On Budget Eve: Deflation & The Limits to Privatised Keynesianism

 

NAA- M3130, 81
NAA- M3130, 81

Tuesday 3rd May will see the first budget of the Turnbull-Morrison Coalition government. It is also the date of the Reserve Bank’s next monetary policy decision. So it is an important day for fiscal and monetary policy. Like most people (including the well paid opinion-makers of the commentariat) I have no idea what the budget will contain. It is unlikely that the government will be able to break the impasse facing the state: a general tendency of slowing growth , rising state debt and a pool of sullen and largely inchoate opposition amongst the population to various attempts by the state to address both. The picture is complex. On this blog I have written a lot about ‘Capital’s Plan A’– the stimulation of the economy via infrastructure spending to be financed in part by cuts to social reproduction and through the ‘recycling’ (read privatisation or leasing) of state owned assets. This plan, at a Federal level is stalled, due in part to the 2015 defeat of the Qld LNP government on the question of leasing power assets. However the recent Victorian state budget is built around increased infrastructure spending financed by the leasing of a port and a higher level of debt[i]. Preceding the Federal budget there has been a warning from JPMorgan and from Moody’s about the potential for Australia to lose its AAA rating, projections from Deloitte about the size of the increase in both debt and deficit and,what surprised everyone, the release by the Australian Bureau of Statistics of the latest CPI figures showing .2% deflation in the last quarter (Australian Bureau of Statistics 2016d, Greber 2016, Janda 2016, Martin 2016). It is this last point I want to look at. What does this latest news tell us about the both the direction of capital accumulation and the tensions and fault-lines of antagonism that constitute capitalist society in Australia?

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Another Day in The Sun: The National Accounts, Growth and Malfunction

australia____land_of_tomorrow_poster
NAA: A434, 1949/3/21685

 

 

The work of the critique of political economy is a thankless task: especially when reality comes and fucks up your theorising. Over the last year on this blog I have been trying to address a number of interrelated phenomena: the end of the mining boom as a symptom of the global recession, rising state debt and the difficulties this presents to facilitating social reproduction and the failure of the Government to implement ‘Plan A’ – the stimulation of the economy via infrastructure spending financed by asset sales and cuts to services. Then the Australian Bureau of Statistics comes along and publishes the National Accounts which detail higher than predicted growth rates for the last quarter: 0.7% trend and 0.6% seasonally adjusted. Calendar year growth is then up to 3.0% rather than the forecasted 2.5% (Scutt 2016).

This would indicated healthy growth rather than malfunctioning – and this is despite the continual end of the mining boom which was the engine that drove capital accumulation in Australia for the last two decades. And GDP growth is, I would attest, a mystified indicator of profitability. If the economy is growing it is because firms are investing; and they are investing because of a sufficient level of profit today and expectations of them tomorrow. So much for declining profitability then, so much for over-accumulation too, so much for looming crisis…

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Australia you’re standing in it part 2: Debt & Social Reproduction

mq1

In part two of Australia You’re Standing In It I’m going to attempt analyse the relationships between state debt and social reproduction. In particular I want to argue that rising debts and continuing deficits provide a challenge to how social reproduction is carried out by the state. This directly flows on from the previous chapter as the core of my argument is that the rising debt and deficit of the Australian state are at least in part a product of the global stagnation of capital accumulation. This manifests in the drop in revenue caused by the winding down of the mining boom.

 

I want to emphasise the stakes of my argument. In mainstream debates in Australia debt is most often framed in one of the following two ways. For the Right debt is a cause, if not the cause, of economic stagnation and crisis. For the Left Australia’s debt levels are unproblematic and the panic over debt is a production of the fetid imagination of the neoliberals and/or a cynical manoeuvre to justify the sort of policies the Right always carry in their back pockets. Here I wish to reject both these arguments. Debt is not the cause of crisis but a particular manifestation or expression of it; but it is a manifestation that has its own contradictions. And debt levels whilst overblown by the Right do present a serious challenge to the state’s abilities to finance and carry out social reproduction. Also a new revelation for me, one often ignored in the debates about debt, but one that is obvious when you think about it, is the role that sovereign debt in the form of state bonds plays in the financial markets. The debate over state debt is also always a debate about securing the value and the profits generated by financial assets.

 

A limitation of my investigation so far is that since my methodology looks at the movements of capital from ‘above’ there is the risk that I can slip into a form of presentation that ignores the class struggle that goes on ‘below’ and throughout capitalism. There is a danger, from Marx on, that our analysis can be too ‘objective’ and not grasp the subjective role struggle plays in the corresponding unfolding of the dynamics of capitalism(Shortall 1994). (Perhaps it is possible to see class struggle as the struggle of humanity against its entrapment in the objective categories of capitalism). My challenge is to express how the ways the state funds social reproduction and the shapes social reproduction take are products and sites of class struggle. Spiralling state debt is an expression of our power – even if it is latent. We need to enlarge our understanding of class struggle beyond a model that sees it primarily happening within the confrontation between labour and capital in the work-place proper, that is move beyond a ‘factory-office-farm’ model (Caffentzis 2013, 242). We need to understand the complex and multifaceted struggles that happen across all of society.

