Tag: capitalism

The new history of slavery and capitalism

Was slavery an expression of, or deviation from, American capitalism?

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Source: Aeon

Author: Josua D. Rothmsn

Emphasis Mine

Questions about the relationship between slavery and capitalism in the United States have animated historians for nearly a century, and they have never really been resolved. Where some scholars have argued that profit motives, entrepreneurialism and market relations defined American slavery, others have insisted just as emphatically that the slave society of the southern states lacked a truly free labour market and precluded the cultivation of bourgeois values and the development of large cities, which are distinguishing characteristics of capitalist society.

In the past several years, however, the former view has been clearly ascendant, with historians producing a steady stream of scholarship advancing the argument that slavery in the US was both itself deeply capitalistic and made profound contributions to the burgeoning industrial world whose guns, ships and bombs would eventually bring about slavery’s demise. Books by Edward Baptist, Sven Beckert and Walter Johnson have made the most noise. But their work, along with that of the historians Daina Ramey Berry, Seth Rockman, Caitlin Rosenthal, Calvin Schermerhorn and many others has effectively launched an entire subfield of literature dedicated to exploring the ways that human bondage gave rise to a modern Western superpower.

Unsurprisingly, it is an avenue of enquiry that has roiled academics and the public alike. For some, the definition of capitalism in recent works is too imprecise or insufficiently grounded in theories of political economy to take seriously. Some question whether the authors of these works have an understanding of economics deep and thorough enough to sustain their claims. Still others are underwhelmed by arguments they feel they have heard before and found less than convincing the first time. And for some people the very idea that slavery could be integral to capitalism is anathema, because to them capitalism is the foundation of freedom itself.

There is some irony in all this reactionary hodgepodge, because whether it comes from the left or the right, the hostility toward the new history of slavery and capitalism frequently seems rooted in disdain that is as much a matter of dogma as of analysis.

Notwithstanding skeptical critics, there are reasons so many find this new scholarship refreshing, compelling and persuasive. In part, of course, an emphasis on the darker side of capitalism’s history comports well with the world today. It is a world where, following the financial meltdown of 2008, the fragility of the economic system is apparent. It is a world in which almost anything can be commoditised and securitised for the benefit of a small minority, while those at the bottom struggle to scrape by. In this world, a past in which the most vulnerable literally belonged to forces of capital that manipulated their labour and their lives for profit makes perfect sense. Indeed, sometimes the past presents striking, specific parallels with the present. The crisis of 2008, for example, grounded in reckless speculation and foolish beliefs about the endless rise of real estate and housing prices, looks not so dissimilar from the crisis of 1837, grounded in reckless speculation and foolish beliefs about the endless rise in the prices of cotton and enslaved people.

Studies exploring the historical relationship between slavery and capitalism also resonate because the racialised nature of US capitalism continues to be patently evident. Black people can no longer be bought and sold as chattel, but they remain disproportionately subject to the predations of payday and mortgage lenders, court officials who extort them to fund local government operations, and law-enforcement officers who assume they have licence to discipline them with excessive and sometimes deadly force. Most dramatically, it is disproportionately black bodies that get funnelled into US prisons and guarantee that state contracts with corrections companies get fulfilled. The operation of the modern and often privatised prison system in the US does not amount to slavery. But slavery’s legacy can be seen plainly in the annual reports of corporate entities whose stock prices depend in part on how many black men and women are locked in their cells.

Of course, given the historical significance of slavery in the US, its links to capitalism are hardly the only issues worth considering. Like all scholarly waves, the current one will eventually crest and trough. But the evidence mustered in recent studies is not likely to lose its import any time soon and, ultimately, the larger point made by scholars bringing that evidence to bear is not that capitalism is a system of inherent evil. It is that capitalism without limits can produce nearly unfathomable human misery as it produces wealth for a select few. Indeed, the abolitionists, most of whom were hardly enemies of capitalism, nevertheless understood that capitalism without limits can and will make property of man. In the US, the Civil War and the age of emancipation was a moment when the nation tried to draw a clear line delineating what can and cannot be legitimately sold in a capitalist system. Historians of slavery and capitalism today remind us that when that line blurs, we fail to sharpen it at our peril.

See: https://aeon.co/opinions/how-capitalist-was-american-slavery?utm_source=Aeon+Newsletter&utm_campaign=d97b0db0be-Weekly_reads_Saturday_13th_February_2_10_2016&utm_medium=email&utm_term=0_411a82e59d-d97b0db0be-68915721

Reality Check for Democrats: Would Martin Luther King Be Supporting Bernie?

Civil Rights leader was a harsh critic of capitalism.

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Source: AlterNet

Author: Jeff Cohen

Emphasis Mine

Corporate mainstream media have sanitized and distorted the life and teachings of Martin Luther King Jr., putting him in the category of a “civil rights leader” who focused narrowly on racial discrimination; end of story.

Missing from the story is that Dr. King was also a tough-minded critic of our capitalist economic structure, much like Bernie Sanders is today.

The reality is that King himself supported democratic socialism – and that civil rights activists and socialists have walked arm-in-arm for more than a century.

The same news outlets that omit such facts keep telling us that the mass of African American voters in South Carolina and elsewhere are diehard devotees of Hillary (and Bill) Clinton – implying that blacks are somehow wary of Bernie Sanders and his “democratic socialism.”

Here are some key historical facts and quotes that get almost no attention in mainstream media:

1909:  Many socialists – both blacks and whites – were involved in forming the National Association for the Advancement of Colored People (NAACP), our country’s oldest civil rights group.  Among them was renowned black intellectual W.E.B. Dubois.

1925:  Prominent African American socialist A. Philip Randolph became the first president of the Brotherhood of Sleeping Car Porters, a union that played a major role in activism for civil and economic rights (including the 1963 “March on Washington for Jobs and Freedom”).

1952:  In a fascinating letter to Coretta Scott, the woman he would marry a year later, Martin King wrote: “I imagine you already know that I am much more socialistic in my economic theory than capitalistic. . . . Today capitalism has out-lived its usefulness.”

1965:  King wrote an essay in Pageant magazine, “The Bravest Man I Ever Knew,” extolling Norman Thomas as “America’s foremost socialist” and favorably quoting a black activist who said of Thomas: “He was for us before any other white folks were.”

