Is 20th century social democracy really the best we can do?

Predictions are difficult to make, especially, as the old joke goes, when they are about the future. Particularly fraught have been predictions of the demise of capitalism. Conventional wisdom would have us believe that because capitalism remains the world’s dominant economic system, predictions of the system’s demise are not only wrong, but destined to be wrong in the future.

“Conventional wisdom” here, of course, is nothing more than a display of the axiom that the intellectual ideas of a society are those of the dominant class. Certainly, both industrialists and financiers would like us to believe that nothing fundamental can change. Bourgeois ideology proclaims that through every possible channel every day.

Yet what is of human creation is not permanent; everything of human creation has an expiration date. Capitalism will be no different.

When will capitalism be transcended and what will follow? That central question has been asked for two centuries and, given the increasing intensity of economic crises, mounting inequality and looming environmental catastrophe, is as important as ever. The unending series of protests, uprisings and movements dedicated to either forcing systemic reform or outright replacement are eloquent testament to how capitalism fails most of the world’s population.

Night view of the Gate of Enlightenment in Madrid (photo by Luis García (Zaqarbal))

Nonetheless, there is no arguing that capitalism remains firmly in the saddle, with no existing social movement anywhere near strong enough today to put the system at risk. Does that mean we should regard past predictions of capitalism’s demise as mistaken or wishful thinking? Perhaps only an ambiguous answer, at least preliminary, is appropriate. For those who wish to see capitalism continue indefinitely — those who benefit and those so frightened by propaganda that anything else is literally unimaginable — there is an easy answer: Yes. For those who wish for a better world, an economic system based on human need and in harmony with the environment, the answer is no. 

Whether yes, no, maybe or let’s wait and see, an examination of why predictions of capitalism’s demise are thus far off the mark is a healthy exercise. I thus was interested in a new book wrestling with these issues, Foretelling the End of Capitalism: Intellectual Misadventures since Karl Marx by Francesco Boldizzoni. Foretelling is a curious hybrid as the author is quite critical of capitalism but also has a pessimistic outlook regarding its replacement; it is rare for a book to receive praise from a Wall Street Journal reviewer and New Left Review contributor Wolfgang Streeck. Foretelling provides a strong challenge to the thinking of critics of capitalism and those who subscribe to leading theories, particularly Marxist, of the end of capitalism.

Such a challenge is healthy, and those who are interested in a basic history of economic thought for the past 200 years would do well with this book. Whether it succeeds in its core intention, however, is a separate matter, although any conclusions will partly depend on a reader’s perspective. 

Capitalism will end, as do all products of history

We get a good sense of Professor Boldizzoni’s perspective in his introduction, where he writes that capitalism will end, or slowly turn into something new, like all products of history, although there is no guarantee it will be something better. The brutality of prior systems lives on in capitalism. The slow growth rates of a more service-oriented economy has led to more “distributional conflicts,” and the Left must find effective tools to deal with it or the “populist right” will take its place. To all but capitalism’s more fervent apologists, this can hardly be considered controversial. But we also read here a foreshadowing of pessimism with a passage declaring “this battle to ‘overthrow the system’ is lost from the start” — believing it raises false hopes and thus “does not do progressivism any service.”

Capitalism isn’t going anywhere in the near future and past predictions have not been borne out, so a hard look, if we are intellectually honest, is warranted. It is healthy to have ideas challenged, so let us engage with these ideas.

Before getting to the heart of its argument, the first four of the six chapters of Foretelling the End of Capitalism are a wide-ranging survey of thinkers from the early 19th century to the early 21st, across the full political spectrum. These are not deep excavations but do provide basic understandings. These are mostly solid introductions to the evolution of thinking on the topic of political economy and important theories that have arisen, except for weaknesses with some Marxist writers. For example, a brief discussion of fin de siècle German social democracy — Eduard Bernstein vs. Karl Kautsky vs. Rosa Luxemburg — is shallow; the author only sees the surface of Kautsky’s writings and does not grasp what lies below the surface, nor how to interpret the evolution of Kautsky’s thinking, without which it is impossible to understand why Kautsky would come to draw close to Bernstein, an outcome the book entirely misses.

That is no more than a minor point. More serious is what this reviewer considers among the most bizarre interpretations of fascism he has ever come across. Professor Boldizzoni writes that fascism, or more specifically, Nazism, was “the middle ground between the liberal and Soviet worlds.” He presents the ideas of several writers on fascism, but all but one are hopelessly confused and serve only to obfuscate. Incredibly, there is not one word from Leon Trotsky, the preeminent analyzer of Nazism during the 1930s — an inexcusable omission. Nor is the orthodox communist conception as handed down by Josef Stalin presented. Although that conception was badly mistaken with tragic circumstances, it should have been discussed, given the consequences of that line being put into action.

It is true that fascism is notoriously difficult to diagnose, but if approached from a class standpoint, it becomes understandable. At its most basic level, fascism is a dictatorship established through and maintained with terror on behalf of big business. It is a phenomenon squarely at the far right of the political spectrum; it is not an ersatz “third way” precursor. Fascist movements have a social base, which provides support and the terror squads, but which is badly misled since the fascist dictatorship operates decisively against the interest of its social base, rooted in middle class white-collar professionals and small business owners. (That is still true today; look at the profile of the Trump followers who have been arrested for participating in the January 6 attack on the U.S. capitol building.)

“In National Socialism, everything is as contradictory and as chaotic as in a nightmare,” Trotsky wrote in a vivid 1932 essay, using the intentionally misleading formal name for the Nazis. “Hitler’s party calls itself socialist, yet it leads a terroristic struggle against all socialist organizations. It calls itself a worker’s party, yet its ranks include all classes except the proletariat. It hurls lightning bolts at the heads of capitalists, yet is supported by them. … The whole world has collapsed inside the heads of the petit bourgeoisie, which has completely lost its equilibrium. This class is screaming so clamorously out of despair, fear and bitterness that it is itself deafened and loses sense of its words and gestures.”

Militarism, extreme nationalism, the creation of enemies and scapegoats, and, perhaps the most critical component, a rabid propaganda that intentionally raises panic and hate while disguising its true nature and intentions under the cover of a phony populism, are among the necessary elements. Despite national differences that result in major differences in the appearances of fascism, the class nature is consistent. Big business is invariably the supporter of fascism, no matter what a fascist movement’s rhetoric contains, and is invariably the beneficiary even though its beneficiaries will not directly control the dictatorship; it is a dictatorship for them, not by them. The massive profits pocketed by industrialists in Hitler’s Germany, Mussolini’s Italy, Pinochet’s Chile and elsewhere speak volumes, as do the draconian anti-labor laws implemented. Fascism is capitalism stripped of all democratic veneers.

Are the reasons behind capitalism’s staying power psychological?

Nonetheless, these early chapters are useful for other theorists who are discussed, including John Stuart Mill, Joseph Schumpeter, John Maynard Keynes, Jürgen Habermas and several writers of the late 20th century. The author skillfully dismantles the apologia for capitalism’s inequality offered by publicists masquerading as economists. In the final two chapters, Professor Boldizzoni explicates his core arguments. Here we find no illusions about the nature of capitalism nor misunderstandings of its social relations. Capitalism is a socio-economic system, not a type of economic activity, imposed by force; an “institutionalized social order” in which even human labor is reduced to a commodity. Capitalism is kept together through hierarchy and individualism, upholding new forms of previous master/slave and lord/serf relations.

So why have forecasts of capitalism’s demise been so far off the mark thus far? Or, perhaps, we might better phrase this question as: Why does capitalism persist despite the misery and opposition it continually spawns? Foretelling the End of Capitalism begins to answer this question by offering three factors — “cognitive distortions that affect the forecasting process,” faults in the construction of social theories and, decisively, “the faith in progress that underlies modern thought.” This is further teased out through two mistakes — overgeneralization through drawing overly broad conclusions or magnifying specific events and “black and white thinking,” an example of which is ignoring that there are “many varieties” of capitalism. Seeing the next system only in terms of the negatives of capitalism and, finally, a misunderstanding of culture underlie mistaken forecasts, the book asserts.

All this comes down to “cognitive distortions” and “theoretical flaws,” working together and in conjunction with “a more general mental disposition” common to those who attempt to predict what may happen in the future. “The entire history of social forecasting and its mistakes is intertwined with faith in progress,” Professor Boldizzoni writes. All of his reasons are psychological. There is nothing material!

A garment factory (photo by Fahad Faisal)

This is the reasoning of someone who believes the current world is the only possible world that can be, whether that belief is conscious or hidden in the unconscious. Capitalism has not fallen; therefore those who forecast its eventual end are dreamers outside reality. It is as if there are no material reasons for the continued life of capitalism, some of which have to do with the very pillars of capitalism that the author himself explicates well.

It is certainly possible to draw up a list of theoretical failings far more specific than flawed enlightenment thinking. No single or small group of developments can possibly encompass all the factors that have kept the world economic system in place. I have previously written that no serious discussion of this question, however, should exclude these factors:

  • The early pioneers of the socialist movement seriously underestimated the ability of capitalism as a system to adapt and therefore did not foresee the ability of working people to extract concessions for themselves. 
  • The early pioneers failed to understand the buoying effect that would be provided by imperialism (for the leading capitalist countries). 
  • Many of the early pioneers clung to an overly mechanical (mis)understanding of social development that led to a passive belief in an automatic unfolding of revolution that implied, incorrectly, that powerful capitalists would simply sit back and allow themselves to be overthrown. (Kautsky and Bernstein are emblematic here.)
  • Many leaders during the Soviet era continued to hold to a similar overly mechanical belief in future revolution while at the same time failing to grasp the nuances of capitalist development. 
  • An overly centralized world movement that retarded the theoretical developments needed for local conditions, blocking the creation of innovative leadership while at the same time discouraging existing local leaderships from attempting revolutions. 
  • A too narrow conception of “working class” or “working people” — a tendency to visualize only blue-collar manual workers as working people, a declining percentage of the population in increasingly technological capitalist societies. Such narrow horizons served to exclude a large proportion of wage workers, with the result that movements purporting to be organizations of working people instead divided them at the start. 

I am under no illusion that the above list exhausts the catalogue of factors. Obviously, the ability and willingness of the governments over which capitalists hold decisive sway to use violence to keep industrialists and financiers in power; the ability to disseminate propaganda in a variety of forms through an array of media, schools and institutions; and the willingness to invade, overthrow and impose military violence and sanctions against any country that challenges capitalism’s masters so as to make life there difficult are indispensable factors as to capitalism’s staying power. The last of this paragraph’s factors goes a long way in itself as to why alternatives to capitalism have faltered. 

Every attempt at constructing a post-capitalist economy has been met with overwhelming military, financial and other forms of force, putting them on a war footing. We can not know what might have been created if those countries had been allowed to peacefully develop, and this factor is indispensable if we are to seriously ponder the acceptance of “there is no alternative” propaganda. Despite the acknowledgements of bourgeois culture’s orientation toward wealth accumulation and cultural processes, Foretelling the End of Capitalism offers lectures on the weaknesses of enlightenment thinking rather than analyzing material conditions.

Culture as the glue holding together capitalism

Professor Boldizzoni puts forth the thesis that political, economic and social structures are all held together by “a powerful glue”: culture. Capitalism, he writes, is the product of a particular Western family of cultures, with hierarchy and individualism the most important factors. Behavior standards “change slowly”; it “may take several centuries” for culture to transform. He writes, “The emergence of a new system will be possible when the circumstances under which the old one was formed have eventually ceased to exist. It will reflect the changes in the material circumstances as well as in the culture sphere that are to occur over the next few centuries. The transition, however, will be so gradual that it will be barely noticeable.”

There is plenty to unpack in the preceding paragraph. That culture is a “powerful glue” keeping capitalism is indisputable, and that changes in “material circumstances” will facilitate a transition to a new system is also not in dispute. But these assertions, which certainly would not be controversial to a Marxist, are odd in light of the author’s criticisms of Karl Marx. It is unavoidable to note that those criticisms are rooted in a shallow understanding of Marx’s body of work. The author makes the common mistake of seeing Marxism as overly mechanical, teleological and offering a “perfect society,” nor does he grasp the subtlety of the “dictatorship of the proletariat,” admittedly a confusing phrase that might better be retired. (“Dictatorship of the proletariat” simply means the predominance of working people, the vast majority of people in capitalist society, without reference to any particular governmental form. All capitalist societies constitute a “dictatorship of the bourgeoisie,” the predominance of industrialists and financiers, which has taken many forms, including formal democracy and fascist.)

