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Americans, rich or poor, now live in a culture entirely perceived through simulacra-media images and illusions. We live inside a self-referential media hologram of a nation that has not existed for quite some time now. Our national reality is held together by images, the originals of which have been lost or never existed. The well-off with their upscale consumer aesthetic, live inside gated Disneyesque communities with gleaming uninhabited front porches representing some bucolic notion of the Great American home and family. The working class, true to its sports culture aesthetic, is a spectator to politics … politics which are so entirely imagistic as to be holograms of a process that has not existed for decades in America, if ever. Social realism is a television commercial for America, a simulacrum republic of eagles, church spires… and ‘freedom of choice’ between holograms. America’s citizens have been reduced to balkanized consumer units by the corporate state’s culture producing machinery. We are all transfixed on and within the hologram and cannot see one another in the living breathing flesh.
— Joe Bageant, from a 2005 interview with my late friend, Richard Oxman
We need to understand that technology is not simply a relation between humans and their natural environment, but more fundamentally a way of organizing global human society.
— Alf Hornborg, “Technology as Fetish: Marx, Latour, and the Cultural Foundations of Capitalism”, Theory, Culture & Society, vol. 31, no. 4
Note to readers: This is an impromptu, long overdue, unsolicited, and frankly incomplete second attempt at describing aspects of digital media and “extremely online” culture and ideology. You can read my first essay “Questioning the Extremely Online” by clicking the link. There are conservative, liberal, and leftist variants of the extremely online crowd; what unites them are social media as well as internet and screen addictions, a lack of class analysis, and technological fetishism.
The Psychology of the Terminally Online
It is not enough to change the world. That is all we have ever done. That happens even without us. We also have to interpret this change. And precisely in order to change it. So that the world will not go on changing without us. And so that it is not changed in the end into a world without us.
– Günther Anders, The Obsolescence of Man, Volume II
There are a few very inconvenient truths about the internet, digital media, and technological “progress” that Western societies have largely failed to account for. They are as follows: the technology and mediums are addictive, alienating, manipulative, exploitative, and violate privacy. Also, the glut of information that the internet and online media stores no longer seems to be able to advance any coherent cultural education or socio-economic framework for change that corresponds to what is necessary to avoid the devastating effects of climate change and various forms of collapse that are on the horizon.
One of the obvious and pernicious aspects of social media is its addictive and manipulative nature. As we have known for awhile now, social media amplifies negatives news and posts that anger and/or irritate us through algorithms designed to capture and hold our attention. As Silicon Valley guru Jaron Lanier explains in a British TV interview, our social media feeds are designed using behavioral modification techniques to serve an attention economy; where data is sold off to third parties to hook the user on products and/or digital services. This represents a new era for humankind, based on full-scale data accumulation and manipulation of our digital selves, one that Shoshana Zuboff details in her work The Age of Surveillance Capitalism. As Lanier and Zuboff aptly point out, the addictive and manipulative elements inherent to social media leads to degradation of the self and society.
The nature of time spent on computers and smartphones necessarily involves the lack of use of one’s material body. By atrophying our senses, we no longer question what it “feels like” to be online, allowing the alienating “manipulation engine”, as Lanier puts it, that is social media and web advertising to distort one’s neurobiology: the corporeal biochemical and physiological makeup of each person, and part of what makes an individual unique. Then comes addiction: as Lanier points out in the same interview, the addict is hooked to both the positive and negative aspects of the addiction: in this case the social media addict experiences positive emotions from validation, exposure and pseudo-solidarity and in the best cases deep connections, but also a perverse enjoyment from diving into the swamp of “rancor and abuse” that posting inevitably stirs up. Furthermore, fighting (in this case posting) for a cause becomes an end-in-itself and rationalized as worthy of the time spent: one cannot just give up, as the “sunk costs” of obtaining an outlet, platforms and followers self-justifies the “need” to always be broadcasting one’s unique or even brilliant ideas as well as inane and banal trivia and gossip.
One main and obvious critique regarding digitally-based sociopolitical manipulation is that people increasingly confuse, if only on subconscious levels, digitally-based “virtual” and “cyber” interaction, friendship, and activism with in-person connections and organizing. Certainly, a great many people fall into this category, as the substitution of virtual life for face-to-face offers a palliative to the endemic depression, anxiety, and host of psychosocial issues caused by the reactionary nature of capitalism and the hollowing out of communal life and civil society. Social media has become the new center of spectacle for post-modern society. As Guy Debord wrote in 1967, “the spectacle is not a collection of images, but a social relation among people, mediated by images.”
Capitalism has managed to thrive in our screen-driven world, even with the forces of production being shifted to the developing world, by profiteering off humanities’ sharing/cooperative communal ties: through harvesting personal data, then using targeted advertising to get users to buy and thus hook them on the platform and its products, and also selling one’s digital profile to third parties. Not only that, but mainstream capitalist ideology has managed to insinuate itself into every corner of the internet, and drive public narratives of events, through a process of regimenting the public on every issue, instantaneously, all the time.
Still, not many are going to readily admit that they believe most mainstream news sources verbatim, or even that advertising is particularly useful or accurate online. In terms of activism, most people still understand that signing online petitions has very little impact compared to in the street protest movements. Many people can see through the “bad faith” inherent to social media. Even taking into account the addictive nature of the medium and the resulting physiological manipulation that social media use causes, on both the conscious and subconscious levels, this still does not explain the immense forces behind internet and social media addiction and its hegemonic position within the cultural landscape.
What is taking place is quite broader in scope than a “substitution” of communal face-to-face activism and social connection with virtual, internet-based networks. While quite a lot of people fall into the first category above, as somehow ignorant and oblivious to the alienating and exclusionary nature of social media, there is another large group that needs analysis: the ruling class “winners” of social media, those with large platforms and significant followings, as well as those among the “extremely online” who engage in non-stop socio-economic and political commentary.
The Disintegration of the Digital Commons
On the floors of Tokyo
down in London town’s a go go,
with the record selection,
And the mirror’s reflection,
I’m dancin’ with myself
— Billy Idol, “Dancing with Myself”
This second group — one that explicitly acknowledges the inequalities and injustices baked into digital media — may indeed have more education and wealth, and some of whom even readily understand what has been lost; yet still view the new world of social media and digital engagement as the only game in town, and therefore the only way to gain new adherents/followers, or in the case of the extremely online left and right, political power.
Sadly, many on the left appear to be resigned to LARPing: playing an online game where they do not make the rules, do not have any leverage, power, or any money for that matter, and cannot possibly win. There is not any significant need for liberal/left journalists providing day-to-day “hot take” commentary, using platforms and influencer methods to gain followers and viewership, if the goal in mind is revolutionary change and/or attaining political power. If the goal in mind is likes, shares, streams of revenue, and even new forms of social capital, then the actions of these users makes more sense. What is needed is organizing skills and the ability to bridge gaps between classes and cultures in order to activate a working class base, and that is sorely lacking.
The terminally online in this second category can perceive that notions like the community, a social contract, and democratic consensus based on a shared culture of trust and reciprocity have been demolished in the Western world. They mostly fall into liberal-left/progressive camps but there are certainly conservative and even isolationist/anti-war libertarian variants. The common thread is that even with the implicit acknowledgment that “local community” and even face-to-face interaction is waning (especially in light of the technocratic and authoritarian reaction to the pandemic) the urge remains to put internet technology to work for the good of their own brands and content promotion.
So a new digital hierarchy of opinion and commentary is becoming entrenched, and has been for over a decade now, controlled by the ruling class and its mainstream media mouthpieces with the ability to censor and shadow-ban dissenting voices. The significant followings of online political commentators have created its own monopoly on user engagement and viewership — whether through a Google search, Youtube stream, or social media account, the masses are herded to the opinions of the same tiny group of influencers by the invisible algorithm. It was always easy to discredit a cable news commentator as biased and untrustworthy, but now the personalized feeds of social media give a new sheen of legitimacy and respectability — even if digital commentators with large viewerships are simply parroting mainstream lies and distortions (which they mostly do).
A related issue that has come to the fore is that the virtual nature of online “work” and digital influencing models simply mimic the wider mainstream capitalist model of capturing attention; through clicks, “likes”, advertising, and hawking merchandise. This certainly doesn’t take away from the valuable educational and activist networks that are coerced into adopting these models, but simply to point out that the most facile, vapid, compromised, lowest-common-denominator political analysis and trends will float to the surface, and become the most popular, in this environment. It’s no surprise, then, that the serious alternative media on the left has been taking a beating from Google’s adjustment of search algorithms, social media censorship, “shadow-banning” and “throttling” on platforms, as well as being ignored as usual by the mainstream.
Of course, just taking a wider lens of how most of the non plugged-in world and the poor (in the West and worldwide) views the often bitter, internecine factionalism and sometimes irrelevant controversies within social media would be helpful. When the usual posturing, identity politic culture wars, and cos-playing in online turf squabbles are put ahead of the material needs of the people, open-minded individuals who could be potential allies and comrades check out of the milieu and view socialism as an arcane subculture. Within the maelstrom of fighting for more reach, subscribers, and content promotion, nothing becomes more relatable in a narcissistic culture than endlessly talking about oneself.
This debased charade of public discourse has been allowed to fester, with basically no resistance, precisely because it suits late-stage capitalism — not only is the profit motive of targeted advertisement too lucrative, but the mechanisms of social control and surveillance too tantalizing, as it enters an era of semi-controlled collapse and corporate consolidation of the entire planet. There are alternate “post-truth” realities (Q-Anon, Russiagate), bubbles of echo-chamber subcultures preaching to the choir, the labeling of any ideas contrary to mainstream media as conspiracy theory (a term invented by the CIA to discredit anyone questioning the official story of the JFK assassination), ego-trippers taking pot-shots and “dunking” on those less knowledgeable, and sections of an overzealous cancel culture which all contribute to dividing, disempowering, and disincentivizing a populace from understanding how the dominant mode of production on the planet, capitalism, is holding the world hostage for the sake of short-term monetary profit.
The privileges of the extremely online (coming from mainly middle class backgrounds) create insular echo-chambers which keeps them sheltered from the realities of daily labor; it also alienates working class people who might otherwise be attracted to anti-capitalist thinking. The lack of blue-collar life experience and organizing skills from the self-proclaimed “leaders” in online discourse face problems relating to the cultural and aesthetic styles of the working classes, in terms of social capital, personal affect, to how theories and obscure references are flaunted, as well as artistic taste.
Connected with this notion are a perceived lack of authenticity and dedication; in this context, it is understandable how it is hard to take successful bloggers, podcasters, journalists, and even academics seriously because many do come from more privileged backgrounds, with all of the blind spots of class that this usually entails. This would not be as much of problem if the nexus of the extremely online was not nearly always targeting content towards their own white-collar milieu and focusing on fringe aesthetic pretensions and/or nice forms of cultural capital: instead, if the animus was focused against the ruling classes consistently, the snarky and cringe-worthy cultural signaling, non-stop commentary careerism, and thin gruel of cosmopolitan affects could be dropped.
Since much of the terminally/extremely online is middle class, they invariably come off as out-of-touch at best; dilettante, effete, or “soft” to put it politely: some re-create bubbles of professional class affluence and gate-keeping hierarchy online; others mimic the non-profit bureaucracy and the pseudo-organizing principles of white-collar NGOs; and more ape serious civic groups, community organizations, subversive ideology, serious strategies of resistance and protest, all the while staying within the confines of their self-imposed defanged and declawed liberal “progressivism”.
The Memeification of Society
The spectacle is the moment when the commodity has attained the total occupation of social life. Not only is the relation to the commodity visible but it is all one sees: the world one sees is its world.
— Guy Debord, Society of the Spectacle
It would be remiss if we did not mention one of the dominant forms of expression on social media: the meme. The function of the meme: a pictogram, is telling insofar as it reminds us that people not only do not want to read anymore, but also often don’t have time to invest in watching a short video, essay or novel, or even examine worthy works of art, either. Memes have become a form of postmodern hieroglyphs for screen-addicted Westerners. The meme acts as a floating signifier par excellence; when there is very little common ground or shared reality inherent in the online world, users (netizens is one cute name scholars like to use) pass along memes and interpret them to fit into prefabricated narratives and beliefs.
Not only that, certain extremely online media “poison the well” of nuanced online discourse by using the same generic tropes and stereotypical styles borrowed from memes and mass culture, and endlessly regurgitating one-dimensional thinking. Posters then inevitably adopt the same styles of humor from memes, and appear in the form of pre-packaged personalities: there’s the preening virtue signaler; the petit bourgeois influencers hawking a channel, brand, or merchandise; the bipartisan shrieking about the perils of socialism; the self-deprecating very earnest posters with endless commentary; the low-key spiritualist humble-bragger; the perpetual oversharer; the haranguing trolls and snarky “edgelords” who get off on other’s misery; the cantankerous self-appointed ideology police who admonish everyone who deviates from their purity politics; and many other prefabricated templates of virtual personality types to follow and waste one’s time “engaging” with.
“Posting wars” have taken the mantle from the culture wars that began heating up in the early 2000s: everyone can engage in their own lame version of liberal, conservative, or radical punditry; everyone can be their own asinine Jon Stewart, Rush Limbaugh, Alex Jones, Bob Avakian — whatever skin one wants to try on for the day; parroting the same tired tropes, shuffling through the never-ending news cycle, applying embarrassingly childish levels of critique, and usually stoking nationalistic fervor on all sides. Through algorithms that amplify the most simplistic, most milquetoast, most authoritarian, and frankly the most enraging and ignorant voices, social media performs a key element of social engineering and low-level psychological warfare: it keeps the population in perpetual angst, disorientation, and even fear; just off-kilter enough to be swayed by authoritarian demagogues, and just desperate and delusional enough to be assuaged by the liberal “resistance” that “democracy” will be restored soon.
This is just more Hollywood: we can find the same types of styles of media personalities, the same shows and movies promoting US foreign policy, the same jokes and narratives online as in mass consumer culture. Even if the “content” is likeable, or wholesome, or whatever, we often find the same tedious set-ups, the same formulaic variations to get to the punchline, the exact same references online that one might see in a lame superhero movie.
Again, there certainly is worthwhile work and even political education being done within online culture, but some of the problems with posting are the inexorable rise of the hyperreal blurring of truth and illusion, the layers of shellacking with ironic distance to make things “funny” or acceptable to an audience. Much like the sadistic overseer at one’s job who confuses “being the boss” with having a personality, the new cadres of the extremely online misunderstand that simply having an online presence, significant following in terms of numbers, or a media platform does not confer experience, brilliance, uniqueness, the ability to lead or be a role model about, well, anything. Much like politicians and modern celebrities (who are increasingly becoming the same thing), the extremely online are simply popular for being popular.
Through the Cyborg Looking Glass
It’s not an experience if they can’t bring someone along
They hang on emotions they bottle inside
They peck at the ground
And strut out of stride
— Phish, “Birds of a Feather”
Another issue that establishment commentators cannot seem to wrap their heads around is the liberal-dominated kitsch and camp social media behavior, attitudes, and posts that appeal to specific subcultures and make things go “viral” within small communities, but face the same echo-chamber issue when confronted with going beyond the “target audience”. By pandering towards in-groups, many internet-savvy influencers (even socialist and radical-minded ones) unconsciously adopt the same tactics as PR and marketing firms relying on focus groups to target audiences. Developing a following now consists of who can shout the loudest, report the fastest, and spurt out the most ridiculous and sensationalist click-bait. In other words, socio-economic control no longer simply functions with capitalist monopolization of the means of production — as many astute observers have pointed out, non-waged labor, leisure time, biopower, and cultural reproduction now are absorbed into the nascent “new world order” of global capitalism; which is in turn reshaping human consciousness in totally unforeseen ways.
Apparently variations of the above happens among leftists quite often on social media: the retweet/sharing of another’s post followed/captioned by a snappy or poignant comment to provide context, an added emphasis, an angry denunciation and disavowal of the concept, or a gentle nudge to offer clarity. Certainly this is necessary in some cases, but the idea of becoming each other’s constant 24/7 news aggregators, soundboards, and amplifiers…in order to accomplish what exactly? Is there an unconscious desire to carry on with this quasi-forced show, which is obviously coercive due to social pressures, in order to meet the perceived need to regularly signal one’s beliefs and develop monetization models?
Another way of framing the question is to what extent are the flurry of posts about daily “news” and critiques of current events required, and to what extent do individuals yearn for and crave the never-ending spectacle of discourse to feed egos, get a dopamine rush, and/or gain popularity? To what extent is the drive to secure social capital an excuse to develop a liberal-left version of having “credentials”, and to what extent are those involved softening the edges of critiques, compromising values, and slowly becoming assimilated into a virtual world where technological power is worshipped and fetishized? Is there an engaged and dedicated minority of revolutionaries ready, willing, and able to storm the barricades physically, or do our online connections consist of a simulacra of ally-ship, and represent the dying embers of a burnt-out husk of a public sphere masquerading as serious discourse?
Putting aside the ignorance and vitriol all over the web for a minute, and there’s plenty of that, what comes to the fore is the quite boring and tedious background to online discourse. Not only is it incredibly lonely, nearly everyone is in some important sense going through the motions, performing in service of whatever fad or niche subculture, instantly sucked into commentary on any media narrative and scratching the itch; in this environment, political commentary in the West resembles sports news, or movie reviews, or fashion advertising; a running conversation on trendy, stupefying, salacious current events where no serious response to the power structure or the money system is offered. Not only are we faced with online/digital ennui, but internet commentary has become downright predictable- running the gamut from “influencers” who are demagogic authoritarians, to establishment types pandering to centrist neoliberal notions of “bipartisanship”, to libertarian pseudo-spiritual grifters, to tech moguls and celebrities incessantly reminding us “we’re all in this together”. Pretty soon we will have algorithms and AI writing TV and movie dialogue as well as political news, if it’s not already happening, in order to gauge and profiteer off of what machine learning tells us is “fun” and “likeable” to the public.
The common thread is that high technology will somehow save us and make the world a more interesting and enjoyable place, which is a technophilic worldview: only the vast arrays of screens, robots, AI, internet of things, smart-grids, ever-watching and listening surveillance, and multinational corporations can solve the problems they themselves have created. No one stops to think — and this is another part of the equation, the lack of free time in the always-online world — maybe, just maybe, modern technology is diverting us from coming together, forming community-level mutual aid groups, organizing the working class, protecting the environment, and many other deadly serious issues.
As for the reasons why we keep diving head-first into the toxic stew of social media, here’s a quote from one Jay Hathaway at the Daily Dot to ponder over:
Why do we continue to lap at this useless, mean trickle of garbage juice? Even worse, why do we seek out more of it? Is it because we hate ourselves? Quite possibly, yes. Is it because we’re lonely, and we’re hooked on this simulacrum of human connection even as it makes us less relatable to the real people around us? There’s definitely some of that… At some point, you have to admit that you’re Extremely Online because you want to be. Or because you once wanted to be, and now it’s part of your identity. Who would you be if you weren’t Extremely Online?
We’re all liable to badger on about whatever pet issue we stand up for, and sometimes rightfully so; but the majority don’t really want to take action or even think through the implications of what would be needed to change our cultural momentum or our personal inertias. This is because, through the money system and the vagaries of an extreme social hierarchy, mainstream liberals and conservatives have become so beaten down that they adopt fatalistic and nihilistic mentality. Part of the reason they despise each other so much is that they recognize so much of themselves in each other. On varying levels of cognition they despise themselves. Being told their entire lives that more money and technology will bring more happiness and progress, and yet not being able to partake in any tangible culturally enriching activities or soul-expanding journeys, many become schizoid.
Social media and the denizens of the extremely online compound this problem. The loudest, meanest, crudest of the bunch are amplified in our social media feeds by algorithms designed to capture our attention, most obviously for ad revenue. Of course this is how the game got started in Silicon Valley, so we are ostensibly told that this whole racket is all about the money, no other nefarious “agendas”. Unfortunately the extremely online liberal and soft-left has swallowed this hook, line, and sinker that the only motive driving these companies is profit.
Yet, Facebook and Google are known to have taken start-up money from In-Q-Tel, a CIA created venture capital firm, and intelligence agencies are known to use backdoors through every browser, operating system, social media app, etc. Further, just thinking through what an “attention economy” and Shoshana Zuboff’s notion of “surveillance capitalism” really entails brings up rather unpleasant truths. One of which is that the national security state is monitoring the web at large not to play “defense” but to actively plant and stir up counterrevolutionary ideology not only in the mainstream but in the furthest recesses of online discourse. In short, there are now intelligence operators whose job is to act as an online COINTELPRO.
Beyond that, the full-scale push for more time spent in online communities as well as the wide availability of broadband internet connected to nascent “digital identity” technologies in the developing world will only allow for the wider use of cyber-based, psychological warfare, propaganda, and counterinsurgency techniques. Even pushing further, establishment narratives and media stories can be amplified through algorithms that favor “trusted sources”. The fact is that the public is not aware of the full capabilities of the national security state, and that social media can operate to create the same sorts of conditions that the CIA program “Operation Mockingbird” used to bribe journalists and editors into printing mainstream-favored news over dissident opinions.
We’ve already seen Facebook manipulate individuals media feeds as a social experiment to see if it would provoke more positive and negative emotions, and it worked as they readily admit. If, in previous generations mass propaganda worked through the model of “manufacturing consent”, today we are faced with perhaps an even more intractable situation: the normalization of consent and the amnestic erasure of the social, erosion of community, and destruction of a slower type of deliberative discourse, and of history. The regiments of mainstream liberalism and co-opted progressives are stirred into action to promote the interests of the status quo. Take two glaring recent examples from the US and the UK: Bernie Sanders’ supposed misogyny and Jeremy Corbyn’s so-called anti-Semitism.
Driven by an absurd, relentless media narrative, both messages were amplified and both candidates tarred and feathered in public because of an inane social media discourse. 2016 may have been the year that Twitter became relevant for national politics because of Trump; four years later, things have gotten even more absurd. To cite just one example in the 2020 election race, Elizabeth Warren became incensed about Bernie Sanders’ supporters being mean to her online- this become somehow debate-worthy and relevant enough to provoke national discussion. So not only has mass media become fixated on reactions to bad jokes or distasteful references on Twitter, but it now parrots the same maudlin sentimentality and priggishness as the denizens of the extremely online world.
Similarly, across the pond Corbyn was smeared over little more than insinuations and hyperbole; again amplified by ridiculous anti-socialist social media influencers, liberal and conservative alike. Then there was the mother of all the liberal delusions and overreactions the past four years: Russiagate. While the mainstream media played the dominant role, social media trolls, bots, and liberal officialdom continued to hammer away at collusion, becoming the mirror image of the nascent conservative post-truth fake news era. Narratives are now almost entirely driven by the profit-motive, money values and celebrity click-bait begin to exclusively dominate discourse, gossip becomes the main focus in a doomed capitalist economy where its leaders can no longer alter its course.
The fact is that this intentional manipulation of human nature serves the ultra-rich classes through more than their bank accounts. It’s not just about advertising money and profit, and not just about surveillance, or a new form of attention economy. It’s all of that and much more, much darker and dystopian. Social media, the web, and streaming services are the new fuels that run the alienation and atomization engine of our culture. They have become the dominant form of online expression, and through ads, codes, and algorithms have found their way into our collective unconscious. Not only do these pervasive media elements divide those with obvious ideological differences; the intricacies of the algorithms stir up unconscious impulses and polarize those with largely overlapping interests.
Of course we all know this phenomenon well (the narcissism of small differences) and it predates the internet age, but what is novel here is not its reappearance on a bigger “stage” but its targeted, precise, insidious deployment into our social newsfeeds. Individuals are made to feel the need to keep up with internet flame wars, memes, and obscure references or else the feeling of being “left out” and/or uninformed begins to creep up out the recesses of one’s consciousness. Social isolation and stigmatization for not being able to “keep up with the facts” (Fear of Missing Out-FOMO) and events in our modern world is a very real thing, just as ruthless on social media as the various hierarchies in the corporate world, civic life, and academia, just to name a few instances.
Further, the lack of being able to have one’s opinion heard or validated online in the maelstrom of discontent it has sown often gives young people, especially those with low self-esteem, the idea that their thoughts and opinions don’t matter and are somehow unworthy of attention. This is compounded for those that, due to propaganda uncritically filtered from others or simply naiveté, believe that the best art, theory, and culture rise virtuously to the top in the great “democratic” marketplace of ideas that the internet and social media has come to represent.
Unfortunately the trend of the extremely online is to uphold the hegemony of the insulated, college-educated, the mostly liberal but also conservative petit bourgeoisie. Working class leftists and anti-capitalists, and even the very minor celebrities in the international left, will continue to be marginalized, censored, and their work ignored because they do not bear the stamps of officialdom: the Twitter blue check-mark or “verified” Google news.
All of these trends and addictive technologies converge into a dystopic framework: one that will attempt to enslave humanity in some form of digital prison; one where real-time sensors, AI driven and smart-grid internet hyperconnectivity will be able to drive human behavior on an unprecedented scale. Our “docile bodies” are being reprogrammed and conditioned to accept this, one ad, TV show, one scroll through the feed, one dopamine hit at a time. In order to accomplish this nightmare, the ruling elites need to “data-fy” us by hooking us up — by merging man and machine. Hence, this is why wearable technologies have been marketed so hard: it is not enough for a smartphone or external biosensors to do the job of extracting surplus value from our bodies. The falling rate of profit will eventually force the “data is the new oil” tech oligarchs to police our thoughts, modulate our pleasures and pains, and keep up the façade of a world of obedient workers, even if it means resorting to dystopian totalitarian tactics such as implants, virtual reality gaming systems, cheap or even free housing for those who live where they work, and a host of unforeseen emerging concepts as global civilization continues down the glide path towards oblivion.
