In 2007, following the deflation of the housing bubble that had held it aloft, the world economy plunged into a deep depression. Homeowners found themselves underwater. Firms were inundated. Unemployment shot upwards. Most dramatically, the financial architecture of the world economy nearly collapsed. Pirouetting their way onto the scene, government ministers undertook coordinated action to prevent a repeat of the 1930s. Shortly thereafter, those same ministers were forced to implement austerity in order to assure bondholders that they remained in control of the slow-motion catastrophe. Public employees were sacked; those that persisted saw their wages slashed. Schools, universities and hospitals faced massive cuts. Meanwhile, in spite of the crisis, food and oil prices remained elevated. Unemployment, too, remained stubbornly high, and youth unemployment above all. Finally, despite the best efforts of politicians — or perhaps, precisely because of those efforts — some national economies found themselves mired in not one or two but three separate recessions, in the space of a few years.
Under these conditions, increasing numbers of proletarians have been forced to rely on government assistance in order to survive, even as that assistance is under threat. Outside of the formal wage relation, informality is proliferating, from under-the-table work to petty crime.
Yet, in spite of all that, both wage-earners and the unwaged mostly responded to the onset of this crisis — which is itself merely the latest consequence of a decades-long economic decline — by adapting to it.1 Of course, that was not universally true: many proletarians set about defending their conditions of life. In 2008–10, there were demonstrations, some of which included blockades of roads and refineries. There were riots, as well as incidents of looting. General strikes stopped work for a day. Students occupied universities, and public sector employees occupied government buildings. In response to plant closures, workers not only took over their workplaces; in a few locales, they also kidnapped bosses or burned factories down.
Some such actions occurred in response to police killings or workplace accidents. Many more had as their goals to stop the implementation of job losses and austerity, and to reverse rising inequality and corruption. However, as Kosmoprolet noted, “conventional means of class struggle were unable to put enough pressure behind their demands anywhere and the protests failed in every respect despite the enormous mobilisation efforts”.2 Then, in 2011 — a year portentously accompanied by earthquakes, nuclear meltdowns and floods — a wholly unanticipated form of struggle washed onto the shores of the Mediterranean.
Starting in Tunisia, the movement of squares spread throughout the Middle East and across the Mediterranean before arriving in the anglophone world as Occupy. In reality there were more differences than similarities among the many square movements, such that it might seem foolhardy to try to generalise across them. Yet it is not we, the commentators, who draw the connections, but the movements themselves, both in the form of their emergence and in their day-to-day practice. An internationalist phenomenon from the beginning, the movement of squares linked struggles across a mosaic of high- and low-income countries. Oakland and Cairo were suddenly “one fist”.
Unlike the anti-globalisation protests — but like the anti-war movement of 2003 — a growing conflictuality was not contained within one city, nor did it hop sequentially from one city to the next. Instead, occupations proliferated across city centres, attracting precarious wage-earners and frightened middle strata, as well as organised labour, the slum-dwellers and the new homeless. Nevertheless, besides chasing a few ageing dictators down from their perches, the movement of squares achieved no lasting victories. Like the 2008–10 wave of protests, this new form of struggle proved unable to change the form of crisis management — let alone to challenge the dominant social order.
However, the movement of squares did change something: it allowed the citizenry — a cross-class formation — to come together, to talk about the crisis and its effects on everyday life (in North Africa, it really freed them to do so). Previously, such discussions had occurred only in private: individuals were made to feel personally responsible for unemployment, homelessness, arbitrary police violence, and debt; they were never given a chance to discuss collective solutions to their problems. For that reason alone, all the talk of occupy was no trifling matter.
As the occupations unfolded, occupiers’ own activity became the main topic of debate. What should they do to defend the squares against the police? How could they extend the movement into new areas? The popularity of such discussions, even outside of the occupations themselves, suggested that a growing portion of the population now recognised that the state was powerless to resolve the crisis. At the same time, no one had any clue what to do with this knowledge. The occupations became spectacles. The occupiers were spectators of their own activity, waiting to find out what their purpose had been all along.
The main problem the occupiers faced was that the very manner in which they came together made them too weak to pose a real threat to the reigning order. The occupations concerned everyone, but — with the exception of the homeless — they concerned no one directly. The occupiers found one another, but only by abandoning the concrete situations (neighbourhoods, schools, job centres, workplaces) that might have provided them with leverage. As a result, occupiers controlled no material resources and no choke points or territories, aside from the squares themselves.3 It was rare for people to arrive at the occupations as a delegate of a neighbourhood or workplace, let alone some other fraction of the social body. The occupiers had little to offer one another but their own bodies, their “indignant” cries echoing across hitherto barren central plazas. Outside of certain cities in North Africa, occupiers largely proved incapable of transmitting their indignation from the squares into everyday life, where self-activity would necessarily involve larger numbers and more substantial risks.
In this context, the occupiers opted for a set of negative demands: ash-sha‘b yurid isqat an-nizam (the people want the regime to fall) and que se vayan todos (they all should go). However, to get rid of governments, to reverse austerity, to lower the price of food and housing — even under the most favourable conditions, what might these demands achieve? If they could prevent the implementation of austerity, occupiers might be able to spook holders of government debt, thereby forcing the state into bankruptcy. To drop into the abyss: not even the most opportunist political parties — with the possible exception of the Tea Party in the US — have been willing to take up that call.
And yet, without the ability to demand a reflation, let alone re-industrialisation of the economy, what is left but the sectional interests of various fractions of the proletariat (and other classes)? If they have no choice but to accept the economic status quo, how can these fractions divide up a limited set of resources — of both public handouts and private employment — without antagonising one another? It is easy enough to say that there is nothing left to do but make the revolution, but which revolution will it be?
In the twentieth century, proletarians were able to unite under the flags of the workers’ movement, with the goal of rebuilding society as a cooperative commonwealth. The coordinates of this older form of liberation have been thoroughly scrambled. The industrial workforce was formerly engaged in building a modern world; it could understand its work as having a purpose, beyond the reproduction of the class relation. Now, all that seems ridiculous. The industrial workforce has been shrinking for decades. The oil-automobile-industrial complex is not building the world but destroying it. And since countless proletarians are employed in dead-end service jobs, they tend to see no purpose in their work, besides the fact that it allows them to “get by”. Many proletarians today produce little more than the conditions of their own domination. What programme can be put forward on that basis? There is no section of the class that can present its interests as bearing a universal significance. And so, instead, a positive project would have to find its way through a cacophony of sectional interests.
In lieu of that, the movement of squares took shape as a new sort of frontism. It collected together every class and class fraction that had been negatively impacted by the crisis, as well as by the austerity measures that followed corporate bailouts. Thus, the sinking middle classes, the frightened but still-securely employed, the precarious and the newly unemployed, and the urban poor — individuals from these groups came together as an impassioned cross-section of society because none of them could accept the options that the crisis had put in front of them. However, their reasons for not accepting those options were not always the same. In North Africa these fronts could be mobilised to topple governments, but in this case their success was precisely their factionalisation.
