Sunday, December 25, 2022

Four historico-ideological theories about the origin of the current war in Ukraine (Part II)

             The third view about the origins of the conflict looks at the roots of the current nationalism. It starts from the historical events of 1989-1992 which led to the fall of communism. The fall of communism was not precipitated by democratic revolutions as is often claimed in the popular narrative in the West. These were in reality revolutions of national liberation from the indirect rule by the Soviet Union. They took the seemingly democratic form because of a broad agreement on national self-determination among many sections of the population in 1989. Thus nationalism and democracy were fused and it was difficult to distinguish them. This was especially so in countries that were ethnically homogeneous like Poland or Hungary: nationalism and democracy were the same, and it is understandable that both domestic revolutionaries and the Western observers preferred to emphasize the latter and to downplay the former (nationalism). We can distinguish the two only when we look at what happened in multi-ethnic federations. No theory  which sees democracy as being the guiding light of the 1989 revolutions can explain the fact that all communist ethnic federations broke up. For if democracy was the main concern of the revolutionaries there was no reason for such federations to break up once they became democratic. Moreover the break-up does not make sense at all within the broader liberal narrative which takes multiculturalism in addition to democracy (or even as a part of democracy) as a desideratum. If democracy and multiculturalism were the guiding forces of the 1989 revolutions then the communist federations of the Soviet Union, Czechoslovakia and Yugoslavia should have survived. The fact that they did not clearly indicates that the leading forces behind  the revolution were those of nationalism and self determination.

Further, as I mentioned, the theory of the democratic nature of the revolutions of 1989 cannot explain why all conflicts and wars have taken place in the dissolved communist federations, and why 11 out of 12, including the current war in Ukraine, are the ethnic conflicts about the borders. Such conflicts have nothing to do with the type of internal arrangement or government (democracy vs autocracy), but they have a lot to do with conquest of territory, nationalism, and desire of minorities which happen to be in the “wrong” states to have their own states or to join a neighboring state. These elementary facts are almost never mentioned in the mainstream story-telling. There is a good reason for it: they run against the simplistic “democratic narrative.”

The fourth theory takes its starting point from the third but goes a step further.  It does ask the crucial question,  ignored by all other theories: whence did nationalism that led to the break-up of ethnic federations come from? The answer has to be sought in the constitutional set-up of communist federations and in economics. As is well-known, communists tried not only to solve the economic problems linked with capitalism, but also the ethnic problem which has bedeviled Eastern Europe for several centuries. They followed broadly speaking the Austro-Marxist approach that evolved from arguing for personal autonomy to favoring national self-determination. This is why the Soviet Union was created as a federation of ethnically based states. The Soviet Union should have transcended the ethnic issue by giving each ethnicity its own republic, a homeland. The Soviet Union, in this view, provided the blueprint for a future global federal state that would also be composed of nationally-based states that fulfilled two functions: provision of national security to its members and fast economic development thanks to the abolishment of capitalism. The same approach was adopted by two other ethnic federations: Czechoslovakia and Yugoslavia.

That approach made lots of sense on paper and would have probably solved the ethnic problem had communism delivered on its promise of fast economic growth.

The reason why communist federations failed to solve the ethnic problem became much more obvious in the 1970s. The principal reason lied in the economic failure to catch up with the developed West. As that failure became more apparent, under the condition of a single party system the only legitimacy that different Communist party elites could seek was to represent themselves as the standard bearers of national interests of their own republics. In the absence of market relations and with arbitrary pricing, every republic could claim to have been exploited by the others. The republican elites latched on that to become more popular at home (in their republics), and, in the absence of elections, to garner some legitimacy. They were helped by the fact that the republican political structures were considered legitimate structures within the one party state. The republican elites did not thus have to go outside the existing political system (which would have rendered them liable for repression) to obtain the mantle of legitimacy and popular support.  Ironically had these republican structures not existed, that is, were the multinational states simple unitary states, then the local communist elites would not have had the tools nor the political basis from which to challenge the other elites and project themselves as defenders of national interests. By doing so, however, they also created the basis for the spread and acceptance of nationalist ideologies that eventually broke up the countries.

