Robert Brenner, The Economics of Global Turbulence (New Left Review, No.229, May/June 1998). Paperback, 264pp, £8.00.
Reviewed by Bernard H. Moss
CAPITALIST CRISIS theory has been the black hole of Marxism. Historical materialism, which posits a deepening contradiction between forces and relations of production, would seem to require – it may not – an articulated explanation of cyclical and secular crisis in the capitalist system. Marx devoted his greatest intellectual effort to such an explanation in Capital, but the result has not been compelling. Capital, rarely studied by activists, is honoured more in ritual observance than in practice. It has been reproached for its Hegelianism, its indeterminacy and incompletion, and its abstraction from both real economies and working-class struggles. Capital may provide indispensable tools, but it has not proven a reliable guide, certainly not to Robert Brenner, who is touted by his editor as Marx’s successor.
Brenner is a major Marxist historian best known for two studies that offer somewhat contradictory approaches to understanding the transition from feudalism to capitalism. He is also a leader of Solidarity in Los Angeles and a member of the editorial board of New Left Review. As an early modern historian who had to learn a whole new range of economic literature, concepts and statistical techniques, Brenner has made an impressive contribution. His explanation of the crisis, which deals only with the leading exporters, the US, Germany and Japan, combines analytic rigour with detailed empirical verification, including invaluable tables and graphs.
He confirms the turn from the long boom that followed World War II to the prolonged downturn that began in the 1960s. From the decline of profitability followed the successive fall-off of investment, technological innovation and productivity, and the depression of wages and conditions. The crisis occurred in the context of a world trade war in which each country tried to shunt off its effects, through currency depreciation, to the others. The US emerged victorious with a fragile recovery in the 1990s due to the depression of wages and conditions and a depreciated currency, a victory bought at the expense of other countries, especially Asians, who have been plunged into real depression.
Brenner rejects Marxist and neo-Marxist explanations for the crisis. He dismisses out of hand the orthodox theory of declining profitability resulting from the rising organic composition of capital – the relatively diminished investment in living labour, which is the ultimate source of profit. He ignores the role of underconsumption, which Keynesians blamed for the great crash of 1929 and which doubtless underlies recent stagnation in Europe. His main target is the neo-Marxian "wage-profit squeeze" school in the US and Britain – David Gordon, Stephen Marglin, Andrew Glyn, et al – and their major works, Segmented Work, Divided Workers: The Historical Transformation of American Labor, The Golden Age and Capitalism Since 1945.
The neo-Marxians have argued with force and historical evidence that long waves of prosperity produce their own gravediggers by strengthening the bargaining power of labour, which then squeezes profitability, producing a crisis. Their argument is not based simply on a calculation of wage increases or mounting strikes, but on the shifting balance of class forces, a complex of demographic, economic, political and social factors, that threatened both capitalist profitability and control. As regards the former, they claim that in the late 1960s, as the result of rising militancy, real wage increases began to outstrip productivity growth, causing a profit squeeze.
Brenner discovers no evidence for a wage-led squeeze in the late 1960s though he admits that working-class pressure may have prevented an early return to profitability in the 1970s. He concedes increased strikes in the late 1960s but finds minimal growth of real wages and no real decline of productivity growth. His major point is the pessimist-realist one – the same made by free traders – that a wage-led profit squeeze cannot last because capitalists will immediately circumvent it by disinvestment from areas of working-class strength to regions of cheap and malleable labour. Like the law of supply and demand, this one is only a tendency in the long run whereas a lot can happen in labour’s favour, including political transformation, in the shorter term.
Brenner looks for an explanation of declining profitability in increased trade competition, especially the German and Japanese challenge to the US. The newcomers challenged incumbent producers with a combination of cheaper labour, advanced technology, and bank- or government-led co-ordination. Why export losses for the US and gains for others should lead to a general decline in profits is not obvious. Decline results, Brenner argues, because high cost incumbent firms stay in business, selling at competitive prices, to recuperate sunken costs despite reduced profit margins, a persistence which lowers average profits in the line and among capitalists generally.
