Category Archives: Free Market

The Stock Market Produces Nothing

On June 2, 2020, Jan Dehn of Ashmore Investment Management Limited remarked:

If central banks were to allow asset prices to reflect the actual underlying fundamentals – record levels of debt, record low productivity growth, record unemployment, record populism – the resulting crashes in financial markets would be so large that most Western economies would be plunged into deep and lasting depressions.1

Putting aside the fact that many countries and regions are already in a deep and lasting economic depression that started long ago, the stock market is once again rising thanks to massive non-stop infusions of digital dollars from the private institutions of the rich like the Federal Reserve. Central banks in other parts of the world are also printing colossal sums of money around the clock. However, no jobs or social programs are being printed.

Like the banks, the stock market produces nothing. Neither creates value. Both are driven by anti-consciousness and both are a drain on the socialized economy.

While the stock market reflects the contradictions inherent to the capitalist economic system and is not an entity unto itself completely detached from the production of goods and services, stocks themselves are not the economy. Stocks are largely property titles to claims to anticipated wealth. An increase in the price of stocks, for example, does not necessarily represent an increase in real wealth. In short, there exists a mediated relationship between the stock market and the actual production of real value.

Today, stock values have become very far removed from the value of real assets and material goods and services. The idea of “bubbles” reflects this growing disconnect between the economy and the stock market. In 2008, for example, most could not even explain what “derivatives” were because they were so convoluted and so far removed from reality. It was next to impossible to determine which claims of wealth (real and fictitious) belonged to whom because toxic financial instruments were essentially made-up and resold over and over again.

In reality, much of the stock market relies on fictitious capital—value beyond what can be realized in the form of commodities. It is capital above and beyond actual capital. Fictitious capital is parasitic and can arise from printing money, lending between banks, compound interest, credit, speculation, fractional banking, fake toxic financial instruments, and more. Fictitious capital spontaneously duplicates and triplicates real capital. It is not real value produced by real workers in the sphere of production. Workers do not produce fictitious capital. Speculation, for example, represents a projected legal claim to value that may or may not materialize in the future. It is a gamble. It is akin to trading in promises and risks, without actual existing funds. Not surprisingly, risk-taking and recklessness have reached new heights under the current surreal circumstances.

The “free-market” under conditions of imperialism causes many individuals and organizations to become blind to reality and the laws of motion of economic development. Many get lost in a radically-detached subjective reality where anything goes (so-called “animal spirits” take over). The market appears as a land of infinite unicorns and rainbows. Material reality dissolves. After all, the private Federal Reserve has repeatedly signaled to the mega-rich that they have nothing to worry about: the super-rich will be taken care of under all circumstances. Since they are “too big to fail and too big to jail,” digital dollars will keep flowing to them perpetually. This eliminates risk for a tiny few.

Keeping in mind the important principle that what is not produced cannot be distributed, the stock market mainly re-divides and re-distributes already-produced value. It represents the parasitism and decay within the economy. It is an arena in which the richest and most powerful capture the wealth seized not only by weaker and smaller owners of capital, but also the pensions and other funds that belong to workers and the public. “Might makes right” prevails throughout the obsolete “dog-eat-dog” capitalist economic system.

The notion that “money begets money” (“capitalization”) is a capital-centered prejudice that fosters the illusion that production does not matter and workers are irrelevant; workers supposedly have nothing to do with the production of social wealth. Money just arises magically. But the fairy tale that “money begets money” is a main reason why the stock market always becomes “over-valued” and eventually crashes. Asset valuations and speculation may extend well beyond the stratosphere, but ultimately they are governed by the laws of motion of economic development and must return to Earth. The chickens always come home to roost, as the saying goes. The “good times” never last. Anxiety and insecurity are always around the corner. Unplanned and anarchic economic activity cannot escape frequent catastrophic reckonings.

Such crashes and the havoc they wreak are inevitable in an economic system based on the private ownership of competing parts of the economy. The generalized anarchy of production in society negates conscious human control and planning of the economy and inevitably leads to disharmony between production and consumption, resulting in regular upheavals and chaos. Sustained prosperity, peace, and stability for all are impossible under such outmoded conditions and further reveal the need for new relations of production. A new direction and motivation for the economy are sorely needed.

The economy, properly speaking, is the relations people enter into with each other in the course of producing value. Every society has to produce and reproduce their means of existence. Any society that fails to do so, even for a few months, will experience serious problems.

Capital is the dominant unequal social relation in modern society. Workers and owners of capital enter into a relation with each other that legally permits owners of capital to seize the added-value stemming from the labor-time of workers. The claims of workers and owners of capital over this added-value clash frequently, and today this unequal social relation is in deep crisis and needs to give way to a new relation in which the working class controls what it alone produces.

To be clear, value comes only from the labor-time of workers producing goods and services in material space-time. Only the work-time of the working class can impart value to commodities. Without workers, there would be no social wealth. In this sense, owners of capital are historically superfluous, a drain on society and the economy. They are not needed. They play no positive role. They are not interested in nation-building and have not solved any problems. Owners of capital are blocking social progress by preventing the rise of new relations of production that are in harmony with the socialized nature of production.

