Olympic Games

Global Turbulence and History


 Citizens as Customers

It is now fourteen years since Robert Brenner dissected “The Economics of Global Turbulence”, still the reference work for any serious study of the advanced capitalist economies during the sixty years from 1945 to 2005. There has been no shortage, since Brenner published his book, of commentaries on the root reasons and consequences of the deep crisis of capital accumulation that gripped the “West” from the 70’s onwards, and of the hyper-financialisation and neo-liberal policies that heralded the worst financial crisis since the 1930s. However few observers have reflected on the fundamental questions that Brenner asked in the Afterword of 2006 to his work: what forces are making for the transcendence of the global downturn? What factors are contributing to its still further perpetuation? We know of course part of the answer to the latter: austerity policies now applied to most countries in the western world are depressing consumer demand to a level that makes “recovery” impossible and perpetuate the depression.

In the context of what Giovanni Arrighi described as “The Long Twentieth Century”, it could be argued that we are still living through the terminal crisis and death convulsions of the form of capitalism – to simplify, US-led industrial hegemony – born from the two world wars and the crisis of 1930. Yet there is, until now, a dearth of explanations as to the link between western economic decline, typified by the renewal of Asia to its millennial position at the economic pinnacle of the world, and western “politics”. Here I must confess that a simplistic ritual pillorying of the ineptitude of Hayek’s progeny and neoliberal economics may not suffice. Nor would the no less ritualistic execution of ineffectual and corrupt politicians on both sides of the Atlantic.

Wolfgang Streeck, Director of the Max Planck Institute for the Study of Societies (MPIfG, Cologne) and author of “Re-forming Capitalism” (2009), attempts in “Citizens as Customers” (NLR 76) to analyse the mechanism and effects of the new modes of production and marketing, that were part of capital’s response to the downturn. His “Considerations on the New Politics of Consumption” begin with a critique of an article in Public Interest titled “Public Goods and Private Status” by Joseph Monsen and Anthony Downs, who, in 1971, asked “why American society was, the phrase coined by John Kenneth Galbraith, ‘privately rich but publicly poor’”. Monsen and Downs’ explanation was rooted in “the differential allocation of goods between the public and private sectors”, and “a desire on the part of the consumers ‘for emulation and differentiation’”. Streeck then takes “a longitudinal view on the development of (the) mutual relationship” between the two modes of provision: “one, public and collective, administered by state authorities, the other private and individual, mediated by commercial markets”.  His observations are at times counterintuitive, but dovetail well with the classical analysis developed by Brenner who looked primarily at the manufacturing crisis.

