The Inquirer used to rake in Pulitzers, but serious reporting required a sustained investment of money, time and intellect, so when its then-owner, Knight Ridder, balked at this, the Philadelphia newspapers went into their death spiral. This is no local phenomenon, because the entire country is suffering from the dearth of hard-hitting news about anything that really matters: Wall Street and DC corruption; constant lying from our government; an endless war that’s bankrupting the nation and begging for blowbacks and, soon enough, riots; or the accelerating collapse of the economy, and thus, your way of life. In their stead, encyclopedic sports coverage and celebrity gossips, as purveyed by various moronic outfits. Today’s earthquaking burp from Yahoo!, “The prince says an unusual noise kept him awake the night before his nuptials.”

Divorced from local news and conversations, rootless and detached from what’s closest to them, most Americans are dragnetted into a national matrix as defined by cynical or sinister mind fuckers who care nothing about them or their individual communities. Yahoo! is run out of San Jose, long a cultural wasteland, but it was the home of Gary Webb, an American hero who broke the story about the CIA pushing crack cocaine to LA blacks to fund its covert war in Nicaragua. For being an excellent and ethical journalist, Webb was ran out of a job, then hounded into committing suicide, the official story, or simply killed. In any case, what happened to Webb is an apt parable for an America that punishes integrity and bravery, and rewards dishonesty and cowardice. In such a society, degradation is guaranteed.

Yesterday, I walked by the Daily News and Inquirer headquarters and saw, in its window, a blown-up cover about Chase Utley, an aging and often-injured second baseman. Like the country itself, the city is unraveling, but let’s fret over the Phillies, Sixers, Flyers and Eagles. Hey, how about dem Birds! Across the street, I spotted something unusual, however: an upside down 13-star flag in front of the Steak & Bagel Train, a diner in business since 1907. We’re due for another American Revolution, wouldn’t you say?

As I photographed this provocation, a security guard from the adjacent building marched over, “Hey, I didn’t even see that! Somebody is going to burn his place down. I’ve got to ask him tomorrow what’s up with that.” He also informed me that a flag cannot be up at night, unlit, and that he had a flag on his front porch, with a spot light shining on it.

“It’s freedom of speech,” I said to this security dude. “He probably thinks the country is in distress.”

“Yeah, but he’s playing with fire, buddy. Somebody is going to burn his place down.”

So for being a good enough citizen to rouse your compatriots from their slumber, you and yours may be torched, or, like Bradley Manning, held in solitary confinement and stripped naked each night.

Don’t rock the USS Full Spectrum Blowhard Righteous Recovery, you terrorist asshole, though this ship has neither fuel nor compass, nor even rats, not unless you count the Congressmen, Senators, Cabinet Members and Supreme Court Justices surrounding an oil-slick and blood splattered POTUS.

A block from the newspaper office, I saw a sign common in many distressed neighborhoods, “PROJECT FUNDED BY THE American Recovery and Reinvestment Act.” I wasn’t sure what the project was, but the sign itself had been well tagged by graffiti, plus some clever guerilla art, a depiction of the Fountain of Youth.

Seen from the side, a hag, with cane and sagging breasts, enters a fountain, then emerges as a lovely young lady, proudly frontal in her nudity. The hag half is shadowed by a vulture and littered with thorny weeds, while the sexy chick half is serenaded by song birds and blooming with flowers. No spring chicken myself, I wouldn’t mind a personal recovery through a dip in some miraculous pool, but as with Juan Ponce de León and his dolorous dick, to believe in magic is to court disaster.

Speaking of the paranormal, let’s walk a few blocks up Broad Street to check out the hulking ruins of the Father Divine Hotel. Few remember him now, but Father Divine was once nationally famous. Known as America’s first cult leader, and an inspiration to Jim Jones, Father Divine inspired his followers with the commonsensical, such as being self-reliant and debt-free; to the idealistic, such as being color blind, even to yourself; to the puritanical, such as abstaining from tobacco, alcohol and gambling; to the weirdly ascetic, such as total celibacy even among married couples. Though he declared himself a living god, and his second wife, four decades his junior, to be the reincarnation of his first wife, his followers believed everything their 5’2” leader said because he was supremely confident and a charismatic speaker, and when he died, many of his devotees even thought he would rise again. It is telling that Father Divine’s movement peaked during the Great Depression.

Now that we’re entering what promises to be an even greater period of material and spiritual despair, which Father Divine will rise up to save the desperate and gullible? Instead of preaching self-control, racial harmony and charity, what bitter impulses will they unleash? The magical Fountain of Recovery will likely gush blood.

Seventy-seven-years-old, Jimbo had a vending business selling pretzels, among other stuff, and worked at a factory making vent windows for Ford trucks. Like me, he has also washed windows, making a few bucks per job. In winter, water would sometimes freeze nearly as soon as it’s splashed on the pane, but thanks to global warming, this is becoming less of a problem.

A Chicago bus stop billboard: “I’m all for global warming if it will keep the city from being so damn cold.” Across the street is the Greenway Self Park garage, with a green VW bug emitting green leaves instead of ozone-killing exhaust on its very cool, I guess, sign.

Born and raised in Kensington, Jimbo still lives there. He gets $780 a month in Social Security, but his rent eats up $760. So much for piece-of-shit Kensington?! What in the fuckin’ UN is this world coming to? If I want to be chased around by goons toting submachine guns, then body slammed onto the ground, I’ll go to Chicago during the NATO summit.

With only 20 bucks a month to diddle with, Jimbo must beg, though he can also move to a cheaper neighborhood, such as the exburbs of Kabul or Baghdad, for example, but since he’s already well into his post-Cialis years, I don’t think Blackwater would hire him.

“Jimbo,” I said, “I keep hearing that black women are the most generous at giving money on the streets. Is that true?”

“Absolutely!”

“Why do you think that is?”

“I don’t know, but I think it’s because they’re more used to taking care of people.”

“Hummm. What about guys in suits? Do they give you money?”

“Those guys are the worst! Most of them won’t come near me because they think I might give them a disease or something.”

“That’s interesting.”

“The regular people, the working class people, are the ones who give me money. Black people give me money.”

“All black people, or just black women?”

“All black people, but, like you said, black women are the best. When I grew up in Kensington, I was told that black are this and that, that they’re no good, but now that I have to beg, I can tell you that black people treat me very nice.”

For over a century, Kensington had dozens of factories cranking out machine parts, carpets, textiles and glass. Now, it is an unholy mess, like all former industrial enclaves across America. Jimbo, “Many of my neighbors in Kensington get a government check at the beginning of each month, then a week later, they’re broke. You should go up there and see how it is.”

“I’ve been up there, many times.”

“You’ll see how how bad it is, the drug dealing.”

“And the prostitution.”

“Yes, that too. When people are broke, they’ll do anything. There used to be so many factories up there, but they’re all gone.”

In Kensington, a flyer is taped to a pillar of the elevated train, “HEALTH ALERT!!! THERE IS A prostitute By the name of SHERI Pitts that is HIV Positive. If you know her whereabouts please contact the Health Department. Description: 5’4” 95 lbs Blk Female. Tatoo on left Arm “Chocolate Sheri.” Tattoo on Right (Butt) Cheek “Sexy.” #173-60-6501. She NEEDS to be Stopped. She is spreading this Desease!!!”

The next time you’re in Kensington to help out the local economy, shine a flash light on her left cheek, and if you can make out “Sexy” in tribal, shaman, precious, voodoo or gothic script, just calmly smile and say, “I’m sorry, Chocolate, but it doesn’t look like our loving union can be gracefully consummated this night, or the next, or ever, though as a member of NATO, that master alliance of pale and well-armed people, I will try and try again. Oh, fuck it, let’s just fuck! Since it was me who made you sick in the first place! We’re destined for this death embrace, you maroon terrorist seductress!”

I’m sorry to use intercourse as an analogy for aggression, but I was railroaded into it by English itself, for what other language is so promiscuous with such couplings, as in I will fuck you up, fuck you over or fuck with you? In English, to fuck is to hate, if not kill, as in fuck Libya, Syria and Iran, or, if you prefer, fuck Israel, Wall Street, the CIA and the Pentagon!

In Chicago, white masters are plotting on how to fuck with us all, including the lower whites. As expected, they’ve framed a few white youths and locked them up on bogus charge of terrorism. This is to condition the public to see poor whites, especially those with tattoos, nose rings or dread locks, as also the enemy. Like brown foreigners and native blacks, young disaffected whites will be branded as indiscriminate mass murderers who just want to blow things up because they hate “our way of life.” Thanks to the FBI, they have been prevented from collapsing a bridge in Cleveland and torching Obama’s Chicago campaign headquarters, but they might go after your local strip mall or International House of Pancakes next. If not dealt with most severely, they’ll splatter corn-syrup all over your transfat-padded faces! Instead of getting a job giving blow jobs, for example, these confused whiners would rather enlist in Occupy, which, the gobblement will soon tell you, is actually an offshoot of Al Qaeda supported by Iran and a trust fund left behind by Bin Laden.

Meanwhile, Jimbo begs because he can’t pay his bills otherwise. He also admits that he likes to sit in a cheapo restaurant every now and then to enjoy a $7 hoagie or cheesesteak, some fried chicken or a plate of pork lo mein, “So I can live like a real white man!”

Today, material conditions for the vast majority of working people have sharply deteriorated as the capitalist class shifts the entire burden of the crisis and the recovery of their profits onto the backs of wage and salaried classes. One of the striking aspects of this sustained and on-going roll-back of living standards is the absence of a major social upheaval so far. Greece and Spain, with over 50% unemployment among its 16-24 year olds and nearly 25% general unemployment, have experienced a dozen general strikes and numerous multi-million person national protests; but these have failed to produce any real change in regime or policies. The mass firings and painful salary, wage, pension and social services cuts continue. In other countries, like Italy, France, and England, protests and discontent find expression in the electoral arena, with incumbents voted out and replaced by the traditional opposition. Yet throughout the social turmoil and profound socio-economic erosion of living and working conditions, the dominant ideology informing the movements, trade unions and political opposition is reformist: Issuing calls to defend existing social benefits, increase public spending and investments, and expand the role of the state where private sector activity has failed to invest or employ. In other words, the left proposes to conserve a past when capitalism was harnessed to the welfare state.

