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Is Constantin Gurdgiev Ireland's Economic Rasputin?

category international | anti-capitalism | opinion/analysis author Friday November 11, 2011 13:36author by Paddy Hackettauthor email rasherrs at eircom dot net Report this post to the editors

Constantin and the Irish Economy

Gurdgiev makes the false assumption that capitalism isa rational system that serves the interests of all citizenry if rationally organised. Like the reformists on the Left he believes that a reformed capitalist social system can advance the interests of the capitalist class, middle and working class. In this way he is an idealist reformist who mistakenly believes that reason (ideas) can determine social reality. To achieve economic recovery he argues that that there must be a massive reduction in state spending on a scale that makes past and present governments' reductions look lilliputian. He shows here his failure to understand the nature and function of state spending under capitalism.

 

The following comments by Constantin Gurdgiev, leading figure of the right, is taken from his blog:

"To summarize, there is no hope of growing out of the debt crisis we face when the expected growth this economy can achieve in the next decade or so is roughly ten times smaller than the debt repayments we have to finance for the combined public and private non-financial debt. Once we rule out sovereign debt restructuring, the only solution to our crisis will require reducing the private sector debt overhang."

Within the framework of capitalism growth is the only solution to Irish economic recovery. This growth has a global character. But the economy of the Irish Republic cannot grow independently of world growth. As capitalist economic growth such growth is exclusively derived from the profitability of industrial capital and cannot be sustained on a platform of expanding debt. This means that only  stronger capitals can sustain economic growth. Weaker capitals have to be eliminated. The latter are largely enterprises that have been sustained by debt --bubble companies. Under these conditions the productivity of industrial capital must be enormously increased. Under such conditions total surplus value compensates for the tendency of the general rate of profit to fall. Big increases in the intensity of labour is another must. State spending must be minimised. The outcome is a shrunken world economy with a much more impoverished working class. This is the only kind of capitalist economic recovery possible today. It is a reovery that is unacceptable to the working class. But it is capitalism's nature to maximise profit not to serve the interests of the working class. Successful capitalism is capitalism that advances the interests of the capitalist class. Benefits accruing to the working class under capitalism are, at most, merely the means to guarantee profitability. If the forgoing prescriptions are not realised then civilisation will either collapse into chaos or else a global social revolution will happen whereby capitalism is replaced by communism.

By contrast Gurdgiev's programme is a call for an idealist utopia that has no basis in history. He couches his programme in fancy "economeese" in order to fool the working class. It is merely a programme to disarm the working class thereby rendering it vulnerable to a defeat leading to its subjection to the kind of naked capitalism indicated above. State spending and bank capital don't produce value nor surplus value. Value and surplus value are created from within the production process. Consequently the slimming down of state spending can at most reduce the volume of value being "wasted". But the state cannot, however trim it becomes,  create value. Neither are banks value producers. They can only, at most, more efficiently guarantee and assist in the circulation and realisation of exchange value and ultimately the accumulation of capital.

The only real alternative for the working class is communism. Under communist society the law of value and the other related social laws of capitalism will have been abolished. Consequently profitability is no longer the driving force, and limit, to the expansion of wealth.

Gurdgiev is mistaken when he claims that massive slashing of state spending together with the creation of an effective banking system largely constitutes the platform from which recovery can take off. He omits the ultimate source of the problem --the capitalist production process.The lack of productivity within the process of production is the principal cause of the sustained capitalist crisis. There must be a transformation of the technological basis of production entailing large increases in the rate of exploitation of labour power if recovery, albeit only temporarily, is to establish itself. But enormous technological development is not something that can be developed at will. Technological change (and thereby large productivity increases) cannot be introduced to the labour process at will. Consequently adequate productivity of labour increases are highly unlikely although not impossible. This being so it is highly unlikely that authentic economic recovery can be achieved.

