In case you were wondering where all the money went and why the economy is still in the doldrums, here are a couple of clues. “The 500 largest non-financial companies are sitting on $1.8 trillion in uninvested cash.” That’s a stat from Fareed Zakaria in Newsweek, quoted by Paul Buchheit in a 7/22 CommonDreams essay. The piece goes on to note that whereas the Republicans blame big government’s lavish spending on the poor, the truth is quite a different story: IRS figures report that “the richest 1% have TRIPLED their cut of America’s income pie” since 1980 (that’s when Reagan began cutting taxes for the rich, and blaming “welfare queens” and big government for everything). From taking 1 out of every 15 income dollars, the rich now take 3 of every 15 income dollars, or a TRILLION extra dollars a year. Put another way, instead of taking $7 of every $100 of America’s income, the rich now take $20 of every $100.
If this sounds like class war, it is, only it’s the rich doing the firing (literally).
Then there’s this, from Bob Herbert’s Sunday column. Top corporations (you know, the guys who have been declared to be “persons” by the Supreme Court, and thereby free to pour as much money—it’s free speech!—as they like into buying politicians) have been using the economic collapse to fire workers in droves. Those who are left are forced to take pay cuts, or else. Here are the stats:
“from the 4th quarter of 2007 to the 4th quarter of 2009, real aggregate output in the U.S., as measured by GDP, fell by about 2.5% but employers cut their payrolls by 6%.”
Worse, when the economy started to rebound (due to that evil government stimulation), the corporations somehow forgot to start hiring again. Herbert quotes economics Prof. Andrew Sum this way:
“At the end of the 4th quarter in 2008, you see corporate profits begin to really take off, and they grow by the time you get to the first quarter of 2010 by $572 billion. And over that same time period, wage and salary payments go DOWN by $122 billion.”
In other words, the corporations are “making out like bandits” and, as Fakaria noted, sitting on mountains of cash, saved from not rehiring workers. As Prof. Sum writes: this economic recovery “has seen the most lopsided gains in corporate profits relative to real wages and salaries in our history.”
Meantime, the Republicans blame Obama and the Democrats for a “jobless” recovery (demanding lower taxes to stimulate hiring; more “trickle-down”—that’s what we need!). And the electorate appears ready to do the same thing.
Isn’t our capitalist democracy a wonder?
Lawrence DiStasi
Showing posts with label fundamentalist capitalism. Show all posts
Showing posts with label fundamentalist capitalism. Show all posts
Wednesday, August 04, 2010
Sunday, March 21, 2010
Moral Economics
The financial crisis in the world, (and “crisis” is a soft term; many call it a “collapse” or an “explosion”), has stimulated renewed thought about what is wrong not only with our financial system, but with the entire system of so-called free-market capitalism that has dominated our planet since the fall of Russian communism, and for centuries before. Works like the essays and talks of Kamran Mofid, the recent book by Curtis White (The Barbaric Heart: Faith, Money, and the Crisis of Nature, 2009), and the ongoing series of projects by Michael Albert of Z-Net (Participatory Economics) and Joel Kovel (Eco-Socialism), are some of the many initiatives in this direction. Here I’d like to focus on just two—the writings of Curtis White and Kamran Mofid—because they seem to dovetail into a common diagnosis of what’s wrong, and a common cure: a new infusion of morality, via spiritual and/or aesthetic means, into our economic and social life.
What this suggests is what many have analyzed as being at the heart of the aforementioned collapse: a complete lack of moral or ethical constraints in the hearts and minds of those, mainly bankers and traders on Wall Street, who knowingly engaged in practices that nearly brought down the entire system. With no concern for anything beyond their own enrichment, such people and institutions made a mockery of the so-called “invisible hand” of the free market that was supposed to regulate economic behavior (the failure of government agencies to pass and enforce regulation can be seen as yet another sign of this moral failure.). Hence the search for a new moral basis for human activity, one that would go beyond the idea that has reigned in the recent past—that humans are rational actors simply and exclusively motivated by the desire for money to obtain the goods that alone signify well-being and security. Aside from the fact that real security is impossible in a constantly changing world, the problem raised by both White and Mofid is that humans are far more than economic beings; they are equally, if not moreso, relational, moral and aesthetic beings. Any system, like capitalism, that ignores or denies these aspects of humanity—the reason for the denial being that taking morality or beauty into account would put capitalists at a disadvantage in the race for profits—is falsifying human life and leading humans and all other beings to disaster. As White puts it: “What is potentially fatal about our current situation is that in it an economic system has become the entirety of the social system.” And clearly, the crisis in the ecology of the planet, the degradation of land, oceans, and the atmosphere itself, much of it due to industrial practices in the service of capitalism, greatly increases the conviction that something in the system is seriously out of whack.
