Remembering the Marikana massacre on the third anniversary

Activists gathered across South Africa, and in London, New York and Oakland, to commemorate the third anniversary of the Marikana massacre, the deadliest South African massacre since Soweto.

A deadly massacre under an African National Congress government. And not the only shooting of workers, merely the worst under the harsh neoliberal assault overseen by the ANC.

South Africa’s apartheid system was overthrown in a negotiated process forced by a massive international popular movement backing the ANC, but the party has turned its back on popular forces. (This and the next two paragraphs based in part on The Shock Doctrine: The Rise of Disaster Capitalism by Naomi Klein.) During the long years of struggle by the ANC and pitiless repression by the National Party, the apartheid-era rulers in South Africa, the guiding document of the ANC was its “Freedom Charter.” The charter, adopted after democratic consultations in 1955, calls for the right to work; to decent housing; freedom of thought; nationalization of mines, banks and “monopoly industry”; and land distribution so that all South Africans can share in the wealth of their country.

Marikana DayAlthough the ANC had the moral authority to carry out its program, its negotiators tragically (and unwittingly) gave up all economic control, forfeiting their ability to carry out any aspect of their program, with the result that, two decades later, the economy is firmly in the hands of its numerically minuscule White business elite (which is tied to international markets). The country’s eyes were on the political talks between Nelson Mandela and F.W. de Klerk, in which the ANC decisively was the victor against the National Party’s attempts to dilute its loss of government control.

But in the parallel economic talks, which drew little attention, the ANC gave away everything. The central bank would be independent of government (as financiers demanded), National Party government finance officials would remain in office and the ANC government would sign on to everything demanded by the World Bank, the International Monetary Fund and all international trade agreements. Having done so, the ANC took office handcuffed, and having tied themselves to financial markets, those markets applied further discipline by attacking the South African economy at the first sign of anything that displeased them. From pleasing markets and giving financiers repeated assurances, it proved a short path to President Mandela’s successor, Thabo Mbeki, imposing austerity — a 180-degree turn from the Freedom Charter.

Workers face attacks by management and unions

Mining is a critical component of the South African economy, and the foreign multi-national corporations that own South Africa’s mines mistreat local workers with impunity. (This and the next paragraphs are based on Southern Insurgency: The Coming of the Global Working Class by Immanuel Ness.) Workers are often housed in substandard housing that lacks water and electricity, and an increasing number of miners are hired as contingent workers. Not only do mine workers not receive support from the National Union of Mineworkers, the NUM actively joins with managements in oppressing its rank and file.

Nor do they receive support from the country’s largest labor federation, the Congress of South African Trade Unions (COSATU) — in February 2012, NUM and COSATU declared a strike by mineworkers illegal and actually took a harder line against the workers than the mine owner did! Mineworkers continued to bypass the union, or organize through an independent grassroots organization, Amcu, as mineworkers pressed to raise their monthly minimum wage from about US$400 to US$1,150. Two workers were shot by snipers on August 11, and the next day, fearful of returning to the mine, workers gathered on a nearby hill.

The management of the company that owned the mine, Lonmin PLC, called in the police. Lonmin sought to have the strike declared illegal and demanded workers surrender the crude weapons that had fashioned to defend themselves. NUM drove a vehicle equipped with a loudspeaker through the nearby settlements, declaring the strike illegal. Workers gathered on the hill again the morning of August 16 and were encircled by armed police. At 4 p.m., police opened fire, killing 16 workers as television cameras recorded and another 18 were executed off camera after fleeing the initial killings. Another 78 were injured.

An investigation headed by Judge Ian Farlam, appointed by President Jacob Zuma, found that police anticipated the killings hours earlier. Professor Ness, in Southern Insurgency (to be published by Pluto Books in October) provided this summary of the preparation:

“On the morning of August 16, more than eight hours in advance of the police shootings, aware the dozens of workers might be killed in a police assault, Colonels Klassen and Madoda of the [South African Police Service] ordered four mortuary vehicles to the scene from the health department, each with a capacity to carry eight bodies. The report also implicated senior government officials, including ANC and former NUM general secretary Cyril Ramaphosa, a shareholder and director of Lonmin as the events leading up to the Marikana massacre were unfolding. … [A]n email from Ramaphosa to Albert Jamieson, Lonmin’s chief commercial officer, written one day before the massacre and concluding the strike was not a labor dispute but a ‘criminal’ action that required ‘concomitant action.’: ‘The terrible events that have unfolded cannot be described as a labour dispute. They pare plainly dastardly criminal and must be characterised as such. There needs to be concomitant action to address this situation.’ ”

Nonetheless, the commission pinned the blame for the massacre on the workers:

“[T]he tragic events that occurred during the period 12 to 16 August 2012 originated from the decision and conduct of the strikers in embarking on an unprotected strike and in enforcing the strike by violence and intimidation, using dangerous weapons for the purpose.”

Pushing back against government whitewash

The Marikana Support Committee, in rejecting that conclusion, declares:

“This statement is offered as a fact that we have to accept. But it is an opinion. There is no evidence to back it up. The Marikana Support Campaign considers this finding as a gross defamation of the miners. At the same time, despite a run of evidence to the contrary, Farlam and his Commissioners exonerate Ramaphosa and other government ministers. Lonmin is substantially exonerated.”

The Support Committee is calling for a new probe, “a civil society-led inquiry based on the evidence.”

The National Union of Metalworkers of South African (NUMSA), a union expelled from the COSATU trade-union federation after challenging the federation to break with the ANC and the ANC’s neoliberal policies, also sided with the mineworkers. In a statement issued for the third anniversary of the Marikana massacre, the metalworkers union said:

“The Marikana Massacre in 2012 signified the degeneration of our country into a Police State, as evidenced by the continued usage of police and excessive force to undermine popular dissent from below. … The mining industry, like many other key sectors of our economy for many years have been heavily dependent on Black and African working class cheap labour, for its profit maximisation and wealth accumulation strategy. … It is our view that the Marikana Report that was released to the public by President Jacob Zuma was a spit on the face of Marikana’s widows and victims’ families, since it was a whitewash and was intended to make the fast fading ANC-government look caring in the eyes of the working class.”

After two decades of ANC governance, South Africa is the most unequal country on Earth. The country’s gini co-efficient, the most common measure of inequality, was the world’s highest at 0.65 in 2011, according to World Bank statistics, and that the number has not likely improved since. About 57 percent of South Africans live in poverty, and unemployment is 26.4 percent at the same time that only 80 percent of industrial capacity is being utilized.

