Has the IMF renounced neoliberalism? Well, not really.

Sound the alarms! Could the International Monetary Fund be reconsidering neoliberalism? Sadly, no, once we actually read the short document “Neoliberalism: Oversold?

The title certainly does grab our attention, and on the very first page, there is this highlighted passage: “Instead of delivering growth, some neoliberal policies have increased inequality, in turn jeopardizing durable expansion.”

Ah, but disappointment quickly sets in while reading the first paragraph, which purports to hold up Pinochet-era Chile as model “widely emulated across the globe,” including a mention of Chicago School godfather Milton Friedman proclaiming Chile an “economic miracle” in 1982. The actual record is not mentioned, nor is the little matter of military dictator Augusto Pinochet’s wave of terror that killed, imprisoned, tortured and imprisoned tens of thousands mentioned. Details in the eyes of the IMF, we presume.

The institution of neoliberalism in Chile, 1973: La Moneda, the presidential palace, is bombed (photo by Biblioteca del Congreso Nacional de Chile)

The institution of neoliberalism in Chile, 1973: La Moneda, the presidential palace, is bombed (photo by Biblioteca del Congreso Nacional de Chile)

In reality, Chile’s poverty rate skyrocketed to 40 percent under Pinochet, while real wages had declined by a third and one-third of Chileans were unemployed during the last years of the dictatorship. Unemployment figures do not include the many urban Chileans who worked as “car minders” earning small tips from waving orange rags at motorists pulling into parking spaces and taking the motorists’ coins to insert into parking meters, which Pinochet’s planning minister, a Friedman disciple, declared to be “a good living.” Lavish subsidies were given to large corporations, public spending was slashed and the social security system was privatized. The privatized social security system was so bad for Chilean working people that someone retiring in 2005 received less than half of what he or she would have received had they been in the old government system.

Let us not forget the humanity of those whose lives were crushed by Pinochet and Friedman.

Pinochet's soldiers show what they think of literature (photo from CIA Freedom of Information Act via Wikimedia Commons)

Pinochet’s soldiers show what they think of literature (photo from CIA Freedom of Information Act via Wikimedia Commons)

Back to the IMF paper, which defines neoliberalism blandly as “deregulation” and “a smaller role for the state.” A far better definition of neoliberalism is provided by Henry Giroux:

“As an ideology, it construes profit-making as the essence of democracy, consuming as the only operable form of citizenship, and an irrational belief in the market to solve all problems and serve as a model for structuring all social relations.”

The authors of the IMF paper gingerly work themselves up to some mild critiques, lamenting that “The benefits in terms of increased growth seem fairly difficult to establish when looking at a broad group of countries” and that “The costs in terms of increased inequality are prominent.” Furthermore, the odds of an economic crash are raised, among other problems:

“Austerity policies not only generate substantial welfare costs due to supply-side channels, they also hurt demand—and thus worsen employment and unemployment. … [I]n practice, episodes of fiscal consolidation have been followed, on average, by drops rather than by expansions in output. On average, a consolidation of 1 percent of [gross domestic product] increases the long-term unemployment rate by 0.6 percentage point and raises by 1.5 percent within five years the Gini measure of income inequality.”

Decades of stagnant wages, hollowing out of manufacturing bases and steadily increasing inequality, augmented by unsustainable stock-market bubbles and capped by eight years and counting of economic downturn and stagnation, and that is the best the IMF can do? The paper concludes with this passage: “Policymakers, and institutions like the IMF that advise them, must be guided not by faith, but by evidence of what has worked.”

The belief in neoliberalism and austerity, or supply-side economics, or Reaganism, or Thatcherism (whatever we want to call it) has always been based on faith, at least on the part of some of those who promote it. For many other financiers and industrialists, it surely is the case is they knew just what was going to happen and cheered it all the way because they were going to benefit handsomely. Economics may be the dismal science, but dismal though classical economics is, it is far more art than science, as in the art of fleecing.

Millions for the boss, cuts for you

More is never enough. By now we really don’t need yet another statement of inequality, but here goes anyway: The average ratio of chief executive pay to employee pay has reached 335-to-1 in the United States.

And some of the highest paid CEOs were at the companies that stash the most money in overseas tax havens. Among the giant corporations that comprise the Standard & Poor’s 500, the 25 at the companies with the most unrepatriated profits hauled in 79 percent more than other S&P 500 chief executive officers, reports the AFL-CIO union federation’s Paywatch 2016 report. Just 10 corporations — Apple, Pfizer, Microsoft, General Electric, IBM, Merck, Cisco Systems, Johnson & Johnson, Exxon Mobil, and Hewlett-Packard successor HP Inc.  — are believed to be holding about $948 billion in accounts outside the reach of tax authorities.

Being at the top of the corporate pyramid certainly pays — the average S&P 500 chief executive officer hauled in $12.4 million in 2015, while the average non-supervisory worker earned $36,875. That average worker would have to work 335 hours to earn what the CEO makes in one hour. For a worker earning the federal minimum wage, the pay ratio is 819-to-1.

CEO-to-worker ratioThe Paywatch 2016 report illustrated this stark inequality with the example of Mondelez International Inc., where Chief Executive Officer Irene Rosenfeld earned close to $20 million last year, or 534 times the average worker’s pay. At the same time, Mondelez asked workers at a Nabisco cookie and cracker plant in Chicago to take a permanent 60 percent cut in wages and benefits, or their jobs would be moved to Mexico. As nobody could agree to such conditions, hundreds of people were laid off. Ms. Rosenfeld, incidentally, received a $7 million raise for her troubles, likely comparable to the combined pay of the laid-off workers.

Lest we fret that Mondelez may be undergoing tough times, please don’t lose any sleep — the company reported net income of $7.3 billion in 2015 and $15 billion for the past five years. Nor should sleep be lost worrying about Mondelez’s tax “burden” as it paid all of $49 million in U.S. taxes in 2015. That’s a tax rate of less than one percent.

