Seeing bias but supporting the architect of bias: We have a long way yet to go

Half a century has passed since Martin Luther King Jr. delivered his “I Have a Dream” speech in Washington, a passage of time symbolized by a Black man sworn in as president on a holiday celebrating Dr. King’s birthday. Yet it would be naïve to suggest that racism is now something in our past; that Dr. King’s hope that people would be judged by the content of their character rather than the color of their skin has become everyday reality.

Racism is so woven into the fabric of society that it is sadly comprehensible that two generations of civil rights struggle has not eradicated it. The contradictions that swirl around a subject that is still uncomfortable for most to discuss were captured in a New York Times survey published last week. The survey asked a series of questions related to the “stop and frisk” tactic used by the New York City Police Department in which police officers routinely stop young people on the street and search them in what is claimed to be an effort to catch potential criminals before they commit a crime.

In 2011, the last full year for which statistics are available, the New York Civil Liberties Association reports that New Yorkers were stopped and searched by the police 685,724 times. Of these stops, 88 percent were reported by the police as stops of people who were totally innocent. Only nine percent of these stops were of White people. Those numbers are typical for a program that has run for several years.

The Times survey found that:

• 55 percent believe that New York City police favor Whites over Blacks, while 27 percent believe that both Whites and Blacks are treated fairly.
• By almost identical margins, New Yorkers believe that police favor Whites over Hispanics.
• 61 percent say they approve of Police Commissioner Raymond Kelly while 24 percent disapprove.

People of Color were more likely to observe bias and less likely to support the commissioner than Whites, but the general pattern was the same. That majorities could simultaneously acknowledge racial bias and support the police chief responsible for a practice that most exemplifies that bias demonstrates that regressive attitudes like racism retain a strong social hold. Virtually all of the more 1,000 people who participated in the Times survey surely would vehemently oppose a hooded Klansman and look upon the Jim Crow South with horror. And yet a majority have little trouble in voicing approval of systematic harassment, a routine of criminalizing young people simply for being Black or Hispanic.

Mistaken beliefs that stop-and-frisk are effective in suppressing crime account for much of the reason for those approvals. But it is far from only that. And the law-and-order angle is not untinged with stereotyping — I vividly remember watching an interview of a White producer of a typical police “reality show” who, when asked why his program showed Black people almost exclusively as perpetrators, unashamedly answered, “Because they are the ones who commit the crimes.”

Ah, yes, it’s always the “Other” who is responsible for social problems.

The power of divide-and-conquer

And here we get closer to the reasons for the persistence of racism. And also to the persistence of sexism, anti-Semitism, homophobia, national hatreds and other social ills. In any society that is based upon inequality — where an elite arrogates to itself a hugely disproportionate share of wealth and dominates the levers of power and opinion-making to maintain its elite status — strong social divisions work to maintain such inequity. Divide-and-conquer is an old technique.

Pre-capitalist societies were subject to scarcities; the precarious nature of agriculture and lack of modern medicine guaranteed that periodic famines would leave too little for everybody to survive. Lords needed a powerful ideology (and deadly force when necessary) to enforce their “rights” to take so much of what their peasants or serfs produced. Nowadays, the dizzying increase in productivity ensures that mass starvation is not a possibility, if you are fortunate enough to live in a developed country, however much inequality ensures that millions in those countries will go to bed hungry some of the time.

But whether it is the aristocracy and the church dominating peasants, with the church continually telling them that their subordinate position is dictated by God, or capitalists and their corporate mass media dominating working people, with the mass media and orthodox economists telling them that the world cannot be organized any other way, the same dynamics are at work. But any ideology has to be supplemented. And what better than divide-and-conquer?

Racism (and sexism and other backward ideologies) are artificial constructs. The origination of modern racism can be traced to seventeenth century colonial Virginia. The plantation-owning aristocracy feared that Black slaves, White indentured servants and those former servants who were nominally “free” would unite, putting an end to their rule. Instilling anti-Black racism in poor Whites was the solution to this threat, a process facilitated by the racism justifying massacres of Native Americans.

At first, White indentured servants and Black slaves were treated similarly by plantation owners on the North American mainland, excepting the significant fact that the servants had seven-year terms in contrast to the slaves’ lifetime sentences.* Servants’ sentences, however, were frequently extended. The Virginia of the seventeenth century had workhouses on the English model; children of poor parents could be removed and sent to workhouses, enabling those parents to be pressed back into the ranks of servants. Black slaves and White indentured servants socialized together, helped each other escape and joined in rebellions.

Racism began to be developed as an ideology to counter solidarity between Blacks and Whites and to counter poor White settlers who left the colonies to live among Indigenous peoples, whose non-hierarchical society was more appealing to thousands of them. To facilitate this process, freed servants were given small privileges not available to slaves to give them the illusion of having a stake in the aristocracy-dominated social order; Whites who rebelled were not punished as severely as Blacks; and poor Whites were forced to move inland due to the monopolization of coastal land by elites, thereby exacerbating tensions with Native Americans.

The genocide of Native Americans — ultimately reducing their populations by 95 percent — was of course well under way across the New World. The plantation-based economies there were dependent on slaves, and the European countries that were the earliest sites of the emerging capitalist system grew wealthy. More specifically, the emerging capitalist class grew wealthy and increasingly assertive in political matters.

Old World capitalists and New World slaves

European economies grew on the “triangular trade” in which European manufactured goods were shipped to the coast of western Africa in exchange for slaves, who were shipped to the Americas, which in turn sent sugar and other commodities back to Europe. (At this time, the Caribbean was far more important than mainland colonies, and conditions for slaves there was harsher; owners of Caribbean plantations often worked their slaves to death within a few years.) Profits from the slave trade and from colonial plantations were critical to bootstrapping the takeoff of British industry and modern capitalism in the second half of the eighteenth century into the early nineteenth century.

Walter Rodney, in his outstanding book How Europe Underdeveloped Africa, pointed out that it was necessary to rationalize the exploitation of African labor that was crucial to European accumulations of wealth. He wrote:

“Occasionally, it is mistakenly held that Europeans enslaved Africans for racist reasons. European planters and miners enslaved Africans for economic reasons, so that their labor power could be exploited. Indeed, it would have been impossible to open up the New World and to use it as a constant generator of wealth, had it not been for African labor. There were no other alternatives: the American (Indian) population was virtually wiped out and Europe’s population was too small for settlement overseas at that time.”**

This early buoying of capitalism can be obscured because slavery is a system best suited for accumulating agricultural surpluses; slavery’s association with plantations, however, can’t be disassociated from the use of plantation profits. Those surpluses provided investment capital for capitalist development despite slavery having been abolished within the internal British and other Western European capitalist systems.

Slave revolts and popular movements had much to do with abolishments of slavery, but the changing economic system was prominent as well. Slavery, as well as serfdom, is incompatible with industrial capitalism’s need for “flexible” workforces that can be hired or fired at will and for large numbers of consumers who can buy the capitalists’ products.

Slavery ended in the South, but subordination enforced with state-sanctioned terrorism did not until the civil rights movement a century later, when activists quite literally staked their lives on ending it. The wealth of the plantation owners and the desperate poverty of newly freed slaves were both transmitted to their respective descendants, locked in through terrorism. When the civil rights movement forced a dismantling of Southern apartheid, U.S. elites countered by saying, in effect: “Look! We’re all equal now! If you are not rich it’s your own fault.”

Imprisonment and a lack of jobs

This line of thinking, widely propagated, is a direct descendant of earlier, more crude ideologies. And from here it is a small step to justify mass incarceration and the racial bias exemplified by the U.S. prison system. More than 2.2 million people are imprisoned in the United States, a total and a rate that are the highest in the world. Black men are incarcerated at a rate almost seven times that of White men; two-thirds of all persons in prison for drug offenses are People of Color although Whites use drugs in similar amounts.

It is no longer unusual for police chiefs in large cities to be Black, and even the president and his attorney general are Black, yet the conveyor belt of repression continues to run smoothly. This is an institutional, structural problem that is untouched by the symbolism of a single leader.

In this neoliberal era, massive economic dislocations and poverty have made migrants of tens and hundreds of millions of people around the world, many of whom are small farmers forced off their lands due to cheap, often-subsidized agricultural products imported from the strongest capitalist countries. Corollary to dominant/subordinate pairings are immigrants, particularly those who become undocumented workers — another source of exploitable labor and a new means of fostering divisions when jobs are harder to find.

It so much easier to point at immigrants and blame them for depressing wages rather than examine the economic and social structure, at home and abroad, that puts mass immigration in motion and creates the conditions for the exploitation. Similarly, it is much more comforting to see oneself as a self-made success rather than someone who does work hard but nonetheless is a recipient of social privileges. In a country in which racism is so densely interwoven into the fabric of society, can any of us honestly say we are free of all prejudices?

