Envisioning an evolutionary path toward a democratic economy

By Pete Dolack

It is never sufficient in itself to be against something. Activists seeking to bring a better world into being have to be for something. That is no easy task for people advocating for something better than today’s world of corporate domination, harsh austerity and races to the bottom.

It is not an easy task because capitalists have saturated the world’s cultures with their ideologies, and the 20th century’s biggest anti-capitalist challenge — state ownership of the means of production on the model of the Soviet Union and its Central European satellite states — has irretrievably lost credibility. Yet the capitalist triumphalism that smoothly maintains nothing could possibly be wrong with our modern consumer paradise, which continues essentially unabated despite four years and counting of deep malaise, can not mask profound structural problems.

The endless drive on the part of capitalists to increase profits that leads to continual movements of production to new sources of cheaper labor; the continual downward pressure on wages that leads to an inability of people to be able to buy what is produced; the continual despoiling of the environment under the pressure of ever more intense competition; and the finiteness of the Earth’s resources in the face of a structural need for limitless expansion all impose limits on the capitalist system.

Grandiose plans to strip-mine the Moon and the asteroid belt aside, humanity will have to develop a more stable, more humanistic system of production and consumption. A realistic plan to guide the world out of runaway capitalism and into a new system that is sustainable is necessary.

Can such a sustainable, more humanistic system evolve out of capitalism itself? Gar Alperovitz, in his newly re-issued book America Beyond Capitalism,* firmly believes the answer is yes.

Explicitly attempting to find an intermediate course between reform and revolution, Professor Alperovitz has laid out a program designed to gradually bring large corporations under public control and therefore make them socially accountable through a “Public Trust” system whereby public institutions buy progressively larger portions of corporations’ stock. Concomitantly, cooperatively owned enterprises rooted in their communities and enterprises owned by local governments would be nurtured; community-development organizations expanded and funded through progressive taxation; and long-term strategies would be implemented to capture the new wealth that will be created as productivity continues to increase in the future.

Details of many of these plans are not yet worked out. The details of a better world can only be worked out in its creation, and therefore Professor Alperovitz provides conceptions rather than details. New ideas have to begin somewhere — conceptions based on real-world conditions are the beginning place for serious ideas. Is the professor’s optimism warranted? That is a difficult question to answer, and one that this review will return to presently.

Professor Alperovitz introduces the term “Pluralist Commonwealth” to encompass his ideas of leveraging the structures of modern capitalism for a transition to a democratic, decentralized system in which the wealth created in production would be distributed fairly; economic power has been wrested from a small class of capitalists so that economic and political power is no longer concentrated; and the length of the workweek is gradually reduced so that everybody has the time and opportunity to participate in community decision-making.

None of the pieces of the Pluralist Commonwealth system constitute leaps or revolutionary breaks. Instead, the author assembles an impressive collection of ideas and institutions already in existence; ideas for building upon these; proposals for new institutions and structures that flow out of existing ones; and concrete measures to break down racial, gender and other disparities. He is not shy about analyzing an ideologically diverse collection of thinkers and writers: In one three-paragraph stretch, for instance, he quotes favorably Friedrich Hayek, Hannah Arendt, Jane Jacobs and W.E.B. DuBois.

But fear not those of you who blanch at the mere mention of neoliberal godfather Hayek (a number that would include myself). Professor Alperovitz has assembled a damning array of statistics to illustrate the debilitating inequality of the United States — among them, that one percent of U.S. households hold half of the entire country’s wealth; that corporate taxes accounted for 35 percent of federal receipts in 1945 but only seven percent in 2003; and that 300 multi-national corporations account for 25 percent of the world’s productive assets. With such concentrations of economic power comes instability at the community level because corporate power can shutter enterprises that are depended on for jobs, he writes:

“A central question concerns the economic underpinnings of local democracy. It is obvious, for instance, that active citizen participation in local community efforts is all but impossible if the economic rug is regularly pulled out from under them. What, precisely, is ‘the community’ when citizens are forced to move in and out of specific geographic localities because of volatile local economic conditions? Who has any real stake in long-term decisions? That a substantial degree of economic stability is one of the critical preconditions of local involvement is documented in several important studies. …

A related issue involves the power relationships that set the terms of reference for municipal government. Numerous scholarly studies have demonstrated that local government decision making commonly is heavily dominated by the local business community. Commonly, too, the thrust of decisions favorable to business groups radically constrains all other choices. The use of scarce resources to develop downtown areas, and especially to attract or retain major corporations, inevitably absorbs funds that might alternatively be used to help low- and moderate-income neighborhood housing, schools, and community services.” [page 47]

That the vast size and reach of corporations is debilitating to democracy is obvious; Professor Alperovitz even quotes conservatives to that effect. But he goes beyond the size of gigantic enterprises to the gigantic size of the United States, arguing that the very size of the U.S. (and its projected population increase this century) is a hinderance to democracy as well. He asks:

“[I]s it really feasible — in systemic and foundational terms — to sustain such values [equality, liberty and democracy] in a very large-scale, centrally governed continental system that spans almost three thousand miles and includes almost 300 million people? And, if not, how might a democratic nation ultimately be conceived?” [page 63]

Following up on this idea later in the book, he concludes that the “regional” level would be the appropriate level to deal with economic and political issues. Most U.S. states contain too small a population to solve large problems on their own; Professor Alperovitz conceives a region as the equivalent of a large-population state such as California or Texas, or a group of states such as New England, seeing such large states or groupings as the equivalent of stable, midsized European Union countries such as the Netherlands.

