Tag Archives: capitalism

Capitalism, the State and the Drowning of America

Business, Climate, Crime, Economy, government, Politics, Science, Technology, , , ,

As Hurricane Harvey lashed Texas, Naomi Klein wasted no time in diagnosing the “real root causes” behind the disaster, indicting “climate pollution, systemic racism, underfunding of social services, and overfunding of police.” A day after her essay appeared, George Monbiot argued that no one wants to ask the tough questions about the coastal flooding spawned during Hurricane Harvey because to do so would be to challenge capitalism—a system wedded to “perpetual growth on a finite planet”—and call into question the very foundations of “the entire political and economic system.”

Of the two choices, I vote for Monbiot’s interpretation. Nearly forty years ago, the historian Donald Worster in his classic study of one of the worst natural disasters in world history, the Dust Bowl of the 1930s, wrote that capitalism, which he understood as an economic culture founded on maximizing imperatives and a determination to treat nature as a form of capital, “has been the decisive factor in this nation’s use of nature.”

Care must be taken not to imagine capitalism as a timeless phenomenon. Capitalism has a history and that history is important if we are to properly diagnose what happened recently in Texas and is about to happen as Hurricane Irma bears down on Florida. What we need to understand is how capitalism has managed to reproduce itself since the Great Depression, but in a way that has put enormous numbers of people and tremendous amounts of property in harm’s way along the stretch from Texas to New England.

The production of risk began during the era of what is sometimes called regulated capitalism between the 1930s and the early 1970s. This form of capitalism with a “human face” involved state intervention to ensure a modicum of economic freedom but it also led the federal government to undertake sweeping efforts to control nature. The motives may well have seemed pure. But the efforts to control the natural world, though they worked in the near term, are beginning to seem inadequate to the new world we currently inhabit. The U.S. Army Corps of Engineers built reservoirs to control floods in Houston just as it built other water-control structures during the same period in New Orleans and South Florida. These sweeping water-control exploits laid the groundwork for massive real estate development in the post–World War II era.

All along the coast from Texas to New York and beyond developers plowed under wetlands to make way for more building and more impervious ground cover. But the development at the expense of marsh and water could never have happened on the scale it did without the help of the American state. Ruinous flooding of Houston in 1929 and 1935 compelled the Corps of Engineers to build the Addicks and Barker Dams. The dams combined with a massive network of channels—extending today to over 2,000 miles—to carry water off the land, and allowed Houston, which has famously eschewed zoning, to boom during the postwar era.

The same story unfolded in South Florida. A 1947 hurricane caused the worst coastal flooding in a generation and precipitated federal intervention in the form of the Central and Southern Florida Project. Again, the Corps of Engineers set to work transforming the land. Eventually a system of canals that if laid end to end would extend all the way from New York City to Las Vegas crisscrossed the southern part of the peninsula. Life for the more than five million people who live in between Orlando and Florida Bay would be unimaginable without this unparalleled exercise in the control of nature.

It is not simply that developers bulldozed wetlands with reckless abandon in the postwar period. The American state paved the way for that development by underwriting private accumulation.

Concrete was the capitalist state’s favored medium. But as the floods
mounted in the 1960s, it turned to non-structural approaches meant to keep the sea at bay. The most famous program along these lines was the National Flood Insurance Program (NFIP) established in 1968, a liberal reform that grew out of the Great Society. The idea was that the federal government would oversee a subsidized insurance program for homeowners and in return state and local municipalities would impose regulations to keep people and property out of harm’s way.

At the same time that the U.S. government launched the NFIP, a Keynesian crisis that would extend over the course of the next decade and a half began to unfold. Declining corporate profits were brought on by rising wages, mounting class conflict, escalating competition from Japan and western Europe, and increased consumer and environmental regulation. The profit squeeze combined with stagflation and widespread fiscal problems to produce major economic dislocation.

A new form of capitalism began to slowly emerge as business responded to the crisis. Major institutional change occurred in the global economy, in the relationship between capital and labor, and most important for our concerns here, in the state’s role in economic life. In the early 1970s the Business Roundtable was established as a corporate lobbying group. Among its tasks was to undermine various forms of consumer and environmental regulation.

This was the context for the assault on the liberal flood insurance program. By the 1990s, under the Clinton Administration, the pretense of regulating land use on the local level was all but dismissed in favor of a policy that simply encouraged localities to do the right thing to ensure the safety of people and property. It is not an accident that one of the worst-hit developments in Houston—southern Kingwood—was built in the last years of the twentieth century and the aughts right in the Federal Emergency Management Agency’s designated 100-year floodplain.

Nor is there anything the least bit natural in how cities in the postwar United States have functioned as profitable sites for capital accumulation. Developers have been able to derive profits from capitalist urbanization in coastal locations because of what was effectively a giant subsidy by the American state.

Flirtation with disaster is in a sense the essence of neoliberal capitalism, a hyperactive form of this exploitative economic order that seems to know no limits. Some might find comfort in the words of Alexander Cockburn: “A capitalism that thrives best on the abnormal, on disasters, is by definition in decline.”

