This problem is attributed to a fragmented, profit-oriented medical system that denies millions of people access to care.¹ While a national medical plan that covers everyone is desperately needed, improving the general health of the population requires more fundamental change.

Studies show that social inequality affects the health of populations more than any other factor – more than diet, smoking, exercise, and even more than access to medical care.²

Americans suffer the worst health statistics in the industrialized world because they live in the most unequal society in the industrialized world.

Poor health and lack of access to medical care are both symptoms of social inequality. In 1970 the wealthiest 0.1 percent of Americans took in 100 times the average annual income. By 2001, they were taking 560 times the average annual income. In 1980, U.S. life expectancy ranked 14th in the world. By 2007, it ranked 29th.

Inequality is built into and generated by the capitalist system. Capital is created when employers pay workers less than the value of the goods and services they produce. The resulting profit, or capital, is used to extract more capital. As this process repeats over time, capital accumulates at the top of society and misery accumulates at the bottom.

The strategy of divide-and-rule generates even more inequality: between men and women; White and Black; national and foreign-born; straight and gay; etc.

As social inequality grows, the health of the entire population suffers, not just those on the bottom.³

Inequality Kills

A study of 282 metropolitan areas in the U.S. found that the greater the difference in income, the more the death rate rose for all income levels, not just for the poor.

Researchers calculated that if income inequality could be reduced to the lowest level found in the United States, it would save as many lives as would be saved by eradicating heart disease or by preventing all deaths from lung cancer, diabetes, motor vehicle crashes, HIV infection, suicide and homicide combined!⁴ We would see even greater benefits if we eliminated social inequality entirely.

Consider the lives that would be saved just by ending racial inequality.

Without racism, death rates for Black and White Americans would be the same. Yet, every year, Black Americans suffer 300 more deaths per 100,000 people than White Americans. Compare these 300 additional deaths with the 2005 U.S. homicide rate of fewer than 6 per 100,000. Do the math. Racism kills 50 times more people than die at the hands of individual murderers.

Inequality kills kids. Forty-two nations have lower infant death rates than the U.S. The infant death rate in the capital of the U.S. is more than double the infant death rate in the capital of China. In 25 nations, people live longer, on average, than they do in America.

Inequality is so destructive that it can even counter the benefit of higher incomes. Studies show that poorer people living in more equal nations tend to be healthier and live longer than more-affluent people living in more unequal nations. For example, middle-income people in Britain enjoy better health than wealthier Americans.⁵

Men living in Bangladesh, one of the world’s poorest countries, are more likely to reach age 65 than Black American men living in Harlem. Harlem men have higher incomes than Bangladeshi men but live in a more unequal society. Black Americans tend to die prematurely from cardiovascular and other diseases that are linked with class and race inequality.⁶

How does inequality do so much damage?

Power = Health

A study of the highly-stratified British civil service found that health deteriorated as social status fell. This decline in health could not be explained by smoking, exercise or body weight.⁷ Income is not the factor, because professionals who earn less than non-professionals still enjoy better health.⁸

The answer lay in the surprising finding that those near the top of the power structure had worse health than those at the top, even though their life-styles were essentially the same.⁷ The only difference that could account for this is social power.

People with more control over their lives enjoy better health. Bosses live the longest, healthiest lives because they have the most power. As power diminishes, stress rises and health deteriorates. This relationship between social status and health has been found in every nation studied, including the United States.⁹

A 2008 study found widening differences in health between income levels in America. (Income level is often used to measure social status.) The nation’s poorest adults were nearly five times more likely to be in “poor or fair” health than the richest, and at every income level the wealthier group was healthier than the next lower one. This trend was seen in all racial groups.¹⁰ Michael Marmot, who studies the link between social status and health, explains,

Your position in the hierarchy very much relates to how much control you have over your life…Sustained, chronic and long-term stress is linked to low control over life circumstances.¹¹

Under capitalism, only a few people get to make the important decisions. The rest of us get no say over how work will be organized and how social resources will be used. We don’t get to decide if we will build more schools or more prisons, wage war or make peace.

Exclusion from decision-making is strongly linked with cardiovascular disease,¹² and the more powerless a person feels, the faster the disease progresses.¹³ Oppressed sections of the working-class suffer the highest rates of cardiovascular disease,¹⁴ because they have the least social control.

People with little control over demanding jobs are more likely to be overweight and have high cholesterol regardless of age, amount of exercise and smoking habits. By itself, hard work is not bad for your health unless there is also a lack of control. The most health-damaging jobs saddle workers with great responsibility (e.g. caring for patients) while denying them the resources required to meet those responsibilities (enough time to do what is needed).¹⁵

In Unhealthy Societies: The Afflictions of Inequality, Richard Wilkinson links inequality with health-damaging stress. Children show rising levels of stress hormones as their social position falls.¹⁶ Nurses who work under “unfair and unreasonable” bosses have higher blood pressure.¹⁷ Simply speaking with someone with higher social status will raise your blood pressure.¹⁸ The greatest damage is done to those who are put down and ordered around their entire lives.

Stress triggers a higher heart rate, a release of adrenaline, glucose and other neurological responses to help the body respond to a short-term threat. But when extended over long periods of time, they can harm the cardiovascular and immune systems, making individuals more vulnerable to a wide range of conditions including infections, diabetes, high blood pressure, heart attack, stroke, asthma and aggression.¹¹

Solidarity is the Best Medicine

Human survival has always depended on the cooperation that flows from strong social bonds. People who pull together enjoy better health and longer lives.¹⁹ Strong social ties may explain why Hispanic Americans have lower rates of chronic illness than White Americans, despite having lower incomes.²⁰

Human beings cannot be healthy in class-divided societies. From birth to death, capitalism ranks people on a vertical scale, with those higher up being treated as more worthy than those lower down. The unequal relationship between bosses and workers is maintained by divide-and-rule policies that generate more inequality based on sex, skin color, religion, nationality, etc. These divisions rupture social bonds and generate sickness throughout the population.

Universal access to medical care would reduce some of this inequality. However, even the best medical system cannot eliminate the health-damaging effects of poverty, social discrimination, unsafe work, bad housing, poor schools and being denied the right to make decisions that affect our lives. To end these miseries, we must eliminate class divisions and all the other inequalities that follow.

Human sickness is a product of sick social relationships, and human health is a product of healthy social relationships. Replacing class divisions with a cooperative, socialist society would reduce the burden of disease and raise the level of health more than any other measure.

1. Hadley, J. (2002). Sicker and poorer: The consequences of being uninsured. Kaiser Family Foundation.
2. Wilkinson, R.G. (1992). National mortality rates: the impact of inequality? Am J Public Health, Vol 82:8, p. 1082-1084. See also, PBS (2008). Unnatural Causes: Is Inequality Making Us Sick?
3. Rosenthal, S. (2006). POWER and powerlessness, Chapter 11, “Divide and Rule.”
4. Lynch, J.W. et. al. (1998). Income inequality and mortality in metropolitan areas of the United States. Am J Public Health Vol. 88, p. 1074-1080.
5. Quoted in Bowe, C. (2008). U.S. society helping to make people sicker. The Financial Times Limited, February 29.
6. McCord C, Freeman H.P. (1990). Excess mortality in Harlem. New England Journal of Medicine Vol. 322, p. 173-7.
7. DHSS (1980). Inequalities in health: Report of a research working group. Middlesex: U.K. Author.
8. Cited in Schmidt. J. (2000). Disciplined minds: A critical look at salaried professionals and the soul-battering system that shapes their lives. Rowman & Littlefield, p. 103-104.
9. A discussion of American studies linking class and heath can be found in Schmidt. J. (2000). Disciplined minds: A critical look at salaried professionals and the soul-battering system that shapes their lives. Rowman & Littlefield, p. 103-104.
10. Robert Wood Johnson Foundation. (2008). Overcoming Obstacles to Health.
11. Cohen, P. (2004). Forget lonely. Life is healthy at the top. New York Times, May 15.
12. Raphael, D. (2001), Inequality is bad for our hearts: Why low income and social exclusion are major causes of heart disease in Canada, North York Heart Health Network, Toronto, Canada.
13. Everson S, et. al. (1997). Hopelessness and 4-year progression of carotid atherosclerosis. Arteriosclerosis, Thrombosis, and Vascular Biology, Vol. 17:8, p.1490-5.
14. Raphael, D. (2002). Poor choice or no choice?: Even more evidence links low income with disease so why keep blaming lifestyle choices like fries? Toronto Star, October 11, p. F6.
15. Kivimääki, M., et. al. (2002). Work stress and risk of cardiovascular mortality: prospective cohort study of industrial employees. BMJ October 19. Vol. 325, p. 857.
16. Lupien S.J. et al. (2000). Child’s stress hormone levels correlate with mother’s socioeco­nomic status and depressive state. Biol Psychiatry Nov 15. Vol. 48, p. 976-80.
17. CBC. (2003). Bad bosses bring blood pressure to boil: Study. June 24.
18. Long, J.M, et. al. (1982). The effect of status on blood pressure during verbal communication. Journal of Behavioral Medicine Vol.5, p. 165-71
19. Cacioppo, J.T. et al. (2002). Loneliness and health: Potential mechanisms. Psychosom Med May/June, Vol. 64, p. 407-17. Also, House, J.S. et. al. (1988). Social relationships and health. Science, Vol. 24, p. 540-545.
20. Cited in Cohen, P. (2004). Forget lonely. Life is healthy at the top. New York Times, May 15.

“A nation is a group of people united by a common mistake regarding its origin and a collective hostility towards its neighbours.”¹

As simple or even simplistic as it may sound, the quote above eloquently summarises the figment of reality entangled with modern Jewish nationalism and especially within the concept of Jewish identity. It obviously points the finger at the collective mistake Jews tend to make whenever referring to their ‘illusionary collective past’ and ‘collective origin’. Yet, in the same breath, Deutsch’s reading of nationalism throws light upon the hostility that is unfortunately coupled with almost every Jewish group towards its surrounding reality, whether it is human or takes the shape of land. While the brutality of the Israelis towards the Palestinians has already become rather common knowledge, the rough treatment Israelis reserve for their ‘promised soil’ and landscape is just starting to reveal itself. The ecological disaster the Israelis are going to leave behind them will be the cause of suffering for many generations to come. Leave aside the megalomaniac wall that shreds the Holy land into enclaves of deprivation and starvation, Israel has managed to pollute its main rivers and streams with nuclear and chemical waste.

The Invention of the Jewish People is a very serious study written by Professor Shlomo Sand, an Israeli historian. It is the most serious study of Jewish nationalism and by far, the most courageous elaboration on the Jewish historical narrative.

In his book, Sand manages to prove beyond any reasonable doubt that the Jewish people never existed as a ‘nation-race’, they never shared a common origin. Instead they are a colourful mix of groups that at various stages in history adopted the Jewish religion.

In case you follow Sand’s line of thinking and happen to ask yourself, ‘when was the Jewish People invented?’ Sand’s answer is rather simple. “At a certain stage in the 19th century, intellectuals of Jewish origin in Germany, influenced by the folk character of German nationalism, took upon themselves the task of inventing a people ‘retrospectively,’ out of a thirst to create a modern Jewish people.”

Accordingly, the ‘Jewish people’ is a ‘made up’ notion consisting of a fictional and imaginary past with very little to back it up forensically, historically or textually. Furthermore, Sand — who elaborated on early sources of antiquity — comes to the conclusion that Jewish exile is also a myth, and that the present-day Palestinians are far more likely to be the descendants of the ancient Semitic people in Judea/Canaan than the current predominantly Khazarian-origin Ashkenazi crowd to which he himself admittedly belongs.

Astonishingly enough, in spite of the fact that Sand manages to dismantle the notion of ‘Jewish people,’ crush the notion of ‘Jewish collective past,’ and ridicule the Jewish chauvinist national impetus, his book is a best seller in Israel. This fact alone may suggest that those who call themselves ‘people of the book’ are now starting to learn about the misleading and devastating philosophies and ideologies that made them into what Khalid Amayreh and many others regard as the “Nazis of our time.”

Hitler Won After All

Rather often when asking a ‘secular’ ‘cosmopolitan’ Jew what it is that makes him into a Jew, a shallow overwhelmingly chewed answer would be thrown back at you: “It is Hitler who made me into a Jew.” Though the ‘cosmopolitan’ Jew, being an internationalist, would dismiss other people’s national inclinations, he insists upon maintaining his own right to ‘self determination’. However, it is not really he himself who stands at the core of this unique demand for national orientation, it is actually the devil, master-monster anti-Semite, namely Hitler. Apparently, the cosmopolitan Jew celebrates his nationalist entitlement as long as Hitler is there to be blamed.

As far as the secular cosmopolitan Jew is concerned, Hitler won after all. Sand manages to enhance this paradox. Insightfully he suggests that “while in the 19th century referring to Jews as an ‘alien racial identity’ would mark one as an anti-Semite, in the Jewish State this very philosophy is embedded mentally and intellectually.”² In Israel Jews celebrate their differentiation and unique conditions. Furthermore, says Sand, “There were times in Europe when one would be labelled as an anti-Semite for claiming that all Jews belong to a nation of an alien type. Nowadays, claiming that Jews have never been and still aren’t people or a nation, would tag one as a Jew hater.”²

It is indeed pretty puzzling that the only people who managed to maintain and sustain a racially orientated, expansionist and genocidal national identity that is not at all different from Nazi ethnic ideology are the Jews who were, amongst others, the leading targeted victims of the Nazi ideology and practice.

Nationalism In General and Jewish Nationalism In Particular

Louis-Ferdinand Celine mentioned that in the time of the Middle Ages in the moments between major wars, knights would charge a very high price for their readiness to die in the name of their kingdoms; in the 20th century youngsters have rushed to die en mass without demanding a thing in return. In order to understand this mass consciousness shift, we need an eloquent methodical model that would allow us to understand what nationalism is all about.

Like Karl Deutsch, Sand regards nationality as a phantasmic narrative. It is an established fact that anthropological and historical studies of the origins of different so-called ‘people’ and ‘nations’ lead towards the embarrassing crumbling of every ethnicity and ethnic identity. Hence, it is rather interesting to find out that Jews tend to take their own ethnic myth very seriously. The explanation may be simple, as Benjamin Beit Halachmi spotted years ago. Zionism was there to transform the Bible from a spiritual text into a ‘land registry.’ For that matter, the truth of the Bible or any other element of Jewish historical narrative has very little relevance as long as it doesn’t interfere with the Jewish national political cause or practice.

One could also surmise that the lack of clear ethnic origin doesn’t stop people from feeling an ethnic or national belonging. The fact that Jews are far from being what one can label as a People and that the Bible has very little historical truth in it, doesn’t really stop generations of Israelis and Jews from identifying themselves with King David or Terminator Samson. Evidently, the lack of an unambiguous ethnic origin doesn’t stop people from seeing themselves as part of a people. Similarly, it wouldn’t stop the nationalist Jew from feeling that he belongs to some greater abstract collective.

In the 1970’s, Shlomo Artzi, then a young Israeli singer who was bound to become Israel’s all-time greatest rock star, released a song that had become a smash hit in a matter of hours. Here are the first few lines:

   All of a sudden
   A man wakes up
   In the morning
   He feels he is people
   And he starts to walk
   And to everyone he comes across
   He says shalom

To a certain extent Artzi innocently expresses in his lyrics the suddenness and almost contingency involved in the transformation of the Jews into people. However, almost within the same breath, Artzi contributes towards the illusionist national myth of the peace-seeking nation. Artzi should have known by then that Jewish nationalism was a colonialist act at the expense of the indigenous Palestinian people.

Seemingly, nationalism, national belonging and Jewish nationalism in particular create a major intellectual task. Interestingly enough, the first to deal theoretically and methodically with issues having to do with nationalism were Marxist ideologists. Though Marx himself failed to address the issue adequately, early 20th century uprising of nationalist demands in eastern and central Europe caught Lenin and Stalin unprepared.

“Marxists’ contribution to the study of nationalism can be seen as the focus on the deep correlation between the rise of free economy and the evolvement of the national state.”³ In fact, Stalin was there to summarise the Marxist take on the subject. “The nation,” says Stalin, “is a solid collaboration between beings that was created historically and formed following four significant phenomena: the sharing of tongue, the sharing of territory, the sharing of economy and the sharing of psychic significance…”³

As one would expect, the Marxist materialist attempt to understand nationalism is lacking an adequate historical overview. Instead it would be reliant upon a class struggle. For some obvious reasons such a vision was popular amongst those who believe in ‘socialism of one nation’ amongst them we can consider the proponents of a leftist branch of Zionism.

For Sand, nationalism evolved due to the “ rapture created by modernity which split people from their immediate past”.⁴ The mobility created by urbanisation and industrialisation crushed the social hierarchic system as well as the continuum between past, present and future. Sand points out that before industrialisation, the feudal peasant didn’t necessarily feel the need for an historical narrative of empires and kingdoms. The feudal subject didn’t need an extensive abstract historical narrative of large collectives that had very little relevance to the immediate concrete existential need. “Without a perception of social progression, they did well with an imaginary religious tale that contained a mosaic of memory that lacked a real dimension of a forward moving time. The ‘end’ was the beginning and eternity bridged between life and death.”⁴

In the modern secular and urban world, ‘time’ had become the main life vessel which illustrated an imaginary symbolic meaning. Collective historical time had become the elementary ingredient of the personal and the intimate. The collective narrative shapes the personal meaning and what seems to be the ‘real.’ As much as some banal minds still insist that the ‘personal is political,’ it would be far more intelligible to argue that in practice, it is actually the other way around. Within the post-modern condition, the political is personal and the subject is spoken rather than speaking itself. Authenticity, for the matter, is a myth that reproduces itself in the form of symbolic identifier.

Sand’s reading of nationalism as a product of industrialisation, urbanisation and secularism, makes a lot of sense when bearing in mind Uri Slezkin’s suggestion that Jews are the ‘apostles of modernity,’ secularism and urbanisation. If Jews happened to find themselves at the hub of urbanisation and secularisation, it shouldn’t then take us by surprise that the Zionists were rather creative as much as others in inventing their own phantasmic collective imaginary tale. However, while insisting on their right to be ‘like other people’ Zionists have managed to transform their imagined collective past into a global, expansionist, merciless agenda as well as the biggest threat to world peace.

There Is No Jewish History

It is an established fact that not a single Jewish history text had been written between the 1st century and early 19th century. The fact that Judaism is based on a religious historical myth may have something to do with it. An adequate scrutiny of the Jewish past was never a primary concern within the Rabbinical tradition. One of the reasons is probably the lack of a need of such a methodical effort. For the Jew who lived during ancient times and the Middle Ages, there was enough in the Bible to answer most relevant questions having to do with day-to-day life, Jewish meaning and fate. As Shlomo Sand puts it, “a secular chronological time was foreign to the ‘Diaspora time’ that was shaped by the anticipation for the coming of the Messiah.”

However, in the light of German secularisation, urbanisation, and emancipation, and due to the decreasing authority of the Rabbinical leaders, an emerging need of an alternative cause rose amongst the awakening Jewish intellectuals. The emancipated Jew wondered who he was, where he come from. He also started to speculate what his role might be within the rapidly opening European society.

In 1820, the German Jewish historian Isaak Markus Jost (1793-1860) published the first serious historical work on Jews, namely The History of the Israelites. Jost avoided the Biblical time, he preferred to start his journey with the Judea Kingdom, he also compiled an historical narrative of different Jewish communities around the world. Jost realised that the Jews of his time did not form an ethnic continuum. He grasped that Israelites from place to place were rather different. Hence, he thought there was nothing in the world that should stop Jews from total assimilation. Jost believed that within the spirit of enlightenment, both the Germans and the Jews would turn their back to the oppressive religious institution and would form a healthy nation based on a growing geographically orientated sense of belonging.

Though Jost was aware of the evolvement of European nationalism, his Jewish followers were rather unhappy with his liberal optimistic reading of the Jewish future. “From historian Heinrich Graetz on, Jewish historians began to draw the history of Judaism as the history of a nation that had been a ‘kingdom’, expelled into ‘exile’, became a wandering people and ultimately turned around and went back to its birthplace.”

For the late Moses Hess, it was a racial struggle rather than a class struggle that would define the shape of Europe. Accordingly, suggests Hess, Jews better return and reflect on their cultural heritage and ethnic origin. For Hess, the conflict between Jews and Gentiles was the product of racial differentiation, hence, unavoidable.

The ideological path from Hess’s pseudo scientific racist orientation to Zionist historicism is rather obvious. If Jews are indeed an alien racial entity (as Hess, Jabotinsky and others believed), they better look for their natural homeland, and this homeland is no other than Eretz Yizrael. Cleary, Hess’s assumption regarding a racial continuum wasn’t scientifically approved. In order to maintain the emerging phantasmic narrative, an orchestrated denial mechanism had to be erected just to make sure that some embarrassing facts wouldn’t interfere with the emerging national creation.

Sand suggests that the denial mechanism was rather orchestrated and very well thought out. The Hebrew University decision in the 1930’s to split Jewish History and General History into two distinct departments was far more than just a matter of convenience. The logos behind the split is a glimpse into Jewish self-realisation. In the eyes of Jewish academics, the Jewish condition and Jewish psyche were unique and should be studied separately. Apparently, even within Jewish academia, a supreme status is reserved for the Jews, their history and their self-perception. As Sand insightfully unveils, within the Jewish Studies departments the researcher is scattering between the mythological and the scientific while the myth maintains its primacy. Yet, it often gets into a stalling dilemma by the ‘small devious facts.’

The New Israelite, the Bible, and Archaeology

In Palestine, the new Jews and later the Israelis were determined to recruit the Old Testament and to transform it into the amalgamate code of the future Jew. The ‘nationalisation’ of the Bible was there to plant in young Jews the idea that they are the direct followers of their great ancient ancestors. Bearing in mind the fact that nationalisation was largely a secular movement, the Bible was stripped of its spiritual and religious meaning. Instead, it was viewed as an historical text describing a real chain of events in the past. The Jews who had now managed to kill their God learned to believe in themselves. Massada, Samson and Bar Kochva became suicidal master narratives. In the light of their heroic ancestors, Jews learned to love themselves as much as they hate others, except that this time they possessed the military might to inflict real pain on their neighbours. More concerning was the fact that instead of a supernatural entity — namely God — who command them to invade the land and execute a genocide and to rob their ‘promised land’ of its indigenous inhabitants, within their national revival project it was them as themselves, Herzl, Jabotinsky, Weitzman, Ben Gurion, Sharon, Peres, Barak who decided to expel, destroy and kill. Instead of God, it was then the Jews killing in the name of Jewish people. They did it while Jewish symbols decorate their planes and tanks. They followed commands that where given in the newly restored language of their ancestors.

Surprisingly enough, Sand who is no doubt a striking scholar, fails to mention that the Zionist hijacking of the Bible was in fact a desperate Jewish answer to German Early Romanticism. However, as much as German philosophers, poets, architects and artists were ideologically and aesthetically excited about pre-Socratic Greece, they knew very well that they were not exactly Hellenism’s sons and daughters. The nationalist Jew took it one step further, he bound oneself into a phantasmic blood chain with his mythical ancestors, not before long he restored their ancient language. Rather than a sacred tongue, Hebrew had become a spoken language. German Early Romanticist never went that far.

German intellectuals during the 19th century were also fully aware of the distinction between Athens and Jerusalem. For them, Athens stood for universal, the epic chapter of humanity and humanism. Jerusalem was, on the contrary, the grand chapter of tribal barbarism. Jerusalem was a representation of the banal, non-universal, monotheistic merciless God, the one who kills the elder and the infant. The Germanic Early Romantic era left us with Hegel, Nietzsche, Fichte and Heidegger and a just a few Jewish self-haters, leading amongst them, Otto Weininger. The Jerusalemite left us with not a single master ideological thinker. Some German Jewish second-rate scholars tried to preach Jerusalem in the Germanic exedra, amongst them were Herman Cohen, Franz Rosenzveig and Ernst Bloch. They obviously failed to notice that it was the traces of Jerusalem in Christianity, which German Early Romanticists despised.

In their effort to resurrect ‘Jerusalem,’ archaeology was recruited to provide the Zionist epos with its necessary ‘scientific’ ground. Archaeology was there to unify the Biblical time with the moment of revival. Probably the most astonishing moment of this bizarre trend was the 1982 ‘military burial ceremony’ of the bones of Shimon Bar Kochva, a Jew rebel who died 2000 years earlier. Executed by the chief military Rabbi, a televised military burial was given to some sporadic bones found in a cave near the Dead Sea. In practice suspected remains of a 1st century Jew rebel was treated as an IDF casualty. Clearly, archaeology had a national role, it was recruited to cement the past and the present while leaving the Galut out.

Astonishingly enough, it didn’t take long before things turned the other way around. As archaeological research become more and more independent of the Zionist dogma, the embarrassing truth filtered out. It would be impossible to ground the truthfulness of the Biblical tale on forensic facts. If anything, archaeology refutes the historicity of the Biblical plot. Excavation revealed the embarrassing fact. The Bible is a collection of innovative fictitious literature.

As Sand points out, the Early Biblical story is soaked with Philistines, Aramaic and camels. Embarrassingly enough, as far as excavations are there to enlighten us, Philistine didn’t appear in the region before the 12th century BC, the Aramaic appears a century later and camels didn’t show their cheerful faces before the 8th century. These scientific facts lead Zionist researchers into some severe confusion. However, for non-Jewish scholars such as Thomas Thompson, it was rather clear that the Biblical is a “late collection of innovative literature written by a gifted theologian.”⁵ The Bible appears to be an ideological text that was there to serve a social and political cause.

Embarrassingly enough, not much was found in Sinai to prove the story of the legendary Egyptian Exodus, seemingly 3 million Hebraic men, women and children were marching in the desert for 40 years without leaving a thing behind. Not even a single matzo ball, very non-Jewish one may say.

The story of the Biblical resettlement and the genocide of the Canaanite which the contemporary Israelite imitates to such success is another myth. Jericho, the guarded city that was flattened to the sounds of horns and almighty supernatural intervention was just a tiny village during the 13th century BC.

As much as Israel regards itself as the resurrection of the monumental Kingdom of David and Salomon, excavation that took place in the Old City of Jerusalem in the 1970’s revealed that David’s kingdom was no more than a tiny tribal setting. Evidence that was referred by Yigal Yadin to King Solomon had been refuted later by forensic tests made with Carbon 14. The discomforting fact has been scientifically established. The Bible is a fictional tale, and not much there can ground any glorifying existence of Hebraic people in Palestine at any stage.

Who invented the Jews?

Quite early on in his text, Sand raises the crucial and probably the most relevant questions. Who are the Jews? Where did they come from? How is it that in different historical periods they appear in some very different and remote places?

Though most contemporary Jews are utterly convinced that their ancestors are the Biblical Israelites who happened to be exiled brutally by the Romans, truth must be said. Contemporary Jews have nothing to do with ancient Israelites, who have never been sent to exile because such an expulsion has never taken place. The Roman Exile is just another Jewish myth.

“I started looking in research studies about the exile from the land” says Sand in a Haaretz interview, “but to my astonishment I discovered that it has no literature. The reason is that no one exiled the people of the country. The Romans did not exile peoples and they could not have done so even if they had wanted to. They did not have trains and trucks to deport entire populations. That kind of logistics did not exist until the 20th century. From this, in effect, the whole book was born: in the realization that Judaic society was not dispersed and was not exiled.”

Indeed, in the light of Sand’s simple insight, the idea of Jewish exile is amusing. The thought of Roman Imperial navy was working 24/7 schlepping Moishe’le and Yanka’le to Cordova and Toledo may help Jews to feel important as well as schleppable, but common sense would suggest that the Roman armada had far more important things to do.

However, far more interesting is the logical outcome: If the people of Israel were not expelled, then the real descendants of the inhabitants of the Kingdom of Judah must be the Palestinians.

“No population remains pure over a period of thousands of years” says Sand. “But the chances that the Palestinians are descendants of the ancient Judaic people are much greater than the chances that you or I are its descendents. The first Zionists, up until the Arab Revolt [1936-9], knew that there had been no exiling, and that the Palestinians were descended from the inhabitants of the land. They knew that farmers don’t leave until they are expelled. Even Yitzhak Ben-Zvi, the second president of the State of Israel, wrote in 1929 that, ‘the vast majority of the peasant farmers do not have their origins in the Arab conquerors, but rather, before then, in the Jewish farmers who were numerous and a majority in the building of the land.’”

In his book Sand takes it further and suggests that until the First Arab Uprising (1929) the so-called leftist Zionist leaders tended to believe that the Palestinian peasants who are actually ‘Jews by origin’ would assimilate within the emerging Hebraic culture and would eventually join the Zionist movement. Ber Borochov believed that “a falach (Palestinian Peasant), dresses as a Jew, and behaves as a working class Jew, won’t be at all different from the Jew”. This very idea reappeared in Ben Gurion’s and Ben-Zvi’s text in 1918. Both Zionist leaders realised that Palestinian culture was soaked with Biblical traces, linguistically, as well as geographically (names of villages, towns, rivers and mountains). Both Ben Gurion and Ben-Zvi regarded, at least at that early stage, the indigenous Palestinians as ethnic relatives who were holding close to the land and potential brothers. They as well regarded Islam as a friendly ‘democratic religion’. Clearly, after 1936 both Ben-Zvi and Ben Gurion toned down their ‘multicultural’ enthusiasm. As far as Ben Gurion is concerned, ethnic cleansing of the Palestinians seemed to be far more appealing.

One may wonder, if the Palestinians are the real Jews, who are those who insist upon calling themselves Jews?

Sand’s answer is rather simple, yet it makes a lot of sense. “The people did not spread, but the Jewish religion spread. Judaism was a converting religion. Contrary to popular opinion, in early Judaism there was a great thirst to convert others.”

Clearly, monotheist religions, being less tolerant than polytheist ones have within them an expanding impetus. Judaic expansionism in its early days was not just similar to Christianity but it was Judaic expansionism that planted the ‘spreading out’ seeds in early Christian thought and practice.

“The Hasmoneans,” says Sand, “were the first to begin to produce large numbers of Jews through mass conversion, under the influence of Hellenism. It was this tradition of conversions that prepared the ground for the subsequent, widespread dissemination of Christianity. After the victory of Christianity in the 4th century, the momentum of conversion was stopped in the Christian world, and there was a steep drop in the number of Jews. Presumably many of the Jews who appeared around the Mediterranean became Christians. But then Judaism started to permeate other regions — pagan regions, for example, such as Yemen and North Africa. Had Judaism not continued to advance at that stage and had it not continued to convert people in the pagan world, we would have remained a completely marginal religion, if we survived at all.”

The Jews of Spain, whom we believed to be blood related to the Early Israelites seem to be converted Berbers. “I asked myself,” says Sand, “how such large Jewish communities appeared in Spain. And then I saw that Tariq ibn Ziyad, the supreme commander of the Muslims who conquered Spain, was a Berber, and most of his soldiers were Berbers. Dahia al-Kahina’s Jewish Berber Kingdom had been defeated only 15 years earlier. And the truth is there are a number of Christian sources that say many of the conquerors of Spain were Jewish converts. The deep-rooted source of the large Jewish community in Spain was those Berber soldiers who converted to Judaism.”

As one would expect, Sand approves the largely accepted assumption that the Judaicised Khazars constituted the main origins of the Jewish communities in Eastern Europe, which he calls the Yiddish Nation. When asked how come they happen to speak Yiddish, which is largely regarded as a German medieval dialect, he answers, “the Jews were a class of people dependent on the German bourgeoisie in the east, and thus they adopted German words.”

In his book Sand manages to produce a detailed account of the Khazarian saga in Jewish history. He explains what lead the Khazarian kingdom towards conversion. Bearing in mind that Jewish nationalism is, for the most part, lead by a Khazarian elite, we may have to expand our intimate knowledge of this very unique yet influential political group. The translation of Sand’s work into foreign languages is an immediate must.

What Next?

Professor Sand leaves us with the inevitable conclusion. Contemporary Jews do not have a common origin and their Semitic origin is a myth. Jews have no origin in Palestine whatsoever and therefore, their act of so-called ‘return’ to their ‘promised land’ must be realised as an invasion executed by a tribal-ideological clan.

However, though Jews do not constitute any racial continuum, they for some reason happen to be racially orientated. As we may notice, many Jews still see mixed marriage as the ultimate threat. Furthermore, in spite of modernisation and secularisation, the vast majority of those who identify as secular Jews still succumb to blood ritual (circumcision) a unique religious procedure which involves no less than blood sucking by a Mohel.

As far as Sand is concerned, Israel should become “a state of its citizens.” Like Sand, I myself believe in the same futuristic utopian vision. However, unlike Sand, I do grasp that the Jewish state and its supportive lobbies must be ideologically defeated. Brotherhood and reconciliation are foreign to Jewish tribal worldview and have no room within the concept of Jewish national revival. As dramatic as it may sound, a process of de-judaification must take place before Israelis can adopt any universal modern notion of civil life.

Sand is no doubt a major intellectual, probably the most advanced leftist Israeli thinker. He represents the highest form of thought a secular Israeli can achieve before flipping over or even defecting to the Palestinian side (something that happened to just a few, me included). Haaretz interviewer Ofri Ilani said about Sand that unlike other ‘new historians’ who have tried to undermine the assumptions of Zionist historiography, “Sand does not content himself with going back to 1948 or to the beginnings of Zionism, but rather goes back thousands of years.” This is indeed the case, unlike the ‘new historians’ who ‘unveil’ a truth that is known to every Palestinian toddler; i.e., the truth of being ethnically cleansed; Sand erects a body of work and thought that is aiming at the understanding of the meaning of Jewish nationalism and Jewish identity. This is indeed the true essence of scholarship. Rather than collecting some sporadic historical fragments, Sand searches for the meaning of history. Rather than a ‘new historian’ who searches for a new fragment, he is a real historian motivated by a humanist task. Most crucially, unlike some of the Jewish historians who happen to contribute to the so-called left discourse, Sand’s credibility and success is grounded on his argument rather than his family background. He avoids peppering his argument with his holocaust survivor relatives. Reading Sand’s ferocious argument, one may have to admit that Zionism in all its faults has managed to erect within itself a proud and autonomous dissident discourse that is far more eloquent and brutal than the entire anti-Zionist movement around the world.

