30.6.10

THE WORLD IN CRISIS






The world is in permanent crisis, actually the accumulation of crisis at world level – make war the permanent state of affairs -economists talk of periodic crisis but the permanence of conflicts put the world in a permanent state of war [permanent war economy has their roots on military Keynesianism…].War is a moral and strategic disaster but what has not yet been fully recognized is that it has also been a process of reproduction that repeats itself…

29.6.10



Is Advice From the IMF Better Than Advice From a Drunk on the Street?


The World Cup and the Politics of Immigration

The World Cup has produced some mercurial moments, with defending champions Italy getting the early boot, all African teams but Ghana vanquished in the first round, and longshots like Japan and Slovakia advancing to the knockout round. We’ve heaped plenty of scrutiny on England’s lack of zest, South America’s well-deserved success, and France’s pathetic implosion. But the tournament has also provided compelling political undercurrents that deserve our attention.

For starters, several European countries with borderline draconian immigration policies have benefited massively from immigration. While the right-wing ratchets up its anti-immigrant rhetoric, it’s immigrants who have actually helped these countries achieve World Cup success. Take Germany. Without Mesut Ozil—the son of a Turkish guest worker—whose left-footed zinger against Ghana vaulted Germany to the second round, the Germans would not only be manifestly less imaginative but long ago would’ve been back in Deutschland nursing hefeweizen and watching the rest of the tournament on television. Brazilian-born Cacau has injected energy into Germany’s attack after securing citizenship last spring. His striking partner Miroslav Klose was born in Poland as was Lukas Podolski — and both were stars in Germany’s 2006 World Cup campaign.

In Switzerland, where leading political party, the Union Démocratique du Centre, has pushed anti-immigrant policy and tried to outlaw the construction of minarets, Gelson Fernandes, who was born in Cape Verde, scored the gamewinner against mighty Spain while Congo-born Blaise Nkufo has provided a consistent, muscular presence up front. And where would Portugal be without their skillful Brazilian-born trifecta of Pepe the enforcer, striker Liedson, and midfield stalwart Deco whose play was pivotal in getting Portugal to South Africa in the first place? Despite racist wailings from Arizona, the US squad has also benefited from immigration. Jozy Altidore—who was vital to US success in this World Cup—has parents who emigrated from Haiti. Altidore regularly wears a wristband with a Haitian flag on it to acknowledge his heritage — to be sure, the wristband also has an American flag on it.

Such immigrant success on the World Cup stage has induced a wave of Orwellian doublethink, with right-wing hyper-nationalists football aficionados simultaneously holding two contradictory ideas in their skulls at the same time. Veins bulging from their necks as they root for the home team, these fans spout xenophobia by day and don the national team strip by night.

But European reactionaries and conservatives aren’t the only ones suffering from doublethink. I suffer from it, too, though in a different sense. I realize South Africa is getting reamed by FIFA, with record profit outflows leaving the country and extravagant stadium building prioritized over the basic needs of the citizenry. FIFA and its boosters have trotted out the standard-issue, trickle-down claptrap used to rationalize all international sporting extravaganzas. There’s also the unsavory practice of corporate sponsors fiendishly enforcing their commercial pole position, hounding ambush marketers as if they were abject murderers. All together it’s red-card-abominable and I fully support the dissidents who are marching against these serious injustices.

And yet my heart can’t but help get fully immersed in the ups and downs of this World Cup. Sure, I love the game of football, but I also believe football players have the potential to press us collectively toward a more just society. Terry Eagleton recently wrote, “for the most part football these days is the opium of the people, not to speak of their crack cocaine.” The subtle key to that passage is “for the most part.” In fact, numerous footballers themselves have sliced against this zeitgeist, engaging in a wide array of charity work. Holland’s Dirk Kuyt runs a foundation that makes sport more available to the disabled. Joseph Yobo of Nigeria has done significant social-uplift work with youth in the Niger Delta, doling out more than 300 educational scholarships. Fellow Super Eagle Nwanko Kanu runs a foundation for people with heart ailments.

But charity work is not the same thing as taking a strong, public stand on controversial issues like immigration or war, let alone engaging in social-justice activism. Due to the hyper-commercialized nature of football, players don’t want to alienate sponsors (existing or potential), aggravate team owners and administrators, or deflect the venom of fans who screech that they should just shut up and play. It makes more sense to go the route of David Beckham, becoming a one-size-fits-all, polysemic athlete who spectators can read in any way they wish.

Yet I can’t let go of the glimmering hope that footballers could speak out. You may be mumbling to yourself that the odds of this happening are about as good as those of French coach Raymond Domenech being named World Cup Manager of the Year. But players have moved beyond charity work in the past, with Didier Drogba employing his football acumen as a platform to help reconcile political factions in the Ivory Coast.

And sportswriter Dave Zirin is right: “Sport is, at the end of the day, like a hammer. And you can use a hammer to bash someone over the head or you could use it to construct something beautiful. It's in the way that you use it.” In these final days of the World Cup, I’ll be relishing the luscious mélange of teamwork, individual skill, and artistry that only football can deliver. But I’m also hoping that a big-name footballer will brandish his socio-political hammer to build something bigger than himself and indeed bigger than the FIFA World Cup Trophy.

Jules Boykoff
The World Cup and the Politics of Immigration

U.S. Army soldiers provide security while Afghans walk through the streets of Carabar village of Parwan province, Afghanistan.

Potholes, Petroleum, Pashtuns: Afghanistan as a Local Issue

by: Bernard Weiner, The Crisis Papers | Op-Ed

Yes, all politics is indeed local -- at the same time it is national and international. The interconnections are more numerous and important these days.

This is true for the major regional problem besetting us today. The bluefin tuna and other large fish that normally spawn in Gulf of Mexico waters probably will not show up this year »

Competing Ideologies: G20 v US Social Forum

Established in 1999, G20 finance ministers, central bank governors, and, at times, heads of state meet semi-annually to “discuss key issues in the global economy,” the initial 1999 meeting in Berlin, hosted by German and Canadian finance ministers.

G20.org calls itself “the premier forum for our international economic development that promotes open and constructive discussion between industrial and emerging-market countries on key issues related to global economic stability,” saying it “support(s) growth and development across the globe,” – or does it?

The reality suggests otherwise about a political power elite gathering to review past achievements, challenges, and prospects for greater exploitation of world markets, …

TORONTO G20 - THE SHAPE OF THINGS TO COME

28.6.10

Football: the people’s game?


Some football clubs have well organised anti-fascist and anti-racist supporters’ groups, a response to extreme right-wing groups growing within fanbases. Photo: Photo: Hsv-forum.de

The 2010 FIFA World Cup in South Africa began its final round of 16 on June 26. it came amid the unrelenting drone of vuvuzela horns, the knockout of big teams such as Italy and France, and street protests by local residents angry at the 40 billion rand the government has spent on the corporatised event.

Meanwhile, South Africa’s poor suffer substandard housing and access to basic services.

Football, or “soccer” in Australia, is the “world game”, played by millions of people around the world and watched by hundreds of millions more. But is it truly the “people’s game”?

On its own terms, football is an often thrilling exhibition of human skill. A high quality football match commands comparisons with art. Little wonder, then, that it is so popular worldwide.

