Author: Ian Welsh Page 93 of 437

RICO, as you may know, is a law passed in 1970, meant to be used against the Mafia. It allows the government to seize money before a guilty verdict if there is a “pattern” of racketeering (defined very widely).

Of course, once you seize someone’s money, they generally can’t hire a defense lawyer, so they tend to have to plead. I respect public defenders greatly, but if you’re in real trouble using one is a crapshoot at best and even the best ones can’t put in the time and work a private defense lawyer can.

Back in 2008 I suggested using RICO against the banksters: there was a pattern of fraud. I did this because I hated the banksters and I hate RICO, and the best way to get rid of bad law is to use it against important people. (Same reason I wanted the banksters thrown into nasty prisons.)

Anyway, RICO is just one way to do what is becoming more and more common: seizing or freezing the money of those the government of the day dislikes, so they can’t oppose the government. Although I disagreed with the Canadian Truck protesters, freezing their without first convicting them of a crime was a tyrannical act. This strategy has been used against unions and protesters, and is why, as far back as 20 years ago, I was arguing that unions needed to find an organizing model which didn’t require a freezable or seizable bank account.

Domestic terrorism laws are also being used for this, and again, many people warned they would be. You think you’re creating a law to go after the Mafia or Nazis, but such laws are always abused. The rule of law is not “what would good people do with this law” but “what would bad people do with this law” because that’s always where it ends up. (And prosecutors in America are almost always bad people, though that’s another article.)

Yesterday we had what is (so far not a RICO case, but it looks like it might wind up being) this used in Atlanta to go after a bail fund:

https://twitter.com/neonflag/status/1663984789722939414

And…

if you're just tuning in to what's going on in Atlanta, three organizers with the Atlanta Solidarity Fund — the city's largest bail fund — were arrested this morning at their homes. ASF provides jail support to ensure those in police custody have their rights protected 1/

— Hannah Riley Fernandez (@hannahcrileyy) May 31, 2023

Bail itself is an abomination: a way of throwing poor people in prison while rich people walk free (unless their money has been frozen.) It’s vastly unjust and clear class warfare of the most common kind: the rich and powerful versus the poor and weak.

This sort of stuff is also why any movement away from paper cash towards all electronic systems must be resisted vigorously. The more you have no way to keep money out of the system, the more the system can be used to crush you. Any all-electronic money system will eventually be abused by those in power, even the “mostly electronic” systems we have are now regularly abused. (Regular readers will notice this is related to the recent article on how dominant systems want people out.)

But the basic principle is simple, no law should be legal if it inflicts punishment before conviction. The only (small) carve-outs must be for people who are a genuine imminent threat and even such cases must be rare.

Of course, to do this, you need fast trials. You can’t have a system where it takes two years or more for a person to get their time in front of a judge and jury. The simple fixes for this is that if the government doesn’t give you a trial in certain amount of time, six months perhaps being a good upper bound, you get off. It should probably be less than six months, 3 months for complicated cases and 1 month for simple cases seems far more reasonable.

But, some may argue, “if we did that most people would go free.”

Well, yeah. Because the US justice system (and the UK one) are criminalizing way too much stuff. If your crime rate is too high for your justice system to keep up with something is wrong with your laws and your society. Probably a lot of somethings.

In the meantime, if you’re going to oppose the government or important corporations, whether from right or left, remember that, increasingly, the first thing they will do is go after your money. If they can’t nail you with a “crime” yet, this may just be credit card companies and/or other payment processors suddenly deciding they don’t want you as a customer as happened to Wikileaks, MintPress and many others, but piss off the wrong people and they’ll find someway of smashing you, using laws that should never have been on the books, or just using administrative sanctions and daring you to do anything about it when you’re suddenly broke and worried about food and having a roof over your head.

