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

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

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

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

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

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

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

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

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

Capitalism will end, as do all products of history

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

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

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

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

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

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

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

Are the reasons behind capitalism’s staying power psychological?

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

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

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

A garment factory (photo by Fahad Faisal)

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

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

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

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

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

Culture as the glue holding together capitalism

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

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

Meeting at the Putilov Factory (1917)

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

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

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

How high should movements aim? 

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

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

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

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

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

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

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

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

The “innocence” of early capitalism is another fantastical myth

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

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

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

The conquest of the Incas (mural by FUEJXJDK)

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

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

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

Markets over people from the start

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

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

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

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

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

Slavery critical to capitalist accumulation

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

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

Sheep in a meadow (Eugène Verboeckhoven)

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

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

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

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

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

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

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

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

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

Fantastic profits for European capital; death for Africans

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

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

The triangular trade (Graphic by Sémhur)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Grand Place, Brussels (photo by Wouter Hagens)

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

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

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

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

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

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

The skyline of Beijing (photo by Picrazy2)

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

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

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

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

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

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

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

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

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

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

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

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

Dollar dominance cemented at end of World War II

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Can the EU or China create an alternative?

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

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

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

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

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

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

No empire, or system, lasts forever

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

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

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

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

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

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

We can do better than capitalist formal “democracy”

An article I read shortly after Jacinda Ardern’s re-election in New Zealand noted, with a touch of weariness, that Labour’s victory came after a campaign measured in “weeks.” Folks there ought to count themselves lucky — the United States has endured years of campaigning in what has proved, to the surprise of no one, its nastiest presidential contest in memory.

Not to mention that the sclerotic U.S. political system has yet again thrown up two dismal choices, sadly reiterating that the two major parties offer a choice of extreme right (Republican) and center-right (Democrats). And although a common lament is that a third party is needed, one that might actually represent the interests of the majority of United Statesians, very few seriously considering pulling the lever for an alternative party, and the number of those who actually do are likely to be less than usual, given the understandably fervent desire to push Donald Trump out of the White House.

Millions will hold their noses while voting for Joe Biden. The lesser evil is still evil, especially given former Vice President Biden’s dismal record of war mongering, acting as an errand boy for big banks and turbo-charging the prison-industrial complex. So why does the U.S. not only offer such abysmal choices, but seemingly worse ones every four years?

Ultimately, the stranglehold of capital on all aspects of U.S. institutions, the ability of industrialists and financiers to buy Republican and Democratic politicians and their ownership of the news media makes the idea of “democracy” a farce. But the U.S. is a formal democracy, not yet a fascist dictatorship (despite the wishes of Trump), so theoretically it is possible for a popular movement to elevate a candidate pursuing progressive goals.

Cherry Blossoms in Washington during March (photo by Sarah H.)

Not so easy, of course, as the Democratic Party leadership, obeying the wishes of its corporate benefactors, did all it could to oppose the rise of Bernie Sanders — and Senator Sanders is merely an FDR-style liberal, not actually a socialist (despite what he calls himself). That a platform emulating the time that the party enjoyed its biggest congressional majorities is now beyond the pale speaks volumes. Even if Senator Sanders had been able to win the presidential nomination, corporate Democrats would undoubtedly have undermined his candidacy; party leaders like Hillary Clinton made it clear they would have rather seen Trump win re-election than see Senator Sanders win. Just as we saw in Britain, where Labour potentates, and far from only Blairites, clearly preferred to lose to the Conservatives rather than win with Jeremy Corbyn.

But beyond the sad spectacle of Democratic fealty to Wall Street and Republican worship of industrialists, the U.S. system, as currently constructed, is as foolproof a system of maintaining elite power as exists in any capitalist formal democracy. It’s only partly due to the U.S. being saddled with an anachronistic Constitution hopelessly out of date, a document that cements this corporate lockbox. Not that the Constitution should be overlooked; the U.S. Senate is the world’s most undemocratic legislative body (Wyoming, with 570,000 people, and California, with 39 million, both have two members) and the Electoral College allows a minority of voters to elect a candidate with a minority of votes (a presidential vote in Wyoming counts three times more than a vote in New York).

A president who received nearly 3 million votes less than his opponent in 2016 is enabled by a Senate in which the controlling party received a cumulative 20 million votes less than their opponents and is able to pack a Supreme Court with extremists out of step with majority opinion (an unelected Supreme Court that is a political super-legislature with powers far beyond those possessed by other countries’ high courts).

Choice is an illusion in a two-party system

The foregoing are certainly serious contributors to the backward U.S. political system, easily the worst among all advanced capitalist countries and worse than plenty of others elsewhere in the world. And we haven’t even touched on the pathetic unwillingness of Democrats to stand up for whatever it is they believe in and the party’s bizarre tendency to “stand up” to its base, products of the intellectual dead end of liberalism. Nonetheless, the ultimate reason for the two-party system is the U.S. system of single-seat, winner-take-all representation.

Until some form of proportional representation is enacted, United Statesians will be stuck with their deadening two-party system.

A representative body based on districts each with one representative is a closed system. With two entrenched parties contesting for a single seat, there is no room for a third party to emerge. Campaigns for elections to these bodies can be conducted on larger national issues or on the basis of an important local issue, but the tendency is for these elections to become contests between personalities. If the personality representing the other party is objectionable, or the other party is objectionable, then voting is reduced to the “lesser of two evils.”