The problem is that this ‘capitalism of the past’ is gone and a new more virulent and intransigent capitalism has emerged forging a new worldwide framework and a powerful entrenched state apparatus immune to all calls for ‘reform’ and reorientation. The confusion, frustration, and misdirection of mass popular opposition is, in part, due to the adoption by leftist writers, journalists, and academics of the concepts and language espoused by its capitalist adversaries: language designed to obfuscate the true social relations of brutal exploitation, the central role of the ruling classes in reversing social gains and the profound links between the capitalist class and the state. Capitalist publicists, academics and journalists have elaborated a whole litany of concepts and terms which perpetuate capitalist rule and distract its critics and victims from the perpetrators of their steep slide toward mass impoverishment.

Even as they formulate their critiques and denunciations, the critics of capitalism use the language and concepts of its apologists. Insofar as the language of capitalism has entered the general parlance of the left, the capitalist class has established hegemony or dominance over its erstwhile adversaries. Worse, the left, by combining some of the basic concepts of capitalism with sharp criticism, creates illusions about the possibility of reforming ‘the market’ to serve popular ends. This fails to identify the principle social forces that must be ousted from the commanding heights of the economy and the imperative to dismantle the class-dominated state. While the left denounces the capitalist crisis and state bailouts, its own poverty of thought undermines the development of mass political action. In this context the ‘language’ of obfuscation becomes a ‘material force’ – a vehicle of capitalist power, whose primary use is to disorient and disarm its anti-capitalist and working class adversaries. It does so by co-opting its intellectual critics through the use of terms, conceptual framework and language which dominate the discussion of the capitalist crisis.

Key Euphemisms at the Service of the Capitalist Offensive

Euphemisms have a double meaning: What terms connote and what they really mean. Euphemistic conceptions under capitalism connote a favorable reality or acceptable behavior and activity totally dissociated from the aggrandizement of elite wealth and concentration of power and privilege. Euphemisms disguise the drive of power elites to impose class-specific measures and to repress without being properly identified, held responsible and opposed by mass popular action.

The most common euphemism is the term ‘market’, which is endowed with human characteristics and powers. As such, we are told ‘the market demands wage cuts’ disassociated from the capitalist class. Markets, the exchange of commodities or the buying and selling of goods, have existed for thousands of years in different social systems in highly differentiated contexts. These have been global, national, regional and local. They involve different socio-economic actors, and comprise very different economic units, which range from giant state-promoted trading-houses to semi-subsistence peasant villages and town squares. ‘Markets’ existed in all complex societies: slave, feudal, mercantile and early and late competitive, monopoly industrial and finance capitalist societies.

When discussing and analyzing ‘markets’ and to make sense of the transactions (who benefits and who loses), one must clearly identify the principle social classes dominating economic transactions. To write in general about ‘markets’ is deceptive because markets do not exist independent of the social relations defining what is produced and sold, how it is produced and what class configurations shape the behavior of producers, sellers and labor. Today’s market reality is defined by giant multi-national banks and corporations, which dominate the labor and commodity markets. To write of ‘markets’ as if they operated in a sphere above and beyond brutal class inequalities is to hide the essence of contemporary class relations.

Fundamental to any understanding, but left out of contemporary discussion, is the unchallenged power of the capitalist owners of the means of production and distribution, the capitalist ownership of advertising, the capitalist bankers who provide or deny credit and the capitalist-appointed state officials who ‘regulate’ or deregulate exchange relations. The outcomes of their policies are attributed to euphemistic ‘market’ demands which seem to be divorced from the brutal reality. Therefore, as the propagandists imply, to go against ‘the market’ is to oppose the exchange of goods: This is clearly nonsense. In contrast, to identify capitalist demands on labor, including reductions in wages, welfare and safety, is to confront a specific exploitative form of market behavior where capitalists seek to earn higher profits against the interests and welfare majority of wage and salaried workers.

By conflating exploitative market relations under capitalism with markets in general, the ideologues achieve several results: They disguise the principle role of capitalists while evoking an institution with positive connotations, that is, a ‘market’ where people purchase consumer goods and ‘socialize’ with friends and acquaintances. In other words, when ‘the market’, which is portrayed as a friend and benefactor of society, imposes painful policies presumably it is for the welfare of the community. At least that is what the business propagandists want the public to believe by marketing their virtuous image of the ‘market’; they mask private capital’s predatory behavior as it chases greater profits.

One of the most common euphemisms thrown about in the midst of this economic crisis is ‘austerity’, a term used to cover-up the harsh realities of draconian cutbacks in wages, salaries, pensions and public welfare and the sharp increase in regressive taxes (VAT). ‘Austerity’ measures mean policies to protect and even increase state subsidies to businesses, and create higher profits for capital and greater inequalities between the top 10% and the bottom 90%. ‘Austerity’ implies self-discipline, simplicity, thrift, saving, responsibility, limits on luxuries and spending, avoidance of immediate gratification for future security – a kind of collective Calvinism. It connotes shared sacrifice today for the future welfare of all.

However, in practice ‘austerity’ describes policies that are designed by the financial elite to implement class-specific reductions in the standard of living and social services (such as health and education) available for workers and salaried employees. It means public funds can be diverted to an even greater extent to pay high interest rates to wealthy bondholders while subjecting public policy to the dictates of the overlords of finance capital.

Rather than talking of ‘austerity’, with its connotation of stern self-discipline, leftist critics should clearly describe ruling class policies against the working and salaried classes, which increase inequalities and concentrate even more wealth and power at the top. ‘Austerity’ policies are therefore an expression of how the ruling classes use the state to shift the burden of the cost of their economic crisis onto labor.

The ideologues of the ruling classes co-opted concepts and terms, which the left originally used to advance improvements in living standards and turned them on their heads. Two of these euphemisms, co-opted from the left, are ‘reform’ and ‘structural adjustment’. ‘Reform’, for many centuries, referred to changes, which lessened inequalities and increased popular representation. ‘Reforms’ were positive changes enhancing public welfare and constraining the abuse of power by oligarchic or plutocratic regimes. Over the past three decades, however, leading academic economists, journalists and international banking officials have subverted the meaning of ‘reform’ into its opposite: it now refers to the elimination of labor rights, the end of public regulation of capital and the curtailment of public subsidies making food and fuel affordable to the poor. In today’s capitalist vocabulary ‘reform’ means reversing progressive changes and restoring the privileges of private monopolies. ‘Reform’ means ending job security and facilitating massive layoffs of workers by lowering or eliminating mandatory severance pay. ‘Reform’ no longer means positive social changes; it now means reversing those hard fought changes and restoring the unrestrained power of capital. It means a return to capital’s earlier and most brutal phase, before labor organizations existed and when class struggle was suppressed. Hence ‘reform’ now means restoring privileges, power, and profit for the rich.

In a similar fashion, the linguistic courtesans of the economic profession have co-opted the term ‘structural’ as in ‘structural adjustment’ to service the unbridled power of capital. As late as the 1970’s, ‘structural’ change referred to the redistribution of land from the big landlords to the landless; a shift in power from plutocrats to popular classes. ‘Structures’ referred to the organization of concentrated private power in the state and economy. Today, however, ‘structure’ refers to the public institutions and public policies, which grew out of labor and citizen struggles to provide social security, for protecting the welfare, health and retirement of workers. ‘Structural changes’ now are the euphemism for smashing those public institutions, ending the constraints on capital’s predatory behavior and destroying labor’s capacity to negotiate, struggle or preserve its social advances.

The term ‘adjustment’, as in ‘structural adjustment’ (SA), is itself a bland euphemism implying fine-tuning , the careful modulation of public institutions and policies back to health and balance. But, in reality, ‘structural adjustment’ represents a frontal attack on the public sector and a wholesale dismantling of protective legislation and public agencies organized to protect labor, the environment and consumers. ‘Structural adjustment’ masks a systematic assault on the people’s living standards for the benefit of the capitalist class.

The capitalist class has cultivated a crop of economists and journalists who peddle brutal policies in bland, evasive and deceptive language in order to neutralize popular opposition. Unfortunately, many of their ‘leftist’ critics tend to rely on the same terminology.

Given the widespread corruption of language so pervasive in contemporary discussions about the crisis of capitalism the left should stop relying on this deceptive set of euphemisms co-opted by the ruling class. It is frustrating to see how easily the following terms enter our discourse:

Market discipline – The euphemism ‘discipline’ connotes serious, conscientious strength of character in the face of challenges as opposed to irresponsible, escapist behavior. In reality, when paired with ‘market’, it refers to capitalists taking advantage of unemployed workers and using their political influence and power lay-off masses workers and intimidate those remaining employees into greater exploitation and overwork, thereby producing more profit for less pay. It also covers the capacity of capitalist overlords to raise their rate of profit by slashing the social costs of production, such as worker and environmental protection, health coverage and pensions.

Market shock – This refers to capitalists engaging in brutal massive, abrupt firings, cuts in wages and slashing of health plans and pensions in order to improve stock quotations, augment profits and secure bigger bonuses for the bosses. By linking the bland, neutral term, ‘market’ to ‘shock’, the apologists of capital disguise the identity of those responsible for these measures, their brutal consequences and the immense benefits enjoyed by the elite.

Market Demands – This euphemistic phrase is designed to anthropomorphize an economic category, to diffuse criticism away from real flesh and blood power-holders, their class interests and their despotic strangle-hold over labor. Instead of ‘market demands’, the phrase should read: ‘the capitalist class commands the workers to sacrifice their own wages and health to secure more profit for the multi-national corporations’ – a clear concept more likely to arouse the ire of those adversely affected.

Free Enterprise – An euphemism spliced together from two real concepts: private enterprise for private profit and free competition. By eliminating the underlying image of private gain for the few against the interests of the many, the apologists of capital have invented a concept that emphasizes individual virtues of ‘enterprise’ and ‘freedom’ as opposed to the real economic vices of greed and exploitation.

Free Market – A euphemism implying free, fair and equal competition in unregulated markets glossing over the reality of market domination by monopolies and oligopolies dependent on massive state bailouts in times of capitalist crisis. ‘Free’ refers specifically to the absence of public regulations and state intervention to defend workers safety as well as consumer and environmental protection. In other words, ‘freedom’ masks the wanton destruction of the civic order by private capitalists through their unbridled exercise of economic and political power. ‘Free market’ is the euphemism for the absolute rule of capitalists over the rights and livelihood of millions of citizens, in essence, a true denial of freedom.

Economic Recovery – This euphemistic phrase means the recovery of profits by the major corporations. It disguises the total absence of recovery of living standards for the working and middle classes, the reversal of social benefits and the economic losses of mortgage holders, debtors, the long-term unemployed and bankrupted small business owners. What is glossed over in the term ‘economic recovery’ is how mass immiseration became a key condition for the recovery of corporate profits.