Others, myself included, worry that the current organization of this market economy to benefit the interests of capitalists, with its blind, utopian faith in the price mechanism, is likely to head in precisely the direction that the economic historian Karl Polanyi predicted in 1944. An institutional arrangement organized around a “self-adjusting market,” he warned, “could not exist for any length of time without annihilating the human and natural substance of society; it would have physically destroyed man and transformed his surroundings into a wilderness.”

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Capitalism and Its Discontents: What Are We Living For?

Business, Economy, Education, Politics, , ,

Whoever is not prepared to talk about capitalism should also remain silent about fascism.

— Max Horkheimer, from the essay “The Jews and Europe”, December 1939

Aren’t we all tired of capitalism? Haven’t most of us gotten sick of the drudgery, the monotony, the exploitation, sucking up to our bosses and management who pretend to care about the average worker? The drive to consume more and more has degraded all art, values, and sense of community in the US.

Capitalists literally are holding the people of the Earth in bondage. As liberal democracy crumbles in the West, the risk of neo-fascism continues to rise in North America and Europe.

It’s worth examining why the US has TV shows like “Hoarders”, where truly sick people have problems collecting useless crap, and where viewers publicly shame and judge the afflicted. Yet, where is the outrage at the real hoarders, the billionaires, the banks, and the military industrial complex? This is serious hypocrisy, a cultural blind spot: a double standard that is not being addressed by our society.

Capitalists are Addicts

Why does society not ask arch-capitalists the obvious questions: when is enough, enough? Who needs a billion dollars? Once you can provide a comfortable life for your family, children, and grandchildren, what is the point of hoarding your money in bank accounts and lording over a monopolizing mega-corporation? Where does this endless desire for more come from?

It’s fairly obvious that a failure to confront death is closely linked to the bottomless appetite exhibited by capitalists. The perceived need to construct towers, monuments, mansions, and manufactured narratives of their own greatness is proof. Not to mention how many of the super-rich have chosen to become cryogenically frozen post-mortem: this is in outright denial of their own mortality, and the necessity of death so that future generations may live.

In failing to confront death, any object can be used as a crutch, an addiction. Addiction is linked to social isolation and lack of community, which the capitalist class creates by artificially creating specialized divisions of labor, alienation, and class differences.

Addiction leads to a disconnection from what some would call a “reality principle”, leading to further and deeper indulgences and lack of restraint. There are further similarities between capitalists and drug addicts: the impatience, the disconnection from others, the neediness, as well as a general childlike need to be validated and pampered.

Methodology and Treatment in an Age of Insanity

We see where capitalism leads: to a permanent crisis, a never-ending state of emergency. Since the 1970s, workers have increased productivity mightily with little to zero increases in wages considering inflation and other factors. Americans are also working longer hours; young adults are even having less sex partly because of this. There is a huge problem with prescription drug abuse (not just opioids), teen suicide is rising (sadly, at a 40 year high for teen girls in 2017), and child poverty isn’t being addressed properly, if at all, by our own government.

All of these absolutely tragic issues are connected to capitalism. When we are forced to compete against each other, in grades at school, for that raise or promotion in the workplace, this breeds a mindset of dehumanization.

I would also posit that the separation of young children from their parents when they begin schooling, either day care or pre-school or kindergarten or afterwards, is one of the first steps in life where the feelings of individual atomization starts, and collective social disintegration begins. Being ripped from your parent’s arms because they have to work just to survive, and the state/private/charter school substituting for the role of a parent, is one of the first deep tragedies inflicted on many of us by the “needs” of the modern world. I believe this suffering is lodged deep in our unconscious selves, and this is not being addressed publicly at all, and barely acknowledged in our private lives.

Treatment starts when we want to become free of the Great Beast of capitalism, the “Babylon system” as some like to call it. We must ground ourselves, and return to a deeper relationship with our mother Earth. Self-reliance is true freedom, and families and communities should begin to grow as much of their own food as possible. I understand the limitations for those in urban areas, or those stuck in jobs where time and effort cannot be adequately put towards farming, of course. Collectively, as a city block, a suburban neighborhood, a rural township, we are all going to have to learn to get together, share food and technology, and become independent of this beast. We must begin to develop a gift economy, an indigenous-based economy, based on reciprocity and trust, not exploitation and coercion, as Charles Eisenstein explains.

Other than that, a mass protest movement must be created so the resources that our federal government receives in taxes can be shifted from weapons of destruction to schools, health care, community projects, and renewable energy.

Analyzing a Popular Alternative

I believe it’s important to discuss some of the budding alternatives to capitalism that are developing around the globe. In the US, support for socialism has risen immensely, especially among the younger crowd, thanks to the work of Bernie Sanders (notwithstanding him not really being a socialist) and others. Yet how serious are most American socialists?

One of the most popular groups in the US is called Socialist Alternative (SA), led by the charismatic Seattle councilwoman Kshama Sawant. SA has some great ideas, and yet, some of their proposals make it seem as if they’re just going through the motions. Let me explain.

On their about page, a few things stand out. They write: “We see the global capitalist system as the root cause of the economic crisis, poverty, discrimination, war, and environmental destruction.” Very well put. Yet then, this is followed by the line below:

“As capitalism moves deeper into crisis, a new generation of workers and youth must join together to take the top 500 corporations into public ownership under democratic control to end the ruling elites’ global competition for profits and power.”