Our contention is that the movement of squares took this form for a reason. In essence — although certainly not in every manifestation — its struggle was an anti-austerity struggle. That it was such a struggle should strike us as odd. Every talking head seemed to know, in 2008, that a deep recession, comparable to that of the 1930s, should elicit not austerity but its opposite, namely massive fiscal spending. Certain low-income countries (China, Brazil, Turkey and India, among others) took this route — often in a limited way, and sometimes only after experiencing deep recessions. But crucially, the high-income countries did not go down that road. Where is the much vaunted green capitalism, which was supposed to set the global economy on a new path? The last few years seem to have provided the chance for capital to wholly reinvent itself as humanity’s saviour. That hasn’t come to pass. Our sense is that it is precisely the depth of the crisis that has forced states in high-income countries into slashing budgets. They are locked into a dance of the dead.
As we will show below, those states have been made to dance in the face of two contradictory pressures. On the one hand, they have had to borrow and spend, in order to stave off deflation. On the other hand, they have been forced to implement austerity, in order to slow the growth of what were already massive public debts (attendant on decades of feeble economic growth). This spinning-in-circles has not resolved the crisis. However, it has blunted its fallout, so that it has become the crisis of certain individuals or sections of society — and not of society as a whole.
That is what has given struggles an odd character: by implementing austerity, in the face of the crisis, the state made it seem as if it also had the power to reverse the crisis. In short, it seemed as if the state was acting irrationally. According to occupiers everywhere, if the state was acting irrationally, then that had to be the result of corruption: the state had been captured by moneyed interests. Whereas, in fact, what appeared to be the state’s strength was actually its weakness. Austerity is a symptom of the inability of the state — in the face of decades of slow growth and periodic crisis — to do anything except to continue to temporise. That, it has done, for now. Order reigns.
The present economic malaise certainly began as a financial crisis.4 Mortgage-backed securities and credit default swaps suddenly became the topics of an endless televisual discourse. Lehman Brothers collapsed. AIG was loaned $85 billion. Reserve Primary Fund “broke the buck”, causing commercial paper markets to seize up. Acting as lenders of last resort, central banks were able to keep financial flows from freezing entirely — thereby averting a repeat of the Great Depression. Where do we stand now, four years after the end of the “Great Recession”? How are we to understand the crisis? Was it merely a momentary setback along the highway to the Chinese Century? Recent developments suggest otherwise.
After recovering in 2010 from two years of deep recession, GDP-per-capita growth-rates in the high-income countries began to decelerate in 2011 and 2012.5 In the latter year, they grew at a meagre rate of 0.7 percent. The recovery has been historically weak — the only rival, in terms of the length and severity of this downturn, is the Great Depression — and is weakening further. In fact, in the high-income countries as a whole, GDP per capita in 2012 was still below its 2007 peak. That has made it extremely difficult to reduce unemployment (especially given that, in the interim, labour productivity has continued to rise). Unemployment levels peaked at 10 percent in the US and over 12 percent in the Eurozone — they have hardly fallen to the present.6 In some hard-hit countries, unemployment is much higher. In mid 2013, it continues to grow: in Cyprus, unemployment levels have reached 17.3 percent; in Portugal, 17.4 percent; in Spain, 26.3 percent, and in Greece, 27.6 percent. Youth unemployment, in those same countries, has reached astronomical proportions: 37.8 percent, 41 percent, 56.1 percent, and 62.9 percent, respectively.7
More potentially explosive are recent developments in the so-called emerging markets which seemed — for a moment at least — to be capable of pulling the entire world economy forward. Now, all are slowing down. In Turkey and Brazil, per-capita GDP growth-rates fell precipitously, in 2012, to 0.9 and 0 percent, respectively. The Chinese and Indian juggernauts are also decelerating. In China — despite one of the largest stimulus programs in world history — economic growth rates fell, in per capita terms, from 9.9 in 2010 to 7.3 in 2012. In India, growth rates fell further, from 9.1 in 2010 to 1.9 in 2012 (the latter is India’s lowest per capita growth rate in over two decades).
Nevertheless, in spite of the extremely weak recovery and stubbornly high unemployment levels, a new consensus reigns in the high-income countries: the Keynesian moment is over; governments need to cut back on spending.
As the crisis evolves past its opening act, it is becoming clear that the real problem is not a failure to regulate finance. If anything, the banks are now too cautious, too reluctant to take on risk. The real problem is the growth of surplus populations alongside surplus capital.8 Misery is the long-term tendency of the capitalist mode of production, but misery is mediated by debt. Massive pools of surplus capital formed in the 1960s, and have only expanded since then. Internationally, these pools appear mainly as an excess of dollars: eurodollars in the mid-1960s, petrodollars in the 1970s, Japanese dollars in 1980s and 90s, and Chinese dollars in the 2000s. As these dollars scour the earth in search of returns (because they were not used to purchase goods), they have caused a rapid decline in the price of money, and thus, in turn, they have blown up a series of bubbles, the largest of which, in the last century, were in Latin America in the mid-1970s, Japan in the mid-1980s, and East Asia in the mid-1990s. In the lead up to this crisis there were the US stock market and housing bubbles of 1998–2007.9
Figure 1: Surplus capital and surplus population as disintegrating circuits of capital and labour
As US stock market indexes and house prices climbed ever higher, individuals with assets felt richer. The value of their assets rose towards the sky. Rising asset values then led to a long-term decline in the savings rate. And so — in spite of declining rates of investment, a long-term slowdown in economic growth-rates, and an intense immiseration of the workforce — bubble-driven consumption kept the economy ticking over, and not only in the US. The US economy sucked in 17.8 percent of the rest of the world’s exports in 2007. US imports were equivalent to 7 percent of the rest of the world’s total GDP in 2007. Suffice to say: it was a huge stimulus to the world economy. But debt-based consumption in the US was not allocated equally across the US population. Proletarians increasingly find that they are superfluous to the capitalist production process; the demand for their labour has been low. Consequently, workers’ real wages have been stagnant for going on 40 years. That has caused a massive shift in the composition of demand, in the United States. Consumption increasingly depends only on the changing tastes of the super-rich: the top 5 percent of income-earners account for 37 percent of US spending; the top 20 percent of income earners account for more than the majority of spending — 60.5 percent.10
Now, with falling housing and stock market prices, the wealth effect is moving in reverse.11 Households are paying down already accumulated debts. They are trying to reduce their debt-to-asset ratios. As a result, businesses are not investing, no matter how low the interest rates fall. And we still have a long way to go. Total debt — state, businesses and households — is roughly 350 percent of GDP in the US. In the UK, Japan, Spain, South Korea and France, total debt levels are even higher, up to 500 percent of GDP.12 De-leveraging has only just begun. Meanwhile the slowdown in high-income countries has been transmitted to low-income countries by stagnant or declining US and EU imports. The result is pressure on government spending, from two directions:
In essence, there has been little private borrowing — in spite of zero percent short-term interest-rates and historically low long-term rates. That people continue to save rather than borrow, across the private economy, has opened up a so-called “spending gap”. The private economy would shrink if the government did not step in to fill that gap. The purpose of fiscal stimulus today is not to restart growth. That would only happen if people spent the money that the stimulus put in their pockets. Instead, households are using that money to pay down debts. In the present crisis, the point of state spending is to buy time — to give everyone a chance to reduce debt-to-asset ratios without causing deflation.13 By lowering asset values, deflation would make those ratios even worse, causing a debt-deflation spiral.
