Donald Trump’s recent rant that the U.S. Constitution should be “terminated” so that he can be installed as president for life merits no response, given the Orange one-man crime wave’s tenuous connection to reality. Laughter is the appropriate riposte as Trump’s futile attempts at becoming the fascist dictator he clearly aspires to be become ever more futile.
But is his latest childish tantrum really something to be laughed off? Having skipped the “tragedy” phase and gone straight to “farce,” Trump is facing what is likely to become a politically terminal case of irrelevancy as new contenders for Mussolini’s crown, most notably but not only Ron DeSantis, emerge. The nascent fascist movement that has coalesced around Trump, and the varieties of extreme right menace that shade into it that are now expressed through the Republican Party, are no laughing matter. And while embarrassed silence or a quick change of subject might be Republicans’ default position when asked to comment on Trump’s increasing irrationality due to their fear of the Frankenstein monster they have let loose, eviscerating the Constitution is actually on their agenda.
Let us have no illusions about the U.S. Constitution, the world’s oldest. Hopelessly archaic and undemocratic, it is a document that was designed to keep the country’s slave owners and commercial bourgeoisie firmly in power — going so far as to enshrine slavery in its text — through setting up institutions like the Electoral College and the Senate (the world’s most undemocratic legislative body) to ensure that power could never be extracted from the hands of the commercial and plantation elite. Ambiguously written to exclude women, Blacks, Indigenous peoples and the poor, its stilted language is open to interpretation by judges who see protection of the most powerful and wealthy capitalists, and the maintenance of inequality, as their holy mission.
Cartoon by Polyp.
This mission has reached such proportions that the absurd doctrine of “originalism” is not only proclaimed with straight faces, but judges on courts up to the Supreme Court rely on it to impose their hard right political agendas. “Originalism” is the farce of an idea that asserts only those rights explicitly mentioned in the Constitution exist, and that any interpretation of its text has to be based on what the writers of the Constitution — the “Framers” as they are usually called in legal circles — intended. In other words, judges must read the minds of people dead for more than 200 years to decide cases. By a remarkable coincidence, those long-dead minds are opposed to all social progress.
It must be difficult for the rest of the world to imagine such laughably transparent silliness being offered as legitimate legal theory, but such is the state of politics in the global hegemon. We might go so far as to suggest U.S. politicians will do anything for a laugh, but as the Supreme Court erases one right after another, there is nothing funny going on here.
What is certainly not funny is the quite serious, albeit quiet, movement by the hard right to put an end to constitutional rights through wholesale changes to the Constitution. Their chosen route to do this is the convening of a constitutional convention, and this movement has moved forward by a frightening amount.
Among the leading voices for a new constitutional convention — one that would have few if any limitations on its power — is none other than the American Legislative Exchange Council (ALEC). Lavishly funded with undocumented millions of dollars, ALEC is a secretive group that writes “model legislation” for state legislatures across the United States that benefits corporate interests. The watchdog group Center for Media and Democracy’s ALEC Exposed website calls ALEC “much more powerful” than a typical lobbyist or front group. “ALEC is a pay-to-play operation where corporations buy a seat and a vote on ‘task forces’ to advance their legislative wish lists and can get a tax break for donations, effectively passing these lobbying costs on to taxpayers,” ALEC Exposed reports.
What do legislators who work with, or are members of, ALEC do with the organization’s “model” bills? According to ALEC Exposed:
“Participating legislators, overwhelmingly conservative Republicans, then bring those proposals home and introduce them in statehouses across the land as their own brilliant ideas and important public policy innovations—without disclosing that corporations crafted and voted on the bills. ALEC boasts that it has over 1,000 of these bills introduced by legislative members every year, with one in every five of them enacted into law. ALEC describes itself as a ‘unique,’ ‘unparalleled’ and ‘unmatched’ organization. We agree. It is as if a state legislature had been reconstituted, yet corporations had pushed the people out the door.”
Extreme-right state legislators met at an ALEC conference in late 2021, vowing to push for a constitutional convention. The ALEC proposal calls for a balanced-budget amendment and term limits for political office holders. The first is dangerous enough, given that forcing the federal government to balance its budget every year would mean permanent austerity would be imposed; working people would be hit hard by any such limitations on government spending. Not only would the government be unable to respond to a recession, basic programs like Social Security would be put at risk. Medicare and government pensions would also be subject to budgetary axes. That outcome is of course very much intended. But any constitutional convention would not have to limit itself to a finite set of topics. Because there are no rules or laws governing what a convention could do, a seated convention could easily become a runaway body, imposing a full set of far-right and corporate wish lists. Calls for retrogressive legislation, including bans on abortion, are routinely called for by proponents of seating a convention.
The movie “Greed” (1924)
The far right drive for a convention to wipe out as many gains achieved by social movements as possible has been quietly going on for years. In 2017, for example, Truthout reported on an effort by state legislators affiliated with ALEC and promoted by another shadowy group, Citizens for Self Governance, whose co-leaders have strong ties to the Koch Brothers and who routinely label Black Lives Matter and other Left groups as “thugs” and “criminals.” A year earlier, the group practiced for a constitutional convention by holding a mock convention in which it passed a far-right wish list that included making it easier to repeal federal regulations, requiring a supermajority to impose federal taxes and eliminating federal taxation by repealing the 16th amendment.