It is not only divisions along racial, national and gender lines that divide us and block necessary solidarity, it is also the North-South division. An injury to one is an injury to all, regardless of where.

High-tech exploitation is still exploitation

In the so-called “sharing economy,” it isn’t the profits that are being shared. What is being shared are ways of putting old models of weakening labor protections in new “high tech” wrapping.

“Sharing economy” enterprises designating employees as “independent contractors” so that workers are left without legal protections, and undercutting competition through insisting that laws and regulations don’t apply to them, really aren’t new or “innovative.” But it’s Silicon Valley companies that are doing this — so, hurray!, it’s now exciting and, oh yes, disruptive! Quaint, archaic standards such as minimum wages and labor- and consumer-law protections are so old-fashioned that Silicon Valley billionaires are doing us all a favor by disrupting our ability to keep them.

That “sharing economy” enterprises are focal points of a new technology-stock bubble is another reason to question the hype surrounding them. While waiting for the right moment for an initial public offering, the poster child for the “sharing economy,” Uber Technologies Inc., has had no trouble attracting investors, and is now valued at US$51 billion. Not bad for a company that claims to be nothing but an app — except for when it claims to be hiring drivers when its interests dictate. (More on that below.) To put that valuation in perspective, it is higher than 80 percent of S&P 500 companies — an index selected from among the largest companies listed on U.S. stock exchanges. This for a company founded in 2009.

"Nothing is nothing" photo by Darwin Bell, San Francisco

“Nothing is nothing” photo by Darwin Bell, San Francisco

How Uber’s valuation matches up with its income is impossible to say as the company does not reveal its financial results. A report in TechCrunch says that Uber may be pulling in more than $1 billion in gross receipts per year, and estimates Uber’s cut of that revenue to be about $213 million. (Uber takes a 20 percent cut from its drivers, but some drivers say it takes an additional cut for “fees”) Between its revenue and the $5 billion in funding it has received, the company could afford to hire its drivers as employees, but instead spends its money on attack advertising.

The company launched a multi-media fusillade of attack ads last month when New York City Mayor Bill de Blasio dared suggest regulations observed by others might apply to it, including a bombardment of television ads and robo-calls. (I received two. They didn’t work.) True to form, Mayor de Blasio, the Obama of New York City who is carrying out former billionaire Mayor Michael Bloomberg’s fourth term, backed down.

Uber vehemently opposed a proposed one-year cap of one percent growth in its drivers (which would have applied to all companies) despite already having more registered cars than all of the city’s yellow-cab companies combined, and in contrast to the hard cap that exists on the number of yellow-cab permits. When not attacking the mayor, Uber’s attacks were concentrated on yellow-cab companies and drivers.

Driving down wages for low-wage taxi drivers

Who are the taxi drivers whom Uber wishes you to believe are privileged and should be subjected to more competition? A New York City yellow cab driver pays the company that owns the cab $100 or more at the start of a 12-hour shift, pays for gas and is subject to consumer regulations. The driver spends the first hours of his or her shift covering these daily expenses. The New York Taxi Workers Alliance summarizes the situation for taxi drivers this way:

“Drivers are earning less and working longer, some days earning below the minimum wage. Right now, after 12-hour shifts, with no overtime pay, taxi drivers make $10-12 an hour in take home pay. More traffic and more cars competing for the same fares will drive incomes deeper into poverty levels. … In its ‘disruption’ playbook, meanwhile, Uber tells drivers to pick up illegally as a way to overwhelm local enforcement and break down regulators, and promises to pay the fines. Drivers desperate for work risk time in jail and for immigrants, loss of naturalized citizenship, while brand Uber claims innovation. Drivers are used and discarded. …

Uber seeks to decimate the regulated taxi industry and replace it with a transportation monopoly of no consumer protections and no full-time work for drivers. For Uber, drivers aren’t just Independent Contractors, they, quite frankly, are not workers at all. Why tip, or require commercial insurance or registration, or comply under federal or state transportation or labor laws when this is ‘just a side thing.’ Low Uber fares — when they are not price surging — are aimed at out-competing taxis and justified by calling the income supplemental. Taxis aren’t the only target, as they also aim their sights on dismantling public transportation, by proclaiming to be cheaper than buses in Chicago and LA and faster than an ambulance. If they gain a monopoly, the purpose of low fares will have been served and price surging will be the norm.”

The “disruption” or “innovation” that this promises is the Wal-Martization of transportation. In fact, the corporate law firm that Wal-Mart Stores Inc. used to successfully defeat a discrimination class action (Wal-Mart v. Dukes) by women employees, Gibson, Dunn & Crutcher, has been hired by Uber to fight its California drivers who say they are improperly classified as independent contractors instead of as employees. Not exactly the defender of working-class drivers Uber claims to be in its propaganda.

A San Francisco federal judge and the California Labor Commission separately ruled earlier this year that Uber drivers are employees, rulings the company continues to contest. But when it was sued for alleged text spamming, Uber claimed the messages were legal because they were hiring solicitations. But how can Uber “recruit” if it is nothing more than a software provider as it claims?

The degradation of working conditions through the “sharing economy” is of course not limited to one company. A provider of home-cleaning services, Homejoy, has closed itself rather than contest lawsuits seeking to have its “independent contractors” be re-classified as employees. Grocery-delivery service Instacart and courier Shyp have reclassified some of their workers as employees in the face of lawsuits.

A lottery economy facilitates inequality

The founders of these companies and the speculators who sink millions into them hope to be the winners in what has become a lottery economy. Only a minuscule percentage of inventions become commercially successful — a director of public affairs for the U.S. Patent & Trademark Office said a decade ago that 99.8 percent of issued patents are not commercially viable. A small number of those commercially viable ideas are worth millions or billions to its creators. This is similar to the art world, where a minuscule number of artists sell works for millions while the overwhelming majority of artists earn little or nothing.

But are the entrepreneurs who win the lottery really worth so much more than everybody else? None of these corporate lottery winners created their successful company on their own. There are engineers who design the product’s physical form, assembly-line workers who assemble the product and advertising agencies that create the demand for the product. Then there is the social structure that enabled the millionaire to become wealthy through an invention or the creation of a popular product or through rising to the top of a large corporation or simply through being a popular entertainer or athlete (although most inherited their money through luck of birth).

The mythology of the solo genius justifies massive inequality because the “solo genius” single-handedly created a popular product and thus single-handedly brought prosperity upon the land. For such selfless services, the solo genius must be compensated with fantastic wealth. But why should Facebook founder Mark Zuckerberg amass $18 billion and so many others get nothing? Why should Apple Inc. accumulate unprecedented wealth while conditions in the sweatshops that produce its gadgets are sufficiently grim to cause a wave of suicides?

