People Before Profit blog

Schools We Can Envy

Sun, 26 Feb 2012 07:43:00 +0000

Editor Dianne Ravitch reviews Finnish education as a foundation for criticisim of the "Race tot he Top" and "No Child Left Behind" educational strategies of both the Bush and Obama administrations. US educational expenditures per child are second in the world, but performance in Math and Science is in the lower half of all OECD countries, and barely average in reading. Ms Ravitch argues that both Bush and Obama are punishing teachers for problems mainly caused by inequality, povety and a host of issues arising from what socialists would characterize as a decaying monopoly capitalist economy and associated social and political corruption. Obama and others argue, correctly in my view, that poverty cannot be an excuse to do nothing on education. But the strategies of firing allegedly incompentent teachers --- simply because standardized test scores for their students are below par --- and trashing union contracts that get in the way of firing teachers effectively makes teachers the main enemy of education reform, when in fact they are the only force that can really lead to positive reform. Not surprisingly, the "blame the teachers" plan has shown no positive results in the years since Bush inaugurated the policy. Further, variou right-wing forces have manipulated the school choice, home schooling, charter school movements tu simply undermine public education with the cynical philosophy that a society with endemic poverty and inequality has no need of educated poor people.

The injustice of blaming teachers for the effects of poverty and inequality is a powerful argument. However it is not sufficient to change the equation in the education debate. The virtues of the Finnish system are: heavy investment in teacher education, reliance on their professionalism, support for individualized, not standardized teaching, and, of course, a society strongly committed to social democratic values. An alliance of teachers and parents is the axis around which any reform can be successful. But to achieve it, teachers must rollback thinking defensively like a union and more like the forces that should be in leadership of the education system.

Finnish Lessons: What Can the World Learn from Educational Change in Finland?
by Pasi Sahlberg, with a foreword by Andy Hargreaves
Teachers College Press, 167 pp., $34.95 (paper)

Tuomas Uusheimo

The Kirkkojärvi School in Espoo, Finland, which accommodates about 770 students aged seven to sixteen and also includes a preschool for six-year-olds; from the Museum of Finnish Architecture’s exhibition ‘The Best School in the World: Seven Finnish Examples from the 21st Century,’ which will be on view at the American Institute of Architects’ Center for Architecture in New York City this fall

In recent years, elected officials and policymakers such as former president George W. Bush, former schools chancellor Joel Klein in New York City, former schools chancellor Michelle Rhee in Washington, D.C., and Secretary of Education Arne Duncan have agreed that there should be “no excuses” for schools with low test scores. The “no excuses” reformers maintain that all children can attain academic proficiency without regard to poverty, disability, or other conditions, and that someone must be held accountable if they do not. That someone is invariably their teachers.

Nothing is said about holding accountable the district leadership or the elected officials who determine such crucial issues as funding, class size, and resource allocation. The reformers say that our economy is in jeopardy, not because of growing poverty or income inequality or the outsourcing of manufacturing jobs, but because of bad teachers. These bad teachers must be found out and thrown out. Any laws, regulations, or contracts that protect these pedagogical malefactors must be eliminated so that they can be quickly removed without regard to experience, seniority, or due process.

The belief that schools alone can overcome the effects of poverty may be traced back many decades but its most recent manifestation was a short book published in 2000 by the conservative Heritage Foundation in Washington, D.C., titled No Excuses. In this book, Samuel Casey Carter identified twenty-one high-poverty schools with high test scores. Over the past decade, influential figures in public life have decreed that school reform is the key to fixing poverty. Bill Gates told the National Urban League, “Let’s end the myth that we have to solve poverty before we improve education. I say it’s more the other way around: improving education is the best way to solve poverty.” Gates never explains why a rich and powerful society like our own cannot address both poverty and school improvement at the same time.

For a while, the Gates Foundation thought that small high schools were the answer, but Gates now believes that teacher evaluation is the primary ingredient of school reform. The Gates Foundation has awarded hundreds of millions of dollars to school districts to develop new teacher evaluation systems. In 2009, the nation’s chief reformer, Secretary of Education Arne Duncan, launched a $4.35 billion competitive program called Race to the Top, which required states to evaluate teachers by student test scores and to remove the limits on privately managed charter schools.

The main mechanism of school reform today is to identify teachers who can raise their students’ test scores every year. If the scores go up, reformers assume, then the students will enroll in college and poverty will eventually disappear. This will happen, the reformers believe, if there is a “great teacher” in every classroom and if more schools are handed over to private managers, even for-profit corporations.

The reformers don’t care that standardized tests are prone to measurement error, sampling error, and other statistical errors.¹ They don’t seem to care that experts like Robert L. Linn at the University of Colorado, Linda Darling-Hammond at Stanford, and Helen F. Ladd at Duke, as well as a commission of the National Research Council, have warned about misuse of standardized tests to hold individual teachers accountable with rewards or sanctions. Nor do they see the absurdity of gauging the quality of a teacher by the results of a multiple-choice test given to students on one day of the year.

Testing can provide useful information, showing students and teachers what is and is not being learned, and scores can be used to diagnose learning problems. But bad things happen when tests become too consequential for students, teachers, and schools, such as narrowing the curriculum only to what is tested or cheating or lowering standards to inflate scores. In response to the federal and state pressure to raise test scores, school districts across the nation have been reducing the time available for the arts, physical education, history, civics, and other nontested subjects. This will not improve education and is certain to damage its quality.

No nation in the world has eliminated poverty by firing teachers or by handing its public schools over to private managers; nor does research support either strategy.² But these inconvenient facts do not reduce the reformers’ zeal. The new breed of school reformers consists mainly of Wall Street hedge fund managers, foundation officials, corporate executives, entrepreneurs, and policymakers, but few experienced educators. The reformers’ detachment from the realities of schooling and their indifference to research allow them to ignore the important influence of families and poverty. The schools can achieve miracles, the reformers assert, by relying on competition, deregulation, and management by data—strategies similar to the ones that helped produce the economic crash of 2008. In view of the reformers’ penchant for these strategies, educators tend to call them “corporate reformers,” to distinguish them from those who understand the complexities of school improvement.

The corporate reformers’ well-funded public relations campaign has succeeded in persuading elected officials that American public education needs shock therapy. One is tempted to forget that the United States is the largest and one of the most successful economies in the world, and that some part of this success must be attributed to the institutions that educated 90 percent of the people in this nation.

Faced with the relentless campaign against teachers and public education, educators have sought a different narrative, one free of the stigmatization by test scores and punishment favored by the corporate reformers. They have found it in Finland. Even the corporate reformers admire Finland, apparently not recognizing that Finland disproves every part of their agenda.

It is not unusual for Americans to hold up another nation as a model for school reform. In the mid-nineteenth century, American education leaders hailed the Prussian system for its professionalism and structure. In the 1960s, Americans flocked to England to marvel at its progressive schools. In the 1980s, envious Americans attributed the Japanese economic success to its school system. Now the most favored nation is Finland, and for four good reasons.

First, Finland has one of the highest-performing school systems in the world, as measured by the Programme for International Student Assessment (PISA), which assesses reading, mathematical literacy, and scientific literacy of fifteen-year-old students in all thirty-four nations of the Organisation for Economic Co-operation and Development (OECD), including the United States. Unlike our domestic tests, there are no consequences attached to the tests administered by the PISA. No individual or school learns its score. No one is rewarded or punished because of these tests. No one can prepare for them, nor is there any incentive to cheat.

Second, from an American perspective, Finland is an alternative universe. It rejects all of the “reforms” currently popular in the United States, such as testing, charter schools, vouchers, merit pay, competition, and evaluating teachers in relation to the test scores of their students.

Third, among the OECD nations, Finnish schools have the least variation in quality, meaning that they come closest to achieving equality of educational opportunity—an American ideal.

Fourth, Finland borrowed many of its most valued ideas from the United States, such as equality of educational opportunity, individualized instruction, portfolio assessment, and cooperative learning. Most of its borrowing derives from the work of the philosopher John Dewey.

In Finnish Lessons: What Can the World Learn from Educational Change in Finland?, Pasi Sahlberg explains how his nation’s schools became successful. A government official, researcher, and former mathematics and science teacher, Sahlberg attributes the improvement of Finnish schools to bold decisions made in the 1960s and 1970s. Finland’s story is important, he writes, because “it gives hope to those who are losing their faith in public education.”

Detractors say that Finland performs well academically because it is ethnically homogeneous, but Sahlberg responds that “the same holds true for Japan, Shanghai or Korea,” which are admired by corporate reformers for their emphasis on testing. To detractors who say that Finland, with its population of 5.5 million people, is too small to serve as a model, Sahlberg responds that “about 30 states of the United States have a population close to or less than Finland.”

Sahlberg speaks directly to the sense of crisis about educational achievement in the United States and many other nations. US policymakers have turned to market-based solutions such as “tougher competition, more data, abolishing teacher unions, opening more charter schools, or employing corporate-world management models.” By contrast, Finland has spent the past forty years developing a different education system, one that is focused on

improving the teaching force, limiting student testing to a necessary minimum, placing responsibility and trust before accountability, and handing over school- and district-level leadership to education professionals.

To an American observer, the most remarkable fact about Finnish education is that students do not take any standardized tests until the end of high school. They do take tests, but the tests are drawn up by their own teachers, not by a multinational testing corporation. The Finnish nine-year comprehensive school is a “standardized testing-free zone,” where children are encouraged “to know, to create, and to sustain natural curiosity.”

I met Pasi Sahlberg in December 2010. I was one of a dozen educators invited to the home of the Finnish consul in New York City to learn about the Finnish education system on the day after the release of the latest international test results. Once again, Finland was in the top tier of nations, as it has been for the past decade. Sahlberg assured the guests that Finnish educators don’t care about standardized test scores and welcomed the international results only because they protected the schools against conservative demands for testing and accountability.

Finnish teachers, Sahlberg said, are well educated, well prepared, and highly respected. They are paid about the same as teachers in the United States in comparison to other college graduates, but Finnish teachers with fifteen years’ experience in the classroom are paid more than their American counterparts. I asked Sahlberg how it was possible to hold teachers or schools accountable when there were no standardized tests. He replied that Finnish educators speak not of accountability, but of responsibility. He said, “Our teachers are very responsible; they are professionals.” When asked what happens to incompetent teachers, Sahlberg insisted that they would never be appointed; once qualified teachers are appointed, it is very difficult to remove them. When asked how Finnish teachers would react if they were told they would be judged by their students’ test scores, he replied, “They would walk out and they wouldn’t return until the authorities stopped this crazy idea.”

Sahlberg invited me to Finland to tour several schools, which I eventually did in September 2011. With Sahlberg as my guide, I visited bright, cheerful schools where students engaged in music, dramatics, play, and academic studies, with fifteen-minute recesses between classes. I spoke at length with teachers and principals in spacious, comfortable lounges. Free from the testing obsession that now consumes so much of the day in American schools, the staff has time to plan and discuss the students and the program.

Arno de la Chapelle

The Sakarinmäki and Östersundom School in Helsinki, which accommodates about 350 Finnish- and Swedish-speaking students aged seven to sixteen and also houses a daycare center

Before I left Finland, Sahlberg gave me a book called The Best School in the World: Seven Finnish Examples from the 21st Century,³ about the architecture of Finnish schools. The book is based on an exhibition presented at the Venice Biennale of Architecture in 2010. When we visited one of the featured schools, I thought, how delightful to discover a nation that cares passionately about the physical environment in which children learn and adults work.

To be sure, Finland is an unusual nation. Its schools are carefully designed to address the academic, social, emotional, and physical needs of children, beginning at an early age. Free preschool programs are not compulsory, but they enroll 98 percent of children. Compulsory education begins at the age of seven. Finnish educators take care not to hold students back or label them as “failing,” since such actions would cause student failure, lessen student motivation, and increase social inequality. After nine years of comprehensive schooling, during which there is no tracking by ability, Finnish students choose whether to enroll in an academic or a vocational high school. About 42 percent choose the latter. The graduation rate is 93 percent, compared to about 80 percent in the US.

Finland’s highly developed teacher preparation program is the centerpiece of its school reform strategy. Only eight universities are permitted to prepare teachers, and admission to these elite teacher education programs is highly competitive: only one of every ten applicants is accepted. There are no alternative ways to earn a teaching license. Those who are accepted have already taken required high school courses in physics, chemistry, philosophy, music, and at least two foreign languages. Future teachers have a strong academic education for three years, then enter a two-year master’s degree program. Subject-matter teachers earn their master’s degree from the university’s academic departments, not—in contrast to the US—the department of teacher education, or in special schools for teacher education. Every candidate prepares to teach all kinds of students, including students with disabilities and other special needs. Every teacher must complete an undergraduate degree and a master’s degree in education.

Because entry into teaching is difficult and the training is rigorous, teaching is a respected and prestigious profession in Finland. So selective and demanding is the process that virtually every teacher is well prepared. Sahlberg writes that teachers enter the profession with a sense of moral mission and the only reasons they might leave would be “if they were to lose their professional autonomy” or if “a merit-based compensation policy [tied to test scores] were imposed.” Meanwhile, the United States is now doing to its teachers what Finnish teachers would find professionally reprehensible: judging their worth by the test scores of their students.

Finland’s national curriculum in the arts and sciences describes what is to be learned but is not prescriptive about the details of what to teach or how to teach it. The national curriculum requires the teaching of a mother tongue (Finnish or Swedish), mathematics, foreign languages, history, biology, environmental science, religion, ethics, geography, chemistry, physics, music, visual arts, crafts, physical education, health, and other studies.

Teachers have wide latitude at each school in deciding what to teach, how to teach, and how to gauge their pupils’ progress. Finnish educators agree that “every child has the right to get personalized support provided early on by trained professionals as part of normal schooling.” Sahlberg estimates that some 50 percent of students receive attention from specialists in the early years of schooling. Teachers and principals frequently collaborate to discuss the needs of the students and the school. As a result of these policies, Sahlberg writes,

Most visitors to Finland discover elegant school buildings filled with calm children and highly educated teachers. They also recognize the large amount of autonomy that schools enjoy: little interference by the central education administration in schools’ everyday lives, systematic methods for addressing problems in the lives of students, and targeted professional help for those in need.

The children of Finland enjoy certain important advantages over our own children. The nation has a strong social welfare safety net, for which it pays with high taxes. More than 20 percent of our children live in poverty, while fewer than 4 percent of Finnish children do. Many children in the United States do not have access to regular medical care, but all Finnish children receive comprehensive health services and a free lunch every day. Higher education is tuition-free.

Sahlberg recognizes that Finland stands outside what he refers to as the “Global Education Reform Movement,” to which he appends the apt acronym “GERM.”GERM, he notes, is a virus that has infected not only the United States, but the United Kingdom, Australia, and many other nations. President George W. Bush’s No Child Left Behind law and President Barack Obama’s Race to the Top program are examples of the global education reform movement. Both promote standardized testing as the most reliable measure of success for students, teachers, and schools; privatization in the form of schools being transferred to private management; standardization of curriculum; and test-based accountability such as merit pay for high scores, closing schools with low scores, and firing educators for low scores.