If Sand is correct, and I myself am convinced by the strength of his argument, then Jews are not a race but rather a collective of very many people who are largely hijacked by a late phantasmic national movement. If Jews are not a race, do not form a racial continuum and have nothing to do with Semitism, then ‘anti-Semitism’ is, categorically, an empty signifier. It obviously refers to a signifier that doesn’t exist. In other words, our criticism of Jewish nationalism, Jewish lobbying and Jewish power can only be realised as a legitimate critique of ideology and practice.

Once again I may say it, we are not and never been against Jews (the people) nor we are against Judaism (the religion). Yet, we are against a collective philosophy with some clear global interests. Some would like to call it Zionism but I prefer not to. Zionism is a vague signifier that is far too narrow to capture the complexity of Jewish nationalism, its brutality, ideology and practice. Jewish nationalism is a spirit and a spirit doesn’t have clear boundaries. In fact, none of us know exactly where Jewishness stops and where Zionism starts as much as we do not know where Israeli interests stop and where the Neocon’s interests start.

As far as the Palestinian cause is concerned, the message is rather devastating. Our Palestinian brothers and sisters are at the forefront of a struggle against a very devastating philosophy. Yet, it is clearly not just the Israelis whom they fight with rather a fierce pragmatic philosophy that initiates global conflicts on some gigantic scale. It is a tribal practice that seeks influence within corridors of power and super powers in particular. The American Jewish Committee is pushing for a war against Iran. Just to be on the safe side David Abrahams, a ‘Labour Friend of Israel’ donates money to the Labour Party by proxy. More or less at the same time two million Iraqis die in an illegal war designed by one called Wolfowitz. While all the above is taking place, millions of Palestinians are starved in concentration camps and Gaza is on the brink of a humanitarian crisis. As it all happens, ‘anti-Zionist’ Jews and Jews in the left (Chomsky included) insist upon dismantling the eloquent criticism of AIPAC, Jewish lobbying and Jewish power posed by Mearsheimer and Walt.

Is it just Israel? Is it really Zionism? Or shall we admit that it is something far greater than we are entitled even to contemplate within the intellectual boundaries we imposed upon ourselves? As things stand, we lack the intellectual courage to confront the Jewish national project and its many messengers around the world. However, since it is all a matter of consciousness-shift, things are going to change soon. In fact, this very text is there to prove that they are changing already.

To stand by the Palestinians is to save the world, but in order to do so we have to be courageous enough to stand up and admit that it is not merely a political battle. It is not just Israel, its army or its leadership, it isn’t even Dershowitz, Foxman, and their silencing leagues. It is actually a war against a cancerous spirit that hijacked the West and, at least momentarily, diverted it from its humanist inclination and Athenian aspirations. To fight a spirit is far more difficult than fighting people, just because one may have to first fight its traces within oneself. If we want to fight Jerusalem, we may have to first confront Jerusalem within. We may have to stand in front of the mirror, look around us. We may have to trace for empathy in ourselves in case there is anything left.

1. When And How The Jewish People Was Invented Shlomo Sand, Resling 2008, p 11.
2. Sand, p 31.
3. p 42.
4. p 62.
5. p 117.

There’s nothing the matter with teachers that a little less unionization and more COMPETITION couldn’t cure.
– Ann Coulter (racist reactionary right wing pundit)

It would force the district to learn how to run great schools by forcing them to COMPETE.
– Ben Austin (Executive Director LAPU/PR)

Several Emerson Middle School parents, activists, and teachers recently contacted me. They informed me LAPU/Parent (counter)Revolution has an “organizer” going door-to-door gathering signatures to privatize their school, this despite the fact Emerson isn’t on LAUSD Superintendent Cortines’ current privatization list. I asked them to describe the “organizer,” expecting LAPU/PR to have committed one of their most experienced employees, Shirley Ford or Mary Najara, to a project so ideologically important to chief privatizer Ben Austin.

The person gathering signatures they described, while initially unexpected, made complete sense in the context of the class character and demographics of where the canvassing is occurring. We’ll get back to this shortly.

Anyone over the age of 30 should recall phrases including “school choice” were the clarion call of segregationists and southern dixiecrats. It’s no small irony that one of Ben Austin’s Georgetown University Law School predecessors, Milton Korman, argued on the Jim Crow side of Brown vs. Board of Education. While the context of modern white flight isn’t directly comparable to that of the segregationists, its character and motivations are the same. Let’s look at the subtle, insidious racism that fuels the charter/voucher movement.

It’s one thing to discuss the racism charter schools and voucher advocates like Alliance, Bright Star, and Green Dot represent in the abstract. It’s quite another to demonstrate it in practice. For help with this, let’s turn to an Emerson parent who is an ardent Green Dot/LAPU/PR supporter. This parent, posting anonymously as helpemerson on the LAPU/PR Emerson privatization message board, forgets they’re posting in a public forum and lets the code words fly:

I think the Green Dot priorities would be great at Emerson. The kids need more work on their character and decorum and what it means to be a good citizen.¹

Character? Decorum? No, that wasn’t a Sarah Palin speech. It is however, very representative of the language employed by affluent white parents at Los Angeles schools where children of color have been or are currently bused in. In the wealthy white world of Beverly Hills, Westwood, and Franklin Canyon, phrases like “those people,” and questions like “when will they stop bussing?” top the list of code words overheard by social justice minded parents and teachers at schools like Emerson and Mark Twain.² These racist code words employed by westside parents like helpemerson including “character” and “decorum” fit right in with the bigoted westside phrases like “culture of failure” exposed in Carolyn Jacobson’s brilliant article “The Revolution of Separate, but Equal.”

This brings us back to the beginning of our essay, in which we were discussing LAPU/PR’s choice of organizers for their westside offensive. The description people provided of the LAPU/PR petition bearer went as follows: young, thin, blonde hair, blue eyes, and female. They were describing one of LAPU/PR’s newer employees, Nayla Wren. Is it pure coincidence Green Dot would prefer their blonde, blue eyed employee to canvas the affluent, predominantly white westside neighborhoods over their most experienced and seasoned “organizers,” who just happen to be women of color? Probably no more coincidence than the fact that all of Green Dot’s top executives are wealthy white males. Probably no more coincidence than Ben Austin calling 77% white Warner Avenue Elementary wonderful, and 11% white Emerson Middle School failing.³ Green Dot’s pandering to white flight and westside elitism is part and parcel the type of racism and segregation discussed in Jonathan Kozol’s seminal works “Savage Inequalities: Children in America’s Schools” and “The Shame of the Nation: The Restoration of Apartheid Schooling in America.” One of the reasons Green Dot/LAPU/PR protested, but couldn’t refute⁴ Carolyn Jacobson’s article exposing westside racism, is that when the covers are pulled off the country club elitism of Steve Barr, Marshall Tuck, Antony Ressler, Ben Austin, and Marco Petruzzi, things get ugly.

Let’s be clear, the so called academic apologists for the racism and segregation inherent in charter schools and voucher programs include The Heritage Foundation, The Hoover Institution, The Cato Institute, and other far right think tanks.⁵ While these extreme right organizations are completely unconcerned with racial egalitarianism or class equality, they try to make a case that markets magically fix society’s systemic problems. These racist Milton Friedman cum Ayn Rand fantasies are adopted wholesale (with slight rewording) by the DLC/DFER crowd and presented as “innovation” and “reform.” No wonder Newt Gingrich and Ann Coulter are on the same side as Ben Austin and Arne Duncan. Let’s also bear in mind the critics of charter schools and vouchers include left luminaries like Donaldo Macedo, Jonathan Kozol, and Henry Giroux. This is why Ben Austin and Gabe Rose’s specious comparisons of those opposing school privatization and vouchers to right wing health care town hall disrupters⁶ are absurd on their face! Privatization and neoliberalism is the right wing position in the education reform debate, and the charter/voucher crowd represent reactionary ideas like segregation, competition, and union busting with great adeptness.

To those who would claim the motley assortment of business types, lawyers, and political hacks that comprise the pro-privatization camp have good intentions, but just misguided ways of executing them; and claim the reason extreme right forces happen to agree with the DLC/DFER on charters/vouchers is it’s just a manifestation of bipartisan concern for children, it’s reckoning time. Even if the wealthy white males on the leading edge of school privatization were really in it for their concern about society instead the money (exposed in Kozol’s “The Big Enchilada“), then they’d still be exhibiting precisely what Paulo Freire describes as “the false generosity of paternalism.”⁷

What’s more, it isn’t mere coincidence that LAUSD’s sole African American board member, Marguerite Poindexter LaMotte, vehemently opposed the corporate charter choice resolution. It’s been long recognized in communities of color that the underfunding of inner city schools combined with privatization represented by charter/voucher advocates is another way to perpetuate the grip of the white supremacist overclass. Let’s look at how progressive African American writers view the charter/voucher onslaught. Los Angeles Sentinel’s Larry Aubry said of LAUSD VP Yolie Flores Aguilar’s corporate charter choice resolution:

The Public School Choice Resolution continues pattern of indifference to the plight of Black students-that is not acceptable. Parents, teachers, school boards and concerned others must work hard, and together, to guarantee a quality education for these much maligned but immeasurably deserving children.⁸

Black Agenda Radio’s Glen Ford said of charter/voucher privatization:

“Outsourcing of public education only occurs in overwhelmingly Black and brown school districts, places where, like in Los Angeles, public property and public responsibility to students is put on the private auction block.⁹

Black Agenda Report’s managing editor Bruce A. Dixon’s recent article should be read in its entirety, but this quote is especially cogent and to the point:

Improving education is not the goal. Privatization is the goal. The targets of school privatization are not supposedly underperforming students and teachers. The target is democracy itself. Private interests are just that – private. Turning public schools over to private interests frustrates even the possibility of democracy. Charter school apologists often claim that greater parental involvement is a hallmark of their model. But to the extent that it is true at all, it’s involvement of a select group of parents, and not open to those of the entire community. Charter schools undermine what is left of community.¹⁰

There’s much more to explore on this topic, but for now this will have to suffice. Lest the poverty pimps and privatization pushers try and play the oldest card of colonialism, divide and conquer, check out the latest progressive statement from the Association of Raza Educators regarding charters/vouchers.

1. Emerson Middle School. I also created a screen capture, since Green Dot/LAPU/PR is famous for redacting reality. The image captures the Emerson LAPU supporter’s racist code words for posterity. For some excellent articles on racist “code words” in general see:
   Is the racist smear campaign working? by Brian Jones
   Deciphering their racist code words by Keeanga-Yamahtta Taylor.
2. In the case of Mark Twain, the wealthy white elite of Venice (particularly the exclusive canal neighborhood from which Green Dot’s ruthless CEO Marco Petruzzi hails). It’s worth mentioning Mr. 90210, Ben Austin, lives near Emerson. Cynical much?
3. First exposed by journalist Caroline Grannan we also discuss this in a blog. Could you imagine Eli Broad and Steve Barr sycophants Jason Song and Howard Blume actually doing real reporting like Grannan? Now that the Los Angeles Times is basically a PR department for Broad’s DFER privatization project, we will never see an honest piece out of them again.
4. Note they state the piece is full of “disgusting and divisive lies,” but provide no evidence to the contrary. In other words, since everything in Ms. Jacobson’s article is true, all the country club klan at LAPU/PR can do is smear the messenger.
5. The racist reactionary right wing loves charters, vouchers, and neoliberal phrases like school choice. They have devoted tons of ink to trying to explain how the free market doesn’t perpetuate racism. Their arguments, with minor modification, have been adopted wholesale by the DLC/DFER. Here are a few of their disgusting works:

   The Heritage Foundation
   The Hoover Institution
   The Cato Institute

6. For feeble prose and an example of these ridiculous comparisons by the right wing privatizers trying to paint the left as right wing on this issue.
7. Paulo Freire “Pedagogy of the Oppressed” p. 54. If you claim to be on the left and haven’t read Freire, you’re fooling yourself.
8. Blacks Not Part of Public School Choice Plan.
9. Outsource It! Privatize It! LA School Reform in the Age of Obama. An astute comment following Ford’s cogent article asks ‘Isn’t this just institutionalization of the “Bell Curve?”‘ Seems like a lot of folks see right through the racism of the charter/voucher “movement.”
10. Obama’s Public Education Policy: Privatization, Charters, Mass Firings, Neighborhood Destabilization. Bruce A. Dixon is a real revolutionary. Unlike those right wingers living in the 90210 zip code claiming and using the word without knowing what it really means.

With regard to a contemporary program, for instance (neo)-Malthusian measures, to solve the “population problem,” such propositional theory put into wholesale praxis would essentially expand and accelerate the genocidal effects of the civilizing process. Sure that sounds like a loaded allegation and indictment upon an archaic Western archetype and his immoral conjectures, but it is true. Not only did Malthus believe that inequality was natural and good, or “at least necessary for avoiding the problem of massive overpopulation and hence starvation;” he also “denounced soup kitchens and early marriages while defending smallpox, slavery, and child murder [sic].”¹

Malthus believed that social inequality and poverty was natural, expunging from the historical record centuries, if not millennia, of social engineering, construction and stratification of a system that manifests inequality and penury by virtue of its own design. In other words, abject poverty, famine and, social stratification that unjustly engenders inequality, are tangents of social arrangements configured by sovereign powers themselves.

These same sovereign powers set up and normalized the city-state lifestyle/culture (i.e., civilization) as a way to enhance and, make more efficient, production at the expense of human and nonhuman resources in order to enhance the luxuries of those positioned at the top of the hierarchy. Surfeit resources, profits and assets, enjoyed by few, are commensurate with expanded efficiency in production and, in turn, so will a population that is organized around growing and perpetuating said social arrangements grow geometrically. In other words, “population growth correlates with economic prosperity.”² Therefore, overpopulation of humans on this planet is not necessarily a natural phenomenon as much as it is a direct result of the dominant social construct, i.e., overpopulation is moreso anthropogenic than it is organic. So, for starters, Malthus had conveniently designed the theoretical framework for the dominant culture so to fix a problem induced by the dominant culture.

Second on the list of excoriations directed toward Thomas Malthus and his legacy of villainous schemes and those who propound and argue in defense of such machinations, is the hunger fallacy. Despite the fact that the world population is, at the very least, six fold from what it was in 1800, there is still more than enough food produced the world over to support the population.³ Africa alone produces 25 percent of the world’s cereals, but yet it is the most immiserated continent on the planet. This is a direct result of global trade, orchestrated by the world’s richest coterie of individuals (i.e., the WTO, World Bank and IMF, et al.). Africa grows enough food to feed itself, but because its countries have been co-opted, if not coerced at the barrel of a gun by Western trade agents over the centuries, it has to export its very own solution to famine. Those countries who spurn compliance with Western trade agreements are subject to reprehensible sanctions that Arundhati Roy refers to as “New Genocide,” meaning the creation of “conditions [through economic sanctions] that lead to mass death without actually going out and killing people.”⁴ Digression aside, what is transpiring in Africa is not an isolated occurrence. In India, where millions are the victims of starvation and malnutrition, there have been incidences, time and again, in which the government allows immorally imbalanced disbursement of food. One example that Arundhati Roy presents in her book, An Ordinary Person’s Guide to Empire, reports the Indian government allowing 63 million tons of grain to rot in its granaries.⁵ Meanwhile, twelve million tons were exported and put on sale at a subsidized price the Indian government refused to offer its country’s impoverished peoples.⁶ There is more than enough food to feed people – bottom line.

When exploring the implications of a (neo)-Malthusian program, one must ask, as Richard Robbins advises, “what social interests or purposes might be advanced by their acceptances?” Clearly, Malthus envisioned a world where the elite and upper class decide and act upon population control by advancing measures that materialized from within the very former and latter statuses. It should also be noted that Malthus was not concerned with population growth, he was concerned with the rising number of poor in England at the time and, why they should or should not exist and, “what should be done about them.”⁷ Malthus erroneously, and egregiously – might I add, saw poverty not as a consequence of “expanding industrialism, enclosure laws… or the need of manufacturers for a source of inexpensive labor…” but rather as a phenomenon that emerged from “the laws of nature…”⁷

The Malthusian premise is one that presumes poverty exists by virtue of overpopulation, which is often postulated as the fault of fundamentally flawed human beings – which is dehumanizing to say the least. And, his theory (and any other theoretical fledglings of similarity) exempts the privileged elite from any accountability for fomenting and perpetuating the framing conditions and social arrangements that engender overpopulation and poverty in the first place.

If there really were something inherently poor and laggard in large populations, then affluent places like London or Manhattan would elicit fear of overpopulation. But the truth is, such sentiment is not directed internally toward ‘civilized’ regions of high densities of people, but rather it is directed externally toward areas and regions that are sought after for resources – areas that need to be ‘managed’ and ‘civilized.’ These are areas that, unlike densely populated areas of developed countries, are impoverished and immiserated on account of sanctions, development projects, foreign debt, illicit purloining of resources, and more, perpetrated and/or effected by foreign institutions – the very institutions that not only wreak tremendous social and ecological havoc, but also castigate such ‘victim’ countries as being ‘poor’ and ‘problematic’ and as ‘jeopardizing’ the globe with overpopulation. This is pathologically depraved behavior.

Furthermore, in today’s economic climate, one who recognizes the limits of economics within an ecological context of invariable finite materials is often referred to as a ‘neo–Malthusian.’ But because one recognizes the intrinsic limits to growth does not also mean that such a realization is concomitant with Malthusian theory, or rather: Just because one recognizes the limits to growth does not mean they are a neo-Malthusian.

The crux is, there are limits to growth. The planet is comprised of finite resources. Any intelligent creature is aware of this unalterable truth. However, these facts do not warrant one group of people to assume a higher positioning over another as a means to decide who lives, who is ‘useful,’ who gets what and when and where. The truth is, as many maintain, the whole carrying capacity discussion is either a.) not discussed honestly, or at all, or b.) it is approached with a narrow set of ‘solutions,’ all of which intend to perpetuate the status quo – which translates into either not solving shit or, solving the problem in a way that keeps those in power in power to enjoy their luxuries and privileges.

More importantly, owing to the fact that overpopulation is commensurate with economic growth (which confers tremendous power and wealth upon economic architects and directors i.e., the state and financial and corporate institutions) – we should, as Derrick Jensen suggests, honestly acknowledge how different our discourse and theoretical solutions would be if we changed the language from ‘overpopulation’ problems to ‘overconsumption’ problems? Here is where we find the fundamental flaws inhered within the ‘panaceas’ that are prescribed to fix this entire conundrum. We can’t address this issue as an ‘overconsumption’ problem because mitigating consumption growth would destroy the capitalist economy. So, unforgivably, we go with ‘overpopulation.’ Does anyone see the fundamental flaw yet? Does anyone else see what’s wrong here?

According to Jensen, “The United States constitutes less than 5 percent of the world’s population yet uses more than one-fourth of the world’s resources and produces one-fourth of the world’s pollution and waste.” And, if you “compare the average U.S. citizen to the average citizen of India, you find that the American uses fifty times more steel, fifty-six times more energy, one hundred and seventy times more synthetic rubber, two hundred and fifty times more motor fuel, and three hundred times more plastic.” Nonetheless, our concepts of overpopulation are usually not comprised of “those who do the most damage, the primary perpetrators (there can’t be too many [middle-class] Americans, can there?), but instead their primary (human) victims.”⁸

There is much absurdity and arrogance, as Jensen asserts, in the call for the poor to stop having children but not minding the rich driving around in SUVs, watching plasma-screen TVs while living sedentary lives in 3500 square foot homes, etc. ad nauseam. Also, to quote Jensen in depth:

…there are those who claim—equally absurdly, and equally arrogantly—that all talk of carrying capacity is racist and classist. To even use the phrase carrying capacity in this crowd is to invite hisses and catcalls, as well as spat epithets of Neo-Malthusian. I suppose the argument is that because some of those who want to protect this exploitative way of living use carrying capacity as a means of social control against the poor—as an American Indian activist friend said to me, “The only problem I have with population control is that you and I both know who is going to do the controlling”—then the notion of carrying capacity itself must be racist and classist. This seems similar to me to suggesting that because Hitler claimed (falsely) that Germany was being attacked by Poland, and that therefore the Germans needed to attack, and that because this same argument has routinely been used (just as falsely) by the United States as well as other imperial powers, that anyone who claims self-defense is lying. These people seem to forget that the misuse of an argument does not invalidate the argument itself. Worse, this argument, that the very concept of carrying capacity is a fabrication designed for social control, as opposed to a simple statement of limits, serves those in power as effectively as does ignoring or de-emphasizing resource consumption when speaking of overshooting carrying capacity, because it goes along with the refusal to acknowledge physical limits (and limits to exploitation) that characterize this culture. What would it take, I’ve heard peace and social justice activists ask, to bring the poor of the world to the fiscal standard of living of the rich? Well, another thirty planets, for one thing. It’s a dangerous—and stupid— question. Within this culture wealth is measured by one’s ability to consume and destroy. This means that attempts to industrialize the poor will further harm the planet. Because industrial production requires the exploitation of resources, the wealth of one group is always based on the impoverishment of another’s landbase, meaning that on a finite planet, the creation of one person’s (fiscal) wealth always comes at the cost of many others’ poverty. Those reasons are why the question is stupid. It’s dangerous because it serves as propaganda to keep both activists and the poor playing a game that doesn’t serve them well, and which they can never win, instead of quitting this game and working to take down the system.”⁹

There is a term called lactational amenorrhea, which is the absence of menstruation due to lactation. As long as a mother is nursing her neonate (i.e., infant) each and every time the child wants to feed, fertility is postponed. Basically, the female body temporarily shuts off its procreational facilities because the body is taxed to its limits regarding nutrient allocation for not only the infant but the mother as well. In other words, “If you continue with exclusive breast feeding for your baby’s first six months, your risk of becoming pregnant is less then 2 percent.”¹⁰

Many indigenous mothers would sleep with their infants through the night so that their child would be able to nurse even during sleep. This beautiful communion between mother and child was practiced nightly for upwards of six months, if not more.¹¹ This practice, which is being forever lost in the dominant culture, in tandem with sustainable living practices, conduced to a natural, safe, sane and non-exploitative program of population control.

One must ask, what sort of culture would replace such population control measures with something like the Malthusian model. The answers tell us that only an exploitative culture, hell-bent on production by means of degradation of another’s landbase, thence elevating one’s luxuries on account of another’s impoverishment, would discard sane and sustainable ways of living to achieve prosperous ends.

1. R.L. Heilbroner, The Worldly Philosophers, (New York: Simon & Schuster, 1999).
2. Richard H. Robbins, Global Problems and the Culture of Capitalism (4th Ed.), (Boston: Pearson, 2008), p. 153
3. Robbins, p. 150.
4. Arundhati Roy, An Ordinary Person’s Guide to Empire, (Cambridge: South End Press, 2004), p. 88.
5. N.A. Mujumdar, “Eliminate hunger now, poverty later,” Business Line, 8 January 2003.
6. “Foodgrain exports may slow down this fiscal [year],” India Business Insight, 2 June 2003; “India: Agriculture sector: Paradox of plenty,” Business Line, 26 June 2001; Ranjit Devraj, “Farmers protest against globalization,” Inter Press Service, 25 January 2001.
7. R.H. Robbins, p. 156.
8. Derrick Jensen, Endgame Volume I: The Problem of Civilization, (New York: Seven Stories Press, 2006), p. 115.
9. D. Jensen, p. 115-116.
10. Katie Singer, The Garden of Fertility: A Guide to Charting Your Fertility Signals to Prevent or Achieve Pregnancy – Naturally – and to Gauge Your Reproductive Health, (New York: Avery, 2004), p.68.
11. K. Singer, p. 67-70.

The debate has revealed a deep division over the causes and remedies, with Anglo-Franco American (AFA) politicians, columnists and economists on one side and their Asian-German (AG) counterparts on the other. In general terms the AFA spokespeople put the blame for the crises on external factors, or more specifically they point their finger at the positive trade surpluses, dynamic export sectors and high investment rates in productive sectors and low levels of consumption in the AG countries as the cause of ”unbalances” or “disequilibrium” in the world economy.¹

In contrast, the AG countries reject this argument which speaks to prejudicial external practices. They emphasize the internal “imbalances” within the AFA countries, which has weakened their international, commercial and financial position.

In this paper, I am going to argue that both internal economic policies and external empire building strategies of the AFA countries have been the driving force for global imbalances. The structural differences between the two regions and the differences in class structure and economic configurations in each bloc precludes any easy or immediate solution. On the contrary, for the foreseeable future, the conflict between dynamic emerging export powers and the declining western bloc is likely to intensify, leading to greater trade conflicts and possible military confrontations.

The AFA charges against China’s commercial ‘imbalances’ conflates trade with the West with Beijing’s relations with the rest of the world. China has balanced trade or even trade deficits with Asian, African, Middle Eastern and Latin American countries. Moreover, the AFA countries have trade imbalances with other regions including the Middle East and Germany. Even if the AFA countries curtailed imports from China, it is most likely that other Asian countries would replace them, including Vietnam, South Korea, Taiwan, Bangladesh and India. The resulting trade deficits of the AFA would remain about the same.

The AFA countries blame China’s “undervalued” currency, and claim that Beijing authorities manipulate the exchange rate to under price exports and beat out competitors (namely producers within the AFA). Yet China’s currency has been revalued steadily upward over 20% the past five years, and yet the AFA still run a deficit, suggesting that their domestic producers have still not been able to compete with Chinese manufacturers.² More recently AFA writers have complained about low interest rates set by the Chinese government as a “subsidy” to its exporters. Yet AFA interest rates are at zero percent or even negative, to no avail. Moreover, the AFA have provided over 1.5 trillion in bailout funds and over 1.3 billion in stimulus spending – a subsidy five times greater than China’s stimulus package, without improving their trade balance. What is telling, given the sectoral allocations, of each regime’s bailout – subsidy – stimulus packages, China has fully recovered and is growing at 8% by mid 2009, while the AFA continue to wallow in negative territory and continue running up trade deficits. This points to the centrality of internal factors, namely, the economic sectors which receive the state subsidies and how they invest it and as a result how their decisions affect trade balances.

The AFA charge that China’s low cost labor, its exploitation of workers accounts for trade imbalances. Yet an increasing percentage of China’s exports are based on technological advances, not cheap labor. This is because low labor cost competitors are emerging in Asia.

The AFA complain that China over emphasizes its ‘export’ strategy at the expense of producing for the domestic market. Yet nearly half of China’s exports to the US are made by US owned multi-nationals who have invested, subcontracted and co-produced with Chinese counterparts. In other words, US internal policy, the deregulation of capital flows, has facilitated the movement of US manufactures abroad resulting in a decline of local production, an increase in imports and greater trade deficits.

Internal Causes of Trade Deficits (and Unbalanced World Economy)

The most obvious and striking correlation with the growth of AFA trade imbalances is the growth and dominance of the financial sector.³ The financialization of the AFA economies and Wall Street’s CEOs dominant role in the strategic economic positions of the state is transparent to the mass of the people and has even been acknowledged by most private economists and academics. Trade deficits increased in direct proportion to the growing political and economic power of the financial sector. In large part, this was due to the transfer of capital from manufacturing to financial services, leading to the decline of the manufacturing sector’s investments in innovations and competitive management strategies. The financial sector’s, high salaries, bonuses and quick returns attracted most of self-styled “best and the brightest”. MBA graduates multiplied while advanced engineering school graduates diminished. Advanced skilled worker training programs disappeared while low skill retail sales recruitment grew.

The problem was that financial services did not, could not replace the overseas earnings which formerly accrued to the country through manufacturing sales. Least of all in the highly regulated financial markets of China, Japan, India and the rest of Asia, where banking was subordinated to the expansion of manufacturing — namely financing industries targeted by state officials. The dominance of finance capital and the related sectors of real estate and insurance, led to a highly polarized class structure: in which billionaire and millionaire investment bankers presided at the top and an army of low paid service workers (retail employees, cleaners and sweepers, etc.) immigrant and non-union workers occupied the bottom. Presently income inequalities in the US exceed those of any other “advanced” capitalist country. The inequalities in Manhattan exceed those of Guatemala. The growing concentration of wealth is accompanied by decline of median wages over the past three decades. As a result the purchasing power of US workers is declining, thus reducing the demand for locally produced quality goods. The purchase of imported cheap textiles, shoes and other accessories results. The result was a decline in local saving and domestic investment in manufacturing leading to a decline in competitiveness. Moreover, the competition among financial lenders furthered consumer spending and greater individual indebtedness at a time when manufacturing exports were declining, starved of investments.

Most manufacturing firms transformed themselves into financial corporations, channeling investment funds in sectors not earning foreign exchange. Worst of all in pursuit of higher profits, manufacturers turned into commercial vendors, closing down plants and sub-contracting production to China and other Asian countries and importing final products into the US creating the trade imbalances. The large scale relocation of US multi-nationals abroad further exacerbated the trade imbalances.

The key role of the state in creating domestic imbalances leading to global disequilibrium is a result of the financial sector’s takeover of the state,and the deregulation of financial markets. The result was the long term promotion of an economic policy, in which the central bank (the Federal Reserve) and Treasury encouraged the growth of finance ,real estate and insurance sectors over manufacturing. The finance based strategy was justified by a large army of academics and publicists who spoke of a “post industrial”, or “service” or “information” economy as a “higher stage”, rather than a perversely unbalanced, unsustainable and unjust economy.

Financial supremacy coincided with the growing militarization of US foreign policy. Throughout the last thirty years, US overseas economic expansion was gradually eclipsed by the growing reliance on military intervention, and the build-up of military bases in hundreds of sites. As financialization weakened the productive capacity of US manufacturing exporters’ efforts to capture markets, US policymakers increased their reliance on the supremacy of military power. The channeling of billions into military spending drained resources from efforts to upgrade the competitiveness of US civilian industry and was a major factor-in its declining share of export markets. The end result of militarization was a loss of export earnings and the growth of trade deficits.

If we combine the three great internal imbalances in the AFA economics, but especially in the US, the financialization of the economy, the militarization of foreign policy and the concentration of wealth at the top, we can best understand why the US has such a huge and growing trade deficit.

China Export Driven Strategy

China’s emphasis on an export driven strategy and the resultant growing class inequalities is largely a result of the class composition of the state and its social structure. In other words internal factors are the driving force of its pursuit of trade surpluses. What is ironic is that some of the AFA critics, who rightly point to the internal ‘imbalances’ in China, overlook similar problems in the West. Namely, no mention is made of the absence of a national health plan in the US, the growth of inequalities and declining mass purchasing power – even as they point to these deficiencies in China. What Western advocates of greater social welfare in China do not discuss, is the capitalist class power, privilege and profits which hinder greater mass consumption. Least of all do they discuss the motor force for lifting working class and peasant living conditions, namely the class struggle. Instead they rely on technocratic appeals to Chinese elites for greater social spending.

The Chinese state has evolved into a powerful machine for manufacturing goods and billionaires. Today China has the highest growth, the highest rate of exploitation and the greatest class inequalities in Asia. Increasing wages to stimulate local consumption means reducing profits, anathema to all capitalists including Chinese. Increasing public spending on universal health coverage especially for the 700 million uninsured peasants and rural workers means higher taxes on the rich, including the families and colleagues of the governing elite. In contrast, producing for export markets does not require increasing domestic consumer power, on the contrary it requires lower wages.

A shift from an export-driven to a domestic market driven strategy, requires not only a ‘change in policy’ but a deep shift in class power, from the current capitalist class and its state backers to the workers and peasants. To realize large scale, long term commitments of public revenues to social services for the rural poor and higher wages for exploited workers requires sustained popular mobilizations, uprisings, strikes to secure the independent trade unions and peasant associations necessary to secure a shift in state allocations toward domestic consumption.

China’s “imbalances” are largely internal, social and political. An imbalance of social power between an all powerful capitalist state and a repressed powerless mass of workers and peasants; an imbalance in income between a super-rich banking, real estate, manufacturing export elite and a low paid working class and subsistence peasantry;an imbalance between a highly organized state linked by family, ideology and economic interests to the capitalist class and a dispersed, fragmented and isolated mass of working people.

China’s ruling class, its outward billion dollar investments in western capitalist enterprises via its sovereign wealth funds, its billion dollar investments in overseas extractive enterprises, is driven by the mass of capital accumulated that is extracted via intense levels of labor exploitation and the elimination of state funded pensions, health plans and education. China’s role as an emerging imperial power is rooted in the imbalance between global power and social welfare decay.

The fact that western capitalist writers, policymakers and their academic camp followers point to the same social imbalances in China as its domestic working class critics should not obscure a basic point. The Wall Street critics are defending the AFA financial elite against China’s export industrialists’ greater productivity; while the domestic working class critics are criticizing the capitalists and the state for their high rates of exploitation and concentration of wealth.

The key to reducing imbalances in world trade is reducing socio-economic inequalities within each region. The US requires a profound shift from a finance dominated economy to a manufacturing economy, where finance, high tech and higher education is directed to creating a competitive, productive economy based on skilled labor. The link at the top between Wall Street and the Pentagon must be replaced by a link from below between the industrial working class, low paid service workers and public sector employees and professionals.

The structural transformation of the US economy is necessary but not sufficient. If US efforts to pursue a military driven empire persist, this will divert resources away from domestic and overseas economic priorities. Military driven empires alienate trading partners, have high costs and low returns, isolate economic investors and traders from productive partnerships and are destructive of domestic and overseas civilian productive facilities.

