This is a presentation Oscar Mayer heir Chuck Collins, author of Born on Third Base, gave on November 9th. At age 26, Collins made the brave decision to give his fortune away. He currently works as a senior scholar at the Institute for Policy Studies in Washington DC. In his leisure time, he works to educate 1%ers about inequality and their ethical obligations to society. He has campaigned heavily with Bill Gates senior and other billionaires to retain the estate tax and to oppose tax cuts for the wealthy.
Most of the presentation concerns his efforts to challenge the views of other 1%ers on privilege and the grave threat inequality poses to American democracy and the planet.
The Q&As, in which he talks about Donald Trump’s election upset are the best part of the talk. Collins credits Trump’s victory to the dismissive way Democrats view and talk about the working class (ie “the deplorables”). He highly praises the late Joe Bageant’s Deer Hunting with Jesus for its exploration of this issue.
The best question is when an audience member asks if true equality is possible under capitalism.
In The End of Capitalism, geography and anthropology professor Anthropology David Harvey makes the case that economic crises and inequality are part and parcel of capitalism and can only be ended by dismantling the capitalist economic system.
He begins by examining the cumulative “perception control” by the corporate media that has made it virtually impossible (except perhaps in Iceland) to look at any alternative economic systems despite the deplorable performance of capitalism since the 2007 global economic crash.
Quoting from Volume 2 of Marx’s Capital, he goes to demonstrate that growth and debt are structural components of capitalism – how the amount of debt created always equals the amount of capital growth created. In fact, repaying all government debt (as many conservatives advocate) would end capitalism faster than a workers revolution.
He also quotes Reagan advisor David Stockman and former vice president Dick Cheney to demonstrate how the Reagan and both Bush administrations deliberately ramped up the deficit (on unfunded wars) as a strategy to force future administrations to cut social spending.
For me, the most interesting part of his talk is his discussion of the Chinese economy, specifically how their willingness to employ Keynesian tactics (of government deliberately spending money into the economy) to generate 10% economic growth and save the global economy from total collapse.
In elucidating a viable alternative to capitalism, Harvey quotes from volume 3 of Capital, where Marx defines capitalism as a “class relation between owner and worker such that the owner extracts surplus value (profit) from the worker’s labor.” Thus in his (and Marx’s) view, the only viable alternative is a system of worker self-management of our own productive process (ie worker cooperatives). He believes such a system would coordinate production via a Just in Time networking strategy similar to those used by Wall Street corporations.
The video has an extremely long introduction and Harvey starts speaking at 8.00.
Decadence is a 2006 Australian TV series examining the plummeting quality of Australian life, which director and narrator Pria Viswalingam blames on a global economic system based on frenetic consumption, fueled by debt and ridiculously long hours of work. The cinematography choreographs to perfection the self-indulgent moral degradation of a culture that has been subsumed by US political and cultural norms that reward narcissism and the vacuous idolization of celebrity.
The only critique I would have is the absence class perspective. I have a problem with Viswalingam’s blanket assertion that all Australians are working ridiculously long hours because they value the accumulation of luxuries more than family time or friendships. I think this criticism applies chiefly to the shrinking Australian middle class – which I estimate at around 20-30% of the population. From my experience, the majority of Aussies – like their Kiwi and American counterparts – work ridiculously long hours because this is the only way they can put food on the table.
The series consists of six episodes:
Episode 1 Money – describes the MacDonaldization of Australian society, where workers work longer hours than Germany, Japan or even the US and are plagued by debt, depression, drugs and high suicide rates. Viswalingam makes the assertion that greed and ignorance are a far bigger threat to civilization than terrorism. I agree.
Episode 2 Sex – describes how the commodification of sex has led to a situation where more “sex” occurs in the street than in bedroom. Viswalingam especially deplores the sexualization of children for commercial reasons, the alarming increase in culturally driven misogyny and the epidemic of pedophilia in the church.
Episode 3 Democracy – explores America’s zeal in exporting “democracy” to the rest of the world and the undermining of Australia’s parliamentary democracy by wealthy business interests.
