Capitalism is the Enemy of Democracy

Originally published at Truthout.org

Perhaps the most significant accomplishment for #OWS to date is that the occupiers have managed to poke a hole in the legitimacy of neoliberal capitalism and its central claim that unregulated markets provide opportunity and freedom.   They have accomplish this feat in a surprising way, with their persistent presence, and with home made signs, signs that say things like, “If I had a lobbyist, I wouldn’t need this sign.” Occupy Wall St. has poked this hole by having the audacity simply to gather in public, in bold defiance of the police and to demonstrate, by their solidarity and cooperation, that a different world is possible.

 

Phil Rockstroh puts it this way: “the walls of the neoliberal prison are cracking…We are no longer isolated, enclosed in our alienation, imprisoned by a concretized sense of powerlessness; daylight is beginning to pierce the darkness of our desolate cells.”

At the core of this neoliberal ideology is a simple assertion – economic exchanges promote freedom because they are voluntary, and thus they only occur if both parties believe they will benefit.  Unregulated market exchanges thus allow individuals to engage with others in complex social arrangements without coercion, without impinging on individual liberty.  Government is needed, but only to define and enforce property rights, and to create and regulate the currency individuals need to undertake market exchanges.

 

Liberals, who argue for expanding government in order to regulate or oversee individual exchange, necessarily interrupt these free and voluntary agreements and therefore undermine individual liberty.  This view of markets underlies Reagan’s famous dictum: “Government is not the solution to the problem; Government is the problem.”  In this extreme libertarian view, capitalism is the champion of democracy, the champion of freedom.

 

The flaw in this neoliberal reasoning is not hard to see.  Ownership of wealth obviously confers power; it gives some individuals an upper hand in the ‘voluntary’ exchanges they make with others.  Lacking the means otherwise to support ourselves, most of us must hire out our ability to do work in exchange for wages.  We might do quite well if we are educated and talented, lucky or white, but even so, we ultimately produce more value than we are paid – that is, after all, the reason we are hired.  Wealth ownership thus gives an upper hand to employers in these voluntary exchanges.  The extra value we create flows steadily into the hands of wealth holders, and we don’t have a say over what it is used for.

 

This upper hand in these so-called voluntary exchanges provides an ongoing and increasing source of wealth accumulation that is self-reinforcing.  Money begets money.  That is after all what capital is, money advanced for the purpose of making more money.   Excluding people from having a say over what happens to the wealth we create is the first, and the most fundamental, way that any capitalist system undermines democracy.  We are fundamentally disenfranchised in the places we work.  Wealth owners control the levers of investment and thus the “needs” of capital trump those of workers when it comes to making decisions about what gets produced, how and for whom.

 

Beyond this, neoliberal capitalism goes further – it uses the value you and I create to enforce a virtual dictatorship-by-wealth in the political sphere.   The most obvious manifestation of this dictatorship-by-wealth is the unlimited corporate financing of our elected representatives.  But this financing is only the tip of the iceberg.  Not only must candidates pander to corporate interests to successfully raise the funds needed to run for office, once they are in office they are plied and courted with unrelenting advances designed to ensure that they do not do lose their focus and begin to think about something other that promoting a favorable business climate.

 

Even deeper in the subsoil of this treasonous takeover of our democracy is the ownership and influence over the main vehicle of public discourse, the news media.  The manufacture of consent is accomplished by narrowing the acceptable range of debate to the question of how best to support economic growth (read profits) and American imperialism (read war).   Where do the millions, or billions, that candidates raise end up?  Primarily this money ends up in the coffers of the corporate media – campaign advertising is the single most important source of revenue for the corporate media.

 

So it is an odd fact of American life, that capitalism is equated with democracy while at the same time acting as democracy’s most corrosive force.  But think about it, if capitalism really supported democracy, if it really welcomed open, honest, wide-ranging debate about the values and practices of corporations and their elected representatives, why would they be sending their police in with bats and pepper spray to prevent the free open exchange of ideas?  Why would they not be handing out microphones, providing open access to the airwaves, organizing televised debates?  If capitalism really were the champion of democracy, the Occupiers and their many allies would be celebrated.  Instead we are disdained.