However, the game is accompanied by a series of undeniably ugly aspects. The issue of football hooliganism, especially in Europe, is well-known. Many clubs, with their tight-knit fan groups, provide a fertile breeding ground for neo-Nazi and extreme right-wing groups, such as the English Defence League.

On an international level, support for national teams all too easily finds expression in crude racism.

A Dutch “supporter’s costume” designed for the World Cup in South Africa depicts a Dutch supporter riding on the shoulders of a Black South African. The accompanying advertising includes instructions to “steer” the “African” around by pulling his ears.

Many players in the French national team are of African and Arab descent. When France won the 1998 World Cup, this diversity was widely celebrated as evidence of France’s healthy multiculturalism and tolerant society.

Yet when France were bundled out of the current World Cup in the first round after conflict between players and the coach, there was a chorus of barely disguised racism.

Media headlines in France declared members of the team “un-French” due to their ethnic background and upbringing in the largely immigrant impoverished Parisian suburbs that were the scene of violent protests several years ago.

The corporate domination of the sport can also leave a bad aftertaste. The huge growth in club debts in English football since the Premier League was established in 1992 — worsened by the global financial crisis — has sent a number of clubs to the wall. Even England’s two biggest clubs — Liverpool FC and Manchester United — are exposed to dangerously large debts.

South Africa has handed over part of its legal system to FIFA — football’s world governing body — for the duration of the World Cup. Special “World Cup courts” have been charged with hunting down merchandise counterfeiters and petty criminals at the event.

Few charges have been laid, however, and many of them are highly questionable. Among those facing charges are two Dutch women, arrested for wearing clothes designed by a company that isn’t an official sponsor of the World Cup.

South African workers have also tried to use the World Cup to highlight their grievances. After the group match between Germany and Australia, ground staff held a protest march against pay and conditions. They were violently attacked by riot police with teargas and batons.

Leading up to the World Cup, the South African government cleared the streets and township slums to “clean up” the country’s image for the media and tourists. Tens of thousands of poor South Africans have been forced to live temporary camps.

In some ways, football continues the old colonial relationships too. Across Africa, hundreds of thousands of young boys dream of escaping poverty by being selected for a wealthy European club.

Few make it, but thousands of families are duped into handing over their savings to fraudsters who promise the world.

In the face of all this, it would be easy to write football off as nothing more than a modern-day “bread and circuses” that distracts people from fighting for a better society.

This view ignores the fact that people have always sought enjoyment through a wide-range of cultural forms. Rather than an argument against the game itself, football’s ugly side is a threat to this basic right.

It also ignores another, lesser-known, progressive side to the game. Teams such as German club FC St Pauli and English club Aston Villa, for example, have well organised anti-fascist and anti-racist supporters’ groups, regularly organising protests against racism and far-right groups.

Spanish club FC Barcelona, run as a public cooperative, regularly gives money to UNICEF for the right to wear its logo on its jerseys — the direct opposite of most sponsorship deals. Aston Villa does the same for children’s hospice Acorns.

Thousands of Liverpool FC supporters, outraged at the mismanagement of their club, have set up a registered “supporters’ union” with the aim of putting the club under fan ownership.

The union — called the Spirit of Shankly — features a quote by the legendary Liverpool coach Bill Shankly on its website: “The socialism I believe in is everyone working for each other, everyone having a share of the rewards. It’s the way I see football, the way I see life.”

This left-wing influence in football is nothing new. In the 1930s, the German club Unterhaching — based in Munich’s working class fringe — was disbanded by the Nazis for being “politically unreliable”.

Football has also played an important role in national liberation and anti-racist struggles, especially in Africa.

During its anti-colonial war against France, the Algerian National Liberation Front (FLN) formed a clandestine national team from some of the best Algerian players in the French league.

FIFA refused to recognise it, but the team was a huge propaganda victory for Algerian liberation struggle. The team won 65 out of the 91 matches it played against teams from Africa, Asia and the Soviet Bloc between 1958 and 1962, when Algeria won its independence.

At the 2010 World Cup, the Algerian team prepared (unsuccessfully, as it turned out) for their match against England by watching the classic film about the anti-colonial struggle, The Battle of Algiers.

Football also played a vital role in the struggle against apartheid in South Africa. Anti-apartheid activists imprisoned on the infamous Robben Island used the game as a means of maintaining political organisation and overcoming internal divisions.

In 2005, the Italian club Inter Milan — once associated with right-wing politics — accepted a challenge to play a solidarity match with the left-wing Zapatista rebels from Mexico. The club also provided funds for sports, water and health projects in the Chiapas region of Mexico run by the Zapatistas.

In the lead-up to the World Cup, the Argentine football team were photographed holding a banner calling for the Mothers of the Plaza de Mayo — the mothers of the 30,000 young men and women “disappeared” under the Argentine dictatorship between 1976-1983 — to be awarded the Nobel Peace Prize.

Argentine coach Diego Maradona is an outspoken supporter of the revolutionary governments of Cuba and Venezuela.

Like club sides, national teams are no longer as homogenous as they once were due to the effects of immigration. The English, Dutch, Swiss national sides all include players from a range of backgrounds.

In the German squad, one was born in Brazil, two key strikers are from Poland and another player is of Turkish descent.

The Boateng brothers, Gerome and Kevin–Prince, hold dual German-Ghanan citizenship, but are playing in this World Cup on opposing sides — one for Germany, the other for Ghana.

Football — and all sport — is as much a battleground for social justice as any other arena.

When watching the World Cup, remember the victimised South African township dwellers, the ground staff who make the games possible and the sweatshop workers who made those stupid balls. And remember there is more to football than flags, anthems and cups.

Football: the people’s game?

27.6.10

SPAIN’S INVISIBLE ARMY







Along a front that extended from Warsaw to the Adriatic,Napoleon’s advancing forces met with famously little popular resistance. [1] At Ulm or Austerlitz, Jena or Friedland, the Grande Armée confronted—and defeated—royalist forces; the treaties of Pressburg or Tilsit were not contested from below. Constitutional and legislative reforms were consolidated across the satellite states ruled by the Emperor’s family members—his brother Jérôme, King of Westphalia; his stepson Eugène de Beauharnais, Viceroy of Italy; his sisters, Elisa and Caroline, in Lucca and Naples—as well as the Confederation of the Rhine, the Grand Duchy of Warsaw and the Swiss Confederation, closely linked by treaty obligations. Local elites and populations broadly accepted, and sometimes welcomed, the French imperial system. Between 1805 and 1812, anti-Napoleonic revolts (in Naples, Sicily or the Tyrol, for example) were for the most part relatively localized disturbances. It was only after the debacle at Moscow that significant popular forces were mobilized against the French in the German territories, leading to the Grande Armée’s defeat at Leipzig in 1813.

Spain, of course, provides the most dramatic exception. Here Napoleon’s forces, initially expedited across the country in 1807 to hold Portugal’s ports against the English, encountered an insurrectionary resistance that harried them relentlessly for six years, as the ‘accursed war’ drained the Grande Armée’s resources. Napoleon’s brother Joseph, installed as King of Spain, barely dared to leave his palace. The emancipatory reforms announced by the Emperor remained a dead letter. ‘The system I pursued in Spain would eventually have been for the good of the country, yet it was contrary to the opinions of its people, so I failed’, Napoleon mused later. The reality was a good deal more complicated, as indicated by a now vast literature on the Peninsular War—including a plethora of books, papers and conferences which marked the 200th anniversary of 1808.

