If you have opinions about the subject matter of posts on this blog please share them. Do you have a story about how the system affects you at work school or home, or just in general? This is a place to share it.
I have not read any of Richard Wolff's books but I really appreciate his explanations of Marx and Engels economic views and in particular of how the capitalist system works. I am not familiar enough to speak about his solution or how he sees the transformation of society from a free market system to a democratic socialist economic and political system. He has talked of worker collectives developing within the market system and stuff like that and that doesn't ring well with me but as I say I would have to find out more.
Here Wolff talks of all the criticisms and barriers thrown against Marx's labor theory of value and his critique of capitalism by those whose interests are advanced by maintaining that system. As a ruling class, they not only own the use of the worker's labor power, they direct it organize it and so on. But the means of production and the use of labor power is not all they own. They also own the means of communication, or as Marx put it in The German Ideology, they own the means of producing the dominant ideas or ideology in society. The universities, the education system, the mass media, are all their tools.
In the feudal state, the dominant ideology was that the King was king by god's will. We all know of the Divine Right of Kings. Well that idea did not have its origins in the brain of the peasant or serf. That ideology was wrecked in England when Cromwell cut the king's head off and god didn't do too much about it proving that it was a myth propagated by the class that benefited from it including the religious authorities.
What I would like and I doubt I'll get my wish. Is that many of the folks I have worked with throughout my life would watch and listen to this and even more that they would be willing to get together and discuss it, ask questions, raise how things can change or what Marx might have said about social transformation.
Wolff exposes many of the myths of capitalism in this. He makes Marx easy and Marx's views of how the world works are easy for workers to grasp because they correspond to objective reality.
“If there was no intervention today, gilt yields could have gone
up to 7-8 per cent from 4.5 per cent this morning and in that situation
around 90 per cent of UK pension funds would have run out of
collateral… They would have been wiped out.” So says a UK bond trader yesterday.
A liquidity crisis erupted in British bond markets after the
announcement by the new right-wing Conservative government that it would
spend up to £60bn to maintain and energy price cap for householders for
up to two years, subsidise business energy costs AND also cut corporate
and income taxes. The total hit from this largesse (mainly to the
rich) to the UK public debt level over the next few years has been
estimated at over £400bn or nearly 20% of GDP. With UK public debt
already at 100% of GDP, that sounded the death knell for the UK bond
prices. Yields (interest rate) surged.
UK ten-year govt bond yield (%)
Alongside this, the Bank of England plans to hike interest rates yet
further over the next year to ‘control’ inflation. So the cost of
borrowing and servicing debt is rocketing. Suddenly, investors holding
government bonds were facing serious losses, particularly pension funds
that tend to invest on long-term bonds using short-term interest rates
to borrow – short-term interest rates up; long-term bond prices down.
That’s a mismatch on asset values and a credit liquidity squeeze was on.
In the case of the UK, apparently pension funds and others had been
employing yet another piece of financial jiggery-pokery called
“liability-driven investment” schemes . This was the practice of buying
bonds that are then used as collateral for loans to purchase more bonds –
as much as £1.5trn over the last decade since the global financial
crash. If the value of the bonds used for collateral drop like a stone,
as they have just done, then the ability to borrow vanishes. So the
BoE has been forced to loan £65bn to such bond holders to bail them out
of their Ponzi scheme.
And it was not just in the UK with its crazy government. Even in the
US, with supposedly a ‘sensible’ administration that is not cutting
taxes or funding price caps, the credit squeeze is also there. The
$24tn US treasury market has been hit with its most severe bout of
turbulence since the coronavirus crisis, underscoring how big swings in
international bonds and currencies and jitters over US rate rises have
spooked investors. “Right now, it is all about market volatility,” said Gennadiy Goldberg, a strategist at TD Securities. “You
have investors staying away because of the volatility — and investors
staying away increases volatility. It is a volatility vortex.”
The US 10-year treasury yield, a key benchmark for global borrowing
costs, has surged to more than 4 per cent from 3.2 per cent at the end
of August, leaving it set for the biggest monthly rise since 2003. It is
on track for its sharpest ever annual rise. The two-year yield, more
sensitive to fluctuations in US monetary policy, has leapt 3.55
percentage points this year, which would also mark an historic increase.
Tightening liquidity (credit) has hit all those wild speculative
assets hard. Take so-called NFTs. Trading volumes for the ridiculous
non-fungible tokens (NFTs) have tumbled 97% since January, and the
blockchain-bound digital art and collectibles market went from $17
billion to just $466 million in September, according to Bloomberg,. Similarly, the fall in the Bitcoin price has wiped out nearly all the gains from cryptocurrencies of the last few years.
As I have argued in previous posts, there
are two blades of the scissors that are closing to deliver a slump:
falling profitability and rising interest rates; or falling earnings and
tightening liquidity, if you like.
Take the first blade. Marx explained the role of credit in
capitalist production very clearly in Capital. Credit is essential for
capitalist investment and production: “the credit system
accelerates the material development of the productive forces and the
establishment of the world-market. It is the historical mission of the
capitalist system of production to raise these material foundations of
the new mode of production to a certain degree of perfection.”
But this beneficial role for capital has a dark side. “The
credit system appears as the main lever of over-production and
over-speculation in commerce solely because the reproduction process,
which is elastic by nature, is here forced to its extreme limits, …. the
self-expansion of capital based on the contradictory nature of
capitalist production permits an actual free development only up to a
certain point, so that in fact it constitutes an immanent fetter and
barrier to production, which are continually broken through by the
credit system.”
So credit helps capitalist production to continue even when profitability is falling but only “up to a certain point”, after which “credit
accelerates the violent eruptions of this contradiction — crises — and
thereby the elements of disintegration of the old mode of production.”
In other words, the level of credit now becomes debt that acts as a
burden on further expansion and even triggers crises. If the gap
between inflated financial prices and profits in the rest of the economy
is large enough, a financial collapse can precipitate a full-blown
recession. All of a sudden, credit dries up. When credit is needed the
most, financial institutions are too frightened to lend it. As Rosa
Luxemburg once argued, “after having (as a factor of production)
provoked overproduction, credit (as a factor of exchange) destroys,
during the crisis, the very productive forces it created.”
