A new sandpit for long side discussions, idees fixes and so on. Unless directly responding to the OP, all discussions of nuclear power, MMT and conspiracy theories should be directed to sandpits (or, if none is open, message boards).

47 thoughts on “Sandpit

  1. Any theories about oil prices anyone? The Economist wrote on Dec 8th 2014 that;

    “THE oil price has fallen by more than 40% since June, when it was $115 a barrel. It is now below $70. This comes after nearly five years of stability.”

    The oil price today seems to be $48.69 although I don’t if I am quoting the same market. I don’t know if I am quoting Brent or West Texas or some other index in each price above.

    I have read numerous theories on the price drop;

    (1) The world economy has slowed (not inconsistent with other points by the way).
    (2) The Saudis engineered the price drop by over-producing.
    (3) The US engineered the price drop.
    (4) The US and the Saudis engineered the price drop.
    (5) European majors engineered the Brent Index to engineer the drop (I think).
    (6) Traders engineered the drop by (or in conjunction with) shorting oil.

    There are probably a few other theories I missed.

    The amount of change in price baffles me. Rightly or wrongly, I seem to believe in a “fundamental” price that would be more stable than this. Rightly or wrongly, I find myself believing that markets are heavily manipulated and that markets do not reflect “fundamental” or “natural” proces and that say a 5% oversupply compared to the market clearing price before that oversupply should not more than halve a price.

    So, whilst I do not know which market manipulations story or stories to believe, I find myself believing key prices for the world economy are manipulated. A number have been recently proven or are still under investigation;

    (a) LIBOR
    (b) Gold (Barclays Plc (NYSE ADR: BCS) was fined $43.8 million today (Friday) by a U.K. regulatory agency as part of a gold price fix episode back in 2012 – a rare moment of public exposure for the bigger issue of gold price manipulation.)
    (c) Banks under investigation accused of colluding to set benchmark WM/Reuters foreign exchange rates, known as “the fix.” The head of the Bank of England said in March that the currency scandal was “as serious as Libor, if not more so.”

    It’s worth reading:

    But back to my question. Any theories about oil prices? Is the market real in any genuine free market sense or is it rigged?

  2. There is no particular mystery about oil prices, Ikonoclast. In the past OPEC acted as a cartel and kept prices higher than they otherwise would be, but at the moment oil looks like a competitive market and the market price at the moment is under $50 a barrel. Why the sudden fall? Because worl production increased slightly, it is now a few percent higher than it was in 2004, and world consumption apparently also decreased slightly, for example Australia is using less oil now that coal production is down due to a lack of Chinese demand, China’s oil use is apparently down and their oil storage facilities topped off, Finland is replacing its internal combustion engine cars with electric vehicles, and so on. So, with more oil available and less being used, the price falls which encourages people to use more and so production and consumption come back into balance. And that is simply what appears to have happened.

    Why such a large swing from such a small change in the amount of oil supplied and consumed? Well, people don’t use that much more oil when the price comes down just a little bit. For example, are you driving that much more now than when you were a few months ago? Probably not. In fact, a lot of the effect of low oil prices is on producers. Some of them will say, “Stuff it, keep the oil in the ground and we’ll see if prices are better later.” Of course, a lot of producers don’t do that. One common reason is that they need money now and another is that doing so is good news for one’s competitors. And another problem is that oil may not be that expensive in the future. That whole Norway changing over to electric cars thing, that could catch on. If Japan did the same, and it is in a great position to do so, (all it has to do is switch on its non-spewing radioactive waste everywhere nukes) it would have a really significant effect on oil consumption.

  3. Michael, future markets can only even out prices if the future can be accurately predicted, and accurate prediction of the future is tricky. Hence China topping up it’s oil storage facilities just before the big price drop. Whoops.

  4. The price crash seemed very conveniently timed to add to the sanction punishments of Russia. Call me suspicious but I think it had something to do with that.

  5. And don’t forget that the Canadian tar-sands and the US “Saudi America” fracking “boom” is about Wall Street speculation and market manipulation, not about oil production.

    That ship has sailed – and possibly taken your super with it.

  6. Ikonoclast, it can take years for a new oil project to come online and in politics a week is a long time, so I don’t think a desire to influence other nations was involved in the production side of things. As for the supply side of things, factors involved there are also not the sort of things one could turn on and off to apply political pressure.

    So all that’s really left is to look at what didn’t happen, which was Saudi Arabia could have restricted their production but didn’t. But here we have the perfectly reasonable explanation that Saudi Arabia didn’t cut production because if they did it would benefit their competitors in the United States and other countries, but mainly the United States on account of how they can only afford to bring new oil production online if oil prices stay very high.

  7. St Louis Fed “decomposed” $oil to find

    ..the evidence does not support the claim that a sudden explosion in commodity trading tectonically shifted historical precedent: Global demand remained the primary driver of oil prices from 2000 to 2009. That said, one cannot completely dismiss a role for speculation in the oil bubble of the past decade. Speculative demand can and did exacerbate the boom-bust cycle in commodity prices. Ultimately, however, fundamentals continue to account for the long-run trend in oil prices.