Bill Gates’ and Paul Allen’s BASIC-MS operating system, which they sold to IBM and ended up dominating the global market for many years, was written in BASIC computer language. This language was developed by professors at Dartmouth in 1964 with funding from the National Science Foundation…The PARC research facility, from which Steve Jobs obtained the basics of the graphic user interface that became the Mac and later all computer interfaces, had several former ARPA researchers working on these display concepts…Facebook’s deferential corporate biographer David Kirkpatrick admits, ‘Something like Facebook was envisioned by engineers who laid the groundwork for the internet. In a 1968 essay by J.C.R. Licklider and Robert W. Taylor, ‘The Computer as Communication Device,’ the two essentially envisioned Facebook’s basic social network. They worked for ARPA… Google itself, considered the most academically inspired of the megacaps, was originally google.stanford.edu, where it was developed through the state and federal tax funding of California and the United States…Page’s first research paper included the note, ‘funded by DARPA’.
— Rob Larson, Bit Tyrants
One thing to remember is that Western governments are never going to willingly reign in the monopoly transnational corporations that dominate the internet. The five biggest (Apple, Google, Facebook, Microsoft, Amazon) form an internet oligopoly, as Nikos Smyrnaios explains. Through a process of the convergence of IT, web, media, intellectual property rights domination, deregulation of the digital sector, tax avoidance, and a never-ending slush fund from the biggest banks, as well as the “network effect” that herd consumers to a very few web conglomerates, the big five have managed to create basically a private internet cartel, based on inventions and achievements made with public funding, which have been effectively stolen and privatized using intellectual property and patent laws.
As Rob Larson explains in his book Bit Tyrants, the network effect occurs because the very few big social media networks offer increased connections and usefulness for people as more people flock to the platform. This makes the Big Five and a few other platforms virtual monopolies that can exert leverage; whether through algorithms, censorship, banning, and other opaque measures to destroy competition.
Naomi Klein pointed out in The Intercept in her piece “Screen New Deal” that the tech oligarchs are prepared to use the pandemic as an excuse to push their business model onto the world. As she writes:
It’s a future in which our homes are never again exclusively personal spaces but are also, via high-speed digital connectivity, our schools, our doctor’s offices, our gyms, and, if determined by the state, our jails. Of course, for many of us, those same homes were already turning into our never-off workplaces and our primary entertainment venues before the pandemic, and surveillance incarceration ‘in the community’ was already booming. But in the future under hasty construction, all of these trends are poised for a warp-speed acceleration.
Another glimpse into a high-tech dystopia revealed itself in Toronto, where citizens smartly made an uproar about turning part of the waterfront area known as Quayside into a “smart city” constructed by an innocuous sounding company, Sidewalk Labs. Of course, it turns out that Sidewalk is affiliated with Google, and concerned citizens and privacy advocates shot it down for obvious reasons, such as privacy and surveillance violations which would undoubtedly occur.
A similar idea has been introduced recently in Nevada, which goes by the innocuous name of the “Innovation Zone”. The Governor has been preparing to allow private corporations to buy land, develop cities, and form private governments, courts, police, and essential services to residents, who would live under private law which would have the same weight as county laws in the state. A company called Blockchains LLC, part of a holding company with very little transparency, has bought a ton of land outside of Reno and is all in on forming a new “smart city” there. This sort of techno-libertarian dystopia is ostensibly being introduced to raise tax revenue and boost economic growth. Yet for a governor to hand over sovereignty to an unaccountable corporation, it begs a number of questions, no? Especially since the company has donated to the Nevada governor, one would think the obvious conflict of interest would be enough to kill the project. Something much larger than the petty corruption of a US governor and the greed and opportunism of a technology company are at play here. As we shall see below, these private-public partnerships and deceitful collaborations are signs from a possible future of total social control and surveillance.
Online Labor and Value
If a free market economy plus intellectual property leads to the “underutilization of information”, then an economy based on the full utilization of information cannot tolerate the free market or absolute intellectual property rights. The business models of all our modern digital giants are designed to prevent [access to] the abundance of information.
– Cryppix, “The End of Capitalism Has Begun”, Blog Post from Medium.com, 2019
People understand that essential jobs are the only ones who really matter in our economy: food production, construction and housing, keeping store shelves stocked and life-sustaining services running, nurses and surgeons, those kinds of jobs. The rest of the economy falls into the category of what the late David Graeber rightly called “bullshit jobs”. These are jobs that exist solely for the sake of making corporations more profit, and provide no tangible material benefits in terms of food, housing, clothing, making domestic and communal life easier, and even art and culture for humanity.
White collar jobs (the extremely online included, at least those who benefit considerable or have a career closely related) in the US mainly exist to sell tangential perks and benefits for rich elites and the affluent; whether it’s fancy gadgetry and high technology, or either to reduce their own labor within their households, or to manufacture false consumer needs in the wider populace, or to exploit labor forces domestically and abroad. The modern West increasingly does not physically make or manufacture anything of value. The tech-heavy jobs of the future, as well as the new high technology and extremely online jobs of today, whether it is mainstream jobs in media, journalism, graphic designers, computer coders and software developers, engineering and science in service to the military industrial complex, Ad and PR firms, political consultants, armies of middle managers and think tanks wonks all reinforce and re-circulate narrow-minded and ignorant neoliberal economics and conservative cant about how the US is a shining beacon of freedom and democracy, and not a capitalist-imperialist authoritarian oligarchy bent on world domination and driving the world towards ecological annihilation. This is connected to too much time spent on digital devices. Upper-middle class white collars are “making bank” and have gotten intellectually lazy and morally corrupted by their ill-gotten wealth and they have effectively substituted online life for local community. They decry gentrification and white privilege even as they are the ones pushing minority and working class communities out of desirable inner city areas.
One of the reasons this happens, whether its liberals or libertarian Silicon Valley acolytes on the coasts or conservative tech-savvy suburbanites in the Midwest and breadbasket of the US, is because the upper-middle class thinks of itself as a meritocracy. What they’ve created of course, is a bougie neo-Victorian aristocracy of wealth, social status, and cultural capital, a “New American Aristocracy” as one Matthew Stewart explained in The Atlantic. What is interesting about Stewart’s piece is that he is at least cognizant of his own position in what he calls the “upper 9.9%”, and how the people and families in this class all slavishly service, idolize, strive towards, and navel-gaze at the top 0.1%. Reading his essay one can feel his consternation, as he acknowledges his complicity:
But that is not to let the 9.9 percent off the hook. We may not be the ones funding the race-baiting, but we are the ones hoarding the opportunities of daily life. We are the staff that runs the machine that funnels resources from the 90 percent to the 0.1 percent. We’ve been happy to take our cut of the spoils. We’ve looked on with smug disdain as our labors have brought forth a population prone to resentment and ripe for manipulation. We should be prepared to embrace the consequences.
Of course, as Stewart states, “running the machine” is a euphemism for improving the bottom line, and the only way that’s done today is to make blue-collar people work harder for less money, to deregulate industry, to smash labor rights, and to transfer production offshore to countries using essentially slave labor and indentured servitude. We do not live in a Taylorist-Fordist manufacturing economy anymore and even the ruling elites acknowledge that producing more for the sake of more is insane, as most affluent and upper-middle class people just binge on a steady diet of useless mass-culture goods, cycles through endless perks that the service economy provides, and consumes digitally-based mainstream lowbrow entertainment. Anyone who tells you different is mostly likely either a snake-oil salesperson or a sycophantic brown-noser for the ruling class.
The white collar professional milieu now functions mainly to create make-work jobs to sop up the millions of university educated indoctrinated into the capitalist world order, who otherwise would find their fields outsourced just as the working class jobs have been for the past forty-odd years. Elite overproduction does present a problem, insofar as late-stage neoliberalism no longer affords the opportunities for obedient, conforming middle-class workers who feel entitled to a slice of the American pie that in the postwar period was more equitable divided — at least towards white, educated citizens. These educated, professional class individuals ostensibly would prefer a modicum of social democracy, but today instead are bribed with aforementioned bullshit jobs in the corporate world, who are eventually psychically broken down and assimilated into “normal” capitalist relations, become inured to human suffering, and begin to accept the self-fulfilling prophecy of capitalist realism.
The Normalization of Technocratic Language
The world is awash in bullshit. Politicians are unconstrained by facts. Science is conducted by press release. Higher education rewards bullshit over analytic thought. Startup culture elevates bullshit to high art. Advertisers wink conspiratorially and invite us to join them in seeing through all the bullshit — and take advantage of our lowered guard to bombard us with bullshit of the second order. The majority of administrative activity, whether in private business or the public sphere, seems to be little more than a sophisticated exercise in the combinatorial reassembly of bullshit.
– Carl Bergstrom and Jevin West, Callingbullshit.org
Paeans to productivity and a smarter, more efficient economy while doing nothing to alleviate poverty, homelessness, environmental problems, etc. also reinforces the striving, overachieving, smarmy, centrist white-collar dweebs in the professional classes and political wonks of the world whose smugness and arrogance only increases as they delude themselves into believing they are the winners in a fair meritocracy.
The milieu of the extremely online crowd are the ones occupying these “bullshit jobs” and whose role it is to filter and mediate who, what, when, where, why, and how issues are framed and discussed in the media. This explains some of the sneering dismissal and resentment from the right about the “coastal liberal elites”: the conservatives understand that media liberals have no real expertise and are not serious thinkers, and they doubly resent them because they see in liberals the same moral relativism and nihilism they see in themselves. This can be made clear when one considers who the modern far-right respects and fears among world leaders more: effete neoliberal elitists who peddle bullshit, such as Obama, Clinton, Macron, and Trudeau; or staunch socialists of the recent past and present like Morales (and now Arce), Lula, Chavez, Castro, etc.
As for what increases in productivity in material terms even means anymore at work for white-collar jobs in 2020, it’s laughable on its face, as our economy has become so divorced from reality. I’m not even referring to small businesses offering tangible, physical products here, but rather professional class jobs which exist solely to make money for giant corporations, aka more bullshit jobs, without any actual corporeal objects to sell.
What we do know is that, besides tech and computer workers, the only people who talk about increasing productivity and GDP in glowing terms are sadist executives and managers in soulless corporate America, delusional mainstream economists, Wall Street sociopaths, real estate speculators displacing the poor and gentrifying inner cities, CEOs who rely on slave labor overseas, people who work for pyramid schemes, tech moguls destroying middle class jobs and transmuting them into a precarious gig economy, hedge fund managers who instigate hostile takeovers of companies and lay off loyal employees, military contractors who build more drones and bombs, etc.
Simply put, only the most craven and bougified people used to talk like this about economic issues, but with the emergence of online culture and the double expansion of the financial and computer-centric sectors of the economy, this sort of Orwellian PR-speak has expanded to the “attention economy” and is becoming normalized, internalized, and disseminated by tech entrepreneurs, the culture industry and Hollywood/web influencers, “lean-in” liberals, and social media-addicted journalists, who then feign responsibility for the type of hyper-fast, work all the time environments and disposable culture and entertainment that they help to cultivate and profit off of.
Essentially, the denizens of the extremely online normalize liberal, bourgeois ideology by couching their ideas in the “woke”, “hip”, rhetoric of identity politics and neoliberal economics, which they interpret as somehow being “progressive”. They normalize an ever-shrinking political discourse which excludes radical thinkers and promotes an updated, social media-savvy version of Orwellian corporate-speak, which Pierre Bourdieu dubbed as “NewLiberalSpeak” in 2001.
Screen-Captured Subjectivity: Digital Interpellation and Algorithmic Control
Hence the exclamation ‘another world is possible’ today seems to be confronted with the riddle, ‘would another digitality be possible?’
– Jan de Vos, “Fake subjectivities: Interpassivity from (neuro)psychologization to digitalization”, Continental Thought and Theory, Vol 2. Issue 1
Regardless of the many brilliant complex analysis of social ills, either on social platforms or digital media more broadly, it appears that the web and social media provides a very strong new avenue for what we might term digital interpellation. Users of the web and social media are constantly hailed, as in Althusser’s famous example, and continually modulated and nudged by algorithms to conform to bourgeois ideology, and endlessly diverted by the mass culture industry. Again, this constant feedback loop of being online only gives the ruling classes more power — simply logging into social media and posting does this. Academics have even attempted to calculate the monetary values of posts, retweets, and photos shared online: we are literally making money for tech corporations when we post on social media. The only real option is to stop feeding the beast and boycott these monopolies altogether; finding ways to bring people off these platforms onto non-monetized, secure, non-surveilled services, or at the very least use them sparingly — to instigate revolutions, for example.
Whereas in Althusser’s example it was the policeman doing the “hailing” in the physical environment, today we have moved to the digital plane: and it’s the thought-police and propagandists peddling mainstream narratives that define the new enemy. Jan de Vos describes this evolution from the Althusserian “discourse of the master”, to the modernist “discourse of the university”, and now we are faced with what I’d call a “discourse of the algorithm.” Power is being displaced onto the micrological level, where absent causes have real life devastating effects. In the internet panopticon, which stretches beyond the confines of spatio-temporal planes into the digital ether, not only do we self-censor what we post and share but also annihilate the processes by which we are able to think critically.
Not only do we take for granted what we know, but how we know what we know ceases to be a domain of contestation: the economic and power relations of how knowledge is constructed and wielded by the ruling class isn’t questioned, and the ways in which invisible actors and algorithms decide what is “popular” and newsworthy are assumed to be neutral and balanced. Whereas Althusser’s concept stemmed from interpellation as the discourse of the master, clearly now this archetypal ruling class figure has dissolved and seeped into the social body with no central character — we now enter the age of the discourse of the serpent, where algorithms and thus viewpoints on subjects as disparate as “science” or “international relations” which guide “professional” mainstream journalism and polite, acceptable thought which conforms with the demands of capitalism.
Why are these new forms of control so important and relevant in today’s times? Simply put, the national security state and corporations care very much about what we think, and how we feel. As late capitalism lurches towards semi-controlled collapse and contraction due to its internal contradictions, the old model of the corporate state’s indifference to the masses, the “f*** your feelings” approach, is no longer realistic for the goals of social control, especially after the mass outcries against the travesties of Vietnam and the second Gulf War in Iraq. Modern institutions care very much about our feelings nowadays, and are heavily invested in our collective emotional reactions; not only for monetary reasons, but to gauge policy decisions, for psychosocial mass monitoring of dissent, for biopolitical control of birth and death rates, and to market the imperial national security state to the public, among just a few examples. For instance, we know the CIA and intelligence community has been seeding itself into Silicon Valley and Hollywood for decades now, with shadowy agents literally rewriting movie scripts and tech executives making regular trips to Langley and DC to discuss integration and public-private partnerships.
The new tools of social control involve not only the hard aspects of indoctrination into nationalism and imperialism, but also the “soft” underbelly of manipulating our emotional states, and programming our tastes to like or at least accept aspects of our society that are crass, barbaric, camp, kitsch, trendy and faddish. The culture industry has evolved over the past fifty years to anticipate and channel public discontent into consumption patterns and “acceptable” resistance. The next stage invariably involves the immaterial realm of molding minds: of pacifying the unrest of the gig economy precariat, service economy workers, and unpaid household domestic laborers; of offering endless streaming services and apps to modulate and condition the populace to accept whatever technological mediated and biosecurity-centered “new normal” is coming, and of substituting “cyberspace” for local, grounded, in-person relations.
“Cruel Optimism” and “Ugly Feelings”: Affect Theory and Interpassivity in Relation to Digital Media
As a judgement, however, the gimmick contains an extra layer of intersubjectivity: it is what we say when we, unlike others implicitly evoked or imagined in the same moment, are not buying into what a capitalist device is promising. Robert Pfaller refers to this structure of displacement as a ‘suspended illusion’: beliefs like the superstitious ritual of the sports fan that ‘always belong to others, that are never anyone’s own [beliefs].’
It would be a disservice to understanding the extremely/terminally online without applying the lens of two heavyweights of cultural criticism, Lauren Berlant and Sianne Ngai. Berlant became prominent after her book, Cruel Optimism, managed to thread the needle of accessibility and scholarly erudition: her notion of cruel optimism can be succinctly defined as follows: “when something you desire is actually an obstacle to your own flourishing”. There is hardly a better way to explain the effect of social media today on individual psyches and the body politic. As Berlant aptly points out, her idea is connected to the notion of the “American Dream”: a delusional belief system fraught with contradictions; and one increasingly predicated on insecurity and ever-looming economic precarity. In the context of the digital age, social media use is mostly just another escape and addiction for the growing precariat — we know too much web use is bad for us, a way to pass the time with pop-media pablum and ignore the reality that our lives are being wasted on performing pointless rote work — as internet users learn experientially as the addiction takes hold and spirals.
The figure of the internet/computer addict and the ambivalence the subject has towards the object; the computer or social media account- simultaneously attracted and repulsed by it- provides a good segue towards understanding the work of Sianne Ngai. As Ngai and Berlant point out, these contradictory reactions towards commodities and media at large in some sense determine what the late Raymond Williams called the “structure of feeling” in late capitalist society.
Ngai builds on this model through a brilliant examination of cultural affect and “aesthetic categories”. Spanning decades now, her work analyses categories of emotion endemic to late capitalism: the “cute” consumer creature-comforts and the dark side of how cuteness is used to manipulate; the “zany” which can represent, among other things, the precarious hyper-active work environment, emotional labor and super-productive demands of the service economy; and the “interesting”, which can stand in for withholding judgment: here the interesting is an invitation towards a discourse with another; how aesthetic judgment comes from shared understandings and mimesis. Ngai’s varied and textured analysis leaves room to show how political subjects today can enact many categories simultaneously — the “cute” always smiling, ever-happy disposition of the service worker and the emotional labor expended performs alongside the zany ever-increasing demands of a super-fast paced retail store.
There can be no doubt that alongside social media’s hacking of our neurobiology, the systematic playing off on citizen’s mental states and emotionality represents the new “dark arts” in politics. This is why Berlant and Ngai are so prescient, because they foresaw this decades ago, just as, for example, the novelist Octavia Butler was able to foresee the slogan “Make America Great Again” in 1998.
Ngai’s most fascinating concept is her notion of “stuplimity” — a combination of shock and boredom — of the sublime with the stupid. Really, there is hardly a more apt word to describe being online today, or on social media. The incessant chatter and news headlines may at the same time excite, titillate, awe, bore, and depress us- again, the blended attractive and repulsive nature of which, like capitalism itself, is ingrained into the structure of our everyday lives.
In her most recent work, Ngai analyses the nature of the “gimmick”, and strikingly reveals the economic undercurrents of how and why we critique commodities as such. Not only do gimmicks simultaneously entertain and annoy us, they show labor and value are at the core of how we judge and develop tastes for consumer goods as well as art (here is a good interview with Ngai to explain).
To tie back to modern technology — media outlets, social media, and many overproduced devices (computers, cars) as well as superfluous ones (smartphones, tablets, private jets) well, these are all modern gimmicks of an extractivist capitalist economy. They are not capable of being produced sustainably in the long-term. Not only are these objects not built to last, trendy and faddish in a cultural sense, they are built by supply chains and manufacturing techniques which require mass exploitation, coercion, and environmental degradation. The laptop one uses for create surplus value for one’s employer is still just a softer version of accepting a blood diamond — the “cost of doing business”. Laptops with which rare earth elements are mined by child labor and victims of human trafficking in Africa, manufactured into circuit boards under unsafe and extreme conditions in East Asia, and shipped and sold by precarious laborers in transport, big-box stores and online retailers worldwide. If society is in fact unaffected, indifferent, and ignorant of such things, it does in fact reveal that our aesthetic judgments — our interior worlds of emotions as well as discernment of what constitutes truth, beauty, and various affective states has been hijacked by a culture that is hell-bent on advancing technological progress at all costs — even if it means the collapse of our web of life and the enslavement of humankind.
As the epigraph for this section points out, Ngai reminds us that the gimmick has a fungible quality — one person’s gimmick is another’s useful, or even adored good — and vice versa. The gimmick can also slip between pretentious and useless to utilitarian and labor-saving: Ngai likes to point out how the Google Glass morphed from a fad that was (appropriately) derided by consumers into a workplace device for hands-free smart-device used in industrial work.
Ngai’s work on the gimmick can be compared to Robert Pfaller’s (with an assist from the inimitable Slavoj Zizek) notion of interpassivity: the delegation of enjoyment. With social media we delegate positive experiences to the “anonymous other” — when we post, we trick ourselves into believing another is viewing and enjoying our content — even if, in fact, there is no one observing. This faces us with prospects of staging “illusions without a subject”; no one may be watching but we take pleasure in the illusion someone is doing so, in Pfaller’s examples of the TV fanatic who records shows without watching them, or of the academic who photocopies books at a library where no one else is watching. Whereas the gimmick relies on the subject who believes someone is being “duped” into buying a trivial kitsch consumer item with no “value” to most people, while they can see through the gimmick; the interpassive subject may be staging an illusion, but either no one is there to question the motive, or there is a perceived “naïve observer” in the mind of the stager.
Yet with the delegation of enjoyment, and more broadly, life experiences, are transposed in our age from material consumer goods to the immaterial realm of the internet, what passes as a gimmick becomes even trickier to define. Also, just as endless signifying chains can mutate, fold, or implode upon themselves, interpassive subjects can infinitely delegate, one to the other, feeding memes, art (which now has been degraded into “content”), videos, and journalistic forays through endless cycles. Thus the progression of an economy based on production to one based on reproduction and circulation that we find today in the West, solipsistic and self-generating, with varying degrees of simulation and hyperreality.
Technological Salvation: The Religion of the Ruling Class
Left ‘accelerationist’ ideas of a post-work society based on state-supported ‘4th industrial revolution’ development, with a UBI to pacify surplus populations, could well be enabler of, rather than alternative to, large scale capitalist AI development. Ecosocialists might also suggest that the idea that human emancipation is identical with the advance of a high-production, high-technological networked society is precisely what is thrown into question by global heating and other environmental-crises…
– Nick Dyer-Witheford, “Left Populism and Platform Capitalism”, tripleC: Communication, Capitalism & Critique, Vol. 18 No. 1
As we have seen above, the profit motive is not the only thing being served by social media. Driven by individualized “feeds”, web and screen-based news/commentary are being unleashed with additional benefits — one of which being that it is an updated model for social cohesion and mass obedience, based on elements of what Gilles Deleuze described as a “Society of Control.”
As the epigraph to this section suggests, many within progressive and even socialist spaces favor the expansion of modern technology into nearly every aspect of our lives, in order to supposedly make labor easier and alleviate undue suffering. These “left-accelerationist” and “Fully Automated Luxury Communism” (FALC) promoters have a lot of overlap with green capitalist and eco-modernist thought.
To use clumsy and obscure analogy, just as twenty years ago it was written that “Empire can be read as the Lexus and the Olive Tree of the Far Left”, today we can confidently say that FALC and its promotional grifters can be viewed as the Al Gores, Steward Brands or Alvin Tofflers of the far left. Indeed, in a sense the FALCists continue in the starry-eyed idealist vein, in the sense that the technological salvation the former believe in can be juxtaposed with the supposedly inevitable deterritorializing process of “Empire” for the latter: both presuppose and give preeminence to very Western notions of social change and the role of technology.
Why is FALC delusional, exactly? In part because the technology required to create these notions of automated communism (never mind full or luxurious) would have huge carbon and environmental footprints. Also, an AI driven 5G and eventually 6G smart grid would make even today’s omnidirectional surveillance states look like child’s play. Compounding these delusions of grandeur is the uneven development between the advanced industrial economies and the exploited postcolonial states. Where do the Western FALC advocates believe the physical infrastructure and manufacturing power will come from? From poorer developing nations of course, as there is no real desire of organizational understanding of how to revolutionize an international working class among those hoping for technological salvation. This sort of pseudo-leftism desires the comfort and security of an advanced industrial system without taking into full consideration the levels of sacrifice necessary to create an eco-socialist economic model.
These are just a few examples of how semi-radical thought reproduces and reinforces capitalist hegemony, but the wider trend has been visible for decades now. As Baudrillard wrote in Simulacra and Simulation:
It is the justice of the left that reinjects an idea of justice, the necessity of logic and morals into a rotten apparatus that is coming undone…the system puts an end one by one to all its axioms…all the objectives of the historical and revolutionary Left that sees itself constrained to revive the wheels of capital in order to lay siege to them one day…everything that is disappearing, that the system itself, in its atrocity, certainly, but also in its irreversible impulse, has liquidated, must be conserved.
The Ouroboros Economy
All corporations become increasingly organized around the worship and control of information. Control over the value chain through ownership of the information vector extends even into life itself…through monitoring its states, through modifying its functions with drugs that alter chemical signals, through patenting aspects of life as design. What is at stake is neither a bios nor a polis but a regime of property in information extending into the organism. The novel forces of production as they have emerged in our time are also forces of reproduction and forces of circulation.
– Mckenzie Wark, Capital is Dead: Is This Something Worse?
When Debord noted, and rightly so, that the spectacle is a “social relation among people, mediated by images”, it was understood that we all participate in and collectively make up the spectacular worldview. Yet that is not how many people today think, and when it is casually mentioned, spectacle is situated outside the self, not a set of social relations. Unfortunately, being able to detect vacuously transparent and craven corporate advertising as well as political rhetoric mostly is not sufficient for the second-level effects on the unconscious. As “desiring machines” integrated into late stage capitalism, the prison is not longer only physically constructed around us- and not only have we become both inmate and warden, oftentimes we take it on ourselves to perform the labor, both at work and in leisure time, that entrenches the powers of corporations and the national security state.
Here, it helps to have a grasp of a few key basic concepts from thinkers such as Debord, Foucault, Baudrillard, Deleuze and Guattari, and also Bourdieu, and even Latour. As many have noted, the pandemic has conveniently set the stage for capital and computer technology to fully absorb nearly all facets of everyday life, which reinforces the arguments of the terminally online and their worship of technology, and thus, American empire.
