Capitalism in the 21st Century

Capital in the 21st Century

Directed by Justin Pemberton (2019)

Film Review

Based on French economist Thomas Pikety’s book Capital in the 21st Century, this film features numerous sound bites by Pikety, US economists Joseph Stiglitz and Francis Fukuyama, and various other Western historians and political scientists.

Like the book, the film’s major theme is the grinding income inequality produced by capitalism. It begins with the immense social misery that started with the 17th century Enclosure Acts (which drove my European ancestors off the common land they shared)* and significantly worsened with the industrial revolution in the mid-1800s. According to Pikety, the only time working people received a significant share of the wealth they created was with the post-World War II industrial boom. During the 1970s, the the “financialization”** of western economies resulted in a significant increase in corporate profits at the expense of workers.

In my view, the major flaw of the film (and the book) is Pikety’s failure to address the role of private money creation in growing inequality. In most Western countries, 97-98%  of the money in circulation (all but the notes and coins) is issued by private banks as loans.***

A monetary system almost entirely controlled by for-profit banks surely has far more impact on growing inequality that any other economic forces. As the filmmakers rightly point out, only 15% of current bank lending ends up in the productive economy (which banks view as too risky and insufficiently profitable), while 85% of lending goes into mortgage loans loans and speculative financial products.

Pouring massive amounts of new money into housing speculation is causing both house prices and rents to skyocket in most Western countries. This, in my view, is the primary cause of rampant inequality. In addition to fueling soaring homelessness, it leave low and middle income with less and less money for other basic necessities.

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*”Financialization” is a term coined to describe the domination (starting in the 1980s) of western economies by “financial capitalism,” in which national revenue derives mainly from the sale of financial products, insurance and real estate (as opposed to manufactured goods).

**The Enclosure Acts were a series of laws that allowed wealthy landowners to privatize (enclose) land that peasant farmers previously held in common to satisfy basic subsistence needs.

***Contrary to popular belief, banks don’t issue loans from money deposited by savers – the vast majority of loans are created out of thin air subject to minuscule reserve requirements (usually less than 10%) imposed by central banks.

The film can be view free (for the next two weeks) on the Maori TV website

Wealth and Health: Why Black, Brown, and Poor People Are Dying of COVID19

In Sickness and in Wealth

Directed by Llewellyn M Smith (2008)

Film Review

It’s no mystery and doesn’t need yet more study. Epidemiologists have known since the late seventies that health and life expectancy directly correlate with income level, irrespective of genetics, lifestyle (smoking, exercise, diet, etc), or access to medical care. This documentary is a about a 2008 study that examined four Louisville districts with varying average income levels.

Residents in the wealthiest district earned incomes averaging $100,000+. Nearly all had college degrees and owned their own homes. Their average life expectancy was 80 years.

In the second most prosperous district, most residents had high school diplomas. Although a minority owned their homes, they considered themselves solidly middle class. They had an average life expectancy of 76 years.

In the third wealthiest district, fewer were high school graduates. Many had difficulty maintaining stable employment and lived in subsidized housing. Lacking in chain supermarkets or other access to fresh produce, the district is characterized as a food desert. The average life expectancy here was 74 years. In the poorest district, unemployment was double the national average, and many residents suffered from chronic illness and received disability benefits. Most had failed to complete high school. Thirty percent lived below the national poverty level. Their average life expectancy was 70 years.

The study reinforced prior research* indicating that neither genetics, lifestyle, nor access to medical care has as much influence on health outcomes as income and social status.

Scientists believe low social status leads to poorer immune function and adverse health effects due to the total lack of control poor people have over their lives. This absence of control tends to result in high chronic stress levels that contribute directly to high blood pressure, heart disease, obesity, and impaired immunity.

Overall African Americans had worse health outcomes than white residents regardless of income or social status. Scientists believe this relates to the chronic stress they experience related to racial slights and abuse in their interactions with white people.

More recent research indicates that growing inequality (ie tax and public spending policies that grants billionaires a larger and larger share of the wealth working people create) since the 2008 economic crash is worsening health discrepancies based on wealth and racial differences. The solution is no mystery, either. We will never end inequality so long as we allow private banks to create and control our money system. Contrary to popular belief, private banks presently create 97% of our money (out of thin air) when they issue loans.**

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*The film mentions 1967-1977 The Whitehall Study https://unhealthywork.org/classic-studies/the-whitehall-study/

**See The Battle for Public Control of Money

The full film can be viewed free at Kanopy by anyone with a public library card. Type Kanopy and the name of your library into your search engine.

 

Gandhi’s Followers: Barefoot Mahatma Followers Undermining Capitalism

Gandhi’s Followers: Barefoot Mahatma Followers Undermining Capitalism

RT (2019)

Film Review

This is an odd documentary that tours India “to hear from Gandhi’s modern day disciples.” The title is misleading. I honestly can’t see any way the groups the filmmakers visit are undermining capitalism, especially the group “Bikers Against Animal Cruelty.” The latter use Harley Davidson motorcycle tours to educate high school students about the life and philosophy of Mahatma Gandhi.

