Archive for April, 2011

Volvo Chases the Yuan

April 20, 2011

I will attempt not to sprinkle this blog post with too many profanities.

Background: Yesterday I sat down and managed to read a book I had procured, and whose title could perhaps be translated as Overdrive. Lars Henriksson, the author, has been working for Volvo since the 60’s, and is a member of the Socialist Party. It’s packed with numbers, statistics, history and personal experiences, and gives a car hater such as myself plenty of high octane fuel in the tank. I’ll probably have reason to return to this book in future blog posts.

The most interesting part of the book for me is that Lars Henriksson proposes that the car industry could play a pivotal role in a change towards a more sustainable society. I hadn’t really thought about the future of the car industry, to be honest. Lars claims that the car industry is an incredibly flexible mechanism, and that it would be very bad to just let them die and hope that something better rises from the ruins, because a lot of know-how has been accumulated in for example Volvo over the years. Lars gives the example of how the Allies were able to transform their car industries to making bomb planes instead. The assembly lines’ step from car to train or solar panel could be quite short.

With that in mind, I am highly alarmed by the fact that today Geely (a large Chinese car company, which is the new owner of Volvo) has decided that Volvo is going to aim for the production of luxury cars. The new Chinese middle class likes big, gas-guzzling cars, as it is a sign of wealth. Not particularly good considering that peak oil is around the corner, and it is an incredible waste of resources. I feel that Volvo is spitting us in the face. But I suppose they’re only acting according to their capitalist motives, which is to make profit. And the Chinese are simply following in the footsteps of the West, surely we cannot blame them for emulating our societies? Still, this enrages, and scares me a whole lot. Revolution out of nowhere, sudden aftershock of the financial crisis, right now I feel that anything would be good to stop this development…

I’ll end with a quote from the book:

The Mafia

The large auditorium was packed to the brim with foremen, bosses and lower union representatives. It was close to the launch of the car which would soon begin production in the factory and we would be enthusiastic by taking part of a first sample and receive some of the underlying philosophy.

It was not so much a car which was presented to us. A few snapshots of details whose design had been tested in various customer surveys and which would make this particular car stand out from the competitors. Of course it wasn’t mentioned that this car, which billions [of SEK] had been put on development, did exactly the same thing as the last model and like the competitors: provide a number of people with the possibility of transportion between different places. But this basic quality is so obvious that it’s not possible to compete with that as an argument.

Instead it was a nearly religious message the bosses in charge gave to us. This little brotherhood, so fulfilled by their own importance that they without presentation called themselves Hasse, Nisse and Bosse, didn’t present a car – it was more of a religious experience, a lifestyle and an identity which would soon come to us. Because all cars are driveable it was the idea of the car and not its tedious material manifestation which was presented and would be used in marketing.

“By buying this particular car the client shows that he, or possibly she, is a person with clear values”, said Hasse (or was it Bosse? or Nisse?). “A person that cares but still has taste and wants to show it. Through the choice of his car he makes a statement, about who he is and what he stands for”, explained Hasse-Bosse-Nisse.

What we would soon weld, paint and screw together was as such not as much a modern but quite ordinary motor vehicle, but more a lifestyle which would be revealed to humanity. Something many wait for without knowing it.

Because the enthusiastic evangelium perhaps didn’t light the life spirits enough in the hot and oxygen-poor building but seemed to go over the head on the gathering one of the prophets (Hasse? Nisse? Bosse?) felt moved to leave the presentation’s script and of biblical pattern explain himself with a simile.

“Take Moscow”, he said. “If one drives around there with a Mercedes it suggests that one belongs to the mafia. And then we have an alternative for those who want to express something else.”

Then he suddenly fell silent and stared, hit by an insight, out into nothing. In the lack of a script he lost himself in a new thought and began to speak, if not in tounges, at least without thinking.

“Though of course, it’s the mafia who has the money…”

He let his words hang in the air too long. During a few seconds and angel went through the room and I imagined that onehundred and fifty people thought the same thing as I:

“And who is it that you want to buy the cars if it’s the mafia who has the money? And is it on average, in the world, ‘the good guys’ who have the cash?”

