Lose Your House, Collect $300

Ted Rall wonders why Why Aren’t Rioters Burning Down the Banks? in Lose Your House, Collect $300.

Rall reports that:

The foreclosure scandal helped spark the Occupy Wall Street movement.

Promising justice and compensation for the victims, President Obama’s Justice Department joined lawsuits filed by the attorneys general of several states.

Last year, Obama announced that the government had concluded a “landmark settlement” with the banks that would “deliver some measure of justice for those families that have been victims of their abusive practices.” The Politico newspaper called the $26 billion deal “a big win for the White House.” $26 billion. Sounds impressive, right?

Rall calculates that were about five (5) million people affected by these illegal practices by the banks. Most will get between $150 and $300 on average (assuming an average of two (2) people per household). The average for the overall settlement is $1,000.

Rall asks:

Why aren’t those five million people stringing up bank execs from telephone poles? It’s gotta be the Paxil.

I suppose it is the trained passivity of Western Society. Even the Occupy movement was heavily influenced by the non-violence mantra. This is probably why it faded from the scene. There is only so much that non-violence can achieve.

The basic premise of the non-violence is that the system can change peacefully and incrementally. But no system can contradict its core philosophy, and survive.

For Capitalism, the capitalists' return of investment has to be protected. Banks invested in these mortgages, so they should get their money back. This settlement is a small price to pay to let enough anger out of the system so that the thievery can continue unabated.

Rall is really appalled at:

But what really gets me is the 53 families who are getting $125,000 payouts for losing homes they were 100% up to date on.

Rall should realise that the only property rights that matter in a Capitalist system are those of the Capitalists which the state has been realiably protecting. The cops were protecting the stock markets and banks, not the homes of the workers.

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Capitalism and Inequality: What the Right and the Left Get Wrong

Jerry Z. Muller writes about Capitalism and Inequality: What the Right and the Left Get Wrong in the March/April 2013 edition of Foreign Affairs.

Muller describes what the acceptable limits of the debate about inequality are:

Recent political debate in the United States and other advanced capitalist democracies has been dominated by two issues: the rise of economic inequality and the scale of government intervention to address it.

Muller seems to be in the managed Capitalism camp.

Muller explains the reason for inequality as:

Inequality is an inevitable product of capitalist activity, and expanding equality of opportunity only increases it — because some individuals and communities are simply better able than others to exploit the opportunities for development and advancement that capitalism affords. (p.30)

So, Muller thinks that failure to achieve is the individual's fault. This is an interesting approach to take, however, because Muller admits that inequality arises naturally in the Capitalism through the inequality of opportunities which individuals are ill-equiped to take advantage of.

Muller is clearly worried that this inequality will lead to mischief caused by those who fail to understand that they are the problem, not the system:

Despite what many on the right think, however, this is a problem for everybody, not just those who are doing poorly or those who are ideologically committed to egalitarianism — because if left unaddressed, rising inequality and economic insecurity can erode social order and generate a populist backlash against the capitalist system at large. (p.30)

What Muller wants is:

Contemporary capitalist politics need to accept that inequality and insecurity will continue to be the inevitable result of market operations and find ways to shield citizens from their consequences — while somehow still preserving the dynamism that produces capitalism's vast economic and cultural benefits in the first place. (p.31)

Emphasis Mine

In Muller's view, there is no longer need to pretend that Capitalism will eventually make everyone better off. That is a myth.

What Muller fails to realise is that such government intervention requires teh exapnsion of the tax base which the rich are resisting. Since the wealth is accumulating at the top end, this means that the tax base is actually shrinking. So, we have the need to increase the tax base to avoid unrest, while those who are in danger refuse to sacrifice more of their wealth to do so.

All we need now is for some silly bitch to say: Let them cake!

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Game of Thrones and Our Scheming Elites

Yves Smith reviews Game of Thrones and Our Scheming Elites.

Smith is reading the series of books for "The Game of Thrones" by Martin:

The perspective in Martin’s books is a medieval reflection of the world envisioned by neoclassical economics, of isolated individuals working for their own self interest. There’s no real community in war-torn Westros, but even before the struggle broke out, the court was a hotbed of plots, spying, and ambition. Given the way, say, the Ptolemys plotted against each other, this isn’t necessarily that far removed from the dynamics of some pre-modern courts. But this is the through line of the series, the juice that carries readers forward. And sadly, this seems to be the juice that drives the world we live in now.

Before you get cynical and say, that’s just the way it is, that’s simply not accurate. The current level of corruption and cynicism is hardly inevitable; it’s a social construct. Look at Linux, where developers collaborated to produce code, for no money, out of pride in craft. Victor Frankl, Holocaust survivor, therapist and author of Man’s Search for Meaning, would often start out by asking patients, “Why haven’t you killed yourself?” His experience was the things that people lived for were either people they loved or creative work (Lambert’s “Do what only you can do”). Similarly, psychology professor Mihaly Csikszentmihalyi, who has made a study of happiness, has concluded it comes through a state he calls flow, where one is deeply engrossed in an activity (for instance, the famed “zone” in sports).

The books and television series are all part of the ideological reproduction of Capitalism. It is necessary to educate humans to be self-centred so as to adjust them to the rampant individualism.

Communism allows people to develop themselves.

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Gradual institutional change

Dan Little investigates Gradual institutional change.

Little considers instiutions to have a degree of plasticity in that:

The basic idea of plasticity is that institutions and organizations are the product of various kinds of structured human action, and that they can change over time. So we shouldn't think of institutions as having fixed characteristics, or as though they were equilibrium systems that tend to return to their original states after perturbances. … And this approach makes plain the high degree of path-dependency that institutions display.

In other words, history explains institutions.

Little cites studies that:

The theory they offer of gradual institutional change is an actor-centered theory. Incremental change occurs as the result of the opportunistic and strategic choices made by a range of actors within the institution.

But one thing Little leaves out is how institutions collapse. What happens when the institution is unable to provide answers to the problems that it encounters?

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The Damaging Links Between Food, Fuel and Finance: A Growing Threat to Food Security

Yves Smith is worried about The Damaging Links Between Food, Fuel and Finance: A Growing Threat to Food Security.

Timothy Wise notes that the speculators are moving out of energy and into agricultural products because of the decreased volatilty in the former and the increase for the latter.

However, Wise also notes price movements between the stock market, oil, and commodity have become correlated over the past decade as deregulation has accelerated and energy companies began investing in biofuels.

The biggest losers have been the poor who see more and more of their income eaten up by price increases in foodstuffs. This has, in turn, created great political instability throughout the Third World.

The crisis in Capitalism has arisen because the profits can be more readily realised through speculation rather than through productive investment.

There are not that many technologies that are ready for investment. Green energy could be the exception.

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Margaret Thatcher is Dead, but Thatcherism Lives On

Baroness Thatcher is dead.

The heroine of the class war against the British working class is dead.

The brutalisation of British politics in a new age of Imperialism is her legacy.

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Mexico: Can worker-owners make a big factory run?

Jane Slaughter investigates Mexico: Can worker-owners make a big factory run?

Slaughter asks:

How does a workers' cooperative with 1050 members function? It’s hard enough for workers' ownership to succeed at any size, because any company that competes in a market is subject to the same cost-cutting rat race as a capitalist firm. Workers are impelled to hammer themselves and cut their own pay or be driven out of business. And most workers here have just a middle-school education.

Yet the TRADOC co-op translation: Democratic Workers of the West—is thriving. Enthusiastic worker-owners have modernised their plant, increasing productivity and quality through their skilled work. Those factors together with their admittedly low prices have made it possible for them to compete on the world market.

The workers have done away with foremen because they supervise themselves. The management of the plant is at three (3) levels:

1. “TRADOC holds a general assembly only twice a year, but that assembly holds veto power over important decisions such as selling assets, making investments and buying machinery.”
2. The day-to-day running is handled by an administrative council consisting of:
• Cooper Tyre of Findlay Ohio has four (4) members;
• TRADOC Co-op has three (3) members
3. A general manager who is not a member of the co-op.

Despite what Slaughter portrays, TRADOC is not really a worker-owned factory. The co-op is a minority shareholder with a capitalist firm as the majority shareholder.

