Capitalism and Coronavirus

A collection of thoughts on capitalist society during the 2020 COVID-19 outbreak:

On Necessity

The coronavirus makes clear more than ever why America needs socialism.

  • Many people don’t have paid sick leave and can’t go without a paycheck, so they go to work sick with the virus, spreading it. Workers should own their workplaces so they can decide for themselves whether they get paid sick leave.
  • Businesses are closing, leaving workers to rot, with no income but plenty of bills to pay. People forced to go into work have to figure out how to pay for childcare, since schools are closed. Kids are hungry because they rely on school for meals. We need a Universal Basic Income.
  • Without health insurance, lots of people won’t get tested or treated because they can’t afford it. There will be more people infected. There will be many senseless, avoidable deaths. We need universal healthcare, medical care for all people.
  • The bold steps needed to address this crisis won’t be taken, even if the majority of Americans want it to be so, because our representatives serve the interests of wealthy and corporate funders. We need participatory democracy, where the people have decision-making power.

This virus shines a glaring, painful light at the stupidities of free market capitalism, which is at this very moment encouraging the spread of a deadly disease and spelling financial ruin for ordinary people.

The current crisis screams for the need to build a new world.

On Purity

Imagine a deadly virus (this one or far worse) in a truly free market society:

  • Many businesses (and perhaps schools, all private) choosing to stay open to make profits, spreading the contagion. No closure orders.
  • As other businesses choose to close, and workers everywhere refuse to work, paychecks and jobs vanish, with no government unemployment or stimulus checks to help. Aid from nonprofits and foundations, donations from individuals and businesses, is all a hopeless drop in the ocean relative to the need.
  • No bailouts and stimulus funds for businesses. Small and large companies alike collapsing — worsening unemployment. Monopolization increases faster.
  • Infected persons dying because they can’t afford testing, treatment, or healthcare coverage (think the U.S.) in general. Healthcare providers have to profit, there are no free lunches — there’s no government aid on its way. Restricted access to healthcare for citizens, through low income or job (benefit) loss, means a faster spread of the virus.
  • Would a government devoted to a fully free market society issue stay-at-home orders? If not, more people out and about, a wider spread.

A truly free market would make any pandemic a thousand times worse. A higher body count, a worse economic disaster.

On Distribution

Grocery stores are currently reminding us how slowly the law of supply-and-demand can function.

On Redistribution

In theory, seizing all wealth from the rich and redistributing it to the masses may be the only way to prevent societal collapse during a pandemic (whether this one or a far deadlier one).

80% of Americans possess less than 15% of the wealth in this country, just drastic inequality. If a pandemic leads to mass closings of workplaces and the eradication of jobs, the State must step in to support the people and subsidize incomes. Without this, people lose access to food, water, housing, everything, and disaster ensues. However, in such a situation, government revenues will fall — less individual and corporate income to tax, sales tax revenue dwindling as people buy less, and so on. It is conceivable that the State, during a plague lasting years, would eventually lack the funds it needs. Solutions like borrowing from other nations might prove impossible, if the pandemic is global and other nations are experiencing the same shortfalls. The only solution may be to tax the rich (and wealthy, non-essential corporations) out of existence, allowing the State to continue supporting people.

(This may only stave off disaster, however. There will be diminishing returns if taxes on essential companies and landlords are too low. State money would be given to people, who would give it to a businesses, which would only give small portions back to the State. The situation would likely then require appropriating most or even all of the revenue received from businesses that are still operating, and sending it back to the consumers.)

On Insanity

A pandemic causing people to lose their healthcare (via job or income loss)… Insane.

On Collapse

During the COVID-19 crisis, we’ve seen jokes about how prosperous corporations suddenly on the verge of bankruptcy really should have been more careful with their money — buying less avocado toast, for instance. Having funds set aside for emergencies, taking on less debt, etc. Then they wouldn’t have gone from prosperous to desperate after mere weeks of fewer customers.

But businesses keeping next to nothing in the bank is inherent to capitalism. This is not exclusively the case, as some firms do see the wisdom of keeping cash reserves for hard times and large corporations do grow rich enough and monopolize markets enough to focus on stockpiling cash, but it is a general trend of the system. In the frenzied competition of the market, keeping money stored away is generally a competitive disadvantage. Every extra dime must be poured back into the business to keep growing, keep gaining market share, keep displacing competitors. If you’re not injecting everything back into the business, you risk falling behind and being crushed by the firms that are.

“It can’t wait,” John Steinbeck wrote in The Grapes of Wrath. “It’ll die… When the monster stops growing, it dies. It can’t stay one size.”

The competition that pushes firms forward in ordinary times can be their downfall in times of economic crisis.

Good Morning, Revolution

We have explored in-depth what socialism is and how it works, but it is equally important to consider how to bring it about.

Well, there is a word that has stirred in the U.S., and roared to life throughout history. The great poet and socialist Langston Hughes penned in 1932:

Good morning Revolution:
You are the best friend
I ever had.
We gonna pal around together from now on.
Say, listen, Revolution:
You know the boss where I used to work,
The guy that gimme the air to cut expenses,
He wrote a long letter to the papers about you:
Said you was a trouble maker, a alien-enemy,
In other words a son-of-a-bitch.
He called up the police
And told ’em to watch out for a guy
Named Revolution

You see,
The boss knows you are my friend.
He sees us hanging out together
He knows we’re hungry and ragged,
And ain’t got a damn thing in this world –
And are gonna to do something about it.

The boss got all his needs, certainly,
Eats swell,
Owns a lotta houses,
Goes vacationin’,
Breaks strikes,
Runs politics, bribes police
Pays off congress
And struts all over earth –

But me, I ain’t never had enough to eat.
Me, I ain’t never been warm in winter.
Me, I ain’t never known security –
All my life, been livin’ hand to mouth
Hand to mouth.

Listen, Revolution,
We’re buddies, see –
Together,
We can take everything:
Factories, arsenals, houses, ships,
Railroads, forests, fields, orchards,
Bus lines, telegraphs, radios,
(Jesus! Raise hell with radios!)
Steel mills, coal mines, oil wells, gas,
All the tools of production.
(Great day in the morning!)
Everything –
And turn ’em over to the people who work.
Rule and run ’em for us people who work.

Boy! Them radios!
Broadcasting that very first morning to USSR:
Another member of the International Soviet’s done come
Greetings to the Socialist Soviet Republics
Hey you  rising workers everywhere greetings –
And we’ll sign it: Germany
Sign it: China
Sign it: Africa
Sign it: Italy
Sign it: America
Sign it with my one name: Worker
On that day when no one will be hungry, cold oppressed,
Anywhere in the world again.

That’s our job!

I been starvin’ too long
Ain’t you?

Let’s go, Revolution![1]

People don’t realize their power. They feel helpless in the face of injustice and miseries, not understanding the simple truth, that they have the power to take whatever they want. By joining with others, the people—the workers—can radically transform society whenever they please.

There are many tools in the toolbox of social change, all valuable at creating a better society (despite what anti-reformist puritans may say) but varying in effectiveness. Educate others. Harass the powerful in business and politics through petitions, messages, and calls. Vote for and aid socialistic policies and candidates. Run yourself. Put your own initiatives on ballots. Boycott businesses. Protest and march outside workplaces and representatives’ offices. Go on strike, refusing to return to work until your demands are met. Engage in acts of civil disobedience: sit in and occupy your workplace or a political chamber, block streets as the powerful try to head to work, and other illegal acts, facing down the risk of arrest or violence by police or bystanders. Orwell said, “One has got to be actively a Socialist, not merely sympathetic to Socialism, or one plays into the hands of our always-active enemies.”[2] Malala Yousafzai declared, “I am convinced Socialism is the only answer and I urge all comrades to take this struggle to a victorious conclusion. Only this will free us from the chains of bigotry and exploitation.”[3] The more allies that join the more effective these tactics become, and they have done incalculable good in our own country and around the globe, weakening or defeating occupation, white supremacy, patriarchy, starvation wages, and countless other evils.[4] Progress comes on the backs of the troublemakers.

Though violent revolutions (also in the toolbox) have seen freer, more democratic societies and significant system changes grow out of bloodshed—in our own country and elsewhere—a revolution doesn’t require violence. It may in fact be an insult to the power of the people. Nonviolent mass action (often termed a “revolution” if it grows large enough, though some want the word reserved for violent upheavals) is growing increasingly successful. When political scientists Eric Chenoweth and Maria Stephan examined violent and nonviolent revolutions between 1900 and 2006 they found that nonviolent campaigns were twice as likely to be successful. Since the 1940s the success rate of nonviolent efforts has jumped about 30%, while the success rate for violent efforts has fallen about 30%. The latter are more likely to result in unstable, anti-democratic regimes or bloody civil wars. The researchers found that zero campaigns failed once 3.5% of the population was involved (many won with far less). But only nonviolent revolutions reached this threshold—more people are willing to join a nonviolent revolt and more are physically able to join (children, the sick, the elderly, persons with disabilities).[5] Perhaps no one embodied all this better than Gandhi, who wrote:

My socialism was natural to me and not adopted from any books. It came out of my unshakable belief in non-violence. No man could be actively non-violent and not rise against social injustice, no matter where it occurred…

This socialism is as pure as crystal. It, therefore, requires crystal-like means to achieve it. Impure means result in an impure end. Hence the prince and the peasant will not be equalized by cutting off the prince’s head, nor can the process of cutting off equalize the employer and the employed… Therefore, only truthful, non-violent and pure-hearted socialists will be able to establish a socialistic society in India and the world…[6]

What would a nonviolent revolution that could achieve socialism look like? In short, skip class and work. Spend the day marching through the streets instead—and do not leave until your demands are met. Helen Keller said, “All you need to do to bring about this stupendous revolution is to straighten up and fold your arms.”[7] 3.5% of the U.S. population is a mass strike of 11 million people—and victory could probably be accomplished with fewer. Imagine a million people bringing D.C. to a standstill, with others paralyzing cities across the U.S. When workers come together they can shut down a street, a city, a state, or an entire nation. That’s how you win. Oscar Wilde wrote in The Soul of Man Under Socialism, “Disobedience, in the eyes of anyone who has read history, is man’s original virtue. It is through disobedience that progress has been made, through disobedience and through rebellion.”[8] No violence is necessary; you simply stop producing and bring society to a halt until power yields. True, there is always the risk of being expelled, fired, or arrested, beaten, or killed by the police or army (though they cannot easily get rid of millions of protesters, especially in freer societies). There is no revolution without danger. But prior generations (especially those of color) faced even greater dangers, and with fewer numbers secured lasting victories against our darkest and most oppressive systems. There is truly nothing the people cannot do, if only they unite and refuse to cooperate with power, from the Montgomery, Alabama, boycott that ended local segregated busing in 1956 to the protests that drove out Tunisia’s dictator in 2011.[9] At the time of this writing, in 2018, tens of thousands of West Virginia teachers went on strike, forcing every public school in the state to close, winning higher pay in nine days.[10] Then Arizona teachers, after nine days, won a 20% raise; Oklahoma teachers won the largest pay raise in state history in the same amount of time.[11] The strikes continued to spread. It’s these same proven tactics that can eradicate capitalism, and it is right to use them. Mark Twain said, “I am always on the side of the revolutionists, because there never was a revolution unless there were some oppressive and intolerable conditions against which to revolute.”[12] Langston Hughes wrote:

You could stop the
factory whistle blowing,
Stop the mine machinery
from going,
Stop the atom bombs
exploding,
Stop the battleships
from loading,
Stop the merchant
ships from sailing,
Stop the jail house keys
from turning
…You could
If you would[13]

Ordinary people are going to have to strike for direct democracy, universal healthcare, universal education, and guaranteed work or income. They are going to have to strike for worker ownership, occupying their workplaces and seats of political power. We will have to win a new legal right to equal ownership and power, to go alongside countless other workplace rights that have been won: minimum wage, workplace safety, anti-child labor, anti-discrimination in hiring, and more. This is the only freedom that disappears under socialism: the freedom to be a capitalist, exploiting and holding power over workers. More ethical rights often crush older ones. Kurt Vonnegut said capitalism was simply a set of “crimes against which no laws had been passed.”[14] The right of the worker to a minimum wage abolishes the right of the employer to pay him or her $1 per hour; the right of a person of color to be served at a restaurant ends the right of a white supremacist to deny him or her service; the right to be free crushes the right to own human beings. So will it be with the capitalist organization of the workplace. Victor Hugo warned the rich:

Tremble!…They who are hungry show their idle teeth… The shadow asks to become light. The damned discuss the elect. It is the people who are oncoming. I tell you it is Man who ascends. It is the end that is beginning. It is the red dawning on Catastrophe. Ah! This society is false. One day, a true society must come. Then there will be no more lords; there will be free, living men. There will be no more wealth, there will be an abundance for the poor. There will be no more masters, but there will be brothers. They that toil shall have. This is the future. No more prostration, no more abasement, no more ignorance, no more wealth, no more beasts of burden, no more courtiers—but LIGHT.[15]

Winning these demands is far from impossible. The seeds of American socialism have been long planted. Worker co-ops and direct democracy exist throughout the country. There are growing universal healthcare and tuition-abolition movements, rekindled by Bernie Sanders. One may be quite surprised to learn just how close the U.S. came to universal healthcare, universal early childhood education, UBI, and guaranteed work under Nixon and Carter, among others, after they felt some pressure from the people.[16] Elsewhere national direct democracy, free healthcare, and free college are taken for granted. UBI and the State as the employer of last resort have been tried and accomplished. Co-ops are more common, and workers in capitalist firms are gnawing at capitalist power from the inside—for example German unions fought for and won the right to have representatives on the boards of directors of large corporations.[17] Part of the reason why other countries are ahead of us in these respects is they have much stronger protest movements. In late 2016, India saw the largest strike in world history, with 150-180 million people participating.[18]

The thought of millions of Americans striking should not be inconceivable. Throughout its history the U.S. experienced strikes involving hundreds of thousands—even half a million—workers, many of which were victorious in the end.[19] Dr. King’s 1963 March on Washington for Jobs and Freedom and the anti-Vietnam War protest of November 1969 each had 250,000 in attendance. And protests have only grown. March-May 2006 saw the largest series of demonstrations in U.S. history, as 3-5 million Latinos, immigrants, and allies protested in 160 cities against anti-immigrant legislation.[20] That May Day, the “Day Without Immigrants” saw 1.5 million people refuse to go to work or school.[21] In January 2017, in perhaps America’s largest protest, 4 million people participated in the Women’s March in 600 cities.[22] Cities on every continent joined in. Indeed, international solidarity and coordination are growing. Six to 11 million people around the world protested the planned U.S. invasion of Iraq on February 15, 2003, the world’s largest single-day protest.[23] In October 2011, millions of people in nearly 1,000 cities in over 80 countries rose up to protest economic inequality and the corporate corruption of democracy. 10,000 people marched in New York (Occupy Wall Street), but some half-million protested in Madrid and 400,000 in Barcelona. In September 2014, 400,000 people rose up in New York City, and tens of thousands more in 150 nations worldwide, to push for global environmental protections. There are many more examples.

Human beings are uniting for sanity and justice across the globe. We may yet achieve what Helen Keller envisioned: “Let the workers form one great world-wide union, and let there be a globe-encircling revolt to gain for the workers true liberty and happiness.”[24]

 

Notes

[1] Hughes, “Good Morning Revolution,” 1932

[2] Orwell, “Why I Joined the Independent Labour Party”

[3] http://www.marxist.com/historic-32nd-congress-of-pakistani-imt-1.htm

[4] http://time.com/3741458/influential-protests/; https://www.bustle.com/articles/195826-7-peaceful-protests-from-history-that-made-a-real-tangible-difference; http://www.upworthy.com/7-times-in-us-history-when-people-protested-and-things-changed; http://darlingmagazine.org/5-times-peaceful-protests-made-difference-history/; https://www.vox.com/2016/4/15/11439140/verizon-cwa-strike-2016

[5] Shermer, The Moral Arc, 87-89; https://www.washingtonpost.com/news/worldviews/wp/2013/11/05/peaceful-protest-is-much-more-effective-than-violence-in-toppling-dictators/?utm_term=.28f6dfb17fe4

[6] Gandhi, India of My Dreams

[7] http://gos.sbc.edu/k/keller.html

[8] Wilde, The Soul of Man Under Socialism (1895)

[9] http://www.history.com/topics/black-history/montgomery-bus-boycott; http://www.independent.co.uk/news/world/middle-east/tunisia-tunis-arab-spring-north-africa-revolution-uprising-president-ben-ali-a8158256.html

[10] https://www.cnn.com/2018/02/26/health/west-virginia-map-school-closings-trnd/index.html; https://www.nytimes.com/2018/03/06/us/west-virginia-teachers-strike-deal.html

[11] https://www.cnn.com/2018/04/13/us/arizona-teachers-pay-raise-governor/index.html; http://abcnews.go.com/US/oklahoma-teachers-declare-victory-colorado-educators-walk-class/story?id=54499157

[12] Mark Twain, New York Tribune (April 15, 1906)

[13] Hughes, “If You Would”

[14] Vonnegut, God Bless You, Mr. Rosewater

[15] Hugo, “The Rich”

[16] https://www.vox.com/2014/8/13/5990657/basic-income-jobs-guarantee-child-care-flag-burning-btu-tax-balanced-budget; https://www.bostonglobe.com/opinion/2012/06/22/stockman/bvg57mguQxOVpZMmB1Mg2N/story.html

[17] Wright, Envisioning Real Utopias, 223

[18] https://www.jacobinmag.com/2016/10/indian-workers-general-strike

[19] https://www.vox.com/2016/4/15/11439140/verizon-cwa-strike-2016

[20] https://socialistworker.org/2013/05/14/confronting-anti-immigrant-bigotry

[21] https://www.democracynow.org/2006/5/2/over_1_5_million_march_for

[22] http://www.vox.com/2017/1/22/14350808/womens-marches-largest-demonstration-us-history-map

[23] https://www.huffingtonpost.com/entry/what-happened-to-the-antiwar-movement_us_5a860940e4b00bc49f424ecb

[24] Keller, “Menace of the Militarist Program”

The Case For Direct Democracy

Ultimately, “socialism” is the idea that power, not merely wealth, should be made “social”—spread out among the people. That is to say, socialism simply means more democracy. We have seen how worker cooperatives are more democratic structures than capitalist businesses, relying on representative democracy (elected, removable managers and executives) or direct democracy (all decisions made by all workers on a one-person one-vote basis), sometimes called pure democracy. On a similar note, the solution to our troubled political system is a more democratic structure. Under such a system, the people control their own destiny.

Jack London wrote that socialism’s

…logical foundation is economic; its moral foundation, “All men are born free and equal,” and its ultimate aim is pure democracy. By “all men are born free and equal” it means born free and with equal opportunities to earn by honest labor—mental or physical—a livelihood. By a pure democracy is meant a form of government in which the supreme power rests with and is exercised directly by the people instead of the present form, which is a republican form of democracy, in which the supreme power rests with the people, but is indirectly exercised by them, through representatives. Representatives may be corrupted, but how could the whole people be bribed?[1]

Imagine having a direct say in public policy: the ability, like Congress has now, to vote yes or no on proposed laws. Imagine heading to your voting place not every two or four years, but instead many times each year. Your vote would decide national policy. There is more than one reason for America’s abysmal voter turnout, but a large part of it is that people do not believe their vote will affect anything, will bring about meaningful change.[2] With politicians mostly representing the interests of the rich individuals and corporations that fund them, this attitude is understandable. Imagine how this could change if the people had real power, living in a society where the citizens controlled the State rather than the reverse? As London pointed out, it would be very difficult for special interests to influence policy. Citizens are not running for office. They cannot be bribed with campaign contributions, probably won’t be involved in secret meetings or backroom deals. Corruption on a scale that would be effective and remain secret would be impossible. This does not mean there wouldn’t be challenges—when a popular vote takes place the key for special interests is to attack information itself, misleading the public into voting a certain way. But there is no question that giving all voters lawmaking power would decimate corruption.

How would this work? Citizens would need direct initiative rights. Such rights allow people to place a proposed law on an upcoming ballot for people to vote on. Passionate individuals work together to draft legislation, file it with local officials, and gather the required number of signatures to put it on the ballot (no, this is not something a couple of jokers can do in an afternoon; it has to have a reasonable, serious level of support). After the vote takes place, and if the measure passes, government departments enact and enforce the measure as they do today after a legislature passes a law. “Imagine everybody governing!” exclaimed Victor Hugo, who had socialist leanings even if he never adopted the label. “Can you imagine a city governed by the men who built it? They are the team, not the coachman.”[3] And not just one’s city, of course, but one’s state and nation—people’s legislation and the people’s say at every level.

This is a radical change. Socialism would take decision-making power away from city councils, state legislatures, and the U.S. Congress and give it to constituents, ending these institutions as we know them. Rather than electing people to vote on issues for us, we could elect or approve people to enact and enforce the decisions we make: the heads of government departments. Today the president selects a secretary of education, homeland security, transportation, and so on, as well as the heads of the CIA, FBI, and other agencies, and Congress approves them. Then they take congressional legislation and make it a reality. Tomorrow the people will either elect candidates to these positions or take over the traditional role of Congress and approve or disapprove the president’s selections. Those directly responsible for carrying out the people’s will should be answerable to the people, just as presidents and representatives are today. (In contrast to today, candidates, from multiple parties with equal ballot and debate access, will either enjoy publicly financed elections or rely on small donations from individuals—co-ops and organizations should not be able to give, to avoid quid pro quo politics. A $100 cap for each adult leaves $25 billion for candidates to compete for.)

Such a proposal may cause consternation. Arguments about tradition will sound: the U.S. was founded as a representative democracy so we mustn’t change it. Well, systems, laws, and practices can always be improved, and typically are. The U.S. scrapped its first constitution, the Articles of Confederation, after seven years because its designed structure was flawed and ineffective. The 12th Amendment got rid of a system where the losing opponent in presidential races became vice president. In 1913, we finally let the American people directly elect senators. The 22nd Amendment created presidential term limits. Socialists are interested in positive change, not tradition. Which helps explain why American socialists were at the forefront of every major justice campaign—abolition and civil rights, women’s rights, labor rights, the anti-war movements, etc.[4] The U.S. has a rich socialist history, from socialists writing the “Pledge of Allegiance” to founding the Republican Party![5]

One major objection is that it’s a bad idea to give the people so much power, as they could vote for awful things, with a mere 51% majority ruling over and oppressing the minority (“mob rule,” “tyranny of the majority”). That’s what the founding fathers knew, so best to trust them. It’s true that most of the founders detested democracy, in fact because they saw it as a threat to their riches and power.[6] (The same sentiments were expressed by the powerful later on, such as in the Trilateral Commission’s 1975 Crisis of Democracy report.[7]) So they made sure ordinary voters could not elect justices (we still do not), nor directly elect the president (we still do not, as the Electoral College persists), nor directly elect senators. The people only directly elected members of the House, yet only (white, male) property owners were allowed to vote, further disenfranchising the poor and keeping power in the hands of the better off. Only in 1856 did the last state, North Carolina, do away with property requirements to vote.[8] Yet somehow people who gripe about majority rule don’t realize that’s how it works right now. While sometimes the bar is higher, a simple majority decides the fate of most bills in Congress. As little as 51% of congresspersons rule from issue to issue. A majority carries the day in city councils, state legislatures, Congress, and every election except the presidential election from time to time. Direct democracy simply alters which majority makes decisions, giving ordinary people a direct say in the decisions that affect them. “Fear of the mob is a superstitious fear,” George Orwell wrote. “It is based on the idea that there is some mysterious, fundamental difference between rich and poor… The average millionaire is only the average dishwasher dressed in a new suit.”[9] Yes, the majority has the power to make awful decisions—in the precise same way Congress and other bodies do now. But you nevertheless had a say in the matter, whether trying to stop a bad idea or joining others in making a mistake. As with worker cooperatives, it is better that the many fail together by their own hand than be destroyed by the few from above.

Additionally, there are limits to the awful things that a popular will could enact. Yes, mistakes will be made. That’s democracy, whether direct or representative; it’s messy. But remember, checks and balances still exist under this system. It’s true, there is one fewer; today a bill must pass both House and Senate to see the light of day, while direct democracy replaces them with one chamber, the people. (There are countries, such as Denmark, Luxemburg, Sweden, Finland, Israel, and New Zealand, which only have one house, a unicameral congress.[10]) But there would still be a president to veto legislation. There would remain a Supreme Court to declare laws unconstitutional. Only a supermajority of the people could change the Constitution, as it is with Congress today (state legislatures holding a constitutional convention would not be possible, as state legislatures would be replaced by a state’s populace). Fears about the prejudiced majority oppressing smaller groups of people can be put aside. It’s possible, but no more likely than it is now, because checks and balances will be preserved. And it goes without saying that direct democracy gives the people power to end injustices too. As Arthur Miller, best known for Death of a Salesman and The Crucible, said, “Socialism was reason.”[11]

The most sensible concern is how direct democracy can be structured to run well. Much legislation today is very long and highly complex. Bills are introduced by politicians and go through committees, where representatives of different political views research, discuss, and modify them. They go to the House or Senate floor for debate and more changes and amendments before the vote. With direct democracy, aren’t we sacrificing a crucially important vetting and compromise process? Are ordinary people who use initiative rights really smart enough and experienced enough to create laws? Won’t some laws have to be so complex, and so full of unintelligible legislative jargon, that a typical American voter would be unable to make an educated decision on it? With many bills being hundreds of pages or over a thousand, will not the length alone dissuade people from voting or encourage voting without reading through the details?

While a “vetting and compromise process” is valuable in theory, in practice all it means is total gridlock and the death of the bill. Only 1-5% of all the many thousands of bills introduced under each Congress become law.[12] Almost all of them die in committee, never making it to the debate floor.[13] This is not because they are all bad bills, but because the parties don’t agree on anything. Americans are tired of such inaction, and direct democracy is the cure. Some may say why not keep Congress, let it craft laws, and require a popular vote to pass (a referendum democracy). While this, whether or not combined with initiative rights, would be far better than a representative system, it would nevertheless 1) still allow special interests to infect legislation, which the populace would likely remain unaware of when voting and 2) would require committees and compromise to be at all meaningful (otherwise it’s just groups of similar thinkers putting what laws they like before the people, i.e. the initiative process), resulting in the usual gridlock. But direct democracy in fact has its own vetting mechanisms. If an initiative petition cannot garner enough support, it dies. If the question makes it to the ballot and is not quite what most people want, it will fail. Vetting lies in the discussion and debate surrounding proposed legislation before the vote, as citizens of different opinions study it, weigh it, and try to convince others to vote this way or that.

The rest of the questions, concerning the competencies of the people getting questions on the ballot and the complexities of legislation, are not major concerns when we study deeper how the initiative process actually functions. Because filing the legal paperwork, gathering enough petition signatures, and getting out the vote is not an easy task, it is usually undertaken by serious organizations: political advocacy groups, grassroots organizations, non-profits, and so on, which are typically made up of or are well-connected to lawyers and the politically experienced—people who are just as capable of designing legislation as politicians in Washington. Next, the question that goes before voters is not usually the full text of proposed legislation, but rather a summary in plain language created by public officials.[14] The full text is of course publicly available, online and elsewhere (caps on legislation length is in the realm of the possible too). While it is true that many voters will not read the full bill, the summary must accurately describe it. This functions just fine in the real world.

The United States already uses initiative rights and direct democracy to pass or reject legislation, at the city and state levels. It is legal in twenty-four states and Washington, D.C.[15] (Some, however, use indirect initiatives, which force a legislature to vote on citizen-crafted bills.) In the November 2016 election, 150 measures were on ballots throughout these states. California, Nevada, and Massachusetts voters legalized recreational marijuana use; Arizona, Colorado, Maine, and Washington raised their minimum wages; Nebraska restored the death penalty and Oklahoma made it harder to get rid of; Colorado legalized medically assisted suicide; California, Washington, and Nevada tightened gun laws. Voters in Arizona rejected recreational marijuana legalization; Maine shot down stricter gun control; California declined to abolish its death penalty; Oregon, Washington, Colorado, Missouri, and North Dakota rejected tax increases.[16] You won’t always get what you want. That’s democracy. But you will, no matter your beliefs, have a voice. Things will get done. No politicians gridlocked in committee. No representatives on the voting floor following the whims of their biggest donors. Just ordinary people creating real change for themselves, no representatives needed. “I’m a socialist,” one of H.G. Wells’ characters from In the Days of the Comet said. “I don’t think this world was made for a small minority to dance on the faces of every one else.”[17] The Canadian province of British Columbia and all German states also enjoy initiative rights.[18]

All this demonstrates, you’ll notice, that direct democracy works on a large scale. California is the most populous state in the nation, with nearly 40 million people in 2017. Florida, with nearly 21 million people, is up toward the top too. State direct democracy works well, and has since 1898, when South Dakota became the first state to adopt the initiative process.[19] A wide range of U.S. cities use it as well, and have since the town halls of colonial times. Direct democracy has existed in local government throughout human history, from the city-state of Athens, Greece, in the 5th century B.C. to Porto Alegre, Brazil, today.[20] Interestingly, since 1989, Porto Alegre, a city of over 1.5 million people, has allowed participatory budgeting. Citizens participate in the design of the annual city budget, and everyone has the right to vote to approve or strike down the finished product. Since this democratic idea, pushed forward by socialists, was enacted, funds have shifted dramatically to poorer, high-need areas of the city. The process is marked by transparency and lack of corruption.[21]

There are in fact countries that use pure democracy. Switzerland, a nation of eight million people, has had an initiative process at the federal level since 1891. Since then twenty-two initiatives have won out of over 200 proposals. The country also has a parliament that passes laws; it’s therefore called a semi-direct democracy (the people, however, can veto legislation parliament passes through the referendum process). Popular votes take place up to four times annually. In 2016, the populace rejected a law to give each citizen a guaranteed income. Changes to their constitution require majority support from the people and majority support from the cantons (states).[22] While the Swiss majority has at times passed prejudiced, oppressive laws, the Human Freedom Index, published by conservative and libertarian institutes, nevertheless ranks it as the freest nation in the world.[23] The Philippines and the European Union likewise have initiative rights.[24] There is no reason direct democracy cannot work at the national level. (If we were to consider the referendum process, in which legislatures craft laws and once every blue moon the people vote on them, we would have a very long list of participating nations, including some of the most populous in the world, such as Brazil, with 209 million people, and Bangladesh, with 165 million.[25])

Pure democracy is not a perfect system. Yet it gives the many the ability to address the problems we’ve explored elsewhere: to give workers ownership, to protect the planet, to reject war, to guarantee the rights and services people need, and so on. As Mark Twain once asked, “Why is it right that there is not a fairer division of the spoil all around? Because laws and constitutions have ordered otherwise. Then it follows that laws and constitutions should change around and say there shall be a more nearly equal division.”[26] This does not mean they will (the majority may vote for capitalism!), but the mechanisms make it possible. Changing hearts and minds so the system can be used to create a fully socialist society will be just as important.

The idea of broadening democracy raises an important question: how far should we go? If “power to the people” is the goal, what about electing Supreme Court justices and federal judges? Should we abolish the Electoral College and elect a president by popular vote? Give the people recall rights, which allow a supermajority to remove officials, from sheriffs to the president, from office? The answers will depend on how much we can empower the common person while maintaining effective checks and balances. The country’s hundreds of top judges and the nine justices today serve for life. Perhaps the people rather than representatives could approve them; perhaps they could be elected—but certainly not more than once, as we do not want them thinking about their next election when making rulings, and probably not for a short term, as there is value in having one branch, one check, that doesn’t change with the winds. The Electoral College is a vestige of slavery, and there is no explanation as to why the president should not be elected by popular vote (like every other elected official in the nation) that doesn’t collapse under the slightest weight of critical thinking.[27] Recall rights would be a fine way to keep public officials in line, but should perhaps only apply to some (department and agency heads, sheriffs) but not others (the president, justices). There are many ideas to explore and solutions to craft as we build socialism.

 

Notes

[1] London, “What Socialism Is”

[2] https://www.vox.com/policy-and-politics/2016/11/7/13536198/election-day-americans-vote; http://www.pewresearch.org/fact-tank/2016/03/04/half-of-those-who-arent-learning-about-the-election-feel-their-vote-doesnt-matter/

[3] Hugo, “Letter to the Poor”

[4] https://gsgriffin.com/2017/09/25/a-brief-history-of-american-socialism/

[5] https://gsgriffin.com/2017/09/25/a-brief-history-of-american-socialism/

[6] https://gsgriffin.com/2017/06/30/how-the-founding-fathers-protecting-their-riches-and-power/

[7] https://archive.org/stream/TheCrisisOfDemocracy-TrilateralCommission-1975/crisis_of_democracy_djvu.txt. Indeed, the Trilateral Commission’s 1975 Crisis of Democracy report warned that “some of the problems of governance in the United States today stem from an excess of democracy… Needed, instead, is a greater degree of moderation in democracy.” “Expertise, seniority, experience, and special talents,” the authors feel, should “override the claims of democracy” in many situations, claims that were growing louder during “the surge of the 1960s”; the “arenas where democratic procedures are appropriate are…limited,” so it would be unwise to, for example, have “a university where teaching appointments are subject to approval by students,” and presumably the same for citizen approval of national policy. Further, “apathy and noninvolvement” among some groups has “enabled democracy to function effectively,” as when “marginal social groups, as in the case of the blacks…[become] full participants” there is a “danger of overloading the political system with demands which extend its functions and undermine its authority…” Indeed, “Democracy is more of a threat to itself in the United States than it is in either Europe or Japan where there still exist residual inheritances of traditional and aristocratic values.” In sum, full and actual participation by the people leads to claims and demands, whether civil rights or universal healthcare, that can override the authority of the Establishment, the privileged and powerful. Democracy should therefore be checked.

