Saturday, April 19, 2014

Piketty fest continues – some directions for the reader

As yet more reviews pour out on Thomas Piketty’s book, Capital in the 21st century, and Piketty does video conferences galore online with an assembly of the great and good among mainstream economists, I thought that I might help the followers of my blog by presenting them with a pdf of the whole book.  Here it is.
wp146 Thomas_Piketty,_Arthur_Goldhammer_Capital_in_the_Twenty-First_Century__2014

Also, although I have not posted my review of the book and an analysis of Piketty’s arguments, I think the following reviews offer the most perceptive analyses that I have seen so far.

http://www.vox.com/2014/4/8/5592198/the-short-guide-to-capital-in-the-21st-century

http://mrzine.monthlyreview.org/2014/andrews220314.html
http://www.dissentmagazine.org/article/kapital-for-the-twenty-first-century
and you can find all the data for his tables here:
http://piketty.pse.ens.fr/fr/capital21c
except the one that really matters, the sources for estimating the r.  The search for the r continues (see my previous post, http://thenextrecession.wordpress.com/2014/04/15/thomas-piketty-and-the-search-for-r/).

One thought: it seems that rising inequality has become both the flagship for opposition to neo-liberal economics and at the same time the explanation for crises under capitalism – although Piketty says nothing about the latter at all in 677 pages.

For my view on inequality and Piketty on inequality, see http://thenextrecession.wordpress.com/2014/03/11/is-inequality-the-cause-of-capitalist-crises/
ADDENDUM

The fest continued with a hugely laudatory review from Paul Krugman  
http://krugman.blogs.nytimes.com/2014/04/16/piketty-day-notes/.  Krugman makes some good points about how Piketty has exposed the deniers of rising inequality:  “But there’s something else: this analysis isn’t just important, it’s beautiful. Piketty gives us something we didn’t know we needed — a sweeping, elegant integration of growth theory, the factor distribution of income, and the personal distribution of income and wealth. He even (in work linked to but not presented in the book) shows how to derive the power laws that we know govern the distribution of income and wealth at the top, and shows how r-g determines the crucial exponents.” 

It is precisely because Piketty relies on mainstream noeclassical analysis that he falls well short of Marx in explaining the laws of motion of capitalism.  My review will explain why.

Rich people live longer. Didn't we know that already?


By Richard Mellor
Afscme local 444, retired

Well the Wall Street Journal reports that the richer you are the longer you will live.  Barry Bosworth, an economist at the Brookings Institution compiled the data and not only do rich people live longer but the gap is also getting wider.  All men are actually living longer the report explains but “While the wealthiest women from the 1940s are living longer, the poorest 40% are seeing life expectancy decline from the
previous generation.” the Journal adds.

This is not news to working class people but for the idea that money brings better health care, diet, living conditions, education etc. to get any credibility it must come from someone with letters after their name.

One of the reasons suggested for the declining life expectancy of lower income women is smoking, Mr. Bosworth suggests, as smoking is more common among low income or poor
Source of graphics: Wall Street Journal
women apparently.

I always say that rich people have socialism they just don’t want it for the rest of us. They have the best health care, they eat higher quality food, have access to all of society’s benefits.  They have healthier working conditions if you can call trading currencies or managing money and living off the profit of capital work.

Papers like the Journal always write about how hard the billionaires work and that they get up at 5 in the morning blah blah blah, But if life was so hard for the hedge fund managers and other coupon clippers they’d all be trying to get our jobs.   The super rich are forever justifying their wealth on the basis that they work hard.  But when you think about it they should live longer, they don’t do their own gardening, they don’t care for their own kids, and they normally have working class women do that on top of caring for their own.  They don’t do their own home repair, car maintenance or even walk their own dogs in most cases; they’re really some lazy bastards with good benefits.

“It’s really hard to come up with some effective means of trying to equalize this,” said Mr. Bosworth, “and that’s a serious concern.”  Well I can come up with some ideas that would improve people’s mental and physical health, it's not complicated:

Increase social services
health care for all on demand
Federally funded education at all levels
reduce the workweek to 25 hours and retirement age to 50
Take the dominant industries under workers control and management
Production for need not profit; a rational plan of production so working people can participate in the planning and administration of the labor process
Most importantly take the profit motive out of all agricultural production
Take profits out of sports, human entertainment and social life
End all wars and occupations and reach out to the workers of the world on the basis of solidarity and cooperation and a rational, planned system of production to replace the insanity of the market.

