Author: Oliver Eagleton

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Balkan Reversal

Until recently, in Washington and in Brussels, North Macedonia was considered a Euro-Atlantic success story. The country of two million people – the only republic of the former Yugoslavia that saw no violence during the 1990s – had managed to overthrow the conservative nationalist government of Prime Minister Nikola Gruevski and his VMRO-DPMNE (the Internal Macedonian Revolutionary Organization–Democratic Party for National Unity) after a decade in power. In 2017, Gruevski’s place was taken by Zoran Zaev, the mayor of the agricultural city of Strumica and leader of the Social Democratic Union of Macedonia, or the SDSM, the successor of the state-socialist League of Communists of Macedonia. Zaev’s new Foreign Minister, Nikola Dimitrov, was on exceptionally friendly terms with the US Embassy; he had served as National Coordinator for NATO Integration under Gruevski, and embassy cables revealed that he had worked for years as a CIA protected source.

Two successive protest movements – Protestiram in 2015 and the Colorful Revolution in 2016 – had elevated a number of telegenic youth activists from the streets to positions in the SDSM government, promising hope and change. An anti-corruption campaign was launched to deal with the cases generated by Gruevski’s graft-riddled reign. After the SDSM rechristened the country ‘North Macedonia’ in 2018 (ending a long-running feud with Greece, which claims the name ‘Macedonia’ as its own), Athens dropped its objection to the country’s NATO membership, and in March 2020 the Atlantic alliance welcomed its newest member. EU accession was next on the agenda.

But relatively quickly, the hopeful glow that had haloed Zaev and the SDSM began to fade. Last month’s local elections revealed the depth of public disenchantment. Zaev’s party went into the ballot holding 57 municipalities while the VMRO-DPMNE had just 5. After the vote, the SDSM hung onto 16; VMRO secured 42. The remaining 15 municipalities went to Albanian parties. The poll has been widely interpreted as a verdict on the SDSM’s tenure, and the latest surveys conducted by the Institute for Political Research Skopje (IPIS) reveal that the party is fast losing support at national level: 22.5% of respondents said they would vote for VMRO-DPMNE if parliamentary elections were held next week, while 17.5% said they would vote for the SDSM. 

The disastrous result marked the onset of a new crisis in North Macedonia. Zaev, who pledged to resign if his party lost the capital of Skopje in the second round, reneged on his promise. This triggered a bizarre cascade of events in which the opposition accused the government of kidnapping an MP from the Albanian party, Besa, in order to prevent him from participating in a planned no-confidence vote against Zaev. One week later, Zaev appeared to have changed his mind again, declaring that he would resign and appoint a new leader to head the SDSM. He has encouraged pro-EU MPs to stick with his party; yet since Bulgaria vetoed the country’s accession in 2020 – citing disputes over language, history and minority rights – there has been no viable plan to initiate negotiations with the bloc. 

It’s worth examining how the SDSM arrived at this low point. Few parties in the Balkans have received such effusive praise from Western diplomats, thinktanks and media outlets; and few have disappointed so thoroughly. It must first be stressed that the party inherited a country in disarray, reeling from a decade of dictatorship, illiquidity, a collective identity crisis and corruption on a vast, almost awe-inspiring scale. When Gruevski first came to power in 2006, the US and EU lauded his commitment to neoliberal adjustment and NATO membership. But the warm relationship soured at the 2008 NATO summit in Bucharest, when Greece vetoed the country’s entry to the Atlantic compact: a moment of humiliation that reportedly prompted Gruevski to turn away from the West.

That same year, the global financial crisis provided a new path for the PM. Gruevski’s market-friendly reforms, along with a sophisticated government PR campaign, managed to seduce international investors. ‘While the architecture of global liquidity crumbled,’ writes Fabio Mattioli in Dark Finance (2020), ‘the Macedonian government found itself able to access investments from actors interested in diversifying their portfolios or committed to preventing a Balkan-wide contagion of the debt crisis that had begun to wreak havoc in Greece.’

Much of the new public debt was channelled into mass construction projects, most ostentatiously ‘Skopje 2014’, which cost at least 683 million euros and transformed the capital into a giant open-air museum of bronze nationalist statues and incongruous neo-baroque and neo-classical buildings. Skopje now looks like a kitsch hybrid of a Central Asian capital, a Balkan Las Vegas and Macedonian-nationalist Disneyland. The ​​pièce de résistance of Skopje 2014 is the 35-meter statue of Alexander the Great atop a horse in the city’s main square. Sometimes, during the Gruevski years, surrounding speakers blasted Wagner’s ‘Ride of the Valkyries’ as dancing fountains pulsed in time.

Gruevski’s remaking of the city allowed him to achieve a crucial political objective. The SDSM, having overseen the country’s privatization process during the 1990s, when socially-owned enterprises were sold to private investors at an average of 6.5% of their estimated value, had long been favoured by the country’s oligarchs. But in Skopje 2014, Gruevski found a means to purchase the support of such interests, offering lucrative contracts for domestic businesses which, by turning Skopje into a ‘world-class city’, began to attract finance from abroad. While Skopje 2014 was detested by the middle classes, it proved popular among lower-income workers. The speculative building spree expanded access to housing through a variety of credit schemes and kept employment levels high in the construction sector.

But Gruevski’s cross-class coalition was not to last. Details of the criminal machinations behind the urban renewal plan began to emerge after tape recordings of backroom deals were passed to Zaev (allegedly by disgruntled secret policemen, although Gruevski claims that foreign intelligence agencies were involved). Zaev, who subsequently began holding press conferences and sharing the recordings with the public, quickly became the face of the opposition and mass protests filled the streets, drawing crowds of up to 30,000 in Skopje during the late spring of 2016. 

Cue significant interest from Western governments, particularly the US, which saw an opening amid the public dissatisfaction with Gruevski. The PM and other hardline nationalists had long opposed any change to the country’s name to appease Greece – an intransigence that rendered NATO membership out of reach. As tensions with Russia flared over Ukraine, eastward expansion became an urgent priority for Washington – and Gruevski, an obstacle. There was also long-held optimism that resolution of the name dispute would have knock-on benefits for the entire region, where issues of contested history or territory still linger in Cyprus, Montenegro, Bosnia and Herzegovina, Kosovo. 

At the height of the demonstrations, the United States’ Office of Transition Initiatives – a branch of USAID – opened an outfit in North Macedonia. The OTI was established in 1994 to ‘support U.S. foreign policy objectives by helping local partners advance peace and democracy in priority countries in crisis’ (for which read: facilitate regime change). VMRO supporters soon discovered that the OTI programme was supporting the same network of NGOs and media outlets as George Soros’s Open Society Foundation, and that there was a significant overlap between the employees of these US-funded NGOs and the activists leading anti-Gruevski protests on the streets of Skopje. A ‘Stop Soros’ campaign was launched, drawing support from some Republican Senators in the US. In March 2017, six of them wrote to Secretary of State Rex Tillerson:

Unfortunately, we have heard credible reports that, over the past two years, the U.S. Mission to Macedonia has actively intervened in the party politics of Macedonia, as well as in the shaping of its media environment and civil society, in an improperly partisan manner, one that, directly and indirectly, has influenced the outcome of elections in Macedonia. 

The US Embassy in Skopje denied such allegations but made little effort to conceal Washington’s priorities. In an email to me at the time, embassy spokesperson Laura Brown wrote that ‘Macedonia’s four major political parties requested the EU and the US government help Macedonia move past its political crisis’. ‘Our policy’, she continued, ‘is to support Macedonia’s integration into Euro-Atlantic institutions as a resilient, prosperous, and inclusive democracy, developing economically.’

This was not the only instance of foreign political support flowing into the country. In 2016, with Gruevski still clinging onto power, the Special Prosecutor’s Office (SJO) opened with much fanfare. The SJO would, in the words of then Ambassador Wouter Plomp of the Netherlands, ‘establish accountability for past wrongdoings revealed by the wiretaps’. The Dutch Ministry of Foreign Affairs funded the SJO to the tune of 649,990 euros. Its three chief prosecutors, Katica Janeva, Lence Ristoska, and Fatime Fetai, received the endorsement of top European officials, as well as fawning coverage from Western media, with the BBC calling them ‘the real crime-fighting Charlie’s Angels’.

Despite the ongoing corruption investigations, the VMRO managed to eke out a narrow victory in the December 2016 snap parliamentary elections. Gruevski’s party won 51 seats while the SDSM took 49. In the aftermath, however, the VMRO struggled to form a coalition, and the SDSM – with rumoured behind-the-scenes support from Western embassies – successfully courted the country’s largest Albanian party and long-time kingmaker, the DUI. VMRO supporters were determined to obstruct the frail new coalition. In an April 2017 parliamentary session to initiate the formation of the new government, a small nationalist mob stormed the Sobranie. Zaev and three other MPs received mild injuries during the ensuing confrontation. Images of a bloodied Zaev went viral, but the drama ended there. There was no coup or renewed Balkan conflict. The Gruevski regime, which once seemed ingrained in every fibre of the country – every phone call, every illegal transaction – finally crumbled like cheap plaster. 

It was a heady moment for the SDSM, yet the elation and relief were short lived. In 2018, the SJO launched a major investigation under the codename ‘Empire’. One of its suspects was Jordan Kamchev – recently named North Macedonia’s richest man – whose reported net worth of 228 million euros was allegedly earned through fraud and money laundering. It turned out that Kamchev had friends in high places. The businessman had reportedly turned to Boki 13, a flamboyantly dressed pop star with cheeks and lips cemented in filler, in an effort to secure lenient treatment from the SPO. Boki 13 had ties to the upper-echelons of the SDSM; in one leaked taped recording he claimed to have direct links to Zaev himself. Kamchev allegedly paid Boki 13 at least 1.5 million euros in cash in an effort to avoid a harsh prison sentence. Janeva, one of the ‘Charlies Angels’ prosecutors, was charged with taking a 50,000 euro bribe from Kamchev. The tabloid-ready scandal dealt a spectacular blow to the credibility of both the SJO and the new government.

Hopes for the SDSM atrophied further in September 2018, when the country organized a referendum on whether to change its name as required for Euro-Atlantic integration. Under the slogan ‘Never North’, the majority of voters boycotted the vote, whose participation rate stood at just 36%. Although this fell far short of the 50% required to legitimize the results, the SDSM nonetheless declared the referendum a victory and pushed through the name-change – prompting widespread disenchantment with the democratic process and crystallizing the image of the SDSM as a conduit for Western interests. 

During its 2017 election campaign, SDSM supporters claimed that Zaev would ameliorate poverty and increase living standards. Zaev played up his humble origins in the southeastern provinces and his early life as a manual labourer. A new Personal Income Tax Law, ratified in January 2019, was supposed to introduce a progressive tax code affecting only the richest 1% of citizens. Yet less than a year later the Ministry of Finance released a twenty-page policy paper explaining its decision to roll back this modest reform. The Ministry cited widespread tax evasion, yet the real reason for the volte-face was clear enough. As a report by the European Commission concluded, the decision was taken to ‘buffer the angry sentiments of the business community’. The Minister of Finance Dragan Tevdovski, widely seen as leading the pro-welfare wing of the SDSM, was removed from office despite enjoying one of the highest approval ratings of anyone in government. Zaev, whose attempt to assume the role himself was deemed unconstitutional, instead appointed Nina Angelovska, a young e-commerce entrepreneur and opponent of Tevdovski’s modest redistributionist policies. Angelovska was in turn replaced by Fatmir Besimi, who had served as Minister of Economy under Gruevski – undermining any pretence that the SDSM had broken with the previous administration.

A series of recent disasters have further damaged the government’s credentials. Last September, a fire at a new hospital built to treat Covid patients in Tetovo killed 14 people. In the aftermath, it emerged that the company contracted to build the hospital was owned by Koco Angjusev, a notoriously corrupt businessman and Zaev’s former Deputy Prime Minister. An investigation concluded that the fire had occurred due to a faulty defibrillator. Predictably, no one was held accountable. Health Minister Venko Filipče tendered his resignation and had it summarily rejected by Zaev.

Then, on 9 November, while the public was fixated on the post-election fallout, the government quietly declared a ‘30-day state of crisis’ in the energy sector. To meet its daily electricity needs, the country has been forced to draw on European energy supplies and racked up a sizable debt. Dramatic measures have since been introduced to curb consumption: Christmas lights have been cancelled in most towns across the country, and a new decree outlines criteria for reducing the lighting of streets, squares and other buildings to a ‘minimum safety level’. In recent months the REK Bitola coal plant, which generates 75% of the country’s electricity and dangerous levels of sulphur dioxide, has been the site of numerous fires. It is difficult to view the SDSM as a modernizing force when they have plunged the country into darkness.

With North Macedonia still mired in multiple crises, three potential outcomes have been forecast for the months ahead. In the first, the current SDSM-led majority stays but with a new leader entirely subordinate to Zaev. In the second, favoured by the VMRO, snap elections are called, with the requisite 120 days allotted to organize elections in the middle of unprecedented health and energy crises. In the third, the current majority simply collapses and opposition parties attempt to form a new coalition. The precise parameters of North Macedonia’s future are uncertain. What is clear is that the country’s once-bright Euro-Atlantic future now looks distant and dim. 

Read on: Peter Gowan ‘The NATO Powers and the Balkan Tragedy’, NLR I/234.

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Frugal Germany

Whatever happened to the ‘European Army’? Some of us may still remember the public appeal, issued three years ago by the philosopher, Jürgen Habermas, urging ‘Europe’, as identified with the EU, to arm itself, so as to defend its ‘way of life’ against China, Russia and the Land of Trump, and in the act advance its ‘ever closer union’ in a supranational superstate. Cosignatories were a handful of German political has-beens, including Friedrich Merz, then still of BlackRock. Here, for a change, there is good news: the ‘European Army’ is as dead as any army can be and, unlike perhaps the indefatigable Merz who is currently running for the umptieth time for president of the CDU, beyond resurrection.

What sealed its fate? In various ways, never publicly discussed, as is the neo-German custom when it comes to questions of life and death, the ‘European Army’ project was linked to the longstanding German pledge to NATO to increase its military spending to 2% of GDP, i.e., by roughly one half, by some unspecified date in the transatlantic future. It was and is easy to find out that this would raise German ‘defence’ expenditure above that of Russia, not counting the rest of NATO. It is equally easy to note that German military spending can only be on conventional and not on nuclear arms. In the 1960s, West Germany was one of the first countries to sign the nuclear non-proliferation treaty, as a condition of the Western Allies returning some of its sovereignty. Moreover, it was and is obvious that Russia, with its expensive nuclear force, would be unable to keep up with Germany in a conventional arms race, which would lead it to invest in upgrading its ‘nuclear capabilities’. While this should frighten the bravest of Germans, in fact it does not, as merely mentioning issues of this kind marks you as a Putinversteher (Putin empathizer), and who wants to be that?