1965:  After passage of the landmark Civil Rights Act of 1964 and the Voting Rights Act in 1965, King became even more vocal about economic rights: “What good is having the right to sit at a lunch counter if you can’t afford to buy a hamburger?”

1965-66:  King supported President Lyndon Johnson’s “War on Poverty” but urged more – calling for a “gigantic Marshall Plan” for our naton’s poor of all races.

1966:  In remarks to staffers at the Southern Christian Leadership Conference (SCLC), King said:

“You can’t talk about solving the economic problem of the Negro without talking about billions of dollars. You can’t talk about ending the slums without first saying profit must be taken out of slums. You’re really tampering and getting on dangerous ground because you are messing with folk then. You are messing with captains of industry. . . . It really means that we are saying something is wrong with capitalism. There must be a better distribution of wealth, and maybe America must move toward a democratic socialism.”

March 1967:  King commented to SCLC’s board that “the evils of capitalism are as real as the evils of militarism and evils of racism.”

April 1967:  In his speech denouncing the U.S. war in Vietnam at New York’s Riverside Church, King extended his economic critique abroad, complaining about “capitalists of the West investing huge sums of money in Asia, Africa, and South America, only to take the profits out with no concern for the social betterment of the countries.”

May 1967:  In a report to SCLC’s staff, King said:

“We must recognize that we can’t solve our problem now until there is a radical redistribution of economic and political power . . . this means a revolution of values and other things. We must see now that the evils of racism, economic exploitation and militarism are all tied together . . . you can’t really get rid of one without getting rid of the others the whole structure of American life must be changed.”

August 1967:  In his final speech to an SCLC convention, King declared:

“One day we must ask the question, ‘Why are there forty million poor people in America?’ And when you begin to ask that question, you are raising a question about the economic system, about a broader distribution of wealth. When you ask that question, you begin to question the capitalistic economy. And I’m simply saying that more and more, we’ve got to begin to ask questions about the whole society. We are called upon to help the discouraged beggars in life’s marketplace. But one day we must come to see that an edifice which produces beggars needs restructuring. It means that questions must be raised. And you see, my friends, when you deal with this you begin to ask the question, ‘Who owns the oil?’ You begin to ask the question, ‘Who owns the iron ore?’ You begin to ask the question, ‘Why is it that people have to pay water bills in a world that’s two-thirds water?’”

Martin Luther King Jr. was assassinated in 1968 as he and SCLC were mobilizing a multiracial army of the poor to descend nonviolently on Washington D.C. demanding a “Poor Peoples Bill of Rights.” He told a New York Times reporter that “you could say we’re involved in the class struggle.”

A year before he was murdered, King said the following to journalist David Halberstam: “For years I labored with the idea of reforming the existing institutions of the South, a little change here, a little change there. Now I feel quite differently. I think you’ve got to have a reconstruction of the entire society, a revolution of values.”

Unlike what Hillary Clinton professes today, Dr. King came to reject the idea of slow, incremental change.  He thought big.  He proposed solutions that could really solve social problems.

Unlike corporate-dominated U.S. media, King was not at all afraid of democratic socialism.  Other eminent African American leaders have been unafraid. Perhaps it’s historically fitting that former NAACP president Ben Jealous has recently campaigned for Bernie Sanders in South Carolina.

If mainstream journalists did more reporting on the candidates’ actual records, instead of crystal-ball gazing about the alleged hold that the Clintons have over African American voters, news consumers would know about the deplorable record of racially-biased incarceration and economic hardship brought on by Clinton administration policies. (See Michelle Alexander’s “Why Hillary Clinton Doesn’t Deserve the Black Vote.”)

With income inequality even greater now than during Martin Luther King’s final years, is there much doubt that King would be supporting the progressive domestic agenda of Bernie Sanders?

Before Bernie was making these kinds of big economic reform proposals, King was making them – but mainstream media didn’t want to hear them at the time . . . or now.

Jeff Cohen is director of the Park Center for Independent Media at Ithaca College, cofounder of the online activism group RootsAction.org – and founder of the media watch group FAIR, which defended  Gary Webb against the backlash.

See: http://www.alternet.org/election-2016/reality-check-democrats-would-martin-luther-king-be-supporting-bernie?akid=13969.123424.eAvq7w&rd=1&src=newsletter1050548&t=6

Robert Reich: The Wealthy Have Pulled America Back to the 19th Century

Wall Street and enormously rich individuals have gained political power to organize the market in ways that leave most Americans behind.

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Source: AlterNet

Author: Robert Reich

N.B.: Marx: correct in the 19th century, and still correct today.

Emphasis Mine

My recent column about the growth of on-demand jobs like Uber making life less predictable and secure for workers unleashed a small barrage of criticism from some who contend that workers get what they’re worth in the market.

A Forbes Magazine contributor, for example, writes that jobs exist only  “when both employer and employee are happy with the deal being made.” So if the new jobs are low-paying and irregular, too bad.

Much the same argument was voiced in the late nineteenth century over alleged “freedom of contract.” Any deal between employees and workers was assumed to be fine if both sides voluntarily agreed to it.

It was an era when many workers were “happy” to toil twelve-hour days in sweat shops for lack of any better alternative.

It was also a time of great wealth for a few and squalor for many. And of corruption, as the lackeys of robber barons deposited sacks of cash on the desks of pliant legislators.

Finally, after decades of labor strife and political tumult, the twentieth century brought an understanding that capitalism requires minimum standards of decency and fairness – workplace safety, a minimum wage, maximum hours (and time-and-a-half for overtime), and a ban on child labor.

We also learned that capitalism needs a fair balance of power between big corporations and workers.

We achieved that through antitrust laws that reduced the capacity of giant corporations to impose their will, and labor laws that allowed workers to organize and bargain collectively.

By the 1950s, when 35 percent of private-sector workers belonged to a labor union, they were able to negotiate higher wages and better working conditions than employers would otherwise have been “happy” to provide.

But now we seem to be heading back to nineteenth century.

Corporations are shifting full-time work onto temps, free-lancers, and contract workers who fall outside the labor protections established decades ago.

The nation’s biggest corporations and Wall Street banks are larger and more potent than ever.

And labor union membership has shrunk to fewer than 7 percent of private-sector workers.

So it’s not surprising we’re once again hearing that workers are worth no more than what they can get in the market.

