U.S. economy – Taking the pulse

Getting a picture of something as complex as the economy of the 

U.S. – the world’s largest – is not an easy matter. An earlier post showed that it is completely misleading to paint such a picture using only the “simple” figures of annual growth of Gross Domestic Product (GDP). To only use these “simple” GDP figures, you arrive at the ridiculous conclusion, pictured in the first graph of this article, that today’s U.S. economy is twice as big as in 1995, four times as big as in 1983, eight times as big as in 1976, 16 times as big as in 1969, 32 times as big as in 1958, and more than 60 times as big as in 1947 – a picture of triumphal, unending growth.[1]

When statistics are presented in graphic form, as here, economic realities can be brought into focus in a way that is much more accessible than unending rows of statistics. For instance, the black line on this first graph shows what happens to “simple” growth figures when a very basic step is taken – adjusting those figures for inflation (price increases). To say the least, this changes the picture. There is still overall growth, but nothing on the scale implied when inflation is excluded.

But this is still not a reasonable picture of the last 60 years of the U.S. economy. Growth statistics are also relatively meaningless if they don’t take into account population growth. A ten percent growth in population has to be matched by a ten percent growth in the economy just for everything to stay in the same place.

The second graph shows both figures – GDP in the U.S. reduced first by inflation (the grey area),[2] then reduced by both inflation and population increase (the black line).[3] The result is a much more accurate picture of the growth of the U.S. economy over three generations.

But still the picture is not complete. What is meaningful to a working person is not only whether, in five years, the economy is going to be bigger than it is today. Equally and sometimes more important is the direction now. Is the economy we are living in today expanding or contracting, and how quickly?

There is a fairly accurate way of getting a picture of this. The reason the first graph has a Roman numeral “I” after the dates, is that is the traditional way of labeling each quarter of the year (I, II, III and IV). U.S. GDP figures are available quarter by quarter, and similar figures can be calculated for both inflation and population increases.

All of this can by combined to get “annualized” growth rates per quarter. This is a measure of how fast the economy is growing, or shrinking, in any given quarter. If the answer to that question is “five percent”, it doesn’t mean that the economy grew five percent in that quarter. It means that its rate of growth was five percent. This rate is determined by measuring back four quarters (one year), and seeing how much bigger or smaller the economy is, and from that calculating a rate. The resulting picture is fascinating.

Serious analysts, both left and right, would not be surprised by this picture. Capitalism’s history is one of recurring periods of booms and slumps, or (in less extreme terms) of “business cycles” An advocate of capitalism like Joseph Schumpeter, argued almost 70 years ago that business cycles “are not like tonsils, separable things that might be treated by themselves, but are, like the beat of the heart, of the essence of the organism that displays them.”[4] The Russian socialist Leon Trotsky – writing more than 80 years ago, wrote that “capitalism lives “by crises and booms, just as a human being lives by inhaling and exhaling. First there is a boom in industry, then a stoppage, next a crisis, followed by a stoppage in the crisis, then an improvement, another boom, another stoppage and so on ... Crises and booms were inherent in capitalism at its very birth; they will accompany it to its grave.”[5] Both Schumpeter and Trotsky could have been describing capitalism today.

The cycle of booms and slumps has to be a central feature of any accurate picture of the health of the economy. The graph here exactly confirms Schumpeter’s and Trotksy’s descriptions – this is a system inhaling and exhaling or to use Schumpeter’s analogy, a pulse – the very beating heart of the capitalist economy, booms followed by slumps.

Look at each decade. We know that the 1950s was a time of economic expansion. But that doesn’t mean there were no slumps, no recessions. Three sharp recessions punctuate the decade, short in duration, but sometimes very sharp. In the first quarter of 1958, for instance, the economy was contracting at a rate of almost six per cent. Workers at the time would get little comfort from being told that they were living through boom times.

The decade of the 1960s has the reputation of being the most spectacular decade of what has come to be known as the long boom – and there was considerable growth through the decade. But it opened with a two-quarter recession in 1960 and 1961, and was followed in 1970 by a full year of recession. Even in boom times, U.S. capitalism could not escape the boom-slump cycle. And by historic standards, the 1960s boom was not all that long. Trotsky argued that each business cycle “lasts from 8 to 9 or 10 to 11 years.” Well, the 1960’s cycle was about 10 years long. If anything, what this highlights is not the surprising length of the 1960’s business cycle, but the manic nature of the 1950s, where very high growth rates were punctuated by frequent returns to recession or slump.

Then we get to the 1970s. What a terrible decade. The 1970s recession was followed by three years of growth, and then the brutal slump of 1974-75, where the economy shrank consistently. In the fourth quarter of 1974, the U.S. economy was shrinking at a rate of 4.8 percent a year. There followed three and a half years of growth, and then an even worse slump, which in a real sense lasted from the second quarter of 1979 through the fourth quarter of 1982. (There was a brief return to growth in 1981, but so brief and so feeble that it felt like the recession was still ongoing.) At its worse, the U.S. economy was shrinking at a rate of 7.37 percent, in the second quarter of 1980, a really astonishing rate of decline.

The expansion of the 1980s was a welcome relief, only if you didn’t examine one of its principle sources – the massive re-arming of the U.S. – beginning under Democrat Jimmy Carter and continuing under Republican Ronald Reagan. That boom was shorter than its counterpart in the 1960s. Similarly, the recession which followed it in 1990-91 was shorter than the slump of 1979-82 (the steepest decline in the 1990-91 period was 2.97 percent, considerably less than the 7.37 percent rate ten years previous).