To begin with Kamran Mofid (see www.globalisationforthecommongood.info/) , his approach is basically to critique capitalism’s disregard for individuals, for cultures and civilizations that differ from those of the advanced industrial nations and their promotion of the neoliberal agenda of privatization, deregulation, low taxation, and free trade. Both a trained economist and a minister, he calls for a new kind of “ethical capitalism.” By this he means one that would have to answer questions such as: What (other than rampant consumerism and endless growth) is the source of happiness and well-being? What does it mean to be a human being living on a spaceship with finite resources? How can the global financial system become more responsive and just? How can the world make the global trade system more equitable and sustainable? How can society overcome poverty and scarcity with limited global resources? What religious or spiritual variables should be considered in economic/business ethics and economic behavior? The basic idea is that through training, both at the university and lower educational levels, humans might be educated to see that, first, the idea of a value-free economics is false. The morality that should undergird economics, and everything else, is the Golden Rule: Do unto others (including non-human others) as you would have them do to you. With humanity respected as the center of creation, the goal of any economy would then be to sustainably improve human well-being and quality of life, always taking account of the fact that real biophysical limits exist to the expansion of the market economy. With this in mind, Mofid argues that the earth needs something like the central reserve banks to look after “shares of the Earth’s ecological capacity, not just interest rates and the money supply.” An economy founded on and regulated by such principles, Mofid argues, would recognize the rights of all humans and all species to their place in the biosphere. In this effort, scientists morally committed to protecting the global commons would receive priority for research funds. The question, of course, reduces to a simple one: could such measures make possible an ethical, profitable, efficient and sustainable capitalism?
Where Mofid seems driven by a vision that capitalism might be morally brought under control, Curtis White, while also considering this question, moves well beyond it. As an environmentalist (he is first and foremost a professor of English in Illinois), White argues that the environmental movement, in its search for “sustainable” fixes to the capitalist system, is actually mitigating and even excusing the worst excesses of capitalism. It is operating under the illusion (the lies it tells itself) that it can reach an “accommodation with that form of market economics that we call capitalism.” White, in virtually every chapter, undermines and refutes that illusion. Capitalism, he says, has its own ethical core, and to deviate from it would make it no longer capitalism. Much of his critique demonstrates what that ethical core of capitalism—animated by the “Barbarian Heart” of his title—really is. Though each one of us has an element of this within us, modern capitalism embodies it most nakedly as “the willingness to pursue self-interest through violence with the hope of plunder while being steadfastly indifferent to the consequences of its activities for others, and, especially, for the natural world…” Herein lie the core values of a system we all recognize, and whose truth was demonstrated to us most vividly in the last few years: self-interest, violence and plunder, and indifference to the consequences of its actions to life and the planet itself. White presents us with telling examples of this: Goldman Sachs persuading AIG to sell it credit default swaps (insurance on its wild, sub-prime bets), knowing full well that a collapse was coming and that in the coming collapse, these debts owed by AIG would bring it and possibly the whole financial system down; the 2007 decision of British Petroleum to reverse its announced “green” policy by agreeing to develop 54,000 square miles of virgin Canadian forest to extract oil from tar sands, knowing full well that the CO2 released (100 million tons annually) would keep Canada from meeting its Kyoto targets, and knowing also that ground water pollution would be so extensive that tailing ponds to hold it would cover 20 square miles; the huge dead zone in the Gulf of Mexico, created by pesticide runoff from corn farms draining into the Mississippi River, thus creating a downstream graveyard of crabs, shrimp, fish and all the once-rich marine life of the Gulf. White then points out how such decisions relate to capitalism’s reigning creed: profit is not simply an option, it is a non-negotiable demand; and what modern capitalism has excelled at in its compulsive and compulsory race for profits is the distancing of the violence this involves: “ the genius of capitalism’s unique form of barbarity is that the effects of its pillaging are usually at a distance.” What farmer in Illinois, that is, when he plants his corn in April, considers the resultant “crab holocaust” in the Gulf of Mexico? What corporation cares about the pollution or worker deaths arising from its operations in China or Mexico or Haiti?