Meeting at the Putilov Factory (1917)

These misunderstandings are possible because Marxism’s 20th century practitioners in the Soviet bloc presented it in overly simplified terms, seeing it themselves in a mechanical manner. And that was not new. Friedrich Engels, in an 1890 letter to Joseph Bloch, lamented that he and Marx had put so much emphasis on economics. “Marx and I are ourselves partly to blame for the fact that younger writers sometimes lay more stress on the economic side than is due to it,” Engels wrote. “We had to emphasize this main principle in opposition to our adversaries, who denied it, and we have not always had the time, the place or the opportunity to allow the other elements involved in the interaction to come into their rights. … Unfortunately, however, it happens only too often that people think they have fully understood a theory and can apply it without more ado from the moment they have mastered its main principles, and those even not always correctly.”

We can conceptualize Marxist materialist philosophy like this: The flow and movement of any phenomenon or idea takes varying directions, and far from always in an expected direction. As the concept of “flow” implies, history and social development do not consist of discrete steps or stages. Philosophical, political and religious ideas (which are built on the materials of their predecessors); the prevailing culture (which include traditions shaped in the conditions of the past that have survived into the present); and local geographic factors influence not only each other but also influence economic conditions. What was a cause can become an effect, and an effect can become a cause. These forces are given concrete form within a state, the form of which (including its legal structure) is based on the material conditions of life — the economic structure is the foundation on which society is built and which therefore shapes social consciousness. 

Properly understood, Marxism is not, and has never been, a reach for utopia; its founders were scornful of the utopians of their time. Still more puzzling is Professor Boldizzoni’s bizarre aside that Swedish social democrats were “seeking the achievement of a perfect society.” That would certainly be news to them. The post-World War II Swedish model sought full employment, equality and the transfer of excess profits to the collective ownership of employees. Better than ordinary capitalism and envisioned as an evolutionary route to a future socialist society, but hardly nirvana.

How high should movements aim? 

Nordic social democracy is what the author seems to have in mind when he references “many varieties” of capitalism. Yes, there are national differences in capitalism, sometimes significant, but given the domination of the United States and its ability to dictate to the rest of the world, it is unrealistic to see that there is anything other than a single world system. And Swedish capitalism is far removed from any “perfect society” — dominated by corporate power and subject to the pressures of corporate globalization the same as other small or midsized capitalist country, Sweden today has inequality and poverty levels above the European Union average. 

Sweden’s failure to institute even the most rudimentary beginnings of an evolutionary path to a socialist economic democracy under the 1970s “Meidner plan” of forcing companies to issue stock to public agencies until the public had majority control succumbed not only to the might of local capitalists and the pressures of corporate globalization, but because of the failure of working people to organize. Without a massive movement, no project of socialism, or, if you prefer, economic democracy, can succeed.

Blockupy 2013: Securing the European Central Bank (photo by Blogotron)

If we are dwelling on disagreements here, it is because these areas of dispute are central to the author’s thesis. What should be done? Professor Boldizzoni forecasts that although capitalism will be replaced, it will last for centuries to come. No mention of the environmental crisis — humanity doesn’t have one full century, never mind several, to wait! There is also the matter of the inability to achieve endless growth on a finite planet, and capitalism’s need for continual growth in a world into which it has expanded to almost every corner. (But it should be acknowledged that he has the intellectual honesty to make his own forecast and thus risk being as wrong as those he’s discussed.) He concludes by lamenting “we must come to terms with the limits of the possible” and declaring “the social democratic experience” the height of achievement. This conclusion brings into sharper relief why he is so insistent on seeing any attempt to move past capitalism as utopian.

What is the possible? A standard list of social democratic reforms, such as the “power to tax,” the power to pursue industrial policy and “monetary sovereignty,” offered as counters to European Union policy and centralization. Public ownership of infrastructure and banking is also put forth. These would be welcome reforms, but more than a century of working for reforms within capitalism rather than overcoming it has put the world in precisely the place it is today. Reforms can be won through social struggle, but once movements stand down, the reforms are taken back. Movements must aim higher.

If we believe the world can’t be better, that it can’t be meaningfully changed, that we have no choice other than tinkering around the edges as capitalism destroys the environment, then nothing will get better. Our conditions will actually get worse because there is no stasis. A better world is possible and speculating on what some basic concepts of a better world might look like is necessary if we are to get there. Giving up is not an option. Study of material conditions and the multitude of factors as to why predictions of capitalism’s demise have yet to come to pass — or, to put it in a better way, why capitalism has proven so resilient — are indispensable to achieving an understanding of our present and providing ourselves with the tools necessary to build the movement of movements, working across borders, that is the path toward any possible better world. Lamenting the weight of enlightenment thinking isn’t that route.

Foretelling the End of Capitalism is correct that there won’t be a sudden collapse of capitalism. If no social movement intervenes, capitalism has several more decades of life and would likely be followed by something worse, in a world of environmental disaster, rising seas and dwindling resources. Decades, not centuries — the present path of humanity is unsustainable. There is no substitute for a post-capitalist future, and the past need not dictate the future.

As always, the value of a book isn’t measured by whether we agree with everything in it. If Foretelling didn’t have much of interest to offer, I wouldn’t have written this essay. The question the book attempts to answer is a challenge that must be confronted because it is a question that remains all too relevant. But although the author in good faith sought to interrogate the predictions of the past to provide an understanding of today, he instead produced a cry of defeat and despair.

The fight for independent, non-corporate radio flares up again

Here we go again. Listener democracy at the Pacifica radio network is in deep jeopardy again because the same people who violently shut down WBAI in 2019 and forced an expensive referendum that was soundly defeated in 2020 have forced a second bylaws referendum.

Having lost last year’s referendum by a 2-to-1 margin — losing by lopsided majorities in both staff and listener balloting — that should have been the end of it. Especially as the 2019/2020 escapades cost Pacifica and its five stations hundreds of thousands of dollars in legal and other expenses and in lost fundraising.

Instead of accepting that listeners of Pacifica’s five stations were not interested in a corporate-style takeover that would have placed uncontested power in the hands of coupsters, the same people are attempting another takeover. The tactics are different this time and they’ve adopted a new name (“New Day Pacifica”) but make no mistake, the goal is the same. Listeners didn’t fall for it last time and we shouldn’t this time, either.

(Graphic by Seth Tobocman)

We’ll get to some of the details below, but the summation of this latest takeover attempt is this: If the “New Day Pacifica” bylaws referendum were to pass, a small self-selected elite would assume unaccountable power for three years with the ability to control a majority of the National Board. Each of the five station’s local station boards would be stripped of all power, reduced to toothless advisory committees, and diversity would potentially cease to exist on the National Board. The coupsters have advanced no plans for how they will miraculously reverse Pacifica’s difficult financial situation, simply insisting that power be centralized in their hands (while denying that is what they are asking for).

That New Day Pacifica has been less than forthcoming in promoting its referendum doesn’t lead to confidence. Nor does a parallel December 2020 lawsuit attempting to take over Pacifica through the courts — once again diverting listeners’ donations to defending frivolous legal maneuvers — inspire confidence that they have the interests of Pacifica at heart. Put simply, based on the actions of the past two years, there is ample reason to believe the goal is to either take over the Pacifica radio network or destroy it.

Unaccountable boards have led to disastrous results

The past history of self-selecting board members at Pacifica is instructive. Two decades ago, the national board of Pacifica had become unaccountable, with board members with corporate backgrounds selecting like-minded people to fill board seats and trying to rewrite the bylaws to not only sell off one or more Pacifica stations but to be able to personally pocket some of the proceeds. That unaccountable National Board led to crises that culminated in the lockout of KPFA in 1999 and the Christmas Coup at WBAI in 2000, triggering a long struggle that culminated in the current democratic bylaws structure. 

Flash forward to 2019, and a rogue minority faction on the National Board, intent on selling the New York station, WBAI, and use the proceeds to benefit the Western stations in the network, launched a coup. Farcically insisting they were attempting to “save” WBAI, coup mongers, led by since fired Interim Executive Director John Vernile (then on the job for all of two months!) and National Board Secretary Bill Crosier, removed WBAI from the air in the midst of a fund drive. 

The fund drive was stopped, the web site at which listeners could make donations was disabled and all local programming was taken off the air, replaced with canned programming from California with no local content. The team led by Mr. Vernile that descended on WBAI the morning of October 7, 2019, dismantled the equipment, rendering it impossible to broadcast; immediately fired all employees; confiscated the station bank account; took checks left in the office; put padlocks on the doors; and told the station’s landlord she should find a new tenant while cutting off rent payments. The WBAI web site, including all archives of past shows, was wiped clean and replaced with a one-page site with a propaganda message justifying the coup. Not the actions of people with the interests of listeners at heart.

That coup would be reversed a month later, but the other half of the coup attempt, a referendum on bylaws proposed by those behind the WBAI shutdown, remained to be contested. It was defeated by a nearly 2-to-1 margin by both listeners and staff a year ago.

Nonetheless, we have to go through this again, instead of putting energy into tackling Pacifica’s problems. This time the proposed bylaws, while still undemocratic, are written a little more subtly to better disguise the intentions. Once again, those wishing to put an end to listener accountability at Pacifica cite the network’s financial difficulties and point to questionable fundraising premiums. Financial problems do exist and some fundraising programming should be condemned. Those are real issues, although the current National Board has reported progress in stabilizing the finances. New Day Pacifica claims that centralizing power in its leaders will magically solve the network’s problems but have not offered any specifics. Three of the four New Day leaders who would be given the top four positions on the National Board should the bylaws referendum pass are current or former members of the Pacifica National Board and/or local station boards, so it is reasonable to ask why they haven’t already used their superpowers to help solve the network’s problems.

Plan would eliminate local control

One subtle difference with last year’s proposed bylaws is that instead of outright eliminating each of the five Pacifica stations’ local station boards, which currently are democratically elected by members through ranked-choice voting, which ensures that different factions and perspectives are represented, this time the LSBs would be retained, but stripped of all powers. Instead, they would become advisory bodies with no responsibilities. All power would be centralized in a new National Board, which the New Day coupsters have designed to virtually guarantee their dominance.

New Day’s early tactic was to claim that the four leading positions on their proposed board would be elected by a direct vote of listeners. What they conveniently “forgot” to say was that those four positions would be handed to four pre-selected faction leaders for three years before there would be any elections. This would be a profoundly undemocratic board, and not only for the preceding reason. Each station is currently represented by four board members, each of which was elected to their local station board, and seated in such a way that major voting blocs earn at least one seat. Under the New Day proposal, each station would have only one representative, putting an end to diversity. Affiliated stations — those that aren’t part of the network but which carry programs originating on Pacifica stations — would have their representation cut in half to one seat. Paid and unpaid staff would each get one seat — again assuring that there won’t be a diversity of viewpoints. Finally, in an echo of the 1990s self-selecting board, three seats would be appointed by a board majority.

That’s a total of 15 seats. Each of the self-selected people for the four top seats are from the three Western stations, where this coup attempt is originating, and given that the two California stations have by far the biggest staffs, they would likely fill the two staff seats. If pro-New Day people win those seats — or even one of the two — then they would have a board majority before selecting the appointees, and would be able to pack the board with their allies. Thus New Day’s proposed bylaws changes would install the coupsters as an unaccountable management for three years, an amount of time in which the entire character of Pacifica could be altered. The two East Coast stations, WBAI and WPFW in Washington, could be reduced to having only two of 15 seats on the National Board, a drastic change from the current system of equal representation of all five stations.