All the chicanery, parasitism, and schemes of the imperialist oligarchs, including the stock market, will only intensify economic and social problems. Inequality, unemployment, and poverty will continue to worsen as private central banks print more money and stock markets climb.

The law of the falling rate of profit is coercive and inescapable. Under capitalism, the amount of capital invested in production eventually necessarily exceeds the profit returned. And eventually a point is reached where there is no incentive to invest, thereby establishing the conditions for crisis. Efforts to counter this law are temporary and ineffective in the long run; such efforts cannot avert crises altogether. Attempts to avert this law lead only to more tragedies for the people. The law of the falling rate of profit is a main reason why, over the past few decades, owners of capital have reduced investments in real production and shifted towards financial parasitism. According to some, the rate of profit in the U.S. has been steadily declining for 70 years.

In the coming months, the domino effects of the current world-wide economic fiasco will become even more painful and visible. The consequences of the global economic collapse will be unfolding for some time. More social unrest is bound to arise at home and abroad. And to be sure, finding a vaccine for Covid-19 will not end the depression or its torturous consequences. The obsolete capitalist economic system has been in decline for decades.

Nonetheless, while multiple overwhelming crises are unfolding simultaneously, this is not the time to drown in pessimism and hopelessness. That won’t help.

Taking up the hard and drawn-out work of developing independent thinking and politics is critical at this juncture. There are openings to do this. The social unrest unfolding worldwide provides an opening to advance ideas, thinking, perspectives, and measures that advance the general interests of society and its members. For instance, people everywhere are raising demands for accountability for state violence in its many forms. They are also rejecting past symbols of oppression. A new form of consciousness is unfolding and its direction and content are up for grabs. When far more people start to say things like “nothing surprises me anymore,” it is clear there are significant contradictions in motion.

Growing social unrest is intensifying the need to reject the ideas, views, agendas, arrangements, and fear-mongering of the rich and the democrats and republicans who govern on their behalf. Conditions are compelling more people to take nothing for granted and to investigate things and phenomena for themselves. There is a heightened sense of skepticism about information from mainstream sources. In the current rapidly-changing context, one must persistently engage in a conscious act of finding out and not automatically believe the rich and their political and media representatives. The mainstream media and the cartel political parties work tirelessly to impose ideas, agendas, and arrangements on people that deprive them of their own outlook, motivation, drive, and path forward.

Women, students, youth, workers, and senor citizens must take up serious investigation and analysis of what is unfolding and connect the dots. Action with no analysis won’t work. Nor will blindly repeating what the mainstream media or social media says. That just increases confusion and incoherence. Resorting to knee-jerk reactions, one-liners, or clever idioms will not do either. The need for analysis and coherence is more critical than ever.

Old ideas and old ways of thinking are not going to be useful moving forward. People must establish their own reference points and their own perspective on how to move society forward. A new direction, aim, motivation, and organization of society and the economy are needed and possible.

People everywhere want real decision-making power over their lives, society, and economy. This power is key to unleashing the human factor essential to building the new and guaranteeing the rights of all.

  1. Jan Dehn. June 2, 2020. “When market valuations become too high to fall“, June 2, 2020.

Current Environment Provides Opportunity to Intensify Resistance to Charter Schools

Now is not the time to divert even more public funds to private businesses like charter schools. Disaster capitalism has harmed the public interest and public schools in many ways. The nation’s public schools have been suffering budget cuts for years and now with the “COVID Pandemic” they will experience deeper funding cuts. Yet the federal government and state governments continue to funnel huge sums of public funds to segregated non-profit and for-profit charter schools that operate without transparency and close regularly.1

Society does not need more privatization and more pay-the-rich “school choice” schemes. Society needs a public authority that provides the human right to education with a guarantee in practice, which means fully-funding all public schools and making sure high-quality public schools are available to all for free in every neighborhood.

There is no shortage of money to make this happen. In the last few weeks alone the private Federal Reserve has printed several trillion dollars to save the ultra-rich again. And the real value produced by real workers in the real economy is more than enough to ensure a free world-class public education system controlled by a public authority worthy of the name.

Funding “free market” arrangements in education while letting the nation’s public schools go under-funded is especially absurd given the repeated failure of the “free market” to produce stability and success for all. The “free market” ensures only chaos, anarchy, and violence. With each and every economic recession, slump, crisis, and depression, “free market” ideology loses what little credibility, if any, it has left. For all intensive purposes, “free market” ideology is dead in the water; it stands completely discredited.

Treating education as a commodity or consumer good, or pretending that deregulated charter schools are chosen by parents and students instead of the other way around, are not the way forward. Commercializing and marketizing human responsibilities like education is irresponsible. Social responsibilities must not be outsourced to private interests and subjected to the inhumanity of the “free market.” No parent should have to fend-for-themselves in the quest for an education in the 21st century. Thousands of families have already been abandoned by thousands of charter schools that have closed over the years for financial malfeasance and poor academic performance. Clearly, segregated and unaccountable charter schools with high employee turnover rates are not a superior alternative to public schools that educate 90% of America’s youth. The law of the jungle has no place in a modern society based on mass industrial production.