In contrast, the central aim of Finnish education is the development of each child as a thinking, active, creative person, not the attainment of higher test scores, and the primary strategy of Finnish education is cooperation, not competition. I will consider the Teach for America organization—the subject of Wendy Kopp’s A Chance to Make History—in comparison to the Finnish model in a second article.

—This is the first of two articles.

1
The best explanation of standardized testing is Daniel Koretz’s Measuring Up: What Educational Testing Really Tells Us (Harvard University Press, 2008). ↩
2
See Incentives and Test-Based Accountability in Education , edited by Michael Hout and Stuart W. Elliott (National Academies Press, 2011); Economic Policy Institute, “Problems with the Use of Test Scores to Evaluate Teachers,” August 29, 2010; and Center for Research on Education Outcomes, “Multiple Choice: Charter School Performance in 16 States,” Stanford University, June 2009. ↩
3
With essays by Pasi Sahlberg and others (Helsinki: Art-Print Oy, 2011), published in conjunction with the exhibition “The Best School in the World,” hosted by the Museum of Finnish Architecture in Helsinki, June 8–September 25, 2011. The exhibition will open in October 2012 at the American Institute of Architects’ Center for Architecture in New York City. ↩

GLOBALIZATION AND THE CRISIS of DEMOCRACY

Sat, 25 Feb 2012 17:33:00 +0000

The Occupy Wall Street movement is a demand for democracy in a world of financial power beyond the reach of popular will. People have reacted not only to the inequality of wealth, but also to the inequality of power that makes it possible. The rebellion has swelled with millions no longer accepting the legitimacy of Wall Street nor their political representatives in Washington.

The movement is a reaction to the current economic crisis, but also to a historic shift in the nature of capitalism. The populist content of bourgeois rule that emerged with the American and French revolutions is being exhausted and corrupted, replaced with a clear shift to the right. Globalization has given rise to a transnational capitalist class (TCC) with access to world labor and markets and a neoliberal penchant for deregulation. The result is the shredding of the old social contracts and a gutting of democratic political restraints.

By targeting Wall Street, the current upsurge and wave of resistance also underscores the connection between financial power and government. The state has always functioned to enforce and stabilize the relations of production. These relations form the basis of class power and are surrounded by laws, regulations and methods to mediate conflicts.
Consensus and coercion is the dialectic of capitalist hegemony. However weakened, a degree of democracy and economic opportunity are essential aspects of bourgeois society inherited from its revolutionary beginning. This is why the loss of jobs and democratic influence are felt so deeply as a betrayal, and resistance often expresses as a desire to 'take back' the country and government. To connect to the disappointment and boiling anger of the current upsurge, the left needs to understand the dynamics of this legacy.

The Democratic Revolutionary Tradition

Workers, farmers, peasants and the poor were at the heart of the revolutionary upheaval that rid France of its aristocratic ruling class. Protection of property rights and markets for the capitalists shared the stage with liberty, equality and fraternity for the masses. In North America a similar set of working masses with European roots fought one of the first great anti-colonial wars under the leadership of the rising bourgeoisie and slave-owning planters. Alongside property rights was the Bill of Rights guaranteeing free speech, assembly and press. The other upheaval in the New World was the Haitian Revolution, where all classes were inspired by the French revolt, but where the powerful dynamic of a slave revolt added to its democratic character. Out of these revolutions came notions, however flawed with the birthmarks of the old order, of citizenship, human rights and a new nationalism.

From its inception capitalist society was thus a political and economic compromise between workers and farmers and the capitalist class. The idea that men were born free and equal was inscrolled in the Declaration of the Rights of Man and Citizens as well as the Declaration of Independence. This was as fundamental a part of the new societies, as was slavery and the inexorable logic of capitalism to exploit labor and nature. Over the years these rights have been challenged by the right and left, contracted and expanded. In large measure, that historic process is the wellspring that sparked the current insurgency today.
Background to the 'Social Contract'

The economic social contract has a long history in Western society and is closely tied to imperialism. In 1895 British imperialist Cecil Rhodes wrote:
I was in the East End of London yesterday and attended a meeting of the unemployed. I listened to the wild speeches, which were just a cry for 'bread,' 'bread', and on my way home I pondered over the scene and I became more than ever convinced of the importance of imperialism...My cherished idea is a solution for the social problem, i.e., in order to save the United Kingdom from a bloody civil war, we colonial statesmen must acquire new lands for settling the surplus population, to provide new markets for the goods produced in the factories and mines. The Empire, as I have always said is a bread and butter question. If you want to avoid civil war, you must become imperialists.

This strategy, so well articulated by Rhodes, established a sector of the working class with middle-class incomes founded on the exploitation of global labor in the colonized world. A few decades later Henry Ford added a new dimension when he doubled the wages of his auto workers so they could buy his cars. And after W.W. II, under massive pressure from the working class and an era of economic expansion, home ownership, health care, good education and rising wages formed the basis of the 'Golden Era' of Western capitalism. Social Democracy in Europe and the New Deal in the U.S. meant a significant sector of the capitalist class accepted the social contract and the stability it brought to the system, and it thus became an important construct of the dominant hegemonic bloc. In the U.S. military Keynesian policies also underwrote the consensual aspect that laid the foundation of support among many workers.

But the contradiction between the rights of private property and the rights of society become particularly intense during period of crisis when the capitalist class has less room to solve social tensions. Capitalism, as a competitive system of accumulation has an internal logic to push labor and nature to extreme limits of exploitation, and it rarely will shy away from the use of violence to achieve its ends. This has been the constant reality for people in the global South. In the West the history of democracy also came with jailing, beatings and death. This was true during all the great social movements of women, minorities and unions. But unlike the global South were armed struggle was the primary path to independence and self-determination, the Western countries maintained enough flexibility to adapt to many of the democratic and redistributive demands of the working class. This flexibility existed, in large part, because of the democratic content of the bourgeois revolutions, a content that imperialism rarely, if ever, extended to the third world.

The Social Structure of Accumulation

The ability of Western capitalism to embrace aspects of economic and political democracy were incorporated, after World War I, into a Keynesian social structure of accumulation (SSA).# As William Tabb explains; "In each SSA there is a regime of accumulation, labor relations, taxation, spending priorities of government, and regulatory norms consonant with the composition of dominant class alliances and the ideological predilection favored by this historic bloc."# In post W.W. II society that restructuring resulted in rising wages, unions that guaranteed health care, job protection, pensions and eventually the incorporation of affirmative action for minorities and women.

Starting in the mid-1970s, this reigning Keynesian SSA was replaced with neo-liberalism. With the globalization of finance and production, long-term industrial commitments were replaced with speculation over short-term stock prices, transnational assembly lines, outsourcing, part-time and contingent labor and a general reduction in living standards and conditions of work. With the new neo-liberal accumulation model in place, the narrowing of democratic space was a parallel political development.

From its inception, global capitalism fostered a greater centralization of economic and political power. It was driven by the cold logic of efficiency and profitability without any democratic concerns or the burdens of social responsibility. Fundamental aspects of economic governance were put in the technocratic hands of the International Monetary Fund (IMF), the World Trade Organization (WTO), the World Bank and other transnational institutions. These were designed to be far removed from democratic input or control on the nation-state level. This project was lead by the transnational capitalist class, that sector of capital whose profits and power are embedded in patterns of global accumulation.

The TCC came to power in the 1980s as a growing sector in all Western governments, as well as in many countries of the global South under the onslaught of neo-liberal policies. While united by a common project of 'Empire' to build a world of unrestricted and integrated capital, this new hegemonic bloc also retained some specific national characteristics. Each nation was drawn into global finance and production at its own pace determined by local conditions. This long drawn-out process is full of contradictions, competing visions and policies. But key elements are in place that have situated a great amount of economic and political power in the hands of the TCC, with its inherent impulse towards centralization and technocratic authoritarianism.

Rise of Global Authoritarianism

Under the TCC new political and economic regimes were established in the North and South. The new authoritarian structure manifested its most severe character in the global South where the first post-1960s economic crises broke out. Using the IMF, transnational capital enforced draconian Structural Adjustment Programs and raided state-owned industries through forced privatizations. Economic governance emanated from transnational institutions with the bureaucratic functionaries of the TCC restricting and transforming national control. Such forms of domination were different from earlier era imperialism, where countries belonged to their colonial overlords. Then capital didn't have a singular global identity, but a specific national one tied to the various 'Great Nations.'

In the North changes began during the Reagan/Thatcher years, and although racked by periodic crisis, the neo-liberal social structure of accumulation maintained hegemony for 30 years. But now the economic collapse that hit the capitalist heartland in 2009 has laid bare the deep systemic problems that makes a rebuilt SSA necessary and formation of a new hegemonic bloc.
The question before us presently is to understand the context and character of the current global crisis and its implications in the struggles for popular and economic democracy. Will the social crisis create a more authoritarian capitalism with greater restrictions on democracy, or a progressive alternative entailing a decisive defeat of neo-liberalism? As in every period of severe social crisis, a reactionary movement can take power. But progressive and revolutionary movements can also take shape and form a counter-hegemonic bloc. In past crises, movements arose within an international system of nation states. The crisis now takes place within a more deeply integrated transnational system lead by finance capital. We believe the global character of contemporary capitalism helps determine the nature of the reactionary threat as well as the shape of the emerging progressive bloc, and so the following discussion bears weight for left strategic thinking in the coming period.

Imperialism has often exported its economic problems to the third world. But now the chickens have come home to roost. Capitalism can no longer offload its crises because the doors between the South and North have been pushed wide open. Access to two billion new low-wage workers in China, India and former socialist countries has resulted in the shredding of the social contract on the home front. The result has been 'race to the bottom' policies resulting in growing unemployment in the E.U. and U.S. In addition the digital-information revolution created technologies that have displaced a generation of unskilled and semi-skilled workers in far larger numbers than any new technical sectors. This growing organic composition of capital fueled a falling rate of profit. With unemployment spiraling upwards and wages spiraling down, capitalists pumped up the economy with hundreds of new speculative markets, expanding consumer debt and the housing bubble. It was a structure built to collapse and when it did, finance used its power over government to bail itself out, while ignoring or discounting everyone else.

Beginning in the Reagan-Thatcher years, the transition of national economies into an integrated global economy was accompanied by attacks on government services. But with the current crisis, the severity of these attacks have reached new heights, with economic recovery defined as a defeated working class ready to accept any wage and a barely minimal social safety net. These attacks are the flip side in the global North to the Structural Adjustment Programs enforced by the IMF in the South. As the economic crisis hit with full force, the TCC has offered nothing but further neo-liberal austerity programs or limp stimulus policies that have utterly failed to resolve their problems. Now Ireland, Portugal and Greece are being treated in the same manner the IMF treated Thailand, South Korea, and Indonesia when the Asian crash occurred in 1997.
The destruction of Greek independence on the altar of transnational bond holders exemplifies the expanding power of authoritarian capitalism. Greeks find themselves deprived of any semblance of control over their own political system. When Prime Minister George Papandreou attempted to let Greeks vote on the unforgiving E.U. bail-out agreement, he was quickly summoned to his TCC overlords for daring to assert an iota of national sovereignty. Or as the Financial Times put it, for having the "disruptive desire for democratic legitimacy." The message was clear, authority resides with hierarchical power structures outside the nation, and those inside national governments must implement policies in-line with TCC priorities.

It doesn't take a radical to see the growing crisis of democracy. Neo-Keynesian economist Paul Krugman writes:
We have a society in which money is increasingly concentrated in the hands of a few people, and in which that concentration of income and wealth threatens to make us a democracy in name only. We still like to think of ourselves as a middle-class country. But with the bottom 80 percent of households now receiving less than half of total income, that's a vision increasingly at odds with reality... extreme concentration of income is incompatible with real democracy.

The Transnational Character of Finance Capital

The authoritarian nature of global financial capital doesn't spring from an affinity to reactionary nationalism. It springs largely from the opposite, its alienation from financial bonds embedded in national relations of production. We can look at some economic data to explore the deeply transnational character of finance capitalism. According to the Bank for International Settlements (BIS) the externally held assets and liabilities of banks as of June 2011 was over $61 trillion dollars, almost equal to the world's GDP. In the table below we can examine the external assets of banks from ten major countries. These are not the top ten, but the table gives a spread of major countries throughout the world. Offshore centers are also important, holding 14% of world totals. The BIS list 22 offshore banking centers, the Cayman Islands with holdings of over $1.8 trillion is the largest.# Note that the figures below exclude hedge funds, insurance corporations, private equity firms and other non-banking financial institutions.
Externally Held Assets of Banks

Countries	External Assets of Banks (in millions of US dollars)
All countries	$31,566,521
United States	$ 5,406,579
United Kingdom	$ 4,975,113
France	$ 1,907,094
Germany	$ 1,780,817
China & Hong Kong	$ 1,007,014
Brazil	$ 286,270
South Korea	$ 217,912
Turkey	$ 178,555
Russia	$ 148,282
Mexico	$ 127,768

BIS, figures taken from Table 6A.
Another interesting set of statistics is "consolidated foreign claims and other potential exposures." Foreign claims includes cross-border claims, and local claims of foreign affiliates on banking and non-banking sectors of the economy. Potential exposures cover derivatives, extended guarantees and credit commitments. The total is over $42.7 trillion and covers the G10 plus 20 other countries. These figures indicate the profound financial links between transnational capitalists and the co-dependency of the global economy through loans, debt and other commitments. Again the table doesn't show the top ten, but a spread of major countries. We must also recognize that although these figures as listed with national identities, these "national" institutions have deep pools of cross-border investors that give them a fundamental transnational character.

Consolidated Foreign Claims and Exposures of Financial Institutions

Countries	Consolidated foreign claims & potential exposures (in millions of US dollars)
United States	$8,151,786
United Kingdom	$5,259,105
Germany	$2,850,207
France	$2,369,845
China & Hong Kong	$1,269,942
Japan	$1,177,344
Cayman Islands	$1,104,768
Brazil	$ 787,942
South Korea	$ 461,432
Russia	$ 310,658

BIS, figures taken from Table 9E.
This integrated global financial edifice is not overseen by one nation-centric ruling class, but by the TCC as a whole through transnational governance institutions. Such tremendous financial flows need stability in order that the entire structure can avoid collapse. The governance by necessity has to take place within global structures outside the control of any one nation. Therefore, the TCC is driven to gain global authority and power over national laws and interests. The more severe the crisis the more frantic the TCC becomes as bankruptcy spreads, their ideology challenged, and protestors take to the streets. Each nation must bend to the dogmatic prescriptions of transnational finance. But such attempts create greater pressures and tensions producing more instability, not less.

Under such circumstances the TCC may turn to greater authoritarian governance in the quest for stability and to enforce the breaking of the middle class with austerity. Free of democratic restraints and the social contract, the traditional hegemonic bloc narrows to the point where coercion becomes the overriding tool of control. The threat of fascism may then appear as the TCC seeks a new base of popular support among home-grown reactionary nationalists to rebuild their hegemonic bloc. But, as we discuss below, this would be at best an unstable relationship difficult to maintain.