First, Streeck observes that capital’s answer to the stagnation of markets for standardised goods (the staple of post-war Fordism) included making goods less standardised. This phase of reengineering of products and processes, “with the help of microelectronic technology”, rendered much (western) manual labour dispensable, “or at least enabled firms to relocate to other parts of the world where it was cheaper and more deferential” (my emphasis). Second, as “mass production gave way to something like large-scale boutique production”, consumers in affluent societies – initially the “rich” West, but increasingly Asia – turn out to be willing to pay, and borrow to “participate in the new paradigm of economic growth”. Third the customisation of commodities, and soon services, “was part and parcel of a powerful wave of commercialisation of the capitalist societies of the time”. This, in turn, amounted to a massive “invasion of social life by ‘market forces’ under capitalism, a process that Rosa Luxemburg… characterised as Landnahme, or land-grabbing, in the Accumulation of Capital”. The “land-grab”, as we know, translated itself, from the Reagan-Thatcher era onwards over the following three decades, into large scale plundering of public assets, waves after waves of privatisation of essential services. Streeck says that “what firms learned in the 1970’s was to put the individualisation of both customers and products at the service of commercial expansion”. He then observes that, at the same time, “traditional families and communities were rapidly losing authority”. The growing social vacuum was then filled by the “markets”. Streeck cites as typical example of commercialisation the fate of the Olympic Games, once the protected domain of ‘amateurs’, now a giant money-making machine. He makes several further observations on “sociation by consumption”, and the particular type of politics of consumption arising from it in affluent countries. The marketisation of the public sphere that “aimed to rescue capitalism from its late-Fordist stagnation” resulted from the unprecedented commercialisation of social life, and  has had a profound effect on “the relations between collective state and individual market provision”, transforming the relationship between citizens and states. Streeck argues that “as formerly public functions were moved to the private sector and the public sphere came to be simultaneously narrowed and discredited, with the support of reformist governments, the balance between private and public channels of provision shifted in favour of the former”. His conclusion is that this process leads in time to the decline of states’ political legitimacy, and since “citizenship is… less comfortable than customership”, eventually “motivation to contribute to the joint production of civic goods will dry up”. This is clearly the case already in the US,  as “the middle classes, who command enough purchasing power to rely on commercial rather than political means to get what they want, will lose interest in the complexities of collective preference-setting and decision making, and find the sacrifices of individual utility required by participation in traditional politics no longer worthwhile.” As a further consequence “what is publicly perceived of politics is increasingly reduced to self-centred power games, scandals and the egotistic antics of its remaining personnel”. This explains neatly why once affluent countries like the UK, may end up in a similar state as the “Nigerian state railway”: as privatisation and decline in state tax revenues continue, the increasing poverty of the public sphere will not only perpetuate the downturn, but make it unrecoverable.



Eric Hobsbawm

We mourn Eric Hobsbawm who died on October 1st. He was an admirable historian, a wonderful and interesting writer and humanist, and, perhaps the finest analyst, this side of the Atlantic, on the subject of the birth of modern capitalism though the European revolutions, the Age of Capital and Imperialism. He was a lucid witness of the 20th century, of its horrors and its hopes, and of the hesitant first steps of the 21st. I wish to quote the historian Martin Jacques who wrote this moving testimony for the Guardian last Saturday (October 6):

“The first time I met Eric Hobsbawm was at an annual gathering of the Economic History Society. As a fellow historian I had long admired his historical writing. But it was not until a couple of years later that I was to get to know him. By this time I had become editor of Marxism Today. Having read Eric’s articles in the now-defunct New Society, I was aware he had much of great interest to say about contemporary politics. I phoned him in autumn 1978, soon after commencing my editorial duties. I wanted to run a special issue on the 10th anniversary of 1968 and it was patently obvious that there was no better author to write the overview. He did not disappoint. The grand sweep of the piece was breathtaking.

A little later I heard he had given a lecture entitled “The Forward March of Labour Halted?” By the late 1970s I had come to the view that the labour movement was in historical decline. But Eric arguing such a contrary view was an entirely different matter. I asked him to send me a copy; drawing on the range of his historical repertoire, he contradicted the common sense of the time. It became a famous article that was to change the thinking of the left and marked the emergence of Eric as a major political figure, albeit a somewhat reluctant one.

He wrote numerous articles for Marxism Today, many of them classics. We had plenty of fine writers but Eric was indisputably the best and the most influential. Our editorial relationship could hardly have been more straightforward. I would meet him at Birkbeck, or later at his home, and suggest a theme. And always well before the deadline, he would phone and ask me to come round to his home and pick it up. I would read it with a huge sense of anticipation: you never quite knew what he was going to say.

It was difficult not to be in awe of Eric: the breadth of his knowledge, his analytical powers, his lucid writing style, his laser-like ability to get to the heart of the matter, and his originality. Over the 14 years of my editorship of Marxism Today that sense of distance steadily diminished, conversation flowed more easily and we became the closest of friends. When my wife Hari died in a Hong Kong hospital, Eric joined me at her bedside, gently trying to coax me to do what I could not bear to do: leave her for the last time. And just a few hours before he died in hospital, I stood at his bedside, holding his hand and gently thanking him for all that he had given me. He was an intellectual giant without compare. Politically and intellectually, he influenced me more than any other living person.”

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Which Europe?

