Category Archives: Economy/Economics

An Updated and Improved Marxism

It is the rare intellectual who can withstand the pressures of groupthink. This is a fundamental truth, or a truism, borne out not only by daily experiences in an academic or other “intellectual” context (e.g., the newsroom or editorial board of any establishment media outlet) but also by critical scholarship from the likes of Ed Herman and Noam Chomsky. Left-wing intellectuals tend to be vigilantly aware of irrational groupthink among mainstream, establishment types, or even among other leftist sects with which they don’t identify; but, like all intellectual cliques—indeed, like nearly all individual intellectuals—they’re reluctant to turn their critical gaze on themselves. They imbibe certain ideas and ideologies in their formative years and perhaps refine them as they mature, but on the whole their commitment to the ideology is apt to become rigid and uncritical.

This complacency has always most disturbed me with regard to Marxists, whose system of thought, if correctly formulated, is precisely the most critical, the most self-critical, the most democratic and revolutionary ideology ever devised. I expect intellectual laziness from mostpostmodernists,” from liberals and centrists, from all witting or unwitting servants of power. I’m disappointed, though, when I see it in Marxists and semi-Marxists. There’s a pronounced dogmatism in most Marxist circles. Personally, I’ve tried to stimulate some critical rethinking of Marxism in various publications, including my book Worker Cooperatives and Revolution: History and Possibilities in the United States and this distillation of some of its arguments (though disregard the editor’s oversimplified summary at the top of the page), but I haven’t had much success. These writings appear to have been ignored.

Which is unfortunate, because I’m convinced it’s necessary in the twenty-first century to revise the Marxian conception of revolution. Conditions have changed from what they were a hundred or a hundred and fifty years ago; Marx would likely be appalled by the lack of creative rethinking that has met these altered conditions. It’s an unfortunate situation when millions of activists across the world are struggling to build new modes of production, new modes of politics, and Marxist scholars and thinkers still confine themselves, more or less, to quoting staid formulations from the nineteenth and early twentieth centuries. (This fact, ironically, supports Marx’s argument that old ideologies tend to hang on doggedly even as changing material conditions make them progressively irrelevant.) Writers and ‘critical ideologists’ can play an important role in the laborious construction of a new society from the ground up, but instead they’re usually content with elaborating on old slogans about seizing the state or smashing it, establishing the dictatorship of the proletariat, creating a vanguard party, and so on.

An article that Jacobin recently published provides an example of this stubborn immersion in the past, as well as an opportunity to propose a more critical and up-to-date interpretation of revolution. The article in question is actually an essay by the famous British Marxist Ralph Miliband, entitled “Lenin’s The State and Revolution,” published in 1970. In itself it’s a perfectly respectable and sophisticated meditation on Lenin’s classic work, indeed counseling a proper critical attitude towards it. But the reposting of it on the website of a “cutting-edge” left-wing journal almost fifty years later highlights just how stagnant (in some respects) Marxist thinking continues to be, especially given the editorial comment with which Jacobin introduces the piece:

Marx famously proclaimed the need to “smash” the bourgeois state. But what does that mean in practice? If our aim is a democratic, non-bureaucratic socialism, what kind of state should we be striving for?

Those looking for answers have often turned to Lenin’s State and Revolution, where the famed revolutionary confidently speaks of transforming “a state of bureaucrats” into “a state of armed workers.”

In the following essay, Ralph Miliband…offers a critical appraisal of Lenin’s pamphlet and explains why “the exercise of socialist power remains the Achilles’ heel of Marxism.” …[T]he essay is still the sharpest reading of State and Revolution available.

The accuracy of this introduction is rather sad. In 2018 we’re still looking for inspiration to a brief critical analysis written in 1970 of a short work written in 1917—in completely different conditions than prevail today—that itself was but a commentary on sketchy ideas put forward in the mid-to-late-nineteenth century. (One can argue, moreover, that State and Revolution was intended as little more than cynical propaganda for the Bolshevik party, in light of its deviation from Lenin’s earlier party line and his later authoritarian practice.) Surely we can do better than this.

Miliband is still right, though, that “the exercise of socialist power remains the Achilles’ heel of Marxism.” This is true not only of practice but of theory—which is to say, as I’ve argued in my paper “The Significance and Shortcomings of Karl Marx,” that the concept of proletarian revolution is Marxism’s main weakness. In the rest of this article I’ll again summarize, very briefly, some of the points from my book, in the hope of shedding a little light on an old problem.

*****

The conceptual revisions I proposed in the book offer two main advantages: first, they bring the strategic or prescriptive aspect of Marxism up to date, incorporating the increasingly popular idea and practice of the “solidarity economy” (while simultaneously providing a systematic theoretical framework to interpret the latter’s potential); second, they correct certain inconsistencies and logical errors that Marx’s sketchy proposals on revolution introduced into the theory of historical materialism. That is, with my “revisions,” Marxism has been made more logically defensible and consistent with itself. And the road is cleared for even orthodox Marxists to engage creatively with the burgeoning alternative economy of cooperatives, public banks, and other experimental ideas/institutions.

We can start with Marx’s formulation of revolution in the following four sentences from the famous Preface to A Contribution to the Critique of Political Economy:

At a certain stage of development, the material productive forces of society come into conflict with the existing relations of production or—this merely expresses the same thing in legal terms—with the property relations within the framework of which they have operated hitherto. From forms of development of the productive forces these relations turn into their fetters. Then begins an era of social revolution. The changes in the economic foundation lead sooner or later to the transformation of the whole immense superstructure.

One problem with this classic statement is that its notion of “fettering” is meaningless. And nowhere else in his writings does Marx flesh it out with sufficient content. Capitalist production relations, especially in the last hundred years, are, in fact, constantly fettering the use and development of productive forces—and yet no post-capitalist revolution has happened. Recessions and depressions certainly “fetter” the productive forces; so do legal obstacles to the dissemination of knowledge, such as intellectual copyright laws; so do ideologies and practices of privatization, which hinder the public sector’s more socially rational and dynamic use of science and technology. On the other hand, even in decadent neoliberalism the productive forces continue to develop in various ways. So it seems wrong or meaningless to say that production relations fetter productive forces and then revolution breaks out.

A slight revision can remedy the problem, and at the same time changes the whole thrust of the Marxist theory of revolution. Rather than a conflict simply between production relations and the development of productive forces, there is a conflict between two types of production relationstwo modes of productionone of which uses productive forces in a more socially rational and “un-fettering” way than the other. The more progressive mode slowly develops in the womb of the old society as it decays; i.e., as the old dominant mode of production succumbs to crisis and stagnation. In being relatively dynamic and democratic, the emergent mode of production attracts adherents and resources, until it becomes ever more visible and powerful. The old regime can’t eradicate it; it spreads internationally and gradually transforms the economy, to such a point that the forms and content of politics change with it. Political entities become its partisans, and finally decisive seizures of power by representatives of the emergent mode of production become possible, because reactionary defenders of the old regime have lost their dominant command over resources. And so, over generations, a social revolution transpires.

This conceptual revision saves Marx’s intuition by giving it more meaning: the “fettering” is not absolute but is in relation to a more effective and democratic mode of production that is, so to speak, competing against the old stagnant one. The most obvious concrete instance of this notion of revolution is the long transition from feudalism to capitalism, during which the feudal mode became so hopelessly outgunned by the capitalist that—after the emergent economy had already broadly colonized society—bourgeois “seizures of the state” finally became possible.

You see that the simple conceptual revision I’ve proposed changes the Marxian theory from advocating a statist “dictatorship of the proletariat” to advocating a more grassroots, gradual, unambiguously democratic transformation of the economy that proceeds at the same time and to the degree that the old society deteriorates. This change of emphasis is itself an advantage, since the old overwhelmingly statist theory (notwithstanding Lenin’s semi-anarchistic language in State and Revolution) was idealistic, un-dialectical, and utopian. Which is to say un-Marxist.

In the orthodox account of the Communist Manifesto and later writings, the social revolution occurs after a seizure of state power by “the proletariat” (which, incidentally, isn’t a unitary entity but contains divisions). But this account of revolution contradicts the Marxian understanding of social dynamics—a point, oddly, that few or no Marxists appear ever to have appreciated. It exalts a relatively unitary conscious will as being able to plan social evolution more or less in advance, a notion that is utterly undialectical. According to “dialectics,” history happens behind the backs of historical actors, whose intentions never work out exactly as they’re supposed to. Marx was wise in his admonition that we should never trust the self-interpretations of political actors. And yet he suspends this injunction when it comes to the dictatorship of the proletariat: these people’s designs are supposed to work out perfectly and straightforwardly, despite the massive complexity and dialectical contradictions of society.

The statist idea of revolution is also wrong to privilege the political over the economic. In supposing that through sheer political will one can transform an authoritarian, exploitative economy into an emancipatory, democratic one, Marx and Lenin are, in effect, reversing the order of “dominant causality” such that politics determines the economy (whereas, in fact, the economy “determines”—loosely and broadly speaking—politics).1 Marxism itself suggests that the state can’t be socially creative in this radical way. And when it tries to be, what results, ironically, is overwhelming bureaucracy and even greater authoritarianism than before. (While the twentieth century’s experiences with so-called “Communism” or “state socialism” happened in relatively non-industrialized societies, not advanced capitalist ones as Marx anticipated, the dismal record is at least suggestive.)

Fundamental to these facts is that if the conquest of political power occurs in a still-capitalist economy, revolutionaries have to contend with the institutional legacies of capitalism: relations of coercion and domination condition everything the government does, and there is no way to break free of them. They can’t be magically transcended through political will; to think they can, or that the state can somehow “wither away” even as it’s forced to become more expansive and dominating (to suppress capitalist resistance), is to adopt a naïve idealism and utopianism.

In short, the interpretation of revolution that contemporary Marxists have inherited is backward. It is standing on its head; we have to turn it right-side up in order to comprehend our activism and our goals properly. Of course, this isn’t to deny the importance of engaging in political work, whether it takes the form of constructing a workers’ party, electing socialists under the aegis of the Democratic Party, or lobbying for particular laws. As during the transition from feudalism to capitalism, it’s essential to target the state at every step of the way. We simply have to recognize that a paramount strategy is to take advantage of openings and divisions in the capitalist state to politically facilitate the long-term construction of new relations of production, on the foundation of which the new society will gradually emerge. The revolution can’t happen in any other way. Certainly not through a historical rupture in which “the working class” dramatically seizes power, suppresses (somehow) all its opponents, and organizes a new economy on the basis of utopian blueprints. In the twenty-first century, any such ruptural conception, even if moderated by realism on some point or other, is astoundingly naïve.

The truth is that revolutionaries have to dig in for the long haul: a global transition to a post-capitalist society will take a century or more. Cooperative and socialized relations of production (in forms that it’s futile to predict at this point) will spread through generations of bitter struggle. Meanwhile, the conquest of political power will occur piecemeal—at different rates in different countries—suffering setbacks and then proceeding to new victories, then suffering more defeats, etc. It will be a time of world-agony, especially as climate change will be devastating civilization; but the sheer numbers of people whose interests will lie in a transcendence of capitalism will constitute a formidable weapon on the side of progress.

*****

As Chomsky has said on more than one occasion, the job of intellectuals, or one of their jobs, is to make simple things appear complicated. You’re supposed to think that in order to understand anything about the world, you have to be able to read and write long articles or books full of citations and arcane terminology and long discussions of other writers, delving into the intricacies of their arguments, minutely dissecting the meanings of their favored terms, spinning out paeans to verbiage like a crafty spider trying to snare the unwary. This is how intellectuals protect their territory and ward off democratic challenges to their status. But the truth is that old-fashioned commonsense reasoning can get you pretty far. It only takes a bit of reading and a bit of critical thought to find approximate answers to classic questions about the nature of society, the nature of a good society, and the revolutionary path to the latter. And, in fact, in the sociological domain, you’re never going to do much better than approximate answers. With interactions between billions of people to take into consideration, too little will always be understood.

So, to get back to the old question that Lenin and Miliband tackled: what does it mean to “smash” the bourgeois state? What kind of democratic state should we be striving for? Well, the notion of “smashing” the state is just a pithy metaphor that provides no guide to action. We should stop being bewitched by old and unhelpful imagery. In conditions very different from those that confronted Marx and Lenin, we should simply focus on the matters at hand rather than endlessly poring over what the god Lenin said. Keeping in our mind the Marxist and anarchist ideal of a stateless, non-coercive, economically democratic society, we should just do what we can to make the state we’re immediately confronted with more democratic and more just. We do what we can to expand democracy in the real world, and step by step we find ourselves approaching the distant moral ideal that guides us. It’s hopeless to try to spell out the ideal in detail. Marx understood this, which is why he was so reluctant to get bogged down in these kinds of questions, confining himself to some vague suggestions that, not surprisingly, turned out to be largely mistaken.

The task of Marxists now, aside from continuing to critically analyze society, is to rethink the old prescriptions and abandon tired formulations. In so doing, they’ll not only make themselves more relevant to the contemporary world, a world teeming with democratic and nonsectarian initiative; they’ll also, in effect, finally rid Marxism of its lingering traces of irrational dogma, internal inconsistency, and parochial nineteenth-century ideology. The system will at last have realized the old ambition of being a genuine science of society.

  1. In reality, of course, political and economic relations are fused together. But analytically one can distinguish economic activities from narrowly political, governmental activities.

India: The State of Independence

India celebrates its independence from Britain on 15 August. However, the system of British colonial dominance has been replaced by a new hegemony based on the systemic rule of transnational capital, enforced by global institutions like the World Bank and WTO. At the same time, global agribusiness corporations are stepping into the boots of the former East India Company.

The long-term goal of US capitalism has been to restructure indigenous agriculture across the world and tie it to an international system of trade underpinned by export-oriented mono-cropping, commodity production for the global market and debtThe result has been food surplus and food deficit areas, of which the latter have become dependent on agricultural imports and strings-attached aid.

Whether through IMF-World Bank structural adjustment programmes, as occurred in Africa, trade agreements like NAFTA and its impact on Mexico or, more generally, deregulated global trade rules, the outcome has been similar: the displacement of traditional, indigenous agriculture by a corporatized model centred on transnational agribusiness and the undermining of both regional and world food security. The global food regime is in effect increasingly beholden to unregulated global markets, financial speculators and global monopolies.

India, of course, has not been immune to this. It is on course to be subjugated by US state-corporate interests  and is heading towards environmental catastrophe much faster than many might think. As I outlined in this previous piece, the IMF and World Bank wants India to shift hundreds of millions out of agriculture and has been directed to dismantle its state-owned seed supply system, reduce subsidies and run down public agriculture institutions.

The plan for India involves the mass displacement of people to restructure agriculture for the benefit of western agricapital. This involves shifting at least 400 million from the countryside into cities. A 2016 UN report said that by 2030, Delhi’s population will be 37 million.

One of the report’s principal authors, Felix Creutzig, says:

The emerging mega-cities will rely increasingly on industrial-scale agricultural and supermarket chains, crowding out local food chains.

The drive is to entrench industrial agriculture, commercialise the countryside and to replace small-scale farming, the backbone of food production in India. It could mean hundreds of millions of former rural dwellers without any work (India is heading for ‘jobless growth’). Given the trajectory the country seems to be on, it does not take much to imagine a countryside with vast swathes of chemically-drenched monocrop fields containing genetically modified plants or soils rapidly degrading to become a mere repository for a chemical cocktail of proprietary biocides.

The plan is to displace the existing system of livelihood-sustaining smallholder agriculture with one dominated from seed to plate by transnational agribusiness and retail concerns. To facilitate this, independent cultivators are being bankrupted, land is to be amalgamated to facilitate large-scale industrial cultivation and those farmers that are left will be absorbed into corporate supply chains and squeezed as they work on contracts, the terms of which will be dictated by large agribusiness and chain retailers.

Some like to call this adopting a market-based approach: a system in the ‘market-driven’ US that receives a taxpayer farm bill subsidy of around $100 million annually.

The WTO and the US-India Knowledge Initiative on Agriculture are facilitating the process. To push the plan along, there is a strategy to make agriculture financially non-viable for India’s small farms. The result is that hundreds of thousands of farmers in India have taken their lives since 1997 and many more are experiencing economic distress or have left farming as a result of debt, a shift to cash crops and economic liberalisation.

The number of cultivators in India declined from 166 million to 146 million between 2004 and 2011. Some 6,700 left farming each day. Between 2015 and 2022 the number of cultivators is likely to decrease to around 127 million.

For all the discussion in India about loan waivers for farmers and raising their income levels, this does not address the core of the problem affecting agriculture: the running down of the sector for decades, spiralling input costs, lack of government assistance and the impacts of cheap, subsidised imports which depress farmers’ incomes.

Take the cultivation of pulses, for instance. According to a report in the Indian Express (September 2017), pulses production increased by 40% during the previous 12 months (a year of record production). At the same time, however, imports also rose resulting in black gram selling at 4,000 rupees per quintal (much less than during the previous 12 months). This has effectively driven down prices thereby reducing farmers’ already meagre incomes. We have already witnessed a running down of the indigenous edible oils sector thanks to Indonesian palm oil imports on the back of World Bank pressure to reduce tariffs (India was virtually self-sufficient in edible oils in the 1990s but now faces increasing import costs).

On the one hand, there is talk of India becoming food secure and self-sufficient; on the other, there is pressure from the richer nations for the Indian government to further reduce support given to farmers and open up to imports and ‘free’ trade. But this is based on hypocrisy.

Writing on the ‘Down to Earth’ website in late 2017, Sachin Kumar Jain states some 3.2 million people were engaged in agriculture in the US in 2015. The US govt provided them each with a subsidy of $7,860 on average. Japan provides a subsidy of $14,136 and New Zealand $2,623 to its farmers. In 2015, a British farmer earned $2,800 and $37,000 was added through subsidies. The Indian government provides on average a subsidy of $873 to farmers. However, between 2012 and 2014, India reduced the subsidy on agriculture by $3 billion.

According to policy analyst Devinder Sharma, subsidies provided to US wheat and rice farmers are more than the market worth of these two crops. He also notes that, per day, each cow in Europe receives subsidy worth more than an Indian farmer’s daily income.

How can the Indian farmer compete with an influx of artificially cheap imports? The simple answer is that s/he cannot and is not meant to.