The question, then, becomes one of a willingness to overcome social conditioning. Shaking one’s head sadly at racial bias in policing but supporting the police chief who intensifies that bias and voting for the politicians who appoint the chief is an unwillingness to critique the world you live in, and all the inequalities that have made today’s world what it is. A better world is not going to come into being by wishful thinking; it’ll only come about when we are not only willing to confront ourselves and our society, but to act.

* This and the following paragraph are based on Howard Zinn, A People’s History of the United States: 1492-present, pages 37-58 [HarperCollins, 1995]; Edmund Sears Morgan, American Slavery, American Freedom: The Ordeal of Colonial Virginia, page 297-299, 327-328 [W.W. Norton & Co., 1975]; and Chris Harman, A People’s History of the World, pages 252-254 [Bookmarks Publications, 1999]
** Walter Rodney, How Europe Underdeveloped Africa, page 88 [Howard University Press, 1982]

Solo geniuses who scorn the society that provides the shoulders they sit on

By Pete Dolack

The lone inventor is an archetype of long standing. The image remains, but, particularly in the United States, the image of the inventor has morphed from Thomas Edison and his cluttered laboratory to the hard-charging entrepreneur who single-handedly builds businesses.

The change in imagery mirrors the emphasis on wealth in U.S. popular culture, and the tendency to either defer to or scorn people based on perceptions of their wealth. Such imagery also serves as a particularly enticing carrot to dangle in front of those who aren’t millionaires, allowing them to entertain ideas that, if only they work hard enough, they too can accumulate fortunes.

Nobody creates a product, builds a company or makes a scientific discovery all on their own. There are engineers who design the product’s physical form, assembly-line workers who assemble the product and advertising agencies who create the demand for the product. For scientific discoveries, there are public investments in equipment or laboratory facilities, and scientific discoveries are often the basis for new products. For any of these, there are schools and universities, often paid for with public money, that provided the education that developed the skills of the creator or discoverer.

Then there is the social structure that enabled the millionaire to become wealthy through an invention or the creation of a popular product or through rising to the top of a large corporation or simply through being a popular entertainer or athlete. (We’ll set aside for now the fact that inheritance is the path most often trod to wealth.)

It appeared that the foundation of financial success was going to become a focus of the otherwise intellectually arid presidential campaign between Barack Obama and Mitt Romney. For one day last week (prior to the movie-theater massacre in Aurora, Colorado) the two campaigns traded barbs over a speech President Obama made the previous week in Roanoke, Virginia, in which he pointed out that business leaders often ignore the social capital behind their success. He said:

“There are a lot of wealthy, successful Americans who agree with me — because they want to give something back. They know they didn’t, look, if you’ve been successful, you didn’t get there on your own. You didn’t get there on your own. I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something, there are a whole bunch of hard-working people out there.

“If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business, you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.

“The point is, is that when we succeed, we succeed because of our individual initiative but also because we do things together. There are some things, just like fighting fires, we don’t do on our own. I mean, imagine if everybody had their own fire service. That would be a hard way to organize fighting fires.”

There is nothing in the above quote that should strike any rational U.S. citizen as controversial. President Obama made the requisite genuflection to “American exceptionalism” — an ultra-nationalistic slogan used within the United States to portray the country as superior to all others in all categories, a vapid capitulation to xenophobia that is mandatory for any major office-holder. But in this specific context, “this unbelievable American system” is not out of place since the subject at hand is the ability to amass wealth. Having made the ritualistic genuflection, the president felt free to acknowledge that government investment is behind many a private fortune (or perhaps he accepts he has to do something to recapture the populist image he crafted in 2008 after spending most of first term thumbing his base in the eye).

Government research, after all, did create the Internet; President Obama did not mention that government research created the World Wide Web, perhaps because it was European, rather than U.S., money that created that. Private businesspeople simply found ways to get rich off what others invented. Thus we have the spectacle of Microsoft founder Bill Gates becoming for a time the richest person on Earth because his company aggressively wields its monopoly status in personal-computer operating systems while making inferior products at the same time the people who invented the Internet and its architecture earned no fortunes.

Mr. Gates’ billions enables him to be a prime mover behind the privatization of education and compels the corporate mass media to portray him as a genius whose every word is a golden pearl. The inventors of the Internet and its architecture — although it is their work in government laboratories that made possible the Silicon Valley moguls’ fortunes — are obscure. Indeed, we would have to do research to learn their names.

There are many examples of industries similarly booted up by government investment — among them, cellphones, GPS technology and medical equipment. That is a simple fact; it is only the pervasiveness of capitalist ideology that makes such a statement in any way controversial. The Obama administration bends over backwards to benefit business: Showering subsidies on them, giving bailouts with no strings attached, promoting their interests with “free trade” agreements with a variety of countries, and discarding most of his promises to ease the extreme tilt against employees in labor relations.

Indeed, one of the very first people President Obama picked to staff his administration was Lawrence Summers, one of the leading ideologues of neoliberalism. Mr. Summers has distinguished himself in various ways, including in imposing austerity on Russia and other countries from posts at the World Bank and the U.S. Treasury Department. He once infamously, while the World Bank’s chief economist, wrote in an internal memo that Africa was “vastly UNDER-polluted” (emphasis in original) and “I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.”

So said the person whom President Obama picked to be his lead economic adviser. During the 2008 campaign, the public’s exhaustion with George W. Bush and Dick Cheney and their administration’s unilateral foreign policy led to Barack Obama becoming the embodiment (realistically or not) of a widely desired change. At the same time, the disapproval of a significant number of capitalists over the narrowness of the Bush II/Cheney administration in promoting the interests of a handful of industries (in particular energy) instead of pursuing more general business interests and a desire for a White House that would be less quick to alienate allied countries led to an unusual split among elites who normally overwhelmingly prefer Republicans.

The interests of powerful capitalists and the interests of the rest of the country are far from aligned, and it should come as no surprise that the interests of capitalist elites are dominant in the Obama administration. The capitalist elites who backed him desired a calm, steady hand at the helm of empire, and that is what they have received: Military interventions are coordinated with allied capitalist countries, the fig leafs of United Nations resolutions are obtained, Nato allies are treated as partners (albeit junior partners) and not as flunkies to be ordered about; a soothing public demeanor to mask harsh policies; and conducting the arm-twisting of foreign governments behind closed doors. Those elites are dependent on selling their products in stable foreign markets.

It is precisely the concept of “American exceptionalism” that provides a crucial ideological underpinning for unending interference in the affairs of other countries. All presidents have to carry out the duties of the belief in “American exceptionalism” and could do not do so without a firm personal belief in it themselves. A president or any other high government official can (and does) convince themselves of their duty to act on the “exceptionalism” but all that is exceptional is that it happens to be the United States that is the center of the capitalist system and possesses the military muscle to maintain it.

The “duty” carried out in the name of this “exceptionalism” is a “duty” to assert the interests of multi-national corporations. That the country voted by a solid majority to put an end to wars and corporate domination was of no consequence.

Having low expectations for the president, I did not expect “change,” although the extent of the willingness of the Obama administration to give almost nothing to its base is a surprise. For some time, it is has been apparent that the main theme of the re-election campaign would be “You have to vote for us, the Republicans are even worse.” But it is useless to see this in terms of “selling out” or “ineptitude” or “softness.” The Obama administration is simply reflecting the dominant sources of power within the U.S., and that is not going to change without a countervailing mass movement.

Governments around the world are at the mercy of the largest capitalists within the advanced capitalist countries; interests that are distilled into the pressures applied by financial markets. A country at the center of the world capitalist system, the United States, experiences such pressures primarily from its domestic capitalists, although those capitalists’ business interests are intimately tied with peer capitalists around the world in today’s global economy. Most countries experience market pressures as external forces.

As an example, let us briefly examine South Africa in its first years after the apartheid system was overthrown in a negotiated process forced by a massive international popular movement backing the African National Congress. During the long years of struggle by the ANC and pitiless repression by the National Party, the apartheid-era rulers in South Africa, the guiding document of the ANC was its “Freedom Charter.”* The charter, adopted after democratic consultations in 1955, calls for the right to work; to decent housing; freedom of thought; and nationalization of mines, banks and “monopoly industry” and land distribution so that all South Africans can share in the wealth of their country.

Although the ANC had the moral authority to carry out its program, its negotiators tragically (and unwittingly) gave up all economic control, forfeiting their ability to carry out any aspect of their program, with the result that, two decades later, the economy is firmly in the hands of its numerically minuscule White business elite (which is tied to international markets) and South Africa remains among the world’s most unequal countries. The country’s eyes were on the political talks between Nelson Mandela and F.W. de Klerk, in which the ANC decisively was the victor against the National Party’s attempts to dilute its loss of government control.