What exactly the 2% were to be good for, apart from generally adding to the firepower of ‘the West’, was never explained, although it was clearly related to the idea of turning NATO into a global intervention force. Note that the entire German military, unlike the other member countries, is under the command of NATO, aka the United States. Note also, however, that France, too, wants Germany to work towards the 2%. France itself has for years met that target, the reason being that, just like Russia, it is maintaining an expensive nuclear force, and is therefore lacking in conventional muscle. Seen from France, a German non-nuclear military build-up need not necessarily benefit the US but, under favourable circumstances, could benefit France, as it might compensate for its conventional deficit caused by its nuclear surplus.

It is here that the European army of Habermas and friends comes into play. For the French, what Macron calls ‘European strategic sovereignty’ can be achieved only if Germany can be extracted from its Atlanticist military entanglement, wholly or at least in part, in favour of a European-French entanglement. While this would be difficult enough generally, it would be impossible without new units and ‘capabilities’ designated from the beginning for self-determined European rather than US-determined transatlantic purposes. All it takes, however, to discard this prospect is a look at German budgetary planning for the post-Corona near future (if post-Corona it will be). As passed under Merkel as Chancellor and Scholz as Finance Minister, the current five-year budget forecast envisages a decline in defence spending from 50 billion euros in 2022 to 46 billion in 2025, although no less than 62 billion would be needed for an increase to 1.5% of GDP, far short of the 2% NATO target. During coalition talks, military sources let it be known that they had no hope for a turnaround under a government dominated, in their view, by ‘the left’. According to them, the only way under these conditions for the armed forces to repair their allegedly ‘disastrous condition’, due to decades of neglect under successive Grand Coalition Merkel governments, was by cutting military personnel by 13,000, down from 183,000.

Soldiers, like farmers, always complain. However much money you give them, they feel it should be more. But with the huge deficits run by the German federal budget in 2020 and 2021, and with the determination of the incoming Scholz government, with Lindner at Finance, to hold on to the debt brake, not to mention the giant public investment planned for de-carbonization and the ‘digital transformation’, one can safely assume that the dreams of Habermas and Merz of a ‘European army’ were dreamt in vain, and that its hoped-for dividends for both ‘European integration’ and the arms industry will never materialize. The coalition agreement, interestingly, avoids the 2% issue with almost Merkelian chutzpah: ‘We want Germany in the long run (!) to invest three (!) percent of its gross domestic product in international action, in a networked and inclusive approach (?), thereby strengthening its diplomacy and development policy and fulfilling its NATO commitments.’ Nothing on how this is to be paid for, and nothing there for Macron, up for re-election in the spring of 2022, with which to convince his voters of progress toward ‘European sovereignty’, conceived as an extension of French sovereignty – with France post-Brexit being the EU’s only remaining nuclear power and permanent member of the UN Security Council, and with German tanks nicely complementing French nuclear submarines, hopefully rendering the AUKUS fiasco forgotten.

Is there a prospect for some sort of compensation? Hope, as a German saying has it, dies last, and this may be particularly true for France in matters European. For four years now, Germany and France have been talking about a French-German fighter bomber, the Future Combat Air System (FCAS), to succeed the French Rafale and the German Eurofighter as the two countries’ sixth generation fighter aircraft. Originally FCAS was a French-British project which, however, fell by the wayside in 2017 when the UK chose to go for a plane of its own, the Tempest. Urged by Macron, Merkel agreed to fill the gap. In 2018 Dassault and Airbus Defence signed on as core contractors, and Belgium and Spain were brought in as further project participants. Still, work progressed only slowly, with severe disagreements especially on intellectual property rights, technology transfer and, important for France, arms export policies. Under pressure from Paris, and probably following up on confidential side-agreements in the 2019 Treaty of Aachen, the Merkel government got the Bundestag budget committee in June 2021 to authorize 4.5bn euros as a first tranche, to insure against a possible change in the German parliamentary majority after the September election.

It is no secret that among the German political class, FCAS has few supporters if any. This holds also for the military, who consider it one of those overambitious French grands projets that are doomed to fail due to excessive technological ambition. The system, which officially is to go into operation around 2040, consists not just of a fleet of stealth bombers but also of swarms of unmanned drones that are to accompany the planes on their missions. There are also satellites to support the planes and the drones, and generally to add cyber warfare capabilities to the system, giving it a sci-fi flair that stolid German generals tend to find, at a minimum, frivolous. Recently the German Federal Audit Office, in a confidential report, reprimanded the government for having left open crucial issues in negotiating the agreement, while the Bundeswehr procurement office has expressed doubts over whether the system will ever become operative at all. No doubts over whether FCAS will be expensive. Right now official, or semi-official, estimates are around 100bn euros, while knowledgeable insiders at Airbus believe the bill would be at least three times as high. For comparison, the NGEU Corona recovery fund, to be divided between 27 members states, amounts to 750bn.

Could FCAS be a consolation prize for Macron, to make him forget about the ‘European army’ and ‘European strategic sovereignty’? Perhaps if there was still more money around, but hardly now, after the Great Corona Drain. In Germany FCAS is considered more of an embarrassment than a strategic or industrial opportunity – one of the many problems left by Merkel, with her inimitable skill at making incompatible and unrealizable promises and getting away with it, as long as she was in office. While there are some ‘Gaullists’ left in the German political class for whom the alliance with France – leading, it is hoped, to a French-German/German-French Europe – takes precedence over the alliance with the United States, none of them can be found in the new government.

Indeed, where it might speak of a ‘European army’, the coalition agreement merely foresees ‘increased cooperation between the national armies of EU member states…in particular with respect to training, capabilities, interventions and equipment, as for example already envisaged by Germany and France’. And not to be misunderstood, it adds that ‘in all this, interoperability and complementarity with the command structures and capabilities of NATO must be assured’, declaring even more explicitly a few pages later: ‘We will strengthen the European pillar in NATO and work for more intensive cooperation between NATO and the EU.’ FCAS is not even mentioned, or only indirectly, in language that cannot but hurt French feelings: ‘We are strengthening defence technology cooperation in Europe, especially through high-quality cooperation projects, taking into account national key technologies and enabling small and medium-sized companies to enter the competition. Replacement purchases and systems available on the market are to be prioritized for procurement in order to avoid capability gaps.’ Chances are that the project, if it does not fall apart for technological problems or a tug-of-war over industrial leadership and patent rights, will at some point be abandoned for its costs.

FCAS scepticism is found not just in SPD and FDP. The incoming Foreign Minister, the Green chancellor-candidate-in-vain, Annalena Baerbock, is a faithful Hillary Clinton-type Atlanticist who managed to impose her views on the coalition document throughout. During the coalition talks, the Greens insisted on an early replacement of the Luftwaffe’s aging Tornado fleet with the American F-18 fighter bomber. Not to be confused with the Eurofighter, the Tornados are Germany’s contribution to what NATO calls ‘nuclear participation’ (nukleare Teilhabe). This provides for some European member states, above all Germany, to deliver American nuclear warheads with bombers of their own, with American permission and under American direction. (As far as one knows, the United States or NATO cannot formally command member states to nuke a common enemy, but member states cannot nuke an enemy without American authorization.) For the purpose, the United States maintain an unspecified number of nuclear bombs on European, in particular German soil.

Recently leading figures in the SPD have doubted the wisdom of nuclear participation. The United States for their part have complained about the Tornadoes, first put into service in the 1980s, becoming outdated, demanding more comfortable travel arrangements for their warheads. Currently the few remaining Tornadoes capable of flying – one hears, less than two dozen – stand to lose their (American) license to kill in 2030. Unless one lets the programme wither away, which is what some on the SPD left would prefer, the Tornadoes could in principle be replaced with the French Rafale or the German Eurofighter (both of which are to be replaced, in some nebulous future, by FCAS). It so happens, however, that to be capable of carrying American bombs, non-American planes have to be certified by the United States, which takes time, no less than an impressive eight to ten years. This brings in the F-18, which would be instantly available to inflict nuclear Armageddon on anyone any future POTUS might determine to be deserving of it. It so happens that the F-18 seems to be the favourite of the German military, desperate to preserve their reputation with their American idols and avoid the risks of French technological devilment.

To their relief, speedy procurement of a generously sized fleet of F-18s turned out to be one of the Baerbock Greens’ most unremittingly fought-for demands in the coalition talks. After acrimonious negotiations, they got their way. In the coalition agreement, in language fully comprehensible only to the initiated, the parties announced that they will ‘early in the twentieth legislative period’ – one has to use Google to find out that this is the legislative period now beginning – ‘procure a successor system for the Tornado fighter aircraft’ and ‘accompany the procurement and certification process objectively and conscientiously with a view to Germany’s nuclear participation’. The F-18 being far from cheap for a cash-strapped government, this is more bad news for Macron and his ‘European strategic sovereignty’. While the US won’t get their 2%, at least they get to sell Germany a fair number of F-18s. France, by comparison, is likely to end up empty-handed, getting neither a European army nor, ultimately, FCAS.

Read on: Wolfgang Streeck, ‘Plus Ça Change’, NLR 131.

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Strike Wave

Thirty-five years ago last month – October 1986 – the giant agricultural equipment manufacturer John Deere locked out striking members of the United Auto Workers. This event, following shortly on lockouts of meatpackers by Hormel Foods and steelworkers by USX (formerly and today again US Steel) signalled that the punishing waves of layoffs and plant closures of the early 1980s had not satisfied capital’s appetite for working-class blood. In 1959, the year of the previous nationwide steel strike, over half a million workers had walked out. By the time of the defensive action at USX in 1986, there were only 20,000 workers left to do so.

With manufacturing under severe profitability pressures, collective bargaining in the 1980s and 1990s became an orgy of so-called ‘givebacks’ – contract concessions that would have been unthinkable at almost any point in the previous half-century. The UAW, like much of the US labour movement, put up a fight, but eventually begged off. ‘What do you do?’ asked a union official. ‘You can’t control the actions of management.’ In February 1987, both UAW members at John Deere and steelworkers at USX trudged back to work, having accepted a deal with no wage increases in the first case and outright wage cuts in the second – both in return for job security commitments.

The bleeding went on. In 1997 the UAW signed a contract with John Deere that again gave no hourly raises and instituted a two-tier system, with decreased wage rates for new hires. Such structures proliferated across collective bargaining agreements as unions limped into the neoliberal era – evidently the price of survival for a battered labour movement hunted by Republicans and unaided by Democrats.

This month, the UAW settled with John Deere after five weeks on strike, an action launched when the membership rejected an agreement negotiated by union leadership, and renewed after two weeks on strike with the rejection of a second tentative agreement. The 10,000 John Deere workers finally agreed to the company’s offer, overall very similar to the rejected second agreement: a 10% wage increase in the first year, 5% in the third and fifth years, and 3% lump sums in the second, fourth, and sixth years, along with an immediate bonus of $8,500. While the settlement is clearly a victory marking the end of the concessionary years, it does not uproot the hated tier system that divides the workforce, nor get wages back on their pre-1997 trend.

Along with a dozen or two other recent, ongoing or potential labour actions, the John Deere strike forms what has been dubbed ‘Striketober’ – an unexpected revival in working-class militancy in its classic form. Unlike the wave of teachers’ strikes in 2018-2019 known as the ‘Red for Ed’ movement, the current episode spans all sectors: nurses recently settled a strike in Buffalo, coal miners are on the line in Alabama, hospital workers in the Kaiser Permanente health care chain on the west coast, musicians in San Antonio, graduate students at Columbia. Tens of thousands of Hollywood’s technical workers authorized a strike with 99% vote at 90% turnout, and only narrowly ratified a settlement instead by means of arcane electoral rules. Numerous others wait in the wings or have recently settled.

Such militancy represents the sharp, organized tip of a more diffuse phenomenon, the so-called ‘Great Resignation’: the quit rate has been driven to historical highs by the conjunctural combination of accumulated outrage at the workplace brutalities of the pandemic, plus increased working-class confidence and labour market leverage due to the emergency expansions of the social safety net and the recovery of employment.

Even as unemployment falls toward 4%, the labour force participation rate remains two points lower than before the pandemic, and does not appear to be rising: in other words, the uptick in wages and downtick in unemployment are not drawing more people back into labour markets who have decided or been compelled to exit them over the past two years. This fact has lent the current episode of refusal its generally atomized shape, due to the low level of organization across the working class – what would once have been strike action appears today more often in the form of unfilled vacancies. But it also helps to explain the trans-sectoral character of the organized workplace activity, particularly the centrality of overwork in many strikes, as employers calculate that it is preferable to force 12-hour shifts than to raise wages sufficiently to lure nonparticipants back into the workforce.

The weakness of much of the labour movement also has paradoxically created room for the ideological left to establish footholds, around which scatterings of militants may emerge – a subtle shift that deserves some credit for rising militancy across sectors. Once-marginal activist formations have proven able to gain ground within union organizations in teaching, nursing and across the culture industries; a democracy movement has emerged within the United Auto Workers, a union which has become a shadow of its former self, plagued at the top by corruption and incompetence. Most significantly, the rank-and-file reform slate recently captured control of the Teamsters away from the Hoffa dynasty in a landslide election.

While mainly due to the weakness of traditional conservative leadership, this is also in part a superstructural phenomenon. For example, rising militancy among journalists has caused a recovery in labour journalism, in turn magnifying the quantity and quality of images and narratives of labour struggle. Discursively, the labour movement commands attention once again from a broad liberal public that shunned it for decades, and while the significance of this development is difficult to estimate with any precision, its effects appear to be widespread in the current moment: unions receive more favourable responses in public opinion polling, and professional organizers across much of the country have reported anecdotally a significant increase in direct contact from disgruntled workers.

I was born the month of the last John Deere strike; I turned 35 during the recent one. Minimum-wage jobs going unfilled, assembly plant workers voting down contracts – these are new marvels in my lifetime. While it is possible to make conjunctural sense of this episode, the true challenge is to search out a strategic path by which such intensified engagement along what remains an exceedingly narrow front might widen into something more. The present strike wave, such as it is, is a matter of only tens of thousands, not the millions of earlier episodes of US labour history. Workers in the United States have been taught a hard lesson for years that collective action only yields punishment. The effect, over the past generation, has been two-sided, shearing apart the working class along its seams of organization and relative security: with union density down to 10%, union members look out on the millions all around who would gladly do their job for less and become resigned to ineffectual leadership and concessionary bargaining; the unorganized 90% see the inability of unions to deliver, and can make out little reason why they should say yes if an organizer ever comes knocking.

Over the past 35 years, labour’s technicians have tried every trick to get the wheels turning again. They installed new leadership, as when John Sweeney triumphed in the AFL-CIO’s first-ever contested presidential election in 1996, running on a promise to reinvigorate the federation’s organizing capacity and renew its taste for confrontation. They developed the so-called ‘comprehensive campaign’, a method for seeking leverage on employers by means other than direct economic power – most famously in the Justice for Janitors campaign of the late 1990s. They launched modest political adventures, founding groups such as the short-lived Labor Party, New York’s Working Families Party, and the Los Angeles Alliance for a New Economy. They engaged in mergers and divorces, combining unions and spinning off new umbrella organizations – most prominently the new federation Change to Win, formed by AFL-CIO breakaways in 2005. They launched major organizing campaigns in sectors from higher education to hospitals to hotels to Southern auto assembly plants. Some of these initiatives counted major successes, some degenerated into fiascos, but none generated movement on the scale of the class as a whole, or even a significant fraction. (The teachers’ strikes, arguably the only exception, occurred almost entirely as an organic expression of rank-and-file militancy and socialist leadership rather than any kind of leadership stratagem.)