To help guarantee the far-right outcome desired, this initiative would “appoint seven delegates to the convention, and attempts to provide for the replacement of delegates if they go off-script,” Truthout reported. The intended script could be very dangerous. “[A]ny convention call, no matter how narrowly written, could result in a ‘runaway’ convention,” the report said. “Why? Because the Constitution doesn’t provide any guidance or constraints on how a convention would operate once called. State politicians or Congress could write their own agenda and rules about the way delegates are chosen, the number of delegates allowed from each state, and whether or not a supermajority is required to approve amendments. Once in the room, delegates to a convention can ignore [any] limits.”
As recently as last month, an ALEC conference in Washington was attended by some of the most notorious extreme-right mouth-frothers, including former House of Representatives Speaker Newt Gingrich and several current members of Congress. A rouges’ gallery of far-right pressure groups, including some who agitate for a total ban on abortion. Among the offensives endorsed at this conference were to fight “woke capitalism” (what this chimera might be was not specified) and a bill that would “bar companies with 10 or more employees from receiving state contracts if they take into account any ‘social, political, or ideological interests’ to limit their commercial relationships with fossil fuel, logging, mining, or agriculture businesses—and that instructs legislatures to ‘insert additional industries if needed.’ ” In other words, promotion of fossil fuels would become mandatory. Another ALEC “model bill” promoted at the conference was legislation intended to enforce right-wing censorship in public universities.
How close is the United States to a convention?
To seat a constitutional convention, two-thirds of the states (34) would need to ratify a resolution. Although current constitutional law mandates that three-quarters of the states (38) would then have to approve, a convention could change the ratification requirements to whatever it wanted, with no constraints. There is precedence for this — the only constitutional convention in U.S. history, in 1787, “went far beyond its mandate,” the Center on Budget and Policy Priorities (CBPP) wrote. “Charged with amending the Articles of Confederation to promote trade among the states, the convention instead wrote an entirely new governing document” and drastically altered the approval process.
How many states have ratified? Convention proponents claim that 28 states have already passed resolutions. The CBPP, by contrast, reports that since ALEC released “a handbook for state legislators that includes model state legislation calling for a constitutional convention” in 2010, only 12 states have adopted it. ALEC gets to 28 states by counting any state that has ever passed any resolution calling for a convention, no matter different wording nor that some of these resolutions are more than three decades old. “Whether Congress would agree to count all such other state resolutions is unknown” the CBPP wrote. “The question is important, because the Constitution grants solely to Congress the power to determine whether the 34-state threshold has been met.”
“Greed” (Nicholas Kwok)
Alternate counts include the 19 states claimed by a pro-convention group calling itself “Convention of States Project” that avoids any mention of who or what might be behind the group but quotes Ron DeSantis and Sean Hannity among a host of far-right extremists. Another shadowy group that fails to mention its backers, “US Term Limits,” admits that only five states have ratified its favored version but claims that if other versions are included, the total reaches 19. The right-wing news magazine Newsweek claims 17 states have ratified. The liberal citizens’ group Common Cause writes that “more than a dozen state legislatures” have passed balanced-budget convention resolutions since 2011, while five states have rescinded resolutions since 2016. Fortunately, the far-right drive to re-write the Constitution has not been well organized, although there is significant danger that the backing of ALEC will likely put this retrograde movement on firmer footing.
None of the above is in any way intended to deny that the U.S. Constitution is badly out of date. A better world for United Statesians certainly would mean a far more progressive constitution, one guaranteeing democratic rights and expanding the concept of rights to economic questions, and creating new legislative bodies based on democratic outcomes. Such a document would be much different than the current Constitution. Although it would be natural for the Left to be tempted to support a convention to advance progressive reforms, the current balance of social forces quickly puts a kibosh on such ideas. Given the vast power that the corporate mass media holds, the relentless promotion of right-wing talking points as “news,” and the hold the Republican Party has on state legislatures across the country, the time for a convention is nowhere near.
The Democratic Party certainly isn’t going to be of any help, given the intellectual dead end of liberalism that it exemplifies and the austerity it has embraced, as this month’s vote to force a bad contract on rail workers was the latest demonstration in an endless series of capitulations to capitalists.
Any move for a convention needs to wait until the balance of forces is tilted in favor of the Left, and that can only come about through a sustained mass movement sure of its goals. In such a scenario, movements would likely be aiming much higher than a constitutional convention — a better world necessitates drastically different ways of organizing politics and the economy than what currently exists. There would be no need to tinker with an archaic document long overdue for replacement; it would be necessary to re-imagine what a constitution should be. For now, we are in the world we are in, and while we remain on the defensive, any convention would be for the worse. Capitalist formal democracy is already farcical. The current backsliding toward a harder right-wing domination doesn’t need yet more impetus.
The finger-pointing and excuse-mongering continues unabated in the ranks of the Democratic Party following the disappointing election results from earlier this month. The party’s dominant corporate centrist wing wasted no time blaming progressives for the loss of Virginia’s governorship, the surprisingly narrow re-election of New Jersey’s governor and various defeats in local races in places like the New York City suburbs.
Finding reasons for local or state elections in national politics won’t necessarily produce a full picture, particularly in New Jersey, where voters have the habit of electing Democratic congressional and state legislative delegations, consistently voting Democrat in presidential elections but often voting for Republican governors. This time around, particularly in the New York City mayoral race and local races in the city’s Long Island suburbs, unfounded fears of crime waves that largely existed only in the feverish imaginations of right-wing commentators seemed to have tipped more than a few votes.
Not only Democratic centrists but most of the corporate mass media insisted there was a wave of voting for Republicans, and the only proper response (surprise!) is to move to the center, or even to the center-right, to avoid “scaring” voters with “radical” ideas.
