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Article in the New York Times today: Geithner Said to Have Prevailed on the Bailout. And over whom has Geithner prevailed? Dissenting voices in his own administration:

In the end, Mr. Geithner largely prevailed in opposing tougher conditions on financial institutions that were sought by presidential aides, including David Axelrod, a senior adviser to the president, according to administration and Congressional officials.

Mr. Geithner, who will announce the broad outlines of the plan on Tuesday, successfully fought against more severe limits on executive pay for companies receiving government aid.

He resisted those who wanted to dictate how banks would spend their rescue money. And he prevailed over top administration aides who wanted to replace bank executives and wipe out shareholders at institutions receiving aid.

Yves Smith at Naked Capitalism is calling the Geithner plan a fiasco:

In other words, Geithner followed the Paulson script of pushing hard to make the bailout industry friendly, to the extent of compromising the effort to get the plan fleshed out in adequate detail.

Smith is probably right that the plan won’t be much better than the one we got last fall from Paulson, though I think her general pessimism is misplaced. Geithner’s plan prevailed over countervailing opposition from David Axelrod and others within the Obama administration pushing for far more radical control over the banks we’re bailing out. It makes sense that the Obama administration would divide internally over how to deal with this problem and many others. Obama wasn’t elected by the left on a platform of social-democracy. He was elected by a coalition of students, white collar workers, blacks, and disaffected Republicans. The economy is the issue where mainstream American politicians tend to be the most conservative. The fact that the Obama administration is governing from the center and even from the same position as Bush on these issues at the moment shouldn’t come as a surprise.

Nevertheless, due to the severity of the situation we’re facing—the worst economic disaster of a generation, possibly a century—I expect the tone coming out of the White House to change rapidly. If this banking bill doesn’t sufficiently turn things around, it’s going to strengthen voices of opposition within the Obama administration, and we can expect even a drastic push to the left: not just caps on executive pay but also greater control over what institutions can do with bailout money. Geithner could easily be gone in a year.

The problem with Smith’s analysis and the analysis of those who take a “screw the Democrats” line isn’t that their criticisms of the plan are flawed but rather that they don’t take a nuanced-enough attitude toward politics in general. The Obama administration is hardly a homogenous body—to say nothing of the Democratic Party as a whole. The diverse interests present in the administration reflect the diverse class interests that brought Obama to power. While the interests present in the Bush Administration were uniform by comparison—representing a Dukes of Hazard mentality toward the world—one can begin to see the rudiments of actual class struggle playing out in the White House. I say “rudiments”, because there is hardly an open struggle right now between the interests of the people and the interests of the bourgeoisie. But it’s going to be impossible for Obama to continue to govern in the interests of a portion of his constituency which is growing in power while at the same time catering to the received wisdom of the financial markets that got us where we are. People are really fed up not just with the greed but with the seeming arbitrariness of the whole system, they want substantive change, and they’re not going to be able to get it so long as the Obama administration keeps one foot in the policies of the Bush administration. The class conflict we see playing out in the open is going to push him further to the left.

I initially wrote this as a reply to Jake off my previous post about capital being “diseased”. I’m trying to apply some of the ideas I’ve been picking up from reading Harry Cleaver’s Reading Capital Politically. I’m also trying to put them together with the more philosophical readings of Marx (which Cleaver would probably reject). But I thought the ideas in my reply were important and controversial enough to reproduce them in their own post.


I don’t think the capital social relation is idiotic or stupid exactly. (Though I do think it is counterintuitive and destructive.) It has a rationality to it, and understanding capitalism is equivalent to understanding that rationality. But to my mind there has been no comprehension of the essence of the capital social relation that was more fundamental than that provided by Karl Marx in Volume 1 of Capital. And what Marx shows there is that the rationality of capital is inherently contradictory. This contradiction is more often than not understood as the inevitability of “crisis” in capitalism. It is less often understood as the inevitability of resistance to capitalism by the working class.

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Often I encounter bright, worldly, middle class people my own age who are critical of capitalism and aware of its injustices but whose disillusionment of one form or another prevents them from seeing socialism as a viable alternative to what we have now. I was having drinks with two such people last night—old friends of mine who radicalized me in my teens—and one of them raised the following question which I’ve heard many times before: Doesn’t human nature make socialism or really any alternative to capitalism impossible? Don’t we have a “natural” system set up now that rewards innovation, punishes laziness, and which channels our innate animal aggressivity?

I’ll admit the amount of lager in my system preempted a considered response, but here is at least the beginning of one: though the question of where society leaves off and nature begins is one we cannot answer, we can say with certainty that the capital social relation is not natural in the least. Capitalists had to violently impose the commodity-form on labor. They had to kick people off the land. Without access to the means of production, people could no longer grow food to feed themselves and their families. They had to buy it from the capitalist with wages “earned” from working in the capitalist’s factory. But as Marx points out, the propertyless are more likely to become “vagabonds, robbers, or beggars” than workers. Getting those people off the lands and into the factories was an extraordinarily difficult process for the capitalist class. They met with resistance every step of the way. With regard to some who resisted—the aboriginal people of North America, for example—the task was impossible, and the capitalists had to exterminate them.

The great watershed of human history—the universalization of the commodity-form—was accomplished by means of naked brutality and aggression. Perhaps one might argue that this very brutality is part of the human condition. Capitalism is merely a new thing to enforce. However, I think it becomes difficult to defend this position when you consider the sheer magnitude and extent of the violence which in this case was global, absolute, and directed toward the whole of humanity in such a way as to encompass and determine nearly every aspect of social existence. The argument is made more difficult when you consider the aggression was perpetrated by a relatively small group of bourgeoisie coming from one specific part of the world. If there is a natural, biological, anthropological component to this violence, it is obviated by whatever manmade conditions arose to give it such a radically different, absolute, and universal character.

The arbitrary, unnatural essence of the capital social relation does not disappear once the commodity-form has been imposed, either. Friction continues, first in the form of a struggle against the length and quality of the work day. Legislation limiting the length of the work day and the people who are allowed to work did not come from the kind hearts of legislators concerned about the breakdown of the Christian family. It came about because the large bulk of workers protested and threatened to shut down the entire operation. The capitalist class was then forced to introduce mechanical automation into the production process in order to make up for the productivity lost when the work day was shortened and children and women were no longer allowed to work.

It would be reasonable to assume that the introduction of automation would make labor easier. Did we only live in such a world! Toil became greater as fewer workers now struggled to keep up with the machines. As a result, workers end up working harder and longer than “primitive” people who lacked technology all together. This paradox arose because workers lacked and still lack any control over the production process. Technology is not introduced in order to make life easier for people. It is introduced in order to maximize the surplus the capitalist can steal from the workers. The use of technology in capitalist society is inseparable from the essence of capitalism itself, in other words.

After the revolution, this will no longer be the case. What we produce and how we produce it will be determined by a conscious effort to increase our satisfaction, lessen our toil, and maximize our time for social activities other than work. Under capitalism, work increases as productivity grows. Socialism promises the opposite, more rational alternative: as our productivity as a society grows, we will work less, because there is objectively less need to. The measure of wealth will be what everyone already knows it should be: disposable time. What is more “natural” than that?