Thus to get a better understanding of the current war it is important to go back into history. What we observe today is caused by two factors: first, the unsuccessful economic development of the formerly communist countries, and second, the structural political setup that enabled republican elites to cover-up the economic failure by defending the nationalist interests of their constituents. The latter was both an easy solution, and was permitted by the way the regime was organized. If one argued for the return to capitalism, he was likely to end up dismissed from his job, or in jail. But if one argued that his republic was unequally treated, he was likely to climb up the ladders of power.

Legitimation of the national interest as such provied then for the legitimation of nationalist ideologies and ultimately for the desire for national independence, and the wave of nationalism that motivated and followed the revolutions in 1989. The moving force of these revolutions was the same in both ethnically homogeneous and ethically heterogeneous countries: it was nationalism. But nationalism in the first group of countries coalesced with democracy, and nationalism in the latter group of countries, because of unresolved territorial issues, led to wars. Russia was slow to move to a strong nationalist posture, and its reaction can be seen as delayed. But because of its size, large population and enormous military, it represents a much greater threat to peace once nationalism is dominant. For obviously a very small state with the same nationalist ideology is much less of a threat to the world peace than a state with 6,000 nuclear missiles.

Without seeing that the roots of the current conflict are historical and are lodged in the initial setup of communist federations and in the economic failure of the communist model of development, we are unlikely to understand the current conflict, all the unresolved one, and possibly even those that may come.

 

Four historico-ideological theories about the origin of the current war in Ukraine (part I)

             The first and the most popular theory sees the war as a war between democracy and autocracy. It is based on a premise that Russia is run by a dictator and that Ukraine is run by a president who is popularly elected. That view however neglects a number of facts including that the governmental change in Ukraine in 2004 was the result of a social revolt against the unfair elections while the 2014 change was a coup against a legitimately elected government. Moreover Ukraine was, before the war and even before 2014, the most unsuccessful state in the former Soviet Union. Not only was the level of corruption extremely high, the parliament largely dysfunctional, various oligarchs, including the one who helped bring Zelensky to power, rampant,  but Ukraine’s economic performance was probably the worst of all the republics of the former Soviet Union. While in 1990 the GDP per capita of Russia and Ukraine were quite similar, on the eve of Russia's invasion, Russia’s GDP per capita was more than twice as high as Ukraine’s. The view that somehow Ukraine represents, or represented, in Russians’ own view a desired alternative to Russia’s autocracy is belied by the facts:  the movement of population was in the “wrong” direction: Ukrainians moved to Russia and worked in Russia because the wages in Russia were about three times as high as in Ukraine, rather than Russians moving to Ukraine.

This naïve theory fails to address the fact that all conflicts in post-communist space took place in the former federal states that were dissolved along the ethically-based republican borders. And that 11 out of 12 such conflicts were the old-fashioned conflicts about the control of the territory. They had nothing to do with democracy or autocracy. The naive theory also disregards the fact that the autocratic states are not neatly aligned: for every Belarus that is aligned with Russia there is an equally autocratic Azerbaijan that is aligned with Ukraine.

The naive theory is popular in the first place because of its simplicity. It does not require any knowledge of history, neither of Russia nor Ukraine, it does not require any knowledge about communism, it does not even require any view (or even knowledge) of the reasons for the break-up of communist  federations. It is a theory based on ignorance, and supported by ignorance. Secondly, such a naïve theory is in the interests  of the more bellicose liberal and right-wing circles in the West who see the current conflict as a precursor to a much larger conflict pitting the United States against China. That potential conflict becomes much more acceptable if it is seen as a conflict of values, and not as a conflict about the geopolitical primacy.

