In Defense of Looting: Select Quotes from Chapter 9
On the crisis in capital in the early 1970s. For more on this era of capitalist development I recommend reading Brief History of Neoliberalism by David Harvey
“As rioters, protesters and strikers continued to force wages higher and increase state programs, and as automation increased global productivity to be faster than consumption could absorb, corporations suddenly couldn't sell enough of their products and profits began to stall out. This crisis came to a head in the crash and recession of the early 1970s- most of that decade saw severe economic retrenchment, stagnation and collapse as municipal and state governments went broke and jobs disappeared. But a total reckoning was staved off by the ending of the Bretton Woods agreement and the “floating of the dollar”, which decoupled the value of the dollar from real value in gold, fully transforming the US state and the Federal Reserve into the backbone of global capital.” (220)
In this section there is a discussion of the relationship between the collapse of combative political initiatives and the rise of neoliberalism, as well as its connection to the crisis of “stagflation” which occurred in the early 1970s. What is specifically important about this period is that the conditions that would result in the collapse of 2008 (easy to acquire liquid capital, a focus on asset price increases and artificially low interest rates) all emerged during this period. To address the dual dynamics of inflation and economic stagnation, there was a shift in the shape of the economy, as federal policy, specifically under Reagan, became built around attempting to financialize the economy, or make the economy based on services and investments, rather than material production.
It was this dynamic that allowed for the cascade in asset prices to occur between 1990 and 2008. During that period credit became increasingly easy to obtain, which drove up consumer demand for large items (houses, cars, etc), which in turn drove price inflation in these markets. At the same time we were experiencing mass economic contraction as a result of automation driving wages down and leading to increased unemployment, the 1973 Oil Crisis and falling profitability as US manufacturers started to attempt to compete globally. So, at the same time that wages were falling and cost of living was rising the prices of things like houses continued to increase at a rate faster than general inflation.
This then generated the dynamic in which home owners would refinance their homes at low interest rates, sometimes frequently, as the price of their home increased. This financial windfall was then used in a lot of cases to cover for holes in the household budget caused by stagnating or falling wages. At the same time the wealthy were taking their tax breaks, which were justified under the adage of “trickle down economics”, and investing them in stock. Companies also took their newly found financial benefits and started using them to buy their own stock rather than building the manufacturing facilities and hiring the employees that they promised to if we would only give them one more tax break. This increase in incoming capital drove stock prices up, far beyond the actual value of the capital contained within the company (company stock was sometimes 40-50 times the value of the company in material capital terms). As this occurred financial assets became decoupled from the “real economy”, and began to function as an abstract asset in themselves, traded often automatically, for easy profits. It is from this dynamic that we see the vast, and widening, gulf between the wealthy and everyone else which has typified the 21st Century.
All that it took was for housing demand to dry up, as it did in the 2005-2006 period, to cause prices to stagnate, preventing people from using refinancing to deal with economic shortfall, and eventually driving many of these homeowners into foreclosure. This dynamic was even more brutal in the Rust Belt, where wages fell dramatically, as union labor was eliminated and replaced by machines and low wage jobs, which, when combined with predatory lending practices on the part of financial institutions targeting communities of color, led to the vast emptying out of whole parts of cities between 2006 and 2009.
“But this era of general crisis that began in the seventies did not see a proliferation of mass movements in the United States. Instead, a wave of revolutionary fervor faded and fell to repression...And though instances of anti-white-supremacist rioting took place- most significantly in LA in 1992, but antipolice riots popped up every few years throughout the period- they mostly failed to initiate a cycle of social transformation.
Without a broader movement context, rioters increasingly appeared as simple pariahs. Looting became the prototypical evidence of Black pathology and crime. As the political center of gravity in America definitively shifted to the white suburbs, even liberal explanations of rioting and looting, such as those put forward by LBJ's Kerner and Governor Brown's McCone Commissions, were rejected. Sociology was dismissed for psychology, and narratives about looting and rioting were explained as a question of culture, crime and family. This newly re-racialized definition of looting would reach its horrific apotheosis in New Orleans in 2005, when police and white vigilantes murdered Hurricane Katrina refugees with impunity under the aegis of “stopping looting”“(222).
On the dynamics of the riots in 1992 and its relationship to the rising post-industrial economy:
“Whereas the uprising generalized across the working class, the riots were led by a new group of the urban poor. Members of a new underclass of the near permanently unemployed, cut adrift by the Reagan-driven destruction of social services and the collapse of manufacturing jobs, existing largely outside of the circuits of production and consumption, this class lives at the very margins of society. At the time of the uprising, the LA court bureaucracy was referring to cases around improverished Black males as “NHI”– “No Humans Involved”. As Sylvia Wynter writes, Rodney King was a member of these new Black masses, who, in distinction to the Black middle class that had grown since the sixties, “have come to occupy a doubled pariah status, no longer that of only being Black, but also of belonging to the rapidly accelerating Post-Industrial category of the poort and jobless.” People the state considered to be NHI led the LA uprising, and in thinking through and fighting alongside their rebellion, Wynter argues, we can begin to overturn the current system that constructs “humanity” in such a way as to exile them from its protections and care.” (230)
“The LA riots were ythe first uprising of this new postindustrial underclass, which Marxist theorists has referred to as “surplus populations”– people outside the process of the production of value, people who aren't even needed to drive down wages like the usual mass of unemployed proletarians are. These people whom capitalism regards as surplus do not and cannot make demands of a traditional industrial workplace, so their movements are invisible or opaque to many so-called revolutionaries who believe revolution can only emerge from a shop floor. And this disregard is furthered by the fact that the form of organization favored by this new population of declassed poor is not the union but the criminal gang.“(231)