Slaughter concludes that:

But once the co-op started: it’s a pleasure to relate that workers really do run a factory better than the bosses. Not only do they control the plant floor, with no need for overseers, they come up with ideas to improve production in both senses: more and better tyres, less scrap — but also fewer backbreaking jobs.

This the same experience as the FASINPAT Zanon plant in Argentina as reported in Argentine Factory Wins Legal Battle. However, the Mexican experience has not exposed the workers to the same political battles as seen in Argentina.

The Argentine experience is more interesting politically because the workers expropriated the property of the Capitalists. They had to be more politically conscious to do this. They were assisted in their struggle with the Capitalists by the local government. So, a true workers' movement has not been born yet. But the workers can reflect upon this experience.

It would be interesting to see how Pope Francis I interprets this Argentine experiences in his teachings.

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The Death of Peak Oil

The Oil Drum considers The Death of Peak Oil.

Although world-wide production was flat for several years leading to the news that "peak-oil" had been reached, changes in technology and inclusion of natural gas into production figures has changed that some what:

Let's start by taking a look at what happened to global oil production in the years since those two very different views were offered. Total world liquids production as reported by the EIA had reached 85.2 million barrels a day at the time Pickens issued his pronouncement. It briefly passed that level again in June 2006 and June 2008, though mostly was flat or down over 2005-2009 before resuming a modest and erratic climb since then. The most recent number (December 2012) was 89.3 million barrels a day, 4 mb/d higher than where it had been in May 2005, and 12 mb/d below the levels that Yergin had expected we'd be capable of by 2010.

But more than half of that 4 mb/d increase has come in the form of natural gas liquids-- which can't be used to make gasoline for your car-- and biofuels-- which require a significant energy input themselves to produce. If you look at just field production and lease condensate, the increase since May 2005 has only been 1.7 mb/d.

The biggest technological change has been using horizontal fracking:

The rush to judgment seems to be based on the remarkable recent success from using horizontal fracturing to extract oil from tighter rock formations. Here for example is a graph of production from the state of Texas, one of the areas experiencing the most dramatic growth in tight oil production. In 2012, Texas produced almost 2 million barrels each day, up 800,000 barrels a day from 2010.

I wonder if the horizontal fracturing used in the extraction of oil is as damaging as CSG fracking. The same concerns over earthquakes and contaimination of aquifiers would seem to be the same.

Farida Iqbal reveals in White paper reveals gas industry scared of global protests that enivornmental action is effective in stopping such practices.

The white paper accurately describes the methods that have made the movement so successful. It lists the four effective campaign strategies as “grassroots mobilisation, online and social media, direct action, and networking”.

…

The white paper describes the global diversity of the movement. Anti-fracking movements are driven by such varied concerns as the need to protect farmland, climate change, and a desire to protect local jobs.

Water, however, is a global issue. Around the world, anti-fracking movements are united by their concern for the amount of water extracted and the risk of water contamination.

We face a critical juncture in world history. Our industrial civilization is heavily dependent on oil for farming, transportation, and manufacturing. Yet, to continue economic growth, we must contaiminate our water supply and imperil the climate. The question is no longer about standards of living but of human survival.

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Noisy bigots drown out silent bias

Waleed Aly observes that Noisy bigots drown out silent bias.

Aly writes that:

No, our real problem is the subterranean racism that goes largely unremarked upon and that we seem unable even to detect. Like the racism revealed by an Australian National University study, which found you are significantly less likely to get a job interview if you have a non-European name. The researchers sent fake CVs in response to job advertisements, changing only the name of the applicant. It turns out that if your surname is Chinese, you have to apply for 68 per cent more jobs to get the same number of interviews as an Anglo-Australian. If you are Middle Eastern, it's 64 per cent. If you are indigenous, 35 per cent.

This is the polite racism of the educated middle class. It's not as shocking as the viral racist tirades we've seen lately. No doubt the human resources managers behind these statistics would be genuinely appalled by such acts of brazen, overt racism. Indeed, they probably enforce racial discrimination rules in their workplace and are proud to do so. Nonetheless, theirs is surely a more devastating, enduring racism. There is no event to film, just the daily, invisible operation of a silent, pervasive prejudice. It does not get called out. It's just the way things are; a structure of society.

Emphasis Mine

Malcolm X is reported to have once said that he would rather talk to a red-neck racist than to a liberal because the former is racist to your face, while the latter is racist behind your back. He is reported to have said that you cannot have Capitalism without racism.

The Capitalist needs racism to divide the international working class, and to justify the daily atrocities that it commits through stravation, war, poverty, prisons, and lack of medical care.

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Supply Chain Problems Hitting Hospitals Near You

Yves Smith reports that Supply Chain Problems Hitting Hospitals Near You.

Smith argues that cost-cutting by drug companies have put public-health at risk by reducing inventory costs and keeping demand high:

The reason that it might seem OK to squeeze hospitals is precisely that it’s hard to point a finger at the drug companies. But notice the comment that these shortages can affect people in ICUs. It’s not hard to imagine a hospital having to ration limited supplies, say if some sort of disaster (big explosion, natural disaster) led hospitals in an area to have a flood of emergency room patients.

This looks like a case where the invisible hand of the market leads to a decrease in the well-being of the community.

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Russia: An oligarch’s mistake, an oligarch’s fate

Boris Kagarlitsky writes an obituary for Boris Abramovich Berezovsky who died in London on March 23, 2013 in Russia: An oligarch’s mistake, an oligarch’s fate.

Berevovsky's tragedy was a failure to accept the constraints of capitalist rule in a dependent country:

Most of the oligarchs of the 1990s understood and accepted the new rules, at times helping to draw them up. Berezovsky, however, could not adapt his personal nature to the new regime, and it was this, far more than his political disagreements with President Putin, that sealed his downfall. Worst of all, once the Russian oligarch had arrived in that very same West which he had sincerely viewed as a model and ideal, he turned out to be incapable of fitting in with life there – neither with political life, nor even with business. Unlike his pupil and rival Roman Abramovich, who assimilated perfectly the first rule of successful business – don’t stick your neck out unless you have to – Berezovsky was constantly coming out with one initiative or another, getting involved in political conflicts, declaring his ideas.

Despite a Marxist education, he failed to appreciate the class interests of the Capitalists is about stability for exploitation.

The capitalists live in fear of the masses, and thereby employ a superstructure to keep the masses in their place through docility, bribes, fear, and division. Stirring up the masses is a very dangerous activity.

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The problem of relative privilege in the working class

Chris Slee ponders The problem of relative privilege in the working class.

Slee dislikes the term, “labour aristocracy”, and prefers to use “relative privilege” instead. It is this relative privilege that is the source of division among workers:

Material inequalities between different groups of workers can contribute to conflict between them. Often one group of workers will try to defend their position of relative privilege against other workers who are perceived as threatening it.

Slee argues that, given the global nature of the production process, the government should nationalise any factory is threaten by being moved off-shore:

How should Australian unions react when companies threaten to close a factory in Australia and move production to another country (whether a Third World or another imperialist country)?

We should argue that it is the responsibility of the Australian government to ensure that there are jobs with good pay and conditions for all workers in Australia. This means the government should take over factories threatened with closure and run them as public enterprises, or else provide the sacked workers with alternative work. Public housing, public transport and renewable energy are some of the areas that governments should invest in and create jobs.

Slee proposes that workers should aim for the leveling up of wages for all workers around the world:

One of our long-term goals should be to reduce inequality between workers in different countries, by raising the living standards of those in poorer countries. Pay rates should be leveled up, not leveled down as the capitalists would like.

Slee concludes that:

The struggle between solidarity and the defence of relative privilege is part of the struggle for a socialist world.

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'Is the Demand for Skill Falling?'

Mark thoma notes a reference to 'Is the Demand for Skill Falling?'

The referenced paper suggests that:

…in response to this demand reversal, high-skilled workers have moved down the occupational ladder and have begun to perform jobs traditionally performed by lower-skilled workers. This de-skilling process, in turn, results in high-skilled workers pushing low-skilled workers even further down the occupational ladder and, to some degree, out of the labor force all together.