But as we should have learned a century ago, markets don’t exist in nature. They’re created by human beings. The real question is how they’re organized and for whose benefit.

In the late nineteenth century they were organized for the benefit of a few at the top.

But by the middle of the twentieth century they were organized for the vast majority.

During the thirty years after the end of World War II, as the economy doubled in size, so did the wages of most Americans — along with improved hours and working conditions.

Yet since around 1980, even though the economy has doubled once again (the Great Recession notwithstanding), the wages most Americans have stagnated. And their benefits and working conditions have deteriorated.

This isn’t because most Americans are worth less. In fact, worker productivity is higher than ever.

It’s because big corporations, Wall Street, and some enormously rich individuals have gained political power to organize the market in ways that have enhanced their wealth while leaving most Americans behind.

That includes trade agreements protecting the intellectual property of large corporations and Wall Street’s financial assets, but not American jobs and wages.

Bailouts of big Wall Street banks and their executives and shareholders when they can’t pay what they owe, but not of homeowners who can’t meet their mortgage payments.

Bankruptcy protection for big corporations, allowing them  to shed their debts, including labor contracts. But no bankruptcy protection for college graduates over-burdened with student debts.

Antitrust leniency toward a vast swathe of American industry – including Big Cable (Comcast, AT&T, Time-Warner), Big Tech (Amazon, Google), Big Pharma, the largest Wall Street banks, and giant retailers (Walmart).

But less tolerance toward labor unions — as workers trying to form unions are fired with impunity, and more states adopt so-called “right-to-work” laws that undermine unions.

We seem to be heading full speed back to the late nineteenth century.

So what will be the galvanizing force for change this time?

Robert B. Reich has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He also served on President Obama’s transition advisory board. His latest book is “Aftershock: The Next Economy and America’s Future.” His homepage is www.robertreich.org.

 

See: http://www.alternet.org/robert-reich-wealthy-have-pulled-america-back-19th-century

Slavery and the Making of American Capitalism

Edward E. Baptist’s brilliant book, The Half Has Never Been Told, soars because of the author’s decision to root his analysis in the human dimension.

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Source: Counter Punch

Author: Charles Lawson

Emphasis Mine

During the 1930s, the WPA sent out workers to interview men and women who had been slaves before the Emancipation Proclamation. It was 72 years after slavery had been abolished and the interviewees were old but their memories were still vivid. When probed by an interviewee, Lorenzo Ivy responded, “Truly, son, the half has never been told.” After the Civil War, black life during slavery was sanitized, deodorized and, above all, reported by Caucasians—not by the people who had toiled under the murderous system. To a certain extent, that one-sided view has persisted. Historians of the South—largely while men—continued the subterfuge. And even recent attempts to set the record straight have followed in the steps of their predecessors: a chapter on families, one on women, etc., looking at groups instead of individuals.

Hence, the need for Edward E. Baptist’s monumental examination of slavery, presented in an entirely new way, extensively through the voices of the slaves themselves.  Baptist has not simply read the WPA interviews but, apparently, every other account of what happened, particularly the many slave narratives published before and after the end of slavery. And, then—what is most original here—he has organized his own account by using parts of the body; for slavery was, above all, an affront to the basic dignity of the corporal body. These are the chapter titles: “Feet,” “Heads,” “Right Hand,” “Left Hand,” “Tongues,” “Breath,” “Seed,” “Blood,” “Backs,” and “Arms”—largely parts of the body. The Introduction (“The Heart”) and the Afterword (“The Corpse”) complete the picture.

The first chapter (“Feet”) begins,

“Not long after they heard the first clink of iron, the boys and girls in the cornfield would have been able to smell the grownups’ bodies, perhaps even before they saw the double line coming around the bend. Hurrying in locked step, the thirty-old men came down the dirt road like a giant machine. Each hauled twenty pounds of iron, chains that draped from neck to neck and wrist-to-wrist, binding them all together. Ragged strips flapped stiffly from their clothes like dead-air pennants. On the men’s heads, hair stood out in growing dreads or lay in dust-caked mats. As they moved, some looked down like catatonics. Others stared at something a thousand yards ahead. And now, behind the clanking men, followed a marching crowd of women loosely roped, the same vacancy in their expressions, endurance standing out in the rigid strings of muscle that had replaced their calves in the weeks since they left Maryland. Behind them all swayed a white man on a gray walking horse.”

The men (often with a thousand pounds of iron connecting them) were part of a coffle, enslaved migrants walking seven or eight hundred miles, chattel property, being moved from the north to the south because the profits when they were sold to their new owners were one hundred percent. The slave trade in Africa no longer mattered because slaves in the more northern states (Virginia, especially, but also Maryland) were reproducing so quickly that they created an entire new source of labor. Baptist gives the year as 1805, and states that eventually a million slaves were herded this way to the South. Tobacco farming in the North was less profitable than cotton farming in the South. “The coffle chained the early American republic together.” Slaves walked and walked for five or six weeks, performing their ablutions as they moved. There wasn’t an iota of dignity for the men. Baptist refers to the entire procedure as a “pattern of political compromise” between the North and the South and notes that eight of the first twelve Presidents of the United States were slave owners.

The movement of such huge numbers of slaves to the part of the country that could more productively use them was a “forced migration” grounded on “forced separations, violence, and new kinds of labor.” Equally disturbing—and this is the thesis of Baptist’s magnificent book—“all northern whites had benefited from the deepened exploitation of enslaved people.” Thus, there are no chapters on the African slave trade or the Middle Passage here, but a focus instead on what might be called the second stage of slavery in America. The movement to the deep South would continue for years because of increased productivity of the slaves themselves. In the North, one hand usually sufficed for their work (the dominant hand) but cotton picking required the complicated dexterity of both hands working together.

Moreover, as the country expanded, Southerners made certain that many of the new states further west became slave states where cotton production could continue. So Louisiana, Alabama, Mississippi and Georgia were soon augmented by Texas, Arkansas, and eventually Oklahoma, New Mexico and Arizona, Union territories permitting slavery. It was a nasty balance but it permitted the growth of cotton plantations across the country as well as the steadily increasing cotton industry throughout the entire world (“massive profits from textile manufacturing”—not just in the United States.) Cotton became the “global economy’s most important raw material.”