The story of the 1990s and the 21st century is still being written. It is true that there was a third long expansion of the system in the 1990s, but growth rates were lower than in either the 1980s or 1960s. There was a return to slump in the second quarter of 2001, and the period of decline or near decline lasted longer than in 1990-91, not ending until the second quarter of 2003. But the rates of economic decline in this slump were the lowest on record – never registering more than an annual decline of 1.17 percent. We seem to be on the edge of another slump, whose story will have to wait until another day.

Getting this into focus – the cycle of booms and slumps – is an important element in understanding the world in which we live. But even with this picture, there is considerable work to do. One very big missing piece is the overall trajectory. Trotsky introduces a third analogy to get at that picture. “[T]o determine capitalism’s age and its general condition – to establish whether it is still developing or whether it has matured or whether it is in decline – one must diagnose the character of the cycles. In much the same manner the state of the human organism can be diagnosed by whether the breathing is regular or spasmodic, deep or superficial, and so on.”

In more economic language he summarizes: [T]he curve of economic development is a composite of two movements: a primary movement which expresses the general upward rise of capitalism, and a secondary movement which consists of the constant periodic oscillations corresponding to the various industrial cycles.”[6] This article has only looked at the latter – the secondary movement. But even if not the full story, it is a necessary component in developing a complete picture of the current dynamics of the U.S. economy.

© 2008 Paul Kellogg

References

[1] Bureau of Economic Analysis, “National Income and Product Accounts Table: Table 1.1.5. Gross Domestic Product (Billions of Dollars), www.bea.gov.
[2] Bureau of Labor Statistics, “Consumer Price Index – All Urban Consumers,” Series ID: CUUR0000SA0, www.bls.gov .
[3] Population Division, U.S. Census Bureau, “Table 1: Annual Estimates of the Population of the United States”; Population Estimates Program, Population Division, U.S. Census Bureau, “Historical National Population Estimates: July 1, 1900 to July 1, 1999,” www.census.gov
[4] Joseph Schumpeter, Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process, volume 1 (New York: McGraw-Hill, 1939), p. v. Schumpeter is best known for his praise of the “Creative Destruction” inherent in periodic recessions (Schumpeter, Capitalism, Socialism and Democracy (New York: Harper, 1942), p. 82).
[5] Leon Trotsky, “Report on the World Economic Crisis and the New Tasks of The Communist International,” in The First 5 Years of the Communist International, Volume I (New York: Monad Press, 1972), p. 200.
[6] Trotsky, pp. 200-1.

U.S. economy – The disappearance of growth

“I’m here to tell you ... the U.S. economy is in a recession,” said Sherry Cooper, chief economist for BMO Financial Group, speaking to the Canadian Club of Ottawa January 22.[1] Yet it is only November 29 that the Associated Press reported that the U.S. economy “barreled ahead in the summer, growing at a 4.9 percent annual rate.”[2] How does an economy go from barreling in one quarter, to slump in the next?

The 4.9 percent figure comes from the Bureau of Economic Analysis (BEA), who offers a table which offers simple percentages of annual growth rates in GDP by quarter.[3] But different and very interesting results can be arrived at if we do our own calculations, using the most comprehensible table for GDP (that measured in the dollar value of Gross Domestic Product) and the most meaningful table for measuring inflation (the one that measures consumer prices in major cities).

With these tables, growth before inflation actually looks stronger, coming in at an annual rate of 5.3 percent.[4] But the annual rate for inflation in the third quarter was 2.76 percent[5], leaving real GDP growth at 2.5%, about half of the figure reported by the BEA.

But there is a final figure that has to be taken into effect. Economic statistics are only meaningful when they also take into consideration population growth. Think of it this way – if a country’s economy doesn’t grow at all, but its population does – then as far as the people in that country are concerned, the economy has effectively become smaller. The population of the U.S. is growing at an annual rate of 0.96 percent[6], so the most accurate reading of U.S. growth for the third quarter is 1.59%. (These are all annual figures, reflecting the rate of growth from the third quarter of 2006 to the third quarter of 2007).

That is a much slower rate than first reported, and perilously close to stagnation. We don’t yet have figures for fourth quarter growth in 2007. But we do have inflation figures. It won’t be a surprise to anyone that inflation – the cost of living – has jumped considerably – from 2.76 percent to 4.08 percent.

In all probability, fourth quarter figures will show “negative growth” for the U.S. economy. Two quarters of negative growth, and it will be official – the economy will be in recession.

© 2008 Paul Kellogg

References

[1] “Canada Will Skirt Recession, But U.S. Already There, Says BMO’s Cooper,” Canadian Economic Press, January 22, 2008, www. economicnews.ca
[2] The Associated Press, “Economy Surged in Summer,” The New York Times, November 29, 2007, www.nytimes.com
[3] Bureau of Economic Analysis, “National Economic Accounts: Table 1.1.1. Percent Change From Preceding Period in Real Gross Domestic Product” www.bea.gov
[4] Bureau of Economic Analysis, “National Economic Accounts: Table 1.1.5; Gross Domestic Product” www.bea.gov
[5] Bureau of Labor Statistics, “Consumer Price Index – All Urban Consumers,” Series ID: CUUR0000SA0, www.bls.gov .
[6] Population Division, U.S. Census Bureau, “Table 1: Annual Estimates of the Population of the United States”; Population Estimates Program, Population Division, U.S. Census Bureau, “Historical National Population Estimates: July 1, 1900 to July 1, 1999,” www.census.gov

Putin, Chechnya and imperialism

The Mulroney-Schreiber affair has brought the little Central Asian country of Chechnya back into the headlines. Mulroney’s very bizarre defence for acting as Schreiber’s paid salesman, includes a reference to peddling military vehicles to Russia for use in “peacekeeping” in Chechnya. In this context, it is useful to look in some detail at the situation in Chechnya. The article posted here, makes the case that Russia’s oppression of Chechnya is a classic example of Great Power Imperialism. There is nothing remotely resembling “peacekeeping” in its actions there.

