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Sunday 26 October 2008

The more Starbucks a country has, the worse its economic crisis


 

Sunk in the sloppy mess of the Frappuccino recession

The more Starbucks a country has, the worse its economic crisis. Where lies the link between coffee and greed?

Remember the once-fashionable McDonald's theory of international relations? The thinking was that if two countries had evolved into mass-consumer societies, with the middle classes able to afford Big Macs, they'd generally be able to find a peaceful way of adjudicating disputes. In other words, they'd sit down over a Happy Meal to resolve their issues rather than use mortars.
The recent unpleasantries between Israel and Lebanon, which both have McDonald's franchises, put paid to that reasoning. Still, the Golden Arches theory of realpolitik was good while it lasted.
In the same spirit, I want to propose the Starbucks theory of international economics: the higher the concentration of expensive, faux-Italian Frappuccino joints in a country's financial capital, the more likely the country is to have suffered catastrophic financial losses.
Think about it. The economic crisis has its roots in sub-prime mortgages and a credit crisis. If you could pick one brand name that personifies these twin bubbles, it has to be Starbucks. The Seattle-based coffee chain followed new housing developments into the suburbs and exurbs, where its outlets became pitstops for estate agents and their clients. It also carpet-bombed the business districts of large cities, especially the financial centres, with nearly 200 in Manhattan alone.
And frothy Starbucks treats provided the fuel for the boom – the caffeine that enabled the Wall Street and City boys to stay up all hours putting together deals, and helped mortgage brokers work overtime as they processed dubious loans for people who couldn't really afford them. It's no accident that Starbucks based many of its outlets on the ground floors of big investment banks. (The one around the corner from the former Bear Stearns HQ has already closed.)
Like American financial capitalism, Starbucks took a great idea too far (quality coffee for Starbucks, securitisation for Wall Street) and diluted the experience unnecessarily (sub-prime food such as egg-and-sau-sage sandwiches for Starbucks, sub-prime loans for Wall Street). Like so many sadder-but-wiser building developers, Starbucks operated on a philosophy of "build it and they will come". Like many of the humiliated Wall Street and City firms, the coffee company let number-crunching get the better of sound judgment: if the waiting time at one Starbucks was more than a certain number of minutes, the company reasoned that an opposite corner could sustain a new outlet. Like the housing market, Starbucks peaked in the spring of 2006 and has since fallen precipitously.
America's financial crisis has gone global in the past month, spreading across Europe and Asia. Why? Because many of the banks feasted on American sub-prime debt and took shoddy risk-management cues from their US cousins. Indeed, the countries whose financial sectors were most connected to the US-dominated global financial system have suffered the most.
What does this have to do with the price of coffee? Well, when you start poking around Starbucks's international store locator, some interesting patterns emerge. At first blush, there's a pretty close correlation between a country having a significant Starbucks presence, especially in its financial capital, and huge financial cockups. Take the UK, which has had to nationalise the odd bank (698 Starbucks). Or take just London, which in recent years has been the wellspring of many toxic innovations and a hedge-fund haven (256 Starbucks).
In Spain – now grappling with the bursting of a speculative coastal real-estate bubble – the financial capital, Madrid, has 48 outlets. In Dubai, 48 Starbucks outlets serve a population of 1.4m. And so on: South Korea, which is bailing out its banks big time, has 253; Paris, the locus of several embarrassing debacles, has 35.
But there are many spots on the globe where it's tough to find a Starbucks. And these are precisely the places where banks are surviving, in large part because they haven't financially integrated with banks in the Starbucks economies.
In the entire continent of Africa, I count just three Starbucks (in Egypt). We haven't heard much about bailouts in Central America, where Starbucks has no presence. Argentina, a pocket of relative strength, has just one store. Brazil, with a population of nearly 200m, has a mere 14. Italy hasn't suffered any significant bank failures, in part because its banking sector isn't very active on the international scene. The number of Starbucks there? Zero. And the small countries of northern Europe, whose banking systems have been largely spared, are largely Starbucks-free (two in Denmark, three in the Netherlands, none in Sweden, Finland or Norway).
So, having a significant Starbucks presence is a pretty important indicator of the degree of connectedness to the form of highly caffeinated, free-spending capitalism that got us into this mess. It's also a sign of a culture's willingness to abandon traditional norms and ways of doing business in favour of fast-moving American ones. The fact that Starbucks or its local licensee felt there was room for dozens of outlets where consumers would pay for expensive drinks is also a pretty good indicator that excessive financial optimism had entered the bloodstream.
This theory isn't foolproof. Some places with relatively high concentrations of Starbucks – such as Santiago, Chile (27) – have been safe havens. Russia, which has just six, has blown up. But it's close enough.
So if you're looking for potential trouble spots, forget about the Financial Times or the Bloomberg terminal. Just look at the user-friendly Starbucks store locator.
The next potential trouble spot? I've just returned from a week in Istanbul, Turkey, a booming financial capital increasingly tied to the fortunes of western Europe. There are so many Starbucks that I gave up counting (in fact, 67 of them). I have no plans to move my money there.
Daniel Gross is the Moneybox columnist for Slate.com and business columnist for Newsweek


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Saturday 25 October 2008

Pretenders all of us



By Chan Akya

I am highly inspired by the testimony provided by Alan Greenspan, former chairman of the Fed and formerly the most powerful man in financial markets, to the US House Committee of Government Oversight and Reform on Thursday. Headlines immediately captured the essence of the prepared testimony, namely that "the" Alan, as we can call him in the style of the times, had admitted some shock but hadn't really fessed up to any major mistake on his own part.

Now of course, there is the whole ego, superego and id thing; but the little matter of continuing employment wherein the former chairman derives some tidy income from consulting for the world's major financial companies in sectors such as mutual funds (PIMCO) and banking (Deutsche Bank). Then there is always the matter of book sales [1], which may be adversely affected by any notions of fallibility.

In any event, many commentators have in the past attempted to create a dictionary of what Greenspan means when he uses any particular phrase. His commentaries and numerous testimonies during his tenure were famous (or infamous, depending on how much you actually understood) for the use of code, with specific phrases designed to excite the markets but leave lay people utterly befuddled.

In the same spirit, the following few phrases that appeared in his testimony on Thursday have been translated for the benefit of Asia Times Online readers. I have also added a comment on what a certain fictitious chairman of the Fed (let us call him Paul V) might have said in the same place.

The Alan: "We are in the midst of a once-in-a century credit tsunami. Central banks and governments are being required to take unprecedented measures. You, importantly, represent those on whose behalf economic policy is made, those who are feeling the brunt of the crisis in their workplaces and homes."

What he meant: "I am really glad it's you not me doing the heavy lifting. Furthermore, my opening with the tsunami reference is designed to make this whole mess seem like an unpredictable seismological event rather than the simple effect of various policy mistakes."

What Paul might have said?: "I messed up."

The Alan: "What went wrong with global economic policies that had worked so effectively for nearly four decades? The breakdown has been most apparent in the securitization of home mortgages. The evidence strongly suggests that without the excess demand from securitizers, subprime mortgage originations (undeniably the original source of crisis) would have been far smaller and defaults accordingly far fewer. But subprime mortgages pooled and sold as securities became subject to explosive demand from investors around the world. These mortgage-backed securities being 'subprime' were originally offered at what appeared to be exceptionally high risk-adjusted market interest rates. But with US home prices still rising, delinquency and foreclosure rates were deceptively modest. Losses were minimal. To the most sophisticated investors in the world, they were wrongly viewed as a 'steal'."