Underlying this advocation of regionalization is the idea that decentralization is more conducive to local democracy. To support his argument, he cites U.S. Supreme Court decisions overturning federal laws in favor of state powers and the increasing assertiveness of state governments in challenging federal laws.

But here we should pause for further thought. That trend, if anything, is stronger than when America Beyond Capitalism was originally written in 2005, but these Supreme Court decisions have been ideological and political pronouncements backing conservative attacks on federal protections, not legal decisions or responses to popular pressure. Frequently, the court strikes down state laws that provide protections beyond federal law but that are opposed by the Right on ideological grounds.

Both political devolution, as a concept, and Professor Alperovitz’s contention that democracy can’t flourish unless it is strong at the local level are sound, but it is at our peril that we fail to distinguish properly between the current conservative campaign to impose an extremist agenda masquerading under the guise of “states’ rights” and a genuine grassroots movement to promote local control and progressive change.

The heart of America Beyond Capitalism’s concept of economic and political democracy is the “Pluralist Commonwealth.” The author, in broad strokes, provides an interesting, worked-out conception of gradually bringing large-scale corporations under public control through acquisitions of their stock. There is a clear goal in mind:

“The schematic model … prioritizes a variety of strategies to undergird local economies and thereby establish conditions favorable to nurturing local civil society associations and to increasing local government’s power to make meaningful decisions. Partly to achieve such local democracy objectives — but for much larger reasons as well — the model also projects the development over time of new ownership institutions, including locally anchored worker-owned and other community-benefiting firms, on the one hand, and various national wealth-holding, asset-based strategies, on the other. These would ultimately take the place of current elite and corporate ownership of the preponderance of large-scale capital.” [page 70-71]

These ideas come with a freely offered, and appropriate, caveat that the details need to be worked out. Nonetheless, the strategy of carrying out a program of bringing large corporations under public control through acquiring controlling blocks of their stock could have been articulated with greater clarity. At the national level, a new institution given the generic name “Public Trust” is conceived to “oversee the investment of stock on behalf of the public, as state and other pension boards commonly do today.” Proceeds could be directed toward individuals, local or higher-level governments, or funding of public services.

Professor Alperovitz projects that:

“Over time, a fundamental shift in the ownership of wealth would slowly move the nation as a whole toward great equality directly — through, for instance, worker-owned enterprises; and also indirectly — through a flow of funds from the larger asset-based strategies and investment on behalf of the public.” [page 71]

The capital needed to acquire the stock of large corporations would be assembled from higher taxation of elite incomes and from setting up public banks that would loan money that would accrue from profits and dividends of stock held by them.

“The Pluralist Commonwealth structurally tethers large-scale firms at the top by lodging stock ownership in a Public Trust entity accountable to (and open to scrutiny by) the public — and it steadily expands four major vectors of activity and structure (robust community democracy, steadily increasing free time, greater citizen equality, regional decentralization) that over the long haul offer expanding opportunities for democratic control from the bottom. Additional elements of the model include new public chartering requirements, the addition of specific stakeholders to corporate boards, and the democratization of corporate structures from within.” [pages 73-74]

In addition to the gradual assumption of control of large corporations envisioned above, the book also advocates worker-owned cooperatives (which can be anchored to local institutions such as hospitals and universities that can steadily buy the cooperatives’ goods and services); companies owned by municipal and state governments (utilities and banks are common examples that provide lower rates and profits to their communities); and community-development organizations (which operate a variety of businesses that plow proceeds back into their communities).

Each of the examples in the above paragraphs already exist, and can be expanded. City-owned power companies are already common and generally offer lower rates than traditional companies. A network of cooperatives anchored to local institutions have been successful in Cleveland, and larger, freestanding cooperatives exist in a myriad of industries.

A significant change in the political climate of the United States would be a pre-condition of the “Pluralist Commonwealth” coming to fruition. Citing an abundance of polls, Professor Alperovitz is optimistic that latent public support exists for such ideas. He also believes that the mounting costs of health care, Social Security and retirement in general will force a re-thinking of existing structures and ideas, bringing to the fore new concepts of ownership and control.

The “Pluralist Commonwealth” concept rests in part on the vast increases in wealth and productivity of the past century and a half to continue throughout the 21st century. That, too, should give us pause for thought. The author, on the one hand, unsparingly points out the unsustainability of U.S. consumption but on the other hand situates his wealth-sharing strategy within a forecast of the dramatic growth of capitalism to continue unabated.

He notes the sixfold increase in per-capita production during the course of the 20th century, and projects a similar sixfold increase for the 21st century that would result in a cornucopia of wealth for everyone. Is another such leap possible? Given that natural resources are, or are soon to be, dwindling, and that successive introductions of machinery tend to yield declining rates of increase in productivity, it is reasonable to doubt the mature capitalism of today will produce the same gains for another century. The ongoing stagnation of the advanced capitalist countries, and that the strongest growth is invariably found in developing economies, adds additional doubt.

Then again, there is no reason why the wealth that exists today shouldn’t be shared far more equitably; if the present-day per-capita income were merely to keep pace with inflation or rise slowly, there would be plenty to go around.

Earlier, I asked if the optimism behind the “Pluralist Commonwealth” is warranted. The thought that kept leaping at me is this: The program, particularly as regards to the steady acquisition of stock in large corporations so that control of them is wrested from executives and speculators and given to the public, is dependent on capitalists sitting back and letting their power be taken away. There is absolutely no precedent of any capitalist class acting that way, and none would willingly consent to it.