Meanwhile, at the heights of the international economy, certain states are experimenting with other ways to restore health to private balance sheets: they are trying to raise asset values rather than lower debts. The US Federal Reserve and Bank of England, with other central banks have engaged in “quantitative easing”. They purchased their own governments’ long-term bonds, lowering interest rates on those bonds. Investors were thus pushed out of bond markets, where yields were falling, into riskier assets. Temporary success was reflected in a return of rising stock prices. The hope was that rising prices would reduce debt-to-asset ratios of businesses and wealthy households — not by paying down or writing off their debts, but rather by re-inflating the value of their assets. The problem is that the effects of quantitative easing seem to last only as long as the easing itself. Stock markets aren’t rising because the economy is recovering. A spate of bad news — and worst of all the news that central banks will end quantitative easing — causes these miniature stock-market bubbles to collapse.
More than that: it is only now becoming clear how much of an effect quantitative easing has had, outside of the US and UK, that is, on the world economy. Most importantly, it caused the prices of commodities (e.g. food and fuel) to rise immensely — immiserating the world’s poor, and inducing the food riots that directly preceded the Arab Spring.14 At the same time, QE also gave rise to massive foreign-exchange carry trades: investors the world over have been borrowing at extremely low interest rates in the US, in order to invest in “emerging markets”. That strengthened some low-income countries’ currencies, severely weakening what had previously been vigorous export machines. States in low-income countries counteracted that weakening with huge programs of fiscal stimulus (partly relying on the inflows of foreign capital to do so). That stimulus explains why low-income countries were able to recover so quickly from the Great Recession, compared to the high-income countries. But they recovered — not on the basis of a real increase in economic activity — but rather, through the sort of bubble-fueled construction booms that pulled the rich countries along in the 2000s. Now, with the possibility that QE will come to an end, it is not only the weak recovery in the US, but apparently also the bubble-fueled recovery in the emerging markets, that has been put in danger. States will have to keep spending to keep the temporary fixes they’ve put in place from falling apart.
|Low & middle income||-4.2||-1.8||-6.3||-4.9||-3.6|
And so, at the start of this crisis, debt levels were already much higher than they were in 1929. For example, on the eve of the Great Depression, US public debt was valued at 16 percent of GDP; ten years later, by 1939, it rose to 44 percent. By contrast, on the eve of the present crisis, in 2007, the US public debt was already valued at 62 percent of GDP. It reached 100 percent just four years later.15 That’s why rising debt levels have raised the spectre of default, throughout the high-income countries.
High levels of state debt, carried over from previous decades, limit the capacity of states to take out debt today. They need to keep their powder dry — to maintain, for as long as possible, their ability to draw on inexpensive lines of credit. States will need credit as they attempt to ride out the coming waves of financial turbulence. Austerity in the midst of the crisis has been the paradoxical result. States need to convince bondholders of their ability to rein in debt now, in order to preserve capacity to take out debt later. Some states (Ireland, Greece, Italy, Spain, Portugal) seem to have already maxed out their credit limits.
These two pressures — to spend in order to stave off deflation and to cut spending in order to stave off default — are equally implacable. Thus, austerity is not only the capitalist class attacking the poor. Austerity has its basis in the overgrowth of state debt, which is now reaching an impasse (as it had in the low-income countries in the early 1980s).
Greece is at the centre of the resulting austerity storm, having been bailed out twice by the EU and IMF. The first bailout package came in May 2010 and the second in July 2011. That there will need to be a third package, in 2014, seems almost inevitable. In order to win these bailouts, Greece was forced to implement at least five separate austerity packages, the worst of which was voted through in June 2011. Public sector workers’ salaries were cut by 15 percent. 150,000 public sector workers are to be laid off by 2015. The retirement age was raised. There was a 36 percent reduction in spending on pensions and social benefits. Many utilities (telephones, water and electricity), as well as state-owned ports, mines, airports, were partially privatised. Income taxes and sales taxes were raised. Deep cuts came, again, in July 2013, when 25,000 public employees were sacked, in spite of high levels of unemployment in the private sector. As a result of austerity, Greek incomes shrank by a fifth between 2007 and 2012. Since that shrinkage also meant a reduction in government revenues, austerity measures have only pushed Greece further from fiscal health. Like so many low-income countries in the 1980s, structural adjustment has made Greece ever more dependent on outside financing.
In Portugal, Spain and Italy, similar austerity measures have been implemented, at a lower level of intensity. But even the US has seen schools closing, rising tuition and health care costs, and disappearing retirement benefits. Public sector workers have been laid off en masse; those that remain have seen wages cut.
Coordinated action of central banks, massive assistance to financial firms, increasing levels of state debt, and now — in order to prevent scares on bond markets — turns to austerity: all have prevented the Great Recession from turning into another Great Depression. The way these operations were undertaken has further centralised control in the hands of government ministers in the US and Germany, which function as spenders and lenders of last resort for the world economy. But as is clear — given very high levels of public and private debt, slow or even persistently negative economic growth, and extremely elevated levels of unemployment (especially youth unemployment), in many countries — the turbulence is far from over.
We like to think of the present period as a holding pattern. But we note that the economy is losing altitude all the time. For that reason, the holding pattern can only be temporary. Perhaps it is possible, through some miracle, that the world economy will achieve enough speed, pull up on the throttle and soar through the sky. But there are “significant downside risks”. The turn to austerity is endangering the stability that it is meant to prop up, since austerity means that governments are doing less to make up for the lack of spending in the private sector. That raises, once again, the spectre of deflation; an indefinite program of quantitative easing remains the only force pushing back against deflationary pressures. Yet, even without deflation, there is still a high likelihood that the present economic turbulence may end with a crash. After all, sovereign defaults — when examined on a world-scale — aren’t actually that rare: they come in waves and play a major part in the global unfolding of crises.