The way out of the massive imbalances is for the US to engage in a large scale, long term domestic structural transformations – namely de-financialization and de-militarization. But the political and economic forces benefiting from the current configuration are deeply entrenched, in control of both major parties and dominate the mass media and its message. Yet, despite their profound institutional power they suffer several fatal flaws. In the first instance they have created unsustainable global imbalances, which will sooner or later lead to a collapse of the dollar and renewed and more virulent and costly financial bubbles. Secondly, the free market which is the main ideological prop of the deregulated financial power elite is totally discredited as evidenced by the single digit support and trust of Wall Street. Thirdly, military driven empire building has run its course: after nine years of war in Afghanistan the vast majority of the US public has sent a message to the political elite of both parties, the White House and Congress, that its time to shift from funding failed overseas adventures to solving the problem of 20% under and unemployed Americans (30 million), the 100 million or 33% of Americans with no or costly and inadequate health coverage. No amount of media and political pundit scapegoating of China for our own self-induced “imbalances” can divert American opinion from their direct experiences with our own internal inequalities and policy failures.

1. Martin Wolf, “Why China must do more to rebalance its economy” Financial Times, September 23, 2009, p 11. See also Financial Times, October 3, 4, 2009. p 3 and Financial Times, September 21, 2009 p 9.
2. Financial Times, October 9, 2009 p 1.
3. Gerald Davis, Managed by the Markets: How Finance Re-Shaped America (New York: Oxford University Press 2009).

Ron Jacobs: Hi Marc, let me start with what seems to me to be an obvious question. Your newest book, Good Doctor Guillotin, is, among other things, a meditation on capital punishment. I’m guessing that your work opposing this form of punishment is part of what compelled you to write the novel. Yet, the story is about the invention of the guillotine. Can you talk about how these two sentiments (if that’s what they are) coincide and contradict each other?

Marc Estrin: It’s true that I think of this as “my death-penalty book”. As you know, Vermont has been under pressure from the feds to change its no-death-penalty stance to one conforming more to administration positions concerning capital punishment, and federal prosecutors continue to push for death as an option for federal capital crimes (crimes crossing state boundaries) tried in Vermont, trying to habituate Vermont juries to handing out death sentences, and the public to pressure the legislature to change Vermont statutes prohibiting them. I have written a reflection on a recent local capital trial which may be seen here.

Although the public seems to be less enthusiastic about the death penalty in the last two years, it is with us nevertheless (sometimes shockingly so as in the (upcoming) execution of the likely innocent Troy Davis), and the issue still needs work before we belatedly join the vast majority of nations in abolition.

How, then, to do that work? As with Skulk, my attempted end-run around the general censorship of 9/11 truth, The Good Doctor Guillotin is a reaching out beyond-the-choir of abolitionist regulars to a more general fiction reader who may not ever think about the issue. I had to think about the best way to involve such a person.

My hint was a strong reaction by several readers to the Sacco-Vanzetti chapter in Insect Dreams – that plus my own revulsion at a government planning and accomplishing the death of one of its citizens. It seems that detailed recounting of the prelude and countdown to an execution has strong, affective fascination, usually accompanied by a kind of identifying fear and horror often absent when we read reports of executions elsewhere. The end of A Tale of Two Cities is perhaps the supreme example.

That book certainly contributed to my choice of the French Revolution as a setting for an execution, but more than that was the stark theme of good intentions making things worse, humane science evolving into terror. Modern “improvements” in execution techniques — hanging to electric chair to gas to lethal injection – are motivated by far more technical and less revealing considerations, and so Guillotin’s situation was a very rich choice. He was in fact a good man turned into a monster by his ameliorations. So are many of us. But he knew it, too – which is what makes him so interesting a figure.

The downside of this choice is that the book may be mis-read as simply a historical novel about the French Revolution, ho-hum, that was a long time ago. I tried to block off that reception with the inclusion of contemporary essays in my own non-historical voice.

RJ: Similarly, this book also seems to be about the nature of revolution. One might frame the question this way: how do such good intentions — Liberte, equalite, fraternite — end up so horribly? Is it because the forces that are overthrown and have lost their privilege usually attack rather bloodily in an attempt to regain what they have lost or is it merely revenge on the part of the victors that were oppressed by the vanquished? Or is it something else?

ME: Having chosen the French Revolution as a setting, I spent six months reading everything I could about it, from many different authors. Because the story was to end with the first execution, and thus before the Terror, I might have limited my research to those years of preparation. But the beyond-the-novel question of how the hell the Declaration of the Rights of Man and of the Citizen ended up with mass slaughter seemed so compelling, so contemporary, so relevant to our own murderous march through the world preaching “democracy”, that I spent much time trying to understand that shift.

I’m no historian or real scholar, but it did seem to me that much hinged on the moment when the Revolution went from fighting its external enemies – the royal armies of states threatened by the demise of royalty – to, having successfully defeated them, worrying about the less visible threat of internal ones – those citizens who may be secretly plotting to overthrow, or undermine, or even think about criticism of the Revolution or a return to parts of the past. Who can know what anyone is thinking? Therefore anyone may be a suspect. And any suspect will of course declare innocence. It therefore became life-preserving to speak in a certain way, to use certain words, to wear certain clothing – like wearing an American flag pin – in order to pass. Alertness for counter revolutionaries was high, and among those in power, especially Robespierre, turned into what most would agree as frank paranoia.

“The enemy within” – a most dangerous conception to be floating free in a society. We’ve seen many examples of its destructiveness. I’ve recently written a piece about two of them as a warning concerning the current mental attitude of many Israelis concerning Palestinians. You can see that here. One telltale symptom of this pathology is when a movement starts to “eat its own children.” The struggle between Robespierre and Danton was so rich in this regard, that at least two great artists have seized upon it: Büchner, in his play, Danton’s Death, and Andrej Wajda in his film, Danton. Both treatments, though poetic fiction, have enriched understanding of revolutionary struggle.

Another way good intentions go astray is via an instinct for hyper-protection when an individual, a movement, a revolution, or a nation feels itself particularly vulnerable. Though the event was created, and the fear cynically manipulated, the reaction to 9/11 is a good example. I treated that issue in my novel, Golem Song. The Golem — a central Jewish myth — was a huge clay figure built and given life by a 16th century magician/rabbi to protect the Jewish community in Prague from a likely pogrom. Unlike Frankenstein’s creature, the Golem was built not to understand better the mystery of life, but entirely for protective, potentially punitive purposes. But like the creature, the Golem got out of hand, destroying that not meant to be destroyed. “Golemism,” I call it. I see Golemism as the global marker of our times, hyperprotection leading to hyperdestruction.

RJ: My favorite character in the novel is the hapless Nicholas Pelletier — a man for whom everything he tries ends up badly. Although he is the man for whom the revolution was supposedly fought, he becomes the blade’s first victim. Is this end meant to be just a continuation of his bad luck or is there something deeper involved?

ME: Yes, he was the man for whom the revolution was supposedly fought, but 1) was he? And 2) what else was he?

Remember that except for the year of the Terror, the French Revolution was a bourgeoise one, led primarily by lawyers and rich merchants with the striking assistance of the progressive nobility. They were fighting not for Pelletier, but to wrest power away from the nobility and the clergy. In theory, the revolution declared “the rights of man”, but it was for bourgeois man those rights were proclaimed. Some idealists (Robespierre among them!) kept the Pelletiers in mind as they made their lengthy, highly educated speeches. Some, of course, like Marat, were all about the poor, but Marat and the Père Duchêne were rabble-rousers, and the philosophers of the Enlightenment were not about rousing rabble, but rousing consciousness. Liberty, as here and now, had its limits, equality was hardly reachable, except in theory, and fraternity had its mentally gated communities. The Masonic lodges came closest to a mixing of social levels, but one can scarcely imagine a Pelletier at a Masonic lodge.

No, Pelletier slipped into being a mauvais pauvre — part of pre-industrial class of society that was beneath consideration, beyond repair, and only to be controlled by an ever-expanding police apparatus. He began as a peasant, like most of his countrymen. But consecutive years of drought and freeze destroyed much of France’s agricultural economy, and there was no government help available because the national treasury had been looted to pay for foreign wars (most notably our own revolution, a proxy war against the real enemy, England.) Where have we heard this before? Just as Obama’s rescue packages robs the poor to enrich the rich, so did the realities of the Revolution leave the Pelletiers behind.

I like the little scene where an enlightened doctor offers him the opportunity to transform from a despised criminal to a hero of science by making his detached head wink on signal. I made up this incident up, but it does reflect a grand controversy about whether there was consciousness after decapitation, and whether, therefore the humane rationale for decapitation was warranted. Note the attention to this kind of detail, while the larger question (again raised by Robespierre and only a few others in the National Assembly) of capital punishment went by the boards. Like many things today, national health care, for instance, or stopping the wars, it was considered “not politically feasible.”

RJ: While reading the novel I found myself thinking about the nature of religious faith versus the nature of scientific thought–arguably one of the battles being fought at an intellectual level during the period the novel takes place. This conflict has a revived significance in today’s world what with the rise of religious fundamentalism from Afghanistan to Topeka, Kansas. Yet, underneath the apparent rationality of science there also seems to be an element of irrational belief required for one to take the next step and accept science’s logic. Your first book Insect Dreams touched on this in its portrayal of the scientists working on the Manhattan Project. Care to comment?

ME: One of the most striking things I discovered while filling in my knowledge of the French Revolution was the central role of the Civil Constitution of the Clergy in creating a counter-revolutionary backlash, especially in the western rural areas of Brittany and the Vendée. Those impassioned movements affected my choice of origin for Pelletier and his wife, and infused much of the internal conflict of the curé Pierre Grenier, the only completely invented character. His role in the novel is to illustrate precisely the anguished interactions of faith, doubt, science, revolutionary fervor, and the human heart.

Having been trained as a scientist myself, I both admire its finesse, and loathe its dismissal of the larger, if cloudier, dimensions of the lived world. The chapter, “Death by a Thousand Cuts” in Insect Dreams was my indictment of that limited world view, certainly faith-based, that science is the definitive guide to reality, and arbiter of right action. The scientists of the Manhattan Project, faced with the collapse of their raison d’être, refused to stop before testing their bomb on human beings.

This conflict, this pattern, supplies one of the continuing themes of many of my novels — the Faustian bargain: desire for knowledge and “progress” without considering the cost and consequences. Guillotin’s story is an archetype of this, our ongoing, hubristic, human tragedy.

RJ: Ah yes… the Faustian bargain. I think we’ve all made a few–at least at a personal level–to get a job or maintain a relationship. However, the ones I’m more interested in are those that we make in the political/economic realm as a people. Last November’s election appears to me as a Faustian bargain of this type. Hell, every election is a Faustian bargain of a sort. Anyhow, back to the more general one we make as residents of the United States — we know what our government, its military and the corporate/financial monoliths do to maintain our standard of living… and we support it, if only tacitly. Keeping Nicholas Pelletier in mind, one could argue that it is only the criminals and others — those that Bob Dylan called “the luckless, the abandoned an’ forsaked”–that do not make this bargain. But then, they probably make their own with Mephistopheles in another form. I guess my question is–can any human in our modern society avoid the Faustian deal?

ME: Faustian bargain:

Let’s make some distinctions because not every bargain is a Faustian bargain. The key dynamic in the Faustian bargain is a quest – for knowledge, or power, or the establishment of some ideal – with every attainment receiving some unexpected blowback, usually a just punishment.

I don’t think the US elections represent a Faustian bargain: we certainly don’t learn anything from them, nor do we get any power, nor do we further any ideal. Rather the opposite in each case. So I’m not even sure what “bargain” we, or Pelletier, or any of the forsaked have entered into, much less Faustian ones.

The dynamic there (here) seems to be pure submission to power and exploitation – which is largely the case with voters (excepting the power elite) in the US.

Given that understanding, I would put your question rather differently:

1. Can any human in our modern society get any kind of bargain at all – something symbiotically quid pro quo?

2. Can any human in our modern society find a Faustian bargain on the racks?

The first is a complex question, given the resources spent to create false consciousness. “If you protect me from terrorists, I will give up my civil liberties, and engage in torture.” I suppose that’s a bargain of sorts. Etc.

The second is also complex, though I suspect less so because the group under discussion is smaller. Who are the humans in modern society who are in a position to gain knowledge, power, or their ideals? The elite, who are usually less than knowledgeable about consequences, or worse, impervious to them. “I don’t really give a shit how many Indian farmers die, as long as my net worth goes up.” Well-funded scientists
often discover things, most often of use in keeping the power imbalance intact.

The Mephistophelian dimension to the Faustian Bargain indicates that what is at issue is supernatural power brought to bear on humans who can’t handle it. Given the secularization of modern society, I suppose we have to translate that into the dynamic between the “spiritual” innerworld, and the political/economic realm. Here, I think, bargains can be made, though given the economic/social cost of say, discovering that one should drop out of society, they may often lead to Faustian hell.

RJ: What about the bargains one makes when working for an employer like General Dynamics? Or the bargain one makes by reaping the benefits of that corporation being in the tax base? Or the bargain one makes to have a nice car and pretty skin? The quests involved may be pecuniary and venal, but they are quests.

ME: I think those are “bargains” similar to “I’ll trade my civil liberties (and morality) for your protection.” Bargains in quotes, but not Faustian ones.

RJ: Until next time. Onward.

Are you really in the bottom 98% if you make under a million, Papi?

— the author’s son

If you’re not into a redistribution of wealth in the U.S., that’s okay. You should read this anyway. If you’re not against U.S. wars overseas or torture, that’s okay. You should read this anyway. Why? In short, because Ban Ki-moon, a relatively conservative Secretary General for the U.N., has asserted that if the world’s nations don’t come to an unprecedented agreement on the environment at Copenhagen this December “it’s all over.” As in end of the world as we know it. And since I can guarantee you that the gathering in Denmark will NOT produce what’s necessary in time, this article — assuming that Ban Ki-moon is “off” by a couple of years respecting deadline — just might provide salvation of a sort.

The proposal below, Plan 98, tries to address multiple issues, but whether or not we embrace this or that particular issue together, you can count on this piece being worth the heartbeats to read because at heart it tries to motivate you — us all — to stop our ecocidal momentum. You’ll pick up on that pulse in the piece if you stick with it to the end. From there you can tweak things as you will, rejecting this, running with that.

There are a number of organizations/citizens who stand to benefit enormously by my proposal below. They include anti-war activists, health care advocates, supporters of immigrants, animal rights people, human rights groups, environmentalists of all (or most) stripes, feminists, sweatshop protesters, ALL groups concerned with the welfare of children, living wage fighters, prison reformers, union members, socially-conscious entrepreneurs, organic farmers, overburdened parents, disgruntled educators, writers, opponents of police brutality, artists, those who hate Monsanto unconditionally, and many others. Many, many others.

If readers can’t immediately connect the dots between Plan 98 and the above, I’ll be happy to go over the synapses.

As per the superrich and wealth and income distribution in America (The figures are worse today!), I recommend that the top 2% of the country’s population (holding almost all of the nation’s “financial wealth”) be forced to release a small portion of their fluid reserves immediately so that the lower 98% of our population benefits at once. The powers that be held emergency sessions to make sure that this and that financial institution did not fail, as they say. They can (They really can!) do the same thing for the purpose of — virtually overnight — ensuring that the bottom 80% of the U.S.. population goes from sharing only 7% of the country’s financial wealth to holding… double that!* Citizens who are in the top 20% at present (in terms of financial wealth) but NOT in the top 2% will also gain somewhat, though not as much.

*Not so that consumerism can be increased. Rents could be paid, mortgages. A tooth pulled.. Sight restored. Funerals financed. That sort of thing. Okay, maybe the purchase of one harmonica. [You don't want to lose your sense of humor here.]

How we will determine who falls into what category — all the devilish details — can be worked out easily enough. Enough with anal-retentive game plans, sphincter tight ordering! The first fun, (loose) order of business is to see who’s on board with what can easily be labeled (and dismissed prematurely) as a socialist idea. [Never mind that many of our major (destructive) corporations and the Pentagon, among other elements in society, are subsidized (and have been for quite a long time) very socialist-like.] With Plan 98 we’re focusing on benefiting the vast majority of our population, but NOT to the same over-the-top degree as corrupt corporations et al. have profited along (hidden) “socialist” lines.

PLEASE don’t worry about some underprivileged person getting something for nothing on occasion. The top 2% that we’re targeting get away with way more — Like murder and unprecedented theft! — on a regular basis, at more of a cost to society than the poor of this nation could possibly drain from our common coffers if they worked at exactly that 24×8.

No immigrant, Mexican or any other, could possibly be as illegal in this country as the U.S. abominations abroad are illegal. And there is no standard by which any immigrant presence in this country can count as remotely comparable to our immoral atrocities conducted abroad. Not just in terms of the wantonly horrific, unnecessary military aggression, but — also — with regard to our dumping of toxic waste into the environments of other nations via routine Pentagon practice.

Like Green Day asks: Do you know your enemy?

The U.S. military is arguably the single greatest polluter on earth. So cutting out what we’re doing in Columbia, what we’re trying to pull off in Africa, what we intend to do further in Afghanistan and Iraq and Pakistan and Iran… well, that would go a long way toward making this a better world. Increasing safety to boot.

The lifestyle of the Super Rich — the upper 2% — is killing the earth. I’m sure I don’t have to delineate how they’re contributing, to what enormous extent. Our wars, war-related prep/experimentation, and Pentagon indiscretions are doing their number on the planet too… and keep the vast majority of the country — unnecessarily — without necessities.

If you can rise above the self-serving fears those two have inculcated in you (through our educational system, media fare, etc.), and come up with your own definition of what being patriotic is, or what life is all about… then perhaps you’ll want to embrace Plan 98.

Now here’s where we get practical, hands on. Here’s where you go to work… beyond what’s your work*… without your present work suffering.

*Even if 50% of the country were doing “good work” individually, it wouldn’t be enough. Something must be done on a large scale in solidarity. And with that 5% or 10% would be enough… if a lot of them were from California.

If you help us to put TOSCA’S twelve unaffiliated, non-politician citizens into the Governor of California’s office (so that they can serve together on an equal basis¹ ) in 2010, I promise you that we’ll take our best shot at dismantling/undermining the electoral system as it stands, our ecocidal environmental momentum as it moves, and abominable U.S. practices on all fronts.

Things are clearly getting worse daily. The only chance we have, I believe, is for everyone to get behind helping us to put a dozen radical citizens into the Sacred Seat in Sacramento, California for the purpose of helping the public to self-educate about the need for a revolution.

It won’t work?

That’s what they always say. But, then, right now there’s 98% (of others) who just might get it. So that it could be made — forced — to work. A 2% California solution giving them time/urging them to get on board too… to see what might happen, could happen.

In spite of the hypnosis going on, I like the disgruntled odds. And I LOVE the potential payoff.

1. In lieu of a single self-serving careerist (once again).

But two key words seem to have survived the attrition and withstood the test of time: imperialism and financialism.¹

Talk of imperialism and financialism – and particularly of the nexus between them – remains as catchy as ever. Marxists of different colours – from classical, to neo to post – find the two terms expedient, if not indispensable. Radical anarchists, conservative Stalinists and distinguished academics of various denominations all continue to use and debate them.

The views of course differ greatly, but there is a common thread: for most Marxists, imperialism and financialism are prime causes of our worldly ills. Their nexus is said to explain capitalist development and underdevelopment; it underlies capitalist power and contradictions; and it drives capitalist globalization, its regional realignment and local dynamics. It is a fit-all logo for street demonstrators and a generic battle cry for armchair analysts.

The secret behind this staying power is flexibility. Over the years, the concepts of imperialism and financialism have changed more or less beyond recognition, as a result of which the link between them nowadays connotes something totally different from what it meant a century ago.

The purpose of this article is to outline this chameleon-like transformation, to assess what is left of the nexus and to ask whether this nexus is still worth keeping.

Empire and Finance

The twin notions of imperialism and financialism emerged at the turn of the twentieth century. The backdrop is familiar enough. During the latter part of the nineteenth century, the leading European powers were busy taking over large tracts of non-capitalist territory around the world. At the same time, their own political economies were being fundamentally transformed. Since the two developments unfolded hand in hand, it was only natural for theorists to ask whether they were related – and if so, how and why.

The most influential explanation came from a British left liberal, John Hobson, whose work on the subject was later extended and modified by Marxists such as Rosa Luxemburg, Rudolf Hilferding, Vladimir Lenin and Karl Kautsky, among others.²

Framed in a nutshell, the basic argument rested on the belief that capitalism had changed: originally ‘industrial’ and ‘competitive’, the system had become ‘financial’ and ‘monopolistic’.

This transformation, said the theorists, had two crucial effects. First, the process of monopolization and the centralization of capital in the hands of the large financiers made the distribution of income far more unequal, and that greater inequality restricted the purchasing power of workers relative to the productive potential of the system. As a result of this imbalance, there emerged the spectre of ‘surplus capital’, excess funds that could not be invested profitably in the home market. And since this ‘surplus capital’ could not be disposed of domestically, it forced capitalists to look for foreign outlets, particularly in pristine, pre-capitalist regions.

Second, the centralization of capital altered the political landscape. Instead of the night-watchman government of the laissez-faire epoch, there emerged a strong, active state. The laissez-faire capitalists of the earlier era saw little reason to share their profits with the state and therefore glorified the frugality of a small central administration and minimal taxation. But the new state was no longer run by hands-off liberals. Instead, it was dominated and manipulated by an aggressive oligarchy of ‘finance capital’ – a coalition of large bankers, leading industrialists, war mongers and speculators who needed a strong state that would crack down on domestic opposition and embark on foreign military adventures.

And so emerged the nexus between imperialism and financialism. The concentrated financialized economy, went the argument, requires pre-capitalist colonies where surplus capital can be invested profitably; and the cabal of finance capital, now in the political driver’s seat, is able to push the state into an international imperialist struggle to obtain those colonies.

At the time, this thesis was not only totally new and highly sophisticated; it also fit closely with the unfolding of events. It gave an elegant explanation for the imperial bellicosity of the late nineteenth century, and it neatly accounted for the circumstances leading to the great imperial conflict of the first ‘World War’. There were of course other explanations for that war – from realist/statist, to liberal, to geopolitical, to psychological.³ But for most intellectuals, these alternative explications seemed too partial or instrumental compared to the sweeping inevitability offered by the nexus of empire and finance.

History, though, kept changing, and soon enough both the theory and its basic concepts had to be altered.

Monopoly Capital

The end of the Second World War brought three major transformations. First, the nature of international conflict changed completely. Instead of a violent inter-capitalist struggle, there emerged a Cold War between the former imperial powers on the one hand and the (very imperial) Soviet bloc on the other (with plenty of hot proxy conflicts flaring up in the outlying areas). Second, the relationship between core and periphery was radically altered. Outright conquest and territorial imperialism gave way to decolonization, while tax-collecting navies were replaced by the more sophisticated tools of foreign aid and foreign direct investment (FDI). Third and finally, the political economies of the core countries themselves were reorganized. Instead of the volatile laissez-faire regime, there arose a large welfare-warfare state whose ‘interventionist’ ideologies and counter-cyclical policies managed to reduce instability and boost domestic growth.

On the face of it, this new constellation made talk of finance-driven imperialism seem outdated if not totally irrelevant. But the theorists didn’t give up the nexus. Instead, they gave it a new meaning.

The revised link was articulated most fully by the Monopoly Capital School associated with the New York journal Monthly Review.⁴ Capitalism, argued the writers of this school, remains haunted by a lack of profitable investment outlets. And that problem, along with its solution, can no longer be explained in classical Marxist terms.

The shift from competition to oligopoly that began in the late nineteenth century, these writers claimed, was now complete. And that shift meant that Marx’s ‘labour theory of value’ and his notion of ‘surplus value’ had become more or less irrelevant to capitalist pricing.

In the brave new world of oligopolies, the emphasis on non-price competition speeds up the pace of technical change and efficiency gains, making commodities cheaper and cheaper to produce. But unlike in a competitive system, these rapid cost reductions do not translate into falling prices. The prevalence of oligopolies creates a built-in inflationary bias which, despite falling costs, makes prices move up and sometimes sideways, but rarely if ever down.

This growing divergence between falling costs and rising prices increases the income share of capitalists, and that increase reverses the underlying course of capitalism. Marx believed that the combination of ever-growing mechanization and ruthless competition creates a ‘tendency of the rate of profit to fall’. But the substitution of monopoly capitalism for free competition inverts the trajectory. The new system is ruled by an opposite ‘tendency of the surplus to rise’.

The early theorists of imperialism, although using a different vocabulary, understood the gist of this transformation. And even though they did not provide a full theory to explain it, they realized that the consequence of that transformation was to shift the problem of capitalism from production to circulation (or in later Keynesian parlance, from ‘aggregate supply’ to ‘aggregate demand’). The new capitalism, they pointed out, suffered not from insufficient surplus, but from too much surplus, and its key challenge now was how to ‘offset’ and ‘absorb’ this ever-growing excess so that accumulation could keep going instead of coming to a halt.

That much was already understood at the turn of the twentieth century. But this is where the similarity between the early theorists of imperialism and the new analysts of Monopoly Capital ends.

Black Hole: The Role of Institutionalized Waste

Until the early twentieth century, it seemed that the only way to offset the growing excess was productive and external: the surplus of goods and capital had to be exported to and invested in pre-capitalist colonies. But as it turned out, there was another solution, one that the early theorists hadn’t foreseen and that the analysts of Monopoly Capital now emphasized. The surplus could also be disposed off unproductively and internally: it could be wasted at home.

For the theorists of Monopoly Capital, ‘waste’ denoted expenditures that are necessary neither for producing the surplus nor for reproducing the population, and that are, in that sense, totally unproductive and therefore wasteful. These expenditures absorb existing surplus without ever creating any new surplus, and this double feature enables them to mitigate without ever aggravating the ‘tendency of the surplus to rise’.

The absorptive role of wasteful spending wasn’t entirely new, having already been identified at the turn of the twentieth century by Thorstein Veblen.⁵ But it was only after the Second Word War, with the entrenchment of the Fordist model of mass production and consumption and the parallel rise of the welfare-warfare state, that the process was fully and conscientiously institutionalized as a salient feature of monopoly capitalism.

By the end of the war, the U.S. ruling class grew fearful that demobilization would trigger another severe depression; and having accepted and internalized the stimulating role of large-scale government spending, it supported the creation of a new ‘Keynesian Coalition’ that brought together the interests of big business, the large labour unions and various state agencies. The hallmark of this coalition was immortalized in a secret U.S. National Security Council document (NSC-62), whose writers explicitly called on the government to use high military spending as a way of securing the internal stability of U.S. capitalism.⁶

According to its theorists, monopoly capitalism gave rise to many forms of institutionalized waste – including a bloated sales effort, the creation of new ‘desires’ for useless goods and services and the acceleration of product obsolescence, among other strategies. But the two most significant types of waste were spending on the military and on the financial sector.

The importance of these latter expenditures, went the argument, lies in their seemingly limitless size. The magnitude of military expenditures has no obvious ceiling: it depends solely on the ability of the ruling class to justify the expenditures on grounds of national security. Similarly with the size of the financial sector: its magnitude expands with the potentially limitless inflation of credit. This convenient expandability turns military spending and financial intermediation into a giant ‘black hole’ (our term): they suck in large chunks of the excess surplus without ever generating any excess surplus of their own.⁷

Now, on the face of it, the efficacy of this domestic black hole should have made imperialism less necessary if not wholly redundant. According to the theorists of Monopoly Capital, though, this would be the wrong conclusion to draw. It is certainly true that, unlike the old imperial system, monopoly capitalism no longer needs colonies. But the absence of formal colonies is largely a matter of appearance. Remove this appearance and you’ll see the imperial impulse pretty much intact: the core continues to exploit, dominate and violate the periphery for its own capitalist ends.⁸

Spearheaded by U.S.-based multinationals and no longer hindered by inter-capitalist wars, argued the theorists, the new order of monopoly capitalism has become increasingly global and ever more integrated. And this global integration, they continued, has come to depend on an international division of labour, free access to strategic raw materials and political regimes that are ideologically open for business. However, these conditions do not develop automatically and peacefully. They have to be actively promoted and enforced – often against stiff domestic opposition – and they have to be safeguarded against external threats (the Soviet bloc before its collapse, Islamic fundamentalism and rogue states since then, etc.). And because such promotion and enforcement hinge on the threat and frequent use of violence, there is an obvious justification if not outright need for a large, well-equipped army sustained by large military budgets.

In this context, military spending comes to serve a dual role: together with the financial sector and other forms of waste, it propels the accumulation of capital by black-holing a large chunk of the economic surplus; and it helps secure a more sophisticated and effective neo-imperial order that no longer needs colonial territories but is every bit as expansionary, exploitative and violent as its crude imperial predecessor.

Dependency

The notion of neo-imperialism boosted and gave credence to a subsidiary theory of dependency.⁹ This support was somewhat paradoxical, since the lineage between the two theories was weak if not contradictory. Recall that, by emphasizing the role of domestic waste, the theory of Monopoly Capital served to deemphasize if not totally negate the absorptive importance of the periphery. But the analysts of dependency put their own emphasis elsewhere. The persistence of (neo) imperialism, they claimed, showed that, regardless of its own internal dynamics, the core still needs to keep the periphery chronically subjugated and underdeveloped.

This dependency, went the argument, is the outcome of five hundred years of colonial destruction. During that period, the imperial powers systematically undermined the socio-economic fabric of the periphery, making it totally dependent on the core. In this way, when decolonization finally started, the periphery found itself unable to take off while the capitalist core prospered. There was no longer any need for core states to openly colonize and export capital to the periphery. Using their disproportionate economic and state power, the former imperialist countries were now able to hold the postcolonial periphery in a state of debilitating economic monoculture, political submissiveness and cultural backwardness – and, wherever they could, to impose on it a system of unequal exchange.

Unequal exchange can take different forms. It may involve a wage gap between the ‘less exploited’ labour aristocracy of the core and the ‘more exploited’ simple labour of the periphery. Or the core can compel the periphery to buy its exports at ‘high’ prices (relative to their ‘true’ value), while importing the periphery’s products at ‘low’ prices (relative to their ‘true’ value). As a result of this latter difference, the terms of trade get ‘distorted’, surplus is constantly siphoned into the core (rather than exported from or domestically absorbed by the core), and the eviscerated periphery remains chronically underdeveloped.¹⁰

This logic of dependent underdevelopment was first articulated during the 1950s and 1960s as an antidote to the liberal modernization thesis and its Rostowian promise of an imminent takeoff.¹¹ And at the time, that antidote certainly seemed to be in line with the chronic stagnation of peripheral countries.

But what started as a partial theory soon expanded into a sweeping history of world capitalism. According to this broader narrative, capitalism was and remained imperial from the word go: it didn’t simply start with conquest; it started because of conquest. Its very inception was predicated on geographical exploitation and domination – a process in which the financial-commercial metropolis (say England) used the surplus extracted from a productive periphery (say India) to kick-start its own economic growth. And once started, the only way for this growth to be sustained is for the metropolis to continue to eviscerate the periphery around it. The development of the emperor depends on and necessitates the underdevelopment of its subjects.

The next theoretical step was to fit this template into an even broader concept of a World System – an all-encompassing global approach that seeks to map the hierarchical political relationships, division of labour and flow of commodities and surplus between the peripheral countries at the bottom, the semi-peripheral satellites in the middle and the financial core at the apex. From the viewpoint of this larger retrofit, capitalism is no longer the outcome of a specific class struggle, a conflict that developed in Western Europe during the twilight of feudalism and later spread to and reproduced itself in the rest of the world. Instead, capitalism – to the extent that this term can still be meaningfully used – is merely the outer appearance of Europe’s imperial expedition to rob and loot the rest of the world.

This view reflected a fundamental change in emphasis. Whereas earlier Marxist theorists of imperialism accentuated the centrality of exploitation in production, dependency and World System analysts shifted the focus to trade and unequal exchange. And while previous theories concentrated on the global class struggle, dependency and World System analyses spoke of a conflict between states and geographical regions. The new framework, although nominally ‘Marxist’ on the outside, has little Marxism left on the inside.¹²

And if we are to believe the postists who quickly jumped on the dependency bandwagon, there is nothing particularly surprising about this particular theoretical bent. After all, ‘history’ is no more than an ethno-cultural clash of civilizations, a never-ending cycle of imperial ‘hegemonies’ in which the winners (ego) impose their ‘culture’ on the losers (alter).¹³ To the naked eye, the totalizing capitalization of our contemporary world may seem like a unique historical process. But don’t be deceived. This apparent uniqueness is a flash in the pan. Deconstruct it and what you are left with is yet another imperial imposition – in this case, the imposition of a Euro-American ‘financialized discourse’ on the rest of the world.

Red Giant: An Empire Imploded

The dependency version of the nexus, though, didn’t hold for long, and in the 1970s the cards again got shuffled. The core stumbled into a multifaceted crisis: the United States suffered a humiliating defeat in Vietnam, stagflation decelerated and destabilized the major capitalist countries and political unrest seemed to undermine the legitimacy of the capitalist regime itself. In the meantime, the periphery confounded the theorists: on the one hand, import substitution, the prescribed antidote to dependency, pushed developing countries, primarily in Latin America, into a debt trap; on the other hand, the inverse policy of privatization and export promotion, implemented mostly in East Asia, triggered an apparent ‘economic miracle’. Taken together, these developments didn’t seem to sit well with the notion of Western financial imperialism. And so, once more the nexus had to be revised.

According to the new script, ‘financialization’ is no longer a panacea for the imperial power. In fact, it is prime evidence of imperial decline.

