World Bank declares itself above the law

The World Bank has for decades left a trail of human misery. Destruction of the environment, massive human rights abuses and mass displacement have been ignored in the name of “development” that works to intensify neoliberal inequality. In response to legal attempts to hold it to account, the World Bank has declared itself above the law.

At least one U.S. trial court has already agreed that the bank can’t be touched, and thus the latest lawsuit filed against it, attempting to obtain some measure of justice for displaced Honduran farmers, faces a steep challenge. Regardless of the ultimate outcome of legal proceedings, however, millions of people around the world have paid horrific prices for the relentless pursuit of profit.

A trail of evictions, displacements, gross human rights violations (including rape, murder and torture), widespread destruction of forests, financing of greenhouse-gas-belching fossil-fuel projects, and destruction of water and food sources has followed the World Bank.

Honduras (photo by Zack Clark)

The latest attempt at accountability is a lawsuit filed in the U.S. federal court in Washington by EarthRights International, a human rights and environmental non-governmental organization, charging that the World Bank has turned a blind eye to systematic abuses associated with palm-oil plantations in Honduras that it has financed. The lawsuit, Juana Doe v. International Finance Corporation, alleges that

“Since the mid-1990s, the International Finance Corporation [a division of the World Bank] has invested millions of dollars in Honduran palm-oil companies owned by the late Miguel Facussé. Those companies — which exist today as Dinant — have been at the center of a decades-long and bloody land-grabbing campaign in the Bajo Aguán region of Honduras.

For nearly two decades, farmer cooperatives have challenged Dinant’s claims to sixteen palm-oil plantations … that it has held in the Bajo Aguán region. On information and belief, Dinant’s former owner, Miguel Facussé, took that land from the farmer cooperatives through fraud, coercion, and actual or threatened violence. The farmer cooperatives have engaged in lawsuits, political advocacy, and peaceful protests to challenge Dinant’s control and use of the land. And Dinant has responded to such efforts with violence and aggression.”

Bank’s own staff cites failures

EarthRights International alleges that the World Bank has “repeatedly and consistently provided critical funding to Dinant, knowing that Dinant was waging a campaign of violence, terror, and dispossession against farmers, and that their money would be used to aid the commission of gross human rights abuses.” The lawsuit filing cites “U.S. government sources” to allege that more than 100 farmers have been killed since 2009.

The suit also says that the International Finance Corporation’s own ombudsman said the World Bank division “failed to spot or deliberately ignored the serious social, political and human rights context.” These failures arose “from staff incentives ‘to overlook, fail to articulate, or even conceal potential environmental, social and conflict risk’ and ‘to get money out the door.’ ” Despite this internal report, the suit says, the World Bank continued to provide financing and that the ombudsman has “no authority to remedy abuses.”

(World Bank representatives did not respond to a request for comment. Although not directly a party to the lawsuit, Dinant describes the allegations as “absurd.” In a statement on its web site, the company said “All allegations that Dinant is — or ever has been — engaged in systematic violence against members of the community are without foundation.”)

Three Gorges Dam, a project funded by the World Bank that displaced 1.3 million people (photo by Christoph Filnkössl)

EarthRights International’s lawsuit faces an uphill challenge due to an earlier suit filed by it on behalf of Indian farmers and fisherpeople being thrown out by the same court when it ruled that the World Bank is immune from legal challenge. The bank provided $450 million for a power plant that the plaintiffs said degraded the environment and destroyed livelihoods. The court agreed with the World Bank’s contention that it has immunity under the International Organizations Immunities Act. (The dismissal has been appealed.)

The International Organizations Immunities Act provides that “International organizations, their property and their assets, wherever located, and by whomsoever held, shall enjoy the same immunity from suit and every form of judicial process as is enjoyed by foreign governments.” The World Bank has been declared the equivalent of a sovereign state, and in this context is placed above any law as if it possesses diplomatic immunity.

This law is applied selectively; lawsuits against Cuba are not only allowed but consistently won by plaintiffs. These are not necessarily the strongest of cases, such as participants in the Bay of Pigs invasion winning judgments and a woman who was married to a Cuban who went back to Cuba winning $27 million because the court found that her marriage made her a “victim of terrorism”!

More than 3 million people displaced

Despite its immunity, a passport may not be needed to enter a World Bank office, but can it be argued that the lending organization uses its immense power wisely? That would be a very difficult case to make.

A 2015 report by the International Consortium of Investigative Journalists found that 3.4 million people were physically or economically displaced by projects funded by the World Bank. Land was taken, people were forced from their homes and their livelihoods damaged. Some of the other findings of the report, on which more than 50 journalists from 21 countries worked:

  • From 2009 to 2013, the World Bank pumped $50 billion into projects graded the highest risk for “irreversible or unprecedented” social or environmental impacts — more than twice as much as the previous five-year span.
  • The bank regularly fails to live up to its own policies that purport to protect people harmed by projects it finances.
  • The World Bank and its International Finance Corporation lending arm have financed governments and companies accused of human rights violations such as rape, murder and torture. In some cases, they continued to bankroll these borrowers after evidence of abuses emerged.
  • Ethiopian authorities diverted millions of dollars from a World Bank-supported project to fund a violent campaign of mass evictions, according to former officials who carried out the forced resettlement program.

One of the articles that is a part of this investigative report said the bank routinely ignores its own rules that require detailed resettlement plans and that employees face strong pressure to approve big infrastructure projects. The report says:

“The World Bank often neglects to properly review projects ahead of time to make sure communities are protected, and frequently has no idea what happens to people after they are removed. In many cases, it has continued to do business with governments that have abused their citizens, sending a signal that borrowers have little to fear if they violate the bank’s rules, according to current and former bank employees.

‘There was often no intent on the part of the governments to comply — and there was often no intent on the part of the bank’s management to enforce,’ said Navin Rai, a former World Bank official who oversaw the bank’s protections for indigenous peoples from 2000 to 2012. ‘That was how the game was played.’ …

Current and former bank employees say the work of enforcing these standards has often been undercut by internal pressures to win approval for big, splashy projects. Many bank managers, insiders say, define success by the number of deals they fund. They often push back against requirements that add complications and costs.”

Funding that facilitates global warming

Incredibly, one of the outcomes of the Paris Climate Summit was for leaders of the G7 countries to issue a communiqué that they would seek to raise funds “from private investors, development finance institutions and multilateral development banks.” These leaders propose the World Bank be used to fight global warming despite it being a major contributor to projects that increase greenhouse-gas emissions, including providing billions of dollars to finance new coal plants around the world. The bank even had the monumental hypocrisy to issue a report in 2012 that called for slowing global warming while ignoring its own role.

It is hoped you, dear reader, won’t fall off your chair in shock, but the World Bank’s role in facilitating global warming has since only increased.

What happens to rain forests when the market is allowed to decide. (Photo of Montane Rainforest in Ecuador by Gunnar Brehm)

Financing projects that facilitate global warming had already been on the rise. A study prepared by the Institute for Policy Studies and four other organizations found that World Bank lending for coal, oil and gas reached $3 billion in 2008 — a sixfold increase from 2004. In the same year, only $476 million went toward renewable energy sources. Oil Change International (citing somewhat lower dollar figures) estimates that World Bank funding for fossil fuels doubled from 2011 to 2015.

Destructive logging projects across the Global South funded by the World Bank accelerated in the 1990s. Despite a January 2000 internal report finding that its lending practices had not curbed deforestation or reduced poverty, Southeast Asia saw a continuation of illegal logging and land concessions, and untimely deaths of local people blowing the whistle, as has Africa.

Similar to its report on curbing global warming that ignores its own role, the World Bank shamelessly issued a 2012 report calling for international law enforcement measures against illegal logging. Perhaps what is illegal are only those operations not funded by the bank?

Loans to pay debt create more debt, repeat

Ideology plays a critical role here. International lending organizations, such as the World Bank and International Monetary Fund, consistently impose austerity. The IMF’s loans, earmarked for loans to governments to pay debts or stabilize currencies, always come with the same requirements to privatize public assets (which can be sold far below market value to multi-national corporations waiting to pounce); cut social safety nets; drastically reduce the scope of government services; eliminate regulations; and open economies wide to multi-national capital, even if that means the destruction of local industry and agriculture. This results in more debt, which then gives multi-national corporations and the IMF, which enforces those corporate interests, still more leverage to impose more control, including heightened ability to weaken environmental and labor laws.

The World Bank compliments this by funding massive infrastructure projects that tend to enormously profit deep-pocketed international investors but ignore the effects on local people and the environment.

The World Bank employs a large contingent of scientists and technicians, which give it a veneer of authority as it pursues a policy of relentless corporate plunder. Noting that the bank possesses “an enormous research and knowledge generation capacity,” The environmental and social-justice organization ASEED Europe reports:

“The World Bank is the institution with one of the largest research budgets globally and has no rival in the field of development economics. … A number of researchers and scholars have questioned the reliability of the World Bank-commissioned research. Alice Amsdem, a top scholar on East Asian economies, argues that since the World Bank continually fails to scientifically prove its conclusions, its policy justifications are ‘quintessentially political and ideological.’ Regarding the World Development Report (WDR) series, for example, Nicholas Stern, an Oxford professor in economics and former World Bank chief economist says that many of the numbers used by the Bank come from highly dubious sources, or have been constructed in ways which leaves one sceptical as to whether they can be helpfully applied.” (citations omitted)

Capitalist ideology rests on the concept of “markets” being so efficient that they should be allowed to work without human intervention. But what is a market? Under capitalism, it is nothing more than the aggregate interests of the most powerful and largest financiers and industrialists. No wonder that “markets” “decide” that neoliberal austerity must be ruthlessly imposed — it is those at the top of vast corporate institutions who benefit from the decisions that the World Bank, and similar institutions, consistently make.

Markets do not sit in the clouds, beyond human control, as some perfect mechanism. They impose the will of those with the most who can not ever have enough. Markets are not ordained by some higher power — everything of human creation can be undone by human hands. Our current world system is no exception.

How do we build a movement?