Once again, it must be asked: What do those behind New Day propose to do with their centralized power? Ann Garrison, writing for Black Agenda Report and CounterPunch, suggests that erasing anti-imperialist voices may be on the agenda. She is far from alone in raising that issue. She writes:

“In the late 1960s and early ’70s, Pacifica was a radical, antiwar, anti-imperialist network, perhaps most admired when WBAI sent the first American reporter to broadcast from North Vietnam during the Vietnam War. Today, however, much of Pacifica has—like the rest of what now passes for the left—given way to identity politics, Democratic Party politics, Trump Derangement Syndrome, and even national security state narratives. … The network still has an anti-imperialist wing and I’m on it, but the list of Pacifica staff endorsers makes me think that our days will be numbered if the New Day Pacifica bylaws proposal passes. … Many Pacifica programmers wouldn’t sound out of place on NPR, and some have moved on to NPR employment.”

Contrasting those for and against democracy

Among those endorsing a “no” vote on the bylaws referendum are Mumia Abu-Jamal, Leonard Peltier, Oscar Lopez Rivera, Danny Glover, John Samuelsen (International President of the 150,000-member Transportation Workers Union), Medea Benjamin, Cindy Sheehan, Abby Martin, Michael Parenti, Sharonne Salaam and Fernando Velázquez. One of the leading “yes” proponents, backing New Day, is KPFK’s Ian Masters, one of those hosts who would indeed be right at home at NPR; he would actually be one of the relatively more conservative voices on NPR were he a host there. He stands shoulder to shoulder with the Philadelphia Fraternal Order of Police, declaring Mr. Abu-Jamal guilty despite the massive evidence of innocence and well-documented decades of legal railroading. And that tells us what we need to know about who and what are behind New Day.

That the New Day faction is a minority intent on hijacking the network can be seen in the repeated advisory board votes opposing their referendum. The Pacifica National Board voted 16-4 against it, with one abstention — even a majority of the representatives of the Western stations voted against. The local stations boards of WBAI and WPFW both voted unanimously against it; it is a rare day when the WBAI board, composed of three distinct factions, votes unanimously on anything. KPFK in Los Angeles voted against it, 14-7. KPFT’s vote fell short of the necessary majority and thus failed. Out of six boards, only one, KPFA, voted in favor.

(photo by The City Project)

Alex Steinberg, chair of the National Board (but here stressing he is speaking only in a personal capacity) and a long-time activist, notes that New Day’s leaders have refused to work with others to tackle Pacifica’s problems. He writes:

“What has New Day proposed to solve our problems? Nothing at all really except the vague promise that unknown ‘Professionals’ will be hired to fix everything. This is either a deliberate fantasy or delusional thinking. Will the ‘Professionals’ that New Day wants to hire be people like former iED John Vernile, who was responsible for the illegal shutdown of WBAI? There is no way to know since they are not saying, but one has to be a little suspicious since two of the named officers who will be running things, Aki Tanaka and Jan Goodman, were enthusiastic supporters of Vernile and his illegal shutdown of WBAI. 

If New Day was working in good faith they would have worked with the PNB to come up with a few well crafted amendments that we could all have agreed on. But instead they went behind our backs and in secrecy rewrote the entire bylaws which they are trying to impose on us through a well funded propaganda campaign. That is the height of arrogance and elitism.”

The lawsuit paralleling the bylaws referendum

It also shouldn’t be forgotten that there is an active lawsuit also seeking control of Pacifica, part of a “good cop/bad cop strategy” as Building Bridges host Mimi Rosenberg succinctly puts it. Three KPFA board members — Christina Huggins, Andrea Turner and Donald Goldmacher — along with a former KPFA board member, Craig Alderson, sued Pacifica in Los Angeles Superior Court, demanding all of the network’s assets be placed in the hands of an independent party appointed by the court, a process known as “receivership” in which the court-appointed party can dispose of assets at will. The filing made a series of wild, factually incorrect assertions in an attempt to claim Pacifica is irretrievably riddled with “malfeasance and breach of fiduciary duties by directors.”

The lawyer for these four, Stephen Jaffe, issued a press release repeating the wild accusations contained in the lawsuit and added a few more, including wrongly asserting that Pacifica is “at an immediate risk of loss to foreclosure by one or more creditors,” an allegation incessantly put forth by New Day. A large loan that was to have been due in 2021 was well in the process of a renegotiation postponing payment for 18 months, a fact well known at the time. So what we have here is a naked attempt at a takeover, through different means. The immediate bid for a receivership was swiftly denied by the court but legal proceedings will continue and will cost the network money to defend.

Ms. Rosenberg notes the “contempt for democracy” behind these actions.

“Whether adherents of New Day Pacifica’s principles proceed by ‘hook or crook,’ either to imposing a costly second referendum in less than two years to dismantle Pacifica’s governance structure, or by court action to impose receiver over the network, they are antagonists of inclusive governance, radio by the people and for the people. They reject the principle that elected representatives from the gorgeous mosaic of listeners, who with their sweat and finances, along with the workers, drawn from Pacifica’s 5 stations, and hundreds of affiliates across the country, with their unique cultures should govern the network they created. NDPers reject the idea of inclusive democracy, where the marginalized, disenfranchised, discriminated against and historically locked out of power from the multi-racial working class get to speak for themselves and together formulate the policies and practices that make real radio by the people for the people.”

A lack of transparency also raises questions about New Day. One of the four to be handed a National Board seat without election should the referendum pass recently penned an article promoting New Day, but conveniently “forgot” to mention his self-interest. Later, New Day refused to participate in a WPFW broadcast debating the proposed bylaws, but another one of the four self-selectees called in and spoke in favor without identifying herself; several people listening, however, recognized her voice. (In the spirit of transparency, I have never held any position within Pacifica but I am active with WBAI Fightback and was also active in the fight to undo the 2000 Christmas Coup.) 

“New Day has deep pockets, slick propaganda, and is trying to buy this election on a ‘rule or ruin’ basis,” an analysis of the bylaws referendum published by Pacifica Fightback notes. “Centralization of power will lead to gentrification of the airwaves, marginalizing the voices from communities in struggle that are shaping the future and developing solutions to inequality and injustice! Don’t buy the hype — it’s more democracy, stronger ties to the communities we serve, and developing multi-media and social media platforms that will save Pacifica, not ‘white-knight’ progressive investors or management appropriate to commercial radio or commercially-underwritten ‘public’ radio.”

Listener-members and staff of the five stations can vote from June 7 to July 7. Both listeners and staff must each vote “yes” for New Day’s bylaws to take effect, and the numbers of those voting must reach a quorum. If you are a Pacifica listener or staff member who values community radio, hearing alternative voices and democratic accountability, please vote “no” on the bylaws referendum.

The “innocence” of early capitalism is another fantastical myth

It is not unusual for critics of United States foreign policy, whether or not they feel free to use the term “imperialism,” to express regret that a previously rational system has soured. Such sentiments are routine for liberals and hardly unknown among social democrats.

Such sentiments are, to anyone who cares to pursue a study of history, quite ahistorical. Violence, force and coercion — exemplified in widespread use of slave labor, imperialist conquests of peoples around the world and ruthless extraction of natural resources — pervades the entire history of capitalism. The rise of capitalism can’t be understood outside slavery, colonialism and plunder. To follow up on my previous article discussing how U.S. domination of the world is rooted in the stranglehold Washington has over the world’s financial institutions and its possession of the dominant currency, let’s conduct a further examination of the history of how capitalism functions, this time highlighting imperialism and violence.

My inspiration for this examination is my recent reading of John Perkins’ Confessions of an Economic Hit Man. Mr. Perkins, for those not familiar with his book, provides a first-hand account of how the U.S. government employs debt, financial entanglements, bribes, threats and finally violence and assassinations of national leaders who won’t place their economies and resources under the control of U.S.-based multi-national corporations. That is no surprise to anyone paying attention, but the book became an improbable best seller, meaning there must have been many eyes opened. That can only be a positive development.

The conquest of the Incas (mural by FUEJXJDK)

But even Mr. Perkins, who is unsparing in drawing conclusions and under no illusions about what he and his fellow “economic hit men” were doing and on whose behalf, shows a measure of naïveté. He repeatedly draws upon the “ideals of the U.S. founding fathers” and laments that a republic dedicated to “life, liberty, and the pursuit of happiness” has morphed into a global empire. Given the outstanding service he has provided in writing his book, and the physical danger that he put himself in to publish it (he postponed writing it multiple times fearing possible consequences), least of all do I want to imply criticism or raise any snarky accusations against Mr. Perkins. My point here is that even a strong critic of U.S. imperialism with eyes open can harbor illusions about the nature of capitalism. The all-encompassing pervasiveness of capitalist propaganda, and that the relentless dissemination of it across every conceivable media and institutional outlet, still leaves most people with a wistful idealization of some earlier, innocent capitalism not yet befouled by anti-social behavior and violence or by greed.

Such an innocent capitalism has never existed, and couldn’t.

Horrific, state-directed violence in massive doses enabled capitalism to slowly establish itself, then methodically expand from its northwestern European beginnings. It is not for nothing that Karl Marx famously wrote, “If money … ‘comes into the world with a congenital blood-stain on one cheek,’ capital comes dripping from head to foot, from every pore, with blood and dirt.”

Markets over people from the start

Although the relative weight that should be given to the two sides of the equation of how capitalism took root in feudal Europe — feudal lords pushing their peasants off the land to clear space for commodity agricultural products or the capital accumulated from trade by merchants growing large enough to create the surpluses capable of being converted into the capital necessary to start production on a scale larger than artisan production — is likely never to be definitively settled (and the two basic factors reinforced one another), force was a crucial midwife. English lords wanted to transform arable land into sheep meadows to take advantage of the demand for wool, and began razing peasant cottages to clear the land. These actions became known as the “enclosure movement.”

Forced off the land they had farmed and barred from the “commons” (cleared land on which they grazed cattle and forests in which they foraged), peasants could either become beggars, risking draconian punishment for doing so, or become laborers in the new factories at pitifully low wages and enduring inhuman conditions and working hours. The brutality of this process is glimpsed in this account by historian Michael Perelman, in his book The Invention of Capitalism:

Simple dispossession from the commons was a necessary, but not always sufficient, condition to harness rural people to the labor market. A series of cruel laws accompanied the dispossession of the peasants’ rights, including the period before capitalism had become a significant economic force.

For example, beginning with the Tudors, England created a series of stern measures to prevent peasants from drifting into vagrancy or falling back onto welfare systems. According to a 1572 statute, beggars over the age of fourteen were to be severely flogged and branded with a red-hot iron on the left ear unless someone was willing to take them into service for two years. Repeat offenders over the age of eighteen were to be executed unless someone would take them into service. Third offenses automatically resulted in execution. … Similar statutes appeared almost simultaneously in England, the Low Countries, and Zurich. … Eventually, the majority of workers, lacking any alternative, had little choice but to work for wages at something close to subsistence level.”

Additional taking of the commons occurred in the early 19th century, when British industrialists sought to eliminate the remaining portions of any commons left so there would be no alternative to selling one’s labor power to capitalists for a pittance. As industrial resistance gathered steam, the British government employed 12,000 troops to repress craft workers, artisans, factory workers and small farmers who were resisting the introduction of machinery by capitalists, seeing these machines as threats to their freedom and dignity. That represented more troops than Britain was using in its simultaneous fight against Napoleon’s armies in Spain.

Slavery critical to capitalist accumulation

Nor can the role of slavery in bootstrapping the rise of capitalism be ignored. The slave trade, until the end of the seventeenth century, was conducted by government monopolies. European economies grew on the “triangular trade” in which European manufactured goods were shipped to the coast of western Africa in exchange for slaves, who were shipped to the Americas, which in turn sent sugar and other commodities back to Europe. Britain and other European powers earned far more from the plantations of their Caribbean colonies than from North American possessions; much Caribbean produce could not be grown in Europe, while North American colonies tended to produce what Europe could already provide for itself.

Britain profited enormously from the triangular trade, both in the slave trade itself and the surpluses generated from plantation crops produced with slave labor. Proceeds from the slave trade were large enough to lift the prosperity of the British economy as a whole, provide the investment funds to build the infrastructure necessary to support industry and the scale of trade resulting from a growing industrial economy, and ease credit problems.

