Challenge for the Left

Against the Current, No. 34, September/October 1991

James Petras

THE RISE OF neo-liberalism and the transformations of the 1970s and 1980s have created the conditions for a new round of wars, economic crises and social upheavals. World-historical changes are taking place at an accelerating pace. For the Left to successfully intervene, it must come to grips with the scope and depth of these changes and identify the weak links in the system propelling them.

“Neo-liberalism,” as the term will be used here, means a general assault on the role of the state as a regulator of investment and as a productive economic factor, an attack on the social protection afforded by the welfare state; the politics of de-regulation (the dismantling of laws protecting home markets, labor, the environment, etc.); and a strategy for growth through the stimulation of investment rather than demand, concentrating on the formation of wealth at the top rather than its re-distribution toward the bottom of society.

The 1970s and 1980s were a period of neo-liberal counterrevolution throughout the world—accompanied by machine guns and death squads in the South (Third World) and by constitutional repression in the North (developed world). Social polarization was inherent in the changes imposed by ascendant neoliberals, with reconcentration of income at the top of society, marginalization at the bottom and impotence in the middle. Finance and real estate speculation over-expanded relative to productive activity. New economic structures rooted in financial power and international corporations—linked through private electronic circuits—undermined domestic markets and shifted state subsidies from welfare programs to socializing private capital losses.

The neo-liberal counterrevolution and ascendancy of speculative-finance capital is the first of seven transformations that can be identified since the 1970s. The second is the increased race among the three major capitalist powers (the United States, Germany, and Japan) to carve out imperial blocks that can penetrate and expand in the markets of competitors. The revival of inter-imperial rivalries among capitalist countries in the arena of the world market has replaced the bi-polar conflict between the United States and the Soviet Union; implicit in the uneven development of military and economic power is the likelihood of an attempt by the United States to impose its military supremacy.

The third transformation of the past decade has been the disintegration of Stalinism and (as left-socialist opposition remained marginal) the ascendancy of neoliberal regimes throughout Eastern Europe and in many of the Soviet Republics. This weakened trade and aid opportunities for anti-capitalist movements in the Third World. The relentless application of free market capitalism in both Eastern Europe and the Third World opened the door to intensified Western pillage, accompanied by a downward spiral of living standards with no end in sight. The other side of the dialectic of Stalinist collapse, however, is the strategic opportunity to construct new movements and visions of democratic collectivism against both the bureaucratic authoritarianism of Stalinism and the pillage and violence of the “free market.”

The fourth transformation is the extension of electoral regimes to vast areas of the Third World and Southern and Eastern Europe previously ruled by military regimes and one-party dictatorships. The process, dubbed by the mass media as “transitions to democracy,” was largely inserted into authoritarian state structures and elitist economic systems that immediately defined the political-economic agenda for the electoral regimes: to provide legitimacy to the neo-liberal model, facilitating Western pillage.

The fifth transformation is a cultural transformation rooted in the practices and ideology of neo-liberalism. On one hand, the belief that “greed is good” and upward mobility at any cost became the marching songs of progress; on the other, police were increased to enforce the insulation and segregation of the economy of the wealthy from the decaying life of the pool: The Third World was imported into the heartland of the West in massive illegal immigrants to be super-exploited at costs below those of “national reproduction;” and in the growth of a class of homeless people as real estate capital became the center of speculation and wealth, closing industries and raising rents.

The sixth transformation is the world-wide ideological and political integration of traditional social-democratic and Communist parties into the neo-liberal project and the conversion of many ex-Leftists of the 1960s to the same process. From Southern Europe to South America, from Paris to Barcelona, and from Warsaw to Managua, ex-Leftists joined the celebration of the market as the most efficient mechanism for organizing the very economies that were disintegrating under the market’s hammer blows. This integration of traditional parties—coupled with the flight of intellectuals from the movements to the institutes—deepened the tremendous gap between the political-electoral intellectual stratum and the mass of victims of neo-liberal economics.

The seventh transformation was in personal values and relationships: Personal power became the supreme value of both elites and their supposed adversaries; social solidarity was stigmatized, disdained or related to marginal groups. The privatization of life increased; the ideals of the ruling class found expression at all levels of society as drug dealers imitated speculators. Love became sex, sex became exercise, exercise became fitness, fitness became food: All became commercialized. The informing principle was the “war of all against all.”

The Great Transformations

But these transformations have not ended history. On the contrary, they set in motion a new set of challenges, conflicts and crises that define conditions for revolutionary politics in the 1990s. They left a deep mark on the structures of the state, classes, economy and culture. Industrial workers have been transformed into self-employed or low-paid service workers; industrialists are replaced by financiers and speculators, engineers by investment advisors. The poor have become street people.

