There is nothing that capitalists won’t grab if they see a possibility to score a profit. Not even the most basic needs for human life, such as water, are exempt.
A favorite tactic for grabbing what had once been in the public domain and converting it into private profit is the “public-private partnership.” A tactic sadly abetted by the world’s governments, as the name implies.
Public-private partnerships (PPPs), a decades-long string of disasters for the public but often a bonanza for the private, have left behind a long trail of one-sided results in water systems, electricity distribution, sewers, highways, hospitals and other infrastructure. The latest report testifying to the damage wrought by PPPs comes to us courtesy of the European Federation of Public Service Unions (EPSU), a federation of 8 million public service workers from over 250 trade unions across Europe, and the European Network on Debt and Development (Eurodad), a network of 49 civil society organizations from 20 European countries “working for transformative yet specific changes to global and European policies, institutions, rules and structures.”
“PPP advocates claim they bring financing, efficiency and innovation. But real-life experience reveals a different picture. The following points outline eight reasons why PPPs are not working: 1. PPPs do not bring new money – they create hidden debt 2. Private finance costs more than government borrowing 3. Public authorities still bear the ultimate risk of project failure 4. PPPs don’t guarantee better value for money 5. Efficiency gains and design innovation can result in corner-cutting 6. PPPs do not guarantee projects being on time or on budget 7. PPP deals are opaque and can contribute to corruption 8. PPPs distort public policy priorities and force publicly run services to cut costs.”
The EPSU/Eurodad report defines PPPs as “long-term contractual arrangements where the private sector provides infrastructure assets and services that have traditionally been directly funded by government, such as hospitals, schools, prisons, roads, bridges, tunnels, railways, and water and sanitation plants, and where there is also some form of risk sharing between the public and the private sector.” There may be risk sharing on paper, but in reality even this definition is a little too generous toward PPPs — in almost all cases, contractual clauses put the risk squarely on the public, and when the private company that has taken over a previously public good proves unable to manage or goes out of business, it is the public that pays.
The paper drew on examples across Europe, with some of the worst examples coming in Britain. Privatizing public services leads to higher costs, reductions in the quality of service and lengthier periods in completing construction. All of these results, of course, are directly opposite of what incessant capitalist propaganda continually blares. Although the EPSU/Eurodad report didn’t speculate as to why these results occur, it takes little imagination to see the reasons: Corporations exist to make the biggest profit regardless of social cost while governments need only provide a reliable service without having to generate seven- and eight-figure salaries for executives and windfalls for stockholders and other speculators.
It’s not profits above all else, it’s nothing but profits
Consider the words of Milton Friedman, godfather of the Chicago School of economics whose words are widely followed in corporate boardrooms and in financial publications. He put it plainly in an interview with author Joel Bakan in the context of a former BP chief executive officer suggesting (however disingenuously) the company would make environmental concerns more important:
“Not surprisingly, Milton Friedman said ‘no’ when I asked him how far John Browne could go with his green convictions. … ‘He can do it with his own money. If he pursues those environmental interests in such a way as to run the corporation less effectively for its stockholders, then I think he’s being immoral. He’s an employee of the stockholders, however elevated his position may appear to be. As such, he has a very strong moral responsibility to them.’ ”
That is the standard of the corporate world: Profits for speculators, period. No other considerations, no matter how flowery their public relations concoctions may be. There are no exceptions because a service or product is necessary for human life.
To return to the EPSU/Eurodad report, a much higher cost of financing was one cause of higher costs for the public to access previously public goods. Noting the hidden debt in these deals, the paper said, “In a PPP, instead of the public authority taking a loan to pay for a project, the private sector arranges the financing and builds the infrastructure, then the public sector pays a set fee over the lifetime of the PPP contract. In some cases, users also pay part or all of the fee directly to the private sector company (e.g. toll roads).” The United Kingdom National Audit Office “found that the effective interest rate of all private finance deals (7%-8%) was double that of all government borrowing (3%-4%).”
An even larger differential was found in France: “A particularly vivid example was the Paris Courthouse PPP, signed in 2012, which featured an investment of €725.5 million and no less than €642.8 million in financing costs. The French Court of Auditors found that the interest rate for borrowing for the PPP was 6.4 per cent, while in 2012 the weighted average rate for government bond financing in the medium-long term was 1.86 per cent,” the report said, adding that operating costs were also higher.
Another example is a Stockholm hospital that cost €2.4 billion instead of the projected €1.4 billion. The hospital was not only completed four years later than scheduled, but a “design competition” resulted in “operating theatres not being adapted for operations; the risk of medicines being destroyed because of medicine rooms being too warm; and physicians having to carry administrative material in backpacks because of the lack of space for administrative tasks.” One conclusion from this poor result is that “the high level of complexity, together with the private partner’s interest in cost-cutting as much as possible, can easily result in undesirable corner-cutting.”
The report concludes that “What decades of experience has shown is that PPPs come at a high cost and are not delivering the expected benefits.”
If you can sell it, they will buy it
PPPs are particularly common in Britain, an unfortunate development that is not the cause of any one party. Britain’s version of public-private partnerships are called “private finance initiatives.” A scheme concocted by the Conservative Party and enthusiastically adopted by the New Labour of Tony Blair and Gordon Brown, the results are disastrous. A 2015 report in The Independent revealed that the British government owed more than £222 billion to banks and businesses as a result of private finance initiatives. Jonathan Owen reported:
“The startling figure – described by experts as a ‘financial disaster’ – has been calculated as part of an Independent on Sunday analysis of Treasury data on more than 720 PFIs. The analysis has been verified by the National Audit Office. The headline debt is based on ‘unitary charges’ which start this month and will continue for 35 years. They include fees for services rendered, such as maintenance and cleaning, as well as the repayment of loans underwritten by banks and investment companies. Responding to the findings, [British Trades Union Congress] General Secretary Frances O’Grady said: ‘Crippling PFI debts are exacerbating the funding crisis across our public services, most obviously in our National Health Service.’ ”
The Independent article reported that private firms can even flip their contracts for a faster payday. Four companies given 25-year contracts to build and maintain schools doubled their money by selling their shares in the schemes less than five years into the deals for a composite profit of £300 million. Clearly, these contracts were given at well below reasonable cost. Nor is health care exempt: A 2019 report by the Progressive Policy Think Tank found that there are English hospitals forced to divert one-sixth of their income to paying back private finance initiatives, with National Health Service trusts paying more than £2 billion on such repayments per year, “taking money away from vital patient services.” For just £13 billion of private investment, the NHS must pay back £80 billion! Quite a windfall for banks.
During the course of a 25-year contract with Suez and Veolia, water rates in the city of Paris doubled after accounting for inflation. Thanks to a secret clause, the two companies received automatic price rises every three months. When the contract finished, Paris re-municipalized its water system. Despite the short-term expenses of doing so, the city saved about €35 million in the first year and was able to reduce rates by eight percent.
A privatization of the Buenos Aires water and sewer systems resulted in chronic failures to meet contractual obligations, repeated demands that the contract be renegotiated (granted by the neoliberal governments of the 1990s), failure to meet water-safety standards, worsening pollution of underground water sources, and price increases over the first decade of the contract 12 times that of inflation. The Argentine government then had to spend years raising legal challenges to take back the system even though the private company was in obvious default of its contractual obligations.
The German city of Bergkamen (population about 50,000) reversed its privatization of energy, water and other services. As a result of returning those to the public sector, the city began earning €3 million a year from the municipal companies set up to provide services, while reducing costs by as much as 30 percent.
A report by Food & Water Watch found that investor-owned utilities in the United States typically charge 59 percent more for water and 63 percent more for sewer service than local-government utilities. After privatization, water rates increase at about three times the rate of inflation, nearly tripling on average after 11 years of private control. Corporate profits, dividends and income taxes can add 20 to 30 percent to operation and maintenance costs.
A study by University of Toronto researchers of 28 Ontario public-private partnerships found they cost an average of 16 percent more than conventional contracts. Elsewhere in Canada, the Sea-to-Sky Highway in British Columbia will cost taxpayers C$220 million more than if it had been financed and operated publicly, and the cost of a project at the Université de Québec à Montréal was doubled to C$400 million.
Water as a commodity rather than a human right
That even water is a commodity is no surprise when corporate leaders consider it just another product that should have a price, most notoriously enunciated in 2014 when the chairman of Nestlé S.A., Peter Brabeck-Letmathe, issued a video in which he denounced as “extreme” the very idea of water being considered a human right. And not only water — various schemes exist to destroy the U.S. Postal Service in the interest of corporate profit.
There are even corporate executives who want to privatize the weather. No, that’s not in the realm of science fiction. The head of a private weather forecaster, AccuWeather, has repeatedly lobbied to prohibit the U.S. government’s National Weather Service from issuing forecasts! Under this scenario, the Weather Service would hand all of its data to private companies, who would then issue forecasts, while of course letting taxpayers foot the bill for the data. One of the U.S. Senate’s dimmest bulbs, fundamentalist Rick Santorum (thankfully no longer in office), once promoted a bill to do just that. And, incidentally, the National Weather Service issues forecasts more reliable than those of AccuWeather.
Public-private partnerships are one of the surest ways of shoveling money into the gaping maws of corporate wallets. The result has been disastrous — public services and infrastructure maintenance is consistently more expensive after privatization. Cuts to wages for workers who remain on the job and increased use of low-wage subcontractors are additional features of these privatizations. Less services and fewer employees means more profit for the contractor, and because the contractor is a private enterprise there’s no longer public accountability.