This article (slightly revised with updated references) was originally written in February 2000. It is of course marked by its context. Eight years ago, Russia was only two years removed from the catastrophic winter of 1998 where some pensioners were literally dying of starvation.[1] We could not know at the time that eight years later, Russia would be at the centre of the “BRIC” (Brazil, Russia, India China) resurgence of economies in the Global South. But given these limitations, it still is useful as a documentation of the imperialist nature of Russia’s relationship to Chechnya.

The butcher of Chechnya[2]

FEBRUARY 2000 – Vladimir Putin is the butcher of Chechnya. There is really no other title that so captures the essence of the new president of Russia. When former president Boris Yeltsin elevated Putin to the prime minister’s office in August 1999, he was a complete unknown with virtually no public recognition or support.

He changed that by presiding over a racist campaign against the Chechen minority in Russia, accusing them of instigating the terrorist bombings that had killed upwards of 300 Russian civilians.[3] Putin’s campaign of racist scapegoating was followed by an artillery and air assault on the small republic of Chechnya and then, in the fall of 1999, an all out invasion of the republic with a massive army of 100,000.[4]

The butchery of this war is his one and only political act to date. The racist patriotism he whipped up in the course of that war is what allowed his Unity Party to go from obscurity to capturing close to 25 per cent support in the December elections.[5] This support was sufficient to allow Yeltsin to resign and elevate Putin from the prime minister’s office, to the much more powerful presidential suite, on New Year’s Eve, 1999.

The very purpose of the war was to elevate Putin to power. In the summer of 1999, the Kremlin rulers looked to be in deep trouble. Yeltsin was thoroughly discredited, and there was no candidate on the horizon, trusted by the billionaire oligarchs who control the economy, in a position to take his place. But war-frenzy has diverted the attention of millions from the everyday despair of their lives. And Putin has ridden that frenzy to power.

Yeltsin, from 1994 to 1996, had presided over an appalling war against Chechnya where that country was “reduced to a wasteland” with “100,000 people killed.” In spite of this barbarism “Russia failed to impose its will on the breakaway republic. A tiny Chechen force, rather, had imposed upon the Russian army a humiliating defeat.”[6]

Putin is using “terrorism” as an excuse to avenge this defeat, and his war, like Yeltsin’s, has led to terrible atrocities. The capital of Chechnya, Grozny, has been under constant bombardment for weeks. “There is nothing to eat in the city,” said Maria Gakisheva, 61. “They are bombing us from the air and from the ground. There are a lot of dead bodies in basements because people are afraid to leave the basements to bury them.” Gakisheva left Grozny January 14, but says many people cannot leave. “Those people will not make it out of there if they get a safe corridor. They are like skeletons. They are too weak to leave. They can only be carried out,” she said.[7]

“The Russians are simply destroying the Chechen nation,” said Ramazan Isbriev, a 48-year-old mechanical engineer. Isbriev was considering supporting the Russian invasion as an alternative to the chaos that has reigned in Chechnya since the 1994-1996 war. But the brutality of the Russians has changed his mind. “They call this an anti-terrorist operation. And in 1994 they said they were restoring constitutional order. What will they say in 2004? They’ll invent something else.”[8]

For a few days in early January, the Russian brutality went so far as to see any Chechen male between the ages of 10 and 60 accused of being a potential terrorist. Boys and men of this age were ripped out of refugee columns and sent to segregated prisons for interrogation. “It’s madness,” said Aminat Deniyeva, a mother of an 11-year-old who was unable to escape from the war because of the crackdown. “What can a child do? He can’t even lift a machine gun. It’s too heavy.”[9]

We don’t know how many thousands have been killed, maimed and wounded. At least 200,000 people in the tiny republic have been forced from their homes.[10] At least 1,000 Russian soldiers have died in the process.[11] The new president of Russia is indeed the butcher of Chechnya.

Welcomed by the West

Yet both liberals and conservatives in the West have greeted this butcher with open arms. An unsigned front page article in the liberal Toronto Star gushed: “A Putin presidency would ... be good for Russia and the West. The 47-year-old moderate ... would bring a welcome note of stability to Russia’s chaotic administration. He would ensure that Russia stays on the path to democracy, rather than sliding back to its authoritarian past.”[12] Britain’s conservative magazine The Economist wrote: “Russia needs a strong leader, able to get laws passed and obeyed, and institutions built, rebuilt or cleansed of corruption.”[13] U.S. President Bill Clinton said, “the United States can do business with this guy.”[14]

The praise from these conservatives and liberals did not stay at the level of words. There are bags of cash in the pipeline to assist Putin’s new regime. Just two days before Yeltsin’s surprise New Year’s Eve resignation, the World Bank announced it was lending Russia $100-million to “develop its coal sector.” A Russian official hinted that soon to follow would be a renewal of lending to Russia from the International Monetary Fund.[15] That renewal of lending will release billions of dollars into the hands of the Russian ruling class.