Politely walking into pens set up by police, shaking our signs and gently dispersing will not build a movement serious about root-and-branch change. Even the more militant demonstrations, in which people — gasp! — actually take the streets in defiance of authorities, both legal and NGO, are far from sufficient.

This is not to say that we shouldn’t demonstrate. Nor is it to say that demonstrations aren’t important and necessary. They are. Demonstrations are important (including the semi-official large-scale walks in which government officials are moved to participate) because they signal popular anger, activate people by showing others that there are millions who think similarly, and serve as a potentially invaluable organizing tool.

Rally on Nevsky Prospekt in St. Petersburg after the February Revolution of 1917 (Source: State museum of political history of Russia)

But demonstrations don’t, and can’t, change anything by themselves. They don’t touch the system and threaten no one in power. This is especially so when they are “one-off” events. Remember that it was only two autumns ago that an estimated 400,000 people marched through the streets of New York City in defense of the environment. There were street actions in the financial district the next day, ones that were permitted to go on for much the day because it would have been too embarrassing for the gentrification mayor, Bill de Blasio, the Obama of New York, to have openly suppressed it one day after he marched in the big Sunday stroll.

But, then — nothing. The energy generated by the march evaporated; it might as well not have happened. It didn’t help that march organizers raised no demands, much less attempted to connect global warming and environmental destruction with economic issues. Organizing a march simply to generate media attention is a dead-end strategy.

A steady crescendo of demonstrations and marches certainly are part of any serious movement. But petitioning leaders to do better for working people yields meager gains. There are structural issues here: When Bill Clinton, Barack Obama, Jean Chrétien, Tony Blair, Gordon Brown, Francois Hollande, Gerhard Schröder, José Luis Rodríguez Zapatero, Matteo Renzi and Alexis Tsipras follow the same path, then a condemnation of personality doesn’t provide explanations.

There are no saviors. We will have to save ourselves. And we won’t save ourselves without organization or commitment.

Fighting on all fronts

An unused tool does nothing. A tool used properly multiplies force. A serious movement needs a full toolbox and not simply one tool.

Such a toolbox can only be wielded by cohesive organizations welding together movements in broad alliances that provide scope for people with specific issues and oppressions to advance their goals simultaneous with rooting these in larger understandings of the structural causes of them and the systemic crises that must be tackled. The days of telling people that you need to wait your turn and, anyway, your oppression will be solved once we have a revolution need to be definitively over. On the other hand, splintering into a myriad of groups working only on specific issues in isolation from one another is a guarantee of ineffectiveness.

Nor is it necessary to choose between “identity politics” and “class politics.” We need to fight on all fronts, using both what is relevant from past struggles and new tactics and strategies reflecting contemporary understandings arising out of current conditions. Nor should it be an obligation to accept or reject organizational structures simply because they are old or new. There are vast gradations between those who believe we should just replicate whatever Vladimir Lenin did and those who believe we should spend three hours a night in open-air assemblies.

Women’s March of January 21, 2017, in Chicago (photo by Jonathan Eyler-Werve)

Practice without theory amounts to running around in circles with no effectiveness. Theory without practice is arm-chair pontificating. Only a synthesis of theory and practice can propel a movement forward to effective action. That synthesis does not fall out of the sky.

Theory derives from examining our experiences, both in our everyday lives and in movement work, and developing ideas out of these in opposition to the dominant propaganda — ideas that can be translated into concrete actions. Effective action, in turn, is impossible without organization.

In her thoughtful paper, “Ideas for the Struggle,” Marta Harnecker writes that the example of successful revolutions demonstrates that a “political instrument” capable of a national struggle and based on current, concrete conditions is essential. She argues that people who believe that strong organizations are something to be avoided because many parties of the past engaged in authoritarian or manipulative political practices should not be trapped in the past. She writes:

“I believe it is fundamental for us to overcome this subjective barrier and understand that when we refer to a political instrument, we are not thinking about any political instrument; we are dealing with a political instrument adjusted to the new times, an instrument that we must build together. … We are talking about understanding politics as the art of constructing a social and political force capable of changing the correlation of force in favor of the popular movement, to make possible in the future what today appears impossible. We have to think of politics as the art of constructing forces. We have to overcome the old and deeply-rooted mistake of trying to build a political force without building a social force.”

Changing the world means taking power

We can ignore the state all we want; the state will not ignore us if we mount any challenge to present-day orthodoxy. Nor will the new age concept of “changing ourselves” lead to any social change. If we want a better world, that entails eventually taking power. As Vivek Chibber recently put it at the “Global Resistance in the Neoliberal University” conference: “A politics that doesn’t try to take power isn’t politics — it’s just talking.”

The task, however, not only is immense but must be conducted on multiple levels, Ms. Harnecker writes:

“[W]e must develop a process of popular construction opposed to capitalism in the territories and spaces won by the left, that seeks to break with the profit logic and the relations this imposes and tries to instill solidarity-based humanist logics. We must promote struggles that are not limited to simple economic demands — although these need to be included — but that advance the development of a more global, social project that encourages authentic levels of power from the grassroots.”

And what form should a “political instrument” take? These need not take any specific form — and in pluralistic societies are likely to encompass multiple forms. Yet if building an effective movement that is sustainable, institutionalizes memory through integrating past experiences and aims toward a transformation of society, a party is necessary, argues Jodi Dean. In her 2016 book Crowds and Party, she argues that Leftists who want to create a better world have to get past their criticisms of the party form, and not become trapped in their own self-critique or allow critiques of specific parties to become a universal rejection of the party form.

This argument is made in the context of analyzing why Occupy so quickly dissipated. The birth of a movement such as Occupy should represent a beginning, not an end. A spontaneous outburst of popular action, such as Occupy, is often seen as an end in itself. Such spontaneity needs a permanent form for meeting the challenge of maintaining a movement. Professor Dean argues that those who mistake an opening for the end,

“treat organization, administration, and legislation as a failure of revolution, a return of impermissible domination and hierarchy rather than as effects and arrangements of power, rather than as attributes of the success of a political intervention. The politics of the beautiful moment is no politics at all. Politics combines the opening with direction, with the insertion of the crowd disruption into a sequence or process that pushes one way or another. There is no politics until a meaning is announced and the struggle over this meaning begins.”

New forms of organization

This does not mean a party is the only organizational form. Nor does it have to mean that a single party will, or can, express the full range of demands of a broad movement or represent all shades of opinion, especially given the divide that will likely persist for some time between those who begin with a goal of fundamental transformation and those who advocate reforms. Given the pluralism of most countries, including all advanced capitalist countries (not to mention the complexity of modern life), the formation of multiple parties should be seen as healthy.

A successful movement will inevitably be a coalition; the political expressions of this should be coalitions as well. Popular-front types of organization, movement coalitions organized to achieve specific goals while allowing participating groups to express their particular perspectives, are forms likely to be necessary to create the sufficient scale of activists needed to effect advances.

A multitude of popular organizations, reflecting not only the differing sites of struggle but the necessarily different types of struggle, will come into being. These need not be permanent, although some will be. Self-organized councils or assemblies of workers sustaining an enterprise occupation or sit-in strike is but one form; neighborhood organizations uniting into bodies representing larger spaces of geography, advocacy groups and the creation of liberated zones are among others.

New types of unions could be still another form. Staughton Lynd, in his recently updated book Solidarity Unionism: Rebuilding the Labor Movement from Below, argues that present-day unions are “institutional dinosaurs, resembling nothing so much as the corporations we are striving to replace.” He advocates shop-floor committees that organize around grievances and problems rather than negotiating contracts and that use direct action, even in opposition to union leaders, and “parallel central labor bodies” that organize workers in a geographic region, across industries. New labor organizations should be built on solidarity, he writes:

“[B]y building organizations based on solidarity, rather than on bureaucratic chain-of-command, we build organizations that by their very existence help to bring a new kind of society into being.”

As with any other organization created to address specific problems, sustaining effectiveness will be impossible without linking the specific problems to other issues and in turn linking related issues to larger structural critiques. The enormous institutional advantages that industrialists and financiers possess through their ability to exert decisive influence over governments, their domination of the mass media, the disposal of police and military forces at their service, and ability to infuse their preferred ideologies through a web of institutions present enormous challenges. This is a hegemony that must be broken, and won’t be broken until a critical mass of people come to understand the excuses that buttress all this for the self-serving ideology that it is.

Breaking hegemony through alternative examples

Laurence Cox and Alf Gunvald Nilsen, in their 2014 book We Make Our Own History: Marxism and Social Movements in the Twilight of Neoliberalism, argue that the work of breaking this hegemony necessitates defeating the state, breaking up at least some power relations and instituting new ones, but doing so through the masses, not a vanguard.

Mural paintings in honor of Jecar Neghme of Chile’s MIR in the place where he was killed by the Pinochet government. (Credit: Ciberprofe)

As no movement, organization or leader has a monopoly of ideas, Professors Cox and Nilsen envision a “movement of movements”: The coming together of independent movements without the intention of submitting to the leadership of any single party or of privileging narrow definitions of working class interests. This necessitates not only learning from one another to increase the body of knowledge that can be drawn upon but also learning from the past. They write:

“These situations share a potential for human self-development to flourish beyond the normal limits set by exploitation, oppression, ignorance and isolation, creating institutions driven by human need rather than by profit and power. … These ‘everyday utopias’ do not need to be installed from above by decree; what they do need is a breaking of power relations within communities, workplaces, state institutions and globally, which stand in their way.”

Nothing of human creation lasts forever. Capitalism, despite the frantic scribblings of apologists for inequality, is no more immune from this than previous forms of economic and social relations. What will replace it is up to all of us. Given that infinite growth is impossible on a finite planet, that hard-won reforms are temporary in a system of massive and pervasive power imbalances, that no permanent solutions are available in a system that is dependent on its most powerful institutions (large corporations) being able to offload all responsibility for pollution and other social problems on society, and that inequality, endless growth, global warming and pollution are necessary byproducts for the system to function at all, limits will be reached.