The plantation owners developed something known as the “pushing system,” forcing the cotton pickers to increase productivity. There were quotas and severe punishments for those who failed, and if a slave had a day when he (or she) picked more than any other day, that became his (or her) new daily quota. Torture for failed quotas was endemic.  All white people in the country benefitted, even though some northerners insisted they were no part of it.

Baptist is not afraid to refer to the entire system as “stealing.”  “If you want to rule a person, steal the person. Steal him from his people and steal him from his own right hand, from everything he has grown up knowing. Take her to a place where you can steal everything else from her: her future, her creativity, her womb.” In such a system there can be no good slave owners, only bad ones. “Stealing can never be an orderly system undergirded by property rights, cushioned by family-like relationships. There is no balance between contradictory elements. There is only chaos and violence.”

Fortunately, by the 1820s, there were increasing pronouncements from white Americans that slavery had to end. And there were increasing narratives published by slaves who had escaped that showed their limited number of readers just how appalling the entire system was.  As I said earlier, Baptist relies on these accounts extensively, plus the isolated reports of a number of attempted revolts such as Nat Turner’s. Christianity was also added to the fray, both as a justification of slavery, by some, and hope for many slaves who had been converted.

In spite of the enormous profits from cotton, it was not an uninterrupted trajectory of economic stability. Banks often lent out more money than they should have, using slaves as collateral. There was often economic turmoil. By the late 1830s, “In response to these clear incentives, enslavers created still more ways to leverage slaves into still more leverage. They mortgaged the same collateral from multiple lenders. They used slaves bought with long-term mortgages to bluff lenders into granting unsecured commercial loans. Above all, they kept buying more slaves on credit. Even if they ran into problems, they figured they would still win, because they could sell their assets. For the slave prices were still rising.”

Inevitably there were panics, collapses, including one that began in Texas, in 1837. Then things bounced back again. Half of the country’s economic activity was related to slavery. By 1850, there were three million slaves in the country. There were years of bitter arguments in Congress about the viability of the entire system. The Compromise of 1850 (another further balancing of slave areas with non-slave areas) simply continued the precarious holding pattern. There were major compromises over runaway slaves, the famous Lincoln/Douglas Debates, John Brown’s execution—dark days for the country. Then in 1860, Lincoln won the election and southern states began to secede. Baptist remarks, “The South did not believe that the North would fight.”

Most of the rest of the story is familiar, as grim as what happened before the end of the Civil War. Black soldiers had pushed the balance. “Their service in battle had saved the nation,” though not necessarily to the benefit they had anticipated. It wasn’t long before the South began imposing major restrictions on black people, the insidious “Jim Crow” laws. Other than a brief period immediately after the war, almost all black people were “shut out of the political system.” Baptist observes, “Slavery and its expansion had built enduring patterns of poverty and exploitation. This legacy was certainly crystal clear in [the] early twentieth-century South. African-American households had virtually no wealth, for instance, while a substantial portion of the wealth held by white households, even after emancipation, could be traced to revenue generated by enslaved labor and financing leveraged out of their bodies before 1861.”

When you consider the long-term effects of slavery, reaching into our world today, it is possible to say that the lives of African-Americans are substantially better than they have ever been before, but when you examine the actual economics impacting black people’s lives, you see a much different picture. Numerous articles in the press during the past few years provide a bleak picture of black people’s living situations. The gap among races widened during the recent economic recession. According to an article in The New York Times in August of this year, “The net worth of the average black household in the United States is $6,314, compared with $110,500 for the average white household, according to 2011 census data. The gap has worsened in the last decade, and the United States now has a greater wealth gap by race than South Africa did during apartheid.” That’s as damning an indictment of the long-term results of slavery in America as possible and something to consider when reflecting on the half-assed analyses of the recent riots in Ferguson, Missouri.

Edward E. Baptist’s brilliant book, The Half Has Never Been Told, soars because of the author’s decision to root his analysis in the human dimension. The book transcends anything that has previously been written about slavery. Dozens of individual slaves are named in the study and their lives successfully worked into the lengthy narration of the legacy of slavery in our country. In short, Baptist has humanized the lives of American slaves, liberated them from one of the most inhumane systems mankind ever devised.  The entire country needs to do the same.

Edward E. Baptist: The Half  Has Never Been Told: Slavery and the Making of American Capitalism

Basic Books, 498 pp., $35.00

Charles R. Larson is Emeritus Professor of Literature at American University in Washington, D.C.  Email: clarson@american.edu.

 

Two Theories of Poverty

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Source: Portside

Author: Matt Bruenig

Paul Ryan released his anti-poverty plan last week. In it, he proposes that a variety of federal means-tested welfare programs be turned into cash block grants to states, who would then be allowed to dole out the cash in exchange for recipients laying out a life contract for how they will increase their market incomes for a nosy case worker. As I explained on the day it came out, this is a bad idea, unnecessary, and seriously misunderstands the nature of American poverty.

In response to Ryan, many commentators pointed out that people do not need life contracts to go on to boost their market incomes because they already do that (myself, Weissman, Bouie). These writers point out that people move in and out of poverty a lot. Even though the poverty rate stays pretty steady year to year, “poor people” are not the same people each year.

Although these rebuttals have been fairly modest in scope, they actually lay bare a fundamental difference in the way right-wingers and left-wingers understand poverty.

Theory One: Poverty Is Individual

The right-wing view is that poverty is an individual phenomenon. On this view, people are in poverty because they are lazy, uneducated, ignorant, or otherwise inferior in some manner. If this theory were true, it would follow that impoverished people are basically the same people every year. And if that were true, we could whip poverty by helping that particular 15% of the population to figure things out and climb out of poverty. Thus, a program of heavy paternalistic life contracts to help this discrete underclass get things together might conceivably end or dramatically reduce poverty.

Theory Two: Poverty Is Structural

The left-wing view is that poverty is a structural phenomenon. On this view, people are in poverty because they find themselves in holes in the economic system that deliver them inadequate income. Because individual lives are dynamic, people don’t sit in those holes forever. One year they are in a low-income hole, but the next year they’ve found a job or gotten a promotion, and aren’t anymore. But that hole that they were in last year doesn’t go away. Others inevitably find themselves in that hole because it is a persistent defect in the economic structure. It follows from this that impoverished people are not the same people every year. It follows further that the only way to reduce poverty is to alter the economic structure so as to reduce the number of low-income holes in it.

