Category Archives: capitalism

Reflections on the progressive path forward

Reflections on the progressive path forward. 

The 2018 mid-term election was an astounding repudiation of Donald Trump, and an affirmation of a progressive alternative for the United States. A Democratic Party that has clearly moved to the Left on issues across the board – no doubt stimulated by the efforts of Bernie Sanders and Elizabeth Warren, in particular – achieved historic gains that were only limited by the extreme gerrymandering that the Republicans have instituted following their successes in 2010. And these clearly remain serious structural impediments to further progressive politics, to a consideration of which I will turn shortly. 

But we can be particularly excited by the racial, cultural, and gender diversity of the “class of 18.” And this achievement itself was built upon the most significant fact of all, namely the unprecedented politicization and mobilization of vast sectors of the electorate, across the country, a mobilization without precedent in modern American history. So many from all walks of life have come to realize that basic aspects of our culture and institutions – including much that we had always simply taken for granted as the gift of “American exceptionalism” – because “God had shed His grace” on us – were not guaranteed, and were directly threatened by the Trump Administration and its transformation of the Republican Party into a willing vehicle of a burgeoning American neo-Fascism. 

In the truly national scope and sustained action of this popular mobilization lies the basis of the exciting electoral success. And in the sustaining and expanding of this unprecedented national mobilization lies the hope and possibility of effectively advancing a progressive agenda that can reclaim American politics through the national elections of 2020, the consequent state-by-state redistricting, and thus for years thereafter.   

Therein resides our legitimate excitement, our organizational challenge, and our potential strategic trap. And it is to that potential “trap” that I want to address the better part of these remarks. For we are engaged in a long-term struggle with the forces of reaction, which, unfortunately, are all too strong across America – as attested to by Trump’s continued support at around 40%. We must build and expand the national constituency for progressive politics. And we must not alienate significant dimensions of that national mobilization by overplaying our hand. We must avoid getting carried away by some of the most remarkable progressive successes, mostly in the liberal bastions of many locations – but not all – in the Northeast, mid-West and West Coast, for example, thus playing into the hands of reaction. 

Let me explicate this challenge by drawing on a few excellent points developed by Michael Tomasky in the current issue of the New York Review of Books to which we need to pay careful attention. He first correctly draws the following two key takeaways from the recent election: 1) the necessity for the Democrats to increasingly mobilize their base to counter the Trumpian mobilization; and 2) the need to address the increasingly dramatic split between, on the one hand, the expanding urban and suburban base of the Democratic electorate and, on the other hand, its drastically shrinking support in small town and rural Americas, the base of the Trumpian Republican Party. 

Here, Tomasky observes that “there is no clearer sign of the changing shape of the Democratic coalition than the fact that going into the 2018 midterm elections, six of the 20 richest congressional districts were represented by Republicans but that when the new Congress is sworn in, all 20 will be represented by Democrats…. But by 2020, the Democrats will have to find ways to improve their performance in exurban and rural areas. This is not only for the sake of defeating Trump, but also to have any chance of recapturing the Senate.” 

Here, “a look at the Beto O’Rourke’s defeat in Texas, compared with Sherrod Brown’s victory in increasingly Republican Ohio, … is instructive.” While O’Rourke only lost by “around 220,000 votes out of 8.33 million cast, (he) carried just thirty-two of the state’s 254 counties, … (he) got walloped (in most of the rest). For example, … in six of the seven counties that surround (the city of Fort Worth), Cruz won 54, 68, 76, 80, 81, and 82 percent. And he won 70 or 80 percent of the vote in dozens of the smaller rural counties.” In contrast, Brown was victorious by being able to keep his deficit in similar rural and small town Ohio to around 60%.

Tomasky then observes that “the electoral consequences should be clear. Consider the Senate map of 2020. Thirty-four senators will face reelection (except for those who choose to retire). Of those, twenty-three will be Republicans, and just eleven Democrats. That sounds favorable to Democrats, but if you look closer, about fourteen of the Republicans represent deep-red states where they should cruise to reelection. The other seven will not be easy to flip. The fattest target is probably Maine incumbent Susan Collins. Maine just elected a Democratic governor, who is also the state’s first female governor. But beating an incumbent senator is always hard (though some believe Collins may retire). The other states where Democrats may have a shot include Colorado, Arizona, North Carolina, Iowa, Georgia, and Texas. Donald Trump carried five of those six. All have major cities, but all are states where it’s hard to win by carrying only the most populous counties and doing poorly in the rural ones.”

“As for the presidency,” Tomasky continues, “there are a number of states—the Great Lakes states, North Carolina, Florida, and even Arizona and Georgia—where the pro-Trump vote in the rural counties will be so amped up that the Democrat, while winning the big counties, will have a tough time overcoming it.“

While not exploring the causes of this electoral divide, which bears on the political and economic failures of both parties over the last 50 years, to which I will turn shortly, Tomasky offers the following “stunning statistics. The United States has experienced three recessions since 1990(:) … after the early 1990s recession, 71 percent of the new business growth occurred in counties with fewer than 500,000 people (and within that, 32 percent in counties with fewer than 100,000 people). After the 2002–2003 recession, that 71 percent shrank to 51 percent. And after the Great Recession of 2007–2009, the number was 19 percent—and in counties under 100,000 growth was literally zero.That is a crisis. It’s at the root of the opioid epidemic, and it’s why so many young people leave these towns.” And those most recent numbers happened under the neo-Liberal Obama Administration. This highlights one of the central reasons these regions are so desperate for change, and so angry at all political establishments, but especially those they see as aligned with urban cosmopolitan interests and values, which they primarily identify with the Democrats.