  8. @rog

    An opportunity for what? For him to write paywalled articles and make money? Sorry, I won’t be reading it.

  9. @rog
    Lets hope he is right. It seems like Sachs has a pretty good grasp on what motivates the climate reality denialists.

    I wonder if the investment into new sources of oil in Western countries has been driven partly by politics and not economics. It’s difficult to separate oil from politics after all and issues of independence have been getting a lot of airing. Maybe people are starting to see a future beyond oil.

  10. The drop in oil price fortuitously, or by design, achieves a number of goals for the USA and Western capitalism. It damages Russia and Venezuela, two of the USA’s ideological and geostrategic enemies. It undercuts renewable energy with cheap oil. It undercuts the development of electric cars. It even undercuts efforts to reduce fossil fuel use in the short to mid-term as oil consumption will likely rise again under a low price regime.

    To sum up, the drop in the oil price comes at or about the time of the struggle to control Ukraine, to sanction Russia and to globally renew efforts to address CO2 emissions. All this represents a few coincidences.

    There is plenty of evidence that key commodities and key indices are manipulated by the biggest banks.

    Maggie McGrath – 19/11/2014 – Forbes

    “A two-year investigation conducted by the Senate Permanent Subcommittee on Investigations has accused Goldman Sachs, Morgan Stanley MS +0.9% and JP Morgan of manipulating commodity prices. In a nearly-400 page report released Wednesday evening, the subcommittee says that these banks have become “heavily involved with” the commodities markets and increasing risks to financial stability, industry and consumers.”

    Then there is the matter of US state and corporate collusion. Are the lack of prosecutions and fines of corporates and the “thrashings with a feather” that pass for fines all part of this picture?

    Saudi Arabia buys a huge proportion of US arms exports. Weapons export sales by the United States tripled in 2011 to a record high of $66.3 billion, pumped up by $33.4 billion in sales to Saudi Arabia…” and the US “in 2011 accounted for nearly 78 percent of all global arms sales…”

    Saudi Arabia and the US have to play ball with each other to keep the oil flowing one way and the arms flowing the other way. At the same time the US is vastly more powerful than Saudi Arabia possessing many more economic chips and many more military chips. The US controls the game. The Saudis will move prices (in my view) at the request of the USA using approval of arms exports (among other things) as a bargaining chip.

    The US is vitally interested in damaging and diminishing Russia. That is its main geostrategic goal at the moment. Middle East destabilisation is aimed squarely at Russian allies (Syria and Iran) and then up into the underbelly of border states south of Russia both west and east of the Caspian Sea while also pressing on the Ukrainian front. Clearly, the closer they get to Russian borders the more proxy forces have to be used to minimise the chances of total (nuclear) war. It’s a long battle of economic attrition and strategic creep up to Russia’s borders (not to be confused with strategy creep which roughly equals mission creep). This mission is not creeping in tha latter sense. It was always intended since the Cold War. It is the continution of the Cold War perhaps as the “Colder War”, but that’s another post.

    In summary, global markets ain’t markets. They are fronts for geostrategic maneuvering and conflicts. At least that’s my take on it.

  11. @Ikonoclast
    It’s not paywalled – you can register for free, but the gist of it is

    Sachs points out libertarian ideology…

    …opposes government more than climate change. Climate change requires public policy, and for libertarians, that’s enough to declare it false.

    He points out the obvious source of finance for climate denial

    The real climate fight is between oil giants … and the general public. The oil companies will suffer massive capital losses when climate controls are finally instituted.

    And then concludes with what should be equally obvious to anyone with a brain

    roughly one-third of the world’s oil, one half of the world’s natural gas, and 80 percent of the world’s coal reserves are unburnable by 2050…
    And yet the business of the oil companies in recent years has been to spend hundreds of billions of dollars to add new, high-cost, unconventional hydrocarbon reserves on top of the heap of already unusable currently proved reserves.

  12. More Jeffrey Sachs

    Many investments in new fossil-fuel reserves will lose money ? lots of it ? owing to the recent fall in world oil prices. And many of the fossil-fuel reserves that companies are currently developing will eventually be “stranded” (left in the ground) as part of new global climate policies. The simple fact is that the world has far more fossil-fuel resources than can be safely burned, given the realities of human-induced climate change.

    Though market signals are not yet very clear, 2014’s more successful investors were those who sold their fossil-fuel holdings, thereby avoiding the oil-price crash. Perhaps they were just lucky in 2014, but their divestment decision makes long-term sense, because it correctly anticipates the future policy shift away from fossil fuels and toward low-carbon energy.

    Several major pension funds and foundations in the United States and Europe have recently made the move. They have wisely heeded the words of the former CEO of oil giant BP, Lord Browne, who recently noted that climate change poses an “existential threat” to the oil industry.

  13. In general, stable prices are consistent both with the hypothesis of market-rigging and with the hypothesis of markets that are not rigged, while fluctuating prices are consistent both with the hypothesis of market-rigging and with the hypothesis of markets that are not rigged.

    The one sure conclusion is that if markets are not doing what you expect them to do, there is some factor at work that you are not taking into account.