Which is true? Structural Poverty

To figure out which theory is true, the easiest thing to do is answer the question: are impoverished people the same people every year or different ones? The individual theory predicts that they are the same people (and further that they need paternalist intervention to get their act together). The structural theory predicts that they are different people (and further that we need to alter the economic structure to make things better).

As all of the commentators linked above mentioned, longitudinal surveys show that impoverished people are not the same people every year. The last SIPP (three-year longitudinal survey done by the Census) had around one-third of Americans finding themselves in episodic poverty at some point in the three years, but just 3.5% finding themselves in episodic poverty for all three years. The PSID data show that around 4 in 10 adults experience an entire year of poverty between age 25 and 60. If you count kids, the number of people who experience at least one year of poverty rockets even higher of course.

Also, it deserves pointing out that nearly 45 percent of adults use a means-tested welfare program in their life (this, presumably, is the number of adults who would need to prostrate themselves before social workers at some point in their life to spell out some ridiculous life contract under Ryan’s plan).

Getting Specific About Structural Holes

The revolving door of poverty is a slam dunk indicator that the structural theory of poverty is correct, but we can get even more specific by identifying where the structural holes are. There are many places to focus, but one very easy and indisputable one is age.

First, consider child poverty. Children have much higher poverty rates than adults and younger children have higher poverty rates than older children.

Why is this? Two reasons. First, families with children in them have to get more income each year to stay above the poverty line than families without them. But, the market does not distribute families more money just because they have more children. Consequently, the mere act of adding a child to a family makes it more likely that the family will be in poverty. Second, adults have children when they are young workers, but young workers also make the least income. This too makes it more likely a child will be in poverty than an adult purely because of the way the economy is structured.

Why do young children have higher poverty rates than older children? Because young children have young parents and old children have old parents. Old parents make more money than young parents because they are deeper into their income life cycle. That is why the graph above looks the way it does.

Second, consider adult poverty by age:

It’s common to describe 25-65 as prime working-age adults. But look at how much poverty falls over those working years. Nearly 20% of 25-year-olds are in poverty while less than 10% of 64-year olds are. Why? Young workers make less money than old workers. Young workers are often taking care of children as well, while older workers generally aren’t. This is structural. This is one of the very blatant structural reasons why you are going to see people swapping in and out poverty over their life course just like the longitudinal data show.

I could go on, but the point is clear. Poverty replicates itself in very predictable structural ways. Since the problem is structural, the solution must be structural as well. This is not nearly as difficult a task as it may seem. For instance, in the case of structural poverty problems afflicting children and young families, it is very easily dealt with by using a Child Allowance program, which is commonly used throughout Europe.

Posted by Portside on July 31, 2014

Emphasis Mine

See:https://portside.org/2014-07-31/two-theories-poverty

Believe It or Not: Karl Marx Is Making a Comeback

It’s true. The “Communist Manifesto” co-author has gotten a second life — and he has some advice for progressives

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karl_marx-620x412

Source: Salon via Portside

Author: Sean McElwee

Karl Marx is on fire right now. More than a century after his death, the co-author of “The Communist Manifesto” still has the honor of being the first smear against ideas slightly to the left of Hillary Clinton. (See: Thomas Piketty.) Marx also graced the cover of the National Review as recently ast last month. Few other thinkers, and certainly few non-religious figures, can claim the honor of being so widely misappropriated by the political rearguard. But, while most people consider Marx only as a sort of intellectual boogeyman, the manifestation of everything evil on the left, he has much to offer a left increasingly divorced from the working class.

To that end, Marx actually is enjoying something of a renaissance on the left these days. Jacobin, a socialist publication that publishes many Marxist thinkers, was profiled by the the New York Times and boasts Bob Herbert as a contributor. Benjamin Kunkel’s recent compilation of essays, “Utopia or Bust,” earned that author a profile in New York magazine, and the title “The Lena Dunham of Literature.” And that’s not even to mention Thomas Piketty’s blockbuster work, “Capital in the 21st Century,” which harkens back to Marx’s multi-volume magnum opus, Das Kapital. The wave has even extended so far as Capitol Hill, where Sen. Bernie Sanders, D- Vermont, openly calls himself a “democratic socialist.”

Marx most certainly wasn’t right about everything, but he wasn’t wrong about as much as people think. A revival of his thought is good news for progressive America. It can give the left fresh arguments that were previously forgotten to history, and new organizing strategies that they’ve long since abandoned.

* * *

The first problem with the left that Marx might have noted is the wholesale abandonment of the working class. As Perry Anderson points out in his essay, “Considerations on Western Marxism,”

The extreme difficulty of language of much of Western Marxism in the twentieth century was never controlled by the tension of a direct or active relationship to a proletarian audience.

Increasingly, the left is dominated by what the German Marxist Rosa Luxemburg might call Kathedersozialisten – or “professorial socialists.” These thinkers, frequently drenched in academese, talk and debate in a way almost entirely designed to alienate anyone who does not already accept their conclusions. The professorial left seems to have innumerable answers for those wondering what Lacanian psychoanalysis has to offer us, but can give us little guidance as to whether the Working Families Party should support Cuomo or run its own candidate.

Manifesto co-author Friedrich Engels’s The Condition of the Working Class in England was a pioneering study of the working class. He and Marx both clearly saw the working class as the means to political power — and viewed persuading them as the most important task the left faced. When Maurice Lachatre asked Marx if he would be willing to serialize Das Kapital, Marx replied, “In this form the book will be more accessible to the working-class, a consideration which to me outweighs everything else.” One struggles, however, to imagine a latter-day Marxist champion like Theodor W. Adorno writing those words. The left abandoned the working class and the working class then abandoned the left. That needs to change.

Marx and Engels also offer the left a new way to discuss ideology. In his brilliant collection, The Agony of the American Left, Marx(ish) historian Christopher Lasch writes,

The Marxian tradition of social thought has always attached great importance to the way in which class interest takes on the quality of objective reality… Lacking an awareness of the human capacity for collective self-deception, the populists tended to postulate conspiratorial explanations of history.