[8] https://books.google.com/books?id=JHawgM-WnlUC&pg=PA218&lpg=PA218&dq=1856+north+carolina+last+state+to+remove+property+ownership&source=bl&ots=sgfKjGzhet&sig=y8ALKjDhkAr2LNvcO6cACsvzRaQ&hl=en&sa=X&ved=0ahUKEwi9_-rC3KXXAhUBYCYKHTxxBiEQ6AEIUzAI#v=onepage&q=1856%20north%20carolina%20last%20state%20to%20remove%20property%20ownership&f=false; https://gsgriffin.com/2017/06/30/how-the-founding-fathers-protecting-their-riches-and-power/

[9] Orwell, “Down and Out in Paris and London”

[10] https://www.britannica.com/topic/constitutional-law/Unicameral-and-bicameral-legislatures#ref384652

[11] Arthur Miller, Timebends: A Life, 1987

[12] https://www.govtrack.us/congress/bills/statistics

[13] https://sunlightfoundation.com/2014/01/16/congress-in-2013/#gplus

[14] The process varies by state. See Missouri’s process as an example: https://www.sos.mo.gov/CMSImages/Elections/Petitions/MakeYourVoiceHeard2018Cycle.pdf

[15] https://ballotpedia.org/States_with_initiative_or_referendum

[16] https://www.pbs.org/newshour/politics/ballot-initiatives-passed-marijuana-minimum-wage

[17] H.G. Wells, In the Days of the Comet (1906)

[18] https://en.wikipedia.org/wiki/Initiative

[19] http://www.ncsl.org/research/elections-and-campaigns/initiative-referendum-and-recall-overview.aspx

[20] https://www.ancient.eu/Athenian_Democracy/

[21] Wright, Envisioning Real Utopias, 155-160

[22] https://www.weforum.org/agenda/2017/07/switzerland-direct-democracy-explained/

[23] http://nationalinterest.org/feature/switzerland-the-ultimate-democracy-11219?page=2; https://object.cato.org/sites/cato.org/files/human-freedom-index-files/2017-human-freedom-index-2.pdf;

[24] https://en.wikipedia.org/wiki/Initiative

[25] https://en.wikipedia.org/wiki/Referendums_by_country#United_States

[26] https://fair.org/media-beat-column/the-twain-that-most-americans-never-meet/

[27] https://gsgriffin.com/2016/12/09/the-electoral-college-how-racist-white-slave-owners-made-your-vote-worthless/; https://gsgriffin.com/2016/12/09/ending-the-electoral-college-wont-lead-to-city-rule-or-dictatorship/

Guaranteed Income vs. Guaranteed Work

Living in a socialist society would mean awakening each workday and heading to your worker cooperative, while regularly visiting your voting place to help decide local and national policies. But it is more than that—and has to be. The State has a few important services to provide if the socialist dream of prosperity and dignity for all people is to be achieved.

What if, for instance, you cannot find a job? Just because all workplaces are democratic and share profits does not mean there will always be enough jobs when and where you need one. There is no room in a socialist nation for unemployment, poverty, homelessness, and so on, and thus some mechanism is needed to guarantee that we only see these horrors in history books. Every person, regardless of who you are or what work you do, should make enough to have a comfortable life—which requires a high minimum wage (required by law but inherent in worker ownership) and guaranteed access to an income. There are two paths forward to eradicating the horrors, stated succinctly by Dr. King: “We must create full employment, or we must create incomes.”[1] Guaranteed work or a guaranteed income. Either would be adequate, but there are positives and negatives of each to weigh.

Let’s first consider a guaranteed income, or universal basic income (UBI). All UBI entails is using tax revenue to send a regular check to each citizen, a simple redistribution of wealth to eradicate poverty and provide security during times of unemployment or underemployment. Its simplicity is a major advantage over guaranteed work.

UBI has been around for a while in various forms. Alaska has given $1,000-$2,000 a year to every resident without condition since 1982.[2] Hawaii may follow suit soon.[3] The Eastern Band of the Cherokee Nation launched its own UBI in 1996, and today gives $10,000 a year to each of its members, which has helped reduce behavioral problems and crime.[4] Iran from 2010 to 2016 had the world’s first national UBI, giving each family the equivalent of $16,300 a year.[5] For one year, 2011, Kuwait gave $3,500 to each citizen.[6] In 2017, Macau, a region of China, began giving over $1,100 a year to each permanent resident.[7]

Trials in some of India’s villages that began in 2011 show huge success in improving children’s education, access to food and healthcare, and the total number of new business startups.[8] Other past small-scale experiments were conducted in the U.S., Canada, Brazil, Namibia, and elsewhere. Models range from everyone getting the same amount to poorer recipients getting more while richer ones less (which even some conservatives support in the form of the Earned Income Tax Credit or even a negative income tax[9]). Studies indicate that when people have this financial security they spend more time taking care of family, more time focusing on education, and are able to win higher raises at work because they have a more serious option to leave, leverage they did not have before.[10] Contrary to myth, giving poor people cash tends to have no impact on or reduce alcohol and tobacco consumption, likely because paying for healthcare, education, and so forth is suddenly an option and people want to direct their resources there.[11] In 2017, experiments with UBI launched or were preparing to launch in various places in Finland, Canada, Kenya, Uganda, the Netherlands, Scotland, Spain, and the U.S.[12]

“A guaranteed annual income could be done for about twenty billion dollars a year,” Dr. King estimated in 1967. “If our nation can spend thirty-five billion dollars a year to fight an unjust, evil war in Vietnam, and twenty billion dollars to put a man on the moon, it can spend billions of dollars to put God’s children on their own two feet right here on earth.”[13] The question of priorities in spending is as relevant as ever. The cost of American UBI would depend on similar factors: how much would be guaranteed, if everyone would receive it (if the rich do not then it’s not technically UBI, but no matter), and so on. $10,000 a year for all 240 million U.S. adults is $2.4 trillion, $15,000 a year for the poorest 50 million people is $750 billion, etc. Of course, the net cost would be lower, as giving tens of millions or hundreds of millions of people greater purchasing power would put the economy into overdrive—that money would be spent, enriching co-ops and thus increasing State tax revenues (this is also why economic research overwhelming shows higher minimum wages do not lead to higher unemployment or prices; extra money is spent at businesses, boosting their profits, balancing the system out[14]). “People must be made consumers by one method or the other,” King said when discussing guaranteed income or work.[15] One study estimated giving each American adult $1,000 a month would grow the economy 12-13% over eight years, or by $2.5 trillion, if employment remained steady.[16] It is important to keep the cyclical nature of this system in mind while considering costs. UBI is expensive, but it also increases tax revenue.

Now, major concern exists that UBI will cause people to stop working, hurting the economy and leaving the worker-owners stuck supporting the easy lifestyle of the lazy. As we have seen, at some point in the human future automation will essentially make labor a thing of the past, highlighting the need for both collective ownership of the machines and State-provided incomes. So it seems obvious that at some point we will have to give up our agitation over people who do not work (rather, poor or middle income people who do not work; critics seem less concerned about the wealthy types who enjoy work-free lives). We won’t be able to absurdly base people’s value on how many hours they work or what sort of work they do. Everyone will spend their days as they see fit, some choosing to design skyscrapers (even though machines could do it for them) because they enjoy it, others doing nothing all day because they enjoy that more. But until machines can serve our every need, the point is a valid one, as some people will indeed prefer not to have a job, while supported by the labor of others. (On the positive side, there would be decreased competition for jobs for those seeking them.) This wouldn’t bother all worker-owners, but it would be reality. In five experiments on guaranteed income done in the U.S. and Canada, the decrease in the labor participation rate ranged from zero to 30%.[17] However, most studies show no effect or only a small decline.[18] Donald Rumsfeld and Dick Cheney ran UBI experiments in a few cities for President Nixon, and found work rates remained steady.[19] A study of Alaska found employment levels weren’t affected. A study of Iran’s UBI revealed some people worked a bit less, but some actually worked more.[20] India’s basic income grants led to more labor, as did Uganda’s.[21] Namibia saw no negative effects on labor participation.[22] Naturally, the decline depends on how much is received, but it is predictable that UBI will mean some people will choose not to work. Importantly, with so much to do to rebuild and maintain our society, is UBI yet wholly practical? Will enough citizens volunteer to participate in all the unpleasant tasks that make a society function, such as repaving roads or waste disposal, if a high income is guaranteed? Would necessary tasks remain undone because Americans would want to pursue other things? These nagging questions will spur some to throw out the whole idea, insist the monthly amount must be low enough to force people to get jobs, or propose a higher UBI for people willing to do unpleasant work. All told, UBI would have to be implemented strategically, perhaps beginning at a level that eradicates poverty and slowly increasing as humanity approaches the point where machines can take care of all undesirable duties.

Guaranteed work is a more complex system, but avoids the concerns associated with lower labor participation. In fact, there would be a job for all. “If Government in our present clumsy fashion must go on,” Ralph Waldo Emerson said in 1843, “could it not assume the charge of providing each citizen, on his coming of age, with a pair of acres, to enable him to get his bread honestly?”[23] In a society offering guaranteed work, federal tax revenue could be transferred to municipalities to create salaries for unemployed or underemployed people. City governments would use the funds to launch public work projects to improve their communities (what projects would be a local democratic decision, of course). So if a city has 50,000 people looking for work at the start of the year, it might receive $2 billion, to offer a $40,000 salary to each person. If the U.S. had 8 million unemployed, it would cost $320 billion to employ them—half our modern military budget. Prioritization is easy enough. Dr. King said, “If America does not use her vast resources of wealth to end poverty and make it possible for all of God’s children to have the basic necessities of life, she too will go to hell.”[24] As with UBI, however, broadening purchasing power will reduce the net cost through increased tax revenues.

Workers can be hired to rebuild our crumbling inner cities, install solar panels on homes, plant trees, tutor struggling students, spend time with neglected seniors—literally any task that betters society in some way. Because not all positive tasks require physical labor, the program would be inclusive of many persons with disabilities or even seniors who want to work (though obviously not intended to replace social security or disability insurance). Cities will need more funds than just those for salaries, however, sums dependent on the type of project. Some projects will be relatively cheap, like cleaning trash off the streets, others more expensive, like renovating a school. Extra funds could nevertheless be fixed to a city’s unemployment level. Using their allotted monies, cities could contract with local co-ops to supply equipment and raw materials for necessary ventures. Public workers would also receive help securing employment at a cooperative, where higher incomes, democracy, and ownership can be enjoyed, so that the public sector doesn’t continually grow. Rather than shrink the private sector, however, guaranteed work programs can actually expand it—fewer unemployed persons means more spenders, benefiting businesses and allowing them to expand.[25]

Co-ops could also receive federal funds, allowing them to take on more worker-owners. This needn’t be a permanent relationship. The State could fund a position for a year, giving a co-op time to absorb a new member. Cooperatives would get another worker, and thus greater productivity and more profits, for nothing, in return for guaranteeing the worker a permanent job and ownership after the year ended. Co-ops could further receive government contracts to do certain projects, as businesses do today, with increased employment stipulations. Alternatively, cities could organize unemployed persons into new cooperatives, helping fund the endeavor during the first few years, until it became self-sustaining (whether for-profit or nonprofit). If there was a need for greater production in a certain sector, from agriculture to social work, that need could be met with new co-ops.[26]

There is much precedent for guaranteed work. Generally speaking, employment by the State is something we take for granted. Critics of paying citizens to work often have no qualms over paying citizens to be soldiers or police officers. If one can be called necessary for protection, the other can be called necessary for poverty’s demise. Local governments across the U.S. employ 14.1 million people, over half of them in education, the rest in healthcare, fire and policing, financing and administration, transportation, library services, utilities, environment and recreation—and public works.[27] (States employ another 5 million, and the federal government employs over 2.5 million civilians and over 2 million active and reserved military personnel.[28]) More specifically, during the Great Depression, President Roosevelt’s Works Progress Administration, Civil Works Administration, and Civilian Conservation Corps hired some 15.5 million people to build roads, bridges, schools, hospitals, museums, and zoos; to garden, plant trees, fight fires, reseed land, save wildlife, and sew; to undertake art, music, drama, education, writing, and literacy projects. While not without challenges, public works saved many families from hunger, strengthened the consumer class and thus the economy, and beautified the country.[29] Roosevelt actually included “the right to a useful and remunerative job” in his 1944 Second Bill of Rights.[30] Similar federal initiatives have occurred since, such as the Comprehensive Employment and Training Act of the 1970s, which employed 750,000 people by 1978.[31] (In countless other programs, like the Public Works Administration of the 1930s, the U.S. government indirectly created jobs by paying businesses to tackle huge projects. Construction of the Interstate Highway System in the 1950s and 60s entailed the federal government funding the states, which either expanded their public workforces or contracted with private companies.) Today, cities like Reno, Albuquerque, Tempe, Fort Worth, Chicago, Denver, Portland, and Los Angeles offer jobs to the homeless to help them out of the social pit. Cities elsewhere in the world do the same.[32]

Governments around the world run programs similar to our New Deal. India is pouring billions into the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which gives, or rather tries to give, residents of a few poor, rural states one hundred days of guaranteed work annually.[33] 50 million households, 170 million people, are involved—the largest public works program in world history.[34] Other nations, especially in Europe, have made the government the employer of last resort at various times.[35] So have South Africa and Argentina. Argentina’s Jefes de Hogar program paid the heads of household with children, persons with disabilities, or pregnant women to do community service, construction, and maintenance work. 2 million Argentinians, 5% of the population, were employed at its height.[36] South Africa’s Expanded Public Works Program includes government jobs in infrastructure, tourism, environment, early childhood education, and more.[37] As in the U.S., local, state, and national governments around the world may not offer guaranteed work but do offer public works jobs. These efforts and countless others have dealt serious blows to unemployment and poverty. Wages even rise in the private sector, because it must compete with the public sector for workers. “We must develop a federal program of public works, retraining, and jobs for all,” Dr. King said, “so that none, white or black, will have cause to feel threatened.”[38]

One criticism of guaranteed work is that unemployment dropping too low will herald inflation. It is said if unemployment is eliminated then businesses will have to compete for fewer workers, driving wages up, which will drive up the cost of everything else to compensate, which will lead to higher wage demands, all in an unending upward wage-price spiral. This is not actually as grave a concern as one might imagine. First, the correlation between unemployment and inflation is not terribly strong: sometimes they move in opposite directions, sometimes they move together.[39] Mainstream economists are increasingly acknowledging the relationship is weak or nonexistent. It’s easy to see why more workers doesn’t necessarily mean higher prices. Increased profits from more consumers spending more money help firms absorb higher wage costs without raising prices. Again, even drastic increases in the minimum wage create only tiny increases in prices, making the wage increase plainly worth it.[40] To stay competitive there is every incentive for firms to expand production, and thus sales, or take a bite out of profits rather than raise prices on consumers. Many economists have argued persuasively that, contrary to William Phillips, Milton Friedman, and others, full employment can be achieved without inflation.[41]

Second, if upward wage pressure became so great it could not be absorbed, and prices rose, there is reason to predict this would be a brief phase, not an eternal spiral. It is not likely the upward pressure on wages would last. Say the public worker salary was set at $38,000 a year (we’ll say that is also the minimum wage). If you worked for a capitalist firm making $38,000, you would likely be able to convince the capitalist to give you a raise—otherwise you could leave, guaranteed to make the same in the public sector. You win a raise and are then making $40,000. But if you continue pushing over time, the potential loss due to ultimate failure (being let go, replaced by someone cheaper, someone from the public sector wanting to make more) rises—it’s at $2,000 now and will only get bigger.[42] So there is a disincentive that keeps higher wage demands down. The capitalist may get rid of you and you’ll be worse off financially than you were. A guaranteed job gives people more power and leverage, but not so much to create an inflationary disaster; with limits on the upward pressure of wages come limits on price increases, which tend to be tiny proportions of income increases anyway. At a cooperative, as raises are determined democratically, the majority would have to repeatedly vote to both give raises to all and to raise prices on consumers—this seems just as unlikely, perhaps more so, as a single capitalist continuously doing this.

Third, more production of goods and services through the public sector, like increased purchasing power, increases supply and thus pulls price down.[43] Fourth, various effective tactics the State uses to control inflation will still exist under socialism.[44] In practice, at least regarding partial guaranteed employment and public works ventures, skyrocketing inflation is a nonissue. The Reserve Bank of India found that the MGNREGA program did not raise food prices.[45] We know that Argentina’s inflation was extremely high in 2002, when its works program began, but declined and remained relatively low past 2007, when the program ended, until 2013.[46] South Africa’s ongoing program began in 2004; inflation grew by over 10% by 2009, during economic crisis, but then fell and remained low through 2018.[47] The four points above also answer concerns about UBI and inflation. Further, studies of Alaska, Kuwait, Lebanon, Mexico, India, and African nations have at least shown that a small UBI does not cause inflation.[48]

Whether UBI, guaranteed work, or a combination of both (guaranteed work followed by UBI, for example, so no one is stuck doing pointless work for a city while co-op members get rich off machines that can do all tasks) is implemented, one of these strategies will be necessary as a safety net for those struggling to find a job. With it we can eradicate need and want forever. “Overcoming poverty is not a task of charity, it is an act of justice,” Nelson Mandela said. “Like Slavery and Apartheid, poverty is not natural. It is man-made and it can be overcome and eradicated by the actions of human beings.”[49] Either system would have other significant effects on society, too, such as replacing many older forms of welfare, freeing people from the fear of quitting a job they do not enjoy, giving people greater ability to strike—a tactic that may not entirely disappear with worker ownership, as some worker-owners may be so opposed to a majority decision they walk out—and more.[50]

 

Notes

[1] Martin Luther King, “Where Do We Go From Here?” (speech, 11th Annual Southern Christian Leadership Conference Convention, Atlanta, GA, August 16, 1967).

[2] https://motherboard.vice.com/en_us/article/jp5wdb/only-state-free-money-alaska

[3] https://www.vox.com/policy-and-politics/2017/6/15/15806870/hawaii-universal-basic-income

[4] http://edition.cnn.com/2015/03/01/opinion/sutter-basic-income/

[5] https://www.weforum.org/agenda/2017/05/iran-introduced-a-basic-income-scheme-and-something-strange-happened

[6] http://basicincome.org/news/2011/05/kuwait-a-temporary-partial-basic-income-for-citizens-only/

[7] http://basicincome.org/news/2017/07/wealth-partaking-scheme-macaus-small-ubi/

[8] https://mondediplo.com/2013/05/04income

[9] Milton Friedman, Free to Choose

[10] https://catalyst-journal.com/vol1/no3/debating-basic-income

[11] https://qz.com/853651/definitive-data-on-what-poor-people-buy-when-theyre-just-given-cash/; http://documents.worldbank.org/curated/en/617631468001808739/pdf/WPS6886.pdf

[12] http://basicincome.org/news/2017/10/overview-of-current-basic-income-related-experiments-october-2017/; http://time.com/money/5114349/universal-basic-income-stockton/

[13] Martin Luther King, “Where Do We Go From Here?” (speech, 11th Annual Southern Christian Leadership Conference Convention, Atlanta, GA, August 16, 1967).

[14] https://gsgriffin.com/2016/12/08/the-last-article-on-the-minimum-wage-you-will-ever-need-to-read/

[15] Martin Luther King, “Where Do We Go From Here?” (speech, 11th Annual Southern Christian Leadership Conference Convention, Atlanta, GA, August 16, 1967).

[16] https://www.weforum.org/agenda/2017/09/a-basic-income-could-boost-the-us-economy-by-2-5-trillion/

[17] https://catalyst-journal.com/vol1/no3/debating-basic-income

[18] https://www.vox.com/policy-and-politics/2017/8/30/16220134/universal-basic-income-roosevelt-institute-economic-growth

[19] https://qz.com/931291/dick-cheney-and-donald-rumsfeld-ran-a-universal-basic-income-experiment-for-president-richard-nixon/

[20] https://www.weforum.org/agenda/2017/05/iran-introduced-a-basic-income-scheme-and-something-strange-happened

[21] http://isa-global-dialogue.net/indias-great-experiment-the-transformative-potential-of-basic-income-grants/; http://www.unicef.in/Uploads/Publications/Resources/pub_doc83.pdf; https://medium.com/basic-income/evidence-and-more-evidence-of-the-effect-on-inflation-of-free-money-a3dcc2a9ea9e

[22] http://bignam.org/Publications/BIG_Assessment_report_08b.pdf

[23] http://books.google.com/books?id=04NPax82MZQC&pg=PA70&lpg=PA70&dq=ralph+waldo+emerson+socialism&source=bl&ots=9Cp_2uKvRI&sig=AfJfiT0oIr3L4XRC2hpxaA93sgs&hl=en&sa=X&ei=sZgkVMbKH4GUyATVlILoCQ&ved=0CDYQ6AEwBA#v=onepage&q=ralph%20waldo%20emerson%20socialism&f=false

[24] http://www.truth-out.org/progressivepicks/item/28568-martin-luther-king-jr-all-labor-has-dignity

[25] https://democracyjournal.org/magazine/44/youre-hired/

[26] Alec Nove, Essential Works of Socialism, 555

[27] https://www.cnsnews.com/news/article/terence-p-jeffrey/21955000-12329000-government-employees-outnumber-manufacturing; https://www.cbpp.org/research/some-basic-facts-on-state-and-local-government-workers

[28] https://www.cnsnews.com/news/article/terence-p-jeffrey/21955000-12329000-government-employees-outnumber-manufacturing; https://www.csmonitor.com/Business/Robert-Reich/2010/0813/America-s-biggest-jobs-program-The-US-military

[29] http://www.history.com/topics/works-progress-administration; http://www.history.com/topics/civilian-conservation-corps; https://www.britannica.com/place/United-States/The-Great-Depression#ref613079

[30] http://www.ushistory.org/documents/economic_bill_of_rights.htm

[31] https://www.vox.com/policy-and-politics/2017/9/6/16036942/job-guarantee-explained

[32] https://gsgriffin.com/2016/12/08/u-s-canadian-city-governments-ending-homelessness-by-offering-jobs/; http://www.newsweek.com/homeless-paid-clean-streets-texas-786311; https://www.azcentral.com/story/news/local/tempe/2017/10/16/tempe-hire-homeless-temporary-jobs-fight-mill-avenue/754199001/

[33] http://onlinelibrary.wiley.com/doi/10.1111/dpr.12220/full

[34] https://scroll.in/article/807379/why-2015-16-was-the-worst-year-ever-for-mgnrega; https://www.huffingtonpost.com/atul-dev/the-need-for-guaranteed-e_b_6295050.html

[35] https://www.bls.gov/opub/mlr/2000/10/art4full.pdf

[36] http://www.cfeps.org/pubs/wp-pdf/WP41-Tcherneva-Wray-all.pdf; http://www.levyinstitute.org/pubs/wp_534.pdf

[37] http://www.epwp.gov.za/; https://www.westerncape.gov.za/general-publication/expanded-public-works-programme-epwp-0; http://www.publicworks.gov.za/PDFs/Speeches/Minister/2016/Minister_EPWP_2016_Summit_closing_remarks_17112016.pdf

[38] http://neweconomicperspectives.org/2013/08/honoring-dr-kings-call-for-a-job-guarantee-program.html

[39] http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.526.7530&rep=rep1&type=pdf; https://wwz.unibas.ch/fileadmin/wwz/redaktion/makrooekonomie/intermediate_macro/reader/7/02_ACFC7.pdf; https://www.researchgate.net/publication/46529582_The_Moral_Imperative_and_Social_Rationality_of_Government-Guaranteed_Employment_and_Reskilling

[40] https://gsgriffin.com/2016/12/08/the-last-article-on-the-minimum-wage-you-will-ever-need-to-read/

[41] http://www.redalyc.org/pdf/601/60124701.pdf

[42] https://poseidon01.ssrn.com/delivery.php?ID=718089001090029001080009094097103014067041034067091025005110119013116028124085065079106087021005066041048019022117117074085015103072012028116125001110102097111024001098096104064120025064&EXT=pdf; https://www.econstor.eu/bitstream/10419/31634/1/571704611.pdf

[43] https://poseidon01.ssrn.com/delivery.php?ID=718089001090029001080009094097103014067041034067091025005110119013116028124085065079106087021005066041048019022117117074085015103072012028116125001110102097111024001098096104064120025064&EXT=pdf

[44] https://www.economicshelp.org/blog/2269/economics/ways-to-reduce-inflation/

[45] https://economictimes.indiatimes.com/news/economy/indicators/mgnrega-has-not-contributed-to-food-inflation-report/articleshow/44903564.cms

[46] https://data.worldbank.org/indicator/FP.CPI.TOTL.ZG?end=2013&locations=AR&start=2000

[47] https://tradingeconomics.com/south-africa/inflation-cpi; http://www.epwp.gov.za/

[48] https://medium.com/basic-income/evidence-and-more-evidence-of-the-effect-on-inflation-of-free-money-a3dcc2a9ea9e; http://ubi.earth/inflation/

[49] http://www.mandela.gov.za/mandela_speeches/2005/050203_poverty.htm

[50] https://catalyst-journal.com/vol1/no3/debating-basic-income

For the Many, Not the Few: A Closer Look at Worker Cooperatives

After pointing out the authoritarian hierarchy of the capitalist workplace—the capitalist chief at the top wielding ultimate decision-making power and owning the wealth created by the workers—John Stuart Mill envisioned instead the “association of laborers themselves on terms of equality, collectively owning the capital with which they carry on their operations, and working under managers elected and removable by themselves.”[1]

Socialistic worker cooperatives are the humane alternative to capitalist businesses. In a worker cooperative, you become a company owner soon after being hired. All workers share equal ownership of the firm, from custodian to spokesperson. This translates to equality in power (all decisions are made democratically) and in wealth (company shares and incomes are the same for everyone). Just like that, the exploitation of labor by and authoritarian power of the greedy few are consigned to the dustbin of history, replaced by cooperation, equity, and democracy. Workers control their own destinies, deciding together how they should use the profits created by their collective labor, be it improving production through technology, taking home bigger incomes, opening a new facility, hiring a new worker, lowering the price of a service, producing something new, and all other conceivable matters of business.

With the disappearance of hierarchy and exploitation comes the elimination or great alleviation of other crimes of capitalism we’ve explored. When worker-owners invest in new technologies that increase productivity and require less human labor, they won’t fire themselves—they can make more money and/or work fewer hours, bettering their standard of living and spending more time with family or doing things they enjoy. They will not outsource their own jobs to Bangladesh, either. Their greater wealth will reduce poverty, their greater purchasing power easing the throes of recession and depression (as would less competition, were cooperatives to federate). If co-ops were adopted on a national or global scale, the stock market might disappear, or at least substantially change, as the workers might want to keep all the shares of their company. Transparency and democracy should make a firm less likely to commit the kinds of profit-driven abuses against people, planet, and peace, because there are more players influencing decisions; the wider the field, the less likely everyone would feel comfortable with, say, poisoning our biosphere to make a buck. This is not to say that laws prohibiting the production of vehicles that run on fossil fuels would be unnecessary. They would. Rather, it is simply to say there would be more room for dissent in a workplace and a greater chance of a more moral or safe alternative being adopted. Socialism is not a cure for all our problems, just many of them.

Some criticisms of worker cooperatives can be easily dismissed with simple philosophical and theoretical arguments. There’s the desire of capitalists and would-be capitalists to have all the power and hoard the wealth. Well, this is about being more ethical than that, having the empathy to support the common good, not selfish ends. As Dr. King said, “True compassion is more than flinging a coin to a beggar; it comes to see that an edifice which produces beggars needs restructuring.”[2] There’s the consternation at the thought of a majority of workers with little to no experience with a task overruling a worker with experience and knowledge of said task. What does the graphic designer know of welding processes and how to best use or improve them? How can we let younger, newer, brasher salespeople make policy for the veteran salesperson? Well, first, it’s important to acknowledge that both fresh blood and odd ideas from outside a field can at times prove beneficial, a spark of innovation and positive change. Second, many worker cooperatives make it a point to train all workers in multiple or all areas of the business, lessening the knowledge gap with education, training, and staff development. Some even rotate jobs! (On-the-job training and shared knowledge is a key factor for success in co-ops where most founders have no business experience.[3]) Third, a cooperative environment encourages workers to listen carefully to those with greater experience, knowing that deference will be reciprocated later. Fourth, most business decisions, if found to be ineffective or harmful, can be reversed before a total collapse of the company, just like in business today. Lastly, even if a shortsighted, unknowledgeable majority ran the cooperative—their cooperative—into the ground because they stubbornly refused to listen to the wisdom of the experts, there is nevertheless something satisfactory about the democratic nature of this failure. Under capitalism, the stupidity of a single capitalist can destroy a business, wiping out jobs for everyone. Under socialism, the workers democratically determine their own destiny. It may be a disaster, but it’s your disaster, collectively speaking. But, as we will see, cooperatives are in no way more likely to fold.

Cooperative work is as old as humanity itself, as we have seen. Worker cooperatives in their modern form have existed around the world since the Industrial Revolution began and capitalism took off, that is, before Marx’s writings.

The U.S. has a rich history of cooperative enterprises that continues to this day.[4] No, they are not always perfect. While some exemplify precisely the socialist vision, others could be more egalitarian or democratic (for example, many make use of elected managers or executives with slightly larger salaries, which can be easier with larger companies; others are too slow at granting ownership rights). But they are all a giant step up from capitalist firms. The U.S. has an estimated 300-400 cooperatives, everything from the 4th Tap Brewing Co-Op in Texas to Catamount Solar in Vermont, employing 7,000 workers (the average size is 50 people) and earning $400 million in revenue each year. (If you’ve heard it’s more like tens of thousands of cooperatives making billions, such inflated numbers are only possible by including credit unions, “purchasing co-ops,” independent farmers aiding each other through “producer co-ops,” Employee Stock Ownership Plans, and other structures that, while valuable, don’t exactly qualify.) 26% of them used to be capitalist-structured businesses.[5] Converting is a great way to preserve a business and protect people’s livelihoods; when small business capitalists retire, the vast majority of the time they do not find a buyer nor are able to pass ownership on to family, so the enterprise simply ends and workers are thrown out.[6] Cooperatives represent all economic sectors, and have annual profit margins comparable to top-down businesses—the idea that they are less efficient is a myth (not that efficiency has to be more important than democracy and equality anyway). 84% of the workers are owners at a given time.[7] Many firms are members of the U.S. Federation of Worker Cooperatives, a growing organization. Because people are put before profits, most cooperatives have a particular focus on community improvement and development, for example the Evergreen Cooperatives in Ohio. One study found food co-ops reinvest more money from each dollar in the local economy.[8]

America’s largest co-op, the Cooperative Home Care Associates in New York, has grown to 2,300 employees, about half of which are owners (to become an owner one pays $1,000 in installments). It is 90% owned by minority women. With $64 million in profits in 2013, the CHCA provides wages of $16 an hour (twice the market rate), a highest- to lowest-paid worker ratio of 11:1, flexible hours, and good insurance. Its governing board is elected; profits are shared. The company has a turnover rate that is a quarter of the industry standard. Some workers left behind minimum wage jobs and are now making $25 an hour. People say they stay because the co-op lifted them out of poverty and as owners they have decision-making power.[9] Ralph Waldo Emerson wrote in The Conduct of Life (1860), “The socialism of our day has done good service in setting men to thinking how certain civilizing benefits, now only enjoyed by the opulent, can be enjoyed by all.”[10] People who join the Women’s Action to Gain Economic Security (WAGES) co-ops in California see their incomes skyrocket 70-80%.[11]

As one might expect, workers are more invested in a company when they are also owners, which translates into better business outcomes. Though they are not without challenges, a review of the extant research reveals co-ops have the same or greater productivity and profitability than conventional businesses, and tend to last longer; workers are more motivated, satisfied, and enjoy greater benefits and pay (with no evidence of increased shirking), information flow improves, and resignations and layoffs decline.[12] They are more resilient during economic crises.[13] Many studies come from Europe, where cooperatives are more widespread and more data has been collected. In Canada, worker cooperatives last on average four times longer than traditional businesses.[14] Their survival rates are 20-30% better.[15] Research on France’s cooperatives revealed that worker-owned enterprises were more productive and efficient, and over a four-year period cooperative startups actually outnumbered capitalistic startups.[16] French capitalist-turned-cooperative businesses have better survival rates than capitalist businesses by significant margins, 10-30%.[17] Analyzing cooperatives across the U.K., Canada, Israel, France, and Uruguay, one study found that cooperatives had similar survival rates to traditional businesses over the long term, but better chances of making it through the crucial early years. Italy and Germany experience the same.[18] Italian co-ops are 40% more likely to survive their first three years; Canadian co-ops about 30% more likely in the first five years and 25% more likely in the first ten years; in the U.K., twice as many cooperatives survive the first five years than traditional firms.[19] In Italy’s Emilia Romagna region, an economic powerhouse of that nation and Europe, two-thirds of residents belong to worker cooperatives.[20] In Spain, a study of a retail chain that has both top-down stores and cooperative ones revealed the latter have much stronger sales growth because worker-owners have decision-making power and a financial stake.[21] In the U.S., much research has been done on businesses with Employee Stock Ownership Plans, which are called “employee-owned” because employees are given stock, but most are not democratic nor totally owned by the workers (Publix and Hy-Vee are examples). ESOPs are only one-third as likely to fail compared to publicly traded businesses, suffer less employee turnover, and are more productive.[22] One rare study on American plywood worker cooperatives found they were 6-14% more efficient in terms of output than conventional mills.[23] When the economy declined, conventional mills attacked worker hours and employment, whereas the worker-owners agreed to lower their pay to protect hours and jobs.[24] Given the benefits of worker cooperatives, places like New York City, California, and Cleveland are investing in their development, recognizing their ability to lift people out of poverty and thus strengthen a consumer economy, plus offer an opportunity to focus on alleviating systemic barriers to work and wealth that minorities, former felons, and others face in the United States.[25] This is no small matter. The egalitarian structure and spirit of solidarity inherent in co-ops can help win equality for the oppressed and disadvantaged. While perfect by no means, women tend to have more equitable pay and access to more prestigious positions in co-ops.[26] 60% of worker-owners in new American co-ops in 2012 and 2013 were people of color.[27] 90% of worker-owners at one of Spain’s co-ops are people with disabilities.[28] Italian cooperatives are more likely to hire folks who have been unemployed for long periods, often a major barrier to work.[29]

Spain has one of the strongest cooperative enterprises, no surprise to those who know Spain’s Marxist history.[30] (In the 1930s, George Orwell marveled at Barcelona, writing that his visit “was the first time that I had ever been in a town where the working class was in the saddle. Practically every building of any size had been seized by the workers… Every shop and cafe had been collectivized… Waiters and shop-walkers looked you in the face and treated you as an equal.”[31]) Mondragon Cooperative Corporation is a federation of over one hundred socialistic workplaces around the globe and in many economic sectors, from retail to agriculture. It is one of Spain’s largest corporations and the largest cooperative experiment in the world, with over $10 billion in annual revenue and 74,000 workers. Those who are worker-owners have shares of the business and the ability to run for a spot in the General Assembly, the federation’s democratic body of power, which elects a Governing Council. However, each cooperative is semi-autonomous, having its own, smaller democratic body. The manager-worker pay ratio is capped at 6:1.[32] In rough economic times, worker-owners decide democratically how much their pay should be reduced or how many fewer hours they should work, and managers take the biggest hits. This stabilizes an entity during recession, avoiding layoffs. So does job rotation and retraining. Further, Mondragon has the ability, as a federation, to transfer workers or wealth from successful cooperatives to ones that are struggling.[33] Due to these flexibilities, Mondragon cooperatives going out of business is nearly unheard of. When it does happen, the federation finds work for the unlucky workers at other member co-ops.[34] During the Great Recession, Mondragon’s number of workers held steady, and the Spanish county where it is headquartered was one of the least troubled.[35] The enterprise, however, has major faults. It actually owns more subsidiary companies than cooperatives—capitalistic, exploitive businesses in poor countries where workers are not owners. Also egregious: less than half of all Mondragon employees are actually owners.[36] Nevertheless, the business is a step in the right direction, indicating socialistic workplaces can function large-scale. (In fact, on average co-ops tend to have more employees that top-down firms.[37]) Mondragon is a member of the International Co-operative Alliance, the leading global association for the movement.

