Do rents really rise without human intervention?

It takes a lot of money to get people to vote against their own interests, and the real estate industry has plenty of money. Ideological obfuscation plays its part, too, and both contributed to a recent pair of defeats in San Francisco’s uphill fight against gentrification.

I happened to be in San Francisco in the days leading up to Election Day, and there seemed to be quite a lot of excitement over Proposition G, a modest proposal that would have instituted a tax on speculators buying and quickly selling tenant-occupied housing. “Yes on G” signs abounded and most, although not all, advocates I met believed it would pass. Why not? What renter could be against a law that might slow down, a little, skyrocketing rents? Nonetheless, the real estate industry poured $2 million into opposing Proposition G, outspending proponents 12-to-1, and it was defeated.

Only two weeks earlier, a federal judge overturned a law passed by the city government that would have forced landlords who kick tenants out of rent-controlled apartments to pay them the difference between the rent they had been paying and the fair market rate for a similar unit for a period of two years. An attempt to combat a steady upsurge in evictions, the judge nonetheless declared that skyrocketing rents aren’t the fault of landlords.

The rents go up all by themselves? Landlords by some lucky coincidence just happen to be the beneficiaries of some mysterious process outside of human control?

San Francisco's Haight-Ashbury district (photo by "Urban")

San Francisco’s Haight-Ashbury district (photo by “Urban”)

Ah, yes, the magic of the market at work again. The federal judge who handed down the ruling, Charles Breyer, has a reputation as a liberal. Yet he had no hesitation in grounding his ruling in orthodox economic ideology, largely echoing the arguments of the hard right, libertarian Pacific Legal Foundation, which represented the landlords. Judge Breyer went so far as to call the requirement a confiscation and “an impermissible monetary exaction.” But the law would not have stopped landlords from throwing tenants into the street so they could bring in new tenants who would pay more, merely ameliorate the cost to the evicted tenant.

Lawyers for the city of San Francisco argued that the two-year rent-differential payment would be “roughly proportional to the harm they impose on their tenants by evicting them from a rent-regulated unit and forcing them to seek new housing at market rates.” That is a real consequence, as the average San Francisco rent of a one-bedroom apartment is $3,100. It would require the combined salaries of 4.6 full-time jobs at San Francisco’s minimum wage to afford the average two-bedroom apartment there, according to the National Low Income Housing Coalition.

More than 10,000 San Franciscans have been evicted under a state law, the Ellis Act, that enables landlords to “exit” the landlord business (although in many cases, they “re-enter” the business after the previous tenants are evicted). The Tenants Together study that reported that total notes that it actually accounts for a small percentage of Ellis Act-related evictions as many others are forced out by the threat of an Ellis Act eviction and do not count toward the official statistic.

Court says landlords who evict are bystanders

Judge Breyer, nonetheless, blamed “market forces” and that favorite right-wing bogey, rent control, for runaway rents. Landlords, therefore, are innocent victims. In his decision, the judge wrote:

“[The law] seeks to force the property owner to pay for a broad public problem not of the owner’s making. A property owner did not cause the high market rent to which a tenant who chooses to stay in San Francisco might be exposed, nor cause the lower rent-controlled rate the tenant previously enjoyed.”

There you have it: If you are in the way of a speculator or a developer wanting to maximize their profits, get lost. That is simply a more polite way to say what former New York City Mayor Ed Koch said as gentrification got underway there in the 1980s: “If you can’t afford New York, move!”

Lost in these legal and ideological thickets are that landlords are cashing in on the sweat of others, including those they force out. Gentrification is a deliberate process. Organic cultures originating in the imagination, sweat and intellectual ferment of a people living in a particular time and place who are symbolically or actually distinct from a dominant moneyed mono-culture are steadily removed and replaced by corporate money and power, which impose a colorless chain-store conformity.

Those organic cultures then became selling points to promote the targeted neighborhood, cashed in not by those who created it but by real estate interests. Local governments facilitate this process on behalf of developers, tempered by the ability of movements from below to slow the process.

The fallback position of the Pacific Legal Foundation, also adopted by the judge, was that the two-year rent-differential payment would be unfair anyway, because there was no requirement that the payment be used toward rent. The San Francisco city attorney pointed out that the recipient of such a payment would have no choice but to spend it on new housing. But the Pacific Legal Foundation attorney admitted that were such a requirement in place, it would have opposed the law just the same.

The city of San Francisco has announced it will appeal Judge Breyer’s ruling to the U.S. Court of Appeals for the Ninth Circuit. “There should be no doubt that when a landlord evicts a rent-controlled tenant, the immense rent increase the tenant faces is the direct result of the landlord’s decision to evict,” the city attorney, Dennis Herrera, said. A decision acknowledging that would be one grounded in the real world, rather than the phantasmagoria of orthodox economics and its insistence that “markets” are based in the clouds, beyond human touch. In the real world, the landlords, developers and bankers who profit are the real estate market.

A flood of real estate money

Two weeks later, Proposition G failed, with 54 percent against and 46 percent voting in favor. Prop G proposed a “speculation tax” whereby a buyer of a multi-unit property would have to pay a tax surcharge if the building were sold in less than five years; the charge would range from 24 percent in the first year to 14 percent between four and five years. After five years, there would be no such tax surcharge. Because it was designed to be applied only to speculators, the proposed tax had several exemptions, including all single-family buildings and any building sold at a loss.

A heavy barrage of landlord mailings, including false claims that all properties would be covered, was too much for housing activists to overcome. Nonetheless, in a survey of activist responses after the vote published on the 48 Hills blog, there seemed to be a consensus that the effort to talk to people in the streets changed many minds, came close to overcoming the real estate industry’s 12-to-1 spending advantage and set the stage for further efforts that could succeed. The author of this article, Gen Fujioka, policy director for the Chinatown Community Development Center, quoted Causa Justa/Just Cause organizer Maria Zamudio:

“In this election we made major gains in organizing working class immigrants, seniors, low-wage workers, parents, and tenants, firing people up around the demand that they, too, deserve to live in San Francisco. … While it did not win this year, Prop G was part of a larger [local] progressive narrative that did win [including a minimum-wage measure that passed]. That narrative, along with the tools developed and relationships built in this campaign, will be the foundation on which we can continue to grow.”