The illusion of lifestyle, consideration and values burst and the raw economy’s real and not particularly pleasing face appeared for a moment. Production happens neither to express values or fulfill needs. The only thing that counts is buying power needs, people with money to put it simply. And how they got the money is actually not very interesting for the one with something to sell.

Before the silence and the thoughts that grew in it became too pressing, Nisse (Bosse? Hasse?)  got to his senses, shook his head a bit and said:

“Well, we should at least have an alternative”, and returned to the script of today’s preaching.

In time Volvo’s city jeeps became quite popular in Russia. When I drive one of them out of the factory and park them on the Russia row I often wonder who it is which has ordered the car.

US Part III: Socialism With American Characteristics

April 8, 2011

The title of this post is a wordplay to compare with the “communism with chinese characteristics” or “capitalism with Asian values” that was pioneered in Singapore and taken to greater heights by the great reformator Deng Xiaopeng. What it really means, in practice, is authoritarian capitalism. Free from the shackles of labour laws, free spech etc., commanding respect with a strong state, China seems set on emerging as the new superpower (if they can fix the energy problem). American leaders must look on this country with envy, even though outwardly they show their disdain. Recall what George W. Bush said: “A dictatorship would be a heck of a lot easier, there’s no question about it.”

With this in mind, what are we to make of this?

The results mean that a number of the world’s major emerging economies have now matched or overtaken the USA in their enthusiasm for the free market. The Chinese and Brazilians, 67 per cent of whom regard the free market system as the best on offer, are now more positive about capitalism than Americans, while enthusiasm in India now equals that in the USA, with 59 per cent rating the free market as the best system for the future.

I think we should keep in mind what happened during the financial crisis. The response by Europe and America differed a bit. While Europe is like a good patient which takes its pills according to the doctor’s prescriptions morning, day and evening, America is like a junkie, constantly searching for the next thrill. The bailouts, contrary to popular belief, began during Bush’s presidency. The first proposed one unfortunately flopped because of a sort of rebellion within the Republican party, the results of which were to be expected. When Bush finally could vote through a bailout, the damage was already underway.

Misunderstand me correctly now. The bail-outs were a perverse reversal of the Robin Hood logic, taking from the poor and giving to the rich I fully agree with what Michael Moore when he said that the bail-outs were “the biggest robbery in the history of this country”. But, it would’ve been worse for all the workers if the banks had been allowed to fall. We can thus say that the bail-out was the right thing to do for the wrong reasons, while not bailing out the banks would’ve been the wrong thing to do for the right reasons.

We can use the popular mental mind-map Americans use: The contrast between Wall Street and Main Street. “Wall Street” here stands for financial capitalism while “Main Street” stands for the more “proper” market capitalism. As a communist, of course, I am equally critical of both. Anyway, in this mental mind map Wall Street is seen as a parasite on the fresh body of Main Street. What they don’t realize, however, is that while the interests of Wall Street and Main Street are not necessarily the same, if Wall Street turns ill Main Street will turn ill too.

The market fundamentalists/right-wing populists would’ve wanted the banks to flop – they think that it’s not that the free market has failed, it’s just that the market just wasn’t free enough, which is a perfect recipe to totalitarianism, and has nearly suicidal tendencies. These new critics of the free market, however, is what I’m most concerned about. The spirit is good, but the system critique is missing. They want to take money away from the “evil bankers” and give it to the poor. But, as I elaborated upon in the last paragraph, that isn’t possible in the current economic system, due to Main Street’s dependency on Wall Street. What one must question, of course, is what system makes such a dependency arise?

The reason I wanted to contrast socialism with American values with capitalism with Chinese values, is that the Chinese Communist party adopted capitalism to further stabilize their power. In the same way, I argue, American capital will have to adopt socialism, or at least socialist measures, in order to save its own ass. The most direct action is the bail-outs, but I would also argue that the new health care is an example of that. President Obama is the perfect man to do this, and I think he is better than McCain would be in keeping the Bush years’ legacy alive.