It is no accident that the track record of crisis-prone cyber charter schools and brick-and-mortar charter schools is poor on all fronts. It is time for the public interest to trump the narrow self-serving interests of privatizers, neoliberals, billionaires, and other wreckers of society, education, the economy, and the nation.

The funding of private enterprises with public funds must be made illegal.

Defend public education and oppose all privatized education arrangements. Not a single public penny should flow to privately-operated charter schools. Defund charter schools. Fight for a public authority that uses public funds for public enterprises only. A pro-social alternative is possible and necessary.

  1. See, for example, Jan Resseger (June 17, 2020), Federal CARES Act Public Education Relief Dollars Quietly Flow into the Coffers of Charter Schools and Private Schools.

The American Teaching Hospital: School for Psychopaths

Medicine has changed. We used to be a calling that catered to the public welfare, and our prime consideration was the patient. Now we are a business, and some of us practice as impersonal corporations, with the bottom line the profits, not the well-being of the patient.”

— From The Doctor, by Dr. Edward E. Rosenbaum, 1991

The most shocking thing about the neoliberal health care model is not that it bankrupts and murders hundreds of thousands of Americans each year, but that vast numbers of physicians continue to support it. The insatiable depravity of the anti-single-payer virus has metastasized throughout every organ of the American teaching hospital, an institution which has betrayed its sacrosanct purpose, and which increasingly inculcates residents with the pernicious idea that good health care is a privilege and not a right.

The teaching hospital has become a dangerous place, not only for patients, but also for trainees, who are being forged into physicians without having been inculcated with a respect for basic principles of medical ethics. In this way have American physicians largely been reduced to an army of automatons trained to make money for the medical industrial complex. Indeed, it should come as no surprise that many residents lose themselves in a pitiless sea of soulless careerism, as they are immersed for years in an environment where they are beholden to, and at the mercy of, rapacious interests that place profit-making over all other considerations.

The teaching hospital is to health care what the ballet academy is to ballet and the music conservatory is to the symphony orchestra. All who covet this career must pass through its gates, and the values it imparts to its pupils form the basis of the light — or the inexorable darkness — that will assuredly follow.

Knowing that patients are often confined to extremely narrow networks, it is standard practice for teaching hospitals to arm-twist patients with inferior insurance into being medical models during physician office visits. This underscores the sociopathy of the contemporary teaching hospital, and serves as a metaphor for how these institutions have become inhuman machines that harm patients and sully the souls of their trainees. Cornell Dermatology, a department that could win an award for teaching residents how to coerce patients with inferior insurance into being clinical teaching tools, takes great pride in their villainy, writing on their website:

In addition to basic and clinical dermatology training, we strive to instill ethical behavior, compassion, communication and the recognition that we are here to serve our patients.

Residents that are the most amenable to the dictates of unscrupulous attendings position themselves to become chief resident or to be awarded a prestigious fellowship. In the American teaching hospital, this is the only thing on the mind of most trainees.

It is incontrovertible that the multi-tier system, the spawn of privatized health care, is incompatible with the oath to do no harm. Cornell Oncology, which once assigned me to a fellow due to my unglamorous insurance, writes on their website that “We care for the whole person and put the needs of our patients at the center of everything that we do.” Despite a blatant predilection for medical Jim Crow, Weill Cornell claims in their literature to have “a legacy of putting patients first.” In actuality, American teaching hospitals put profit-making first, research second, the attending’s comfort (vis-à-vis their desire to have a medical scribe or chaperone present in the examination room) third, the teaching of the trainee fourth, and the patient last.

In “I am a physician and I am not your enemy,” by Megan Gray, MD, the author laments the fact that her patients are wary of doctors. “I am asking you to trust that every day I put your needs above my own,” she writes entreatingly. It is possible that Dr. Gray does, in fact, put the needs of her patients above her own. Regrettably, this is often not the case, as evidenced by the fact that American physicians wrote over two hundred million prescriptions for opioids each year from 2006 – 2016, millions of our countrymen have been made addicted to psychotropic drugs, while Vioxx took the lives of roughly the same number of Americans as died in the Vietnam War.

It is clear that the physician-patient bond, regarded as inviolable for millennia, cannot coexist within the mores of privatized health care. Yet many doctors would argue otherwise. In “Being a doctor is not what it used to be,” by Raviraj Patel, MD, the author writes that “in my humble opinion, the patient-physician relationship is sacred, and the entire system is designed to facilitate that relationship.” In “To combat COVID-19, we endanger our doctors in training,” Gali Hashmonay, MD, writes of our uniquely dysfunctional for-profit apparatus, that “This system attracts doctors in training who are eager to put a patient’s well-being in front of their own.” Indeed, accepting gifts from pharmaceutical companies, performing practice pelvic exams on anesthetized patients, not disclosing long-term chemotherapy side effects, getting patients addicted to drugs (formerly benzodiazepines and barbiturates), imposing unwanted observers on patients during their physician office visits, pushing unnecessary surgeries, and ignoring do not resuscitate orders are some of the many things that residents have to look forward to when training at our esteemed teaching hospitals. After the corporate lexicon of “humanism,” “patient-centered care,” and “compassion” are stripped away, blind obedience is the attribute most coveted by teaching hospitals when interviewing prospective residents.

