Underlying the uprisings

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Adam Hanieh has written the essential work for understanding the current political economy of the Middle East and North Africa, and for explaining the political tasks that flow from that understanding. Hanieh writes with clarity and focus as he unfolds a sophisticated materialist analysis of the region in all its multilayered economic complexity. 

Hanieh succeeds in puncturing myths and truisms, such as the notion that the uprisings in the Arab world over the past several years are attributable to “wrong policies,” conspiracies, and so on. Rather, he shows how they are an outgrowth of the region’s evolving economy, and of the efforts of states to deepen and extend the sway of capitalist markets and the classes profiting from them. He depicts the essence of the social system in the region by tracing patterns of capital accumulation, the structures of class and state shaped by and shaping such capital flows, and the interconnections of all this with global capitalism.

Hanieh insists we take seriously the region as a region, that we “trace the changing hierarchies at the regional scale as an integrated unity that shapes social formations at the national level,” and that in turn have a similarly dialectical interaction with forces at the global level.

All of this is in contrast to the mainstream framework resting on a reified and mechanical state–civil society dichotomy. Instead, Hanieh focuses on relationships between capital and the state using Bertell Ollman’s concept of “internal relations.” Thus capital from a dominant country or region is not an outside imposition on another country’s economy, but, through flows of capital into the subordinate economy, and state guarantees of such flows, capital becomes an integrated, functioning part of the dominated area’s economy. Thus, for instance, Hanieh states that “a chief premise of this book is that the internationalization of the Gulf Cooperation Council (GCC) has transformed the political economy of the region, becoming internalized in the class structure of neighboring states.”

Hanieh also insists that the state should not be conceived as a self-contained “thing,” but rather “the set of institutional forms through which a ruling class relates to the rest of society.” As a result, analysis of the state must start with “the anatomy of bourgeois society,” of the mode of production, “of the laws of reproduction of the whole social formation.”

Going further, he stresses that internationalization requires extending the analysis of those relationships across regional and national boundaries, including understanding the role of the state in establishing and securing cross-national capital flows and ownership. This allows him to explain why there is no chance of a “patriotic” capitalist class leading a genuine liberation struggle today.

Hanieh stresses the centrality of imperialism, which he defines as dominant capital drawing the world market in on itself, forcibly extracting profits from around the globe “and thereby actively accentuating the unevenness of the system as a whole, while simultaneously deepening the interdependency of states as a necessary prerequisite for this extraction to take place.”

Such a relational view of imperialism helps us understand that imperialism is not just a quest for military or political domination. “Imperialism is primarily a question of exploitation—one that necessitates, and is principally bound up in, forms of economic domination.” [Emphasis in the original.] As a result much of the book is concerned with tracing the projection of economic power in the Middle East by imperialist states, and their attempts “to integrate the forms of accumulation in the region into global production chains and subordinate local classes to the exigencies of capital in the core countries of the world market.”

Using the same method, he explains that neoliberalism is not just a set of policies, but instead is an effort “to ensure the conditions for capitalist reproduction at a global scale” that has reshaped both the working and capitalist classes around the new internationally connected circuits of accumulation. In doing so, “[neoliberalism] has also lent a particular dynamic to the nature of the state apparatus, closely connected to the spread of authoritarian regimes.”

These new accumulation circuits were widened in the Middle East and North Africa (MENA) through the spread in the 1990s of free trade agreements, both country-specific and region-wide. Along with them came the imposition of structural adjustment programs, that is, privatization, austerity, dropping of barriers to investment, and so on. Loans and grants flowed from International Financial Institutions (IFIs) such as the World Bank and International Monetary Fund, not for development, but to structure privatization and heighten foreign investment.

On the one hand, the pact to integrate MENA countries into European markets forbade them from European Union membership. On the other, these pacts fostered not only Europe–MENA trade, but also trade within the MENA region, strengthening the salience of the regional level. In the words of EU commissioner Chris Patten, the goal was to “create larger [i.e., cross-national] markets, which will serve as a strong incentive to make the region more attractive for foreign direct investment.” That meant encouraging “rules of cumulative origin” under which a commodity’s inputs would originate, and its production would occur, in several countries.

