By Jerome Roos, ROAR Magazine

“Not a crisis, but a scam,” reads this eloquent placard.

As David Harvey has noted, and as the ongoing emerging market panic confirms, capitalism never solves its crises — it merely moves them around geographically.

You may not have read about it in the regular media yet, but the financial press is full of it: financial markets are currently experiencing a “bloodbath” over the deepening turmoil in the global periphery.

As I wrote on Friday, five years since the collapse of Lehman Brothers, we may now find ourselves at the start of a new phase in the global financial crisis. Just when European leaders were boasting about their debt problem finally being “under control”, investors are losing their cool over a Chinese slowdown and the Federal Reserve ‘tapering’ its stimulus program. The fear is that the resultant liquidity crunch and commodity slump will negatively affect the ability of some developing countries to pay back the debts they accrued over the past decade of cheap credit.

This fear is now leading to a generalized investor panic roiling financial markets, triggering a collapse in the value of emerging market currencies from Argentina to Turkey to Indonesia to South Africa. Here I don’t want to dwell too much on the specifics of this renewed market panic (you can read more about that inFriday’s report). Rather, I want to take a step back and ask a bigger question that no one really seems to be addressing at this point: how is it that we keep being told by world leaders that “this crisis is over”, and that, every time we are fed that same nonsensical story, some other crisis comes along in another part of the globe, making a mockery out of the official narrative and a fool out of its propagandists in the mainstream media and academia?

A Real Theory of Capitalist Crisis

One of the main reasons for this strange divergence in narrative and reality is that investors, politicians and economists appear to be willfully blind to the internal contradictions that define the capitalist system. The leading geographer David Harvey, in his influential work spanning over four decades and culminating into The Enigma of Capital and the Crises of Capitalism (2010), takes up Marx’s acute insights into these contradictions in order to develop a powerful theory of capitalist crisis. “Capitalism,” Harvey observes, “never solves its crises; it moves them around geographically.” What we are witnessing in emerging markets today is not an overall recovery in the world economy, but a displacement of the crisis from one region to another.

Inspired in particular by the Grundrisse, in which Marx noted that capital cannot abide any limits to continuous circulation, Harvey observes how — every time the process of capital accumulation does encounter such a limit — it must immediately be transformed into a barrier, which can subsequently be bypassed or transcended. Since capital constantly generates surplus value (through the exploitation of wage labor and the rents extracted from interest-bearing credit), it permanently needs to find ways to reinvest this surplus in profitable markets (like the stock market, the housing market, commodity markets and the bond market). This leads to a frantic search on the part of investors for the highest possible yields. In a globalized marketplace, where capital can flow freely from one country to the next, this constant quest for surplus absorption becomes a truly planetary phenomenon, with traders and investors ceaselessly scouring the globe for the best investment opportunities.

How Bubbles Burst

The problem is that accumulation can reach a point where the constant reinvestment of capital ceases to produce adequate returns. When everyone piles in on the same market, it becomes flooded with capital and profit rates eventually diminish. In neoclassical terms, this is called the bursting of a “bubble”, and these bubbles — like their markets — come in multiple forms: housing bubbles, equity bubbles, commodity bubbles and even sovereign debt bubbles (think of Greece). At this point, capitalists will gradually start to divest from these markets in search of more profitable investment opportunities elsewhere. This can set in motion a negative spiral where collective divestment eventually leads to panic: as investors pull their money out of the market, others begin to fear the further devaluation of their assets, and rush for the exits all together — thereby propelling an investor stampede.

While the market in question collapses (whether it’s the market for Greek bonds or US mortgage derivatives), capital must quickly find a way to restore itself to a new equilibrium. Since credit is the lifeblood of any advanced capitalist economy, it is absolutely imperative that the investor stampede does not lead to a systemic freezing up of credit. Debts must be paid, banks must keep lending, firms must keep investing, consumers must keep buying and workers must keep producing. This requires the state and official creditors to step in at crucial moments of investor panic (as in the wake of Lehman’s collapse and Greece’s near-default) in order to ensure the continued circulation and accumulation of capital by pumping emergency credit into the economy — this is the role of the lender-of-last-resort traditionally ascribed to central banks and partially taken up by the International Monetary Fund.

The “Spatial Fix”

The key insight Harvey adds to the theory of capitalist crisis is the notion of the “spatial fix”. Capital has the power (and the need) to constantly bypass limits to continued accumulation not only through emergency loans, an intensification of exploitation, or so-called “accumulation by dispossession,” but it can also temporarily try to displace systemic pressures onto other geographical areas. This is effectively what we’re seeing with the emerging market panic today. At the moment, countries like Turkey, South Africa, Brazil and Indonesia are feeling the brunt of Western investors and central bankers displacing the crisis of Western capitalism onto the global periphery; just like German and French banksdisplaced the European banking crisis onto the eurozone periphery by forcing Greece and other countries to pay the full price — through austerity, reform and full debt repayment — for the banks’ own overexposure; a direct result of their quest for surplus absorption in the lead-up to the crisis.