But as Guglielmo Carchedi puts it: “the basic point is that
financial crises are caused by the shrinking productive base of the
economy. A point is reached at which there has to be a sudden and
massive deflation in the financial and speculative areas. Even though
it looks as if the crisis has been generated in these sectors, the
ultimate cause resides in the productive sphere and the attendant
falling rate of profit in this sphere”. (Behind the Crisis).
And that brings us to the other blade in the scissors of slump: profits. I have discussed what is happening with profits in a recent post. Corporate
profit margins, having reached record highs, are now sliding down as
the costs of production rose from the end of the COVID slump and revenue
growth slows.
In a report, JP Morgan economists concluded, “relative to its pre-pandemic trend, cumulative global profits since the pandemic are still over 20% depressed.” And now profits growth is disappearing. JP Morgan forecasts that “Combined with rising interest rates, profit margins will fall, dampening overall earnings.”
Even the Federal Reserve has noted this. In a recent paper, a Fed economist noted that “over
the past two decades, the corporate profits of stock market listed
firms have been substantially boosted by declining interest rate
expenses and lower corporate tax rates.” These factors were
responsible for a full one-third of all profit growth for S&P 500
nonfinancial firms over the prior two-decade period.
The significant decline in corporate interest rates allowed interest
expenses to decline as a share of earnings, even as corporate debt rose.
This was a feature of 21st century capitalism: falling
interest rates and plentiful liquidity, even in a period where
profitability was not rising. Indeed, the response to falling
profitability in the major economies was not to go for liquidation of
the weak and unprofitable to clear the decks, but instead for the
monetary authorities to save the banking system and prop up ‘zombie’
companies with zero- interest rate policies and ‘quantitative easing’.
But all this has done is to expand the credit-debt mountain to
unprecedented highs without restoring profitability in the productive
sectors. The bulk of the rise in earnings has been from speculation in
the financial sector, property and in a few technology areas. The rest
of the productive base of capitalist economies has been struggling –
thus we have low investment growth, low productivity growth and ever
larger credit liabilities that, as profits now begin to fall, are coming
back to bite capital.
Rising inflation has led to rising interest rates as central banks
switch from quantitative easing (QE) to quantitative tightening (QT)
to try and control inflation. However, that is just exacerbating the
slowdown in growth into outright recession – and generating a credit
squeeze that threatens to hit not only financial assets but also
corporations globally, So it’s back to QE!
In previous posts,
I have noted that an inverted bond yield curve is a pretty accurate
indicator of a coming slump. An inverted yield curve is when the
interest rate on, say, ten-year debt is lower than on 3m or 2yr debt.
That only happens when investors are so worried about possible recession
that they tend to buy government bonds as a safe haven, driving down
their yield, while central banks are hiking short-term rates to levels
that threaten to bring down the financial house of cards.
The US yield curve has been inverted now for some time (red line).
One analysis reckons that since 1990, a 1 per cent increase in the
Fed Funds rate (the central bank rate) flattens the 2-10 yield curve by
35 basis points on average. So, if the Fed Funds rate hits 4.75 per cent
as forecast by the market that could flatten the curve by 1.58 per
cent, leading to a curve that is inverted by as much as 1.28 per cent
(the 2-10curve started this year at 0.3 per cent) by the end of the
year.
Moreover, this credit squeeze is being exported by a strong dollar to the rest of the world’s economies,
particularly those with large dollar-denominated debt. The US dollar is
super strong against other currencies as it is seen as a ‘safe-haven’
for investors to hold their cash and assets as inflation spirals and the
world slips into recession. But a strong dollar and rising interest
rates are pushing the world economy into slump. “These recessionary
forces emanating from the US and the rising dollar come on top of those
created by the big real shocks. In Europe, above all, there is the way
in which higher energy prices are simultaneously raising inflation and
weakening real demand.” Martin Wolf, FT.
And the recessionary forces are getting stronger to the point that
many economies are probably already in a slump. The latest forecasts by
the World Bank and by the OECD, as well as the IMF, portend a slump,
confirming the indications of the inverted yield curve. In its latest economic forecast,
the OECD reckons the world economy is slipping into recession driven by
high energy prices, rising interest rates and China’s slowdown. The
OECD now forecasts just 2.2% global growth next year and as 4% is needed
to keep pace with rising global population, that will mean a fall in
per capita growth.
“The world economy is paying a high price for Russia’s
unprovoked, unjustifiable and illegal war of aggression against Ukraine.
With the impacts of the COVID-19 pandemic still lingering, the war is
dragging down growth and putting additional upward pressure on prices,
above all for food and energy. Global GDP stagnated in the second
quarter of 2022 and output declined in the G20 economies. High inflation
is persisting for longer than expected. In many economies, inflation in
the first half of 2022 was at its highest since the 1980s. With recent
indicators taking a turn for the worse, the global economic outlook has
darkened.”
The OECD wants to blame the impending recession on the Russian
invasion of Ukraine and Putin, but the world economy was already heading
into a slump just before the COVID pandemic broke and the recovery
after the COVID slump was already petering out in 2021 before the
Russian invasion.
The World Bank is more accurate: “To
cut global inflation to a rate consistent with their targets, central
banks may need to raise interest rates by an additional 2 percentage
points, according to the report’s model. If this were accompanied by
financial-market stress (which has now started – MR), global
GDP growth would slow to 0.5 percent in 2023—a 0.4 percent contraction
in per–capita terms that would meet the technical definition of a global
recession.”
One of the features of the 21st century in the major
economies has been low unemployment, at least in the official figures.
But much of this employment has been in low-paid services sectors,
part-time or temporary. Now even here, there are signs of cracks. In
the US, full-time jobs are falling, to be replaced by part-time
employment. And in another sign of a weakening labour market, weekly
working hours are down over the last six months to the lowest reading
since the COVID slump in April 2020.
The other feature of the last decade and post-pandemic period in both
the US, Europe and the UK has been the huge rise in property prices.
That too is now showing signs of fading. This month home prices in the
US fell outright for the first time since 2012. Mortgage rates have
doubled, making it increasingly impossible for many to buy homes.