What he meant: "Hey don't look at me; all my data said this sort of stuff could never happen. It's the fault of all those poor people who couldn't see that they were supposed to turn away the free money being offered to them, and the fault of all my rich buddies for trusting these poor folks in the first place."

What Paul might have said?: "Firstly, it is not true that economic policies had worked well in the past four decades, as the series of crises in the US and around the world from 1968 to the present would tell us. I should have tightened credit policy and banking supervision when the growth in higher risk mortgages appeared to increase disproportionately to actual income growth in the United States. Furthermore, the billions of dollars flowing into the US should have alerted me to potential bubbles and forced me to hike rates drastically. Or in short, I messed up."

The Alan: "It was the failure to properly price such risky assets that precipitated the crisis. In recent decades, a vast risk management and pricing system has evolved, combining the best insights of mathematicians and finance experts supported by major advances in computer and communications technology. A Nobel Prize was awarded for the discovery of the pricing model that underpins much of the advance in derivatives markets. This modern risk management paradigm held sway for decades. The whole intellectual edifice, however, collapsed in the summer of last year because the data inputted into the risk management models generally covered only the past two decades, a period of euphoria. Had instead the models been fitted more appropriately to historic periods of stress, capital requirements would have been much higher and the financial world would be in far better shape today, in my judgment."

What he meant: "Nobody really knew how to price or trade these things. They even managed to confuse the idiots on the Nobel committee. So don't blame me for believing the balderdash. Also no one told me Nicholas Nassem Taleb was writing a book [2] that would point out all these model fallacies and so sell more copies than my book did."

What Paul might have said: "We had enough experience of other crises, such as the Latin America debt crisis that blew up our banks in the late '80s, to know the effect of false assumptions and poor data on the integrity of our financial system. This should have alerted us to the potential for mispricing and false profit generation; that should have forced us to intervene on the regulatory and accounting side of these transactions to make them less attractive for our banks to do. That was my job as Fed chairman, and I failed. Or in short, I messed up."

Fessing up
Having translated some of the comments for Asia Times Online readers, I will now fess up to my own mistakes in assuming that the end of the Group of Seven leading industrialized countries [3] could be hastened by the emergence of new giants such as Russia and some Asian countries.

In particular, three countries have recently performed a whole lot worse than my expectations, in effect denting any claims they can have in coming years for being considered serious (and independent) investment destinations. These three countries are Russia, South Korea and India: I have left out for now other countries that seem in greater danger of tipping over, such as Indonesia, as they were never considered anything more than exotic destinations. The three above though were talked of in some earnest as breaking their historic moulds but instead may well have been exposed as fraudsters being pulled up by the global economic prosperity.

I show below the performance of the countries' equity indices and their currencies against the US average, and for good measure those of China. While the relative equity performance is nothing to boast about for China (indeed, as equity returns are currency adjusted it means that nominal performance in China was the worst across that column), the trio of Russia, South Korea and India show some eye-popping bad numbers. The most difficult to believe is the significant decline of the Korean won against the US dollar this year; shocking for a country that showed an improving current account balance until the middle of this year.

  YTD Equity
Return %
YTD Currency
Return %
Russia -72 -9.10
Korea -63 -49.62
India -62 -26.34
US -38 NA
China -62 +6.33

This is however not all of the bad news - as the current crisis is very much one rooted in the credit markets, it makes sense to evaluate the relative riskiness of the various governments underpinning the economies. This we can do by looking at sovereign credit default swaps (CDS), that is, the insurance payment being demanded by a market counterparty to cover your risk of that government failing to repay its obligations. These are traditionally shown in basis points or one-hundredth of a percentage point (thus 500 basis points means 5%).

From the CDS value, the implied probability of default being assigned to that sovereign can be worked out provided we can assume a certain "loss given default", (or LGD, which is fixed here at 60%); this is shown in the column after the CDS. Note that the figure below for India pertains to its largest state-owned bank (State Bank of India) because the government itself doesn't have any externally traded obligations.

  Oct 23rd 5yr
CDS spread
Implied Prob
of Default %
Russia 1100 61
Korea 600 41
India 750 48
US 25 2
China 235 15

From the above, it is clear that none of the pretenders and especially not the first three countries can claim to be in a position to overtake the existing global benchmark for risk-free assets, namely the United States. It is shocking and rather amazing that despite holding about US$1 trillion of reserves between them, the three countries average a default probability of 50% within five years. That one-in-two chance of default within the period shows that these countries have never truly learnt the lessons of the past few decades.

Russia
The simple matter of evaporating market confidence has belied Russia's claims to great-power status, resurgence under president and now Prime Minister Vladimir Putin and so on. For a country with more than $500 billion in reserves (itself down around $100 billion from just August this year), market signals are not so much about the government as they are about the overall level of confidence in the economy and its business representatives.

The first point of the market's loss of confidence is the mounting debt maturities of various Russian companies and the country's largest banks, all of which tapped the short-term (one- to two-year) markets to finance their expansion plans. With many of these facilities now coming due for payment, and no prospect that any investor would agree to postpone payments for another couple of years (refinancing), the Russian government has been expected to step up.

The only other alternative for investors in such nominally private companies, namely to convert the debt into equity stakes, doesn't apply in the case of Russia, due to the high-handed behavior of the government. Thus, despite very little in the way of direct obligations, the shadow of the 1998 debt default by Russia along with a string of Kremlin-inspired malfeasance has scared investors and caused a flight from Russia. Many oligarchs are rumored to be urgently stashing away their wealth in destinations far away from Russia, adding to the pressure on the currency - this is even being cited as one reason for private companies to deny payments to foreign creditors as their owners make off with the bank balances.

It is still possible for Russia to take remedial steps that could prevent an escalation of the current crisis into a full-blown economic collapse. After underpinning the viability of Russian banks, it must undertake quick steps to improve investor confidence; for example by avoiding arbitrary closure of its stock markets whenever prices fall [4], avoiding the temptation to indulge in currency intervention and implementing steps to improve bankruptcy procedures, corporate governance and the like which can help create equilibrium much faster.

South Korea
Perhaps the country that shocked me the most by its presence on this list, South Korea has failed to learn the basic lessons of asset-liability and liquidity management from its previous crisis in 1997-98. Most recently, the Korean government has had to unveil a $100 billion guarantee program for the offshore debt of its banks, taking away a rather substantial chunk of the $240 billion or so of foreign exchange reserves that it boasts.

Given the escalating current account deficit and poor prospects for investment inflows, it is possible (albeit very unlikely) for Korea to run out of foreign exchange by the beginning of 2010. This must be problematic for any country, and more so for one with international pretentions, as shown by the abortive global takeovers attempted by South Korean companies such as KDB [5] and Samsung in recent months.

There are numerous culprits here. Most notable is the Bank of Korea, which followed an ill-advised policy of maintaining an onshore US dollar shortage in order to deflect the potential for Korean won appreciation. In so doing, it created the conditions for greater offshore borrowings to fund the economic reliance on the export market rather than domestic consumption. In turn, this left banks and companies with the same mix of short-term liabilities against longer-term assets that marked South Korea's first descent into a balance of payments crisis in the Asian financial crisis of 1997.

Ironically, many equity index managers were finally upgrading Korea from its perch in "emerging markets" to a new "developed markets" level; instead it appears that Korea will have to negotiate to stay afloat in the emerging markets category; its most recent equity, currency and credit performance certainly put it in the same category.