Privatization – This describes the transfer of public enterprises, usually the profitable ones, to well-connected, large scale private capitalists at prices well below their real value, leading to the loss of public services, stable public employment and higher costs to consumers as the new private owners jack up prices and lay-off workers — all in the name of another euphemism, ‘efficiency’.

Efficiency – Efficiency here refers only to the balance sheets of an enterprise; it does not reflect the heavy costs of ‘privatization’ borne by related sectors of the economy. For example, ‘privatization’ of transport adds costs to upstream and downstream businesses by making them less competitive compared with competitors in other countries; ‘privatization’ eliminates services in regions that are less profitable, leading to local economic collapse and isolation from national markets. Frequently, public officials, who are aligned with private capitalists, will deliberately disinvest in public enterprises and appoint incompetent political cronies as part of patronage politics, in order to degrade services and foment public discontent. This creates a public opinion favorable to ‘privatizing’ the enterprise. In other words ‘privatization’ is not a result of the inherent inefficiencies of public enterprises, as the capitalist ideologues like to argue, but a deliberate political act designed to enhance private capital gain at the cost of public welfare.

Conclusion

Language, concepts, and euphemisms are important weapons in the class struggle ‘from above’ designed by capitalist journalists and economists to maximize the wealth and power of capital. To the degree that progressive and leftist critics adopt these euphemisms and their frame of reference, their own critiques and the alternatives they propose are limited by the rhetoric of capital. Putting ‘quotation marks’ around the euphemisms may be a mark of disapproval but this does nothing to advance a different analytical framework necessary for successful class struggle ‘from below’. Equally important, it side-steps the need for a fundamental break with the capitalist system including its corrupted language and deceptive concepts. Capitalists have overturned the most fundamental gains of the working class and we are falling back toward the absolute rule of capital. This must raise anew the issue of a socialist transformation of the state, economy and class structure. An integral part of that process must be the complete rejection of the euphemisms used by capitalist ideologues and their systematic replacement by terms and concepts that truly reflect the harsh reality, that clearly identify the perpetrators of this decline and that define the social agencies for political transformation.

Countering, Democrats will huff that the travails of their dead battery, soft spot, touching turmoil or whatever it is that’s inside their boxer’s shorts or panties is no one’s business, least of all the government, though, of course, the Democrat-appointed Janet Napolitano and her TSA hordes have set up an enduring base next to their exposed, uh, discount toys. Irradiated and propped up by Cialis, they don’t look half bad. Oh yes, they do.

According to Democrats, Obama is a good liberal because he will also send gay men and women worldwide to massacre whoever gets in the way of the oil liberals need to drive their SUVs to anti-war rallies.

According to Republicans, Mitt is a good conservative since he can’t stand Ellen DeGeneres, Johnny Weir, or Barney the Dinosaur, although he will condemn a husband or wife halfway across the globe to commit unspeakable acts for years, while the remaining spouse languishes at home in anxiety and loneliness, to be comforted by some groggy chick at the bar, talk radio, a young cable guy, Jesus, reruns of American Idol or, in the best case scenario, nothing at all.

Republican politicians pretend to cherish the traditional family, while their Democratic counterparts feign that everyone should have a right to a family, but, in fact, neither side cares about anyone’s family, because they are indifferent if not hostile to human connections, period. Propped up by our military-banking complex, both parties support a bankrupting and bankrupted banking system and an endless war policy that destroy families worldwide, including here.

On top of that, they’ve tricked you into being plugged to their various brainwashing machines all day long, so that you’re divorced from your very self, honey. Outside, birds, sunshine and mounds of corpses your tax money murdered, though you wouldn’t know it, because you’re addicted to songs you’ve heard for the billionth time, each, as well as Snookie updates, pixelated pussies, cocks and boxscores.

Outside, a busking violinist says that his life is easier now, since there are so many out-of-business stores he can play in front of, without being shooed away. Outside, a person, male or female, it’s not clear, poses as a horse for tips, as a real horse looks on. Outside, a Vietnam vet drinks mouthwash to get high, while an Iraq vet shows his discharge paper to prove that he is a genuine, disposable piece of fodder, and not just an ordinary panhandler. A pint of Listerine with 21.6% alcohol costs $4.50, compared to a 24 oz., tallboy can of Natural Ice at $1.49, with 5.9 % alcohol, so Listerine is a much, much better value. It’s not exactly Jameson, true, but a few gulps will get you buzzed for maybe five hours. Outside, a man sells Newport cigarettes, “Two for a dollar, two for a dollar. Who’s next? How are you today? Very good to see you. Welcome back, it’s happy Monday. Time to go to work! It’s a beautiful day today, but don’t get used to it. It’s going to rain tomorrow! We all have our own cross to bear, ladies and gentlemen. My, aren’t you lovely today! Yes, you! Welcome back!” If he sells the entire pack in an hour, he will make $3.50. Outside, a man drains a leftover soda fished from a trash can in a well-manicured downtown plaza surrounded by bank skyscrapers.

But inside the screen, and thus inside your mind, all is well, stable and sexy. The recovery is on track, unemployment is steadily going down, and new college graduates are entering an improving job market, with multiple offers even. Inside the screen, what happens in Europe stays in Europe, Detroit is back, California is still the land of milk and honey and, soon enough, we will be amped up by orations of hope, change, forward, believe in America, let America be America and, yes, America can!

In this land of peeling yet persistent illusions, none is more farcical than the Presidential election, for even as it promises renewal, common purpose, focus and hope, and demands a collective soul searching, even, this elaborate and drawn out ritual will deliver nothing more than a new (or renewed) apologist for the same set of crimes against humanity, country and you. If there’s any good to this coming circus, it’s that the empire seems determined to maintain a relative peace until the electoral shenanigans are over. Though it’s itching for new rounds of shock and awesome, y’all, because that’s how it makes its money, it doesn’t want to tip this tottering economy into the mother of all ditches, not when citizens are somewhat focused on how to correct or improve our common lot.

If enough machinists, PhDs and war veterans dumpster dive and share a honey bucket, if whores dally in middle-class suburbs and gas goes to 6 bucks, for example, the country will explode from sea to shining sea, and not just because of well-placed FBI agents. With events quickly spiraling out of control, this election may not go as choreographed, family values be damned.

The book begins by describing the gift economy that has characterized all primitive cultures. Public gift giving was a major social ritual in all early societies. It was the primary mechanism early human communities employed to satisfy basic survival needs. As civilizations became more complex, gift exchange and barter were impractical over long distances. Therefore, money was introduced as a common medium of exchange. By tracing the western conception of money back to its earliest origins in ancient Greece, Eisenstein makes a strong case that the money system itself is responsible for rapacious growth and resource depletion, greed and the demise of community.

The Illusion of Scarcity

An early artifact of the introduction of money is the mistaken belief that the basic necessities of life are in short supply. This illusion underpins all western economic theory. In fact, many textbooks define economics as the study of human behavior under conditions of scarcity. As Eisenstein points out, this is a ludicrous notion in a world in which vast quantities of food, energy and raw materials go to waste. He links the illusion of scarcity to the illusion of the “discrete and separate self.” This, in turn, stems from the concept of personal wealth and the privatization of communally owned land. Prior to Roman times, land, like air and water, was considered part of the commons and couldn’t be owned. Under Roman tradition, there was no way for an individual to legitimately take possession of common lands. Thus the Roman aristocracy must have seized it by force, just as the English stole the communally owned lands of Native Americans.

Debt, Commodification, and Perpetual Growth

Sacred Economics argues that what economists commonly refer to as growth is the expansion of scarcity into areas of life once characterized by abundance. Fresh water, which was once abundant, has become scarce following its transformation into a commodity we have to pay for.

The fractional reserve banking system, which allows bankers to create money out of thin air – through loan generation – accentuates the pressure to convert more and more of the commons into commodities. Because the debt and interest created is always greater than the money supply (current global debt is estimated at $75 trillion, in contrast to global wealth of $30 trillion), there is always constant pressure to produce more goods and services to repay it. This explains why there are always people willing to cut down the last forest and catch the last fish.

As natural resources, such as fossil fuels, minerals, forests, fish and water, are rapidly converted to commodities, a similar transformation occurs in the social, cultural and spiritual commons. Stuff that was free throughout all human history – stories, songs, images, ideas, clever sayings – are copyrighted or trademarked to enable them to be bought and sold.

According to Eisenstein, the main reason for the world’s current financial crisis is that we continue to face mountains of increasing debt – yet have run out natural, cultural, social and spiritual capital we can convert to money to repay it.

The Case for Negative Interest Money

Eisenstein argues that capitalism, like the monetary system, has ceased to serve the interests of the vast majority of humankind. However, he disagrees with a “Marxist” solution, in which capitalist infrastructure is totally dismantled. He believes major economic change can occur through gradual evolution. In addition to advocating for relocalization of economic and political power away from central government – to cities, states and regions – he also supports the creation of local “negative interest” currencies, first introduced during the Great Depression in Germany, Austria and Switzerland.

Negative interest money was first proposed by Delvio Gisell in 1906 in his book Natural Economic Order. Gisell called it “free money” because it allowed people to exchange goods and services without paying interest to the owners of money (banks) for the right to do so. A negative interest system involves “demurrage” or natural decay in the value of money. If you know that a $100 bill will only be worth $90 in a year’s time, you have a powerful incentive to exchange it for goods and services.

In the 1920s, a negative interest currency called the Wana circulated in Germany. Towns that used the Wana had plenty of money for business expansion, workers’ salaries and public infrastructure and services – in contrast to towns that relied on the Deutschmark which, owing to deflation, was in extremely short supply. Austrian and Swiss communities introduced negative interest currencies (the Worgle and the WIR) in 1932. Owing to the threat these alternative currencies posed to banks and wealthy elites, the German and Austrian governments banned the Wana and the Worgle in 1932-33. The WIR is still in circulation in Switzerland but no longer operates as a negative interest currency. During the post-World War II boom, the demurrage was eliminated to prevent the Swiss economy from overheating.

In the US more than 100 cities were preparing to launch demurrage currencies – to stimulate local communities ravaged by the Great Depression – when Roosevelt came to power in 1932. Roosevelt, who recognized the enormous threat this posed to central government, banned all “emergency currencies” by executive decree (as Thaddeus Russell writes in A Renegade History of the United States, Roosevelt set the dangerous and unconstitutional precedent of circumventing Congress to enact laws by executive order).