For Baudrillard a metaphor of simulation could be visualized as the Mobius strip, and for Deleuze describing the society of control it was the serpent. Today we can conjoin the concepts into the archetype of the ouroboros — a self-contained system of simulation and hyperreality, embedded to an immanent, infinite process of death and rebirth, one that contains within it seeds of destruction and the potential for renewal and societal transformation. The ouroboros encapsulates our era: from cybernetics, to algorithmic feedback loops of code, to cosmology, and even evolutionary anthropology, to the financialization and cannabilization of economies, the circuital globe-spanning nature of capital, the ineffable mimetic nature of cultural transmission and (re)production.
The consolidation of media narratives into social media outlets performs one unique function insofar as it renders the “official” establishment narrative into the only possible reasonable, logical way of seeing the world. Analogically, one can see this as a digital version of what Deleuze and Guattari called “state philosophy”, the incorporation and transmutation of “proper” stories and events into those which uphold state hegemony and corporate control. Of course, there can never be a totalization of these views online, just as there could not before in the age of print, or before in oral traditions. Reality cannot be consolidated into a tweet, just as it could not before in a newspaper editorial. What comes out of the void are “post-truths”, “alternative facts”, and other unruly features foreseen decades ago by Bruno Latour, when he undertook that could be called an anthropological study of modern science. Thus, what used to be called misinformation or half-truths have been reified by mainstream media, as objects with viral properties that must be censored before they can “infect” the populace.
What seems to be happening over and over again on the media satured/technophilic left is the refusal, the blind spot which keeps repeating the mantra that media monopolization and social media misuse by tech elites is somehow only driven by money and profit motives. The elites already have all the money. Certainly, their greed is a huge driving force, but what’s another billion to someone with a net worth of 50 or 100 billion. At a certain point one has to concede that there are deeper, more sinister agendas, which involve shaping reality and perception, and total social control. As one can easily see with a healthy degree of skepticism towards technological progress, lockdowns and restrictions due to Covid-19 are a perfect excuse for the nascent authoritarian biosecurity state, just as the legitimate protests against police brutality will be used by the state to implement more curfews and police state measures.
Social media and digital media are in the midst of a totalizing process in which all dissent will be censored, shadow-banned, or posts that differ from official narratives “throttled” by tech algorithms. The age of book-burning may be over but a new age of technological authoritarianism is emerging. To assuage the worst aspects of this emerging techno-feudal society, where “the economy” has fully replaced society and monetization of content and followings has replaced spontaneous and anarchic/communistic web interaction are the extremely online celebrities, influencers, and the corporate cut-outs and shills who fund them: and they strive towards and imitate tech owners and executives, bankers, lawyers, doctors, and various professional class snake-oil salespeople who offer escapist fantasies, slavish devotion to modern technology and overconsumption.
Since the upper and upper-middle classes are surrounded by corporate and state propaganda like fish in an ocean, which conforms to varying degrees to Bordieu’s notion of habitus; they are the most likely to “buy in” to the new prison system mediated by new repressive technology apparatuses, which is in line with Herman and Chomsky’s findings in Manufacturing Consent.
Like the sirens of Greek mythology, the job of the influencer, backed and financed by the ruling class, is to hypnotize the masses, and lull us back to sleep — “be like us” they intonate, we’re rich, successful, famous, powerful. While the vast majority toil away working for technological advancement and capital, the tech tyrants and web celebrities succeed by making internet technology and monopolized media work for them. Since the ruling class and new media elite earn passive income from conglomerate platforms, algorithms, and computing power, they have no interest in discovering how they have become the new architects of inequality and mass immiseration. It’s up to us to show them.The post The Rise of the Terminally Online first appeared on Dissident Voice.
What’s gotten in the way of education in the United States is a theory of social engineering that says there is ONE RIGHT WAY to proceed with growing up.
― John Taylor Gatto, Dumbing Us Down: The Hidden Curriculum of Compulsory Schooling
We used to research the cup of coffee. School. Mostly community colleges, but at two universities — UT-El Paso and Gonzaga. A lot of evening classes I taught. Even on military compounds, and in prisons, and in the bowels of twin plants in Juarez.
In the old days, sleeves rolled up, adults and young people in classrooms, computers, paper and white boards at our ready, would get comfortable and uncomfortable. It was not an easy class, those Composition 101 and 102 mandatory (sometimes ONLY) writing classes for college students (I am so for mandatory 12 classes on writing, thinking, media, rhetoric, propaganda, etc.). Food and drinks, music during essay writing, and face to face consternation and confrontation. Cooperation.
That cup of coffee from the earliest look at where that bean came from originally intrigued the students. Who would have known (we talked about the Colombian exchange, the Doctrine of Discovery, food, animals, other things that came to the Imperialists). Think of the spice islands on steroids:
The original domesticated coffee plant is said to have been from Harar, and the native population is thought to be derived from Ethiopia with distinct nearby populations in Sudan and Kenya. Coffee was primarily consumed in the Islamic world where it originated and was directly related to religious practices.
Fun stuff, this sort of research and writing, and deep dive. We turned these assignments into poetry, poster illustrations, research papers on the diseases of coffee, on the power of coffee like so many thousands of other foods and products, crossing oceans. Many a product of empire and racism, and the coffee paper also turned into “Is There Slavery in Your Chocolate?” essays.
In recent years, a handful of organizations and journalists have exposed the widespread use of child labor, and in some cases slavery, on cocoa farms in Western Africa. Since then, the industry has become increasingly secretive, making it difficult for reporters to not only access farms where human rights violations still occur, but to then disseminate this information to the public. In 2004, the Ivorian First Lady’s entourage allegedly kidnapped and killed a journalist reporting on government corruption in its profitable cocoa industry. In 2010, Ivorian government authorities detained three newspaper journalists after they published an article exposing government corruption in the cocoa sector. The farms of Western Africa supply cocoa to international giants such as Hershey’s, Mars, and Nestlé—revealing the industry’s direct connection to the worst forms of child labor, human trafficking, and slavery. (Source)
So much has happened since I first hit the streets as a newspaper journalist in 1977, and so much has changed since I started teaching college classes in research writing and writing and journalism (1983). The “see, speak, hear no evil” paradigm is the destiny of capitalists. It is the way of who we are every waking nanosecond of our lives. Boycott Divest Sanction my ass. This is where I also pretzel myself into contradiction after contradiction. I should be on an island, or just on 20 acres I have near Mount Adams. Eating mushrooms and stitching moss and bark clothing.
Capitalism is the cancer, virus, prion, the tapeworm, the carrot and the stick. It is the blood sucker of all concepts. Slavery is Capitalism. We talked about this, in so many ways, not always me railing overtly with my anti-Capitalist thesis. I would bring to class small business owners, restaurant owners, ex-military, nonprofit directors, friends who were homeless, living in garages, artists, and dissidents of many kinds. Another thing that is DEAD in the water.
Now, you have to get people vetted and approved to come to a classroom. This is the sickness of our lefty culture. The rightwing has already played this card, too. “Why the hell are you bringing a person from Planned Parenthood to your class? Illegal. Stop. I’m calling the president.”
That coffee, now, looking at a cup, the ecological footprint, the energy used to get a cup of coffee to say, my Spokane students. Because Spokane loves its coffee. The amount of water used to grow a cup of coffee. We’d look at the coffee in Central America, or Colombia. Where that plant is grown. What was bulldozed to bring that plantation there. Who works the finca? Which indigenous group of non-Spanish speakers in Guatemala work these plantation, tends the bushes, picks and dries the cherries. Species lost, pesticides used. Water diverted. And, food crops denied.
Again, young and older adults, blown away in my classes, since I was teaching them to look deeper at any number of topics, and develop critical thinking and discourse skills, in whatever watered down version I’d get with many students who were coming to college ill-prepared to really write “essays.” Variations on a theme. Just the cup of liquid, first grown and processed in poor countries, takes about 38 gallons of water to grow.
We’d try and research more and more on the life-cycle of a ceramic cup or Starbucks thermos, and the life cycle and life span of a coffee maker. Embedded energy, waste, mining, slave warehouses, metals, all that fossil fuel to move those metals, cook them, mill them, ship them around the world. Sure, we could look at at sack of dried but not roasted coffee cherries coming from the Guatemala Highlands, and then where it gets shipped by boat, and then moved by truck, and then the actual cleaning and roasting of the coffee. Packaging, and then, that journey is crossing back and forth, over land, in the air, over seas.
The assignment blows many students’ minds, as it should. In the classroom, and I’d bring in a coffee person, with coffee and snacks, and she’d talk about farms in Mexico and Africa she’s visited. Talk about the flavor, the various types of coffees.
We’d look at Fair Trade, Beyond Fair Trade, Shade Grown and the like. Socially responsible coffee. I’d talk about how Vietnam — where I had gone and worked — was cutting more and more forests down to grow coffee. Coffee pests and diseases, and soil enhancements with fertilizers. The entire life cycle analysis of as many things we could extract from the coffee history and production, well, it blows students’ minds, and it only works in person. Don’t fool yourself with the fucking mouse, keyboard and Zoom camera/mic.
We need to talk about the environmental and human and ecological costs of plantation, mountain-razing coffee:
This pathetic Zoom and remote learning (sic) formula is the deadening of the brain. Recall, Americans already have three quarters of their brains (or more) colonized by lies, propaganda, hate, myth, plain stupidity, largely from terrible K12 (prison with smiling teachers) and all the marketing, and a government whose job is to fleece the masses for the company men, and fleecing includes culling thinking and deep analysis.
All this work, for coffee? Nope, because the students then do some of their own research on any manner of things. Cause and effect, solutions, pro-con, classification, expository, digital rhetoric, and deeper position papers. Research, and while we share sources and do all sorts of things at home, in groups, the big thing is getting the classroom energized, talking, arguing. Debate every minute. We even meet out of class in a, well, coffee shop, and coffee roaster.
Thinking about origins and perspectives. This is a full-time job as an instructor, in the class with all sorts of human beings there taking in and reacting to the work, the talks, the learning and the discourse. This Zoom shit is the death of humanity as I knew it. Radical Pedagogy, 2003 article!
Always with food, something in the class, mostly evening classes.
In 1960, the University of Missouri published a short “Guide for Television Teachers.” Across the country, over 100 different colleges offered nearly 500 televised courses to a half a million students. So professors needed pointers about the best way to teach in this burgeoning new medium.
“Relax,” the Missouri guide underlined. “Try to be yourself.” Male professors should wear “conservative” ties, the guide added, while women should avoid necklines or hemlines that might “cause discomfort or embarrassment” if they leaned over a counter or sat in a low chair. Once they were properly attired, they could loosen up and let their real character shine through. “Remember that the TV camera projects your natural personality best,” the guide urged, “and the more relaxed and natural that you are, the better you will reach your viewers.”
Who are these children forced to work the cocoa plantations of the Ivory Coast?
Shit, those were the days. And here I am, suffering at age 64. I am feeling the burn, the beat-down burn, of more and more people around me stupid, mean, see-speak-hear not evil when it comes to this fucked up Empire, This War Machine. Those were the good old days? Is that my new mindset and refrain?
It is the contradiction to be an American totally — North American, Canadian or citizen of the USA. Every waking and sleeping minute we are covering the world in blood, exploitation, penury, death. Pain and misery is the way of the land. The hollow media, the celebrities in music and film, oh even more viral than the politicians. They are the elite, or the elite’s house boys or house girls.
“So what can we do but go with the flow? Just let it go. They have all the power, so just live your life as best you can. It’s not that bad. If we don’t bomb the world, steal the minerals, colonize space with weapons, then someone else will. What about China, Russia? I want a family, a job, and just a chance to live on weekends and kayak and smell the moose dung.”
I am down — really depressed — because of what that cup of coffee assignment represents: I am old. I am no good as a teacher because it is a digital and PC and cancel culture study body. I am down because most of the people I would have worked with years ago on political issues, as artists, well, they are either dead, or brains deadened by the struggle and the losing. I am depressed because that cup of coffee assignment is not lauded. The entire Western Civilization or Western Culture is in various forms of mental illness. That illness grouping includes a million wrong ways to medicate or mediate the illnesses of the minds.
I am not that, but I am alone, it seems. Now, the coffee, and where it comes from. Do I invest in Folgers Coffee (a division of J.M Smucker Company)? This is what’s depressing me now — my spouse and I are moving some money saved into some investments. Now I have to decide how to put some of it away, or as they say, to invest it. Because there are no interest rates, the average person can’t go to a state bank or any institution and put money into a municipal bond to do some good for society and make a few percentage points above zero. What’s wrong with 4 percent or 5 percent interest? That is the crime, zero or negative interest rates. Criminal. Imagine, there is not one thing on planet Earth, planet Wall Street, planet Retirement Fund which is not heavily tainted with DDDD: death, disease, destruction and destitution. We have been relooking at Socially Responsible Mutual Funds, or ESG’s, and the picture was never pretty:
Oh, you can say, “Broker, find me a fund that isn’t into war, weapons, mining, prisons, guns, germs, exploitation, banks, insurance companies.” It is virtually impossible. You might not want Walmart stock in the mutual fund, but then Amazon and Facebook and Kraft Foods might be in it. Microsoft, Boeing. Any amount of honor or commitment to NOT engaging in investing that gives money to the murderers, the exploiters, the ocean-soil-jungle-forest-wetland-river killers, it is all lost because they all are wrapped up into one big fat thievery corporation — BlackRock and Blackstone and the top 100 banks, hedge funds, and so many other “if-you-can-make-6-or-12-percent-on-yearly-return” investment products are so embedded in the master slavers in Fortune 1000 circles, and even within the 10,000 largest corporations.
The system is rigged for brokers to use brokerage houses, big ones, and those fees — buy, sell, trade, manage — more money and profits made for NOT producing one potato or bicycle. Yet, MBAs and the others in this crew believe that they don’t want their precious children to work the slave fields of Ivory Coast, or to be soccer ball stitchers, or to be at the wrong end of a toxic waste discharge hose. But invest in Hershey’s, or Nike, or Smithfield, well, out of sight, out of mind. Yep, they would not want their precious families bombed with the amazing number of components tied to an amazing number of businesses wrapped up in one missile. Screws, wires, capacitors, metal shrouding, telemetry, paint, seals, nuts and bolts, precision metal parts, tubes and coils and electronic guidance systems and batteries and, well, you get the picture. But goddamn, you can make bank on investing in defense (sic) companies because there is an endless demand by governments to have that shit in stock. We the taxpayer pay for those Hellfire’s:
Lockheed Martin, Boeing (previous second source), and Northrop Grumman (seeker only for AGM-114L Longbow Hellfire) Unit cost US$150,000 (FY 2021)!
It’s much more than just those three companies making bank for these missiles. There is an entire contingent (armies) of companies and service economies tied to this murder weapon:
Pretty simple looking murder weapon: those companies making tons of money, and the death makes more money for them, in resupplying.
In the past, I have studied mutual funds I have invested in, to squirrel away some savings, and the picture is pretty ugly. There are no SRI’s that are nothing more than just market washing. Socially Responsible Investing, NOT:
Top Holdings — Axis Bluechip
|Company||Sector||P/E||3Y High||3Y Low||% Assets|
|Tata Consultancy Services||Technology||34.90||9.05||2.30||7.32|
|Kotak Mahindra Bank||Financial||33.90||9.46||4.74||7.12|
|Motherson Sumi Systems||Automobile||147.57||2.08||0.00||2.08|
|Maruti Suzuki India||Automobile||46.37||5.83||0.00||1.89|
|Titan Company||Cons Durable||139.72||3.45||0.78||0.98|
|Dr. Reddy’s Lab||Healthcare||44.62||3.21||0.00||0.94|
|HDFC Life Insurance||Financial||99.18||1.82||0.00||0.89|
This is the Bill and Melinda Gates Foundation’s Fund holdings, in general:
Top Warren Buffett Stocks By Size
Here are the top 10 Warren Buffett stocks by number of shares, as of March 31:
- Bank of America (BAC), 1.01 billion
- Apple (AAPL), 887.1 million
- Coca-Cola (KO), 400 million
- Kraft Heinz (KHC), 325.6 million
- Verizon (VZ), 158.8 million
- American Express (AXP), 151.6 million
- U.S. Bancorp (USB), 129.7 million
- Bank of New York Mellon (BK), 72.4 million
- General Motors (GM), 67 million
- Kroger (KR), 51.1 million
Look at what Warren Buffett owns as part of Berkshire Hathaway. Products — Diversified investments, property and casualty insurance, Utilities, Restaurants, Food processing, Aerospace, Media, Toys, Automotive, Sporting goods, Consumer products, Internet, Real estate, Railroad
So the average Joe and Jane, if they get a mutual fund or two for some long-term investment, this is the reality — you might be a social justice warrior, an anti-racist campaigner, an anti-war proponent, an environmentalist, community crusader, a socialist, an anti-capitalist, but if you stick your toe just a bit into the pond for minimal investments, just to protect a few thousand dollars here and there, this is what you get — money into the pockets of madmen: school to prison pipeline experts, war lords, surveillance capitalists, drug pushers, bad loan chieftains, medical fraudsters, real estate thugs, polluters, mountaintop removers, river toxifiers, land thieves, propaganda priests.
I am so serious about this now — where does the money go, and which company is being supported by stockholders shoveling money into their companies? Look at the union busters, at the price gougers, at the political lobbying arms, all these giant corporations and their networks of bunkos!
You can turn blue in the face decrying Monsanto (Bayer) for its pesticide poisons or Exxon for climate change propaganda or Sackler/Purdue Pharmacy for opioid addictions, but if you have a mutual fund, there is a chance that somehow those companies are entwined somewhere in the formula of a “strong mutual fund.”
The corporate giants are also demanding that Congress allow the repatriation of about $2.5 trillion stashed abroad without paying more than 5% tax. They say the money would be used to grow the economy and create jobs. Last time CEOs promised this result in 2004, Congress approved, and then was double-crossed. The companies spent the bulk on stock buybacks, their own pay raises and some dividend increases.
There are more shenanigans. With low interest rates that are deductible, companies actually borrow money to finance their stock buybacks. If the stock market tanks, these companies will have a self-created debt load to handle. A former Citigroup executive, Richard Parsons, has expressed worry about a “massively manipulated” stock market which “scares the crap” out of him.
Banks that pay you near zero interest on your savings announced on June 28, 2017 the biggest single buyback in history – a $92.8 billion extraction. Drug companies who say their sky-high drug prices are needed to fund R&D. But between 2006 and 2017, 18 drug company CEOs spent a combined staggering $516 billion on buybacks and dividends – more than their inflated claims of spending for R&D. — Nader
We all are sinners in capitalism — just paying our tax bill: death and destruction raining down on Palestinians, for example:
“Seven deadly sins: Wealth without work, Pleasure without conscience, Science without humanity, Knowledge without character, Politics without principle, Commerce without morality, Worship without sacrifice.” – Mahatma Gandhi
Oh, we all think we have found the formula for living in this insane and murderous country. Oh, we have to put nose to the grindstone. Follow the leaders. Get the jab. Do as you are told. You home is not your castle. There are no 40 acres and a mule. No handouts. Pull yourself up by your own bootstraps. Pinch your nose, cover your eyes, plug your ears, muffle your mouth!
So, you end up throwing in the towel — no purity test, no selective boycotting of this or that product or service. No true anti-Imperialist leaning, when tax filing time comes. Nothing free in this un-Democratic land of thieves, murderers and thugs. Almost every step you take in America is full of landmines, cow pies, toxic puddles and electrified fences. The horizon is one theater of the absurd after another. The amount of nonsense and self-congratulatory verbiage from all manner of people who think they are enlightened or vaunted or above the dirty, scab-sucking, ripoff fray of capitalism, well, that is the self-delusion, the big lie.
So, the role of k12, and of higher education? One of the key foundations for a society — good education, robust, and deep learning, deep thinking, and systems thinking growing. Under capitalism and consumerism and conformist ideology that is US of Amnesia, there are so many broken things about face to face education, and I have written tons on this. Taking it to Zoom, to televised classes, remote learning, well, all the bad gets funneled into this new normal-abnormal.
The post Try as You May to Deny, but Evil is in Our DNA first appeared on Dissident Voice.
In addition to education, colleges and universities provide indoctrination in the values and shared beliefs that our society deems important. These commonly shared values and tenets must be instilled, importantly beginning in grade school and before (the Jesuit boast, variously stated, is “Give me the first seven years and you can have all the rest”), and continued and reinforced through high school and college.
It is at the university where young men and women of indoctrinated conviction are most typically apt and able to respond to what is going on in the world around them, perhaps even take to the streets. Indoctrination can be overt or subtle. — George Heitmann
In recent years, the ripping off of customers, deceit and even outright fraud practiced by Australian finance sector businesses has gained much attention. Four years ago it was revealed how CommInsure, the insurance arm of the Commonwealth Bank of Australia (CBA), had refused to make promised life insurance payments to heart attack survivors. They “justified” this by using a definition of a heart attack that was so dodgy that even some people who had such a severe heart attack that they had to be resuscitated were denied their entitled pay outs! Such devious practices have been undertaken by finance sector enterprises big and small – from the big four banks and insurance giants to brokers and loan enablers and to retail businesses that hand out loans. As a result the banks, insurance companies and the brokers and others connected to them are widely hated by the masses. With good reason! Yet finance sector institutions have a decisive influence on society. For it is they who determine how credit is distributed and credit is absolutely critical to the running of modern economies. Especially at this desperate time when this country and much of the world face both a public health emergency and economic collapse, it is vital that credit is allocated in ways that can best respond to the COVID-19 virus threat and into areas that can best ensure that the jobs and wages of millions of working class people are guaranteed. Yet would you trust the lying, greed-driven bosses of the banks and insurance companies to do this? You would be totally nuts if you did! We need to put all the banks and insurance companies under state control! In other words, we need to nationalise the finance sector.
In late 2017, there was so much anger built up against the banks, insurance giants and brokers that former prime minister Malcolm Turnbull, realising the need to “restore the credibility” of the finance sector, finally acceded to widespread demands for a royal commission into the banking and insurance industry. That Royal Commission revealed more details of what many of us already knew. Banks were giving secret commissions to brokers to entice them to get home buyers to take out home loans with their particular banks. Banks hid these payments in order to trick their customers into believing that their customers’ “own” brokers were “independent.” But, actually, the payments that these brokers received from particular banks gave them an incentive to get people to take out mortgages with these same particular banks even if that was not the best option for the broker’s customer. And the brokers did this in spades! Moreover, since the commission received by the broker got larger the bigger the loan taken out by their customers, the brokers, with a nod and a wink from the banks paying them, often pushed their customers into buying a more expensive house than they could actually afford. That is part of why household debt is so frighteningly high in Australia.
One of the aspects of the finance sector industry that was exposed is the practice of charging clients fees for no service. Banks and insurance companies and their financial planning and superannuation subsidiaries were found to be charging people “advice” and “service” fees for their investments and superannuation accounts but then providing no advice at all. Put simply, the banks and insurance companies were downright stealing from hundreds of thousands of their customers. AMP, NAB, CBA, ANZ and Westpac were found to be the worst offenders. The amount that these companies stole from their customers through fees for no service was officially estimated to be well over a billion dollars. The real figure could be even higher. Moreover, some of these institutions had even knowingly continued to charge their customers fees for no service … after they had died! The fees would then be paid out of the estate of the deceased customers – in other words, be paid largely by the close relatives of the deceased customers, most often their spouses and children. The Commonwealth Bank even knowingly charged one of their dead clients fees for “financial planning advice” for more than a decade after they died! Meanwhile, insurance giant AMP continued to charge some of their dead customers life insurance premiums.
A Slap on the Wrists for the Swindling Banks and Insurance Companies
The banking royal commission and the media coverage surrounding it tended to focus on atrocities committed against small business owners, farmers and other middle class customers – especially upper-middle class ones – or against better paid workers able to acquire substantial savings. Indeed, under the capitalist system the big capitalists – at the apex of which stand the bank owners – rip off the small-scale capitalist exploiters and all of them, while leaching the most from wage workers, skim off also from the middle class, even from the upper middle class. Yet, the people most hurt by the thieving greed of the banks and insurance companies are average income workers and especially lower-paid, casual and unemployed workers. They are the people most hurt by the banks charging large set fees as these fees often make up such a big proportion of their modest savings. It is poorly paid workers, retrenched workers and long term unemployed workers who are also the most burdened by the extortionate interest rates charged by banks in credit card accounts. It is the low income of these people which pushed them to get into debt in the first place, while the cruel interest rate they must pay off with their debts plus their meagre incomes ensures that many have little possibility of ever paying off these debts. And often desperate for credit, casual and unemployed workers, low income single mothers and people with disabilities are the most vulnerable to being ripped off by loan brokers and short term credit providers handing out loans with exorbitant interest rates.
The banking royal commission did hear about how insurance companies were using aggressive telemarketing and deceptive policies to rip off Aboriginal customers, many struggling on low incomes. It was told of how insurance companies operating in remote Aboriginal communities took advantage of language barriers and Aboriginal people’s tendency to be friendly and polite to sign up on the phone Aboriginal people to life and funeral insurance that they neither truly consented to nor even needed. One of the enterprises exposed for pushing unnecessary funeral insurance on Aboriginal people is the “Aboriginal Community Benefit Fund” (ABCF). With its name including “Aboriginal Community” and its use of a rainbow serpent image, ABCF gave the impression that it was an Aboriginal community-run organisation. But it was not! It was a private, profit-driven company that was neither owned nor managed by Aboriginal people. However, ABCF used the trust gained by the appearance of being a community-run organisation to push Aboriginal people into forking out large amounts for funeral insurance that they did not need. Thus ABCF often signed up healthy young Aboriginal woman in their twenties and early thirties for funeral insurance. They even pushed thousands of Aboriginal parents into getting funeral insurance for their babies in schemes that would cost up to $100,000 over a lifetime! ABCF owners then quietly excluded families of Aboriginal people who died from suicide from receiving payouts, thus ensuring that they would not to have to pay claims of a very large proportion of the insured children that actually did die young.
