit of capital through its different phases (M…C…P…C…M´) is essential to understanding Marx’s analysis of the cyclical fluctuations of the system. All the participants in the Soviet debates summarized by Richard B Day understood that. In recent debates, by contrast, David Harvey and Ernest Mandel  (not least in his introductions to the Penguin volumes ofCapital ) are exceptional in their attention to Volume 2.

For Michael Roberts, David Harvey can be dismissed  as just another underconsumptionist. My second smaller (?) on the chart puts in question that labelling of both Harvey and Rosa Luxemburg. Leaving Luxemburg to one side, I simply recommend Harvey’s A Companion to Marx’s Capital Volume 2 as a corrective to that oversimplistic reading and as a more innovative text than the title might suggest. I disagree with Harvey’s critique  of Marx’s ordering of the texts ofCapital and his interpretation of Marx’s dialectical method. Harvey is certainly wrong, for example, to suggest that Marx assumed ‘perfect competition’ ( a theoretical construction of neoclassical economics which postdates Marx) in Volume 1, and would benefit from reading up on the theory of ‘real competition’ in Anwar Shaikh’s recent magnum opusCapitalism. But that raises another set of issues I cannot address here. What matters in this context is Harvey’s vital emphasis on capital as always in motion, across time and space. But this process through the phases of the circuit can be blocked at any point and even a slowdown in the process of circulation can precipitate a crisis. This in turn enables Harvey to locate the centrality of the credit system and banking to overcoming these blockages – and justifies his inclusion of a lengthy section on credit and the banking system in Volume 3 ofCapital in a commentary on Volume 2.

My third (?) on the chart refers to “Marx’ law of profitability” as a response to the question “Are crises integral to the accumulation process?”. For any Marxist the question obviously demands an affirmative response. But there are at least three further questions that need to be posed. Firstly, the accumulation process as I’ve just suggested embraces the whole circuit of capital. It requires the concentration of money capital and the availability for purchase of the necessary means of production and labour-power. Nor, rather obviously, does investment in production guarantee success in the market-place. Secondly the so-called law is actually a law of a ‘tendency’ subject to counter-tendencies, and I would argue that these unfold over a longer time-period, and thus have a different temporality, to the regular business cycle which lasts from 7 to 10 years and is sometimes known as the Juglar cycle. Thirdly, the actual rate of profit received by individual capitals is subject to a variety of determinants, including the level of effective demand, and these can fluctuate over the cycle as a result of factors which are not directly a result of changes on the organic composition of capital but will influence expectations of future profitability.

Michael Roberts will respond as he does in his recent blog that “the so-called realization problem is the result of the production problem. Falling profitability and falling mass of profits lead to collapsing investment, wages and employment and then swathes of companies cannot sell their goods or services at existing prices and workers cannot buy them. This is a crisis of overproduction and underconsumption”. Indeed he seems to have his own version of Say’ law (supply creates its own demand), which Marx dismissed as nonsense, when he claims that “…investment creates its own demand”. It is certainly true that Marx at one point in Volume 2 (p486 of the Penguin edition) states, in a sentence that Michael frequently invokes,

“It is a pure tautology to say that crises are provoked by a lack of effective demand or effective consumption”.

But for Marx this sentence is prefatory to a critique of the ‘underconsumptionists’ of his time who argued that raising wages would somehow “avert the crisis”. Marx’s objective at this point is to show how  a balance of demand between Departments 1 and 2 is possible and the system can therefore reproduce itself. But as he goes on to indicate the conditions for equilibrium between the two departments are such that systemic disproportionalities will inevitably arise which may only be rectified by “ a major crash” (p596).

Michael is of course right to say that changes in aggregate levels of investment and employment are critical factors  determining changes in levels of aggregate demand. Keynes himself would have agreed. However, there appears to be one error here and a significant omission. The error lies in the conflation of overproduction and underconsumption as ‘two sides of the same coin’, when underconsumption is equated with a lack of consumer spending by workers. For Marx overproduction normally arises, in the first instance, in what he calls Department 1, producing means of production, including both machinery and raw materials.  The problem is a relative lack of ‘productive consumption’ as Marx sometimes describes it. The fall in demand, or more commonly a slowdown in expansion of demand relative to an expansion of  capacity in Department 1,  stems from other capitals in both Departments whose capacity has also grown too fast relative to demand. The omission relates to the relationship between the lifetime of fixed capital and the temporality of the cycle, which is curious because Michael Roberts does mention this at one point in his book on page 220 in the chapter on cycles. Yet it fails to play any role in the earlier analysis.

This is where a careful reading of Pavel Maksakovsky’s The Capitalist Cycle (originally published posthumously in 1928, translated into English by Richard Day and  published in the HM book series by Brill in 2004) would be helpful. This book reveals someone with a sophisticated grasp of Marx’s method and there are some fascinating passages in the opening chapter on the process of abstraction in Marx’s work. But the core of the book concerns, as the title suggests, the regular business or Juglar cycle and Maksakovsky offers only a cursory dismissal of Kondratiev’s long waves, which is regrettable. That said, the author proceeds from Marx’s emphasis on fixed capital formation as critical to explaining the cycle.

Maksakovsky moves beyond Marx, however, by dropping the assumption which Marx retains in his analysis of the relationship between Departments 1 and 2, namely that market prices always correspond to values (or indeed to the prices of production introduced in Volume 3). As Maksakovsky shows, starting from the ‘depression phase’ of the cycle, demand for investment goods will revive with the need for replacement of existing fixed capital which is worn out or has become obsolescent with technical change. If the available capacity in Department 1 has been reduced during the previous crisis with the shutdown of mines, oil wells or steel plants etc., the revival in demand will tend to raise prices above values in those sectors. Whilst the supply of such products takes time to come on stream, employment increases immediately generating an expansion of demand for consumer products. Profits will tend to rise with rising prices encouraging even more expansion in both Departments.

But towards the peak of the expansion phase the new investment begins to result in extra supply being thrown into the circulation process. Now just a slowdown in demand for additional machinery from Department 2 will generate excess capacity in Department 1 (here Maksakovsky anticipates the accelerator  of Keynesian business-cycle theory without the rigid formalism). Prices and profits will fall and the process goes into reverse. The law of value begins to prevail (i.e. relative prices fall to the new lower values set by socially-necessary labour-time) but only after a “prolonged interval of time”. The cyclical fluctuations Maksakovsky suggests will occur independently of what happens in the world of finance and are driven by changes in investment, as the evidence stressed by Michael Roberts confirms and which is not in dispute. But only when the overaccumulation of capital is fuelled by an overextension of the credit mechanism and fictitious capital does the turning-point from boom to depression take the form of a crisis or a financial crash.

The previous two paragraphs provide only a brief sketch of a sophisticated but  highly abstract analysis of the cyclical pattern which has characterized capitalism since the early 19th century when fixed capital became a significant component of the production process. Preobrazhensky in his Decline of Capitalism of 1931 develops this type of analysis more concretely in the context of the post-crash depression.  He stresses the impact of monopolization and international cartels and the creation of excess reserves of fixed capital in the 1920s, making the recovery from the crisis after 1929 much slower than in the classic cycle of earlier periods. Comparable work is needed on the changing cyclical patterns of recent decades. But it is not difficult to extend the analysis to, for example, the patterns of overinvestment in the telecommunications/IT sector in the late 1990s, or in the oil and mining sectors globally in the second half of the 2000s. That last example should also remind us of the need to consider the uneven and combined development of the system globally and the  global imbalances emphasized by astute mainstream commentators such as Martin Wolf. A fully-developed multi-dimensional theory of crisis also needs to take into account the uneven capacities of nation-states for intervention and the impact of class struggle, including the sustained drive of international capital to raise rates of exploitation through outsourcing and global restructuring.

But what of the longer-term tendency of the rate of profit to fall as a function of the rise in the organic composition of capital (the ratio of dead to living labour in the system)? Unlike some critics  I am not rejecting the relevance of this or the equally significant role of counter-tendencies raising profitability over the long-term. Indeed I would endorse to a degree Michael’s emphasis on longer waves in profitability (pp225-6 of his book) but link them more closely to Kondratiev waves (which is how I interpret Shaikh’s sketchy remarks on this question at the end of his book). But these longer waves, which underlie the 7 to 10 year Juglar business cycle, lack the regularity imputed to them by Michael. What can be shown in my view is that when the underlying rate of profit is falling the business cycle fluctuations are more severe as is evident from the late 1960s to the early 1980s, and when the underlying rate is rising, the amplitude or the severity of recessions is reduced as in the 1990s and early 2000s. What’s new in the 2000s however is the unprecedented rise in the share of financial profits in total corporate profits as Lapavitsas and Mendieta-Munoz explore in a recent article in Monthly Review (July-August 2016). But that is yet another story.

One final point.  Michael is fond of suggesting that to say crises are a result of a lack of effective demand is like saying the weather is wet because it’s raining. What I’m suggesting here is that to claim crises like those of 2007-8 are a result of a long-term tendency of the rate of profit to fall is like saying storms and hurricanes are simply a result of global warming – there are a lot of mediations or causal links missing from the analysis, even if the data on the underlying trend confirm the thesis, which on the plane of global capitalism is much more questionable than for climate change.

This archive piece from 2002 attempts to frame a Marxist agenda in the study of sexuality at the start of the 21st Century. By Paul Reynolds.

Marxism might be regarded as having been conspicuously absent from the development of the study of sexuality and the politics of sexual identity and orientation since the 1970’s.[1] Central political influences and debates revolve around a diverse range of sociologists, historians and cultural theorists who take different positions in contemporary debates between queer theory and social constructionism as to the social and cultural construction of sexuality in society. Against other domains of theorising about society, where Marxism’s focus on the structural analysis of social (class) relations, the material conditions of relations of production, processes of commodification and capitalist exploitation of labour value and the politics of ideological and repressive power as the basis for class oppression and alienation, can claim to have shaped the contours for radical theorising, this absence is both remarkable and questionable.

Indeed, when discussion focuses on pathologies, discrimination, oppression and alienation on the basis of sexuality, sexual identity and sexual diversity, Marxist analyses have been discounted or received a hostile reception. Simon Edge (1995:3-4), for example, has observed:

….the Marxist tradition has no more influence on the modern lesbian and gay movement than it deserves. Gay Marxists who are encouraged by their straight comrades and leaders to shun the very real gains won since the GLF by an autonomous lesbian and gay movement are being seduced into an essentially heterosexist project where gay issues are sidelined.[2]

This brief meditation argues that Marxist categories and ideas have a critical part to play in analysing the social construction of sexuality and developing a progressive sexual politics — a politics of sexual diversity and citizenship rights that aspires to be more than the limited possibilities arising from liberal rights, minority identity politics or queer rhetoric. Whilst any argument for a Marxist politics of sexuality is stretching the argument, Marxist concepts and ideas have a crucial part to play in conceiving sexual rights, emancipation and justice. It will do this by recalling that Marxists have made key contributions to how sexuality is currently theorised, and sketching how Marxism can continue to make a significant and valuable contribution to the theorising of sexuality and sexual politics into the 21st Century.