So falling profits; rising interest rates; slowing economies and a credit crisis. “What can be done?”, asks FT columnist Martin Wolf –“Not that much.”, he replies to himself. The impending world slump cannot be avoided. “What
is known is that the central banks’ ability to support the markets and
economy are for a while gone. …Even previously credible G7 governments,
such as the UK’s, are learning this truth. The financial tide is going
out: only now do we notice who has been swimming naked.”
Marx’s first sentence in Capital Volume One is: “The wealth of
those societies in which the capitalist mode of production prevails,
presents itself as an “immense accumulation of commodities”, its unit
being a single commodity.” (Moore and Aveling translation). So,
from the beginning, Marx makes a distinction between wealth in societies
and how it appears in the capitalist mode of production. And in
Grundrisse, Marx explains what he means by ‘wealth’: “when the
limited bourgeois form is stripped away, what is wealth other than the
universality of human needs, capacities, pleasures, productive forces
etc., created through universal exchange? The full development of human
mastery over the forces of nature, those of so-called nature as well as
of humanity’s own nature?” (p488).
For the pioneer of capitalist economics, Adam Smith, the wealth of
nations is to be found in the accumulation of commodities. But for
Marx, wealth is more than just a collection of commodities owned by
capital and valued in money. That is the form that wealth takes under
capitalism. Wealth is the accumulation of products and activities that
meets human needs; ie the accumulation of use values. And those use
values include natural resources as well as the products of human
labour.
Under capitalism, the meaning and substance of wealth is restricted
to the value of commodities produced for sale and profit, accumulated as
capital and measured in money -the universal measure of human labour
time involved in commodity production. This meaning of wealth excludes
human social needs as well as the impact on wealth from environmental
degradation, pollution, exploitation and inequalities. These are not
accounted for the capitalist accumulation of private wealth. Because of
that, capitalist economies are not only destructive and wasteful;
capitalism is unfit for the purpose of delivering real wealth to
humanity.
Global warming, climate change, environmental disasters have become
so serious that the contradiction between capital and wealth
accumulation has become obvious. This has forced even mainstream
economics to consider ways of measuring ‘wealth’ as opposed to the
production of value (GDP) and its accumulation into capital.
Recently, the World Bank has tried to measure wealth. In its latest report, The changing wealth of nations 2021,
it provides an analysis of the world’s wealth accounts spanning 146
countries, with annual data from 1995 to 2018. It also contains the
widest set of assets covered so far, including the value of human
capital broken down by gender, as well as many different forms of
natural capital, spanning minerals, fossil fuels, forests, mangroves,
marine fisheries, and more. Even so, the Bank’s analysis remains
inadequate, leaving out the impact of climate change, the social impact
of carbon emissions from fossil fuels and, as the report adds, “economic sustainability is not the same as human well-being.”
The Bank defines global wealth as ‘produced capital’ (the means of
production, machinery, computers etc), renewable and non-renewable
natural capital (the land, forests, water, mineral resources etc);,
‘human capital’ (what Marx called human labour power), and net foreign
assets held by each nation.
Wealth (as the Bank defines it – MR), like GDP, “is intended to represent material well-being, not broader human well-being.” The Bank considers the contradiction. While “wealth
accounting—the balance sheet for a country—captures the value of all
the assets that generate income and support human well-being. Gross
domestic product (GDP) indicates how much monetary income or output a
country creates in a year; wealth indicates the value of the underlying
national assets and therefore the prospects for maintaining and
increasing that income over the long term.” So the Bank considers GDP and wealth as “complementary
indicators for measuring economic performance and provide a fuller
picture when evaluated together. By monitoring trends in wealth, it is
possible to see whether GDP growth is achieved by building capital
assets, which is sustainable in the long run, or by liquidating assets,
which is not. Wealth should be used alongside GDP to provide a means of
monitoring the sustainability of economic development.” If rising
GDP today comes at the expense of declining wealth per capita, then
prosperity will be unsustainable. Economic growth will erode its own
base. So the measure of the change in wealth per capita over time is
perhaps the most important metric to consider in addition to GDP and,
according to the Bank, it provides an actionable way to track
sustainability.
And what does the Bank find on that? That “our material
well-being is under threat: from unsustainable exploitation of nature,
from mismanagement and mispricing of the assets that make up national
wealth, and from a lack of collective action at local, national, and
regional levels.” Despite a global expansion in total wealth per
capita between 1995 and 2018, many countries are on an unsustainable
development path because their natural, human, or produced capital is
being run down. In countries where GDP growth is being achieved by
consuming or degrading assets over time, for example by overfishing or
soil degradation, total wealth is declining.
Global total wealth grew significantly between 1995 and 2018. Global
wealth grew 91 percent from 1995, reaching US$1,152 trillion by 2018.
All income groups saw increasing total wealth and per capita wealth
over the period. The strongest performance was found among
upper-middle-income countries, which had increases in wealth of over 200
percent between 1995 and 2018. Low-income countries saw per capita
wealth growth by less than the global average, at 22 percent compared
with 44 percent. Between 1995 and 2018, low-income countries’ share of
global wealth increased only from 0.5 to 0.6 percent.
The performance of lower middle-income countries was better,
increasing in share from 5 to 7 percent by 2018. But this cohort only
achieved this because of one country: China. China’s share of global
total wealth transformed from a modest 7 percent in 1995 to 21 percent
by 2018. The Bank concludes “This means that low-income countries
are falling further behind the rest of the world, creating a significant
divergence in global wealth per person.” This further proof that
there is no ‘convergence’ between rich and poor countries globally and
that imperialism is still with us.
That’s the share of global wealth (as defined). But more important
is what happened to wealth per person globally? On a per capita basis,
average wealth grew from US$111,174 to US$160,167. This represents a
real rate of growth of 2 percent per year. But 26 countries saw a
decline or stagnation in per capita wealth as population growth outpaced
net growth in asset value, especially in Sub-Saharan Africa.
Over time, population growth affects per capita wealth, especially in
low- and lower middle-income countries. Between 1995 and 2018, global
wealth grew by 91 percent, but population grew by 32 percent, so that
the net increase in per capita wealth was only 44 percent. Per capita
wealth grew fastest in middle-income countries, raising their share of
global wealth, but the largest growth occurred in upper-middle-income
countries (at 179 percent), in part because of China. Low-income
countries increased their total wealth by nearly 132 percent—more than
high-income OECD countries or the global average—but only by 22 percent
on a per capita basis because population growth was highest in those
countries.