  14. @J-D

    Certainly, so one thing to do is look at the other factors preceding and attending market moves as per my post #15.

  15. @Ikonoclast

    For any given move in prices, the list of events occuring shortly before that move would be indefinitely large. A more selective basis for analysis is required.

  16. Lets assume we have had another bubble with oil. It is collapsing, I don’t know why. Is it a different, more innoculous bubble collapse than the US housing bubble collapse?

  17. I think the critical variable is barrels per day of high quality fuel, whether the price is high, low or moderate. Beyond some point a reduced number of barrels must affect economic output. That physical change could be a result of depletion, price collapse or war. Maybe we can cope with a 10% fuel volume reduction but not 50%. We don’t yet have electric passenger aircraft, long haul trucks or farm tractors that can tow heavy implements.

  18. I think I can take it from the tenor of comments above that most people are little concerned about corporate and oligarchic market manipulation. This is leaving aside the question that, if truly free markets ever existed (they haven’t, don’t and can’t in the real world), whether they would now actually deliver any good results from an equitable and survival point of view.

    All really existing markets have arbitrarily set characteristics, rigged characteristics and any “freedom” (so-called) is limited freedom or “freedom within bounds”. The bounds are arbitrarily set (i.e. politically and legally set) and naturally set (by what is possible in the natural world).

    In the modern political economy of RECD, or Really Existing Capitalism & Democracy, as opposed to some idealisation of the free market which does not and cannot ever exist in reality, the choice is not whether to have a rigged market or not. The choice is which kind of rigging to put in place and who you will allow to do that rigging. The choices in our system of RECD are very clear but the propagandised population can’t see them. Either you let corporations and oligarchs (capitalism) rig the market or you let the people (democracy) rig the market. Here “rigging” means control. Divested of its moral assumptions (which lead to markets being called “rigged” or “free” depending on your point of view) rigging is really about control.

    Those who don’t see this or don’t care (yet) have not completed their political economy education which has both theory and “prac.” (practice or praxis). Some key prac. lessons will be learned in the next 20 years. After this period, I suspect those remaining and who have any remaining leisure for intellectual enquiry, as opposed to living hand to mouth, will be rather more concerned about who rigs (i.e. controls) our political economy. Cavalier attitudes to this question will largely disappear.

    The question of “fundamental value” seems to me to arise in connection to markets however they are rigged (controlled). Markets appear to be poorly adapted to appraise fundamental value. This is a difficult question to deal with because of the difficulty in (i) defining fundamental value at all and (ii) in quantifying fundamental value in a money system. The money system seems to exist to allow equations of unlike products as in 1 type y car = x metric tons of type z bananas (depending on point in time and place prices).

    What is the fundamental value of oil? Given our current economy, the fundamental value of oil is illustrated by the fact that our economy would totally collapse without it. (This is assuming we have not yet made enough transition to other energy sources and industrial feedstock sources which assumption is currently valid.) In this sense the value of oil is infinite. An example with a person and food will help. What is the fundamental value of food to a person? Without food the person will die. Therefore if the person was starving, possessed infinite money and was offered food only at an infinite price, that person would pay, if it were possible, an infinite amount. The fundamental value of food in this sense if infinite.

    At the same time oil and other fossil fuels demonstrate another characteristic. If we keep on with business as usual and burn them all we will seriously damage our climate and our economy to the point that civilization and even our species existence will likely collapse. In this sense, oil has another infinite value but it is actually a value of negative infinity. Oil (plus other fossil fuels) is so dangerous that using it all will destroy civilization and all human life. What value do we put on that? Theoretically we would pay any money price to avoid that so the fundamental value of oil in this sense is negative infinity.

    How can a market system value-appraise a product which shows the short to mid-term characteristic of being theoretically infinitely valueable and the long term close to certain prospect (well above 90%) of being theoretically of infinite negative value? Well, I don’t know the equations but I suspect there probably is a way of mathematically solving this by using equations, the graphed results of which approach the negative and positive infinite limits. By feeding in probabilitie, paramaters and limits, the pricing profile which allowed use of fossil fuels now, transition rates to renewables at about the technical-scalability limits of transition, and avoided dangerous global warming (probably more than abot 1.5 C) could be calculated. This would be the best estimate possible of the fundamental value of oil to us as a global civilization. This illustrates that the value of oil should now be totally controlled, set and progressively raised by pure scientific-mathematic methods. That is, we should now totally rig the oil market in this manner. It would be the logical, scientific, moral and existentially survivable thing to do.

  19. @Ikonoclast

    I take a different view.

    Markets appear to be poorly adapted to appraise fundamental value.

    Without capitalism, with free information and free entry, and where there are suitable substitutes, in the long run, market prices = fundamental value.

    This only occurs under market socialism.

  20. @Ivor

    Ah yes, the issue of market socialism which issue I have only recently begun to think about. Even among Marxists, as I am sure you will know, there are widely diverging opinions on market socialism.

    Market socialism appears as a possible waypoint or a possible final point on the journey to “true socialism” (whatever that is and whether it is possible) depending on how one views matters. I have written before on how I find nationalisation of natural monopolies and worker “co-operativeisation” of all non-state enterprises as both theoretically and very probably practically feasible and even desirable. However, reflection suggested to me that certain problems still would not be solved.