But in the parallel economic talks, which drew little attention, the ANC gave everything away. The central bank would be independent of government (as financiers demanded), National Party government finance officials would remain in office and the ANC government would sign on to everything demanded by the World Bank, the International Monetary Fund and all international trade agreements. Having done so, the ANC took office handcuffed, and having tied themselves to financial markets, those markets applied further discipline by attacking the South African economy at the first sign of anything that displeased them. From pleasing markets and giving financiers repeated assurances, it proved a short path to President Mandela’s successor, Thabo Mbeki, imposing austerity — a 180-degree turn from the Freedom Charter.

The mythology that markets know best is intimately linked with the mythology that the economy should be entrusted to financial elites and those elites’ intellectual servants, neoclassical economists. The mythology of the solo genius justifies massive inequality because the “solo genius” single-handedly created a popular product and thus single-handedly brought prosperity upon the land. For such selfless services, the solo genius must be compensated with fantastic wealth.

The “magic of the market” takes care of the compensation. For a young, growing company, the preferred route is the initial public offering. The IPO does indeed shower riches upon the founder, a small circle of his or her insiders, and the investment banks who take care of the details. If that money comes out of the wallets of everyday investors, well that’s the market for you. This system reached near-perfection in the Facebook IPO earlier this year. The key to an IPO is to price the stock high enough so that the money largely accrues to the insiders (who possess most of the stock through pre-IPO awards) but not so high that the stock price plummets afterward (making the scam too obvious) nor so low that a significant post-IPO stock-price rise means that some money was lost to investors.

Thus Facebook chief executive Mark Zuckerberg wound up with $18 billion, Facebook’s investment bankers and insiders received substantial windfalls and all those who bought in after the opening bell are out of luck. The stock price never has returned to its opening-day level. Oh well, a “long-term hold” as they say in financial-analyst circles.

Facebook’s current popularity is undeniable, but what of value did Mr. Zuckerberg create? Perhaps Facebook will be an exception, but Internet sites tend to be cyclical fads. What was once popular can rapidly become passé. Does he, or anyone, really deserve $18 billion for a few years of work? Did he work tens of thousands of times harder than the average employee of a U.S. company? Remember, what he, and other Internet moguls, created was built on the creation of people who didn’t get rich or famous, and who created it through public investment — that is, in a government facility.

It would seem that the carrot of a multibillion-dollar payoff is not necessary for technical progress. People invent, people create works of art, people write, people aspire every day without outlandish renumeration. Often without it at all. Inventions are made routinely in government laboratories, in university laboratories and in corporate laboratories — and in each of these, it is the government, university or corporation and not the inventor who owns the rights to the invention. Many others toil on their own to create an invention, with only slim chances of making a fortune out of it. Some of these people undoubtedly are motivated by the potential for enrichment, but the overwhelmingly majority will never see it — either they will fail, or their success will lead to little or no money.

Why should one person amass $18 billion and so many other get nothing? Why should a lucky handful of people amass billions of dollars and then get to claim they did it all on their own with no help at all? President Obama’s reference to “this unbelievable American system” is true here in the sense that a few people are able to amass fantastic riches. But it is glaring inequality that enables the accumulation, and the accumulation comes on the backs of employees. Without a system that does not simply tolerate, but celebrates and causes, massive inequality, the superrich whom Governor Romney is so fast to promote as solo geniuses who had no help (no surprise as this is the myth he spins for himself) would not be the superrich.

Without the infrastructure that government provides in the form of educational institutions, a court system that adjudicates commercial disputes, means of coercion such as police and the military to suppress dissent at home and abroad, an ever larger basket of subsidies, “free trade” agreements that promote corporate interests above human rights, and a transportation infrastructure such as expressways that are mostly free, billionaires would not be able to become billionaires. And yet they continually whine that “government” is in the way.

In a better world, government would be the product of public demand and benefit. Instead, it is the reflection of the arrayed social forces within a given society — in an advanced capitalist country, that is its most powerful industrialists and financiers. The constant chatter of government “getting in the way” of business interests and of entrepreneurial geniuses single-handedly creating wealth should be laughed at for the joke those mythologies are.

* This and the next two paragraphs based in part on Naomi Klein, The Shock Doctrine: The Rise of Disaster Capitalism, pages 194-217 [Metropolitan Books, 2007]

Attacks on critical thinking vs. cheers for scapegoating

By Pete Dolack

On the surface, it seems a mystery. Occupy Wall Street protestors organized peaceful protests, concentrated their critiques on the financial institutions responsible for the worst economic downturn in eight decades and consciously used inclusive language to unite people. Yet Occupy was subjected to brutal police assaults as part of a coordinated government campaign against it, and has increasingly faced volleys of disapproval in the mass media.

By contrast, “Tea Party” protestors routinely used threatening language, brought weapons not only to their own demonstrations but to public talks of government office holders, attacked government institutions in denunciatory language and sought to divide people through scapegoating. Yet the Tea Party was lovingly embraced by the mass media and allowed to operate unimpeded by law enforcement and other institutions.

These contrasting responses were not monolithic, and we can all cite exceptions. Nonetheless, there is no mistaking the general tenor of the responses. On the surface this may appear to be a mystery, but it is not at all mysterious once we examine a little closer.

Occupy was and is a genuine grassroots movement, and the hundreds of Occupies that spontaneously followed the example of Occupy Wall Street demonstrated that a large pool of discontent and anger about the corporate domination of the United States exists. That discontent may sometimes be unfocused — leading to a sometimes confusing plethora of messages at Occupy encampments and demonstrations — but it is very real, based on the reality of the lives of working people (including students). And it is precisely this bottom-up self-organization that engendered the wrath of the establishment.

The Tea Party seeks to deflect anger from corporate elites consumed by greed and arrogance who bend the country’s institutions to their benefit, and instead pin the blame on “the government,” on minorities, on immigrants and any other handy scapegoat. This movement, although calculated to tap into genuine grassroots anger, was manufactured and materially supported by corporate benefactors. And this is the key to understanding the warm embrace given it.

Both movements result from a pervasive feeling of anxiety over an economic crisis now measured in years with no end in sight; both movements are fueled by people who know that “something is wrong” and seek answers as to why the present is bleak, why the future appears bleak and what can be done to change the stagnation or downward trend of the economy and all the social problems that piggyback on economic distress. Anxiety is not only due to worries about today or fears of tomorrow in times of uncertainty and instability; anxiety also flows from a lack of understanding. Why has the economy turned so sour, why is the malaise so persistent, why is this happening to me even though I went to work every day and studied hard in school?

We naturally wish to find the answers to these questions. One way to seek answers is to channel anxiety, anger, fear and frustration into study: Read, watch, listen, observe and discuss, until a picture begins to emerge. Modern economics and society is complex and globalization only hastens further complexity. But these are human constructions, and so most humans can understand them. It is only when we understand what had seemed to work but no longer does that we can begin to construct ideas and plans to improve our lives and give ourselves stability.

Another way to seek answers is to channel anxiety, anger, fear and frustration into emotional release: Designate scapegoats from groups that are either unpopular or are vulnerable. Those scapegoats can be immigrants, they can be racial, ethnic or religious minorities, they can be women. Or the scapegoat can be “the government,” reduced to an abstract entity that somehow hovers above society as an alien force. Scapegoats have in common that they represent an “Other,” somebody or something outside or different, and thus liable to be portrayed as an impurity “polluting” society.

Scapegoating is seductive because it taps into emotion. Very real emotion, for the anxiety, anger, fear and frustration felt by Tea Partiers, Occupiers, sympathizers of one or the other and people who do not identify with either movement is based on the concrete realities of their lives. A belief that tomorrow will be better than today, that our children will live more comfortably than their parents is woven deeply into the fabric of advanced capitalist countries, and perhaps that sense of optimism has been nowhere stronger than in the United States, where such beliefs are inseparable from the expansionism, dynamism and geographical diversity that are foundations of its traditional ethos.

When long-held beliefs crumble, answers are naturally sought. Easy answers tap into emotion. Emotions are real, genuine and should be taken seriously. We share many emotions; we share a desire to understand. A cliché that is often repeated because it is true despite being a cliché is the statement that a lie can travel halfway around the world before the truth can finish lacing up its boots. A parallel can, and should, be drawn: Emotions take root much faster than the concrete. In no way is that meant to suggest that emotions are “lies” — emotions, again, are very real. In our personal lives, we become upset, but we talk and analyze, and although we may still be upset, we come to understand and thus are much better equipped to do something to change the situation that made us upset.

Zooming out from the personal to the societal, we can see similarities. But, since we are back to discussing large, impersonal social forces and institutions, what if the controllers of those institutions want to deflect attention and avoid blame for their actions? Tapping into emotions is a sure way of achieving those results, and if those institutions are very wealthy and very powerful, they can create entire movements (and new institutions) to suit their purposes.