That company is not unique, of course. Workers at Verizon Communications Inc. have been on strike since April 13 as Verizon seeks to move call-center jobs overseas, outsource instillation work to low-wage, non-unionized contractors, and reduce benefits. Verizon wants to stick it to its workers despite racking up $45 billion in net income over the past five years, at the same time paid no taxes and has stashed $1.3 billion in offshore accounts.

Avoiding taxes has become an art form for U.S. corporations, especially those who operate as multi-nationals. Dodging taxes is simply another “capitalist innovation,” and so common that a single small building in the Cayman Islands (where the corporate tax rate is zero percent) is the registered address for almost 19,000 corporations. Tax dodging also means higher pay for top executives — yet another corporate subsidy.

tax burden chartThis goes beyond simple unfairness, although corporate tax collection in the U.S. has declined drastically, falling from about one-third of U.S. government tax receipts in the 1950s to 10 percent in 2015; it was as low as 6.6 percent in 2009. Nor is it simply that less taxes collected reduces the ability of governments to effectively provide an adequate social safety net. Higher taxes actually lead to more jobs. Countries that provide more subsidies toward services that are complementary to work — such as child care, elder care and transportation — have higher workforce participation rates. Yes, contrary to orthodox economics, higher rates of taxation lead to more employment.

Let’s not reduce all this to simply greed. The relentless competition endemic to capitalism mandates that corporations engage in an endless race to the bottom. “Grow or die” is an inescapable mandate — if you don’t grow, your competitor will and put you out of business.

That’s a war that working people can never win. Class warfare rages hotter than ever, but there is only one class that is waging it.

We can dream, or we can organize

The swift rise, and swift crumbling, of the Occupy movement brings to the surface the question of organization. Demonstrating our anger, and doing so with thousands of others in the streets, gives us energy and brings issues to wider audiences.

Yes spontaneity, as necessary as it is, is far from sufficient in itself. For all the weeks and sometimes months that Occupy encampments lasted, little in the way of lasting organization was created and thus a correspondingly little ability to bring about any of the changes hoped for. Nor is social media a substitute for mass action.

Organization, specifically a party, is the missing element, Jodi Dean argues in her latest book, Crowds and Party.* Leftists who want to create a better world have to get past their criticisms of the party form, and not become trapped in their own self-critique or allow critiques of specific parties to become a universal rejection of the party form. The party is a permanent body that can channel the crowd’s promise of justice into organized political struggle, she argues.

Crowds and Party coverWith a sustained, organized movement, real change is not possible. How then to sustain the enthusiasm of a spontaneous “crowd,” such as Occupy? Through a more structured form capable of organizing activists toward concrete goals worked out through mutual discussion, distilling practice and experience, and providing the necessary scale. The ideology of individual autonomy is a product of capitalist ideology; a Left that promotes individualism is a Left that is reinforcing capitalist ideology.

Professor Dean argues that to do so is to accept markets and the capitalist state as a given; focusing on individuals is a substitute for focusing on necessary revolutionary transformation. She writes:

“The realism in which the Left has been immersed in the neoliberal decades has meant that even when we are fully conscious of the deep inequality of the system in which we find ourselves, we confirm and conform to the dominant ideology: turn inward, enclave, emphasize the singular and momentary. … [W]e found ourselves participating in individuated, localized, or communicatively mediated activities without momentum, duration, or a capacity for political memory. Or we presume that we have to focus on ourselves and thereby redirect political struggle back into ourselves. In a brutal, competitive, and atomized society, psychic well-being is so difficult that success on this front can seem like a significant accomplishment. Trying to do it themselves, people are immiserated and proletarianized and confront this immiseration and proletarianization alone.” [pages 71-72]

The ‘beautiful moment’ is a start, not a culmination

What Professor Dean calls the “politics of the beautiful moment” represents a beginning, not an end. By this “beautiful moment,” she refers to a spontaneous outburst of popular action, such as Occupy, and the tendency among some to see such spontaneity as an end in itself. The “crowd,” as she terms this spontaneity, provides an opportunity for an emergence but the party is the form for meeting the challenge of maintaining the fidelity of an event. Those who mistake an opening for the end,

“treat organization, administration, and legislation as a failure of revolution, a return of impermissible domination and hierarchy rather than as effects and arrangements of power, rather than as attributes of the success of a political intervention. The politics of the beautiful moment is no politics at all. Politics combines the opening with direction, with the insertion of the crowd disruption into a sequence or process that pushes one way or another. There is no politics until a meaning is announced and the struggle over this meaning begins.” [page 125]

The imposition of the popular will over the National Guard at the dawn of the Paris Commune is an example of a “crowd event,” Professor Dean argues, but this event did not create the Commune — the Commune was pre-figured by earlier attempts. The overlap of the Commune form and the “crowd event” created the space for emancipatory egalitarian politics. Similarly today, the crowd is not an alternative political arrangement, it is an opening for a process.

Without targeting the capitalist class, there can be no end to exploitation. Movements inevitably run up against state power — how can a movement sustain itself in the face of repression? An unorganized movement can’t, and indeed Occupy withered once the Obama administration, the federal security apparatus and local police forces combined to suppress it.

Or, to put it another way, you can ignore the state all you want, but the state will not ignore you.

Centralization and hierarchy have been problems in Left parties of the past, but this is nothing unique to the Left; all political organizing runs this risk. Political organization unavoidably creates a gap between the few and the many, and organizing means creating differentiation, but, Professor Dean argues, this gap need not be permanent nor with set divisions. This gap is also a social space where the crowd’s association creates space for an alternative perspective to arise. The effects that arise when large numbers of people organize can’t be avoided and to believe otherwise is to indulge in “the fantasy of the beautiful moment.”