If this is the last century of capitalism, what will replace it? It could be something worse — some combination of high-tech fascism imposed on feudal arrangements in which a minuscule minority uses extreme force to hoard the world’s dwindling resources for itself is not only not out of the question, but the likely response of a capitalist elite that will stop at nothing to maintain itself. In the continued absence of organized resistance across borders, that may well be the future. Or a better world can be created, through organized struggle, that is based on fulfilling human need within environmentally sustainable practices in which everybody has a say in how their enterprise functions and in larger political and social decisions.

One day, people have had enough

These words are being written on the 100th anniversary of the start of the February Revolution in Russia. Let’s take a moment to reflect on that momentous event, which toppled an absolute monarch who ruled as a direct representative of God and whose every word was indisputable law. A monarchy that had no hesitation in shooting down protestors in the hundreds or thousands, where the overwhelming majority lived in unspeakable poverty and illiteracy.

Women protest in St. Petersburg on International Women’s Day, 1917

More than 300,000 Petrograd workers took part in strikes during the seven weeks immediately preceding the February Revolution, during which time three major demonstrations were planned, and mutinies spread throughout the army. The tsarist régime responded with lockouts of factory workers, shootings of strikers by the police and army, and mass arrests.

But on one day in 1917 (March 8 in the Gregorian calendar not yet in use in Russia), tens of thousands of women textile workers in Petrograd (as St. Petersburg was then called) walked out. The women walked to nearby metal factories, told the men there to join them on strike, and both groups inspired workers in other factories to walk out. More struck the next day. The day after that, a general strike was under way in Petrograd, with demonstrators shouting anti-war and anti-monarchy slogans. Within a week, the tsar abdicated.

Years of tireless work paid off. As I wrote in my book It’s Not Over: Learning From the Socialist Experiment:

“One more strike, one additional action following hundreds of actions, one action that on the day it began did not seem noticeably different from previous actions, put the revolution in motion. Why this one? It is impossible to say. Perhaps all that can be said is that on that particular day, enough Russians, or at least enough Petrograd women and men, were sufficiently exasperated to do something about it. The February Revolution is an excellent example of the necessity of continuing to struggle: It is usually impossible to predict which spark will be the one to catch fire. The revolutionaries were surprised by the revolution, and perhaps that could not have been otherwise. But the revolution would not have happened without their work.”

Russians had ceased to believe the ideologies that kept their society in place. Similarly, our task today is to explode the mythologies that undergird our current world. This is a big task, but one that is indispensable, Henry Giroux writes:

“Central to a viable notion of ideological and structural transformation is a refusal of the mainstream politics of disconnect. In its place is a plea for broader social movements and a more comprehensive understanding of politics in order to connect the dots between, for instance, police brutality and mass incarceration, on the one hand, and the diverse crises producing massive poverty, the destruction of the welfare state, and the assaults on the environment, workers, young people and women. …

[P]rogressives must address the crucial challenge of producing cultural apparatuses such as alternative media, think tanks and social services in order to provide models of education that enhance the ability of individuals to make informed judgments, discriminate between evidence based arguments and opinions, and to provide theoretical and political frameworks for rethinking the relationship between the self and others based on notions of compassion, justice, and solidarity.”

And as a reminder that we need to take care of each other, because struggle is such hard work, it’s appropriate to offer a quote from Mark Fisher, who recently left this world all too prematurely:

“Emancipatory politics must always destroy the appearance of a ‘natural order,’ must reveal what is presented as necessary and inevitable to be a mere contingency, just as it must make what was previously deemed to be impossible seem attainable.”

Good words to remember, even if many of us won’t be around long enough to see a better world come into being. Struggle we must, regardless. I don’t wish for the following words to be reduced to cliché because they are uttered so often (including by me), but the choice for the future remains socialism or barbarism. Let us be worthy of our task.

The bait and switch of public-private partnerships

This being the age of public relations, the genteel term “public-private partnership” is used instead of corporate plunder. A “partnership” such deals may be, but it isn’t the public who gets the benefits.

We’ll be hearing more about so-called “public-private partnerships” in coming weeks because the new U.S. president, Donald Trump, is promoting these as the basis for a promised $1 trillion in new infrastructure investments. But the new administration has also promised cuts to public spending. How to square this circle? It’s not difficult to discern when we recall the main policy of the Trump administration is to hand out massive tax cuts to big business and the wealthy, and provide them with subsidies.

Public-private partnerships are one of the surest ways of shoveling money into the gaping maws of corporate wallets, used, with varying names, by neoliberal governments around the world, particularly in Europe and North America. The result has been disastrous — public services and infrastructure maintenance is consistently more expensive after privatization. Cuts to wages for workers who remain on the job and increased use of low-wage subcontractors are additional features of these privatizations.

Chicago at night (photo by Lol19)

Chicago at night (photo by Lol19)

The rationale for these partnerships is, similar to other neoliberal prescriptions, ideological — the private sector is supposedly always more efficient than government. A private company’s profit incentive will supposedly see to it that costs are kept under control, thereby saving money for taxpayers and transferring risk to the contractor. In the real world, however, this works much differently. A government signs a long-term contract with a private enterprise to build and/or maintain infrastructure, under which the costs are borne by the contractor but the revenue goes to the contractor as well.

The contractor, of course, expects a profit from the arrangement. The government doesn’t — and thus corporate expectation of profits requires that revenues be increased and expenses must be cut. Less services and fewer employees means more profit for the contractor, and because the contractor is a private enterprise there’s no longer public accountability.

Public-private partnerships are nothing more than a variation on straightforward schemes to sell off public assets below cost, with working people having to pay more for reduced quality of service. A survey of these partnerships across Europe and North America will demonstrate this clearly, but first a quick look at the Trump administration’s plans.

Corporate subsidies, not $1 trillion in new spending

The use of the word “plans” is rather loose here. No more than the barest outline of a plan has been articulated. The only direct mention of his intentions to jump-start investment in infrastructure is found in President Trump’s campaign web site. In full, it states the plan “Leverages public-private partnerships, and private investments through tax incentives, to spur $1 trillion in infrastructure investment over ten years. It is revenue neutral.” The administration’s official White House web site’s sole mention of infrastructure is an announcement approving the Keystone XL and Dakota Access pipelines without environmental reviews, and an intention to expedite environmental reviews for “high priority infrastructure projects.”

Wilbur Ross, an investment banker who buys companies and then takes away pensions and medical benefits so he can flip his companies for a big short-term profit, and who is President Trump’s pick for commerce secretary, along with a conservative economics professor, Peter Navarro, have recommended the Trump administration allocate $137 billion in tax credits for private investors who underwrite infrastructure projects. The two estimate that over 10 years the credits could spur $1 trillion in investment. So the new administration won’t actually spend $1 trillion to fix the country’s badly decaying infrastructure; it hopes to encourage private capital to do so through tax cuts.

The Sea-to-Sky Highway in British Columbia (photo by D. Vincent Alongi)

The Sea-to-Sky Highway in British Columbia (photo by D. Vincent Alongi)

There is a catch here — private capital is only going to invest if a steady profit can be extracted. Writing in the New Republic, David Dayen put this plainly:

“Private operators will only undertake projects if they promise a revenue stream. You may end up with another bridge in New York City or another road in Los Angeles, which can be monetized. But someplace that actually needs infrastructure investment is more dicey without user fees. So the only way to entice private-sector actors into rebuilding Flint, Michigan’s water system, for example, is to give them a cut of the profits in perpetuity. That’s what Chicago did when it sold off 36,000 parking meters to a Wall Street-led investor group. Users now pay exorbitant fees to park in Chicago, and city government is helpless to alter the rates.”

The Trump plan appears to go beyond even the ordinary terms of public-private partnerships because it would transfer money to developers with no guarantee at all that net new investments are made, according to an Economic Policy Institute analysis. The EPI report asks several questions:

“[I]t appears to be a plan to give tax credits to private financiers and developers, period. The lack of details here are daunting and incredibly important. For starters, we don’t know if the tax credit would be restricted to new investment, or if investors in already existing [public-private partnerships] are eligible for the credit. If private investors in already existing PPP arrangements are eligible, how do we ensure these tax credits actually induce net new investments rather than just transferring taxpayer largesse on operators of already-existing projects? Who decides which projects need to be built? How will the Trump administration provide needed infrastructure investments that are unlikely to be profitable for private providers (such as building lead-free water pipes in Flint, MI)? If we assume tax credits will be restricted (on paper, anyhow) to just new investment, how do we know the money is not just providing a windfall to already planned projects rather than inducing a net increase in how much infrastructure investment occurs?”

Critiques of this scheme can readily be found on the Right as well. For example, Douglas Holtz-Eakin, a former head of the Congressional Budget Office and economic adviser to John McCain’s 2008 presidential campaign, told The Associated Press, “I don’t think that is a model that is going be viewed as successful or that you can use it for all of the infrastructure needs that the U.S. has.”

Corporations plunder, people pay in Britain

Britain’s version of public-private partnerships are called “private finance initiatives.” A scheme concocted by the Conservative Party and enthusiastically adopted by the New Labour of Tony Blair and Gordon Brown, the results are disastrous. A 2015 report in The Independent reveals that the British government owes more than £222 billion to banks and businesses as a result of private finance initiatives. Jonathan Owen reports:

“The startling figure – described by experts as a ‘financial disaster’ – has been calculated as part of an Independent on Sunday analysis of Treasury data on more than 720 PFIs. The analysis has been verified by the National Audit Office. The headline debt is based on ‘unitary charges’ which start this month and will continue for 35 years. They include fees for services rendered, such as maintenance and cleaning, as well as the repayment of loans underwritten by banks and investment companies.

