Rumours of crisis, revolution and war

Issue: 134
Posted: 27 March 12

Alex Callinicos

The urgent sense of imminent catastrophe that gripped much of Western capitalism during the second half of 2011, eased off a little in the past few months. This is not so much because anything fundamental has changed. More than anything else it is a consequence of the long-term refinancing programme (LTRO) that Mario Draghi, the new president of the European Central Bank (ECB), launched towards the end of last year. This involved pumping over €1 trillion worth of ultra-cheap three-year loans into the European banking system. Since the eurozone banks, loaded down with bad loans and needing to refinance massive amounts of debt this year, are one of global capitalism’s weakest links, this has bought a bit of time. So also has the deal the Greek government has made with its main creditors to reduce its debt burden.1

Otherwise, it is very much business as usual. Growth is sluggish in Britain and much of the eurozone. Even the German export dynamo is teetering on the edge of recession. The Chinese leadership has reduced its growth target to 7.5 percent a year, probably in acknowledgement that China’s incredible boom is easing off. Chinese steel demand in 2011 dropped to 8 percent from its average over the past decade of 15 percent and is projected to fall further to 4 percent this year.2 India is slowing down faster than it did during the 2008-9 slump. The other big “emerging market” economy, Brazil, barely grew in the last quarter of 2011.

There has been, it’s true, a slight uptick in economic indicators in the US—one reason, along with the increasingly farcical race for the Republican presidential nomination, why there is a spring in Barack Obama’s step. But, when at the end of February Ben Bernanke, the chairman of the US Federal Reserve Board, did not announce a new bout of quantitative easing (QE)—ie the Fed effectively printing money and pushing it into the financial system—markets dropped. They then surged upwards on the strength of relatively strong figures for jobs and retail sales, but the Fed has emphasised that consumer demand remains depressed thanks to the burden of household debt. As Joseph Stiglitz points out, if jobs continued to increase at a monthly rate of 225,000, the figure for February, full employment would be achieved in 2025.3

The markets’ obsession with QE points to a key feature of the bourgeois management of the crisis. It is now clear that Western capitalism is in the grip of a depression, which economists define as a prolonged period when the economy grows below its long-term potential rate. Politicians have reacted with a further bout of neoliberalism, typically in the shape of austerity programmes. This trend continues with the new European Union treaty that will subject participating member states (apart from Britain and the Czech Republic, which have opted out) to a disciplinary fiscal regime designed to keep budgets balanced and policed by the European Commission and European Court of Justice (though even before the treaty is ratified, Spain and the Netherlands are saying they will breach their deficit targets). But this attempt to cast austerity in constitutional cement (at Berlin’s demand, EU member states are required to follow its example and write the requirement of a balanced budget into their constitutions, which is also a main demand of the Tea Party movement in the US) is qualified by robust intervention by another part of the state.

The crisis has underlined the decisive role played by central banks in macroeconomic management during the neoliberal era. Increasingly they have pumped money into the banking system to fill the gap created by government efforts to squeeze public spending. Thus Draghi’s LTRO mitigates the contractionary effect of the policies that the German Chancellor, Angela Merkel, is enforcing on the eurozone. The pre-Keynesian primitives running Germany have woken up to this and have started complaining about it, but elsewhere politicians are tacitly relying on the flexibility shown by the central banks. Thus, as the Bank of England announced in early February £50 billion worth of quantitative easing, Larry Elliott commented in the Guardian, “Inaction by the Bank would make life harder for George Osborne. The government’s case for the past 18 months is that the Treasury bears down on the budget deficit to allow the MPC to keep monetary policy loose… He [Osborne] believes he has a tacit deal with Sir Mervyn King and he expects the governor to deliver”.4

So behind the official line that “big government” must be rolled back is a weakened financial system increasingly addicted to the cheap money provided by the central banks.5 This hardly helps the US and the EU in managing a world that seems progressively to slip from their control. As usual, the problems are most concentrated in the Middle East. The Obama administration has high hopes of living with an Egyptian government that is likely to be dominated by the Muslim Brotherhood, the main victor in the parliamentary elections at the end of last year. The increasingly bloody struggle between the Syrian regime and the revolutionary movement poses a more immediate problem.