Opponents of parties and formal organization are incorrect in charging that workers were excluded from Left parties and that the leaders of those parties believed that an intellectual vanguard held all knowledge. This is a misreading, Professor Dean writes:

“Lenin’s point is that political consciousness comes from outside the economic struggle, not [outside] the class struggle. The economic struggle takes place between particular interests within the field of capital. The terms of the struggle are set by capitalism. The political struggle—for communists—is over the field itself. When ‘we’ is used as the designator for the subject of a politics it asserts more than a collective will. It announces a will to collectivity, a will to fight together on terms that challenge rather than accept the given. Class consciousness is not spontaneous. As [Slavoj] Žižek emphasizes, what is spontaneous is misperception—the perception that one is alone or that one’s circumstances are unique. The political ‘we’ of the party ruptures this immediate consciousness to assert a collective one in its place.” [pages 198-199]

No going forward if we erase the past

Anti-party critics seek to have nobody hold political knowledge, the author charges, and that is a serious failing: Erasure of the past is renouncing revolutionary power. The collective space of struggle creates the conditions for new perspectives to arise, and the party establishes this space.

Professor Dean, in the last two chapters, provides several inspiring examples of communist activists finding power in their collectivity. The young Jewish woman who finds the courage to stand up to her tyrannical father because she feels the power of her party comrades behind her; the impoverished Black laborer who enters the Communist Party illiterate because of his poor schooling yet becomes a strong organizer and eventually writes a book; the organizers who do far more than they ever thought possible and continue to push themselves forward. When a new recruit had to have basic concepts explained to him, he wasn’t ridiculed or made to feel inferior; instead, the more experienced took the time to patiently explain in detail.

There is no transformation without organization, the author argues:

“To reduce the Party to its excesses fails to recognize its indispensable capacity to generate practical optimism and collective strength. Such a reduction likewise reduces the world, contracting possibility into what can be done instead of forcing the impossibility of what must be done. … The party continues the moment of belonging, intensifying and expanding it in solidarity purpose.” [pages 247-248]

Here, however, the author could have strengthened her argument with a discussion of those excesses. Communist parties did have weaknesses (as all parties do). She touches on some of this, briefly, in the introduction, pointing out that the authoritarianism of Left parties in the East, the surrender to capitalist assumptions of Left parties in the West, and the failure of Left parties to incorporate identity politics as reasons for so many turning their backs on the party form.

Why was this? One reason was the imbalance between theory and practice; practice with too little theory behind it leads to practice that spins its wheels in place. For all the good that the British and U.S. communist parties achieved in the lives of people it reached, particularly in the 1930s, that activity did not lead to an ability to grow beyond small followings. The extreme policy zigzags of alternately denouncing all other organizations with tailing those groups previously denounced, and embarrassing episodes such as Lysenkoism, demonstrated not only fatal over-centralization but an organization in which theory had disastrously fossilized into incontestable dogma.

Parallel to this is the concept of the single party: Why can’t there be multiple organizations working toward a goal of full human emancipation? No organization, much less an individual leader, has all the answers. Regardless of how we see this question, however, there is no escaping that organization and learning from the past are critical to sustaining any movement that purports to bring a better world into being. The answer is to learn from past mistakes, not to throw out the past. “To advance, we need to organize,” Crowds and Party correctly concludes. “We need a party for the people in the crowd.”

The title Crowds and Party is carefully chosen. Professor Dean has linked these two, and given us a powerful defense of organization, of demonstrating that only as part of collectives, rather than as individuals, can we hope to overcome the mounting horrors that capitalism unleashes on the world.

* Jodi Dean, Crowds and Party [Verso, London 2016]

We all pay for low wages

When you are paid starvation wages, it’s up to public-assistance programs to make up the difference. That government assistance, costing treasuries billions of dollars per year, is part of the high cost of low wages.

Raising the federal minimum wage to $12 an hour would save an estimated $17 billion per year for U.S. taxpayers, according to a study by the Economic Policy Institute. The EPI’s study, “Balancing paychecks and public assistance,” found that, not surprisingly, low wages equal government help. A majority of United Statesians who earn less than $10 an hour receive public assistance, either directly or through a family member.

The study’s author, David Cooper, examined participation in eight federal and state means-tested programs for low-income families — the earned income tax credit; the refundable portion of the Child Tax Credit; the Supplemental Nutrition Assistance Program (what used to be known as food stamps); the Low Income Home Energy Assistance Program; the Supplemental Nutrition Program for Women, Infants and Children, commonly known as WIC; Section 8 housing vouchers; Medicaid; and the Temporary Assistance for Needy Families program and its state and local equivalents.

Protestors outside a McDonald's in Minneapolis demand a $15 hourly wage and paid sick days (photo by Fibonacci Blue)

Protestors outside a McDonald’s in Minneapolis demand a $15 hourly wage and paid sick days (photo by Fibonacci Blue)

Working people with low wages use these programs heavily. One-third of Supplemental Nutrition Assistance Program recipients are full-time workers and one-half of WIC recipients are full-time workers.

Contrary to right-wing propaganda, most recipients of public assistance work, a large number of them full time. The EPI study reports:

  • Among families or individuals receiving public assistance, two-thirds (67 percent) work or are members of working families (families in which at least one adult works). When focusing on non-elderly recipient families and individuals under age 65, this percentage is 72 percent.
  • About 69 percent of all public-assistance benefits received by non-elderly families or individuals go to those who work.
  • About 47 percent of all working recipients of public assistance work full time (at least 1,990 hours per year).

Nearly $53 billion of public-assistance money is paid annually to people who work full time, the EPI study reports. And, full- or part-time, money going to working people is concentrated in specific industries. More than half goes to workers in three sectors: educational, health and social services; arts, entertainment, recreation, accommodation and food services; and retail trade.