Such a peaceful evolution would require not only a suite of new laws, it would also require huge organization, mass mobilizations and a very large majority that would retain their energies and motivation for long periods of time, perhaps decades. As just one example, corporations would have to be forced to issue new stock that would be sold to the Public Trust — a system-altering concept that would require an extremely powerful movement. Such a movement can easily be conceived, and would be articulating a concrete goal that is tangible and imaginable as a linear evolution from present-day economic structures.

It is possible to argue that powerful movements are also a necessary precondition for a revolution to be successful. Could the aim be higher? Could a successful completion of an evolutionary program build momentum for still greater changes? That is unknowable today. But the “Pluralist Commonwealth” program has the concrete benefit of providing a positive program of change. If there is to be any meaningful change it will have to come as a result of great struggle.

That acknowledgment is not missing from America Beyond Capitalism. Professor Alperovitz writes that people must “confront the emerging logic that suggests that either economic pain and social decay will continue” [page 213] or that diverse groups begin work on long-term systemwide change. He is appropriately realistic on the need for a high level of activism and organization to bring his ideas to fruition, while at the same time offering a set of concrete goals. Although the precedents are not a snug fit because transcending capitalist relations threatens the roots of the economic system (and those who profit well from it) in a way that social movements do not, he draws on the experiences of past struggles to conclude on an optimistic note:

“Long before the civil rights movement, there were many years of hard, quiet, dangerous work by those who came before. Long before the feminist explosion there were those who labored to establish new principals in earlier decades. It is within the possibilities of our own time in history that — working together and openly charting an explicit new course — this generation can establish the necessary foundations for an extraordinary future and for the release of new energies.

It may even be that far-reaching change will come much earlier and much faster than many now imagine.” [page 240]

Regardless if the transcending of capitalism is accomplished through a revolution, through struggling to rebuild in the ruins after a collapse or through an evolutionary change as envisioned in America Beyond Capitalism, a long, organized struggle will be necessary. The sooner the task begins, the less dangerous and difficult (comparatively) the change should be: Organizing change today is a hard enough task; having to do so in conditions of total collapse would be a nightmarish task none of us would like to contemplate.

* Gar Alperovitz, America Beyond Capitalism, second edition [Democracy Collaborative Press, Takoma Park, Maryland, USA and Dollars and Sense, Boston 2011]


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

By Pete Dolack

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The country that said no: Argentina’s path out of austerity

By Pete Dolack

On a daily basis, we are bombarded with messages in the corporate media that any European Union country defaulting on its debt would constitute armageddon. Greece/Ireland/Spain/choose your country must pay back the banks in full, no matter the social cost, we are told ad infinitum.

I would ask readers to contemplate the unthinkable, except for the fact that not sacrificing entire countries for the sake of investment bankers’ bonuses, speculators’ profits and corporate windfalls is not really unthinkable. Countries have done it. One that did, a decade ago, was Argentina. I hope I will not induce any sudden heart attacks, but armageddon was not the result. No fire fell from the sky.

Quite the contrary, Argentines soon were far better off by saying no to the pitiless austerity that had been imposed on them.

There are lessons to be learned, with the usual caveats that every country is different. Other countries might not do as well as did Argentina, and Argentines did suffer considerable short-term pain. But, as people in other countries today ask: Could anything have been worse than endless austerity?

As with the current economic crisis that has reached dramatic points, Argentina’s crisis had a long buildup. The military dictatorship of 1976 to 1983 laid waste to the Argentine economy while killing, torturing, “disappearing” or forcing into exile hundreds of thousands. The military had been given a free hand to launch its “dirty war,” a campaign of terror against opponents of neoliberalism augmented by two fascist groups that operated with impunity. Upon seizing power, the military handed control of the economy to a prominent industrialist and landowner, who heavily favored the largest enterprises, outlawed strikes and banned the union federation. Real wages fell by 50 percent and gross domestic product fell by double digits. The result was a dramatic increase in income inequality and a fivefold increase in foreign debt. The restoration of civilian rule and nominal democracy put an end to government terror, but not to economic policy.

Banks underwriting Argentine government bonds earned an estimated US$1 billion in fees between 1991 and 2001, profiting from public debt.* During the same years, foreign debt continued to grow, speculators inflated a stock-market bubble, social benefits were reduced, and credit cut for small and midsize businesses. Wages were cut further, first by inflation and then by a wage freeze. Argentine exports steadily became less competitive because the peso was fixed at a one-to-one rate with the U.S. dollar; Argentina could not give a boost to its exports because the fixed exchanged rate did not allow the devaluation that capitalist competition had demanded.

In conjunction with the austerity programs, Carlos Menem, who was president for most of the 1990s, sold off state enterprises at below-market prices. This fire sale yielded US$23 billion, but the proceeds went to pay foreign debt mostly accumulated by the military dictatorship — after completing these sales, Argentina’s foreign debt had actually grown. The newly privatized companies then imposed massive layoffs and raised consumer prices.

By 1997, about 85 percent of Argentines were unable to meet their basic needs with their income; the average income was less than one-half of what was necessary to meet basic needs for a family of four and the percentage of workers who were unemployed or underemployed was about 30 percent.** Because these austerity programs were implemented by a Peronist president — traditionally seen as protectors of labor and social services —  working people became ideologically confused and therefore were slow to fight back or coalesce behind anti-austerity political movements. The military junta had also physically wiped out a generation of experienced activists.

An upsurge of unrest finally brought an end to the punishment of Argentines. In December 2001, the government ordered bank accounts frozen and limited the payment of wages and pensions so that the money could be diverted to making interest payments on foreign debt; the government would have defaulted otherwise. A ferocious and broad protest movement mushroomed as Argentines refused to cooperate, and the country went through five presidents in two weeks.