Large disparities in per capita wealth around the world persist. On
average, an individual in an OECD country was implicitly endowed with
US$621,278 in wealth at birth in 2018. For an individual born in a
low-income country, the estimate was just US$11,462. I did a little
exercise on comparing wealth per capita between various countries using
the World Bank results.
Source: World Bank Changing Wealth of Nations 2021, p94
The graph above shows the wealth per capita for various countries as
measured by the World Bank. I have highlighted in red the G7
economies. You can see that the average wealth per capita in those
countries is some six times larger than the selected so-called ‘emerging
economies’ in this graph. And the latter includes China. The
divergence in wealth (as defined) between the imperialist bloc and the
rest is huge. For topicality, I included Russia and Ukraine. The US
wealth per capita is five times larger than Russia, while in turn
Russia’s wealth per capita is over three times larger than Ukraine –
perhaps a measure of the relative strength of each country in the world
order.
The measure above is in market dollar exchange rates (MER). The
World Bank also measures wealth per capita in purchasing power parities
(PPP), which supposedly provides a better measure of what can be
purchased in each country with the wealth available. This produces
higher wealth per capita results for some poorer nations. But it does
not significantly alter the overall trends. So I have not done a PPP
comparison (although the report does). Also, the MER measure is, in my
view, a better international comparison measure of the economic
strengths of countries relative to the US.
When we look at the composition of wealth as defined by the Bank
(natural resources; human labour power; means of production and net
financial assets), there are more revealing facts. Human capital
remains the most important component of wealth. Its share in total
wealth increased from 62 percent in 1995 to 64 percent in 2018. Produced
capital’s share decreased from 32 to 31 percent. But note that
produced capital (means of production) is largest as a share of wealth
in the advanced capitalist economies. Natural capital represented just 6
percent of total global wealth in 1995 and 2018. This share was equally
divided between renewable and non-renewable natural capital (3 percent
each) in 2018 at the global level.
Because low-income countries have so few other assets,
proportionately, natural assets such as land and ecosystems are crucial
for them, comprising around 23 percent of their total wealth. ‘Blue’
natural capital (mangroves and marine capture fisheries) are a critical
part of total wealth for some countries. But blue natural capital fell
by half from 1995 to 2018, as the value of fisheries collapsed by 83
percent. The main reason for the decline in the value of fisheries is a
physical depletion of fish stocks “due to the failure to coordinate fishing activities between countries and the private sector.”
Low- and middle-income countries, where land accounts (forests,
protected areas, and agricultural lands) are a large component of total
wealth, have seen declining forest wealth but rising agricultural
wealth. While forest wealth (timber plus ecosystem services) per capita
decreased by 8 percent between 1995 and 2018, driven by population
growth and a loss of forest area, agricultural land wealth (cropland
plus pastureland) per capita has increased by 9 percent due to area
expansion and increasing value per square kilometre. Industrial farming
is replacing natural resources.
The Bank measures ‘human capital’ (as the Bank wants to call it in
true capitalist fashion) as the value of earnings over a person’s
lifetime. Self-employed workers account for 13 percent of global human
capital, but a much larger share of the total in many low-income
countries, where the agriculture sector and informal employment are
significant. The slower annual wage growth in high-income countries
(roughly 1 percent), combined with the aging of the labour force,
reduces their share of global human capital. Meanwhile, higher rates of
wage growth in some middle-income countries ie China (up to 4 percent)
increases their relative share.
However, the World Bank admits that “Although the full,
long-lasting effects of the COVID-19 pandemic are still unknown, the
resulting economic downturn and associated unemployment and loss of
earnings have already set back the long-term progress in poverty
reduction, especially in low-income countries.” Sub-Saharan Africa and South Asia suffered the greatest setbacks, losing 15 and 7 percent of human capital.
There are huge gaps in the World Bank’s measure of ‘wealth’. It does
not include the value of carbon retention or sequestration services as
part of wealth embedded in biological ecosystems (for example, forests,
soils, and oceans). Nor does it subtract the social cost of carbon from
fossil fuels.
How can the wealth divergences globally be closed and how can the
growing disaster of climate change and environmental degradation be
averted? The World Bank’s answer is the conventional mainstream one.
Having told us that the production of commodities for the market is not a
proper reflection of wealth in society, it proceeds to offer market solutions to this contradiction. “Going
forward, policy interventions—such as carbon taxes and payments for
ecosystems services—are urgently needed to make market prices explicitly
reflect the social cost of carbon dioxide emissions and the value of
global climate regulation services provided by nature.”And it promotes the private sector as the funding source of policy action, arguing for “major progress on incorporating ESG considerations into investing choices.”This is ironic when the evidence of the failure of ‘ethical investing’ is growing by the day.
The World Bank sums up the issue. “Natural and human capital are
therefore at the core of our prosperity, but few of these assets are
accounted for in the national balance sheets and hence appear invisible
or worthless to policy makers. When we think of wealth, most of us might
think about financial assets, or companies, computers, and cars. But
what about forests, mangroves, water, fish, or clean air? What about
healthy people and their capacity for productive work? And can we
cooperate when the challenges in managing our prosperity transcend
national boundaries?”
"Brethren we conjure
you...not to believe a word of what is being said about your interests and
those of your employers being the same. Your interests and theirs are in a
nature of things, hostile and irreconcilable.Then do not look to them for relief...Our salvation must, through the
blessing of God, come from ourselves.It
is useless to expect it from those whom our labors enrich." (1)
There is a bit of a
panic brewing in the Democratic Party over the coming mid-terms that could lose
this other Wall Street party the razor thin majority in the Senate and its
influence in Congress in general. Biden is very unpopular. Democrats rely to a
great degree on the Black vote, something many black voters are aware of and the
party has at times been condemned for it, a form of abuse for black working-class
Americans taking them for granted.As
the Black Agenda Report has
pointed out many times, where can they go when it comes to electoral politics?
The only alternative is the “white man’s
party that has shifted so far to the right of late that supporting it is abhorrent
to so many workers and black workers in particular.
