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Rahm’s Win in Chicago: Does It Say Something About Americans?

2015 April 8
Rahm Emanuel

Rahm Emanuel

I’m sure there were a lot of reasons for this…the unions splitting and Rahm having far more money than Garcia must rank high.

But anyone who has paid any attention knows that Rahm is a right-wing asshole. At some point, about America, one must say: “Most Americans tend to prefer right-wing assholes.” When was the last time, nationally, that anyone who wasn’t a right-wing asshole was President?

Let’s cut to the chase: Obama is worse on civil liberties than Bush II was; the no-fly list started under Clinton, who also cut welfare drastically and was the first president to have “free speech zones.” He may have been charismatic, but a lot of his policies were drastically punitive to the poorest and weakest. The last President one can make a case for was Carter–but remember! The great military buildup we often credit to Reagan started under Carter.

Yes, money played a role, but money wasn’t the decisive factor in many of those elections and money only excuses so much–especially when you’re re-electing a President (as by that point you should know what he’s been doing).

Today, one can argue that America is effectively an oligarchy with a democratic gloss, Citizens United having made it official. But it wasn’t always, and a lot of elections were required for it to become one. And the democratic mechanisms for overthrow are still in place, with many regional elections being in play.

Chicago was in play. Rahm won anyway.

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Union Fear, Betrayal, and Decline

2015 April 7
Strikes involving more than 1,000 workers

Strikes involving more than 1,000 workers

The 2008 primaries were a lesson to me. Neither Clinton nor Obama were particularly pro-union, but they received many of the union endorsements. I remember in particular the firefighters, who didn’t endorse any of the big three (Clinton, Obama, Edwards), but endorsed Dodd, whom they knew had no chance of winning. I called them on it and was told by their media guy that it was a case of true belief.

The other candidate they had been considering was Edwards, who actually had a chance of winning the nomination.

The thing about Edwards is that in order to win the nomination he needed the unions; it wasn’t going to happen otherwise.

He didn’t get enough of them and he lost.

Obama won and the unions didn’t get their number one priority: card check union certification.  One can argue it wasn’t doable, but there was never any sign it was a priority for Obama.

Why should it be? He hadn’t needed the unions to win, he had just needed them not to coalesce behind another major candidate.

Edwards, having won, would have owed his victory to the unions and he would have known it.  You dance with the one who brung you, as Canadian Prime Minister Brian Mulrooney once remarked.

Obama spent his first four years largely ignoring unions. One he didn’t ignore was the teachers union. Instead, the Obama administration acted very favorably towards the idea of charter schools (the bulk of the research shows that charter schools perform slightly worse than public schools). So, before the deadline for nominations of democratic primary nominees for the 2012 election, the teachers national decided to support a primary candidate to send a warning shot across Obama’s—no, they didn’t do that. They endorsed him pre-emptively.

Unions are risk-averse. Extremely risk-averse. They have spent the last 35 years in decline (since 1980) and, as a group, they never make any serious attempt to make up lost ground. Internally, too many of them acquiesced to and negotiated for two-tier contracts, which favor older workers over newer ones, and split union solidarity.

They are unwilling to take a run on anyone who might actually help turn their situation around.

I was reminded of this by the way Rahm Emanuel has retained much union support in Chicago. Some unions were heavily behind his challenger, Jesus G. Garcia, but many have backed Rahm. As a result, Rahm is almost certainly going to win (unless the polls are way off). Rahm was terrible, especially for the teachers (who, to give them their due, are fighting him, hard), though he did throw some scraps to a few unions.

Still, again, Garcia would owe the union movement his victory if he won and there’s no reason to believe he wouldn’t act on that debt. Rahm, on the other hand is the status quo—slow (and sometimes not-so-slow) decline.

If you won’t fight when your life is on the line (and card check was and is an existential issue for unions), then you will die. Unions have chosen, again and again, not to fight, or, more accurately, enough of them have chosen to collaborate. The first, second, and last rule of unionization is solidarity. Union members must negotiate and fight together and so must unions. Their failure to do this internally or externally is why their decline continues. It will continue, virtually irreversibly, until they learn two elemental lessons:  1) act with solidarity and; 2) never collaborate with your oppressors.

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World Economy Heading for Recession

2015 April 5

That seems most likely to me. China has been stalling out for some time, Japan’s “stimulus” didn’t work, Europe has been suffering under austerity for years (despite some minor good news), the other emerging economies are doing badly, the petro-states have been hammered by the drop in oil prices and now the US job market has fallen off a cliff after a few months of excellent results.

Those results were driven almost entirely by the drop in oil prices, but were unsustainable with most of the rest of the world economy in the doldrums.  Low oil prices should be generally good for everyone but oilarchies, but their effect is muted (in comparison to past decades) by the oligarchical and oligopolistic nature of our economy.  Put simply, there are too many barriers to entry for new businesses to arise and even lower oil prices don’t put enough money into ordinary people’s hands to create enough new demand for long enough.

In an economy where individual sectors tend to be controlled by a few companies, and where those companies are already awash with money, more money means little; those with pricing power will simply take it away and add it to the stockpiles of money they already aren’t using for anything productive.