This would also run contrary to the narrative that people are not being hired because they are over-qualified.

If this conclusion is true, then we have:

• A stratum of disgruntled workers who are over-qualified for their current jobs and have a large student debt to pay off; and
• A stratum of disgruntled unemployed workers who are experiencing the harshness of being unemployed.

These conditions could lead to a revolt of some sort. It will probably be a fascist one if the first startum revolts first as more educated workers tend to lean towards the conservative end of the political spectrum.

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More on Devolution and the Walmartization of Our Economy

Yves Smith opines More on Devolution and the Walmartization of Our Economy.

Smith notes that Walmart has cut costs so much that they are losing customers because:

• Lines are too long at the checkout; and
• Products are not being stocked on the shelves.

These are all because there are too few employees per store.

The first problem can be overcome with automation through the use of self-checkout counters. But then there is the problem of customer fraud as they scan only some of their goods, or choose cheaper items from the look-up menus.

The second problem is more serious as stock has to be on the shelves in order for it to be sold. Even in Australia, it is not uncommon to see gaps on the shelves where popular products have sold out. Either you can switch brands, defer your purchase, or go elsewhere.

Once a company chooses a path of cost-cutting to achieve results, it is very hard for it to change its direction. Inertia in large organisations is just too great at times.

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Dear Rightwing Catholic Islamophobes: Pope Francis just washed the feet of a Poor Muslim

Juan Cole writes Dear Rightwing Catholic Islamophobes: Pope Francis just washed the feet of a Poor Muslim.

Pope Francis on Maundy Thursday declined to address enormous crowds. Instead he went to a prison to emulate Jesus’s act of humility before his crucifixion in washing the feet of his 12 disciples. The pope washed and kissed the feet of 12 inmates, two of them women and two of them Muslim (one of the women was Muslim). It is reported that some of the prisoners broke down in tears.

This pope is going to be different. But how different?

The pope is going to cause trouble for the conservatives:

These purveyors of hate speech against Muslims claim to be Catholics, and some of them are annoyingly Ultramontane, insisting on papal infallibility and trying to impose their values on all Americans.

Yet the person they hold to be the vicar of Christ has just given humankind a different charge, of humility and of service to the least in society, many of whom are Muslims.

It will be interesting to see how this pope advances the Catholic social teaching.

However, the main problem for the pope to overcome is to reconcile his actions during the dictatorship in Argentina. As Carlo Sands wrote recently:

Pope Francis is also heavily implicated in the crimes of Argentina's fascist junta — but as Jesus teaches, none of us are without sin. And, really, who among us can honestly say we have not kidnapped and tortured the odd priest?

The mainstream media coverage of world figures has sure been interesting of late. Apparently Pope Francis, who backed a dictatorship that slaughtered thousands, loves the poor. And Hugo Chavez, who redistributed wealth and lowered poverty, was a tyrant. The corporate press might not be much good at depicting reality, but at least its black-is-white message is consistent.

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Corporate Profitability

Mark Thoma notes the historic high levels of Corporate Profitability.

Economy built for profits not prosperity, by Lawrence Mishel, EPI: Newly released data on corporate profitability for 2012 show the continuation of historic levels of profitability despite excessive unemployment and stagnant wages for most workers. Specifically, the share of capital income (such as profits and interest, which are hereafter referred to as ‘profits’) in the corporate sector increased to 25.6 percent in 2012, the highest in any year since 1950-1951 and far higher than the 19.9 percent share prevailing over 1969-2007, the five business cycles preceding the financial crisis. …

Could the US economy be undergoing a fundamental change as it moves resources from Department II to Department I? If so, we should see a greater capital investment.

But the fundamental problem remains: the consumption can only be realised through wages and salaries. Since these, in total, are decreasing, then total consumption must fall as well. This means that profits must eventually decline as well.

Can an economy consist entirely of Department I?

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Michael Mann on power

Dan Little reviews Michael Mann on power.

Little describes Mann's model as follows:

One of the generalizing frameworks that he uses throughout all four volumes is what he refers to as the "IEMP model" of social power: ideological, economic, military, and political. He believes that these aspects of social reality are largely independent sets of institutions and processes, and they create different though complementary sources of power for individuals and groups within a given state of society. Here is the thumbnail he offers for each of these four high-level features of social power in Volume 3:

Ideological Power derives from the human need to find ultimate meaning in life, to share norms and values, and to participate in aesthetic and ritual practices with others. (V3, 6)

Economic Power derives from the human need to extract, transform, distribute, and consume the products of nature. Economic relations are powerful because they combine the intensive mobilization of labor with very extensive circuites of capital, trade, and production chains, providing a combination of intensive and extensive power and normally also of authoritative and diffused power. (V3, 8)

Military Power. Since writing my previous volumes, I have tightened up the definition of military power to "the social organization of concentrated and lethal violence." (V3, 10)

Political Power is the centralized and territorial regulation of social life. The basic function of government is the provision of order over this realm. (V3, 12)

In Marxist terms, economic power would refer to the control of the means of production. The state would encompass both military and political power. While the superstructure would include both the state and institutions of ideological power such as organised relgion, educational institutions, and the mass media.

The superstructure acts to protect the economic power of the ruling class. The material basis for these manisfestations of power is in the control of the means of production.

It is the division of society in classes that drives history. Mann is working at the edges, not at the centre which is class warfare.

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Gays and Lesbians: Sucked in by the Far Right

Ted Rall writes that Gays and Lesbians: Sucked in by the Far Right.

Rall opines that:

The sad truth is that the LGBT movement has abandoned its progressive roots. It has become a conservative movement.

Italics in original

Rall further argues that the LGBT used to challenge marriage, the nuclear family, and militarism:

Back in the 1970s, Michael Warner reminds us in his 1999 book “The Trouble with Normal,” gays weren’t trying to assimilate into the toxic “mainstream” cultures of monogamism and empire. Instead, they were pointing the way toward other ways of life.

The Socialist Alliance's policy on LGBTI says that:

We live in a society which attempts to dictate sexual preference and gender identity through promoting the gender stereotypes and homophobic attitudes which underpin the heterosexual nuclear family, and by promoting marriage and the nuclear family as the only legitimate model for relationships. Lesbians, gay men, bisexuals, trans people and intersex people suffer oppression because their lives are a challenge to the nuclear family which is an economic cornerstone of capitalism.

The policy on Marriage and Civil Unions says that:

In other countries civil unions have been offered to the LGBTI community to placate the movement for equal marriage rights. This is not the situation in Australia, where even civil unions have been suppressed by the federal government because they “mimic marriage”. It is for this reason that the Socialist Alliance supports civil unions but will continue the campaign for marriage . Civil unions are not a substitute for marriage rights.

Because of the opposition, gay marriage is a progressive issue in Australia. However, as the opposition disappears, and monogamy for LGBTI becomes acceptable, then Rall's arguments about moving the progressive focus back to issues of the mainstream becomes important. It is strange to think that the USA is more progressive than Australia on this issue.

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My Van, My Tardis, My Home

Trevor Brown writes about My Van, My Tardis, My Home (pp.18-19) in The Big Issue #428 (22-28 March 2103).

In this article, Brown laments the detrimental effects of the Occupy Movement on the homeless:

Ripples that spread out from various ‘Occupy’ movements over the past couple of years increased pressure on many of us on the streets. We came under increased attention from law-enforcement personnel who seemed intent on making sure we weren't an advanced guard for groups hoping to take up residence in the middle of cities. The homeless were found ‘guilty by association’; we were caught in the open ground between authorities and Occupiers. The pressure increased: I came under verbal attack by members of the public for the first time. Sadly, activities by the group only disenfranchised the very people they were trying to promote as worthy of help and support.

Emphasis Mine

The backlash against the Occupy Movement has rebounded on the homeless. It has drawn them into a political battle they do not want to be part of. They just want to be able to rejoin society.

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Studying entrepreneurship without doing it

Seth Godin takes a dim view of Studying entrepreneurship without doing it.

Likewise, it is impossible to be a revolutionary without facing the fear and discomfit of belonging to a revolutionary party.