Here’s another suggestion.  With workers’ control and ownership of the mass media, not only can we participate in the generation and sharing of knowledge and ideas, culture and human activity, we can eliminate ads and the never-ending sales pitch that we have to endure every minute of every day. Kim Kardashian and Brad Pitt will no longer be so prominent, we don’t have to live our lives through them. We can have one channel that we can go to for details about consumption and where we can find what we need.  But we can go to it, not it force itself on us, come in to our homes every three minutes. We can get rid of being told to call our doctor to see if we need Viagra for erectile dysfunction at 30, Rogaine for excessive baldness or, whatever pill they have for restless leg Syndrome, or Excessive Shyness Syndrome. This will also enable theater and other cultural arts flourish as actors won’t have to sell things for a living which is what most of them do today.
So these are just a few quick thoughts about why we get sick and how the gap between the health and longevity of the rich (those who do no productive labor but live off the profit of capital), and workers that produce wealth, can be eliminated. 

Friday, April 18, 2014

In Ukraine dangers abound but workers' unity can prevent civil war


Some of us associated with this blog have been discussing the events in the Ukraine.  The situation is complex. The fact that the mass media in the US is so controlled and biased makes it even harder to determine the exact nature of events.  We thought we would share parts of a discussion some of us have had on the issue as we attempt to figure out from afar what is going on and what options lie ahead for the Ukrainian working class and workers throughout Europe.

Ukraine. Danger of civil war. But also mood for workers' unity. 

from Sean 

The government of Yanukovych was a government of the oligarchs. It tried to balance between the oligarchs who looked to Russian imperialism and the other wing that looked to Western imperialism. At the end of last year the Yankovyich government looked to sign a treaty with the EU which would have brought it closer to western imperialism. There was opposition to this from Russian imperialism and Yanukovych backed away. The result was mass opposition in the streets to this government. This opposition was mixed, genuine working and middle class opposition to the corrupt capitalist regime of Yanukovych which was looting the country, middle class youth who had illusions in Western Europe,  and amongst this the Ukrainian Orthodox church and the extreme right fascist organizations. The government was brought down and Yanukovych fled to Russia. 

An openly pro western government took its place. This was backed by US imperialism and the EU. Like Russian imperialism they wanted to get their hands more solidly on the wealth of the Ukraine. In particular US and Western European imperialism feared the potential stranglehold of Russia's supply of oil and gas to Western Europe. This extreme right wing Ukrainian nationalist government moved to ban the Russian language and to make increasing threats against the Russian minority. It included in its ranks many extreme right wing fascists. It also increasingly moved to link with the west and especially US imperialism. The country was being torn apart. 

Against this background a referendum was held in the overwhelmingly Russian speaking Crimea. A massive majority voted to join Russia. This and the increased threats of the western Ukrainian government in Kiev against Russian speakers increased the fears of the Russian speaking minority in Eastern Ukraine and throughout the Ukraine in general. Buildings were seized in numerous cities throughout eastern Ukraine by pro Russian forces. Some of these were forces sent in by Russian imperialism but some of them were locals who feared the increased strength of the right wing and fascist types in the new government in Kiev. Their fears were not assuaged by the open support of this government by US imperialism. Brennan the head of the US CIA openly visited Kiev to show his support. This was a propaganda gift to Putin and it also strengthened the fears of the Russian speaking peoples in the Ukraine as a whole. 

Over the past days the Kiev government sent in troops and tanks to put down the movement of pro Russian speakers in the East and to remove them from the government buildings they had occupied. It looked like a blood bath was very possible. Tens of thousands of Russian troops were sitting across the border and could have moved in in a matter of hours. They were also much better equipped than the Ukrainian troops. An open war was also possible. 

But while there is still the danger of a blood bath or open war as US and Western European imperialism egg on their allies and Russian imperialism eggs on its allies a very important development has take place in the past couple of days. The Ukrainian troops who were sent into the pro- Russian areas in their tanks with orders to put down the pro-Russian movement and end the occupation of government buildings by pro-Russian forces, refused to engage the protestors and instead fraternized with them. Troops disobeying their officers and state orders is a dangerous situation for any government. The soldiers refused to fire on the pro-Russian people. Not only that, in case after case they handed over their tanks and military vehicles to the pro-Russian protesters. This is an event of some significance especially if it spreads.

This happened mainly because of the way the pro-Russian protesters approached the troops of the Ukrainian army. They appealed to them on grounds of solidarity. They asked them not to shoot. They brought the soldiers who were hungry and thirsty food and drink. But it was not only the local pro-Russian protesters who appealed to the Ukrainian troops not to shoot the protesters. News reports report tell of parents of Ukrainians sent to the East calling their sons by cell phone and telling them not to shoot the protesters if they were ordered to do so. Another example of the use of the Internet and how it facilitates mass movements and the coordination of struggles. But more important these are examples of working class solidarity and how armed forces cash be appealed to and won away from the officer cast and their political rulers. 