The rationale for these partnerships is, similar to other neoliberal prescriptions, ideological — the private sector is supposedly always more efficient than government. A private company’s profit incentive will supposedly see to it that costs are kept under control, thereby saving money for taxpayers and transferring risk to the contractor. In the real world, however, this works much differently. A government signs a long-term contract with a private enterprise to build and/or maintain infrastructure, under which the costs are borne by the contractor but the revenue goes to the contractor as well.
Public-private partnerships are nothing more than a variation on straightforward schemes to sell off public assets below cost, with working people having to pay more for reduced quality of service. Capitalism in action.
Heeding that time-honored advice to never let a crisis go to waste, the world’s industrialists and financiers have taken full advantage of the Covid-19 pandemic to accumulate more wealth. And although you already know that large numbers of people have been thrown out of work and/or are at risk of losing their home, you might not have realized how obscene the increase in inequality has become.
Not surprisingly, given that capitalism is a system with a stranglehold on almost every place on Earth, the rise in inequality is a global phenomenon. Unfortunately, capitalists have usually understood their class interests better than do the world’s working people.
When we discuss the increase in wealth the world’s richest are enjoying, we are talking literally about trillions of dollars.
We’ll start our survey with a report issued by one of the world’s biggest banks, UBS, and Big Four accounting firm PricewaterhouseCoopers. The authors of the report, “Riding the storm: Market turbulence accelerates diverging fortunes,” can hardly contain their enthusiasm at how successful their clients have been during the pandemic. UBS and PwC “have unique insights into” billionaires’ “changing fortunes and needs” and in the report breathlessly extol “a time of exceptional, Schumpeterian creative destruction” by “billionaires [who] live in turbulent but trailblazing times.” As you can already surmise by the tone-deaf writing, the report is intended as a celebration of vast wealth inequality and is written in a style that comes as close to that of Hollywood celebrity publicists as you are likely to find produced by bankers and accountants.
The report says “Some 209 billionaires have publicly committed a total of USD 7.2 billion” in donations, written within a passage told in solemn tones intended to make us gasp in awe at the selflessness of the international bourgeoisie. Yet we soon enough read that the wealth of the world’s billionaires totaled US$10.2 trillion in July 2020. For those of you scoring at home, that $7.2 billion in proposed donations represents 0.07 percent of their wealth. The average working person donates a significantly bigger portion of their income.
In just three months, from April to July 2020, the world’s billionaires added $2.2 trillion to their wealth! Technology billionaires did particularly well during the pandemic, the UBS/PwC report says, due in large part to the surge in technology stock prices. During the first seven months of 2020 alone, technology and health industry billionaires saw their wealth increase by about $150 billion. Yes, never let a crisis go to waste.
The number of the world’s billionaires, the report tells us, is 2,189. To put these numbers in some kind of perspective, there are exactly two countries in the world (the United States and China) that have a bigger gross domestic product than the wealth of those 2,189 billionaires. Or, to put it another way, their wealth is greater than the economic output of Japan, Germany and Britain, the countries with the world’s third, fourth and fifth largest GDPs and which have a combined population of 277 million.
Is there really no money for social programs?
As might be expected, billionaires in the center of the world capitalist system are no laggards among those accumulating wealth at the expense of everyone else. An Institute for Policy Studies study, “U.S. Billionaire Wealth Surges Past $1 Trillion Since Beginning of Pandemic — Total Grows to $4 Trillion,” reports the collective wealth of the 651 billionaires in the United States has increased by over $1 trillion “since roughly the beginning of the COVID-19 pandemic to a total of $4 trillion at market close on Monday, December 7, 2020. Combined, just the top 10 billionaires are now worth more than $1 trillion.” Those gains are more than the $900 billion pandemic relief package that passed Congress this week, a package held up for months by Republicans fretting over the cost.
Wall Street has been amply taken care of in the current economic crisis, as it was in the wake of the 2008 collapse, and industrialists also have had massive amounts of subsidies and tax cuts thrown their way. For working people, crumbs. The Federal Reserve, the U.S. central bank, committed US$5.3 trillion to corporations on its own initiative in the first weeks of the pandemic, and most of the $2.5 trillion offered in last spring’s two congressional stimulus packages (the CARES Act of March 27 and the supplement of April 24) went to big business. (There was nothing unique about that as Britain, the European Union and Canada pushed through similar programs.)
The Institute for Policy Studies report notes that the $1 trillion gain by U.S. billionaires since mid-March is:
More than it would cost to send a stimulus check of $3,000 to every one of the roughly 330 million people in the United States. A family of four would receive $12,000.
Double the two-year estimated budget gap of all state and local governments, which is forecast to be at least $500 billion. By June, state and local governments had already laid off 1.5 million workers and public services—especially education—faced steep budget cuts.
Only slightly less than total federal spending on Medicare ($644 billion in 2019) and Medicaid ($389 billion in fiscal year 2019), which together serve 120 million Americans.
Nearly four times the $267 billion total in stimulus payments made to 159 million people earlier in 2020.
During the same period, about 70 million lost employment, 12 million workers lost their health insurance due to losing their jobs, 26 million did not have enough food to eat just during a two-week period in November and 98,000 businesses closed. The Economic Policy Institute predicts that if federal aid is not forthcoming, as many as 5.3 million public-sector jobs—including those of teachers, public safety employees and health care workers—will be lost by the end of 2021.
An excuse to ramp up privatization in Canada
The pandemic is being used as an opportunity in Canada to advance corporate goals of privatization. Health care workers in Alberta walked off their jobs in a wildcat strike in November to protest Alberta Health Services’ announcement that it would be laying off 11,000 public positions so those jobs could be filled by private contractors. The Canadian news site Rabble reports:
“Alberta leads Canadian provinces and territories in its pursuit of privatization, and its October announcement that it was laying off up to 11,000 hospital workers has led to worker resistance and criticism from the province’s doctors. (One Calgary physician even set up a grassroots political organization against health-care privatization). Affected workers include those working in housekeeping, food services, laundry and laboratories. The Alberta government claims that these roles are not being eliminated, but instead transferred from public positions to ones filled by private contractors. … This past summer, Alberta Bill 30 was also criticized as opening the door to further privatization of health care. The Health Statutes Amendment Act was an omnibus bill that passed at the end of July.”
Alberta legislators also pushed through a bill that weakens rules and requirements for charter schools to operate and allowed for home schooling to go on unsupervised by public school boards. (Charter schools are designed to weaken teachers’ unions and hand schools to corporations for profit, while the supposed improvements in student outcome are mostly mythological.) Not to be outdone, Manitoba’s provincial government seeks to privatize child care, long-term care homes and liquor sales, and intends to cut public service jobs by 25 percent, Rabble reported.
Jobs losses and insecurity around the world
A University College London report, “Financial inequalities widen due to Covid-19,” called by the authors the “UK’s largest study into how adults are feeling about the lockdown,” found that more than two-thirds of Britons surveyed have suffered deteriorating finances. The report said, “Almost half (47%) of those who were finding things ‘very difficult’ financially before lockdown are now reporting things are ‘much worse’, with a further 23% saying things are ‘worse’. This figure has increased significantly from July, when 57% of the same group reported being financially worse off than before the pandemic.” The report quoted an educational leader, Cheryl Lloyd, as summarizing the situation as follows: “This report shows that the financial impact of the Covid-19 crisis is not being felt equally across the UK. This threatens to further widen existing inequalities as the pandemic continues.”
Conditions are no better across the Channel in the European Union, with disparate impacts on jobs widening inequality on the continent. The Brussels think tank Bruegel reports that, across the EU, “8% of workers educated to lower secondary level or below lost their jobs between the last quarter of 2019 and the second quarter of 2020. Over the same period, the number of jobs for workers with university degrees increased by 3%. Jobs for employees with middle-level qualifications declined by 5%. This picture of differences between low-educated and tertiary-educated workers can be seen in all EU countries and the United Kingdom.”
Those at more risk of losing their jobs are also at more risk of contracting Covid-19. “Sectors more exposed to the pandemic, including restaurants, travel, entertainment and personal services have unsurprisingly suffered more,” Bruegel reports. “But the ability to telework has greatly influenced labour market outcomes. About 70% of those who completed university studies are able to work from home, compared to about 15% of those who have not completed secondary school. Two-thirds of professionals and 85% of managers can work from home, in contrast to close to zero for workers in transportation, installation, construction and agriculture.”
And, as would be expected, conditions in the developing world are still worse. India has experienced a 26 percent decline in industrial employment, according to an India Today report. The broadcaster said:
“Ever since India went under a strict lockdown on March 25, millions of the country’s poorest workers were immediately rendered jobless and left without any income. An unresolved migrant crisis is the biggest example of the plight India’s poor are facing at the moment. Even the country’s vast middle class population encountered a sharp loss of income during the pandemic due to a wave of job losses and pay cuts. … A recent report by the Centre For Monitoring Indian Economy (CMIE) indicates that [21 million] salaried jobs were lost in the first five months of the pandemic, indicating that income levels among middle class households have fallen sharply.”
At the same time Indians across the country were undergoing difficulties, Mukesh Ambani, one of the world’s richest persons, saw his wealth increase by $30.5 billion. Another Indian billionaire, Cyrus Poonawala, added $5.6 billion to his wealth this year, India Today reported.
