The assault on culture and the crisis of American capitalism

The strike by members of the Detroit Symphony Orchestra (DSO), which began Monday, is a politically and socially significant event. The players walked out in the face of management demands that would mean a severe decline in living standards—a 33 percent cut in base pay and reduction in the pay for new-hires of 42 percent, along with sharply reduced health coverage and a freeze in pensions.

As well, the orchestra is insisting that the musicians carry out all manner of nonperforming duties, turning them into what a players’ representative described as “servants.”

The Detroit Symphony has a long and illustrious history, dating back to 1914, and is regularly ranked among the finest orchestras in the US. The ongoing economic crisis has devastated the state of Michigan and the city of Detroit. The orchestra faces a $9 million budget deficit, as ticket sales have fallen, along with private donations. According to the New York Times, “Banks will no longer lend it [the DSO] money…and it is raiding its endowment to pay for operations.”

The crisis at the DSO is part of a national phenomenon. Budgets for arts groups and arts education are under relentless attack from governments in the US at all levels, while wealthy individuals and corporations are reducing their financial gifts. Pay cuts have been imposed at symphony orchestras in Phoenix, Houston, Cincinnati, Seattle, Indianapolis, Milwaukee, Baltimore, Atlanta, Virginia, North Carolina and Utah, among other cities and states.

One third of museum directors in the US had taken pay cuts by October 2009, along with thousands of museum employees.

Thirty-one state arts agencies predict decreases in funding for 2011. Arts appropriations at the state level have declined 34.7 percent in the past decade. When adjusted for inflation, the 10-year decrease is just over 45 percent.

The entire federal contribution to some 100,000 not-for-profit arts groups in fiscal year 2009—through the National Endowment for the Arts—added up to $155 million (a day or two of spending on the Afghanistan war). The NEA budget in 1978 was $123 million, or $416 million in current dollars.

American capitalism in decline has neither interest in, nor financial support to offer, artistic creation. In more prosperous times, the corporate elite felt there was a certain prestige value in subsidizing various educational and cultural activities. Now the aristocracy that rules the US views every dollar not accruing to itself to be a waste and even something of an affront. Cultural life in America is in serious danger from the vandals who sit in boardrooms and legislative chambers.

The notion that “the money is no longer there” (Detroit News) to support an orchestra—or a library or a public school for that matter—in Detroit, or anywhere else in America, is ludicrous. The financial markets and corporate coffers are awash in trillions. The News argues that “Working harder for less money is not an easy thing to accept. But it’s what the community that supports the DSO has had to do over the past decade.”

Which community? The very wealthy in Michigan (and in the US as a whole) are wealthier than ever. Bloomfield Hills, north of Detroit, ranks number four on the list of highest-income places in America with a population of more than 1,000—even as median household income in Michigan has plunged more than 21 percent over the last decade and Detroit’s official poverty rate has reached 36 percent.

In 2006, Forbes listed 8 billionaires in Michigan worth $16.5 billion. This year the magazine points to 10 billionaires worth $21 billion (a 22 percent increase).

The pseudo-populist attempt to pit DSO players, and other professionals, against lower-paid workers should be rejected with contempt. The interests of the latter are only championed by the media when it comes to beating down the efforts of slightly better-off sections of the population to defend their gains and rights.

The socially decisive differences in income are not between those making $30,000 and those making $130,000, but between this entire class of wage- and salary-earners and the superrich who individually loot the economy to the tune of millions, and in the case of Wall Street hedge fund managers, billionsof dollars a year!

Governments in the US have never adequately supported or funded the arts. On the one hand, the philistine ideologists of “free enterprise” have insisted that artists place themselves entirely at the mercy of the market, i.e., their ability to turn out work that yields profit, and have demanded that artists not be subsidized by the “taxpayers.” The miserable consequences of that can be seen in the current offerings of the for-profit film (Hollywood) and theater (Broadway) industries.

On the other hand, corporations and rich individuals were expected to make up the gap by their beneficence. According to the NEA in 2007, private donations accounted for some 43 percent of not-for-profit arts groups’ income, with governments providing only 13 percent.

This dependence on the largess of the wealthy is degrading and intellectually restrictive in the best of times. In a period of crisis, it threatens catastrophe. Now the very presence of music, art and drama in a given community may depend on the financial vicissitudes of the ultra-rich.