What happens now in the Ukraine cannot be forecast with any certainty. Both western imperialism and Russian imperialism are stirring up division and egging on their stooges. Western imperialism has given up on getting the Crimea back but would be prepared if they could to initiate a civil war to drive out, "ethnic cleanse" the Russian speaking people from the east and repartition the country to hold the rest of Ukraine. Russian imperialism on the other hand would be prepared to move into the East of Ukraine to take this and annex it as part of Russia under the control of the Russian oligarchs and their representative Putin. There could still be a civil war in the Ukraine. But it is also possible that there can be a deal where there is a new constitution which would allow more of a federation with the different national and linguistic groupings having much more of a say and control over their own areas while Crimea stayed with Russia. And possibly parts of the East going with Russia. 

The most important development to see from the events of the past few days is that the working class moved and prevented the threat of civil war when the Kiev government sent in its forces. The Ukrainian troops refused to allow themselves to be used against the Russian speaking protesters. This is a major development which shows the potential of the working class and which is the reason that so far we have not had a blood bath in the Ukraine or an out right war.

There are many working class groups in the Ukraine with mixed membership and support, that is, membership and support from both Ukrainian and Russian speakers. Many of them are based in workplaces and unions. These exist throughout all of Ukraine East and West. But they will not be unaffected by events. The various nationalist forces will seek to provide an alternative to these, will seek to undermine these, to undermine the working class unity that is represented by these. It is these bodies and this working class unity that offers a future for Ukraine. They should be drawn together in a unified network throughout the entire country. They should unite around taking the stolen wealth that the oligarchs looted from the country and put this wealth back in the hands of the Ukrainian working and middle class and build a healthy democratic socialist Ukraine. This wealth should also be used to bring all workers living stands up to a decent level. It should also be used to bring the living standards of women up to that of men and to introduce the right for all women to full reproductive rights and free and professionally staffed health care facilities. 

These workers' bodies can also determine by assessing the mood what, if any kind of federation is the best way forward for Ukraine. These bodies can also organize to physically stop the armed fascist bands many of which have their roots in collaboration with the Nazis of the Hitler era and build a new and healthy society. Such a step would also allow this new democratic socialist Ukraine to reach out its hand to other countries in the region, to Russia, to the Baltics, to Poland, to the entire region and begin to move towards ending imperialism in the entire region and building a democratic socialist federation of Europe. 

************************

From Stephen
One thing your article made me reflecting on quickly, and I've not really tried to qualify and refine these points, but doesn't the whole situation show how inherently fragile Europe is under the exterior of unity and the still relevant prosperity in central and northern Europe. Let's not forget how it became the arena for 2 World Wars and how events will have repercussions throughout the area.

When I worked for the CWI in the Eastern block and also surrounding western capitalist countries like Austria and Germany, British comrades tended to view the Stalinist countries as something of a distant place, which it was for them. But in central Europe, the Stalinist countries were only a few hours drive away. Come out of the airport in Vienna and you would see the highway signs for Bratislava, Prague ans Budapest. It was a 50min drive to Bratislava, 2hr 20 to Prague and 3 hours to Budapest. 5 hours drive from Berlin to Warsaw and another 5 hours to the Ukrainian border.

Germany was split in two and in Berlin when you took the metro across town, you'd travel through East German metro stations on the Stalinist side without stopping, which were sealed up and abandoned since the creation of the Berlin Wall. If it had been the US, it would like New York being split between capitalist and Communist parts and the rest of the east coast from Philadelphia through the Carolinas down to Florida and across to Arizona being Stalinist states with the rest of the US west and north west being capitalist.

The point I'm trying to illustrate here is how the repercussions of developments in the Ukraine will be massive psychologically in Central Europe. Its on the doorstep for these capitalist countries and its effects on the other ex-Stalinist countries will also be huge. We saw what happened in Yugoslavia. The crisis in the Ukraine and Eastern Ukraine could be like a fizzling fuse spreading across East-Central Europe. In fact, there is massive “fault line” running through the whole region from the Baltic states to the north down to the Caucasus to the south which has large Russian minorities or pro-Russian minorities interwoven along both sides of the border states, like in Transnistria in Moldavia on the Ukrainian southern border and in the Baltic states there are over a million Russians discontented with their situation. The question is where next.

And its not just the question of Russian minorities who will be affected. It will undoubtedly affect minorities like Turks in Bulgaria and Greece, Hungarians in Serbia and Romania, Bosnia, the ethnic mix in Macedonia and in the Caucasus, where ethnic overlaps and tensions are even more complex.

I think we need to point out how Imperialism and capitalism is to blame for this and how Stalinism not only failed to resolve these national issues, but worsened them in many cases and that now we are paying the price for the failures of both systems. The Ukraine is yet another manifestation of this and not the final one. it will also have reverberations further afield in countries like Spain, Belgium and Britain.

Thursday, April 17, 2014

Ukrainian Troops Surrender to Pro-Russian Protesters

Reprinted from the Daily Beast

Ukrainian Troops Surrender to Unarmed Pro-Russian Protesters

Anna Nemtsova

If the paratroopers Kiev sent to Donetsk and Sloviansk are any example, armed resistance to Russia is doomed.