Branch Brook Park in Newark (photo by Cjbvii)
Before we can tackle that all too predictable jeremiad, it would be useful to find out if voters really did defect to the Republicans in droves. The evidence doesn’t seem to support that. If we compare this month’s gubernatorial elections in New Jersey and Virginia to recent elections, there is more support for the supposition that Democrats simply stayed home. Here are some comparisons:
Governor Murphy actually won more votes than he did in 2017, when New Jersey set a record low for voter turnout for a gubernatorial election. It could be pointed out, accurately, that Governor Murphy had far fewer votes than did Hillary Clinton in 2016 or Joe Biden in 2020, but although Republican challenger Jack Ciattarelli had a relatively smaller deficit in terms of the votes won by Donald Trump, he nonetheless received more than 600,000 votes less than Trump did a year ago:
Repeating this exercise for Virginia, we find that Democrat Terry McAuliffe (very much a corporate centrist), the loser in an upset, won nearly 200,000 more votes than Democratic winner Ralph Northam in 2017. But the Republican vote totals were much higher in 2021 than four years earlier:
Clearly, Republican voters were fired up in Virginia, stirred up by a steady drumbeat of specious culture-war issues, and Democratic voters either took a McAuliffe win for granted or simply weren’t sufficiently motivated to vote. Although the specific dynamics varied between the two states — New Jersey and Virginia are not similar — a low turnout by Democratic voters is the leading reason for the surprising results. And that brings us to the central question: Why did Democrats stay home?
What you see is sometimes what you get
The gap between Democratic candidate promises and what voters want and need on the one hand, and what Democrats deliver once in office on the other, has once again proven to be a canyon-like width. How many times can a party thumb its nose at its base and continue to win? Democrats seem determined to find out. Consider the biggest single failure to date: The failure to pass President Biden’s US$3.5 trillion “Build Back Better” package, which would have included “socialist” items such as paid parental leave. Now down to less than $2 trillion with family leave reduced to four weeks with wide swathes of parents rendered ineligible, what was already a watered-down benefit might not survive its current precarious status.
By right-wing standards, just about every country on Earth is “socialist.” The United States is the only industrialized country without paid family leave; the only countries that don’t have it are Papua New Guinea and four tiny Pacific Island countries. The original bill had allowed for 12 weeks of paid leave — still far less time than most countries — and was reduced to four weeks in the negotiations before it was cut from the bill altogether and then restored as a four-week “means tested” offering. The global average for paid maternity leave is 29 weeks, and it is 16 weeks for paid paternity leave. Some countries allow for a year or more of paid family leave. For example, Sweden mandates 16 months.
The International Labour Organization’s standard is that at least 14 weeks of paid maternal leave should be offered; almost half of the world’s countries do so, including 25 of the 29 developed countries in which International Labour Organization researchers were able to make an assessment. The original offer in the Build Back Better bill was 12 weeks, and even that tepid offering has been taken away. About half of the world’s countries also offer paid paternal leave; such a non-macho idea was not even considered.
Downtown Richmond, Virginia, looking west from Libby Hill Park (photo by Ron Cogswell)
West Virginia Senator Joe Manchin, who has done all he can to tank his own party’s legislation and block any attempt to address global warming, and other so-called “deficit hawks,” claim they oppose congressional bills that would add to the federal budget deficit, but have not been heard to complain about the Trump tax cuts that massively added to the deficit, nor the trillions of dollars spent by the Federal Reserve to buy bonds in recent years nor by last year’s Covid-19 relief measures that gave hundreds of billions of dollars to large businesses.
What is behind all this? It is commonplace for folks on the Left to complain that Senators Kyrsten Sinema, Manchin and others are simply “corrupt.” I won’t argue against that — Senator Manchin in particular is delighted to please his corporate paymasters and give the back of his hand to his constituents, who were in favor of the original $3.5 trillion plan by wide margins, and Senator Sinema turned her back on her Arizona backers from the start. (Several of the Build Back Better provisions are supported by two-thirds or more of West Virginians and a similar percentage of Arizonans backed the original plan.) But there must be deeper reasons here. One factor that would be difficult to overestimate is the inability of U.S. liberals, similar to European social democrats and Canadian liberals, to actually stand for anything.
Capitulation in the U.S. and around the world
North American liberals and European social democrats have a long history of capitulation — we see the same patterns, whether it is Bill Clinton, Barack Obama, Jean Chrétien, Justin Trudeau, Tony Blair, Gordon Brown, François Hollande, Gerhard Schröder, José Luis Rodríguez Zapatero or Romano Prodi. There is something much larger at work than a lack of resolve when each falls to their knees in front of industrialists and financiers, when each speedily implements neoliberal austerity policies despite leading the supposed “center-left” opposition to the conservative parties that openly stand for corporate domination.
Capitalism is a system wholly captured by the most powerful possessors of economic power in a system of massive inequality. U.S. Democrats, similar to Canadian Liberals, British Labour, French and Spanish “Socialists,” Italian Democrats, German Social Democrats, Australia’s Labor and others, win legislative seats and government offices as members of a capitalist party. U.S.-style liberalism (using the North American definition of the word) has reached an intellectual dead end. Democrats mostly understand that the economy is a failure for most people but can only conceive of minor reforms and tinkering around the edges because they remain as firmly in thrall of capitalism as Republicans and conservatives everywhere.