The Hague (photo by Alphaomega)

The advantage of the two-party system (for its beneficiaries) is that it offers the illusion of choice, in contrast to one-party systems. This “choice” is illusory because capitalists, through the concentrated power amassed in their corporations and the ability of those capitalists to suffuse their ideologies into other institutions, restrict the scope of debate within boundaries acceptable to them — ideas that question their dominance are far outside those boundaries. Still, there is much more scope for the contesting of ideas and for serious acknowledgement of problems and devising solutions than in a one-party system. Individual political figures can be voted out of office, unlike in a one-party system, and although changing personalities does not in itself change the system in any way, it does provide a safety valve.

Voting for a party or an individual becomes a sterile exercise in ensuring the other side doesn’t win. From the point of view of the candidates and parties, the safest strategy is one of peeling away voters from the only other viable candidate, thereby encouraging platforms to be close to that of the other viable candidate, promoting a tendency to lessen differences between the two dominant parties.

Personalities over substance

With little to distinguish the two parties, the importance of personality becomes more important, further blurring political ideas, and yet third choices are excluded because of the factors that continue to compel a vote for one of the two major-party candidates. In turn, such a system sends people to representative bodies on the basis of their personalities, encouraging those personalities to grandstand and act in an egocentric manner once they are seated. These personalities are dependent on corporate money to get into and remain in office, and the parties they are linked to are equally dependent — the views of those with the most money are the views that are going to be heard. And if the district boundaries can be redrawn any which way periodically, the two parties can work together (since they control all political institutions) so that both have “safe” seats, or if one party is much more willing to employ bare-knuckles tactics than the other, it draws the lines to benefit itself.

The two parties nonetheless compete fiercely to win elections. They represent different groupings within the capitalist class — Republicans favor industrialists and Democrats favor financiers. This is a closed competition: They act as a cartel to keep corporate money rolling in and other parties out. These are the underlying reasons for the stability of a two-party system — replacing it with a multiple-party system would require fundamentally changing political structures.

Most any other system would be more democratic. Not altogether democratic as long as capitalism exists (the built-in inequalities and power imbalances can’t be wished away but must be eliminated through the construction of a better world), but at least an improvement.

One system increasingly being experimented with is ranked-choice voting, also known as instant runoff. In this system, a voter ranks as many candidates as she or he likes. If no candidate wins a majority of first-choice votes, the candidate with the least number of votes is eliminated, and the second choices of ballots choosing the eliminated candidate are then added to the remaining candidates; this can be done multiple times until someone has a majority. In this system, a voter can vote for who they really wish to see take office and rank the “lesser evil” second to keep the “greater evil” out. Australia uses this system but because its House of Representatives uses a winner-take-all, single-seat districts, there is an effective two-party system there (the Liberal/National coalition and Labor), although 14 of the 151 seats are held by minor parties or independents.

This system is an improvement, but it’s not the panacea its promoters promote it as. Using it for single-seat, winner-take-all districts leaves the system of two dominant corporate parties intact, continues to allow them to draw district boundaries to their benefit and only very marginally increases the long odds of a third party winning. At best, this is tinkering with a fatally flawed system.

If you want more choices, you need proportional representation

Multi-party systems can only exist where there is proportional representation, no matter the content of a constitution, even if a constitution never mentions parties.

Some parliamentary systems use a combination of some seats representing districts and some seats being elected on a proportional basis from a list either on a national basis or from large subdivisions. This allows voters to vote for a specific candidate and for a party at the same time. There is more scope for smaller parties here, and this type of system generally features several viable parties, depending on what threshold is set for the proportional-representation seats. Germany, New Zealand and Scotland use this system.

There can be two dominant parties in this system (as is the case in Germany and New Zealand), but the major parties often must govern with a smaller party in a coalition or even in a clumsy coalition with each other (thus, Germany’s tendency to produce periodic “grand coalition” governments). Parties in a coalition government will run on separate platforms and maintain separate identities — the next coalition might feature a different lineup. The rules can be set to make it difficult for any party to achieve a majority, as New Zealand and Scotland do, and thus encourage coalition governments. (Labour’s victory this month in New Zealand marked the first time a party won a majority on its own since this system was adopted.)

The city of Wellington (photo by John Ted Daganato)

Some countries fill all parliamentary seats on the basis of proportional representation. Each party supplies a list of candidates equal to the number of available seats; the top 20 names on the list from a party that wins 20 seats gain entry. This is a system that allows minorities to be represented — if a party wins 20 percent of the vote, it earns 20 percent of the seats. However, if the cutoff limit is set too high (as is the case in Turkey, where ten percent is needed), then smaller parties find it difficult to win seats and voters are incentivized to vote for a major party. Thus even in this system it is possible for only two or three parties to win all seats and a party that wins less than 50 percent of the vote can nonetheless earn a majority of seats because the seats are proportioned among only the two or three parties whose vote totals are above the cutoff.

A low cutoff better represents the spectrum of opinion and allows more parties to be seated. Governments of coalitions are the likely result of such a system, which encourages negotiation and compromise. The most common thresholds are three or five percent of the vote, but cutoffs can be lower. In the Netherlands, a party need only win 0.67 percent — the country is a single constituency with 150 seats. Thirteen parties currently have seats in the Dutch parliament.