White, then, sees no future in trying to modify or ameliorate the damage done by capitalism; it is genetically, fatally flawed. For even on its own terms, capitalism—which loves to call itself “free-market capitalism”—violates its own free-market principles, and misrepresents its own founders like Adam Smith. Smith, White reminds us, wrote in large part to urge that capitalism’s excesses needed to be controlled; it was for this reason that he urged that corporations compete with each other, i.e., so that they might be diverted from directing their violence and pillage at workers and consumers, and for the State to control capitalism’s monopolistic tendencies. More telling is White’s argument that, though conservatives love to extol the virtues of free markets and personal responsibility, both turn out to be myths. The capitalist world is one in which no one takes responsibility for anything: your mortgage is too big for your income? your car is unsafe at any speed? too bad. Caveat emptor. As for “free” markets, White points out that the real truth is that everyone fears them: “a pension plan is a strategic retreat from the Market God, a look to the time when one is free from its “capriciousness and cruelty.” As for corporations, “the very point of a corporation is to achieve some degree of price control and not be exposed to the famous invisible, dead hand of the pitiless market.” Though White doesn’t mention corporations like Halliburton or Boeing or any of the pirates who lobby for military contracts so as to be free from bidding mistakes (read ‘cost overruns,’ as in the current doubling of the cost of the F-35 Fighter, built by Lockheed Martin, to over $100 million each!), their allergy to and avoidance of their beloved free market has long been legendary.
White also takes on “externalities,” capitalism’s term for those consequences of its operations that it refuses to take responsibility for. But it is not simply the well-known externalities of the rape of the natural world, the removal of whole mountaintops to mine coal, the pollution of ground water and the choking of oceans with islands of plastic White attends to. For him, poverty and war are also capitalism’s “externalities:”
“Poverty is not a fact of nature, it too is an externality. It is and always has been a product of economic systems, and that has been so since the earliest slave economics of the ancient world, the feudal peasant economies of the Middle Ages, the colonial economies of the eighteenth and nineteenth centuries, and the wage-based economies of the last two centuries….It [capitalism] is maintaining poverty as a necessity of its own economic structures. As David Ricardo, the pioneering economist, said in 1920, “There is no way of keeping profits up but by keeping wages down.” Similarly, war is not a decision made by political leaders purely out of a desire to protect the lives of citizens. It is an economic necessity for those who feel that—in the case of Iraq—not to have war would result in the loss of control over natural resources, markets, production capacity, and ultimately profits.”
And of course, though their hero Adam Smith argued that the State’s proper function was to regulate corporations so that their tendencies to maximize profits through monopolies and wage slavery could be controlled, White points out that in our modern capitalist democracy, corporations and their lobbying armies “seek to undercut legitimate state function as Smith presented it by essentially buying up the state by, specifically, making politicians dependent on corporate campaign contributions.” The recent Supreme Court decision can only make this “buying up of the state” many times worse.
The result is that pleading with corporations to help save the redwoods or reduce carbon emissions is like spitting into the wind. What environmentalists should be working toward, in White’s view, is a complete reversal of the system, including the ethic that has made money the measure of all things: “Money under capitalism represents a fundamental inversion of value. Instead of money representing things, things come to represent so much money.” What environmentalists, all of us, should be working towards is an inversion of the money inversion: trying to create a culture in which things—valuable things, beautiful things, natural things—are more important than money.