Caught in a contradiction between knowing a system doesn’t work and being afraid of challenging that system, Democrats are unable to offer alternatives or articulate serious reforms. Instead, they simply say “Vote for us, the Republicans are worse.” Sometimes that works; sometimes it doesn’t.
The New York Stock Exchange (photo by Elisa Rolle)
The Right, on the other hand, loudly advocates policies that are anathema to the working people who form the overwhelming majority of any capitalist country but have the mass media, an array of institutions, corporate power and money to saturate society with their preferred policies. But, perhaps most importantly, they have something they believe in strongly — people who are animated by an ideal, however perverted, are motivated to push for it with all their energy.
In contrast, those who are conflicted between their belief in something and their acknowledgment that the something needs reform, and are unable to articulate a reform, won’t and can’t stand for anything concrete, and ultimately will capitulate. When that something can’t be fundamentally changed through reforms, what reforms are made are ultimately taken back, and society’s dominant ideas are of those who can promote the hardest line thanks to the power their wealth gives them, it is no surprise that the so-called reformers are unable to articulate any alternative. With no clear ideas to fall back on, they meekly bleat “me, too” when the world’s industrialists and financiers, acting through their corporations, think tanks and the “market,” pronounce their verdict on what is to be done.
The market, let us not forget, is not a dispassionate entity sitting loftily in the clouds as propagandists would have us believe; it is nothing more than the aggregate interests of the most powerful industrialists and financiers.
Backing one set of capitalists vs. another set of capitalists
What ultimately differentiates Democrats and Republicans is that they serve different parts of the corporate ruling class. The divergence in interests between industrialists and financiers can be easily overlooked, especially since the two broad groups of capitalists will unite when working people start making demands. Industrialists and financiers argue fiercely, and often litigate, over which gets the bigger piece of the pie but are in agreement that they should get the whole pie.
There has always been an inherent tension between the interests of the financial industry, or finance capital, and the interests of industrialists (owners and executives of companies that produce tangible goods and services, or, to put it another way, the direct owners and managers of the means of production), but the conflict between these two groups has become much more acute in recent decades as massive and ever increasing inequality has stuffed more money into the pockets of the wealthy than can possibly be put to use in productive investment.
The gigantic sums of money that pour into the accounts of those in the top ranks of industrial and financial enterprises are increasingly poured into financial speculation. Wall Street, gaining the upper hand because of the vast sums of money it manages and the financialization of the economy, demands ever bigger profits, no matter the cost to employees or communities. Top executives, who have much of their pay given in stock, are fine with this “enhancing shareholder value,” to use the Wall Street euphemism for elevating short-term shareholder and bondholder profits over all other considerations. There nonetheless is struggle between industrialists and financiers over control of companies and how to split the pie.
That the Democratic Party would come to be the party of Wall Street is not as strange as it might sound. Whenever a company announces bad news that results in a stock-price decline, a flurry of lawsuits will be filed, seeking financial recouping of the shareholders’ losses. The officers of the company being sued in this situation stomp their feet in rage — being a captain of industry is supposed to mean never having to admit a mistake — swearing they are as innocent as a new-born baby. These conflicts can easily land in court. It’s highly profitable for the law firms that represent the interests of Wall Street to pursue these lawsuits, and sometimes, of course, there is chicanery going on and not simply bad management or a downturn in the market.
The symbiotic relationship here is that Wall Street interests and the lawyers who serve them need laws favorable to lawsuits, to rules geared toward investors and to open flows of accurate business information, including requiring companies to report details of their operations. In turn, Democrats love the piles of money these interests give to them.
Industrialists believe it should be almost impossible to sue their companies, want the rules tilted in their favor and hate having to reveal any information. They are heavily represented in the upper ranks of the Republican Party and direct its ideology on economic issues.
Thus the two parties line up on opposite sides of the ruling-class split and the fights can be bitter because immense amounts of money are at stake. A secondary factor in this split between industrialists and Wall Street is social. Financiers, perhaps because they tend to be in cosmopolitan areas like New York, Boston and San Francisco or perhaps because of more complicated psychological reasons, tend not to need to control workers’ personal lives. They want to extract every dollar in your pocket and will do anything to get it, but once they have all the money, they have reached their goal.
Industrialists, on the other hand, frequently wish to control the personal lives of their workers and exert social control. Industrialists are “on the scene” of profit extraction and, enjoying the power their company gives them, often believe they have the right to control the lives of their workers, who are, in their eyes, mere peons. Financiers, meanwhile, take a cut of the profits in more impersonal ways, often by manipulating numbers on a computer screen. A company’s workforce is nothing but another set of numbers to a financier.
A capitalist party can’t be turned into an anti-capitalist or a people’s party. One so heavily dependent on corporate money, such as the Democratic Party, is all the more incapable of being taken over by insurgents. There do remain differences on social issues and policies toward women and People of Color between Democrats and Republicans, and it is understandable that in times so dreary that millions of people are willing to take the crumbs on offer because the alternative is nothing. But is slowing down the rate of brutality really the best we can aspire to? Reforms can be beneficial, that is true, but a different system based on political and economic democracy would be vastly better. A better world will be won by organizing, not by begging.
It’s no secret that United Statesians are more ignorant of the world beyond their national borders than the peoples of other countries. That ignorance serves a purpose. How can you keep screaming “We’re Number One” and believing you have it better than the rest of the world if you are in possession of accurate information?