This sounds nice, but I wonder how much time was really spent thinking through the implications of this policy. What if democratic control only leads to redistribution of the companies’ wealth, and not fundamental transformation of the products, resource usage, and dangerous working conditions?  Where is the sense of urgency, the fact that deadlines are being approached regarding global warming, regarding the ecological damage being done by these companies?

One wonders, has SA bothered to take a look at the list of the 500 top companies? For some, perhaps they can be repurposed to make sustainable products. For others, maybe the factories and warehouses can be dismantled and recycled for public use. For a few, it might be feasible that they could be broken up into smaller entities and non-profit co-operatives.

Yet, we must realize that these companies have only been able to thrive due to government tax breaks, insider trading, off-shoring hidden wealth, and other financial chicanery. Further, these mega corporations rely on specialized division of labor, fueling worker alienation.

Also, the biggest companies choose not to compete against each other in entire sectors, allowing for large profit margins. What happens when “public ownership” leads to stricter competition and price wars, forcing many employees to be laid off? How will these companies be able to compete against Europe and China? Is SA committed to local and bio-regional approaches to agricultural and socially responsible industrial practices?

For many of these companies, though, the only democratic thing I can think of to do is to vote on who gets to throw the first brick or Molotov through the empty building. These corporations have done irreparable harm to the planet. Some of them are simply not going to be able to be reformed.

The only way to transform these entities (the ones that can be saved) properly, with the proper protections, would be to rewrite the constitution to include environmental and social rights, as well as the rights of mother Earth, as Bolivia has done. Without a legal framework based on ecology, there is no way to make sure “democratic control” of a transnational corporation would actually lead to environmentally-safe production.

SA is notable for fighting for a $15 an hour wage. First, I want to say that I support this policy. It is a laudable goal, and may work soon in some of the nations wealthy, tech-savvy, coastal metro enclaves.

Yet we need to ask what would happen if this were enacted nationally, and what we should do to prepare if it ever does. The elites would pull their money out of the system, if only to spite the Left and the socialists who enacted the policy, and give them a taste of pain for disobeying capitalism. The neoliberal economy is designed around low-wage service work, and is so tightly interwoven, not to mention extremely monopolized, that a sudden wage rise would lead to high levels of inflation, and possibly to a severe economic recession or depression. Are groups like SA ready to organize outside the political structure, to make space for a civic society, domestically and abroad, which will need massive influxes of resources, food, and housing when shit hits the fan?

SA also wants to “slash the military budget”, which is great. SA does not clarify where that new money should go. SA also proclaims that they support internationalism. Allow me to make a proposal: money from the military budget should be given away freely to developing countries, with transnational groups, either under UN auspices or some new framework, helping distribute and allocate resources so they are not wasted by corrupt dictators and governments. Poorer nations will need massive influxes of revenue to help them develop and avoid using fossil fuels and habitat-destroying industry, in the realm of trillions of dollars over decades. The West has accumulated ill-gotten wealth from centuries of colonialism, chattel slavery, and genocidal policies towards the “Global South”, and now may be the last chance to give back, before it becomes too late.

Are US socialists committed to these sorts of radical proposals? Are SA and others ready to admit to its followers that real socialism will involve hard sacrifices, and almost certainly (in the short term, at least) lead to less material goods and privileges that Westerners have enjoyed for centuries? Are socialists as ready to support a living wage in China as they are in the USA? Finally, are American socialists committed to transforming the nation, or just promoting an ideology that is centered too much on human needs, and not enough on the needs of non-humans and future human generations?

Ecocentrism, not Anthropocentrism

The Left has been fragmented for decades. Liberals, socialists, communists, greens, and anarchists have all endlessly debated future models for society. One wonders how many are just talking, and how many are willing to listen? There already are models for society to live sustainably and to prosper, very, very old ways: by following the paths set by the indigenous.

For instance: by living in the moment, and observing things as they really are, it becomes quite clear that humanity is facing huge challenges unlike at any other time in history. Just one hundred companies have pumped out 70% of worldwide greenhouse gases since 1988. Is the answer, as SA has posited, really just to democratize these corporations and hope for the best, or to shut them down completely?

Westerners are going to have to realize very quickly that despite our space technology, skyscrapers, and instant media, we are the children in the room when it comes to ecological knowledge, and the indigenous around the world are the adults. Native American tribes and various indigenous peoples worldwide have catalogued thousands if not tens of thousands of local plants in their local ecosystems, often with hundreds of different uses for each individual plant. Indigenous accept their own mortality and have constructed elaborate rituals, ceremonies, and initiations to help each other confront death. Also, and this is critical, indigenous tribes understand their carrying capacity in their local habitat, so are able to regulate and rationally plan for their population levels. Overpopulation now threatens the world with ecosystem degradation, habitat destruction, global warming, resource wars, ocean acidification, plastics proliferation, pandemics, and mass starvation and drought.

The indigenous are plant people, and we can follow just a few basic ideas to help us escape capitalism: conserve what remains of the South American, African, and Southeast Asian rainforests, as many future cures from disease and chronic conditions will be found there. In the Americas, the milpa, a planting of corn, beans, squash, and various nutrient rich veggies allows for huge crop productivity in a small area. We can use hemp and legalize cannabis to make biofuels, produce paper, make innovate building materials like Hempcrete, and provide the masses with a safe, relaxing herb for recreational, medicinal, and spiritual use. Advanced technology in most scenarios will only make things worse. What is the best thing one can do to stop global warming? Not a solar array, but planting a tree. Slow down soil erosion? Plant a tree. What is resistance? Planting a community garden is a more socialist, a more significant thing to do now than attending another symposium on Marxism.