Do we really have to limit ourselves to geography?

Such a system in itself doesn’t guarantee full participation by everybody; a national, ethnic or religious majority, even if that majority routinely elects several members of a parliament, can still be subjected to legal oppression. The threshold to win a seat in the Israeli Parliament has been set as low as one percent, and no party has ever won a majority, but that hasn’t prevented the consolidation of an apartheid state that renders Palestinians third-class citizens. The most open legislative system must be augmented by a constitution with enforceable guarantees for all.

Still another variant on parliamentary representation are multiple-seat districts. Voters cast ballots for as many candidates as there are seats — a minority group in a district should be able to elect at least one of their choice to a seat. This is a system that also has room for multiple parties, and with several viable parties in the running, votes are likely to be distributed in a way that no single party can win all seats in a given district. Ireland seats three to five members of the Dáil from each constituency, and additionally uses a form of ranked-choice voting known as “single-transferable vote” in which a voter can rank as many or as few of the candidates in his or her constituency as wished. All but four of the 39 Irish constituencies seated at least three parties.

One way to ensure that multiple parties will be seated might be to limit the number of candidates any party can run to a number lower than the total number of seats. More than one party is then guaranteed to win representation. There is such a stipulation in the District of Columbia — two of 13 seats are reserved for candidates not affiliated with the dominant Democratic Party. But that is not a guarantee that small parties will be represented. Both non-Democratic seats are currently held by independents, one of whom was previously a failed Democratic candidate. Members of the DC Statehood Party, however, have held seats in the past.

Of course we need not limit ourselves to traditional parliaments. Councils representing workplaces or other non-geographic constituencies were organized in revolutionary situations across the 20th century. Yugoslavia had a Chamber of Producers, elected from workers’ councils, one of two chambers in the federal parliament, from 1953 to 1963. For the next several years, Yugoslavia seated a five-chamber legislature! One chamber was the Council of Nationalities (10 members from each of six republic and five from the two autonomous provinces, a setup designed to dampen ethnic rivalries); the other four chambers included representatives from citizens by their economic or social-political function (economy, education and culture, welfare and health and organizational-political chamber). Unfortunately, the five-chamber federal legislature was not fully democratic because its members were delegated by members of lower bodies; there were direct elections only at the local level.

The human imagination can surely conceive of still more representative bodies. But future designers of political structures will need to eliminate single-seat, U.S.-style electoral districts — and overturn capitalism — if we are to ever have legislatures that are responsive to non-manipulated popular will.

Class warfare intensifies as labor rights violated around the world

As bad as conditions have traditionally been for labor worldwide, 2020 has seen conditions deteriorate even more. As in past years, there is not a single country on Earth that fully protects workers’ rights. And although every country continues to violate labor rights, the extent of those violations grows, continuing a sad pattern of class warfare.

The International Trade Union Confederation has issued its annual Global Rights Index, and only 12 countries managed to be listed in the Index’s top ranking, the countries that are merely “sporadic” violators of rights. But those countries are hardly paradises (this is capitalism, after all). One of those dozen, the Netherlands, had no less than seven of its corporations listed among companies violating workers’ rights. Those were not necessarily isolated instances. The report said, “In the Netherlands, unions observed an increasing trend to shift from sectoral agreements to company agreements with the intent of minimising labour costs in return for employability. Companies often used the competitiveness and employability argument with their employees to incite them to accept lower conditions of work at the enterprise level. In addition, companies, including Ryanair, Transavia, Jumbo Supermarkets, Gall & Gall, Action and Lidl supermarkets, tended to circumvent collective bargaining with representative unions.”

If that represents the “best” of conditions for working people, the world is a mighty unfair place. Which it obviously is, given the ever more intense pressure bearing down on working people as the neoliberal era continues to make capitalism ever more miserable for those whose work produces the profits swelling the pockets of industrialists and financiers.

As in past years, the Global Rights Index report divides the world’s countries into five categories with increasing levels of rights violations. They are as follows:

  • 1. Sporadic violations of rights: 12 countries including Germany, Ireland, Norway and Uruguay (green on map above).
  • 2. Repeated violations of rights: 26 countries including Canada, France, Japan and New Zealand (yellow on map).
  • 3. Regular violations of rights: 24 countries including Argentina, Australia, Britain and South Africa (light orange on map).
  • 4. Systematic violations of rights: 41 countries including Chile, Mexico, Nigeria and the United States (dark orange on map).
  • 5. No guarantee of rights: 32 countries including Brazil, China, Colombia and Turkey (red on map).
  • 5+ No guarantee of rights due to breakdown of the rule of law: 9 countries including Libya and Syria (dark red on map).

Hypocritical finger-wagging

Consistent with past years of the Global Rights Index, the United States, which loves to hold itself up as an exemplar of democracy and civil rights, is among the lowest-ranking countries — the U.S. has consistently had a ranking of 4 for “systemic” violations. The International Trade Union Confederation, in supplemental materials discussing U.S. violations, noted that the National Labor Relations Board has made a series of anti-union rulings, including allowing retaliation against striking Wal-Mart workers, while U.S. law permits anti-union discrimination, restricts workers’ rights to form unions of their own choosing, and places severe barriers against union organizing. 