India
To a number of people who bought into the BRIC - Brazil, Russia, India and China - hoopla, India's fall from grace parallels that of Russia. Here again, it is not the external borrowing practices of the sovereign itself that are to blame; funnily enough, neither are the borrowings of local companies in global markets considered to be excessive. In any event, less than $25 billion of Indian corporate and bank debt falls due by the end of next year compared with $275 billion of foreign exchange reserves that the country boasts. Even accounting for zero capital inflows and continued current account deficits, the overall cushion will remain close to $200 billion.

Achilles though still has a heel. The loss of confidence can be traced to the haphazard decision-making of the central bank, which came late to the inflation-fighting party this year in a futile attempt to prevent foreign exchange appreciation, thereby causing policy about-turns that stun even the most adept of investors.

Secondly, political noise in the country has been increasing ahead of next year's elections. This has turned investors naturally cautious, and in turn made crisis management a bit trickier for the government (in which respect there is much in common with the recent US experience).

Thirdly, there is legitimate concern both domestically and offshore about the impact of low infrastructure investments by India over the past two decades. The problems seen in the poorest parts of the country offer a closer view, albeit one that the media have been slower to latch onto compared with the markets.

Recent violence in the state of Orissa between Hindu fundamentalists and Christian missionaries showed not so much the tinderbox of religious intolerance as it did the fairly low "price" that poor Indians assigned to their centuries-old culture and religion. For the destitute and the desperate whose battle for basic sustenance is all-consuming, manna from any source is welcome. Inconveniently enough for the people who believe in an India that can outshine its recent past, the images aptly conveyed the two sub-nations (the upwardly mobile and the downwardly stale) created by communist-inspired governments in the country. [6] As in the case of Russia, the response from investors has been to sell first and ask questions later.

And in closing ...
Perhaps the one quote from Greenspan's testimony that I find myself agreeing with, and especially the last sentence: "There are additional regulatory changes that this breakdown of the central pillar of competitive markets requires in order to return to stability, particularly in the areas of fraud, settlement, and securitization. It is important to remember, however, that whatever regulatory changes are made, they will pale in comparison to the change already evident in today's markets. Those markets for an indefinite future will be far more restrained than would any currently contemplated new regulatory regime."

The fact that a market become overcautious at the drop of a hat (or a few billion dollars) is borne out by the experience of the US subprime mortgage market, as it is for countries such as Russia, South Korea and India. In all these cases, the loss of confidence that has been sparked by a combination of quantitative and qualitative factors will induce substantial behavioral shifts that will take years if not decades of patient reworking for these markets and/or countries to correct. Pretenders, whether they are government officials or market fallacies, will always be exposed.


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Friday 24 October 2008

Definitions: The Proletariat


 

 

By Gaither Stewart

17 September, 2008
Countercurrents.org

 

"Suppose that some great disaster were to sweep ten million families out to sea and leave 'em on a desert island to starve and rot. That would be what you might call an act of God, maybe. But suppose a manner of government that humans have set up and directed, drives ten million families into the pit of poverty and starvation? That's no act of God. That's our fool selves actin' like lunatics. What humans have set up they can take down….Whoever says we've got to have a capitalist government when we want a workers' government, is givin' the lie to the great founders of these United States…."

 

A Stone Came Rolling
Olive Tilford Dargan


(Rome-Asheville, N.C.) I was back in Asheville where I started out. I found her gravesite in the obscure Green Hills Cemetery in the frontier territory of the West Bank part of this mountain city, across the French Broad River that the Cherokee called Tahkeostee.

OLIVE TILFORD DARGAN
JAN. 10,1869
JAN.22, 1968
HER HUNDREDTH YEAR

 

The poet is now forgotten. Her tomb lies far from the monumental cemetery-resting place of other Asheville writers such as Thomas Wolfe and O. Henry. In her long life she was neglected because she was a proletarian writer, no easy undertaking in her times in Western North Carolina. Concerning the workers' struggles in America last century, Dargan admitted that literature was secondary to her social commitment. 'The struggles lie closer to real experience than the flutter of an eyelid which has occupied bourgeois writers ….' A widely traveled Radcliff graduate, Olive Tilford Dargan lived most of her life in Asheville, NC. Acclaimed poet and novelist and in Who's Who, she was blacklisted during the McCarthy Communist Scare in 1950s. Other writers labeled her writings propaganda because she "hobnobbed" with Communists.

 

Dargan described her first novel, Call Home the Heart, published in 1932 by Longmans, Green and Company, under the pseudonym of Fielding Burke—as 'a proletarian novel depicting the role of mountain folks in the Gastonia, North Carolina cotton mill strikes,' also largely forgotten as are the wave of violent textile worker strikes that swept through North Carolina in 1929. The strike in Gastonia reflected the tensions rising from the industry's rapid development in the South after World War I when northern capitalists took over the southern mills to exploit cheap labor. Since Gastonia was the epicenter of the phenomenon, mountaineers from the Smokies swept into town to work in the mills. The Loray Mill (pronounced Low-Ray) was the first in the South to undergo new "techniques" such as speed-ups forced on the worker rather than new technology. That exploitation of labor ignited the anger of textile workers in the region until walkouts began. The strike in the Loray Mills was the most famous and the most violent.

 

I still remember the red brick buildings, the chain-link fences and the little houses in Loray Village in West Gastonia that we passed each time we arrived in Gastonia where my grandparents lived. At that point my father always said, "Well, we're at Loray, so we're nearly there."

 

Mill owners and state law enforcement crushed those strikes so viciously that subsequent attempts to organize labor in the North Carolina textile plants were unsuccessful. Yet the history of the strike remains, recorded in novels like those of Dargan and in the writings of one of the organizers of the Gastonia strike, Vera Buch Weisbord, a Communist and member of the National Textile Workers Union, NTWU. No less than Marxist writings, such histories of the battles for social justice throw light on the eternal struggle between labor and capital.

 

The history of the clash in Gastonia offers the perfect setting for an epic film or a social play of an insurrection. All the classic characters are present: evil capitalist mill owners, exploited workers in hot dusty factories, tiny ragged children and their emaciated mothers and wives in the square wooden houses, strikers, scabs and strike-breakers and dedicated and corrupt union leaders.

 

Dargan claimed the sequel to her first novel—A Stone Came Rolling, same publisher, same pseudonym—was even more proletarian. She claimed that she strove not to write propaganda while she fought with conflicting feelings about writing poetry and her social responsibility. Can one combine the two? she wondered. Or are fiction and social reality destined to take separate paths?

 

Dargan was an idealistic dreamer. To the end she continued to see good in a southern folk that has always been not only violent and brutal but also lacking in any kind of class-consciousness. They were no shield against the capitalism she detested. Neither her Asheville nor strike-ridden Gastonia 100 miles away were safe places for radicals.

 

PROLETARIANS, THE PROLETARIAT AND CLASS CONSCIOUSNESS

 

This article should be dedicated to wage earners—especially in the USA and Europe—as well as to those peoples of the world who have no wages at all, the potentially class-conscious proletarians who have the capability of changing the reigning social-economic order.

 

The prologue to this historical play begins in ancient Rome where the proletariat was the lowest class, the plebs, the masses. Then, a jump forward through the English Revolution to the French Revolution where the curious wage earner-spectator finds the same lower classes now represented by the sans culottes, the ragged have-nots of society, ruled over by the bourgeois and the royalty. Then, a half century later, Marx attaches the old label of proletariat to the workingmen and the downtrodden masses capable of war against the bourgeoisie. By the time of the Russian Revolution the working class there has become class-conscious and in the vest of the industrial proletariat—no longer simply ignorant masses—executes its revolution.