The Tea Party is a prominent example. Tea Partiers wanted answers as to why the foundations around them are crumbling. Just as the Wizard of Oz wanted Dorothy to look elsewhere, Tea Party organizers point in another direction and yell, “It’s them, over there.” And who are the organizers of the Tea Party? By that question, I mean the originators and, in particular, the funders of the Tea Parties, not the people who became involved and assumed leadership roles in their local communities. We can readily see that some of the most active members of Corporate America are the organizers.

At the very top of the list are three entities: the Americans for Prosperity Foundation, FreedomWorks and Fox News. FreedomWorks is a group of corporate lobbyists run by Dick Armey (a hard-line Republican Party operative who once was majority leader in the U.S. House of Representatives) that was the primary organizer of the early Tea Party protests. Americans for Prosperity is a lavishly funded and tightly controlled pressure group founded by David and Charles Koch dedicated to promoting the Koch brothers’ business interests and extremist political philosophies. Fox News is one of the most notorious pieces of Rupert Murdoch’s media empire, an empire dedicated to promoting Murdoch’s business interests and extremist political philosophies.

Other corporate interests have made their contributions, but without these three groups there would be no Tea Party. Americans for Prosperity is a crucial funder of FreedomWorks, and both organizations are behind a series of initiatives to deny the reality of global warming, attack any and all regulation of business and promote libertarian political ideas, such as eliminating Social Security. Fox News is an active promoter of these agendas. Together, bottomless sums of money, corporate muscle, the ability to control a myriad of institutions and the power to have their agenda adopted by the corporate mass media was leveraged to coordinate and tap into the anger felt by millions of people, creating the corporate-inspired Tea Party.

As many other corporate elites similarly backed these agendas, they were undoubtedly happy to free-ride on the money and influence wielded by Americans for Prosperity, FreedomWorks and Fox News, the three of which provided the Tea Party with organizers, money, material support and publicity. Within any group, there will always be those who are the most active; the Koch Brothers, who fund a network of institutions to do their bidding, are among them in the ranks of big capitalists. Such people have the immense wealth and all the power that goes with that wealth to have their viewpoints and messages suffused throughout a society through continual repetition via a spectrum of outlets.

A critical component of those messages must be a deflection of blame. Government is a handy scapegoat, and an easy one because very few of us has not had at least one frustrating experience with a bureaucracy. Government has to be portrayed as an alien force disembodied from society, demonized for “interfering” in the lives of people. But government is not an abstract entity, it is a reflection of the social forces inherent within a society; its actions and policies will most often harmonize with the most powerful.

No objective analysis of government can deny that corporations reap enormous benefits from government — through contracts in an ever increasing variety of industries, the passing of laws in legislatures that not only benefit them but are frequently written by their lobbyists, the building and maintenance of transportation and other public infrastructure, the public assumption of the costs of business such as pollution mitigation, and an ever widening collection of subsidies.

If government is part of the problem, than it is because it has become dominated by corporate elites. Corporate elites reap the benefits of inequality and want to keep it that way, or widen the inequality. It is corporate elites who benefit from moving factories to new countries, from mass layoffs and a system that funnels enormous sums of money upward. It is a big job to obscure these obvious facts. And only corporate elites have the money to fund such a campaign so they can continue to reap personal rewards from this system’s continuation.

Given the web of domination by corporate elites, it then becomes no surprise that their creation, the Tea Party, is lavished with affection while the Occupy movement that challenges them and fosters independent thinking is attacked. Today is the national holiday in the United States in which the country celebrates its founding and its defining themes of “freedom” and “liberty.” But, as always, we should ask: Freedom for who? Freedom for what?

Wisconsin’s recall election proves no substitute for a social movement

By Pete Dolack

Walking home on election night in 2008, my partner and I waded into a street celebration. Young people, primarily, had taken over an entire block to joyously celebrate Barack Obama’s trouncing of John McCain. Veteran activists that we are, we talked to many of the celebrants, cautioning them that the work of progressive change had only begun: If there is no strong pressure from President Obama’s supporters, he would be taken off the hook and feel himself free to not do what he said he would do.

Neither of us believed the president-elect would follow through on most of his campaign platform, and the fact that the strong anti-war movement that mushroomed during the Bush II administration had been silenced by United for Peace and Justice’s deft channeling of it into the John Kerry presidential campaign and its unwillingness to work with any coalitions to its Left should not have been far from activist minds. The hopes of Obama voters for an end to wars waged for imperialist plunder and for meaningful “change” soon met the traditional graveyard of U.S. social movements, the Democratic Party.

And so it was in Wisconsin last week. Yet again, an energetic, grassroots movement, motivated by a sense of urgency, was diluted, rendered “respectable” and converted by political and union leaders into an election campaign. And thereby lost their biggest battle. Are they to lose the war, too?

Before we tackle that question, let’s analyze the battle. Given the legitimate questioning of electronic voting machines that do not print records that can confirm the results, it is understandable that some question who really won the Wisconsin recall vote. But it is necessary to point out that the 53 to 47 percent victory of Scott Walker over Tom Barrett, although wider than expected, does fall within the margin of error of the many polls that consistently had Walker ahead. We should accept the result as legitimate, and analyze seriously a bitter defeat for all working people.

Union leaders’ fear of Madison’s energetic resistance

One of the groups critical to the uprising in Madison, the Wisconsin state capital, were graduate students organized into the Teachers Assistants’ Association. The TAA is centered on the University of Wisconsin’s main campus, located blocks from the Wisconsin capitol building. Already anticipating cuts to the university system, the TAA had begun mobilizing for a February 2011 protest. When details of Governor Walker’s draconian program of deep cuts to education and social programs coupled with union-busting measures became known, the sense of urgency increased.

Mike Ludwig, writing in Truthout, has described the birth of a movement that quickly had the world’s eyes on it:

“A public hearing on the legislation was scheduled the next day and the TAA organized a massive turnout. At such hearings, each member of the public is given up to two minutes to speak, and thanks to the tireless TAA and allied groups, a continuous stream of testimonies prevented the bill from going up to a vote. It was the birth of an occupation that would take over the Capitol and stall Walker’s union-busting bill for more than three weeks.”

Teaching assistants and teachers came to that first legislative hearing prepared to stay overnight. An early attempt to evict the Capitol occupiers backfired, solidifying their public support. Demonstrations in numbers that sometimes exceeded 100,000 outside the capitol building were regular occurrences. Support for the capitol occupiers was exemplified in a continual stream of well-wishers from outside Madison phoning in pizza orders to be delivered to the occupiers. Crowds lined the streets of Madison when a procession of farmers riding tractors drove down one of the city’s main streets to the capitol. African-American and Hispanic high school students from Wisconsin’s biggest city, Milwaukee, and people from small towns across the state were on board.

Sadly — but not surprisingly — union leaders saw this inspiring solidarity as a threat to be contained.

Talk of a general strike was in the air — something that has not happened in the United States since the 1930s. Although some organizers believed that there was too little infrastructure in place for a general strike to be realistic at the time, there were other steps that could have been taken to ratchet up the pressure on Governor Walker and his Big Business funders.

Matthew Rothschild of the Madison-based monthly magazine The Progressive, who participated in many of these events, said the co-optation of the movement began early:

“Actually, it began to disintegrate the moment the leaders (and who were they, exactly?) decided to pour everything into the Democratic Party channels rather than explore the full potential of the power that was latent but present in the streets back in February and March of 2011. … Procedurally, decisions were made (again, who made them?) in a very undemocratic way. Here we had 100,000 people storming the square but there was no effort to include them in any meaningful — or even symbolic — decision-making process. … We gathered at noon every day, we gathered every night, and we massed on the weekends, but then the decision was made (by whom?) to stop marching and essentially to go back to our home districts and throw all our energies into recalling state senators. I remember being at a protest and being told to do so from the podium.”

Local activist Allen Ruff, quoted in a Truthout analysis written by Arun Gupta and Steve Horn, confirmed that state-level Democrats actively demobilized the movement:

“One got up in the middle of the [capitol building’s] Rotunda when there were a few thousand people present and asked them to walk out to show we are willing to compromise and around 1,200 people left the Capitol with him. At the last big rally in March, with more than 200,000 people present, Democratic [state] Senator Jon Erpenbach, said ‘I don’t want to see you people back here. Go back to your home communities and work on the recall.’ ”

Briefly, the intensity of the movement had driven Wisconsin Democrats to take their lead from the masses of people in the streets; the party’s state senators fled the state in an ultimately failed attempt to block a vote on Governor Walker’s bills. But soon enough, Democratic Party and union leaders asserted leadership, and steered the movement’s energy into the usual directions. People deferred to those party and union leaders, who were afraid of the power of people on display, afraid of a movement that had blossomed out of their control and afraid that they would not look “respectable” in the eyes of establishment power brokers and the corporate mass media. Union leaders, once again, mobilized their memberships to elect Democrats without asking for anything ahead of time.