The hypocrisy of this stance by the West is breathtaking. Slobodan Milosevic in Kosovo committed far fewer acts of barbarism than Putin has committed in Chechnya. Yet Milosevic was greeted with bombs and artillery, while Putin is greeted with smiles and cash. How do we explain the difference?

Making Russia open for business

Part of the answer can be found through an examination of the ten year old campaign to make Russia and its former allies in Eastern Europe, open for business. Western multinationals, and their governments, have a long term interest in prying open the markets of the old Russian empire to make profits.

Look at the conditions that are attached to the World Bank loans. Two of these conditions are that Russia show progress in closing money-losing mines, and that the government move away from subsidizing uneconomic production. In other words, the World Bank’s principal concern is not murdered civilians in Chechnya, but rather encouraging an increase in the number of bankruptcies in the already devastated Russian economy and a parallel increase in the number of unemployed workers.

The west also has its eyes on the great prize of oil from the Caspian Sea. This sea – which is central to the Chechen region – contains the largest known reserves of oil outside the Middle East. For months, western governments – in particular the United States – have been manoeuvring to ensure that the pipelines to carry oil from this sea pass through countries loyal to the West and not Russia. Chechnya is central to Russia’s attempt to control the flow of oil from the Caspian Sea. But a Chechnya, shattered by war, will be in no shape to compete for such a prize. The western powers, then, care not a whit if it is burned to the ground.

Old enemies and new enemies

But more than just economics is at play in the region. Russia may have lost its empire. But it is still the second biggest nuclear power in the world. The United States and the West have every interest in systematically reducing the size and power of the Russian nuclear arms cache. The Clinton administration is pushing hard for the Russian parliament to ratify the Start III treaty, which would require cuts in Moscow’s nuclear arsenal. To get Russian co-operation on this, it would be imprudent to rock the boat too much on the issue of Chechnya.[16]

Probably more important in the calculations of the Western powers is the new threat that has emerged with the decline of Russia – China. The U.S. won the Cold War against the Soviet Union. It has now, increasingly, identified China as the new big “threat” on the world scene. It has used a barrage of propaganda about this “threat” to justify the push for an anti-ballistic missile system. This hideously expensive Star Wars fantasy envisages ringing the United States with missiles to “protect” it in the case of a nuclear strike by an enemy. One of the countries to be “protected” by this umbrella of “defensive” nuclear missiles would be Taiwan. China sees this as a direct assault on its vital interests, and is strongly opposed to the ABM treaty. Getting Russia onside is critical to allowing the U.S. to legitimize its push for anti-ballistic missiles.

All of these calculations are far more central to the thinking of Western political leaders than any humanitarian concerns in Chechnya. They will mouth these concerns from time to time, but they have absolutely no intention of doing anything serious to stop the butchery.

Making the world a more dangerous place

The net effect of all this is to make the world a far more dangerous place. The Unity Party, which backs Putin, does not have sufficient support to govern in its own name. The rich “oligarchs” who are the backbone of the Russian ruling class know this, so they found Putin some allies. The results of this alliance were shown in the recent round of elections to the Duma, or parliament.

The oligarchs control all the television stations. To get airtime on those stations, you had to agree with the Kremlin’s line on the war in Chechnya. That meant vast quantities of air time for Putin’s “Unity Party” (created out of whole cloth just last year) and for the two parties he can most rely on – the Union of Right Wing Forces (or SPS), and the so-called Liberal-Democratic Party led by Vladimir Zhirinovsky, a party so far to the right, many have labelled it fascist.[17]

“All three parties got a lot of administrative and financial support from the Kremlin in the campaign,” said Andrei Piontkovsky, a political analyst in Moscow. “Zhirinovsky and Kiriyenko (leader of SPS) were on TV screens all the time. This was part of the deal: ‘You support the government and we give you the government’s resources.’ It was a cynical campaign, but it demonstrates the efficiency of the Kremlin’s information technology.”[18]

The Putin presidency has made the world more dangerous in more direct ways. His only claim to fame has been his war mongering in Chechnya. He has followed the logic of this open militarism to revise the way in which Russia plans to use its nuclear arsenal. Previously, Russia’s stated position on the use of nuclear weapons was they would be used only if the existence of the country were threatened. The new position, approved by Putin on January 6, 2000, now envisages the use of atomic weapons “to repel armed aggression,” a much less specific term.[19]

So the “strong man” so praised by the Toronto Star, The Economist, and Bill Clinton, is a man who brings in his wake the shadow of authoritarianism and the far-right, and an increased threat of the use of nuclear weapons.

Shattered dreams of 1989

When the Berlin Wall fell in 1989 – beginning the process that was to lead to the collapse of the Soviet Union – this was not what we were promised. We were promised the triumph of the market which would go hand in hand with the triumph of liberal democracy which would go hand in hand with an “end of history” making the world a more peaceful place.

By 1998 we had seen the first of these dreams collapse. The terrible implosion of the Russian economy in that year, virtually wiped out the middle class. The economy is now 40 per cent smaller than it was in 1991.[20]

We have now seen the ideals of liberal democracy become deformed into elections manipulated by billionaires who control the press, elevating to power people like Putin who allies himself with the likes of Zhirinovsky. And the “end of history” has seen a series of “Great Russian” wars against oppressed minorities, and the elevation of the threat of the use of nuclear weapons.