Yet, as Ronald Fraser argues in Napoleon’s Cursed War, no one had yet delved into the experiences of ordinary people as they struggled, suffered and contributed to the resistance to French occupation. Fraser’s oral history Blood of Spain remains unchallenged as a unique insight into the complexities of the Spanish Civil War, by recalling the memories of survivors. In tackling the Peninsular War, he faced a paucity of written sources, given the extent of illiteracy in Spain at the time—perhaps as high as 80 per cent. He thus had to piece together a mass of fragments, untangling social, economic, political and other complexities, from an impressive array of sources: manuscripts in municipal archives and the Biblioteca Nacional; military archives in Madrid and Segovia; manifestos, decrees and ordinances; personal letters, diaries and notebooks; memoirs, pamphlets, broadsheets; theatre-attendance records and censuses, as well as an exhaustive bibliography of primary and secondary material. Unsurprisingly, it has been hailed by leading scholars in Spain as a milestone in the historiography of the war.

Fraser begins with a bravura survey of Spain’s social order on the eve of the Peninsular War, embracing in its sweep the complexities of the country’s principal institutions as well as the outlook and living conditions of its different social estates. Having been the dominant European power in the 16th century, Spain had then suffered 150 years of decline; yet it remained the world’s largest colonial empire, whose bounties helped prop up the absolutist order. At home, Carlos IV ruled over a ‘palimpsest of kingdoms, principalities and provinces’, in which the overlapping jurisdictions of feudalism combined with local particularisms to thwart any attempts at centralization. The Church, untouched by the Reformation, was in Fraser’s words ‘the sole effective national institution’, with considerable sway over the daily lives of the populace, and an income that by the mid-18th century accounted for one fifth of the gross domestic total. The nobility was the ‘essential vertebra’ of a society governed by notions of status; yet, though nobles dominated the army—which was in consequence top-heavy with aristocratic officers—they were largely excluded from the functions of state, their pre-eminence resting instead on landownership and the feudal extractions of señorío.

Turning to Spain’s commoners, Fraser notes the growth of wholesale merchant classes in Madrid and the coastal regions. Small in number compared to their counterparts in Britain or France, they were keen to preserve the absolutist order rather than challenge it, since they benefited so handsomely from the Spanish monopoly on trade with its New World possessions. By contrast, the existence of the rural working population and urban lower orders was harsh and precarious. The late 18th century had brought outbreaks of disease as well as subsistence crises; average life expectancy stood at just under 27 years. Village life was marked by fear of crop failures and hunger, as well as a process of proletarianization that forced thousands off the land: ‘by the turn of the century’, according to Fraser, ‘just under one half of Spain’s nearly 1,700,000 land-working population consisted of landless labourers’. Many of these flooded the cities, in which poverty was rife, conditions unsanitary, and opportunities for work fiercely guarded by a socially stigmatized artisanate.

In Fraser’s account, the character of the ancien régime ‘deeply and inevitably conditioned’ the war which was to shake its very foundations, before ending with absolutist restoration in 1814. The origins of the war are complex. Spain had joined the royalist mobilization against the French Revolution in 1793, but after this concluded unsuccessfully in 1795, it allied with France’s Directorate against Britain. Though the decade of intermittent warfare that followed proved financially ruinous for Spain, attempts to withdraw from the fray brought demands from Paris for an equally onerous subsidy. After the Spanish navy’s defeat at Trafalgar in 1805, Napoleon sought to curb British maritime power through a continental blockade; it was for the full enforcement of this that the Grande Armée was dispatched to seize Portugal’s harbours in 1807. The Spanish government had agreed to allow 25,000 of Napoleon’s troops to cross the country; however, this initial force was followed at the beginning of 1808 by another 100,000 soldiers who remained on Spanish territory, seizing the ports of Barcelona and San Sebastián and taking control of several key fortresses—‘without the government’s permission or certain knowledge of [Napoleon’s] military objectives’.

Yet the French were not immediately received as occupiers. What changed matters was Napoleon’s manoeuvring to remove the Bourbons from the Spanish throne. At the centre of events, and acting as a lightning rod for popular discontent, was the figure of Manuel Godoy, Spain’s first minister since 1792 and royal favourite (and purportedly the Queen’s lover). Universally loathed not only for his undeserved promotion and moral laxity, but also for the sufferings inflicted on the country by his diplomacy, Godoy was removed in a night-time palace coup at Aranjuez in March 1808. Popular revulsion at his ministership was so strong that the king who had empowered him, Carlos IV, was forced to abdicate in favour of his son, Fernando VII. Six months earlier, Fernando—described by his own mother as ‘sly and cowardly’—had plotted to have Godoy removed, writing a flattering letter to Napoleon to secure the Emperor’s support. The plot failed, but once Fernando had been anointed King, he again sought recognition from Bonaparte. The intrigues of the preceding months, however, ‘had definitively determined Napoleon to be rid of the Bourbons’. In April, he lured first Fernando and then the entire Spanish royal family across the border to Bayonne, and within two weeks had forced their abdication in favour of his brother Joseph. The royal family were to while away the war years on Talleyrand’s estate at Valençay, bowing to Napoleon while Spain heroically resisted him in their name.

There had already been outbreaks of popular anger against the French, most notably with the Madrid rebellion of May 2–3. Suppressed by the French commander, Murat, the insurrection was followed by fierce reprisals from the occupiers. News of the Bourbons’ removal from the throne spread quickly, however, and within three weeks a series of provincial uprisings had taken place, as the resistance flared into life. In the vacuum left by Fernando’s abdication, insurrectionaryjuntas were established in a string of cities. Perhaps the most original and unusual political response to the war, there were eventually some twenty-nine of these scattered throughout the country. Fraser analyses them in some detail, noting their social composition: municipal authorities, local clergy and the military tended to be best represented; the labouring classes and merchants barely figured. They marked a distinct rupture with the old order: ‘Spain was again split into its constituent kingdoms and regions, each of them autonomous and sovereign’, he remarks. By September 1808, however, these regional bodies had been subordinated to a central Junta Suprema designed to co-ordinate the resistance on a national scale. Later in the century Francisco Pi y Margall, a disciple of Proudhon and an inspiration behind Spain’s First Republic of 1873, was impressed by the juntas, arguing that Spain had been virtually a federal republic during the war, and called for a revival of the historic provinces along similar lines. It could be argued that Pi was prophetic in this regard, since today’s autonomous communities—established in reaction to the centralist Francoist state—closely coincide with those provinces.

Napoleon’s Cursed War provides a largely chronological account of the war ‘from below’, focusing for the most part on its first two years. This was its ‘most tormented’ period, in Fraser’s words, encompassing the spread of the resistance and the devastating response from Napoleon: deployment of 250,000 troops, who were in turn constantly beset by an ‘invisible army’ of guerrillas. Fraser demolishes a number of myths which, over the course of the 19th century, became part of the historical image of the popular resistance—the figure of the rural guerrilla its most prominent symbol. While it is true that it was the participation of the rural population that transformed the struggle into a ‘nationwide insurrection’, much of the resistance was urban-based—as most strikingly indicated in the Madrid May 2nd rising.