The modus operandi of socialism, one must realize, is to use the State in various ways to ensure the survival of capital – the socialists who claim otherwise do not comprehend the social character of it. This either comes in the form of the human face of capitalism characterized by social democratic regimes, or in the form of further State repression. There is a strange misconception that the State in laizzes faire capitalism would be “weak” – would they just let go of riots, demonstrations etc.? Capitalism does best when aided by strong autocratic State, no matter the illusions of neoliberal ideologists. China has understood that.

It thus appears as if America, and the rest of the world, stands at a cross road. Do they tread the path of upholding the status quo or picking up from where the civil rights movement left in the 60’s and 70’s? Do they tread the path of nationalism and exclusion or globalism and inclusion? A system where “freedom” actually means security, or a system interested with the equality and liberation of everyone? Socialism or communism? I know where my heart lies.

US Part II: Most Equal Society

April 5, 2011

Last time we took a small look at the influence, and dependence of oil in American society. We should now take a look at the social inequities haunting the US.

When Alexis de Toqueville penned his Democracy in America, the US was indeed the most equal society on Earth. That is, equal compared to the countries of Europe, entrenched in aristocracy as they were. While Toqueville saw down on some things, such as slavery (and correctly guessed that the slave question would tear the country apart down the road) he also saw favourably on other things, such as the subjugated role of women, which goes to show how values change. Perhaps now we can say that the Scandinavian countries are the most equal on Earth – compared to other countries.

Anyway, there seems to be a very strong trend in American society actually favouring inequality, arguing that some should be rich. The results of which we can read about in the wonderful book Spirit Level: Why Equal Societies Almost Always Do Better:

As we can see there is a very strong correlation between equality and living standards. A from the start staunchly individualistic (in the negative sense) country, there was, and still is, a sort conservative egalitarianism, the conception that success and failure was invariably up to the entrepreneurial life choices of the individual. It was thus a country which in conception wasn’t particularly interested in the common good of the country and its people, but which really took this “social contract” theory seriously. The result is that there is that the underclass is steadily growing. “Trickle down” my ass:

It’s no use pretending that what has obviously happened has not in fact happened. The upper 1 percent of Americans are now taking in nearly a quarter of the nation’s income every year. In terms of wealth rather than income, the top 1 percent control 40 percent. Their lot in life has improved considerably. Twenty-five years ago, the corresponding figures were 12 percent and 33 percent. One response might be to celebrate the ingenuity and drive that brought good fortune to these people, and to contend that a rising tide lifts all boats. That response would be misguided. While the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall. For men with only high-school degrees, the decline has been precipitous—12 percent in the last quarter-century alone. All the growth in recent decades—and more—has gone to those at the top. In terms of income equality, America lags behind any country in the old, ossified Europe that President George W. Bush used to deride. Among our closest counterparts are Russia with its oligarchs and Iran. While many of the old centers of inequality in Latin America, such as Brazil, have been striving in recent years, rather successfully, to improve the plight of the poor and reduce gaps in income, America has allowed inequality to grow.

A leading factor behind this is of course a very successful class struggle. On the part of the upper class. Taste that word, class struggle. It’s like there’s a complete lack of class consciousness. While the US used to have a few quite powerful unions, such as IWW and the Teamsters, and which had some influence, they were brutally beaten down by thugs hired by corporations and, a few times when the strikes were big enough, by the armies of the State. Few workers are now affiliated with unions. Another factor is the lack of parties working for socialism. While they do exist, the political system is set up so that only two parties had a say. The Democratic party thus absorbed all the progressive forces of the country, and the Democrats are quite right-wing by European standards. Say what you want about social democratic parties, but they did a whole lot of good here.