The main advantages of negative interest currency are:

1. Money ceases to be scarce. As it becomes easier for small businesses to access money, jobs are created and people resume purchasing goods and services. Because the new currency is commons-based (see below), higher prices for ecologically harmful products serve as a brake their production.
2. The ready availability of money eliminates the fear of never having enough, reducing greed to acquire more, one of the main causes of income inequality.
3. Debts become easier to repay. People only pay back the original loan, without the compound interest.
4. There ceases to be any incentive for corporations to convert natural resources to profit, as cash profits rapidly decline in value.
5. Banks have more incentive to fund ecologically and socially beneficial projects with a low rate of return. They lose less by lending negative interest money than by allowing it to accumulate.
6. As money loses its value and importance, there is gradual resurrection of both the gift economy and the commons, in which people work for a “social dividend” in the form of public recognition. Eisenstein sees this process already beginning with the thousands of volunteers who donate their time to create and upgrade Open Source software, Wikipedia and books, films, songs and blogs they share freely as part of the Creative Commons.

Using State Banks to Issue Negative Interest Currencies

Eisenstein can see great benefit in local, regional and state governments issuing negative interest currencies to stimulate local business development and job creation, just as the Wana, Worgle and WIR did during the Great Depression. He applauds Ellen Brown’s work in campaigning for publicly owned state banks. At present, seventeen states have introduced legislation to create publicly owned state banks, funded by interest free tax revenue rather than Wall Street. These publicly owned banks would be in an ideal position to issue local negative interest currencies.

How a Commons-Based Currency Would Work

Rather than backing them with gold or silver, Eisenstein proposes that demurrage currencies work like bearer bonds and be redeemable for the right to “deplete the commons.” Businesses could exchange them, in other words, for the right to create an agreed amount of pollution or to deplete an agreed amount of a natural resource. Because these pollution/resource depletion quotas would be extremely expensive, corporations would be forced to internalize” (i.e. absorb the cost) of environmentally harmful production, rather than “externalizing” it (i.e. making the public pay) as they do currently.

New Zealand economist Deirdre Kent has proposed using land to back locally created negative interest currency. Under her proposal, local government would issue negative interest vouchers as a “loan” to prospective home buyers. The vouchers could be used to repay these “loans,” pay property taxes (known as “rates” in British commonwealth countries) or purchase goods and services from local businesses. This would offer new home buyers a far cheaper alternative than a bank mortgage, as well as discouraging property speculation, stimulating local business and producing additional revenue for local government.

To be sure, progressivism demands that LGBTQ share the same rights as every other person, and the United States president’s affirmation of that right is important, but it should be a given — not a sudden, monumental revelation. Yet, even though Obama has tepidly espoused a tenet of progressivism, endorsement of one or two progressivist principles does not make one a progressive.

Obama’s evilism (it’s definitely not lesser) lost (or it should have lost) a while back the support of progressives. When a presidential candidate promises change (and gullible people start to envision an end to warring, an end to torture, an end to incarceration without habeas corpus, and an end to unfair distribution of wealth, and other progressive moves) and carries on with the extremist status quo of warring and neoliberalism, what reaction should one expect from progressives?

Obama does not acknowledge, by deeds, the right of workers to form unions unencumbered — which is vital to ensuring workplace safety, protecting worker rights, and attaining a fair wage for their labor.

Obama does not acknowledge, by deeds, the rights of all humans to have a job — especially a decent paying job that upholds the integrity of labor.

Obama does not acknowledge, by deeds, the right of all citizens to universal, easy access to healthcare whether poor or well off.

Obama does not acknowledge, by deeds, the rights of Afghanis, Iraqis, Iranians, Pakistanis, Syrians, Yemenis, Libyans, and Palestinians to live free from the fear of drone attack and US or US-backed military assault.

Back in the homeland, the president does not acknowledge, by deeds, the rights of citizens to escape the clutches of financial robber barons. His administration has been surveilling the Occupation movement. Whose side is Obama on? He bails out the 1% and he spies on the 99%.

Wealth at any given moment is finite. Imagine if one divides the economic pizza in a crowd of 100 people, and 100 slices are cut. That is one slice for everyone, and everyone should be satisfied, no? However, what if one person grabs 67 slices of pizza and leaves 33 slices for the rest of the people? How will the 99% feel then? It seems very clear to see what would happen. There is a reason why the Occupation movement arose.

While average citizens were being foreclosed and jobs were disappearing, Obama bailed out the 1% with cash — much of it created by the blood, sweat, and tears of working people, and yet he says nothing meaningful about the right of the 99% to have their slice of the economic pie.

Workers cannot even retire secure in the knowledge that they will be provided for in their retirement years under Obama.

Why can Cuba provide free education right through university, universal healthcare, and high employment with poverty constrained? What does the Cuban Revolution know about progressivism and an egalitarian society that stymies Obama and the others who follow the Washington Consensus through its economic collapses, bailouts, and to whichever economic precipice looms next on the dark capitalist horizon?

Anyway, at least gays can now sleep well knowing that the president has drummed up the gumption to say it is okay for them to marry.

What makes bailouts toxic is cronyism, the coming together of government and private wealth, the spectacle of Washington doing special favors for its pals in the investment banks.

– Thomas Frank

The outstanding discovery of recent historical and anthropological research is that man’s economy, as a rule, is submerged in his social relationships.

– Karl Polanyi¹

In What’s the Matter with Kansas?: How Conservatives Won the Heart of America, author Thomas Frank explored American “democracy” and working Americans puzzling proclivity to vote against their economic best interest, which meant voting for the Republican Party. Frank’s latest book, Pity the Billionaire: The Hard-Times Swindle and the Unlikely Comeback of the Right, segues into the question of how a malfunctioning system that screws the masses manages to perpetuate itself? And why do the masses allow themselves to be screwed by the system?

The economic system is capitalism, and the political system goes hand-in-hand with molly coddling capitalism – even to the extent of bailing it out with a reverse socialism. Here was the hypocritical spectacle of right-wingers who abjure government intervention (favoring instead the rule of the market) dipping into the government coffers to bail themselves out. Frank has a knack for prose; he takes what should be palpable for all and renders it in a highly readable and engrossing fashion. He clearly presents the bailout for the economic rip-off that it was — a rip-off of working people that transferred their hard-earned money to the idle elitist class.

Frank, obviously, is highly critical of neoliberalism and so-called democracy, but unclear is what he leans toward instead. Frank would like more socialism, but would he like socialism as the system? Just how far would he like to deviate from capitalism? As an alternative to the bailout, he mentions nationalization, but does not delve into the pros and cons of a wholesale nationalization. Why?

When the ship of the elitist financial class starts taking on water, why should the common people grab the bails and hand the helm back to the incompetent navigators? This financial shipwreck should have been followed by an unyielding harangue against capitalism, and it should have provided an opening for socialism. Instead, the Right rebounded, and Frank explores how and why.

One major reason why is that the establishment produces a monopoly-media manufactured consent based in the creation and maintenance of its necessary illusions.

Right-wing media “louts” like Glen Beck and Ann Coulter (personages that Frank calls “entrepreneurs of fear”) are given generous space in the monopoly media to vent their petulant bombast while rational arguments presented by thoughtful critics are marginalized or kept out. Thus disinformation and propaganda clogs information channels; the result is myth and lies presented as truth and reality.

Frank exposes much of this, for example, the myth of small business job creation. He skewers the illogic of Ayn Rand’s Atlas Shrugged, notes how conservatives have mimicked leftist characteristics, and provides “examples of conservatism’s dalliance with error.”

Frank quotes the bathos of George W. Bush: “I’ve abandoned free-market principles to save the free-market system.” Certainly it was not an abandonment of moral principles because the “free market” is without such. Nonetheless, how can one abandon the blatant contradiction of there being a “free market”?

Pity the Billionaire captures vignettes of the inversion and perversion of economic reality along with a lack of compassion by those wedded to neoliberalism. As typifying the entitled capitalist and comprador [coordinator] classes, Frank presents business reporter Rick Santelli. Santelli knows who he serves, and he turned his scorn upon the working class “losers”/victims, such as people who lost their homes to foreclosure. The message was: the system was not to blame for extending the loans; the borrowers solely were to blame for losing out.

The Tea Party movement is a collective example of misplaced wrath, but is the Tea Party wrath any more misplaced than the faith of Obama supporters? And who are these Tea Partiers — some of who, Frank tells, wear ascots?

Frank would like voters to steer clear of the Republican Party, but is the Democratic Party the preferred option? Frank fails to explore or create a space for a politics beyond the duopoly, who he well knows is entrenched in serving the interests of the elitist class.

This was a difficult review to write. Frank’s writing really engages the reader. His logic is compelling; however, at times his application of logic is lacking and leaves one feeling unsatisfied.

Consider the following scenario: If you, as a customer, walk into a store and purchase product A and find it highly unsatisfactory, will you buy product A again or buy product B? If after buying product B, and you find that it is also highly unsatisfactory, will you then return to buying product A or will you consider trying product C? Of course I am assuming that rational customers will look for a product which satisfies them. Is there any compelling reason (besides fear, which is not a reason but an emotion) as to why this same logic should not apply to political choices?

What is the Right is quite well understood. In the United States, the Republicans are the Right. However, what is the Left? What is progressivism? Is it the Democrats? Frank does not consider this; he is focused on the mind-set of conservatives who usually reside within the Republican Party.

Does daylight really fall between the duopoly of the Democrats and Republicans? On some social issues like abortion, gun control, and such, yes. However, on economic issues? Barack Obama has demonstrated (as did Bill Clinton before Obama) that neoliberalism is embraced by the political duopoly.

Frank has been highly critical of Obama’s performance as president; however, in a sense, Frank can be criticized as an enabler of Obama. Frank writes “Nothing has changed,” but one can’t help feeling that he fails to nail Obama on his lie of “Change we can believe in.” Readers of Pity the Billionaire can easily sense that voting Republican would be their undoing, but this sense of undoing does not come across as vitally in expression against the Democrats.

Since Pity the Billionaire fails to mention, for example, the Green Party, Ralph Nader, or another “third party” as an alternative to the political duopoly, one might argue that Frank surrenders to the folly of lesser evilism.² The track record of the administrations of the last five US presidents — Ronald Reagan (Republican), George H.W. Bush (Republican), Bill Clinton (Democrat), George W. Bush (Republican), and Barack Obama — has shown no substantial deviation from the neoliberal agenda; if anything, the agenda has become further implemented. Given that the Democrats and Republicans are both implementing the agenda of the financial elitist class, and given that Frank criticizes both pro-corporate political parties and the corporate-dominated economic system, why then does he not mention turning away from the political duopoly?