The people had no choice but to find solutions themselves, and did: They set up barter clubs and created a system of popular assemblies, creating dual government structures at the local level. Workers in factories that had been shut down simply took them over, restarting production and converting them into cooperatives. A new president, Néstor Kirchner, suspended debt payments.

These developments soon reduced unemployment from 50 percent to 17 percent and created a budget surplus. The outstanding debt, however, remained — had Argentina resumed scheduled payments in 2005, interest payment alone on the debt would have consumed 35 percent of total government spending, according to an analysis by Alan Cibils published in Z Magazine. Kirchner announced that Argentina intended to pay only 25 percent of what was owed and any group that refused negotiations would get nothing; in the end, Argentina paid 30 percent.

Those moves did not constitute a magic wand, and recovery was slow for many. But over the longer term, Argentina has done well — its gross domestic product nearly doubled from 2002 to 2011, representing the fastest growth in the Western Hemisphere, according to a report published in October 2011 by the Center for Economic and Policy Research.

The Center reports that:

  • Poverty has fallen from almost half of the population in 2001 to approximately one-seventh of the population in early 2010.
  • Income inequality significantly declined. In 2001, those in the 95th percentile had 32 times the income of those in the fifth percentile. By early 2010, that figure fell by nearly half, to 17.
  • Unemployment has fallen by over half from its peak, to eight percent.
  • Social spending rose from 10.3 to 14.2 percent of gross domestic product.
  • In 2009, the government expanded the reach of its social programs, launching the “Universal Allocation per Child,” which resulted in significant reductions in infant and child mortality from 2001 to 2010, somewhat more than in similarly situated countries.

The Center’s report notes that “Argentina’s rapid growth has often been dismissed as a ‘commodity boom’ driven by high prices for its agricultural exports such as soybeans, but the data show that this is not true.” The value of Argentina’s manufacturing exports accounted for more than triple the value of its agricultural and forestry exports. Moreover, exports of agriculture, hunting, fishing and forestry products accounted for a steadily smaller percentage of Argentina’s economy during the past decade — those exports accounted for 5.0 percent of overall gross domestic product in 2002 as compared to 3.7 percent in 2010.

“The recovery is driven by consumption and investment (fixed capital formation),” which together accounted for more than 70 percent of Argentina’s growth during the past decade, the report states.

That success came despite Argentina still being shut out of international lending markets, having little direct foreign investment and continuing to be subject to hostility from the United States and the European Union. The E.U. this week filed suit in the World Trade Organization against Argentina over import restrictions, encouraged by the U.S. An arbitration board based in Washington has repeatedly awarded energy companies hundreds of millions of dollars because the enterprises suffered losses when the peso was devalued in 2002 and regulators refused them steep rate increases. Never mind that market forces were at work — it was the very same markets that these companies swear to live by that caused the fall in value of the peso while it was government intervention that had artificially propped up the peso’s value previously.

Economist Joseph Stiglitz, in a 2007 lecture, said of the arbitration rulings:

“It is clear that maintaining utility prices in dollars — while the rest of the economy was undergoing pesoification — would have been a huge windfall for the utilities. It would have represented a vast redistribution of wealth from the rest of the economy to the utilities — resulting in an unfair and inequitable outcome. It would have harmed the economy, depressing output even further.”

Critical for Argentina’s turnaround was defaulting on its debt, freeing money for investment and social services. Also a factor was eliminating the peso’s peg to the U.S. dollar. Valuing one peso as equal to one dollar was exactly as if Argentina used a common currency like the euro; Argentina’s currency was overvalued and all adjustments imposed by capitalist competition therefore had to be made internally — in other words, harsh austerity.

Once Argentina allowed the value of its peso to be set by market forces, the country not only saved the money that had been spent in foreign exchange markets to prop up the peso’s value (expensive market interventions maintain currency pegs, not government fiats), but the strong decline in the value of the peso made Argentina’s exports cheaper. It also made imports into the country much more expensive. From a consumer perspective that is a harsh burden but within the logic of capitalism in which Argentina had to operate it acted as a spur to internal production. If it is too expensive to buy from another country, the alternative is to make it yourself.

The need to restart production and put themselves back to work also induced workers in plants that had been shut down or were being asset-stripped to take them over. Community support enabled these workers to maintain their operations in the face of government hostility. The recovered enterprises became cooperatives that in turn were managed with community benefit in mind.

Argentina’s industry became more competitive and because many more Argentines were back to work, there was more domestic demand. Consumer demand is ultimately the driving force in a mature capitalist economy. According to the World Bank, household consumption accounted for 60 percent of Argentina’s gross domestic product, a typical figure. Under austerity, when unemployment sharply rises and those who retain their jobs are paid a lower wage,  the economy contracts because people don’t have money to spend.

Working people also don’t pay as much taxes when their wages decline. Corporations and the rich are paying less taxes, too — because they refuse to pay them, much preferring to lend money at interest rather than shoulder responsibility for the society that enables them to accumulate vast wealth — so governments are forced to borrow. But as less revenue comes in, more must be borrowed, and the price extracted by the corporations and the wealthy who lend is to demand more austerity to ensure they will be repaid in full, with interest. Unemployment rises more, more debt is accumulated, the economy contracts further, and round and round it goes until working people rise up to force their government to stop.

That is what happened in Argentina in 2002. That is what is needed to happen in many more countries today.