The urban aspect of the war is reflected in the number of sieges, which makes the Spanish experience unique in comparison with other Napoleonic campaigns. The most famous were the two horrific sieges of Zaragoza, a key city on the eastern line of communication from France, in the summer of 1808 and winter of 1808–09. These are described in graphic detail in Fraser’s gripping accounts, which follow at close range the progress of the battles and vividly evoke the atmosphere within the city’s walls. On the eve of the first siege, a terse demand from the French encamped outside—‘Capitulation’—received a determined reply: ‘Cold Steel and War’. French artillery rained destruction on the city. We read of the bombing of the hospital: patients ‘ran, hobbled or staggered into the streets in their nightshirts with their bandages, crutches and splints . . . To add to the horror, several lunatics escaped and ran shouting, singing and wildly laughing amidst the corpses. “Hell opened its gates that day”, wrote an eyewitness.’ Fraser then relates how, after the walls had been breached, the fighting ‘turned into house-to-house combat, the French often occupying one floor, the defenders the next; staircases had to be stormed one by one, and party walls knocked through in order to advance’. Zaragoza’s resistance held firm, but four months later the French returned. This time the bombardment was still more severe—‘in one week in January alone six thousand bombs and grenades fell on the city’—and the fighting within the walls ‘even longer and more ferocious than during the first siege’. It raged not only in the streets but ‘in underground tunnels, streets, houses and rooftops’. Food became scarce, and typhus and hunger so decimated the city’s inhabitants that by the time it surrendered in January 1809, ‘6,000 corpses were said to be lying in the streets awaiting burial’, and ‘the infected air was suffocating, dense smoke covered the sky’.

Prominent in Fraser’s account are instances of heroism on the part of civilians. For example, ‘armed only with a knife, a seventy-six-year-old carpenter attacked two French soldiers who were sacking a house after assassinating its inhabitants; he killed one and, seizing his musket, took the other prisoner.’ Another celebrated incident involved Agostina Zaragoza, who, after the gunners—including her fiancé—had been killed, fired a cannon on the advancing French. She exemplifies the extraordinary and unique role played by Spanish women throughout the war, for which there were very few parallels elsewhere during the Napoleonic period. It is noticeable, also, how women were drawn into industry—especially the textile factories in the environs of Barcelona, called the Manchester of Spain, where a proto-industrialism had taken root earlier in the 18th century. Here the character of the resistance was significantly inflected by local particularities—not least among them the prior existence of Catalan self-defence militias, thesometents, who provided a strong foundation for guerrilla warfare. Also specific to the Catalan case was the fact that the French had occupied the largest city, Barcelona; as a result, the insurrection here was from the outset ‘more territorially dispersed than elsewhere’.

The war in Catalonia was ‘longer, more bitter and more costly in lives and property than in almost any other part of Spain’, according to Fraser. It is notable that there were four sieges in the region, including that of Gerona, which held out for seven months in 1809—the longest siege apart from that of Cádiz, which lasted for two and a half years. The latter’s ordeal began in the summer of 1810, when for practical purposes the Atlantic port became the capital. The Junta Suprema had by this time dissolved: it had been evacuated from Madrid to Sevilla in December 1808, and then fled before the French advance into Andalusia at the beginning of 1810, handing power to a regency. That September, however, pressure on the regents—most notably from the New World colonies—forced the convocation of the Cortes, a medieval body, rarely summoned, in which only Church and nobles were originally represented. Now, in the midst of occupation, some 233 deputies from a cross-section of Spanish society—minus the lower orders—assembled for a Constituent Assembly in Cádiz. It became the scene of endless, often factious debates on what became the Constitution of 1812 which, whatever its shortcomings—and there were many—became a model for later constitutions in Portugal and Greece and, it has even been suggested, that of the Russian Decembrists of 1825. French attempts to starve Cádiz into submission, meanwhile, foundered on the city’s geography: located on an isthmus that was ‘virtually impregnable by land’, as Fraser notes, it was always able to bring in supplies by sea, and the blockade was eventually lifted in August 1812.

Other significant sieges included those of Badajoz, Burgos and San Sebastián; these were invested by the British, who had landed in Portugal in 1808 and, having secured its coast and broken Napoleon’s continental blockade in 1809, remained on the other side of the border until 1812. The storming of Badajoz that April became infamous due to the mayhem and plunder carried out in the captured city. ‘It made no difference’, comments Fraser, ‘to the drunken soldiery that they were murdering, pillaging and raping their Spanish allies; even worse was that Wellington took no serious measures to prevent what, in effect, was the most horrifying night of the British Peninsular War’. So deeply ingrained has been the memory of the horrors of that night that, when the Royal Fusiliers recently requested to erect a memorial, they were refused. The siege of Burgos in the autumn of the same year was a complete failure, partly due to Wellington’s misjudgement and the lack of a siege train; he was compelled to withdraw to Portugal in a rout during which discipline collapsed and many soldiers deserted. (Did any British soldiers join the guerrillas, as many Spanish and French deserters did on other occasions?) In the late summer of 1813, the British besieged San Sebastián, which was also sacked—the victims, once again, being Spaniards.

Mutual antagonism between supposed allies is a theme running through the book. For six continuous years, Spaniards had to resist French occupation, and for much of that time without assistance from their British ally—for centuries, of course, Spain’s traditional enemy. British motives were generally suspect, especially when Spain’s American colonies began to revolt, as London’s merchants were the main beneficiaries of the consequent opening up of trade; for the next century, Britain was to dominate the Spanish American market. The troops of the Protestant power showed little respect for Catholic sensibilities, sacking churches and raping nuns; and Wellington held the Spanish army and its generals in low esteem (though Charles Esdaile has sought to rectify the bad press it has received in his analyses of the latter years of the war). Ordinary Spaniards, for their part, would have been puzzled as to why Wellington should on a number of occasions have retired to the impregnable Lines of Torres Vedras north of Lisbon. Portugal is marginal to Fraser’s main concerns, but Wellington would have been at a loss without Portuguese troops which, under the management of William Beresford, had been transformed into an efficient fighting force.

In contrast to their suspicions of the British army, Spanish attitudes towards the navy were very different. Wellington’s own view was unequivocal: ‘If anyone wishes to know the history of this war, I will tell him: it’s our maritime superiority.’ Without the navy, the Portuguese royal family and court could not have been evacuated to Brazil when the French army was at the gates of Lisbon in 1807. It was the navy, too, that prevented the French from seizing Cádiz, and was crucial in virtually expelling the occupying forces from the northern coast, capturing Santander, which facilitated the provision of supplies to the army. Operations along the east coast were less successful, failing to break the French hold on Barcelona. The British fleet played a pivotal role by supplying the guerrillas with massive shipments of arms and ammunition, as well as disembarking fighters along the coast, finally making possible, through Navarre, the invasion of south-western France in the autumn of 1813. More mundane, but no less important, was the contribution it made by transporting not only supplies and troops from England, but also bullion: specie was necessary if the army was not to live off the land, as the French did; soldiers’ wages had to be paid, and funds were granted to many juntas. The navy also took soldiers to fight in the United States in the War of 1812, bringing back wheat in that famine year.