Privatizing profits, socializing costs

Although not addressed in the EPI study, a big conclusion to be drawn from this data is that these billions of dollars of public-assistance money constitutes a massive subsidy of business. Often highly profitable businesses. Take War-Mart, for example. Wal-Mart reported net income of $14.7 billion for 2015 and nearly $80 billion for its last five fiscal years. Yet the company pays it employees so little that employees organize food drives for themselves while it dodges billions of dollars of taxes and receives further billions of dollars in government subsidies.

Currently, the federal minimum wage is $7.25 an hour. Adjusted for inflation, the U.S. minimum wage peaked in 1968 when the then $1.60 rate would be worth $10.95 in 2016 money. So although that peak total is itself low, the federal minimum wage has lost more than one-third of its value.

Or, to put this in another perspective, one of the demands of the March on Washington in 1963 was a minimum wage of $2 an hour. Adjusted for inflation, $2 an hour in 1963 would be worth $15.56 today. So today’s activists demanding a $15 minimum wage are simply asking for the same thing that was asked a half-century ago. Nothing outlandish.

It is no secret that wages have badly lagged productivity, nowhere more in the global North than in the United States. Wages for U.S. workers have fallen behind productivity gains since the 1970s, to the point that the average U.S. household receives $18,000 per year less than it would had wages kept pace. Canadian households are about $10,000 behind. Differentials between wages and productivity are also found, albeit in less drastic form, across Europe and in Japan.

We can’t order a return to Keynesianism

So what conclusion should we draw from all this? Unfortunately, the EPI study concludes with what can only be termed weak-tea liberalism. Wishing for a return to Keynesianism, the author writes:

“[W]e can raise wages by eliminating the lower subminimum wage for for tipped workers, updating overtime protections, strengthening workers’ ability to organize and negotiate with employers collectively, improving enforcement of labor laws, providing undocumented immigrant workers a path to citizenship, and ensuring monetary policy prioritizes full employment.”

There is nothing wrong with any of these prescriptions. Such reforms would be quite welcome. But these goals can not simply be conjured into existence. Nobody decreed we shall now have neoliberalism and nobody can decree we shall now go back to Keynesianism. We haven’t gotten to the disastrous state we are in by accident or simply because of the personal decisions of corporate executives and financiers.

Rather, the neoliberalism we experience today is the logical result of capitalist development; “logical” in the sense that the relentless scramble to survive competition eventually closed the brief window when rising wages were tolerated and government investment encouraged. The Keynesian policies of the mid-20th century were a product of a specific set of circumstances that no longer exist and can’t be replicated.

Intensified competition over private profits, and that “markets” should determine social outcomes, inexorably leads to a consolidation in which industries are dominated by a handful of giant corporations, and those corporations gain decisive power over governments and relentlessly reduce overhead (especially wages and benefits) in a scramble for survival.

Fighting back is surely what working people around the world need to do. But restoring a “golden age” of capitalism that never really existed (and definitely didn’t if you were a woman confined by limited options or an African-American facing officially sanctioned discrimination and/or state-endorsed terrorism) is a quixotic goal. Better to drive our energies into creating a better world, one in which the economy is geared toward human need rather than private profit.

Another goodbye to democracy if Transatlantic Partnership is passed

Corporate control on both sides of the Atlantic will be solidified should the Transatlantic Trade and Investment Partnership be passed. Any doubt about that was removed when Greenpeace Netherlands released 13 chapters of the TTIP text, although the secrecy of the text and that only corporate representatives have regular access to negotiators had already made intentions clear.

Health, safety, environmental and food laws will all be at risk, with United States negotiators continuing to seek the elimination of European safeguards against genetically modified organisms. But European Union negotiators, although as yet unable to find sufficient common ground with their U.S. counterparts on some issues, are offering plenty of dubious language at the behest of European multi-national corporations.

The Transatlantic Trade and Investment Partnership is very much similar to the Trans-Pacific Partnership, and although negotiations over it are apparently far from complete it is firmly in the TPP’s anti-democratic spirit. The Transatlantic Partnership, just like other “free trade” agreements, has little to do with trade and much to do with granting the wish lists of corporate executives and financiers, complete with secret tribunals that can overturn legislation without appeal.

Germans protest against the TTIP in Hannover on April 23 as German Chancellor Angela Merkel and U.S. President Barack Obama confer (photo by Bernd Schwabe in Hannover)

Germans protest against the TTIP in Hannover on April 23 as German Chancellor Angela Merkel and U.S. President Barack Obama confer (photo by Bernd Schwabe in Hannover)

As is customary with “free trade” agreements, the devil is in the details. What really lies within the dry, bureaucratic language is text that leaves little, if any, room for democratic control over a wide range of legislative oversight. In part this is because the text uses words like “must” and “shall” for what signatory governments are expected to do on behalf of multi-national corporations but words like “may” and “can” when it comes to the very brief mentions of health, safety, environmental and labor concerns, and in part because of who will be interpret the text, and how.

Under existing “free trade” agreements, the countries with stronger regulations, such as Canada under the North American Free Trade Agreement, are routinely ordered to overturn them as “barriers” to trade. Smaller countries are routinely sued by multi-national corporations for attempting to safeguard sensitive environments or regulate tobacco, such as El Salvador’s attempt to protect its largest remaining water source from a gold mine. These suits are not heard in ordinary courts, but rather in secret tribunals in which corporate lawyers who specialize in representing multi-national capital in international disputes switch hats and sit in judgment of similar cases as judges.