The indigenous are freer and happier than Westerners not by some innate abilities, but because they have chosen to work for their freedom: by co-producing food, tools, clothes, pottery, by hunting, fishing, and foraging together. Westerners have refused to resist thus far, because deep down, many know they are dependent on the system for survival, and don’t want to pull that plug, to bite the hand that feeds. It’s the only way, though. We are going to have to walk away from all this, and activists, protestors, and concerned citizens are going to have to metaphorically step into our own Lacandon jungle, and organize around ecology, democracy, and social justice.

Yet, we must realize that it is too late in the game to rely simply on voting. Citizens will respond to a mass movement to the degree that it represents the will of the people: to the degree it can articulate a political truth on a deeply visceral level. Most mainstream socialists (important exceptions being Ian Angus, Paul Burkett, and John Bellamy Foster) have so far been too committed to a flailing, abstract ideology; specifically, wrongly committed to a Eurocentric, technocratic, anthropocentric worldview; to capture people’s imaginations. Developing an ecological worldview, one that acknowledges our interdependence and interconnectedness with all species, is crucial.

Thus, as the 21st century progresses, Standing Rock will eventually be seen as having more influence than Occupy Wall Street. We are connected to our planet and the web of life more than we can ever know or attempt to explain. For instance, we won’t end warfare until we abolish factory farming: the two are intimately linked, as exploitation of man over animal allows fascists the ideological justification for exploitation and the killing of man by man. Ecology is the keystone science: it allows us to see the linkages between species, food webs, and provides the science needed to develop scale-appropriate, sustainable technology. Ecologists understand that an injury to one is an injury to all, and under capitalism, we’ve all been wounded, plant, animal, and human alike, even the rich, who’ve suffered spiritual decay and moral disintegration.

The only democracy possible is an ecological democracy, with a long-term planning, and rational, sustainably-oriented national constitutions, a 90-95% reduction in fossil fuel use within a few decades at most, and an international consensus which will guarantee safeguards against habitat destruction, even in the face of democratic majority opposition. If we don’t face up to these facts, and collectively and courageously organize, we may, in fact, be due for the Kali Yuga, as the Hindus prophesied.

Thus, perhaps we can update and re-phrase Horkheimer’s famous quote for the 21st century:

“Whoever is not prepared to talk about capitalism should also remain silent about the 6th mass extinction.”

By William Hawes/DissidentVoice

Posted by The NON-Conformist

“Inclusive Capitalism,” Nancy Pelosi, and the Dying Planet

Business, Economy, Education, government, Politics, ,

A recent Washington Post and ABC poll finds that just 37 percent of Americans think that the Democratic Party “stands for something.”  Fifty two percent say it’s about nothing more than opposing Trump.

The 37 percent is right. The Democratic Party stands for something, alright.  It stands for the socio-pathological system of class rule and environmental ruin called capitalism – and for capitalism’s evil Siamese twin imperialism.

So does the far more openly right-wing Republican Party, of course, but that’s fairly common knowledge.  It’s more complicated with the Democrats, who like to pose as being “on the left” while carrying water for Big Business.

It’s nothing new. Long before the rise of dismal, dollar-drenched neoliberal era Dems and Robert Rubin associates like Bill Clinton and Barack Hamilton Project Obama, the Democrats stood in the lead of the profits regime. This goes all the way back to that savage Indian-killer Andrew Jackson and up through that quintessential corporate liberal Woodrow Wilson, New Deal hero Franklin Roosevelt (who boasted about having saved the profits system during the Great Depression), the handsome proto-neoliberal Jack Kennedy, the blood-drenched Lyndon Johnson, and even poor old Jimmy Carter – the Christian peanut farmer whose cabinet was stocked with corporate hatchet men (If you want some basic historical background on all that, read Lance Selfa, The Democrats: A Critical History [Haymarket, 2012], and Howard Zinn, A People’s History of the United States)

Part of what has put the Democrats in the vanguard of U.S. capitalism (I’ll save the imperialism angle for a future commentary) is that they’ve always been better than the Republicans at coming up with smart-sounding and progressive-seeming justifications for the system.  For one example among many, read the stealth corporatist Obama’s sneakily conservative 2006 campaign book The Audacity of Hope, which combines repeated noble and erudite statements of concern for the poor, working people and the common good with creepy and preposterous praise for the U.S. “free market” business order as “our greatest asset.”

Another example came when House Minority Leader and champion corporate fundraiser Nancy Pelosi (D-CA) was challenged by a Bernie Sanders fan and New York University student during a CNN “town hall” last January. The student, Trevor Hill, caused CNN host Jack Tapper to say “oh, oh” by asking Pelosi when the Democratic Party was going to shift to the portside on political economy.  Trevor Hill mentioned a Harvard University poll showing that “51% of people between the ages of 18 and 29 no longer support capitalism…The younger generation,” Trevor told Pelosi, “is moving left on economic issues…I wonder if there’s anywhere you feel the Democrats could move farther left to a more populist message…[and] if you think we could make a more stark contrast to right-wing economics.”