Section I

Three factors account for the estrangement of Marxism and the subject — theoretical and political — of sexuality. First, the study of sexuality as a social subject has its roots in three intellectual traditions that have developed antagonistically to Marxist thought: gendered theory, post-structuralist philosophy and post-modern theory, and sociological theory.[3] Whilst undoubtedly there are thinkers who have addressed issues of sexuality who house themselves within the Marxist tradition — Bernstein, Kollontai, Reich and Fromm are examples — their work does not constitute a coherent or sustained engagement with sexual orientation and difference.[4] Sexuality is largely absent as a subject from Marxist discourse until the 1960’s, when it emerges alongside the development of cultural politics and social movements, and is more evident in the work of Marcuse and 1960’s Marxists.[5]

Second, Marxism has been challenged by feminists, for failing to adequately theorise identity as distinct and autonomous from class and the social relations of production. Radical feminists such Alison Jagger have argued that Marxism’s class determinant approach undertheorised the distinctiveness of male power and oppression [6]. Socialist feminist critiques mitigated this problem by their dual-systems approach to theorising capitalist patriarchy, but the problem of whether class or gender determines patterns of oppression remains[7]. This encouraged hostility or indifference to Marxism amongst those who extended work on gender into studies on sexuality.[8] The few avowedly Marxist attempts to address issues of sexuality have been crude and tied into the broad remit of Marxist analyses of gendered relations[9].

Finally, Marxist theory and politics have been challenged by post-structuralist, post-modern and post-Marxist critiques that argue that Marxist conceptual categories and analytical approaches to the critique of 'late' or post-modernity are dated, essentialist, overdeterministic, and no longer have legitimacy[10]. Such critiques have moved away from monocausal conceptions of social oppression, opening a distance from Marxist theory. The development of theoretical and political interest in the subject of sexuality belongs within this trend in social theory — post-structuralist philosophy and post-modern theory — and its context of scepticism about Marxist theory. The theoretical questions that are at the centre of such approaches to the study of sexuality  — essentialism versus constructionism, gender determination versus the specificity of oppression, alienation and discrimination of the basis of sexuality, identity versus queer strategies for liberation — have been occupied by protagonists who absent Marxism from these questions altogether.[11] Thus, Marxism offers relatively little that speaks to or connects with the dominant frameworks of studies in sexualities.

Writings on the politics of sexuality have both used elements of the language of Marxism as a metaphor in strategies for sexual rights and social justice, and been simultaneously openly hostile to Marxist theory and politics as 'part of the problem'. Much of this language is the language of Gramscian analyses — ideology, culture and hegemony — which is itself problematised by its appropriation by post-Marxists and those following the 'cultural turn' in social analyses.[12] Those who do adopt an approach informed by Marxist concepts and ideas, such as David Evans, tend to emphasise the constraints to sexual citizenship under capitalism, rather than the scope for sexual citizenship, equality and justice through class struggle[13]. Nicola Field, alternately, argues class solidarity as a basis for refusing and politicising struggles for equality and justice but from a position where common interests and central struggles are articulated firmly though a class analysis.[14] Both approaches are minority voices in the broader discussion of sexual politics and citizenship, and prompt an inevitable questioning as to what contribution Marxist theories and categories can make to the analysis of sexual identity, relations, behaviour, regulation and difference. Is there scope for a meaningful contribution by Marxism to studies of the social emancipation of sexual diversity?

Those who have defended arguments around determination, essentialism and causality in social change have argued that feminism provided the best explanatory framework for sexual oppression. Whereas Marxists have constructed their critique upon class and capitalism, feminists have recognised the importance of identity, a more discursive critique of private and public divides and categories and the importance of social and cultural basis for gendered and sexual oppression. The critique of patriarchy and masculinity has been extrapolated to deal with issues of diverse sexual identities, relations and behaviour. Whereas Marxists have dealt with these sorts of issues in a largely functional (to capitalism or the maintenance of class divisions) fashion, feminisms provided a more critical framework for exploring how pathologies developed according to the particular trajectory of patriarchy, heteronormativity and hegemonic masculinity[15]. Whereas Marxists have discussed sex in respect of the role of intimate relations in the reproduction of both labour and social relations, feminists addressed more directly issues of identity, relations, behaviour and central concepts of love and desire (or their 'illusion') and pleasure and desire in the organisation of gendered society. Feminisms, then, both seemed to allow a greater congruency and more affinity with the study of sexuality than Marxism, whilst at the same time showing in its development the capacity to stretch towards multi-variable models of causality and change, though queer theory emerged from a critique of feminism that claimed feminists could not move beyond their heteronormativity.[16]

Whether from the social constructionist, sociological or symbolic interactionist analyses of the construction of sexual identities and relations, studies of diverse sexualities centred on the social production of categories discursively rather than determinantly through essential causality and power of the social relations of production. Gagnon and Simon, Plummer, McIntosh, Weeks, Altman, Mort, and Foucault, best represent these analyses[17]. They explored the contingent production of oppressive discourses, institutions and orthodoxies through the particular historic development of moral, medical, legal, political and cultural discourses, which were elaborated and explored in their contradictory, contingent and heterodox forms rather than reduced to a particular and singular production, pattern and development of oppression. Queer theory, and notably the work of Butler, Seidman, Phelan and Sedgwick move even further from a Marxist frame of reference[18].

Section II

Now, is there a contribution that Marxists can make to the contemporary debates around sexualities? The starting point of a response involves three general observations.

First, there is a tendency for critiques of Marxism to adopt a rather singular and sometimes misrepresentative version of Marxism. According to Norman Geras the work of Ernesto Laclau and Chantal Mouffe, some contemporary critiques of Marxism, presents: “[…] an impoverishing caricature of the Marxist tradition […]. The account they render of some key Marxist thinkers is a travesty of the tradition, reducing and devaluing it and distorting many of its ideas.”[19]

Second, where there are more authentic engagements with Marxism, the emphasis is on the 'mainstream' political economy approach associated with Marx's mature writings. Marxism is, however, a broad church, and has within it strands of thinking — represented best in the work of critical theorists such as Horkheimer and Adorno, and later Habermas, and theorists of culture, notably Gramsci — that allow for a more sophisticated theorising of questions of identity and social relations. This is not, however, to suggest that Marxists use only the insights of critical theory and Gramscian cultural analyses to interrogate the issue of sexuality, as political economy has significant insights to offer, evidenced in the work already cited from Evans and Field.

Finally, whilst there is undoubtedly an epistemic and methodological gap between Marxism and contemporary post-structuralist influenced positions, it is not to say that constructive dialogues cannot be forged between them. Foucault was a leading influence to the development of a social constructionist approach to studying sexuality and is often represented as an avowed critic of Marxism. Yet there is evidence that this opposition obscures some points of intersection. In later writings, Foucault distinguishes his criticism of Marxism as quite specifically aimed at the narrowly conceived political economy critique offered as a classical analysis and associated with the French Communist Party, and expresses regret at not engaging with the insights of critical theory, even with some disagreement. [20] More recently, the dialogue between Judith Butler, the doyenne of queer theory, and Nancy Fraser in which Butler responds to critiques of queer theory by engaging with a quite functionalist analysis of gender aligned to Engels, points to a continuing juxtaposition of analysing identity with Marxist ideas.[21]

Critical theorists had already recognised sexuality as a field of conflict and subjugation, most notably in the work of Herbert Marcuse, who theorised sexual subordination and control as a feature of the necessary imperatives of capitalist society. [22] The radicalism of the 1960's encouraged the convergence of sexual politics as an agenda driven largely by the left — whether gay and lesbian —or as a more general issue of sexual emancipation[23]. Typical of this is the Red Collective critique of sexual politics, the family and Freudian psychoanalysis, where an overarching problem in creating a sexual politics

is that perceptions and feelings we have feel natural, human, even eternal, as all capitalist relations do […]. The oppressing structures of monogamy and the various forms of permissiveness within which these personal feelings are felt, make it impossible to become conscious of their specificity (their particularity to this social structure) [...].[24]

This is a classical call for a critical rejection of the prevailing ideological (Freud) and institutional (family) construction of sexuality under capitalism. It extends a classical Marxist analysis to sites of ideological domination, its construction of a false consciousness based upon these sites and their immediate alternates (family against permissiveness), and the obscuring of social relations from relations of production. Although gay groups and other radical political movements influenced by Marxism were somewhat aligned to Marxist analyses, Gay Left Collective reflected the way in which the passing of the 'moment' of late 1960's radicalism led to an attempt by Gay activists and theorists to redefine a 'Gay Left'[25].

The best Marxist critiques of the 1990's have explored the political economy of rights discourse and the production of cultural and geographical space for diverse sexualities. David Evans, whose work has already been discussed, provides an extensive critique of the driving force of commodification in the development of lesbian and gay culture and the weakness of rights discourse, absence of economic rights and limits to legal, political and social rights within the construction of sexual citizenship. Evans is particularly interesting where his essays establish a materialist critique based upon political economy with a critique of legal, political and social discourses of prejudice produced by institutions and around particular actions within no singularly determinant logic of class suppression or capitalist interests.[26] Evans' analysis reasserts the link between political economy and sexuality within a framework that allows for the relative autonomy of state institutions and social actors in the production of particular discourses of pathology and prejudice against diverse sexualities. Evans identifies Foucault, Weeks and Altman amongst others as important in the development of this materialist critique, but Marxist readers might see Poulantzas and even Althusser as equally influential.

John Binnie and the essays in Amy Gluckman and Betsy Reed’s “Homoeconomics” extend this analysis of how consumption and commodification defines and characterises the public and cultural space occupied by people of diverse sexualities.[27] The impact of such analyses is to refocus analysis not upon the development of such space and 'rights', but the nature and character, and for example, exclusivity (such as the 'scene' for older lesbians and gays) of this space.

Nicola Field – again already discussed above — provides a more trenchant extension of this approach from a far more overtly Marxist position, rejecting the lifestyle markets and identity politics, making a critical analysis of how the scope and limits to the space afforded people of diverse sexualities is determined by the market and the state. She concludes, and it is worth restating this Marxist position at length:

The factor which holds all reformist strategies back is the way that they define and ringfence supposedly “lesbian and gay issues” as though lesbian and gay oppression simply effects those who have same-sex relationships. The reality is that gay oppression is a weapon of social control. We cannot hope to bring about real change for gay people whilst the system which causes gay oppression remains in place. [...]