For example, most United Statesians remain blithely unaware that they have among the worst health care outcomes of any advanced capitalist country while paying by far the most money. A Commonwealth Fund report, for example, found that the U.S. “placed last among 16 high-income, industrialized nations when it comes to deaths that could potentially have been prevented by timely access to effective health care.” As one of the few countries on Earth without a national health care system, health care is a commodity for those who can afford it, not a right as it is almost anyplace else.
The U.S. also has one of the highest rates of inequality as measured by the Gini coefficient; among the countries of Europe only Bulgaria has worse inequality. The United States has the widest gap between pay and productivity gains among advanced capitalist countries and U.S. corporations haul in gigantic sums of money, sometimes millions of dollars per employee, but pay their employees minuscule percentages of their haul. Declining lifespans in the U.S. are considered a “silver lining” in corporate boardrooms because pension costs are lower. And thus it comes as no surprise that the Covid-19 pandemic has widened inequality still further, with the world’s industrialists and financiers adding literally trillions of dollars to their accumulated wealth during 2020.
That was a long introduction to yet more bad news. Not only are wages stagnant and living standards decaying, but working people in the U.S. are working longer hours. A study published in the peer-reviewed journal Socio-Economic Review found that, among 18 European and North American countries, the percentage of employees in the U.S. working at least 50 hours per week is the highest, at about 18 percent for the period 1990 to 2010. The paper, “Extreme work hours in Western Europe and North America: diverging trends since the 1970s” by Anna S. Burger, found that total rising — about 15 percent worked such hours for the period 1970-1989, a time frame in which the U.S. also had the highest rate.
(Author: CIPHR Connect)
Nonetheless, it is not only in the U.S. that more people are forced to work at least 50 hours per week. The study examined Canada, Switzerland and 15 members of the European Union (including Britain, then a member) and in only one country, France, did the percentage of people working excessive hours decline from 1970-1989 to 1990-2010. France, Sweden and Switzerland had the lowest rates, each less than 5 percent. Canada was second to the U.S. at 17 percent and also showed the largest jump, from about 6 percent in 1970-1989.
Work more or else
European Union law is supposed to prohibit working more than 48 hours per week, but the study by Dr. Burger noted that several countries have adopted opt-out clauses. Working beyond 48 hours, even with the exemptions, requires the employee consent. But given the one-sidedness of working relations, an employee could find it difficult to refuse consent. Dr. Burger wrote:
“[T]he choice whether to work long hours is not entirely, or even mainly, left to the preference of the individual but is guided by policy and collective socio-economic institutions. Contrary to conventional wisdom, the most relevant work time tendencies of the past decades are shaped by liberalizing trends in labour market policies, industrial relations arrangements and labour market structures not only in the Anglo-Saxon world but also on most parts of Continental Europe, rather than by regime-conform developments.” [page 3]
Some of the people working excessive hours are high-paid professionals such as lawyers or investment bankers. But low-wage workers are increasingly forced to work long hours because they can’t survive otherwise.
“At the bottom of the skills scale, an increasing number of workers are becoming labour market outsiders who are in atypical, or precarious, employment or unemployment. … The practice of very long hours is particularly wide-spread among outsiders for two reasons. First, due to a lack of regulatory protection and high replaceability, outsiders are in a vulnerable position vis-à-vis their employers. Not complying with an employer’s request for overtime might result in an outsider’s immediate dismissal and replacement. Secondly, in many cases, outsiders consent to, sometimes even initiate, working very long hours in order for their income to reach subsistence level. In today’s increasingly unequal economies, an ever-larger number of low-skilled workers must compensate for their relatively low hourly pay by allocating more time to work. While this decision is formally voluntary, in substance it is not because the choice is strongly shaped by the restrictive political economy environment.” [page 8]
Working conditions in the EU are deteriorating, but employees in the U.S. have less protection and more meager unemployment benefits. The pressure to work long hours is more intense there than in Europe, and employers often find it more profitable to squeeze extra hours out of employees rather than hire someone to lighten workloads. Another product of the extreme individualist ideology U.S. capitalism fosters.
And although overall working hours have actually declined over the past half-century, the rate of that decline has been far slower in the U.S. than in the European Union. A paper by Robert J. Gordon and Hassan Sayed, “The Industry Anatomy of the Transatlantic Productivity Growth Slowdown,” found that for the period 1950 to 2015, there was a decline of 37 percent in average employee working hours for the 10 largest EU countries (a drop from 2,250 hours to 1,560 hours) as compared to a decline of only 12 percent for U.S. employees (2,020 hours to 1,780 hours). So much for John Maynard Keynes’ famous prediction that we’d be working 15 hours a week in the future.
U.S. working people work 220 hours per year more than do EU workers — that’s five and a half weeks of extra work!
That sobering comparison is no surprise when we make a comparison of mandatory paid days off. Among the 42 countries that are members of the OECD and/or the European Union, there is only one country with zero paid days of vacation or holidays under the law — the United States. Seven countries require workers be guaranteed 25 or more vacation days per year. Another 25 mandate at least 20 days. Each of those countries also mandate anywhere from eight to 15 paid holidays. Among the 42 countries surveyed, 34 legally require 28 or more days, led by Austria and Malta (38 each) and another half-dozen requiring 36. Turkey, with 12 days of mandatory paid time off, is next worst to the zero of the U.S.
Working conditions are not getting better
The pandemic may be making the above conditions worse. Working at home has led to a working day of two and a half hours longer for employees in the United States, Canada and Britain, according to a report by a business technology company, NordVPN Teams. The company, CNN reported, examined data sent via servers to calculate employee working hours. There were “no significant drop of business [virtual private network] usage at lunch time indicating potential short lunch breaks while working remotely.”
