Re: GLOBAL KEYNESIANISM

Aah ....  I hope I'll be permitted to briefly intervene for on this global
Keynesianism I totally agree with what Andrew Wayne Austin writes today:
>
>I support social welfare measures not out of a desire to patch capitalism
>up but to help the worst off among us. I do not believe people should be
>impoverished under any circumstances. I do not desire that capitalism be
>the mode of production under which we live, therefore any reformist
>desires I express exist within a larger desire that any system based on
>narrow class desires be replaced by a democratic system based on broad
>social needs

For wasn't that exactly what I pleaded for on 1/12./1999 under the heading
`Utopia and World Party'? And to which the very same Andrew Wayne Austin - I
recall - then wrote that I was walking around in day-dreams and being
totally irrelevant anyway as we should work for revolution now instead of
instituting half-backed global social welfare measures because `capitalism'
would never mend its evil ways.

Paul Riesz, look at my 1/12/99 and 2/12/1999 postings and you'll see I
support your noble intentions.

However, I have doubts about the notion of global Keynesianism, for to
briefly pursue Andrew Wayne Austen again:
>
>Taking a realist perspective,
>capitalism has never been the capitalism of market ideology. Capitalism
>has been about genocide, slavery, racism, state oppression, etc.

`Never' is a very long time but for the 20 th century this is largely true -
albeit, capitalism in the 20 th century has not been primarily about all the
bad things above but primarily about war and arming for war. It's strange
but this is a thing which WST almost habitually overlooks, and that in spite
of the fact that something like 130 million people were killed in wars in
the 20 th century. The 20 th century has been a century of wars but many
WST-theoreticians act as if war is, well, a thing of the superstructure and
has no impact on the economy at all. Maybe I could say cynically because,
well, most of them have the good luck they're from one of the very few
countries which was not bombed, occupied, plundered, or burned to the ground
by some foreign army in the twentieth century.

And so by extension has Keynesianism been - I'm not quite sure whether I'm
stating something totally obvious here or something which is new to readers
of this list, but Keynesianism resulted from the exponential growth of
government expenditures and government investment in industry and even more
on agriculture in - first and therefore crucially - World War I and then
again World War II. Its spiritual fathers are, I often feel, rather British
World War I Prime Minister Lloyd George, Walther Rathenau (German minister
of armament in World War I) and, last but not least, the sinister figure of
General Feldmarschall Erich Ludendorff and for post- World War II
Keynesianism maybe Albert Speer rather than Lord Keynes

Post World War II Keynesianism and `Keynesianist' programs like the `New
Deal' or, say, Lloyd George's globally first Keynesianist party-program `We
can conquer unemployment (1929) - in which Keynes was directly involved -
can simply not be imagined without World War I and World War II. And its
experience of the state guiding production, fixing prices, allocating labor
and putting up new industries, leading to a dwindling of the, say, 2.1
million British unemployed in 1939 to zero in 1941 - And, again, the
doubling, tripling or quadrupling of production within two years in almost
all states through state intervention in World War I (even Italy  quadrupled
its steel-production from 1915 to 1918, the only state which remained
staunchly non-`Keynesian' in World War I was - really as you might expect of
course from cheery old KK-ania with its proverbial good-humored sleaze -
Austria Hungary.) And then again the explosive growth of production in World
War II under state guidance: first in the democracies, then under Albert
Speer also in Nazi-Germany. And indeed Keynes himself who was after all,
first a ranking official at the World War I British treasury, then
negotiator at the Versailles-peace-treaty, and again a key figure at the
World War II treasury again can not be imagined outside of the context of
the world wars. And the  `General Theory' goes very much back on ideas
developed by the Treasury and the Ministry of Munitions during World War I,
just like the adoption of Keynesian budgets - at least in Britain - also
took place during World War II.

Basically - Keynesianism would never have become the established policy
without World War II. And it would probably have failed again  as a policy
without the Korean war - for only the thread of war then induced the
US-congress to vote for an expansion of the Federal Budget. In Europe, of
course, because of the `Red Menace' one did not need such an inducement.

And why not spend on armaments? For these are the ideal field for
Keynesianist projects because:

1.)They do not compete with any existing other product produced by some
other industry or hurt any special interest-group - anything else (even such
an apparently harmless thing as the Tennessee Valley Authority was bitterly
contested at the time) is otherwise always vehemently opposed by somebody -
and that `somebody's special interest' may cost your party funds and votes.

And:

2.)They are ideal for recruiting voters - need I remind the US-readers that
postwar growth in for example California was above all built on armaments,
likewise in Texas, likewise in Arizona and hardly accidentally you will find
most state-supported armament-industries in states and districts which
always vote Republican and talk most often about `the free market'. (But
nothing typical for the US here: e.g. even Communist Parties in Western
Europe were for state-support of shipbuilding industries really mainly
working for the navy because these workers traditionally voted Communist!)