Why should those who stand to make gigantic fortunes from whatever “sharing economy” enterprise is the one that wins the lottery make fortunes on the backs of working people struggling to survive?

At the end of the day, what computers and apps do is shift consumer spending from one merchant to another. The rider who uses an Uber black car is substituting that service for a taxi; the shopper who buys online is substituting for a local store. Just as Wal-Mart seeks to monopolize low-end retail, thereby sending money into the bulging wallets of the multi-billionaire Walton family instead of re-circulating the money through local spending, “sharing economy” enterprises are seeking to vacuum up as much money as possible, with speculators salivating over the potential profits.

Billionaire Silicon Valley libertarians are attempting to become wealthier at the expense of working people. That’s not disruption, that’s capitalism as usual.

Speculators circling Puerto Rico latest mode of colonialism

Puerto Rico’s governor may have said the commonwealth’s debt is unpayable, but that doesn’t mean Puerto Ricans aren’t going to pay for it. Vulture capitalists are circling the island, ready to extract still more wealth from the impoverished island.

You already know the drill: Capital is sucked out by corporate interests that pay little in taxes, budget deficits grow and speculators swoop in to take advantage, leaving working people holding the bag. Already, the Puerto Rican government is considering imposing an 11 percent cut to Medicare and Medicaid for 2016 and more than 600 schools may be closed in the next five years on top of the 150 already closed by budget cuts.

To ensure more austerity, a group of hedge funds hired three former International Monetary Fund economists to issue a report on what Puerto Rico should do. And — surprise! — the report, released this week, says to lay off teachers, cut education spending and sell public assets to provide money for hedge funds.

Caribbean National Rain Forest of El Yunque, Puerto Rico (photo by Alessandro Cai)

Caribbean National Rain Forest of El Yunque, Puerto Rico (photo by Alessandro Cai)

The crisis has already been profitable for Wall Street as banks and law firms racked up $1.4 billion in fees from 86 bond deals that raised $62 billion for the island between 2006 and 2013 alone. Because of downgrades in Puerto Rico’s credit rating, Wall Street can demand hundreds of millions more in lending fees, credit-default-swap termination fees and higher interest rates.

What has a century of colonialism — a century of domination by U.S. corporations — wrought? An activist with the island’s Party of the Working People, Rafael Bernabe, puts it in stark terms:

“Puerto Rico’s economy has not grown since 2006. During that period, total employment has fallen by 20 percent or 250,000 jobs. Since 1996 manufacturing employment in particular has fallen by half (from close to 160,000 to less than 80,000). The labor force participation rate has dipped under 40 percent. Through firings and attrition, since 2007 public employment has fallen by 20 percent or 50,000 jobs. Migration has accelerated to levels unseen since the 1950s. …

Not only does mass unemployment result in significant migration, it also depresses wages, which consequently deepens economic inequality and insures high levels of poverty. This helps explain the persistence of the wide gap in living standards between Puerto Rico and the U.S. mainland. Contrary to neoliberal dogma, after more than a century of a colonial experiment in free trade, free mobility of capital, and even the free movement of people between Puerto Rico and the United States, Puerto Rico’s per capita income is a third of the U.S. figure.”

Although the neoliberal clamp has recently tightened on the island, its current subaltern position is many years in the making.

A century of colonialism and the repression that goes with it

Puerto Rico’s tenure as an independent nation lasted exactly eight days in 1898, ending when the United States invaded it during the Spanish-American War. Quickly taking control of the island’s economy, the U.S. response to a hurricane that wiped out the coffee crop in 1899 was not to send aid but instead impose a 40 percent devaluation on Puerto Rico’s monetary holdings. (The source for this and the following two paragraphs is the “historical overview” page of Nelson Denis’ War Against All Puerto Ricans web site, an excellent trove of information.) The devaluation forced Puerto Rican farmers to borrow money from U.S. banks and within a decade, thanks to usurious interest rates, farmers defaulted on their loans, giving the banks possession of their land.

One of those banks was the Riggs National Bank, and a member of the family that owned the banks, E. Francis Riggs, became Puerto Rico’s chief of police. By 1931, Mr. Denis reports, 41 sugar syndicates, 80 percent of which were owned by U.S. corporations, owned essentially all of the island’s farmland. Just four of them controlled half the island’s arable land. When the island’s legislature enacted a minimum-wage law, the U.S. Supreme Court declared it illegal. An island-wide agricultural strike in 1934 was answered by Police Chief Riggs, the member of the banking family, with this response: “There will be war to the death against all Puerto Ricans.” The following years saw a series of massacres, and mass arrests and torture of independence activists, and a 1948 law criminalized advocacy of independence, with penalties of 10 years in jail and massive fines. Even owning a Puerto Rican flag was made illegal.

In 1976, the tax code was amended so that U.S. companies operating on the island would pay no corporate taxes. For the next 30 years, until 2006, U.S. pharmaceutical companies took advantage of this tax loophole to generate massive profits. Mr. Denis reports that in 2002 the combined profits for the ten drug companies in the Fortune 500 ($35.9 billion) were more than the profits for all the other 490 businesses combined ($33.7 billion).

An independent Puerto Rico could not exploited to such a degree, so repression was particularly aimed at anybody with independence sympathies but especially leaders of the Nationalist Party. In a Democracy Now! commentary in 2010 on the 60th anniversary of the Jayuya independence uprising, Juan Gonzalez said:

“Between a thousand, two thousand people were arrested. Anybody who had any kind of political leanings toward independence or was seen as a leader was thrown into jail. And for years afterwards, it was impossible for supporters of independence to get jobs in the government. It really was an enormous repression and crackdown that occurred in the years following.”

One legacy of these decades of repression is the electoral silencing of independence advocates. Voting on the island tends to split evenly between the parties of statehood and continued commonwealth status. Mr. Bernabe wrote:

“The vote for the Partido Independentista Puertorriqueño (the Puerto Rican Independence Party or PIP) was less than 3 percent in the 2008 and 2012 elections. Independentistas, of course, have a far more significant presence and often play a leading role in labor, environmental, student, and other struggles. Many vote for the [pro-commonwealth Popular Democratic Party] in accordance with the same ‘lesser-evil’ logic that leads many U.S. progressives into the orbit of the Democratic Party.”

Education, health care cuts so hedge funds get paid

Having profited on the backs of Puerto Ricans, can Wall Street really be the solution to the island’s massive $73 billion debt? Common sense says no, but the island’s political leaders believe otherwise. Lest there be any lingering doubt about what the vulture capitalists circling their next target have in mind, a group of them issued a report this week, “For Puerto Rico, There is a Better Way,” that complains Puerto Rico spends too much money on education, even though the island spends about 80 percent of the U.S. average on a per-student basis.