Other surveys have reached similar conclusions. A report by the U.S. staffing firm Robert Half said nearly 70 percent of professionals who work remotely because of the pandemic work on the weekends and 45 percent say they regularly work more hours during the week than they did before the pandemic. For front-line workers not able to work at home, stress and mental health difficulties have increased sharply, with problems particularly acute in the U.S. due to its inability to provide coherent responses to Covid-19 and the chaos triggered by extreme right operatives who created the “Tea Party” organizing the anti-science and anti-intellectual spectacles opposing measures designed to combat the Covid-19 pandemic.
Where does all this lead? To health problems and shorter lifespans. A study conducted by researchers at the World Health Organization and the International Labour Organization reported that excessive working hours led to 745,000 deaths from stroke and ischemic heart disease in 2016, a 29 per cent increase from 2000. The study found that, in 2016, “398,000 people died from stroke and 347,000 from heart disease as a result of having worked at least 55 hours a week. Between 2000 and 2016, the number of deaths from heart disease due to working long hours increased by 42%, and from stroke by 19%.”
Austerity and economic dislocation have taken their toll around the world, but the already existing harshness of life in the United States on top of austerity and dislocation takes a particular toll there. Nearly half a million excess deaths occurred in the U.S. from 1999 to 2015 from drug and alcohol poisonings, suicide, and chronic liver diseases and cirrhosis. A paper published in the peer-reviewed scientific journal PNAS found this increase in the death rate was limited to the U.S. among advanced capitalist countries.
We’re perhaps taken in more bad news than we can reasonably digest. It’s understandable to not wish to take in too much bad news at once. For readers with knowledge of the world, none of the statistics presented above make for a surprise. It is thus tempting to ask: Would the particularly toxic brand of nationalism practiced by millions of United Statesians continue as virulently were the above statistics widely known? Sadly, perhaps it would. If we were to summarize the discourse of U.S. nationalists, it would be: “We’re number one! We can kill more foreigners in less time than any other country! USA! USA!” Is being able to cheerlead for the world’s biggest military really worth working so many hours for such dismal results?
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.”
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.
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?
Even if Joe Biden had won the U.S. presidency by the expected landslide, the threat of fascism would remain. And not simply because Trumpites are not going away anytime soon.
Donald Trump doesn’t have the intelligence or sufficient ruling-class backing to actually become a fascist dictator. His desire to be one, however, has been more than sufficient to necessitate the widest possible movement against him and the social forces he represents, and there is no doubt his authoritarian impulses would have become still worse had he won a second term. What little democracy is left in the United States’ capitalist formal democracy would have been further reduced.
It might be better to understand Trump as the Republican Party’s frankenstein — the culmination of the Republican “Southern Strategy.” Richard Nixon was an open racist who developed the strategy of sending dog whistles to White racists; Ronald Reagan promoted “states’ rights,” well understood code words for supporting racially biased policies; George H.W. Bush exploited racial stereotypes with his Willie Horton campaign ads; George W. Bush’s presidency will be remembered for his callous ignoring of New Orleans and its African-American population in the aftermath of Hurricane Katrina; and the roster of Republicans hostile to civil rights is too long to list. Moreover, the Republican Party, with very few exceptions, has been an eager promoter and enabler of Trump’s virulent pro-big business policies with most not even bothering to pretend to challenge Trump’s racism and misogyny.
It was no surprise that a billionaire con man whose business plan has long been to screw his real estate empire’s working-class contractors and use every trick imaginable to not pay taxes or his creditors was going to stick it to working people.
Protesters in Portland, Oregon, on the Morrison Bridge on June 3, 2020 (photo by Henryodell)
The Trump administration has been the worst U.S. presidency in history with an extraordinarily fierce approach to class warfare. But let us consider what fascism is: At its most basic level, fascism is a dictatorship established through and maintained with terror on behalf of big business. It has a social base, which provides the support and the terror squads, but which is badly misled since the fascist dictatorship operates decisively against the interest of its social base. 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 varying national characteristics 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. We often think of fascism in the classical 1930s form, of Nazis goose-stepping or the street violence of Benito Mussolini’s followers. But it took somewhat different forms later in the 20th century, being instituted through military dictatorships in Chile and Argentina. Any fascism that might arise in the U.S. would be wrapped in right-wing populism and, given the particular social constructs there, that populism would include demands to “return to the Constitution” and “secure the borders.”
Formal democracy vs. fascism
United Statesians have indeed suffered through four years of militarism, extreme nationalism, the creation of enemies and scapegoats, the imposition of “constitutionalist” judges and demands to “secure” borders, complete with open racism and misogyny. But the Trump administration and its followers constitute a movement with the potential to bring about a fascist dictatorship, not actual fascism. Should the U.S. ruling class — industrialists and financiers — decide they would no longer tolerate the country’s limited, corporate-constrained variety of “democracy,” the militias and assorted far right street gangs that “stand by” on Trump’s command would be unleashed without constraint. And they would be openly joined by police and security agencies in fomenting violence rather than being tacitly supported as they are at present.
Nonetheless, fascism is the last resort of any capitalist ruling class. Instituting a fascist dictatorship is no easy decision even for the biggest industrialists, bankers and landowners who might salivate over the potential profits. For even if it is intended to benefit them, these business elites are giving up some of their own freedom since they will not directly control the dictatorship; it is a dictatorship for them, not by them. It is only under certain conditions that business elites resort to fascism — some form of formal democratic government, under which citizens “consent” to the ruling structure, is the preferred form and much easier to maintain. Working people beginning to withdraw their consent — beginning to seriously challenge the economic status quo — is one “crisis” that can bring on fascism. An inability to maintain or expand profits, as can occur during a steep decline in the “business cycle,” or a structural crisis, is another such “crisis.”
