Now that we can see the TPP text, we know why it’s been secret

The text of the Trans-Pacific Partnership can now be viewed by the public, thanks to the New Zealand government, and it is every bit as bad as activists have been warning.

The TPP, if enacted, promises a race to the bottom: An acceleration of jobs to the countries with the lowest wages, the right of multi-national corporations to veto any law or regulation their executives do not like, the end of your right to know what is in your food, higher prices for medicines, and the subordination of Internet privacy to corporate interests. There is a reason it has been negotiated in secret, with only corporate executives and industry lobbyists consulted and allowed to see the text as it took shape.

The threat from the TPP extends beyond the 12 negotiating countries, however — the TPP is intended to be a “docking” agreement whereby other countries can join at any time, provided they accept the text as it has been previously negotiated. Moreover, the TPP is a model for two other deals: the Transatlantic Trade and Investment Partnership (TTIP) between the United States and the European Union, and the Trade In Services Agreement (TISA), an even more secret “free trade” deal being negotiated among 50 countries that would eliminate any controls on the financial industry.

Activists celebrate after the New York City Council declares the city a "TPP-free zone."

Activists celebrate after the New York City Council declares the city a “TPP-free zone.”

The elimination of protections is precisely what U.S. multi-national corporations intend for Europe by replicating the terms of the TPP in the TTIP, a process made easier by the anti-democratic nature of the European Commission, which is negotiating for European governments. Already, higher Canadian standards in health, the environment and consumer protections are under sustained assault under the North American Free Trade Agreement. The TPP is an unprecedented corporate giveaway, going well beyond even NAFTA, which has hurt working people and farmers in Canada, the U.S. and Mexico.

More than 300,000 jobs in the U.S. alone may be eliminated by the passage of the TPP. The Wall Street Journal, in an article celebrating victory for multi-national capital, nonetheless reported that 330,000 manufacturing jobs would be lost, basing this estimate on an estimated US$56 billion increase in the national trade deficit. That forecast is based on a U.S. Department of Commerce estimate that 6,000 jobs are lost for every $1 billion of added trade deficit.

Bad news on both sides of the Pacific

The Canadian union Unifor estimates that 20,000 Canadian jobs in auto manufacturing alone are at risk from TPP. Canada will also be forced to open its dairy and poultry industries. There is fear that Canadian dairy farming may collapse and the outgoing Harper régime promised $4.3 billion to compensate farmers from expected losses.

The Australian Fair Trade and Investment Network, while acknowledging that community pressure forced governments to resist some of the most extreme measures, worries that the U.S. concession to Australia that the extension of monopolies on biological medications will be five years rather than eight will prove ephemeral. The group reports that the text “refers to eight years and to ‘other measures’ which would ‘deliver a comparable market outcome,’ and to a future review. It is not clear how this will be applied in Australia.” The U.S. will retain its 12-year exclusivity period, while other countries can choose five or eight years, so there will likely be continued pressure from pharmaceutical companies for all to adopt a longer period.

A product would not have to be produced locally to qualify as a locally made product. As much as two-thirds of an automobile’s components could be manufactured in China, for example, and it would still qualify for preferential treatment if one-third is made in any TPP signatory country. But “buy local” rules would become illegal, including for government procurement.

There are no enforceable provisions for environmental, health, safety or labor protection. Public Citizen, in its analysis of the TPP text, reports:

“The language touted as an ‘exception’ to defend countries’ health, environmental and other public-interest safeguards from TPP challenges is nothing more than a carbon copy of past U.S. free trade language that ‘reads in’ to the TPP several World Trade Organization (WTO) provisions that have already been proven ineffective in more than 97 percent of its attempted uses in the past 20 years to defend policies challenged at the WTO. In two decades of WTO rulings, [the articles purporting to protect laws necessary to protect human, animal or plant life or health] have only been successfully employed to actually defend a challenged measure in one of 44 attempts.”

The ratio under TPP is likely to be even lower as the TPP promises the most extreme rules in favor of corporations of any “free trade” deal. Even the extremely weak “exception” does not apply to the entire investment chapter of the TPP. Precedent here is bad — as the secret tribunals that decide cases brought by corporations against governments hand down their one-sided agreements, these decisions become a floor for the next decision, pushing the interpretation further in favor of corporate domination.

Democracy canceled by corporate power

Under the TPP, corporations are elevated to the level of national governments and, in practice, could be said to be elevated above governments. The TPP text mandates that “customary international law” be applied for the benefit of an “investor” — that law is not found in any statutes, but rather has been established by previous decisions of secret tribunals interpreting NAFTA and other “free trade” deals. Worse, the TPP places essentially no limits on who qualifies as an “investor” eligible to be compensated for potential profits that may not materialize due to a regulation or safety rule.

Although the rules codifying benefits for multi-national capital are written in firm language, there is no such language for protections. The Sierra Club reports that the TPP mandates that only one of the seven environmental agreements found in previous “free trade” deals be fulfilled, an alarming development as previous environmental requirements have been routinely ignored. Among the many deficiencies in the TPP, the Sierra Club said:

“Rather than prohibiting trade in illegally taken timber and wildlife — major issues in TPP countries like Peru and Vietnam — the TPP only asks countries ‘to combat’ such trade. To comply, the text only requires weak measures, such as ‘exchanging information and experiences,’ while stronger measures like sanctions are listed as options. … Rather than obligating countries to abide by [rules to] prevent illegally caught fish from entering international trade, the TPP merely calls on countries to ‘endeavor not to undermine’ [fisheries-management protocols] — a non-binding provision.”

The TPP fails to even mention the words “climate change”! More than 9,000 corporations would be newly empowered to sue governments because a law or regulation hurt their profits. Worse, the TPP would mandate that the U.S. Department of Energy automatically approve all exports of liquified natural gas to all TPP countries. This would guarantee more fracking; already under NAFTA the province of Québec has been sued in an effort to overturn its fracking moratorium. That may only be the beginning, according to

“The agreement would give fossil fuel companies the extraordinary ability to sue local governments that try and keep fossil fuels in the ground. If a province puts a moratorium on fracking, corporations can sue; if a community tries to stop a coal mine, corporations can overrule them. In short, these rules undermine countries’ ability to do what scientists say is the single most important thing we can do to combat the climate crisis: keep fossil fuels in the ground.”

You’ll have no right know what you eat

Food safety would fare no better. The TPP’s race to the bottom would require that the lowest inspection standards of any country be applied, forcing a lowering of other countries’ standards, and end protections against untested genetically modified organisms (GMOs) in your food. Food & Water Watch reports:

“The TPP includes a new provision designed to second-guess the government inspectors who monitor food imports. … The food and agribusiness industry demanded — and received — stronger [rules] that make it harder to defend domestic food safety standards from international trade disputes. … Agribusiness and biotech seed companies can now more easily use trade rules to challenge countries that ban GMO imports, test for GMO contamination, do not promptly approve new GMO crops or even require GMO labeling. The TPP gives the food industry a powerful new weapon to wield against the nationwide movement to label GMO foods. The language in the TPP is more powerful and expansive than other trade deals that have already been used to weaken or eliminate dolphin safe tuna and country of origin labels.”