Lasch is arguing that, to a large extent, humans are biased toward the state of affairs that currently exists and then work backwards to justify it to themselves. That is, we’re more likely to embrace a deeply unjust economic system, simply because it’s the one we’ve always known. A recent study bears this out, finding that market competition serves to psychologically legitimize inequalities that would otherwise be considered unjust. Because many on the left, especially populists, do not understand ideology, they often write and argue as though the entire American political system is controlled by a small cabal of business or political leaders conspiring to fool the masses.

The implications of ideology are important and numerous. The left must not fall into the trap of believing that all Americans actually do share our views, but that a conspiracy of the wealthy, or the power of GOP framing, or the influence of money are preventing us from succeeding. To some extent, these things may indeed harm the left, but widespread ideology — the automatic assumption of capitalism’s unmitigated merit, for example — is just as big a problem. We must win the war of ideas before we can win the war of democracy.

The great Italian politician Antonio Gramsci was well aware of the lure of such cabalistic conspiracies, but also of their limitations, and his idea about cultural hegemony led him to advocate for educating the working class. This task is difficult, but it will lead to more substantial progress than simply explaining away failures by complaining about the influence of the wealthy. The rich certainly have different interests than the rest of us, but Gilens and Page note in an often overlooked passage of their oft-cited paper on “American oligarchy,”

The preferences of average citizens are positively and fairly highly correlated, across issues, with the preferences of economic elites.

Groups like the Chamber of Commerce and other business-oriented organizations, on the other hand, have preferences that do not correlate with the interests of the middle class. But even with that caveat, the left should not overstate the extent to which Americans agree with the leftist economic critique. In an apt description of the American ideology, John Steinbeck noted, “Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.”

Finally, Marx’s moral critique of capitalism and markets has never been fully comprehended or considered by anyone (other than the socialists, of course) but the most ardent libertarians and a strain of thinkers broadly called communitarians. Broadly speaking, Marx’s critique of capitalism resembles the Catholic church’s critique: That by relying on greed and self-interest, markets degrade humans and encourage our worst impulses. Marx quotes Shakespeare’s Timon of Athens:

This yellow slave
Will knit and break religions, bless the accursed;
Make the hoar leprosy adored, place thieves
And give them title, knee and approbation
With senators on the bench

Marx writes, riffing off of Shakespeare, “I  am bad, dishonest, unscrupulous, stupid; but money is honoured and therefore so is its possessors. Money is the supreme good, therefore its possessor is good.” Jesus warned that the love of money is the root of all evil. This fact seems self-evident. Religious critics of capitalism have noted this core delusion for decades. Economist and Catholic E. F. Schumacher writes,

Call a thing immoral or ugly, soul-destroying or a degradation to man, a peril to the peace of the world or to the well-being of future generations: as long as you have not shown it to be ‘uneconomic’ you have not really questioned its right to exist, grow, and prosper.

With the exception of libertarians, who have tried to turn the immorality of capitalism into a sort of perverse morality (“greed is good”), most politicians and economists are entirely unconcerned with the fact that capitalism is based on a collective drawing upon our deepest desire: to exploit.

The underlying logic of capitalism is that if we all take our most primordial impulses and mix them up in the magical mechanism called “markets,” we are left with progress. Recent history suggests we may be left with only more ugliness. As G. A. Cohen writes, “the immediate motive to productive activity in a market society is (not always but) typically some mixture of greed and fear.” The participants in market transactions are not interested in fulfilling human needs — they are interested in making a profit. Fulfilling human needs is one way to make a profit — exploitation, the creation of desire through advertising or downright fraud are others. Human progress is an ancillary consideration, individual profit is the goal. Today, speaking in moral terms is not incredibly popular — inequality is seen not as a moral issue in which a small class has a dangerous amount of power, but instead as an inefficiency to be corrected with a technocratic policy.

We don’t know for certain what Marx would say about the modern left. Its radicals often foster a poisonous aversion to pragmatism in favor of pious purity, its politicians are guilty of  wholesale abandonment of the working class, and many of its leading thinkers have succumbed to a dreadful technocratism. Marx failed to account for the adaptability of capitalism and left little in the way of alternatives. In the end, this void was filled by murderers and fools. Marx, a deeply humanistic thinker, would certainly have abhorred the violence in his name some half a century after his death. But rational people do not blame Christ for the Crusades, nor Muhammad for 9/11 nor Nietzsche for the Holocaust. The taboo of Marx has prevented the left from learning his most important lesson; in the words of Gil Scott-Heron, “the revolution will not be televised.”

Sean McElwee is a writer and researcher of public policy. His writing may be viewed at seanamcelwee.com. Follow him on Twitter at @seanmcelwee.

Posted by Portside on June 27, 2014
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Emphasis Mine

See: https://portside.org/2014-06-28/believe-it-or-not-karl-marx-making-comeback

Occupy Wall Street and its foes…

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Paul Krugman, NY Times (Losing Their Immunity)

“As the Occupy Wall Street movement continues to grow, the response from the movement’s targets has gradually changed: contemptuous dismissal has been replaced by whining. (A reader of my blog suggests that we start calling our ruling class the “kvetchocracy.”) The modern lords of finance look at the protesters and ask, Don’t they understand what we’ve done for the U.S. economy?

The answer is: yes, many of the protesters do understand what Wall Street and more generally the nation’s economic elite have done for us. And that’s why they’re protesting.

On Saturday The Times reported what people in the financial industry are saying privately about the protests. My favorite quote came from an unnamed money manager who declared, “Financial services are one of the last things we do in this country and do it well. Let’s embrace it.”

This is deeply unfair to American workers, who are good at lots of things, and could be even better if we made adequate investments in education and infrastructure. But to the extent that America has lagged in everything except financial services, shouldn’t the question be why, and whether it’s a trend we want to continue?

For the financialization of America wasn’t dictated by the invisible hand of the market. What caused the financial industry to grow much faster than the rest of the economy starting around 1980 was a series of deliberate policy choices, in particular a process of deregulation that continued right up to the eve of the 2008 crisis.

Not coincidentally, the era of an ever-growing financial industry was also an era of ever-growing inequality of income and wealth. Wall Street made a large direct contribution to economic polarization, because soaring incomes in finance accounted for a significant fraction of the rising share of the top 1 percent (and the top 0.1 percent, which accounts for most of the top 1 percent’s gains) in the nation’s income. More broadly, the same political forces that promoted financial deregulation fostered overall inequality in a variety of ways, undermining organized labor, doing away with the “outrage constraint” that used to limit executive paychecks, and more.