Crisis and the Threat to Democracy

If the crisis endures and deepens, the question becomes whether an important sector of finance will ally with a fascist popular base and use a totalitarian dictatorship to solve its problems. At this point the capitalist class still has any number of repressive tools to work with before abandoning its claim to democracy. Most of the financial sector plays politics pragmatically, funding both parties to maintain their own influence. The majority of Wall Street money went to Obama in the 2008 election. This money is now flowing to the Republicans, but this is more about the Dobb-Frank Bill and other regulatory restrictions pushed by the Democrats, than some move to fascism. The flow can reverse rather quickly.

It's true that we find some committed ideologues, like the Koch brothers, funding reactionary movements. Likewise with Richard Mellon-Scaife money and the Olin family. This is an important danger not to be taken lightly. For example, the Scaife, Koch and Olin families fund the American Legislative Exchange Council whose agenda makes it harder for minorities to vote, undermines health care reform, weakens environmental laws and breaks unions. Through its legislative agenda the group has attracted board members from major corporations including ExxonMobil, Bayer, GlaxoSmithKline, Pfizer, Wal-Mart, AT&T, Kraft, Coca-Cola, State Farm, UPS, Peabody Energy and others.# Consequently reactionary capitalist class activists can facilitate alliances with more mainstream elements around issues that affect specific industrial economic interests.
Reactionary and proto-fascist forces also have deep influence within Republican circles. One manifestation was at the 2012 annual C-PAC conference in Washington, DC. Every Republican presidential candidate spoke to C-PAC which endorsed Romney for president. At the conference, the group ProEnglish organized a panel, 'The Failure of Multiculturalism: How the pursuit of diversity is weakening the American identity.' The host, Robert Vandervoort, is a former leader of a white nationalist organization Chicagoland Friends of the American Renaissance. Another panelist was Peter Brimelow, founder and head of the white nationalist hate website VDARE. In 2009, Brimelow spoke at C-PAC on the "Obama's racial-socialist coup" and expressed his fear that the U.S. is doomed to face a "minority occupation government." He called on the Republican Party to become the party of white voters by attacking "ethnic lobbies," affirmative action, bilingual education and "taxpayer subsidies to illegal aliens." Vandervoort also delivered a speech from Serge Trifkovic that focused on how the "cult of non-white, non-male, non-heterosexual victimhood and multiculturalist indoctrination" is ruining the West. Another C-PAC speaker, Rosalie Porter, bemoaned the Civil Rights Act and the Voting Rights Act for giving too much political influence to minorities.# The fact that Romney and other Republican globalists cultivate these political ties indicate the potential for a reactionary alliance and fascist influenced hegemonic bloc.

But other transnational capitalists like George Soros, Bill Gates, Morgan Stanley executive Stephan Roach and Warren Buffet are in the neo-Keynesian wing of capital. Consequently substantial political splits still exists within the TCC, even if many of the Keynesian intellectual experts like Krugman and Joseph Stieglitz find themselves currently 'out in the cold' from positions of governmental power and influence.
But beyond internal splits within the TCC, the construction of a fascist hegemonic bloc remains problematic. Why? Because it would entail reactionary nationalists and authoritarian corporate globalists working out a political and economic compromise. This is possible, as revealed in the common goal of C-PAC, the Tea Party and GOP neoliberals in defeating Obama at all cost. But it also reveals an unreliable alliance full of instabilities, due to the contradictory relationship between transnational economics and nationalist ideologies which deeply distrust and dislike global governance. Just think of the far right warning against 'The New World Order'---clearly an agenda unwelcomed by transnational capitalists. Another case in point is the reactionary nationalist campaign in Tucson banning Mexican American studies and literally seizing thousands of Chicano studies textbooks and placing them 'under arrest,' forbidding their use in the classrooms. Certainly a problematic fit given that multi-culturalism is accepted and promoted by all globalists factions.

The same problems have appeared in Europe where reactionary parties in Finland, the Netherlands, Hungary and Austria take an anti-globalist political stance. These differences are played out in the political rivalries between dominant neo-liberal conservative parties and the challenge posed by right-wing nationalists. In France the program of Marine Le Pen, leader of the National Front, advocates abandoning the Euro and using the French state to protect national industries. Le Pen's strong anti-globalist stance is undercutting the conservative appeal of neo-liberal Nicolas Sarkozy, and the split may result in a victory for the Socialist Party.

To confuse corporate authoritarianism favored by globalists with national fascism is to overestimate the influence of fascism and underestimate the reactionary character of neo-liberalism. Globalists, by their transnational nature, are lacking the reactionary nationalist character of fascist ideology, even as they work to implement draconian measures. To compare differences between authoritarian capitalism and the current proto-fascist movement it may be useful to consider the classic definition of fascism offered by British Marxist Palme Dutt, working with the contributions of Georgi Dimitrov;

"Fascism (is) the open, terrorist dictatorship of the most reactionary, most chauvinist and most imperialist elements of finance capital, endeavoring to mask its real aims by the most extreme and shameless social and national demagogy, and in this way seeking to build up a basis of support in the population, especially among the petty-bourgeoisie and backward workers..."#
This definition in part reflects Tea Party politics. "Shameless social and national demagogy" certainly fits them as well as some leading Republican candidates for president. There is the targeting of immigrants, minority nationalities, food stamp recipients, gays, intellectuals and Muslims as scapegoats. And the economic crisis is laid on the doorstep of the government while paying little attention to corporate America. The Tea Party base also consists of classic fascist-prone elements from the popular classes such as small businessmen, with a large contingent coming from working-class white males in the South, West and Appalachian regions. In large part, they are retirees living on small pensions combined with social security and limited health care. They are just getting by personally in the crisis, but their situation is often precarious and insecure. They are on the cusp of failure and don't see a 'bigger pie,' and hence see any effort to expand benefits to 'The Other'-Blacks, Latinos, immigrants, the poor--as a threat to their own precarious situation.
The successful targeting of immigrants was revealed in a poll commissioned by the German Marshall Fund of the United States. It showed that Americans believe immigrants are 39 percent of the U.S. population, although 13.5 percent is the actual number. In other words, the perception is almost 200 percent greater than the reality.# Additionally, the Tea Party is steeped in both American nationalist and 'white' nationalist symbols, gun culture and irrationalist rhetoric about saving America from its perceived internal enemies.

As for the potential for anti-popular violence and 'open terror', we cannot ignore a serious threat among the far right 'Christian dominionist' organizing in the military, and mercenary forces such as Blackwater/Xe. Blackwater founder Charles Prince has well known ties to the extreme right-wing. Moreover, there still exist various armed militias throughout the U.S. We should also point to a small but constant fascist base among right-wing Christian fundamentalists more widely active in various political campaigns.

At this point, the Tea Party and other elements of the far right comprise somewhere between 10 and 20 percent of the electorate, depending on the region. Taken by themselves, this is not yet a major threat. But when combined with the neoliberals in the Republican party, their power is enhanced to the point of being able to 'deadlock' Congress on a range of issues. A Republican presidential victory would consolidate this alliance as a ruling hegemonic bloc.

Given the above reality, the left needs to be vigilant about the linking of authoritarian globalists and nationally rooted reactionary forces. Even so, the left also needs to be wary of the boy who cried wolf too often, where every time a police billy club swings we cry "fascist!" Our language is important in explaining ideas and speaking to a broad audience. Political strategy easily falls short when rhetoric fails to met objective reality and is out of sync with the popular perceptions of political conditions.
Fascism is rightly understood as a totalitarian dictatorship in which people can't speak freely in fear of secret police and the total suppression of constitutional freedoms. It is not just racist, imperialist and repressive-U.S bourgeois democracy has had those features for centuries. Apart from a powerful popular upsurge that approaches insurrection, it is unlikely that authoritarian capitalism will need to assume an extreme dictatorial structure, at least for the entire population.
The left also needs to remember its own history of isolation and acts of desperation due to an overestimation of the fascist danger. The Communist Party faced a real fascistic danger during the McCarthy period. But defining the threat of fascism as "imminent" resulted in sending hundreds of leading cadre underground and limiting mass work. This played into the hands of the FBI, helping to undermine the Party's influence and eventual playing an important role in many leaving the organization. The Black Panther Party saw the Nixon administration as fascist, which factored into the splitting off of the Black Liberation Army and acts of robbery and murder. The Weathermen were also affected by similar conceptions and replaced mass organizing and mobilizations with pseudo 'armed struggle'.

During previous repressive periods there were returns to democratic legitimacy because the capitalist class was still firmly invested in national institutions and the national market. Global capitalists lack such roots and consequently their alienation from the nation state makes it easy to discard important aspects of formal democratic norms in both political and economic realms. The crisis has not led the TCC to desert neo-liberalism, but to defend it adamantly, albeit with more flexibility. So the threat to democracy in some ways is more dangerous from this quarter than from native-grown fascism. Why? Because authoritarian capitalism arises from core elements of the TCC, not an extreme and more marginal reactionary wing of local and anti-global nationalists.

At the same time authoritarian capitalism is more likely to retain limited democratic openings not found in fascist dictatorships, such as the multi party system, the constitution and aspects of free speech and press. But this would be in conjunction with moves that limit mass protests, narrows access to the internet, targets the left with repression, abandons the social contract and moves real political authority to transnational bodies out of reach of popular electoral control via the WTO, IMF, G20 agreements, and so on.

In part, this is what Chicago activists have already seen from their new mayor, Rahm Emmanuel. With the G8 and NATO coming to town Emmanuel wants to present Chicago as a global-friendly city for his transnational compatriots. To insure order, he limited the time and place for protests, ordered the pre-registration of banners, announced the early closing of parks and doubled fines for resisting arrest. Confronted by protest organizers, labor unions and civil liberties groups he backed down on some, but not all aspects of what has been labeled the "sit down and shut up" ordinance. The fact that Emmanuel comes out of the Clinton and Obama administration shows that the authoritarian impulse emanates from both local political wings of the globalists.
It's not only the left that is worried about attacks on civil liberties. Convinced of growing social unrest George Soros commented:
"It will be an excuse for cracking down and using strong-arm tactics to maintain law and order, which, carried to an extreme, could bring about a repressive political system, a society where individual liberty is much more constrained, which would be a break with the tradition of the United States."#
Building the Progressive Hegemonic Bloc
To counter the consolidation and continued growth of authoritarian capitalism, a progressive counter-hegemonic bloc must be built. This seemed to be taking place around the 2008 Obama election--with the mobilization of youth, minorities and unions in alliance with the neo-Keynesian centrist and center-right wings of the TCC. With the GOP's upturn in the 2010 election and its domination of the House of Representatives, Obama was put on the defensive and the progressive majority within the bloc that elected him was weakened.
The TCC, for its part, has been split into three general factions since the 1997 crash in Asia, when the crisis caused a crystallization of different policy solutions. The foremost faction has been free market fundamentalists who dominated the neo-liberal movement during the Reagan-Thatcher period and still maintain major influence within finance capital. The structuralists wing came into influence during the Clinton years with Larry Summers and Robert Rubin. They advanced the neo-liberal agenda with further deregulation of financial markets, but also argued for a semi-Keynesian governmental role to bail out elite institutions and create greater stability. Finally, liberal regulationists and neo-Keynesians like Krugman and Stieglitz turned away from neo-liberalism, seeking a greater role for the government in solving the more extreme social and economic inequalities resulting from globalization.# Their followers have largely been removed from the ruling coalition, leaving them to make overtures to progressives and the left.
Obama could have built a ruling alliance between the structuralists and neo-Keynesians, but instead choose an alliance between the structuralists and free market fundamentalists - a clear shift rightward. Neo-Keynesians were frozen out while Summers and Timothy Geithner worked with Wall Street bankers on all major economic issues. This led to insufficient stimulus policies and growing inequality, while profits and bonuses swelled for the TCC. The result has been a deepening of political alienation, questioning the legitimacy of democratic rule and the rise of the Occupy Wall Street movement.

The failure of Team Obama to consolidate a progressive hegemonic bloc has created a radical contradictory process. The Occupy Wall Street movement is largely independent of the Democratic Party, unlike the progressive upsurge of Obama's electoral campaign. It has also energized unions back into the streets and created the conditions for wider mass mobilizations around key economic and social demands. Furthermore, it has energized progressive voters in the Democratic orbit, even without any formal connection to them. Such an independent and militant movement may create political conditions similar to the mass protests of the Great Depression that forced Roosevelt to create and expand the New Deal.

Additionally Obama's failures has pushed the neo-Keynesians into a sharper and more critical analysis, not only of White House policy, but of structural problems within capitalism. For example, a report titled "The Way Forward" by Daniel Alpert, Robert Hockett and Nouriel Roubini targeted the globalization of production, access to billions of new workers and overproduction as structural problems that have "shifted the balance of power between labor and capital resulting in levels of income and wealth inequality not seen since the immediate pre-Great-Depression 1920s. "# A cornerstone to their solution is a five to seven year program with $1.2 trillion of public investments in areas such as clean energy, green manufacturing and transportation, and education that would produce 5.52 million jobs each year.
These developments sets the stage for building a counter-hegemonic bloc in which progressives have greater voice and independence, rather than acting simply as electoral shock troops tailing the Democrats. There is an opening to grow a major progressive force still within the coalition, but considerably to the left of the White House. At the same time this can undercut the attraction of the Tea Party, its ability to mobilize around reactionary slogans, and the consolidation of authoritarian capitalism. A key to this strategy is to maintain focus on mass organizing and the defense of democracy against authoritarian limitations. A misreading which makes fascism the dominant danger can easily result in isolating tactics and over blown rhetoric. If we are the 99 percent then the united front must be broad and open and the main blow consistently aimed at the 1 percent and their defenders.

The final question is can a progressive bloc go beyond a program for jobs, peace and less inequality, to having the grassroots power and political and analytical clarity to force capitalism to abandon neo-liberal globalization and eventually move on to an alternative socialist and sustainable society? This raises the relationship between reform and revolution and whether globalization is the final stage of capitalist development. However, without building a progressive counter-hegemonic bloc with a militant and mobilized base, and a dynamic, unified and expanded left wing, we'll never know the answer.

References:

[1] Beaud, Michel. A History of Capitalism 1500 - 1980. Monthly Review Press, New York, 1983. ps. 139- 140.

ation, October 2011. p. 3.
Arlidge, John. "George Soros on the Coming US Class War." Newsweek, January 24, 2012.

[1] Reich, Michael, David Kotz, and Terrence McDonough, eds. Social Structures of Accumulation: The Political Economy of Growth and Crisis. Cambridge: Cambridge University Press, 1994.

[1] Tabb, William K. The Restructuring of Capitalism in Our Time. Columbia University Press, New York, 2012.
[1] Krugman, Paul. "Oligarchy, American Style." New York Times, March 11, 2011.

[1] Mallo, Carlos & Stephan Binder. "Detailed tables on preliminary locational and consolidated banking statistics at the end-June 2011." Bank for International Settlements, Monetary and Economic Department. Basel, Switzerland. October, 2011.

[1] New York Times Editorial, "The Big Money Behind State Laws." New York Times, February 12, 2012.