Health care will also come under direct assault, forcing other countries more toward the U.S. system, under which health care is a privilege for those who can afford it rather than a human right. Government programs to hold down the cost of medications are targeted for elimination in the TPP. Doctors Without Borders/Médecins Sans Frontières, which has been sounding the alarm for years, said:

“TPP countries have agreed to United States government and multinational drug company demands that will raise the price of medicines for millions by unnecessarily extending monopolies and further delaying price-lowering generic competition. … [T]he TPP will still go down in history as the worst trade agreement for access to medicines in developing countries, which will be forced to change their laws to incorporate abusive intellectual property protections for pharmaceutical companies. For example, the additional monopoly protection provided for biologic drugs will be a new regime for all TPP developing countries. These countries will pay a heavy price in the decades to come that will be measured in the impact it has on patients.”

The text of the TPP is subject to approval by legislative bodies in various countries, and while time is limited and the approval process is streamlined to facilitate approval in several of them, the Trans-Pacific Partnership can be defeated. This is not a national issue. Working people will be hurt everywhere, with jobs disappearing in developed countries and sweatshop misery for other countries — this is why multi-national capital, where ever it is based, is pushing for the TPP. If it is to be stopped, it will be through the combined activity of activists on both sides of the Pacific. We have no time to lose.

Work harder to be born into the right family

If we were to believe the fairy tales of capitalism, we would have to believe that 500 multi-billionaires work harder than the entire population of Japan. OK, I know that sounds crazy, but that is nothing more than following capitalist ideology to its intended conclusion: The wealthy are wealthy because their worked harder than you.

The 500 richest people on Earth are worth a collective US$4.7 trillion, Forbes magazine breathlessly informs us, and that total is a little more than the gross domestic product of Japan, the world’s third-largest economy.

The 20 richest people alone are worth a collective $900 billion! There are only 16 countries on Earth that have a larger gross domestic product than that. Quite a feat — 20 people possess slightly more assets than what is produced in an entire year by the 250 million people of Indonesia or the 17 million people of the Netherlands, one of the most highly productive peoples among the world’s advanced capitalist countries.

So these billionaires must work awfully hard to accumulate such riches, right? Let us see.

Wells Fargo Plaza, HoustonAmong the 20 riches people on Earth we find six technology moguls who took advantage of the Internet and world wide web created by governments using public money; seven people who inherited their wealth; a monopolist who was handed his country’s telecommunications system by a president to whom he made a large donation; one who made a fortune from the fashion industry; another who made a fortune in luxury goods; and a casino magnate. Two of those who inherited a fortune and their fathers’ business, Charles and David Koch, spend fortunes (not for them, but it would be a fortune to almost anybody else) to counter all efforts to reverse the global warming and environmental devastation that their business interests requires. Four others, members of the Walton family, receive billions of dollars a year just for being born into the right family.

To zoom out to a bit to more of the tip of the pyramid, Credit Suisse’s Global Wealth Report 2015 reports that the richest one percent of the world’s population owns 50 percent of the world’s wealth, a higher percentage than the one percent owned at the start of the global economic downturn in 2008. The bottom 70 percent of humanity owns three percent. That the richest have so much more means that the rest of us have less. The global median wealth per adult has fallen from US$4,200 in 2007 to $3,200 in 2015. In a very rare concession in a report that otherwise dispassionately reports trends in wealth as if they are as part of the natural world as ocean tides, the Credit Suisse report said:

“Part of the decline is due to adverse exchange rate movement movements, but rising inequality is the principal reason why the global trend in median wealth has not followed the path of mean wealth per adult.” [page 20]

Exchange rates are referenced because the Credit Suisse report converts wealth holdings elsewhere into U.S. dollars for the sake of comparison, and most currencies of the world have lost value against a strong U.S. dollar, thereby rendering those holdings artificially lower than they actually are. But the main point here is average wealth increases but median wealth has been declining. The reason is this: Average measures the difference between the highest and lowest, while median is the point where half are higher and half are lower. As the joke goes, if Bill Gates walks into a bar, everybody there has become, on average, a millionaire.

Unfavorable exchange rates or not, it is no surprise that the U.S. in particular, and the global North in general, are home to a huge majority of the world’s millionaires. Centuries of one-sided extraction of natural resources, control of land and financial plunder have increased global inequality. This is hinted at in a 2009 paper written by Branko Milanović, then a World Bank researcher, who calculated that the standard measure of inequality, a statistic known as the gini coefficient, has increased greatly since the early 19th century. But, he wrote, most of the inequality of the early 19th century was due to differences among individuals within countries and less by difference in wealth between countries. In the early 21st century, by contrast, the author estimates that about 90 percent of global inequality is due to differences between countries and only a small percentage due to differences among individuals within countries. He concludes:

“[I]nequality between individuals is much higher today than 200 years ago, but—more dramatically—its composition has totally reversed: from being predominantly driven by within-national inequalities (that is, by what could be called ‘class’ inequality), it is today overwhelmingly determined by the differences in mean country incomes (what could be called ‘location’ or citizenship-based inequality).”

We wouldn’t expect issued by a World Bank economist, even a working paper that is “unofficial,” to acknowledge class differences. The implication that class differences have ceased to be relevant can easily be corrected every time we walk into our place of employment, both by the relations there and by who pockets the value created by the workforce. Not to mention the drastic and growing inequality within countries. Nonetheless, Dr. Milanović’s reference to differences between countries is of course true, and although the World Bank certainly wouldn’t use the term, we can call that international inequality by its name: Imperialism.

As they have needed to expand under the pressures of competition, the capitalists of the global North moved in to newer locations, from which they could ship massive profits back home while leaving the local populations destitute and forced to work for starvation wages. This process of primitive accumulation, not much different from the sort of primitive accumulation that occurred in England and elsewhere at the dawn of capitalism, kept local elites happy but, more so, fattened the wallets of the corporate elites who set up operations. This transnational profiteering, a process known as imperialism, primarily filled bulging corporate coffers, but inevitably some tiny amount of it filtered down for some working people in the North. Jobs for administrators, sales representatives, warehouse workers and others related to supporting exports as new markets are forced open would be a direct manifestation, and manufacturing jobs tied to the expansion of production destined for export are created.

But competitive pressures inevitably force production to be moved to countries with much lower wages — thus the age of buoying living standards through export of locally made products comes to an end, supplanted by corporate globalization that moves jobs overseas and drives down wages. The shipping of production to locations with ever lower wages and regulations, accelerated by multi-national corporations pressing governments to adopt ever more one-sided “free trade” agreements, although a new form of imperialism, is one that drives down wages in the global North and increases inequality.

