The mainstream media makes out like the economic collapse is just something that happened to us. Some greedy banksters gambled with trillions of dollars of our money and in the process, also committed embezzlement, fraud and theft. Now the money is gone, and we just have to live with it. Millions of Americans lose their jobs, homes, savings and pensions. But instead of sending the banksters responsible to jail, the government gives Wall Street trillions of dollars of TARP bail-outs and the CEOs responsible get billions of dollars in golden parachutes and pensions.

Then the government turns around and tells working people they have to tighten their belts – in addition to paying more sales tax, they have to accept pay cuts, longer working hours, loss of public services (such as teachers, libraries, police, street lighting, road and bridge repair, and health clinics). Because there’s no money left to keep the economy going. That’s just how it is.

Now, in the last week, they’re feeding us a new line about a so-called “double dip” recession. In other words, over the next few months we should expect things to get even worse – there will be even more job losses and wage and social service cuts. We might even need to cut Social Security and Medicare. Meanwhile corporate America is once again making out like bandits. Corporate profits are shooting up again, and CEO bonuses are growing handsomely.

The “Economic Crisis” is Really an Attack on American Workers

I just don’t buy it. Any of it. In fact, I believe there is overwhelming evidence that Wall Street and Washington are simply using the global economic crisis to justify a massive attack on the working class. I think there is a clear agenda to cut labor costs by reducing US workers to Third World status in terms of wages, working conditions and social services. Obviously this is much more expedient than continually closing down factories and moving them to Mexico and Asia.

Fighting Back

Fortunately I am no longer alone in seeing the “economic crisis” for what it is: an attack on working Americans.  It’s also gratifying to see workers beginning to organize to fight back – and to acknowledge the need for intensive cross-class, cross-gender, cross-cultural organizing not seen in the US since the 1930s recession (which, in many ways, was also a systematic attack on workers).

Specific examples of 1930s style organizing include:

1. The employed and unemployed are recognizing they have a common enemy (Wall Street corporations) and are organizing together. The Unemployed Union launched by the International Association of Machinists in January is taking off in a big way. You don’t have to be a former union member or even like unions to join. If you are one of 31 million Americans without a paid job, this website is for you:

http://www.unionofunemployed.com/

2. People who still have homes are organizing to support people who are being foreclosed on. This is mainly happening in Florida but definitely needs to spread to other states. The majority of working people in the US are living pay check to pay check. If you organize to stop your neighbour from being evicted, there will be organized resistance to help you if you lose your job and can’t pay your own rent or mortgage.

3. The fundamental role of the “welfare committee” in progressive organizing is being revived. Building organized resistance requires some of us to focus full time on movement building. The powerful grassroots organizing that built the progressive and union movement at the beginning of the twentieth century didn’t rely on “foundation” funding to pay their organizers. (See my page at www.stuartbramhall.com about the role of left “gatekeeper” foundations in ensuring that grassroots organizations don’t become too radical – also my July 26 post “Who Did Obama Work For in Chicago?”).  In the thirties, unions and community groups formed their own “welfare committees” to look after the basic needs of organizers and their families.

***

The Most Revolutionary Act on radio:

Gorilla Radio – Chris Cook, Victoria British Columbia

(click on link)

Chris and I discuss how I was first targeted, following my decision to support the occupation (of an abandoned school)  that led to the formation of Seattle’s first African American Heritage Museum – as an alternative to the crack cocaine epidemic among the city’s African American teenagers. We also talk about my research into HIV AIDS, my hospitalization and the Veterans Administration psychologist I worked with who also helped GIs illegally stationed in Cambodia in the sixties and seventies (and terrorized into keeping quiet about it).

XZone Interview with Rob McConnell

(click on link  – show is syndicated – fast forward the music to hear interview)

Rob and I discuss the phone harassment, break-ins, attempts to run me down – and my psychiatric hospitalization. We also talk about the political activities that seemed to lead the government to target me – including my research into HIV AIDS – and my inability to get help from the Seattle police. Then we cover the whole area of conspiracies in general, which are more accurately called State Crimes Against Democracy (SCADS)

The University of Washington epidemiologist Dr Stephen Bezruchka has been writing and speaking for nearly two decades on the real cause of illness and poor health. As he repeatedly points out, lifestyle factors (including smoking) only account for ten percent of the causation of illness. According to Bezruchka, the single most important determinant of adult health status and life expectancy is your mother’s income and social status during pregnancy and the first three years of life.

Although more than fifty years of epidemiological studies bear this out, it is only in the last decade scientists could explain why this is – thanks to the new science of epigenetics. While the early Freudians used to make similar claims about unfavorable “psychological” influences on infants and young children, it is now clear the effect is biological rather than psychological. That it relates to “epigenetics” – a term referring to changes in gene expression caused by mechanisms other than the underlying DNA sequence.