Oh, and taxes on the wealthy were, of course, sharply reduced.

All of this was supposed to be justified by results: the paychecks of the wizards of Wall Street were appropriate, we were told, because of the wonderful things they did. Somehow, however, that wonderfulness failed to trickle down to the rest of the nation — and that was true even before the crisis. Median family income, adjusted for inflation, grew only about a fifth as much between 1980 and 2007 as it did in the generation following World War II, even though the postwar economy was marked both by strict financial regulation and by much higher tax rates on the wealthy than anything currently under political discussion.

Then came the crisis, which proved that all those claims about how modern finance had reduced risk and made the system more stable were utter nonsense. Government bailouts were all that saved us from a financial meltdown as bad as or worse than the one that caused the Great Depression.

And what about the current situation? Wall Street pay has rebounded even as ordinary workers continue to suffer from high unemployment and falling real wages. Yet it’s harder than ever to see what, if anything, financiers are doing to earn that money.

Why, then, does Wall Street expect anyone to take its whining seriously? That money manager claiming that finance is the only thing America does well also complained that New York’s two Democratic senators aren’t on his side, declaring that “They need to understand who their constituency is.” Actually, they surely know very well who their constituency is — and even in New York, 16 out of 17 workers are employed by nonfinancial industries.

But he wasn’t really talking about voters, of course. He was talking about the one thing Wall Street still has plenty of thanks to those bailouts, despite its total loss of credibility: money.

Money talks in American politics, and what the financial industry’s money has been saying lately is that it will punish any politician who dares to criticize that industry’s behavior, no matter how gently — as evidenced by the way Wall Street money has now abandoned President Obama in favor of Mitt Romney. And this explains the industry’s shock over recent events.

You see, until a few weeks ago it seemed as if Wall Street had effectively bribed and bullied our political system into forgetting about that whole drawing lavish paychecks while destroying the world economy thing. Then, all of a sudden, some people insisted on bringing the subject up again.

And their outrage has found resonance with millions of Americans. No wonder Wall Street is whining.”

Emphasis Mine

see:http://www.nytimes.com/2011/10/17/opinion/krugman-wall-street-loses-its-immunity.html?_r=1

Our Capitalist System Is Near Meltdown

The ailing euro is part of a wider crisis. A 1930s-style crash threatens us and our financial partners. Collective action is the only solution.

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By Will Hutton, Guardian UK

“Eighty years ago, faced with today’s economic events, nobody would have been in any doubt: we would obviously be living through a crisis in capitalism. Instead, there is a collective unwillingness to call a spade a spade. This is variously a crisis of the European Union, a crisis of the euro, a debt crisis or a crisis of political will. It is all those things, but they are subplots of a much bigger story: the way capitalism has been conceived and practised for the last 30 years has hit the buffers. Unless and until that is recognised, western economies will be locked in stagnation which could even transmute into a major economic disaster.

Simply put, the world has trillions upon trillions of excessive private debt financed by too many different currencies whose risk is allegedly mitigated by even more trillions of financial bets which in aggregate do not minimise the systemic risk one iota. This entire financial edifice, underwritten by tiny amounts of capital, has been created over three decades backed by the theory that markets do not make mistakes. Capitalism is best conceived and practised, runs the theory, by hunter-gatherer bankers and entrepreneurs owing no allegiance to the state or society.

This is nonsense. Business and the state co-generate wealth in a system of complex mutual dependence. Markets are beset by mood swings and uncertainty which, if not offset by government action, lead to violent oscillations. Capitalism without responsibility or proportionality degrades into racketeering and exploitation. The prospect of limitless pay is an open invitation to bad, or even criminal, behaviour. Good capitalism cannot happen without referees to blow the whistle or robust frameworks in which markets can function; neither is reliably created by capitalism itself, hence the role of democratic government. Yet the world is trying to solve the legacy of the last 30 years as if none of this were true and, instead, that the practice and theories that created the mess are still valid.

US treasury secretary Tim Geithner, joining EU finance ministers in Poland as again they pondered how best to end the ongoing euro crisis, was at least recognising today’s interdependencies between countries when he urged his fellow ministers to stop bickering because the markets were terrified by the threat of a catastrophic event – with all the risk that posed the US.

George Osborne was also right to declare that a strong euro was in Britain’s interests. But worrying about how a failed euro might impact on yourself is old speak. What the markets need to hear is that western politicians – whether in the eurozone or not – see the euro as part of the potential solution to capitalism’s current crisis, not its cause, and that they are prepared to do all in their power to support the reforms necessary to make the euro survive and take other measures vital to make the world financial system functional again. Geithner and Osborne must put some money where their mouths are.

The euro’s critics, endlessly emphasising that it is a monetary straitjacket and that the best reform now would be its break-up, miss the point. It was not this so-called straitjacket that is the cause of today’s euro crisis. It is the interaction of the euro system with a once-in-a-century crisis of capitalism that its designers and supporters, like its critics, never anticipated. Yes, what the crisis has exposed is that the eurozone needed a ¤1trillion-plus fund to recapitalise bust banks and underwrite sovereign debt write-downs; this was not written into the original treaty. And that the investment and retail banking arms of the EU’s universal banks need to be ringfenced or formally separated, as Sir John Vickers‘s banking commission proposes for Britain – if they are to be remotely safe. But neither notion was a battle cry of the eurosceptics over the last 10 years.

In fact, the existence of the euro has, until now, been a bulwark against disaster. Suppose it had not been created and that the financial crisis in 2008 had broken over a Europe with multiple floating exchange rates and no European central bank – the eurosceptic utopia. The Irish, Portuguese, Greek, Spanish, Italian and French banking systems would have stood alone and they would have collapsed in a domino effect, interacting with the mega-crisis in Britain and the US. Even some German banks would not have been immune. There would have been a 1930s-scale slump, the break up of the EU and a rise in beggar-my-neighbour devaluations and trade protection.

We have not yet escaped that prospect. If the euro breaks up, the cascade of subsequent bank failures and debt write-downs will be no less threatening and Britain will be pulled into the vortex. The EU has created a “financial stabilisation facility” to try to hold the line. But there is no urgency in launching it; it is still not a proper fund but, rather, a stop-gap provider of borrowing facilities and it is too small. As bad, the German and French governments are wedded to collective European austerity; they want to impose long-term balanced budgets not only on themselves but chilling austerity on the unfortunate states which have to borrow to support their banks and bond markets.