 

The corporate elites fear and resist any questioning of their core beliefs because their ideas do not hold up to scrutiny and reasoned debate.  That’s how we all know – capitalism is the enemy of democracy.

 

But is there any alternative?  It is tempting to think that if we can only regulate capitalism effectively, we can harness its virtues and contain its vices.  In fact, there is some evidence to support this view.  The 99% were much better served in the post-war era in the United States and they continue to benefit from efforts to reign in capitalism’s excesses in Scandinavia and Northern Europe.  But these efforts to regulate are under constant attack, and a return to regulations is ultimately a brief inconvenience to the corporate elites.

 

As Richard Wolff and others have noted, as long as the value you and I create is credited to the owners of capital, these owners have both the means and, given their distorted values, the incentive to undermine and neutralize any effective regulation and oversight we attempt to impose.  Capital will continue to corrode democracy, as certainly as oxygen corrodes iron, as long as a few hold sway over investment and jobs and are committed to using the wealth that we generate to undermine the will of the people.  In the words of Supreme Court Justice Louis Brandeis, “You can have wealth concentrated in the hands of a few, or you can have democracy; you cannot have both.”

 

Fortunately, a proven alternative to corporate capitalism already exists.  For over fifty years it has provided a practical example of how we can extend democracy to the workplace as a means of preserving democracy in our political lives.  The basic idea of this experiment is to address the root of the problem, to uncover the means by which capitalism undermines democracy, and to provide new institutional rules governing how we organize our economic lives.

 

Over fifty years ago, the Mondragon Cooperatives in northern Spain developed their poverty-stricken regional economy by developing worker-owned and managed cooperatives.  Co-ops place the ownership of wealth and the decisions concerning how wealth is invested in the hands of the people who produce the wealth.   These institutions recognize that the wealth generated by an enterprise is the result of the collective efforts of all, and that those most affected by the decisions of the enterprise, workers and community members, ought to have the principle say in what happens to the wealth, how it is distributed and the purposes to which it is put.

 

Many people argue that co-ops are impractical but this simple democratic principle rests at the heart of this highly successful, internationally competitive, stable and flourishing regional economy.  It is an economy based on democratic management, worker ownership and democratic oversight and it faces its own challenges, yes, but has certainly proven the lie that there is no alternative to corporate capitalism.  It shows that people, acting together, can use democratic principles to imbue their economic lives and their political lives with agency and meaning.

 

And this effort is spreading to America’s heartland.  The Evergreen cooperatives in Cleveland have successfully applied the principles of the Mondragon experiment to develop a successful urban development project.   As Gar Alperovitz argues, the linking of large anchor institutions with worker-owned enterprises offers a practical economic development strategy that is politically feasible in the context of our current economic crisis.

 

Many people are uncomfortable with the idea that working people can do without their corporate bosses.  Quite a bit of time and energy has been spent trying to convince us that the idea that workers can manage themselves is preposterous.

Occupy Wall St. has provided the opening for us to consider, debate and discuss what has previously been off the table.  Economic democracy is not only possible, it is essential if we are to realize that peculiar American Dream of a government of, by and for the people.

So let’s not overlook the significance of what Occupy Wall St. is doing.  We need to step through the hole they have opened in the shiny façade of our glad-handled, Madison Avenue, faux democracy and take up the challenge of creating the real thing, right here and now, in this unlikely place we call America, as a means of reclaiming our own dignity, our own liberty and a livable world for those who come next.

 

 

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THE PR MAN EXPLAINS

thanks to Kurt Tucholsky

 

 

Good evening, gentlemen, how are you?

I’m the PR man from Kokostech.

 

Kokostech has no harmful side-effects,

Since it has no effects at all.