By refusing to acknowledge that corporatization has been a catastrophe, anti-single-payer physicians have sacrificed their autonomy to the devilish whims of the private health insurance companies, which have usurped the medical decision-making process. They have also sold their souls to the pharmaceutical companies, which continue to corrupt medical knowledge and foment quackery; and to hospital executives, who treat doctors as if they were employees at an investment bank.

The successful Cuban response to the pandemic underscores the fact that money and technology are useless when profits are placed over human lives. Vietnam, also a poor country with limited resources, has likewise mustered a stronger defense against the virus than the Beacon of Liberty. Cuba’s health care system is so robust that they have continued to send teams of doctors abroad, even in the midst of the pandemic.

Successfully completing a residency is analogous to being awarded a black belt in karate. Without a sense of compassion and virtue, such an individual is destined to become a danger to themselves, and a danger to others. As profiteering and the multi-tier system have become normalized in the American teaching hospital, this can only result in the commodification of the patient in the mind of the debased trainee.

In “5 things that make U.S. health care great,” by Suneel Dhand, MD, the author posits, without satire, that “A homeless American entering the doors of a hospital with an acute medical issue — be it sepsis, a myocardial infarction, or a stroke — will get better care than a rich person almost anywhere else in the world.” Writing for KevinMD, Kent Holtorf, MD, concedes that “The U.S. far exceeds any nation in expenditures for insurance administration, where the essential means of cost control is denial of service and rationing of care via ever increasing complex treatment approval systems, resulting in spiraling costs.” He then concludes:

A free-market system is shown to be the only reasonable method of reform that addresses the true underlying problems of the U.S. health care system and effectively lowers health care costs, allowing for universal insurance coverage for most everyone so any reasonable person — doctor, patient, Republican or Democrat — could support.

Not to be outdone, Kevin Tolliver, MD, asks In “A framework to understand universal health care:”

At its core, universal health care forces healthy people to pay for others’ medical care. Is this fair? Why should an active, healthy-eating, non-smoker pay for health care for an obese, sedentary diabetic who chain smokes all day?

In “Corporate games have ruined the health care system,” Osmund Agbo, MD, acknowledges that “When an insurance executive is making a seven-figure bonus, it’s very clear his loyalty lies somewhere else outside the interest of regular Americans struggling to pay an infinitely rising monthly premium.”  He then informs us that “I am not a fan of socialist medicine. On the contrary, I am a firm believer in the free market enterprise system.”

Where does all of this irrationality and deranged thinking come from? Surely, the media has played a role. And yet we cannot discount the deleterious influence of the teaching hospital, which far more than medical school, profoundly shapes an impressionable trainee’s sense of right and wrong. Polluted and defiled by the pathogen of amorality, the fallen wallow in the plague wards of neoliberalism, banished from the world of compassion and rationality, and forever condemned to live out their days enveloped by a shroud of blindness.

Let us recall Pope’s haunting words in An Essay on Man: Epistle II:

Vice is a monster of so frightful mien,
As, to be hated, needs but to be seen;
Yet seen too oft, familiar with her face,
We first endure, then pity, then embrace.

Only by collectively acknowledging that health care cannot be sold as cars, kitchen appliances, and soap are sold; that it is the doctor’s sacred duty to treat all patients equally, regardless of their ability to pay; and that medical ethics can only flourish in a nonprofit socialized system, can we take this desperately needed step in reclaiming our humanity. For too long have American teaching hospitals been bastions for every form of knavery, perfidy, and skulduggery. These institutions must cast off their shackles of corporate thralldom, and join the fight to restore dignity and honor to American health care.

Unfinished Hammering of Labor and Production

On May 28, 2020, John Lonski, chief economist at Moody’s Capital, said:

Both the troubling outlook for debt repayment and the unfinished hammering of an already weak labor market underscores the highly speculative nature of the latest rallies by equities and corporate bonds. In addition, corporate earnings have yet to escape from a now deep contraction.1

The inherently chaotic, anarchic, unplanned, and violent nature of the “free market” ensures that the outmoded capitalist economic system always lurches from crisis to crisis and is never free of upheavals and instability.

The absence of conscious human planning and control of the economy means no balance and coordination exist in the economy. It means economic unevenness, disharmony, and distortions prevail. Even in 2020, everything about the economy is left to chance, spontaneity, irrationalism, and mystery—the “invisible hand.” People are supposed to believe that the economy cannot even be understood, let alone controlled and operated in a pro-social crisis-free manner. Adding insult to injury, we are repeatedly told that, for better or worse, we have to accept that “this is just the way it is.” The chaotic and anarchic nature of production and governance under capitalism is a main reason why the response to the current health crisis is very inadequate.

To restore “equilibrium,” to recalibrate production and consumption, capitalism must regularly shed workers and productive capacity until it is “ready” once more to start all over again from the ashes of its own wreckage and destruction. It must repeatedly self-destruct and take everything down with it. The ruling elite like to cynically prettify this widespread ruin by calling it “creative destruction.”