In the book The Invention of Capitalism, Michael Perelmen lays bare the iron fist which whipped the English peasantry into a workforce willing to accept factory wage labour. A series of laws and measures served to force peasants off the land and deprive them of their productive means. In India, we are currently witnessing a headlong rush to facilitate (foreign) capital and turn farmers into a reserve army of cheap industrial/service sector labour. By moving people into cities, it seems India wants to emulate China: a US colonial outpost for manufacturing that has boosted corporate profits at the expense of US jobs. In India, migrants – stripped of their livelihoods in the countryside – are to become the new ‘serfs’ of the informal services and construction sectors or to be trained for low-level industrial jobs.

Even here, however, India might have missed the boat as it is not creating anything like the number of jobs required and the effects of automation and artificial intelligence are eradicating the need for human labour across many sectors.

India’s high GDP growth has been fuelled on the back of debt, environmental degradation, cheap food and the subsequent impoverishment of farmers. The gap between their income and the rest of the population, including public sector workers, has widened enormously to the point where rural India consumes less calories per head than it did 40 years ago.

Amartya Sen and former World Bank Chief Economist Kaushik Basu have argued that the bulk of India’s aggregate growth occurred through a disproportionate rise in the incomes at the upper end of the income ladder. Furthermore, Global Finance Integrity has shown that the outflow of illicit funds into foreign bank accounts has accelerated since opening up the economy to neoliberalism in the early nineties. ‘High net worth individuals’ (i.e. the very rich) are the biggest culprits here.

While corporations receive massive handouts and interest-free loans, they have failed to spur job creation; yet any proposed financial injections (or loan waivers) for agriculture (which would pale into insignificance compared to corporate subsidies/written off loans) are depicted as a drain on the economy.

Making India ‘business friendly’

PM Modi is on record as saying that India is now one of the most business-friendly countries in the world. The code for being ‘business friendly’ translates into a willingness by the government to facilitate much of the above, while reducing taxes and tariffs and allowing the acquisition of public assets via privatisation as well as instituting policy frameworks that work to the advantage of foreign corporations.

When the World Bank rates countries on their level of ‘ease of doing business’, it means national states facilitating policies that force working people to take part in a race to the bottom based on free market fundamentalism. The more ‘compliant’ national governments make their populations and regulations, the more ‘business friendly’ a country is.

The World Bank’s ‘Enabling the Business of Agriculture’ entails opening up markets to Western agribusiness and their fertilisers, pesticides, weedicides and patented seeds with farmers working to supply transnational corporations’ global supply chains. Rather than working towards food security based on food sovereignty and eradicating corruption, building storage facilities and dealing with inept bureaucracies and deficiencies in food logistics, the mantra is to let ‘the market’ intervene: a euphemism for letting powerful corporations take control; the very transnational corporations that receive massive taxpayer subsidies, manipulate markets, write trade agreements and institute a regime of intellectual property rights thereby indicating that the ‘free’ market only exists in the warped delusions of those who churn out clichés about letting the market decide.

Foreign direct investment is said to be good for jobs and good for business. But just how many get created is another matter – as is the amount of jobs destroyed in the first place to pave the way for the entry of foreign corporations. For example, Cargill sets up a food or seed processing plant that employs a few hundred people; but what about the agricultural jobs that were deliberately eradicated in the first place to import seeds or the village-level processors who were cynically put out of business via bogus health and safety measures so that Cargill could gain a financially lucrative foothold?

The process resembles what Michel Chossudovsky notes in his 1997 book about the ‘structural adjustment’ of African countries. In The Globalization of Poverty, he says that economies are:

opened up through the concurrent displacement of a pre-existing productive system. Small and medium-sized enterprises are pushed into bankruptcy or obliged to produce for a global distributor, state enterprises are privatised or closed down, independent agricultural producers are impoverished. (p.16)

The opening up of India to foreign capital is supported by rhetoric about increasing agricultural productivity, creating jobs and boosting GDP growth. But India is already self-sufficient in key staples and even where productivity is among the best in the world (as in Punjab) farmers still face massive financial distress. Clearly, productivity is not the problem: even with bumper harvests, the agrarian crisis persists.

India is looking to US corporations to ‘develop’ its food, retail and agriculture sectors. What could this mean for India? We only have to look at the business model that keeps these companies in profit in the US: an industrialised system that relies on massive taxpayer subsidies and has destroyed many small-scale farmers’ livelihoods.

The fact that US agriculture now employs a tiny fraction of the population serves as a stark reminder for what is in store for Indian farmers. Agribusiness companies’ taxpayer-subsidised business models are based on overproduction and dumping on the world market to depress prices and rob farmers elsewhere of the ability to cover the costs of production. They rake in huge returns, while depressed farmer incomes and massive profits for food retailers is the norm.

The long-term plan is for an overwhelmingly urbanised India with a fraction of the population left in farming working on contracts for large suppliers and Walmart-type supermarkets that offer a largely monoculture diet of highly processed, denutrified, genetically altered food based on crops soaked with chemicals and grown in increasingly degraded soils according to an unsustainable model of agriculture that is less climate/drought resistant, less diverse and unable to achieve food security.

Various high-level reports have concluded that policies need to support more resilient, diverse, sustainable (smallholder) agroecological methods of farming and develop decentralised, locally-based food economies. There is also a need to protect indigenous agriculture from rigged global trade and trade deals. However, the trend continues to move in the opposite direction towards industrial-scale agriculture and centralised chains for the benefit of Monsanto, Cargill, Bayer and other transnational players.

Devinder Sharma has highlighted where Indian policy makers’ priorities lie when he says that agriculture has been systematically killed over the last few decades. Some 60% of the population live in rural areas and are involved in agriculture but less than 2% of the annual budget goes to agriculture. Sharma says that when you are not investing in agriculture, you are not wanting it to perform.

It is worth considering that the loans provided to just five large corporations in India are equal to the entire farm debt. Where have those loans gone? Have they increased ‘value’ in the economy. No, loans to corporate houses left the banks without liquidity.

‘Demonetisation’ was in part a bail-out for the banks and the corporates, which farmers and other ordinary folk paid the price for. It was a symptom of a country whose GDP growth was based on a debt-inflated economy. While farmers commit suicide and are heavily indebted, a handful of billionaires get access to cheap money with no pressure to pay it back and with little ‘added value’ for society as a whole.

Corporate-industrial India has failed to deliver in terms of boosting exports or creating jobs, despite the hand outs and tax exemptions given to it. The number of jobs created in India between 2005 and 2010 was 2.7 million (the years of high GDP growth). According to International Business Times, 15 million enter the workforce every year. And data released by the Labour Bureau shows that in 2015, jobless ‘growth’ had finally arrived in India.

So where are the jobs going to come from to cater for hundreds of millions of agricultural workers who are to be displaced from the land or those whose livelihoods will be destroyed as transnational corporations move in and seek to capitalise small-scale village-level industries that currently employ tens of millions?

Development used to be about breaking with colonial exploitation and radically redefining power structures. Now we have dogma masquerading as economic theory that compels developing countries to adopt neoliberal policies. The notion of ‘development’ has become hijacked by rich corporations and the concept of poverty depoliticised and separated from structurally embedded power relations, not least US-driven globalisation policies resulting in the deregulation of international capital that ensures giant transnational conglomerates are able to ride roughshod over national sovereignty.

Across the world we are seeing treaties and agreements over breeders’ rights and intellectual property being enacted to prevent peasant farmers from freely improving, sharing or replanting their traditional seeds. Large corporations with their proprietary seeds and synthetic chemical inputs are trying to eradicate traditional systems of seed exchange. They have effectively hijacked seeds, pirated germ plasm that farmers developed over millennia and have ‘rented’ the seeds back to farmers

Corporate-dominated agriculture is not only an attack on the integrity of ‘the commons’ (soil, water, land, food, forests, diets and health) but is also an attack on the integrity of international institutions, governments and officials which have too often been corrupted by powerful transnational entities.

Whereas some want to bring about a fairer, more equitable system of production and distribution to improve people’s quality of lives (particularly pertinent in India with its unimaginable inequalities, which have spiralled since India adopted neoliberal policies), US capitalism regards ‘development’ as a geopolitical tool.

As economics professor Michael Hudson said during a 2014 interview (published on prosper.org under the title ‘Think Tank Times’):

American foreign policy has almost always been based on agricultural exports, not on industrial exports as people might think. It’s by agriculture and control of the food supply that American diplomacy has been able to control most of the Third World. The World Bank’s geopolitical lending strategy has been to turn countries into food deficit areas by convincing them to grow cash crops – plantation export crops – not to feed themselves with their own food crops.

The Regional Comprehensive Economic Partnership (RCEP) could further accelerate the corporatisation of Indian agriculture. A trade deal now being negotiated by 16 countries across Asia-Pacific, the RCEP would cover half the world’s population, including 420 million small family farms that produce 80% of the region’s food.

RCEP is expected to create powerful rights and lucrative business opportunities for food and agriculture corporations under the guise of boosting trade and investment. It could allow foreign corporations to buy up land, thereby driving up land prices, fuelling speculation and pushing small farmers out. If RCEP is adopted, it could intensify the great land grab that has been taking place in India. It could also lead to further corporate control over seeds.

Capitalism and environmental catastrophe joined at the hip

In India, an industrialised chemical-intensive model of agriculture is being facilitated. This model brings with it the numerous now well-documented externalised social, environmental and health costs. We need look no further than the current situation in South India and the drying up of the Cauvery river in places to see the impact that this model has contributed to: an ecological crisis fuelled by environmental devastation due to mining, deforestation and unsustainable agriculture based on big dams, water-intensive crops and Green Revolution ideology imported from the West.

But we have known for a long time now that India faces major environmental problems, many of which are rooted in agriculture. For example, in an open letter written to officials in 2006, the late campaigner and farmer Bhaskar Save noted that India, next to South America, receives the highest rainfall in the world. Where thick vegetation covers the ground, and the soil is alive and porous, at least half of this rain is soaked and stored in the soil and sub-soil strata. A good amount then percolates deeper to recharge aquifers, or ‘groundwater tables’. Save argued that the living soil and its underlying aquifers thus serve as gigantic, ready-made reservoirs gifted free by nature.

Half a century ago, most parts of India had enough fresh water all year round, long after the rains had stopped and gone. But clear the forests, and the capacity of the earth to soak the rain, drops drastically. Streams and wells run dry.

Save went on to note that while the recharge of groundwater has greatly reduced, its extraction has been mounting. India is presently mining over 20 times more groundwater each day than it did in 1950. Much of this is mindless wastage by a minority. But most of India’s people – living on hand-drawn or hand-pumped water in villages and practising only rain-fed farming – continue to use the same amount of ground water per person, as they did generations ago.

According to Save, more than 80% of India’s water consumption is for irrigation, with the largest share hogged by chemically cultivated cash crops. Maharashtra, for example, has the maximum number of big and medium dams in the country. But sugarcane alone, grown on barely 3-4% of its cultivable land, guzzles about 70% of its irrigation waters.

One acre of chemically grown sugarcane requires as much water as would suffice 25 acres of jowar, bajra or maize. The sugar factories too consume huge quantities. From cultivation to processing, each kilo of refined sugar needs two to three tonnes of water. This could be used to grow, by the traditional, organic way, about 150 to 200 kg of nutritious jowar or bajra (native millets).

While rice is suitable for rain-fed farming, its extensive multiple cropping with irrigation in winter and summer as well is similarly hogging water resources and depleting aquifers. As with sugarcane, it is also irreversibly ruining the land through salinization.

Save argued that soil salinization is the greatest scourge of irrigation-intensive agriculture, as a progressively thicker crust of salts is formed on the land. Many million hectares of cropland have been ruined by it. The most serious problems are caused where water-guzzling crops like sugarcane or basmati rice are grown round the year, abandoning the traditional mixed-cropping and rotation systems of the past, which required minimal or no watering.

Unfortunately, policy makers continue to look towards the likes of Monsanto-Bayer for ‘solutions’. Such companies merely seek to break farmers’ environmental learning ‘pathways’ based on centuries of indigenous knowledge, learning and practices with the aim of getting farmers hooked on chemical treadmills for corporate profit (see Glenn Stone and Andrew Flach’s paper on path-breaking and technology treadmills in Indian cotton agriculture).

Wrong-headed policies in agriculture have already resulted in drought, expensive dam-building projects, population displacement and degraded soils. The rivers are drying, farmers are dying and the cities are creaking as a result of the unbridled push towards urbanisation.

In terms of maintaining and creating jobs, managing water resources, regenerating soils and cultivating climate resilient crops, agroecology as a solution is there for all to see. Andhra Pradesh and Karnataka are now making a concerted effort to roll out and scale up zero budget agroecological agriculture.

Solutions to India’s agrarian crisis (and indeed the world’s) are available, not least the scaling up of agroecological approaches which could be the lynchpin of rural development. However, successive administrations have bowed to and continue to acquiesce to the grip of global capitalism and have demonstrated their allegiance to corporate power. The danger is that without changing the capitalist relations of production, agroecology would simply be co-opted by corporations and incorporated into their global production and distribution chains.

In the meantime, India faces huge problems in terms of securing access to water. As Bhaskar Save noted, the shift to Green Revolution thinking and practices has placed enormous strain on water resources. From glacial melt in the Himalayas that will contribute to the drying up of important rivers to the effects of temperature rises across the Indo Gangetic plain, which will adversely impact wheat productivity, India has more than its fair share of problems. But despite this, high-level policy makers are pushing for a certain model of ‘development’ that will only exacerbate the problems.

This model is being driven by some of the world’s largest corporate players: a model that by its very nature leads to environment catastrophe:

… our economic system demands ever-increasing levels of extraction, production and consumption. Our politicians tell us that we need to keep the global economy growing at more than 3% each year – the minimum necessary for large firms to make aggregate profits. That means every 20 years we need to double the size of the global economy – double the cars, double the fishing, double the mining, double the McFlurries and double the iPads. And then double them again over the next 20 years from their already doubled state.

— Jason Hickel

While politicians and bureaucrats in Delhi might be facilitating this economic model and all it entails for agriculture, it is ultimately stamped with the logo ‘made in Washington’. Surrendering the nation’s food sovereignty and the incorporation of India into US financial and geopolitical structures is the current state of independence.

Final thoughts

Neoliberalism and the drive for urbanisation in India have been underpinned by unconstitutional land takeovers and the trampling of democratic rights. For supporters of cronyism and manipulated markets, which to all extents and purposes is what economic ‘neoliberalism’ across the world has entailed (see thisthis and this), there have been untold opportunities for well-placed individuals to make an under-the-table fast buck from various infrastructure projects and privatisation sell-offs.

According to the Organisation for Co-operation and Economic Development, the doubling of income inequality has made India one of the worst performers in the category of emerging economies.

Unsurprisingly, therefore, struggles (violent and non-violent) are taking place in India. The Naxalites/Maoists are referred to by the dominant class as left-wing extremists who are exploiting the situation of the poor. But how easy it is to ignore the true nature of the poor’s exploitation and too often lump all protesters together and create an ‘enemy within’. How easy it is to ignore the state-corporate extremism across the world that results in the central state abdicating its redistributive responsibilities by submitting to the tenets of Wall Street-backed ‘structural adjustment’ pro-privatisation policies, free capital flows and largely unaccountable corporations.

Powerful (mining) corporations are shaping the ‘development’ agenda in India and have signed secretive Memorandums of Understanding with the government. The full backing of the state is on hand to forcibly evict peoples from their land in order to hand it over to mineral-hungry industries to fuel a wholly unsustainable model of development. Around the world, this oil-dependent, urban-centric, high-energy model of endless consumption is stripping the environment bare and negatively impacting the climate and ecology.

In addition to displacing people to facilitate the needs of resource extraction industries, unconstitutional land grabs for Special Economic Zones, nuclear plants and other projects have additionally forced many others from the land.

Farmers (and others) represent a ‘problem’: a problem while on the land and a problem to be somehow dealt with once displaced. But food producers, the genuine wealth creators of a nation, only became a problem when western agribusiness was given the green light to take power away from farmers and uproot traditional agriculture in India and recast it in its own corporate-controlled image.

This is a country where the majority sanctifies certain animals, places, rivers and mountains. It’s also a country run by Wall Street sanctioned politicians who convince people to accept or be oblivious to the destruction of the same.

Many are working strenuously to challenge the selling of the heart and soul of India. Yet how easy will it be for them to be swept aside by officialdom which seeks to cast them as ‘subversive’. How easy it will be for the corrosive impacts of a rapacious capitalism to take hold and for hugely powerful corporations to colonise almost every area of social, cultural and economic life and encourage greed, selfishness, apathy, irretrievable materialism and acquisitive individualism.

The corporations behind it all achieve hegemony by altering mindsets via advertising, clever PR or by sponsoring (hijacking) major events, by funding research in public institutes and thus slanting findings and the knowledge paradigm in their favour or by securing key positions in international trade negotiations in an attempt to structurally readjust retail, food production and agriculture. They do it by many methods and means.

Before you realise it, culture, politics and the economy have become colonised by powerful private interests and the world is cast in their image. The prevailing economic system soon becomes cloaked with an aura of matter of factuality, an air of naturalness, which is never to be viewed for the controlling hegemonic culture or power play that it really is.

Seeds, mountains, water, forests and biodiversity are being sold off. The farmers and tribals are being sold out. And the more that gets sold off, the more who get sold out, the greater the amount of cash that changes hands and the easier it is for the misinformed to swallow the lie of Wall Street’s bogus notion of ‘growth’ – GDP.

If anyone perceives the type of ‘development’ being sold to the masses is actually possible in the first instance, they should note that ‘developing’ nations account for more than 80% of world population but consume only about a third of the world’s energy. US citizens constitute 5% of the world’s population but consume 24% of the world’s energy. On average, one American consumes as much energy as two Japanese, six Mexicans, 13 Chinese, 31 Indians, 128 Bangladeshis, 307 Tanzanians and 370 Ethiopians.

Consider that the Earth is 4.6 billion years old and if you scale this to 46 years then humans have been here for just four hours. The Industrial Revolution began just one minute ago, and in that time, 50% of the Earth’s forests have been destroyed.

We are using up oil, water and other resources much faster than they can ever be regenerated. We have also poisoned the rivers, destroyed natural habitats, driven species to extinction and altered the chemical composition of the atmosphere – among many other things.