Another activist, Randy Shaw of the Tenderloin Housing Clinic, believes that a greater emphasis on community organizing would make a difference. Proposition G had been placed on the ballot by four members of the city Board of Supervisors (San Francisco’s city council), rather than by activists collecting signatures, a strategy he believes should be reconsidered. He writes:

“Had the anti-speculation tax gone the signature route, activists would have recognized when the Title and Summary for the initiative petitions was prepared that the very popular idea of ‘stopping the flip’ did not translate well into a ballot measure. At that point a decision could have been made to alter it in some way as to either guarantee that the words ‘eviction’ or ‘speculator’ were included in the ballot question, or to seek to broaden the support base before going forward. … [T]he months spent talking to voters during the petition gathering process would have educated thousands about the issue. It would have insulated these voters from the big money attacks that created, and sought to provoke, confusion about what Prop G meant.”

The influx of technology-company employees may have also tipped the balance. It is difficult to speculate as I have no seen no surveys or breakdowns of the Proposition G vote, but it is possible that techies, many of whom absorb their corporate leaders’ libertarian political tendencies, voted in large numbers against. The group Techies Who Vote called on the technology industry to “exercise its electoral muscle” and vote against Prop G and progressive candidates who supported the measure.

Don’t mourn, organize

Organization is the only recourse against further gentrification, in San Francisco and elsewhere. But reversing the powerful moneyed interests that profit from it is no small task. A local organizer, Mike Miller, writing in CounterPunch, laments the fading of coalitions such as the Mission Coalition Organization that won many battles on behalf of tenants but was unable to coalesce into a force strong enough to reach neighborhood-wide agreements with landlord representatives. He writes:

“Regulation replaced organizing as the strategy to protect tenant interests—a voter-passed initiative created a rent control law, and a Rent Control Board to administer it. Electoral politics rather than mass, disruptive, nonviolent action became the means to enforce the strategy. Each, alone, is insufficient. ‘The market’ overwhelms them: too much demand for too little supply.

Unfortunately, there is no capacity now to negotiate with landlords, developers, lenders and others who profit from this run-amuck market. There is no longer a mass organization that might hurt profits and politicians’ careers by its capacity for boycotts, disruption, lobbying and electoral action.”

The inability to stop gentrification then has ramifications for surrounding areas. Across the bay, Oakland rents have risen 15 percent this year after rising 12 percent in 2013. Housing developments, with little affordable set-asides, are mushrooming in Oakland and evictions are increasing.

That, of course, is not merely a local phenomenon. The average net income from building ownership in New York City has increased 31.5 percent since 1990 — rents collected have risen faster than expenses. Nationally, real estate prices have been increasing faster than inflation since the 1960s. Thus it is no surprise the share prices of real estate investment trusts have more than quadrupled since early 2009.

This is the result of allowing “market forces” to control housing. The way out is for housing to be recognized as a human right, instead of a capitalist commodity to be bought and sold by the highest bidder. That, however, will require a different, better world.

Forward to the past: Next stop, the 19th century

If capitalism is taking us back to feudalism, we’ll have to pass through the 19th century on our way. In terms of wealth inequality, we’re on course to return to the century of robber barons. Back then, the public-relations industry hadn’t developed, so at least they were called by an honest name, instead of “captains of industry” or “entrepreneurs” as they are today. Although “heir” would frequently be far more accurate than “entrepreneur.”

We’re not at the 19th century yet, but we have arrived at the 1920s on our trip to the past. The level of inequality of wealth in the United States today has not been seen since the decade that led to the Great Depression.

The top 0.1 percent — that is, the uppermost tenth of the 1% — have about as much wealth as the bottom 90 percent of United Statesians. To put it another way, approximately 320,000 people possess as much as do more than 280 million. It takes at least $20 million in assets to be among the top 0.1 percent, a total that is steadily rising.

An altered version of a Depression-era image. (Image by Mike Licht, NotionsCapital.com)

An altered version of a Depression-era image. (Image by Mike Licht, NotionsCapital.com)

Emmanuel Saez, an economics professor at the University of California, and Gabriel Zucman, a professor at the London School of Economics, examined income-tax data to reveal these numbers. They write that they combined that data with other sources to reach what they believe is the most accurate accounting of wealth distribution yet, one that shows inequality to be wider than previously imagined. The authors define wealth as “the current market value of all the assets owned by households net of all their debts,” including the values of retirement plans with the exception of unfunded defined-benefit pensions and Social Security. (The reason for that exclusion is that those moneys do not yet exist but are promises to be kept sometime in the future.)

The authors’ paper, “Wealth Equality in the United States since 1913: Evidence from Capitalized Income Data,” reports that, for the bottom 90 percent, there was no change in wealth from 1986 to 2012, while the wealth of the top 0.1 percent increased by more than five percent annually — the latter reaped half of total wealth accumulation.

The 22 percent of total wealth owned by the top 0.1 percent is almost equal to what that cohort owned at the peak of inequality in 1916 and 1929. Afterward, their total fell to as low as seven percent in 1978 but has been rising ever since. At the same time, the combined wealth of the bottom 90 percent rose from about 20 percent in the 1920s to a peak of 35 percent in the mid-1980s, but has been declining ever since. Although pension wealth has increased since then, Professors Saez and Zucman report, the increase in mortgage, consumer-credit and student debt has been greater.

Nonetheless, this might still be an underestimation — the authors write that they “still face limitations when measuring wealth inequality” because of the ability of the wealthy to hide assets off shore or park them in trusts and foundations.

Inequality on the rise

Although rising throughout the developing world, inequality is particularly acute in the United States. Among the nearly three dozen countries that make up the Organisation for Economic Co-operation and Development, only three (Chile, Mexico and Turkey) have worse inequality than does the U.S., measured by the gini coefficient. The standard measure of inequality, the more unequal a country the closer it is to one on the gini scale of zero (everybody has the same) to one (one person has everything).

Of course, were we to measure inequality on a global scale, the results would be more revealing. Even the U.S. gini coefficient of 0.39 in 2012 pales in comparison to the global gini coefficient of 0.52 as calculated by the Conference Board of Canada. To put it another way, global inequality is comparable to the inequality within the world’s most unequal countries, such as South Africa or Uganda.

How to reverse this? Professors Saez and Zucman offer reforms that amount to a return to Keynesianism. They advocate “progressive wealth taxation,” [page 39] such as an estate tax; access to education; and “policies shifting bargaining power away from shareholders and management toward workers.” Such policies would surely be better than the austerity that has been on offer, but the authors’ wish that this can simply be willed into existence is quite divorced from capitalist reality.

Indeed, the authors go on to lament that one factor in stagnant incomes is that “many individuals … do not know how to invest optimally.” It is difficult to believe that these two learned economists are unaware of the relentless chicanery of the financial industry. How does one invest “optimally” in a rigged casino stacked against you?