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Short notes on the failures of Capital’s Plan A

Far from being the essence of socialism, planning is a typical feature of capital as it reaches hegemonic maturity (Negri 2014, 295).

Last year I argued here on this blog that capital in Australia had a ‘Plan A’ to deal with the end of the mining boom: a vast wave of investment in infrastructure.[i] My core argument was that this plan would see the rise of an ‘Infrastructure State’ (in the tradition of Negri’s (2005) ‘Planner’ and ‘Crisis’ states) that would enable and often fund or help finance infrastructure spending, shift some of the costs of social reproduction off its books and onto the wage and into the home, and work to dissolve points of opposition. There is a clear alignment between organisations such as the Business Council of Australia and Federal and state governments. Indeed since writing the original piece the volume of arguments for just such a plan have increased. As the government argued in the Mid-Year Economic and Financial Outlook:

 A key component of this Strategy is the continued roll out of over $50 billion of infrastructure investment. These investments have already begun and include major

projects across the nation that will reduce congestion, improve productivity and create jobs. The Government’s investment in infrastructure also includes incentives of

$5 billion through the Asset Recycling Initiative, which will catalyse over $38 billion in new infrastructure. In total, the Infrastructure Growth Package will lead to over $125 billion of new productive infrastructure over the next decade.

(Commonwealth of Australia 2014b, 11)

On a global level both the G20 and the IMF are looking to infrastructure as the solution to flagging demand (International Monetary Fund 2014 , G20 2013). The secretary of the Treasury summarised the logic for infrastructure spending committed to at the Brisbane G20 Leaders Meeting as follows:

G20 members focussed on supporting investment in infrastructure as a means of managing  the short and longer-term challenges of promoting growth while undertaking fiscal  repair. In this regard, they noted the benefits of investing in expenditure are threefold:

  • it supports aggregate demand during construction;

  • if done well, it augments the economy’s supply capacity and boosts                         productivity for the long term; and

  • if priced appropriately, it may even help the fiscal position in the     medium term (Martin Parkinson 2014, 7)

However it now seems that governments on both Federal and state levels has significantly failed to implement this plan – despite the above claims in the MYEFO.[ii] In August it was reported that none of the major planned infrastructure projects which were meant have been started within one year of the Coalition’s election were ‘shovel ready’(Duyn 2014).

How much is this due to the crisis of political authority due to the antipolitical condition of the present (to draw on the work of Left Flank)? How much is this due to the struggle of the class – even if this takes most often sullen and silent forms (to draw on the theoretical legacy of operaismo)?

 

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Contradictions of Accumulation in Australia

Edited 25/2/14
In December 2013 I received criticism via twitter from ‪@redlizthompson‬‬ and ‪@Mitropoulos_A‬‬ for my participation in Historical Materialism Australasia 2013. Readers should obviously read this criticism directly if interested but to summarize it runs as follows: since I participated in the conference which was subject to a withdrawal due to the presence of speakers from Solidarity an organization whose National Committee had recently released an internal statement supporting the Socialist Workers Party UK’s cover-up of rape and sexualized violence then I either directly supported the behavior of the SWP/Solidarity or at least my public quietism on the question meant that in practice I supported it whatever my actual thoughts. The absence of a public statement critiquing the SWP/Solidarity effectively meant public support.

Also I was criticized for having friendships and political collaborations with then current members of Solidarity.

I am in two minds about this assertion about the necessity for a public statement. On one hand I find it odd. The vast majority of my political thoughts and opinions are developed with and shared within a very small network of close comrades and friends. The idea of making some general statement to some kind of public seems weird at best. My written work that does exist on the internet is most often an attempt to follow a very specific project or intervene in specific debates largely focused on Qld. In the past I certainly commented on everything and anything but I have tried to reign in this practice as I slowly realized I was often commenting on things I knew little about.

However supporters of the call to withdraw from HM have pointed out that public silence on questions of sexualized violence reproduces the split between public and private that is so bound up as part of the gender relations of the society we live in. That’s a hard point to argue against and I can’t.