[1] Tashman, Brian. "Right Wing Watch: Steve King and White Nationalist CPAC Panel Warn that America's Greatest Threat is its Diversity." www.rightwingwatch.org/content, January 9, 2012.

[1] Dutt, Palme R. Fascism and Social Revolution, International Publishers, New York, 1935. p. 10.

[1] Brothers, Caroline. "Perceptions of Migration Clash with Reality, Report Finds." New York Times, December 5, 2011.

[1] Davidson, Carl & Jerry Harris. "Globalisation, theocracy and the new fascism: the US Right's rise to power." Race & Class, Vol. 47, No. 3, 2006.

[1] Robinson, William, Jerry Harris. "Towards a Global Ruling Class: Globalization and the Transnational Capitalist Class." Science & Society, Vol. 64, No. 1. Spring 2000.

[1] Alpert, Daniel; Robert Hockett, Nouriel Roubini. The Way Forward. New American Foundation, October 2011. p. 3.

[1] Arlidge, John. "George Soros on the Coming US Class War." Newsweek, January 24, 2012.

A Memorial to Henry Winston

Fri, 24 Feb 2012 13:50:00 +0000

On February 19, 2012 a memorial was held at Winston Unity Center honoring the 100th anniversary of the birth of Henry Winston.

Below are links to published versions of speeches and remarks at the memorial.

The remarks of Jarvis Tyner, Executive Vice-Chair, CPUSA.
The remarks of Angela Y Davis, Professor Emeritus, University of California, Santa Cruz.
The remarks of Charlene Mitchell, co-founder of the Committees of Correspondence for Democracy and Socialism.
The remarks of Daniel Rubin, long-time colleague and comrade of Henry Winston.
A biographical note
Selections from Winston's writing.
Official Memorial Brochure.

Cuban Oil Exploration Opposed by U.S. Right

Fri, 17 Feb 2012 06:05:00 +0000

On Monday January 30, the Coast Guard and Maritime Transportation Subcommittee of the U.S. House of Representatives Committee on Infrastructure met in Florida to hear testimony about the possible impact of new deepwater oil drilling off the Northwest coast of Cuba. . Republican politicians, especially those based in the conservative Cuban exile community of South Florida, as well as some Democrats, have been trying to stop the drilling, even though some of them are actually on record as supporting drilling for oil off the U.S. East Coast, and the controversial “fracking” process and the Canada-U.S. oil pipeline. Although these politicians take a stance of defending the U.S. coastline from damage similar to that of the 2010 Deepwater Horizon oil spill, they also have a political agenda of preventing Cuban oil self-sufficiency.

But instead, the situation points to the crying need to end the 50 year U.S. blockade of socialist Cuba, and the normalization of relations between the two countries.

Earlier in January a Chinese built deepwater oil drilling platform, Scarabeo 9, was anchored in place off the Northwest coast of Cuba. The platform will be operated, in agreement with the Cuban government, by a consortium of foreign enterprises, of which the most important is the Spanish Repsol company.

Cuban scientists believe that there may be as many as 20 billion barrels of crude oil reserves a mile or so below the surface. This could be a game changer for the economics and politics of the region. Since the collapse of the Soviet Union, one of Cuba's greatest difficulties has been that of getting hold of enough oil for electrical generation and industry. Cuba has a small amount of land based oil production, but the quality of oil is not good. More recently, Cuba has been able to import oil on generous terms from Venezuela. But to have its own plentiful supply of oil will mean not only that all worries about supplies come to an end, but also that Cuba can become a net oil exporter, which will allow it to play a stronger role regionally and worldwide, as well as improving the living standards of its own people.

Why not go green instead? Cuba already has been doing more than most countries, and vastly more than the United States, to develop renewable energy sources. When Soviet supplies dried up, Cuba was forced to re-think its energy policy, but now those emergency adaptations have been worked into a coherent and advanced “green energy” philosophy, which the country is implementing. In international forums, Cuba has forcefully taken the side of those countries which are most endangered by the effects of global warming to argue for stronger measures to limit use of fossil fuels and thus cut greenhouse gases.

Cuba has more than enough sunlight for solar energy to eventually replace fossil fuels for many purposes. Cuban agriculture also produces waste products which can be tapped for energy. This includes, notably, bagasse, the material left over from the processing of cane for sugar production. Other agricultural, livestock and forest waste are also being explored as sources of renewable energy. Existing hydroelectric generation capacity can also be built on.

However, Cuba has abandoned the idea of developing nuclear power generation, and opposes the conversion of land used for the growing of food crops to crops used in energy generation, as potentially endangering the world's food supply.

Cuba has also made notable strides in reducing wasteful electricity use. All incandescent light bulbs in Cuban homes have now been replaced by much more efficient fluorescent bulbs, and electricity rates for Cuban consumers reward households who keep their electricity use low. The Cuban government also initiated a campaign to replace old, electricity wasting household appliances with newer models that conserve energy, giving away many appliances free.

As with health care and education, the Cuban government has incorporated technical assistance in the development of renewable energy into its many overseas aid missions to poor countries regionally and worldwide. So nobody - least of all the United States, which accounts for 23% of the world's oil consumption with 5 % of the world's population, and historically has been the biggest contributor to greenhouse gas generation - can accuse Cuba of being backward in terms of renewable energy and energy conservation.

However, Cuba's financial limitations act as a break on the development of renewable energy, which inevitably involve startup costs for research and development and the creation of some new infrastructure. The point at which Cuba or anybody else can drop the use of fossil fuels entirely, has not yet arrived. Ironically, the breather that the new oil discovery may give it could hasten the “greening” of Cuban energy use, because it will give Cuba capital for changing its infrastructure and starting new wind, solar, biofuel and other projects.

A huge impediment is the 50 year U.S. economic blockade of Cuba, which makes the importation of new technology vastly more expensive. The Cubans call the U.S. policy a “blockade” instead of an “embargo” because the United States not only will not allow its own companies to trade with Cuba, but also threatens foreign companies who trade with Cuba with sanctions, and forbids them from selling to Cuba items which contain components made by U.S. companies. Although the Obama administration has loosened some restrictions on travel to Cuba, the Cubans complain that on the other hand, it has increased enforcement of the blockade. But the very existence of the blockade presents a problem for anyone sincerely worried about what would happen to Florida's coasts and reefs if there were some kind of accident like the giant spill at BP's Deepwater Horizon's well in 2010. Technical specialists have been pointing out that given the blockade, it might be difficult for U.S. companies to mobilize resources to pitch in to deal with such a disaster, and have urged that contingency planning between Cuba and the United States be set up as soon as possible to assure that coordination takes place. At writing, it appears that the Obama administration may follow this commonsense approach.

But some of the politicians who grilled U.S. officials and technical experts at the subcommittee meeting on January 30^th were not mollified by reports from U.S. Interior Department officials who had boarded Scarabeo 9 and inspected it enroute to Cuban waters, and for the most part expressed confidence that things were being well handled and that the danger of a spill was minimal. The real agenda of the right is to prevent Cuba from breaking out from the effects of the U.S. blockade using the newfound oil wealth. Neither U.S. Representative Ileana Ros-Lehtinen nor Representative David Rivera are on the Coast Guard Subcommittee, but they are South Florida Cuban exile Republican politicians who have based their political careers on attacking the Cuban Revolution. Ros Lehtinen has introduced legislation intended to punish Repsol and other third party companies who are participating in the Scarabeo 9 operations. Rivera, for his part, dramatically demanded that Repsol must “bleed” if anything goes wrong.

As a sovereign, independent country, Cuba has every right to do what it is doing. People in the United States who are sincerely concerned about the environment should urge the Obama administration to ignore people like Ros Lehtinen and Rivera, and work closely with Cuban authorities in developing emergency response protocols in case of any accident. Maybe that can show the way to the most urgent priority, which is to end the blockade.

Why are we still stuck with failed U.S. policy on Cuba?

Wed, 15 Feb 2012 11:50:00 +0000

Over a half century is a long time, but the blockade of Cuba goes on, seemingly with no end in sight. When it was announced in October of 1960, and then tightened by President Kennedy two years later, who ever thought that it would still be in effect 50 years later?

Then and now there is no good justification for this punitive policy. It is against the best interests of the U.S. as well as the Cuban people. Cuba is not a threat either to our security or to the countries of Latin America.

Common sense would seem to dictate a complete reevaluation of our policy, but that has been lacking in Washington.

The blockade - not to mention the other forms of subversion carried out or sponsored by the U.S. - has not toppled the Cuban government in the past and it is safe to say that it won't in the future. Indeed, under the leadership of the Communist Party of Cuba, the Cuban people are retooling their form of socialism to make it more effective in the 21st century.

Moreover, in recent years we have normalized our relations with socialist China and Vietnam.

And yet normalization of relations with Cuba seems dead in the water. What explains the tenacity of this retrograde policy?

Now some will argue that the right-wing Cuban emigré community in Miami drives our government's policy toward Cuba. And they are correct, but only up to a point.
To leave matters here obscures the role of the U.S. ruling class.

While the ruling class is not of one mind as far as relations with Cuba are concerned, sections of the ruling elite still oppose even the slightest change in policy - let alone the lifting of the blockade. What they didn't like a half century ago and don't like now is Cuba's decision to exercise its sovereign right to build socialism so close to our shores.

A socialist society oceans and continents away is one thing, but one only 90 miles from Miami is another. It was and is considered a frontal challenge to U.S. dominance in the Americas - a region of the world that we controlled with dollars and gunboats for more than a century. But that era is over.

A new Latin America, inspired by the Cuban revolution, is being born.

Cuba as well as other countries in the region that are pursuing an independent path of development want amicable and equal relations with our government and people, but not at the cost of trading away their patrimony and independence.

The sooner our leaders realize this fact the firmer the ground will be for mutually beneficial interactions between our country and theirs.

It is unlikely that much progress in resetting relations with Cuba will occur in this election year, even if the president were so inclined. The shrill anti-Cuba rhetoric of Romney, Gingrich, Santorum and other Republicans probably militates against any sober and sensible discussion of the issue.

It also underscores the likely turn for the worse in U.S.-Cuba relations if the Republican right gains control of the White House and Congress in the coming election. In fact, if this occurs, even the unthinkable - armed intervention - becomes a possibility.

One thing that the past half century has made clear is that foreign policy can't be left to the politicians, generals, and corporate brass to decide. Too much blood and treasure is at stake. The people must intervene. End the blockade!

Capitalism: A Work in Progress and Regress

Tue, 14 Feb 2012 20:42:00 +0000

Capitalism: A Work in Progress and Regress

Capitalism differs from all previous systems/modes of production in a number of ways. Capitalism constantly seeks to expand( and in the process both creates and destroys) productive forces routinely. All systems which preceded capitalism sought to conserve existing productive forces in the interests of ruling classes, under ancient slave systems/modes of production and feudal systems /modes of production.

Capitalism also brings with it ideals of freedom and equality as against all systems/modes of production which preceded capitalism, which relegated freedom and equality to some spirit world in heaven, or through higher levels of a re-incarnated existence -- beliefs one finds in the world's leading religions.

But real inequalities become more visible under capitalism and objectively greater than ever before. Capitalism seeks to constantly expand production for exchange (sale) and profit while concentrating it in the hands of owners/investors/employers of labor---labor through its production of goods is the source of the wealth.

In those cases where capitalism also leads to masses of people gaining formal political rights through elections over the choice of political leadership of the government, it establishes the possibility of masses of people using political power to restructure the system and distribute income and opportunity in ways that threaten capitalist concentration .

However there is a central and under capitalism irreconcilable contradiction when it comes to peoples use of political rights to gain greater economic wealth and power . Capitalist states/governments, whether the masses of people have formal rights or not, like all other states in class divided societies which preceded capitalism, work effectively with the owning/ruling class to sustain their wealth and power.

Formal freedoms/rights and effective freedoms/rights are very different things under capitalism, although the former usually provide a necessary condition to achieve the latter. For the working class majority, the struggle for equal rights becomes the struggle to make formal rights /freedoms effective rights/freedoms, which they always are to ruling classes to begin with. This means challenging and redefining ruling class definitions of freedom , democracy, and equality.

In pre capitalist societies, everyone in principle knows his or her place and was expected to live and work within that place and prepare future generations to do the same. In capitalist societies, in principle, the system provides everyone with the possibility or opportunity of rising above his or her place by accumulating wealth through competition with others in a "free market."

But the huge expansion of wealth under capitalism in a context where no one is really supposed to know his or her place produced in reality the greatest inequalities in history-concentrations of wealth and privilege which are clear to anyone walking around a major city, reading magazines or watching television, individuals like Warren Buffet and Bill Gates with the net worth of small countries on the same streets cheek and jowl with homeless people.

And the differences are really greater than in societies which preceded capitalism.

As William Hinton noted in his classic study of the early Chinese Revolution, Fan Shen, the Chinese landlord class had access to food and homes and furnishings and of course property far greater than the debt ridden and sometimes starving poor peasants and landless laborers ;but the differences between what they had and what they could get was objectively small when compared to the differences between the capitalist upper classes and workers in the U.S and other advanced countries.

In pre-capitalist societies, also, religion or, as in China, Confucian philosophy justified inequality as a necessary part of the natural order.

Capitalist Justifications of Inequality

Capitalist ideology has dealt with this contradiction in a number of ways. The simplest and the most common has been to define it as "the price of progress". This justification appears and re-appears or has been recycled under many guises-- from Adam Smith in the 18th century to the followers of Milton Friedman in the 21st.

Limiting the accumulation of wealth, in these views, is interference with the "natural order" of the marketplace and can only lead to greater overall poverty and misery, less and less production and consumption, and greater inequality.

In the late nineteenth and early 20th centuries for example, defenders of laissez-faire capitalism often defined socialism as a return to feudalism, an "industrial feudalism" in which the masses of people would become impoverished serfs providing tribute to state bureaucrats (views which in the late 20th century were revived under a variety of headings, ranging from the resurrected "trickledown theory" to the present day ravings of "tea party" Republicans)

Social Darwinism, which connected the accumulation of private wealth with natural superiority and the failure to accumulate wealth with inferiority became in Europe and to a lesser extent North America a rationale for inequality with the caveat that the survival of the fittest(those who successfully competed to accumulate wealth) would see also the dying out of the unfit(the lower classes failures who were not only responsible for their poverty but whose very existence was an economic drain on society) .

These views reached their most sinister expression in Hitler fascism's merging of Social Darwinist ideology with a collectivist racism, launching a world war to organize all productive forces and social relations on a pseudo-scientific racist theory of a hierarchy of peoples where the racially defined "fittest"("Nordic Aryans" led by a European based German Empire) would exploit and ,where they wished ,exterminate all other peoples, the way humans exploited various species of animals and exterminated animals to clear "living space" for human habitation.

I have dealt with this sordid history of capitalist theory and practice as it has dealt with the contradiction of its promise equality of opportunity and the reality of its producing greater inequality and insecurity, because the worst of that history is far from over. The last sixty five years have seen capitalism as a world system suffer great defeats and, in the last few decades, make a large comeback, rather like the titles and the plot lines 4th and fifth films of the six part the Star Wars serial, A New Hope, and The Empire Strikes Back

A New Hope

A coalition of Left-Center nations and movement s defeated fascism in WWII, providing a "new hope" through the world.