The reasoning here goes back to the basic Marxist distinction between ‘industrial’ activity on the one hand and ‘commercial’ and ‘financial’ activities on the other. The former activity is considered ‘productive’ in that it generates surplus value and leads to the accumulation of ‘actual’ capital. The latter activities, by contrast, are deemed ‘unproductive’; they don’t generate any new surplus value and therefore, in and of themselves, do not create any ‘actual’ capital.

This distinction – which most Marxists accept as sacrosanct – has important implications for the nexus of imperialism and financialism. It is true, say the advocates of the new script, that finance (along with other forms of waste) helps the imperial core absorb its rising surplus – and in so doing prevents stagnation and keeps accumulation going. But there is a price to pay. The addiction to financial waste ends up consuming the very fuel that sustains the core’s imperial position: it hollows out the core’s industrial sector, it undermines its productive vitality, and, eventually, it limits its military capabilities. The financial sector itself continues to expand absolutely and relatively, but this is the expansion of a ‘red giant’ (our term) – the final inflation of a star ready to implode.

The process leading to this implosion is emphasized by theories of hegemonic transition.¹⁴ The analyses here come in different versions, but they all seem to agree on the same basic template. According to this template, the maturation of a hegemonic power – be it Holland in the seventeenth century, Britain in the nineteenth century or the United States presently – coincides with the ‘over-accumulation’ of capital (i.e. the absence of sufficiently profitable investment outlets). This over-accumulation – along with growing international rivalries, challenges and conflicts – triggers a system-wide financial expansion, marked by soaring capital flows, a rise in market speculation and a general inflation of debt and equity values. The financial expansion itself is led by the hegemonic state in an attempt to arrest its own decline, but the reprieve it offers can only be temporary. Relying on finance drains the core of its energy, causes productive investment to flow elsewhere and eventually sets in motion the imminent process of hegemonic transition.

Although the narrative here is universal, its inspiration is clearly drawn from the apparent ‘financialized decline’ of U.S. hegemony. Since the 1970s, many argue, the country has been ‘depleted’: it has grown overburdened by military spending; it has gotten itself entangled in unwinnable armed conflicts, and it has witnessed its industrial-productive base sucked dry by a Wall Street-Washington Complex that prospers on the back of rising debt and bloated financial intermediation.¹⁵

In order to compensate for its growing weakness, these observers continue, the United States has imposed its own model of ‘financialization’ on the rest of the world, hoping to scoop the resulting expansion of liquidity. Some states have been compelled to replicate the model in their own countries, others states have been tempted to finance it by buying U.S. assets, and pretty much all states have been pulled into an unprecedented global whirlpool of capital flow.

The spread of ‘financialization’, though, has only been party successful. For a while, the United States benefited from being able to control, manipulate and leverage this expansion for its own ends. But in the opinion of many, the growing severity of recent financial, economic and military crises suggests that this ability has been greatly reduced and that U.S. hegemony is now coming to an end.

Capital Flow and Transnational Ownership

The highly publicized nature of these imperial misgivings makes this latest version of the nexus seems persuasive. But when we look more closely at the facts, the theoretical surface no longer seems smooth; and as we get even closer to the evidence, cracks begin to appear.

Start with the cross-border flow of capital, the international manifestation of ‘financialization’. This process is often misunderstood, even by high theorists, so a brief clarification is in order. Contrary to popular belief, the flow of capital is financial, and only financial. It consists of legal transactions, whereby investors in one country buy or sell assets in another – and that is it. There is no flow of material or immaterial resources, productive or otherwise. The only things that move are ownership titles.¹⁶

These changes in ownership, of course, are of great importance. If the flow of capital is large enough, the stock of foreign owned assets will grow relative to domestically owned assets. And as the ratio rises, the ownership of capital becomes increasingly transnational.

The history of this process, from 1870 to the present, is sketched in Figure 1, where we plot the total value of all foreign assets as a percent of global GDP (both denominated in dollars). The underling numbers, admittedly, are not very accurate. The raw data on foreign ownership are scarce; often they are of questionable quality; rarely if ever are they available on a consistent basis; and almost always they require painstaking research to collate and heroic assumptions to calibrate. There are also huge problems in estimating global GDP, particularly for earlier periods. But even if we take these severe limitations into consideration, the overall picture seems fairly unambiguous.¹⁷

The figure shows three clear periods: 1870-1900, 1900-1960 and 1960-2003. The late nineteenth century, marked by the imperial expansion of ‘finance capital’, saw the ratio of global foreign assets to global GDP more than double – from 7% in 1870 to 19% in 1900. This upswing was reversed during the first half of the twentieth century. The mayhem created by two world wars and the Great Depression on the one hand and the emergence of domestic ‘institutionalized waste’ on the other undermined the flow of capital and caused the share of foreign ownership to recede. By 1945, with the onset of decolonization under U.S. ‘hegemony’ and the beginning of the Cold War, the ratio of foreign assets to global GDP hit a record low of 5%. This was the nadir. The next half century brought a massive reversal. In the early 1980s, when Ronald Reagan and Margaret Thatcher announced the beginning of neoliberalism, the ratio of foreign assets to GDP was already higher than in 1900; and, by 2003, after a quarter century of exponential growth, it reached an all time high of 122%.

This final number represents a significant level of transnational ownership. According to recent research by the McKinsey Global Institute, between 1990 and 2006 the global proportion of foreign-owned assets has nearly tripled, from 9% to 26% of all world assets (both foreign and domestically-owned). The increase was broadly based: foreign ownership of corporate bonds rose from 7% to 21% of the world total, foreign ownership of government bonds rose from 11% to 31% and foreign ownership of corporate stocks rose from 9% to 27%.¹⁸

The next step is to break the aggregate front and examine the distribution of ownership. This is what we do in Figure 2, which compares the foreign asset shares of British and U.S. owners from 1825 to the present. The chart shows two important differences between the earlier era of ‘classical imperialism’ dominated by Britain and the more recent ‘neo-imperial’ period led by the United States.

First, there is the pattern of decline. British owners saw their share of global assets fall from the mid-nineteenth century onward, but until the end of the century their primacy remained intact. The real challenge came only in the twentieth century, when capital flow decelerated sharply and foreign asset positions were unwound; and it was only in the interwar period, when foreign investment gave way to capital flight, that the share of British owners fell below 50%.

The U.S. experience was very different. U.S. owners achieved their primacy right after the Second World War, when capital flow had already been reduced to a trickle – and that position was undermined the moment capital flow started to pick up. In 1980, when U.S. ‘financialization’ started in earnest, U.S. owners accounted for only 28% of global foreign assets. And by 2003, when record capital flow and the U.S. invasion of Afghanistan and Iraq prompted many Marxists to pronounce the dawn of an ‘American Empire’, the asset share of U.S. owners was reduced to a mere 18%.

Second, there is the identity of the leading owners. In the previous transition, power shifted from owners in one core country (Britain) to those in another (the United States). By contrast, in the current transition (assuming one indeed is underway) the contenders are often from the periphery. In recent years, owners from China, OPEC, Russia, Brazil, Korea and India, among others, have become major foreign investors with significant international positions – including large stakes in America’s ‘imperial’ debt.

Does this shift of foreign ownership represent the rising hegemony of countries such as China – or is what we are witnessing here yet another mutation of imperialism? Perhaps, as some observers seem to imply, we’ve entered a (neo) neo-imperial order in which the ‘Empire’ actually boosts its power by selling off its assets to the periphery?

The Global Distribution of Profit

Surprising as it may sound, such a sell-off is not inconsistent with the basic theory of hegemonic transition. To reiterate, according to this theory, hegemonic transitions are always marked by a financial explosion which is triggered, led and leveraged by the core in a vain attempt to arrest its imminent decline. Supposedly, this explosion enables the hegemonic power to amplify its financial supremacy in order to (temporarily) retain its core status and power. And if retaining that power requires the devolution of foreign assets and the sell-off of domestic ones, so be it.

The question is how to assess this power. How do we know whether the core’s attempt to leverage global ‘financialization’ is actually working? Is there a meaningful benchmark for power, and how should this benchmark be used and understood?

Unfortunately, most theorists of hegemonic transitions tend to avoid the nitty gritty data, so it’s often unclear how they themselves gauge the shifting trajectories of global power. But given the hyper-capitalist nature of our epoch, it seems pretty safe to begin with the bottom line: net profit.

Net profit is the pivotal magnitude in capitalism. It determines the health of corporations, it tells investors how to capitalize assets, it sets limits on what government officials feel they can and cannot do. It is the ultimate yardstick of capitalist power, the category that subjugates the social individual and makes the whole system tick. It is the one magnitude than no researcher of capitalism can afford to ignore.

With this obvious rationale in mind, consider Figure 3, which traces the distribution of global net profit earned by publicly-traded corporations. The chart, covering the period from 1974 to the present, shows three profit series, each denoting the profit share of a distinct corporate aggregate: (1) firms listed in the United States; (2) firms listed in developed markets excluding the United States; and (3) firms listed in the rest of the world – i.e., in ‘emerging markets’.

The data demonstrate a sharp reversal of fortune. Until the mid-1980s, U.S.-listed firms dominated: they scooped roughly 60% of all net profits, leaving firms listed in other developed markets 35% of the total and those listed in ‘emerging market’ less than 5%.

But then the tables turned. During the second half of the 1980s, the net profit share of U.S.-listed firms plummeted, falling to 36% in less than a decade. The 1990s seemed to have stabilized the decline, but in the early 2000s the downward drift resumed. By the end of the decade, U.S. firms saw their net profit fall to 29% of the world total.

The other two aggregates moved in the opposite direction. By 2009, the profits of firms listed in developed countries other than the U.S. reached 53% of the total, while the share of ‘emerging market’ firms quadrupled to 18%.

These numbers, of course, should be interpreted with care. First, note that our profit data here cover only publicly traded firms; they don’t include unlisted, private firms. This fact means that variations in profit shares reflect two very different processes: (1) changes in the amount of profit earned by listed firms, and (2) the pace of listing and delisting of firms. The latter factor became important during the late 1980s and 1990s, when Europe and the ‘emerging markets’ saw their stock market listings swell with many private corporations going public – this at a time when the number of listed firms in the United States remained flat.

Second, the location of a firm’s listing says nothing about its operations and owners. Many firms whose shares are traded in the financial centres of the United States and Europe in fact operate elsewhere. And then there is the issue of ultimate ownership. Recall that currently one third of all global assets are owned by foreigners. This proportion is already large enough to make it difficult to determine the ‘nationality of capital’, and if it were to rise further the whole endeavour would become an exercise in futility.

The theoretical implications of these caveats have received little or no attention from students of hegemonic transitions, and their quantitative implications remain unclear. But even if we take the ‘nationality of capital’ at face value and consider the numbers in Figure 3 as accurate, it remains obvious that ‘financialization’ has not worked for the hegemonic power: despite the alleged omnipotence of its Wall Street-Washington Complex, despite its control over key international organizations, despite having imposed neoliberalism on the rest of the world, and despite its seemingly limitless ability to borrow funds and suck in global liquidity – the bottom line is that the net profit share of U.S. listed corporations has kept falling and falling.

The Engine of ‘Financialization’

Now, in and of itself, the collapse of the U.S. profit share – much like the sell-off of U.S. assets – isn’t at odds with the theory of hegemonic transition. To repeat, this theory suggests that the hegemonic/imperial power, having been weakened by its prior financial excesses (among other ills), will kick-start, promote and sustain a system-wide process of ‘financialization’. According to the theory, the latent purpose is to leverage this process in order to slow down the hegemon’s own decline – but nowhere does the theory say that this ‘strategy’, whether conscious or not, has to succeed.

Presented in this way, the story sounds historically compelling, logically consistent and empirically convincing – but only if we can first establish one basic fact. We need to show that the global process of ‘financialization’ indeed has been led by the United States. This is the starting point. Only if U.S. ‘financialization’ preceded, was bigger than and propelled ‘financialization’ in the rest of the world can we speak of the U.S. leveraging this process for its own ends. And only then can we assess whether that leveraging succeeded or failed.

So let’s look at the evidence.

Concepts and Methods

The initial step in this sequence is to measure ‘financialization’. Conceptually, the task may seem simple. All we need to do is calculate the share of financial activity in overall economic activity and then trace the trajectory of the resulting ratio. When this ratio goes up, we can say that the economy is being ‘financialized’; when it comes down we would conclude that it is being ‘de-financialized’.

But that’s easier said than done.¹⁹

The basic difficulty is that capitalism is mediated through money, and that fact makes every mediated activity both ‘economic’ and ‘financial’ at the same time. As we have already seen, heterodox economists bypass the problem by defining ‘finance’ more narrowly to denote activities that merely shuffle money and credit without producing ‘real’ goods and services (and obviously without generating any surplus value and ‘actual capital’). Unfortunately, though, this yardstick isn’t very practical. In order to use it, the economist needs to know which activity is ‘productive’ and which is not; and yet, strange as it may sound, this is something that economists do not – and indeed cannot – know. Despite hundreds of years of theorizing and endless claims to the contrary, they remain unable to actually measure ‘productivity’. They cannot quantify the productivity of the CEO of a large bank – or of an auto mechanic for that matter. In fact, they don’t even have the units with which to measure such productivity.

The only thing they can do is to assume. Mainstream economists assume that productivity is ‘revealed’ by income, so if the CEO earns 1,000 times more than the mechanic, he must be 1,000 more productive. Marxists reject this arbitrary assumption; instead, they stipulate, also arbitrarily, that financiers are unproductive while mechanics are productive – although this claim still leaves them unsure of how to treat actual corporations, where ‘unproductive’ and ‘productive’ activities are always inextricably intertwined.

The net result is that we don’t have a clear theoretical definition for ‘finance’ and therefore no objective way to assess the extent of ‘financialization’.

But not all is lost.

We certainly can stick with conventions – and the convention, at least among capitalists and investors, is to treat ‘finance’ as synonymous with the FIRE sector; i.e., with firms whose primary activities involve financial intermediation (banking, trust funds, brokerages, etc.), insurance or real estate.

Based on this conventional (albeit theoretically loose) definition of finance, and given our specific concern here with capitalist power, it seems appropriate to proxy the extent and trajectory of ‘financialization’ by looking at the share of total net profit accounted for by FIRE corporations. The magnitude of this share would indicate the extent to which FIRE firms have been able to leverage ‘financialization’ for their own end, and the way this share changes over time would tell us whether their leverage has increased or decreased.

The Inconvenient Facts

This distributional measure of ‘financialization’ is depicted by the two series in Figure 4. The first series shows the net profit of FIRE corporations as a percent of the net profit of all U.S.-listed firms. The second series computes the same ratio for firms listed outside the United States.

And here we run into a little surprise.

According to the theory of hegemonic transition, the engine of ‘financialization’ is the United States. This is the black hole of the World System. It is the site where finance has been used most extensively to absorb the system’s surplus. It is the seat of the all-powerful Wall Street-Washington Complex. It is where neoliberal ideology first took command and from where it was later imposed with force and temptation on the rest of the world. It is the engine that led, pulled and pushed the entire process.

But the facts in Figure 4 seem to tell a different story. According to the chart, the United Sates has not been leading the process. If anything, it seems to have been ‘dragged’ into the process by the rest of the world. …

During the early 1970s, before the onset of systemic ‘financialization’, the U.S. FIRE sector accounted for 6% of the total net profit of U.S.-listed firms. At the time, the comparable figure for the rest of the world was 18% – three times as high! From then on, the United States was merely playing catch-up. Its pace of ‘financialization’ was faster than in the rest of the world; but with the sole exception of a brief period in the late 1990s, its level of ‘financialization’ was always lower. In other words, if we wish to stick with the theory of a finance-fuelled red giant that is slowly imploding as its peripheral liquidly runs out, we should apply that theory not to the United States, but to the rest of the world!

Indeed, even the most recent period of crisis seems at odds with the theory. According to the conventional creed, both left and right, the current crisis is payback for the sins of excessive ‘financialization’ and improper bubble blowing.²⁰ In this Galtonean theory, deviations and distortions always revert to mean, ensuring that the biggest sinners end up suffering the most. And since the U.S. FIRE sector was supposedly the main culprit, it was also the hardest hit.

The only problem is that, according to Figure 4, the U.S. wasn’t the main culprit. On the eve of the crisis, the extent of ‘financialization’ was greater in the rest of the world than in the U.S. And yet, although the world’s financiers committed the greater sin, it was their U.S. counterparts who paid the heftier price. The former saw their profit share decline mildly from 37% to 25% of the total, while the latter watched their own share crash from 32% to 10%.

The gods of finance must have their own sense of justice.

The End of a Nexus?

Of course, this isn’t the first time that a monkey wrench has been thrown into the wheels of the ever-changing nexus of imperialism and financialism. As we have seen, over the past century the nexus had to be repeatedly altered and transformed to match the changing reality. Its first incarnation explained the imperialist scramble for colonies to which finance capital could export its ‘excessive’ surplus. The next version talked of a neo-imperial world of monopoly capitalism where the core’s surplus is absorbed domestically, sucked into a ‘black hole’ of military spending and financial intermediation. The third script postulated a World System where surplus is imported from the dependent periphery into the financial core. And the most recent edition explains the hollowing out of the U.S. core, a ‘red giant’ that had already burned much of its own productive fuel and is now trying to ‘financialize’ the rest of the world in order to use the system’s external liquidity.

Yet, here, too, the facts refuse to cooperate: contrary to the theory, they suggest that U.S. ‘Empire’ has followed rather than led the global process of ‘financialization’ and that U.S. capitalists have been less dependent on finance than their peers elsewhere.

Of course, this inconvenient evidence could be dismissed as cursory – or, better still, neutralized by again adjusting the meaning of imperialism and financialism to fit the new reality. But maybe it’s time to stop the carousel and cease the repeated retrofits. Perhaps we need to admit that, after a century of transmutations, the nexus of imperialism and financialism has run its course, and that we need a new framework altogether.

1. The precise terms are rather loose and their use varies across theorists and over time. Imperialism, empire and colonialism are used interchangeably, as are finance, fictitious capital finance capital, financialization and financialism. Here we use imperialism and financialism simply because they rhyme.
2. John. A. Hobson, Imperialism: A Study (Ann Arbor: University of Michigan Press, 1902 [1965]); Rosa Luxemburg, The Accumulation of Capital, with an introduction by Joan Robinson, translated by A. Schwarzschild (New Haven: Yale University Press, 1913 [1951]); Rudolf Hilferding, Finance Capital: A Study of the Latest Phase of Capitalist Development, edited with an introduction by Tom Bottomore, from a translation by Morris Watnick and Sam Gordon (London: Routledge & Kegan Paul, 1910 [1981]); Vladimir I. Lenin, ‘Imperialism, The Highest State of Capitalism’, in Essential Works of Lenin. ‘What Is to Be Done?’ and Other Writings (New York: Dover Publications, Inc., 1917 [1987]), p. 177-270; Karl Kautsky, ‘Ultra-Imperialism’, New Left Review, 1970, No. 59 (Jan/Feb), p. 41-46 (original German version published in 1914).
3. See, for example, Joseph A. Schumpeter, Imperialism and Social Classes, with an introduction by Bert Hoselitz, translated by Heinz Norden (New York: Meridian Books, 1919; 1927 [1955]); Barbara Wertheim Tuchman, The Guns of August (New York: Macmillan, 1962) and The Proud Tower: A Portrait of the World Before the War, 1890-1914 (New York: Macmillan, 1966); and Paul M. Kennedy, The Rise and Fall of the Great Powers (New York: Random House, 1987), Ch. 5.
4. Some of the important contributions to this literature include Josef Steindl, Maturity and Stagnation in American Capitalism (New York: Monthly Review Press, 1952 [1976]); Shigeto Tsuru, ‘Has Capitalism Changed?’ in Has Capitalism Changed? An International Symposium on the Nature of Contemporary Capitalism, edited by S. Tsuru (Tokyo: Iwanami Shoten, 1956), p. 1-66. Paul A. Baran and Paul M. Sweezy, Monopoly Capital: An Essay on the American Economic and Social Order (New York: Modern Reader Paperbacks, 1966); and Harry Magdoff, The Age of Imperialism: The Economics of U.S. Foreign Policy, 1st Modern Reader ed. (New York: Monthly Review Press, 1969).
5. Veblen’s early analysis is articulated in The Theory of Business Enterprise (Clifton, New Jersey: Augustus M. Kelley, Reprints of Economics Classics, 1904 [1975]).
6. See U.S. National Security Council, NSC 68: United States Objectives and Programs for National Security. A Report to the President Pursuant to the President’s Directive of January 31, 1950. Top Secret (Washington DC, 1950); David A. Gold, ‘The Rise and Fall of the Keynesian Coalition’, Kapitalistate, 1977, Vol. 6, No. 1, p. 129-161; and Jonathan Nitzan and Shimshon Bichler, ‘Cheap Wars’, Tikkun, August 9, 2006.
7. Classical Marxists interpret the role of waste rather differently. In their account, wasteful spending withdraws surplus from the accumulation process; this withdrawal reduces the pace at which constant capital accumulates; and that reduction lessens the tendency of the rate of profit to fall. See for example Michael Kidron, Capitalism and Theory (London: Pluto Press, 1974).
8. Perhaps the clearest advocate of this argument was the late Harry Magdoff, a writer whose empirical and theoretical studies stand as a beacon of scientific research; for a summary, see his Imperialism Without Colonies (New York: Monthly Review Press, 2003). Similar claims (minus the research) are offered by Ellen Meiksins Wood, Empire of Capital (London and New York: Verso, 2003).
9. Some of the important texts here include Raúl Prebisch, The Economic Development of Latin America and its Principal Problems (New York: United Nations, 1950); Paul A. Baran, The Political Economy of Growth (New York and London: Modern Reader Paperbacks, 1957); Andre Gunder Frank, Capitalism and Underdevelopment in Latin America: Historical studies of Chile and Brazil (New York: Monthly Review Press, 1967); Arghiri Emmanuel, Unequal Exchange. A Study of the Imperialism of Trade (New York: Monthly Review Press, 1972); Eduardo H. Galeano, Open Veins of Latin America: Five Centuries of the Pillage of a Continent (New York: Monthly Review Press, 1973). Samir Amin, Accumulation on a World Scale: A Critique of the Theory of Underdevelopment. 2 vols. (New York: Monthly Review Press. 1974); Immanuel Maurice Wallerstein, The Modern World-System. Capitalist Agriculture and the Origins of the European World-Economy in the Sixteenth Century (New York: Academic Press, 1974) and The Modern World-System II: Mercantilism and the Consolidation of the European World-Economy, 1600-1750 (New York: Academic Press, 1980); and Fernando Henrique Cardoso and Enzo Faletto, Dependency and Development in Latin America (Berkeley: University of California Press, 1979).
10. The inverted commas in this paragraph highlight concepts that the theory of unequal exchange can neither define nor measure. Since nobody knows the correct value of labour power, it is impossible to determine the extent of ‘exploitation’ in the two regions. Similarly, since no one knows the ‘true’ value of commodities, there is no way to assess the extent to which export and import prices are ‘high’ or ‘low’. This latter ignorance makes it impossible to gauge the degree to which the terms of trade are ‘distorted’ and, indeed, in whose favour; and given that we don’t know the magnitude or even the direction of the ‘distortion’, it is impossible to tell whether surplus flows from the periphery to the core or vice versa, and how large the flow might be.
11. W.W. Rostow, The Stages of Economic Growth: A Non-Communist Manifesto (Cambridge, England: Cambridge University Press, 1960).
12. The question of what constitutes a ‘proper’ Marxist framework is highlighted in the debates over the transition from feudalism to capitalism. Important contributions to these debates are Maurice Dobb, Studies in the Development of Capitalism. London: Routledge & Kegan Paul Ltd., 1946. [1963]); Paul M. Sweezy ‘A Critique’, in The Transition from Feudalism to Capitalism, Introduction by Rodney Hilton, edited by R. Hilton (London: Verso, 1950 [1978]); Robert Brenner, ‘The Origins of Capitalist Development: A Critique of Neo-Smithian Marxism’, New Left Review, 1977, No. 104 (July-August), p. 25-92; and Robert Brenner, ‘Dobb on the Transition from Feudalism to Capitalism’, Cambridge Journal of Economics, 1978, Vol. 2, No. 2 (June), p. 121-140. For edited volumes on this issue, see Rodney Hilton, ed., The Transition from Feudalism to Capitalism, Introduction by Rodney Hilton (London: Verso, 1978); and T. H. Aston and C. H. E. Philpin, eds., The Brenner Debate: Agrarian Class Structure and Economic Development in Pre-Industrial Europe (Cambridge and New York: Cambridge University Press, 1985).
13. For a typical narrative, see John M. Hobson, The Eastern Origins of Western Civilisation. (Cambridge, UK and New York: Cambridge University Press. 2004).
14. See for example, Fernand Braudel, Civilization & Capitalism, 15th-18th Century, translated from the French and revised by Sian Reynolds, 3 vols. (New York: Harper & Row, Publishers, 1985); Immanuel Maurice Wallerstein, The Politics of the World-Economy: The States, the Movements, and the Civilizations (Cambridge, New York and Paris: Cambridge University Press and Editions de la Maison des sciences de l’homme, 1984); and Giovanni Arrighi, The Long Twentieth Century: Money, Power, and the Origins of Our Times. London: Verso, 1994.
15. For the ‘depletion thesis’, see for example Seymour Melman, Pentagon Capitalism: The Political Economy of War, 1st ed. (New York: McGraw-Hill, 1970) and The Permanent War Economy: American Capitalism in Decline (New York: Simon and Schuster, 1974). A broader historical application is given in Paul M. Kennedy, The Rise and Fall of the Great Powers (New York, NY: Random House: 1987).
16. The generalization here applies to portfolio as well as direct foreign investment. Both are financial transactions, pure and simple. The only difference between them is their relative size: typically, investments that account for less than 10% of the acquired property are considered portfolio, whereas larger investments are classified as direct. The flow of capital, whether portfolio or direct, may or may not be followed by the creation of new productive capacity. But the creation of such capacity, if and when it happens, is conceptually distinct, temporally separate and causally independent from the mere act of foreign investment.
17. The early data on foreign assets are incomplete in that they do not cover all countries (especially smaller ones). As a result, the measured ratio of foreign assets to global GDP in the earlier years of the chart may be somewhat understated (see Maurice Obstfeld and Alan. M. Taylor, Global Capital Markets: Integration, Crisis and Growth [Cambridge: Cambridge University Press, 2004], p. 51-57).
18. See Diana Farrell, Susan Lund, Christian Fölster, Raphael Bick, Moira Pierce, and Charles Atkins, Mapping Global Capital Markets. Fourth Annual Report (San Francisco: McKinsey Global Institute, January 2008), p. 73, Exhibit 3.10.
19. For a detailed analysis of the associated difficulties and impossibilities that we discuss here only in passing, see Jonathan Nitzan and Shimshon Bichler, Capital as Power: A Study of Order and Creorder (New York and London: Routledge, 2009), Chs. 6-8 and 10; and Shimshon Bichler and Jonathan Nitzan, ‘Contours of Crisis II: Fiction and Reality’, Dollars & Sense, April 28, 2009.
20. See Shimshon Bichler and Jonathan Nitzan, ‘Contours of Crisis: Plus ça change, plus c’est pareil?’ Dollars & Sense, December 29, 2008; and ‘Contours of Crisis II: Fiction and Reality’, Dollars & Sense, April 28, 2009.

We don’t know that the Knights of Labor created the first Labor Day in 1882 and that Congress made it a national holiday in 1894.

Almost none of us, including life-long union workers, know the personalities of the labor movement. About Mother Jones (1830-1930), the militant “angel of the coal fields” for more than six decades. About “Big Bill” Haywood (1869-1928) who organized the Industrial Workers of the World, a universal coalition to fight for the rights of all labor. About cigar-chomping Samuel Gompers (1850-1924), the first president of the American Federation of Labor, a job he held for 38 years.

We don’t know about Sidney Hillman (1887-1946) who led strikes in 1916 to reduce the work week to 48 hours, from the standard 54–60 hours, and then helped create the Amalgamated Clothing Workers of America and the Congress of Industrial Organizations (CIO) before becoming a major political force for workers during the labor-friendly Roosevelt administration. Missing from our collective knowledge is the life of Saul Alinsky (1909-1972), known as the “father of grassroots political campaigns” who worked alongside Cesar Chavez (1927-1993) who used Alinsky’s tactics to organize the United Farm Workers.

Most of us probably never heard about Eugene Debs (1855-1926), Joe Hill (1879-1915), and thousands of others who went to prison or were murdered defending the rights of the workers not only to organize, but to demand better working conditions. The names of Tompkins Square, Cripple Creek, Homestead, Lattimer, Lawrence, and dozens of other places where police forces massacred workers are unknown. We don’t know about the Avondale mine fire that killed 110, because of faulty construction of the colliery and a disregard for worker safety, or of the fire at the Triangle Shirtwaist factory, where 148 women, some as young as 12, working under brutal sweat-shop conditions, died because a fire door was chained. We won’t become involved in the struggle, risk our jobs and futures. That’s someone else’s responsibility. We’ll just follow inane rules and complain privately.

Most Americans, and certainly most journalists, don’t know the story of Horace Greeley, a social activist and the nation’s most prominent ante-bellum publisher, who created The New York Typographical Union for his typesetters and printers because he believed they needed representation. Most journalists also don’t know about Heywood Broun (1888-1939), one of the nation’s best-paid columnists who risked his own financial stability to create The Newspaper Guild in 1935 to help those reporters making one-hundredth of his salary. Most media don’t even have local stories about Labor Day, preferring to run nationally-distributed stories and not “waste” any of the few reporters they have left.

The national syndicates and wire services, plus a few socially-conscious newspapers, may make the effort to find a current labor leader who will say organized labor is having a tough time but is still strong and vital, the only recourse against poor working conditions and unfair labor practices. The stories will tell us that about 12.4 percent of all workers are in unions, down from a peak of 35 percent in 1954, but the reporters don’t dig into myriad ways of intimidation by Management, or of the professionals who mistakenly believe because they are professionals and not workers they don’t need unions.

The reporters may interview the workers. An elderly man’s remembrance of his life in the coal mines or breakers, and what Black Lung did not only to his own health but to his family and friends. They might chat with an elderly woman who worked 12-hour days six days a week for $3–$4 a day in the heat and humidity of a garment factory. They may talk with a few current workers who tell us the Recession has cut deep into their lives, but they work hard and are pleased that they still have a job.

Some stories may even dryly point out statistics—that the unemployment rate, according to the Bureau of Labor Statistics (BLS), is 9.7 percent, up from 4.8 percent when the Recession began in December 2007, that 14.9 million Americans are unemployed, up from 7.4 million. The stories might even note that 9.1 million Americans work part-time either because their hours and wages were “downsized” or because they couldn’t find full-time work. Another 2.3 million Americans are “marginally attached,” according to the BLS; these are unemployed Americans who aren’t listed as “unemployed” because they haven’t looked for work in four weeks; of these 2.3 million, about 760,000 are “discouraged”—their unemployment benefits have run out, they have tried to find work, but have given up.

Meanwhile, corporate executives are taking multi-million dollar bonuses for improving the “cash flow.” Even if executive management makes significant mistakes, and the “return on investment” isn’t what the Board of Directors expects, or the companies fail because of management incompetence and greed, almost all CEOs and their immediate underlings have the “golden parachute” that allows a soft drop from employment, yielding termination packages that amount to millions of dollars and considerable benefits and bonuses that no working class person will ever receive.

Business euphemistically claims because of “downsizing,” “rightsizing,” and “outsourcing,” mostly to foreign countries, the “bottom line” is improved; corporate investors are being “optimally compensated.” Since the recession began, more than a year before President George W. Bush left office, about 4.3 million Americans have been “downsized,” according to data compiled by Challenger, Gray and Christmas Inc. Data collected by NowPublic reveals that 2008 was “the worst year for layoffs and job losses in the United States since World War II.” Although terabytes of data reveal the Recession is slowing under the massive Obama stimulus package, another one million Americans will be laid off this year. Recent Department of Labor studies report that American workers are “the most productive” ever. That’s because not only are they are doing so much more to compensate for their fellow workers having been laid off, but because they live with the fear if they don’t work even harder they, too, may be laid off or lose promotions in an economy that went as far south as our manufacturing plants.

Of course, there are some industries that have gained in the past year’s plunging economy. Retail sales, which the Department of Labor reports as having the lowest average wages, is gaining workers. But, that’s because it’s just “good business sense” to hire 75 low-paid part-timers and save the cost of benefits than to hire 50 full-time clerks. Only about 16 percent of all retail workers even receive health care benefits, according to the BLS.

To the 50-year-old who worked hard for one company more than half of his life, showed up for work on time, left on time, and tolerated the company’s banal preaching about everyone is “part of our happy family,” and then is laid off as an “economy measure,” the numbers don’t matter. To the worker who put in 20 years in one job, and then is fired for reasons that would be questionable under any circumstance, the numbers don’t matter. To the $20,000-a-year worker who is told she won’t receive a raise because “we’re having a bad year,” but sees upper management not only get raises and more stock options, but also hire other managers, all of them making five times or more than her salary, the other numbers don’t matter.

But, millions of Americans will have their bar-b-ques and family reunions, they’ll splash in the ocean or hike mountain trails, and they will have no idea why the struggle for worker rights must be fought every day by every worker.

It is not difficult to come up with methods to solve today’s economic crisis through monetary reform. Many of us are doing it. The key, as I have been writing for the past several years, is to treat credit as a public utility, not the private property of the world’s financial elite.

If we truly adhered to this concept, we would be able to see that a debt-based monetary system, where money only comes into existence through bank lending, can succeed only in isolated circumstances when a growth bubble outpaces the ability of the public to pay interest charges for the privilege of having money to spend and thereby to survive.