The Ba’athist regime under Hafez al-Assad and (since 2000) his son Bashar has long been a thorn in Washington’s side. Nevertheless, the Western powers are not keen to repeat the military intervention they mounted last year against the much more pliant regime of Muammar Gaddafi in Libya. Memories of the Iraq debacle have combined with awareness of Syrian society’s complex religious fragmentation, and fears of the impact of an intervention in Syria on neighbouring Lebanon and on the West’s fast-deteriorating relationship with Iran have held them back. Russia and China, who feel they were hoodwinked into allowing regime change in Libya, have blocked lesser measures at the United Nations Security Council. But it is clear that various kinds of covert support are being funnelled to sections of the rebel forces by the US and its allies and by the Gulf states, headed by Saudi Arabia and Qatar, which are seizing the opportunity to install in Syria a friendly regime no doubt aligned to their co-religionists in the Sunni Muslim majority in Syria (the Assad regime’s core support comes from the Alawi minority, members of which dominate the key military and security apparatuses).

As part of his effort to win “strategic parity” with Israel, the elder Assad strove with great determination and utter ruthlessness to give Damascus primacy in the Lebanon and a veto over any settlement of the Palestinian question. As a result of his efforts, geopolitics overlays the domestic polarisation between the regime and its revolutionary opponents in a way that was largely absent from the essentially internally driven struggle between Hosni Mubarak and the Egyptian Revolution at the beginning of 2011. But the revolutions in Egypt and Syria have unleashed a complex process of realignment. Thus the key Palestinian movement, Hamas, which was till recently based in Damascus, has broken with the Assad regime and sided with the revolution. There is more to this welcome decision than meets the eye. Hamas is an offshoot of the Muslim Brotherhood, which is now the most powerful political actor in Egypt (albeit in uneasy partnership with the Supreme Council of the Armed Forces). The greatest single crime of Hafez al-Assad, the bloody destruction of Hama in 1982 that cost an estimated 25,000 lives (the model for the slaughter being inflicted on Homs by his son), was the climax of a savage internal war between his regime and opposition forces, including the Brotherhood. Egged on by Saudi Arabia and Qatar, the Brotherhood is now flexing its muscles across the region and turning against the Assad regime.

All this makes the talk of war by the US and Israel against the Islamic Republican regime in Iran even more dangerous than usual. The elder Assad moved very quickly after the Iranian Revolution of 1978-9 to align with Tehran (in part as a counterweight against his hated Ba’athist rival in Iraq, Saddam Hussein). Iran is now his son’s strongest supporter, supplying weapons and advisers to help crush the revolution. The Saudis have long been rumoured to be pressing for military action against Iran. The political realignments described above have an ugly sectarian dimension, pitting Sunnis against the Assad regime, based on religious minorities, and its Shi’ite allies in Iran and Lebanon, where the leadership of Hezbollah has set its face against the Syrian revolution.

Add to this the apparent determination by the Israeli prime minister, Binyamin Netanyahu, to mount a pre-emptive strike against Iran’s nuclear programme, and you have an explosive cocktail indeed. Israel wants, of course, to preserve its nuclear monopoly in the region, but is probably also motivated by the desire, after losing a key ally with Mubarak’s fall, to weaken a powerful rival. There seems no enthusiasm for an attack on Iran in Washington. Obama, busy realigning US global strategy to meet the geopolitical challenge represented by China, has no desire to step into another Middle Eastern quagmire (and is speeding up withdrawal from Afghanistan, where recent events have underlined how the West’s grip is slipping). But Netanyahu will no doubt seek to exploit the US presidential contest, where the rival Republicans are outdoing themselves in their protestations of loyalty to Israel, to pressure him into supporting an attack on Iran. So there may be another war in the Middle East this year.

This cheerful prospect encourages some people on the left to argue that the struggle for Syria is overdetermined by its geopolitical context. For them, the support that the West and the Gulf states are giving some of the revolutionary forces is definite proof that a version of regime change on the Libyan model is under way. They also talk up the “progressive” character of the Assad regime, pointing to its support for the Palestinian struggle. This is an astonishing claim when one remembers that Hafez al-Assad sent the Syrian army into Lebanon in March 1976 to prevent the alliance of the Lebanese left and the Palestinian movement from winning the civil war against the Christian right and had his troops bombard the Palestinian fighters of Fatah in Tripoli in November-December 1983.