Gurdgiev  argues that public service spending must be savagely cut. Along with this he calls for radical reform of the public service and indeed the capitalist political system itself. The implication of this programme of his is that a massive cut in public service expenditure together with a radical transformation of the public sector together with the political system can result in a society that serves the interests of the Irish citizenry. He suggests too that the Irish banking system must be radically reformed. He attacks any attempts to increase taxation. He claims that the latter only dampen down effective demand or consumption. The foreging prescriptions form part of Gurdgiev's idealist utopian programme. It is idealist because it is not grounded in the process of production which must constitute the materialst basis of any valid programme. His prescriptions apply to circulation and not production. The former cannot create value which is the way out of the contradiction. In so far as he makes references to the labour process it is only on the unestablished assumption that if the Irish economy follows his instructions global production will have picked up in such a way that the Irish economy will be able to benefit from this change. Given the global situation this assumption cannot be made especially when a massive spike in productivity is the requirement if there is to be recovery.         

                                                                                     
The Irish economic crisis is a manifestation of the global crisis that has beset contemporary capitalism. The recent property bubble is an expression of the world economic crisis. To identify the crisis being suffered in Ireland as  nationalist is to misunderstand the entire character of capitalism. The recent role played by the Irish banks in contributing to the property bubble was also an extension of the global crisis. Many commentators, from both right and left,  position the source of the the problem hitting Ireland in reverse order. They mistakenly posit how the crisis appears as the cause of the crisis.

Gurdgiev argues that that there must be a massive reduction in state spending on a scale that makes past and present governments' reductions look lilliputian. He shows here his failure to understand the nature and function of state spending under capitalism. He is unable to grasp that state spending has been undertaken to shore up capitalism and to pacify both the working class and middle class. Contrary to his thinking the state was not established and expanded as part of a formal rationalism originating originating in the European Enlightenment. The capitalist economic system is incapable of providing permanent full employment and enhanced living standards for the masses. Consequently the state steps in to fill the gap. This political intervention forms part of a necessary strategy to discourage the working class from challenging capitalism. The upshot is a burgeoning debt sustained social democracy.

Capitalism in the West sought to overcome this problem by increasing state spending. This led to, among othe things, improvements in the infrastructure together with improved working and living conditions. However state enlargement could only be provided chiefly by deductions from total surplus value while leaving less exchange value available for private capital formation. Clearly the reduction of surplus value accruing directly to industrial capitalism is correspondingly less. This shortfall could be compensated for by increasing the productivity of labour and thereby the exploitation of labour power. The result of increased productivity is a massive transformation in technology.

Now the conditions that enabled this process to occur were massive state spending on infrastructure and state iniated industry. The capitalist class were not in a position, for reasons which I shant go into now, to engage in such undertakings at the time. The basis for these developments, as alluded to above, were the following. The victory of one group of monopoly capitalists over another as a result of the two world wars along with economic depression from 1929 to 1939. Defeats suffered by the world working class in France, Spain, Britain and elsewhere. These changes helped bring about a large scale recovery in the general rate of profit. This was due to the destruction and devalorisation of capital.eant the continued burgeoning of state expenditure eventually culminating in empires of debt. This development enabled many weak entrepreneurs to stay in business. The debt empires sustained a burgeoning demand for commodities --the mass consumer society. Because of the growth and perpetuation of weaker capitals and the increasing debt, total surplus value increasingly failed to compensate for the falling rate of profit. The gap continually widened forcing the system to create even further debt. This helps explain thecauses underlying  recent financial crises such as the Asian, Russian and Mexican crises. Now these crises were "artificiallly" resolved by futher debt expansion. But this was no real solution and merely kicked judgement day into the future. The situation has now reached such an enormous size that capitalism can no longer offer debt based solutions to economic disturbances. The problem is not a European problem but a world problem.