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Why Does No One Speak of America’s Oligarchs?

Yves Smith asks Why Does No One Speak of America’s Oligarchs?

The current narrative about Cyprus portrays the country as a tax-havern for the Russian oligarchs. Smith challenges this narrative.

Smith asks:

…But see another implicit part of the story: that Russia’s oligarchs and “dirty money” are a distinctive national creation. Do you ever hear Carlos Slim or Rupert Murdoch or the Koch Brothers described as oligarchs? To dial the clock back a bit, how about Harold Geneen of ITT, which was widely known to conduct assassinations in Latin America if it couldn’t get its way by less thuggish means? (This is not mere rumor, I’ve had it confirmed by a former ITT executive).

Smith makes the point that the oligarchs in the USA are called elites instead. She writes that Simon Johnson clearly described in his important 2009 Atlantic article, The Quiet Coup, that American was in the hands of oligarchs:

Now Johnson carefully laid the bread crumbs, but so as not to violate the rules of power player discourse, pointedly switched from the banana republic term “oligarch” to the more genteel and encompassing label “elites” when talking about the US (“elites” goes beyond the controlling interests themselves to include their operatives as well as any independent opinion influencers). Yet despite his depiction of extensive parallels between the role played by oligarchs in emerging economies and the overwhelming influence of the financial elite in the US, there’s been a peculiar sanctimonious reluctance to apply the word oligarch to the members of America’s ruling class. Some of that is that we Americans idolize our rich, and the richer the better. No one looks too hard at the fact many of our billionaires started out with a leg up, parlaying a moderate family fortune (for instance, in the case of Donald Trump) into a bigger one, or having one’s success depend on other forms of family help (Bill Gates’ mother having the connection to an IBM executive that enabled Gates to license MS-DOS to them).

Smith concludes:

Confucius said that the beginning of wisdom was learning to call things by their proper names. The time is long past to kid ourselves about the nature of the ruling class in America and start describing it accurately, as an oligarchy.

But the question remains: how does an oligarchy arise from Capitalism?

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What is "critical" about critical realism?

Dan Little asks What is "critical" about critical realism?

Little lists three (3) elements of "critical" philosophy:

1. Critical thinking as emancipatory: This meaning is reflected in Marx's eleventh thesis on Feuerbach. "The philosophers have sought to understand the world; the point, however, is to change it."
2. Critique as illusion-destroying: Another dimension of the idea of criticism in the Marxist tradition is the idea of "critique" -- focused intellectual effort to uncover the implicit (and misleading) assumptions of various schemes of thought and policy.
3. Critique as self-creation: This involves the feature of "reflexiveness" that obtains in the social world. We constitute the social world, for better or worse. And the forms of knowing that we gain through the social sciences also give rise to forms of creating of new social forms -- again, for better or worse.

The third point is really a really a realisation of the maxim that the subjective influences the objective, and the objective influences the subjective.

In essence, we are to use critical realism to uncover the reality behind the scenes and change that reality for the betterment of humankind.

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Inequality, Evolution, & Complexity

Mark Thoma excerpts from Chris Dillow's post about 'Inequality, Evolution, & Complexity'.

The key question is:

Why has mainstream neoclassical economics traditionally had little to say about the causes and effects of inequality?

The real answer is that you don't bite the hand that feeds you. As Lenin says:

The task of a bourgeois professor is not to lay bare the entire mechanism, or to expose all the machinations of the bank monopolists, but rather to present them in a favourable light.

Imperialism: the highest stage of capitalism (p.52)

Anyway, the bourgeois professors think the problem is:

…that the blindness is inherent in the very structure of the discipline. If you think of representative agents maximizing utility in a competitive environment, inequality has nowhere to come from unless you impose it ad hoc…

Nice one, Capitalism! You have created a superstructure so effective that the wrong answers cannot be found as the question does not arise.

But no fast, the bourgeois professors think that by reverting to the original political use of the theory of evolution, they can come up with an answer:

…If we think of the economy as a complex (pdf) adaptive system…then inequality becomes a central feature. This is partly because such evolutionary processes inherently generate winners and losers, and partly because they ditch representative agents and so introduce lumpy granularity.

Emphasis Mine

So we are back where we were 150 years ago, the theory of evolution is being used to justify inequality.

But then, this leaves the Capitalists in a quandry: which system do they choose to build the superstructure on? Are they going with Creationism or with Evolution? Or are they going to reconcile the two?

I think reconciliation is out of the question because of the ongoing civil war within the Capitalist class for which the battle between Creationism and Evolution is a proxy.

Communists will have to side with Evolution because it is scientificly based, and leads to more progressive outcomes than does Creationism.

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Men Who Kick Down Doors: Tyrants at Home and Abroad

Ann Jones posts about Men Who Kick Down Doors: Tyrants at Home and Abroad.

Jones connects the dots between domestic violence and war-mongering:

It was John Stuart Mill, writing in the nineteenth century, who connected the dots between “domestic” and international violence. But he didn’t use our absurdly gender-neutral, pale gray term “domestic violence.” He called it “wife torture” or “atrocity,” and he recognized that torture and atrocity are much the same, no matter where they take place -- whether today in Guantanamo Bay, Cuba, Wardak Province, Afghanistan, or a bedroom or basement in Ohio. Arguing in 1869 against the subjection of women, Mill wrote that the Englishman’s habit of household tyranny and “wife torture” established the pattern and practice for his foreign policy. The tyrant at home becomes the tyrant at war. Home is the training ground for the big games played overseas.

The violence engender by the system is all-pervasise. You cannot eliminate the violence within the domestic sphere without eliminating the violence inherent in the system. The only way to eliminate inherent violence is to replace the system.

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John Pilger: The new propaganda is 'liberal'

John Pilger: The new propaganda is 'liberal'.

Of the world of blogging, tweeting, and social media, Pilger writes:

Edward Said described this wired state in Culture and Imperialism as taking imperialism where navies could never reach. It is the ultimate means of social control because it is voluntary, addictive and shrouded in illusions of personal freedom.

Today's “message” of grotesque inequality, social injustice and war is the propaganda of liberal democracies. By any measure of human behavior, this is extremism.

The conservatives are correct when they say that the mainstream media is liberal. But they misunderstand what the word 'liberal' means. They are led to believe that it means progressive and radical, whereas the meaning imparted by the capitalists is freedom for them to exploit others while hiding this exploitation.

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Us vs, us

Seth Gogin asks who wins in a game of Us vs. us.

For Communism to suceed, we need to raise our consciousness from the individualism that Capitalism that moulded us into, to a higher level:

When we steal or disrupt or game the system of a community we care about, we hurt everyone we say we're connected to, and thus hurt ourselves.

Communism requires a permanent revolutionary mindset:

Online communities are quick to form, but they're just as quick to fade, to become less open and to become less trusting because sometimes we have a cultural orientation toward taking, not giving. We forget to feed the network first, to take care of those we care about.

We have to throw away the profit motive for evaluating which choices to make:

Here's a possible standard: is it open, fair and good for others? If it's not, the community asks that you take your selfish antics somewhere else.

Godin concludes with:

Call me naive, but I think it's possible (and likely) that the digital tribes we're forming are going to actually change things for the better. But not until we embrace the fact that we are us.

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Mechanisms of racial disparities

Dan Little describes some Mechanisms of racial disparities.

Little's conclusion is:

In short, there seem to be a great number of mechanisms of racial differentiation that are at work in American society that don't generally presuppose explicit racial antagonism, but that work to channel black individuals into worse outcomes than their white counterparts. These are structural factors that the population faces, not personal factors; and they have pronounced effects when it comes to generating racial disparities in a number of crucial social dimensions.

These mechanisms include:

• The provision of essential social services, like education, health care, and public transport, by local government.
• The access to health care is also tied to employment.

• Actual racial prejudice in hiring practices

Since local governments are heavily depenendent on the local tax base in US society, the quality of public services varies greatly depending on the locale. Racial differentiation leads to economic differentiation which leads to differentiation in the provision of these public services.

The lack of public transport means people are trapped within their locale. Thus, they have limited chances of employment, and therefore access to health care.