Even capitalists’ spokespeople profess concern
Inequality has become so extreme that even some of the staunchest upholders of the capitalism that creates this inequality profess to be concerned. (Or perhaps they are worried about people rising up to do something about it and thus advocate a little softening, at least for now.) In November, the Brookings Institution was moved to issue a report, “Windfall profits and deadly risks: How the biggest retail companies are compensating essential workers during the Covid-19 pandemic,” that discussed the big increases in profits enjoyed by giant retailers while their workforce sees only crumbs. Brookings reported:
“We find that while top retail companies’ profits have soared during the pandemic, pay for their frontline workers—in most cases—has not. In total, the top retail companies in our analysis earned on average an extra $16.9 billion in profit this year compared to last—a stunning 39% increase—while stock prices are up an average of 33%. And with few exceptions, frontline retail workers have seen little of this windfall. The 13 companies we studied raised pay for their frontline workers by an average of just $1.11 per hour since the pandemic began—a 10% increase on top of wages that are often too low to meet a family’s basic needs. On average, it has been 133 days since the retail workers in our analysis last received any hazard pay.”
For top executives and speculators who hold large numbers of shares, however, the year of the pandemic has been a bonanza. The Brookings report further stated:
“Many of the least generous companies were the most financially successful, posting huge profits. Amazon and Walmart combined earned an extra $10.9 billion in profit compared to last year, an increase of 53% and 45%, respectively. Their workers, on the other hand, have received below-average COVID-19-related compensation: an extra $1,369 ($0.95 per hour) and $900 ($0.63 per hour), respectively, over the eight-plus months of the pandemic—representing just 6% pay bumps for full-time workers that earn starting wages. Meanwhile, Amazon and Walmart’s stock prices are up 65% and 41% since the start of the pandemic, adding more than $70 billion to the wealth of Jeff Bezos, Amazon’s CEO, and $45 billion to the Walton family—the country’s richest family, who own more than half of Walmart’s shares.”
Wal-Mart spent $500 million on new stock buybacks during the third quarter of 2020 while offering no new hazard pay bonuses for its employees, the Brookings report said. Another big chain, Kroger, announced $1.2 billion in new stock buybacks, causing the stock price to rise (which is the intention), at the same time its grocery workers were given no hazard pay for six months while earning an average wage of $10 per hour. Kroger’s profits during the first six months of the pandemic, meanwhile, totaled $2 billion.
Wal-Mart is a company that pays its employees so little that they skip meals and organize food drives; receives so many government subsidies that the public pays about $1 million per store in the United States; and is estimated to avoid $1 billion per year in U.S. taxes through its use of tax loopholes. Meanwhile, the Walton family collects billions of dollars every year from dividends just for being born in the right family.
Amazon is notorious for the brutal inhuman conditions in its distribution centers and for not paying taxes. Amazon’s owner, Jeff Bezos, is one of the world’s richest people yet he organized a nationwide sweepstakes to see what cities or states would give him the biggest subsidies when he announced Amazon would create a second headquarters.
The International Monetary Fund likely isn’t having second thoughts or feeling remorse about its decades of imposing harsh austerity on developing countries, but has weighed in on the rise of inequality — whether from genuine concern or, much more likely, as a public relations gesture. (IMF papers purporting to reconsider neoliberalism are always much less than they appear.) Because lower-income people are less likely to be able to work from home during the pandemic, and thus more likely to have lost their job, the IMF said “the estimated effect from COVID-19 on the income distribution is much larger than that of past pandemics.”
Loss of work and specter of hunger hit developing world hard
Whatever the motivations of the world’s capitalist think tanks and financial institutions may be in discussing global inequality in the wake of the Covid-19 pandemic, there is no question that working people everywhere are suffering. As early as late April, the International Labour Organization issued a report, “As job losses escalate, nearly half of global workforce at risk of losing livelihoods,” predicting that half of the world’s working people are in danger of disaster. The ILO said:
“The continued sharp decline in working hours globally due to the Covid-19 outbreak means that 1.6 billion workers in the informal economy — that is nearly half of the global workforce — stand in immediate danger of having their livelihoods destroyed. … The first month of the crisis is estimated to have resulted in a drop of 60 per cent in the income of informal workers globally. This translates into a drop of 81 per cent in Africa and the Americas, 21.6 per cent in Asia and the Pacific, and 70 per cent in Europe and Central Asia. Without alternative income sources, these workers and their families will have no means to survive.”
Large numbers of the world’s peoples were already in a highly precarious condition. An estimate by John Bellamy Foster and Robert W. McChesney is that there are 2.4 billion people in their prime working ages (25-54) who are unemployed, vulnerably employed or economically inactive, compared to 1.4 billion actively employed. In other words, there are far more people in the “reserve army of labor” who are precariously or not at all employed than those with jobs, and far from all those 1.4 billion who are employed have secure work.
And with loss of livelihood comes the specter of hunger. The United Nations World Food Programme, also in late April, predicted that the pandemic “will double number of people facing food crises unless swift action is taken.” The agency said, “The number of people facing acute food insecurity stands to rise to 265 million in 2020, up by 130 million from the 135 million in 2019, as a result of the economic impact of COVID-19.”
Nor does the developing world have the health care infrastructure necessary to handle the number of people falling sick from Covid-19. The United Nations Development Programme noted that developed countries have 55 hospital beds, more than 30 doctors and 81 nurses for every 10,000 people, but for the same number of people in a less developed country there are seven beds, 2.5 doctors and six nurses.
Pandemic widens education disparities
The lack of infrastructure to provide education is also acute. Because of school closures and the divide in distance learning, an estimated “86 per cent of primary school-age children in low human development countries are currently not getting an education, compared to just 20 per cent in countries with very high human development,” according to the UN Development Programme. “With schools closed, UNDP estimates that effective out of school rates could regress to levels not seen since the 1980s — the largest reversal ever … and threatening the hard work and progress of the past 30 years.”
Similar conclusions were reported by the Institute for Policy Studies’ Inequalilty.org project. In a September report, the project found that just 6 percent of children in eastern and southern Africa have access to the Internet. In Kenya, schools have been closed for six months. And that has further consequences. “One likely impact of Covid-19 is a rise in teen pregnancies, as adolescent girls are left without the safety net that schools provided,” the report said. “This gendered menace deprives young girls of the opportunity to further their education and attain their career goals. It also exposes them and their children to major health risks. According to the World Health Organization, ‘pregnancy and childbirth complications are the leading cause of death among girls aged 15–19 years globally.’ ”
The pandemic has also widened inequality in education in the developed world. VoxEU, which calls itself a provider of commentary by “leading economists,” reports that the disruption to higher education caused by the switch to online classes is much larger for lower-income students because “lower-income students were more likely to have been financially impacted by COVID-19 and were more worried about the direct health risks from the virus.” VoxEU found that “Lower-income students are 50% more likely than their more affluent peers to expect a delayed graduation due to COVID-19, a gap which disappears once accounting for the differential financial burdens or health risks imposed by COVID-19.”
Pandemic places greater burden on women
Concomitant with the various inequality aggravations, it’s no surprise that women are being hit harder than men.
Alison Andrew, a senior research economist at the Institute for Fiscal Studies in London, said: “Mothers are more likely than fathers to have moved out of paid work since the start of lockdown. They have reduced their working hours more than fathers even if they are still working and they experience more interruptions while they work from home than fathers, particularly due to caring for children. Together these factors mean that mothers now are only doing a third of the uninterrupted paid-work hours that fathers are. A risk is that the lockdown leads to a further increase in the gender wage gap.”
The Institute, in its report on British fallout from the pandemic, “Parents, especially mothers, paying heavy price for lockdown,” found the following:
Mothers are 23% more likely than fathers to have lost their jobs (temporarily or permanently) during the current crisis. Of those who were in paid work prior to the lockdown, mothers are 47% more likely than fathers to have permanently lost their job or quit, and they are 14% more likely to have been furloughed. In all, among those working in February 2020, mothers are now 9 percentage points less likely to still be in paid work than fathers.
Mothers who are still doing paid work have reduced their paid working hours substantially and by more than fathers. Prior to the crisis, working mothers did paid work in 6.3 hours of a weekday on average; this has fallen by over one-fifth to 4.9 hours. Working fathers’ hours have also fallen, but by proportionally less, from 8.6 hours before the crisis to 7.2 hours now.
Mothers are also far more likely to be interrupted during paid working hours than fathers. Almost half (47%) of mothers’ hours spent doing paid work are split between that and other activities such as childcare, compared to 30% of fathers’ paid working hours. Where focused work time is important for performance, gender differences in interruptions and multitasking risk further increasing the gender wage gap among parents.
In families where the father has lost his job while the mother kept hers, men and women still split housework and childcare responsibilities fairly equally. In all other types of households, mothers spend substantially more time on domestic responsibilities.
Such disparate impact means women are again falling further behind men in earnings. “Analysis of those that did produce data suggests it will take almost 200 years to close the gap,” says Dr. Wanda Wyporska, the executive director of the Equality Trust. “Undoubtedly women are bearing the brunt of this, as they did in austerity when 86% of cuts fell on women. There is a cumulative effect which consistently pushes progress back.” The general secretary of the British Trades Union Council, Frances O’Grady, said, “[O]nly one in 10 lower earners are able to work from home, and 69% of low earners are women; it is not a panacea. …Working women have led the fight against coronavirus, but millions of them are stuck in low paid and insecure jobs. We need a reckoning on how we value and reward women’s work.”