There is so much more than can and should be said about the causes and scope of this problem which I cannot address here, except to note that this economic situation and political divide is a direct result of the process of Neo-Liberal Globalization that has dominated the Western World since at least the arrival of Thatcher and Reagan. And it has had similar results across the “advanced West,” not to speak of its more global consequences. For example, it is the essential background for the almost unprecedented nation-wide mobilization of the French people against the Neo-Liberal policies of the Macron Administration, that has effectively brought that government to its knees.

But I only want to underline here the fact that a progressive Democratic program, if it is to be successful, must begin to address this economic and cultural divide. And to do that, it must break from the Neo-LIberal orthodoxy of its Clinton-Obama establishment, that has left behind so much of America. Here, Tomasky highlights “the Democrats’ two big electoral tasks as they head into 2020: to invest in maximizing turnout among their base voters in cities and diverse suburbs, and to take steps to ensure that they can become more competitive in the exurbs and the countryside. These goals may seem as though they contradict each other, but they need not; both constituencies would be open to an agenda emphasizing public investments that help middle- and working-class people. There will be some tension on cultural issues, and Democrats shouldn’t go overboard in pandering for rural votes. After all, they’re not trying win those areas; just to perform about 10 or 15 points better—at Sherrod Brown’s levels rather than Beto O’Rourke’s.”

But here’s where the “trap” of potential Left-wing overreach emerges. The danger that the Left will get carried away with its political enthusiasm and ideological rhetoric. I think of talk I have heard that speaks of an ascendant Left that should direct the Democrat’s national program. Or a recent program of MSNBC’s “The Last Word,” for example, on which Lawrence O’Donnell assembled a panel of “experts” to propound that Trump’s most recent series of tweets makes it incumbent on the New Democratic House of Representatives that they immediately begin impeachment proceedings. However desirable both of these goals may well be, they overreach the currently politically possible, and threaten to energize a popular backlash.

Just to note two salient points from the 2018 election in support of this caution. First, a significant majority of the Democrats’ 40 seat shift in the House of Representatives was accomplished with quite narrow electoral margins. Several were not even decided for several weeks. Second, as Michael Tomasky points out – a fact too many Left-wing advocates have ignored – “left-wing candidates did not do well overall in this election. The three major left-wing groups that endorsed candidates this year flipped no House seats from red to blue, while the more centrist New Dem PAC flipped twenty-eight seats.” To which he adds, challengingly, “what the Democrats will need in 2020, far more than a candidate of the left, or for that matter of the avowed center, is one who can withstand what will undoubtedly be the dirtiest and most dishonest campaign in the country’s modern history and provide the clearest moral contrast to the incumbent.”

He then concludes, quite on the mark as far as I am concerned, “the party now has the power to hold Trump and his administration accountable. They shouldn’t overreach and carry on about impeachment. Removing Trump from office would require the assent of about twenty Republican senators and is therefore basically impossible. They should just expose the corruption through holding aggressive oversight hearings and trust the American people to reach the right conclusion. Trump’s partisans are fierce, but the election showed that they are, however narrowly, outnumbered.”

So where is the danger of overreach? Clearly any attempt to immediately move for impeachment, for which much of the Country is clearly not ready, and on which platform few successful Democrats ran, would not be well received. Before any such effort might become practicable, there will need to be an ongoing series of quite legitimate public investigations by the New Democratic House, plus continual revelations by the Justice Department. That might “soften up” the terrain for an impeachment inquiry. But that’s at best down the road. 

Even more challenging and potentially destructive in the short run, is the emerging progressive strategy to advance a Green New Deal. Clearly, such a program can embody an exciting vision of a potentially transformative progressive program to address both the challenge of global warming and offer an effective alternative to that Neo-LIberal abandonment of large sections of American society. It is essential, of course, that we have such a program – and develop a consequent movement – to promote the comprehensive structural changes in the US economy that addresses both the profound dangers to civilization posed by Global Warming, and the vast destabilizing income inequalities and regional disparities that have been caused by Neo-Liberal Globalization. Let me be quite clear about that.

At the same time, however, the proposed Green New Deal, embodies a practical trap of political overreach for the Democratic Party, driven by an excited progressive movement that is well ahead of where much of the Country is at present. The danger is that the excitement of electoral successes and the real need of systemic change, will drive ideologically committed progressives to mistake a necessary directional goal for a non-révisable and achievable short-term political program. That is to make a two-fold basic strategic error, one methodological, and one political.

Methodologically, it is to mistake a projected and necessary end-in-view with the short term programs that can begin to move us in the desired direction. An end-in-view should be seen, not as a final goal that we are to insist be imposed upon our politics here and now. Rather, it should be seen as a “means to present action.” It is a necessary marker of a direction for our politics to take. It sets forth a needed theoretical frame and political direction to guide our short-term policies and programs. As we proceed with their practical implementation, reality itself is changed, and that will inevitably require us to continually revise and update our guiding vision and its on-going practical enactment.