The state is more directly tied to socializing (i.e. bailing out) capital losses and privatizing (selling off) profitable public enterprises. The world economy is floating on a mountain of debt and credit-financed consumption. The class structure is increasingly polarized between an affluent 15-20 percent—who operate through private circuits of education, health, communications and transportation—and the rest, who depend on disintegrating public services.

These transformations place us at the beginning of anew period—one characterized by the unmasking of the neo-liberal counterrevolution, the unraveling of the emergent New World Order and the unfolding of economic, social, ecological, cultural and political crises that cross national boundaries.

The Stalinist stagnation crisis in Eastern Europe and the Soviet Union has not been remedied by the new neo-liberal regimes. On the contrary, the region has experienced an unprecedented slide according to almost all social and economic indicators. Millions have lost their jobs, housing, social welfare and farms. Hunger, homelessness and destitution have deeply stricken many. The new regimes are virtual intermediaries of the International Monetary Fund, World Bank and Western governments and banks.

In the former East Germany, West German capital has taken over markets, forced closure of factories and threatened to idle half the labor force in a fashion that resembles England’s colonial conquest of India. In Hungary, Budapest is known today as “Bangkok”; porno-capitalism featuring child pornography represents one of the few growth sectors. The monumental gap between the neo-liberal promise and its miserable reality is the most obvious point of confrontation and crisis.

Despite their hostility to official Communism, and despite free market propaganda, the great majority of working people in the East remain opposed to profiteering and property privileges while being for full employment, social welfare and social services—in short, for basic socialist values. The socio-economic crisis unfolding under neo-liberalism erodes the hegemony and legitimacy of the free-market governing classes. The outcome of that catastrophe is not pre-determined: A new round of class, ethnic, racial and gender struggles is emerging. Many outcomes—from emigration to further immiseration, from chauvinistic national wars to dynamic social movements—are all possible, depending on political intervention.

Militarism and Imperialism Revisited

Meanwhile, the declining global power of the United States has been accompanied by an escalation of its military intervention. In 1983, Washington sent 20,000 Marines to Grenada—an island of 120,000—killing and wounding hundreds of Grenadians while destroying schools and hospitals. In 1989,30,000 U.S. soldiers executed a combined air and ground attack against Panama—a country of 3 million—with a result of thousands of civilian casualties and the destruction of whole neighborhoods. The 1991 slaughter in Iraq—a country of 17 million—was carried out by 450,000 ground soldiers and tens of thousands of sailors and Air Force pilots, who collectively inflicted hundreds of thousands of casualties and destroyed complete cities.

Besides the escalating scope of military operations, the increase in the size of the countries attacked and the destruction inflicted, the narrowing timing of intervention should be noted. Between Grenada and Panama six years elapsed—between Panama and Iraq, a year and a month. U.S. intervention is also moving from symbolic marginal areas to centers of strategic importance for the world economy.

In Grenada, intervention was undertaken to reassert absolute U.S. domination in its traditional area of imperial control (the Caribbean) and to weaken anti-intervention sentiment at home. The invasion of Panama was to reassert U.S. control over the Canal and tighten the U.S. economic blockade of revolutionary Nicaragua—while strengthening interventionist Congressional and public opinion and providing a testing ground for larger interventions elsewhere. Rapid military victories de-sensitized public opinion to the larger imperial agenda—reinstalling the notion that patriotism and imperialism are interchangeable.

After Iraq—where the United States succeeded without costly losses—who is next? It would be willful blindness to ignore the relationship between U.S. economic decline and its increased military aggression, as it would be myopic to ignore the military escalation from “periphery” to “core” countries.

New World Order: Reasserting U.S. Power

Contrary to social democratic and Gorbachevian wishful thinkers, the end of the Cold War has not brought an era of “New Thinking” and peaceful cooperation. Rather, we are entering the passageway to larger and more violent confrontations: The states that combine today to defeat the Third World will fight each other tomorrow over the plunder, the costs and the new alignments of power.

For the Left, the two-fold challenge of militarization is to resist the first wave of state and mass media-induced chauvinism, and to prepare for the second round of mass disillusion and discontent as the costs of war mount and the confrontations come closer to home.

The 1970s and 1980s, particularly after the demise of the Soviet Union as a global power, witnessed the emergence of a three-way power configuration anchored in the three main capitalist powers—Germany, Japan and the United States. Economic competition and conflict over global supremacy became increasingly evident in trade negotiations. The initial vision of a new world order of cooperation in joint exploration of the Third World and Eastern Europe gave way to the gradual emergence of competing regional blocks: Asia under Japanese dominance; Europe under Germany; the Americas under the United States.