          The second explanation of the current conflict takes the position that the war is the result of Russian imperialism. According to that theory, the Putin regime is the inheritor of the Tsarist  regime that sought to subdue and control the areas around Russia, from Romania (Moldova) to Poland, the Baltics and Finland. That theory is supported to a large extent by Putin's own remarks made just before the war that tried to provide a justification for it. Russia underwent, in Putin’s view, “the century of betrayals” where its historical territories  (including the Novorossiya, conquered by Catherine the Great that Putin openly revendicates today) were frittered away by communists. Putin thus attacks first Lenin for having given to Ukraine the Donbas, Stalin for giving the eastern part of Poland to Ukraine, and Khrushchev for transferring Crimea from Russia to Ukraine. The implication, often made by nationalist Greater Russian authors, is that the communist regime was an anti Russian “conspiracy” that dispersed left and right the traditional historical territories of Russia and gave them to other nationalities in order to assuage their feeling of grievance against Great Russian chauvinism. The theory thus interestingly unites those who argue that Russian imperialism is somehow innate to the Russian psyche, and Putin’s propagandists. The theory has some relationship to reality but the problem is that it does not address the origin of the current wave of Russian nationalism and imperialism. It might explain Russian nationalism of the nineteenth century but not Russian nationalism today, whose roots are much more plausibly explained by what happened since 1917.

Wednesday, December 14, 2022

A boy’s obsession with football in the Socialist Federative Republic of Yugoslavia

When I was a young boy, I was obsessed with football (soccer). What are the sociological and political origins of this obsession and what political role football played in Titoist Yugoslavia, I’ll leave for another post. This is just a story of boys—or rather of a boy—and of the love of the game.

I would like to divide the post in four parts: playing, reading, watching, and impersonating.

I was a mediocre player. My biggest success in elementary school was playing a couple of games on the B team of my school, in downtown Belgrade. It was a rather unexpected success for me. Objectively it was not a big deal, but I was content and proud of this achievement.

I played football almost every day, as soon as the weather, in early Spring got nice. These were not organized games. We played in a street, on concrete, among the parked cars. We would either make two small goals (using bricks as the goal posts) that required no goalie, or would play a somewhat strange kind of a game called “Viktoria” where one kid would be a goalie and two teams would play against each other, both trying to score on that one (bigger) goal. The way we played football reflected both the scarcity of space (we played in the middle of the street) and difficulty of finding goalies. Nobody wanted to be a goalie.

We would play for hours. I vividly remember being woken up by the sound of the bouncing ball in the street just below my window (we lived on the second floor). It was a delightful way to be woken up because it presaged, so loudly and so clearly, a whole day of shooting the ball, dribbling, drinking water afterwards (water never tasted so well!), arguing with other kids.  

As cars became more common and the traffic denser, we moved to play in two internal courtyards next to my building; rather small spaces, again on concrete. The game required lots of dribbling; there were no long passes, and there were always arguments about whether a goal was scored or not: it is difficult to tell if the ball passed over the brick, and thus presumably hit the post, or got in and the goal was scored.

Reading. I read all the football news I could find. In those days in Belgrade there were there sports newspapers. The general one which was daily (plus a Croatian sports daily which I also read), and two other, dedicated to football alone. They were published on Tuesdays and Fridays. On Tuesday morning, if that week my school was in the afternoon (due to the lack of school space, classes were held in two shifts: one shift in the morning, another in the afternoon, in alternate weeks), I would rush out even before breakfast to buy both newspapers. I particularly liked historical pieces about football before World War II and reports about Latin American players and clubs. I always thought, perhaps influenced by the remoteness and brilliance of Latin America, that Brazil, Argentina, and Uruguay were very special. No European team, club or national, ever seemed to me to be as exciting.

I read of course a lot about the Yugoslav first division but also about the Italian Serie A. The reason why Serie A was so much written about was because  the National Lottery was offering betting on domestic and Italian football scores. It was a copy of the Italian Toto Calcio. I played it from time to time, and one of close friends once did extremely well and earned (for us) a huge amount of money which, of course, he quickly wasted.

I also liked to read books about football; historical books but also books about kids of my age playing football. I remember a book I borrowed in our school library written by a Polish author, probably in the late 1950s. The title (in the Serbian translation) was “First half 0-1”  I still remember the kids from the book, practicing headers and free kicks, losing 0-1 in the first half, and then winning. It was a book about football, music, vespas and girls.