Gurdgiev never makes clear the philosophy that underlies his nationalist model for Irish economic recovery. His philosophy is based on extreme right wing assumptions. It is these that really need to be expounded by Gurdgiev in order to render his conception of economics more intelligible. Another problem is his use of obscurantist language both in his writing and his public utterancesn --highly jargonised language.(Not meaning to offend personal sensibility. His mode of speaking renders it more difficult to comprehend what his verbalisations). There is no need for much of what he writes to be enveloped within a vast cloud of jargon. Its effect is to lend his outpourings an all knowing mystique.

It is highly unlikely that bourgeois representative democratic institutions are capable of bringing about capitalist economic recovery given the scale of the sustained attack that must be mounted by the bourgeoisie against the working class. It is very likely that naked bourgeois dictatorship may become the order of the day. Even now such tendencies have been surfacing. We see this in relation to the conduct of Merkel and Sarkhozy with regard to Greece. Just as the capitalist economy  has been reaching its limits so too may its representative democracy.

Related Link: http://paddy-hackett.blogspot.com/
author by jeffpublication date Fri Nov 18, 2011 11:57Report this post to the editors

They only care about tracksuits and a few pints after collecting de labour. Therefore, their "only alternative" of communism will see their 'dictatorship of the proletariat' being superceded by a few smart lads and lassies, and there'll be even less fun to be had in what will amount to yet another socialist hinterland, albeit with a ruling class lapping it up in their dachas

author by Rational Ecologist.publication date Fri Nov 18, 2011 12:35Report this post to the editors

I am stealing, nae borrowing this phrase from George Monbiot. This should not be taken as a tribute to him, rather I think the phrase is a useful one and a counterpoint to all the talk of economics, coming from all sides of the spectrum. For fear of sounding melodramatic, perish the thought, I think all the analyses, at least the ones I have seen, say nothing of the ecologically-precarious state the planet is in. All the 'Isms' are wrong if they do not put the ecological health of the planet at the centre of their plans for the future. There is no doubt that a pernicious form of Capitalism has brought us to where we are, however, a more rational or enlightened one will merely serve to slow down, slightly, the rate of destruction. We need to look at Tax Havens. Here is where Occupy London may end up achieving something really really important by exposing the City of London Corporation for what it really is-the centre for the facilitation of world crime. Please read Nicholas's Shaxson's excellent book 'Treasure Islands'. Gudgiev and all other economits are maniacs because they totally ignore the Environment/Nature. Whatever system you advocate the simple fact is that the planet cannot sustain 7billion people and cannot sustain western levels of consumption. That is now the only lens.

author by Rational Ecologist.publication date Fri Nov 18, 2011 12:55Report this post to the editors

The Growth Imperative has been predicated on expansion and continued plunder of the landbase and not to forget cheap fuels. Both of these legs are beginning to crumble and soon the edifice will come tumbling down. There is nowhere left to plunder. No wonder the race to Mars is hotting up. The way we're going we will need another planet or 6!! Makes the passing of Richard Douthwaite all the sadder. The Growth Illusion was a fine, if limited, book. Debt is a tool for expansion and control.

author by opus diablos - the regressive hypocrite partypublication date Fri Nov 18, 2011 13:33Report this post to the editors

..if I recall correctly refers to household management(Greeks, again).

Problem is they're caught in their own web of econometrics, the numerological measurement of quantities and flows that has degenerated into numerology for debating afficiandos, a skill Gurdgiev is consummate at, and as such holds our mediacrats in thrall with his verbal facility.

Result; means trumps ends, and we can discard the fact that the planetary 'household' economics should treat is bandied around as though it were a moveable subject; one moment the individual's, next the local, then the national, EU, or global; to be manipulated for whatever agenda being served.

This produces multiple EXCLUSIVE economies, and discards the global inclusive economy which should be the focus, given our predicaments: and when we refer to globalisation, its the corporate economies of compounded elites, and their neo-liberal 'economists', often on the public payroll while they advocate public cut-backs for the excluded. Result: management is left to the 'invisible hand' of the 'free' market.