But in this world of inter-imperial market rivalries the United States holds an inferior position: Its “comparative advantage” lies in its military and ideological apparatus, not in its productive structure. Washington’s vision—as laid bare in the Gulf invasion—is a military-centered hegemony that links Third World rentier states (e.g. Saudi Arabia) and political clients dependent on its military forces to press Germany and Japan to finance U.S. deficits and to disengage from U.S. markets.

This military-centered vision conflicts with German and Japanese conceptions of an economic “New World Order” As international competition intensifies among the regional centers, they will heighten their exploitation of “their” own regions. Thus Germany exploits the East; the United States promotes free-market doctrine to take over existing markets in Latin America—trading debts for locally owned enterprises in a wholesale pillage of resources; and Japan tightens its links with Asian markets and raw materials while transferring financial investments away from the United States and to Asia.

U.S. military power, influence and pressure was directly and indirectly involved in the violent seizure of power by the neo-liberal military regimes in Latin America. In Central America the United States financed the death squad armed forces in El Salvador, trained the murder machines in Guatemala and organized and directed the Nicaraguan contras. In Argentina, Chile, Uruguay and Brazil similar support was extended: Neoliberal regimes and economies were imposed by violence, not because nationalist Keynesian or socialist policies had failed.

The military-ideological capacity of the imperial state was effective in fashioning the neo-liberal counterrevolution. But there is an enormous discrepancy between this military and ideological power, and the concomitant economic incapacity of the United States to build viable client economies. The contradiction is evident even on a small scale: In Grenada the economy stagnates, unemployment is above thirty percent, and no new investments flow. In Nicaragua and Panama a similar picture emerges. On a grander scale, the United States “won” the Cold War in Eastern Europe while losing the ensuing economic competition to its rivals.

Post Post-Industrialism

Another point of rupture in the 1990s involves the crisis of the very “post-industrial” economies created by the previous decades’ “re-structuring” of capitalism. Contrary to the optimistic forecasts by the ideologues of “post-industrialism”—who argued that capitalist crisis was a thing of the past with the advent of the “service economy” and high technology—economies in the West slide toward negative growth, throwing millions of service workers, yuppies, investment and real estate brokers out of work while the bankruptcy of banks approaches record levels for recent decades.

The ideologues of post-industrialism completely ignored the degree to which “high technology” itself is dependent on financial speculation—not an independent economic factor. They failed to realize that the “restructured” capitalism of “services” still depends upon production of real goods and social services. Yet the expansion of speculative services occurred on a narrower and shrinking base of production, in which speculation eventually fed on itself—buying and selling enterprises as commodities beyond their productive worth while undermining the capacity of producers to consume and to produce.

It is ironic justice that the.very system that the neo-liberals created is devouring its children. The first victims of this crisis are the very nouveau riche, speculators, and yuppies who were initially responsible for driving workers out of their factories and low-rent tenants out of their apartments. More to the point, in this first crisis of post-industrial economies, the collapsing service economy has absolutely no “cushion” to rest on—except for the state, itself severely drained of income and already heavily indebted by the previous decade’s highly artificial growth. The financial-real estate-service economy has undermined the industrial basis for recovery.

Not only are post-industrial economies subject to cyclical crises, but the likelihood of prolonged and deepening recession is thus much more likely than in the earlier crises of industrial society. Moreover, the increasing links between the dominant financial sectors of all major capitalist countries means that the crisis will extend on a world scale, forcing each state (principally Japan and Germany) to erect barriers and constraints on the effects of the crisis emanating from the most “post-industrial” states: the United States and England.

In the short run, downwardly mobile yuppies—true to their background—will scramble individually, personalizing their problems and seeking private solutions. Nonetheless, the crisis of post-industrial capitalism adds bank depositors, homeowners and skilled technicians to the large numbers of former industrial workers, immigrants, minorities and women who were adversely affected by the previous capitalist “restructuring.” The widening net of affected social classes has created a very skewed and contradictory polarization.

The challenge for the Left starts with an understanding of the new layers created by the neo-liberal restructuring, as well as the different points at which conflicts emerge—over work, housing, credit, and (repossessed) consumer goods. The most difficult task will be to fashion a program that brings together the victims of the first wave of capitalist restructuring with the former victimizers turned victims from the second wave The programmatic challenge is to articulate an alternative that avoids a return or recovery of the “service economy” as well as a return to previous high-pollutant “industrial society”—one that links high technology with low-pollutant productive industry.