An entire continent is to be blighted by lack of demand in the midst of a capitalist crisis, compounded by Britain’s scorched earth, deficit-reduction plans. Already, many European banks are technically insolvent, recognised by Christine Lagarde, the IMF’s new managing director, if not by the banks themselves.

Last week, the Bank of England joined the US Federal Reserve, the Bank of Japan and the Swiss central bank in promising Europe’s banks vital liquidity in dollars, easing the crisis for a while. Time has been bought; we are pitching in to save ourselves. But the outside world needs to go much further. Europe’s stabilisation facility must become a fund with a capacity to lend and intervene to see off speculators: Britain, the US, Switzerland and Japan, along with China and oil-rich Arab states, need to contribute alongside Germany.

In return for coming to the relief of the German taxpayer, we should demand two key concessions: one, that Europe sets about ringfencing its universal banks’ investment banking operations to make them less vulnerable; and second, that no international cash is forthcoming unless the EU commits to a formal plan for growth in which its stronger countries, notably Germany, promise to stimulate their economies. As part of the package, Britain should agree to defer its own deficit- reduction plans and to issue bonds denominated in euros to contribute to the new euro fund.

We are living through the most dangerous confluence of economic circumstances in modern times. Trying to pretend the interdependencies do not exist or that the collapse of the euro is the answer can only make matters worse. It is a straight choice: we do all we can to help each other or risk going down in what could be the worst economic contraction for a century.

Emphasis Mine

see:http://readersupportednews.org/opinion2/279-82/7486-our-capitalist-system-is-near-meltdown

5 Reasons Capitalism Has Failed

The root cause of our recent turmoil is the failure of the dominant economic paradigm — global corporate capitalism.

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By Bob Burnett, The Smirking Chimp, via AlterNet

(N.B.: Marx was right, after all…)

“We live in interesting times. The global economy is splintering. U.S. voters hate all politicians and there’s political unrest throughout the world. The root cause of this turmoil is the failure of the dominant economic paradigm — global corporate capitalism.

The modern world is ruled by multinational corporations and governed by a capitalistic ideology that believes: Corporations are a special breed of people, motivated solely by self-interest. Corporations seek to maximize return on capital by leveraging productivity and paying the least possible amount for taxes and labor. Corporate executives pledge allegiance to their directors and shareholders. The dominant corporate perspective is short term, the current financial quarter, and the dominant corporate ethic is greed, doing whatever it takes to maximize profit.

Five factors are responsible for the failure of global corporate capitalism. First, global corporations are too big. We’re living in the age of corporate dinosaurs. (The largest multinational is JP Morgan Chase with assets of $2 Trillion, 240,000 employees, and offices in 100 countries.) The original dinosaurs perished because their huge bodies possessed tiny brains. Modern dinosaurs are failing because their massive bureaucracies possess miniscule hearts.

Since the Reagan era global corporations have followed the path of least resistance to profit; they’ve swallowed up their competitors and created monopolies, which have produced humongous bureaucracies. In the short-term, scale helps corporations grow profitable, but in the long-term it makes them inflexible and difficult to manage. Gigantism creates a culture where workers are encouraged to take enormous risks in order to create greater profits; it’s based upon the notion that the corporation is “too big to fail.”

Second, global corporations disdain civil society. They’ve created a culture of organizational narcissism, where workers pledge allegiance to the enterprise. Corporate employees live in a bubble, where they log obscene hours and then vacation with their co-workers. Multinationals develop their own code of ethics and worldview separate from that of any national state. Corporate executives don’t care about the success or failure of any particular country, only the growth and profitability of their global corporation. (Many large corporations pay no U.S. income tax; in 2009 Exxon Mobil actually got a $156 M rebate.)

Third, global corporations are modern outlaws, living outside the law. There is noinvisible hand that regulates multinationals. In 1759 Philosopher Adam Smith argued that while wealthy individuals and corporations were motivated by self interest, an “invisible hand” was operating in the background ensuring that capitalist activities ultimately benefited society. In modern times this concept became the basis for the pronouncements of the Chicago School of Economics that markets were inherently self regulating. However, the last five years have demonstrated that there is no “invisible hand” — unregulated markets have spelled disaster for the average person. The “recovery” of 2009-10 ensured that “too big to fail” institutions would survive and the rich would continue to be rich. Meanwhile millions of good jobs were either eliminated or replaced by low-wage jobs with poor or no benefits.

Fourth, global corporations are ruining our natural capital. Four of the top 10 multinational corporations are energy companies, with Exxon Mobil leading the list. But there are many indications that our oil reserves are gone. Meanwhile, other forms of natural capital have been depleted — arable land, water, minerals, forests, fish, and so forth. Multinational corporations have treated the environment as a free resource. When the timberlands of North America began to be depleted, lumber corporations moved to South America and then Asia. Now, the “easy pickings” are gone. Global corporations have ravished the world and citizens of every nation live with the consequences: dirty air, foul water, and pollution of every sort.

Fifth, global corporations have angered the world community. The world GDP is $63 Trillion but multinational corporations garner a disproportionate share — with banks accounting for an estimated $4 trillion (bank assets are $100 trillion). Global black markets make $2 trillion — illegal drugs account for at least $300 billion. In many parts of the world, a worker is not able to earn a living wage, have a bank account or drive a car, but can always obtain drugs, sex, and weapons. And while the world may not be one big village in terms of lifestyle, it shares an image of “the good life” that’s proffered in movies, TV, and the Internet. That’s what teenagers in Afghanistan have in common with teenagers in England; they’ve been fed the same image of success in the global community and they know it’s inaccessible. They are angry and, ultimately, their anger has the same target — multinational corporations (and the governments that support them).

We live in interesting times. The good news is we’re witnessing the failure of global corporate capitalism. The bad news is we don’t know what will replace it.”

(N.B.: Perhaps we do – see peoplesworld.org)

Bob Burnett is a writer and activist in Berkeley, Calif.

Emphasis Mine

see:http://www.alternet.org/story/152118/5_reasons_capitalism_has_failed?page=entire