Thus, the era of corporate globalization promises more inequality. In your next life, work harder to be born into the right family.

Not even Wal-Mart is ruthless enough for Wall Street

As ruthless as Wal-Mart is, Wall Street has decided the retailer is not ruthless enough. Incredible though it might seem, financiers have been punishing Wal-Mart in part because the company has raised its minimum wage to $9 an hour.

Plans to increase slightly abysmally low pay and invest more money on Internet operations have Wall Street in an ornery mood because profits might be hurt. Is Wal-Mart Stores Inc. about to cease being a going concern? Hardly. For the first three quarters of this year, Wal-Mart has racked up a net income of US$11.8 billion — and the holiday season isn’t here yet. For the five previous fiscal years, the retailer reported a composite net income of $80.2 billion.

Alas, this isn’t good enough for Wall Street and its “what did you do for me this quarter” mentality. Traders have driven down the price of Wal-Mart stock by more than one-third in 2015, and a public statement on October 14 by the company that its earnings might be a little lower next year prompted the biggest one-day fall in its stock in 25 years.

Wal-Mart employees are joined at a rally by Reverend Billy and the Church of Stop Shopping in Vallejo, California (photo via Brave New Films)

Wal-Mart employees are joined at a rally by Reverend Billy and the Church of Stop Shopping in Vallejo, California (photo via Brave New Films)

Wal-Mart did attempt to offset that news by also announcing a new $20 billion buyback of shares, but not even blowing that kiss to financiers served to lift their moods. (A stock buyback is when a company buys its stock from shareholders at a premium to the trading price, which gives an immediate bonus to the seller and reduces the number of shares that divvy up the profits; news of this sort ordinarily sends financiers into paroxysms of ecstasy.)

This is the company that is the most ruthless in accelerating the trend of moving manufacturing to the locations with the lowest wages, legendary for its relentless pressure on its suppliers to manufacture at such low cost that they have no choice but to move their production to China, or Bangladesh, or Vietnam, because the suppliers can’t pay more than starvation wages and remain in business.

This is a company that pays it employees so little that they skip meals and organize food drives; receives so many government subsidies that the public pays about $1 million per store in the United States; and is estimated to avoid $1 billion per year in U.S. taxes through its use of tax loopholes.

We live under an economic system that is so insane that this has now been deemed by financiers to be insufficiently brutal.

The stack of billions is never high enough

How much further down can people be pushed? And when has so much money been amassed that even the most greedy are satiated? The answer to the first question has yet to be answered, but the answer to the second question seems to be “never.”

The four heirs to the Wal-Mart fortune are collectively worth $161 billion — they are the world’s richest family, richer even than the Koch brothers. The four are each, individually, among the 12 richest people on Earth. The Walton family pocket billions every year just from dividends — their company paid nearly $6.4 billion in dividends in 2014 alone, and the Walton family owns half the shares. The company spent another $6.1 billion in 2014 on buying back its stock. That’s $12.5 billion in one year handed out to financiers and the Walton family.

So it would seem that Wal-Mart could afford to pay its employees more.

Although the company said part of the pressure on profits will come from investments in building a larger Internet presence, it largely blamed its expected dip in profits on two planned boosts in pay, first to $9 an hour this year and then to $10 an hour in 2016. Reuters reported it this way:

“Wal-Mart Chief Executive Doug McMillon said a $1.5 billion investment in wages and training, including raising the minimum store wage to $10 an hour from $9, were needed to improve customer service and would account for three-quarters of the expected 6 percent to 12 percent drop in earnings per share next year.”

One and a half billion in wages and training for an unspecified period of time. Remember, this is a company that averages $16 billion in net profit per year. And in almost half the states of the U.S., mandatory minimum-wage raises would have forced stores in those states to raise the wage anyway.

Or to put this another way, the raises to $10 per hour — assuming the stated cost to the company is real — could be fully funded by cutting what the company spends on stock buybacks by one-quarter.

But it’s never Wall Street’s turn to cut back, is it?

No toleration of employee defense

Jess Levin, communications director for Making Change At Walmart, a campaign to advocate for Wal-Mart employees backed by the United Food & Commercial Workers, noted that pay raises could easily be offset by cutting hours:

“Walmart should be ashamed for trying to blame its failures on the so-called wage increases. The truth is that hard-working Walmart employees all across the country began seeing their hours cut soon after the new wages were announced. The idea that this truly drove down Walmart’s profits is a fairytale.”

What isn’t a fairy tale is Wal-Mart’s attacks on any attempt at organizing its stores. An In These Times report noted:

“A massive array of strategies has been tested, with little success: organizing department by department (when butchers at a Texas store voted for the union, Walmart eliminated all its butchers); organizing in Quebec, where laws favor unions (Walmart closed the store); organizing in strong union towns, like Las Vegas (several campaigns failed after supervisors intimidated a majority of workers out of unionizing).”

There are real-world consequences to these developments. A 2007 study by the Economic Policy Institute found that Wal-Mart alone was responsible for the loss of 200,000 U.S. jobs to China for the years 2001 to 2006, with Wal-Mart accounting for two-thirds of all U.S. manufacturing jobs lost during that period. Wal-Mart more recently has begun shifting manufacturing to countries like Bangladesh that are low-cost alternatives to China.

The Institute for Global Labour and Human Rights reports that garment workers in Bangladesh earn between 33 and 42 cents per hour, or up to $20 for a six-day, 48-hour work week. On the backs of those super-exploited workers, and on the backs of exploited store and warehouse employees, arise the fabulous wealth of the Walton family, Wal-Mart executives and financiers. Doug McMillion, the Wal-Mart chief executive officer, was paid $25.6 million for 2014 — or 24,500 times more than a Bangladeshi sweatshop worker working for a Wal-Mart subcontractor earns.

More is never enough — Wall Street is cracking its whip, demanding no letup in this massive upward flow of money. No slack is allowed. When do we stop believing this machine can be reformed?

The six-hour work day comes to Sweden

Why do we work so many hours? I mean beyond the obvious answer that the dictatorial employment relationships of capitalism force us to on pain of unemployment. Working hours declined from the inhuman work weeks of the industrial revolution until the mid-20th century, when the hours we work leveled off; in more recent years work hours have been increasing.

It certainly isn’t because productivity has plateaued. On the contrary, advances in machinery and computerization make us more productive than ever before. So why do we still work an eight-hour day after all these decades? (Or more than eight hours in many cases, and not necessarily with extra pay for office workers receiving a flat salary.) An eight-hour day was an outstanding achievement of social movements from the 19th century, when work days lasted 10 and 12 hours.