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Bruno Macaes On Putin And The World Order

By Ian Welsh

On May 31, 2023

4 Comments

Macaes was a Portuguese minister and is now a member of the European Council of Foreign relations. He’s written a few books and at least two of them, on the Belt and Road and on Eurasia in general are insightful, though Bruno is definitely a Eurocrat who sometimes struggles to see the world without Eurocrat lenses. This is particularly true when it comes to Russia (remembering that these books were written before Ukraine, which he did not predict) but there are some points where Macaes “gets it.”

This is primarily when it comes to Putin’s views of the international order:

Putin doesn’t think along national lines. In thinks in terms of larger blocs, and ultimately, in terms of the world order… You cannot resist the pressures that come from the world order. So either the world order will come to mirror some elements of the contemporary Russian regime or Russia will mirror the liberal, Western political order.

Notice how Russia is called a regime. It’s a small tell, but a tell.

Later, on, the European view (where Macaes is an insider):

The Brussels bureaucracy has a very simple theory of the world. States are captured by special interests, but they may reform if there is pressure from the outside. If they do, they will certainly prosper.

Obviously the Europeans see the “outside” as them, with an assist, perhaps, from the US. They don’t seem to have noticed that Europe has been in economic stagnation for some time, or consider that perhaps they are captured by special interests also. Macaes does later on touch on European subjugation to the US, but never really deals with it squarely.

But bottom line this is “we are the reasonable people with the right laws and regulations and way of doing things and you all should do what we say, and we will pressure you to do so.”

Europe knows best.

Back to Russia (somewhat paraphrased)

1) There are no neutral, universal rules. Neutrality is only a pretnse aimed at deceiving others. The benefits of globalization are unevenly distributed because rules are made by those with power to make them.

2) International politics is an arena of permanent rivalry and conflict.

This is, of course, similar to the first quote. The “rule based” international order is just the set of rules and institutions set up by those who had the most power, and the rules were set up to benefit those who had the power.

I don’t see how any of this could be controversial, though there are limits to it. The US did deliberately offshore its industry, for example, and this started after WWII to build up Europe, Japan and South Korea as strategic allies. When neoliberalism came to power, they then started offshoring it to what more clear-eyed people saw was a potential rival: China, because elites wanted short term profits.

But generally speaking the rules of the world order benefit the US and its satrapies like Japan, the EU nations, Canada, Australia, South Korea and so on. This was intentional and intended and anyone who thinks otherwise is nearly a candidate for an insane asylum their denial of reality is so strong.

It is the Europeans who are living in a fool’s paradise, thinking, forgive the expression, that their shit doesn’t stink and that they are mostly driven by pure motives: that their system works and is a universal model and that they have the right and duty to force it on others.

One could say the same for the Americans, except that more of the smarter ones know they’re hypocrites.

This nonsense was epitomized by Fukuyama’s “The End of History” which anyone with a lick of sense and the most minimal knowledge of history knew was absolute bullshit. But it was the bullshit that Western elites wanted to hear: they had won, their victory was eternal and everyone else would inevitably, in a pseudo-Marxist historical inevitability way, become like them.

So you could give the Chinese your industry and get filthy rich doing so and it wouldn’t matter because they were going to become a liberal capitalist democracy. There would only be one elite, a transnational one, and its enemy was its own population, not other members of the elite, no matter where they lived.

Now to be fair to Macaes he’s clearly anti-Fukuyama and by the time he wrote these books he could clearly see that obviously Capitalism and Democracy were not the same thing.

But this isn’t really about Macaes, it’s about differing views of the world order.

The West thinks, or among the more self-aware elites pretends to think that they have created a neutral world order they just happened to win, or, in more sophisticated terms, in which they had a first mover advantage, but which is basically fair.

Putin, and though it’s not dealt with here, China, plus most of the developing world see this as absolute bullshit: the world order is just the rules made by the strongest and enforced by them with their financial, economic and military might.

