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Let’s play party-games with Marx

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by Kumar David

Everybody is fed up with news of impending catastrophe; covid that will not go away even in 2022, climate change that threatens to engulf both nature and Homo sapiens by mid-century, broken supply chains, inexorable price inflation and coups by military gorillas on the left and the right. In Lanka endless bickering, racial hatred and after three failed constitutions the pending fourth will be the nastiest on many counts. So my dear countrymen of all nationalities and faiths gird up your loins the worst is still to come. Our regime, licking its putrefying financial sores and the international lacerations it has suffered, is in no position to do anything for the people. So what the hell, let’s relax and take time off from this dismal reality to have fun. Let’s work through some of things Marx said or didn’t say to see what the old codger really meant. This is a lightweight piece, if you are the ponderous polysyllabic intellectual type, turn the page.

Religion

Most controversial and interesting is religion; Marx is much misunderstood. You do not need to be an atheist to be a Marxist; the old boy was not concerned with the spiritual messages of Gautama, Jesus or the Prophet, nor did he scrutinise the economic system in heaven. The famous “Religion is the opium of the people”, as the extracts below shows, says that religion is a tranquiliser which sedates man to accept this oppressive world instead of rising up against it, by promising carnal joys in paradise or exalted awareness after enlightenment.

Here are extracts from the famous text to emphasise this point – strung together with deletions in between.

“Religion is the general theory of this world, its encyclopaedic compendium, its logic in popular form, its spiritual point d’honneur, its enthusiasm, its moral sanction, its solemn complement, and its universal basis of consolation and justification. The struggle against religion is, therefore, indirectly the struggle against a world whose spiritual aroma is religion. Religious suffering is, at one and the same time, the expression of real suffering and a protest against real suffering. Religion is the sigh of the oppressed creature, the heart of a heartless world, the soul of soulless conditions. It is the opium of the people.”

“The abolition of religion as illusory happiness is the demand for their real happiness. To call on people to give up illusions about this condition is a call to end a condition that requires illusions. The criticism of religion is in embryo criticism of the vale of tears of which religion is the halo.”

Base and Superstructure

In early Marx (before the Communist Manifesto) there are references to the material groundings of society (geography, resources and the production-economic systems) as the Base, and to culture, institutions and the state as the Superstructure. It was granted that influences could flow in both directions but in this structural metaphor the Base was presented as dominant. How these bidirectional influences flow cannot be theorised in the abstract but only by concrete and specific analysis. E.g. Eric Hobswam’s Age of Revolution: Europe 1789–1848 and Industry and Empire: From 1750 to the Present Day, or Kumari Jayawardena’s History of the Labour Movement in Ceylon and in many other studies. There you will find concrete explorations of how ‘Base’ and ‘Superstructure’ influence one another.

The Base-Superstructure imagery is oversimplified except in political polemics and Marx never returned to it in his major historical pamphlets of later life. A great weakness of this imagery today is uncertainty about where ethnicity, which by the late Twentieth Century has come to centre stage in many places, stands.

Materialism

Central to Marx’s philosophy are (a) Historical Materialism and (b) like all great post-Enlightenment scientists (Faraday, Darwin, JJ Thompson, Einstein, modern geneticists) Epistemological Materialism. A para on each.

Historical Materialism views the great movements of human history as impelled more by material interests than idealist beliefs. For example colonialism and imperialism transformed the world for raw materials, gold and silver, the slave trade and the export of capital for plantations, railways and mines. The Bible, bringing the heathen to god and spreading European civilisation among the savages followed in the wake of these material benefits. Another example is that big pharmaceutical companies do indeed invent and produce lifesaving drugs, but their raison d’etre is returns to shareholder capital. Unlike a mother’s ideal selfless love for her child, material interests, not idealism, drives class society and history. This I believe is now universally accepted. Historical materialism has come out with a score of 90 out of 100. The ten percent in doubt is because of the enigma of the spread of Islam. One cannot explain it like colonialism, imperialism, the settling of the Americas, South Africa and Australia-NZ, by pointing to material interests as the primary driver. When Islam surged out of Arabia and transformed the Middle East and large chunks of Central Asia the motive seems to have been entirely faith. I don’t know enough, so I keep 10% in reserve.