Responding to the findings, [British Trades Union Congress] General Secretary Frances O’Grady said: ‘Crippling PFI debts are exacerbating the funding crisis across our public services, most obviously in our National Health Service.’ ”

Under private finance initiatives, a consortium of private-sector banks and construction firms finance, own, operate and lease the formerly public property back to the U.K. taxpayer over a period of 30 to 35 years. By no means do taxpayers receive value for these deals — and the total cost will likely rise far above the initial £222 billion cost. According to The Independent:

“The system has yielded assets valued at £56.5bn. But Britain will pay more than five times that amount under the terms of the PFIs used to create them, and in some cases be left with nothing to show for it, because the PFI agreed to is effectively a leasing agreement. Some £88bn has already been spent, and even if the projected cost between now and 2049/50 does not change, the total PFI bill will be in excess of £310bn. This is more than four times the budget deficit used to justify austerity cuts to government budgets and local services.”

The private firms can even flip their contracts for a faster payday. Four companies given 25-year contracts to build and maintain schools doubled their money by selling their shares in the schemes less than five years into the deals for a composite profit of £300 million. Clearly, these contracts were given at well below reasonable cost.

City of London expanding (Photo by Will Fox)

City of London expanding (Photo by Will Fox)

One of the most prominent privatization disasters was a £30 billion deal for Metronet to upgrade and maintain London’s subway system. The company failed, leaving taxpayers with a £2 billion bill because Transport for London, the government entity responsible for overseeing the subway, guaranteed 95 percent of the debt the private companies had taken out. Then there is the example of England’s water systems, directly sold off. The largest, Thames Water, was acquired by a consortium led by the Australian bank Macquarie Group. This has been disastrous for rate payers but most profitable to the bank. An Open University study found that, in four of the five years studied, the consortium took out more money from the company than it made in post-tax profits, while fees increased and service declined.

As for the original sale itself, the water companies were sold on the cheap. Although details of the business can be discussed by “stakeholders,” the authors conclude, the privatization itself remains outside political debate, placing a “ring-fence” around the issues surrounding the privatization, such as the “politics of packaging and selling households as a captive revenue stream.” The public has no choice when the water provider is a monopoly and thus no say in rates.

Incredibly, Prime Minister Theresa May and the Tories intend to sell off more public services to Macquarie-led consortiums.

Corporations plunder, people pay across Europe

Privatization of water systems has not gone better in continental Europe. Cities in Germany and France, including Paris, have taken back their water after selling systems to corporations. The city of Paris’ contracts with Veolia Environment and Suez Environment, expired in 2010; during the preceding 25 years water prices there had doubled, after accounting for inflation, according to a paper prepared by David Hall, a University of Greenwich researcher. Despite the costs of taking back the water system, the city saved €35 million in the first year and was able to reduce water charges by eight percent. Higher prices and reduced services have been the norm for privatized systems across France, according to Professor Hall’s study.

German cities have also “re-municipalized” basic utilities. One example is the German city of Bergkamen (population about 50,000), which reversed its privatization of energy, water and other services. As a result of returning those to the public sector, the city now earns €3 million a year from the municipal companies set up to provide services, while reducing costs by as much as 30 percent.

The Grand Palais in Paris (photo by Thesupermat)

The Grand Palais in Paris (photo by Thesupermat)

Water is big business. Suez and Veolia both reported profits of more than €400 million for 2015. Not unrelated to this is the increasing prominence of bottled water. Bottled water is dominated by three of the world’s biggest companies: Coca-Cola (Dasani), PepsiCo (Aquafina) and Nestlé (Poland Springs, Deer Park, Arrowhead and others). So it’s perhaps not surprising that Nestlé Chairman Peter Brabeck-Letmathe infamously issued a video in which he declared the idea that water is a human right “extreme” and that water should instead have a “market value.”

One privatization that has not been reversed, however, is Goldman Sachs’ takeover of Denmark’s state-owned energy company Dong Energy. Despite strong popular opposition, the Danish government sold an 18 percent share in Dong Energy to Goldman Sachs in 2014 while giving the investment bank a veto over strategic decisions, essentially handing it control. The bank was also given the right to sell back its shares for a guaranteed profit. Goldman Sachs has turned a huge profit already — two years after buying its share, Dong began selling shares on the stock market, and initial trading established a value for the company twice as high as it was valued for purposes of selling the shares to Goldman. In other words, Goldman’s shares doubled in value in just two years — a $1.7 billion gain.

Danes have paid for this partial privatization in other ways as well. Taking advantage of the control granted it, Goldman demanded lower payments to Danish subcontractors and replaced some subcontractors who refused to use lower-paid workers.

Corporations plunder, people pay in Canada

Canada’s version of public-private partnerships has followed the same script. A report by the Canadian Centre for Policy Alternatives flatly declared that

“In every single project approved so far as a P3 in Ontario, the costs would have been lower through traditional procurement if they had not inflated by these calculations of the value of ‘risk.’ The calculations of risk could just as well have been pulled out of thin air — and they are not small amounts.”

Not that Ontario is alone here. Among the examples the Centre provides are a hospital, Brampton Civic, that cost the public $200 million more than if it had been publicly financed and built directly by Ontario; the Sea-to-Sky Highway in British Columbia that will cost taxpayers $220 million more than if it had been financed and operated publicly; bailouts of the companies operating the city of Ottawa’s recreational arenas; and a Université de Québec à Montréal project that doubled the cost to $400 million.

A separate study by University of Toronto researchers of 28 Ontario public-private partnerships found they cost an average of 16 percent more than conventional contracts.

Corporations plunder, people pay in the United States

In the United States, a long-time goal of the Republican Party has been to privatize the Postal Service. To facilitate this, a congressional bill signed into law in 2006 required the Postal Service to pre-fund its pension costs for the next 75 years in only 10 years. This is unheard of; certainly no private business would or could do such a thing. This preposterous requirement saddled the Postal Service with a $16 billion deficit. The goal here is to weaken the post office in order to manufacture a case that the government is incapable of running it.

The city of Chicago has found that there are many bad consequences of public-private partnerships beyond the monetary. In 2008, Chicago gave a 75-year lease on its parking meters to Morgan Stanley for $1 billion. Shortly afterward, the city’s inspector general concluded the value of the meter lease was $2 billion. Parking rates skyrocketed, and the terms of the lease protecting Morgan Stanley’s investment created new annual costs for the city, according to a Next City report.

Haze from forest fires in St. Mary Valley, Glacier National Park. Republicans are targeting national parks for sale, too. (photo by Pete Dolack)

Haze from forest fires in St. Mary Valley, Glacier National Park. Republicans are targeting national parks for sale, too. (photo by Pete Dolack)

That report noted that plans for express bus lanes, protected bike lanes and street changes to enhance pedestrian safety are complicated by the fact that each of these projects requires removing metered parking spaces. Removing meters requires the city to make penalty payments to Morgan Stanley. Even removals for street repairs requires compensation; the Next City report notes that the city lost a $61 million lawsuit filed by the investment bank because of street closures.

Nor have water systems been exempt from privatization schemes. A study by Food & Water Watch found that:

  • Investor-owned utilities typically charge 33 percent more for water and 63 percent more for sewer service than local government utilities.
  • After privatization, water rates increase at about three times the rate of inflation, with an average increase of 18 percent every other year.
  • Corporate profits, dividends and income taxes can add 20 to 30 percent to operation and maintenance costs.

Pure ideology drives these privatization schemes. The Federal Reserve poured $4.1 trillion into buying bonds, which did little more than inflate a stock-market bubble, while the investment needs to rebuild U.S. water systems, schools and dams, plus cleaning up Superfund sites and eliminating student debt, are less at a combined $3.4 trillion. What if that Federal Reserve money had gone to those instead?

“Public investment to create private profit”

Given its billionaire leadership, the Trump administration’s plans for public-private partnerships will not lead to better results, and may well be even worse. Michael Hudson recently summarized what is likely coming in this way:

“Mr. Trump wants to turn the U.S. economy into the kind of real estate development that has made him so rich in New York. It will make his fellow developers rich, and it will make the banks that finance this infrastructure rich, but the people are going to have to pay for it in a much higher cost for transportation, much higher cost for all the infrastructure that he’s proposing. So I think you could call Trump’s plan ‘public investment to create private profit.’ That’s really his plan in a summary, it looks to me.”

This makes no sense as public policy. But it is consistent with the desire of capitalists to continually extract higher profits from any and all human activity. Similar to governments handing over their sovereignty to multi-national corporations in so-called “free trade” deals that facilitate the movement of production to locales with ever lower wages and weaker laws, public-private partnerships represent a plundering of the public sector for private profit, and government surrender of public goods. All this is a reflection of the imbalance of power in capitalist countries.

This is “the market” in action — and the market is nothing more than the aggregate interests of the most powerful industrialists and financiers. It also reflects that as capitalist markets mature and capital runs out of places into which to expand, ongoing competitive pressures will drive corporate leaderships to reduce expenses (particularly wages) and move into new lines of business. Taking over what had been the public sector is one way of achieving this, especially if public goods can be bought below fair market value and guarantees of profits extracted.

The ruthless logic of capitalism is that a commodity goes to those who can pay the most, regardless of whether it is something essential to human life.

TPP is not dead: It’s now called the Trade In Services Agreement

One can hear the cry ringing through the boardrooms of capital: “Free trade is dead! Long live free trade!”

Think the ideas behind the Trans-Pacific Partnership or the so-called “free trade” regime are buried? Sadly, no. Definitely, no. Some of the countries involved in negotiating the TPP seeking to find ways to resurrect it in some new form — but that isn’t the most distressing news. What’s worse is the TPP remains alive in a new form with even worse rules. Meet the Trade In Services Agreement, even more secret than the Trans-Pacific Partnership. And more dangerous.

The Trade In Services Agreement (TISA), currently being negotiated among 50 countries, if passed would prohibit regulations on the financial industry, eliminate laws to safeguard online or digital privacy, render illegal any “buy local” rules at any level of government, effectively dismantle any public advantages to be derived from state-owned enterprises and eliminate net neutrality.

TISA negotiations began in April 2013 and have gone through 21 rounds. Silence has been the rule for these talks, and we only know what’s in it because of leaks, earlier ones published by WikiLeaks and now a new cache published January 29 by Bilaterals.org.