So, the announcement
by “worker Joe” Biden that he will
appoint a black woman to the Supreme Court is an attempt to strengthen the
party at the polls by appealing to the black voter for help, but importantly to
the black middle classes, the professional politicians, businesses and other sections
of the black petit-bourgeois that’s concerned with advancing its class
interests in the capitalist pecking order.
“What about whether she’s qualified or not.” I overheard one white person say the other
day. Well, this is true in general (and she will be------more on that in a minute)
but you won’t get very far with that argument. I remember a rather conservative
white guy on one of our crews saying that with regard to affirmative action,
that qualifications alone should matter not race (color). A Latino co-worker who
rarely expressed political views snapped right back with “You’ve had 200 years of affirmative action.”. While many of the
minorities I worked with saw huge failures in Affirmative Action they
vehemently defended it and rightly so. It has failed that’s for sure but we
must defend it against attacks from the right and racists.
Whomever Biden picks
to replace yet another aged lawyer that made the top spot for lawyers in US
society and has decided to retire, she will be qualified. But qualified in
what? She will pledge to defend the so-called
free market and the capitalist system as she has done so far, this is the
primary qualification. She will uphold the laws of the land as written by
billionaires or their political front men and women that uphold the rights of
the owners of capital and the legitimacy of their rule. She will legitimize US
foreign policy that has resulted in the deaths of millions of people throughout
the world since the decline of the European colonial powers. These victims are
overwhelmingly workers of color.
Present US Vice
President, Kamala Harris put a lot of young working-class black men in jail to protect
the system from these predators; it
got her where she is today. Democrats Hillary Clinton, Bill Clinton and Joe Biden
have apologized for supporting the 1994 crime bill that resulted in the massive
increase in the prison population, disproportionally African Americans.
No matter who is on
the US Supreme Court, it matters little to any worker. In a civilized society, a
social system devoid of class exploitation, people in official positions would
naturally reflect the make-up of the general population; but we are where we
are. I would be foolish to not recognize that to have individuals in powerful positions
in society who, because of their race or color, were excluded for centuries will
be welcomed as progress and in a sense it is as it reflects a concession to the
social power of the workers in that marginalized community.
But we must not see
things backwards. The increase in black politicians, businesses, and growth of
the black middle class is a product of the heroic struggle of the black workers
and youth over a long period that periodically erupt in to the streets. The
Civil Rights movement forced changes from above and, unbeknownst to many
workers in the US and participants in that movement, it had a huge effect
throughout the world as victims of colonialism from Kenya to Northern Ireland were
influenced by it. It forced the white racist ruling class to remove some
obstacles that would increase the black middle class that could act as a break
on the revolutionary potential of the black workers, proof that the system works
so work within it; don’t challenge its legitimacy.
Unions weren’t a
product of the US Supreme Court either. They were also built through mass
actions and violating the laws that the US Supreme Court upholds. Workers were
shot and/or deported for even discussing them. Social legislation of the 1930’s
and the social legislation of the 1960s were a result of what was already taken
in the streets, politicians simply codified it, took it in to the courts where they
have more control. That, in my view, was the purpose of Affirmative Action as
far as I can gather. These are my personal opinions but I do have my GED and
HEO certificate though I don’t like to boast.
The arrest and
conviction of state security forces for killing unarmed blacks in particular (US
cops kill a lot of people but as with most statistics, for people of color it’s
the percentage or rate) would not have occurred but for the rise of the Black Lives
Matter movement. It was almost unheard of for a cop to be arrested never mind
convicted of murder. For George Floyd to die under the knee of some jackbooted right-wing
thug in uniform is disgusting, I don’t care how many cigarettes he sold whether
he was a felon or not; you can be made a felon by the stroke of a cop’s pen, I
know, it happened to me on a picket line. If white workers want to
strengthen our own material position in society we can begin by openly condemning
this and standing with our brothers and sisters of color, united we have a lot
more power than relying on a bunch of old lawyers for our livelihoods. To
support the racist court system or the police or defend the idea
there is such a thing as a “White Race”
and to identify with it is class collaboration with the enemy.
We must
unconditionally condemn the likes of Rittenhouse and other right wing neo-fascist
types, or misguided workers that identify the response to the cop murders as
rioting. While the damage was mostly to corporate
property (no individuals homes are were set alight to my knowledge) that
was a small percentage of the activity of the BLM movement, (some of it the
activity agent provocateurs). In the absence of a social movement to which
workers of all backgrounds can turn, when boiling point is reached, when workers
can take no more, the movement erupts out of pure anger and takes on many
characteristics and many alien class forces jump to its head.
No movement comes ready-made.
If you want to get a glimpse of how the movements in early colonial America
occurred and what methods they used, read The
Urban Crucible by Gary Nash. I read that quite a while ago and you’ll see
that workers’ history in this country and gains we made came about through mass
action and taking to the streets. Some of the early battles were always described
as riots, or mob action, many of them far more violent than the Black Lives
Matter protests were which were overwhelmingly peaceful protests.
Arguing over Biden’s
announcing a choice for the US Supreme Court a sort of Politburo for the US
capitalist class, is pointless. So he’s limiting the choice to a woman and only
a black woman. The US ruling class will get their person in. It's their court.
The
US Supreme Court was instituted by George Washington in 1789. He was of
course a slaveowner and also from a wealthy English landowning merchant family.
His ancestors were those that drove the British peasants off the land denying
them a livelihood and means of subsistence then imprisoning them or for
repeated offenses, hanging them for vagrancy or poaching.
We owe nothing to
the US Supreme Court. It’s not ours.
(1)1840's appeal from New
England laborers to their fellows to abandon the idea that the employers/capitalists
would solve working people's problems.Philip Foner History of the Labor Movement Vol. 1 p192
Goldman Sachs has had a hard time attracting traders as the market in the money dealing business is pretty hot right now. So, like any employer of labor
power, Goldman has had to jack up wages/compensation as demand in this
parasitic business is outstripping supply. Average US hourly wages have risen
by 4.7% in December according to the US Labor Department so it’s widespread. Though
the present inflationary spiral will certainly eat up those raises that were
won in recent strikes in manufacturing and other industries.