 

We are only manufacturing it in order

To cover the high advertising costs,

 

And we advertise it in order

To be able to manufacture it.

 

In this way we symbolize what lies

Closest to our hearts – capital.

 

*

 

Questions? Capital? Gross accumulation,

Money begets money, ask your banker.

 

Lacking that we couldn’t be Kokostech.

No effects at all?  Of course not,

 

Because it we had effects, we’d have causes,

And nobody wants causes, right?  That’s

 

Logic.  Causes are dangerous, cause

Effects, side-, inside-, outside-, ugly.

 

We want beauty, henceforth Kokostech,

That miracle of manufacture plus

 

Advertising, all up the spout, friends,

Trusting trusses, our only support.

 

Karl Patten

 

Comment:  When writing “thanks” to Kurt Tucholsky, I am very direct.  I was reading a book on the Weimar Republic, which dealt primarily with the arts, and I came across a prose passage, lacking a context, from Kurt Tucholsky.  It was a parody of advertising and said that whatever “has no harmful side-effects since it has no effects at all.”  Immediately, I knew there was a satirical poem there and set off writing this poem.  The first half went very well, but when I read it to my Spilling Ink colleagues they quickly saw that I had failed to follow it up in the second half.  I listened to their criticisms carefully and went home and rewrote, thoroughly, that second half.  At least according to them I succeeded, and you now have the completed poem.

 

I had to give a voice to Tucholsky’s prose and invented a PR man speaking to a group of shareholders about his product, for which I invented Kokostech.  Ko- is a favored bit of sound for products of all kinds, and I liked it for this one, whatever it is, I don’t know, although it suggests to me something to pull off a pharmacy shelf and ingest for better health.

 

Tucholsky was a satirical poet, and, I believe, suffered and died under the Nazis.  He is little-known in this country, unfortunately.

Obama Takes Out Osama

Obama Takes Out Osama

John Peeler

A few things are clear in the wake of the stunning news of the operation that penetrated Osama bin-Laden’s hideout outside Islamabad, Pakistan, and killed him in the early hours of May 2.

The first, of course, is the ruthless skill with which the Special Forces carried out a mission that had been meticulously prepared by intelligence agencies. This is a business where we mostly learn about failures like the Bay of Pigs in 1961. This was a success.

Barack Obama and his national security team were effective in leading the operation and in keeping it secret. Too often, especially since Reagan’s adventure with the Contras in Nicaragua, American presidents have bragged about their “covert” actions. The key to the effectiveness of such actions is their secrecy.

Obama may not much like war, but he has shown that if he believes he must wage it, he intends to win it. Liberals who were hostile to the Iraq war, skeptical of the Afghanistan war, and dubious about the Libyan intervention will find little comfort here. But Obama will surely gain among moderates and swing voters. The spontaneous crowds at the White House and Ground Zero, celebrating the death of a sworn enemy, remind us that the scars of 9/11 are still raw, and vengeance still moves many people.

Long-term effects are problematic. Bin Laden was no longer in direct control of al-Qaeda, and Islamist terror has grown far beyond al-Qaeda. The death of Osama bin-Laden will likely provoke a spike in terrorist attacks. Meanwhile, the flickering hopes for an Israeli-Palestinian peace settlement are dying, and the effort to force Qaddafi out in Libya is stalled. The Afghani government is weak and corrupt, yet repeatedly attacks the United States. The same can be said of the Iraqi government. In short, getting bin-Laden is about the only thing that’s going well in the Middle East. It’s possible, though, that Obama will gain more clout in the region as a result of this success.

None of this will matter to Obama’s reelection unless he can magically accomplish two contradictory goals: get the economy moving again, and get the deficit under control.