Epistemological materialism is pretty much the same as science; the solo nigger in the woodpile is an aspect of quantum physics but no more on that. Modern science, broadly speaking, contends that the material world really exists out there independently of our minds and our job is to examine it, experiment with it and find out how it works. The causality of material events is not a thing of our will (Newtonian gravitation, General Relativity, chromosomes, black-holes and mathematics are true or not for all, not just Christians or males). Epistemological materialists though firmly of this view of course grant we don’t

know everything now. But as science moves we will find more and turn up ever more questions – otherwise science and the pursuit of knowledge will halt. The domain of epistemological materialism does not intrude into spiritual territory; that is faith, enlightenment, heaven and hell (except man-made hell on earth). It is not concerned with the questions like “Does God exist?” or “Should you be a believer?” The philosophical domains of science and religion are separate. Richard Dawkins was silly to transgress the line though his critique of intelligent design is justified because the religious lot first transgressed the boundary and intervened in scientific evolution theory.

The Transformation Problem

This is a bit technical but I bet I can make it intelligible to most of you. If you held out this far please don’t switch off now. This is a difficulty in Marxist economics but first contrast modern quantitative economics with Marx. The former is philosophically arid. It’s about things like ‘if China raises tariffs how much will EU’s exports rise or fall’ or ‘if India changes FDC rules this way or that what will be the impact on local industry, exports or farmers”. Mechanics, calculations, that’s all; fine, leave it to PhD students and sham algorithmic Nobel Prize winners, some later convicted as crooks. A PhD now is a reward for moderate intelligence and moderate effort, it’s a training ground in research-methodology, no longer much to do with an original contribution.

The transformation problem belongs to different category from quantitative economics. It is located in the triangulated border between political practice, philosophy and economics. Kapital I is 100% grounded in the labour theory of value whose premise is that only human activity (labour) creates value. Hence the value of a commodity is inputs (raw materials and machinery) plus the average socially necessary labour newly added in its production. Of this added-value a part is used to pay wages (the average socially necessary subsistence and reproduction costs of the worker). The portion left after this Marx called surplus value. The more familiar word in economics is profit, including interest, tax and rent. This surplus appropriated by the capitalist may be ploughed back into reproduction (another production cycle) or used to expand the economy in new directions. This is how capitalism works, morality apart.

Marx recognised that value (the socio-philosophical concept) and price (market price at which commodities trade) are not the same. There is dislocation between value and price and between surplus value and profit. For example a commodity made in a plant employing lots of labour should generate lots of surplus value, but commodities produced in high-tech plants with little labour apparently generate only a small surplus. The former should then be generating high profits, the latter only a small profit! Not only is this counter-intuitive but also screws up reality. Volume III of Kapital, inter alia, is Marx’s struggle to resolve this contradiction.

He recognises that capitalism is a social system hence a plant by plant analysis is bollocks, it can only help introduce concepts. Taking society overall the rate of profit will be uniform (capital will migrate if there is a difference in profitability). But the total surplus-value of the whole production system equals the total profits of the whole economy. Then whether some activities (mines, healthcare) intrinsically needed more labour and others (robot-controlled industry) intrinsically needed less does not matter, the natural rate of profit across the economy will be the same. An average plant in each category would yield the same as the economy wide average rate of profit. So Marx first conceded that value and price need not be the same, second he postulated that the total surplus value created in production equals the total profit in the whole economy, and third he saw a tendency for the rate of profit across the economy to equalise. Nevertheless contradictions, too complex to explain here, remained. In my view this effort was pointless since the labour theory of value and market economics belong to separate though parallel philosophical domains. To attempt to map them point-by-point is as absurd as attempting to map personal psychology point-by-point to aggregated social behaviour.