Sheep in a meadow (Eugène Verboeckhoven)

Spain’s slaughter of Indigenous peoples and Spanish use of the survivors as slaves to mine enormous amounts of gold and silver — the basis of money across Europe and Asia — also was a crucial contributor to the rise of European economies, both by swelling the amount of money available and enabling the importation of goods from China, which was not interested in buying European products but had a need of silver to stabilize its own economy. The Spanish priest Bartolomé de las Casas, horrified at what he witnessed, wrote in 1542, “the Spaniards, who no sooner had knowledge of these people than they became like fierce wolves and tigers and lions who have gone many days without food or nourishment. And no other thing have they done for forty years until this day, and still today see fit to do, but dismember, slay, perturb, afflict, torment, and destroy the Indians by all manner of cruelty — new and divers and most singular manners such as never before seen or read of heard of — some few of which shall be recounted below, and they do this to such a degree that on the Island of Hispaniola, of the above three millions souls that we once saw, today there be no more than two hundred of those native people remaining.”

When the Spanish were kicked out by Latin America’s early 19th century wars of liberation, that did not mean real independence. The British replaced the Spanish, using more modern financial means to exploit the region. The era of direct colonialism, beginning with Spain’s massive extraction of gold and silver, was replaced by one-sided trading relationships following the region’s formal independence in the early nineteenth century. George Canning, an imperialist “free trader” who was the British foreign secretary, wrote in 1824: “The deed is done, the nail is driven, Spanish America is free; and if we do not mismanage our affairs sadly, she is English.” 

Canning was no idle boaster. At the same time, the French foreign minister lamented, “In the hour of emancipation the Spanish colonies turned into some sort of British colonies.” And lest we think this was simply European hubris, here is what the Argentine finance minister had to say: “We are not in a position to take measures against foreign trade, particularly British, because we are bound to that nation by large debts and would expose ourselves to a rupture which would cause much harm.” What had happened? Argentina flung its ports wide open to trade under British influence, flooding itself with a deluge of European goods sufficient to strangle nascent local production; when Argentina later attempted to escape dependency by imposing trade barriers in order to build up its own industry, British and French warships forced the country open again.

The “right” to force opium on China to maintain profits

Imperialism was not confined to any single continent. Consider Britain’s treatment of China in the latter half of the 19th century. (We are concentrating on Britain for the moment because it was the leading capitalist power at this time.) British warships were sent to China to force the Chinese to import opium, a drug that was illegal back home. This was done under the rubric of Britain’s alleged “right to trade.” Under this doctrine, underdeveloped countries had no choice but to buy products from more powerful capitalist countries, even products that caused widespread injury to the country’s people. This could also be considered a “right” to force opium on China. Where else but under capitalism could such a preposterous “right” be conjured? U.S. smugglers also made enormous fortunes selling opium to Chinese as well.

A 2015 Medium article detailing the background and results of the two opium wars, noted the huge amounts of money that were made:

“Opium was big business for the British, one of the critical economic engines of the era. Britain controlled India and oversaw one million Indian opium farmers. By 1850, the drug accounted for a staggering 15 to 20 percent of the British Empire’s revenue, and the India-to-China opium business became, in the words of Frederic Wakeman, a leading historian of the period, the ‘world’s most valuable single commodity trade of the nineteenth century.’ Notes Carl Trocki, author of Opium, Empire and the Global Economy, ‘The entire commercial infrastructure of European trade in Asia was built around opium. … [A] procession of American sea merchants made their fortunes smuggling opium. They were aware of its poisonous effects on the Chinese people, but few of them ever mentioned the drug in the thousands of pages of letters and documents they sent back to America.’ ”

Eventually, Chinese authorities ordered foreigners, mainly British and U.S., to hand over all opium. After a refusal, Chinese authorities destroyed all the opium they could find. In response, British warships were sent to bombard coastal cities until China agreed to the one-sided Treaty of Nanking, in which it was forced to pay Britain an indemnity of millions, to cede Hong Kong and to open five ports to trade, where foreigners were not subject to Chinese law or authorities.

When further demands were refused, the British, French and U.S. navies launched the second opium war, attacking coastal and interior cities. They invaded Beijing, “chased the emperor out of town, and, in an orgy of fine-art and jewelry looting, destroyed the Versailles of China, the old Summer Palace.” A new treaty, more unequal than the first, was imposed, forcing open the entire country. A British lawyer enlisted to provide justification for this behavior wrote, as the first opium war was developing, “Our men of war are now, it is to be hoped, far on their way towards China, which shall be ‘our oyster, which [we] with sword will open.’ Then may we extract from the Emperor an acknowledgement of the heinous offence — or series of offences — which he has committed against the law of nature and of nations, and read him a lesson, even from a barbarian book, which will benefit him and all his successors.” 

Fantastic profits for European capital; death for Africans

Nor was Africa spared exploitation. Far from it. The exact number of Africans kidnapped and forcibly transported across the Atlantic will never be known, but scholars’ estimates tend to range from about ten million to twelve million. The human toll, however, is still higher because, simultaneous with those who were successfully kidnapped, millions more were killed or maimed, and thus not shipped across the Atlantic. This level of inhumanity cannot be accomplished without an accompanying ideology. 

Walter Rodney, in his outstanding contribution to understanding lagging development in the South, How Europe Underdeveloped Africa, pointed out that although racism and other hatreds, including anti-Semitism, long existed across Europe, racism was an integral part of capitalism because it was necessary to rationalize the exploitation of African labor that was crucial to their accumulations of wealth.  “Occasionally, it is mistakenly held that Europeans enslaved Africans for racist reasons,” Dr. Rodney wrote. “European planters and miners enslaved Africans for economic reasons, so that their labor power could be exploited. Indeed, it would have been impossible to open up the New World and to use it as a constant generator of wealth, had it not been for African labor. There were no other alternatives: the American (Indian) population was virtually wiped out and Europe’s population was too small for settlement overseas at that time.”

The triangular trade (Graphic by Sémhur)

Exploitation did not end with the end of slavery in the 19th century, Dr. Rodney pointed out. Colonial powers confiscated huge areas of arable land in Africa, then sold it at nominal prices to the well-connected. In Kenya, for example, the British declared the fertile highlands “crown lands” and sold blocks of land as large as 550 square miles (1,400 square kilometers). These massive land confiscations not only enabled the creation of massively profitable plantations, but created the conditions that forced newly landless Africans to become low-wage agricultural workers and to pay taxes to the colonial power. Laws were passed forbidding Africans from growing cash crops in plantation regions, a system of compulsion summed up by a British colonel who became a settler in Kenya: “We have stolen his land. Now we must steal his limbs. Compulsory labor is the corollary of our occupation of the country.” In other parts of colonial Africa, where land remained in African hands, colonial governments slapped money taxes on cattle, land, houses and the people themselves; subsistence farmers don’t have money to pay money taxes so farmers were forced to grow cash crops, for which they were paid very little.

The alternative to farming was to go to work in the mines, where wages were set at starvation levels. European and North American mining and trading companies made fantastic profits (sometimes as high as 90 percent) and raw materials could be exploited at similar levels. (A U.S. rubber company, from 1940 to 1965, took 160 million dollars worth of rubber out of Liberia while the Liberian government received eight million dollars.) Another method of extracting wealth was through forced labor — French, British, Belgian and Portuguese colonial governments required Africans to perform unpaid labor on railroads and other infrastructure projects. The French were particularly vicious in their use of forced labor (each year throughout the 1920s, 10,000 new people were put to work on a single railroad and at least 25 percent of the railroad’s forced laborers died from starvation or disease). These railroads did not benefit Africans when independence came in the mid-20th century because they were laid down to bring raw materials to a port and had no relationship to the trading or geographical patterns of the new countries or their neighbors.

The entire territory that today constitutes the Democratic Republic of Congo was, in the late 19th and early 20th century, the personal possession of Belgium’s king, Leopold II. At least 10 million Congolese lost their lives at the hands of Belgian authorities eager to extract rubber and other resources at any cost. This genocidal plunder — the loss of life halved the local population — rested on a system of terror and slave labor. This system included forced labor requiring work in mines day and night, the chopping off of hands as punishment and “the burning of countless villages and cities where every individual who was found was killed.”

As the U.S. grew to prominence, becoming a leading capitalist power itself as the 20th century began, overthrowing governments to ensure undisputed “profitable investment” became routine. The U.S., incidentally, was the first country to recognize King Leopold’s claim to Congo.

If it’s your “backyard” you do what you want to do

The U.S. has long considered Latin America its “backyard.” Cuba’s economy was based on slave-produced sugar cane under Spanish rule, and when a series of rebellions finally succeeded in freeing the country from Spanish colonial rule, Cuban independence was formal only as the United States quickly became a colonial master in all but name. U.S. forces left Cuba in 1902 after a four-year occupation but not before dictating that Cubans agree to the Platt Amendment. The amendment, inserted into the Cuban constitution as the price for U.S. withdrawal, gave the U.S. control over Cuban foreign and economic policies and the right to intervene with military force to protect U.S. corporate interests. By 1905, U.S. interests owned 60 percent of Cuba’s land and controlled most of its industry. Just four months after the 1959 revolution took power, the U.S. government was already viewing the potential success of the revolution as a “bad example” for the rest of Latin America. The U.S. State Department defined U.S. goals in Cuba as “receptivity to U.S. and free world capital and increasing trade” and “access by the United States to essential Cuban resources.” Those goals have not changed to this day.

That follows naturally from what the pre-revolution U.S. ambassador to Cuba, Earl T. Smith, had said of the island country: “I ran Cuba from the sixth floor of the US embassy. The Cubans’ job was to grow sugar and shut up.”

When a strike broke out against the United Fruit Company in Colombia in 1929, the action was put down through a massacre of the workers. The U.S. embassy in Bogotá cabled the State Department in Washington this triumphant message: “I have the honor to report that the Bogotá representative of the United Fruit Company told me yesterday that the total number of strikers killed by the Colombian military exceeded one thousand.” Honor. Think about that.

For much of the 20th century, the effective ruler of Guatemala and Honduras was the United Fruit Company. The company owned vast plantations in eight countries, and toppled governments in Guatemala and Honduras. For many years, United Fruit had an especially sweet deal in Guatemala. The company paid no taxes, imported equipment without paying duties and was guaranteed low wages. The company also possessed a monopoly on Guatemalan railroads, ocean ports and the telegraph. When a president, Jacobo Arbenz, moved to end this exploitation and orient Guatemala’s economy toward benefiting Guatemalans through mild reforms, the CIA overthrew him. U.S. intelligence agencies declared Arbenz’s program had to be reversed because loosening the United Fruit Company’s domination of the country was against U.S. interests. The U.S. instituted what would become a 40-year nightmare of state-organized mass murder. A series of military leaders, each more brutal than the last and fortified with U.S. aid, unleashed a reign of terror that ultimately cost 200,000 lives, 93 percent of whom were murdered by the state through its army and its death squads.

Viñales Valley, Pinar del Rio province, Cuba (photo by Adam Jones adamjones.freeservers.com)

But not outside ordinary policy. The United States has militarily invaded Latin American and Caribbean countries 96 times, including 48 times in the 20th century. That total constitutes only direct interventions and doesn’t include coups fomented by the U.S., such as Guatemala in 1954 and Chile in 1973. Most of these invasions were for reasons along the lines articulated by former U.S. president William Howard Taft: to ensure profits for one or more U.S. corporations or to overthrow governments that did not prioritize the maximization of those profits. 

But not outside ordinary policy. The United States has militarily invaded Latin American and Caribbean countries 96 times, including 48 times in the 20th century. That total constitutes only direct interventions and doesn’t include coups fomented by the U.S., such as Guatemala in 1954 and Chile in 1973. Most of these invasions were for reasons along the lines articulated by former U.S. president William Howard Taft: to ensure profits for one or more U.S. corporations or to overthrow governments that did not prioritize the maximization of those profits. 

The U.S. invaded and occupied Nicaragua multiple times. One of these occasions, in 1909, came as a result of a Nicaraguan president accepting a loan from British bankers instead of U.S. bankers, then opening negotiations with Germany and Japan to build a new canal to rival the Panama Canal. The U.S. installed a dictatorship, and President Taft placed Nicaragua’s customs collections under U.S. control. The disapproved British loan was refinanced through two U.S. banks, which were given control of Nicaragua’s national bank and railroad as a reward. These developments were not an accident, for President Taft had already declared that his foreign policy was “to include active intervention to secure our merchandise and our capitalists opportunity for profitable investment” abroad.