The United Kingdom, second only to the U.S. in regular scolding of other countries, is ranked in the middle of the pack, same as a year ago. The report’s discussion of Britain reported “the number of people employed on a stand-by basis, ‘zero-hour contracts,’ at between 200,000 to 250,000 which demonstrates the prevalence of underemployment in the UK. Under these contracts employees have to be available for work but are not guaranteed a minimum number of hours. These contracts create income insecurity for workers and also undermine family life.” Additionally, the report noted multiple barriers to British union organizing.

Canada, although ranked higher than Britain or the U.S., is no paradise despite the image its governments like to project. The report noted that in Canada there are many categories of workers, ranging from domestics to professionals, barred from organizing, and there are severe legal restrictions limiting the right to strike.

A Wal-Mart protester is led away during a Black Friday action in Sacramento, California. (Photo via Making Change at Walmart.)

Globally, the report states that violations of workers’ rights are at a seven-year high. Direct attacks on unions highlight the degradation:

“The trends by governments and employers to restrict the rights of workers through violations of collective bargaining and the right to strike, and excluding workers from unions, have been made worse in 2020 by an increase in the number of countries which impede the registration of unions — denying workers both representation and rights. … A new trend identified in 2020 shows a number of scandals over government surveillance of trade union leaders, in an attempt to instil fear and put pressure on independent unions and their members.”

The global pandemic has only made conditions worse:

“These threats to workers, our economies and democracy were endemic in workplaces and countries before the Covid-19 pandemic disrupted lives and livelihoods. In many countries, the existing repression of unions and the refusal of governments to respect rights and engage in social dialogue has exposed workers to illness and death and left countries unable to fight the pandemic effectively.”

Class warfare goes on and on and on

Some of the sobering statistics gathered by the International Trade Union Confederation tell a grim story:

  • 85 percent of countries violated the right to strike.
  • 80 percent of countries violated the right to collectively bargain.
  • Workers were arrested and detained in 61 countries.
  • Workers experienced violence in 51 countries.

The Confederation, which describes itself as a coalition of “national trade union centres” encompassing 332 affiliated organizations in 163 countries and territories, determines its ratings by checking adherence to a list of 97 standards derived from International Labour Organization conventions. Those 97 standards pertain to civil liberties, the right to establish or join unions, trade union activities, the right to collective bargaining and the right to strike.

The Confederation’s report is one more illustration of the race to the bottom. The International Labour Organization estimates that more than 470 million people worldwide were unemployed, underemployed or “marginally attached to the workforce” in a report issued in January 2020, with 2 billion people (61 percent of the global workforce!) informally employed. That report was issued just before the Covid-19 pandemic took hold, triggering a dramatic economic crash that had been overdue, thanks to the instability of capitalism that regularly causes downturns. Inequality and lower pay are endemic around the world, and the costs of housing, because it is a capitalist commodity, rises far faster than incomes. The continual imposition of austerity on working people contrasts dramatically with the trillions of dollars thrown at financiers and industrialists since the pandemic began.

Capitalism promises nothing but more one-sided class warfare. We’re long past due to try something different.

Work is inevitable but its organization is not

All human societies, from the most primitive to the most modern, have an important commonality — the need to work. Water, food, shelter and other basics of life don’t arrive as gifts. Work is required to secure them and to raise the next generation.

So fundamental is this basic principal of human life that generations of Marxist theorists have based analyses of social societies and structures on the economic base of a given society. The base-and-superstructure framework is controversial to most other schools of thought, although it ought to be obvious that capitalist organization of an economy puts strong parameters on how that capitalist country can organize itself politically and culturally. Nonetheless, can traditional Marxist understandings be stretched to wider interpretations?

Computer engineer Paul Cockshott, in his latest book, How the World Works: The Story of Human Labor From Prehistory to the Modern Era,* answers with an emphatic yes. His premise is that Western Marxism has been too dominated by “people with a training in the humanities or social studies” who have a “reluctance to use mathematical quantitative analysis.” He intends to infuse the term “mode of production” with a “much more technological interpretation.” In other words, a study of technology is a better basis for understanding the organization of labor in the various modes of production over the course of human history.

This stress on technology is a strength of the book, but also, at times, a weakness. This perspective does enable fresh thinking about subjects as disparate as why agriculture supplanted the hunting-gathering stage, the inefficiency of capitalism and the cause of the weaknesses of the Soviet Union that culminated in its collapse. How the World Works is a book full of interesting ideas — I took double the amount of notes I ordinarily take to review a book, a good measure of its content.

How the World Works takes the reader through all the basic modes of production of human history — lengthy chapters each on “pre-class society,” slave economy, peasant economy, capitalist economy and socialist economy, plus a final brief chapter on “future economy” that revolves around the impending exhaustion of fossil fuels and the decrease in available energy that post-fossil fuel societies will likely face. Crucially, the book argues that the “idea of abstract labor” applies to all economies, not only capitalist ones.