In the wake of the collapse of the hopes of 1989, liberals like the editors of the Toronto Star, have turned in desperation to search for a “strong man” who can put the Russian house in order. Throughout the Cold War, these same liberals painted terrifying pictures about the Russian spy apparatus, led by the KGB. Putin is a lifetime senior member of the KGB and its successor organizations. But suddenly, this is no obstacle to his credentials as saviour of Russia.

From heroes to zeroes

For the moment, Putin is riding high and is the darling of the west. But the ground he is standing on is riven with fault lines. His entire rise to power has been predicated on a successful war in Chechnya. Should this war unravel, he will be in trouble.

Putin is having credibility difficulties. In early January 2000, The Independent in Britain published a report, which, if true, would undermine Putin’s entire rationale for going to war. The paper obtained videotape on which a Russian officer, captured by the Chechens, says that Russian special services, not Chechen terrorists, were responsible for the apartment block bombings – the bombings that were the pretext for the war. On the video, shot by a Turkish journalist last month before Russian forces cut off Grozny, the officer identifies himself as Alexei Galtin of the GRU (Russian military intelligence service). “I did not take part in the explosions,” he says, “but I have information about it. I know who is responsible for the bombings ... It is the FSB (Russian security service), in co-operation with the GRU, that is responsible for the explosions in Volgodonsk and Moscow.”[21] Rumours about Special Forces involvement in the bombings have been circulating for months. Should the war turn against the Russians, people just might start to believe them.

Putin is also having military difficulties. January 9, Chechen fighters seized strategic buildings in towns the Russians had held for weeks and months, killing dozens or maybe hundreds of Russian soldiers in the process. In just one of the towns, bodies were everywhere. “They say it was three or four, but in fact 30 died!” yelled a Russian soldier standing next to an armoured personnel carrier as a small group of journalists walked past. “Write that!”[22]

The Russian army is very vulnerable, in spite of its massive size. Many of its foot soldiers are terrified young teenagers, poorly armed and with little training, far from home and with no idea what they are fighting for. “I don’t feel safe in this machine at all,” said one young teenage soldier to a western reporter, pointing to his overheated tank. The soldier, who would only give his first name of Sasha, said, “I don’t understand why we’re fighting.”

“Several soldier’s in Sasha’s unit said they had been drafted just six months ago, after graduating from high school. Sasha ... was drafted in June, when he was 18.” This in spite of government assurances that no conscripts will be used who have less than a year’s experience. “When asked whether his men were ready for battle, the unit commander said: ‘Somewhat: We shouldn’t be going at all,’ he added.”[23]

The military setbacks provoked the first open criticism of the campaign by major Russian newspapers. “Every day of the war is bringing more and more casualties,” said an article in Kommersant. “The experience of the past Chechnya campaign shows that people quickly become tired of war, while its initiators turn from heroes into political zeroes.”[24]

It is from this process of crisis and splits in the Putin camp that a real alternative to the crisis in Russia could emerge. There is a small but growing anti-war movement in Russia. Plans are underway for protests against the war in Chechnya in March.[25] “In December, a militant anti-war demo in Moscow lasted 10-20 minutes before a third were arrested and the rest dispersed.”[26] There are the beginnings – albeit small – of an independent workers’ movement, the only social force with the power to tackle the terrible problems facing Russian society.[27]

We should have no illusions that these are any more than the first baby steps on the way to the type of mass resistance that will be necessary to put forward a real alternative in Russia. After two generations of Stalinist state capitalism, the language of socialism and the workers’ movement has been discredited in Russia, and it will take years and many struggles to put things right.

What is needed are some very simple steps:

• an immediate end to the war;

• self-determination for the Chechen people and all the oppressed people in Russia;

• seizing the money of the oligarchs who are strangling Russia’s economy to enrich themselves; using the money to create jobs and rebuild social services;

• fighting for an independent workers’ movement, the only social force capable of regenerating society.

These steps may be simple, but they will not come spontaneously from either the liberals or the conservatives who alternate between welcoming Putin and “cluck-clucking” over his authoritarianism. These simple steps are equally completely incompatible with the so-called “socialism” that ruled in Russia from the time of Stalin.

Rediscover these simple steps and you rediscover the genuine socialist tradition, a simple tradition of solidarity, freedom and human emancipation.