In my view it’s more accurate to describe the activist groups depicted as working to undermine India’s devotion to global consumerism. All have a strong focus on voluntary simplicity and care of the poor – both heavily promoted by Gandhi.

I also question filmmaker claims attributing the British decision to quit India to Gandhi’s nonviolent campaign for independence. The nonviolent resistance practiced by Gandhi and his supporters occurred in conjunction with a parallel independence movement that included violent tactics such as bombing, targeted assassination, riots and looting. I suspect that latter were far more influential in persuading the British to leave.

Likewise the far majority of Gandhi followers in the film wear shoes.

 

 

Germany’s Super Rich

Germany: The Discrete Lives of Germany’s Super Rich

DW (2019)

Film Review

This is a documentary about German billionaires, which are more prevalent in Germany than elsewhere in Europe. Der Spiegel’s Manager Magazine compiles and annual list of Germany’s 1001 richest people. Assets of at least $100 million to make the list, which includes 170-180 billionaires. All but one are men.

German billionaires are far less ostentatious than their US, Chinese or Russian counterparts. Shunning conspicuous consumption, most try to hide their wealth. They express fear of provoking envy and the risk of break-ins or having their children kidnapped. Families with inherited wealth are afraid its links to the Third Reich will be exposed.

The filmmakers found a handful of billionaires willing to be interviewed, including a multibillionaire who owes his wealth to a self-service drug store chain, the founder of a chain of fitness studios and a hearing aid manufacturer. Unlike the US, there are no big tech, athlete or movie star billionaires.

Rather than directly lobbying political leaders (as in the US), German billionaires tend to lobby the German government indirectly through their business associations. There is always the implied (or expressed) threat they will leave Germany and take tens of thousands of jobs with them.

In Germany, the last 25 years as seen a big spike in wealth inequality. Average wages and corporate and wealth taxes have declined as billionaire wealth has increased exponentially.

The billionaires interviewed uniformly oppose restoring former tax rates to help reduce poverty. What I find most striking about the film is their failure to recognize their obscene fortunes as a wealth transfer from low income people. In many cases, it’s clearly a wealth transfer from their own workers, whose wages have been steadily squeezed by German productivity policies.

 

 

 

 

Reclaiming China’s Deserts: A Tale of Two Videos

These two videos are about China’s vast reforestation project aimed at reducing the size of the Gobi Desert. The project, which started in 1978, has planted 68 billions trees altogether and reduced the Gobi Desert by 4,800 acres. It has also forced roughly 350,000 rural farmers to relocate to urban areas. Most are unable to find work and receive no government assistance other than housing.

The first film is by France 24 – the second by China 24. Although the latter is clearly a government propaganda piece, most of the facts appear accurate. It claims China is reducing the size of its deserts by 2,000 square kilometers a year, as well as offering training to all Silk Road countries in reforestation technology.

The Chinese government is also quite proud of endangered species laws they have enacted, which make harming endangered plants, animals and marine life a crime (hopefully they have also quit locking up environmental activists). They also boast about new laws to penalize companies for polluting their waterways, as well as decreasing urban air pollution by reducing steel production by 65% and coal production by 290 million tons.

The end of the China 24 documentary boasts about lifting millions of Chinese residents out of poverty, though it fails to mention China’s skyrocketing inequality. Nor the millions of Chinese farmers who have lost their livelihood after being driven off their land – nor the millions of urban street vendors whose businesses are being bulldozed for urban renewal projects.

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*The Silk Road was a centuries-old trade route connecting Asia with Europe. China has invested billions of dollars in building superhighways and high speed networks along the Silk Road route through Kazakhstan and Russia.

France 24 (2017)

China 24 (2017)

 

Why Growth is the Main Cause of Poverty

Growth Equals Poverty

Vendana Shiva (2013)

In this presentation, environmentalist and anti-globalization activist Vendana Shiva challenges the Wall Street mythology that economic growth reduces poverty. Using her own country India as an example, she demonstrates how poverty (and inequality) increase in direct correlation to GDP increases.

The examples she offers clearly apply to the US, UK and New Zealand. All three countries are experiencing alarming increases in poverty and inequality as GDP increases. As in India, the quality and availability of health, education and other public services have declined steeply as “growth” has increased.

She goes on to demonstrate what GDP growth really represents: the privatization (ie theft) of natural and public resources by a small number of elites.

In India at present, 1/4 of the population lives in abject poverty and 1/2 of children are malnourished. Vendana blames the increase in hunger on the forced adoption of industrial agriculture and GMO crops. Monsanto and GMO advocates like Bill gates argue that GMOs will decrease world hunger. In India, where Monsanto has successfully lobbied to make it illegal for farmers to save seed, just the opposite has happened.

This due partly to Monsanto’s seed monopoly, which has caused an 8,000% increase in the cost of seed; partly to the high cost of fertilizers, herbicides and pesticides GMO crops require; and partly to the destruction of soil, bees and biodiversity caused by industrial agriculture and GMO crops.