A rally against Donald Trump in New York City on March 19, 2016, organized by the Cosmopolitan Antifascists
Industrialists and financiers have an iron grip on U.S. politics (witness the dreadful choice the two corporate parties have just offered), and the overdue economic downturn triggered by the pandemic has not hurt profits for most big corporations, with bailouts provided for those who have taken a hit to their bottom lines. Financiers and speculators are doing quite well, and because Wall Street values stability, financiers likely were more behind Joe Biden than Trump. As the Democratic Party favors financiers (while the Republicans favor industrialists), Wall Street will have no problem at all with a Biden administration. Some industrialists likely have tired of Trump’s antics, or calculate that they have gotten all the services they can reasonably expect from him; some among this grouping probably don’t mind a change. And given Joe Biden’s decades of loyal service to corporate interests, in particular the banking industry, little gnashing of teeth is likely to be found in corporate boardrooms.
There was no need for U.S. capitalists to institute a fascist dictatorship during the Trump administration and there won’t be any need in the near future. So, to circle back to the opening of this article, why should it be said that the threat of fascism is undiminished with the ouster of Trump? That is because as long as capitalism exists, the threat of fascism exists.
The rule of capital
The system is called capitalism for a reason — it is the rule of capital. The owners of capital. Those who have capital generally divide into two camps, industrialists and financiers, as alluded to above. Industrialists own or are the top managers of enterprises that produce tangible goods and services, while financiers trade, buy and sell stocks, bonds and other securities, continually inventing new instruments to profit off virtually every aspect of commercial activity. The two compete fiercely for the bigger half of the profits and thus have sometimes conflicting interests, but there is considerable overlap between the two sectors of capitalists. Crucially, their class interests are completely aligned.
Employees are paid far less than the value of what they produce; this is the source of corporate profit. The bloated salaries and profits generated by exploitation of employees is far greater than can be thrown into spending on luxuries or used for business investment, so these massive piles of money are diverted into financial speculation, swelling an already bloated financial sector, which grabs large amounts of this speculative money for itself. Top managers of industrial firms in turn are paid largely in stock so that their interests are “aligned” with that of finance capital, to use Wall Street lingo.
This is the ordinary and routine working of capitalism. As long as people consent to this arrangement — and thus consent to their ongoing exploitation — all is well for industrialists and financiers. But what if consent begins to be withdrawn? What if an economic downturn is so severe and sustained that it becomes difficult to extract profits? This is when capitalists begin to think about putting an end to formal democracy and instituting authoritarian rule. At the most extreme, this authoritarian rule can slide into fascism. Such a scenario is always a possibility because capitalism is inherently unstable. Twenty years into the 21st century, we’re already living through a third economic downturn, each worse than the previous one.
United Statesians, for now, have pushed back against a potential slide toward fascism by ousting Trump. But the recent global trend is unmistakable: Far right authoritarian ideologues remain in office in countries around the world, among them Brazil, the Philippines, Hungary and Poland, and the U.S. has a history stretching back to the 19th century of installing right-wing dictators and overthrowing democratically elected governments. Capitalists have a variety of economic tools at their disposal to maintain their rule, the armed force of governments to enforce their rule, and a variety of institutions and control of the mass media to reinforce ideologies upholding their rule. Elections in capitalist countries decide who gets to govern, not who gets to rule.
Formal democracy is the preferred method of ruling, but if violence, ranging all the way to fascism, is the only way to maintain their power, that is what industrialists and financiers will insist their governments impose. Fascism can’t arise or be raised to power without a social base, a badly confused bloc that supplies support and the shock troops. This social base has to be maleducated enough to believe the obvious lies spewed by the leader and be enthused by the permission granted to openly display their hatreds, be those racism, misogyny, nativism, homophobia or anti-Semitism, permission wrapped in virulent nationalism. The millions of fanatical Trump followers are a monument to the lack of education in the U.S., a pervasive propaganda system and the product of decades of relentless Republican Party ideology. There can be no potential fascist movement without such a social base.
Given this fanatical support of Trump despite the massive failures and undisguised class warfare of his administration, both the followers and the shock troops remain even when Trump leaves the White House. Will they be called on in the future? If you don’t want the threat of fascism to hover in the background, you’ll have to get rid of capitalism.
Amidst all the talk about if the global Covid-19 pandemic will lead to an opening for socialism, or at least a reduction in the grip of neoliberalism, in the wake of capitalism’s failures, a more immediate question is if there is to be a reversal of the march of the Right in electoral politics.
Elections in New Zealand and several Australian states are scheduled for later this year, as are Brazilian municipal, Venezuelan parliamentary and French senatorial elections. The results in Brazil will be of particular interest, given the disastrous administration of Jair Bolsonaro, the extreme right president who lusts for dictatorship and continues to deny the effects of the virus despite the vast numbers of people who are dying. Will Brazilians turn local elections into a referendum on their neofascist president?
To the north, the U.S. elections in November will unavoidably be a referendum on the disastrous régime of Donald Trump, who has mishandled the pandemic from the beginning. But to be counter-intuitive: Will the economic collapse triggered by the pandemic serve to save him?