DONETSK, Ukraine—A few dozen exhausted looking Ukrainian paratroopers, mostly young draftees, had been sitting on top of their armored vehicles for several hours and, yeah, they confessed their butts hurt like hell. A week ago, after a couple of months of field exercises in southeastern Ukraine, their 25th Paratrooper Brigade was sent to the Donetsk region for “an anti-terrorist operation” against what they’d heard were Russian soldiers in unmarked uniforms. Now they were stuck in a crowd of a couple of hundred civilian protesters blocking their way to Donetsk outside the Pchelkino Railway Station. The pro-Russian protesters said they hated the new Ukrainian authorities in Kiev and demanded that the soldiers surrender.


The front lines in this crucial geopolitical standoff are a strange place to be right now. For all the talk about military operations, and the undoubted presence of well-armed, well-trained Russian-speaking gunmen in seized government buildings, the offensive to oust them announced by the government in Kiev is at best half-hearted, at worst a sad farce.

Nobody was pointing a gun at the Ukrainian grunts at the Pchelkino Station, but all the food they had with them were a few cans of pork stew, called tushonka. The crowd of ordinary local people coming from Sotsgorod, Yasnogoki, Belenky, and other surrounding villages brought the trapped soldiers ice cream, water, and cookies, begging the military to turn around and drive away, back to their hometown of Dnepropetrovsk in the center of the country. The soldiers smiled back at the friendly locals—they all felt homesick and could not wait to see their families. “Would you shoot at us?” a woman in a bright red jacket asked one of the soldiers. “Never,” he answered. “Paratroopers never shoot at peaceful people.” He admitted rather glumly that so far he had not seen any terrorists around, but added, “I would kill terrorists.”

A Ukrainian military helicopter circled above the scene. “Our army commanders wish they could solve the conflict peacefully too,” said one of the soldiers. A local man in a leather jacket shared his cigarettes with two young paratroopers sitting on top of a broken-down armored personnel carrier that had been dragged along behind the unit on a towrope. The soldiers asked their new friend to buy motor oil for them and offered him money.

People in the crowd discussed the chaos in the country and complained about increasing unemployment. Somebody mentioned a couple of cases of brutal robberies in the towns of Kramatorsk and Sloviansk, where more men were drinking after 6 p.m. than usual. “I could stay and guard your shops,” one of the Ukrainian paratroopers suggested with a smile. “And I would rather work as a security guard for a sauna full of beautiful girls!” his friend shouted and laughed. The soldiers allowed a curious 10-year-old boy to climb up onto their armored vehicle and explore inside.
The crowd of ordinary local people brought the trapped soldiers ice cream, water, and cookies, begging the military to turn around and drive away.
Meantime, pro-Russian deputies from the Party of Regions released a resolution in Donetsk urging the separatists to give up their weapons, an apparently conciliatory gesture from the organization of ousted President Viktor Yanukovych. But the resolution demanded official status for the Russian language and a referendum on federalism.

“The Kiev authorities are making a huge mistake by sending the army here; instead, they should just treat Russians populating our cities with respect and tension would immediately disappear,” said Yelena Skvortsova in the town of Sloviansk. She said she worried about “unidentified separatist forces” occupying the central Lenin Square, right where she lives in an apartment building with her husband and their baby. It’s not just the fear of open fighting, it’s the creeping lawlessness that bothers her. “One more month of this military conflict and our local criminals will begin looting every store and café in our town,” Skvortsova said.

But for now the Ukrainian military units ordered to put an end to the separatist movement in Donesk Oblast have refused to fight the protesters. Earlier on Wednesday outside Sloviansk, a crowd of pro-Russian demonstrators managed to convince a few dozen Ukrainian paratroopers from the same 25th Brigade to surrender. Ukrainian flags were taken off their four armored vehicles and locals presented with the flags of Russia and of the People’s Army of Donbas, the separatist militia. After switching sides, the soldiers drove to Lenin Square, where pro-Russian operatives have occupied the administration building since last week. Most of these militiamen claimed they were from Crimea; none of them spoke a word of Ukrainian. Still, they treated the surrendered Ukrainian paratroopers with courtesy and served them a nice meal inside the administration building.

The Ukrainian solders at Pchelkino Station were shocked when they heard that their colleagues had given up their weapons and their armored vehicles to pro-Russian protesters. But eventually they were convinced to do the same. By 6 p.m., a few soldiers had agreed to take their machine guns apart and pass them to the rebels. By 8 p.m., the entire unit crewing nine armored vehicles felt ready to make friends with the protesters. The soldiers took their machine guns apart and loaded them onto their radio truck, so the demonstrators knew that none of them could shoot, even if they wanted to. “They are not traitors,” said Alexander Ivanov, a pro-Russian activist in Kramatorsk, putting a generous spin on the surrender. “They were sworn to serve our people, and that’s what they are doing,” he told The Daily Beast. “The army should be with the people.”