Transitions to agriculture despite the extra work

Professor Cockshott demonstrates that agriculture required more work hours than did hunting-gathering, and asks the question: Why was the transition made? He argues that hunters wiped out big game and the population of hunter-gatherers became too large for available land to support. Although agriculture required more work, more food per unit is also produced. This change came with a crucial development — there was now a surplus. Hunter-gatherers had no storage facilities and had to be mobile; what was taken was quickly eaten. These were often egalitarian societies (although not always, based on studies of isolated societies that survived into the 20th century).

With the new phenomenon of surplus, the ability and, given the cyclical nature of agriculture, the necessity, of storing food for future use enabled the rise of hierarchy and significantly deepened the subordination of women that had its roots in hunting-gatherer societies’ tendency for women to move to other settlements for marriage, putting those young women, cut off from their original community, in subordinate positions to their husbands and mothers-in-law. But although a surplus is necessary for a nonproductive elite to arise, the book argues that a surplus on its own is insufficient to develop the social stratification that would develop:

“A class society requires a surplus, but the converse does not hold. A food surplus does not necessitate an exploiting class. Establishing that seems to have required other misfortunes: war, patriarchy, and religion.” [page 45]

Authoritarian ideologies must be developed to justify unequal status, and human sacrifice fuels high social stratification. Ideologies of superior and inferior human beings justified slavery, but Professor Cockshott additionally argues that slave economies were dependent on transport and urban markets. Labor is the source of value in slave economies. The next stage, feudalism, also featured exploitation but in a different form. A lack of transport and limited circulation characterized feudalism. Lords did not have to engage in systematic trade and peasants were self-sufficient; coercion was the glue that kept this economy in place.

The shift from feudal farming to capitalist farming required that peasants “be deprived both of security of tenure and access to communal lands” [page 93]. And that brings the book to its longest chapter, the discussion of work in a capitalist economy. Here is where the author’s technological perspective more fully comes into play. The price of labor regulates product pricing and profitability, and, crucially, if workers were paid the full value of their work in a capitalist enterprise there would be no profit for the capitalist — “in a capitalist society, there will be a markup” [page 111].

Advance of mechanical energy under capitalism

Where capitalism differs from feudal and slave economies is far greater use of mechanical energy and scientific research. In contradiction to a commonly accepted theory that the use of slave labor in the Roman Empire prevented the primitive steam engine that was developed then from being introduced into production because using machines would have been much more expensive than continuing to use slave labor, Professor Cockshott argues that Hero’s turbine was vastly inefficient to be of any industrial use. Even the first steam engines of the 18th century were exponentially more powerful and could greatly expand industrial capacity. He argues that it was this new capacity that was the catalyst for industrial capitalism: “Existence of commodity relations and wage labor would not have been sufficient to generate the capitalist mode of production” [page 123].

Limitations on productive capacity were overcome with the rise of fossil fuels and in turn advances in technology arising from more efficient fossil fuels led to innovation and new products that beget more new products. In turn, the capital required to build and operate large industrial factories was beyond the reach of workers and previously independent artisans, forcing small independent producers out of business due to the scale of competition. “[T]he application of powered machines and fossil fuels allowed rising labor productivity that closed off whole branches of production from the self-employed artisan” [page 128].

An English watermill (photo by Martin Bodman)

The capitalist who innovates early reaps an increased profit, but such benefits are always temporary as competitors will soon adopt the innovation. Perpetual competition forces increased reliance on technology, although the author argues that innovation for a capitalist is only worthwhile when wages are high. An example not examined in the book that also serves as a partial explanation for why so much production has been shifted to low-wage, developing countries is the ability to pay drastically lower wages. That is an “innovation” that competition dictates be swiftly copied. The book argues that the ability of capitalists to innovate “shouldn’t be overrated,” but the continual shifting of production and the development of global supply chains is grim evidence of considerable capitalist innovation, one of course deeply negative for working people. Control of the means of production also gives capitalists control of the technology necessary to make these transformations in production possible — yet more innovation that is bad for working people.

The mathematical approach of How the World Works does serve the author well in his theory of why the wage gap between men and women persists: Professor Cockshott argues that it is because women work fewer hours then men and as a consequence are less likely then men to be the sole wage earner in a family; he believes the wage gap won’t be closed until it is equally likely that women will be the sole family wage earner as men. The level of such a wage earner can’t fall below starvation level for the basic reason that mortality rates would skyrocket; it is the ensuing shortage of workers that would occur rather than any morality that put an ultimate lower limit on wages.

That natural lower limit of course does not prevent wages from falling to deeply exploitative levels. On top of that, finance produces still more inequality — it is not only unproductive but a huge drain of money. “Since so little finance goes into increasing real production, these rents [windfall profits] can only be sustained by depressing the real living standards of much of the population” [page 196]. Concomitant to that is the ever increasing cost of housing, which is a product of inefficiency. Because housing is an asset subject to speculation, it appreciates in price and thus speculation becomes more profitable than engaging in productive activity, which in turns draws in more speculative capital, further fueling the process. Loans by banks in turn go disproportionally to real estate. Yet more exploitation.

Judging socialism by actual conditions, not ideals

The chapter on “socialist economies” is likely to be the most controversial for many readers; certainly is was for myself. The chapter opens by noting, quite correctly, that there is no uniform definition of socialism. How the World Works argues that “as social scientists, we cannot judge the real world by the standards of an ideal one. It is not the job of reality to materialize our ideals. Reality just is in all its glories, horrors, and contradictions” [page 209]. To that, there is nothing to do except agree. Material reality is what we have to go by.