    Full co-operatives would still remain in essentially capitalist competition with each other. Large co-operative corporations for example could and would replace large oligarchic corporations. Whilst “socialist” internally, the large “perfect” co-operative would still function like a capitalist firm in competition with other co-operatives (firms) in the market place. Essentially, just the stockholders have changed. The workers are now workers, stockholders and managers in a large worker co-operative. The impetus or pressure for capital accumulation remains, if not the same, still very significant. Co-operatives which showed self-imposed wage restraint could underproce and/or make larger capital investments and out-compete those co-ops which more socialistically distributed more of the profits as wages.

    Under market socialism, I cannot see how the dynamic of capital accumulation, competition and tendency to monopoly is done away with. It might be ameliorated and it might be more controlled by more state intervention but it is not done away with. I think ultimately the intrinsic problems of capitalism (along with its intrinsic strengths) are related not just to ownership of the means of production but to the issue of the market itself and how markets facilitate and even mandate certain systemic behaviours. Could markets be done away with entirely? Would it be helpful or damaging to do away with markets entirely? These are big questions I don’t feel I can answer properly yet.

    This is a very good article and raises many of the problems I began to discover for myself simply by following through market socialism as a thought experiment. I have not posted it as an actual link due to the moderation hurdle.

    I would say my final feeling at this point is that market socialism is not and cannot be true socialism or true communism. At the same time, I do not know if true socialism or true communism could ever exist for a large, complex modern society nor if they could exist whether they would be desirable and better alternatives say to a 1960s style mixed economy or to a market socialist economy.

  21. I’ve just watched the most disturbing and disgusting video of the injuries of bashed refugees in Lorengau prison (where they were taken as punishment for defying the fascist dictates of the corporations running Australia’s Manus Island concentration camp).

    The ALP created this concentration camp and put these people there.

    I defy any of you ALP luvvies here to defend what we are doing to these people, thanks to your party’s policies.

    And don’t you dare blame the Murdoch media, the LNP or “rednecks” for making you become such heartless fascists.

    I hope Howard, Gillard, Rudd, Abbott, Morrison and Dutton all end up on trial at the Hague.

  22. Sadly, the Greens have decided to become a junior coalition partner to the terminally corrupt and fascist ALP.

    They presumably believe they can get away with that and still retain their core voters. Maybe they should have a look at the arc of electoral “success” of the Democrats. It grew in line with its perceived integrity and plummeted in line with its abandonment of its “principles” (i.e. it stopped keeping them honest and decided to join them at the trough).

    I personally experienced this at the 2012 Qld elections. The Greens candidate was on very cosy and collusive terms with the ALP candidate.

    Today an ALP candidate was filmed handing out “how to votes” for the ALP and Greens – very apt, since they are just ALP stooges now.

  23. @Megan

    “the Greens have decided to become a junior coalition partner to the terminally corrupt and fascist ALP.”

    I can’t find any news story which says this. What are your sources? Now I admit the fact that I can’t find any stories is not a refutation. The last news I heard on anything approaching this topic was Anna Palaszczuk claiming Labor would never enter a coalition or do a deal with anyone else to govern (or words to that effect). Of course, I don’t believe anything a politician says so I place no credence in that statement. However, I still lack firm evidence that Labor and/or Greens have officially agreed to a coalition or are unofficially operating to form a coalition. All firm evidence one way or the other will be appreciated.

    More generally, the Labor Party are terminally morally corrupt. I agree with that. Are they fascist yet? Not strictly speaking or not completely, but they are certainly dishonest, anti-democratic, selling or willing to sell influence as access to possible ministers and part of a machine which treats refugees in an inhumane and yes a fascist manner.

    The decline of our politics into corruption and inhumanity has much to do with the corrupting influences of late stage capitalism. Until we radically reform capitalism and the inequality it produces nothing will change. Indeed, matters will only get worse.

  24. The “Rally against Newman” is being held 10am this Saturday, 24 January, at Queens Park.

    The Cloudland Collective needs help handing out 2 leaflets.

    One leaflet advertises a meeting featuring Quentin Dempster as the main speaker. A draft of the leaflet is attached.

    The second leaflet is called “Declaration for a Just Society”. The text of the leaflet is below.

    All help would be appreciated. Just turn up on the day or phone

    Greg on 0409 877 528 or email

    for more details.


    Declaration for a Just Society

    Why a declaration?

    Many believe that this election now gives us the opportunity to have our say about the Newman government. However, the truth is that ever since the Newman government launched its assault on the public sector, we have always had the opportunity influence politics in Queensland.

    It is time to move well beyond an understanding of politics that only consists of a three year electoral cycle. This election matters enormously but we need more profound social change than is possible through parliament.

    Parliamentary democracy in Queensland is fatally damaged by mining companies and business interests that routinely exercise a corrupting influence on government processes. It is possible in Queensland for the corporate elite to purchase policy outcomes. As mere voters we cannot effectively oppose corporate power. Collectively however, on the streets, in workplaces, in communities we have considerable power to shape political and economic decision making. This declaration has been written to help rebuild mass democratic politics in Queensland.