This is a very tenuous theory to hang a long depression on. It seems to assume a perfectly competitive world market for investment, yet percentage returns in Japan until recently remained almost double those in Germany and the US. Why would not the greater profitability of Japanese manufacturers, sustained by a higher rate of labour exploitation, the difference between productivity and wage growth, compensate for losses in the US? One could also question whether an overall profit decline could result from an export sector that only represented 5% of US GDP in the 1960s. Increased international competition undoubtedly put pressure on US profits, eliminating monopoly rents, but how can it explain the global decline? It merely exposes underlying contradictions in the system.
It is these contradictions, class struggle in the wider sense, that are missing from Brenner’s account. The working class is presented only as victim, whose efforts at redress are broken by disinvestment and employer repression. Brenner is correct to point out that the leading edge of labour that emerged from World War II was smashed in 1947-48 with the onset of the Cold War. Precious little remained of radical labour in the US, West Germany and Japan. The road thereafter for organised labour in the US was downhill. The sixties saw a resurgence of strikes everywhere, especially in Britain, France and Italy – countries not discussed by Brenner – where they extended gains for workers, applied pressure on profits and also inspired projects for socialist alternatives.
This labour resurgence was supported by the consolidation of the welfare state by Lyndon Johnson’s Great Society in the US, the rise of the Labour Left in Britain, and centre-left governments in Germany, France and Italy. The balance of forces was shifting against capital, which starting with the Nixon administration undertook a counter-offensive. This was manifested in the rejection of Keynesianism for Friedmanite monetarism, the floating of the US dollar and the warning issued by the Trilateral Commission against excessive democracy in capitalist states. As the clash between wages and profits intensified, the left proposed non-capitalist alternatives: the Alternative Economic Strategy in Britain, the Common Programme in France and – more dubiously – the Historic Compromise in Italy. These alternatives were smashed not by competition in the workplace, as Brenner would have it, but in the national political and electoral arena.
Brenner’s analysis has more in common with that of the monetarists and capitalist globalisers than with that of the left. His explanation of crisis relies on the stickiness of fixed capital investment. He blames the welfare state for helping to preserve old investment, thereby retarding reallocation to the new and more profitable. He also suggests, contrary to present expectations, that the US after its long and profound shake-out of labour may be on the way from a fragile recovery to a long-wave boom, as though the unprecedented immiseration of the working class that resulted could not have any long-term consequences. Brenner has come a long way from Marxist thinking, but his analysis, in its neglect of national and labour politics, is consistent with the practices of the two organisations, one academic the other militant, to which he belongs.
Alberto Arregui, Marisol Bengoa, Koldo Usín, Javier Jimeno, Euskadi: Autodeterminación y Socialismo. Preface by Javier Madrazo. Emancipación, 1997. Paperback, 160pp.
Reviewed by John Sullivan
FEW BOOKS written by Trotskyists have a preface by a Communist Party leader, in this case Javier Madrazo, the coordinator in the Basque country of Izquierda Unida (IU), the electoral coalition headed by the Communist Party. The authors are IU activists and supporters of Nuevo Claridad, a group which originated in the international tendency whose British affiliate is Socialist Appeal, but now has no international affiliations. The book argues for a rejection of terrorism by both ETA and the Spanish State, and demands that IU breaks its alliances with bourgeois parties. The authors reject nationalism, while they defend the right to national self determination.
Santiago Carrillo, the Communist Party’s former General Secretary, almost destroyed the Communist Party in the Basque country, which had been one of its main strongholds. The party began to fall apart in 1981 and was almost defunct when Carrillo’s remaining supporters abandoned it for the Socialist Party (PSOE) in the late 1980s. Madrazo, who was too young to be blamed for those disasters, has presided over a modest revival of his party’s fortunes. IU has been more successful in attracting independents in the Basque country than elsewhere. Madrazo’s willingness to cooperate with independent Marxists, all of whom were seasoned militants when he was still at school, shows a confidence and tolerance which is unusual in the Communist Party tradition.