The destruction of productive capacity has taken many forms over the years and includes imperialist wars, mergers, layoffs, pay cuts, benefit reductions, factory closings, bankruptcy proceedings, and more. This is how capitalism renews and extends its life.

It has become more clear in 2020 that the irrational destruction of society’s productive capacity that started in 2008 was not enough to preserve capitalism. Twelve years after the “Great Recession” no capitalist economies have really recovered. Capitalism needs to destroy more labor and production before hitting rock bottom and re-starting. The “COVID Pandemic” has provided a convenient pretext and cover for this inevitable destruction of productive capacity.

The loss of 40 millions jobs in the past 10 weeks is just one sign of this inhuman shedding of productive capacity. The rise of personal and corporate bankruptcies is another sign. The elimination of thousands of businesses also shows that capitalism remains “over-leveraged” and still has a long way to go before it can hit the “re-set button.”

Policies, regulations, and laws may mitigate certain economic realities, but they cannot change the inherently anarchic logic and operation of such an anachronistic system. This is why the idea of “reforming” or “improving” capitalism is wishful thinking.

The need for a vibrant, self-reliant, diverse economy controlled by working people, not private competing interests, is greater than ever. An alternative to the existing aim, motivation, and organization of the economy is needed here and now. An economy that concentrates more wealth and power in the hands of a tiny ruling elite is only going to ensure more and deeper crises.

Part of moving forward involves overcoming entrenched capital-centered ideas about workers and the economy.

A capital-centered perspective views workers as a derogatory “cost of production,” whereas a human-centered outlook views humans as the most valuable asset in life and the only source of value. Workers, according to this latter perspective, are not a cost or liability to anyone. They are not disposable or simply a number in a budget. As the producers of wealth and operators of the economy, workers must control the social product they alone produce and use it to ensure the extended balanced reproduction of society and the well-being of its members so as to avoid frequent crises, recessions, and depressions that regularly ruin the lives of millions.

There is a pro-social alternative to the chaos, anarchy, and violence of the “free market.” We do not have be dominated by an economic setup that endlessly wreaks havoc on people worldwide. The productive capacity of society can and must be brought under conscious human control.

  1. Moody’s Analytics,  Capital markets research, May 28, 2020.

Turbo-charging The Great Depression and Great Repression

Great Depression

Since the 2008 economic collapse engineered by Wall Street, most of the world’s economies have been running on gas fumes and more bankrupt schemes and failed policies. Few, if any, economies have been able to return to weak pre-2008 economic growth levels. Even the Chinese and Indian economic “miracles” are not that miraculous.

To be sure, major capitalist economies have been declining since the late 1970s, and for the past few years imperialist organizations like the IMF and World Bank have routinely revised downward multiple economic growth estimates that are low to begin with.

Financialization, stock market manipulation, the refusal to strengthen the productive sector that actually produces what people need (the real economy), large declines in consumer spending, enormous sums of debt in all forms and at all levels,1 more personal and corporate bankruptcies, endless money printing by central banks around the world, extremely low interest rates, and the non-stop invention of toxic financial instruments, “utilities,” “vehicles,” “facilities,” and arrangements to rescue the rich now dominate the retrogressive direction of humanity. These and other antisocial developments point to a historically exhausted ruling class that is unfit to rule. The financial oligarchy has no solutions for any of the serious problems confronting humanity, just more tragedies.

The last few months have unmasked the most massive economic collapse the U.S. has ever experienced. Officially, 30 million people in the U.S. lost their jobs in about 6 weeks. The St. Louis Federal Reserve noted recently that around 50 million Americans may be unemployed in the coming months, resulting in an “official” unemployment rate exceeding 32 percent.2 The jobless rate at the height of the 1930s Great Depression was 25%.

Millions have also seen their pensions and savings drop substantially and rapidly. Not surprisingly, the mental, emotional, and physical health of millions has also further deteriorated, causing more harm than the coronavirus itself. Insecurity and uncertainty have never been higher.

Globally, a bigger disaster is unfolding. An April 29, 2020 press release from the International Labor Organization states that, “The continued sharp decline in working hours globally due to the COVID-19 outbreak  means that 1.6 billion workers in the informal economy – that is nearly half of the global workforce – stand in immediate danger of having their livelihoods destroyed.”3

The coming months and years will be horrendous for millions worldwide. More intense social, economic, and political turmoil is bound to arise. Few will be unaffected by coming developments.

Fortunately, the fear, hysteria, and disinformation built into the ready-made “COVID Pandemic” narrative promoted by the rich and their allies has not caused everyone to become anticonscious or paralyzed. Many have not abandoned conscious acts of finding out the truth.

The “COVID Pandemic” did not trigger, induce, or cause the current economic meltdown, it simply diverted attention from it temporarily and provided convenient cover for what was inevitable.4 For years, many have been accurately predicting a major stock market crash and a deepening of the economic depression that started 12 years ago. It was not a matter of if the house of cards would collapse, but when it would break down. Many actually came very close to predicting the exact timeline of the economic collapse as well. There really were no mysteries or secrets.