Numerous studies show that environmental stress and hormones (particularly stress hormones) produced during pregnancy can cause genetic code to be transcripted (into proteins and enzymes) in such a way to negatively affect the development of the immune system – in addition to predisposing the fetus to biochemically based mental illnesses.

The Link Between Income Inequality and Poor Health

However the most important epidemiological finding, according to Bezruchka, is that the effect of low income status on health is much more pronounced in societies with extreme income inequality. Study after study bears this out. In other words, a poor person’s adult status and life expectancy will be worse if he is born into a country with big gap between the economic status of its rich and poor residents (such as the US where 10 percent of the population controls 71 percent of the wealth). In fact the US is near the bottom of the charts if you look at statistical indicators that measure the overall health of a country. In life expectancy it rates 38^th, just behind Cuba. In infant mortality it rates 30^th, just above Slovakia.

These findings also belie the efforts of policy and opinion makers to convince us that class differences have disappeared in the US. For example, it’s extremely rare to see working class families depicted on American TV. In fact some Republican commentators accuse their opponent of “class warfare” for even mentioning the existence of an underclass. Nevertheless with a double dip recession on the horizon, in the face of healthy corporate profits and CEO bonuses, American’s class divide is receiving more and more attention.

A Mindset Driven By Social Service Cuts

Dr Susan Rosenthal, in Sick and Sicker, also points out that it’s only in the last thirty years that politicians and policymakers – on both sides of the aisle have made sick people responsible for their own illness. Epidemiological studies – as long as scientists have been doing them – have always shown that poor health correlates directly with low income and social status. Rosenthal notes that even in Dicken’s time it was taken for granted that the poor – undernourished and living in cold, damp, overcrowded tenements – were far more prone to illness than their middle class counterparts. In her mind this shift to a new “blame the victim” mentality has been deliberate – to justify aggressive social service cutbacks (by both Republicans and Democrats) that became fashionable with the election of Ronald Reagan in 1980.

The Role of Oppression and Exploitation in Illness

Although the data establishing the link between income inequality and poor health is unequivocal, epidemiologists are still at a loss to explain why poor people have poorer health in countries with more income inequality. Bezruchka relates it to the fact that people in more egalitarian societies look after each other more. I like Rosenthal’s explanation better. She relates it to the extremely high level of oppression and exploitation in societies with extreme income disparity.

She points out that minimum wage workers aren’t just poor. They also work in exploitive, arbitrary and often punitive job settings that they feel powerless to change. The immense stress of confronting this massive stress on a daily basis takes an enormous toll on both the human body and psyche.

Dr Susan Rosanthal’s website: http://susanrosenthal.com/

A bibliography of Dr Stephen Bezruchka’s writings can be found at his faculty website http://depts.washington.edu/hserv/faculty/Bezruchka_Stephen

***

The Most Revolutionary Act on Radio:

Gorilla Radio – Chris Cook, Victoria British Columbia

(click on link)

Chris and I discuss how I was first targeted, following my decision to support the occupation (of an abandoned school)  that led to the formation of Seattle’s first African American Heritage Museum – as an alternative to the crack cocaine epidemic among the city’s African American teenagers. We also talk about my research into HIV AIDS, my hospitalization and the Veterans Administration psychologist I worked with who also helped GIs illegally stationed in Cambodia in the sixties and seventies (and terrorized into keeping quiet about it).

XZone Interview with Rob McConnell

(click on link  – show is syndicated – fast forward the music to hear interview)

Rob and I discuss the phone harassment, break-ins, attempts to run me down – and my psychiatric hospitalization. We also talk about the political activities that seemed to lead the government to target me – including my research into HIV AIDS – and my inability to get help from the Seattle police. Then we cover the whole area of conspiracies in general, which are more accurately called State Crimes Against Democracy (SCADS)

What I find most troubling about the reactionary “useless eater” mentality (see May 24 blog) pushed by policy and opinion makers is the way Americans have internalized the belief that it’s their own fault if they become ill. In fact much of the US population seems more freaked out about getting sick than dying. I can’t say I blame them, as so many American workers have no sick leave and lose a day’s pay every time they are ill.

Americans also spend billions of dollars on alternative health care and vitamin supplements and other non-prescription remedies. And many are practically obsessed with healthy eating, only drinking bottled or filtered water, compulsive exercise routines and meditation, yoga and other stress reduction techniques to keep their massive job stress from making them sick (at present those who still have jobs do the work of 1.5 to 2 people on average).

The media compounds the problem by promoting a variety of cough and cold remedies and caffeine and mega B vitamin “boost” drinks to enable people to attend work when they have colds or even quite serious illnesses, such as bronchitis and influenza.