To point out to the bankers and CEOs, the people who “count” in America, that art is one of those activities whose creation and enjoyment renders human beings human, that it is essential to the life and well-being of an enlightened and sensitive people, that reducing the influence of artistic creativity will materially blight the lives of those deprived of it, is an entirely futile endeavor. Such arguments would only be met by blank stares.

The effort to slash the wages and benefits of the symphony musicians in Detroit and elsewhere, backed to the hilt in the big business media, ought to be instructive from another point of view. In effect, the musicians now find themselves in the same position as millions of auto workers, teachers and other workers. They may have thought themselves “professionals,” perpetually insulated from the kind of assault on living standards and jobs so many workers in the US and around the world have known, but the current situation is helping to clarify matters.

In the eyes of the ruling elite and its media, the DSO members are “servants,” expected to function under conditions dictated to them by management. Their strike action, which should be fully supported by every worker and student, is also part of a growing movement of resistance by the working class to the attempt to impose the full burden of the economic crisis on their backs.

As Leon Trotsky explained years ago, the period in which artists enjoyed relatively free rein, and received backing from the powers that be, existed on the same historical plane as the granting of “special privileges to the top layer of the working class.” The destruction of auto workers’ pay and benefits has inevitably preceded and facilitated the frontal assault on the Detroit musicians and other artists.

In the final analysis, the DSO confrontation expresses a stark reality: the survival and progress of art in America are incompatible with the corporate stranglehold over every important aspect of life. The wealth exists in abundance to fund every serious arts group in the US and provide every Detroit orchestra member, as well as popular music performers, painters, photographers, poets, and dancers, with secure economic conditions. But that wealth is jealously monopolized by a handful.

The DSO strike is not simply or even primarily a trade union conflict. It is a political and cultural struggle with enormous implications. The only genuine answer to the attacks on the orchestra musicians lies in conscious opposition to the attacks of the corporate elite, a rejection of their arguments and propaganda, and the emergence of an avowedly socialist movement among workers, professionals and students. (WSWS)

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US House passes anti-China trade war bill

The House of Representatives on Wednesday passed a bill giving the executive branch the power to impose punitive duties on exports to the US of any country whose currency is labeled “fundamentally undervalued.” The measure was pushed by the Democratic leadership and supported overwhelmingly by Democratic congressmen, with substantial Republican support.
The vote was 348 to 79, with 99 Republicans joining 249 Democrats voting in favor, and 74 Republicans voting “no” alongside five Democrats.

The bill was openly directed against China, which has come under mounting pressure from the Obama administration to more rapidly raise the exchange rate of its currency, the renminbi, so as to make Chinese exports to the US more expensive and US exports to China cheaper.

The White House has not taken a position on the House bill, whose prospects for passage by the Senate after the November midterm elections are uncertain, but Obama and Treasury Secretary Timothy Geithner gave a tacit go-ahead for Democratic House leaders to push the measure.

Testifying before Congress on September 16, Geithner declared the renminbi to be undervalued and demanded that the Chinese move more rapidly to increase its exchange rate. He indicated that if China refused to revalue its currency far more than its 2 percent increase since June, the US would take measures to restrict China's access to American markets.
On Wednesday, the day of the House vote, Obama, speaking at a town hall event in Iowa, said the Chinese currency was undervalued and added that “people generally think they are managing their currency in a way that makes our goods more expensive to sell there and their goods cheaper to sell here.”

Obama, who met with Chinese Premier Wen Jiabao September 24th during the United Nations General Assembly session in New York and pressed him on the currency issue, plans to use the House measure to bolster the US government's leverage against Beijing. Washington is seeking to line up international support to force China to revalue its currency at the G20 summit to be held November 10-11 in Seoul, South Korea.

If passed by the Senate and signed into law, the House bill would have little direct impact on US-Chinese trade. A provision requiring the government to impose countervailing duties against any country deemed to be undervaluing its currency was stripped from the bill in the House Ways and Means Committee before it was brought to the floor of the House for a vote. Instead, the bill allows the Commerce Department to define the undervaluation of a currency as an illegal trade subsidy and enables US companies that produce the imported goods to petition the government for relief, in the form of punitive damages on the allegedly offending country.

The Congressional Budget Office estimated that the bill would raise no more than $20 million a year in duties, as compared to $1 billion in daily imports from China, because so many of the goods imported from China are no longer made in the US.