All “lesbian and gay issues” are rooted in the politics of class struggle. When ambitious, bourgeois “community leaders” seek to divorce these issues from wider social and political concerns the lesbian and gay movement becomes atrophied. Being able to rework and reassess the reformist gay rights programme in the context of defending working class interests is a vital step in breaking away from the frustrations and divisions of identity politics. It enables us to see how the issues which are so close to gay people are of equal importance to the rest of society. Far from losing our identity in this process, we can begin to recognise actual and potential allies all around us.

Do we just want the same poverty traps and institutions? Seeking assimilation into what is perceived as “straight privilege” has led many gay activists to confuse equal rights withequal oppression.[28]

Section III

Marxist theory and politics does have a contribution to make to the theory and politics of sexuality. The contribution lies with the critical value of Marxist categories to the analysis of sexual orientation and social values, rights and justice in contemporary societies. The summary above stresses both the categorical and epistemic difficulties of such an issue and some of the possibilities of such an analysis. The menu of four areas that follows builds upon those possibilities, in embryonic form.

First, the Marxist influenced critical focus on culture, commodification and consumption is undoubtedly a trenchant and fertile field for critiquing the contemporary discourses of sexual rights, justice and space in contemporary societies. It critically engages with and exposes the weaknesses of contemporary discourses of sexual citizenship: identity politics and the problem of particularist political struggles, cultural and social safe space as zones of consumption, and the poverty of rights discourse as a driving force behind struggles for equality and social justice. What Marxism does is to explore and critically challenge the nature of progress towards sexual rights, equality and justice through intrinsically unequal, unjust and ruling institutions and orthodoxies, and thus provides a basis for a structural analysis of the shortcomings of the reformist agenda. Rather than exploring the development of cultural and social safe space it has the tools to identify its character and causality, and in the case of the rise of 'Gay-friendly' zones of consumption, show the strengths of not disregarding political economy. Hence, the focus of Marxism might not necessarily directly address issues of identity and sexual relations and behaviour but it does have considerable explanatory power in addressing the context within which they pervade public space, the forms in which this space and the institutions and orthodoxies that prevail take, and the causality and rationality behind their activity. Other examples of the power of this analysis might be the commodified centre of diverse sexualities such as sado-masochism, and the way in which cultural codes of identification and participation in the 'scene' are themselves structured through commodification.

Second, Marxists could more broadly provide a critical framework for understanding sexuality within a materialist conception of history. The centring of sexuality around discourse and narratives in contemporary theory, and queer theory and attendant post-modern 'imaginaries' such as 'genderfuck' tends to omit or downgrade the physicality, as well as the discursiveness of sexuality. [29] There might be a useful agenda for analysis in using categories of property, ownership and labour. Also, it might be fruitful to conceive the body within a materialist conception of the world that avoided Feuerbachian mechanical materialism but equally does not represent sexuality as a 'politics of mind' that is purely constructed on language and cultural representation.[30]

This leads to a third point, that the range and depth of Marxist theory has yet to be utilised in interrogating and opening fertile ground for studies of sexuality. Critical theory and more aesthetically informed Marxism, such as that of Jürgen Habermas for example, engaging universal pragmatics and systematically distorted communication, offers more than is presently taken in explaining the nature, origins and development of discourses of prejudice and pathology and the resistance to them.[31] Hence, there are rich veins of Marxist scholarship insufficiently mined to make develop critical perspectives on sexuality.

Finally, Marxists still have something to say about emancipation and the politics of struggle. Hegemony, however abused a concept, remains a fruitful conceptual framework for understanding both strategies for domination and strategies for resistance. Marxists do have an analysis of the agenda of sexual politics. Marxist analyses would explore tensions between gays, lesbians and other sexualities that are typified in the struggles over the designation and 'ownership' of Pride, and the separateness of cultural zones of space for diverse sexualities that encourages separation of identities. The absence of effective strategies for collective solidarity, and the prejudice and discrimination within diverse sexualities, are weaknesses in sexual political agendas. Marxists could provide the basis for critiques of the way in which many sexual rights groups have come to work with intrinsically unequal and discriminatory political reformist agendas and accept a piecemeal gradualism underpinned by toleration and not rights. Marxist critiques of post-modernism and post-structuralism, could usefully be extrapolated onto queer theory to expose its limited class-laden scope for a politics of transgression. Theorising the struggle for rights, liberties and social justice for people of diverse sexualities is strengthened by the use of a materialist conception of the history of sexual politics, a politics of collective solidarity, and an understanding of the hegemonic power of sexual intolerance.

This diagnostic power, however, is not accompanied by convincing prognostic analyses. Wedding the fortunes of sexual politics to class struggles has an uncomfortable balance of priorities. The privileging of class concepts over identity concepts requires a greater level of theorising to explain how the discursive relationship between the two becomes more than class determined. Post-Marxists attempt to offer a way around the problem of determination through their rejection of it and their replacement of social categories with political categories, such as radical democracy superseding class or identity as the basis of emancipation. This, however, involves exchanging the epistemic determinism of material existence in class struggle with the epistemic problems of radical democracy, which provides a formal model for political democracy that treats all identities and groups equally, without necessarily explaining how prejudice, pathology and characterisations of difference and deviance are resolved.  The radical democrat 'language game' presumes a willingness to resolve conflict and reconcile difference rather than a commitment to conflict and conquer. For example, Escoffier argues the need for the lesbian and gay movement to ally with progressive religious forces and other radical communities to construct a persuasive counter-hegemonic project against the radical right, without exploring the essential heterosexism and reserved but nevertheless ingrained prejudice of even the moderate church. [32] The importance of maintaining a liberal permissiveness in politics seems to require the building of a consensus that would tolerate gays and lesbians, rather than challenge ingrained prejudice and engage in transforming or breaking down the church. The balance of compromise becomes ignoring the problem of prejudice as long as it does not interfere with formal democratic rights and processes, a rather liberal approach that leaves diverse sexualities at the margin and subject to social and cultural pathologies outside the formal democratic arena.

Marxism offers the prospect of a significant contribution to a radical politics of sexual diversity that critiques both the oppressive nature of heterosexist and homophobic society and the problems of effecting sexual freedom, equality, rights, diversity and justice. For it to do so, however, Marxist analyses may have to become 'sexualised' — sensitised to what theorists and analysts of sexuality have conceived about sexual identity, relations and behaviour that is at odds with Marxist accounts of social life. At present, it would be folly to talk of a persuasive Marxist analysis of sexuality in contemporary society, but it is also folly to rehearse the oft-quoted and poorly constructed dismissal of Marxism within the writings of those involved in the study of sexuality. That is not to say, however, that some significant insight is not possible, desirable and potentially mutually constructive for both students of sexuality and students of Marxism.

[1] Paul Reynolds is Reader in Sociology and Social Philosophy at Edge Hill University, and is a long standing member of theHistorical Materialism Editorial Board. He is also co-convenor of the International Network for Sexual Ethics and Politics (INSEP) and co-editor in chief of its journal. This archive piece dates back to 2002, and two very similar versions appeared as follows (This is the 2004 version): Reynolds P (2004) 'Marxism and the Social Construction of Sexuality. Some Considerations and a Research Agenda' in Hekma, G (ed.)Past and Present of Radical Sexual Politics. Amsterdam: University of Amsterdam, pp185 - 193; Reynolds P (2002) ‘Some Thoughts on Marxism and the Social Construction of Sexuality’ in Pasteur, P., Neideracher. S.and Mesner, M. (eds.)Sexualitat, Unterschichtenmilieus und ArbeiterInnenbewegung, Wien: Akademische Verlagsanstalt p 27-38 Both publications were relatively low circulation, and the queer Marxist agenda may well have developed, but this paper might best be described as sketching the barest bones of a larger project on Marxism and sexuality. Previous versions of this paper were given to the Political Studies Association Marxism Specialist Group Conference at the University of Sussex, UK in 1999 and the Sexuality, the Working Classes and Labour Conference at the University of Linz, Austria, in 2002, and various other seminars — thanks to participants at both conferences for their comments.

[2] Edge S (1995)With Friends Like These: Marxism and Gay Politics London: Cassell

[3] This does not discount the importance of, for example, sexological and psychological theories, but draws the terrain of this paper as the study of sexuality as a social subject. For indicative examples of these approaches see, representatively, Sheila Jeffreys, Anti-Climax, London 1990, Michel Foucault, The History of Sexuality (3 Volumes), Harmondsworth 1981, 1984a, 1984b, Ken Plummer (ed.), The making of the Modern Homosexual, London 1981, John Gagnon / William Simon, Sexual Conduct, Chicago 1973, Joseph Bristow, Sexuality, London 1997.

[4] See, respectively, Eduard Bernstein, The Judgement of Abnormal Sexual Intercourse,http://www.marxists.org/reference/archive/bernstein/works/1895/wilde/homosexual.htm (23/11/02), Alexandra Kollontai / Cathy Porter (eds.), Love of Worker Bees/A Great Love, London 1999, Wilhelm Reich, The Function of the Orgasm, London 1968, Erich Fromm, The Art of Loving, London 1995.

[5] See Herbert Marcuse, Eros and Civilisation, London 1998, and Reimut Reiche, Sexuality and Class Struggle, London 1970.

[6] Alison Jagger, Feminist Politics and Human Nature, New Jersey 1983.

[7] Notably, Barbara Ehrenreich 'What is Socialist Feminism?' in: Win, June 1976, and Zillah Eisenstein (ed.), Capitalist Patriarchy and the Case for Socialist Feminism, New York 1979.

[8] See Tamsin Wilton, Lesbian Studies: Setting An Agenda, London 1995.

[9] For example, Eli Zaretsky, Capitalism, the Family and Personal Life, London 1976, and Sheila Rowbotham / Lynne Segal / Hilary Wainwright, Beyond the Fragments: Feminism and the Making of Socialism, London 1979.

[10] Classically, Jean-François Lyotard, Libidinal Economy, London 1993, and Jacques Derrida, Spectres of Marx, London 1994. Fredric Jameson, ‘Marx’s Purloined Letter’ in: New Left Review 1995 provides a thoughtful and critical review of how Derrida constructively engages with Marxism.

[11] For example, in Ken Plummer, Telling Sexual Stories, London 1995 or Judith Butler, Gender Trouble, London 1990.

[12] Classically in Ernesto Laclau / Chantal Mouffe, Hegemony and Socialist Strategy, London 1985.

[13] David Evans, Sexual Citizenship: The Material Construction of Sexualities, London 1994.

[14] Nicola Field, Over the Rainbow: Money Class and Homophobia, London 1995.