The report’s three authors each had long careers with the International Monetary Fund, and they have not strayed from the IMF’s usual “one size fits all” austerity model. Although there are a couple of reasonable suggestions in the report — most notably, increasing the island’s low tax-compliance rate — it calls for much sacrifice by working people and none by hedge-fund billionaires. Among other recommendations, it calls for an increase in the sales tax, a flat income tax (always a benefit for the richest), cuts to education and Medicaid, and loosening labor laws that protect pay and vacation.

Hedge funds that own a significant part of the island’s debt have had a series of meetings with officials. But just who these hedge funds are can be difficult to ascertain. Puerto Rico’s Center for Investigative Journalism reports it received “runarounds and silence” from several government officials when it requested a list of those who hold the debt and what conditions bondholders are seeking. But the Center has been able to put together what it calls “the most complete list of the companies that are getting ready to renegotiate or demand complete payment of the debt.”

Several of the hedge funds seeking payment have also held bonds issued by Argentina, Greece and the city of Detroit. Three of them — Aurelius Capital Management, Monarch Alternative Capital and Canyon Capital — have held bonds for all three plus Puerto Rico.

Aurelius is a notorious speculator that joined with vulture-capitalist Paul Singer to demand Argentina pay full face value on bonds bought at tiny fractions of that price. Aurelius is seeking a 1,600 percent profit on its Argentine bonds, regardless of the cost to others. The principal of Aurelius, Mark Brodsky, was previously involved in squeezing the Republic of Congo-Brazzaville, an episode in which $400 million was demanded on bonds bought for less than $10 million from a country where children die from malnutrition.

Another on the list is John Paulson, who has been busy buying up luxury properties, including spending $260 million to buy three resorts. Another billionaire, Nicholas Prouty, has invested more than $550 million so that San Juan’s marina can accommodate yachts larger than 200 feet.

Power-company ratepayers expected to pay for profits, too

In line with those speculators, a group of hedge funds that own Puerto Rico Power Authority bonds (a debt separate from the general-obligation government bonds discussed above) propose a plan that would pay bondholders 33 percent less than face value. That sounds like an offer to accept a “haircut,” to use the financial term, but those bonds are currently trading at about half of face value, so the hedge funders would be guaranteeing themselves a profit. The plan would also impose a surcharge on the power authority’s customers, so they would be paying more for electricity to guarantee hedge-fund profits.

Whether buying bonds or real estate, it is profits hedge-fund billionaires are after. Puerto Rican bonds are tax-exempt, one reason for their popularity. Extracting wealth from the island is not new, however. Mr. Bernabe of the Party of Working People, in his commentary, noted the imbalance between profits and what’s available for the common good:

“[T]wo dozen U.S. corporations extract around $35 billion a year in profits from or through their operations in Puerto Rico. Bear in mind that the total income of the government of Puerto Rico is around $9 billion. U.S. corporations benefit from the tax-exemption measures that have been the centerpiece of the government’s development policy since 1947.”

Puerto Rico is due to make $5.15 billion in debt payments in its 2016 fiscal year, which began on July 1, a total that represents more than half of its $9.8 billion budget. Given the previous experiences of Argentina and Detroit, the future does not look rosy for the working people of Puerto Rico.

It is not difficult to notice that, although it is always time for us to cut back, it is never time for financiers to cut back. The financial industry, in contrast to the mythology it loves to peddle, does not create wealth — it confiscates wealth, attempting to profit off every aspect of human activity. Attention is now focused on hedge funds’ manipulation of debt, and although that is a necessary focus, these circling vultures represent only the latest manifestation of a long history of colonialism.

Fear takes root in Syriza

Fear is a powerful human emotion. Fear of the unknown surely played a significant part in Syriza’s humiliating climbdown and surrender of what national sovereignty had remained to Greece.

Fear is a powerful emotion if consenting to become a colony, agreeing to sell off your country and further immiserating millions is a preferable option to taking back your independence.

Perhaps the signal that was not given due consideration was Prime Minister Alexis Tsipras’ statement on July 10 that “we have no mandate to leave the euro.” The Syriza-led government also had no mandate for the continuation, much less the intensification, of austerity. Five and a half months into an administration that could have been used to prepare Greece for a different path instead marked time in futile negotiations, allowing the country’s economic crisis to develop to the point where the troika could dictate any terms it wanted.

And make no mistake: There is glee in corporate boardrooms, trading floors, banks and the government ministries that serve them that a Leftist government has committed itself to the harshest austerity terms.

Fira at Santorini Island, Greece (photo by Yoo Chung)

Fira at Santorini Island, Greece (photo by Yoo Chung)

A good example of this comes from the late 1990s, when dissident Kim Dae-jong won election as president of South Korea as the first candidate of the Left to win office, only to immediately impose an austerity program imposed by the International Monetary Fund. President Kim’s candidacy had been opposed by the U.S. government, which had supported a series of military dictators, but likely was pleased in the end that he won since it demoralized his supporters and provided a priceless propaganda prop for the idea that there is no alternative to neoliberalism.

Although the agreement imposed on Greece by the troika — the European Central Bank, the European Commission and the International Monetary Fund — is indeed a coup, as the instantly popular Twitter hashtag proclaims, it shouldn’t be looked at simplistically as a German diktat. That is not because smaller countries like Finland and Slovakia aligned themselves with Germany in the manner of schoolyard kids standing next to the playground bully so as to not be the next target, but because the German government is acting as the European enforcement wing of international capital.

The upside down world of money over people

It is a neoliberal world indeed when entire countries are bled dry to safeguard bankers’ profits and doing so is presented as the highest moral duty. The human face might have been German Finance Minister Wolfgang Schäuble in the role of Dr. Evil, but the minister is no more than a physical embodiment of powerful social and economic forces. Forces of human creation but not necessarily in human control.

So let us not over-simplify and place all blame at the feet of Syriza by declaring the party “opportunists” or whatever word of opprobrium one wishes. Nor should there be illusions that walking away from the euro, canceling the debt and the resulting cutoff from financial markets would be an easy road to take, even if, in the long term, it is the road that should have been traveled. Socialism in one country is not possible in one small country. Socialism in a single big country would be extremely difficult, if the entire might of the capitalist world were arrayed against it.

There are no Greek solutions for Greece, there are only European or international solutions.