Whenever the growth bubble fails, as we have seen over the last three years, the system crashes, the financiers pick up assets for pennies on the dollar, and the cycle starts again. It seems haphazard and unpredictable, but we all know that the system was designed this way and that only the wealthy profit in the long run.

The rich use governments, through which they control politicians, bureaucrats, and covert operatives, to protect and enhance their power. Democracy is subverted. Once the rich have their host country firmly under control, they branch out to the rest of the world. The key then becomes the use of financial power to control the world’s resources through trade and currency manipulation and the management of legal codes and institutional rulemaking.

If social classes within the host country or foreign nations victimized by financial hegemony should happen to rebel, police and military forces are deployed to crush the rebellion. Educational systems and the mass media are employed to brainwash civilian populations by keeping them docile and compliant. A host of methods are employed, including false-flag terrorist events, to instill fear in the population and keep them beholden to the authorities for protection. Because the financial elite are parasites who kill their hosts, they must constantly ensnare new victims.

The foregoing is a complete picture of the present world situation. The last two hundred years have been marked by the march toward world conquest by the money-masters through the Anglo-American military-financial-intelligence colossus, combined with their bought-and-sold allies from the privileged classes of subservient nations.

The outcome was in some doubt during the 1970s in the aftermath of the Vietnam War. But beginning with the Reagan Doctrine in the 1980s, where a decision was made to gobble up the world one small country at a time, the march forward resumed. The 1990-91 Persian Gulf War, the carving up of Yugoslavia later in the 1990s, and the conquest of Iraq and Afghanistan most recently have brought the Western alliance to the borders of Russia. The attack now continues through the Caucasus region, even as Iran and Pakistan are being isolated.

It may be controversial to say that Russia is the target. Why might this be so? It’s because the financial takeover by the West in the 1990s didn’t work. An independent Russia has made a comeback. They have a lot of nuclear weapons and know how to use them. The collapse of the Soviet Union, leaving the U.S. “the world’s only superpower,” created a far more perilous imbalance than most people are aware of. It’s an imbalance that has caused Western military planners—for instance with NATO—to dangerously overreach.

The big question geopolitically is whether China can be induced to stand with the West. This was the objective of the effort beginning around 1971 under President Richard Nixon’s “Opening to China” to incorporate China into the Western financial system. But today China increasingly seems to be standing alone, with the makings of a self-sufficient banking and industrial complex—and a stable currency—that is defying Western attempts at control.

Will there be an “oriental surprise?” Will China reach a point where it makes an irreversible decision to side with Russia or stand against the West? No one knows. Henry Kissinger wrote in the Washington Post on August 19, 2009, that keeping China as a friend to the West is essential for the “New World Order.” And yes, he used those words—this is not a big secret. The winds of change are also blowing in Japan, where the pro-American ruling party has just been voted out.

Personally, I find this struggle for world domination repugnant—the complete triumph of the rule of materialism and violence. As Rodney King said, “People, I just want to say, you know, can we all get along?” Indeed, why can’t we see that life on earth, as Pope Benedict XVI recently pointed out in his encyclical Caritas In Veritate, is a gift from God to man, a gift that bestows on all of us the duty to treat each other fairly and with compassion?

So, in the face of the current world horror, what chance do monetary reformers have to be heard?

The answer, I believe, is that we are being heard. My mind goes back to 2003, only six years ago, when Stephen Zarlenga came to my office at the U.S. Treasury Department in Washington, D.C., where I had booked him to give a presentation based on his book, The Lost Science of Money. Later I worked with Steve on his first draft of the American Monetary Act. The time came when Steve began to meet with Congressman Dennis Kucinich, briefing him and others in Washington on monetary ideas.

So much has happened since then. So many more people have become aware of the evils of the debt-based monetary system. We have seen Congressman Ron Paul ignite a national storm of revulsion against the Federal Reserve System. There is now even hope that the American Monetary Act might be introduced on the floor of Congress.

But it is also perfectly obvious that this is only a start. The start, however, has been made, though there’s a long way to go.

We’ve had promising starts before. Back in the latter part of the 19th century, the American public were far more attuned to ideas of monetary reform than at any time since. There was then a Greenback Party that elected members of Congress and ran candidates for president. The Populist Party understood monetary issues and the importance of a flexible and expansive currency. Henry George became the leading author of the day with his reformist ideas based on the principle that the earth was a commons from which all have a right to benefit.

But then, when the international bankers finally succeeded in taking over the country through the passage of the Federal Reserve Act of 1913, the curtain fell. It wasn’t an iron curtain; it was a red velvet curtain, such as graced the windows of the rich financiers of the age who benefited. These financiers started two world wars to consolidate their dominion. They may yet start a third. The Reagan Doctrine may have made it inevitable.

But I do not believe the warmongers will have the last say. Even if they bring down upon us another world catastrophe, those who believe in the better side of humanity will eventually win, because our cause is just and our ideas are based upon truth. Without monetary reform there can never be economic democracy. But with it perhaps the chief cause of war can be eliminated: the unjust distribution of wealth among people and nations, where some get far too much and many get nothing.

I strongly support the American Monetary Act, the movement for a basic income guarantee, and proposals supporting citizens’ dividends such as those of the Social Credit movement or the ones already in place through programs like the Alaska Permanent Fund. Even if such measures are not immediately implemented, the effort to promote them serves the purpose of educating millions of people.

Our present responsibility is getting the word out that there is indeed a far better way to do things and that real change is possible. That money and credit can empower people, not just enslave them. That debt is unnecessary when credit is viewed as a public utility. That technology when properly distributed can free people for higher intellectual and spiritual pursuits, not just eliminate jobs and force millions of people into bankruptcy and starvation. That, as Henry George and his successors have made clear, resources are for everyone, not just a few.

I have come up with my own proposal for immediate relief that I call “The Cook Plan.” One of the worst myths of our time is that for government to spend money it can only collect that money ahead of time through taxes or by borrowing. “The Cook Plan,” instead, would have the government print and distribute vouchers in the amount of $1,000 a month to any adult resident who applied.

The vouchers could be spent on necessities of life such as food, housing, clothing, transportation, or communication. They would then be deposited in a series of community savings banks and used to capitalize low-interest lending to individuals, students, small businesses, and family farms. The backing for the vouchers would be the new economic production they would engender at the grassroots level of every community.

This measure alone would take a giant step toward bringing about a healthy U.S. and world economy at the level of “We the People,” rather than the fruitless and hypocritical attempt to create “recovery” through bank lending and government deficit spending. “The Cook Plan” has met a positive response from around the world during the several months since I proposed it.

My views, while economically sound, have a spiritual basis. I believe in God, and I believe that man was created in the image of God. I believe that a world where we love our neighbor as ourselves and implement this love through social and economic policy is not just a dream, that it is the only practical way to live.

I believe in the family of man and the responsibility of man to be a good steward of the earth and the environment. I believe financial tyranny has done its best to destroy these values. But I see an upsurge of desire and commitment among people for a new day, a truly democratic society, and a life on earth that is organized and conducted sanely, compassionately, and wisely.

Those who attend such events as the American Monetary Institute’s 2009 conference understand all this. Together we will continue to work toward our ideals, no matter what disasters may intervene. It will take time and hard work, but we and those who come after us shall prevail.

As the largest recipient of US military aid in the hemisphere, Colombia has long been the US’ most important ally in Latin America. Simultaneously, Colombia has also become the hemisphere’s worst human rights violator, with Colombia’s numerous paramilitary organizations recently taking center stage, as they’ve gradually become directly responsible for more human rights atrocities than the formal military and police. In the name of fighting “narco-terrorism,” poor people and dissidents are massacred, assassinated, tortured, and disappeared, among other atrocities—done to eliminate particular individuals and to “set an example” by intimidating others in the community. 97 percent of human rights abuses remain unpunished.

In recent years, a variety of human rights organizations, as well as mainstream academics and journalists have found it impossible to ignore the astronomical human rights violations. However, even though these groups have accurately reported on the actual atrocities, Jasmin Hristov argues that in their reports, the atrocities are largely de-contextualized from the powerful forces in Colombia and the US that directly benefit from this repression. According to Hristov, this mainstream presentation serves to mask the fact that US and Colombian elites directly support (via funding, training, supervising, and providing legal immunity for) state repression carried out by the police and military, as well as illegal paramilitary groups that are unofficially sanctioned by the government. Whether it is murdering labor organizers or displacing an indigenous community because a US corporation wants to drill for oil on their land, Hristov passionately asserts that death squad violence is purposefully directed towards sectors of society that stand in the way of the ruling class’ efforts to maintain economic dominance and acquire more resources to make even more profit.

In her book, Hristov does make a convincing argument that Colombia’s notorious death squads are inherently linked to maintenance of the country’s extreme economic inequality. Particularly since the neoliberal reforms of the 1990s that have increased poverty, Colombia’s poor continue to resist their oppression in many different ways. In response, state repression on a variety of levels is needed to terrorize unarmed social movements and other community groups and activists.

Throughout Blood & Capital, Hristov seeks to expose the rational motivations behind state violence for capitalism’s economic elites in the US and Colombia. In meticulous detail, Hristov shows how the super-rich benefit from state repression and how the violators of human rights have essentially become immune from any consequences for their actions. If death squads are truly to be abolished in Colombia, we must look honestly at how and why they exist today. Hristov’s new book is a powerful tool for exposing who truly calls the shots.

Neoliberalism or Neopoverty?

Hristov asserts that “it is not a mere coincidence that during the era of accelerated neoliberal restructuring, the deterioration in the living conditions of the working majority has been accompanied by an increase in the capabilities and activities of military, police, and paramilitary groups, as well as the portrayal of social movements as forces that must be monitored, silenced, and eventually dismantled.” The scandalous epidemic of poverty in Colombia is key to understanding Colombian politics, and why the upper classes so fear political organizing among the poor, who could mount a formidable opposition to the status quo if allowed to organize unrestrained by state repression.

When neoliberal policies were adopted by the Colombian government in the 1990s, it dramatically increased poverty, and made an already terrible situation worse. Hristov writes that the “essential components of neoliberalism are trade liberalization, privatization, deregulation, and austerity. Trade liberalization entails the removal of any trade barriers, such as tariffs and quotas. Privatization requires the sale of public enterprises and assets to private owners. Through the removal of government restrictions and interventions on capital, deregulation allows market forces to act as a self-regulating mechanism… Austerity requires the drastic reduction or elimination of expenditures for social programs and services.”

She argues that the “main cause that led to the official adoption of neoliberal policies by the developing countries in Latin America and elsewhere was the pressure to service their external debts in the late 1970s. In order to receive loans from the World Bank (WB), or the International Monetary Fund (IMF), nations had to agree to a program of structural adjustment that included drastically reducing public spending in health, education, and welfare,” and much more.

Because Colombia had less debt than other Latin American countries, “major neoliberal restructuring did not begin until 1990, under President Cesar Gaviria Trujillo (1990-94), when the country began to receive massive amounts of US military aid…In addition to the significant social damage wrought by these policies, by the mid-1990s Colombia had to almost double its borrowing from the IMF because of the economic crisis brought on by the market liberalization,” writes Hristov.

These drastic reforms have intensified since current President Alvaro Uribe came to power in 2002. After the IMF loaned $2.1 billion in 2003 on the condition that the reforms be accelerated, Uribe “privatized one of the country’s largest banks (BANCAFE), restructured the pension program, and reduced the number of public-sector workers in order to cut budget deficits, as required by the international lending institution. Uribe also closed down some of the country’s biggest public hospitals, eliminating over four thousand medical jobs, and denationalized companies in the telecommunications, oil, and mining sectors,” reports Hristov.

These are a few of the statistics compiled by Hristov, who writes that “in a country of 45 million, around 11 million people are unable to afford even one nutritious meal a day. According to statistics from 2005, 65 percent of Colombians are unable to regularly satisfy basic subsistence needs. In rural areas, the poverty rate is as high as 85 percent… In 2000 it was estimated that half a million children suffer from malnutrition and close to 2.5 million children between the ages of six and seventeen are forced to work… Furthermore, there has been a notable decline in school attendance, literacy, and life expectancy as well as access to child care and education over the past couple of years.”

Blood, Capital, and the State Coercive Apparatus

Throughout Blood & Capital, Hristov details many horrifying ways in which the rich are empowered by violence from what she identifies as the “state’s coercive apparatus” (SCA). She argues that “two intertwining motifs run throughout Colombia’s history: (1) social relations marked by inequality, exploitation, and exclusion and (2) violence employed by those with economic and political power over the working majority and the poor in order to acquire control over resources, forcibly recruit labor, and suppress or eliminate dissent.”

Dating back to the European conquest of the Americas, Hristov asserts that violence has been central to the creation of modern-day Colombia’s government and economy. She writes that “starting in the late 1500s, the conquerors began clearing the indigenous population from territories with desirable characteristics—mineral deposits, fertile soil, access to water, transportation routes, and so on. The separation of the indigenous from their means of subsistence allowed the formation of a local colonial elite who transformed what used to be the native inhabitants communal lands into large estates or haciendas. The creation of landless peasants facilitated the supply of labor for the Spaniards’ ventures, such as mining and agriculture.”

State violence supporting the economic elite continued, but became much worse in the 1960s under the direction of the US military. Alfredo Vasquez Carrizosa, President of the Colombian Permanent Committee for Human Rights reports that in the 1960s, “during the Kennedy administration,” the US “took great pains to transform our regular armies into counterinsurgency brigades, accepting the new strategy of the death squads.” This “ushered in what is known in Latin America as the National Security Doctrine… not defense against an external enemy, but a way to make the military establishment the masters of the game… the right to combat the internal enemy… this could mean anyone, including human rights activists such as myself.”

As Edward Herman, co-author of The Washington Connection and Third World Fascism explained in a previous interview with Upside Down World, US support for repressive governments in Colombia and throughout Latin America was, and still is, part of a general policy towards third world populations. Focusing largely on US support for the Latin American “National Security States,” Herman and co-author Noam Chomsky argue that U.S. corporations purposefully support (and in many instances create) fascist terror states in order to create a favorable investment climate. In exchange for a cut of the action, local military police-states brutally repress their population when it attempts to assert basic human rights.

In the 1960s, the US and Colombian governments launched Plan Lazo, designed to target the “internal enemy.” Hristov writes that “the military aid that was part of Plan Lazo (and all subsequent programs, including those in place today, such as the Patriot Plan) were given on the condition that Colombian forces would use terror and violence, since these formed a legitimate part of the overall anticommunist offensive. In 1966 the field manual US Army Counterinsurgency Forces specified that while antiguerrilla should not employ mass terror, selective terror against civilians was acceptable and was justified as a necessary response to the alleged terrorism committed by rebel forces.”

Hristov asserts that while the US handled the “financial and ideological aspects” of building and strengthening the SCA, locally the Colombian elites also played a key role. “It implemented many of the policies suggested by the US counterinsurgency manual in order to discipline the civilian population through measures such as press censorship, the suspension of civil rights (to permit arrest on mere suspicion), and the forced relocation of entire villages. President Guillermo Leon Valencia (1962-66) boosted the anticommunist campaign by declaring a state of siege whereby judicial and political powers were transferred to the military while the latter was freed from accountability to civilian authorities for its conduct.”

With US financing and supervision, the Colombian armed forces have since become one of the most renowned human rights violators in the world. This despicable conduct eventually created significant local and international opposition, and under this pressure the SCA has been forced to adjust. In response, the responsibility for repression has shifted more towards paramilitaries, whose activities are officially independent of the government. In this situation, when paramilitaries target the “internal enemy,” the same goal is accomplished as if the government itself did it, yet the government cannot be officially linked to the violence.

The Paramilitarization of Colombia

The size and strength of paramilitary death squads in Colombia has steadily increased since they were first established in the 1960s. According to Hristov, the paramilitaries are now responsible for about 80 percent of human rights violations in Colombia, compared to 16 percent by the rebel guerrillas. The paramilitaries’ evolution, Hristov argues, is the result of “perhaps the most creative and intelligent effort by an elite-dominated state to counteract revolutionary processes… The Colombian parastatal system represents neither a traditional centralized authoritarian regime, as those that existed in Argentina, Chile, and Brazil, nor merely a collection of autonomous armed bands dispersed over rural areas, each ruling locally, as in Mexico. What we see in Colombia is a mutated SCA that has assumed a nonstate appearance.”

The function of the paramilitaries in Colombia was explained well by Captain Gilberto Cardenas, former captain of the national police and former director of the Judicial Police Investigative and Intelligence Unit in the Uraba region. In 2002, testifying against the commander of the Seventeenth Brigade of the Colombian armed forces, Cardenas told representatives of the United Nations and Colombian authorities, “The paramilitaries were created by the Colombian government itself to do the dirty work, in other words, in order to kill all individuals who, according to the state and the police, are guerrillas. But in order to do that, the [the government] had to create illegal groups so that no one would suspect the government of Colombia and its military forces…members of the army and the police even patrol side by side with the paramilitaries.”

The paramilitary system first began in the mid-1960s when the Colombian government passed legislation that authorized citizens to carry arms and assist the military in repression. Hristov argues that “paramilitary forces entered the scene to perform two main functions.” The first was to participate in combat at a local level, as described by the 1966 US Army Counterinsurgency Forces field manual, which stated: “paramilitary units can support the national army in the conduct of counterinsurgency operations when the latter are being conducted in their own province or political subdivision.” Second, Hristov writes that paramilitaries “were intended to monitor and gather intelligence on the rebels, their civilian supporters, and social organizations by establishing networks throughout the country.”

While these early paramilitaries did play some role in state repression, it would not be until the 1980s that they really began to increase in size and influence. Hristov writes that “the 1980s were the golden age of paramilitary development, as many new groups formed, expanded, and rapidly acquired financial and military strength… This second wave of creation enacted by large-scale landowners, cattle ranchers, mining entrepreneurs (particularly those in the emerald business) and narco-lords took place in a particular context, characterized by five main features: a shift in the state’s (unofficial) policy toward the partial privatization of coercion; the state’s fusion with the elite; a legal framework that had set the ground for the design, training, equipping, and administration by the state military of armed bodies outside its institution; a prevailing anticommunist ideology; and militarized patches of the country that served as models to emulate.”

This second wave was given another boost in 1994 with the creation of the Community Rural Surveillance Associations (CONVIVIR) by current President Alvaro Uribe Velez, who was the governor of the department of Antioquia at that time. Hristov writes that Uribe made CONVIVIR into “a replica of the original paramilitary bodies designed in the 1960s. As it had thirty years ago, now the civilian counterpart of the SCA was to take on a central role in the Dirty War under a legal mantle. By the time CONVIVIR was outlawed, in 1999, most of the numerous paramilitary self defense bodies had united, attaining an organizational and military capacity unsurpassed by paramilitary forces in any other Latin American country.”

In August, 1998, just before the legislation supporting CONVIVIR was abolished, hundreds of members publicly announced that they would be joining the AUC paramilitary network, which became the most prominent paramilitary network in Colombia. The AUC had been created in 1997, mostly under the leadership of Carlos Castano and his paramilitary group, the ACCU, which became the largest group in the AUC federation. Others that operated in this loose confederation of paramilitary groups included Bloque Cacique Nutibara, the Bloque Central Bolivar, and the Bloque de Magdalena Medio.

Following official “peace negotiations” between the AUC and the Colombian government which began in 2002 with an official AUC ceasefire agreement, the AUC officially disbanded in February 2006, as part of an overall public disarmament of many paramilitaries throughout Colombia. However Hristov argues that “there are many factors challenging the legitimacy of the peace process. First, during the entire period of the cease-fire announced by the AUC, its groups regularly engaged in military actions against civilians, thereby committing human rights violations (and such activities continue to take place). Second, often those who claimed to be demobilizing were not the real paramilitary combatants but hired criminals, or drug dealers who had bought the AUC franchise. Third, large quantities of arms that should have been turned over were not. Fourth, fighters who are officially considered demobilized are in reality already active militarily in new organizations, where their skills of terrorizing the civilian population for economic gains are necessary and valued.”

Since 2006, there have been several government initiatives that give the formal appearance of the Colombian government working to combat paramilitaries. Hristov explains that “early in 2007 the Supreme Court began investigating numerous connections between paramilitaries and important state actors, such as senators, representatives, deputies, councilors, and mayors. As time went by, the public learned of more and more cases in which the legal (state officials with their political authority and legitimacy) and the illegal (paramilitary groups with their economic and military power) had entered into alliances to advance their mutual interests. Through mid-2008, 38 percent of members of Congress have been implicated in this parapolitica scandal.”

While Hristov recognizes some importance in these recent investigations, she feels that their real impact has been extremely limited. She argues that “despite all the cases that have been exposed, parapolitica is not likely to be eradicated from the Colombian political system. On the contrary, the flood of revelations about politicians’ connections to the paramilitary actually allows serious crimes, such as complicity in massacres, to get buried under waves of minor offenses, and eventually the entire issue becomes just another corruption scandal.”

In their 2009 report on Colombia, Human Rights Watch concluded that there are many “threats to accountability for paramilitaries’ accomplices,” reporting that “the Uribe administration has repeatedly taken actions that could sabotage the investigations. Administration officials have issued public personal attacks on the Supreme Court and its members, in some cases making accusations that have turned out to be baseless, in what increasingly looks like a campaign to discredit the court. In mid-2008 the administration proposed a series of constitutional amendments that would have removed what are known as the ‘parapolitics’ investigations from the Supreme Court’s jurisdiction, but it withdrew the proposal in November. The administration also blocked what is known as the ‘empty chair’ bill, which would have reformed the Congress to sanction parties that had backed politicians linked to paramilitaries.”

Hristov concludes that the centrality of paramilitaries to Colombian politics will not be disappearing anytime soon, mostly because repression has been necessary to enforce the country’s stark social/political/economic injustice. Hristov argues that the paramilitaries have become an essential tool of repression, and because Colombia’s poor majority will continue to resist this outrageous poverty, the paramilitaries’ repression will continue. Seen in this context, the recent demobilization process is only a tactical restructuring of paramilitaries and the SCA, similar to their restructurings in the 1980s and 1990s. Hristov sees this restructuring as an “adaptation response” to “assure its future survival” in the face of “the reality of resistance and opposition by numerous sectors of society against further dispossession,” with the state’s ultimate goal being “the institutionalization of paramilitarism and the legalization of capital accumulation through violence.”

War on Narco-terrorists?

Since the official end of the Cold War in 1989, US rhetorical justification for allying itself with and providing military aid to the Colombian government has shifted from fighting “communism” to fighting “narco-terrorism.” Hristov argues that official rhetoric may have changed but it’s still easy to expose this fraudulent war on narco-terrorism as actually being a war against poor people. Concerning the so-called war on terrorism, how can the hemisphere’s worst human rights violator fight terrorism? Then, similar to the absurd notion of a terrorist fighting terrorism, how can a government heavily complicit in the drug trade claim that it is fighting a war on drugs?

The Colombian government’s multi-faceted complicity in drug trafficking extends all the way to current President Uribe, who was listed by the Pentagon itself, as one of the most wanted international drug traffickers. A declassified National Security Archives report dated September 23, 1991, explicitly accused Uribe of being a collaborator of the Medellin cartel and a personal friend of Pablo Escobar. This report states further that Uribe was one of the “more important Colombian narco-terrorists contracted by the Colombian narcotics cartels for security, transportation, distribution, collection, and enforcement of narcotics operations in both the US and Colombia. These individuals are also contracted as ‘HIT MEN’ to assassinate individuals targeted by the ‘extraditables,’ or individual ‘narcotic leaders,’ and to perform terrorist acts against Colombian officials, other government officials, law enforcement agencies, and groups of other political persuasions.”

It’s not just the Colombian government! Hristov argues that the US government’s Drug Enforcement Agency (DEA) “has in reality been converted largely to an instrument of drug traffickers and paramilitaries.” To support this assertion, she cites a 2004 memorandum issued by a lawyer at the US Department of Justice named Thomas M. Kent, which accused the DEA of extreme misconduct. Kent states that strong evidence of misconduct is routinely ignored by the control agencies of the Department of Justice. Hristov summarizes key points made in Kent’s memorandum, including “to supplement their $7,000 monthly salary, some DEA agents have managed to negotiate with Colombian drug dealers… DEA personnel have been implicated in the killing of informants… Members of the AUC [paramilitaries] have been assisted by DEA agents in money laundering… DEA agents have participated in the extortion of drug traffickers awaiting extradition.”

On another note, Hristov makes the important point that drug trafficking and the rise of paramilitaries have both fed each other in two key ways. “First, the groups involved in trafficking needed to protect their laboratories, illegal cultivation, and clandestine airstrips in rural areas stimulated the emergence of local armed groups outside the state. Second, many drug dealers had begun to invest their capital in millions of hectares of the best agricultural land in the country… and they needed armed forces to protect their lands.” Hristov adds further that “the preexisting concentration of land ownership in the hands of the elite and the displacement of impoverished peasants was aggravated dramatically by this trend.”

To further expose this fraudulent “war on drugs,” it should be noted that the US government has a long history of complicity in drug trafficking, particularly in Latin America. While author William Blum has written the definitive short article on the topic, Alfred McCoy has written the most comprehensive book, titled The Politics of Heroin, documenting the CIA’s relationships with drug traffickers around the world, including in France, Italy, China, Laos, Afghanistan, Haiti, and throughout Latin America. In 1989, a Senatorial Committee chaired by Senator John Kerry documented that during the 1980s, while working with the anti-Sandinista “Contras,” the CIA and other branches of the US government were complicit in trafficking cocaine into the US from Latin America. The Kerry Committee concluded a three year investigation by stating in their report that “there was substantial evidence of drug smuggling through the war zones on the part of individual Contras, Contra suppliers, Contra pilots, mercenaries who worked with the Contras, and Contra supporters throughout the region… US officials involved in Central America failed to address the drug issue for fear of jeopardizing the war efforts against Nicaragua… In each case, one or another agency of the US government had information regarding the involvement either while it was occurring, or immediately thereafter.”

The Kerry Committee’s report and the story behind it has been analyzed well by authors Peter Dale Scott and Jonathan Marshall in their book Cocaine Politics. In 1996, investigative journalist Gary Webb wrote a series of articles for the San Jose Mercury News (later expanded and made into a book in 1999) which directly tied Contra cocaine traffickers Danilo Blandon and Norwin Meneses (both protected by the US government) to Los Angeles drug kingpin “Freeway” Rick Ross, who played a key role in starting the crack-cocaine epidemic of the 1980s. The mainstream media launched a smear campaign attacking Webb’s story that eventually caused even the Mercury News to denounce Webb. However, several prominent journalists came to Webb’s defense and challenged the mainstream media’s smear campaign, including Norman Solomon, Robert Parry, and Counterpunch co-editors Alexander Cockburn and Jeffrey St. Clair.

Unmasking The Unholy Alliance

The relationship between the US and Colombian elite is truly an unholy alliance. With US President Barack Obama praising the Colombian government and attempting to build several new military bases in Colombia, it is more important than ever to expose the truth about who supports death squads and why. Hopefully Blood & Capital will receive the attention that it deserves, and Hristov’s meticulous research can be used to truly disarm the state coercive apparatus in Colombia.

This outrage did not occur in the United States, but in Canada.¹ Under capitalism, all nations limit access to medical care, and Canada is no exception.

Why Ration Medical Care?

Most people believe that medical care is a human right, and everyone should have access to the care they need.

However, when profits matter more than human rights, medical care is rationed. People get only what they can pay for, or what employers, insurance companies and governments decide to give them.

The only way to provide medical care as a human right is to provide universal access.

Universal access should not be confused with improved access. Universal access means no rationing, so that the CEO, the factory worker and the homeless addict would all receive the best medical care that society can provide.

Politicians who talk about universal access to medical care don’t mean equal access, they mean that everyone should have some access or more access.

One cannot eliminate class divisions in medicine without also eliminating them in society, so capitalism keeps universal access off the agenda. We are not allowed to question whether medical care (or any essential service) should be rationed by class. We can dispute only the form and extent of this rationing.

Opposition to universal medical care is not only political, it is also financial. While productivity and profits are linked to the health of the workforce, employers don’t want to pay taxes to provide for medical services. And some capitalists reap huge profits from privatized medicine.

The ruling class shows no interest in what is medically preferable — universal access with an emphasis on illness prevention and social health. Its priority is to cut costs, maintain profit-making opportunities and keep the working class under control.

These concerns are addressed by a class-based, treatment-oriented medical system, where the rich have access to the best services, the middle class and skilled workers have limited access through pooled insurance programs, and the poor are provided with a bare-bones basket of government-funded services. This is the standard formula for medical systems under capitalism, with different nations displaying variations on this basic model.

While the debate to reform American medicine emphasizes the differences between the Canadian and American medical systems, both nations are deeply divided by class, and their medical systems reflect those divisions.

In the US, medical rationing is based on ability to pay. The resulting inequality is up-front and obvious. Canada rations medical care by under-funding the public health care system, bringing inequality through the back door.

US Rationing

All Americans can access medical services — if they can pay for them. Most can’t.

Sixty percent of the US workforce make less than $15 an hour. In 2005, the average annual insurance premium for a family of four ($10,880) cost more than the annual income of a full-time minimum-wage worker ($10,712), before deductibles, co-payments and the cost of non-insured treatments.²

Currently, 47 million Americans have no medical insurance. Those who have insurance can’t count on getting the care they need because insurance companies refuse to cover many conditions and set limits on how much they will pay. Whenever possible, they deny payment, forcing people to go without or pay out of pocket, making medical bills a prime source of bankruptcy.

In America’s free-market system, access to medical care is based on the ability to pay, and the working class is free to go without.

Canadian Rationing

Canada has established medical care as a legal right. In reality, the medical system is too poorly funded to provide comprehensive services to all, so some people are excluded altogether, and access is limited for everyone else.

To reduce the cost of medical programs, each province sets conditions on who qualifies for coverage. To obtain Ontario health insurance (OHIP), one must:

* be a Canadian citizen or a documented immigrant

* be a permanent resident of Ontario

* be physically present in the province for 153 days in any 12-month period

Visitors, transients, undocumented immigrants, and refugees without status are not covered.

As a final obstacle, a three-month waiting period is imposed before coverage begins. The Ontario government web site “strongly encourages new and returning residents to purchase private health insurance in case you become ill during the OHIP waiting period.”

In Canada, as in the US, the capitalist class exerts constant pressure to reduce government-funded social services. Bureaucrats are employed to measure “cost-efficiency” and achieve “cost-containment” by reducing the number of services provided, forcing health workers to do more for less and outsourcing to the private sector.

To keep costs down, medical school enrollment has been restricted to the point that Canada needs 26,000 more doctors just to meet the OECD average number of physicians-per-population.

Under-funding forces patients to wait for assessment and treatment, and half of Canadians report waiting longer than they consider reasonable.³ The seriousness of this problem is hotly debated on both sides of the border.

Advocates of privatized health care emphasize how long Canadians wait in order to discredit all government-funded systems, even though millions of Americans with no insurance essentially wait forever. In contrast, defenders of medicare minimize the problem of wait times, making it harder to fight for more funding for the system.

When people have to wait for essential services, those with money and connections find a way to get to the front of the line or to bypass it altogether. The longer the line, the more inequality grows, and the more pressure there is to develop private-sector alternatives.

Comparing the US and Canada

In Canada, 13 provinces and territories administer medical care, resulting in 13 different payers with limited transferability between them. There is also a market of competing private companies that provide workplace, group and individual insurance to cover medical services not funded by the provincial plans.

In the United States, government is the largest single provider of medical funding. About 100 million Americans (one in three) receive medical care through government-funded programs like Medicaid, Medicare, the military and government employee health benefits.

The basic difference between the Canadian and US medical systems is the proportion of government funding to private funding. In Canada, government pays 70 percent of medical costs, while individuals and private insurance companies pay the rest. In the United States, this proportion is reversed.

Government-funded medical systems offer two important advantages: the cost of medical care is socially shared, so that individuals aren’t crippled by medical expenses; and medical benefits are removed from the employers’ control, so that workers can change jobs without fear of losing access to care.

These advantages diminish when governments under-fund the medical system, forcing people to pay for their own care or rely on workplace medical benefits.

Because most Americans want a government-funded universal medical system, they could benefit from learning how Canadian medicare was won, and how it is now being lost.

The Fight for Canadian Medicare

Until the 1960’s both the American and Canadian medical systems were dominated by the private sector. Charitable organizations provided minimal care for the poor. Regular medical care was reserved for those who could pay and for those whose employers would pay for them.

Like their American counterparts, Canadian physicians and insurance companies vigorously opposed any reforms that smacked of “state medicine” or “socialism.” Neither business nor government supported access to medical care as a human right.

During the 1960s, popular pressure grew for universal health care. To contain demand, the federal government launched a Royal Commission to “study” the problem. The Canadian Labour Congress (CLC) made its preference clear:

We favor a system of public health care that will be universal in application and comprehensive in coverage. We favor a system that will present no economic barrier between the service and those who need it. We are opposed to any provision which will require some people to submit themselves to a means test in order to obtain service. We look to a system of health care that will be regarded as a public service and not as an insurance mechanism.⁴

Despite the grass-roots demand for socialized medicine, where the State is both payer and provider, the Medical Care Insurance Act of 1966 established socialized insurance, a publicly-financed, private enterprise system “free of government control or domination.” It took five more years to implement the Act in all provinces.

In the province of Quebec, union demands peaked in the 1972 general strike. In response, Quebec incorporated medical services into a broad social benefits system, paid for and provided by the provincial government.

The Quebec working class is rarely credited for winning the most comprehensive socialized medical system in North America.

Rolling Back the Gains

The initial funding agreement for medicare was 50-50, with federal and provincial governments sharing the cost. In 1977, the federal government created a more complex system for transferring payments to the provinces and dropped its share of medical funding to 20 percent.