Beltway Fantasies – Part 1

Corporate control of the media undermines democracy by displacing reasoned consideration of opposing points of view to the margins of public discourse.  In place of considered arguments, the corporate media simply repeats and amplifies the fallacious and self-serving fantasies of the corporate elites and their representatives in Washington.  As a result we base our economic and social policies on Beltway fantasies that succeed in garnering (bare) majority support but that bear almost no relation to reality or good sense.  These fantasies promote the short-term corporate bottom line at our considerable expense, threaten the viability of our ecosystem and make a mockery of the ideals of democracy for which our fore-bearers organized, fought and often died.  This article, written by the members of the Spilling Ink writers’ collective, is the first in a series of articles written to throw some needed cold water on beltway fantasies.  Comments or suggestions are welcome at http://www.SpillingInk.net.

Fantasy #1:  Regulation is bad – it burdens business, kills jobs, and hurts the economy. (Chris Schell)

Non-existent, poorly designed, weakly administered, under funded and intentionally ignored regulations have killed more jobs, bankrupted more businesses and done more damage to the economy than any over-regulation has ever done.  And that’s just the business and financial regulations.  Most Superfund sites (scenes of environmental destruction) were caused by regulation lapses of one kind or another.  The gulf oil spill – lack of regulation.  And the number of lives saved by regulation of cars, highways, medicines, hospitals, nursing homes, food supply, workplace safety?   Countless.  Someone is always willing to make money by endangering other peoples lives and homes.

Lack of financial regulation, deregulation, or unenforced regulation (through greed or ideological blindness) has been at the root of nearly every major economic disaster of my lifetime.  The Savings and Loan scandal, the buying and dismantling of businesses to raid workers pension funds, the recent housing and financial collapse all resulted in what can only be termed obscene wealth being reaped by bankers, Wall Street financiers and corporate CEOs.  All of these scandals resulted in devastation for working Americans.  This is true class warfare.   Alan Greenspan could have stopped this last collapse but he believed in the free market.  He believed regulation was not needed because Wall Street would not be so blind and greedy to risk economic destruction for short-term greed.  He really nailed that one didn’t he?

Today microsecond trading which makes huge profits for a few while adding value to absolutely nothing could easily be taxed or regulated out of existence but the SEC does nothing.  Today grain and oil prices spike without regard to supply because the Bush administration removed limits on the futures commodity market.  These limits could easily be replaced but Republican appointees on the Federal Trade Commission do not believe it is necessary.  People around the world are starving because of our ideological blindness, including in the Middle East, contributing to the current turmoil there.

Deregulation has consequences.

Fantasy #2. All tax cuts are good all the time. (David Kristjanson-Gural)

This belief follows from the following claims:

i)               that government run services are inefficient and should be replaced by privately run services which are efficient;

ii)             that providing money and assistance to people in need causes them harm because it undermines their initiative and causes them to become more dependent;

iii)            that tax cuts provide an incentive to businesses to increase production and create jobs;

iv)            that wealth and income distribution results from fairly rewarding individual effort so redistributing income through taxation is unjustified.

In fact:

i)               Many government run services are highly efficient and many privately run services are inefficient.  Monopolies, in particular, maximize profits by restricting supply and charging high prices and they lack competitive incentives to innovate.   Adam Smith advocated the regulation or elimination of monopolies because they impose “an absurd tax” in the form of monopoly prices.  Most mature industries – drugs, agriculture, insurance, banking to name a few – are dominated by monopoly.

ii)             Providing money and assistance to people in need most often allows them to regain self-reliance and contribute to their families and communities.  Incidents of welfare fraud or recidivism are very low.  Crime and health costs are higher when we fail to provide assistance to people in need.

iii)            Tax cuts are not associated with greater business investment.  Business investment is governed primarily by the expected future rate of return, which depends highly on the business cycle and consumer confidence.  Cutting taxes simply allows corporations and wealthy individuals to free ride on the social investments taxpayers finance including education, infrastructure, and research and development without which corporations would be less profitable.

iv)            Wealth and income distribution is not the result of individual effort and innovation but largely results from ownership and control of productive or financial assets.  These assets “produce wealth” only because they allow owners to lay claim to the value created by the workers they employ.  Furthermore, social investments in education, research and development, common property in the form of raw materials, the legal and political system – all publicly financed – form a collective basis for the privately acquired wealth.  Taxing income and wealth is a means of ensuring individuals pay their fair share of the social investment.