Episode 4 Education – explores the decline of Australia’s educational system, which focuses more on fast tracking students into lucrative jobs than on teaching ideas and critical thinking.
Episode 5 Family – explores statistics showing Aussies are marrying less, breaking up more and increasingly opting to remain childless. Viswalingam blames this partly on the absence of good paying jobs (forcing mothers into the work place) and the failure of the feminist movement to win support for women in their struggle to balance work and family responsibilities.
Episode 6 Religion – describes how organized religion sowed the seeds of its own destruction through centuries of justifying wealth accumulation and genocidal western expansion. Here Viswalingam makes some fuzzy, poorly supported assertions about the fundamental importance of spirituality in facilitating human connection.
The Truth Behind Capitalism examines the current demonization of “socialism” in the mainstream media and the corporate interests who drive it. It begins by exploring growing interest in Marxism stemming from the obvious failure of capitalism to cope with the 2008 economic collapse. It also attempts to correct the popular misconception that Karl Marx was responsible for the totalitarian dictatorship that developed in the former Soviet Union. About half the film is devoted to three century battle against central banks and the privilege governments grant them to create debt-based money out of thin air. It incorporates lengthy segments from Inside Job, an excellent 2010 documentary narrated by Matt Damon.
The filmmakers, who describe Marx as a sociologist, philosopher and student of capitalism, maintain his central concern was capitalism’s use of exploitation and oppression to keep poor people poor. Oversimplifying considerably, they summarize his ideal society as one run by workers themselves through a combination of worker cooperatives and state owned enterprises.
The film ends with examples from all over the world – including the 2008 Iceland revolution, the Occupy movement and the rise of Syriza in Greece – of working people organizing to strip private banks of the control they exert over our lives.
The Fuck It Point occurs when you fear the evil of the current system more than you fear actively organizing to tear it down. A growing number of activists around the world have reached this point (which Paul Hawken discusses in Blessed Unrest). We still have a little further to go to reach critical mass.
The specific fears that deter people from attempting to dismantle the current economic system are fear of losing privilege, fear of police brutality, fear of imprisonment, fear of death, fear of chaos and instability, fear of failing and, most importantly, fear that other people will think badly of us.
After summarizing a wealth of evidence that capitalism is doomed, The Fuck It Point asks whether it makes more sense to let it collapse on its own or to take active steps to dismantle it. The filmmakers maintain if we sit and waiting for the crash, the people who have prepared will “hold all the cards.”
The film focuses a lot of attention on corporate media manipulation that promotes apathy and passivity. Even when peoples know they’re being ruthlessly exploited, they can be too psychological paralyzed to do anything.
The public relation industry continually recycles do-nothing messages. One day they tell us that climate change and mass extinction is easily fixed with the right technology. The next day that the ecosystem is too far gone to do anything. The day after that they blame us for the global ecological crisis and urge us to buy more eco-friendly products.
The film also challenges the myth that humans can no longer survive without civilization. The obvious reality is that human beings can’t survive without clean, non-toxic air, water and food and robust social relationships – which are increasingly difficult to access under the current system. People find the idea of giving up civilization unthinkable because they are addicted to it.
The filmmakers estimate that only 1/7 of the current global population achieve real benefit from our current economic system. The other 6/7 would experience an immediate improvement in their life circumstances if it collapsed.
The latest news from Greece is that Prime Minister Tsipras has resigned and called a new election. This follows a rebellion by 1/3 of Syriza MPs, who voted against the IMF bailout Greek voters rejected in the 5 July referendum. According to the The Guardian, 25 Syriza MPs have broken away to form the anti-austerity party Popular Unity, led by former energy minister Panagiotis Lafazanis. Some analysts predict the new party will call for Greece to exit the euro monetary union: see Senior Syriza MP Greece Must Exit Monetary Union
The following documentary lays out some of the economic and social realities that led to the rise of Syriza.
Greece on the Brink
Manuel Reichetseder (2014)
Greece on the Brink is a 2014 documentary about brutal living conditions in Greece that led to the rise of the left wing Syriza government. At the time the film was made, 65% of Greek youth age 15-34 were unemployed. Millions of Greeks had no income at all and were scavenging food out of garbage cans. Twenty thousand were homeless and one third had no access to privatized health care.