© 2008 Paul Kellogg

References

[1] Moshe Lewin, “The collapse of the Russian state,” Le Monde diplomatique, English edition, November 1998, www.mondediplo.com
[2] Revised version of Paul Kellogg, “The butcher of Chechnya,” (unpublished), February 2000
[3] Geoffrey York, “Putin urges blockade of border with Chechnya,” The Globe and Mail, Sept. 15, 1999, p. A18
[4] “US DEPT OF STATE: Daily press briefing,” M2 Presswire, November 9, 1999, p. 1 ProQuest document ID: 46278360
[5] Olivia Ward, “Murder and mafia – it’s a Russian election,” Toronto Star, December 12, 1999, p. 1: Paul Quinn-Judge, “Russia’s election surprise,” Time, December 31, 1999, Vol. 154, Iss. 27, p. 210.
[6] Christian Caryl, “War against the people,” Wall Street Journal (Eastern edition), June 9, 1998, p. 1
[7] Associated Press, “Russian Press Effort to Move Deeper into Grozny,” The New York Times, January 16, 2000
[8] Geoffrey York, “Russian plans backfiring in Chechnya,” The Globe and Mail, January 15, 2000
[9] York, “Russian plans backfiring”
[10] Andrzej, Rybak, “Fear and loathing keep Chechens far from home,” Financial Times, February 12, 2000, p. 5
[11] Sergei Venyavsky, “Russia covering up war casualties,” Toronto Star, January 27, 2000, p. 1
[12] “Welcome change in Russian leadership,” Toronto Star, January 2, 2000, p. 1
[13] “Putin the Great Unknown,” The Economist, January 8, 2000, p. 19
[14] Cited in Jim Hoagland, “Clinton should be careful with fawning praise,” The Gazette (Montreal), February 24, 2000, p. B3
[15] Julie Tolkacheva, Reuters News Agency, “Russia wins loan from World Bank,” The Globe and Mail, December 29, 1999, p. B11
[16] Jane Perlez, “Chechnya Challenge: War Threatens U.S. Strategic Goals,” The New York Times, November 15, 1999
[17] For example: Vladimir Solovyvov, Zhirinovsky: Russian Fascism and the Making of a Dictator (London: Addison-Wesley, 1995)
[18] Geoffrey York, “Election puts Kremlin in powerful position,” The Globe and Mail, December 21, 1999
[19] Reuters, “New Russia Defense Doctrine Lowers Atomic Threshold,” January 14, 2000
[20] Anders Aslund, “Russia’s collapse,” Foreign Affairs, Sep/Oct 1999, Vol 78 Iss 5, pp. 64-77
[21] Cited in Helen Womack, “Russian ‘confesses’ to bombings; Blasts at Moscow buildings,” The Spectator (Hamilton), January 6, 2000, p. C1
[22] Michael R. Gordon, “Russia Takes Chechen Town, but Can it Keep It?” The New York Times, January 14, 2000
[23] Andrew Kramer, Associated Press, “‘I don’t understand why we’re fighting:’ Russian teenage soldier” The Globe and Mail, December 28, 1999
[24] Geoffrey York, “Chechen rebels trap Russians in daring raids” The Globe and Mail, January 10, 2000
[25] “War and Human Rights,” March 3, 2000, www.hro.org/war/166.htm
[26] Steve Kerr, “Russian Anti-War Movement,” from International Solidarity with Workers in Russia, http://members.aol.com/ISWoR/english/index.html
[27] Steve Kerr, “Workers’ action is the key” Socialist Worker (Canada) 323, January 5, 2000

Venezuela – Referendum Defeat Strengthens the Right

In the early morning of Monday December 3 – when President Hugo Chávez conceded the defeat of proposed changes to Venezuela’s constitution – the mood in the capital Caracas depended on whether you were rich or poor. Outside the Miraflores Palace, thousands of red-shirted Chávez supporters “collapsed into stunned silence. Some began to sob.” By contrast, “middle-class areas of Caracas erupted in jubilation. Housewives leaned out of windows banging pots, cavalcades of cars honked horns and couples danced salsa in the streets.”[1] For the first time since the election of Chávez in 1998, the rich in Venezuela had something to celebrate, and the repercussions are still unclear.

The vote itself could not have been closer – 4,504,354 votes against, (50.70%) and 4,379,392, (49.29%) for the proposed changes. Importantly, this result did not represent a sharp increase in the numbers of people opposed to Chávez. The “No” vote was only 100,000 more than the votes against him in the 2006 presidential election. The real story was the decline in those voting with Chávez. The “Yes” vote was 2.8 million fewer than the numbers who voted for Chávez the previous year.[2] In other words, the referendum was defeated – not because of a sharp growth of right-wing forces, but because of a sharp decline of those willing to back the Chávez referendum initiative.

And at one level, it is not a defeat at all. In accepting the decision of the voters, Chávez made it very difficult for his opponents to call him undemocratic. The process itself was remarkable as an exercise in public participation. According to Bernardo Alvarez Herrera, Ambassador of Venezuela to the U.S.: “from August 16 to October 7 – some 9,020 public events were held ... Over 10 million copies of the reforms were distributed to the public, and one poll found that over 77 percent of the Venezuelan people had read them.”[3] Further, the constitution up for amendment, was already an extremely progressive Chávista document – the product of a 1999 popularly elected Constituent Assembly. According to respected Venezuela commentator Maria Paez Victor:

It guarantees the rights of women as well as children; full rights over land, culture, and language to Aboriginal peoples, includes environmental rights, and enshrines public participation. It also guarantees social human rights such as the right to health care, education, work, and food. And thus, it has given the state a role not just as guardian, but also as a promoter of civic and social rights. It is unique in that it recognizes the right of housewives to social benefits, it specifically uses both female and male nouns and pronouns – thereby asserting the active role of women – and it gives constitutional parity to all international human rights treaties signed by Venezuela.[4]

But Victor and all other serious commentators agree that the vote was a defeat for the revolution, and the reason this defeat has to be taken seriously is not because of electoral considerations (counting the number of votes), but because of the social dynamics the vote has revealed. Specifically, the campaign against the reforms created a context in which the right-wing in Venezuela could unite and effectively mobilize – really, for the first time in a decade. This newly unified opposition included some prominent individuals and organizations, including Chávez ex-wife Marisabel Rodriguez, the social democratic party Podemos, and former defence minister Raul Baduel.[5] The unifying of an anti-Chávez opposition – especially one with the connections to the military represented by Baduel – is an event to be taken very seriously indeed.