Watching. Belgrade is well known for the rivalry of the two teams, Red Star and Partizan. They were both created by communists after the revolution. Their political histories are, as I said, a matter for another article. My father, perhaps because of his love of the underdog and because he did not want to take political sides, decided that he supported a third, much weaker team, OFK Beograd. So, he would often take me to their games. They played on a small stadium, about half-an-hour walk from our apartment. We would leave after a Sunday lunch, walk to the stadium, and I would happily eat peanuts and watch the game.

Going to the Red Star or Partizan game in those days was hard. The stadiums were far from my house. They were big and forbidding.  We were too young to know where to buy the tickets, which bus to take to get to the stadium. So, these two big clubs, and their big stadiums, were almost mythical to me, even if we were all in the same city.

One of the best Red Star players, Dragoslav Šekularac, a star of the 1962 World Cup in Chile, transferred to OFK Beograd, after some of his turbulent fights with the Red Star management. My father took me to his first game for OFK Beograd and I remember an impossible crowd shouting, fighting, shoving, kicking to buy the tickets and get in. I do not think that I saw any of the game. Šekularac was immensely popular, and after the 1962 World Cup he had offers from big European clubs, in particular Juventus, to play for them. But in those days, Yugoslav footballers were not allowed to play abroad. When asked to make an exception for Šekularac, the then head of domestic security ruled it out by saying that Šekularac is a national treasure and that his duty is to entertain the working class.

Impersonating. In my love for the game, I organized my own international tournaments, including World Cups. I had a very elaborate system where, on a carpet (which with its rimmed ends does look like a soccer field with the athletic track around) playing cards would be players, and a small light coin would be a ball. I would direct them all, comment on the game imitating the radio reporters whom I admired, and then write in detail about these fantasy games. When I think about it now, I see it as a precursor to the electronic games that kids play today. The difference was that I had to create everything, from physically putting together the goal posts by using Lego blocks, to the teams, the spectators, and even do the reporting. I learned how to type then—in order to describe the fantasy football that I played in the evenings when my parents would go out and I could “commandeer” the entire living room.

My boyhood was soaked in football.

 


Sunday, December 4, 2022

Capital as a historic concept

             In a recent thesis written by Mauricio de Rosa, the last chapter is dedicated to the discussion of what is capital in Marxist and neoclassical worlds Mauricio very carefully translates Marx’s concepts of constant and variable capital into national accounts that we use now, and distinguishes Marx’s rate of profit from the neoclassical rate of return. (I am sitting on his dissertation committee and cannot say anything more).

             That chapter made me think (again) of the definition of capital. In the neo-classical world, capital is the sum of values of productive and financial assets. Because capital is extremely heterogeneous, we cannot express it in physical, but only in value terms. This has led to the Cambridge Controversy which petered out but was never resolved. In our usual work on wealth inequality, we also add the value of non-productive assets like jewelry, paintings etc. And for some assets that do not yield cash return, but are used by their owners (like housing) we add them too at their estimated value.

 

            Marx’s concept of capital is very different. Consider for example a shoe-maker who works in his own shop. In our usual work as neoclassical economists, we would estimate the value (price) of all the tools that he owns and include this in our national capital. For Marx though this is not capital. Capital is “the characteristic the means of production acquire when they are used to hire labor and generate surplus value”. Our shoemaker does not hire anyone. His machines are simply the means of production, the physical tools. They are not capital until he expands his store, takes over its management, and hires workers to work with the tools he owns. At that point, the tools become capital. For the national accounting, Marx’s concept of capital will therefore exclude the value of all machines and tools owned by either worker-owners (like our shoemaker) or cooperative firms and most of non-incorporated businesses. In countries where owner-worker sector is relatively large like in Latin America, lots of what is today considered “capital” would cease to be so. From household surveys we know that about a third of total income in Latin American countries comes from the owner-worker sector. We can then venture a guess than perhaps (a bit less than) one-third of what is today considered capital will be “lost”. Since that part of capital is less unequally distributed than the “capitalistic” capital, it is very likely that we would empirically find that the concentration of capital à la Marx is significantly greater than currently estimated.