Here is where White’s prescription comes in—though it should be said that he is not as sanguine as this might make him sound. He admits that all of us, not just capitalists, are endowed with a Barbaric Heart. The solution, then, lies in the human heart, in reversing the “spiritual impoverishment” that has reigned during the last 200 years of industrial capitalism. Rather than allowing ourselves to be treated like “automatons” (the industrial production line, not to mention the modern office cubicle, does just this), humans must confront/replace the economic “beast” with something like beauty, or spirit, the dignity of “things”. As White puts it, “environmentalism should look to create a common language of Care (a reverence for and commitment to the astonishing fact of Being) through which it could begin to create alternative principles by which we might live.” And here, as noted above, White’s prescriptions, though more radical and pessimistic, begin to jibe with those of Kamran Mofid noted above. Such principles of life would answer questions like: “What does it mean to be a human being? What is my relation to other human beings? What is my relation to Being as such, the ongoing miracle that there is something rather than nothing?” This cannot be done easily. It will require insistence and refusal—“refusal to be mere creatures, mere functions of a system we cannot in good conscience defend.” In this, one hears echoes of another radical who, in December of 1964, stood in Sproul Plaza in Berkeley California, and said something similar:
“There is a time when the operation of the machine becomes so odious, makes you so sick at heart, that you can't take part; you can't even passively take part, and you've got to put your bodies upon the gears and upon the wheels, upon the levers, upon all the apparatus, and you've got to make it stop. And you've got to indicate to the people who run it, to the people who own it, that unless you're free, the machine will be prevented from working at all!”
Though Curtis White is not Mario Savio, and the 1960s have long since passed into legend, his message is similar. The workings of the capitalist machine, workings that it cannot change, have become odious, with the humans operating under the system allowing themselves to be shaped in its image, ethically, morally, spiritually. Such a distortion of humanity can only be done when humans lie to themselves. For White, that is the key: the lying and self-deception must stop. That is what he dedicates his book to—the end of lying—by the government and its business cronies, by the environmental movement, and by all of us individually and collectively. The first move in that larger, and, it must be said, daunting project, must be the end of self-deception—both about our complicity, and about what is at stake if we allow the beast to go unchallenged.
Lawrence DiStasi
What this suggests is what many have analyzed as being at the heart of the aforementioned collapse: a complete lack of moral or ethical constraints in the hearts and minds of those, mainly bankers and traders on Wall Street, who knowingly engaged in practices that nearly brought down the entire system. With no concern for anything beyond their own enrichment, such people and institutions made a mockery of the so-called “invisible hand” of the free market that was supposed to regulate economic behavior (the failure of government agencies to pass and enforce regulation can be seen as yet another sign of this moral failure.). Hence the search for a new moral basis for human activity, one that would go beyond the idea that has reigned in the recent past—that humans are rational actors simply and exclusively motivated by the desire for money to obtain the goods that alone signify well-being and security. Aside from the fact that real security is impossible in a constantly changing world, the problem raised by both White and Mofid is that humans are far more than economic beings; they are equally, if not moreso, relational, moral and aesthetic beings. Any system, like capitalism, that ignores or denies these aspects of humanity—the reason for the denial being that taking morality or beauty into account would put capitalists at a disadvantage in the race for profits—is falsifying human life and leading humans and all other beings to disaster. As White puts it: “What is potentially fatal about our current situation is that in it an economic system has become the entirety of the social system.” And clearly, the crisis in the ecology of the planet, the degradation of land, oceans, and the atmosphere itself, much of it due to industrial practices in the service of capitalism, greatly increases the conviction that something in the system is seriously out of whack.