Governments must meet corporate expectations

Such one-sided rules are imbedded in the Transatlantic Trade and Investment Partnership text. The leaked chapter on dispute settlement contains unmistakeable language. Multi-national corporations will be eligible to sue on the basis that “a benefit the Party could reasonably have expected to accrue to under this Agreement is being nullified or impaired.” A series of rulings handed down by the secret tribunals in similar cases have established that an “investor” is eligible to sue for any potential profits it asserts it would have earned had not a regulation it dislikes been in place.

The chapter goes on to set out the necessary qualifications of arbitrators, stating that they must have “expertise” in the field. These “experts” will almost inevitably be corporate lawyers as they fill the rosters of the secret tribunals. The clause that the judges “shall be independent and serve in their individual capacities” is a joke — these are people who have spent decades serving corporate clients and thoroughly absorb their clients’ perspective. That they have “officially” switched hats is meaningless.

That there will be no appeal against judgements handed down is exemplified three pages later. It is EU negotiators who propose these two sentences: “The ruling/report of the panel shall be unconditionally accepted by the Parties” and “The Party complained against shall take any measure necessary to comply promptly and in good faith with the panel ruling.” What these mean is that there can be no appeal against what tribunal panels consisting of three corporate lawyers decree and that laws must be changed immediately based on the secret tribunal’s ruling.

There is much more there. A reading of the chapter on sanitary and phytosanitary measures, which, inter alia, covers regulations on agriculture, can easily be interpreted to overturn bans on genetically modified organisms. Here is the chapter’s Article 11 as proposed by EU negotiators:

“1. Sanitary and phytosanitary procedures shall be established with the objective of minimizing negative trade effects and simplifying and expediting the approval and clearance process while ensuring the fulfillment of the importing Party’s requirements. 2. The Parties shall ensure that all sanitary and phytosanitary procedures affecting trade between the parties are undertaken and completed without undue delay and that they are not applied in a manner which would constitute an arbitrary or unjustifiable discrimination against the other Party.”

Corporations would get last word on regulation

Despite the European Commission’s attempts to paint itself as heroically standing against U.S. insistence on forcing GMOs on European consumers, this EU language could be interpreted to overturn bans on GMOs. That is especially so in the wake of the already agreed-upon language of Article 5, where we read:

“When issuing or submitting any final administrative decision for an SPS regulation, the Party shall make publicly available on the Internet an explanation of: … any alternative identified through public comments, including by a Party, as significantly less restrictive to trade.”

Under this clause, governments must make the case on behalf of complaining corporations that want to eliminate a protective regulation! There is further language demanding that any new regulation be justified, including a requirement that a government explain why it did not adopt any alternatives that would be “less restrictive to trade.” There is precedent here under the North American Free Trade Agreement, in which a tribunal, in ordering that Canada reverse a ban against PCBs, a carcinogen banned under two Canadian treaties, ruled that, when formulating an environmental rule, a government “is obliged to adopt the alternative that is most consistent with open trade.” So much for democracy!

Grand Place, Brussels (photo by Wouter Hagens)

Grand Place, Brussels (photo by Wouter Hagens)

There is also an agriculture chapter, which contains this sentence: “The Parties shall work together to facilitate the successful conclusion of agriculture negotiations in the WTO that substantially improves market access for agricultural goods.” All the activist work that prevented the conclusion of World Trade Organization talks over the past decade would be undone, and provide an additional opening for GMOs and the elimination of other safety rules.

Thus we should take with mounds of salt this public statement by European Trade Commissioner Cecilia Malmström, issued on May 2:

“Any EU trade deal can only change regulation by making it stronger. … No trade deal will limit our ability to make new rules to protect our citizens or environment in the future. I am simply not in the business of lowering standards.”

Commissioner Malmström further asserts that “no, the EU industry does not have greater access to EU negotiating positions than other stakeholders.” That statement is on par with someone offering to sell you the Brooklyn Bridge and the Eiffel Tower. The public-interest group Corporate Europe Observatory, upon successfully petitioning to receive documents from the European Commission, found that that of 127 closed meetings preparing for the Transatlantic Partnership talks, at least 119 were with large corporations and their lobbyists. Although it is true that EU negotiators are sometimes at odds with their U.S. counterparts, the EU has offered its share of anti-democratic measures, not inconsistent with the lack of accountability Europeans have come to expect from EU institutions.

Watchdog groups sound multiple alarms

In its latest assessment of the Transatlantic Trade and Investment Partnership, Corporate Europe Observatory said the TTIP will negatively impact laws on both sides of the Atlantic, noting that “the new EU proposal on regulatory cooperation in TTIP does nothing, not even little, to address the upcoming democratic threats.” The Observatory says:

“Regulatory cooperation, on the surface a way to ‘harmonise’ rules across the Atlantic, could in practice weaken rules on protecting us against everything from toxic chemicals and unhealthy food, to wild speculation by banks. The European Commission recently published its new positions on this cooperation. The two chapters they released reveal the Commission is willing to change how it makes laws to favour trade and multinationals over all public interest considerations. Under regulatory cooperation trade officials will continue to negotiate our future and existing laws. This pushes contentious issues farther away from public scrutiny to be brokered over the coming years after TTIP is passed, giving big business lobby groups ample opportunities to influence the result of the decision-making.”

Other watchdog groups sound similar warnings. The Sierra Club, noting the words “climate change” never appear in the TTIP text, points out some of its environmentally destructive measures:

“Under the National Treatment terms of the leaked text, the U.S. Department of Energy would be required to automatically approve the export of liquefied natural gas to the EU. … Both the U.S. and the EU have proposed “regulatory cooperation” rules that would undermine climate and environmental protections if they are deemed harmful to trans-Atlantic trade or investment. The U.S. has proposed that governments on both sides of the Atlantic should be required to review proposed regulations before enactment to pursue compliance with ‘international trade and investment obligations.’ The EU has proposed similar language.”

Compliance with “international trade and investment obligations” would mean conforming to the types of secret-tribunal decisions mentioned above.