The past is not the future

Fond wishes for the return of Keynesianism will not bring those days back. (And, of course, if you weren’t a white male those days weren’t necessarily golden anyway.) The Keynesian consensus of the mid-20th century was a product of a particular set of circumstances that no longer exist. Keynesianism then depended on an industrial base and market expansion. A repeat of history isn’t possible because the industrial base of the advanced capitalist countries has been hollowed out, transferred to low-wage developing countries, and there is almost no place remaining to which to expand. Moreover, capitalists who are saved by Keynesian spending programs amass enough power to later impose their preferred neoliberal policies.

Capitalists tolerated such policies because profits could be maintained through expansion of markets and social peace bought. This equilibrium, however, could only be temporary because the new financial center of capitalism, the U.S., possessed a towering economic dominance following World War II that could not last. When markets can’t be expanded at a rate sufficiently robust to maintain or increase profit margins, capitalists cease tolerating paying increased wages.

And, not least, the massive social movements of the 1930s, when communists, socialists and militant unions scared capitalists into granting concessions and prompted the Roosevelt administration to bring forth the New Deal, were a fresh memory. But the movements then settled for reforms, and once capitalists no longer felt pressure from social movements and their profit rates were increasingly squeezed, the turn to neoliberalism was the response.

Nobody decreed “We shall now have neoliberalism” and nobody can decree “We shall now have Keynesianism.” Capitalist market forces — once again, simply the aggregate interests of the most powerful industrialists and financiers — that are the product of relentless competitive pressures have led the world to its present state and the massive inequality that goes with it.

Even if mass social movements build to a point where they could force the imposition of Keynesian reforms, the reforms would eventually be taken back just as the reforms of the 20th century have been taken back. The massive effort to build and sustain movements capable of pushing back significantly against the tsunami of neoliberal austerity would be better mobilized toward a different economic system, one based on human need rather than private profit.

Reforming what is ultimately unreformable is Sisyphean. Going back to the mid-20th century Keynesian era, even were it possible, would be no more than a detour on the way to the 19th century. Building a better world beats nostalgia.

New development banks unlikely to threaten World Bank

Forecasts that new development banks sponsored by the largest developing countries are destined to erode the economic dominance of the United States are quite premature, but it is nonetheless no contradiction that the global hegemon has vigorously sought to stop them. More than a little hypocrisy is at work here.

The newly created Chinese-led Asian Infrastructure Investment Bank has drawn much more of Washington’s ire than has the BRICS New Development Bank formed by the five “BRICS” countries of China, Russia, India, China and South Africa. The U.S. government has leaned heavily on Australia and other countries sufficiently firmly that Canberra has declined to join the Asian Infrastructure Investment Bank despite its initial interest, nor have Indonesia and South Korea.

Although the infrastructure bank is to be capitalized with US$100 billion, it would be ridiculous to say that the World Bank or International Monetary Fund will be put out of business. It will not necessarily go much beyond complementing the existing Asian Development Bank, a regional multi-lateral institution controlled by the U.S. and Japan. And even the World Bank says Asia will require trillions of dollars to build its infrastructure in coming years that it and existing institutions can’t supply.

Protest at the World Bank. (Photo by "Jenene from Chinatown," New York City)

Protest at the World Bank. (Photo by “Jenene from Chinatown,” New York City)

The politics of imperialism are at work here. The very idea that a country outside the control of the U.S. dares to set up an institution outside the control of the U.S. is an example that Washington, as the ultimate enforcer of multi-national corporations’ prerogatives, is determined to stamp out.

In a front-page article, The New York Times reported:

“American officials have lobbied against the [infrastructure] bank with unexpected determination and engaged in a vigorous campaign to persuade important allies to shun the project, according to senior United States officials and representatives of other governments involved.”

And what excuse does the U.S. government give for its opposition? Officially, the Obama administration is not talking, but, quoting a “senior official” granted anonymity, the Times reports:

“A senior Obama administration official said the Treasury Department had concluded that the new bank would fail to meet environmental standards, procurement requirements and other safeguards adopted by the World Bank and the Asian Development Bank, including protections intended to prevent the forced removal of vulnerable populations from their lands. … ‘How would the Asian Infrastructure Investment Bank be structured so that it doesn’t undercut the standards with a race to the bottom?’ asked the senior official.”

Has the Obama administration, or, more accurately, the government apparatus that has steered U.S. policy on behalf of corporate interests for generations, suddenly grown a conscience? Quite unlikely. The World Bank and International Monetary Fund, as well as regional banks such as the Asian Development Bank, have been under U.S. suzerainty since their founding. Does the World Bank really uphold development ideals? The record firmly says otherwise.

The World Bank’s record of destruction

The World Development Movement, a coalition of local campaign groups in Britain, reports that the World Bank has provided more than US$6.7 billion in grants to projects that are destructive to the environment and undermine human rights, a total likely conservative. To cite merely three of the many examples, the World Bank:

  • Loaned an energy company in India more than $550 million to finance the construction of two coal-fired power plants. Local people, excluded from discussions, were beaten, their homes bulldozed and complain of reduced food security and deteriorating health as a result of the power stations.
  • An Indonesian dam, made possible by the World Bank’s $156 million loan, resulted in the forcible evictions of some 24,000 villagers, who were subject to a campaign of violence and intimidation.
  • In Laos, a hydropower project made possible by World Bank guarantees displaced at least 6,000 Indigenous people and disrupted the livelihoods of around 120,000 people living downstream of the dam who can no longer depend on the rivers for fish, drinking water and agriculture.

A study of World Bank policies, Foreclosing the Future by environmental lawyer Bruce Rich, found that:

“Drawing on Bank studies, project evaluations and sectoral reviews, it is shown that the World Bank still suffers from a pervasive ‘loan approval culture’ driven by a perverse incentive system that pressures staff and managers to make large loans to governments and corporations without adequate attention to environmental, governance and social issues. In 2013, Bank Staff who highlight social risks and seek to slow down project processing still risk ‘career suicide.’ … [The bank] has continued to binge on enormous loans to oil and gas extraction, coal-fired power stations and large-scale mining generating environmental damage, forest loss and massive carbon emissions.”

A study prepared by the Institute for Policy Studies and four other organizations found that World Bank lending for coal, oil and gas was $3 billion in 2008 — a sixfold increase from 2004. In the same year, only $476 million went toward renewable energy sources.

It could be pointed out that China’s industrialization has had serious environmental consequences, and that Chinese money was critical to the building of the Three Gorges Dam, the construction of which led to the forced removal of at least 1.3 million people. True enough, but Canadian, French, German, Swiss, Swedish and Brazilian capital were also necessary to build the dam. The World Bank also provided loans associated with Three Gorges and provided experts during the project’s planning stages.