Church in Südtirol Escaping the pseudo-olympian non-sense this summer was a privilege. Living in East London we were keen to have as much of clear space as possible between ourselves and the polluted commercial extravaganza overtaking the landscape. So we aimed for the mountains, and that country blessed with so many precious gifts, Italy.

If one was to believe the reactionary “popular” press over here, the Europhone Union is in trouble, and far worse than some others. It’s a long way from our corner of the woods to the (now) Italian Tirol, over 800 klicks across Northern France, Belgium, Central and Southern Germany, Austria and, finally, Northern Italy. This gave us a snapshot of realities over those regions. The first observation is that the state of roads has not improved in recent years, always poor in Belgium – awful traffic and driving behaviour – as the high quality of French and German motorways has suffered under so-called austerity measures, as administrations cut corners (and eventually increase costs!) Austria remains impeccable, and petrol there is somewhat cheaper than elsewhere, for reasons we have not identified. British banks (yes, the ones we pumped up and are still pumping up with hard-earned cash, we resident taxpayers) charge an outrageous £7 to 8 fee/commission for “foreign exchange” (how about that for another non-sense?) so we garnished the Euro account to avoid such. The second one is that the German automobile industry rules ok. Belgian, French, Italian, and of course, German, high income professionals (we guessed) drive Audi’s, Mercedes’ and BMW’s – and the occasional Porsche’s – as if there was no crisis. Those cars are high end models, and not few of them expensive fuel-guzzling SUV’s. I have not mentioned British number plates, but more of the same for those of HM’s subjects who dare point their noses out there in the crisis-ravaged Union!

The third, concomitant, observation, is that austerity and neo-liberal cuts in public services, and its unavoidable consequences for economic growth, have not affected people – the citizens of the Union – equally, an obvious truth already noted over here. The upper middle class – employed, fee-earning, and well-endowed in assets and insurance policies (and German cars), is doing just fine. Of course, there are huge regional, and national, disparities, as in Britain. Southern Germany, Austria and that part of Northern Italy we visited, are doing well. Like the weather, hardship is not fairly apportioned. We enjoyed a cool and occasionally wet climate in Südtirol, while other parts of the country were sweltering in African drought. So for employment and the economy. The Alto-Adige region is one of the most prosperous in Italy, indeed, in Europe. The well-managed mix of sustainable agriculture, light industries and tourism, has done miracles there. Young people and families stay in their villages, because there is work, good public services, and attractive, affordable housing, which in turn makes a stay attractive, affordable and healthy for visitors like us, who then spend their “devaluated” Euros with glee. Südtirol, that most beautiful haven of nature, which has a privileged status of autonomy in the Italian constitution, is a model of careful husbandry of natural resources, with still a balance between traditional activities and tourism. This is a far cry from the destruction of mountains, habitat and traditional farming, wrecked over the French Alps by the greed of winter sports entrepreneurs. We wished this model – the sustainable mix – was more wide-spread over Europe (more about this on my post about the Messner Mountain Museum in Brüneck).

On the way back, in reverse, through Austria, Southern Germany, Eastern France and finally the Northern Atlantic seaboard, those observations were confirmed. We totalled another 1,000 klicks, through industrial, farming and urban landscapes, stopping twice in France and visiting my childhood town (unchanged after all those years). Europe is still, by world standards, prosperous, and its citizens well aware of the onslaught on their rights and liberties. But there is hope. The tide is turning against the conservative anti-social policies that have taken us to this situation: sacrificing our young on the altar of so-called economic realities, feeding Moloch, in fact, the inept dogma of privatisation and public services roll-back that have proven disastrous everywhere in the world for the past 40 years, except for the exceptionally wealthy!

In the meantime, the German industrial juggernaut rolls on, the Chinese – some Chinese – are getting richer, and keep lending – thank you – to the citizens and banks, and government, of the US of A, and of course, “we” had the Olympic Games for 2012 (and as local tax payers, are waiting for the bill thereof). All is well.