The emerging market panic is a result of the same quest for surplus absorption and hence an outcome of the same process of spatial displacement. When the US financial system nearly collapsed in 2008, the state stepped in to save and prop up the banking system, and in the resulting recession the Federal Reserve began the process of ‘quantitative easing’, buying up ‘bad debt’ from Wall Street banks in exchange for fresh liquidity (the European Central Bank later did the same through its Outright Monetary Transactions program in 2012). The goal behind this stimulus program was to get the banks to start lending again, thus providing an incentive for investors to invest and for consumers to consume — ideally creating jobs and gradually bringing about recovery. But, given the dismal state of America’s industrial base and the fact that the housing market had already been fully tapped as a means of surplus absorption, Wall Street turned its eyes elsewhere: to emerging markets.

An Emerging Market Bonanza

As the Fed pumped cheap money into the economy in the hope that Wall Street would reinvest this into production, the bankers just took the money and ran with it — to São Paulo, to Istanbul, to Johannesburg. This in turn led to an utterly irrational geographical pattern: while Greece collapsed, neighboring Turkey boomed as it became a major sponge for the absorption of Wall Street’s capital surpluses. US investors lent to Turkish banks which in turn reinvested that money in enormous urban renovation projects, giving rise to a regime ofneoliberal urban development that saw high rises springing up across the Istanbul skyline. In the emerging market bonanza, Turkish Prime Minister Erdogan clearly got high on cheap credit and began to hubristically exceed his popular mandate with megalomaniac construction projects, culminating in the third bridge over the Bosporus and a shopping mall on top of Gezi Park, Istanbul’s last remaining green space — thus giving rise to a major “right to the city” movement, and of course the Gezi uprising of June 2013.

Brazil became another sponge for surplus absorption, sucking up billions of dollars in foreign investments over the course of recent years and reinvesting them into the construction of socially useless World Cup and Olympic stadiums, just as Greece had done in the lead-up to the 2004 Olympics, even as the government failed to provide proper public services to its own citizens. This is the context in which the Brazilian bus fare revolt of June 2013 occurred, coinciding with the protests in Turkey. Other countries that sucked up the capital surplus included Indonesia, Thailand, South Africa and Ukraine, each of which has also experienced major social unrest in recent months as the tide of cheap credit gradually starts to recede, exposing the anemic character of social provisions and the corrupt tendencies of state officials as they got high on cheap credit reinvested by some of the world’s biggest banks.

Another Bubble Bursts

As was to be expected, the flooding of emerging markets produced a familiar pattern: the sponge sucked itself so full of capital that it could absorb no more. Over the course of 2013, yields began to decline and investors grew more and more hesitant to keep reinvesting their capital in emerging market bonds and equities. As the Chinese government simultaneously moved to deflate an epic housing bubble of its own, in the hope of alleviating the pressures on its $4.8 trillion shadow banking system (i.e., off-balance debt), China’s hyper-charged economy finally began to slow down, thus dampening demand for commodities. Since peripheral countries like Argentina, South Africa, Indonesia and Brazil are still largely dependent for their foreign exchange on the export of agricultural and mineral commodities, the resultant commodity slump will seriously affect these countries’ ability to obtain the foreign exchange with which to keep replenishing their central bank reserves and refinance their external debt.

This already precarious situation was further compounded last year when the US Federal Reserve announced that it would be ‘tapering’ (i.e., scaling back) its quantitative easing program, leading investors to fear a contraction in liquidity. This in turn made them even more hesitant to invest in emerging markets, as cheap money from the Fed was a crucial precondition for their willingness to expose themselves to risk in the global periphery. Political instability in Thailand, Ukraine and Turkey further added to the sense of gloom, and when last week Argentina’s central bank was suddenly forced to capitulate in the face of mounting market pressures and let the peso float, its currency lost nearly 15% of its value in a single day, the most dramatic devaluation since the country’s historic economic collapse in 2001-’02. Ever since, emerging markets have been trading in what Benoit Anne, head of emerging market strategy at Société Générale, ominously calls “full-blown panic mode”.

Capitalism is the Crisis

So when you read — as you soon will in the weeks or months ahead — that the emerging market crisis is due to “bad fundamentals” or “bad policies” in countries like Argentina, Turkey, South Africa or Brazil, just remember this: beyond these individual surface manifestations, the deep cause for the coming collapse lies within the internal contradictions of the system itself. Capitalism never solves its crises, it merely moves them around geographically. There will always be bad apples, soft spots and weak links in the chain; there will always be “bad fundamentals” and “bad policies”; there will always be one or another reason to distrust a government’s willingness to pay its debts or honor its financial contracts. But whenever investors are looking for a market that can absorb their surpluses, and that market is going through a period of expansion, no one will complain. As long as there is money to be made, investors don’t care one bit about corruption, laziness or profligacy — because they know full well that these things don’t matter. What matters is yields, returns, profits, rents; as much as possible, as fast as possible and as long as possible. No matter the cost for ordinary people or the environment.

