Branko Milanovic: Those Who are Left Out in the Cold

Branko Milanovic writes about Those Who are Left Out in the Cold.

But I think that it is insufficient to leave this argument at a very abstract level where one group of Americans would have a more cosmopolitan welfare function and better perception of global benefits of trade and another would be more nativist and ignorant of economics. I do not think that the real difference between the two groups has to do with welfare concerns and economic literacy but with their interests. Many rich Americans who like to point out to the benefits of globalization worldwide significantly benefited and continue to benefit from the type of globalization that has been unfolding during the past three decades. The numbers, showing their real income gains, are so well known that they need no repeating. They are large beneficiaries from this type of globalization because of their ability to play off less well-paid and more docile labor from poorer countries against the often too expensive domestic labor. They also benefit through inflows of unskilled foreign labor that keep the costs of the services they consume low. Thus rich Americans are made better off by the key forces of globalization: migration, outsourcing, cheap imports, which have also been responsible for the major reduction of worldwide poverty. Perhaps in a somewhat crude materialist fashion I think that their sudden interest in reducing worldwide poverty is just an ethical sugar-coating over their economic interests which are perfectly well served by globalization. Like every dominant class, or every beneficiary of an economic or political regime, they feel the need to situate their success within some larger whole and to explain that it is a by-product of a much grander betterment of human condition.

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Let's not forget that Capitalism has been a positive force in world economic history. The world today with its technological marvels and gigantic industrial infrastructure would not have been possible without Capitalism.

Let us also remember that Capitalism is unsustainable. It requires unlimited growth to survive. Yet we live in a finite world. Capitalism is heading for catastrophe unless we change the system.

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Chris Dillow: Conning the working-class

Chris Dillow writes about how Capitalists are Conning the working-class.

Some laboratory experiments (pdf) by Philip J. Grossman and Mana Komai have shown how strong such within-class envy can be. They show that some of the poor are willing to attack other poor people even at their own expense. They conclude:

We find strong evidence of within class envy: the rich targeting the rich and the poor targeting the poor…Within the poor community, the target of envy is usually a poorer subject whose wealth is close to the attacker; the attacker may possibly be trying to preserve his/her relative ranking.

I say all this for a reason. It's tempting for lefties to believe that people vote Tory because of "neoliberal" ideology and the right-wing media. But there might be more to it than this. Even without such propaganda, there are cognitive biases at work which undermine class solidarity. I fear some on the left underestimate this fact because of the same cognitive bias which contributed to that woman voting Tory - wishful thinking.

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Yes, the divisions within the working class are based on cognitive biases. But these biases are fostered and engendered through Capitalism.

There is no natural way these biases can be overcome except through conscious action and though on the part of the working class.

Only we can liberate ourselves. There is no magic cure to Capitalism except the revolutionary change that originates in ourselves.

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Dan Little: ABM approaches to social conflict

Dan Little discusses ABM approaches to social conflict.

Second, it is important to notice the range of factors the simulation does not consider, which theorists like Tilly would think to be crucial: quality of leadership, quality and intensity of organization, content of appeals, differential pathways of appeals, and variety of political psychologies across agents. This simulation captures several important aspects of this particular kind of collective action. But it omits a great deal of substantial factors that theorists of collective action would take to be critical elements of the dynamics of the situation.

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In other words, the discipline and cohesion of a Leninist party is vitally important in bringing about revolutionary change.

Key variables in their simulation are religious identity, demographic change, population density, the history of recent inter-group conflict, and geographical location. The action space for individuals is: move location, mobilize for violence. And their model is calibrated to real data drawn from four states in Northwest India. Their basic finding is this: "Conflict is predicted in this model where islands or peninsulas of one ethnicity are surrounded by a sea of another (Figure 2.1)."

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It is interesting to note that the two (2) major incubators of the Bolshevik Revolution were island:

• Industrial district of Vyborg near St. Petersburg
• Kronstadt Naval fortress at St. Petersburg

Their isolation was meant to contain unrest, but the isolation allowed and fostered revolutionary temperments.

All these models warrant study. They attempt to codify the behavior of individuals within geographic and social space and to work out the dynamics of interaction that result. But it is very important to recognize the limitations of these models as predictors of outcomes in specific periods and locations of unrest. These simulation models probably don't shed much light on particular episodes of contention in Egypt or Tunisia during the Arab Spring. The "qualitative" theories of contention that have been developed probably shed more light on the dynamics of contention than the simulations do at this point in their development.