Politically, the way that that general methodological point bears upon the present situation, is that presentation of, and the consequent public campaign on behalf of, a Green New Deal will not only direct present programs, but can begin to raise public consciousness and to move the public debate. Thus it can increasingly gain the support of increasingly wider sections of the public, thus making its radical programs more palatable to the general public. This is a campaign of several years duration, similar to that that was begun about a decade ago on behalf of Medicare For All, which campaign has now achieved far more general popular acceptance. 

These remarks may not sit well with some of my progressive allies, who I feel may have fallen in love with their own rhetoric and have confused their quite legitimate hopes for a decent America with the practical limitations placed on current poltical possibilities by the vast, complex, and diverse makeup of the American electorate, and the structural impediments to implementing systemic progressive economic, racial, and social transformation. It is, of course, quite essential to hold to that vision, and to try to effectively advance it as much as possible. But we have learnt in these last few years, if we needed that education, that any short term gains can easily be completely undone if we cannot secure a lasting base, both ideological and structural, for progressive politics through 2020 and beyond. And we must acknowledge the current limitations of national support for the complete progressive agenda to which even the remarkable nation-wide popular mobilization and electoral success are convincing testimony. 

“In our increasingly polarized environment, success is not had by moving to the vanishing center and trying to appease the “moderates,” but by energizing and mobilizing … our base to turn out to vote. And that requires attractive candidates that can present programs that speak to the concerns of their constituents. But … this is a large and diverse nation, and that what will speak to their constituents’ issues and concerns, and in a language that communicates, will be significantly different in different parts of the country.” Back Bay Boston is not Southern California. Queens and The Bronx are not Colorado, Arizona, or even Western Pennsylvania.

We have a remarkable opportunity to turn back Trumpian incipient neo-Fascism, and to begin building a progressive future. This is actually a life and death struggle to preserve even a modified democratic future for this country. It is a vital struggle. We must be careful not to overplay our hand and screw it up.

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Creating Worker Cooperatives on Long Island

Worker Cooperative Initiative of Long Island

Increasingly, we are seeing globalization cannibalize local businesses, destroy jobs, and drain money from the local economy. At the same time, working people are being placed in the position of having to compete with low cost labor in non-union states without serious environmental protections, or with exploited labor in Third World countries, or simply told that their jobs will be transferred overseas. Meanwhile, local communities lose the capacity to control their quality of life, preserve their environment, and plan for sustainable economic development. Thus, they cannot preserve family-supporting jobs and keep profits circulating in the local economy, sustain local business, and provide an adequate tax base for local services.

To address these pervasive challenges, the Long Island Progressive Coalition has inaugurated its “Worker Cooperative Initiative of Long Island,” as part of our contribution to the growing national movement to create a more Cooperative Economy. Worker cooperatives are viable businesses in which the workers are the primary decision-makers. Workers elect a board of directors on the base on one worker one vote. As worker-owners they hire and supervise management, and guarantee that the business remains local, and the profits circulate in the community. Thus they protect workers from outsourcing or exploitation by large multi-nationals, empower them on a daily basis, enhance the workplace experience, and give workers a legitimate experience of pride and ownership. And given the large number of successful Long Island family-owned businesses whose baby-boom owners have no succession plan, they offer an effective means to preserve numerous viable local businesses for their workers and the community.

The LIPC has initiated a series of related campaigns that can contribute to the creation of a Cooperative Economy Ecosystem capable of sustaining a growing local cooperative economy. These efforts include:

  • Exploring possibilities of worker buyouts of existing businesses as a way of addressing the “Silver Tsunami” of aging family owned businesses.
  • Exploring possibilities for the creation of new small businesses, with particular focus on addressing unmet needs for jobs, products, and particular services of minority communities.
  • Working with Sepa Mujer to create a minority owned worker cooperative for its members.
  • Working with the Hofstra Law Clinic and with faculty at LIU Post on research and development.
  • Developing close working relationships with major cooperative development organizations, including The Working World, the Center for Family Life, the Democracy Collaborative, the Union-Coop movement, and the North American office of the Mondragon cooperatives.
  • Creating materials for, and organizing, a public education campaign.
  • Becoming part of The Working World’s Peer Network.
  • Creating a Long Island Task Force on Building Community Wealth.
  • Creating a LIPC Board Steering Committee for the Worker Cooperative Initiative.
  • Developing a Professional Resource and Technical Advisory Board.

If you have any questions or comments, feel fee to share them with me.

On the Illusions of Libertarianism

On the Illusions of Libertarianism

Richard Koubeck commented suggestively on my critique of those who might consider voting for the Green candidate for President, that I should have included in my critique those who were considering voting for the Libertarian candidate. They, too, ought to realize how ill-informed and destructive their action would be. And Dick is, of course, correct, but not for the same reasons.

Libertarians act as if we are all isolated individuals, who come with a more or less inherently fixed nature, and are basically in complete control of our choices, and fully responsible of what we make of our lives. And they tend to see the government — almost always the national government — as the primary threat to our individual liberty: Taking through taxes the money that we have earned through our initiative and hard work and re-distributing it to undeserving others; or telling us how we should live our lives, thus constraining our individual freedom of choice. Gary Johnson, Libertarian Presidential candidate gives voice to these views by opposing, among others, a minimum wage, government mandated health insurance, practically all environmental regulations, and the government operated safety net, including Social Security.