Also when I posted the original post bellow I referenced the HM debated but made no statement of my thoughts. This I think was a mistake as the post itself is a public artifact and I should have taken the time to clarify my position on the issues. I don’t believe however that such a need to address the public applies to other HM participants on a whole.
So my thoughts:

• The behavior of the SWP was appalling. It is more evidence for that decades old feminist argument that Left organizations not only continue the patterns of violence and inequality around gender which is part of broader society but organizational cultures often entrench power-relations that facilitate abuse. The following ‘crisis’ is more evidence of the need for feminism to be an integral part of any revolutionary project.
• The statement of Solidarity was horrible and shows how loyalty to a political brand can be so destructive and pathetic
• I don’t and didn’t agree with the withdrawal– It seemed off-target. If the problem was Solidarity why not call for a boycott of working with them in all forums until certain criteria were met? Why call for a boycott of conference in which they were participants but no other spaces they work in? On the basis of these objections I didn’t participate in the boycott.
• Finally I expressed my critique of Solidarity’s statement to my friends and comrades that were at the time members. I didn’t make my friendship with them conditional on them doing anything about what I said. Nor should I have.

Below is the (edited) text of the paper I presented at Historical Materialism Australasia. This year’s conference happened in the context of a serious disagreement around sexual violence prompted in part by the SWP crisis. You can find some material on this here and here.
The below paper is fairly limited and suffers from conceptual and structural problems. However in the spirit of With Sober Senses I am happy to make it available as it functions both as a marker of the progress of my research and also as a fairly functional summary of my work so far.
In the discussion three major issues came out for me, and I thank those who contributed.
1. So far I still conceive of the public service/ state provision of reproduction as being too separate from capital accumulation proper. They are deeply and complexly intermeshed on the molecular and molar level.
2. More work is needed to further investigated how capital ‘thinks’ on the level of society
3. This kind of research needs to be careful that it doesn’t collapse into being a Marxian plan for a better capitalism – there is a tendency to do just that.

For capital there is no problem: restructuring of the system is the condition for the stabilization of the regime, and vice-versa…The interests of the proletariat, are quite the opposite. The proletariat aims at a critical seizure of the nexus between stabilization and restructuring, in order then to attack it.(Negri, 2005, p. 232)

So what I want to do here is fairly simple: I want to trace out what I think are some of the major barriers of capital accumulation in Australia in our present conjuncture and I will do so with a pretty broad brush – apologies to the details and the devils they may contain. I do so because I think these barriers are some of the deep fault-lines of class antagonism in Australia. This will be a summary of the research I have been doing over the first half of this year for the blog With Sober Senses.

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Incomes, Inequality and Class Composition – ( still a bit drafty)

Firstly I would like to apologise to those of you who read my blog for the long time it has been since my last post. It is a difficulty finding time to even read systematically at the moment let alone write. I don’t mean this as just a simple whinge –because I think that it is symptomatic of one of the problems afflicting the possibility of class organising right now – we need the time in our lives to think about what is happening to time in our lives. More broadly, unlike perhaps workers in much of Europe who face the impact of rising unemployment, workers in Australia labour under a condition of too much labour – at least at the moment (though of course any amount of wage-labour is really too much wage-labour). It is too early to tell if the proposed closure of the Ford plant and the entry into voluntary administration of Swann Services  are anomalies and growth will continue or signs that winter is coming (since I have written this lines the first time it was become far more clear that with the decline of  the rate of growth of industrial production in China that the mining boom, which has underscored growth in Australia for 20 years, is ending).  Marx quotes the Congress of the International Working Men’s Association ‘ We declare that the limitation of the working day is a preliminary condition without which all further attempts at improvement and emancipation must prove abortive…’(Marx 1990, 415). Now I don’t know if the IWMA was thinking about having the time to write and discuss but perhaps they were. I must admit that I am not sure how an effort like this blog actually fits into the process of class recomposition because I am not sure what the role of ‘ideas’ really has in the messy processes of struggle. I am sure that it has some role but what that is I am confused about (and welcome comments and debate.) But if the attempts to theorise the world we live do play some part in the self-emancipation of the class then it is clear that the lack of time we have to engage in this activity (snatched between moments of work, time with those we love, socialising and resting, acts of political militancy) is contributing to just how outgunned we are in relation to capital. Reading The Poorer Nations (Prashad 2012) I am struck by the huge size and financial capacity of the intellectual apparatus capital has to think, theorise and popularise its understand of the world. Even in Australia it is a struggle to find the time to read the reports that come out of the Productivity Commission, the various business groups and economic think tanks let along attempt to think them through and write about them. (Thus my outrage that the Qld government wasn’t going to release the 1000 page Queensland Commission of Audit quickly turns to dread when they decide to – ‘oh my god I have to read a 1000 page report!’)

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Podcast of ‘Australia: The Lucky Country? Capitalism and its Discontents’from the Brisbane Free University

In mid-December 2012 I spoke as part of a panel entitled ‘Australia: The Lucky Country? Capitalism and its Discontents’ along with Kristen Lyons as part of the Brisbane Free University. A  podcast can be found here. It was a great night and BFU is a wonderful initiative. Brisbane Free Uni