Ten years later, when those textile workers strikes spread over the American South, bombs flew, agitation was real and the potential for proletarian revolution was in the air. The missing factor in America was effective leadership as in Russia. There were only strikers for more pay, strikebreakers, scabs and suffering people.

 

Online I found this eloquent testimony in the book by John A. Salmond, The General Textile Strike of 1934, From Maine To Alabama, University of Missouri Press, Columbia and London.

WE DIDN'T HAVE NO BACKING.... WE SHOULDN'T
have done it. The South hadn't even begun to organize
well by then, " remembered Kasper Smith, former textile
worker and striker. "What happened in 1934 has a whole lot to do with
people not being so union now." The veteran organizer, Solomon Barkin,
made much the same point at a 1984 symposium commemorating the
strike's outbreak. The strike's leaders had had little "experience with lead-
ing large strikes, " he asserted; there was no money to sustain the effort;
"organizational preparation was practically nil"; there was little support
from other unions, the federal bureaucracy or the president, "preoccu-
pied" as he then was "with recovery rather than labor relations." More-
over, the AFL generally had failed its local union base, especially those
"which had been spontaneously formed" in the wake of the NIRA's pas-
sage. They were essentially left to their own resources during the strike.
There was no national direction, no widespread public or union support.
This was not a national strike at all, but rather the sum of thousands
of essentially local efforts, often with differing impulses and aims, and
this was especially true of the cotton textile South, the strike's supposed
epicenter, where the workers' sacrifices were the greatest, the repression
the most severe, and the consequences of failure the most long-lasting.

 

No, the idea of the proletariat is not passé. The word proletariat still conveys the sense of resistance to oppression, of action, of force and strength, of an ideal. The words labor and capital, as Marx used them, are real-life categories. The capitalist and the wage earner are the personification of capital and wage labor. To disparage such words or use them in derision is to deny the dignity of human existence. For today as yesterday the proletariat is no less than the great masses of the world. It is the people. It is one of those words that are exciting and stimulating … but in the abstract. In fact the concrete proletariat is hard to touch.

 

Though those masses personified by proletariat constitute a class, they themselves are seldom aware of it. To become a class of action the proletariat requires leadership, something those furious, hungry, striking textile workers did not have.

 

The proletariat is complex. It comprises much more than the industrial proletariat of the Russian Revolution. It comprises any wage earner, the property-less class, which sells its labor to the class of property, money and power who however do not work.

 

Thus those two classes—those who work and those who don't—stand face to face on the stage of life, interdependent, but forever at war with each other. The capitalist class understands instinctively this eternal dichotomy dividing men since the Persians, Mesopotamians and the Greeks. But the super-indoctrinated American working class dulled by the "American dream" does not get it. On the other hand the middle class in America and Europe has not grasped that they too are now part of the proletariat.

 

Having a mortgaged home, a car and a TV does not change the proletarian's status because his very lifestyle depends on wages determined by the capitalist class which controls property, power and money. The wage earner depends on money lent him by the capitalist bank to buy his home, his car and his TV. The current subprime crisis demonstrates eloquently that those loans make the wage earner a prisoner of his employer, be it industry or banks or the state bureaucracy.

Though the man who works for wages, blue collar or middle class, is a member of the working class, his wage earner status does not make him automatically a class-conscious revolutionary. He can be anything, from a priest to the blackest reactionary, which unfortunately is often the case in the USA.

 

Modern history shows that the American wage earner—the potential proletarian—is in reality the staunchest flag-waving defender of the capitalist system that exploits him, does nothing for him except pay him unfair wages, sends him to war to defend capitalist interests, and throws him aside at will. American wage earners are so amorphous, so blunted in their ballyhooed ignorance, so unstructured and ill-organized that they do not even constitute a class. Their ignorance and their acceptance of their situation represents one of the great victories of capitalism.
The arrangement doesn't make any sense at all.

 

Many Europeans workers are still class-conscious. But not the reactionary American workingman. The absence of class-consciousness of the American workingman exemplifies Marx's statement that "the working class is either revolutionary or it is nothing."

 

Even more: not even the mildly class-conscious workingman is aware that he is willy-nilly engaged in a war with the capitalist class. He continues to accept his role as an indistinct part of an illusion of a society, as an abstraction of a cradle-to-grave category, destined to make no mark on society, to leave no traces of his passage though life.

However, those 1930s textile strikes in North Carolina show that his illusions may one day fall away. The day he and his new middle class companions wake up from their incubus and genuine, fully developed class awareness arrives, the newborn proletariat can then become revolutionary.

 

That day will be the death of American capitalism, as we know it.

 

Meanwhile, caution. Let's don't confuse revolution with either liberal reform or armed insurrection. Reform is adjustment made by the rulers in order to maintain power, as happened for decades in Tsarist Russia. As a rule, reforms are too little and too late. Insurrection on the other hand is a local, spontaneous and one-issue matter, as was the 1929 Gastonia cotton mill strike. Insurrection is not revolution.

 

Since drastic and radical social-political change should be the goal of thinking world citizens today, everything that inhibits social solidarity, the blossoming of resistance, the redistribution of wealth, and the creation of a rebellious mindset against a negative myth are obstacles to be overcome.

 

But wait a minute! A myth? What myth? In this case—the myth is America itself. The Greeks too wondered how can you battle a myth? In the aftermath of the fall of Troy, Menelaus stood before Helen with his sword raised: he stared at the traitoress and let his sword fall. He couldn't kill her. Helen was a myth. Menelaus wondered how you can kill a myth. He was not a revolutionary. In the final countdown, myths too, that is illusions and false consciousness, must be destroyed to make room for legitimacy.

 

Speaking of myths, let's keep in mind that though born out of solidarity and resistance and reason, the United States of America has always harbored violence in its soul. We now see that peaceful, anti-war, mankind-loving America is a myth. A parallel violent world lives within American society. In America, violence and war are so much a part of life that non-violent opposition to its inbred violence seems to be hopeless folly and unreason. In comparison to America's homebred terrorism and violence, just a heartbeat away from mainline life, al-Qaeda is stuff for babies and schoolgirls. In comparison to today's institutional terrorism, past student non-violent protest or even pistol-armed Black Panthers and Weather Underground insurrections appear as innocent as breaking plate-glass windows.

 

Another illusion to be overcome is that the abstract workingman-proletarian can develop class-consciousness alone. Class-consciousness must be instilled from outside the class. That role inevitably falls to the intelligentsia and activists. Marx wrote in German Ideology that "one of the most difficult tasks confronting philosophers (let's say, educated people), is to descend from the world of thought to the actual world." That is, to the world where the workingman lives.

 

Yet, proletarians reject interference by intellectuals. The American workingman appears allergic to knowledge and history. Therefore he is the most truant in class awareness. The American working people have forgotten that they constitute a class, that classes even exist. They act as if the class idea belongs to another planet. To the world of Communism! That it too is an illusion.

 

Moreover, the poor economic classes of America accept the American Dream rhetoric that the rich deserve to be rich because they are smarter. Wealth is proof of their virtue. It is good to be rich. The poor are guilty for their poverty. As John Steppling points out on these pages, the American poor produce and reproduce the values of the ruling class, the values and ideals of the rich. The poor live in the illusion of real choices in life while in reality they live their little lives in servitude.