[15] This concept is classically explored in Robert Connell, Gender and Power, Cambridge 1987

[16] Butler, Gender Trouble, 3-44

[17] See John Gagnon and William Simon, Sexual Conduct; Ken Plummer (ed),  Making of the Modern Homosexual;  Ken Plummer (ed), Modern Homosexualities: Fragments of Lesbian and Gay Experience London 1992; Ken Plummer, Telling Sexual Stories; Mary McIntosh, 'The Homosexual Role' in Social Problems Vol 16 no 2 1968; Jeffrey Weeks Sexuality and Its Discontents London 1985; Jeffrey Weeks, Sex Politics and Society, London: 1989)  — 2nd ed; Jeffrey Weeks, Invented Moralities: Sexual Values in an Age of Uncertainty Cambridge 1995; Dennis Altman, Homosexual Oppression and Liberation New York 1993;  Frank Mort,Dangerous Sexualities London 1999 rev ed; Michel Foucault History of Sexuality (3 Volumes)

[18] Butler, Gender Trouble; Judith Butler, Bodies that Matter: On the Discursive Limits of Sex London 1993, Judith Butler, Excitable Speech: A Politics of the Performative, London 1997; Steve Seidman, Embattled Eros: Sexual Politics and Ethics in Contemporary America, London 1992, Steve Seidman, Difference Troubles: Queering Social Theory and Sexual Politics, Cambridge 1997; Shane Phelan (ed.), Playing with Fire: Queer Politics, Queer Theory, London 1997; Eve Sedgwick Epistemology of the Closet, Harmondsworth 1990.

[19] Norman Geras, Discourses of Extremity: Radical Ethics and Post-Marxist Extravagances, London 1990, 128.

[20] Michel Foucault with D. Trombadori, Remarks on Marx, New York 1991.

[21] Judith Butler, 'Merely Cultural', in: New Left Review 227/1998, Nancy Fraser, ‘Heterosexism, Misrecognition and Capitalism: A Response to Judith Butler’ in: New Left Review 228/1998.

[22] Herbert Marcuse, Eros and Civilisation.

[23] See for example, the essays by Birch, Thorneyscroft, Weeks and Sreeves, Cant, Otitoju and Shiers in Brian Cant / Steve Hemmings, Radical Records: Thirty Years of Lesbian and Gay History, London 1988.

[24] Red Collective, The Politics of Sexuality in Capitalism London 1978, 8.

[25] Gay left Collective (ed),  Homosexuality, Power and Politics, London (undated). See particularly the essays by Weeks, Altman, Watney Birch and Derbyshire.

[26] For example in David Evans, Sexual Citizenship, 146.

[27] John Binnie, 'Trading Places: Consumption, Sexuality and the Production of Queer Space', in: David Bell / Gill Valentine (eds.), Mapping Desire: Geographies of Sexualities, London 1995, and Amy Gluckman / Betsy Reed (eds.), Homoeconomics: Capitalism, Community, and Lesbian and Gay Life, London 1997.

[28] Nicola Field, Over the Rainbow, 167, 172.

[29] Aside from Butler and Sedgwick for queer theory, see Jacqueline N. Zita, Body Talk: Philosophical Reflections on Sex and Gender, New York 1998.

[30] See Dana Cloud, ' Socialism of the Mind: The New Age of Post-Marxism', in Herbert Simons / Michael Billig (eds.), After Postmodernism: Reconstructing Ideology Critique, London 1994, 222–251.

[31] Indicatively, Jürgen Habermas, On the Pragmatics of Communication, Cambridge 1998.

[32] Jeffrey Escoffier, 'Culture Wars and Identity Politics: The Religious Right and the Cultural Politics of Homosexuality’, in David Trend (ed.), Radical Democracy: Identity, Citizenship and the State London 1996, 165–178.

HM London 2016 Conference: Panel on Michael Roberts's The Long Depression

Michael Roberts is a private researcher who has worked as an economist in the City of London for over 30 years. He is the author of The Great Recession - a Marxist View (2009, Lulu Press) and The Long Depression(2016, Haymarket Publications). He has presented papers to the American Economics Association annual conferences, Historical Materialism conferences and to those of International Initiative for the Promotion of Political Economy (IIPPE) and the Association of Heterodox Economists (AHE). He writes a blog on Marxist economics at thenextrecession.wordpress.com.

At the 13^th annual HM Conference in Londonhm-13-16, I am participating in a session where I shall present the key ideas in my new book,The Long Depression. You can get a gist of those themes froma previous post.  Also participating are Jim Kincaid, Al Campbell and Erdogan Bakir who will offer some short comments on my book and its conclusions.

For some time, Jim has wanted to present a critique of my empirical work on Marx’s law of the tendency of the rate of profit and my thesis that Marx’s law can be seen as the underlying cause of crises in modern capitalism and, in particular, of the Great Recession of 2008-9.  “I have been able to assess more closely a dimension of Michael’s work which I believe is open to question.  A central theme in much of his analysis is that it is a declining rate of profit which is the underlying cause of the sequence of crisis which has afflicted the major industrial economies since the late 1990s.”

Al Campbell will deliver his comments at the session, but before the session, Jim has posted on his own (very interesting) blog, an opening critique of my empirical work along with an alternative approach to the current crisis.

His alternative explanation runs along these lines (as in his post):“That the mass of profit has been relatively high in the last 10 years gives some support to the broader argument I have been developing that in this period the system has been contending, not with falling rates of realised profit, but rather with an excess of profit relative to the levels of investment which have been lagging.”

And thus Jim argues against my view that: “the crucial underlying cause of the crises of the post-2000 period is that the rate of profit peaked in 1997 and has not recovered since.  Behind this is a logically questionable assumption, that if crises are recurrent (even though different in form) there must be a single and common cause.”

Jim goes on: “as Michael’s own empirical work makes evident, there has not been, over the past 20 years, a simple linear fall in the US rate of profit.  Rather what we see are cyclical patterns of oscillation.  Falling rate of profit tendencies are battling it out against counter-tendencies, with complex results which have to be explained dialectically and not by looking for a single unilinear cause.”

You can read Jim’s full critique, which is just an opening shot, on his blog.  But the essence of my reply follows below.  I apologise for the length of this post in advance, but both Jim and I thought it would be useful to post our opening thoughts before the HM session so others could consider the arguments.

Jim is very kind in praising much of my efforts on my blog and in the book to develop Marxist economic theory with empirical evidence. But I’ll concentrate on dealing with Jim’s critique of my work on the post-war profitability of capital in the US, its relation to Marx’s law of the tendency of the rate of profit to fall and the causes of crises under capitalism, particularly the cause of the Great Recession of 2008-9.

Jim first says that “I do not think that Roberts’ data about US profit rates actually support some of the conclusions he draws about trends over the past 20 years”. He hints that, when I say there has been a secular decline in the US rate of profit in the post-war period, I might be misleading readers into thinking that this has been“a continuous fall”, when instead there have been “two periods of recovery” with the rise after 2000 being“the most significant”.  Well, I have to plead not guilty here. Nowhere, I have stated or implied in any of my papers or work that there was a ‘continuous fall’ in the US ROP.  On the contrary, I have made much of the recovery in profitability since the early 1980s as revealing the impact of the counteracting factors that Marx outlined in his law of profitability.  So this is a straw man on Jim’s part to knock down.

There has been a secular fall and, as Jim says, “this is clearly correct”. But as Jim says, “Michael Roberts’ own empirical work makes evident, there has not been, over the past 20 years, a simple linear fall in the US rate of profit.  Rather what we see are cyclical patterns of oscillation.  Falling rate of profit tendencies are battling it out against counter-tendencies”.

Another red herring, in my view, is Jim’s claim that I reckon changes in the organic composition of capital cause changes in the short-term business cycle.  As Jim says, “Marx himself saw the organic composition of capital as changing over longer periods of time, not as the cause of short-run movements in the business cycle.”  I agree.  And I don’t think that I have argued that it explains ‘short-term’ movements.  But it is essential to explaining why the rate of profit will fall over time, namely because of a rise in the organic composition of capital, unless counteracting factors (like a faster rise in the rate of surplus value) dominate.  Indeed, this explains the movement in the US rate of profit in the post-war period.

The organic composition of capital rises secularly but with a fall from the mid-1960s to the end of the 1970s.  It rises in the neo-liberal period from the early 1980s, but the rate of exploitation rises faster.  In the 2000s, the rise in the organic composition accelerates to match the rise in the rate of surplus value and so the rate of profit stops rising.

More specifically, Jim reckons that I cannot draw the conclusions from my own data that: 1) that the US rate of profit peaked in 1997 and has been static or falling since then: 2) the US rate of profit started to fall again from 2010 or 2012 (depending on the measure used): and 3) the fall in the rate of profit has now given way to a fall in the mass of profits.  Instead Jim reckons that my data show no such fall after 1997 and indeed the rate was higher in 2007 and “profitability fell in 2008 and after as a result of the financial crisis rather than as its cause”.

Well, two things here.  Jim uses the Kliman measure of the rate of profit in his Figure 2.  That does show a rise in the rate of profit from a low in 2001 to a high in 2006 that is higher than in 1997.  But there is a clear fall from 2006, a good two years before the Great Recession began in 2008.  So, even on these data, the rate of profit did not fall “after” the financial crisis but before.

Annual figures for the rate of profit are not very helpful on the timing here.  In my original work that Jim is quoting from, I also used the quarterly figures provided by the US Federal Reserve Bank.  The Fed data can give us the non-financial corporate sector rate of profit by the quarter.  According to that data, the US NFC rate of profit started falling in Q3-2006.  Indeed, by the time of the credit crunch in mid-2007 (before the start of the Great Recession, the NFC ROP had fallen 20%). Interestingly, the Fed data also show that the NFC rate of profit at that time was well below the peak reached in 1997 (10% lower).  It is currently more than 10% below 2006.

Jim says my data show a fall in the US ROP only in 2015, so my claim of a fall earlier is incorrect.  Well, as Jim says, on the annual measures, the peak in ROP since the end of the Great Recession was in 2014, not 2012, although the difference here is tiny.  And in 2015, the ROP fell.  But if we look at the Fed’s quarterly data, we find that the peak was as early as Q3 2010 and is now some 20% below that peak.

Now Jim says that I argue that a fall in the rate of profit is “normally followed by a rise in the mass of profit which is only a temporary phase”.  He then measures the mass of profit against gross domestic income (his Figure 3) which shows that the mass of profit has risen ‘permanently’ up to 2015.  Well, I don’t think Jim has properly presented what I do say.  What I argue,a la Marx, is that a fall in the rate of profit will eventually affect the mass of profit and lead to its fall – and this is usually a key indicator of a subsequent fall in business investment and a slump in capitalist production. Indeed, this is the cyclical process of a recession.

We can see the process leading up to the Great Recession in this graph of US business profits, investment and GDP.