Levels of consumption were unsustainable long before India and other countries began striving to emulate a bogus notion of ‘development’. The West continues to live way beyond its (environmental) limits.

This wasteful, high-energy model is tied to what ultimately constitutes the plundering of peoples and the planet by powerful transnational corporations. And, as we see all around us, from Libya and Syria to Afghanistan and Iraq, the outcome is endless conflicts over fewer and fewer resources.

The type of ‘progress and development’ and consumerism being sold makes beneficiaries of it blind to the misery and plight of the hundreds of millions who are deprived of their lands and livelihoods. In Congo, rich corporations profit from war and conflict. And in India, tens of thousands of militias (including in 2005, Salwa Judum) were put into tribal areas to forcibly displace 300,000 people and place 50,000 in camps. In the process, rapes and human rights abuses have been common.

If what is set out above tells us anything, it is that India and other regions of the world are suffering from internal haemorrhaging. They are being bled dry from both within and without:

There are sectors of the global population trying to impede the global catastrophe. There are other sectors trying to accelerate it. Take a look at whom they are. Those who are trying to impede it are the ones we call backward, indigenous populations – the First Nations in Canada, the aboriginals in Australia, the tribal people in India. Who is accelerating it? The most privileged, so-called advanced, educated populations of the world.

— Noam Chomsky.

Underpinning the arrogance of such a mindset is what Vandana Shiva calls a view of the world which encourages humans to regard man as conqueror and owner of the Earth. This has led to the technological hubris of geo-engineering, genetic engineering and nuclear energy. Shiva argues that it has led to the ethical outrage of owning life forms through patents, water through privatization, the air through carbon trading. It is leading to appropriation of the biodiversity that serves the poor.

And therein lies the true enemy of genuine development: a system that facilitates such plunder, which is presided over by well-funded and influential foreign foundations and powerful financial-corporate entities and their handmaidens in the IMF, World Bank and WTO.

If we look at the various western powers, to whom many of India’s top politicians look to for inspiration, their paths to economic prosperity occurred on the back of colonialism and imperialist intent. Do India’s politicians think this mindset has disappeared? The same mentality now lurks behind the neoliberal globalisation agenda hidden behind terms and policies like ‘foreign direct investment’, ‘ease of doing business’, making India ‘business friendly’ or ‘enabling the business of agriculture’.

Is India willing to see Monsanto-Bayer, Cargill and other transnational corporations deciding on what is to be eaten and how it is to be produced and processed. A corporate takeover spearheaded by companies whose character is clear for all to see:

The Indo-US Knowledge Initiative in Agriculture with agribusinesses like Monsanto, WalMart, Archer Daniels Midland, Cargill and ITC in its Board made efforts to turn the direction of agricultural research and policy in such a manner as to cater their demands for profit maximisation. Companies like Monsanto during the Vietnam War produced tonnes and tonnes of ‘Agent Orange’ unmindful of its consequences for Vietnamese people as it raked in super profits and that character remains.

— Communist Party of India (Marxist)

Behind the World Bank/corporate-inspired rhetoric that is driving the overhaul of Indian agriculture is a brand of corporate imperialism which is turning out to be no less brutal for Indian farmers than early industrial capitalism was in England for its peasantry. The East India company might have gone, but today the bidding of elite interests (private capital) is being carried out by compliant politicians, the World Bank, the WTO and lop-sided, egregious back-room trade deals.

The History of the Workers’ Unemployment Insurance Bill

At a time when the American population is radicalizing, when popular movements are coalescing around “radical” demands—Medicare for All, the abolition of ICE, tuition-free college, in general the demand to make society livable for everyone—it can be useful to draw collective inspiration from the past. Irruptions of the popular will have on innumerable occasions reshaped history, remade the terrain of class struggle such that the ruling class was, at least for a moment, thrown on the defensive and forced to retreat. Especially when pundits and politicians are insisting on the virtues of centrism and the essential conservatism of Americans, it is important to remember just how false these shibboleths are, particularly in a time of economic stagnation and acute social discontent.

One of the most remarkable demonstrations of the deep-seated radicalism of “ordinary people” has been all but forgotten, even by historians: namely, the Workers’ Unemployment Insurance Bill (or Workers’ Bill) that was introduced in Congress in 1934, 1935, and 1936. Despite essentially no press coverage and extreme hostility from the business community and the Roosevelt administration, a mass movement developed behind this bill that had been written by the Communist Party. The tremendous popular pressure that was brought to bear on Congress secured a stunning victory in the spring of 1935, when the bill became the first unemployment insurance plan in U.S. history to be recommended by a congressional committee (the House Labor Committee). It was defeated in the House—by a vote of 204 to 52—but the widespread support for the bill was likely a factor in the easy passage later in 1935 of the relatively conservative Social Security Act, which laid the foundation for the American welfare state.

Aside from its direct legislative importance, the Workers’ Bill is of interest in that it shows just how left-wing vast swathes of the population were in the 1930s and can become when a political force emerges to articulate their grievances. This bill, which was far more radical than provisions in the Soviet Union for social insurance, was endorsed by over 3,500 local unions (and the regular conventions of several International unions and state bodies of the American Federation of Labor), practically every unemployed organization in the country, fraternal lodges, governmental bodies in over seventy cities and counties, and groups representing veterans, farmers, African-Americans, women, the youth, and churches. In the West, the South, the Midwest, and the East, millions of citizens signed petitions and postcards in support of it. And this was all despite the active hostility of every sector of society that had substantial resources.

It is puzzling, then, that historians have almost entirely overlooked the Workers’ Bill. For instance, in his book Voices of Protest: Huey Long, Father Coughlin, and the Great Depression, Alan Brinkley doesn’t devote a single sentence to it. Neither does Robert McElvaine in his standard history, The Great Depression: America, 1929–1941. David Kennedy devotes half a sentence to it in volume one of his Oxford history of the Depression and World War II, Freedom from Fear: The American People in Depression and War. Instead, the less sophisticated and less radical Townsend Plan for old-age insurance, which was proposed around the same time and was widely publicized in the press, tends to monopolize historians’ attention (only to be ridiculed). The neglect of the Workers’ Bill lends credence to a still-dominant interpretation of the American citizenry during the Depression and throughout its history, viz. as being relatively centrist and conservative, especially as compared with the historically more “socialist” populations of Western Europe.

Brinkley sums up this strain of thinking derived from the postwar Liberal Consensus school of historiography, which still influences pundits, politicians, and academics:

The failure of more radical political movements to take root in the 1930s reflected, in part, the absence of a serious radical tradition in American political culture. The rhetoric of class conflict echoed only weakly among men and women steeped in the dominant themes of their nation’s history; and leaders relying upon that rhetoric faced grave, perhaps insuperable difficulties in attempting to create political coalitions…

This is a simplistic interpretation. For one thing, there is a serious radical tradition in American political culture, as embodied, for example, in the Populist movement of the 1890s and the Socialist Party and IWW of the early twentieth century. But even insofar as a case can be made that “the rhetoric of class conflict echoe[s]…weakly,” it’s plausible to understand this fact as simply a reflection of the violent and ruthless repression of class-based movements and parties in American history. When they have a chance to get their message out, they attract substantial support—precisely to the extent that they can get their message out. There is no need to invoke deep cultural traditions of individualism or a lack of popular understanding of class (which is a simple notion, after all: those who own and those who don’t are in conflict). One need only appeal to the skewed distribution of resources, which prevents leftists from being heard. When Earl Browder, head of the U.S. Communist Party, was given a chance by CBS to broadcast his message over the radio one night in 1936, his listeners around the country considered it “good common sense” and wanted to learn more about Communism. Maybe this is why Communists were almost never allowed on the radio.

In this article I’ll tell the story of the Workers’ Unemployment Insurance Bill, both to fill a gap in our historical knowledge and because it resonates in our own time of troubles and struggles.

*****

As soon as the Communist Party had unveiled its proposed Workers’ Unemployment Insurance Bill in the summer of 1930, as the Depression was just beginning, it garnered extensive support among large numbers of the unemployed. The reason isn’t hard to fathom: it envisioned an incredibly generous system of insurance. In the form it would eventually assume, it provided for unemployment insurance for workers and farmers (regardless of age, sex, or race) that was to be equal to average local wages but no less than $10 per week plus $3 for each dependent; people compelled to work part-time (because of inability to find full-time jobs) were to receive the difference between their earnings and the average local full-time wages; commissions directly elected by members of workers’ and farmers’ organizations were to administer the system; social insurance would be given to the sick and elderly, and maternity benefits would be paid eight weeks before and eight weeks after birth; and the system would be financed by unappropriated funds in the Treasury and by taxes on inheritances, gifts, and individual and corporate incomes above $5,000 a year. Later iterations of the bill went into greater detail on how the system would be financed and managed.

Had the Workers’ Bill ever been enacted, it would have revolutionized the American political economy. It was a much more authentically socialist plan than existed in the Soviet Union at the time, where only 35 percent of the customary wage was paid to those not working, and that for a limited time (unlike with the Workers’ Bill). Nor was the Soviet insurance system administered democratically by workers’ representatives.

By 1934, when the plan had become widely enough known to be critically examined by economists and other intellectuals, it was frequently criticized for incentivizing malingering. Defenders of the bill—and by then it was advocated by many left-wing economists, teachers, social workers, lawyers, engineers, and other professionals—replied that this supposed flaw was, in fact, a strength. By withdrawing workers from the labor market, it would force wage rates to rise until they at least equaled unemployment benefits. “The benefits to the unemployed,” economist Paul Douglas noted, “could thus be used as a lever to compel industry to pay a living wage to those who were employed.” It was the abolition of poverty and economic insecurity that was envisioned—by a frontal attack on such fundamentals of capitalism as the private appropriation of wealth, determination of wages by the market, and maintenance of an insecure army of the unemployed.

The Unemployed Councils were at the forefront of agitation for the proposed bill, but it was also publicized through other auxiliary organizations of the Communist Party, in addition to activists in unions. As mass demonstrations for unemployment relief became more frequent—daily “hunger marches” in cities across the country, occupations of state legislative chambers, marches on city halls, “eviction riots”—the demand for unemployment insurance echoed louder and farther every month. From Alaska to Texas, requests for petitions flooded into the New York office of the National Campaign Committee for Unemployment Insurance. United front conferences of Socialist and Communist workers’ organizations took place from New York City to Gary, Indiana and beyond. In February, 1931 delegates presented the Workers’ Bill and its hundreds of thousands of signatures to Congress, which simply ignored them.

So activists continued drumming up support for the next few years. Hunger marchers in many states demanded that legislatures pass versions of the bill; two national hunger marches the Communist Party organized in December 1931 and 1932 gave the bill further publicity; delegates periodically presented more petitions to Congress, and campaigns were organized to mail postcards to legislators. Despite the fervent hostility and smear campaigns of the national AFL leadership, several thousand local unions eventually endorsed the bill, especially after it had been sponsored, in 1934, by Representative Ernest Lundeen of the Minnesota Farmer-Labor Party. Its newfound national prominence in that year gave the movement greater momentum, and a new organization was founded to lend the bill intellectual respectability: the Inter-Professional Association for Social Insurance (IPA). Within a year the IPA had dozens of chapters and organizing committees around the country, as distinguished academics like Mary Van Kleeck of the Russell Sage Foundation proselytized for the bill in the press and before Congress.

Meanwhile, conferences of unemployed groups grew ever larger and more ambitious. For instance, in Chicago in September 1934, hundreds of delegates from such groups as the National Unemployed Leagues, the Illinois Workers Alliance, the Eastern Federation of Unemployed and Emergency Workers Union, and the Wisconsin Federation of Unemployed Leagues—in the aggregate claiming a membership of 750,000—endorsed the Lundeen Bill (as it was now called) and made increasingly elaborate plans to pressure Congress for its passage.

Congress took essentially no action on the bill in 1934, so Lundeen reintroduced it in January 1935. This would become the year of the “Second New Deal,” when the Roosevelt administration turned left in response to massive discontent and disillusionment with its policies. Senator Huey Long had become a hero to millions by denouncing the wealthy and proposing his Share Our Wealth program, an implicit criticism of the New Deal’s conservatism. The “radio priest” Father Charles Coughlin had acquired heroic stature among yet more millions by constantly “talking about a living wage, about profits for the farmer, about government-protected labor unions,” as one journalist put it. “He insists that human rights be placed above property rights. He emphasizes the ‘wickedness’ of ‘private financialism and production for profit.’” His immensely popular organization — the National Union for Social Justice — was no mere politically anodyne instrument of his own ego. It enshrined such principles as nationalization of “public necessities” like banking, power, light, and natural gas; control of all private property for the public good; a “just and living annual wage which will enable [every citizen willing and able to work] to maintain and educate his family according to the standards of American decency”; abolition of the privately owned Federal Reserve and establishment of a government-owned central bank; and in general the principle that “the chief concern of government shall be for the poor.”

The tens of millions of people who flocked to the banners of Huey Long and Father Coughlin—not to mention the Communist Workers’ Bill (or Lundeen Bill)—put the lie to any interpretation of the American people as being irremediably conservative/centrist or wedded to capitalism. During the Great Depression, arguably a majority wanted the U.S. to become, in effect, a radical social democracy, or a socialist democracy.

The hearings in 1935 that were held before the Labor subcommittee on the Lundeen Bill are a remarkable historical document, “probably the most unique document ever to appear in the Congressional record,” at least according to the executive secretary of the IPA. Eighty witnesses testified: industrial workers, farmers, veterans, professional workers, African-Americans, women, the foreign-born, and youth. “Probably never in American history,” an editor of the Nation wrote, “have the underprivileged had a better opportunity to present their case before Congress.” The aggregate of the testimonies amounted to a systematic indictment of American capitalism and the New Deal, and an impassioned defense of the radical alternative under consideration.

From the representative of the American Youth Congress, which encompassed over two million people, to the representative of the United Council of Working-Class Women, which had 10,000 members, each testimony fleshed out the eminently class-conscious point of view of the people back home who had “gather[ed] up nickels and pennies which they [could] poorly spare” in order to send someone to plead their case before Congress. At the same time, the Social Security Act—known then as the Wagner-Lewis Bill, since it hadn’t been passed yet—was criticized as a cruel sham, as “a proposal to set up little privileged groups in the sea of misery who would be content to sit on their small islands and watch the others drown” (to quote a professor at Smith College). What most Americans wanted, witnesses insisted, was the more universal plan embodied in the Lundeen Bill.

Interestingly, most congressmen on the subcommittee were sympathetic to this point of view. For instance, at one point the chairman, Matthew Dunn, interrupted a witness who was observing that all the members of Congress he had talked to had received far fewer cards and letters in support of the famous Townsend Plan—which the press was continually publicizing—than in support of the more radical Lundeen Bill. “I want to substantiate the statement you just made about the Townsend bill and about this bill,” Dunn said. “May I say that I do not believe I have received over a half dozen letters to support the Townsend bill… [But] I have received many letters and cards from all over the country asking me to give my utmost support in behalf of the Lundeen bill, H.R. 2827.”

Most of the letters congressmen received were probably in the vein of this one that was sent to Lundeen in the spring of 1935, when Congress was considering the three competing bills that have already been mentioned (the Wagner-Lewis, the Townsend, and the Lundeen):

The reason I am writing you is, that we Farmers [and] Industrial workers feel that you are the only Congressman and Representative that is working for our interest. We have analyzed the Wagner-Lewis Bill [and] also [the] Townsend Bill. But the Lundeen H.R. (2827) is the only bill that means anything for our class… The people all over the country are [waking] up to the facts that the two old Political Parties are owned soul, mind [and] body by the Capitalist Class.

Even more revealingly, that spring the New York Post conducted a poll of its readers after printing the contents of the three bills. Out of 1,391 votes cast, 1,209 readers supported the Lundeen, 157 the Townsend, 14 the Wagner-Lewis, and 7 none of them. This was no scientific poll, but its results are at least suggestive.

As stated above, while the House Labor Committee recommended the Lundeen Bill, it was—inevitably—defeated in the House. Being opposed by all the dominant interests in the country, it never had a chance of passage. But as far as its advocates were concerned, the fight was not over. Throughout the spring and summer of 1935 the flood of endorsements did not let up. The first national convention of rank-and-file social workers endorsed it in February; the Progressive Miners of America followed, along with scores of local unions and such ethnic societies as the Italian-American Democratic Organization of New York (with 235,000 members) and the Slovak-American Political Federation of Youngstown, Ohio. Virtually identical state versions of H.R. 2827 were, or already had been, introduced in the legislatures of California, Oregon, Utah, Wisconsin, Ohio, Pennsylvania, Massachusetts, and other states. Conferences of unions and fraternal organizations were called in a number of states to plan further campaigns for the Workers’ Bill.

In January 1936, Representative Lundeen introduced the bill yet again, this time joined by Republican Senator Lynn Frazier of North Dakota. The hearings before the Senate Labor Committee in April resembled the hearings on H.R. 2827, with academics, social workers, unionists, and farmers testifying as to the inadequacy of the recently passed Social Security Act and the necessity of the Frazier-Lundeen Bill. A representative of the National Committee on Rural Social Planning spoke for millions of agricultural workers, sharecroppers, tenants, and small owners when he opined that this bill was “the only one which is likely to check the fascist terror now riding the fields” in the South (directed largely against the Southern Tenant Farmers Union).

The fascist terror continued unchecked, however, for the bill did not even make it out of committee. After its dismal fate in 1936, it was never introduced again.

Despite its failure, the Workers’ Unemployment Insurance Bill was a significant episode in the 1930s that certainly hasn’t deserved to be written out of history. Both substantively and in its popularity, a case can be made that it was more significant than the Social Security Act and the Townsend Plan, its two main competitors.

*****

Above I referred to a radio broadcast that Earl Browder gave in March 1936. This unusual but telling incident may serve as a coda to the story of the Workers’ Bill, reinforcing the lesson that most Americans were and are, beneath the surface layers of indoctrination, quite left-wing in their values and beliefs. It’s only a question of reaching them, of being heard by them, and of acquiring the resources to organize them.