Medicating Kids

Parallel to this pressure for adults to be healthy, is immense pressure for children to be “normal.” While parents seem to be appropriately skeptical about taking unnecessary drugs themselves, they seem far too eager to and medicate children with behavior problems. As a child and adolescent psychiatrist, I am well aware that ADHD is a genuine disorder affecting 1-2% of children (but not childhood bipolar disorder – this is a diagnosis heavily marketed by drug companies and totally unsupported by developmental or epidemiological research).

At the same time I see absolutely no reason why American children should be three times as likely to be diagnosed and treated for ADHD than children in other parts of the world. In my work, I come across psychiatrists from all over the world. Based on their input, I can safely asserted that the eagerness of US doctors (at the behest of drug companies) to prescribe psychotropic medication for children is an international scandal that casts the standard of  American pediatric and psychiatric care in a very bad light.

Sending Sick Kids to School and Day Care

However I am even more concerned about the number of kids who have to go to school or day care when they’re sick because their working parents can’t afford to stay home and have nowhere else to send them. In doing so, they will also expose all their child’s classmates. Who, because their immune system is still forming, are very likely to develop the illness themselves and expose other children. Over the past decade, I have seen many children who suffer 12 or more serious (requiring antibiotics) throat, ear, sinus or chest infections a year.

This is a major public health problem, especially now that asthma (often triggered by chest infections), is reaching epidemic proportions among American children. Allowing children to suffer one respiratory infection after another can have permanent lifelong health consequences.

Take Home Message

Good health is elusive. In general we have a very limited ability to stay well by eating right, exercising and reducing stress. Epidemiological studies show that only 10% of illness is accounted for by lifestyle factors (including smoking).

The reality is that illness – both acute and chronic – is fundamental to the human condition. In my experience, people willing to allow themselves to be ill and take time off to get well recover faster and cope better with other life stresses better.

Obviously adults have the choice whether or not they want to work when there are sick. Parents with sick children must make that decision for them. They are also entrusted with that child’s future health and welfare. And I think they need to weigh that responsibility carefully in deciding to send a sick child to school or daycare.

To be continued, with a discussion of the role of socioeconomic status (at birth) and income inequality in determining adult health status and life expectancy.

***

The Most Revolutionary Act on radio

Gorilla Radio – Chris Cook, Victoria British Columbia

(click on link)

Chris and I discuss how I was first targeted, following my decision to support the occupation (of an abandoned school)  that led to the formation of Seattle’s first African American Heritage Museum – as an alternative to the crack cocaine epidemic among the city’s African American teenagers. We also talk about my research into HIV AIDS, my hospitalization and the Veterans Administration psychologist I worked with who also helped GIs illegally stationed in Cambodia in the sixties and seventies (and terrorized into keeping quiet about it).

XZone Interview with Rob McConnell

(click on link  – show is syndicated – fast forward the music to hear interview)

Rob and I discuss the phone harassment, break-ins, attempts to run me down – and my psychiatric hospitalization. We also talk about the political activities that seemed to lead the government to target me – including my research into HIV AIDS – and my inability to get help from the Seattle police. Then we cover the whole area of conspiracies in general, which are more accurately called State Crimes Against Democracy (SCADS)

As a psychiatrist battling the stigma of mental illness for more than 30 years, I am gratified by growing public awareness that that schizophrenia, depression and bipolar disorder run in families and are, at least partly, biologically determined. Thankfully the days when it was socially acceptable to blame depressives for being lazy or not doing enough to help themselves are long gone.

I wish I could say the same of physical illness which, after all, is basic to human existence. The US, unquestionably, has the most reactionary and punitive attitude towards illness in the world. It comes out in all manner of regressive and inhumane government policy: the federal government’s absolute refusal to make sick and parental leave mandatory (as it is in all other industrialized societies), the pressure for long term recipients of Social Security disability benefits to undergo continual review and mandatory treatment (which most have no way of paying for, as doctors have stopped accepting Medicare and Medicaid), as well strong pressure on doctors to declare them well enough to work; and now a proposal to change eligibility for Social Security retirement to make the elderly “prove” they are too sick to work.

The Growing Attack on Entitlements

In the growing attack – by Republicans and Democrats – on entitlements, there are always assertions – either direct or implied – that sick people are somehow responsible for the problems that make them unable to work. However what troubles me even more is the way so many Americans have internalized these attitudes – how ready they are blame people who get sick on eating the wrong food, not exercising or not managing stress properly. Epidemiological studies show clearly this is not the case – lifestyle factors only account for 10 percent of what causes us to become ill.