It’s a problem throughout the free market system as the
Omicron variant and the pandemic in general is either keeping people at home,
and as reports in the media have confirmed of late, many people are tired of
the competitive dog-eat-dog work-life and are finding ways to get out of it.What the mass media describes as “erratic” childcare is another issue
keeping people away from the workplace and pushing others to retire.
But what is interesting is how this in regards to Goldman
Sachs is reported in the more serious journals of capitalism, those that they
read themselves. The Wall Street Journal puts it this way: “The Compensation expenses weighed heavily on fourth quarter results,
Goldman’s fourth quarter profit declined 13% to 3.94 billion.”
So here we have it from the horse’s mouth. When they report in
the capitalist’s mass media on attempts by workers to raise wages, through slow
down strikes or whatever, in general, the main thrust is that if we continue to
fight for them, it will mean one of three things or a combination of all of
them.
(1) They will have to raise prices
(2) They will be forced to lay off workers
(3) They won’t be able to hire anyone.
Not one word about profits
In other words, the whole orientation is toward the workers’
interests. They care so much about keeping us in our jobs and being able to
feed our families that they take the time to educate us about the dangers of
higher pay.According to the capitalist class and their mass media, wages
and prices are organically linked.
If the capitalist
pleases to feed you upon potatoes instead of upon meat, and upon oats instead
of upon wheat, you must accept his will as a law of political economy, and
submit to it. If in one country the rate of wages is higher than in another, in
the United States, for example, than in England, you must explain this
difference in the rate of wages by a difference between the will of the
American capitalist and the will of the English capitalist, a method which
would certainly very much simplify, not only the study of economic phenomena,
but of all other phenomena.
But even then, we might ask, why
the will of the American capitalist differs from the will of the English
capitalist? And to answer the question you must go beyond the domain of will. A person may tell me that God
wills one thing in France, and another thing in England. If I summon him to
explain this duality of will, he might have the brass to answer me that God
wills to have one will in France and another will in England.
The will of the
capitalist is certainly to take as much as possible. What we have to do is not
to talk about his will, but to
enquire into his power, the limits of that power, and the character of those limits. My added emphasis.
It seems painfully obvious what is linked to wages and it is
not prices but profits.If we win higher
wages from the boss, it means that their income (profits) will decline and the report
on the wage pressure at Goldman and other firms confirms this. They are honest
in these reports because they are not read and certainly not oriented to the those
of us that receive payment for the employers use of our labor power (wages).
When they report about this in the mass media, it’s all
about how wage increases hurt workers and consumers, not a word about profits
and that their kid may have to go to a public university instead of a private
one or the summer home in the Seychelles might have to be sold and so on.
It seems like a minor point but it is not. When my
co-workers first sent me to be on our negotiating team in 1982, I had never
done anything like that and it ended up being
a great education for me. One aspect of it was the bosses’ insistence, and most
of the union team accepted it, that there was a “wage pool” and that our job was to divvy it up. In other words, as
Marx’s opponent on the wages/prices issue in Value Price and Profit argued, “….. the amount of real wages, that is to
say, of wages as measured by the quantity of the commodities they can buy, is a
fixed amount, a constant magnitude.”
Even today, many workers will argue that asking for too much
will result in one or all of the responses from the bosses’ above. But it is so
easy to shoot down and exposing it for the propaganda that it is, there are so
many examples that confirm Marx’s view. The real issue is that the boss doesn’t
want us to increase our share because it will decrease his. Not popular.
Take
the time to read Value Price and Profit.This is why Marx is demonized, is hated by the global capitalist class.
This is why that monstrous regime, Stalinism, that ruled the Soviet Union for
decades is referred to as “Communist” by the capitalist media, it's in order to keep workers away from Marx
and his ideas.
The collapse of the attempt to form a ‘super league’ of top European
soccer teams by the billionaire owners of the big clubs is only an
interrupted chapter in the story of the commodification of sport into
profitable capitalist enterprises, owned and controlled by capital. It
is no accident that JP Morgan was the fund manager
for the Super League plan – as the bank epitomises the role of global
capital in controlling modern sport. And it is no accident that the
main driver for the new league was the president of Real Madrid, a
football club dominated in the past by the corrupt Spanish monarchy and
Francoism, the fascist wing of Spanish capital. Real is a membership
controlled club, unlike most top clubs, but only the very rich can
become president and the club lives off branding, as do most clubs. And
RM has massive debts.
The Super League was going to be a cartel, designed to create a
monopoly for the larger football clubs in Europe at the expense of the
smaller clubs, and eventually at the expense of the ‘fans’ or followers
of these clubs who would soon be paying big subscriptions to watch
matches on TV or face high prices to see matches in the stadiums. But
then that was already happening.
So ending this cartel (for now) does not change the reality of the
commodification of sport from its original ‘use value’ for people to
play and watch into the exchange value of profit. That sport became a
business began as early as the development of industrial capitalism in
the mid-19th century. Take football. There are about 600
premier league professional players in England, around 4000 professional
footballers in England and around 65,000 professional players in the
world. Of course, from the bottom to the top, the inequalities of
income or wages for footballers are huge: from one player that earns
$1.5m a week to one that cannot live on football wages and needs a
second job (the latter of course are the overwhelming majority). And
then there are people who just play for fun, apparently about 250
million association football players in the world.
The inequalities in wages are just the same in other major sports
around the world: baseball and American football, cricket and tennis.
But the thing about football (soccer) and American baseball is that they
are supposed to be the people’s sports. But at some important levels,
they have never been ‘people’s sports’. The first is that women have
been broadly excluded from playing, until fairly recently. Football was
not a people’s sport’, but a men’s game, played by men and mainly
watched by men. Women did not ‘do sport’ and certainly not football.
Women’s football has only just got into the wider world in recent
decades and remains poorly supported by capital and followers. Women
were supposed to stay at home and prepare the meal when the men got back
from playing or watching. In the case of cricket, women were expected
to make the tea and prepare the sandwiches while their men played on the
field.
Also racism was a powerful force in modernised sport. If you were
black or Asian, you were excluded from professional sport. For example,
it was not until 1947 that American professional baseball teams
included a black player. Baseball until then was not just a man’s sport
but a white man’s sport, particularly where money was involved.