Poor public services means poor education which, in turns, leads to reduced job oppportunities.

Even if they manage to overcome all of this, they still face discrimination during the hiring process.

So, racism has a structural basis in tying public services to local government and health care to jobs. But, there is still racial prejudice to stop anyone escaping those traps.

As Malcolm X said, "You cannot have Capitalism without Racism!"

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Communication is a path, not an event

Seth Godin says that Communication is a path, not an event.

Communication for revolutionaries occurs at many levels:

• Propaganda
• Slogans
• Agitation
• Mass rallies

Propaganda is what Godin would say is a waste of time if it is used wrongly. It is unidirectional communication, but the purpose should be:

Don't sell us anything but the burning desire to follow up. The point of his talk wasn't to get a new customer (impossible), nor was it to get through the talk and get it over with (silly and selfish). No, the point of the talk should have been to open the door to have a better, individual conversation soon.

This individual communication is what is known as agitation. It is the dialogue between the cadre and the public on at the personal level. It is at this level that recruitment into the party takes place.

The slogans are short, precise communications that allow the party to quickly get feedback about the public is prepared to mobilise around. The effect of these slogans is measured directly at the mass rallies.

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Remembering Rachel Corrie, 10 Years Later

Juan Cole Remembering Rachel Corrie, 10 Years Later.

Supporters of Greater Israel succeeded in having the performance of a play based on her life cancelled in New York, but it has gone on to play elsewhere, and she and her legacy have not been erased, as the extreme nationalists would have liked. In some ways the controversy over the play led to the founding of the influential blog Mondoweiss, which has done much to create spaces in which hard line Jewish nationalism can be critiqued.

Emphasis in original

To remember is to resist.

Meminisse resistere.

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Oz the Great and Powerful

The movie, "Oz the Great and Powerful", is a propaganda film that extols:

• The usual Disney myth of the correlation between beauty and goodness;
• The capitalist hero myth;

The younger sister, Theodora, prefers to keep her ugliness as a manifestation of the hate she feels inside.

The eldest sister, Evanora, does not have a political program to explain her rule. Why did she overthrow her father? Why did she think she was a better ruler of Oz than her father.

Her political program of control is profess the myth of a liberator, while portraying herself as the defender of Oz.

She has the caste of flying monkeys to terrorise the countryside. She has an official enemy to blame all of the acts of terror on. Thus, she would justify her rule as protector against the terror she creates in the chaos after the death of her father.

I would have to assume that she wanted power and wealth for herself. Terror is a means to an end.

The younger sister believes the propaganda. It is only when Oz betrays her that is converted to the dark side, as it were.

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Bankistan Vanquishes America

Barry Ritholtz watches as Bankistan Vanquishes America and issues a call to arms to liberate America. Wolverines!.

Ritholtz still has not caught with Lenin's idea that Imperialism: the highest stage of capitalism. Of particular interest, chapter 3 "Finance Capital and Financial Oligarchy" has the quotes:

It is characteristic of capitalism in general that the ownership of capital is separated from the application of capital to production, that money capital is separated from industrial or productive capital, and that the rentier, who lives entirely on income obtained from money capital, is separated from the entrepreneur and from all who are directly concerned in the management of capital. Imperialism, or the domination of finance capital, is that highest stage of capitalism in which this separation reaches vast proportions.

(Kindle Location 929-932)

And, the big four (4) countries were, prior to the First World War, Great Britain, United States, France, and Germany.

Together, these four countries own 479,000,000,000 francs, that is, nearly 80 per cent of the world’s finance capital. Thus, in one way or another, nearly the whole world is more or less the debtor to and tributary of these four international banker countries, the four ‘pillars’ of world finance capital.

(Kindle Location 954-956)

One hundred years later, the only thing that has changed is the ordering at the top. Lenin wrote:

Thus, the beginning of the twentieth century marks the turning point from the old capitalism to the new, from the domination of capital in general to the domination of finance capital.

(Kindle Location 707-709)

Does Ritholtz really think that financial capitalism is a recent innovation? If he does, then the ideological state apparatus has been extraordinarially effective. Lenin writes that:

The task of a bourgeois professor is not to lay bare the entire mechanism, or to expose all the machinations of the bank monopolists, but rather to present them in a favourable light.

(p.52)

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"You've got ping, but they've got no pong"

Seth Godin ponders what to do when "You've got ping, but they've got no pong".

You can take a great deal of responsibility for creating this mutual enthusiasm, and you can put the effort into creating an environment and a story where it's likely to happen.

Connection requires energy and insight and enthusiasm from both sides, and if your partner isn't responding, look hard at why. Of course, if you can't bring your half, stay home.

This is an interesting problem for revolutionaries. New recruits have lots of enthusiasm and ideas, but the daily grind of facing apathy and hostility wears them down.

Enthusiasm is cheap, commitment is expensive. It is in the interest of the ruling elites to keep it so.

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2 Year Anniversary of Fukushima

Barry Ritholtz posts on the 2 Year Anniversary of Fukushima.

The list of articles presented is disturbing. Nuclear power is so bloody dangerous.

The article concludes:

We don’t mean to pick on Japan. After all, the American government is dictating nuclear policy in Japan. American reactors are even more dangerous than Fukushima. And a secret report confirms that Southern California Edison knew of major problems at the San Onofre nuclear plant… but let the slipshod expansion and remodeling project continue anyway.

As the article, United States: A Fukushima-style disaster is waiting to happen, notes:

The US is just as likely to see a devastating “perfect storm” as Japan.

Another claim is that US nuclear regulators are much more stringent than Japan. But that rings hollow in the face of the facts.

A 2010 study of nuclear plant safety by the Union of Concerned Scientists (UCS) found US plants experienced at least 14 “near misses” last year. The report overview explained that “many of these significant events occurred because reactor owners, and often the NRC, tolerated known safety problems”.

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The four corporate industries that rule Australia

The four corporate industries that rule Australia are:

1. Mining
2. Banking
3. Superannuation
4. Gambling

These four (4) industries are able to direct government policy at all levels through campaign donations, media campaigns, and threats to withold investments.

The only really productive industry is the first: mining. Banking and superannuation are financial capitalists. While the last (gambling) is just a parasite—it adds no real value to the Australian economy.

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A Disgusting TV Ad in Favor of Gay Marriage

Ted Rall is against A Disgusting TV Ad in Favor of Gay Marriage.

Rall argues for the abolition of marriage as it …causes untold misery and reinforces outmoded systems of patriarchy, hierarchy and capitalism.

But more importantly, [o]ppressed peoples should support one another rather than rely on the oppressors to grant rights to one section of the oppressed.

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The Bolsheviks and the Soviets

Chapter 35 of History of the Russian Revolution by Leon Trotsky covers The Bolsheviks and the Soviets.

In this chapter, Trotsky explains the shifting focus on the slogan, All Power to the Soviets!.

Although the soviets of the soldiers and the workers were set up in 1905 and again in 1917 as the expressions of popular will, Trotsky contends they lagged behind the masses in the expression of the popular will. This was most clearly seen in the July Days when the soviets came out against the people's uprising.

Lenin's argument was to move the focus of Bolshevik political activity closer to the worker and the soldier. It was only on this basis that an insurrection could suceed.

The soviets had been captured by the Compromisers for the Capitalists, and so, had to be fought against.

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What became of Detroit?

Dan Little asks What became of Detroit?

Little thinks that White racism is the root cause:

If I had to single out a single fact out of this complicated story as the most important factor that led to these toxic changes, I would identify the mechanisms of racial residential segregation that Detroit has embodied for almost a century. For decades Eight Mile represented a key racial division in the city, and a plethora of mechanisms of exclusion conspired to maintain this division. If the city could have settled into a racially and economically mixed pattern of residence in the 1940s, much of this story would have been different. Population exit would not have reached crisis proportions; businesses would have been less likely to relocate out of the city; and a schooling system that was very successful in the 1950s could have maintained its effectiveness. This implies that Detroit is victim to the continuing tragedy of America's inability to heal its racial divisions and antagonisms.