Earlier draft versions of TISA’s language would prohibit any restrictions on the size, expansion or entry of financial companies and a ban on new regulations, including a specific ban on any law that separates commercial and investment banking, such as the equivalent of the U.S. Glass-Steagall Act. It would also ban any restrictions on the transfer of any data collected, including across borders; place social security systems at risk of privatization or elimination; and put an end to Internet privacy and net neutrality. It hasn’t gotten any more acceptable.

Photo by Annette Dubois

Photo by Annette Dubois

TISA is the backup plan in case the TPP and the Transatlantic Trade and Investment Partnership don’t come to fruition. Perhaps fearful that the recent spotlight put on “free trade” deals might derail TISA as it derailed TPP, the governmental trade offices negotiating it have not announced the next negotiating date. The closest toward any meaningful information found was the Australian government’s bland statement that the “Parties agreed to reconvene in 2017.”

The cover story for why TISA is being negotiated is that it would uphold the right to hire the accountant or engineer of your choice, but in reality is intended to enable the financial industry and Internet companies to run roughshod over countries around the world. And while “liberalization” of professional services is being promoted, the definition of “services” is being expanded in order to stretch the category to encompass manufacturing. Deborah James of the Center for Economy and Policy Research laid out the breathtaking scope of this proposal:

“Corporations no longer consider setting up a plant and producing goods to be simply ‘manufacturing goods.’ This activity is now is broken down into research and development services, design services, legal services, real estate services, architecture services, engineering services, construction services, energy services, employment contracting services, consulting services, manufacturing services, adult education services, payroll services, maintenance services, refuse disposal services, warehousing services, data management services, telecommunications services, audiovisual services, banking services, accounting services, insurance services, transportation services, distribution services, marketing services, retail services, postal and expedited delivery services, and after-sales servicing, to name a few. Going further, a shoe or watch that measures steps or sleep could be a fitness monitoring service, not a good. A driverless car could be a transport service, not an automobile. Google and Facebook could be information services and communication services, respectively.”

Why is it you are kept in the dark?

Before we get to the details of the text itself, let’s take a quick look at how the world’s governments, on behalf of multi-national capital, are letting their citizens know what they are up to. Or, to be more accurate, what they are not telling you. Many governments have not bothered to update their official pages extolling TISA in months.

The European Union is negotiating TISA on behalf of its 28 member countries, along with, among others, the United States, Canada, Mexico, Australia, New Zealand, Japan, South Korea, Taiwan, Chile, Colombia, Peru, Norway, Switzerland, Pakistan and Turkey.

In the United States, the new Trump administration has yet to say a word about it. The Office of the U.S. Trade Representative web site’s page on TISA still says “TiSA is part of the Obama Administration’s ongoing effort to create economic opportunity for U.S. workers and businesses by expanding trade opportunities.” Uh-huh. President Donald Trump is not against “free trade” deals; he simply claims he can do it better. The Trump administration has issued blustery calls for “fair deals” and braggadocio puffing up Donald Trump’s supposed negotiating prowess. A typical White House passage reads, “To carry out his strategy, the President is appointing the toughest and smartest to his trade team, ensuring that Americans have the best negotiators possible. For too long, trade deals have been negotiated by, and for, members of the Washington establishment.”

overlap-of-trade-dealsMore typical of the TISA negotiators is the latest report from the European Commission, which summarized the latest round, held last November, this way: “Parties made good progress in working towards an agreed text and finding pathways towards solving the most controversial outstanding issues at both Chief Negotiators and Heads of Delegation levels.” The Canadian government’s last update is from last June and declares “Parties conducted a stocktaking session to assess the level of progress on all issues.”

Traveling across the Pacific brings no more useful information. Australia’s government offers this information-free update: “Parties agreed to a comprehensive stocktake of the negotiations, identifying progress made and areas which require ongoing technical work.” New Zealand’s government can’t even be bothered to provide updates, instead offering only discredited, boilerplate public-relations puffery similar to other trade offices.

The one hint that TISA negotiations are experiencing difficulty that could be found through an extensive online search is this passage in a U.S. Congressional Research Service report dated January 3, 2017: “Recognizing that outstanding issues remain and the U.S. position under a new administration is unclear, the parties canceled the planned December 2016 meeting but are meeting to determine how best to move forward in 2017.” Given that the new administration is moving as fast as possible to eliminate the tepid Dodd-Frank Act financial-industry reforms, it would seem TISA’s provisions to dismantle financial regulation globally would not be a problem at all.

But that these talks are not progressing at the present time does not mean the world can relax. It took years of cross-border organizing and popular education to stop the TPP, and this effort will have to replicated if TISA is to be halted.

The details are the devils already known

Commentary accompanying Bilaterals.org’s publication of several TISA chapters stresses that the Trans-Pacific Partnership, despite its apparent defeat, is nonetheless being used as the model for the Trade In Services Agreement. Thus we are at risk of the TPP becoming the “new norm”:

“Several proposed texts from the failed Trans-Pacific Partnership (TPP) agreement have been transferred to TiSA — including state-owned enterprises; rights to hold data offshore (including financial data); e-commerce; and prohibitions on performance requirements for foreign investors. While these texts originated with the United States, they appear to be supported by other parties to the TPP, even though those governments were reluctant to agree to them in the TPP and will no longer be bound by that agreement. That suggests the TPP may become the new norm even though it has only been ratified in two of the 12 countries, and that was done on the basis of U.S. participation that no longer applies. TPP cannot be allowed to become the new ‘default’ position for these flawed agreements.”

Some of the most extreme measures have been dropped (at least for now) and much of the text is not agreed. Nonetheless, there is nothing to cheer about, Bilaterals.org reports.

“The effectiveness of opposition to TiSA has led governments to conclude that they cannot sell some of the more extreme proposals, which have thus been dropped from previous leaked texts. But the fetters on the rights and responsibilities of governments to regulate in the interests of their citizens from what remains would still go further than any single other agreement. There are no improvements on the inadequate protections for health, environment, privacy, workers, human rights, or economic development. And there is nothing to prevent developing countries becoming even more vulnerable and dependent in an already unequal and unfair global economy.”

Hypocritically, TISA would prohibit developing countries from adopting measures that countries like the United States used to facilitate its industrial development when it was an emerging country in the 19th century. In an analysis for WikiLeaks, Sanya Reid Smith of the Third World Network, an international coalition specializing in development issues, wrote:

“[T]he proposals in this text restrict the ability of developing countries to use the development paths taken by many of the developed TISA countries. Some experts call this developed countries ‘kicking away the ladder’ after they have climbed up, to prevent developing countries from developing the same way. … In TISA, the USA is proposing restrictions on host countries being able to require senior managers be citizens of the host country. Yet when it was a capital importer, the USA had the opposite law: its 1885 contract labour law prohibited the import of foreign workers, i.e. the USA required senior managers (and all other staff) be Americans, which increased the chances of skills being passed to locals.”

Letting banks decide what’s good for you

These proposals are more extreme than language in existing bilateral trade agreements. Many of TISA’s provisions are lifted from TPP, but some go beyond the latter’s already extreme proposals For example, not even the TPP contemplated the entire elimination of regulations of any kind against the financial industry. Article 14 of TISA’s annex on financial services, which had contained the most explicit language prohibiting regulation, has been removed, but Article 9 still contains language requiring no limitations beyond those applying to domestic financial firms. In other words, a smaller country would be required to allow a giant bank from a bigger country to take over its entire banking system.

Incredibly, regulations against financial derivatives yet to be invented would be illegal. A Public Citizen analysis states:

“TISA would require governments to allow any new financial products and services — including ones not yet invented — to be sold within their territories. The TISA Annex on Financial Services clearly states that TISA governments ‘shall permit’ foreign-owned firms to introduce any new financial product or service, so long as it does not require a new law or a change to an existing law.”

As another example, the financial-services annex (in article 21) would require that any government that offers financial products through its postal service lessen the quality of its products so that those are no better than what private corporations offer. Article 1 of the financial-services annex states that “activities forming part of a statutory system of social security or public retirement plans” are specifically covered by TISA, as are “activities conducted by a central bank or monetary authority or by any other public entity in pursuit of monetary or exchange-rate policies.”

That social security or other public retirement systems are covered is cause for much alarm because they could be judged to be “illegally competing” with private financial enterprises. It is conceivable that central banks could be constrained from actions intended to shore up economies during a future financial crisis if banks decide such measures “constrain” their massive profiteering off the crisis.

The countries negotiating TISA.

The countries negotiating TISA.

Article 10 of the annex continues to explicitly ban restrictions on the transfer of information in “electronic or other form” of any “financial service supplier.” In other words, EU laws guarding privacy that stop U.S.-based Internet companies from taking data outside the EU to circumvent those privacy laws would be null and void. Laws instituting privacy protections would be verboten before they could be enacted. These rules, if enacted, could also provide a boon to companies like Uber whose modus operandi is to circumvent local laws. The Bilaterals.org analysis accompanying the leaks notes:

“The main thrust of TiSA comes through the e-commerce, telecommunications, financial services and localisation rules and countries’ commitments to allow unfettered cross-border supply of services. Together they would empower the global platforms who hold big data, like Google, without effective privacy protections, and tech companies like Uber, who have become notorious for evading national regulation, paying minimal tax and exploiting so-called self-employed workers. Given the backlash against global deals for global corporations TiSA will simply add fuel to the bonfire.”

Who interprets the rule is crucial

The language of TISA, like all “free trade” agreements, is dry and legalistic. How these rules are interpreted is what ultimately matters. TISA contains standard language requiring arbitration by judges possessing “requisite knowledge”; that language means that the usual lineup of corporate lawyers who represent corporations in these tribunals will switch hats to sit in judgment. The tribunals used to settle these “investor-state disputes” are held in secret with no accountability and no appeal.

The intention of “free trade” agreements is to elevate corporations to the level of governments. In reality, they raise corporations above the level of governments because only “investors” can sue; governments and people can’t. “Investors” can sue governments to overturn any law or regulation that they claim will hurt profits or even potential future profits. On top of this, a government ordinarily has to pay millions of dollars in costs even in the rare instances when they win one of these cases.