All these atrocities — and countless others — all happened before the assassinations in Ecuador, Iran and Panama of heads of state who refused to do as they were ordered to by U.S. government operatives (and, in the case of Omar Torrijos, refusing the bribes that were the first tactic to get local leaders on side) recounted by Mr. Perkins in Confessions. No, those atrocities — and the author leaves us in no doubt that those were not “accidents” but were assassinations carried out by the U.S. government — do not represent an unprecedented turn to the dark side. Those acts, as are the present-day sanctions that kill in the hundreds of thousands, are business as usual for the U.S. government and the capitalism it imposes around the world. Imperialism, brutality and violence are nothing new; they are essential tools long wielded in abundance.

Far more examples could be cited; the above represents a minuscule fraction of atrocities that could be told. Such a long history of systematic violence and brutality speaks for itself as to the “morality” of capitalism.

How the U.S. is able to dictate to the rest of the world

The United States government is able to impose its will on all the world’s countries. The rest of the world, even some of the strongest imperialist countries of the Global North, lie prostrate at the feet of the U.S. What is the source of this seemingly impregnable power? Which of course leads to the next question: How long can it last? 

The U.S. moves against any country that dares to act on a belief that its resources should be for its own people’s benefits rather than maximizing profits of multinational corporations or prioritizes the welfare of its citizens over corporate profit or simply refuses to accept dictation in how it should organize its economy. The military is frequently put to use, as are manipulation of the United Nations and the strong arms of the World Bank and International Monetary Fund (IMF). But sanctions are a frequently used tool, enforced on countries, banks and corporations that have no presence in the U.S. and conduct business entirely outside the United States. The U.S. can impose its will on national governments around the world, using multilateral institutions to force governments to act in the interest of multinational capital, even when that is opposite the interests of the country itself or that country’s peoples. And when a country persists in refusing to bend to U.S. demands, sanctions imposing misery on the general population are unilaterally imposed and the rest of the world is forced to observe them.

In short, the U.S. government possesses a power that no country has ever held, not even Britain at the height of its empire. And that government, regardless of which party or what personality is in the White House or in control of Congress, is ruthless in using this power to impose its will.

This power is most often wielded within an enveloping shell of propaganda that claims the U.S. is acting in the interest of “democracy” and maintaining the “rule of law” so that business can be conducted in the interest of a common good. So successful has this propaganda been that this domination is called the “Washington Consensus.” Just who agreed to this “consensus” other than Washington political elites and the corporate executives and financial speculators those elites represent has never been clear. “Washington diktat” would be a more accurate name.

Much speculation among Left circles exists as to when this domination will be brought to an end, with many commentators believing that the fall of the U.S. dollar is not far off and perhaps China will become the new center of a system less imperialistic. On the Right, particularly in the financial industry, such speculation is far from unknown, although there of course the downfall of the dollar is feared. In financial circles, however, there is no illusion that the end of dollar supremacy in world economics is imminent.

There are only two possible challengers to U.S. dollar hegemony: The European Union’s euro and China’s renminbi. But the EU and China are very much subordinated to the dollar, and thus not in a position to counter U.S. dictates. Let’s start here, and then we’ll move on to the mechanics of U.S. economic hegemony over the world, which rests on the dollar being the global reserve currency and the leveraging of that status to control the world’s multilateral institutions and forcing global compliance with its sanctions.

Europe “helpless” in the face of U.S. sanctions

A February 2019 paper published by the German Institute for International and Security Affairs, discussing the inability of EU countries to counteract the Trump administration’s pullout from the Joint Comprehensive Plan of Action, the multilateral nuclear deal with Iran, flatly declared the EU “helpless”: “In trying to shield EU-based individuals and entities with commercial interests from its adverse impact, European policy-makers have recently been exposed as more or less helpless.”

The legislative arm of the EU, the European Parliament, was no more bullish. In a paper published in November 2020, the Parliament wrote this about U.S. extraterritorial sanctions: “[T]his bold attempt to prescribe the conduct of EU companies and nationals without even asking for consent challenges the EU and its Member States as well as the functioning and development of transatlantic relations. The extraterritorial reach of sanctions does not only affect EU businesses but also puts into question the political independence and ultimately the sovereignty of the EU and its Member States.”

No such open worries are going to be said in public by the Chinese government. But is China better prepared than the EU? Mary Hui, a Hong Kong-based business journalist, wrote in Quartz, “China is actually far more vulnerable to US sanctions than it will let on, even if the sanctions are aimed at individuals and not banks. That’s because the primary system powering the world’s cross-border financial transactions between banks, Swift, is dominated by the US dollar.” We’ll delve into this shortly. As a result of that domination, Ms. Hui wrote, “the US has outsize control over the machinery of international transactions—or, as the Economist put it, ‘America is uniquely well positioned to use financial warfare in the service of foreign policy.’ ”

Grand Place, Brussels (photo by Wouter Hagens)

In 2017, then U.S. Treasury Secretary Steven Mnuchin threatened China with sanctions that would cut it off from the U.S. financial system if it didn’t comply with fresh United Nations Security Council sanctions imposed on North Korea in 2007; he had already threatened unilateral sanctions on any country that trades with North Korea if the United Nations didn’t apply sanctions on Pyongyang.

So neither Brussels or Beijing are in a position, at this time, to meaningfully challenge U.S. hegemony. That hegemony rests on multiple legs.

The world financial platform that the U.S. ultimately controls

The use (or, actually, abuse) of the two biggest multilateral financial institutions, the World Bank and the IMF, are well known. The U.S., as the biggest vote holder and through the rules set up for decision-making, carries a veto and thus imposes its will on any country that falls into debt and must turn to the World Bank or IMF for a loan. There also are the U.S.-controlled regional banks, such as the Asian Development Bank and Inter-American Development Bank, that impose U.S. dictates through the terms of their loans.

Also important as an institution, however, is a multilateral financial institution most haven’t heard of: The Society for Worldwide Interbank Financial Telecommunication, known as SWIFT. Based in Brussels, SWIFT is the primary platform used by the world’s financial institutions “to securely exchange information about financial transactions, including payment instructions, among themselves.” SWIFT says it is officially a member-owned cooperative with more than 11,000 member financial institutions in more than 200 countries and territories.

That sounds like it is a truly global entity. Despite that description, the U.S. holds ultimate authority over it and what it does. U.S. government agencies, including the CIA, National Security Agency and Treasury Department, have access to the SWIFT transaction database. Payments in U.S. dollars can be seized by the U.S. government even when the transaction is between two entities outside the U.S. And here we have a key to understanding.

The skyline of Beijing (photo by Picrazy2)

Beyond the ability of U.S. intelligence agencies to acquire information is the status of the U.S. dollar as the world’s reserve currency, the foundation of the world capitalist system of which SWIFT is very much a component and thus subject to dictates the same as any other financial institution. What is a reserve currency? This succinct definition offered by the Council on Foreign Relations provides the picture:

“A reserve currency is a foreign currency that a central bank or treasury holds as part of its country’s formal foreign exchange reserves. Countries hold reserves for a number of reasons, including to weather economic shocks, pay for imports, service debts, and moderate the value of its own currency. Many countries cannot borrow money or pay for foreign goods in their own currencies—since much of international trade is done in dollars—and therefore need to hold reserves to ensure a steady supply of imports during a crisis and assure creditors that debt payments denominated in foreign currency can be made.”

The currency mostly used is the U.S. dollar, the Council explains:

“Most countries want to hold their reserves in a currency with large and open financial markets, since they want to be sure that they can access their reserves in a moment of need. Central banks often hold currency in the form of government bonds, such as U.S. Treasuries. The U.S. Treasury market remains by far the world’s largest and most liquid—the easiest to buy into and sell out of bond market[s].”

If you use dollars, the U.S. can go after you

Everybody uses the dollar because everybody else uses it. Almost two-thirds of foreign exchange reserves are held in U.S. dollars. Here’s the breakdown of the four most commonly held currencies, as of the first quarter of 2020:

  • U.S. dollar 62%
  • EU euro 20%
  • Japanese yen 4%
  • Chinese renminbi 2%

That 62 percent gives the U.S. government its power to not only impose sanctions unilaterally, but to force the rest of the world to observe them, in conjunction with the use of the dollar as the primary currency in international transactions. In some industries, it is almost the only currency used. To again turn to the Council on Foreign Relations explainer:

“In addition to accounting for the bulk of global reserves, the dollar is the currency of choice for international trade. Major commodities such as oil are primarily bought and sold using U.S. dollars. Some countries, including Saudi Arabia, still peg their currencies to the dollar. Factors that contribute to the dollar’s dominance include its stable value, the size of the U.S. economy, and the United States’ geopolitical heft. In addition, no other country has a market for its debt akin to the United States’, which totals roughly $18 trillion.

The dollar’s centrality to the system of global payments also increases the power of U.S. financial sanctions. Almost all trade done in U.S. dollars, even trade among other countries, can be subject to U.S. sanctions, because they are handled by so-called correspondent banks with accounts at the Federal Reserve. By cutting off the ability to transact in dollars, the United States can make it difficult for those it blacklists to do business.”

Sanctions imposed by the U.S. government are effectively extra-territorial because a non-U.S. bank that seeks to handle a transaction in U.S. dollars has to do so by clearing the transaction through a U.S. bank; a U.S. bank that cleared such a transaction would be in violation of the sanctions. The agency that monitors sanctions compliance, the Office of Foreign Assets Control (OFAC), insists that any transaction using the dollar comes under U.S. law and thus blocking funds “is a territorial exercise of jurisdiction” wherever it occurs, even if no U.S. entities are involved. Even offering software as a service (or for download) from United States servers is under OFAC jurisdiction.

Two further measures of dollar dominance are that about half of all cross-border bank loans and international debt securities are denominated in U.S. currency and that 88 percent of all foreign-exchange transactions in 2019 involved the dollar on one side. That forex domination has remained largely unchanged; the figure was 87 percent in April 2003.

Dollar dominance cemented at end of World War II

The roots of the dollar as the global reserve currency go back to the creation of the Bretton Woods system in 1944 (named for the New Hampshire town where representatives of Allied and other governments met to discuss the post-war monetary system as victory in World War II drew closer). The World Bank and IMF were created here. To stabilize currencies and make it more difficult for countries to reduce the value of their currencies for competitive reasons (to boost exports), all currencies were pegged to the dollar, and the dollar in turn was convertible into gold at $35 an ounce. Thus the dollar became the center of the world financial system, which cemented U.S. dominance. 

By the early 1970s, the Nixon administration believed that the Bretton Woods monetary system no longer sufficiently advantaged the United States despite its currency’s centrality within the system cementing U.S. economic suzerainty. Because of the system of fixing the value of a U.S. dollar to the price of gold, any government could exchange the dollars it held in reserve for U.S. Treasury Department gold on demand. 

Rising world supplies of dollars and domestic inflation depressed the value of the dollar, causing the Treasury price of gold to be artificially low and thereby making the exchange of dollars for gold at the fixed price an excellent deal for other governments. The Nixon administration refused to adjust the value of the dollar, instead in 1971 pulling the dollar from the gold standard by refusing to continue to exchange foreign-held dollars for gold on demand. Currencies would now float on markets against each other, their values set by speculators rather than by governments, making all but the strongest countries highly vulnerable to financial pressure. 

“Imperialism is the real virus.” (photo by Paul Sableman from St. Louis)

The world’s oil-producing states dramatically raised oil prices in 1973. The Nixon administration eliminated U.S. capital controls a year later, encouraged oil producers to park their new glut of dollars in U.S. banks and adopted policies to encourage the banks to lend those deposited dollars to the South. But perhaps “encourage” is too mild a word. The economist and strong critic of imperialism Michael Hudson once wrote, “I was informed at a White House meeting that U.S. diplomats had let Saudi Arabia and other Arab countries know that they could charge as much as they wanted for their oil, but that the United States would treat it as an act of war not to keep their oil proceeds in U.S. dollar assets.”

Restrictions limiting cross-border movements of capital were opposed by multi-national corporations that had moved production overseas, by speculators in the new currency-exchange markets that blossomed with the breakdown of Bretton Woods and by neoliberal ideologues, creating decisive momentum within the U.S. for the elimination of capital controls. The ultimate result of these developments was to make the dollar even more central to world trade and thus further enhance U.S. control. Needless to say, bipartisan U.S. policy ever since has been to maintain this control.