To begin with Kamran Mofid (see www.globalisationforthecommongood.info/)
Where Mofid seems driven by a vision that capitalism might be morally brought under control, Curtis White, while also considering this question, moves well beyond it. As an environmentalist (he is first and foremost a professor of English in Illinois), White argues that the environmental movement, in its search for “sustainable” fixes to the capitalist system, is actually mitigating and even excusing the worst excesses of capitalism. It is operating under the illusion (the lies it tells itself) that it can reach an “accommodation with that form of market economics that we call capitalism.” White, in virtually every chapter, undermines and refutes that illusion. Capitalism, he says, has its own ethical core, and to deviate from it would make it no longer capitalism. Much of his critique demonstrates what that ethical core of capitalism—animated by the “Barbarian Heart” of his title—really is. Though each one of us has an element of this within us, modern capitalism embodies it most nakedly as “the willingness to pursue self-interest through violence with the hope of plunder while being steadfastly indifferent to the consequences of its activities for others, and, especially, for the natural world…” Herein lie the core values of a system we all recognize, and whose truth was demonstrated to us most vividly in the last few years: self-interest, violence and plunder, and indifference to the consequences of its actions to life and the planet itself. White presents us with telling examples of this: Goldman Sachs persuading AIG to sell it credit default swaps (insurance on its wild, sub-prime bets), knowing full well that a collapse was coming and that in the coming collapse, these debts owed by AIG would bring it and possibly the whole financial system down; the 2007 decision of British Petroleum to reverse its announced “green” policy by agreeing to develop 54,000 square miles of virgin Canadian forest to extract oil from tar sands, knowing full well that the CO2 released (100 million tons annually) would keep Canada from meeting its Kyoto targets, and knowing also that ground water pollution would be so extensive that tailing ponds to hold it would cover 20 square miles; the huge dead zone in the Gulf of Mexico, created by pesticide runoff from corn farms draining into the Mississippi River, thus creating a downstream graveyard of crabs, shrimp, fish and all the once-rich marine life of the Gulf. White then points out how such decisions relate to capitalism’s reigning creed: profit is not simply an option, it is a non-negotiable demand; and what modern capitalism has excelled at in its compulsive and compulsory race for profits is the distancing of the violence this involves: “ the genius of capitalism’s unique form of barbarity is that the effects of its pillaging are usually at a distance.” What farmer in Illinois, that is, when he plants his corn in April, considers the resultant “crab holocaust” in the Gulf of Mexico? What corporation cares about the pollution or worker deaths arising from its operations in China or Mexico or Haiti?
White, then, sees no future in trying to modify or ameliorate the damage done by capitalism; it is genetically, fatally flawed. For even on its own terms, capitalism—which loves to call itself “free-market capitalism”—violates its own free-market principles, and misrepresents its own founders like Adam Smith. Smith, White reminds us, wrote in large part to urge that capitalism’s excesses needed to be controlled; it was for this reason that he urged that corporations compete with each other, i.e., so that they might be diverted from directing their violence and pillage at workers and consumers, and for the State to control capitalism’s monopolistic tendencies. More telling is White’s argument that, though conservatives love to extol the virtues of free markets and personal responsibility, both turn out to be myths. The capitalist world is one in which no one takes responsibility for anything: your mortgage is too big for your income? your car is unsafe at any speed? too bad. Caveat emptor. As for “free” markets, White points out that the real truth is that everyone fears them: “a pension plan is a strategic retreat from the Market God, a look to the time when one is free from its “capriciousness and cruelty.” As for corporations, “the very point of a corporation is to achieve some degree of price control and not be exposed to the famous invisible, dead hand of the pitiless market.” Though White doesn’t mention corporations like Halliburton or Boeing or any of the pirates who lobby for military contracts so as to be free from bidding mistakes (read ‘cost overruns,’ as in the current doubling of the cost of the F-35 Fighter, built by Lockheed Martin, to over $100 million each!), their allergy to and avoidance of their beloved free market has long been legendary.
White also takes on “externalities,” capitalism’s term for those consequences of its operations that it refuses to take responsibility for. But it is not simply the well-known externalities of the rape of the natural world, the removal of whole mountaintops to mine coal, the pollution of ground water and the choking of oceans with islands of plastic White attends to. For him, poverty and war are also capitalism’s “externalities:”
“Poverty is not a fact of nature, it too is an externality. It is and always has been a product of economic systems, and that has been so since the earliest slave economics of the ancient world, the feudal peasant economies of the Middle Ages, the colonial economies of the eighteenth and nineteenth centuries, and the wage-based economies of the last two centuries….It [capitalism] is maintaining poverty as a necessity of its own economic structures. As David Ricardo, the pioneering economist, said in 1920, “There is no way of keeping profits up but by keeping wages down.” Similarly, war is not a decision made by political leaders purely out of a desire to protect the lives of citizens. It is an economic necessity for those who feel that—in the case of Iraq—not to have war would result in the loss of control over natural resources, markets, production capacity, and ultimately profits.”
And of course, though their hero Adam Smith argued that the State’s proper function was to regulate corporations so that their tendencies to maximize profits through monopolies and wage slavery could be controlled, White points out that in our modern capitalist democracy, corporations and their lobbying armies “seek to undercut legitimate state function as Smith presented it by essentially buying up the state by, specifically, making politicians dependent on corporate campaign contributions.” The recent Supreme Court decision can only make this “buying up of the state” many times worse.