The advance of Communist and socialist parties, anti-imperialist national liberation movements, labor based political parties and the governments they are created, came to lead, or influenced , in the period from the 1930s to the 1970s saw the greatest global reduction in measurable terms of income inequality along with increased access to education, and, although this was very uneven, employment and health care in human history

The existence of Communist led socialist governments in China, the Soviet Union, Eastern Europe and later Cuba and Vietnam, along with a socialist oriented neutralist government in India and various social democratic governments in Western Europe and socialist influenced nationalist regimes in the Near East and Africa collectively threatened or at least appeared to threaten the capitalist world system with eventual destruction, as more and more of the world potentially was taken out of capitalist production

These governments, some to construct socialism, others to advance reforms that would prevent Communists from coming to power, others still to find a "third path" of their own, pursued policies which, even with their many failings and the deleterious global effects of cold war politics and national and ethnic rivalries, did produce greater equality than ever before-a "golden age," of sorts, as the British Marxist historian Eric Hobsbawm contended.

State/government policies protecting labor from the "market" in terms of the import of foreign goods and capital, establishing various state subsidies for food prices, minimum wages, expanding public education systems, and establishing direct public ownership over areas of the economy, served as the basis for this period of progress and higher real living standards and for that matter "economic growth" globally, not any resurrection of "free market capitalism."

But capitalism, given a class struggle which is always in existence whatever forms class consciousness may take, is much more secure with insecurity and poverty for the masses of people than it is with prosperity and progress. Since its profits derive from labor, it has always connected its own security and prosperity with its ability to make labor cheaper and cheaper, even if that leads to stock market crashes, industrial breakdown, and catastrophic losses to groups of capitalists in economic crises.

The socialist challenge and especially the Soviet achievement globally "contained" the worst capitalist abuses. But a socialist global economic system/mode of production did not come into existence with the great expansion of socialist states after WW I to challenge the capitalist mode of production, although the Soviet Union did seek with some success to create a regional system that connected it to its Eastern European allies.

The great Communist led societies, the Soviet Union and the Peoples Republic of China became rivals and in effect enemies after 1960. The enormous expense of cold war based military spending undermined the Soviet economy particularly and served as a roadblock to Soviet economic reforms that would have made Soviet socialism both more efficient and more attractive to both its own people and working people in the industrial capitalist countries.

National Liberation struggles in former colonial regions, even when they produced political revolutions that were socialist oriented, still had to not only develop but employ feed and clothe people in what was a world capitalist system.

Many of these nations did receive aid from the Soviet Union and some of its allies, particularly the German Democratic Republic and later for Africans, Cuba. But there was no socialist IMF, World Bank, or global trade organization to organize international economy.

Also, the IMF and world bank particularly, whatever progressive features they had represented in their early decades in terms of supporting public sector activities in developing countries, began to turn to "free market development" by the late 1970s, which meant opening up economies to trade and investment, to the free flow of goods and capital, and eliminating government subsidies and public sector protections that served as roadblocks to such development.

The Empire Strikes Back-or "Progress and Poverty, Part Two"

Steve Fraser, a former PH.D student of mine and the author of a fine study of Sidney Hillman and American labor, recently wrote about contemporary U.S. society as a "second gilded age," a time when state /government policy has made possible huge increases income and asset inequality and social insecurity for youth seeking education and employment, for senior citizens seeking to live dignified lives in retirement, for the overwhelming majority of people.

Just as in the first gilded age of the late 19th century, inequality and insecurity has developed against the background of great advances in technology-railroads, large factories, advances in construction and communications, mass produced consumer products from clothing to canned goods in the first gilded age, computerization of machines and information, along with advances in the automation of productive processes in the second.

In the first gilded age, capital made the working class pay for the new technologies and new large corporations with periodic layoffs, wage cuts, longer hours of work, the loss independence in and control over the work process.

Millions of farmers, artisans, small business owners, lost their land and businesses and were compelled to compete with each other to sell their labor at the lowest price possible to employers who built monopolistic trusts that stifled the very competition that capitalist ideology hailed.

The security and protections and benefits of the system of commercial capitalism, far less productive in terms of the quantity and variety of goods produced and consumed, were being destroyed before the eyes of the masses of people, creating the opposite of what was considered normal, that is, more poverty not less poverty along with more progress.

This was the "new normal" of the first gilded age, which saw the rise of the populist movement and later party in rural states of the South and the west, a socialist movement, and a multi-faceted progressive movement which, with all of its divisions and differences, sought to use government power and policy to either dismantle or regulate the great corporations/monopolies and either end or restrict their power to exploit farmers, small business owners, and worker

The second "gilded age," roughly 1975 to the present, has been characterized by state/government policies to undo in the U.S. and globally the advances made in the U.S. since the 1930s and the advances made global since the victory over fascism in the Second World War

Economic stagnation and a huge increase in inflation, led to wage stagnation and decline, particularly among unorganized workers without unions to fight to gain contracts to keep pace with inflation, and a sharp rise in regressive taxes, particularly in the U.S., property taxes, where 70 percent of the population were homeowners by the 1970s and the re-evaluation of homes(personal property) sharply upward meant that tax payments were sharply increased, whether or not homeowners incomes had risen to keep pace with inflation.

The cost of public transportation and other public services also sharply increased. Although some sectarian left writers in the U.S. proclaimed a "fiscal crisis of the state" and looked confidentially to the rise of anti-capitalist movements as capitalist governments ran out of money to fund "welfare state" policies, the opposite occurred in the U.S. and many other advanced capitalist countries.

In the U.S. the Democratic Carter administration abandoned New Deal style policies to deal with the crisis. The anti-Communist, anti-left leadership of the AFL-CIO which had come to power after WWII had no policy to deal with the crisis except to retreat, negotiate contracts that provided protection for older workers often at the expense of younger workers, and look to the national Democratic Party to provide protection.

At the state and local level, rightwing politicians began to lead successful "tax revolts" that produced public sector layoffs and reductions in a variety of public programs, especially public education, as public school teachers, as one scholar said recently, became the "punching bags" for politicians in both parties who played them against the homeowners whose children they sought to teach.

These political trends were seen through the country but they were most visible in states and cities which had been the strongholds of progressive and pro-labor politics. In New York City, Edward I Koch, a liberal Democratic Congressman, was elected Mayor and proceeded to carry forward an administration that undermined rent control, closed public hospitals in Harlem and other working class and minority districts, and supported policies of "condo conversion" and gentrification, which destroyed hundreds of thousands of working class rental housing units in order to build luxury private housing for the benefit of the real estate interests and the city government, who would receive much higher property tax payments from such units.

In California, rightwing activists were able at the end of the 1970s to pass in a state referendum a state restriction on local property tax increases (proposition 13), which wreaked havoc with public education and other services in working class communities. With a weakened and largely ineffective trade union leadership, a Democratic party offering at the national level no leadership, large numbers of people who had been taught that they were the "middle class" saw their material condition and self image threatened by a sharp increase in inflation without price controls, a sharp increase in interest rates for automobiles new homes, and credit cards, which was finance capital's response to the inflation.

To keep their homes, their autos, their access to consumer goods (that which defined them as a middle class) they had to increase their incomes. And they turned in significant numbers to politicians of the right who pledged to do that by reducing their property and income taxes, defining all forms of taxation and the purposes for which taxes were used(except military spending)as the source of the economic crisis. Ronald Reagan's election to the presidency in 1980 against the background of a second oil crisis and further sharp increase in inflation and heightened cold war fears gave these rightist political forces control of the presidency for the first time in the post WWII era. The second gilded age now moved into high gear.

These trends had already taken shape politically when Ronald Reagan's election to the presidency increased them quantitatively and qualitatively

In its first years, the Reagan administration reduced "discretionary" spending for social programs(non payroll tax based social security and unemployment insurance spending) by 30% while more than doubling military spending and sharply reducing taxes on the wealthy and corporations.

Also, the administration began to organize federal social spending around "block grant" formulas which compelled various units within a specific program to compete with each other over a reduced amount of money.

Support for public housing and rent subsidies under the Department of Housing and Urban Development(HUD) dropped by 80% In a number of instances existing federal housing complexes were virtually given away to private developers and sometimes literally demolished While income taxes were reduced for upper income groups, regressive social security taxes were increased for working class families and minimum wages and unemployment insurance benefits were frozen. The real value of social security benefits dropped significantly.

The government's and capital's response was to provide tax benefits those employees who could to set up with employers stock market based 401 K pension funds, which seemed to work well as long as the market was rising sharply, but intensified income inequality through the society.

Various food subsidies going back to the New Deal era were reduced in value-the most famous being the administration's attempt to raise the cost of subsidized school lunches by among other things categorizing Ketchup as a vegetable and its less well known undermining of food stamps with such programs as direct distribution of surplus cheese.
The Reagan administration, beginning with its destruction of the air traffic controllers union and blacklisting all of its members from federal employment (1981) launched the most sustained attack on the trade union movement since the 1920s, while it pursued policies of economic deregulation which sharply increased the export of capital from the U.S.

The capital from abroad which began to come in in the 1980s for the first time in U.S. history was capital seeking and finding cheap labor, compared to European labor costs while U.S. capital sought cheaper labor in Latin America, the Pacific Rim, etc.

What is most important about these developments is that they have characterized U.S. political economy over the last three decades-moderated, but essentially left in place during the Clinton years and so far not effectively challenged, much less reversed by the Obama administration.

Here are a few highlights of what these policies have produced. First, the distribution of income has shifted very sharply to the upper 20% of income earners and in recent years to the upper 5% at the expense of all others, especially those in the lowest 20% of income earners, who have been literally priced out of housing and health care markets

For upper income earners, especially those "baby boomers" and others who already owned their own homes, sent their children to private schools or had adult children, and were positioned to profit from the rising stock market and the sharply increased salaries and "compensation for upper and middle management, of the banks and corporations which flush with cash from the detaxation and deregulation and ready to lend it around, these were the best of times,.

Those who dared mention that the super profit were coming s from corporate raiding, leveraged buyouts, the manipulation of junk bonds and were producing a mountain of debt, business, government, and over time, consumer debt were not taken seriously. Those who suggested that such policies undermined mass purchasing power and sustained "economic growth" only on paper, as represented by a rising stock market and credit based consumer spending., were largely ignored or seen as tender minded Keynesians with no knowledge of "real economic systems."

For those who lost their jobs as unemployment became chronically high (five percent unemployed became in effect the full employment goal of the "new normal"); who lost their apartments and homes as rental property was gentrified into condos and coops and houses were lost to foreclosure; who found themselves working two and even three jobs to keep a roof over their heads and food on the table( as they and their families went deeper into debt to pay for their children's education) --- these were the worst of times since the Great Depression.

In some respect they were much worse, because during the great depression, unions were being organized, Communists and others on the left were educating and coordinating the struggles of workers, farmers, tenants, and poverty was not accepted as the price of progress but progress was seen as the struggle of people to abolish poverty and social injustice.

I could lengthen this already long essay with an army of statistics on the enormous rise in income and asset inequality, telling readers what in general most know and what those who own and manage the wealth of the country steadfastly refuse to know. A few points through have to be mentioned before remedies are suggested.

The U.S. has the lowest rate of effective taxation on capital in the developed world. The U.S. has the largest spread of income inequality in the developed world. The U.S has the most "business friendly" labor laws and weakest social welfare benefits/safety net in the developed world-a crazy quilt public private pension system and an even crazier private insurance based health care system which adds greatly to inequality,

Specifically this includes , a social security system whose payouts are kept low, making it difficult for those who have no supplemental union, public or corporate stock market pensions to live with any dignity. And a health care system with tens of millions of uninsured and underinsured people(ironically, senior citizens, who suffer from the inequality of the pension system, do have the benefits of the Medicare system, which the people as a whole don't have .

These are facts and as Lenin once said, facts are stubborn things. Or as the old American adage goes "What you see is what you get."

This is what we see and this is what we have gotten in recent decades. If we withdraw, seek to save ourselves as individuals, as families, or as specific craft, ethnic or regional interest groups---if we struggle to get a piece of smaller and smaller block grants, wage funds, pensions, than the "Empire" aka monopoly capital will have succeeded and the U.S. itself in the 21st century will in the worst case scenario become something like a 19th century "burnt over district," where slash and burn agriculture devastated the region and the land speculators and commercial farmers moved West, leaving large numbers of working farmers to lose the land.

But there are no new industries being created for dislocated American workers as there was in the 19th century Nor are there foreign countries that Americans can immigrate to, as farmers and artisans from capital poor debt ridden Eastern and Southern European countries immigrated to the U.S. in the 19th century. Today, only capital exports itself to places that had not yet been clearly mapped until the later 19th century to seek higher profits.

The sixth and last episode of the Star Wars serial was title d "Return of the Jedi," the triumph of the good guy knights with super powers over the evil empire.

If I were to write a scenario for our future, the only one that offers working people hope, I would title it, "Return of the Comrades," meaning the return of open and militant class conscious Communists and socialists to educate, organize and coordinate economic and political struggles and reconstruct at least a center-left coalition, at most, construct a left-center to relegate the "new normal" of 2nd gilded age capitalism to the not to be recycled junk heap of history.

That will require many big victories-from the repeal of state right to work laws and the whole Taft-Hartley system, to tax reform of the kind not seen since WWII, to direct public control over the Federal Reserve system and the restoration or "return" of the regulation of banking and the stock market.

Before one repeats the conventional wisdom that is impossible one should remember that as late as 1932, the conventional wisdom was that social security, minimum wages, industrial unions, national jobs programs for the unemployed,) the policies that provided with the WWII and postwar expansion the sharp reduction in income inequality in the U.S.) were also seen as impossible.

There are policies short of the abolition of capitalism and the establishment of socialism that can reverse or even seriously challenge the huge increase in inequality in the U.S. in recent decades today

While the tactics and the alignments will in all likelihood have to be different then they were in the great peoples upsurge of the 1930s and 1940s in the U.S. , the basic strategy of education + organization+ coordination= effective action will I believe remain the same.

A vital and revitalized broad left movement and Communist Party presence, open and acknowledged will be the key to victories in the present and the future, just as its presence was the key to victories seventy five years ago and its absence the key to defeats thirty five years ago.

Behind the Scenes: The Secret NATO Report on Afghanistan

Tue, 14 Feb 2012 14:41:00 +0000

The secret NATO report, "State of the Taliban 2012," commissioned by the US and NATO was never supposed to see the light of day. Unfortunately for the US war party it was leaked to the press and the New York Times has published many of its observations and conclusions ("Taliban Captives Dispute U.S. View on State of War" 2-2-2012).

The report was based on information taken from 4000 prisoners, Taliban and others, that have fallen into the hands of US forces. To the surprise of the US the prisoners are rather upbeat about the progress of the war and think they are actually winning it. The report says that while the US thinks it is winning and is about to start winding down its own participation the interviews of the captives shows, according to the NYT, "a Taliban insurgency that is far from vanquished or demoralized." The same issue of the Times reported the optimistic statement of Defense Secretary Panetta that the US would set 2013 not 2014 as the date for ending US combat in Afghanistan. This was later corrected by the ground commanders in Afghanistan-- 2014 is the date-- and we may still remain after that date for a long, long time. They wish.