With the advancements in productivity over the years, we could certainly work fewer hours and still provide all that is necessary. Why not a six-hour day? Or less? In Sweden, there are ongoing experiments with six-hour work days, which so far have met with success. Not surprisingly, given the one-sidedness of workplace relations, these experiments are being done in the name of “greater productivity.” In other words, the standard is to be: Will this be good for the boss’ profits? That it might be good for the workers is part of the equation, but even this is commingled with the idea that rested workers will be more productive workers and thus more profitable for bosses.

Gothenburg, Sweden

Gothenburg, Sweden

Let’s first examine six-hour work days on these capitalist terms. The issue of how much productivity can be extracted out of workers, interestingly, is more explicitly stated in a test case of public workers than it is for private employers, in part due to right-wing opposition. In Gothenburg, Sweden’s second-largest city, two groups of municipal workers are part of a test in which one set will work six-hour days with full pay and the other set continues to work a standard eight-hour day. The hope is that a shorter day will reduce sick leave, boost efficiency and ultimately save money, according to a report in the Stockholm newspaper The Local. A Gothenburg deputy mayor, Mats Pilhem of the Left Party, said:

“We’ll compare the two afterwards and see how they differ. We hope to get the staff members taking fewer sick days and feeling better mentally and physically after they’ve worked shorter days.”

One group of public workers on six-hour days are nurses at an elder-care facility. This experiment is to continue until the end of 2016. Fourteen new staff members were hired to cover the lost hours, but a consultant told The Guardian that the nurses “are less stressed and have more time for the residents.” The city government is closely monitoring the experiment to see if the quality of service is higher with the six-hour work day. Nurses report having more energy at work because they are no longer exhausted from longer days of work, and a Left Party member of the Gothenburg council said quality of life for the employees should also be a consideration. He said:

“Not everything is about making things cheaper and more efficient, but about making them better. Under the Conservative-led coalition government in Sweden from 2005 to 2014 we spoke only about working more, and more efficiently — but now we want to discuss how to survive a long working life so we don’t destroy our bodies by the time we are 60.”

Not an unreasonable thought.

Private employers see benefits to shorter day

In the private sector, a Toyota service center in Gothenburg switched to a six-hour work day in 2002, with no cut in pay, and reports that its profits are up thanks to more efficient use of the center’s machinery. The Swedish Internet company Brath reports strong growth in revenue and profits using a six-hour work day. The company’s chief executive officer, Maria Bråth, believes that employees with time for the rest of their lives are more productive employees:

“That we have shorter days is not the main reason people stay with us, they are the symptom of the reason. The reason is that we actually care about our employees, we care enough to prioritize their time with the family, cooking or doing something else they love doing. … Another big benefit is that our employees produce more than similar companies do. We obviously measure this. It hasn’t happened by itself, we’ve been working on this from the start. Today we get more done in 6 hours than comparable companies do in 8. We believe it comes with the high level of creativity demanded in this line of work. We believe nobody can be creative and productive in 8 hours straight. 6 hours is more reasonable, even though we too, of course, check Facebook or the news at times.”

At the other extreme, working more than 40 hours per week is detrimental to physical and mental health. A study published earlier this year in The Lancet found that people working 55 hours per week had a 33 percent greater risk of a stroke than those who worked 35 to 40 hours per week and a higher risk of heart disease. This study analyzed more than 600,000 individuals, through data drawn from 20 studies, in several countries.

Studies conducted in the early 20th century, as the working day was progressively shortening toward the eight-hour norm, that productivity was actually greater with a shorter day. For example, the 1913 book Psychology and Industrial Efficiency by Hugo Münsterberg, regarded as a pioneer in applied psychology, summarizing the results of various factory studies, stated:

“It was found that everywhere, even abstracting from all other cultural and social interests, a moderate shortening of the working day did not involve loss, but brought a direct gain. The German pioneer in the movement for the shortening of the workingman’s day, Ernst Abbé, the head of one of the greatest German factories, wrote many years ago that the shortening from nine to eight hours, that is, a cutting-down of more than 10 per cent, did not involve a reduction of the day’s product, but an increase, and that this increase did not result from any supplementary efforts by which the intensity of the work would be reinforced in an unhygienic way. This conviction of Abbé still seems to hold true after millions of experiments over the whole globe.”

It is hardly a revelation that a tired workforce is going to make more mistakes and be subject to more accidents. The common belief by bosses that it is cheaper to force overtime on current workers, even in those cases where it must be paid when employment laws or union contracts can’t be evaded, than to hire new workers to handle increasing workloads isn’t necessarily true. Beyond the benefits to productivity or employer satisfaction, working fewer hours would be a partial compensation for pay that has badly lagged increases in productivity since the 1970s.

We produce more but don’t earn more

This pattern is persistent throughout the world. It has been in place since the early 1970s in the United States and although a more recent phenomenon elsewhere in the world’s advanced capitalist countries, workers everywhere suffer from stagnant wages while producing more. U.S. workers on average earn nearly 12 dollars per hour less than they would if wages had kept pace with productivity gains since 1973. Canadian workers earn on average 11,000 dollars per year less then they would if if wages had kept pace with productivity gains since 1980. Other studies demonstrate lags in wages versus productivity in Britain, France, Germany, Italy and Japan.

The bottom line is that we work more hours because bosses can extract more from us, even if they don’t extract as much as they believe they do when we are pushed beyond an eight-hour day. That a handful of bosses have the foresight to see that more profits can come from shorter work days does nothing to change that basic capitalist equation. Profits ultimately derive from the difference between what we are paid and the value of what we produce — the drive to increase this difference underlies both the stagnant pay of recent decades and the accelerating shifting of production, both manual and office work, to locations with ever lower wages and weaker regulations.

Graphic courtesy of Economic Policy Institute

Graphic courtesy of Economic Policy Institute

What if we worked for ourselves instead? If shorter work days are beneficial to working people — and reduce unemployment by requiring more workers to carry out necessary work — why shouldn’t this be widely implemented? So far, the discussion around the length of the working day has centered around what is best for bosses, as would be expected under capitalism. (And, make no mistake, Sweden is a capitalist country, albeit one that ameliorates some of capitalism’s harshness more than most others countries.) What if the workers ran the company themselves, or managed a public enterprise themselves?

A cooperative enterprise could similarly reduce the work day or possibly even more since it wouldn’t have to generate a large profit for a boss or, in the case of larger enterprises, for the top executives and shareholders. The steady increase in inequality, the immense fortunes held by the world’s billionaires that are far beyond any reasonable possibility of useful investment, the trillions of dollars stockpiled by multi-national corporations, and the immense waste of advertising and planned obsolescence attest to the fact that we work beyond what is necessary to meet human need.