But the entire Libertarian enterprise is misconceived, from the bottom up. It begins with a world view that makes no sense. It completely fails to appreciate the extent to which the human being is by nature a social being, whose basic feelings, thoughts, values, and actions are shaped by the moral and institutional contours of the wider society. Libertarians act as if government is the only significant institution that constrains the actions of the autonomous individual, but that is absurd. We are constrained, shaped, supported, sustained, and guided by institutions — formally and officially organized or informally enforcing rules and guidelines of “normal” behavior, and even of thought — practically every moment of our lives. Even more, there are numerous legally established institutions, such as corporations, as well as the conditions for the obtaining, maintaining, using, and transferring private property, that shape our social status, wealth, power, and life’s resources and opportunities at least as pervasively as do the official actions of government.

In fact, the so-called and celebrated “free market” is a giant illusion, and con game. There is no such thing as a “free market.” All markets are CONSTRUCTED, the result of numerous actions of society and government, as to how property can be obtained, maintained, transferred, taxed, and protected.

Even more, there is a very good reason why internationally we are so concerned about “failed states”. Not only can they become the breeding ground of piracy and terror, but, as Thomas Hobbes made so patently clear already in the 17th Century, without effective government, all human relations tend to degenerate into a “war of all against all” in which the life of man is “solitary, poor, nasty, brutish, and short.” What Libertarians have done is confuse the completely legitimate and defensible moral concern for, and even celebration of, the value of individuality, with the completely non-sensical “metaphysical” claim of the unbridgeable freedom of the so-called autonomous individual celebrated by the perverse doctrine of Individualism. But of that, more at another time — though one can check out Chapter 7 of my “Critique of Western Philosophy and Social Theory,” which addresses these issues in detail.

Explaining Neo-Liberalism

Explaining Neo-Liberalism

I have been asked by many what is meant by Neo-Liberalism, the doctrine that underlies the pervasive “conventional wisdom,” that explains and “legitimates” the policies and programs that have become dominate in the world economy over the last 40+ years. They have been promoted in America by the leadership of both major political parties — with, of course, some significant differences in emphases — though not, of course, by Bernie Sanders, which is what makes the success of his candidacy so remarkable.

In seeking to explain Neo-Liberalism, I came across the following article by George Monbiot, which I thought it worth re-producing for wider public consumption. (George Monbiot’s new book, How Did We Get into This Mess? George Monbiot is the author of the best selling books The Age of Consent: a manifesto for a new world order and Captive State: the corporate takeover of Britain. He writes a weekly column for the Guardian newspaper. Visit his website at http://www.monbiot.com.)

I have made a few minor modifications, and added a brief addition pointing the way to an alternative political economy, of which I will have more to say in the future. But here’s the essence of his analysis.

“It’s as if the people of the Soviet Union had never heard of communism. The ideology that dominates our lives has, for most of us, no name. Mention it in conversation and you’ll be rewarded with a shrug. Even if your listeners have heard the term before, they will struggle to define it. Neoliberalism: do you know what it is?

Its anonymity is both a symptom and cause of its power. So pervasive has neoliberalism become that we seldom even recognise it as an ideology. We appear to accept the proposition that this utopian, millenarian faith describes a neutral force; a kind of biological law, like Darwin’s theory of evolution. But the philosophy arose as a conscious attempt to reshape human life and shift the locus of power.

Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that “the market” delivers benefits that could never be achieved by planning.

Attempts to limit competition are treated as inimical to liberty. Tax and regulation should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions, that impede the formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous: a reward for utility and agenerator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counter-productive and morally corrosive. The market ensures that everyone gets what they deserve.

We internalise and reproduce its creeds. The rich persuade themselves that they acquired their wealth through merit, ignoring the advantages – such as education, inheritance and class – that may have helped to secure it. The poor begin to blame themselves for their failures, even when they can do little to change their circumstances.

Never mind structural unemployment: if you don’t have a job it’s because you are unenterprising. Never mind the impossible costs of housing: if your credit card is maxed out, you’re feckless and improvident. Never mind that your children no longer have a school playing field: if they get fat, it’s your fault. In a world governed by competition, those who fall behind become defined and self-defined as losers.

The term neoliberalism was coined at a meeting in Paris in 1938. Among the delegates were two men who came to define the ideology, Ludwig von Mises and Friedrich Hayek. Both exiles from Austria, they saw social democracy, exemplified by Franklin Roosevelt’s New Deal and the gradual development of Britain’s welfare state, as manifestations of a collectivism that occupied the same spectrum as nazism and communism.

In The Road to Serfdom, published in 1944, Hayek argued that government planning, by crushing individualism, would lead inexorably to totalitarian control. Like Mises’s book Bureaucracy, The Road to Serfdom was widely read. It came to the attention of some very wealthy people, who saw in the philosophy an opportunity to free themselves from regulation and tax. When, in 1947, Hayek founded the first organisation that would spread the doctrine of neoliberalism – the Mont Pelerin Society – it was supported financially by millionaires and their foundations.