The report says the prisoners state that in those areas where the US forces withdraw and turn over control to the Afghan Army, that army begins to cooperate with the Taliban-- as do the local Afghan government officials. "Many Afghans are already bracing themselves for an eventual return of the Taliban." The report also says that while the Afghan government says it will carry on the war after the US withdraws "many of its personnel have secretly reached out to insurgents, seeking long-term options in the event of a possible Taliban victory." Well of course, all options should be kept on the table.

The report gives the impression that the war is lost and the government can't deal with this reality. Lt. Col. Jimmie E. Cummings a US-NATO spokes person had this to say about the information gotten from the prisoners. "This document aggregates the comments of Taliban detainees in a captive environment without considering the validity of or motivation behind their reflections. Any conclusions drawn from this would be questionable at best."

Wait a minute. We captured these people and interrogated them to get information about the enemy. We don't like the information we get so then say due to a "captive environment" the conclusions are "questionable." But all interrogations of prisoners take place in a "captive environment" and are therefore "questionable." So why bother? It appears that if the government likes the information it gets its credible otherwise its "questionable." This is completely intellectually dishonest and we should not believe a word we are told by the military unless we have independent third person verification.

What could be more comical than NATO spokespersons attempting to refute their own report once it became public. The State Department has also gotten into the act. The report mentions the fact that the Taliban has strained relations with their "Pakistani patrons." But Pakistan is supposed to be a US "ally." How foolish does the US look when the money it lavishes on the Pakistanis is redirected to the Taliban and used to kill US troops. How can you even dream of winning a war when you are all tied up in these contradictory circumstances? The State Department realizes how bad this looks and also played down the significance of the NATO report, saying it was "in no way designed to impact our on going efforts to be back on track with Pakistan." Were we ever "on track" with Pakistan or just being used by the Pakistanis after they realized we didn't know what we were doing in Afghanistan?

For example, the Pakistani government, according to the report, "is thoroughly aware of Taliban activities and the whereabouts of all senior Taliban personnel." And, "There is a wide spread assumption that Pakistan will never allow the Taliban the chance to become independent of ISI [the CIA/FBI of Pakistan-the Inter-Services Intelligence Directorate] control." Yes, lets get back on track-- the US is at "war" with the Taliban, the Taliban is controlled by Pakistan therefore….. draw your own conclusions.

An important conclusion of the report, that NATO and the US really don't want people to know about, is the following: "Taliban commanders, along with rank and file members, increasingly believe that their control of Afghanistan is inevitable. Though the Taliban suffered severely in 2011, its strength, motivation, funding and tactical proficiency remains intact."

Where does the funding come from? It comes from us! Money from the US to Pakistan goes to the Taliban. Trucks and weapons we give to the Afghan Army are sold off at bargain basement rates, or "donated", to the Taliban by corrupt elements in the Karzai government. The Taliban's strength is intact-- we are withdrawing. Their motivation is intact-- we just want to get out as soon as possible (sooner). Their tactical proficiency is intact, we are turning operations over to the Afghan Army many of whose troops would rather shoot us than the Taliban. Is it really too hard to see how all this is going to end? Oh, I forgot to add that besides the ISI, the report says the Afghan intelligence agency also supplies the Taliban with information about where American troops are located so that they can be attacked.

So there you have it. We are spending 2 billion dollars a week to support the war against the Taliban and both our "ally" Pakistan and the Afghan government we set up and are "defending" are on the side of the Taliban. General Petraeus retired just in time. If he runs the CIA as well he did the war in Afghanistan the decline of US imperialism will be well underway.

Getting off capitalism’s treadmill

Tue, 14 Feb 2012 14:07:00 +0000

Which is a better metaphor to describe the lives of U.S. working people under capitalism: an escalator or a treadmill?

At one time one could argue with some evidence that an ascending escalator was an apt description. Between 1945 and 1975, U.S. capitalism went through an exceptional - not normal - phase of development.

Employment, wages and benefits steadily climbed upward for substantial sections of the working class in tandem with economic growth rates and profits. It seemed as if capitalism's negative features - boom and bust, harsh exploitation, instability, class polarization, mass impoverishment, etc. - had permanently given way to steady growth and broadly shared prosperity. The American Dream for the first time seemed to be within everybody's reach.

But much to the surprise of many this "Golden Age" of capitalism didn't last. By the mid-1970s stagflation, rising unemployment and declining wages took hold and the preceding period of capitalist development became the stuff of nostalgia. Over the next three decades the circumstances for working people continued to deteriorate, thanks to neoliberal globalization, the takeover of the economy by nonproductive financial capital, and a right-wing-led ruling class offensive.

The "up" escalator began to morph into a fast moving treadmill for countless numbers of working people. And with the Great Recession of 2008 the metamorphosis was complete as working people in their vast majority not only found themselves on a treadmill, but also were unable to keep pace, with many falling far behind.

Meanwhile, the 1 percent not only made their way through the Great Recession, but also enriched themselves many times over.

What is the upshot of all this?

We are in a new era of capitalist development. The class struggle has intensified and widened.

Needed are new mass and militant forms of struggle (like the mass struggles in Wisconsin, Ohio, and Wall Street's Zuccotti Park) and new demands (massive public works jobs program with affirmative action, democratic takeover of the financial sector, etc.) that correspond to the scope of the crisis and the changing consciousness of the multiracial working class.

Old forms of struggle that didn't prioritize mass mobilization, and the old demands that were shaped by the immediate post-World-War-II capitalist economy, no longer fill the bill.

Of crucial importance in this new era is unity along racial and gender lines, which means a consistent and sustained struggle against racial and gender discrimination.

Finally, the road to slowing down and eventually stepping off the treadmill of capitalism in its new phase goes through the 2012 elections. More specifically, the decisive defeat of the right that dominates the Republican Party is imperative.

Its defeat will open a new terrain of struggle on which the working class in all its diversity and its many allies can project and win solutions to the new problems that this era of capitalist development presents.

The US Economic Situation and the 2012 elections

Mon, 13 Feb 2012 21:21:00 +0000

This article is taken from a report to National Board, CPUSA February 2, 2011

Summary of U.S. Economy

High unemployment and slow growth are still the dominant features of the US economy. Growth during 2011 has been at a very slow pace, and slightly improved Q4 figures just released are likely due to temporary factors. While there has been real, if modest job growth in each of the last five monthsⁱ, much of the drop in the official unemployment rate is due to unemployed workers giving up looking for j obs. There is wide agreement that any recovery is likely to be sluggish over the next couple of years. For example, Paul Krugman writes, "...the state of the economy remains terrible... But there are reasons to think that we're finally on the (slow) road to better times."ⁱⁱ

The recovery, at least in terms of economic output, may continue and even strengthen -- eventually. With profits restored at the expense of wages and social benefits¹, business investment could continue to increase. With almost no new housing construction and a growing potential demand from multi-family households, there could be a new housing boom at some point.

But there is still a strong possibility, in the immediate future, of a new financial crisis and resumption of the downward economic spiral of 2008-2009. This danger comes from:

The overhang of unpayable household debt, particularly in home mortgagesⁱⁱⁱ.
The global capitalist crisis, most immediately the European crisis, which can destabilize the US financial system, and will reduce the market for US exports.
Government policy which forced spending cuts at the federal, state and local level, cutting GDP by almost one-half percent in 2011, and are on track to do even more damage in 2012 and future years.^iv ²

The economic effect of the austerity being imposed by the political process in the US and EU has led Joseph Stiglitz to the gloomy conclusion, "...austerity will only exacerbate the economic slowdown. Without growth, the debt crisis -- and the euro crisis -- will only worsen. And the long crisis that began with the collapse of the housing bubble in 2007 and the subsequent recession will continue."^v

The economic crisis has enabled the strongest capitalists to consolidate their positions and their profits at the expense of their competitors, and especially at the expense of the working class. Corporate profits are at an all-time high, surpassing even the record set before the recession^vi. The right-wing corporate offensive is enabled by Republican control of the House and their effective veto power in the Senate. The series of crises last year over the budget and the debt ceiling have resulted in agreements that will be hard to change, and tend to lock in deep cuts to individual and social spending for the working class, and preclude significant public policy response to the challenges facing the country.

The essence of the outcome of the crisis is the continued seizure of wealth and power by the ruling class. This is even more overt in EU, where the new Prime Ministers of Greece and Italy have been essentially chosen by the ECB without even the show of an election. The austerity measures being imposed in Europe have caused massive unemployment and economic collapse in the weaker countries. Earlier this week in Brussels, 25 EU countries agreed to disastrous austerity policies and to surrender control of their economic policy.^vii In the US, more cities, most recently in Michigan, are put under the control of an unelected, banker-friendly administrator. And citizens united is replacing one man one vote with one dollar one vote.

The contradictions that caused this and the previous 2 recessions are not being resolved. Attacks on the working class, growing inequality, growing power of financial capital, tendency toward increasing public and private debt, and growth driven by unproductive speculation -- all deepen the contradictions. The result is an extended period of instability and class struggle in global capitalism, and especially US capitalism.

New Normal For the working class

The economic crisis is resulting in an intensification of trends that became dominant politically and economically in the US particularly with the election of Reagan in 1980. The result may be a qualitatively new situation, a "new normal" for the working class and the 99%.

Many of the characteristics of capitalism's new normal are those of capitalism's old (historical) normal. It is becoming clear that the so-called golden age of capitalism, at least for the US, Western Europe and some countries in Asia, was the exception, not the rule. From roughly the end of World War II to the mid-1970s, a combination of strong working class movements, competition with an influential and growing socialist block, and other temporary factors allowed economic growth to raise the living standards of a significant section of the working class to that formerly reserved for the middle classes.

The global capitalist crisis of the 1970s, followed by the Reagan-Thatcher offensive by the capitalist class against the working class, began the process that is re-emerging as the dominant feature of class relations in capitalist societies globally -- a tendency toward absolute impoverishment of the working class, a growth in inequality, and a reduction of social mobility. Note that this is a tendency, not a rigid law. It is uneven, and it means different things in the US, in Greece, in capitalist Russia, in India.

For thirty years, dominant capitalist economic theory has advanced "Labor market flexibility" as a pre-condition for a "successful" economy. Workers must renounce any claims on employers -- claims to job security, benefits, training. They must renounce social claims -- health care, pensions, education. Workers must be available 24/7. They must predict what jobs will be available in the future, find and pay for training for those jobs, relocate to wherever the jobs are. The recent New York Times article on production of Apple's products in China give a picture of flexible labor force that capitalism is demanding everywhere^viii. Society collectively, through government services, is expected to provide the physical infrastructure as well as the social environment including education and training, demanded by mobile, multinational capital. But by its very mobility and multinational character, capital has the power to deny to society the resources needed to supply that environment.

A recent article by Robert Reich reports, "More than 20 percent of the American workforce is now “contingent” – temporary workers, contractors, independent consultants – with no security at all." In 1980, he reports, pensions and retiree health care were the rule for medium and large companies -- now they are virtually nonexistent.^ix According to a new report25% of US workers have low-wage jobs -- significantly worse than any other rich (OECD) country^x. US workers have the lowest levels of employment security, paid vacations, paid sick days, or paid parental leave. The wave of austerity being imposed in Europe seems designed to bring workers there down to the level of US workers, rather than the reverse.

Nowhere is the new normal economy more evident than in communities of color in the US. Median household wealth for Black and Latino households is close to zero, which means no cushion against job loss or other emergency. Recent reports of pervasive, systematic discrimination in mortgages against African American & Hispanic families. One report states,"Racially discriminatory practices in mortgage lending (known as 'reverse redlining') were so systematic that top bank officials as well as federal and state regulators knew, or should have known, of their existence and taken remedial action."³ Criminal discrimination in home sales and mortgage lending -- enabling super profits for the banks -- are just the tip of the iceberg. Cutbacks in government employment, one of the few areas where African Americans have had the opportunity for relatively stable jobs, have been devastating.

The destruction of the wealth of the African American and Latino communities in this crisis has been accompanied by a fall in wealth in white households. There is a bass for unity and struggle. The policies that hurt African Americans hurt everyone, demonstrating the necessity and potential for unity because of breadth of crisis.

The 2012 elections

The 2012 elections will largely be determined by the economy. If (and it is a big if) current trends continue to election day, President Obama will be able to point to a positive direction for the economy. But there will be no dramatic improvement in the reality that most people experience, and the dangers cited earlier, which include deliberate sabotage by the Republicans, could make the economic situation even worse by Fall. People will only vote if they think it will make a difference. And how people vote will depends on their perceptions -- including perceptions of the economic record of the past 4 years, the causes of the crisis, and which solutions will be best.

The Republican narrative and substance

Even while they have been attacking one another on superficial issues, the Republican candidates share a common economic narrative. And the media focus on the personal attacks and circus atmosphere have diverted attention from the real effect of Republican policies and from the urgent legislation that needs to be accomplished now, including renewing federal unemployment benefits and other routine government business.

What is the common Republican narrative?

Their message on jobs: Government spending destroys jobs; government jobs aren't real jobs; government deficits destroy jobs; government regulation destroys jobs; worker protection destroys jobs; environmental protection destroys jobs; unions destroy jobs; health care destroys jobs; Obama destroys jobs. Rich people create jobs; privatization creates jobs. In economic-speak, their jobs message boils down to the old Reagan supply-side, trickle-down economics -- according to the Washington Post, Republicans believe that "...reducing taxes and shrinking the government’s role in the economy will free up capital that entrepreneurs can invest, creating good new jobs."^xi

Their message is: People are unemployed because they are too lazy to work, or are living it up on their unemployment checks, or demand too much pay, or are on drugs, or have failed to get enough education.
They say: We need a business executive to run the country like a business.
Newt Gingrich is champion of the openly racist welfare queen argument that worked so well for Nixon and Reagan. Gingrich offered to attend an NAACP convention to explain why African Americans "should demand paychecks instead of food stamps," and he has described President Obama as "the most successful food-stamp president in American history."^xii
Romney says "Barack Obama has been replacing our merit-based society with an entitlement society.”^xiii. According to Robert Borosage, this entitlement vs opportunity theme will frame the Romney campaign.^xiv

Terri Albano summed up the Republican narrative in PeoplesWorld.org: "Instead of Wall Street/corporate greed, Republicans say government programs are the cause of unemployment and poverty, vilifying, through racist caricatures, programs that have social value."^xv

The message that comes through is that you -- i.e. you the Republican audience, you the employed "middle class" white hard-working voter, -- face rising taxes, your children will have to pay a crippling government debt, and the country is going to the dogs, all because of runaway government spending for generous benefits that support people -- especially Black people -- too lazy to work. That message certainly came through in Romney's recent statements implying poor people, with their safety net, are doing at least as well as "middle class" Americans.^xvi Gingrich fired back by calling the safety net a spider web that "traps people in dependency." ^xvii

These lies can be, have been, and should continue to be answered point by point. But I think we also have to make a class-based argument similar to the one Trumka made in 2008 when he confronted racist reluctance by some workers to vote for Obama. The 1% have been grabbing more and more of the pie, and leaving us to fight over the crumbs. We can play their game, and argue over the size of the crumbs we each get, or we can stick together and fight for a real slice.