Can states somehow defy the working of the law of value, massively increasing their debts without decreasing the expected future growth-rates of their economies? Those who believe they will be able to do so will have their thesis tested in the coming period. We can’t rule out the possibility that they will be right: after all, a massive accumulation of debts — held by corporations, households and states, and always in novel ways — has deferred the onset of a new depression over and over again, for decades. Who is to say whether the present pattern will be maintained only for a few more weeks, or for a few years?
However, if it is to be maintained, this will require that there not be a blowout, somewhere in the world economy, that would test the strength of the world’s financial architecture once again. AIG may have been too big to fail, but Italy is too big to save. The Eurozone has been pulled back from the brink a number of times, but the Eurozone crisis has not been resolved definitively. Potentially more turbulent is the possibility that the ongoing slowdown in the BRICs will give way to what is euphemistically called a “hard landing”. That already seems to be happening in India and Brazil, but the real worry remains a blowout in China. Massive government stimulus, since 2007, has only exacerbated over-capacity in construction and manufacturing. Banks are hiding huge numbers of bad loans in a massive “shadow banking” sector. Most tellingly, there has been an extremely rapid increase in housing prices — orders of magnitude larger than the housing-price bubble that just popped in the US. The Chinese government reassures us that “this time it’s different”, but the US government said exactly the same thing in the mid 2000s…
The capitalist mode of production is caught, at present, in a deep crisis; however, we must guard against the tendency to mistake the crisis of this mode of production for a weakness of capital in its struggle with labour. In fact, crises tend to strengthen capital’s hand. For, in a crisis, the demand for labour falls at the same time as, due to massive layoffs, its supply rises. That alone weakens the bargaining position of workers. But more so: while it is true that capital suffers losses in the course of a downturn, it is nevertheless the case that individual capitalists rarely face an existential threat as a result of those losses. On the contrary, it is workers who, in a downturn, are threatened with the loss of their jobs — and thus the loss of everything they have. Crises weaken the position of workers, as workers.
That is why, in the midst of a crisis, capitalists can argue — correctly, from the point of view of many workers — that the restoration of the rate of profit must be put before all else. As long as workers accept the terms of the class relation, they find that their lives (even more than those of capitalists) depend on the health of the system. Restoring the profit rate is the only way to create jobs, and in the absence of a massive assault on the very existence of class society, individual proletarians have to try to find jobs or to keep them. It is thus no surprise that many workers have responded to the onset of the crisis by accepting austerity measures. It is because workers are vulnerable, now more than ever, that capitalists and their representatives are pressing their interests; they are defining what it will take to restore the system to health in ways that directly benefit them.
That’s why austerity never means just temporary reductions in social spending in the midst of an economic downturn. On the contrary, social-spending programs have not only been cut back; they are being gutted or done away with entirely. In many countries, the crisis is being used as a lever with which to destroy long-held rights and entitlements, including the right to organise. And everywhere, the crisis has served as an excuse to further centralise power in the hands of technocrats, acting in the service of the most powerful states (the US, Germany). These manoeuvres are not merely cyclical adjustments in response to an economic downturn. They are about restoring profits in the most direct way possible: suppressing wages. The Keynesian notion that, if states were acting rationally, they could somehow convince capital not to press its advantage, in the course of the downturn, is the purest ideology.
Paradoxically, it is for these very reasons that crises are associated — not with a continuation of class struggle along normal lines — but rather, with “crisis activity”.16 Self-organising struggles break out more frequently: big demonstrations and general strikes, riots and looting, and occupations of workplaces and government buildings. In the midst of a crisis, workers find that they can only lose if they continue to play by the rules of capital’s game. That is why more and more workers have stopped playing by those rules. Instead, they are engaged in struggles that challenge the terms of the capital–labour relation (without necessarily challenging its existence).
The question then arises: what specific sorts of spontaneous struggles are proletarians engaged in today? In Endnotes 2, we focused on the appearance and expansion of surplus populations, as the human embodiment of capital’s contradictions. For that, we were criticised in some quarters. After all, surplus populations make little direct contribution to accumulation; they lack the leverage of traditional productive workers, who can bring the system to halt by withdrawing their labour. Moreover, surplus populations can be marginalised, imprisoned, and ghettoised. They can be bought off with patronage; their riots can be allowed to burn themselves out. How could surplus populations ever play a key role in the class struggle?
In late 2010, surplus populations answered this question, themselves. On December 17, Mohamed Bouazizi set himself on fire outside a police station in Sidi Bouzid. Two days later Hussein Nagi Felhi climbed an electricity pole in the same town, shouted “no to misery, no to unemployment”, and electrocuted himself. Within days riots had spread to almost every city, and within weeks the president had fled. In the month that followed, acts of self-immolation, like signal flares, lit up the slums of North Africa: in Algeria, in Morocco, in Mauritania, and in Egypt.
Abdou Abdel-Moneim, an Egyptian baker, self-immolated on Jan 17, 2011, after being refused an allocation of subsidised flour. Traditional patronage relations were breaking down.17 That was one side of a vice pressing down on Egypt’s poor. The other, signalled by the brutal murder of Khaled Said in police custody the year before, was a ramping up of police repression. Here was the context in which Egypt’s young activists — taking their cue from the overthrow of Ben Ali in Tunisia — decided to take their stand against Mubarak. Crucially, they began their marches, on January 25 (a day traditionally reserved for celebrating the police), from Cairo’s poorest neighbourhoods, and they added “bread” to their already promulgated demands for “freedom” and “social justice”. In response, people from these neighbourhoods spilled out into the streets. Emboldened by the example of Tunisia, this new, amalgamated struggle — bringing together class fractions whose struggles had previously unfolded in isolation — quickly spread to every major city (unlike the failed-strike-cum-bread-riot in Malhalla, in 2008).
And so, if the self-immolations were the initial moment of this struggle, then the anti-government protests that followed were its culmination. The tactics of the current wave of struggle were solidified: (1) mass riots, capable of widespread diffusion, but often focusing on a territory; (2) the transformation of that territory into an occupation, a centre of debate and display (and confrontation with the police); and (3) attempts to extend from that centre out to the surrounding areas, by means of wild demonstrations, neighbourhood assemblies, solidarity strikes, and blockades.