Capitalism has always lurched from crisis to crisis, ensuring instability and insecurity for millions. Chaos, anarchy, and violence are inherent core features of the so-called “free market.” Economic upheavals, slumps, recessions, booms, and busts are fellow-travelers of this anachronistic economic system that further destroys the social and natural environment with each passing day. This will continue so long as conscious human control of the economy is blocked by existing political-economic arrangements.

While comparing the current economic catastrophe to the deep economic crises of 2008 or the 1930s has some value, this value is limited because the breadth, depth, and nature of the current economic collapse is far greater and qualitatively different given the all-around level of development and interconnectedness of contemporary societies and economies around the world. Wealth and power are also more concentrated in fewer hands today than just 12 years ago. Geo-political and geo-economic configurations have evolved and changed as well, presenting humanity with new realities. And never before has most of the world been put on a top-down extended lockdown (a prison term) for months at the same time.

In this dark context, while various benefits, stimulus checks, waivers and extensions for bills, and other social insurance programs are being considered and implemented in order to provide people with some relief, these are all temporary and inadequate—they are largely “stop-gap measures.” Student loans, for example, will have to start being repaid eventually, as will rent, credit cards, mortgages, car payments, service fees, and utility bills.

Here it is worth recalling that the U.S. Federal Reserve recently printed $4 trillion to prop up the big banks and big business. This is in addition to the $2.2 trillion CARES Act passed a few weeks ago,5 which also benefits mainly the rich. Most of the money that was printed in three seconds will not go to the majority. It will not substantively help the millions who have been harmed by the severe economic collapse that could have been prevented if decisions were made by the people and not the financial oligarchy. This is even more alarming when considering that the President of the Federal Reserve Bank of Minneapolis, Neel Kashkari, recently stated that the Federal Reserve has an “infinite amount of cash” to bail out the super-rich.

But if an “infinite amount of cash” can arbitrarily and instantly be printed on a whim, why should anything go unfunded? Why not fully fund excellent healthcare for all right now? Why not fully fund America’s public schools? Why not eliminate $1.7 trillion of humiliating student debt immediately? Why should anyone even pay taxes? What meaning does money have if it bears no relationship to the real world and the sphere of production that humanity depends on? Replacing real value with fictitious value is not a recipe for social progress; it lays the groundwork for deeper problems down the road.

Great Repression

The current crisis will lead to the further concentration of wealth in even fewer hands. Everything will be even more monopolized by the super-rich.

Monopoly in economics means monopoly in politics, and monopoly in politics means less democracy and more authoritarianism, repression, surveillance, and war. Things cannot be otherwise in the final and highest stage of capitalism. Economic parasitism and decay will only intensify until a new direction, motivation, and outlook for society and the economy are established by the people themselves.

On May 2, 2020, the Washington Post wrote:

In a matter of months, tens of millions of people in dozens of countries have been placed under surveillance. Governments, private companies and researchers observe the health, habits and movements of citizens, often without their consent…. At least 27 countries are using data from cellphone companies to track the movements of citizens, according to Edin Omanovic, the advocacy director for Privacy International, which is keeping a record of surveillance programs.6

It is no accident that we are seeing a broad range of enhanced police-state arrangements being put into place during the “COVID Pandemic.” Police-state arrangements are multiplying, often out of sight and with zero scrutiny.

New police-state arrangements include stepping up the number of police departments in dozens of U.S. cities using more drones to “protect public health”—usually without telling anyone. A dystopian atmosphere has even emerged in some places.

We are also seeing big tech companies like Apple launching “tracing apps” so as to “find infected people” and  “improve public health.” Such apps will gather, store, and misuse gigantic quantities of private information, creating much anguish and many headaches for people in a variety of ways.

State “digital checkpoints” have also conveniently emerged during the “COVID Pandemic.” Some states are now setting up arrangements that require those driving into their state to stop at some place close to the state border and complete some sort of digital personal inventory and questionnaire before being permitted to enter the state. Putting aside the many embarrassing logistical and technical problems that have emerged with these poorly-conceived antisocial arrangements, this is nonetheless an effective way to gather extensive private and personal information—and it is probably unconstitutional; certainly not something Americans are used to or should get used to.

Perhaps worse, several mayors of major cities have publicly, casually, and openly called on people to snitch on each other in the name of “improving public heath.” Snitching all of a sudden has been cynically turned into a virtue, even a heroic act. But is such an approach a progressive, responsible, and ethical way to build a modern society that honors the dignity and personality of people? How is sowing distrust, animosity, and fear between neighbors helpful and acceptable? Is this how unity and mutual support are built?

A massive top-down effort to shift many different services and work online is also exposing millions more to frequent invasions of their privacy and hacking, not to mention a range of technology-related health problems (e.g., headaches, eye strain, neck pain, hand problems, shoulder tension, and sedentary behavior). Technology is great in many ways, but it is also excellent at delivering many problems.

For a more extensive and detailed breakdown of the many other aggressive and criminalizing surveillance tactics being used by authorities at home and abroad, see John W. Whitehead’s March 3, 2020 article, “Coronavirus vs. the Mass Surveillance State: Which Poses the Greater Threat?”