What does all this mean? Keep in mind that rights are given neither by nature nor god; they’re something one must fight for. Remember that during the 20’s and 30’s, it was only the American Communist party which was in favour of racial equality, but the civil rights movement of the post-war period would go a whole lot of way towards that. There has been very few struggles inside the US, though. While the demonstrants in Wisconsin (almost completely ignored by the media) is impressive, it is impressive because it is actually happening in the US. Demonstrations larger than that size have been going on and are ongoing in Europe. The American populace has taken a lot of beating by the rich, and have done much to fight back, and so they’ve ended up in this situation.

I’ll end this blog post with a video about Martin Luther King, showing that he wasn’t as soft as some would believe (how strange that MLK day was introduced by Ronald Reagan):

US Part I: Sick Man in America

April 4, 2011

Picture from 1974 – first oil crisis

I will attempt to write about the difficulties which currently faces, and which will face the US in the future, and why it is probably a good idea to move to Europe rather than stay.

One thing that struck me is that even though Sweden has one of the highest prices of oil in the world. Yet it is the people of the US who fall down on their knees with prices that are actually cheaper than those here. Some have gone out of business because they can’t afford to upkeep their car. What am I, from my more European perspective, to make of this absurdity?

One obvious thing, as I described in a previous blog post is of course the heavy reliance on cars. America is a car culture. Though most of the Western world, and some areas outside the West has started to adopt this car culture, no country has modelled their society as much in the shape of this machine than has the US. This has led to the dismantling of commuting, and what was once the most formidable railroad system in the world. Instead of efficient cities, the trend has been towards urban sprawl, and an extensive construction of the most hopelessly inefficient type of residential areas of the world, namely suburbia. And heck, even the road system has been falling apart since the 80’s due to underfinancing. Oil prices before the economic crisis, and now afterwards are rising much faster in the US than in Europe, and showing how inaquedately prepared the US is for Peak Oil.

Why did the US decide to tread this path, though? One obvious factor is the amount of oil historically produced in the US. In fact, ~60% of all oil in the world was produced by the US in 1942. High on the agenda by both businessmen and politicians after the war was how to make the American populace consume more, and thus keep the economical machine spinning. There was incredible business gains to be made through having people wanting to have, and later actually requiring a car, and the political establishment were happy to build the infrastructure (ie motorways). Oil and the car industry helped fuel, metaphorically and literally, an American economical boom lasting for nearly three decades.

Good things didn’t last forever, though. Around the early 70’s American oil production peaked. Despite being the most technologically advanced nation in the world, the US couldn’t find new sources of oil, and oil production has been inexorably declining ever since. The US might’ve still enjoyed good economical times, but it untimely coincided with the 1973 oil crisis, leading to hard economical times. Around this time the US also moved towards a more liquid money supply, and consumption increasingly driven by credit cards. The effects we see today, with the financial crisis fresh in mind.

What effects does it have on a nation which has a transport system and infrastructure based around oil, a commodity whose price might reach 200 dollars a barrel in a very near future? One thing is that it won’t be very easy for the US to simply build itself out of that, with better means of transportation, energy and so on. Infrastructure is something that can take many years to build, and the investments needed to finance this cannot be attained within the US’ current political and economical system, due to the mastodontical debt of the country. It can thus be inferred that if the oil price rises as high as 200$ a barrel, the US is on very thin ice. Perhaps one can make a parallel to the decision of the Chinese in the 15th century to burn all their ocean-going ships. They were the foremost naval power of the world, but due to an idiosyncratic decision that made sense at the time, they lost that lead. Badly.

Perhaps one, then, can say that the US is like a rotten wooden house. There has been attempts to make this house look prettier and more attractive, but it is fairly rotten nevertheless. A very literal example of this would be Greener Grass Company, making the houses of bankrupted owners more valuable and “makes the neighbourhood look decent again”. Perhaps a few kicks at this rotten foundation would make it collapse, triggering a civil war or similar. Or maybe this facade would actually work, with government and/or corporations taking a greater control of the country? In either case, it doesn’t look too attractive for the people living there. In short, I think Americans better leave this perverse country.