Napoleon showed very little understanding of Spain. Of all his mistakes, the greatest was arguably his view that armies should live off the land. Nothing so alienated the rural population, which soon became a good recruiting ground for guerrillas. By 1823, when the grandiloquently-named Hundred-Thousand Sons of St Louis were dispatched by Louis XVIII to support Ferdinand, the French had learned the lesson and, by paying for their provisions, were able to perambulate through to southern Spain with scarcely a shot being fired. Another fatal error was to appoint generals without coordinating their commands, with the result that they were constantly at loggerheads. Nor did Napoleon seem to appreciate the challenge of the guerrillas. At their height in 1811–12, there were 330 guerrilla formations, comprising around 55,000 men—almost as large as the regular army. Fraser devotes a chapter to their composition and achievements in battle. Where origins and occupations are recorded, these were more often than not plebeian. Fraser lists some prominent examples with their noms de guerre:

These formations, often attired in villagers’ clothes topped with trophy shakos and imperial uniforms, inflicted serious casualties on the French: Espoz y Mina’s divisions killed an estimated 16,745 enemy soldiers between 1810 and the end of the war, or 9.2 a day. In the Ebro valley in 1811–12, the average reached 35 a day. By 1812, some of Napoleon’s generals—notably Marshal Suchet—had persuaded him that guerrillas were now the major threat, and, since the Emperor was preoccupied with Russia, the Army of the Ebro was formed under General Reille, a veteran counter-insurgency general. For once, other generals ordered to help did so, thus creating the largest single army during the war. But by this time, the nature of guerrilla bands had changed: some had become institutionalized into recognizable regiments, most notably that of Espoz y Mina in Navarra.

The Emperor also failed to take Wellington seriously, scornfully describing him as a ‘sepoy general’, after his experience in India. What he never seems to have realized was that Wellington, recognizing intelligence as the key to military success, was working with the guerrillas—most notably through George Scovell (whom Fraser does not mention), a brilliant code-breaker who was able to provide a constant flow of vital information. Furthermore, neither Napoleon nor his brother Joseph learned any lessons from the latter’s apprenticeship in Naples, where he had been king from 1806–08. There can be no greater irony than that his later experience of Spain was foreshadowed during his Neapolitan reign: first of all in the fire-power and efficiency of the British army, which had crushingly defeated a French force of 6,000 in a matter of minutes at the Battle of Maida in 1806. Second, after the British withdrew to Sicily, 40,000 French soldiers were tied down by formidable guerrilla resistance throughout the whole of Calabria, which was ruthlessly suppressed by Marshal Masséna.

Napoleon bitterly regretted appointing Joseph as king, and constantly interfered with him; despite his desire to demonstrate independence from Paris, Joseph’s ability and authority were constantly in doubt, especially among the generals, who objected that he did not value military glory. When Joseph finally did take command of an army at the Battle of Vitoria in 1813, it was a disaster, and he fled to France never to return—and probably never to hear performed Beethoven’s ‘Vitoria Symphony’ celebrating France’s last great defeat on Spanish soil. Of all the Napoleonic brood, Joseph was the most attractive. In Fraser’s closing words, ‘it could be said that he was one of the truly honourable, although ineffectual, protagonists of this long, often savage and, for both sides, ultimately cursed war.’

The book concludes on a pessimistic note, as indicated by the title of its final chapter, ‘Military Victory and Political Defeat’. In the end, Spain had fought against Napoleon only to restore an absolutist monarch. In March 1814, Ferdinand returned to universal acclaim, even in Zaragoza, and rescinded the 1812 Constitution; ‘six years of ferocious reactionary repression’ ensued, in which ‘the Inquisition was restored, freedom of the press abolished, the pre-war councils of state re-established and municipal government again left in the hands of the old oligarchies’. During the course of the 19th century, Spain became in many ways the most militarized country in Europe, as armies marched and counter-marched across the central provinces in the Carlist wars, battles over the royal succession which lingered on from the 1830s to the 1870s. The country’s image overseas altered, too, as Romanticism gathered momentum, with writers such as Mérimée, Gautier, Borrow, Washington Irving and others regarding Spain as a pre-industrial paradise.

What of the Peninsular War’s effects on Napoleon’s campaigns elsewhere, especially through the withdrawal of French troops to fight on other fronts? Esdaile has argued that the Peninsular War was always a sideshow for the Emperor, whereas it was seminal to both Spain and Portugal. On the other hand, for David A. Bell, author of The First Total War (2007), Spain was ‘the famous “ulcer” that ate away at the vitals of the Empire, even before the limbs succumbed to Russian frostbite’—though he gives the ultimate credit for Napoleon’s defeat not to the guerrillas but to the British. Whatever the verdict on the War’s significance for Napoleon’s rule, there can be no disputing its centrality to Iberia, as Spain and to a lesser extent Portugal lost much of their empires in its aftermath. For Spain these losses were drastic: all its colonies gained independence except Cuba, Puerto Rico and the Philippines. The first of these became an El Dorado for Spain, thanks to the sugar revolution and slavery, which lasted until 1885. Cuban wealth stimulated a flow of immigrants from the metropole, to the extent that there was scarcely a Spanish family without a relative on the island. Indeed, Spain became to a large degree a remittance society—hence the initial but short-lived enthusiasm that greeted the outbreak of war against the United States in 1898.

No one wishing to understand the Peninsular War in all its multifarious aspects can afford to ignore this book. It is dense reading, but its structure includes numerous explanatory interludes which are not simply light relief, but are unusual and highly revealing. There is the case of a Scottish Benedictine monk, recruited as a British agent to repatriate General Romana and 9,000 Spanish troops stranded in Denmark; or that of an ex-friar turned Napoleonic agent, who later achieved notoriety with an anti-clerical novel centring on a lecherous archbishop’s designs on an innocent girl. Other episodes include family stories and popular folklore, as well as a balanced analysis of the significance of Goya. Pointing out that Goya spent almost all of the war in Bonapartist Madrid, Fraser notes that his celebrated Disasters of War engravings were not, as is commonly supposed, documents of events he witnessed—despite Goya’s marginal comment on many of the plates, ‘This I have seen’. The artist was ‘deeply ambivalent about the war, its aims and means’: he was horrified by ‘the cruelty of the supposedly “civilized” French’, while on the other hand ‘the patriots’ defence of religion and reliance on the Church did not enamour him to their cause’. He was alarmed, too, by the spectre of popular revolt. Many of the engravings feature armed villagers engaged in brutal acts against French troops; in one, ‘a pile of partially stripped corpses, possibly French soldiers by their remaining long trousers’, is accompanied by the caption ‘This is what you were born for’. Fraser continues: ‘above the dead an unarmed villager staggers forward, blood spewing from his open mouth, arms outstretched in a typical Goya gesture and about to fall on—and join—the corpses.’ The images, which echo the French engraver Jacques Callot’s 1633 ‘Miseries of War’, depicting hangings and rapes in the Thirty Years’ War, were finally published posthumously in 1863.

Throughout the detailed political and economic analyses and interludes which constitute the bulk of the book, one never escapes from the realities of war and its crippling costs, both in money and misery. Diseases such as malaria, yellow fever and typhus were endemic; starvation haunted the land throughout, as did violent extremes of weather (unique, it would seem, to Spain). But the dominant feelings are of fear and hatred: fear of all the armies—French, British and Spanish—and of marauding bandits and rapacious guerrillas; and popular hatred for the foreign occupation forces living off the land, destroying villages and churches and engaging in wanton killing.