But as soon as the market becomes saturated, yields decline, investors panic and yank their money out; as soon as the tide retreats and prospects for further profits dim, investors are quick to point the finger of blame at whatever moral fault they can find in the national character: the Greeks are lazy, the Turks corrupt, the Brazilians inefficient and the Russians drunk — or any other order of condescension you can imagine. The point is, it doesn’t matter what excuses they come up with. Money talks, and talk is cheap when you’re on the “right” side of the transaction. For Western leaders it’s easy to say that “the crisis is over” today, because for them it is. They simply displaced the costs onto poor American and Spanish homeowners who never got a penny’s worth to save their homes; onto Greek workers, pensioners and youth, who are sitting at home without pay or future; and now onto the Third World’s poor, who will soon suffer the brunt of the adjustment costs their leaders will pass on to them.

The conclusion to all of this is as simple as it is elusive: the only way to overcome the crisis is to overcome capitalism. That option, unfortunately, is not on the voting ballot.

Jerome Roos studied International Political Economy at the London School of Economics and is currently a PhD candidate at the European University Institute, where his research focuses on the structural power of finance capital in sovereign debt crises. He is the founding editor of ROAR Magazine.

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Barcelona.

On Friday, January 10, three thousand people took to the streets in the city of Burgos, Spain, protesting a construction project that would remodel a normal street into a deluxe boulevard, taking an important step forward in the gentrification of Gamonal, a long-time working class neighborhood. The police charged to disperse the protest, and the story would have ended there: another failed attempt to stop the latest austerity measure, foreclosure, mass layoff, or destructive “urban renewal” project.

Nearly three years after the plaza occupation movement swept Spain, the abuses keep raining down from on high. Largely fruitless, the popular mobilizations have waned. It’s been more than a year since the last general strike, and though motives to protest abound, the crowds rarely reach ten thousand. The real estate bubble in Spain has long since burst, yet speculative projects like the one in Gamonal, projects that displace people and forcibly change the character of once accessible neighborhoods, continue to occur.

But that Friday in Gamonal, the story took an unexpected turn. Rather than dispersing, people stayed in the streets, they set up barricades, and they began destroying banks and construction equipment. The next day, they took to the streets again, demanding the unconditional release of all the people arrested the night before.

For four consecutive nights, Burgos was rocked by riots. At first the mayor, who has strong ties to the construction industry, refused to withdraw his support for the project. Locals began organizing blockades to prevent the arrival of new machinery. Then solidarity protests started popping up in other cities across Spain. First in Madrid, and then by January 17 in over forty other cities. Two nights in a row, the 14th and the 15th, mobilizations in Madrid that were attacked by police turned into riots. In Melilla, one of Spain’s North African colonies, a protest linking the movement in Burgos to a similar situation of undesired urbanization happening locally, also sparked confrontations with the police.

On the 16th, there were extensive solidarity riots in Zaragoza and Barcelona. In the latter city, masked protestors damaged banks and multinationals like Starbucks and Burger King along the exclusive Laietana Avenue, and then occupied the plaza in front of the Generalitat, the seat of the Catalan government, where they clashed with police guarding the building.

That same day, the rich and powerful of Burgos bent to popular demands and announced that construction of the new boulevard would be cancelled. People in the streets are jubilant, but no one can be heard to suggest that the struggle is over.

One neighborhood’s battle against gentrification has resonated with people across Spain. Their outrage throws the crisis that is growing across Europe into sharp relief.

Deaf to popular protests, the European Union and the banks it has bailed out continue unswervingly down the path of neoliberal austerity. They have made it clear that the welfare of an increasingly precarious workforce is no longer on their agenda. Yet the response from the street has shown that more than just the particular capitalist strategy of neoliberalism is at stake. While rising unemployment certainly fuels popular anger and makes social rebellion more likely, many of the targets have not been features of austerity but the hallmarks of democratic capitalism itself.

In Gamonal, the target was gentrification, a process that is just as associated with boom times as with times of crisis. In the earlier plaza occupation or “indignados” movement, a principal target were the political parties, which continue to be non grata in most spaces of protest. On January 15, in the sleepy Catalan city of Girona, a crowd tried to stop the deportation of a Moroccan man who had participated in a local anti-foreclosure group. When the police van finally broke through the crowd and took him away, people ran amok through the city center, attacking cops and destroying banks. Just a couple weeks earlier, the traditional New Year’s Eve noise demo outside the immigrant prison in Barcelona sparked an uprising on the inside that was put down with brutal police force and the speedy deportation of several immigrants. Forty prisoners went on hunger-strike. The EU policy of mass detentions and deportations that has earned it the nickname of “Fortress Europe” was put into practice in the boom years of the ’90s. It is not a byproduct of neoliberalism per se, but a feature of capitalist government plain and simple.