The standard solution to the situation we’re in now would either be to implement very high corporate and individual marginal taxation (if private actors won’t spend, take the money from them) and/or to break up oligopolies and/or to heavily regulate them so that they aren’t sopping up all the excess cash in the economy.  (Why are app stores still allowed to take 30%, for instance?)

Since we refuse to do any of those things, and since we only print money to give to rich people and corporations (thus pooling money at the top, doing little for widespread demand), the western economy (which includes Japan) remains stagnant. You may get a few good months here and there, but that’s all you’re going to get.

Labor Force Participation Rate Graph

Labor Force Participation Rate Graph

Let’s discuss some individual countries and regions. First, take a look at the above labor force participation rate graph. It shows the number of people either looking for work or who have work.  Can you tell that there were a few good months?  That’s how good the American economy is after your few good months. It didn’t really improve much, it just went horizontal.

You need a few years of such job results to make a difference.  And that’s before we get to the fact that most of those jobs were low-paying and that all of the gains of the last economic cycle have gone to the top three to five percent of the population (depending on how you slice it).  And the top 1% has done better than 3%, the top .1% better than the top 1% and so on. This is your economy on unconventional monetary policy.

Japanese monetary base and inflation to early 2015

Japanese monetary base and inflation to early 2015

Ah, unconventional monetary policy. In Japan they call it “Abenomics.”  The idea was to get inflation going in the Japanese economy–get the Japanese to spend and bring Japan out of its 30 year slump. The chart to the right shows how well it has worked.

But don’t think that money has been “wasted!” Abenomics may have done nothing for ordinary people, but it’s helped a lot of rich people become richer. That money went somewhere. In Japan’s case, a ton of it will have gone overseas, with foreigners borrowing for low costs in Japan and then speculating with that money elsewhere for higher gains (or so they hope).

Unconventional monetary policy is, and always has been, about giving money to the rich, wealthy, and corporations. At first, it was about bailing them out after the financial collapse. Now, it’s just about giving them money, lots of money, in a way that the hoi-polloi can’t access.

This brings us to Europe and austerity. Austerity is a wonderful thing, if you’re rich. Public assets are put on the selling-block which you normally could never buy and they are put there for cheap. You get to own more of the economy, your relative wealth increases. While it’s true that one might be richer in a generally prosperous economy, you must remember, this isn’t about absolute wealth. It’s about relative wealth. Better to be somewhat poorer and able to lord it over everyone else, than be richer in a world where the peons don’t have to kowtow to your every whim or don’t have to live miserable, want-filled lives. If the price is a lot more poverty, that doesn’t affect you in any meaningful way.

Not all peons suffer, of course.  A lot of Germans do very well in the current regime.  As the South of Europe suffers under austerity, they’re doing great. The worse the southern economies are, the better for Germany, since it reduces the price of the Euro, increasing German exports. If everyone in the Euro area was doing well, Germans wouldn’t be doing nearly so well. If the price is suicides, widespread poverty, homelessness, and so on, that’s certainly a price Germans are willing for Italians, Spanish, Greeks and Portuguese to pay.

Meanwhile in Canada, there is a housing bubble which kept on going from the point where the US bubble collapsed. Better, inflated prices are guaranteed by the Federal government, so when the bubble bursts, it can cause maximum damage to public finances. With oil prices falling, and with Canada now a petro-state (as I noted almost a decade ago) due to deliberate government policy, those housing prices are looking less and less sustainable.

In the UK, we also have London’s housing bubble (which is to say, the majority of the actual economy of the UK, if you want to call a housing bubble and financial services an economy, which UK politicians do).  This shouldn’t be a surprise, since the UK hired Canada’s ex-central banker to come to the UK and do what he did to Canada: Blow a nice big bubble. The UK hardly has any other economy besides real estate and financial ponzi schemes, so we’ll see how that works out for them.

In general, understand this: The world bailed out bankers and brokers and traders  and they went back to doing what they were doing before. Blowing bubbles. There are CDOs out the wazoo, there are stock market bubbles, there are real-estate bubbles in various places (they just tend to be more localized now, but they’re still huge).

The economy will NEVER be good for everyone until this is changed, but that doesn’t precisely mean this is unsustainable. The elite’s had one fundamental realization and it was this:

“We can print as much money as we want and as long as we make sure it doesn’t get into ordinary people’s hands it won’t blow up the economy.”

Many people expected that unconventional monetary policy would cause general inflation. It hasn’t because the money stayed in the hands of a very few people and major corporations. It did cause massive inflation in the things rich people buy, but not general inflation.

So the rich, and the politicians and central bankers they own, aren’t worried about the various bubbles because they handled them in 2007 and 2008, and they’re sure they can handle them the same way if they burst again. These bubbles may never all burst at the same time again, because if they show signs of doing so, the elites can always just have the central banks print money and buy up assets before they even become distressed.

As long as there is no actual price discovery (and how can there be), there is no real threat to the only part of the economy that matters: The economy of the people with enough money buying up politicians.