Emphasis Mine

And yet, Little ignores the vital role racism plays in Capitalism. This role is that of control. Racism is control both blacks and whites in order to make them fearful of each other.

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De-escalation

Seth Godin promotes De-escalation .

There are revolutionaries who want the big finish of the General Strike, the barricades, the storming of the Winter Palace:

The goal then is to create tension, to escalate need, to amplify conflict until action is taken. Escalation causes us to commit to our original need, by reinforcing it.

The cultural norm is always to sharpen the conflict.

Godin proposes:

De-escalation creates connection, not commitment to previously made choices. It trades the short-term battle for the long-term relationship.

Taking our time and letting air in (and heat to escape) might be precisely the best way to build the relationships we need for the long run. It leads to better decisions, less shrapnel and work that truly matters, without regret.

An interesting idea of building Socialism quietly through relationships, instead of conflicts.

It is always tempting to avoid conflicts especially in light of the state's prepondernace of force and brutality. This would leave the workers defenceless against attacks.

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Hugo Chavez, undefeated! Why the rich and powerful hated Chavez

Hugo Chavez, undefeated! Why the rich and powerful hated Chavez.

The rich and powerful of the world did not hate Chavez because he was a dictator. Deep down the sentient among them know he wasn't.

They hated him because he was symbolic of a threat to the dictatorship of Capital, a figurehead of a continent alive with social movements and millions of people conscious of their political power.

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Hugo Chavez presente!

Hugo Chavez presente! Hugo Chavez is dead.

Time will tell how deeply Socialism has taken in Venezuela. I think Chavez has done a good job of bringing prosperity to the poor of his country. Literacy and health has improved dramatically.

The Capitalist press screams "Dictator!" when he won 63% of the vote.

The prolonged period of dual power in Venezuela is going to wear people down.

In Venezuela and the Middle East after Chavez, Juan Cole criticises Chavez for:

The foreign policy of late Venezuelan leader Hugo Chavez imagined that socialism and anti-imperialism are the same thing, and that he could lead a new sort of socialist international. These considerations shaped his Middle East policy in ways that were contradictory and hypocritical.

In Chavez's defence, it could be said that Venezuela was a country under imperialist attack, and Chavez sought allies wherever he could find them.

The BBC posits Hugo Chavez: A divided and divisive legacy?.

He gave a voice and identity to the poor, not just at home but also on the international stage.

He was a determined advocate of South-South dialogue, building close relations with ideologically like-minded presidents across Latin America.

He raised the profile of Venezuela into that of an international player, forming alliances with anyone who opposed the US (Iran, North Korea, Libya under Muammar Gaddafi).

"Within his administration he gave opportunities to people who would never have had them otherwise," said political analyst Carlos Romero.

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Resisting the EduFactory: Education for liberation

Some reflections on Resisting the EduFactory: Education for liberation.

I think the key argument is:

Student activists fight austerity and restructuring not because they feel entitled to study, but because society benefits from spaces for free thought. The university can and should be a place that drives social knowledge and development, not just train cogs for the economy. Everyone should benefit from every new vaccine that is researched, every groundbreaking novel, or revolutionary idea that helps lead to a new more sustainable and democratic society.

Despite what vice-chancellors or advertising executives might say, the university is not a brand. The university is the space for society’s critical consciousness.

It is all about developing human beings. We cannot develop ourselves if are slaving at dreary jobs and are burden with unpaid labour such as childcare, housework, and caring for others.

Each human being deserves the right to be able to better themselves. We must have an economic and political system that allows this.

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Karl Marx (5)

Following on from my post on Karl Marx, I want to argue against the idea that automation has changed the way Capitalism works.

Since before Capitalism emerged from Feudalism, machines were part of the landscape. The machines automated simple tasks like hammering or weaving. These machines could be crafted by a tradesman.

As machines grew more complex with the addition of steam power, the Capitalist came into their own by supplying capital that was beyond the means of a single tradesman.

The expense of machines gave rise to the factory system to defray the cost.

Automation is a natural outcome of this trajectory of economic development. It is nothing new. It is not radical.

What is radical is the disappearnce of labourers from Department II.

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Karl Marx (4)

Following on from my post on Karl Marx, I want to argue against the idea that there is no longer any distinction between workers and owners.

This is the political philosophy of the ownership society. The idea was to get all people to become supporters of the Capitalism system through:

• Home ownership
• Share ownership

This is the basis of the claim that there is no longer any distinction between workers and owners. The argument is that everyone can become an owner by participating in the share and housing market.

This political philosophy started with Margaret Thatcher and Ronald Reagan. This was to garner political support for:

• Breaking up the uniosn
• Lowering taxes
• Reducing welfare

Unfortunately, this political philosophy fell afoul of the concentrating tendencies of Capitalism. Wealth accumulates into fewer and fewer hands. This is one of the laws of motion of Capitalism.

This was demonstrated time after time with the share market crashes of 1987, 2000, and 2008. There was the Savings and Loans crisis (and the building society crisis) of the 1980's, and the Great Financial crisis of 2008.

Capitalism cannot, by itself, extend the ownership class. More and more people must be reduced from owners to workers.

The politcal nature of Capitalism means that the ruling elite must become smaller and smaller as Capitalism becomes more and more successful.

The owners are becoming workers, not the other way around.

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Karl Marx (3)

Following on from my post on Karl Marx, I want to argue against the idea that Capitalism will not fail because it has not failed yet.

Nassim Taleb would call this the “Turkey Problem”. It is the problem of predicting the future based on past behaviour. Tha turkey knows that the farmer has treated it well for the past few years. Based on that experience, the turkey can confidently predict that the farmer will continue to do so. This works until the farmer kills the turkey in order to sell to the meat processor.

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Karl Marx (2)

Following on from my post on Karl Marx, I want to argue against the idea that Capitalism is the only system that allows individuals to develop themselves.

In Capitalism, the only people who can develop their full potential are the Capitalists. They have the independent means to own the means of production. This gives them the freedom to develop themselves.

The workers, on the other hand, have their individuality crushed so as to be better integrated into the production process. What the boss says, goes.

Thus for everyone to be able to develop themselves, everyone has to own the means of production. This is the basis of Communism.

However, the productive forces has to be developed to such an extent that the people involved no longer have to be crushed to fit into the system.

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Karl Marx

Just watched a TV program about Karl Marx which is part of the Masters of Money TV series.

My problems with the program are:

• Capitalism is the only system that allows individuals to develop themselves
• Communism is all about enforced collectivism
• Capitalism will not fail because it has not failed yet
• Communism oppressed the workers
• There is no longer any distinction between workers and owners
• Automation has changed the way Capitalism works

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Friedrich Hayek (4)

Continuing my thoughts about Friedrich Hayek directly from my previous post here.

My third objection to the central thesis of Hayek is that the lack of understanding does not preclude intervention.

I think Hayek believes markets to be a natural phenomenon. I disagree with this idea of markets being natural. Markets are an artificial construction. Humans have constructed markets. They obey rules perculiar to humans.

Yet, the essence of Hayek's objection to government intervention in the workings of markets is that noone understands how markets work, and therefore any intervention is likely to be incorrect.

This seems to be an argument that academic knowledge is superior to practical knowledge and therefore must precede it. Nassim Talebi in his book, "Antifragility", argues strongly against this superiority of academic knowledge. He woild argue that practical knowledge is superior and precedes the emergence of acadamic knowledge.

Talebi seems to argue that intervention must be justified in that benefits must exceed the cost of doing nothing. Talebi's argument against intervention is based on cost-benefit analysis rather than ignorance in Hayek's argument. Talebi would argue that intervention would work under conditions of ignorance.

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Capitalism is so broken it can’t be fixed

Yves Smith points to Capitalism is so broken it can’t be fixed.

The amazing thing is this an article in the Wall Street Journal! Are Capitalists doubting Capitalism?

The question raised is:

This obsessive short-term thinking is capitalism’s biggest problem, and a huge one for America. But nobody wants to ask the hardest question of all: If capitalism is America’s core problem, why save capitalism?

But what is this Capitalism the article rails against? It would be that the idea of Capitalism is self-evident to the readers.