The film documents that only a tiny proportion of the $206.9 billion bailout Greece received between 2010-2013 went to public services:
48% went to European creditors
28% went to Greek banks
22% went into the national budget (of this 16% went to interest payments, most of the balance went to the Greek military)
In addition to bolstering Syriza’s rise to power, the Greek economic crisis has led to numerous experiments in worker self-organization: solidarity clinics run by health professionals volunteering their services, solidarity networks that provide free food, a journalist cooperative in which journalists run their own newspaper, various worker co-ops which have occupied and taken over shuttered factories, and TV journalists and engineers who took over the state broadcasting service after the Greek government shut it down.
Most of the commentators featured in the film are militant Syriza members who predicted a year ago (based on compromises Tsipras made to propel his party into power) that Syriza wouldn’t solve the problems faced by the Greek working class.
The most interesting section is a Marxist analysis by British economist Allen Woods about the real cause of the 2008 “credit crunch” that triggered Greece’s sudden economic collapse. According to Woods, debt is the mechanism capitalists use to avoid the crisis of overproduction. Marx believed that overproduction was an inevitable structural defect of so-called free market capitalism. By its very nature, capitalist production always overshoots the ability of the market to regulate it.
As Marx noted 150 years ago, capitalism tries to make up for this defect by expanding credit (ie debt). Woods gives the current 30% overcapacity of the global automotive industry as an example. This is illustrated by an article that appeared in Zero Hedge a year ago about new car graveyards – see Where the World’s Unsold Cars Go to Die
Woods predicts that there will be no solution to the current global economic crisis until overproduction (and the debt that supports it) are eliminated.
Afterburn Society is about the economics of energy, specifically the energy produced by fossil fuels. The subject of economics is like bad-tasting medicine for a lot of people. However Post Carbon Institute Fellow Richard Heinberg’s jargonless, down-to-earth delivery makes the experience quite painless and even pleasurable.
Heinberg begins by tracing the history of agriculture and manufacturing. Prior to the late 19th century, there were only two sources of energy. People either relied on their own muscle power or they employed traction animals or slaves (ironic, isn’t it, how fossil fuels replaced slavery?).
In contrast, our modern-day food industry relies heavily on fossil fuels to run farm machinery, for plastic packaging (derived from oil), to transport food to market, for nitrogen fertilizer (derived from natural gas) and as a source of herbicides and pesticides (derived from oil).
It takes 350 gallons of oil a year to feed one American and seven Calories* of fossil fuel to produce one calorie of food.
The Law of Diminishing Returns
Heinberg goes on to explain the law of diminishing returns as it pertains to oil production. Over the last eight years investment in oil production has soared, while output per dollar invested has steeply declined. From 1997-2005, oil companies spent $1.5 trillion to produce 86 million barrels of oil a day. Between 2005-2013, they spent $4 trillion to produce 3 million barrels a day.
Industry data reveals conventional oil production peaked in 2005 and has been declining ever since. Most of the new oil production has come from more costly and risky technologies, such as fracking and deep sea oil drilling. The use of these new technologies has increased the cost of oil extraction. This, in turn, has led the price of oil to skyrocket from $27 a barrel in 2000 to $100 a barrel in 2014.
The higher price of oil means a higher return for oil companies. This, in turn, enabled more costly and controversial technologies, such as fracking and deep sea oil drilling have come onboard. They only became economically viable when the price of oil passed $70-80 a barrel.
Oil production costs aren’t only increasing in dollar terms, but in terms of the energy required to extract new oil. Heinberg predicts that by mid-century, it will require as much energy to extract a unit of oil and natural gas as that unit will produce when it’s burned. At that point, fossil fuels will cease to be a viable energy source, though they may continue to be useful in producing plastics, synthetic fabrics and other petroleum byproducts.
Overall surplus energy will steeply decline when this happens, as renewable energy technologies have a much lower EROEI (Energy Return on Energy Invested) than fossil fuels. For example, solar energy has an EROEI of 2.5-5 to 1 (2.5-5 units returned for every unit invested), in contrast to oil’s EROEI of 30 to 1. Biofuels, with an EROEI of 1 to 1, are even worse. Their only purpose is to return a profit to government subsidized biofuel merchants like Archer Daniels Midland. They’re useless as an energy source.