Cricket originated in the medieval villages of England and France and
was played by rural labourers on the whole. But it soon became a
‘toff’s sport’. At an organised level it became dominated by upper
class and aristocrats (still is in England). In England, the
professional game was divided between those who were ‘players’ and got
paid for playing and those who were ‘gentlemen’ , who were so rich that
they did not need to be paid. Indeed, at the capital of cricket, Lords
in England, there were separate entrances for gentlemen and players and
every year each group played the other, preserving the tradition of
separation.
Of course, modern capitalism got rid of most of this when money
talked. Now cricket has become a global capitalist enterprise, run by
Indian billionaires employing cricket mercenaries from around the world
in their lucrative competitions. Cricket has become the people’s sport
in South Asia ( a product of colonial rule), but it is completely
commodified at the top. Indeed, the Super League football cartel
already operates in cricket in India, while the old amateur leagues
founder in the face of billionaire capital. Now cricket is hardly
played in English state schools and professional players are almost
completely drawn from private schools or from cricket ‘families’. The
working class players of Yorkshire and Lancashire’s industrial areas
have mostly disappeared.
Tennis was never a people’s sport. It was invented by medieval
aristrocrats and played in the palaces of kings and nobles as a
pastime. Tennis maintained its amateur status right into the late 20th
century because it was an upper class activity. Working class English
tennis hero, Fred Perry, son of a cotton spinner from Lancashire, three
times Wimbledon champion and winner of eight ‘grand slams’, was never
recognised by the authorities because he turned professional to make a
living. Professionalism in tennis eventually triumphed when capitalism
saw the profits that could be made in the sport. Now tennis is yet
another globalised operation run by billionaire sponsors based on an
intense global rat race for players to get their rankings and earnings.
Cycling might be considered a people’s sport as multi-millions cycle
every day. But while millions cycle every weekend for pleasure,
professional sport has become yet another commercial product controlled
by billionaire sponsors and riddled with drug use, corruption and race
fixing.
Rugby was a toffs sport, on the whole, although in the mining valleys
of Wales it gained adherence from local communities as a people’s sport
(men only). Otherwise it was the main sport of farmers in the richer
areas of England, France and the colonial countries of Australia, New
Zealand and South Africa – and in the private schools of the upper
classes. Rugby League was a development in the working class areas in
the north of England and was formed professionally so that working-class
players could be paid – something frowned upon by the Rugby Union
authorities.. The irony is that capital eventually made rugby union go
professional and that is where the money is now, and rugby league is the
poor relative.
The people’s game of baseball in America was brought to the new
continent by immigrants playing older bat and ball games in England.
But it too has been totally commercialised in ‘super league franchises’.
American football was never really a working class sport, but came
from the Ivy league colleges of the rich, like rugby in the UK. Now
working class kids with sporting talent desperately try to get
scholarships in football, tennis and basketball as a stepping stone to
riches of the professional leagues – and of course, only a tiny minority
ever make it, despite huge sacrifices.
Football was a truly working class sport in Europe. It was first
played by rural labourers in villages and then workers in industrial
cities. And it was mostly played for little or no money. And it was
followed by working class men (and some women). For many working class
people with talent it was a way out of poverty, just as boxing had been
also. But capital took it over in the last 150 years or so. Now
football is a business run by billionaires for their enjoyment and
funded increasingly by global capital. Football clubs have shareholders
and are quoted on the stock exchanges. The Super League saga is only
the latest chapter in the commodification by capitalism of sport.
Sport is now operated at the top by capital for capital, and the top
players are like gladiators in ancient Rome, paid much (at the top) and
adored by millions, but are soon dropped for the next bunch, while sport
for profit rolls on. Hundreds of millions watch these gladiators for
entertainment; but less actually do the sport itself.
What the story of football and other sports tells us is that football
cannot become a people’s sport again under capitalism. To achieve that
requires that stadiums and clubs should be in public ownership and that
clubs should have members on the basis of one person one vote to decide
their activities of clubs. Sport should be state-funded only, not by
capital. Players should be employed on reasonable wages like any other
job. Private capital and sport for profit must be replaced by a real
people’s sport, run by the people for the people. The implementation of
such an approach would not be possible on its own but only as part of a
wider programme of public ownership and democratic control in society
in general.
The 2018 Intergovernmental Panel on Climate Change report said that
humanity had exceeded global warming of 1C above pre-industrial levels
and is set to reach 1.5C warming between 2030 and 2052. The report
challenged governments to introduce policies to drastically and rapidly
reduce fossil fuel use, thereby decreasing carbon dioxide emissions and
global warming. It acknowledged that change would be difficult but
certainly not impossible.
While greenhouse gas (GHG) emissions slowed down slightly in the
first part of 2020, due to the pandemic, they have already begun to edge
back up to late-2019 levels. There is a debate among scientists about
the long-term impact, namely how “baked in” this warming will be. Nor do
we know with exact certainty how feedback loops will impact the planet.
Suffice to say, every increment matters, for better (with less of a
temperature increase) or for worse (at the current rate of increase).
The climate crisis is here
The last ten years have been the hottest recorded decade since 1880.
In 2020, our average temperature was 1.02 degrees Celsius warmer than
the baseline 1951-1980 mean, tying 2016 as the warmest year on record,
according to a climate analysis published by NASA and the US National
Oceanic and Atmospheric Administration.
The effect of decades of high emissions means that the destructive
effects of climate change are a real and present danger, not some
potential threat down the road. Millions are experiencing the negative
fallout from unprecedented waves of hurricanes, floods, wildfires, ocean
acidification and drought – all of which are signals that capitalism is
continuing to breach habitable planetary boundaries.
These phenomena also further impoverish the Global South, increasing
dislocation and forcing people into often hostile, racist environments
in the Global North. The destructiveness of capitalism is definitely
“baked in” as “success” relies on continuing competition and
accumulation of profit, which in turn relies on ever-growing
exploitation of people and the planet’s resources.
As evolutionary biologist Rob Wallace has pointed out,
ongoing deforestation and industrial agriculture will lead to another
pandemic sooner or later – with all the resulting stress on the economy
and the lives of workers with the most precarious jobs (like cleaners,
personal care workers, food industry workers), most of whom are
racialized.