This is why Russia has often said that any real negotiations must be with the US. Not the Ukraine, not even with the EU, but with the US, because they are the ones who make the rules and they are the ones who decide on NATO policy. It is why the real negotiations have included the Chinese, because the Chinese are the coming superpower. It’s why China was able to make peace between Iran and Saudi Arabia: again, because China is genuinely powerful.

Putin, at least in relation to international politics, lives in the real world, not in some Fukuyama fairy-land. Seen from that point of view his actions become more understandable: to let the West continue to push NATO towards Russia and to succeed in its color revolutions and coups, is to acquiesce to a world in which Russia must be second rate at best, because none of Russia’s preferences for how the world order is set up are not implemented. Russia doesn’t need almost everything, nor does Putin believe Russia can get everything: if you want that you have to be as powerful as the US after the fall of the USSR or like the British empire at its peak.

But if Russia can’t get even the things that are most important to it, like Ukraine neutral and not in NATO, then the negotiations have to be changed: they have to become kinetic, to use the modern speak. A test of power is necessary: is the West powerful enough to impose its will or not?

And that is what is being determined in the Ukraine: can the US still just force Russia to accept what the US wants or not? Does the US still run the world order? It’s one reason why the Chinese, ultimately, are supporting Russia, because they agree about the shape of the world order. And it’s why the US and the EU have spent so much supporting Ukraine. Because this is a test and neither side feels it can afford to lose, for if it does, its preferences for world order take a huge hit: it shows that it doesn’t actually have enough power to enforce its will to the extent it desires.

For the US that is that Russia be a “gas station with nukes” at most and preferably be broken up, “de-colonized.” For Russia it is that a military alliance aimed at it can’t push further against its borders, and that its allies or satrapies can’t just be taken away (as Libya and Ukraine were) without great cost.

In the real world you get what you have the power to get. It shouldn’t be that way, but that’s how it is, at least for the time being. Perhaps we’ll change that at some point in our history, but it is the way the US and Europe have lived, it is how they rose to power and it is how they have retained their power. To say “no more war now that we’ve won the major wars and made the world in our image” is laughable.

Putin is just playing their game, because it’s the only game.

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Rising Ideologies Need People Inside; Stagnant Hegemonies Want People Out

By Ian Welsh

On May 29, 2023

15 Comments

When a new system is on the rise, it needs more people to join. Maybe it doesn’t need everyone, there may be an “out” group which is either the enemy or the scapegrace or both, but basically they want people inside their new system. Capitalists want wage workers; communists want everything collectivized and so on.

But when you’ve won, when your system, your ideology, is the only one available to most people, well then, you want people out because if you push them out the benefits for those who remain are greater and because being pushed out is such a huge punishment. If there is more than one system easily accessible to people, a person kicked out of one can usually go to another.

Even an alternative system which is not easily available, but does exist mitigates against abuse. It’s not an accident that the late era weakening of the Soviet Union and then the end of the Cold War saw much more abuse of populations in the capitalist world.

We, if it’s not obvious, are in a period with a dominant hegemonic ideology: capitalism of the neoliberal variety. (The previous dominant capitalist ideology was “New Deal” or “Post War” capitalism and was quite a bit different, while still being capitalist.)

This “pushing out” operates at all levels. At the bottom it means you get pushed out onto the street. In the middle it means descent to the working class or precariat. In the upper class, which is not the ruling class), it means dropping to the middle. And at the top, in the ruling class, it means being pushed into the upper class: people who are very comfortable and have more money than they need, but have no real power. You can have tens or even hundreds of millions of dollars and be in the upper rather than ruling class: it’s about power more than money. Some politicians and corporate executives are in the ruling class despite being worth only a couple tens of millions and even some billionaires, with just a few billion, aren’t really ruling class if they only have the money and don’t have control of any important company or some lever of power.