The Perils of Manufacturing Consent

A further crisis of the 1990s involves the declining legitimacy of electoral regimes. These regimes, tied to neo-liberal global political economy, have profoundly alienated voters East and West, North and South.

In the last Congressional elections in the United States, only thirty-six percent of the voters turned out In Hungary and Poland—the so-called new democracies—elections now attract a minority of potential voters, as the policies of the elite inflict terrible punishment on the population. In Colombia, less than twenty-five percent of the electorate vote; in the totally corrupt Mexican elections, less than a third. Similar trends are evident throughout the region.

Voter alienation is similarly evident in Western Europe, as the differences between the traditional Left and the conservatives converge around the neo-liberal agenda while the Communist Parties shrink in the face of their incapacity to respond to the crisis. Soccer matches attract more attention than political campaigns: They provide a distraction from the political deceptions, economic insecurities and hardships which are the bitter legacy of policies of the political elite.

It is becoming increasingly common to read and hear people say that electoral regimes “are not the same” as democracy. Even bourgeois social scientists “explain” that it costs $10-20 million to elect a U.S. Senator The gap between the electoral political elite (and their media and academic publicists) and the populace is widening, extending particularly to young people who bear the brunt of the crisis and see no electoral parties addressing their interests.

Direct action movements are emerging to address the post-industrial crises, the militarization threat and the neo-liberal counterrevolution. These movements, working to extend the rights of the excluded, involve women struggling to reverse the neo-liberal offensive which increases their dependence, strips them of social welfare rights and commodifies them on the porno-market; and ecologists struggling to reverse the operations of the market degrading the environment.

The movements have made forceful claims in contested arenas and carved out areas of ecological and social reform. But as the 1980s advanced under the neoliberal counterrevolution, it became evident that such changes were reversible. The so-called democratic revolutions in Eastern Europe revoked maternity leaves, abortion rights and nursery centers as part of their project of capitalist restoration and competition for Western investment. In the West, environmental restraints on energy exploitation are phased out in the United States as the politics of ecological plunder return.

The Road to State Power

Clearly, the movements’ pressure politics was a good starting point, but not enough; it ignored the issue of state power This was brought home with stark clarity by East Germany’s New Forum, which failed to convert the movement of 1989 against Stalinism into a movement for taking power Thus the West German political machines moved in, marginalized the movements and took over the state.

The movements at their best contain the embryo of a new power popular assemblies, direct elections and public debate. Movements on the Left face an unprecedented opportunity and challenge: to insert themselves in the gap between the neo-liberal electoral class and the abstentionist alienated majority, creating through the movements organizations of political power to control territory, factories, community services and land.

The road from direct action to state power lies through the multiplication of local popular assemblies confronting issues of direct interest to the people. The future of popular-based social and economic changes does not he in parliamentary elections, given their elitist structure and the control exercised over the process. Movement politics linked to electoral campaigns has no future; nor does simple direct action in defense of particular local terrain. The future of movements must be rooted in creating autonomous electoral power anchored and coordinated with regional or national movements of direct action—dress rehearsals for creating a new state power response to civil society.

Ste disintegration of civil society is itself a crisis and a challenge. The neo-liberal offensive has reduced living standards in Africa to levels lower than on the advent of independence. In Latin America the decay is palpable as one watches millions of refugees—uprooted by counterinsurgency wars and export agriculture-crowded into urban shacks. Armies of the poor invade the downtown streets and plazas. Nineteenth-century diseases such as cholera, yellow fever, malaria and tuberculosis multiply under the impact of cuts in expenditures for health, education and infrastructure.

The disintegration of national health and the growth of mass epidemics in Peru, Brazil and elsewhere, coupled with the virtual silence in the Western media and states concerning their responsibility, is part of a general problem—the deliberate de-sensitization of the Western world concerning its responsibility for the plagues and mass murders it inflicts on the Third World.

The 1980s can be seen as a turning point Previously Western opinion had at least paid lip service to military violations of human rights in Latin America and to fain-me in Africa. It was in the 1980s that the Western public was gradually accustomed to mass killings by pro-Western (.generally U.S. client) regimes.

The new electoral regimes, far from dismantling the murder machines, have provided them with a pseudo-legitimacy and impunity for past and present crimes. The West’s moral disintegration and acquiescence in the crimes against humanity in Central America was the prelude to the mass media’s active complicity in the mass bombings of the cities of Iraq.