Despite the pressure from Washington, 21 countries signed up to be founding members of China’s Asian Infrastructure Investment Bank, including India, Singapore and the Philippines.

BRICS bank expected to bow to the logic of capital

China’s new bank was formed three months after the BRICS New Development Bank. The BRICS bank will be more modest, with a goal of US$100 billion capitalization, spread equally among the five countries. In a July 2014 communiqué, the five countries said their bank will have the “purpose of mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging and developing economies.” They also pledged to organize a “BRICS Contingent Reserve Arrangement” to “help countries forestall short-term liquidity pressures” resulting from foreign-exchange or debt markets.

Although this bank is intended as a gesture of independence from the U.S.-dominated world financial system, and will use some combination of the BRICS currencies, detaching from the world system is not a simple matter of setting up new institutions. A New Delhi economics professor, C.P. Chandrasekhar, sees the bank being limited in what it can potentially do. Writing on Naked Capitalism, he said:

“However, the new development bank is fundamentally not detached from the global financial system. Being a bank, even if a specialised one, it must ensure its own commercial viability. And it must do so when a large part of the resources it lends would be mobilised from the market. … [W]anting to be seen as respectful of the sovereign interests of borrowing countries, the [New Development Bank] would be careful not to frame its lending rules in ways that threaten the policy sovereignty of borrowing countries. If the countries that approach the institution are pursuing neoliberal strategies, there may be clear limits in terms of what the new development bank itself can achieve.”

Professor Chandrasekhar concludes:

“The decision of the BRICS to set up mini-versions of the World Bank and the IMF seems to be more a symbolic declaration of resentment at the failure of the US and its European allies to give emerging countries a greater say in the operations of the Bretton Woods institutions. … The desire to redress the obvious inequities in the global financial system seems far less important.”

If it is a safe haven, it is not going away

That, for at least the near future, U.S. hegemony is not threatened received fresh confirmation during October’s week-long decline in the world’s stock markets — money from around the world quickly poured into U.S. treasuries as a safe haven. From a capitalist standpoint, doing so is entirely rational: If the U.S. government unravels, the entire global capitalist system disintegrates.

Although predictions of the U.S. eventually being dethroned will one day come true — every empire has an expiration date — that such a dethronement is imminent is wishful thinking. This is not to say that U.S. power is not eroding, but there is no conceivable replacement for the U.S. at the center of the world capitalist system. The U.S. spends about as much money on its military as every other country on Earth combined and the dollar remains the world’s reserve currency; that the world continues to buy U.S. debt as a safe haven enables the U.S. to continue to run up deficits and finance its military.

There is no military remotely in a position to become the global enforcer of capital, nor any currency that could replace the dollar at the present time. The euro is not a candidate because the eurozone is too fractured and unstable; the renminbi is not fully convertible. According to the Bank of International Settlements, the U.S. dollar was involved in 87 percent of the world’s foreign-exchange transactions in April 2013, while the euro was involved in 33 percent and the renminbi in 2 percent.

The U.S. needs China to buy its debt but China needs the U.S. as an export destination; Chinese growth continues to be dependent on unsustainable levels of investment rather than internal consumption, a situation difficult to adjust because production is moved to China to take advantage of its low sweatshop wages. A contradiction on the other side of the Pacific is that U.S. foreign policy treats China as a capitalist competitor that must be contained at the same time that U.S.-based multi-national corporations are instrumental in transferring production to China.

A change in the global hegemon from the U.S. to another country or bloc, leaving the capitalist system intact, provides no salvation, no more than did the early 20th century’s transfer from Britain. Another world is possible only with an entirely new economic system. Otherwise, the subaltern will remain subaltern, be they nation or people.

Taking back the imagination

Of the many myths propping up capitalism few are more essential than the carefully tended concept of “imagination.” Capitalism supposedly unleashes the human imagination, enabling individuals to fulfill their potential and continually “disrupting” older systems to bring forth the new and improved. Shattering this mythology is one of the tasks of movements.

The ever active engineers of capitalist ideology, to be sure, possess the ability to shape human consciousness through the ability to exert decisive influence over of myriad of institutions. But to what end? Is the massive failure to meaningfully grapple with the myriad of crises not a failure of imagination?

It is imagination that is stifled under capitalism, argues Max Haiven in his engaging book Crises of Imagination, Crises of Power: Capitalism, Creativity and the Commons.* The crisis is capitalism, Professor Haiven argues: The fundamental amorality of the capitalist system itself is the cause of the world’s difficulties, not a lack of regulation nor the greed of individuals.

That message is present throughout the book. In the opening pages, Professor Haiven writes:

“[C]apitalism relies not only on the brutal repression of workers in factories and fields; it also relies on conscripting our imaginations. On a basic level, it relies on each of us imagining ourselves as essentially isolated, lonely, competitive economic agents. It relies on us imagining that the system is the natural expression of human nature, or that it is too powerful to be changed, or that no other system could ever be desirable. … While the system is ultimately held in place by the threat and exercise of very real violence and the concentration of very material wealth and power in the hands of the ruling class, its imaginary and imaginative dimensions cannot be ignored.” [pages 7-8]

Crises of ImaginationThe book is mostly a series of essays written for various publications that have been revised; this format is both strength and weakness. It is a strength because the author is able to present arguments on aspects of capitalist domination that receive less attention that they should, such as the neoliberal assault on education and the enclosures of the commons, not as a historical crime of the past but as an ongoing process happening today. It is something of a weakness because the various pieces of a full picture are not necessarily welded together, however much the cumulative effect of the author’s strands of thought do add up to a powerful argument.

One of these strands is a needed discussion of narrative — that is, the Right’s success at manipulating emotion versus the Left’s difficulties in gaining footholds in the popular imagination. There is not a level playing field here, of course. It is the very lack of content to Right-wing “values” that makes its rhetoric effective, Professor Haiven argues, because terms without content stand in for emotions, phobias and feelings. The Right uses emotion to get people to hate, whereas the Left is more “abstract, general and preachy.” Facts and statistics are important but insufficient by themselves. What is necessary are common values as the “bedrock” of revolutionary change.

Imagination as building block of social movements

Values should be flexible and negotiable, rather than fixed or dictated. Movement work and the creation of values should be a mutually reinforcing process. A central task, the author writes:

“is to imagine and build social formations that make the constant renegotiation of values central and operative. This is, for instance, the value of horizontal organizing and diversity in social movements: they force a constant questioning and recalibration of values not as hard, fixed and eternal ideals but as working models for collaboration.” [page 55]

Within capitalist logic, we are worthless and replaceable cogs, set at one another’s throats.