In other words, people are not just reacting to the austerity measures that are slashing their benefits or privatizing health and education. They are taking the opportunity presented by the rising social unrest to take aim at a great many pillars of modern government and economy, phenomena that long predate neoliberalism, such as borders, deportations, political parties, and gentrification.

Similar cases could be drawn from any of the austerity-wracked countries in Europe. Even in remarkably stable Germany, there’s the case of Hamburg, where authorities placed three entire neighborhoods under martial law after crowds protesting the planned closure of a beloved social center clashed with police on December 21 and attacked police stations a week later.

In Spain, the government has responded to popular unrest with an iron fist. At the end of 2013, Madrid passed a reform to the penal laws that criminalizes unauthorized protests and protests that surround Congress or other government buildings, and adds heavy penalties for protest arrestees wearing masks. The reform also allows police to declare “security zones” in which protests will not be allowed, and prohibits the filming of police if doing so violates the vague criterion compromising their honor or security—and this just a month after police were filmed beating an immigrant to death in Barcelona.

After the rowdy March 29, 2012 general strike, the Catalan Interior Minister announced that vandalism would be punished as harshly as terrorism. True to his word, dozens of people arrested in the strike and in other moments of social conflict, such as the May Day protests of 2013 or various attempted blockades of the Catalan parliament in Barcelona or the national Congress in Madrid are still facing severe charges.

Occurring hand in hand with all of these movements, there has been an increase in actions of nighttime sabotage. The government response has followed a clear pattern: criminalization and heavy punishment for any acts of property destruction or disobedience in moments of mass protest, with the intent to dissuade resistance and exhaust the movement; and the use of the antiterrorism law to drag any secretive sabotage actions out of the terrain of popular resistance and into the terrain of state security and mass paranoia.

Spain is a pioneer in the development of antiterrorism as a tool to repress social movements, deploying a state of exception against the Basque independence movement. To erode widespread public support and crush resistance, Madrid used the antiterrorism law against the armed group ETA (which like the Spanish state had killed quite a few civilians) but also against Basque youth groups involved in the organization of protests or alternative media.

In the age of austerity protests, the chief target of Spain’s antiterrorism law have been anarchist groups that have killed no one. While the police kill immigrants with impunity on a monthly basis or shoot old ladies’ eyes out with rubber bullets during protests, the media distracts everyone with the spectacle of terrorism, harping on acts of property destruction.

In less than a year, thirteen anarchists across Spain have been arrested under the antiterrorism law. On May 15, 2013, the second anniversary of the plaza occupation movement, five people were arrested in the city of Sabadell, accused of running a Facebook page that expressed support for anti-government riots and property destruction, and that featured jokes about beheading or otherwise deposing Spain’s king. The charges: encouragement of terrorism. The police took advantage of the occasion to raid an anarchist social center with which the detainees had no relation. In their press statements, faithfully produced en masse, the police claimed that anarchists had infiltrated the plaza occupation movement, when the truth of the matter is that those targeted by the raid, as well as anarchists in other cities, had openly participated in the movement from the very beginning. This case bears strong resemblance to the arrest of five anarchists in Ohio on the anniversary of the Occupy movement, targeted in a police operation that smacks of entrapment.

On November 13, 2013, five anarchists were arrested in Barcelona, accused of being the authors of a small bomb attack that had occurred in an empty cathedral, destroying a couple wooden pews and injuring no one. The statement that claimed responsibility for the attack focused on the Catholic Church’s role in the colonization and despoliation of Latin America. Incidentally, the police have no evidence connecting any of the five to the bombing. They have grainy video in which two of the accused are supposedly seen in a café and a bus station near the cathedral, although they can’t be positively identified due to the quality of the images. Much more convenient for the police is that those two had also been accused—and fully acquitted—of similar charges in a 2010 case in Chile; all five are foreigners; and all five are active anarchists.

And now, on January 14, three anarchists were arrested and charged with terrorism for the 2012 attack on a businessmen’s club in Galicia, northwestern Spain. This act of terrorism consisted of the lobbing of two molotov cocktails against an empty building, again with no injuries. Molotov cocktails were a standard part of the neighborhood struggles of the ’70s and ’80s, which helped force an end to the fascist dictatorship in Spain, though they continued throughout the following decade as destructive urbanization only accelerated under democracy. Short on historical sentimentality, the government would like to permanently remove those devilish little devices from the popular arsenal.