What is the nature of the present fragmentation of the US working class? Paul Samuelson, high priest of the postwar neoclassical synthesis in economics, once speculated that the American stagflation problem of the 1970s would only admit a Chilean-style macroeconomic resolution at the point of a gun. An orthodox Keynesian, Samuelson – coiner of the portmanteau ‘stagflation’, uncle of Larry Summers – conceded that the Chicago Boys indeed had a solution that could tame inflation, but objected that such an exploit would require a ‘fascist political state’. Looking back on four decades of neoliberalism, we might say that, in certain respects, Samuelson’s hyperbole contained a kernel of prophecy. Certainly, there existed ample precedent in US history for such a campaign of repression, marking neoliberalism as more continuous with the country’s tradition of coerced labour than whatever novelty Samuelson imagined. Nonetheless, what came after 1979 cannot be understood in narrowly economic terms: the smashing of the labour movement was only the most targeted blow. Punishment rained down indiscriminately on the class as a whole, through political means as well as in industrial relations.

The first waves of mass industrial layoffs triggered a downward cascade in the labour market – the context in which industrial unions first agreed to concessionary contracts. Millions of individuals either relented to lower-wage work than they had accepted previously, or exited the labour market entirely and were thrown back onto family, the illicit and informal economy or the state for their survival. A radical increase in household labour supply followed, as women filed into fast-expanding low-wage service economy jobs to compensate for the vanished family wage, even as an assault on the social state continued to transfer the costs and pressures of social reproduction onto them. Largely, moreover, they joined sectors of the labour market already fenced off institutionally as a zone of low wages and precarious working conditions, particularly in what has come to be called the ‘care economy’, which accounted for 77% of all low-wage job growth for women between 1983 and 2007, as Rachel Dwyer shows.

Punitive social policy further eroded proletarian room for maneuver. After over a decade of state-level erosion of income support for the poor, Bill Clinton’s welfare reform pushed millions into the bottom of the labour market and, as Melinda Cooper observes, granted fathers automatic custody rights to children regardless of prior relationship – in effect terrorizing poor mothers off the welfare rolls and into minimum-wage work. If this were not enough, the apparatus of policing and imprisonment underwent its extreme metastasis in this period – not precisely what Samuelson imagined as the Chilean solution, but close enough.

Already, global competitive conditions and weakening labour law gave potency to managers’ threats of plant closure or subcontracted work. Even for organized workers, employers were equipped for an increasingly asymmetrical conflict, armed with the power to outsource their jobs or to permanently replace them during strikes. The full chain of implications of this power has grown as the surrounding labour market and social policy environment has become increasingly hostile: the power to permanently replace strikers or outsource positions became the power to push workers toward the unlivable minimum wage, throw them back into abusive relationships, and toss their children into cells. There is no need to lock up trade union leaders themselves if you can instead intimidate their members with the threat of criminalized unemployment – if walking out of the factory gates for the last time means walking into the jaws of the jailor. The form of struggle that results from this punitive dimension of the American class system is, obviously, racialized, and occurs more in the streets and prisons than in the workplaces.

Those parts of the expanding service economy shielded economically against capital flight are contained by other barriers, no less potent. Either because they enact labour processes that cannot be relocated due to the necessity of direct human interaction, or because they carry out functions of social importance that attract state support, workers in food service and hospitality, health care, child care and education are not buffeted by the same forces at play in much of the shrunken manufacturing sector. By the same token, however, the service industries are characterized by stagnant productivity, which presses down wages systematically and constrains workers’ leverage, in turn inducing employers to decompose the employment relation itself in order to hold labour costs down.

Such constraints impel workers to engage in political contestation of the social wage as the medium for their own industrial conflicts – as when teachers struggle over classroom sizes, nurses over staffing levels, or Uber drivers over the legal definition of employment. To some degree the productivity constraint has in this way also generated political potentiality, as workers in such circumstances discover they can only win economic gains on the political field, not in industrial conflict alone, and therefore must construct coalitions sufficient to engage broader policy questions – a strategy the labour movement has begun to explore under the name ‘Bargaining for the Common Good.’

The recovery of the labour market from the pandemic’s damage – renewing the belated and warped recovery from the prior crash in 2008 – has stimulated renewal of working-class militancy within the narrow confines of the organized zones, aided by temporary and partial expansions of the social safety net. But this stimulus is unlikely to translate directly into any kind of broader class unity at the social level or a renewal of class polarization within the political sphere, because it arrives in a working class so badly divided by forty years of defeats. Class formation, as Adam Przeworski observed long ago, is a discontinuous process. Its stops and starts lay down historical deposits that form into new conjunctures upon which disparate proletarian elements must again attempt to compose themselves, in the process he describes as ‘struggles about class’, which precede class struggles. ‘In each successive historical conjuncture, some carriers of the relations of production are organized as such, some are not organized in any manner, and some appear in struggles about class organization in forms that do not correspond in one-to-one manner to places occupied in even a broadly conceived system of production.’ The modest but noticeable rediscovery of workplace militancy in the organized rump of the US working class has occurred amid precisely such a discontinuity.

Classically it would have been the task not of the labour movement but of the socialist movement to bring into contact with one another the various struggling fragments – those who are organized as carriers of the relations of production, those not organized in any manner, and those engaged in struggles that do not correspond to any broadly conceived system of production, in Przeworski’s terms. The promising recovery of American socialism in the past decade is not to be made light of, but it too represents a distinct and delimited social stratum – the frustrated young professionals – and its primary points of encounter and affiliation with the broader working class have been in the electoral sphere rather than the more intimate zones of the social and economic.

This current strike wave, then will almost certainly ebb rather than accumulate the way the unrest of the early 1930s did. But even after it recedes, we will be able to see the pools it leaves behind – reservoirs of solidarity, consisting of material victories and new political experiences. These will occupy more of the terrain next year than they did last year; they will be, if still distinct, nearer to one another – and its examples nearer to hand.

Read on: Mike Davis, ‘The AFL-CIO’s Second Century’, NLR I/136.

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Picking Winners

The annual UNFCCC Conference of the Parties, which convenes the 197 states and territories which have signed on to the UN Framework Convention on Climate Change, is one of the anchoring events of climate politics discourse, alongside the release of IPCC reports and increasingly regular occurrence of climate-fueled natural disasters. Since the first was held in Berlin in 1995, when atmospheric carbon levels were around 358 parts per million (today they hover around 414), a steady procession of COPs have produced a great deal of geopolitical drama, but have not yet managed to reduce carbon emissions. 

In 1997 there was the fight over the Kyoto Protocol, widely criticized for concessions to the US insistence on market mechanisms; followed in 2001 by George W. Bush’s announcement that he would not implement it anyway. In 2009, many expected that Barack Obama’s election would clear the way for a legally binding agreement at COP15, in Copenhagen – officially branded ‘Hopenhagen’ by the UN. Instead, negotiations nearly collapsed over bitter disagreement between developed and developing countries, and eventually culminated in a weak deal brokered behind closed doors by Obama and Wen Jiabao. Six years later, the Paris agreement was hailed as a world-historic triumph, even though the voluntary commitments made by individual member states failed to add up to the agreement’s stated goals. As climate activists pointed out, and even the text of the agreement acknowledged, although the agreement set a goal of limiting global warming to ‘well below 2º C’, the aggregated commitments would result in an estimated 3º of warming. Nor were the Paris Accords complete: they dictated that signatories update their pledges five years later. This was the key task set for COP26 in Glasgow.

Although more people are paying attention to the COP process than ever before, there has also been a striking decline in public confidence. The years since 2015 have seen serious challenges to international action of many kinds. Trump’s withdrawal from the Paris agreement prompted subsequent acts of defiance from the likes of Bolsonaro, Modi and Putin, while the gilets jaunes protests against Emmanuel Macron’s gas tax prompted new anxieties about the backlash to climate policy. At the same time, rising tensions between the US and China have contributed to pessimism about the prospects for global agreement. The ‘Climate Behemoth’ – a reactionary alliance between right-wing populism and national fossil capital, schematized by Geoff Mann and Joel Wainwright – has gained popularity, countering the bid for planetary sovereignty they see represented in the COP process. Pledges aside, carbon emissions continue more or less unabated.

In many ways the circumstances of Glasgow recall the disastrous proceedings in Copenhagen: taking place in the aftermath of a world-shaking economic crisis, marked by protest and dissatisfaction, undercut by the failure of a US president to secure domestic climate policy. Even Greta Thunberg’s memorable description of COP26 as a place of talk and no action – ‘blah, blah, blah’ – was less novel than it initially appeared: ‘Blah, Blah, Blah, Act Now!’ had already adorned signs at the Copenhagen protests in 2009. On the uselessness of the talks, Thunberg and the world leaders she indicts likely agree: Xi and Putin did not even bother to attend.

By the conclusion of the conference, a few new agreements had materialized, although most came with caveats. Twenty nations agreed to stop financing global oil and gas projects abroad, although most continue to subsidize oil projects at home – echoing the G20’s commitment to stop financing coal plants internationally, even as member countries continue to use coal domestically. A hundred countries, led by the US and EU – but excluding China, India and Russia – pledged a 30% methane reduction by 2030. A hundred and forty-one countries agreed to stop and reverse deforestation by 2030 – although Indonesia, where primary forest has decreased by approximately 50% since the 1960s, immediately backtracked, calling the terms ‘inappropriate and unfair.’ The US, France, Germany, EU and UK struck an $8.5 billion agreement to help South Africa transition away from coal use – important in its own right, but perhaps even more so as a potential demonstration of the feasibility of a ‘just transition’. Most incredibly, the text for the first time in the history of the COPs includes the words ‘fossil fuels’.

But even most boosters have been forced to admit that Glasgow was a disappointment. By now the problems with the COP process are well-canvassed, ranging from the features of its institutional design to the nature of national sovereignty. The consensus model tends to result in a lowest common denominator approach to agreement. Countries set their own decarbonization goals, but also report their own progress towards them; unsurprisingly, a Washington Post report recently found that progress towards decarbonization is seriously overstated. Absent a global sovereign, there is no way to compel action, even when agreements are reached.

So be it, many would say: too much time has been wasted on global diplomacy when real progress is being made elsewhere. The conventional wisdom on climate politics is shifting away from the need for grand global agreements focused on climate specifically, and instead emphasizing the potential for addressing climate change with economic mechanisms: industrial policy, trade agreements, global finance. This is, in many respects, long overdue. In spite of the massive fossil fuel delegation and distasteful corporate pavilions, COP26 is not really where important investment decisions are made. The UN’s array of environmental agencies has always been a shadow to the fora where global capital makes its rules.

Advocates of green industrial policy in particular challenge the ‘collective action’ framework, suggesting that climate action is no longer a cost to be shouldered, and that free-riding is no longer the central problem to be solved. Rather, the ‘energy transition’ offers benefits in the form of industrial renewal and jobs: instead of shirking their commitments to decarbonize, states will compete for green market share.

The promise that a brighter green future is just around the corner is another familiar refrain of climate politics: back in 2011, for example, Obama promised to ‘win the future’ with investments in ‘innovation.’ But what is genuinely different about this COP is that the private sector is lurching into gear. The recent rash of corporate net-zero pledges and surge of ESG (‘Environmental, Social, Governance’) funds should not be taken at face value, of course. But Chinese state investment in low-carbon technologies, and solar panels in particular, has catalyzed the renewable energy industry and set a challenge to Western governments.

The hope of industrial policy advocates is that the US, EU, and China will compete for the green tech market – at least, the sectors which China does not already dominate – setting off a virtuous circle of competition amongst green capitalists. Politically, state support for fledgling green tech industries is expected to generate constituencies for decarbonization which can serve as a counterweight to the entrenched power of fossil capital. Green industrial policy advocates tend to flatten the differences between labour and capital, suggesting that the central axis of conflict is between carbon-intensive and decarbonizing coalitions, even as clean-energy darlings like Tesla union bust. It is a view which puts most stock in the power of one fraction of capital to counter another; popular mobilization and labour strife feature primarily as threats to stability to be warded off. Joe Biden’s pair of infrastructure bills, for example, take cues not from the public investment-driven Green New Deal of Alexandria Ocasio-Cortez but from the innovation-oriented Green New Deal of the late 2000s, as outlined by Thomas Friedman and Edward Barbier. The model, which targets subsidies at strategic sectors like clean hydrogen production and carbon capture and storage, is more Silicon Valley than the Tennessee Valley Authority.

Focused on production in one country, industrial policy frequently relies on a methodological nationalism which neglects the global interdependence of contemporary production, while frequently threatening to tip into a more overtly political nationalism where convenient: this is a vision of climate policy that can coexist with, and perhaps even benefit from, increasing antagonism between the US and China. The key elements of its international policy are not grand global agreements but trade deals like the recent US-EU agreement to reduce steel tariffs and incentivize the production of ‘green steel’.  

Industrial policy oriented towards boosting ‘green tech’, however, has limits as climate policy. It does little to directly reduce fossil fuel use, prevent the construction of new fossil fuel infrastructure, or even directly reduce carbon emissions. It also faces political obstacles of its own. The tariffs and subsidies necessary to nurture emergent domestic industries are likely to garner objections from the WTO. A state which takes a more active role in ‘picking winners’ will face familiar challenges of domestic distributive politics. At the same time, as Cédric Durand has argued in Sidecar, by failing to undertake more substantial planning, states risk a slower and more disruptive transition away from fossil fuels. Meanwhile the still-powerful fossil fuel industry will seek to turn any stumbles to its advantage, as Adam Tooze warns.

From the perspective of many of those gathered at COP26, however, what is perhaps most concerning about the shift to green industrial policy is that it bypasses the many parts of the world which have little hope of competing with the big industrial powers on green tech. There will be ripple effects down the supply chain, of course. Some countries will garner new interest in minerals like lithium and cobalt. Those with relatively intact forests may be able to sell carbon offsets to help multinationals meet their net-zero promises – nearly all of which are currently premised on carbon removal in some form. But many other parts of the world will be surplus to the ‘green economy’, except as consumers of the products it generates. It has long been hoped that developing countries would be able to ‘leapfrog’ fossil fuels altogether and move straight to renewable-powered electricity. The countries most in need of electrification, however, are typically faced with high borrowing costs – a problem which bears directly on the energy transition, since renewable energy infrastructure is often more capital-intensive than coal-fired power plants. The problem of access to finance is made still worse by the fact that, as Kate Mackenzie observes, countries deemed to have a high ‘climate risk’ must pay more to borrow.