Everyone is addicted to this game, even China, which has printed unbelievable amounts of money (more than Japan, America and Europe combined) and has used it to create vast amounts of unused and unusable housing and other boondoggles. China, granted, wants much of the benefits to get to ordinary people (because the Chinese are still willing to riot extremely violently and the Communist party’s leadership knows their lives are on the line), but they’re still playing the late-capitalist game of credit pumping, rather than the mercantilist game which built the Chinese economy. That makes sense, in a way. As China’s customer-economies stagnate, it becomes harder and harder to create widespread growth for the most populous country in the world through simple exports.

The correct strategy would be to start decoupling and move to a domestic market, and in a sense, the Chinese have tried that, but they’ve bungled it on boondoggles. Capitalism of the variety we do today is terrible at redistribution and redistribution is what the Chinese economy needs, in a huge way, in order to boost widespread demand.

So that, my friends, is your world economy on austerity and unconventional monetary policy.  As I predicted right after Obama put out his worthless “stimulus” program in early 2009, for most people, the economy will not recover for at least a generation. It will only recover then if the population is willing and able to rebel, peacefully or violently. If not, we are in for decades of stagnation and decline, exacerbated by the absolute certainty of catastrophic climate change.

And so it goes…

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2015 April 1

One point which can’t be made enough about unconventional oil production is that it uses a TON of water.  Fracking, tar sands, shale all require water to work and a lot of it.

So even if it’s true that we have more than enough hydrocarbons to fry ourselves (as long as we’re willing to pay a premium for it), it’s a trade-off with water.  More oil = more water use.  Hydrocarbons are also key in agriculture, both for machinery and for fertilizer.


This problem has been thrown into sharp relief recently because of the California drought. On top of Nestle bottling water in California, agribusiness growing water intensive crops, fracking is draining resevoirs and aquifers as well.

This problem is going to continue. In coastal regions and continental regions which aren’t blocked by mountains, it’s at least theoretically possible we could move to desalinization plants on a massive scale, build canals, and move the water inland. But desalinization is still an extremely inefficient technology and canals running essentially uphill also require huge expenditures of energy.

Water, oil, agriculture, and suburban expansion (eating into naturally productive farmland which doesn’t require huge supplies of water from elsewhere) are all related issues.  We’re looking at genuine water shortages in large parts of the world as well as dust-bowls: Expect to see them in India, China, the US, and elsewhere.

There are solutions to these problems, but we should have been moving towards those solutions decades ago and we weren’t.  As a result, a lot of people are going to suffer and die who needn’t.

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Making the Rich and Powerful Work for Everyone

2015 March 31
by Ian Welsh

The philosopher John Rawls suggested that the only ethical society is one which we design before we know what position we will hold in it. If you don’t know whether you’ll be born the child of janitor or a billionaire, black or white, you may view social justice differently than when you know that your parents both went to Harvard or Oxford.

Rawls’s point is just in the sense that though none of us choose our parents, very few of us are able to see the world except through our own eyes. What I am going to suggest is something different: A society works best if it treats people the same, no matter what position they hold. This is hardly a new position. The idea that everyone should be treated equally is ancient and many a war has been fought over it. But despite a fair bit of progress, we don’t really understand what equality means, how it works, and why it works.

Let’s have an example. Based on international testing, at the time of this writing, the Finnish education system is arguably the best in the world. Its students do better than those of any other nation.

What is interesting about the Finnish school system, though, is this: When they decided to change how it worked, they did not set out to try and make it the best in the world. Instead their goal was to make it so that everyone was treated the same. Their goal was not excellence, their goal was equality. Somehow, along the way, and very much to their surprise, it also became arguably the best school system in the world.

There are a number of reasons for this, the main one being a well-established fact: People who are treated as lesser don’t perform as well and are less healthy–even after you take into account other factors.

But another reason is that if you are rich or powerful, you can’t buy your child a better education. Testing results between schools are not made public and the very few private schools are not allowed to use selective admissions. In a system where your child will be treated the same as every other child, you must make sure that every child receives an excellent education, otherwise your child may not receive one.

Let’s engage in another thought experiment. In the United States, airport security is extremely intrusive. Recently, new procedures for physical examinations were put in place which include touching the genitals (I’ve personally experienced it and it definitely included genital contact, albeit with my clothing on.) Most security experts consider this to be security theatre, along with such things as taking your shoes off and the new 3D scanners. They believe that the two most important improvements in airline security were locked cockpit doors and passengers knowing that if they remain passive and allow hijacking, they could all wind up dead.

Coincidentally, the 2000s have seen an explosion in the use of private jets. The most powerful, rich, and important people no longer fly on the same airplanes as the hoi polloi and, as a result, they do not go through the same security screenings.

Do you think that if the most important people in America had to endure the same security as ordinary Americans that it would be as intrusive as it is? How many billionaires would have to be groped before something was done?

While we’re on the subject of private jets, consider the following: A private jet still has to use a runway. If a private jet is using the same public airport you are, it takes up a take-off or landing slot. Next time you’re waiting for a take-off slot, or wondering why your flight is delayed, think on that. Less than ten people on a private jet are holding up over a hundred people on a passenger jet.