* This and the following paragraph based on Pablo Pozzi, “Popular Upheaval and Capitalist Transformation in Argentina,” Latin American Perspectives, September 2000, pages 65-70; Colin M. MacLachlan, Argentina: What Went Wrong, pages 169-171 [Praeger, 2006]
** This paragraph based on Pozzi, “Popular Upheaval,” pages 75-80

Greeks and French vote against austerity, but what did they vote for?

The weekend’s election results in Greece and France can be interpreted in different ways. The most obvious reading, and not at all untrue despite its obviousness, is to see them as a continuation of European voters’ rejection of their governments.

Ten of seventeen Eurozone governments have fallen or been voted out in the past fifteen months, and throwing out the incumbents is a natural response to an extended period of economic malaise. So just as Spain voting in its conservative party to punish the socialists’ austerity can’t reasonably be portrayed as a Spanish lurch to the Right — the conservatives, after all, promised to impose more austerity and swiftly became unpopular when they did as they said they would — we should be cautious in proclaiming a French shift to the Left.

Then again, since there is nothing socialist about the French Socialist Party, we have ample reason to avoid saying France has shifted leftward. Europeans clearly are sick of the mindless austerity being imposed on them, but for the most part have not advanced beyond wanting to throw out the incumbents. The surest way to do that is to vote for the main opposition party, but doing so only reinforces the system that is not working.

Pont Neuf in Paris

French voters at least had alternatives to vote for in the first round of their presidential elections, but the Left Front candidate who offered a clear Left alternative to France’s two main parties, Jean-Luc Mélenchon, finished a disappointing fourth with 11 percent of the vote, below what he had been polling. Worse, the far Right candidate, Marine Le Pen, won 18 percent. The Socialist François Hollande and Union for a Popular Movement’s Nicolas Sarkozy earned only about 55 percent of the first-round voting between them — the French demonstrated they are seeking an alternative.

But what alternative? That is as yet unknown. But the strong showings by crypto-fascists in France (Le Pen) and outright fascists in Greece (the Golden Dawn party) demonstrate the danger inherent in allowing economic malaise to continue without a solution or alternative. If the Left is unable to offer a coherent alternative, the extreme Right will threaten to fill the vacuum. Golden Dawn won seven percent of the vote in Greece on Sunday, elevating a fascist party into a national parliament. And if you have doubts about Golden Dawn being fascist, here is an excerpt from a report by Maria Margaronis in The Guardian on May 7:

“Its leader, Nikolaos Michaloliakos, threw Greek journalists who wouldn’t rise for him out of his press conference and dedicated his victory to ‘the brave boys in the black shirts.’ ‘Those who slander us,’ he barked, and ‘those who betray this country should be afraid: we’re coming.’ Near Kalavryta in the Peloponnese, the site of one of the most terrible Nazi massacres in the 1940s, Golden Dawn graffiti calls for ‘a new Holocaust to clear the filth from the country.’ ”

Greece has enough history with Right-wing extremism that the Golden Dawn’s words can not be dismissed as mere antics. The Nazi occupation of Greece during World War II, conducted through a Greek puppet government, caused hundreds of thousands to die of starvation, and tens of thousands more to be executed. An armed resistance movement, organized by Left groups but widely supported, gradually forced the Nazis to withdraw. A government was installed in Athens by the British, but the Communist-led resistance, having liberated the country, had strong support and could have taken power. Josef Stalin, however, ordered Greece’s Communists not to do so. In return, the British-backed government made mass arrests of resistance fighters while allowing Right-wing gangs to kill others by the thousands. In response, Communists resorted to an armed struggle, reversing themselves in a much less favorable position, touching off a civil war that crushed them and displaced millions, so furious was the counter-insurgency. The British heavily supported the régime it had installed while Stalin simply stood by because he did not want further tensions with his former World War II allies.

Execution, long imprisonment or exile became the fates of many Greeks. The Left was outlawed for three decades, and a period of disastrous Right authoritarian government culminated in the murderous military junta of the “four colonels” from 1967 to 1974. That junta imprisoned several thousand people just in its first month, many of whom were tortured, and imposed a brutal dictatorship. Although this history, completely entangled with Cold War politics, might seem to have no bearing on present-day Greek politics — and definitively rendered armed uprisings by the Left a relic of the past — it left Greece with a legacy of deep social divisions, a weak political center and an archaic class structure compounded by an exemption from paying taxes for the favored.

Considerable force was applied to provide Greece’s capitalists with large advantages. But although in recent decades they have been content to maintain their privileges via traditional legal means, the system they have been reliant on has become unstable. Stirring up nationalism has been a common method for the world’s privileged to maintain power, and nationalistic attitudes below can easily take a violent direction.

When fascists declare an intention to “clear the filth” and threaten violence, they mean it: Fascists speak with fists and weapons, not words and ideas. The showings of Len Pen and Golden Dawn are alarm bells are ringing, loudly. And fascists do not need a majority to seize power — Hitler never received more than a third of the vote and was appointed chancellor by German president Paul von Hindenburg; Mussolini never won more than a tiny percentage of votes. Force elevated them to power, with just enough people susceptible to their simplistic siren songs to provide the shock troops.

The Greek Left — split three ways among the Coalition of the Radical Left (Syriza), the Communist Party of Greece (KKE) and the Democratic Left — did score much higher than the extreme Right, a combined 31 percent of the vote, although this was at the low end of the 30 to 40 percent they had collectively polled during the past couple of months. Syriza finished second and only two percentage points behind the mainstream Right party, New Democracy. But because of a quirk in the Greek electoral system — otherwise a proportional-representation system requiring only three percent of the vote to enter parliament — the May 6 results rendered it impossible for the Greek Left to form a government by themselves, even if the parties could reconcile their significant differences.