The point that I am making is that the mass of profit will only start falling after the rate of profit has begun to decline.  If the US rate of profit started falling, say in 2012, or at least stopped rising, then we can expect the mass of profit to do so later.  Indeed, as Jim shows with his profit margin figure (profits as share of GDI), that happened in 2015. This suggests that a fall in US business investment will follow and eventually bring a new slump in GDP.  Indeed, US business investment has been falling for five quarters.

We can get quarterly figures for profit margins in the non-financial corporate sector (profits as a share of real gross value added) from the BEA NIPA.  This is what they show in the figure below.

Again, the mass of profit in non-financial corporations began to fall well before the credit crunch of 2007 and the Great Recession of 2008-9.  Then it recovered hugely before peaking in fall 2014 (earlier than 2015 on the annual data provided by Jim).  Profit margins are now back to 2006 levels.

Now, as Jim makes clear, the purpose of his critique of my data and conclusions on the US rate of profit is to “support to the broader argument I have been developing that in this period the system has been contending, not with falling rates of realised profit, but rather with an excess of profit relative to the levels of investment which have been lagging”.

As Jim says, he has been developing this view of the cause of the Great Recession for a while.  I think he presented it back in 2014 at HM.  In an abstract then, Jim said that “(1) empirically, the thesis of falling rates of profit in the major economies is based on an uncritical use of not always reliable government data; (2) Harvey and other sceptics are correct to stress that central to the present crisis is the inability of the global system to absorb large quantities of surplus money capital derived from high rates of surplus-value extraction (profits included)”.

Jim argues that it was not, as I argue, a falling rate of profit, or too little profit that caused the Great Recession and subsequent weak recovery, buttoo much.  Capitalist firms have built up huge cash reserves from profits that they are not investing productively.  So the problem is one of how to ‘absorb’ these surpluses, not how to get enough profit.  This also shows, according to Jim, that the causal sequence for crises, is not, as I argue (as above), falling profits leading to falling investment to falling income and employment because we have rising profits and falling investment.

Jim says, that “The operation of these forces has generated a global surplus of capital in the money form which is too large to be recycledback into productive investment.  Thus what we have is, not a crisis of Keynesian lack of consumer demand, nor a Monthly Review crisis of monopoly profits.  But, instead, a crisis of a particular sort of disproportionality – between available accumulations of money capital and the capacity of the system to absorb them.”

Well, I have to say, despite Jim’s denials, his thesis sounds pretty close to that of Paul Sweezy and Paul Baran of the Monthly Review ‘school’that monopoly capitalism has sunk into stagnation because it cannot dispense with ever-increasing surpluses of profit.

But let us consider this argument.  The idea of a global savings glut has become popular among mainstream economics, both monetarist like Ben Bernanke, the former US Fed chief and Keynesian like Martin Wolf, the FT journalist.  Both Wolf and Jim (on his blog) have presented evidence of this corporate savings gap.

This gap, technically called ‘net lending’ by corporations, Wolf describes as a global ‘savings glut’.  The notion of a “savings glut” was first mooted by former Federal Reserve chief, Ben Bernanke, back in 2005.  He argued that economies like China, Japan and the oil producers had built up big surpluses on their trade accounts and these ‘excess savings’ flooded into the US to buy US government bonds, so keeping interest rates low.

Martin Wolf and other Keynesians have liked this notion because it suggests that what is wrong with the world economy is that there is too much saving going on, causing a ‘lack of demand’.  This is the proposition that Wolf recently pushed in his latest book.  In his book, Wolf concludes that the cause of the Great Recession“was a savings glut (or rather investment dearth); global imbalances; rising inequality and correspondingly weak growth of consumption; low real interest rates on safe assets; a search for yield; and fabrication of notionally safe, but relatively high-yielding, financial assets.”

But is the gap between corporate savings and investment caused by a ‘glut of savings’?  Well, look at the graph provided by Wolf, taken from the OECD.

With the exception of Japan, since 1998, corporate savings to GDP have been broadly flat.   And for Japan, the ratio has been flat since 2004.  So the gap between savings and investment cannot have been caused by rising savings.  The second graph shows what has happened.

We can see that there has been a fall in the investment to GDP ratio in the major economies, with the exception of Japan, where it has been broadly flat.  So the conclusion is clear: there has NOT been a global corporate savings (or profits) ‘glut’ but a dearth of investment.  There is not too much profit, but too little investment.

But what about the issue of cash mountains in major non-financial companies?    It is true that cash reserves in US companies have reached record levels, at just under $2trn – see graph below.  (All figures come from the US Federal Reserve’s flow of funds data.)  The rise in cash looks dramatic.  But also note that this cash story did not really start until the mid-1990s. In the glorious days of the 1950s and 1960s when profitability was much higher, there was no cash build-up.

But the graph is misleading.  It is just measuring  liquid assets (cash and those assets that can be quickly converted into cash).  Companies were also expanding all their financial assets (stocks, bonds, insurance etc).  When we compare the ratio of liquid assets tototal financial assets, we see a different story.

US companies reduced their liquidity ratios in the Golden Age of the 1950s and 1960 to invest more.  That stopped in the neoliberal period but there was still no big rise in cash reserves compared to other financial holdings.  And that includes the apparent recent burst in cash.  The ratio of liquid assets to total financial assets is about the same as it was in the early 1980s.  That tells us that corporate profits may have been diverted from real investment into financial assets, but not particularly into cash.

Comparing corporate cash holdings to investment in the real economy, we find that there has been a rise in the ratio of cash to investment.  But that ratio is still below where it was at the beginning of the 1950s.

And remember within these aggregate averages lies the reality that just a few mega companies hold most of the cash while thousands of small and medium enterprises (SMEs) hold little cash and much more debt.  Indeed, a minority are really ‘zombie’ firms just raising enough profit to service their debt.

Why does that cash to investment ratio rise after the 1980s?  Well, it isnot because of a fast rise in cash holdings but becausethe growth of investment in the real economy slowed in the neoliberal period.  The average growth in cash reserves from the 1980s to now has been 7.8% a year, which is actually slower than the growth rate ofall financial assets at 8.6% a year.  But business investment has increased at only 5.3% a year in the same period, so the ratio of cash to investment has risen.

Interestingly, if we compare the growth rates since the start of the Great Recession in 2008, we find that corporate cash has risen at a much slower pace (because there ain’t so much cash around!) at 3.9% yoy.  That’s slightly faster than the rise in total financial assets at 3.3% yoy.  But investment has risen at just 1.5% a year.  So consequently, the ratio of investment to cash has slumped from an average of two-thirds since the 1980s to just 40% now.

So companies are not really ‘awash with cash’ any more than they were 30 years ago.  What has happened is that US corporations have used more and more of their profits to invest in financial assets rather than in productive investment.  Their cash ratios are pretty much unchanged, suggesting that there is not a ‘wall of money’ out there waiting to be invested in the real economy.

This brings me back to the point I left earlier when I showed that the profitability of non-financial corporations did fall after 1997 and remains well below.  What that tells me is that after 2000 the corporate profitability measure (Kliman) or the ‘whole economy’ measure (Roberts) express the rise in the profitability of the finance and other unproductive sectors of the US economy, while the productive sector ROP continued to fall.  In other words, much of the rise in profitability and profits after 2000 was fictitious.  Can I justify that conclusion?

Well, work by Peter Jones in Australia has done just that. Peter Jones argues that “fictitious profits can also hide the consequences of a falling rate of profit for a time. Government borrowing can ‘artificially’ inflate the after-tax rate of profit on production (and the same effect applies to after-tax rates of profit from secondary exploitation); and fictitious profits can ‘artificially’ inflate investors’ wealth and rates of return.”

Jones[i] adjusted the official US figures for profit for fictitious profits, namely those made by banks from lending to government (bond purchases) and from utilising the savings of workers (mortgages etc) to come up with a measure of profit that best represents surplus value created in production and realised by the productive corporate sector. When he puts this against net fixed assets, the result looks like this.

So the post-2000 divergence between corporate profits and capex disappears and can be explained by a rise in investment in financial assets or what Marx called ‘fictitious capital’.

Yes, large firms in the capitalist sector of the major economies have been hoarding more cash rather than investing over the last 20 years or so.  But they are not investing so much because profitability is perceived as being too low to justify investment in riskier hi-tech and R&D projects, and because there are better returns to be had in buying shares, taking dividends or even just holding cash.

Also many companies are still burdened by high debt even if the cost of servicing it remains low.  The high leveraging of debt by corporations before the crisis started now acts as a disincentive to invest.  Corporations have used their cash to pay down debt, buy back their shares and boost share prices, or increase dividends and continue to pay large bonuses (in the financial sector) rather than invest in productive equipment, structures or innovations.

I conclude that the cash reserves of major companies is not an indication that the cause of crises is due to inability to absorb ‘surplus profit’ but due to an unwillingness to invest when profitability remains low and corporate debt is relatively high.  That is the cause of this Long Depression.

And here is the rub.  Just at this time when Jim raises the issue of huge cash reserves and suggests that the cause of crises is due the difficulty of ‘absorbing’ profits, US corporate earnings are falling and profit growth has ground to a halt.  Cash reserves are set to fall from here too.

US corporate profits(adjusted for depreciation) % yoy

This brings me to Jim’s final point.  Jim questions my “constant theme – that the crucial underlying cause of the crises of the post-2000 period is that the rate of profit peaked in 1997 and has not recovered since.”  He says it is“logically questionable” assumption, that if crises are recurrent (even though different in form) there must be a single and common cause. Jim says, the empirical evidence for Marx’s law has“complex results which have to be explained dialectically and not by looking for a single unilinear cause”.

Well, I don’t think it is ‘logically questionable’ to argue that recurrent and regular crises may have a common underlying cause.  On the contrary, the regular and re-occurring crises make it logically questionable to look for different causes for each crisis, as many have done, from David Harvey, Panitch and Gindin, Dumenil and Levy etc.

Jim says that the contradictions within capitalism can “change the current configuration of the system. The tendency of profit rates to fall is not in itself a contradiction.”  Well, I thought it was“the most important law in political economy” (Marx) precisely because it showed the main contradiction in the capitalist mode of production ie. between developing the productive forces (raising the productivity of labour) and the profitability of capital; between the drive to raise profits for individual capitals and the unintended consequence of falling profitability in the whole system.

The real question is whether the claim that the Marx’s law of profitability as the underlying cause of crises under capitalism can be empirically validated.  That is what my work and the work of many others attempts to do.  And I think we are achieving that.