No part of society will continue to work properly if the powerful and rich have no interest in its doing so. There are three parts to this:

  1. If there is a public system, there cannot also be a private system which can be used to opt out of the public system.
  2. If there are limited resources, whether those are airplane flight slots at airports or medical care, then no one can be allowed to use either wealth or power to jump the queue, nor must they be allowed to use more resources than those without power or money.
  3. Any part of the economy where there is a monopoly or an oligopoly must either be publicly run or must be heavily regulated for quality, level of profits, and reinvestment.


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Always Remember, the NY Times Pushed, Hard, for War in Iraq

2015 March 26
by Ian Welsh

The New York Times is beloved by many liberals, but I despise them. Part of my reason is their role in making the Iraq war happen. I was following it in real time and I remember how they pushed administration lies; the headlines of their articles on Iraq were almost always alarmist  and the lead paragraphs were as well. Often enough, the truth would be buried in the equivalent of paragraph twelve.

For those not in the business, here’s the rule: Most people only read the headlines and you lose half of those actually reading past the headline incrementally per paragraph. Maybe the Times numbers are slightly better than that (probably because their headlines are truly atrocious and uninformative), but the rule is broadly true and few people are able to write long-form without losing their readers.

The Times is essentially reactionary. A look at their columnists and who they have chosen to be new columnists makes the point: Ross Douthat, the reactionary Catholic?  David Brooks, master of the inane right wing observation?

I was reminded of this in the last few days by two articles listed at the very top of their daily newsletters:

Saudi Justice, Harsh but Able to Spare the Sword

…Such rulings have prompted comparisons to the Islamic State, which regularly beheads its foes and also claims to apply Shariah law.

But Mr. Yehiya was saved because of checks in the Saudi system on the use of harsh punishments.


Rebukes From White House Risk Buoying Netanyahu

… Israeli analysts are now suggesting that Mr. Obama and his aides might be overplaying their hand, inviting a backlash of sympathy for Mr. Netanyahu, and that they may not have clearly defined what they expected to gain diplomatically by continuing to pressure the Israeli leader.

Certain countries are apologized for because they are US allies.  Remember the orgy of praise for the “cautious reformer” King Abdullah of Saudi Arabia when he died? 

Reading this sort of hagiography of evil men and nations is like taking a swig of sour milk: It induces a gag reflex.

A lot of people think the Times is in some way left wing because they have a lot of excellent long form arts and culture coverage, but they are also the newspaper which knew the US, under Bush II, was spying on its own citizens in a widespread way and buried the story because it might influence the election.

Journalists without any preference for right or left wing, might think that information about what the government is actually doing should influence the election.  They might even think it was their job to reveal such information.  Not the editors at the Times, however.

I suppose I’m slightly unfair to single out the Times; almost all American media is right wing and supine before power. But the NYT is the most important newspaper in the world–a newspaper with reach, power, and influence. A paper with clout enough to make other choices.

Instead it chooses to kneel before power, to be a courtier to power. In so doing, the Times implies to other journalists that their policies reflect actual journalism.

Enjoy the Times long form cultural pieces, by all means.  But remember that they are past masters of propaganda, willing to spew out half-truths that conceal fundamental truths, such as the fact that ISIS is the spawn of Saudi Arabia and operates under a very similar a justice system. They’re also willing to spew outright lies like the idea that King Abdullah is some sort of reformer.

The Times makes the world a more dangerous place by lying. It’s just that simple. Every time journalists lie to millions about the actual state of the world, they degrade those people’s ability to make good decisions about the world, especially good political decisions about voting.  Democracy, which puts power in ordinary people’s hands, requires an informed populace, which requires a media that does not knowingly distort facts or conceal unfortunate truths.

The American media, lead by the New York Times, has failed in that task, grossly, for decades.  The blood of millions stains their hands and when the blame is apportioned for America’s decline, they shall have plenty for which to answer.

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Fundraiser Finished: Five Articles a Week, Average, Reached

2015 March 23
by Ian Welsh

We raised $5,246.64 in one time donations and $539 in recurring donations (recurring includes people who already had a subscription).  That puts us solidly in the five articles a week, average, bracket. I’ll start up that schedule as of April 1st.  If I get seriously ill and can’t do it for a week or some such, I’ll extend the duration.

THANK YOU very much, everyone who donated.  This will make a large difference.

I do keep track of donations after the fundraiser and it does affect how much I write, so if you didn’t give and still want to, rest assured it isn’t wasted.

Again, my thanks.



Circles of Belonging

2015 March 23
by Ian Welsh

Fractals and CirclesI’ve recently been reading about some Hollywood folks who are very concerned with how women are treated.  One of them, the director Lexi Alexander, tweeted the following:

A crew guy just said that he follows me on Twitter & wanted to thank me because he has 2 daughters. Will it always take daughters to care?

This is the fundamental problem suggested by my article on ethics vs. morals, and discussed by more philosopher and social scientists than one could possibly list. What does it take to care about people we don’t and will never know?

I care about how women are treated because they’re humans.  Why wouldn’t I care?

But why stop there? The murder of dolphins and whales, who are sentient, offends me greatly as well. Why prioritize human intelligence?