Marx was a guy-and-a-half; he thundered like the prophets from Isiah to Mohamed; his damnations and exaggerations would make a second-hand car salesman blush. But my god, how many thinkers in the last two centuries produced ideas of comparable depth? Yes, Darwin – of Einstein and Freud I am not so sure. And none revealed such kaleidoscopic range – philosophy/dialectics, history, economics and revolutionary politics.



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Features

Italy: The Hard Right nears power

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By Gwynne Dyer

There’s an election in Italy next Sunday, almost exactly 100 years after Benito Mussolini’s ‘blackshirts’ marched on Rome and brought the first fascist dictator to power.Giorgia Meloni, the hard-right populist politician who is likely to win that election, rejects any comparison with that ugly past. The party she leads, Brothers of Italy, has some ‘nostalgic’ neo-fascists in its ranks, but she prefers to compare it to Britain’s post-Brexit Conservative Party or the US Republican Party as rebranded by Donald Trump.

She shares her hostility to the European Union with Britain’s Conservatives, her hatred of immigrants, gays and Muslims with the US Republicans, and her truculent nationalism with both those parties. She is also militantly Christian, and she dabbles in ‘Great Replacement’ paranoia. And just like them, she wages a non-stop culture war.

“There is no middle ground possible,” Meloni told a rally last June. “Today, the secular left and radical Islam are menacing our roots…Either say yes, or say no. Yes to the natural family, no to the LGBT lobbies. Yes to the universality of the Cross, no to Islamist violence. Yes to secure borders, no to mass immigration.”

The brutal simplicity of these slogans works just as well with lower-income, poorly educated Italians as it does with the same sort of people in ‘heartland’ America or ‘red wall’ Britain. The goal is to distract them from the fact that their populist heroes really govern in favour of the rich (which explains why those leaders must be shameless liars).

Giorgia Meloni lies, too, but when you compare her to populist peers like Viktor Orbán in Hungary, Jair Bolsonaro in Brazil, and Donald Trump in the United States, she actually doesn’t seem that bad.

Like them, she has no permanent political principles, just a bundle of cynical techniques for attracting distressed and desperate voters. But she needed to shift towards the centre ground to build her Brothers of Italy party up from 4% of the vote in the 2018 election to a predicted 25% this time – so that’s what she did.

She now claims to support both the European Union and the NATO alliance. Even before the Russian invasion of Ukraine, she avoided the pro-Putin stance that was common on the radical right in both Europe and the United States. With the fragile Italian economy teetering on the brink of recession, she is promising good behaviour to Brussels.

So not a complete disaster, then. Continued access to the EU’s Covid recovery fund, which has promised Italy 191 billion euros over the next six years, should keep Meloni from straying too far from orthodox economics. If the EU withholds those funds, her prospects of remaining in power would be slim.

Brothers of Italy will probably be the largest Italian party after this election, but with only 25-30% of the vote she will not be able to govern alone. The problem is that the two parties she will need to make a coalition with, Silvio Berlusconi’s Forza Italia! (Go Italy!) and Matteo Salvini’s Lega (The League), are direct rivals of her own party.

Berlusconi at 85 is still a big political player thanks to his huge media empire. Salvini is willing to bring any coalition down if it improves his chances of being prime minister in a different one. Both men will be trying to claw back the popular support that Meloni’s Brothers of Italy has stolen from them, so there will be tears before bedtime.

In normal times, their chosen tactic would be to undermine Meloni’s party by pushing for harsher policies on immigration and bigger conflicts with the EU. With the Russian energy blockade promising a hard time for Europe economically this winter, however, the obvious strategy for far-right parties is to advocate a softer line on Putin’s war in Ukraine.