Wednesday, April 16, 2014

CA Bay Area: Ecosocialist event with Ian Angus

Ian Angus, founder and editor of Climate and Capitalism is speaking in Oakland next week.  He is a co-author of the excellent book, Too Many People.  Don't miss this event if you are concerned about the world in which we live. See the Climate and Capitalism link to the right and you can order his book here, or get one at the event.


Tuesday, April 15, 2014

Economics: Thomas Piketty and the search for ‘r’

Michael Roberts will be reviewing this book
by Michael Roberts

Just about every man and woman and his dog has reviewed French economist Thomas Piketty’s magnum opus, Capital in the 21st century.  Most reviews are laudatory (but not all) and most reviews are superficial (but not all).  “A watershed in economic thinking” Branko Milanovic; “could change the way we think about the past two centuries of history” The Economist; “a defining issue of our era” John Cassidy, New Yorker and so on.

I am not going to review Piketty’s book here as I have been asked by the Historical Materialism journal to do a review and I don’t want to steal the thunder from that.  But as that won’t be published for some time, I can’t resist posing a few questions for everybody to consider if they plan to read the 677 pages plus a myriad of statistics and charts offered by Piketty.

The book’s title immediately suggests a reference to Marx’s Capital, written in the 19th century. By implication, Piketty sets out to deliver an analysis of capitalism relevant to the 21st century as an improvement on Marx.
So here are the questions.

Piketty’s definition of capital is different from that of Marx.  Is Piketty’s better, more realistic and appropriate or is Marx’s?  Does it matter?

Piketty presents “two fundamental laws of capitalism”.  Piketty’s laws are different from Marx’s laws of motion of capitalism.  Are they realistic and more compelling in explaining capitalism in the 21st century?

Piketty’s main thesis is that inequality of wealth will grow as the share of income in an economy going to capital rises faster than national income increases.  This will happen if the net rate of return on capital (r) rises faster than the nominal rate of national income growth (g).  Is he right?
Order Michael Roberts'  book here
What is this r, how do we measure it and is it a realistic category?  I challenge the reader to search for Piketty’s r and the data behind it.

Piketty says r and g are independently determined and exogenous to his model of capitalism.  Is it realistic to assume that the rate of return on capital is not affected by the rate of growth in an economy, or vice versa?

Piketty says that, over centuries, r is pretty much steady at about 4-5%.  How does Piketty reach this conclusion?  Does he explain? Marx would not agree that the rate of profitability in capitalist economies has not moved much?  Is Marx wrong and Piketty right?

Piketty says, as r is steady, the only swing factor is g and he forecasts that the growth of national income will fall below r during the 21st century and thus inequality will rise further.  Is he right about g slowing down while r stays steady?

Piketty uses the neoclassical aggregate production function model to make forecasts about future growth in an economy?  Is this robust and realistic?

Rising inequality is the issue for 21st century capitalism for Piketty.  But what about booms and slumps and the recurrent breakdowns in capital accumulation?  What does Piketty have to say about those in relation to his ‘fundamental laws’?

Piketty suggests policy solutions to the rising inequality of wealth.  Are they appropriate and realistic?

My review will try to answer these questions.

Chicago. War Zone. 36 shot in 36 hours.

Sean O'Torain. Chicago. 

To listen to Obama who came out of Chicago, and to Emmanuel the present mayor of Chicago, all is for the best in the best of all possible worlds as far as the city is concerned. But things are far from that. Last weekend 36 people were shot in 36 hours in the city. Four of those died. One was a 17 year old girl. The previous weekend 27 people were shot. Parts of Chicago are war zones. What parts? Those parts where unemployment is at its highest.

But there is major crime in all areas of the city. It just tends to be different kinds of crime.  The suburbs are awash with cocaine and heroin. The users of these in many cases travel into the city to buy these drugs increasing the drug trade and violence there and then travel back out to consume their drugs. There are also many dealers in the suburbs.

Then there are the big criminals. These are the ones that run the stock market, the currency exchange, the banks. They live in the gated communities and gated houses in places such as the North Shore or in the high rise apartments and condos on Lake Shore Drive. And there are their associates in the Chicago political machine. This is the Democratic Party which gets the votes together and rigs the elections on behalf of the big money criminals.

Some of the steps that would improve things would be:

A $15.00 an hour minimum wage for all and equal pay for equal work.
Jobs for all with good wages and benefits and union rights.  
Free education to all levels and free health care.
Affordable housing for all.
Free health care with full reproductive rights for all.


These steps would give us a decent life. The poor and the alienated who are into street crime and the users of the drugs would have a worthwhile life which would have satisfaction and so the demand for drugs would plunge. And of course the super rich who are represented by Emmanuel and Obama could be put to work at productive labor and help the city.

Sean.