 

While the "people" are as if paralyzed, blind and dumb, in its name travesty after travesty are committed by those same capitalist leaders who betray the people routinely and abominably, making themselves traitors in the process and making the people complicit in their crimes against humanity. In Nazi Germany it was "we didn't know." In America today it is "we don't want to know". No false airs, please. That's un-American. Who cares about social theories? Who cares where Laos is located? Or Georgia? If Saddam Hussein wasn't responsible for 9/11, he could have been, which is the same thing. Only evildoers and anti-Americans believe he didn't have weapons of mass destruction. The wide admiration for ignorance, I think, is in imitation of the ignorance of the nation's leaders. And, as we know, ignorance is the handmaiden of the crime of Fascism.

 

By a strange coincidence I just opened at random the book The Origins Of Bolshevism by one of the forgers of the Russian Revolution, the Menshevik Theodore Dan, and found his remark about the "open war of the Orthodox folk (in pre-revolutionary Russia) with educated people." Also then, in those different but analogous circumstances of pre-revolutionary Russia, educated people were isolated from the masses. From that perspective the working class in the US has become politically worse than nothing. As a collective it has been molded into a reactionary force that keeps the power elite in power. Conditioned, brainwashed and hoodwinked, the bribed workers seem to believe ignorance is for their own good.

 

So what happened to the collective? Or, worse, was it always that way? Except for sporadic insurrections in face of starvation in the depression years and isolated periods of resistance, the American collective has never emerged in the glory it must harbor somewhere.

 

Therefore Marx said that if the proletariat is not revolutionary, what good is it? And that is the pertinent question today. Is the American workingman, the wage earner, the proletariat, reformable? I pose that question for that American wage earner who does not pose the question himself.

 

At this point we can't go much further in the American part of the proletarian tragedy without some class distinctions. Today, up there on the political stage we see the prancing billionaire puppets of the capitalist class who control property, money, and, consequently political power. Whom they decide to place at the top of the pyramid today to represent their interests and misrepresent the masses should be a matter of indifference to the blue collar-middle class wage earner masses. In my mind not voting for any of them is an acceptable choice if accompanied by compensatory revolutionary activity. The most one can say is that a growing number of Americans, now approaching a majority, either through choice or indifference have opted for the non-vote route, while a tiny minority finds satisfaction in minimal grassroots agitation.

 

And here, another character mentioned above steps on stage. Today, as in recent centuries in the Occident, there is an in-between class. It is part of the middle class, elsewhere and at other times called the petty bourgeois, from which emerge America's liberals and progressives. Many petty bourgeois beyond America's borders, chiefly in Europe, prefer to label themselves Social Democrats. Far from wanting to transform society in the interests of revolutionary proletarians, they aspire to making the existing society tolerable … for themselves. In their own interests they want to counteract the rule of capital by the transference of as much power and employment as possible to the state of which they are an integral part.

 

HOWEVER, in their conception of state and society, the workers, the wage earners, the proletariat, are to remain forever workingmen, wage earners, proletariat. Therefore the petty bourgeois (again, the liberals and progressives) social programs for better wages and security for the workers, with which they bribe the workers to stay in line.

That was the warning Marx and Engels brought to the Central Committee of the Communist League in 1850. But how modern it rings.

 

That's where the proletariat must step forward and shout, NO!

 

It's true that every event that happens leaves traces. It is something like mirrors and their reflections. Except that in the mirror's reflections, the left is right, and the right is left. Illusions all! Illusions are like words unspoken that are no longer words at all. Sometimes we have to banish all possibilities of illusion. Sometimes we have to stop, close our eyes, and allow ourselves to see real reality, not illusion where right is left, and left right. Reality free of brainwash. Free of all those words and euphemisms we hear on TV and read in the establishment press. We can trust none of it.

 

One problem facing the wage earner-proletariat is the lack of a suitable program. I can't see an acceptable program for changing the world. The "Another World Is Possible" movement is at best a loose agreement around the planet that change would be a good thing. One answer to those who wonder what the new resistance wants is simple: they want a just society.

Sometimes it is comforting—but not much more than that—to recall that though protest movements of the past have been broken and scattered by Power, many of those people and like-minded others are still out there in society. They could rejoin the growing number of mature people with eyes to see and ears to hear.
But what are they to do? one wonders.

 

That has always been the question.

 

Studies show that the class of Power in the USA is surprisingly small, numbering in the tens of thousands. The potential opposition on the other hand is enormous, including all those Che Guevara had in mind when he quipped, "If you tremble in indignation at injustice then you are my comrade." El Che had in mind the proletariat of the world.

 

Though much of the ruling class is stashed away in corner offices on top floors behind batteries of secretaries, apparently in hiding, out of its vanity it still wants to be seen. For what is Power if no one knows YOU hold it? Members of the Power class are visible on stage each day, in TV, in Congress, in the military hierarchy, in diplomacy, multinationals, religions and the universities. The higher they ascend the ladder of Power, the more entrenched in the Power system they become. However, those at the very summit are in hiding, the rulers who really rule. The most dangerous are those who meet in secret societies like the Bilderbergers. We can suspect who they are.

 

Since it seems that the people sitting in the top tiers of our political-social theater have abdicated from the struggle, we tend to underestimate their power. For they too have a stake in the land. One forgets the potential force of those textile strikes of the 1930s. One forgets that organized workers can bring a small city like Asheville in North Carolina or a metropolis like New York or a company like General Motors to a standstill in a matter of hours. The reason that seldom happens is because the people have forgotten their own strength.

 

People don't think about their strength because of Power's astute use of myth and illusion: the myth of freedom and the illusion of happiness made of comfort and ease. And today, above all, more and more out of fear!

 

Though most people seem to prefer ignorance, some people are learning to distinguish between myth and reality. For many issues are glaringly real and evident: the Iraq War, globalization, US imperialism, legalized torture and genocide, the new American police state, and the degradation of social life in the West in general.

 

Solidarity too is growing. Resistance spreads. The superiority of "the American way of life" has revealed itself to be a great lie. The result of extended and prolonged resistance is inevitably state violence against dissent. State violence in turn has a multiplier effect: when Power steps in to taser dissenters, it intensifies resistance. An explosion becomes inevitable. First collective action, then civil disobedience, then state violence, then the explosion. For police-state laws change our thinking about legitimacy. This time around the explosion can become something much different than Power imagines. An organized people can shut down the nation without firing a shot.

 

The people! Today the American people are broken, fragmented and bewildered, devoid of unity of purpose, as existed briefly, let's say, during the Vietnam War. According to recent studies the vast majority of American people are still unaffected by America's ongoing permanent war. The discussion about whether 70,000 or over one million Iraqis have been massacred has a certain theoretical-academic air about it. Not even the mothers of the American dead in Iraq can get organized.

At the same time more and more people have lost faith in the electoral system. Some of them have taken on the job of breaking down the natural passivity of the dissatisfied and fragmented people who, though in potential agreement with revolutionary analyses, are unused to resistance because of the illusionist spin conducted by Power. Therefore the suggested antidote of not voting for any of them.

 

Then there are the wars to be ended. If the people can't share the government's war effort, it can share in anti-war objectives. There is vast and growing poverty and social injustice to be resolved. There is a dramatic need for universal health care. There is a corrupt and mean political class to be removed. All of it. Both parties. There is every need to give power back to the people.

 

Grassroots organizer Abigail Singer, co-founder of Rising Tide North America and of a recent Southeast Climate Convergence conference in Asheville, North Carolina, said in an interview that voting is not enough because the electoral process has been sold to the highest bidder and that people who get into positions of power have to sacrifice whatever principles they started out with to the point that systemic change is impossible. Real change can come only from the grassroots.

At the same time a growing number of people are losing faith in nonviolence. Singer points out that capitalism itself is extremely violent. "If you're not nice and polite, some people consider that violence. But most violence is in business as usual and capitalism grinding on, killing workers, forests and oceans. We're surrounded by normalized violence and don't recognize it for what it is. Confronting this normalized violence in a direct way is not violent; it's necessary."