Nonetheless, somebody has to go first. Finding allies is indispensable for any Greek turn from the eurozone to have a chance at success. It does not appear that Syriza looked beyond the European Union for allies. In an interview with the New Statesman, former Greek Finance Minister Yanis Varoufakis, when asked if the government attempted to work with the governments of other indebted eurozone countries, gave this answer:

“The answer is no, and the reason is very simple: from the very beginning those particular countries made it abundantly clear that they were the most energetic enemies of our government, from the very beginning. And the reason of course was their greatest nightmare was our success: were we to succeed in negotiating a better deal for Greece, that would of course obliterate them politically, they would have to answer to their own people why they didn’t negotiate like we were doing.”

Fear of offending the more powerful and internalizing the “moral” hectoring they deliver at every opportunity. Guaranteeing bank profits is somehow more “moral” than the health and well-being of entire countries. Social Democrats have absorbed this ideology as thoroughly as conservatives.

In the same interview, Mr. Varoufakis, recounting that his counterparts, the other eurozone financial ministers, refused to negotiate or even engage intellectually with him from the start, was asked why the government kept talking until the summer. His reply:

“Well one doesn’t have an alternative. Our government was elected with a mandate to negotiate. So our first mandate was to create the space and time to have a negotiation and reach another agreement. That was our mandate — our mandate was to negotiate, it was not to come to blows with our creditors. … The negotiations took ages, because the other side was refusing to negotiate. They insisted on a ‘comprehensive agreement,’ which meant they wanted to talk about everything. My interpretation is that when you want to talk about everything, you don’t want to talk about anything. But we went along with that.”

Eurozone membership or an end to austerity

Yes, Syriza was elected with a mandate to negotiate; that follows from Greek majority popular opinion that the country should remain within the eurozone. But there was also a mandate that austerity be brought to an end. Syriza proved unable to resolve this contradiction: Greece can end austerity or be in the eurozone, but not both at the same time.

What we do make of Prime Minister Tsipras declaration, “An end of the blackmail,” issued in late June at the time of his decision to call a referendum on austerity. In his statement, referencing the troika negotiators, he said:

“They asked the Greek government to accept a proposal that accumulates a new unsustainable burden on the Greek people and undermines the recovery of the Greek economy and society, a proposal that not only perpetuates the state of uncertainty but accentuates social inequalities even more.”

The vote went ahead, against direct orders by European governments, and Greeks voted 61 percent to 39 against the terms offered. A week later, the Tsipras government agreed to terms that were worse — the harshest austerity yet imposed. So much for democracy. And make no mistake, this deal is consistent with the “structural adjustment” that the IMF has imposed across the global South.

Prime Minister Tsipras’ final set of concessions in exchange for a fresh bailout was an undiluted structural adjustment. Included in the Greek “reform” package were:

  • Allowing greater wage inequality and a fall in wages as a percentage of gross domestic product through 2019.
  • Raising the pension age to 67 and increasing the health care contribution of pensioners by 50 percent.
  • Gutting labor laws through a “review [of] the whole range of existing labour market arrangements, taking into account best practices elsewhere in Europe.” In other words, loosening worker protections.
  • An “irreversible” privatization of the electricity provider.
  • Privatization of the country’s ports, airports and much else.

The nearly immediate answer was “No, still not enough.”

The prime minister said the popular referendum would strength his negotiating hand. So in the end, what concession did he extract? The fund that will supervise the fire sale of Greek assets, in which the rules will be set by the troika, will be managed from Greece instead of the tax haven Luxembourg.

Hurray.

The Greek government has committed itself to sell off state assets worth €50 billion, with half the total to be used to recapitalize Greek banks and the half to pay down Greek debts. Not one euro toward social welfare!

Resistance continues

Although the government appears to have the approval of Greece’s corporate parties, including New Democracy and Pasok, it does not have the support of all of Syriza. The latter’s Left Platform calls for a “radical reform” of the banking system, the complete halt of austerity policies, an exit from the euro and a writedown of most of Greece’s debt. Outside of Syriza, Antarsya calls for the nationalization of the banks and an exit from the eurozone. A general strike has been called for July 15. And there is no shortage of ideas on alternatives to austerity.

The online news site Greek Reporter summarizes the Left Platform’s expectations of the benefits should its program be adopted:

“An exit from the Eurozone would generate further benefits according to the proposal. Namely, the restoration of financial liquidity, a sustainable growth program based on private investment, the rebuilding of the internal economy to reduce dependence on imports, an increase in exports, independence from the European Central Bank, its policies and restrictions and finally the utilization of unused resources to create rapid growth so as to protect against the first difficult months following the Grexit. The document also concedes that an exit from the Eurozone should have been prepared by SYRIZA but was not.”

Instead, the prime minister says he is choosing a bad choice over a catastrophic choice. Those are the only two choices that the European Union, a project in which rule by finance replaces democracy, can offer.

As assuredly as with nature, politics hates a vacuum. If the Left is not going to offer an alternative to the tightening hegemony of the most powerful industrialists and financiers — the “market” is nothing more than their interests — then the gates to the authoritarian Right, even fascism, are thrown wide open. In a separate interview, Mr. Varoufakis gave this warning:

“In parliament I have to sit looking at the right hand side of the auditorium, where 10 Nazis sit, representing Golden Dawn. If our party, Syriza, that has cultivated so much hope in Greece … if we betray this hope and bow our heads to this new form of postmodern occupation, then I cannot see any other possible outcome than the further strengthening of Golden Dawn. They will inherit the mantle of the anti-austerity drive, tragically. The project of a European democracy, of a united European democratic union, has just suffered a major catastrophe.”

Europe’s capitalists, who established the European Union as a mechanism to tighten their control over the continent and force U.S.-style policies on their societies beyond popular control, won’t be ruffled by that conclusion. But will the world’s working people be?

Class warfare through stock markets

Income re-distribution is always in the eye of the beholder, but never seen as such by those for whom more is never enough. The insatiable greed of financiers has reached the point where large corporations are now spending almost all profits on stock buybacks and dividends. And, despite that largesse, those companies are sitting on trillions of dollars in cash.

All this at the same time that wages are stagnant and living expenses are rising. These developments, of course, are not independent of one another.

Stock buybacks and dividends are one form of ongoing class warfare, in which income flows upward. The corporations comprising the Standard & Poor’s 500 Index alone spent US$914 billion on buybacks and dividends in 2014, and they are on course to spend more than $1 trillion in 2015. That $1 trillion will be nearly equal to all of the operating earnings produced by S&P 500 companies.