[i] Peter Jones, The falling rate of profit explains falling growth, paper for the 12th Australian Society of Heterodox Economists Conference, November 2013

HM London 2016 conference: Jim Kincaid on Michael Roberts

Jim Kincaid is an independent researcher based in Leeds, West Yorkshire (UK). Previously Senior Lecturer in Social Policy at Bradford University, he has been associated with Historical Materialism since 2002, first as member of the Editorial Board, and now as a corresponding editor. He has published articles in HM on topics which include: the political economy of Japan and East Asia, Marxist value-theory, finance, and the logical construction of Marx's Capital. He currently works on two projects: (1) how political economy is presented as a literary text in Capital; (2) how Marxist concepts can explain recent dynamics in the world economy – and in what ways Marx's categories have to be further developed to capture the current evolution of the system. He blogs at:https://readingsofcapital.com/ Some recent publications are availablehere.

Michael Roberts has emerged as one of the leading Marxist analysts of current economic developments.  For many of us, his blog, The Next Recession, has become an indispensable and challenging resource. He has also recently published his second book,The Long Depression, a lively summary of his current research which also extends the arguments of his blog in some important and interesting ways.  For example, detailed accounts of the Long Depression of the late 19th century and the Great Depression of the 1930s.

Some of Michael’s recent posts show him at his formidable best.  To take just one of many examples, on 9 Oct 2016, a discussion of the anxieties being expressed in recent reports by bodies like the IMF and BIS about the growing problem of high debt levels.  In a brief, but notably clear and well documented account, Michael surveys some of the main vulnerabilities in the system today – the fragility of corporate balance-sheets in many emerging economies, the dangerous levels of non-performing loans which threaten leading banks in major economies such as China, Germany and Italy, the general failure of monetary policy and zero interest rates to generate adequate levels of investment and growth in production, productivity and trade.  Here also there are calculations by Michael which show that that the latest policy nostrum being advocated by the IMF and in many other quarters – i.e. big increases in state spending on infrastructure – can’t realistically be nearly large enough to revive a serious increase in overall rates of growth.

Michael believes that there is now, ‘the prospect of a new global slump on a fast approaching horizon’.  I think it is quite possible that he will be proved right about this.

One of the signal virtues of Michael’s work that he is committed to norms of scientific practice and tries wherever possible to back up his analysis and conclusions with evidence.  He is resourceful in ferreting out relevant data from official statistical sources, and in finding vivid ways of presenting his results graphically. In addition, Michael is willing to make his working spread-sheets available to other researchers.  Earlier this year when I was working on profit trends in the US economy I took up a general invitation which Michael had made in a footnote – and he immediately sent me a pile of relevant work sheets and explained detail in a covering letter. Many thanks for this.

I have been able to assess more closely a dimension of Michael’s work which I believe is open to question.  A central theme in much of his analysis is that it is a declining rate of profit which is the underlying cause of the sequence of crisis which has afflicted the major industrial economies since the late 1990s.  As the biggest by far of the industrial economies, the US has been the main battleground in the debate about this thesis.

Using the same definition of the profit rate as does Michael, I have checked his spread-sheets against the original sources in the US official statistics, and redone the calculations.  I get the same results – as did a Swedish researcher, Anders Axelsson,  who had made an earlier check of  the material.

However, there is a problem.  I do not think that Michael’s data about US profit rates actually support some of the conclusions he draws about trends over the past 20 years.

In his Post of 4 Oct 2016, Michael once again summarises the findings of theanalysis of US profit rates from 1946-2014 which he published in December 2015.  Here in Figure 1 is the graph which he published in his December post in support of his conclusions.  Note that the definition of profits used in Figure 1, is the same as the one chosen by Andrew Kliman in his book-length study of US profit rates,The Failure of Capitalist Production (2011 pp.99-101). Profits of the financial as well as the non-financial sector are included in the corporate total. All figures are for the USdomestic economy only – overseas investment, production and profitability of US firms are excluded. (Kliman p.75).

From the data in Figure 1, Michael draws four conclusions in his Post of 4 Oct 2016 [  ].

• ‘The secular decline in the US rate of profit since 1945 is confirmed … the US corporate profit rate is some 30 per cent below where it was after World War 2 and 20 per cent below the 60s’. This is clearly correct, but we should be careful about how we use the term ‘secular’. If a direct trend line is drawn between the 1950s and 2015 it certainly slopes downward.  But Michael is sometimes assumed by his less critical readers to be saying that there has been ancontinuous fall in US rates of profit over the past 60 years.  However the trend line which he has calculated in Table 1 shows a cyclical pattern – two periods of fall, followed by two periods of recovery, though on a dampened scale. The post-2000 recovery is especially significant given that it preceded, in 2008, the most severe crisis of the post-war period. The causality here has to be more complex and dialectical and needs to focus on cyclical patterns, not a unilinear and continuous trend.

Michael next argues that:

• ‘Profitability … peaked in the late 1990s after the neoliberal recovery. Since then the US rate of profit has been static or falling’.
• ‘Since about 2010-12, profitability has started to fall again’.
• ‘Finally, the fall in the rate of profit in the US economy has now given way to a fall in the mass of profits’.

To test the latter three propositions we need to look more closely at rates of profit in the past 20 years. In Figure 2 I have used Michael’s own data for this period with only two changes: adding in the 2015 figures which have since been published, and a revision upwards of his 2014 rate of profit (because the figure for Gross Value Added in that year has since been raised in the on-line data source by about $90 billion.

Apart from these, Figures 2, 3 and 4 are based on Michael’s own spreadsheet (No. 9)

Source: Profit = net GVA = Gross Value Added MINUS Annual DepreciationMINUS Employee Compensation.

Corporate sector (Financial and Non-financial Companies. Domestic Economy only)

GVA Domestic Corporate Business – BEA NIPA Table 1.14, line 1

Employee compensation – BEA NIPA Table 1.14, line 4.

Fixed asset annual depreciation (Historical Cost)  – BEA Fixed Assets Table 4.6, line 17.

On my reading, the data in Figure 2 do not support conclusions (2) and (3).

• Since the late 1990s the rate of profit has not been ‘static or falling’. The rate was higher in 2005 and 2006 than in the 1997-8 peak. It seems unlikely that that the financial crisis which started in 2007, and went critical in 2008  was caused by a profit rate in 2007 at the same level as the late 1990s. The 2008 crisis was far more severe in its impact on jobs, wages, growth and trade than the dotcom downturn of around 2000.  Yet the impact on profitability was considerably briefer and more limited.  Profitability fell in 2008 and after as aresult of the financial crisis rather than as its cause.
• Profitability did not ‘start to fall after 2010-12’. After rising sharply from the 2010 low point, profit rates stayed level in 2013, rose fractionally in 2014, and only in 2015 was there the beginnings of a fall.
• Michael also holds that a drop in the rate of profit is normally followed by a rise in the mass of profit which is only a temporary phase. Figure 3 shows that this was not the case in the recent period.

Source: As for Table 2.  Gross Domestic Income – BEA NIPA Table 1.10, line 1.

In Figure 3 the mass of profit is measured as a proportion of Gross Domestic Income to eliminate the effect of inflation. When a comparison is made with Figure 2, it is evident that the two downturns in the rate of profit were not followed by a rise in the mass of profit which was onlytemporary.  The mass of profit recovered more quickly from the downturn of 2008, and that rise was sustained right through to 2014.  The rate and mass of profit track each other quite closely until 2006 when both rates were exceptionally high.  But the recovery after 2008 was more rapid for the mass than for the rate, and was not temporary, but continued through until the 2015 drop.

An alternative explanation 

That the mass of profit has been relatively high in the last 10 years gives some support to the broader argument I have been developing that in this period the system has been contending, not with falling rates of realised profit, but rather with an excess of profit relative to the levels of investment which have been lagging.

I have spelt out the arguments in an article which is in the latest issue of HM (24.3).  Also I have added further evidence in a series of posts on my website. See especially the posts ofMay 15 andApril 26 2016.

The system is being wracked and distorted by the malignant consequences of the effectiveness of neoliberal profit raising counter-tendencies. Profit rates have been driven up, and investment constricted, by a potent combination of market forces, aggressive campaigns by capital to raise the rate of exploitation, financialisation, state policies, and a deep change in the mode of regulation of the corporate sector (shareholder value etc.).  The operation of these forces has generated a global surplus of capital in the money form which is too large to be completely recycled back into productive investment.  Thus what we have is not a crisis of Keynesian lack of consumer demand, nor aMonthly Review crisis of monopoly profits.  But instead, a crisis of a particular sort ofdisproportionality –between available accumulations of money capital and the capacity of the system to absorb them.

Official statistics are not the only source of support for this thesis.  See, for example, an authoritative study by the Toronto based McKinsey Global InstituteGlobal Competition (2015). The data in this research covered about 28,000 large firms from 42 countries  (i.e. companies with turnover equivalent to over $200 million per annum). MGI found that: since 1980 corporate cash holdings have ballooned to 10 per cent of GDP in the US, 22 per cent in Western Europe, 34 per cent in South Korea and 47 per cent in Japan.

Corporate accumulation of cash reserves is only one source of an overall excess of liquid capital in the system.  Other major channels are: (1) the investible capital piling up in the global economy as the numbers and average wealth of the ultra-rich continue to rise; (2) international current account imbalances. In the pre-2008 period the US current-account deficit was a huge 5.6 per cent of GDP in 2006; China’s current account surplus was 10 per cent of GDP in 2007 – the counterpart flows of capital from China for lending and investment in the US were thus enormous.

The tendency of the rate of profit to fall, which Marx correctly identified, has been reversed in the recent period by the strength of a range of countertendencies. The rate of exploitation has been driven up, the turnover of capital has accelerated, the expansion of labour-intensive service sectors has slowed the rise in the organic composition of capital.

Investment levels in the major economies have lagged in money terms, as the value and price of investment goods has fallen in relative terms.  Corporate strategies in the productive and financial sectors have shifted over the past three decades to defensive and aggressive operations in the mergers and acquisitions market for corporate control, and to the maintenance of high share-prices.  These objectives require large war-chests of money capital, and a careful rationing of investment expenditure. Corporate tax evasion has soared, based on the holding of profits in money form, and laundered through tax havens rather than reinvested in production. Generous payments to executives and shareholders have also been a priority in surplus-value allocation.

From these various sources, from around 2000 a  rising surge of surplus loanable capital was being transferred into the banks and financial markets to be lent out and invested by them. The consequences were contradictory.  Large profits, initially, in the financial sector, but then increasing difficulty in finding a large enough supply of safe assets and reliable borrowers.  Disaster hit in 2007 after more than $1 trillion dollars had been lent in unsustainable subprime mortgages in the US, and securities based on these mortgages had been sold on a huge scale to banks in the US and Europe.  Severe strains also arose in Europe because banks in the Northern countries had lent lavishly to finance unsustainable booms in the peripheral economies of the EU.