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Revolutionaries should continue to study previous revolutions, and see what is applicable to the current and evolving political situation.

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Robert J. Schwendinger: "Migration, "Free" Trade and China in History"

Robert J. Schwendinger writes that "Migration, "Free" Trade and China in History".

The seeds of failure for a prosperous China Trade were being planted during the years in which western nations treated China as a semi-colony, taking as much as they could get and giving little or nothing in return. The failure was also precipitated by the nations in which Chinese nationals were exploited for their labor, but denied universal rights and protections.

The story of Commissioner Lin Tse Hsu and his destruction of the great quantity of opium in 1839 is as important to Chinese history as the Boston Tea Party is to the United States; and although Lin’s actions precipitated defeat by the Western powers, the national humiliation China and Chinese suffered for almost a century is partly responsible for the two revolutions in modern times. With an emphasis on its own needs, China will assuredly measure each petitioner for respect. That nation’s history also suggests the need to be especially aware of challenges to its sovereignty.

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So far, the successful Communist revolutions have all been based on national uprisings against colonialism:

• Russian revolution against French Imperialism
• Chinese revolution against European, American and Japanese Imperialism
• Vietnamese revolution against French and American Imperialism
• Laotian revolution against French Imperialism
• Cuban revolution against American Imperialism
• Venezuelan revolution against American Imperialism

For the nest series of Revolutions, these will have to be in Imperialist countries like Australia. Here nationalism is the natural enemy of social revolution.

This is why it is important to build anti-racism movements around land rights and refugee rights. We have to emphasis the international character of the working class.

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Edward Lambert: Is it Debt Deleveraging or the Fall in Labor Share?

Edward Lambert argues against Adair Turner: Is it Debt Deleveraging or the Fall in Labor Share?.

I look at another cause for economic sluggishness… the fall in labor share. It is not a concept so easy to accept. If you pay labor less, business should be able to grow faster right? You have lowered business costs. You have made it easier for firms to project higher profits, right?

Yet, I see the fall in labor share as a fall in effective demand, which has lowered economic potential and the social benefits in the economy. The drying up so to speak of labor share of income has caused firms to seek out profits in other channels where money is circulating. Firms are able to survive, but labor continues to suffer.

We can say that deleveraging debt and the fall in labor share both contribute to the economic sluggishness. But since Adair Turner did not talk about the fall in labor share, I will.

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This is classic Marxism: Capitalist crises are caused by over-production and under-consumption. The proletariat can only purchase with what they earn (current and/or future earnings).

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Samah Sabaw: Read their lips: Israeli leaders’ plans for the Palestinians

Samah Sabaw writes that we should Read their lips: Israeli leaders’ plans for the Palestinians.

Palestinian leaders have not intervened. Israel has made it clear they expect the Palestinian security forces to work with the Israeli military to crush the protests, and so far Mahmoud Abbas’ PA has mostly complied.

The de-facto Hamas government in Gaza has also made it clear that it prefers not to be drawn into the rebellion. Its political bureau deputy chief, Musa Abu Marzouk, spoke firmly against firing rockets into Israel as this would “transfer the campaign to a different front, and will snuff out the popular intifada.” Other militia groups in Gaza nevertheless fired a few rockets into Israel, causing no injuries. Israel’s response: an airstrike that killed a pregnant woman and her 3-year-old daughter. Footage of the father weeping over his dead daughter, begging her to wake up, has gone viral, prompting more calls for rebellion against Israel’s oppression and brutality.

Desperate Palestinian youth who have lived under occupation and siege their entire lives, with no hope of a future, risk their lives in their fight for freedom. But what are the Israelis fighting for? Having destroyed all chances of Palestinian statehood, Israel is fighting to maintain its occupation and subjugation of the Palestinian people, creating an apartheid state throughout the lands where its rule holds sway.

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The brutality of genocide engenders a brutal response. Do not condemn the Palestinian response without understanding the brutality that created it. Israel has rejected peace, and embraced war.

Support of Israel is support of genocide.

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Tom Engelhardt: Creating an Un-Intelligence Machine

Tom Engelhardt writes that the USA is Creating an Un-Intelligence Machine.