Then there is the specter of violence from male partners. María Noel Vaeza, United Nations Women Regional Director for the Americas and the Caribbean, in a November report, said:
“While lockdowns and stay-at-home orders may be crucial in limiting and preventing the spread of COVID-19, they also have a devastating impact on women and girls living with the risk of gender-based violence, as many of the factors that trigger or perpetuate violence against women and girls are compounded by preventive confinement measures. Emerging global data has shown an increase in calls to [violence against women and girls] helplines. … Stay-at-home measures are compounding perpetrators’ use of mechanisms of power and control to isolate victims of [violence]. Unemployment, economic instability and stress may lead offenders to feel a loss of that power, which in turn may exacerbate the frequency and severity of their abusive behaviour. At the same time, the crisis is generating additional barriers for women and girls’ access to essential life-saving services such as counselling and justice resources, and legal advice; sexual health and other crucial medical assistance; and the provision of refuge.”
Racial disparities widened by pandemic
No roundup of Covid-19 inequalities would be complete without discussion of racial disparities. The impact of the pandemic’s effect on the economy, because it impacts lower-income working people most severely, has fallen heavily on People of Color. A Center for American Progress report authored by Dania Francis and Christian E. Weller demonstrates the severity of the disparities:
“African Americans have experienced particularly large job losses in a labor market characterized by persistent racism and inequality. … Estimates based on census data show that 54.8 percent of Black workers said that they had lost incomes due to a job loss or cut in hours from late April to early June, compared with 45.8 percent of white workers. The labor market pain has created housing instability for Black families to a much larger degree than was the case for white families. Estimates based on census data show that more than one-third of African Americans who experienced job-related income losses said that they either didn’t pay their mortgage or deferred their mortgage, compared with only 16.9 percent for white families with earnings losses. Among renters, 38.3 percent of Black families with income losses didn’t pay or deferred their rent, compared with 23.1 percent of white families in a similar situation.”
Compounding this financial distress is that, with schools going to remote learning, a lack of resources impacts the education of African-American children. The Center for American Progress report said:
“The lack of reliable internet or an electronic device for remote learning also correlates with fewer hours per week of teaching time. … Unreliable internet access and a lack of consistent access to electronic devices reduces families’ time teaching children by two to three hours among Black families but only by one to two hours among white families. … While the short- and long-term impacts of coronavirus-related school closures and job losses on children’s educational outcomes cannot be measured yet, it is already clear that there are differential effects by race on access to educational resources as a result of the pandemic. In particular, the persistent and large Black-white wealth gap directly and immediately feeds into persistent educational gaps.”
“The pandemic has entrenched extreme inequalities in New York City. Insecurities surrounding employment, health, education and basic safety are affecting many New Yorkers today, but they are disproportionately experienced in communities with the lowest incomes. The sheer rate of COVID-related deaths is more than two times higher in zip codes with very high poverty rates (where 272 out of every 100,000 residents have died) than in zip codes with low poverty rates (125 out of 100,000). New Yorkers with the lowest incomes are feeling the impact of the pandemic on all sides—living in fear of eviction, struggling to put food on the table, and having trouble getting devices to support remote learning for their children.”
For industrialists, financiers and their publicists, the year 2020 might be a time of “exceptional creative destruction,” but for the overwhelming majority of humanity who do the actual work that is converted into the fabulous wealth of those at the top, it’s just plain old destruction. Capitalism as usual.
The Trump administration’s plans to rebuild infrastructure in the United States have been leaked, and it appears to be as bad as feared. At least three-quarters of intended funding will go toward corporate subsidies, not actual projects. It is possible that no funding will go directly toward projects.
There’s no real surprise here, given that President Donald Trump’s election promise to inject $1 trillion into infrastructure spending was a macabre joke. What is actually happening is that the Trump administration intends to push for more “public-private partnerships.” What these so-called partnerships actually are vehicles to shovel public money into private pockets. These have proven disastrous wherever they have been implemented, almost invariably making public services more expensive. Often, far more expensive. They are nothing more than a variation on straightforward schemes to sell off public assets below cost, with working people having to pay more for reduced quality of service.
That is no surprise, as corporations are only going to provide services or operate facilities if they can make a profit. And since public-private partnerships promise guaranteed big profits, at the expense of taxpayers, these are quite popular in corporate boardrooms. And when those promises don’t come true, it taxpayers who are on the hook for the failed privatization.
Panorama of Paris (photo by Benh Lieu Song)
The collapse earlier this month of Carillion PLC in Britain put 50,000 jobs at risk, both those directly employed and others working for subcontractors. The holder of a vast array of government contracts for construction, services and managing the operations of railways, hospitals, schools and much else, Carillion received contracts worth £5.7 billion just since 2011. Overall, an astonishing £120 billion was spent on outsourcing in Britain in 2015.
What did British taxpayers get for this corporate largesse? It certainly not was the promised savings. Parliament’s spending watchdog agency, the National Audit Office, found that privately financing public projects costs as much as 40 percent more than projects relying solely on government money. The office estimates that existing outsourcing contracts will cost taxpayers almost £200 billion for the next 25 years. (This report was issued before Carillion’s collapse.) In response, Labour leader Jeremy Corbyn said, “These corporations need to be shown the door. We need our public services provided by public employees with a public service ethos and a strong public oversight,” The Guardian reported.
Naturally, there was one group that did quite well from this privatization: Carillion’s shareholders, who reaped £500 billion in dividends in the past seven years. But it is the government that will have to pick up the tab if the company’s employees are to continue to be paid. On top of that, the company’s pension shortfall reached £900 billion, according to Reuters.
By no means is Carillion’s collapse the only privatization disaster in Britain. A bailout of the corporate-run East Coast rail system is expected to cost hundreds of millions of pounds. There are numerous other examples that have proven windfalls for corporate executives but expensive mistakes for the public.
Offer subsidies first, ask questions later
One of the many empty promises made by President Trump during the 2016 campaign was that his infrastructure plan would “leverage public-private partnerships, and private investments through tax incentives, to spur $1 trillion in infrastructure investment over ten years. It is revenue neutral.”
“Spur” investment, not actually spend on investment. This supposed plan originated with Wilbur Ross and Peter Navarro, a conservative economics professor. Ross, now Commerce secretary (although perhaps not for long if recent reports are to believed), was an investment banker who specialized in buying companies and then taking away pensions and medical benefits in order to quickly flip his companies for a big short-term profit. The two recommended the Trump administration allocate $137 billion in tax credits for private investors who underwrite infrastructure projects. The two claimed that over 10 years the credits could spur $1 trillion in investment.
So the new administration won’t actually spend $1 trillion to fix the country’s badly decaying infrastructure; it hopes to encourage private capital to do so through tax cuts.
That brings us to this week’s leak. The news site Axios published the Trump administration’s six-page outline for infrastructure investment on January 22. The document mentions no dollar figures. But what the document does do is to discuss where money will be sent. First up is “infrastructure incentives initiative,” which is to account for 50 percent of total appropriations. This category will provide grants to be used for “core infrastructure” projects and requires “Evidence supporting how applicant will secure and commit new, non-federal revenue to create sustainable long-term funding” and requires new sources of “revenue for operations, maintenance and operations.”
Netherlands highway (Daan Roosegaarde)
Although it is possible that local- or state-government funding could provide the required revenues, given the intentions of the Trump régime, what this means is that privatization is being counted on for these projects, with corporations taking over public facilities providing the required ongoing revenue streams.
A hint that this is intended is that the first item on a list of “Principles for Infrastructure Improvements” is an intention to make it easier for tolls to be placed on highways. That item is this: “Allow states flexibility to toll on interstates and reinvest toll revenues in infrastructure.” Again, it is possible that state governments might do this themselves. But the more likely scenario is the privatization of highways, with the corporations gaining control then installing toll booths to not only provide funds for maintenance but to hand themselves a perpetual profit. And if the profits don’t materialize, it won’t be private capital holding the bag. For example, nine privatized toll roads in Spain will cost taxpayers there €5 billion because the roads are being nationalized in the wake of the private operators’ failures.
A further hint is found buried in the section on water infrastructure, where we find this passage: “Remove the application of Federal requirements for de minimis Federal involvement.” This is likely intended to provide a green light to privatization of water systems. That has been done in France and Germany, with disastrous results. For example, water prices in Paris doubled over 25 years before the city took back its water system, saving €35 million in the first year and cutting rates. The German city of Bergkamen reduced costs by as much as 30 percent after returning its basic utilities to the public sector.
No details for a plan not based in reality
Another 25 percent of the total appropriations for the White House infrastructure investment plan is a “rural infrastructure program,” under which state governments are “incentivized to partner” with “private investment.” Various other programs constitute the remainder of the plan, none of which are clear as to who or what will be eligible.
The official unveiling of the plan will likely not be released until after the January 30 State of the Union address, according to a report in The Hill. A further sign of the lack of specifics is that the White House has had nothing substantial to say on the topic. The most recent statement on infrastructure that a search of the official White House web page could find was an August announcement that the president had signed an executive order making the “environmental and permitting processes more efficient.”
Channeling the president’s usual disregard for reality, the announcement claimed that “delays” in infrastructure projects cost “trillions” of dollars. The only actual projects mentioned are three pipelines, including the Keystone XL and Dakota Access lines, of which the announcement claims will “create over 42,000 jobs and $2 billion in earnings.” (Those figures appear directly copied from a widely discredited State Department environmental impact statement issued in 2014, when the Obama administration was supporting them.) In reality, a study by the Cornell Global Labor Institute found that, when all effects are calculated, there may be a net loss of jobs. Additional fuel costs in the Midwest, pipeline spills, pollution and the rising costs of climate change would contribute to job losses.