Cities across Spain are beefing up their riot police squads, buying sonar weapons, crowd control tanks armed with high-pressure water cannons, and other gadgets. Meanwhile, they are criminalizing the “less lethal weaponry” of the people within the rubric of antiterrorism. No surprise, since the law is just another of their gadgets.

Layoffs, evictions, gentrification, prisons, mass deportations, criminal codes, surveillance cameras, privatization of education and healthcare, the gutting of social security, riot police, the stirring up of nationalism: these are the weapons of the rich and powerful in this current crisis. In Spain as in a growing number of countries, the weapons of the weak and exploited to defend themselves against the onslaught have included protests, strikes, building occupations, open assemblies, prisoner support, books and flyers, the free sharing of goods, graffiti, posters, urban gardens, the self-organization of healthcare and education, the looting of supermarkets, barricades, the smashing of banks and other institutions of wealth and power, riots, and sabotage.

Sometimes, it turns out our weapons aren’t so weak after all. Those who took to the streets in Gamonal and other cities achieved a small but important victory. And many of those people share in a growing consciousness that they are part of something that extends across the globe. An integral part of that consciousness is the desire to spread news of their cause and pass on lessons and experiences that could be useful to similar causes around the world.

In Gamonal and beyond, the struggle continues.

Peter Gelderloos is the author of several books, including Anarchy Works and the newly published The Failure of Nonviolence: From the Arab Spring to Occupy. He lives in Barcelona.

And here we go again! It is January 2014, but somehow it all feels like last year, or the year before last… or ten years ago. Jakarta is under water; people are trying to save all they can, but their houses are being ruined… some men, women and children are dying… Tens of thousands are sick, suffering from typhoid, and diarrhea.

As I plunged into flooded areas, my friend, a medical expert from Yogyakarta, sent me a text message: “Please be careful in Jakarta… Leptospirosis, typhoid and other infectious diseases…”

Dozens had already died in the capital city alone, or at least this is what was reported in the local media. As always, we will never know the real numbers. As always, they are much higher.

This year they erected many more posko’s in Jakarta than in 2013. A posko is basically a post, often put together during natural disasters, in theory in order to provide help, to distribute water and food, or to give shelter. In the neighborhood of Kampung Melayu, there are dozens of posko’s: even the notoriously brutal Special Forces – Koppasus – are managing one, and the police have another just next to it. The Muslim NGO has one, too. Each post has a self-promoting logo. But inside, it is all empty; the police and soldiers playing games, eating or sleeping. Inside the shelter, there are only a few women and a couple of kids. Rubber boats are having a dry run; they are being inflated and deflated, while other rescue vessels are resting against the wall. Cranes, ambulances, boats; many of them are totally idle.

“This year’s floods are worse than those from the last year”, explains a police officer, called Nurasid. Inside the shelter, the daughter of a neighborhood chief says she had been here for six days already: “This time the water was two meters high, as I measured it inside our house. I have no idea why.” Good question, as this administration was actually elected mainly because it promised to ease the almost total traffic gridlock, and to prevent devastating floods in the capital.

A few minutes’ drive, and under a flyover, dozens of people are living in the open, surrounded by bundles of belongings, by their children, and even by several domestic animals. One of displaced people, Mr. Ilyas, recalls: “We went to ‘At Tahiriyah Mosque’, but they were overstretched. We couldn’t enter other mosques – they just refused to let us in. They said that if we entered, it would be considered najis and kotor, meaning unclean, filthy. We had no idea why they felt that way… There are two hundred of us now, under this bridge. There is a police kitchen nearby, but they are cooking for themselves, not for us.”

The river is running wild and the houses along its banks are clearly cut off from the rest of the world. The locals, those who are dry, are having a day out, together with their children, looking at those who are not as fortunate.

Boredom in Indonesian cities is legendary, and every misfortune or disaster draws large crowds. There is not even the slightest attempt to provide some relief, by the government or by the neighbors. Not now, not while I am there. It was the same last year… I know people get some help. But it is sporadic, uncoordinated, and insufficient.

The water rises and subsides. People die. Thousands lose their shelters, hundreds of thousands, sometimes millions, have their dwellings damaged. Arch capitalist Indonesia does close to nothing to help. The system despises everything that is public. Only profitable undertakings are taken seriously and implemented. Meaning: only those activities that can enrich individuals, who are already wealthy, are seriously considered.

As Jakarta is under water, the rest of Indonesia is living through many equally unnecessary horrors: the flood inundated at least twenty-two villages in Central Java, and landslides killed people in Malang, East Java. Nineteen people died from flooding and landslides in and around Manado, on the island of Sulawesi. Several years ago, the UN nominated Indonesia as “the most disaster prone nation on earth”.