Where does the circle of belonging, of inclusion, stop?  Where do we say “That person’s problems are not my problem?”

It’s perfectly natural to care about our families, our loved ones, and especially our children, more than we care for others.  We are responsible to them to an extent we aren’t responsible to someone who lives half the world away—responsible for feeding them, housing them, clothing them, and indeed providing love to them, a need that virtually all sentient creatures have. (Remove whales or dolphins from their mothers and they are profoundly effected; while elephants clearly mourn their dead.)

At the same time, to overly prioritize those we know is to become monsters.  To say “my child is worth a hundred other children’s lives” is to have crossed over the abyss and descended into hell. The hells created by those in the “I’ve got mine, screw you, Mack” crowd are legion.

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The history of human civilization can be read as expanded circles of belonging—from bands (not families, bands) to tribes, to kingdoms and empires and on to nations.  The national impulse, responsible for so much evil, also saw the rise of benefits like pensions and unemployment insurance and universal healthcare.  Those who belonged to my nation deserved such things.  They were “one of us.”

For the longest time much of this was done through religion: The Zeus cult allowed those who belonged to it to not be strangers. People who belonged to the cult, even if of different polis or tribe, could trade together, because they were members of the same cult. If they did not treat each other properly, they believed Zeus would punish them.

Powerful, self-identifying groups of this nature, from followers of Confucius to Christians, from secular humanists to enlightenment thinkers, have brought people together and forged bonds of trust, duty, and belonging that crossed barriers of tribal, local, or even other religious circles.  The humanist claims a duty to all of humanity, believing that everyone has certain rights, including to food, shelter and fair law (justice).

There are those who go further, giving rights to non-human sentients and even animals that are traditionally our food animals.

One can make a full ethical case for all of this, but one can also make a pragmatic argument. Healthy, happy people are better to live around. Economic cripples don’t contribute to civic or economic life nearly as much as they could; the poverty of others, whether material, spiritual, or ethical impoverishes me, because I lack whatever they could have given to the world, were they able.

The same is true of the larger web of life. As animals and plants die, what they contributed to the ecosphere is lost and that loss diminishes the world in ways that will effect me, whether through loss of seafood, loss of oxygen, loss of key nutrients, or loss of potential scientific discoveries, now impossible. Every dead species is lost genetic code, code which may have held secrets to make us much richer: medicines, chemicals, genetic modifications, and so on.  We are killing the web of life which supports us and killing the wealth that nature has created for us.

The pragmatic argument is important, but pragmatics alone are never enough: Without an ethical argument, many people will violate the norms as soon as it is convenient to them; while without the pragmatic argument others will violate the norm because it makes no sense to them. (Why not kill if it’s in my interest?  Sure as heck the people who lead us have no qualms about doing so.)

To manage an ecosphere, and to manage a world full of sentients, requires valuing them intrinsically, as well as functionally—both for what they do for us and for themselves, irrespective of their utilitarian value. Until we create an ethics which does this, not only will we be far less happy and prosperous than we could be, but we will lurch from ecological disaster to ecological disaster.

The creation of an ethics of inclusion, a broad circle including all life and much that is not alive, is one of the key tasks before us.

Serfdom Is Better Than What the West is Heading For

2015 March 20
by Ian Welsh
Time to be an Entrepeneur, by anoncru

Time to be an Entrepreneur, by anoncru

One of the things that we forget about Feudalism is that serfs had rights: economic rights.  They had the right to farm common land, they had the right to take wood from common forests, they had the right to live where they had lived before.

This is not to say that they were free, they certainly were not.  But they were not slaves; they had access to, as it were, capital: what they needed to grow their own food, shelter themselves and clothe themselves.

We have an overly grim view of the Middle Ages, but, in various periods and various places, serfs, let alone freeholders, lived quite well.  Much of what we associate as the worst of the Middle Ages actually happened either in the Dark Ages or in the Renaissance.  For example, torture really takes off in the Renaissance, because as Stirling Newberry has pointed out, torture chambers and so on take a lot of iron and they didn’t have it to waste in the Middle Ages.

Late serfdom (after the Renaissance) was pleasant enough for serfs that they had to be forced off their land: The factories were worse.  In factories, they lived shorter, sicker lives and worked far more.  Capitalism is based on dependency—on wage laborers needing to work for someone else, or their lives are miserable or short.  (Marx’s “whip of hunger”.)  It is voluntary only in the sense that you can offer your labor to anyone willing to pay, not in the sense that you can opt out of the system and have anything approaching a decent life.

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Today, if you lose your job and you’re an ordinary person, you can’t support yourself. If the government, friends or family don’t give you what you need, you have to beg for it.  If you don’t get it, you die.  Homesteading laws and laws which allowed people to take unused or underused property and use it to support themselves have been drastically weakened.

Absent a job, or charity, you will probably wind up dead.  If you don’t, you will be miserable.

Our forebears in the 19th century understood this. It’s why they called jobs “wage slavery.”  You do what you’re told by your boss, where you’re told to do it, when you’re told to do it, how you’re told to do it, and if you don’t, feel free to try and find another job.