In an all too short epilogue, Fraser refers to over 1,000 Spanish exiles living in London. In this connection it is worth mentioning Manuel Moreno Alonso’s exhaustive 1997 book, La forja del liberalismo en España: los amigos españoles de Lord Holland, 1793–1840, based on seven years’ study in the UK. Two people in particular are relevant to Fraser’s discussion. The first is Joseph Blanco White, a Sevillan priest who fled to England in 1810, where he stayed until his death in 1841, eventually joining the Unitarian Church in Liverpool, which was in the vanguard of social reform there. He continued to be critical of Spain as a political entity—‘miserably oppressed as it was by government and church’—and in an 1835 letter to Lord Holland protested that the country ‘would have improved under Joseph Bonaparte, but she is sure to sink more and more under the pressures of the incurable and odious Borbóns’. Another person featuring in Moreno’s research, more surprisingly, is Espoz y Mina, the greatest of the guerrilla leaders, who entered into a long correspondence with Holland, requesting his assistance in advancing his own career as a Liberal politician in Spain in the 1830s.

Another point on which Fraser might perhaps have touched is the curious fact that guerrillas scarcely appeared during the Spanish Civil War. In Blood of Spain, Fraser shows that the concept of guerrilla war was discredited in face of the need to form a regular army; one also suspects that communists distrusted the freedom of action prized by guerrillas. Ironically, it was the Cuban, Alberto Bayo, who, after leading the republicans’ expedition to Majorca in 1936, failed to persuade anyone to take guerrilla warfare seriously. Disillusioned, he then left for Mexico, where he was to train Castro’s followers, who put these techniques to more effective use in overthrowing Batista.

In discussing how myths about Spain’s ‘War of Independence’ were used for political ends, Fraser argues that the 19th-century liberals had tried to create a modern nation around the ideal of national unity in the war’s ‘glorious epic’. He contrasts this with the more sinister purpose behind the early Franco regime’s constant invocation of popular resistance to a foreign aggressor—consisting of communism, a Judaic–Masonic international conspiracy—in defence of Spain’s ‘eternal values’: religion, the fatherland and the natural authority of the dictator himself. This last idea represented a return to the figure of the absolute monarch. Indeed, for Fraser the Civil War furnished proof that ‘absolutism in a modern authoritarian-clerical form remained alive in the sinews of Spanish society’.

Chance events too were to have far-reaching consequences for Spain. Francisco Franco had planned to follow his father in what probably would have been an innocuous career in the navy; instead, for financial reasons he joined the army, and after a brilliant career in Morocco was appointed director of the military academy situated in, of all places, Zaragoza. Although his presence there was short-lived—Azaña, first Prime Minister of the Second Republic, closed it in 1931, as it was a hotbed of reactionary militarism—it is a curious coincidence that Franco should have been there at all, in a city where Ferdinand the Well Beloved had been deliriously welcomed on his return to Spain. The wheel had indeed turned full circle.

Alistair Hennessy,
‘Spain’s Invisible Army’


PORTUGAL:
The Unfinished Revolution

Rosemary Elizabeth Galli
Ronald H. Chilcote singles out the durability and continuity of the state apparatus as a major factor in the prevailing hegemonic bloc and blames the fractiousness of the Left for failing to replace it.

26.6.10

Guantanamo and presidential priorities

The headline from this morning's New York Times article by Charlie Savage says it all -- not just about this issue but about the administration generally:

Savage writes that it is "unlikely that President Obama will fulfill his promise to close it before his term ends in 2013"; quotes Sen. Carl Levin as saying that "the odds are that it will still be open" by the next presidential inauguration; and describes how Sen. Lindsey Graham -- who is actually trying to close the camp -- is deeply frustrated with the White House's refusal to spend time or energy to do so, quoting him as saying that the effort is "on life support and it's unlikely to close any time soon." So that appears to be a consensus: Guantanamo -- the closing of which was one of Obama's central campaign promises -- will still be open as of 2013, by which point many of the detainees will have been imprisoned for more than a decade without charges of any kind and without any real prospect for either due process or release, at least four of those years under a President who was elected on a commitment to close that camp and restore the rule of law.