In sum, western economic domination has deepened the uneven and combined development of the region, widened the hierarchies of states and their interdependencies, and utilized the resulting differentials of power to consolidate control. The most visible and salient manifestation of these processes has been the internationalization of Gulf capital and the enmeshing of Gulf conglomerates with domestic capitalist classes in the region.

But neoliberal policies imposed as part of this restructuring of capital flows have also been met by resistance, by huge demonstrations and strikes. It is the attempt to overcome this resistance that is the key explanation of the consolidation of dictatorships and authoritarian regimes.

The extra surplus value squeezed from an ever-more precarious and exploited workforce has nurtured the growth of large domestic capitals as well as provide “enormously profitable opportunities for foreign investors.” Hanieh notes that while mainstream analyses admit the growing poverty, unemployment, and social exclusion in the region, they don’t see how those are the inevitable and essential result of the growth and consolidation of a domestic capitalist class, one linked to state and foreign companies: “Immiseration and accumulation are forcefully connected—neoliberalism has effectively acted to redistribute wealth from the region’s poor to the wealthiest layers of society by subsuming every aspect of social life under the logic of capital. This radical reconstruction of class power remains at the core of the neoliberal project in the MENA region—and is an essential element to any assessment of the revolutionary dynamics of 2011.”

Hanieh turns this analysis forcefully on the case of Palestine. He notes that despite the historic salience of Palestine for liberation movements throughout the region, there has been relatively little class analysis of the Palestinian struggle, and the Palestinians’ cause is seen more as a humanitarian issue even by many radical analysts and activists. Hanieh’s multilayered methodology enables him to provide the theoretical and empirical basis for redressing this imbalance in a clear and politically compelling way.

Hanieh focuses on class and state formation in the West Bank, not because he feels it is more important than the other areas of Palestinian life (in Gaza, in pre-1967 Israel, or in the Palestinian diaspora), but rather to show how a correct analysis of the West Bank in fact requires situating it in the broader mechanisms of Israeli and imperialist class and state domination, instead of treating it as an isolated entity. He can thus explain how the occupation of the West Bank is inextricably connected to mechanisms impacting all Palestinians and the region as a whole.

Hanieh shows how the US–Israel alliance—advanced not only by military means but also through the normalization of Israel’s apartheid regime by international financial institutions and states (i.e., recognition of, trade with, and investment in Israel by Arab states)—“was central to the political subordination of the wider Arab region.”

The West Bank’s economy has over time been transformed from a predominantly rural one “to an incorporated, dependent, and subordinated appendage of Israeli capitalism.” This led to, and depended on, the proletarianization and dispossession of much of the population, accompanied by and facilitating “the development of a tiny layer of Palestinian capital that articulates Israeli rule and whose accumulation is dependent on this mediating position.”

As with other regional rulers, the Palestinian Authority’s policies are not due to corruption and incompetence (although those are certainly present); rather, failed strategies and theft are a function of the PA’s place in processes of class and state formation imposed by Israel, the US, and their regional partners.

The 2008 Palestinian Reform and Development Plan (PRDP) imposed neoliberal “reforms” to increase the centrality of free markets. It mandated a sharp reduction of public sector spending, cutting jobs and subsidies. It also encouraged the creation of Special Industrial Zones, which required that a certain percentage of the content of exports had to flow through Israeli factories. The PRDP, like the broader Oslo agreements of which it was a part, was enforced by PA security forces trained by US General Keith Dayton.

Hanieh draws a parallel between the way that a new Palestinian capitalist class developed through subcontracting and privileged trade relationships with the occupation and the processes shaping capitalist classes throughout the region. This is why he says Palestine must be seen not just as a humanitarian issue but as “an essential component of the broader struggle against the uneven development and control of wealth across the Middle East. . . . [U]nderstanding and confronting the political economy of Palestinian capitalism is very much entwined with a struggle of national liberation and return—the success of one fully depends upon the success of the other.”