Of course, environmental damages are not considered in Trump administration projections, putting them even more in the realm of fantasy. Consider two World Health Organization studies that concluded polluted environments cause 1.7 million children age five or younger to die per year. The U.S. Environmental Protection Agency estimated a year ago that 230,000 lives would be saved and 120,000 emergency-room visits saved in 2020 if the Clean Air Act is left intact. Globally, air pollution could lead to nine million premature deaths and US$2.6 trillion in economic damage from the costs of sick days, medical bills and reduced agricultural output by 2060, according to an Organisation for Economic Cooperation and Development study.
This doesn’t come cheap, either — a study of energy subsidies estimates the totality of subsidies given to fossil fuels for 2015 was $5.6 trillion. Lest you think some “anti-oil” group made that calculation, that figure comes to us courtesy of the International Monetary Fund! The Trump administration will only add to this mind-boggling total as it has made clear its intentions to further subsidize gas, oil and especially coal, no matter the lack of rational economics. And the cost of global warming? Incalculable. What would be the future cost of hundreds of millions displaced from drowned cities? Or, in the long term, of destroying the Earth’s ability to maintain a stable environment?
Although Donald Trump is the worst yet of a long line of disastrous U.S. presidents, let’s forgo the easy idea that he alone is responsible for facilitating corporate plunder at the cost of all other human considerations. He is highly useful to the plutocrats who control the Republican Party, so much so that talk of a Trump impeachment should be relegated to the level of fantasy for the foreseeable future, barring an all-time wipeout in the 2018 midterms despite the Democratic Party’s uncanny ability to blow elections. The greater question is if sufficient numbers of Trump voters come to realize the degree they were hoodwinked for believing that a billionaire who built his fortune by screwing working people would somehow come to their rescue.
That’s the short term. For the longer term, humanity finding its way out of the dead end it is speeding toward depends on freeing itself from the grips of a system that repeatedly throws up Trumps, Bushes, Harpers, Thatchers and the like. The Trump administration is a symptom, not a cause, of morbid decay.
Conservatives are fond of saying that if you give a man a fish you can feed him for a day, but if you teach him how to fish you can feed him for a lifetime. This is supposed to tell us that social benefits, such as government programs, are bad for people. A much better example of conservative thought would be to say if I put a fence at the entrance to the pier and don’t let anyone else have access to the water, I can have all the fish for myself.
Let those peasants starve! Such a privatization of fish isn’t distant from the actual mechanics of class warfare as it is practiced, unfortunately.
Take the latest salvo in ongoing class warfare, United States edition: The coming assault on Social Security. Curious as to why the Republican Party’s mania for balanced budgets suddenly vanished? I mean, besides the mind-boggling hypocrisy we can expect from the Right. The immediate cause was to placate their billionaire donors who issued marching orders last June. A “donor retreat” at a Koch brothers’ compound in Colorado was attended by 400 people, and, as The Guardian reported, the “price for admission for most was a pledge to give at least $100,000 this year to the Kochs’ broad policy and political network. Donors decreed that Republicans must pass “tax reform” and reverse the Affordable Care Act (because health care is a socialist plot?) or their checkbooks would be shut.
That the Trump/Republican tax plan will be a bonanza for the wealthiest is well documented by this point, with the “Corker kickback” not only giving “dissident” Republican Senator Bob Corker a multimillion-dollar payday to ensure his vote but giving Donald Trump himself tens of millions of dollars thanks to the special rule benefiting real estate speculators. But lurking behind this devastating corporate offensive is the little matter of the extra $1.5 trillion to be added to the deficit. When Republicans (probably assisted by the more spineless among the Democrats) decide in the near future that deficits matter after all, social benefits will be in the cross hairs, with Social Security and Medicare likely to be the prime targets.
In advance of this, we will be treated to a rerun of horror stories designed to convince United Statesians that Social Security is unsustainable. The claim will once again be that either we’ll have to accept steep cuts to Social Security payments or privatize it, putting our retirements in the hands of Wall Street. This has been the wet dream of financiers for decades, and as an added bonus, Wall Street is another major beneficiary of the Trump tax cuts. “Heads I win, tails you lose” is always the way of Wall Street and here we have it again, pocketing untold millions from tax cuts and then taking away your Social Security when the ensuing deficit mounts.
One way of promoting privatization is to allege that there isn’t enough being paid into the system to cover future claims. It is true that in recent years Social Security has been paying out more than it is taking in, although it is far from broke. Concomitant with that argument is the claim that everybody takes out much more than they pay into it over their working lives. But that isn’t necessarily true — a Congressional Budget Office (CBO) report, issued in 2006, found that people earning near the median income get back about the same as they pay into the fund. Low-income earners do receive more than they pay, but conversely high earns get back less. But Social Security is supposed to be progressive. Indeed, the CBO’s report says, “The Social Security benefit formula is designed to provide beneficiaries who had lower life-time earnings with monthly benefits that are higher, as a percentage of their lifetime average earnings, than those received by higher-earning beneficiaries.”
The corporate interest in gutting Social Security
Those saddled with a lifetime of low or median earnings have spent a lifetime being exploited on the job, so whatever extras are received are pennies on the stacks of dollars extracted from them. Remember that profits come from the usually wide gap between what you are paid and the value of your work, and what financiers haul in is skimming off that pot collected by employers dealing in tangible services and products. There is a symbiotic relationship between financiers and industrialists and although there is much wrangling between them (which is why corporate press releases so often proclaim “enhancing shareholder value” as an important part of their mission), they have a mutual interest in exploiting employees.
That mutual interest extends to gutting Social Security, even if financiers have the more immediate interest. The challenge of funding Social Security isn’t a difficult one. An important reason why that is so is because Social Security taxes are only imposed on income up to $127,200. Anything above that is untouched. So why not raise the bar? Senator Bernie Sanders has introduced a bill that would apply this tax to all income above $250,000. This plan would eliminate 80 percent of the projected shortfall, according to an analysis from the Social Security office of the Chief Actuary. For whatever reason, Senator Sanders’ plan wouldn’t touch income in between. Taxing all income would raise still more money.
New York Stock Exchange (photo by Elisa Rolle)
Another method is suggested by Dean Baker of the Center for Economic and Policy Research. He argues that a payroll tax increase of four percent would be sufficient to fully fund Social Security and Medicare for another 75 years. He acknowledges that such an increase would be difficult for many workers, but he estimates that the loss of income from decades of upward distribution of income to be 40 percent — a loss ten times greater. That figures comes from the gap between the rate of earnings increases for working people and the rate of increases in productivity. He explains:
“[U]pward redistribution over this period has reduced wage growth by more than 40 percentage points. In short, our children are 40 percent poorer than they would otherwise be because of the money going to people like Bill Gates and Steve Zuckerberg rather than ordinary workers.
So by very conservative estimates, a typical person in their twenties or thirties has seen their income reduced by more than 40 percent because of all the money redistributed to those at the top. However, the generational warriors want young people to be upset about the possibility that a bit more than one-tenth of this amount could be used to pay for their parents’ and their own Social Security and Medicare. (This upward redistribution is also responsible for about half of the projected shortfall in Social Security, as more income going to profits and high-income workers escapes the Social Security tax.)
It is also important to understand that government action was at the center of this upward redistribution. Without government-granted patent monopolies for Windows and other Microsoft software, Bill Gates would probably still be working for a living.”
A trillion dollars for Wall Street
Privatizing Social Security would additionally cut benefits because financiers would take hefty cuts. The administrative costs of the retirement portion of Social Security (the bulk of the program) is 0.4 percent. In contrast, Dr. Baker reports, “even relatively well-run privatized systems, like those in Chile or the United Kingdom, are 10–15 percent of benefits.”
Such ratios were Social Security privatized would cost nearly $1 trillion in a decade, he calculates — $1 trillion taken from Social Security benefits and diverted into Wall Street’s bottomless pockets. Consider that the standard payment for hedge-fund managers is to receive an annual fee of two percent of the value of the total assets under management and 20 percent of any profits. The fee gets paid even when the fund loses money. In 2014, the top 25 hedge-fund managers hauled in $11.6 billion despite collectively underperforming the stock market.
Fees for ordinary money managers are not this high, and a privatized Social Security wouldn’t pay fees as exorbitant as those charged by hedge funds. But it would still be huge sums of money. That is why Wall Street has long lusted to get its hands on it.
U.S. Treasury Department under new management (photo by takomabibelot)
Then there is the matter of returns. Would gambling Social Security funds on the stock market really result in better results? Not necessarily. In studying the stock market’s long-term returns for an article I wrote a decade ago, not long after the 1990s bubble had burst, I found that you would have to time your retirement to the peaks of bubbles. When adjusted for inflation, the Dow Jones Industrial Average — the ultimate index of stock-market health and which has its components continually adjusted so as to replace low-performing stocks with high-performing ones — was below its 1929 peak as late as 1991. Here are some long-term results:
The Dow peaked at 995 in February 1965. Adjusted for inflation, that was 42 percent more than it was worth at its previous bubble peak in 1929, not so impressive when it took 36 years to get there.
The ensuring crash bottomed out in December 1974. At this point, the Dow, adjusted for inflation, was worth only half of what it was worth in 1929 and little more than one-third of its 1965 peak.
The most recent crash bottomed out in March 2009, at which point the Dow was three percent below its 1965 peak, adjusted for inflation.