Monday, April 14, 2014

Marx and the tendency of the rate of profit to fall

A critical day

by Michael Roberts

I’ve just got back from presenting a paper jointly with G Carchedi at a seminar on “Imperialism and war” organised by the Critique journal.  Critique is a long-standing theoretical journal of Marxism (http://www.critiquejournal.net/) and it recently published a joint paper by Carchedi and I called “Marx’s law: answering old and new misconceptions” (http://www.tandfonline.com/doi/full/10.1080/03017605.2013.876811#.U0k3frQXJGU). 

Much of the arguments in that paper concerned answering the critique of Marx’s law of the tendency of the rate of profit to fall recently renewed by Michael Heinrich, a prominent Marxist scholar, in the US journal, Monthly Review.  You can get the gist of that debate here (http://gesd.free.fr/mrhtprof.pdf).

The Critique editorial board kindly invited us to speak on how Marx’s law related to the cause of capitalist crisis at their seminar in London, among other speakers.  The first speaker was Bob Brenner, Distinguished Professor of of History at the University of California Los Angeles (UCLA) and director of the Center for Social Theory and Comparative History at UCLA, editor of the socialist journal Against the Current, and editorial committee member of New Left Review.  Brenner authored the highly influential book, The Economics of Global Turbulence in 2006, one of the first to argue that the source of crises in capitalism could be found in falling profitability and moreover providing empirical evidence of this.  Also, see his article of 2009, What is good for Goldman Sachs is good for America (http://escholarship.org/uc/item/0sg0782h).

Brenner delivered a paper similar to the article above that provided compelling empirical evidence that the root cause of the Great Recession lay in the secular decline of the US rate of profit and the attempt to overcome that with a series of ‘asset price’ credit-fuelled bubbles in stock markets (1990s) and residential property (2000s).

Carchedi and I presented two separate papers in our session.  Carchedi’s was called “The law of the tendential fall in the rate of profit as a theory of crises: twelve reasons to stick to it”.  In it, Carchedi carefully examines the 12 major arguments against Marx’s law of profitability and provides clear refutations of each, using both theoretical points and empirical evidence.  In summary, Carchedi concludes: “it is better to stick to the original Law. It works and it works well.”

My paper was called: “Marx’s law of the tendency of the rate of profit to fall and the theory of crises: does it fit the facts?”.  In it, I set out to show that there is plenty of empirical evidence to support Marx’s view that the rate of profit in a capitalist economy will tend to fall as the accumulation of capital takes place because the organic composition of capital will rise, as a rule.  The rate of profit will only rise if counteracting factors, like a faster rising rate of surplus value, come into play, to delay or curb the law for a while.  Moreover, the movement in the rate and mass of profit is a good leading indicator of whether a crisis or slump in production is about to happen.  I used empirical evidence from the US and UK economies to show this, as well as evidence provided by other scholars.

Although Critique has published our paper on the law and invited us to speak on it in the healthy spirit of debate, the editor of Critique, Hillel Ticktin, disagreed with both Bob Brenner and Carchedi and I on the relevance of Marx’s law of profitability to crises.  Ticktin’s arguments boiled down to the view of Michael Heinrich and the Monthly Review: namely Marx’s law was not a law in the proper sense, indeed there was no such thing as a ‘law of a tendency’, it was either one or the other, but not both.  

Anyway, the law of the tendency really included the counter-tendencies and thus made the law ‘indeterminate’ and thus impossible to use in a coherent way.  Moreover, it cannot be empirically verified, at least in statistical terms, because the data from official sources are inadequate and/or not collected to provide clear information on Marxist categories.  So what Brenner, Carchedi and I were doing was a waste of time.  Crises under capitalism clearly reoccur with regularity, but this is more to do with the momentum of the class struggle than with any movement in the rate of profit, which after all did not appear much on any analysis of crises by the great Marxist leaders after Marx.

Readers of this blog will know that all these criticisms of Marx’s law and its relevance to crises under capitalism are not new.  And they have been taken up in a myriad of posts here and in papers by others elsewhere.  Suffice it to say, that we ‘fundamentalists’ and ‘mono-causalists’ that support Marx’s law of profitability as the best explanation of crises under capitalism and specifically, the Great Recession, will continue to plough on in the belief that what we are doing does help to explain the contradiction in capitalist economies better than alternatives.

Critique plans to publish all the papers on its website, but you can find Carchedi’s paper here Carchedi London 11-12 april 2014 and mine Presentation to Critique conference 11 April 2014 here.

Sunday, April 13, 2014

Cliven Bundy: Where are the Militias when bankers drive folks from their homes?



by Richard Mellor
Afscme Local 444, retired

I do not claim to understand everything that is going on regarding the Nevada Rancher, Cliven Bundy, a Mormon father with 14 children who has been in a long and potentially violent dispute with the US government in the form of the Bureau of Land Management. However, I do draw certain conclusions from a general understanding of the players in this and the limited research I have done on my own.