That quirk is that the first-place finisher gets a bonus of 50 extra seats above what it earns from its proportional share of the vote. New Democracy, as the first-place winner, therefore was awarded 108 seats instead of 58 — a massive boost. Put another way, N.D. has more than a third of parliament’s 300 seats despite winning nineteen percent of the vote. That, in theory, made the most likely government to be formed a “grand coalition” of N.D. and the mainstream Left party, the “socialist” Pasok, plus at least one other because New Democracy and Pasok together finished short of a majority.

Such a government, to put it mildly, would be seen as illegitimate by Greeks — more than two-thirds voted against the two ruling parties and their policy of pitiless austerity. But that illegitimacy surely was not the reason that N.D. leader Antonis Samaras handed back his mandate to form a government after one day instead of using all three days he was granted to find willing coalition partners. There are two conclusions that can reasonably be drawn: Samaras does not actually want to govern, or he is calculating that nobody will be able to form a coalition and new elections will be called for June that he believes he will win by a greater margin.

The first scenario in the preceding sentence arises because, in essence, Samaras would have his bluffed called were he to become prime minister. The N.D. is Greece’s Big Business party, and has consistently boosted those interests while expanding its base through policies that enable Greece’s middle class professionals to avoid paying taxes the same as the rich and powerful. But its support, in practice, for austerity are a direct contrast to its verbal claims of opposition to austerity, a contradiction exposed by its “solution” to Greece’s crisis: tax cuts for businesses. The Big Business backers of New Democracy are too connected with business and financial interests elsewhere in Europe to abrogate the austerity agreements with the European Union, European Central Bank and International Monetary Fund.

Greeks voted against austerity. What did they vote for? That is not nearly so easy to answer.

Syriza, itself a coalition of Trotskyist, Maoist, Eurocommunist and other non-orthodox communist Leftists, has called for a coalition with the KKE and the Democratic Left, in contrast to the orthodox communist KKE that eschews working with other parties and the moderate Democratic Left that, during the electoral campaign, sought a coalition only on its terms. As Syriza won more votes than KKE and the Democratic Left combined, and as the party most willing to join hands with other anti-austerity parties, it might develop into a home for Greeks sick of austerity and willing to throw off the shackles of European Union financiers.

Syriza contains differing opinions on retaining the euro (although its leader, Alexis Tsipras, favors remaining in the eurozone) and definitively advocates remaining within the E.U. but with a thorough restructuring. Syriza demands a suspension in debt payments until the economy recovers, followed by a “selective” default; redistribution of wealth; and a re-orientation of priorities toward growth-inducing investment. A day after Syriza’s second-place finish, as multi-sided negotiations to form a government began, Tsipras told Athens News:

“We strongly believe that the country’s salvation will achieved through the rejection of these barbaric measures, through relief from recession and the looting of pensions and salaries, through the cancelation of austerity measures and their replacement with measures to boost the economy and tax built-up wealth so that funds are found to help the weaker sections (of society). … Our message of our people to European leadership is clear, the Greek people last night rejected the policy of austerity, as it is being rejected by all the peoples of Europe. The time has come for it to be withdrawn.”

Having been given the mandate to form a government as the leader of the second-place finisher after Samaras said he is unable to form one, the Greek newspaper Kathimerini reported that Tsipras’ coalition negotiations will center on these demands:

  • The immediate cancellation of all impending measures that will impoverish Greeks further, such as cuts to pensions and salaries.
  • The immediate cancellation of all impending measures that undermine fundamental workers’ rights, such as the abolition of collective labor agreements.
  • Reform of the electoral law and a general overhaul of the political system.
  • An investigation into Greek banks, and the immediate publication of the audit performed on the Greek banking sector by BlackRock.
  • The setting up of an international auditing committee to investigate the causes of Greece’s public deficit, with a moratorium on all debt servicing until the findings of the audit are published.

The “policy of austerity” has unquestionably suffered a “crushing defeat,” but without any consensus among Greeks as to what the alternative should be. Regardless of whether Greece leaves the eurozone and re-adopts its former national currency, the drachma, Greece’s future is in Europe. There is no Greek solution to Greece’s crisis, nor is there a French solution to France’s stagnation, nor a national solution to any other country’s economic malaise.

The only way forward for Europe is for a European Union radically different from the one that exists — an E.U. that is democratic and designed to benefit all peoples, not a dictatorial bureaucracy interested only in maintaining the fabulous wealth of a capitalist elite, in particular financiers, at the cost of everybody else.

In previous posts, I have summarized programs proposed by various economists, some envisioning Greece remaining in the eurozone and some envisioning Greece dropping the euro and returning to the drachma. What these programs have in common is a vision of a European-wide economic restructuring.

To summarize some of these ideas: The E.U. should be leveraged to internationalize the resistance of working people; full employment demanded as an explicit goal; banks should become publicly owned and democratically controlled so that capital is directed toward socially useful investment instead of speculation; a highly progressive taxation system should be coordinated at the E.U. level; wages raised to account for improved productivity that has, for three decades, gone to capitalists; governments should default at least some of their debts to banks; bank deposits should be guaranteed; and there should be more investment in education to enhance future productivity.

Some of these, or at least moderate versions of some of these, are articulated by the Greek Left. These are, however, yet to be articulated by European politicians elsewhere. Politicians such as Hollande argue for reforms within the current E.U. framework, not a break from that framework or even a strong questioning as to why ensuring profits to bond holders and speculators should be the highest principle of Europe and that entire countries should be immiserated for it.