The well-heeled San Francisco Democrat Nancy Pelosi is an unlikely candidate for populism.  Having leveraged her long Congressional career to build up a net worth of $196 million, she is a poster child for the disease of corporate plutocracy.

Still, Ms. Pelosi did her best to keep her brilliant fake smile plastered on her expertly botoxed face during young Trevor’s ideologically impertinent question. She stood up from her seat to “school” the student on “our” “free market” system while acknowledging the need for better and smarter behavior on the part of its masters:

“I thank you for your question, but I’ve have to say that we’re capitalist and that’s just the way it is. However, we do think that capitalism is not necessarily meeting the needs with the income inequality that we have in our country, and let me just tell you this… About forty years ago, a little bit more now, no less a person in terms of capitalism than the chairman of the Standard Oil of New Jersey said – he talked about stakeholder capitalism, capitalism that said when we make decisions as managements and CEOs of the country, we take into consideration our shareholders, our management, our workers, our customers, and the community at large. At that time, the disparity between the CEO and the worker was about 40 times, 40 times more for the CEO than the worker. As productivity rose, the pay of the worker rose and the pay of the CEO rose. Everything rose together. Around 20 years ago, it started to turn into — maybe 15, 20 years ago, it started to turn into shareholder capitalism, where we’re strictly talking about the quarterly report. So a CEO would make much more money by keeping pay low, even though productivity is rising, the worker is not getting any more pay, and the CEO is getting a big pay because he’s kept costs lows by depriving workers of their share of the productivity that they created…the disparity between the CEO and the worker in the shareholder capitalism is [now] more like 350 to 400 to 1. That income inequality is an immorality. And it is not even smart from an economic standpoint, because it doesn’t grow the economy. The more money you put in the pocket of the worker for the productivity he or she has produced, the more money they will spend, consume with confidence, inject into the economy and grow the economy… A job and being able to have a home and send your children to school and have a dignified retirement…what we want for all Americans…capitalism should serve that purpose. The capitalist system has been well-served by the so-called safety net. It’s not just a safety net for individual workers. It’s a safety net for capitalism, because they can go through their cycles, and when they don’t need as many employees, they — we have unemployment insurance or all kinds of benefits as a safety net that enable them to go through cycles…So we have to change the thinking of people. I don’t think we have to change from capitalism. We’re a capitalist system. The free market is a place that can do good things.”

Here Ms. Pelosi was talking the “inclusive capitalism” language (a nice bit of doublethink) of her good friends in the arch-neoliberal Clinton campaign and at the global corporatist Clinton Foundation.  As the Clintons explain on the Website of their recently formed Coalition for Inclusive Capitalism:

”Inclusive Capitalism is a global effort to engage leaders across business, government and civil society in the movement to make capitalism more equitable, sustainable, and inclusive. Together we can achieve this through business and investment practices that extend the opportunities and benefits of our economic system to everyone. We believe that firms should account for themselves not just the bottom line. By taking a broader view of the firm – its purpose, products, people and planet – it is more likely to prosper over the long term.”

A lot of the leftish commentary you can find online about the Trevor Hill-Nancy Pelosi dialogue stops with Pelosi’s blunt opening statement: “we’re capitalist and that’s just the way it is.”  The point of such commentary was that all she did was dismiss Trevor. But that’s not quite right.  She went from opening dismissal to an elaborate and slick defense of capitalism as a system that can be turned back to the advantage of workers and other “stakeholders” if CEOs wise up – and as a system that actually wants and needs a strong social “safety-net” along with strong purchasing power in the hands of workers.

Pelosi’s response was borderline impressive. It was also pretty much complete bullshit.

Beyond being a butchered clause, “Not necessarily meeting the needs with the income inequality we have in our country” was a drastic understatement considering the remarkable poverty and savage class disparity stalking life in capitalist America today. Half the U.S. population is poor or near-poor. More than a fifth of the nation’s children (including well more than a third of its Black and Native American children) are living at less than the nation’s Dickensian poverty level.  42 million Americans — including 13 million children — live in “food insecure” households with limited or uncertain access to enough food to support a healthy life.  All this and more terrible to contemplate exists in a nation where the top 1% has pocketed 85% of all income growth since the 2008-09 recession.

At the same time, that truest and deepest inequality under capitalism concerns wealth, not income.  Currently in glorious “free market” America, the top tenth of the upper 1 Percent (Pelosi’s class) has as much net worth as the bottom 90 percent. Globally, the world’s richest five people have as much wealth between them as the poorest half of humanity.

Pelosi’s history lesson was loaded with mistakes. It was sixty-eight years ago, not forty or so, when Frank Abrams, chairman of Standard Oil of New Jersey, proclaimed that “The job of management is to maintain an equitable and working balance among the claims of the various directly interested groups … stockholders, employees, customers, and the public at large.” That was the kind of thing that smart corporate-liberal capitalists said at the height of the long New Deal era, when the world capitalist system was the United States’ oyster in the wake of “Europe’s suicide” (Thomas Piketty’s phrase for the 20th century’s two Europe-centered world wars), when the Soviet empire posed something of a state-socialist alternative to U.S.-led capitalism, and when U.S. corporations could make some substantive claim to be simultaneously  meeting the material needs of their workers, consumers, and investors. It’s true that inequality declined and wages and consumption rose alongside profits during the “Great Compression” that came with the U.S.-led “Golden Age” of western capitalism from the end of World War II through the 1960s.