Governments’ relatively quick emergency response to the pandemic,
their willingness to incur large deficits, demonstrates the lengths they
will got to keep the economy going. This highlights the underinvestment
in areas that will transition us to a fossil-free future and shows the
continued reliance of capitalism on fossil fuels.
Corporate response: all talk
Corporations never want to appear to be harmful, so there is much
rhetoric around moving towards sustainability. Given the hit to oil
prices from both the pandemic slowing down the economy and pre-pandemic
overproduction, we are beginning to see the appearance of oil companies’
stranded fossil assets. An August 2020 article inBloombergstates:
“The world’s
biggest oil companies began to slash the value of reserves and current
projects in 2020 as some fields became unprofitable to drill. Total SE
wrote down about $7 billion of Canadian oil sands assets in July, while
Royal Dutch Shell Plc took a $4.7 billion hit in
the second quarter relating to assets in North America, Brazil and
Europe and a project in Nigeria. Exxon Mobil Corp. warned in August that
low energy prices may wipe as much as one-fifth of its oil and natural
gas reserves off the books. Chevron Corp. said it expects to revise its
reserves down about 10%, mainly in the Permian Basin straddling Texas
and New Mexico, and in Australia.”
But in the main, these companies just can’t help themselves from stealing as much profit as they can, while they can.The Guardian
reports that BlackRock, the world’s largest asset manager, holds
investments worth $85bn in coal companies (out of its $7 trillion asset
portfolio), a year after it promised to sell most of its shares in
producers of the fossil fuel. Even as the world’s top oil and gas
companies talk earnestly about creating zero emissions targets, 27 of
the 30 largest still link executive bonuses to fossil fuel production,
says a recent report by Carbon Tracker. British Petroleum plans to
return to Nova Scotia in search of offshore oil, in spite of local
opposition and a major oil spill in the area a few years ago. The Council of Canadians is working with others to stop this latest BP incursion as part of an overall moratorium on offshore drilling.
In April 2020, Royal Dutch Shell publicized plans to become a
“net-zero carbon company” by 2050. But the plan’s focus is on the carbon
intensity of its operations—rather than absolute carbon
reductions—which will lead to a dangerous reliance on unproven carbon
removal technologies, according to company critics. Corporations with
terrible histories of environmental and cultural destruction are turning
their eyes to renewable energies as new avenues of investment. Much
like LNG, the ways these energy infrastructures are built and designed
are focused on extracting as much material and profit from the earth,
disregarding the impacts on surrounding people or environment.
The same is true for efforts to capture and dispose of excess CO2.
“Direct air capture” promises to filter existing carbon dioxide out of
the air, whereas “point-source capture” supposedly grabs carbon dioxide
from smokestacks. Oil and gas companies are touting this as green
energy, however, scientists who reviewed 200 studies on this topic now
estimate up to 81 per cent is used in a process called “enhanced oil
recovery”, extract remaining oil from an oil field. Climate
geoengineering is being financed by the private sector, including people
like Bill Gates who seems particularly fond of “sun-dimming”
technology. The research is completely out of public control and nothing
has yet been designed that is realistic or affordable to help solve the
climate crisis. In many cases the outcomes are unknown or, worse, known
to be more dangerous than carbon emissions.
The state won’t divest from capitalism
While some institutions, notably Norway’s Government Pension Fund
Global, are beginning to hedge their bets by investing more in renewable
energy and reducing their investment in fossil fuel developments, their
stake in the current industry is vast. Big banks and financial
institutions continue to finance the fossil fuel industry. In response
to recent letters from across the country requesting the Canada Pension
Plan divest from fossil fuels, CPP replied in fox-in-the-hen-house
fashion:
“We are
confident that major investments supporting the shift over time to
lower-carbon energy sources will come from companies that currently
derive most of their revenue from hydrocarbons. We are already
supporting and directly partnering with companies in the development of
solutions and strategies that meet our investment thresholds, including
renewable energy.”
Relying on the industry to solve the very problem it created speaks to the level of fossil dependence in many institutions.
Governments continue to act as business’s executive committee. The
federal government offered $320 million was offered in September 2020 to
bolster Newfoundland and Labrador’s offshore oil industry. This is of a
piece with Alberta government’s approval of plans to expand coal mining
in the province and its $1.5 billion gift to the Keystone XL pipeline
now cancelled by Biden. Even the NDP is in on the action where we see
the BC NDP government cheerleading the Coastal GasLink pipeline,
Wet’suwet’en rights be damned. Of course the country’s largest white
elephant, the TransMountain pipeline, continues with construction,
despite massive opposition and clear undermining of any meaningful
emission goal.
In Ontario, according to the Ontario Clean Air Alliance, Ford’s
ramping up of reliance on gas means that “(GHG) pollution from
Ontario’s gas-fired power plants will increase by more than 300% by 2025
and by more than 400% by 2040….If this occurs, Ontario will lose 35% of
the pollution reduction benefits it achieved by phasing-out its dirty
coal plants.”
In an effort to distract from these counterproductive moves, the
federal government throws spare change towards its public goals of
reaching net emissions by 2050. A good example is with its funding of
building retrofits to reduce energy use. The business-focused Task Force for a Resilient Recovery
showed that $26.9 billion would be needed over five years for “mass,
deep energy retrofits,” yet the government would only commit to a mere
tenth of this, $2.6 billion, and over seven years.
According to the Climate Change Performance Index Report , Canada ranks 58th globally as one of the worst-performing countries for climate action. In Doubling Back and Doubling Down: G20 Scorecard on Fossil Fuel Funding,
among OECD countries Canada is the worst in terms of the scale of its
support to the fossil industry ($14.3 billion 2017-2019), and worst in
progress in phasing out this support over time. Will this change with
the latest climate legislation and plans put out by the federal
government (i.e. Climate Accountability Act and A Healthy Environment and A Healthy Economy climate plan)?
Climate justice groups are more than dubious. They are unanimous in their criticism of the government climate (in)action plans, along the lines of “way too little, way too late”.
There is a pent-up amount of activism waiting to burst forth,
strengthened by the defeat of Trump and bolstered by the continuing
confidence of Indigenous leaders and anger with capitalism’s unrelenting
destruction of the planet.