The stock market is edging into bubble territory as we begin 2018, and stocks are priced high by historical standards. The basic measure of stock-price sustainability is the price/earnings ratio of the S&P 500, representing the largest companies on U.S. stock markets. The ratio’s average, calculated back to 1872, is 14. Prior to the 1990s bubble, the S&P 500 P/E ratio rose above 20 four times; each time it subsequently fell below 10. A standard measurement of the P/E ratio today is 26. One way to understand that number is that an investor is essentially paying $26 for each dollar of corporate profit, which is considered too high. It is true that the P/E ratio has been almost continually above the historic average since the 1990s bubble, but nonetheless this more recent rise indicates that a stock collapse is looming.
Goodbye retirement, goodbye disability payments
There aren’t any free lunches. A Center on Budget and Policy Priorities study notes that Social Security is not only a retirement program, but also an insurance program that could not be duplicated if privatized:
“Social Security is not only a retirement program but also an insurance program. About one-third of payroll taxes go to fund Social Security disability insurance and survivors insurance. Comparable insurance products would be extremely expensive to buy in the private insurance market, if one could even find such products. Social Security also provides an inflation-indexed annuity: Social Security benefits are adjusted each year for inflation and are paid until death, regardless of how long a beneficiary lives. These features of Social Security provide a valuable form of insurance against the risks of inflation and of outliving one’s savings.”
“Government investment in private securities does not offer a free lunch: although it would increase the expected value of budgetary resources, it would do so at the cost of exposing the government, future taxpayers, and beneficiaries of federal programs to greater risk. If that risk was taken into account, the returns on private securities would be no greater than the returns on government securities. … Using risky investment portfolios to finance spending by government agencies could weaken budgetary control of federal financial resources.”
That last item, however, is a lure of Republicans and their corporate masters. Create a larger deficit, cut social spending, repeat. This reduces lifespans, reducing payouts through Social Security and corporate retirement plans, for those lucky enough to still have one. Earlier deaths has already been declared a “silver lining” by U.S. corporations.
And let us not forget the sometimes bipartisan nature of Social Security cuts — Barack Obama had proposed a change to the way inflation is calculated for the determination of cost-of-living increases that would have resulted in lower adjustments for inflation, effectively a small yearly reduction. He did so as a bargaining chip in an effort to force Republicans in Congress to agree to modest tax increases. Ultimately, a Democratic Party revolt, spurred by grassroots opposition, forced an end to this plan, but this episode does serve as a reminder that social movements, not hoping for political office holders to do good, is the key to being able to retire some day.
In Chile, in 1998, the government actually asked workers not to retire because of a sustained economic downturn. (The Chilean retirement system was forcibly privatized under Pinochet). Think it can’t happen elsewhere? Keep in mind these words by Stephen Moore of the far right groups Club for Growth and Cato Institute: “Social Security is the soft underbelly of the welfare state. If you can jab your spear through that, you can undermine the whole welfare state.”
You’ll work until you drop, but Wall Street will profit.
Participating in Monday evening’s demonstration at the Trump Tower in Manhattan, I couldn’t help thinking of the connections between a Bloomberg article proclaiming that people dying earlier contains a “silver lining” because corporations will save pension costs and the ongoing savagery of the Trump administration.
Not simply the naked symbiosis between the Trump administration and white supremacists, neo-Nazis and assorted far-right cranks — all too sadly on display in Charlottesville, Virginia, last weekend — but the alliance of corporate titans, Republican Party leaders and President Trump himself. The rush by even conservative congressional Republicans to condemn the tweeter-in-chief for his refusal to condemn his so-called “alt-right” allies for two days should not distract us from the Trump administration’s all-out assault on regulations, civil rights laws, health care and the environment. (Let’s please retire the useless term “alt-right” and call them what they are: white supremacists, fascists and fascist wannabes.)
The health care system of the United States is already by far the world’s most expensive while delivering among the worst results. So of course the solution to this, in Republican eyes, is to make it worse. That effort has, so far, failed, thanks to massive grassroots activism. But plenty else is being rammed through under the radar through executive decrees — which is why we shouldn’t hold our breath waiting for Congress to impeach President Trump. He’s much too useful to Republicans and corporate executives. Should that change, of course, all bets are off, but short a Democratic tidal wave in 2018 Republican members of Congress turning on the president anytime soon isn’t likely.
On the march against Trump in New York City August 14 (photo by Mark Apollo/Hashtag Occupy Media)
So what does this have to do with an article published by Bloomberg? The headline on this particular article says it all: “Americans Are Dying Younger, Saving Corporations Billions,” complete with a subhead declaring “lower pension costs” a “silver lining.” As not only a proud member of the corporate media, but one specializing in delivering news to financiers and industrialists, extolling a benefit to corporate bottom lines and ignoring the, ahem, human cost of said benefit is only to be expected. The article is not at all atypical of the business press, even if this one is a little more obvious than usual.
But, as a friend who is an activist with a Marxist party but who once ran a chemical industry consultancy by day (if only his clients knew his politics!) once taught me, the business section is where they hide the news. So the point here isn’t the attitude of Bloomberg toward working people (no more hostile and sometimes less so than your average business publication) but the attitude of corporate titans toward employees. The article states:
“In 2015, the American death rate—the age-adjusted share of Americans dying—rose slightly for the first time since 1999. And over the last two years, at least 12 large companies, from Verizon to General Motors, have said recent slips in mortality improvement have led them to reduce their estimates for how much they could owe retirees by upward of a combined $9.7 billion, according to a Bloomberg analysis of company filings.”
Austerity costs human lives
Gains in U.S. death rates had been improving until 2009, Bloomberg reports, citing a Society of Actuaries analysis, but those rates then flattened before reversing in 2015. This isn’t necessarily unique to the U.S. — the Institute and Faculty of Actuaries in the United Kingdom last month reported that U.S., Canadian and British seniors have ceased seeing longevity improvements, suggesting the impact of austerity since the 2008 economic collapse is a primary culprit. The Actuaries report said:
“The rising mortality rates among US working age demonstrates that the historical fall in mortality rates cannot be taken for granted. The pace of life expectancy gains of older ages has slowed down, with some age groups showing signs of increasing death rates. These signs should be taken as warnings that worsened health care, behaviour and environment can reverse decades of success in health and longevity. Actuaries need to have a better understanding of the drivers of longevity to consider how to incorporate recent experience into forecasts of future longevity.”
As welcome as a new quantification of the toll of austerity is, such a notion is far from new, nor is it simply the latest variant of capitalism, neoliberalism, that is at work here. The increased deprivation of capitalism caused a half-million U.S. deaths from 1999 to 2015. Specifically, nearly half a million excess deaths have occurred since 1999 among middle-aged White non-Hispanic United Statesians, according to a paper published in 2015 by two Princeton University researchers, Anne Case and Angus Deaton.
A shuttered hospital (photo by Jim Henderson)
From 1978 to 1998, the mortality rate for U.S. Whites aged 45 to 54 fell by 2 percent per year on average, matching the average rate of decline in five comparison countries (Australia, Britain, Canada, France and Germany). But although, from 1999, other industrial countries continued to see a decline in mortality rates for the middle-aged, the U.S. White non-Hispanic mortality rose by half a percent a year, an increase that is unique, Drs. Case and Deaton reported. African-American death rates have not similarly risen although remain considerably higher than those for Whites.
The authors do not speculate on the reason for White deaths to increase in contrast to the trend of minority groups, but we might reasonably conclude that People of Color have had deprivation and economic difficulty imposed on them in greater numbers and more intensely, and thus are experiencing less of a change in historic circumstances than are Whites. The economic downturn that the world has lived through since 2008 certainly hasn’t bypassed People of Color — far from it — but the decline has not spared Whites, a group not as hardened to lower living standards thanks to their privileges.
Privatization costs human lives
Privatization and intensified reliance on “the market” has already been demonstrated to worsen health outcomes. A 2009 study published by The Lancet concluded that the mass privatization in the former Soviet bloc resulted in one million deaths. Mass privatization caused the average number of deaths to increase by 13 percent from the 1992 onset of shock therapy. An Oxford University press release summarized these findings:
“David Stuckler, from Oxford’s Department of Sociology, said: ‘Our study helps explain the striking differences in mortality in the post-communist world. Countries which pursued rapid privatisation, or ‘shock therapy’, had much greater rises in deaths than countries which followed a more gradual path. Not only did rapid privatisation lead to mass unemployment but also wiped out the social safety nets, which were critical for helping people survive during this turbulent period.’ ”
During Soviet times, we were assured by Western commentators that high levels of alcoholism were a sign of despair in Russia, yet alcohol per-capita consumption rates in 2007 were three times that of 1990.
When a health care system is designed to deliver corporate profits rather than health care — and this is precisely what privatized health systems do — such are the results. Throwing more than 20 million people off the roles of health insurance, as all Republican Party plans would have done, could only have exacerbated poor health outcomes. But doing so is consistent with Republican plans to shred what remains of the U.S. social safety net, sure to lead to further early deaths. As the more reliable instruments of the will of corporate plutocrats (Democrats having to sometimes make concessions to their voting base), Republicans see Donald Trump in the White House as a gift.
The purported disapproval enunciated by the likes of Senator Jeff Flake are a sad joke — the Arizona Republican has reliably voted for all Trump appointees and legislation. What really “embarrasses” members of Congress are the president’s vulgarity and ham-fisted obviousness. He simply refuses to use code words that way that ordinary Republicans have learned to do. Stop being so obvious! But in reality President Trump is the logical product of 37 years of Republican pandering — half a century if we go back to Richard Nixon’s “Southern strategy.”