Fight for the Alternative

It is critical to consciously reject and condemn police state arrangements and government abdicating its responsibility to the people. As grim and sometimes apocalyptic as the dark situation we are collectively suffering through feels like at times, all is not lost. All is not doom and gloom.

Contradictions, cracks, and openings abound.

While various things have (inadvertently) improved during the “COVID Pandemic,” such as less pollution around the world, clearer skies, cleaner lakes, fewer car accidents, and lower gas prices, to name just a few, we are experiencing a deep crisis, and a crisis presents various opportunities.

What happens next is significant.

It is critical to deprive the rich and their allies of any initiative to further wreck everything. Their ideas and policies are bankrupt and do not serve the public interest. The rich and their retinue, including the cartel political parties, must not be allowed to set the agenda for anything. They have no real solutions.

People are tired of being told what to do by unaccountable “leaders” and politicians, and they reject the ready-made diversionary answers “leaders” are tirelessly promoting. People do not want any more top-down “solutions” that leave them out of the equation. They want to be the decision-makers themselves, which means giving more than occasional “input” that is routinely disregarded or used against them anyway. Decision-making and “input” are not the same. The entire polity must be part of all decision-making. Sovereignty lies with the polity, not “leaders,” different factions of the rich, and politicians.

People can and must boldly speak out in their own name and be accountable only to  themselves and their peers. The polity is very creative and has many intelligent solutions for everything, as well as a strong desire to enact such solutions.

It is harmful to rely on the rich and their political representatives. It is best to avoid them altogether and find new ways to come together and think about, analyze, and discuss new directions, motivations, agendas, and programs for society and the economy. There is an alternative to the highly untenable status quo.

  1. Credit card debt is about one trillion dollars in America and has grown significantly since the 2008 economic collapse. See Bureau of Consumer Financial Protection. August 2019. The consumer credit card market.
  2. Miguel Faria-e-Castro.  “Back-of-the-envelope estimates of next quarter’s unemployment rate“. Federal Reserve Bank of St. Louis, March 24, 2020.
  3. International Labor Organization.  “ILO: As job losses escalate, nearly half of global workforce at risk of losing livelihoods“, April 29, 2020.
  4. It is worth noting that, intended or not, social and physical distancing rules have played a big role in blocking rallies, protests, and demonstrations against assaults on people’s rights and livelihoods.
  5. Note that millions of people have still not received their meager stimulus check.
  6. Kareem Fahim, Min Joo Kim and Steve Hendrix.  “Cellphone monitoring is spreading with the coronavirus.  So is an uneasy tolerance of surveillance“. Washington Post, May 2, 2020.

Will Covid-19 spur a Peoples’ Bailout for the World’s Poorest?

Image credit: Giacomo Carra on Unsplash

The question is whether Covid-19 will awaken us to the stark inequalities of our world, or does it simply represent a new cause of impoverishment for the vast swathes of humanity who have long been disregarded by the public’s conscience?

*****

Since the beginning of 2020, we’ve entered an extraordinary new era. There is still a great deal of fear and uncertainty about what lies ahead, and most countries are undergoing a kind of social and political revolution that is unprecedented in the post-war period. But amidst the tragedy and suffering of those affected by Covid-19, there is also a reawakening of hope about the future possibilities of this epochal moment. Political campaigners of every type are rolling out their progressive agendas, envisioning the crisis as an inflection point that could potentially kickstart a more just and sustainable economy.

The reasons for optimism are in plain view. With major economies temporarily frozen, state interventions on a colossal scale have directly contradicted the prevailing ideology of our time. The free market creed that has run the world for almost 40 years is, once more, effectively defunct; in its place, governments are forced to undertake huge feats of economic planning in order to avert an economic catastrophe.

Right across the Western world, state-imposed lockdowns have necessitated social solidarity policies that were previously unthinkable. Rescue programmes vary greatly in terms of social protection measures, cash assistance and workers’ rights, but there is no alternative to governments stepping in to secure the livelihoods of millions of people.

Despite the shortcomings of many schemes, together they have dramatically busted the myth that governments cannot afford to implement radical pro-social investments. Never has there been such a case for guaranteeing everyone’s right to an adequate standard of living during the current crisis and beyond, particularly by rolling back punitive austerity measures and the privatisation of essential public services.

Even a universal basic income has suddenly resurged in popular interest and been seriously discussed by policymakers of all political persuasions. From every quarter, the calls are ringing out for a different kind of economy to be built that recognises the limitations of the market, and that places finance at the service of basic human rights.

But the worst of the pandemic is still to come, and it’s too early to tell how events will unfold. An implosion of global financial markets is an imminent possibility, with a global recession of perhaps record dimensions a near certainty. What will happen then for social safety nets and economic priorities—will the burden of adjustment really be shouldered by large corporations and wealthy elites, or will governments heap the costs onto the poor and ordinary workers as since 2008?

Unequal outcomes

The one certainty is that the most vulnerable and excluded members of society will suffer the worst consequences, as with all economic crises. We may be all in this together, and the coronavirus may not discriminate as to one’s socioeconomic class, but the experience of lockdown will be very different with respect to one’s position and place in society. This pertains most of all to those who live in the world’s most downtrodden places, where even basic health advice is impossible to follow. Constant media reports now question how a billion people living in slums can practice social distancing, or frequently wash hands when there is no easy access to clean water or sanitation (a situation that afflicts 40% of the world population).