Although a reformist, it can be said that Hollande came to advocate strong reforms, winning backing for ideas such as including a 75 percent tax rate on France’s highest earners, the hiring of new teachers and social spending to stimulate the economy. Sarkozy, on the other hand, dangerously adopted some of the arguments of Le Pen and her National Front party in a craven attempt to win her voters — thereby giving legitimacy to extremists who scapegoat immigrants and attack intellectuals. Such programs (and its equivalents elsewhere, including the “tea party” in the United States and Geert Wilders’ Freedom Party in the Netherlands) are demagogic attempts to deflect attention from the structural issues underlying economic malaise and the vast wealth inequalities that are destabilizing society. Although these have the appearance of grassroots “populist” movements, they are always supported by Big Business interests and are often, as is case with the “tea party,” lavishly funded by those interests.

Elections for the French parliament occur in mid-June, and that might provide more guidance as to where France is going. But the mainstream Center-Left governments of Europe that have imposed austerity have fallen just the same as Center-Right governments doing the same. It is possible that a spell of both applying roughly similar austerity policies will finally spark the rupture that is necessary. If that proves to be so, then we will be able to look back and say that Greece — having rejected both its major parties — arrived first. But a systemic break with the capitalist logic of austerity can only be an international movement: It is indisputable that “socialism in one country” can’t survive a hostile capitalist world, and a small country such as Greece all the more so could not survive as a socialist island in a capitalist Europe.

Inevitably, a post-capitalist Europe would be an example for the rest of the world, not excepting other advanced capitalist countries. I want to be clear here that I — and those whom I have summarized here and in previous posts — are advocating a democratic system, one much more democratic than currently exists. The 20th century’s top-down, state-owned and -controlled economic system that developed in the Soviet Union failed, and failed for real reasons — sufficient reasons can be found internally. Rather, what is advocated is cooperation in a decentralized economy.

Political democracy is not possible without economic democracy. Economic democracy is impossible without production being oriented toward human, community and social needs rather than private accumulation of capital. Everybody who contributes to production earns a share of the proceeds — in wages and whatever other form is appropriate — and everybody should be entitled to have a say in what is produced, how it is produced and how it is distributed, and collective decisions in turn should be made with community involvement.

A Left that can articulate a democratic vision of a better world can succeed. The signs are around us: the rapid assent of the Occupy Wall Street movement in the United States, the electoral success of the Greek Left, the mounting fury around the world at a rigged capitalist system that is failing humanity. But a better world can only be made through international struggle and a radical vision of economic and political democracy. Such a task will not be easy: The rulers of the capitalist world have a panoply of weapons at their disposal (control of the workplace, the ability to fund groups to do their ideological bidding, seemingly limitless budgets for police and militaries among them) and a historical willingness to fund extreme Right movements when feeling threatened.

The breakthroughs of the extreme Right in France and Greece over the weekend are sober reminders that a descent into barbarism and dictatorship under conditions of scarcity is also a possible future if we do not find a way out of the ongoing economic malaise.

Rogue newspapers or part of a continuum?

You’ve got to hand it to the old pirate, Rupert Murdoch — he’s still at the top of his form. His performance at the “Leveson Inquiry” in London last week was, in its own way, something to behold. Denying he seeks favors for his businesses, denying he has any influence, denying he knows anything that is happening within his company.

And Fox News is “fair and balanced.” There must be much unease within News Corp. these days, considering the number of old hands — some of whom worked there for decades — Murdoch so casually threw overboard. Before The Guardian last summer broke open the still unfolding News Corp. scandals, we were told hacking was the work of a single “rogue reporter.” Then it became the work of a single “rogue newspaper.” Next a “rogue country” perhaps? One can see where this might be headed, so Murdoch, in his two days of testimony last week, sought to head off the possibility that the, uh, whole company, might be “rogue” and so fell back on blaming his executives for keeping he and son James in the dark.

This week’s declaration by a British Parliament committee that Murdoch is “not fit” to run a major company does catch one’s attention. I don’t believe that extraordinary declaration can be separated from Murdoch’s appearance before that committee last year. The most common commentary then reduced his performance to personalized notions such as “doddering grandpa” in light of his long pauses and lack of answers offered.

What I saw in last week’s testimony was a boss used to being unaccountable to anyone — his crisp “no’s” and clipped phrases to the questions reflected someone used to giving orders and being in charge. His own manner betrays his role as the person in charge, whether that is tightly managing his properties or creating and encouraging a distinct corporate culture.

I should note that all Murdochs and the company’s representatives have consistently denied condoning e-mail hacking, phone hacking, paying off police and other accusations. We will have to wait for the legal systems and the parliamentary investigations to run their course to gain better understanding. But we can examine Murdoch’s newspapers.

Buy first, demand legality later

Take the New York Post. The Post wouldn’t exist it weren’t for special favors granted Murdoch. The United States used to have laws prohibiting “cross ownership” of media — you could own a television station and two radio stations in the same city, but no more, and no newspapers if you owned a TV station. When Murdoch decided to branch out into television in the U.S., he bought a television station in New York, despite already owning the Post, and had similar conflicts in other cities. Solution? He sought and was granted a waiver from the law, and eventually the law was rescinded.

News Corp. shareholders aren’t necessarily pleased with the arrangement as the New York Post loses money by the tens of millions of dollars annually. But it exists as a platform for Murdoch’s extreme Right viewpoints and as a bully pulpit. A good example of the latter could be made out of the Post’s attitude toward Hillary Clinton.