The authors are surely right to work within IU, as it is the only game in town. They were all leading PSOE and UGT activists in the 1970s, but were expelled once the González leadership consolidated and felt able to throw out the Marxists. The Nuevo Claridad comrades obviously do not wish to form a small group divorced from the workers’ movement.
The book argues that IU should direct its appeal both to workers who identify with Basque nationalism and to those who oppose it, generally from a Spanish nationalist perspective. That may seem glaringly obvious but it is a heretical view in Euskadi, where most people choose one side or the other. The authors criticise IU for participating in a bourgeois Popular Front "Peace Alliance" which refuses to condemn state terrorism. However, since this book was written, IU’s position has shifted towards a more positive attitude to a negotiated end to ETA’s activities.
The book includes a generally accurate short history of ETA. However, one of its most important episodes – ETA-VI’s move to Trotskyism – is dismissed in twenty words. Of course, ETA-VI joined the "wrong" (United Secretariat) International, not the one led by Militant, but does that make its history irrelevant?
Mike Marqusee, Anyone But England: Cricket and the National Malaise, Two Heads, 1998. Paperback, 352pp, £9.99; Khalid Mahmood, Eye of the Storm, Vision, 1996. Paperback, 190pp, 352pp, £9.99.
Reviewed by Jonathan Trautman
WHEN I PICKED up Marqusee’s book I expected my interest would last for about the first thirty pages and confirm what I’d always known about the left when it comes to sport – they can’t write about it. Much to my surprise, Anyone But England shows that as well as being insightful some Marxists can be ironic, witty and subtle, something most Marxist writers seem to have abandoned.
This is a book I found very easy to engage with. As cricket has been part of my life on and off for the past eighteen years, I’m familiar with the disputes, the characters and the oddities of the game. Early on Marqusee comes to what I think is the crux of what the book is about. An American just arrived in Britain, Marqusee hangs out with a group of dope smoking public school boys who listen to Test Match Special, and he begins to develop an interest in cricket. He notes how these spaced-out public school boys treated cricket as "an object of affectionate ridicule", and he goes on to say how "cricket seemed like a gentle drama played out on an eternal village green, a realm beyond history and politics". From here starts his discussion about national identity in a world where Britain has been in decline, seen through the prism of cricket.
Various aspects of the game are discussed and personalities are painted in a broader picture. For example, Alec Bedser (a former England player) went on to become one of the founder members of the right-wing Freedom Association. The players who joined the South African rebel tours – Gooch, Boycott and Gatting – admired the white lifestyle in South Africa.
This book avoids pitfalls which others don’t. An example of the latter is Mark Steel’s recent article "Behind Bodyline" in the journal The New Ball. Although quite useful, Steel’s article sees class struggle everywhere – Jardine the establishment man and Larwood the working-class victim/hero. He ends his article by talking about the rabble and the suits and how they view the play from different perspectives and on occasion catch each other’s eye, "in their own way, aware that they are they and we are us". Marqusee seems to realise that this is to all intents and purposes negated in cricket. Whatever the different perspectives people may have, they are united behind the nation and largely accept the culture that comes with it. The main antagonisms for Marqusee are national, like the ball tampering accusations against Pakistan, or English cricket’s attitude to apartheid in South Africa.
Khalid Mahmood was the Pakistani manager during the controversial 1992 tour when among other incidents they were accused of tampering with the ball. Khalid is no radical. Educated at Harvard and a member of the Pakistani establishment, he found John Major to be "a very decent man", and he is a big fan of Kerry Packer who he thinks deserves a knighthood for his contribution to cricket. Despite this, Eye of the Storm is quite a useful book. Khalid gives a short history of the rocky relationship between England and Pakistan in test cricket. He then goes on to the incidents of the 1992 tour and shows how the Pakistani team were treated by the British media and the cricketing establishment. The media constantly accused the Pakistanis of cheating or not playing in the spirit of the game. Khalid serves up a couple of juicy instances where England were not playing in the "spirit" of the game, which funnily enough went unreported over here. The chapter "Silence of the Lambs" deals with the whole ball tampering affair, and Khalid shows that the role of the umpires in handling the situation was not merely inept but might well have been politically motivated.
Both books are reasonably priced and are recommended.