Hanieh also builds on his previous book, Capitalism and Class in the Gulf Arab States, by situating that book’s already multifaceted analysis within the comprehensive framework developed in Lineages. (See review of “Capitalism and Class” at http://isreview.org/issue/82/hothouse-capitalism-gulf-arab-states.)

The Gulf, says Hanieh, must not be reduced analytically to “a giant oil spigot. . . . Fetishization of the oil commodity can lead to a kind of methodological exceptionalism that obscures serious examination of the questions of capitalism and class.” We must therefore go beyond the concept of the “rentier state,” that is, a state whose actions are explained by dependence on mostly external revenue from a key commodity.

In fact, the Gulf’s capitalists depend on “three main circuits of accumulation—the productive, commodity, and financial.” These circuits were mediated as they developed through family and business ties to the state and ruling families. Enhancing profit in each circuit has been the overwhelming dependence on migrant labor, first Arab, now mostly South and East Asian.

He then looks at dynamics of class and state at scales beyond the national level, that is, the increasingly pan-Gulf scale of the region’s conglomerates, supported especially by the GCC. At the regional level, the spread of neoliberalism opened markets, both commodity and financial, of other Arab states to this newly unified Gulf capital.

Hanieh describes challenges to the Gulf rulers’ domination in the post-independence period, including often-overlooked workers’ movements, challenges that help explain the extreme reliance on non-Gulf labor.

Again he challenges shibboleths, showing for instance how severe exploitation in other Arab countries and policies driving them off the land or out of their jobs were integrally tied to class and state formation in the Gulf as the recipient of “excess” workers. Even remittance flows can thus be analyzed as part of the regionwide system of exploitation.

Hanieh notes a partial exception to the reliance on migrant workers in the case of Bahrain, where the citizen population experienced quite significant proletarianization, due in part to the much lower levels of oil wealth. This overlapped with the entrenched discrimination against the Shi’a population, and explains why labor and left-wing movements continued to be a prominent feature of the country’s political makeup—and why the country “was the principal location of the uprisings in the Gulf in 2011.”

Hanieh then looks at the formation of the Gulf’s capitalist classes, whose wealth has come not just from oil, but also from related industries, even those related very indirectly, such as steel, cement, and aluminum, that benefitted from lower electricity prices thanks to lower oil and gas costs.

And even when examining oil wealth, Hanieh stresses how that has been used to unify and fortify Gulf dominance across both national and industrial sector boundaries, cutting across the rentier state shibboleth. That is, the skewing of Gulf economies toward oil has resulted, in an apparently ironic fashion, in tightened and reciprocal ties with core-country capital, not just in oil and gas, but also in manufacturing, finance, real estate, and industrial services.

Using again Ollman’s “internal relations” concept, Hanieh describes the intertwining of capital from the Gulf with that of Palestine and Lebanon. He also documents the domination by Gulf capital of crucial sectors of the Egyptian economy. In so doing he illustrates again the cross-national connections of the rulers and the resulting need for the ruled to raise their political horizons to the regional and global levels. The counterrevolutionary role of Gulf states throughout the region can thus be understood at its roots and not simply as an ideological or religious preference of regime heads.

Egypt’s neoliberalization is a particularly striking example of the regional significance of this unified Gulf capital, e.g., its involvement in Egyptian privatization. His conclusion: 

The Egyptian example confirms that the internationalization of Gulf capital was not simply a matter of access to oil revenues and the deployment of petrodollar flows, but was contingent upon the intensification of neoliberalism across the Middle East as a whole. Key sectors of Egypt’s economy—agribusiness, finance, industry, and real estate—became directly tied to Gulf capital. 

Gulf capital was the principal beneficiary of the restructuring of class relations occurring in the neoliberal period. “In this sense, neoliberalism needs to be understood as a project of class power that strengthened the position of national elites while simultaneously consolidating the Gulf’s influence over the region as a whole.”

Hanieh maintains that the Middle East needs to be seen not just as a basket of nation-states, but rather “as a set of internally related social relations that striate national borders.” A crucial consequence of this is that “any reversal of the patterns of neoliberal development in the Middle East requires challenging capitalism in the Gulf itself. For this reason, political struggles in the Gulf . . . are immensely significant and form a direct continuity with those elsewhere in the Middle East.”

