Ping Pong 49; Empires of US
In the horror and idiocy of national socialism, it is very easy to forget where and why national governments arose. We look now, cocooned in the safety of hindsight at the rise of Hitler and assume both that it could never happen again (or happen here), and that it was a one off. One forgets that in Britain too there was a national government (although not a Nazi one), and in America there was also a command economy. Nationalism, and the idea of the Nation were very much the idea of the times (the 1930’s), an idea which sought to answer the problems of recession and depression. This move towards the national is rather complex, and in these days of ‘British jobs for British workers’ (and American steel for Americans) it is worth considering in detail once again.
Nations exist as a point of leverage or perhaps a texture within the otherwise smooth surface of capitalism. So that left to themselves money and labour exchanges really do not need nations. Nations therefore start at a disadvantage. This is why Marx does into consider them at all, and classic economics ignores them. However it does so at its own peril, for nations can perturb the market in four basic directions, by law, power, democracy, and the Nation. Each of these elements need to be thought through in turn, in order that one fully understand the nationalist ‘turn’ which depressions (then and now) appear to usher in.
The Nation is the heir of the king. They take up the role of the mediaeval king therefore, to impose local conditions and local rules. The aim of such rules is to essentially personalise the impersonal. The free market is in a sense made acceptable, by being forced to actually operate differently in each state. This difference matters, in that it is surely the power of such markets that they are able to be owned differently by different communities. Every nation therefore feels that they have a hold on or a stake in the market. That is, that the market is somehow theirs (after all it responds to their conditions and their demands).
This ownership is nothing incidental about the market. The very great economic historian Polayani noted, that in fact the free market is in a very perilous position without state help. Markets therefore simply do not lead to a reduction in regulation. On the contrary they lead to an increase in the regulations to protect the market which they hold as self evident. Local customs are therefore modified or adapted to allow the supposedly ‘natural’ market to function. The feeling of ownership within a state, in a sense, is a very real thing. In conjuring up a market within themselves, a state allows for the presence of something beyond it. However the rights of that beyond, that element of the market, is bounded by the authority of the state itself: In that if it changes the regulations, the market will collapse. Markets therefore look to and desperately need states (i.e. unified authorities capable of defining rules) to define them and ensure that they are free in the first place.
Nations therefore protect the market in the good times, but also (and even more) the bad. But this relationship is problematic. The nation always creates the market as something ‘other’ within it. The Market will, by its transcending nature, always claim that it strains against nations. That is, that it should somehow be freed from them, and that if it was, it would be perfect. It ignores then the fact that it is the act of the nations imposing regulations that actually keeps the market functioning. In the good times therefore, the market is at best an ungracious (and demanding) guest in the nation. It moans and uses and is needy as it asserts its independence. This ingratitude in a sense has come back once again to haunt us. Its effect is after all to give the financial market (or any free market) the delusion that they are somehow bigger and better than any nation. They therefore can defy the gravity of actual money and real world wealth (which are the parameters within which nations live). This defiance then leads to the delusion that selling the same high risk product twice actually makes more money. Any nation (and almost any politician if they had looked at the product) would have known the lie of this. The result is of course the ruin of the system as the market - in accepting the delusion of the simple freedom, and asserting it as a right (remember the bankers who used to lecture us all) -break themselves in their own lack of regulation.
At such times of course the power of the state to take the reins once again, and create within it the parameters for whatever markets will follow on now, becomes paramount. Only the state can do this, as only the state can conjure up the market as ‘other’. The problem always is of course, that the state, once the markets have collapsed, realizes its own power, and wants to create not the transcendental uncomfortable free market as ‘something other’ to their power, but rather to create a nice little ‘snug’ market - so convenient to the state, and so bad at relating to the wider world.
The second meeting point of state and market, lies in power and the real difference of power between the two. When the market is in the ascendant, it will invariably claim to be calling all the shots. That is, it will be the ultimate grounding place for a state’s finance. If the market ‘decides’ that the state is not worth anything then that state is ruined. And yet it is not so simple. It is clear that the real problem which we are in now, started because there were certain states (particularly America) that the entire system could not afford to limit. (In the same way that states cannot afford to let banks collapse). The system therefore, felt that it had to carry on lending to America, and that there was no choice. Hence there seeped into the system, a wonderful double standard. Small countries and small debts lead to ruin. But large countries and large debts lead to a redefining of the system.