There are 11.1 million worker-owners worldwide.[38] When we include folk who work for cooperatives but are not owners, our total rises to 27 million.

 

Notes

[1] Mill, Principles of Political Economy

[2] King, “Beyond Vietnam,” April 4, 1967, New York City Riverside Church

[3] http://www.aciamericas.coop/IMG/pdf/CWCF_Canadian_SSHRC_Paper_16-6-2010_fnl.pdf

[4] Curl, For All the People

[5] http://institute.coop/what-worker-cooperative

[6] http://www.sfchronicle.com/business/article/Employee-ownership-may-help-businesses-stay-open-10941974.php

[7] http://institute.coop/sites/default/files/resources/State_of_the_sector_0.pdf

[8] https://tcf.org/content/report/reducing-economic-inequality-democratic-worker-ownership/

[9] http://www.commondreams.org/views/2014/08/15/how-americas-largest-worker-owned-co-op-lifts-people-out-poverty

[10] Emerson, The Conduct of Life

[11] https://tcf.org/content/report/reducing-economic-inequality-democratic-worker-ownership/

[12] https://lib.dr.iastate.edu/cgi/viewcontent.cgi?article=1098&context=econ_las_workingpapers; https://tcf.org/content/report/reducing-economic-inequality-democratic-worker-ownership/

[13] http://storre.stir.ac.uk/handle/1893/3255#.Wm-XeJM-fsE; https://tcf.org/content/report/reducing-economic-inequality-democratic-worker-ownership/

[14] http://inthesetimes.com/article/17061/a_co_op_state_of_mind

[15] http://www.co-oplaw.org/special-topics/worker-cooperatives-performance-and-success-factors/

[16] https://www.thenation.com/article/worker-cooperatives-are-more-productive-than-normal-companies/

[17] http://www.co-oplaw.org/special-topics/worker-cooperatives-performance-and-success-factors/

[18] http://www.co-oplaw.org/special-topics/worker-cooperatives-performance-and-success-factors/

[19] https://tcf.org/content/report/reducing-economic-inequality-democratic-worker-ownership/

[20] https://tcf.org/content/report/reducing-economic-inequality-democratic-worker-ownership/

[21] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1849466

[22] http://www.co-oplaw.org/special-topics/worker-cooperatives-performance-and-success-factors/

[23] https://lib.dr.iastate.edu/cgi/viewcontent.cgi?article=1098&context=econ_las_workingpapers

[24] https://books.google.com/books?hl=en&lr=&id=5qcPK0MuCXQC&oi=fnd&pg=PA462&dq=%22worker+cooperatives%22&ots=rVtg5rB4Fs&sig=6OXh-j6-MTTcrYJgbIgcvvrgma4#v=onepage&q=%22worker%20cooperatives%22&f=false

[25] https://www.thenation.com/article/worker-cooperatives-are-more-productive-than-normal-companies/; https://apolitical.co/solution_article/clevelands-cooperatives-giving-ex-offenders-fresh-start/; https://www.thenation.com/article/meet-the-radical-workers-cooperative-growing-in-the-heart-of-the-deep-south/

[26] http://www.geo.coop/node/615; https://www.thenews.coop/119294/sector/worker-coops/co-operatives-ensuring-no-one-left-behind/

[27] https://tcf.org/content/report/reducing-economic-inequality-democratic-worker-ownership/

[28] https://www.thenews.coop/119294/sector/worker-coops/co-operatives-ensuring-no-one-left-behind/

[29] https://lib.dr.iastate.edu/cgi/viewcontent.cgi?article=1098&context=econ_las_workingpapers

[30] https://gsgriffin.com/2017/07/03/socialismo-the-marxist-victories-in-spain/

[31] Orwell, “Homage to Catalonia”

[32] http://www.yesmagazine.org/new-economy/world-s-largest-federation-of-worker-owned-co-operatives-mondragon-josu-ugarte

[33] https://www.theguardian.com/world/2013/mar/07/mondragon-spains-giant-cooperative; Putting Democracy to Work, by Frank Adams and Gary Hansen, p. 145

[34] http://www.yesmagazine.org/new-economy/world-s-largest-federation-of-worker-owned-co-operatives-mondragon-josu-ugarte

[35] http://www.northeastern.edu/econpress/2016/11/16/mondragon-economic-democracy-in-the-startup-age/; https://www.theguardian.com/world/2013/mar/07/mondragon-spains-giant-cooperative

[36] http://www.northeastern.edu/econpress/2016/11/16/mondragon-economic-democracy-in-the-startup-age/; https://www.theguardian.com/world/2013/mar/07/mondragon-spains-giant-cooperative

[37] https://poseidon01.ssrn.com/delivery.php?ID=630093101127024071122112080068014068031053050050057049071105017072103089077103089094028058042052005023061081018000001123015079014012043035035115110105126071030118028095082080068011004095110081113065023069089126092123117096125095075072112084120095119024&EXT=pdf

[38] http://www.cicopa.coop/Second-Global-Report-on.html (p. 25, Table 1). If we add in people who are self-employed but members of “producer cooperatives” that support them (farmers and fishermen, for instance, especially in Asia), 280 million people are involved in cooperative employment. Bringing these workers into the analysis would also swell the U.S. numbers mentioned earlier.

Why I Am Not a Communist (Nor an Anarchist)

Having criticized the authoritarian communist states that arose in the 20th century, in particular the Bolsheviks in Russia for crushing worker power, and having also explored the basic tenets of anarchism (and how it is the father of the blasphemous bastard child that is anarcho-capitalism/libertarianism), I wanted to devote some time to musing over the merits of communism and anarchism relative to socialism.

While all anti-capitalist, these ideologies are not the same and should not be confused. I therefore include basic outlines (leaving out many different subtypes of each) before considering their relative advantages and downsides. I attempt to present each in their most ethical, idealized form (most free, most democratic, and so forth). Criticisms of ideologies should not be mistaken as disrespect for my Marxist comrades who think differently.

Communism destroys capitalism from the top-down. The government, as an instrument of the people, owns all workplaces and organizes the economy and the workers according to a central plan that meets citizen needs. Under this system, competition can be wholly and more easily eliminated, making the enormous pressure to put profits over people a thing of the past. Wasteful and redundant production goes away with it, meaning more workers and resources for more important tasks that build a better society (for example, no more energy and billions spent on advertising, instead diverted to education). Further, the national wealth can be easily divided up among the people, public sector salaries enriching all.

However, communism entails enormous challenges. It surely requires giving up the full freedom to choose your line of work – if your community or national plan only allows for a certain number of bookstores or bookstore workers, there may not be room for you. You would be rejected upon applying with the local or national government to open a new bookstore (as you would surely have to do for a plan, and thus communism, to function) or upon applying for a job at an established bookstore. Under communism, workers are supposed to “own” their workplaces because they “own” the State, but this is a rather indirect form of control that leaves some people wanting. You may have options regarding the work you do, but you will have to sacrifice your interests for the sake of the plan.

Of course, as long as you don’t find yourself under authoritarian communism, you would help decide the plan, at the ballot box. But how much would you help? That raises a second challenge: can communism function without representative government (or a worse concentration of power)? A common notion is that the workers, the people, would elect members of their worker councils to participate in the design and execution of the national plan (or elect representatives from their geographic community, as is done in politics today). So if you worked in auto manufacturing while waiting for a bookstore job to open up, you would run or elect someone for the honor and task of representing the American Auto Workers Council on the National Planning Committee. The representatives, using a broad array of data on what goods and services are need where, and what resources and workers will be needed to create and distribute, would craft a central plan for a certain number of years.

Can this enormous power be socialized further? We understand the risks of representative governance – concentrated power is more easily influenced and corrupted, and doesn’t give people a direct say over their destinies. Even with the disappearance of capitalist businesses, a small group of decision-makers would still face enormous pressures from countless localities, people, and organizations. We could see to it that the people have a direct up or down vote on the plan after the representatives craft it (or other checks and balances). But eliminating a representative structure entirely seems impossible. Imagine the daunting task of voting on how much corn the U.S. should grow in a given three-year period. On how many more workers are needed to produce a higher number of epipens. On how many homes should be built in a city on the other side of the country. (It very much seems that you must make this vote on national matters, rather than simply voting on what your local community needs. If each municipality democratically decided what they needed, these decisions would have to be reconciled at the national level, as there may not be the resources to do everything every community decides to do. Like the would-be bookstore worker, some communities will not get what they wanted, making the vote a sham. And, naturally, trying “communism” at local levels, where communities can only use the workers and resources within their communities, leaves massive inequities between regions. It might be possible to instead divide up the national wealth to each region somewhat according to its need and then let each decide how to use its allotted funds, but how much each city or town should get would also be impossible to sensibly sort out using direct democracy.)

Organizing an economy is a monumental task requiring mountains of accurate, up-to-date data. How difficult for an elected body of experts – a full-time job with a high risk of costly mistakes and turmoil. Can workers devote the time and study to make educated decisions on what to produce, their quantities, prices, and required manpower and resources, for an entire country? Would not voting itself, on thousands or hundreds of thousands of economic details, take days, weeks, or months? And if the people cannot be expected to plan the economy via direct vote, how can they be expected to make an informed up-down vote on a plan formulated by others? There seems to be no escaping representative government with communism. These challenges suggest this system may not be preferable.

Anarchism does away with capitalism from the bottom-up. Workplaces would be owned and run by workers, would federate to coordinate activities rather than compete, and local communities would make all decisions democratically. The State, as a hierarchical structure like capitalism, would be abolished. In this way, people would be free as possible from compulsion, authority, and concentration of power, enjoying individual freedoms as long as they do not hurt others. You’d have equal power to make decisions that affect you, joining in your local citizen assembly and worker council. Anarchism harkens back to the era of “primitive communism” we explored elsewhere.

Anarchists have differing views on whether capitalism can be dismantled after the State. Does the State have a vital role to play in capitalism’s eradication? Anarchist H.G. Wells, among others, thought only socialism could make anarchism possible:

Socialism is the preparation for that higher Anarchism; painfully, laboriously we mean to destroy false ideas of property and self, eliminate unjust laws and poisonous and hateful suggestions and prejudices, create a system of social right-dealing and a tradition of right-feeling and action. Socialism is the schoolroom of true and noble Anarchism, wherein by training and restraint we shall make free men.[1]

The challenge with anarchism is that, like “local communism,” it leaves communities to fend for themselves, meaning poorer peoples beside richer ones. Unless, of course, communities worked together, sharing workers and resources, in a movement toward the integration of larger and larger units and the necessary joint administration (however democratic), weakening local control and journeying down the path toward what are essentially nations. Further, if you avoided that, while a spirit of human oneness could indeed rise with the disappearance of nations, one wonders what is to stop factionalism based on community identity. Is pride and loyalty to a neighborhood, town, or city not predictable? One worries about true global solidarity. In the same vein, individual anarchist communities seem vulnerable to rivalry and conflict, especially if they differ in wealth, habitability, and so on. It all sounds a bit like the city-states of ancient Greece, albeit less capitalistic and more democratic. At the least, such a world seems more prone to conflict than one with a single government spanning all continents and meeting the needs of all people. Some form of State may be preferred for its ability to protect people.

Skeptics of anarchism may also see that statement as the answer to the question of crime, which, while being greatly reduced, is not likely to disappear entirely with the abolition of poverty (think of crimes of passion over infidelity, for instance). Yet anarchists typically despise the police – the personification of force, authority, and State violence. Can the police be made a thing of the past?

Socialist George Orwell wrote, “I worked out an anarchistic theory that all government is evil, that the punishment always does more harm than the crime and the people can be trusted to behave decently if you will only let them alone.” But he concluded, “It is always necessary to protect peaceful people from violence. In any state of society where crime can be profitable you have got to have a harsh criminal law and administer it ruthlessly.”[2]

Here Orwell lacks nuance and vision – of community policing, proportionate punishment, restorative justice, rehabilitation, and so on – which do not require a State; they can be done on an intimate, local level. Skeptics can rest easy on this point. The relevant task of anarchism (and socialism or communism) is to build a more humane, peaceful, fair criminal justice system that does not morph into what came before.

Then there’s socialism. “I should tie myself to no particular system of society other than that of socialism,” as Nelson Mandela would say.[3] Socialism also eliminates capitalism from the bottom-up. As under anarchism, workers collectively own their workplaces, making decisions democratically and equitably sharing the profits of their labor, and such worker cooperatives can federate with each other to reduce competition and coordinate their creations and service. The State exists to serve various needs of the people, such as guaranteed healthcare and employment, and is in fact under the people’s direct democratic control (this was explored in detail in What is Socialism?). The problems with anarchism and communism can be avoided. Socialism is the human future.

 

Notes

[1] New Worlds for Old, H.G. Wells

[2] The Road to Wigan Pier, George Orwell

[3] 1964 court speech, Nelson Mandela. http://www.motherjones.com/politics/2013/12/nelson-mandela-epitaph-own-words-rivonia/

Capitalists Speaking Frankly

Capitalist interest in preserving and profiting from the economic power of the rich was verbalized in a 2005 Citigroup equity strategy report called “Plutonomy: Buying Luxury, Explaining Global Imbalances.”[1] It was never meant to be public.

Its language reveals the wealth and position of its writers, who head their sections with phrases like “Welcome to the Plutonomy Machine,” “Riding the Gravy Train,” “How to Play Plutonomy,” and “the New Managerial Aristocracy.” It is enlightening because it is honest: the authors point to capitalism as what births plutonomies—economies powered by the super-rich—in their analysis of how investors can profit from the great consumption of the wealthy. They believe the “wealth waves” created by new technology, productivity gains, patents, and “capitalist-friendly” governments are “exploited best by the rich and educated of the time,” creating a massive wealth gap. They write, “At the heart of plutonomy is income inequality.” They insist “society and governments need to be amenable to disproportionately allow/encourage the few to retain the fatter profit share. The Managerial Aristocracy…needs to commandeer a vast chunk of that rising profit share, either through capital income, or simply paying itself a lot.” The workers who made those profits possible be damned.

It is clear the Citigroup executives are wary of changing attitudes among the citizenry:

Perhaps one reason that societies allow plutonomy is because enough of the electorate believe they have a chance of becoming a Pluto-participant. Why kill it off, if you can join it? In a sense this is the embodiment of the ‘American Dream’. But if voters feel they cannot participate, they are more likely to divide up the wealth pie, rather than aspire to being truly rich.

This neatly summarizes the way the conservative dogma of rugged individualism protects the interests of the upper class. How right Marx was when he noted, “The ruling ideas of each age have ever been the ideas of its ruling class.”[2]

In a 2006 follow-up report entitled “Revisiting Plutonomy: The Rich Getting Richer,” the corporation noted how the rich get richer “at the relative expense of labor,” how wages for workers are kept low (you have to “keep wage inflation in check”) while the capitalist owners reap more profits than they used to:

We believe that the rich are going to keep getting richer in coming years, as capitalists (the rich) get an even bigger share of GDP as a result, principally, of globalization. We expect the global pool of labor in developing economies to keep wage inflation in check, and profit margins rising – good for the wealth of capitalists, relatively bad for developed market unskilled/outsource-able labor.[3]

Capitalism, the capitalists understand, transforms the hard work of the many into the wealth of the few. Good for capitalists, bad for labor. The document also revealed Citigroup’s fear of the citizenry demanding greater income equality:

Our whole plutonomy thesis is based on the idea that the rich will keep getting richer. This thesis is not without its risks…the rising wealth gap between the rich and poor will probably at some point lead to a political backlash. Whilst the rich are getting a greater share of the wealth, and the poor a lesser share, political enfrachisement remains as was – one person, one vote (in the plutonomies). At some point it is likely that labor will fight back against the rising profit share of the rich and there will be a political backlash against the rising wealth of the rich… We don’t see this happening yet, though there are signs of rising political tensions. However we are keeping a close eye on developments.[4]     

The minority is always fearful of the majority. They know, as Marx wrote, that

…the proletarian movement is the self-conscious, independent movement of the immense majority in the interest of the immense majority. The proletariat, the lowest stratum of our present society, cannot stir, cannot raise itself up, without the whole superincumbent strata of official society being sprung into the air.[5]

Citigroup would soon see their fears realized with the rise of the Occupy Wall Street movement and a louder dialogue about the income inequality and wage theft of capitalism.

 

Notes

[1] http://delong.typepad.com/plutonomy-1.pdf

[2] Marx, Communist Manifesto, 26

[3] http://www.correntewire.com/sites/default/files/Citibank_Plutonomy_1.pdf

[4] http://www.correntewire.com/sites/default/files/Citibank_Plutonomy_1.pdf

[5] Marx, Communist Manifesto, 18

A Brief History of American Socialism

“Educating Americans through the means of the library service could bring about a change of their political attitude quicker than any method. The basis of communism and socialistic influence is education of the people.”

– Congressman Harold Velde of Illinois (1950), speaking to Congress in opposition to library services in rural areas (Howard Zinn, A People’s History of the United States)

 

The United States has a rich socialist tradition. It is an integral part of our history and saturates our modern culture. Each morning millions of schoolchildren rise from their desks, place hands over their hearts, and recite a Pledge of Allegiance written in 1892 by socialist Francis Bellamy, a New York pastor.

Many American children learn and love the popular song “This Land is Your Land” by socialist Woody Guthrie. One of the verses:

In the shadow of the steeple I saw my people,
By the relief office I seen my people;
As they stood there hungry, I stood there asking
Is this land made for you and me?

Millions of tourists flock to New York each year to see the Statue of Liberty, which is engraved with a poem, “The New Colossus,” written by radical Emma Lazarus. It ends:

Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tost to me,
I lift my lamp beside the golden door!

Famous figures like Helen Keller, Dr. Martin Luther King, Jack London, Kurt Vonnegut, Malcolm X, Upton Sinclair, Arthur Miller, and W.E.B. Du Bois called themselves socialists. Same with Elizabeth Cady Stanton, John Dewey, Margaret Sanger, A. Philip Randolph, Bayard Rustin. Others, such as Mark Twain and Thomas Paine, espoused socialistic ideas without labeling themselves (the latter existed before the term). People like Francois Fourier, Robert Owen, and Étienne Cabet established socialist towns across the nation. One community in West Roxbury, Massachusetts, was supported by Nathaniel Hawthorne and Ralph Waldo Emerson (see Nichols, The S Word).

Before the Red Scare and McCarthyism swept the United States during the Cold War, socialism was not a widely vilified political ideology. Major individuals and organizations publicly espoused it, from the Congress of Industrial Organization to American churches (launching the Christian Socialist movement; as Marx wrote, “Nothing is easier than to give Christian asceticism a Socialist tinge”).[1] The Scare has not yet passed, still gripping the older generation and conservatives, typically perpetuated by misinformation and fear-mongering. It has, however, begun to weaken, particularly due to Bernie Sanders and a surge in interest from a younger generation.

Whatever your political persuasion, it is undeniable that American socialism fueled the progressive movement and broadened freedom for all citizens. Throughout our history, many of the loudest demands for black rights, women’s rights, worker rights, and peace came from socialists, communists, anarchists, and other elements of the radical left.

Consider first the labor movement. Radicals were instrumental in leading the charge against starvation wages, child labor, unsafe working conditions, 12-16 hour workdays, seven-day workweeks, fines for tardiness, and so on in the 19th century and beyond. Solidarity was their battle cry. Troublemaking was their tactic: organizing, petitioning, striking, protesting, boycotting, picketing, sitting in, rioting. Socialist heroes like “Big Bill” Haywood and Ella Reeve “Mother” Bloor helped win us the workplace rights we take for granted today.

Of course, worker strikes occurred in the 18th century—that is, before the socialist movement. Americans already had a keen understanding of how capitalism functioned. Shoemakers with socialistic ideas declared in Lynn, Massachusetts, in 1844, four years before The Communist Manifesto:

The division of society into the producing and the non-producing classes, and the fact of the unequal distribution of value between the two, introduces us at once to [a] distinction—that of capital and labor… Labor now becomes commodity… Antagonism and opposition of interest is introduced in the community; capital and labor stand opposed.[2]

In 1860, Lynn participated in the largest strike in American history up to that point. 20,000 shoemakers went on strike in 25 towns throughout New England. The ideas that are the foundation of socialism—that the interests of owners and workers are not the same, that the capitalist few are a “non-producing” class growing wealthy off the labor of the many, the workers, the “producing class”—were already held true by American workers. They knew it from their own experiences. Thus socialism became fairly popular in the United States.

The quest for democratic, worker control of workplaces has also been underway for a long time. In the first recorded strike of U.S. workers, 20 tailors in 1768 left their employer and formed a cooperative. The Knights of Labor helped launch nearly 200 worker cooperatives by 1886, across the country and across various industries. “The Knights thrived for a decade but were eventually crushed by big businesses, which rallied to stamp out this new and disturbing breed of competition, refusing to ship goods made by cooperatives, sell machinery and materials to them, or issue them bank loans.” Still, the movement persisted, seeing a resurgence as African Americans sought economic independence (in 1907 there were 156 co-ops founded by African Americans), during the Great Depression, and in the revolutionary times of 1960s and 1970s.[3] Today there are still worker cooperatives across the country.[4]

In the spring of 1886, 200,000 Americans rose up in rebellion. American socialists organized and led labor unions and the Knights of Labor in a massive nationwide strike to push for an 8-hour workday, declaring a May 1st deadline for corporate power to yield. Violence sparked between protesters and police, and when a bomb went off in Haymarket Square in Chicago, the authorities hunted down and arrested the leaders of the strike. After a sham of a trial, four socialists were executed. May Day, International Workers Day, commemorates this event.

Strikes only grew larger. In the fall of 1934, 421,000 textile workers across the nation went on strike for better working conditions. During World War II, there were 14,000 strikes involving nearly 7 million people.[5] One strike reached half a million people. Still today, the labor movement (Fight for $15, Occupy Wall Street, and so on) is often organized, led, and strengthened by Marxists.

The history of American socialism is also a revolution against slavery, racial hatred, discrimination, and segregation. For example, the Republican Party was founded as an anti-slavery party in a schoolroom in Ripon, Wisconsin (a former utopian socialist community) on March 20, 1854 by radical Alvan Bovay and 16 other socialists.[6] Many socialists, the most prominent being Karl Marx, condemned black slavery and were elated when Lincoln became the first Republican president in 1861.

Abraham Lincoln, while no socialist, had his sympathies in the right place. As John Nichols points out in The “S” Word: A Short History of an American Tradition…Socialism, Lincoln was close to socialist editor of the New York Tribune Horace Greeley, befriended and allied himself with radicals who fled after failed revolutions in Europe in 1848 (some of them friends of Marx), appointed one socialist as his assistant secretary of war and another his ambassador to Spain, and even cordially corresponded with Marx about the American Civil War.[7] Lincoln said in his 1861 State of the Union Address:

Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration. Capital has its rights, which are as worthy of protection as any other rights. Nor is it denied that there is, and probably always will be, a relation between labor and capital producing mutual benefits. The error is in assuming that the whole labor of community exists within that relation. A few men own capital, and that few avoid labor themselves, and with their capital hire or buy another few to labor for them…[8]

Later, the labor movement sparked an interracial push for equality for blacks in many workplaces and leftist groups. Throughout the late 1800s and early 1900s, poor blacks and whites often came together to strike for better wages, working conditions, and equal treatment. There were thousands of strikes in cities across the nation each year, and within them were sparks of progress. Blacks and whites were fighting the same battle, as losing limbs or dying on the job, dire poverty, and starvation were realities for millions of workers in Industrial America. Many realized their true conflict was not race but class.

Workers of all colors saw their employers grow rich, but were themselves given barely enough to stay alive, even though it was the workers themselves who created the wealth by creating the good or providing the service. And thus many unions and organizations integrated, like the Knights of Labor and the Industrial Workers of the World, both of which welcomed blacks, women, Asians, and immigrants. Many of such institutions’ founders, leaders, and members, the lifeblood of the labor movement, were socialists, who called for “equal rights for all without distinction to sex or race”[9] (to quote an 1883 congress in Pittsburgh). One union, the American Workers League, was formed as an interracial organization in 1853.[10] The American Federation of Labor opened its doors to black members in 1929.[11] At its height the Communist Party had 80,000 members, 9% of them black.[12] In an America where blacks were drinking from separate water fountains and being tortured and executed at neighborhood picnics, small pockets of socialists across the country were building a more tolerant society.

Many socialists understood the relationship between race and class. Racism was used to justify further oppression and wage theft by the capitalist class. Just as emancipation would mean the end of free labor for slave-owners, human equality would force business owners to pay blacks the same wages as whites. Racism served to prevent this, just as sexism and xenophobia prevented the same for women, undocumented immigrants, and others. In Communism and the Negro (1933), New Yorker Max Shachtman (head of the Worker’s Party) wrote:

The ruling class is in urgent need of the theory of racial inferiority…it affords them a moral justification for the super-exploitation and persecution to which it subjects the Negro. If trifling sums are allocated for Negro education, he is, after all, “only a nigger.”; if housing conditions are abominable, if the Negro is scandalously underpaid, if he is deprived of every democratic right, he is, after all, an inferior who does not deserve or require better; if he is hanged from a tree and riddled with bullets, or soaked with oil and burned to death by a mob of savages, it is, after all, “only a nigger” who suffers.[13]

Shachtman declared, “White workers [must] become the most uncompromising champions of the Negro.”[14]

Now, this is certainly not to say all leftist unions and all socialists were pro-civil rights or accepted blacks as equals. Racism within their ranks stalled progress, to be sure. There was often intense racial hostility in the competition for work. Corporations often responded to strikes by hiring unemployed blacks to replace white strikers, since they could pay them dismal wages with less threat of resistance—the racial tension and violence this created damaged the prospects of interracial organizing. And racism served capitalists a second way: it discouraged workers of different colors from uniting and unionizing to push for higher wages or shorter workweeks. However, many saw the closing line of The Communist Manifesto (“Working men of all countries, unite!”) as a call for racial equality in the fight for class equality. It is telling, also, that the Communist Party of the United States ran a black man, James W. Ford, for the vice presidency in 1932—to put that in perspective, Martin Luther King, Jr. was three.

Socialist, civil rights leader, and labor organizer A. Phillip Randolph once said, “The Socialist Party was the only party that had a philosophy that took account of the race problem and whose economic analysis addressed itself to the solution of the Negro’s problems.”[15] W.E.B. du Bois said in 1908 that “the only party today which treats Negroes as men, North and South, are the Socialists,”[16] and fifty years later, “It is clear today that the salvation of American Negroes lies in socialism.”[17]

Malcolm X later commented:

You can’t have capitalism without racism. And if you find a person without racism and you happen to get that person into conversation and they have a philosophy that makes you sure they don’t have this racism in their outlook, usually they’re socialists or their political Philosophy is socialism.[18]

Stokely Carmichael posited:

If a white man wants to lynch me, that’s his problem. If he’s got the power to lynch me, that’s my problem. Racism is not a question of attitude; it’s a question of power. Racism gets its power from capitalism. Thus, if you’re anti-racist, whether you know it or not, you must be anti-capitalist. The power for racism, the power for sexism, comes from capitalism, not an attitude.[19]

And Dr. King said:

We must rapidly begin the shift from a “thing-oriented” society to a “person-oriented” society. When machines and computers, profit motives and property rights are considered more important than people, the giant triplets of racism, materialism, and militarism are incapable of being conquered.[20]

Moreover, he declared:

We must recognize that we can’t solve our problem now until there is a radical redistribution of economic and political power… this means a revolution of values… We must see now that the evils of racism, economic exploitation and militarism are all tied together… you can’t really get rid of one without getting rid of the others… the whole structure of American life must be changed.[21]

Still today, many of the most passionate anti-racists, such as those involved in the Black Lives Matter movement, are also socialists.

While white and black socialists pushed for racial equality, socialist women were hard at work across the country battling for gender equality. Marxist women were integral to the labor, peace, and civil rights movements (in 1937, while men conducted a sit-down strike in Flint, Michigan, plants, women armed themselves and fought police to protect the strikers[22]), but they are more so responsible for the freeing of womankind (something not all socialist men were happy about). They published literature, organized, and protested. In the 1915 suffrage campaign in New York, they distributed hundreds of thousands of leaflets in multiple languages, and held hundreds of meetings. Radical leftists like Emma Goldman, Helen Keller, and Mother Mary Jones (who co-founded the IWW), led the charge for voting rights, property rights, sexual rights, education rights, employment rights. Like some African Americans, they understood that a capitalist system that kept economic and political power in the hands of a few rich white men impeded their human progress.

Charlotte P. Gilman of Connecticut wrote a poem called “The Socialist and the Suffragist”:

Said the Socialist to the suffragist:
“My cause is greater than yours!
You only work for a special class,
We for the gain of the general mass,
Which every good ensures!”

Said the suffragist to the Socialist:
“You underrate my cause!
While women remain a subject class,
You never can move the general mass,
With your economic laws!”

Said the Socialist to the suffragist:
“You misinterpret facts!
There is no room for doubt or schism
In economic determinism—
It governs all our acts!”

Said the suffragist to the Socialist:
“You men will always find
That this old world will never move
More swiftly in its ancient groove
While women stay behind.”

“A lifted world lifts women up,”
The Socialist explained.
“You cannot lift the world at all
While half of it is kept so small,”
The suffragist maintained.

The world awoke, and tartly spoke:
“Your work is all the same:
Work together or work apart,
Work, each of you, with all your heart—
Just get into the game!”

After 20,000 immigrant women garment workers organized and went on strike in New York City in 1909, they celebrated the first Women’s Day. A few years later, in 1917, women demonstrators in Soviet Russia helped topple a dictator, and March 8 became the day International Women’s Day would later be celebrated.[23] Many of the fiercest feminists and equality advocates in the modern era are of course radicals.

With their activity and leadership in the progressive freedom movements, socialists were quite popular, a force to be reckoned with. In the first decades of the 20th century, an estimated 1 million Americans read socialist newspapers. The Appeal to Reason, a socialist publication from Kansas, was one of the nation’s most widely read papers, with 790,000 subscribers.[24] The Socialist Party had nearly 120,000 members.[25] Socialist politicians served in 340 cities across the country, some 1,200 mayors, councilpersons, state congressmen, etc.[26] In 1910, Milwaukee became the first major city to elect a socialist mayor, Emil Seidel. The city had socialist mayors off and on for the next 50 years, popular because they rooted out corruption and improved public services like health care, education, and public housing. Victor Berger of Milwaukee became the first socialist U.S. Congressman in 1911 and served off and on until 1929; throughout the 1910s and 1920s, the two major parties in Wisconsin were the Republicans and the Socialists. Even the smaller Communist Party put men on the New York City Council. The first Communist mayor in America served Crosby, Minnesota in 1933.[27] Oklahoma had one of the strongest socialist movements, with 12,000 Socialist Party members, who joined other voters in giving over 100 socialists local political power in 1914.[28] Missouri had 135 Socialist Party locals.[29]

Socialist parties had significant influence over candidates and policies. Even decades later, when the Red Scare gripped America, people still favored socialist policies; Upton Sinclair (author of The Jungle), in a letter to famous socialist Norman Thomas, remembered, “The American People will take Socialism, but they won’t take the label. I certainly proved it…running on the Socialist ticket I got 60,000 votes, and running on the slogan to ‘End Poverty in California’ I got 879,000.”[30]

The most famous of all American socialist politicians was Eugene V. Debs of Indiana. He was the presidential candidate for the Socialist Party in 1900, 1904, 1908, 1912, and 1920. In 1920, he garnered 6% of the national vote (nearly 1 million people), a percentage any modern third-party candidate would die for, and he did it from a prison cell.

Debs was jailed, like thousands of other Americans, many of them socialists, by the Wilson administration for opposing America’s involvement in World War I. In a 1918 speech, Debs had thundered, “The master class has always declared the wars; the subject class has always fought the battles.” When the ruling class beat the drums of war, the loudest pleas for peace were often from socialists.

At his trial, Debs said, “I have been accused of obstructing the war. I admit it. Gentlemen, I abhor war. I would oppose it if I stood alone… I have sympathy with the suffering, struggling people everywhere. It does not make any difference under what flag they were born, or where they live.”

He was sentenced to 10 years, experiencing firsthand America’s sacred “freedom of speech” and its relevance during wartime. He was released early by President Harding, and died in 1926. Though not all radicals opposed the war (it in fact caused great division in the socialist movement), across the nation thousands of IWW members, unionists, laborers, socialists, and communists marched for peace, while the Department of Justice censored mail, raided meetings, broke into homes, and made arrests to root out these “disloyal” Americans. The government managed to destroy the IWW, but not the antiwar spirit. In Boston, for example, 8,000 marched on July 1, 1917, holding banners that read: “If this a popular war, why conscription? Who stole Panama? Who crushed Haiti? We demand peace.”[31]

Throughout the rest of the 20th century, American socialists and communists would continue to be at the forefront of peace movements during each and every war the United States entered. This continued into the 21st century.

 

Notes

[1] Communist Manifesto, https://www.jstor.org/stable/2762617?seq=1#page_scan_tab_contents

[2] Zinn, A People’s History of the United States, 231

[3] http://inthesetimes.com/article/17061/a_co_op_state_of_mind

[4] https://usworker.coop/home/

[5] Zinn, People’s, 397, 417

[6] Nichols, The “S” Word, 58

[7] Nichols, 66, 73, 80

[8] Lincoln, 1861 State of the Union Address, http://www.presidency.ucsb.edu/ws/?pid=29502

[9] Zinn, People’s

[10] Nichols, 179

[11] Nichols, 179

[12] https://socialistworker.org/2016/08/15/the-socialist-history-they-hide-from-us

[13] Schachtman, Communism and the Negro

[14] Schachtman

[15] Nichols, 187

[16] Manning Marable, W.E.B. Du Bois: Black Radical Democrat, https://books.google.com/books?id=aw4eCwAAQBAJ&pg=PT108&lpg=PT108&dq=w.e.b.+du+bois+%22north+and+south,+are+the+socialists%22&source=bl&ots=dxvYm4T2L1&sig=CG5ioeCDBdppiVc2c7mXhm1v5C0&hl=en&sa=X&ved=0ahUKEwjbsLWP9anSAhVM82MKHQhpAWsQ6AEIHzAB#v=onepage&q=w.e.b.%20du%20bois%20%22north%20and%20south%2C%20are%20the%20socialists&f=false

[17] W.E.B. du Bois, “The American Negro and Communism,” October 23, 1958, http://credo.library.umass.edu/view/pageturn/mums312-b206-i015/#page/1/mode/1up

[18] Malcolm X, Remarks at Militant Labor Forum Symposium, May 29, 1964

[19] https://www.youtube.com/watch?v=tug8RJyLoz0

[20] King, Beyond Vietnam: Breaking the Silence, 1967

[21] http://kairoscenter.org/wp-content/uploads/2014/11/King-quotes-2-page.pdf

[22] https://socialistworker.org/2016/08/15/the-socialist-history-they-hide-from-us

[23] https://socialistworker.org/2016/08/15/the-socialist-history-they-hide-from-us

[24] https://socialistworker.org/2012/07/19/the-appeal-for-socialism

[25] Howe, Socialism and America

[26] Zinn, 340

[27] Nichols, 132-133, 103-105

[28] Zinn, 340

[29] https://jacobinmag.com/2017/02/rise-and-fall-socialist-party-of-america/

[30] Letter to Norman Thomas (1951), Upton Sinclair, http://spartacus-educational.com/Jupton.htm

[31] Zinn, People’s

The Corporate Assault on Human Beings and Their Democracies

Political power, wealth, and business interests are all intimately linked. Rarely do we see one without the others, which can have devastating effects on both democracies and citizens. To paraphrase radical historian Howard Zinn, “The interests of corporations and the interests of the people are not the same.”