The Rise and Fall of Britain’s Working Class

The People: The Rise and Fall of the Working Class 1910-2010

By Selina Todd

John Murray Publishers (2015)

Book Review

The People is about the rise of the British working class during World War I and its systematic erosion during the seventies as the Thatcher government systematically dismantled Britain’s manufacturing base.

British workers first began to see themselves as a cohesive force during 1914-18 as hundreds of thousands left domestic service (where most were employed) for the war industry. Working class consciousness reached its zenith during World War II, in part due to discriminatory treatment by the Churchill government. Working class women were often forced to leave well-paying jobs to be conscripted into the munitions industry. In contrast, middle and upper class women were exempted from conscription because they did “voluntary” work. Middle and upper class families also found it easier to be exempted from the mandatory evacuation scheme. The latter required rural families were required to accept child evacuees from urban centers without compensation.

The Churchill government provided virtually no funding for the mandatory evacuation scheme (which was organized mainly by schools and charitable groups), nor for benefits for families who lost housing, jobs and breadwinners due to German bombing, nor for proper air raid shelters. Government provided shelters were so wet and filthy, Londoners spontaneously seized and occupied the subway system, and there was nothing the government could do to stop them.

According to Todd, the austerity cuts that have turned Britain into a low wage economy actually started in 1976 (three years before Thatcher was elected prime minister) with public spending cuts imposed on the UK as a condition of an IMF loan. For the most part, this “free market” attitude continued under Blair and New Labour.

In her Afterward, Todd sees evidence of a growing popular discontent over inequality in the rise of UKIP (the United Kingdom Independence Party) and the Scottish independence referendum. The latter, she maintains, was actually more about inequality. More recently, this discontent has manifested in the election of left wing Jeremy Corbyn to run the Labour Party and the successful Brexit referendum.

Angela Davis on Donald Trump and the Movement to Abolish Prisons

The following is an eye-opening presentation for Martin Luther King Unity Day. In it, long time political activist Angela Davis explores the roots of the electoral college and the death penalty in slavery. Unlike more mainstream liberals, she doesn’t catastrophize about Trump’s recent electoral victory. Instead she faults both Trump and Clinton for failing to mention even once during the campaign the working class, inequality or climate change.

She goes on to emphasize that it isn’t Martin Luther King as an individual we celebrate, but the thousands of people in the civil rights movement who did the real work. She then highlights the myriad of movements Americans have formed to resist the oppression experienced by the working class Americans. She devotes special focus to the movement to abolish prisons in a country that incarcerates more people (in absolute numbers) than any other country in the world. In her view, the majority of inmates in US prisons have been deeply traumatized in childhood. All incarcerating them accomplishes is to irreparably re-traumatize them.

The goal of the prison abolition movement is to replace prisons with a system of restorative justice,* starting with youth prisons.

Davis starts speaking at 1:09.

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*Restorative justice is a system of criminal justice which focuses on the rehabilitation of offenders through reconciliation with victims and the community at large. New Zealand, which has no youth prisons, relies on a restorative justice process to deal with juvenile offenders.

The End of Capitalism

The End of Capitalism

David Harvey (2016)

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.

 

Demolishing the Myth of Perpetual Growth

Life After Growth: Economics for Everyone

Leah Temper and Claudia Medina (2010)

Film Review

The purpose of Life After Growth is to challenge the perpetual growth paradigm in an era in which markets have taken the place of religion in determining major social values.

At present media pundits and policy makers champion continual economic growth as an unquestioned fact of life. In reality, it’s a fairly new phenomenon. Prior to the 19th century and the industrial revolution, all human civilization was characterized by a steady state economy in which both population and productive capacity grew very slowly.

The documentary argues that the urgent crises of poverty, inequality, shortages of water and energy and ecological destruction mean the time has come to explore better ways to design the economy other than infinite growth – especially as the latter is impossible on a finite planet.

At present a “healthy” economy is expected to grow at an average annual rate of 3% a year. At that rate, the size of the economy doubles every 23 years, as do carbon emissions and resource depletion.

Filmmakers also explore what the transition from a growth economy back to a steady state economy might look like. They do so by profiling a number of “DeGrowth” groups that have opted out of “corporate” society:

• The voluntary simplicity (aka voluntary simplicity) movement launched by Vicki Robin’s 1992 book Your Money or Your Life – where members vastly improve their quality of life by working 1-2 days a week, living more simply and consuming less.
• The Transition Towns movement – involving communities throughout the industrialized world collectively organizing to downsize their lifestyle and reduce their carbon footprint.
• The Catalan Integral Collective in Spain – funded by the civil disobedience of Enric Duran, in which he used credit cards to “borrow” 492,000 euros from 39 banks, an amount he couldn’t possibly repay. (See Spain’s Modern Day Robin Hood )
• Ecuador’s Keep the Oil in the Soil campaign – in which the president of Ecuador pledges to not to mine Yasuni National Park (one of the most biodiverse places on earth) for oil provided developing countries commit to replace Ecuador’s lost income.
• Bhutan’s decision to measure their country’s success through Gross Happiness Index (GHI) rather than Gross Domestic Product (GDP).
• The Church of England’s God is Green program dedicated to reducing Britain’s carbon footprint.