Interpreting that reality, on the other hand, leaves room for debate. How the World Works shoots down various theories of why the Soviet Union and the model it imposed on Central European countries wasn’t socialist, including that is used money, you can’t have socialism in a single country and there was scarcity rather than the plenty that socialism is supposed to provide. So far so good, although these arguments are presented in a somewhat cartoonish fashion rather than in their full complexity. Having ably dispensed with these arguments, and reiterating that there was a “common understanding” that those countries were socialist, the author offers his concept of what socialism actually is, based on what did exist.

Although he writes that “What distinguishes them are the forms of property and the way in which the surplus product is determined,” he concludes that socialism is characterized by machine industry and agriculture, the same as capitalism. His definition rests on, inter alia, a mix of technical achievements such as “widespread use of electricity” and “widespread use of machinery and applied science” interspersed with social relations such as “the absence of a class of wealthy private proprietors” and “public or cooperative ownership of most of the economy” [pages 209-201].

German hydroelectric power plant

To be sure, claims that the Soviet Union was “capitalist” is ultra-left phrase-mongering that sheds little light. But is socialism simply expropriation and building industry? If so, then one would have to agree with Josef Stalin’s boast in the 1930s that socialism had been built and Nikita Khrushchev’s follow-up boast in the 1950s that the Soviet Union was in the process of building communism, the successor to socialism. But is that all there is? A fuller definition of socialism mandates that democracy be extended to economic matters and strengthened in political matters, beyond what is possible in capitalism. It would follow then that expropriating capitalists and establishing state or cooperative ownership of most of the economy is a precursor to socialism, not the actual content in itself.

An alternative theory, not discussed in the book, is that the Soviet model represented a post-capitalist economy (certainly not capitalist) in transition to socialism, a transition never completed. Perhaps this can be seen as edging toward idealism and in contradiction to the agreement above that those countries had to be judged based on their material reality, which obviously included the fact that they had to expend so much of their resources on defense against never-ending attacks from the capitalist world. But to put forth this position is not to dismiss those experiences but rather to lament what could have been. The grassroots movement in late 1960s Czechoslovakia to keep the economy in state hands but have it managed by the workers through councils and coordinating bodies in a system of democratic social accountability was the advancement to socialism that never developed because of the Warsaw Pact invasion. That invasion was a function of closed-minded ideological prescriptions that had become calcified in one particular form, which evolved in chaotic fashion in one country (the Soviet Union) that cannot be extricated from the specific absolutist cultural heritage of that country’s dominant nation (Russia).

Socialism should be not only industrial development and an end to private capital but a democratic system that grows, develops and changes with the rise in consciousness and development of a society’s members, not a rigid formula.

Fiscal imbalances through imbalanced taxation

The term “actually existing socialism” was often used for the Soviet bloc, and despite the clumsiness of the term, perhaps that is a reasonable compromise. Those countries have reverted to capitalism, and so a discussion of their economies inevitably moves toward determining the reasons for why. Professor Cockshott puts forth an original theory on this: the system of taxation. Specifically, he argues that reliance on sales taxes and taxes on enterprise revenue rather than assessing income tax on wages hid the cost of free social services, forced up the cost of machinery and thereby discouraged mechanization and made the relative cost of providing free services more expensive. As a result, managerial hoarding of labor was encouraged with concomitant overstaffing and lack of efficiency measures. This thesis is related to his belief that the Soviet use of money was a mistake; rather, people should have been paid in “labor hours.” To this last point, we will return.

Mathematics are used to explain this theory. The economy is divided into three parts — production of the means of production (or what are called producer goods), production of consumer goods and the provision of uncharged services, such as education, health care and public infrastructure. The money for the third category has to come from some revenue stream, and the need to pay for those and the necessity of the first category of producer goods constrains what is available for consumer goods. Assuming that what is available for consumer goods must be limited to the money-equivalent of the hours spent producing consumer goods, the author suggests there were three possible methods of taxation: an income tax on employees, a sales tax or VAT, or by pricing all goods at a markup or profit.

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

Because there was no income tax in the Soviet Union, revenue for social services was raised from taxes on enterprise revenue, those producing for consumer goods and those producing for producer goods, and from sales taxes. Because of that, the costs of machinery is much greater, thereby making the provision of social services far more expensive that it would have been. It was “short-term populism that hampered efficiency” [page 256] and made labor cheap and machinery expensive.

Concomitantly, the author argues that Soviet workers should have been paid in labor hours rather than rubles. This would have been a fairer way of paying people and would have made any imbalances easier for all to see; money was necessary to disguise that, for example, that collective farmers were underpaid relative to their labor. In essense, the argument is that one hour of work should have been compensated by one hour of labor credit. Doing so would have immediate egalitarian effect:

“The significance of labor tokens is that they establish the obligation on all to work by abolishing unearned incomes; they make the economic relations between people transparently obvious; and they are egalitarian, ensuring that all labor is counted as equal. Is it the last point that ensured labor tokens were never developed under the bureaucratic state socialisms of the twentieth century. What ruler or manager was willing to see his work as equal to that of a mere laborer?” [page 263]

This arrangement would also eliminate black markets because the labor credits could not be circulated or transferred to someone else; they could only be used at communal stores. But “it is absolutely essential” that prices reflect the work value put into them to avoid imbalances. This would in turn make planning more responsive because deviations of sales from actual production would send a signal that production levels should be adjusted to real demand.