Both men have been Putin fanboys in the past. Berlusconi sees the Russian dictator as a personal friend, and Salvini called him “the best statesman on Earth” three years ago. Now Salvini soft-pedals his admiration for Putin, but he demands an end to the sanctions against Russia because they are allegedly hurting Italy more than Russia.

Meloni can’t afford to play that game, and the expected post-election coalition of far-right parties is unlikely to last very long. She has sufficiently detoxified herself that she could lead a coalition with other parties instead, and that may well happen.Post-fascist parties in power in Italy are still bad news, but the damage to the European Union and the NATO alliance can probably be contained.

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Why do we go to the IMF?

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By Shahid Mehmood

THE resumption of the IMF package, that was badly needed to avert an external payments crisis, has reignited passions. As most countrymen wrestle with the question of whether or not the Fund is a tool of neocolonialism to keep countries like Pakistan sedated and subservient, what is lost in the debate is why we always wind up at its door. Let’s take a peek.

Energy is the relevant sector to get this conversation going as it constitutes the largest portion of our import bill. Economic growth and economic mobility depend on energy, whose demand rises as economies expand (along with other factors like population growth). A large portion of Pakistan’s entire energy edifice is dependent on imported fuels, given our meagre internal energy sources.

Aside from raw material, the machines and equipment underpinning our power production are also imported — from turbines at hydel power plants to equipment at LNG, coal and furnace oil plants. So, not only are we importing raw materials, we are also importing services to sustain them over the long term. All these have to be paid for in dollars.

Read: Wanted — a non-partisan economic plan

Here, let me address a misconception, that ‘indigenous’ sources of power will take care of the matter. Think again. These can’t be utilised without outside help. Decades after the construction of the Mangla and Tarbela dams, we still need foreign experts to solve critical issues related to them. Consider the Neelum-Jhelum run-of-the-river hydel power project, which has extracted gazillions from Pakistanis under the label of ‘surcharge’. Meant to utilise an ‘indigenous’ source of energy, hardly a year later it is down due to a ‘fault’ that required the services of foreign experts because our own ‘experts’ could not identify it. (It meant inflicting losses in the billions on consumers due to power production from expensive, imported fuel).

We are importing not only raw materials, but also the services to sustain them over the long term.The case of other indigenous sources is somewhat similar: we cannot build nuclear power plants without foreign help; we had to hire foreign experts to determine whether our coal plants could use Thar’s indigenous coal, etc.

This is not a revelation: there has been recognition for long that Pakistan creates problems for itself that, in turn, generate a demand for dollars, which we are usually short of. The Economic Survey of 1980-81, for example, recognised that long-gestation projects under the public investment garb was the main reason for saddling Pakistan with an external debt of $9bn. Yet, PSDPs refuse to budge! It’s still about grand projects like roads that incentivise an increase in vehicular traffic, in turn creating more demand for dollar imports, as the main components of the products of our highly protected car manufacturers are imported.

Let’s move to the role of public regulations. A few of endless examples will suffice. We have this infinite fascination with horizontal sprawls, complemented by ‘housing societies’ in the public and private sector. Aside from cities becoming administratively difficult to govern, a result of these endless sprawls is the need for more vehicles, leading to greater demand for energy products such as oil and diesel. There has, arguably, never been an estimate of the increase in energy imports that accrued to the country due to this endless expansion. But if ever such an exercise is carried out, the results will make other import-related issues — like IPPs — look puny.

These endless sprawls have resulted in millions of acres of fertile agricultural land being gobbled up over time. Given that more than 100 agricultural ‘research’ institutes are producing little or nothing in terms of higher land and crop productivity, complemented by a rapidly expanding population, there is little choice but to import food staples to meet our food requirements — so much for being an ‘agricultural country’.