    Land rights.

    The creation of the modern world economy, a system that has generated poverty and grotesque inequality, required the dispossession of indigenous land. This has especially been the case in Queensland. Dispossession was and remains an act of deception and violence. Before the arrival of fences, mines and grazing animals, the land was at the heart of successful Indigenous communities. Indigenous people should remain custodians of their land.

    Freedom of speech and the right to assemble.

    Residents of the city have had to fight for space to assemble and debate important issues. It often seems like every square inch of the city belongs to a corporation or a government body committed to protecting corporate interests. Year by year civil rights are eroded as more glittering malls are built. The battle for free speech and the right to demonstrate must be won.

    The public sector and neo-liberalism.

    The rise of neo-liberal economic and social policies seriously threatens the public sector. Politicians such as Thatcher, Reagan, Blair, Keating and Howard have argued that the market is the best vehicle for allocating resources and instilling each citizen with sense of responsibility. Poverty is depicted as something that people bring upon themselves by making the “wrong choices” rather than being the result of deep seated economic problems. This rhetoric has been accompanied by the transfer of resources from social services to projects that exclusively benefit the corporate sector. The transfer has been achieved through outsourcing, competition and corporatisation.

    a) We will not allow the public health and education to become thoroughly marginal, cash starved relics only for the truly poor. Public hospitals and schools are far better at educating citizens and keeping them healthy than the private alternatives.

    b) Scientific research is best conducted by the public sector. Organisations such as CSIRO are well placed to concentrate the best scientific minds on a project and curb the impact of corporate interests on the direction and perceived value of the research. Funding to CSIRO should be immediately restored.

    c) The public service should be strengthened so that it can effectively deliver social infrastructure programs. Public servants should be respected by government and “frank and fearless” advice should be highly valued.

    d) Corporate taxes should be massively increased in order to fund public services.

    Workers’ rights.

    The riches we see in the world today have been created by working people. Even though we work incredibly hard and possess a deep understanding of how to do things better we are paid only a fraction of what we are worth and our creative input is not valued.

    a) We demand that the minimum wage be significantly increased so that all workers experience a standard of living well above the poverty line.

    b) Every worker should have right to join a union and take strike action to improve their wages and conditions.

    c) Every worker should have the ability to engage in solidarity action to support other workers without fear of prosecution. Employers have at their disposal the immense powers of the police and the courts to help them protect their interests. We have solidarity to defend ours.


    There is still a long way to go to achieve women’s liberation. Every victory has been hard fought for and these gains need to be defended each day. The neo liberal assault on employment and services disproportionately affects women. Accompanying women’s precarious position in the economy are the deeply shocking levels of domestic violence experienced by women.

    a) Access to legal and free abortion on demand.

    b) Women must receive shelter and support when they leave a violent and abusive partner and not face homelessness.

    c) Women should receive equal pay.

    d) Women must be supported to participate and play leading roles in civil society. Men will do the ironing.


    The true measure of a compassionate society is the quality of support it offers those citizens who struggle to obtain a decent standard of living.

    a) People with disabilities should be generously supported by the government and presented with opportunities to engage in meaningful work for which they would receive a just wage. They should not be subjected to humiliating “reviews” of their disability.

    b) Economic turmoil frequently locks millions out of work. When people experience unemployment they should be adequately supported by the government.

    Climate justice.

    We are rapidly approaching dangerous tipping points which may very well result in the release of vast quantities of devastating emissions from the arctic tundra and the ocean floor. To prevent global catastrophe a number of measures need to be implemented.

    a) Governments should back and invest in renewable energy. This would create millions of green jobs.

    b) Public transport systems should be extended and made free to encourage commuters to leave their cars at home.

    c) Government should stop subsidizing carbon polluters. Big polluters and carbon extractors should be made responsible for all damage, waste, and other harmful effects of their extraction, consumption and production.

    No borders.

    One of the truly remarkable things about a globalised world is the existence of culturally diverse communities. People flee economic turmoil and war to start a new life in vibrant multi-ethnic communities. Political leaders divert attention away from the hardship many experience and the profound challenges facing our planet by directing anger towards refugees and migrants.

    a) We defend the right of people across the world to cross borders to seek a better life.

    b) We demand that all people being held in detention, both on the Australian mainland and in the Pacific, be immediately released into communities here.

    c) We condemn those politicians and media outlets who demonise some of the most desperate and vulnerable people in the world.


    Every citizen should have affordable housing. Government policy encourages speculation in property inflating property values and driving up rent. This has created a housing crisis. In 1985 a home cost 3.2 times the average income whereas today it costs 6.5 times. Workers are nearing retirement still owing money on a mortgage.

    a) The government must significantly boost spending on social housing. Rent should not exceed 10% of a tenant’s income.

    b) Quality emergency housing needs to be instantly available.