The belief that cutting taxes is good rests on self-serving beliefs concerning fairness and the role of government.  Many working class people, whose pay has been squeezed by private corporations for 30 years, have been hoodwinked into believing these false claims because taxes are one thing they can affect.  Instead of focusing on cutting taxes, it is time to focus on raising wages, breaking up monopolies and calling into question the legitimacy of corporate profits.

Fantasy #3.  Government should be run like a business.  (Joe Detelj)

This bit of corporate propaganda is actually based on a false equivalency.

A business is chartered for the express purpose of generating profits for the owners. A business offers products and charges what the market will bear in order to maximize these profits.  Any activity that generates revenue, no matter the social costs, is an institutional imperative.

Governments impose taxes in order to generate revenue for investments in infrastructure, human capital and public safety.  Governments are elected to promote the general welfare and are to function with the consent of the governed.  This arrangement was designed to provide a system of checks and balances.

Inadequate revenue is a prescription for bankruptcy for both entities.  The irony of the false equivalency is that were it to be implemented, taxes would be levied on the governments most lucrative market, our wealthiest citizens and businesses and increased substantially.  We would have ideological consistency – government run like a business – but I imagine, public policy that would drive the advocates of business-government equivalency insane with rage.

Fantasy #4: The Tea Party and the Founding Fathers have similar beliefs. (Chris Schell)

Most of the Founders were personally tolerant of others’ religious beliefs. A few were atheists; several were Deists, cafeteria Christians in today’s negative terminology. Most believed in religious tolerance because they had seen the result of religious hatred.   The Founding Fathers were freethinkers, scientists and lawyers – the educated elite of their day. They were at the forefront of scientific discovery and invention and of legal and political thought. Elite, educated, thoughtful, progressive, devoted to knowledge, tolerant.  They were also willing to negotiate and compromise for the sake of political progress. Does this sound like the Tea Party?

Naturally the Founders did not always live up to their ideals. They tolerated racism and bigotry for political success or financial advantage.  They thought land ownership was a requirement for political participation and that wealth should provide a path to political power. They particularly were interested in the rights of white males.  Some – but not all – of these belief dovetail nicely with those of the Tea Party.

But even if you disagree with these judgments, do you really think that Washington, Hamilton, Paine, Adams, Jefferson or Franklin would have any respect for Glen Beck?

Fantasy #5: Republicans Support our Troops. (Charles Sackrey)

Starting in 2003, George W. Bush and the Republicans used a witches’ brew of fraudulent evidence to justify sending over 1,000,000 military personnel to war in Iraq.  Of these, 4,440 died, and 30,000 were wounded.  About one third of the survivors have suffered mental illnesses since their return.  These facts alone dispel the myth that the Republicans support our troops: they sent them to war and to their fate on false pretenses.  (It always needs mentioning that, along with U.S. military losses, at least 125,000 Iraqis have so far died and 2.5 million have been displaced.)

Once the U.S. troops came home, the Republicans’ assault on some of them continued.  In 2005 Salon.com, and in 2007 the Washington Post, brought national attention to complaints from war-wounded patients at D.C.’s Walter Reed Army Hospital about treatment there.  The complaints were about understaffing, and about rats, roaches, black mold, cheap mattresses, and a lack of heat and hot water in some rooms. Investigations led to the sacking of the hospital’s head and to its overhaul.  Thus, during much of the Iraq War, the hospital was in a steady decline.

More recent examples are easy to come by.  In their war on spending, Congressional Republicans are now trying to eliminate $75 million from the budget of the Veterans Administration to be allocated to housing vouchers for at least some of the 76,000 veterans who are now homeless. And, Congresswoman Michele Bachman, a Tea Party fan from Minnesota, has proposed lopping $4.5 billion from the overall VA’s budget.