We can certainly argue over what constitutes fascism, and whether President Trump is properly called a fascist or that he is simply a Republican who is more willing to show the fist behind capitalist rule albeit someone who carries the seeds for a potential fascist movement. The latter is more than scary enough. But as the casual talk of a “silver lining” for shortened life spans illustrates, human life is expendable in the pursuit of profits under capitalism. And as long as the Trump administration is useful to this pursuit, occasional protests from corporate executives will remain no more than hollow gestures.
So many put their puts hopes into Syriza; so many were bitterly disappointed. Greece’s Coalition of the Radical Left proved wholly unable to resist the enormous pressures put on it and it is Greek working people who are paying the price, not excepting those who voted for Syriza.
How should we analyze the depressing spectacle of what had been a genuinely Left party, indeed a coalition of leftist forces from a variety of socialist perspectives, self-destructing so rapidly? The simplistic response would be to wash our hands and condemn Syriza as “opportunists,” but we’ll learn exactly nothing with such an attitude. If we are serious about analyzing Syriza’s spectacular failure — including those who expected this outcome in advance — digging through the rubble is unavoidable.
There were many currents coursing through Syriza, in addition to other Left tendencies outside. Nor were there shortages of people who feared what the fate of Syriza might become, including leaders inside it, before it took power, reminds Helena Sheehan in her new book The Syriza Wave: Surging and Crashing with the Greek Left.* Written in exhilaration and sorrow, Professor Sheehan, a veteran of solidarity work with the Greek Left, rides those tides as she recounts the anticipation and optimism before, and the depression and shock afterward, inside Greece and among Syriza’s allies across Europe.
The prologue to this failure is well known, but Professor Sheehan takes us through it in a “you are there” style reflecting what was happening then and her own optimism. That we know how this story will end does not detract from this writing style; rather it heightens the emotions as we re-live what at the time appeared to be the imminent first serious blow against global austerity and the ever tightening grip of finance capital. This was not a pollyannaish optimism, for no one serious had doubts about the immense task facing Syriza should it be elected. Certainly Greece could not be a small socialist island in an immense sea of capitalism — Greece’s problems then and now can have only European and international solutions.
Still, someone has to go first. The international Left saw hope in Syriza, and Syriza economists worked on solutions. There was much political seriousness as Syriza was seen as the last hope; that fascism might well be next given the growing menace of Golden Dawn focused minds.
Professor Sheehan sets this stage, opening her book in 2012, a year in which a second memorandum is signed, forcing more harsh austerity on Greeks, and in which Syriza rose from a minor parliamentary presence to finishing a close second to Greece’s main party of the Right, New Democracy. Providing the analyses, hopes and fears of a variety of Greek activists gathered on repeated visits, she recounts Syriza’s strong efforts to engage social-movement groups (in contrast to the Greek Communist Party’s sectarianism) and for Syriza to be inter-generational in its leadership.
Tip-toeing to the election by backtracking?
Nonetheless, there was Left criticism that Syriza was “watering down its wine” or wanting only to manage capitalism instead of creating socialism. Syriza officials vigorously denied this, saying they would reverse austerity cuts, restore wages and pensions, and re-distribute wealth and power. This would not yet be socialism, but “was intended to open a new path to socialism for the twenty-first century.” One danger sign, however, was that the party was split on whether to remain within the eurozone, even if the euro and the European Union as a whole were seen as a site of struggle. Some within Syriza, such as Costas Lapavitsas, argued that Syriza should be prepared for a break with the European Union. Despite these warnings, no systematic preparatory work on any “Plan B” was formulated.
Austerity might have been coming down harder on Greeks than elsewhere in Europe, but this was no aberration specific to one small country EU officials saw as easy to bully. This was not a local battle, Professor Sheehan writes:
“These cuts to pay, pensions, and public services, this privatization of public property, this redistribution of wealth from below to above: these were not temporary contingent measures. These were integral to a systemic restructuring of capitalism. … Where there were once experiments in socialism in the east, there were now oligarchies. Next on the agenda: advances achieved by the labor movement in the west were to be stripped.” [page 58]
Yet no success in a single European country will be sustainable unless it is followed by similar successes in other countries.
“Yiannis Tolios, an economist, also elected to the [Syriza] central committee, articulated the problem starkly, but with a different stress: ‘If having socialism in a single country is considered hard, having socialism in all countries at the same time is nearly impossible.’ Greece needed to forge ahead, whether the rest were ready or not, but it was perilous path.” [page 59]
Syriza would reconstitute itself as a unified party, with its previous constituent groups, including its largest, Synaspismos, dissolving themselves (although some remained outside). One-quarter of the central committee were members of Left Platform, an organized faction advocating reversing austerity by any means necessary, with the central committee majority heterogeneous but pro-Alexis Tsipras. Internal critics complained that too much power was being concentrated in the hands of the party leader and his inner circle, nor was concern that Syriza was moving too far toward the right confined to the Left Platform.
Most active members of Syriza believed capitalism was the problem and socialism the solution, the author writes, but had “stopped dreaming of storming winter palaces.” She writes:
“They were not holding out for an all-encompassing insurrection, which would destroy capitalism one day and inaugurate socialism the next day. They were planning for a protracted process, which would include winning multiparty elections, entering into difficult negotiations, agreeing to unattractive alliances, undoing damage done, building the new inside the shell of the old.” [page 85]
Winning an election, but not necessarily power
Anticipation grew as Syriza prepared to take office, but the party’s 2014 Thessaloniki Program was seen by many as a significant retreat. Was Syriza watering down its wine even before the next election? Whatever the strength of the wine, Syriza won the election of January 2015. The “troika” of EU institutions and the International Monetary Fund that had been dictating austerity to the previous Greek governments wasted no time in tightening the screws on the new government in what was seen as an outright attempt to humiliate Syriza. Negotiations dragged on, and amidst much international solidarity, Prime Minister Tsipras called a referendum that summer to supposedly buttress his negotiating position.
Greeks responded by heavily voting “no” to further austerity. The Syriza government then did a remarkable about-face. Eight days later, Prime Minister Tsipras signed an agreement even more unfavorable that what had been demanded by the troika. More than half of Syriza’s central committee signed an opposition letter and most Syriza members were furious. This was ignored.
View of Vikos Gorge, Greece (photo by Skamnelis)
Some Syriza officials offered public justifications for this turn of events, arguing that the party was in a marathon and not a finished race, and that the party retained scope for maneuver and to continue to be a Left party through links with solidarity networks. Others, however, argued that the new agreement was a disastrous capitulation. One alternative path to austerity was to exit the eurozone. The counter-argument was that the analysis supporting a eurozone withdrawal was correct but nonetheless such a road should not be taken due to the balance of forces tilted heavily against the Greek economy.
There were arguments both for remaining in and for leaving the eurozone, but anti-austerity advocates on both sides recommended strong steps such as renouncing the debt, nationalizing the banks and imposing capital controls. These were not considered — Syriza never had a “Plan B.”
Staying in the eurozone was favored by a majority of Greeks, a factor undoubtedly an influence on the party. But by taking office without an alternative plan to negotiating with the troika, in particular EU officials completely cold to any Greek argument, Syriza had boxed in itself. Excuses by Syriza officials for why, rather than reversing austerity, they had agreed to its intensification were just that, excuses. Professor Sheehan challenges those excuses sharply:
“It was one thing to allude to a gun to the head and to admit to defeat, but another to turn around and to claim a great moral victory and to aim the attack on anyone who said otherwise. There was much violation of elementary logic, evasion of empirical evidence, and denial of ethical culpability. … The point about conceptualizing contradiction is not to affirm it and to wallow in it, but to struggle to resolve it, to transcend it, to create a new synthesis from it. As if intensified economic expropriation and political capitulation were not bad enough already, they added intellectual obfuscation and moral degradation to the dreadful reality unfolding. … You cannot build a left when you trash the very basis of our beliefs. It came from a mix of blatant opportunism, genuine confusion, psychological distress, and postmodernist sophistry.” [pages 133-134]
Syriza, despite all the bustle of the previous three years, had taken office unprepared. And, bizarrely, holding a belief that the troika could be reasoned with.
A suicide mission followed by a purge
Next was a “suicide mission for the Left” — Syriza introduced into parliament a 977-page bill to be voted on immediately with no time to be read. The Left Platform voted no as a unified faction and a separate Syriza parliamentary faction, the 53+ Group, complained about the stifling of party democracy, yet Syriza overall voted yes and the new agreement was approved with support from most other parties. “I do not believe that you can do bad to do good,” is the author’s succinct appraisal.
In the wake of shameful capitulation, rather than call a party congress, Prime Minister Tsipras decided to call a snap election, which he would use to purge Syriza of its left wing. He distinguished this campaign by attacking the Left and international supporters. The Left Platform members of parliament resigned to form a new party, Popular Unity, but with little time and no resources it failed to reach the 3 percent vote threshold. Syriza won again.
Defections from Syriza and attempts to build a new Left party have continued since as not only is no debt relief in sight despite one humiliating concession after another but Syriza lurches right in foreign policy and the prime minister falls to his knees in front of the church. It had taken Syriza only six months to travel the path that the former socialist party, Pasok, had traveled in 20 years but without the genuine reforms that Pasok had implemented early in its time in government. Implementing and expanding expropriation in order to end it is not dialectical; it is nonsense, Professor Sheehan points out.
So why had Syriza taken such a road? No one answer could suffice, but the author, in a wide-ranging survey, explores several opinions offered by various Greek activists. In short form these include:
That Syriza’s actions constitute a retreat, not a betrayal, as transformation is a painful marathon with many retreats.
Syriza had no coherent program but its left was too focused on a transformation of the state.