“[T]he Chinese teenager becomes a threat to my job because she can work for less and her company can attract the corporation that used to employ somebody like me. Meanwhile, it is my anonymous consumer appetites, driven by my dislocation from community and my need to survive in an austere world, that demands the conditions of that Chinese worker’s exploitation. And the unfortunate fact is that I’m effectively worthless in this equation too: I could choose to not buy the iPod, but someone else will. Everyone is utterly replaceable in this system.” [page 55]

And on their own. Financialization shifts risks to the individual, his or her retirement dependent on the mercy of stock markets far beyond his or her control; universities are reduced to neoliberal showpieces that convert students into individualized debtors with no mission beyond issuing a ticket for a future job; language is debased to co-opt the meaning of “creativity” to twist it into underpaid labor in a neoliberal workforce that does nothing more than hype mindless consumerism; and mass culture is reduced to the buying of corporate products.

The author produces compelling arguments detailing these and other outcomes of modern capitalist society. But the underlying economic processes and structures underlying neoliberal assaults on ever more aspects of public life are largely missing from Crises of Imagination. This is perhaps not an entirely fair criticism because the book is a philosophical work, not an economic one. The author himself concludes his introduction by humbly writing that “I cannot claim to have done anything particularly innovative” nor, he says, is the book an attempt at a systemic theory. Fair enough.

Professor Haiven is correct when he writes that confronting capitalist power today requires far more than cutting down the size of banks, that it is too simple to believe that finance is merely a force imposed on society from above, and that financialization imposes shifts in corporate behavior that lead to faster recourse to layoffs and moving production to low-wage havens. But it is puzzling to read that “the new paradigm subordinates capitalism itself to the increasingly short-term, ruthless and pathological imagination of ‘the market.’ ” [page 108]

I have no argument with that description of “the market,” but it obscures that such markets are indistinguishable from capitalism. Capitalist markets are nothing more than the aggregate interests of the most powerful industrialists and financiers, and can not be anything else. The very process of financialization — whereby financiers, acting as both whip and parasite, impose discipline on corporations to act ever more ruthlessly while simultaneously grabbing larger shares of the profits extracted from employees — is the product of the natural development of capitalism, not an intervention. Capitalism can not be separated from markets, much less “subordinated” to its own engine.

Taking back our imagination to overturn the concrete

But let us not go overboard with critiques. Crises of Imagination, while not necessarily, per its author, an innovative work, does formulate its arguments very well, with some original conceptions. For an example, in one of the book’s strongest chapters, on the “edu-factory,” Professor Haiven wittily draws an analogy between the subordination of the university to the interests of neoliberal capital accumulation and the show trials of the 1930s. He writes:

“The desperate self-privatization of the neoliberal university is the late-capitalist equivalent of the Stalinist show trial. The broken university, after years of secreted economic torture, is made to confess its own profligacy and lack of obedience to the austerity regime. Yet even this gaunt, emaciated, broken figure, which has betrayed all its once proud (perhaps vain) values, is not spared the cuts. The constant and unending attack on the university is a grim warning to all institutions and individuals from the oblique, unapologetic totalitarian power of global capital: ‘We do not care if we are wrong or if our policies are ineffective in their stated goals. We do not care if we have to kill you all and destroy the planet. We do not care if you know it. Money will rule.’ ” [page 139]

But we do not have to accept the permanent rule of industrialists and financiers. A radical rethinking of society can’t be accomplished without our taking back our imagination, although, the author cautions, current social relations are not simply ‘imaginary’ but are rooted in concrete power imbalances. But we can’t imagine or create a blueprint for the future because the future can’t be planned and any such blueprints would contain some of the poison of today’s world. As capitalism accelerates exploitation and dislocation, the possibilities for future forms of struggle also accelerate, although they will not automatically be liberatory.

The radical imagination emerges out of radical practice, but no single practice can be sufficient on its own, the author writes. Imagination is a process of collective doing; imagination creates reality and reality creates imagination. Professor Haiven concludes:

“A revolution is not made of good ideas, but rather by good ideas materialized in social spaces. Solidarity is not a matter of having the right political ideals and sympathies, but of building real, tangible relationships. … [I]magination as a shared capacity grows out of social cooperation, alternative-building and the establishment of a new commons.” [page 265]

The reader seeking an analysis of capitalist economics can find works more on point. But anybody wanting a sweeping polemic on the totalizing effects of capitalism — and polemic here is meant in the positive sense of the word, as a constructed argument logically built — will find a well-written, engaging weapon in their hands. A fine use of the imagination engaging with concrete reality.

* Max Haiven, Crises of Imagination, Crises of Power: Capitalism, Creativity and the Commons. Zed Books, London and New York; Fernwood Publishing, Black Point, Nova Scotia, Canada, and Winnipeg, 2014]

The ‘medicine’ of the Trans-Pacific Partnership as bitter as ever

The Trans-Pacific Partnership is as dangerous as ever. Denying access to medicines, increased surveillance of Internet usage and mandatory patents at the behest of multi-national corporations are some of the corporate goodies stashed in the TPP’s intellectual property chapter, revealed by WikiLeaks this month. Journalism could even be criminalized.

The more we know about the TPP, the worse it gets, which is why the governments of the 12 countries involved, led by the Obama administration, continue to negotiate in unprecedented secrecy. The latest text of the TPP’s intellectual property chapter shows very little change from an earlier draft also published by WikiLeaks. In a press release accompanying this month’s publication of the revised text, WikiLeaks says:

“[T]here are significant industry-favouring additions within the areas of pharmaceuticals and patents. These additions are likely to affect access to important medicines such as cancer drugs and will also weaken the requirements needed to patent genes in plants, which will impact small farmers and boost the dominance of large agricultural corporations like Monsanto.”

An analysis by Public Citizen explains:

“A rule [would] require the patenting of plant-related inventions, such as the genes inserted into genetically modified plants, putting farmers in developing countries at the mercy of the agriculture industry, including seed manufacturers such as Monsanto, and threatening food security in these countries more broadly.”

The architecture of Melbourne

The architecture of Melbourne

Monsanto, already attempting to gain a stranglehold over the world’s food supply, is hardly in need of yet more favorable treatment. Proprietary seeds and genetically modified organisms are Monsanto’s routes to control what you eat and what farmers grow. Once under contract, farmers are required to buy new genetically engineered seeds from the company every year and the Monsanto herbicide to which the seed has been engineered to be resistant.