And since then, a seemingly intractable combination of ultra-low interest rates, stressed banking systems, demand deficiency, faltering growth in key sectors of the world economy – and, since mid-2015, indications that profit rates may be starting to fall. Governments and markets have been testing new ways of coping with the problem of excess money capital.  The  patterns of stress in the system have altered.  Large sums of money have been absorbed by the major banks in the reconstruction of their balance-sheets. Leverage ratios have been driven down and their reserves in the central banks hugely increased.  In the short run this is a safer (if much less profitable) way of dealing with surplus liquidity in the financial circuits than handing it out in subprime mortgages or as loans to Spanish property developers.  But the crisis then takes the form of stagnating growth in investment and trade.

Since 2008 one of the three channels through which excess money capital is being transferred into the financial system has diminished. The US current-account deficit fell from 5.8 per cent of GDP in 2006 to 2.7 per cent in 2014  However, the numbers and net worth of the global wealthy keep rising.  And the continuing build-up of corporate cash piles remains a further and potent source of excess money capital in the system.

We have to remember the scale of the trends being summarised in the US in Figures 1-3 above.  For example, from its low point in 2008, the mass of profit in the US (using Michael’s definition) rose from about $2 trillion to over $3 trillion. This is a very sizable increase, given that Gross Domestic Income in the US was just over $18 trillion in 2015.  Since investment levels were relatively static in this period the result was a rapid rate of accumulation of corporate cash reserves. Notoriously, much of this flow is booked through tax havens to evade US taxation of profits.

The question of tax evasion leads us back to the definition of profits which Michael and Andrew Kliman use in their work. Here I stress that none of the ways in which Marxist researchers define profit rates and use official statistics are entirely satisfactory. Mine own included.  However if we want to do science rather than peddle myths we have to use the data available, but, obviously, with critical care and caution about their limitations. In all the sciences, research at the edge of knowledge is endemically plagued with problems and controversies about the meaning and validity of the data being used.

Marx defined the rate of profit as follows: s/ C + v.  I.e. surplus-value divided by capital advanced (constant capital + wages). But this can be construed in two ways:  either (1) as the capital advanced and surplus value extracted by companies – thecorporate rate of profit; or, (2) asocialrate of profit, which Michael calls awhole economy rate of profit.  The latter is a measure of the surplus generated within the whole economy in a given year, after deducting, (a) the amount of productive capital consumed in the private capitalist sector and, (b) total wages of all employees (not just those employed in the capitalist sector).

In the work which is summarised in Figures 1 to 3 above, and in common with Kliman, Michael used the corporate definition of profit.  He now prefers, he says, a whole economy rate of profit and this is what he employs in his latest book, The Long Depression.  I’ll discuss this, and the problems it poses, another time. But Figure 4 shows much the same pattern as the corporate profit rates in Figures 2 and 3 – a higher rate in 2005-6 than in the late 1990s, a sustained, if unspectacular, recovery after 2008, and a small drop in 2015.

Gross Domestic Income NIPA, Table 1.10, line 1.

Employee Compensation  NIPA Table 1.10, line 2.

Consumption of Fixed Capital  Fixed Assets, Table  1.10, line 23.

Private Non-Residential Fixed Assets  –  Table  4.3, line 1. (hist cost).

These differing definitions raise questions about Michael’s claim that the cause of a fall in the rate of profit is a rise in the organic composition of capital which is faster than any rise which has taken place in the rate of exploitation.  This is certainly a crucial mechanism.  But it does seem unlikely that in the cyclical variations in recent profit rates, a rise in the organic composition of capital plays a significant role.  Marx himself saw the organic composition of capital as changing over longer  periods of time, not as the cause of short-run movements in the business cycle.

It needs emphasise that both the corporate and the whole economy rate of profit in US official statistics have one large limitation. They cover the domestic economy only. The source for corporate value added figure is: NIPA Table 1.14 Gross Value Added ofDomestic Corporate Business; for the whole economy rate of profit the source is NIPA Table 1.10 GrossDomesticIncome by type of income. See for more discussion, my Post of April 13.

The Methodological Handbook for the US National Accounts explains that:

Domestic profits include all profits made by companies from operations in the United States as a geographical territory, irrespective of the nationality of the company. (i.e. where its headquarters are located)  Crucially, as the Handbook explains, “The profits component of domestic income excludes the income earned abroad by US corporations”. (Section 13 – 5).

We need not assume that all profits booked through tax havens are necessarily missing from the profits figures in the National Accounts: there are many loopholes which allow profits to escape taxation and to be reported in the corporate tax returns and company accounts which the Washington statisticians rely on.  But the balance of probability is that the exclusion of foreign-sourced profits from the National Accounts must mean a large underestimate of actual profit rates in the current period.  Thus it is by no means certain that US profit rates have in fact been 20 per cent lower than in the 1960s. For example, in the business press, in recent years, it is usually assumed by journalists, without any question, that profit rates in countries like the US have been at their highest in the post-war period, both before the downturn of 2008, and in the recovery since 2010.

There are of course other problems with the concept of domestic profits as used in the National Accounts of the US and other high-income economies.  As John Smith and Tony Norfield have explained in their recent and valuable books, much of the surplus-value which appears to be generated in the domestic economy is derived from the exploitation of labour in the low-wage economies. Here there are fundamental questions to be further explored.

 Some conclusions

Michael Roberts’ overall argument has many dimensions.  He acknowledges that different crises are sparked by different triggers. Due recognition is given, for example, to financialisation, and the instabilities generated by increasingly levels of debt in the major economies.  There are interesting sections on these aspects of the crisis in his book on TheLong Depression  But in his work there is an constant theme – namely that the crucial underlying cause of the crises of the post-2000 period is that the rate of profit peaked in 1997 and has not recovered since.  Behind this is a logically questionable assumption, that if crises are recurrent (even though different in form) there must be a single and common cause.

I have shown above, that as Michael’s own empirical work makes evident, there has not been, over the past 20 years, a simple linear fall in the US rate of profit.  Rather what we see are cyclical patterns of oscillation.  Falling rate of profit tendencies are battling it out against counter-tendencies, with complex results which have to be explained dialectically and not by looking for a single unilnear cause.

We should always be searching for causality of course.  But capitalism is a complex adaptive system.  The contradictions as they evolve (‘find room to move’ in Marx’s phrase) change the immediate configuration of the system. The tendency of profit rates to fall is not in itself a contradiction.  Michael’s own work on cycles (see the chapter in hisLong Depression book on cycles within cycles) has taken promising directions, and resumes themes explored by some of the great Marxist economists of the interwar period (e.g. Preobrazhensky, Maksakovsky) If the research programme ofcycles within cycles is to advance, as I hope it will, its creative implementation will require the sort of exceptional statistical and analytical skills which Michael possesses.

Talk given at Birkbeck, University of London, on 22 September 2016 for the occasion of the publication of Walter Benjamin’s The Storyteller: Tales out of Loneliness, Edited and translated by Sam Dolbear, Esther Leslie, and Sebastian Truskolaski. Illustrated by Paul Klee, Verso, London 2016

Walter Benjamin’s The Storyteller: : Tales Out of Loneliness is an edition of 42 pieces of writing by Benjamin – mainly his fiction, his puzzles and stories, his jokes and sketches. There are a smattering of reviews by him too – in the main ones that had not been translated before. The translators gathered together the bits and pieces of Benjamin’s literary work, some of which had made its way into the collected works, some of which had never been translated and some of which was just scraps that no one had taken much notice of. We rescued that which needed rescuing and put it into English. We also put it into contexts – dividing the book into three themes, to which the stories and the included reviews should speak: dreams, travel and play.

Porous categories – what dreaming is not a kind of play, or a journey of sorts – what play is not a travelling – if one takes Benjamin’s ideas of experience seriously – Fahren andErfahren. And these terms – dream, travel and play extended themselves, stretching into other others – the dream is a nightmare, it is fantasy and it is insanity. Travel can take you to distant places, to the unknown, the remote, or it can be the exploration which Benjamin loved too of your own doorstep – what he calls in his review of Franz Hessel ‘Backdoor Berlin’. The strangeness beneath your feet. And play twisted through the license of German into gambling – into the capacity to lose it all with one throw of the dice or spin of the wheel. It is here that most obviously the intertwinements of capitalism and myth appear.

What are the meeting points of fiction and form? Benjamin is promiscuous in relation to form – he writes bald prose and comic verse and expressionist prose and symbolist reveries and psychological thrillers – and yet perhaps none of those really fit to describe the work. In a review that was excluded in the end from the book – titled ‘Subterranean Passageway in the Tiergarten Street’ – Benjamin notes of watercolours by Rolf von Hoerschelmann in an exhibition:

‘The magic of these pages is perhaps this. On them locality and fantasy come together out of ‘free love’, without letting themselves be wed by the composition.’

Are locality and fantasy so freely entwined in Benjamin’s writings, without being hampered by any rigidities of construction, any commitment to any form, any wish to work and rework what is there? Something holds the pieces together – perhaps that something is assumed by me – but it is an intensely personal involvement in all of the scenes – whether he describes something that has happened to him or something that was told to him by another. It all seems to stem from experience – Erfahrung – from a knowing that is passed on mouth to mouth, created in dreams or found lurking in the streets.

I want to illustrate this by quoting from a review that we translated for the book  but did not include. Titled ‘In Praise of the Doll - Critical Scoffs at Max v. Boehn’s ‘Dolls and Puppet Shows’’, published in the Literarische Welt in June 1930. The review is harsh – a product of disappointment, or jealousy. But then Benjamin slips into another mode.  He writes:

‘Right after this dubious exegesis of Kleist, however, one has the pleasure of stumbling upon the ‘Changeable Dolls or Metamorphoses’. Boehn names as their inventor Franz Genesius. They played a leading role in the Puppet Theatre of Schwiegerling, certainly one of the greatest puppet playhouses of all times. These days it seems to have become difficult to find out anything about his theatre and for this reason I will communicate what I recall of a performance by Schwiegerling’s Puppet Theatre in Bern in 1918. This puppet theatre was actually more of a magician’s shack. There was only one production on each evening. Beforehand, however, his artistic dolls were put on show. I can still clearly visualise two scenes. Kasperl enters dancing with a beautiful lady. Suddenly, just when the music is at its sweetest, the lady collapses, transforms into a balloon and carries Kasperl – who clasps it tightly, out of love – off into the sky. For a moment the stage remains quite empty, then Kasperl tumbles down with a terrible crash. The other scene was sad. A girl who looks like an enchanted princess plays a sad melody on a hurdy-gurdy. All of a sudden the hurdy-gurdy caves in. Twelve sugar-tiny doves fly out. But the princess sinks silently to the ground with her arms raised. And as I am writing this, another memory from those days comes back to me. A tall clown stands on the stage, bows, begins to dance. During the dance he shakes a little dwarf-clown from his sleeve. He is dressed in the same red-yellow floral costume as he is. And with every twelfth step of the waltz, he produces another. Until, finally, twelve identical dwarf- or baby clowns dance in a circle around him.’