The result is that pleading with corporations to help save the redwoods or reduce carbon emissions is like spitting into the wind. What environmentalists should be working toward, in White’s view, is a complete reversal of the system, including the ethic that has made money the measure of all things: “Money under capitalism represents a fundamental inversion of value. Instead of money representing things, things come to represent so much money.” What environmentalists, all of us, should be working towards is an inversion of the money inversion: trying to create a culture in which things—valuable things, beautiful things, natural things—are more important than money.
Here is where White’s prescription comes in—though it should be said that he is not as sanguine as this might make him sound. He admits that all of us, not just capitalists, are endowed with a Barbaric Heart. The solution, then, lies in the human heart, in reversing the “spiritual impoverishment” that has reigned during the last 200 years of industrial capitalism. Rather than allowing ourselves to be treated like “automatons” (the industrial production line, not to mention the modern office cubicle, does just this), humans must confront/replace the economic “beast” with something like beauty, or spirit, the dignity of “things”. As White puts it, “environmentalism should look to create a common language of Care (a reverence for and commitment to the astonishing fact of Being) through which it could begin to create alternative principles by which we might live.” And here, as noted above, White’s prescriptions, though more radical and pessimistic, begin to jibe with those of Kamran Mofid noted above. Such principles of life would answer questions like: “What does it mean to be a human being? What is my relation to other human beings? What is my relation to Being as such, the ongoing miracle that there is something rather than nothing?” This cannot be done easily. It will require insistence and refusal—“refusal to be mere creatures, mere functions of a system we cannot in good conscience defend.” In this, one hears echoes of another radical who, in December of 1964, stood in Sproul Plaza in Berkeley California, and said something similar:
“There is a time when the operation of the machine becomes so odious, makes you so sick at heart, that you can't take part; you can't even passively take part, and you've got to put your bodies upon the gears and upon the wheels, upon the levers, upon all the apparatus, and you've got to make it stop. And you've got to indicate to the people who run it, to the people who own it, that unless you're free, the machine will be prevented from working at all!”
Though Curtis White is not Mario Savio, and the 1960s have long since passed into legend, his message is similar. The workings of the capitalist machine, workings that it cannot change, have become odious, with the humans operating under the system allowing themselves to be shaped in its image, ethically, morally, spiritually. Such a distortion of humanity can only be done when humans lie to themselves. For White, that is the key: the lying and self-deception must stop. That is what he dedicates his book to—the end of lying—by the government and its business cronies, by the environmental movement, and by all of us individually and collectively. The first move in that larger, and, it must be said, daunting project, must be the end of self-deception—both about our complicity, and about what is at stake if we allow the beast to go unchallenged.
Lawrence DiStasi
Saturday, October 18, 2008
Shock Doc
I’ve been reading Naomi Klein’s truly shocking book, The Shock Doctrine. Everyone should read it without delay. For not only does it tell a riveting tale about an overarching plan hatched by the right wing in this country for the last 40 years or so, but it helps make sense of the economic turmoil now facing this nation and the world. It also points out that while the Left has focused its attention on the peril it has seen in political violence and war, the Right has focused on “free market” economics and the real control and profits it provides to those in power. Lastly, it tells us how the 9/11 attacks have been used by the Right to “shock” us all into compliance (see www.ae911truth.org
To put it briefly, the right wing objective for more than 40 years has been to foist a fundamentalist version of capitalism—Milton Friedman’s purist version of “free market” capitalism—on the world. This is the system espoused by Friedman and his “Chicago boys” at the University of Chicago. It is a system that argues that all government interference in the economy is evil, especially the social programs (social security, public housing, government regulations on banks, government-run building programs) that Franklin Roosevelt instituted to end the Great Depression, and that many third world governments instituted to ameliorate the misery of their impoverished masses. Rather, the Chicago plan urges the privatization of all nationalized industries (especially oil, but also water, power, and so on), the elimination of all social programs designed to help the poor, and the opening of every country to “free trade.” Of course, when such purifying “surgery” is administered to a country rapidly, the pain and misery of the population increases dramatically. Therefore, Friedman argued, a shock is needed to instill fear in the people, and force them and the government to accept the harsh medicine, often called “structural adjustment” when implemented by the IMF and the World Bank. Klein quotes Milton Friedman’s statement in 1982 about the necessity of crisis or shock to implement such ideas:
“Only a crisis—actual or perceived—produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.”