The banking royal commission did also hear snippets about the massive exploitation of low-income people by businesses handing out consumer leases and so-called payday loans – where people are lent money until their next pay check at massive interest rates. Aboriginal financial counsellor, Lynda Edwards, also told of how car dealers took advantage of the necessity for cars in remote areas to sell Aboriginal people dud cars with ultra-high interest loans. A report published a year ago by Flinders University detailed how one Aboriginal customer was made to pay $52,000 for an $18,000 car at an interest rate of 35% despite the fact that the over-priced used car stopped working long before the loan was repaid! Indeed, the royal commission was told of how some Aboriginal people had been charged even higher interest rates for car loans, rates of 48%!
Yet the nature of the Royal Commission was such that it did not compel those involved in such scams and high-interest loan pushing to defend their actions. As senior counsel assisting the commission, Rowena Orr QC, explained: “We will not be considering consumer leases, payday loans or in-store credit arrangements in these hearings because they do not fall within the terms of reference of the commission.” Put simply, the Royal Commission was not meant to truly protect the interests of low-income people from the predatory behaviour of banks, insurance firms and retail business owners. To the extent that the banking royal commission was not entirely about “restoring the credibility of the finance sector” or simply about allowing the furious masses to vent steam in a way that does not actually harm the interests of the finance industry bigwigs, the investigation was aimed at curbing the excesses of the bank owners in the interests of other sections of the capitalist class – including retail sector bigwigs, “small and medium size” enterprise bosses and big farm owners – as well as the more privileged sections of the middle class that the upper class rely on for social and political support. After all, the state in capitalist countries is an executive committee for managing the affairs of the capitalist labour-exploiting class as a whole. At times they have to slightly clip the wings of even their most powerful section – the finance sector bigwigs – in order to ensure the interests of the rich ruling class as a whole. But even here the Royal Commission’s impact was minimal. Sure, there were some stunning revelations of the depth of the banks and insurers’ greed and deceit. Several finance sector CEOs and directors also had to resign from their positions in the wake of the revelations and, mind you, then take away multi-million dollar severance pay and shareholdings, thank you very much. Yet Royal Commission head, Kenneth Hayne, did not recommend one single charge against any specific finance sector boss despite the fact that the hearings of the commission plainly showed that banks and insurance companies had stolen and swindled well over a billion dollars from hundreds of thousands of their customers. Instead, the commissioner handed over 24 recommendations to the regulators over instances of misconduct and charged them with the responsibility of considering any action. However, he refused to even name the people and institutions involved. And over a year since the final report of the commission was handed down, not a single finance sector boss has been charged let alone been put behind bars. Meanwhile, even after having promised to implement nearly all of Commissioner Hayne’s recommendations, the government has yet to even introduce legislation to turn several of the recommendations into law.
The more important point is that Commissioner Hayne’s report only recommended cosmetic changes to the finance sector. Cold calling of financial products over the phone was recommended to be banned and mortgage brokers would be required to act in the best interests of their customers (as if that is going to actually happen!). However, the economic power, profitability and overall impunity of the finance sector corporations will be largely untouched. In fact, the bank owners were so delighted with the outcome of the Royal Commission that the first stock market trading after the commissioner handed down his final report saw the share prices of the big four banks skyrocket by almost A$20 billion – their biggest one day rise ever!
The limp recommendations of the Royal Commission are, indeed, what the right-wing Australian government always intended to be the outcome. Indeed, the Liberal government was so intent on enhancing the reputation of the bank bosses that shortly before the Royal Commission was announced, they and the bank heads arranged for the bank bosses to send a letter to the government themselves calling for the Royal Commission! This enabled the government to put the bank bigwigs in good light by saying that the banks themselves wanted the inquiry. Indeed, the relationship between bank owners and the government is so cosy that the letter from the heads of the big four banks to the government calling for the Royal Commission was first sent in draft form to the then treasurer, Scott Morrison, to be vetted by him before being made an official letter the next day! Let’s not forget that the then prime minister, Malcolm Turnbull, who, kicking and screaming, called the Royal Commission was himself the owner of an investment banking firm and later a managing director for the Australian arm of U.S. banking giant, Goldman Sachs.
In order to appease their working class base and appeal to widespread middle class public opinion, the ALP Opposition has been more critical of the banks than the Coalition government. But let us remember that when they were in government previously from 2007 to 2013, when some of the most blatant fraud by the finance sector companies was being committed, the ALP also did nothing to stop it. Today in the wake of the Royal Commission, the ALP only called for implementing its weak recommendations. Nothing more. The ALP are certainly not calling for putting the banks under state control or even under greater regulation. After all it was the former Hawke-Keating ALP government that carried out the biggest deregulation of the finance sector in Australian history. They removed the cap on the interest rates that banks could charge for home loans and abolished other controls on bank interest rates. In short, the Hawke-Keating Labor government freed up bank owners to do whatever it takes to maximise profits regardless of the consequences to society. Most harmfully, they also privatised the formerly state-owned Commonwealth Bank.
While the ALP is a party with a working class base, its futile program of trying to improve the lot of workers while accepting the capitalist order means that it necessarily needs to collaborate with – and ultimately kowtow to – that apex of capitalist power, finance capital. Thus, the ALP’s ties to the bank bosses are not far behind those of the conservatives. The investment banking firm that Malcolm Turnbull established, referred to above, was actually set up in a partnership with none other than former NSW ALP premier, Neville Wran, and Nicholas Whitlam – the son of former prime minister and ALP icon, Gough Whitlam. The bank was actually called Whitlam Turnbull & Co Ltd. Today, the CEO of the Australian Banking Association, who has done so much to deceive the population by being the chief apologist for the bank bosses is former Queensland ALP premier, Anna Bligh. Meanwhile, during the last financial year that disclosures of political donations have been revealed, 2018-19, the ALP received more than $2.5 million from Westpac alone! They were also given $50,000 from the main body representing general insurance firms, the Insurance Council of Australia, as well as plenty of other big donations from individual insurance companies and other banks. And that does not include the large amount of political donations that are disguised or hidden.
Of course, the banks and insurance companies also made big donations to the Liberal Party too. The Insurance Council of Australia gave them $27,500 and Anna Bligh’s Australian Banking Association the same amount. For its part, CBA donated $55,000. Westpac Bank donated a hefty $82,500 to the Liberals but that pales against their $2.5 million donations to the ALP during 2018-19. Likely, the Westpac bigwigs knew that they already had the Liberals fully in their bag!
The Myth that the Big Corporations are Owned by “Everyday Australians” through Our Superannuation
The problem isn’t simply that the banks and other finance businesses sometimes engage in open theft from their customers and other deceptive conduct. It’s the normal working of these enterprises that is the main problem. Banks make their money by extracting fees from account holders and primarily by charging a higher interest rate on the loans that they give out than the rate that they pay depositors. And they leach a lot of money that way! In the 2018-19 financial year, the “big four” Australian banks and the three biggest Australian-owned insurance companies, IAG, Suncorp and QBE, together extracted nearly $29 billion from us and that’s not including the huge amounts also grabbed by smaller banks and insurers as well as by mortgage brokers, consumer lease providers and payday cash operators. And that was considered a bad year for them! All this money extracted by the finance sector businesses is like an extra tax on the masses. But it is a tax where the proceeds don’t go into the public budget but into the hands of the wealthy finance sector business owners. If we note that there are currently about 9.8 million households and then do a quick calculation we find that the biggest four Australian-owned banks and largest three Australian-owned insurers are leaching $3,000 in profit, on average, from each household every year. To put that in perspective, that is more than one in five dollars of what an unemployed single person receives in the Newstart Allowance (if one excludes the temporary increase to the Newstart Allowance granted during the Covid-19 pandemic)!
Most working class and middle class people are only too aware that “The Banks” are ripping us off. But who do we exactly mean when we talk about “The Banks” that leach from us. Most of us think of the CEOs and the directors that award themselves huge salary packages. And with good reason! Last year, Westpac’s CEO took home over $5 million, ANZ CEO Shayne Elliot even more and IAG CEO Peter Harmer topped the lot receiving a five and a half million dollars package. And that was all in a year when the bank bosses, aware that they were under the spotlight, wanted to pretend that that they were feeling contrition for their devious deeds by awarding themselves lower payments than usual!
Yet as obscene are the payments are to the bank executives, that is still only a small percentage of bank profits. Where else are banks gigantic earnings going? Certainly not to their rank and file employees! So let’s take a look at Australia’s biggest bank, CBA. Last financial year CBA had a total operating income of $24 billion. Some of it they spent on equipment, wages, occupancy and operating costs. Most of their income then, after paying tax, ends up as profit for their owners. Nearly $8.5 billion to be precise. Of that nearly a billion went to beef up the assets of the bank to help its owners make greater profits in the future and $7.6 billion was given as dividends to the banks shareholders, i.e. to the banks owners. That’s who is taking most of the wealth extracted from the masses by the banks. By contrast, the more than 48,000 employees of the CBA received $5.5 billion in salaries and superannuation, which is a lot less than the shareholders received for doing absolutely no work at all. The amount received by the bank employees is also less than a quarter of the bank’s overall operating income. And of these more than 48,000 employees, the majority of them, the rank and file employees – say at least 40,000 of the workers – would each receive small slices of the salary cake while the managers and executives each take gluttonously big slices. After all, the bank’s top executives and other directors (there are just 20 of them), alone were paid $40 million last year; and that is counted as a “staff” cost. By contrast the average salary package, including superannuation, of CBA’s other employees is $114,000 – which is 40 times less than what the CEO took home. Moreover, when you exclude the managers and others in the top 20% of highest paid staff who would bring up that average income number, one would find that the annual wage of the vast majority of CBA workers wouldn’t be much more than – and in many cases less than – $75,000 and certainly well below $100,000. Moreover, to the bank bigwigs, these bank workers are expendable. As soon as the bank bosses decide that they can make a still higher profit with fewer workers, they will throw into the dole queues the employees whose hard work has allowed bank executives and big shareholders to acquire such immense wealth. Over the last several years, the bigwigs of the big four banks have together retrenched tens of thousands of workers. In late 2017, then NAB CEO, Andrew Thorburn, infamously announced the axing of 6,600 jobs at the very same time that he gloatingly announced that the bank had made a whopping annual profit of $6.6 billion.
So, who then are the shareholders who are reaping the rewards of the banks’ ripping off of the masses’ money? The finance corporations’ bosses and their bigwigs try to sell us the line that their companies are owned mostly by superannuation funds and through the dividends distributed to these funds their profits end up going to “ordinary, everyday Australians.” Nothing could be further from the truth! But before exploring this point in more detail, it is important to here make a point about superannuation more broadly. Superannuation, as a means of distributing income to the aged, in contrast to pensions, is not fair. It is not fair not only in practice but in the very concept of it.
Under the superannuation system a proportion of people’s income (9.5% of their gross wage currently) when they are working goes into their personal accounts which gets managed by superannuation companies and is then accessible when they retire. So a worker on the minimum wage in a full-time job gets $3,467 of superannuation put into their account each year. By contrast, the Westpac CEO last year received $44,320 in superannuation payments, nearly 13 times more than a worker on the minimum wage gets. Many bosses get even more. Last year, the CEO of Australian-owned mining giant, BHP, received a staggering $425,000 in superannuation payments – that’s more than 120 times greater than what a worker on the minimum wage gets! By contrast if you are a worker unfortunate enough to be either unemployed or one of the increasing number of cash in hand workers or a domestic worker or a casual worker who gets only a few hours in a month of work you get no super whatsoever. Yet it is precisely these people who need higher payments when they are aged because they would have much less savings and assets than people who had been receiving higher superannuation contributions. Moreover, the superannuation system reinforces the discrimination in employment affecting women, Aboriginal people and migrants from African, Middle Eastern and Asian countries. For in addition to the gender pay gap that women endure, the racist discrimination that causes Aboriginal people to have a much higher rate of unemployment than the broader population and the greater propensity of migrants to only be given lower paid jobs, women and migrants are much more likely to be in non-super receiving cash in hand and domestic work jobs than their male and Australian-born counterparts.
There is one rationale for superannuation – that wealth produced today needs to be set aside for when we have an ageing population in the future – that does have validity. But this should be addressed by making the bosses pay into a single, common pension fund out of which aged pensions can be paid equally to all of the elderly. Instead of the system of low pensions supplemented by people’s individual superannuation accounts, there should be much higher pensions for all and no individual superannuation. At least when a group of people are at an age when none of them are working, they should finally get paid equally! The current system, instead, carries through all the terrible inequality when people are of working age through to when people are retired.
So given how unequal people’s superannuation balances are, even if it were true that the banks and other big corporations are owned mainly by superannuation funds this would be grossly unfair. However, the truth is even more inequitable. For it is the very rich who own most of the stocks of the banks and other big companies. Superannuation funds own just a minority. How small a minority? Let us calculate that here using publicly available data. Given how much mythology there is about superannuation funds owning corporations, we will show each stage of the calculation. According to the Association of Superannuation Funds of Australia, i.e. the industry body of the superannuation companies themselves, at the end of December 2019 these funds had a total of 1.9 trillion dollars in assets of which 22.0% was invested in Australian equities (https://www.superannuation.asn.au/resources/superannuation-statistics , accessed 3 April 2020). That comes to a figure of $418 billion for the total holdings in the Australian share market by the superannuation funds. Now the total market capitalisation of the Australian share market at the same time, the end of December, was $2339.71 billion (see https://www.gurufocus.com/global-market-valuation.php?country=AUS and scroll to 20 December 2019 in the graph “Australian Total Market Cap”). That gives the proportion of the shares in the Australian stock market owned by domestic superannuation funds at just 17.9%. That is a lot less than one in five shares.
To see the significance of this truth that local superannuation funds own just a minority of major Australian corporations, let us consider the following scenario. Imagine in the year 2022, after having to prune their profits slightly in 2019 following the exposure of some of their fraudulent practices and the lower profits that they could expect in the coming two years in the wake of the COVID-19 induced recession, the banks seek to raise their profits back to the extreme levels of a few years ago. Through hitting their customers with still higher fees and by charging a high interest rate on the loans they lend out relative to that which they give to depositors the banks raise their profits by, say, an extra $10 billion. Now the bank bosses and their many apologists in parliament would then spin the line that these higher profits are a good thing as they end up in the pockets of “ordinary everyday Australians” through the dividends being accumulated by superannuation funds investing in the banks. However, if all these additional profits end up being distributed as dividends to shareholders and assuming that the percentage of bank shares owned by Australian super funds is about the same as the overall proportion of Australian stocks owned by these funds, just $1.79 billion of these extra share dividends would go to these funds. Even less would make their way into actual superannuation accounts. For the superannuation companies would take a healthy portion of the dividends as commissions and fees – and as we know even as advice fees when they give no advice! And guess what, many of these superannuation companies are themselves directly owned by banks or insurance companies. So part of the bank profits supposedly going into superannuation funds end up going back to the bank and, thus, into the pockets of its big non-superannuation shareholders. The amount actually going to the superannuation accounts of the public may be closer to $1.4 billion. Yet, to get to this scenario of higher bank profits, we have paid out $10 billion in extra fees and higher interest payments. So, excluding the big shareholders of the banks, the public end up much worse off overall, worse off by about $10 billion less the approximately $1.4 billion that we reclaim in higher returns on our super; i.e. we together end up about overall $8.6 billion worse off. And it is working class people who would suffer the pain disproportionately. For a low-paid worker, while paying the higher fees and higher interest rates paid by others, gets very little back in the way of higher returns on their superannuation and many workers none at all.
While we are dealing with this subject, the same analogy would apply to the issue of wages and profits. If the bosses managed to drive down our wages throughout the economy so that they collectively make a $10 billion higher profit than they otherwise would, the apology that business leaders give, that this ends up back in workers’ pockets through increases to their superannuation, is completely false. Wage and salary earners would collectively end up about $8.6 billion worse off. And again the pain would be borne most by lower paid, cash-in-hand and unemployed workers. So, the next time a co-worker, who has been influenced by ruling class propaganda, tries to tell you that higher profits for banks and other corporations is good for us, please, please, please educate them about the reality!
Who are “the Banks”?
So now that it is clear that we are not the indirect owners of the banks through our superannuation funds, who then are the actual owners of these hated corporations? The second lie that apologists for the banks promote, other than the one about superannuation funds, is that the banks are simply owned by “ordinary, everyday Australians” – so called “mum and dad shareholders.” This is actually an even bigger lie than the first one! Why? Firstly, most working class people don’t have the significant savings that would enable them to invest in the stock market. Low paid workers, unemployed workers and casual workers struggle to replace worn out clothes, deal with high electricity costs, pay the rent and often keep up with credit card debts too, let alone save significants amounts of money. Meanwhile, more decently paid workers often spend most of their working life paying off their home mortgage. Far from the majority of the working class being able to invest in shares, the reality is that household debt in Australia is at record levels. A small layer of better paid, more skilled and often older workers do sometimes invest in shares or alternatively in wealth management schemes that in turn invest in shares. However, most of the people holding shares are members of the capitalist, business-owning upper class and the more comfortable layers of the middle class – especially high-paid, upper-middle class professionals. So the “mum and dad shareholders” who supposedly hold most of the banks should more precisely be referred to as the “affluent mum and dad shareholders.” However, even this tells only a small part of the story. For average middle class shareholders – and even the upper middle class ones – while they are large in number only hold a very small portion of bank ownership. To see this, let us have a look at the latest annual report, the one for 2019, for Australia’s largest bank, CBA. According to the bank’s own report, those owning less than a 1,000 shares, who make up nearly three quarters of shareholders, own just one in ten of all shares. Now, given that the share price of the bank at the time that those figures were quoted for (15 July 2019) was $81.06, any one shareholder who was not in this category, i.e. was a shareholder who had more than 1,000 shares in the bank, had more than $81,060 invested there. These big investors who each invested more than $81,060 in the bank own 90% of the bank. Few workers and average middle class people could afford to put that kind of money in the shares of one company. Moreover, even amongst the upper middle class and wealthy capitalists who own most of the bank shares, it is the latter who own the lion’s share. Thus, the people and institutions who own more than 5,000 shares – that is who have the spare cash to invest more than $405,000 in the shares of just one company – own over two-thirds of the CBA. Moreover, the top 20 shareholders alone own nearly half the bank!
So who then are these very rich individuals owning most of Australia’s banks? That is censored information! The wealthy own much of their stakes in the finance sector through other banks acting as nominees for them. In other words, these rich investors get other banks to hold shares on their behalf in a way that hides their own identities. Without exception, in Australia’s big four banks at least the top six shareholders in each bank are these bank nominee holders. In the case of ANZ, all the top eight shareholders, who own 57% of the bank, are these nominee holders. That about typifies the nature of “democracy” within capitalist countries. The ruling class talk a lot about “transparency” but really it is only things that don’t matter too much that are transparent whereas the really important stuff is hidden from the masses. So here we have the most powerful economic institutions in the country, the ones who decide how credit is distributed and whose combined assets of $3.4 trillion (for the big four banks alone) are almost twice the country’s entire annual GDP … and we don’t even really know who owns them!
We do, however, know a few things about the major owners of the Australian banks and insurance companies. One thing that we do know is that they are rich Australians rather than people from overseas. CBA, for instance, is nearly four-fifths Australian-owned. You can bet that among the major owners of the banks and insurance companies, hidden through bank nominee holders, are many of Australia’s richest 200 people – capitalists whose combined wealth last year was found to be a staggering $342 billion! So if you managed to break through the secrecy wall of nominee holdings you would surely find that among the major shareholders of the banks would be people of the ilk of Andrew Forrest, Gina Rinehart, James Packer, Anthony Pratt, Clive Palmer and Kerry Stokes.
Where there is greater transparency is in the holdings of the executives and directors of these finance sector corporations. And they do have big shareholdings. ANZ CEO, Shayne Elliot, held nearly $5 million of shares in that bank. IAG boss, Peter Harmer, owned an even larger stake in his corporation, owning $7.6 million of shares. However, compared to the murky holdings held in secret by nominee companies, even these huge numbers are pretty small. One big bank shareholder who is not hidden behind a nominee company is the couple, Barry and Joy Lambert, who at the time of the CBA’s last annual report owned a whopping $220 million dollar stake. Joy and Barry Lambert are indeed, by the way, a “mum” and a “dad” – and these are precisely the type of “Australian mums and dads shareholders” that own the lion’s share of this country’s banks and other major corporations!
The Big Banks, Big Insurers and the Owners of Smaller Finance Companies
What about the institutions holding major stakes in the big finance corporations – that is, other than the companies acting as nominees for others? One such institutional investor, which is among the top twenty shareholders of each of Australia’s big four banks as well as of the big insurers, Suncorp and QBE, is Netwealth Investments. If we look at the last annual reports of these big finance corporations, we find that at that time, Netwealth held a total stake of $814 million in them. Now Netwealth Investments are a wealth management firm, so they are largely investing the money of other capitalists and upper middle class individuals in the big finance corporations. But Netwealth also takes a big chunk out of the money invested through these shareholdings as commissions and management fees. And who owns Netwealth? More than half of it is owned by the joint managing directors of the firm, Michael Heine and his son Matt. The last published Australian rich list has the family holding a combined wealth of more than $1.5 billion. As we can see, a big part of this wealth comes from grabbing a share of the profits that the banking and insurance corporations leach out of all of us.
So there you have it, the big banks and insurance companies act as a big collective feeding trough for capitalist pigs. Different capitalist exploiters come to put their snouts into the mega-earnings extracted by the big banks and insurers. And when they do so, they get a huge feed. The last CBA annual report, for example, boasted that shareholders gained a total return on their investments of 21% in just one year. That means, for instance, that the Lambert family’s stake in the bank would have given them a $46 million return in just one year … and that from doing no work whatsoever! By contrast a full-time cleaner doing hard and especially crucial and dangerous work at this time of pandemic will get 1,200 times less than this and only if her boss actually pays her the minimum wage.
The Heine family who own Netwealth are one of many owners of smaller finance sector businesses that have made a fortune by engaging in a similar kind of parasitism as the big banks do. At least fifteen of the people on Australia’s list of the richest 200 people extracted much of their money by running such enterprises. You very often see these people being interviewed on ABC current affairs programs related to the economy, which is worth noting for anyone who thinks that the ABC is substantially fairer and more independent of capitalist influence than the tycoon-owned media outlets. Among the finance sector bigwigs are Hamish Douglass, the biggest shareholder of wealth management firm, Magellan Financial; Jeff Chapman, owner of Bennelong Funds Management; Graham Tuckwell, owner of investment management firm, ETF Securities; David Paradice, owner of Paradice Investment Management and Kerr Neilson, the billionaire who owns the main stake in Platinum Asset Management. Supporters of public housing may recognise the latter name. Neilson was one of the ultra-rich people who notoriously bought up former public housing and publicly-owned buildings in Sydney’s inner-city Millers Point after the right-wing NSW government drove out low-income working class tenants and sold off the housing to wealthy individuals and speculators. In 2018, Neilson bought up three historic dwellings in Millers Point, known collectively as the George Talbots Townhouses, for $5 million.
Another filthy rich owner of a finance sector corporation is the boss of buy-now-pay-later company, Flexigroup, Andrew Abercrombie. Abercrombie is also a Liberal Party powerbroker and major donor and is notorious for having stridently supported right-wing extremist, media commentator Andrew Bolt, when Aboriginal people took legal action against Bolt over vile racist slurs. Recently, Abercrombie was in the news after a high-society party that he hosted at his extravagant chalet in the US Aspen ski resort became the source of COVID-19 infection clusters after several of the super-rich guests refused to self-isolate and after returning to Australia spread the disease acquired at the party to Melbourne, Victoria’s Mornington Peninsula and Sydney.
Many of the finance sector bosses in Australia’s rich list run businesses that not only make profits from operations here but also leach profits from people overseas. That is to be expected from major components of a ruling class that is not only capitalist but imperialist. However, as well as making profits from their own operations, these owners of smaller finance sector companies stand alongside mining magnates, media moguls and industrial capitalists in grabbing hefty slices of the loot extracted by the operations of the big banks and big insurers. This is both through their own major shareholdings in the banks – like those of the Lambert family who made their initial wealth through Barry Lambert’s previously owned financial planning company, Count Financial – and through gaining a big slice of the dividends from bank shares received by the funds that they manage. In this sense, the big banking and insurance companies operate like a legal, crime syndicate. Different, loosely connected capitalists come together through these corporations to jointly loot the masses.
Nationalize the Banks! Nationalize the Entire Health System!
The banks extract money from the masses in four different ways. The first two ways are obvious: through charging interest and fees and through exploiting the mental labour of their own workers. Thirdly, by lending to those buying investment properties, banks, from the interest that they receive, gain a share of the rent extracted by greedy landlords from tenants. There is also an important additional way that banks extract their revenue. For banks, insurance companies and investment managers put some of the money under their control into the shares and bonds of other businesses. In the case of banks they also make loans to these other firms. These other business bosses, whether they be those of manufacturing firms, retailers, developers, telecommunication and IT firms, transportation companies, mining corporations or agribusiness operations in turn make a profit through exploiting their own workers. Part of the wealth extracted from these workers is then returned to the banks as interest on loans and on any bonds held by the banks and also returned to finance sector firms more broadly as dividends on the stocks that they hold in these other companies. In this way, the owners of the finance sector companies gain a share of the profits exploited from workers throughout the economy.