Another good example: the illogical fascination with uniform pricing. In terms of the ultimately imported energy products, it leads to waste. Pakistan’s fast-depleting natural gas reserves are an apt illustration of this phenomenon. First, it was Balochistan, and now it is Sindh whose natural gas reserves are dwindling fast. There has, historically speaking, always been an incentive to consume it inefficiently because they have been under-priced, primarily due to uniform prices that are way below the market prices. Had the pricing been market-based from the start, there might not have arisen the need for importing expensive LNG or coal, which severely taxes our dollar earnings.

Moving away from big-ticket items, even the micro level does not inspire much confidence. Consider the common office chair. Some time back, they were in short supply, carrying a premium. That’s because they are merely ‘assembled’ here from imported parts. Most other products fare little better.

To summarise, Pakistan’s economic edifice is built in a manner that, unless we import, our economic activity will come to a standstill. And as GDP inches up, we end up importing more — to the extent that our dollar earnings will never be enough to pay for our imports. So whether it’s the IMF or anyone else, Pakistan will sooner or later knock at their door for dollars.

How to change all this? Before someone presents ‘import substitution’ as the Holy Grail, God save us from that predicament. Our earlier experiments only ended up producing rent-seeking seths and the likes of the car industry that sells low-quality tin for millions — the promised ‘localisation’ never happened. For a start, enough of brick-and-mortar ‘plans’ that create more liabilities than assets, besides raising pampered generations of subsidy-sucking businessmen under the banner of ‘infant industry’ and ‘qaumi mufaad’ (national interest). Neither do we need NOCs or hundreds of regulatory agencies to scare away foreign and domestic investors.

The way out of our dollar cash-flow troubles lies in greater global integration and trade, promoting competition and developing our human capital base. For a change, take the government out of business and let Schumpeterian creative destruction prevail on a level playing field. (The Dawn/ANN)

The writer is an economist and research fellow at PIDE.

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National Day of Saudi Arabia – 23rd September 2022

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Crown Prince Message- Custodian of the Two Holy Mosques King Salman Bin Abdulaziz Al-Saud

It is my pleasure to present Saudi Arabia’s Vision for the future. It is an ambitious yet achievable blueprint, which expresses our long-term goals and expectations and reflects our country’s strengths and capabilities. All success stories start with a vision, and successful visions are based on strong pillars.The first pillar of our vision is our status as the heart of the Arab and Islamic worlds. We recognise that Allah the Almighty has bestowed on our lands a gift more precious than oil. Our Kingdom is the Land of the Two Holy Mosques, the most sacred sites on earth, and the direction of the Kaaba (Qibla) to which more than a billion Muslims turn at prayer.

The second pillar of our vision is our determination to become a global investment powerhouse. Our nation holds strong investment capabilities, which we will harness to stimulate our economy and diversify our revenues.The third pillar is transforming our unique strategic location into a global hub connecting three continents, Asia, Europe and Africa. Our geographic position between key global waterways, makes the Kingdom of Saudi Arabia an epicenter of trade and the gateway to the world.

Our country is rich in its natural resources. We are not dependent solely on oil for our energy needs. Gold, phosphate, uranium, and many other valuable minerals are found beneath our lands. But our real wealth lies in the ambition of our people and the potential of our younger generation. They are our nation’s pride and the architects of our future. We will never forget how, under tougher circumstances than today, our nation was forged by collective determination when the late King Abdulaziz Al-Saud – may Allah bless his soul – united the Kingdom. Our people will amaze the world again.

We are confident about the Kingdom’s future. With all the blessings Allah has bestowed on our nation, we cannot help but be optimistic about the decades ahead. We ponder what lies over the horizon rather than worrying about what could be lost.

The future of the Kingdom, my dear brothers and sisters, is one of huge promise and great potential, God willing. Our precious country deserves the best. Therefore, we will expand and further develop our talents and capacity. We will do our utmost to ensure that Muslims from around the world can visit the Holy Sites.