The opposition was able to take advantage of the complexity of the referendum. August 15 2007, Chávez presented 33 amendments. The National Assembly then held a three round debate, and proposed an additional 36 amendments for a total of 69. The reforms ranged from decreasing the working week to institutionalizing funding for the new communal councils, to ending limits on the presidency. This complexity was clearly a problem. The merits of individual reforms were easily lost in the sheer magnitude of what voters were being asked to decide on. In this confusion, the right-wing seized on the proposal to end limits to the presidency, seeing in this an attempt by Chávez to stay in office in perpetuity – a silly point, given the fact that in any parliamentary (rather than presidential) democracy, there are often no limits on the term of office for the head of state. A good example would be, well, Canada.

On top of the complexity, there was the question of time. The official campaign lasted from November 2 to December 3 – an amazingly short time given such a complex question. At one level it is incredible not how many people stayed away, but how many people showed up to vote, in spite of these obstacles.

Greg Wilpert insists, however, that the vote reflected deeper problems. He argues that there has been a “souring of the mood” among the poor and workers who are the base of the Chávista movement. Many of Chávez’ supporters believe:

... the government's public administration had become inefficient and many of the president's supporters wanted to send him a message. As the human rights group Provea reports, the social programmes, the missions for community health care, literacy training, high school completion, public housing, subsidised food, land reform, and employment through the creation of cooperatives, have all been deteriorating in the past year. While pro-Chávez poor Venezuelans appreciate the increase in social programmes and spending over the past four years, they are disappointed and frustrated at the inefficiency with which these programmes are managed. It did not help that there was a severe milk shortage in October and November, which made it almost impossible to find fresh milk, and hard to find powdered milk.[6]

This is a dangerous situation. Chávez has massively raised expectations, talking about “21st century socialism.” But the reality is, socialism is not on the agenda any time soon in Venezuela. The country is massively poor, handicapped by the terrible legacy of colonialism and neo-colonialism, and facing an extremely powerful enemy in the shape of Imperialist North America (including both the United States and Canada). The Chávez project has accomplished many things – but they are at the level of reforms and the assertion of national independence. If these are painted with the gloss of the struggle for socialism, the potential for massive demoralization is very real, as the grim everyday reality of oppression and exploitation grinds on for Venezuela’s impoverished millions.

Having raised expectations too high, Chávez now has put out signs that he may be turning in the other direction, and setting them too low. In a confusing televised address January 6, 2008, Chávez on the one hand said that “we’re going to continue to move forward in creating a socialist fatherland,” but that at the moment would mean a sharp change of pace. “We couldn’t expand the framework, we couldn’t increase the perspective and we couldn’t accelerate the pace” he said. “I’m obligated to put on the brakes.”[7] If the brakes need to be put on, it is of abstract talk about “socialism” in the face of the bitter reality of class society. In terms of pushing for reforms of that society, the gas pedal is required, not the brake pedal.

One week after the referendum defeat, a huge step towards Latin American integration took place with the announcement of the “Banco de Sur” – the new South American development bank. This was a joint initiative of the governments of Venezuela, Brazil, Argentina, Ecuador and Paraguay,[8] and is designed to continue the process of freeing Latin America from the underdevelopment clutches of the International Monetary Fund and the World Bank. This is a fantastic assertion of regional independence, and is in line with Venezuela’s moves to become a full member of the trade alliance, Mercosur.

One of our jobs in the solidarity movements of the Global North is to defend these assertions of independence from imperialism. But in themselves, they are perfectly compatible with capitalism. It is interesting that a senior member of Brazil’s government sees the referendum defeat as being a useful event, something that “for the purposes of inclusion” into Mercosur, the referendum defeat could actually help.[9] From the standpoint of the social movements, this is a terrible logic. A defeat which partially demobilizes the mass movement, and gives confidence to the right wing is not a useful event even if it greases the wheels of a business deal like Mercosur. Too far down the road of mass demoralization and right-wing unification, and increased violence against the revolution cannot at all be discounted. The history of Latin America is littered with examples of attempted revolutions where a demobilized mass movement has been left vulnerable to counter-revolution.

We build solidarity for the Chávista stand against imperialism for what it is – the assertion of sovereignty and independence. But we do that solidarity work no service by “painting it in communist colours” to borrow a phrase from the Russian Marxist Vladimir Lenin. In this, we can take heart in the fact that in all revolutionary processes such as that unfolding in Venezuela, there are thousands who move towards a vision of a future based, not on electoral considerations, but the self-activity and self-organization of the poor and the working class.