This role of the finance sector – and the banks in particular – in the whole economy points to perhaps the biggest problem with the capitalist-owned finance sector. It is not simply that they leach from the people, it is also the way that they allocate credit and financial resources. And like everything else they do, they allocate credit almost solely on the basis of what can bring them the highest returns. That is partly why there is so much speculation in the housing sector and so little affordable housing available, both to buy or to rent. Banks know that they can gain much higher and more secure returns by giving loans to wealthy people buying multiple holiday homes and speculative high-end investment properties than to lend for the construction of cheaper housing for working class people to buy or to rent. Similarly, banks would rather allocate loans and investments to climate change-inducing coal mines and fossil fuel power stations that have little long term future than to focus their credit allocation into renewable power projects even if the former bring only slighter higher and more secure returns to the bank. Meanwhile, the profit-driven mode of the banks mean that medical research in Australia can struggle to get funding unless the chances of an immediate profit-making breakthrough are immediate. Yet medical science cannot but advance except through the trialling of many different ideas, only a tiny proportion of which will end up being used. Similarly in Australia, important technological development and scientific research – especially in basic sciences where the monetary benefits are not immediate – struggle to get bank loans or investment. By contrast, casino operators and advertising firms – who produce no net benefit to society but instead only help one lot of business owners to get richer at the expense of their rivals (and then vice versa!) – don’t seem to have any trouble raising credit.
If the misdirection of credit causes terrible problems in “normal” times, it can be literally fatal at a time of public health emergency and economic implosion like we are experiencing right now. Although, as we go to press, the rate of new infections in Australia appears to be slowing, people continue to die from COVID-19 and, what is more, the threat of much greater virus spread will emerge once social distancing measures are eased. That is why immediately, we need financial resources directed to urgent medical research to help find vaccines and better treatments for COVID-19. We need this research not only for the few projects seemingly most likely to bring financial profits in the future but for a wide range of research. That includes work into developing any non-vaccine treatment methods for the virus. Such research into treatment methods can be hugely life-saving but its results are also likely non-patentable and would bring the researchers – and thus their bank creditors – no real financial rewards. Even more urgently we need loans directed to particular manufacturers that are able to very quickly turn their factories into making personal protective equipment, infra-red thermometers, virus testing kits and ventilators. We also need credit being allocated into areas that will help reduce the level of job losses and at the same time direct jobs into areas that would aid the virus response – for instance by making home delivery of groceries and food more widespread. Yet the only way any of this has even a chance of happening is if control of the organisations that have the power over lending – that is, the banks – are taken out of the hands of their profit-driven owners and brought under state control. This gives the potential to plan the allocation of financial resources to both respond to the virus threat and avert economic collapse. For such planning to be effective, the banks really need to be run together as a single national entity. Modern computing technology and big data make that quite simple whether or not the banks actually operate under one logo. In summary what we need is the nationalisation of the banks and their conversion into a single state-run bank. We need that right now and we need that all the time!
Putting the banks under state control is not the only thing that the working class masses need right now. To respond to the COVID-19 threat we need health resources mobilised in a planned way. The government has announced that it would requisition the resources of private hospitals to deal with the crisis. But this measure is partial and predicated on a massive bailout of private hospital owners. In contrast to the Morrison government’s half-baked hospital plan we need the immediate nationalisation of the entire health system – including not only private hospitals but smaller health facilities like pathology labs. This must remain even after this epidemic is over. Having a big part of the Medicare budget going into the bank accounts of greedy private health operators – for example, Medicare pays 75% of the schedule fee of private patients – as opposed to the actual treatment of patients not only drains the public budget but means that less resources are available for the long overdue tasks of increasing the number of available public hospital beds and public health nurses and reducing the waiting times at public hospitals. Furthermore, for the level of one’s access to health care to depend on the “logic of the market” – in other words how much money one has to fork out for health care – goes against the needs of the working class and all principles of decency. The irrationality of having health facilities being run by for profit operators has been proved during this COVID-19 crisis by the fact that private health care operators like Healthe Care in March stood down, or laid off, hundreds of nurses at a time when the virus was spreading rampantly and nurses were needed more than ever.
The section of Australia’s population most vulnerable to contracting COVID-19 is the well over hundred thousand homeless people. This includes not only those forced to sleep the streets but those “couch surfing” in the homes of friends and relatives. With so many people thrown out of work or stood down on reduced or no pay, homelessness is set to skyrocket. The government’s tentative six-month moratorium on evictions does not provide adequate security to tenants. There are so many loopholes that landlords are already evicting tenants. Moreover, current measures do not stop landlords and estate agents from pressuring tenants to pay rent even when they have little income. Therefore, there must be a six month halt to all rent payments for residential tenants from now. We also need an immediate halt to the sell-off of public housing and for homeless people to be housed in public housing dwellings slated for sale. This will help but will not in itself be enough to house all homeless people. Therefore, we also need a massive increase in public housing. Another crucial reason why we need more public housing is so that low-income women can move away from any abusive relationships and know that they will still have a roof over their heads if they do so. This is an even more urgent matter now than ever as COVID-19 restrictions are leaving women copping domestic abuse in situations where they are more socially isolated and, thus, more vulnerable to violent attack. But new public housing cannot be built fast enough right now in the midst of a pandemic. Therefore, the state must requisition the unoccupied holiday homes and investment properties of people owning more than three homes and convert them immediately into public housing.
We must also demand that the millions of casual workers in this country be immediately granted permanency with all the rights of permanent workers – including being granted guaranteed minimum work hours and sick leave. This is necessary to both protect the rights of casual workers and to ensure that such workers have no compulsion to risk their own well-being and that of others by going to work when ill. Similarly, we must ensure that all workers be granted special paid pandemic leave for self-isolation, quarantining and treatment if they may have COVID-19, or to care for ill family members. The government’s new scheme only allows for unpaid leave which for many low-paid workers will not only cause hardship but may push them to try sticking it out at work when they could be a risk to themselves and others.
At this time of economic crisis, temporary migrant workers and wage-working international students are the hardest hit section of the working class. Many have lost jobs or are casual workers who have suffered big cuts to the number of shifts that they get and, like most casual workers, the government’s much touted scheme to pay bosses of businesses that have lost significant revenue to retain workers will not help them at all. Moreover, unlike all other workers they will not get any Centrelink payments and international students are not even covered by Medicare. This is outrageous! These migrant workers face destitution and many now not only have no money to return to their home countries but cannot even do so due to travel restrictions. That is why it is absolutely urgent that we demand that all workers resident here get the same rights as people who are citizens. Full citizenship rights for everyone who is here! Moreover, in counter-position to the government’s JobKeeper scheme that will still allow hundreds of thousands of workers to lose their jobs while giving a windfall to many bosses, we must fight for jobs for all through preventing companies that have been making a profit over the years from cutting their workforce and by forcing still profitable companies to increase hiring at the expense of their profits.
Such an agenda can only be won through working class-led struggle. Although, at this moment, it may even be from the point of view of the overall interests of the capitalist class partly rational to put the banks under state control in order to avert an economic collapse, the exploiting class will resist any demands for such measures, not least because such a nationalisation would immediately pose the question that if the capitalist owners cannot be trusted to run the banks themselves then why shouldn’t the banks and the rest of the economy be taken completely out of their hands and put into public ownership. As a crucial part of any working-class fightback the workers movement must champion the cause of all other sections of the oppressed. In particular the working class must support Aboriginal people’s struggle against racist state killings of black people in custody, a movement that has been injected with renewed energy in the wake of the mass anti-racist resistance struggles in the U.S.
Mass struggle at this time of pandemic is, of course, difficult. However, let’s not forget that the working class movement has had to struggle in the past – and often in the present too in not only openly capitalist dictatorships but to some degree in the so-called “democracies” as well – in difficult conditions where protests, strikes and leftist political activity have faced repression or even been outright outlawed. This time of virus-related restrictions is, of course, very different in that we ourselves uphold – and actually actively promote – genuine social-distancing measures. However, like in times of intense of police-state repression, it is still a matter of finding ways to overcome major obstacles. We certainly don’t need to come up with all the ways that we can have an impact here. Politically active working class people will themselves come up with suitable methods – the masses are very innovative and that has been proven over decades and decades of struggle.
State-Controlled Banks and COVID-19 Response: A Case Study
If anyone wants to see why we need to put the banks under state control they should look at how the finance sector works in the world’s most populous country – and Australia’s biggest trading partner – the Peoples Republic of China (PRC). In China all the major banks are nationalised. And that was part of why the PRC was so effectively able to respond to the COVID-19 threat. Although China was the place where the virus – whose exact origin remains unknown – first spread in a really big known way, the PRC was able to respond so effectively and quickly that today in China, and even in the city of Wuhan, the former centre of the outbreak, people are again socialising, starting to resume eating out at cafes and restaurants, travelling long distances on public transport, slowly returning to tourist sites, working at factories and other works sites and gradually returning to full school operations. More importantly, the PRC’s response has been so successful that per million residents, far less people have died from the virus in China than have died in wealthier countries that have had much, much more time to prepare for the virus spread. Thus, the number of deaths per resident as of July 18 is already 45% higher in Australia than in China, 133 times higher in the U.S. than in China and in Switzerland, the country famous for its free-wheeling, scantily regulated capitalist banks, the number of deaths per resident is already 71 times higher than in China.
It is important to see why the PRC has been able to respond so effectively to the virus threat. In particular let us see how having a nationalised banking sector made a difference. Crucially, as soon as it become apparent just how contagious and deadly the then newly discovered virus was, China’s banks started supplementing PRC government outlays to firms to boost production of – or in many cases to entirely switch over the output of their operations to produce – items crucial to the epidemic response. Such products included surgical masks, goggles and full protective suits for medical workers, face masks for the public, COVID-19 testing kits, ambulances, disinfectant and ventilators. Within two weeks, PRC banks had already lent out tens of billions of dollars in very low interest rate loans to support the production of these items. By March 13, the amount that the PRC’s state-controlled banks had lent out to contain the impact of the virus had grown to $330 billion!
The production of pandemic relief goods – especially PPE (Personal Protective Equipment) for medical workers – is absolutely vital in the fight against this pandemic. Unfortunately, in the very early days of the outbreak in Wuhan, before it was realised just how contagious the virus was – and even what it was – and how crucial was the need for protective gear, many medical staff in Wuhan became infected with the virus and also spread it to other colleagues, and several of the infected staff later died. In late January, with a large number of ill people pouring into Wuhan hospitals the hospital system in Wuhan was obviously overwhelmed and there was a shortage of protective gear, medicine and equipment. However, before long, with PRC manufacturers, armed with cheap credit doled out at lightning speed by her nationalised banks, rapidly switching over to producing protective gear, all nurses, hospital cleaners and doctors in China were wearing full space-suit-style head-to-toe protective gear. As a result, not a single one of the more than 42,600 health workers who travelled from other parts of China to Hubei Province to aid the virus response became infected, let alone died from the disease. By contrast, the capitalist countries with their private, profit-driven banks have not been able to equip their health workers with PPE effectively. Capitalist banks resist any loans that do not guarantee them a sizable and secure return. Moreover, they would also take considerable time approving any loans made for epidemic response as they ponder and calculate what they can get out of lending large amounts to any particular project for manufacturing epidemic prevention materials. In Australia, any switching over of production to aid the pandemic response by manufacturers is happening way too little and way too late. Therefore, even though authorities in countries like the U.S., Australia and Italy have had the big advantage of knowing for several weeks, if not months, just how infectious the virus was before it spread widely in their own countries, they have not even been able to ensure adequate protective equipment for their health workers. In the U.S., many nurses have had to resort to wearing home-made “protective gear,” like garbage bags, as poor substitutes for personal protective equipment. In Italy, as of April 17, at least 159 medical workers had died from COVID-19. Apart from the personal tragedies here, the effects of health workers becoming infected is devastating for the overall pandemic response. It means that large numbers of medical staff are not able to contribute to the response effort as they languish in quarantine, while other doctors and nurses, before they are identified as having COVID-19, end up passing on the virus to other medical staff and to patients who have come in for non-COVID-19 illnesses. In Australia, the failure to be able to outfit all health workers with the head-to-toe PPE that China’s nurses, doctors and janitors are equipped with has meant that as of July 18 over 400 nurses, doctors and health workers in Victoria alone have been infected. The failure to provide adequate PPE for health and aged care workers is also a key reason for the deadly virus spreads in North-West Tasmanian hospitals and in the Christian-run nursing home in Sydney’s Outer West that took the lives of 30 people between them.
Build toward the Future Confiscation of Banks, Industry, Mines, Communications Infrastructure and Agricultural Land and their Transfer into Public Ownership
It is not only in responding to the direct virus threat that the PRC’s nationalised banks have come into their own. To avert mass layoffs and economic shocks during this pandemic, China’s banks have sacrificed profits by rolling over and extending loans to hard-hit firms and self-employed people and by lending large amounts of money at low interest rates to assist enterprises to re-start production with the curbing of the epidemic spread. In a similar way, the PRC’s nationalised banking sector played a crucial role in allowing China to sail through the late noughties Global Recession as they lent huge amounts of money to finance high-speed rail lines, water conservation projects, environmental projects and the massive construction of low-rent public housing.
Yet it is not just during a crisis that the advantages of the PRC’s state-controlled finance sector is apparent. These Chinese banks have been directed to ensure that their lending practices are in lockstep with the PRC’s “Homes Are For Living In, Not for Speculation” policy. Thus, they have provided much credit to support public housing construction. Moreover, very different to Australia’s profit-obsessed banks, China’s banks charge any family seeking a bank loan for buying a second home a much higher interest rate than they charge those buying their first home, while they don’t lend at all to anyone trying to buy a third home. More broadly, China’s state-controlled banks are directed to lend to projects that may not be very profitable for the banks but which are important for the society and for the people’s economic development. Thus, these banks have specially lent to research and development projects in areas that are important for that country’s future economic progress like nanotechnology, advanced materials, artificial intelligence, advanced electronic hardware, aircraft research etc. Meanwhile, given that the PRC state has identified environmental protection as one of its three principal tasks, alongside poverty alleviation and curbing financial risks, the banks have directed a significant part of their lending to projects aimed at curbing water and air pollution. In particular, by supporting renewable energy projects with credit, they have helped China to become the world leader in renewable energy, with more than three times the installed solar power capacity of any other country and more than twice the wind generation capacity of the next biggest wind power producer. However, the most crucial practice of the PRC’s nationalised banking sector is its support for the country’s poverty alleviation drive. Over the last several years, as part of the PRC’s drive to lift every resident out of extreme poverty by the end of 2020, China’s state banks have lent literally hundreds of billions of dollars to poverty alleviation projects in poorer parts of the country. Many of these projects involve renovation of shantytowns and upgrading of infrastructure in impoverished and remote parts of the country as well as supporting community-based aged care facilities provided for lower income residents. Crucially, the PRC’s state-controlled banks have also provided credit for the development of job-creating industries in poorer, rural parts of the country including food processing operations, agricultural co-operatives, rural tourism and renewable energy projects. Partly as a result of such support for her poverty alleviation drive from her nationalised finance sector, China remains on track to achieve her poverty alleviation target by the end of this year despite the impact of the COVID-19 pandemic.
It is important to be aware that the PRC’s banks are not just state-controlled, they are overwhelmingly also state-owned. Thus, each and every one of China’s big four commercial banks are state-owned. Indeed, even if we include all the medium-sized banks in China, we find that majority state-owned banks so dominate the PRC’s finance sector that there is really only one significant sized bank – China’s tenth largest bank – that can be considered to be truly privately-owned; and even in that one case state-owned companies have recently become its largest shareholders owning around a quarter of the bank. Moreover, in addition to her commercial banks, the PRC has three massive, 100% state-owned policy banks whose lending is completed devoted to projects that are deemed in society’s overall interest. Two of these policy banks in particular, the China Development Bank and the Agricultural Development Bank of China, whose combined assets would make them China’s second largest bank, have been at the forefront of lending to support China’s poverty alleviation drive and more recently for the pandemic response effort.
There is a notable difference between banks being merely state-controlled and being actually state-owned. For one, even if banks are state-controlled, if they remain privately-owned their wealthy owners will act as a constant pressure on the state pushing for the banks to be run largely according to the profit motive as opposed to according to social needs. Secondly, if banks remain only state-controlled their massive profits would still be flowing into the hands of their largely ultra-rich owners rather than into the public budget. Remember, last year, in a “bad” year for them, Australia’s big four banks alone leached $26 billion in profits. To be sure, if they became state-controlled their profits would drop somewhat as their lending and investment becomes partially re-directed away from areas that simply bring the highest return. Nevertheless, even if their profits were halved as a result of being placed under state control, that’s still $13 billion that could go into the public budget if these corporations were only brought into state ownership. How much badly needed public housing could we get with that?! Well, actually, we can calculate that. According to the government’s own figures (see Table 18A.43 in the appendix of Excel spreadsheets under Part G, Section 18 of the Report on Government Services 2020 in the Australian Government Productivity Commission website https://www.pc.gov.au/research/ongoing/report-on-government-services/2020/housing-and-homelessness/housing), the average annual cost of a public house unit, including the capital cost, is $39,714 per dwelling. So if we had even half the current profits extracted by the biggest banks in Australia go into the public coffers we could support an extra 327,340 public housing dwellings which would easily more than double the existing stock of public housing. That could really solve the problem of homelessness and make good strides towards addressing the extreme shortage of low-rent housing in Australia.
That is why what is finally needed is to confiscate all the banks, insurance corporations, superannuation companies, wealth management firms and securities businesses from their ultra-wealthy owners and bring them all into state-ownership. This should be accomplished without giving any compensation to the big shareholders. However, to avoid unnecessarily antagonising the middle class, the stock holdings of the numerous small shareholders who together own a tiny fraction of these corporations can be bought out. Since the superannuation firms will be confiscated too, workers won’t need to worry about losing their super when the banks get taken. They will still get their retirement funds from the now publicly owned providers and with less eaten in fees by billionaire finance sector bosses to boot. However, the retirement payment system will progressively be switched from one based on individual superannuation accounts to one based on a higher and equal pension for all.
Our agitational demand to put the banks under state control, that is to nationalise the banks, that we made in the headline of this article, is not in itself a call to confiscate the banks and put them into public ownership. Russian revolutionary leader Vladimir Lenin made a similar call some six weeks prior to the working class seizure of power in the October 1917 Russian Revolution. As Lenin explained:
It is absurd to control and regulate deliveries of grain, or the production and distribution of goods generally, without controlling and regulating bank operations….
The ownership of the capital wielded by and concentrated in the banks is certified by printed and written certificates called shares, bonds, bills, receipts, etc. Not a single one of these certificates would be invalidated or altered if the banks were nationalised, i.e. if all banks were amalgamated into a single state bank…. whoever owned fifteen million rubles would continue after the nationalisation of the banks to have fifteen million rubles in the form of shares, bonds, bills, commercial certificates and so on.
— V.I. Lenin, The Impending Catastrophe and How to Combat It, September 1917
Lenin’s Bolsheviks made the demand for the nationalisation of the banks in this period as an urgent measure to control economic life at a time when Russia’s masses were being struck down by mass unemployment, disorganised industry and terrible shortages of food and other staple items. However, the revolutionaries also understood that by showing the masses the need to take the control of the banks out of the hands of the capitalists they were thus leading working class people to the conclusion that they ultimately need to also take the ownership of the banks from the capitalists. Indeed, in the period after the October Revolution, the new workers government of Soviet Russia confiscated the banks along with the railways, industries and agricultural land and transferred them into public ownership.
Putting the banks under state control or even confiscating the finance sector, while a vital measure, does not solve all problems – not even the most urgent ones. So while we need state banks to lend to certain manufacturers to aid them to switch their operations to produce vitally needed pandemic relief goods, if the manufacturing bosses still can’t find a way to make a big profit out of those operations, even with low-interest loans, they are very unlikely to change over their factories; and if they do many would do it too slowly or only in a token way to gain positive publicity. So we need to have a perspective of confiscating not only the finance sector but also taking the key industries, the mines that produce the raw materials, transport and distribution means, power, communications and other infrastructure as well as construction out of the hands of the profit-driven capitalists and placing them into the collective hands of the people. In China it is not just their banks that are under state-ownership but all their key sectors. As a result when there was a need for firms to switch over their production to make pandemic relief goods, the relevant state-owned enterprises not only got access to cheap credit to assist them but were basically ordered to make the conversion. That is why you have all sorts of Chinese industries, seemingly unrelated to making protective and medical gear, contributing to China’s pandemic relief effort. For example, state-owned Shanghai Three Gun group, China’s biggest producer of underwear, is now producing more than one million masks per day.
What a society where public ownership plays the backbone role can do was seen most clearly in the way that the PRC built two large brand new hospitals from the ground up in less than two weeks when the number of people getting seriously ill from COVID-19 started surging in late January. The challenge in building these hospitals in Wuhan so quickly was especially steep given that these specialist infectious disease hospitals, unlike other hospitals, needed to have negative pressure wards to ensure that the air leaving wards with the infected patients is ejected safely rather than seeping out to potentially infect hospital workers and others. The first of these hospitals put into service, the 1,000 bed Huoshenshan (“Fire God Mountain”) Hospital was built in just 10 days. The second, the 1,600 bed Leishenshan (“Thunder God Mountain”) Hospital was put into service just days later. And it was thousands of workers organised through the PRC firms under public ownership that played the key role in pulling off these amazing feats. Financing for the project was provided both from the central government and by the 100% state-owned policy bank, the China Development Bank. The design of the hospital was performed by the CITIC General Institute of Architectural Design and Research, a subsidiary of the giant PRC public-owned conglomerate, CITIC. The actual construction of the hospitals was undertaken by the Third Engineering Bureau of state-owned China State Construction Engineering, the largest construction company in the world. Meanwhile, China State Grid organised 260 workers in around the clock shifts to ensure that the power connection was ready in time. Communications within the hospital and a stable 5G internet connection was achieved within 36 hours through a collaborative effort of China’s state-owned communication giants China Mobile, China Telecom, China Unicom and China Tower. Meanwhile, CT scanning equipment and X-rays were provided by Shanghai United Imaging, a high-tech firm jointly held by a range of PRC state-owned firms.
Right now the mass of working class people in Australia does not yet appreciate the need for the confiscation of the banks and industry from the capitalists and their transfer into public ownership. The very most politically advanced workers and leftist activists do understand that this is what is needed. However, ruling class propaganda has been able to tentatively convince the majority of working class people that private ownership of the economy should be “respected.” Nevertheless, right now there is widespread distrust of the banking system at the very same moment that many working class people are very worried about the pandemic, about whether they will have a job and about their ability to pay rent and buy essentials. That is why we today emphasise the call for the nationalisation of the banks as a slogan around which to mobilise united front struggle that will, on the one hand, demand this immediate measure necessary for both the COVID-19 response effort and to protect the masses from unemployment and poverty and that will, on the other hand, in the course of their struggle to win this demand, point working class people towards the ultimate need for the confiscation of the banks and all key sectors and their transferal into public ownership.
We Need a Workers State
If powerful working class struggle were able to force the capitalist government to nationalise the banks, the question then becomes posed: who would be administering this now state-run finance system? Sure, a finance system under state control would face more mass pressure to run its operations according to people’s interests than privately owned banks do. However, would you trust the anti-working class Morrison government or the desperate-to-not-scare-the-capitalists-Albanese led ALP to ensure that a state bank would actually serve the masses rather than the big end of town?
The problem is not simply the government but the bureaucracy. No matter the political stripe of who sits in ministers’ chairs and who wins elections, the fact is that the same layer of high-ranking state officials who have been allowing the finance sector corporations to fleece the public will still be the ones “regulating” them. The “regulator” of the finance sector, ASIC (Australian Securities and Investments Commission) has been so deferential to the finance industry bosses that even the limp Royal Commission criticised it for its “softly, softly approach” to illegal activity by the banks. However, ASIC is not going to fundamentally change. If you see who leads it, even now after getting a slap on the wrist from the Royal Commission, you will know why. ASIC’s leadership remains people with strong ties to the finance sector bosses and other corporate bigwigs. Thus ASIC chair, James Shipton, spent ten years as the managing director of various divisions of the Asia-Pacific office of American banking giant, Goldman Sachs. Of the six other commissioners who lead ASIC, one previously had senior roles in NAB and ANZ (and does anyone expect him to now go hard on them?!!), two had been top bosses of other finance services companies and one had been most recently CEO of the Myer Family Company.
Yet, it is not only their leaders’ previous links to the corporate bosses that tie state institutions like ASIC to the capitalist class. For one, the wealth that these ASIC heads would have acquired when they were high fliers in the banking and broader corporate world – and the ensuing investing of part of this wealth that they have no doubt made into shares and/or share-investing wealth management schemes – would make them very much identify their interests with those of the big end of town and not with working class people. Moreover, since wealthy business owners control the economy and, thus, largely determine who gets hired and at what pay, they can, without even saying a word, entice senior bureaucrats at state institutions with the prospect of future lucrative jobs at their companies should they “respect” their interests; and, in effect, threaten these state officials with being locked out of future employment prospects should these bureaucrats dare step on their toes. One only has to look at who are the directors leading the big finance sector companies and other corporations and one will see how this works. Let’s take ANZ bank as a case study. ANZ’s David Gonski, prior to being appointed chairman in 2014, had been a top official of a number of Australian state bodies. He had been head of the Future Fund which directs government investments into long-term projects. From 2010 to 2011 he also headed a government commission to look into education funding which produced the well-known Gonski Report. In the year prior to becoming ANZ chairman, Gonski had also been appointed to ASIC’s External Advisory Panel and actually continued there until last year. Consider this: say Gonski had, if he hypothetically wanted to, tried to direct Future Fund investments in a way that actually benefited working class people rather than the corporate owners, had in his Gonski Report called to slash public funding for private schools rather than agree to perpetuate it and while on ASIC’s External Advisory Panel pushed for a severe crackdown on the banks, does anyone think that ANZ’s big shareholders would have then appointed him their chairman? And wouldn’t being aware of how his future career prospects in the corporate world are affected by how he acts while heading state institutions colour his conduct when being a high-ranking Australian state bureaucrat? Actually, Gonski is not the only ANZ boss who had been on ASIC’s External Advisory Panel. One of ANZ’s top executives had previously been Vice-Chair of this ASIC body and the current chairman of Suncorp is still on that panel, all of which highlights further the links between ASIC and the finance sector bosses that they supposedly “regulate.” Meanwhile, an ANZ director had previously held the top bureaucrat position, Secretary, in both the Australian Department of Finance and the Australian Department of Health. This director, Jane Halton, is currently also one of the ten council members that lead the Australian Strategic Policy Institute, the state defence think tank notorious for being the most fanatical force promoting Australia’s military build up and its war-mongering hostility to socialistic China. This also highlights the fact that some capitalists hold key positions in the state machinery even while they are still directors of corporations. Thus, one of the NAB’s directors, is also a director of Infrastructure Victoria. Moreover, the chairman of the NDIS, Helen Nugent, is also a director of insurance corporation IAG. So if disabled and ill workers are wondering why they often face intrusive interrogations from the NDIS and sometimes even cop bullying threats to cut them off the Disability Support Pension just know this, the boss of the NDIS is a director of one of the leaching insurance giants who holds over $220,000 worth of shares in that corporation (according to their last annual report) and is paid by them almost a quarter of a million dollars a year for basically attending a meeting every 16 days (on average) and reading some reports. Prior to being appointed NDIS supremo in 2017, Nugent had been up until 2014 a director of Macquarie Group for 15 years. And controversially, the NDIS has awarded Macquarie a contract to build disability housing for them while Nugent actually conducts her leadership of the NDIS in an office rented from Macquarie!