If the economy were organized on the basis of an economic democracy — in which production is oriented toward human, community and social need rather than private accumulation of capital — the work day could reasonably be well less than eight hours. Economic democracy can be defined as where everybody who contributes to production earns a share of the proceeds — in wages and whatever other form is appropriate — and everybody is entitled to have a say in what is produced, how it is produced and how it is distributed, and that these collective decisions are made in the context of the broader community and in quantities sufficient to meet needs, and that pricing and other decisions are not made outside the community or without input from suppliers, distributors and buyers.

By no means is anything written in this article intended to be an argument against shorter, more humane working hours or higher pay today. But as such struggles intensify, as they must, they can help us move beyond reforms that somewhat lessen our exploitation to ending exploitation. If a six-hour work day is better for us, why not have more of the benefits accrue to those who do the work and to the community that supports that work?

Chinese stock bubble no panacea for low wages

China increasingly finds its journey to capitalism to be difficult, all the more so since the government’s strategy of inflating a stock-market bubble has not worked better than it does elsewhere.

Although, thanks to increasing worker militancy, wages are rising in China, it does not appear that China’s leaders have made any real progress in tackling over-reliance on investment and a low level of consumption, while inequality continues to rise. Encouraging working people to throw money into Chinese stock markets — much of which was borrowed — isn’t a substitute for a strong social safety net and living wages.

The corporate media is grumbling that measures Beijing has taken to stabilize its stock markets amount to a backtracking on its commitments to capitalist markets, but China’s integration into the global economic system is hardly at risk. The ruling Communist Party made its goal of increasing integration quite clear two years ago, when it set its economic goals at the 18th Party Congress’ Third Plenum.

The recently built, empty Chinese city of Ordos, Inner Mongolia (photo by Uday Phalgun)

The recently built, empty Chinese city of Ordos, Inner Mongolia (photo by Uday Phalgun)

At the time, corporate-media writers were disappointed the party did not choose to become a pet of the International Monetary Fund, evidently unable to read beyond the self-congratulatory slogans the party issued about its leadership. The party stated firmly its continuing commitment to capitalism, but also that its ongoing adoption of markets would be gradual.

This was clear enough at the time: The party’s communiqué following the Plenum stated it “must closely revolve around the decisive function that the market has in allocating resources” and would “accelerate the construction of free trade zones.” Xinhua, the official Chinese news agency, stressed that “The role of the market in China has officially switched from ‘basic’ to ‘decisive,’ and is key to understanding the reform agenda.” Earlier this month, President Xi Jinping reiterated this commitment:

“An important goal for China’s current economic reform is to enable the market to play the decisive role in resource allocation and make the government better play its role. That means we need to make good use of both the invisible hand and the visible hand. … To develop the capital market is a key goal of China’s reform, which will not change just because of current market fluctuations.”

When real estate cools, inflate a stock bubble

A rapid increase in debt and the petering out of a long real estate boom are two reasons said to be behind the inflation of a Chinese stock-market bubble. (A reversal of the order in the U.S., where a real estate bubble was inflated to counteract the burst of the 1990s stock bubble.) A McKinsey Global Institute study found that China’s total debt (corporate and all levels of government) quadrupled in seven years, reaching $28 trillion in mid-2014, a total nearly triple the country’s gross domestic product. The study says:

“Three developments are potentially worrisome: half of all loans are linked, directly or indirectly, to China’s overheated real-estate market; unregulated shadow banking accounts for nearly half of new lending; and the debt of many local governments is probably unsustainable.”

Arguing that the stock-market rally was “clearly sponsored by the Chinese government,” economist Alicia García-Herrero said the bubble was inflated to provide local banks and corporations with new sources of capital. But what goes up eventually comes down, a turn compounded by the high rate of borrowing that fueled stock purchases. There were two proximate causes of the crash, Ms. García-Herrero writes:

“First, there was a wave of profit taking after the Shanghai benchmark index broke through 5,000 in early June and doubts emerged about further easing from the [Chinese central bank]. At that very same moment, China’s securities regulator announced measures to cool down the market, which amounted to banning brokerage firms from providing unregulated margin funding to investors. This was more of a shock to the system than one might imagine, as margin financing in China is much larger than in other stock markets.”

The benchmark Shanghai Composite Index reached its peak on June 12 and has fallen by more than one-third since, wiping out about US$3.3 trillion of value. Apologists argue that the Shanghai Stock Market is still well above where it was as recently as mid-2014, which is true, but the current value of Chinese stocks aren’t so impressive when looked at in a longer time frame — the Shanghai Composite Index is today where it was in November 2010.

Beijing has taken a series of steps to stabilize Chinese stock markets, including halting initial public offerings, cuts to interest rates, directing national pension funds to buy stocks, and instituting a new rule that large shareholders and managers must not reduce their holdings for six months. Alleviating the stock-market crash appears to be seen by the party leadership as a necessity to dampen potential social unrest due to the massive borrowing by mom-and-pop investors encouraged by the government. A ninefold increase in margin lending by brokerage firms over the past two years fueled the bubble, according to The New York Times.

Devaluation in response to export slowdown

The summer’s stock-market crash coincides with signs that China’s economic growth may be slowing. Chinese exports and imports were both down sharply for July and August, and in response, Beijing intervened in foreign-exchange markets to force a small decline in the value of the renminbi. But that devaluation appears to have backfired as market pressure would have forced the value of the renminbi to continue falling, below China’s target, causing Chinese financial officials to further intervene to prop up the value of their currency.

Although right-wing politicians apparently believe China’s government sets the value of its currency by decree, in fact China (as do many other countries) has to spend considerable money to maintain its value to counter the force of currency speculators. The yen, euro, U.S. dollar and Swiss franc are among the currencies whose values have been pushed down at various times due to government spending. Countries that do not possess the reserves to do this are completely at the mercy of speculators.

China does have reserves, due to its large trade surpluses, and is believed by Bloomberg Business to have spent US$315 billion in the past 12 months propping up the renminbi. In August alone, China spent $94 billion to keep its currency from falling further in value.

OK, what does all this mean? The idea that China has built a wall that keeps out the world capitalist system simply isn’t so. China, in contrast to other developing countries, is big enough to set some of its own rules and push back against U.S. domination. But its integration into world markets means it is ultimately subject to the whims of those markets. Those are very real forces: Markets are not impartial, disinterested mechanisms sitting loftily in the clouds — they represent the aggregate collective interests of the world’s most powerful industrialists and financiers.

It is those interests that are behind the massive transfer of production to China and other low-wage countries. No enterprise is more responsible for this transfer than Wal-Mart Stores Inc., which leverages its size, innovation in computerizing its inventory and tight management of its suppliers to squeeze those suppliers. If a manufacturer wants to continue to have contracts to supply Wal-Mart, then it has no choice but to ship its operations overseas because it has no other way to meet Wal-Mart’s demands for ever lower prices.