The paper for years consistently attacked Clinton in every manner possible, going out of its way to publish the most unflattering photos of her they could find, and sometimes doctoring them to make her look worse. (Fox News is often accused of doing that as well.) But in 2000, Clinton was a shoo-in to win a seat from New York in the U.S. Senate, and Murdoch thought it might be good to get on the good side of a powerful senator. Suddenly, Clinton was a hero, routinely lauded in the Post while her Republican opponent was mercilessly attacked. As soon as Clinton became a part of the Obama administration, she immediately reverted to her pre-Senate status.

Not altogether different from Murdoch’s British tabloids suddenly deciding that Labour was not the devil on earth, and backing Tony Blair when it was obvious he would become prime minister in a landslide. Not that any of these papers’ far Right rantings slackened for a moment. Business is business, no matter how well Murdoch can keep a straight face.

How much influence does Murdoch truly wield? Over the political process, evidently plenty, considering how British politicians all feared his considerable wrath, and how cravenly Republicans in the U.S. seek the favors of Fox News. Media outlets that are wielded as weapons of destruction with no regard for reality are coercive to democracy.

Influence or reinforcement?

But do such outlets truly change minds and shape public opinion? Here I have my doubts. When the “news” that is presented is so obvious biased and so obviously carries a political agenda, I don’t see that many minds will be changed; at most a minuscule number. The highest audience total I can recall hearing for any Fox News broadcast is perhaps three million — that sounds like a lot, but nonetheless represents only one percent of the U.S. population. An outlet such as that provides reinforcement for zealots unaffected by reality. That is poisonous to rational discourse, but is most unlikely to convert anybody not already predisposed to extremist rantings and bizarre conspiracy theories.

Sometimes it is suggested that the rantings of Murdoch properties makes comparatively less extreme Right-wing bias more presentable and thus making it sound reasonable. But I don’t think that is the case, either; such bias on its own is not necessarily persuasive. Propaganda is ineffective if it is recognized as propaganda; getting significant numbers of a society to support policies not in their interests has to be accomplished in diffuse and subtle ways.

What I believe moves public opinion is repetition, and not repetition in a handful of obviously biased publications or networks, but rather repetition of viewpoints, reporting angles and underlying themes and assumptions, across the entire corporate media. There are a vast array of institutions, including corporations, “think tanks,” schools and armed forces, to suffice a society with the viewpoints of the dominant, which in a capitalist society are its industrialists and financiers.

That there is sometimes fierce competition among media outlets not only doesn’t militate against uniform assumptions and story lines, it actually reinforces those tendencies. Corporate-inspired ideologies pervade capitalist societies, and corporate ownership of the mass media ensures that decision-making positions are filled with those who hold to some variant of prevailing ideologies or are inclined to “play it safe” by cautiously remaining within “acceptable” boundaries. The mass media will then simply reflect these dominant ideologies, and continual repetition through multiple outlets reinforces the ideologies, making them more pervasive until (and if) a significant countervailing pressure arises.

The very competitive nature of mass media ownership helps dominant ideologies prevail — if so many different outlets report the same news item in a nearly identical way, that “spin” can easily gain wide acceptance. Or if stories are reported differently by competing media outlets, but with the same dominant set of presumptions underlying them, those dominant presumptions, products of ideologies widely propagated by elite institutions, similarly serve as ideological reinforcement.

It’s what the don’t say as well as what they do say

The persistence with which stories are reported is another reinforcement — stories that serve, or can be manipulated, to uphold dominant ideologies can be covered for long periods of time with small developments creating opportunities to create fresh reports at the same time that stories that are ideologically inconvenient are reported briefly, often without context, then quickly dropped.

Ideas that directly challenge corporate orthodoxy can be excluded from public debate at the same time that a debate among two or more “acceptable” ideas rages. To provide an example, at the end of the 1990s a strong debate played out in the mass media outlets of the United States concerning the Vietnam War. This debate had all the appearances of a serious dissection of a bloody, deeply divisive blot on U.S. history. But although the debate was heated and lively, it was only between two “acceptable” viewpoints — an honorable effort that tragically failed or a well-intentioned but flawed effort that should not have been undertaken if the U.S. was not going to be “serious” about fighting.

Left out were the widely held views that the war should never have been fought because it was a war to extend U.S. hegemony or that the U.S. simply had no business fighting in someone else’s civil war. Further, the first “acceptable” viewpoint implied, and the second explicitly stated, that the U.S. didn’t really fight hard to win the war, ignoring the actual intensive level of the U.S. war effort in which North Vietnam’s urban and rural infrastructures were destroyed and three million Vietnamese were killed. (And lest that media debate be seen as a backlash from the Right, it was the liberal New York Times that led it.) Thus there was all the appearance of a free and open media at the same time that the media obscured.

Not covering certain news can be as important as covering news. The New York Times, to use it again as an example, regularly gives heavy coverage, often on the front page, of demonstrations in Moscow, yet published only a tiny article buried far inside the paper on the May Day demonstrations, some of which occurred only two blocks from its office. That is simply a different, more sophisticated method of marginalizing a mass movement than the crude, politically motivated attacks in the New York Post.

In countries in which the media is controlled by the government, it is easy for people to disregard what they read or hear because it is all coming from the same source, even when there is room for different opinions. A system in which the mass media is believed to be independent is far more effective at suffusing a society with an ideology — such a system is not the result of some sort of conspiracy or a conscious plan, it is simply a natural outgrowth of corporate institutions growing so powerful at the expense of all other institutions.

We laugh at Murdoch properties declaring themselves to be “fair and balanced,” but as much as that laughter is deserved they are less an anomaly than we often think.