Moreover, a vital element to challenging capital and state in the Gulf must be the defense of the region’s migrant workers…. There needs to be a serious attempt to build cross-regional campaigns with workers who come from beyond the Middle East based around the rights of citizenship, the right to organize, and working conditions. Workers from India, the Philippines, and so forth need to be seen as part of the region’s working class—not as foreigners, “guest workers,” or “domestics.” [Emphasis in original.]

Finally, state and class development in the Gulf are “inseparably bound to the ways Western power has developed over recent decades…. Gulf states form the core of the regional political economy,” and therefore, 

their paramount position in superintending imperialism flows directly from an existential concern in maintaining the patterns of uneven and combined development that have characterized the region as a whole over the last two decades. The Gulf’s location at the apex of these regional hierarchies is a consequence of precisely those same processes that have generated, in another form, the conditions for mass revolts. This bears important implications for understanding the possible future trajectories of revolution and counterrevolution. 

Hanieh’s concluding chapter, “Crisis and Revolution,” completes the tapestry woven from the threads of his book, and expands further on the political tasks flowing from his analysis. In the course of detailing various factors specific to each country’s revolt, he also stresses the unifying theme emerging from the uprisings: that the popular movements represented much more than the overthrow of despised dictators. Concentrating on the surface appearance of the demonstrations obscures their real content: “The battle against political despotism is inevitably intertwined with the dynamic of class struggle. These uprisings reflected not just a crisis of regime legitimacy or a concern with political freedom, but were—at their roots—confronting the outcomes of capitalist development itself.”

Hanieh’s analysis of expanding and ever-stronger chains of profit in the region and of imperialism, and his proof that these are the underlying base of the revolts, lead him to optimistic conclusions—and a challenge to us to aid those in revolt. 

The root causes of the uprisings remain unaddressed, and the potential for a renewal of struggle is ever present. The key reason for such guarded optimism is the growing clarity of the social and class dynamics that have propelled these movements, and the undaunted mobilizations that continue to take place. The millions of people who took to the streets for the first time in 2011 have themselves been radically transformed. . . . The revolutionary process must either continue to push forward to tackle capitalism itself or be silenced for another generation.

The fact that today ownership structures flow across the region, and between the region and imperialist countries, also has implications for the state and for the class character of any revolution against it. Thus the state form, too, has become internationalized, “oriented toward ensuring the conditions of accumulation for all capital, regardless of any apparent nationality. The region’s immense strategic significance, the manner of its integration into the world market, and the fusion of economic and political power all preclude any form of capitalism that is not highly autocratic.”

First and foremost this means grasping “the specificity of two poles of imperialist power in the region—Israel and the Gulf Arab states. . . . Israel’s special place in the projection of Western power stems directly from its character as a settler-colonial state dependent on the dispossession of the Palestinian people, which means that its alliance with imperialism is an existential part of the state itself, uniquely isolated from the domestic pressures within Israeli society.” The country “has also been deeply connected to the way that neoliberalism developed across the region. Therefore the Palestinian struggle holds immense strategic weight in the political struggles of the region as a whole.”

The Gulf’s “dramatic political ascendancy in the post-2011 moment” reflects those states’ particular role in the regional political economy, which bears consequences for coming political struggles. Reversing neoliberal policies anywhere in the region will come up against the entrenched interests of the Gulf states. This may not yet be expressed formally or explicitly, but it is expressed implicitly “in the essence of these movements and the social forces with which they must grapple. . . . [A]ny effective confrontation of capitalism requires a pan-regional approach. There are no long-term, nationally based solutions to the problems facing the Middle East that leave the control of such immense wealth in the hands of a tiny layer of the region’s population.”

Hanieh’s concluding paragraph points to the significance of the region’s uprisings for a globe in revolt against crisis, austerity, and repression. And because the hope emanating from the region is hope for the world’s exploited and oppressed, we all have a stake in the success of the MENA revolution.

Fortunately Hanieh’s superb work does a great job of preparing us to understand the basis on which such struggle and solidarity must be constructed.

Issue #63

January 2009

Politics and struggle in a new era

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