There is no question that the US has parted company with the rest of the world on this. I think it’s important to ask why. Quite frankly I hear a lot of discussion that is ominously reminiscent of Hitler’s “useless eaters” initiative. And I think it’s time to ask whether this is simply “coincidence” – an accident of history – or if there are more sinister reasons why this might be.

The Long Shadow of Joseph Goebbels

Hitler’s adopted his “useless eaters” policy in the early thirties at the very beginning of his regime. It was a utilitarian approach to social welfare consistent with the role the Nazi state played in serving the German and American corporate elite who put them in power. And Hitler enforced it vigorously, carting tens of thousands of elderly, handicapped, chronically ill and mentally ill and retarded individuals off to execution centers (long before the communists, Jews, gypsies and other undesirables) because of their inability to contribute “productively” to society.

American attitudes, not just around health, but around all spheres of human activity, are far more reactionary than the rest of the “free” world. And I think it’s high time to ask ourselves why. With new information surfacing over some of the Nazi connections of CIA founder Allen Dulles, I am increasingly skeptical this is either coincidental or down to a handful of right wing think tanks. Dulles’ high regard for Hitler’s chief propagandist Joseph Goebbels is a matter of public record. As is the fact that Dulles incorporated Hitler’s entire eastern European spy network into the CIA after World War II. And the long, cozy relationship between the CIA Office of Public Information and many US newspapers, news magazines and publishing houses. (see excellent article by Daniel Brandt at http://tinyurl.com/244m25v, along with two dozen references, including Carl Bernstein’s 1977 Rolling Stone article)

If the CIA, as it appears, has direct influence over media content, I think it’s reasonable to ask whether this plays a role in shaping how we think. I believe it does.

To be continued, with a discussion of the real cause (income inequality) of poor health.

***

The Most Revolutionary Act on Radio:

Gorilla Radio – Chris Cook, Victoria British Columbia

(click on link)

Chris and I discuss how I was first targeted, following my decision to support the occupation (of an abandoned school)  that led to the formation of Seattle’s first African American Heritage Museum – as an alternative to the crack cocaine epidemic among the city’s African American teenagers. We also talk about my research into HIV AIDS, my hospitalization and the Veterans Administration psychologist I worked with who also helped GIs illegally stationed in Cambodia in the sixties and seventies (and terrorized into keeping quiet about it).

XZone Interview with Rob McConnell

(click on link  – show is syndicated – fast forward the music to hear interview)

Rob and I discuss the phone harassment, break-ins, attempts to run me down – and my psychiatric hospitalization. We also talk about the political activities that seemed to lead the government to target me – including my research into HIV AIDS – and my inability to get help from the Seattle police. Then we cover the whole area of conspiracies in general, which are more accurately called State Crimes Against Democracy (SCADS)

Contemporary Solutions

In The ABCs of the Economic Crisis, contemporary Marxists Magdoff and Yates also express the view that capitalism is on its last legs. They, like Strachey, propose “socialism” as the solution to a failed capitalist system. However they are even less prescriptive than he is as to what this should look like and exactly how it ought to come about.

At the end their book they simply suggest that Americans come together to decide if our current system is worth fighting for (which is after all why we are at war in the Middle East). They then itemize some of the human costs of our current way of life:

• increasing exploitation at work (all the lay-offs mean workers who remain are doing the work of 1.5 – 2 people)
• increased stress accompanied by poorer health
• rising consumption that has polluted our planet and filled our homes with junk, impelling us to move into ever bigger houses, fuelling the growth of suburbs and exurbs that waste gasoline, power and water and destroy our natural habitat

They then offer some alternative priorities that are worth fighting for: adequate food, decent housing, full employment, quality education, adequate income in old age for everyone; true universal health care, enhanced public transportation, a commitment to a sustainable environment, progressive taxation which reverses the process of taxing the middle class and poor to enrich a wealthy elite, a non-imperialist government and labor- and environment- friendly trade.

End of Capitalism Theory

In laying out End of Capitalism Theory on his website www.endofcapitalism.com, Alex Knight is the most specific of the doomsayers in describing what the alternative to capitalism should look like. He also stresses the need to begin working to build this new form of social organization now – and gives examples (in my view the most exciting section of his website) of hundreds of community efforts around the US that have already begun.

Knight lists five guideposts he considers essential to bringing about real change: freedom, democracy, justice, sustainability and love. The essence of his vision lies in how he defines these terms.