More on Shaxson's excellent book at http://www.treasureislands.org (a glimpse of the gloved hand).

meantime the growth imperative is the carrot dangled as recipe for our imitation of the self-made trillionaires...while they conveniently forget to remind us they pillaged the means(global resources)through their imperial plunder over the centuries.

And having pillaged, are busy wringing out onto their casino tables for further delusionary virtual numerological expansion which soothes their shallow and delicate egos which require a subjugated and impoverished general population to reinforce their delusions of superiority(they are alergic to equality). Collective psychosis aka fascism in the velvet glove of PR cushioned 'democracy'...which they will drop from a height by remote-control drone at the slightest sign of challenge to their hegemony and monopolising of said resources.

author by Paddy Hackettpublication date Fri Nov 18, 2011 18:07author email rasherrs at eircom dot netReport this post to the editors

Hi

Am reading with care your comments. Shall look into this title recommended by you. I do think that the question of ecology is a very serious one. However I cannot see how the ecological problem can have any chance of success outside communistic society. Under such a social organisation the people as a whole can discuss and eventually decide in a authentic democratic way what choices need to be made regarding ecology. I myself believe that the scale of the human population is a danger. But I dont agree with forcible sterilisation and such crudities. I am of the opinion that animals are treated abysmally and that we are responsible for the grey and black rhino extinctions etc. While in Rome I saw how the horses were treated --the ones used to pull tourists about. It was horrible and sad. I tried to give them an organge to help quench their thirst. But sure they do similarly to the horse in Dublin city that are used to transport tourists about the city centre. Black Beuaty all over again. Horse riding in the West is another appalling exercise.

Perhaps you can suggest how human population can be regulated.

Paddy

Related Link: http://paddy-hackett.blogspot.com/
author by opus diablos - the regressive hypocrite partypublication date Fri Nov 18, 2011 19:01Report this post to the editors

..the human population regulation is cracked.

Education, reasonable prosperity and material security to obviate dependence on offspring..and the people relax and stop being so clingy.

The hardware and pharmaceuticals are there..its the distribution is still creating bottlenecks.

I'm not 100%, but I think RE was saying the planet cannot sustain 7bn under current resource demand expansion. It can contain its projected(I believe)9bn if the greed is capped.

Thats the task. Well ....one task.

author by serfpublication date Sun Nov 20, 2011 12:01Report this post to the editors

actually opus....
Apparently without petroleum, the one study I know of on the subject says that it can only sustain about 2-2.5 billion people tops

some info here:
http://www.jayhanson.us/page157.htm
and here
http://www.jayhanson.us/dieoffindex.html

I seem to dimly recall the following interesting assumptions:

(1)everyone sticks to a strict VEGAN diet
(2)we compost absolutely everything including the bodies of the dead

author by opus diablos - the regressive hypocrite partypublication date Sun Nov 20, 2011 12:47Report this post to the editors

Its not the numbers.. its the waste...if ten percent of whats blown on weapons was put into clean water, education and health we could easily feed the 1-2bn malnourished....if we stopped dumping food in the overdeveloped world and manipulating markets for speculators the hunger would end. Food dumping creates famine by undermining local economies, one of the reasons east Africa no longer is self-sufficient in food. Agribusiness.

Consider the population density in India or Indonesia..then consider Ireland supported c.10ml before the famine..and exported food throughout the famine..and now wont feed 5ml....its the exclusive wealth accumulation for unsustainable luxury has us fucked...not the shortage of land. Then add in the scientific advances since the 1840s and redo the sums. Just bad management, idiocy and greed stop us.

But given the ecological damage we're doing(not least the oceans)I wouldn't expect we will get much further anyway...and it looks increasingly as though the strangelovers are determined to induce their mushroom farm.