With their help, he began to create what Daniel Stedman Jones describes in Masters of the Universe as “a kind of neoliberal International”: a transatlantic network of academics, businessmen, journalists and activists. The movement’s rich backers funded a series of think tanks which would refine and promote the ideology. Among them were the American Enterprise Institute, the Heritage Foundation, the Cato Institute, the Institute of Economic Affairs, the Centre for Policy Studies and the Adam Smith Institute. They also financed academic positions and departments, particularly at the universities of Chicago and Virginia.

As it evolved, neoliberalism became more strident. Hayek’s view that governments should regulate competition to prevent monopolies from forming gave way, among American apostles such as Milton Friedman, to the belief that monopoly power could be seen as a reward for efficiency.

Something else happened during this transition: the movement lost its name. In 1951, Milton Friedman was happy to describe himself as a neoliberal. But soon after that, the term began to disappear. Stranger still, even as the ideology became crisper and the movement more coherent, the lost name was not replaced by any common alternative.

At first, despite its lavish funding, neoliberalism remained at the margins. The post-war consensus was almost universal: John Maynard Keynes’s economic prescriptions were widely applied, full employment and the relief of poverty were common goals in the US and much of western Europe, top rates of tax were high and governments sought social outcomes without embarassment, developing new public services and safety nets.

But in the 1970s, when (the implementation of) Keynesian policies began to fall apart and economic crises struck on both sides of the Atlantic – with the end of the post-WWII investment boom and the oil embargoes — neoliberal ideas began to enter the mainstream. As Milton Friedman remarked, “when the time came that you had to change … there was an alternative ready there to be picked up.” With the help of sympathetic journalists and political advisers, elements of neoliberalism, especially its prescriptions for monetary policy, were adopted by Jimmy Carter’s administration in the United States and Jim Callaghan’s government in Britain.

After Margaret Thatcher and Ronald Reagan took power, the rest of the package soon followed: massive tax cuts for the rich, the crushing of trade unions, deregulation, privatisation, outsourcing and competition in public services. Through the IMF, the World Bank, the Maastricht treaty and the World Trade Organisation, neoliberal policies were imposed – often without democratic consent – on much of the world. Most remarkable was its adoption among parties that once belonged to the left: Labour and the Democrats, for example.

It may seem strange that a doctrine promising choice and freedom should have been promoted with the slogan “there is no alternative”. But, as Friedrich Hayek remarked on a visit to Pinochet’s despotic Chile – one of the first nations in which the programme was comprehensively applied – “my personal preference leans toward a liberal dictatorship rather than toward a democratic government devoid of liberalism.” The freedom neoliberalism offers, which sounds so beguiling when expressed in general terms, turns out to mean freedom for the pike, not for the minnows.

Freedom from trade unions and collective bargaining means the freedom to suppress wages. Freedom from regulation means the freedom to poison rivers, endanger workers, charge iniquitous rates of interest and design exotic financial instruments. Freedom from tax means freedom from the distribution of wealth that lifts people out of poverty.

As Naomi Klein documents in The Shock Doctrine, neoliberal theorists advocated the use of crises to impose unpopular policies while people were distracted: for example, in the aftermath of Pinochet’s coup, or the Iraq war and Hurricane Katrina, which Milton Friedman described as “an opportunity to radically reform the educational system” in New Orleans.

Where neoliberal policies cannot be imposed domestically, they are imposed internationally, through trade treaties, such as the pending Trans-Pacific Partnership, incorporating “investor-state dispute settlement”: offshore tribunals in which corporations can press for the removal of social and environmental protections. When parliaments have voted to restrict sales of cigarettes, protect water supplies from mining companies, freeze energy bills or prevent pharmaceutical firms from ripping off the state, corporations have sued, often successfully. Democracy is reduced to theatre.

Another paradox of neoliberalism is that universal competition relies upon universal quantification and comparison. The result is that workers, job-seekers and public services of every kind are subject to a pettifogging, stifling regime of assessment and monitoring, designed to identify the winners and punish the losers. The doctrine that Ludwig von Mises proposed, would free us from the bureaucratic nightmare of central planning has instead created one.

Neoliberalism was not conceived as a self-serving racket, but it rapidly became one. Economic growth has been markedly slower in the neoliberal era (since 1980 in Britain and the US) than it was in the preceding decades; but not for the very rich. Inequality in the distribution of both income and wealth, after 60 years of decline, rose rapidly in this era, due to the smashing of trade unions, tax reductions, rising rents, privatisation and deregulation.

The privatisation or marketisation of public services – such as energy, water, trains, health, education, roads and prisons – has enabled corporations to set up tollbooths in front of essential assets and charge rent, either to citizens or to government, for their use. Rent is another term for unearned income. When you pay an inflated price for a train ticket, only part of the fare compensates the operators for the money they spend on fuel, wages, rolling stock and other outlays. The rest reflects the fact that they have you over a barrel.

Those who own and run the UK’s privatised or semi-privatised services make stupendous fortunes by investing little and charging much. In Russia and India, oligarchs acquired state assets through firesales. In Mexico, Carlos Slim was granted control of almost all landline and mobile phone services and soon became the world’s richest man.

Financialisation, as Andrew Sayer points out in Why We Can’t Afford the Rich, has had similar impacts. “Like rent,” he argues, “interest is … unearned income that accrues without any effort.” As the poor become poorer and the rich become richer, the rich acquire increasing control over another crucial asset: money. Interest payments, overwhelmingly, are a transfer of money from the poor to the rich. As property prices and the withdrawal of state funding load people with debt (think of the switch from student grants to student loans), the banks and their executives clean up.