As federal funds diminished, the provinces were forced to pay more. The result was round after round of cuts to hospital budgets and other medical services. Because the provinces varied widely in their ability to pay for medical programs, the principle of equal access was eroded.

Medical care was still free, but there was less of it available. Private insurers rushed into the breach created by under-funding. The more services were cut from the medicare basket, the more individuals had to purchase insurance, pay out of pocket or go without.

In 1984, the federal government passed the Canada Health Act to reassure nervous Canadians that medicare was safe. Universal access to medical services was guaranteed on paper, but no funds were provided to implement the principle. Behind the scenes, politicians were preparing the ground for privatized health care.

In 1994, the Ontario government stated,

To have the effective launching pad it needs, the health industries sector must expand its share of its own home market. Steps must be taken to ensure that, as in other countries, the domestic market supports the development of globally competitive companies.⁵

One of these steps was to scrap regulations that ensured a minimum level of daily care for patients in nursing homes.

In 1997, the federal government declared,

Promoting Canadian companies as global health-keepers is the main objective driving the strategies and plans of the government for the medical devices, pharmaceutical and health-services sector.⁶

Behind the mask of health-care “reform” and “restructuring,” the Canadian medical system is being handed, piece-by-piece, to private industry in a manner similar to the dismantling of Britain’s National Health Service.⁷

Publicly-provided medical care is under-funded to the point of crisis, then condemned for its inadequacies. The private sector is proclaimed the only possible savior, and opponents are ridiculed as old-fashioned and sentimental. When the market fails to deliver, the public is told to adapt to “the new reality.”

Canadian medicare is currently so under-funded that, in 2004, Canada’s Supreme Court declared, “The Canada Health Act [does] not promise that any Canadian will receive funding for all medically required treatment.”

The CUPE Hospital Strike

The strongest opposition to the attack on medicare has come from unionized health workers. As operating costs rose and budgets fell, Canadian hospitals became a battleground. In every province, hospital workers fought cuts to staff and programs and out-sourcing of services to for-profit, non-union corporations.

In 1981, the Canadian Union of Public Employees (CUPE) struck the Ontario Hospital Association. At one hospital, workers locked out management and continued working under their own elected committee. For seven days, 13,000 strikers defied provincial back-to-work legislation, the jailing of top union officials and the firing of key strike leaders.

When management refused to budge, the next logical step would have been to mobilize the other sections of CUPE for an all-out public-sector strike. Unwilling to take that step, union officials caved.

The defeat was substantial. Most small, local hospitals were closed. The remaining hospitals were merged into giant conglomerates managed by business consultants.

Privatization has decimated Canadian medicare. Tens of thousands of hospital nursing jobs have disappeared at the same time that hospital stays have been cut, so that fewer nurses care for much sicker patients. Deadly, infectious diseases sweep through hospitals that no longer have enough cleaning staff.⁸

Most rehabilitation and chronic-care facilities have closed or gone private, transferring the burden of caring for the sick, injured and frail to their families.

Hospital out-patient clinics have closed, and discharged hospital patients are now directed to family doctors for follow-up. But there are not enough doctors to meet the demand.

By 2006, fewer than 10 percent of Ontario family doctors were accepting new patients. Currently, five million Canadians (one in six) have no family doctor. Patients can wait weeks to see a doctor, months to see a specialist and many more months for treatment.

Funding cuts have severely damaged Quebec’s model medical system. In 2005, Canada’s Supreme Court ruled that lack of timely access to treatment in Quebec was so serious that the province could no longer prohibit private funding for medically necessary services. Similar legal challenges are expected in the other provinces.

The Canadian experience proves that government-funded medical systems don’t guarantee timely access to needed medical services. Ironically, while many Americans long for a Canadian-style medical system, that system is disintegrating under the pressure of market forces.

We Need a Fighting Labor Movement

Hundreds of American labor organizations have endorsed HR 676 — The United States National Health Insurance Act to establish a national insurance system. However, endorsements alone will not be enough to defeat a powerful medical insurance industry, overcome resistance to increased State funding and counter the right-wing campaign against “entitlements.”

The people at the top of society believe that medical services should be rationed on the basis of class, and they raise the highest stink when anyone suggests that they share access with everyone else. They don’t want any restrictions placed on their access to “Rolls Royce” medicine, and they will fight tooth and claw to keep their class privileges. If you have any doubt of that, read What Happened in Chile: An Analysis of the Health Sector Before, During, and After Allende’s Administration.

If allowed to vote on the matter, most Americans would choose a universal health care system.⁹ Because we will never get to vote on it, we must build a mass movement that is large enough and determined enough to win it.

The extent of medical rationing that exists at any point in time in any nation is determined by the balance of class forces. Too little rationing generates a sense of mass entitlement (or equality) that can be difficult to contain. Too much rationing generates class anger that can also be difficult to contain.

It took a revolution in France to scare Germany into establishing Europe’s first national medical plan in 1883. In Britain, the National Insurance Act of 1911 was rushed through Parliament during a strike wave. And Canadian medicare was consolidated in 1972, the year of the Quebec General Strike.

The US is the only industrialized country without a national medical plan, because the American labor movement has been too weak to win it.

During the crisis of the 1930s, President Roosevelt conceded the New Deal, but excluded national medicare. To quell the protests of the 1960s, President Johnson conceded Medicare and Medicaid, but held the line on universal coverage.

American workers continue to be divided by race and dominated by union bureaucrats who collaborate with management. As a result, working and living conditions for most Americans continue to deteriorate, along with their health and their access to medical care.

We need to build a new labor movement that will fight for comprehensive, universal medicare. The trillions of dollars being spent to impose US control over the Middle East would more than cover the cost of a top-notch national medical system.

We need a fighting labor movement that pays more than lip-service to the principle of “an injury to one is an injury to all” and actively supports health workers who are fighting for higher staff-to-patient ratios, lower work loads and the right to blow the whistle on deficient and dangerous patient-care conditions.

Every day, the world becomes a sicker place. And every day, the gap grows between what people need and what capitalism is willing to provide.

Our challenge is to build a labor-based, mass movement that will reject medical rationing, fight for universal medical care and keep on fighting to end all class inequality.

1. Cited in Lepage-Monette, A., “Programs that work: Ensuring health care for the uninsured,” Medical Post, Toronto, March 4, 2008, p.6.
2. Colliver, V., “Health plans dwindle in U.S.: Number of firms offering insurance drops as costs rise,” San Francisco Chronicle, September 15, 2005, p.C-1.
3. The mortality risk for those who waited longer for hip surgery was 22 percent higher than for those treated within two days of admission to hospital. The Canadian Institute for Health Information. Health Indicators, 2007.
4. Cited in Fuller, C. (1998). Caring for profit: How corporations are taking over Canada’s health care system. Ottawa: Canadian Centre for Policy Alternatives.
5. “Healthy and Wealthy, A Growth Prescription for Ontario’s Health Industries.” Report of the Health Industries Advisory Committee to the Ontario Ministry of Health, March 1994.
6. National Sector Team: Health Industries, “Canadian International Business Strategies – ‘97-’98,” Report for Industry Canada, March 20, 1997.
7. Pollock, A.M. (2004) NHS plc: The privatization of our health care. New York, NY: Verso.
8. Valiquette, L. et. al. (2004). Clostridium difficile infection in hospitals: a brewing storm. CMAJ, July 6, Vol.171, No.1.
9. On November 3, 1998, Illinois residents voted on the “Bernardin Amendment for Universal Health Care” which states, “Health care is an essential safeguard of human life and dignity, and there is an obligation for the State of Illinois to ensure that every citizen is able to realize this fundamental right. On or before May 31, 2002, the General Assembly by law shall enact a plan for universal health care coverage that permits everyone in Illinois to obtain decent health care on a regular basis.” Eighty-three percent of voters in Cook County and 71 percent in the downstate/suburban areas endorsed it. The vote was not binding.

I don’t get to use the word “heroic” very often. Van Heerden is heroic. The Deputy Director of the Louisiana State University Hurricane Center, it was van Heerden who told me, on camera, something so horrible, so frightening, that, if it weren’t for his international stature, it would have been hard to believe:

“By midnight on Monday the White House knew. Monday night I was at the state Emergency Operations Center and nobody was aware that the levees had breeched. Nobody.”

On the night of August 29, 2005, van Heerden was shut in at the state emergency center in Baton Rouge, providing technical advice to the rescue effort. As Hurricane Katrina came ashore, van Heerden and the State Police there were high-fiving it: Katrina missed the city of New Orleans, turning east.

What they did not know was that the levees had cracked. For crucial hours, the White House knew, but withheld the information that the levees of New Orleans had broken and that the city was about to drown. Bush’s boys did not notify the State of the flood to come which would have allowed police to launch an emergency hunt for the thousands that remained stranded.

“Fifteen hundred people drowned. That’s the bottom line,” said von Heerden. He shouldn’t have told me that. The professor was already in trouble for saying, publicly, that the levees around New Orleans were no good, too short, by 18″. They couldn’t stand up to a storm like Katrina. He said it months before Katrina hit – in a call to the White House, and later in the press.

So, even before Katrina, even before our interview, the professor was in hot water. Van Heerden was told by University officials that his complaints jeopardized funding from the Bush Administration. They tried to gag him. He didn’t care: he ripped off the gag and spoke out.

It didn’t matter to Bush, to the State, to the University, that van Heerden was right- devastatingly right. Exactly as van Heerden predicted, the levees could not stand up to the storm surge.

In 2006, I met van Heerden in his office at the University’s hurricane center; a cubby filled with charts of the city under water. He’s a soft-spoken, even-tempered man, given to understatement and academic reserve. But his words were hand grenades: the Bush White House did nothing about the levees, despite warning after warning.

Why? A hurricane is an Act of God. But a levee failure is an Act of Bush — of the federal government. Under the Flood Control Act of 1928, once the levees break, it’s Washington’s responsibility to save lives — and to compensate the victims for lost homes and lost loved ones.

By telling me this, the professor had to know he was putting his job on the line. This week marks the fourth anniversary of the drowning of New Orleans.

Shakoor Aljuwani of the Rebuilding Lives Coalition reminds me it is also the fourth year of exile for more than half of the low-income Black residents who once lived in the Crescent City. In the Lower Ninth Ward, 81% have yet to return.

And it marks the end of Dr. van Heerden’s career at LSU. They got him. Once the network cameras were turned away from New Orleans, as America and Anderson Cooper shifted attention to Brad and Angelina and other news, the University put an end to Dr. van Heerden. “In 2006 they started the nonsense — they stopped me from teaching. They tried last year to get faculty to vote me out.”

His contract was not renewed; he was forced out too, dumped along with the chief of the Hurricane Center who led the academics who supported van Heerden’s research. The Man Who Was Right was fired.

Cronies and Contracts

I did not seek out professor van Heerden about Bush’s deadly silence. Rather, I’d come to LSU to ask him about a strange little company, “Innovative Emergency Management,” a politically well-connected firm that, a year before the hurricane, had finagled a contract to plan the evacuation of New Orleans.

Innovative Emergency Management knew a lot about political contributions, but seemed to have zero experience in hurricane response planning. In fact, their “plan” for New Orleans called for evacuating the city by automobile. When Katrina hit, 127,000 wheel-less New Orleans folk were left to float out.

And van Heerden knew all about it. Well before the hurricane, I discovered, he’d pointed out flaws in the “Innovative” plan — and was threatened for the revelation by a state official. The same official later joined the payroll of Innovative Emergency Management.

When I asked the company, at their office, for a copy of the plan, they body-blocked our Democracy Now! camerawoman and called the cops.

Not everyone shared the harsh fate of van Heerden. Just this month, Innovative Emergency Management, the firm with the drive-for-your-life plan, was handed a fat contract by the State of Alabama to draft – you guessed it – a hurricane evacuation plan for Mobile.

The City That Care Forgot

After the flood, I filmed the uplifting story of Common Ground, the commune of Katrina survivors who, under the leadership of the community organizer Malik Rahim, rebuilt a shattered hulk of a building with their own sweat and donated materials. They housed 350 displaced families.

Since I broadcast that film in 2006, Rahim and the tenants were evicted by speculators who bought the building. Just before Christmas, elderly residents were carried out and dumped in the street, literally, by marshals. The speculators paid the families who build their new edifice not one dime.

We also filmed the story of Patricia Thomas, a woman fighting to return to her home in the beautiful Lafitte public housing project. Speculators have long lusted for this property on the edge of the French Quarter.

And now the speculators have it. Patricia’s home, unscathed by Katrina, was nevertheless bulldozed. As Rahim puts it, “They wanted them poor niggers out of there and they ain’t had no intention to allow it to be reopened to no poor niggers.” Their plan succeeded. Patricia, homeless, died last year.

This Friday, take a moment to remember a courageous professor, an indefatigable activist and the refugee families who once lived in what was once called, “The City That Care Forgot.”

Now, in 2009, you could call it the city that everyone forgot.

Empire of Illusion: The End of Literacy and the Triumph of Spectacle
By Chris Hedges
Hardcover: 232 pages
Publisher: Nation Books (2009)
ISBN: 9781568584379

If you’re looking for one of those treacly Oprah books—The Secret, and its variants—avoid this one. Those books nourish like potato chips and leave most people more confused, more desperate, more thirsty for fantasies than before. No amount of wishing, earnest yearning, visualizing and New Age mysticism is going to get us out of the morass we’re in. In Empire of Illusion, Chris Hedges takes a sober look down our hall of distorting mirrors. The son of a minister, with a degree in theology from Harvard, a columnist for Truthdigger.com, Hedges has worked as a foreign correspondent in Central America, the Middle East, Africa and the Balkans. His books include War Is a Force That Gives Us Meaning and American Fascists. He was part of the New York Times team that won the 2002 Pulitzer Prize for the paper’s coverage of global terrorism. Here are some of the pertinent facts he contemplates:

• The top 1% of Americans now control more wealth than the bottom 90% combined.
• World-wide porn revenues, including in-room movies at hotels, sex clubs, and the Internet, topped $97 billion in 2006—more than that of Microsoft, Google, Amazon, eBay, Yahoo!, Apple, Netflixs, and EarthLink combined.
• The football coach is the University of California-Berkeley’s highest paid “employee”; he makes about $3 million a year. Nationwide, full-time faculty positions have been disappearing, replaced by adjunct positions, with itinerant instructors barely making living wages.
• Collapsing and overwhelmed sewage systems release more than 40,000 discharges of raw sewage into our drinking water, streams and homes each year.
• One-third of our schools are in such a severe state of disrepair that it interferes with the delivery of instruction.
• We spend $8.9 billion on ICBM missile defense systems that would be useless in stopping a shipping container concealing a dirty bomb.
• A family of 4 now pays about $12,000 a year in premiums for healthcare—up about 90 percent from 2000 to 2006. About 50 million Americans are uninsured; another 25 million are “under-insured.”
• We have 2.3 million of our citizens behind bars. With less than 5% of the world’s popultion, we have 25% of the world’s prisoners (1/2 for non-violent drug crimes).

Any wonder there’s been a flight to fantasy? But, more profoundly, what’s the connection between fantasy and our decaying culture? How did we get here? Digging beneath the statistics, we find an increasing number of warm-blooded humans suffering like they never have before: lost in a world of promises broken; the American Dream of endless consumption and fulfillment–nightmarishly evinced.

“A culture that cannot distinguish between reality and illusion dies,” Hedges writes. “And we are dying now. … Those who cling to fantasy in times of despair and turmoil inevitably turn to demagogues and charlatans to entertain and reassure them. …” As bad as things are now—the disconnectedness, fragmentation, loneliness, im- and a-morality–we can extrapolate, interpret the trend lines, read history, and find worse to come. Hedges dissects “our cultural embrace of illusion and the celebrity culture that has risen up around it” in five comprehensive chapters:

   The Illusion of Literacy
   The Illusion of Love
   The Illusion of Wisdom
   The Illusion of Happiness
   The Illusion of America

At his best, Hedges has a “true” journalist’s (i.e., the careful observer’s, the truth-digger’s) eye for detail, and a novelist’s ear and sense of flow. His book is a compilation of some of the best thinking on corporate power, the Corporate State, the decline of the American empire—deftly knitted together with wit and a lively writing style. (His chapter on the “Illusion of Love,” focusing on pornography, is both funny and poignantly sad.)

Empire begins with spectacle. We’re in a wrestling ring with jeering fans chanting at the villainous “tycoon” actor-wrestler, John Bradshaw Layfield: “You suck! You suck! You suck!” Layfield is pitted against the “Heartbreak Kid,” the crowd favorite, a working-class hero. “You lost your 401(k). You lost your retirement. … You lost your children’s education fund,” Layfield taunts the Kid and the audience. Then, he offers the Kid a job—working for him! All the Kid has to do is leave the ring. Humiliated, that’s just what the Kid does. And in their identification with their fallen hero, in their vicarious humiliation, the anger and resentment of the audience is stoked against the tycoon. They hunger for vengeance.

“The bouts are stylized rituals,” Hedges writes, “public expressions of pain and a fervent longing for revenge. The lurid and detailed sagas behind each bout, rather than the wrestling matches themselves, are what drive crowds to a frenzy. … And the most potent story tonight, the most potent story across North America, is one of financial ruin … and enslavement of a frightened and abused working class.” This mirroring of the “ emotional wreckage of the fans” is the “appeal of much of popular culture, from Jerry Springer to ‘reality television’ to Oprah Winfrey.” It succeeds “because we ask to be fooled.”

Celebrities become our “vicarious selves” who provide us with release from anonymity and drudgery—“ultimate fulfillment before death.”

Given his background, its no small wonder that Hedges would spend much of his book wrestling with the angel. “Morality is the product of a civilization,” he writes; but, in “a society that has less and less national cohesion, a society that has broken down into warlike and antagonistic tribes where ‘winning is all that matters,’ morality is seen as ‘irrelevant.’”

Ours is a culture of manipulation, one of “inverted totalitaianism.” Hedges borrows the phrase from Sheldon S. Wolin’s Democracy Incorporated. “Inverted totalitarianism,” Hedges writes, “unlike classical totalitarianism, does not revolve around a demagogue or charismatic leader. It finds expression in the anonymity of the Corporate State. It purports to cherish democracy, patriotism, and the Constitution while manipulating internal levers. … Political candidates are elected in popular votes by citizens, but candidates must raise staggering funds to compete. They are beholden to armies of corporate lobbyists … who author the legislation. … Corporate media control nearly everything we read, or hear. It imposes a bland uniformity of opinion. It diverts us with trivia and celebrity gossip. …In classical totalitarian regimes … economics was subordinate to politics.” In America, economics is dominant.

“The fantasy of celebrity culture is not designed simply to entertain. It is designed to keep us from fighting back.” We need not stretch ourselves, I imagine. The hero of The Matrix will stretch for us. So will Plastic Man or Batman or Superman. In our culture of distractions and manipulations, Aldous Huxley “feared that what we love will ruin us.” Citing Neil Postman, he reproduces a dialectic between the authors of 1984 and Brave New World:

What Orwell feared were those who would ban books. What Huxley feared was that there would be no reason to ban a book, for there would be no one who wanted to read one. Orwell feared those who would deprive us of information. Huxley feared those who would give us so much that we would be reduced to passivity and egoism. Orwell feared that the truth would be concealed from us. Huxley feared that the truth would be drowned in a sea of irrelevance.

I put it this way: We need not worry that Big Brother is watching us; we need worry about our dual fascinations with watching Big Brother—and with being watched! In fact, we’ve become a nation of double voyeurs: we watch people on “reality shows” who are being watched and monitored by the unblinking camera recording their humdrum lives.

We are what we eat and we’ve been eating a lot of baloney. It comes to us in various forms including the petrochemical-sprayed food we eat, the Big Pharma pills we take to keep us drugged, numb and complaisant. We watch our celebs gulping it and pitching it back at us. Our politicians sprinkle it with mustard and daub it with relish.

Conditioning. … Both those geniuses—George and Aldous–were trying to deal with it: the whole spectrum of the Propaganda State grown up around the theories of Edward Bernays—Freud’s nephew. They both understood the necessary concomitants of fear, repetition, tribal identity and group conformity. They gave it different expressions, but they grounded it in the imperative of psychological re-structuring and transformation. Orwell with the gut-wrenching fear of our worst chimeras; Huxley with mind-numbing lullabies to babies, easy, commitment-free sex from puberty onward, and lots of soma.

Hedges’ chapter on the “Illusion of Happiness” addresses the issue of psychological conditioning. It would be amusing if it weren’t so tragic. It has the same tenor of pathos as his chapter on sex, in which one enthusiast waxes eloquent about his $7500 anatomically correct silicone dolls. (He has eight, with removeable heads, and he exults over the simulated veins in the feet and the dorsal venous arch—“really, really cool.”)

The silicone pitch in academia is “positive psychology,” or what Professor Cooperrider at Case Western Reserve University calls, “Transformational Positivity.” According to the professor, “Institutions can be a vehicle for bringing more courage into the world, for amplifying love in the world … temperance and justice, and so on.”

And so on it goes. Just think positive. (Remember that Indian guru who beguiled the Beetles? “Just be happy!” ) All we need is “appreciative inquiry” in order to “transform organizations into ‘Positive Institutions’.”

Cooperrider is hardly alone. There are more than a hundred courses on positive psychology on college campuses. The University of Pennsylvania offers a Masters of Applied Positive Psychology, and Claremont Graduate University offers Ph.D. and M.A. concentrations in “The Science of Positive Psychology.” Such degree programs are also available in England, Italy and Mexico. They focus on “cultivating strengths, optimism, gratitude, and a positive perspective.” Think positively and positive things will happen. Sound familiar? Perhaps we should call such programs, “Becoming Oprah.”

Hedges lifts his lens high enough to kindle fire here: “The purpose and goals of the corporation are never questioned. To question them, to engage in criticism of the goals of the collective, is to be obstructive and negative. … If we are not happy, there is something wrong with us. Debate and criticism, especially about the goals and structure of the corporation, are condemned as negative and ‘counterproductive.’” And he’s a good pitbull here:

“Positive psychology is to the corporate state what eugenics was to the Nazis.” It’s a “quack science” that “throws a smokescreen over corporate domination, abuse, and greed.”

So, if you’re looking for treacle, look elsewhere.

My one cavil is with the ending of the book, the last part of the last chapter. Hedges can be polemical and he does repeat himself. The last chapter needs less polemicism and summary arguments. And I can’t help but wonder: What is the other side? Is there any way to avoid catastrophe? Perhaps an interview with one of those heroes whose names pepper this important book would have sharpened the quill: people like Ralph Nader, Cynthia McKinney, Father Roy Bourgeois, Kathy Kelly, Amy Goodman, Bill Moyers, Jim Hensen—what sustains them, keeps them going?

Also missing in action is Marshall McLuhan, whose Understanding Media of some forty years ago established the scientific foundation of critiquing the media—the mesmeric effect of mentally connecting pixiles; the alpha waves generated in a half-waking, half-sleeping state.

Morris Berman and Derrick Jensen have argued that we’re already past the “tipping point.” NASA scientist Jim Hensen says we should have started yesterday to bring down C02 levels or face global cataclysm.
In the last couple of pages, Hedges seems to pull his punches for a gentle caress: “No tyranny in history has crushed the human capacity for love,” he writes. “The mediocrities who mask their feelings of worthlessness and emptiness behind the façade of power and illusion, who seek to make us serve their perverse ideologies, fear most the power of love. … Love will endure, even if it appears darkness has swallowed us all, to triumph over the wreckage that remains.”

I don’t know. I’m not sure. The power of love is cold comfort to the corpses and the wasted lives. Love without wisdom, like freedom without wisdom, has caused as much mischief and grief as the genuinely malignant spirits and ideologies among us. Perhaps the overriding question now is how best to organize collective action against the tyranny of corporatism, the relentless pulsations of conformity. How do we return to a “literate, print-based world, a world of complexity and nuance, a world of ideas”?

One book cannot do it all, of course. Hedges has trained a brilliant light on our confused and murky, rather bizarre culture. In the last couple of pages he leaves us with another powerful idea, probably as good as love. He alludes to Rostand’s Cyrano: “The ability to stand as ‘an ironic point of light,’ that ‘flashes out wherever the just exchange their messages,’ is the ability to sustain a life of meaning.”

Rise like lions after slumber
in unvanquishable number!
Shake your chains to earth, like dew
Which in sleep had fallen on you—
Ye are many, they are few!

– Percy Bysshe Shelley “Mask of Anarchy”

If you don’t know your history it’s as if you were born yesterday.

– Howard Zinn

In a recent article, famed trend forecaster, Gerald Celente, wrote:

The natives are restless. The third shot of the “Second American Revolution” has been fired. History is being made. But just as with the first two shots, the third shot is not being heard. America is seething. Not since the Civil War has anything like this happened. But the protests are either being intentionally downplayed or ignorantly misinterpreted.¹

He cites the more than 700 anti-tax rallies and “Tea Parties” as evidence of a burgeoning period of passion. In a nation bearing arms, the power of the first amendment is waning, the power of a chaotic government is encroaching, and the people are growing restless after four decades of declining wages, the prospect of total economic and societal collapse,and a government that must lie in order to perpetuate itself. In the status quo Machiavellian world of the corporate media, the protests have either been ignored or bastardized, oft in sophomoric light, as references to “tea bagging” attest. The media, by and large, operates at a third grade level. Upon the election of Barack H. Obama many well-meaning Americans congratulated themselves for the eradication of racism in their country. However, persons protesting the presidents policies—either by way of demonstrating or what Alex Jones terms “the Poster Revolution—have been labelled racists.

In August many Senators and House members have hinted at the cancellation of their town hall meetings, as incensed citizens use these forums to voice—rather, shout—their myriad concerns about the direction of the Empire. A strong presence of police and bodyguards were needed to quell the fervor of the natives. An increasing number of congressmen speak out against rumors of possible martial law this fall.

Meanwhile, the corporate media slowly integrates such coverage into their programs. According to Brian Wilson on Fox news, “Northcom has a proposal sitting on the desk of Secretary of Defense Robert Gates that would authorize the military to backup FEMA should their be an H1N1 pandemic… One assumes this might be necessary should there be mass quarantines.” (according to WHO there already is a level 6 pandemic, organizing all UN nations under effective UN control)

Protestors have been derided as racist, gun-owning militia members of the conservative variety. In actuality, the irate citizens hail from all facets of the American experience. Outrage over the issue of healthcare—though few grasp the complex 1000 page health care reform document, legislators included—is “clearly real and un-staged.”

The healthcare legislation is piled atop a maelstrom of adventurously genocidal White House policies: “a series of gigantic, unpopular, government-imposed (but taxpayer-financed) bailouts, buyouts, rescue and stimulus packages have been stuffed down the gullet of Americans. With no public platform to voice their oppositions, options for citizens have been limited to fruitless petitions, e-mails and phone calls to Congress…all fielded by anonymous staff underlings,” Celente states. The eugenics approach to science under John Holdren, White House Science Czar, has also stirred many to anger.

Congress is in recess, which means that elected representatives are back in their districts. The public is partially active. Celente, who predicted the crash of 1987 and the fall of the Soviet Union, contends, “Though in its early stages, the ‘Second American Revolution’ is underway. Yet, what we forecast will become the most profound political trend of the century—the trend that will change the world—is still invisible to the same experts, authorities and pundits who didn’t see the financial crisis coming until the bottom fell out of the economy.”

Trend Forecast: Conditions will continue to deteriorate. The global economy is terminally ill. The recession is in a brief remission, not the early stages of recovery. Cheap money, easy credit and unrestrained borrowing brought on an economic crisis that cannot be cured by monetary and fiscal policies that promote more cheap money, easy credit and unrestrained borrowing.

Nevertheless, Washington will continue to intervene, tax and exert control. Protests will escalate and riots will follow.

Fourth Shot of the “Second American Revolution”: While there are many wild cards that could light the fuse, The Trends Research Institute forecasts that if the threat of government-forced Swine Flu vaccinations is realized, it will be the fourth shot. Tens of millions will fight for their right to remain free and unvaccinated.

Celente cites new technologies such as the internet, camera-equipped cell phones, access to YouTube, and twitter, as means rendering the revolutionary spirit nearly impossible to control. It “will prove contagious.” He does acknowledge that the “Second American Revolution” could be “derailed through some false flag event designed to deceive the public, or a genuine event or crisis capable of rallying the entire nation behind the President…Given the pattern of governments to parlay egregious failures into mega-failures, the classic trend they follow, when all else fails, is to take their nation to war…A false flag attempt, a genuine crisis, or a declaration of war, may slow the momentum of the “Second American Revolution,” but nothing will stop it.”

While Celente outlines admirably the multitude of circumstances aligning in the United States, he does miss some key points in his report, such as the U.S. military’s mobilization on domestic soil. As Mathew Rothschild from the Progressive details in the article, “The Pentagon Wants Authority to Post Almost 400,000 Military Personnel in U.S.,” the Pentagon has requested congress to grant the Secretary of Defense the authority to post almost 400,000 military personnel all over the United States in times of emergency or major disaster.²

Mike German, the ACLU’s national security policy counsel, articulated condemnation “that the military would propose such a broad set of authorities and potentially undermine a 100-year-old prohibition against the military in domestic law enforcement with no public debate and seemingly little understanding of the threat to democracy.”

Further, other various legislation lays groundwork which enables the state, in the event of a national emergency, to vertically align power so as to better concentrate certain citizens from the rest. For example, the National Emergency Centers Establishment Act allows Homeland Security to use KBR, a subdivision of Haliburton, to establish at least six national facilities for the concenration of civilians, not criminals, on military installations.³

In the Field Manual 3-19-40 Military Police Internment/Resettlement Field Operations, a civilian internee is labeled as such: “CIVILIAN INTERNEE 1-7. A CI is a person who is interned during armed conflict or occupation if he is considered a security risk or if he needs protection because he committed an offense (insurgent, criminal) against the detaining power. A CI is protected according to the Geneva Convention Relative to the Protection of Civilian Persons in Time of War (GC), 12 August 1949.”

The REX 84 Program outlines procedures for the continuity of government and the internment and processing of internment of dissidents in the event of civil unrest. In the United States of America there are federal plans, geared towards events or non-events of unrest or pandemic, for the implementation of martial law and military dictatorship. The evidence is staggering. For two-thirds of the citizenry in the U.S., the Constitution has already been suspended by “Constitution Free Zones,” set up two hundred miles from all borders and coasts.

In a recent Huffington Post article, Larry Flynt called for an agreement on a date on which a general strike would be orchestrated. Music to many of our ears such civil disobedience would be. He also had this to say:

The American government — which we once called our government — has been taken over by Wall Street, the mega-corporations and the super-rich. They are the ones who decide our fate. It is this group of powerful elites, the people President Franklin D. Roosevelt called “economic royalists,” who choose our elected officials — indeed, our very form of government. Both Democrats and Republicans dance to the tune of their corporate masters. In America, corporations do not control the government. In America, corporations are the government.

In order to avert senseless bloodshed, starvation, the utilization of an already implemented police state, the United States public must organize and accomplish thousands of large-scale regional switches to partially self-sustainable economies in order to organize a successful and fluid general strike. This is not the revolution of reform, only the beginning thereof. Crisis precipitates change through which power is consolidated. Through the usurpation of power resistance is fomented. Through resistance and crisis the common forum of ideas is expanded; people think. Through thought imagination is realized. A general strike is but the first action, and the realization of community will mark the onset of the revolutionary reform we all desire: an intellectual and emotional revolution.

1. Gerald Celente. “The Second American Revolution.”
2. Mathew Rothschild. “The Pentagon Wants the Authority to Post Almost 400,00 Military Personnel in U.S.” Progressive, 12 August 2009.
3. Byron Tripp. “H.R. 645 And The FEMA Concentration Camps,” 23 August 2009.

If the U.S. populace somehow imagines that its members are viewed any differently than any other populations across the world that are used to produce maximal profits for the top economic class, there’s a rude awakening in store ahead. Further, most legislators simply do not care whether middle and lower class interests are or aren’t well served as long as they, themselves, can somehow make out well in the times ahead.

Besides, why should any Americans feel that they deserve to be treated more favorably by the transnational moneyed elites and their government backers than their counterparts across the rest of the world? As A. H. Bill reminds: “The richest 225 people in the world today control more wealth than the poorest 2.5 billion people. And… the three richest people in the world control more wealth than the poorest 48 nations.”

Occasionally someone making a staggering amount of money in a crooked sort of way might raise a few officials’ eyebrows or induce a mild reprimand. In addition, he might, occasionally, be singled out as the token fall guy so as to be made into a warning example as was Bernie Madoff. Most of the time, though, no action is usually undertaken to correct the situation when directors of major companies carry out activities that are, obviously, right on or over the edge of fraudulent practices.

As Barak Obama, perhaps hypocritically, chastened, “Under Republican and Democratic administrations, we failed to guard against practices that all too often rewarded financial manipulation instead of productive and sound business practices. We let the special interests put their thumbs on the economic scales.”

Yet, he, himself, showed no hesitation during his election campaign over collecting $40,925 from the bailout fund recipient and nearly bankrupt investment house Bear Stearns, $161,850 from the bailout fund recipient and mortgage underwriter Morgan Stanley, as well as benefits from countless other institutions that have received government favors at taxpayers’ expense. As such, it’s hard in actuality to deliver more than just a mild verbal rebuke about these organizations’ modus operandi if one picks up a personal windfall from not meddling. Thus, the financial corruption continues at all levels of government.

A case in point is the self-serving oil trader Andrew Hall. His relationship with Citigroup’s (C.N) Phibro energy-trading unit brought him approximately $100 million in 2008 despite that his parent company registered a net deficit of $18.7 billion for the same year and received $45 billion in TARP funds.