The pushing out is one of the symptoms of ideological decay. Peter Turchin has become famous for talking about “elite overproduction” but it has been understood for a long time that people who had expectations of being in the ruling or upper class and are kicked out are dangerous to the status quo. Indeed everyone who had expectations and didn’t get them is dangerous, but people who know how the system actually works and who were groomed for some form of leadership are particularly so.

At first the pushing out doesn’t matter. It didn’t matter much in the 80s or 90s or even 2000s, but eventually it reaches critical mass: an elite faction in opposition to the main system, massive popular discontent and, for a variety of reasons, an enforcer class unwilling to do their jobs.

This doesn’t have to be from the left; there are definitely right wing revolutions.

I leave it to readers to think this thru and apply it to our current situation.

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Open Thread

By Ian Welsh

On May 27, 2023

13 Comments

Use to discuss topics unrelated to recent posts.

Ending Zero-Covid Coming Home To Roost For China

By Ian Welsh

On May 25, 2023

14 Comments

So, as expected:

XBB is expected to result in 40 million infections per week by the end of May before peaking at 65 million a month later. This comes nearly six months after Beijing dismantled its Covid Zero curbs, allowing the virus to spread rapidly among the country’s 1.4 billion residents…

…Zhong’s estimate suggests that this latest wave of infections will be more muted compared to the previous wave that hit China late last year and into January. At that time, a different omicron sublineage likely infected 37 million people every day, overwhelming hospitals and crematoriums and causing residents to scramble for limited supplies of fever medicine.

As in the West, almost everyone in China will get Covid. Many will get it multiple times, indeed, if Covid continues for years, this is guaranteed. As I’ve long said, the primary social issue isn’t deaths (China’s government is probably more than OK with old people dying given its onrushing demographic issues), but Long Covid and asymptomatic damage to organs and to the immune system.

In a couple years China will be like the US and Britain, with about 2% of its population disabled by Covid: in China that’s twenty-eight million people, more than the population of many countries. Two years after that, well, even assuming it’s less than linear due to deaths and (hopefully) improved treatment, thirty-five to forty million isn’t unreasonable.

After ten years?

Zero-Covid was the right policy done stupid, and it shouldn’t have been ended until China had properly changed ventilation and filtering as well as installed proper sink traps (most Chinese homes do not have traps – those bends in the pipes, which block smells). Given China was having economic issues, the extra work would have been useful for the economy anyway.

If Covid doesn’t spontaneously mutate to do less long term damage it’s not clear to me how our societies survive this in addition to climate change. It’s not just that people can’t work or are stupider (there’s a ton of brain damage) or less healthy even if they can work, it’s that medical and disability systems will need a lot more people and resources and if the government doesn’t give them, it doesn’t make the problem go away, it shoves it onto the population.

The sheer level of incompetence and inability to plan ahead in our societies is insane. I had hoped that China might prove an exception. Alas.

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The Debt Ceiling Crisis Is Just Politics

By Ian Welsh

On May 24, 2023

11 Comments

So, let’s state what should be obvious.

Republican Presidents since Reagan have all increased the deficit more than Democratic ones.
Republicans have always raised the debt ceiling when Republican presidents are in charge; therefore,
The “debt ceiling crisis” is just partisan politics and has nothing to do with the deficit
Republicans and many Democrats want spending cuts which affect ordinary people, rather than repealing tax cuts or, say, cutting the “defense” budget.
Biden’s record is that he likes the idea of cutting things like social security; so…
A lot of Biden’s “resistance” is Kabuki
The constitutional argument is unclear, but as a practical matter, the Supreme Court cannot enforce a decision which says the debt ceiling is constitutional.
So, ultimately, whether the President decides to obey the debt limit is entirely a political decision, he can easily say that based on the constitution he has no right to do so-he must pay all obligations.
If Biden does ignore a Supreme Court decision it will increase the disintegration of the current political order and set a precedent.

I would note that the idea that the Supreme Court is the final arbiter of constitutional issues was not clear to the founders, and is something the court arrogated to themselves. It is not clear that they should have that power.