Frank can describe in skilful prose the faults and cracks in the system and the contradictions of society. However, can the solution be had within the political duopoly? Pity the Billionaire was ostensibly not meant to provide solutions and neither was What’s the Matter with Kansas?. These two books come across as well-written lamentations, and should the political and economic systems perpetuate, then there is the opportunity for future lamentation.

Yet Frank knows that the system wasn’t always like this. He pointed to the wisdom of the Hungarian historian Karl Polanyi expressed in his opus, The Great Transformation, which cited communalism as a natural condition of humans and rejected self-regulating markets as unnatural. Nonetheless, the Republicans and the Democrats, as desired by big business and financial interests, have undone much of the New Deal regulatory mechanisms implemented by the administrations of Franklin D. Roosevelt. Given this, then how can either the Republicans or the Democrats be entrusted to look after the interest of the masses, the 99%?

If readers are looking for an insightful, piercing, and highly readable critique into the system that fails the masses in society, then Pity the Billionaire is highly recommended. If readers are looking for a promising alternative system, then they are better off reading – despite its very dense prose – Parecon: Life after Capitalism or — the easier to read — Realizing Hope: Life Beyond Capitalism.

1. Karl Polanyi, The Great Transformation (Boston: Beacon Press, 1957): 46.
2. I have written several articles on the topic of lesser evilism, including: “The Lesser-of-Two Evils,” 19 April 2004; “An Unconscionable Outcome: Chomsky and the Hopelessness of Lesser Evilism,” Dissident Voice, 9-10 October 2004; “The Utter Futility of Lesser Evilism,” Dissident Voice, 24 May 2007; “Evilism: There Is No Lesser,” Dissident Voice, 29 July 2011;

Clearly, thinking outside the box is not how our system deals with serious issues.  When having lunch with fellow educators and arguing about the crimes, especially against the Constitution and on war,  of both the Bush and Obama administrations, my frustration is palpable.

I’ve come to the conclusion that the Republicans enjoy being in the box whereas the Democrats don’t even know they’re in one.

On issues of war and economics, the Republicans and many Democrats I talk with clearly support the idea  that the US is a world economic power and needs to maintain it in any way they can.  They might acknowledge the wrongs committed but see it as necessary.  OK, that’s where dialog comes in.  My partisan Democratic friends, especially in the teachers’ lounge of my school, are simply oblivious to the wrongs or come up with every conceivable way of minimizing it or laying blame elsewhere. The most common response to the economic disaster that we’re in due to Obama’s Wall Street cabinet is that the Republicans won’t let him do what needs to be done. Another gem is that in politics you can’t always get what you campaign on and its corollary, the political climate is not ripe for what you’re asking.

Bush controlled the Congress. Obama is certainly the antithesis. He punted every major decision to them. Whether it be health care or Don’t Ask, President Obama relinquished the bully pulpit for the collaborative approach of having the other arm of government have a role, but in most cases, the only role.  If only President Obama, when he was elected with an American-style mandate, and with a Democrat-controlled Congress, were to have rallied the pro-Single Payer (Medicare for All) populous, a majority of Americans, for universal health care, it would have passed over both Democratic and Republican opponents in Congress.  He simply could have equated the health insurance industry with the likes of Al Qaeda.  Who would have had kind words for, or dare to come out and defend, the insurance industry? If not Single Payer, then at a minimum, a public option would be the law today, paving the way for universal coverage.  But President Obama preferred the box that we’re in. Yes, I’m implying that he falls within the Republican view of the box theory since he earlier sided with the industry by giving them what they wanted, and no public option, as long as they didn’t pull a Harry and Louise on him.

Missing in the dialog is acknowledgment of reality.  “No we’re not in a Police State because we’re not living like under Nazi Germany.”  True, unless you’re an undocumented alien or whistle blower- military or civilian-, where you’ll be tonight or tomorrow is likely known.  The drone war, supported by a majority of ‘progressives’ in America, is just a way of achieving a military solution without requiring the presence of American boots on the ground.  Rachel Maddow’s all for it so it must be the progressive thing to do when it’s done by a Democrat in the White House.  “Why make a case of habeas corpus?  Abraham Lincoln suspended it and thank God for him. I wouldn’t be here today if it wasn’t for him.”

What is the ‘box’?: the capitalist economy. With it comes imperial wars for others’ natural resources (Why is our oil under their sand?); support for military coups against democratically elected governments (Honduras and the Maldives); support for apartheid regimes and theocracies in the Middle East yet mouthing praise for the Arab Spring, as long as it’s in the ‘right’ countries; wages far below needs; reform of health insurance but not health care reform; homelessness and foreclosures when vacant houses, owned by banks and local governments, sit idle; public education under severe attack by both Democrats and Republicans who want to privatize it, bust the unions, and, of course, blame the teachers for not increasing test scores that have no baring of the real learning that is taking place; for-profit prison population booming (especially for the undocumented being prepared for deportation); etc.

Electoral reform is certainly needed to remove the box of capitalism from discussions on solving our problems. As it stands, it is virtually impossible for a variety of Third Parties to have ballot access in every state. There’s too much of a fear that it would cause the demise, in particular, of the Democratic Party. After all, if their platform isn’t marketable and another’s is, then they would go the way of Betamax.  The Republicans can stay as the legitimate 1% Party; the Democrats would do best to merge with them. How can we have electoral reform when states like Virginia require a 10,000-signature petition (not terribly difficult, but onerous) yet require a minimum of 400 in each county? Can you imagine that many supporting a Socialist party in Pat Robertson’s neck of the woods?

Dialog on issues can work as long as there is a recognition of reality and ownership of responsibility for why things are as they are. Without it,  it’s status quo.  Your everyday, typical Republican, on matters of war and economics, needs to see how the system is not working for them, except for those in a minority that it does.  Democratic partisans and Obama die-hard supporters need to truly question their values and principles and objectively see if their party truly stands by it, or equivocates to the point of non-recognition of the principles.  Maybe easier said  than done but the box remains strong, or invisible, as long as thinking remains stagnant.

Not really. Goldman now expects the BRICS countries to account for almost 40% of global gross domestic product (GDP) by 2050, and to include four of the world’s top five economies.

Soon, in fact, that acronym may have to expand to include Turkey, Indonesia, South Korea and, yes, nuclear Iran: BRIIICTSS? Despite its well-known problems as a nation under economic siege, Iran is also motoring along as part of the N-11, yet another distilled concept. (It stands for the next 11 emerging economies.)

The multitrillion-dollar global question remains: Is the emergence of BRICS a signal that we have truly entered a new multipolar world?

Yale’s canny historian Paul Kennedy (of “imperial overstretch” fame) is convinced that we either are about to cross or have already crossed a “historical watershed” taking us far beyond the post-Cold War unipolar world of “the sole superpower.” There are, argues Kennedy, four main reasons for that: the slow erosion of the US dollar (formerly 85% of global reserves, now less than 60%), the “paralysis of the European project,” Asia rising (the end of 500 years of Western hegemony), and the decrepitude of the United Nations.

The Group of Eight (G-8) is already increasingly irrelevant. The G-20, which includes the BRICS, might, however, prove to be the real thing. But there’s much to be done to cross that watershed rather than simply be swept over it willy-nilly: the reform of the UN Security Council, and above all, the reform of the Bretton Woods system, especially those two crucial institutions, the International Monetary Fund (IMF) and the World Bank.

On the other hand, willy-nilly may prove the way of the world. After all, as emerging superstars, the BRICS have a ton of problems. True, in only the last seven years Brazil has added 40 million people as middle-class consumers; by 2016, it will have invested another $900 billion – more than a third of its GDP — in energy and infrastructure; and it’s not as exposed as some BRICS members to the imponderables of world trade, since its exports are only 11% of GDP, even less than the US.

Still, the key problem remains the same: lack of good management, not to mention a swamp of corruption. Brazil’s brazen new monied class is turning out to be no less corrupt than the old, arrogant, comprador elites that used to run the country.

In India, the choice seems to be between manageable and unmanageable chaos. The corruption of the country’s political elite would make Shiva proud. Abuse of state power, nepotistic control of contracts related to infrastructure, the looting of mineral resources, real estate property scandals — they’ve got it all, even if India is not a Hindu Pakistan. Not yet anyway.

Since 1991, “reform” in India has meant only one thing: unbridled commerce and getting the state out of the economy. Not surprisingly then, nothing is being done to reform public institutions, which are a scandal in themselves. Efficient public administration? Don’t even think about it. In a nutshell, India is a chaotic economic dynamo and yet, in some sense, not even an emerging power, not to speak of a superpower.

Russia, too, is still trying to find the magic mix, including a competent state policy to exploit the country’s bounteous natural resources, extraordinary space, and impressive social talent. It must modernize fast as, apart from Moscow and St Petersburg, relative social backwardness prevails. Its leaders remain uneasy about neighboring China (aware that any Sino-Russian alliance would leave Russia as a distinctly junior partner). They are distrustful of Washington, anxious over the depopulation of their eastern territories, and worried about the cultural and religious alienation of their Muslim population.

Then again the Putinator is back as president with his magic formula for modernization: a strategic German-Russian partnership that will benefit the power elite/business oligarchy, but not necessarily the majority of Russians.

Dead in the Woods

The post-World War II Bretton Woods system is now officially dead, totally illegitimate, but what are the BRICS planning to do about it?

At their summit in New Delhi in late March, they pushed for the creation of a BRICS development bank that could invest in infrastructure and provide them with back-up credit for whatever financial crises lie down the road. The BRICS know perfectly well that Washington and the European Union (EU) will never relinquish control of the IMF and the World Bank. Nonetheless, trade among these countries will reach an impressive $500 billion by 2015, mostly in their own currencies.

However, BRICS cohesion, to the extent it exists, centers mostly around shared frustration with the Masters of the Universe-style financial speculation that nearly sent the global economy off a cliff in 2008. True, the BRICS crew also has a notable convergence of policy and opinion when it comes to embattled Iran, an Arab Sprung Middle East, and Northern Africa. Still, for the moment the key problem they face is this: they don’t have an ideological or institutional alternative to neo-liberalism and the lordship of global finance.

As Vijay Prashad has noted, the Global North has done everything to prevent any serious discussion of how to reform the global financial casino.¹ No wonder the head of the G-77 group of developing nations (now G-132, in fact), Thai ambassador Pisnau Chanvitan, has warned of “behavior that seems to indicate a desire for the dawn of a new neocolonialism.”

Meanwhile, things happen anyway, helter-skelter. China, for instance, continues to informally advance the yuan as a globalizing, if not global, currency. It’s already trading in yuan with Russia and Australia, not to mention across Latin America and in the Middle East. Increasingly, the BRICS are betting on the yuan as their monetary alternative to a devalued US dollar.