The steep decline in surplus energy will translate into major social change, as nearly all of our energy use will be geared towards producing new energy (i.e. food production).
The Recent Drop in Oil Prices
In my view, the only shortcoming in this presentation was Heinberg’s failure to address the steep drop in oil prices that began in June 2014 (from $100 to $48 a barrel, recently leveling off around $60 a barrel). He does discuss it in a December 19, 2014 article The Oil Price Crash of 2014
In brief he attributes the temporary price drop to a decrease in demand (due to deepening recession in China, Japan and Europe), coupled with increasing supply (due to the frantic pace of fracking in the US). Normally when there’s a mismatch in supply and demand, it falls on Saudi Arabia (the world’s top oil exporter) to ramp down production. This time the Saudis have refused to cut back production.
Their motivation is a matter of speculation. According to Heinberg, the most likely reasons are a desire to destroy the US fracking industry (small fracking companies are going bankrupt in droves – they’re up to their eyeballs in debt and fracked oil is only profitable above $70-80 a barrel) – and to punish Russia and Iran (whose economies are totally dependent on oil and gas exports) for meddling in Syria and Iraq.
*A measure of energy, a Calorie is the amount of energy needed to raise 1 kilogram of water 1 degree Centigrade.
The Invention of Capitalism is about the origin of an economic concept known as “primitive accumulation.” Marx defined primitive accumulation as the process by which precapitalist modes of production, such as feudalism and chattel slavery, are transformed into the capitalist mode of production. Using the term somewhat differently, Perelman describes it as the brutal process by which government denies peasants the means of subsistence to force them into wage labor.
Tracing the rise of capitalism in the 18th and 19th century, the Invention of Capitalism also studies the origin of the concept in the work of classical economists, such as Adam Smith, Ricardo and Malthus.
Forcing Workers to Accept Wage Labor
Nearly all the 18th century economists and social philosophers seem to agree that workers never voluntarily accept wage labor so long they have alternative means of providing for themselves. They all acknowledge, either directly or indirectly, that it’s natural for human beings to prefer “self-provisioning,” in which they own or rent a piece of land to produce their own food, clothing, fuel and other necessities. In addition to allowing them more control over their work, there is more leisure time associated with this lifestyle, as well as strong community ties that disappear with wage labor. Unless brutal force must be applied to strip people of the ability to provide for themselves, they never voluntarily agree to wage labor.
In Britain, “primitive accumulation” was largely accomplished through the Enclosure Acts, the Poor Laws and the Game Laws. The Enclosure Acts drove peasants off large tracts of land they had farmed communally for thousands of years; the Poor Laws forced disposed peasants into poorhouses and workhouses; and the Game Acts denied them the right to hunt (ie poach) or gather berries, firewood etc on unoccupied land.
Capitalism developed more slowly in Scotland, France, Italy, Spain and the British colonies, where the ruling elite was less savage in stripping the peasantry of access to land. These regions enjoyed a long transition in which factory workers performed wage labor and self-provisioning simultaneously, by raising crops and chickens and engaging in spinning and other crafts in their leisure time.
The Innate Sloth and Indolence of Workers
As Perelman quite ably demonstrates, most classical economists gloss over the brutal force required to establish a successful capitalist economic system. A few of the lesser known political economists (Perelman focuses in Sir James Steuart, one of Adam Smith’s rivals) are honest about need for laws that prevent workers from self-provisioning. They blame the need for such laws on an innate tendency towards “sloth and indolence” in workers and peasants (and indigenous peoples).
Perelman devotes special attention to the Scottish economist Adam Smith and The Wealth of Nations, as well as the political economists and social philosophers who influenced Smith’s work. He also explores attitudes toward primitive accumulation in the work of Marx, Benjamin Franklin, Lenin and Mao Tse Tung. The forceful primitive accumulation that industrialized the Soviet Union and Communist China occurred much more rapidly than in Western Europe or North America. This makes the Soviet and Chinese process appear much more savage. However a close look at British history suggests they were far more brutal, especially in Ireland and the colonies, than either the Chinese or Soviets.