What caused the Soviet Union to collapse?

The foregoing were serious weaknesses in the Soviet economy, Professor Cockshott argues, in addition to the most skilled technical and professional employees becoming dissatisfied because their gains were not comparable to elites in the capitalist West. That social group’s dissatisfaction mattered because it was disproportionally represented in the Communist Party. The structural changes made by Mikhail Gorbachev had the effect of disorganizing an economy in which enterprises were strongly interlinked and enabling the rise of black-market criminals as state revenues plunged because declines in production resulted in less revenue due to the reliance on taxes on enterprises and sales taxes.

The author makes a strong case for his thesis that the taxation system underlaid Soviet economic crisis. I found much merit in it and considering it enriches our understanding of Soviet economics. But this is an instance where a heavy reliance on mathematics and technology leaves out some of what is a bigger picture. Left out is the over-centralization of the economy, the inability of central planners and the distribution system to have the knowledge necessary to ensure that raw materials and supplies were delivered properly and a rigid production quota system based on physical output. Base wages in the Soviet Union were low; workers counted on the bonus to be paid for fulfilling quotas. Managers and directors were responsible for fulfilling quotas handed down from ministries and their jobs were on the line if they didn’t. Thus both management and floor workers had incentives to hide capacity and keep quotas as low as possible, and keep extra materials and personnel on hand to “storm the plan” if they had fallen behind.

Surpluses of material somewhere meant shortages somewhere else; the difficulties in distributing sufficient supplies enhanced these tendencies. And because quantity and not quality was what mattered, shoddy products could be produced without real penalty. A full description of the Soviet economy can’t exclude these factors. Although the author dates the start of the imposition of capitalism to 1986, which should properly be dated to 1990, when General Secretary Gorbachev rammed through the legislature a series of measures that introduced elements of capitalism, including laws that ended working peoples’ limited ability to defend themselves and mechanisms to enable privatizations, that is a minor technical point. Reforms instituted from 1986 did place the burdens squarely on workers because of their one-sided implementation, and Professor Cockshott is entirely correct in writing that Gorbachev’s reforms ultimately disorganized the economy, precipitating a collapse.

Ultimately, the measure of a book isn’t whether we agree on all points; disagreement with some points of a book with such a large volume of interesting theories and analyses is inevitable. What is pertinent is stimulation of thought and the challenge of worthy ideas. A book that intends nothing less than to reveal the workings of the world from the earliest prehistory to the present day and beyond has set itself a sweeping goal. How the World Works succeeds marvelously.

* Paul Cockshott, How the World Works: The Story of Human Labor From Prehistory to the Modern Era [Monthly Review Press, New York, 2019]

If neoliberalism is crumbling, what will follow?

The biggest problem with the future is that you can’t know what it will be. When Ronald Reagan was elected United States president in 1980, we did not at the time realize a new era of capitalism had begun; that the ascension of Reagan in the U.S. and Margaret Thatcher in Britain a year earlier definitively brought the end of the Keynesian period. Less than a decade earlier Richard Nixon had said, “We’re all Keynesians now.”

The very election of Reagan was a shock — I truly thought that United Statesians would at the last moment recoil at the thought of an extremist who endlessly spouted lies and nonsense getting into the White House. Perhaps I simply overestimated the general public but the 1970s did introduce considerable economic uncertainty, enough for people to vote for a bad actor who told them what they wanted to hear.

And so neoliberalism was born, although the term wasn’t yet in use; back then we usually referred to “Reaganism” and “Thatcherism.” Their policies didn’t go away when their terms in office were up. A new, more vicious era was firmly upon the world. I can’t help but think about the parallels with the past four years. A bad reality television host and con man told United Statesians what they wanted to hear and despite his obvious mendacity, enough bought it so that another candidate who I was sure couldn’t possibly be elected was elevated into the White House.

A garment factory (photo by Fahad Faisal)

One parallel perhaps begets another. The 1970s stagnation of Keynesianism brought something much worse, the neoliberal era of capitalism, alas a much more representative specimen of the global economic system — Keynesianism was an outlier and a product of intense activism that forced significant concessions out of capitalists. Let’s not romanticize the Keynesian era — the benefits to working people were confined to White men with steady jobs and in the U.S. there was plenty of political repression to go around. Not to mention that capitalist exploitation of working people continued unabated; there simply were some extra crumbs given out.

Back to today: Given the crumbing economy, with its low-paid, precarious jobs, unsustainable and onerous student and consumer debt and inability to tackle global warming as features of a global race to the bottom, the ability of industrialists and financiers to keep neoliberalism going is increasingly in question. So if the start of the 1980s was the dawn of a new economic era, will the start of the 2020s be the dawn of another new era? And, if so, of what?