Japan is using both yen and yuan in its bilateral trade with its huge Asian neighbor. The fact is that there’s already an unacknowledged Asian free-trade zone in the making, with China, Japan, and South Korea on board.

What’s ahead, even if it includes a BRICS-bright future, will undoubtedly be very messy. Just about anything is possible (verging on likely), from another Great Recession in the US to European stagnation or even the collapse of the eurozone, to a BRICS-wide slowdown, a tempest in the currency markets, the collapse of financial institutions, and a global crash.

And talk about messy, who could forget what Dick Cheney said, while still Halliburton’s CEO, at the Institute of Petroleum in London in 1999: “The Middle East, with two-thirds of the world’s oil and the lowest cost, is still where the prize ultimately lies.” No wonder when, as vice president, he came to power in 2001, his first order of business was to “liberate” Iraq’s oil. Of course, who doesn’t remember how that ended?

Now (different administration but same line of work), it’s an oil-embargo-cum-economic-war on Iran. The leadership in Beijing sees Washington’s whole Iran psychodrama as a regime-change plot, pure and simple, having nothing to do with nuclear weapons. Then again, the winner so far in the Iran imbroglio is China. With Iran’s banking system in crisis, and the US embargo playing havoc with that country’s economy, Beijing can essentially dictate its terms for buying Iranian oil.

The Chinese are expanding Iran’s fleet of oil tankers, a deal worth more than US$1 billion, and that other BRICS giant, India, is now purchasing even more Iranian oil than China. Yet Washington won’t apply its sanctions to BRICS members because these days, economically speaking, the US needs them more than they need the US.

The world through Chinese eyes

Which brings us to the dragon in the room: China.

What’s the ultimate Chinese obsession? Stability, stability, stability.

The usual self-description of the system there as “socialism with Chinese characteristics” is, of course, as mythical as a gorgon. In reality, think hardcore neo-liberalism with Chinese characteristics led by men who have every intention of saving global capitalism.

At the moment, China is smack in the middle of a tectonic, structural shift from an export/investment model to a services/consumer-led model. In terms of its explosive economic growth, the last decades have been almost unimaginable to most Chinese (and the rest of the world), but according to the Financial Times, they have also left the country’s richest 1% controlling 40%-60% of total household wealth. How to find a way to overcome such staggering collateral damage? How to make a system with tremendous inbuilt problems function for 1.3 billion people?

Enter “stability-mania.” Back in 2007, Prime Minister Wen Jiabao was warning that the Chinese economy could become “unstable, unbalanced, uncoordinated, and unsustainable.” These were the famous “Four Uns.”

Today, the collective leadership, including the next Prime Minister, Li Leqiang, has gone a nervous step further, purging “unstable” from the Party’s lexicon. For all practical purposes, the next phase in the country’s development is already upon us.

It will be quite something to watch in the years to come.

How will the nominally “communist” princelings — the sons and daughters of top revolutionary Party leaders, all immensely wealthy, thanks, in part, to their cozy arrangements with Western corporations, plus the bribes, the alliances with gangsters, all those “concessions” to the highest bidder, and the whole Western-linked crony-capitalist oligarchy – lead China beyond the “Four Modernizations”? Especially with all that fabulous wealth to loot.

The Obama administration, expressing its own anxiety, has responded to the clear emergence of China as a power to be reckoned with via a “strategic pivot” — from its disastrous wars in the Greater Middle East to Asia. The Pentagon likes to call this “rebalancing” (though things are anything but rebalanced or over for the US in the Middle East).

Before 9/11, the Bush administration had been focused on China as its future global enemy number one. Then 9/11 redirected it to what the Pentagon called “the arc of instability,” the oil heartlands of the planet extending from the Middle East through Central Asia. Given Washington’s distraction, Beijing calculated that it might enjoy a window of roughly two decades in which the pressure would be largely off. In those years, it could focus on a breakneck version of internal development, while the US was squandering mountains of money on its nonsensical “Global War on Terror.”

Twelve years later, that window is being slammed shut as from India, Australia, and the Philippines to South Korea and Japan, the US declares itself back in the hegemony business in Asia. Doubts that this was the new American path were dispelled by Secretary of State Hillary Clinton’s November 2011 manifesto in Foreign Policy magazine, none too subtly labeled “America’s Pacific Century.” (And she was talking about this century, not the last one!)

The American mantra is always the same: “American security,” whose definition is: whatever happens on the planet. Whether in the oil-rich Persian Gulf where Washington “helps” allies Israel and Saudi Arabia because they feel threatened by Iran, or Asia where similar help is offered to a growing corps of countries that are said to feel threatened by China, it’s always in the name of US security. In either case, in just about any case, that’s what trumps all else.

As a result, if there is a 33-year Wall of Mistrust between the US and Iran, there is a new, growing Great Wall of Mistrust between the US and China. Recently, Wang Jisi, Dean of the School of International Studies at Peking University and a top Chinese strategic analyst, offered the Beijing leadership’s perspective on that “Pacific Century” in an influential paper he coauthored.

China, he and his coauthor write, now expects to be treated as a first-class power. After all, it “successfully weathered … the 1997-98 global financial crisis,” caused, in Beijing’s eyes, by “deep deficiencies in the US economy and politics. China has surpassed Japan as the world’s second largest economy and seems to be the number two in world politics, as well … Chinese leaders do not credit these successes to the United States or to the US-led world order.”

The US, Wang adds, “is seen in China generally as a declining power over the long run … It is now a question of how many years, rather than how many decades, before China replaces the United States as the largest economy in the world … part of an emerging new structure.” (Think: BRICS.)

In sum, as Wang and his coauthor portray it, influential Chinese see their country’s development model providing “an alternative to Western democracy and experiences for other developing countries to learn from, while many developing countries that have introduced Western values and political systems are experiencing disorder and chaos.”

Put it all in a nutshell and you have a Chinese vision of the world in which a fading US still yearns for global hegemony and remains powerful enough to block emerging powers — China and the other BRICS — from their twenty-first century destiny.

Dr Zbig’s Eurasian wet dream

Now, how does the US political elite see that same world? Virtually no one is better qualified to handle that subject than former national security adviser, BTC pipeline facilitator, and briefly Obama ghost adviser, Dr Zbigniew (“Zbig”) Brzezinski. And he doesn’t hesitate to do so in his latest book, Strategic Vision: America and the Crisis of Global Power.

If the Chinese have their strategic eyes on those other BRICS nations, Dr Zbig remains stuck on the Old World, newly configured. He is now arguing that, for the US to maintain some form of global hegemony, it must bet on an “expanded West.” That would mean strengthening the Europeans (especially in energy terms), while embracing Turkey, which he imagines as a template for new Arab democracies, and engaging Russia, politically and economically, in a “strategically sober and prudent fashion.”

Turkey, by the way, is no such template because, despite the Arab Spring, for the foreseeable future, there are no new Arab democracies. Still, Zbig believes that Turkey can help Europe, and so the US, in far more practical ways to solve certain global energy problems by facilitating its “unimpeded access across the Caspian Sea to Central Asia’s oil and gas.”

Under the present circumstances, however, this, too, remains something of a fantasy. After all, Turkey can only become a key transit country in the great energy game on the Eurasian chessboard I’ve long labeled “Pipelineistan” if the Europeans get their act together. They would have to convince the energy-rich, autocratic “republic” of Turkmenistan to ignore its powerful Russian neighbor and sell them all the natural gas they need. And then there’s that other energy matter that looks unlikely at the moment: Washington and Brussels would have to ditch counterproductive sanctions and embargos against Iran (and the war games that go with them) and start doing serious business with that country.

Dr Zbig nonetheless proposes the notion of a two-speed Europe as the key to future American power on the planet. Think of it as an upbeat version of a scenario in which the present Eurozone semi-collapses. He would maintain the leading role of the inept bureaucratic fat cats in Brussels now running the EU, and support another “Europe” (mostly the southern “Club Med” countries) outside the euro, with nominally free movement of people and goods between the two. His bet – and in this he reflects a key strand of Washington thinking – is that a two-speed Europe, a Eurasian Big Mac, still joined at the hip to America, could be a globally critical player for the rest of the twenty-first century.

And then, of course, Dr Zbig displays all his Cold Warrior colors, extolling an American future “stability in the Far East” inspired by “the role Britain played in the nineteenth century as a stabilizer and balancer of Europe.” We’re talking, in other words, about this century’s number one gunboat diplomat. He graciously concedes that a “comprehensive American-Chinese global partnership” would still be possible, but only if Washington retains a significant geopolitical presence in what he still calls the “Far East” – “whether China approves or not.”

The answer will be “not.”

In a way, all of this is familiar stuff, as is much of actual Washington policy today. In his case, it’s really a remix of his 1997 magnum opus The Grand Chessboard in which, he once again certifies that “the huge Trans-Eurasian continent is the central arena of world affairs.” Only now reality has taught him that Eurasia can’t be conquered and America’s best shot is to try to bring Turkey and Russia into the fold.

Robocop rules

Yet Brzezinski looks positively benign when you compare his ideas to Hillary Clinton’s recent pronouncements, including her address to the tongue-twistingly named World Affairs Council 2012 NATO Conference. There, as the Obama administration regularly does, she highlighted “NATO’s enduring relationship with Afghanistan” and praised negotiations between the US and Kabul over “a long-term strategic partnership between our two nations.”

Translation; despite being outmaneuvered by a minority Pashtun insurgency for years, neither the Pentagon nor NATO have any intention of rebalancing out of their holdings in the Greater Middle East. Already negotiating with President Hamid Karzai’s government in Kabul for staying rights through 2024, the US has every intention of holding onto three major strategic Afghan bases: Bagram, Shindand (near the Iranian border), and Kandahar (near the Pakistani border). Only the terminally na๏ve would believe the Pentagon capable of voluntarily abandoning such sterling outposts for the monitoring of Central Asia and strategic competitors Russia and China.

NATO, Clinton added ominously, will “expand its defense capabilities for the twenty-first century,” including the missile defense system the alliance approved at its last meeting in Lisbon in 2010.

It will be fascinating to see what the possible election of socialist Fran็ois Hollande as French president might mean. Interested in a deeper strategic partnership with the BRICS, he is committed to the end of the US dollar as the world’s reserve currency. The question is: Would his victory throw a monkey wrench into NATO’s works, after these years under the Great Liberator of Libya, that neo-Napoleonic image-maker Nicolas Sarkozy (for whom France was just mustard in Washington’s steak tartar).