Of course, slum-dwellers were neither the only nor even the principal constituents of this new wave. Who else located themselves in the squares? Paul Mason, a BBC journalist who was on the ground for most of the movements, identified three class fractions, which all played key roles in the 2011 movement of squares: graduates with no future, the youth underclass, and organised workers.18 It is the first in this list — that is, indebted graphic designers, impoverished administrative assistants, unpaid interns and, in North Africa, graduates on long waiting lists for bureaucratic jobs — who take the centre stage in Mason’s account. However, looking back on 2011, it is apparent that the struggles of these disaffected graduates only became explosive when they were invaded and overwhelmed by the poor. In Egypt, as we saw, the January protests took off because the young activists started their marches in the slums. The same was true in England: a key turning point in the 2010 student protests was the entry of the young and restless, who came out in force to protest the discontinuation of the Education Maintenance Allowance.19
The point here is a more general one: insofar as the 2011 protests generalised, they tended to do so in ways that destabilised their central demands. There was a pressure towards generalisation, which nonetheless failed to unify the class. After all, what does it mean to demand freedom in a sea of Cairo’s slum-dwellers? There is no chance that they will be integrated — as normal workers/consumers — into any economy, whether that of an autocratic or a liberal Egypt. By the same token, what does it mean to fight tuition hikes alongside youth from the council estates? They are likely to be excluded from the very economy into which university students are seeking entry. For that reason, alliances between college students and poor youth have been uneasy. Nevertheless, we should be clear: this tension is not the same as the one that rent the 1960s, dividing middle-class from working-class youth.
That’s because higher education has been thoroughly transformed in the half-century since 1968. In the rich countries, universities are populated, not only by the children of the elite, but also — and largely — by children of the working class. These students typically work their way through college. Even so, they rack up massive debts in order to get a degree. In that sense, the so-called neoliberal era was not only about the globalisation of misery. It was also about the globalisation of hope. Education plays a central role, here: the American Dream — freedom through private enterprise — universalised itself by means of an expanding access to university education. Get yourself a degree has replaced Guizot’s enrichissez-vous.
Heeding the call, families everywhere are trying to send at least one of their children to school (even Mohamed Bouazizi was putting money towards his sister’s degree). In this context, “the sheer size of the student population means that it is a transmitter of unrest to a much wider section of the population than before. This applies both in the developed world and in the global south. Since 2000, the global participation rate in higher education has grown from 19 to 26 percent; in Europe and North America, a staggering 70 percent now complete post-secondary education.”20 For that reason, the 1990s and 2000s were an era, not only of class defeat, but also of class compromise. Now, that compromise has been shaken, or undermined, by the crisis. The kids are screwed, and that makes a lot of sense: someone had to pay, and it was easier to delete their futures, with a keystroke, than to take away the actual jobs of older workers. In Egypt, today, unemployment is almost 10 times as high for college grads as it is for people who have only gone through elementary school. The crisis played itself out as a generational conflict.21
For Mason, it was the “lack of synthesis” between, on the one hand, the struggles of the two youth fractions, and on the other hand, those of the organised workers, that broke the protest movements’ strength: hence, the disjunction between the “black bloc” tearing up Oxford Street and the TUC demonstrators massing in Hyde Park, for the biggest (and most ineffectual) trade-union demo in British history.22 Hence also, we might add, the strained relation between the ILWU longshoremen’s union on the West Coast of the United States and Occupy. From the first port blockade on November 2 against the repression of Occupy Oakland, to the second blockade on December 12 in defence of the union in Longview, tensions rose as both sides feared co-optation. Things played out similarly in Greece. Partly in response to the Syntagma Square occupiers and other social movements, the Greek unions announced one-day general strikes. But in spite of their high turnout those strikes had only a minimal impact, and this impact diminished over time. In response, the unions increased the frequency of the general strikes, at times extending them to 48 hours instead of the usual 24; yet the strikes remained auxiliaries to the mass demonstrations and riots taking place on the same days, in which union stewards were reduced to bystanders.23
The strained relation of workers to the broader protest movements was overcome only in Egypt — and even there, only momentarily. In the final days of the Mubarak regime, workers began to form autonomous organisations, separate from the corrupt, state-run unions. More and more workers went out on strike against the regime. Mason describes this process of contagion with a phrase lifted from a psychiatrist interviewed in Cairo: what he saw was “the collapse of invisible walls”.24 This psychiatrist was referring to the walls between fractions of workers. In the hospitals, doctors, nurses and porters all began talking to each other as equals, making demands together. The walls came down.
Mason’s central argument is that, if these walls did not come down, elsewhere, this was due to a clash between organisational forms: while the graduates without a future and the urban youth-underclass both formed networks, workers continued organising themselves into hierarchies. A deeper limit was confronted here, however, one bearing not only on the form of the struggle, but its content as well. There was a real conflict of interests at stake in the movement of the squares.
Among the protesters, there were those who experienced the crisis as an exclusion from secure employment: students, young precarious workers, racialised minorities, etc. But among those who were already included in secure employment, the crisis was experienced as one more threat to their sector. In short, “youth” were locked out of a system that had failed them; whereas the organised workers were concerned with trying to preserve what they knew to be a very fragile status quo ante. That status quo ante had to be preserved — not merely against the onslaughts of the austerity state, but also against the hordes of students and the poor who were trying to force their way in. That became clear in the aftermath of the protests, when, continuing an earlier trend, “youth” were easily rebranded as “immigrants”, stealing jobs from deserving citizens. Here, we are concerned with the question of the content of the struggle. But what were protesters fighting for, in 2011?
Cairo and Tunis, Istanbul and Rio, Madrid and Athens, New York and Tel Aviv — a great cacophony of demands was on display in the occupied spaces of these cities. But if one demand stood out, from among the many, it was to put an end to “crony-capitalism”. The shibboleth of the occupiers was “corruption”, to get money out of politics was their goal. In every square, one found signs painted with disgust: corrupt businessmen and politicians had destroyed the economy. Under the cloak of freeing up markets, they helped one another to the spoils. Perhaps that clarifies some of the other generic demands of the movements: demands for “democracy” and “equality” were precisely demands that everybody count as one, in a world where some individuals clearly counted for much more than others.
In opposing corruption, the occupiers found themselves taking up two mutually contradictory positions. (1) They criticised neoliberalism in terms of its own ideals: they wanted to eradicate corruption — handouts for the cronies — to establish a level playing field for the play of market forces. At the same time, (2) they called for the replacement of neoliberalism with a more egalitarian form of patronage: they wanted to redirect government patronage from the elites to the masses (a popular bailout to replace the bailout of the banks). It is worth pausing to consider these demands — to try to figure out what was behind them, and why their appeal was so universal, across the global movement of squares.
Leftists typically think of neoliberalism as a conspiracy to consolidate class power.25 However, in its self-presentation — as a technocratic agenda — neoliberalism is first and foremost concerned with opposing corruption, in the form of “rent-seeking” by “special interests”. What is supposed to replace rent-seeking is market competition, with its promise of fair outcomes. In that sense, neoliberalism is not so much about shifting the balance of power from the state to the market; rather, it is about fashioning a state that is compatible with market society: a capitalist state. The paradox, for neoliberal ideologues, is that their reforms have everywhere led to rising inequality, and concomitantly, to the capture of state power by a class of the extremely wealthy (centred on finance, insurance and real estate, as well as the military and oil extraction). That class has itself come — through dodgy deals and bailouts — to represent the epitome of corruption. Neoliberalism then provides a framework with which to oppose its own results.