There are few working class families who do not have a member, a relative, a friend or a neighbor who needs or has needed food stamps, EITC, unemployment insurance, Pell grants, S-CHIP or Medicaid, housing assistance (including home mortgage tax deductions) or other government assistance. In fact, half of all Americans now live in homes where at least one person is collecting a federal benefit.^xviii

Gingrich's attack can be stood on its head. When tens of millions have fallen victims to capitalism's dysfunctional greed, it should be a matter of pride to be the food stamp president -- to defend and expand the aid extended to victims of this unnatural economic disaster. The Republicans want to replace a food stamp president with a starvation president. Looking at the kind of budgets supported by all the Republican candidates, it is perfectly accurate to say: First, they come for food stamps. If we let them get away with it and don't speak up, they will surely come for student loans, unemployment insurance, Medicare, Social Security...⁴

Regardless of the talking points in the Republican narrative, their actual economic program is that of the "plunder and loot" section of capitalist class. Romney's history of profiting from vulture capitalism makes him their perfect representative. Their attitude is reflected in both economic and environment policy -- this party is going to go on forever, but even if it doesn't, all the more reason to grab what we can while we can.

Specifics common to the Republican candidates include continued reduction on taxes for the wealthiest; huge cuts in social spending^xix; plundering and phaseout of Social Security and Medicare; continued subsidies for oil and other corporate special interests, while starving development of alternative energy even in the private sector. Ordinary people have no rights as workers -- there are no social rights, only the right of individuals to compete for fewer and fewer crumbs.

One point where their rhetoric matches reality: defeating Obama is the #1 Republican priority. To achieve that, they are willing to attack not only workers and their living standards, but to sabotage the entire economy. They have been pretty successful. Republican obstruction of appointments and legislation, including the American Jobs Act and previous bills, has already contributed to layoffs of hundreds of thousands of teachers and other local and state workers, as well as the continued depression-level joblessness in the construction trades.

Obstruction and sabotage of normal government functioning is a fascist tactic. Blocking nominees was used as part of the economic sabotage campaign that overthrew the socialist Popular Unity government in Chile in 1973. Although the US does not face an imminent danger of fascism, Republicans increasingly show a fascist-like contempt for truth, democratic process, or the national interest. They will do anything to gain power.

Obama administration and the Political Economy of Capitalism

Many point to the real accomplishments of the last three years⁵. The Obama stimulus certainly played a role and may have been decisive in stopping the economic free fall that Obama inherited. At its peak, between 3 and 4 million workers had jobs; many unemployed were able to maintain health benefits; education, health and other local services were maintained; and important infrastructure projects were undertaken -- all because of the stimulus. Other economic achievements include health reform, financial reform, improving the student loan system, and numerous appointments to the Supreme Court, the NLRB and the rest of the federal bureaucracy. Additional positive initiatives have been blocked by Congressional Republicans.

There is another view. One example comes from Chris Hedges at Truthdig: "Politicians like Obama are hostages. They jump when corporations say jump. They beg when corporations say beg. And if any elected official so much as murmurs anything that sounds like dissent, the Supreme Court ruling permits corporations to destroy him or her. And they do. We can vote for Romney or Obama, but Goldman Sachs and ExxonMobil and Bank of America and the defense contractors always win." ^xx ⁶

These glass-half-full vs glass-half empty discussions don't shed a lot of light.

Chris Hedges and similar commentators, for all their sophistication and revolutionary phrasing, show a weak understanding of capitalism, and of what it takes to achieve change. After proclaiming that Romney and Obama are the same, Hedges says, "I am not sure what to call our economic system, but it is not capitalism." Wrong! Corporate ownership and control of government is central to capitalism, and was described by Marx ("The executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie. -- Communist Manifesto), and in more advanced form by Lenin (see, for example, State and Revolution). Our understanding of state monopoly capitalism could probably use some up-to-date elaboration. But it is exactly because of that understanding that we can develop an analysis of the strategy and tactics of the present situation.

The Obama administration and Democratic Party economic policies are confused and contradictory, reflecting the various class and social groups that are the base of support, and reflecting the present balance of forces and ideological climate. Dominant in the Democratic Party is a section of monopoly capital, including a section of finance capital, which could be called the more rational section. They tend to realize that the uncontrolled pursuit of maximum short-term profit can undermine the stability and the future of the entire system, of economic growth, of the environment, and what they perceive as the national interest. While pursuing an imperialist foreign policy, they are less likely to choose military action as a first resort.

Due to the peculiarities and anti-democratic nature of our electoral system it is also through the Democratic Party that other social and class interests, including working class, racially and nationally oppressed people and women amongst others, are represented in Congress and in the administration, and have some influence. The challenge of blocking the ultra-right while strengthening the independent political organization of unions and popular forces in the 2012 elections has been elaborated in reports by Sam Webb ^xxi and Joelle Fishman ^xxii, and discussed at length within the Party.

The outcome of elections matter, even when the choice is Democrat vs Republican. They matter not only in the lives of working people, but in the terrain on which we organize. In 2009 and 2010, bills were introduced in Congress, and mobilized for at the grassroots, that tried to build on the momentum of the 2008 election and more aggressively advance jobs and workers rights. Some were passed. Following the 2010 election, when Republicans made gains in the Senate and took the House, struggles became more defensive in nature. Instead of fighting to extend federal programs to relieve suffering and generate useful, productive jobs, we find ourselves struggling to prevent existing programs from being cut. And that was only a mid-term election.

In the early 1930s, the Communist Party was critical of Roosevelt, saying (with some justification) that his policies were too corporate-friendly. But taking advantage of vague language in the National Industrial Recovery Act and statements by Roosevelt, John L. lewis organized coal miners under the slogan, "The President wants you to join the union!" In his statements and proposals, Obama has put on the national agenda jobs, infrastructure, health care, education, energy, and the idea that social needs are real and a matter for us to solve collectively, not left exclusively to the private sector. Of course, we have and should continue to go beyond the limitations of the administration's proposals, and argue against negative policies, as was the case with the Peoples World editorial ^xxiii on the recent State Of The Union speech. But just as John L Lewis and others, including the Communist Party did in the 1930s⁷, we should build from, not tear down, the positive agenda projected by Obama. The Communist Party, along with the labor movement and other peoples organizations, has and should continue to project, organize and fight for programs that will make that agenda a reality.

Socialism and the 2012 elections

The economic crisis has put capitalism on trial. As just one instance in the business press, the Financial Times has a special series, called Capitalism in Crisis.^xxiv

On the other side of the class divide are the polls that show pluralities of young people, African Americans, Latinos, and low-wage workers prefer socialism to capitalism.^xxv Although socialism and capitalism were apparently undefined in the poll, there is obviously a widespread questioning of capitalism and a search for alternatives.

Ironically, the Republican primary has contributed to questioning of capitalism.

With Mitt Romney as the poster child for vulture capitalism, Newt Gingrich asks, "Is capitalism really about the ability of a handful of rich people to manipulate the lives of thousands of people and walk off with the money, or is that in fact a little bit of a flawed system?” He attacks Romney's tenure at Bain saying, calling it the "Wall Street model" where “you can basically take out all the money, leaving behind the workers,”^xxvi

An article from the Wall Street Journal's Washington Bureau, is headlined "Gingrich’s Attacks Spur Debate on Capitalism," and quotes club for growth president and former Republican congressman Chris Chocola as saying, “Attacking Governor Romney for participating in free-market capitalism is just beyond the pale for any purported ‘Reagan conservative.’ ”^xxviiBusinessweek reports that Gingrich's anti Wall Street rhetoric cost the support of a major S. Carolina businessman and fundraiser, who swiched support to Romney saying "You can’t be on both sides of free market capitalism."^xxviii

A successful Republican strategist advises Republicans: "Conservatives should not be defending capitalism. They should be defending economic freedom. And there is a difference. The word capitalism was created by Karl Marx to demonize those people who make a profit."^xxix

The other side of the coin is the attacks on Obama and on anything vaguely progressive as socialist. It recalls the wonderful song by our comrade Bernice Diskin -- the singer tells how every time she stands up to the boss, or the landlord, or the racists, someone calls her a red; so she decides to check out what the reds are all about. From the 1930s until today, anti-communism and anti-socialism have indeed been a path by which some have first looked at and then joined the Communist Party and/or the fight for socialism. This is a factor in the upsurge of interest in socialism, and in the Communist Party today.

All this shows that questioning capitalism has become possible for large sections of the working class.

Of course, the right-wing, pseudo-populist attacks on Romney by other Republicans spread more confusion than light on the question. From Newt Gingrich to Mitch Daniels to Ron Paul, their critiques of specific features of the economic crisis may ring a bell, but their solutions are inevitably to cut taxes for the rich, cut public programs, end government regulation, and give even more power and control over the economy to the same capitalist corporations.

Some ideological issues amongst "critics" of capitalism

Ron Paul -- Ron Paul is not a critic of capitalism, but he has attracted some in the Occupy, anti-war and youth movements with his professed stand on issues, e.g., decriminalizing marijuana, opposition to indefinite detention, opposition to foreign wars. But look at the company he keeps. His embrace of these issues does nothing to broaden the base of those movements -- rather, it pulls participants in those movements away from their natural allies in a broad progressive coalition. On this point, Noam Chomsky hit the nail on the head. Speaking of Paul's willingness to let someone die if they don't have health insurance, Chomsky says, "And it goes across the board. In fact, it goes through the whole so-called Libertarian ideology. It may sound nice on the surface but if you think it through, it's just a call for corporate tyranny. It takes away any barrier to corporate tyranny."^xxx

Repeat -- "it takes away any barrier to corporate tyranny." Ron Paul wants to abolish the Federal Reserve. The Fed is, indeed, largely a tool of the financial industry. But the Fed majority, led by chairman Bernanke, has resisted the European-style austerity measures supported by the most reactionary part of U.S. finance, including bankers' representatives on the Fed. The right wing is attacking the Fed for not following an austerity policy. Paul's economic and monetary policies would imposing severe austerity and leave us at mercy of biggest, unregulated banks, laying the ground for a new and even more severe financial crisis.

Return to the good old days. On the liberal mainstream, we have the idea that what's happening today is a distortion of capitalism. In the good old days of the 1950s and 1960s, the story goes, there was a social contract, productivity gains were shared with the working class, and most workers became middle class, and class struggle was subdued. In economics, Keynsian theory reigned supreme.

Actually, the 1950s and 1960s were the exception, not the rule.⁸ Since then, the economic and political factors inherent in capitalism have reasserted the system's long-term trend toward crisis and decay. We share much with Keynsian progressives in terms of immediate economic program to combthe present crisis. But continued crisis and class struggle will remain for the foreseeable future.

Return to small-scale and cooperative, local production -- This is a concept heard, in a wide variety of forms, especially among young people and in the Occupy movement. On another level, workers' coops -- the Mondragon movement is usually held as an example -- are advanced as the alternative to capitalism.

Local production, local control, workers' cooperatives -- these will play an important part in any socialist society, and can be a part of progressive struggle today. But the decisive battles are on a national and global level for control of the economy. As long as they exist in a capitalist sea, coops, local business, small business are subject to the laws -- and the crises -- of capitalism. We should recall Marx' exposition of a basic contradiction of capitalist production -- the means of production are increasingly social, while ownership and control is in the hands of the capitalist 1%. From iphones and the internet to medical equipment to transportation to public infrastructure, the things that make life possible for the majority of Earth's 7 billion people depend on an interconnected global economy. Much more even than when Marx wrote, we cannot return to a primarily local economy. The key struggle is around who controls the increasingly integrated national and global economy as a whole. In fact, increasing popular power over the whole economy will be necessary to enable implementation of policies that enable a greater measure of local, cooperative, economy.

I would add that the increasingly social nature of economic activity -- the web of contractors, subcontractors, transportation and distribution networks, financing -- means that the bulk of surplus value created by most workers is distributed amongst many capitalists beyond their direct employer. This means that the class struggle must increasingly be fought on the social -- i.e., the political level

including the national political level, in addition to direct confrontation with immediate employers.⁹

Arguing for Socialism

On Labor Day, President Obama said, "We've got roads and bridges across this country that need rebuilding. We've got private companies with the equipment and the manpower to do the building. We've got more than one million unemployed construction workers ready to get dirty right now. There is work to be done and there are workers ready to do it."^xxxi. The President was proposing the American Jobs Act -- a program worth fighting for, but well within the fairly conservative framework of post World War II economics in the US. But there is no more dramatic example of the economic failure of capitalism than the juxtaposition of 20 million jobless workers, with the huge backlog of physical and social work that needs to be done in our country; the juxtaposition of 3.5 million homeless with 18.5 million empty homes^xxxii At the heart of socialist economics is public control, in the interests of all the people, of matching individual and social needs with the human and material resources available to meet those needs.

There is no contradiction between fighting to enact urgent, albeit modest, measures well within the capitalist framework, while building consciousness and movements that go beyond that framework. The economic and social security of our country, now and for future generations, cannot be met without focusing on real needs: useful and productive jobs providing health and education, safe and environmentally friendly infrastructure, renewable energy and clean, efficient transportation, with major research, development and production in the U.S. Such a program is achievable, along with a sustainable budget and rising living standards for the vast majority. It requires only that the unprecedented inequality in our nation's wealth be reversed, and that surplus wealth be applied to the public good instead of financial speculation and the export of jobs.

(Endnotes on next page)

1As Robert Reich writes, "Most of the new jobs being created are in the lower-wage sectors of the economy – hospital orderlies and nursing aides, secretaries and temporary workers, retail and restaurant. Meanwhile, millions of Americans remain working only because they’ve agreed to cuts in wages and benefits. Others are settling for jobs that pay less than the jobs they’ve lost. Entry-level manufacturing jobs are paying half what entry-level manufacturing jobs paid six years ago." -- http://robertreich.org/post/17162027435

2Ezra Klein in the Washington Post shows the drag on the economy from the inability of Congress to continue fiscal stimuls.http://www.washingtonpost.com/blogs/ezra-klein/post/avoiding-congresss-fiscal-bombs/2011/08/25/gIQAfqQvrQ_blog.html

3The recent report by the Economic Policy Institute documents the overt racial discrimination endemic to the mortgage loan industry. The report cites "affidavits of bank employees stating that they referred to subprime loans as “ghetto loans” and were instructed by bank supervisors to target their solicitation to heavily African American zip codes,...Elderly African Americans were considered by bank employees to be particularly good prospects for being pressured to take out high-cost loans" -- many other examples of statistics are included. http://www.epi.org/publication/bp335-boa-countrywide-discriminatory-lending/

4The reference is to the famous quote by pastor Martin Neimoller, imprisoned by the Nazis, who said, "First they came for the communists, and I didn't speak out because I wasn't a communist; Then they came for the trade unionists, and I didn't speak out because I wasn't a trade unionist.; Then they came for the Jews, and I didn't speak out because I wasn't a Jew; Then they came for the Catholics, and I didn't speak out because I was Protestant. Then they came for me and there was no one left to speak out for me. See http://en.wikipedia.org/wiki/First_they_came%E2%80%A6

5See, for example, http://peoplesworld.org/professor-lists-obama-accomplishments-over-244-and-growing/ or http://obamaachievements.org/list#toc-5. While these lists exaggerate by crediting Obama with anything positive that happened since he took office, there are plenty of actions clearly attributable to the Obama administration that strengthened the broad economy and/or provided relief to victims of the economic crisis.