Stealth ‘fast-track’ process needed to sneak TPP through Congress

Concomitant to the secrecy shrouding the TPP is the stealth needed to pass the “free trade” treaty. The Obama administration is seeking to be given “fast-track” authority by Congress. Under the fast-track process, Congress cedes its right to make any changes, limits its time to debate, and must schedule a straight yes-or-no vote (no amendments allowed) in a short period of time. Some of the worst “free trade” deals have been approved in this manner, and the importance of fast-track is shown in that the last U.S. trade pact approved, with South Korea, was approved in 2007 — literally one minute before fast-track authority expired!

A fast-track bill, known as Camp-Baucus for its two sponsors, was essentially dead on arrival early this year due to widespread opposition in Congress, mostly by Democrats but also some Republicans. That this arose was because of organized activist work by groups across the United States. But Democratic Senator Ron Wyden, last April, signaled his intention to introduce a new fast-track bill, which he rebranded “smart track.” U.S. activists widely speculate that either Senator Wyden’s thinly disguised “smart track” bill or a more openly fast-track bill, perhaps written by Republicans in the House of Representatives, will be introduced in Congress following the November election with the intention of ramming it through a lame-duck session.

U.S. activists for the past year and a half have focused on stopping fast-track in Congress because it will be virtually impossible to pass the TPP otherwise. Other countries have signaled their reluctance to agree to a final TPP text unless Congress grants the Obama administration fast-track authority. Without such authority, Congress would retain the right to make changes to an agreed-upon treaty, potentially unraveling any deal. The Canadian government, in late September, made this reluctance explicit.

Washington Trade Daily recently reported that the Canadian ambassador to the U.S., Gary Doer, said Canada and other negotiating countries won’t conclude negotiations until the Obama administration has the “political muscle” of trade-promotion authority (the formal name for fast-track). Thus, activists advocate no lessening of vigilance against new attempts to introduce fast-track legislation. A Week of Action Against Fast Track is being organized for November 8 to 14 in the U.S. In Australia, a series of rallies opposing the TPP are taking place this week in Sydney and Canberra.

These efforts come against a renewed push for a completed deal; negotiators are meeting this week, to be immediately followed on October 25 by a ministerial-level meeting in Sydney.

Criminalizing your right to know

There is much to oppose in the Trans-Pacific Partnership itself. A trade-secrets provision in the leaked intellectual property chapter is written in a way that makes it possible for reporting the contents of a future trade deal to be prosecuted. The article in question states:

“In the course of ensuring effective protection against unfair competition … each Party shall ensure that natural and legal persons have the legal means to prevent trade secrets lawfully in their control from being disclosed to, acquired by, or used by others (including state commercial enterprises) without their consent in a manner contrary to honest commercial practices.”

Criminal penalties would be mandatory for:

“the unauthorized, willful access to a trade secret held in a computer system; the unauthorized, willful misappropriation of a trade secret, including by means of a computer system; or the fraudulent (or unauthorized) disclosure of a trade secret, including by means of a computer system.”

WikiLeaks’ publication of this text would be a criminal matter under this provision. This provision would make it mandatory for signatory governments to enact strict laws protecting undefined “trade secrets.” The text of the TPP itself is classified as a secret! Legislators and the public are excluded from seeing the text. In the United States, the only people other than negotiators to have access to the text are 605 “advisers,” who are almost all executives of multi-national corporations or corporate lobbyists.

The Age newspaper of Melbourne summarizes the threat to journalism this way:

“The leaked treaty text shows that in an effort to deal with ‘unfair competition,’ largely from Chinese industrial espionage, the United States has pushed ahead with proposals to criminalise disclosure of trade secrets across the Pacific Rim. The draft text provides that TPP countries will introduce criminal penalties for unauthorised access to, misappropriation or disclosure of trade secrets, defined as information that has commercial value because it is secret, by any person using a computer system.  …

There are no public interest or free speech exemptions. Criminalisation of disclosure would apply to journalists working for commercial media organisations or wherever the leak was considered harmful to the ‘economic interests’ of any TPP country.”

Barriers to cheaper generic medications

Other rules in the TPP intellectual property text would raise barriers to generic medications becoming available and mandating that the terms of patents be extended on demand by patent holders. The United States and Japan even propose language that would require intellectual property enforcement to be elevated above any other legal consideration! The U.S. is also seeking the criminalization of copyright infringement, even in cases where there is no attempt to gain financially, such as a fan posting a work, and would also mandate that Internet service providers remove content upon a corporation’s demand to avoid legal penalties.

The linchpin to enforcement of draconian rules — the worst of which are put forth by the United States with Japan often seconding — is the “investor-state dispute mechanism.” That is a requirement that governments submit to binding arbitration in secret tribunals when an “investor” wants a law changed; the judges in these tribunals are corporate lawyers.

The dispute mechanism is not directly mentioned in the intellectual property chapter, but the one article that purports to uphold national sovereignty is contradicted by another article that mandates that multi-national corporations be given the same rights as national corporations. That clause, standard in “free trade” agreements, is a battering ram used by the secret tribunals to order the withdrawal of laws safeguarding environmental, safety, health or labor standards. These rulings, in turn, become precedents that are used to hand down future harsher decisions.

The Trans-Pacific Partnership, however, is far from the only danger to working people. There is also the Transatlantic Trade and Investment Partnership between the U.S. and the E.U.; the Trade In Services Agreement that would eliminate the ability of governments to regulate the financial industry (50 countries are in on this one); and the Canada-European Union Comprehensive Economic and Trade Agreement. Each of these are designed to elevate corporations to the level of a country, although in practice, because of tribunal precedents, they would elevate corporations above national governments.

“Free trade” agreements have little to do with trade, and much to do with imposing the domination of capital in as many spheres of life as possible. They are massive failures for working people in all countries. They offer, and can offer, nothing but a race to the bottom. Attempting to reform a race to the bottom is a fool’s errand. The TPP and its equally vile cousins must be defeated, and a complete re-conceptualization of trade and who should benefit from trade, substituted. That in turn requires directly challenging prevailing economic systems, otherwise we will be shoveling against the tide.

It takes more than ‘bad apples’ to instill de-humanization

If we want to understand why so many professional athletes engage in sexually predatory behavior, or, at minimum, act so entitled, we can’t do so without taking a look at the cultures surrounding high school athletics.