Friends of the Earth, in its review of the leaked text, provides this warning:

“Sensible regulatory safeguards, such as those related to food safety and toxic chemicals, among many others, would also be stymied. Industry-friendly, cost-benefit analysis would hamstring new environmental initiatives. For example, insecticide safety standards would be lowered if the undervalued ‘benefit’ of new regulations protecting the bees is outweighed by the ‘cost’ to corporate profits, thus threatening the pollinators necessary for our food system.”

Yep, it’s as bad as we thought it would be

The senior policy analyst for the Institute for Agriculture and Trade Policy, Steve Suppan, in noting that predictions about the TTIP’s impact on agriculture “have been sadly confirmed,” wrote:

“The text shows the U.S. Trade Representative protecting corporate interests by shielding environmental, health and safety data used in TTIP risk assessment as confidential business information, preventing peer scientific review. The end result of the U.S. proposal would be increasing the burden on governments to justify food safety rules while placing no burden on industry to demonstrate that its products—including new kinds of GMOs, food or agri-nanotechnology products—are safe.”

What we have here is the ordinarily and normal course of capitalist logic. There is no real point to seeing something inherently evil in U.S. or EU officials or their having some particular moral failing. These governments reflect the dominant interests within their countries, as is the case in all capitalist countries. Large industrialists and financiers dominate their societies through control of the mass media and a range of other institutions to the point that their preferred policies become, through heavy repetition, the dominant ideas across society and the ideas adopted by political leaders intellectually and financially dependent on them.

Thus the recent revelations of NSA spying in Europe have had no effect on the Transatlantic Partnership negotiations. The talks began, on schedule, with embarrassing discussions of spying relegated to a “parallel” track, separate from what really counts, the main negotiations to dismantle regulations. The TTIP is quite consistent with the project of the EU: European capitalists’ desire to possess the ability to challenge the United States for economic supremacy, but who cannot do so without the combined clout of a united continent.

Working people on both sides of the Atlantic will be the losers if the TTIP passes, and that is underscored by the secrecy surrounding it. Capitalists, despite the competition among them, are united in their drive for complete domination and profits above all other human considerations. We had better be united across borders in the necessary fight to first stop TTIP and other agreements under consideration, and then roll back those already in place.

Verizon sticks it to its workers because $45 billion isn’t enough

Does a company that racked up $45 billion in profits over the past five years really need to stick it to its employees? The answer depends on who’s asking. From any ordinary human standpoint, clearly no. From the perspective of Wall Street and corporate board rooms, the answer is always an enthusiastic yes.

Class warfare is on display in stark terms at Verizon Communications, and although such direct terms are avoided by the corporate media, there is much talk of the strike against Verizon by the Communications Workers of America and International Brotherhood of Electrical Workers as “labor’s last stand.” That might be a little hyperbolic, or it might be wishful thinking, as such talk of last stands is often intertwined with juxtaposing unionized older sectors with non-unionized sectors that are promoted as “new” and “vibrant.”

We've seen this before: Three unions protest outside Verizon headquarters in Philadelphia in August 2009 (photo by Liz McElroy, for the aflcio2008)

We’ve seen this before: Three unions protest outside Verizon headquarters in Philadelphia in August 2009 (photo by Liz McElroy, for the aflcio2008)

Typical of the corporate media is this report from NBC News, referring to Verizon’s non-unionized wireless operations:

“ ‘The question is, is there going to be a unionized presence in this advanced, technologically innovative kind of industry?’ said Nelson Lichtenstein, director of the Center for the Study of Labor, Work, and Democracy at the University of California — Santa Barbara. The likely answer doesn’t bode well for unions.”

Perhaps an unconscious nod to the technology sector’s old-fashioned exploitation of workers despite its carefully calculated image of modernity, online media has been as responsive to corporate power as has the traditional corporate media. A study of four prominent outlets conducted by Fair & Accuracy In Reporting found 31 direct quotes, either via interviews or press releases, by management during the first days of the Verizon strike versus 13 by workers. The FAIR report said:

“Corporate media coverage of this strike illustrated the fundamental asymmetry of power that still exists between multi-billion-dollar corporations and comparatively small unions. (A union like Communications Workers of America has an annual budget roughly 1/500th of Verizon’s annual revenues of $131 billion.) An analysis of coverage in two major ‘old media’ outlets (New York Times and Washington Post) and two ‘new media’ outlets (Buzzfeed and Vox) exposes a consistent pattern of prioritizing management’s voice over that of the workers or their representatives, to the tune of roughly 2-to-1.”

More is never enough at the top

About 40,000 Verizon workers walked out on April 13, and Verizon continues to take a hard line against its employees. Despite the $45.3 billion in net income the company has reported for the past five years, its notorious tax dodging (more on that below) and the $350 million in compensation ladled out to its top five executives during a recent five-year period, Verizon’s line is — guess what! — the workers are greedy. (Incidentally, Verizon laid off 39,000 workers during that five-year period.) They are portrayed as greedy because they believe they should be paid a living wage and shouldn’t have to relocate for months at a time, away from their families and communities.

Among the complaints of the strikers are Verizon’s moving of call-center jobs overseas; closing of U.S. call centers; outsourcing other work, including installing and maintaining phone lines, to low-wage, non-unionized contractors; and being forced to work far away, sometimes hundreds of miles away, for months at a time. Working conditions are also an issue, as a Communications Workers of America strike update notes:

“Verizon management has created a sweatshop environment with its excessive monitoring and unreasonable overtime assignments. Employees are monitored in call centers by the electronic recording of every call. Outside technicians are monitored with a Global Positioning System tracking every aspect of movement of the company vehicles. The mismanagement of these monitoring tools has created high levels of stress affecting employee productivity and morale. Call center management routinely assign overtime to employees and then without any concern for the employee’s quality of life cancel assignments less than 10 minutes before the scheduled overtime while directing calls to contract vendors. Outside technicians have been forced to work overtime to the point of exhaustion because the Company has not hired enough technicians to keep up with the workload. Members deserve better treatment than this.”