U.S. sanctions in action: The cases of Cuba and Iran

Two examples of U.S. sanctions being applied extraterritorially are those imposed on Cuba and Iran. (There are many other examples, including that of Venezuela.) In the case of Cuba, any entity that conducts business with Cuba is barred from doing business in the U.S. or with any U.S. entity; foreign businesses that are owned by U.S. companies are strictly prohibited from doing any business with Cuba. Any company that had done business in Cuba must cease all activities there if acquired by a U.S. corporation. Several companies selling life-saving medical equipment and medicines to Cuba had to cease doing so when acquired by a U.S. corporation.

Meanwhile, U.S. embassy personnel have reportedly threatened firms in countries such as Switzerland, France, Mexico and the Dominican Republic with commercial reprisals unless they canceled sales of goods to Cuba such as soap and milk. Amazingly, an American Journal of Public Health report quoted a July 1995 written communication by the U.S. Department of Commerce in which the department said those types of sales contribute to “medical terrorism” on the part of Cubans! Well, many of us when we were, say, 5 years old might have regarded soap with terror, but presumably have long gotten over that. Perhaps Commerce employees haven’t.

The sanctions on Cuba have been repeatedly tightened over the years. Joy Gordon, writing in the Harvard International Law Journal in January 2016, provides a vivid picture of the difficulties thereby caused:

“The Torricelli Act [of 1992] provided that no ship could dock in the United States within 180 days of entering a Cuban port. This restriction made deliveries to Cuba commercially unfeasible for many European and Asian companies, as their vessels would normally deliver or take on shipments from the United States while they were in the Caribbean. The Torricelli Act also prohibited foreign subsidiaries of U.S. companies from trading with Cuba. … The Helms-Burton Act, enacted in 1996, permitted U.S. nationals to bring suit against foreign companies that were doing business in Cuba and that owned properties that had been abandoned or confiscated after the revolution. Additionally, the Helms-Burton Act prohibited third-party countries from selling goods in the United States that contained any components originating in Cuba. This significantly impacted Cuba’s major exports, particularly sugar and nickel. 

[T]he shipping restrictions in the Torricelli Act have increased costs in several ways, such as Cuba sometimes having to pay for ships carrying imports from Europe or elsewhere to return empty because they cannot stop at U.S. ports to pick up goods. Shipping companies have partially responded by dedicating particular ships for Cuba deliveries; but in most cases, they tend to designate old ships in poor condition, which then leads to higher maritime insurance costs.”

The United Nations estimates that the cost of the embargo to Cuba has been about $130 billion.

However distasteful we find the religious fundamentalist government of Iran, U.S. sanctions, which are blunt weapons, have caused much hardship on Iranians. The same restrictions on Cuba apply to Iran. The Iranian government said in September 2020 that it has lost $150 billion since the Trump administration withdrew from the 2015 nuclear deal and that it is hampered from importing food and medicines.

The Trump administration’s renewed sanctions were imposed unilaterally and against the expressed policies of all other signatories — Britain, France, Germany, China and Russia. With those governments unable to restrain Washington, businesses from around the world pulled out to avoid getting sanctioned. EU countermeasures were ineffective — small fines didn’t outweigh far larger U.S. fines, European companies are subject to U.S. sanctions and favorable judgments in European courts are unenforceable in U.S. courts.

Sascha Lohmann, author of the German Institute for International and Security Affairs paper, wrote:

“Well ahead of the deadlines set by the Trump administration and absent any enforcement action, major European and Asian companies withdrew from the otherwise lucrative Iranian market. Most not­a­bly, this included [SWIFT,] which cut off most of the more than 50 Iranian banks in early November 2018, including the Central Bank of Iran, after they again became subject to U.S. financial sanctions. …  [T]he exodus of EU-based companies has revealed an inconvenient truth to European policy-makers, namely that those companies are effectively regulated in Washington, D.C. … [T]he secretary of the Treasury can order U.S. banks to close or impose strict conditions on the opening or maintaining of correspondent or payable-through accounts on behalf of a foreign bank, thereby closing down access to dollarized transactions — the ‘Wall Street equivalent of the death penalty.’ ”

The long arm of U.S. sanctions stretches around the world

The idea that sanctions can be the “Wall Street equivalent of the death penalty” is not a figment of the imagination. Two examples of sanctions against European multinational enterprises demonstrate this.

In 2015, the French bank BNP Paribas was given a penalty of almost $9 billion for violating U.S. sanctions by processing dollar payments from Cuba, Iran and Sudan. The bank also pleaded guilty to two criminal charges. These penalties were handed down in U.S. courts and prosecuted by the U.S. Department of Justice. The chief executive officer of the bank told the court “we deeply regret the past misconduct.” The judge overseeing the case declared the bank “not only flouted U.S. foreign policy but also provided support to governments that threaten both our regional and national security,” a passage highlighted in the Department’s press release announcing the settlement.

Why would a French bank agree to these penalties and do so in such apologetic terms? And why would it accept the preposterous idea that Cuba represents any security threat to the U.S. or that a French bank is required to enforce U.S. foreign policy? As part of the settlement, Reuters reported, “regulators banned BNP for a year from conducting certain U.S. dollar transactions, a critical part of the bank’s global business.” And that gives us the clue. Had the bank not settled its case, it risked a permanent ban on access to the U.S. financial system, meaning it could not handle any deals denominated in dollars. Even the one-year ban could have triggered an exodus of clients in several major industries, including oil and gas.

Viñales Valley, Pinar del Rio province, Cuba (photo by Adam Jones adamjones.freeservers.com)

This was completely an extraterritorial application of U.S. law. An International Bar Association summary of the case noted, “the transactions in question were not illegal under French or EU law. Nor did they fall foul of France’s obligations under the World Trade Organization or the United Nations; no agreements between France and the US were violated. But as they were denominated in dollars, the deals ultimately had to pass through New York and thus came under its regulatory authority.”

It does not take direct involvement in financial transactions to run afoul of the long arm of U.S. sanctions. A Swiss company, Société Internationale de Télécommunications Aéronautiques (SITA), was forced to agree to pay $8 million to settle allegations that it provided blacklisted airlines with “software and/or services that were provided from, transited through, or originated in the United States.” Among the actions punished were that SITA used software originating in the U.S. to track lost baggage and used a global lost-baggage tracing system hosted on servers in the United States. Retrieving baggage is a service most people would not consider a high crime.

Can the EU or China create an alternative?

Dropping the widespread use of the dollar and substituting one or more other currencies, and setting up alternative financial systems, would be the logical short-term path toward ending U.S. financial hegemony. The German public broadcaster Deutsche Welle, in a 2018 report, quoted the German foreign minister, Heiko Maas, “We must increase Europe’s autonomy and sovereignty in trade, economic and financial policies. It will not be easy, but we have already begun to do it.” DW reported that the European Commission was developing a system parallel to SWIFT that would allow Iran to interface with European clearing systems with transactions based on the euro, but such a system never was put in place. In January 2021, as the new Biden administration took office, Iran dismissed it entirely, Bloomberg reported: “European governments have ‘no idea’ how to finance the conduit set up two years ago, known as Instex, and ‘have not had enough courage to maintain their economic sovereignty,’ the Central Bank of Iran said in comments on Twitter.” 

It would seem that Teheran’s dismissal is warranted. The European Parliament, in its paper on U.S. sanctions being imposed extraterritorially, could only offer liberal weak-tea ideas, such as “Encourage and assist EU businesses in bringing claims in international investor-state arbitration and in US courts; Complaints against extraterritorial measures in the [World Trade Organization].” Such prescriptions are unlikely to have anyone in Washington losing sleep.

What about China? Beijing has actually created a functioning alternative to the World Bank and IMF, the Asian Infrastructure Investment Bank. Just on the basis of the new bank representing a bad example (from Washington’s perspective), the U.S. government leaned heavily on Australia and other countries sufficiently firmly that Canberra initially declined to join the bank despite its initial interest, nor did Indonesia and South Korea, although all three did later join. There is a possibility of one-sidedness here, however, as China has by far the biggest share of the vote, 27 percent, dwarfing No. 2 India’s 7 percent, giving Beijing potential veto power. And with US$74 billion in capitalization (less than the goal of $100 billion set in 2014), it can’t realistically be a substitute for existing multilateral financial institutes.

China has also set up an alternative to SWIFT, the Cross-border Interbank Payment System (CIPS), a renminbi-denominated clearing and settlement system. CIPS says it has participants from 50 countries and regions, and processes US$19.4 billion per day. But that’s well less than one percent of the $6 trillion SWIFT handles daily. The Bank of China, the country’s central bank, is on the record of seeking an alternative to the dollar system so that it can evade any U.S. sanctions. “A good punch to the enemy will save yourself from hundreds of punches from your enemies,” a 2020 Bank of China report said. “We need to get prepared in advance, mentally and practically.” The report said if Chinese banks are deprived of access to dollar settlements, China should consider ceasing the use of the U.S. dollar as the anchor currency for its foreign exchange controls.

That is easier said than done — China holds $1.1 trillion in U.S. government debt issued by the U.S. Treasury Department. That total is second only to Japan, and Beijing’s holdings comprise 15 percent of all U.S. debt held by foreign governments. The South China Morning Post admits that China holds such large reserve assets of U.S. debt “largely due to its status as a ‘safe haven’ for investment during turbulent market conditions.” Although Beijing seeks an erosion of dollar dominance and fears that U.S. economic instability could result in another world economic downturn, its use of the safe haven is nowhere near at an end. “While it is clear that China is keen to lessen its dependence on US government debt, experts believe that Beijing is likely to continue buying US Treasuries, as there are few risk-free low cost substitutes,” the Morning Post wrote.

Coupled with the restrictions on renminbi conversion, Chinese institutions are today far from a position of challenging current global financial relations. The U.S. investment bank Morgan Stanley recently predicted that the renminbi could represent five to 10 percent of foreign-exchange reserves by 2030, up from the current two percent. Although that would mean central banks around the world would increase their holdings of the Chinese currency, it would not amount to any real threat to dollar dominance.

No empire, or system, lasts forever

The bottom line question from all of the above is this: Will this U.S. dominance come to an end? Stepping back and looking at this question in a historical way tells us that the answer can only be yes, given that there has been a sequence of cities that have been the financial center. Centuries ago, the seat of a small republic such as Venice could be the leading financial center on the strength of its trading networks. Once capitalism took hold, however, the financial center was successively located within a larger federation that possessed both a strong navy and a significant fleet of merchant ships (Amsterdam); then within a sizeable and unified country with a large enough population to maintain a powerful navy and a physical presence throughout an empire (London); and finally within a continent-spanning country that can project its economic and multi-dimensional military power around the world (New York). 

No empire, whatever its form, lasts forever. But knowledge of the sequence of capitalist centers tells us nothing of timing. Each successive new financial locus was embedded in successively larger powers able to operate militarily over larger areas and with more force. What then could replace the U.S.? The European Union has its effectiveness diluted by the many nationalisms within its sphere (and thus nationalism acts as a weakening agent for the EU whereas it is a strengthening agent for the U.S. and China). China’s economy is yet too small and retains capital controls, and its currency, the renminbi, isn’t fully convertible. U.S. Treasury bills remain the ultimate safe haven, as shown when investors poured into U.S. debt during crises such as the 2008 collapse, even when events in the U.S. are the trigger.

There are no other possible other contenders, and both the EU and China, as already discussed, are in no position to seriously challenge U.S. hegemony.

Here we have a collision of possibilities: The transcending of capitalism and transition to a new economic system or the decreasing functionality of the world capitalist system should it persist for several more decades. Given the resiliency of capitalism, and the many tools available to it (not least military power), the latter scenario can’t be ruled out although it might be unlikely. Making any prediction on the lifespan of capitalism is fraught with difficulty, not least because of the many predictions of its collapse for well over a century. But capitalism as a system requires infinite growth, quite impossible on a finite planet and all the more dire given there is almost no place on Earth remaining into which it can expand.