    Parliamentary democracy and the vote are the result of a significant historic compromise. Around the world citizens have fought for genuine participation in politics, at times forcing limited concessions from their rulers. The result of this contest has often been parliamentary democracy.

    a) For the majority of people parliament is the most important site of politics. Candidates who campaign around human rights and strong redistributive measures should be supported. If such candidates can be elected they can help use their position to help legitimatise democratic demands.

    b) Genuine democracy goes beyond the parliamentary democracy framework. Genuine democracy involves citizens participating in democratic decision making. Broad mass meetings can be convened to resolve political and economic issues. Delegates can be elected to represent that meeting at central meetings. Crucially local forums have the capacity to recall their delegates at any time.

    c) Democracy is not real if economic matters are not subject to democratic processes. Decisions about how resources are allocated and what services and goods should be produced should be made by the workers involved in their production with the citizens who the products affect.

  25. @Ikonoclast

    Under market socialism, I cannot see how the dynamic of capital accumulation, competition and tendency to monopoly is done away with.

    There will be no Capital so no Capital accumulation. However investment can still occur through saved wages (not capital) and credit that is not based on (and does not create) a capital social relationship.

    Monopolies would probably still exist. This will enable some workers to get higher incomes than other workers in the same occupation. However this will not lead to a structural crisis, will be transparent, and may be more efficient.

    Competition will still exist and cooperatives can still become bankrupt.

    Admittedly – more work needs to be done on cooperatives and market socialism.

  26. @Ivor

    I wouldn’t want to exaggerate our practical differences. I would certainly support a transition back to more state enterprises (re-nationalisation of all enterprises that were traditionally so in Australia). I would also support step by step transitioning to market s*o*c*i*a*l*i*s*m.

    However, on a global scale such steps probably cannot happen while the US is an extreme capitalist oligarchy. They will likely use force on any country (outside of Russia and China and their spheres of influence) to prevent real democracy or real s*o*c*i*a*l*i*s*m. This indicates to me that revolutionary changes have to occur in the US before such changes have a chance elsewhere. Then again, I could be wrong. It depends on how much hegemony the US can maintain outside of the Russia-China orbit.

    Greece might be a litmus test. If Syriza wins the election we must see if they have the vision and courage to;

    (1) Take Greece out of the Euro;
    (2) Refloat their own currency;
    (3) Repudiate all debt they owe; and
    (4) Implement democratic s*o*c*i*a*l*i*s*t policies in Greece.

    If they do not do ALL these things then their courage has failed and Greece will continue failing too.

  27. @Ikonoclast

    …I still lack firm evidence that Labor and/or Greens have officially agreed to a coalition or are unofficially operating to form a coalition.

    Neither do I.

    There certainly is no “official” agreement, and I have no “firm evidence” of any “unofficial” agreement.

    I do have my observations of the interactions between Greens and ALPs at the Queensland level which leads me to the view expressed. Even though I support Green in the federal senate, at the state level everything I’ve directly experienced of them (including handing out ‘how to votes’) supports my conclusion.

  28. @Ikonoclast

    Rather than “neither” I should have said “so” in my reply above.

    On Greece, I think it’s important to remember that when we had Whitlam the Greeks had a US backed fascist dictatorship. It wasn’t that long ago and the Greek people have suffered enormously from the latest form of US imposed fascism (neo-liberalism).

    From the Wikipedia entry “Greek military junta 1967-74”:

    In 1947, the United States formulated the Truman Doctrine, and began to actively support a series of authoritarian governments in Greece, Turkey, and Iran in order to ensure that these states did not fall under Soviet influence.[1] With American and British aid, the civil war ended with the military defeat of the communists in 1949. The Communist Party of Greece (KKE) was outlawed, and many Communists either fled the country or faced persecution.[citation needed] The Central Intelligence Agency (CIA) and the Greek military began to work closely, especially after Greece joined the North Atlantic Treaty Organization (NATO) in 1952. This included notable CIA officers Gust Avrakotos and Clair George. Avrakotos maintained a close relationship with the colonels who would figure in the later coup.[2]

    Greece was a vital link in the NATO defense arc which extended from the eastern border of Iran to the northernmost point in Norway. Greece in particular was seen as being at risk, having experienced a communist insurgency. In particular, the newly founded Hellenic National Intelligence Service (EYP) and the Mountain Raiding Companies (LOK) maintained a very close liaison with their American counterparts. In addition to preparing for a Soviet invasion, they agreed to guard against a left-wing coup. The LOK in particular were integrated into the Gladio European stay-behind network.[3] Although there have been persistent rumors about an active support of the coup by the U.S. government, there is no evidence to support such claims.[4][5] The timing of the coup apparently caught the CIA by surprise.[6]

    Comes with the usual “Wiki-Caveat”, but that’s a pretty good background.

    I’d put my money on the “leftists” winning on Sunday AND carrying out their plans, (I think they’re only proposing a 50% ‘haircut’ for creditors rather than a full default).

  29. @Megan

    I suspect that the Chinese (and belatedly the Russians) have realised that the way to defeat the capitalist US is to become “more capitalist than the capitalists” at least for a time.* Whereas the Americans believe that capitalism is the end point of history, the more pragmatic Chinese take the view (IMO) that “it might be but it might not be”. China has deeper levels of philosophical scholarship and tradition than the USA. Confucian and Marxist thinking influence Chinese conceptions of the “state” and of a “civilization culture” in ways which leave US thinking bereft by comparison.