 

I: The Corporate Assault on Democracy

To rise to the highest political positions, an official must have a great deal of money and be well-connected to established political players and business titans. While there are some upsets, the best-funded candidates win congressional elections 86-97% of the time.[1] The same is virtually always true of presidential races.

Corporate donors therefore have a tremendous amount of power. In the Citizens United case of 2010, the Supreme Court allowed corporations to give as much money to political campaigns as they like. Therefore the richest corporations have the greatest ability to help decide elections, leaving poorer businesses, unions, organizations, not to mention the common people, in the dust. (Many problems with corporate influence in government also apply, to a lesser degree, to unions and organizations, from the UAW to the NRA. Solutions like public financing of elections [or perhaps only allowing small campaign donations from individuals] and lobbying reform must apply to all entities.) The 2013 McCutcheon v. F.E.C. case then allowed unlimited individual spending on elections, further empowering the rich to choose candidates.

However, capitalists cannot always know who will receive the most funding nor foresee with absolute certainty the victor, so corporations have long given money to both sides to assure whoever wins will aid their interests (public officials are keen to pay back donors, especially to secure funding for reelection campaigns). A senior vice president of International Telephone and Telegraph put it best in 1960 when he said his company board would “‘butter’ both sides so we’ll be in a good position whoever wins.”[2] As the Center for Responsive politics reported on giving to the party governor associations, “High profile donors that give to both sides include Comcast, Wal-Mart, Hewlett-Packard, AT&T, Coca-Cola, AFLAC and Verizon. The majority of these corporations donate about the same amount of money to both sides with five corporations giving exactly 50%: Novartis Corp, Kolhberg & Co, KKR & Co, Jacobs Entertainment Inc. and Intuit Inc.”[3]

Einstein wrote in 1949 that there existed an

…oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organized political society. This is true since the members of legislative bodies are selected by political parties, largely financed or otherwise influenced by private capitalists who, for all practical purposes, separate the electorate from the legislature. The consequence is that the representatives of the people do not in fact sufficiently protect the interests of the underprivileged sections of the population. Moreover, under existing conditions, private capitalists inevitably control, directly or indirectly, the main sources of information (press, radio, education).[4]

Corporations have methods of influencing public policy beyond candidate selection. They either are media companies or own the media (GE owns NBC and Comcast, Disney owns ABC, etc.), and fund think tanks, plus university departments and research institutes.[5] They threaten to move to other cities, states, or countries if politicians don’t enact laws that benefit them; their departure could mean ruin for local economies and working families. Boeing, the largest employer in Wichita, Kansas, infamously held that city—and state—hostage in the early 2000s.[6] Corporations employ armies of lobbyists to bribe politicians with campaign funds to enact or oppose specific policies, such as deregulating industries or putting exemptions into the tax code. Armies of lawyers and accountants then make sure companies are effectively using the loopholes to whittle down their taxes. This has been underway for decades, and now the largest companies pay no taxes, and even get tax refunds. Tax rates for rich individuals have likewise been significantly reduced. See “Giant Corporations Are Not Paying Taxes.”

Corporations lobby to make sure certain unethical and illegal actions can no longer be punished. In 1966, for instance, “auto industry lawyers persuaded members of Congress to delete the criminal penalty from the motor vehicle safety law, even for companies who knowingly sold defective cars or parts—and willfully declined to recall the cars even after their use resulted in injuries or death.”[7] Increased product safety meant higher costs for capitalists, so it was important to minimize or eliminate criminal penalties once they decided to put workers or consumers at risk. Or take the deadly opioid crisis of the first two decades of the 21st century, in which pharmaceutical companies made a killing by ignoring government requirements to report suspiciously large orders of opioids (such as nine million hydrocodone pills over two years to a town of 392 people), which were going to shady pain clinics and thus to addicts. When the DEA began cracking down on this negligence, the pharmaceutical industry launched the usual bribery methods (lobbying, donations to politicians, job offers) to convince Congress to scale back the DEA’s regulatory and enforcement powers.

In addition to the trillions in subsidies and tax breaks they receive, corporations use the government (and taxpayer money) as a life raft when they run into trouble. In the 1980s through the early 2000s, the financial sector succeeded in deregulating the practices of Wall Street banks and insurance companies, allowing those entities to make predatory investments and loans with public money. It was fraud on an unimaginable scale: mortgage lenders handed out low-quality, high-cost (and overvalued) home loans to consumers. This reaped hundreds of billions in profits for the banks, but in 2008 destroyed the housing market when scammed borrowers facing enormously high interest rates and mounting credit couldn’t make their payments. These people lost their homes to foreclosure, millions of nice homes stood empty, and the demand for housing construction vanished. The housing market crashed, and with it nearly the entire national economy (the global economy took a hit as well). Americans who owned stock lost fortunes, the poor lost their homes, and the banks, which loaned and borrowed money from each other, collapsed like dominoes. Yet the government bailed out the largest financial institutions, handing over trillions in taxpayer funds to the very CEOs and boards of directors who created the crisis!

Corporate power players, after all, ran the Department of the Treasury. Former Goldman-Sachs executives, for instance, held many of the top positions in the department, per usual. (Phone records have revealed the heads of financial institutions like Goldman-Sachs, Citigroup, and JP Morgan can get the treasury secretary on the phone several times a day, something no ordinary American is privileged to.[8]) The corporatists would stop at nothing to acquire the fortunes needed to save their corrupt institutions. Bailouts have been common practice for a long time—in 1999, Noam Chomsky pointed out that over 20 corporations on the Fortune 100 list would not still exist if not for public bailouts.[9] Congress gave the banks a $700 billion bailout. Not only did they save their banks, the capitalists awarded themselves millions of dollars in record bonuses. Today, the same men still control the financial sector and the governmental body in charge of overseeing it. “Three years after a horrific financial crisis caused by massive fraud,” reported Charles Ferguson in 2011 (Inside Job), “not a single financial executive has gone to jail.” Finally, one did in 2014. He got a sentence of 30 months.[10]

Senator Bernie Sanders summarized the state of American politics well when he said, “Wall Street is extraordinarily powerful. Congress doesn’t regulate them… Wall Street regulates Congress,”[11] in the same way Populist Party orator Mary Ellen Lease summarized it in 1890: “Wall Street owns the country. It is no longer a government of the people, by the people, and for the people, but a government of Wall Street, by Wall Street and for Wall Street.”[12] In the Trilateral Commission report of 1976, Samuel Huntington of Harvard, a consultant to the White House during the Vietnam War, wrote that the country was “governed by the President acting with the support and cooperation of key individuals and groups in the executive office, the federal bureaucracy, Congress, and the more important businesses, banks, law firms, foundations, and media, which constitute the private sector’s ‘Establishment.’” He was not being critical. He believed there was an “excess of democracy,” recommending “limits to the extension of political democracy.”[13]

Corporations now design the very laws by which they must abide. Ralph Nader writes, “Few regulations are issued without heavy tinkering by corporate attorneys; the results are often obsolete before they are enacted” and “corporate lobbies have effected changes in the law that reduce or escape fines, cap damages under tort law, hold enforcement budgets down, appoint enforcers from their own executive ranks to head agencies, and pour money into the coffers of political parties and candidates.”[14] In 2013, 70 of the 85 lines in a bill on financial reform came straight from a draft created by Citigroup lobbyists.[15] Groups like the American Legislative Exchange Council (ALEC) bring together local lawmakers and business titans to draft legislation that ends up being voted on and thus benefiting the corporate designers.[16] Corporate influence leads to all kinds of lunacy, from Obama pushing the Trans-Pacific Partnership, which allowed corporations to sue governments, including the U.S., if their policies interfered with corporate profits, to the weakening of anti-trust (anti-monopoly) laws, allowing corporations to swallow up or eradicate competitors.

2013 research from Political Research Quarterly showed that both political parties follow the whims of their wealthy constituents and donors, and during the 111th Congress Democrats were worse than Republicans in serving lower-income, majority interests.[17] A 2014 study from Northwestern University and Princeton University found that when economic elites overwhelmingly oppose a law, it only has an 18% chance of enactment.[18] Researchers concluded, “The preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy.” In 2017, Republicans were openly admitting that it was urgent to pass a new tax law or donors would abandon them. It is no coincidence that the Democrats who oppose Medicare-For-All get the most from the health insurance industry or that Republican leadership got huge corporate donations days after slashing the corporate tax rate.

Corporate executives are regularly installed in high government positions and set about serving the interests of private capital. President Nixon appointed a businessman to head OSHA who “was hostile to OSHA’s aims. One of his first acts was to order the destruction of 100,000 government booklets pointing out the dangers of cotton dust to textile workers.”[19] In 2013, President Obama announced that Tom Wheeler, former executive of (and Washington lobbyist for) cable and telecommunication giants, would be the new chairman of the Federal Communications Commission. Wheeler, after all, raised almost three-quarters of $1 billion for Obama’s two presidential campaigns.[20] A man who spent decades lobbying for deregulation for some of the wealthiest corporations was now head of the government agency responsible for overseeing and regulating the same industry. Within a year, Wheeler was leading the charge to further allow monopolistic practices among Internet, cable, and phone service corporations, and dismantle net neutrality regulations. A later FCC chair attempting to axe net neutrality, Ajit Pai, was a former lawyer for Verizon, one of the companies pushing for the same. Things of course reached an absurd level under President Trump. His secretary of energy was on the board of directors of Energy Transfer Partners and earlier said he wanted to abolish the Department of Energy. His head of the Environmental Protection Agency didn’t believe in climate change and was at the time suing the EPA over environmental and health regulations. His National Economic Council director, chief strategist, and treasury secretary were all Goldman Sachs boys. His education secretary favored private schooling without government oversight over public schools, and was in no way qualified for the job, but donated huge sums to the Republican Party. His Health and Human Services director was a Big Pharma exec.[21] Most all were extraordinarily wealthy.

Not only do corporate millionaires and billionaires become powerful politicians and federal agency heads, many public officials retire and join corporate lobbying firms. The politicians who once at least put up a façade of serving the public make millions using their political connections to influence legislation to the benefit of corporations. It is called the “revolving door.” It is a two-way street of corruption and client politics. In 1974, only 3% of retiring Congressmen became lobbyists, but now it’s 50% of Senators and over 40% of House Representatives.[22] A 2012 article from the Nation reminded us, “Politicians never have to disclose job negotiations while in office, and never have to disclose how much they’re paid after leaving office,” leaving corporations free to

…secretly promise [politicians] a million dollars or more in pay if they come to work for [them] after they leave office. Once a public official makes a deal to go to work for a lobbying firm or corporation after leaving office, he or she becomes loyal to the future employer. And since those deals are done in secret, legislators are largely free to pass laws, special tax cuts, or earmarks that benefit their future employer with little or no accountability to the public.[23]

The average increase in salary for a lawmaker-turned-lobbyist in 2011 was 1,452%.[24] This is just an example of the rich getting richer, however. In 2009, nearly half of all 535 congressmen were millionaires, with a median net worth of $1.8 million for senators and over $620,000 for house representatives.[25] In 2012, over half of Congresspersons were millionaires.

It also takes money to preserve political careers, a large part of the problem. Congressmen spend 25% to 50% of their time in office fundraising, possibly more during election years. Even congressmen who have no chance of being voted out of office still are required to raise hundreds of thousands of dollars for their party, to be used to support tight races. Thus politicians spend enormous amounts of time at dinners where donors pay huge sums of money per plate, or on the phone asking for contributions, instead of focusing on legislation the people desire.[26]

The Center for Responsive Politics tracks lobbying and corporate spending to influence law, and found the financial and real estate sector spent nearly $500 million in 2013 alone. The health care industry spent about the same. The U.S. Chamber of Commerce alone spent nearly $75 million on lobbying, the National Association of Realtors $38.5 million, Blue Cross/Blue Shield $22.5 million. Thousands of firms poured a collective $3.21 billion into lobbying. Campaign coffers overflowed with legalized bribes: the 113th Congress got $30 million worth of contributions from law firms, $16.5 million from real estate firms, $14 million from insurance powers. Nearly 130 senior staff (aides and advisors who work for lawmakers) of the 112th Congress were former lobbyists. In 2018, the Trump administration included 164 former lobbyists. The White House and the Departments of Commerce, Defense, State, Health and Human Services, and Agriculture have each employed over 1,000 people who were once lobbyists or went on to become lobbyists. The CIA, the Army, the Federal Reserve, the Environmental Protection Agency, the Departments of Education, Treasury, Transportation—virtually every agency—is infested with officials with business associations and interests.[27]

This can have enormous effects. Take the construction of the transcontinental railroad, one of the most important achievements for the development of our nation. Railroad companies

became dependents on government, using their initial capital not to start construction, but to bribe legislators…the first transcontinental railroad was not built by laissez-faire. The railroad capitalists did it with government land and money…the Central Pacific, starting on the West Coast, got 9 million acres of free land and $24 million in loans (after spending $200,000 in Washington for bribes).

The Union Pacific railroad sold shares to congressmen at discounted rates because, as one congressman involved in the bribe said, “There is no difficulty in getting men to look after their own property” (Zinn, A People’s History of the United States)!

Indeed, the deals and favors border on the absurd. After Reagan removed controls on oil prices, essentially awarding $2 billion to the oil industry, twenty three oil executives donated over a quarter-million dollars to redecorate the White House living quarters; the owner of the Core Oil and Gas Company said, “The top man of this country ought to live in one of the top places. Mr. Reagan has helped the energy business.”[28] Lobbying is an extraordinarily important practice for oil and gas companies in the face of the environmentalist movement, as massive sums of cash help keep politicians in line with industry objectives and garner profitable subsidies. The industry spent nearly $41 million on politicians’ campaigns in 2013 and 2014. Total, the industry spent over $326 million lobbying the U.S. government. The government spent nearly $34 billion on the fossil fuel industry in the same time period, in the form of subsidies, a nice return on an investment.[29] University of Kansas Law School researchers found that for every dollar spent on lobbying, companies received $220 in tax breaks—a return of 22,000%.[30]

That is the corporate assault on our democracy. It is dangerous because in a democracy decision-making power is supposed to rest with the people, who send public officials to Washington to represent them. Those with greater wealth are not supposed to have more influence and control over the process. If the majority of the people want to protect the environment but oil companies do not, who should win?

 

II: The Corporate Assault on Human Beings

Yet the dangers of capitalist control of government are overshadowed by the physical perils of the profit motive (distinct from the theft that constitutes capitalistic exploitation). Corporate abuse harms and kills hundreds of thousands of innocent people worldwide each year and can work against positive social goals, like ending drug addiction, establishing safer workplaces, or protecting the environment (we’ve seen elsewhere the damage capitalism is doing to our planet). Corporate abuse takes place to increase profits, and weak regulations and harmless consequences allow it to continue.

Profit is why corporations sell addictive, deadly cigarettes, which kill more people than all illegal drugs combined. Profit is why tobacco companies kept knowledge of cancer and other dangers secret.[31] Profit is why the National Football League tried to bury findings on CTE, the brain injury many players sustain.[32] Profit is why Big Oil buried its own findings that manmade CO2 was contributing to climate change.[33] Profit is why the quality of fast food is so poor, why much of it is packed with dangerously addictive levels of sugar, salt, and fat, as well as chemical additives and preservatives. Profit is why innocent people are dropped from their health insurance coverage when they get sick or denied insurance when applying for it, resulting in tens of thousands of deaths each year.[34] Profit is why energy companies want inefficient modes of transit and electricity, and therefore fight tooth and nail against cleaner, more efficient forms of energy, higher MPG requirements, and stricter environmental standards. General Motors and Chevron bought up and destroyed Los Angeles’ public rail system to make way for their products.[35]

Laws with no teeth allow corporations to dump toxic waste or install garbage incinerators in poor minority areas, and to poison our air, water, and soil with pollutants, pesticides, and hydraulic fracturing (“fracking”) toxins. Profit is the reason drug companies “promote off-label or unapproved uses for their medicines through their salespeople and physicians,” resulting in tens of thousands of deaths each year.[36] It’s why drug companies focus research and development on medicine for minor problems that have to be bought continuously over a lifetime, and focus less on drugs for diseases like malaria, whose victims have no money.[37] It’s why some companies research ways to make their products wear out faster, so people have to buy more—“planned obsolescence.”[38] It’s why oil companies sometimes conspire to hold back production to keep prices up—this has been done not just by Arabian oil cartels but also by American firms.[39]

Weak regulations are why employers casually violate rules for worker safety, leading to everything from lead and asbestos poisoning to maiming, blindness, and death. “In the ’80s, the Reagan administration essentially informed the business world that it was not going to prosecute violations of OSHA regulations. As a result, the number of industrial accidents went up rather dramatically…working days lost to injury almost doubled from 1983 to 1986…”[40] In 2014, Congress changed safety rules for truck drivers, raising the number of hours per week an employee could drive from 70 to 82—despite recent deaths on the roads caused by exhausted truck drivers.[41] Businesses had money to make. In 2016, Oxfam reported that American workers in poultry plants were denied bathroom breaks so often that workers had to wear diapers. Oxfam said that “the cost of cheap chicken in the U.S. is workers who face low wages, suffer elevated rates of injury and illness and face a climate of fear in the workplace.” It reported that

…unnamed workers from Tyson Foods Inc., Pilgrim’s Pride Corp., Perdue Farms Inc. and Sanderson Farms Inc… said that supervisors mock them, ignore requests and threaten punishment or firing. When they can go, they wait in long lines even though they are given limited time, sometimes 10 minutes, according to the report. Some workers have urinated or defecated themselves while working because they can’t hold on any longer… Some workers “restrict intake of liquids and fluids to dangerous degrees”…[42]

Workers and undercover journalists report appalling conditions at Amazon warehouses, where too much deviation from the breakneck pace will get workers fired, forcing them to urinate in trashcans and bottles to avoid bathroom break penalties, some collapsing from exhaustion and leaving in ambulances. There exist penalties for sick days (like at Walmart), and wages are so low some workers resort to camping near the warehouses. Walmart and Amazon have patented systems to listen to employee conversations and track hand movements in real time, respectively. At Tesla factories, energy drinks are distributed to combat exhaustion, and not even a raw sewage spill under workers’ feet will stop production.

Employers often find it more profitable to put worker lives on the line and simply risk paying pennies in fines (illegal immigrants can have it even worse). Nader writes:

Roughly sixty thousand Americans die each year due to workplace-related toxins and trauma. OSHA has an annual budget of $550 million to diminish the occupational disease, death, and injury epidemic, but only a portion of that budget is used for actual inspections and enforcement. Violations that pose a substantial probability of death or serious injury incur an average penalty of only $910.

60,000 Americans a year. The International Labour Organization, a United Nations agency, estimates over 650,000 workers around the world die each year from workplace hazards and toxins; 160 million people grow ill.[43] No, not all these deaths are due to capitalist negligence in the name of profit – accidents happen, and many jobs are dangerous by nature – but some are. For example, from 2009 to 2010, 137 Apple workers were poisoned by inhaling hexane, a chemical in gasoline used to clean the glass cases on iPhones. Apple favored hexane over something safer, like alcohol, because hexane dries very quickly, meaning faster production.[44]

If it’s not the employees at risk, it’s the consumers. In the 1970s, after defective fuel tanks in Ford Pintos were revealed to explode in some accidents, Ford calculated that it would be cheaper to pay lawsuit settlements ($200,000 for each case) than recall and repair the cars ($137 million). Ford did not fix the problem. 180 innocent people died each year from explosions linked to the defective fuel tanks.[45] In 2015, the Justice Department declared GM had intentionally misled the public about its defective ignition switches, which killed 124 people. At the same time, Volkswagen was found to have installed software in its vehicles that could detect and trick emissions tests.

None of this is new. As capitalism matured, industrializing nations saw horrific suffering as armies of poor men, women, and children were worked to exhaustion in factories, plants, and mines. Dying or losing limbs on the job and starving to death at home were the realities for millions of human beings during the Industrial Revolution. Ordinary people saw their employers grow rich, while they were given barely enough to stay alive. Victor Hugo[46] in the 1880s told the rich of England:

The workers of this world whose fruits you enjoy live in death. There are little girls who begin at eight by prostitution, and who end at twenty by old age. Who among you have been to Newcastle-on-Tyne? There are men in the mines who chew coal, to fill their stomach and cheat hunger. Look you in Lancashire. Misery everywhere. Are you aware that the Harlech fishermen eat grass when the fishery fails? Are you aware that at Burton- Lazers there are still certain lepers driven into the woods, who are fired at if they come out of their dens? In Peckridge there are no beds in the hovels, and holes are dug in the ground for little children to sleep in; so that, in place of beginning with the cradle, they begin with the tomb.[47]

In 1904, 27,000 American workers were killed at work; in 1914, 35,000 died in industrial accidents.[48] In the U.S. and across the world, workers had to organize, unionize, strike, protest, and riot for government regulations, for safer working conditions, decent pay, shorter days, weekends, the end of child labor, and equal opportunity and treatment for minorities and women.

At times the deaths of employees can be profitable to capitalists in a more direct way. “Dead peasant insurance” (or “corporate-owned life insurance”) is used when a corporation takes out a life insurance policy on an employee or former employee and receives cash upon his or her death. It was originally a way to insure the lives of top executives and buffer against turmoil and collapse in the case of an executive death, but it was later extended to cover even the lowest-paid employees because it was profitable to do so. Capitalism: A Love Story stresses this is a common practice in corporate America, with Wal-Mart, Procter & Gamble, Bank of America, AT&T, and Citibank among the many guilty firms. It tells the tale of Daniel Johnson, whose employer received $1.5 million upon his death, and explains how corporate owners compare worker deaths and insurance rewards against “expected mortality” estimates to increase the efficacy and profitability of the system. From a 2002 Wall Street Journal report we learned that when former employee Filipe Tillman died of AIDS, Camelot Music collected $339,302; when store clerk William Smith was murdered at work, National Convenience Stores collected $250,000; when nurse Peggy Stillwagoner died in a car wreck, Advantage Medical Services collected $200,000.[49] It is difficult to call our society civilized when corporations actively find ways to profit from worker deaths. Government regulation in 2006 required employers to get employee consent before taking out a policy and restricted the use to higher-paid employees. But this effort was weak, as it left a deplorable practice completely legal. In 2011, the owner of an oil-change business tried to hire a hit man to murder a former employee so the owner could collect $250,000.[50]

A 2016 CBS News investigation found mass fraud throughout the life insurance industry. Firms like MetLife, Prudential, and John Hancock didn’t pay death benefits to family members of the deceased who weren’t aware they were beneficiaries. Instead of honoring the deceased, who paid for the policies to make sure their families would have money in case something happened to them, the companies cancelled the unclaimed policies and kept the sums. Millions of such policies were wrongfully and knowingly cancelled, saving the companies billions. 25 companies settled lawsuits and paid $7.5 billion in owed death benefits. 35 more were under investigation that year.[51]

Clearly, the interests of corporations and the interests of the people are not the same.

 

Notes

[1] http://www.opensecrets.org/news/2008/11/money-wins-white-house-and/

[2] Zinn, A People’s History of the United States, 548

[3] https://www.opensecrets.org/news/2010/11/democrats-and-republicans-sharing-b/

[4] Einstein, Why Socialism?

[5] http://time.com/4148838/koch-brothers-colleges-universities/

[6] Frank, What’s the Matter With Kansas?, 86-88

[7] Nader, Seventeen Solutions

[8] Maass, Case for Socialism, 93.

[9] Chomsky, The Common Good, 73

[10] http://www.nytimes.com/2014/05/04/magazine/only-one-top-banker-jail-financial-crisis.html?_r=0

[11] http://www.dailykos.com/story/2012/05/18/1092100/-Bernie-Sanders-Congress-doesn-t-regulate-banks-banks-regulate-congress-Must-see

[12] Zinn, People’s, 288

[13] Zinn, People’s 559-560

[14] Nader, Seventeen Solutions

[15] http://www.nytimes.com/interactive/2013/10/29/business/dealbook/29lobbyists-documents.html, http://www.motherjones.com/politics/2013/10/citigroup-bill-passes-house/

[16] http://www.motherjones.com/politics/2002/09/ghostwriting-law/

[17] http://www.rawstory.com/rs/2013/08/19/oligarchic-tendencies-study-finds-only-the-wealthy-get-represented-in-the-senate/

[18] http://www.msnbc.com/msnbc/the-us-no-longer-democracy

[19] Zinn, People’s, 575

[20] http://business.time.com/2013/05/02/tom-wheeler-former-lobbyist-and-obama-fundraiser-tapped-to-lead-fcc/

[21] http://www.marieclaire.com/politics/a23922/donald-trump-cabinet-appointments/; https://www.axios.com/alex-azar-made-millions-in-the-drug-industry-1513307070-2fdf898e-f5a1-409e-a7bf-53d5535a5f1b.html

[22] http://www.nytimes.com/2013/07/28/books/review/this-town-by-mark-leibovich.html?pagewanted=all

[23] http://www.thenation.com/article/166809/when-congressman-becomes-lobbyist-he-gets-1452-percent-raise-average#

[24] http://www.thenation.com/article/166809/when-congressman-becomes-lobbyist-he-gets-1452-percent-raise-average#

[25] Alan Maass, Case for Socialism, 106

[26] https://www.youtube.com/watch?v=Ylomy1Aw9Hk

[27] http://www.opensecrets.org/influence/; https://www.opensecrets.org/news/2018/07/revolving-door-update-trump-administration/

[28] Zinn, People’s, 577

[29] http://priceofoil.org/fossil-fuel-industry-influence-in-the-u-s/

[30] http://archive.news.ku.edu/2009/april/9/taxlobbying.shtml

[31] https://www.cbsnews.com/news/big-tobacco-kept-cancer-risk-in-cigarettes-secret-study/

[32] https://www.scientificamerican.com/article/how-the-nfl-worked-to-hide-the-truth-about-concussions-and-brain-damage-excerpt/

[33] https://gsgriffin.com/2016/12/08/even-oil-companies-know-global-warming-is-man-made/

[34] https://gsgriffin.com/2017/06/14/free-market-healthcare-is-immoral/

[35] Chomsky, Common Good, 59

[36] Nader, Seventeen Solutions

[37] Imagine, 181

[38] Imagine, 181

[39] Zinn, People’s, 549

[40] Chomsky, Common Good

[41] http://socialistworker.org/2014/12/18/washingtons-presents-1-percent

[42] http://www.bloomberg.com/news/articles/2016-05-11/poultry-workers-in-diapers-as-bathroom-breaks-denied-oxfam-says

[43] http://www.ilo.org/public/english/region/eurpro/moscow/areas/safety/statistic.htm

[44] Imagine: Living in a Socialist USA, 232

[45] Wright, Envisioning Real Utopias, 74

[46] How socialist was Hugo? See http://isreview.org/issue/89/enduring-relevance-victor-hugo

[47] Hugo, “The Rich”

[48] Zinn, People’s, 327

[49] http://online.wsj.com/public/resources/documents/april_19.htm

[50] http://www.foxbusiness.com/personal-finance/2014/06/26/does-sneaky-boss-have-life-insurance-on/

[51] http://www.cbsnews.com/news/60-minutes-life-insurance-investigation-lesley-stahl/

How Racism and Illegal Immigration Benefit Capitalism

Both racism and illegal immigration have been enormously beneficial to capitalism.

In human history, the idea of biological inferiority only became widespread alongside the rise of the African slave trade, as traders and merchants needed a justification for the enslavement of millions of people who were neither prisoners of war nor individual debtors (the traditional justifications for slavery among Europeans). Perpetuating the myth that blacks were little better than animals allowed organizers and participants in the slave trade to reap colossal profits from free labor with impunity. Racism served the monetary interests of a certain few.

Even after slavery ended, racism was used to justify further oppression and wage theft by the capitalist class. Just as emancipation would mean the end of free labor for slave-owners, human equality would force business owners to pay blacks the same wages as whites. Racism served to prevent this, just as sexism and xenophobia prevented the same for women, undocumented immigrants, and non-whites in general. In Communism and the Negro (1933), New Yorker Max Shachtman (head of the Worker’s Party) wrote:

The ruling class is in urgent need of the theory of racial inferiority… It affords them a moral justification for the super-exploitation and persecution to which it subjects the Negro. If trifling sums are allocated for Negro education, he is, after all, “only a nigger.”; if housing conditions are abominable, if the Negro is scandalously underpaid, if he is deprived of every democratic right, he is, after all, an inferior who does not deserve or require better; if he is hanged from a tree and riddled with bullets, or soaked with oil and burned to death by a mob of savages, it is, after all, “only a nigger” who suffers.[1]

Racism served capitalists a second way: it discouraged workers of different colors from uniting and unionizing to push for higher wages, shorter workweeks, or more decent working conditions and treatment. There was racial hostility in the competition for work, and corporations often responded to strikes by hiring unemployed blacks to replace white strikers, as they could pay them dismal wages with less threat of resistance. The racial tension and violence this created impeded the progress of interracial organizing and helped keep the working class poor.

Prominent black leaders saw the connection between racism and capitalism. Malcolm X said, “You can’t have capitalism without racism”; Stokely Carmichael said, “Racism gets its power from capitalism”; and Dr. King said, “The evils of racism, economic exploitation, and militarism are all tied together.”[2] They knew that racism served capitalists’ financial interests, whether consciously or as a matter of course.

Illegal immigration has likewise enormously benefited capitalism, both in the U.S. and worldwide, in a similar way to how racism benefits capitalism. In the U.S. it is illegal to hire undocumented workers; employers do so regardless, particularly in the manufacturing, construction, agriculture, restaurant, and service sectors.

Illegal immigrants are some of the most exploited workers in history. (See Amnesty Solves Conservative Criticisms of Illegal Immigration for more on this general topic.) With employers holding the power to fire or turn them in to the authorities, undocumented workers face dismal pay, harsh working conditions, and an inability to organize and unionize to improve their position. They are not entitled to a minimum wage, nor benefits, nor overtime, nor child labor protections, nor in most states injury compensation. In 2008 authorities discovered children as young as 13 working in an Iowa meatpacking plant, and beaten and bruised adults working 17-hour days.[3]

Alan Maass writes:

For corporations and the U.S. political establishment, immigration has nothing to do with making opportunities available to the world’s poor and suffering. Like slavery in an early era, the key is how immigration guarantees a pool of cheap and easily controlled labor.

If you look at the history of the United States, the idea that immigration controls and border security are about keeping immigrant labor out is laughable. For two centuries, one group after another was encouraged to move to the United States under conditions of illegality, and be the scapegoat at the bottom of the heap. Irish, Jews, Germans, Swedes, southern Italians, Eastern Europeans, Asians, Mexicans, Central Americans, Muslims…[4]

Capitalists can increase their profits by taking advantage of millions of people, again whether intentionally or as a natural, inadvertent consequence. Capitalism benefits from a steady flow of illegal immigrants.

It is very interesting to note that in this case the ideology of anti-immigrant conservatives does not align with the interests of capitalist power. So often conservatism serves corporate interests, such as the hostility toward environmental protection regulations and the opposition to the minimum wage.

But here racism benefits capitalism in one way and hurts it in another. Virulent racism allowed for the super-exploitation of certain groups of people, but also created masses of racist people who opposed the arrival of blacks, Jews, Greeks, Italians, Hispanics, etc. throughout American history. Most all non-Western European immigration, legal and illegal, has been opposed because of bigotry at various times. The current anti-immigrant hysteria certainly has a racial component. In sum, while capitalism benefits from illegal immigration the same racism that also benefits capitalism encourages people to oppose illegal immigration, screaming for deportation, patrolling borders as vigilantes, and calling for the construction of massive walls.

 

Notes

[1] Schachtman, Communism and the Negro

[2] Malcolm X, remarks at Militant Labor Forum Symposium, May 29, 1964; https://www.youtube.com/watch?v=tug8RJyLoz0; Martin Luther King Jr., Beyond Vietnam: Breaking the Silence

[3] http://www.alternet.org/story/94703/exploited%3A_the_plight_of_the_undocumented_worker

[4] Maass, The Case for Socialism

The Socialists

“My socialism was natural to me and not adopted from any books. It came out of my unshakable belief in non-violence. No man could be actively non-violent and not rise against social injustice, no matter where it occurred.”

India of My Dreams (1947), Gandhi

 

“I am convinced there is only one way to eliminate these grave [capitalistic] evils, namely through the establishment of a socialist economy, accompanied by an education system which would be oriented toward social goals.”

Why Socialism? (1949), Albert Einstein

 

“How did I become a socialist? By reading.”

How I Became a Socialist (1912), Helen Keller

 

“If we are to achieve a real equality, the U.S. will have to adopt a modified form of socialism.”

Letter from the Selma, Alabama jail (1965), Martin Luther King, Jr.

 

“I was already It, whatever It was, and by aid of the books I discovered that It was a Socialist. Since that day I have opened many books, but no economic argument, no lucid demonstration of the logic and inevitableness of Socialism affects me as profoundly and convincingly as I was affected on the day when I first saw the walls of the Social Pit rise around me and felt myself slipping down, down, into the shambles at the bottom.”

How I Became a Socialist (1905), Jack London

 

“Every line of serious work that I have written since 1936 has been written, directly or indirectly, against totalitarianism and for democratic Socialism, as I understand it.”

Why I Write (1946), George Orwell

 

“Doesn’t anything socialistic make you want to throw up? Like great public schools or health insurance for all?”

A Man Without A Country (2005), Kurt Vonnegut

 

“It is true, as I have already stated, that I have been influenced by Marxist thought. But this is also true of many of the leaders of the new independent States. Such widely different persons as Gandhi, Nehru, Nkrumah, and Nasser all acknowledge this fact. We all accept the need for some form of socialism to enable our people to catch up with the advanced countries of this world and to overcome their legacy of extreme poverty.”

In His Own Words (2003), Nelson Mandela

 

“Socialism is the preparation for that higher Anarchism; painfully, laboriously we mean to destroy false ideas of property and self, eliminate unjust laws and poisonous and hateful suggestions and prejudices, create a system of social right-dealing and a tradition of right-feeling and action. Socialism is the schoolroom of true and noble Anarchism, wherein by training and restraint we shall make free men.”