Although we can’t know what the expiration date of capitalism will be, it will almost certainly be sometime in the current century. But it won’t be followed by something better without a global movement of movements working across borders with a conscious aim of bringing a better world into being. In the absence of such movements, capitalism is likely to hang on for decades to come. In that scenario, what country or bloc could replace the U.S. as the center? And would we want a new center to dictate to the rest of the world? In a world of economic democracy (what we can call socialism) where all nations and societies can develop in their own way, in harmony with the environment and without the need to expand, and with production done for human need rather than corporate profit, there would no global center or hegemon and no need for one. Capitalism, however, can’t function without a center that uses financial, military and all other means to keep itself in the saddle and the rest of the world in line.

Yes, the day of U.S. dethronement will come, as will the end of capitalism. But the former is not going to happen any time soon, however much millions around the world wish that to be so, and the latter is what we should be working toward. A better world is possible; a gentler and kinder capitalism with a different center is not.

Riots don’t change systems: There’s no shortcut to organizing

You say you want a revolution? There are no “lessons” for anyone on the Left to draw from the January 6 insurrection on the Capitol building in Washington.

If we were to set aside for a moment the fascistic nature of the mob, egged by on former President Donald Trump and his minions (which I am not suggesting we actually do), there is nothing to be taken in the abstract. Apparently there are some folks who, while certainly not condoning the political outlook of the insurrectionists, believe the example set might provide something of a template for how to achieve very different goals.

Even before we get to what should be an obvious observation — the Trumpite mob was enabled by some Capitol Police officers and law enforcement agencies largely share the insurrectionists’ politics while not hesitating to crack down violently on Left demonstrations, no matter how peaceful — governments and economic systems are not overturned by mobs storming the headquarters of the government. Any change to a better world by Left-led social movements can’t succeed without having a large majority of the population behind them with a significant number willing to act on the desire for systemic change in well thought out moves and not simply be passive supporters. There is no shortcut to organizing.

Hugo Chávez swearing in as Venezuela president in 2013 (photo by AVN, Prensa Presidencial/Venezuelanalysis)

As comforting as it may be to believe that any form of economic democracy, whether we call that socialism or something else, can simply be voted in, that path isn’t available. History has amply demonstrated that peaceful roads will meet with massive counter-attacks, from the Paris Commune in 1870 through Salvador Allende’s democratic election in 1970 and right up to today with the Bolivarian Revolution. That, on the other hand, doesn’t mean we are condemned to wringing our hands in frustration and doing nothing as capitalism continues to immiserate more people and destroy the environment.

Everything of human creation has a lifespan and everything of human creation can be changed or removed by human hand. Slavery, feudalism and other systems of the past were not natural, they were not ordained — they were products of human imagination. Capitalism is not the end of history. It is nothing more than one more system of repression, one more system of organization. It is no more permanent than slavery, feudalism or any other system of the past. If this were not so, there would not be so much frenetic activity put into convincing us that “there is no alternative.”

A serious movement needs to use a wide range of tactics and approaches wielded by cohesive organizations bringing together movements in broad alliances that provide scope for people with specific issues and oppressions to advance their goals simultaneously with rooting these in larger understandings of their structural causes 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 in terms of tackling the overall systemic problems that underlie so much of what we fight. 

Masses in motion in 1917

It’s a myth that the October Revolution in 1917 Russia was the work of a small conspiratorial clique that violently took power. A contingent of Bolsheviks walked into the Winter Palace, then moved through hallways until they found the room where the remnants of the Provisional Government were meeting and simply arrested them. Hardly a shot was fired in St. Petersburg (then known as Petrograd).

How could it have been that simple? Because the entire country was in motion and support for the deposed government had evaporated. The urban masses in St. Petersburg and Moscow, and in other cities, had swung behind the Bolsheviks. In the countryside, where political support remained with the Social Revolutionaries, there was tacit support for the revolution — peasants had actually defied the Right Social Revolutionary leadership (the SRs having just split into two) by taking land from landlords and the aristocracy and redistributing it among themselves, actions strongly supported by the Bolsheviks and the Left Social Revolutionaries, who would soon join the Bolsheviks in a coalition government.

Meeting at the Putilov Factory (1917)

All this could have happened because Bolshevik, Left SR and Interdistrict Organization agitation had turned the Russian Army, which led to the disarming of the police, who melted away. Russian soldiers and sailors took control of their units, refusing to follow orders by their officers, and even disarming them, putting control of the army and navy in socialist hands. This was most clearly demonstrated when the army chief, Lavr Kornilov, attempted a coup against the Provisional Government. Train tracks were torn up to block military movement into St. Petersburg, and Aleksander Kerensky, leader of the Provisional Government, had to call on Bolshevik militants to defend the capital. Enormous work over years, in extremely repressive conditions, was behind all this.

And what of the February Revolution that preceded the October Revolution? 

Neither the Bolsheviks or any other party played a direct role in the February revolution that toppled the tsar, for leaders of those organizations were at the time in exile abroad or in Siberia, or in jail. Nonetheless the tireless work of activists laid the groundwork. The Bolsheviks were a minority even among the active workers of Russia’s cities then, but later in the year, their candidates steadily gained majorities in all the working class organizations — factory committees, unions and soviets. The slogan of “peace, bread, land” resonated powerfully.

On one particular day, tens of thousands of women textile workers walked out, then went to the metal factories and asked the men working there to join them. They did, the strike spread and within two days a general strike took hold. In another five days, the tsarist régime was finished — one of the world’s most brutal dictatorships brought to an end. Why that one day? Why that one strike among many that had broken out in recent weeks and over years? We can never know with certainty. The most we can say is that on that particular day, Russians finally had enough. This was an amazing feat, overthrowing an autocratic régime that had endured for centuries. Here, too, police considerations are part of the equation — some of the troops sent by the tsar to put down the rebellion refused to fire or even took the side of the people.

Yet there was no spontaneity at work. Russia’s socialists had tirelessly laid the groundwork, and although the tsar’s secret police had decimated their ranks and so many had paid with exile, banishment, hard labor, jail and execution, the ideas could not be stamped out. The talks of the socialist agitators, the words of the socialist newspapers, pamphlets and fliers, resonated with the experiences of Russians — not only in the cities, but in the countryside and in the army and navy. It was this practical work, carried out over many years, that provided the people of Russia with the tools necessary to understand, and then change, their conditions. Organizing.

Masses in motion in 1979

One more example. The Sandinistas took power in 1979 at the head of a broad coalition encompassing wide sections of Nicaraguan society, despite the efforts of Nicaragua’s corporate elite — industrialists and agricultural exporters — who wanted Somoza removed but retain his extremely repressive system. The United States government, under Jimmy Carter, was working toward the same goal, having decided that Somoza had become too much of a liability. Therefore, Sandinistas argued, the task was to build its own multi-class coalition, going beyond peasants and blue-collar workers to include other social groups, including church groups and social christians.

Although Sandinistas developed an insurrectionist strategy in an underdeveloped country of the Global South, their strategy has broad applications for the developed countries of the Global North, for similar social complexities and differentiations exist there. While no theory can be transplanted whole to another place or time, organizers explicitly acknowledged, and acted upon, the fact that workers are not only blue-collar factory employees, but are also white-collar and other types of employees in a variety of settings, in offices and service positions, among others. Any revolution that seriously attempts to transcend capitalism, which means eliminating the immense power of the capitalist elite, has to include all these varieties of working people, those regularly employed and those precarious, if it is to succeed in the 21st century. 

Strikes alone would not be enough. In September 1978, Sandinista forces attacked the National Guard in several cities, including León, sparking uprisings in each of them. Although the Sandinistas were forced to retreat, thousands left with them in long columns, demonstrating that they would not abandon the people who supported them and the cause of building a better world. 

On June 4, 1979, Sandinista calls for an “insurrectional general strike” shut down the country. Coordinated attacks began in a series of cities, isolating units of the National Guard and forcing the Guard to stretch its forces too thin. By July 16, almost every major city in Nicaragua was in insurgent hands and the régime was about to topple. The U.S. government this day was still trying to negotiate a deal to block the Sandinistas from assuming power with the Roman Catholic archbishop of Managua, various members of the anti-Somoza corporate elite and the Junta of National Reconstruction — this last maneuver was an effort to get the Junta, the government in waiting that had recently been formed, to add a member of the National Guard and a member of Somoza’s Liberal Party. With Nicaraguans solidly behind them, the Sandinista could easily say no to the U.S. maneuvers.

On July 17, dictator Anastasio Somoza Debayle fled the country after years of waging war on his country’s people and muscling in on so many businesses that even sizable numbers of Nicaragua’s bourgeoisie wanted him gone. Years of tireless organizing by Sandinista militants, often at the risk of their lives, led to that day. Two days later, on July 19, the Sandinistas marched triumphantly into Managua, the capital, having already captured control of much of the country in the late stages of the insurrection.

This success was not the product of a random mob attacking a government building, but patiently building a mass movement that became strong enough to topple a deeply corrupt, extraordinarily brutal dictatorship.

A disorganized group of people, even if they had the goal of bringing into being a better world that we would agree with, has no chance of success. None. Trying to create an alternate history or counter-factual by substituting good people for the fascists acting out an absurd fantasy is a sterile exercise, and one undertaken in an absence of historical knowledge. It would be a service to humanity and the health of the Earth if capitalism and the governments upholding it through violence were swept into the dustbin of history. But that will take monumental organization, getting a healthy majority to back the vision of a better world, linking hands across borders and solidarity across movements. That is as far removed as can be from a mob egged on by an aspirant fascist.

Private sector is “efficient” only at extracting money from public

There is nothing that capitalists won’t grab if they see a possibility to score a profit. Not even the most basic needs for human life, such as water, are exempt.

A favorite tactic for grabbing what had once been in the public domain and converting it into private profit is the “public-private partnership.” A tactic sadly abetted by the world’s governments, as the name implies.

Public-private partnerships (PPPs), a decades-long string of disasters for the public but often a bonanza for the private, have left behind a long trail of one-sided results in water systems, electricity distribution, sewers, highways, hospitals and other infrastructure. The latest report testifying to the damage wrought by PPPs comes to us courtesy of the European Federation of Public Service Unions (EPSU), a federation of 8 million public service workers from over 250 trade unions across Europe, and the European Network on Debt and Development (Eurodad), a network of 49 civil society organizations from 20 European countries “working for transformative yet specific changes to global and European policies, institutions, rules and structures.”

The Palace of Westminster (photo by Andrew Dunn)

The EPSU/Eurodad report, “Why public-private partnerships (PPPs) are still not delivering,” paints a damning picture. The report declares:

“PPP advocates claim they bring financing, efficiency and innovation. But real-life experience reveals a different picture. The following points outline eight reasons why PPPs are not working: 1. PPPs do not bring new money – they create hidden debt 2. Private finance costs more than government borrowing 3. Public authorities still bear the ultimate risk of project failure 4. PPPs don’t guarantee better value for money 5. Efficiency gains and design innovation can result in corner-cutting 6. PPPs do not guarantee projects being on time or on budget 7. PPP deals are opaque and can contribute to corruption 8. PPPs distort public policy priorities and force publicly run services to cut costs.”

The EPSU/Eurodad report defines PPPs as “long-term contractual arrangements where the private sector provides infrastructure assets and services that have traditionally been directly funded by government, such as hospitals, schools, prisons, roads, bridges, tunnels, railways, and water and sanitation plants, and where there is also some form of risk sharing between the public and the private sector.” There may be risk sharing on paper, but in reality even this definition is a little too generous toward PPPs — in almost all cases, contractual clauses put the risk squarely on the public, and when the private company that has taken over a previously public good proves unable to manage or goes out of business, it is the public that pays.

The paper drew on examples across Europe, with some of the worst examples coming in Britain. Privatizing public services leads to higher costs, reductions in the quality of service and lengthier periods in completing construction. All of these results, of course, are directly opposite of what incessant capitalist propaganda continually blares. Although the EPSU/Eurodad report didn’t speculate as to why these results occur, it takes little imagination to see the reasons: Corporations exist to make the biggest profit regardless of social cost while governments need only provide a reliable service without having to generate seven- and eight-figure salaries for executives and windfalls for stockholders and other speculators.