In his meticulous and carefully balanced study of Syria under the elder Assad, Hanna Batatu sums up his relationship with the Palestinian movement:

In Lebanon, the scene of recurring clashes of interests between Fatah and Syria’s regime, Assad…successively gave support and dealt blows by straightforward or roundabout means to every major element involved in the civil war, and drove wedges in the ranks of the two sides to the conflict, weakening in due course both of them and altering the local balance of forces in his favour. Similarly, when he had difficulty bending the PLO [Palestine Liberation Organisation] to his purposes, he activated the Palestinian factions answerable to him, and through them attempted to win over independent Palestinian organisations—the PFLP [Popular Front for the Liberation of Palestine] and the DFLP [Democratic Front for the Liberation of Palestine]—with a view to undermining Fatah and paralysing its leading role; and, when opportunity offered, he fostered a split within Fatah itself.6

Batatu quotes what he calls the “unforgettable” words of a Palestinian woman in Tripoli in 1983: “’Hafez al-Assad’, she screamed, ‘is more Israeli than the Israelis!’”7 Denunciations of Hamas for taking Gulf money are equally dubious: the longstanding dependence of the Palestinian resistance on support from the Arab regimes is an old political problem that also affected supposedly left wing groups such as the PFLP and the DFLP, but it no more makes Hamas their puppet than it did Fatah. Nor is it plausible to describe as “anti-imperialist” a regime that participated in the US-led coalition against Iraq during the 1991 Gulf War. As Batatu shows, despite the sectarian core of their regime, the Assads have ruled in the interests, both domestic and regional, of the Syrian bourgeoisie.

We will carry a full article weighing the complexities of the Syrian struggle in our next issue, but the immediate political question is obvious: is there is a genuine popular movement against the regime? Evidently there is: what is astonishing is how sustained the revolution has been despite the slaughter of an estimated 8,000 by the regime’s forces. There is also another important question: could the West and the Gulf states hijack this revolution, as happened in Libya? Again the answer is in the affirmative. But that is no reason for backing Assad against the people he is slaughtering. Western leaders’ fear of the Syrian masses was underlined by David Cameron’s remark on the way to Washington in mid-March that he wanted to see “a transition where Assad goes, rather than a revolution from the bottom”.8 Again and again struggles in the Middle East have had to confront two enemies—the imperialist powers (and their Israeli watchdog) and the local ruling classes. Syria is the latest case of this dialectic, and the form it takes there could wreck the revolution. But that is no reason to alter the stance we have taken ever since the fall of Ben Ali in Tunisia—with the Arab revolutions and against Western intervention.


Notes

1: Thanks to Anne Alexander, Joseph Choonara, Gareth Dale, Denis Godard and Jonny Jones for their comments, and to Christian Høgsbjerg for transcribing the interview with Panos Garganas.

2: Hook, 2012.

3: Stiglitz, 2012.

4: Elliott, 2012. For a wider discussion of the political economy of austerity, see Callinicos, 2012.

5: See Milne and Mackenzie, 2012.

6: Batatu, 1999, p320 (transliteration altered).

7: Batatu, 1999, p321 (transliteration altered).

8: Parker, 2012.


References

Batatu, Hanna, 1999, Syria’s Peasantry, the Descendants of its Lesser Rural Notables, and their Politics (Princeton University Press).

Callinicos, Alex, 2012, “Contradictions of Austerity”, Cambridge Journal of Economics, 36.

Elliott, Larry, 2012, “There’s a Case for Ending QE but will the Bank of England Listen?”, Guardian (5 February), www.guardian.co.uk/business/economics-blog/2012/feb/05/case-ending-qe-bank-england

Hook, Leslie, 2012, “China’s Appetite for Steel Cools as Building Slows”, Financial Times
(9 March).

Milne, Richard, and Michael Mackenzie, 2012, “Drastic Funding Transfusions Risk Leaving Banks Hooked”, Financial Times, Special Report on Debt Capital Markets (13 March).

Parker, George, 2012, “Cameron meets Obama to plot Afghan Endgame”, Financial Times
(13 March).

Stiglitz, Joseph, 2012, “The US Labour Market is Still a Shambles”, Financial Times (12 March).