Each “free trade” agreement has a key provision elevating corporations above governments that codifies the “equal treatment” of business interests in accordance with international law and enables corporations to sue over any regulation or other government act that violates “investor rights,” which means any regulation or law that might prevent the corporation from extracting the maximum possible profit. Under these provisions, taxation and regulation constitute “indirect expropriation” mandating compensation — a reduction in the value of an asset is sufficient to establish expropriation rather than a physical taking of property as required under customary law. Tribunal decisions become precedents for further expansions of investor “rights” and thus constitute the “evolving standard of investor rights” required under “free trade” agreements. TISA contains the usual passages requiring “equal treatment.”

At bottom, “free trade” deals have little to do with trade and much to do with imposing corporate wish lists through undemocratic means, including the elimination of any meaningful regulations for labor, safety, health or the environment. TISA is another route to imposing more of this agenda. And the TPP itself isn’t necessarily dead — both Chile and New Zealand are holding discussions with other TPP countries to salvage some of the deal. Chile has invited TPP countries, plus China, to a March summit and the New Zealand trade minister is visiting Australia, Japan, Mexico and Singapore.

Working people around the world scored a major victory in stopping the TPP, at least in its current form. The activists who achieved this deserve much credit. But there is far more to do. Capital never rests; nor can we. Here we have class warfare in naked fashion, and there is no doubt on which side the capitalist world’s governments lie.

Wall Street bigger and badder than ever

Being a banker means never having to say sorry. Or worry where that next million is going to come from.

Financial results are in for 2016 for the biggest U.S. banks and — surprise! — profits continue to reach the stratosphere. And with Goldman Sachs in firmer control of the U.S. Treasury Department than ever before, the good times will continue to roll for Wall Street. For the rest of us, that’s another story.

No less than six “Government Sachs” executives have been nominated to high-level posts in the new Trump administration. As a candidate, Donald Trump attacked opponents for their ties to Goldman Sachs during the campaign, but the joke is on those who naïvely believed the real estate mogul was going to “drain the swamp.” Heading the list is the treasury secretary nominee, Steve Mnuchin, who spent years at Goldman Sachs before earning the title “foreclosure king” as chairman and chief executive officer of OneWest Bank.

Occupy Wall Street (photo by David Shankbone)

Occupy Wall Street (photo by David Shankbone)

Mr. Mnuchin, who bought distressed mortgages and evicted thousands of homeowners during the financial crisis, further demonstrated his humanitarian streak when he announced that, as treasury secretary, he would oversee “the largest tax change since Reagan” and said his “No 1 priority is tax reform.” More tax cuts for the wealthy and corporations. Hurray! How many more people would pay for this by losing their ability to keep their homes was not indicated.

The Guardian, however, did report that “Mnuchin went on to sell OneWest last year for more than double what he paid the Federal Deposit Insurance Corporation for the assets in the teeth of the financial crisis.” The California Reinvestment Coalition has calculated that Mr. Mnuchin’s bank was responsible for more than 36,000 foreclosures in in that state alone, and reported he disproportionally foreclosed on seniors. It did so frequently using harassment and other aggressive tactics, even to the point of changing the locks on a senior’s home in a blizzard.

Vampire squid” indeed. Those are the sort of tactics that surely endeared Mr. Mnuchin to President Trump.

Citigroup hopes to replicate destruction of Detroit

No roundup of the year in banking, however, would be complete without the wit and wisdom of JPMorgan Chief Executive Officer Jamie Dimon. When we last checked in a year ago, Mr. Dimon insisted that declining incomes for working people was no big deal, because they are better off by virtue of possessing iPhones, while in 2014 he complained that — oh the humanity! — “banks are under assault.” As we look back at 2016, he has again provided us with comic relief.

Somehow keeping himself composed as he told Bloomberg News that “business [has] been beaten down as if we’re terrible people,” he upheld the work of banks in saving Detroit. You can’t make this up: He said, “Detroit is a perfect example where civil society, not-for-profits, government, business all work together to improve the lives of American citizens. If you can duplicate what they’ve done in Detroit around the country, you’re going to have a huge renaissance.” He finished by declaring “JPMorgan didn’t jeopardize the system. We did not cause the crisis. We have three times more capital than we had back then. We saved 30,000 jobs.”

Goldman Sachs headquarters (photo by Quantumquark)

Goldman Sachs headquarters (photo by Quantumquark)

We’ll pause here so you can enjoy a hearty laugh. There is no need to point out the tremendous damage major banks did to economies around the world, and the trillions of dollars of handouts given to them as a reward for their destructive behavior. There is little need to point out the damage done to Detroit, but as a reminder, complex and poorly understood derivatives were decisive in Detroit’s fiscal downfall.

These derivatives were sold to the city as a form of “insurance” against possible increases in interest rates, but when interest rates fell and Detroit’s credit rating was cut, hundreds of millions were siphoned from city coffers into Wall Street pockets, and the banks that sold the derivatives jumped to the head of the line of creditors. No money for pensions or government services, but plenty for financiers.

Mr. Dimon does seem to be rather well compensated for his difficulties, “earning” $27.6 million for 2015, tops among banking chief executive officers. Goldman Sachs’ Lloyd Blankfein didn’t do too badly himself, hauling in $23.4 million in compensation. Another nine topped $10 million.

Bigger and badder than ever

These bloated salaries did not, so to speak, break the banks. Once again, profits for the six biggest U.S. banks were massive — nearly $93 billion for 2016.

Here’s a breakdown of the six banks for 2016, three of which reported record profits.

  • JPMorgan Chase & Company reported net income of $24.7 billion on revenue of $99.1 billion, the bank’s highest-ever profit, beating out the record set just the year before. These massive profits led to a massive bonanza for speculators — JPMorgan handed out $15 billion in dividends and stock buybacks.
  • Bank of America Corporation racked up $17.9 billion in net income on revenue of $83.7 billion, both increases from a year ago, which, in turn had tripled 2014 earnings. Speculators did well here, too, as Bank of America ladled out $7.7 billion in dividends and stock buybacks, and plans on buying back another $4.3 billion of its stock in the first six months of 2017.
  • Citigroup Incorporated reported net income of $14.9 billion on revenues of $69.9 billion, both a little bit lower than a year earlier. But shed no tear for downtrodden speculators as Citigroup handed out $10.7 billion in dividends and stock buybacks. Five separate violations cost a total of $485 million in government penalties, but that seems to be no more than a minor speed bump.
  • Wells Fargo & Company had net income of $21.8 billion on revenue of $88.3 billion, a dip in profits from 2015 due to having to pay a penalty of $1.2 billion for shady mortgage lending practices and another $185 million in fines because of its illegal practices of opening fake accounts in the name of its depositors. Who says crime doesn’t pay? Speculators certainly won’t say that: Siphoning money from its account holders helped Wells Fargo be in a position to shovel $12.5 billion into financiers’ pockets through dividends and stock buybacks, almost equal to what it handed out a year earlier.
  • The Goldman Sachs Group Incorporated reported net income of $7.4 billion on revenue of $30.6 billion, a bigger profit and profit margin that a year earlier. The company did not break out its expenses for its purchases of the U.S. government in its latest financial report. Goldman Sachs spent $7 billion on buying back its stock and proudly declared itself first in the world in mergers and acquisitions, work that added billions to the investment bank’s bottom line while costing untold numbers of people their jobs. Profits would have been even bigger had it not been for a $5.1 billion fine for selling toxic mortgage securities to unsuspecting investors.
  • Morgan Stanley reported net income of $6.0 billion on revenue of $34.6 billion, a profit about two percent lower than that of 2015. Despite that slight dip in income, the bank somehow found the means to buy back $3.5 billion worth of its stock — a 67 percent increase from what it bought back a year ago. Morgan Stanley would have seen its profits increase for 2016 had it not had to pay $3.2 billion in penalties related to its role in the subprime-mortgage housing debacle.

Beyond the whip of Wall Street

The biggest banks not only extract more money from the rest of the economy than ever, but are bigger than ever — banks with more than $100 billion assets increased their market share from 17 percent in 1995 to 59 percent in 2014. This is the mad logic of capitalism — grow or die. Finance capital, despite being the whip enforcing trends that worsen inequality, is not immune from what it enforces on everyone else. One measure of the cancerous growth of financial products bearing little relationship with actual needs is this: In 11 business days financial speculators trade instruments and contracts valued at more than all the products and services produced by the entire world in one year.

Reducing banking and finance to a public utility would be the only way to break the grip of giant banks and financial institutions. One intermediate step that could be taken would be government banks that would fund public infrastructure projects and provide low-cost loans, and which would be the recipient of government revenue rather than commercial banks.

The Bank of North Dakota is an example of such an institution that already exists, with proposals for state banks being floated for Vermont, Washington state, Oregon and California. A New Jersey gubernatorial candidate, Phil Murphy, has made a public state bank the centerpiece of his campaign, arguing that students would benefit from low interest rates for college tuition, more loan capital would be made available and municipal governments would no longer have to pay high interest to Wall Street.

The Left Party of Germany has a detailed plan to bring banks under democratic control. Although the party’s proposal is specific to Germany, its basic ideas are transferable to any country. Any form of democratic control of an economy would be impossible without banking and finance being reduced to a public utility, and thus serving to benefit communities rather than existing as a parasite that exists to profit over every aspect of human activity, no matter the social cost.

Eight people own as much as half the world

Just when it seemed we might be running out of superlatives to demonstrate the monstrous inequality of today’s capitalism, Oxfam has provided the most dramatic example yet: Eight individuals, all men, possess as much wealth as the poorest 50 percent of humanity.

Eight people have as much as 3.7 billion people.