La loro morale e la nostra


Quella di Pomigliano è stata davvero una grande lezione. Una lezione politica,
sociale, e anche – lo so che il termine oggi appare desueto, e lo si pronuncia con un certo pudore come con le parole sconvenienti – morale.
L’accordo imposto dalla Fiat era, in modo fin troppo esplicito, una proposta indecente. I suoi contenuti prefiguravano una condizione di lavoro servile, nel senso tecnico del termine, pre-moderna, comunque estranea alla stessa «modernità industriale» e incompatibile con il nostro quadro costituzionale: un lavoro senza diritti né soggettività, esposto al nudo potere materiale e discrezionale dell’impresa, in una condizione di extra-territorialità giuridica che fa della fabbrica un luogo separato com’erano nel medioevo le pertinenze ecclesiastiche. E tuttavia era tremendamente difficile dire di no. Difficile per il sindacato, posto di fronte al dilemma mortale tra rifiutare, riaffermando il proprio ruolo ma rischiando di perdere il contesto in cui esercitarlo, o subire, e cancellare così il senso stesso del proprio esistere come sindacato. E ancor più difficile per gli operai, da mesi col salario falcidiato dalla cassa integrazione e posti di fronte alla prospettiva del nulla in un’area come quella napoletana già afflitta da un livello di povertà endemica. Eppure il plebiscito non c’è stato. E il messaggio che viene da quella fabbrica che in tanti avevano disprezzato - considerandone i lavoratori come una massa di pezzenti alla disperazione, pronti a tutto pur di conservare il misero salario, o un’accolita di lazzaroni turco-napoletani, assenteisti e furbacchioni - è una sintesi di realismo, d’intelligenza
e dignità.
Quel rapporto non previsto da (quasi) tutti, di 60 a 40; quell’equilibrio inatteso tra i «sì» della paura e i «no» dell’orgoglio, dice che quella fabbrica, che gli «operai di Pomigliano» - tutti, presi nel loro insieme di «comunità operaia» - subiscono il ricatto di Marchionne, ma non vi aderiscono «anima e corpo». Lo subiscono col corpo, che «pesa», appunto, e fa piegare la bilancia verso il sì (con realismo, potremmo dire). Ma non gli cedono anche l’anima. Non concedono allo strapotere del più forte la soddisfazione impietosa di un consenso servile che li umilierebbe e li priverebbe di ogni autonoma volontà. Si piegano, perché il rapporto di forza non consente alternative, ma mantenendo il rispetto di sé (con dignità, appunto).
Forse non ci siamo interrogati abbastanza su quei 1673 NO. Su quanto deve essere stato difficile – e drammatico – per ognuno di quegli operai e operaie, decidere, contro se stessi e, apparentemente, contro tutti. Mettere in gioco le proprie esistenze, il proprio futuro, il proprio reddito, le proprie famiglie. Uscire dalla particolarità del proprio calcolo individuale, che avrebbe suggerito l’eterno primum vivere, e porsi da un punto di vista «generale». Rappresentarsi come comunità di lavoro, in un mondo in cui tutto sembra disfarsi, ogni aggregato slegarsi, ogni identità collettiva dissolversi. Senza più rappresentanza politica alle spalle. Né appartenenza ideologica. Né cultura condivisa. In fondo che cos’è un articolo della nostra Costituzione di fronte al rischio di miseria per la propria famiglia? Che vale la difesa del contratto nazionale di fronte alla minaccia concreta della scomparsa della propria fabbrica e del proprio salario? E che cosa costa, d’altra parte, un piccolo compromesso con se stessi? Un minuscolo gesto di sottomissione – il segno su una scheda - se serve per garantirsi un sia pur stentato futuro di lavoro (e magari la possibilità di rimettere tutto in discussione, una volta «passata ‘a nuttata»)? Il nudo calcolo di utilità (individuale) non avrebbe lasciato margini d’incertezza.
E infatti per la stragrande maggioranza degli «attori pubblici» – politici, opinion leader, imprenditori e intrattenitori – quel voto e quel comportamento è risultato del tutto incomprensibile. Per (quasi) tutti quelli che stanno «in alto» (e anche per molti che stanno «in mezzo» e persino per qualcuno che dovrebbe esser vicino a chi sta «sotto») gli operai di Pomigliano sono apparsi dei pazzi. Pericolosi incoscienti. Nella migliore delle ipotesi degli irresponsabili verso sé e verso gli altri. Per l’Italia che conta, l’«agire orientato a valori» – per usare un’espressione weberiana – sta fuori dal mondo: «Ancora una volta constatiamo che c’è un sindacato e anche una parte dei lavoratori, che non comprendono le sfide che hanno davanti», ha dichiarato Emma Marcegaglia. E ha rivelato così l’immenso vuoto morale che caratterizza il mondo imprenditoriale italiano. L’assoluta incomprensione dell’importanza del fattore etico in politica e in economia, destinata a produrre catastrofiche cadute politiche (una borghesia che accetta un Brancher fatto ministro solo per sfuggire ai giudici è una borghesia che vale davvero poco). E anche clamorosi errori imprenditoriali, come quello di chi consiglia o si propone di «lavorare» a Pomigliano solo con gli autori del «sì» considerandoli più affidabili e non accorgendosi che di un uomo disposto a difendere la propria dignità a costo di sacrifici, di uno capace di tenere «la testa alta», ci si può fidare ben di più, dal punto di vista professionale, che di chi finge di condividere un ricatto (come ha magistralmente scritto Ermanno Rea).
È questo, lo si vede bene oggi, il grande deficit culturale dell’imprenditoria contemporanea: questa sottovalutazione del senso morale nell’agire individuale e soprattutto collettivo, per ridurre tutto a «calcolo di utilità» personale. Questo disprezzo cinico e sistematico di ciò che offre un punto di vista condiviso al di là del puro «utile personale». E che produce, per questo, visione del bene comune e appartenenza. Rispetto di sé come condizione del rispetto degli altri (le basi, insomma, di quella «modernità industriale» che a Pomigliano si vorrebbe cancellare).
Non è fenomeno solo italiano. È la verità del capitalismo contemporaneo nell’epoca della globalizzazione, ridotto al suo nudo hard core materiale del conto profitti e perdite. Privo dell’orizzonte valoriale che aveva animato, in qualche misura, la fase aurorale della borghesia: di quell’Etica del capitalismo
di cui scrisse Max Weber, e che permise ai suoi protagonisti di aspirare a una qualche egemonia nell’orizzonte della modernità. Un capitalismo, ormai, risolto senza residui nella quotidiana struggle for life, senza promesse di emancipazione e senza virtù per nessuno. Semplice ostentazione di un rapporto di forza che si misura sul successo effimero e quotidiano e valuta gli uomini col peso falso delle cose. Un capitalismo da ère du vide di cui la crisi fa emergere la «verità», nei suoi aut aut tanto assoluti quanto inerti: nell’imperiosità di quel suo «prendere o lasciare», quando ciò che si prende o si lascia è solo la traccia di una nuova servitù… Il nichilismo compiuto della «società del fare».
È toccato al povero Marchionne, nonostante i suoi maglioncini casual e le sue scarpe da tennis, la sua aria da nomade cosmopolitico e il suo linguaggio da liberal anglosassone, diventare l’emblema di questo capitalismo del crepuscolo,
non più animato dall’etica dell’imprenditore «produttore» (in qualche misura simile all’«etica del lavoro» del suo antagonista sociale simmetrico, l’operaio-produttore), ma segnato dal vuoto dell’anima dell’epoca del consumo e dell’ipercompetitività transnazionale, dove gli uomini e il tempo perdono di spessore, e finiscono per essere «consumati» essi stessi da un’impresa fattasi fine a se stessa.
Quelli di Pomigliano no. In un paese in cui abbondano «i mezzi uomini e i quaqquaraquà» (per dirla con Sciascia) hanno dimostrato che esistono ancora degli uomini. Che tra servi e padroni – tra la moltitudine dei servi che occupa il nostro paese e il castelletto dei padroni/predoni che lo depreda - ci sono ancora delle «persone». E hanno aperto una breccia simbolica incalcolabile. Immaginiamo che cosa sarebbe oggi l’Italia se una fabbrica-simbolo come Pomigliano avesse sancito plebiscitariamente la resa senza condizione a quella logica servile. Se non ci fosse stato quel segno di dignità che, coriaceo, resiste. E parla a tutti.
D’altra parte, non fu proprio Giambattista Vico – da cui lo stabilimento di Pomigliano, con involontario paradosso, prende il nome – a celebrare «l’origine della nobiltà vera, che naturalmente nasce dall’esercizio delle morali virtù; e l’origine del vero eroismo, ch’è domar superbi e soccorrere a’ pericolanti»…?

Marco Revelli

The Great China Currency Debate: For Workers or Speculators?


Everyone is talking about China's currency, it seems. Amidst months of building tension, there is an apparent consensus among most economists, the financial press, and leading economic policy makers in the West that the renminbi is hugely undervalued, making China's exports unfairly competitive. The global imbalances created by such 'mercantilist' and 'protectionist' exchange rate strategies, it is argued, have been a central cause of global financial instability. China must therefore revalue, for the good of both itself and the world.1

In particular, this position has been spearheaded by leading economic commentators such as Paul Krugman, Fred Bergsten or Martin Wolf, who have called for aggressive action against China on this issue. More diplomatically, it has also been advanced by what might be called a 'G20 consensus' of leading central bankers and finance ministers.2 It is with this logic that 130 members of the US Congress called on the Obama administration in March 2010 to label China a 'currency manipulator', which would then allow for other punitive measures to be taken against China.

Yet, despite the consensus, in early April the US government postponed its report on international exchange rates due for 15 April and took a more conciliatory approach. Tim Geithner, US Treasury secretary, acknowledged two days before the US-China summit on 24 May that China has made progress in rebalancing its economy towards domestic consumption and away from exports even though its currency remains pegged to the dollar.3 Given expectations that China's currency will be an important election issue in the US, why did this apparent capitulation occur so easily?

Despite the sense of absolute certainty emanating from revaluation advocates, reality is far more complex than they suggest. Indeed, China's trade surplus reflects the strength of corporate America (and Europe and Japan) as that of China. Moreover, revaluation advocates argue that currency appreciation should happen through nominal revaluation, rather than only through real appreciation. This logic is best understood as reflective of speculative interests and detrimental to the developmental interests of China given that it would forfeit China's ability to appreciate through gradually rising wages, contrary to the claims of those leading the debate in the West.