    The US elite now see the purpose of the state as being solely to serve the oligarchic class. Under this view, the rest of their national fabric is being left to crumble away. Essentially, they think an elite superstructure can thrive on a starving, crumbling base. I can’t see the Chinese making this basic and simple error: one based on rampant greed, arrogance and blindness. Chinese civilisational experience is much greater. They have far more accumulated wisdom than the Americans.

    * Note: The Chinese (and Russian) adoption of capitalism is essentially an opting for symmetric geostrategic economic war. I think the Russians stumbled into this stance but the Chinese knew exactly what they were doing. Remember that asymmetry is a strategy of the weak against the strong. Thus a choice for symmetric economic war (capitalism vs. capitalism) indicates a self-assessment of Chinese strength and the conviction that the US can ultimately be defeated in this manner. Asymmetric war can defeat expeditionary force (witness all the US defeats abroad since and including Vietnam. However, to defeat a powerful enemy’s nation-base, symmetric war must eventually be embraced. I mean economic war in this case.

    The USA’s nation-base (and imperialist empire) are quintessentially underpinned by capitalism. To defeat it during late stage capitalism requires symmetrical economic war. China (and the Shanghai Cooperation Organisation) will wage this symmetric economic war by setting up parallel economic, financial and imperial structures which will go toe to toe with the American imperial structures. Thus parallel structures to the IMF, SWIFT and so on are in the process of being set up by the SCO and will be applied to and through SCO and BRIC capitalism. The US dollar will also be replaced by a new reserve currency. There is plenty of evidence that China is winning the cyber war and can employ this advantage for economic war as well as conventional war.

    None of this is to deny that the USA is still the most powerful nation now and by quite a long way. However, time is on the side of China, Russia and the SCO. The longer current processes continue, the more the SCO narrows the gap. The longer the USA attempts to maintain an unrealistic and definitionally impossible global hegemonic stance the more rapidly it exhausts itself. The longer that manufacture and assembly continue to relocate to Asia and China, the more the USA and the EU are hollowed out. The more that resources run out and people are reduced back to impoverished status, the more that the partially “peasant powers” get to keep a relatively sustainable though poor base (the peasantry), whilst advanced nations just crumble back to masses of urban poor with no idea how to maintain themselves.

    I think the West will lose eventually and all the peoples we oppressed for hundreds of years will not be feeling very merciful.

  30. While I agree with you about the CCP’s capacity for long term thinking and philosophically considered geopolitical positioning they have achieved their transition to industrialisation at immense and probably irrecoverable cost to the local environment. It is not merely air pollution but surface water pollution and ground water pollution so toxic that they are beyond treatment, massive long term deforestation and loss of arable land through pollution and desertification. This Pyrrhic victory over nature was inspired by the unholy combination of Confucianism’s hubris and Marxian Promethean-ism. It is becoming cleaer and clearer

  31. While I agree with you about the CCP’s capacity for long term thinking and philosophically considered geopolitical positioning they have achieved their transition to industrialisation at immense and probably irrecoverable cost to the local environment. It is not merely air pollution but surface water pollution and ground water pollution so toxic that they are beyond treatment, massive long term deforestation and loss of arable land through pollution and desertification. This Pyrrhic victory over nature was inspired by the unholy combination of Confucianism’s hubris and Marxian Promethean-ism. It is becoming clearer and clearer that there will be no winners in the current crisis.

  32. @jungney

    There may well be much in what you say. China is paying a high environmental cost. Then again, the US (and Canada) are also paying high environmental costs with fracking, shale oil and gas, tar sands etc.

    Backtracking for a moment, I don’t think it’s a big step to suggest that pragmatic Confucian-Marxists would theorise that;

    (1) late stage capitalism must spread to all corners of the globe before socialism can arise; and

    (2) capitalism’s search for low wage production is the very tendency which could be harnessed to transfer the world’s manufacturing base to China.

    The latter would be so if capitalism was deliberately chosen as a transition stage. Thus, adopt capitalism, allow capitalism’s natural tendencies to move the world’s manufacturing base to China and have this process substantially progressed, if not completed, when certain regional limits to growth are reached. Russia will be the resource hinterland China looks to when much of the rest of the world (the Americas excluded) is resource depleted. On this model, India for example can never supplant China. It will have no resource hinterland. The Middle East and Africa will be stripped too soon.

    This theory and strategy in hindsight looks both brilliant and obvious. To develop the theory and practice ahead of the game takes theoretical development and insight but is not in principle impossible for far-sighted thinkers.

    But there are many dangers including;

    (1) national environmental damage as you say; and
    (2) the corruption of The Party by capitalism.

    The latter may be occurring now as Party officials and their families amass crony capital style fortunes. Then again this may have been foreseen theoretically by an inner “Deep Party” if such exists. Allow the “poisonous flowers” to bloom and to defeat corrupt US crony capitalism by even more corrupt Chinese crony capitalism. Then at the appropriate time cut down the “poisonous flowers” who revealed themselves and restore the Confucian-Marxist civilisation-state ideal. This is speculative but still in the realms of possibility.