The intertwining between the capitalist bosses and the upper echelons of the bureaucracy extends into state institutions crucial to shaping the ideological direction of society. Thus, much of the leadership of the universities is held by corporate bigwigs. The chancellor of UTS is, for example, none other than the chairman of CBA. Meanwhile the deputy chairman of the broadcaster SBS, George Savvides, is a director of IAG, while another member of the nine-member board that sets SBS’s direction, Peeyush Gupta, is a director of NAB. This is worth knowing in case anyone is tempted to believe that SBS is any more “independent” of the capitalists than the Murdoch media or the commercial TV and radio stations.
Through their economic power and wealth, the capitalists not only ensure that the upper ranks of the state bureaucracy are tied to them by thousands of threads – if they are not actually personally holding these positions themselves – they also subordinate to their interests all the other coercive bodies of the state. This includes the legal system. ASIC have not only been extremely timid when facing the banks because of their ties to the bank bosses. That is, of course, very true. However, part of the reason for ASIC’s prostration is that they are downright intimidated at the prospects of taking on the banks in the courts. Since the courts are biased towards the corporate bigwigs and since the bank bosses have enormous financial resources to hire the best, most expensive barristers and to fund expensive court proceedings and appeals, ASIC fears losing expensive court battles with the banks.
That is why alongside agitating for putting the finance system under state control, we need to fight for people’s supervision of the banks. We cannot trust state institutions tied to the capitalists to regulate even a state-controlled finance system. Therefore, we must demand – and indeed assert – inspection of all commercial bank transactions and big accounts by committees consisting of unionised bank employees’ representatives alongside of representatives of other unions and mass organisations. Such committees can call in financial experts as consultants to help make sense of information but the great advantage of having class-conscious finance sector employees involved in these inspections is that they themselves understand all the terminology of the finance world. These working peoples’ committees can then collate the information and highlight the key results – as well as egregious cases of fraud and manipulation by the very rich – to the public in a form easily understood by the masses. In that way the people can know to which businesses and which sectors credit is being lent and what is the proportion of housing loans going into homes for the debtors to actually live in as opposed to for the sake of housing speculation. Moreover, we will be able to finally discover who the exact owners of the finance sector corporations are. We will also be able to expose which wealthy capitalists have been hiding their true income to avoid tax and by how much. Similarly, the extent to which corporate bosses have been ripping off the public budget when acting as contractors for state projects as well as bribery of state officials by the capitalists can be exposed.
Thus, a state-controlled finance sector where working people’s committees make transparent to the masses the operations of a united state bank will enable the masses to exert enough pressure to have some control over this key pivot of a modern economy. Yet this will only be some control. For as long as the state as a whole – including its key coercive organs of the courts, the police, the prison, army, the regulators and the broader bureaucracy – remains the existing capitalist state that has been created and built up to serve the interests of the wealthy business owners then any attempt to exert workers’ control over the economy will face sabotage and obfuscation through bureaucratic means. As Leon Trotsky, leader of the Fourth International, which at the time (albeit with some mis-steps) continued the fight for the revolutionary internationalist program that guided Lenin’s Bolsheviks, emphasised in The Transitional Program, the program that the Fourth International adopted in 1938 at a time of acute capitalist crisis in the lead up to World War II:
“… the state-ization of the banks will produce these favourable results [large scale industry and transport directed by a public bank to serve the vital interests of the workers and all other toilers] only if the state power itself passes completely from the hands of the exploiters into the hands of the toilers.”
This is the goal that we must advance towards: the sweeping away of the capitalist state and the construction of a new state to serve the interests of the working class and all the other oppressed. The building of such a workers state is needed not only to ensure that any state bank truly operates for the masses but as the pre-condition necessary to enable the confiscation of all the backbone sectors of the economy and their transferral into socialist, that is public, ownership. For while the capitalist class, in a crisis, may, to save their system as a whole, nationalise some sectors and in other cases may acquiesce to some nationalisations as a concession to powerful working class struggle, they will never accept the wholesale dispossession of their ownership of the economy unless they are actually deposed from political power.
China’s Bank’s are Genuinely under Public Ownership because the PRC is a Workers State
It took the revolutionary overthrow from power of the capitalists, the agricultural landlords and the henchmen of Western imperialism in 1949 to enable China’s banks, industry, mines and agricultural land to be transferred into collective ownership by the people. The 1949 Revolution was a heroic struggle in which tens of millions of agricultural labourers, poor tenant farmers and workers directly participated. However, although this great revolution brought the toiling classes to power, because the revolutionary forces were heavily based on hard-to-unite tenant farmers (unlike the 1917 October Revolution that was based on united workers organised through elected workers-led councils) who, while suffering common exploitation by greedy landlords, nevertheless produced for themselves and competed in the markets to sell their produce, the new society had to be held together and administered from above. The ruling middle class bureaucracy, while they still had to administer the society in the interests of the victorious toilers, did so in an imperfect way and in a manner that ensured their own privileges. In the late 1970s, the bureaucratic PRC government, faced with the need to boost production and in the face of intense pressure from the surrounding capitalist world, turned to pro-market reforms. In the following years, a sizeable private sector has developed in China, far in excess of the partial concessions to a private sector that can sometimes be needed in the transition phase between capitalism and socialism. This has brought with it some of the vices of capitalist society such as inequality. Nevertheless, the socialistic public sector still thoroughly dominates the key means of production in China.
Moreover, the fact that the PRC is a socialistic state and the mostly smaller private businesses rely on state-owned giants for raw materials, transportation and energy means that even China’s private sector is sometimes constrained to partially serve broader social goals. If we compare China with capitalist countries, we find that the relationship between private bosses and the state are the very opposite of each other. In Australia, Indonesia, India, Italy or the U.S., the capitalist state and its officials suck up to the rich capitalists who are the real power. In contrast in Red China, the private business owners that do exist suck up to the workers state and are desperate to show their deference to the socialistic order. As a result, during this COVID-19 pandemic even some privately-owned businesses contributed to the relief effort. Indeed, even greedy capitalist billionaire, Jack Ma, with rumours swirling that he was forced to retire last year to try and head off being cracked down upon – as has deservedly happened to so many other high-flying capitalist exploiters in China before him – tried to win favour with authorities by making significant donations to the pandemic response.
However, the existence of a too large private sector remains a problem in China. Although the PRC was able to mobilise its state-dominated economy to very quickly and effectively build hospitals and produce urgently needed items for the pandemic response, the fact is China would have been able to respond even faster had the proportion of the economy under state ownership been even higher. And that would have saved still more lives. Moreover, the existence of a sizeable capitalist class with wealth and influence presents a mortal threat to China’s socialistic system. These capitalists are not happy that they are largely cut out of the most profitable sectors of the Chinese economy like the banks, the oil and gas companies and the other strategic sectors. They resent being pressured to sometimes sacrifice their profits for the social good. These frustrated capitalists are, thus, constantly seeking to expand their tenuous “right” to “freely” exploit labour unrestricted by any constraints. Moreover, many of these capitalists quietly harbour more ambitious aims. They are waiting for the moment, during some sort of social or economic crisis, when they can make a bid for power. They know that they will have the full backing of the capitalist powers around the world in this endeavour.
Indeed, the COVID-19 pandemic has seen the already intense hostility towards China of the U.S., Australian, British, Japanese, German and other imperialist rulers rise to still higher levels. These imperialist ruling classes have engaged in a hysterical campaign of lies to blame socialistic China for the pandemic spread. The capitalist rulers fear that their own working class masses will compare China’s effective and successful response to the virus threat with their own flawed and ineffective response and will thus draw the conclusion that the socialist system is superior and needs to be fought for in their own countries. This is, in fact, the greatest fear of the capitalist rulers. But for the very same reason that the capitalists hate the fact that the world’s most populous country is under socialistic rule – and is actually proving that socialism works – the working classes in the capitalist world should defend socialistic rule in China. For the existence of the PRC workers state – despite all its bureaucratic deformations, its concessions to capitalists and its resulting fragility – makes the struggle for working class rule in Australia and the rest of the capitalist world stronger. That is why the workers movement must oppose the Australian regime’s military build up against China and her socialistic North Korean ally, must stand against the U.S. and Australian Navy’s military’s provocations against China in the South China Sea, must oppose Australian support for anticommunist forces within China (from the far-right Falun Dafa outfit to the pro-colonial, rich kid rioters in Hong Kong) and must resist the Australian regime’s attempts to intimidate and silence pro-PRC voices within Australia – including those of pro-PRC Chinese international students. Right now we especially need to refute all the China-bashing lies being spread over the COVID-19 pandemic. We also need to explain to the masses that for all the incompleteness of China’s transition to socialism, the fact that public ownership plays the backbone role in her economy was what made the PRC so effectively able to respond to the virus threat. In doing so we will at the same time motivate the need to fight here for a system of public ownership based on working class rule, i.e. a socialist system.
However, working class people will not be won to seeing the need for socialist revolution simply through hearing explanations of its necessity. The masses learn mainly through participating in – and drawing lessons from the experience of – struggles for their immediate interests. That is why all those who understand the need for a socialist future must fight to build such campaigns. At the same time, we must work hard to ensure that these struggles for immediate gains are waged in such a manner as they teach the working class to distrust all the parties and factions of the capitalist class, convince the masses to trust only their own power, place no reliance on any institutions of the capitalist state and are based on slogans that advance the working class towards the conclusion that they will in the future need to take both the economy and state power into their own collective hands. Today that means building struggles to fight for the nationalisation of the banks and for the winning of jobs for all through forcing companies to hire (and in many cases re-hire) more workers at the expense of their profits.
The Program of Nationalization of the Banks vs the Green Party’s Agenda
If anyone thinks that urgently needed measures like the nationalisation of the banks can be won merely through the parliamentary process, one has only to look at the agenda of the current parliamentary parties to see why not. Of all the parliamentary parties the Australian Greens have been the most critical of the current banking system. So their program deserves to be given some scrutiny. The Greens call for more regulation of the banks. As a policy principle, they say that, “Publicly-owned financial institutions should form a key component of Australia’s banking sector”, without offering any program about how that would arise. But they fail, even now during this time of public health and economic emergency, to call for the nationalisation of the banks. At most their agenda amounts to a return to the system that we had before the Hawke-Keating reforms of the 1980s and 1990s – and in some ways not even that since the Greens do not call for the reimposition of state control over bank interest rates. Yet, while the banks were slightly more constrained in their operations before the Hawke-Keating reforms, they hardly operated even then in the service of the people. They were still largely driven by the imperative to maximise profits.
A major part of The Greens agenda for turning back the clock is to split up financial planning and superannuation operations from the banks. However, the banks themselves are doing this now in the wake of bad publicity. Indeed, in good part they have already completed this. Last year Westpac sold off its financial advice arm BT Financial and CBA sold off its financial planning arm, Count Financial. The Greens hope that making the banks smaller will reduce abuses by them. However, the new broken up or sold off, but still massive, corporations will still be run for profits. Moreover, the new wealth management corporations will likely be significantly owned by the very same very rich people – yes and through those “bank nominee” fronts – as the banks are. The bank owners quite happily pursued this break up option because by separating out its wealth management arms that had a particularly bad reputation, their banking operations can be shielded from the foul publicity arising from the openly fraudulent practices of the financial planning operations.
Much of the remainder of The Greens practical program for the finance sector like calling for “effective regulatory supervision to enforce prudential regulation” is very similar to what the limp Royal Commission recommended. Overall, The Greens platform will not fundamentally change the way the financial system operates. Banks will still be run largely on the profit motive and will still have freedom to decide who they lend to and at what rates. And many working class people couldn’t care less if the banks own wealth management operations or not because they have little money to put into these funds anyway! So even though The Greens say in the abstract that the “banking and finance industry should serve the broader public interest”, their actual program will not get anyway near this. The reason that The Greens’ agenda cannot come even close to advocating what is really needed to begin to make “banking and finance industry serve the broader public interest,” that is the nationalisation of the banks, is that such an agenda can only be won through working class struggle against the capitalist class. But The Greens cannot truly promote such an agenda as their party includes and appeals to all classes – including capitalists. Owning operations in areas like renewable energy, services, online business, hospitality, tourism and the arts, the full-blown capitalist exploiters that support The Greens feel that the Greens push to favour their sectors over fossil-fuel and energy guzzling sectors would dovetail with their own business interests. Sure, these capitalists accept a more far-sighted view of the threat of climate change than coal mining bosses do. But they are still capitalists who exploit workers! To even speak of nationalisation of any sector would scare these “enlightened capitalist” exploiters as it would make them fear that their own operations could face nationalisation next. Meanwhile, playing a very prominent role in The Greens are well-heeled, upper-middle class professionals. This latter chunk of Greens supporters are, to be sure, somewhat “progressive” minded. But, just like the actual capitalists in The Greens, this does not stop them from having considerable sums put into wealth management products – who in turn invest this money in shares (including bank shares) – or into their own direct shareholdings. So, they would not be too thrilled about any measures that could radically slash the profits of banks.
This same dilemma faces The Greens more broadly – an abstract wish for less inequality and a more “people-oriented society” but no program that would deliver this. Take, for instance, the signature policy of The Greens and its new leader Adam Bandt: “A Green New Deal.” They say that the aims of this “Green New Deal” are “tackling social and economic inequality,” reducing underemployment, increasing wages, having more secure jobs, giving young people more hope of buying a house and ensuring action to beat the climate crisis. OK, but The Greens say this would be achieved through “a government-led plan of investment and action.” However, any reduction of inequality requires struggle against the exploiting class by the working class masses. Government investment in social programs and “clean jobs” requires someone to pay for such measures which requires a struggle against the capitalists to make them pay. The Greens do not even mention this crucial element of class struggle without which talk of building “a caring society” is meaningless. They want to make capitalist society fairer without standing up to capitalist power. And how could they when actual capitalists play a significant role in their own party! Without challenging capitalist power, any government spending and policies will inevitably bend to the demands of this powerful class. That is why when The Greens have actually been in office they have administered society in a way barely different to the other pro-capitalist parties. As part of a coalition with the ALP, the Greens had two ministries in the Tasmanian governments from 2010 to 2014 that cut the jobs of hundreds of nurses, closed public hospital beds, reduced funding for ambulance services, slashed funding for public housing maintenance, cut public sector jobs and reduced public sector pay increases below inflation. In his portfolio as minister for Education and Corrections in these governments, then Tasmanian Greens leader, Nick McKim, oversaw a prison system with substandard conditions for prisoners and tried to close 20 public schools before angry mass opposition forced him to back down. Meanwhile, the Australian Greens counterpart in Austria proved the commitment of this brand of politics to the anti-working class status quo by earlier this year joining in a government coalition with the right-wing, anti-union and anti-immigrant Austrian People’s Party.
Therefore, while we support action to fight for certain particular policies that Bandt has also advocated – like dental into Medicare and free education – we oppose overall The Greens and Bandt’s program of refusing any challenge to the power of the capitalists, while greening capitalism, under a “Green New Deal.” Remember how The Greens’ platform, including the Green New Deal, does not even call for the nationalisation of the banks. Unfortunately, however, much of the far-left in Australia have been cheering The Greens program. The Socialist Alliance have been the most enthusiastic. The Solidarity group are not far behind, only adding that “Adam Bandt’s Green New Deal won’t be won through electoral dead end.” The Communist Party of Australia (CPA) meanwhile ran an editorial in the February 17 issue of their paper, The Guardian, that pushed for overall (albeit qualified) support for Bandt’s Green New Deal, even while very correctly acknowledging that The Greens are a bourgeois party. This despite several contributors to their newspaper insightfully and convincingly attacking the Green New Deal agenda last year. Thus, in the 19 September 2019 issue of the CPA’s newspaper, an article titled “Socialism or perish” rightly argued that “we should be openly and loudly challenging the ideas put forward by many young climate activists and NGO groups who argue for a `Green New Deal’ or other policies that amount to the greening of capitalism.” In effect, in response to such points, the February 17 CPA editorial raises the argument that supporting the Green New Deal would be a united front with The Greens. Here they confuse agreements between communists and one or more reformist tendencies within the workers movement – which may include Laborite union leaders, “democratic socialist” groups and mass social democratic parties based on our unions (of which the ALP is a very right-wing version) – to launch particular united-front actions, or a series of actions, when common demands arise (like supporting a strike for higher wages or a protest march against right-wing welfare cuts) with ongoing support, however qualified, for the program of a bourgeois party. In the former case, building workers’ united front actions, when it is advantageous for the overall struggle to do so, will result in increased class struggle of the working class against the capitalists and an opportunity for communists to explain to the masses the need for more deep-going attacks on the power of the capitalists. However, in the latter case, a “people’s front” alliance between leftist workers parties and a bourgeois party (that is, a party like The Greens that does not even see itself as a party for workers’ particular class interests and which includes – and is thus subordinate to – members of the dominant capitalist class), the effect is to retard class struggle by promoting the notion of salvation through a supposed “progressive” wing of the exploiting class. Now it must be said that those nominally Marxist groups that promote The Greens party’s signature platform do in their own right call for class struggle against the capitalists and for policies that do begin to challenge capitalist influence, like calling for the nationalisation of the banks. However, promoting the platform of a bourgeois party like The Greens and seeking an ongoing alliance with such a party undercuts the class struggle aspects of these left groups’ own agenda, because it ties the workers that they influence to a section of the capitalists and, thus, also promotes the illusion that the masses can win concessions without struggle against the exploiting class.
The Struggles of Today that Can Blaze the Path to a Socialist Future
There is another reason why genuine socialists should not be promoting The Greens party, in however a qualified form. For The Greens are just as much as the Liberal-Nationals, the ALP and the far-right One Nation Party part of the Cold War drive against the world’s biggest socialistic country. Indeed, Greens NSW upper house MP, David Shoebridge, has been just as fanatical in inciting hostility to the PRC workers state as the likes of hard-right Coalition politicians like Peter Dutton, Andrew Hastie, Tim Wilson and Eric Abetz. Although Shoebridge seems to be today rejecting the far-right conspiracy theories about the World Health Organisation and China, he has spent the last several years energetically promoting other far-right conspiracy theories against China, including the ridiculous claims that China is executing members of the extreme right-wing (and rabid Trump-supporting) Falun Dafa group to harvest their organs.
The harm done by The Greens’ support for the anti-communist drive against the PRC does not only consist of the anti-Asian racist violence that it is fuelling and the blows against the Chinese workers state that it is landing. For by attacking the world’s largest socialistic state, The Greens, no matter what else they may say, are assisting the Australian ruling class to trick the masses into believing that there is no real alternative to capitalist “democracy” and that a socialistic state dominated by public ownership would be a nightmare. In other words, The Greens’ opposition to Red China makes them an enemy of the fight for socialism in this country.
That The Greens, a party that many young leftists have hopes in, and the Labour Party, the party that retains the support of most workers, have agendas that support the ruling class drive against the world’s biggest socialistic country, that fail to call for putting the banks under state control and which accept the “right” of capitalists to sack workers whenever it is most profitable to do so proves that we need to build a new workers’ party that will truly serve the interests of the exploited and oppressed. Such a party would refuse to restrict its program to what can be tolerated by the capitalists but would, instead, lay out an agenda based on what the working class and all the downtrodden actually need. Instead of feeding into the nauseating talk, that we are hearing so much of lately, that we are “all in the same boat”, the workers party that we need would be based on a clear understanding that the interests of the working class are counterposed to those of their capitalist exploiters. Thus rejecting “national unity” with the capitalists, such a party would instead fight for the closest possible alliance between the working class in Australia and the working classes of the world. In summary, the workers party that we need must be an authentic communist party like the Bolshevik party that led the Russian Revolution. We in Trotskyist Platform work hard to contribute to the building of such a party. We understand that such a party will be built in the course of laying out a perspective based on militant class struggle in the course of joining in actions that fight for the urgent needs of the masses. Today, at this time of public health emergency, massive unemployment and growing immiseration of the masses that means agitating and mobilising to demand: Put the banks and insurance companies under state control! For the complete and permanent nationalisation of the health system! For jobs for all workers through preventing companies that have been making a profit over the years from cutting their workforce and by forcing still profitable companies to increase hiring at the expense of their profits! Permanency for all casual workers! Grant the rights of citizenship to all migrants, refugees and international students! For a six-month halt to all rent payments for residential tenants! Requisition the unoccupied dwellings of people owning more than three homes and convert this immediately into public housing!
On February 2, a group of delivery drivers took a brave step. They waged the first strike in Australia’s history by gig workers. The workers opposed cuts to their pay rates by the company that they toil for, British-based Hungry Panda. Hungry Panda, while having no operations in China itself, specialises in providing food delivery to expatriate Chinese communities. It is largely owned by Western investment firms like Swedish corporation Kinnevik and Britain’s Felix Capital. Hungry Panda responded to the daring strike by removing two strike leaders, Jun Yang and Xiangqian Li, from the platform dispensing gigs to drivers. But the workers stood firm. They organised with the Transport Workers Union (TWU) and held rallies and stopworks. And six weeks later, they made history again. They achieved the first ever victory by gig economy workers in Australia. The two sacked workers won their jobs back and Hungry Panda reversed the pay cuts, increased pay in certain areas and agreed to provide accident insurance to drivers.
In terms of improvement in conditions, the victory is modest. Like other gig workers, Hungry Panda workers continue to be terribly exploited. Many have to work long hours to make ends meet. For delivery riders, the resulting exhaustion can literally kill them. Last year, five such riders were killed on the job in Australia. However, the victory at Hungry Panda has enormous significance. It shows that even gig workers – who by definition have no job security because their income depends not on set hours but on being granted individual gigs by their bosses – can win gains through collective action. Let’s seize on this trailblazing struggle to organise other gig workers into our unions and fight for a drastic improvement in their pay and conditions. Let’s not only wage struggles against individual business owners but combine that with a fight for laws to improve the conditions of all gig and casual workers. To do this we need to bring the power of stronger sections of the union movement behind the fight for the rights of these most vulnerable workers. Let’s demand:
- The granting of a decent, guaranteed minimum weekly wage to all currently gig and casual workers even if they are granted less hours in any week than that which would enable them to currently receive such wages.
- The immediate granting of permanency to all gig and casual workers – including the granting of all the rights of permanency like sick pay, annual leave and accident insurance.
Migrant Workers from the Chinese Workers State Spearhead Struggle
The backbone of the Hungry Panda struggle was made up of drivers from the Peoples Republic of China (PRC) who had come here as visa workers or students. This includes the two strike leaders who were initially sacked. This is not the first time that migrant workers from the PRC have energised the workers movement in the countries that they have worked in. In November 2012, 180 bus drivers from China waged Singapore’s first strike in 27 years! Their strike not only flouted Singapore’s harsh anti- strike laws but was done in defiance of Singapore’s union leaders who treacherously condemned the strike. Five of the Chinese strike leaders ended up being jailed by the Singapore regime and 29 other strikers were deported. The struggle did, however, win some improvements to the housing conditions of the drivers. In repressive, capitalist Singapore, the daring strike by the Chinese guest workers had the effect of a political earthquake.
So why do migrant workers from China, even when toiling under precarious employment arrangements, often have a great propensity to wage struggles? The reason is that in 1949, China had a massive revolution that brought workers to power. To be sure, the workers state created by that revolution is bureaucratically deformed and is today being white anted from within by a capitalist class that China’s compromising leaders allowed to emerge over the last four decades. However, unlike in Australia, India or the U.S., where it is the tycoons that governments answer to, in China billionaires are often cut down to size. Indeed, China’s tycoons are terrified when rich lists are released because that can result in a popular upsurge against them on social media that can culminate in the PRC state imprisoning them. Just two weeks ago, the PRC forced one of the two main companies controlled by China’s most well-known capitalist, Jack Ma, to restructure in a way that will cripple its profitability. Indeed, ever since the PRC squashed a lucrative share sale of that company last November, the normally high-profile Ma, fearing arrest, has gone into seclusion. Could you imagine that happening to Gina Rinehart or one of the Murdoch dynasty here!