The issue we are led to believe is the grazing of the rancher’s cattle on public lands managed by the BLM a practice that many ranchers have been doing for years. But I know for sure there is more to it than this. From what I understand, about 80% or so of the land in Nevada is public land. According to reports I’ve read, this occurred when the area was made a state during the Civil War.  The fees Ranchers pay go toward the maintenance of the land.

Bundy’s family has been on that land for some time, since the 1880’s as native people were driven from them or in to Bantustans to make room for capitalist expansion including railroads and ranching.  From accounts I have read, Mr. Bundy stopped paying grazing fees and has refused to apply for permits and was in a protracted court battle with the federal government over the issue. Mr. Bundy lost that battle and was twice ordered by the courts to pay the grazing fees. The public lands his cattle roam is about 10% larger than Las Vegas and he is said to have 900 head of cattle.

What has also been thrown in to the mix is the lawsuit filed by an environmentalist group against the BLM.  The area is home to an endangered species of tortoise and the group claims that Bundy’s cattle are destroying its habitat and the BLM is not protecting it. I see this simply as an attempt to add more pressure and weight behind the BLM’s case through the legal channels.

As we have all seen this week, things really heated up as the BLM started rounding up Bundy’s cattle and putting them in pens. The cattle would be sold at auction if MR. Bundy refused to pay the state the money owed.

The government operation included a massive force including armed officers, planes, helicopters and attack dogs.  Conservative bloggers, right wing militias and states rights activists turned up to support Mr. Bundy, many of them armed. Defending civil liberties individual rights, and fighting “corrupt” government and communism has been the rallying cry.  Many of the supporters have been armed including with assault rifles.  The conservative talk show hosts, Tea Baggers and right wing politicians have all come to Bundy’s defense. Things were so tense yesterday when an officer tasered Bundy’s son that it appeared there would be a real violent confrontation in Nevada.

Beefing up of law enforcement.
This show of force by the government comes as no surprise as the state security forces have been beefed up during and in the aftermath of the Occupy Movement.  The state responded with extreme violence against workers and students forcing the class nature of society more in to the open by fighting back against austerity and the increased assault of the 1% on our livelihoods. The state showed what the real nature of the police is, an armed force directed to protect capital and the 1%.  We will also be seeing more use of drones against workers and youth in the future.  Our unions were built in the face of the most extreme violence from the US capitalist class and their government.

However, the Nevada standoff was so tense yesterday that the government backed down and released the cattle back on to public land in the interests of safety.

But I have to ask what freedoms the Militias, Tea Baggers and state’s rights types are seeking here.  I do not believe this is about a tortoise or cattle or simply individual freedoms, depending on what individuals we are talking about of course.  Have we seen these people in front of homes defending the occupants from being thrown on to the street by sheriffs representing the bankers?  What about the savaging of wages and working conditions in auto and the public sector?  What about the closing of national parks, the privatization of the post office etc.?  Has Mr. Bundy been seen on the many picket lines not far from where he lives in Las Vegas as workers fight back against the gambling, entertainment and hotel industry bosses? I think it’s unlikely.

I came upon an interesting piece of information at the Daily Kos today that was somewhat revealing.  The author states:

“Two affiliates of the Koch-funded Americans for Prosperity are helping conservative media promote the cause of a Nevada rancher who has made violent threats against the federal government……Two of its local affiliates, Americans for Prosperity Nevada and Americans for Prosperity Colorado, have become active boosters of Bundy's actions.”

The author adds:
To appreciate how churning the media wurlitzer on this suddenly "newsworthy" controversy benefits the Kochs, one only has to go back to 2012 when the Utah legislature passed something called the Transfer of Public Lands Act, legislation vetted and inspired by none other than the American Legislative Exchange Council (ALEC), whose chief funders include--you guessed it--David and Charles Koch.

Just like we oppose the privatization of our public parks, education, transportation, the USPS and other vital services, (health care, transportation among others should be public) my feeling is that we should see this attempt by states’ rights elements, militia or others to transfer federal lands to state control as making it easier for mining and the energy industry and agribusiness to plunder our natural resources.  One right wing video I watched appealed for support on the basis that it’s difficult to be a small rancher or farmer on land owned by the federal government.  It’s difficult being a small rancher because the 1% and big business destroys the little guy.  In the cases of genuinely small operations, the taxpayer should definitely help them out. We must always separate the genuinely small/ community business from the big capitalists.

There are differences between sections of the capitalist class and often, sections of what we call the 1% or big capital portray themselves as saviors of the “little man” the small business owner. This appeals to some workers as well because, as Marx explained, workers at times move back and forth from the class of small capitalists and back to wage workers depending on the economic conditions at the time. Bundy is not a big landowner, a relatively small player in the world of business, and the super rich like the Koch brothers use these people for their own ends.