We are determined to reinforce and diversify the capabilities of our economy, turning our key strengths into enabling tools for a fully diversified future. As such, we will transform Aramco from an oil producing company into a global industrial conglomerate. We will transform the Public Investment Fund into the world’s largest sovereign wealth fund. We will encourage our major corporations to expand across borders and take their rightful place in global markets. As we continue to give our army the best possible machinery and equipment, we plan to manufacture half of our military needs within the Kingdom to create more job opportunities for citizens and keep more resources in our country.

We will expand the variety of digital services to reduce delays and cut tedious bureaucracy. We will immediately adopt wide-ranging transparency and accountability reforms and, through the body set up to measure the performance of government agencies, hold them accountable for any shortcomings. We will be transparent and open about our failures as well as our successes, and will welcome ideas on how to improve.

All this comes from the directive of the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al-Saud, may Allah protect him, who ordered us to plan for a future that fulfills your ambitions and your aspirations.In line with his instructions, we will work tirelessly from today to build a better tomorrow for you, your children, and your children’s children.

Our ambition is for the long term. It goes beyond replenishing sources of income that have weakened or preserving what we have already achieved. We are determined to build a thriving country in which all citizens can fulfill their dreams, hopes and ambitions. Therefore, we will not rest until our nation is a leader in providing opportunities for all through education and training, and high quality services such as employment initiatives, health, housing, and entertainment.

We commit ourselves to providing world class government services which effectively and efficiently meet the needs of our citizens. Together we will continue building a better country, fulfilling our dream of prosperity and unlocking the talent, potential, and dedication of our young men and women. We will not allow our country ever to be at the mercy of a commodity price volatility or external markets.

We have all the means to achieve our dreams and ambitions. There are no excuses for us to stand still or move backwards.Our Vision is a strong, thriving, and stable Saudi Arabia that provides opportunity for all. Our Vision is a tolerant country with Islam as its constitution and moderation as its method. We will welcome qualified individuals from all over the world and will respect those who have come to join our journey and our success.

We intend to provide better opportunities for partnerships with the private sector through the three pillars: our position as the heart of the Arab and Islamic worlds, our leading investment capabilities, and our strategic geographical position. We will improve the business environment, so that our economy grows and flourishes, driving healthier employment opportunities for citizens and long-term prosperity for all. This promise is built on cooperation and on mutual responsibility.

This is our “Saudi Arabia’s Vision for 2030.” We will begin immediately delivering the overarching plans and programmes we have set out. Together, with the help of Allah, we can strengthen the Kingdom of Saudi Arabia’s position as a great nation about which we should all feel an immense pride.

His Royal Highness Prince Mohammed bin Salman bin Abdulaziz Crown Prince, Deputy Prime Minister, and Chairman of the Council of Economic and Development Affairs.

History & Heritage

Saudi Arabia has long occupied an important role at the center of the Islamic and Arab worlds. Located at the heart of three continents, the Kingdom has served as an important ancient trade route and a vital link connecting East and West.

It also has a unique heritage landscape that has developed over the centuries, including 6 UNESCO World Heritage sites.

People & Culture

Saudi Arabia has a rich culture shaped by the diversity of its people, which has formed the basis of its cultural identity. The Kingdom has 13 regions across which 34 million people live who are united by the Arabic language, but each region has a unique dialect, traditions, heritage, and culinary identity.

The Kingdom has four official yearly celebrations; two Islamic celebrations, Eid al-Fitr and Eid al-Adha, Founding Day (February 22) and Saudi National Day (September 23).

The people of Saudi Arabia embrace many social values influenced by their Islamic values which preserve the Kingdom’s ancient customs and traditions, including generosity, courage, hospitality, and maintaining strong family relationships.

Economy & Business

Saudi Arabia has implemented structural economic and financial reforms since the launch of Vision 2030, which established a new economic system that prompts the creation of a diversified and robust economy that achieves sustainable growth for the Kingdom.

Investing in previously untapped sectors has supported the Kingdom’s economic diversification efforts and led to an improved business environment. Thus, strengthening the role of the private sector in the economy and creating the necessary environment for sustainable growth.

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