In order to advertise its liberal position on freedom of speech, CBS invited Browder to speak for fifteen minutes (at 10:45 p.m.) on a national radio broadcast, with the understanding that he would be answered the following night by zealous anti-Communist Congressman Hamilton Fish. Browder seized the opportunity for a national spotlight and appealed to “the majority of the toiling people” to establish a national Farmer-Labor Party that would be affiliated with the Communist Party, though it “would not yet take up the full program of socialism, for which many are not yet prepared.” He even declared that Communists’ ultimate aim was to remake the U.S. “along the lines of the highly successful Soviet Union”: once they had the support of a majority of Americans, he said, “we will put that program into effect with the same firmness, the same determination, with which Washington and the founding fathers carried through the revolution that established our country, with the same thoroughness with which Lincoln abolished chattel slavery.”

According to both CBS and the Daily Worker, reactions to Browder’s talk were almost uniformly positive. CBS immediately received several hundred responses praising the speech, and the Daily Worker, whose New York address Browder had mentioned on the air, received thousands of letters. The following are representative:

Chattanooga, Tennessee: “If you could have listened to the people I know who listened to you, you would have learned that your speech did much to make them realize the importance of forming a Farmer-Labor Party. I am sure that the 15 minutes into which you put so much that is vitally important to the American people was time used to great advantage. Many people are thanking you, I know.”

Evanston, Illinois: “Just listened to your speech tonight and I think it was the truest talk I ever heard on the radio. Mr. Browder, would it not be a good thing if you would have an opportunity to talk to the people of the U.S.A. at least once a week, for 30 to 60 minutes? Let’s hear from you some more, Mr. Browder.”

Bricelyn, Minnesota: “Your speech came in fine and it was music to the ears of another unemployed for four years. Please send me full and complete data on your movement and send a few extra copies if you will, as I have some very interested friends—plenty of them eager to join up, as is yours truly.”

Sparkes, Nebraska: “Would you send me 50 copies of your speech over the radio last night? I would like to give them to some of my neighbors who are all farmers.”

Arena, New York: “Although I am a young Republican (but good American citizen) I enjoyed listening to your radio speech last evening. I believe you told the truth in a convincing manner and I failed to see where you said anything dangerous to the welfare of the American people.”

Julesburg, Colorado: “Heard your talk… It was great. Would like a copy of same, also other dope on your party. It is due time we take a hand in things or there will be no United States left in a few more years. Will be looking forward for this dope and also your address.”

In general, the main themes of the letters were questions like, “Where can I learn more about the Communist Party?”, “How can I join your Party?”, and “Where is your nearest headquarters?” Some people sent money in the hope that it would facilitate more broadcasts. The editors of the Daily Worker plaintively asked their readers, “Isn’t it time we overhauled our old horse-and-buggy methods of recruiting? While we are recruiting by ones and twos, aren’t we overlooking hundreds?” Again, one can only imagine how many millions of people in far-flung regions would have been quickly radicalized had Browder or other Communist leaders been permitted the national radio audience that Huey Long and Father Coughlin were.

But such is the history of workers and marginalized groups in the U.S.: elite efforts to suppress the political agenda and the voices of the downtrodden have all too often succeeded, thereby wiping out the memory of popular struggles. If we can resurrect such stories as that of the Workers’ Bill, they may prove of use in our own age of crisis, as new struggles against oppression are born.

Trump Takes on the Fed

The president has criticized Federal Reserve policy for undermining his attempts to build the economy. To make the central bank serve the needs of the economy, it needs to be transformed into a public utility.

For nearly half a century, presidents have refrained from criticizing the “independent” Federal Reserve; but that was before Donald Trump. In response to a question about Fed interest rate policy in a CNBC interview on July 19, 2018, he shocked commentators by stating,

I’m not thrilled.  Because we go up and every time you go up they want to raise rates again. … I am not happy about it.  … I don’t like all of this work that we’re putting into the economy and then I see rates going up.

He acknowledged the central bank’s independence, but the point was made: the Fed was hurting the economy with its “Quantitative Tightening” policies and needed to watch its step.

In commentary on CNBC.com, Richard Bove contended that the president was positioning himself to take control of the Federal Reserve. Bove said Trump will do it “both because he can and because his broader policies argue that he should do so. . . . By raising interest rates and stopping the growth in the money supply [the Fed] stands in the way of further growth in the American economy.”

Bove noted that in the second quarter of 2018, the growth in the money supply (M2) was zero. Why? He blamed “the tightest monetary policy since Paul Volcker, whose policies in the mid-1980s led to back-to-back recessions.” The Fed has raised interest rates seven times, with five more scheduled, while it is shrinking its balance sheet by $40 billion per month, soon to be $50 billion per month.

How could the president take control? Bove explained:

The Board of Governors of the Federal Reserve is required to have seven members. It has three. Two of the current governors were put into their position by President Trump. Two more have been nominated by the president and are awaiting confirmation by the Senate. After these two are put on the Fed’s board, the president will then nominate two more to follow them. In essence, it is possible that six of the seven Board members will be put in place by Trump.

Those seven, along with five federal district bank presidents, compose the Federal Open Market Committee, which sets monetary policy; and one of those district bank presidents, Minnesota Fed head Neel Kashkari, is already arguing against further rate increases. Bove concluded:

The president can and will take control of the Fed. It may be recalled when the law was written creating the Federal Reserve the secretary of the Treasury was designated as the head of the Federal Reserve. We are going to return to that era.

Returning the Fed to Treasury control, however, means more than appointing new Board members. It means “nationalizing” the central bank, making it a public utility responsive to the needs of the public and the economy. And that means modifying the Federal Reserve Act to change the Fed’s mandate and tools.

The Controversial History of Central Bank Independence

Ever since the 1970s, the Fed and other central banks have insisted on their independence from political control. But according to Timothy Canova, Professor of Law and Public Finance at Nova Southeastern University, independence has really come to mean a central bank that has been captured by very large banking interests. It might be independent of oversight by politicians, but it is not a neutral arbiter. This has not always been the case. During the period coming out of the Great Depression, says Canova, the Fed as a practical matter was not independent but took its marching orders from the White House and the Treasury; and that period was the most successful in American economic history.

According to Bernard Lietaer, a former Belgian central banker who has written extensively on monetary innovation, the real job of central bankers today is to serve the banking system by keeping the debt machine going. He writes:

[W]e can produce more than enough food to feed everybody, and there is definitely enough work for everybody in the world, but there is clearly not enough money to pay for it all. The scarcity is in our national currencies. In fact, the job of central banks is to create and maintain that currency scarcity. The direct consequence is that we have to fight with each other in order to survive.

The rationale for central bank independence dates back to a bout in the 1970s of “stagflation” – rapidly rising prices along with stagnant productivity. The inflation surges were blamed on political pressure put on Fed Chairman Arthur Burns by the Nixon administration to follow easy-money policies. But the link between easy-money policies and inflation is not at all clear. The Japanese have had near-zero interest rates for two decades and cannot generate price inflation although they are trying to. An alternative explanation for the rising prices of the 1970s is that producers’ costs had gone up, largely from increased labor costs due to the strong bargaining power of unions and the skyrocketing cost of oil from an engineered 1973-74 oil crisis.

Fed policy nevertheless remains stuck on the “Quantity Theory of Money,” which says that increasing the money in the system will decrease the value of the currency, driving up prices. The theory omits the supply factor. As long as workers and materials are available, increasing “demand” (money) can generate the supply needed to meet that demand. Supply and demand increase together and prices remain stable. And while the speculative economy may be awash in money, today the local productive economy is suffering from a lack of demand. Consumers are short of funds and heavily in debt. Moreover, plenty of workers are available to generate the supply needed to meet any new demand (injection of money). According to John Williams at ShadowStats.com, the real unemployment figure as of April 2018, including long-term discouraged workers who were defined out of official existence in 1994, was 21.5 percent. Beyond that is the expanding labor potential of robots and computers. A vast workforce is thus available to fill the gap between supply and demand, allowing new money to be added to the productive economy.

But the Fed insists on “sterilizing” every purported effort to stimulate demand, by making sure the new money never gets into the real economy. The money produced through quantitative easing remains trapped on bank balance sheets, where the Fed pays interest on excess reserves, killing any incentive for the banks to lend even to other banks; and the central bank has now begun systematically returning even that money to its own balance sheet.

The High Price of Challenging the Fed

An article in The Economist on July 28, 2018, contends that Nixon was pressuring the Fed to make the economy look good for political purposes, and that Trump is following suit. But there is more to the Nixon story. In a 2010 book titled The American Caliphate, R. Duane Willing says the Nixon White House had quietly drafted and sponsored a Federal Charter Bill that would have changed U.S. financial history. Willing worked for the Federal Home Loan Bank Board during the Nixon era and was tasked with defining the system requirements that would make a central computerized checking account and loan system available to the new banking system. He writes:

Only John Kennedy and Abraham Lincoln and two other assassinated presidents, James Garfield and William McKinley, prior to Nixon, had actively contemplated changes of such magnitude in the U.S. financial system.

President Garfield observed that “whoever controls the volume of money in our country is absolute master of all industry and commerce . . . and when you realize that the entire money system is very easily controlled, one way or another by a few powerful men, you will not have to be told how periods of inflation and depression originate.”

. . . The hidden secret since the beginning of modern capitalism is that money is created and managed by bank control over checking accounts in the loan-making process.

Willing says Nixon was preparing the Federal Home Loan Bank Board to change the traditional role of American savings and loan associations, giving them money creation powers like the big Wall Street banks had, providing a full-service nationwide banking system. The national money supply would thus be regulated according to needs at the local level rather than dictated from the top by the central bank.  The proposed legislation provided for a separate central bank to backstop local credit unions and a much greater degree of competition for a wide array of financial services.

But Nixon’s plan for national finance, along with his plan for healthcare and a guaranteed income, alarmed the Wall Street/Federal Reserve power block, which Willing says was about to be challenged like never before. Nixon was obviously not blameless in the Watergate scandal, but Willing contends it was pushed by “the Wall Street Great Merchants as owners of the Senate,” who “were making certain that the money dreams of ‘Tricky Dick’ and his vision for the Republic protected with a network of converted Savings and Loan associations was doomed.”

An “Independent” Central Bank or a Public Central Bank?

Challenging the Fed is thus risky business, and the president should be given credit for taking it on. But if he is planning to change the makeup of the Federal Reserve Board, he needs to appoint people who understand that the way to jump-start the economy is to inject new money directly into it, not keep the money “sterilized” in fake injections that trap it on bank balance sheets until it can be reeled back in by the central bank. Interesting proposals for how the Fed could inject new money into the economy include making direct loans for infrastructure (as the Chinese central bank is doing), making low- or no-interest loans to state and local governments for infrastructure, or refinancing the federal debt interest-free.

Better than changing who is at the helm of the central bank would be to change the rules governing it, something only Congress can do. Putting the needs of the American people first, as Trump promised in his campaign speeches, means making the Fed serve Main Street rather than Wall Street.

• A previous version of this article was published at Truthdig.com

Globe and Mail Report on Business exposes Lies of Capitalism

The captains of industry are fond of promoting the notion that capitalists, but never government, generate wealth.

So what to make of two recent Globe and Mail Report on Business stories about government support for venture capitalists?

At the end of June the federal government announced the five venture-capital firms that will receive $350-million it previously allocated to fund start-up firms. As part of the accord, the government is offering a dollar for every two and a half dollars private investors put in. Ottawa’s money is supposed to be an investment, but the public only begins to be repaid after the purported “risk takers” see the return of their capital and 7-per-cent on top of that.

The recent initiative extends an even more generous five-year old subsidy program for “venture capitalists”, who are widely hailed by supporters of capitalism as dynamic wealth creators. But, after a downturn some years ago “the country’s venture capitalists pressed Ottawa for help after Canadian institutional investors largely abandoned the asset class after years of poor returns”, noted the Globe. Alongside support from Ontario, Stephen Harper ramped up social assistance to these “wealth creators”.

The Business Development Bank of Canada (BDC) anchors the venture capital program. Formed by Parliament in 1944 to stimulate investment in Canadian businesses, BDC (previously Industrial Development Bank) is the “largest single venture capital investor in Canada.” BDC analyst Peter Misek told the Globe “BDC invested when no one else did and shouldered the burden when no one else would. There would be no capital in the Canadian VC [venture capital] ecosystem were it not for BDC over the last 10 years.”

While the image of so-called dynamic, risk taking, venture capitalists pleading for social assistance is particularly difficult to square with capitalism’s official ideology, a superficial look at the economy demonstrates they aren’t the only corporate welfare bums. Recently, the federal government nationalized the Trans Mountain Pipeline when Kinder Morgan said it was not financially viable. Canada’s leading aerospace and rail firm has long benefited from massive direct social assistance. According to one estimate, Bombardier has received $3.7 billion worth of subsidies in recent years. For decades Bombardier (and other major corporations) sold unwanted products internationally through Canada’s aid agency.

Aerospace counterpart Pratt & Whitney Canada has garnered $3.3 billion from Industry Canada since 1970. Additionally, Pratt & Whitney, Bombardier, General Motors Canada, etc. have benefited greatly from military contracts over the years. One aim of defence procurement has been to stabilize the economy, spread regional industrial benefits and subsidize advanced technology sectors.

In The Computer Revolution in Canada: Building National Technological Competence John Vardalas details the military’s important role in stimulating technology development and expertise. After World War II, for instance, the Defence Research Board sponsored the “University of Toronto Electronic Computer”, the first working computer in Canada.

Since its creation prior to World War I an important objective of the Navy has been to support Canadian shipbuilding, which has many industrial spinoffs. When the Conservative government launched a $33 billion (now $60+ billion) 30-year National Shipbuilding Procurement Strategy in 2012, a CBC.ca headline noted: “Shipbuilding deals will stabilize industry, [Prime Minister] Harper says”. An assistant deputy minister at Public Works and Government Services Canada, Tom Ring wrote, “Canada’s shipbuilding industry is now on the cusp of resurgence thanks to the federal government’s National Shipbuilding Procurement Strategy.”

The automotive sector is another pillar of Canadian capitalism that receives social assistance. To save the sector’s leading lights, Ontario and Ottawa ploughed over 10 billion dollars into Chrysler and GM (after the share selloff taxpayers lost about $3.5-billion). But, the 2009 bailout is the tip of the auto industry subsidy iceberg. Over the past few decades almost every new factory or major factory upgrade has received a significant welfare cheque. But, the industry’s reliance on public care goes beyond direct assistance. From traffic lights to licensing drivers, car centric zoning regulations to endless billions spent on roads, the industry has required massive government intervention.

Then there is the financial sector, where contrary to popular perception, Canada’s banks received a massive infusion of social assistance when some of their international counterparts ran into trouble in 2008. “Canada’s biggest banks accepted tens of billions in government funds during the recession”, noted a CBC story about a 2012 CCPA investigation. In the biggest move the Crown Corporation Canada Mortgage and Housing Corporation withdrew $69-billion worth of mortgages the big banks didn’t want on their balance sheets.

Despite abundant evidence that nothing approaching the fantasy of free market capitalism exists, the myth persists. The reason is that it serves to legitimate the private appropriation of socially created wealth. As an example, Justin Trudeau responded to questions about Bombardier paying its executives huge sums after receiving a major welfare payment by saying, “we respect the free market and the choices that companies will make.”

The fairy tale about “capitalism” is a way to justify rich people running the country and to dupe us out of our money to subsidize them doing it.

Violent Coup Fails In Nicaragua, US Continues Regime Change Efforts

Nicaraguans celebrate 39th Anniversary of the 1979 Nicaraguan Revolution in Managua, July 2018 (Source Redvolution)

Note: Before the update on Nicaragua, I am providing two recent interviews that provide a context for what is happening in Nicaragua.

First, is an interview I did with Lee Camp, the lead writer, and host of Redacted Tonight, “US Pushing for Regime Change in Nicaragua,” where we discuss the economic and political situation in Nicaragua as well as who is behind the coup and the government response. This interview discusses the issues raised in an article by me and Nils McCune.

On Clearing The FOG radio and podcast, Margaret Flowers and I interviewed Stephen Sefton, who lives in Nicaragua and is a founder of Tortilla con Sal. He names the names behind the violence and describes what is happening in Nicaragua.

Nicaraguan president Daniel Ortega arrives at the celebration of the Sandinista Revolution (Photo by Alfred Zeniga for AP)

Lessons Learned from the Failed Violent Coup in Nicaragua and Next Steps

The violent coup in Nicaragua has failed. This does not mean the United States and oligarchs are giving up, but this phase of their effort to remove the government did not succeed.  The coup exposed the alliances who are working with the United States to put in place a neoliberal government that is controlled by the United States and serves the interests of the wealthy. People celebrated the failure of the coup but realize work needs to be done to protect the gains of the Sandinista revolution.

People Celebrate Revolution, Call For Peace, Show Support for Government

The people of Nicaragua showed their support for the democratically-elected government of Daniel Ortega with a massive outpouring in Managua in a celebration of the 39th anniversary of the Sandinista Revolution. In addition to the mass protest in Managua, various cities had their own, in some cases very sizeable ones.

People have wanted peace to return to Nicaragua. They have also wanted the roadblocks removed, which have resulted in closed businesses, job loss and loss of mobility. Roadblocks have been removed, even in the opposition stronghold of Masaya. There were two opposition deaths and one police officer killed in the removal. There was also an earlier death of a policeman in Masaya, captured when he was off-duty, tortured and burnt to death. This brings the total of police killed since April up to at least 21 with hundreds injured. With the opening of the main road on the east side of Masaya, all Nicaragua’s main routes are open to traffic and buses, etc., are operating normally.

At the rally, President Ortega called on the people of Nicaragua to defend peace and reinstate the unity that existed in the nation before the violent opposition protests. He described how the violent coup attempted to destabilize the country and ended the peace that has existed through the eleven years of his time in office. He said, “Peace must be defended every day to avoid situations like these being repeated.”

He also criticized the Catholic Bishops for their role in the failed violent coup. Ortega described the Episcopal Conference of Nicaragua as “coup leaders” for collaborating with the opposition during the protests. Not only did the Catholic leadership side with the opposition during the national dialogue, but priests were involved in kidnapping and torture. Pope Francis has a lot of work to do to reign in the Catholic Church in Nicaragua. If their role in these violent protests and opposition to an economy for the people is not stopped, this will become a scandal for the Catholic Church.