Syriza failed to contest the narrative of “there is no alternative” and should have renounced the debt, nationalized the banks and elaborated an anti-capitalist narrative.
Syriza’s failure is rooted in its class compromises and constant reassurances to the Right since 2012.
Popular Unity has a future despite “messing up” its first election.
It is impossible to control the economy inside the eurozone.
The power of money destroyed Syriza.
Helena Sheehan has written a most useful study of Syriza and in particular the range of platforms and outlooks, and the evolution of these, as the party prepared to take power and then found itself unable to manage, let alone solve, internal and external contradictions. That this is a “you are there” document from a personalized standpoint does not at all mean that The Syriza Wave is anything other than a serious political analysis. The work could have been strengthened in two ways: one, a deeper discussion of the economic issues, including the ramifications of staying in (or exiting) the eurozone, and, two, a discussion of how virtually every euro of the troika loans are going to creditors and banks rather than to the Greek people, a topic barely mentioned in passing only once. These are topics that would have added to the narrative.
Nonetheless, a reader wishing political analysis and to understand what activists and leaders in Syriza were thinking and doing, including ministers before and after taking up their posts, would do well to read this book. Professor Sheehan, despite the appropriately bitter denouncements of the party’s performance in office in contrast to her earlier support, ends on an optimistic note. We are, after all, supposed to learn from defeat so we can do it better in the future, yes?
No, you can’t really make this stuff up: Orthodox economists continue to tell us that the reason for ongoing economic stagnation is that wages and unemployment benefits are too high. Yes, that’s right. You haven’t suffered enough.
Given that orthodox economics (or “neoclassical” or Chicago School, if you prefer alternate labels) exists as a propaganda tool to justify all manner of capitalist excesses and inequality, it’s not actually surprising that such snake oil continues to be peddled with a straight face. Never mind the years of stagnant wages, the decades of wages trailing productivity ever further, housing costs rising far more sharply than inflation, and the increased use of debt just to stay afloat.
(Photo by Gargolla)
If you would just work for less, all would be well. The basic reason for that belief is an admission that, in a capitalist economy, wages are a commodity. (That really means human beings are commodities, but we can only expect so much truth here.) This underlying belief is succinctly summarized by this commentary offered by the conservative Library of Economics and Liberty:
“Unemployment is just a labor surplus; since wages are the price of labor, the fundamental cause of unemployment has to be excessive wages.”
But capitalism is supposed to be a perfect system, always moving toward equilibrium, according to capitalist dogma. So there should be no unemployment. There obviously is, so what’s the culprit? You’ve likely already guessed — it’s the government’s fault. The self-proclaimed capitalist tool, Forbes magazine, claims that wages aren’t increasing because “pent-up wage cuts didn’t happen” following the 2008 global economic meltdown and so poor downtrodden corporations have no choice but to keep wages from rising to make up for those cuts that should have been imposed. If only government policies wouldn’t interfere with the magic of the market, all would be well, Forbes asserts:
“To summarize, government regulation and policy are very much linked to the enduring presence of wage stickiness and slow wage growth since the Great Recession.”
There’s ideology, and then there’s the real world
You can even win a Nobel Prize for these beliefs. The Nobel Prize for economics isn’t actually a Nobel Prize (officially, it is an add-on called the “The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel”), but, still, it’s widely considered one and it’s the highest honor an economist can receive. It almost invariably goes to a conservative economist who upholds orthodox ideology. One recent recipient is Thomas Sargent. Although he formally received his prize for other work, Dr. Sargent is known for writings in which he argues that unemployment benefits are too generous, and if such benefits were reduced, there would be “incentive” for people to go back to work.
Here in the real world, there are many more candidates than jobs that pay a living wage, and unemployment benefits are insufficient to live on. Depending on the state, unemployment benefits amount to 30 to 50 percent of lost wages in the United States — hardly enough to live comfortably on, and it’s cut off after 26 weeks. British benefits are capped at £73.10, and it can be less if you have savings you have yet to tap. Nobody is living large on that amount.
Continental European unemployment coverage is better, and, interestingly, some of the countries with the highest levels of benefits, such as Denmark, Norway and Finland, have among the lowest unemployment rates, although those benefits have eroded in recent years. Nonetheless, social safety nets in general lead to unemployment, Dr. Sargent believes. In an interview with Swedish Television, he said workers ought to be prepared for having low unemployment compensation in order to get the right incentives to search for jobs.
“Sargent, with Swedish economist Lars Ljungqvist, found that high, long-lasting unemployment benefits in Europe have caused many European workers who lost their jobs to stay unemployed for years and, thereby, erode their human capital. This makes them less employable in the long run. The fact that the U.S. government extended unemployment benefits in many U.S. states to 99 weeks, said Sargent in the 2010 interview … ‘fills me with dread.’ ”
Those extended terms of unemployment have since been rescinded, so he can hopefully now sleep at night. Related to supposedly overly generous social safety nets, is the idea that working people stubbornly refuse to accept wage cuts. This is not entirely true, as the effects of the North American Free Trade Agreement demonstrate. NAFTA has caused a persistent decline in wages for displaced workers and manufacturers routinely threaten to shut down and/or move their facilities in response to unionization drives since NAFTA came into force. But, remember, we’re dealing with ideology here, not practical reality. Two years ago, the San Francisco branch of the Federal Reserve issued a report that blamed ongoing economic weakness on wages not falling enough. The paper claimed:
“One explanation for this pattern is the hesitancy of employers to reduce wages and the reluctance of workers to accept wage cuts, even during recessions, a behavior known as downward nominal wage rigidity.”
Cutting wages won’t be a panacea
Falling wages might provide a short-term boost to corporate profits, but the reduced purchasing power of working people would soon cause people to buy less. That is disastrous in advanced capitalist countries, where consumer spending generally accounts for anywhere from 60 to 70 percent of gross domestic product.
Lars Syll, a heterodox economist and self-described critic of market fundamentalism writing on the Real-World Economics Review Blog, put this plainly:
“The aggregate effects of wage cuts would, as shown by Keynes, be catastrophical. They would start a cumulative spiral of lower prices that would make the real debts of individuals and firms increase since the nominal debts wouldn’t be affected by the general price and wage decrease. In an economy that more and more has come to rest on increased debt and borrowing this would be the entrance-gate to a debt deflation crises with decreasing investments and higher unemployment. In short, it would make depression knock on the door.”
A food line in Toronto in 1931; falling wages didn’t work out during the Great Depression.
Falling wages were a reality during the Great Depression, but that didn’t help matters. By 1933 in the United States, manufacturing wages fell 34 percent and unemployment rose to about 25 percent. The Canadian economy contracted by more than 40 percent and unemployment reached 30 percent in 1933. Collapses in wages did not bring better times; only the massive government spending to wage World War II put an end to the Depression.
Moreover, already existing low wages come at a high cost. A 2015 study by the researchers at the University of California Berkeley Center for Labor Research and Education found that public benefits given to people who have jobs but can’t live on their meager wages cost the public more than $150 billion annually in the United States — more than half of total public-assistance spending by federal and state governments. Wal-Mart alone costs taxpayers an estimated $6 billion per year subsidizing the retailer’s low pay and paltry benefits at the same time it pays out similar amounts in dividends, half of which go to the Walton family.
Working harder for less
As all of you doing the jobs of two or three people at your place of employment have undoubtedly noticed, more work is not being rewarded with more pay. The average U.S. household earns about $18,000 less than it would had wages kept pace with productivity gains, and the average Canadian household is short at least $10,000 per year because of pay lagging productivity gains. Workers across Europe, including in Britain, Germany and Spain, have also seen pay lag productivity.
The upward flow of money not only causes more inequality but further concentrates power in the hands of plutocrats. As David Ruccio summarized in a separate Real-World Economics Review Blog post:
“If you put the two trends together—increased individual income inequality and increased corporate savings—what we’re witnessing then is increasing private control over the social surplus. Wealthy individuals and large corporations are able to capture and decide on their own what to do with the surplus, with all the social ramifications associated with their decisions to invest where and when they want—or not to invest, and thus to accumulate cash, repay debt, and repurchase their own equity shares.
And proposals to decrease tax rates for wealthy individuals and corporations will only increase that private control.”
“Ending poverty and giving people additional income are praiseworthy goals, but there are no free lunches in this world. And trying to force prosperity through a minimum wage simply creates a whole host of negative and unintended consequences especially for those who are the most vulnerable.”
The value of the minimum wage in the U.S. is about two-thirds of what it was when it reached its inflation-adjusted peak in 1968. The Canadian minimum wage is worth about a dollar less than its peak in 1976. Australia’s minimum wage is well below what it was worth in 1985.
Even in these bare bottom-line terms, a higher minimum wage is hardly a “free lunch.” It is still less so when we realize that jobs don’t come from the great benevolence of bosses nor are profits conjured out of thin air by the genius of capitalists. Employers generate profits by paying employees much less than the value of what they produce. Increased exploitation through work speedups, increased workloads and benefits reductions mean that capitalists are taking a bigger share of the value of what you produce.
And here we come to the real meaning of “freedom” that capitalists and their publicists so love to extol. “Freedom” for industrialists and financiers is freedom to rule over, control and exploit others; “justice” is the unfettered ability to enjoy this freedom, a justice reflected in legal structures. Working people are “free” to compete in a race to the bottom set up by capitalists. The world’s central banks have printed and spent $8 trillion (€7.4 trillion) to buy bonds, mostly those issued by their own governments. Imagine what that spending could have done if that money had been given to people or used for productive social spending instead of a free lunch for financial speculators.