• Freedom – in the sense of self-determination, ordinary people controlling their own destinies instead of huge corporations and corrupt politicians. He advocates strongly for local communities to guarantee their residents access to land and food security and indicates some have begun to do so.
• Democracy – in the sense of “participatory democracy.” At present this takes the form of non-violent civil disobedience – taking back rights we should have but don’t. Knight gives the example of Taking Back the Land, which supports the homeless in squatting in foreclosed homes in Miami.
• Justice – eliminating systems of oppression that benefit one group, like whites, at the expense of another group and guaranteeing everyone access to resources like food, housing, education, health care, transportation, clean water and air, and a decent livelihood.
• Sustainability – learning to meet human needs without sacrificing the ecosystem. Knight indicates this is where the most progress has been made, with the boom in organic agriculture, permaculture and the renewal energy industry.
• Love – learning to value life over profit and money, recognizing the immense emotional isolation the current system has imposed on all of us and the healing (learning to love ourselves) that must occur. Knight stresses that capitalism, after all is system founded on and centered in abuse – and war.

Implications for the Future

In general, Marxists believe the economic laws that govern capitalism make it inherently flawed – dooming it to eventual failure. They also see a grave risk that the collapse of capitalism will bring down civilization with it. Which is why they argue for workers to hasten its demise and prepare to replace it with some other form of social organization.

Many of the predictions John Strachey made in 1933 in The Coming Struggle for Power have come to pass: the consolidation of multinational corporations into ever bigger monopolies; the merging of banking and productive monopolies; the export of jobs to the Third World; the growth of fascism, and our current perpetual state over world resources.

Obviously his prediction that capitalism would collapse by 1950 didn’t come to pass. However I think Strachey can be forgiven for his inability to anticipate the immense boost World War II would give the global economy; the rise of Communist China; the end of the Soviet Union or the massive financialization of the US (and ultimately the global) economy.

How Workers Take Over Society: Strachey’s View

As a Marxist, he understandably advocates for the end of class society – and for workers to run their own government and own the companies where they work. Moreover he makes some general statements how this should come about. Many, I believe, still have relevance in 2010.

First he argues that the workers’ “revolution” cannot be worked out on paper in advance. In his later life, Strachey believed this was the great historical mistake of Marx and Lenin, and ultimately the Soviet experiment. They were too prescriptive in creating an enlightened “vanguard” to work out all the details of the Revolution on behalf of working people. As history shows, this vanguard only served to replace the capitalist elite it overthrew (not only in the USSR, but in China, North Korea and Cuba), producing some of the most despotic totalitarian regimes in history.

Will the Revolution Be Violent?

Secondly Strachey makes it clear that dismantling class society, enabling workers to genuinely take over government and their work sites, is unlikely to be peaceful. As with the great revolutions that made capitalism possible, the violence doesn’t originate with the reformers but with the old elite that refuses to give up power. Like Marx and Lenin, Strachey believes workers’ most powerful tool is their ability to organize and bring society to a standstill by withdrawing their labor (a general strike, like recent ones in Greece and currently in South Africa). However in most capitalist countries (including the US), this is unlikely to be accepted by capitalist elites without violent retaliation. In other words, it’s very likely to get leaders and many workers who participate in these actions killed or imprisoned.

Thirdly Strachey also stresses that any violence associated with workers taking over society is unlikely to kill as many people as the continual unremitting violence capitalism imposes on the world. In the last decade our current capitalistic system has caused millions of deaths in the Middle East alone – in Iraq, Afghanistan, Pakistan and Palestine – to say nothing of the other counterinsurgency wars (employing US troops, CIA mercenaries or the troops of proxy dictatorships that we fund) in Columbia, the Philippines, Latin American and Africa. Or the millions that have died from floods, droughts, famines and other climate change related extreme weather events.

To be continued, with predictions from contemporary Marxists and End of Capitalism Theory

Fascism

In The Coming Struggle for Power, Strachey also writes about the important role of fascism associated with end stage capitalism. He explains how declining profits and growth will result in reduced wages, poorer working conditions and a claw back of social welfare benefits enacted during more productive periods. This, in turn, leads to more conflict between workers and capitalists, at the same time that capitalist controlled governments are experiencing increasing conflict with foreign capitalist controlled governments.

According to Strachey, ensuring that production continues during a period of heavy stagnation necessitates the rise of fascism – in which the capitalists themselves organize workers to install governments which enact laws unfavorable to working people.

Where Did the Tea Party Come From?

The Astroturf (fake grassroots) origin of the reactionary Tea Party is an excellent example of corporate elites organizing working people around a right wing political agenda harmful to their own economic interests (for example, that opposes minimum wage increases, extensions of unemployment benefits and regulations enforcing workplace health and safety). I did several blogs in June exploring why blue collar workers are susceptible to this type of psychological manipulation. See my posts on The Mass Psychology of Fascism at http://tinyurl.com/2vftjrh

Paul Krugman explores the origin of the Tea Party in the April 12, 2009 New York Times. He points out that the public was deceived by the media spin that early Tea Party events occurred as were spontaneous popular uprisings. They were actually organized and paid for by Freedom Works, a group organized by former Republican majority leader Richard Armey, with generous support from right wing billionaires. (See http://www.nytimes.com/2009/04/13/opinion/13krugman.html).