How could this be? Oxfam calculated that 85 people had as much wealth as the poorest half of humanity in 2014, a staggering finding that researchers with the anti-poverty organization discovered through crunching numbers provided by Forbes magazine in its rich list and by the investment bank Credit Suisse in its global wealth distribution report. Oxfam found wealth distribution to be even more unequal than did Credit Suisse, which calculated that the top one percent equaled the bottom 50 percent. Oxfam, in its report, “An Economy for the 99%,” released this month, explains:

“This year we find that the wealth of the bottom 50% of the global population was lower than previously estimated, and it takes just eight individuals to equal their total wealth holdings. Every year, Credit Suisse acquires new and better data sources with which to estimate the global wealth distribution: its latest report shows both that there is more debt in the very poorest group and fewer assets in the 30–50% percentiles of the global population. Last year it was estimated that the cumulative share of wealth of the poorest 50% was 0.7%; this year it is 0.2%.” [page 11]

 

The "wealth pyramid" as calculated by Credit Suisse. Oxfam's findings are that even this is an under-estimation of inequality.

The “wealth pyramid” as calculated by Credit Suisse. Oxfam’s findings are that even this is an under-estimation of inequality.

Because Oxfam includes among the bottom 50 percent people in the advanced capitalist countries of the Global North who have a net worth of less than zero due to debt, some critics might argue that these people are nonetheless “income-rich” because they have credit available to them and thus distort the inequality outcome. Oxfam, however, says that almost three-quarters of those among the bottom 50 percent live in low-income countries, and excluding those from the North with negative wealth would make little difference in aggregate inequality. That total debt is equal to only 0.4 percent of overall global wealth. The Oxfam report says:

“At the very top, this year’s data finds that collectively the richest eight individuals have a net wealth of $426 bn, which is the same as the net wealth of the bottom half of humanity. …  [E]stimates from Credit Suisse find that collectively the poorest 50% of people have less than a quarter of 1% of global net wealth. Nine percent of the people in this group have negative wealth, and most of these people live in richer countries where student debt and other credit facilities are available. But even if we discount the debts of people living in Europe and North America, the total wealth of the bottom 50% is still less than 1%.” [page 10]

Profiting from cheap labor and forced labor

We are accustomed to hearing that chief executive officers in U.S.-based corporations earn hundreds of times more than their average employee, but this dynamic can be found in the developing world as well. No matter where the CEO lives, brutal and relenting exploitation of working people is the motor force of inequality. Oxfam reports:

“The CEO of India’s top information firm earns 416 times the salary of a typical employee in his company. In the 1980s, cocoa farmers received 18% of the value of a chocolate bar — today they get just 6%. In extreme cases, forced labour or slavery can be used to keep corporate costs down. The International Labour Organization estimates that 21 million people are forced labourers, generating an estimated $150 bn in profits each year. The world’s largest garment companies have all been linked to cotton-spinning mills in India, which routinely use the forced labour of girls.” [page 3]

appleoxfam-graphicPeople become sweatshop workers out of desperation; often these are men and women driven off the land their families had farmed for generations. Land, even small plots that provide only subsistence for those who work it, represents wealth taken away when those subsistence farmers are forced into migrating into urban slums. Displacement from global warming is also a factor.

“[M]any people experiencing poverty around the world are seeing an erosion of their main source of wealth — namely land, natural resources and homes — as a consequence of insecure land rights, land grabbing, land fragmentation and erosion, climate change, urban eviction and forced displacement. While total farmland has increased globally, small family farms operate a declining share of this land. Ownership of land among the poorest wealth quintile fell by 7.3% between the 1990s and 2000s. Change in land ownership in developing countries is commonly driven by large-scale acquisitions, which see the transfer of land from small-scale farmers to large investors and the conversion of land from subsistence to commercial use. Up to 59% of land deals cover communal lands claimed by indigenous peoples and small communities, which translates to the potential displacement of millions of people. Yet only 14% of deals have involved a proper process to obtain ‘free prior and informed consent.’ Distribution of land is most unequal in Latin America, where 64% of the total wealth is related to non-financial assets like land and housing and 1% of ‘super farms’ in Latin America now control more productive land than the other 99%.” [page 10]

As entire areas of the world like Latin America have been plundered for the benefit of multi-national corporations based in the Global North, with those benefits flowing to the executives and financiers who control those corporations, it is no surprise that most of the wealth remains concentrated in the advanced capitalist countries. Although steering well clear of so much as a hint of the imperial nature of uneven development, the Credit Suisse report that Oxfam drew upon does note that North America and Europe together account for 65% of total household wealth with only 18% of the world’s adult population.

The sociologist James Petras estimates that the corporations and banks of the North took US$950 billion of wealth out of Latin America for the period 1975 to 2005. Thus it is no surprise that global inequality, when measured by the standard statistical measure of income distribution, the gini coefficient, is greater than inequality in any single country.

More programs on the way to make inequality still worse

Few countries of the Global North are more unequal than the United States, the imperial center of the world capitalist system that seeks to impose its ways and culture on the rest of the world. The new Trump administration is determined to make U.S. inequality even more extreme. Not only through intentions of cutting taxes on the wealthy and corporations, but via many less obvious routes.

For example, the Center on Budget and Policy Priorities reports that the repeal of Barack Obama’s Affordable Care Act, a process already in motion, would result in tax cuts of $2.8 billion per year for the country’s 400 highest-income taxpayers. Special Medicare taxes that fund subsidies for low-income United Statesians to buy insurance under the act are assessed only on those with annual incomes higher than $200,000. Conversely, the loss of tax credits to buy health insurance would lead to a tax increase for about seven million low- and moderate-income families.

Through the end of 2016, the central banks of Britain, the European Union, Japan and the United States have shoveled a colossal total of US$8 trillion (€7.4 trillion) into their “quantitative easing” programs — that is, programs that buy government bonds and other debt in an effort to boost the economy but in reality does little other than fuel stock-market bubbles and, secondarily, real estate bubbles. Vast rebuilding of crumbling infrastructure — a program that would actually put people to work — would have cost less.

CEO-to-worker ratioStandard economic ideology insists that the real problem is that wages have not fallen enough! Consistent with that, the Federal Reserve released a paper in 2015 claiming that “rigidities” “prevent businesses from reducing wages as much as they would like” during economic downturns.

Oh yes, falling wages instead of stagnant wages will bring happy times! Never mind that productivity has soared over the past four decades, while wages have consistently not kept pace. The average Canadian and U.S. household would earn hundreds of dollars per week more if wages had kept up with rising productivity, while wages in Britain and many other countries are also lagging.

What to do? The Oxfam report, in its conclusions, advocates a switch to a “human economy,” one in which governments are “accountable to the 99%,” businesses would be oriented toward policies that “increase prosperity for all,” and sustainability and equality would be paramount.

“Oxfam firmly believes humanity can do better,” its report concludes. Surely we can do better. But not under capitalism. Does anyone believe that the world’s elites, who profit so enormously and believe they can build a wall high enough to keep the world’s environmental and social problems away, are going to suddenly accept business as usual can no longer go on and willingly give up their enormous privileges?

Economic issues are not separate from “identity” issues

Building the largest possible movement to not only tackle the immense, and intensifying, problems facing humanity and the environment but to overcome these problems is our urgent task. Given the position the Left finds itself in today, serious discussions inevitably include a variety of perspectives, and that is healthy.

But sometimes these discussions can veer too far into an “either/or” dynamic. These debates center on who should be the subject(s) of a mass movement that can begin to reverse the European and North American slide toward the right, a direction that, at least for now, appears to be sweeping across Latin America as well. In the United States, following the shock election of Donald Trump, an “either/or” debate has taken shape in the form of “identity politics” versus “class politics.” But do we really have to pick a side here?

An example of an activist arguing that there has been too much focus in the U.S. on “identity politics,” Bruce Lerro, writing for the Planning Beyond Capitalism web site, argues that both the Democratic Party and the Left ignored working class concerns, catastrophically leaving an opening for a right-wing demagogue like President-elect Trump to fill a vacuum. Critical of what he calls a capitulation to “long-standing liberal ideology [that] all ethnicities and genders will be able to compete for a piece of the capitalist pie,” Professor Lerro writes:

“Calling people into the streets on the basis of attacks on ethnic minorities or anti-Islamic remarks alone ignores the results of the election. It reveals the left’s inadequacy in having next to no influence over all the working class people who voted for Trump as well as the 47% of the people who didn’t bother to vote at all. It continues the same 45 year history of identity politics which has failed to make things better for its constituents, except for all upper middle class minorities and women in law and university professors who benefit most from identity politics and who moralistically preside over politically correct vocabulary.”

It is true that liberal ideology tends to fight for the ability of minorities and women to be able to obtain elite jobs as ends to themselves rather than orient toward a larger struggle against systemic inequality and oppression. Leaving capitalism untouched leaves behind all but a handful of people who ascend to elite jobs. Barack Obama’s eight years as U.S. president didn’t end racism, did it? Nor would have a successful Hillary Clinton campaign have brought an end to sexism. A movement serious about change fights structural discrimination; it doesn’t fight for a few individuals to have a career.

Black Lives Matter takes the streets of New York City

Black Lives Matter takes the streets of New York City

But to say this is not to deny that racism, sexism and other social ills have to be fought head-on. So even a focus on class issues does not mean ignoring these issues, Professor Lerro writes:

“In criticizing identity politics I am not proposing that race and gender issues should not be discussed or that they don’t matter. My criticism of identity politics is that it has historically excluded social class. From an anti-capitalist and socialist perspective, race and gender are most importantly discussed at the location where capitalists produce surplus labor — on the job. So where there is white privilege over wages or the quality of jobs offered, this issue should be discussed openly by workers in and out of a union setting. At the same time, when we are organizing against capitalism and developing a socialist political practice, race and gender issues as they affect socialist organizing, need to be confronted. But the further away discussions of race and gender get from social class, the workplace and efforts to organize against capitalism and for socialism, the more they becomes discussions for liberals — not socialists.”

Racism and sexism in our own movements

Racism and sexism, however, are found outside the workplace, and have not been eradicated from social struggles. Certainly there can not be any going back to the open sexism of 1960s movements. There was a prominent demonstration of that era in which no women were invited to speak, and a group of women in response confronted men organizing the event about this, insisting that their demands be included. In response, one of the men told them that there was already a women’s resolution, which was simply a general plea for peace. Demanding that issues specific to women’s oppression be included, the male activist not only refused further discussion, but actually patted Shulamith Firestone, soon to be the author of The Dialectic of Sex, on the head!