Sayer argues that the past four decades have been characterised by a transfer of wealth not only from the poor to the rich, but within the ranks of the wealthy: from those who make their money by producing new goods or services to those who make their money by controlling existing assets and harvesting rent, interest or capital gains. Earned income has been supplanted by unearned income.

Neoliberal policies are everywhere beset by market failures. Not only are the banks too big to fail, but so are the corporations now charged with delivering public services. As Tony Judt pointed out in Ill Fares the Land, Friedrich Hayek forgot that vital national services cannot be allowed to collapse, which means that competition cannot run its course. Business takes the profits, the state keeps the risk.

The greater the failure, the more extreme the ideology becomes. Governments use neoliberal crises as both excuse and opportunity to cut taxes, privatise remaining public services, rip holes in the social safety net, deregulate corporations and re-regulate citizens. The self-hating state now sinks its teeth into every organ of the public sector.

Perhaps the most dangerous impact of neoliberalism is not the economic crises it has caused, but the political crisis. As the domain of the state is reduced, our ability to change the course of our lives through voting also contracts. Instead, neoliberal theory asserts, people can exercise choice through spending. But some have more to spend than others: in the great consumer or shareholder democracy, votes are not equally distributed. The result is a disempowerment of the poor and middle. As parties of the right and former left adopt similar neoliberal policies, disempowerment turns to disenfranchisement. Large numbers of people have been shed from politics.

Chris Hedges remarks that “fascist movements build their base not from the politically active but the politically inactive, the “losers” who feel, often correctly, they have no voice or role to play in the political establishment.” When political debate no longer speaks to us, people become responsive instead to slogans, symbols and sensation. To the admirers of Donald Trump, for example, facts and arguments appear irrelevant.

The invisible doctrine of the invisible hand is promoted by invisible backers. Slowly, very slowly, we have begun to discover the names of a few of them. We find that the Institute of Economic Affairs, which has argued forcefully in the media against the further regulation of the tobacco industry, has been secretly funded by British American Tobacco since 1963. We discover that Charles and David Koch, two of the richest men in the world, founded the institute that set up the Tea Party movement. We find that Charles Koch, in establishing one of his think tanks, noted that “in order to avoid undesirable criticism, how the organization is controlled and directed should not be widely advertised.”

The words used by neoliberalism often conceal more than they elucidate. “The market” sounds like a natural system that might bear upon us equally, like gravity or atmospheric pressure. But it is fraught with power relations. What “the market wants” tends to mean what corporations and their bosses want. “Investment”, as Andrew Sayer notes, means two quite different things. One is the funding of productive and socially useful activities, the other is the purchase of existing assets to milk them for rent, interest, dividends and capital gains. Using the same word for different activities “camouflages the sources of wealth”, leading us to confuse wealth extraction with wealth creation.

The anonymity of neoliberalism is fiercely guarded. Those who are influenced by Hayek, Mises and Friedman tend to reject the term, maintaining – with some justice – that it is used today only pejoratively. But they offer us no substitute. Some describe themselves as classical liberals or libertarians, but these descriptions are both misleading and curiously self-effacing, as they suggest that there is nothing novel about The Road to Serfdom, Bureaucracy or Friedman’s classic work, Capitalism and Freedom.

For all that, there is something admirable about the neoliberal project, at least in its early stages. It was a distinctive, innovative philosophy promoted by a coherent network of thinkers and activists with a clear plan of action. It was patient and persistent. The Road to Serfdom became the path to power.

Neoliberalism’s triumph also reflects the failure of the left. When laissez-faire economics led to catastrophe in 1929, Keynes devised a comprehensive economic theory to replace it. When Keynesian demand management hit the buffers in the 1970s, there was “an alternative ready there to be picked up.” But when neoliberalism fell apart in 2008 there was … nothing. This is why the zombie walks. The left and centre have produced no new general framework of economic thought for 80 years.

Every invocation of Lord Keynes is an admission of failure. To propose Keynesian solutions to the crises of the 21st-century is to ignore three obvious problems. It is hard to mobilise people around old ideas; the flaws exposed in the 1970s have not gone away; and, most importantly, they have nothing to say about our gravest predicament: the environmental crisis. Keynesianism works by stimulating consumer demand to promote economic growth. Consumer demand and economic growth are the motors of environmental destruction.

What the history of both Keynesianism and neoliberalism show is that it’s not enough to oppose a broken system. A coherent alternative has to be proposed. For Labour, the Democrats and the wider left, the central task should be to develop an economic Apollo programme, a conscious attempt to design a new system, tailored to the demands of the 21st Century.”

A movement has developed in the US that now seeks to provide that alternative to Neo-Liberalism. It has been pioneered primarily by the Democracy Collaborative, and set forth briefly by Gar Alperowitz in his recent book What Then Must We Do? Going under the name of The Next System Project, or Community Wealth Building, this movement seeks to develop a place-based economic model in which communities begin to take control of their own resources and develop their own capacities. Initiatives are now underway all across the country, from worker cooperatives, to land trusts, from participatory budgeting, to public and cooperative banking and energy companies, from B corporations to community development working with “anchor institutions.” This effort can be checked out on the internet, and will be discussed further by me in the future.