So, Keynesianism has always been closely related to armaments and the
collapse of Keynesianism is also to an important extent related to war -
namely (a point which is largely ignored by both Brenner and his opponent -
in spite of all of them calling themselves, I guess, `anti-imperialistic')
the burgeoning costs of the war in Vietnam, therefore a surplus of dollars
in international circulation and, consequently, an over-valuation of the
dollars. The Nixon-administration could only have done something about this
by drastical tax-raises (and that's impossible and not-discussible in the
US' political system) OR by floating the dollar. So that's what they did:
thus causing a rise in the price of raw materials, thus balance of payment
problems, thus inflation, thus high unemployment etc. etc. There were other
causes for the post-1970 crises but Vietnam was an important one.

Now, that's why I'm a bit skeptical about what may be the practical effects
of Paul Riesz or, indeed, Samir Amin's notion of global Keynesianism.
However much I welcome the  idea in principle. These effects might be very
different ones than what Paul or Samir Amin think. When politicians feel
they need to prime the pump of the economy - and that's undoubtebly going to
happen because even in the present A-phase there are bound to be shorter but
still severe depressions - on an international level - and that's not
unthinkable at all - these funds will go primarily, if not alone, to arms.
And
that is to repeat: because armament attracts votes, because they give
government-contracts to big industries, which - since they are big - are big
financiers of political parties too, and because they hurt nobody (well,
except foreign countries but they don't vote in the US or Europe),
furthermore because the armaments lobby is the most powerful lobby, and
finally because of the sheer force of habit.

That's already happening in fact witnessing the fact that military aircraft,
vehicles, even machine-guns etc. are increasingly being produced by
international consortia - not only because the costs of advanced military
equipment doubles about every ten years - but also because of a kind of
already existing international `spoils'-system in defense contracts. It
works like this: France Aeronautique is going to build the frame of the
`Euro-fighters', Mercedes the engines, Philips electronic equipment etc. -
so that each European country investing in the `Euro-fighter' will have
proportionate spoils for its industry. Again, that is important since big
industry is big money for political parties in Europe too.

And already e.g. there's a conflict between the Ministry of Defense in The
Hague and the EU - because The Hague wants to participate in building the
new US-`stealth' - fighter as it gives the Dutch aviation industry a foot
behind the door of the US-armament-industry. The EU does not want this
though, since this endangers their spoils-system. So, as this case indicates
such consortia already extend to both sides of the Atlantic and they extend
to Japan, Taiwan, South Korea, Israel, Saudi Arabia etc. too. That is all
major capitalist countries are caught in this web of defense-contracts and
international defense consortia. The arms-industry is more international
than any other industry nowadays - oil perhaps excepted.

Thus, the institutional structure is already there and
the lobbies are there too already - if politicians want to put up an
international Keynesian program - and that's very possible - arms are very
likely to be the spearhead, maybe with some cosmetic spending on, say,
science, some general humanitarian aid, and `culture'.

Now need I really remind readers why that might not be such a good thing?
To remind you - at the risk of stating the obvious - experience teaches that
(conventional) arms once there are very likely to be used too.
Most likely against some new `bogeyman' somewhere in the Third World, but
who knows maybe China or what about Russia ? (And Russia adopted a new
strategic doctrine just yesterday that in case of use of conventional
weapons against it, it would no longer shun to use nuclear weapons first).

To quote Andrew Austin and Paul Riesz:

>>Why cant you accept the fact that Keynesianism tries to combine the best
>>features of both systems and to avoid their greatest pitfalls?
>

To which Andrew replied:

>I do not understand how socialism's pitfalls can be avoided by instituting
>capitalism. Socialism's pitfalls require socialist solutions, just as
>capitalism's pitfalls require capitalist solutions.

And the worst too for actually heavy expenses on armament was something
(at least the USSR's but I wouldn't vouch for, say, North Korea or Cuba
either) socialism has/had in common with capitalism. Actually the two
systems
closely resembled each other and sought common solutions to common pitfalls
in many, if not most respects. Yet, to be sure, I wouldn't accept for a
moment the USSR was some bastard form of `capitalism' if the USSR was part
of a `capitalist world system' and most of its structures resembled
capitalist ones. (Let alone I think for North Korea - for which such a
statement IMHO would simply be utter rubbish.)

And that is primarily because we do not (or at least did not) live in a
`capitalist World System' but in a special variant.of a capitalist system,
namely in an `imperialist World System'. It is maybe true we're now changing
into a new variety of capitalism, but imperialism is still far from done
with..

But that would really take me too far for a single e-mail, maybe I'll
elaborate on it later, if there's any interest. .

Best wishes
R.J. Barendse

Sorry to disturb you of course - but that's where delete-buttons are for
aren't they ?.