Wal-Mart, although the most ruthless, is far from alone in this business practice. Apple Inc. accrues massive profits by contracting out its manufacturing to subcontractors. A 2010 paper by Yuqing Xing and Neal Detert found that Chinese workers are paid so little that they accounted for only $6.50 of the $168 total manufacturing cost of an iPhone. Of course iPhones cost a lot more than $168 — an extraordinary profit is generated for Apple executives and shareholders on the backs of Chinese workers.

By now, those Chinese workers earn more, although they still represent a minuscule cost against a gigantic profit. Wages have been increasing in China in recent years fast enough that wages doubled from 2009 to 2015. Yet inequality is rising in China; as measured by the gini co-efficient, the standard measure of inequality, the income gap has grown more there in the past two decades than in any other Asian country.

Chinese labor share of economy remains small

Thus, when measured against the overall economy, China’s workers are not really doing better. By one measure, a study by two University of Chicago business professors, the labor share of China’s gross domestic product was a woeful 36 percent in 2010, compared to 58 to 60 percent for Japan, the United States and Germany. That share was above 50 percent in the 1980s. (The trend of those percentages in each country is down.)

Another way of analyzing this is in household consumption: The share of household consumption in China’s gross domestic product in 2013 was 36 percent (this was the latest figure available), representing a continual decline from 47 percent in 2000. Household consumption in advanced capitalist countries tends to be between 58 and 72 percent of GDP. Finally, China’s capital investment remains extraordinarily large, accounting for 48 percent of GDP, far above what other countries spend and as high as it has been in the past.

China’s growth is still overly dependent on building infrastructure and exports, and despite still low wages production is already being transferred to other countries with still lower wages. The average factory worker in China earns $27.50 per day — pitiful by Northern standards, but much higher with the $8.60 in Indonesia and $6.70 in Vietnam. But higher wages are not distributed evenly in China. The minimum wage varies considerably among provinces and in six of the most important cities, the minimum wage is less than 30 percent of the average local wage even though Chinese law prescribes it should be at least 40 percent.

Although Chinese authorities often meet worker unrest with repression, concessions are also offered, enabling the increases in wages. Such unrest is growing more widespread: China Labour Bulletin reports that 1,642 strikes have taken place in China in 2015, more than all of last year. Strike totals are as follows:

  • 1,642 strikes in 2015 (total reported as of September 22)
  • 1,379 strikes in 2014
  • 656 strikes in 2013
  • 382 strikes in 2012
  • 185 strikes in 2011

Alternative organizations are leading many of these struggles due to the lack of effective trade unions, the Bulletin reports:

“Labour rights groups, especially those in Guangdong, emerged to play the role a union should be playing, supporting workers in their struggle with management, helping them to conduct collective bargaining and maintaining unity and solidarity.”

What the future for China will largely depends on its working class’ ability to organize, a difficult task in the face of tightened repression. To what extent President Xi’s anti-corruption campaign really is an effort to root out corrupt “tigers and fleas” and to what extent it is a continuing purge — the “tigers” thus far are primarily associated with former President Hu Jintao — is difficult to know given the opacity of the party and the factions that contend within it. That the politically connected and coastal elites within China have become wealthy signals there is a powerful bloc within the party committed to the path it has taken since the Deng Xiaoping era.

Northern, and especially U.S., capitalists have profited well from China’s policies, too. Thus it behooves U.S. and Chinese working people, Northern and Southern workers, to recognize their common interests. Industrialists and financiers around the world are united in their neoliberal drive; we can only defend ourselves on an international basis.

Turning national parks into corporate profit centers

Given the corporatization of ever more commons, we may yet be visiting Golden Arches National Park or Disneyland Dinosaur National Monument. Even if the most extreme right-wing plans to auction off public lands don’t ever come to fruition, ongoing neglect can only promise creeping corporate colonization of the United States National Park system.

Commercialization is still relatively minimal in national parks, but worrying signs are there. Infrastructure improvements in Glacier National Park in Montana, for example, have been accomplished through funds raised by the Glacier National Park Conservancy, which gets much of its funding through “business partners.” The list of businesses are mostly local and likely are motivated by a desire to maintain the park so as not to damage a tourism-dependent local economy. Such a motivation is not unreasonable, but if the underfunding of parks like Glacier gets more severe, the temptation of such private conservatories to reach out to bigger and more powerful national corporations is not likely to be avoided.

Giant corporations are likely to see “donations” to parks as a marketing ploy. Will we begin to see corporate logos in the parks? Outright corporate sponsorship of parks, in the manner of sports stadiums? Will the parks be expected to show a profit? This may sound outlandish, but we are talking about the United States here: A country in which governments ask for advertising dollars and borrow money rather than taxing corporations or the wealthy, and where pervasive corporate ideology insists that “private enterprise” runs everything better.

Aftermath of a fire in Yosemite Park (photo by Pete Dolack)

Aftermath of a fire in Yosemite Park (photo by Pete Dolack)

The idea that a park should generate a profit actually already exists. In New York City, the Brooklyn Bridge Park along the waterfront near downtown Brooklyn actually is expected to be profitable. This is not a joke: A high-rise luxury condominium building is being built inside the park to pay for its maintenance.

When the government runs something for the common good, it doesn’t need to generate a profit as a private enterprise does — privatization, or creeping “public-private partnerships,” inevitably make a good or service more expensive. And a favorite tactic of right-wing ideologues is to starve a government service of funds so it doesn’t work well, then demand it be taken over by a corporation (and usually sold at a fire-sale price).

Whatever the reasons may be, the neglect of national parks has gone on for so long that the backlog of deferred maintenance is now $11.5 billion. To put that figure in perspective, the entire fiscal year 2015 budget for the National Park Service is about $2.6 billion.

This neglect is bipartisan — the maintenance backlog reached $5 billion under Bill Clinton and ballooned to $9 billion under George W. Bush. The Bush II/Cheney administration instructed park superintendents to use language like “service-level adjustments” instead of “budget cutbacks” in public. The National Park Service budget suffered more cutbacks under Barack Obama — from 2010 to 2015, the National Park Service budget was cut 12 percent in inflation-adjusted dollars, including a reduction of more than 60 percent to the construction budget.

White House offers crumbs, Congress takes them away

The Obama administration is proposing an increase in parks funding for fiscal year 2016, in deference to the service’s 100th anniversary; an increase that would put nothing more than a small dent in the maintenance deficit. Unfortunately, this increase includes more money for a “private-public partnership” challenge — more corporate money. But Congress shows no sign of agreeing even to this modest funding increase. The House of Representatives Appropriations subcommittee that oversees park operations proposes to provide $680 million less than what the Obama administration asks and the Senate’s equivalent subcommittee proposes only $50 million more than the House.