No matter what either Dr Zbig or Hillary might think, most European countries, fed up with their black-hole adventures in Afghanistan and Libya, and with the way NATO now serves US global interests, support Hollande on this. But it will still be an uphill battle. The destruction and overthrow of Muammar Gaddafi’s Libyan regime was the highpoint of the recent NATO agenda of regime change in MENA (the Middle East-Northern Africa). And NATO remains Washington’s plan B for the future, if the usual network of think tanks, endowments, funds, foundations, NGOs, and even the U.N. fail to provoke what could be described as YouTube regime change.

In a nutshell: after going to war on three continents (in Yugoslavia, Afghanistan, and Libya), turning the Mediterranean into a virtual NATO lake, and patrolling the Arabian Sea non-stop, NATO will be, according to Hillary, riding on “a bet on America’s leadership and strength, just as we did in the twentieth century, for this century and beyond.” So 21 years after the end of the Soviet Union — NATO’s original raison d’etre — this could be the way the world ends; not with a bang, but with NATO, in whimpering mode, still fulfilling the role of perpetual global Robocop.

We’re back once again with Dr Zbig and the idea of America as the “promoter and guarantor of unity” in the West, and as “balance and conciliator” in the East (for which it needs bases from the Persian Gulf to Japan, including those Afghan ones). And don’t forget that the Pentagon has never given up the idea of attaining Full Spectrum Dominance.

For all that military strength, however, it’s worth keeping in mind that this is distinctly a New World (and not in North America either). Against the guns and the gunboats, the missiles and the drones, there is economic power. Currency wars are now raging. BRICS members China and Russia have cordilleras of cash. South America is uniting fast. The Putinator has offered South Korea an oil pipeline. Iran is planning to sell all its oil and gas in a basket of currencies, none dollars. China is paying to expand its blue-water Navy and its anti-ship missile weaponry. One day, Tokyo may finally realize that, as long as it is occupied by Wall Street and the Pentagon, it will live in eternal recession. Even Australia may eventually refuse to be forced into a counterproductive trade war with China.

So this twenty-first century world of ours is shaping up right now largely as a confrontation between the US/NATO and the BRICS, warts and all on every side. The danger: that somewhere down the line it turns into a Full Spectrum Confrontation. Because make no mistake, unlike Saddam Hussein or Muammar Gaddafi, the BRICS will actually be able to shoot back.

1. See “The G-77 awakes,” Asia Times Online, April 17, 2012.

Seventeenth century Puritans had their answer: work hard, avoid idle temptations, and pray that Providence — in the form of favorable weather and good harvests — would provide (for the “commonwealth”).  Nineteenth century bourgeois-utilitarians added the elements of disciplined training, methodical routine, practical expertise, and –unlike the Puritans — “conspicuous consumption.”  These core Western “values”—inculcated in early childhood—include the intrinsic virtue of “hard work,” and the insistence on daily, unremitting, “practical” activity (i.e., “productivity”). Sixties-era radical theorist Herbert Marcuse referred to the tyranny of this “performance principle”—made possible by the “surplus-repression” of basic human desires.¹

Needless to say, over two centuries of relentless economic activity have cluttered and degraded and deforested the world to such an extent that we now confront, among other previously inconceivable catastrophes, the specters of “global warming” and deadly yet perennial nuclear wastes.  Yet, restlessly insatiable, the profit-addicted Juggernaut remains in perpetual-motion—devouring entire ecosystems as it plunders “resources” and carves out new “markets.”  Indeed, such unremitting “development,” as John Stuart Mill prophesied 150 years ago, could end up destroying the entire world.

Karl Marx emphasized the inevitable volatility of “free”-market conditions (the “boom-slump” cycle).  The over-extension of business credit invariably leads to overproduction and periodic recessions —wherein millions of the “precariat” lose their livelihoods.  Loss of income leads to more homelessness, more malnourished children, and other serious social ills associated with increasing poverty.

Yet, at the same time—at least in the United States today—an overlooked “benefit” of economic recession is a quieter, less-busy social environment.  Daily life slows down, traffic volume decreases and superfluous consumption precipitously drops.  The local strip-mall project is put on hold.  People stay home (as long as they can afford to keep their homes).   If “health (sic) insurance” or cable TV become financially out-of-reach, the individual still gains more accessible free time—to, perhaps, read about preparing cheap yet nutritious meals, learn some time-honored DIY skills (like growing vegetables), ponder Tolstoy’s “Master and Man” or listen to Beethoven’s Ninth Symphony.

At the risk of sounding like Proudhon in his “Philosophy of Poverty”—which provoked an angry critique from Marx—I would simply point out that the free time of “under-employment” allows for self-directed growth, whether intellectual, aesthetic or “spiritual.² Surely we as radicals reject the desirability of an 8-10 hour workday as such—enslaved by the profit-imperatives of those who own the production-system?  Since one only lives once, why not free up one’s limited time in order to cultivate the full range of human sensibility and finely-hone our uniquely individual forms of dissent and negative revolt?  This requires—preferably in a low-cost, rural setting—a certain disdain for material comfort, a prideful willingness to “do without,” and considerable ingenuity. (Not necessarily dumpster-diving, but rather, growing food, using public resources like libraries; and enjoying pastoral pleasures, peaceful contemplations, quiet open spaces, and the sheer exhilaration of feeling unchained– however one is clothed and furnished from a thrift store.)

In our fear-driven haste to work hard, attain material trappings, and relentlessly pursue financial “security”—so that, someday, somewhere, we may actually live without “worry”—we miss the simple delights of being alive now.  Do we share, with our children, the joyful spirit of William Blake’s “Songs of Innocence”—as well as the playful exuberance of worldwide Trickster myths?  Or do we “share” our worries about insurance premiums, mortgage payments, college tuition — and their future “careers”?  In spite of “relationship problems,” do we savor the earthy delights of “warm-hearted sex” (to paraphrase Lady Chatterley’s lover)?  Or do we worry about the mechanics of sexual “performance”?

We will die, soon or later, that’s certain enough.  But will we ever know how to live?

1. Herbert Marcuse, Eros and Civilization (Beacon Press, 1955).  (See also his discussion of an “aesthetic ethos, ”in his otherwise out-dated Essay on Liberation, Beacon 1969).  Ironically, unlike Marcuse, many progressive activists today—hard at work at their computers, organizing and writing–may exhibit a variation of Puritan (“worldly”) asceticism: compassionate toward the victims of injustice yet suspicious of human pleasures and unresponsive to any joie de vivre.  (Cf. Max Weber, The Protestant Ethic and the Spirit of Capitalism).
2. Marxist psychoanalyst Erich Fromm devoted an entire book to this subject (implicit in Marx’s early Paris manuscripts): To Have or to Be?  (Harper & Row, 1976).  Cf. also his excellent study Marx’s Concept of Man (Continuum, 1966), which appends Marx’s early essays on non-alienated, self-directed productivity (labor).

In September 2008, Henry Paulson, former CEO of Goldman Sachs, managed to extort a $700 billion bank bailout from Congress.  But to pull it off, he had to fall on his knees and threaten the collapse of the entire global financial system and the imposition of martial law; and the bailout was a one-time affair.  Paulson’s plea for a permanent bailout fund—the Troubled Asset Relief Program or TARP—was opposed by Congress and ultimately rejected.

By December 2011, European Central Bank president Mario Draghi, former vice president of Goldman Sachs Europe, was able to approve a 500 billion Euro bailout for European banks without asking anyone’s permission.  And in January 2012, a permanent rescue funding program called the European Stability Mechanism (ESM) was passed in the dead of night with barely even a mention in the press.  The ESM imposes an open-ended debt on EU member governments, putting taxpayers  on the hook for whatever the ESM’s Eurocrat overseers demand.

The bankers’ coup has triumphed in Europe seemingly without a fight.  The ESM is cheered by Eurozone governments, their creditors, and “the market” alike, because it means investors will keep buying sovereign debt.  All is sacrificed to the demands of the creditors because where else can the money be had to float the crippling debts of the Eurozone governments?

There is another alternative to debt slavery to the banks.  But first, a closer look at the nefarious underbelly of the ESM and Goldman’s silent takeover of the ECB . . . .

The Dark Side of the ESM

The ESM is a permanent rescue facility slated to replace the temporary European Financial Stability Facility and European Financial Stabilization Mechanism as soon as Member States representing 90% of the capital commitments have ratified it, something that is expected to happen in July 2012.  A December 2011 youtube video titled “The shocking truth of the pending EU collapse!”, originally posted in German, gives such a revealing look at the ESM that it is worth quoting here at length.  It states:

The EU is planning a new treaty called the European Stability Mechanism, or ESM:  a treaty of debt. . . . The authorized capital stock shall be 700 billion euros.  Question: why 700 billion?  [Probable answer: it simply mimicked the $700 billion the U.S. Congress bought into in 2008.] . . . .

[Article 9]: “. . . ESM Members hereby irrevocably and unconditionally undertake to pay on demand any capital call made on them . . . within seven days of receipt of such demand.”  . . . If the ESM needs money, we have seven days to pay. . . . But what does “irrevocably and unconditionally” mean?  What if we have a new parliament, one that does not want to transfer money to the ESM?  . . . .

[Article 10]: “The Board of Governors may decide to change the authorized capital and amend Article 8 . . . accordingly.”  Question:  . . . 700 billion is just the beginning?  The ESM can stock up the fund as much as it wants to, any time it wants to?  And we would then be required under Article 9 to irrevocably and unconditionally pay up?

[Article 27, lines 2-3]: “The ESM, its property, funding, and assets . . . shall enjoy immunity from every form of judicial process . . . .”  Question:  So the ESM program can sue us, but we can’t challenge it in court?

[Article 27, line 4]: “The property, funding and assets of the ESM shall . . . be immune from search, requisition, confiscation, expropriation, or any other form of seizure, taking or foreclosure by executive, judicial, administrative or legislative action.”  Question: . . . [T]his means that neither our governments, nor our legislatures, nor any of our democratic laws have any effect on the ESM organization?  That’s a pretty powerful treaty!

[Article 30]:  “Governors, alternate Governors, Directors, alternate Directors, the Managing Director and staff members shall be immune from legal process with respect to acts performed by them . . . and shall enjoy inviolability in respect of their official papers and documents.”   Question:  So anyone involved in the ESM is off the hook?  They can’t be held accountable for anything? . . . The treaty establishes a new intergovernmental organization to which we are required to transfer unlimited assets within seven days if it so requests, an organization that can sue us but is immune from all forms of prosecution and whose managers enjoy the same immunity.  There are no independent reviewers and no existing laws apply?  Governments cannot take action against it?  Europe’s national budgets in the hands of one single unelected intergovernmental organization?  Is that the future of Europe?  Is that the new EU – a Europe devoid of sovereign democracies?