New Worlds for Old (1908), H.G. Wells

 

“I have become a Communist because our party strives more than any other to know and to build a better world, to make men clearer thinkers, more free and more happy.”

Why I Joined the Communist Party (1944), Pablo Picasso

 

“If being a communist or being a capitalist or being a socialist is a crime, first you have to study which of those systems is the most criminal. And then you’ll be slow to say which one should be in jail.”

Malcolm X Speaks (1965), Malcolm X

 

“I am too artistic to deal with money in any way, basically. I am a socialist who just happens to be getting this money.”

The Playboy interviews (1981), John Lennon

 

“The American People will take Socialism, but they won’t take the label. I certainly proved it…running on the Socialist ticket I got 60,000 votes, and running on the slogan to ‘End Poverty in California’ I got 879,000.”

Letter to Norman Thomas (1951), Upton Sinclair

 

“Disobedience, in the eyes of any one who has read history, is man’s original virtue. It is through disobedience that progress has been made, through disobedience and through rebellion.”

The Soul of Man Under Socialism (1895), Oscar Wilde

 

“Socialism was reason.”

Timebends: A Life (1987), Arthur Miller

 

“The Revolution evaporates, and leaves behind only the slime of a new bureaucracy. The chains of tormented mankind are made out of red tape.”

To Gustav Janouch in Conversations with Kafka (1971), Franz Kafka

 

“A completely socialistic result depends on who does the planning and for what ends. A state socialism planned by the rich for their own survival is quite possible, but it is far from the state where the rule rests in the hands of those who produce wealth and services and whose aim is the welfare of the mass of the people.”

If Eugene Debs Returned (1956), W.E.B Du Bois

Successes of U.S. Government Planning

We often hear that, from the schools to the mail, the government cannot be trusted to successfully run anything. The prevailing attitude seems to be that government initiatives fail because it is the nature of government initiatives to fail.

While there are many government efforts that need to be purged of corruption and inefficiency, this attitude ignores how successfully the U.S. and other advanced nations have used indicative planning, the hiring of citizens or corporations, to help achieve their goals. Indicative planning means investing tax dollars in specific industries. When government projects are successfully funded and run by skilled people, the results can be astounding.

For example, Ralph Nader writes in The Seventeen Solutions, “Few people know that much of the modern pharmaceutical, aerospace, biotechnology, agronomy, computer, containerization, and detection industries flow from R&D [government research and development], enabled and funded by the taxpayer.” The government poured money into these industries, contracting with companies, universities, organizations, and individuals to research, design, and build for them everything from computer systems to drugs to cruise missiles. Today, we lead the world in these fields.

Does anyone find it a coincidence that our nation spends more money on its military than any other and has the most powerful and advanced bombs, planes, tanks, and ships? Is it coincidence that poorly-funded urban public school districts struggle while well-funded suburban public school districts thrive? Could it be that government-run projects can actually be quite successful if prioritized?

The truth is most advanced capitalist governments plan, investing in key industries (such as computers, pharmaceuticals, energy, or weapons) and infrastructure development (highways, roads, bridges, dams, public transportation). This is accomplished by “working with, rather than against, the private sector.” Governments use a carrot (such as subsidies) and stick (regulations) approach to achieve their goals.

During the Great Depression, President Roosevelt’s Works Progress Administration, Civil Works Administration, and Civilian Conservation Corps hired some 15.5 million people to build roads, bridges, schools, hospitals, museums, and zoos; to garden, plant trees, fight fires, reseed land, save wildlife, and sew; to undertake art, music, drama, education, writing, and literacy projects. Similar federal initiatives have occurred since, such as the Comprehensive Employment and Training Act of the 1970s, which employed 750,000 people by 1978. In countless other programs, like the Public Works Administration of the 1930s, the U.S. government indirectly created jobs by paying businesses to tackle huge projects. Construction of the Interstate Highway System in the 1950s and 60s entailed the federal government funding the states, which either expanded their public workforces or contracted with private companies.

Economist Ha-Joon Chang writes, “Planning in certain forms is not incompatible with capitalism and may even promote capitalist development very well.” Free-market ideologues are misguided in thinking any planning whatsoever slows economic growth. Even bureaucratic central planning can be “successful,” meaning accomplishing what the planners intended. Planning worked well in the first stages of Soviet industrialization, “where the main task was to produce a relatively small number of key products in large quantities (steel, tractors, wheat, potatoes, etc.)” and unemployment was eliminated.

Harman writes, “For 30 years Stalinist methods produced more rapid rates of economic growth than those experienced anywhere else in the world—except perhaps Japan.”[1] Russia saw success advancing militarily, unsurprising considering the vast resources and manpower wasted on such efforts. One of the most backward, rural nations on earth became a superpower in a very short period of time through central planning. In fact, the Soviet model was based on the war economies of Germany, Britain, the U.S., and others, whose governments planned virtually all economic activity during World War II. Doing so was crucial to the Allied victory.

In the early 1950s, the Chinese copied Stalinist methods, controlling all resources and workers, and from 1954-1957 had a growth rate of 12% a year—in 1958-1959 it was nearly 30%.[2] It is not that bureaucratically planning the economy is impossible; it’s that State power is too dangerous. Authoritarian bureaucracy wiped out human freedoms, oppressed foreign peoples, slaughtered armies of innocent people, and bred widespread poverty. Had the planners aimed to eradicate disease, hunger, and homelessness, they could have done so. But money spent on nuclear bombs and space programs cannot be spent on food and homes. The Cuban government knew that it could not hope to compete with the United States militarily, so its central planners had the resources to pour into health care. Today, Cuba has high-quality universal health care and is a global leader in biochemical and pharmaceutical research.[3]

Indicative planning has also been quite successful in other nations. The world’s rich nations did not grow rich despite planning, but in many ways because of it. France overtook Britain as Europe’s second most powerful industrial nation by promoting investment and technological innovation in the 1950s and 60s. Finland, Norway, and Austria used careful indicative planning to boost their economies between 1950 and 1970. In the 1950s through the 80s, Japan, Korea, and Taiwan followed suit.[4]

Large U.S. government investment in research and development gave us a technological lead internationally in military and tech fields; we invest more in R&D than most other capitalist nations, making us one of the most planned on earth. Capitalist economies have greatly benefited from government planning in certain sectors when goals are clear, simple, and contracted voluntarily.

Nader writes in The Seventeen Solutions of a powerful instance of planning in action:

One telling example comes out of the Vietnam War, when the second cause of hospitalization for U.S. soldiers was malaria. The Department of Defense could not interest the drug companies in doing research to develop more effective pharmaceuticals against this debilitating disease; there simply wasn’t much profit in such an effort. So the Pentagon started what in effect was its own drug company at Walter Reed Army Medical Center and Bethesda Naval Hospital. With minuscule budgets, officers with PhDs and MDs went to work on the problem. Their productivity was remarkable, their results published in peer-reviewed scientific journals. By 2000, three of the four most widely used antimalarial drugs used in the world had come out of this Pentagon unit, along with other important, clinically-tested medicines.

Investment and planning spark innovation and build up private industries. The government demands, the market supplies. With an appropriate social goal, committed and qualified experts, and (sometimes even minuscule) funds, the U.S. produced medicines that saved lives. In the same way, the government funded a group of scientists and engineers to construct an atom bomb to destroy lives during the Manhattan Project; the goal was planned and executed in brilliant and terrifying fashion.

In an interview with The Atlantic, Bill Gates called the free market “in general inept” when it comes to developing clean energy because “energy moves very slowly.”

For energy as a whole, the incentive to invest is quite limited, because unlike digital products—where you get very rapid adoption and so, within the period that your trade secret stays secret or your patent gives you a 20-year exclusive, you can reap incredible returns—almost everything that’s been invented in energy was invented more than 20 years before it got scaled usage. So if you go back to various energy innovators, actually, they didn’t do that well financially. The rewards to society of these energy advances—not much of that is captured by the individual innovator, because it’s a very conservative market.

Thus it is useful for the government to step in and spur development through indicative planning. Gates said since “there’s no fortune to be made…without a substantial carbon tax, there’s no incentive for innovators or plant buyers to switch” to clean energy. He recommended “tripling” “government-funded energy R&D.” “Since World War II, U.S.-government R&D has defined the state of the art in almost every area” of energy development, and “the overall record for the United States on government R&D is very, very good”; here Gates cites the Manhattan Project, pharmaceutical research, cancer research, Internet and computer chip technology, and so on.[5]

 

 

Notes

[1] Harman, People’s History of the World, 560

[2] Harman, People’s History of the World, 573

[3] Imagine, 185-186

[4] Ha-Joong Chang, 23 Things They Don’t Tell You About Capitalism

[5] http://www.theatlantic.com/magazine/archive/2015/11/we-need-an-energy-miracle/407881/

Socialismo: The Marxist Victories in Spain

In the 1930s, labor leaders and workers in Spain formed communes where a general assembly elected members of a governing committee. Most of these members performed the same tasks as everyone else, but met at the end of the day to discuss, organize, and plan. Both the committee and regular workers could call for a general assembly meeting. Within the communes there was an emphasis on educating oneself by studying the arts and sciences while off-duty. Workers were paid only for working; there were no handouts. There were thousands of communes and hundreds of thousands of members.[1]

1931 saw the end of Spain’s monarchy, and in 1936 the Popular Front ousted conservatives from power. The common people celebrated by freeing prisoners, refusing to pay rent to landlords, and seizing land from owners and working it for themselves. When General Francisco Franco attempted to seize power in a coup, Madrid, Barcelona, and most other major cities erupted into violence as the people stole weapons from armories and attacked Franco’s forces. It was a storm of such fury that in many places, like Aragon, Castile, the Levant, Catalonia, and Andalusia, the authorities found that

…they simply not longer existed. The State, the police, the army, the administration, all seemed to have lost their raison d’être. The Civil Guard had been driven off or liquidated and the victorious workers were maintaining order… committees distributed foodstuffs from barricades transformed into canteens, and then opened communal restaurants. Local administration was organized by neighborhood committees, and war committees saw to the departure of the workers’ militia to the front.[2]  

George Orwell joined the anarchists. He wrote of Barcelona:

It was the first time that I had ever been in a town where the working class was in the saddle. Practically every building of any size had been seized by the workers and was draped with the red and black flag of the Anarchists… Every shop and cafe had been collectivized… Waiters and shop-walkers looked you in the face and treated you as an equal.[3]

Rudolf Rocker wrote, “Everyone who visited Barcelona…was surprised at the freedom of public life and the absence of any arrangements for suppressing the free expression of opinion.”[4]

Orwell wrote of Aragon:

I had dropped more or less by chance into the only community of any size in Western Europe where political consciousness and disbelief in capitalism were more normal than their opposites. Up here in Aragon one was among tens of thousands of people, mainly though not entirely of working-class origin, all living at the same level and mingling on terms of equality. In theory it was perfect equality, and even in practice it was not far from it. There is a sense in which it would be true to say that one was experiencing a foretaste of Socialism, by which I mean that the prevailing mental atmosphere was that of Socialism. Many of the normal motives of civilized life – snobbishness, money-grubbing, fear of the boss, etc. – had ceased to exist. The ordinary class-division of society had disappeared to an extent that is almost unthinkable in the money-tainted air of England; there was no one there except the peasants and ourselves, and no one owned anyone else as his master. Of course such a state of affairs could not last. It was simply a temporary and local phase in an enormous game that is being played over the surface of the earth. But it lasted long enough to have its effect upon anyone who experienced it. However much one cursed at the time, one realized afterwards that one had been in contact with something strange and valuable. One had been in a community where hope was more normal than apathy or cynicism, where the word ‘comrade’ stood for comradeship and not, as in most countries, for humbug. One had breathed the air of equality. I am well aware that it is now the fashion to deny that Socialism has anything to do with equality. In every country in the world a huge tribe of party-hacks and sleek little professors are busy ‘proving’ that Socialism means no more than planned state-capitalism with the grab-motive left intact. But fortunately there also exists a vision of Socialism quite different from this. The thing that attracts ordinary men to Socialism and makes them willing to risk their skins for it, the ‘mystique’ of Socialism, is the idea of equality; to the vast majority of people Socialism means a classless society, or it means nothing at all.[5]

Membrilla was “perhaps the poorest village of Spain, but…the most just.” It had an elected council that established committees to oversee village life. Food, clothing, and tools were passed out equally, and money was abolished.[6]

Despite many challenges, like government restriction of credit, the socialist communities performed well economically; they even had social projects for the elderly, children, and disabled.[7] Unfortunately, the Spanish anarchists were bitterly divided over whether to take part in national politics, and those that did were forced into an alliance with political parties (and even Stalin in Russia) to survive against Franco.[8] In the end, Franco was victorious, crushed the popular movement and the communes, and reigned as dictator for 36 years. The anarchist committees and collectivized workplaces were dismantled “with the same energy as in the U.S.S.R.”[9] Picasso, who once said, “I am a Communist and my painting is Communist painting,”[10] depicted the ruin Franco brought to Spain in his drawing The Dream and Lie of Franco.

Picasso wrote in Why I Joined the Communist Party (1944), “I have become a Communist because our party strives more than any other to know and to build a better world, to make men clearer thinkers, more free and more happy.”

Socialism in Spain and the early Soviet Union did not fail because it is in the nature of socialism to fail. It was crushed by external forces. People desire to own their workplaces communally and run them democratically, and can do so successfully indefinitely, but this is unlikely to succeed long-term unless the workers also own the government. A State controlled by the few, by political parties, the upper class, capitalists, authoritarian socialists, or fascists, will pose a severe threat to anticapitalist enterprises.

Marx saw cooperatives as a

…victory of the political economy of labor over the political economy of property. We speak of the co-operative movement, especially the co-operative factories raised by the unassisted efforts of a few bold “hands.” The value of these great social experiments cannot be overrated. By deed instead of by argument, they have shown that production on a large scale, and in accord with the behests of modern science, may be carried on without the existence of a class of masters employing a class of hands; that to bear fruit, the means of labor need not be monopolized as a means of dominion over, and of extortion against, the laboring man himself; and that, like slave labor, like serf labor, hired labor is but a transitory and inferior form, destined to disappear before associated labor plying its toil with a willing hand, a ready mind, and a joyous heart.

But he knew that capitalist political power would stand in the way.

To save the industrious masses, co-operative labor ought to be developed to national dimensions, and, consequently, to be fostered by national means. Yet the lords of the land and the lords of capital will always use their political privileges for the defense and perpetuation of their economic monopolies. So far from promoting, they will continue to lay every possible impediment in the way of the emancipation of labor…. To conquer political power has, therefore, become the great duty of the working classes.[11]

Today, socialism has reemerged in Spain.

Take the Mondragon Cooperative Corporation, one of Spain’s most profitable companies. Mondragon has 85,000 workers in a network of over one hundred cooperatives. No, it is not a perfect democratic workplace. It owns traditional companies in low-wage countries, where workers are not owners nor voters. Only 40% of its workers are worker-owners, democracy is nevertheless stronger than in capitalist firms.[12] Yet the ratio between the highest salary and the lowest is 6.5 to 1. In rough economic times, worker-owners decide democratically how much their pay should be reduced or how many fewer hours they should work.[13] Capitalist dictators are not around to fire people en masse. Further, Mondragon has the ability to transfer workers or wealth from successful cooperatives to ones that are struggling. Mondragon was founded in the 1950s, but not one of its companies went out of business or bankrupt until the board of directors voted to allow one to do so in 2013.

Spain also boasts a “little communist village,” Marinaleda, population 2,700. Since the late 1970s, Marinaleda, located in one of Spain’s poorest regions, transformed itself. It had over 60% unemployment, and many went without food for days. Largely thanks to the efforts of longtime mayor Juan Manuel Sánchez Gordillo—who as mayor organized occupations of military-owned land, the takeover of a palace, hunger strikes, a march across Spain to urge other mayors not to pay city debts, and the raiding of supermarkets for food like rice and beans to help the starving—Marinaleda is often called a utopia. Unemployment doesn’t exist, as anyone can work for the farming cooperative, which divides up profits to all workers, but reinvests surpluses to expand employment. Residents work six and a half hours a day for double Spain’s minimum wage. Crops like wheat are avoided: “wheat could be harvested with a machine, overseen by a few laborers; in Marinaleda, crops like artichokes and tomatoes were chosen precisely because they needed lots of labour. Why, the logic runs, should “efficiency” be the most important value in society, to the detriment of human life?”[14] The town has a handful of privately-owned enterprises that exist alongside the cooperative. While there is no unemployment here, the region as a whole—Andalusia—has mass unemployment, 36% in 2013 (55% for those 24 and younger). Other towns, like Somonte, have taken note and are copying Marinaleda’s farming cooperative.[15] After Spain’s housing crash, residents of Marinaleda could get a new home built for free, only paying about $19 a month afterwards for the rest of their lives—the home cannot be sold.[16]

 

 

Notes

[1] Guerin, 122, 134

[2] Guerin, 127

[3] Orwell, Homage to Catalonia

[4] Chomsky, Anarchism, 55

[5] Orwell, Homage to Catalonia

[6] Chomsky, Anarchism, 100

[7] Chomsky, Anarchism, 64-65

[8] Guerin, 128-129

[9] Chomsky, Anarchism, 54

[10] http://books.google.com/books?id=OJTKZeXaUvkC&pg=PA140&lpg=PA140&dq=%22a+communist+and+my+painting%22&source=bl&ots=SBRP93ZjFy&sig=jF1BvBvqrZ3iYfGq3sIDHywWhZY&hl=en&sa=X&ei=c5NpU4rNC-mfyQH_vIHgBw&ved=0CDAQ6AEwAQ#v=onepage&q=%22a%20communist%20and%20my%20painting%22&f=false

[11] See Guerin

[12] See Wright, 240-246.

[13] Imagine, 78.

[14] http://www.theguardian.com/world/2013/oct/20/marinaleda-spanish-communist-village-utopia

[15] http://www.theguardian.com/world/2013/oct/20/marinaleda-spanish-communist-village-utopia

[16] http://www.bbc.com/news/world-europe-22701384

How Capitalism Causes Economic Crises

In “How Capitalism Exploits Workers,” we saw how capitalism distributes wealth away from the many who create it and into the hands of the few. What went unstated was how this causes economic failure.

To keep the economic system running effectively, wages must rise with profits and productivity. Marx stressed, “The ultimate reason for all real crises always remains the poverty and restricted consumption of the masses.”[1] Economist Nouriel Roubini writes:

At some point, capitalism can destroy itself. You cannot keep on shifting income from labor to capital without having an excess capacity and a lack of aggregate demand…the firm, to survive and thrive, can push labor costs more and more down, but labor costs are someone else’s income and consumption. That’s why it’s a self-destructive process.[2]

In other words, if corporations (the producers) get wealthier and the common people (the consumers) do not, the natural result is too much production capacity and not enough consumption. The people cannot afford the goods of booming industry, goods created by their own labor! The accumulation of profit without a proportionate rise in wages leads to economic contraction, and with it greater poverty for the masses and lower profits for corporations.

The booms and busts of the economy, times of prosperity (for some at least) followed by times of widespread unemployment, falling wages, foreclosure, homelessness, and hunger, are built into the system. “The history of capitalism is a history of periodic lurches into crisis, into the insanity of unemployed workers going hungry outside empty factories, while stocks of ‘unwanted’ goods rot.”[3] Conservative economists argue crises are caused by government meddling in the free market, such as the swelling of the money supply. While this can indeed have harmful effects (the Federal Reserve printing out billions devalues the dollar and leads to runaway inflation), it is not the cause of economic crises. Neither is government control of bank interest rates, or other forms of State regulation of the free market. The free market puts itself into crisis. It is important to remember there are certain ideologies that are very useful to the wealthy and powerful, and are peddled by them in every sector of society. In an In These Times article, David Harvey writes:

The steady decline in labor’s share of national income since the 1970s derived from the declining political and economic power of labor as capital mobilized technologies, unemployment, off-shoring and anti-labor politics (such as those of Margaret Thatcher and Ronald Reagan) to crush all opposition. As Alan Budd, an economic advisor to Margaret Thatcher confessed in an unguarded moment, anti-inflation policies of the 1980s turned out to be “a very good way to raise unemployment, and raising unemployment was an extremely desirable way of reducing the strength of the working classes… What was engineered there in Marxist terms was a crisis of capitalism which recreated a reserve army of labour and has allowed capitalists to make high profits ever since”…

Many thought that lack of effective demand underpinned the Great Depression of the 1930s. This inspired Keynesian expansionary policies after World War II and resulted in some reductions in inequalities of incomes (though not so much of wealth) in the midst of strong demand-led growth. But this solution rested on the relative empowerment of labor and the construction of the “social state”… By the end of the 1960s it became clear to many capitalists that they needed to do something about the excessive power of labor. Hence the demotion of Keynes from the pantheon of respectable economists, the switch to the supply side thinking of Milton Friedman, the crusade to stabilize if not reduce taxation, to deconstruct the social state and to discipline the forces of labor.[4]

Despite the reasons the upper class provides, it is the under-consumption caused by low wages and the competition of capitalists that cause depressions. The competitive spending between firms sets the stage for a terrible collapse. As Einstein wrote, “The profit motive, in conjunction with competition among capitalists, is responsible for an instability in the accumulation and utilization of capital which leads to increasingly severe depressions.”[5]

In years when borrowing rates are low, raw materials cheap, worker wages pitiful, new technology available, capitalists see a chance to increase their profits, expand their businesses and market share, and destroy competitors. They stampede into investment all at once, building new factories, buying new land, technologies, and raw materials, and hiring workers. This is the boom time. Firms benefit from the spending of all other firms. Each firm can sell more to some and buy more from others, and profits rise. Many unskilled workers find employment. Skilled workers often see a rise in wages. Consumers are spending more money. Production takes off, and the economy prospers.[6]

But all good things must come to an end. Massive competitive demand eventually creates shortages in and thus raises the prices of raw materials, technology, land, available loans, skilled employees, and so on, which starts eroding profits. These increased costs raise the prices of consumer goods, and consumers buy less. During the boom time, after all, most of the new wealth and prosperity went to the capitalists at the top of society. The consumer base benefited a little, but not enough to prevent what’s about to occur. Quickly, the capitalists stampede out of investment. They saw the writing on the wall. Production is scaled back. Workers are fired. Rising unemployment then cripples consumption further – winding down production, cutting pay or hours, and letting employees go all deepen the crisis, rather than pull the economy out of it. Things spiral downward. Depression sets in.[7]

The result is a huge waste of both our productive capacity and human talent. During the recession beginning in 2008, about 30% of our industrial capacity stood idle.[8] Excess goods typically go to waste because no profit can be made from them – people cannot afford them. Workers desperately need work, and much work needs to be done to better society, but they will not find it from capitalists. Corporations sit on their money, refusing to invest. National wealth stays with the capitalists, as the pockets of the majority empty to stay alive. More and more people fall into debt, and are forced to compete with millions of others for dismal jobs, forcing down wages further. The larger employers will survive the crises intact, until eventually low interest rates, low worker wages, and cheaper raw materials begin the process again.[9]

A system where the production of wealth is controlled by the profit-driven few causes economic instability. Since industrial capitalism arose 200 years ago, the advanced capitalist nations of the world have been devastated by crises in each decade. So the U.S. saw depressions in the 1810s, 1820s, and 1830s just as it did in the 1980s, 1990s, and 2000s. Obviously, the increasing interconnectivity between national economies meant countries brought each other into crises like a collapsing house of cards. Globalization ensured global meltdowns.

Marx and Engels are famous for criticizing the crises of capitalism. They wrote in The Communist Manifesto that each economic bust put capitalism on trial:

In these crises a great part not only of existing products, but also of the previously created productive forces, are periodically destroyed. In these crises there breaks out an epidemic that in all earlier epochs would have seemed an absurdity—the epidemic of overproduction. Society suddenly finds itself put back into a state of momentary barbarism; it appears as if a famine, a universal war of devastation had cut off the supply of every means of subsistence; industry and commerce seem to be destroyed; and why? Because there is too much civilization, too much means of subsistence, too much industry, too much commerce.[10]

“And how does the bourgeoisie get over these crises?” he asks. “On the one hand by enforced destruction of a mass of productive forces; on the other, by the conquest of new markets and by the more thorough exploitation of the old ones. That is to say, by paving the way for more extensive and more destructive crises and by diminishing the means whereby crises are prevented.”[11] Scaling back production, massive layoffs, and pay cuts deepen the crisis, rather than helping pull an economy out of it.

This critique is not at all a relic of Marx’s time. In his 2013 article “What Wal-Mart Could Learn from Henry Ford,” former Secretary of Labor and political economist Robert Reich writes of “the basic economic bargain that lies at the heart of a modern economy”:

Workers are also consumers. Their earnings are continuously recycled to buy the goods and services that they and other workers produce. But if their earnings are inadequate and this basic bargain is broken, an economy produces more than its people are capable of buying.[12]

Reich points out that some executives and owners understood this, like Henry Ford. Socialist Michael Harrington noted the same in his 1989 book Socialism: Past and Future:

Mass production, Ford understood, could not exist unless there was mass consumption. The enormous increase in output made possible by the new technology that he had perfected—the assembly line—simply could not be absorbed by an economy of low-paid workers…

So Ford decided before World War I to pay the incredible wage of five dollars a day and to help buyers finance the purchase of his cars in order to deal with the new challenges of both production and consumption. More than that, Ford tried to persuade his fellow industrialists that, in their own self-interest, they should increase the pay—and the buying power—of their “hands” just as he had done. He succeeded in winning over converts, usually when there was a crisis—the Rockefellers joined the movement when their hired guns outraged the nation by killing strikers’ wives and children in Colorado—and mainly in the ranks of big business…labor historian David Brody called these changes in attitude in the United States “welfare capitalism”…

Ford and welfare capitalism made some prominent recruits—Herbert Hoover, who was something of an avant-garde Republican in the early 1920s, was one of them—but he failed to convince the capitalist class as a whole. Big business was mildly and sporadically receptive, but by and large decency toward the workers, even if it helped stop union organization, was seen as an extra cost, putting firms at a competitive disadvantage. Thus when the crash came in 1929, after a decade that had witnessed an extraordinary rationalization of production, a tremendous increase in capacity and productivity ended, just as Ford had feared, with the masses utterly unable to “buy back” the work of their own hands.[13]

Ford wrote in his book Today and Tomorrow (1926) that

The owner, the employees, and the buying public are all one and the same, and unless an industry can so manage itself as to keep wages high and prices low it destroys itself, for otherwise it limits the number of its customers. One’s own employees ought to be one’s own best customers… We increased the buying power of our own people, and they increased the buying power of other people, and so on and on. It is this thought of enlarging buying power by paying high wages and selling at low prices that is behind the prosperity of this country.

Economist Paul Krugman writes in “A Permanent Slump?” (2013) that economists are increasingly accepting what Marx predicted in the late 1800s, that our economy is now “an economy whose normal condition is one of inadequate demand—of at least mild depression—and which only gets anywhere close to full employment when it is being buoyed by bubbles…and unstable borrowing.”[14] Empirical studies support this; for example, a 2014 report from the International Monetary Fund itself confirmed lower inequality is strongly correlated with faster and more stable economic growth.[15] In 2016, the IMF repeated this warning: “Increased inequality…hurts the level and sustainability of growth.”[16] The Congressional Research Service looked at 65 years of data and concluded that tax cuts for the rich have no impact on economic growth. Simply giving more money to the rich does not fuel economic growth, as some claim (it will actually do the opposite if the wealth gap grows too large). Economic growth is fueled by the masses, by consumers. Only enriching the poor can bring about economic stability.

 

Notes

[1] Karl Marx, Capital Volume 3

[2] Economist Nouriel Roubini (2011), from Lee Sustar’s article Why Marx Was Right

[3] Harman, Economics of the Madhouse

[4] http://inthesetimes.com/article/16722/taking_on_capital_without_marx

[5] Einstein, Why Socialism

[6] Harman, How Marxism Works, 45

[7] Harman, How Marxism Works, 45

[8] Richard Wolff, Occupy the Economy

[9] A People’s History of the World and How Marxism Works, Harman; The Communist Manifesto, Marx and Engels; 23 Things They Don’t Tell You About Capitalism, Chang; Power Systems, Chomsky; Recovery in U.S. is Lifting Profits, but Not Adding Jobs, Schwartz, NY Times 3/3/2013

[10] Marx, Manifesto, 13

[11] Marx, Manifesto, 13

[12] http://www.kansascity.com/opinion/opn-columns-blogs/syndicated-columnists/article332088/What-Walmart-could-learn-from-Henry-Ford.html

[13] Michael Harrington, Socialism: Past and Future

[14] http://www.nytimes.com/2013/11/18/opinion/krugman-a-permanent-slump.html?_r=0

[15] http://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf

[16] https://www.theguardian.com/business/2016/may/27/austerity-policies-do-more-harm-than-good-imf-study-concludes

How Capitalism Exploits Workers

Capitalism is the insanity of a company making a fortune each year but paying the very people whose labors created this wealth so little they live in poverty.

In 2011, Walmart made $15.7 billion in profits, or net income after expenses and taxes; its CEO took $17.6 million in total compensation and its average U.S. employee made $22,100.[1] The CEO made almost 800 times what his average American employee earned. Over the last few decades, executive pay and corporate profits skyrocketed, while worker wages in America barely budged. On average, American CEOs are earning some 300 times the annual pay of their workers (in 1965 it was a 20:1 ratio). That’s just salaries – forget about the value of company shares that come with ownership! The Walton family, which owns the majority shares of Walmart, is worth $140 billion. Nike makes over $4 billion in profit, and its founder is worth $25 billion. In a matter of decades or even mere years, the capitalist’s wealth explodes – thousands, millions, billions of dollars. Are the workers who made this possible also growing tens of thousands or hundreds of thousands of times richer? This is also merely a comparison to American workers. Corporations like Walmart, H&M, and Gap find it more profitable to exploit impoverish Third World nations, so they move plants overseas and pay people starvation wages. Bangladesh employees suffered through terribly unsafe working conditions (1,100 died in 2013 when their factory collapsed in on them; others burned to death in early 2015 in a factory without proper sprinkler systems[2]) to earn on average $1,097 in 2011, meaning the CEO made more money than 16,043 of his foreign laborers.

Is the value of a capitalist’s daily work really 800 times greater than an employee’s? Or 16,000 times greater? This is like believing the work of the king a thousand times more valuable than the work of the serf, whose very labors keep the king’s belly full. It is simple exploitation, a ruling minority growing wealthy off the hard labors of the poor majority. Business owners use their workers and the wealth created by worker hands to grow rich and live easier, more luxurious lives. Decision-making power is under the total control of one person, or a small handful of directors, making a business very much a dictatorship.

Richard D. Wolff, economics professor at the University of Massachusetts-Amherst, writes:

[We] need to democratize our enterprises. We need to stop an economic system in which all the enterprises that produce the goods and services we depend upon are organized un-democratically. The vast majority of people come to work Monday through Friday, 9:00 a.m. to 5:00 p.m. They arrive and they use their brains and muscles to work with equipment provided by the employer to produce an output, a good or a service. At the end of the day they go home. They take with them their brain and their body, but they leave behind what they’ve produced, and the employer takes it and sells it and makes as much money as possible.

Who makes all the decisions in this arrangement? A tiny group of people. In most U.S. corporations, that group is called the board of directors, fifteen to twenty people who decide what to produce, how to produce, where to produce, and what to do with the profits. And who selects these people? The major shareholders. Another tiny group of fifteen to twenty people. They make all the decisions. The vast majority of working people make no decisions. If the company decides to close down here and go somewhere else, what does that mean? It means that a small group of board members and major shareholders are moving the factory from Ohio to Canton, China…all the people who work in the Ohio plant are going to lose their jobs…

We permit that decision to be made by a minority. That’s capitalism. And we’ve allowed it as a system to dominate over democracy as a system. The majority of people who have to live with the consequences of a decision ought to participate in making it, but they don’t…[3]

Apologists for this system argue, as Chris Harman writes in Economics of the Madhouse, that “profits… [are] a reward to the capitalist for using his wealth to employ people rather for his own immediate consumption.”[4] We take exploitation for granted, hardly giving it a second thought. The capitalist deserves his millions, doesn’t he? He built a business from nothing, he worked hard for decades to make it profitable, he gave others jobs.

Well, in the beginning the founder creates the good or provides the service (creating the wealth), but without workers he or she cannot produce on a scale larger than him- or herself. Would Bill Gates be where he is today without employees?

The founder must hire workers and become a manager, leaving the workers to take his place as producer. The capitalist exploits workers because it is they who create the wealth by producing the good or providing the service. For the capitalist, the sale of each good or service must cover the cost of production, the cost of labor (worker compensation), and a little extra: profit the owner uses as he or she chooses. Therefore workers are not paid the full value of what they produce. This is exploitation. The wealth the workers produce is controlled and pocketed by the capitalist. The capitalist awards herself much while keeping worker wages as low as possible–to increase profits. The capitalist holds all decision-making power, making capitalism authoritarian as well as a grand theft from the people who generate wealth. Capitalism is the few growing rich off the labor of the many.

Say a woman begins a business by herself. She is creating her own wealth, selling a good or service to others and exploiting no one when she decides how much profit she will keep for herself as income and how much she will use to invest and expand. Should this woman take an equal partner, and they together decide where to take their business and what earnings to subtract from the year’s profits, exploitation is still a non-issue. But when the woman assumes a managerial role by hiring people to perform the good or service, they will not democratically decide earnings or business goals. As the owner, the woman will retain total decision-making control, and take a larger income out of the profit pool than she will award to her employees.

Exploitation has begun. The workers are creating the commodity, but the capitalist will reap more of the wealth created by their hands than they will. The capitalist, while perhaps still working hard, is no longer doing the miserable tasks necessary to directly generate wealth. Anyone who has held a job would surely agree with Marx: “In proportion, therefore, as the repulsiveness of the work increases, the wage decreases.”[5] The owner no longer scrubs dishes in the back of a fast food joint or operates sweatshop machines sewing our clothing. Instead, she decides what to do with the profits created by others. And by taking more of the wealth as personal income, she steadily builds for herself a better life. She keeps worker wages down to protect profits, her means of making a higher income and expanding her business. She will hire more people, but they will be exploited too, the majority of the wealth they create being appropriated by her, “not by force,” as Einstein noted, “but on the whole in faithful compliance with legally established rules.”[6] The workers do not get to take an equitable portion of the money they have made for the company. Their wages are kept low by the capitalist, their lives seeing little improvement unless they strike to convince her that more of the profits should go to those who produced it.

Privately, capitalists will admit that they grow wealthy at the expense of labor, as in Citigroup’s 2005 and 2006 internal strategy documents.

Expanding on the absurdities, Harman points out:

Employing people involves buying their labor. If a capitalist gets a profit for doing this, than everyone else who buys something should get a profit… [Plus,] the capitalist does not sacrifice his existing wealth when he invests. In fact, his investment preserves its worth, while profit is something he gets on top for doing nothing.