It is true that the country sits on the so called ‘ring of fire’. It is true that it is periodically shaken by earthquakes, battered by tsunamis and even by ash flying from restless volcanoes. Some calamities cannot be predicted or prevented. But most of the lives lost are due to absolutely ‘unnatural disasters’ triggered by a totally unnatural element – bizarre market fundamentalism. Indonesia is run by thugs, by a heartless, cold-blooded clique of thieves, who have survived as species ever since the US-sponsored coup of 1965 in which most of leading Indonesian citizens were slaughtered, imprisoned or exiled.

The country is kept static by a violent blend of late feudalism/early capitalism, fundamentalist religiousness (definitely not only Islam, but also Christianity, even Hinduism), and disinformation/ awful level of education.

The infrastructure of the country is almost finished – collapsed. Corrupt priests, factory owners, business lobbies: all of them have no time for things they see as frivolous or even insane: like public works, the building of public transportation, better schools and hospitals, or simple things like tsunami prevention, a drainage system, waste management or the distribution of drinking water.

The country’s system is essentially based on maximizing profits, on looting all there still is under and above the earth, and then on throwing some meager and voluntary charity into the faces of the poor, that is the majority. As a member of the Academy of Science of Indonesia told me few years ago, Jakarta and all major Indonesian cities have the worst access to clean water than the cities of India and even Bangladesh. Waste management is seen as an unnecessary expenditure. And so the rivers and channels of all major cities are clogged by garbage.

The drainage system is inadequate and old, dating often to the Dutch era, when Jakarta, then Batavia, was a small city of few hundred thousands, not the monster of twelve million that it is now. There are hardly any green areas in the city, as developers ate almost all the parks. And in the mountains, soil erosion, excessive logging, mining and ‘development’ again, caused such environmental destruction that in the rainy season, water flows from higher ground in an unpredictable and uncontrollable way.

Of course nature fights back; it punishes those who break its patterns, destroying it. Unfortunately, in this country, those that are really responsible for this disastrous national project – Indonesia – are hiding behind high walls in comfortable and relatively safe neighborhoods. The poor, robbed of everything and unprotected, are battered by landslides, inundated and ruined. It is all very brutal and very simple.

“In Jakarta”, as a leading Indonesian businessman who presently lives abroad told me: “they will never build any decent public transportation system, because of the car lobby. And business cares nothing that all major cities are experiencing near-total gridlock and terrible pollution”. The same can be said about the construction industry. As I was explained to by Ms. Sofya, a victim of this year’s floods, who literally lost her house in North Jakarta: “Why should businesses care about state projects. Once they are finished, state projects do not return. If no drainage is built and floods keep coming back every year, hundreds of thousands of houses will keep getting destroyed … It is great, isn’t it? It is great for business. It means tremendous profits for those who repair and rebuild houses and buildings.”

Professor Muslim Muin from the prestigious Bandung Institute of Technology (ITB) has no doubts where the problem lies: “Don’t blame the ocean. The sea level this year is normal. The problem is that the rivers and channels in Jakarta, cannot not cope with the amount of water. Before the rainy season, the government should perform a hydrodynamic simulation, and then it would know what kinds of pumps are needed and what type of drainage system should be used.”

But the government doesn’t perform almost any such tests. And every year, the floods come as a ‘surprise’. And people lose their homes. And those in power make huge profits. And the religions somehow make sense of all this, so that the rich remain rich. And nothing changes. And so next year, the nation will be once again be ‘surprised’ by new occurrence of devastating floods.

Andre Vltchek is a novelist, filmmaker and investigative journalist. He has covered wars and conflicts in dozens of countries. His discussion with Noam Chomsky On Western Terrorism is now going to print. His critically acclaimed political novel Point of No Return is now re-edited and available. Oceania is his book on Western imperialism in the South Pacific. His provocative book about post-Suharto Indonesia and the market-fundamentalist model is called “Indonesia – The Archipelago of Fear”. He has just completed the feature documentary, “Rwanda Gambit” about Rwandan history and the plunder of DR Congo. After living for many years in Latin America and Oceania, Vltchek presently resides and works in East Asia and Africa. He can be reached through his website or his Twitter.

Adam Hanieh

Jadaliyya (J): What made you write this book and what are its key themes?

Published by Haymarket Books

Adam Hanieh (AH): The book was written over the course of 2011 and 2012 and was intended as a contribution to some of the debates that emerged in these first years of the Arab uprisings. I did not want to write another narrative account of the uprisings themselves. This was partly because these were events still unfolding and shifting rapidly from day-to-day; it was also because there had already been several very useful books published along these lines, including, of course, Jadaliyya‘s The Dawn of the Arab Uprisings. Rather, I wanted to present a longer-term view of the political economy of the Arab world in order to contextualize these revolts in the changing class and state structures of recent decades. I also aimed to address a number of myths and misconceptions about the region, which I believed tended to misrepresent the nature of the uprisings.