It’s not profits above all else, it’s nothing but profits

Consider the words of Milton Friedman, godfather of the Chicago School of economics whose words are widely followed in corporate boardrooms and in financial publications. He put it plainly in an interview with author Joel Bakan in the context of a former BP chief executive officer suggesting (however disingenuously) the company would make environmental concerns more important:

“Not surprisingly, Milton Friedman said ‘no’ when I asked him how far John Browne could go with his green convictions. … ‘He can do it with his own money. If he pursues those environmental interests in such a way as to run the corporation less effectively for its stockholders, then I think he’s being immoral. He’s an employee of the stockholders, however elevated his position may appear to be. As such, he has a very strong moral responsibility to them.’ ”

That is the standard of the corporate world: Profits for speculators, period. No other considerations, no matter how flowery their public relations concoctions may be. There are no exceptions because a service or product is necessary for human life.

To return to the EPSU/Eurodad report, a much higher cost of financing was one cause of higher costs for the public to access previously public goods. Noting the hidden debt in these deals, the paper said, “In a PPP, instead of the public authority taking a loan to pay for a project, the private sector arranges the financing and builds the infrastructure, then the public sector pays a set fee over the lifetime of the PPP contract. In some cases, users also pay part or all of the fee directly to the private sector company (e.g. toll roads).” The United Kingdom National Audit Office “found that the effective interest rate of all private finance deals (7%-8%) was double that of all government borrowing (3%-4%).”

The Grand Palais in Paris (photo by Thesupermat)

An even larger differential was found in France: “A particularly vivid example was the Paris Courthouse PPP, signed in 2012, which featured an investment of €725.5 million and no less than €642.8 million in financing costs. The French Court of Auditors found that the interest rate for borrowing for the PPP was 6.4 per cent, while in 2012 the weighted average rate for government bond financing in the medium-long term was 1.86 per cent,” the report said, adding that operating costs were also higher. 

Another example is a Stockholm hospital that cost €2.4 billion instead of the projected €1.4 billion. The hospital was not only completed four years later than scheduled, but a “design competition” resulted in “operating theatres not being adapted for operations; the risk of medicines being destroyed because of medicine rooms being too warm; and physicians having to carry administrative material in backpacks because of the lack of space for administrative tasks.” One conclusion from this poor result is that “the high level of complexity, together with the private partner’s interest in cost-cutting as much as possible, can easily result in undesirable corner-cutting.”

The report concludes that “What decades of experience has shown is that PPPs come at a high cost and are not delivering the expected benefits.” 

If you can sell it, they will buy it

PPPs are particularly common in Britain, an unfortunate development that is not the cause of any one party. 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 revealed that the British government owed more than £222 billion to banks and businesses as a result of private finance initiatives. Jonathan Owen reported:

“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.’ ”

The Independent article reported that 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. Nor is health care exempt: A 2019 report by the Progressive Policy Think Tank found that there are English hospitals forced to divert one-sixth of their income to paying back private finance initiatives, with National Health Service trusts paying more than £2 billion on such repayments per year, “taking money away from vital patient services.” For just £13 billion of private investment, the NHS must pay back £80 billion! Quite a windfall for banks.

Naturally, such financial legerdemain is not limited to any particular country. Here is just a small sampling of outcomes:

  • During the course of a 25-year contract with Suez and Veolia, water rates in the city of Paris doubled after accounting for inflation. Thanks to a secret clause, the two companies received automatic price rises every three months. When the contract finished, Paris re-municipalized its water system. Despite the short-term expenses of doing so, the city saved about €35 million in the first year and was able to reduce rates by eight percent.
  • A privatization of the Buenos Aires water and sewer systems resulted in chronic failures to meet contractual obligations, repeated demands that the contract be renegotiated (granted by the neoliberal governments of the 1990s), failure to meet water-safety standards, worsening pollution of underground water sources, and price increases over the first decade of the contract 12 times that of inflation. The Argentine government then had to spend years raising legal challenges to take back the system even though the private company was in obvious default of its contractual obligations.
  • The German city of Bergkamen (population about 50,000) reversed its privatization of energy, water and other services. As a result of returning those to the public sector, the city began earning €3 million a year from the municipal companies set up to provide services, while reducing costs by as much as 30 percent.
  • A report by Food & Water Watch found that investor-owned utilities in the United States typically charge 59 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, nearly tripling on average after 11 years of private control. Corporate profits, dividends and income taxes can add 20 to 30 percent to operation and maintenance costs.
  • A study by University of Toronto researchers of 28 Ontario public-private partnerships found they cost an average of 16 percent more than conventional contracts. Elsewhere in Canada, the Sea-to-Sky Highway in British Columbia will cost taxpayers C$220 million more than if it had been financed and operated publicly, and the cost of a project at the Université de Québec à Montréal was doubled to C$400 million.

Water as a commodity rather than a human right

That even water is a commodity is no surprise when corporate leaders consider it just another product that should have a price, most notoriously enunciated in 2014 when the chairman of Nestlé S.A., Peter Brabeck-Letmathe, issued a video in which he denounced as “extreme” the very idea of water being considered a human right. And not only water — various schemes exist to destroy the U.S. Postal Service in the interest of corporate profit.

There are even corporate executives who want to privatize the weather. No, that’s not in the realm of science fiction. The head of a private weather forecaster, AccuWeather, has repeatedly lobbied to prohibit the U.S. government’s National Weather Service from issuing forecasts! Under this scenario, the Weather Service would hand all of its data to private companies, who would then issue forecasts, while of course letting taxpayers foot the bill for the data. One of the U.S. Senate’s dimmest bulbs, fundamentalist Rick Santorum (thankfully no longer in office), once promoted a bill to do just that. And, incidentally, the National Weather Service issues forecasts more reliable than those of AccuWeather.

Photo by Marlon Felippe

Public-private partnerships are one of the surest ways of shoveling money into the gaping maws of corporate wallets. 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. 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.

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.

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. Capitalism in action.

The threat of fascism rears its head in Washington

Let’s not mince words: Wednesday’s storming of the United States Capitol building was the work of fascism. That it didn’t and couldn’t succeed, and that Donald Trump is days from being out of the White House, should not blind us to the reality of larger social forces at work.

The Orange Menace possibly finished off his personal political prospects with his pathetic attempt at a putsch — although I suspect the shameless toadying of Republicans seeking to capture his base for future elections will continue — but, as I have already written, Trump’s base isn’t going anywhere. Neither are Trump’s fans among the police.

By midnight Wednesday, police had arrested a total of 52 people, counting from Tuesday afternoon. Contrast that to last summer’s Black Lives Matter protests, when at least 430 people were arrested.

Consider the difference. White people storm an important seat of government, terrorize those inside and stage the equivalent of an armed insurrection, yet it takes hours for police reinforcements to arrive and those who don’t leave are allowed to mill around for hours past a curfew. Police claim they were surprised by the size of the crowd even though Trumpites had announced their intention days ahead of time, the Orange Menace himself told his followers to go to the Capitol that morning and Trump consigliere Rudy Giuliani called for “trial by combat.” 

In contrast, peaceful protestors motivated by the injustices of police brutality and indifference to Black lives walked down streets and are met with massive force and indiscriminate arrests. Multiple federal and local law enforcement agencies brought in tanks and other vehicles and built an eight-foot-tall fence surrounding Lafayette Park across the street from the White House. And that show of force was hardly limited to Washington. By June 4, less than two weeks after George Floyd’s murder by police, more than 10,000 people had been arrested across the U.S., according to an Associated Press tally. Here’s what The Associated Press had to say that day:

“As cities were engulfed in unrest last week, politicians claimed that the majority of the protesters were outside agitators, including a contention by Minnesota’s governor that 80 percent of the participants in the demonstrations were from out of state. The arrests in Minneapolis during a frenzied weekend tell a different story. In a nearly 24-hour period from Saturday night to Sunday afternoon, 41 of the 52 people cited with protest-related arrests had Minnesota driver’s licenses, according to the Hennepin County sheriff. In the nation’s capital, 86 percent of the more than 400 people arrested as of Wednesday afternoon were from Washington, D.C., Maryland and Virginia.”

Those “outside agitators” must have had sophisticated teleporting equipment to have been in so many cities at once. What a pity they haven’t shared it with us.

Police show their preferences

During Trump’s inaugural, more than 200 protestors were arrested, including journalists. Earlier this year, tear gas and force were used to disperse peaceful demonstrators just so Trump could wave a bible in front of a church. So we have a pattern here.

The skin complexion of the demonstrators has much to do with these different approaches on the part of law enforcement. We can all imagine the body count that would have resulted had a Black group decided to storm the Capitol. But political affiliation is not absent. It’s no secret that police heavily favor Trump and are well to the right of the populations they supposedly serve, and police unions across the country took a few minutes off from screaming for officers to be entirely beyond accountability to endorse Trump.

Pictures of police posing for selfies with the invaders inside the Capitol began circulating by Wednesday evenings, and videos circulated showing officers allowing the mob through a gate, facilitating the invaders’ ability to get inside the building. Anybody who was watching the television coverage as the events unfolded, as I did, could see that the Capitol invaders were handled with kid gloves. Police were seen walking with the invaders down the steps of the Capitol and only hours later slowly pushed the mob away with periodic advances, taking care to give the mob plenty of time to move back.

Nor was the storming of the Capitol a spontaneous event. As housing and feminist activist Fran Luck noted, there was the appearance of preparation:

“While watching coverage of the terrorist incursion into Congress today, when I saw the group of burly men effortlessly scale a 20+-foot wall surrounding the Capitol, it occurred to me that they must have had military training to do this — it’s not easy to climb straight up vertically without much to hold on to — but it is what they teach you to do in army basic training. I also noticed they were dressed similarly, with flag handkerchiefs hanging out of their back right-hand back pockets. In my opinion, this was a staged action — probably rehearsed by a ‘militia’ and consciously created for future propaganda for the purpose of attracting new recruits This might also apply to the photo they released of the man wearing a MAGA hat and holding a rifle while sitting at Nancy Pelosi’s computer; it could be used to convey the message: ‘Look how far we got this time — next time we’ll be ready to go all the way!’ ” 

Again, a most sharp contrast to Black Lives Matter protests, repeatedly violently attacked by police. And police violence at demonstrations for Left causes is routine. Again, it is impossible not to notice the bias in policing. Recall the 2016 standoff in an Oregon national wildlife refuge, when a pack of White far right militia members took over the refuge’s headquarters, seeking to spark a national uprising, yet were allowed to come and go as they pleased and to destroy Native American artifacts.

White privilege was fully on display during Wednesday’s Capitol invasion, in addition to police demonstrating plainly their political preferences.

Aspiring fascist leaders need violent mobs

“What else is new” shouldn’t be our response. The conclusion to be drawn from Wednesday’s events is that we are almost certainly at the beginning of a fascist upsurge. There is no other conclusion to be drawn. Trump doesn’t have the intelligence or sufficient ruling-class backing to be a fascist dictator, and we can only hope he’ll be seeing the inside of a courtroom soon and then the inside of a prison. But it is quite possible another demagogue will arise, and the next one might not be such a buffoon. 

That is only part of the equation — there can be no fascist movement without street thugs and followers willing to use violence. The shock troops were on display Wednesday. Not nearly enough to pose an immediate threat and certainly too few to actually take over the Capitol even with police assistance. But with millions believing Trump’s lies and ready to move on his word, a latent threat exists. And, perhaps, those shock troops might transfer their loyalties to another wanna-be dictator, one perhaps with more ability.

Nor can we take solace in the fact that formal democracy remains the preferred method of governing; with most United Statesians still willing to believe they can better their circumstances through electoral politics, there is no need for U.S. industrialists and financiers to impose an outright dictatorship, especially as they continue to have an iron grip on the country’s government, mass media and institutions, and exert decisive influence over both major political parties.

The threat of fascism always looms in the background as long as capitalism exists. If a capitalist ruling class comes to a consensus that dictatorship is the only way to maintain their profits and power, then they are willing to unleash fascism, as happened in Italy, Germany, Spain, Chile, Argentina and other countries across the 20th century. The imposition of fascism arrives with shock troops — street thugs — augmented by police and the military, although sometimes, as was the case in Chile and Argentina, the street thugs augment the police and military. 

The street thugs following Trump have now shown their willingness to spring into action. Are the rest of us willing to step up and out-organize them?