As a socialist, I too recognize that the state, or government as we more often refer to it, is not my government, it is not a “workers’” state but a capitalist state; a government that represents the interests of the capitalist class as a whole.  It is a democracy for the 1% like the old Greek slave state was a democracy for the slave owner only. This does not mean that there are not sectors of the capitalist class that are at odds with each other over how society should be governed in order for them to plunder its wealth. So I have no illusions that public employment or public services in a capitalist society are genuine worker controlled and owned operations, they are not.  But when so many of the right wing who tap in to the anger people feel against government and go on about individual rights and rally for freedom we have to ask what sort of freedom and for whom. My guess is that the beautiful natural resources and land that makes up these states will be better protected under federal control.  The 1% only see money when they look at land just like they do with everything else.

As one blogger writes about the land that it is:
“[O]wned by every American – all 300-plus million of us. It is a peculiar property right we each have to this commons, as we acquire it simply by dint of citizenship, and what we own is spectacular. The marvel of the federal public-lands system is that it exists at all. During the 19th century and into the early 20th, much of the land was leased and sold off in a frenzy of corrupt dealings. Railroads, corporations, land speculators, mining interests, and livestock barons gorged on the public domain, helped along by the spectacularly pliable General Land Office, which from 1812 until its closure in 1946 privatized more than one billion acres, roughly half the landmass of the nation. The corruption was such that by 1885, The New York Times’ editorial page had denounced the “land pirates” whose “fraud and force” had excluded the citizen settler—the farmer, the homesteader, the cowboy—from “enormous areas of public domain” and “robb[ed] him of the heritage to which he was entitled.”

And as that writer also points, look at how they treat women on welfare who might fiddle a little bit to get a little extra of this or that?  What would happen (if she was black) and she went and got a bunch of gang bangers to come down the welfare office and threaten violence?  We know what would happen.  I live close to a very depressed area to our north and poor people often come over the border and commit (mostly petty) crime, especially since the Great Recession. Some 19-year old black kid shot, (by mistake apparently) a bystander at a local transit station where I live. He got 79 years.  You should hear all the comments from some of the right-wingers about justice being served and all that. Of course, unemployment, racism, police harassment and lack of opportunity has nothing to do with it. That kid is gone for life.

Why should this owner of 1000 head of cattle be allowed to graze them of public land for free? One blogger explains:
 “He is NOT ENTITLED to access to this land. It doesn't belong to him.  In fact that land Belongs to ME and to every other citizen of the United States.  That's MY Land that his cows have been grazing on for 20 years and he OWES ME and the rest of the American People for it.”

I don’t know the financial straits Bundy is in, and, as I say above, the working class can and should invite the community business owner in to the struggle against the 1% as we are all exploited by them.  But when the blogger referenced above questions Bundy’s right to access that land. I tend to agree with him.

Saturday, April 12, 2014

The dysfunctional for profit US health care system

by Lisa Hane, RN, MSN, PHN

It is hardly news to anyone in the US that our health care delivery system is in crisis.  It is the most dysfunctional health care system in the advanced capitalist world.

This week, front page articles in both the Wall Street Journal and The New York Times showed yet again what happens when profits get mixed up with health care. Data released by the Centers for Medicare and Medicaid Services (CMS) showed that, “The top 1% of 825,000 individual medical providers accounted for 14% of the $77 billion in billing to the government.”

Further, “Medicare paid 344 doctors and other health care providers over $3 million each in 2012. Collectively the 1,000 highest paid Medicare doctors received collectively $3.05 billion in payments”. 

The current system has incentivized health care providers to over-treat patients, pad their bills, and wrongly prescribe medications in order to obtain these salaries. Pharmaceutical companies that manufacture many of the drugs used by these physicians receive hundreds of millions of Medicare dollars each year. A drug called Luncetis, used for the treatment of eye diseases costs $2,000 a shot. Payments to Genetech, the company that makes Lucentis,  accounted for about $1 billion dollars in government spending in 2012 according to the New York Times article.

While most individual doctors are practicing responsibly and not becoming super rich from their work, clearly there are some who are gaming the system and striving to emulate the investment bankers and the other 1% who are only interested in advancing their personal wealth at the expense of the rest of society. This must not continue.

Our health care system needs fundamental change. Sure, the implementation of the Patient Protection and Affordable Care Act also known as “Obama Care” has provided health insurance for many more people than had it previously, but in no way does it deal with the real problem.  Health insurance is not the answer.  Full access to quality health care is. People need the security of knowing that if they get sick or need some medical treatment, it is available to them. Health care should be a right, like public education. The Medicare report clearly shows that health care delivery based on profits for insurance companies, hospital corporations, drug companies and some greedy physicians cannot act in the best interest of people’s health.

We need a national health system available to all regardless of their health status, employment situation, age, or ability to pay, now!