And again, no peak oil crises if we'd rationalise its use. How much do we burn SITTING idling in jams that adecent public transport system would end?But that wont feed the corporate dinosaurs' greed for share-price trough-snouting.
Plus the oil cartels have been supressing technologies that challenge their control for the bones of a century.

No joking matter.

author by serfpublication date Sun Nov 20, 2011 13:43Report this post to the editors

I think you're missing the point opus. Just because you can do something, doesn't mean you should or it is wise to do so.

With the current availability of cheap oil We're managing to feed the current 7billion (well a good few of them) but it's doing untold and long term damage to the ecosystem to do so. Look at the destruction of fish stocks in the oceans, soil erosion, rainforests and the overuse of fertilisers and chemicals, the horrors of factory farming and the creation of antibiotic resistance and superbugs, global warming etc etc.

We're heading towards a precipice but it's not PC to talk about it. Absolutely stupid!

Tell me, whats the point of 7 billion people living when most of them are hungry, living in fear and misery and enslaved?

Almost every problem we have is magnified by overpopulation.

Personally I value quality of life over quantity. But in the corporate slave market, more consumers and slaves is good I guess. 

There's only one planet like the earth that we know of.  We spend billions on space exploration to visit empty lifeless worlds while we ignore the potential paradise we already inhabit and treat it like a glorified toilet while we mindlessly multiply and use up every resource at a ridiculous rate and kill off most of the animal life that have the misfortune to share the planet with us. Enlightened beings we are certainly not.

author by opus diablos - the regressive hypocrite partypublication date Sun Nov 20, 2011 14:13Report this post to the editors

..do I miss?

I'm fully aware of the precipice(check today's Al Jazeera for the bleak picture on the oceans).

But to follow your logic, if you are proposing a cull, who decides who?

The strange thing is that many of the poor living from day to day are no more '...hungry, living in fear and misery, and enslaved..' than the obese, insatiable, insecurity-driven, corporate slaves to their social-darwinian programming parasiting us into designer Hades.

The only hope is that enlightenment is a spectrum rather than a binary switch, and that we kick our game up a notch before joining the dinosaur(who could at least excuse himself by blaming external factors).

author by serfpublication date Mon Nov 21, 2011 00:20Report this post to the editors

I'm certainly NOT proposing a cull and was including first world corporate slavery in my definition of the word "slavery". 
Most of us are "willing slaves" of capital. We work longer hours and see less of our families than workers in medieval times. IMHO thats not a particularly edifying life either.

If we are to address population issues, we need to consider tax incentives and a lottery system for reproduction. But I'll be pilloried by the PC for even making that logical suggestion.

Funny that. Because once you get here everyone is happy to let you rot and suffer and starve, die of easily preventable diseases and be cheap labour or economic conscripts in unending wars to be blown to bits fighting over the remaining resources, but if you suggest allowing less folks to get here in the first place to have to embrace that joyful fate, in order to help make things more sustainable, everyone gets their knickers in a huge knot.

Oh well, perhaps we should just sit back and await the corporate "mishandling" of a flu virus that will probably sort this problem out (in a most profitable manner for them)

 https://www.indymedia.ie/article/94065

author by opus diablos - the regressive hypocrite partypublication date Mon Nov 21, 2011 12:09Report this post to the editors

..population is forecast to peak at a manageable 9bn around mid-century. A modicum of material security drives family planning at the micro/individual level: no need for draconian eugenics. After which date the predictions are population reduction.

I think the change needed is more radical, psychological, cultural and legal.

It is the founding myth of private ownership of resources on a first-come-first-grab basis, mutated into corporate dominance of the planet and disposession of the unborn, as well as many of us born.

Without that myth-demolition, the rest is cosmetic.

This primary myth is based on a residual animal territoriality.

The task is to complete the evolutionary potential of our intelligence, and rationally humanise our misnamed 'civilisations'; which are maintained by brute force, whatever the window dressings of 'diplomacy' and polite-ics.

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