Along these lines, the book is not structured along individual country histories but rather tries to draw out general themes. There are four key arguments that run through the book:

First, I try to unpack the frequent refrain that we heard in early 2011 from many mainstream analysts and government spokespeople, namely, that the uprisings were simply a matter of dictatorship and political authoritarianism, and that if capitalist markets were allowed to flourish then all would be fine.

A striking example of this perspective wasObama’s comment in a major policy speech of May 2011, in which he stated that the region needed “a model in which protectionism gives way to openness, the reins of commerce pass from the few to the many, and the economy generates jobs for the young. America’s support for democracy will therefore be based on ensuring financial stability, promoting reform, and integrating competitive markets with each other and the global economy.” Likewise, then-president of the World Bank, Robert Zoellick, had argued that the revolts in Tunisia occurred because of too much “red tape,” which prevented people from engaging in capitalist markets. In contrast to these perspectives, which continue to dominate the way that the uprisings are discussed, I argue that we cannot separate the political and economic spheres of capitalism in the Arab world. These are fused, and the forms of authoritarianism that are so prevalent across the region are a functional outcome of capitalism itself, particularly through the neoliberal period.

In a related sense, a second key focus of the book is to grasp, in broad outlines, the main features of capitalism in the region. I approach this by tracing the historically structured processes of class and state formation and their interlinkages across different spaces and scales: rural and urban; national, regional, and global. One chapter discusses neoliberal policy in the Arab world and another focuses on agriculture and the rural sector in North Africa. These policies have produced highly polarized outcomes. A tiny layer of the population linked closely to international capital benefits from its control over key moments of accumulation and exists alongside a growing mass of poor, dispossessed populations across rural and urban areas. Networks of production and consumption are integrated into the world market to varying degrees, but have consistently produced high levels of dependence on imports and an exposure to the vicissitudes of the global economy. Authoritarian state structures – distinguished by a particular dialectic of centralization and decentralization that I discuss in the chapter on neoliberalism – have been the essential driver of this lopsided capitalist development.

A third major theme that runs through the book is the manner in which the Middle East has been inserted into the world market and remains a key zone of global rivalries. In this regard, one chapter focuses on the military and political economic aspects of Western policy toward the region. I examine the use of financial instruments such as debt and foreign aid, as well as the range of trade and investment agreements that have proliferated over recent decades. This process has taken place in confrontation and interaction with indigenous social and political forces in the area. The unfolding process reconstituted patterns of state and class, opening the way to the penetration of neoliberal reform. It has altered the patterns of accumulation internal to the region itself, while differentially integrating various zones of the Middle East into the world market. These themes carry through two other chapters that consider the special place of Palestine and the Gulf states respectively. In the case of Palestine, I argue that we need to go beyond considering the Palestinian struggle as just a “human rights” issue, but rather see it as integrally connected to the ways that capitalism in the Middle East has formed under the aegis of Western domination. I believe this has important implications for solidarity efforts and also for how we assess quasi-state structures such as the Palestinian Authority.

The final theme that runs through the book is the argument that we need to take seriously the development of the regional scale over the past period. What I mean by this is that we should critically re-assess the methodology of much academic writing on the region that divides the Middle East up into separate ‘ideal types’ – such as authoritarian, republican, monarchical states – and then proceeds to delineate supposed similarities and differences on this basis. I criticize these approaches for their methodological nationalism, that is, their assumption of the nation-state as the natural and given vantage point from which to consider the political economy of the region as a whole. In contrast, I argue that the vast flows of capital and labour across borders means that processes of class and state formation striate national boundaries; for this reason, the nation-state cannot be understood as a self-contained political economy separate from the ways it intertwines with other spatial scales, namely the regional and global. It is thus impossible to understand processes of class and state formation without tracing the way these cross-scale relations develop and interpenetrate – how these relations become part of the very nature of the nation-state itself. Most important to this reconsideration of the regional scale is the role of capital from the Gulf Cooperation Council (GCC). A chief premise of this book is that the internationalization of GCC capital has transformed the political economy of the region, becoming internalized in the class/state structures of neighboring states. I examine this process both theoretically and through an empirical investigation of various markets, particularly key sectors of the Egyptian economy.

I think all these themes have direct political implications. These include questions such as the impact of the global economic crisis and what it might mean for the politics of the region, our understanding of the relationship between national and regional struggles, how we assess the role of the military in places such as Egypt, the nature of movements such as the Muslim Brotherhood, and whether the orientation toward a so-called patriotic bourgeoisie (ra’s al-maal al-watani) as a progressive force makes any sense in the current context.

J: What particular topics, issues, and literatures does the book address?