But anyone who thinks that the nation’s leading corporations and financial institutions placed workers and the public on an equal footing with investors and the bottom line in this (or any other) time is dreaming. It was first and foremost the rise of a momentarily powerful and significantly Left-sparked industrial workers’ movement – rooted largely in the special workplace bargaining power of mass-production workers, not some mythical corporate benevolence – that created a new and rising floor for working-class incomes during these years.(Pelosi naturally said nothing about the role of unions and working class struggle in aligning wages more closely with rising productivity back in the good old days of purportedly “inclusive” and “stakeholder” capitalism.”)

At the same time, the gains enjoyed by ordinary working Americans were made possible to no small extent by the uniquely favored and powerful position of the United States economy (and empire) in the post-WWII world. When that position was significantly challenged by resurgent Western European and Japanese economic competition in the 1970s and 1980s, the comparatively egalitarian trends of postwar America were reversed by capitalist elites who had never lost their critical command of the nation’s core economic and political institutions. Working class Americans have paid the price ever since. For the last four decades, wealth, income, and power have been sharply concentrated upward, birthing a New Gilded Age of abject oligarchy and brazen plutocracy. (It’s an era in which, among other things, Ms. Pelosi can use her $193,000-per year House position to accumulate an asset portfolio just shy of $200 million.) Along the way U.S.-led global capitalism has pushed livable ecology to the grave’s edge.

Pelosi needs to adjust her time-frame. This “Great U-Turn” (Barry Bluestone and Bennett Harrison) – this reversal of the “Great Compression” and its purported “stakeholder” commitments – dates from the finance- and policy-designed onset of the neoliberal era in the mid-1970s, not from “maybe 15 or 20 years ago.”  It goes back to the Carter years.  And – a very important point – it marked a return to capitalism’s historical norm, as Thomas Piketty’s showed in is widely read tour de force Capital in the Twenty First Century (2014).  People born or raised in the post-WWII golden age (like this writer and like Nancy Pelosi) are prone to forget that “Les Trentes Glorieuses” (the “thirty glorious years” from 1945 to 1975) and not the neoliberal period that followed were the truly anomalous era in the history of U.S. and Western capitalism.

The neoliberal era and its current New Gilded Age capstone is the profits system returning to its long and militantly inegalitarian norm.  Along with this ugly restoration has come the re-elevation of vicious, anti-social bourgeois culture, which drowns all noble, altruistic, and solidaristic sentiments in “the icy waters of egotistical calculation” and “resolve[s] personal worth into exchange value” (Karl Marx, 1848).

Does capitalism really need and want a strong social safety net, as Pelosi suggested? It does for those who wrongly “assume, as Keynesians do,” writes the British Marxist economist Michael Roberts, “that the foremost weakness of capitalism lies on the demand side of the economy.”  As Roberts demonstrates in his important book The Long Depression: Marxism and the Global Crisis of Capitalism (Haymarket, 2016), the real internal growth weakness of capitalism today (as in the past) – the secret to its current long phase of slow growth and weakened productivity – resides in the fact that the profitability of capital is too low (and that the debt built up before the Great Recession is still too high.)  Rapid economic growth cannot not return until another slump restores a sufficiently elevated rate of profit.  The profits system wants more austerity and misery and a continued restriction of government investment, social benefits and wages.  As Roberts notes:

“The post-slump austerity policies of most governments are not insane, as most Keynesians think.  These policies follow from the need to drive down costs, particularly wage costs, but also taxation and interest costs, and the need to weaken the labor movement so that profits can be raised. It is perfectly rational policy from the point of view of capital, which is why Keynesian policies were never introduced to any degree in the 1930s.  Capitalism came out of that Great Depression only when profitability rose and that was when the United States went into a war economy mode, controlling wages and spending and driving up profits for arms manufacturers and others in the war effort. Capitalism needed war, not Keynesian policies” (emphasis added).

But why should we want the system to take off and restore rapid growth – to “grow the economy” in Pelosi’s words?  The super global-expansionist post-WWII “golden age” brought us to the brink of environmental crisis – to what Barry Commoner rightly described in 1971 as “The Closing Circle.” The long neoliberal expansion of 1983-2007 (with surplus value and commodity production rooted largely in China) has taken us to the point where Earth scientists speak all too realistically (if all too reticently) about the specter of human extinction in this or the following century. It’s not for nothing that Stephen Hawking says human survival depends on colonizing other planets and Tesla founder Elon Musk is developing fantastic plans to do precisely that.  The last thing we need on “our only world” (Wendell Berry) is more economic expansion.