Other Latin American leaders spoke out against involvement in the coup. Bolivian President Evo Morales condemned US “interference” in Nicaragua, denouncing the “criminal strategies” used against the government of Daniel Ortega. Morales accused the United States Agency for International Development (USAID), and the National Endowment for Democracy (NED) of “openly supporting violence” in Nicaragua. Also at the celebration were the foreign ministers of Cuba and Venezuela, Bruno Rodríguez Parrilla, and Jorge Arreza, all supporting Nicaragua over the violent coup of the United States and oligarchs.

The United States is Escalating Economic War and Support for Opposition

The United States is not giving up. Also on the anniversary of the revolution, the NICA Act, designed to escalate the economic war against Nicaragua, was introduced in the Senate. It has already been passed by the US House of Representatives. The Senate bill, called the Nicaragua Human Rights and Anti-corruption Act of 2018, imposes sanctions, calls for early elections and escalates US intelligence involvement in Nicaragua. It is a law that ensures continued US efforts to remove the democratically-elected government.

At the same time, USAID announced an additional $1.5 million for Nicaragua to build opposition to the government. This will fund the NGOs that participated in the protests, human rights groups that falsely reported the situation, media to produce the regime change narrative and other support for the opposition.

The coordination between Nicaraguan opposition and the United States was shown by Max Blumenthal‘s attempted visit to an organization that funnels USAID and NED money to the opposition. He visited the Managua offices of the Institute of Strategic Studies and Public Policies (IEEPP in Spanish), but it was closed because its director, Felix Maradiaga, who was at the heart of the violent unrest, was in Washington, DC seeking more funding from USAID.

On July 18, the US-dominated OAS passed a resolution concerning “The Situation in Nicaragua.” An earlier effort to endorse a report of the Inter-American Commission on Human Rights (IACHR) was so biased that it failed. The report ignored the opposition’s widespread violence and only reported on the defensive violence of the government. The resolution approving the IACHR report was supported by only ten out of 34 countries.

The resolution, which was finally passed by the OAS, condemned violence on all sides and urged Nicaragua to pursue all options including the national dialogue to seek peace begun by Ortega. On the issue of elections, the resolution urged Nicaragua “to support an electoral calendar jointly agreed to in the context of the National Dialogue process.” Only this mainly symbolic resolution could pass muster in the OAS, despite US domination.

What Happened and What Was Learned

In our article “Correcting the Record: What Is Really Happening In Nicaragua,” Nils McCune and I describe what was behind the violent coup attempt. We reported that there was a lot of misinformation on what was occurring in Nicaragua, indeed the false narrative of regime change was part of the tactics of the failed coup. Perhaps most importantly we described the alignment of forces behind the coup.

The coup was a class war turned upside down. The Ortega government includes none of the oligarchic families, a first in the history of Nicaragua. He has put in place a bottom-up economy that has lifted people out of poverty, provided access to health care and education, given micro-loans to entrepreneurs and small businesses and created an economy energized by public spending. Ortega expanded coverage of the social security system; as a result, a new formula was required to ensure fiscal stability.

Ortega made a counter-proposal to the IMF/business proposal, which would cut social security and raise the retirement age. He proposed no cuts to social security and increasing employer contributions by 3.5% to pension and health funds, while only slightly increasing worker contributions by 0.75% and shifting 5% of pensioners’ cash transfer into their healthcare fund.  These reforms were the trigger as it was the business lobby who called for the protests.

The forces aligned with the violent coup included the oligarchs, big business interests, foreign investors (e.g. Colombian financiers), the US-funded NGO’s and the Catholic Church, a long-term ally of the wealthy. Also involved was the Movement for Renovation of Sandinismo (MRS), a tiny Sandinista offshoot party, of former Sandanistas who left the party when Ortega lost an election in 1990 who are aligned with the US State Department.

Regarding students, there were already student protests around university elections, and these were redirected by the violent coup effort and supported by a small minority of students from private universities, the April 19th Movement. Some of these students had been brought to the US by the Freedom House, which has long ties to the CIA and met with far-right interventionist members of the US Congress, including Rep. Ileana Ros-Lehtinen, Sen. Marco Rubio, and Sen. Ted Cruz.

These groups acted in opposition to the bulk of Nicaraguan society and showed their true colors. This includes:

  • Being tied to and subservient to the US government.
  • Being led by oligarchs and big business interests that are out of power and cannot win elections.
  • Using violence as a strategy of creating chaos and trapping the government into responding with violence to restore order.
  • Spreading false propaganda through oligarch-controlled media, often funded by NED, as well as highly-manipulated social media echoed by western media, especially The New York Times, The Guardian, Washington Post and cable TV news outlets.

No doubt more will come out about this in the future as the coup is researched and analyzed. As the facts become clear, the opposition will lose more political power and be even less likely to win elections. The blockades of roads with violence undermined the economy and had a negative impact on the poor and working class. If it becomes evident that this was a strategy of the opposition, they will lose power. NGO’s that are funded by the US and run by members of the MRS will be noted for their dishonest narrative and will be seen as an arm of the United States and not trusted by the people of Nicaragua. Media outside of Nicaragua will come to understand that human rights groups and NGOs are not reliable sources of information but need to be questioned. They need to be pushed to break their ties with the United States.

This does not mean all is well on the Sandinista side of the alliance of forces. The coup is an opportunity for self-reflection and self-criticism that is already happening, as seen in this list of 20 results from the coup, which begins with “A more consolidated and United FSLN.” In addition, the Action Group of the Solidarity with Nicaragua Campaign put forward seven propositions to unify around. The protest took advantage of challenges the Nicaraguan government faces in continuing to lift up the poor and economically insecure. It shows their need to build their capacity to quickly let the public know their side of the story. And, it shows the need for planning for a post-Ortega Sandinista government, as the president is in his third term.

The anniversary of the revolution was a good beginning at strengthening the unity of the Sandinista movement and celebration of the defeat of the coup, but there will be challenges ahead. Nicaragua is a poor country that needs foreign investment. If the United States escalates the economic war, which seems to be the intent, it will make it challenging to continue the social and economic programs that are lifting up the poor. Nicaragua had relied on investment from Venezuela, but it is also in the midst of an economic war, which along with the low oil prices has created economic challenges for them. Nicaragua has begun to build economic relationships with China, Russia, Iran and other countries; these will likely need to expand.

The misinformation was deep and widespread. Inside Nicaragua, there were stories of students being killed that never happened but that escalated the protests. The opposition claimed to be nonviolent when their strategy was to use violence to force regime change while the government quartered the National Police. False news and videos of attacks on neighborhoods and universities never stopped being manufactured.  One example, students calling for help and claiming they were under attack, was later exposed in a video showing the students practicing the false social media narrative.

Peace and justice activists in the United States and western nations have learned they need to be much more careful believing reports on what is occurring in Nicaragua. The US-funding of NGOs involved in women’s issues, environmental protection and human rights in Nicaragua make them questionable sources of information for justice advocates. In addition, US-funded regime change efforts are getting more sophisticated at social media; and thus, care must be taken as social media has it is abused by regime change advocates. We must look to other sources that have shown the ability to report accurately; e.g., Tortilla con Sal, Telesur, Redvolucion.  Peace and justice advocates must be grounded in anti-imperialism and nonintervention by the United States.

The Pragmatic Deconstruction of the Temporal Single System Interpretation

Introduction

There are internal inconsistencies; i.e., contradictions, with the Temporal-Single-System-Interpretation (TSSI), pertaining to its claims of having rectified the logical contradictions within Marx’s Capital, concerning the law of value. This paper will not be going extensively into what the Temporal-Single-System-Interpretation is reacting against, namely, the charge against Marx of internal inconsistencies, which, for over one-hundred years, have hung over Marx’s work like a dark foreboding cloud. Instead, this paper will be presenting the internal consistencies of the Temporal-Single-System-Interpretation, itself, in relation to Marx’s work, which by association also presents the internal consistencies within Marx’s own analysis. In sum, TSSI’s demonstrations have not succeeded in refuting the century old proof of Marx’s logical inconsistencies because TSSI passes over in silence many of the contradictory claims Marx made about the characteristics of the law of value. Dmitriev, Okishio, Bohm-Bawerk and Bortkiewicz may have faltered in fully outlining the inconsistencies in Marx’s Capital; nevertheless, they were correct that Marx’s analysis; i.e., law of value, is riddled with irreparable, internal-logical inconsistencies.

Foremost, the TSSI imposes unto Marx’s analysis a framework that is just not there in Marx’s work. In actuality, TSSI has simply side-stepped certain Marxist premises over others; i.e., picked certain premises over others, which are contradictory, so as to arbitrarily construct a truncated Marxist interpretation, which can enable TSSI to dubiously claim that it is the only interpretation able to rescue Marx’s labor theory of value from its century old prison term, the damning sentence of internal-logical-inconsistency. In fact, to believe TSSI one would have to live in a perpetual state of suspension of disbelief, to pass over in silence the many internal contradictions emanating from Marx’s own statements, concerning the law of value. Specifically, having an interpretation that forgoes some of Marx’s premises for others does not remove the claim of internal inconsistency. One can find the Bible internally consistent as well if one chooses to pass over certain contradictory passages and premises. The bible, or any other text, will as well make sense, and seem logically plausible if one refuses to acknowledge, or deal with, the conflictual premises and statements within a text. Contrary to Kliman, when one interpretation makes a text make sense does not make it more plausible, or more correct when the particular interpretation abandons core premises and statements the text makes in favor of more sympathetic premises and statements. When this sort of thing happens, we have left the solid ground of reason and are in the mystical clouds of ideology and theoretical fetishism.

Part I

First and foremost, TSSI is a reductive and distorted interpretation of Marx’s analysis in the sense that TSSI has abandoned many of the premises Marx outlined pertaining to the law of value. Thus, TSSI’s claim to have returned Marx’s analysis to wholeness and an analytical totality, casting-off all charges of internal inconsistency against Marx, is blatantly incorrect and screams of ideological bias from the get-go. For example, according to Andrew Kliman, “TSSI deduces Marx’s conclusion that surplus labor is the exclusive source of profit—in every case, without exception”.1 This is one of the many fundamental premises of TSSI. However, Marx stated, within the logical confines of Capital (Volume 1) that:

Capitalist production… in capitalist agriculture is a progress in art, not only of robbing the worker, but of robbing the soil. Capitalist production… only develops the techniques and the degree of combination of the social process production by simultaneously sapping the original sources of  all wealth, the soil and the worker.2

Essentially, according to Marx, wealth; i.e., surplus value, is generated through sapping the soil and workers of value. The soil and the worker are, for Marx, the sole founts of surplus value, that is, for any value, not just the exploitation of labor-time. Consequently, this flies directly in the face of TSSI, but more importantly, this flies directly in the face of Marx, himself, who continually repeats throughout Das Capital that “labor is the source of all wealth”;3 value. The same applies for TSSI, wherefore, repeatedly Andrew Kliman reminds us that “value is [solely] determined by labor-time”.4  This is an internal-logical-inconsistency in Marx’s analysis, which invariably skews the numbers and his holy trinity of economic equalities, pertaining to the law of value. As a result, once again we have an internal-logical contradiction; i.e., a logical inconsistency, within Marx’s analysis, which rattles the Marxist law of value to the core.

This internal inconsistency rattles Marx’s labor theory of value because when values; i.e., wealth, escape the strict confines of labor-time calculations, the Marxist trinity of economic equalities can go awry. It is for this reason that Kliman has reduced Marx’s law of value to the strict confines of labor-time in the sense that all sorts of unquantifiable values, derived from the land and soil, devoid of labor-time, can magically augment values and prices, by seeping into the capitalist-system unannounced and unquantified. Contrary to Kliman, and in line with Marx, it is more appropriate to conceive that capital makes labor and the earth produce, and labor and the earth produce surplus value, due to the fact, contrary to TSSI, the source of surplus value, by Marx’s own statements, is both the earth and labor-power, not strictly labor-power, itself. This explains why total values and total prices do not equate, or could ever equate, unless huge TSSI arbitrary readjustments are applied to Marx’s analysis and premises, beginning with his fundamental premise that the soil; i.e., the natural environment, does produce value, value which in some instances is devoid of any labor-time.

For example, in Capital (Volume 2), when Marx was looking for the original source of surplus value found in the market; i.e., the circulation sphere, which could account for the paradox that capitalists receive more value in return to what they inject into the market on a yearly basis, discovered that the extra surplus value in the market, which is devoid of labor-time, originates from Gold. Namely, that the mineral itself, gold, like labor-power, was throwing more value into circulation; i.e., the market, than the value it was being assigned in return by capitalists through the calculation of labor-time within gold production. Meaning, that gold production was both supplying the market with surplus labor derived from workers plus an extra amount of surplus value, atop of surplus labor-time calculations, which was providing the extra unaccounted surplus value in the market by which capitalists were able to realize their annual surplus product.

For Marx, in Capital (Volume 2) a certain amount of value, conceivably surplus value, was not being accounted for in gold production. As a result, gold’s unaccounted value was supplying the initial surplus value that the market needed in order to facilitate capitalist transactions; i.e., enabling capitalists to realize their over-extended surplus at the end of each year. That is, gold’s unaccounted value was permitting capitalists to extract more from circulation; i.e., the market, than he or she initially was putting into circulation, meaning a segment of free value, initially injected in the market, gratis, was operating in the market, free of labor-time, providing unaccounted surplus value and profit so all capitalists could extract more than they were throwing into the market. As Marx states:

Only in gold production—in so far as the gold product contains or is bearer of surplus value is new wealth created, and it is only to the extent that the whole new gold product steps into circulation that it increases the money material for potential new…capitals. …The surplus-value of the gold producer, produced in gold, would then be the only fund from which all the other capitalists drew material with which to realize their annual surplus product.5

Therefore, exactly, like labor-power, according to Marx, gold production is cheated out of a certain excess amount of value, which goes unpaid, unrewarded and unaccounted for in order to provide the excess surplus value; i.e., profit, the markets need, which enables capitalists to realize their annual surplus product in and across the circulation sphere. Contrary to TSSI, gold, like labor-power, the soil, like the worker, provide the founts for any capitalist profit and surplus value. Thus, once again, the internal-logical-inconsistencies have manifested within Marx’s Capital, between the plethora of Marx’s statements professing that the only fount of surplus value is labor-time and those other statements, correctly articulating that the soil and the worker, together, are, in fact. the wellsprings of capitalist profit, value and wealth.

In many instances, labor-time has nothing do with an augmentation of value; i.e., surplus value. An excellent example of this is when Marx describes the autonomous, value-producing power of waterfalls, which graciously augment value, free of labor-time, when their energy is harnessed, appropriately, according to the dictates of capitalism. According to Marx:

A natural force…does not belong to the general conditions of the sphere of production…Capital cannot create a waterfall from its own resources. The surplus profit that arises from [the] use of the waterfall…arises not from the capital [invested] but from the use by capital of a monopolizable and monopolized natural force. Under these conditions,…surplus profit…accrues to the owner of the waterfall.6

Therefore, here we have a textbook example of the internal-logical-inconsistencies found throughout Marx’s Capital. If socially necessary labor-time is the only source of value, then a waterfall should not be autonomously providing surplus value, devoid of labor-time, which it is, and Marx concedes this fact. Consequently, contrary to TSSI, value is not solely a product of socially necessary labor-time, meaning value can be created outside the production sphere and Marx inadvertently acknowledges this fact, when he states a natural force, like a waterfall, does not belong to the sphere of production. Inadvertently, this also opens the door to the damning conclusion that value can be produced outside of production, such as we see with gold and the waterfall, assuming these two examples are not anomalies.

Moreover, this means that TSSI is implausible and a bastardization of what Marx said and meant in Capital. If the point of any interpretation is to make a text make sense, as Kliman states, then the point is also to acknowledge the discrepancies within a text, with honesty. The point is not to pick and choose premises, here and there, in order to arrive at a dubious interpretation which somehow makes sense and retains a sense of fuzzy totality, a suspicious totality, which comes at the insurmountable cost of textual verity, honest scholarship and the basic fact that Marx’s Capital is riddled with internal-inconsistencies. There is no side-stepping this fact. TSSI has skewed Marx’s statements and premises in a feeble attempt to refute the fact of internal inconsistency within Marx’s Capital. To quote, Kliman, “Marx’s value theory would be necessarily wrong if it were internally inconsistent…An internally inconsistent theory simply cannot be right”7 and this is exactly the case with Marx’s analysis. It is internally inconsistent and thus is not completely right, hence, the reason why the charge of internal inconsistency has lasted so long and the reason why so many attempts have been made to refashion Marx’s analysis into something new yet inspired by Marx’s analysis. The point is not to beat a dead horse over and over again. The point is to accept the facts. The point is not to retreat into ideology and Marxist fetishism, as the TSSI has clearly done, but to move on.

Part II

Another one of the many fundamental premises of TSSI is its fundamental claim that “valuation is temporal, so input and output prices can differ”,8 meaning that output prices/values of commodities can be lower than the input prices/values of the means of production initially going into the production process at the beginning. However, this leads to an internal inconsistency within Marx’s analysis in the sense that Marxist holy trinity of equalities becomes out of whack if inputs and output prices differ, substantially. First, according to Marx and the TSSI, the three aggregate value-price equalities are:

* Total profit equals total surplus value.

* Total price equals total value.

* The aggregate “price” rate of profit equals the aggregate “value” rate of profit…

[And,] in Marx’s view, these aggregate equalities were immensely significant [as]…they confirmed both the law of value and his theory that all profit has its origin in the exploitation of workers.9

However, as shown previously, it is evident that profits do not have their sole origin in the exploitation of workers, but also have their origin in the free exploitation of the soil, which augments profit devoid of any labor-time. And, this is enough to skew Marx’s holy economic equalities, which Marx argues must in the last instance always equalize. As Engels states, in the preface of Capital (Volume 3), “the total sum of prices equals the total sum of values…in the last instance, [meaning any] incongruence disappears” 10 in the end. However, if amounts of profit; i.e., value, enter calculations, devoid of labor-time, which they do, then total values and total prices can never equate, in the last instance, due to the fact there will be segments of total price and total value, which will be devoid of labor-time and unable to be accounted for by socially necessary labor-time.