So if real profit rates are 10 percent (quite a low figure by capitalist standards) someone with a million pounds to invest can spend £100,000 a year (£2,000 a week) on indulging themselves in the most unabstemious way and still be worth as much at the end of the year as at the beginning—and get another £100,000 the next year for doing nothing…

What is really happening, Marx insisted, is that the capitalist is able to make a profit by seizing some of the labour of his workers.[7]

Even Adam Smith, author of what is now considered a conservative bible, The Wealth of Nations (1776), knew that wealth is created by the labor of workers. He wrote:

The real price of everything, what it really costs the men who want to acquire it, is the toil and trouble of acquiring it… It is not by gold or silver, but by labour, that all the wealth of the world was originally purchased, and its value to those who possess it and who want to exchange it for some other object, is precisely equal to the quantity of labour which it enables them to purchase or command.[8]

He noted how profit was the wealth generated by labor that was taken by the capitalist:

The landlord demands a share of almost all the produce which the labourer can either raise or collect from it. His rent makes the first deduction from the produce of the labour which is employed upon the land… The produce of almost all other labour is subject to the like deduction of profit… He shares in the produce of their labour…and this share consists his profit.[9]

Smith also describes the fundamental clash of interests between workers and owners, the poor and the rich, and the imbalance of power between them:

The interests of the two parties are by no means the same. The workmen desire to get as much as possible, the masters to give as little as possible. The former are disposed to combine in order to raise, the latter in order to lower the wages of labour. It is not difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute and force the other into compliance with their terms.[10]

This description of an adversarial relationship is similar to what University of Oxford fellow G. A. Cohen wrote in his little book Why Not Socialism? in 2009, when he discussed what the cash reward motive of the marketplace did to people:

It is true that people can engage in market activity under other inspirations, but the motives of greed and fear are what the market brings to prominence, and that includes the greed on behalf of, and fear for the safety of, one’s family. Even when one’s concerns are thus wider than those of one’s mere self, the market posture is greedy and fearful in that one’s opposite-number marketers are predominantly seen as possible sources of enrichments, and as threats to one’s success.[11]

Smith, comparing feudalism with the property owners and business owners of his time, wrote, “All for ourselves and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind.”[12] Chomsky notes that Smith believed in markets because he thought free markets could produce perfect equality, and give workers a chance to control their own work and lives.[13] This was before early capitalism had full formed into industrial capitalism. Smith’s ideas were later accepted by and expanded upon by Marx, who knew that even when capitalists provide machines, factories, or tools for the worker to use to generate new wealth, that technology was likewise the product of labor, which was also exploited by capitalist owners, and on and on into the past. This reveals the absurdity of capitalist claims that they are the true creators of wealth. Workers create wealth and create the machines that enable other workers to do the same. Capitalists are not the creators of wealth, they are the hoarders of wealth created by others. And as we will see in our discussion of worker ownership, capitalist control is by no means necessary to run a business.

Abraham Lincoln, while no socialist, understood all this. As John Nichols points out in The “S” Word: A Short History of an American Tradition…Socialism, Lincoln was close to socialist editor of the New York Tribune Horace Greeley, befriended and allied himself with radicals who fled after the failed revolutions in Europe in 1848 (some of them friends of Marx), appointed one socialist as his assistant secretary of war and another his ambassador to Spain, and even cordially corresponded with Marx, who opposed black slavery, about the American Civil War.[14] Lincoln said in his 1861 State of the Union Address:

Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration. Capital has its rights, which are as worthy of protection as any other rights. Nor is it denied that there is, and probably always will be, a relation between labor and capital producing mutual benefits. The error is in assuming that the whole labor of community exists within that relation. A few men own capital, and that few avoid labor themselves, and with their capital hire or buy another few to labor for them…[15]

But, one might protest, isn’t it the capitalist’s right as creator of the company to do this? Shouldn’t ideals of basic human freedom allow her to delegate more unpleasant tasks to employees, to award herself more money than employees, and to maintain all decision-making power over the business she launched? It seems you are hinting at, one might say, a structure where the employees have decision-making power and award themselves higher, equal incomes.

Socialistic worker cooperatives are the goal indeed, as explained in detail elsewhere. They are non-exploitative, democratic institutions. This is about human freedom for the many, the workers. To put it bluntly, it is about a higher form of ethical thinking. After all, the freedom for business owners has often come at the expense of the freedom of workers, such as when the former desires the “freedom” to refuse to higher women, blacks, Hispanics, gays, and so on, or the “freedom” to pay them less than white males. Dr. King once said humanity needed “a revolution of values”—I think the idea applies here. Whose freedom will we prioritize? How much do we value democracy? Will we reject exploitation and poverty? Humanity must move beyond a system that transforms the labor of the majority into the riches of the minority. An ethical person should not tolerate a system that embraces authoritarianism, exploits the labor of others, and creates massive inequality.

Dylan Monahan says:

It goes without saying that capitalism causes economic inequality. This is actually a point of pride for defenders of the system—they believe that the free market thrives because the deserving few are rewarded. The Marxist critique of capitalism takes the exact opposite position: The tiny few who live so well compared to the rest of us are completely undeserving of their immense wealth—they amassed their fortunes through systematic theft of the labor of the working majority in society.[16]

Apologists insist that under capitalism, everyone is free to sell their labor to whomever they wish. So if the woman exploits you, you can work elsewhere. However:

As Marx put it, ‘the worker can leave the individual capitalist to whom he hires himself whenever he likes… But the worker, whose sole source of livelihood is the sale of his labor, cannot leave the whole class of purchasers, that is the capitalist class, without renouncing his existence.’

The worker may not be a slave, the personal property of one capitalist. But he or she is a ‘wage slave’, compelled to toil for some member of the class of capitalists. This puts the worker in a position where he or she has to accept a wage less than the total product of their labour. The value of their wage under capitalism is never nearly as big as the value of the labour they actually do.[17]

Einstein agreed: “What the worker receives is determined not by the real value of the goods he produces, but by his minimum needs and by the capitalists’ requirements for labor power in relation to the number of workers competing for jobs. It is important to understand that even in theory the payment of the worker is not determined by the value of his product.”[18] Remember how the price of a good or service is divided up. The worker’s wage is not equal to the value of what he or she produces, because if it was there would be no profit for the capitalist.

Because you and your fellow workers are not adequately paid for the value of your labor, capitalist profits can build up immensely while your own wages improve only marginally, remain the same, or even fall.

Take a company that announces a ‘net rate profit’ of 10 per cent. It is saying that if the cost of all the machinery, factories and so on that they own is £100 million, then they are left with £10 million profit after paying the wages, raw material costs and the cost of replacing machinery that wears out in a year.

You don’t have to be a genius to see that after ten years the company will have made a total profit of £100 million—the full cost of the original investment…the capitalist is twice as wealthy as before. He owns his original investment and the accumulated profits.

The worker, in the mean time, has sacrificed most of his life’s energy to working eight hours a day, 48 weeks a year, in the factory. Is he twice as well off at the end of that time as at the beginning? You bet your boots he’s not.[19]

This is why our minimum wage is absurd. The prosperity of the business class has skyrocketed, but worker wages have stagnated. In the 1960s and 70s, average CEO compensation was 30-40 times greater than the average worker compensation. Today, it’s on average 300-400 times greater (in 2011, the J.C. Penny CEO earned 1,795 times as much as the average department store worker[20]). From 1979 to 2013, middle class incomes rose only 6 percent, while lower class incomes fell 5%.[21] According to The New York Times, in 2012 corporate profits comprised its largest share of the national income since 1950, but employees had nearly its smallest portion of the national income since 1966.[22] Productivity rose 72.2% from 1973-2014, while hourly compensation rose only 9.2% (but owners’ compensation rose with the productivity, up 63.3%).[23] See The Last Article on the Minimum Wage You Will Ever Need to Read for a refutation of conservative myths on the topic.

The massive increases in the prosperity of the corporate class can allow for substantial increases in worker wages. In fact, wages must rise with profits and productivity to preserve a stable and successful economy, to allow buyers to keep up with production. But the free market, in pursuit of profit, doesn’t do this. The richest 1% saw its share of the national income double since 1979. The share of the richest 0.1% almost tripled. Between 1989 and 2006, the top 10% in the U.S. appropriated 91% of the income growth; the top 1% took 59%![24] Between 2009 and 2012, 95% of income gains went to the top 1%.[25] Income inequality worsens. More wealth is concentrated in fewer hands. There exists

trillions in cash the so-called “job creators” and “captains of industry” have parked unproductively in bank accounts, while millions of able and willing workers languish in unemployment. The top 1% have as much wealth as the bottom 95%. The richest 400 families in the U.S. have as much wealth as the bottom 50% of the population… The poorest 50% own just 2.5% of the country’s wealth.[26]

The bottom 80% of the people own 16% of American wealth, and the share of the top 1% is nearing 50%.[27] Globally, the richest 85 people have more money than the poorest 3.5 billion. The bottom half of earth’s population has less than 1% of humanity’s wealth, the top 10% of the population has 86% (the top 1%, 46%).[28] 82% of wealth created in 2017 went to the world’s richest 1%.

Besides increased productivity and employers taking higher percentages of profits as salaries, all while wages remain stagnant, why else does this wealth gap keep growing?

There are many factors, but let us consider a few major ones. First, capitalists shift to temporary, contract, or part-time workers who don’t get benefits. Second, they invest in new technology that makes their systems more automated, allowing them to further reduce their workforce and save on labor costs. I have written more on technology under capitalism (versus under socialism) elsewhere. Third, as union membership and collective bargaining power shrink, income inequality grows. Finally, firms outsource their workforces to places like China, Bangladesh, Mexico, and the Philippines, since they can get away with paying workers pennies in comparison to American employees, with the added benefit of weaker environmental and workplace safety regulations. The conditions of the factories overseas are often horrific. Sometimes workers live at the factory, packed into dormitories like sardines. They work long hours at exhausting speeds, and can be exposed to dangerous toxins. Companies like Apple have had to deal with suicide scandals, as some workers cannot tolerate the conditions (Goldin, Smith, and Smith, Imagine: Living in a Socialist USA).

Outsourcing became common practice, as capitalism grew more global and corporations became international. There are sometimes strategic exceptions to these trends (raising wages is used by corporations to gain highly-skilled, specialized workers, drive competitors into the ground by sapping their workforce, or, among an enlightened few, to prevent economic failure by increasing consumer purchasing power). But keeping low-skill labor costs down is central to higher revenue, and is the driving force behind the loss of American jobs and the brutal exploitation of foreign workers. In the 2000s, the largest U.S. corporations alone, employing a fifth of American workers, reduced their American workforce by 3 million jobs while increasing outsourced jobs by 2.5 million. The nation as a whole sent 3 million jobs to China alone between 2001 and 2013. Some 14 million people work for American corporations overseas – far higher than the typical U.S. unemployment rate. Most at risk are manufacturing jobs, as well as call center, tech, and human resources jobs.

 

Notes

[1] http://fortune.com/fortune500/2012/wal-mart-stores-inc-2/

[2] http://www.cbsnews.com/news/the-bangladesh-factory-collapse-one-year-later/; http://www.wsws.org/en/articles/2015/02/03/bang-f03.html

[3] Wolff, Occupy the Economy

[4] Harman, Madhouse

[5] Marx, Communist Manifesto

[6] Einstein, “Why Socialism?”

[7] Harman, Madhouse

[8] Smith, Wealth of Nations

[9] Smith, Wealth of Nations

[10] Smith, Wealth of Nations

[11] Cohen, Why Not Socialism?

[12] Smith, Wealth of Nations

[13] Chomsky, Anarchism

[14] Nichols, The S-Word

[15] http://www.presidency.ucsb.edu/ws/?pid=29502

[16] http://socialistworker.org/2014/03/31/snapshots-of-inequality

[17] Harman, Madhouse

[18] Einstein, “Why Socialism?”

[19] Harman, Madhouse

[20] http://www.bloomberg.com/news/2013-04-30/ceo-pay-1-795-to-1-multiple-of-workers-skirts-law-as-sec-delays.html

[21] http://www.epi.org/publication/charting-wage-stagnation/

[22] http://www.nytimes.com/2013/03/04/business/economy/corporate-profits-soar-as-worker-income-limps.html

[23] http://www.epi.org/publication/the-top-charts-of-2015/?utm_content=buffer791fd&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

[24] Milanovic, The Haves and Have Nots

[25]http://www.slate.com/blogs/moneybox/2013/09/10/one_percent_recovery_95_percent_of_gains_have_gone_to_the_top_one_percent.html

[26] http://www.marxist.com/is-capitalism-dying.htm

[27] http://www.people.hbs.edu/mnorton/norton%20ariely.pdf

[28] http://www.washingtonpost.com/blogs/wonkblog/wp/2014/01/22/10-startling-facts-about-global-wealth-inequality/

Under Capitalism, When Wages Rise…Wages Fall

In Wage-Labour and Capital, Marx posited: “The share of (profit) increases in the same proportion in which the share of labour (wages) falls, and vice versa. Profit rises in the same degree in which wages fall; it falls in the same degree in which wages rise.” 

He was talking about the relationship between wages and profits, both of which are garnered from the sale of a good or service. The business owner splits the money from the sale of a commodity in three basic ways. Part of it goes toward replacing the raw materials, and maintaining the machines, technology, and facilities needed to create the commodity at current production levels; part of it goes to the workers as wages; the last part of it goes to the capitalist as a profit. This profit is earnings over the cost of production; in other words, after the cost of creating commodities and paying workers is covered, it is extra money the owner can use as he wishes—to expand his business, to create more commodities, to build new factories or stores, to hire more workers, to raise wages, to give himself a fat paycheck, anything. No matter the price of a good or service, each one of these parts stands in proportion to the other two.

Capitalist competition drives the hunt for new means of production, in an attempt to create more products with less money. The division of labor and new technology will often mean fewer workers are necessary to produce the same output, but will always mean that a single worker can produce more product in a given amount of time than he could before. A business will therefore be able to sell its product for a lower price (undercutting the competition and seizing a larger share of the market) and increase profits at the same time (as a larger share of the market means more people are buying its product).

When this happens, Marx writes:

Profit, indeed, has not risen because wages have fallen, but wages have fallen because profit has risen. With the same amount of another man’s labour the capitalist has bought a larger amount of exchange values [reaped more profit] without having paid more for the labour…the work is paid for [with] less in proportion to the net gain which it yields to the capitalist.

With new technologies, the owner is getting higher productivity, more products, and more sales, while paying the worker the same wage. With a lower cost of production, a greater proportion of the sale price can go to the capitalist. With a larger share of the market and increased sales, the capitalist will take in larger profits for himself and his business and can decide whether or not he wants to increase wages to reward the very people who created his wealth. And sometimes he does, and “real” wages rise. But there remains a difference between real wages (what’s on your paycheck) and relative wages (the proportion of your paycheck to company profits). Marx writes:

Profits can grow rapidly only when the price of labour—the relative wages—decrease just as rapidly. Relative wages may fall, although real wages rise simultaneously with…the money value of labour, provided only that the real wage does not rise in the same proportion as the profit. If, for instance, in good business years wages rise 5 per cent. While profits rise 30 per cent., the proportional, the relative wage has not increased, but decreased.

To increase wages in the same proportion as increased profits is unthinkable for the owner—if he did that his proportion of profits would remain the same as if he hadn’t invested in new technologies. He would still be getting more money, naturally, but he wouldn’t be seizing a larger proportion.

This process is without end. Competition will drive someone else to divide labor further or use a new technology, someone will reap a larger share of a given market with a lower price, and profits will rise out of proportion to worker wages. The effect:

If, therefore, the [real] income of the worker increases with the rapid growth of capital, there is at the same time a widening of the social chasm that divides the worker from the capitalist, an increase in the power of capital over labour, a greater dependence of labour on capital.

The competition-driven frenzy to invest in new technology and get rid of workers, to increase productive output and profits, widens the power gap between the producers and the consumers. A worker who is fired, or whose wages are slashed, cannot fuel the economy as much as he had previously. But this is done at the same time productivity increases. So productive output grows as worker purchasing power shrinks. Socialist and famous adventure writer Jack London marveled at this, writing:

In the face of the facts that modern man lives more wretchedly than the cave-man, and that his producing power is a thousand times greater than that of the cave-man, no other conclusion is possible than that the capitalist class has mismanaged…criminally and selfishly mismanaged. (Zinn, A People’s History of the United States)

This system is obviously exploitive. Corporate owners enrich themselves and leave worker wages stagnant. A tiny few is growing unbelievably wealthy off the work of the many. As Mark Twain said, “Who are the oppressors? The few: the king, the capitalist and a handful of other overseers and superintendents. Who are the oppressed? The many: the nations of the earth; the valuable personages; the workers; they that make the bread that the soft-handed and idle eat.”

All wealth is created directly by workers, who make the good or provide the service. American Socialist Eugene Debs proclaimed, “I am opposing a social order in which it is possible for one man who does absolutely nothing that is useful to amass a fortune of hundreds of millions of dollars, while millions of men and women who work all the days of their lives secure barely enough for a wretched existence.” The money people do secure, of course, is quickly given back to capitalists as people pay for food, clothing, rent, and fuel.

 

The Story of Soviet Russia

The Russians have a long history of battling for basic human rights and true anarchist democracy, as documented in Daniel Guerin’s Anarchism, published in 1970.

In 1905, the Russian people rose up in rebellion against the brutal dictatorship of the czar and the horrendous inequality between the ruling and lower class. 150,000 impoverished workers protested their tragic living and working conditions in the capital of St. Petersburg in January, agitation that led to Russian soldiers at the White Palace firing into the unarmed crowd. The “Bloody Sunday” massacre sparked a revolution: nearly half a million people went on strike across the nation, clashing with police, who shot people down in the streets; sailors and soldiers mutinied against their officers; peasants attacked the homes of their landlords; Baltic peoples demanded independence; students rioted at their universities; and terrorists assassinated government officials and military and police commanders. Workers seized factories and businesses from their employers, taking ownership by force. In St. Petersburg, anarchists and socialists helped set up worker councils called “soviets,” true anarchist organization. The people and their leaders demanded an elected parliament, voting rights, freedom of the press and religion, and the right to form political parties. In other words, they demanded basic individual rights and a less autocratic system of government that other parts of the world, such as the United States, had won. Daniel Guerin writes:

The Russian Revolution was, in fact, a great mass movement, a wave rising from the people which passed over and submerged ideological formations. It belonged to no one, unless to the people. In so far as it was an authentic revolution, taking its impulse from the bottom upward and spontaneously producing the organs of direct democracy, it presented all the characteristics of a social revolution with libertarian tendencies.[1]

The State of course responded with repression: the army was dispatched to destroy the worker councils and disperse strikes, protesters were imprisoned, and some citizens were executed. Well over 10,000 people died, and scores of thousands more imprisoned. Nevertheless, power yielded hesitantly to ever increasing demand and strife. Toward the end of 1905, Czar Nicholas II agreed to broadened personal freedoms and the establishment of an elected parliament, expressed in the October Manifesto. The working people celebrated. However, as under the American oligarchy, the new Constitution of 1906 granted little power to the people. The czar retained veto power over all law, the power to elect half the legislature of the new parliament the revolutionaries had called for, and total power over the military and the church. These concessions satisfied few socialists, many of whom still pushed for the overthrow of the czar.

Struggles for more freedom, political power, and decent living conditions continued, exploding violently again in February 1917. Russian soldiers, horribly unprepared for the Great War against Germany, were being slaughtered, wounded, and imprisoned by the millions. Troops were mutinying and deserting by the tens of thousands each month. The people were starving, commodities scarce, inflation skyrocketing. The czar consistently worked to weaken the elected parliament.

On February 23, 90,000 people went on strike and marched in Petrograd (formerly St. Petersburg), demanding food and an end to the war. Tens of thousands more joined them, until Petrograd fell into chaos. Many of the strikers were women, who were left to suffer in the factories and plants as men were shipped to the bloodbath of Europe. Army groups were sent to crush the strikes, but soldiers refused to fire upon women, and many joined the protestors. Workers again took control of their workplaces. Peasants seized the land of the agricultural bosses. Socialist political parties recreated the 1905 soviet. The people organized socialist communities characterized by cooperatively- and communally-owned government, childcare facilities, kitchens, laundries, farms, and factories, and also characterized by personal freedoms when homosexuality, abortion, and birth control were legalized.[2]

Without the power of the military, the czar surrendered his power in March.

But the battle was far from over. As the world has been reminded in the recent Arab Spring, the ousting of a dictator often leaves political establishments in the best position to take control. The political party that took charge of the transition government, the Constitutional Democratic Party (Kadets), had been a liberal party born during the 1905 revolution, but was distinctly non-socialist, made up of political elites and aristocrats led by Prince Georgy Lvov. The transition government was expected to organize elections for a Constituent Assembly, in which the people would democratically select representatives to compose a new government. But the Kadets announced they would continue the war, and would not organize such elections until the war was concluded. This outraged the people, and a new wave of massive protests shook Russia. Half a million workers and soldiers marched on July 1, 1917 in Petrograd alone; they called for the war’s end and all political power to be handed over to the soviets, the worker councils. Hundreds of soviets banded together into an All-Russian Congress of Soviets. The Kadet government responded with the usual means of repression, but was forced to yield in July; Alexander Kerensky, from a coalition of socialist parties, was made the new prime minister by the political establishment. But Kerensky also refused to organize a Constituent Assembly. He declared himself commander-in-chief and Russia a republic.

Civil unrest continued, and more and more the soviets, having no political power of their own, looked toward a party called the Bolsheviks for representation. The Bolsheviks, led by Lenin, would increase in popularity and come to dominate the All-Russian Congress of Soviets, taking the reigns of the worker revolution, and would thus become an enemy of the Kerensky regime. But the Bolsheviks did not hold the anti-statist views of anarchists, other socialists, or even much of the citizenry. Lenin said that the workers were “a hundred times further to the left”[3] than he or the Bolsheviks. In fact, “The anti-Bolshevik, left-wing labor movement opposed the Leninists because they did not go far enough… [Leninists] used the international radical movement to satisfy specifically Russian needs, which soon became synonymous with the needs of the Bolshevik Party-State.”[4]

Guerin wrote that the party “had been authoritarians for a long time, and were imbued with ideas of the State, of dictatorship, of centralization, of a ruling party, of management of the economy from above, of all things which were in flagrant contradiction with a really libertarian conception of soviet democracy.”[5] Lenin wrote before the October 1917 Revolution that the anti-capitalist organization of industry should be overseen by the State, that it should seize a monopoly over all industry and operate in the interests of the people and not capitalist owners.[6] The Bolsheviks even “regarded the soviets with suspicion as embarrassing competitors.”[7] They were interested in ending capitalism and building a new, prosperous Russia without suffering or poverty, but without question sought the power to oversee this process themselves as a ruling party. But in order to appeal to a far more liberal base, the party often had to offer support to ideas that contradicted their traditional beliefs. In the words of the anarchist Voline, “in order to catch the imagination of the masses, gain their confidence and their sympathy, the Bolshevik Party announced…slogans which had up till then been characteristic…of anarchism,”[8] like “All power to the soviets!” The party had to make concessions here and there and play along with certain ideas in order to survive and grow.

As soviets across Russia pressured the All-Russian Congress of Soviets to end the Kerensky government, the Bolsheviks organized an armed uprising that faced no real resistance. On November 7, Lenin led tens of thousands of armed supporters to the government buildings in Petrograd and took them over. The Winter Palace was seized and the Kerensky officials were arrested. The Bolsheviks seized power, and while it was legitimized by the soviets and a cause for celebration among much of the citizenry, libertarian socialists and anarchists were dismayed. Voline wrote:

Once they have consolidated and legalized their power, the Bolsheviks–who are socialists, politicians, and believers in the State, that is to say, centralists and authoritarian men of action–will begin to arrange the life of the country and the people by governmental and dictatorial means imposed from the centers… Your soviets…will gradually become simply executive organs of the will of the central government… An authoritarian political state apparatus will be set up and, acting from above, it will seek to crush everything with its iron fist… Woe betide anyone who is not in agreement with the central authority.[9]

Anarchist Errico Malatesta warned that the

…armed forces which have served to defend the Revolution against external enemies…tomorrow will serve to impose the will of the dictators on the workers, to check the course of the Revolution, to consolidate newly established interests, and to defend a newly privileged class against the masses. Lenin, Trotsky, and their companions are certainly sincere revolutionaries, but they are preparing the government cadres which will enable their successors to profit by the Revolution and kill it. They will be the first victims of their own methods.[10]

And all this is precisely what happened. Despite a 1918-1922 civil war, in which other political parties and anti-Bolshevik organizations battled to remove Lenin and his party, despite intervention by the United States military and other Allied powers, and despite persistent riots and strikes against their regime, the Bolsheviks became the ruling party of Russia. They arrested and executed political opponents, crushed independence movements among peoples like the Ukrainians, and established a bureaucracy of directors to manage the economy. Many of these directors were wealthy capitalists “left over from old Russian capitalism, who had adapted themselves all too quickly to institutions of the soviet type, and had got themselves into responsible positions in the various commissariats, insisting that economic management should be entrusted to them and not to workers’ organizations.”[11] They dismantled worker cooperatives, refusing to allow any factory or company to operate with its own democratic will. Government dictators replaced capitalist dictators. The workers and the soviet worker councils had no real power, and were subject to all decisions made by the State.[12] Anarchist groups became the most active and the most popular among the Russian people by 1918, but the Bolsheviks systematically crushed their movement by 1921, criminalizing anarchist literature and activities, then arresting, exiling, or executing anarchists and other libertarians.[13] The dream of worker self-management in Russia died under authoritarian socialists, under communists, under “the vilest and most dangerous lie of our century…Red Bureaucracy,” as Mikhail Bakunin said.[14] He declared:

I detest communism because it is the negation of liberty and I cannot conceive anything human without liberty. I am not a communist because communism concentrates all the powers of society and absorbs them into the State, because it leads inevitably to the centralization of property in the hands of the State, while I want to see the State abolished. I want the complete elimination of the authoritarian principle of state tutelage which has always subjected, oppressed, exploited, and depraved men while claiming to moralize and civilize them. I want society, and collective or social property, to be organized from the bottom up through free association and not from the top down by authority of any kind… In that sense I am a collectivist and not at all a communist.[15]

Though crushed in Russia, the soviet worker councils inspired other ordinary people throughout Europe, in Ukraine, Italy, Spain, Germany, Holland, Bavaria. Guerin writes of Ukraine, which was shaken by peasant revolts and saw brief independence after World War I:

Peasants united in “communes” or “free-work soviets,” and communally tilled the land for which they had fought with their former owners. These groups respected the principles of equality and fraternity. Each man, woman, or child had to work in proportion to his or her strength, and comrades elected to temporary managerial functions subsequently returned to their regular work alongside the other members of the communes.

This Bolsheviks destroyed this movement also.

 

 

Notes

[1] Guerin, 82

[2] Maass, Case for Socialism, 133

[3] Guerin, 83

[4] Paul Mattick, Marx and Keynes: The Limits of the Mixed Economy (Boston: Porter Sargent, 1969), p. 295.

[5] Guerin, 86

[6] Guerin, 86-87

[7] Guerin, 84

[8] Guerin, 85

[9] Guerin, 87-88

[10] Guerin, 112

[11] Guerin, 90

[12] Guerin, 91

[13] Guerin, 95-96

[14] Guerin, 22

[15] Guerin, 22

On the Origins of Capitalism

Put simply, capitalism is an economic system characterized by the private ownership of business and industry, where earning a profit by selling a good or service is each owner’s basic and necessary goal. Private firms compete to seize a larger and larger share of a given market, to meet (and, in the modern world of advertising, create) the demands of the greatest possible number of consumers, the ultimate success being driving one’s competitors out by underselling them. The capitalist (the owner) can take a greater piece of the market with each competitor that goes under, resulting in more profits. Profits not only enrich the capitalist personally, they allow the firm to expand into markets in other cities, nations, or continents. They allow a commodity to be sold at a lower price. They provide opportunities for investment in new technologies that reduce the cost of production, the number of hours needed to create a commodity, and the number of workers the capitalist needs to employ.

But to accomplish all these things, the capitalist needs workers. He needs them to produce and sell his product at a rate and on a scale he cannot do himself. The workers need currency to survive, so they sell their labor to the capitalists for a wage. The capitalist exploits the workers, as it is the workers who create the wealth. Workers construct the good or provide the service, thus producing the wealth, which is controlled, and pocketed, by the capitalist. The capitalist awards herself much while keeping worker wages as low as possible–to increase profits. The capitalist holds all decision-making power, making capitalism authoritarian as well as a grand theft from the people who generate wealth. Capitalism is the few growing rich off the labor of the many.

Capitalism was a revolutionary change that brought with it unimaginable advances in technology and living standards. While its negative impacts on human society (exploitation and theft, authoritarianism, environmental destruction, etc.) are clear, it also had a positive impact, and one need not read Marxist literature long to notice many authors give an appreciative nod to its inception and early development, an example of which you will see below. Capitalism is still a young enterprise—it has not existed since the beginning of time. As British socialist Chris Harman writes, “Capitalism as a way of organizing the whole production of a country is barely three or four centuries old. As a way of organizing the whole production of the world, it is at most 150 years old” (How Marxism Works). Competition between private firms that use wage-labor has been the driving force of human economics for but a moment in the lifetime of our race, so those who view capitalism as the zenith of economic progress may one day be disappointed. Modern humans have been on earth for 100,000 years and, as Harman notes, “it would be remarkable indeed if a way of running things that has existed for less than 0.5 percent of our species’ lifespan were to endure for the rest of it.”

Much older than capitalism is the division of society into classes, and it is important to understand the origins and societal effects of this phenomenon in order to understand the rise of capitalism.

For 95,000 years, most human societies were characterized by “primitive communism,” in which labor was cooperative and resources were distributed equally or according to need. Anthropologist Richard Lee writes, “Before the rise of the state and the entrenchment of social inequality, people lived for millennia in small-scale kin-based social groups, in which the core institutions of economic life included collective or common ownership of land and resources, generalised reciprocity in the distribution of food, and relatively egalitarian political relations” (see Harman). People’s survival depended on cooperation, which necessitated a classless form of social organization and political leadership. Sometimes, men and women had equal power, and revered leaders usually worked alongside everyone else. Many Native American nations were structured like this only a century ago, and some isolated aboriginal tribes still are in the Pacific and South America.

Human society started changing when agricultural surpluses during the Urban Revolution of 10,000-5,000 B.C. created the specialization of work, which gave rise to class divisions, the State, and the exploitation of the masses under an economic system called feudalism. New technologies allowed food production (and the human population) to explode, and it became necessary for certain individuals in each community to guard and manage stored food. That fell to leaders who had once worked alongside the people, often religious leaders. When cooperation was no longer required for survival, social structures became divided into upper and lower classes. We see that in the most ancient of nation-states, such as Egypt. Those divisions have characterized the last 5% of human existence.

So most human societies now had a small minority of rulers and a huge majority of laborers, and all the exploitation and inequality that comes with such a structure. Though capitalism has similar characteristics, feudalism dominated human societies from 5,000 B.C. to the 15th century A.D. Workers labored not for capitalists who compete with other firms for more profits and market control, but to provide wealth and luxury to powerful heads of state. Harman explains:

The emergence of civilisation is usually thought of as one of the great steps forward in human history—indeed, as the step that separates history from prehistory. But it was accompanied wherever it happened by other, negative changes: by the development for the first time of class divisions, with a privileged minority living off the labour of everyone else, and by the setting up of bodies of armed men, of soldiers and secret police—in other words, a state machine—so as to enforce this minority’s rule on the rest of society.

Under feudalism, your resources and labor were devoted to pharaoh, the emperor, the king, or to your local feudal lord. The vast majority of people worked in agriculture, and did not sell their labor for a wage (soldiers were a notable exception). Production was limited to self-contained estates, and workers (“serfs”) were stuck in unshakable caste systems. One did not expect his or her lot in life to improve or change in any way before death. Most people exchanged their labor for protection, turning over large portions of their produce to the lord and receiving in return the protection of the lord’s armies from bandits and enemy lords, though of course this “exchange” was usually forced upon the poor through conquest and violence. Serfs were by no means allowed to leave as they chose—that would hurt the rulers. There was widespread oppression of the peasant masses by the rulers and their armies, and by the church as well, which demanded portions of crops as tithes.

During this time, there were small numbers of artisans, merchants, and traders in towns selling goods for individual profit, but they worked alone, as a family, or with an apprentice. There were also those who loaned money. But merchants held no economic power over others. Like peasants, they produced a good or service in order to survive, but their goods had to be exchanged for money so the family could in turn purchase agricultural produce. Money had little significance beyond a lord’s need to pay soldiers for their services or a merchant’s need for a means to put food on the table. True wealth was in land. It gave workers a way to feed themselves, and lords sought land through conquest to gain more resources, workers, and power—to live in greater luxury. So the work output of most people enriched the lives of the nobility, and under such a system there was little means for workers to improve production techniques or technology.

But things slowly changed in the 15th century. In Europe, plague destroyed a huge percentage of the population in the 14th century. The surviving nobles demanded more and more goods from the merchants in the towns. Towns thus became more important and more work opened up there for roaming free laborers and escaped serfs. The surviving peasants seized the best land from the dead, and were able to produce more. As a result, trade networks sprung up, markets grew more important in feudal society than isolated production on estates, and living standards rose. Exploration, conquest, and the enslavement of foreign lands and people led to globalization and international trade that made some merchants rich alongside kings, queens, and men of the church.

The “putting-out system” provided peasants a new way of making a living and thus weakened the economic power of the feudal lord. It was also an infant form of capitalist exploitation. Merchants bought the raw materials needed to make a commodity, and paid poor peasants to carry out production. Thus, “the direct robbery of the products of peasant labour was replaced by a system in which individual workers voluntarily accepted less than the full value of their products in return for being supplied with raw materials or tools” (Harman, A People’s History of the World). The poor had not the resources to buy or own the means of production—the raw materials and technology. To survive they were forced to accept whatever payment the merchant offered. Payment was dismal, as the merchant desired and needed profit—money from the sale of a good left over after all production and labor costs had been paid—to continue and improve his way of life. He kept wages low to keep more money for himself.

Importantly, for the common people wealth could be now be amassed in currency. Survival could be ensured by selling one’s labor for a wage (one who did so Marxists called a proletarian, an employer of wage labor being the bourgeois, the merchant, the capitalist). Over the next four centuries, merchants increasingly supervised production (though it was a very slow change, as until the Industrial Revolution of the late 1700s and early 1800s the vast majority of people still did not work for a wage, were not employees of someone else; see Curl, For All the People). New technologies revolutionized production and garnered huge profits. Markets became global. The merchant class grew larger and richer, and more industries were organized under firms with one person employing a larger and larger labor force. Industrial capitalism was born. Marx observed in The Communist Manifesto in 1848:

Modern industry has converted the little workshop of the patriarchal master into the great factory of the industrial capitalist. Masses of laborers, crowded into the factory, are organized like soldiers. As privates of the industrial army they are placed under the command of a perfect hierarchy of officers and sergeants. Not only are they slaves of the bourgeois class and of the bourgeois State; they are daily and hourly enslaved by the machine, by the overseer and, above all, by the individual bourgeois manufacturer himself. The more openly this despotism proclaims gain to be its end and aim, the more petty, the more hateful and the more embittering it is.