Klein’s book then leads us through the countries to whom this “free market” medicine has been applied in recent years: Chile, Argentina, Uruguay, Brazil, Bolivia, as well as China, Russia, South Africa, and more recently the United States itself. In almost every case, the medicine is initially rejected as too harsh—rejected, that is, until a shock either occurs from the outside, or is initiated by the government. In every case, as well, the necessity for either a dictator or some form of police state is required to force people to accept the pain. The preferred method, and according to Klein, the virtual twin of such programs, is torture. In Chile, for example, the coup which killed the democratically-elected president, Salvador Allende, and installed as dictator Augusto Pinochet, was the necessary precursor to the transition to free market capitalism. The road to this coup, however, was paved in prior years by a crew of Chileans studying with Friedman at the University of Chicago (the Chicago Boys), a crew which returned to await the chance to implement their policies. The road was also paved by the CIA in helping to overturn the elected government, as well as in the training it supplied in the best methods of counter-insurgency and torture. Once Pinochet seized power, he immediately began to “disappear” people—either dropping them from planes into the ocean or depositing them in torture chambers. In either case, most were never heard from again. And the targets were not only political leaders on the left, but also union leaders of every kind (destroying unions has been a key element of the “free market” program: think Reagan and the firing of 14,000 air traffic controllers). Such killings were not kept secret: the public demonstrations of repression were necessary to send the message that anyone who opposed the new regime did so under threat of death. Thousands left the country, while thousands more—including some of the most prominent figures in the nation like the composer/singer Victor Jara—were eliminated. In sum, Chile endured three complementary forms of shock: the shock of the military coup; the capitalist shock treatment to the economy; and the shock of the CIA-codified torture chamber meant to destroy the left-leaning culture itself. The result was then referred to, especially in the United States, as the Chilean Economic Miracle.
Of course, what the promoters of this “miracle” never mention is that in fact, the Chicago-inspired shock therapy actually resulted in economic disaster: Chile’s economy crashed in 1982, its debt exploded, it faced hyperinflation, and its unemployment reached 30%, ten times higher than under Allende. Neither do they note that in response, Pinochet was forced to emulate the leader he had killed, and nationalize many of the companies in trouble (he never had to re-nationalize Chile’s biggest industry, copper, because he had never de-nationalized it in the first place.) And even with the economic growth that followed, more than 45% of the population fell below the poverty line, while the richest 10% of Chileans saw their incomes rise by almost 100%. In other words, the free-market “miracle” did what it has done elsewhere, including the United States: it transferred enormous wealth from the poor and middle classes to the very rich (Joseph Giannone of Reuters wrote on Sept. 4, 2008, that “the top 1 percent of all households owned 35% of the world’s wealth last year. Meanwhile, the top 0.001 percent, ultra-rich households holding at least $5 million in assets, commanded $21 trillion—1/5 of the world’s wealth.”)
This really gets to an underlying thesis of Klein’s book. In each country, the violence against the populace becomes the focus of those opposing the dictator or the dictatorial government. However, the violence is never the goal, but only the means. Klein quotes Claudia Acuna, an Argentine journalist, on the government that “disappeared” so many thousands: “Their human rights violations were so outrageous, so incredible, that stopping them of course became the priority. But while we were able to destroy the secret torture centers, what we couldn’t destroy was the economic program…” The truth pointed out by Klein is that far more lives were stolen by “planned misery” than by bullets:
“…what happened in the Southern Cone of Latin America in the seventies is that it was treated as a murder scene when it was, in fact, the site of an extraordinarily violent armed robbery.”