New York Stock Exchange (photo by Elisa Rolle)

New York Stock Exchange (photo by Elisa Rolle)

Stock buybacks are also becoming more common in Europe. European firms bought back more than US$2 trillion in stock from 2009 and 2014, according to Reuters, and European firms are sitting on $1.5 trillion (€1.37 trillion) in cash.

As aggregate profits have increased, so have the payouts to financiers. Bloomberg reports that payouts by U.S. companies are outpacing income:

“Excluding the recession years 2001 and 2008, dividends and stock buybacks have represented, on average, 85 percent of corporate earnings since 1998. … Stock repurchases worth almost $2 trillion have helped buoy the bull market since March 2009. … Even as sales were stuck at an average growth rate of 2.6 percent a quarter in the past two years, per-share earnings expanded more than twice as fast, 6.1 percent, data compiled by Bloomberg show.”

Starving investment for short-term gains

To pay for that acceleration of money flowing to financiers, spending on investment is declining, The Wall Street Journal notes. In an analysis of these trends, the Journal reports:

“[C]ompanies in the S&P 500 index sharply increased their spending on dividends and buybacks to a median 36% of operating cash flow in 2013, from 18% in 2003. Over that same decade, those companies cut spending on plants and equipment to 29% of operating cash flow, from 33% in 2003. At S&P 500 companies targeted by activists, the spending cuts were more dramatic. Targeted companies reduced capital expenditures in the five years after activists bought their shares to 29% of operating cash flow, from 42% the year before.”

Let’s unpack that paragraph. What the Journal is reporting is that Wall Street is applying pressure to corporate managements to hand over income to it, and those corporations who are particularly targeted are even more compliant than the average. The “activists” who are referenced aren’t activists in any customary sense. In ordinary language, an activist is someone who advocates and organizes for social advancement. But in the looking-glass language of the corporate world, an “activist” is a shareholder who has bought stock in a company for the purpose of demanding the maximum possible short-term profit, regardless of cost to others or even to the company itself.

Wall Street, and the financial industry in general, is both a whip and a parasite in relation to productive capital (producers and merchants of tangible goods and services). The financial industry is a “whip” because its institutions (stock, bond and currency-exchange markets and the firms that trade those and other instruments on those markets) bid up or drive down prices, and do so strictly according to their own interests. The financial industry is also a “parasite” because its ownership of stocks, bonds and other instruments entitles it to skim off massive amounts of money as its share of the profits. People in the financial industry don’t make tangible products; they trade, buy and sell stocks, bonds, derivatives and other securities, continually inventing new instruments to profit off virtually every aspect of commercial activity.

“Shareholder activists” are ultra-rich speculators who are particularly aggressive in demanding that profits be handed over to them. Financiers and industrialists fight over the money that workers produce — profits ultimately derive from the capitalist paying the employee much less than the value of what the employee produces — but they agree they should have all of it.

So although you and your co-workers make the pie, you don’t get anything more than crumbs. And there are a lot of pies out there.

Piles of cash, here, there and everywhere

Not all of those pies are siphoned into financiers’ bottomless pockets. The St. Louis branch of the Federal Reserve estimates that, in 2011, U.S. corporations were sitting on almost $5 trillion of cash, a hoard that had been increasing by 10 percent a year. No more recent estimates exist, but it is likely that total has increased. And much of that hoard is kept out of reach — as of early 2015, an estimated $2.1 trillion in cash was being held overseas by U.S. corporations.

That money is kept overseas for one reason, to avoid paying taxes. U.S. elites are encouraged to do this because U.S. tax law allows profits and income to be shifted offshore, where they remain untaxed. Profits booked in other countries are instead subject to the local tax rate, even if zero. Such financial engineering is simply another manifestation of “capitalist innovation.”

Sometimes it is suggested that a “tax holiday” be granted. That is, let multi-national corporations bring their money home tax-free and that hoard will be magically put to work. But such has not been in the case in the past. An analysis by research firm Capital Economics of a 2004 tax holiday found that 95 percent of the cash brought back home went to stock buybacks and dividends. Nor were any jobs created. An NBC News report said:

“A Democratic congressional report indicated that the biggest companies receiving the benefits of $360 billion in repatriated funds actually cut a net 20,000 jobs, and that the holiday cost Treasury coffers $3.3 billion. ‘This is supported by the results of a 2009 study by the (National Bureau of Economic Research), which found that every $1 that was repatriated during the tax holiday resulted in an increase of almost $1 in shareholder payouts,’ the Capital note said. ‘Around $0.80 went towards share buybacks and $0.15 to dividend payments.’ ”

Total after-tax profits of U.S. corporations, as compiled by the St. Louis Federal Reserve, totaled $7.3 trillion in 2014 — the highest ever recorded. Adjusted for inflation, that is nearly triple the aggregate profits of 2001.

So when we are continually told we must cut back because there is no money, it isn’t true.

Big raises if money were directed to employees

Let’s take Wal-Mart as an example. Wal-Mart has averaged $16 billion in annual profits during the past five years, helping make the Waltons the richest family in the world while Wal-Mart workers are forced to rely on food stamps, other social-welfare programs and charity. The Walton family owns about 50 percent of Wal-Mart’s stock, and thus haul in billions of dollars a year just from dividends. Additional billions are spent on stock buybacks, which benefits stockholders (especially the Walton family) because the profits are spread among fewer people.

What if, instead, those billions of dollars were directed to Wal-Mart employees so that they could at least be closer to a living wage? The public policy organization Demos makes this suggestion:

“We find that if Walmart redirected the $7.6 billion it spends annually on repurchases of its own company stock, these funds could be used to give Walmart’s low-paid workers a raise of $5.83 an hour, more than enough to ensure that all Walmart workers are paid a wage equivalent to at least $25,000 a year for full-time work. Curtailing share buybacks would not harm the company’s retail competitiveness or raise prices for consumers.”

Ah, but “competitiveness” is not the issue; rather it is shoveling as much money as possible into the pockets of the Walton family, other major shareholders and the top executives. Money that is extracted from Wal-Mart’s employees through low wages and benefits, augmented by the massive public subsidies the company extracts.

Earlier this year, General Motors announced it would spend $5 billion on stock buybacks, in an attempt to boost its stock price. PBS NewsHour summarized that development this way:

“To make those purchases, GM is reducing its cash reserves from $25 billion to $20 billion. (Recall that you, the taxpayer, helped prop up GM’s cash reserves with a $49.5 billion bailout in 2009.) The stock buyback, combined with higher dividends, is expected to result in $10 billion for shareholders through 2016. It’s a grand time to be holding GM stock. And a bad time to have been behind the wheel of one of the thousands of defective vehicles for which GM is currently under investigation by the Department of Justice.”