 

While liberals and progressives argue that you have to work within the system, the modern activist is mutating because the political climate has changed. The violence of government repression creates violent reaction in the same way war against Iraq creates new shahids. Violent resistance is nothing new: Black Power backed up the Civil Rights movement. Historically the US government didn't grant more workers rights because it became good but because people rose up and demanded their rights. People organizing to defend themselves reaches back through the history of man. Today in America some few people are coming together and developing new ideas of resistance. Their number is destined to grow to the degree that government repression grows.

 

After my youth in America I have lived my adult abroad. Traveling to the USA today is to go abroad. Therefore I have acquired a double sensibility about my homeland. When I arrive there, abroad, but also at home, I feel double tensions in the air: the tension connected with the widespread fear of losing "the American way of life" and the tension of a minority of dissatisfied people also fearful because it knows it is living an illusion, and that mutiny—still so nebulous as to appear a chimera—will be necessary to change things. In America I sense both a fear of action and a fear of non-action. Perhaps also a fear of change, fear that things can only get worse. The fear, as one friend wrote me today, that something very bad is about to happen to America. A fear like that of a people inhabiting the wrong house, or the haunting fear that the real house it once inhabited is today occupied by usurpers and has lost its soul.

 

One senses also a disturbing atmosphere of sick pragmatism and a depoliticalization coupled with widespread contentment with just analyzing the current situation rather than challenging it.

It is a good sign that across the land some grassroots activists are working to break down indifference. Radical change presupposes an end to blind acceptance of Power's fictionalized version of reality. Activists no longer need feel alone. Each person arrested in anti-war demonstrations acquires new faith in resistance and each of them creates new converts.

Acceptance of the legitimacy of Power, indifference to Power's deviations and passivity in the face of Power's threats against external enemies seem to have peaked. More and more people believe that Power gone mad has to be put aside. The eventual end of acceptance and passivity could result in a kind of explosion the world has never seen.

 

Today however that clash is still more hope than reality. Hope that a new strategy of liberation from the oppression of illegal American Fascism will mushroom. In other times, in an older language, that strategy would be called revolutionary theory. The old Leninist concept is apt here: there can be no revolutionary movement without a revolutionary theory. The theory here, the strategy, must explain that it is not just George W. Bush, the system's current representative, or his replacement, who must go, but the system itself run by that tiny minority at the top.

But people don't rebel easily. People prefer reforms. People do everything possible to avoid social convulsion and upheaval, even compromising with a Fascist police state, precisely as happened in Nazi Germany and Fascist Italy.

 

On the other hand, today's US government is aware that the spirit of mutiny/revolution is brewing. That is why it has armed itself with a set of illegal and anti-constitutional laws to crush it. At this juncture the alternative to ousting today's corrupt American system is a permanent police state, which if it becomes any more fixed than it is now just might last a thousand years.
The American people will have to decide what to do and how to act. Meanwhile many non-Americans agree that the most extreme problem of this century for mankind is the confused, powerful and violent United States of America.

 

Finally, as an epilogue, see what Henry David Thoreau (1817-78), great American author and philosopher, wrote in his "On the Duty of Civil Obedience":

 

"All men recognize the right of revolution; that is, the right to refuse allegiance to, and to resist, the government, when its tyranny or its inefficiency are great and unendurable. Those who, while they disapprove of the character and measures of a government, yield to it their allegiance and support, are undoubtedly its most conscientious supporters, and so frequently the most serious obstacles to reform.

 

"If the injustice is part of the necessary friction of the machine of government, let it go, let it go…. if it is of such a nature that it requires you to be the agent of injustice to another, then I say, break the law. Let your life be a counter-friction to stop the machine. What I have to do is to see, at any rate, that I do not lend myself to the wrong, which I condemn.

"But what shall I do? You ask. My answer is, If you really wish to do anything, resign your office. When the subject has refused allegiance, and the officer has resigned from office, then the revolution is accomplished."

 


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Definitions: The Intelligentsia


 

 

By Gaither Stewart

26 September, 2008
Countercurrents.org


"Things as they are don't seem to me satisfactory….The world as it is, is unbearable."

(Albert Camus, Caligula, act 1, scene IV)

 

"What is so bewildering is the conviction—and it is becoming more and more general—that in all the perils that confront us the direction of affairs is given over to a way of thinking that no longer has any understanding of itself. It is like being in a carriage, descending an increasingly precipitous slope, and suddenly realizing there is no coachman on the box."

(The Russian diplomat- poet Fyodor Tyuchev (1803-1873) in a letter to his wife about the dangerous road ahead toward revolution)

 

(Rome) I am not an intellectual. But I am an artist and part of the intelligentsia.

WHAT? Not an intellectual! Intelligentsia? What is the difference?

 

Though most people are vaguely familiar with the word intelligentsia, many confuse it with intellectuals and might be surprised at my claim that I am not of the first but belong to the latter. That distinction is the subject of discussion here—the distinction between uncommitted, if not compromised, intellectuals and the socially committed intelligentsia. That difference is an accusation against the ambivalent situations of many intellectuals in the USA today. That difference can also clarify the positions of educated people in general in all of contemporary Western society.

 

Since intelligentsia comes to us from the Russian, in research for my recent essays, "Stalin, The Poet, And Life's Choices" and "The Return of the Proletariat" (www.bestcyrano.org and elsewhere) I studied also the emergence of the intelligentsia in pre-revolutionary Russia and its contribution to the greatest revolution of our times. Most curious are its instructive analogies with and disconcerting divergences from the educated classes in the USA today. The Russian revolutionary example, like Russia itself, is not as distant and exotic as westerners might believe, the Russia that America has propagandized as just another despotic Eastern power.

 

We should recall that Russia is also the West. It is part of us.
For the great Dostoevsky, Russia is even a far better West, even a better Christendom, for that matter.

 

At the outset it must be clear that the word, intellectual, does NOT reflect the significance of intelligentsia. Despite dictionary definitions, the two are not the same. For a starter, some intellectuals in our society belong to the intelligentsia. Many do not. For example, pure intellectuals with no pretensions of belonging to the radical intelligentsia occupy the huge and powerful academic world. Therefore, to distinguish between the two one resorts to the transcription of the word from Russian, hopefully to express the true meaning of the latter. Nonetheless, the word intelligentsia too has been internationalized and its meaning at times degraded to banality.

 

In pre-revolutionary Russia the intelligentsia did not mean a professional part of the population such as writers, academicians, philosophers, sociologists, academicians and educated people in general. Instead it was a social group united by ideas: a similar political direction, philosophy and world outlook. Just read Dostoevsky's novels and you read novels of the ideas projected by the intelligentsia of then. Historically the word implies radicalism and a desire for drastic socio-political change, a particularly valid consideration for intellectuals in the USA.

The appeal of Marxism to the intelligentsia was and remains a natural process. Marxism contains not only the element of philosophical materialism but also a big and seductive dose of genuine existential philosophy, born from Marx's German idealism. Faith in the human will. Confidence in human activity by the revolutionary struggle of the classes. The idea that man can overcome the power of (mostly hidden) economic power relations over his life. A positive view of the future.

 

Hence, the most learned and educated people in society are most certainly NOT to be considered part of the intelligentsia if they are conservative or reactionary. Examples of intellectuals who are not of the radical intelligentsia are numerous, for example the French intellectuals who at the peak of the Revolution morphed into counter-revolutionaries and fled back to the King and his Court rather than risk the perils of the Revolution of the people.