But what is corruption, exactly? To define it in a precise way is rather difficult. In many ways, corruption simply names the imbrication of capitalism with non-capitalist old regimes. Corruption is then synonymous with patronage. Non-capitalist elites as well as upstart notables compete to capture fractions of the state. They fight over ownership of income streams — so, for example, elites may control the import of flour or command state-run enterprises that weave textiles. Elites then use state-generated incomes to fund retinues, which trade their allegiance for a slice of the pie. Where property rights are still politically constituted, everyone — from the lowliest ticket-collector to the highest politician — must play the game of bribes and kickbacks.
Modernisation is, in part, a project of eradicating patronage arrangements. By centralising the state, increasing tax efficiency, and replacing direct transfers to constituents with infrastructural investment and targeted subsidies, modernisation supposedly forces everyone to secure incomes, not by state capture, but rather by competing in markets. Of course, modernisation remains woefully incomplete, in this sense. The incompleteness of the modernising project was one of the main targets of neoliberal programs of structural adjustment. But far from implying an end to corruption, the modernisation of the state — now in a neoliberal guise — actually exacerbated it. In the context of a sagging world economy, neoliberal reforms had little chance of expanding participation in markets, in virtuous cycles of growth (that was especially true, since neoliberalism was associated with a decline in public investments in infrastructure, without which modern economic growth is all but impossible).
What neoliberalism achieved, then, was to make corruption more discreet, while funnelling it towards the upper echelons of society. Corruption is now less ubiquitous but involves much larger sums of money. The small-scale bribery of officials has been supplanted by the large-scale bribery of corrupt privatisation deals and public investment projects — which flow to the wealthiest clients. The family members of dictators, Gamal Mubarak above all, have become prime targets of popular hatred, for that reason. The massive payouts they receive look all the more egregious now that (1) the state is supposed to be eradicating corruption, and (2) those lower down are no longer in on the game. This is why neoliberalism is about inequity: when old forms of patronage are undone with the promise that new sources of wealth will come to replace them, the failure of that promise reveals the new as a version of the old patronage, only now more egregious, more unfair.
In the high-income countries, a similar process of neoliberalisation took place. The target of reforms in the rich countries was not, however, old-regime patronage arrangements but, rather, social democratic corporatism. The latter had replaced the former in the course of the twentieth century; now, it was itself to be dismantled. Once again, the much-vaunted freeing of the market was supposed to benefit everyone. When economic growth failed to appear, neoliberalism meant only that handouts had been funnelled up towards the top.
That process was perhaps most clear on the Northern and Eastern shores of the Mediterranean, where state funds (and flows of hot money) were channeled into infrastructural investment. From the late 80s to the 2008 crash, the economies of Spain, Greece and Turkey were largely kept afloat by a massive construction boom. Construction is, by its very nature, a temporary form of stimulus: many people can be employed, to build a road network, but only a few are needed for upkeep or maintenance, once that network has been built. For that reason, urban development projects can offset a decline in profitability only temporarily. An infrastructure boom merely defers the crisis by locking up surplus capital in the expansion of the built environment.
When this growth machine runs out of fuel, it sometimes leaves behind impressive but useless ruins. Corruption today appears as empty airports in isolated corners of Spain; half-built tower-blocks overlooking an Athenian port; and plans for a shopping mall in a poor neighbourhood of Istanbul. What makes these projects corrupt is not so much the insider deals that directed government agencies to throw away their money on follies. In truth, those deals appeared as corrupt only retrospectively: when the tourists stopped coming, the housing market collapsed and consumer spending declined. In that moment, insider deals were no longer experienced as relatively harmless accompaniments to economic growth. Instead, they started to look like the old patronage, but now, with much larger sums of money at stake (due to the greater borrowing capacity of states in the run-up to the crisis) and also, a much smaller circle of beneficiaries.26
In the UK and US, too, corruption was a common theme of UK Uncut and OWS.27 However, in both countries, the demand to end corruption was not a matter of shady construction projects and political kickbacks. Instead, that demand was formulated in response to the gigantic corporate bailouts orchestrated in the aftermath of the collapse of Lehman Brothers and RBS. But the same rule holds here, as elsewhere: what made these bailouts “corrupt” was less the shady circumstances under which they were made, than the fact that they seemed to have nothing to do with restoring economic growth (that is, creating jobs, etc.).
In opposing these different manifestations of corruption, the occupiers of the squares seemed to be promoting two somewhat divergent ideas.
Behind this second demand rests a truth that has become increasingly obvious: a large portion of the population has been left out of the economic growth of the past few decades, and there is no plan to bring them back in. Throughout low-income countries, direct state patronage to the poor — a crucial foundation of the clientelist state — has gradually eroded, while privatisation deals benefit a slim layer of the elite. The limited partnership, in which the poor had been able to enjoy some of the gains of the nationalist project, is being dismantled.
It is worth noting that this dismantling has a generational aspect — particularly important in developing countries where population growth rates are high. Politicians know that populist measures cannot be wound down across the board without provoking mass anger and potentially mass rebellion. Instead, the state proceeds sector by sector. It begins by taking away the as yet unrealised privileges of the next generation. This process is clearly at work in the shrinking urban formal sector in Egypt — now accounting for roughly ten percent of the workforce (including food processing, textiles, transport, cement, construction, and steel). Young people find themselves locked out of “good” jobs. Instead, they are confined to the non-agricultural informal sector, which absorbs over two-thirds of the workforce.
However, the state has not only retreated. When it can no longer afford to keep up its side of the patrimonial bargain, the state replaces handouts to the poor with police repression. The lines of patronage are thereby contracted and rearranged: the police and army benefit from an increased access to patronage, even as many other sectors lose such access. The police and army come to employ a fraction of those who would otherwise have found themselves on the outside of the new patronage system, but they employ that fraction only to keep the rest in line. Hence the potent symbolism of Bouazizi and Abdel Moneim. One body burnt to signal police repression, the other to signal a breakdown of popular state patronage. These two experiences are directly intertwined.28
It is for these reasons that the police have become the most potent manifestation, and the most hated symbol, of corruption. The expansion and militarisation of the police force seems to be the worst sign of the times. States everywhere are demonstrating that they are willing to spend huge amounts of money paying police, constructing prisons, and so on — even while they cut funding for schools and hospitals. States are no longer oriented, even superficially, towards treating their populations as ends in themselves. On the contrary, states now see their populations as security threats and are willing to pay to contain them.
Such containment is an everyday reality, especially for marginalised sections of the proletariat. Since the police are usually underpaid, they often supplement their incomes with bribes and kickbacks that are extracted from the poor. Daily interactions with the police thus reveal the latter to be some of the last remaining beneficiaries of the old corruption. At the same time, in squeezing the most vulnerable sections of the population, the police enforce the new corruption: they quash any resistance to an increasingly wealthy, neo-patrimonial elite.