You get the point.  Whatever the efforts of that expansive corps of intelligence analysts (and the vast intelligence edifice behind it), when anything happens in the Greater Middle East, you can essentially assume that the official American reaction, military and political, will be “surprise” and that policymakers will be left “scrambling” in a quagmire of ignorance to rescue American policy from the unexpected.  In other words, somehow, with what passes for the best, or at least most extensive and expensive intelligence operation on the planet, with all those satellites and drones and surveillance sweeps and sources, with crowds of analysts, hordes of private contractors, and tens of billions of dollars, with, in short, “intelligence” galore, American officials in the area of their wars are evidently going to continue to find themselves eternally caught “off guard.”

The phrase “the fog of war” stands in for the inability of commanders to truly grasp what’s happening in the chaos that is any battlefield.  Perhaps it’s time to introduce a companion phrase: the fog of intelligence.  It hardly matters whether those 1,500 CENTCOM analysts (and all those at other commands or at the 17 major intelligence outfits) produce superlative “intelligence” that then descends into the fog of leadership, or whether any bureaucratic conglomeration of “analysts,” drowning in secret information and the protocols that go with it, is going to add up to a giant fog machine.

It’s difficult enough, of course, to peer into the future, to imagine what’s coming, especially in distant, alien lands.  Cobble that basic problem together with an overwhelming data stream and groupthink, then fit it all inside the constrained mindsets of Washington and the Pentagon, and you have a formula for producing the fog of intelligence and so for seldom being “on guard” when it comes to much of anything.

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There are two (2) activities that contradict each othet:

1. Extension and strengthening the Pax Americana
2. Elimination of challenges to the Pax Americana

The first activity requires the complete acceptance of the ideology behind Pax Americana, while the second requires understanding why anyone would want to reject it.

As the system comes under increased stress, the emphasis is placed upon the first at the expense of the second. Thus, the adherents of the system are continually surprised by events.

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Sarah Lazare: Thanks to Sanders, Democratic Party Just Debated Capitalism

Sarah Lazare writes that Thanks to Sanders, Democratic Party Just Debated Capitalism.

Breaking the usual parameters of election season discourse, Democratic presidential hopefuls Tuesday night debated the merits of capitalism on the national stage—a development that many attribute to the candidacy of self-described socialist U.S. Senator Bernie Sanders and rising inequality and discontent.

When CNN‘s Anderson Cooper asked Sanders whether he considers himself a capitalist, the Vermont Senator replied: “Do I consider myself part of the casino capitalist process by which so few have so much and so many have so little, by which Wall Street’s greed and recklessness wrecked this economy? No, I don’t.”

“I believe in a society where all people do well,” he continued, “not just a handful of billionaires.”

Cooper then asked the panel: “Is there anybody else on the stage who is not a capitalist?”

Former Secretary of State Hillary Clinton responded with a vague defense of the capitalist system.

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The Capitalists have been weakened by years of not having to defend Capitalism. The Capitalist apologists were more robust back in the 1960's.

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Chris Dillow: More Than Keynesianism

Chris Dillow writes that there is More Than Keynesianism to Socialism.

One reason for this is simply that it does little to address what socialists regard as key defects of capitalism—its tendencies towards inequality and alienation. Danny's right to say that Keynesianism was a way of saving capitalism, not abolishing it.  Sure, full employment can help ameliorate these evils by increasing workers' bargaining power. But as Kalecki famously said, full employment is not sustainable within capitalism.

A second reason—which is more pressing today than for years—is that mere counter-cyclical policy does little to increase long-term trend growth; sure it might do so by reducing the fear of recession and thus improving animal spirits, but it's also possible (pdf) that stabilization policy dampens it. Combating the threat of secular stagnation requires more than counter-cyclical policy. Keynesianism in its alternative sense of socializing investment might be part of the answer here—and in fairness this is what Corbynomics is. But only part. There's also a need for policies to raise productivity—and these might require measures to reduce inequality and increase worker ownership.

But there's a further reason why Keynesianism is not enough. Counter-cyclical fiscal policy is insufficient to fight recessions simply because recessions are unpredictable and so we cannot rely upon even a government of intelligence and goodwill to loosen policy at the right time. Anti-recessionary policy requires other institutions. These might include: nationalizing banks to prevent destabilizing credit cycles; a generous welfare state (citizens income!) to act as an automatic stabilizer; and/or Shiller-style insurance markets.