Is the renminbi undervalued? Similar to the previous crescendo in this debate in 2005, there is actually no agreement as to whether the renminbi is undervalued or by how much. Revaluation advocates generally maintain that the answer to this question is self-evident by virtue of China's very large trade surpluses. In March 2010, economists at the Peterson Institute of International Economics in Washington claimed that the renminbi is undervalued by about 25 per cent on a trade-weighted average basis, and by about 40 per cent against the US dollar, based on assumptions of how much revaluation would be required to reduce China's current account surplus to 3-4 per cent of GDP. They also suggest that China's currency policy is half as market-oriented as in 2005 given that its foreign exchange interventions are about twice as great today (about $30-40 billion per month) as then ($15-20 billion per month).4

However, the issue is much more complex. Invariably, wide ranges of estimates can be obtained, depending on definitions and assumptions. Hence, prominent economists or institutions such as the IMF estimate that the renminbi is much less undervalued, if at all, or instead, that the US dollar is overvalued.

Notably, China's trade surplus in goods exploded from around 3 per cent of its GDP in 2004 to a peak of over 9 per cent in 2007. At the same time, the government allowed the renminbi to appreciate against the US dollar by over 20 per cent from July 2005 to July 2008, which should have reduced China's surplus with the US, not increased it. This suggests that the surpluses have borne little relation to the valuation of the Chinese currency.

Revaluation advocates have retorted that the renminbi was so undervalued that much more revaluation is needed. More sophisticated versions of this argument contend that other intervening factors, such as interest rate differentials, have prevented renminbi revaluation from inducing the necessary adjustments.5

In the midst of the squabble, Prime Minister of China Wen Jiabao asserted in March 2010 that the renminbi is not undervalued, a claim ridiculed by many in the Western media. However, as if to prove Wen correct, the trade balance of China registered a deficit in March 2010 for the first time since April 2004, due to a sharp rise in imports and fewer exports of labour-intensive goods. While probably temporary, this dip nonetheless underlines that China's trade position is more tenuous than usually appreciated.6

Alternative Interpretations

The revaluation advocates generally ignore the nature of China's integration into networks controlled by transnational corporations (TNCs). Foreign funded enterprises accounted for 58 per cent of China's exports and imports in 2005, or even more if their subcontracting arrangements with locally-owned firms are included within a wider understanding of these networks dominated by transnational corporations (TNCs). Hence, revaluation is unlikely to have much effect on the competitiveness of Chinese exports because so much of the inputs for these exports are imported (and priced as intra-firm transfers), cancelling out the potential effect of any currency movement.7

Another important dimension is the financial account given that capital flows have a huge bearing on currency valuations. For instance, theFinancial Times admitted in a recent editorial that estimates of undervaluation vary massively in part because of movements on the capital account. If freed, these could lead to a flood of capital outflows that might temporarily push the renminbi down instead of up.8 These concerns are particularly pertinent given the huge resurgence of carry trading in East Asia since autumn 2009, which dwarfs China's surpluses and reserves many times over.

However, the TNC dimensions of such financial dynamics are rarely explored. For example, TNC transfer pricing practices, which are used for intra-firm transfers within the TNC networks that dominate China's trade, are also often used for avoiding taxes or capital controls.9 Hence, much of the trade account might actually represent capital movements. More generally, Chinese surpluses (and US deficits) could, in fact, represent the increased profitability of US companies operating in the global market.10 As a result, the real significance of the trade data must be examined with much caution. False evaluations on the basis of such trade data can ironically serve to justify attempts to further subordinate China within these TNC networks. Indeed, Tim Geithner suggested that recent US conciliation towards China is related to Beijing's relaxation of some of the restrictions facing TNCs, such as 'indigenous innovation' rules introduced in 2009, which US corporations claimed would exclude them from public procurement contracts.11 In other words, the currency confrontation might well be a bargaining chip for other strategic issues.

The disjuncture between currency appreciation and rising trade surpluses is also partly explained by rising productivity, which compensates for currency appreciation by lowering unit-labour costs. While China's success in this respect has caused it to be blamed for its overenthusiastic interventionist industrial policies, it is also important to ask; how was the consumption of its surpluses guaranteed?

Evaluation of international balance of payments data actually suggests the opposite of what the revaluation advocates claim. Arguably, financialization in the US drove consumption and deficits in the US. In turn, these drove China's high levels of investment, thereby buttressing its industrial policies and surpluses. This alternative explanation is supported by the fact that China's trade surplus only really took off in the mid-2000s, several years after the US current account deficit started to massively increase following the East Asian crisis in 1997-98 and several years after a huge surge in net foreign direct and other investment into China from about 2001 to 2005. China's entry into the WTO in 2001 obviously had some influence on these dynamics, although merely as an institutional facilitator of the more systemic rerouting of TNC-dominated production networks through China that followed the East Asian crisis.12

Nominal or Real Revaluation?

Many argue that China must nonetheless adjust to its de facto surplus and that this is better planned rather than brought about through instability or crises. However, adjustment can take many forms.

Revaluation advocates generally argue that adjustment needs to happen through nominal revaluation. This, it is argued, is essential to rebalance the economy towards more domestic demand and consumption by making imports cheaper, thereby raising real incomes, and by penalising exporters against those producing for the domestic market. This should again dampen inflation in China by lowering the cost of imports in domestic consumption. Some also add that revaluation would reduce the inflationary tendencies generated by large surpluses.

However, if the argument for revaluation holds any water, it would apply to real exchange rates, not necessarily nominal exchange rates (unless these follow the former, which is not always the case).13 Let us assume that China's trade account would rebalance if its real exchange rate appreciates. This could take place directly through nominal revaluation, although the effects might be offset by a variety of speculative movements on the income and financial accounts. Alternatively, real appreciation can take place through higher prices or wage/cost inflation relative to trade partners or competitors. Indeed, this is happening now; price inflation in China is currently higher than in the US and upward wage pressures in China contrast with stagnant, if not falling wages in the US. Hence, real appreciation is already taking place, a point which Beijing sometimes makes.

This helps to clarify the developmental predicament of revaluation. Gradual real appreciation through rising wages would offer an ideal way of increasing domestic consumption and rebalancing the economy. Moreover, as a relatively poor developing country, rising real wages in China would contribute to the goals of economic development. China can do this now since its surplus position can serve as a substantial buffer against possible adverse balance of payments consequences due to rising real wages.

In contrast, nominal revaluation would effectively forfeit China's ability to adjust in this way, by abdicating the role of wages to the role of international prices. In other words, the option of using its surpluses and reserves in a developmental manner would be abandoned in deference to rewarding speculators and market arbitrage.

Moreover, nominal revaluation would probably exacerbate the squeeze on wages as export-oriented and import-competing enterprises would respond by attempting to lower unit-wage costs. Indeed, this tendency has been observed since 2005 and would have exacerbated the low share of consumption to GDP, opposite to what the revaluation advocates argue. Nominal revaluation would also place downward pressure on agricultural incomes by depressing farm gate prices. This developmental dimension is lacking in most of the current mainstream Western debates on China's currency, even though many Chinese economists argue precisely along these lines. Their logic is imminently sensible.

THE GREAT CHINA CURRENCY DEBATE:
For Workers or Speculators?

Andrew M. Fischer