In The Coming Struggle for Power, Strachey shows how these so-called “populist” mass organizations are used to justify a stricter, more totalitarian government regime that suppresses worker freedoms and dissent (for example, authorizing warrantless searches, covert break-ins, wiretaps and electronic eavesdropping and suppressing habeas corpus and freedom of the press – sound familiar?). In his view fascism is always a transitional state, as right wing popular movements are unpredictable and difficult to manage. He asserts that reactionary forces either use fascism to create totalitarian dictatorships (as occurred in Nazi Germany), or the fascist movement dissolves as economic conditions improve.

What is Fascism?

There is a lot of disagreement over the precise definition of fascism. The Italian fascist dictator Mussolini defined it as a merging of corporate and government power. Strachey defines it as a political environment where workers no longer sell their labor as free agents – but are physically (as opposed to economically) compelled to work.

I’m not totally comfortable with Strachey’s definition. I question whether it’s humanly possible to force someone to work. I’m aware that third world dictators sometimes “terrorize” people into working by assassinating and disappearing union leaders and workers who complain about wages and working conditions. However, especially in the case of skilled work, it’s virtually impossible to get someone to put out high quality work at satisfactory rate – if he or she is determined not to do so.

In fact I believe innate stubbornness, a nearly universal human trait, may be the root cause of the collapse of the totalitarian Soviet regime. “Free market” capitalism and state capitalism (which Marx and Lenin view as a necessary transition between free market capitalism and true communism) only operate effectively if workers are satisfied that two basic requirements are met: 1) that working will enable them to meet their families’ fundamental needs and 2) that their government might skim a little off the top but will ultimately act in their best interest.

Otherwise people have absolutely no reason to go to turn up everyday to a job they hate that pays them a little less than they need to live on.

In the 1980s the Soviet people lost faith, deciding they were prepared to risk their jobs and live out of garbage cans, rather than continuing to put out for political system that was totally indifferent to their needs and promised no future for themselves and their families. Productivity (quantity and quality of work) dropped to the point the Soviet economy ceased to be sustainable, leading to the collapse of the entire political infrastructure.

Why Capitalism Didn’t Fold in 1933

Stagnation Theory

In 1966 Paul Sweezy, founding editor of the Monthly Review, and economist Paul Baran first set out what they describe as “stagnation theory” in their book Monopoly Capital. In later writings, Swezey describes how the massive “financialization” of the US economy, which started in the 1970s, served as a partial antidote to the stagnation that is inevitable under monopoly capitalism.

According to Sweezy (and many others) it was only the massive economic boost of World War II military spending that saved capitalism in the thirties and forties. There was a brief post war boom in the fifties and sixties, as consumers rushed to buy goods that were unavailable during the war. When the sixties ended, stagnation set in again, accompanied by a marked slowing of profits and growth. Neither declined to 1930s levels, according to Sweezy, thanks to the “financialization” of the American economy.

A Giant Ponzi Scheme

“Financialization” describes the process of creating profits without actually producing a profit or service. In the US it injected massive amounts of money (the nice word is credit, but it’s really debt) into the economy in three ways: massive government spending and indebtedness (to private financial interests), a massive increase in consumer indebtedness and an explosion of the financial industry itself.

From 1980 to the 2008 crash, the banking, insurance and investment sector became the largest growth sector of the US economy. Beyond financing unprecedented levels of consumer, business and government debt, it also involved a lot of outright speculation. In addition to commodities and derivatives trading, it also included leveraged buy-outs of productive sector companies with borrowed money, loading them with more debt and reselling them at a profit. Former Wall Street economist Michael Hudson points out that the takeover of health care by private insurance companies was part of this massive ballooning of the financial sector.

As Sweezy describes, the enormous “wealth” created by the financial sector helped to drive the “real” or productive economy. However he also warns – as far back as 1982 – that it’s basically a Ponzi scheme. That it can only continue so long as the economy continues to grow – if allowed to go on too long the speculative bubble will burst, resulting in a collapse as bad or worse than the Great Depression.

The ABCs of the Economic Crisis

Political economists Fred Magdoff and Michael Yates elaborate on Sweezy’s analysis in their 2009 book The ABCs of the Economic Crisis. They point out that stagnation continued during the 1980s and 1990s, despite the life support provided by “financialization.”  GDP growth dropped from 4.4 to 3.3 percent in the 1970s, with a further decline to 3.1 percent in the eighties and nineties, with a further decline to 2.2 percent in 2000.