What’s old becomes new again

Post-Industrial Revolution capitalism can be roughly divided into three eras. First, the era of laissez faire, which came under strong pressure in the Great Depression and was ultimately followed by the Keynesianism of the mid-20th century. Laissez faire is an ideology that opposes government interference in economic affairs beyond the minimum necessary for the maintenance of property rights. (That ideology lives on — neoliberal godfather Milton Friedman insisted that the only proper role of government is to enforce contracts and provide for military defense.) The onset of the Great Depression served to discredit laissez faire, opening the space for alternative theories.

Keynesianism, simply put, is the belief that capitalism is unstable and requires government intervention in the economy when private enterprise is unable or unwilling to spend enough to lift it out of a slump. Mid-20th century Keynesianism depended on an industrial base and market expansion. A repeat of history isn’t possible because the industrial base of the advanced capitalist countries has been hollowed out, transferred to low-wage developing countries, and there is almost no place remaining to which capitalism can expand. Because profits were high and there were many new markets to conquer — and because they were fearful of having their system swept away by the dramatic rise in social organizing — capitalists tolerated wage gains after World War II.

Ship-breaking in Chittagong, Bangladesh (photo by Naquib Hossain)

As Keynesianism broke down over the course of the 1970s — or more accurately, as capitalists no long tolerated paying better wages and conceding better working conditions in the face of declining profits in a world of more intensive competition on an international level — industrialists and financiers brought on the era of neoliberalism in an effort to boost profitability. There were no effective counter-forces: The movements of the 1960s had vanished. Reagan and Thatcher were products, not the causes, of the new era. It took time to understand that. And when “the end of history” was proclaimed upon the crumbling of the Soviet Union, the process of smashing working people’s ability to defend themselves was only accelerated.

And here we are today. With ever fewer jobs that provide a living wage, housing and education costs rising far faster than inflation or wages, the ability of capital to effortlessly move production to wherever wages and regulations are the lowest, and a political system wholly captured by the biggest industrialists and financiers, it is no surprise that anger is rising around the world. Neoliberalism has reached its logical conclusion.

So what follows neoliberalism? And how much longer can capitalism survive?

There won’t be any return to Keynesianism, even if it were possible for that to be the cure to what ails the world. The specific circumstances of the mid-20th century no longer exist. We do not have to stretch our imaginations to know what the world’s corporate masters would be willing to do to keep themselves in power and money. Suspending constitutions and implementing outright fascism is possible if industrialists and financiers see no other alternative to keep their party going if conditions deteriorate to the point that large numbers of people begin to withdraw their consent to the formal-democratic version of corporate rule.

The future is unwritten

But even that would a temporary fix. You can’t have infinite growth on a finite planet, nor can you destroy the environment without limit. A collapse in civilization induced by unchecked capitalism is very unlikely to happen suddenly; without a global mass movement intervening, modern industrial civilization is likely to slowly fall apart over decades and thus capitalism, in this scenario, would also linger for decades. Whatever follows in the rubble left behind would not likely be pleasant; much would depend on the ability of our descendants to organize a cooperative economy in an era of scarcity and defeat the inevitable attempts at imposing dictatorial regimes that would offer simplistic solutions to complicated problems.

Technology is not likely to solve all our future problems for ourselves. The Star Trek universe, where decades of nuclear war is followed by the era of plenty for all (how else could Earth and the Federation afford all those starships?) isn’t realistic. Months, never mind decades, of nuclear war would be enough to reduce humanity to a primitive state, assuming humans even survived the wars. And the uses of technology are based on the relations of power. Technology today could be used to reduce the workday and reduce drudge work, for example, but instead it is used to intensify work and surveil employees. Because we live in a drastically unequal society, technology is a tool of those who possess power and capital instead of a being the liberating tool it could be in a better world.

Although we can’t know what the expiration date of capitalism will be, it is likely to be sometime in the current century. If we are in the beginning stages of the end of neoliberalism, that does not mean we are in the beginning stages of the end of capitalism. Given capitalism’s ability to absorb dissent and its elasticity, it is quite conceivable that some new form of capitalism could replace neoliberalism. Given a powerful enough movement coordinating on an international basis, a new version of capitalism could be something better, temporarily. Such a movement aiming at reforms within capitalism would eventually be disappointed — once movements stand down, the hard-won reforms begin to be taken away. An international movement for a better world has no choice but to work toward abolishing capitalism and instituting a system of economic democracy.

The rise of right-wing authoritarians with aspirations to become fascist dictators — people such as Donald Trump, Jair Bolsonaro, Recep Tayyip Erdoğan and Viktor Orbán — does not have to be a harbinger of the future as were Reagan and Thatcher. With enough people around the world organizing, it won’t be.

The world was once run by monarchs who sat on thrones due to divine will — God selected one family to rule in perpetuity. Most of the world’s people once believed that. Today, it would be laughable to promote such an idea. Not long ago in human history, millions of people were held in slavery — a human being could be owned by another human being and have no rights whatsoever. People believed that not only were certain people inferior and properly enslaved but that the economy would collapse without slavery. Today, not even the most vulgar racist would suggest such a thing in public.

Capitalism is not the end of history. It is nothing more than one more system of repression, one more system of organization. It is no more permanent than slavery, feudalism, absolute monarchy or any other system of the past. If this were not so, there would not be so much frenetic activity put into convincing us that “there is no alternative.” We’ll be deciding the next system in the coming years. If we don’t, it’ll be decided for us.