Yet American socialist Michael Harrington called capitalism “the greatest achievement of humankind in history” because “political power no longer had to be authoritarian, for it had ceased to be the principal instrument of economic coercion” (Socialism: Past and Future). Private ownership and competition weakened the power of feudal lords, though “the shifts in social structure opened up possibilities of freedom and justice, not inevitabilities.” In many ways, capitalism helped push the world in that direction. Marx wrote the bourgeoisie “put an end to all feudal, patriarchal, idyllic relations. It has pitilessly torn asunder the motley feudal ties that bound man to his ‘natural superiors.'” Unfortunately, the change only substituted one form of minority rule for another. The power of the church and of ruling dynasties declined, and the power of the capitalist class increased. “In one word,” Marx wrote, “for exploitation, veiled by religious and political illusions, [the capitalist class] has substituted naked, shameless, direct, brutal exploitation.”

He also noted, “Each step in the development of the bourgeoisie was accompanied by a corresponding political advance of that class,” from “an oppressed class under the sway of the feudal nobility” to today, where “the executive of the modern State is but a committee for managing the common affairs of the whole bourgeoisie.” Within each nation, as a capitalist class grew and gained colossal wealth, it gained political power, advancing to the top of the social hierarchy, until it “conquered for itself, in the modern representative State, exclusive political sway.”

Over the centuries, capitalists solidified control of political power, and in many ways this slowed down the development of liberty and democracy. It was no longer the king or feudal lord oppressing the class of businessmen and the class of laborers, it was the class of wealthy ruling businessmen (like George Washington, James Madison, and Alexander Hamilton  in the United States) oppressing the class of laborers. To repeat what Dr. King wrote, “[Capitalism] started out with a noble and high motive, viz., to block the trade monopolies of nobles, but like most human systems it fell victim to the very thing it was revolting against.” New oppressors took over, and like back then the governments of many advanced societies today mostly serve the interests of big business, because politicians are also business leaders or are bought off by them in the form of lobbying, campaign contributions, and so on.

As under feudalism, the majority experienced barbaric treatment at the hands of the minority, not just physical mistreatment in deadly working conditions but also the robbery of their wealth, the wealth workers created with their own hands. The capitalist owners exploited the labor of the people, keeping them poor and desperate while enriching themselves, a problem that still exists. To quote The Communist Manifesto:

The history of all past society has consisted in the development of class antagonisms, antagonisms that assumed different forms at different epochs. But whatever forms they may have taken, one fact is common to all past ages, viz., the exploitation of one part of society by the other. No wonder, then, that the social consciousness of past ages, despite all the multiplicity and variety it displays, moves within certain common forms, or general ideas, which cannot completely vanish except with the total disappearance of class antagonisms.

On Anarchism (and Libertarianism)

Anarchism is the vision of the world socialism can one day create, a libertarian society free of not just the ruling class and the exploitation of the common people, but the State itself.

Anarchism is not a philosophy of chaos and violence. True, in the same way some capitalists were violent, so were some anarchists, such as Leon Czolgosz, who took out his anger over the exploitation of the poor by assassinating President William McKinley in Buffalo in 1901. But many others, like musician Josiah Warren (called the first American anarchist), English author H.G. Wells (The War of the Worlds), or Russian writer Leo Tolstoy (War and Peace), were not terrorists.

Rather, anarchism is order in its most democratic form. It is the complete rejection of authoritarianism, the argument that the State, and other forms of authority, such as capitalism, will always abuse those with less power, the common people. It is the denunciation of force and oppression. Anarchists argue we can live in peace and prosperity without nonlocal government or capitalism. Instead, men and women could organize themselves, participating in local direct democracy (citizen’s assemblies) to determine what is best for their communities, and take on the responsibility of a worker-owner (in worker councils) to help determine what is best for any business or organization they choose to join (see “Worker Control of Businesses” in What is Socialism?). They envision a world with no congressmen, presidents, or CEOs to put innocent people at risk in the pursuit of profit or power. With an emphasis on free association between people, individual liberty, and a democratic sharing of wealth and power, this is hardly an image of destruction and madness. It is order without oppression, democracy without the State.

Pierre-Joseph Proudhon wrote (see Anarchism, Guerin):

To be governed is to be watched over, inspected, spied on, directed, legislated, regimented, closed in, indoctrinated, preach at, controlled, assessed, evaluated, censored, commanded; all by creatures that have neither the right, nor wisdom, nor virtue… To be governed means that at every move, operation, or transaction one is noted, registered, entered in a census, taxed, stamped, priced, assessed, patented, licensed, authorized, recommended, admonished, prevented, reformed, set right, corrected. Government means to be subjected to tribute, trained, ransomed, exploited, monopolized, extorted, pressured, mystified, robbed; all in the name of public utility and the general good. Then, at the first sign of resistance or word of complaint, one is repressed, fined, despised, vexed, pursued, judged, sentenced, deported, sacrificed, sold, betrayed, and to cap it all, ridiculed, mocked, outraged, and dishonored. That is government, that is its justice and its morality!… O human personality! How can it be that you have cowered in such subjection for sixty centuries?

Anarchist thought is ancient. It is imagined to have arisen alongside the earliest civilizations, such as 6th century B.C. China (the philosopher Lao Tzu and Taoism have been embraced by many anarchists). Wherever there is authoritarianism, there is surely anti-authoritarian sentiment. Of course, one could say anarchism has been around for 100,000 years, as long as humanity itself. Is it simply a modern yearning to return to how humans lived for 95% of our existence, under primitive communism, when humans lived in kin-based groups free of government?

Socialists and anarchists disagree over whether class oppression, exploitation, poverty, and war can be abolished only after the State is dismantled, or if the State has a role to play in ending these things. H.G. Wells, among many, thought only socialism could make anarchism possible (see New Worlds For Old, Wells):

Socialism is the preparation for that higher Anarchism; painfully, laboriously we mean to destroy false ideas of property and self, eliminate unjust laws and poisonous and hateful suggestions and prejudices, create a system of social right-dealing and a tradition of right-feeling and action. Socialism is the schoolroom of true and noble Anarchism, wherein by training and restraint we shall make free men.

Frederick Engels wrote that socialism would cause the State to “wither away,” meaning that after political power was given to the people the State would disappear as we know it. Socialist George Orwell (whose 1984 and Animal Farm condemned the totalitarian socialism of the U.S.S.R.) wrote, “I worked out an anarchistic theory that all government is evil, that the punishment always does more harm than the crime and the people can be trusted to behave decently if you will only let them alone.” But he concluded, “It is always necessary to protect peaceful people from violence. In any state of society where crime can be profitable you have got to have a harsh criminal law and administer it ruthlessly” (Road to Wigan Pier, Orwell).

To this writer, the State is necessary to protect ordinary people from the worst ravages of capitalism, whether miserable wages or the poisoning of the biosphere. The State cannot be eliminated until capitalism is eliminated.

Anarchism may sound similar to American libertarianism. Libertarians in the United States emphasize individual liberty, voluntary associations, and diminished government, but are staunchly pro-capitalism. Modern anarchist Noam Chomsky summed up the difference:

What’s called libertarian in the United States, which is a special U.S. phenomenon, it doesn’t really exist anywhere else—a little bit in England—permits a very high level of authority and domination but in the hands of private power: so private power should be unleashed to do whatever it likes. The assumption is that by some kind of magic, concentrated private power will lead to a more free and just society.

Libertarians fail to address the authoritarianism, abuse, theft, and exploitation wrought on innocent people by capitalist owners, at times graver than anything government could concoct. “What’s called libertarian” today doesn’t extend much farther than the U.S. because elsewhere there is already a name for it: anarcho-capitalism. This “free market anarchism” is considered blasphemous and contradictory by many anarchists, since capitalism involves hierarchy and authoritarianism. The anarchism that socialists desire will be free of capitalism; the people will democratically own their workplaces, industries, and communities.

Anarchism, in its rejection of the State, rejects nationalism, the false divisions between people. Marx wrote, “The workingmen have no country.” When workers control the workplace and hold decision-making power in their communities, there will be no need for a State controlled by upper class rulers, and if the State does not exist, neither will nations, and neither will senseless wars between nations. Socialism and anarchism emphasize the brotherhood of all men. John Lennon, a self-described socialist (see the Playboy interviews of 1981), captured the anarchist philosophy in his song “Imagine”:

Imagine there’s no countries
It isn’t hard to do
Nothing to kill or die for
And no religion too
Imagine all the people
Living life in peace…

Thomas Paine said, “Independence is my happiness, and I view things as they are, without regard to place or person; my country is the world, and my religion is to do good” (Rights of Man). Jack London wrote that people should care “more for men and women and little children than for imaginary geographical lines” (How I Became a Socialist). Prominent American anarchist Emma Goldman, writing in 1908, had harsh words for “patriotism” (Declarations of Independence, Zinn):

Conceit, arrogance and egotism are the essentials of patriotism. Let me illustrate. Patriotism assumes that our globe is divided into little spots, each one surrounded by an iron gate. Those who have had the fortune of being born on some particular spot consider themselves nobler, better, grander, more intelligent than those living beings inhabiting any other spot. It is, therefore, the duty of everyone living on that chosen spot to fight, kill and die in the attempt to impose his superiority upon all the others.

Indeed, patriotism and nationalism have killed more people than any force in human history, even more than religion. 60 million people died in two world wars alone, in just a quarter-century. The Central and Axis Powers used the glorification of the State to encourage soldiers and civilians to participate in war and unimaginable atrocities, or look the other way, and the Allied Powers did the same in response. Blind patriotism leads to moral blindness.

Goldman inspired Howard Zinn, who wrote in 2005 (Declarations):

There was something horrifying in the realization that, in this twenty-first century of what we call ‘civilization,’ we have carved up what we claim is one world into 200 artificially created entities we call ‘nations’ and armed to apprehend or kill anyone who crosses a boundary.

Is not nationalism–that devotion to a flag, an anthem, a boundary so fierce it engenders mass murder–one of the great evils of our time, along with racism, along with religious hatred? These ways of thinking–cultivated, nurtured, indoctrinated from childhood on–have been useful to those in power, and deadly for those out of power.

Socialism in Kansas City: A Short History

 

[A man] carrying a red flag…should be arrested [like a] dangerous man who is flourishing a deadly weapon.

So wrote the Kansas City Star in the waning years of the 19th century.

As the 20th century dawned, American socialist and communist movements grew in popularity and became a political force to be reckoned with. As documented in Howard Zinn’s A People’s History of the United States, an estimated 1 million Americans read socialist newspapers. The Socialist Party had nearly 120,000 members. Socialist politicians served in 340 cities across the country, some 1,200 mayors, councilpersons, state congressmen, and other politicians. Victor Berger of Milwaukee, a city run by socialists off and on for 50 years, became the first socialist U.S. Congressman in 1911. Eugene V. Debs of Indiana was the presidential candidate for the Socialist Party in 1900, 1904, 1908, 1912, and 1920. In 1920, he garnered 6% of the national vote (nearly 1 million people), a percentage many modern third-party candidates would die for — and he did it from a prison cell, having been jailed for speaking against U.S. involvement in World War I.

This article will not explore the ideology of socialism in-depth, but generally speaking socialists believe workers should own and manage their workplaces democratically and share the wealth workers create, rather than allow one owner or a board to monopolize decision-making power and award themselves much while offering workers little. As Kansas City’s Midland Mechanic wrote on July 14, 1898, “Labor produces all wealth and provides the luxuries of the rich, but it clothes itself in rags, lives in hovels, is denied justice and ridiculed by plutocracy.”

Therefore, socialists were leaders of the labor movement, organizing and striking for higher wages, union rights, workplace safety, and the end to child labor and 12- and 16-hour workdays. Socialists further believe government, both local and national, should be controlled by the people (yes, some in the past believed the government should own the workplaces, with the people or their worker representatives owning the government). In short, in both the political and economic worlds, the many should rule, not the few — power to the people. Such ideas often encouraged solidarity and friendship between workers regardless of race, religion, national origin, or gender. Not always, by any means, but at times. Hence, socialists and communists (including many black socialists and women socialists) were often leaders and supporters of historic equal rights and anti-war movements.

Like other cities, Kansas City was home to socialist organizations and newspapers. In fact, what would become the largest socialist newspaper in the nation with 760,000 subscribers, the Appeal to Reason, began in Kansas City. Julius A. Wayland, after fleeing Indiana to avoid a lynching over his socialist ideology and helping found the utopian, communal Ruskin Colony in Tennessee, moved to Kansas City and started the paper in 1895. Its name was a nod to Thomas Paine. Wayland printed 50,000 copies of his first issue. To save on costs, Wayland moved his business to Girard, Kansas, in 1897.

From there it would grow into a national paper. Wayland included the writings of Thomas Paine and of course Karl Marx to popularize socialism. Further, to quote the Socialist Worker, a modern publication:

Among the paper’s correspondents were Upton Sinclair, Jack London, Mother Jones and Eugene V. Debs. The Appeal first made Upton Sinclair famous. In 1905, Warren approached the novelist with the idea of shedding light on the appalling working conditions in Chicago meatpacking plants. Sinclair was to work incognito, gathering information. The result was a series in the Appeal called “The Jungle,” which modern readers may know as one of the most widely read works of American literature.

The paper arrived during the depression of the 1890s, when the Kansas City Star was writing that there was “a tendency to speak of ‘the unemployed’ as of a permanent, recognized, and even organized class” and the Kansas City Mail wrote that “hard times is the cry of everyone nowadays.” The Socialist Labor Party in Kansas City declared in 1895, “Never before in the history of mankind has there been so much suffering from hunger and privations of all kinds alongside of luxury and abundance of nature’s gifts and the products of labor.”

The Star, however, was not pro-labor. It boasted that “the grievous oppression of labor is no longer possible in America” in 1891. It condemned Eugene Debs for the Pullman Strike, a nationwide strike of railroad workers in 1894. The Mail wasn’t particularly thrilled about radical leftists either, declaring in 1893, “Mormons and Socialists should be scattered to the four winds.”

The Kansas City branch of the Socialist Party published a weekly newspaper, the Workers’ World, “one of the few pro-Communist papers in the Midwest.” One can actually read copies from 1919 online. It was founded by socialists James Cannon and Earl Browder, prior creators of another labor paper, the Toiler. Published by Max Dezettel, the Toiler advocated syndicalism — transferring ownership of business to the workers and their unions. The Kansas City Syndicalist League, which historian Edward Johanningsmeier called “the strongest component of the national league,” had “practical control” over the local cooks, barbers, and office workers unions.

Browder was a member of the American Federation of Labor and worked in a bookstore and for the Johnson County Cooperative Association in Olathe, Kansas. Like Debs, he spoke out against World War I, the draft in particular, and was imprisoned from late 1917 to late 1918. Cannon was an International Workers of the World member and one of the founders of this country’s Communist Party (in 1919) — Browder became its General Secretary in 1930. Six years later, Browder was nominated as candidate for president of the United States. Cannon traveled multiple times to the Soviet Union to represent U.S. communists at the Comintern.

On Friday, April 4, 1919, in its first paper (selling for 5 cents), the Workers’ World laid out its raison d’être, its reason for being:

Capitalist society is destroying itself with the forces generated within its own body… Unemployment is growing in these United States weekly, daily, hourly. Sporadic strikes are occurring everywhere, and growing in power and scope with every strike. Wage and working standards are being demoralized. Prices are going up instead of down…

Our rulers, from the “schoolmaster” down to the smallest bank director, are exhibiting nothing but futile gestures, sonorous phrases, and a general incapacity for even an intelligent understanding that a fundamental change is necessary. From such a situation nothing can come but a great crash, and the crash will not be long in coming.

Socialism offers the only way out. But socialism, to be effective, must be organized and must become vocal. This is the “Why” of the Workers’ World, to demand the abolition of exploitation, to assert the necessity for the control of society by the workers…and to assist in developing the practical program by which the workers will take over industry for society as a whole…to foster and encourage, in season and out, that faith in the working class and its ability to control its own destiny…

The paper focused heavily on socialist theory and practice, prison reform, and labor struggles. It arrived during the fourth month of a great streetcar worker strike, which had two causes. Workers who organized into a union, the Carmen’s Union, were immediately fired by the streetcar company. Further, workers wanted a wage increase from 36 cents to 42 cents an hour. The men left their jobs and “met at Labor Temple and paraded, with bands and banners, through the main streets of the city, and under the windows of the Street Railway office at 15th and Grand.” Then “the case was taken before…Wm. Howard Taft,” the former president, at the National War Labor Board, which was designed to mediate worker-employer disputes.

The company hired scabs (or “finks”), who lived like a “herd in the barns at 16th and Garfield where they were being housed and fed by the company,” to replace the strikers. So thousands of “indignant and outraged workers gathered around the barns, overpowered the police, burned a few cars as a sign that they were in earnest, and escorted the ‘finks’ in a body to Union Station, where they saw them carefully out of town.”

Things only escalated from there. “Kansas City was given the strange spectacle of soldiers with fixed bayonets and machine guns, patrolling the streets of Kansas City night and day in motor cars. A campaign of terrorism was inaugurated against the men, strikers, and even suspected sympathisers [sic], being arrested upon the flimsiest pretext. To utter the word ‘scab’ publicly meant at the least a week or two in jail.” Four men were arrested after rumors that strikers were dynamiting streetcars arose — and were allegedly forced by the police to confess. Then “certain men, supposed to be in the pay of the railway company, were said to have been caught trying to place explosives in the Labor Temple.”

“The government acts only to uphold the company,” Workers’ World wrote. “All forces are arrayed against the men, who are still standing together in magnificent solidarity with nothing on their side but the justice of their demands. Will cynical and arrogant forces win? It will be a black day for the Kansas City capitalists when ALL the workers realize as fully as do the streetcar men that justice can only be obtained by taking the government into their own hands.”

Socialism was discussed in public forums in Kansas City. For example, the American Federation of Labor held a convention in Kansas City in December 1898, where, according to the New York Times, “socialism was the absorbing topic.” Indeed,

The Socialist delegates made a determined effort to infuse Socialistic doctrine into the law of the Federation, by the introduction of a resolution the gist of which was that the constitution of the federation be changed so as to admit indorsement [sic] of no political party except that “bearing on the class-conscious propaganda for abolition of the wage system.”

Probably they will not succeed, for there is a majority against them, but the Socialist orators held the floor nearly all the afternoon, and will continue their argument to-morrow.

Kansas City was gripped by the typical hysteria over socialism — the Red Scare.

Take for example 1913, which saw a “Free Speech Fight in Kansas City” (International Socialist Review). 85 members of the Industrial Workers of the World were thrown “in jail for speaking on the streets. The number is increasing daily with men who come from different parts of the country, some of them from as far as Great Fall, Mont., beating their way, braving the cold and snow, to fight and suffer for the right to agitate and educate the workers for the overthrow of capitalism.”

The mass protests and mass arrests began when “the police broke up a street meeting on behalf of the Wheatland prisoners. Five men were sentenced to 200 days in the workhouse. The others have been sentenced to similar and even longer terms.”

The police “clubbed the speakers off the streets.” Some were “clubbed and so badly injured that they had to be taken to the hospital,” the punishment for those “brave men who dare to speak against capitalism.” Yet the “resolute rebels have determined to have free speech at any cost.”

Like elsewhere, some socialists (white and black) helped push forward black rights. People like Herb March of the Young Communist League and socialist Charles Fischer united blacks and whites at places like the Armour packing house, where blacks were fired first and underrepresented in better positions. They formed a union that became the largest racially diverse organization in the city, with leaders from both races. In September 1938, after a pay dispute involving unpaid blacks, 400 black and 600 white workers occupied Armour together for days. “It left a unity of friendship that couldn’t have been created in any other way,” Fischer recalled. Further, he remembered:

There was, of course, that religious difference and that racial difference, which were obstacles at first but which were all overcome. All of them — simply by showing the people that we all had a common goal to make a decent living, to have a decent standard of living, and this was the way to go, and the only way to go, because without a union, we’re all lost.

The strikers won their demands.

Further, black and white members of the Kansas City branch of the Communist Party marched through the city together to protest unemployment in 1931. Black communists like Abner Berry gave speeches around the city to help unite workers (see Racism in Kansas City: A Short History).

Many socialists understood the relationship between race and class: racist doctrines justified economic oppression by capitalists, employers. Just like emancipation of yesteryear would mean the end of free labor for slave owners, human equality would force business owners to pay blacks the same wages as whites. Racism served to prevent this, just as sexism and xenophobia prevented the same for women, undocumented immigrants, and others. Further, racism discouraged diverse workers from uniting (and was often stoked by corporations as thoroughly as possibly to weaken labor organizations). In 1931, James Cannon, former editor of Workers’ World, wrote for a New York paper:

In its struggle against the workers’ emancipation movement capitalism plays upon all the dark sentiments of ignorance, prejudice and superstition. This is seen daily and hourly in its endeavors to divide the workers and oppressed people along national, racial and religious lines…. [White workers are] inflamed against the foreigner, the Jew and the Negro. Communism cannot be other than the mortal enemy of these devastating prejudices…. Communists must be the heralds of a genuine solidarity between the exploited workers of the white race and the doubly exploited Negroes.

Kansas City was home to a branch of a black socialist organization called the Black Panther Party. The local chapter started in 1969 and was headed by Pete O’Neal. The Panthers aimed to promote self-defense and use of Second Amendment rights, to unify workers against capitalist exploitation, to embrace black pride, to make African Americans politically powerful and economically self-sufficient, to end illiteracy, hunger, and poverty in black communities, and to fight and die at any time for freedom. Marxist ideas of giving power to the common people attracted many, as did the idea of revolution in an America where blacks were stripped of their human rights and white vigilantes and police could attack and kill peaceful marchers with total impunity.

The local chapter created social programs to lift Kansas City blacks out of poverty. Its “three major survival programs included a free breakfast program, black history classes, and free health screening for sickle cell and hypertension.” Food donations from local businesses fed 700 children each day (Racism in Kansas City). The Kansas City Panthers had female members and leaders, like Charlotte Hill O’Neal.

Indeed, men were not the only socialists (though socialist women were usually made subordinate to men). Take Kate Richards O’Hare, who, while being a racist segregationist, was a vocal Socialist Party organizer, an anti-war and anti-militarism advocate who was also imprisoned under the Espionage Act (freedom of speech was not particularly popular in America during the Great War). She later made an unsuccessful run for Congress on a Socialist Party ticket. O’Hare lived on a farm in rural Kansas and then moved to Kansas City as a youth. She remembered in an article for the Socialist Woman:

Then came the day when we left the ranch and went to the city to take up the life of a wage-worker’s family in the poverty-cursed section of the town. For, of course, no other was possible for us for father’s wages were only nine dollars a week and nine dollars is not much to support a family of five. Of that long, wretched winter following the panic of 1887 the memory can never be erased, never grow less bitter. The poverty, the misery, the want, the wan-faced women and hunger pinched children, men trampling the streets by day and begging for a place in the police stations or turning footpads by night, the sordid, grinding, pinching poverty of the workless workers and the frightful, stinging, piercing cold of that winter in Kansas City will always stay with me as a picture of inferno such as Dante never painted…

I, child-woman that I was, seeing so much poverty and want and suffering, threw my whole soul into church and religious work. I felt somehow that the great, good God who had made us could not have [wanted to abandon] his children to such hopeless misery and sordid suffering. There was nothing uplifting in it, nothing to draw the heart nearer to him, only forces that clutched and dragged men and women down into the abyss of drunkenness and vice. Perhaps he had only overlooked those miserable children of the poor in the slums of Kansas City, and if we prayed long and earnestly and had enough of religious zeal he might hear and heed and pity.

O’Hare was a machinist with her father and a trade unionist, until she heard Mother Jones speak at the Cigar Maker’s Ball in Kansas City. She “hastily sought out ‘Mother’ and asked her to tell what Socialism was.” O’Hare then became a socialist, reading the Appeal to Reason, gaining Wayland as a mentor, and joining the Socialist Labor Party of Kansas City in 1899. She joined with Caroline Lowe (a teacher) and Winnie Shirley, other Kansas City socialist women, to push for socialism throughout the southwestern U.S. O’Hare soon rivaled Eugene Deb’s popularity in the Southwest, gaining a national and even international reputation, according to historian James Green.

Another famous socialist woman was Ella Reeve Bloor, who helped establish the Communist Labor Party in Kansas City and was later a national organizer. She wrote for the Workers’ World as well.

Socialism in Kansas City found a home in the 1970s in the form of the Kansas City Marxist-Leninist Cell and the Kansas City Revolutionary Workers Collective, a black Marxist organization with “roots in the Afro-American student and community struggles” that reached out to national communist groups and local groups like the Wichita Communist Cell. The KCRWC declared, “We will struggle to unite the working class movement with the movement of oppressed national minorities, women, students, and all who will struggle for the socialist revolution. We will lead the U.S. working class to its greatest victory yet — the [establishment] of the People’s Socialist Republic of the United States!”

The KCRWC had harsh words for both the United States and the U.S.S.R. regarding imperialism, calling the two superpowers the “most dangerous exploiters… These two bloodsuckers are the biggest threat to world peace… The competition for world domination by these two superpowers, which is particularly acute in Southern Africa, the Mideast, and Europe, exposes their true aims.” Further,

The U.S. has long been regarded as a reactionary imperialist power, and has long ago won the bitter hatred of the world’s working people — from Puerto Rico to Chile, from southern Africa to Vietnam… The Soviet Union is now a fascist police state internally, and a vicious exploiter internationally. We say that the Soviet Union is social-imperialist — socialist in words, imperialist in deeds.

During the great Kansas City, Missouri, School District teacher strikes of the 1970s, the KCRWC stood with the teachers, calling the strike a “just struggle.”

Black and white teachers went on strike for forty-two days in 1974 and again, three years later, for forty-four days. The strikes, organized by the American Federation of Teachers, pushed for better wages, smaller class sizes, sick leave, better working conditions, and other demands. The district sought court edicts to end the strikes or weaken them through restraining orders. Violations of court orders earned strikers fines or jail time.

On April 7, 1977, the Star ran the headline “127 Teachers Arrested in School Disturbances.” The strike beginning March 1977 shut down ninety-two schools and left 51,000 students out of class (see Racism in Kansas City).

The KCRWC condemned the priorities of those who “own all the wealth and power in society”:

To the capitalists, the education of the working class children is not a profitable venture. Consequently, public schools are allowed to deteriorate. Capitalists invest in more profitable areas, such as spending billions for bombs and missiles to be used against other peoples of the world.

It called for parents, students, and workers to unite against the school board and the capitalist economic system.

It wasn’t the first time in Kansas City that socialists were involved in public school reform, for example in the 1890s and 1910s criticizing “the centralized structure and elite membership of the local school board… [They] called for representative democracy, but unfortunately lacked the power to implement desired changes,” as historian William Reese writes. The Socialist Labor Party in Kansas City called the school board “absolutely capitalistic.”

In modern times, some Kansas Citians still believe in socialism. Small groups come and go, too numerous to fully list: the Kansas City Marxist Alliance, the Kansas City Youth for Socialist Action, and so on. Today, there exist socialist groups like the Progressive Youth Organization, the Kansas City Revolutionary Collective, and the Kansas City Democratic Socialists of America. Groups and individuals study, write, talk, and preach about socialism, working toward what William Morris called the “next step” in the Workers’ World on November 28, 1919:

A new society founded on industrial peace and forethought, bearing with its own ethics, aiming at a new and higher life for all men, has received the general name of Socialism, and it is my firm belief that it is destined to supersede the old order of things founded on industrial war, and to be the next step in the progress of humanity.

How Technology Under Capitalism Will Leave All of Us Jobless

The march toward the obsolescence of human labor is an inevitability of capitalism.

In a capitalist society, a business is structured like a dictatorship: an owner or small group of owners, board members, and investors hold all the power and make all the decisions, including how company profits are used — to increase production, to open new plants or stores, invest in new technology, increase advertising, hire more workers, increase worker pay, increase owner pay, and so on. They also decide, when times are rough, when to close the stores or factories, when to lay off workers, when to sell the business, etc.

As a business owner, investing in technology can make your workplace(s) more automated, allowing you to reduce your workforce. While technology costs money to create, install, and maintain, it can save huge sums compared to human labor, and is much more efficient. Ford, for example, needs only one-third of the workers it needed in the 1970s for the same production levels (Imagine, Goldwin and Smith). Fukoku Mutual Life Insurance recently replaced dozens of employees with A.I., expecting a 30% increase in productivity. This leads to greater profits.

(There is little evidence, by the way, that higher minimum wages exacerbate this process; studies overwhelmingly show that raising the minimum wage does not cause unemployment, as more money in people’s pockets leads to more spending at businesses, creating equilibrium.)

The owners benefit immensely, massively increasing their wealth, but the workers are sent packing, forced to find work elsewhere (this has contributed to severe inequality in the U.S., where the bottom 80% of Americans now own just 7% of the national wealth and the top 1% owns 40%; recent income growth has gone almost exclusively to the rich; CEO pay has skyrocketed, worker wages have stagnated).

New technology and broader divisions of labor (think of the assembly line) constantly make specialized labor obsolete. The pursuit of profit tends to make a worker “an appendage of the machine, and it is only the most simple, most monotonous, and most easily acquired knack that is required of him,” to quote The Communist Manifesto. When a task that originally required advanced training or higher education can be accomplished by low-skill labor, a capitalist has no need for someone with a college degree and needs not pay the higher salary. Then competition among workers for that job is broadened, driving the wage down further. If a task can be totally replaced by a machine, the job opportunity vanishes completely (“technological unemployment”).

Supporters of capitalism will protest, saying the advent of new technology often creates new high-skill, high-wage jobs, which is true. New technologies, from computers to jets, require trained personnel to build, maintain, upgrade, and operate them. However, the people who can take advantage of these new opportunities are not usually the ones who are displaced by the new technology. The losers (usually older folks) find their once-valuable skills irrelevant and their jobs eliminated. As Erik Olin Wright (Envisioning Real Utopias) points out, firms do not wish to spend the money to retrain older workers, and the new opportunities may be in far away cities, requiring obsolete workers to move even if they got new training. Perhaps they would have to stop working and go back to school, something most adults with families can’t do. And even the winners may not be safe for long, as the cycle continues: firms divide labor, automate tasks, and turn high-skill work into low-skill work. The winners’ jobs are eventually obsolete, and then they are fired and must find new work, sometimes a low-skilled, low-wage job.

Now, it is also true that new technology can create low-skill work. Uber lets more people be personal drivers, Postmates creates delivery jobs, the relative ease of launching, running, and monetizing a website and social media creates work for many. A cheerful analysis by economists in 2015 declared technology, because it builds a more advanced, prosperous society, created more jobs than it destroyed in the U.K. in the last 140 years; so while jobs for farmers, secretaries, washers, and launderers vanished, jobs for teachers, caretakers, social workers, and nurses increased. They also noted how increased personal wealth in a more advanced society leads to more spending on luxuries, hence a rise in the demand for bartending and hairdressing jobs. In other words, as a separate analysis put it, it is often the case that “growth of jobs at low risk of automation outpaces loss of jobs at high risk” (in the case of the U.K., from 2001 to 2015, 3.5 million low-risk jobs were added to the economy, 800,000 high-risk jobs lost).

Yet this does not mean there will always and for all time be enough jobs free of automation for every citizen that needs work (even today during economic boom times, there are not always enough jobs for everyone, low- or high-risk).

Most unskilled labor, if we think of 50, 100, 500, or 1,000 years from now, will surely be abolished by automation and robotics. Machines can already operate a warehouse, pick and inspect fruit, build cars, and lay bricks. Google and Uber are already working on driverless cars, Amazon on drone delivery systems. U.S. restaurants are installing tablets at tables or counters that take orders and payments, China perfecting a weaponized police robot (Anbot), Toshiba placing a temporary robot employee (ChihiraAico) in a Japanese department store, Nanyang Technical University unveiling a robotic secretary (Nadine), the PR2 robot at MIT can bake, and even sex robots are under construction, perhaps one day threatening prostitution! Amazon Go is a cashier-less grocery store.

High-skilled work is not free of risk either (who wouldn’t want a robotic lawyer with advanced knowledge of every legal case ever argued, able to easily out-think a human attorney?). Radiologists and journalists are threatened by technology able to do parts of their jobs faster, cheaper, with fewer errors.

A 2013 study by Oxford economists estimated 47% of jobs in the U.S. are currently at high risk of automation, perhaps fully automated “over the next decade or two” (including service, sales, office and administrative, production, and transportation jobs), 19% of jobs at medium risk of automation, and 33% at low risk (including other service jobs, plus education, media, legal, healthcare, business management, and engineering jobs).

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via Oxford Martin

Other analysts declared in 2015, “Our research suggests that as many as 45 percent of the activities individuals are paid to perform can be automated by adapting currently demonstrated technologies. In the United States, these activities represent about $2 trillion in annual wages.”

Wren Handman writes, “Boston Consulting Group predicts that by 2025, up to a quarter of jobs will be replaced by either smart software or robots. Gartner, a technology research firm, ramps that estimate up and predicts that one third of all jobs will be eliminated by 2025…” The number of factory robots in manufacturing centers like Detroit, Toledo, Grand Rapids, Louisville, and Nashville tripled between 2010 and 2015 alone. Capitalist owners will increasingly be able to do away with human labor, increasing profits—and the wealth gap between them and everyone else. The workers will have to compete for fewer and fewer non-automated jobs.

Albert Einstein wrote that under capitalism, “Technological progress frequently results in more unemployment rather than in an easing of the burden of work for all” (“Why Socialism?,” Einstein). Advances in technology and productivity (and thus profits) could allow for higher wages and shorter work weeks for workers at their workplaces — if workers owned their workplaces and called the shots. Yet over the past four decades—a time of skyrocketing productivity—wages barely budged, and while human beings are working fewer hours than centuries past, particularly in Europe, four in ten Americans are still working over 50 hours a week and full-time employees average 47 hours per week. Some of our neighbors work 60, 70 hours a week to make ends meet. Technological progress for each capitalist firm, instead of changing work for the better for each worker, exiles more people from the firm and from that type of work, creating a larger pool of laborers needing to compete for jobs elsewhere — usually low-skill and low-wage jobs.

What will happen to the vast majority of human beings when machines can outperform them at any job? When business owners can automate any task imaginable, increasing efficiency and profits?

There will surely always be demand for some human workers — perhaps citizens won’t want a robot teacher for their child or robot caretaker for their ailing parents. Perhaps business owners will always want to provide a human face to consumers, and will always preserve a partially human staff. Perhaps we’ll want human writers and human preachers. But can we all be teachers, childcare providers, business reps, and clergymen?