So are we going to see corporate branding in our national parks to make up for such losses of funding? The signs are not good. In a commentary, Jim Hightower notes that opponents of public services want to convert the parks into “corporate cash cows.” He writes:

“First in line was Coca-Cola. In 2007, the multibillion-dollar colossus became a ‘Proud Partner’ with Park Service by donating a mere $2.5 million (tax-deductible, meaning we taxpayers subsidized the deal) to the Park Service fundraising arm. In return, not only did Coke get exclusive rights to use park logos in its ads, but it was allowed to veto a Park Service plan to ban sales of bottled water in the Grand Canyon park. Disposable plastic bottles are that park’s biggest source of trash, but Coke owns Dasani, the top-selling water, so bye-bye, ban. Public outrage forced officials to reverse this crass move, but the Park Service’s integrity has yet to recover.”

Nor has The Coca-Cola Co. or other bottled-water companies such as Nestlé S.A. given up. On their behalf, Republicans have slipped an amendment into a budget bill that would prohibit the National Park Service from instituting any prohibitions on bottled water, such as plans to provide spigots to re-fill bottles in place of buying new bottles. (No surprise there, as Nestlé’s chairman believes water should be a market commodity rather than a human right.)

Corporate sponsorship, however, is not the worst of it. Demands to allow more resource extraction on public lands, extraction that is a windfall for energy companies, continue to be insistent. Oil and gas royalties charged by the U.S. government are among the world’s lowest, unchanged since 1920, and are lower than any U.S. state charges for extraction on state-owned lands. Already, extraction sometimes comes right up the borders of parks. The National Parks Conservation Association, an advocacy group, notes that fracking is occurring right outside Glacier National Park. In its report, “National Parks and Hydraulic Fracturing,” the association wrote:

“[N]ational parks in relatively undeveloped regions have also seen fracking arrive at their doorstep: From Glacier National Park’s eastern boundary, visitors can throw a stone and hit any of 16 exploratory wells and their associated holding tanks, pump jacks, and machinery that is capable of forcing millions of gallons of pressurized fluids into energy deposits hiding thousands of feet beneath the earth. … Visitors heading east from Glacier National Park encounter road signs urging caution against the poisonous gases that fracking operations emit.”

Fracking and fires

Having just spent a week and a half visiting the park, I fortunately didn’t see that — perhaps a function of the smoky haze that filled the air for weeks there. (This smoke was a result of northwestern Montana being downwind from dozens of wildfires throughout the Northwest U.S., augmented by several local fires. There was no denial of global warming in my earshot; several Northwest cities have endured their hottest summer on record, and Kalispell, the nearest major town to Glacier, has suffered through its driest summer on record.)

The association reports that fracking wells near Grand Teton National Park increased from about 500 in 2008 to 2,000 by 2012. Unfortunately, perhaps not willing to upset its corporate benefactors or fearful of offending conservatives, the association shrinks from demanding an end to such incursions, instead offering liberalism of the weak-tea variety:

“National parks are managed under a precautionary principle designed to err on the conservative side of any potentially negative impacts. The same principle should be applied to fracking activities on lands adjacent to our national parks. At the National Parks Conservation Association, our goal is to prevent an unexamined embrace of an oil and gas extraction method that can have far-reaching consequences for America’s most cherished landscapes. Now is the time to investigate the impacts of fracking on America’s national parks.”

As fracking involves forcing a mixture of water, chemicals and sand into wells to create pressure to crack rocks, and results in polluted water supplies, human health problems, disruptions to agriculture and ruined roads from massive truck traffic — damage that adds up to billions of dollars in costs — more studies really aren’t necessary. Are such costs really worth whatever royalties might be collected?

The Good Nature Travel blog gives these grim results from energy extraction near two Western parks:

“Wyoming’s boom in natural gas and oil development is causing habitat fragmentation and the blocking of the pronghorn migration from the Upper Green River Valley near Grand Teton National Park. Concentrated drilling operations in the Pinedale area south of the park have been linked with regional ozone problems, with pollution levels high enough to cause respiratory problems. In Theodore Roosevelt National Park in North Dakota, oil rigs can be seen from several parts of the park, and natural gas flaring has punctured what was once one of the darkest night skies in the entire national park system.”

No parks, no problem

There is a corporate solution to this problem: Get rid of the national parks! I wish this were only a joke, but a Koch brothers-backed outfit calling itself the Property and Environment Research Center is advocating selling them. Reed Watson, the center’s executive director, argues that “land management agencies [should] turn a profit” by removing restrictions on timber and energy development.

To soft-peddle this extremism, the center calls for the selling off of other federal lands rather then openly advocating selling national parks — an immensely unpopular idea across the political spectrum — but that is where the logic of its extremism points. In a paper the center produced, “How and Why to Privatize Public Lands,” the group makes it intentions clear:

“Four criteria should guide reform efforts: land should be allocated to the highest-valued use; transaction costs should be kept to a minimum; there must be broad participation in the divestiture process; and ‘squatters’ rights’ should be protected. Unfortunately, the land reform proposals on the table today fail to meet some or all of those criteria. Accordingly, we offer a blueprint for auctioning off all public lands over 20 to 40 years.”

Note that it says “all” without qualification. And lest we chalk that up to the energy industry’s disdain for the environment, such ideas are being floated at the state level. In Kentucky, the Republican and Democratic candidates for governor both advocate selling of some of Kentucky’s 49 state parks — this in a state that spends a paltry $83 million on maintaining those parks. In Wisconsin, a private contractor operates the reservation system for state parks, forcing fees there higher than neighboring states. Gannett Wisconsin Media reports that a $9.70 reservation fee is added to regular fees, and of that $9.70, all but $1 goes to the private company.

Perhaps as a concession to the neoliberal times, park advocates often present their arguments in terms of economic benefit rather than making the worthy case that parks are a social benefit and necessary havens for wildlife, and a human responsibility to the environment. We really shouldn’t need any further arguments. Nonetheless, the National Parks Conservation Association argues that every dollar invested in the National Park Service yields nearly 10 dollars in economic activity.

A study published in PLOS Biology goes further. The seven authors of the study, “Walk on the Wild Side: Estimating the Global Magnitude of Visits to Protected Areas,” studied visitor records from more than 500 protected areas in 51 countries to determine the economic benefit of tourism to those areas. The authors conclude that $10 billion was spent maintaining these sites but more than $600 billion in economic activity was generated from them — a ratio of 60 dollars returned for each dollar spent.

Calculating such ratios is in reality more complicated, but the idea that parks generate income for local areas and thus — dare we say it? — are profitable in a broader surface economic calculation is hardly unreasonable. That has its own drawbacks, of course, as such areas are often overwhelmed by heavy traffic and environmental impact, associated costs that don’t appear to have been factored into the above calculations and which would therefore reduce those ratios. But, again, a civilized country ought to preserve wilderness and properly maintain parks as a value unto itself, outside any economic considerations.