However, it’s been pointed out that he could moderately adjust his current level of gain and continue to maintain the same procurement pattern if he manages to stay out of the limelight. If he follows this plan in the near future, his earnings and bonuses won’t likely duplicate the $250 million personal compensation that he’d received in the past five years. Yet, he could still make out quite well all the same!

In any event, one has to question such lavish rewards considering that Citigroup suffered a 95% loss of its share value since 2007 in relation to which Phibro “occasionally accounts for a disproportionate chunk of Citigroup income.” At the same time, the U.S. government will shortly be the owner of 34% of this company. Put more bluntly, is Andrew Hall’s personal prosperity and propensity to add to his private art collect the best use of taxpayers’ funds?

As long as he’s a lavish beneficiary, would he care if they weren’t? As the economist John Kenneth Galbraith once suggested: “The salary of the chief executive of a large corporation is not a market award for achievement. It is frequently in the nature of a warm personal gesture by the individual to himself.” Naturally, Andrew Hall aims to keep such a cozy arrangement intact.

Besides, his personal take is relatively inconsequential. It’s a mere pittance contrasted to the almost two and a quarter billion dollars grand total — roughly $2,217,800,000 — that the top ten U.S. business moguls collectively grossed as their own recompense in 2008.¹

At the same time, it cannot not be expected, in a market based economy, that political influence is not also a purchased commodity. Clearly, opinions are bought and sold just as easily as are any other products and services with payment being campaign funds, such as Obama’s, from big industry — offers of high paying future jobs and other lavish advantages dangled as bait.

On account of this kind of shady deal, tax subsidies connected to executive pay amounted to $20 billion in 2008 according to United for a Fair Economy (UFE) and Institute for Policy Studies. (Imagine if this money, instead, were allocated towards improvements in public education, provision of a universal heath-care plan or any number of other programs that could uplift the American public as a whole.)

During the same period, average CEO pay, at $10.54 million, was 344% higher than typical worker pay. This disparity, also, is generally indicative of a trend that increasingly funnels wealth upward rather than having it more equitably distributed across class lines.

Another sign of this ascendant drift can be found in the change between the first Forbes 400 report (1982) and its 2008 version. In 1982, an entrepreneur only needed slightly more than $100 million dollars to get on the list. By 2008, he wouldn’t be in the top 400 unless he’d garnered at least $1.3 billion. In other words, so much more wealth shot upward in the last twenty years that $100 million now is almost viewed as chump change in comparison to the new top gains.

In addition, Congressional reports have indicated that widespread tax avoidance tricks, like use of overseas banks that do not report amounts to the IRS, have cost taxpayers more than $2 billion annually. Certainly, these lost moneys could well be used to help people less fortunate. For example, the hidden $2 billion could be used to create job training programs for any of the one in nine Americans currently forced to rely on food stamps as an alternative to starvation.

To be eligible for such aid, a family of four, for example, has to have no more than $2,389 as its gross monthly income or 130% of the official poverty level and no more than $1,838 net monthly income or 100% of the poverty level. (There are few deductions and exceptions to the requirements allowed, along with limits for owned property value imposed, that further determine whether one meets qualifications.)

In other words, a typical household of four cannot receive this help if the gross income for the foursome exceeds $28,668 annually and, for an individual, the gross not to be surpassed is $14,088. Additionally, recipients cannot have a great deal of assets with a clearly defined, too high level of worth.

As such, they have to be nearly broke across the board. Meanwhile, it’s clearly disgraceful that more than 27,651,388 Americans are so extremely poor they require food assistance to try to make ends meet.

Even that help, though, is often not enough to prevent further poverty and many folks are unable to avoid outright destitution across the so-called wealthy U.S.A. So next, they lose their homes… and they lose them in droves.

The huge portion of Americans who do so are staggering: While the number of U.S. foreclosure filings climbed by more than 81% in 2008, the total is still sharply rising in 2009. In relation, 300,000 homes foreclosed per month from March to May in 2009 and 1.8 million homes represented the anticipated total for the first half of the year. With such a backdrop, one out of every 398 homes received a filing in April and a whooping 6.4 million homes are anticipated to be in foreclosure by mid-2011. Simultaneously, a record number of individuals, also, applied for bankruptcy.

In a similar vein, the jobless rate, despite some minor dips downward, is still seemingly on the rise. Therefore, the current number of out of work adults could well exceed 20% if all of the hopeless ones, who are no longer collecting unemployment benefits and who gave up looking for opportunities, are added into the mix.

Moreover, they will not be able to jump-start the economy so long as they cannot find work, and especially work at a living wage. After all, how can anyone make lots of purchases or take out bank loans if he has no reasonable income? So it follows that even more retail and wholesale stores, along with banks, will go belly up.

At the same time, the supply side of the market, itself, has created labor troubles. This is because goods have been overproduced. Consequently, there is overstock piled high in warehouses and shipping containers across the world ready to resume its path to the market once the spending reinitializes. However, spending cannot resume as long as the money has largely flowed to the top economic tier and away from average former and low wage workers, who can not expect to have decent paying jobs to create more goods until the current product glut diminishes.

In other words, consumers can’t buy much when money’s tight and work won’t be provided when there’s an oversupply of merchandise largely produced in second world sweatshops whose workers are paid so little that they hardly can put food on their own tables let alone make many more extravagant purchases — ones like toothpaste, soap and shampoo. Besides, they, too, face employment opportunities diminishing because worldwide sales are down for many of the products that, previously, their companies too copiously produced.

Concurrently, the bailouts, oriented towards fixing the credit side of the equation, are not addressing these sorts of supply side problems. Therefore, they will not keep the financial collapse from worsening.

Alternately put, TARP and other payoffs to the self-serving, unconscionable banksters and Wall Street high rollers largely responsible for the downturn will not produce an abundance of jobs. So the reasonable salaries, ultimately needed to buy the wares to cause industrial output to resume, won’t materialize any time soon.

It’s rather simple to understand, really. So why don’t Ben Bernanke and his colleagues seem to notice that massive job loss, itself, needs to be addressed posthaste? Why hasn’t a public works program been initiated? Why don’t they grasp that the act of offshoring all kinds of American jobs to maximize profits at the top tier does not ensure that products will be avidly snapped up by a greatly unemployed and underemployed public?

Since they, apparently, don’t understand, the downturn, with a few small upward twists, will remain in its plunging slide, which in turn will create further layoffs. All the while, the über-wealthy and their corporate supporters, such as most members of Congress, will continue to pamper themselves with capital largely derived from struggling taxpayers and massive loans that raise the federal deficit.

More to the point, how could the slump not last when the affluent elites gamble away huge fortunes comprising of their own and others’ money while manufacturing bubbles and Ponzi schemes in the process? How could anything change when they keep amassing more and more assets for themselves while indifferent to their impact on society as a whole?

Such practices as theirs, obviously, cannot sustain the American middle and under classes and it cannot buoy up the utmost bottom rung either. On account, scores of individuals of all ages continue to wind up in tent cities or ensconced on public park benches. (Supposedly, families with children represent the fastest growing subset of the homeless population in the U.S.A. at present and the average age of a homeless person is nine years old.)

When the upper-crust keeps getting richer by taking an ever greater portion of the overall wealth and government schemes assure that the process continues, nearly everyone else becomes increasingly cash poor. When every now and then big investors suffer hefty losses, the government steps in to shore them up again and again. However, this practice, clearly, does not help the populace in general. The evidence that it does not can be seen everywhere across the American landscape and the entire world.

It follows, then, that, “in the United States, wealth is highly concentrated in a relatively few hands. As of 2004, the top 1% of households (the upper class) owned 34.3% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.3%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth (total net worth minus the value of one’s home), the top 1% of households had an even greater share: 42.2%…”, according to G. William Domhoff, a sociology professor at University of California at Santa Cruz.²

Another way to measure the shift in wealth is by noting some of the corporate trends, themselves. As Sarah Anderson and John Cavanagh, at the Institute for Policy Studies, point out:

1. Of the 100 largest economies in the world, 51 are corporations; only 49 are countries (based on a comparison of corporate sales and country GDPs).
2. The Top 200 corporations’ sales are growing at a faster rate than overall global economic activity. Between 1983 and 1999, their combined sales grew from the equivalent of 25.0 percent to 27.5 percent of World GDP.
3. The Top 200 corporations’ combined sales are bigger than the combined economies of all countries minus the biggest 10.
4. The Top 200s’ combined sales are 18 times the size of the combined annual income of the 1.2 billion people (24 percent of the total world population) living in ‘’severe” poverty.
5. While the sales of the Top 200 are the equivalent of 27.5 percent of world economic activity, they employ only 0.78 percent of the world’s workforce.³

Especially exemplifying this type of corporate immensity is the Wal Mart company. For example, the Walton heirs have a collective worth of around $65 billion and over 1.7 billion shares, or 43%, of Wal Mart stock in addition to earning $29 billion off the stock price rise alone from November 2007 to June 2008.

Meanwhile, the Waltons pay their jean laborers in Nicaragua approximately $1.50/ day. Simultaneously, their average U.S. workers are given wages of about $12,000/ annum causing a full one half of Wal Mart’s 720,000 employees to qualify for food stamps.

At the same time, the clearly exploitive Wal Mart business model is considered an unqualified success — one that should be more often duplicated across the board. After all, it shows the capitalistic free market with its best possible outcome — profits beyond imagination and the American Dream come true (for the few who manage to take unfair advantage of the actual wealth producers)!

Perhaps, though, the best way to look at the new arrangement between citizens, State and the rising corporate structures is through this superlative summation by Benito Mussolini:

The corporate State considers that private enterprise in the sphere of production is the most effective and useful instrument in the interest of the nation. In view of the fact that private organisation of production is a function of national concern, the organiser of the enterprise is responsible to the State for the direction given to production.

State intervention in economic production arises only when private initiative is lacking or insufficient, or when the political interests of the State are involved. This intervention may take the form of control, assistance or direct management.⁴

Even if Benito Mussolini’s position has an alarmingly familiar ring to it, no one still should expect U.S. legislators to create laws any time soon that would enact tax code changes in order to remove subsidies that encourage overpayment to executives and that cost taxpayers $20 billion a year. Indeed, nobody should expect any major changes at all that would level the financial playing field, remove a sense of economic injustice or bring back jobs and reasonable wages to the American people.

As Joel H. Rassman, Toll Bros. CFO in 2006, explained about CEO Robert I. Toll’s $20 million compensation while shareholders were suffering a 22% loss: “I have yet to meet the person who has enough money.”

Like Toll, a majority of Congressional representatives, of whom many are multi-millionaires, apparently imagine that they never have quite enough for themselves and justify their dodgy choices accordingly. They, also, know who butters their bread and it surely is not the increasingly impoverished average U.S. citizens, who continue to be the indirect victims of corporate rapacity and pathetic corporate oversight by executives and Congressmen alike.

In relation, one wonders when a significant number of Americans will, finally, recognize that they’ve been had. Put another way by Andrew Greeley: “It should be no surprise that when rich men take control of the government, they pass laws that are favorable to themselves. The surprise is that those who are not rich vote for such people, even though they should know from bitter experience that the rich will continue to rip off the rest of us. Perhaps the reason is that rich men are very clever at covering up what they do.”

This explanation in mind, we need not worry as much about the terrorists from abroad as the terrorists from above and the duped voters who repeatedly fall for political candidates pandering to this broadly malignant upper class. The latter bunch and their sycophantic legislative admirers, more than any foreign guerrillas, are leading the world’s wealthiest nation into ever deeper ruin.

1. ”Top CEO collected $702 mln in 2008,” Yahoo! News.
2. ”Who Rules America: Wealth, Income, and Power.”
3. CorpWatch, “Top 200: The Rise of Corporate Global Power.”
4. Benito Mussolini, Fascism: Doctrine and Institutions (Rome, ‘Ardita’ Publishers, 1935): 133-135.

Up a darkened stairway and through the detritus of a building that looks like its been scavenged for anything of value to sell, Rohn and Miller enter a sundrenched room. Inside is Michael Palmer, a 57-year-old white former construction worker and merchant seaman who has made a home here. Palmer – his friends call him Mickey – is in some ways lucky. He found a room with a door that locks. He salvaged some furniture from other parts of the hospital, so he has a bed, a couch, and a rug. Best of all, he has a fourth-floor room with a balcony. “Of all the homeless,” he says, “I probably have the best view.”

Mickey has lived here for six months. He’s been homeless since shortly after Katrina, and this is by far the best place he’s stayed in that time. “I’ve lived on the street,” he says. “I’ve slept in a cardboard box.” He is a proud man, thin and muscled with a fresh shave, clean clothes and a trim mustache. He credits a nearby church, which lets him shave and shower.

But Palmer would like to be able to pay rent again. “My apartment was around $450. I could afford $450. I can’t afford $700 or $800 and that’s what the places have gone up to.” Keeping himself together, well-dressed and fresh, Mickey is trying to go back to the life he had. “I have never lived on the dole of the state,” he says proudly. “I’ve never been on welfare, never collected food stamps.” Palmer rented an apartment before Katrina. He did repairs and construction. “I had my own business,” he says. “I had a pickup truck with all my tools, and all that went under water.”

Palmer is one of thousands of homeless people living in New Orleans’ storm damaged and abandoned homes and buildings. Four years after Katrina, recovery and rebuilding has come slow to this city, and there are many boarded-up homes to choose from. The Greater New Orleans Community Data Center counts 65,888 abandoned residential addresses in New Orleans, and this number doesn’t include any of the many non-residential buildings, like the hospital Mickey stays in. Overall, about a third of the addresses in the city are vacant or abandoned, the highest rate in the nation. UNITY for the Homeless is the only organization surveying these spaces, and Miller and Rohn are the only fulltime staff on the project. They have surveyed 1,330 buildings – a small fraction of the total number of empty structures. Of those, 564 were unsecured. Nearly 40% of them showed signs of use, including a total of 270 bedrolls or mattresses.

Using conservative estimates, UNITY estimates at least 6,000 squatters, and a total of about 11,000 homeless individuals in the city.

UNITY workers have also found that not all people living in New Orleans’ abandoned homes are squatters. In the last three months alone, they have found nine homeowners living in their own toxic, flood-damaged, often completely unrepaired homes. These are people living in buildings — identified as abandoned and not fit for human habitation — that they (or extended family members) actually own.

The abandoned building dwellers they’ve found are generally older than the overall homeless population, with high rates of disability and illness. The average age of folks they have found is 45, and the oldest was 90. Over 70% report or show signs of psychiatric disorders, and 42% show signs of disabling medical illnesses and problems. Disabling means “people that are facing death if not treated properly,” clarifies Rohn. “We’re not talking about something like high blood pressure.”

Life in Abandoned Homes

“This leg here bent backwards and the muscle came up,” says Naomi Burkhalter, an elderly Black woman in a wheelchair, sitting outside of the abandoned house she lives in and gesturing to her badly twisted leg. She was injured during Katrina, and can’t walk. She stays in a flood-damaged house in New Orleans’ Gert Town neighborhood, with no electricity or running water. She says the owner – who cannot afford to repair the home – knows she lives there, along with two other women. When they need water, they fill bottles up from neighbors. When she needs to get in and out of her house, she crawls, very slowly dragging herself up and down the steps with her hands, leaving her wheelchair outside and hoping no one takes it. Miss Naomi worked at a shrimp company and rented an apartment before Katrina. Now, between her injury and higher rents, she can no longer afford her former home. “My rent was 350 dollars,” she explains. “But when I came back, my rent was up to $1200.” Burkhalter has been homeless since then.

UNITY has received funding from the federal government for 752 housing vouchers specifically to help house the city’s homeless population. They have put people on a list, with those in the most danger of dying if they don’t get help on the top of the list. However, the vouchers still have not arrived, and at least 16 people from the list have already died while waiting. “The stress and trauma that these people have endured cannot be overstated,” says Martha Kegel, executive director of UNITY. “The neighborhood infrastructure that so many people depended on is gone.”

This problem was exacerbated by the demolition of thousands of units of public housing, an act which not only took away the community that many people found brought them comfort and safety, but has also made affordable rentals for poor New Orleanians even harder to find. Section 8 subsidized housing has been offered as a solution for those displaced from public housing and other poor renters, but a new study from Greater New Orleans Fair Housing Action Center (GNOFHAC) shows that discrimination keeps many people from finding quality housing through the program. According to the report, 82% of landlords in the city either refused to accept Section 8 vouchers, or added insurmountable requirements.

The study found that both discrimination on the part of landlords (99% of Section 8 voucher holders in Orleans parish are Black) and mismanagement on the part of the housing agency were barriers. One prospective landlord told a tester for GNOFHAC that he wouldn’t rent to Section 8 holders, “until Black ministers…start teaching morals and ethics to their own, so they don’t have litters of pups like animals, and they’re not milking the system.”

The mismanagement from the Housing Authority of New Orleans (HANO) was also a big problem for prospective landlords. “I faxed HANO the needed information 12 times for the rent I was never paid” said one landlord. Another housing provider said, “I called every day for a month and never got a call back.”

Last month, more than a hundred members of STAND for Dignity, a grassroots membership project of the New Orleans Workers Center for Racial Justice, protested outside of the offices of HANO, decrying their lack of action. A single mother named Ayesha told the crowd that she had been on the Section 8 waiting list for eight years, and still hasn’t received any help. She is paying 80% of her income on rent, and has been forced to go months at a time without water, gas or lights. George Tucker, another member of STAND, and also (like Mickey Palmer) a former merchant mariner, told the assembled crowd his story of being evicted from his apartment because HANO lost his paperwork. Because of bureaucratic carelessness, he was homeless for thirteen months. “This governmental crookedness is not new,” he said. “But it cannot continue without consequences.”

Last week, at least partly in response to criticism from folks like the members of STAND, HANO announced that they would accept new applications for Section 8 vouchers, for the first time in six years. The period that they will accept applications in is only a week long – from September 6 through 12.

Fear and Harassment

“My best friend died three weeks ago in this chair,” says Mickey Palmer gesturing next to him in his room in the abandoned hospital. “There was two other people staying here with me. One gentleman got in an accident about two months ago and he’s paralyzed in the hospital. Another friend of mine OD’ed and died here three weeks ago. My best friend. So I’m here alone.”

Palmer also fears police harassment. “The police hate homeless people,” he declares. “They’ll arrest me on drunk in public,” he says. “I haven’t had a drink in months.” Gesturing around the room that he has made into a home, he adds, “Of course, this is illegal. If I get caught I can not only be evicted, but incarcerated. I could go to jail for trespassing.”

This fear drives the homeless further underground, and makes it even harder for organizations like UNITY to find them and offer help. “Our city has a long history of police criminalization of homelessness, so people have reason to hide,” explains Martha Kegel.

Despite the size and scope of this problem, help has been hard to come by, from either the city, state, or federal government. “I’m not a politician and I’m not politically savvy,” says Palmer. “But I don’t think they care.”

In a rare step forward last month, both houses of Louisiana’s legislature unanimously passed a bill creating a statewide agency – to be almost entirely funded by the federal government – to address the issue of homelessness. However, Governor Jindal vetoed the bill. Jindal also vetoed funding for the New Orleans Adolescent Hospital, further reducing medical and mental health services in the city – another factor that has made life hard for many homeless folks in the city. As rates of mental illness rise in the city, we now have less treatment available then ever before.

For people like Mickey, caught in a city with few good paying jobs, much more expensive housing, and ever-decreasing social services, there are not many options. “At one time we were part of the city and part of the workforce,” Mickey says. “But people cannot afford the housing in New Orleans anymore. I find most of the people I know, my friends, they can’t afford the rent.”

Like most people in his position, Palmer has felt hopelessness at his plight. “I try not to get depressed, he says, nervously flicking his lighter. “But this can get you depressed. Coming back here last night got me a little depressed.”

Thus, we enlist majority rule: this goofy nation officially broadcasts the welfare of the majority matters. Yet, what if that hallowed majority shoots itself in the foot, elevating one minority of schemers above all others? What if voters, prone to error and demagoguery, misplace their economic self-interest, and an invisible plutocracy sabotages the “general welfare” for the welfare of corporate generals?

By the way, “welfare” shares word roots with the following: well, will, (common)weal, and wealth, itself a linguistic cousin to health. Wealth still fosters health, underpinning hidden Social Darwinism at work, literal survival of the fittest fatcats. One federal researcher showed “most affluent” oldsters outlive poorer brethren by four years.

The U.S. of Plutocracy: Wealth Rules!

What would happen were the plutocracy to become less invisible? Unsettling research from UC Berkeley Professor Saez reinforces the three-decade trend that divides rich from everyone else, across all key measures. First, this stunner: by 2007 the top .01% population captured 6% of America’s total earned income, the highest ratio since the Roaring Twenties. The super-rich are not only much richer, but the rich have captured almost all national productivity gains since the early ‘90s. Second, the top 1% of families take home 23% of all income – after CEO-friendly deductions. In shock yet?

Do you still believe the correlation of total national wealth with majority prosperity? Superficially, it’s true: all boats rise when the top tier thrives. From ‘93 through ’07, total income increased 2.2% per year. But income for the top 1% surged 5.9% each year, leaving 99% of us averaging up 1.3% annually. Let’s not forget that 14 years of inflation, at 3% a year, totaled 46% – wiping out phantom improvements. Average middle-class families with only one income thus suffered a double whammy – less cash plus less purchasing power. What has been and remains “just around the corner” isn’t prosperity but paucity and loss – unemployment, foreclosures and tarnished golden years.

Big spenders, especially Reagan Republicans, worship this correlation not just to defend their present affluence but the limitless abundance dreams are made of. Paul Krugman verifies the magnitude of this gap is an American phenomenon, paralleling three decades of union-busting, resulting in reduced group bargaining power. Union workers are now only 11% of the workforce vs. 30% two decades ago; Canada, by comparison, is still 30% unionized. Wealth disparity reflects not only weaker unions but corporate welfare (farm, mining and energy subsidies, lax or no regulations, or no-bid defense contracts) and sustained tax policy (income and estate loopholes) that act as the great “unequalizer.” This is not about low economic growth, but political leverage that favors the ruling oligarchy (so powerful liberals struggle to distinguish Obama’s Wall Street policies from Bush’s). Despite a shift leftward in opinion polls, wealthy ultra-conservatives in power favored the upper crust with cake and everyone else with crumbs. Forget majority rule: rightwingers like Cheney glory in abysmal approval rankings because they reject majority opinion, whether about taxation, leaving Iraq or ending abusive, secret prisons.

Cream Rushes to the Top

Even more telling than income flow are overall capital asset gaps: American capitalism has concentrated more wealth in fewer households than any place but Switzerland (a special case, with 1/50th our population). Thanks to FDR, from the ‘30’s through the mid-‘70’s, family asset parity actually improved: the top 1% “bottomed” out in ‘76, owning but 20% of everything (back lately to 40%). Worse still, 10% today own 70% of American assets. 70%! In the UK, the top 10% owns 55%; in Canada, 53%; in Germany, only 44%. This “richest” nation on earth spreads wealth like a robber baron skinflint: if 10% own 70%, that means 90% of us own 30%, with gapping trends intact.

So much for fictions we are one, indivisible nation: many are no longer on the same cruise ship, let alone 3rd class. The American Dream is less available than in the 1970s, with mammoth inheritances reifying concentrations. This growing plutocracy undermines the ultimate, if fading American right: Freedom of Opportunity. Unfair taxation (including sales tax, the most onerous) is the key, and many rich view paying taxes as a sucker’s game. Further, if government is the ideological “problem,” the enemy of personal freedom, then more power to those who shrink public coffers.

Impeaching the Constitution

The inequality of income and asset ownership is not only the effect, but prime cause for less prosperity, especially promised “our posterity.” If what passes for majority rule fixes rigid class structures in place, what happens to our immigrant nation? Where is fabled economic mobility and subsequent innovations? Ironically, electing our first non-white president, with humble origins, reinforces a myth LESS true now than during Carter’s presidency: Obama is today’s statistical fluke, hardly proof we are economically a fairer, more open, or more equal culture. Sure, some poor person will again be president; some will win the lottery, too.

Short of a second New Deal to offset today’s Second Gilded Age, our vast majority is well within rights to sue prominent defenders of the sacred Constitution as welchers. If the Founders pledged a direct link between life, happiness and general welfare, let us hold responsible all those who have violated the spirit and letter of enduring covenants. How long will we sustain the fiction of equal opportunity, or that the majority still rules its destiny, or that everyone benefits, when an entrenched plutocracy owns 70% – lock, stock, and barrel. With the top 10% still earning 50% of all income, “lock, stock and barrel” fits all too well, however at odds with fostering a healthier democracy.

To explore some tentative hypotheses of why there is little organized protest, we need to examine the historical-structural antecedents to the world economic depression. More specifically, we will focus on the social and political organizations and leadership of the working class, the transformation of the structure of labor and its relationship to the state and market. These social changes have to be located in the context of the successful ruling class socio-political struggles from the 1980’s, the destruction of the Communist welfare state, and the subsequent uncontested penetration of imperial capital in the former Communist countries. The conversion of Western Social Democratic parties to neo-liberalism, and the subordination of the trade unions to the neo-liberal state are seen as powerful contributing factors in diminishing working class representation and influence.

We will proceed by outlining the decline of labor organization, class struggle and class ideology in the context of the larger political-economic defeat and co-optation of anti-capitalist alternatives. The period of capitalist boom and bust leading up to the current world depression sets the stage for identifying the strategic structural and subjective determinants of working class passivity and impotence. The final section will bring into sharp focus the depth and scope of the problem of trade union and social movement weakness and their political consequences.

History of Economic Depression and Worker Revolts: US, Europe, Asia and Latin America

The social history of the 20th and early 21st Century’s economic crises and breakdowns is written large with working class and popular revolts, from the left and right. During the 1930’s the combined effects of the world depression and imperialist-colonial wars set in motion major uprisings in Spain (the Civil War), France (general strikes, Popular Front government), the US (factory occupations, industrial unionization), El Salvador, Mexico and Chile (insurrections, national-popular regimes) and in China (communist/nationalist, anti-colonial armed movements). Numerous other mass and armed uprising took place in response to the Depression in a great number of countries, far beyond the scope of this paper to cover.

The post-World War II period witnessed major working class and anti-colonial movements in the aftermath of the breakdown of European empires and in response to the great human and national sacrifices caused by the imperial wars. Throughout Europe, social upheavals, mass direct actions and resounding electoral advances of working class parties were the norm in the face of a ‘broken’ capitalist system. In Asia, mass socialist revolutions in China, Indo-China and North Korea ousted colonial powers and defeated their collaborators in a period of hyper-inflation and mass unemployment.

The cycle of recessions from the 1960’s to the early 1980’s witnessed a large number of major successful working class and popular struggles for greater control over the work place and higher living standards and against employer-led counter-offensives.
Economic Crises and Social Revolts in Latin America

Latin America experienced similar patterns of crises and revolts as the rest of the world during the World Economic Depression and the Second World War. During the 1930-40’s, aborted revolutionary upheavals and revolts took place in Cuba, El Salvador, Colombia, Brazil and Bolivia. At the same time ‘popular front’ alliances of Communists, Socialists and Radicals governed in Chile and populist-nationalist regimes took power in Brazil (Vargas), Argentina (Peron) and Mexico (Cardenas).

As in Central and Eastern Europe, Latin America also witnessed the rise of mass right-wing movements in opposition to the center-left and populist regimes in Mexico, Argentina, Brazil, Bolivia and elsewhere – a recurrent phenomenon overlooked by most students of ‘social movements’.

The phenomenon of ‘crisis’ in Latin America is chronic, punctuated by ‘boom and bust’ cycles typical of volatile agro-mineral export economies and by long periods of chronic stagnation. Following the end of the Korean War and Washington’s launch of its global empire building project (mistakenly called ‘The Cold War’), the US engaged in a series of ‘hot wars’, (Korea- 1950-1953 and Indo-China- 1955-1975) and overt and clandestine coups d’etat (Iran and Guatemala – both in 1954); and military invasions (Dominican Republic, Panama, Grenada and Cuba); all the while backing a series of brutal military dictatorships in Cuba (Batista), Dominican Republic (Trujillo), Haiti (Duvalier),Venezuela (Perez-Jimenez), Peru (Odria) among others.

Under the combined impact of dictatorial rule, blatant US intervention, chronic stagnation, deepening inequalities, mass poverty and the pillage of the public treasury, a series of popular uprisings, guerrilla revolts and general strikes toppled several US-backed dictatorships culminating in the victory of the social revolution in Cuba. In Brazil (1962-64), Bolivia (1952), Peru (1968-74), Nicaragua(1979-89) and elsewhere, nationalist presidents took power nationalizing strategic economic sectors, re-distributing land and challenging US dominance. Parallel guerrilla, peasant and workers movements spread throughout the continent from the 1960’s to the early1970’s. The high point of this ‘revolt against economic stagnation, imperialism, militarism and social exploitation/exclusion’ was the victory of the socialist government in Chile (1970-73).

The advance of the popular movements and the electoral gains however did not lead to a definitive victory (the taking of state power) except in Cuba, Grenada and Nicaragua nor did it resolve the crisis of capitalism (the key problem of chronic economic stagnation and dependence). Key economic levers remained in the hands of the domestic and foreign economic elites and the US retained decisive control over Latin America’s military and intelligence agencies.

The US backed military coups (1964/1971-76),US military invasions(Dominican Republic 1965 ,Grenada1983,Panama 1990,Haiti 1994,2005),surrogate mercenaries Nicaragua 1980-89 and right-wing civilian regimes (1982-2000/2005), reversed the advances of the social movements, overthrew nationalist/populist and socialist regimes and restored the predominance of the oligarchic troika: agro-mineral elite, the ‘Generals’ and the multinational corporations. US corporate dominance, oligarchic political successes and pervasive private pillage of national wealth accelerated and deepened the boom and bust process. However the savage repression, which accompanied the US-led counter-revolution and restoration of oligarch rule ensured that few large-scale popular revolts would occur, between the mid 1970’s to the beginning of the 1990’s – with the notable exception of Central America.

Civilian Rule, Neo-liberalism, Economic Stagnation and the New Social Movements

Prolonged stagnation, popular struggles and the willingness of conservative civilian politicians to conserve the reactionary structural changes implanted by the dictatorships, hastened the retreat of the military rulers. The advent of civilian rulers in Uruguay, Brazil, Chile, Bolivia, Argentina in the late 1980’s was accompanied by the rapid intensification of neo-liberal policies. This was spelled out in the ‘Washington Consensus’ and was integral to the President George H.W. Bush’s New World Order. While the new neo-liberal order failed to end stagnation it did facilitate the pillage of thousands of public enterprises, their privatization and de-nationalization. At the same time the massive outflow of profits, interest payments and royalties and the growing exploitation and impoverishment of the working people led to the growth of ‘new social movements’ throughout the 1990’s.

During the ascendancy of the military dictatorships and continuing under the neo-liberal regimes, while social movements and trade unions were suppressed, non-governmental organizations (NGOs) flourished. Billions of dollars flowed into the accounts of the NGOs from ‘private’ foundations. Later the World Bank and US and EU overseas agencies viewed the NGOs as integral to their counter-insurgency strategy.

The theorists embedded in the NGO-funded feminist, ecology, self-help groups and micro-industry organizations eschewed the question of structural changes, class and anti-imperialist struggles in favor of collaboration with existing state power structures. The NGO operatives referred to their organizations as the ‘new social movements’, which, in practice, worked hard to undermine the emerging class-based movements of anti-imperialists, Indians, peasants, landless workers and unemployed workers. These class-based mass movements had emerged in response to the imperial pillage of their natural resources and naked land grabs by powerful elites in the agro-mineral-export sectors with the full support of voracious neo-liberal regimes.

Toward the end of the 1990’s, neo-liberal pillage throughout Latin American had reached its paroxysm: Tens of billions of dollars were literally siphoned off and transferred, especially out of Ecuador, Mexico, Venezuela and Argentina, to overseas banks. Over five thousand lucrative, successful state-owned enterprises were ‘privatized’ by the corrupt regimes at prices set far below their real value and into the hands of select private US and EU corporations and local regime cronies. The predictable economic collapse and crisis following the blatant looting of the major economies in Latin America provoked a wave of popular uprisings, which overthrew incumbent elected neo-liberal officials and administrations in Ecuador (three times), Argentina (three successful times) and Bolivia (twice). In addition, a mass popular uprising, in alliance with a constitutionalist sector of the military, restored President Chavez to power. During this period mass movements flourished and numerous center-left politicians, who claimed allegiance to these movements and denounced ‘neo-liberalism’, were elected president.

The deep economic crisis and repudiation of neo-liberalism marked the emergence of the social movements as major players in shaping the contours of Latin American politics. The principal emerging movements included a series of new social actors and the declining influence of the trade unions as the leading protagonist of structural change.

The Crisis of 1999-2003: Major Social Movements at the ‘End of Neo-liberalism’

Major social movements emerged in most of Latin America in response to the economic crisis of the 1990’s and early 2000’s and challenged neo-liberal ruling class control. The most successful were found in Brazil, Ecuador, Venezuela, Argentina and Bolivia.

Brazil: The Rural Landless Workers Movement (MST), with over 300,000 active members and over 350,000 peasant families settled in co-operatives throughout the country, represented the biggest and best organized social movement in Latin America. The MST built a broad network of supporters and allies in other social movements, like the urban Homeless Movement, the Catholic Pastoral Rural (Rural Pastoral Agency) and sectors of the trade union movement (CUT), as well as the left-wing of the Workers Party (PT) and progressive academic faculty and students. The MST succeeded through ‘direct action’ tactics, such as organizing mass ‘land occupations’, which settled hundreds of thousands of landless rural workers and their families on the fallow lands of giant latifundistas. They successfully put agrarian reform on the national agenda and contributed to the electoral victory of the putative center-left Workers Party presidential candidate Ignacio ‘Lula’ Da Silva in the 2002 elections.