Notwithstanding, for argument sake, let us take one of Kliman’s simple economic models, when inputs and outputs prices differ, and take this economic model as an economic totality. That is, an economy as a whole, which falls into recession and/or depression wherefore outputs do not equal inputs at the level of totality. First, in this instance, total price and total value will differ due to discrepancies in output and inputs. Second, like a chain reaction, this will also mean that total profit and total surplus value will differ, due to discrepancies in output and inputs. And third, the aggregate “price” rate of profit and the aggregate “value” rate of profit will differ, thus, annulling Marx’s and the TSSI’s holy trinity of economic equalities. Taking a look at Kliman’s, TABLE 2.2., pertaining prices of production and average profits, where Marx’s holy economic equalities are maintained, we can see that everything Marx and TSSI indicated is in order:11

In effect, this reproduction of Kliman’s economic model, reproduces Marx’s holy economic equalities. As determined by Kliman, “total profit and total surplus value both equal 48,… total price of production and total value both equal 118”12 and, of course, the aggregate price and value rates of profit also both equalize at 16%. Therefore, according to TSSI, Marx appears vindicated of internal inconsistency when inputs and outputs are valued temporally. When inputs and outputs are temporal; i.e., valued temporally, Marx’s holy economic equalities remain intact.

Now, let us assume that Kliman’s economic model is a totality, comprising the only two economic branches in the economy. Indeed, this simplification is valid in the sense that Kliman does this sort of thing; i.e., simplification, throughout his book, Reclaiming Marx’s Capital. That is, he simplifies, reducing complex economies to two or three economic branches for the sake of clarity and edification. Consequently, let us say, the chemical sector remains as is, in the new economic model, while the restaurants sector, due to various socio-economic conditions, is in trouble, troubles of various kinds which seriously curtail the surplus value produced and lower profits into the negative.

At the end of the year, this totally new, independent, and separate economic model, different from Kliman’s example, has a surplus value measured at 16, with a value rate of profit calibrated at 5.3%. Total value is 86 while total price is 92, which is unequal. However, profit, due to catastrophic socio-economic conditions, is only registered at 22, while, in turn, the price of production rate of profit is 7.3%, thus manifesting divergence in all of Marx’s holy economic equalities in the final analysis.

In this newly constructed economic model, the eateries sector is producing at a loss, despite the value rate of profit being extracted from the workforce at a positive 8%. The extra surplus value of 8 is either deteriorating via rotting food-commodities, or is simply wasted labor-power. The fact is that, because people are not eating out, or whatever, profit is registered in the negative at -10 and the price rate of profit is -10%., ultimately skewing Marx’s and TSSI’s holy economic equalities at the level of totality in the final analysis. As a result, according to this totally new, independent economic model, because there is significant losses in the restaurant/eateries sector while the chemical sector is in the black, all three of Marx’s holy economic equalities no longer equate, at the abstract level of economic totality, even if inputs and outputs are calibrated in a temporal fashion.

In addition, even if both sectors of this totalizing economic model registered positive numbers for surplus value, as long as there are significant profit losses, due to catastrophic pricing conditions, Marx’s economic equalities will not equate, despite the fact that, according to Marx, they should equate in the last instance. Of course, in response, Marx argues that “surplus value by no means coincides in the majority of cases with profit”,13 which Marx admits occurs at the level of everyday economic occurrences, but he certainly holds onto the verity that at the general level of economic totality total value and total price will, without a doubt, equate. The internal inconsistencies arise because Marx refuses to acknowledge the logical fact and consistency that deviating prices and values at the level of everyday economic transactions inevitably leads to deviations in total values and total prices at the abstract level of economic totality. You cannot have one without the other in the sense that deviations between price and value do not magically disappear at the level of economic totality. This is a contradiction in logic and rationality, which exacerbates the fact that Marx’s Capital is riddled with internal consistencies, if one honestly takes all of what Marx said into consideration.

In a classic Marxian statement, screaming of internal logical-inconsistency, Marx states “the sum of prices of production for the commodities produced in society as a whole—taking the totality of all branches of production—is [bound to] equal to the sum of their values”14 in the final analysis. Basically, regardless of rampant deviations at the level of everyday economic transactions, prices and values mystically equalize at the abstract level of economic totality. It might be argued that the three holy economic equalities eventually will equate, but this is not “proof” of logical-consistency, if it contradicts the dictates logic, itself, namely, that logical consistency pervades reality, from alpha to omega, not just the ephemeral plain of economic totality. Secondly, it might be argued that these results disproving Marx’s holy trinity of economic equalities, are not the final analysis; however, this depends on where one chooses to draws the finishing line.

All in all, it is internally and logically inconsistent to articulate that prices and values can differentiate, in everyday economic occurrences, while at the same time arguing that at the abstract level of economic totality, both the sum of prices and the sum of values magically equate, contrary to any logical reasoning. Consequently, this is logically inconsistent and contradictory, unless an arbitrary and artificial adjustment is perpetrated between the different sums of values and prices, an adjustment which can only be dishonest and simultaneous.  For instance, as Marx states, “whatever may be the ways in which the prices of different commodities are first established or fixed in relation to one another, the law of value governs their movement”;15 what Marx argues is that prices can be determined in a variety of ways, prices cannot be reduced to strict quantities of labor-time, despite somehow being governed by labor-time, nonetheless. Following Marx’s inherent logical-contradiction here, contrary to TSSI, we are dealing with two measurement systems, which Marx is trying to commensurate under one umbrella due to the fact that, at the absolute  level of economic totality, he wishes to claim that “surplus value and profit are, in fact, the same and even numerically identical”,16 which has just been proven is not the case in the final analysis.

In effect, contrary to Marx and TSSI, prices continually escape the strict confines of value measured in labor-time, namely, value strictly determined by the fundamental Marxist premise of labor-time, both in everyday economic occurrences and, following the dictates of logic, at the abstract level of economic totality. For Marx and TSSI, values and prices differ at the microscopic level of everyday economic occurrences, and then magically unify and equate at the abstract level of economic totality. This is an internal logical-contradiction; i.e., an internal logical-inconsistency in Capital, brought about by faulty premises. In fact, contrary to Marx and TSSI, differentiations between value and price occur both at the microscopic level of everyday economic occurrences and at the abstract level of economic totality, ALWAYS! Because both the soil and labor-power are sources of surplus value and because price-value differentiations at the micro-level of everyday economic transactions also means, following the dictates of logic, there are price-value differentiations at the macro-level of economic totality.

Marx’s holy economic trinity in actuality never equate, without serious readjustments and conscious machinations. Meaning TSSI, like Marx, cannot validate Marx’s holy trinity of economic equalities either. As a result, both Marx and TSSI are the subject of internal logical-inconsistencies, derived from their unfounded beliefs that price and value differentiations at the micro-level of everyday economic occurrences can magically unify and equate at the abstract level of economic totality despite having incommensurable foundations. Consequently, it is inconsequential whether inputs and outputs are determined in a temporal fashion and/or in a simultaneous fashion in the sense that, in the final analysis, contrary to TSSI and Marx, nothing equates because value and price cannot be distorted and reduced to labor-time. Nothing equates between value and price because value and price are not solely subject to the strict confines of socially necessary labor-time, meaning, value and price are two separate manners of allocating numerical sums onto commodities. Both value and price have two different incommensurable foundations for analyzing, assessing and determining worth. In effect,  they constantly clash.

Part III

Finally, another one of the many fundamental premises of TSSI is its fundamental claim that Marx was a single-system theorist, namely, that he conceived the price-system and the value-system as strictly founded on socially necessary labor-time, and being synonymous at the abstract level of economic totality, all the while both being interdependently constituted with each other. For TSSI, this interdependence ultimately validates Marx’s holy trinity of economic equalities. As states, for TSSI, Marx believed that at the level of totality, price and value equate, profit and surplus value equate and the value and price rates of profit equate, meaning, there can only be one system of economic measurement for determining worth; i.e., the price-value system.

Notwithstanding, there is ample evidence throughout Marx’s Capital that Marx conceived of value and price as two separate systems, that is, two independent appraisal systems for assigning numerical coefficients onto commodities. Both of which are different and in many instances, dissimilar, due to the fact that, contrary to TSSI, socially necessary labor-time is not the foundation of both. Of course, Kliman slyly slips into his narrative in Reclaiming Marx’s Capital that both value and price are determined by labor-time, but this is a machination. It is an attempt to disavow and pass over in silence what Marx, in fact, said. Namely, it is an attempt on Kliman’s part to square the circle, that is, to forcefully smash a square peg into a round hole, claiming Marx intended it to make sense that way.  As Kliman states, “values and prices…are measured in the same units”,17 meaning, they are both measured in labor-time due to the fact that, according to TSSI, value is always measured in labor-time, and likewise, price must also be measured in labor-time, if values and prices are to correlate interdependently and equate at an abstract level. The fact is that, according to Marx’s own words, there are two systems for assigning values and prices, both of which are founded on different, incommensurable premises.

Foremost, taking Kliman’s premise for granted, and assuming Marx wanted value reduced to the strict confines of socially necessary labor-time, we shall assume that the Marxist value-system is based strictly on socially necessary labor-time. However, contrary to TSSI, there are ample examples throughout Marx’s Capital that the price-system exceeds the strict confines of socially necessary labor-time and by logical extension the Marxist value-system as well, therefore, demonstrating that price and value are two different systems for assigning and determining worth founded on two different, incommensurable premises. For example, Marx argues in Capital (Volume One), the price-system can operate, and does operate, independently of labor-time calculations and the value-system. The pricing-system can only do this if it is a completely independent system from any value-determinations founded on labor-time.

As Marx states,  “the possibility that the price may diverge from…value, is inherent in the price-form itself”18 and the reason for these inherent divergences is the fact that price is not strictly, or if at all, based on labor-time, “the price-form…[for Marx]…harbors a qualitative contradiction, with the result that price ceases altogether to express value”.19 The reason price ceases altogether to express value is because price is inherently incommensurable with value; it is a system completely independent of value, due to the fact that it has a different foundation than the value-system. Marx is correct to argue that the problem of commensurability between price and value is inherent in the price-form as we are dealing with two different systems with two different foundations. And Marx readily acknowledges this when he states:

Things which in and for themselves are not commodities, things such as, conscience, honor, [vacant unused land] etc., can be offered for sale by their holders, and thus acquire the form of commodities through their price. Hence, a thing can, formally speaking, have a price without having a value. The expression of price is…imaginary.19

It may be correct, as TSSI stipulates, that the Marxist value-system is strictly founded upon labor-time, but the price-system certainly is not. In fact, the price-system, according to Marx, is founded on the imagination. As Marx states, “to establish…price it is sufficient for [a commodity] to be equated…in the imagination”.19 This means that value and price have incommensurable foundations. Marxist value is founded on labor-time and price is founded on the imagination. In essence, these are two different systems for assigning numerical sums onto commodities, stemming from two different foundations; i.e., incommensurable premises. Price can be accommodated to value, but this is a distortion and a reduction of the pricing-system to the Marxist value-system in the sense that the price-system, being founded on the imagination, exceeds the strict parameters of the Marxist value-system, that is, socially necessary labor-time. As Marx states:

Although invisible…value…is signified through [its] equality with [price], even though this relation with [price] exists in [the] head, so to speak….the expression of the value of commodities in [price] is a purely ideal act, we may use purely imaginary or ideal gold to perform this operation.20

Of course, TSSI acknowledges that “the distinction between value and price exists in real life”,21 but at the abstract level of economic totality, this distinction disappears; however, this is a logical contradiction within TSSI and Marx’s Capital, which invariably always reverberates across Marx’s holy trinity of economic equalities, forever destabilizing them, unless some form of gross numerical manipulations is enacted. Moreover, TSSI acknowledged that “Marx himself affirmed that value is a mental construct”,22 yet simultaneously TSSI argues that Marx’s “value is [strictly] determined by labor-time”.23. This is a logical contradiction in the sense that TSSI fails to notice that mental constructs, despite “being part of the real world”24 do not have to abide by the strict standards of the real world. There is much leeway and approximations as to the verity of mental constructs because being mental constructs, they are subjective, arbitrary and artificial fabrications, more or less privy to the imaginary whims of conceptual-perception.

Subsequently, contrary to TSSI, labor-time is not always the sole determining factor of value since it is a mental construct. As Marx states, price and “the life of the worker [also] depends on the whim of the rich and the capitalists”,25 meaning, “in its function as measure of value, [price]…serves only in an imaginary or ideal capacity”,26 it is an arbitrary, or ideal, connection subject to debate and discrepancy because price does not follow the parameters of scientific measurement, namely, those of socially necessary labor-time. The price-system is something imposed upon things, regardless of labor-time, due to the fact that the price-system is a system independent of the Marxist value-system. The price-system is its own independent system just as the Marxist value-system is its own independent system. The price-system has a different foundation than the Marxist value-system, which obeys the strict dictates of socially necessary labor-time while the Marxist value-system has a different foundation than the price-system, which obeys, more or less, the vagaries of the imagination; hence, how apples and oranges can be arbitrarily and artificially compared.

As Marx describes at the end of Capital (Volume One), in the United-States in order for the capitalist mode of production to take root in America, it was argued that “the government set an artificial price on the virgin soil, a price independent of the law of [value]…a price that compels the immigrant to work a long-time for wages before he can earn enough money to buy land”.27 This artificial price was a matter of power and imagination; and thus is the product of a different appraisal system than the Marxist value-system, which is based on labor-time. Consequently, there are two appraisal systems at work in Marx’s Capital, two evaluation systems running independently of each other, founded on different, incommensurable premises. One obeys the strict dictates of socially necessary labor-time, while the other does not, and is more or less based on the whims of capitalists; i.e., the power of the imagination. Ultimately, TSSI does not exonerate Marx of internal-logical-inconsistencies because there are two incommensurable, appraisal systems in Marx’s Capital, each functioning according to different incommensurable premises in assigning numerical coefficients onto commodities.

Conclusion

All in all, TSSI is unable to banish the claims that Marx’s analysis and law of value is riddled with internal-logical-inconsistencies. In fact, TSSI only exacerbates the internal-logical-inconsistencies of Marx’s Capital in the sense that to ascribe to the TSSI version of Marxism, requires one to overlook huge discrepancies in Marx’s Capital, namely, all the contradictory statements and premises, which skew the results and prevent any holistic understanding of Marx’s analysis and law of value. And maybe Marx wanted it this way due to the fact that capital, itself, is not a homogenized, internally, consistent system, but a system, itself, riddled with internal-logical-inconsistencies; i.e., contradictions. At best, if one is honest, scholarly and true to what Marx stated in Capital, without regressing into ideology, as Kliman has done, the law of value is a loose manner of conceiving how and why the capitalist mode of production functions and operates.

In actuality, Marx’s analysis is an approximation, which is not ironclad, but subject to loose parameters wherefore things are never exact and ultimately precise because Marx’s holy trinity of economic equalities, in effect, never do equate, both at the micro-level of everyday economic transactions and at the macro-level of economic totality. We must remember that Marx’s Capital is an ideal conception of the capitalist mode of production, not an exact replica of the capitalist-system, itself. The fact that some economists, like Kliman, can make Marx’s three holy economic equalities equate on paper can only be the result of gross numerical manipulations and readjustments, which forgo some of Marx’s premises in favor of other more sympathetic premises.  Essentially, the result of Marx’s economic equalities equating on paper can only be the outcome of ramming square pegs into round circular holes which were never meant to fit and/or equate.

Of course, according to Andrew Kliman: “TSSI demonstrates [that] it is possible to make Marx’s texts cohere [and] in cases such as this, the criterion of coherence clearly implies that interpretations that fail to make the text cohere are inadequate”,28 while those that make the text cohere are valid and of higher value. However, this is false if the interpretation that somehow makes a text cohere passes over in silence many of the contradictory premises this text states and bases itself upon. The point is not to make a text cohere; the point is to get an accurate sense of a text, even if it is riddled with irreparable internal contradictions as Marx’s Capital clearly is. There is no side-stepping this damning fact by retreating into the narrow-mindedness of ideology, and keeping a blind-eye to the internal-inconsistencies within Marx’s Capital. That is acting, talking, writing and teaching as if there are no internal-logical-inconsistencies within Marx’s analysis and law of value. This is just bad scholarship. Kliman’s Reclaiming Marx’s Capital is just bad scholarship in the sense that it is an intellectually dishonest output, which has side-stepped many of the blatant contradictions throughout Marx’s analysis and law of value, skewing the results by simply not addressing any contradictory statements and/or premises. To turn Kliman’s argument on its head, the very fact that Marx’s arguments can be interpreted by picking and choosing, accepting and forgoing certain Marxist premises for others so as to arrive at some form of distorted internal consistency concerning Marx’s analysis and law of value, demonstrates that internal consistency cannot be proven pertaining to Marx’s analysis and law of value since this internal consistency requires serious ideological blinders in order to be accurate, and more importantly, to be anywhere to being right.