Whether you can find another job is often unrelated to your personal attributes and has little to do with anything approaching virtue (those who doubt this are invited to investigate how Wall Street and Fleet Street make their money).  How well most people are paid is a market decision in the sense that it has to do with the balance between labor supply and demand, and labor power and the power of capital: For all intents and purposes labor only has pricing power if it is organized and politically powerful or if the labor market is tight.

Those who came out of the Great Depression understood this because they had seen many people, through no fault of their own, reduced to poverty, unable to find any work.  Because of this they tightened labor laws, tried to make unions more powerful and taxed the heck out of rich people so they couldn’t use their money to destroy the liberal state.

What they didn’t do was overthrow capitalism; they didn’t see a better, more practical way to organize society.  As a result, many men stayed in positions of vast private power and wealth (even if they personally were heavily taxed) and were eventually able to use that money to overthrow the liberal state in England and the US, and from there they have been able to undermine it virtually everywhere, including in most of the European socialist states.

What is on offer, then, is not neo-feudalism, with neo-serfs, but aristocrats and their slaves–slaves towards whom the aristocrats feel less and less an obligation to even feed (see all the cuts to food stamps).  In some ways it’s superior to even slavery for the master-class: Surplus labor beyond what is needed to keep wages down is now completely disposable and doesn’t have to be paid for, after all.

So understand this: What is being offered you, increasingly, is a chance to scramble for pennies from your masters and when considered superfluous to their needs, to suffer and quite probably die before your time.

Serfdom?  You should be so lucky.

The Philosohy of Populist Change

2015 March 18
Plato and Aristotle

Plato and Aristotle

Will the next generation of leaders be any better than the ones we have today?

Well, we can guarantee that they won’t be better if we don’t make sure the ideas for better solutions are around.

Milton Friedman and the neo-liberal operatives were very much correct: When a crisis hits, you can only prevail if you already have in place your ideas for the solution. Much to our horror, we have seen that this neo-liberal “shock doctrine” does, in fact, work.

Which is why Ian’s attempts to reformulate a moral, humanistic philosophy for political economy is so important.

(This piece is not by Ian, it is by Tony Wikrent.  I (Ian) don’t agree with everything here, but it’s an important post, and thus has been elevated from the comments.)

My approach has been different: Point to the founders of the American republic and emphasize those aspects of their philosophy for political economy we no longer follow, and, indeed, barely even tolerate today. For example, it was generally accepted through most of the first century of USA’s national existence that gross inequality of wealth and income was a danger to the experiment in self-government.

One reason I favor my approach is that, in the end, who you have to convince, above all, are the military and the police; a revolution only succeeds when the people in charge of suppressing dissent begin to refuse to do so. And I simply do not believe that you are going to convince American police and military that Marx or Mao or whoever is the answer. On the other hand, they just might be convinced that the original ideas of the American experiment in self-government have been trampled on and subverted by TPTB – including (most especially) the “vast right wing conspiracy” which has been funded and built up by the wealthy since their opposition to FDR and the New Deal.

A second reason I favor my approach is that the historical record is very clear that socialism, Marxism, communism, and so on DO NOT WORK. It pains and troubles me greatly to see, in reaction to Obama’s failure to deal with Wall Street since the crash of 2007-2008, a resurgence on the left of these failed ideologies. My guru here is Lawrence Goodwyn, the author of what is far and away the best history of the populist movement. What makes it the best? Goodwyn fully understood the Greenbacker critique of the U.S. financial and monetary systems that powered the extraordinary political success of the populists in the 1880s through 1910s. In December 1989, Goodwyn gave a speech at a special event in St. Louis on the occasion of the 100th anniversary of the populist People’s Party “Sub-Treasury Plan” for financial reform, Democratic Money: A Populist Perspective.  After dissecting how TPTB have left no room for serious discussion of a truly democratic system of money, credit and exchange, Goodwyn observed:

There is another society in our time — what we call “the East,” what we sometimes call “actually existing socialism.” For about 40 years, since Stalin imposed this system on whole populations, an idea floated around in people’s heads over there, in “the East.” The idea was, “We will try to create some space where we can talk to each other and affect the world we live in. To do that, we’re going to have to combat the leading role of the Party. We’re going to have to find some way to get around the fact that all the social space in society is occupied by the Party.”

This idea would float around kitchen tables on the Baltic coast in the 1950s and 1960s. And workers in shipyards would say to each other, “We have got to create a trade union independent of the Party.” Now that is an unsanctioned idea. And they knew it was frightening even to say it out loud; you’d only say it around the kitchen table, around carefully selected brethren and sistren. And the idea would go away, because it was unsanctioned. But then there would be another horrible accident in the shipyard, another insane adjustment of work routines, and the idea would come back, simply because it was the only idea that made any sense. “Work organized by the Party is insane, Poland is insane, our social life is insane. We’ve got to have a union free of the Party.”

Over 35 years of self-activity the world has not known about — any more than the world knew very much about how the Farmers’ Alliance organized Populism — they found out how to do it. And in 1980 they did it. There’s a certain logic in history every now and then. The single most experienced organizer in the shipyard in Gdansk, Poland, who spent 12 years organizing and brooding about a union free of the Party, who had gone to jail scores of times in the decade — learning each time a little bit more about how power worked in his society — the one single most credentialed worker with other workers based on his own activity, is Lech Walesa. There is every now and then a certain justification in history.