There was much talk about climate finance at COP26. But for economist Daniela Gabor, what it revealed was simply ‘status-quo financial capitalism entering its green age’ rather than any more transformative project. The response to Covid-19 spurred talk of the ‘end of neoliberalism’ and the return of the interventionist state. But the response to climate change thus far suggests a less dramatic reorientation: as Gabor observes, thus far the role marked out for the state in climate finance is not to undertake public investment but to ‘derisk’ private investments in green sectors.

A different response to the dead end of the COP process, then, would be to make a lateral move, taking climate justice to the global financial institutions. The political scientist Jessica Green argues that international trade and finance ought to replace the UN framework as the ‘locus of climate policy’, while also calling for major reform to global financial institutions. The problem is figuring out how such long-sought reforms might come about. Labour and environmental movements in countries with valuable minerals or powerful industrial sectors may be able to exert some influence over trade deals, as United Steelworkers did in the US-EU steel agreement. The global reach of green supply chains offers the possibility for more internationalist organizing, as Thea Riofrancos has argued. But the prospects for reform of global trade and financial institutions are hazier.

The global climate justice movement has undoubtedly spurred a change in the conversation. But at present, it simply does not have the power to realize its goals. At COP26, climate justice activists criticized the failure of developed nations to make good on their commitment to spend $100 billion annually on climate finance – a sum agreed on in 2009 in an attempt to salvage the Copenhagen talks. Yet the more ambitious demand, both then and now, is for a framework for loss and damage, which would require open-ended funding for harms incurred as a result of climate change – something which might come close to climate reparations. The argument in favour of it is morally unimpeachable. But it is hard to see what could force the US or EU to agree to a programme that would expose them to liability claims long into the future.

Lacking leverage, the movement has resorted to the tools it has available: spectacle, and, most notably, shame. This year, the foreign minister of Tuvalu, Simon Kofe, gave his COP26 speech knee-deep in ocean waves to symbolize the threat that rising seas pose to his island nation’s existence. This, too, recalled a previous moment of COP politics, in 2009, when President Mohamed Nasheed of the Maldives held an underwater cabinet meeting prior to the ill-fated meeting in Copenhagen. But if the power players at COP26 have learned to speak the language of climate justice, they have so far remained shameless. Andreas Malm has called for a reevaluation of tactics, arguing that the climate movement must become more combative. Different tactics may help disrupt business as usual – but they are unlikely to solve the fundamental problem of power.

As climate policy is finally incorporated into economic policy, whither the COP process? The COP cycle will continue. But it seems increasingly likely to be an afterthought: a forum where countries with no chance of competing on green tech or being invited to G20-like summits do what they can – which is to say, not very much – to extract concessions from the rich and powerful countries which have built their wealth on ecological destruction, and which are now using that wealth to escape its consequences. In other words, not so much an emergent global sovereign as a charity fundraiser.

Lola Seaton, ‘Painting Nationalism Green?’, NLR 124.

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Rebel Maids

The Brazilian cartoon series Irmão do Jorel offers a cosy-satirical picture of family life, not unlike The Simpsons. Strikingly, however, there is a character with no homologue in the US series: the family’s maid, represented as a purple octopus – amorphous, voiceless, nameless, with eight arms ready to carry out any task requested of her (for a representative episode, see here). The Brazilian entertainment industry has many such images. From blackface turns on TV comedy shows to the maids who form a girl band in the hit telenovela Cheias de Charme, representations of domestic workers pervade the country’s cultural imagination.

Beyond the culture industry, paid domestic work is a daily reality for nearly 6 million Brazilian women, as well as for the millions of households that employ them. It is an occupation strongly marked by the sexual and racial division of labour: 92% of those employed in this category are female, and two-thirds of the latter are black. Restricted to the private sphere, the actual experience of this work has been atomized and largely invisible.

Despite the prevailing silence in Brazil’s public sphere about the realities of domestic work, domestics played a leading role in the 100,000-strong March of Black Women against racism and violence in November 2015. In 2016, a rapper and former maid, Preta-Rara, shared some memories of her time in domestic service on Facebook and was flooded with responses from other domestic workers. The page she set up for them soon garnered thousands of personal stories, from multiple viewpoints – giving voice to the experiences of Brazilian domestic workers in a way that cold official statistics could never do.

In 2019 Preta-Rara – real name, Joyce Fernandes; preta rara translates as rare or precious black girl – produced a compilation of these social media accounts in a book, Eu, Empregada Doméstica (I, Domestic Servant) with the subtitle: ‘The Maid’s Room is the Modern Slave Quarters’. It opens with the story of her grandmother, Noêmia, who began work as a maid at the age of fourteen. Preta-Rara’s mother, Maria Helena, followed the same path, and tells her daughter of the lasting trauma left by never having been taught to read or write. (Preta-Rara herself later made it to college and has taught high-school history, in addition to her music – her first album, Audácia, appeared in 2015 – and establishing a major social-media presence.)

Though some of the stories collected in Eu, Empregada Doméstica recall humane employers, the structural situation of the work means that exploitation is standard. Many depict psychological humiliations: accusations of theft, sexual harassment, moral harassment, effective imprisonment, occupational diseases and chronic exhaustion. Women recall being sent off in their early teens to work in strangers’ houses. Younger children, accompanying their mother to work when there is no one to watch them at home, get mistreated by employers or bullied by their children. Domestic workers often make huge sacrifices to help their children, especially their daughters, avoid going through the same experience. Access to education is frequently seen as the key to change – sometimes provoking mockery and disbelief from their employers. Escape from exploitation and subordination requires enormous individual effort and resources.

Preta-Rara herself recalls the indignity of being forced to use the ‘service’ lift in an apartment block, and to climb eight flights of stairs when it was out of order, because maids were not allowed to use the ‘social’ elevator. A common response emerges, when domestic workers are pushed to their limit: ‘Never going back to that place again.’ It is a phrase that occurs over and over in the contributions, a series of one-woman strikes against an intolerable situation, now brought together by Preta-Rara in collective form.

Nancy Fraser has analysed the heightened contradictions of ‘capital and care’ under today’s form of financialized capitalism, as neoliberal pressures put a squeeze on essential forms of material and affective reproductive labour – birthing and raising children, maintaining households, sustaining personal and community relationships. She argues that every form of capitalist society harbours a deep-seated crisis tendency, as capital’s drive to unlimited accumulation – free-riding on the life world, as she puts it – tends to destabilize the reproductive processes that are indispensable to the perpetuation of society itself, without which there can be ‘no culture, no economy, no political organization’.

For Fraser, these contradictions take different forms in the core and on the peripheries of world capitalism, as also across successive eras or ‘regimes of accumulation’: 19th-century liberal imperialism and colonial extraction; mid-20th century welfare-state Fordism and third-world developmentalism; 21st-century neoliberal globalization. Each, she has argued, produced its own asymmetrical fix for staving off the contradictions of capital and care: the ‘separate spheres’ gendering 19th-century bourgeois life, the expanded welfare provision and male breadwinner of Fordism, the two-earner families of neoliberal emancipation. Each fix in turn entered into crisis. The latest manifestation of this tendency in the US is the ‘crisis of care’ – time poverty, family-work balance – already attracting attention even before the reproductive catastrophe of the global Covid-19 pandemic.

Yet the Brazilian experience – and perhaps, more broadly, that of Latin America – alters this picture. The stories collected by Preta-Rara speak not of epochal ruptures in forms of reproductive labour, but of intergenerational continuities. ‘Almost all women in my family started their lives as domestic servants’, one woman wrote. ‘My grandmother was enslaved – because that’s the right word – from childhood. My mother started to work as a family’s nanny when she was a teenager. My aunt has asthma attacks brought on by excessive work with chemical-cleaning products’.

‘Breaking the cycle of misery to which we were subjected is an arduous task’, wrote another. ‘It means fighting against everything and everyone. My grandmother worked all her lifetime in the fields, my mother was a maid, and I followed in her footsteps. Going against all of this leaves scars, physical and on the soul.’ At stake here are historical continuities traceable back to slavery – the connection Preta-Rara underscores with her subtitle, identifying the maid’s room as the slave quarters. Some of the social media narrators use the colonial term sinhá – ‘madam’ – to refer to their employers. Another makes the same link: ‘I’m always thinking that, if the memory [of paid domestic work] hurts me, I can imagine it must have hurt my mother and my grandmother much more, because, even allegorically, they had to bear the “lash” so that we could eat bread.’

As noted by the Brazilian social scientist and activist Lélia Gonzalez, to understand the place of black women in Brazilian society today, we need to examine their role under slavery. Gonzalez – herself the daughter of a black maid – summarized the historical role of the black mucama: ‘It was her task to keep the master’s house running at all levels: washing, ironing, cooking, spinning, weaving, sewing, and nursing the children born from the “free” wombs of the little senhoras… And after the heavy work at the master’s house, she was also responsible for taking care of her own children, as well as helping her friends who had come from the plantations, etc., who were starving and exhausted.’ The Argentine anthropologist Rita Segato has emphasised the longue durée nature of this ‘transferred motherhood’ in Latin America, dating from the onset of colonialism. It has been naturalized over the centuries by serial cultural forms, predecessors of the purple octopus in Irmão do Jorel.

The developmentalist era in Brazil brought many changes, but – pace Fraser – the underlying role of black women in social reproduction continued throughout. If anything, young girls were dispatched from the interior in greater numbers to work as maids in the booming cities. The social media stories illustrate this process well: ‘My mother comes from a tiny hinterland village and was sent to the capital to work at the age of thirteen’ is a typical beginning. This ‘national care chain’ – the internal migratory flow of girls and women from the Brazilian backlands to the cities, which peaked at the height of the ‘rural exodus’ of the 1960s-80s – has its equivalent in the ‘global care chain’ of which Fraser and others also write: the pull of globalized financialized capitalism inducing the emigration of racialized women from poor countries to undertake social-reproductive work in rich countries where, with the onset of the long downturn and collapse of the ‘male breadwinner model’,  women were heading into waged white-collar work.

Brazil is certainly part of the migratory flow of the global care chain, in keeping with its middle-ranking position in the world economy. Immigrant domestic workers are, for example, Bolivian, Haitian, Venezuelan and Filipina women, whose migratory condition intersects with racial, class and gender rankings. Brazilian women, on the other hand, mainly emigrate to the Global North, especially the United States and Western Europe.

How to explain the continuities in Brazil’s social-reproductive order, compared to the successive regimes that Fraser analyses? Here it may be helpful to draw upon the notion of colonialidad developed by the Peruvian world-systems theorist Aníbal Quijano, who pointed out that ruling classes in early 19th-century Latin America battled to prevent the decolonization of their societies even as they fought for independent states. Through this dynamic, the ‘coloniality of power’ was incorporated into the state-formation process itself. The sexual and racial division of paid domestic labour, and its historical continuity with practices dating from the colonial and slavery periods, underlines the relationship between social-reproductive relations in Latin America and this foundational hierarchy. In this context, the ‘care gap’ is not a recent process. It is a dynamic inscribed in the very ‘coloniality of power’.

Thus, paid domestic work is both an expression of the structural inequities within Brazilian society and the perpetuation of them. Its availability at a low cost for Brazilian middle and upper classes lessens the potential pressure for welfare-state measures aimed at supporting socio-reproduction activities – day-care centres, full-time education, community restaurants, community laundries and care centres for the elderly. As Rita Segato puts it in Crítica da Colonialidade em Oito Ensaios (2021), the continuity of women’s invisible low-paid work allows an ‘evasion of social-sector investment’.

It also dissipates tensions within middle and upper-class families, where women’s ‘double shift’ of domestic labour is alleviated, as well as the demand that their partners and other family members do their share. As the American sociologist Patricia Hill Collins argued in Black Feminist Thought (1990), historically many white families in the US similarly maintained their class position because they used black maids as cheap labour. At the same time, the delegation of domestic work tends to intensify racial and class inequities, accentuating the polarization between women, especially between domestic workers and their female employers.

Brazilian domestic workers have been particularly hard hit during the Covid pandemic, given their fragile or non-existent social protection. They were torn between continuing to work at high risk of infection or stopping work and losing their income. Nor were they given priority-worker status for the vaccine.

The aggravation of precarious social conditions suggests to some that we are moving forward towards the past. In Critique of Black Reason (2013), Achille Mbembe argued that the world is becoming nègre, as capitalism accentuates the exclusion, alienation and degradation of workers in general. From another perspective, the question of care provides a route to the future. For the Madrid collective Precarias a la Deriva, care should be a guiding principle in all political-economic considerations. Fraser argues that struggles over social-reproduction – encompassing housing, healthcare, food security, migrants’ and workers’ rights, day care, elder care, paid parental leave – are ‘tantamount to the demand for a massive reorganization of the relations between production and reproduction’.

Care and social reproduction are also central to movements such as Quilombismo and Bien Vivir, which focus on social practices based on cooperation, solidarity and equality. Production and reproduction go hand in hand in these radically democratic projects. Everyday resistance takes place in multiple ways, even if it is just to say, ‘Never going back to that place again.’ Certainly, Brazilian society will never be emancipated unless domestic workers are emancipated too.

Read on: Guilherme Boulos, ‘Struggles of the Roofless’, NLR 130.

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Zero-Sum Game

In my recent Sidecar piece, I developed the argument that economic disruptions unleashed by surging energy prices – especially in the gas market – can be connected to state climate policies. Adam Tooze, responding in his Chartbook #51, challenges this so-called ‘energy dilemma’ thesis. What Tooze rejects unambiguously is the theory that Western fossil fuel corporations have priced the prospect of climate related policy changes into their investment behaviour, and that this has contributed to the tensions on the supply-side that came to the fore this autumn. While I agree that stronger evidence is needed to reach a definitive conclusion, I nonetheless have several reservations about Tooze’s essay.

In the context of the current crisis, the term ‘energy dilemma’ was coined by Lara Dong, an analyst for the consulting firm IHS Markit, who explained how Chinese authorities have struggled to balance environmental concerns over coal with the need for energy security. Yet this is not a new idea. It can be traced back to the 1970s, when experts became increasingly aware of the tension between achieving affordable and reliable energy provision and limiting the detrimental impact of growing fossil fuel consumption. In 2010, the geographer Michael J. Bradshaw produced a systematic formulation of the dilemma in ‘Global Energy Dilemmas: A Geographical Perspective’, asking: ‘can we have the energy necessary for economic development and, at the same time, manage the transition to a low-carbon energy system necessary to avoid catastrophic climate change?’

Tooze, in his piece, presents the ‘energy dilemma’ thesis as follows:

The canard that continues to circulate is that the supply shortfall is directly connected to climate policy. Too much talk about net zero has discouraged fossil fuel investors, resulting in lower investment, restricted supply and vulnerability to demand shocks.

His creditable aim is to prevent this narrative being used to postpone the green transition. However, it is worth noting from the outset that the definition he presents is a narrow one, limited to the supply constraints that arise from waning private investment in fossil fuels precipitated by climate policies and related discourses. For Tooze, there is an energy dilemma only when climate policies exert an ‘indirect effect’ on private investment that results in limited supply and translates into systemic fragilities.

By contrast, building on Bradshaw’s perspective, ‘energy dilemma’ can be used to refer more broadly to the crisis tendency of capitalism driven by climate policymaking. That is, a dilemma occurs whenever climate policies hamper economic growth. This includes the direct effects of public regulation on economic actors’ operations (in particular, the impact of climate legislation on production, funding activities and consumption patterns) as well as the indirect effects of policy changes – or anticipated ones – on private investment. These elements are closely intertwined. Since both direct and indirect effects place constraints on the supply-side in terms of rising costs or reduced investment opportunities, their outcomes are similar: a cascading effect on volumes, prices and profitability that impacts growth patterns, either directly or via the financial system.

With this broader interpretation of the energy dilemma – in which both direct and indirect factors contribute to a crisis dynamic unleashed by climate policymaking – much of the evidence cited by Tooze does not contradict my thesis but rather confirms it. Take the case of China’s energy crisis. Tooze writes that ‘There is no doubt that deliberate decisions by Beijing to regulate coal-fired electricity generation played a key part.’ Although other details must also be considered, in the context of booming demand a straightforward energy dilemma causality is discernible: binding targets for energy consumption and coal use = energy shortages = manufacturing disruptions and blackouts. This process ‘plays out transnationally and by way of the spillover of Chinese supply constraints both from coal and low-carbon sources, to global LNG markets’ – an observation which appears to give the energy dilemma framework a global dimension, showing how tentative steps in the direction of carbon transition in China fuel tensions on international markets that reverberate in the rising cost of gas, particularly in Europe.

Tooze correctly points out that the attempt of EU authorities to limit their reliance on Russian gas has backfired. The building of oversized LNG storage capacities subsidized by public money in Europe was intended to set up a credible alternative to Russian supply in order to extract cheaper prices from Gazprom. But this integration into global LNG markets has ended up increasing the vulnerability of the region to gas price surges. The internal difficulty of the energy transition is thus compounded by direct exposure to the repercussions of China’s energy metamorphosis. Moreover, Tooze writes that in 2021 ‘the green factor finally does enter the European story’ since ‘a surge in the price of emissions permits in the EU-ETS’, in addition to rising coal prices, prevented European operators from switching back to generating electricity from coal. Here, climate policy directly restricts the possibilities to mobilize cheaper options which would defuse cost pressure – another iteration of the energy dilemma that Tooze purportedly rejects.

However, although many of Tooze’s examples fit within a more broadly conceived energy dilemma framework, the overall thrust of his argument is distinct. He asserts that the dramatic fall in fossil fuel investment since 2015 is not a consequence of climate policies and campaigns but of falling energy prices, themselves related to the American shale-gas revolution of the early 2010s. It is worth interrogating this point further. Focusing on the coal-gas-renewable conundrum in Western countries, we must understand the extent to which the current misalignment between supply and demand is due to decreasing investment in coal, insufficient increase of renewable supplies and/or insufficient investment in gas to bridge the gap – and how climate policies have influenced these interlocking issues.

On this very complex question, Tooze makes two claims. The first is that divestment from coal was mostly driven by a loss of competitiveness vis-à-vis alternative sources of power generation, especially gas. This was clearly a decisive factor in the short-term, but it would be reckless to dismiss the significance of longer-term financial assessments informed by government climate pledges and civil society pressure on investors. For instance, Magnus Hall, CEO of Vattenfal, explained that his company decided in 2016 to divest from coal-fired power generation in Germany for both short-term economic reasons and longer-term prospects related to climate policy:

society is becoming less and less accepting of coal-fired power generation. And there is an economic truth: it is becoming increasingly difficult to make money from coal in Europe. For our part, we sold our mines and power plants because we knew that these assets had become too risky financially.

Tooze’s second claim concerns the ambiguous position of gas supplies. While the use of gas has grown as a substitute for coal – in part because it is a more flexible complement to renewables – investment has increased in the development of LNG infrastructure for imports. However, production has also decreased in Europe and investment in US shale-gas has slackened. Tooze tries to explain the rationale for this slowdown:  

If there is a force holding back new investment in America’s shale industry today, it is not government climate policy, but the insistence by Wall Street that the shale industry actually pay out dividends rather than plowing back its earnings into new drilling.

There are good reasons to doubt this argument. In fact, from the point of view of capital, not investing – or divesting and distributing profits to shareholders – is a logical way to hollow-out a business without a future. In that sense, the financialization mantra, ‘downsize and distribute’, becomes one way to retreat from fossil fuels and reallocate capital to other sectors. Consistent with this, we observe a marked relative devaluation of the Oil & Gas firms’ market capitalization relative to other sectors in the course of the last decade (Figure 1), reflecting investors’ move away from carbon stranded assets and anticipation of deteriorating prospects. The Wall Street Journal likewise acknowledges that ‘Concerns about long-term demand are exacerbating the oversupply of fossil fuels, and companies say they have become more selective about where they invest’, contributing to one the worst-ever write-downs in 2020. All this can be read as evincing a clear – if dramatically insufficient and untimely – shift away from fossil fuel which, in specific segments of the market and amid booming demand, contributed to the recent shortages in coal, gas and electricity generation.


Figure 1. All-World index versus Dow Jones Global Oil & Gas index: last 10 years (FT.com market data)

Tooze states that ‘What 2021 exposes is that the green push since 2015 has been enacted against the backdrop of a regime of low energy prices set by the price collapse in 2014.’ By green push, he means the fact that the replacement of some coal supplies with relatively cleaner gas was supported by a favourable evolution of their relative prices. The big picture is that this is not a viable pathway for green energy, due to methane emissions and underreporting of leakages which suggest that natural gas could be more environmentally destructive that previously thought. However, as far as the energy dilemma debate is concerned, the dividends of a price environment favourable to a shift away from coal simply adds more weight to the idea that the costs of the adjustment are real. Although they were postponed for a couple of years, they are now abruptly manifest.

In this sense, it would be unreasonable to exclude the energy dilemma from our analysis of the present conjuncture. There are straightforward and precise connections between energy market turbulence and climate policies in China and in Europe. The temporary increase in coal supply in China to defuse economic tensions testifies to at least a short-term trade-off between emissions and economic growth. It may be difficult to disentangle the role of low prices from the longer-term decline in private fossil fuel investment since 2015; but we should not dismiss the idea that the latter was partly driven by gloomy forecasts for the sector based on anticipated climate policies. High payouts to shareholders and declining market capitalization can, indeed, be read as symptoms of such forecasts.

Tooze rightly suggests that energy companies are responsible for the myopia concerning the evolution of demand patterns that resulted in insufficient investment in energy. The fact that global investment in renewables and energy efficiency has actually declined since 2015 is indicative of the sector’s lacklustre engagement with decarbonation efforts. Yet although these companies bear collective responsibility, the issue is also systemic. It reveals a deeper coordination problem that enterprises cannot handle via market mechanisms alone. The energy dilemma thesis is in this sense consistent with the IEA’s repeated warnings about the coordination challenges related to the transition, and their exacerbation by slow and inconsistent policymaking:

As the world makes its much-needed way towards net zero emissions, there is an ever-present risk of mismatches between energy supply and demand as a result of a lack of appropriate investment signals, insufficient technological progress, poorly designed policies or bottlenecks arising from a lack of infrastructure.

At present, shortages of coal and gas coincide with booming demand, but if renewable production rapidly expands, electrification accelerates and/or energy consumption significantly slows, a collapse of fossil fuel prices is possible. In spring 2020, oversupply of oil resulting from the pandemic lockdown pushed US prices into negative territory. Further decreases may occur when fossil fuel producers compete to valorize the last sellable resources in a world shifting beyond carbon. However, even if such price slumps take place amid an energy transition, their wider context will be rising costs driven by expensive investment efforts and the deadweight of carbon-asset legacies.

Tooze and I agree on the limits of the price mechanism to guide the green transition and the necessity of macroeconomic planning. When it comes to the energy dilemma question, I sympathize with his reluctance to give fossil-interests any argument that could be used to postpone further greenhouse gas reduction. Yet we must also resist the delusion that crisis tendencies related to climate policy are not at stake. A smooth transition beyond carbon is no longer an option. There is no Pareto-efficient way of eradicating fossil fuel use in a timeframe compatible with the prevention of climate disorders. A zero-sum or even negative-sum game is in play, which means that some parts of the population will bear the cost of the adjustment more than others.

This looming distributive conflict puts drastic constraints on class compromises. At this stage, I do not see what should prevent a large progressive front from rallying in favour of restrictions on the avoidable emissions related to the consumption patterns of the ultra-rich. A class-biased punitive ecology could become an effective means to stop ecologically perverse expenditure from rebounding onto the poorest. It could also be a stepping-stone to broader social mobilizations. Crucially, the primary implication of the crisis tendency is not the impossibility of humanity to handle the challenges of the energy transition, but the additional barriers to collective agency erected by the imperative of capital valorization. Subordinating profit-making to rapid decarbonation is, in my view, a price worth paying for the cause of climate justice.

Read on: Cédric Durand, ‘In the Crisis Cockpit’, NLR 116/117.

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Ortega’s Synthesis

On 7 November, Nicaraguans went to the polls for the first time since the dramatic spring of 2018, when the country experienced a sustained insurrectionary challenge to president Daniel Ortega’s Sandinista administration. Ortega stood for a fourth consecutive term with no viable opposition: the only other candidates were from marginal government-aligned parties. The dearth of challengers was a result of the Sandinistas’ unrelenting campaign of repression, which intensified in recent months to include the jailing of nearly every announced or anticipated anti-Sandinista presidential candidate, as well as a slew of other political and civil society leaders. Voters sympathetic to the opposition abstained from the election, rallying around slogans like Mi candidato está preso (‘my candidate is in jail’). Predictably, Ortega’s ticket, which also includes his wife and incumbent vice president Rosario Murillo, won a clear majority of votes: about 75%, according to the Supreme Electoral Council.

The 1979 Nicaraguan revolution, which issued in the first Ortega-led government, still occupies a totemic position for many socialists around the world. Arriving in the twilight of the Cold War, the Sandinista triumph promised to revitalize the global left, still reeling from the disappointments of decolonization and the failure of the Soviet experiment. But as international interest in the country receded following the Sandinistas’ surprise electoral defeat in 1990, the chasm between Ortega’s heroic image and political realities in Nicaragua grew ever wider.

Now, with pro- and anti-Ortega factions presenting sharply divergent interpretations not only of the 2018 civic rebellion, but also of the political character of his administration, reasoned debate on Nicaragua has become increasingly elusive. Unless the contradictions of the Sandinistas’ programme can be resolved, another period of unrest is likely to erupt during Ortega’s next five-year term. In this context, it is vital for internationalists to clear the fog of the Cold War and look with fresh eyes on the political-economic coordinates of 21st-century sandinismo.

The neoliberal period (1990-2006) left 70% of Nicaraguan workers unabsorbed by the formal labour market, prompting waves of popular protest in which Ortega, as leader of the opposition, played a prominent role. At the same time, by the mid-2000s a new class fragment had taken shape. An ascendant business sector – including a number of millionaire investors with revolutionary pedigrees, like Ortega himself – now chafed against the thin layer of hyper-wealthy families that had controlled the country’s export economy since the dictatorship era (1936-1979).

Ortega’s return to office in 2007 was, in large part, the fruit of an opportunistic power-sharing agreement struck by the Sandinista National Liberation Front (FSLN) and its historic rival, the Liberal Constitutionalist Party (PLC). But it was also a rejection the Washington Consensus which coincided with the Pink Tide then cresting in Latin America. In Venezuela, Bolivia and Ecuador, left-led governments were preceded by disruptive social movements that provoked crises in the national political system. Unlike Chávez, Morales and Correa, however, Ortega never promised to deliver transformative change by using the state to meet the demands of grassroots activists. Rather, Ortega pitched himself to both political elites and the wider public as the only figure capable of stabilizing the country’s political system by containing disruptive social conflicts within the state itself. (In this way, he bears a striking similarity to Lula in Brazil – another outsider among the Pink Tide cohort.) 

From the outset, the Ortega synthesis was an unstable class compromise in which the interests of private employers and un- and informally employed workers were sutured precariously together. This contradiction crystallized in the president’s vision of 21st-century Sandinista developmentalism. With one hand, the state extends generous social welfare programmes to unemployed and informal workers, whom it identifies as the protagonists of national development; with the other, it guarantees the acquiescence, and continued investment, of private employers by enhancing the conditions of exploitation in the wage-labour sector, for instance by restricting formally employed workers’ ability to organize.

The day after his inauguration in 2007, Ortega announced Nicaragua’s enrollment in the Bolivarian Alliance for Our Americas (ALBA), an incipient economic bloc, led by Venezuela, which sought to resist US hegemony through regional economic cooperation. This new relationship pleased Nicaraguan producers by opening up the Venezuelan consumer market to their exports. For a time it also provided the Nicaraguan state with a reliable source of foreign aid; in 2014, Venezuelan assistance provided Nicaragua with almost a fifth of its annual budgeted income. The Ortega administration used that revenue to fund a range of means-tested welfare programmes, typically targeted at the jobless or informally employed, which provided direct grants of cash, construction materials and agricultural inputs to tens of thousands of poor households.

When Ortega first governed during the 1980s, the Sandinista revolution faced vehement opposition from Nicaraguan elites. When he returned to power in 2007, however, Ortega brought business associations – notably the Superior Council of Private Enterprise (COSEP) – into government in official advisory roles, while also satisfying domestic investors’ demands for tax reductions. Exploiting the FSLN’s historically strong influence in the labour movement, the Ortega administration established tripartite agreements between the state, employers’ associations and Sandinista-aligned labour federations, minimizing conflict in nearly every industrial sector. The arrangement particularly benefited employers in the free trade sector, which during the 1990s and 2000s had been roiled by strikes and walkouts. New maquila factories proliferated during Ortega’s first term, and by 2012 the free trade sector employed one in six formal sector workers in Nicaragua.

The short-term economic effects of the Ortega synthesis raised eyebrows the world over. GDP expanded by 74% between 2006 and 2014, bringing Nicaragua into line with regional growth rates. Foreign direct investment, much of it aimed at free trade zones, grew at an annual rate of 22% during the same period. But the most impressive figures measured the country’s reduction in poverty. In 2005, the year before Ortega’s election, 48.2% of Nicaraguans subsisted on less than two US dollars per day; by 2017, that number had fallen to 20.1%.

Yet these achievements were never a pathway to socialism, nor even to sustainable developmentalism. Contemporary sandinismo triaged neoliberalism’s unruliest effects by maintaining, through targeted welfare grants, the livelihoods of workers excluded from the formal labour market; this, in turn, produced a steep drop in national poverty rates without disciplining the hyper-exploitative business class. Under this settlement, working-class organizations were co-opted by the state, and the Nicaraguan proletariat remained fragmented – partially enrolled in a constricted formal labour market; partially sustained by welfare programs that could only mitigate, but never transform, the conditions that suppressed wages in the formal sector. In the absence of external support – Venezuelan aid dropped dramatically in the years prior to 2018 – Ortega’s precarious compromise came apart.  

The immediate cause of the protests in 2018 was a proposed social security reform that would have increased personal and employer contributions while imposing a 5% reduction in benefits. Denouncing perceived corruption in the social security administration, university students in several cities organized demonstrations beginning in mid-April. Though they were violently disbanded by the national police and groups of Sandinista supporters, the unrest quickly spread, as urban youth and farmers joined the student uprisings. In May and June, protestors erected tranques – fortified roadblocks characteristic of militant protests in Central America – in neighborhoods and on highways throughout the country, paralyzing travel, limiting commerce, and sparking conflict with the national police.

In addition to organizing through student associations and formal opposition coalitions, militants established local groups (comités) and maintained informal communication through regional and national online networks. They referred to themselves as ‘los autoconvocados’, or ‘the self-organized’. As they mobilized, sections of the country became ungovernable, and stayed that way for months. Opinion polling conducted in the midst of the protests indicated that a majority of Nicaraguans in the most precarious employment situations supported Ortega’s immediate removal from office. Downward mobility, very often associated with ejection from formal employment in Nicaragua, was a significant predictor of dissatisfaction with Ortega. By contrast, those who felt their economic situation had improved or was unchanged since the previous year tended to back the president.

At first, the national business community, represented by COSEP and other chambers of commerce, maintained its support for the administration. Representatives from the free trade sector (including US- and Taiwan-based investors) even appeared onstage with the president when he announced the hasty withdrawal of his social security reform on 29 April. But COSEP soon responded to popular pressure by formally separating itself from the government. After over a decade as a stalwart Ortega ally, Nicaragua’s most powerful business association assumed a clear role in civil society-based opposition coalitions, where it was joined by other private sector groups. Together with associations of farmers and merchant vendors, business organizations staged periodic national work stoppages throughout 2018 that further weakened Ortega’s legitimacy.

The cross-class character of sandinismo was reflected in its opposition. A single narrow objective – Ortega’s removal from office – held together a broad but contradictory coalition, joining intersecting but uneven social sectors whose interests were mostly counterpoised. The demonstrators consistently rejected ideological labels, failing to formulate either a long-term vision or a concrete set of demands. This made the opposition movement especially vulnerable to state repression. For over a decade now, the Ortega government has unleashed the police on striking workers and underwritten settler violence in Nicaragua’s indigenous regions. But the behaviour of the national police force in 2018 was shocking even by those standards.

Groups of armed Sandinistas collaborated with national police to confront and detain protestors, especially during the ‘Clean Up Operation’ that razed tranques in June and July 2018. In a country only a generation removed from civil war, the emergence of these paramilitares had a chilling effect on protests, as did legislation ratified by the FSLN-controlled legislature that effectively criminalized public assembly. On Mother’s Day, hundreds of thousands marched to mourn the university students slain by state forces. Police responded by firing bullets into the crowd.

The rebellion sharply polarized opinion on the international left. Capitalizing on the mutually supportive dynamic between Nicaraguan state media and anti-imperialist observers abroad, the Ortega administration framed the protests as a CIA-orchestrated coup attempt – a narrative broadcast by sections of the Anglophone left with large online followings. Commentators sympathetic to Ortega continue to defend his government as a bulwark of ‘21st century socialism’ amid an ongoing crisis of the Latin American progressive politics. They correctly point out that a resurgent regional right, abetted at every step by international bodies such as the Organization of American States, is invested in the outcome of Nicaragua’s political crisis. The US, moreover, has imposed ‘targeted’ sanctions against Sandinista figures and passed the RENACER Act, a bundle of recommended sanctions which could result in Nicaragua’s expulsion from CAFTA. Ortega’s supporters are right that such mechanisms are intended to usher in a new regime that will neither be progressive nor democratic. But clear-headedness demands we acknowledge the barriers to socialist renewal that Ortega himself has erected. If the country soon takes a rightward turn, its roots will lie in the Sandinistas’ untenable programme, which ties the fortunes of workers to the profits of their exploiters. With the government’s reputation further damaged by the 7 November elections – which a significant portion of the public regards as illegitimate – it is now unclear how long these contradictions can be contained. Ortega has been re-elected, but he may not be president for long.

Read on: Dennis Rodgers, ‘A Symptom Called Managua’, NLR 49.

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Global Britain?

If the Conservatives’ 2021 Budget demonstrates the limits of their domestic ‘levelling up’ agenda – a modest rise in public spending that fails to repair ten years of austerity – what of the party’s foreign policy? Two years into his tenure, how does Boris Johnson’s promise of a ‘Global Britain’ align with the reality?

To answer, we should first recap the past decades of UK geopolitics. Britain’s international role has long been defined by subservience to Washington, acting as lead attack-dog where regime change has been decreed. This has always been a bipartisan project, but New Labour’s ‘hyper-subalternity’ towards America constituted an extreme, in contrast to the sovereigntist reflexes that sometimes animate the Tory benches. After the abortive militarism of the Blair years, Cameron’s overseas strategy involved a semi-coherent attempt to build a ‘smarter empire’. His government pledged to streamline and modernize the armed forces, with greater emphasis on soft power, trade policy and propaganda – treading a more cautious line than Blair had done in following US diktats. Spending cuts slashed thousands of defence jobs. Troop numbers were depleted and weapons purchases slimmed down – though work went ahead on the pocket-sized aircraft carrier beloved of Blair and Brown as a great-power status symbol.

Contra jingoistic criticisms from the Labour frontbench, this cost-cutting entailed no pull-back in Britain’s ‘global reach’. In 2011, with Obama famously ‘leading from behind’, Cameron joined Sarkozy in pushing for regime change in Libya, unleashing six months of NATO airstrikes that left an estimated 6,000 dead and catalysed a decade of factional violence. He intensified the civil war in Syria, working with Hollande to lift the EU embargo on arming anti-government forces, and established the Conflict, Stability and Security Fund to bankroll Assad’s opponents with at least £350 million, foregoing multiple opportunities to support a negotiated settlement that could have prevented the country’s interminable conflict.

Between 2010 and 2016, Cameron deployed troops to Somalia to support lethal US drone attacks; enabled the Saudi cluster bombing of Yemen; redoubled his commitment to the occupation of Afghanistan; launched a bloody ‘counterterrorism’ offensive against a scattered group of Malian dissidents; and applauded Israel’s strikes on Gazan civilians. Many of the UK’s interventions were joint enterprises with France, whose campaign for a more integrated European security policy was largely backed by Downing Street.

Cameron’s minimal display of independence in cutting the defence budget predictably angered the Obama White House, which continually reminded its Atlantic partner of NATO’s spending requirements. To save face, the PM switched tack shortly after the 2015 election and agreed to dedicate 2% of GDP to defence – though he instructed his advisers to find a way of meeting the target without actually burning through more money (for instance, by expanding the definition of security expenditure). Above all, Washington was incensed by Cameron’s refusal to toe the line on relations with the PRC. As the US geared up for a Great Power rivalry, the UK conversely signed onto Xi’s Asian Infrastructure Investment Bank and expanded China’s access to British markets, with George Osborne declaring that ‘No economy in the west is as open to Chinese investment as the UK’. When it came to sabre-rattling against Russia, transatlantic unity seemed superficially to be restored: the US and UK both backed punitive sanctions in response to Putin’s annexation of Crimea. But the Obama Administration still had cause to distrust their ally’s resolve, given the Tories’ roster of Kremlin donors. 

After Brexit, the partnership with France unravelled, as Barnier and Macron pushed to inflict maximal damage on Britain to deter future experiments in popular sovereignty. That, along with the imperative to court a Trump-approved trade deal, helped to revitalize the special relationship. As Theresa May replaced Cameron in Downing Street, with Johnson her bumbling Foreign Minister, the UK doubled the size of its SAS force in Afghanistan and facilitated US drone strikes on Pakistan. But the two sides remained at odds over China. Trump’s tariff wall made a sharp contrast with May’s initial campaign to strengthen commercial ties and embrace the Belt and Road Initiative. While Washington pivoted from the Middle East toward Asia, London sharpened its focus on the Gulf monarchies, whose function in financing the UK’s deficit through weapons purchases would become increasingly vital to the post-Brexit economy – allowing Britain to ‘spread its wings across the world’, as Defence Secretary Michael Fallon told the DSEI arms fair in 2017. 

Enter Johnson as PM two years later, repurposing the ‘Global Britain’ bombast of the Brexit campaign as ultra-servility to Washington. Johnson and Cummings hired John Bew, a hard-core Labour-Atlanticist in the Bevin mould, to draft their ‘Integrated  Review’ of the UK’s international role. Bew is the author of an admiring account of Attlee’s Cold War record and fathering of the British Bomb, as well as a former holder of the Henry Kissinger Chair in Foreign Policy at the Library of Congress, who has consistently praised the special relationship and attacked the notion that ‘non-interference in other nations would leave us secure.’ According to his Review, in the more ‘interconnected, multipolar and contested environment’ of the 2020s, Great Power competition will heighten the significance of ‘middle powers’ which stand between the American and Chinese blocs. In this context, Britain’s task is to foster ‘liberal democracy and free markets’, being ‘more active in shaping the open international order of the future’ – where necessary, by force. It must ‘create armed forces that are both prepared for warfighting and more persistently engaged worldwide’, aiming for an increasingly visible military presence on the international stage.

Hence provocations in the South China Sea and Taiwan Strait, where Johnson sent an aircraft carrier strike group and the warship HMS Richmond in August and September 2021, eliciting a furious response from the Chinese Defence Ministry. Hence too the HMS Defender’s stage-managed confrontation with the Russian military in the Black Sea last June. Such actions are no less dangerous for being purely symbolic: a ‘theatrical exercise without serious British strategic purpose or rationale’, as Anatol Lieven has argued. The UK does not have enough aircraft or escort vessels to make the HMS Queen Elizabeth fully operational, and – as in Afghanistan – remains utterly reliant on the US for support. These deployments are PR stunts to boast of London’s unquestioning loyalty to the Anglo-American compact. Yet as Lieven stresses, the folly of strutting into a war with China would easily overshadow Britain’s disastrous collaboration in the invasion of Iraq. At the very least, these naval missions will further poison Anglo-Chinese relations, while the cause of those fighting for greater equality, freedom and democracy in China is only set back by ramped-up mutual chauvinisms.

If Johnson is susceptible to the charge – articulated by an Atlanticist stalwart in the FT – that performative gestures have become a stand-in for coherent foreign policy, much as culture-war posturing has become a substitute for ‘levelling-up’, he is nonetheless planning to put the taxpayer’s money where his mouth is. Inverting Cameron’s approach, Johnson has approved a £16.5bn rise in defence spending over four years. The RAF reports that this funding will be used for a ‘more regular drumbeat of deployments’ to the so-called Indo-Pacific, aiming to make Britain one of the most prominent actors in the region. The UK has also upgraded its cybersecurity capacities and passed a raft of legislation to facilitate its covert operations. Johnson’s Covert Human Intelligence Sources Act gives undercover British agents the ability to murder, rape and torture without fear of legal sanction; his Overseas Operations Bill grants British soldiers a free pass to commit war crimes; and his amendments to the Official Secrets Act recast critical journalists and whistleblowers as enemy spies. All this points to neo-imperial ambitions which, as under Blair, are more than merely gestural.

For Wolfgang Münchau, Britain’s manoeuvres against China signal a larger fracturing of ‘the West’. France and Germany are unlikely to pull their weight in any New Cold War, given their need to protect large export surpluses and push through the EU-China comprehensive agreement. The UK, by contrast, has remade itself as ‘the only European country the US can trust in the pursuit of its strategic interests in the Indo-Pacific’. With NATO too internally fragmented to confront America’s chief rival, the organization is likely to play ‘a more peripheral role in the future’, as the UK will ‘gradually cut off from European security policy’ and line up behind the White House.

The AUKUS nuclear pact, designed to escalate the arms race with China while casually marginalizing France, signals this intention. As does Britain’s ambition to expand the G7 into a new ‘D10’: a coalition of anti-China powers that would include India, Australia and South Korea. Johnson and Modi have agreed to work towards an India-UK Comprehensive Strategic Partnership with a provisional deadline set for 2030, which would strike economic deals and combat ‘shared security threats’. In the meantime, Britain has sided with Indian forces in their sporadic border clashes with the Chinese. Next year, the UK hopes to ratchet up its influence by joining the Comprehensive and Progressive Trans-Pacific Partnership, a free-trade accord comprising eleven nations in the Pacific Rim. If its application is successful, London will attempt to block China’s parallel bid for entry.

While the UK’s liberal-democratic values are trumpeted in the Taiwan Strait, they take a back seat in other parts of the world. Johnson’s government enthusiastically supported the 2019 right-wing coup in Bolivia – using it as an opportunity to gain access to the country’s lithium deposits. It helped fund the campaign to oust Venezuela’s Maduro, and assisted the Columbian police as they led a lethal crackdown on anti-government protests earlier this year. At the same time, Britain continues to consolidate its friendships with despots in the Gulf. The RAF has established a second joint fighter squadron with Qatar as part of a £6bn arms deal, despite the regime’s support for UK-designated terror groups – including al-Qaeda’s outfit in Yemen. Johnson has provided the Omani security services with training and equipment, allowing them to violently disband large-scale protests. And British soldiers have been dispatched to Mahra province in Yemen, where they are assisting Saudi forces implicated in the torture and disappearance of detainees.

The UK sells billions worth of telecommunications interception equipment to each of these dictatorships, as well as aiding them through an opaque ‘Gulf Strategy Fund’ launched in April 2020. Such financial ties are set to deepen. Having spent months cosying up to the Bahraini Crown Prince – who oversees the systematic torture of pro-democracy activists in his country – Johnson is now on the cusp of signing a trade deal with the Gulf Cooperation Council (comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE) which would grant City financiers and British pharmaceutical giants greater access to their markets. He has already secured an equivalent agreement with Sisi’s Egypt, giving tacit approval for the scores of extrajudicial killings carried out by its Interior Ministry. Israel – Britain’s other major trading partner – has also received unparalleled support from Johnson’s cabinet, which has helped security forces repress dissent in the West Bank and opposed an ICC investigation into war crimes in the occupied territories.

Reckless warmongering and arms for the worst Gulf dictators: surely Johnson’s record is an open goal for the Labour opposition? Not under Keir Starmer. If the Labour leader’s domestic goal is to pose – unavailingly – as a more competent Johnson, on China Starmer has positioned himself as more aggressive still. Calling for ‘an end to the naivety of the golden era’, Shadow Foreign Secretary Lisa Nandy has urged the Tories to ban CCP officials from Britain, marginalise China at the UN, step up coordination with the US, and escalate the sanctions regime. Stephen Kinnock, Labour’s foreign policy spokesman on China, has asserted that ‘managing the rise of China is the number one geopolitical challenge the world is facing’, lambasting the Tories for their lack of success in ‘exerting or projecting our influence’ over the PRC. Nandy and Kinnock have also established close ties with the Tories’ foremost Sinophobe, the former Territorial Army officer Tom Tugendhat, who quipped that ‘Stephen Kinnock and I could give each other’s speeches on this subject’. Tugendhat’s ‘China Research Group’ – established to promote such policies as expelling Chinese students from British universities and sabotaging Belt and Road – was once seen as an association of hard-right Tory jingoists; but under Starmer, Labour MPs have been encouraged to join it.

The same pattern holds for other foreign policy decisions. Starmer claimed that the government had ‘badly underestimated the Russian threat and the response it required’; hinted at his support for an indefinite occupation of Afghanistan; and cheered the Tories’ attempt to immunize soldiers and spies from prosecution – while suggesting that the Overseas Operations Bill did not go far enough in this endeavour. The party welcomed Johnson’s historic expansion of the military budget and called for investment in extra nuclear submarines, expressing its ‘non-negotiable’ support for atomic weapons. 

Such reassurances to the security establishment have, of course, run alongside Labour’s dogged attempts to eradicate any trace of anti-Zionism from its ranks. So far, Starmer has launched a purge against even the most moderate critics of Israeli ethnic cleansing. He has given a green light to Labour Friends of Israel as it lobbies the government to recognise Jerusalem as Israel’s capital, and implicitly blamed Hamas ‘rocket attacks’ for the Israeli government’s aerial onslaught against a trapped Palestinian population. The government Starmer hopes to lead would continue to supply Israel with the arms needed to maintain its illegal occupation of the West Bank and blockade of Gaza. Since Corbyn’s departure as leader and suspension from the PLP, both parliamentary blocs have reverted to the unabashed Altanticism of the new millennium. But whereas Blairism was met with a prominent anti-war movement, its latest variant – Global Britain – is yet to encounter such resistance.

Read on: Susan Watkins, ‘Toryism After Blair’, NLR 36.

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Energy Dilemma

The ecological bifurcation is not a gala dinner. After a summer of extreme climatic events and a new IPCC report confirming its most worrying forecasts, large parts of the world are now roiled by an energy crisis that prefigures further economic troubles down the road. This conjuncture has buried the dream of a harmonious transition to a post-carbon world, bringing the question of capitalism’s ecological crisis to the fore. At COP26, the dominant tone is one of powerlessness, where impending miseries have left humanity cornered between the immediate demands of systemic reproduction and the acceleration of climate disorders.  

Prima facie, one might think that steps are being taken to address this cataclysm. More than 50 countries – plus the entire European Union – have pledged to meet net zero emissions targets that would see global energy-related CO2 emissions fall by 40% between now and 2050. Yet a sober reading of the scientific data shows that the green transition is well off track. Falling short of global net zero means that temperatures will continue to rise, pushing the world well above 2°C by 2100. According to the UNEP, nationally determined contributions, which countries were requested to submit in advance of COP26, would reduce 2030 emissions by 7.5%. Yet a 30% drop is needed to limit warming to 2°C, while 55% would be required for 1.5°C.

As a recent Nature editorial warned, many of these countries have made net-zero pledges without a concrete plan to get there. Which gases will be targeted? To what extent does net-zero rely on effective reduction rather than offsetting schemes? The latter have become particularly attractive for rich countries and polluting corporations, since they do not directly diminish emissions and involve transferring the burden of carbon-cutting to low- and medium-income nations (which will be most severely affected by climate breakdown). On these crucial issues, reliable information and transparent commitments are nowhere to be found, jeopardizing the possibility of credible international scientific monitoring. The bottom line: based on the current global climate policies – those implemented and those proposed – the world is on track for a devastating increase in emissions during the next decade.

In spite of this, capitalism has already experienced the first major economic shock related to the transition beyond carbon. The surge in energy prices is due to several factors, including a disorderly rebound from the pandemic, poorly designed energy markets in the UK and EU which exacerbate price volatility, and Russia’s willingness to secure its long-term energy incomes. However, at a more structural level, the impact of first efforts made to restrict the use of fossil fuels cannot be overlooked. Due to government limits on coal burning, plus shareholders’ growing reluctance to commit to projects that could be largely obsolete in thirty years, investment in fossil fuel has been falling. Although this contraction of the supply is not enough to save the climate, it is still proving too much for capitalist growth.

Putting together several recent events gives a taste of things to come. In the Punjab region of India, severe shortages of coal have caused unscheduled power blackouts. In China, more than half the provincial jurisdictions have imposed strict power-rationing measures. Several companies, including key Apple suppliers, have recently been forced to halt or reduce operations at facilities in Jiangsu province, after local governments restricted the supply of electricity. Those restrictions were an attempt to comply with national emissions targets by restricting coal-fired power generation, which still accounts for about two thirds of China’s electricity. To contain the spillover of these disruptions, Chinese authorities have put a temporary brake on their climate ambitions, ordering 72 coal mines to increase their supply and relaunching imports of Australian coal that were halted for months in the midst of diplomatic tensions between the two countries.

In Europe, it was the surge in gas prices that triggered the current crisis. Haunted by the memory of the gilets jaunes uprising against Macron’s carbon tax, governments have intervened with energy subsidies for the popular classes. More unexpectedly, though, gas price increases have precipitated chain reactions in the manufacturing sector. The case of fertilizers is telling. A US group, CF Industries, decided to shut down production of its UK fertilizer plants, which had become unprofitable due to price increases. As a by-product of its operations, the firm previously supplied 45% of the UK’s food-grade CO2 – whose loss unleashed weeks of chaos for the industry, affecting various sectors from beer and soft drinks to food packaging and meat. Globally, the surge of gas prices is affecting the farming sector via the increase in fertilizer prices. In Thailand, the cost of fertilizers is on track to double from 2020, raising costs for many rice producers and putting the planting season at risk. If this continues, governments may have to step in to ensure essential food supplies.

The global and widespread repercussions of energy shortages and price increases underscores the complex fallout involved in the structural transformation necessary to eliminate carbon emissions. While a reduction is underway in the supply of hydrocarbon, increases in sustainable energy sources are not sufficient to meet growing demand. This leaves an energy mismatch that could derail the transition altogether. In this context, countries can either return to the most readily available energy source – coal – or cause an economic contraction driven by the surge in costs and their effects on profitability, consumption prices and the stability of the financial system. In the short term, then, there is a trade-off between ecological objectives and the requirement to foster growth. But does this energy dilemma hold in the medium and long term? Will we ultimately face a choice between climate and growth?

A successful carbon transition implies the harmonious unfolding of two processes complexly related at the material, economic and financial levels. First, a process of disbandment must take place. Sources of carbon must be drastically reduced: above all hydrocarbon extraction, electricity production by coal and gas, fuel-based transport systems, the construction sector (due to the high level of emissions involved in cement and steel production) and the meat industry. What is at stake here is degrowth in the most straightforward sense: equipment must be scrapped, fossil fuel reserves must stay in the soil, intensive cattle-breeding must be abandoned and an array of related professional skills must be made redundant.

All things being equal, the elimination of production capacities implies a contraction of supply which would lead to generalized inflationary pressure. This is even more likely because the sectors most affected are located at the commanding heights of modern economies. Cascading through the other sectors, pressure on costs will dent firms’ mark-up, global profits and/or consumer purchasing power, unleashing wild recessionary forces. In addition, degrowth of the carbon economy is a net loss from the point of view of the valorization of financial capital: huge amounts of stranded assets must be wiped out since underlying expected profits are foregone, paving the way for fire sales and ricocheting onto the mass of fictitious capital. These interrelated dynamics will fuel each other, as recessionary forces increase debt defaults while financial crisis freezes the access to credit.

The other side of the transition is a major investment push to accommodate the supply shock caused by the degrowth of the carbon sector. While changing consumption habits could play a role, especially in affluent countries, the creation of new carbon-free production capacities, improvements in efficiency, electrification of transport, industrial and heating systems (along with the deployment of carbon capture in some instances) are also necessary to compensate for the phasing out of greenhouse gas emissions. From a capitalist perspective, these could represent new profit opportunities, so long as the costs of production are not prohibitive relative to available demand. Attracted by this valorization, green finance could step in and accelerate the transition, propelling a new wave of accumulation capable of sustaining employment and living standards.

Yet it is important to bear in mind that timing is everything: making such adjustments in fifty years is completely different from having to disengage drastically in a decade. And from where we are now, the prospects for a smooth and adequate switch to green energy are slim, to say the least. The scaling back of the carbon sector remains uncertain due to the inherent contingency of political processes and the persistent lack of engagement from state authorities. It is illustrative that one single Senator, Joe Manchin III of west Virginia, can block the US Democrats’ programme to facilitate the replacement of coal- and gas-fired power plants.

As illustrated by the current disruptions, the lack of readily available alternatives could also hamper the phasing-out of fossil fuels. According to the IEA: ‘Transition-related spending […] remains far short of what is required to meet rising demand for energy services in a sustainable way. The deficit is visible across all sectors and regions.’ In its latest Energy Report, Bloomberg estimates that a growing global economy will require a level of investment in energy supply and infrastructure between $92 trillion and $173 trillion over the next thirty years. Annual investment will need to more than double, rising from around $1.7 trillion per year today, to somewhere between $3.1 trillion and $5.8 trillion per year on average. The magnitude of such a macroeconomic adjustment would be unprecedented.

From the perspective of mainstream economics, this adjustment is still a matter of getting the prices right. In a recent report commissioned by French President Emmanuel Macron, two leading economists in the field, Christian Gollier and Mar Reguant, argue that ‘The value of carbon should be used as a yardstick for all dimensions of public policymaking.’ Although standards and regulations should not be ruled out, ‘well-designed carbon pricing’ via a carbon tax or cap-and trade mechanism must play the leading role. Market mechanisms are expected to internalize the negative externalities of greenhouse gas emissions, allowing for an orderly transition on both the supply and demand sides. ‘Carbon pricing has the advantage of focusing on efficiency in terms of cost per ton of CO2, without the need to identify in advance which measures will work.’ Reflecting the plasticity of market adjustment, a carbon price – ‘unlike more prescriptive measures’ – opens up a space for ‘innovative solutions’.

This free-market, techno-optimistic perspective ensures that capitalist growth and climate stabilization are reconciliable. However, it suffers from two main shortcomings. The first is the blindness of the carbon-pricing approach to the macroeconomic dynamics involved in the transition effort. A recent report by Jean Pisani Ferry, written for the Peterson Institute for International Economics, plays down the possibility of any smooth adjustment driven by market prices, while also dashing the hopes of a Green New Deal that could lift all boats.

Observing that ‘Procrastination has reduced the chances of engineering an orderly transition’, the report notes that there is ‘no guarantee that the transition to carbon neutrality will be good for growth.’ The process is quite simple: 1) since decarbonation implies an accelerated obsolescence of some part of existing capital stock, supply will be reduced; 2) in the meantime, more investment will be necessary. The burning question then becomes: are there sufficient resources in the economy to allow for more investment alongside weakened supply? The answer depends on the amount of slack in the economy – that is, idle productive capacity and unemployment. But considering the size of the adjustment and the compressed timeframe, this cannot be taken for granted. In Pisani Ferry’s view, ‘Impact on growth will be ambiguous, impact on consumption should be negative. Climate action is like a military build-up when facing a threat: good for welfare in the long run, but bad for consumer satisfaction’. Shifting the resources from consumption to investment means that consumers will inevitably bear the cost of the effort.

In spite of his neo-Keynesian perspective, Pisani-Ferry opens up an insightful discussion on the political conditions that would allow for a reduction in living standards and a green class-war fought along income lines. Yet, in its attachment to the price mechanism, his argument shares with the market-adjustment approach an irrational emphasis on the efficiency of CO2 emission reduction. The second shortcoming of Gollier and Reguant’s contribution becomes apparent when they call for ‘a combination of climate actions with the lowest possible cost per ton of CO2 equivalent not emitted’. Indeed, as the authors themselves recognize, the setting of carbon prices is highly uncertain. Evaluations can range from $45 to $14,300 per ton, depending on the time horizon and the reduction targeted. With such variability, there is no point in trying to optimize the cost of carbon reduction intertemporally. What is important is not the cost of the adjustment, but rather the certainty that the stabilization of the climate will occur.  

Delineating the specificities of the Japanese developmental state, the political scientist Chalmers Johnson made a distinction that could also be applied to the transition debate:

A regulatory, or market rational, state concerns itself with the form and procedures – the rules, if you will – of economic competition, but it doesn’t concern itself with substantive matters […] The developmental state, or plan-rational state, by contrast, has as its dominant feature precisely the setting of such substantive social and economic goals.

In other words, while the first aims at efficiency – by making the most economical uses of resources – the second is concerned with effectiveness: that is, by the ability to achieve a given goal, be it war or industrialization. Given the existential threat posed by climate change and the fact that there exists a simple and stable metric to limit our exposure, our concern should be with the effectiveness of reducing greenhouse gases rather the efficiency of the effort. Instead of using the price mechanism to let the market decide where the effort should lie, it is infinitely more straightforward to add up targets at the sectoral and geographical levels, and provide a consistent reduction plan to ensure that the overall goal will be achieved in time.

Morgan Stanley’s Ruchir Sharma, writing on this question in the FT, raises a point which indirectly makes the case for ecological planning. He notes that the investment push necessary to transition beyond carbon presents us with a trivially material problem: on the one hand, dirty activities – particularly in the sectors of mining or metal production – are rendered unprofitable due to increased regulation or higher carbon prices; on the other hand, investment for the greening of the infrastructure requires such resources to expand capacities. Decreasing supply plus rising demand is therefore a recipe for what he calls ‘greenflation’. Sharma therefore argues that ‘Blocking new mines and oil rigs will not always be the environmentally and socially responsible move.’

As the spokesperson of an institution with vested interest in polluting commodities, Sharma is hardly a neutral commentator. But the problem he articulates – how to supply enough dirty material to build a clean-energy economy – is a real one, and relates to another issue with the putative market-driven transition: carbon pricing does not allow society to discriminate between spurious uses of carbon – such as sending billionaires into space – and vital uses such as building the infrastructure for a non-carbon economy. In a successful transition, the first would be made impossible, the second as cheap as possible. As such, a unique carbon price becomes a clear pathway to failure.

This brings us back to an old but still decisive argument: rebuilding an economy – in this case one which phases out fossil fuels – requires restructuring the chain of relations between its diverse segments, which suggests that the fate of the economy as a whole depends on its point of least resistance. As Alexandr Bogdanov noted in the context of building the young Soviet state, ‘Because of these interdependent relationships, the process of enlargement of the economy is subject in its entirety to the law of the weakest point.’ This line of thought was later developed by Wassily Leontief in his contributions to input-output analysis. It holds that market adjustments are simply not up to structural transformation. In such situations, what’s required is a careful and adaptative planning mechanism able to identify and deal with a moving landscape of bottlenecks.

When one considers the economic challenges of restructuring economies to keep carbon emissions in line with the stabilization of the climate, this discussion acquires a new framing. Effectiveness must take precedence over efficiency in reducing emissions. That means abandoning the fetish of the price mechanism in order to plan how the remaining dirty resources will be used in the service of clean infrastructure. Such planning must have international reach, since the greatest opportunities for energy-supply decarbonation are located in the Global South. Moreover, as transformation on the supply side will not be enough, demand-side transformations will also be essential to stay within planetary boundaries. Energy requirements for providing decent living standards to the global population can be drastically reduced, but in addition to the use of the most efficient available technologies, this implies a radical transformation of consumption patterns, including political procedures to prioritize between competing consumption claims.

With its longstanding concern for planning and socialized consumption, international socialism is an obvious candidate to take on such a historic task. Though the poor state of socialist politics doesn’t conjure much optimism, the catastrophic conjuncture we are entering – along with price volatility and the ongoing spasms of capitalist crises – could increase the fluidity of the situation. In such circumstances, the left must be flexible enough to seize any political opportunity that will advance the cause of a democratic ecological transition.

Read on: Mike Davis, ‘Who Will Build the Ark?’, NLR 61.

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Rusty Charley

Weird things are going on in Brussels, and they are getting weirder by the day. The European Union, an international would-be superstate running an impressive democratic deficit, is gearing up to punish two of its democratic member states and their elected governments, together with the citizens that have elected them, for what it considers a democratic deficit. Governing the EU is an unelected technocracy, a constitution without a people, consisting of unintelligible international treaties and the accumulated rulings of an international court, the Court of Justice of the European Union (CJEU) – treaties that cannot in practice be revised, and rulings that only the court itself can revise – with a parliament that is not allowed to legislate and knows no opposition.

The current issue is an old one but was long avoided, EU-style, in order not to wake sleeping dogs. To what extent does ‘European’ law, made by the national executives assembled in the back rooms of the European Council and the secret chambers of the CJEU, supersede national law, made by the EU’s democratic member states? The answer seems simple enough, for EU-uneducated simple minds: where, and only where, in the Treaties (spelled in Brussels with a capital T, presumably to indicate their sublime nature) member states have bestowed on the Union the right to make law that is binding on all member states, so that on the issues they have delegated to the EU all would have the same law and would have to stick to it, in order to allow the Union to function smoothly.

Had it only ended there. Already in the early 1960s the Court discovered in the Treaties a general supremacy of EU law over national law. Note that to the naked eye, nothing like this is to be found in the Treaties; you need to be a member of the court to see it. At first, as long as the jurisdiction of the EU was still rather narrow, nobody bothered. Later, however, when the EU was increasingly used to open up national economies to the ‘four freedoms’ of the Single Market and then the common currency, the doctrine of the primacy of European law served as a convenient device to extend the Union’s authority without rewriting the Treaties, especially as this became ever more difficult with the rising number of member states, from six to, before Brexit, 28. What at first was to be no more than a highly selective upward transfer of national sovereignty, gradually became the principal institutional engine for what came to be called ‘integration by law’, operated by the Union’s central authorities and supported by varying coalitions of member states and governments – something considered by lawyers in particular to be normatively and technically superior to integration by politics.

While motives changed over time, integration by law always involved a deep reading of the Treaties to discover ever new reasons for subjecting democratic national polities to a post-democratic international technocracy. With Treaty revisions effectively blocked after the defeat in 2005 of a draft ‘Treaty for a European constitution’ in a French referendum (55.7% voting against it), the CJEU eventually became the EU’s single most important legislative and indeed constitution-writing body. (Ironically, one of the likely reasons why the constitutional treaty was rejected was that it explicitly stipulated the primacy of European law.)

Nobody knows for sure what is hidden in the depths of the European Treaties as they now stand, hundreds, even thousands of pages depending on the typeface. The only exception is the CJEU, and this is because what it says it finds in there is for all practical purposes what is in there, as the court always has the last word. So the CJEU, or in anticipation of it the European Central Bank or the European Commission, may read into the Treaties functional reasons for what the Germans call ‘more Europe’ – monetary policy must (!) today (!) encompass fiscal policy – or general intentions – hidden in the commitment of member states to an ‘ever closer union among the peoples of Europe’, reading people for peoples – or ‘values’ like ‘democracy’ and ‘human rights’ requiring, for example, more enlightened sex education in Hungarian state schools.

What precisely it will find in each case may be uncertain; what one can know for sure, however, is that the Court will never miss an opportunity to ‘build Europe’, meaning to confirm the supremacy of European over national law, as ultimately made by itself. Watching the CJEU go about its duties reminds one of a character in a Damon Runyon story called Rusty Charley, a small-time gangster working the 1940s Broadway who, when playing dice with his fellow-gangsters, rolls the dice inside his hat and then announces the result without letting the others take a look. Although he always won, nobody felt like asking inconvenient questions since Charley was ‘such a guy as is apt to hate being called a liar’.

That the supremacy of European over national law has presently become a matter of high political drama is to do with the EU’s politics of extension-turned-overextension. Facing conflicts and cleavages that they cannot politically contain, the ‘pro-Europeans’ are placing their hopes in the Court, to substitute the legitimacy of the law for the exhausted legitimacy of supranational politics. At the centre of the present controversy are Poland and Hungary with their ‘illiberal’ political regimes. Both countries insist on a strict interpretation of the Treaties, one that tightly limits the extent to which a member state’s politics and European policy can be a matter of concern for other member states or for EU institutions.

In the so-called ‘Treaty base’, a country’s legal system is subject to EU supervision to the extent that it may be needed to ensure the government’s proper, non-corrupt use of EU funds. While in a literal reading this is all that is meant by the so-called ‘rule of law’ requirement, ‘pro-Europeans’ claim it extends to the status and organization of a country’s highest court, in particular its independence from the executive. Member states are also expected by the treaties to conform to certain democratic and human rights standards; if they do not the Council can, by unanimous vote, take away their voting rights – not, however, expel them, which isn’t an option for an international organization that considers membership irreversible.

Normally, corruption and the politicization of a country’s highest court are not much of an issue in European politics. As to corruption, Poland is known to be largely clean (Hungary less so) while countries like Romania, Bulgaria, Slovenia, Slovakia and Malta are widely known as strongholds of cronyism and venality, not to mention, in some cases, the deeply entrenched abuse of minorities. Indeed, both Slovakia and Malta have recently witnessed the assassination, by criminal gangs connected to government circles, of independent journalists investigating corruption in high places. Still, nobody threatens to cut their European subsidies, and the liberal European press carefully abstains from comparing the Polish and Hungarian ‘rule of law’ to theirs.

There is reason to believe that this is because, unlike Poland and Hungary, they reciprocate for cash received by always voting with the Commission and otherwise keeping their mouths shut. Similarly, political influence on a country’s high courts is something that EU bodies have good reason not to make too much fuss about: where there are constitutional courts at all, all of them are, in one way or other, politicized; for Spain see the recent case of Podemos MP Alberto Rodriguez. (Sometimes politicization is considered outright desirable: Note that the EU commission and Parliament are taking Germany to the CJEU for its government not having prevented its Constitutional Court from forming an independent judgment, to the embarrassment not least of the German government itself, on the limits of European legal authority, in the case of the ECB’s debt purchasing programs.) What is special about Poland and Hungary is not that their highest judges are appointed ‘under the influence’, but that their governments, like increasingly the German constitutional court, openly insist on a narrow interpretation of the primacy of European law and a correspondingly extensive interpretation of – their – national sovereignty, in open defiance of ‘integration by law’, or by empire, as conducted by the CJEU.

The story that is presently unfolding here, then, is not a legal but a political one. Its most recent episode started with the Council passing the multi-billion NGEU Corona recovery fund, with considerable sums allocated to Hungary and, in particular, Poland, even though they were only marginally affected be the virus. For the European Parliament (EP), which has to approve the measure, this was an opportunity to extend its efforts to bring about regime change in the two countries, by making disbursement of their recovery money dependent on political and legal concessions to the EU. Elections are upcoming in both countries, and the hope was that a loss of European funds, allegedly destined to enable Poles and Hungarians to have a better life, more resilient to capitalist crises in general and coronavirus in particular, would undermine the present governments, as would getting the funds by caving in to ‘Europe’.

Hopefully this would, in the course of international elite management, put governments in place that are less responsive to their peoples and more to ‘Europe’, as constituted by the EU. It might also increase the number of liberal MEPs from the two countries, making the EP even more ‘pro-European’ than it already is. The problem for the Commission was that NGEU needed a unanimous vote in the Council, with Poland and Hungary set to vote against it if it came with any special clause directed against their governments. At the same time, the EP made its approval conditional on the Commission accepting what came to be called a ‘rule of law mechanism’, forcing the Commission to withhold funds to countries not respecting the primacy of European law, as discovered by the Court.

To get its way, the Commission went along with the EP while, apparently, promising Hungary and Poland that the ‘mechanism’ would never be activated. Officially, it was announced that it would be used only after its approval by the CJEU, where Poland and Hungary would challenge its legality. This was understood to take time, longer than the disbursement of the NGEU funds. Meanwhile on the Council, the ‘frugal’ Northern Europeans, led by the Netherlands, insisted that Poland and Hungary be treated harshly – probably to make their national publics believe that they could save precious North European money by having the EU cut the Polish and Hungarian allotment, in punishment for insufficient adherence to the rule of law. The result was an unprecedented public row, with pressure on the Commission mounting to be strict with the two ‘illiberal democracies’, inviting the Court to move faster than expected. In response the Polish Constitutional Court issued a ruling, long in the making but held back for political reasons, which, invoking the precedent set by the German Verfassungsgericht, declared the Polish constitution generally to be above European law. More turmoil can safely be predicted.

Non-German observers find it hard to avoid the impression that the worst rabble-rousers in the battle over Poland’s and Hungary’s liberal-democratic deficit are the Germans. A leading figure here is one Katarina Barley, Social Democrat and a former Minister of Justice in the Grand Coalition, until her party made her its top national candidate for the 2019 European election. This ended in a veritable disaster, at 15.8% after 27.3% five years earlier. Having moved willy-nilly to Brussels, Barley managed to secure for herself one of the fourteen (!) posts of Vice-President of the EP. In the autumn of 2020, Barley let it be known on German radio that the ‘rule of law mechanism’ had to be applied to ‘starve’ (aushungern) Viktor Orbán in Hungary as well as Poland generally. There are vivid memories in Poland, shared across generations, of the last German attempt to starve the country – memories apparently alien to ‘pro-European’ German politicians who, however, know for sure how neighbouring countries have to be governed: on the German model, as specified by the German government via Brussels.

Similarly Manfred Weber from the CSU, chief of the Christian Democrats in the EP and former candidate-in-vain for the presidency of the Commission, keeps threatening Poland and Hungary with ejection from the EU (which is not provided for in the Treaties). The German Foreign Minister, also a Social Democrat, welcomed the ‘rule of law’ statute for its capacity to ‘inflict pain’ on Hungary and Poland, and was applauded by a veritable army of German Greens in and out of the EP, cheered on by the German press, ‘quality’ or not, public broadcasting included. If you add von der Leyen, Polish citizens may be forgiven for believing that their country – whose government, like that of Hungary, has the support of more or less one half of its people – has again become an object of German aggression.

What is behind this, apart from the amazing historical amnesia, or sheer stupidity, of all-too-many German ‘pro-Europeans’? The money that goes to smaller EU member countries under NGEU must appear enormous to the average German taxpayer, especially as he or she begins to divine the huge costs of the impending ‘energy turn’, or of renovating the austerity-‘starved’ German infrastructure. The real object of the recovery fund – keeping national elites in Eastern Europe who are committed to the Internal Market and averse to alliances with Russia or China in power – is too delicate to talk about in public. So it needs to be demonstrated that the money buys something more uplifting than imperial stability: submission to Western European cultural leadership documented by the selection of leaders that suit Western European taste. One example would be the neoliberal Donald Tusk, a former Polish Prime Minister who was voted out of office after his government had ruined the national economy, only to be put in a holding pen in Brussels as one of the handful of European Presidents, where he was groomed for a victorious return after putting an end to Kaczyński and his ilk.

Will Poland and Hungary learn to be like Romania or Bulgaria, if not Malta and Slovakia, and thereby placate their Brussels foes? If they refuse and the CJEU gets the last word, another this time Eastern hour of truth may strike. How the court will rule is as certain as that the number of pips on Rusty Charley’s dice will be the number he needs to win. This may open the road to Polexit, just as Merkel’s denial of concessions to Cameron on immigration added momentum to Brexit. While von der Leyen has increasingly adopted the rhetoric of Barley, Weber and the Greens, Merkel, in her last hours as Chancellor, urged the EU to exercise moderation and seek a political rather than a juridical solution. (Merkel may have been notified by the United States that they would not be amused to see Poland, their strongest and safely anti-Russian ally in Eastern Europe, leave the EU, where it is fed by Western Europe so that it can be armed by the U.S.)

In this context, note that there now seems to be a slow awakening in other member countries over the sheer presumptuousness of the EU’s increasingly explicit insistence on the general primacy of its law over that of its member states, including their constitutional law. The battle of Poland and Hungary may put an end to the era when ‘integration by law’ could, thanks to its incrementalism, be treated by increasingly short-termist national governments with benevolent neglect. For example, French centrist politicians getting ready to run for the Presidency next year, like Valérie Pécresse (Les Républicains), Arnaud Montebourg (a former Socialist) and even Michel Barnier, the EU’s militant Brexit negotiator, have begun to worry about what they now call French ‘legal sovereignty’ – some of them, including Barnier of all people, demanding a national referendum to establish once and for all the supremacy of French over European law.

While this is being written, out of the blue the CJEU sentenced Poland to a fine of one million euros per day for not having abolished a chamber of its Supreme Court set up by legislation to oversee the Polish judiciary with the intention, it appears, to subject it to greater political control. (Poland has already stated its readiness to abolish the chamber by the end of the year.) Together with another fine of 500,000 euros per day previously imposed for continuing to operate a particularly dirty soft coal mine, this amounts to roughly half a billion euros per year. As much as this may seem, it is miniscule in comparison to the 36 billion Poland is due to get out of the recovery fund. Apparently, these are currently being held back by the Commission under pressure from the EP, until now without formal explanation.

Whether this kind of political hardball will bring about the desired regime change is, however, far from assured. The first line of the Polish national anthem, Jeszcze Polska nie zginęła, translates as ‘Poland is not yet lost’; it expresses a strong appetite for fighting a battle, even a losing one, to the end, against the odds, in defence of the national honour. In part because of this, a political deal still seems possible, and perhaps the one million fine is no more than the last hurrah of a court that expects to be sidelined by politicians able to think twice before they invite another national exit. (The German commentariat is certain that Poland will give in, being for sale like everybody else.) Rumour has it that Donald Tusk, who recently appointed himself Spitzenkandidat of the Polish opposition for the 2023 national election, has behind the scenes sought and received assurances from the Commission that the first instalment of the Polish share in the recovery fund will soon be disbursed, probably fearing that if it were not, this would not help him but the government of Kaczyński.

Read on: Gavin Rae, ‘In the Polish Mirror’, NLR 124.