That profit-and-loss calculations are made on something as basic to life as parks speaks volumes as to the brutality and mindless instrumentalism of capitalism.

Class war and drinking the Kool-Aid at Dow Jones

We all remember the worst job we ever had. Mine was as a re-write person on the lead financial wire service of Dow Jones in the mid-1990s. But it did give me a chance to see the workings of finance capital up close, and learn that my ideas on how it functioned really were true.

Those two unfortunate years at Dow Jones also gave me a better perspective when Rupert Murdoch swooped in a few years later to buy the company, not so much for its wire services rather for the cachet of owning The Wall Street Journal. An episode that nicely served as a humorous reminder of just what is meant by “integrity” by the idle rich — receiving the highest price.

It was difficult not to suppress a smile as the idle rich, absentee majority owners of the Journal, the Bancroft family, publicly wrestled with their bullet-proof “integrity” in the face of barbarian Murdoch. The newspapers published by Murdoch are distinguished by their mad-dog, mouth-frothing ultra-right diatribes. Not to be confused by the editorial pages of the Journal, distinguished by their mad-dog, mouth-frothing ultra-right diatribes.

There is one difference, and that is that the Journal’s mouth-frothing is done on behalf of Corporate America and is not shy about telling corporate readers what is good for them, such as its bizarre years-long campaign to return the dollar to the gold standard. The paper’s many readers who make a fortune by trading world currencies might beg to differ, but no matter. Murdoch’s papers, however, never challenge their readers’ biases and if those readers want several pages daily of celebrity gossip mixed in with the right-wing propaganda, then that is what the people will get.

You don't want to work here. (Photo by Stefan Schulze)

You don’t want to work here. (Photo by Stefan Schulze)

The Bancroft family’s celebrated “integrity,” arrayed against this hideous assault by a vulgarian, ended resoundingly when Murdoch arranged to sweeten the pot. Selling your integrity for maximum dollar — what could be more like Corporate America? And so the Journal provides us with another sound lesson in capitalist economics. The hidden Achilles heel in all this is that Murdoch paid much more for the Journal’s parent company, Dow Jones, than anybody else would, and that is for a simple reason — Dow Jones was a company remarkable for its inept management.

I know this from my personal experiences there. Just how many wire services Dow Jones actually published was not known, as nobody actually knew when I casually attempted to find out at one point, symptomatic of the place. Two spectacular failings during my two years nicely provide illustration. One of these two was the acquisition of a financial data company, Telerate, which was seen as very well run and profitable. Part of the Dow Jones egoism is that its managers are super-geniuses, and so Dow Jones replaced Telerate’s successful management with its own managers, who ran it into the ground so quickly that Dow Jones sold it seven years later for more than $1 billion less than what was paid for it. Many workers lost their jobs as well.

More adventures in management

A concurrent episode was the short-lived Dow Jones television station in New York City. The city government owned a public television station that the then mayor, Rudolph Giuliani, decided to give away at fire-sale prices. Dow Jones won it, intending to turn it into an all-business news television station, never mind that cable television already carried more than one of these. (One of which, CNBC, was blared continually in the wire service’s workplace; the horrible theme music gave me nightmares for a long time afterward although a female anchor’s on-camera tendencies to nearly break down in tears when a company’s profits went down and almost reach orgasm when profits went up did provide comic relief.)

Dow Jones management, however, wasn’t prepared for its new toy, and so upon taking over the television station, at first aired nothing but videotapes of “classic” sports games from 10 and 20 years earlier. Dow Jones hired television personnel from around the country; new hires sold their houses and moved thousands of miles to work in the new venture. Once started, it lasted four months before Dow Jones announced it was selling the station, putting all those new hires, who had so disrupted their lives, into the street. The magic of the market at work!

Episodes like this led to one of the Bancroft heirs, a thoroughly spoiled rich kid, to complain in public that her inheritance, worth tens of millions of dollars, might decline in value because the Dow Jones stock price was stuck in mud despite the 1990s stock-market bubble that was then in progress. This development, in turn, prompted that most unusual of actions at Dow Jones — a member of upper management would deign to talk to the lowly workers! Surely this was a sign of crisis.

One afternoon, we were pulled from our usual duty toiling on the electronic sweatshop to hear a pep talk in the cafeteria from none other than Chairman and Chief Executive Peter Kann. Kann would have needed an injection of personality to qualify as an empty suit, but in his own way is a sad story. Kann, at one time, was a reporter for the Journal famous for covering a war between Pakistan and India, during which he defied an order by his editor to leave the area by falsely saying there was too much static on the line for him to understand what the editor had just told him.

For him they feel sorry?

That Peter Kann was long gone. Dow Jones was distinguished by its remarkable rigidity — only those who fit an extremely narrow mold and are willing to drink the Kool-Aid if so ordered take so much as one step on the career ladder, never mind ascend to the executive ranks. And that’s in addition to the political lock-step required to survive the place. The sweatshop floor workers assembled, Kann preceded to deliver a rambling speech full of business cliches about the glorious future, but lacking any discussion of the company’s turmoil, the very reason for this unusual pep talk, as even the right-wing yuppie zombies, Dow Jones true believers who comprised most of the wire service’s workforce, understood.

None had the courage to ask a question on the topic, as I expected. It was up to me to say something — I was the shop steward for the union, disliked by management, and already trying to escape the place by becoming a freelance editor, so I had nothing to lose. Besides, I knew that most of my co-workers would be quietly counting on me to say something — virtually all conformed to the Dow Jones corporate culture of snapping your heels and running, not walking, to carry out your assignment, never allowing the slightest doubt to enter your innermost thoughts.

When Kann’s assistant asked for questions, I asked Kann what the company’s plan for stability was in light of the recent problems it had been having. I didn’t explicitly detail the serious gaffes Dow Jones had committed, but he and everyone in the room knew to what I was referring. To my genuine amazement, Kann, after a long pause, proceed to give a disjointed answer that touched on none of the issues; he was obviously seriously rattled, unable to speak coherently. After perhaps a minute of this, Kann’s assistant gently interrupted, deftly took the microphone and thanked all of us for attending, ending the meeting.

The odd coda to this was that some of the Dow Jones true believers then felt sorry for Kann, because there was pressure by shareholders to push him out of his posts due to the mismanagement. “Aw, he’ll be out soon, anyway,” one told me, genuinely feeling sorry for the dear leader. The joke was on the workforce, however, as Kann lasted another decade as head of Dow Jones, leaving it to Murdoch to satisfy his ego by overpaying for the company. The idle rich had already prospered because tens of millions of dollars per year had been funneled to them via family-only dividends and now they would cash out, by still doing nothing. Many jobs will be lost to pay for those payoffs.

A wonderful lesson in capitalist economics, and, see, there is nothing to fear from Murdoch when it comes to capitalist ethics. See you on the yacht, darling.