In other words, torture is not meant to extract information, as is commonly stated, but rather is a “means of terrorizing and controlling populations.” It is a means to seize from millions of people what they absolutely require to live with minimal dignity, and would never give up willingly. That this is so can be seen in South Africa. There, the apartheid government “gave” political freedom to Nelson Mandela and the black majority. But while Mandela’s government, the ANC, was focusing on political matters so it could redistribute land and wealth, the white power structure was ensuring that economic power remained with them: the ANC was saddled with the enormous debt of the rulers who had oppressed it, and with paying the pensions of the very officials that had maintained the apartheid system. Further, it became crystal clear that any attempt to renege on those debts or nationalize industries such as mining would cause international investors to withdraw from South Africa and plunge the country into depression. The ANC was, and is trapped, and the majority of South Africans are worse off than ever.
Many readers would find all this information about “them” interesting, if not compelling. What Klein points out, however, is that the “them” is now “us.” With underdeveloped nations increasingly closing their doors to U.S. privatization schemes, U.S. conservatives saw that the profits of privatization in the new century would have to come from within. Consider the announced plans of our recently- departed Secretary of Defense, Donald Rumsfeld. This corporate CEO, with a reputed fortune of $250 million, cared little about how best to protect the nation; rather, his primary interest was in reforming the Pentagon bureaucracy—but NOT to save money or increase efficiency. It was to privatize the biggest agency of the United States government. The military, said Rumsfeld, should reduce its focus to warfighting alone…whereas “in all other cases, we should seek (private) suppliers who can provide these non-core activities…” Such suppliers could do everything from cutting DOD checks to running its warehouses to picking up its garbage to providing housing for soldiers to providing computer systems. And as Jeremy Scahill points out in Blackwater: The Rise of the World’s Most Powerful Mercenary Army, the drive to privatize the military and outsource its traditional functions did not stop with providing clean laundry and Burger Kings at army bases; it was extended to include protection for military leaders and visiting dignitaries, and even to implementing torture (always termed ‘information gathering’) in places like Abu Ghraib.
Thus, Rumsfeld and his protégé Cheney became the point men not so much in downsizing the United States government that they largely ran for the first 6 years of the Bush administration, but rather in creating a corporate bonanza for their corporate friends and cronies such as Cheney’s Halliburton and Rumsfeld’s Gilead Sciences (maker of Tamiflu, the preferred drug for avian flu, which Rummie expected, when the next flu epidemic hit, to turn into a cash cow of unprecedented proportions). Privatizing and outsourcing were the key policies, and the Gold Dust Twins were already masters of these policies by the time they got to the Bush administration. Under Cheney’s 5-year reign in the 1990s, for example, Halliburton’s take from the U.S. Treasury ballooned by almost 100%---from $1.2 billion to $2.3 billion—while its federal loans and guarantees “increased fifteenfold.” God only knows what Halliburton, now super-enriched by its contracts in Iraq, has been raking in since then.
There is far more detail in Klein’s book, but the essence is this: The real agenda of the Right since at least the Reagan administration has been not repression and war so much, but an increasing economic stranglehold over the world and its resources. War, violence, spying, torture are only the necessary means to this end. And the corollary truth—which stems from the guru, Milton Friedman himself—is that only a crisis, only deeply disorienting shocks to a national body, can make a population accept the kind of economic pain that goes along with such theft. Everyone now knows what those shocks have been in the last 8 years: the attacks of 9/11, the so-called war on terror, the drowning of New Orleans, and now, the financial meltdown. And it is sobering if not frightening to realize that the most recent shock—the financial one—has done its job perfectly. The United States Congress, even in the face of massive outrage from its constituents, finally succumbed to the shock therapy, and agreed to the massive bailouts for the very banks and CEOs whose policies and thefts were responsible for the collapse in the first place.
Read Naomi Klein’s book. You may not be glad you did, but you’ll certainly be better equipped to comprehend the public fleecing you’ve been enduring for years.
Lawrence DiStasi
addendum on joe the so-called plumber, from the Daily Kos:
The facts - as even the reluctant to bother actually doing reporting Corporate Media have revealed - are that: Joe The Plumber only makes $40,000 a year, doesn't have a valid plumbers license in the state of Ohio, has only been a "plumber" for 6 years - not 15, has never finished his plumber courses, has never apprenticed as a plumber, can't afford to buy his bosses business - which only generates $100,000 a year in income Profit, not $250,000 - is a registered republican who owes over a $1,000 in back taxes, and under any version of Obama's plan would get a tax cut that would be larger than McCain's.
His (first) Name isn't even Joe - It's SAM!
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