6Also along these lines, Hedges' Truthdig colleague Robert Scheer, in an article reposted by the Nation writes: "The issue in this campaign is the economy, and on that, by the time of the general election, there will be no serious substantive difference between the two major parties’ candidates. Both will squarely be on the side of the financiers who created this crisis." -- (http://www.thenation.com/article/165606/theres-hope-republicans-yet)

7The Communist Party, in the first half of the decade, tended attack FDR and early New Deal programs like the NIRA as pro-corporate. While the criticisms had merit, in later years the Party judged that it's positions had been ultra-leftist and sectarian in that period. By about 1935, based on experiences in the U.S. and around the world, the Party adopted a policy of alliance with other progressive forces including in the Democratic Party.

8As discussed in the section on the New Normal

9Even the great union victories of the 1930s would not have been possible without the parallel political struggle around specific legislation and for the election of New Deal candidates. The famous Flint sit down strike 75 years ago might have had a different ending had not Democrat Frank Murphy just defeated the incumbent Republican governor in the 1936 election. Murphy refused to use troops against the strikers.

iGrowth has averaged 183,000 per month 9/2011 thru 1/2012. About 100,000 jobs are needed each month to keep up with labor force growth. (source: BLS total nonfarm, seasonally-adjusted, civilian non-institutional payroll employment)

iiNew York Times, January 23, 2012 http://www.nytimes.com/2012/01/23/opinion/ww.nytimes.com/2012/01/23/opinion/krugman-is-our-economy-healing.html

iiiHousehold debt has declined from its peak, but under-water and other unpayable home mortgages continue as a major drag on the economy.

iv http://www.offthechartsblog.org/new-gdp-numbers-show-historic-drop-in-state-and-local-spending/

v http://www.project-syndicate.org/commentary/stiglitz147/English

viProfits as percent of GDP, both before- and after-tax. National Economic Trends, ST. Louis Fed, 1/27/2012, P. 21. Download athttp://research.stlouisfed.org/publications/net/

viiThe 25 countries "are now expected to write language into their national constitutions codifying the deficit limit [0.5% GDP], with violators to be hauled before the European Court of Justice" -- http://prospect.org/article/austerity-%C3%BCber-alles

viii http://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html

ix"The risk of getting old with no pension is also rising. In 1980, more than 80 percent of large and medium-sized firms gave their workers “defined-benefit” pensions that guaranteed a fixed amount of money every month after they retired. Now it’s down to under 10 percent." "the proportion of large and medium-sized companies (200 or more workers) offering full health care coverage continues to drop – from 74 percent in 1980 to under 10 percent today. Twenty-five years ago, two-thirds of large and medium-sized employers also provided health insurance to their retirees. Now, fewer than 15 percent do." -- http://robertreich.org/post/15978350528

xCenter for Economic and Policy Research, http://www.cepr.net/index.php/publications/reports/low-wage-lessons

xiQuoted by Dean Baker in Beat the Press, http://www.cepr.net/index.php/blogs/beat-the-press/washington-post-gets-behind-republican-economic-agenda

xii http://seattletimes.nwsource.com/html/nationworld/2017372212_welfare30.html

xiiiquoted in http://robertreich.org/post/16889736226

xiv http://www.ourfuture.org/blog-entry/2012010423/mitts-entitlement-problem

xv http://peoplesworld.org/republicans-get-free-ride-on-racism/

xviRomney's contradictions and outright lies about the safety net are detailed by Paul Krugman at http://www.nytimes.com/2012/02/03/opinion/krugman-romney-isnt-concerned.html and by Robert Greensein at http://www.offthechartsblog.org/will-the-real-mitt-romney-please-stand-up/.

xvii http://thecaucus.blogs.nytimes.com/2012/02/03/gingrich-says-romney-is-little-food-stamp/

xviiiActually, 49% live in households collecting at least one of (Social Security, food stamps, unemployment insurance, worker’s compensation, or subsidized housing.) http://robertreich.org/post/16889736226

xixFor a detailed analysis of what the Romnety budget proposals would mean, see http://www.cbpp.org/cms/index.cfm?fa=view&id=3658

xx http://www.truthdig.com/report/item/thank_you_for_standing_up_20120123/

xxi http://cpusa.org/class-and-democratic-struggles-in-a-volatile-time/

xxii http://cpusa.org/the-power-of-the-99-in-201/

xxiii http://peoplesworld.org/obama-s-state-of-the-union-combative-and-centrist/

xxiv http://www.ft.com/intl/cms/s/0/a7717b32-3855-11e1-9f07-00144feabdc0.html

xxv http://www.people-press.org/2011/12/28/little-change-in-publics-response-to-capitalism-socialism/

xxviQuoted in http://robertreich.org/post/15627255844

xxvii http://blogs.wsj.com/washwire/2012/01/10/gingrichs-attacks-spur-debate-on-capitalism/

xxviii http://www.businessweek.com/news/2012-01-18/gingrich-questions-wall-street-bailout-as-florida-gets-attention.html

xxix http://peoplesworld.org/it-s-official-capitalism-is-a-dirty-word/

xxx http://www.informationclearinghouse.info/article30251.htm

xxxi http://www.peoplesworld.org/president-obama-s-jobs-plan-in-context/

xxxii http://blog.amnestyusa.org/us/housing-its-a-wonderful-right/

The Economics of Inequality

Mon, 13 Feb 2012 18:19:00 +0000

Lets summarize the evidence on rising inequality found in the latest research, which is abundant because of the high level of interest among both economists and policy makers and the public. The charts come from Former adviser to Vice President Biden Jared Bernstein’s testimony before Congress, and the Center for Budget and Policy Priorities.

Low, middle, and high family incomes generally grew at similar rates from the late 1940s to the late 1970s, when they began to diverge.
Incomes grew roughly proportional to increases in productivity during this period
Since the latter 1970s, income grew much more quickly at the top of the income scale than at the middle or the bottom.

Source: Congressional Budget Office

1980 to the present coincides with the onset of persistent developments that analysts have identified as associated with higher levels of wage, income, and wealth inequality:

increased globalization, particularly import penetration global from low-wage producers;
greatly reduced unionization, as unions are associated with a more equitable distribution of earnings;
higher unemployment reduces the labor market bargaining power of most workers;
ongoing technological change -- automation -- increases the relative demand for more highly educated workers.
a lengthy decline in the quality of education
the decline in the real value of the minimum wage;
regressive changes in the tax code, particularly tax cuts, deductions and low rates on non-labor income;

Closely related to rising inequality is the split in national income between returns on capital and that paid in wage, salary or benefit compensation. Financial deregulation promoted the increase of the financial sector as a share of economic activity over the past 35 years and resulted in a large growth of capital gains sources of income, which are even more highly concentrated at the top than income from just high salaries.

Source: Piketty and Saez, based on IRS data

As noted in the above chart, capital incomes took a hit in the recent recession (note the 2008 downturn in the top 1 percent share at the end of the series above). But since then corporate profits as a share of national income are at their highest level in the history of these data. Conversely compensation as a share of national income is at its lowest level since the mid-1960s.

Note: Figures are for calendar year 2011, current law. Capital income includes taxable and non-taxable interest income, income from dividends, realized capital gains or losses, and imputed corporate tax liability. The cash income percentile classes used are based on the income distribution of the entire population and contain an equal number of people, not tax units.
Source: Urban Institute-Brookings Institution Tax Policy Center

The Causes of Inequality.

The most conceivable equitable economy that is still dependent on a large number of commodities, of scarce goods and services, would seek to apply an equal standard to the quantify or quality of work. That quality and quantity of work would vary between individual workers in accordance with skill, ability, training, need, location, age, education or many other factors. But the natural inequalities and variations between persons in no way explains the virtually infinite divide between the living standards of the top 1% of the US population and all the rest.

There are many diverse views on what constitutes an equitable society and economy, and on what really constitutes wealth. For most of our history as an industrial nation wealth has been judged in the things money can buy. And this will continue as long as commodities dominate consumption. However, there have always been other measures of wealth as well: good health, a clean and natural, green environment, access to knowledge, education, sports and culture, the ability to enjoy public goods like parks, transport, well-designed and supported housing and community plans, etc, etc. These latter forms of wealth must undoubtedly be key parts of defining a more humanistic and rich quality of life in an advanced society. But because they do not have a price, and are in general not marketable, it is difficult to compare their value with commodity wealth. Economists thus measure equity in terms of money income per unit of work. If national median income rises proportional to productivity of labor, the fundamental equity test is usually judged more or less fair. Such a trend may still contain a lot of sins of inequality, but it demonstrates, as long as it holds, that inequality is at least not getting worse.

An important question to ask is whether the “fair” record of median income growth from 1940 through 1975-80 is an exception to the tendency of capitalism as described by Marx to absolutely impoverish the working class over time; or, whether the tendency to absolute impoverishment (very plain in the period in which Marx was studying the matter, or in the latest period from 1980 to the present) is the exception, and the rule is a tendency toward greater equity.

For most of human history productivity was very slow. Until the 18th century and the beginnings of the scientific and technological revolution, the growth was barely noticeable. Since then, the long-range trend has been upward, but in a very zig-zag pattern.

Is Education the Answer?

Economist Lawrence F. Katz is perhaps the best known and regarded researcher on the subject of inequality. His article The Future of Inequality summarizes his findings and identifies a successful balance and interaction between education and technological change as the number one relationship that correlates with sustainable growth AND reductions in inequality.

In general, Katz finds that when technology leads education, inequality rises; when education leads, inequality falls. There are other variables that influence: unionization, unemployment, globalization, immigration, etc. But education is the strongest correlation even when all other variables are controlled in the statistical studies.

According to Katz, the gap between the wages of educated and less educated workers has been growing since the early 1980s – and that change, along with the divide between labor and capital income, has been both large and pervasive even when the measurement is narrowed by gender, industry or occupation.

“Technological change has increased the relative demand for skilled and educated workers, while access to education has increased the relative supply of skilled and educated individuals. And here’s the kicker: the big variable appears to be changes in the pace of educational attainment rather than changes in technological progress. The rise and decline of unions plays a supporting role in the story, as do immigration and outsourcing. But not much of a role. Stripped to essentials, the ebb and flow of wage inequality is all about education and technology.”

Katz goes on to quote Jan Tinbergen, the first Nobel laureate in economics on inequality:

Inequality, he said, is the outcome of a race between education and technology. When technological advance vaults ahead of educational change, inequality generally rises. By the same token, when increases in educational attainment speed up, economic inequality often declines.

Katz has built over the years a very impressive data case for this correlation through US history, which he concludes with an account of the recent sharp declines in US educational performance and its failure to meet the demand for larger and larger numbers of more skilled workers needed for economic relations to reproduce themselves on a higher, and more equal and equitable, level.

In Katz’s analysis, divergence in outcomes for racial, national, and gender populations are also tracked most strongly by access, or lack of access, to education.

Katz work focuses on the impact of education on wage income disparity. It does not address the relatively much wider capital income -- i.e. wealth --- disparity combined with inordinate growth in financial services relative to other sectors of the economy since the 1970’s.

Mobility

One of the standard apologies for rising inequality coming from the austerity politics crowd is the claim that rising inequality does not matter much as long as workers have economic mobility. Mobility is defined as the ability of an individual, family or some other group to improve (or lower) their economic status over a career, or between generations. It is obviously also closely related to broad educational opportunity, which has grown increasing out of reach for working class families as college costs have soared.

Rep. Paul Ryan (R-Wis.) declared last month in a report to the Heritage Foundation that “Class is not a fixed designation in this country. We are an upwardly mobile society with a lot of movement between income groups.” Ryan then falsely claimed that social mobility in the United States was better than Europe, where “top-heavy welfare states have replaced the traditional aristocracies, and masses of the long-term unemployed are locked into the new lower class.”

However, the most comprehensive comparative study, done last year by the Organization for Economic Cooperation and Development, found that upward mobility from the bottom was significantly lower in the United States than in most major European countries, including Germany, Sweden, the Netherlands and Denmark. Another study, by the Institute for the Study of Labor in Germany in 2006, uses other metrics and concludes that “the U.S. appears to be exceptional in having less rather than more upward mobility.” Note also that mean mobility figures and do not fully show that racial, national and ethnic minorities mobility stands at approximately 60% of that for whites for all income ranges.

It's Not Just about access to education.

The struggles against pernicious and unsustainable forms of inequality have been the touchstone of many if not all social movements throughout US history. The resistance to property qualifications in the US Constitution, the expansion of suffrage in waves from 1840 through the 1960’s, the Civil War and the overthrow of slavery, Women’s Suffrage, the labor upsurge of the Depression era, the Civil Rights upheaval and the entire legacy of racial and national oppressions and genocide that the working peoples of this country have suffered, and strived to discard, teach an important lesson: that no advance in educational opportunity or other major investments in human capital happen apart from the people lifting themselves up and breaking down class, gender, national and racial barriers that block the way.

Katz’ and other inequality research makes a singular contribution in raising the role of education and technology beyond an opinion with a strong statistical analysis.Its defect, from a political perspective, is that the research tends to abstract inequality in strictly numerical terms -- income in dollars -- and discard the broader economic and sociological concept of class. Its true, the term “class” is typically measured by income or wealth in virtually all social science, since it can be counted easily. However much context is lost by leaving aside Marx’s much more nuanced definition of class as ones relation to production. The job you do, and how it gets done, plus what you get paid, is the class “signature” for Marx. Income comparisons might equate the class of a small or medium business owner, or its principle agent, with an engineer or other professional worker. But there will be important variations in outlook and social activity on a broad range of issues between these occupations, whose interests are not always aligned. Income from capital motivates a different set of interests than income from salary or wages.

Contrary perhaps to intuition, and also to some experience, Dr King’s example of the role of non-violent resistance to oppression, combined with the power of an economic boycott, showed in the era of mass media minority can win majority support, and a scrabble for crumbs by different sections of working people can be overcome. There is a non-accidental synchronicity between the expanse of education and the struggles of working people. The 1890’s and early 20th century labor and suffrage upsurges, the New Deal upheaval, and the civil rights and anti-poverty explosion of the 1960’s and all presaged expansions of the educational franchise of the people.

Education is a public good, a form of wealth whose liberating potential cannot be realized for a nation unless it is provided for all. Ultimately, Marxists submit that the most important lesson to be learned is that expansion of wealth in many kinds of public goods is the only sustainable path to undermining the class conflicts in US society which have led us to the depths of the current trough of depression, injustice, and a level of inequality that threatens the foundations of our democracy.