No matter how much Kliman screams implausibility, invalidity, falsehood, and error, throughout his text at his detractors and those who disagree with TSSI, it does not make his interpretation right in the least, because to believe that TSSI has removed the verdict of internal-logical-inconsistency from Marx, one would have to lobotomize one’s mind. So the fact that Kliman, in the conclusion to Reclaiming Marx’s Capital, smugly bemoans the grounding fact that the myth of inconsistency holds and persists, even after-all of TSSI’s dubious conclusions, only proves that TSSI’s extremely reductive economic analysis and perspective has not eliminated the internal-logical-inconsistencies in Marx. TSSI has not removed the internal-inconsistencies within Marx’s Capital, because anyone with a working brain, regardless of education, can logically infer the internal contradictions within Marx’s analysis and/or law of value. Ultimately, Kliman is correct that “it is up to the present generation to set the record straight”,29 pertaining to TSSI, but he will not like the verdict since TSSI is certainly on the losing end of this debate. Indeed, history is proving most cruel in her verdict concerning Marxism and TSSI, a complete and total silence. So why are proponents of TSSI, like Kliman, fanatically “devoted to the pursuit of a theory with nothing but failure to show for it?”30 — in a word, ideology. And, with any homogenizing fanatic-ideology, as Max Planck put it, “truth does not triumph by convincing its opponents and making them see the light, but rather [triumphs] because its opponents eventually die”.30

  1. Andrew Kliman, Reclaiming Marx’s Capital, (United Kingdom: Lexington Books, 2007) p. 185.
  2. Karl Marx, Capital (Volume One), Trans. Ben Fowkes (London, Eng.: Penguin, 1990) p. 520.
  3. Karl Marx, Capital (Volume Two), Trans. David Fernbach (London: Penguin Books, 1992) p. 563.
  4. Andrew Kliman, Reclaiming Marx’s Capital, (United Kingdom: Lexington Books, 2007) p.13.
  5. Karl Marx, Capital (Volume Two), Trans. David Fernbach (London: Penguin Books, 1992) p. 567.
  6. Karl Marx, Capital (Volume Three), Trans. David Fernbach (London: Penguin Books, 1991) pp. 784-785.
  7. Andrew Kliman, Reclaiming Marx’s Capital, (United Kingdom: Lexington Books, 2007) pp. 3-4.
  8. Ibid, 2.
  9. Ibid. 144.
  10. Karl Marx, Capital (Volume Three), Trans. David Fernbach (London Penguin Books, 1991) p. 104.
  11. Andrew Kliman, Reclaiming Marx’s Capital, (United Kingdom: Lexington Books, 2007) pp. 26-28.
  12. Ibid, p. 28.
  13. Karl Marx, Capital (Volume Three), Trans. David Fernbach (London: Penguin Books, 1991) p. 141.
  14. Ibid, p. 259.
  15. Ibid, p. 277.
  16. Ibid, p. 139.
  17. Andrew Kliman, Reclaiming Marx’s Capital, (United Kingdom: Lexington Books, 2007), p. 32.
  18. Karl Marx, Capital (Volume One), Trans. Ben Fowkes (London, Eng.: Penguin, 1990), p. 196.
  19. Ibid, p. 197.
  20. Ibid, pp. 189-190.
  21. Andrew Kliman, Reclaiming Marx’s Capital, (United Kingdom: Lexington Books, 2007) p. 140.
  22. Ibid. 141.
  23. Ibid. 93.
  24. Ibid, p. 141.
  25. Karl Marx, Economic and Philosophic Manuscripts of 1844, Ed. Martin Milligan (Mineola, New York: Dover Publications Inc., 2007) p. 21.
  26. Karl Marx, Capital (Volume One), Trans. Ben Fowkes (London, Eng.: Penguin, 1990), p.190.
  27. Ibid, p. 938.
  28. Andrew Kliman, Reclaiming Marx’s Capital, (United Kingdom: Lexington Books, 2007) p. 62.
  29. Ibid, p. 212.
  30. Ibid, p. 209.

The Balkanization of South America and the Role of Fifth Columns Throughout the World

During the recent meeting in Caracas of the Venezuelan Presidential Economic Advisory Commission, in mid-June 2018, President Maduro said something extremely interesting, but also extremely disturbing, nonetheless highly important for the region to be aware of. Mr. Maduro mentioned Yugoslavia, the foreign induced local conflicts, the breakup and dismemberment of Yugoslavia, starting with the “Ten Days War” on Slovenia in 1991, the Croatian War (1991-95); the Bosnia War (1992-95); the Kosovo War (1998-99), culminating with the Clinton induced 69-day NATO bombing of Kosovo, under then European NATO leader Wesley Clark (today the Repentant – in retrospect it’s easy to be sorry), pretending to save the Kosovo Albanians from Serbian Milosevic’s atrocities. How Milosevic served as a patsy for the imperial forces is another story.

All of this would not have been possible without a decade long preparation by several Fifth Columns infiltrated and trained in and outside of Yugoslavia, the only country in Europe that in the 1980s and 90s flourished, with general well being above that of the average Europeans, who were suffering recessions and increasing inequality, the beginning of xenophobia in the age of nascent neoliberalism. There was no extreme poverty in Yugoslavia, but prosperity without excesses for everybody. There was economic growth under a loose Mao-model socialism which could, of course, not be allowed to persist, lest it might serve the world as an example. Besides the breakup of Yugoslavia into chaos was needed to create mini-states that are in conflict with each other, some of them still today, and that could be ‘accommodated’ against a hefty ‘fee’, of course, to accept the installation of NATO bases ever an inch closer to Moscow’s door step.

Well, Mr. Maduro saw and sees it clearly. History repeats itself all too often, especially when it comes in the form of western neoliberal-neofascist atrocities, as people’s memories are dulled with lie-propaganda. In fact, there is hardly any real news, only ‘fake news’ in the western mainstream media. Mr. Maduro envisions that “their” plan for Latin America is similar to what “they” did to Yugoslavia. He is probably right. All signs point into this direction.

A pact between Colombia and NATO, a so-called “Security Cooperation Agreement” was first signed in June 2013 but prepared way before. Records of first communications to this effect, by Juan Manual Santos, then President of Columbia and Peace Laureate in 2016 for his traitorous Peace Agreement between the Colombian Government and FARC (vaya-vaya! Doesn’t this speak volumes by itself?), can be traced back to early 2012.

President Hugo Chavez was the first one to warn his Latin American partners of the imminent clandestine infiltration of NATO into South America. Nobody listened. Today it’s a fact, too late to fight against. NATO troops are occupying gradually all seven American military bases in Colombia. They are just simply converting from US to NATO bases – sounds more palatable than US bases – for sure. In the minds of unfortunately still most uninformed or mal-informed people, NATO stands for security. NATO – the North Atlantic Treaty Organization – in South America. What an oxymoron! Well, it is the same ‘security’ farce as is NATO in Afghanistan and bombing the Middle East.

Venezuela is full with Fifth Columnists. They are the ones that facilitate the highly speculative and inflationary manipulation from Miami of the black-market US dollar rate in the streets of Caracas; they are the ones that emulate the food shortages in Chile 1973, successfully disappearing duly paid-for imported merchandise, mostly food and medical supplies, ending up as smuggle-ware in Colombia, leaving empty supermarket shelves in Venezuela. All meant to instigate people to stand up against their government.

So far, this strategy has failed bitterly. On 20 May 2018, President Maduro has been overwhelmingly re-elected, under the most internationally observed elections the world has ever experienced, and the result was “the cleanest, most democratic elections we have witnessed in our history of worldwide 92 election observations”. So said the US-based Carter Institute.

Yet, the Fifth Columnists are relentless. Worldwide. They are immersed in the government apparatus, institutions, military, police – even Parliament and very important in the financial system, possible in the central bank. They “allow”, or rather promote, the manipulation of the US-dollar black market, causing sky-rocketing inflation and lack of food and medicine on supermarket shelves. They disrupt electricity, internet and water services. The approach is similar in every country that refuses to bend to the empire’s dictate. In Russia, Iran, China, Syria, South Sudan, possibly even in Cuba they are in control of the financial system – that’s also how they are easily being financed, through the dollar-based monetary fraud of the west, to which most countries still have some links – fortunately every day less.

Take Russia, the Central Bank is still largely run by the Fifth Columnists, whose ‘chief’ is Putin’s just recently re-appointed Prime-Minister, Dmitry Medvedev, an arch-Atlantist. The structure of the Russian Central Bank is even today mainly a remnant of the Russian Reserve Bank, designed by the FED after the collapse of the Soviet Union, with the help of the UN-masked Bretton Woods crooks, the IMF, World Bank.

Similarly, part of the masked international promoters of instability, are the Bretton Woods regional associates, the so-called regional development banks, the Inter-American Development Bank (IDB), the Asian Development Bank (ADB), African Development Bank (AfDB) and their sub-regional cohorts. In the nineties, the Gang was joined by WTO (the World Trade Organization). And here they are, the world’s three most hated international UN-backed financial and trade organizations, IMF, World Bank and WTO. All three are promoting fundamentalist “free-marketeering” across the globe, especially throughout the southern hemisphere (though Greece and southern Europe do not escape), indebting and enslaving countries to the western corporate oligarchs. All well-structured to control the world’s financial system – so as to march towards world hegemony of a One World Global Economy. We are almost there, though not quite yet. There is always hope. Man’s last shred to hang on to life is HOPE. And only Man can translate hope into reality. So, as long as we have life, it’s not too late.

Why is it so difficult, say, impossible to get rid of them, the Fifth Columnists, the vermin of any unaligned political system? Why did President Putin re-assign Medvedev as his PM?  Mr. Putin knows that he supports a network of Atlantist oligarchs that seek nothing more than to ‘putsch’ him, Mr. Putin, and ultimately to destroy the rather egalitarian, though capitalist-based, economic system Russia has enjoyed for the last almost 20 years, becoming self-sufficient in agriculture, food, industry, high-tech science, pharmaceuticals. Russia has developed herself into an exemplary “Resistance Economy”, ready to be emulated by any western-named ‘rogue’ state that is sick and tired of the Empires boots and bombs and forced ‘democracies’ through ‘regime change’.

There are many western countries that just wait for a leader, one that moves head-on. Russia, China, Venezuela, Iran, Cuba, are shining examples. They are gradually escaping the yoke of the dollar-dominated western economy.

So, why are countries like Russia, Iran and maybe Venezuela afraid to get rid of their Fifth Columnists? For fear of a civil war, of a blood bath? Yes, we have seen the violent unrest they caused in preparation of the two major democratic elections in Venezuela in the last 12 months, the National Constituent Assembly (30 July 2017) and the Presidential Elections on 20 May 2018, when altogether close to 200 people died. The media immediately blamed the death on police and military oppression and violence but the only armed protesters were those armed and funded by Washington, and responsible for more than 80% of the death. Chavistas cheered for their Government with their bare fists.

The question remains in the room – why does Mr. Putin not get rid of them, the Fifth Columnists?  Would they cause a civil war?   It seems to me they wouldn’t have sufficient supporters in Russia, but they could disrupt the internal economy, as the Russian internal financial systems, especially private banking, is still in the hands of these Atlantists. They are also in China, but it appears that President Xi Jinping has better control of them.

How about Iran? Why are they still able to hold on to and fight for ‘western deals’; i.e., the upholding of the Nuclear Deal that Trump has stepped out from and now is sanctioning Iran ‘with the most severe sanctions the world has ever seen’, sounding similar to what he said to Mr. Kim Jong-un, the ‘Little Rocket Man’, with whom Trump then made peace a few weeks later?  Or something like it. One never knows with the Donald what the meaning of Trump’s trumpeting is, other than screwing up alliances and creating physical and sociopsychological chaos. He is also threatening European corporations, mostly oil companies, with heavy sanctions if they dare maintain their contracts with Iran.

Many cave in. Among them, the French-UK owned Total, Italy’s Eni and Saras, Spain’s Repsol and Greece’s Hellenic Petroleum. In the case of Total, according to the director of the Venezuelan branch, instead of filling their contracts with US-“fracking” oil, as Trump would expect, they are negotiating with Russia, to fulfill their obligations in Europe and elsewhere. “We cannot trust Brussels to fend for us, therefore we have to fend for ourselves”, the Total representative said.

Iran doesn’t really need the Europeans to buy their oil. Europe constitutes only about 20% of the Iranian hydrocarbon market – an amount easily taken up by China. The same with other European corporations that may choose similar ways of self-protection – cutting ties with Iran – like the Peugeot-Citroen automobile giant. Iran doesn’t need them. That these sanctions and EU corporate reactions to the US sanctions, are causing hardship and unemployment in Iran is just western propaganda, a vast exaggeration, at worst a temporary affair. As Mr. Rouhani said, we might go through a short period of difficulties but will recover rapidly by becoming self-sufficient. And that’s true. Iran is well embarked on their “Economy of Resistance”, aiming at self-sufficiency through import-substitution and orienting themselves towards eastern markets.

In fact, Iran is already part of the Eurasian Economic Community and will soon become a full-fledged member of the Shanghai Cooperation Organization (SCO).  So why can Iran not get rid of their Fifth Columnists? This is a question I can only answer with “fear from bloody civil unrest, prompting possibly western military intervention”.

Back to Venezuela, it could be similar fears that prevent the Maduro Government from taking drastic actions, like declaring a temporary state of emergency and drastic measures of de-dollarization to stop inflation and speculation, and strengthen the local currency, the Bolivar, by backing it with their internationally accepted cryptocurrency, the Petro.

On 20 May 2018, six million Venezuelan’s mostly Chavistas, voted overwhelmingly for President Maduro and his Government, a 68% majority, representing a solid block of people supporters. If you have the choice between an artificially made-to-starve population and a crumbling what used to be a solid block of 6 million Chavistas behind you but gradually disappearing because of lacking actions by the government, what do you do? Perhaps the only way is to economically isolate the Fifth Columnists or Atlantists, despite their apparent control of the economic system. What Atlantists are actually controlling is the dollar-based economy. Quitting the dollar-base, they may become rather powerless.

Venezuela faces a dire dilemma: Die or be killed. Venezuela has already started moving out of the dilemma, with the creation of the totally dollar-detached Petro, the government controlled blockchain currency based on hydrocarbons and precious minerals. Today, Venezuela imports about 70% of their food, and guess from where?  You guessed right – from the US of A. Thus, de-dollarization at first sight is a challenge.

Therefore, a massive diversification of imports, and efforts to become food self-sufficient, is in the order. Venezuela has the agricultural potential to become 100% food self-sufficient. In the meantime, Russia, China and other Eurasian countries will substitute. Venezuela may apply for SCO membership. Why not? After all, China has already about 50 billion dollars’ worth of investments in Venezuela, mostly in hydrocarbons, and just declared making another 5-billion-dollar equivalent loan to refurbish the Venezuelan petrol industry. China and Russia have big stakes in Venezuela, an excellent defense strategy. Now, Venezuela’s membership in the SCO would be another big step away from the dollar economy.

The Balkanization of Latin America is already happening. When Mr. Maduro referred to the 7 US bases in neighboring Colombia, aka, now NATO bases, with a porous 1,500 km (out of a total of 2,000 km) uncontrollable jungle border with Venezuela, and even open and welcoming borders with Peru, Ecuador and Brazil, he said it all. It will be easy to suffocate any uprising – NATO will do it, by now the generally accepted world police, as generally accepted as the recently intact, totally unelected and self-appointed world government, the G7. They are now crumbling, thank heaven for Mr. Trump’s egocentric pathology, his “Let’s make America Great Again”; and thanks to Mr. Putin’s non-intervening but strategic sideline observance.

Will Trump continue to provide majority support for NATO? He recently warned the Europeans to contribute their share; i.e., increasing their NATO contribution to 2% of their GDP – or else. Well, what is “else”?  Reducing NATO, an enormous cost to the US?  And counting on the CIA-trained and NED-funded destabilizing insurgents (NED = National Endowment for Democracy, a state department financed “regime change’ and “democratization” NGO) throughout the world? Insurgents in alliance with the local Atlantists? Will this be enough in a rapidly changing international monetary and payment system?

The US scheme for Balkanizing Latin America, and by extension the world, is as porous as the 1,500 km long tropical forest border between Colombia and Venezuela. The hegemony of the dollar-economy hangs in the balance. Only drastic actions by victimized but courageous countries, like Venezuela, Iran and Russia can break the balance and destroy the western monetary hegemony.

A Fatal Incompatibilty: Big Business and Human Survival

Dramatic as the title of the article is, it is becoming increasingly clear that this is not hyperbole or hysterics. It is the only logical conclusion one can arrive at if one analyses the facts of our current situation as a species.

Commerce has existed for thousands of years, with private and government-owned companies providing goods and services for sale, largely unregulated for most of that time. Of course, government has always had the capacity to intervene where business practices have been found to be unsafe or unethical, for the protection of society.

As economies have developed beyond a mostly agricultural foundation into a consumer-driven industrial system, corporations have gained increasing economic, social and political influence. Although there is now an enormous quantity of legal regulation in relation to the conducting of business (in the developed world particularly) corporations exert such a huge influence on countries (democratic or otherwise) that we could accurately be described as living in an age of corpocracy. The infiltration of governments by corporate interests is so severe that governments are almost powerless to prevent the wholesale destruction of our environment and huge damage to humanity without causing a worldwide economic collapse.

Most corporations are not owned by one or a few individuals any more. Generally a large number of unknown individuals (shareholders) own them, to whom the directors are solely answerable. In almost all cases, the priority of the shareholders is the maximising of dividends and share prices, which companies achieve by creating as much profit as possible within a given time frame; e.g., per quarter year.

As a result of this priority of creating profits, above all other activities, companies have a long history of ignoring ethical concerns or paying lip-service to such issues in order to avoid any negative impacts on profitability. Considering the continual impact of corporate donations and lobbying on the political process and subsequent regulation, it is clear that corporations have deliberately attempted to prevent or diminish assessment and legislation that might adversely affect them.

There are a multitude of examples of big business attempting to conceal nefarious practices or to prevent any actions to control or end them. It would be easy to write a huge tome on the subject but here I am only going to refer to a few of the most famous and serious examples of corporate irresponsible behaviour.

The production of energy that fueled the industrial revolution, the expansion of commerce, science, technology and the massive growth of human populations is a dirty business. This began with the discovery of coal and its crucial role in the use of steam power. It was clear from the start that coal was at times dangerous to mine, potentially explosive and extremely dirty to burn, as is still the case today. Crude oil and natural gas have long since overtaken coal as energy sources of prime importance, but these too are flammable/explosive and extremely damaging to the environment when burned but particularly so if leaked. Nuclear power, the youngest of the destructive energy industries, likes to portray itself as clean when the reality could not be more different. Apart from well-known polluting disasters such as Three Mile Island, Sellafield, Chernobyl and Fukushima, nuclear power produces huge quantities of troublesome waste that remain radioactive. This waste remains dangerous for centuries or millenia and the industry still has no way to decontaminate it or to guarantee permanent safe storage.

Throughout its history the energy industry has downplayed or dismissed health and environmental concerns in order to continue maximising profits – any changes that have arisen have been fought against and succeeded only due to overriding public pressure. Examples of this are the smog and acid rain from coal burning, lead poisoning due to tetraethyl lead in petrol, radiation leaks in nuclear power stations, oil and gas spills in the marine environment and most recently contamination of land and water from fracking. In each case, despite clear scientific evidence to the contrary, the energy industry has attempted to dismiss dangers, conceal or discredit incriminating data, avoid accepting responsibility and minimising reparations for disastrous incidents.

Even now, when overwhelming scientific evidence proves that these industries are polluting, unsafe and detrimental to all life on Earth, they continue not just to fight for their survival but try to expand and curtail any attempts to contain them. All this is still occurring despite almost universal government and public acknowledgement of the need to gradually close down these industries in order to secure the future of humanity.