Because that movement existed, even though it was repressed by the government after 15 months, it sent a wave of hope across Eastern Europe. What Solidarnosc combatted, by its simple existence, was mass resignation. This resignation was the dominant political reality in Hungary, Czechoslovakia, East Germany and Poland until the shipyard workers of Gdansk became the nucleus of a mass movement, one of those rare moments in human history when people get back in touch with their own subjectivity. That is to say, they don’t lie in public. They say what they mean. And they try hard to say it clearly. They’re not trying to make a speech, they’re not trying to be an orator. They’re trying to be clear, like two people in a marriage struggling not to be political with each other but to be honest. One of those rare democratic moments when reality is projected.

Because Solidarity stayed alive during the years of martial law, and because a man named Brezhnev who put down Solidarity passed off the stage of history and another man named Gorbachev who would not put down Solidarity came on the stage of history, the leading role of the Party this very week is going into the dustbin of history all over Eastern Europe.

You especially need to read the speech if you are wondering what the Greenbacker critique is, the truly “American” response to concentrated economic and financial power. But the important thing for me is that after Goodwyn gave us an incredible educational tool in his history of USA populism, he then turned his attention to the Communist bloc of Central and Eastern Europe and, in Breaking the Barrier: The Rise of Solidarity in Poland, showed us that the same problems arose in both settings, and the same populist solutions prevailed.

Well, to be accurate, let’s modify that to “almost prevailed.” In the USA, the populist insurgency actually elected dozens of populists to Congress, including a handful of Senators, hundreds of state legislatures, and a few governors as well. Out of that, we got the first regulations on railroads, on food production, on pharmaceuticals, the only state bank in USA (North Dakota), state and federal crop insurance, among other things. Even the Federal Reserve system was made possible by the populist insurgency, though it was not really their design. They wanted something very different, but it was the populist insurgency which generated the general clamor for reform of the financial and monetary systems after the panics of 1901 and 1907.

Instead of what they wanted, the populists got the monstrous Federal Reserve – even further removed from democratic control under the rubric of preserving the independence of the central bankers – because the populists’ core Greenbacker critique had been fatally devastated by their 1896 compromise with William Jennings Bryan over his position on silver coinage. This destroyed the populist movement during the 1896 campaign. The story of that destruction, by the way, is one of the most important case studies for those interested in the subject and Goodwyn’s is really the only solid history of which I know.

The last great surge of populist success involved the Non-Partisan League in North Dakota in the years just before World War I. At that time, the ideologically weakened populist movement was pretty much eradicated by the anti-German hysteria deliberately whipped up during the war. Chris Hedges provides the history in the opening chapters of his book, Death of the Liberal Class.

It is highly pertinent to ask here: Why weren’t the socialists and communists wiped out along with the populists during the war? There are, I believe, three reasons. First is not really a reason; the fact is, the socialists and the communists were also attacked. Especially targeted, I believe, were the networks that had been established by the European revolutionaries who had fled to America after the failed revolutions of 1848.

A digression here. These networks of 48ers were integral to the electoral successes of Lincoln and the Republican Party. They also were integral to the success of the Union on the fields of battle. There is a new book out, The Cause of All Nations: An International History of the Civil War, by Don H. Doyle, which details how crucial was the role of the European revolutionaries who remained in Europe, in saving the Union during the Civil War. The story starts with Queen Victoria, who detested the American experiment in self-government and, after some hesitation and misgivings, then British Prime Minister Lord Palmerston finally decided, in September 1862, to dispatch a British army and fleet to Canada. This would create the northern half of a pincers to choke the American republic; the southern half of the pincers were the French and Spanish forces which had already landed in Mexico and the Caribbean, with British assistance, in December 1861 through January 1862.

At this crucial point–just when the British oligarchs thought they could finally get away with crushing the obnoxious experiment in self-government–the Union Army won at Antietam. When news of the victory arrived in Europe, massive pro-Union demonstrations erupted. These demonstrations were led by supporters of Giuseppe Garibaldi’s fight for Italian unification and independence, the most militant manifestation of the general, European progressive, anti-monarchical sentiment at the time. On October 5, 1862, hundreds of thousands of demonstrators, many garbed like Garibaldi’s red shirts, filled Hyde Park, London, and elsewhere in England. Palmerston quietly abandoned his preparations to militarily assist the Confederacy.

But let’s return to the crushing of American socialism and communism, and what I believe was the second reason it was not as thorough as the annihilation of the populists. It was not until after the Bolsheviks seized Russia that socialists and communists in America could be painted by opponents as “the Bolshevist menace.” The crackdown of socialists and communists thus became particularly severe near the end of World War One and after. Lasting, of course, through the 1920s and 1930s, right up to today.