© 2008 Paul Kellogg

References

[1] Rory Carroll, “Shock and celebrations as voters stall the Chávez revolution,” The Guardian, December 4, 2007, www.guardian.co.uk
[2] Information taken from Alan Woods, “Venezuela: The referendum defeat – What does it mean?”, venezuelanalysis.com, December 4, 2007
[3] Bernardo Alvarez Herrera, “Reforming Venezuela’s Consitution,” venezuelanalysis.com, November 20, 2007
[4] Maria Paez Victor, “Mr. Danger and Socialism for the New Millennium,” ZNet, March 29, 2006, www.zmag.org . To read a copy of the constitution, see www.venezuelanalysis.com/constitution
[5] Gregory Wilpert, “Venezuela’s Revolution Checked,” ZNet, December 24, 2007 www.zmag.org
[6] Gregory Wilpert, “Venezuela’s Revolution Checked”
[7] Matthew Walter, “Venezuela’s Chavez to ‘Put Brakes on His Revolution (Update1)”, Bloomberg.com, January 6, 2008, www.bloomberg.com
[8] Jude Webber, “S America launches Banco del Sur,” Financial Times, December 11, 2007, www.ft.com
[9] “Referendum results to Help Venezuela Enter Mercosur,” eluniversal.com, December 7, 2007

Lois Dowson Bédard - a life for the struggle

Lois Bédard Dowson died December 14 2007, just shy of her 84th birthday. She was, for all her adult life, a committed revolutionary socialist in the tradition of Leon Trotsky. In the context of the Great Depression of her growing years, the rise of fascism and Stalinism in her teens, the horror of World War in her young adulthood – living a life as a revolutionary was not the easiest of choices. But Lois unlike many others, never wavered from her commitment to the left, to the working class, and to the women workers to whose future she was so completely dedicated.

For those in Lois’ era who dedicated themselves to revolutionary socialism, theirs were often lives lived in obscurity. But in the 1960s and early 1970s, the then unified Trotskyist movement in Canada went from a small group of a few dozen, to an organization of hundreds, and played an indispensable role in the movement against the war in Vietnam. However, as the war went into its end game from 1973 to 1975, the political terrain became very complex. After a bitter faction fight, the Trotskyist organization split, and Lois ended up in one of the smaller fragments – the Socialist League, which would later become the Forward Group.

“Life is what happens to you
while you’re busy making other plans.”[1] John Lennon wrote those words in a different context – but it is a way to think about Lois Bédard’s life and struggles in the years that followed. Lois – often literally arm in arm with her sister, Joyce Rosenthal – was one of those group of activists who were able to rise above the difficult internal life of the left, and keep the struggles of the working class at the centre of their activities.

One of the big issues confronting workers throughout Lois’ life, was the oppression of women workers. In a 2001 study of women workers, Meg Luxton wrote that: “The labour movement in the early 1960s, based mainly in male-dominated occupations, was organizationally overwhelmingly male.”[2] The situation had improved somewhat by the 1970s, but there remained major problems. In March 1976, Bédard was in at the ground level of the founding of Organized Working Women (OWW).[3] OWW played a key role in some of the key class battles of the day. According to Luxton:

After two organizers from the Retail and Wholesale Department Store Union (RWDSU) attended an OWW conference in early 1985, union women and women’s liberation activists formed a Women’s Strike Support Coalition which met regularly throughout the rest of the strike, organizing strike support ... The striking Eatons’ workers were cheered when they spoke at the Toronto International Women’s Day rally on 9 March 1985 and the march itself detoured through the flagship store at the Eatons’ Centre, plastering "Boycott Eatons" throughout the store. The striking women and the women organizers from RWDSU were clear that the support from the women’s movement was very important in helping them stick out the long strike through the winter.[4]

Bédard was also centrally involved in another key struggle of the 1970s and 1980s – the fight for abortion rights. The year, 2008, marks the 20th anniversary of the Supreme Court decision which overturned the old abortion law, effectively decriminalizing abortion in Canada. Whipped into a rage by this, the anti-choice right wing began organizing assaults on abortion clinics in the late 1980s, and the front lines of the struggle for women’s rights were in front of those clinics – linking arms to keep the bigots out, and to allow women to enter. Long-time socialist and feminist, Judy Rebick, gave a moving tribute to Lois at her funeral, saying that Lois Bédard and Joyce Rosenthal, were always at the centre of this struggle – an inspiration to the younger women who were moving into activism.

This rich period of political engagement was cut short in 1988 when Lois’ brother – Ross Dowson – suffered a debilitating stroke. Ross had been a leader of the Trotskyist movement since the 1930s, and Lois devoted the next 14 years to his care, until his death in 2002. But in spite of this difficult personal burden, Lois kept a keen interest in politics. In 1998, at a packed Toronto meeting marking the 150th anniversary of The Communist Manifesto, Lois was there, pushing Ross in a wheelchair. And after his death, she was a regular participant in the annual Marxism conference in Toronto. She would of course pay attention to the sessions on women’s liberation – her commitment to feminism never wavered. But she was also opposed to women being ghettoized into just talking about women. I can still hear her pulling one woman speaker aside and saying “don’t just speak about women – do the other important stuff, do the economy”.

Lois was pre-deceased by not just Ross, but by her sister Ruth and her other brothers Murray, Hugh and Jerry. Murray and Hugh were also lifelong socialist activists. Her sister Joyce is alive, but now unfortunately politically inactive due to illness. We have to know that the work of our generation would have been far harder without the work done for decades by fighters like Lois Dowson Bédard. There will be a meeting to honour her life in Toronto January 20, 5 p.m. at the Steelworkers Hall, 25 Cecil Street.

© 2008 Paul Kellogg

References

[1] John Lennon, “Beautiful Boy (Darling Boy),” Double Fantasy (Santa Monica: Geffen Records, 1980)
[2] Meg Luxton, “Feminism as a Class Act: Working-Class Feminism and the Women’s Movement in Canada,” Labour/Le Travail, 48, Fall 2001, p. 69, www.historycooperative.org/journals/llt/48/03luxton.html.
[3] Luxton, p. 71
[4] Luxton, pp. 86-7.