 

            There is yet another, more difficult, issue. Marx, like all classical authors (Quesnay, Smith, Ricardo), takes wages to be advanced before the process of production begins. It means that if our shoemaker decides to become a capitalist, he not only would have to own the tools (which we already assumed he does), but enough cash on hand to hire workers. This assumption seems much more reasonable than the neoclassical (tacit) assumption that wages are paid at the end of the process of production. Why? Because if wages are paid at the end, then workers are co-entrepreneurs, since their (promised) wage depends on whether our shoemaker-capitalist is able to sell his shoes at the expected price or not. This is clearly unrealistic, or even absurd. Workers do not bear the risk of the enterprise; in fact, the crucial difference between labor and capital owners is that the risk is entirely borne by the latter. If workers’ wages have to be paid before the process of production begins, somebody has to have the wherewithal to do so. That somebody is a capitalist. This is his “variable capital”. Thus, in terms of national accounts and calculations of wealth inequality, we would have to allocate all wage income accrued in capitalist enterprises to their owners.  This means that the wages fund of, say Tesla or Google has to be imputed as capital, in its aliquot proportion, to all owners of shares in Tesla or Google. Marx’s concept of capital would therefore include a significant chunk of what goes under the name of labor income today.  If I am the owner of 1 percent of Google shares, my capital will not be only the current value of these shares (equal, in principle, to the expected discounted amount of profit), but also 1% of the wage-bill paid by Google. The problem here is the time period: should Google’s future wage bill be cumulated as the value of shares is?

 

Thus while we “lost” one part of capital before because we  did not include  the value of worker-owned tools and machines, we expand the concept of capital now by including all the wages paid by the capitalist sector. These wages are imputed to the owners who have in principle advanced them. Whether this would increase or not the calculated inequality of capital is not clear. Owners of shares in heavily  capital-intensive sectors where the wage-bill (the variable capital) is relatively small, will not register a large increase in their capital. The outcome in terms of  inequality will depend on whether more capital- or less capital-intensive sectors have more concentrated ownership. This is by the way, a topic which, regardless of whether you subscribe to Marx’s definition of capital or not, is worth exploring. It does not seem to have been studied.

 

            If we use the following notation, A = value of productive and financial assets used in the capitalist sector, B = value of productive and financial assets used in the owner-workers sector,  C =  non-productive wealth, D = wages paid in the capitalist sector, the current concept of capital is equal to  A + B, the current concept of wealth adds to that C, while Marx’s concept of capital would be equal to A + D.  It then becomes clear that whether neoclassical or Marxist concept of capital will be larger depends on the relationship between B and D. In less developed (capitalist) economies, the size of the self-employed sector may be large, B would consequently be high and D small. But in a hyper-capitalized economy, B might tend toward zero and D would be high.

 

In other words, as capitalism becomes more “capitalistic” the very size of what is deemed to be capital expands. This seems to make sense. In an economy composed of small producers, say thousands of small land-holders, the overall capital will be small. There will be very few capitalist enterprises (hence A is small) and wages paid by them will be a small share of the overall labor income. Thus we come to the conclusion that what is capital is historically-determined. When we compare capital in France and Cameroon, we are not just comparing how many tools exist in France and in Cameroon: we are really comparing how many tools are put to work to generate profit for their owners. There is, in conclusion, no capital as such, outside of the concrete reality and existing relations of production.

 

It will be interesting to have empirical estimations of Marx’s concept of capital and find how the capital/income ratios and inequality in the distribution of capital change with the definition of capital.

 

 

 

PS. Perhaps to understand a society, we should add the value of all tools (as neoclassics do), and also the value of all the tools that are used to hire labor (as Marx does). The 1st tells us something about the level of economic development, the 2nd about social relations.