Ecuador: The National Confederation of Indian and Nationalities in Ecuador (CONAIE) played a central role in the overthrow of two neo-liberal Presidents, Abdala Bucaram in 1997 and Jamil Mahuad in January 2000, implicated in massive fraud and responsible for Ecuador’s economic crisis of the 1990’s. In fact, during the January 2000 uprising, the leaders of CONAIE briefly occupied the Presidential Palace. Beginning in the late 1990’s CONAIE had resolved to form an electoral party ‘Pachacuti’, which would act as the ‘political arm’ of the movement. Pachacuti, in alliance with the rightist populist former military officer Lucio Gutierrez in the 2002 elections, briefly held several cabinet posts, including Foreign Relations and Agriculture. CONAIE’s and Pachacuti’s short-lived experience as a government movement and party was a political disaster. By the end of the first year, the Gutierrez regime allied with multi-national oil companies, the US State Department and the big agro-business firms, promoted a virulent form of neo-liberalism and forced the resignation of most CONAIE-backed officials. By the end of 2003, widespread discontent and internal divisions were exacerbated by an army of US and EU-funded NGOs, which infiltrated the Indian communities.

Venezuela: Major popular revolts in 1989 and 1992 culminated in the election of Hugo Chavez in 1999. Chavez proceeded to encourage mass popular mobilizations in support of referendums for constitutional reform. A US-backed alliance between the oligarchy and sectors of the military mounted a palace coup in April 2002, which lasted only 48 hours before being reversed by a spontaneous outpouring of over a million Venezuelans supported by constitutionalist soldiers in the armed forces. Subsequently, between December 2002 and February 2003, a ‘bosses’ lockout’ of the petroleum industry, designed to cripple the national economy, supported by the Venezuelan elite and led by senior officials in the PDVSA (state oil company), was defeated by the combined efforts of the rank and file oil workers with support from the urban popular classes. The failed US-backed assaults on Venezuelan democracy and President-elect Chavez radicalized the process of structural changes: Mass community-based organizations, new class-based trade union confederations and national peasant movements sprang up and the million-member Venezuelan Socialist Party was formed. Social movement activity and membership flourished, as the government extended its social welfare programs to include free universal public health programs via thousands of clinics, state-sponsored food markets selling essential food at subsidized prices in poor neighborhoods and the development of universal free public education including higher education. At the same time numerous enterprises in strategic economic sectors, such as steel, telecommunications, petroleum, food processing and landed estates, were nationalized.

While the ruling class continues to control certain key economic sectors and highly-paid officials in the state sector retain powerful levers over the economy, the Chavez government and the mass popular movements have maintained the initiative in advancing the struggle throughout the decade from the late 1990’s into the first decade of the new millennium.

The Venezuelan social movements retain their vigor in part because of the encouragement of Chavez’ leadership, but the movements are also held back by powerful reformist currents in the regime, which seek to convert the movements into transmission belts of state policy. The movement-state relationship is fluid and reflects the ebb and flow of the conflict and the threats emanating from the US-backed rightist organizations.

The regime-movement relationship deepened during the crisis period of 1999-2003 and was further strengthened by the rise in oil prices during the world commodity boom of 2003-2008. With the unfolding of the world economic crisis in late 2008-2009, the positive relationship between the state and the movements will be tested.

Bolivia: Bolivia has the highest density of militant social movements of any country in Latin America, including high levels of mine and factory worker participation, community and informal market vender organizations, Indian and peasant movements and public employee unions. The long years of military repression from the early 1970’s to the mid 1980’s weakened the trade unions and was followed by intense application of neo-liberal policies.

By the end of the 1990’s, new large-scale social movements emerged but the locus of activity shifted from the historically militant mining districts and factories to the ‘sub-proletariat’ or ‘popular classes’ engaged in informal, ‘marginal’ occupations, especially in cities like ‘El Alto’. ‘El Alto’, located on the outskirts of La Paz, is densely populated by recent migrants, displaced miners and impoverished Indians and peasants, and received few public services. The new nexus for direct action challenging the neo-liberal regimes emerged from the coca farmers and Indian communities in response to the brutal implementation of US-mandated programs suppressing coca cultivation and the displacement of small farmers in favor of large-scale, agro-business plantations. In the cities, public sector employees, led by teachers, students and factory health worker unions fought neo-liberal measures privatizing services, like water, and cutting the public budgets for education and health care.

The economic crises of the late 1990-2000’s led to major public confrontation in January 2003, followed by a popular revolt in October and insurrection centered in ‘El Alto’ and spread to La Paz and throughout the country. Before being driven from power, the Sanchez de Losada regime murdered nearly seventy community activists and leaders. Hundreds of thousands of impoverished Bolivians stormed the capital, La Paz, threatening to take state power. Only the intervention of the coca farmer leader and presidential hopeful, Evo Morales, prevented the mass seizure of the Presidential palace. Morales brokered a ‘compromise’ in which the neo-liberal Vice President Carlos Mesa was allowed to succeed to the Presidency in exchange for a vaguely agreed promise to discontinue the hated neo-liberal policies of his predecessor, Sanchez de Losada. The tenuous agreement between the social movements and the ‘new’ neo-liberal President survived for two years due to the moderating influence of Evo Morales.

In May-June 2005, a new wave of mass demonstrations filled the streets of La Paz with workers, peasants, Indians and miners forcing Carlos Mesa to resign. Once again, Evo Morales intervened and signed a pact with the Congress calling for national elections in December 2005 in exchange for calling off the protests and appointing a senior Supreme Court judge (Rodriguez) to act as interim President.

Morales diverted the mass social movements into his party’s campaign machinery, undercutting the autonomous direct action strategies, which had been so effective in overthrowing the two previous neo-liberal regimes. This resulted in his election as President in December 2005.

While the economic crisis abated with the boom in commodity prices, President Evo Morales’ social-liberal policies did little to reduce the gross income inequalities, the vast concentration of fertile land in a handful of plantation elite and the dispossession of a majority of Indian communities from their lands. Morales’ policies of forming joint ventures with foreign multinational gas, oil and mining companies did little to end the massive transfer of profits from Bolivia’s natural resources back to the ‘home offices’ of the MNCs. Nevertheless the Morales’ tepid ‘nationalist gestures led to a ‘political-economic’ confrontation with the US-backed Bolivian oligarchy, which was funded by their enormous private profits gained during the ‘commodity boom’.

Argentina: The strongest relationship between a severe economic crisis and a mass popular rebellion took place in Argentina in December 19-20, 2001 and continued throughout 2002.

The conditions for the economic collapse were building up in the 1990s during the two terms of President Carlos Menem. His neo-liberal regime was marked by the corrupt ‘bargain basement’ sale of the most lucrative and strategic public enterprises in all sectors of the economy. The entire financial sector of Argentina was de-regulated, de-nationalized, dollarized and opened up to the worst speculative abuses. The national economic edifice, weakened by the massive privatization policies, was further undermined by rampant corruption and gross pillage of the public treasury. Menem’s policies continued under his successor, President De la Rua, who presided over the banking crisis and the subsequent collapse of the entire national economy, the loss of billions of dollars of private savings and pension funds, a thirty percent unemployment rate and the most rapid descent into profound poverty among the working and middle classes in Argentine history.

In December 2001, the people of Buenos Aires staged a massive popular uprising in front of the Presidential palace with the demonstrators taking over the Congress. They ousted President De la Rua and subsequently three of his would-be presidential successors in a matter of weeks. Hundreds of thousands of organized, unemployed workers blocked the highways and formed community-based councils. Impoverished, downwardly mobile middle class employees and bankrupt shopkeepers, professionals and pensioners formed a vast array of neighborhood assemblies and communal councils to debate proposals and tactics. Banks throughout the country were stormed by millions of irate depositors demanding the restitution of their savings. Over 200 factories, which had been shut down by their owners, were taken over by their workers and returned to production. The entire political class was discredited and the popular slogan throughout the country was: ‘!Que se vayan todos!’ (‘Out with all politicians!’). While the popular classes controlled the street in semi-spontaneous movements, the fragmented radical-left organizations were unable to coalesce to formulate a coherent organization and strategy for state power.

After two years of mass mobilizations and confrontation, the movements, facing an impasse in resolving the crisis, turned toward electoral politics and elected center-left Peronist Kirchner in the 2003 Presidential campaign.

Low Intensity Social Movements: Peru, Paraguay, Colombia, Chile, Uruguay, Central America, Haiti and Mexico

The entire Latin American continent and the neighboring regions witnessed the significant growth of social movement activity of greater or lesser scope. What differentiated these movements from their counterparts in Brazil, Argentina, Ecuador, Bolivia and Venezuela was the absence of political challenges and regime change and the limited scope of their social action.

Nevertheless significant outbreaks of mass popular movements raised fundamental challenges to the reigning neo-liberal hegemony.

In Haiti, a mass popular rebellion to reinstate the democratically elected President Jean Bertrand Aristide, who had been taken hostage and flown into exile by a joint US-EU-Canadian military operation, was brutally repressed by a multinational mercenary force led by a Brazilian general. Subsequent massacres in crowded slums by the occupying troops aborted the resurgence of the popular ‘Lavelas’ movement protesting the foreign imposition of neo-liberal ‘privatization’ and austerity measures.

Mexico witnessed a series of localized rebellions and mass uprisings against the neo-liberal regimes dominating Mexico. In 1994, the Zapatista National Liberal Army (EZLN), based in the Indian communities of rural Chiapas, rose and temporarily succeeded in gaining control of several towns and cities. With the entry of many thousands of Mexican Federal troops, and in the absence of a wider network of support, the Zapatistas withdrew to their jungle and mountain bases. An unstable truce was declared, frequently violated by the government, in which an isolated EZLN continued to exist confined to a remote area in the state of Chiapas. In Oaxaca, an urban rebellion, backed by trade unions, teachers and popular classes in the capital city and surrounding countryside, organized a popular assembly (comuna) and briefly created a situation of ‘dual power’ before being suppressed by the reactionary neo-liberal governor of the state using ‘death squads’ and Mexican troops. Faced with the repressive power of the state, the insurgent popular movements shifted toward the electoral process and succeeded in electing center-left Andres Manual Lopez Obrador in 2006 in the midst of the neo-liberal economic debacle. Their victory was short-lived, with the election results, overturned through massive fraud in the final tally of the votes. Subsequent peaceful protests involving millions of Mexicans eventually lost steam and the movement dissipated.

In Colombia, mass peasant, trade union and Indian protests challenged the neo-liberal Pastrana regime (1998-2002) while the major guerrilla movements (FARC/ELN) advanced toward the capital city. Fruitless peace negotiations, broken off under US pressure and a $5 billion dollar US counter-insurgency program, dubbed ‘Plan Colombia’, heightened political polarization and intensified paramilitary death-squad activity. With the election of Alvaro Uribe, the Colombian regime decimated peasant, trade union and human rights movements as it advanced its neo-liberal policies.

The political effects of the economic crisis at the end of the 1990’s, which had precipitated social movement activity throughout the hemisphere, led to brutal repression in Haiti, Mexico and Colombia in order for the neo-liberal regimes to continue their policies.

In several other Latin American countries, namely Peru and Paraguay, as well as in Central America, powerful rural-based peasant and Indian movements engaged in rural road blockages and land occupations against their governments’ neo-liberal ‘free trade’ agreements with the US. Since these rural movements lacked nation-wide support, especially from the urban centers, their struggles failed to make a significant impact even as their economies crumbled under neo-liberal policies.

Social Movements in the Time of the Commodity Boom

The sharp rise of agricultural and mineral commodity prices between 2003-2008, along with the election of center-left politicians, had a major impact on the most active and dynamic social movements.

In Brazil the election of Lula De Silva (2002-2006) from the putatively center-left Workers Party was backed by all the major social movements, including the MST (Landless Rural Workers Movement) under the mistaken assumption that he would accelerate progressive structural changes like land re-distribution. Instead, Da Silva embraced the entire neo-liberal agenda of his predecessor, President Cardoso, including widespread privatization and tight fiscal policies, which, with the rise of agro-mineral prices, led to a narrowly focused agro-mineral export strategy centered exclusively on large agro-business and mineral extractive elites to the detriment of small businesses and rural producers. The MST’s efforts to influence Da Silva over the past decade(2003-2009) were futile – as state, local and federal governments criminalized the movement’s direct action tactics of land occupation. Lula’s policy of granting subsistence federal food allowances to the extremely poor and his success at co-opting movement leaders, especially from the huge trade union federations, neutralized the landless peasants and organized workers’ capacity to protest and strike. Lula’s policies isolated the MST from its ‘natural’ urban allies in the labor movement.

Lula’s right-turn and the vast increase in export revenues from high commodity prices led to increased social expenditures and reduced the level of activity and support for the MST in its struggle for agrarian reform. While retaining its mass base and continuing its land occupations, the MST no longer had a strategic political ally in its quest for social transformation. Subsequently it pursued more moderate reforms to avoid confrontation with the Lula regime, to which it still offered ‘critical support’.

In Argentina, the massive wave of direct action social movements subsided with the election of Kirchner (2003-2008) and the 7% economic growth rate stimulated by the commodity boom and the recovery from the dramatic economic melt-down of 2001-2002. With the recovery of employment and the return of their savings, the middle class assemblies rapidly disappeared. Kirchner offered subsidies to the unemployed and co-opted their leaders, which led to a sharp reduction of road blockages and membership in the militant unemployed workers organizations. Kirchner won over part of the human rights movement with his policies, which included his public purge of some of the more notorious military and police officials and the granting of subsidies to certain sectors of the human rights movement, including the Madres de la Plaza de Mayo. With the decline of the radicalized movements of 1999-2002, the economic recovery of 2003-2008 led to a partial recovery of trade union activism, whose demands were mostly economic, focusing on the recovery of the workers’ wages and benefits lost during the systemic crisis.

In Bolivia, the economic boom, which began under the neo-liberal regime of Carlos Mesa continued under ‘leftist’ populist Evo Morales. He quickly moderated movement demands as he moved to the center-left. As an alternative to the social movement platform calling for the nationalization of the principal resource sectors exploited by multi-national corporations, Morales promoted ‘joint ventures’ which he demagogically claimed were ‘nationalization without expropriation’. Likewise he answered peasant and Indian demands for agrarian reform by opening up mostly uncultivatable public lands in the Amazon to the landless peasants. By the same token, he protected the most fertile land in the largest privately owned plantations from expropriation by exempting private land, which was classified as performing a ‘social function’. Avoiding structural change, Morales was able to use the windfall of state revenues from the high prices of Bolivian minerals and gas to co-opt movement leaders, provide incremental increases in the minimum wage, finance subsidies to Indian communities, encourage legal, political rights and recognize indigenous jurisdiction over their local communities.

Morales retained his leadership of the coca farmers union and, through his Movement to Socialist Party (MAS), exercised hegemony over the major community-based movements. His close ties with Presidents Castro in Cuba and Chavez in Venezuela set him in radical opposition to Washington’s interventionist policies and its supporters among the five rightist-controlled provinces centered in Santa Cruz. The extreme right gained ascendancy in the latter region and launched a violent racist frontal assault on the Morales government, polarizing the countryside while guaranteeing Morales the continued mass support among the popular classes and movements throughout the country.

In Ecuador, the powerful Indian movement (CONAIE) and its allies in the trade unions supported the neo-liberal regime of Lucio Gutierrez and suffered a severe decline in their power, support and organizational cohesion. The recovery has been slow, hindered by interventions of numerous US/EU funded NGOs.

With the demise of the established social movements, a new urban-based ‘citizens’ movement’ led by Rafael Correa overthrew the venal, corrupt, neo-liberal Gutierrez regime and led the electorate to vote Correa into power in both 2006 and 2009. Correa adapted center-left political positions, financing incremental wage and salary increases and state subsidized cheap credit to small and medium size businesses. He adopted a nationalist position on foreign debt payments and the termination of US military basing rights in Manta. The boom in mining and petroleum prices and ties with oil-rich Venezuela facilitated President Correa’s capacity to fund programs to secure support among the Andean bourgeoisie and the popular classes.

In Venezuela, the economic boom, namely the tripling of world oil prices, facilitated Venezuela’s economic recovery after the crisis caused by the opposition coup and the bosses’ lockout (2002-2003). As a result, from 2004 to 2008 Venezuela grew by nearly 9% a year. The Chavez government was able to generously fund a whole series of progressive socio-economic changes that enhanced the strength and attraction of pro-government social movements. The social movements played an enormous role in defeating opposition referendums, which had called for the impeachment of the President. Peasant organizations were prominent in pressuring recalcitrant bureaucrats in the Chavez government to implement the new agrarian laws calling for land distribution. Trade union militants organized strikes and demonstrations and played a major role in the nationalization of the steel industry. Given the vast increase in state resources, the Chavez government was able to both compensate the owners of the expropriated firms and meet workers’ demands for social ownership.

Summary

The economic boom and the ascendancy of center-left governments led to incremental increases in living standards, a decline of unemployment and the co-optation of some movement leaders — resulting in the decline of radical movement activity and the revival of traditional ‘pragmatic’ trade union moderates. During the economic boom and the rise of the center-left, the only major mass mobilization took the form of right wing movements determined to destabilize the center-left governments in Bolivia and Venezuela.

A comparison of the social movements in countries where they played a major role in political and social change (Venezuela, Ecuador, Brazil and Bolivia) and movements in countries where they were marginalized reveals several crucial differences. First of all, the differences are not found in terms of the quantity of public protests, militant direct actions or number of participants. For example, if one adds up the number of social movement protests in Mexico, Peru, Colombia and Central America, they might equal or even surpass the social actions in Brazil, Argentina and Bolivia. What was different and most politically significant was the quality of the mass action. Wherever they were of marginal significance, the organizations were fragmented, dispersed and without significant national leadership or structure and without any political leverage on the institutions of national power. In contrast, influential social movements operated as national organizations, which coordinated social and political action, centralized and capable of reaching the nerve centers of political power – the capital cities (La Paz, Buenos Aires, Quito and to a lesser degree Sao Paolo). To one degree or another, the high impact social movements combined rural and urban movements, had political allies in the party system and bridged cultural barriers (linking indigenous and mestizo popular classes).

World Economic Crisis and Social Movements – 2008 Onward

Beginning in late 2008 and continuing in 2009 the world economic crisis spread across Latin America. The crisis came later to Latin America and with less initial severity than in the US or EU. Because it is an ongoing process, the full socio-political implications and economic impact is still far from clear. What we can observe is that, at least initially, the current crisis has not provoked anything like the mass upheavals and the surge of radical social movements that we witnessed during the crisis beginning in 2001.

Gross Domestic Product
($ Millions of dollars, constant 2000 prices)
Annual growth rates
Country	2007	2008	2009*
Argentina	8.7	7.0	1.5
Bolivia	4.6	6.1	2.5
Brazil	5.7	5.1	-0.8
Chile	4.7	3.2	1.0
Colombia	7.5	2.6	0.6
Costa Rica	7.8	2.6	3.0
Cuba	7.3	4.3	1.0
Ecuador	2.5	6.5	1.0
El Salvador	4.7	2.5	-2.0
Guatemala	6.3	4.0	1.0
Haiti	3.4	1.3	2.0
Honduras	6.3	4.0	2.5
Mexico	3.3	1.3	-7.0
Nicaragua	3.2	3.2	1.0
Panama	11.5	9.2	2.5
Paraguay	6.8	5.8	3.0
Peru	8.9	9.8	2.0
Dominican Republic	8.5	5.3	1.0
Uruguay	7.6	8.9	1.0
Venezuela	8.9	4.8	0.3
Sub-total Latin America	5.8	4.2	-1.9
Caribbean	3.4	1.5	-1.2
Latin American and the Caribbean	5.8	4.2	-1.9

* Projections
Source: ECLAC

If anything, we have seen a surge of right-wing movements and electoral organizations in countries, like Argentina, and a US-backed right-wing military coup backed by the rightist business associations in Honduras, and the continued ‘pragmatic’ behavior of mass social movements in Brazil, Bolivia and Ecuador.

The only exception is in Peru where the organized Indian communities in the Amazonian region have engaged in armed mass confrontations with the US-backed, right-wing regime of Alan Garcia. The Amazonian Indians responded to a series of Government decrees, which handed mineral and gas exploitation rights on Indian lands to foreign mining and energy corporations. From a historical perspective, the struggle was ‘conservative’, in so far as it pitted indigenous communities defending traditional use and ownership of lands and resources against the modern economic predators and the the neo-liberal state.

The Lumpen-Bourgeoisie: The Triple Alliance of the Neo-Liberal State, Narco-traffickers and the Unemployed Poor

The least studied, but most dynamic, and, possibly best organized social movement in Latin America today is the right-wing drug trafficking movement. Headed by a powerful narco-bourgeoisie, with strong ties to the military and neo-liberal state apparatus and with armed lumpen-cadres drawn from the urban unemployed and landless peasantry, the ‘Lumpen’ Movement has created a powerful geographic and social presence in Mexico, Colombia, Peru, Bolivia, Guatemala, Honduras, El Salvador and elsewhere.

It was the agrarian neo-liberal policies that prepared the ground for the ‘mass base’ of the rightist narco-movement. The promotion of mechanized agro-export agriculture in Colombia, Mexico, Peru and Central America uprooted millions. State terror and paramilitary death squads drove millions of peasant families from the land and into urban slums. The large-scale importation of cheap, subsidized agricultural produce from the US wiped out many thousands of small-scale family farms. The stagnant of manufacturing sector was unable to absorb the migrants into labor-intensive work. This created massive numbers of young rural unemployed landless and urban workers, who could be either recruits for progressive social movements or recruits for the narco-industry. Cultivating coca and opium, refining and smuggling the drugs and soldiering for the drug lords provided a livelihood for these desperate young men and women. The deep economic crisis and stagnation of the 1990’s and early 2000’s created a large mass of young unemployed and under-employed workers in the cities ripe for employment by the narco-gangs who paid a living wage for an often deadly occupation.

The links between right-wing political parties, banking, business and landowner associations has been demonstrated repeatedly throughout Latin America. In Colombia, drug traffickers have become large landowners after their death squads devastated peasant communities suspected of supporting leftists or progressive organizations. ‘Sicarios’ or ‘hit-men’ are mostly young men from working or peasant class background who ‘work’ for business leaders and multi-national corporations as assassins. They have killed hundreds of trade union and peasant and Indian leaders each year in Colombia alone. Over a third of the members of the Colombian Congress, the principle backers of President Uribe, have been financed by the drug cartels. Uribe has long-term ties with prominent narco-traffickers and death-squad militia leaders.

In Mexico, drug traffickers have recruited widely among the impoverished peasants. In many Mexican states the narcos have purchased the services of thousands of government officials from top to bottom. In the absence of employment and a social safety-net, many of the poor find work in the narco-trade. Narco-traffickers have established alliances and business associations with upper class financial groups engaging in joint ‘philanthropic’ activities, such as handing out cash and delivering needed services to the poor. Narco-traffickers eventually wash their illegal earnings through major banks in the US, Canada and Europe and then invest in real estate, tourist complexes and landed properties.

Narco-trafficker organizations and death squads have worked closely with rightwing movements in Sta. Cruz (Bolivia), with rightist political parties in El Salvador, Guatemala and Honduras, as well as in Mexico and Colombia.

The ‘lumpenization’ process operates via two routes: In some cases, young unemployed males are directly recruited via neighborhood organizations; in other cases the dispossessed, bankrupt and downwardly mobile farmers and long-term unemployed workers are gradually forced into the ‘illegal’ labor market.

The long-term, large-scale process of stagnation, despite the periods of export growth, marginalize the rural poor and accelerate their impoverishment without generating compensatory stable, urban employment paying a living wages. The ‘lumpenization’ of these displaced, marginalized peasants and workers, produced by the crisis and class polarization, is accompanied by the rise of a ‘lumpen culture’ with its own hierarchical structures, where the few at the ‘top’ develop ties to the economic and state elite and the masses at the ‘bottom’ aspire to a degenerate kind of middle-class consumerist life-style.

By the first decade of the new millennium, the rightist lumpen-narco movement far exceeded the progressive popular movements in terms of power and influence in Mexico, Colombia, Central America and some countries in the Caribbean, like Jamaica. The relationship between the ‘legal’ rightist and the ‘narco’ rightist movements is one of collaboration and conflict: They join forces to oppose powerful rural and trade union movements and progressive electoral regimes. The lumpen-narcos provide the ‘shock troops’ to assassinate progressive leaders, including elected officials and to terrorize supporters among the peasantry and urban poor. On the other hand, violent conflict between the rightists can break out at any time, especially when the lumpen-elite encroach on the state prerogatives, business interests, ties with imperial drug enforcement agencies and raise questions about the legitimacy of the bourgeois class.

Latin America’s Social Movements and the Economic Recession/Depression

Economic crises have multiple and diverse impacts on the popular classes and social movements.

The profound economic crisis of the 1990’s and first years of 2000 radicalized the popular classes and led to widespread ‘high impact’ protests and national rebellions, which overthrew incumbent neo-liberal regimes and replaced them with ‘center-left’ regimes. At the same time the social changes, implicit in the neo-liberal crisis, led to a downwardly mobile urban and rural sector. This formed the basis for the growth of dynamic leftist social movement led by popular mass-based leaders and rightist movements led by lumpen-narco chiefs and supported by the economic elites. The conservative, far-right confronted popular social movements from positions in the state and through the military and para-military death squads.

The commodity boom and the ascendancy of the ‘center-left’ regimes led to the ‘moderation’ of demands from below in the face of cooptation from above. Large-scale job creation and poverty programs, cheap credit and incremental wage and salary increases all contributed to moderating mass politics. The trade unions re-emerged as central actors and collective bargaining replaced mass direct action. Rural movements engaged in militant struggle were relatively isolated. The key political factor in this period was the demobilization of the popular classes, the decline of the direct action movements and the restoration of the power of the business, land-owning and mining elite based on their strengthened economic position. The rejuvenated Right took the lead in directing their own ‘direct action’ movements in Bolivia, Argentina and Central America.

As the crisis of 2008-2009 unfolded, the progressive movements were slow to respond, having been ‘under the tent’ of the center-left electoral regimes. Since these regimes were now being held responsible for the fallout of the commodity crash, the left social movements were in a weak position and unable to pose any radical alternatives.

It is important to remember that the world economic crisis had hit the ‘North’ (US/EU) earlier and harder than in Latin America. In Latin American, the social impact was weaker – at first. Unemployment grew mainly during the last months of 2008. The gradual unfolding of the crisis contrasted with the system-wide crash of the late 1990’s-2002, which precipitated mass rebellions. In addition, as a consequence of the earlier crisis, capital and finance controls had been imposed that limited the spread of the toxic assets and financial crisis from the US to Latin America.

Moreover, Latin American countries are diversifying their trade, especially toward Asia including China, which continues to grow at 8% a year. Diversification and financial controls limited the impact of the US financial melt-down on the Latin American economies. In addition, the early ‘stimulus’ measures, taken in response to the first signs of the crisis, had the effect of temporarily ameliorating the impact of the global recession/depression on Latin America.

Nevertheless as the depression deepens in the North, Latin America’s trade has plunged, and the region has fallen into negative growth. As a result, unemployment is growing in both the export sectors as well as in production for the domestic economy. In response, the right-wing parties and leaders blame the center-left regimes. Moves are underway in Argentina, Bolivia and Ecuador to oust these regimes through elections or through coups, backed by US President Obama’s ‘rollback’ global strategy. The July 2009 coup in Honduras, covertly backed from the strategic US military base in the country, is the first sign that Washington is moving its military client to overthrow the new independent ‘center-left’ regimes in the region. This is particularly true among the Central American and Caribbean countries linked with Venezuela in the new integration programs, such as ALBA and PetroCaribe.

The first manifestations of progressive mass popular protests in the current economic recession are not directly related to the economic decline. In Peru, the indigenous Amazonian communities organized militant road blockages and confrontations with the military resulting in over one hundred dead and wounded. This mass movement developed in response to the Peruvian government’s granting concessions of mining exploitation rights to foreign multi-nationals, an infringement of the rights of the indigenous people to their lands in the Amazonian region. Demonstrations in solidarity with the Amazonian Indians occurred in most cities, including Lima. The Congress, fearing a mass uprising, temporarily canceled the concessions. This was a major victory for the indigenous communities. Moreover, the success of the Amazonian Indian communities has detonated widespread sustained strikes and protests in most of the major cities of Peru, in response to economic decline resulting from falling commodity prices.

The sustained popular struggle in Honduras is in response to the military coup overthrowing President Zelaya, a moderate reformer pursuing an independent foreign policy. Led by the urban public sector trade unions and peasant movements, the struggle has combined democratic, nationalist and populist demands.

Apart from these two mass popular movements, the economic crisis has yet to evoke mass radical rebellions, like those which took place during earlier crises between 2000-2003. We can posit several possible explanations or hypotheses for the contrasting responses of the mass movements to economic crises.

Hypotheses

1. The full impact of the world crisis has yet to hit the popular classes – it began late in

2008 and only began to register increased unemployment in the first quarter of 2009.

2. The current crisis, at first, did not hit the lower middle classes, public employees and skilled workers. It has been highly segmented, thus weakening cross class solidarity and alliances present in earlier crises.

3. Unlike the previous period, the crisis takes place in many countries, which are ruled by ‘center left’ regimes with an organized social base backed by the social movements. These regime-movement linkages neutralize mass protests, out of fear of a return to the hard right.

4. The mass movements on the left have responded to the crisis with relative passivity – in part because the governments have intervened with economic stimulus measures and some social ameliorative policies. The continuation and deepening of the crisis and the inadequate coverage of moderate public interventions could eventually lead to the resurgence of mass struggles.

5. The increasing economic vulnerability of the incumbent center-left regimes and the relative passivity of the progressive social movements has opened political space and opportunities for rightwing mass mobilizations, combining electoral and street politics to build a base for a return to power.

6. The crisis will likely accelerate the lumpenization process, as long-term unemployment sets in and if alternate movements fail to organize the chronically unemployed in consequential struggles.

7. As the bourgeoisie and its political supporters find few legitimate sources for profiteering available, they will likely serve as intermediaries and ‘protectors’ of the narco-traffickers and other criminal syndicates and rely on them to eliminate left social movement leaders and activists.

8. The rise of the ‘lumpen-Right’ may lead to a virtual ‘dual power’ situation in which legitimate and illegitimate power configurations cooperate in repressing social movements and compete for influence.

9. The relative passivity of the social movements is likely a transitory phenomenon, influenced by the convergence of circumstances. If the crisis deepens and extends over time and rightist regimes return to power, recent past historical experience strongly suggests that the massive increase in poverty and unemployment, combined with repressive rightist regimes, could lead to mass rebellions on the part of the previously ‘passive’ popular classes.

But the biggest outrage is what’s happened in public.

We Made Goldman Sachs what it is Today

If it weren’t for our tax dollars and the cash flow that citizens provide for the United States Treasury, Goldman Sachs would have joined Bear Sterns and Lehman Brothers in the graveyard of financial high flyers.
But they were saved. Bush Secretary of the Treasury Henry Paulson came to the rescue when he assured that one of Goldman Sachs most important customers, the AIG group, survived a financial mess of its own creation.

Our original contribution was in the $20 billion range but then our elected representatives helped Goldman even more when they jacked up the subsidy to $85 billion. That’s enough money to hire a workforce of one million people at a salary of $60,000 a year, plus benefits.

Had AIG tanked, Goldman would have been in very serious trouble. In September 2008, Paulson, a former CEO of Goldman met with Tim Geithner, soon to be President Obama’s Secretary of the Treasury, when Geithner headed up the New York Federal Reserve Bank. Goldman’s CEO was “the only Wall Street chief executive” at the critical meeting.

This back room meeting was exposed by Gretchen Morgenson in an outstanding New York Times article: “Although it was not widely known, Goldman, a Wall Street stalwart that had seemed immune to its rivals’ woes, was A.I.G.’s largest trading partner … A collapse of the insurer threatened to leave a hole of as much as $20 billion in Goldman’s side, several of these people said.”

While Lehman Brothers got nothing, AIG got some serious cash and survived, thus assuring Goldman’s survival. Secretary Paulson and Geithner came through with the guarantees. When Paulson left with Bush, Geithner showed up to take Paulson’s place at Treasury. The beat goes on.

It’s The Money Party at work. They have no permanent friends or permanent enemies, just permanent interests. Goldman’s interest was turning a sow’s ear, the financial collapse that they helped create, into a silk purse. Mission accomplished.

Goldman’s chief financial officer attributed the $39 million a day income to the firm’s reputation for “very, very strong culture of risk management.” Is he kidding? Their success is based on that $85 billion of our money that saved their asses. Goldman’s average $1.0 million per employee bonuses wouldn’t exist were it not for citizens paying for their survival.

Have you received your thank you card from Goldman Sachs yet?
Don’t hold your breath. But you can be sure that when they’ve screwed up what people are trying to pass off as a recovery, they’ll be back at our Treasury Department again for the next big bailout courtesy of you know who.

We have no government left. It’s simply a welfare agency for the most favored failed financial giants; a paper money producer to wrap the ugly truth in fictional dollars; a subprime governance scheme developing Potemkin Villages everywhere.

It’s socialism for the ultra rich and survival of the fittest for the rest of us.

Millions get sick, suffer and die without medical coverage. But Goldman bags $39 million a day in the Wall Street casino. Millions of hardworking citizens lose their jobs and can’t find work. But Goldman gives out bonuses averaging $1.0 million per employee. Their survival is based entirely on our assistance but when citizens need some help, there’s no room at the inn.

And count on it, nobody in power will do a single thing about it. Not one thing.

Fairness, equity, civility, good taste, discretion, opportunity, even the least degree of common decency — all dead — thanks to The Money Party.