That channeling involved not only tactics, but message. The early message of linking fightbacks against the entire panoply of neoliberal attacks became narrowed into messages tailored to appear “safe” to Wisconsin’s suburban middle class.

Bruce A. Dixon, writing for the Black Agenda Report, wrote:

“When would-be movements sideline the youthful risk-taking initiative and egalitarian core values that might have sustained them to become political campaigns, they generally don’t even run good campaigns. The crowds on the sidewalks and parking lots in Madison were conducting anti-racism seminars and study groups. But the electoral campaign the whole thing was turned into, even though they had a whole year to plan, neglected to do the labor-intensive ground game of massive voter registration in poor and minority communities. They spent their relatively scarce dollars on media instead, and pursued the easy consultant-class strategy of pursuing the “frequent voters” alone. They didn’t talk about the poor and renters, of which there are many in Milwaukee. They only talked about the middle class. They didn’t talk much about mass incarceration either, even though Wisconsin and Milwaukee consistently have the highest rates of Black imprisonment in the U.S. … They came up with a black candidate for lieutenant governor. But mostly they went from hundreds of thousands of people shivering in the cold, standing outside the people-proof, democracy-proof cages of elite consensus and two-party politics and beginning to feel their own power to decide what to do next to folks campaigning for the candidate and the slate that sucked less.”

The slate that “sucked less” and its union backers may have been eager to “compromise,” but the billionaire funders opposed to them were not.

A money deficit, yes, but an uninspired recall campaign

As a matter of strategy, organizers of the signature-gathering campaign to get the recall vote on to the ballot intentionally avoided naming a candidate. Brendan Fischer, writing in AlterNet a month before the election, reported:

“Their strategy was to make it clear that signing a petition was a choice to recall the governor, rather than a vote in favor of any particular challenger. But that move left Walker opponents without a candidate when signatures were handed in on January 16.”

That decision gave Governor Walker a huge head start. The unions’ preferred candidate lost in a primary to Milwaukee Mayor Tom Barrett, whom the governor defeated in 2010. By the time Mayor Barrett began raising money, Governor Walker had already spent 20 million dollars, according to Mr. Fischer. The challenger had only a month to make his case, but although the recall election inevitably was based on the personality of the governor, Mayor Barrett had not only already been defeated a year and a half earlier, he stood for “austerity lite” instead of providing a clean alternative.

During his 2010 gubernatorial campaign, the centerpiece of Mayor Barrett’s campaign was a 67-page document called “Put Madison on a Diet.” He advocated layoffs, cuts to benefits and cuts to wages as the main routes to trimming more than one billion dollars in state spending per year. This time around, he avoided drawing attention to such plans, but also avoided saying anything of substance. In a June 2, 2012, commentary published in the Milwaukee Journal-Sentinel, he offered platitudes but no concrete programs. Instead he offered a general critique of Governor Walker and issued bland declarations such as “My priority is Wisconsin.” Had somebody though his priority Saskatchewan?

He did, however, offer a hint of his previous program in a debate when he said, “The real test of leadership is whether you can say no to your friends.” That, perhaps, was less than inspiring to those whom he needed to get to the voting booth.

Whatever else can be said of the Republican Party, it does not boast of “standing up” against its base. But nor does the Democratic Party wish to offend its corporate benefactors, without whom it could not survive. We square the circle here: Mass movements are the only possible alternative to corporate power and money (especially as that money and power holds a tight grip on both major parties), but such movements are precisely what Democrats fear most. Union leaderships have become so removed from their rank-and-file members and so entangled with party politics that they are unable to critique the dead end of giving support to Democrats with no demands, hoping that some crumbs will fall their way.

When you guarantee unconditional support, when you keep your mouth shut when you are forgotten after the election, when you desperately suppress any independent mass movement, when you are so comfortable in your bubble that you can’t conceive of doing anything different, when you are unable to differentiate between a crumb and a loaf, you will lose. And you will keep losing.

Union households who voted for attacks on themselves

An analysis of the recall vote is not complete without examining the eyebrow-raising exit-poll finding that 38 percent of union-household members voted for Governor Walker. In 2010, he earned 37 percent of that vote — no substantial change.

More than one-third endorsed a direct assault on their ability to maintain their standard of living. How do we account for that?

In part, answering that question is partly dependent on knowing the breakdown of those voters between public-sector and private-sector union households, a breakdown that does not appear in the results of the exit poll conducted by Edison Research. Governor Walker generally directed his anti-union rhetoric at government workers, although the fierce attack on public-sector unions are an opening gambit — corporate antipathy toward unions does not differentiate. Such attacks are the tip of a well-honed spear aimed at breaking down solidarity among working people.

Capitalist ideology furiously promotes individuality in an effort to atomize society and to justify extraordinary disparities in wealth. We are constantly bombarded with messages that declare you, too, could be rich if only you worked as hard as the chief executive officer does. Many CEOs undoubtedly work hard, but 340 times harder than the average worker? The reality is that only a handful can be rich, because being rich means accumulating money and capital through paying employees much less than the value of what they produce. Therefore, most people are going to struggle economically. How can that be if you work hard every day?

Scapegoats are provided as the answer — not that the is system stacked against you and always will be, nor is the answer that the capitalism system is undergoing a serious structural crisis that is the logical outcome of its highly competitive nature and need for ever more accumulation. A favorite scapegoat are always a society’s minorities or immigrants, and when that line loses effectiveness, the scapegoat becomes public-sector workers. Thus we have the sad spectacle of the current Big Business-led war on teachers, waged across the United States. Government workers in general are demonized as lazy and the recipients of unwarranted largesse.

Another critical strand of capitalist ideology is to foster jealousy. This is a crucial piece of ideological campaigns, in part to create atomization of society (crucial to blocking ideas of solidarity and common economic interests from taking root) but also to facilitate the scapegoating. Carefully targeted, the jealousy is never against the executive or speculator who makes millions of dollars off other people’s hard work, but rather the jealousy is carefully fanned against other working people who have something somebody else does not.

Because government workers — and unions — were the designated scapegoats, their pensions became easy targets. Republican Party operatives went to rural counties and made sure to play up the fact that most people no longer have pensions, while government workers do. Mike McCabe, the executive director of the watchdog group Wisconsin Democracy Campaign, argues that Wisconsin Republicans have forged a “rich-poor alliance” of suburban and rural areas:

“Republicans ask people in places like [rural] Clark County if they have pensions, and the answer is invariably no. ‘Well, you are paying for theirs,’ they tell them. ‘Do you have health insurance? No. Well, you are paying for theirs. Are you getting pay raises? No. Well, you are paying for theirs.’ For years now Democrats have not plausibly made the case that they will deliver better health or retirement security or higher pay to all. Only the state’s few government workers have so benefited from the Democrats’ toil.”

Exit polling seems to back up these claims. Residents of cities with at least 50,000 people voted by a close to 2-to-1 margin in favor of Mayor Barrett, but all other areas voted by wide margins for Governor Walker.

Notice, however, how the question is framed by conservatives: “Why does someone have something you don’t have” (a pension), instead of “Why do you not have something that you should be entitled to but don’t have.” Once the question is framed that way, and anti-government rhetoric is wrapped around it, then it is a short path to making pensions indistinguishable from excessive government spending.

An analysis in the Wisconsin State Journal newspaper contained a noteworthy quotation from the district attorney and Republican Party chairman (the same person holds both posts) of another rural county, Green County. This official had his district-attorney pay cut but, considering his other post, not surprisingly backed Governor Walker. “I was also able to see the other side of the equation. Taxpayers, businesspeople and retired citizens had just as strong feelings about the necessity to control state spending and require state employees to ‘pay their fair share,’ ” the official said.

Once again: Why do those people have something I don’t when I work hard? Nor can such sentiments simply be waved off by virtue of party — one-sixth of Governor Walker’s voters intend to vote for President Obama, according to the exit poll.

Capitalist ideology permeates every every institution. Not simply the corporate mass media, but churches, schools, think tanks, militaries and a host of others incessantly carry similar messages: We “deserve” what we get. The generally unspoken but nonetheless inferred coda to that message is that if what we “deserve”  is not as much as we need in a time of scarcity and cutbacks, then then someone else must not be deserving, either, so we should take away from them. Take it away from them, not have it for ourselves and our neighbors, too.

If you’ve heard this before, you are not hallucinating

There is nothing unique about Wisconsin. Or about the United States. Government workers are the brunt of attacks in Greece. If it is true (I don’t know myself) that the Greek government is over-staffed, government workers there nonetheless have to pay their taxes because their employer certainly isn’t going to fail to collect them, while it is Greek corporations, the wealthy and even some middle class private-sector workers who don’t pay taxes, a significant factor in Greece’s financial crisis.