I say all this partly to answer Danny's accusation that socialism is "hazy". Lenin defined communism as "Soviet power plus electrification": I'd define socialism as citizens income plus worker ownership and control.

But I'm also speaking to the left here. It's not enough to be "anti-austerity", and certainly not enough to simply want to shift austerity onto companies and the rich—not least because pre-tax inequality matters too. Good counter-cyclical policy should of course be part of intelligent leftism. But it can only be part.

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We have a lot of work to get ordinary workers to understand this.

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Andrew J. Bacevich: Vietnamization 2.0

Andrew J. Bacevich examines Vietnamization 2.0.

Concealed within that oft-cited “freedom” — the all-purpose justification for deploying American power — were several shades of meaning. The term, in fact, requires decoding. Yet within the upper reaches of the American national security apparatus, one definition takes precedence over all others. In Washington, freedom has become a euphemism for dominion. Spreading freedom means positioning the United States to call the shots. Seen in this context, Washington’s expected victories in both Afghanistan and Iraq were meant to affirm and broaden its preeminence by incorporating large parts of the Islamic world into the American imperium.They would benefit, of course, but to an even greater extent, so would we.

Alas, liberating Afghans and Iraqis turned out to be a tad more complicated than the architects of Bush’s freedom (or dominion) agenda anticipated. Well before Barack Obama succeeded Bush in January 2009, few observers — apart from a handful of ideologues and militarists — clung to the fairy tale of U.S. military might whipping the Greater Middle East into shape. Brutally but efficiently, war had educated the educable. As for the uneducable, they persisted in taking their cues from Fox News and the Weekly Standard.

Yet if the strategy of transformation via invasion and “nation building” had failed, there was a fallback position that seemed to be dictated by the logic of events. Together, Bush and Obama would lower expectations as to what the United States was going to achieve, even as they imposed new demands on the U.S. military, America’s go-to outfit in foreign policy, to get on with the job.

Rather than midwifing fundamental political and cultural change, the Pentagon was instead ordered to ramp up its already gargantuan efforts to create local militaries (and police forces) capable of maintaining order and national unity. President Bush provided a concise formulation of the new strategy: “As the Iraqis stand up, we will stand down.” Under Obama, after his own stab at a “surge,” the dictum applied to Afghanistan as well. Nation-building had flopped. Building armies and police forces able to keep a lid on things now became the prevailing definition of success.

The United States had, of course, attempted this approach once before, with unhappy results. This was in Vietnam. There, efforts to destroy North Vietnamese and Viet Cong forces intent on unifying their divided country had exhausted both the U.S. military and the patience of the American people. Responding to the logic of events, Presidents Lyndon Johnson and Richard Nixon had a tacitly agreed upon fallback position. As the prospects of American forces successfully eliminating threats to South Vietnamese security faded, the training and equipping of the South Vietnamese to defend themselves became priority number one.

Dubbed “Vietnamization,” this enterprise ended in abject failure with the fall of Saigon in 1975. Yet that failure raised important questions to which members of the national security elite might have attended: Given a weak state with dubious legitimacy, how feasible is it to expect outsiders to invest indigenous forces with genuine fighting power? How do differences in culture or history or religion affect the prospects for doing so? Can skill ever make up for a deficit of will? Can hardware replace cohesion? Above all, if tasked with giving some version of Vietnamization another go, what did U.S. forces need to do differently to ensure a different result?

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The double-speak of the political elites conceals the hegemonic ambitions of USA. The logic of Capitalism requires a public persona of political equality and freedom while needing restricted decision making and control over public opinion.

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Seth Godin: Peak Mac

Seth Godin predicts Peak Mac.

One reason for peaking turns out to be success.

Success means more employees, more meetings and more compromise. Success means more pressure to expand the market base and to broaden the appeal to get there. Success means that stubborn visionaries are pushed aside by profit-maximizing managers.

…

Mostly, a brand's products begin to peak when no one seems to care. Sure, the organization ostensibly cares, but great tools and products and work require a person to care in an apparently unreasonable way.

…

The best strategy for a growing organization is to have insiders be the ones calling it. Insiders speaking up and speaking out on behalf of the users that are already customers, not merely the ones you're hoping to acquire.

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What Godin overlooks is that Capitalism alienates the worker from the product of their labour. The worker does not own the product that they laboured to produced. The Capitalist owns it instead.

As long as ownership is vested in the Capitalist, the worker has no emotional investment in the product.

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