 

Similarly, modern French intellectuals of the "ideology is dead" school such as Bernard Henri-Lévy and other so-called nouveaux philosophes, made careers debunking intellectual commitment, which is the role of the intelligentsia. After the overthrow of Communism in East Europe the typically facile message of the nouveaux philosophes was that one could no longer take socialist ideas seriously. Lévy said, oh so misguidedly, so maliciously: "When intellectuals let themselves believe in a community of men, they are never far away from barbarism." Not only reductive but no less than an apology for totalitarianism, of the natural, right wing kind.

 

Lévy and his intellectual friends became opportunistic journalists. They found easy targets among French committed writers: Sartre had flirted with terrorists of the German Baader-Meinhof Gang and Debray trained in guerrilla warfare in Bolivia with Che Guevara. Jean Paul Sartre, Albert Camus, Régis Debray and also André Gide, despite his flirts with Cold War anti-Communists, were the other side of the moon from the so-called philosophes.

 

For as always and everywhere post-commitment intellectuals like Lévy find themselves in the blind alley of having to try to justify social injustice. Under the guise of neo-liberal free marketers, conformists coolly tell us that rich countries have no responsibility for problems of the Third World—as if we didn't all belong to the same world. Given his impeccable credentials as an elegant counter-revolutionary, it should come as no surprise that Henri-Lévy, thick central casting Hollywood French accent and all, is warmly received, some would say fawned upon in the most distinguished precincts of the American media establishment, from the intellectually clueless Charlie Rose to the pseudo-left gnomes at NPR.

 

Fortunately, many European and Latin American intellectuals have been political and progressive. By force of their commitment they are members of the intelligentsia striving to change the world: such as Sartre and Camus in France. In Latin America Gabriel García Márquez (my journalistic model and master on the positive role of bias), the great writer Ernesto Sábato in Argentina who headed action against the military regime, and Pablo Neruda in Chile who joined the Socialist government of Salvador Allende, belong to the committed intelligentsia, as did the prototype of the man of action, Che Guevara, and certainly Fidel, whose role as a dedicated teacher of the masses, as Mao once saw himself, is also well established. Presidents Chavez and Morales are now following the same route.

To grasp the world of difference between the compromised artistic intellectual and the committed intelligentsia one only needs to compare their role in society with that of powerful, highly placed Jorge Luis Borges who instead supported the military regime in Argentina. Or with the neoliberal Mario Vargas Llosa in Peru, wonderful writer, but considered by many a traitor to his original vocation.

The bulk of America's academic specialists and economists and the entire rightwing intellectual establishment with its think tanks and foundations do NOT, cannot belong to the intelligentsia. It would be highly imaginative, misleading and false for members of neo-conservative circles to depict themselves as intelligentsia, as used here. For it is the reactionary intellectuals who write those ridiculous, stupid and mendacious political convention speeches and slogans which members of the real intelligentsia find so unbearable. Reactionary intellectuals coin the euphemistic language marked by expressions such as "preponderant intervention", "preemptive war", "New World Order", "collateral damage", etc., and organize blasphemous functions like national prayer breakfasts, all of which makes the intelligentsia vomit in disgust.

 

Such "intellectuals" can never be intelligentsia.

 

No matter how educated they are, no matter their impressive credentials in this or that field and recognition among their own kind, reactionaries are NOT of the intelligentsia, who instead strive for radical social change.

 

Obviously the distinction I began with is fundamental. Yes, if we want to distinguish between educated people in the image loving, reality show-driven, imitative, poseur society of the USA today and the intelligentsia of positive, forward-looking radical thinkers linked by ideas. For the most part the latter are linked by ideas simply because the impossibility of real and meaningful political action leads them to the development of ideas.

 

Underlying the intelligentsia's ideas however—and this is fundamental in the USA today—lurks a revolutionary frame of mind. That mindset is based on an idea, a goal of social justice that though it still dangles out of reach, is a common idea and logical goal: to change the world.

 

For example, writers and journalists. Are they mere intellectuals as was Borges, or intelligentsia? According to the Russian Communist theorist Georgy Plekhanov, "the belief in art for art's sake arises when artists and people keenly interested in art are hopelessly out of harmony with their social environment." Art for art's sake is the attempt to instill ideal life in one who has no real life.

 

Authoritarian systems rely on compromised writers to portray false images because they fear the truthful portrayal of reality. The compromised writer follows the victors. Conformity and opportunism go hand in hand. The road of the uncommitted intellectual is the middle. He avoids saying what he feels for fear of his place in society. He is aware that many people do not like being told the truth and he is willing to write what he is told people want to hear.

 

Compromise in journalism and literature leads straight to the banalities of writing—the terrible to-do about petty problems of ordinary existence or in its most degenerated form about the radiant futures of totalitarian societies. The headache of choosing a vacation destination or workers with shining eyes gazing toward the horizon of the future cannot be a substitute for themes like injustice and human suffering.

 

This is not however to suggest that culture predominates.

There is no doubt that political-economic power calls the shots.

 

And capitalist Europe, America, Japan, etc., remain capitalist, imperialistic, greedy and avaricious.

 

The message carried by a common culture of social change contrasts with the message of economic gain and political power. Culture's message must be social, inquisitive, critical, often calling people to arms for resistance. In this sense, at certain times of societal evolution, literature can be more important than economics and politics, and religion too, for that matter.

I could have ended this essay here. The significant part has been said. Yet, since the goal I am speaking of is radical change I still want to underline the analogy between the American and European intelligentsia and the pre-revolutionary atmosphere in Tsarist Russia.

 

What? Russia again? Another futile historical reflection? Another wasted "intellectual" retrospect?

 

No, I don't think so. Because America today stands on the threshold—maybe on the precipice—of an explosive situation in which the appearance of a new version of the proletariat now formed by wage earners and crossovers from the impoverished, zombie middle class points toward the inevitable emergence of a new political movement. That virgin movement needs new ideas. It badly needs ideas and guidance, today. For this objective, this goal, is no longer some theoretical political Ultima Thule. This is an Alamo for America.

The American intelligentsia represented by the editors of publications like the one that published this article originally (Cyrano's Journal Online) and by a growing number of like-minded persons are still too few in the vast nonsense and ignorance of real America. No wonder the American intelligentsia's oppressive feeling of isolation. As in pre-revolutionary Russia, also the radical American intelligentsia speaks of itself as "we" and of state authority as "they." No wonder its loneliness, as if living among people who no longer understand its language. No wonder the feeling of comradery among us. And no wonder the hint of a kind of monastic order about the American radical intelligentsia, its different life style and behavior and its ability to see through the gossamer manifestations of the capitalist society in which it lives. No wonder the radical's difficulties inside real society moving in the wrong direction!

And no wonder the more sensitive uncommitted intellectual feels superfluous in the presence of the committed intelligentsia.

 

This is not to deny that the intelligentsia has its grave faults, inconsistencies, stupidities. The intelligentsia's outsider complex is in fact counter-productive and a-historical.

 

There is an elusive word that describes the situation and mood I have in mind. It's in a song. Or in a poem. It's on the tip of my tongue. The word might describe who we are. I begin to recall. There is a Dominican song. Buscando…? Buscando visa para un sueño. Searching for a visa to a dream. A reason for being. Searching for a visa.

 

The intelligentsia desires that visa in order to arrive, and not remain excluded, isolated, lonely. It wants to participate, to be part of the main. Even if the main is on a false course toward the rocks and shipwreck. We instead live as strangers in a foreign land. But we hope to find the way back, for we miss America. That visa opens new horizons.