The path to athletic entitlement passes through many Sayrevilles and Steubenvilles. There is not necessarily anything unique about Sayreville, New Jersey, or Steubenville, Ohio, nor their high school football teams, however much they serve as examples. The Steubenville case, in which two football players were found guilty of the rape of a girl who was not only raped while unconscious but dragged naked from party to party as a trophy, surely exemplifies towering senses of privilege.

Incredibly — or maybe not so surprising in light of the town rallying around its football team rather than the rape victim — one of those players is back on the Steubenville football team this fall. A convicted sex offender, who must register with the authorities for the next 20 years, is allowed back on the field. So much for athletics as a “privilege.” Worse, the Anonymous activist who drew attention to the rapes and the local culture of impunity is facing several times more jail time than the convicted rapists.

Sayreville, nearby towns and the Raritan River (Photo by Doc Searls)

Sayreville, nearby towns and the Raritan River (Photo by Doc Searls)

It remains to be seen what will happen to the seven players (so far) on the Sayreville War Memorial High School football team charged with sexual assault, hazing and other counts. This case is distinguished by the players allegedly assaulting younger teammates. Here again, nearly as shocking at the inhumanity of such cruel hazing, is that many people in Sayreville chose to rally around the football team, demanding a reversal of the decision to cancel the remainder of the season rather than justice for the assault victims.

No different were the reactions of many Pennsylvania State University students, when the years-long sexual assaults of young boys by an assistant football coach, and the indifference to it by head coach Joe Paterno and the Penn State administration, were finally uncovered. Rather then react with anger at a monstrous breach of trust, some students staged a riot because Paterno was fired and, more broadly, the Penn State community complained that the penalty on the program was too harsh. Forgotten were the victims of the predatory assistant coach, who was enabled by too many who saw football as more important than the educational mission of the university.

These are not isolated cases outside ordinary parameters of behavior, but rather lie on a continuum. Rather than single out these towns, the questions to ask are these: Why has athletics been elevated far above its actual level of importance? What does the acceptance of this brutality say about the United States as a society?

A national pattern, not a handful of ‘bad apples’

It’s not as if hazing or bullying are something rare. Approximately 28 percent of children in grades six through twelve experience bullying, according to Nobullying.com. That has consequences: A 2011 Harvard School of Public Health study found that male bullies are four times more likely to grow up to physically abuse their female partners. Alfred University researchers believe as many as 250,000 members of sports teams in the U.S. have been subject to hazing, including 68,000 subject to what it terms “unacceptable initiation activities.”

The sports section of a typical newspaper features ample coverage of local high school football teams, and coverage, even if less in depth, of other high school teams. Why does this country care so deeply that someone can run with a ball and knock others over while doing so? The student who excels in math and is headed to a medical career in which she might make a discovery that cures a disease, or the student who is a natural in physics and will become a scientist, are not only unknown but perhaps even a target of abuse while adolescents.

For all the famous universities within its borders, the United States is an anti-intellectual society and if you doubt that, ask yourself how George W. Bush became president.

How many United Statesians can name more prominent scientists than prominent athletes? Millions, I would guess, but the U.S. is a country of hundreds of millions.

It is a country obsessed with being “Number One.” Fans need their football team to be “Number One” by dominating opponents and allowing nothing to stand in the way. The country needs to be “Number One” by dominating other countries. The football team of course doesn’t have to turn brutality on its more vulnerable members; it doesn’t even have to be brutal toward an opponent on the field, merely more skilled. But violence is inherent in the sport. Violence is inherent in dominating other countries.

A seamless transition from one to the other? No. Football in itself doesn’t make a young person violent or cruel. It’s only a game. But when a young man is treated as a star because he is successful on the field, and begins to receive special treatment and allowed to skirt rules that apply to others, it is no surprise that strong senses of privilege arise. That privileged young man is continually bombarded by social and mass-media messages that reinforce individualism, glorify violence, impose inequality between men and women, and present macho behavior as the standard to emulate.

If seen as objects, some will treat as objects

When women are so frequently depicted as objects for the pleasure of men, can it be a surprise that some adolescents, the Steubenville rapists being but one example, literally treat young women as objects to do with as they please? And when the messages they receive are that they can do whatever they want because they lead the football team to victory — when the coaches, school administration and the surrounding community all signal that — then we have something beyond simply young men out of control.

That the Sayreville hazing — more accurately, if the accusations are proved true, sexual assaults — was directed against boys and not girls changes nothing. What else could such outrages be other than an attempt to sexually humiliate the targets? Bullying, hazing and sexual assault are all too often dismissed as “boys will be boys.” Behavior in the Sayreville locker room that likely started as moderate forms of hazing unchecked morphed into sexual assaults, and this escalation had to have built over years.

Reading through readers’ comments underneath the stories New Jersey’s state newspaper, The Star-Ledger, has been running online, I couldn’t help notice that even those who believe the allegations and endorse the suspension for the year of the football team mostly defend the head coach’s character and claim he could not have known.

I do not know if the coach knew. I do find it hard to believe he didn’t, but if he really didn’t, it was because he didn’t want to know. He should have known. But, despite these displays of public support for the cancelation of the football season, the concomitant support of the coach demonstrates a lack of seriousness in confronting what has happened.

Only a few can win when the economy is a lottery

Athletics is also inseparable from the “lottery economy” that the U.S. has increasingly adopted. Millions of dollars potentially await someone who makes it to the top, but the odds are little better than a lottery — few will cash in as a tiny percentage of high school athletes will play in college and a minuscule percentage of college athletes will become professionals. Far more enter this lottery with delusions of winning than are realistic.

It is little different for the economy at large. Astounding riches are showered upon a handful of entrepreneurs who had lots of luck on their side. The overwhelming majority will earn little or nothing from their ideas. (Of 1.5 million patents in force in the U.S., only 3,000 are commercially viable, according to a U.S. patent office spokesman.)

Bill Gates is frequently listed as the richest person on Earth. Why? His company is incapable of delivering a good product; its high profits are the fruits of an accidental monopoly. IBM was dominant in computer hardware and when it introduced a personal computer, it handed Microsoft a license to supply the operating software, which Microsoft originally bought from another company. Once clones of the IBM computer were introduced, Microsoft was in the best position to provide their operating software. A monopoly was born, and that monopoly was leveraged to force widespread adoption of other Microsoft products.

Movie stars, singers and athletes rake in millions, tens of millions, of dollars. They give us want we want, it is all too easy to say. Perhaps, but is the value of the entertainment provided truly worth hundreds or thousands of times more than a scientist whose work makes the world a little better or the teacher who educates the citizens of tomorrow or everybody who wakes up and goes to a boring job so they can keep a roof over their family’s heads?