But for me, the most important is the third reason. The socialists and communists who survived in the USA, I believe, were allowed to survive, because they were funded and controlled by what used to be called The Eastern Liberal Establishment. This is a point about which many on the left get hysterical. But the facts are detailed in Caroll Quigley’s Tragedy and Hope: A History of the World in Our Time. And if you don’t want to take the time to wade through that massive tome, just look into Corliss Lamont, the major funder of American socialism in the 1960s, note who his father was, and don’t shy from doing the math of putting two and two together.

What about the European revolutions which overthrew the socialist states in the 1980s? The great promise and hope there was crushed by the adoption of Western neo-liberal capitalism. Which, not surprisingly, since it is funded and promoted by a bunch of rich pricks, ended up, when applied to Russia, Hungary, Romania, etc., creating a new oligarchy of rich pricks. And this should be an abject lesson for the left of the point I am making: When a crisis hits, you can only prevail if you already have your ideas for the solution in place. The crisis in the 1980s hit in Central and Eastern Europe and the only ideas ready for use were those of Milton Friedman and the other amoral pigs of the Chicago School. There should be no wonder or shock at the results.

OK, so socialism and communism may not be any better than capitalism in preventing the rise of a repressive, authoritarian political regime. But what about the “tool kit” of Marxist class analysis? Isn’t that valid, even useful? Well, since you ask, I’ll answer: No. I’ll even explain why.

Marx believed that classes were defined by income and ownership. While he engaged in some sociological speculation about how people change as incomes rise, he was mainly concerned with how the rich exploit the poor. The problem is, the really important class division in society is between producers and predators – the Leisure Class, as Thorstein Veblen termed it – and there are a lot of producers that end up being included and condemned in Marx’s capitalist or owner class.

The implications are pretty damn important. Lenin’s and Stalin’s determination to annihilate the krulaks in Russia was one result. But the krulaks were the backbone of agricultural production, they were the producers. Oppressing and dispossessing the agricultural producers resulted inevitably in a catastrophic collapse of agricultural production. So you get the famines of the 1920s and 1930s, which, it should be noted, only made it easier for Western elites to portray the Bolsheviks in the worst possible ways.

Marxist class analysis also is not much help when it comes to climate change, because all of Marx’s classes use energy. Just look at the sources of carbon in rich versus poor countries. What spews more carbon per economic activity: heating a home and cooking meals in a rich, Western country using electricity or even natural gas from the grid? What about cutting down trees and burning them in a poor country?

We need $100 trillion in investments over the next two decades to entirely replace fossil fuels. Of what use is Marxist analysis in getting that done? But Veblen’s producer / predator analysis – that the major struggle in modern economies is the one between industry and business – is immensely valuable. Consider the capitalists who want to build the 1.7 billion home solar power systems we need; Good – even if they are still capitalists. What about capitalists who want to stymie the move to renewables, like the Koch brothers, in order to continue profiting from fossil fuels? Or capitalists who want to identify and buy up emerging companies in renewables and add them to their already immense corporate empires, such as General Electric, and cartelize the industry? Bad.

Now, there are a lot of people on the left who try to avoid the opprobrium of an open embrace of socialism or communism, most often by arguing that the American republic was intended, from its very beginning, to be anti-democratic and tilted in favor of the owners of property. This, of course, is the analysis of Charles Beard in his Economic Interpretation of the Constitution. Since I’m already jabbing at many leftist sacred cows, I might as well jab at this one.

I wonder if these people have actually read Beard. According to Beard’s Interpretation, there were two basic interest groups: “…the merchants, money lenders, security holders, manufacturers, shippers, capitalists, and financiers and their professional associates” comprised one group. The other was “… the non-slave-holding farmers and the debtors.” This grouping commits the very same error Marx does: It does not distinguish adequately, as Veblen does, between producers and predators. It is simply too crippling a mistake to lump money lenders, security holders, and financiers in with manufacturers. I will also note here that Beard’s analysis of Alexander Hamilton is completely at odds with the negative way these people portray Hamilton.

And I’m absolutely certain those people who champion Beard’s analysis have never read Beard’s later work, The Economic Basis of Politics, which Beard himself considered more important because it addressed the great misconceptions that had arisen concerning his Economic Interpretation of the Constitution. To quote from the introduction to a 2002 republication of The Economic Basis of Politics, by Clyde Barrow:

…Beard (1945, 62) concludes that “modern equalitarian democracy, which reckons all heads as equal and alike, cuts sharply athwart the philosophy and practice of the past centuries.” These themes are woven together in Beard’s claim that the central problem of contemporary political theory, as well as the motor of contemporary political development, is the contradiction between the ideals and institutions of political democracy and the reality of economic inequality (i.e., classes)…. The fact that neither capitalism nor communism had solved the problem of class conflict led Beard to the “grand conclusion” that it was Madison’s economic interpretation of history rather than Marx’s, that had withstood the greatest test of modern political history. Madison was correct to the extent that he identifies the problem of regulating class struggle, rather than eliminating it, as the central problem of political statesmanship and constitutional development, regardless of the mode of production or any particular distribution of wealth. There is no end to class struggle and, therefore, no end of history (or politics)….

Screw you, Francis Fukuyama, and your neo-liberal sugar-daddies.

As I argued a few days ago, the only power we have is the power of ideas. If you want the next generation to be better, give them better ideas.