They use the example of the auto industry to describe why stagnation is inevitable under end stage monopoly capitalism. Immediately after World War II, consumers bought a lot of cars and trucks, which were unavailable between 1941 and 1945. However by 1970 all Americans who wanted cars or trucks, and the world’s poorer nations didn’t have a mass market large enough to take the excess of cars being produced. And as consumer buying slowed, so did profits and GDP growth. Obviously the same was true of other durable goods (refrigerators, washing machines, dishwashers, vacuum cleaners, etc)

They argue that major social service cuts occurred under Reagan, Bush I, Clinton and Bush II – not because these men were more conservative than the presidents who preceded them – but because a steady downward trend in growth and profits meant the US no longer had the resources to support generous social programs enacted during the boom years of the fifties and sixties.

In Yiddish It’s Called Chutzpah

They also point the significant drop in inflation adjusted wages and purchasing power that accompanied the decline in profits and growth. That to keep workers consuming, the corporate sector compensated by giving them credit cards instead – lending them the money at 18-20% interest that they were no longer paying in wages.

To be continued

The long taboo topic of the end of capitalism seems to be in fashion recently – a consequence of the deepening economic crisis that shows no signs of going away. In fact there’s even a website now www.endofcapitalism.com. I distinctly recall talk of the federal government “nationalizing” Wall Street when the major banks came to the taxpayers in 2008 to bail them out. There has been so much secrecy about exactly how much TARP money we have doled out (is it $5 or $10 trillion?), as well as exactly where the money disappears to. I’m not sure if we have “nationalized” or “partially nationalized” any of the corporations that we agreed to finance. Is it possible to “nationalize” corporate CEOs? Because it’s my sense most of the money has gone into private pockets.

This isn’t the first time economists have declared that capitalism was on its last legs. Many, in fact, saw the Great Depression as symptomatic of its impending failure. British parliamentarian John Strachey was clearly the most articulate in his 1933 The Coming Struggle for Power. Moreover he makes some surprisingly prophetic predictions regarding the future of post-industrial capitalism. I find interesting parallels between Strachey’s analysis and those of Paul Swezey (who first articulated “stagnation theory” in the 1960s) and Fred Magdoff and Michael Yates in 2009. All four are strikingly non-judgmental in their approach. There is no castigation of criminal banksters, sleazy corporate lobbyists or crooked politicians.

Instead they quietly point out that neither Great Depression nor our current economic crisis is the fault of any particular individuals or groups. Basing their observations on the premise that there are natural laws of capitalist economics, just as there a natural laws of physics, they argue that our current economic difficulties are caused by fundamental flaws in capitalistic economic systems.

From a somewhat different perspective Alex Knight, who edits www.endofcapitalism.com, promotes End of Capitalism Theory. This argues that capitalism is breaking down owing to ecological and social limits to the continual growth that’s essential for a capitalist economy to continue to operate.

How Capitalism Developed

Of the five, Strachey has always been my favorite. As a long serving Member of Parliament, he has a knack for bringing complex concepts down to the level of ordinary men and women who lack formal training in economic or political theory. In fact my favourite part of The Coming Struggle for Power is where he carefully traces the transition all human economies underwent from feudalism to mercantilism (large scale trading) and from mercantilism to capitalism. He emphasizes this transformation was extremely violent, citing the Rebellion of 1640 (during which Charles I was executed) and the Revolution of 1688 (in which James II was overthrown). Strachey goes on to describe the violence that accompanied the Enclosure Act one hundred years later, which denied farmers the ability to continue subsistence farming by throwing them off their communal lands. Finally he stresses that neither the French Revolution nor the American Revolution was really about political freedom or equality. That the primary purpose, and effect, of both wars was to end old feudal relationships that interfered with the right of the new capitalist class to freely produce, buy and sell things.

Strachey’s Crystal Ball

As he writes in 1933, Strachey is of the definite opinion that the Great Depression is symptomatic that capitalism has reached its final stage of monopoly capitalism. It isn’t quite dead yet, but clearly dying. He quotes from Lenin (who had nearly 50 more years experience with capitalist boom and bust cycles than Marx did) about “monopolistic” capitalism being the last stage of capitalism – when begins to “decay.” Lenin (and Strachey) describe specific political/economic transformations that characterize end stage capitalize. (owing to an inevitable decline in profits and growth). I find it uncanny that they describe our current economic predicament so perfectly:

1. The monopolistic corporations that control finance capital (the commercial and investment banks) essentially merge with the monopolistic corporations that control production and manufacturing (which they have done, due to massive buy outs and takeovers and interlocking boards)
2. There is increasing focus on exporting capital (which is what happens when a company shuts down a factory in the U.S. and re-opens it in southeast Asia)
3. National governments, which are essentially controlled by their monopolies, are constantly in conflict with one another over who will control the resources, markets and cheap labor of the Third World.