Accumulation- and hence growth-addicted capitalism (500 years old) and not humanity per se (200,000 years old) is the driving force behind this grim environmental predicament, which is why the brilliant Marxist environmental historian Jason Moore tells us that we are living (ever more dangerously) in the Age of the “Capitalocene,” not the “Anthropocene.”   And the very same profits system that has hatched the unfolding ecocide is a great barrier to averting full environmental catastrophe.  There are no solutions as long as we remain captive to the horrific system that Nancy Pelosi wants us to see as “just the way it is.”  As Roberts rightly notes in terms that (frankly) seem to underestimate how dire the ecological crisis of our time is:

“The evidence of climate change and its man-made nature is increasingly overwhelming.  The potentially disastrous effects from higher temperature, rising sea levels, and extreme weather formations will be hugely damaging especially to the poorest and most vulnerable people on the planet.  But industrialization and human activity need not produce these effects if human beings organized their activities in a planned way with due regard for the protection of natural resources and the wider impact on the environment and public health.  That seems impossible under capitalism (p. 265)…What is really needed is proper planning of available resources globally, plus a drive, through public investment, to develop new technologies that could work (like carbon capture, transport not based on fossil fuels, goods produce locally with low carbon footprints, etc.) and, of course, a shift out of fossil fuels into renewables. Also, it is not just a problem of carbon and other gas emissions, but of cleaning up the environment, which is already damaged.  All these tasks require public control and ownership of the energy and transport industries and public investment in the environment for the public good (pp.267-68)….The evidence is overwhelming that unless the capitalist system is replaced in the next fifty years, the planet will be suffering from such damage to the natural environment that economic growth will slow, natural disasters will become more common, and the cost of restoration and prevention will become too much for a profit-making mode of production to prevail” (p. 269). [emphasis added]

It’s worse than Roberts seems to know. Fifty years is too broad a timetable; it’s more like three decades – a generation – at most and even that is generous. It’s the whole world, including Chicago and not just sub-Saharan Africa and the Middle East, that will collapse under the weight of capitalogenic climate change.

Forget just the profit system and economic growth. The damage inflicted by capitalism, not humanity as such (the point bears repeating), will be too great for homo sapiens itself to survive without a radical and indeed revolutionary shift in public priorities and social organization.  But Roberts is quite right to suspect that the changes required to rescue a decent future are “impossible under capitalism.” The profits system is long past its use-by date and now poses a profound existential threat to human survival.  When do the Clintons unveil a new Coalition for Sustainable Ecocide?

It’s ecologically sustainable “socialism or barbarism if we’re lucky” at this stage of developing capitalist geocide. “The uncomfortable truth,” Istvan Meszaros rightly argued 16 years ago, “is that if there is no future for a radical mass movement in our time, there can be no future for humanity itself.” We make the leap beyond Obama’s, the Clintons’, and Pelosi’s system or its game over for humanity along with the countless other species homo sapiens is wiping out under the soulless command of capital.

By Paul Street/Counter Punch

Posted by The NON-Conformist

U.S. Capitalism Isn’t a ‘Free Market’

Business, Economy, Politics, , , , , , ,

In 1970 country singer Lynn Anderson had a hit recording of a Joe South song that opened with the line: “I beg your pardon. I never promised you a rose garden.” I often think of that song in connection with the libertarian philosophy.

Image: Wikipedia

 

You may be asking: for heaven’s sake, why? Because it’s what I want to say to people who seem annoyed that freedom would neither cure all existing social ills immediately nor prevent new ones from arising. It’s a strange demand to make on a political philosophy—that it instantly fix everything that the opposing philosophy has broken. Moreover, I’m concerned that some libertarians, in their justifiable enthusiasm for “the market,” inadvertently lead non-libertarians to think that this unrealistic expectation is part of their philosophy. Of course, that is not good because non-libertarians won’t believe that the market would make all things right overnight, and so they’ll write off all libertarians as dogmatists.

More from Reason

Posted by The NON-Conformist

 

7 Huge Misconceptions About Communism (and Capitalism)

History, Politics, Society, World, , , , , , , ,
Karl Marx 001.jpg
Image: wikipedia

As the commentary around the recent deaths of Nelson Mandela, Amiri Baraka and Pete Seeger made abundantly clear, most of what Americans think they know about capitalism and communism is arrant nonsense. This is not surprising, given our country’s  history of Red Scares designed to impress that anti-capitalism is tantamount to treason. In 2014, though, we are too far removed from the Cold War-era threat of thermonuclear annihilation to continue without taking stock of the hype we’ve been made, despite  Harry Allen’s famous injunction, to believe. So, here are seven bogus claims people make about communism and capitalism.

1. Only communist economies rely on state violence.

Obviously, no private equity baron worth his weight in leveraged buyouts will ever part willingly with his fortune, and any attempt to achieve economic justice (like taxation) will encounter stiff opposition from the ownership class. But state violence (like taxation) is inherent in every set of property rights a government can conceivably adopt – including those that allowed the aforementioned hypothetical baron to amass said fortune.

In capitalism, competing ownership claims are settled by the state’s willingness to use violence to exclude all but one claimant. If I lay claim to one of David Koch’s mansions, libertarian that he is, he’s going to rely on big government and its guns to set me right. He owns that mansion because the state says he does and threatens to imprison anyone who disagrees. Where there isn’t a state, whoever has the most violent power determines who gets the stuff, be that a warlord, a knight, the mafia or a gang of cowboys in the Wild West. Either by vigilantes or the state, property rights rely on violence.