Essentially therefore we are caught in a deep confusion of powers. The Market and states claim to have different powers (and operate in different manners). But in effect their ability to act or to respond to the world is so caught up within one another, that they form a self sufficient dyad. Each responds to the other, and cannot easily function without it. Individuals (and small states) can therefore be ruined, but any major collapse which would question the entire relationship between the two partners cannot be countenanced. At such times of ruin however (if they come) the state and the bankers pull apart radically in the blame game. Or rather, the state always seeks to absolve itself from any responsibility for the ruin. What destroyed the system was of course the greed that the promise of unlimited money opened out from. This greed was a collective human emotion. It was not the ‘fault’ of the state or the bankers as such. However as no human community likes to admit that they have been greedy and foolish, both state and bankers end up being blamed: The state for lack of control, the bankers for encouraging greed. However, of these two paeans it is clear that the shit is more likely to stick to the latter. Bankers (and not regulators) are made to apologize for our own greed. The problem then of course is that any system that succeeds the old, will be made in the light of such an apology. Our problem is how will our loathing of bankers (as expressers of our own greed) affect the system which we allow to come into being once the initial hullabaloo is over.
The third meeting of point of state and market lies within democracy. Democracy has always held itself up to be an alternative to the free market. One chooses therefore, ones politicians in a system freed from money, and according to political freedom (and not economic freedom). Political parties then articulate in a ‘pure’ form different takes on the economic world (socialist or conservative). It is however of course, one of the paradoxes of our system that this freedom was always an illusion. Political parties only function because of the money given to them by big donors. Money was therefore everywhere within the system, and the independence of finance and state was problematic to say the least.
However the pretence of this independence gives the state considerable power. Political parties will appeal to their own independence - that is, they will appeal to the presence of a supposed majority of innocent voters, whom they represent. In this name of the (far from) innocent majority, they will claim the right to define the parameters within which markets can function. But also at such times as this, the ‘presence’ of the silent majority itself becomes almost an economic power in its own right. The state claims the right to borrow in the name of this silent majority, and so even though it was individual acts of borrowing by just this silent majority (wearing a different hat – the punter) that got us in the problem in the first place. Economic democracy rekindles both the virtue and the power of a people. ‘They’ become the virtuous guarantors of what is to follow (and not the wreckers of the last system).
However this little piece of hypocrisy is of course playing with fire. To absolve and to canonise a people in the name of a certain policy is one thing. What happens if that policy does not work, (and it well might not) is another. The sainted people of course will neither give up their beatitude nor be willing martyrs. The result is then, that if the system that originally canonised them falters, they are very likely to look for others who promise them this elated position. It is after all, never stable to create a people only in a single act of absolution. They will only feel their power in their innocence (poor us), and demand that what follows allows for that fact (it is us, we are the ones that are suffering), and all the more so when it was actually our greed that created the problem in the first place.
To wield this innocence, or collective ‘unguilt’ and to wield it within the other powers discussed above. Politicians call upon the daemon of a nation. A nation is the expression of the power of a state to defy and yet define the market, and is so in the same breath as it asserts the innocence of the citizens of that state. It is therefore in the name of this these powers, that the state seeks to create a system which reflects and respects the rights of the bloc of innocent people which fall under its scope (its citizens). The danger of course, is that this system is totally self contained, and self referential. The constituency that any ‘national’ politician needs to appeal to, is by definition limited by their democratic mandate. There might therefore be other innocents beyond (or even within) the system, but in the scheme of things ‘They’ (and whatever innocence they might profess) do not really matter (much). What matters is the powers at hand and the creation of a system to reflect the expectations of that power.
The problem of course is that once one starts to confuse (and at times such as this how can one not?) political and economic powers in the name of the nation, it becomes rather difficult to draw meaningful divides between actions which one will and will not take. One might therefore start with good intentions. One might really mean to respect other peoples, and keep the dreams of community alive. And yet the logic of allowing a people their power to intervene (and demand their own rights) always risks becoming unstoppable. The slogan ‘British jobs for British workers,’ slips from relatively innocent blind selfishness into somewhere rather darker and more troublesome. To conjure up a people and an agenda out of a supposed innocence (which never was) is to play not so much with tigers, but dragons. All the more so, because in meddling with finance, a politician ups the stakes of what is involved in running a country. They become caught up in the blind chance of finance, and ruined or made by it. They are therefore pushed up against a wall, and forced to gamble for high stakes, by the logic of their own move. One then has to hope that they do not resort to increasingly desperate measures to save their own skins. So it might be that doing nothing is less risky that doing something but that does not mean that either is better…
A Depression in whatever form, might be defined as a recession so bad that it forces the economic system to be recast in the light of the nations that allowed for the system in the first place. One knows it is very bad therefore, when states assume that they must muscle in and take up the reins of economic power once again. This move by itself might be innocent enough, but it opens out onto a troublesome territory, marked by two poles. On the one hand the move turn politicians from small scale to large scale gamblers, with an entire nation’s wealth at stake. On the other, it creates the image of an innocent people who have been wronged and demand to be righted. The problem that all national government whatever their initial hues, and wherever they end up facing, is how to stop these two contrasting elements, the gamble and the wounded people, cross breeding, and creating ever greater and darker monsters. - Such as national socialism.