The prospects are terrifying for the millions of migrants and displaced people, prisoners, the homeless and those who live in disaster-prone areas. Not only are they most exposed to infection, but they are least able to access quality healthcare, and most impacted by a loss of income. No government support packages will be expected by the world’s 25.9 million refugees, of whom huge numbers may be left to fend for themselves in overcrowded temporary settlements.

For many low-income countries, the current health crisis could become a ‘double tap’ that exacerbates existing humanitarian challenges, such as conflicts, droughts, the locust plague or endemic poverty. Healthcare systems are already overburdened throughout the global South, especially where IMF-backed austerity cuts have been imposed. Scores of countries have endured waves of fiscal adjustment programmes that have increasingly weakened social protection schemes, curtailed labour rights and exacerbated precarious work.

If the virus takes off in its ‘third wave’ – after China, after Europe and across the developing world – the consequences could be devastating for under-resourced governments that are reeling from other humanitarian catastrophes.

As John Pilger has reminded, deaths from Covid-19 still pale in comparison with the 24,600 people who unnecessarily die from starvation every day, or the 3,000 children who die from preventable malaria. Not to mention other diseases of poverty like tuberculosis or pneumonia, or the cholera crisis in Yemen, or the countless daily deaths due to economic sanctions in countries like Venezuela and Iran. No pandemic or global emergency has ever been declared for these people.

Will Covid-19 therefore awaken us to the stark inequalities and injustices of our world, or will it simply represent a new cause of impoverishment for vast swathes of humanity who have long been disregarded by the public’s conscience?

A global action plan

Given the huge challenges for less developed countries, it is essential that governments respond to this global health emergency through genuine cooperation and the sharing of international resources. The developing world is already in turmoil due to falling commodity prices and foreign direct investment, a collapse in tourism and the weakening of their own domestic demand—even before the socioeconomic impacts of the virus take hold.

Heavily indebted countries are also facing a ‘double whammy’ of declining exports and sharply increased borrowing costs, raising the prospect of a new debt crisis that engulfs south-east Asia, Latin America and Africa. But the need for global economic sharing goes beyond moral imperatives: unless we prevent these regions from descending into chaos, the virus could circle around the world and be reimported into richer countries.

The scale of an emergency response plan is boldly summarised by Oxfam, who call upon governments to implement a globally-coordinated and massive investment in public health. This necessitates a degree of international aid-giving that is unseen in our history, as well as an immediate moratorium on debt interest payments for poor countries without conditions.

Oxfam estimates that it would cost $159.5 billion to double the health spending of the 85 poorest countries, home to nearly half the world’s population. Compare this with the trillions of dollars being released by the United States and European Union in their emergency relief measures. The United Nations, in contrast, has so far called for merely $2 billion to fund its Humanitarian Response Plan, which is seriously inadequate given the scale and complexity of the crisis, but still far from being met.

Beyond this emergency relief, there is also an urgent need to transform the global economy in the longer term. The coronavirus crisis has given renewed impetus for major structural financial reforms, including action against tax havens, debt cancellation and changes to trade rules. This is essential for enabling poorer nations to protect jobs and build comprehensive, universal public services and social protection systems.

Above all, a massive global stimulus package should be directed towards supporting green industries, rather than further entrenching fossil fuel interests. Similar proposals for a Global Green New Deal were put forward after the last financial crisis over a decade ago: now time is running out for governments to mobilise maximum resources towards decarbonising the global economy and restoring our natural ecosystems. A ‘just transition’ of sufficient scale will also serve to increase the resilience of low- and middle-income countries as they diversify production and reduce their heavy reliance on commodities.

A spirit of solidarity

The UN trade and development body, UNCTAD, has renewed its appeal for a new Marshall Plan for the global South, in which G20 nations act in a spirit of solidarity to assist the 6 billion people living outside their core economies. But there is little hope for such a historic level of coordinated global leadership to emerge, when the most powerful nations—particularly the United States—continue to view world politics as a zero-sum game in which states compete rather than cooperate. The global pandemic has arisen within a crisis of multilateralism which has increasingly eroded governments’ capacity for collective action in the post-crash years, so it is hardly surprising that the virus is already outpacing a global response.

Now, as ever, the responsibility for transforming geopolitical relations lies not with influential heads of state, but with ourselves. There may be much heartening evidence of national and local solidarity during this lockdown period, but the question remains as to whether that will be translated internationally once a vaccine is discovered.

Will the more privileged people in affluent societies continue to profess our global interconnectedness, while shrugging their shoulders at the dire inequality that leaves half the world impoverished? Or will we unify our demands in a deafening call for securing everyone’s basic socioeconomic rights, which would directly strengthen the United Nations’ capacity and foundational purposes?

It is one thing to call for a people’s bailout in single nations alone, but it is something else to call for a global people’s bailout that benefits every disadvantaged individual and family in all countries. If the coronavirus crisis is revealing anything of lasting human significance, surely it must be this necessity of finally sharing our planet’s phenomenal wealth and ample resources.