The Goldman Squid Captures the EC

Last November, without fanfare and barely noticed in the press, former Goldman exec Mario Draghi replaced Jean-Claude Trichet as head of the ECB.  Draghi wasted no time doing for the banks what the ECB has refused to do for its member governments—lavish money on them at very cheap rates.  French blogger Simon Thorpe reports:

 On the 21st of December, the ECB “lent” 489 billion euros to European Banks at the extremely generous rate of just 1% over 3 years.  I say “lent”, but in reality, they just ran the printing presses. The ECB doesn’t have the money to lend. It’s Quantitative Easing again.

The money was gobbled up virtually instantaneously by a total of 523 banks. It’s complete madness. The ECB hopes that the banks will do something useful with it – like lending the money to the Greeks, who are currently paying 18% to the bond markets to get money. But there are absolutely no strings attached. If the banks decide to pay bonuses with the money, that’s fine. Or they might just shift all the money to tax havens.

At 18% interest, debt doubles in just four years.  It is this onerous interest burden, not the debt itself, that is crippling Greece and other debtor nations.  Thorpe proposes the obvious solution:

Why not lend the money to the Greek government directly? Or to the Portuguese government, currently having to borrow money at 11.9%? Or the Hungarian government, currently paying 8.53%. Or the Irish government, currently paying 8.51%? Or the Italian government, who are having to pay 7.06%?

The stock objection to that alternative is that Article 123 of the Lisbon Treaty prevents the ECB from lending to governments.  But Thorpe reasons:

My understanding is that Article 123 is there to prevent elected governments from abusing Central Banks by ordering them to print money to finance excessive spending. That, we are told, is why the ECB has to be independent from governments. OK. But what we have now is a million times worse. The ECB is now completely in the hands of the banking sector. “We want half a billion of really cheap money!!” they say.  OK, no problem. Mario is here to fix that. And no need to consult anyone. By the time the ECB makes the announcement, the money has already disappeared.

At least if the ECB was working under the supervision of elected governments, we would have some influence when we elect those governments. But the bunch that now has their grubby hands on the instruments of power are now totally out of control.

Goldman Sachs and the financial technocrats have taken over the European ship.  Democracy has gone out the window, all in the name of keeping the central bank independent from the “abuses” of government.  Yet the government is the people—or it should be.  A democratically elected government represents the people.  Europeans are being hoodwinked into relinquishing their cherished democracy to a rogue band of financial pirates, and the rest of the world is not far behind.

Rather than ratifying the draconian ESM treaty, Europeans would be better advised to reverse article 123 of the Lisbon treaty.  Then the ECB could issue credit directly to its member governments.  Alternatively, Eurozone governments could re-establish their economic sovereignty by reviving their publicly-owned central banks and using them to issue the credit of the nation for the benefit of the nation, effectively interest-free.  This is not a new idea but has been used historically to very good effect; e.g., in Australia through the Commonwealth Bank of Australia and in Canada through the Bank of Canada.

Today the issuance of money and credit has become the private right of vampire rentiers, who are using it to squeeze the lifeblood out of economies.  This right needs to be returned to sovereign governments.  Credit should be a public utility, dispensed and managed for the benefit of the people.

Dühring treats distribution independently of production. Once the social product has been produced, and this is accomplished by the necessary operative laws of capitalist production, the product can be distributed by an act of will so that “universal justice” is done. This can be done because in the commune everyone must labor and consume based on all forms of labor being considered as of equal value. This system will obtain both within the commune and between the communes. Furthermore, exchange value will be linked to the value of the precious metals. This system will be an improvement over the “foggy notions” of thinkers such as Marx.

Let’s see just how this “universal justice” actually is brought about. Following Engels, lets take a model commune of 100 workers working an eight hour day and making $100 worth of commodities each or a total of $10,000 worth of goodies. Say they work 250 days a year for a yearly product of $2,500,000. According to Dühring’s system “universal justice” requires that each worker get paid the exact value of his labor which would be 250 times $100 or $25,000 a year. The commune pays out the entire value that it creates so, as Engels says, at the end of a year, or a hundred years, “the commune is no richer than at the beginning.” There is no accumulation possible in this system. Individuals can accumulate wealth for a worker can always deprive himself and not spend all of his money in a given time period, but society cannot accumulate wealth for any economic expansion or to carry out any kind of social programs.

This is not the only problem with Dühring’s commune. The fact that workers are all paid the same means a single worker will actually have more income for savings than a worker with a large family to take care of. Rich and poor will gradually reappear and eventually all the problems of a capitalist society. This tendency cannot be stopped by rules and regulations as Dühring’s “universal justice” demands that the workers can dispose of their wages as they wish. And as money is the “social incarnation” of human labor and operates by the laws of capitalist economics in the commune as well as the surrounding world, all of Dühring’s regulations to control it “are just as powerless against it as they are against the multiplication table or the chemical composition of water.”

Dühring’s system breaks down because he, not Marx and other socialists, is under the control of “foggy notions.” Dühring just doesn’t understand the basic operating conditions of the capitalist system. He wasn’t the only one in Engel’s day who claimed to be able to explain economics without really understanding what was going on– the phenomenon is just as rampant today in the 21st century as it was in the 19th. Therefore at this point in his polemic against Dühring, Engels takes a timeout to give his readers a brief summary of Economics 101.

The capitalist economy is based on commodity production and the only value recognized by capitalism is the value of commodities, according to Engels. To say that any given commodity has a value is to say four things about it. 1. That it has a use value– it serves some socially useful function. 2. That it has been privately produced [this is a simple model of capitalism, not a mixed economy or state capitalism]. 3. It is a product of individual labor but “unconsciously and involuntarily” it also is a social product containing human labor in general which is measured through exchange. 4. The value of the social labor contained in it is measured by some other commodity. Engels gives the example a clock having the same value as a certain quantity of cloth– say “fifty shillings”.

This only means that it took the same amount of socially necessary labor time to make the clock as to make the cloth. Since we don’t live in a barter society a special commodity has developed which is used to measure the relative values of all the other commodities to each other– this is money.

The term “relative” value is important. We cannot determine the “absolute value” of every commodity– i.e., calculate the exact value of the labor power used to create it. This is because of the complexity of the capitalist system and the variations of the cost of labor and labor time from factory to factory and location to location. All these different factors average out over time and commodities begin to reflect their relative values, the relative rate of socially necessary labor time needed to create them, by having their worth expressed in terms of money. Prices are reflections of relative value not absolute value and can fluctuate wildly around the actual value of commodities– but over time they come to reflect the actual values that underlie them but in a relative manner.

Engels gives an analogy from the chemistry of his day. He says that the absolute atomic weights of the elements were unknown so scientists used hydrogen as 1 and expressed the relative atomic weights of the other elements as multiples of hydrogen. This is analogous to elevating “gold [or whatever is used as money] to the level of the absolute commodity, the general equivalent of all other commodities” and using it to measure the relative value of human (social) labor contained in them.

The term “social labor” is important to understand. It is not raw individual labor that determines the value of a commodity. It is rather the amount of labor that in a given society is necessary to produce different commodities that gives them their values– the socially necessary labor time. At least this is “value” as expressed in a capitalist society. In a communist society “value” will not be so expressed. A communist society will have a planned economy and workers will know the value of the labor power they will devote to the production of the products needed by society. “Money” will not be necessary to measure this value. Engels notes that “all that would be left, in a communist society, of the politico-economic concept of value” is the knowledge by the workers/planners “of the useful effects and expenditure of labour on making decisions concerning production.”

The notion of “value” is the hallmark of a commodity based economy and, Engels says, it “contains the germ, not only of money, but also of all the more developed forms of the production and exchange of commodities.” The fact that this exchange takes place by means of money, and considering the complexity of production (i.e., that in some fields more or less of the socially necessary labor may be involved) “admits of the possibility that the exchange may never take place altogether, or at least may not realize the correct value.” This is especially true of the commodity labor-power which, as with all commodities, has its value determined by the socially necessary labor time it takes to produce it and can also be forced into service for longer periods of time than is socially necessary for its reproduction.

Once money has been invented within a primarily commodity producing society we will see its “first and most essential effect” which is the commodification of all aspects of society in which soon all social relations begin to be converted into money relations based on individual private interests. Engels mentions the dissolution of the common tillage system among Indian peasants and the same amongst the Russian peasants and their village communes. Inspired by Marx we might say “Privatize, Privatize, that is the Gospel and the Church!”

Now back to Dühring and his ilk. We cannot meaningfully talk about the “value of labor” and how to see that the worker gets his “full value” as Dühring does in discussing his system of communes. When you measure the value of commodities by the labor they contain you cannot then talk about the value of labor in the same way. Engels says it is the same with weight. We can measure the heaviness of commodities by their weight but we cannot talk about the heaviness of weight. What Dühring and others do is try to measure the “value” of labor by the products it makes (it should actually be measured by time) and then they think the function of socialism is to see to it that “the full proceeds of labour” are given to the workman. But this means the whole value of what the working class creates is returned to the workers in terms of each individual getting back all the value he has created.

This will of course leave nothing for the capitalists. What it overlooks is that “the most progressive function of society” is accumulation. This is why Marxists, by the way, tout the General Consumption Fund (GCF). The individual workers do not get back 100% of the value they have created. The “state” or whatever social arrangement that replaces it, takes a portion of the created value and puts into the GCF which then disperses it to society as a whole (rent and food subsidies, medical care, education, maintenance and replacement of machinery, etc.) The working class does get back the value it creates but collectively as well as individually. The Dühringean system would stagnate and fall apart– it is economic nonsense.

Finally, Engels points out that the law of value is “the fundamental law” of commodity production and so of capitalism “the highest form” of commodity production. The law of value dictates that commodities created by equal social labor are equal to each other– i.e., mutually exchangeable. In our day, as in Engels’, the only way this law can operate under capitalism is “as a blindly operating law of nature inherent in things and relations and independent of the will or actions of the producers.”

It is just this law that Dühring is appealing to when he dreams of creating communes where equal labor is exchanged for equal labor based on his “universal principle of justice.” He thinks it possible to keep capitalist economic relations but to abolish the abuses that such relations lead to. In this he completely resembles Proudhon who also wanted to “abolish the real consequences of the law of value by means of fantastic ones.”

Engels ends his chapter by comparing Dühring’s search for a new society based on his notions of just distributions to Don Quixote’s search for Mambrino’s helmet which turns up only the old barber’s basin.