AH: The book cuts across a variety of different disciplinary literatures. Within the domains of political science and political economy, I engage with some of the debates around the relationship between state and class formation, and the notion of civil society. The book argues against institutionalist perspectives that treat the state as a disconnected, all-dominating ‘thing’ rather than as a social relation formed alongside the development of class. As I have pointed out above, I attempt to show that the authoritarian guise of the Middle East state is not anomalous and antagonistic to capitalism, but is rather a particular form of capitalism in the Middle Eastern context. This necessarily involves dealing with debates around the nature of class itself, and here I attempt to advance a non-reductive account of class that both avoids the standard Weberian accounts of class as simply a category of income, status, or ‘interest groups,’ and simultaneously guards against economistic views that tend to set up class as an abstract category shorn of its particularities. This means, for example, that it makes little sense to speak of class in a concrete sense without also acknowledging that it is simultaneously gendered as it forms. Moreover, in the Middle East context, as well as globally, class formation cannot be understood without tracing movements of people across and within borders – it is thus also marked by distinct and concrete relationships between geographical spaces. There are also various forms of labour exploitation that take place within both rural and urban sectors. These processes need to be considered concurrently if a full picture of class formation is to be grasped.

I try to situate these processes within the context of the world market, and this inevitably means engaging in the debates around theories of imperialism, the particular role of the United States within the global economy, and the nature of emerging powers such as China and Russia. A very interesting and wide-ranging debate has raged over the last two decades around these issues within the wider political economy/international relations literature, and I strongly believe that much writing on the Middle East is not sufficiently attuned to these questions at a theoretical level. Given that our region is arguably the most important zone of the global economy in which the various rivalries and inter-dependencies of global powers are played out, I think it is striking that little attention is shown to these questions beyond merely descriptive accounts often based upon rather superficial assumptions. I am particularly interested in how these global factors intersect with the form of social relations at the national and regional scales – and how these social relations, in turn, help to shape the global.

J: How does this book connect to and/or depart from your previous research?

AH: My previous book, Capitalism and Class in the Gulf Arab States, follows a similar methodological and theoretical perspective, although focused particularly on the six GCC states. This earlier book made some tentative arguments around the importance of internationalization of Gulf capital for the Arab world, and I try to flesh this out with a deeper empirical investigation in Lineages of Revolt. I feel that often the role of the Gulf is looked at through the lens of religion, sectarianism, or geo-political questions, rather than located in the way that the Gulf’s position in the region has changed over the past period. The role of the Gulf states needs to be incorporated into any assessment of neoliberalism in the Arab world. The dramatic restructuring of class relations that occurred in tandem with neoliberal reform not only enriched national capitalist classes backed by authoritarian states, but also acted to strengthen the position of the Gulf states within the wider regional order. These patterns are not separate from the Gulf’s existential link with U.S. power – both represent different modalities of the way that the Middle East is inserted into the world market.

In this manner, the book also reflects a long-standing interest in theories of neoliberal capitalism and its impact on the Arab world. In the book I explore the specificities and similarities of neoliberal reform processes across different zones of the Middle East, in particular North Africa and the Palestinian West Bank. One of the things I have emphasized in the book is that this is not just a question of capital and the state; it is also closely connected to forms of labour exploitation and, consequently, migration. There are ongoing, massive flows of people across the region, which make the Middle East one of the most important sources and destinations of migration in the world today. These are closely related to the processes of class formation I analyze in the book, and carry important implications for political and social movements in the region. Along these lines, I have drawn upon my research interests on labour migration within and to the Middle East.

J: Who do you hope will read this book, and what sort of impact would you like it to have?

AH: I hope the book will be of use to people interested in the political economy of the Arab world and that it helps to shift the ways these issues are typically framed in popular and academic discourse. For those people who may be experts on individual countries or sub-regions of the Middle East, the book will hopefully provide some food for thought on how the wider regional and global contexts shape national processes. Part of the motivation for writing this book was also a desire to engage with people working on wider political economy issues, but who may not be that familiar with the Middle East situation.

Many of the questions that inspired this book draw upon experiences over the last decade or so in various campaigns and solidarity movements around Palestine and other struggles in the Middle East. The book is very much informed by these political debates, not least in the way that I attempt to integrate the question of Palestine into the wider regional political economy. In this sense, a lot of what I write in the book reflects a collective thinking-through and shared experiences with many very inspiring people across the world, rather than any particular individual endeavor. I would be very pleased if the book gives something back to these movements, and I have tried to write it in such a way that it can be useful to activists in the Middle East, or solidarity movements outside the region. •

Adam Hanieh is a lecturer in development studies at the School of Oriental and African Studies (SOAS), University of London.

This interview was conducted by the editors of Jadaliyya, where it was first published.

Excerpt from Lineages of Revolt:
Issues of Contemporary Capitalism in the Middle East

From Chapter One

[Excerpted from Lineages of Revolt: Issues of Contemporary Capitalism in the Middle East, by Adam Hanieh, by permission of the author. © 2013 Adam Hanieh. For more information, or to buy a copy of this book, click here.] •