Voters in two California cities, San Diego and San Jose, one a conservative military town and the other a liberal Silicon Valley town, voted last week by 2-to-1 margins to cut the pensions of public workers despite the fact that those pensions are subject to collective bargaining. In New York, there has been the odd revelation that leaders of a group of construction-worker unions donated half a million dollars to the “Committee to Save New York.” That is odd, because the committee has been bankrolled by millions of dollars by corporate donors and is the leading ally of Governor Andrew Cuomo’s drive to impose layoffs, pay cuts and pension reductions on government workers. That drive continues despite the government workers already agreeing to cuts.

The capitalists pushing the anti-union agenda must be delighted to have unions of private-sector workers joining their attacks on public-sector workers. Talk about short-sighted: Private-sector unions will become targets if public-sector unions are disabled, and construction unions are already routinely scapegoated as responsible for high construction costs. Never mind that real estate is a fantastically profitable business for developers and landlords in and around New York City, where most of the population of New York state resides. Non-union labor has become a more common sight on city construction jobs, but you should not hold your breath waiting for rents or sale prices to be reduced on account of resulting lower labor costs.

All these agendas do not fall from the sky. A handful of billionaires bankrolled Governor Walker’s victories in Wisconsin, and there are plenty of other capitalists who are happy to free-ride on their largesse. Austerity may come in several flavors, but, ultimately, from one source. If so-called leadership offers only austerity-lite “me, too,” the alternative is to become our own leaders.

The Taft-Hartley Act: ‘Neutrality’ as a weapon

By Pete Dolack

One of the primary tools long used to suppress labor in the United States is the Taft-Hartley Act, which became law 65 years ago next month. Specifically written to reduce the organizing power of working people to the maximum extent reasonably possible, it is sometimes overlooked that the law was passed with Democratic Party as well as Republican support.

Working people had won for themselves powerful gains during the dramatic upsurge of union organizing during the latter years of the Great Depression, and after agreeing to not conduct strikes during World War II, unions were again flexing their muscles so that their members could make up some of what was lost from the war’s pay freezes. In response, U.S. Big Business interests saw their first opportunity to begin the dismantling of the New Deal, implemented by Franklin Delano Roosevelt in response to massive unrest that threatened to topple the capitalist system.

Prior to the New Deal, employees had virtually no recognized rights; the struggle of workers to unionize to defend themselves against powerful corporate interests had raged for decades. Strikes would be met with mass firings and shootings by law enforcement authorities and private security forces. New Deal labor law was codified in the National Labor Relations Act of 1935, also known as the Wagner Act. A historian at Missouri Southern State University, Steven Wagner, in an article posted on the George Mason University History News Network, emphasizes the importance of the act:

“The Wagner Act was the most important labor law in American history. It gave a major impetus to labor organizations and earned the nickname “labor’s bill of rights.” … It gave workers the right to organize and join labor unions, to bargain collectively through representatives of their own choosing, and to strike. It also set up the National Labor Relations Board (NLRB), an independent federal agency with three members appointed by the president, to administer the act and gave it the power to certify that a union represented a particular group of employees.

The Wagner Act also forbade employers from engaging in five types of labor practices: interfering with or restraining employees exercising their right to organize and bargain collectively; attempting to dominate or influence a labor union; refusing to bargain collectively and in “good faith” with unions representing their employees; and, finally, encouraging or discouraging union membership through any special conditions of employment or through discrimination against union or non-union members in hiring. This last provision, in effect, permitted closed and union shops (a closed shop is when an employer agrees to hire only union members and a union shop is when an employer agrees to require anyone hired to join the union).”

Following the conclusion of World War II, a wave of strikes commenced. The U.S. government’s Department of Labor history page notes that, in contrast to fears that massive unemployment would result from the millions of veterans returning from the war,

“[T]he real labor problem of the time was a massive if peaceful wave of strikes. Unions sought to make what they considered well-deserved gains after enduring wage freezes imposed during the war. Workers were also prodded by the sharp inflation, fueled by pent-up consumer demand, that followed the lifting of wartime price restrictions. Strike followed upon strike in such important sectors as railroads, coal, steel, autos and oil.”

A combination of the Red Scare, whipped-up anti-union sentiment, and a desire by capitalists to reverse the gains of the New Deal and to purge the unions of communists and socialists, who often were the most militant union leaders, led to the introduction of numerous anti-union bills in Congress. The effort came to center on a pair of bills, one for each congressional house. According to a history of Taft-Hartley on the Labor Party USA web site:

“The anti-labor drive in Congress came to focus on two bills: The House bill was introduced by Representative Fred Hartley (R-New Jersey), a right-winger who had been friendly to Hitler Germany and imperial Japan right up to the eve of World War 2. A roughly similar bill was introduced in the Senate by Senator Robert A. Taft (R-Ohio), the ultraconservative, wealthy son of a U.S. president who had political ambitions of his own. But both bills were written by lobbyists for corporations like General Electric, Allis-Chalmers, Inland Steel, J.I. Case, and Chrysler, and the Rockefeller interests.”

Representative Hartley had a long association with the Bund, German-American organizations in Northern New Jersey that promoted Nazi Germany during the 1930s. Senator Taft distinguished himself by opposing unemployment insurance and Social Security, and joining with conservatives aligned with Herbert Hoover who made wild charges that the New Deal constituted an attempt to substitute “totalitarian tyranny” for constitutional government.

Ultimately combined into a single bill, the anti-union legislation passed both houses. Majorities of both parties voted in favor of the bill in the House of Representatives, while in the Senate, according to the Labor Party account, Republicans were unanimously in favor with Democrats evenly split, 21-21. President Harry Truman vetoed the bill, but Congress had the required two-thirds majority in both houses to override the veto and enact Taft-Hartley into law.

Despite President Truman’s need to shore up his credentials with organized labor, a desire to protect the rights of working people was not the motivation for his veto. On the contrary, he believed that Taft-Hartley would unnecessarily introduce government control into the economy. In his veto message,* Truman wrote:

“The bill taken as a whole would reverse the basic direction of our national labor policy, inject the Government into private economic affairs on an unprecedented scale, and conflict with important principles of our democratic society. Its provisions would cause more strikes, not fewer. It would contribute neither to industrial peace nor to economic stability and progress. It would be a dangerous stride in the direction of a totally managed economy. It contains seeds of discord which would plague this Nation for years to come.

At a time when we are determined to remove, as rapidly as practicable, Federal controls established during the war, this bill would involve the Government in the free processes of our economic system to a degree unprecedented in peacetime. This is a long step toward the settlement of economic issues by government dictation. It is an indication that industrial relations are to be determined in the halls of Congress, and that political power is to supplant economic power as the critical factor in labor relations.”

Further, President Truman predicated that the bill’s power to force an end to strikes or lockouts would be a dead letter:

“There is little point in putting laws on the books unless they can be executed. I have concluded that this bill would prove to be unworkable. The so-called “emergency procedure” for critical nation-wide strikes would require an immense amount of government effort but would result almost inevitably in failure. The National Labor Relations Board would be given many new tasks, and hobbled at every turn in attempting to carry them out. Unique restrictions on the Board’s procedures would so greatly increase the backlog of unsettled cases that the parties might be driven to turn in despair from peaceful procedures to economic force.”

The president’s concerns were apparently short-lived, as he would invoke Taft-Hartley’s emergency powers ten times, more than any subsequent president.

The scope of Taft-Hartley was (and remains) sweeping. It prohibited jurisdictional, wildcat, solidarity or political strikes; restricted political contributions by unions; outlawed welfare funds not jointly controlled by management; authorized employer interference in organizing; outlawed the closed shop; authorized states to pass laws outlawing union shops; and ramped up the Red Scare by requiring union officials to sign affidavits that they were not communists.

The practical effect of the Taft-Hartley Act contradicts its loftily claimed neutrality, as for instance in its second paragraph:

“It is the purpose and policy of this Act, in order to promote the full flow of commerce, to prescribe the legitimate rights of both employees and employers in their relations affecting commerce, to provide orderly and peaceful procedures for preventing the interference by either with the legitimate rights of the other, to protect the rights of individual employees in their relations with labor organizations whose activities affect commerce … and to protect the rights of the public in connection with labor disputes affecting commerce.”

All the new rules put into place by the act were directed against employees, despite the neutral-sounding language. Proponents of the act claimed it was a response to the Wagner Act primarily circumscribing management, but such circumscription was the point: Employees had possessed no rights, and the 1935 act was intended as rectification. Taft-Hartley was an attempt to take back as many of those hard-won rights as possible.

Under the impact of the law, union membership has declined from about 35 percent in 1954 to less than 12 percent today. Frequently, attention is drawn to the fact that union membership was highest during the post-war boom period that extended through the 1950s and 1960s, a time when working people enjoyed more prosperity than before or since. The lowest levels of union membership since the early days of the Great Depression have coincided with the greatest inequality and the worst economic crisis since then. These basic facts are inseparable — as more capital is accumulated by fewer capitalists, more power to affect all aspects of society is accumulated.