 

America Today: in Mythology and Fact

America Today: in Mythology and Fact

America has been engaged in a deeply rooted cultural-political Cold War that has been more or less simmering for decades. But it has been brought to the surface in a way that has come to effectively dominate the current political campaigns by the confluence of two additional factors. These are what I call, 1) the closing of the international frontier, and 2) the consequent squeeze on the capacity of neo-Liberal political economy to continue to provide for even a modicum of economic growth for middle America. For the purposes of this post, I will be far too brief. But let me outline the structure of this argument, to which I have already referred in some prior posts.

1) Stage One, brilliantly developed by Colin Woodard in his “American Nations”, concerns the ethno-national regional structure of America’s pattern of settlement. That has created in effect two fairly distinct moral-political coalitions whose values and world views are almost polar opposites. They can not even agree on a set of common facts, or impartial criteria to evaluate arguments. And with the proliferation of modern media outlets, it is as if each coalition lives in its own self-contained world. This ethno-national and regional polarization has even been augmented by what social scientists refer to as the “big sort,” as people tend to relocate to areas inhabited by like-minded residents.

To vastly over simplify, drawing directly on Woodard’s analysis, we have the Deep South led coalition that basically includes Appalachia and the Far West, confronting New England, New York, and the West Coast, fighting over their ability to gain the support of the Hispanics, expanding from the Southwest, and the people of what one might refer to as the Midwest. (The development and migration patterns of African-American communities — as well as of Hispanic communities — has, of course, greatly complicated this simplified picture.) It is important to realize that these opposed coalitions tend to have quite opposed conceptions of the nature of government, the community, the individual, business, the market, religion, the family, the role of women, and of course, race. Clearly, each of these issues could be the basis of a volume on its own. But enuf said of this for the present.
2) These conflicting moral, political, religious, and racial orientations are increasingly impacted by, and having to come to terms with, what I am calling the closing of the international frontier of American expansion. As I have developed this point in my chapter on “The American Enterprise,” Chapter 8 of my “Critique of Western Philosophy and Social Theory,” growth has been the mantra of American development. First across the great North American continent. And when that expanding frontier closed in the late 19th Century, the United States started building its international empire. Throughout the middle of the 20th Century it more or less could set the terms of its economic and military hegemony.

That capacity for relatively unconstrained economic growth, which fueled the significant enhancement of the material quality of life of most Americans, even if far from equitably, has increasingly had to confront growing limitations coming from: the Cold War, the emergence of the Third World, the development of economic counterweights first from Japan, then from China, India, Russia, Brazil, South Africa, South America, and the European Union. And, more subtly, and pervasively, having so reluctantly to deal with the increasing constraints on previously more or less unconstrained economic growth which is the meaning of the ecological crises. All of these have increasingly squeezed the economic capacity of the United States to more or less grow at will, and use that growth to “buy off” the support of the American people.
3) This leads to final dimension of this triangular confrontation; the challenge of, and to, American “free enterprise”, neo-Liberal capitalism. Here, Jacob Hacker and Paul Pierson’s brilliant book, “Winner-Take-All Politics,” nails the political offensive of the ruling capitalist elites beginning in the 1970s to the squeeze placed on their capacity for relatively unconstrained economic growth. (Though the authors focus is primarily on what they see as a corporate counter-offensive to the politics of the Great Society and the counter cultural movements of the 60s, I think we need to place all of that within the wider historical context suggested by my previous remarks.) Two examples of that historical squeeze, for example, that the authors do not mention is the oil embargoes and consequent gas lines of the early 70s, plus the action of Richard Nixon to end the dollar’s convertibility with gold that took place in 1971.

But the point is well documented by the authors as to the institution of a sophisticated political offensive, mobilizing the corporate community. Initially working primarily through the Republican Party, and increasingly co-opting the Democratic Party, the corporate world has been able to create a public consensus against government and in support of privatization, deregulation, tax cuts for “the job creators,” on behalf of the “Free Market” and “Free Trade,” and thus they have been able to re-write the rules of the political and economic game in such a way as to vastly expand their power and wealth, at the expanse of the vast majority of Americans. Thus they have been able to garner the vast majority of whatever benefits from the narrowing space for US economic growth remains possible, while squeezing middle America. And that squeeze is hurting more and more. And more and more people are no longer trusting the elites that have been selling them their neo-Liberal snake oil — however confused most Americans are about what has been happening to them, and who and what are to blame.
But one thing is certain. Americans have not yet even begun to have a public conversation about these fundamental changes in our historical situation, and what we can and should do about it. We continue to act as if it’s politics (and economics) as usual. And that cannot last. But this political campaign is the first in which this squeeze has begun to fundamentally challenge the control of the Neo-Liberal elite.

Making “provisional” sense of current American politics

Making “provisional” sense of current American politics.

There are three historical currents underlining our current Presidential campaign which need to be appreciated if we are to more adequately grasp the dramatic and somewhat unprecedented events that have captured the American imagination and media. Let me first list them, then briefly elaborate. In future posts, I plan on discussing each of them in greater detail.

Those currents are: 1) the profound antagonisms between several of the major ethnoregional “nations” that have created the mostly dis-United States from its founding, and have been “at war” ever since; 2) the closing off, first of the national, and, more recently, of the international, “frontier” that permitted and fueled more or less continual American political, military, and economic expansion; and 3) the dynamic structure of American capitalist institutions, driven by privatization and the imperative to grow at all costs. Now for a brief elaboration.