And what of the cost of those defective vehicles to General Motors? The company set aside $400 million — less than one-tenth of what it is spending to buy back stock — as compensation for serious injuries or deaths resulting from recalled automobiles. Not all that money will necessarily be paid; Kenneth Feinberg, the administration of the compensation fund, has ruled three-quarters of claimants ineligible.

These trends go hand in hand with the sharply increasing inequality that has seen incomes at the top skyrocket while most people’s wages stagnate or decline.

This is what plutocracy looks like: The vast majority work hard so that a minuscule layer at the top of the pyramid can earn fabulous wealth, more than they can spend or invest. This also fuels speculation because there aren’t enough investment opportunities for the massive amounts of wealth accumulated, so excess money goes into speculation instead. Stock buybacks are one more method for funneling money to speculators — profits are divided among fewer people and those who do sell their shares are paid a premium above the trading price.

In an economic democracy, the people who do the work would be the ones who earn the rewards. Our current economic plutocracy is far removed from that ideal.

TPP promises health care for profits, not patients

Health care will take a large step toward becoming a privilege for those who can afford it rather than a human right under the Trans-Pacific Partnership. Government programs to hold down the cost of medications are targeted for elimination in the TPP, which, if adopted, would grant pharmaceutical companies new powers over health care.

This has implications around the globe, as such rules could become precedents for the Transatlantic Trade and Investment Partnership and Trade In Services Agreement, two other deals being negotiated in secret.

The U.S. Congress’ difficulties in passing “fast-track” authority has thrown a roadblock in the path of the Trans-Pacific Partnership, but by no means has this most audacious corporate power grab been defeated. The latest leak of TPP text, the annex on pharmaceutical products and medical devices published by WikiLeaks earlier this month, makes clear that the U.S. pharmaceutical industry is taking aim at health care systems that put accessibility above corporate profiteering.

Craters of the Moon Geothermal Area, New Zealand (photo by Pseudopanax)

Craters of the Moon Geothermal Area, New Zealand (photo by Pseudopanax)

People in other countries should be extremely wary of any attempt to make their health care systems more like that of the United States. The U.S. health care system is designed to produce profits for pharmaceutical, insurance and other health care industry corporations, not to provide health care. Because of this, health care in the U.S. is by far the world’s most expensive while delivering mediocre results. How expensive? During the decade of 2001 to 2010, U.S. health care spending was $1.15 trillion higher per year than it would have been otherwise.

As always with the TPP, bland-sounding text written in stilted, bureaucratic language contains more danger than initially meets the eye. New Zealand’s Pharmaceutical Management Agency, which makes thousands of medicines, medical devices and related products available at subsidized costs, is a particular target of TPP and the U.S. pharmaceutical lobby because it is an example that drug companies do not wish to be emulated elsewhere. Agencies of other governments will also be under threat.

U.S. government targets New Zealand subsidies

A “Special 301 Report” issued in April 2015 by the U.S. government under the name of U.S. Trade Representative Michael Froman specifically names no less than 17 countries in which it seeks to undo health-system protections. Taking direct aim at New Zealand, the report said:

“With respect to New Zealand, U.S. industry has expressed serious concerns about the policies and operation of New Zealand’s Pharmaceutical Management Agency (PhARMAC), including, among other things, the lack of transparency, fairness, and predictability of the PhARMAC pricing and reimbursement regime, as well as the negative aspects of the overall climate for innovative medicines in New Zealand.” [page 25]

Note that the wishes of “U.S. industry” are presented as the only possible point of view. This is consistent with the fact that 605 corporate lobbyists have access to the TPP text as “advisers,” while the public is shut out. The real issue is that the New Zealand agency holds down the price of medicines, cutting down the industry’s exorbitant profit-gouging. A 2011 submission to the U.S. government by corporate lobby group Pharmaceutical Research and Manufacturers of America, called the New Zealand agency an “egregious example” because of its “focus on driving down costs.”

Professor Jane Kelsey of New Zealand’s University of Auckland, who has closely followed TPP issues for years, leaves little doubt that New Zealanders will pay more for medications if TPP comes into force. In an analysis of the leaked health care annex text, she writes:

“This leaked text shows the [TPP] will severely erode Pharmac’s ability to continue to deliver affordable medicines and medical devices as it has for the past two decades. That will mean fewer medicines are subsidised, or people will pay more as co-payments, or more of the health budget will go to pay for medicines instead of other activities, or the health budget will have to expand beyond the cap. Whatever the outcome, the big global pharmaceutical companies will win, and the poorest and most vulnerable New Zealanders will lose.” [page 2]

But other countries are in the cross hairs

The Pharmaceutical Management Agency estimates it has created savings of more than NZ$5 billion since 2000. The language of the TPP health care annex specifically targets “national health care programs” that make pricing decisions and not direct government procurement of medicines and medical devices. Professor Kelsey sees a nationalist agenda behind this specific wording, writing:

“ ‘National’ is presumably chosen to preclude such programmes that are run by states and provinces, which are politically sensitive in the US and Canada. In effect, the US has excluded almost all its own programmes, while targeting New Zealand, as it did with the [Australia-U.S. Free Trade Agreement].” [page 3]

But U.S. Medicare and Canadian provincial programs will certainly be targets as well. Medicare is prohibited under U.S. law from from negotiating prescription prices with drug makers, and the same language that would undermine New Zealand’s program would block any attempt to allow Medicare, or any other agency, from instituting a similar pricing program. Per-capita spending on drugs is far higher in the U.S. than elsewhere, in part thanks to this prohibition, which would become irreversible under the TPP.

The advocacy group National Committee to Preserve Social Security and Medicare notes:

“The fact that Medicare is forbidden in the law that created Medicare Part D to negotiate lower prices is no accident. The drug lobby worked hard to ensure Medicare wouldn’t be allowed to cut into the profits which would flow to big Pharma thanks to millions of new customers delivered to them by Part D.”

“Part D” is a program that shifted millions of people from Medicaid, which pays much less for drugs, to Medicare, a boon to pharmaceutical companies.

The TPP health care annex also contains language that the annex’s provisions are exempted from the “investor-state dispute mechanism,” the secret tribunals in which corporate lawyers sit as judges when corporations sue governments under so-called “free trade” agreements. The annex’s text is misleading, however. Language elsewhere in the TPP that requires “fair and equitable treatment” of foreign “investors” would still enable challenges to New Zealand’s program or any other. Thus, governments could be sued using provisions other than the annex, Professor Kelsey writes:

“The biggest risk is the obligation to provide ‘fair and equitable treatment’, which investors may claim includes a legitimate expectation that governments will comply with their obligations in making regulatory and administrative decisions. They could launch a claim for many millions of dollars compensation, including expected future profits, if they believed New Zealand’s process in general, or in specific cases, violated their expectations under the Transparency Annex and adversely affected the value or profitability of their investment.” [page 6]

Who gets to “consult”?