 

The chance reader only has to open his mind in order to see the real world with new eyes. To see that it is not a world to conquer militarily. It is a world to join. An entire world marked by humanness. As has been said before the intelligentsia cannot forget that sometimes it's necessary to steep oneself in the non-intelligence of the world. For unlike the intellectual class of educated specialists, the intelligentsia is formed by various social classes, not by castes nor a common social or economic status. As the Russian philosopher Nicolas Berdyaev remarked about the intelligentsia, "By definition it stands for a break with the classification of everything according to categories."

 

So now that we have defined it, praised it, and lamented its loneliness and even inadequacies, what does all this mean for us? Intellectuals? Intelligentsia?

It comes down to a question of roles. The American intelligentsia asks, What is to be done? That same question was posed by the Russian intelligentsia in the suffocating society of 19th century Russia so reminiscent of today's America.

I keep returning to the Russian example because just as the intelligentsia in pre-revolutionary Russia set its stamp on the development of the idea of Socialism there (after all, making the greatest revolution of modern times!), we believe that when the propitious moment arrives, when what was inexpressible becomes expressible, when events have created a universal mood of revolutionary discontent with the existing system, when tensions reach the boiling point, the American intelligentsia, together with the American wage earners and the ever vaster, ever multiplying, ever angrier and, one hopes, awakened middle class, will rise against the capitalist system and salvage the positive parts of America and bring about radical change.

 

Change is a word that both the intelligentsia and intellectuals of America should be discussing together. What kind of change do they mean? Intellectuals mean one thing. Usually reform. The intelligentsia means another. Radical change. It's an unfortunate paradox that the intelligentsia doesn't always know what exactly to do with pure intelligence.

 

The change is not the change promised in electoral campaigns, not the change written on the little cards held in the hands of backers of one candidate or the other. The goal has to be the radical transformation of the entire society. The idea of change right now is so potent that even the establishment's figureheads, Obama and McCain, are brawling to own the "brand".

The American intelligentsia might keep in mind one comforting thought: of major world countries today perhaps only America is still economically self-contained and self-sufficient enough to support and survive the upheavals of a new social revolution.

 

The great historical contradiction however is that in no other country is real capitalism so strong and the positive idea of Socialism so weak as in the United States of America, which in turn has made Socialism so difficult to achieve elsewhere.

 

So the quandary for the American intelligentsia is: What is to be done? Or, What can be done? For to our great misfortune—even if the American intelligentsia-radical Left had the means to address the rising wage earner-middle class coalition—what message would it send to them, the new masses?

A hard, brutal truth is that there is precious little to admire, little to address, in that growing class of the neo-proletariat marked by drabness and mediocrity, physical obese ugliness, monotony and mental laziness and cultivated ignorance and its anti-historical cult of non-memory, a class waiting almost obsessively to be entertained.

 

Par example: Have American people gone crazy to even consider the theatrical vulgarity of the ridiculous candidacy of a redneck racist warmonger like Sarah Palin as Vice President and possible President of the USA, recalling Roman Emperor Caligula's mad idea of naming his favorite horse, Incitatus—or Galloper—as Consul of the empire? Has everyone gone mad?

 

As an American I am offended by the idea. Have Americans morphed into the peoples of ancient decadent Rome? Peoples who for distraction relied on the blood and sand of the arenas of the coliseums across the empire. Where are we to find a model of a political and cultural ideal that could appeal to such a trampled-on lot who have been expertly trained to despise anyone or anything different from them and their "values" and the "American-way-of-life"?

 

With the reality in mind that it is precisely that ragged, disinterested American proletariat-middle class that must execute the radical change, the American intelligentsia, just as in pre-revolutionary Russia, truly has just cause to wonder: What is to be done?

 

In the United States the official reaction to the "Communist threat" corrupted generations of Americans and was the justification of the advent of official amorality in a virgin America that still considered itself pristine. In the Cold War any subterfuge was licit. In the Cold War the lie was good. Four decades of the great lie of anti-Communism sufficed to generate a new morality in America. A morality of evil that filtered down into society. It has nothing to do with ideas or ideology; only power. It is a way of viewing the world, pursued and confirmed by a great slice of the country's intellectuals. A cold manner, amoral and immoral at the same time. This evil power is an American spirit, an evil spirit that has perhaps always lurked in America. For as we now know America was never innocent. At the best, only naive. Evil lurked in the Blue Ridge Mountains of my boyhood. Evil still lurks in fundamentalist America.

 

Yet, at the same time the American nation has been duped, wants to be duped, by the great lie of the "Communist threat." The subsequent creation of terrorism and fear was the natural course of things.

 

Addendum: I confess that I'm not totally satisfied with the word intelligentsia. I welcome suggestions for a better word, a modern word that describes that dynamic but minute, unhappy, isolated and lonely part of American society today that so desires dramatic, drastic, radical, revolutionary change.

The Personal Manifesto of a member of the intelligentsia

 

• I am not objective, as true objectivity is a myth. Nor impartial, which is about the same. I have no desire to be unbiased. And God forbid that I ever become non-partisan—oh, that ugly hyphened word! Just that hyphen alone is enough to make me partisan.

 

• Traditionally journalists are supposed to be objective and impartial. But who said so? My answer is that I can be as partial and subjective as I please. As necessary. For that matter, most journalists do the same anyway, though they disguise their partiality in nice little euphemisms. [For most in the media, and the public, the mere fact of working for a commercial newspaper or tv station constitutes de facto proof of being a "professional."]

 

• As the great Gabriel García Márquez taught his journalism students, above all you must learn to be partial. Forget rules about impartiality and reliance on facts laid down by the little men. Balls! Screw the reliance on facts. Those incontrovertible facts! An obsession with facts creates small-minded people. All our lives they hit us over the head with them. When someone says 'Let's get down to brass tacks' or 'the facts are', it's time to watch out. So two plus two is four! As if only things that happen or allegedly happen are worthwhile! Facts obscure the real truth. We read mountains of facts and believe we know what is happening but we still know nothing about the center of things, the core truths.

 

• No honest journalist-writer can allow himself to be unbiased and objective. After all, few of us are academics.

 

• Besides, impartial to what? To lies? To rampant hypocrisy? To swindles? What is there about which we should be impartial unless it's those hateful facts? As if we should be impartial to and have no opinion about the fictional facts that created wars in Afghanistan and Iraq, that pave the way to war against Iran, that crushed Serbia and created Kosovo, that lead to the ranting and raving—oh, those facts!—against Chávez in Venezuela, that support lists of rogue nations and terrorist movements such as Hamas and Hizbollah. Should we be impartial to the men and institutions—like Wall Street and its minions deeply embedded in government, often indistinguishable from the political class—that have given us repeated recessions and depressions in our history, gutted and mismanaged the American economy to fit their own agendas, created a reign of deepening economic and social inequality, and that now, in 2008, threaten to crown their high-handed thievery with a mugging of the US taxpayer to the tune of trillions of dollars?


• It is surely a question of the chalk circle of the masses that Power cultivates. No one should step outside it. There is no need for genetic or biologic cloning,


As Baudrillard reminds us, the individual is already cloned culturally and mentally … by them. We feel it around us everyday just living in our society. Power wants more of it; the cloned man is easy to control.


The individual is something else.

 

We do not reject the idea of the whole individual that cannot be further divided. Yet, we want to be similar to our fellow humans, a social animal, but, still different, more than a reduced size copy of other humans. Individuality? Yes, but not at the cost of elimination of others.

 

Viva bias!



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