As for the rest, Biden will do what he wants to do.

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Capitalism’s “Invisible Hand” Is Prescriptive More Than Descriptive

By Ian Welsh

On May 22, 2023

11 Comments

The invisible hand is the idea that people operating based on their own self interest in a market economy will optimize “value” and by doing so will increase human welfare. If a person runs a company which makes something that people are willing to buy, they must want or need that thing, and the person will want to make more of that thing so that they can become richer. They do it out of greed, but the richer they get the more they improve the common weal, as it were.

So even though they aren’t doing what they do because they care about the welfare of others (Adam Smith is very clear about that) operating from greed leads to increase human welfare.

Works, except when it doesn’t.

Descriptive statements describe how the world objectively is. Prescriptive statements describe how the world ought to be.

It is certainly possible for someone to get rich doing good. It is also possible for them to get rich doing evil, and it is quite common for them to get rich doing both good and evil things.

Oil companies produces something people want. Oil, natural gas and coal have lead to a large chunk of the world being much better off. But the oil companies knew about climate change and not just suppressed the information, they funded denialism, for the obvious reason that they would make a lot less money if there was a political consensus that less oil and gas and coal had to be used.

Every company wants cheap labor, to reduce their costs, but wants consumers to buy their goods. This led to the Great Depression, in effect (the story is a bit more complicated but this is the essence), and was only fixed when the government forced them to give good wages to employees, and provided price and wage supports along with social security and medicare for old people who couldn’t work, but could continue consuming.

All companies who provide necessities, things people must have, have the ability is they are a monopoly or an oligopoly acting in a collusive matter (which doesn’t require meeting) to raise prices much higher than is good for human welfare. This includes food, water, housing and medical services, among others.

Many companies produce what economists call negative externalities: they do something which hurts other people, but don’t pay the cost. Right now in Britain, privatized water and sewage companies are paying record dividends while dumping record amounts of waste into Britain’s waterways.

Walmart and Amazon both tell their workers how to apply for food stamps and other benefits: they take the profits from cheap labor and dump much of the costs onto the government.

Positive externalities are as big a problem: you do something good and someone else gets the profits, so you have trouble doing more good or even continuing to do good. I like to use the example of the British Museum: without them many people wouldn’t come to London or stay as long, but almost all of the money is spent in hotels and restaurants and the British Museum gets almost none of it, even when you consider the government funding based on taxes it receives.

Universities are another classic: they produce a great deal of value, but are able to capture almost none of it. A good government keeps them well funded and emphasizes teaching and research not administration because they know that universities create value the government will eventually capture.

In dozens of ways markets actually incentivize acting in ways that don’t lead to human welfare, but they can improve human welfare. That’s the issue. It isn’t automatic. Sometimes it works that way, sometimes it’s nothing but oligopolies grasping an excess share and companies dumping their costs on society while taking the profits.

So the invisible hand making greed work to the benefit of all is prescriptive: it is a way that an economy with markets can work, not a way that it must work. If you want the invisible hand to do what Smith said it would, you have to stay right on top of capitalists and make sure that the can only get rich if they increase human welfare.

To a large extent, in the New Deal and post-war American period, that’s what government did. Once Reagan took over, it didn’t, it did the opposite because a rich middle class with a lot of money was like sheep in full coat waiting to be sheered for wool, then eaten.

Most economic issues are politics in drag and the vast majority of politics is just about power and coalitions. The remaining economic issues are about natural laws: ecology, geology, physics, biology: mother nature bats last and she doesn’t give a damn what happens to stupid humans or any other species.

All economic systems are prescriptive. “This is how the economy should work” and are descriptive in the sense that if the economy is organized according to the prescription, it is expected to produce certain results.

Capitalism can, for certain periods and places, produce increased human welfare. But it’s not automatic, it requires keeping capitalists under firm control. Capitalists, as it were, make fine servants, and terrible masters.

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