The author does not delve into what Capitalism is. Not like what Karl Marx did. In order to understand what Capitalism is, one must define it in its essentials. Marx said that the essence of Capitalism is the cycle of converting Money (M) into Commodities (C) which are converted to Money (M'). Hopefully, the quantity of Money (M) starting out is less than the quantity (M') ended up with. That is, a profit was realised as a result of the investment in the production of the commodity (C).

Once one has a definition of Capitalism, one can see that what people sees as problems in Capitalism is the result of what Capitalism. These problems are not caused by the improper implementation or having the wrong people involved.

The problems with Capitalism arise from the realisation of profit. A capitalist who makes a profit has more money and is therefore able to make greater profits in the next investment cycle. So, the wealth accrues to smaller and smaller fractions of the population. Inequality results from the natural functioning of Capitalism.

This rising inequality results in underconsumption by the rest of the population. They lack the means to purchase the commodities produced, so profits cannot be realised as readily. Thus, a bust follows. Hence the business cycle.

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Friedrich Hayek (3)

Continuing my thoughts about Friedrich Hayek directly from my previous post here.

There I asserted that markets are not optimal determiners of prices or demand.

Say that there a market of 100 people each with $1. And 90% want product A and the remainder want product B. So, the efficient allocation of investment would be 90% for production of A and 10% for production of B. In reality, nearly all investment would be for the production of A leading to an oversupply of A and a shortage of B.

Now assume that ten (10) people have $10 each, and the rest nothing. Of the ten (10), nine (9) want product B and one (1) wants product B. Of the rest, 81 wants A and nine (9) wants B. This is the same proportion of people who prefer product A or B as in the previous example. Now, the efficient allocation of investment is 90% for production of B, and 10% for A—a reversal of the previous example. In reality, we would get an oversupply of B and a shortage of A. This is contrary to the wishes of the population.

The disparity of wealth in the market leads to distortions in investment allocation.

Even if the market starts with equal distribution of wealth, disparities in wealth develop over time as the people who make more profitable investment decisions accumulate wealth at the expense of others.

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Fredrich Hayek (2)

Continuing my thoughts about Friedrich Hayek directly from my previous post here.

Five years ago, I made a more extensive comment at "Who’s Afraid of Friedrich Hayek?".

Yesterday, I asserted that governments serves the interests of the ruling class.

Hayek seemed to be saying that governments are a foreign element in the market economy. He says that it is the intervention of governments that inhibit the efficient working of markets. The origin of this inefficiency is the inability for anyone to completely understands how markets work.

Under Capitalism, the mythology is that the government sits in a Bonapartist position of mediating between competing interests. These interests are assumed to be between business, unions, and the public. In fact, the government mediates between factions of the Capitalist class. The relative strength of these factions determines the direction of government policy.

Any policies that seem to benefit persons outside of the Capitalist class are bribes to keep the non-Capitalists quiet.

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Friedrich Hayek

Some comments about Friedrich Hayek.

I have watched a TV program about Hayek. The gist of his ideas presented in that program is that the government should let the markets be free of all interference because the economy is too complicated to be understood fully.

Some of my objections to Hayek's central ideas are:

• Governments serves the interests of the ruling class.
• Markets are not optimal determiners of prices or demand.
• Lack of understanding does not preclude intervention.

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Is mathbabe a terrorist or a lazy hippy? (#OWS)

Cathy O'Neil asks if Is mathbabe a terrorist or a lazy hippy? (#OWS).

O'Neil contends that the Occupy Movement is “scary” because;

It’s our ideas that threaten, not our violence. We ignore the rules, when they oppress and when they make no sense and when they serve to entrench an already entrenched elite. And ignoring rules is sometimes more threatening than breaking them.

This setting aside of rules was part the ethos of the Occupy Movement which O'Neil says were:

• that we must overcome or even ignore structured and rigid rules to help one another at a human level,
• that we must connect directly with suffering and organically respond to it as we each know how to, depending on circumstances, and
• that moral and ethical responsibilities are just plain more important than rules.

It is interesting that the State had to respond with violence against the Occupy Movement. The system had run out of ideas to counter the movement. And, yet, this is not the first time the State has done this:

• The Civil Rights Movement (see Deacons for Defense).
• The Anti-War Movement of the 1960's and 1970's
• Rachel Corrie

In 2005, I had posted a table about four (4) non-violent protests with their outcomes in Trucker Blockades - One Day On. The interesting one for me has always been the Rosenstrasse protests which succeeded against the Nazi regime. But that protest was not a clash of ideas. The regime could live with the outcome.

The ideas raised by the Occupy Movement threaten the Capitalist system. Other ideas in the past did the same when the social conservatives sought to maintain the status quo. The Unhappy Marriage of Capitalism and Conservatism reflected on the tension between the political and economic forces within the Capitalist elite. In many times in the past, Capitalism has successfully absorbed these new progressive forces after trying to violently supress them.

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Of Flying Cars and the Declining Rate of Profit

Barry Ritholtz points via his 10 Friday AM Reads to the case “Of Flying Cars and the Declining Rate of Profit” by David Graeber in The Baffler.

Graeber wonders:

Where, in short, are the flying cars? Where are the force fields, tractor beams, teleportation pods, antigravity sleds, tricorders, immortality drugs, colonies on Mars, and all the other technological wonders any child growing up in the mid-to-late twentieth century assumed would exist by now? Even those inventions that seemed ready to emerge—like cloning or cryogenics—ended up betraying their lofty promises. What happened to them?

In contrast to The Unhappy Marriage of Capitalism and Conservatism, Graeber argues that the social conservative nature of Capitalism is holding back break=through innovations such as listed above. Instead, the Capitalists are providing incremental improvements as an illusion that Capitalism is a progressive force.

Defenders of capitalism make three broad historical claims: first, that it has fostered rapid scientific and technological growth; second, that however much it may throw enormous wealth to a small minority, it does so in such a way as to increase overall prosperity; third, that in doing so, it creates a more secure and democratic world for everyone. It is clear that capitalism is not doing any of these things any longer. In fact, many of its defenders are retreating from claiming that it is a good system and instead falling back on the claim that it is the only possible system—or, at least, the only possible system for a complex, technologically sophisticated society such as our own.

In other words, Capitalism is running out of ideas that keep the current social order while maintaining the impetus of historical changes that Capitalism has unleashed. The concentration of wealth means that the spread of ideas among the elite is restricted by the small numbers involved and their defensive attitude towards wealth retention. They do not want to rock the boat, yet they must fight off anyone who tries to climb aboard.

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Government & Big Banks Join Forces to Violently Crush Peaceful Protests

Barry Ritholz reposts an argument that Government & Big Banks Join Forces to Violently Crush Peaceful Protests is the manifestation of Fascism in the USA:

The definition of fascism used by Mussolini is the “merger of state and corporate power“. Government and the big banks are in a malignant, symbiotic relationship. And our economy now exhibits a merger of state and bank power.

This is a different definition from that given by Trotsky (see Fascism: What it is and how to fight it):

At the moment that the "normal" police and military resources of the bourgeois dictatorship, together with their parliamentary screens, no longer suffice to hold society in a state of equilibrium -- the turn of the fascist regime arrives. Through the fascist agency, capitalism sets in motion the masses of the crazed petty bourgeoisie and the bands of declassed and demoralized lumpenproletariat -- all the countless human beings whom finance capital itself has brought to desperation and frenzy.

The article reposted by Ritholtz indicates that the instruments of State oppression are still functioning to hold dissent in place by successfully crushing the Occupy movement.

Yet, as I argued in Proto-Fascism in the USA, Fascism could still arise if the Capitalist system fails the petite-bourgeoisie.

What is being described in this post is not Fascism, but merely the naked expression of state power in support of the Capitalist system. Fascism could still develop out of the Tea Party.

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The Unhappy Marriage of Capitalism and Conservatism

Barry Ritholtz's 10 New Year’s Eve Reads points to The Unhappy Marriage of Capitalism and Conservatism by Nancy Folbre who writes that:

The economic interests of capitalists (defined as those who earn most of their income from capital) are beginning to diverge significantly from the interests of social conservatives (defined as those who prefer traditional gender relations and oppose government efforts to promote racial and ethnic equality).