The police do not only extract money from the poor; they are also out for blood. The overgrowth of police forces has everywhere been accompanied by a rise in arbitrary police violence and police killings, often the trigger for riots. Each time another body hits the ground, a section of the population receives the message loud and clear: “you no longer matter to us; be gone”. This same message is on display, in a more punctuated way, in the anti-austerity protests. The police are there, on the front-lines of the conflict, making sure that the population stays in line and does not complain too much about the injustice of it all.
Opposition to corruption thus has a real basis in the immediate experience of the protestors. The fight against corruption registers a bitter experience of getting shut out, in a double sense. On the one hand, individuals are unable to enjoy the growing wealth of the new globalised economy, which is on display in the conspicuous consumption of the new rich. On the other hand, those same individuals find that they have been equally shut out of older systems of patronage — which were also systems of recognition (whether in its old regime or workerist form). Thus, to complain of corruption is not only to register the extremes to which inequality has risen, or the unfairness with which wealth is redistributed upwards in so many shady contracts. It is also about decrying a lack of recognition, or the fear of losing it: rampant corruption means that, at a basic level, one does not really count (or is in danger of not counting) as a member of the nation. What takes the place of a national community is only the police, as the arbiters of the shakeout. What would repair this situation, and restore the community? The occupations were themselves an attempt to answer this question.
The 2011 protesters put their bodies and their suffering on display, in public squares, in order to reveal the human consequences of an unrelenting social crisis. But they did not remain in that conceptual space for long. Occupiers spontaneously opted for direct democracy and mutual aid, in order to show the powers that be that another form of sociality is possible: it is possible to treat human beings as equal in terms of their right to speak and their right to be heard.
In the course of the occupations, horizontalist models of organisation tended to become ends in themselves. Faced with implacable and/or insolvent state-power, the occupiers turned inwards, to find within their self-activity a human community — one in which there was no longer a need for hierarchy, leadership or status differentiation. It was enough to be present in the squares, in order to be counted. No other affiliation or allegiance was necessary; indeed, other affiliations were often viewed with suspicion. In this way, anti-government protests — which took it as their goal to shoo the plutocrats out of office — became anti-government protests in another sense. They became anti-political. Of course, this transformation should not be seen solely as a progression: it marked an oscillation in the orientation of the protesters, from outwards to inwards and back out again.
Searching for precursors to this feature of the movement of squares has proven difficult. The movement’s horizontalism was there in Argentina, in 2001. The movement also replicated the forms — consensus-based decision-making, above all — of the anti-globalisation protests (and before that, of the anti-nuclear protests). But the movement of squares was different because the square occupations lasted for so long. For that reason, the occupiers were forced to take their own reproduction as an object.29 The occupiers had to decide how to live together. Their ability to persist in the squares — to occupy for as long as it took to have an impact — was their only strength; their leverage was that they refused to leave. They adopted forms of governance that they claimed were better than the ones on offer in this broke and broken society.
It may be that the most relevant precursor to this feature of the movements is to be found in a previous square occupation, one that seems not to have been a direct reference for the 2011 protesters. That is Tiananmen Square. Despite his simplifications, Italian philosopher Giorgio Agamben captured something of the spirit of Tiananmen, in a way that is prescient of the 2011 protest movement. In The Coming Community, Agamben, speaking of “a herald from Beijing”, characterises Tiananmen as a movement whose generic demands for freedom and democracy belie the fact that the real object of the movement was to compose itself.30 The community that came together, in Tiananmen, was mediated “not by any condition of belonging” nor “by the simple absence of conditions”, but rather, “by belonging itself”.31 The goal of the demonstrators was to “form a community without affirming an identity” where “humans co-belong without any representable condition of belonging”.32
Agamben claims that, by disassociating themselves from all markers of identity, the occupiers of Tiananmen became “whatever singularities”.33 These whatever singularities remain precisely what they are, regardless of the qualities they happen to possess in any given moment. According to Agamben, in presenting themselves in this way, the occupiers necessarily ran aground on the representational logic of the state: the state sought to fix the occupiers into a specific identity, which could then be included or excluded as such. Thus, Agamben concludes: “wherever these singularities peacefully demonstrate their being-in-common, there will be a Tiananmen, and, sooner or later, the tanks will appear”.34
To form a community mediated by belonging itself, in Agamben’s sense, means the following: (1) The community is composed of all those who happen to be there; there are no other conditions of belonging. (2) The community does not mediate between pre-existing identities, in a coalitional politics; instead, it is born ex nihilo. (3) The community does not seek recognition by the state. It presents itself, at the limit, as an alternative to the state: real democracy, or even the overcoming of democracy. (4) The task of such a community is to encourage everyone else to desert their posts, in society, and to join the community, as “whatever singularities”. This description matches the self-conception of the 2011 occupiers. They, too, wanted to be whatever singularities, even if they referred to themselves in a less philosophical fashion.
But we should be clear: for Agamben, Tiananmen already consisted of whatever singularities. The separation between students and workers that pervaded the square, down to the details of where one could sit, falls out of his account, entirely. Yet despite its failings as a description, Agamben’s account captures something of the normative orientation of the movements. For it seems that in Tiananmen — as in the Plaza del Sol, Syntagma Square and Zucotti Park — the participants believed themselves to be beyond the determinations of the society in which they lived. The 2011 protesters certainly felt that way: they proposed to fight crony capitalism on that very basis.
The truth was, however, that the protesters remained firmly anchored to the society of which even their squares were a part. That was clear enough in the divisions between more “middle class” participants and the poor. But it wasn’t only that: individuals with all sorts of pre-existing affinities tended to congregate in this or that corner of the square. They set up their tents in circles, with the open flaps facing inwards. More insidious divisions emerged along gender lines. The participation of women in the occupations took place under the threat of rape by some of the men; women were forced to organise for their self-defence.35 Such divisions were not dissolvable into a unity that consisted only of consensus-based decision-making and collective cooking.
Here’s the thing: the fact that the 2011 movements presented themselves as already unified, as already beyond the determinations of a horrible society, meant that their internal divisions were usually disavowed. Because they were disavowed, those divisions could only appear as threats to the movement. That is not to say that internal divisions were simply suppressed: it was rather that divisions could only be resolved — within the confines of the squares — by forming another committee or promulgating a new rule of action.36
The movement was forced to look inward, in this way, because it was barred from looking outward. Without the capacity to move out of the squares and into society — without beginning to dismantle society — there is no possibility of undoing the class relation on which the proletariat’s internal divisions are based. The occupiers were thus contained within the squares, as in a pressure cooker. Class fractions that typically keep their distance from each other were forced to recognise one another and sometimes live together. In the tensions that resulted, the movement came up against what we call the problem of composition.