This is true both of personal possessions and private property, but it is important not to confuse the two. Property implies not a good, but a title – deeds, contracts, stocks, bonds, mortgages, &c. When Marxists talk of collectivizing ownership claims on land or “the means of production,” we are in the realm of property;  when Fox Business Channel hosts move to confiscate my tie, we are in the realm of personal possessions. Communism necessarily distributes property universally, but, at least as far as this communist is concerned, can still allow you to keep your smartphone. Deal?

More from Alternet

Posted by The NON-Conformist

‘Not to share wealth with poor is to steal’: Pope slams capitalism as ‘new tyranny’

Politics, Religion, Society, , , , , , , , , , , , ,

Pope Francis has taken aim at capitalism as “a new tyranny” and is urging world leaders to step up their efforts against poverty and inequality, saying “thou shall not kill” the economy. Francis calls on rich people to share their wealth.

Image: Reuters/Giampiero Sposito

The existing financial system that fuels the unequal distribution of wealth and violence must be changed, the Pope warned.

“How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points?” Pope Francis asked an audience at the Vatican.

The global economic crisis, which has gripped much of Europe and America, has the Pope asking how countries can function, or realize their full economic potential, if they are weighed down by the debts of capitalism.

“A new tyranny is thus born, invisible and often virtual, which unilaterally and relentlessly imposes its own laws and rules,” the 84-page document, known as an apostolic exhortation, said.

“To all this we can add widespread corruption and self-serving tax evasion, which has taken on worldwide dimensions. The thirst for power and possessions knows no limits”, the pope’s document says.

He goes on to explain that in this system, which tends to devour everything which stands in the way of increased profits, whatever is fragile, like the environment, is defenseless before the interests of a deified market, which has become the only rule we live by.

More from Russia Today

Posted by The NON-Conformist

California Proposes Crony Capitalism to Fix Housing Crisis

Economy, Politics, ,

The real-estate market is reviving so quickly that talk of the busted housing bubble is passé. These days, when real estate investors talk about bubbles, they are referring to the new one that might now be inflating as home sellers sift through a frenzy of offers.

Even cities that bore the brunt of the foreclosure crisis are seeing massive price jumps and many homeowners who were “under water” in their mortgages can start talking “home equity” again.

Yet some government officials seem to live in a time warp as they pursue a murky deal to “solve” the dissipating housing crisis by marrying government power with private enrichment. The California city of Richmond is the first one to sign on to an idea that lenders fear could sweep the state.

City officials would use eminent domain — i.e., the power to take property by force, upon the payment of “fair compensation” to the owner — to wrest control of hundreds of mortgages held by private-equity firms. They’re not taking the actual property, mind you, but grabbing the notes held by those who financed the homes.

Advocates see it as a way to halt foreclosures, but foreclosures are working their way out of the system — so much so that first-time home buyers struggle to compete with cash-paying investment groups that are grabbing these properties.

“It’s the most abusive thing I’ve seen in a long time,” said U.S. Rep. John Campbell, an Orange County Republican who is sponsoring federal legislation to quash such efforts. The concept, he told me, is driven by a San Francisco firm called Mortgage Resolution Partners, which stands to profit financially from this process it has pitched to cities.

Let’s say you owe $300,000 on your home and it is currently valued at $200,000. The city takes the mortgage from your lender and pays it the estimated value, minus about 20 percent. Your lender gets $160,000. The new investors refinance the property based on the non-discounted value of $200,000 — and you, the homeowner, get to stay in the house and make payments on the new, lower principle. These new players, consultants and the city profit from the proceeds, which comes from the difference between the price they pay and the higher price at which they refinance the loan.

Campbell is livid that the deal is financed on the backs of taxpayers given that the loans will be sold back to Fannie Mae, Freddie Mac and FHA. He and many others also are opposed to what they rightly view as a misuse of power.

“One group of investors, MRP, has figured out a way to use the legal powers of municipalities to extract profits from the people who hold Mortgage Backed Securities,” Chris Killian, an executive with the Securities Industry and Financial Markets Association, told me. The plan will add risk and costs to investors, he said, which will reduce the pool of buyers willing to take a chance in the city.

Lt. Gov. Gavin Newsom, a vocal supporter of the MRP plan, called for a federal investigation of lenders who have opposed it. He argues that they may be colluding to discriminate against these cities. But his statements only remind critics of how much this plan is dependent on political wrangling rather than market forces. MRP is run by a prominent Democratic Party fund-raiser.

“Newsom has no concept of how investments work,” Rep. Campbell said, noting that people don’t lend money if they know it’s going to be seized.

It strikes me as the ultimate “crony capitalist” project where a private organization uses government power to secure a lucrative deal that would never pass muster in the marketplace, where buyers cannot compel owners to sell at a low-ball price.

Cities will face lawsuits challenging these takings. Even if the courts allow it, it will take time to sort through the complexities given the complex ownership structures of many real-estate investments. This process could take years, even as the real-estate market rebounds each month.

Nevertheless, Richmond sent a letter July 31 warning mortgage trustees that the city might proceed with eminent domain if they don’t sell the mortgages. MRP did not respond to a request for comment, but its officials talk about the devastation of a foreclosure crisis as if it’s still 2006, right after the bust.

Online real-estate sites show that Richmond’s property values have increased more than 20 percent in the last year and are expected to increase another 10 percent this year. Here’s a case where doing nothing sounds like a far better approach.

By Steven Greenhut/reason

Posted by The NON-Conformist