Yields Drop Under Commercial Agriculture
The part of the book I found most interesting concerns the drop in crop yields that occurred with the shift from labor intensive “spade labor” to commercial agriculture employing horse driven plows and eventually farm machinery. This corresponds closely with modern research showing that plowing reduces yields by destroying soil fertility. Then, as now, it’s clear that the goal of commercial agriculture isn’t to produce more food but to extract more profit from other people’s work.
A Return to Self-Provisioning
Perelman’s research seems especially significant in the face of growing unemployment and part time and casual labor. A growing number of unemployed and part time workers use their enforced leisure time to plant veggie gardens, collect rainwater, preserve their own food and make their own clothes and cleaning and beauty products. In other words, the cycle of primitive accumulation is being reversed, as more and more people leave formal employment and return to self-provisioning.
Lifting the Veil: Barack Obama and the Failure of Capitalist Democracy
Scott Noble (2013)
Lifting the Veil is a well-crafted expose of the myth of so-called capitalist democracy Based on interviews and archival footage of Senator Bernie Sanders, Noam Chomsky, Chris Hedges, George Carlin, Glen Ford, Harold Pinkley, John Pilger, Richard Wolfe, William I. Robinson, Bill Moyers and other prominent dissidents, it makes an ironclad case that democracy is impossible under a capitalist economic system.
Using Obama’s extensive list of broken campaign promises as a starting point, Noble convincingly demonstrates how Wall Street corporations have seized absolute control over all America’s so-called democratic institutions. In addition to highlighting the essential role team Obama played in crippling a large, highly vocal antiwar movement, he presents historical examples to reveal how this has been the traditional role of the Democratic Party in the US – to co-opt social movements that threaten the status quo.
The first half of the film focuses on Obama’s 2008 campaign and his long list of promises to reverse specific abuses of George W Bush’s government. In a series of archival clips, we see Obama promising to
• Restore habeas corpus
• Close Guantanamo
• End government secrecy
• End wireless surveillance
• Stop foreclosures instead of enriching bank CEOS
• Expose corporate backers of tax and corporate welfare legislation
• End torture
• End extraordinary rendition*
• Withdraw from Iraq in 2009 and Afghanistan in 2011
• Pass banking regulation to prevent a new Wall Street collapse
Besides breaking every single one of these promises, Obama enacted new policies that were even more oppressive and pro-corporate than Bush’s. Among them were an indefinite detention provision in the NDAA, an executive order giving himself power to assassinate American citizens, the new war in Pakistan and Libya and $7 billion in loans guarantees for the moribund nuclear industry.
The film makes the point that the 2008 election was merely a PR exercise in marketing Brand Obama and had absolutely nothing to do with the candidate’s political agenda.
My favorite segments were those in which comedian George Carlin explains to audiences how powerful corporations sucker them into believing they live in a democracy.
The film ends on an optimistic note with a sampling of opinion polls indicating that more than 60% of Americans oppose the pro-corporate agenda Obama has foisted on them: 63% of Americans would pay higher taxes to guarantee health care for everyone, 70% oppose nuclear power, 81% want to reduce the deficit by taxing the rich and cutting the military budget and only 3% support cutting Social Security.
The only criticism I would have of Lifting the Veil is that it fails to offer specific solutions for Americans seeking to get their democracy back. The dissidents featured are pretty much unanimous that Americans need to stop looking to electoral politics as a way to reform either government or the economic system. However they are a little vague on what activists should do other than protesting and engaging in civil disobedience. Neither is likely to accomplish significant change without serious organizing and movement building to develop alternatives to the current system of government.
Given a lot of this movement building is already occurring in Spain, Greece, Italy, Ireland, Iceland, Mexico and South America and it would have been great to see examples of what this looks like.
*Extraordinary rendition is the kidnapping and transfer of a detainee to the custody of a foreign government for purposes of detention, interrogation and torture.