The composition problem names the problem of composing, coordinating or unifying proletarian fractions, in the course of their struggle. Unlike in the past — or at least, unlike in ideal-typical representations of the past — it is no longer possible to read class fractions as already composing themselves, as if their unity were somehow given “in-itself” (as the unity of the craft, mass or “social” worker). Today, no such unity exists; nor can it be expected to come into existence with further changes in the technical composition of production. In that sense, there is no predefined revolutionary subject. There is no “for-itself” class-consciousness, as the consciousness of a general interest, shared among all workers. Or rather, such consciousness can only be the consciousness of capital, of what unifies workers precisely by separating them.
The composition of the class thus appears, today, not as a pole of attraction within the class, but rather, as an unresolved problem: how can the class act against capital, in spite of its divisions? The movement of squares was — for a while — able to suspend this problem. The virtue of the occupations was to create a space between an impossible class struggle and a tepid populism, where protesters could momentarily unify, in spite of their divisions. That made for a qualitative leap in the intensity of the struggle. But at the same time, it meant that when the protesters came up against the composition problem, they found that problem impossible to solve.
For the occupiers came together by sidestepping the composition problem. They named their unity in the most abstract way: they were “indignant citizens” or “the 99 percent”. It would have been unfashionable to say that they were the working class or the proletariat, but it would have made no difference: every universal is abstract when the unity it names has no concrete existence. For these reasons, the unity of the occupiers was necessarily a weak unity. It could hold together only so long as the occupiers could contain the divisions that reappeared inside the camps — divisions that were already present in everyday social relations: race, gender, nation, age, etc.37 Is it possible to approach the composition problem from the opposite angle, to begin from the divisions within the proletariat, and on that basis, to pose the question of unity?
Perhaps it is only by deferring unity, to make divisions appear as such, that proletarians will be forced to pose the question of their real unification, against their unity-in-separation for capital. In that case, in order to really unite, proletarians will have to become the beyond of this society — and not in an imagined way, but rather, by relating to one another, materially, outside of the terms of the class relation.
Why is the proletariat so hopelessly divided, today, as compared to the past? This question is more accurately posed as follows: why do divisions within the proletariat appear so clearly on the surface of society? How did identity politics come to replace class-based politics?
In the past, it seemed possible to disavow non-class identities, on the basis of an all-encompassing class identity. That disavowal was supported by ongoing transformations in the mode of production: capital had created the industrial working class; it seemed that it would now draw more and more workers into the factories (or else, that all work would be transformed after the fashion of the factories). As the industrial working class grew in size and strength, it was expected to become more homogeneous. The factory would render divisions of race, gender and religion inessential, as compared to class belonging — that was the sole identity that mattered, at least according to the workers’ movement.
We would like to suggest that this vision of the future was possible only on the basis of a high demand for labour in industry. Of course, a high demand for labour has never really been a regular feature of capitalist societies (long booms are actually few and far between in capital’s history). Nevertheless, it is possible to say that the demand for labour in industry was typically higher in the past than it has been since the 1970s. For, in the past, workers were drawn into the industrial sector, not completely, but tendentially. That had effects: when the demand for labour in industry is high, capital is forced to hire workers who are normally excluded from high value-added segments of production, on the basis of gender, race, religion, etc. A high demand for labour breaks down prejudices among both managers and workers, on that basis. What is supposed to follow is a material convergence of workers’ interests.
That convergence did take place, at least to some extent, in the course of the workers’ movement.38 For example, in the US, agricultural mechanisation in the South displaced black sharecroppers, propelling their migration to booming Northern cities. There, blacks were absorbed into factories, and so also, into workers’ unions. The integration of black workers into unions did not occur without a struggle, nor was it ever completed. Nevertheless, it was underway in the 1960s.
Then, this integration ran up against external limits. Just as the door to integration was beginning to open, it was suddenly slammed shut. The industrial demand for labour slackened, first in the late 1960s and then, again, in the crisis years of the early 1970s. The last hired were first fired. For black Americans, jails replaced jobs. The growth of the prison population corresponded closely to the decline in industrial employment.
A similar turn of events took place on the world-scale. During the postwar boom, low-income countries were tendentially integrated into the club of industrialised nations. But they were integrated only as the postwar boom was reaching its limits. Indeed, they were integrated precisely because it was reaching its limits: as competition intensified, firms were compelled to scour the globe in search of cheap labour. Once the boom gave way to a long downturn, that integration broke down.
What has happened, since the 1970s, is that the surplus population has grown steadily. In essence, the growth of surplus populations put class integration into reverse; integration became fragmentation. That’s because the industrial demand for labour is low. With many applications for each job, managers’ prejudices (e.g certain “races” are lazy) have real effects, in determining who does or does not get a “good” job. As a result, some fractions of the class pool at the bottom of the labour market. What makes those fractions unattractive to certain employers then makes them very attractive to others — particularly in jobs where a high employee turnover is not really a cost to employers. The existence of a large surplus population creates the conditions for the separation out of a super-exploited segment of the class, which Marx called the stagnant surplus population. That separation reinforces prejudices among privileged workers, who know (on some level) that they got their “good” jobs based on employers’ prejudice. It also reinforces non-class identities among the excluded, since those identities form the basis of their exclusion.
However, while capital is no longer overcoming divisions, the very scrambled nature of the new divisions seems to weaken them, in certain ways. Because it is an ongoing process, we can perhaps say that, tendentially, the unfolding of the general law of capital accumulation undermines stable identity formations in all segments of the labour market. More and more people are falling into the surplus population; anyone can, potentially. Increasingly, the stable-unstable distinction is the one that regulates all the other distinctions within the working class. That leads to a widespread sense that all identities are fundamentally inessential, in two senses:
What comes next? It is impossible to say in advance. What we know is that, at least for the moment, we live and fight within the holding pattern. The crisis has been stalled. In order to make the crisis stall, the state has been forced to undertake extraordinary actions. It is hard to deny that state interventions, over the past few years, have seemed like a last ditch effort. Interest rates are bottoming out at zero percent. The government is spending billions of dollars, every month, just in order to convince capital to invest in a trickle. For how long? And yet, for this long, at least, state interventions have worked. The crisis has been petrified. And its petrification has been the petrification of the struggle.
Indeed, since the crisis has been stalled, the class struggle remains that of the most eager and the worst off. Everyone else hopes that, if they keep their heads down, they will survive until the real recovery begins. Meanwhile, those engaged in struggle are themselves mostly lost in false hopes of their own: they hope that the state can be convinced to act rationally, to undertake a more radical Keynesian stimulus. The protesters hope that capitalism can be forced to rid itself of cronies and act in the interest of the nation. Unlikely to abandon this perspective — as long as it seems remotely plausible — anti-austerity struggles are themselves stuck in a holding pattern. They confront the objectivity of the crisis only in the state’s impassiveness in response to their demands.
We see three scenarios, going forward: