T-shirt globalization

Pietra Rivoli's book The Travels of a T-Shirt in the Global Economy: An Economist Examines the Markets, Power, and Politics of World Trade was the subject of a recent (10/19/05) IMF book forum. The transcript is available. Rivoli gives an overview of the book, as well as a fascinating look at globalization today. She uses the honored dialectical method of starting with one thing, and by exploring all of its interconnections, coming to an understanding of the whole (like Marx did by starting Capital off with an investigation of "commodity" to get to the workings of capitalism). In Rivoli's case, she uses a the life of a t-shirt to explore the global economy. (From one of the "list" links on Amazon, I see there is actually a genre of "commodity biography".) The transcript is worth the read.

jd

[P.S. - NPR did a series based around Rivoli's book in April '05, called The World in a T-Shirt. The NPR page has a map and links to book excerpts.]

Sensuous Materialism

David Abram's remarkable book The Spell of the Sensuous (Vintage, 1996) accomplishes an amazing task. Without going beyond the perceptible world, the world of nature, the material world, he is able to infuse it with wondrous-ness, what one might call spirituality except that it is so firmly rooted in the world. As Abram has said elsewhere, "spirit is matter."

Building his argument on the work of French philosopher / phenomenologist Maurice Merleau-Ponty, Abram provides a concise interpretation of Merleau-Ponty's work. The starting point is the material, sentient body, in the world, and its "silent conversation with things".

-- perception is inherently interactive, an act of participation, a reciprocal interplay between perceiver and perceived.

-- perceived things are encountered as animate, living (unfinished) presences. Our spontaneous pre-conceptual experience yields no evidence for a dualistic division between animate and inanimate phenomena, only for a relative distinction.

-- the complex interchange called "language" is rooted in the non-verbal exchange always already going on between our flesh and the flesh of the world.

Whereas traditional science privileges the sensible field, abstracted from the sensing experience (what one might call mechanistic materialism); and "New Age spiritualism regularly privileges pure sentience, or subjectivity, in abstraction from sensible matter" (and going so far as to claim the world is illusion created by mind or spirit),

both of these views perpetuate the distinction between human "subjects" and natural "objects", and hence neither threatens the common conception of sensible nature as a purely passive dimension suitable for human manipulation and use. While both of these views are unstable, each bolsters the other; by bouncing from one to the other -- from scientific determinism to spiritual idealism an back again -- contemporary discourse easily avoids the possibility that both the perceiving being and the perceived being are of the same stuff, that the perceiver and the perceived are interdependent and in some sense even reversible aspects of a common animate element, or Flesh, that is at once both sensible and sensitive. (pp 66-67)

Interdependence, reciprocity, interaction, participation, interpenetration -- this is the vocabulary of dialectics. This is no coincidence, as Merleau-Ponty was a Marxist in the post-WWII French intellectual tradition (for a fascinating history of that milieu, see Mark Poster's Existential Marxism in Postwar France). And coupled with this sensuous materialism -- a universe sensing and sensed, alive in some way -- this treatment excites, enlivens and elevates dialectical materialism.

Those two words, "dialectical" and "materialism", put together, are weighted down with so much historical baggage. On the one hand, suggesting some connection between Abram's work and dialectical materialism does a disservice to him (and Merleau-Ponty too) inasmuch as it may stop the prospective reader from going any further. On the other hand though, if "dialectical materialism" invokes history, exploitation and class struggle, then that perhaps is good.

Abram's book is a philosophy of ecology. He acknowledges the personal task of "remembering", "renewing reciprocity", not "going back" but "going full circle", "uniting our capacity for cool reason with this more sensorial, mimetic ways of knowing, letting the vision of a common world root itself in our direct, participatory engagement with the local and the particular." (270) The sensuous world is always local. He acknowledges also the political task of "engaging in political realities". He doesn't come out, though, and say that the destruction of the environment cannot be stopped short of stopping capitalism -- how can he? It's not that kind of book, and he may not be that kind of person. But that is the insight that "dialectical materialism" provides, and precisely the act that "dialectical materialism" invokes.

"Materialism" may be one of those words that has exhausted its usefulness, or ability to convey new meaning. Engels wrote how the conception of materialism had to keep pace with science. But the idea of "the Universe is one, and is as a whole absolutely self-determined, but no part of it is absolutely self-determined", "every part of the Universe is in mutually determining relations with the rest of the Universe," "the Universe is a material unity, and that this is becoming," "this material unity cannot be determined by thought alone, it is established by thought in unity with practice, by thought emerging from practice and going out into practice," as Christopher Caudwell wrote ["practice" I would say embraces all interaction with the world, doing things, of which laboring and the production process is of course a very important part].

This description of materialism, a dialectical materialism is not the mechanical materialism typically assumed as "materialism"; nor is it atomism or metaphysical materialism -- both outlooks were more or less destroyed by physics in the late 19th and 20th centuries. But it is a materialism that does not allow for a being outside of the Universe, not a Creator or an "Intelligent Designer". The Universe is It, feeling and being felt, not being, but becoming.

jd

The introduction to The Spell of the Sensuous

Mystery Alaska

We watched the H'wood movie "Mystery, Alaska" last night, a cute and familiar story of small town rural America vs what? dehumanized, de-passionized, urbanized, corporatized America I suppose. Almost a Red State / Blue State contradiction without the false moralism (they drink and screw a lot in Mystery). The hockey players of Mystery (Nature = mystery) skate on the river and play on pond ice surrounded by majestic mountains and forests. The New York Rangers play indoors arena hockey with boards (fences) and overlaid lines (cartesia) on the ice. A kind of Lake Woebegone, the women are wholesome and fresh, the men strong and virile and honest (except for the one who left to go to the big city, and returns as an outsider.) The town is beset by a Walmart-like company ("PriceWorld") trying to invade the town, a store clerk's "accidental" response is to shoot the PriceWorld representative (who clearly articulates the contempt of corporate America for, well, Americans).

I was reminded of the polarization of town and country that Marx describes in many places, one of the destructive consequences of capitalism. And that that polarization itself a reflection of, or an aspect of, and/or a contributor to, the alienation of humans and Nature that also accompanies capitalism. Which is likewise an echo of the alienation of humans-as-workers from the production process and the fruits of their labors. (see e.g., John Bellamy Foster's Marx's Ecology.)

Some additional thoughts on this:

One -- alienation as a kind of connection, or anti-connection.

Two -- the appeal of "country" music to city folk as a yearning for healing the human/Nature rift. Of wanting to be closer to something that sounds like Nature. I know squat about country music in general, but I understand that it comes out of rural laboring, whether white agricultural labor ("country" music or "cowboy"/"western" music) or black agricultural labor ("blues"). The sensuous body; the alienation, exploitation and poverty; music as expression...

Three -- the danger of the idolization of rural Americans as People of the Earth, the volk, real Americans vs the urban invaders, aliens, violators, spoilers -- the roots of ecofascism. Instead of recognizing that the destruction of rural life is intimately connected with, is the flip-side of, the destruction of urban life...

jd

Science vs "Intelligent design" scorecard

Some links related to the battle of darkness and ignorance vs. science:

Good news from Dover, PA
Intelligent Design Falls Hard: Dover, PA, reams school board over Creationist teaching (Village Voice)
A Decisive Election in a Town Roiled Over Intelligent Design (New York Times)
Pat Robertson: Intelligent design rejection was a vote against God: "On today's broadcast of 'The 700 Club,' Robertson told Dover residents, 'If there is a disaster in your area, don't turn to God.' The founder of the Christian Broadcasting Network explained, 'You just voted God out of your city.'"

Bad news from Kansas (don't trust future graduates from Kansas schools posing as scientists)
Kansas School Board Approves Controversial Science Standards (New York Times)

(and also Roanoke, Virginia: 'Intelligent design' supporter wins school board seat)

jd

More trees falling in the forest

A few more notes on yesterday's post regarding speculative capital and timber:

One of Marx's first political writings dealt with timber. His article "Debates on the Law on the Thefts of Wood", which he wrote as editor of the Rheinische Zeitung in 1842, defended the right of peasants to scavenge wood from what had once been common land. Wood was the main source of fuel for heating homes and cooking food. For a discussion of this topic, as well as the development of Marx's overall thinking on nature and the environment, see John Bellamy Foster's fascinating book Marx's Ecology: Materialism and nature, 2000, Monthly Review Press. "What was at issue," Bellamy writes, "was the dissolution of the final rights of the peasants in relation to what had been the common land -- rights that had existed from time immemorial but which were being eliminated by the growth of industrialization and the system of private property." (66)

So the trajectory looks something like this: Common land; enclosure or privatization of forest land by the large (family) landowners; the industrialization of timber production and ownership by timber corporations; the ownership by hedge funds and pension funds. Memo to self: for a future project, map the alienation of human from nature onto property relations and see what turns up.

For more on "speculative capital" as I use the term, see a paper I did for the 2002 Global Studies Association meeting. Briefly, the idea is that capital can play different roles or take different forms. "Productive capital" is capital applied to actual production -- tied up in raw materials or machinery or advanced as wages. Inasmuch as this capital is used in industrial processes (and we could include industrialized agriculture here), it is "industrial capital." "Finance capital", following from Lenin (which is fair I think, as Marxist economics is the context in which I am looking at these forms) is the merger of "bank capital" with "industrial capital" under the control of the banks. This capital was still directed towards production. "Speculative capital" is a subset of finance capital, or develops from it, and is capital involved in the trading of financial instruments; derivatives in the broadest sense of the term -- instruments derived from underlying titles or goods or commodities or assets. Typically speculative capital is used in the management of risk.

In this sense, Harvard's large endowment is not speculative capital per se. In its ownership of large tracts of forest the university functions more like a rentier, holding the asset and selling timber rights back to the timber corporations from which it bought the land. It gives an institutional face to the land ownership. When money managers securitize the woods though, e.g. by setting up timber funds that investors can subscribe to, or real estate investment trusts (REITs) that then sell shares on the open market, then this can properly be seen as the functioning of speculative capital. The underlying asset (the forest) has been converted into shares that can then be traded among investors. Inasmuch as the forest generates income, these shares are titles to future income streams -- what Marx called "fictitious capital".

Another WSJ article on 11/4/05, "REITs Spread to Timber Industry As Paper Market Struggles, Firms Adopt New Structure In Bid to Boost Share Prices" by Chelsea Deweese describes how these REITs work:

With growth in the paper market sluggish and the timber market battered by cutthroat competition, timber companies have been looking for ways to boost their share prices and stand out with investors. For the companies, a big advantage to becoming a REIT is that they no longer have to pay corporate income tax on earnings from land holdings.

...

Integrated forest-product companies once tried to do it all: own land, harvest trees and produce paper and other wood products. Today, under pressure from shareholders who want them to maximize the value of their timberland, companies are being forced to restructure.

...

REITs typically pay out hefty dividends, because they are required to pass 90% of their earnings to shareholders. And because earnings from timberland REITs are considered capital gains, their dividends are taxed at a lower rate -- a maximum of 15%, compared with up to 35% for other REITs, whose earnings don't all qualify as capital gains.

...

Timber REITs have performed so well that some non-REIT timber companies have faced investor pressure to do more to keep up, analysts say. Mr. Chercover says some companies are lobbying Congress for changes in the law so their timber operations would be "taxed on a level playing field with the REITs." [the connections in the economy compel other players to keep up or fail - jd]

...

But the growth of timber REITs has some on Wall Street worried. These REITs make money buying and selling timberland real estate to property developers. If the housing market cools and land sales decline, timber REITs may see their earnings suffer. In addition, a real-estate downturn could chill demand for wood for building houses, which also could hurt timber REITs.

"We are in a very strong market for wood, but that's not going to last forever," says Richard Schneider, an analyst at UBS Warburg.

Ben Inker, director of asset allocation at investment firm Grantham, Mayo, van Otterloo in Boston, says the REIT structure isn't ideal for all timber companies. Once a company converts, he says, it may feel pressure from shareholders to produce steady revenue, which could force it to cut down trees even if demand for wood dries up.

The article also notes that in the case of Plum Creek raised enough money through the REIT to begin trading in timber real estate, in addition to exploiting the natural resources.

Speculative capital represents an abstraction from the act of production. There is the production itself, then the loans, bonds, etc. that finance of production, and then the various levels of abstraction of speculative capital: the shares that represent titles to production or income streams, the mutual funds or exchange-traded funds that represent no particular company, but an industry or the economy as a whole, the instruments that represent the price movement of those shares, and finally, modern-day derivatives that link together distant and distinct markets and commodities together.

This degree of distancing (can it also be called alienation?) of capital mirrors the trajectory of property.

Finally, speculation is rooted in the management of risk, of which the first and main source is Nature -- storms at sea, weather-related crop failure, floods or drought or hurricanes. From the trade in tulip futures in Holland in the 1600s to the trade in weather derivatives at the Chicago Mercantile Exchange today, speculative capital has had an intimate relationship to Nature. Memo to self -- another project.

Abstraction, insulation, securitization, protect -- the language of alienation.

jd

Timber!

The second article in the Wall Street Journal's series "Awash in cash: Cheap money, growing risks" provides a fascinating look at an odd dimension of speculative capital.

"U.S. Timberland Gets Pricey As Big Money Seeks Shelter" by E. S. Browning (11/4/05) looks at pension funds, endowments and real estate investment trusts buying up timberland in the never-ending quest for higher returns. On the other side of the transaction, lumber and paper companies, under pressure from shareholders to improve bottom lines, are converting forest land to cash. "The result is an enormous land transfer now under way." Mirroring the general process of industrial capital yielding to speculative capital, the industrial owners of the land are transferring title to pools of speculative capital. Per the article, some $30 billion of timberland is owned by financial investors (six times what it was in 1994). Just as speculative capital has no direct connection to actual production processes, the new owners of the timberland are far removed from trees and lumber.

The numbers are amazing: in one sale, a Boston money-management firm bought more than 5% of the state of Maine. Harvard University has 10 percent of its massive endowment portfolio of $26 billion assigned to timber investments; it is the second largest owner of forest land in New Zealand.

Why timber?

With bond yields puny and stocks flat year-to-date, timber offers a shot at stable returns in the high single digits, mostly from long-term growth in the value of the land and its trees. Low interest rates make it cheap for an investor to borrow cash to magnify a bet on timber.

As a hard asset, timber also has appeal as a haven from possible worsening inflation that might undermine financial assets. And it has diversification value: Its market performance historically is largely uncorrelated with those of stocks and bonds -- when they zig, timberland may do nothing or may even zag.

Timber investment itself is not without risk. As more money flows into timber, prices are climbing and yields are falling. Also, as with any commodity, timber has its vulnerabilities -- demand might slacken, or the cost of borrowing to purchase land might rise, hurting returns.

Since speculative capital in general, and in this particular case, remote timber ownership, is abstracted from the transformation of use values, the connection between speculative capital and land, community, worker, environment is tenuous at best. In the case of identifiable owners like Harvard or Yale, the point of resistance is identifiable and confrontable. In the case of hedge funds and real estate trusts, the owners dissolve into the faceless sea of capital. Fund managers can authorize clear-cutting forests or building sub-developments to maximize short term returns. This is not to suggest that industrial capital has any more sympathy for the communities it exploits; only that the terms and terrain of confrontation and resistance change with the forms of capital. Capital becomes, as Marx wrote, a general, a social power.


jd

Dynamic atomism

"In the sciences ... a continual circulation takes place -- not because the objects themselves change, but because new observations produce a need in each scientist to assert himself, to handle knowledge and the sciences in his own way.

"But since human thought also follows a certain circular pattern, a reversal of method will always bring us back to the same point. These atomistic and dynamic concepts will forever alternate, but only in emphasis, for neither will wholly replace the other. This holds true even for the individual scientist. Before he realizes it the most determined dynamist will fall into atomistic terminology, while the atomist will be unable to avoid becoming dynamistic at times." (Goethe, in "My Relationship to Science, and to Geology in Particular", Goethe: Scientific Studies, ed. and trans. by Douglas Miller. Suhrkamp Publishers. 1988. pp 138-9.)

"Atomism" refers to a crude or metaphysical materialism, where the world is seen to be composed of discrete stable particles. If "dynamism" can be construed in the sense of motion, change, development, then the "dynamic atomism" described by Goethe can be seen as a precursor of, or early articulation of, dialectical materialism?

jd

Flood of capital

On page 1 of today's (11/3/05) Wall Street Journal, an article by Greg Ip and Mark Whitehouse titled "Huge Flood of Capital to Invest Spurs World-Wide Risk Taking". I think Greg Ip is one of the WSJ's most insightful writers in capturing the content of the high tech / speculative capitalism.

I think that deflation is the tendency in high tech/digital capitalism, inasmuch as price corresponds to value on a global scale, and less value is bound up in commodities produced under near-laborless conditions. But just like Marx's famous "Law of the Tendency of the Rate of Profit to Fall", it is a tendency that invokes counter-tendencies that mute or even counteract the tendency.

In the case of deflation, one counter-tendency is the rise in labor-intensive production in low-wage production sites (China, Bangladesh, El Salvador etc) on the one-hand, and the expansion of labor-intensive services and various forms of unproductive labor to ensure the circulation of commodities. (For more on this paradox see The End of Value.) While prices may tend to fall in, say, manufactured goods, prices rise for things like health care and education.

The "Huge Flood of Capital" article describes another counter-tendency -- capital that can't be invested profitably in the production of stuff (no need for more capacity) goes chasing for returns in other markets. Per the article, world pension funds, insurance companies and mutual funds have $46 trillion at their disposal, up almost a third since 2000. U.S. companies alone have $1.3 trillion in liquid assets. This capital, when compounded through leverage (investing with borrowed money), pushes up the price in investment markets, in turn reducing overall return. "This means that investors are demanding less compensation than usual for taking on the risk inherent in owning the assets." This in turn can lead to a positive feedback cycle (or a vicious cycle) of more money chasing fewer returns. Or as one person quoted in the article says, "It is a global game of chicken."

The obvious danger is a crash in asset prices if capital is withdrawn for whatever reason -- e.g., investors become more averse to risk, or companies expand investment. Given the high degree of interconnection in modern speculative capital, the danger of systemic crisis is present.

jd

Oil, Wal-Mart, environment

Two bits:

Regarding the "end of cheap oil": A global production line and global market means a dispersed economy; and so requires a dense web of transportation connections to sustain that dispersion. Since most transportation technology uses oil in one form or another for power, the degree to which oil prices can affect such an economy is dramatic. Whether the current high price of oil is historic (in the sense of being part of a long-term crisis, where increasing demand, shrinking reserves and slowing discovery is a long-term trend, and likely to just get worse) or merely episodic (hurricanes and/or political storms are causing temporary disruptions in supply and, with speculators, causing bursts in price, technology is allowing previously hard-to-get oil to be cheaply retrieved affecting the total reserves available, more efficient technology will hold down increasing demand) -- in either case expensive oil has the potential of a serious re-alignment of the connections in a global economy.

From a recent discussion (aired 10/18) on Christopher Lydon's Open Source radio program, called "The End of the Oil Age", I take it this disruption is discussed in James Howard Kunstler's book The Long Emergency: Surviving the Converging Catastrophes of the Twenty-First Century. In the show, Kunstler is definitely in the camp that the high price of oil is a historic event, with terrible consequences for the current economic structure. Here's a link to a condensed version of the book which appeared in Rolling Stone Magazine. For example:

The way that commerce is currently organized in America will not survive far into the Long Emergency. Wal-Mart's "warehouse on wheels" won't be such a bargain in a non-cheap-oil economy. The national chain stores' 12,000-mile manufacturing supply lines could easily be interrupted by military contests over oil and by internal conflict in the nations that have been supplying us with ultra-cheap manufactured goods, because they, too, will be struggling with similar issues of energy famine and all the disorders that go with it.

Wal-Mart also figured in a Living on Earth radio program, "Wal-Mart to Reduce Its Environmental Footprint" (aired week of 10/28/05). The story raises in general (albeit implicitly) the contradiction between capitalism and the environment. Capitalism tends to see the environment as an economic externality; the cost of trashing the environment is paid for not by the polluter, but by you and me and everybody else -- via ruined health, taxpayer-paid cleanup, and the loss of unspoiled nature. However, there are ways that going green cuts internal costs; with the environmental benefits being a useful by-product and good for public relations.

E.g., in the radio program, Andy Ruben, the VP of Corporate Strategy and Sustainability at Wal-Mart says that by reducing the package size of just one toy brand that Wal-Mart carries will save it $2.4 million in transportation costs (presumably more will fit in each cargo container coming from China, and on each warehouse on wheels), meaning 3,800 trees that will not be harvested, and 1,000 barrels of oil that won't be burned.

jd