And it’s not necessarily the inventor who cashes in. We’d have to conduct research to find the people who invented the Internet. They are not likely wealthy. Yet a handful of people who were in the right place at the right moment, handed an accidental monopoly, are worth billions and, in the case of Bill Gates, believes that gives him the right to impose a privatization agenda on education and impose a top-down corporate model on health care that ignores root causes. In a world that values expertise instead of money, would an engineer who foists mediocre products on the world be taken seriously when straying into fields in which he knows little?

That is but one side of celebrity culture, the same money-driven culture that glorifies football players and allows some of them to believe they can use and discard other human beings, dominate them, as they wish. Impose serious and appropriate punishment on those who deserve it, certainly. But those athletes who run amok are not simply “bad apples,” they are a product of a society becoming more savage, more unforgiving, more unequal as we are pitted against one another and told we must rip out each other’s throats to survive.

It can be a short road to de-humanizing others, whether the people in a far-off country, or minorities and women at home. In a dog-eat-dog world, most dogs will be eaten, no matter how much macho strutting is indulged.

A bigger pie doesn’t mean you are getting a slice

The kerfuffle between executives and shareholders of The Coca-Cola Company seems to have been smoothed over, at least for now, but no matter how much the two sides wrangle over the pie, they do agree on one crucial detail: Employees deserve nothing.

Lest we dismiss the recent plan hatched by Coca-Cola’s management to transfer to itself at least US$13 billion as a fight in which we have no dog, it does provide a case study of the mindset of corporate and financial elites, and the power of Wall Street. This is a company accused of involvement in a string of human-rights violations in countries around the world and racial discrimination in the United States, and routinely lays off employees despite raking in billions of dollars per year in profits.

The $13 billion dispute is this: Coca-Cola management proposed earlier this year to issue hundreds of millions of stock and stock options to its higher-level executives. For 2014 alone, the stock grants would have been worth about $13 billion. Enter a money-management firm that owns a couple of million shares. Loudly complaining that those billions belonged to it and other shareholders, the money-management firm’s chief executive officer declared:

“In effect, the Board [of directors of Coca-Cola] is asking shareholders for approval to transfer approximately $13 billion from all of our pockets to the Company’s management over the next four years.”

Fire and ice on Colombia volcano Nevado del Huila (photo by Martin Roca)

Fire and ice on Colombia volcano Nevado del Huila (photo by Martin Roca)

Coca-Cola’s management blinked last week, but earlier defended its stock grant by saying that the stock grants “are within industry norms.” But we need not run out of tissues crying over this transfer of wealth away from needy financiers, because Coca-Cola announced that it is reducing its previous plan. Just what the company plans to give its executives is not clear from its October 1 press release, but it did have this to say:

“Consistent with our past practice, 100% of the proceeds from stock option exercises by employees will be used to repurchase shares, minimizing dilution. This is separate from, and in addition to, our normal share repurchase program.”

What that finance-speak means is that the profits of the company won’t be spread thinner because it will buy back stock in exchange for the stock it will issue its top executives. Wall Street won this round. Coca-Cola will be using some of its profits to buy back shares from existing shareholders. This is a common practice whereby a company offers to buy stock at a premium to the trading price, giving an extra payday to those who sell and leaving the profits to be divided by among a smaller group.

Money rains upon speculators

How much largesse is rained upon financiers? According to a report by Bloomberg, the companies of the S&P 500 Index will spend $914 billion on stock buybacks and dividends this year, or 95 percent of their earnings. (Those earnings are after the multimillion-dollar payouts executives pay themselves. Oops, sorry, after the payouts granted by their cronies on their hand-picked board of directors.) Bloomberg reports that S&P 500 companies are sitting on “$3.59 trillion in cash and marketable securities and they’ve raised almost $1.28 trillion in 2014 through bond sales.”

That represents quite a pile of profits. Coca-Cola has spent billions of dollars in recent years buying back its stock. The company has plenty of money, reporting almost $45 billion in net income during the past five years. A capitalist’s profits (including the large portion shared with financiers) are created through paying employees much less than the value of what they produce. So what did Coca-Cola’s employees get for producing this wealth enjoyed by executives and speculators? The back of the hand for the most part.

Having earned “only” $8.6 billion in net income for 2013, a slight drop from a year earlier, Coca-Cola announced it would cut its annual expenses by $1 billion by 2016. Undoubtedly, a savings of that size will have to include layoffs. Already, Italian workers struck last month over a plan to eliminate 12 percent of their jobs; workers at the company’s partially owned Australian affiliate have been handed a pay freeze for 2015 with new hires starting at 40 percent less; and 1,200 Spanish jobs were eliminated by closing four plants in defiance of a court order.

All this is before we get to the many human-rights abuses in which Coca-Cola is accused. In the past, the company made big profits operating in Nazi Germany and apartheid South Africa.

More recently, the company and its business affiliates have been repeatedly accused of using paramilitary death squads to kidnap, torture and assassinate union leaders. The company denies any involvement. But being an organizer in Colombia is dangerous work — of the 213 union leaders murdered worldwide in 2002, 184 died in Colombia. In the previous 15 years, almost 4,000 Colombian trade unionists were murdered.

Child labor, violence and smuggling are it

Workers seeking to join unions in Colombia are routinely fired and threats against union activists continue on a steady basis. The activist group Killer Coke has compiled a country-by-country list of outrages in various countries, including thousands of children, as young as eight-years-old, used as labor on El Salvador sugar-cane farms that supply the company; multiple kidnappings and murders of union officials at a bottling plant in Guatemala; and, in the Philippines, the use of outsourced labor to avoid paying benefits and accusations of “smuggling” sugar into the country to avoid taxes and undercut local sugar producers.

The $13 billion that the executives and the financiers were fighting over did not fall out of the sky.

The point here isn’t that Coca-Cola is a uniquely evil company. Its arch-rival PepsiCo Inc. is spending $8.7 billion this year alone in stock buybacks and dividend payouts to make financiers happy. In the past, it was a major investor in Burma during the military régime that routinely used its citizens, particularly from ethnic minorities, as slave laborers. Pepsi exchanged its income there for Burmese agricultural products that could be sold at a profit outside the country — products often produced on the military junta’s slave-labor farms that were taken by force.

Finance capital is both whip and parasite, applying relentless market pressure to force companies to squeeze ever higher profits and extracting more wealth for itself. This is what the holy grail of “efficiency” actually means. Industrialists and financiers fight over which gets the bigger piece of the pie, but they agree they deserve the whole pie. The rest of us can shut up and get back to work. Did you vote for this?