Liberals, Social Democrats and Christian Democrats have abdicated their moral responsibility by complicity in mass terror in the Third World. This moral vacuum creates another opportunity and challenge for the Left to fight aainst the acceptance of bureaucratic mu-tines of mass killings, by informing the conscience of the populace and formulating new moral standards that destroy the techno-imperial myths. People do sense that they are being lied to about Central America and the Middle East, even if they cannot smell the bodies or see the eyes gouged out.

Beyond Post-Fordism

As the neo-liberal model crumbles, the strategy of the ruling class is to insulate itself from the rest of society, while using mass spectaculars and overseas wars to distract the masses and encourage them to externalize their aggressions. But even here, the mass spectaculars turn into street wars; soldiers returning to the ghettos develop deep resentment after serving the rich and coming home to poverty; media propaganda repeated too often loses its effectiveness.

So the dialectic of opposition emerges. But contrary to Marx’s expectation, the society of self-organized producers (socialism) will not result from the “socialization” of today’s existing capitalist economy. What relations do the millions uprooted by speculative capital have with stock markets, leveraged buyouts and office buildings? Socialism cannot grow out of a capitalism that atomizes producers, destroys communities and breeds passivity and individual violence.

Within an economy of pillage, there is little from which to build a new society Organizing and struggle must begin outside in the streets, assemblies and communities that encircle the institutions of pillage—where it can prepare to take them over, uprooting them and the surrounding “hot air” industries (lawyers, publicists, market and public relations experts, etc.).

Marxism’s ongoing relevance, then, must be built upon the notion of class exploitation and class struggle. I am suggesting here that the alebraic symbols “classes” and “class struggle” are historically and socially determined and specific to each phase or type of capitalism. In the present phase, classes of workers and capitalists share center stage with a mass of uprooted young people—with specific gender, age and racial content–who confront a concentration of “fictitious” (i.e. not based in production) capital.

This “class conflict” does not just take place at any particular productive site, but throughout society. It is a total struggle in the sense that the survival and reproduction of fictitious capital depends not on healthy, educated workers—as was the case under industrial capitalism—but through their continual and deepening marginalization (and perhaps, in the most extreme case, physical elimination).

To be useful, Marxist concepts must recognize and incorporate the new realities of restructured capitalist class systems. The concept of class struggle must be deepened, looking at new sites of conflict and new organizations of combat While trade unions and electoral parties grew out of an industrial structure, it is sociopolitical movements reflecting greater social and cultural heterogeneity that can best respond to the needs of new struggles.

When real estate interests claim the land sites of the poor, the executives organize the army and police to precede the bulldozers. By the time of new elections, the neighborhood will be a parking lot; by the time Congress investigates, steel and glass office buildings and luxury apartments will already be in place. Increasingly confrontational politics of militant executive direct action can only be answered by collective direct action from the movements.

For a Marxist Alternative

The world emerging from the neo-liberal model resembles less John Stuart Mill’s liberal utopia than a Hobbesian “war of all against all.” The Marxist alternative to such a world must be built on three interrelated but tension-racked pillars: First, socio-political movements of the uprooted and the marginal (e.g. squatters) whose allegiance and interests can only be sustained by direct ac-lion. Second, political parties and trade unions linked to industrial workers as well as public and private employees which can join industrial action and electoral politics. And finally, internationalist movements of environmentalists, women, gays and solidarity groups, which combine and oscillate between the previous two groups through the style and nature of their politics.

The first of these has the most revolutionary style of politics but is difficult to sustain; the second has continuity and institutional solidarity but tends to become absorbed in routinized channels of opposition; the last has continuity and militancy, but avoids a comprehensive revolutionary strategy in favor of sectoral demands and pressure politics. The challenge for the Left is to simultaneously transcend electoral parties’ inertia, build direct actions from the local to the national and international levels, and bring to the social movements a revolutionary conception of power.

Why speak of revolution in a time of counterrevolution? Because the triumph of neo-liberalism is built on sand. Because objective realities are creating conditions for confrontation. Why “revolution” and not “reform”? Because we face not a local war, an occasional lie or a small-time racist, but a conflict of deep structural forces that moves across borders and defines an entire historical period.

Today, to be rational is to be revolutionary. It means resisting the irrationalism that talks of intelligent bombs which kill thousands; that pretends to destroy military targets while devastating cities; that finances death squads to murder a quarter of a million peasants in Central America in the name of Western democracy; that saturates its media with military strategies, goals and pundits, militarizing the culture and turning millions into reflex flag wavers. Solidarity, movement, action and the courage to sustain rationality: That is what it means to be a revolutionary today.

The old order is dying, threatening to bring us down. The new order is struggling to be born.

September-October 1991, ATC 34