While they try to limit housing vouchers for Iraq veterans, the Republicans are working just as hard to retain the Bush tax cuts which each year provide about $40 billion of extra income to the nation’s richest 1%.

What do the veterans think?  Iraq and Afghanistan Veterans of America (IAVA) recently evaluated the Congress on the basis of support for the interests of U.S. war veterans. These grades were awarded strictly on performance rather than on party affiliation.

Here are the results:

The IAVA gave out 154 D and F grades. 142 of those went to Republicans and 12 to Democrats — meaning that 92 percent of the D and F grades went to members of the GOP.

Of the 94 congressmen that received A or A+ grades, 91 are Democrats and three are Republicans.

Fantasy #6: Cold Winters in the Eastern USA prove Global Warming is a myth. – Karl Patten

Snowstorms or colder weather do not prove much about global warming.  These events are simply weather experienced in a specific location at a specific time.  Climate, however, refers to the prevailing weather conditions – such as average temperature, precipitation, wind, humidity, and atmospheric pressure – observed over decades.

Climate data show that global warming is already having profound effects on precipitation patterns, intensifying rain or snowfall in places accustomed to such precipitation while decreasing precipitation in areas or times of the year that typically receive little.  These impacts are likely to become even more pronounced in the decades ahead if heat-trapping emissions continue unabated.  (See Union of Concerned Scientists – www.ucsusa.org/blueprint)

Fantasy #7:  Evolution is just a theory.  (Joe Detelj)

Actually this is true.  Evolution shares elegant company with the theory of gravity, electro magnetism, relativity and photosynthesis.  Just to name a few.

The False Ideology of a Neutral Center

Note: This is cross-posted on The Nets We Weave.  Though not the usual form of writing here, it grew beyond a simple comment to become a budding column or essay.

I took the plunge and posted this on facebook:

I am irked by “centrists” like Matt miller on KCRW’s Left Right and Center who think center ALWAYS means that left and right are equivalent in their commitment to ideology over good ideas and therefore the only possible solutions to economy, politics, and government is some sort of “third way.” And they think non-choice is non-ideological.

On a side note, I never know how much politics or “political economy” (the broader interrelated questions of fairness, governance, philosophy, and values) to put on FB. I have often said, and should write more about the double-edged sword of FB- it is based on network growth and inter-connectivity, but the broader a network becomes, the more limited it’s uses. At the extreme, FB will become an on-line version of Lake Wobegone nomrs: to avoid unsettling anyone, only discuss the weather in polite company.

Anyway, Matt Miller, the host and apparent “arbiter” on Left, Right and Center (a great show even if it is made by the communists socialists Nazis at NPR,was on a tear about the need for a new label for “radical centrists.” He made his version of a passionate plea for now being the time for a brave new “third way” politics (was he around during the 1990s when Blair and Giddens did this? and, um, that US president, named, um, Clinton?)

Matt Miller makes some good points, sometimes. But I find he often starts where much of the “mainstream”media seem to: that the excesses of left and right are always there, always misguided, always driven by ideology over facts and therefore the only hope for progress comes in some third way. Even as his OWN SHOW has left and right weaving in and out of agreement on issues like the Fed, China, and Afghanistan, he cannot let go of the animating narrative of his life.

Sometimes the “very” left is simply correct. For example, there is growing wealth and wage inequality in the US, and tax policies have much to do with it. Or, the distortions in health care of the US compared to other comparable societies is due to all the money that flows to the various sectors of the Health-industrial complex. No amount of compromise with the right can make those critiques go away.

Rarely, the “right” is correct. Ron Paul wants to audit the Fed. I am with Bob Scheer on this one. The Fed as it has become run is a distortion of democracy in our economy. I can agree with some critiques of changing or weakening values in US society, although I won’t agree with solutions or causes, probably.

So, I would rather Miller’s idea of a radical center be more of arbiter between right and left than always elevate its (false) sense of being above the messy fray by being aghast at the ideology around it. There is no non-ideological center…