    The “last man standing” model of civilisational collapse would appeal to the Chinese millennial mindset. China, as the last civilization standing, would be the Middle Kingdom surrounded by barbarians. Marx’s rubric of “socialism or barbarism” gets a Confucian twist: socialism in China and collapse into barbarism everywhere else. A long bow to pull perhaps but I think the super powers have realised this planet is not big enough for two super powers. The logic from there is straightforward. There can be at most one winner. Though I agree with you that most likely there will be no winners.

  33. Great stuff.

    However, I might leaven the analysis with anecdote.

    Years ago, when a member of the CPA, I had the advantage of mixing with older comrades who had experienced a long term residential school courtesy of internationalism. The man who spent time in China (a seaman and local trades union official) was full of warmth for the Chinese people and profoundly impressed by their intellectuals; the man who spent time in the USSR was a lachrymose drunkard, apparently like most citizens of the USSR; the man who spent time in North Korea would occasionally say, apropos of nothing, “keep your eyes on North Korea”. This (deceased) comrade was a man who went to sea at fourteen, in the merchant navy. When he chose to speak about North Korea, which moments were apparently involuntary, it was always presaged by a widening of the eyes the like of which I’ve never seen before or since.

    It appears that the CCP can carry forward the hopes of ‘actually existing socialism’ but perhaps not the hopes of humanity. But they are a good chance, for sure. The infrastructure deals they have done with the Russians are phenomenal and may position them as a decent society while Europe and the rest of the West become captives to global corporate fascism delivered by international trade agreements designed to smash the last vestiges of national sovereignty.


  34. I don’t have details to hand, but I have heard quite a bit (certainly NOT from our corrupt propaganda machinery called the Australian Media – which couldn’t find its ar5e with both hands) about China’s activity in Africa.

    In short, where the US Empire uses AFRICOM, corruption, military muscle and political intervention and supports vile dictatorships, China tends to build hospitals, roads schools etc.. and then seeks co-operative mutually beneficial business deals for resources etc… . No wonder the US feels so threatened by China.

  35. @Megan

    Yes, China is outsmarting the US at every turn. China has a profoundly different approach to empire and hegemonic power than does the US. The US and Europe are conditioned to and employ the “expeditionary model” of empire. This requires the use of expeditionary armies and the assertion of imperial power abroad, often at great distances.

    The above model worked in the era of asymmetric power when European industrial-military power dominated backward nations. Although notably it did not work for Napoleon when he took on a power, Russia, (and allies) which could muster a symmetric military and even greater manpower (whilst also possessing the advantages of defence in depth and the ability to trade space for time). In the modern era, superpowers are essentially symmetric. China has even adopted symmetric economic war, by strategically becoming capitalist for an indefinite duration, as I outlined in an above post.

    Due to its history, China has come to understand the failings of the expeditionary model of power. China now emphasises the unity and impregnability of the heartland combined with incremental expansion at its borders. A rising lake fills the valley. A river flowing away is lost in foreign lands.

  36. @jungney

    People expect too much of socialism.

    Socialism only achieves economic rationality and stability.

    All the corruption and other forms of exploitation will probably continue.

    But there will be the potential to take society to higher levels.

  37. Ivor, I think that you are right about humans having placed too much of a burden on social structures like the state under socialism to create “socialist man”. At this point I’d settle for sustaining and expanding the Oz social welfare state as socialist enough. I once had a yarn to a Californian farmer at his usual back country eatery, over lunch, who, on discerning that I am Australian, asked what it was like living under democratic socialism. Without hostility, genuinely inquisitive. He was specially interested in what he saw as our ‘socialist’ health insurance scheme; he told me that he’d be able to travel if he didn’t pay health insurance. That’s an interesting contrast in quality of life experience.

    I doubt there are too many socialist objectives that we can attain through a society founded on the extension of democracy to all spheres of life. One of the roles of the state ought to be to actively pursue social policies that extend both democracy and our capacity for democracy though multiple pathways rather than through ideological urging: startup funding and support for worker’s co-ops; a taxation system that reflects that priority; universal and affordable child care; an environmental repair program with the emphasis on local participation; local economies rather than national and international.

    That reads like a bit of a wish list but the point is that people don’t acquire the necessary skills to ‘do’ democracy except by doing it. Engagement with these kinds of initiatives structures would be much more likely to produce citizens with the necessary virtues to fill the social spaces. Could it be worse than the stupour that currently appears to afflict the majority, even in Australia?

  38. Correction:

    I doubt there are too many socialist objectives that we can attain …

    Should read can’t attain.

  39. rog: yes, even here Santa Maria’s mob were into every bucket of agrarian socialism they could by way of subsidies.

  40. @Ivor

    You are still, regrettably, experiencing confusion between this and that.

    If you ask me to justify my assertion of this, which I did assert, I will do my best to respond; but if you ask me to justify my assertion of that, when I never did assert that, I can only repeat that that is not my assertion.

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