A classic example, not only of the inhuman treatment often meted out by corporate managements, but of technology, in the hands of capitalists, being a tool of repression rather than “liberatory.” This parallels the supposed “innovation” of technology companies that misclassify their employees as “independent contractors” to exploit them more ruthlessly, thus putting old models of weakening labor protections in new “high tech” wrapping. Nor is there anything new about corporations making hundreds of thousands or even millions of dollars per employee and crying they don’t make enough.

A leader at tax dodging

Dodging taxes is yet another capitalist “innovation.” Although far from alone in this, Verizon is flatly lying when it claims it pays the standard 35 percent corporate tax rate of the U.S. In fact, Verizon enjoyed a tax rate of minus two percent for the period of 2008 through 2013. Yep, despite racking up $42 billion in profits during those six years, it paid no federal taxes. For the years 2008 to 2012, Verizon received a composite $535 million in tax rebates. Although the company did pay taxes the past two years, it paid at a rate lower than what its employees pay.

Then there are corporate subsidies — Verizon pocketed $60 million in subsidies over the past decade from the New Jersey state government alone, yet far from hiring new workers, it laid off more than 300 in that state. The corrupt administration of Governor Chris Christie, which has handed out billions of dollars in corporate giveaways, did not ask for the money back from Verizon despite the failure to create jobs.

Once again, Verizon is not unique. Tax dodging by multi-national corporations costs the U.S. about $111 billion per year, according to an Oxfam report.

As an added insult, Verizon spent $110 million on lobbying for the years 2008 to 2014, and holds $1.3 billion in cash in offshore accounts — money that is hidden so as to not be not taxed.

That such behavior is the corporate norm does not excuse Verizon. A company that reports billions of dollars in annual profits, pays millions to its executives and dodges taxes by the billions can afford to pay its workers a living wage and treat them with dignity. Underlying this battle is Verizon’s wish to concentrate more of its workforce to its non-unionized subsidiaries. Workers in the company’s Verizon Wireless unit are not represented by a union and make far less; Verizon is far more interested in investing in this portion of its business than its legacy landline and cable businesses.

Neoliberalism and the promotion of jealousy

A New Yorker article that was not sympathetic to the strikers nonetheless pointed out the big differences in wages that unionized workers are defending:

“When Verizon workers walked off the job in 2000, there were eighty-five thousand workers striking, and they represented the main part of Verizon’s business. In sixteen years, the number of unionized workers has fallen by more than half. And it’s worth noting that a customer-service agent who makes north of sixty thousand at Verizon would make closer to thirty-six thousand on the company’s wireless side, according to the job site Glassdoor.”

Neoliberal ideology aims to generate jealousy that someone else has a good wage with benefits and some measure of security, lest too many people get the idea that they ought to have those wages and benefits, too. Recall the public-relations battle over the removal of collective-bargaining rights from Wisconsin public workers in 2012. Wisconsin Governor Scott Walker and the corporate powers that animate him waged their war on working people through careful framing.

Conservative ideology insists the question should be “Why does someone have something you don’t have” (such as a pension), instead of “Why do you not have something that you should be entitled to but don’t have.” Once the question was framed that way in Wisconsin, and anti-government rhetoric was wrapped around it, there was a short path to making pensions indistinguishable from excessive government spending.

In that case, government workers were specifically made scapegoats for tactical reasons, but unionized workers are more generally the target of scapegoating, and Verizon flacks have made sure to inflate the actual size of strikers’ wages so as to portray them as “greedy.” It remains to be seen if this tactic will work if the strike become lengthy. It also remains to what extent union leaders will cuddle up to the Democratic Party, and thus dampen rank-and-file militancy. Democrats are openly supporting the strikers right now — it is an election year after all — but the decades-long tactic of unions throwing support to Democrats without asking for anything in return has played its part in the decline of unions and increase in inequality.

When you guarantee unconditional support, when you keep your mouth shut when you are forgotten after the election, when you desperately suppress any independent mass movement, when you are so comfortable in your bubble that you can’t conceive of doing anything different, when you are unable to differentiate between a crumb and a loaf, you will lose. And you will keep losing. It’s long past time for working people to build our own organizations independent of corporate parties and to end illusions that the system that creates a Verizon can be reformed and made “nice.”

Military spending is the capitalist world’s fuel

It is common for activists to decry the enormous sums of money spent on the military. Any number of social programs, or schools, or other public benefits could instead be funded.

Not least is this the case with the United States, which by far spends the most of any country on its military. The official Pentagon budget for 2015 was $596 billion, but actual spending is far higher. (Figures for 2015 will be used because that is the latest year for which data is available to make international comparisons.) If we add military spending parked in other portions of the U.S. federal government budget, we’re up to $786 billion, according to a study by the War Resisters League. Veterans benefits add another $157 billion. WRL also assigns 80 percent of the interest on the budget deficit, and that puts the grand total well above $1 trillion.

The War Resisters League notes that other organizations estimate that 50 to 60 percent of the interest would be more accurate. Let’s split the difference — if we assign 65 percent of the interest payments to past military spending (midway between the high and low estimates), then the true amount of U.S. military spending was $1.25 trillion. Yes, that is a gigantic sum of money. So gigantic that it was more than the military spending of every other country on Earth combined.