The same problem is to be found in a wide variety of other industries. The tobacco industry is one of the most obvious examples – for decades it has fought against regulation despite knowing, all along, that its products are dangerous and entirely detrimental to health. The pharmaceutical industry was most famously scandalised by the Thalidomide catastrophe of the 1950s and 1960s but despite many benefits to humanity this industry is also responsible for repeated cover-ups, creating wide-scale dependency on addictive prescription drugs, over-prescription of antidepressants, causing antibiotic resistance through over-use and environmental pollution, all in the name of profit expansion.

Plastics, an offshoot of the oil industry, seemed like a manufacturing miracle but it has turned out to be a nightmare for humanity and a vast number of the world’s species. Despite increasing evidence of planet wide pollution and damage to huge numbers of species, including humans, the industry continues to fight against change and much needed regulation instead of attempting to transition to bio-plastics and reinvent itself.

Another major offender is the agricultural and food industry, which has been hugely responsible for the degradation of the environment. Apart from continual reckless deforestation, agriculture is responsible for damaging top soil run-off and pollution of rivers and seas with pesticides and fertilizers. In the 1960s DDT famously caused huge numbers of bird, insect and animal deaths as well as dangers to humans leading to it being banned. Despite improvements in regulations, pesticides continue to have a catastrophic effect on the environment (bees in particular) and contamination of our food and water is still occurring all across the globe. Irresponsible farming practices are degrading the environment, increasing desertification, causing water contamination and biodiversity loss; overfishing is depleting the oceans; genetically modified organism of questionable safety are entering the food chain, all of which is despite wide-spread public opposition.

These are just a few areas that I’ve chosen, but the list is almost endless – in virtually every area of industry and corporate activity attempts have been and are being made to circumvent or decrease regulation, deny responsibility and avoid adopting practices that will affect profitability. Self-regulation and government regulation has almost entirely failed to prevent unchecked growth at the expense of humanity and the environment we depend on. Perhaps the side-effects of industrial society were not so evident decades ago and one can assume businesses generally are not created with the intention to destroy the fabric of life. However, due to decades of solid scientific evidence, no-one can plead ignorance any longer regarding the dire situation humanity has placed itself in.

Short-sighted as it is, governments are so influenced by the corporate sector and by fear of economic instability that they are able to offer little more than token gestures or reforms over such a long timescale that they are too little, too late. Apart from a sudden and catastrophic economic collapse, there is little to indicate that the behemoth of corporate big business is likely to change its destructive practices in any significant way or stop attempting to prevent or diminish restrictions upon it.

So given, that the corporate world is most likely to continue to act against the greater interests of humanity (and ultimately itself) what can we do about the situation? Although we may feel powerless as individuals to effect change in the world, especially when faced with the enormous power of the corpocracy, we do in truth wield massive economic power. In the absence of governments fighting our corner with any sincerity, it is up to us to wield the only weapon we have in the effort to force corporations to change their ways.

The one and hugely powerful weapon we have is our choice as consumers. What corporations want and need most of all is our money; without it they cannot function and without consumers to buy their products they have no reason to exist. While campaigning to governments should not be abandoned, it is of unpredictable worth, with no guarantee of success – another approach is required. Direct action in the form of consuming less or withdrawal of custom has an immediate and severe effect on any business if enough people are prepared to take part.

If we meekly wait for government regulation to kick in and curtail the rampant irresponsibility of the corporate sector, then there is little chance of major change happening before the collapse of human society is unpreventable. If, however, we as concerned consumers, vote with our wallets and also let companies know why we are doing so, then businesses that wish to survive will be forced to change. In a revitalized society where the consumer calls the shots businesses that are able to embrace environmentalism, revolutionize their products and methods will succeed. In the past, when businesses that failed to adapt to new trends or new technology they simply disappeared, sometimes extremely rapidly. That is still the case today. Businesses that fail to adapt to consumer demand for ecologically responsible trade and a move away from putting profit above all else can be forced to change their stance or face extinction.

Personally I would rather suffer the economic effects of irresponsible businesses ceasing to exist than see the continued rapid extinction of species and degradation of our planet. Ultimately we as individuals have the power to change our own behaviour and demand that corporations change theirs. The time available to bring this transition about is not unlimited. In a decade or two it may already be too late; now is the time to turn the tables on big business and force it to change its ways.

The Peoples’ Capitalism

Introduction

America began as a plutocracy and rather quickly evolved into a corpocracy, or an unequal partnership between Corporate America and Government America, with the former controlling the latter. We now call the plutocracy the power elite of the corpocracy, and it is this power elite that is responsible for America’s economy and its capitalistic economic system. Both the economy and the system serve the power elite, obviously, and not the common good. Assuming you are not one of the power elite, you, like me, are on the short end of the stick. How short depends generally on what your socioeconomic status is. The stick is very short for America at large, for it is becoming, if it hasn’t already gotten there, a third world country, which means a substandard living for many of the citizenry.

I once raised the question, “Is America going to Hell in a handbasket?”1 If it is, there are three “isms” why; imperialism, militarism, and capitalism. There is absolutely nothing intrinsically good about the first two isms. There is no good imperialism, no good militarism. Not so the third ism. All America has ever known and used is bad capitalism. But as Parts 1-9 have shown us, there are many visions of a good capitalism. However, there are probably millions of people, especially socialists, who insist there is no good capitalism. Well, they can believe whatever they want to believe.

That being said, what do I have to offer in this last part, Part 10, of the ten-part series on “economic sanity and alternative economic systems”? A “peoples’ capitalism,” a good capitalism, is what I have to offer. It does not stand alone. It stands on the shoulders of the non-economist thinkers who preceded me in Parts 1 through 9.

The Lodestar for The Peoples’ Capitalism

The lodestar tells us what to aim for, the end goal, which is the creation of a fully functioning peoples’ capitalism, and how we know if we get there. The lodestar is nothing more nor anything less than that prescribed in the first 28 Articles of the United Nations Declaration of Universal Human Rights. At first blush some of the articles seem to have nothing or little to do with a nation’s economy and its economic system, yet these 28 rights could never materialize under bad capitalism.

(1) Innate freedom and equality
(2) Ban on discrimination
(3) Right to life
(4) Ban on slavery
(5) Ban on torture
(6) Right to recognition as a person before the law
(7) Equality before the law
(8) Right to effective judiciary
(9) Ban on arbitrary detention
(10) Right to public hearing
(11) Right to the presumption of innocence
(12) Right to privacy
(13) Right to freedom of movement
(14) Right to asylum
(15) Right to a nationality
(16) Right to marriage and family
(17) Right to own property
(18) Right to freedom of thought and religion
(19) Right to freedom of opinion and expression
(20) Right to freedom of assembly and association
(21) Right to take part in government
(22) Right to social security
(23) Right to work
(24) Right to rest
(25) Right to an adequate standard of living
(26) Right to education
(27) Right to participate in cultural life
(28) Right to a social and international order.

Ordinarily, I regard the UN as a worthless entity, a pawn of the world’s power elite, particularly that of America’s corpocracy, but I give the UN credit at least for enunciating the above principles. But I must discredit if for being feckless. No nation can expect UN enforcement of the 28 rights. The UN declaration is like all corporate codes of ethics, paper principles to be preached and never practiced.

The Lodestar’s Lodestar: Article 25

Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control. Motherhood and childhood are entitled to special care and assistance. All children, whether born in or out of wedlock, shall enjoy the same social protection.

All the other articles are represented in one way or another in Article 25. We must look to it for the criteria for determining whether every human being has the essentials for an adequate living and nothing less. If they do, then it is at least partly due to some form of socially responsible capitalism. Adequacy, of course, is the minimum standard. Millions of Americans and billions of other peoples have far less than an adequate standard of living. They have a miserable standard of living.

Developing criteria, or indicators of progress and reaching the goal, used to be among the mainstays of my working career, but no more. I shall turn that responsibility over to a task force of special people to be identified next.

Setting the Stage for True Reform

Let’s assume the following stage setting. My proposal for a U.S. Chamber of Democracy (USCD) has been implemented.2 It has commissioned a task force, peopled by the non-economists highlighted earlier in this series along with Aristotle and Marx in absentia, and charged with developing and publishing under the auspices of the USCD a proposal for a new national economic policy and a new economic system, the peoples’ capitalism. The proposal would include strategic initiatives, a time table for finishing, and indicators of progress.

The task force would also be charged with polling the opinions of middle class Americans, the socioeconomic group essential to any true democracy and viable economy, and then melding the solicited public opinion with the draft proposal.

Additionally, the USCD would implement my proposal for establishing the “democracy’s commandos,” comprising nearly 20 groups of disgruntled or otherwise receptive Americans numbering in the hundreds of thousands to apply pressure on the corpocracy’s power elite, including its corrupt politicians, to implement the proposal or suffer the consequences.3

The task-force’s strategic initiatives are mostly mine. That is, after all, my prerogative since I fathered the task-force! I have written reams of real and virtual paper identifying and explaining the strategic initiatives necessary for ending the corpocracy (including its endless spying and warring) and achieving true economic reform.4  I will spare you the details and the time by listing in no particular order just those 19 initiatives necessary to create the “peoples’ capitalism” and then arbitrarily pick and summarize just one of them. But I guarantee you, all 19 are solid initiatives, and if they were all achieved America would have a new economic system, the peoples’ capitalism.

(a) End Free Market Ballyhoo;
(b) End Fear Mongering Over the National Debt;
(c) End Privatization;
(d) End Economic Disparities and Poverty;
(e) End Trickle-down Economics Hokum and Blaming the Poor for their Poverty;
(f) Move toward “An Acceptable” Level of Employment;
(g) Increase Wages;
(h) Reduce the Costs of Daily Living;
(i) Move toward a Quality American Education;
(j) End Shut-Out Capitalists: So Much Capitalism, so Few Capitalists!
(k) End Wall Street along with Financial Speculation at Home and Away;
(l) Replace Bad with Good Globalization: Localize More, Globalize Less;
(m) Abolish the Unholy Trinity: The WTO, WBO and IMF;
(n) Repeal Existing Trade Agreements;
(o) End Unsustainable Development and Ovidian Growth;
(p) Make Commerce Greener;
(q) Replace Private Banks with Public Banks: Starting with abolishing the FED;
(r) End Elitist Corporate Pay for Socially Irresponsible Performance; and,
(s) Share Democracy’s Cost Fairly.

I will arbitrarily pick the last initiative, “Share Democracy’s Costs Fairly” and summarize it.

The task force would consider all good ideas on how to achieve fair-share taxation, including Barnes’ proposals for common tax credits. Just as importantly. the task force would peer through the corpocracy’s veil and do a “tax-escape” audit” of all forms of corporate welfare, including tax havens, tax cuts for the filthy rich, etc.5 While this exercise is being done, the aforementioned poll would include asking the polled to rate the importance of the UN’s Articles. Finally, democracy’s commandos would be told about the findings and asked if they would be willing to apply their democracy power to end corporate welfare for the sake of the general welfare.

In Closing

I will close with these short remarks. Yes, neither the USCD nor the democracy commandos exist, but not for my lack of trying for 10,000 or so hours on and off for several years. Yes, it is a wish list of 19 initiatives, but they represent thoroughly studied ideas, and from ideas flow change if opportunities arise. Yes, up against America’s mighty corpocracy, it’s the corpocracy’s ideas that prevail. From those three remarks conclude what you will about the peoples’ capitalism or any other significant reforms in the economic arena ever occurring.

Recapping Parts 1-9

Part 1: Economic Sanity and Alternative Economic Systems introduced this 10-part series on economic sanity and alternative economic systems. I told readers “Never mind that I am not an economist. Instead, please appreciate that I am not an economist.” That led to me trotting out for the umpteenth time my “human equation” for explaining anything involving humans. Getting closer to the subject at hand, I went on to say that “human behavior, even habitual behavior, needs to be motivated. At the heart of human motivation are values, beliefs, attitudes, needs and wants, with the latter two being the most relevant for the topic of this series. Human needs and wants are the bedrock of any economy and any economic system. Money is not the bedrock. It is simply a medium. There was no money when the earliest humans started needing and wanting. Debt, as some economic thinkers think, is not the bedrock. Debt is merely an offshoot of a usually uneven transaction. And since no human, not even a member of a society’s power elite, is self-sufficient, satisfying one’s needs and wants will in one way or another depend on what some other human beings do. So, you see, the psychology of human nature is the bedrock of economics, any economy and any economic system.” While I truly believe what I just wrote, it also gives me passage to writing about economies and economic systems as a psychologist!

Part 2. Economic Insanity Up Close. This article summarizes Roger Terry’s book on “economic insanity.” He is a non-economist and a responsible businessman. Terry contends that the growth-driven capitalism of big, authoritarian, and unaccountable organizations is devouring the American dream. Terry’s features of a new economic system would be a structurally different capitalism, one we’ve never seen before. It would be a “Nation of Owners,” in which there are three levels of ownership: (a) small enterprises, like his own, with the founders and a few partners who share ownership commensurate with their seniority and other factors like start-up funding; (b) larger enterprises, the corporations of today, would be owned collectively by their members, who would elect managers for limited terms of office; and (c) public enterprises, such as utilities, education, defense, and the like, would be created and managed by public boards or local governments. Now that I would add and enthusiastically emphasize would be real economic sanity!

Part 3. Notes on Some Classical Thinking. In this article I “pick the brains” of Aristotle, Adam Smith and Karl Marx. I close by telling readers I’m leaving Smith behind and feel much closer to Aristotle and Marx.

Part 4. The Fringe Economy. Part 4 reviews the book, Short Changed, Life and Debt in the Fringe Economy, written by Howard Karger, who at the time was a professor of social policy.

The fringe economy preys on the poor through seven different medium all controlled by corporations; pawn shops, the credit card industry, alternative financial services such as check cashing and rent-to-own, fringe housing, real estate speculation and foreclosure, the fringe auto industry, and the “getting-out-of-debt” industry such as the multi-billion dollar debt management business. The solution, Karger thinks, is not to eliminate the fringe market because mainstream services are not as accessible physically or as culturally compatible to poor neighborhoods. He suggests numerous solutions, some more plausible than others that would accommodate the realities of these neighborhoods while also eliminating some of the abusive and fraudulent practices of doing business with the people who live in those neighborhoods.

Part 5. Six Economies. This is a review of Riane Eisler’s book, The Real Wealth of Nations. I am not going to summarize it here. She is a genius. You need to read her book.

Part 6. Natural Capitalism: Creating the Next Industrial Revolution. The authors of Natural Capitalism argue that it is needed to “create the next industrial revolution.” They warn that if we continue to ignore the value of natural capital; i.e., nature’s life-support systems for humankind, there will come a time when there won’t be any more life support. My rejoinder was that “America doesn’t need the next industrial revolution. America needs a new and better capitalism that enfolds industry without its corpocracy.”

Part 7. The Uncommon Commons. This is a review of a book, Capitalism 3.0: A Guide to Reclaiming the Commons, by Peterr Barnes, co-founder, president, or a director of various socially responsible businesses. He wants “capitalism 3.0” to replace “capitalism 2.0,” the existing economic “operating system.” He complains that corporations, with no resistance from “our” government, are privatizing the commons, profiting from it and externalizing the costs. He defines “the commons” as assets we all share by inheriting or creating them together and subdivides them into three sectors, nature, community, and culture. Together they represent our “common wealth” in contrast to our “private wealth.” Barne’s proposals are among the most unique I’ve ever read on capitalism and deserve your attention.

Part 8. Shared Capitalism. Jeff Gates wrote a book jam packed with ideas about what he calls “shared capitalism for the twenty-first century.” He was once counsel to the U.S. Senate Finance Committee (1980-87). In this role, Gates crafted federal law on employee stock ownership plans (ESOPs) and pension plans. In other words, he worked for the corpocracy, and that opened his eyes! Unshared capitalism, he argues, while made to order by the corpocracy, is totally unfit for a democracy. His solution is to make widespread ownership a specific goal of national economic policy. His opinion that people take responsibility for what they own resonates with me, having watched for two decades party-going renters misbehave and scar property in an ocean-side condominium where my wife and I owned and never rented a unit.

Part 9. Spiritual Capitalism. Dana Zohar and Ian Marshall wrote the book, Spiritual Capital: Wealth We Can Live By.  Zohar is broadly trained and thus taps into diverse resources such as classical literature, physics, religion, and psychology. Marshall is a Jungian-oriented psychiatrist and psychotherapist. The authors argue that material capitalism, the kind that predominates in America’s corpocracy, is unsustainable, depleting our natural resources, creating political and social instability, eroding our moral standards, and degrading the very meaning of life in terms of its deepest values and aspirations. Rather than reject this conventional capitalism altogether, however, the authors advocate transforming it into a more positive, sustainable economic system that they call “spiritual capitalism” in the secular, non-religious sense.

It’s defined as the amount of knowledge and expertise available about “meaning, values, and fundamental purposes.” It produces not material wealth that ultimately consumes itself but a self-sustaining wealth “that enriches the deeper aspects of our lives.”

The authors are creative thinkers who forced me repeatedly to think outside my own relatively narrow paradigms. There is much about their views and ideas with which I agree. Yet, the authors’ analysis of the problem and their proposed remedy are too unbalanced and insufficient. Material capitalism is far more than what they call a crisis of motivation. Many other factors contribute to the failings of traditional capitalism. Moreover, relying on a critical mass of business people to shift upwards their spiritual intelligence, as they propose, is naïve and simplistic in my opinion.

Part 10. The Peoples’ Capitalism. You are reading it now.

• Part 1 here; Part 2 here; Part 3 here; Part 4 here; Part 5 here; Part 6 here; Part 7 here; Part 8 here; Part 9 here

  1. Brumback, GB. “Is America Going to Hell in a Handbasket?” The Greanville Post, March 29; Uncommon Thought Journal, April 21; Cyrano’s Journal, April 22, 2013.
  2. See my book, The Devil’s Marriage: Break Up the Corpocracy or Leave Democracy in the Lurch, 2011.
  3. Ibid.
  4. See also my books Corporate Reckoning Ahead, 2015, and America’s Oldest Professions: Warring and Spying, 2015.
  5. Editorial. $100 Billion the Country Could Use. The New York Times Online, March 13, 2009.