Anti-eviction activists were thrilled with a November 25 ruling by the Federal Housing Finance Administration (FHFA), which seems to reverse the position taken by the Obama administration in federal court. Prior to the new ruling, homeowners foreclosed by Fannie Mae or Freddie Mac (the Enterprises)* found themselves in the painful position of watching their foreclosed homes being sold for much less than they paid for them.
Deadbeat Homeowners vs Deadbeat Banks
As the 2008 economic collapse caused over inflated real estate values to plummet, more than a fifth of all mortgage holders (7.5 million) discovered that – through no fault of their own – they owned more on their mortgage than their property was worth. By December 2013, the percentage of underwater (aka negative equity) mortgages had decreased to 13% (6.4 million) By December 4, 2014, thanks to an October “rally” in home prices (i.e. new real estate bubble) , this figure had dropped to 8% (4 million) .
Prior to the new ruling, both Fannie and Freddie (both owned by the taxpayer since they were nationalized** in September 2008) required homeowners who had been through foreclosure and wanted to buy their home back had to pay the entire amount owed on the mortgage. The Enterprises argued that allowing former home owners to repurchase their homes at the true (lower) market value created a “moral hazard” because it encouraged deadbeat home buyers to default on their mortgage to repurchase their property at its real value. I find this really rich, given that it was deadbeat banks and mortgage companies who caused the economic downturn to begin with.
Thanks to the new FHFA policy, both Fannie and Freddie must now permit the sale of existing real estate owned (REO) properties to any qualified purchaser (including the former owner) at the property’s fair-market value.
Old Policy Violated Massachusetts Law
A year ago, two Massachusetts residents filed suit against Freddie Mac, with the support of the Boston anti-eviction group City Life/Vida Urbana, for violating a Massachusetts consumer protection statute that explicitly forbids this type of refusal. On November 18, the Obama administration argued that state laws are non-binding on Fannie and Freddie while they’re under federal receivership. Extremely unfavorable publicity may partially explain the FHFA’s surprise ruling a week later. Now that the pressure of mid-term elections has passed, it’s quite a safe lame duck type decision.
City Life/Vida Urbana
City Life/Vida Urbana was first started (as the Jamaica Plain Tenants Action Group) in 1973 to pressure inner city slumlords to property maintain their buildings and to pressure the city of Boston to enact rent control. Since the 1980s, they have also campaigned against property speculation, gentrification and condominium conversion. Since 2008, defending against foreclosure and other evictions has been their primary focus. Joining forces with Occupy Our Homes, which grew out of Occupy Wall Street, they have employed a two prong approach. In addition to helping home owners fight fraudulent foreclosures legally in court, they also organize local activists to block evictions through mass occupation and civil disobedience in foreclosed homes. In many cases, the negative publicity this generates will pressure lenders to renegotiate more reasonable repayment terms.
Thanks to trainings City Life/Vida Urbana conducts across the US, many communities are starting grassroots anti-eviction organizations.
* Roughly half of all US mortgages are held by two government sponsored enterprises (GSEs), nicknamed Fannie Mae and Freddie Mac because federal bureaucrats kept getting the two confused. The Federal National Mortgage Association (FNMA), commonly known as Fannie Mae, was founded in 1938 under the New Deal. Its purpose was to expand the secondary mortgage market. The latter attracts new capital for mortgages by buying mortgage loans from banks and bundling them as securities to on-sell to pension funds, insurance companies and hedge funds. This allows lenders to reinvest their assets in more lending, theoretically increasing the supply of funding available for home purchases. Fannie was privatized in 1968 to become a publicly traded company. The Federal Home Loan Mortgage Corporation (FHLMC), known as Freddie Mac, is a publicly traded GSE created in 1970 to further expand the secondary mortgage market.
**On September 7, 2008, George W Bush nationalized Fannie and Freddie by placing them under FHFA conservatorship and causing them to issue new senior preferred stock and common stock warrants to the US Treasury amounting to 79.9% of each GSE. In 2010 both were delisted from the New York Stock Exchange after Fannie’s stock traded below $1 a share for over 30 days. Since 2010 both stocks have continued to trade on the Over-the-Counter Bulletin Board.