Times Square never looks like this
Bear with me here. By any logical standard, the performance of President Trump (I still can’t believe I have to put those two words together) even before the pandemic struck should have been sufficient to ensure the biggest electoral loss in history. But if logic was operative, he wouldn’t have been elected in the first place, and his fanatical base is completely impervious to facts, reason or reality. Nonetheless, his base is too small on its own for him to be re-elected. Thus President Trump has consistently staked his presidency on the state of the economy, falsely claiming that the economy has been just wonderful.
For his billionaire buddies, the economy has been wonderful. Not so much for working people. The official low unemployment rate is not a realistic measure. Only working people who are receiving unemployment benefits are counted as “unemployed” in official statistics issued by countries around the world. Thus actual unemployment rates around the world are much higher than the “official” rates, generally about twice as high. A better measurement is the “civilian labor force participation rate” — all people age 16 or older who are not in prison or a mental institution. By this measure, the percentage of people holding jobs in the U.S. remains significantly below its May 2000 peak.
And if what jobs there are don’t pay enough to survive on, what good is that? As a meme recently making the rounds of the internet featured a store clerk saying “Sure the Trump administration has created jobs. I have three of them!”
Overdue for the next recession
The long “recovery” from the 2008 crash could not have lasted much longer. Entering 2020, the world’s capitalist economies were overdue for a recession. The question is always what the proximate cause will be. A downward slide in the U.S. economy would have wiped out the single reason the Trump gang could point to for a reason to vote for the incumbent. In normal circumstances, that would almost certainly have ensured his deserved defeat.
An economic downturn has arrived, with astonishing force. The wildcard is that the downturn’s proximate cause is the pandemic. Will this provide the Trump gang with the excuse that enables them to evade their responsibility? It is no stretch to imagine the talking points once the 2020 presidential campaign resumes: “We had nothing to do with it; it was the virus; nobody could have foreseen it.” President Trump’s base will of course lap up such nonsense and it’ll be endlessly repeated on Fox News. The rest of the corporate media isn’t likely to be a big help here; it is easy to foresee endless hand-wringing pablum asking if the downturn could have been avoided and if the administration is responsible.
In such circumstances, it is possible that the Trump gang will be able to avoid their responsibility and escape blame for an economic downturn that is likely to last for some time, particularly if a significant fraction of the vast numbers of small businesses forced to close under government orders are unable to survive. That seems likely, given that small businesses are expected to keep paying rents to landlords despite having no income and a federal small business loan program that swiftly proved inadequate. Why is it that everybody is expected to sacrifice, except landlords? And except Wall Street, of course.
If, despite the foregoing, the 2020 U.S. election turns on the economy without allowing for excuses, then the Trump gang will be finished. But if instead the state of the economy is knocked out as an issue because the Trump gang successfully portrays the economic crash as a deus ex machina for which they have no responsibility (which would require some corporate media collaboration), then the election will hinge on the ability of both corporate parties to bring out their base on election day, and the degree to which voters loathe the candidates.
The Democratic Party has few peers in its ability to blow elections as was amply demonstrated in 2016. Having done all it could to hand its nomination to its least popular candidate and thus run a Wall Street corporate centrist in an election in which voters were clamoring for a change, the Democratic Party national leadership decided to once again elevate a Wall Street corporate centrist.
The failure of the political process
Joe Biden is not as unpopular as Hillary Clinton, but nonetheless he is emblematic of a party that is incapable of learning lessons or imagining a world not under the thumb of the financial industry. One can imagine the panic that must have set in when a few financiers casually made it known publicly that they would back President Trump if Bernie Sanders were the nominee. Senator Sanders, with his formal endorsement of Vice President Biden on April 13, has formalized the end of his campaign. Attacks on Senator Sanders for being a “sheepdog” or any other such useless epithet, clarify nothing. He won’t have any ability to be an influence on a Biden administration, and retain any ability to shift the Democratic Party at least a little bit leftward, if doesn’t act as a good political soldier and work to elect Vice President Biden. That is hard political reality, however much either Sanders supporters or those to the left of the Vermont senator find it distasteful.
It’s once again a “lesser evil” vote for United Statesians. A bitter pill to swallow. Given the unprecedented danger of the Trump gang, it is perfectly understandable that millions who would have preferred a better choice will vote for the Democratic nominee. If popular opinion puts all due blame for the horrific death toll from the virus on the Trump régime, the Orange Tantrum-Thrower will lose, but that is nothing to count on given that the wanna-be fascist dictator has gone all his life avoiding responsibility for his actions. As already speculated above, it is conceivable that the pandemic will provide an escape card from responsibility. How much will the corporate media enable that escape and how willing will voters be to swallow it?
All the above is short-term politics. (I am assuming the November vote will be held as usual; the voting schedule is specified in the constitution.) The larger question emanates from the spectacular inability of capitalism, and especially of institutions hollowed out by neoliberalism, to cope with the Covid-19 crisis. The failure of neoliberal ideology is clearly seen by large numbers of people as never before, and, to a lesser extent, the failure of capitalism itself, not simply its most recent permutation. But observation and organized action in response are not the same.
Neoliberalism was already breaking down and seen as an ideology needing to be sent to the dustbin of history by ever larger numbers of people. Should neoliberalism be replaced by a somewhat reformed brand of capitalism, a reform that would prove short-lived, or should we properly target the real problem — capitalism itself. Reform the unreformable, or a better world based on human need and environmental stability rather than a mad scramble for private profits and ever widening inequality?
That is a question beyond any election and a question to be answered by all the world’s peoples.
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Systemic Disorder 