The fact remains that Strachey was mistaken in predicting capitalism’s imminent demise. Capitalism didn’t die in the 1930s. According to Sweezy, Magdoff and Yates, the massive “financialization” of the US economy served as an 80 year life support system to keep it going a little longer. Unfortunately this strategy no longer seems to be working that well. So what do we do now?

To be continued

What the Media Doesn’t Tell Us

(About Ocean Acidification, Global Dimming and Methane)

Ocean Acidification

Ocean acidification, another direct effect of increasing carbon dioxide levels, is rarely mentioned in the mainstream media. Even though it threatens to cause a collapse in global fish stocks and an unprecedented shock to world food supplies.

Around half of all the carbon dioxide produced by the industrial revolution (around 525 billion tons) has been absorbed by the ocean. When dissolved in water, carbon dioxide forms a weak acid called carbonic acid. So much has been formed that the  world’s oceans are now 30 percent more acidic than prior to the industrial revolution (pH levels prior to 1990, when direct measurement started, is calculated indirectly from the oxygen content of rock formed from fossilized marine animals). Calcium carbonate, the material animals use to produce shells (and bones), dissolves in acid (we did this in sixth grade when we put a chicken bone in vinegar). And when compared to pre-industrial levels, the shell building rate of marine animals has decreased by approximately 50%.

Obviously this is a major problem for the shellfish industry. All over the world, oysters, clams and other shellfish are simply failing to reproduce. Coral reefs are also under serious threat, owing to reduced growth and “bleaching” (caused in part by warming ocean temperatures). Major coral reefs provide essential habitat for millions of other sea creatures. Marine biologists warn that if warming and increasing acidification trends continue, 95% of all living coral will be wiped out by 2050.

Perhaps even more concerning is a significant decline in plankton, the microscopic shelled creatures, fish, whales and other sea mammals consume. Even without over fishing, this has the potential to cause the world’s fish stocks to collapse over the next decade.

Is Solar Activity Increasing or Decreasing?

Climate change skeptics claim the recent increase in global temperatures relate to an increase in solar activity. This is mainly based on a recent article National Geographic by the Russian astronomer named Habibullo Abdussamatov, the head of space research at St. Petersburg’s Pulkovo Astronomical Observatory in Russia. Abdussamatov argues that evidence of warming on Jupiter, Pluto and Mars suggests that the sun is heating up. And that this, rather than increasing carbon dioxide levels, is responsible for increasing temperatures here on earth.

Based on my reading, Abdussamatov seems to be a minority of one. Other astronomers feel that warming on Jupiter, Pluto and Mars is much better explained by predictable fluctuations in these planets’ orbital patterns. Especially since direct measurements point to an overall reduction over the past 35 years in both sunspots and the sun’s energy output. This decline is independent of the sun’s 11 year cycles (with the last solar minimum in 1998) that Abdussamato refers to.

The Effect of Global (Solar) Dimming

The argument over solar activity is complicated by the Global Dimming effect. Global Dimming refers to a phenomenon, first observed in the 1960s, that an increase in airborne particles, mainly from industrial pollution, but also from natural sources, such as volcanoes and wildfires. Between 1960 and 1990, Global Dimming caused a 4% decrease in the amount of solar radiation reaching the Earth. This, however, seemed to have a negligible effect on increasing global temperatures over that period. Then in 1990, according to Charles Long, a climate physicist at Pacific Northwest Laboratories, the trend reversed (most likely due to laws regulating and air quality). The result was a “solar brightening.” Mathematically, however, the rise in global temperatures during this period was far too large to be explained by such a small incremental change.

Methane – the Other Greenhouse Gas

There is also little mention in the mainstream media of other, much more worrying greenhouse gasses, such as nitrous oxide and methane (produced mostly via intensive and industrial farming). Nitrous oxide derives from both natural sources and over application of nitrogen fertilizers and livestock urine and feces. And methane is something we all produce from time to time – though in cows it comes out the front end (as a burp) rather than the back end. Methane is the most worrisome. Although less plentiful than CO2, it is 20 times more efficient at trapping heat. Climate scientists are particularly worried about billions of tons of methane trapped in the Siberian and Canadian sub-artic permafrost (resulting from prehistoric plants and animals trapped it in) that will be released with continued Arctic warming. (Also that this will be the Tipping Point.)

More about Long’s study at:

http://www.livescience.com/environment/070312_solarsys_warming.html

Also a reader has turned me to a great site that goes through all the Climate Change Skeptic myths systematically with the evidence against them:

http://www.newscientist.com/article/dn11462-climate-change-a-guide-for-the-perplexed.html