Working people don’t have the organizational strength to combat the control over the economy, the tight grip over the legislative process and the domination of the mass media possessed by capitalists and their top-down corporations. Without a doubt, abolishing Taft-Hartley and ending the draconian roadblocks put in front of union drives would be of significant benefit to working people in the United States.

The one-sidedness of union-certification elections was summarized well by an organizer (I regret I can recall neither name nor specific circumstance) imagining a political election being conducted under the same rules: Imagine a congressional election in which the incumbent could require voters to listen to his or her speeches, could ban any material promoting the challenger, and in which the challenger could not set foot in the election district but instead had to stand on the border handing out fliers to people passing by.

Yet, as desirable as much increased employee organization and fair labor laws would be, ultimately that would only ameliorate the exploitation of working people, and newly won gains would soon come under attack, again forcing working people into defensive postures. There are parallels here with Keynesian economic theory.

Keynesianism, simply put, is the belief that capitalism is unstable and requires government intervention in the economy when private enterprise is unable or unwilling to spend enough to lift it out of a slump. To be fair, government spending — the New Deal, the immense effort to win World War II, the Marshall Plan and a significant state sector in European economies — did indeed lift living standards in the advanced capitalist countries of the North. That economic theory, and the much higher union membership, tend to be intertwined with a certain nostalgia for the quarter-century boom following World War II. But, as I have previously argued, we are in different times.

The U.S. post-war boom was predicated on the country having a strong industrial base and for there being large areas of the planet into which the capitalist system could expand. Neither is the case today. For the first time since the Great Depression, we are enduring a structural crisis of capitalism, and the conditions that led the world out of it simply don’t exist today. There are no mass anti-capitalist movements remotely comparable to those of the 1930s, the advanced capitalist countries have largely hollowed-out industrial bases, there are very few places not already integrated into the world capitalist system, the power of capitalists is stronger and far more globalized, and those capitalists have set in motion an all-out race to the bottom.

Then add to that list the environmental crisis, looming shortages of natural resources as they are madly plundered, and increasing disruptions to agriculture from global warming. Moreover, there is the massive public and private debt piled up that can’t possibly be paid back (which didn’t exist in the 1930s). That structural debt is the leverage for capitalists, in particularly financiers, to impose austerity. Ever more for them, less for us. If more pain and more austerity is all that is coming to us, then a change of system, rather than an amelioration of that system, should be on the agenda.

In President Truman’s message to Congress when he vetoed Taft-Hartley, he gave as a crucial reason for his opposition that, under the act, “political power is to supplant economic power as the critical factor in labor relations.” Note that Truman wished “economic power” to remain decisive in labor relations. Truman had nothing to fear; economic power remained firmly in the seat. “Political power” continued to be wielded as a source of force on behalf of dominant “economic power,” as it does today.

That economic power, needless to say, is held tightly by capitalists. It can not be otherwise. Better labor laws would be of enormous benefit for working people, but gains are always temporary and taken back. Economic power is always wielded by those with the biggest piles of capital in a capitalist system and always will be, no matter what ameliorative laws are passed.

* Text posted on the University of California at Santa Barbara’s American Presidency Project.

More for the one percent, less for the 99 percent

By Pete Dolack

Although it may appear that manufacturers and financiers have different interests, they have a symbiotic relationship. There is a continual rivalry between them, but the push and pull of that rivalry shouldn’t be mistaken for a contradiction.

To be clear about what we are discussing here, capitalists broadly divide into two basic camps: industrialists (producers and distributors of tangible goods and services) and financiers (those whose business is financial transactions). A frequent “reading” of that divide is to imagine that bankers reign unchallenged at the top, subordinating even industrialists.

It is true that the two camps have different interests that sometimes conflict. But there is no neat division between the two; the two groups partially overlap and, ultimately, neither is independent from the other. Theirs is a relationship of mutual benefit and not a case of a “real” economy hijacked by a “fictitious” financial economy. Any rivalry between them, and any rivalry among specific capitalists, is quickly set aside when it comes to ensuring the functioning of the system that enriches both camps.

As an example, let’s examine three items that surfaced in the news during the past couple of weeks.

• Apple Inc. announced it would buy back shares of its stock and begin paying cash dividends.
• The United States Congress approved a bill that would exempt from existing oversight rules most companies preparing to issue initial public offerings.
• The Federal Reserve gave passing grades in its “stress tests” to almost all of the largest U.S. financial institutions, giving them green lights to hand out huge payouts to insiders.

Apple apparently reacted to mounting grumbling from within the financial industry that it is sitting on too much cash. The New York Times, on March 20, reported that Apple possesses nearly US$100 billion in cash and that, even after handing some of it to shareholders, its hoard of cash is expected to grow. Apple certainly earns a big profit: it reported net income of $26 billion on sales of $108 billion for its 2011 fiscal year, and also reported that its cash on hand had increased more than fourfold in the past five years.

In response to what is genteelly called “market pressure,” Apple will spend $45 billion during the next three years to buy back stock and to pay out dividends to shareholders. A stock buyback is when a company offers to buy stock from its shareholders at a premium to the trading price, giving a profit to those who accept the offer and leaving fewer shareholders to share in the profits for those who hold on to the stock. A stock buyback is another way to distribute profits.

The sharp-eyed reader may have noticed that none of the cash is going to, say, employees at the sweatshops who churn out Apple’s products for pennies. I touched on that issue in my Feb. 29 post on the exploitation of Chinese labor by non-Chinese multinational corporations. Chinese laborers earn, on average, about five percent of U.S. wages and endure work days of 12 or more hours six and seven days a week. A recent commentary in The Guardian noted that employees at Foxconn, Apple’s best-known sweatshop, work up to 16 hours a day while being forbidden to talk, with only a few minutes for toilet breaks. The factory came to the world’s attention after a rash of suicides by employees, so grim were the conditions.

We of course are bombarded with messages extolling the genius of the recently deceased Steven Jobs, the Apple founder who is said to have single-handedly created a desirable line of gadgets. (This post is being written on one of them.) Jobs was something of a visionary, but he had a staff of engineers to help him bring those products to tangible form, and an army of sweatshop workers to manufacture them.

Could Jobs have designed, built prototypes and assembled the finished products all by himself? I think not. It was the employees of Apple and Apple’s contractors who did those things. Why shouldn’t they get some of the rewards? Yet in the capitalist system, such a thought is beyond the pale. Profits — and all the money that originates in profits that is siphoned off by financiers — are created by paying employees much less than the value of what they produce. An infinitesimal portion, for those Foxconn sweatshop workers.

The more intense the exploitation, the bigger the profits. (I will take up this concept in more detailed fashion in future posts.) Industrialists and financiers argue over which gets the bigger piece of the pie, but they agree they should have the pie to themselves.

Dividends, of a somewhat different form, are part of the story of the second example, that of the congressional bill eliminating consumer protections in initial public offerings. In one of those wonderful Orwellian touches the U.S. Congress, in particular Republicans, are so capable of, the bill was given a title that would give it the acronym “JOBS Act.”

It would seem that the “JOBS Act” primarily will promote jobs at stock-market boiler rooms that peddle dubious stocks, unless we count the retirees who will have to go back to work when the next wave of scandals crests. The act will exempt “emerging growth” companies (that’s a euphemism for “smallish”) from financial-disclosure and corporate-governance rules for five years after an initial public offering (the conversion from a privately owned company to one that has stock traded on a stock market).

Regulations put in place after the corporate scandals of the past decade, such as the auditing requirements of the Sarbanes-Oxley Act, will not apply to “emerging growth” companies. Congress, however, has an expansive view of what falls into this category: companies with annual sales of up to $1 billion, vastly bigger than the growing small businesses the act’s supports claim to be helping.

The bubbles of the past two decades, the precursors to the current economic malaise, were inflated partly due to the lack of financial controls and oversight. So the solution put forth by capitalists, via their loyal congressional members, is to encourage a new bubble through reducing regulation. Less regulation means more short-term profits. That inflating asset bubbles is mistaken for a functioning economy speaks volumes.

And that brings us to the third of the three examples, that of the Federal Reserve allowing major financial institutions to resume business as usual. The “stress tests” administered to the 19 largest U.S. financial corporations — promoted as an examination to determine if the banks have enough reserves to withstand another economic downturn — are a public relations exercise designed to “assure” the public that the crisis is safely in the past and all is now well. Almost all passed.

We can breath a sigh of relief because those banks that passed can now shower their insiders with gigantic piles of money. The banks are now free to, here we are again, buy back stock and pay out bigger dividends. In an odd touch, JP Morgan Chase & Co. said two days before the Federal Reserve’s announcement granting permission that it would spend US$15 billion to buy back stock and raise its dividend payments sixfold. The New York Times reported that the $12 billion dedicated to the stock buybacks in 2012 alone would consume roughly two-thirds of the year’s expected earnings. JP Morgan was far from alone; almost every other big bank immediately said it would buy back stock, increase dividends or do both.