(Cartoon by Carlos Latuff)

(Cartoon by Carlos Latuff)

China is second in military spending, but far behind at US$215 billion in 2015, according to an estimate by the Stockholm International Peace Research Institute. Saudi Arabia ($87.2 billion), Russia ($66.4 billion) and Britain ($55.5 billion) round out the top five. And lest we chalk up the bloated Pentagon budget to the size of the U.S. economy, the official $596 billion budget constituted 3.5 percent of its gross domestic product, the fourth-highest ratio in the world, while China spent 2.1 percent of its GDP on its military. But if we use the actual total of U.S. military spending, then U.S. spending as a share of GDP leaps to second place, trailing only Saudi Arabia.

The U.S. maintains military bases in 80 countries, and has military personnel in about 160 foreign countries and territories. Another way of looking at this question is the number of foreign military bases: The U.S. has around 800 while the rest of the world combined has perhaps 30, according to an analysis published in The Nation. Almost half of those 30 belong to Britain or France.

Asking others to pay more is endorsing imperialism

Is there some sort of altruism in the U.S. setting itself up as the gendarme of the world? Well, that’s a rhetorical question, obviously, but such self-deception is widespread, and not just among the foreign-policy establishment.

One line of critique sometimes heard, especially during this year’s presidential campaign, is that the U.S. should demand its allies “pay their fair share.” It’s not only from Right-wing quarters that phrase is heard, but even from Left populist Bernie Sanders, who insisted during this month’s Brooklyn debate with Hillary Clinton that other members of NATO ought to pay more so the Pentagon budget can be cut. Senator Sanders said this in the context of pointing out the superior social benefits across Europe as compared to the U.S., but what it really implies is that militarism is justified.

Setting aside that Senator Sanders’ record on imperialism is not nearly as distant from Secretary Clinton’s as his supporters believe, it is a reflection of how deeply imperialism is in the bones of United Statesians when even the candidate positioning himself as a Left insurgent doesn’t seriously question the scale of military operations or their purpose.

So why is U.S. military spending so high? It’s because the repeated use of force is what is necessary to maintain the capitalist system. As top dog in the world capitalist system, it’s up to the U.S. to do what is necessary to keep itself, and its multi-national corporations, in the driver’s seat. That has been a successful project. U.S.-based multi-nationals hold the world’s highest share in 18 of 25 broad industrial sectors, according to an analysis in New Left Review, and often by commanding margins — U.S. multi-nationals hold at least a 40 percent global share in 10 of those sectors.

A partial list of U.S. interventions from 1890, as compiled by Zoltán Grossman, a professor at Evergreen State College in Olympia, Washington state, lists more than 130 foreign military interventions (not including the use of troops to put down strikes within the U.S.). Consistently, these were used to impose U.S. dictates on smaller countries.

At the beginning of the 20th century, U.S. President William Howard Taft declared that his foreign policy was “to include active intervention to secure our merchandise and our capitalists opportunity for profitable investment” abroad. Taft overthrew the government of Nicaragua to punish it for taking a loan from a British bank rather than a U.S. bank, and then put Nicaragua’s customs collections under U.S. control and handed two U.S. banks control of Nicaragua’s national bank and railroad. Little has changed since, including the overthrows of the governments of Iran (1953), Guatemala (1954), Brazil (1964) and Chile (1973), and more recently the invasion of Iraq and the attempted overthrow of the Venezuelan government.

Muscle men for big business

We need only recall the statement of Marine Corps general Smedley Butler, who summarized his highly decorated career in 1935, in this manner:

“I spent thirty three years and four months [in] the Marine Corps. … [D]uring that period I spent most of my time being a high-class muscle man for Big Business, for Wall Street and for bankers. In short, I was a racketeer for capitalism.”

The bipartisan refusal to acknowledge this is exemplified in U.S. narratives concerning the Vietnam War. The “debate” that is conducted in the corporate media is only between two “acceptable” viewpoints — an honorable effort that tragically failed or a well-intentioned but flawed effort that should not have been undertaken if the U.S. was not going to be “serious” about fighting. Never mind that tonnage of bombs dropped on Vietnam were greater than what was dropped by all combatants in World War II combined, 3 million Vietnamese were killed, cities were reduced to rubble and millions of acres of farmland was destroyed. By what sane measure could this be said to be fighting “without really trying,” as Right-wing mythology still asserts?

No modern corporate enterprise would be complete without subcontracting, and the Pentagon has not stinted here. That is not a reference to the massive, and often guaranteed, profits that military contractors enjoy as more supply operations are handed over to connected companies, but rather to the teaching of torture techniques to other militaries so that some of the dirty work of maintaining capitalism can be undertaken locally.

military bases surround RussiaThe U.S. Army’s infamous School of the Americas, lately masquerading under the deceptively bland-sounding name Western Hemisphere Institute for Security Cooperation, has long been a finishing school for the personnel enforcing the rule of military and civilian dictatorships throughout Latin America. Major Joe Blair, who was the director of instruction at the School of the Americas from 1986 to 1989, had this to say about the curriculum:

“The doctrine that was taught was that if you want information you use physical abuse, false imprisonment, threats to family members, and killing. If you can’t get the information you want, if you can’t get that person to shut up or stop what they’re doing, you assassinate them—and you assassinate them with one of your death squads.”

The change of the name more than a decade ago was cosmetic, Major Blair said while testifying at a 2002 trial of School of the Americas protestors:

“There are no substantive changes besides the name. They teach the identical courses that I taught, and changed the course names and use the same manuals.”

The entire history of capitalism is built on violence, and violence has been used to both impose and maintain the system from its earliest days. Slavery, colonialism, dispossession of the commons, draconian laws forcing peasants into factories and control of the state to suppress all opposition to economic coercion built capitalism. The forms of domination change over the years, and are often financial rather than openly militaristic today (although the armed fist lurks in the background); regardless, exploitation is the lifeblood of wealth. Demanding that the cost of this should be spread around is a demand to continue exploitation, domination and imperialism, and nothing more.