As recounted by Folbre, this has always been the case during the history of Capitalism. The social conservatives have always sought to defend their existing privileges gained through an earlier stage of Capitalism against those who have gained from economic changes. The political struggle has always been about the alignment of political power with economic reality.

Folbre lists three (3) areas where the conflict between conservatism and Capitalism has occurred:

1. One of the most beneficial consequences of a pattern of capitalist development shaped by political democracy was a growing demand for human capital that helped members of previously disempowered groups compete effectively for economic success and political leadership.
2. …the polarization of income itself reflects the evolution of a partly denationalized form of capitalism in which our largest companies create more jobs in other countries than at home and minimize their tax payments in overseas tax shelters.
3. …the role that the powerful banking sector played in the recession highlighted growing divisions within the business community.

I think Folbre misses the point that Capitalism is a dynamic system as opposed to slavery or Feudalism. By its very nature, Capitalism is always seeking new ways to make profits. Any Capitalist who becomes a conservative dooms themself.

It is this dynamic of Capitalism that has confounded Communists who followed the dictum that revolutions tend to occur when the political superstructure does not match the economic reality. The Communists had expected the revolutions to overthrow Capitalism, not sustain it as in the following crises:

• The growth in political power of the union movement through the rise of the Labour Parties in the late 19th and early 20th centuries;
• The extension of suffrage, in stages, to:
• All white men
• All white women
• All adults
• The creation of the welfare state as seen in 'A Conservative Case for the Welfare State'
• The Civil Right's Movement
• The Land Right's Movement
• The Women's Movement

All of these covulsions have been absorbed into the Capitalist system. The danger for the Capitalist system is when it is no longer willing to absorb these changes. Such changes that need to be absorbed are:

• Gay Marriage
• Refugee Rights
• Climate Change
• Third World Debt

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Why Next to No Political Reaction to the Second Gilded Age?

Mark Thoma comments on Why Next to No Political Reaction to the Second Gilded Age?, by Brad DeLong.

DeLong asks:

But the political economy of Gilded Ages? Why the first Gilded age produces a Populist and a Progressive reaction and the second, so far, does not? There I throw up my hands and say that my economic historian training betrays me. I have no clue as to what is going on here.

Thoma's response is:

I think it matters a lot whether we think of inequality as arising from a problem in the system as a whole, or as the result of individual failures. When people think it's the system as a whole — the rich and powerful are scheming to hold everyone else down (e.g. robber barons) — mass movements are more likely than when it is viewed as simply the failings of individuals.

I think both DeLong and Thoma miss several important points:

• The populist movements of the early 20th Century arose as a reaction to several trends:
• The great depression of the 1890's
• The rapid industrialisation of the USA from 1890 to 1930 as agriculture gave way to industry as the main employer
• Rise of Socialist thought (among which was Marxism and the various strands of Anarchism)
• The rapid growth and radicalisation of the union movement in response to these trends
• In the past 30 years, the union movement has been defeated again and again. The main defensive weapon of the workers is now in a much weaker state now than a century ago.
• In the 1930's, there was a serious alternative to the Capitalist system in the form of the USSR. Ideologically and economically, Communism was seen as superior to Capitalism especially during the Great Depression.
• The fall of the USSR has removed that alternative from the public consciousness.
• There have been several significant mass movements over the past 15 years:
• The Anti-Globalisation movements starting in Seattle in 1999.
• The Anti-War movements of 2003. (See 15 February 2003)
• The various Occupy movements starting in 2011.
• The Arab Spring starting in 2012

I think the populist movements alluded to be DeLong and Thoma were the last real chance of the Capitalist system to bribe the workers away from Communism. The advent of neo-liberalism has destroyed that project once and for all.

There is a political reaction to the second Gilded Age, but it is muted as the traditional expressions of popular will have been emasculated.

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The 12 Step Program for Recovery From Stupid Capitalism

Ted Rall offers his The 12 Step Program for Recovery From Stupid Capitalism.

Among his steps are:

6. Understand that radical change is usually impossible without revolutionary overthrow of the state and the destruction of the ruling class and the stupid capitalist system that sustains it.

7. Accept that revolutionary movements require a combination of nonviolent and violent tactics in order to have a chance of succeeding.

8. Make common cause with anyone and everyone opposed to the existing order, no matter how repugnant, because nothing else matters until we have emancipated ourselves.

Point #8 is problematic because, during a revolution, the situation is very fluid. Having the wrong ideas can lead one into a dead end which may be impossible to get out of.

Trotsky, in his History of the Russian Revolution re-iterates time and again that the revolutionary party must have the confidence of the revolutionary masses. The party can only gain that confidence by having:

1. Correct assessment of the situation;
2. Correct actions for the situation

The second depends on the first. The second is very difficult to achieve, and mistakes will be made. The important thing, however, is recover quickly from those mistakes.

In the Russian Revolutions of 1917, the Bolshevik Party initially failed in both cases. It had failed to assess the situation of the February Revolution correctly and thereby take the correct actions.

It was not until Lenin returned, and started agitation for a realignment that the Bolshevik Party started to make a correct assessment. This was not enough to gain the confidence of the revolutionary masses because the Party had failed to act correctly during the February Revolution.

This came to a head during the defeat of the July Days. The Party had finally gained the correct assessment, and came with a programme of action which was rejected by the revolutionary masses.

But, it was this defeat that started the long process of building confidence of the revolutionary masses in the Bolshevik Party and in itself. This process made the October Revolution possible.

I would have to reject Rall's point #8 in general, but we can use a weaker version called the United Front in which aims are shared, and general principles are agreed. It is not possible to for a Bolshevik type party to join forces with another party that espouses racist policies and actions. Although the aims may be similar, the versions of society we are trying to build are anathema to each other.

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Workers burn boss to death

Workers burn boss to death in India. The police say that the workers are quite open about admitting what they did.

The proximate reasons for these murders (of the boss and his wife) are given as:

• Police have reported the situation escalated when management asked some workers to leave their accommodation
• The bosses had allegedly taken church land
• The bosses were also accused of being rude, especially to the women
• One female worker said that They deserved to be killed as the planter has exploited us for a long time and tortured us for petty things.

Once again, the women lead the way in fighting back against oppression that is sexual and economic. This was also the case in the French and Russian Revolutions. Even the birth of the Roman Republic was said to originate in the backlash by the Roman populace against the sexual abuse by the Etuscan rulers.

What amazes me is how unafraid the workers are of the police. The workers were freely admitting what they had done. The instruments of state oppression are clearly not working to protect the scum of the Capitalist class.

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'A Conservative Case for the Welfare State'

Mark Thoma comments on A Conservative Case for the Welfare State, by Bruce Bartlett, Commentary, NY Times at 'A Conservative Case for the Welfare State'.

Thoma comments that:

If conservatives want to support the welfare state out of the desire to defend capitalism from "socialists and communists" -- to defend it against the instability that high degrees of inequality cause -- no problem, though it's interesting that they would acknowledge that the system itself can lead to societal inequities that are so dangerous the government needs to intervene to fix them.

Emphasis Mine

Thoma is pointing to the contradiction in the conservative's position. This is the realisation that there is a flaw in the capitalist model through its instability and inequality. Yet, Marx said that this is the fundamental law of Capitalism: Wealth concentrates naturally under Capitalism.

However, Bartlett contends that American conservatives are blind to this. They are fervent believers in the functioning of the market to solve all of societal ills despite having no empirical evidence that it does.

Yet, Bartlett does not examine the primacy source of wealth that underpins the welfare state of Western Europe — third world debt. This debt funnels wealth from the Third World in order to bribe the proletariat into accepting the current state of affairs. This is also the reason that debt forgiveness is never going to be achieved under Capitalism. The stability of the system is too dependent on the harsh exploitation of the rest of the world.

Thoma's own opinion on why government intervention is required is that:

I prefer the efficiency argument (which is not to say that the other argument has no merit, it does).

Here, Thoma sidesteps the political meaning of Government intervention by appealing to efiiciency. This is a neutral term to cover the brutal reality of the welfare state.

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