These are the same banks that were bailed out three years ago and continue to receive money from the Federal Reserve nearly interest-free. Many have operations in the European Union, where the European Central Bank is loaning money to banks at one percent interest, so that those banks can then buy the bonds that E.U. national governments are issuing at four, five or six percent interest.

Let’s summarize this process in two paragraphs: Governments borrow money from the rich and from corporations instead of taxing them, then have to pay higher interest rates on those borrowings because the rich and the corporations complain that too much is being borrowed. To ameliorate the demand for higher interest rates, the governments’ central banks are lending money nearly interest-free to the financial institutions and corporations so that they will continue to buy the governments’ loans at the higher interest rates. In exchange for continuing to buy government debt (which will earn them a nice profit because they are using the cheap money to buy the debt), the financial institutions demand that the governments cut social services, lay off workers, sell assets and impose other austerity measures.

As a result of the austerity, governments take in less revenue, so they have to borrow more from the rich and corporations, who have hoarded the country’s wealth, at the same time the governments’ central banks are giving financial institutions more cheap money and giving them the green light to hand out more money to insiders, leaving them more vulnerable to the next economic downturn, when, because they are “too big to fail,” they are confident they will receive another bailout.

Industrialists extract profits from their employees, with some of those profits going to financial institutions, in the form of interest on loans, as payouts to stockholders and as fees for services, and some of it goes there for purposes of speculation. Financiers can do nothing without pools of money, which are created in production. Financial speculators demand ever more profits and the top executives who deliver them can give themselves ever more stratospheric pay checks and bonuses. Mutual greed requires more be extracted, even though the profits are vastly beyond any reasonable need for investment or personal consumption.

The less given to employees, the more those at the top have to play with. Until we say no.

It’s not the Federal Reserve, it’s the system it serves

By Pete Dolack

There are details, and then there is the big picture. Mistaking the former for the latter can send an activist down the wrong path. A good example of this are the often well-meaning people who resolutely demand that we “End the Fed.”

But the problem isn’t the Federal Reserve, it is the system that it serves. If you don’t like the Fed, what you actually don’t like is the capitalist system.

The Federal Reserve, the central bank of the United States, is surely (as its critics accurately charge) a far too secretive, unaccountable branch of government that protects the interests of financiers at the expense of everybody else. A democratically accountable Fed that promulgated policies to increase employment and toward a socially responsible financial system would be welcome reforms.

But they would be unstable reforms, tinkering at the margins and would likely not change Fed policy in dramatic ways. Moreover, increasing oversight on the Fed wouldn’t eliminate the dominance of Wall Street or the largest corporations. There is plenty of oversight of other U.S. government agencies, yet corporate interests have little trouble bending policies toward their preferred outcomes.

Going further, and abolishing the whole thing, is, to be blunt, not a serious demand. Eliminating the Fed is a pointless idea because a central bank is a necessity in an advanced capitalist country, which is why each has one. And, perversely, eliminating the central bank would actually increase the dominance of financiers and would make the booms and busts of the capitalist business cycle sharper than they already are.

Strange as it seems today, when many voices on the Right and the Left echo the demand of “End the Fed,” there was a populist component to the creation of the Fed. Populists of the late 19th century wanted a more elastic currency so that the government could extend emergency credit when the economy collapsed (as it then frequently did) rather than be handcuffed by the gold standard.* In those days, when a crash happened, the U.S. government had to turn to the biggest robber barons of the day, such as J.P. Morgan, and ask them directly for a bailout.

Banks hoarded their reserves during crashes, making the downturns worse, and could issue their own banknotes, helping to fuel bubbles. But, since we are talking about the United States, it took a consensus on Wall Street and not popular demand for a central bank to be created in 1913. Financiers had come to believe that a central bank would temper the extremes of booms and busts, thereby stabilizing the economy. Industrialists joined financiers in that consensus.

Needless to say, the capitalists and not the populists were the drivers of Fed policy from the beginning. But a central bank does, albeit in a highly inegalitarian manner, stabilize a national economy through regulating credit and alternately tightening and loosening monetary policy. Central banks in all advanced capitalist countries manage domestic money supplies and currencies, a crucial task in today’s world in which markets subject to wild swings set prices for everything. The exception is in the countries using the euro, in which national central banks don’t have a currency to manage and are subordinate to the supranational European Central Bank, which is even more unaccountable than national-level central banks.

It won’t come as a surprise that financial institutions are skilled at finding ways around central bank policies. And central banks don’t necessarily do good, either — the Fed under Alan Greenspan encouraged the 1990s stock market bubble and the real estate bubble of the 2000s, and the post-crash Fed of Ben Bernanke is focused on the non-existent phantom of inflation while ignoring the all too real problem of high unemployment. The European Central Bank is, if anything, even more guilty of that than the Fed. The Fed, typical of central banks, is an institution staffed by and ideologically dependent on the financial industry. So it is no surprise that it consistently acts in a manner that benefits the financial industry and is detrimental to working people.

The entire capitalist system acts to benefit capitalists (industrialists and financiers) to the detriment of working people. Why should we expect an arm of a capitalist government to act any different? (Contrary to popular mythology, the Fed is part of the government, the Treasury Department to be specific; its all-powerful chair and board of governors are appointed by the president and approved by the Senate.)

If the Fed were eliminated, the exact same powerful capitalist interests would continue to bend government policy to their preferred outcome and would continue to exercise the same dominance over government, social institutions and the mass media. The only difference would be that the economy would become more unstable than it already is because there would be less ability on the part of government to dampen excesses. Why would that be good?

Concomitant to “End the Fed,” for those on the Right who echo that slogan, is a yearning to return the U.S. dollar to the gold standard. Most of these people do yearn for the good old days of the 19th century, when women, minorities and working people knew their place, and paid a violent price if they didn’t. I’ll pass over the irony of working people yearning for such a time. Unfortunately for gold fetishists, there is no returning to those simple times as capitalism has evolved into a much more complicated system. Capitalism can no longer function under a gold standard and indeed outgrew it in the 1970s.

Richard Nixon, then the U.S. president, pulled the dollar off the gold standard because retaining it was no longer in the interest of the U.S. despite the dollar’s centrality in the Bretton Woods system of fixed currency rates. In that system, implemented at the end of World War II, the dollar was fixed to the price of gold and all other currencies were fixed to the dollar; governments could and did change the value of their currencies based on their particular interests. Doing so was a big deal.

Such a system is more stable than the current one of free-floating currencies that continually rise and fall in foreign-exchange markets. Today’s system is heavily skewed by speculators, and it is precisely the pressure of financial speculators that began to burst the system of fixed exchange rates — today, the size of foreign-exchange markets dwarfs the size of stock markets and those traders are not about to forgo their profits.

There is too much special interest by financiers and speculators to allow a resumption of a gold standard. Going back on the gold standard would also handcuff governments trying to stimulate economies during economic downturns because they would not be able to issue new money. The supply of money would be determined by the productivity of South African gold mines, a rather odd circumstance. Moreover, gold is a commodity the same as any other; despite the fetishes that attach to it there is nothing more intrinsic to valuing money on it than on any other commodity. Why not tie the dollar to aluminum?

Capitalism is an unstable system that will always have booms and busts, and as time goes on the busts tend to worsen. (That tendency was temporarily kept at bay after the Great Depression by significant reforms, but those reforms have been undone and the tendency has reasserted itself.) Capitalism is a system in which those who amass the capital thereby amass power, and power translates into the ability to bend the rules to preferred outcomes or to bypass the rules. Money concentrates into fewer hands and wages are squeezed to facilitate the upward flow of money. Those who succeed are the people endowed with outsized desires to acquire and the personality traits that enable those desires to be met.

Yes, those people so endowed can and do create policy for the Fed, or any central bank. But ending the Fed wouldn’t touch the ability of people so endowed to suffuse their viewpoints and favored policy outcomes throughout a capitalist society, nor would it touch their ability to leverage their outsized wealth and the power their wealth gives them to shape government policy to benefit themselves.

Getting rid of government would actually intensify the dominance of industrialists and financiers in all spheres of life. The dominance of a globalized class that maintains power through a web of institutions and scrambles to manage ceaseless instability — not a small cabal of bankers who somehow control everything, an idea rooted in Right-wing conspiracy theories that easily shade off into anti-Semitism.

If you don’t like what the Fed does, it is because you don’t like what the capitalist system does. Blaming the central bank is no more than blaming the messenger.

* This and the following paragraph are based on the book Wall Street by Doug Henwood, pages 92 to 95 [Verso, 1998]