As a result of these anti-capitalist crackdowns in China, while wages are lower, in keeping with the country still pulling herself out of her pre-revolution poverty, working conditions are better than in Australia. This is especially true in the PRC’s socialistic public sector that dominates the key parts of her economy. As a huge sprawling country, there are some private companies, especially those owned by Western or Taiwanese capitalists, which can quietly get away with abusing workers rights. However, ever since the PRC instituted a pro-worker law in 2008, workers rights have considerably improved. Article 4 of that law gives unions effective veto power over any modification to wages or conditions at a workplace. More significantly, when Chinese workers strike, PRC authorities often – though not always – support the workers not only in their court rulings but by tacitly allowing workers to picket and, sometimes, even take the bosses hostage with impunity. The result of all this is that Chinese workers have a sense of entitlement – a sense that comes from being a member of China’s ruling class. So, when they go as temporary workers abroad, they bring that workers don’t have to put up with crap spirit with them. The Australian workers movement, which has been on the back foot for decades, sure does need this kind of “communist Chinese interference”! Moreover, as the contribution by Chinese workers at Hungry Panda has shown, the existence of a workers state in China is good for the workers movement here. On the other hand, if the capitalist powers succeed in their campaign to destroy the PRC workers state and, thus, turn China into a massive sweatshop for capitalist exploitation this would drive down the conditions of workers the world over. Thus, we must stand with socialistic China against the capitalist powers’ Cold War drive. Rebuff the lying, anti-communist propaganda campaign over Xinjiang, Hong Kong and the pandemic! Oppose the U.S. and Australian capitalist regimes’ military build up against socialistic China!
Demand the Rights of Citizenship for All Workers Residing Here
As well as being from China, Hungry Panda workers are often also temporary residents from South Asian countries. Their powerful struggle has blown to pieces the nationalist notion that visa workers are simply people who “take Australian jobs” rather than a valued part of a potentially fighting workers movement. Nevertheless, that guest workers and international students can be deported so easily and have no access to social security is a huge deterrent to these workers engaging in struggle. Even as pro- ALP union leaders and their ALP parliamentary mates have been quick to use the Hungry Panda workers victory to strengthen their own reputations with workers, much of the pro-ALP union leadership isolates visa workers still further by calling to “keep out guest workers”. Fortunately, a small number of unions are now rejecting this divisive approach that weakens the ability of workers to unite and fight. We say that the workers movement must fight for the granting of all the rights of citizenship to every worker, refugee and student who is here. Let’s unleash the full fighting potential of migrant workers seen so powerfully in the Hungry Panda struggle.
There is something else holding back struggle by migrant workers and that is the incessant racism that they are copping. Such attacks intimidate these workers and make them feel that they don’t belong here and, thus, would be demonised further should they rock the boat. The entire workers movement must come to their defence. We cannot stop individual attacks as they take place at random and are committed by a large number of disparate racists. However, when organised white supremacist groups hold a public provocation, the workers movement should unite with Aboriginal people, all people of colour and all anti-racists to sweep the racist scum off our streets. By dealing severe blows to the most organised racists we can scare the more numerous, garden-variety rednecks into pulling their heads in. Right now, people of Asian background are especially being hit with racist attacks which are getting worse by the day. To stop this we need to oppose the main factor currently encouraging anti-Asian hate attacks – the Cold War drive against socialistic China. Yet, the current ALP leadership of the workers movement is at one with the right-wing Morrison government in its Cold War – and increasing push towards hot war – drive against socialistic China. The ALP does so for the same reason that they promote divisive slogans against guest workers. The ALP accepts the overall domination of the capitalist class and is only seeking to improve workers position within that framework. That necessarily means that instead of fighting to strongly challenge capitalist interests they are left with trying to improve the position of local workers at the expense of their migrant and international worker counterparts. We need to decisively turn the workers movement away from this divisive and failed “strategy.” We need a workers movement that understands that we cannot defend workers interests if we try to gain the acceptance of the big end of town – a movement that understands that workers interests only come by uniting workers of all races and nationalities in militant struggle against their common enemy, the capitalist exploiters.
Let’s Use the Inspirational Struggle by Hungry Panda Workers to Build a Working Class Fightback
The struggle by Hungry Panda workers is not only crucial for gig and casual workers. By showing that even the most vulnerable workers can win through collective action, they provide inspiration to all sections of the union movement. And right now our workers movement sure is in need of inspiration! The bosses have used the pandemic to attack working conditions, retrench workers and make those still working toil yet harder for the same pay. Let’s unleash powerful industrial action to smash attacks on workers’ wages and conditions! Fight for a minimum weekly wage and permanency for all currently gig and casual workers! Win secure jobs for all by forcing capitalists to increase hiring at the expense of their profits! Build the unity we need to wage a class struggle fightback – smash racist attacks and demand the rights of citizenship for everyone who is here! Defend the PRC workers state that gave the Hungry Panda guest workers their “sense of entitlement” that enabled Australia’s first ever successful industrial struggle by gig workers!
President Joe Biden likes to say, “I’m a union guy.” Unfortunately, as Vice President from 2009 to 2017, his boss, Barack Obama wouldn’t let him be a “union guy.” Even with large Democratic majorities in Congress and control of the White House, worker needs went unmet.
Setting records for raising Wall Street campaign cash, Obama reneged on his 2008 promise to raise the federal minimum wage from $7.25 to $9.50 per hour by 2011. He reneged on a promise to the AFL-CIO to push for “card check” to facilitate workers wanting to form a union. He did nothing to preserve traditional earned worker pensions provided by corporations while bailing out Wall Street crooks whom he refused to prosecute.
Obama stubbornly blocked an eager Biden from going to speak at a massive workers’ rally in Madison, Wisconsin at the critical time when Democrats were challenging corporatist Governor Scott Walker’s anti-union “budget repair bill.”
One would think after eight years of biding his time, a liberated Joe Biden would be the most pro-union labor president since Franklin Delano Roosevelt. He probably is by default, due to the cowardliness of his predecessors who would have lost some of their own elections without union support.
The question now is: Given the entrenched deprivations of workers and abandonment of labor to serf-labor countries abroad, is President Biden pro-union-labor enough, apart from the temporary Covid-19 relief? The answer has to be a qualified, NO.
He has dropped into limbo the long-overdue $15 federal minimum wage from his legislative priorities. He did give strong verbal support to the Amazon workers union-organizing drive at a warehouse in Bessemer, Alabama. However, when the workers lost, Biden did not assail the extreme union busting tactics by Amazon that exploited weak labor protection laws. He has finally nominated the new head of OSHA – the under-funded, Trump-wrecked job safety agency that is in shambles.
What he has done is come out strongly for the Congressional Democrat’s latest version of labor law reform – the Protecting the Right to Organize Act (PRO Act) that passed the House on March 9, 2021, with a 225-206 vote.
The problem with the PRO Act, like its legislative predecessors over the past 60 years, is its faint-hearted attempt to chip away at the unmentioned, gigantic, anti-union TAFT-HARTLEY ACT OF 1947 – a devastating anti-organizing and union representation law.
The Taft-Hartley law was so extreme that its principal author, Senator Robert Taft (R-OH), offered to amend some of its sharpest claws in the late 1940s. His offer was rejected by outraged unions who wanted a more significant repeal. That, astonishingly, was the last major bellow by the large unions and the AFL-CIO against this stifling chokehold over the union movement. Union membership in the corporate sector is at 6.3 percent. Overall union membership regularly hits new lows.
Even mentioning the repeal of Taft-Hartley by unions and Democratic candidates has become taboo. When campaigning for president in Detroit at a labor hall in 2004, a retired UAW worker came up to me with tears in his eyes. He said, “I never thought I would hear getting rid of Taft-Hartley from a presidential candidate.”
On the 50th and 60th anniversaries of Taft-Hartley’s passage by a Republican Congress – that is 1997 and 2007 – I strenuously urged the AFL-CIO and the largest unions to hold public demonstrations of protest. (Does anybody think big business would have allowed such handcuffs without battling year after year for repeal?)
The union leaders wouldn’t inform the public of this pernicious law with a national event against this tragic curtailing of worker’s freedoms to band together and bargain together in major workplaces such as Amazon, Walmart, and McDonald’s. No other western country allows such draconian anti-labor restrictions.
Unions are waiting on the Democratic Party to lead while the Democrats are waiting upon big business. Biden should make ending the anti-worker, anti-union, and pro-employer union-busting, Taft-Hartley Act the battle cry for the Republic. The PRO Act doesn’t come close to this objective.
Taft-Hartley is a wide-ranging, intricate paradise for union-busting law firms, corporatist legislators, and atavistic judges. It authorized states to enact so-called “right to work” laws or more properly named “right to shirk” laws, allowing workers to keep benefits of union contracts but not pay union dues. This provision vastly decreases union membership and increases employer leverage to resist union organizing.
Taft-Hartley gives employers all kinds of ways to block union certification elections, harass workers with demands for obstructionist hearings on what is an “appropriate bargaining unit,” permits aggressive anti-union organizing, and outlaws the “closed shop” for union solidarity.
One of the most damaging provisions defines “employees” so as to exclude supervisors and independent contractors. This greatly diminished the pool of workers eligible to be unionized. For example, years ago AT&T widely expanded the number of “supervisors” to both deplete the union membership numbers and use their “supervisors” as management control tools.
Taft-Hartley has other pro-management provisions, including controls over pensions, disclosure of information, and workplace time for union purposes.
Once Taft-Hartley was on the books, its restrictions were strengthened by the courts and the National Labor Relations Board (whose last pro-corporate general counsel was just fired by Biden). With the expansion of the “gig economy,” by Uber, Lyft, Airbnb, and other companies whose business model is built on having no employees, the challenge for American workers is nothing less than displacing anti-labor dictates with a comprehensive worker’s human rights law.
The PRO Act is decidedly not anywhere near Biden’s recent recognition that “Nearly 60 million Americans would join a union if they get a chance …. They know that without unions, they can run the table on workers – union and non-union alike” (Statement by President Joe Biden on the House Taking Up the PRO Act, March 9, 2021).The post If Biden is a “union guy” – Go After the Taft-Hartley Monster! first appeared on Dissident Voice.
The San Francisco Giants Opening Day was Friday, April 9. The Giants had been doing a full court press (sorry to mix in basketball metaphors) for days on end about how safe the stadium would be for the fans’ first game back to the stadium since the COVID-19 pandemic began.
But, on Wednesday evening, the Giants’ food service subcontractor Bon Appetit emailed food service concession workers a directive to “Please be sure that you complete this 2021 Release of Liability before arriving at Oracle Park.”
Some choice words from this release:
…I agree that, on behalf of myself and my personal representatives, heirs, spouse, guardians, executors, administrators, successors, assigns and next of kin, I and they hereby waive, release, discharge, hold harmless and agree not to sue the released parties noted below with respect to any claim, liability or demand of whatever kind or nature, either in law or in equity (including, without limitation, for personal injuries or wrongful death) that may arise in connection with, or relate in any way to, exposure to or contraction of COVID-19 following my use of a credential, during the providing of my services, or during my participation in any related activities arranged, promoted and/or sponsored by the released parties, including, without limitation, those claims that arise as a result of: (I) the negligence of any of the released parties, and/or (II) the inherent risks associated with visiting any venue during the COVID-19 pandemic.
That was written in ALL CAPS, just in case somebody might not have gotten the point that food concession workers — and all their friends, families and acquaintances – would be on their own if they came down with COVID-19 from working at the ballpark.
And who are the “released parties?”
- The office of the Commissioner of Baseball.
- Each of the Major League Baseball (MLB) Clubs.
- Every director, officer, owner, stockholder, trustee, partner, employee, agent, independent contractor and consultant of the above.
- The owners and operators of the venues in which games in 2021 will be played, and all of their sponsors, contractors, vendors, operators, agencies and advertisers.
- Licensees and retail, concession, broadcast and media partners of MLB parties.
- Press and other media.
- Vendors that may provide testing or medical services.
- Entities and individuals providing accommodation and transportation to or from baseball venues.
- Other entities and individuals who enter baseball venues.
- The parent, subsidiary, affiliated and related companies and officers, directors, employees, agents, licensees, contractors, sub-contractors, insurers, representatives, successors, assigns of each of the foregoing entities and persons.
About the only entity not covered by this release would be little green men landing on the field in a space ship in the middle of a game.
And by the way, the signers of this release were expected to acknowledge that there may be issues that they do “not know or suspect to exist in his or her favor at the time of executing the release,” but that’s just the way it goes.
Oh, sure, no problem, right?
That’s not the way the leadership of UNITE HERE Local 2, the union which represents most ballpark food concession workers, saw it. On Thursday, the day after workers got this release and the day before Opening Day, Mike Casey, the former President of Local 2 and current President of the San Francisco Labor Council, made some calls to Giants and Bon Appetit biggies, letting them know that their demand for this release of liability was about to become a very public issue.
Ballpark workers, after all, are working under a contract with Bon Appetit that is supposed to protect them from the “negligence” of their bosses. All these workers were being asked to do was to throw their contract in the trash can when it came to anything to do with protecting them from disease and death.
Can you imagine how it would go over if the Giants demanded that fans attending the game had to sign such a release?
Fortunately, Casey was able to convince the powers-that-be that this was a fight they did not want, and that the wise course of action was to dump the release, stop asking workers to sign it, and to trash any releases that had already been signed.
Case closed? Not really. This attempt to try to slip a fast one over on us only demonstrates the utter disrespect that Major League Baseball, the Giants and our bosses too often show to their workers.
It also reminds us that the Giants tried to fire us during the pandemic, only to be beaten back and forced to apologize. It also calls to mind how sports team owners made billions during the pandemic, while doing next to diddly-squat for their laid off workers.
Clearly there are struggles ahead, especially as we try to negotiate a new ballpark contract in the coming months.
Not to mention the upcoming reopening of the Warrior’s Chase Center, where Bon Appetit also runs the food service concessions, and where workers have yet to achieve a first contract.
• First published by 48 Hills.The post Safe Ballpark? SF Giants Demanded “Release of Liability” for COVID Infection from Food Service Workers first appeared on Dissident Voice.
Many of you in the middle class are opposed to socialism. You still think there is some chance for you under capitalism and you fear that the socialists will take what little you have and divide it among the shiftless and thriftless. You need not have the slightest fear. The socialist has no use for your small capital; it would do (them) not the least good. (They are) after the earth, the trusts, and the machinery of production. Besides, soon you will have nothing to divide. When the big capitalists get through with you, you will be ready for us. You may not be ready yet, but you are ripening very rapidly. When you have been stripped of what you have, when you have become proletarians, when you have become expropriated, you will be ready to join us in expropriating the expropriators.
— Speech by Eugene Debs over 100 years ago in Chicago about the middle-class fear of socialism
Almost five years ago I wrote an article in Counterpunch: “Lost at Sea: Left Liberals Have No Party.” In that article I challenged the blithe interchangeability of the words “liberal” and “democrat”. I tracked eight historical changes of liberalism from left-liberal, to centrist-liberal to right-center liberals (neoliberals). I also argued that the words liberal and democracy are used interchangeably by liberals, even though it wasn’t until the 20th century that liberals were clearly for democracy (translated as universal suffrage for white males).
The problem with my article as I see it today is that I lumped upper middle-class left liberals with middle-class liberals. Two years later I wrote another article called “The Greater of Two Evils: Why the Democratic Party is worse than the Republican Party for 85% of the U.S. Population.” In that article, I outlined how, since the 2008 crash, the social classes whose wealth grew were the ruling class, the upper-class and the upper-middle-class, constituting about 15% of all social classes. Everyone else was doing worse, including the middle-class.
In my first article I slurred the differences between the upper-middle-class and the middle-class, advocating for both classes to get out of the Democratic Party. I have since come to see (as I will get into later) that the upper-middle-class has done very well under the umbrella of the Democrats and it is not in their material interests to leave. This is no longer true of the middle-class. Historically, the material interests of the middle-class and the upper-middle-class has more in common with each other than the working-class. In other words, the difference between news anchors, lawyers, senior managers on the one hand and high school teachers, librarians and supervisors on the other hand are more differences of degree than kind. After all, they all did mental work, as opposed to the physical work of the working-class. However, in the last 50 years middle-class life has gotten far worse than the life of the upper middle-class. It has gotten bad enough to be able to say it is closer to the working-class. Whether they realize it or not, for middle-class left liberals, the Democratic Party has left the building 40 years ago.
My claim in this article is that:
- Middle-class FDR liberals need to leave the democrats and be part of building a new party
- Middle-class left liberals need to form alliances with the working-class and the poor, not the upper middle-class
- The new party should advocate for socialism
What follows is why this should be so.
Difference Between FDR Liberals and Neoliberals
Left liberal values
Left liberals are broadly for the following. They are pro-science as well as for investing in scientific research and development as well as investing in infrastructure. They are for the separation of church and state as well as for the use of reason in problem-solving, such as raising children through what is called “authoritative parenting”. They support the matriarchal state: universal health care, unemployment, pensions, food stamps and a minimum wage automatically raised to keep up with inflation. They expect the state to intervene in the economy to soften the hard edges of capitalism, following a Keynesian economic policy. They are committed to gradual change and a lessening of race and gender stratification. Left liberals support an expansion of unions. This left liberalism has been present in the United States for roughly 40 years, from the mid-1930s to the mid-1970s. Since then, Democratic Party has slid further and further right to the point that their platform today is a center-right neoliberal party which embodies none of these values. The problem is the collective denial left liberals have in ignoring this fact.
Right-wing neoliberal values
Neoliberals are directly opposed to the matriarchal state. They support the economic policies of Milton Friedman and Friedrich Von Hayek with minimum state involvement in the economy. Neoliberals have withdrawn funding from long-term science programs. They have presided over the rise of New Age thinking initiated by Marilyn Ferguson’s book The Aquarian Conspiracy. Neoliberals have become extreme relativists championing the rise of identity politics which began in the early 1970s. Neoliberals have lost hope and have failed to bring the principles of the Enlightenment forward. They have abandoned investment in profits made on manufacturing and instead make their profits on the defense industry, arming the entire world. Under their rein most of the remaining profit is invested in finance capital.
Neoliberals have presided over the destruction of unions over last fifty years. They have stood by and watched the full-time, well paid secure working-class jobs disappear. Work hours under neoliberalism have gone from 40 hours per week to at least 50 hours per week for those lucky enough to be employed full-time. In general, the standard of living has declined in the US so that the next generation can expect to make less than their parents. It’s no accident that credit cards became available to the working-class in the early 1970s, so workers didn’t have to directly face the fact that their standard of living had declined. The civil rights movement spoke to what minorities had in common with organized labor, which was low-cost housing and fair wages. Today we have individualist identity politics where being recognized for your identity along with using politically correct language is all that is asked for. In the 1960s, community college was free. In the last 50 years the cost of college education is so high that student debt appears to be debt for life.
Neoliberals have supported the explosion of the prison-industrial complex which has expanded many times over since the 60s despite the rate of crime going down. The police departments have been equipped with military weapons that make the equipment of police prior to the 1970s pale in comparison. They have presided over the growth of the insurance industry and the pharmaceutical companies which now have control over our physical and mental health. The official diagnostic manual was 50 pages in 1950. Today the same manual is well over 1000 pages. Today upper-middle-class parents are no longer authoritative but instead are practicing a form of “permissive parenting”, which easily results in spoiled, narcissistic children, with helicopter parents fretting endlessly over their little darling’s self-esteem. Please see Table A for a comparison.
Differences Between Middle Class and Upper Middle Class
Not everyone is middle-class
In the United States, most people think of themselves as middle-class. Last time I checked 80% of the working-class mistakenly thought they were middle-class. Why? Because in Yankeedom, it’s an embarrassment to be working-class. So too, upper-middle-class people, nervous about being seen as well-to-do, play down their wealth. Nevertheless, there are real parameters around what it means to be middle-class, as I’ll get to. But first the social class composition.
Social class composition
Based on the work of William Domhoff, in his books Who Rules America and The Powers That Be, the ruling-class and the upper-class together compose about 5% of the population. They live off stocks and bonds and don’t have to work. Their investments are principally in oil, mining, the military and banking. They have been characterized as “old money” and are mostly Republicans.
The upper-middle-class is about 10% of the population. They make most of their money off scientific innovations like computers, internet and electronics. They are called “new money” and are mostly Democrats. Upper-middle-class people are also doctors, lawyers, architects, senior managers, scientists and engineers, as well as media professionals such as news commentators, magazine and newspaper editors, college administrators and religious authorities.
The middle-class consists of about 25% of the population. Occupational examples include high school and grammar school teachers, registered nurses, librarians, corporate middle managers, self-employed artisans and tiny little mom-and-pop operations. The middle-class is at the bottom rung of the Democratic Party not well-represented at all.
The working-class is about 40% of the population and consists of skilled, semi-skilled and unskilled workers. The skilled working-class include carpenters, welders and electricians, wait-staff and store clerks who are likely to vote Democrat. Their interests are not represented by the Democratic Party either. The semi-skilled are bus drivers or train operators and along with unskilled are less likely to vote. The last 10% consist of what Marx called the “lumpenproletariat” who live by their wits as prostitutes, hustlers, gamblers or those on welfare. These folks are not likely to vote either.
Income is not the most important determinant of social class: the nine dimensions of social class
When most Yankees try to understand social class, the first thing they think of is how much income a person has. But this is only one of the nine dimensions of social class, and not the most important one. Most of these dimensions are covered in the work of Marxist Erik Olin Wright as well as some of the followers of Max Weber. The first dimension of social class is technical, and this consists of three parts: a) the proportion of mental and physical work the job requires; b) the amount of independence or interdependence the kind of work involves; and c) the proportion of the work that is mechanical rote work versus creativity. So typically, a good upper-middle-class job will involve mental work, be independent from others and involve creativity. At the other end of the spectrum is unskilled working-class labor which predominantly involves physical labor and working with other people, while the work itself is repetitive. Other social classes have various combinations in between.
The second dimension of social class is political and economic authority relations. This consists of two sub-categories. The first is the degree of power the person has over resources, tools, goods and services. A capitalist has control over all these things. Workers usually have control over none of them, except that skilled workers might own their own tools. The second sub-category has to do with the proportion of order-giving and order-taking involved. The owner of a company gives orders and takes no orders. His workers take orders and don’t give orders. Middle-class people in corporations may give orders to workers but must take orders from senior management. This category is simply – who gets to boss around who and under what conditions.
The third dimension of social class is mobility. How easy is it to move up or down the class hierarchy both within one’s lifetime or across generations? The fourth dimension of social class is resources. Most people think of resources in terms of income. But wealth also includes assets such as inheritance, real estate, stocks, bonds and property. Sometimes upper-class people may work only part time, but it would be deceptive to make sense of their class position by some part-time job when they have an inheritance.
The fifth dimension of social class is education. This consists of the number of years of school completed as well as the quality of the school attended. The sixth dimension of social class is status. This is the degree of prestige in which one’s occupation is held by others. One reason why income is unstable as an indicator of social class is that some workers can make a good deal of money, such as unionized garbage collectors, but have low status. Conversely, an adjunct college instructor can have high status among the Yankee population but make significantly less money than a garbage collector.
The seventh dimension of social class is lifestyle and consumption patterns. This has four sub-categories. The first is health – birth and death rates. As many of you know, working-class people die on average seven years younger than people in the middle and upper-middle-classes. The second sub-category is how people dress, their speech patterns, body mannerisms and manners. The third sub-category is their recreational habits – whether they ski, play baseball or go bowling. The last sub-category is their religious beliefs. Religions are class divided. In the case of the protestants, there are the Unitarians, Episcopalians and Presbyterians near the top and Baptists and fundamentalists at the bottom.
The eighth dimensions of social class is the degree of awareness people have of their social class. Generally, the upper class and the ruling class are extremely class conscious and are very fussy about who is allowed into their circles. The upper-middle-class and the middle-class tend to be less class conscious. In countries other than the United States, the working-class is very class conscious. But here in Yankeedom, workers see themselves as “temporarily indisposed millionaires”. The last social dimension of class is the ability to take collective action. Capitalists at the end of World War II and soon thereafter organized a big campaign to win back the allegiance of workers. The ruling class has exclusive clubs in which they organize class strategy. The World Economic Forum and the Bilderberg group are examples. At the other end of the spectrum, when workers join unions or strike, they are showing class consciousness. No social class fits neatly into each dimension. There are what Wright calls “contradictory class locations” where a person is caught between two classes either between generations or within their lifetime.
Why does class count?
Why have I gone over the dimensions of social class in such detail? One reason is to show that upper middle-class people and middle-class people are not interchangeable. They vary in the technical division of labor, authority relations, class mobility, resources, education, status, lifestyle, degree of class consciousness and their willingness to take collective action. They also differ in their attitudes towards the meaning of work, as well as in their attitudes towards time and eating habits. If we want to suggest that the middle-class should break its alliance with the upper middle-class and get out of the Democratic Party, we have to expand and deepen their differences as I am starting to demonstrate.
Summary: two reasons why middle-class left liberal should get out the Democratic Party
Summarizing, the first thing we needed to do is to establish that the Democratic Party is a center-right neoliberal party which has next to nothing to do with being left-liberal. This is reason A to get out of the Democratic Party. The second reason is that the Democratic Party serves the interests of the upper-middle-class not the middle-class. The most obvious indicator of why the middle-class should no longer align themselves with the upper-middle-class is to understand what has happened since the crash of 2008. Both Thomas Piketty and Richard Wolff argue that the “economic recovery” was very class specific. The rulers, the upper class and the upper middle-class have done considerably better in that “recovery”. All other social classes, including the middle-class, have done worse. The middle-class, economically and in other dimensions, is far closer to the working-class than it has ever been. Reason B to get out of the Democratic Party.
But can these two classes really get along? There is a built-in tension and discomfort about doing mental work and physical work; there are differences in the degree of status in the two classes’ occupations. If we want to move middle-class people and working-class people closer together, we have to understand their commonalities and where the tension points are in their differences.
Similarities and Differences Between Middle Class and Working Class People
The biggest similarity between the two classes is a decline in the standard of living. This includes income, work stability, increase in hours worked and lack of benefits. Another commonality is sports. Working-class people and middle-class people can unite around being fans of baseball, football and basketball professional teams. In terms of music, rock or country rock might bring these two classes together. Another commonality is that both classes have what sociologists have defined as achieved status. Unlike the upper classes, they usually do not come into life with an inheritance. Lastly, both classes see hard work as a virtue.