Nevertheless, the bill represents a major step toward open trade war with China and will intensify the spread of competitive devaluations and protectionist measures internationally. It is in flagrant violation of international trading rules and the provisions of the World Trade Organization.

Nobel Prize winning economist Robert Mundell told Bloomberg Television that the bill “would create a very damaging thing to the world economy and the stability of Asia.” He added, “There’s never been any precedent in economic history where a country through any legal system was forced to appreciate its currency relative to another country.”

The timing of the bill, a month before the November 2 congressional elections, reflects the short-term political calculations of its congressional supporters. The Democrats in particular, but also Republicans in industrial regions, seized on the measure to demagogically pose as defenders of American jobs and blame mass unemployment on China.

Speaking from the floor of the House, Speaker Nancy Pelosi said, “We do this because 1 million American jobs could be created if the Chinese government took its thumb off the scale and allowed its currency to respond to market forces.”

This is an attempt to divert public anger over the refusal of the government to provide jobs or serious relief for the unemployed away from the American ruling class and the US government and direct it against a foreign bogey man. These are the same politicians, financed by corporate campaign donations and other forms of bribery, who have funneled trillions of dollars of taxpayer funds to Wall Street and now claim “there is no money” for jobs or schools and that nothing can be done to stop the banks from foreclosing on financially distressed homeowners.

The Democrats pushed the bill as part of their “Make it in America” agenda to revive US manufacturing. At the center of this policy is a doubling of US exports in five years to be achieved by drastically cutting the wages of US workers and increasing their exploitation, so as to narrow the labor cost differential between the US and the so-called emerging economies of Asia.

This promotion of economic nationalism and chauvinism has the full support of the trade unions. On Tuesday, 181 House members sent a letter urging Obama to back a complaint filed by the United Steelworkers union charging China with discriminating against US firms in relation to clean energy technologies.

The House bill is the latest in a series of developments reflecting a descent into international trade and currency warfare. On Monday, Guido Mantega, Brazil’s finance minister, said, “We’re in the midst of an international currency war, a general weakening of currency. This threatens us because it takes away our competitiveness.”

As a result of the cheap currency policy of the US, Europe and China, Brazil has seen its currency, the real, rise sharply against the major world currencies, including an increase of 30 percent versus the dollar over the past year. As a result, Brazil’s exports are threatened with being priced out of world markets.

Mantega said openly what is becoming increasingly obvious. The major economies are all seeking to drive down the exchange rate of their currency in order to gain a competitive trade advantage under conditions of stagnant growth and stagnant markets. The United States is leading the way, pursuing a cheap dollar policy. The dollar has declined by 11 percent since June against a basket of currencies and is now at its lowest level since February.

Europe, led by export-dependent Germany, is doing the same for the euro. Two weeks ago, Japan, whose currency had risen by more than 10 percent in relation to the dollar since May, unilaterally intervened in the currency markets, selling 1 trillion yen to force down its exchange rate.

Six days later, the Federal Reserve Board met and issued a statement signaling a more stimulative monetary policy aimed, in part, at raising the US inflation rate. This had the intended effect of sparking a new sell off of dollars, quickly reversing the 3 percent decline in the yen resulting from Japan’s currency market intervention.

With the passage of the House bill, the stage is set for retaliatory currency and trade measures not only between the US and China, but between all of the major economic powers.

The international currency system is breaking down under the weight of the mounting contradictions and systemic crisis of world capitalism. One stark expression of this process is the staggering rise in the price of gold, now above $1,300 per troy ounce and setting new records almost daily.

As the Wall Street Journal commented Monday: “Many investors are convinced the only truly reliable sanctuary is gold, leading analysts to believe it will continue its climb to record-breaking highs in the coming sessions.

“The unprecedented strength of the ultimate safe haven is a testament to investors’ uncertainty as monetary authorities around the world move into uncharted territory in their efforts to bolster struggling economies. The only certainty is that central banks and other decision makers appear to be united in pursuing strategies that will devalue their currencies, however diverse those strategies might be.

“‘We’re obviously in a competitive devaluation,’” said Drummond Brodeur, vice president for portfolio management at Signature Global Advisors in Toronto.”

The last time the world currency system collapsed was the 1930s, when competitive devaluations and “beggar-thy-neighbor” policies led to a fracturing of the world market into rival currency and trading blocs. The result was not only a deepening of the Great Depression, but the stoking up of international tensions that ultimately erupted in World War II. (WSWS)



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