A play, a dream, a moment experienced by a student in Switzerland, exiled from his warring homeland. Benjamin writes out of experience and forms his experience into magical, tiny forms, strange wonders of analysis and emotion, dubious sometimes, in the old and in the modern sense, both enigmatic and off-beam – and inconclusive, yet with emphatic, often downbeat or deflating conclusions – like the shock of waking that must be endured until the dreams flood in again. 

Miriyam Aouragh writes on the recent protests in Morocco following the death of Mohsin Fikri

Poster by Contemporary Bart

As Morocco’s streets roiled with protest, we looked with astonishment and even mistook some of the videos for scenes of the 2011 uprisings. It is not an exaggeration to say that, yet again, the whole country rose up. Hundreds of thousands of people are protesting across the country chanting ‘al sha’b yourid isqat al fasad’ [the people demand the downfall of the corrupt] or ‘tahiya nidaliya, al hoceima thawriya’ ‘[salute to the uprising, al hoceima is our revolution]. The protests quickly spread to more than 40 cities. They then reverberated in the major cities of France, Spain, Belgium and the Netherlands where most of the Moroccan diaspora reside.

These protests began after a fish seller was crushed to death in the northern Mediterranean town of Al Hoceima. The story of Mohsine Fikri is gruesome and particular but also symptomatic. He jumped into the garbage truck with a few other colleagues to protest the embezzlement (and waste) of their fish, which was ordered by the police and the well-connected merchant controlling the retail of fish. Witnesses said the police then ordered the driver to set-off the trucks grinder-system. Mohsin's colleagues managed to jump out in time, but he got stuck behind.

One of the policemen sarcastically commented “than mo”, which is loosely translated asgrind the mother. Mother is both a contraction of a well-known derogatory swearword in whichmo/k revers to 'mother', and denotes the Darija (Moroccan Arabic) mostly spoken by non-Amazigh policemen enlisted in the area. Historically, these men are sent from central Moroccan army barracks to control and intimidate Amazigh locals, mostly with impunity. Their interactions are often disrespectful, loaded with references to imazighen as inferior people. So the hashtag♯than_mo has a deeper meaning for imazighen than appears on the surface.  "Than 'mo" went viral on social media, often joined by photos displaying the gruesome act. When the photos and videos of Mohsin and the first protests circulated that same day, the spontaneous movement became a fact authorities could not ignore.

The outrage led to mass rallies, although mostly spontaneous they often including previous 20 February activists, the nation-wide network behind the demonstrations during the Arab uprisings of 2011.

Sensing the jeopardies that come with these these trans-local steadfast collaborations, the furious mood as well as the awareness that smaller incidents can spark major transitions, the political elite of the Makhzan [Moroccan reference to the state structure which is itself an intricate part of the palace] almost immediately pledged to conduct an investigation. Officials form different ministries and parties ordered to visit Fikri’s family and persuade them to quell the protests. King Mohammed 6 and ministry entourage have also tried to sway the dynamic back to ‘normal’. Although there have been arrests (and in the un-exposed villages and smaller cities the response remains violent), the police and army are mostly restrained. This unusual response signifies how puzzled the regime is. The fact that this week the Kingdom hosts the COP22 climate conference has augmented apprehension over their response.

Hyper-capitalism with a crown

The events reflect different important things simultaneously. There is the recurring manifestation of anger over careless police repression, as people are tired of the unhindered behavior of the security forces, often showing its monopoly over violence and authoritarian policies in a spur-of-the-moment such as that fatal day for Mohsin. But it is also a continuation of the explosion of anger and protest in 2011 across the Arab world  - including the Maghreb with its many non-Arab communities and political minorities, such as the imazighen in the northern and southern parts.

As was important to note in 2011, these are not just protests against repression and violence typical of a police state. Dictatorships cannot be understood outside of their larger political-economic context. We find with Morocco a very complex reality caused by the sort of unlimited-privatization and hyper-capitalism that transfers its for-profit logic onto a much more harshly controlled trade of (mostly local) fishery. This regional and national problem is felt very clearly in Morocco’s coastal cities and towns. For instance, we see this in Al Hoceima, where many people are dependent on fish and have been selling fish independently for a long time. Fish and fishery, the coast and the sea are part of the social fabric. All the new rules and regulations, to the point of violent prevention of personal retail, are experienced by residents and fishers as aberrations to normal life. These incidents are testimonies of how economic liberalisation impose undesirable socio-cultural changes. But the contradiction is that they also encourage resistance. 

Analysis of these protests needs to incorporate how millions of ordinary people are confronted with critical socio-economic shifts caused by Morocco’s extreme neoliberal policies. This dynamic is in addition to crucial local and historic issues such as the demand for local sovereignty (e.g. to allow local fish and crops to benefit the community instead of a few well-connected (me’rifa) businessmen) and democracy with particular demands for accountability of police repression.

However much these swift and raw public spasms are confirming that social tensions have reached a tipping-point, these are not new. Since independence in 1956, Morocco has provided both a geopolitical and economic sphere of influence, including in particular the northern regions because of their geographic locations connecting Africa, Europe and the Middle East — this was after all, the main motive for the international status of Tangier for a very long time, the poster-boy that provided Africa its largest and oldest tax-free manufacturing zones. And this historic exploitation and suffering is why it matters that the protests erupted in the northern Al Hoceima region, also known as the Rif.

History cuts like a knife

Morocco was occupied and colonized by France and Spain, and Spain was the colonizer in the north. And it was a particularly harsh colonization in the north. The legacy is stained by colonial violence and this history still cuts like a knife. The Northern regions have a particular history of unrest, since the Rif is also the birthplace of Abd el-Krim al-Khattabi, one of the most important anticolonial resistance fighters in the early 1920s, respected across the Arab world, Africa and what was previously known as “Third World”.

Moroccan independence differed from other liberation movements, most importantly nearby Algeria. It was an agreed transition with the colonizers. In the north, some of the fiercest battles were fought (and, remarkably, often won) where people suffered unimaginable violence for decades. Medical and scientific reports about the lasting effects of mustard-gas aerial attacks are still on-going. The local consensus was to continue the struggle. They wanted real independence, one that included the right to determine their own future with respect for the regional Amazigh culture, language and politics. This blew up during the Rif insurrection in ’58-59, which was crushed by the then-new kingdom of Mohamed 5 and in which crown-prince Hassan 2 personally participated (See filmBriser Le Silence). This is a very painful part of the memory of the Rif and the general sense there is that people do not forgive or forget. But the makhzan doesn’t let people forget.

These memories are prompted every time the people rise up and are suppressed again, as occurred during the Intifadas of 1981, 1984, 1991. Al Hoceima (mostly as part of the Food Riots in the rest of the country in response to IMF imposed cuts or planned privatization of education) experienced major uprisings. Some were actually initiated and led by young school students and spread throughout the north of the country. So those memories are continuously refreshed and in due course become part and parcel of the syntax of certain politically involved citizens.

But all of these previous experiences culminated in 2011. Those who were politically involved were able to disseminate these memories – and all the lessons derived from them – to a new generation of activists. This is crucial because as is typical for any dictatorship, for decades there has been a very strict censorship of the political history of Morocco, at least until the early 2000s around the time the new King Mohammed 6 took over the throne when his father Hassan 2 died and understood the regime had to adapt. But it seems that in the last few weeks reached a limit, “than mo” was the last straw broke the camels back. The placards carried at protests (often joined if not led by women) saying The Rif Does Not Kneel is the ephemeral retribution of the incessant and compulsory obedience.

Caption placard: The Rif Does Not Kneel. Photo by Mohammed El Asrihi]

Unfinished Business

While many didn’t really know about these histories, not even of the epic anti colonial resistance of the 1920s and the massacre at the hand of their own government during the 1950s insurrection, it all haunts the Rif. They then merge with more recent experiences of 2011. We could see the current uprisings as an opportunity for those old and recent memories to converge. Indeed, during the 20 February protests in Al Hoceima five demonstrators were killed and their corpses moved to another location where they were burned to hide evidence. When people reject the promises to investigate the death of Mohsin Fikri, they recall these 5 young men.

Those cases were never resolved despite promises to conduct honest investigations. So there is a certain unfinished business - both a feeling of unfinished business in Al Hoceima in terms of its history and repression by the makhzan, and with the rest of the country with regards to the movements that arose in 2011-12 and were successfully quelled through government cooptation and the promises of new constitution and elections.

Makhzan Public Relation

Marrakesh will host the 22nd COP UN climate summit. All the official climate-related motives notwithstanding, this cannot be separated from other political interests of the Kingdom. There is an interesting international development with regards to Morocco’s attempt to become part of the international community. Morocco has invested enormously in its PR over the years. Ironically, one of the major recipients of funding has been the Clintons and especially Hilary Clinton in anticipation of her Presidency (activists are currently sharing sarcastic statements to claiming back their tax-funded gifts). A number of reports (diplomatic cables known as “Marocleaks”) exposed how the Moroccan makhzen employed PR advisers, some belong to Brookings and others agencies affiliated with pro-Israeli lobby firms (See Intercept). In other words, organizations that are experienced in rebranding unacceptable policies or states, that sell dictatorships as democracies. In Morocco this is mainly related to the controversy over Western-Sahara.

The invitation of big organizations and NGOs to Morocco to organize their conferences is one of the ways the Moroccan state is trying to improve its international stature. We saw that with the international Human Rights conference two years ago. Many human rights activists and lawyers were very angry about this charade, for while these conferences took place human rights in Morocco were crushed.  The level of cynicism and sometimes irony in all the hashtags, posters and banners are precisely about exposing that fierce contradiction. A country that is organizing international conferences about climate change or democracy, and at the same time not offering any of those rights to its own citizens. But this week the activists are reminding the delegates of their disillusionment with these attempts, as one poster says, "Come to COP 22. We will crush you," in reference to the crushing of Fikri.

The past weeks in Morocco are therefore both similar and different from the uprisings in 2011. Mainly, the extremely challenging (and then very new) experiences of 2011-2013 are behind them. Many of the lessons have been learned, often in tragic ways. Hence, activists now expect to see state manipulation of the protests. Besides the orchestrated efforts of all the official media, some confirm that infiltrators were sent to the different protests across the country. The people have no illusions in the promises of a government, which uses its networks of spies to spread rumors about the protests as anti-Arab Amazigh sectarianism, about the activists being Algerian spies, or influenced by Polisario provocateurs. As this new chapter in Moroccan politics reminds us, ordinary people bare the brunt of the Makhzan and therefore change can only come through a united effort across ethnic, linguistic and regional class.