One of the major differences between these two classes is that middle-class people make their living primarily by doing mental and/or supervisory work. Working-class people make their living primarily with their hands and their bodies. A second major obstacle to overcome is that middle-class jobs usually have higher status. The third difference is that middle-class people often give orders to working-class people, but the reverse is not the case. This can lead to jealousy and resentment among working-class people. Middle-class people are very individualistic and not likely to organize as a class. There is likely to be tension between the classes when the working-class agitates to start a union or take strike action. There are also differences between the classes around the meaning of work. For working-class people, the meaning of work is less important than the money and material benefits. Some middle-class people might trade off a higher paying job for work that seems socially redeeming to them.
In terms of resources middle-class people today are likely to own their own home and have stocks and bonds. Working-class people’s assets are usually a car and possibly a home. Mostly they do not own stocks. Whatever savings account they have, that is it. There are also differences in their health conditions. Working-class people are likely to have eating, drinking and smoking problems and middle-class people are healthier. Working-class people are more likely to go to gambling casinos and play the lottery. Middle-class people see that as a waste of time and money.
Another tension point is education. Usually, middle-class people will have a bachelor’s or master’s degree, while working-class people will have no degree or an associate degree at best. Middle-class people will dress, speak and have manners that will be different from the working-class, and this will produce class tensions. Middle-class and working-class people will attend different religious denominations. Working-class religious services invite submission, confessions of being a sinner as well as altered states of consciousness like speaking in tongues, singing and dancing in the church aisles. In middle-class religions, there is less pressure to make you feel like you are a sinner. At the same time, sermons are designed to appeal to what is reasonable rather than to force you to have a revelatory experience which alters one’s state of consciousness.
Middle Class People Meet Socialists
Surely you are kidding
Let’s suppose middle-class left liberals have enough doubts about the Democratic Party because they are no longer New Deal liberals, and they’re starting to see that the party no longer looks out for middle-class interests. Let’s assume that economic, political and ecological disasters will continue to plague capitalism, and somehow a third party – a mass party – has emerged founded on socialism and is getting up a head of steam. This party has some working-class support as well as some union support. What would it take for middle-class left liberals to join?
Fears Middle-class Liberals Have About Socialists
Dictatorship and one-party rule
In its propaganda war with socialism, capitalists inevitably point out some of what it perceives to be the dictatorial tendencies of communism – in Russia, China and Cuba – as the archetypal example of socialism. What it does not do is study the conditions under which one-party rule occurred and what the authorities were up against. I am not going to get into pros and cons of this here because this kind of socialism – whether Stalinist or Maoist – is only one type of socialism. There are six types of socialism. Starting from the right and moving leftward there are social democrats and then three kinds of Leninists – Maoists, Stalinists and Trotskyists. Continuing leftward, there are left communists or council communists and the anarchists. In my efforts to convince middle-class liberals of the feasibility of socialism I will address as much as I can what most or all of these types are in agreement on. For now, let’s just say that dictatorial rule is not a foundational principle of socialism, even for the Stalinist and Maoist parties that have been called dictatorial by capitalists.
Furthermore, I think it is ludicrous for members of the Democratic Party to complain about the one-party rule of socialists when in Yankeedom there are only two parties. The Democratic Party is hardly democratic when it only serves the interests of the about 10% of the population (Republicans serve the ruling and upper classes) and leaves over 85% with no representation at all. The party I call the “Republicrats”, representing 15% of the population, is one party, the party of capital.
Confusion of personal property with social property
We socialists have a running joke on our Facebook posts, mostly in reaction to over-the-top conservatives who think we want to abolish personal property. We say “yes indeed, we are coming for your tooth brush.” That perceived threat is accompanied by imagining that socialists are all having group sex. But seriously, when we socialists say we want to abolish private property we only mean social property. We want to abolish capitalist control over water, food, energy systems, tools, all the necessities that people need to live. We don’t believe resources that everyone needs in order to live should be privately owned. On the other hand, personal property will remain with the individual as it would under capitalism.
Discouragement of innovation
Capitalism has a very shallow and narrow understanding of human nature. Capitalists imagine that people are lazy at heart and unless the carrot is held in front of people – the prospect of being a millionaire – they will do nothing. Further, they look at the types of “leisure” activities a working-class person enjoys after another 50-hour work week and take those as representing what human nature is really like. For example, on Friday night the worker wants to play cards. On Saturday he watches a ball game and have a few beers and on Sunday he sleeps in. For the capitalist this is lazy. What the capitalist thinks is that if workers did not have to work, then playing cards, watching football, drinking, getting laid and sleeping is all he would ever do. What the capitalist doesn’t understand is that the entire weekend is not leisure at all. Its recovery from the week and preparation for the new week.
Under conditions of socialist work, alienation would be minor – and I am being conservative here. The natural collective creativity on the job will arise. People will work less, perhaps 30 hours a week at first. Because workers will control the workplaces as well as decide what to produce, how to produce it, how much they should work and how they will be compensated, work will be a joy, not a curse as under capitalism. There will be plenty of room for innovation, in fact, much more than under capitalism where most workers are imprisoned in wage labor and told not to be curious and not have their own ideas about how things should be run.
All this collective creativity gives the lie to the ridiculous capitalist notion that people want socialism because they want “free stuff” with no contribution. All socialist plans have a budget and decisions have to be made about what and how the budget will be spent. No one will “get out of working”. What the capitalist cannot imagine is that under socialism people will want to work. The idea of not working would be painful – not liberating.
Equality of poverty
In its heyday, between the 1930s and the 1970s, the Swedish Social Democratic Labor Party was a socialist society which produced great material wealth. The socialist countries that have been showcased by capitalists as poor – the Soviet Union, China and Cuba – were only poor during certain times of their existence. What capitalists fail to inform us of is that before the socialist revolutions, as Michael Parenti points out, those countries were even more poor. What material wealth does exist in capitalist societies has taken hundreds of years to build up. In China today, absolute poverty was eradicated within 40 years.
There will be far more innovation than existed under capitalism because under socialism the workplaces will be controlled by the workers and workers’ activities will be guided by an overall plan. To cite one instance, before Yugoslavia was destroyed by capitalists, Yugoslavian productivity under worker self-management was higher than in any capitalist country. The same was true during the Spanish Revolution under worker self-management in both industry and in agriculture.
People are naturally greedy
Cross-cultural research on happiness has found that there is a direct correlation between money and happiness when people move from poverty to a middle-class life. However, the movement from middle-class to upper-middle-class and beyond is no longer correlated to happiness. In other words, people who are upper class or upper-middle-class are not any more likely to be happy than are middle-class people. This gives the lie to the capitalist notion that people are greedy and that everyone secretly wants to be a millionaire. What is more likely is that people want to be middle-class. They want basics in material security. After that they want other things; creativity on the job, to be able to contribute to society and to be recognized for their work, to mention only a few things.
Socialists will want to abolish religion
I admit that the state socialist attempt to decree the abolition of religion was a big mistake. I also think that doing so was contrary to the principles of materialism Marxists aspire to. While I stand firm in the ontological belief that there are no gods or god, at the same time I understand the degree to which people wish to hold on to religion as an expression of their alienation of social life. As generations pass and prosperous ways of life become normalized, I predict three things will happen. First, more people will become atheists. Secondly, those who continue to believe in religion will notice that the nature of the gods, or god, will change. The gods or god will blend more with the nature we know because social life will be more likely to begin to resemble heaven on earth. Third, the fundamentalist religions that plague many working-class people will disappear because the working-class will no longer consider themselves sinners or need fire and brimstone to make things right.
Commonalities Between Middle-Class Left Liberals and Socialists
Need for a mass party
We socialists think you’ll agree with us that we badly need a mass party that can speak to the needs of the 25% of us who are middle-class and the 40% percent of us who are working-class. This party will develop a program and a step-by-step plan for implementation of the plan over the next 5, 10 and 15 years. It will be a dues-paying party and we will implement methods for getting input into what the plan will be. The issues will be prioritized, and everyone will have a say in carrying out the plan. Once the plan is set, people will be able to sign up for tasks they agree to carry out over the course of weeks and months. In addition to a thirty-hour work week, approximately five hours per week will be devoted to this “political” work.
Massive support for Unions
We socialists know that you left liberals have supported unions from the 1930s to the early 1970s. However, we also know that it was under liberal presidents that the best organizers of unions, the communists and the socialists, were drummed out of unions in the 1950s. This limited the vision of unions as they turned into “business unions”. We also think you should be very upset with the neoliberals in the Democratic Party who have not supported unions for the last 50 years, causing union representation in Yankeedom to be now less than 10%. We hold neoliberals directly responsible for the fact that wages, working conditions and job security are pretty much last in the industrial capitalist societies. The vision of unions needs to be built back up to the ways of the Industrial Workers of the World who saw unions as workshops for how to run a society, not merely a way to sustain and improve everyday working conditions.
Society can be engineered
Like you, we socialists agree with the great project of the Enlightenment that a better society can be engineered by its members. Unlike conservatives, we do not accept that social organizations should be ruled by kings, aristocrats, priests or any traditional authorities. Neither do we think society is some kind of reform school in preparation for the next life. We also don’t think society is best governed by the automatic preservation of traditional institutions that have been here the longest. Like you, we agree in the notion of progress.
The value of science and technology in producing a society of abundance
Like you we are very disappointed and angry that capitalists have chosen to invest their profits in warfare and in finance capital rather than in scientific research that could make our lives better. We also think you should blame the neoliberals for allowing this to happen over the course of the last 50 years. As socialists we have always felt that the scientific method is the best way to know things and that science is a crucial ingredient in Marx’s call to “develop the productive forces”. For us, the creation of socialism was never any kind of sacrifice or doing with less. Nor are we unrealistic about human nature. We fully understand that the foundation of socialism has to be the production of more than enough wealth to go around. With abundance in place, there is no motivation for stealing or wanting what others have.
The value of the state overview
We socialists are in complete agreement with the value you hold about the importance of the functions of the matriarchically state. We also think it is important that the matriarchal state take over the realm of overall planning. This does not mean that all social production and distribution is centrally planned with no feedback from the local and regional levels. We see the relationship between the three in a dialectical manner. The local and regional levels feed up to the state level what products and services are needed. The state incorporates our feedback but then makes adjustments based on the fact that at the local and regional level we cannot see the whole. Once the state produces an over-all plan, that is then fed down to the local and regional levels. It will no doubt take a number of times for there to be a smooth “cybernetic” rhythm established.
Micro-level – the value of cooperative learning and authoritative parenting
We socialists are well aware that you middle-class left liberals have always supported public schools. Some of the more visionary of you might have had the money to send your children to a Montessori school. Some of you might have heard the name Lev Vygotsky and associated him with cooperative learning, which is used in Montessori education. What you probably were never told was that Vygotsky was a communist and he and his followers, Alexander Luria and Aleksei N Leontiev, founded a whole school of psychology, the “socio-historical school of psychology”. They developed a theory of cooperative learning that has been applied not only in school settings but in the design of social intelligence tests, the development of theories of cognitive development and in working with the deaf. Vygotsky’s work could be massively applied to the fields of social psychology, and possibly to therapy, as one group in New York City is currently doing.
Lastly, we admire the way that many of you have raised your children using authoritative child-rearing methods. You have avoided both extremes in child rearing. On the one hand are the authoritarian methods of conservative child rearing which raises children who are repressed, frightened and lack curiosity. On the other hand, it is the permissive parenting of upper-middle-class neoliberal parents that has turned out a generation of narcissistic, entitled, ungrateful brats who are the product of neoliberal schooling where the focus was on raising self-esteem in every school program. We think the authoritative (as opposed to authoritarian) method with its flexible structure, welcoming of dialogue, appeal to reason, rather than emotion is the best way to raise children. We are on the same page with you.
Deeper Differences between Middle-Class Left Liberals and Socialists
Commitment to an antiwar international policy
We socialists have always been against wars because we know they are usually turf wars between capitalists about resources and that it is the workers and the poor people who do the fighting, not the capitalists. As far as wars go, we know that your class has supported the Cold War and the war in Vietnam. Beyond the 1970s you seem to have treated these wars with less enthusiasm except for perhaps, the war on Iraq. As it stands now, the capitalists in Yankeedom not only make a fortune in military warfare to “protect our borders” but they also arm the entire world. If counties decided to end their wars the capitalists here would be destitute. These wars need to end, not just because of the senseless deaths at home and abroad, but for pragmatic reasons. All this money could go into the trillions of dollars’ worth of infrastructural work that is left undone. Suppose the military was employed on these infrastructural projects. Suppose the military was employed to build low-cost housing in every city. Living in a society of abundance requires the reinvestment in the military from wars abroad to infrastructure and natural disaster relief at home.
Anti-imperialist international policy
We socialists are also against imperialist wars where capitalists invade other countries to steal their political or economic resources, land and labor to make a profit. This can be most blatantly seen in Africa. Yankeedom also continues its imperialist ventures in Latin America, regularly attempting to overthrow governments there. Why? For the simple reason that freely elected governments (socialist or not) may have the nerve to set their own economic policy, which might not necessarily be friendly to transnational corporations.
Yankee capitalists want to rule the world and they don’t want any competition.
China, Russia and Iran refuse to tow the line and have formed an alliance. The Chinese represent the best hope of the world now. Why are they such a threat to the United States? Because they are making a profit through building infrastructures, not just in China but in other parts of the world. China, Russia and Iran have also withdrawn from the US dollar as a use of international currency, which costs the western banks in significant loss of profits. Yankee capitalists are slitting their own throats, and ours as well, by acting like big-shot imperialists fifty years after their time has passed and their own territory is falling apart. As middle-class people we think you can see that nothing good can come from this and we need to rebuild our own society.
Dismantling the Deep State
Unfortunately, most middle-class people don’t know any more about the FBI and the CIA and what these organizations do to promote themselves, including what is on television and in movies. The FBI has upended or ruined the lives of socialists for decades. Their role in undermining the New Left has been documented in David Cunningham’s book There’s Something Happening Here. The CIA is in a class by itself, the world’s most powerful terrorist organization. I will limit myself to three books: The Mighty Wurlitzer by Hugh Wilford; The Cultural Cold War by Frances Stoner Saunders and The Devil’s Chessboard by David Talbot. Funding for these organization should be ended, and the sooner the better.
Class Dismissed, Where Left Liberals Missed the Boat
For socialists of any stripe, social class has been the foundation for understanding capitalism. The capitalist class makes its profits by exploiting the working-class. As Marx points out, workers produce all the wealth, but they are given only about 40% in the form of wages (the first four hours of their labor) which allows them to support themselves. But the worker works another 6 hours. Who gets the value from that? The employer. The employer uses the rest of the surplus value produced by the worker to pay the middle-class managers, pay landlords for the use of plant and set aside funds to pay the state in taxes. They claim the remainder of the surplus as profit. Middle-class people have stood structurally between the working-class and the capitalists, giving orders to workers, taking orders from capitalists. There are other social classes as I’ve discussed earlier but the major dynamic is between the capitalist and the worker.
Middle-class people, like most other classes, do not talk about this because class is about political and economic power between groups. It is uncomfortable and middle-class people among others have been afraid to discuss this. Why? Because they feel guilty, that maybe it is their fault they have a better life? Maybe they owe the workers something? Middle-class people need to get over this, because the fact is, you are sliding south, in the same direction as the working-class. In fact, you now have more in common with working-class people than upper middle-class people.
Race relations: Social Movements vs Individualist Identity Politics
Strange as it may seem, middle-class people have been more comfortable talking about race than class. After all, many middle-class people prided themselves as left liberals by supporting the civil rights movement. This was a social movement in which racial minorities joined together to fix objective conditions such as higher pay, better housing, legal rights. I suspect most of you did not know that Martin Luther King, a paradigm of middle-class respectability, was a socialist.
However, since the mid 1970s, but especially from the 1990s on, race relations have turned from a social movement into something different. Identity politics is a psychological spin-off from the civil rights movement with a very different agenda. In the hands of upper middle-class, neoliberals of all colors, including lawyers and university professors, identity politics has been used to win political seats in the Democratic Party. They do this by focusing on the rights of individuals to recognition, the right to be called a certain pronoun and rights to declare being offended by this or that innuendo. Identity politics has crippled the ability of working-class and middle-class people to form alliances by dragging meetings through competitive battles as to who is more offended than whom. When an organization as corrupt as the ruling class Democratic Party starts babbling about “white privilege” it’s time to get off that sinking ship. The mess that race relations are today is made worse by the upper middle-class neoliberals seizing on identity politics. Here is yet another reason to dump the Democratic Party and any alliance with the upper middle-class. A terrific short book that lays out the limitations of identity politics is Mistaken Identity by Asad Haider.
Democracy is economic and participatory more than political representation
Middle-class left liberals in the 20th century have thought of democracy as synonymous with voting. Democracy was having the right to vote for one of the two major parties. For socialists this is a sham. Both parties are ruling class parties and workers have nothing to say about what candidates are running and what they will do after the election. For us, democracy is economic. We think it is ridiculous to imagine we live in a democracy when we go to work to be bossed around from beginning to the end of the day by the employer. For us, democracy begins and ends in the workplace. Workers should have a say in what is produced, how it is produced, where it is distributed, how long we work and how we are compensated. In addition, within socialism democracy is also present by its involvement in city planning. This includes participatory planning councils at the local level, participating in setting agendas and deciding how city revenue should be spent. Under socialism, political parties will still have their place, but they will operate under direct democracy, not representational democracy.
The future of capitalism
All socialists are against capitalism except for some right-wing social democrats who believe in a mixed economy. For us, capitalism is a system plagued by crises and inherently unstable. Various Marxist crisis theorists have developed theories about how and why capitalism will end. Even non-Marxist political economists have theories about how it will end. Please see my article “Name Me One Capitalist Country That Works: A Thirty Year Reckoning” for more sources. Where I think we can agree is that capitalist profits should not be made on wars, or on fictitious capital. It is the neoliberals, not you, who have made profits on fictitious capital and wars over the past 50 years. Rather, capitalist profits should be made on the production of goods and services. We still think that eventually capitalism will fail even if it only produces goods and services, but we can’t convince you of that until we are further down the road.
What is the place of competitive markets? Some of you might feel that having markets is a better mechanism for quickly finding out what people need and how those goods and services have been delivered. As Michael Parenti writes in Black Shirts and Reds, the central planning mechanisms in the USSR were no bargain. At the same time, we know that during the Spanish Revolution, the workers and peasants self-organized in industry and on farms for 3 years, covering millions of people and had better production records than the Spanish government had before the revolution. So, our choices are more than choosing between the state and the market. In the new society perhaps there might be a minor place for markets instead of state planning or worker planning, but the markets should never be among the major players. We can do better than markets.
• Published first in Socialist Planning Beyond CapitalismThe post Why Middle-Class Left Liberals Should Dump the Democratic Party: Finding Common Ground with Socialists first appeared on Dissident Voice.
Scott Noble’s latest documentary series, The War at Home, takes a deep dive into the history of labor movements and state repression in the United States. Soon to be a multi-part series, the first entry is titled “Rebellion” and can be viewed online for free [and below]. As with all of Noble’s films, The War at Home is meticulously researched and weaves a rich tapestry of primary and secondary sources and documents, including amazing period footage of momentous yet often little-remembered (or effectively censored) events. Punctuated by classic American folk and blues music, it is as much a celebration of America’s rebels as a condemnation of its injustices.
The film looks at history through the lens of the working class, beginning with the Haymarket Massacre of 1886 in Chicago, continuing through the spread of Jim Crow in Louisiana, to the Triangle Shirtwaist tragedy of 1911, and on to the violent strikes and police crackdowns of the Great Depression. In the first few minutes alone, the film tackles the concept of “wage-slavery,” noting that the great abolitionist and former slave Frederick Douglass initially rejected the term, yet later conceded, “there may be a slavery of wages only a little less galling and crushing in its effects than chattel slavery.” Conservatives who have re-branded themselves “classical liberals” may be surprised to learn that 19th century English philosopher John Stuart Mill believed that wage-labor would soon be replaced by something more amendable to the majority, as it was not a “satisfactory state to human beings.”
The period of industrialization following the Civil War had a brutalizing effect on most Americans, creating horrendous working conditions and giving rise to the first labor unions, as well as more radical movements devoted to various forms of socialism. Noble connects the dots between the rise of industrial capitalism, mass corporate profits, and the suppression/exploitation of labor along with affiliated radical political adherents, eventually leading to international conflicts and destruction on a scale the world had never before seen.
Particular attention is paid to the anarcho-syndicalist Industrial Workers of the World (aka “the Wobblies”), who as the film notes were the first American union “to reject all divisions among workers, even that of nationality.” At a time when racial issues are occupying much of our public discourse, the film reminds us that racial conflict and white supremacy have always been intentionally fostered by America’s ruling class, pitting workers against one another to prevent class solidarity. Though the Wobblies were non-violent, they embraced an overtly anti-capitalist and revolutionary doctrine (the Wobblies have undergone a resurgence in recent years, though have yet to approach their former heights).
Noble highlights how these struggles put common people in the crosshairs of their own civil institutions. Time after time, authorities responded to union organizing with extreme violence, often via the National Guard. When combined with the equally violent counter-insurgency methods of private armies like the Pinkertons, it was perhaps inevitable that some workers responded with violence of their own. The “propaganda of the deed” campaign, which originated in Europe, saw anarchists engage in assassinations and bombings of ruling class figures, undertaken with the hope of spurring on the masses to revolution. Instead, the campaign mostly had the effect of increasing state repression. In the United States, the most deadly and dramatic of these incidents was the bombing of Wall Street in 1920 (the film adds a grimly ironic historical footnote, namely that Wall Street was originally founded as a slave market).
The Industrial Workers of the World (and socialists of all stripes) were viciously repressed during WWI, often under the pretense that they were saboteurs working for Imperial Germany. New legislation such as the Espionage Act and later the Sedition Act provided broad authority to the Bureau (later Federal Bureau) of Investigation, resulting in the Palmer Raids and the deportation of hundreds of people, mostly poor immigrants. Leading the assault was a young J. Edgar Hoover, initially the head of the “radical division” or G.I.D. According to a later report, constitutional violations became a matter of routine. Mass surveillance was implemented against dissidents, ranging from the NAACP to Hellen Keller, a socialist and the first deaf and blind person to earn a bachelor of arts degree. People were beaten and sent to jail without trial or warrant. Socialist Party leader Eugene Debs was imprisoned after delivering an anti-war speech in Canton, Ohio (stating that he would not “go to war for Wall Street”). Equally damaging to radical union organizers were the introduction of “criminal syndicalism” laws passed at the state level. The laws were so broad in their wording that “loitering on the job” could be classified as “sabotage.”
Discussion in The War at Home of repression during WWI and the Red Scare includes an analysis of propaganda and information control (looking at the influences of Walter Lippmann, George Creel, and Edward Bernays among others), and how such campaigns paved the way for social/political acceptance of such repression. Conscription is also highlighted as a serious injustice (most American men who fought and died in WWI did not do so voluntarily). The anarchist Emma Goldman spearheaded a legal challenge to outlaw the practice, arguing that it violated the 13th Amendment’s prohibition against involuntarily servitude. The Supreme Court unanimously rejected the petition.
The film draws a link between the purging of radicals from labor unions and the decline of union power during the 1920s. Following the Bolshevik revolution, mainstream unions such as the American Federation of Labor (AFL) ejected communist members, while business organizations simultaneously portrayed unions as a communist plot. The Socialist Party fractured after a majority of their members voted to support the Comintern in Russia. Minimum wage laws were struck down. The drunken exuberance of the wealthy during the “roaring twenties” is contrasted with the poverty of the majority (as well their hellish workplaces, epitomized by soul-destroying assembly lines under the corporate metric tyranny of Taylorism).
The final section of the film deals with events during the Great Depression, emphasizing the great labor strikes of 1934. Many of these strikes, including those in San Francisco, Toledo, and Minneapolis, were led by communists. In Minneapolis, militant Trotskyists created alliances with farmers and encouraged everyone connected to the delivery process to join in the strike – not just truckers. The events of 1934 were instrumental both to the creation of Congress of Industrial Organizations (CEO), which sought to organize unskilled workers, and various New Deal measures adopted by president Franklin. D. Roosevelt (FDR). Increasingly frightened of rebellion from below, certain segments of the ruling class actually supported FDR’s reforms.
Based on research from historians like Howard Zinn, Sharon Smith, Peter Kuznick, Peter Rachleff, and Roxanne Dunbar-Ortiz, The War at Home – Rebellion exposes the roots of America’s class war on its own people. If this montage paints what seems a grim portrait of US history, it is because most students are rarely presented with the Untold History that Noble explores. But the story he tells is not a bleak one, rather, it is ultimately a history of hope and struggle, of progress and perseverance. It shows just how powerful we the people can be when we work together against the odds, against our myriad oppressors.
Glimpses of genuine worker solidarity and triumph appear at various stages of the film: the Wobblies overcoming free speech prohibitions in the early 20th century; the Lawrence Textile strike, which involved immigrant workers (mostly women) from dozens of different nationalities; the Seattle General strike of 1919, which saw workers taking over the entire city for a brief time period; the great sit-down strikes of 1936-37, by which workers successfully challenged some of the largest corporations in the country and indeed the world.
In a time when many are questioning institutional integrity across society, seeking accurate and relevant information to help make sense of our supposedly post-truth era, Noble shines a spotlight into our dark past while providing a crucial class context often missing or obscured in mainstreamed accounts. It is precisely this sort of work that can provide a foundation for mapping a better, brighter, and more just future for all.
As I write this, Noble promises to upload part II of The War at Home, titled “Blacklist.” It explores the years 1936 to 1956, and ends with the word “COINTELPRO.” All of Noble’s films can be viewed at his website. He is currently seeking support for Part III, which will cover the 1960s.
Having seen all of Noble’s previous films, it is safe to say that once completing the series, he will have provided yet another stellar resource for educators and others who seek a deeper understanding of the world’s most powerful hegemon, and of its many oppressed inhabitants fighting for liberty and democracy in the United States of America.