Such degrading behavior would not be tolerated in a Left movement today, but it can hardly be argued that sexism (or racism) has been overcome once and for all in Left movements, never mind in larger society. The days when a Left movement can tell a member of an oppressed group to “wait your turn, it’ll all be better after we have the revolution,” really should be behind us.

Even after a revolution, these issues have to be worked on. Women, for example, made serious advances in the 20th century’s socialist revolutions but never sufficient advances, and there was often backsliding. The Sandinistas banned the display of women’s bodies in commercial advertising after coming to power in Nicaragua, but near the end of their first 11 years in power sponsored a beauty contest, nor did they legalize abortion. No woman sat on the Sandinistas’ highest body, the nine-member National Directorate, during those 11 years despite their fighting in large numbers, and even commanding, during the hard struggle against the Somoza dictatorship. No woman ever sat on the Politburo during the Soviet Union’s 74-year history.

Working people are oppressed, but not all to the same degree

The world’s advanced capitalist countries are far from a revolution, so all the more is it necessary to seriously make structural discrimination a component part of Left struggles, without forgetting the class dimension any such struggle must contain. In a typically thoughtful article in CounterPunch, Henry Giroux, while not losing sight of class issues, and the overall repression of working people under neoliberal regimes, refused to downplay the extra repression that rains down on minority communities. He wrote:

“Large segments of the American public, especially minorities of class and color, have been written out of politics over what they view as a failed state and the inability of the basic machinery of government to serve their interests. As market mentalities and moralities tighten their grip on all aspects of society, democratic institutions and public spheres are being downsized, if not altogether disappearing.

As these institutions vanish—from public schools to health care centers– there is also a serious erosion of the discourses of community, justice, equality, public values, and the common good. With the election of Donald Trump, the savagery of neoliberalism has been intensified with the emergence at the highest levels of power of a toxic mix of anti-intellectualism, religious fundamentalism, nativism, and a renewed notion of American exceptionalism.”

Professor Giroux argues against a focus on what he calls “single-issue movements” but not in the sense of dismissing liberation movements based on specific oppressions, but rather argues for a joining together of struggles through drawing the connections among various social movements. He writes:

“Central to viable notion of ideological and structural transformation is a refusal of the mainstream politics of disconnect. In its place is a plea for broader social movements and a more comprehensive understanding of politics in order to connect the dots between, for instance, police brutality and mass incarceration, on the one hand, and the diverse crises producing massive poverty, the destruction of the welfare state, and the assaults on the environment, workers, young people and women. …

Crucial to rethinking the space and meaning of the political imaginary is the need to reach across specific identities and to move beyond around single-issue movements and their specific agendas. This is not a matter of dismissing such movements, but creating new alliances that allow them to become stronger in the fight to not only succeed in advancing their specific concerns but also enlarging the possibility of developing a radical democracy that benefits not just specific but general interests.”

Economic issues aren’t separate from other issues

All working people are exploited under capitalism. It would be the height of folly to sideline this fundamental commonality. But the levels of exploitation, and the intensity of direct oppression, varies widely and it would be folly to ignore this as well. Those subject to higher (often far higher) levels of discrimination have every right to focus on their own emancipation, and those in more privileged positions have an obligation to support those emancipations. Further, the perpetuation of class oppression central to capitalism depends on deep divisions within the working class, not only in terms of setting different groups at each other’s throats but in providing relatively better pay and conditions to some so that the more privileged set themselves apart from the less privileged, reinforcing hierarchies that maintain divisions among working peoples.

Therefore it is self-defeating to attempt to downplay racial, sexual and other divisions in an effort to “concentrate” on economic issues, as if these are somehow separate from other issues. In a very thoughtful essay dealing with the roles of non-governmental organizations (NGOs) in dampening activism and propping up the system they purport to critique, Sophia Burns goes on to argue that no fight against capitalist exploitation can succeed without women and People of Color playing central roles. If they are playing central roles, then the fight for their specific emancipations is central to the struggle.

Her discussion merits being quoted at length. Writing in The North Star, she argues:

“There’s an implicit notion that members of more privileged groups (men, whites, straights, etc) do not meaningfully stand to benefit from doing away with racism, sexism, etc. That underlies the moralistic connotations of ‘allyship’ — you support struggles in which you yourself have no personal stake, because that’s what an ethical person would do. Now, if you’re middle-class, that assumption is basically true. You aren’t part of the ruling class, but you have a degree of security, comfort, and control over your life. If you’re middle-class and white male, then pro-male or pro-white inequalities are pretty unambiguously good for you. So, the only reason you’d oppose them would have to be ethics, not self-interest.

But the working class has neither power nor security under capitalism. The fact that different parts of the working class are treated comparatively better or worse along racial, gender, etc lines does not change the fact that the whole class is exploited, oppressed, and ultimately powerless. However, white workers, male workers, and straight workers could not possibly defeat the ruling class alone. After all, it’s the middle class that is disproportionately white, male, etc — the working class has more people of color, women, and social minorities in general than other classes do. White men are only around 1/3 of the total US population, and an even smaller portion of the working class. So, because racism, sexism, etc exist within the class system and (combined together) directly oppress the large bulk of the working class, no working-class politics that rejects or ignores them has the ability to succeed. They’re components of the operation of the class system in practice, serving both to allow extra-high exploitation of female and non-white workers and to undercut the political potential of the class as a whole, which deepens all workers’ exploitation.

Racism and sexism are components of capitalism, and all ‘capitalism’ means is the exploitation by business owners of everyone else. So, when a white male worker understands capitalism as a class system that exploits the class of which he is part, it’s only through externally-imposed propaganda that he’s convinced that he has no stake in getting rid of racism and sexism. Economics is not a separate issue floating alongside others. Nothing that exists in capitalism is outside of capitalism.”

From the standpoint of the relationship to the means of production, white-collar middle class employees, as commonly defined, are of the same class as a blue-collar assembly-line laborer. Both are exploited economically in the same way, being paid a small fraction of the value of they produce. Nonetheless, it is indisputable that such middle-class workers (even if more properly understood as a strata within a working class that includes the vast majority of humanity) are privileged compared to other workers, and that their composition will be more heavily weighted toward dominant racial, ethnic or other groups in a given capitalist society, with the nastier and lower-paid jobs disproportionally held by disadvantaged groups.

Struggles against chauvinism are not an adjunct

The pervasive propaganda that denies that capitalism is exploitative or even refuses to acknowledge the different opportunities among different groups “is not a class-free worldview, but rather a worldview that’s natural for the middle class and that gets promoted because it serves the ruling class,” Ms. Burns writes. Thus, she argues, a false opposition is created between economics and other issues.

“Of course, because sexist and racist ideas receive the massive institutional sponsorship they do, working-class whites do have deep-seated racist notions and working-class men are often profoundly chauvinistic. The struggle against such beliefs and practices, even (in fact, especially) when they manifest within the working class, is not an adjunct to class struggle. It’s a central and necessary part of it. But when activist nonprofits and their supporters use an exaggerated account of working-class bigotry to dismiss working-class politics and a class struggle worldview entirely, they aren’t benevolently defending the marginalized. They are playing a useful role for the system that brings bigotry and privilege into being.

Neighborhood and workplace organizing, inside the working class and outside of the activist subculture, must include breaking down racism and sexism, within the class and everywhere else. But the self-interest of each part of a class is in the ultimate self-interest of the entire class. Even white male workers have a material stake in abolishing white and male privilege, despite the fact that it’s a long-term interest that isn’t acknowledged by mainstream ideas. Middle-class white men, of course, do not have that same stake. If a socialist movement is healthy, it’s not a middle-class affair.”

Let’s take this discussion a step further. Should we even use the term “identity politics”? Susan Cox, speaking on the Joy of Resistance: Multicultural Feminist Radio program on December 4, argued that being female is not an identity but rather is a material reality, and one of the most foundational realities that define the world’s social organization. She pointed out that women’s unpaid domestic labor props up the entire capitalist economic system. Defining feminism as a movement with a goal of global resistance wrenches it from the idea that it is an individualistic, lifestyle choice.

Further discussing this issue in an article in Feminist Current, Ms. Cox wrote:

“One would think being half of the damn population would make us more than some minor, divisive concern.

Women’s issues have been labelled “identity politics” for decades in order to belittle the feminist cause as politically unsubstantial/unimportant. In fact, the term first became prominent in American academia during its anti-Marxist ’80s in order to describe women as a fragmented group of individuals, rather than a class of persons with common class interests.”

It is reasonable to dispute the use of the term “class” in this context, but it should be indisputable that women face a particular oppression, one that although predating capitalism has long been an essential prop for maintaining capitalism. Racism is also necessary to maintain capitalism, and thus fighting it can never be an adjunct to a broad struggle for a better world.

Dismissing all those who voted for Donald Trump as bigots, “deplorables” or ignorant is not only simplistic and mistaken, it is bad practice. Some who voted for him can be described in such terms, but plenty voted for him, however mistakenly, out of a belief that he would bring back their jobs and because he represented, in their minds, “change.” Some Trump voters previously voted for Barack Obama — such folks can hardly be described as racists. Similarly, in France, many now supporting the National Front formerly supported the Socialist Party or the Communist Party. The United Kingdom Independence Party, however ridiculous we might find its name, is peeling off supporters from Labour.

Again, those trends do not mean there is no racism in such movements; that plenty of such exists is obvious. But economic insecurity is driving the rise of far right movements on more than one continent. Establishment politics has failed working people, and working people, including those without higher education, know it. They live it. At the same time, the far right movements that are gaining support among working people tap into the racism, nationalism, sexism and anti-Semitism that both exists within working classes (reflecting the whole of society) and is an inculcated weapon of division launched by elites who have every interest in our not uniting.

To “choose” between class politics and identity politics is a false choice. We are defeating ourselves if we decide to separate interrelated struggles and then debate which is the “proper” one. A multitude of tactics are just as necessary as fighting on multiple fronts, taking on the multiplicity of interconnected issues.