Deborah Gleeson, a lecturer at La Trobe University in Australia, points out another danger. A “consultation” mechanism that requires governments to consider corporate objections in pricing decisions could be used to apply pressure to make changes to benefit pharmaceutical and medical-device corporations. She writes:

“The inclusion of the Healthcare Transparency Annex in the TPP serves no useful public interest purpose. It sets a terrible precedent for using regional trade deals to tamper with other countries’ health systems and could circumscribe the options available to developing countries seeking to introduce pharmaceutical coverage programs in future.” [page 2]

As elsewhere in the TPP, the U.S. government is taking the most hard-line approach, and has been opposing efforts to exempt the poorest countries from attacks on health care subsidies. Judit Rius Sanjuan of Médecins Sans Frontières/Doctors Without Borders said:

“If the US proposal is accepted, the poorest countries would be forced to limit access to affordable medicines long before their public health needs are under control. The fact remains that no country, rich or poor, should accept limitations on its sovereign ability to ensure medicine is accessible and affordable for all those who need it.”

It’s not as if pharmaceutical companies are not already hugely profitable. They like to whine that they have high research and development costs, and while that is true, the prices they charge are well beyond reasonable expenses. They enjoy one of the highest, if not the highest, profit margin of any industry — nearly 20 percent for 2013. The world’s 10 largest pharmaceutical corporations racked up a composite US$90 billion in profits for 2013, according to a BBC analysis. As to their expenses, these 10 firms spent far more on sales and marketing than they did on research and development.

“Free trade” agreements have very little to do with trade. The Trans-Pacific Partnership, and the similar Transatlantic Trade and Investment Partnership and the Trade In Services Agreement, are nothing more than initiatives to cement corporate control over all aspects of society, in which governments lock themselves into binding agreements that elevate corporate profits above all other human considerations. Don’t get sick.

Keynesianism will not save the world

Nostalgia for the supposed “golden age” of mid-20th century capitalism carries with it an assumption that we can simply go back to a Keynesian world. Yet this is not a matter of simply of switching horses for nobody decreed that we shall now have neoliberalism and nobody can decree we shall now have Keynesianism.

There are structural reasons for the neoliberal assault. It is the logical development of capitalism; “logical” in the sense that the relentless scramble to survive competition eventually closed the brief window when rising wages were tolerated and government investment encouraged. The Keynesian policies of that time was a product of a specific set of circumstances that no longer exist and can’t be replicated.

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 to expand. Moreover, capitalists who are saved by Keynesian spending programs amass enough power to later impose their preferred neoliberal policies. A vicious circle arises: Persistent unemployment and depressed wages in developed countries and inadequate ability to consume on the part of underpaid workers in developing countries leads to continuing under-consumption, creating pressure for still lower wages by capitalists who can’t sell what they produce and seek to cut costs further because there is no incentive for them to invest in new production.

Counter-intuitively, the turn toward neoliberalism is a also a response to declines in profitability. The rising wages of the post-World War II era were tolerated by capitalists because profits and the potential for further expansion were both high. Pent-up demand across the global North and the massive destruction of capacity in Europe enabled U.S. manufacturers to gain an unprecedented, and unrepeatable, opportunity. Capitalists in Europe and East Asia used state investment to rebuild their economies and regain their competitiveness.

Workforce of the future?

Workforce of the future?

The Keynesian compromise was not necessarily what capitalists would have wanted; it was a pragmatic decision — profits could be maintained through expansion of markets and social peace bought. When markets could no longer be expanded at a rate sufficiently robust to maintain or increase profit margins, however, capitalists ceased tolerating paying increased wages.

Competition is now carried out on a global scale, and where in the past local monopolies tended to cohere within national or regional borders, corporate globalization has put the world well down the road of international monopolization. The same tendency toward a handful of corporations dominating a market is now being reproduced on a larger scale, a single global world system, replicating the processes that previously led to monopolizations within individual countries or regions.

This is part of the “grow or die” dynamic of capitalism. It’s not only grabbing market share, it’s a mad scramble to “innovate” to increase profitability. That can be new production techniques but it is especially cutting costs — in the first place, wage costs. Thus robotics and automation to reduce the number of workers needed, which also “deskill” work to make workers more expendable, putting downward pressure on wages. Work speedups are part of the extraction of more profits, or an attempt to stave off declines in profit rates. And when these are finally insufficient, the work begins to be moved to new locations with lower wage levels and weaker regulation. “Free trade” agreements negotiated in secret that bring corporate wish lists to life both accelerate this tendency and are a product of it.

The capitalist that cuts costs first gains an advantage, but competitors follow, eroding the advantage. So the next step, and the next step, is carried out, intensifying these processes. The personality of the capitalist does not matter; he or she is acting under the rigors of competition. There is no way to put a human face on this or to permanently reverse the logic of capitalist competition. The present era of austerity and neoliberalism is the product of capitalist development. Even if a massive movement becomes sufficiently strong to effect significant reforms, eventually they would be taken back just as the reforms of the mid-20th century have been taken back.

(Mural by Ben Shahn)

(Mural by Ben Shahn)

Not only does the scope for expansion that existed during the Keynesian era no longer exist, the environmental limits and global warming that the world did not then face can no longer be avoided. Humanity is consuming far beyond the world’s replenishment capacity and changing the climate at a faster rate than ever before known. We can’t turn back the clock (and the “golden age” of capitalism wasn’t so golden if you were a woman, a Person of Color or a working person in a developing country) nor is it environmentally sound to ramp up production and consumption on the scale that a global Keynesian initiative would require.

Alas, this is a variation on the theme of “green capitalism” — the idea that the same system that has brought the world to its present state of crisis, a system that requires infinite expansion on a finite planet, that has turned to financialization because speculation is more profitable than production, that treats pollution and waste as external costs to be ignored will somehow now save us. Tinkering with the machinery of capitalism — which is what Keynesian nostalgia amounts to — would ameliorate conditions somewhat for a while, but offer no solution.

The days when it was still possible to believe capitalism can be a progressive force are behind us; the neoliberal assault is the “new normal.” When capitalism has penetrated into every corner of the world, there is nowhere else to expand: The only route for capitalists is to reduce wages and benefits. The only route for the 99 percent is an entirely different world.