  • The determinative (American) political struggle (since 1877),” writes Colin Woodard in “American Nations”, “has been a clash between shifting coalitions of ethnoregional nations, one invariably headed by the Deep South, the other by Yankeedom.” (p, 295) This resulted from ideological-cultural-regional consolidation following upon the termination of Reconstruction. This tended to align the Scots-Irish of an expanded Appalachia with the people of the Far West (excluding the West Coast) under the leadership of the Deep South. These are areas that are, for the most part, militaristic, evangelical, individualistic, anti-governmental, authoritarian, with strong racist currents, and strongly anti-social reformist, rather celebrating a “private Protestantism.” They have long been in opposition to the social reformers stemming from the Communitarian “Public Protestantism” of the New England Puritans, in alliance with metropolitan New Yorkers, and that culture primarily transported from New England to what Woodard cleverly calls “the Left Coast.” Success has tended to go to that ethnoregional alliance that substantially can win over majorities of the people of the mid-west and the expanding Hispanics from the Southwest. We can see this alignment and its struggles playing out in general in the Red v. Blue (& Purple) states, and the constituencies supporting distinct Presidential candidates.
  • Still more briefly, let me note that, after the closing of its continental frontier at the end of the 19th century, the U.S. pursued its economic growth through the creation of an imperial “empire”. But, with the emergence of the Cold War, followed by resistance in the Third World and South America, and then the emergence of major economic and military powers in China, India, Brazil, the EU, and even Russia and South Africa, constraints on US unlimited growth were bound to take place. (See Chapter 8 on “The American Enterprise”, in my “Critique of Western Philosophy and Social Theory” for a detailed discussion of this economic squeeze, and its expected domestic backlash.)
  • Finally, the dynamics of American Capitalism require unending growth to provide an economy whose “rushing tide can lift (most) all boats,” though certainly never equitably. But, with its continually culturally destabilizing dynamic, wedded to fundamental inequities in power and wealth, the squeeze on capitalism’s growth was bound to confront a deep sense of resentment from betrayed expectations, leading to scapegoating of the more marginalized.

Such frames my understanding of the current Presidential campaign, and its prefiguring of the forthcoming challenges facing the United States. Of this, more in future blog entries.

Hillary’s Defense of Wall Street Contributions is Backwards.

Why Hillary’s Defense of Wall Street Contributions is Backwards.

When Bernie Sanders challenges Hillary Clinton about her astronomical speaking fees from Goldman Sachs and other Wall Street financial interests, she responds by challenging him to name one specific vote that she changed because of receiving money from Wall Street. To which he responds by reiterating, correctly, of course — but slightly besides the point — that corporations and wealthy people don’t give such contributions out of personal generosity, but because they expect to get something for it. Which is obvious.

But the entire issue is framed backwards by Hillary, for obvious reasons. It’s not that Hillary Clinton changed votes because she received large corporate contributions from Wall Street, it’s that she received those contributions because Wall Street already knows they can count on her votes. They know that she is a corporate Liberal who fundamentally shares their economic and political world view. Thus they know they can count on her continuing support, and wish to reward and encourage her actions, and provide her with the wherewithal to carry on. That is why she was so enthusiastic in her support for the Trans-Pacific Partnership while serving as Secretary of State, why she did not take a position against Fast Track early on in the campaign, when she did not feel she had to worry about Bernie Sanders’ primary challenge, and why her late found opposition to TPP has been mild, with no commitment to stop it if she gets elected — as Bernie Sanders has promised to do.

But Bernie has seemed to be unwilling to make this obvious point about her being a corporate Liberal — forcing her to make that promise of rejecting TPP if elected — because this would force him to criticize Obama as the corporate Liberal that he is. And Bernie obviously feels that he needs to downplay his opposition to Obama’s economics, perhaps because of his fear that that would alienate large sections of the Black vote, and possibly, of the Democratic base. And thus when Hillary responds to his challenge on her taking large Wall Street donations with noting that Obama did likewise, Bernie is left on the defensive, and his responses are weak.

Bernie would be on more solid ground, and true to his beliefs and proposals, if he would recognize that Obama is a corporate Liberal. That’s why Obama chose the economic advisors he did, why no corporate executives went to jail for ripping off the economy, why the Tea Party and the Left is justly outraged by the bailout of Wall Street and the failure to protect homeowners from foreclosures, why neither Clinton nor Obama want to talk about breaking up the big banks, why they have no major policies that would really address the increasing growth of income inequality, and why Obama is doing everything in his power to push through the corporate-designed TPP, against the opposition of the majority of the Democratic Party — which is, in this case, supported by the Tea Party!!

Bernie Sanders is correct in his claim that only a “political revolution” can significantly change the politics of this country, putting Main Street in power instead of Wall Street — however dubious such a revolution may be. And that Hillary Clinton — however much vastly to be preferred to any of the (corporately-controlled) Republican alternatives — is a corporate Liberal who would truly constitute continuity with Obama’s economic and political Wall Street-friendly agenda. We could do far worse. We may do far worse. But we need to do far better if we are to counter the growth of American oligarchic power, revitalize and preserve American democratic traditions, and effectively address the long-term structural threats to representative government.