Category Archives: Finance Capital

Modern finance capital’s godfather Joe Flom Dies at 87

Flom’s leadership of Skadden Arps, the giant NY based corporate law firm, helped alter the shape of modern capitalism. Flom helped revitalize the market for corporate control as the investment banking world warmed up to the idea that they could and should help with hostile take overs. An era of significant change in management culture followed.

Joseph H. Flom, Pioneering Deal Lawyer, Dies at 87 – NYTimes.com.

Crony Capitalism and “The Great Arab Revolt”

The only comment I would add to this otherwise excellent analysis of the current revolutionary wave washing over the middle east and north Africa by Michigan historian Juan Cole is that the combination of authoritarian rule and neo-liberal reform is not peculiar to the region.

There is no alternative, as Thatcher would say, to authoritarian rule in order to implement neo-liberal reform – from Poland to China to Egypt it has always and everywhere been accompanied by repression, forced restructuring and unemployment and political corruption leading to inequality and the harshening of class conflict.

The myth of the two decades since the fall of the Berlin Wall that globalization would lead to a stable rule of law and democracy has now been exposed for what it is. The events of the last few weeks, only the most visible of a long wave of resistance to restructuring in places like Egypt, only highlight this reality.

Cole says there are now renewed hopes for liberalization, which he suggests indirectly are naive. That is to be determined. The question is the content of “liberalization” – the aspirations of a Wael Ghonim, the Google entrepreneur in Egypt, are likely to be satisfied with a far different approach to reform than the textile workers at Ghazl Shebeen el-Koum.

The Great Arab Revolt | The Nation.

Is Egypt headed for the Weimar “Solution”?

The Times finally wakes up and notices the Egyptian labor movement. Of course, more than 2 million workers have gone on strike in Egypt in the last few years. The 3 week effort to push Mubarak out of power was the cherry on the sundae of a very deep and long effort.

But big questions remain: how will labor organize itself? will it push beyond demands for union recognition and confront basic questions of economic and political organization?

In Germany in 1919 a revived labor movement at the heart of the German Revolution of 1981-19  led to the fall of the monarchy and then the creation of the Weimar Republic. While many on the left viewed it as a new form of progressive government it was hobbled by all sorts of political compromises that in fact left a door open for the restoration of authoritarian rule – in the form of the new Nazi party.

Egypt must avoid that outcome. It is not clear that there is an “Egyptian solution,” however, without a regional solution that encompasses the rest of the Arab world and Israel as well. None of the countries in the region can stand on their own. to be independent of big power influence they need to organize together, democratically.

Workers Press Demands After Aiding Egypt’s Revolt – NYTimes.com.

After Egypt, is China next?

Here is some critical background information on key role of workers in recent Egyptian events. Stanford historian Joel Beinin confirms my view that the uprising has been in part a response to neo-liberalism and the authoritarian nature of politics that is associated with globalization. For more on labor and authoritarianism in the global economy see my book, From Che to China.

This makes the current international movement very different than what happened in Poland in 1980-81 or in eastern Europe more generally after 1989. In fact, Polish Solidarity was defeated by martial law and neo-liberalism unleashed in the 1980s and 90s.

But the Egyptian events come in response to two decades of neo-liberalism as Mubarak oversaw the dismantling of the state socialism of the Nasser era. As Beinin says about a minimum wage campaign by Egyptian textile workers:

“Raising the minimum wage is not simply an economic demand, it’s a political demand, because it is in opposition to the whole neoliberal economic restructuring project that has been proceeding very rapidly in Egypt, especially since the government that was recently deposed was installed in July 2004.”

A similar kind of neo-liberal reform process is underway in China as the authoritarian regime transitions from Maoist state socialism to property rights based capitalism. And workers there are also engaged in widespread job actions, so it is possible the events of Cairo could be echoed in Beijing and Shanghai. Indeed, there are reports the Chinese censored media and internet coverage of the Egyptian and Tunisian events.

Striking Egyptian Workers Fuel the Uprising After 10 Years of Labor Organizing.

Egypt is not Poland – conservative thinkers wrong about labor’s role in Tunisia and Egypt

This commentary in the UK Guardian tells an important aspect of the recent events in Tunisia and Egypt that is not getting near enough attention in the US, namely that the 18 day movement that ousted Mubarak came after years of struggle and conflict with workers organizing a key factor.

But the article comes up short in its analogy with Poland.

As is now well known, the Polish Solidarity movement that emerged in 1980-81 was killed off by the imposition of martial law. (I was there in Poland in the 80s meeting with underground activists and saw the impact). What re-emerged in 1989-1991 as Stalinism collapsed was a far weaker organization unable to withstand the neo-liberal regime being imposed on a global scale.

In other words, the Polish working class was defeated not victorious over a twenty year period and thus it is not really an “appealing model” as the authors suggest despite the undeniable heroism and inspiration that the 1980-81 period provided the entire eastern European democracy movement.

In Egypt and Tunisia, on the other hand, the strike wave has emerged in the wake of the attempt to impose neo-liberal reforms. Thus, these new unions face directly not just questions of union freedom but of economic and political structure in their society.

And certainly if they do not move beyond what might be called “ordinary bread and butter trade unionism” they will once again find themselves under the yoke of global economic forces, but with new bosses who happen to use Facebook and Google.

But if the Egyptians and Tunisian workers can find a new voice, they may in fact provide an inspiration to Polish workers and workers around the world that resistance to the neo-liberal model of globalization can succeed.

It may be that the reason the authors do not reach this fairly straightforward conclusion and try to steer the Guardian’s labor audience back in time is that there is a conservative edge to their thinking – Lee, although a web designer for trade unions and editor of a website on union events, is a strong defender of some of the worst of Israel’s politics and was a supporter of the US invasions of Yugoslavia and Iraq, while Weinthal is a fellow at a neo-con think tank and writes for National Review Online.

Trade unions: the revolutionary social network at play in Egypt and Tunisia | Eric Lee and Benjamin Weinthal

Strike wave part of Egyptian revolt, includes Suez Canal workers

A strike wave in Egypt is adding weight to the democracy movement there, according to press reports. As in many authoritarian regimes there is an “official” Egyptian trade union movement set up to keep workers in line, but that has not stopped independent organizing efforts in the country. (For more on the phenomenon of authoritarianism and the global labor movement see my book on the topic here.)

Now there is a strike underway by workers on the Suez Canal, though details are sketchy. A BBC news crew was detained on its way to cover the strike and sent packing by the authorities.

A sign of the bravery of the movement was the willingness of some workers to protest outside the government controlled union federation itself (picture at left). While the strikes are focused on economic demands their timing indicates a clear tie to the broader social movement underway in the country.

Egypt protesters seek to spread beyond Tahrir Square – CSMonitor.com.

Today’s Times has more details here.

Egypt’s unfinished revolution

Today was a good day for the Egyptian revolution…the people are not backing down despite clear awareness that they are up against Mubarak, the Egyptian military that he controls and the US Government that is sticking with the regime in its call for an “orderly” transition, which is sounding almost fascistic in quality compared to the clear desires of the Egyptian majority.

BBC News – Analysis: Egypt’s unfinished revolution.

Stanford Historian Joel Beinin on labor role in Egyptian revolution

As I have said several times, the Egyptian working class is a critical factor in the current events. Historian Joel Beinin at Stanford is an expert on the labor movement in Egypt and was interviewed recently about the current situation.

Historian Joel Beinin on the Egyptian Labor Crisis.

You can learn more by reading this report authored by Joel for the AFL-CIO. Joel also has a very useful chapter in this edited collection on the authoritarian character of neo-liberal reforms in Egypt.