Surely for the vast majority of us, when all the freight trucks no longer need drivers, when machines can take an order, prepare your meal, and accept a credit card, when robotic clerks serve you at retail stores and police the streets — whether this happens in 100 years or 1,000 — we will need a new form of social organization to avoid extreme poverty, unemployment, homelessness, and hunger.

There are essentially two solutions.

One is a guaranteed basic income: the State simply provides each citizen with a monthly stipend, citizens spend the money where they will, taxes are collected on the businesses and organizations where people spent their money, and the cycle continues. Switzerland is already moving closer to adopting a guaranteed income. In this way, those who own the technology that made work a thing of the past make survival possible for the masses.

The other solution is worker ownership: businesses will have to be owned by all their workers, so that no worker will be fired as technology improves. In an authoritarian capitalist firm, robotic labor means fewer human workers. In a worker-owned firm, it means participants in the firm can switch to more fulfilling and enjoyable tasks, and work fewer hours each week for the same income, if not more. In this way, the technology would be owned by the masses, and the profits would be shared, making survival possible.

Worker ownership is already a reality in the U.S. and around the world, as explored in “What is Socialism?” This solution is a bit more complex than a guaranteed income (if there are more people looking for work than worker cooperatives need, it may be necessary for the State — or local governments — to launch New Deal-style public work projects, using tax dollars to pay people to improve their communities, even if machines could do it better). But it may be a better option than paying citizens who don’t work, as there may be work that could improve society but is unaddressed because worker cooperatives can’t profit from it (i.e., cleaning up streets and rivers, or tutoring struggling students).

Either solution, of course, is socialism.

Oscar Wilde contrasts in The Soul of Man Under Socialism how machinery operates under capitalism and how it should operate under socialism:

Up to the present, man has been, to a certain extent, the slave of machinery, and there is something tragic in the fact that as soon as man had invented a machine to do his work he began to starve. This, however, is, of course, the result of our property system and our system of competition. One man owns a machine which does the work of five hundred men. Five hundred men are, in consequence, thrown out of employment, and, having no work to do, become hungry and take to thieving. The one man secures the produce of the machine and keeps it, and has five hundred times as much as he should have, and probably, which is of much more importance, a great deal more than he really wants.

Were that machine the property of all, every one would benefit by it. It would be an immense advantage to the community. All unintellectual labour, all monotonous, dull labour, all labour that deals with dreadful things, and involves unpleasant conditions, must be done by machinery. Machinery must work for us in coal mines, and do all sanitary services, and be the stoker of steamers, and clean the streets, and run messages on wet days, and do anything that is tedious or distressing. At present machinery competes against man. Under proper conditions machinery will serve man.

Jack London said something similar:

Let us not destroy those wonderful machines that produce efficiently and cheaply. Let us control them. Let us profit by their efficiency and cheapness. Let us run them for ourselves. That, gentlemen, is socialism… (A People’s History of the United States, Zinn)

As technology approaches a point where human labor will be all but obsolete, these ideas become increasingly relevant. When physicist Stephen Hawking was asked in 2015 whether technology would lead to mass unemployment, he replied:

If machines produce everything we need, the outcome will depend on how things are distributed. Everyone can enjoy a life of luxurious leisure if the machine-produced wealth is shared, or most people can end up miserably poor if the machine-owners successfully lobby against wealth redistribution. So far, the trend seems to be toward the second option, with technology driving ever-increasing inequality.

With so many jobs under threat of extinction in the next few decades alone, we know what option humanity must choose.

Screen Shot 2017-11-17 at 10.14.15 AM

via Vice

What is Socialism?

 

“If we are to achieve a real equality, the U.S. will have to adopt a modified form of socialism.”

Martin Luther King, Jr.

What is socialism? Socialism aims to eradicate forever authoritarianism, bureaucracy, poverty, and war; not by increasing government power, but by increasing democracy, the power of ordinary people, in politics and the workplace.

This is not authoritarian socialism, State Socialism, or Communism. This is democratic socialism, libertarian socialism. It is a vision of a better world.

 

Citizen Control of the State

Socialists seek the “socialization” of political power through direct democracy, a form of government that already exists in Switzerland. As Polish socialist Rosa Luxemburg said, “There is no democracy without socialism and no socialism without democracy.”

How would you like to have a say — a direct say — in public policy? How would you like decision-making power? Under direct democracy, all public policy would be decided by national vote, from abortion rights to whether the nation should wage war. Instead of only voting once every four or eight years, concerned citizens will vote many times a year, on national policy. They will vote on education standards, whether to grant amnesty to illegal immigrants, the federal budget, everything.

Socialism is the simple belief that the people should govern the politicians, not the other way around.

Citizens would have initiative rights for municipal, state, and national policy; that is, the ability to have a law or law change put before the people for a vote.

This is common at the local and state levels in the U.S. How did Colorado legalize marijuana in 2012? People gathered enough citizens on a petition, it was put on the ballot, the people voted, and it was done. No corrupt politicians in the way, swayed this way and that by lobbyists and their bribes. No bureaucracy, no unelected officials making decisions for the common people. Just socialized power.

Proposed laws would be available for reading online, under guidelines ensuring their readability and brevity (no more 1,000-page laws). There would be a required time for public debate before the vote, allowing people who choose to be active in politics to study the legislation, listen to media pundits scream at each other, sway others to their side, and finally make an informed, educated vote. Change will come through the battle of ideas, not the whims of corporations or power-hungry politicians.

Under socialism, an elected Supreme Court members and the president would preserve a system of checks and balances. The people would essentially take the place of Congress, being able to overrule the president’s veto with a supermajority but not the Court’s.

Short term limits, the threat of veto, and the threat of immediate recall vote (perhaps even of the president) would keep officials in line with the desires of voters. If, say, two-thirds of Americans felt the president wrongly vetoed a measure passed by the people, he or she could be overruled by national vote, just as Congress can do today. If the president (or any politician) refused to enforce laws, a two-thirds majority vote could remove him or her from office immediately. Politicians must be terrified of the people.

To quote The Communist Manifesto, “The first step in the revolution by the working class is to raise the proletariat [common people] to the position of the ruling class, to win the battle of democracy.” Power to the people, as the radical leftist saying goes.

 

A Simpler Government

Clearly, when the people become the lawmakers government will be simpler and smaller, in that bureaucracy will be all but eradicated and corruption (such as corporations pouring vast sums of money into politicians’ campaign coffers to influence legislation) will be extraordinarily difficult (how does one bribe the entire citizenry?).

But to enact the laws the people demand, there will still need to be various federal departments, like that of education, labor, energy, and so on (the members of which — you guessed it — would also be elected and at risk of immediate recall by popular vote, much different than unaccountable cabinet members appointed by the president). Fortunately, having been stripped of much of their power through direct democracy, their main task would be simple: writing checks.

The smaller government of socialism doesn’t mean no more taxes, but nor does it mean outrageous taxes. It means refusing to spend trillions on bank bailouts, wars, and a global military machine. It means using tax wealth (garnered progressively, having the rich pay higher rates than the poor and richer companies pay higher rates than smaller ones, as most people support) to meet human needs, primarily in three areas: healthcare, education, and jobs. There is a need for other departments to handle other things, of course (national defense and Social Security payments spring to mind), but these are the big three:

Guaranteed Work and a Strong Minimum Wage. Socialists envision using tax dollars to fund local public work projects. Even in the economic boom times of capitalism, there are not always enough jobs for those who seek them, and tens of millions remain very poor through no fault of their own. (Today, 48% of Americans are poor or make low income, as 50% of U.S. jobs pay less than $34,000 a year, about $24,000 after taxes.) But with public work projects, taxes could cover a basic salary to otherwise unemployed workers to rebuild our inner cities and slums, clean streets or rivers, tutor struggling students, plant new trees, paint murals on buildings — any productive task that betters society in some way. This has been accomplished successfully in the past, such as during the Great Depression. Some American and Canadian cities are already paying homeless men and women to do similar work, helping them crawl out of extreme poverty.

Such work need not be permanent (though governments could theoretically help workers organize into new, self-sustaining worker co-ops if there existed a consumer base for their mission), nor organized by the federal government. Federal tax dollars can be distributed to city councils based on annual unemployment levels, and cities can decide what projects they need to focus on to improve their communities.

Local projects run by locals, coupled with a strong minimum wage for all Americans (which many studies show does not increase unemployment and only causes slight increases in prices), would mean food stamps, child tax credits, the Earned Income Tax Credit, and other forms of welfare (except those for the elderly, sick, and disabled) could be eliminated. Unemployment compensation will disappear — paying someone for 99 weeks without work in return is extremely wasteful. Under socialism, men and women will be paid to work (see What Conservatives Will Love About Socialism).

In this way, unemployment and poverty can be eradicated.

Guaranteed Healthcare. Likewise, the State will not own the hospitals (as it does in Britain today) — the doctors, nurses, and janitors would (see below). But the Department of Health would receive medical bills from hospitals and would cover the costs — at the very least covering the costs of expensive surgeries and prescriptions that today leave many bankrupt (in 2013, an estimated 645,000 bankruptcies were linked to massive medical bills; at the beginning of 2016, 20% of insured Americans were having difficulty paying their medical bills) or dead from preventable problems (45,000 a year in the late 2000s died as a direct result of not having health insurance).

Universal healthcare already exists in virtually every industrialized nation besides the United States, and much can be learned from their experience.

The French system is more efficient, more popular, and far less expensive per citizen and as a proportion of GDP than the American system. Sweden insures all citizens, but uses private doctors and competition to keep down costs. True, these systems are not perfect, for example often relying on heavier taxes. Yet they are popular, even taken for granted, and no one is dying from preventable illnesses. Healthcare is seen as a human right, not something you must have a good job or enough money to have. The U.S. is wealthier than any nation that has universal healthcare today — if they can manage, so can we (and notice these democracies have yet to mutate into horrific Communist dictatorships).

Guaranteed Education. Under socialism, the State will not own the schools. Teachers, paras, librarians, and janitors will own their schools; professors, students, and groundkeepers will own the colleges (see below). But schools and colleges can be funded similarly to today (though school funding will no longer be based on property taxes, which ensures poor inner-city neighborhoods have dismal schools and rich suburban neighborhoods have very fine schools — schools will be funded equally).

In the same way taxation today provides free K-12 education for all, this could be expanded to cover the cost of college, something many other democracies have already accomplished. College only being available to those who can afford it or those willing to take on massive debts is an enormous waste of human talent. Anyone ambitious and willing to work hard should be able to earn a degree, regardless of whether they come from a rich or poor family. (One might ask if everyone has a strong wage and a job, why should college or healthcare be paid for? The answer is obvious: Tens of thousands a year for tuition or tens of thousands in medical bills would still not be doable for many families making a guaranteed salary of even $40,000 or higher — particularly those with multiple children, more than one sick parent, etc.)   

The teachers and workers who run the schools must of course have as much independence from the State as possible, more than they have today. In reality, a society where each school had total control over its curriculum (and all else) wouldn’t necessarily be incompatible with a socialist society. Likewise, neither would families being able to choose between any school they wished. However, it seems likely this “privatization” would cause serious problems. Should public schools have the freedom to simply not teach a subject? To gut the study of black slavery, the Civil War, or all of social studies for instance? And wouldn’t families flock to schools that align with their preferences, quickly making public schools divided by religion, political persuasion, race, and class…even worse than today? This is why schools should not be businesses that compete for students and tuition fees. It’s why schools and teacher salaries should remain funded through the State. (People will of course still have the freedom to create private schools; we’re talking about public schools here.) 

It seems reasonable to maintain a system where your public school is based on where you live. Though this is not a perfect system (most blacks and whites, for example, do not live in integrated neighborhoods, meaning they don’t share schools), it seems to offer the best chance for students to befriend and learn from other students and teachers who are culturally and ideologically different. Further, it makes sense to have a national curriculum, to keep learning consistent enough between schools, to aid both students and teachers who move around the nation.

The curriculum, of course, would be designed by an elected Department of Education and approved by the majority of the people. Should evolution and climate change be taught in public schools? Let the majority decide. 

 

Worker Control of Businesses

Socialism would not only end authoritarianism and bureaucracy in the State, it would mean the same for the place American adults spend most of their lives: their jobs.

Workers would own their workplaces. In a capitalist society, a business is structured like a dictatorship: an owner or small group of owners, board members, and investors hold all the power and make all the decisions, including how company profits are used — to increase production, to open new plants or stores, invest in new technology, increase advertising, hire more workers, increase worker pay, increase owner pay, and so on.

Predictably, owners often award themselves huge sums of money and pay workers little, creating massive inequality. Predictably, in the U.S. today the 1% of wealthiest citizens own as much wealth as the bottom 95% of citizens. The bottom 80% of Americans own just 7% of the national wealth, while the top 1% owns 40%. Capitalism is the few growing rich off the labor of the many. After all, could Steve Jobs have built all these devices himself? He needed workers.

Adam Smith, an economist that inspired Karl Marx, wrote in The Wealth of Nations of a central conflict under capitalism: “The workmen desire to get as much as possible, the masters to give as little as possible.” (Conservatives worship Smith, but would squirm if they actually read some of his insights.)

Marx believed, as do modern socialists, that wealth is created by workers. It’s a very simple idea. Originally, it is the company founder creating the good or providing the service, but eventually the owner hires workers and takes a managerial role. Without workers, an owner cannot produce on a scale larger than him- or herself. Wealth is created by workers because workers directly provide the good or service that is sold by the owner.

That sale covers the cost of production, the cost of labor, and a little extra: profit the owner uses as he or she chooses. This means workers are not paid the full value of what they produce for the company. Socialists call it exploitation. It is a theft by someone who would not have that profit without the workers. So socialists say profit should be kept and controlled by the people directly responsible for generating it. Under a system where all workers are owners, there would be no owner-worker conflict; unions would thus be obsolete.

True, owners make decisions that can lead to more sales and more profits. Like investing in a new technology, for example. But to put it bluntly, owners are not needed. The top-down, authoritarian structure is not vital. The workers can wield that decision-making power and keep the profits of those decisions. Worker cooperatives — businesses that are owned and run by the workers — are more democratic than capitalist-structured firms. They are “socialist” because power and wealth are “socialized,” or shared equally, within a firm. They still compete with other businesses to provide the best products for the lowest prices (market socialism).

Hundreds of successful worker cooperatives exist in the U.S., with many more around the world, some with a few employees, others with tens of thousands. Decisions are made democratically, by the vote of each employee, or by elected managers. Decisions on hours, pay, schedule, new hires, investments in new technology, opening new stores, and everything else is made by discussion and vote. Profits are distributed more equitably, enriching everyone, not just the few. More workers means profits are further divided, but just like in capitalist firms, more workers also mean higher profits. These cooperatives were organized by ordinary people, not the government.

When workers own their workplaces, there is little chance they will decide to fire themselves and outsource their own jobs to poorer nations. Capitalists do this so they can pay workers pennies and follow fewer worker safety and environmental regulations. Worker-owners are less likely to poison the soil, water, and air of their own communities, or ignore workplace safety guidelines. New technologies no longer lead to mass firings — they allow everyone to work fewer hours while making more money! Both worker ownership and people’s control of government will work in tandem to prevent oil companies and weapons manufacturers (the military-industrial complex Eisenhower warned of) from influencing the decision to wage war, as has occurred countless times in American history.

Unsurprisingly, workers-owners are happier, wealthier, more productive, and their businesses less likely to fold than capitalist firms. There are challenges, such as the ability to get credit from banks suspicious of co-ops, but they are in no way insurmountable. There is nothing to say in 200 years America will not be a nation of worker cooperatives, if that’s what people choose.

Marx saw worker cooperatives by 1864 as a

…victory of the political economy of labor over the political economy of property. We speak of the co-operative movement, especially the co-operative factories raised by the unassisted efforts of a few bold “hands”. The value of these great social experiments cannot be overrated. By deed instead of by argument, they have shown that production on a large scale, and in accord with the behests of modern science, may be carried on without the existence of a class of masters employing a class of hands; that to bear fruit, the means of labor need not be monopolized as a means of dominion over, and of extortion against, the laboring man himself; and that, like slave labor, like serf labor, hired labor is but a transitory and inferior form, destined to disappear before associated labor plying its toil with a willing hand, a ready mind, and a joyous heart.

To save the industrious masses, co-operative labor ought to be developed to national dimensions…

There are even some 60 American schools that have done away with authoritarianism, in their buildings at least, if not their districts.

Most private and public schools have top-down control, with the principal being the dictator at the top who makes all decisions on school policy and receives the biggest paycheck. So these experimental schools have simply done away with principals; teachers make all decisions, like hiring, curriculum, and school scheduling, democratically.

The Denver Green School in Colorado has a 4 day week for students, and on Fridays teachers, office personnel, social workers, and all other employees meet to discuss, debate, and vote on school policy. The Hughes STEM High School in Cincinnati has a principal, but he or she has equal power with teachers and cannot veto a democratic decision. Employees feel empowered, and in a profession with colossal turnover, the Avalon School in St. Paul has a teacher retention rate of 95-100%. Most teacher-led schools have on average fewer than 200 students, but larger schools are joining the trend, some with over 600. 

 

The Path to Communism?

Let it never be said that trying to accomplish these things will only lead to Communism. As you move toward democracy in politics and the workplace, you move away from Communism and State Socialism.

The goal of both democratic socialism and authoritarian socialism is the eradication of capitalism, but each has a different manner of going about it. Democratic (and guild, libertarian, etc.) socialism does so from the bottom-up, simply by workers (and even consumers or local communities) owning their workplaces. The government has no role except perhaps granting the lawful right of ownership. Communism destroys capitalism from the top-down, wherein the government owns all workplaces and organizes the economy and the workers according to a central plan. The people are supposed to own the government and thus the plan (this type of democratic nationalization is what Marx favored), but of course it doesn’t always work out that way.

Soviet Russia, for instance, was a command economy: top-down administration, an economy structured, ironically, like a single capitalist business. The iron fists of capitalists were replaced by the iron fists of dictators and unelected economic planners. This system is therefore called both state socialism and state capitalism in historical literature!

Opponents of socialism insist that these reforms — the government paying medical or tuition bills, expanded public sector work for the unemployed, worker ownership, and pure democracy — are a slippery slope to tyranny. Of course, Americans also insisted racial integration, Medicare, and social security would lead to authoritarianism! They were wrong. These types of arguments are often simply unfounded. Switzerland has direct democracy; a multitude of peaceful democracies in Europe and elsewhere have free college and healthcare; Germany requires large companies to have half their boards of directors elected by the workers (“codetermination”). Are these nations going to end up Communist dictatorships? When do we expect the gulags? Did New Deal programs destroy our right to start a business, work in a particular field, or vote for representatives? Did taxpayer-funded public schooling, small checks for the elderly, and covered healthcare bills for the disabled, very poor, and seniors?

It cannot be emphasized enough that direct democracy takes power away from the State and gives it to the people. True, the government has a role to play in footing bills, guaranteeing rights, and organizing and funding local work projects. (The right to workplace ownership would be in the same vein as minimum wage, workplace safety, anti-child labor, and anti-discrimination rights. You may see this as an evil government eradication of the right to be a capitalist owner, but rights are typically crushed by more ethical ones. The right of a worker to a minimum wage abolishes the right of the employer to pay him or her $2 per hour; the right of a person of color to be served at a restaurant ends the right of a white supremacist to deny him or her service; the right to workplace ownership makes history the right of capitalist exploitation and authoritarianism.) But direct democracy is the key to creating a government of, by, and for the people.

If you read the history of Marxism, the libertarian, democratic, and anarchistic socialists stood opposed to State Socialists like the Bolsheviks. There was a deep division between Marxists on bottom-up versus top-down control, which roughly determined who would go on to call themselves communists and who would call themselves socialists. In the Soviet Union, Communism crushed socialism through violence (read Anarchism, by Guerin, for a detailed and captivating study). The workers who took over their workplaces and their towns lost that power to the State at the end of a gun.

Perhaps nothing could better explain this dichotomy than an 1887 poem by Ernest Lesigne, a Frenchman. This was several decades after Marx and several before the Russian Revolution and the rise of the Soviet Union. It is called “Two Socialisms”:

There are two Socialisms.
One is communistic, the other solidaritarian.
One is dictatorial, the other libertarian.
One is metaphysical, the other positive.
One is dogmatic, the other scientific.
One is emotional, the other reflective.
One is destructive, the other constructive.
Both are in pursuit of the greatest possible welfare for all.
One aims to establish happiness for all, the other to enable each to be happy in his own way.
The first regards the State as a society sui generis, of an especial essence, the product of a sort of divine right outside of and above all society, with special rights and able to exact special obediences; the second considers the State as an association like any other, generally managed worse than others.
The first proclaims the sovereignty of the State, the second recognizes no sort of sovereign.
One wishes all monopolies to be held by the State; the other wishes the abolition of all monopolies.
One wishes the governed class to become the governing class; the other wishes the disappearance of classes.
Both declare that the existing state of things cannot last.
The first considers revolutions as the indispensable agent of evolutions; the second teaches that repression alone turns evolutions into revolution.
The first has faith in a cataclysm.
The second knows that social progress will result from the free play of individual efforts.
Both understand that we are entering upon a new historic phase.
One wishes that there should be none but proletaires.
The other wishes that there should be no more proletaires.
The first wishes to take everything away from everybody.
The second wishes to leave each in possession of its own.
The one wishes to expropriate everybody.
The other wishes everybody to be a proprietor.
The first says: ‘Do as the government wishes.’
The second says: ‘Do as you wish yourself.’
The former threatens with despotism.
The latter promises liberty.
The former makes the citizen the subject of the State.
The latter makes the State the employee of the citizen.
One proclaims that labor pains will be necessary to the birth of a new world.
The other declares that real progress will not cause suffering to any one.
The first has confidence in social war.
The other believes only in the works of peace.
One aspires to command, to regulate, to legislate.
The other wishes to attain the minimum of command, of regulation, of legislation.
One would be followed by the most atrocious of reactions.
The other opens unlimited horizons to progress.
The first will fail; the other will succeed.
Both desire equality.
One by lowering heads that are too high.
The other by raising heads that are too low.
One sees equality under a common yoke.
The other will secure equality in complete liberty.
One is intolerant, the other tolerant.
One frightens, the other reassures.
The first wishes to instruct everybody.
The second wishes to enable everybody to instruct himself.
The first wishes to support everybody.
The second wishes to enable everybody to support himself.
One says:
The land to the State.
The mine to the State.
The tool to the State.
The product to the State.
The other says:
The land to the cultivator.
The mine to the miner.
The tool to the laborer.
The product to the producer.
There are only these two Socialisms.
One is the infancy of Socialism; the other is its manhood.
One is already the past; the other is the future.

How Capitalism Destroys Itself Using Monopolies

In April 2016, oil giant Halliburton announced it would fight Department of Justice efforts to stop its merger with fellow oil giant Baker Hughes.

These are two of the largest corporations in the industry. The merger is valued at $35 billion, and would leave Halliburton-Baker Hughes in control of a huge percentage of the market share. As U.S. Attorney General Loretta Lynch said, “The proposed deal between Halliburton and Baker Hughes would eliminate vital competition.”

The march toward monopolization (the ownership of an industry by one company) is a self-destructive inevitability of capitalism. The unregulated pursuit of profit destroys competition itself. This is the natural trend of capitalism throughout its history, of larger firms taking over smaller firms to increase their share of a market.

To quote French politician and economist Pierre-Joseph Proudhon, the first self-described anarchist: “Competition kills competition” (see Guerin, Anarchism). 

And once the competition is devoured or driven out of business, prices can be raised and even more profit can be made. Further, innovation and quality can decline, and workers won’t be able to find higher wages for the same positions at competitors because there are none.

Howard Zinn wrote in A People’s History of the United States of the monopolization of the Industrial era:

And so it went, in industry after industry—shrewd, efficient businessmen building empires, choking out competition, maintaining high prices, keeping wages low, using government subsidies. These industries were the first beneficiaries of the “welfare state.” By the turn of the century, American Telephone and Telegraph had a monopoly of the nation’s telephone system, International Harvester made 85 percent of all farm machinery, and in every other industry resources became concentrated, controlled. The banks had interests in so many of these monopolies as to create an interlocking network of powerful corporation directors, each of whom sat on the boards of many other corporations… [J.P.] Morgan at his peak sat on the board of forty-eight corporations; [John D.] Rockefeller, thirty-seven corporations.

Even Woodrow Wilson—no anti-capitalist—lamented in his time that his country was “a very different America from the old…no longer a scene of individual enterprise…individual opportunity and individual achievement.” But rather, “small groups of men wield a power and control over the wealth and the business operations of the country” (Chomsky, Hopes and Prospects).

A 2011 Monthly Review article, “Monopoly and Competition in Twenty-First Century Capitalism,” points out, “Wherever one looks, it seems that nearly every industry is concentrated into fewer and fewer hands. Formerly competitive sectors like retail are now the province of enormous monopolistic chains; massive economic fortunes are being assembled into the hands of a few mega-billionaires sitting atop vast empires.” Economic recessions, we must note, provide an even easier opportunity for the largest, richest firms to swallow up smaller ones in dire financial straits. Fewer and fewer companies control all sectors of production.

By the 1970s, 100 companies owned nearly 50% of industrial assets in the U.S., and 100 companies controlled the same in Britain (Harman, Economic of the Madhouse).

In 2000 the Global Policy Forum found that the largest 200 international corporations accounted for more than a quarter of humanity’s economic output, greater than the economies of 182 nations combined. The top five auto manufacturers had a 60% global market share; the top five oil companies 40%; the top five steel companies 50%.

No one argues this trend isn’t dangerous. The elimination of competition prompts governments to pass legislation, such as the U.S. Sherman Anti-Trust Act, to ban monopolies. But regulations are not nearly strict enough. Just ask the six banks that now control 74% of banking resources in the U.S. Or the four major airlines in this country, down from 10 in 2000, which see 83% of air traffic. Or ask Disney, GE, CBS, Time Warner, Viacom, or Newscorp. These six corporations own and control 90% of what we read, listen to, and watch. Newscorp, chaired by conservative billionaire Rupert Murdoch, owns Fox News, The Wall Street Journal, The New York Post, Harper-Collins books, Zondervan (look at your Bible), The Times (London), and many more. Murdoch also owns 21st Century Fox. Six percent of U.S. companies make 50% of U.S. profit.

The existence of global corporations, which have no borders, make the problem of regulation even more difficult.

The crisis of monopoly is worsened through private industry-driven economic planning. Michael Harrington wrote in Socialism: Past and Future, “By the end of the nineteenth century, laisser-faire—where entrepreneurs obeyed the ‘invisible hand’ of the market—turned into corporate capitalism, where the ‘visible hand’ of professional executives sought, with assistance from the government, to dictate to markets rather than to follow them.”

In pursuit of profit, corporations lobby to undercut the free market. Economist Garrett Baldwin writes, “While traditional lobbying once centered on altering tax rates and encouraging legislation to liberalize and deregulate the economy, it has now evolved into a competitive weapon for companies trying to box out competitors and raise barriers to entry in their markets.” People often complain (rightly) that the government makes it excessively difficult for new businesses to get off the ground, and this is largely due to bigger, established corporations influencing government policy. 

Monopolization makes economic crises (recessions) worse. Competition over time eradicates small businesses in a given market. A few corporate giants increasingly dominate each sector of the economy. Harman writes:

If any one of these giant firms goes bust, there is enormous damage to the rest of the economy. Banks that have lent it money are very badly hit. So too are other industrial firms which expected to sell it machinery and raw materials or to sell consumer goods to its workers. Suddenly their profits are turned into loses. Such is the scale of the damage that the ability of other firms to buy up machinery and raw materials on the cheap does not nearly begin to compensate for it. Instead of the destruction of some firms benefiting others, what threatens to develop is an economic black hole that sucks into it profitable and non-profitable firms alike…each giant that collapses knocks over others in a domino effect.        

We saw this very recently with the 2008 housing market crash. Banking giants saw huge loses as borrowers couldn’t repay their subprime loans, which meant banks couldn’t repay their debts, and thus began to fall by the hundreds: Lehman Brothers, Wachovia, Washington Mutual, all bankrupt. Other banks bought up some failed banks, but this did not ease the crisis. The stock market crashed, and trillions upon trillions of dollars disappeared as company stocks became worthless. Banks could no longer offer loans to consumers, and thus industrial powers such as the auto manufacturers no longer had a credit bubble on which to reap profits. General Motors and Chrysler went bankrupt, and their collapse would have cost the nation millions of jobs. The government spent trillions in taxpayer funds to prop up both the big banks and the auto industry, in hope of avoiding economic collapse.

The concentration of production into monopolistic entities indeed created a black hole, a situation that severely damaged nearly every economic sector of American society and dragged the economies of the world down with it, leading everywhere to spikes in unemployment and poverty, and at the same time slashes to vital social welfare programs.

Surely even free market conservatives can support the role the State must play if monopolies (and their predecessors, oligopolies) are to be avoided. Without strong anti-trust laws, capitalism can reach a point where competition dies and the free market becomes the market of corporate kings.

What Conservatives Will Love About Socialism

Believe it or not, there are aspects of socialism, that is, democratic socialism, that conservatives might actually support and enjoy.

Socialism is the belief in worker (“social,” “democratic”) ownership of all businesses and citizen power to decide all public policy. Supporters of such an economic and political structure existed alongside, and fiercely opposed, State socialism (also called authoritarian socialism or Communism).

Democratic socialism is not about a totalitarian government owning all businesses as under Communism, nor the State determining your career, nor eliminating possessions, the private ownership of homes, or civil liberties; rather, it aims to bring democracy into the workplace and local and national government.    

True, if you are a conservative who understands democratic socialism, there are likely many things about it you oppose.

For example, socialistic organization of a firm is, obviously, anti-capitalist. This means that capitalistic ownership, where one person (or a small group) owns a business, holds all decision-making power, and enriches him- or herself with the wealth created by the workers who directly create the good or provide the service, will be obsolete. That is an authoritarian structure, closely resembling a dictatorship, and leads to severe economic inequality, as (predictably) owners often award themselves millions while paying workers abysmal wages

(Side note: no one here is advocating the State force business owners to restructure; successful worker cooperatives, where each worker is an owner, votes on company decisions, and takes an equal share of profits, already exist around the world because some people chose democracy. The transformation to a nation of democratic workplaces will take centuries, but it should be voluntary.)

Capitalism is the few growing rich off the labor of the many, and some conservatives support that, particularly if they envision themselves as future business owners.

Any why not view it positively? Business owners start from nothing. Don’t they deserve their millions?

Well, in the beginning the founder creates the good or provides the service (creating the wealth), but without workers he or she cannot produce on a scale larger than him- or herself. Would Bill Gates be where he is today without employees?

The founder must hire workers and become a manager, leaving the workers as the direct creators of wealth. The sale of each good or service then must cover the cost of production, the cost of labor (worker compensation), and a little extra: profit the owner uses as he or she chooses. Therefore workers are not paid the full value of what they produce, which socialists call “exploitation” and correct through democratic ownership: founders share ownership, control, and profit equally with each worker added.

Even though that’s more democratic, increases prosperity for more people, and eliminates exploitation, conservatives (and even moderate or liberal business owners) may not like it. They might prefer holding onto decision-making power and enriching themselves while paying workers far less.

Likewise, they may hate socialists’ anti-war sentiments, or desires to see tax dollars used for universal healthcare, higher education, and work for the unemployed. But there are three things conservatives may appreciate about socialism.

 

The End of Unions

When workers own their workplaces, will there be a need for unions?

Unions are organizations of workers that join together to push for better working conditions, higher pay, and so on. They engage in negotiation, or direct action like strikes or sit-downs, to force employers to make concessions that will improve their standard of living and working–and that of their descendants (winning for us the 8 hour work day and the weekend, for example).

This is a central conflict of capitalism. As Adam Smith wrote in The Wealth of Nations, “The workmen desire to get as much as possible, the masters to give as little as possible.”

But when workers own the businesses in which they work, this long conflict between workers and owners will come to a close. Decisions on hours, pay, schedule, and everything else will be made by discussion and vote. The workmen will become the masters, and unions will have no purpose.

 

The Abolition of Welfare

Worker ownership is not a cure-all. Cooperatives take on more workers because, although it further divides power and profits, more workers can expand production and increase profits. Yet there surely will be times when more people are looking for work than cooperatives are looking to hire, just like in our present economy.

So socialists envision using tax dollars to fund local public work projects. Taxes will cover a basic salary to workers to rebuild our inner cities and slums, clean streets, tutor struggling students, plant new trees, paint murals on buildings—any productive task that betters society. This has been accomplished successfully in the past, such as during the Great Depression. Some American and Canadian cities are already paying homeless men and women to do similar work, helping them crawl out of extreme poverty.

Such work need not be permanent (though governments could theoretically help workers organize into new, self-sustaining worker co-ops if there exists a consumer base for their mission), nor organized by the federal government. Federal tax dollars can be distributed to city councils based on annual unemployment levels, and cities can decide what projects they need to focus on to improve their communities.

Between worker cooperatives, guaranteed employment, and a strong minimum wage (which has been shown to actually increase employment and have only a marginal affect on prices), poverty will be abolished, alongside welfare.

Guarantee citizens a job with a decent wage, and food stamps, child tax credits, the Earned Income Tax Credit, and other forms of welfare (except those for the elderly, sick, and disabled) can be eliminated. Unemployment compensation will disappear–paying someone for 99 weeks without work in return is extremely wasteful. Under socialism, men and women will be paid to work.

 

The Death of Bureaucracy

If you are a conservative, you are likely often concerned (rightly) about State power–big government encroaching on your personal life and civil liberties. You may also be concerned that the State is not curbing personal freedom enough–allowing things like gay marriage, flag burning, abortion. Or not going to war when you think America should.

Well, how would you like to have a say–a direct say–in public policy? How would you like decision-making power? Perhaps it’s time for pure democracy.

Socialism is the simple belief that the people, not the wealthy, the corporate owners, or politicians who can be bought, should control the government and write the laws, through direct democracy.

Instead of voting once every four or eight years, concerned citizens will vote many times a year…on national policy. The people will vote on education standards, the protection of the planet, whether to grant amnesty to illegal immigrants, whether to go to war, everything.

Citizens would have initiative rights for municipal, state, and national policy, that is, the ability to petition for a law or law change and have it put to the people for a vote. Direct democracy already exists in Switzerland.

This is common at the local and state level already. How do you think Colorado legalized marijuana in 2012? It was put on the ballot, the people voted, and it was done. No corrupt politicians in the way, swayed this way and that by lobbyists and their bribes. No bureaucracy, no unelected officials making decisions for the common people.

Under socialism, politicians like congressmen would be elected only to carry out the policies approved by the (perhaps two-thirds) majority of Americans, with elected Supreme Court members and the president preserving a system of checks and balances. Power to the people, as the old radical leftist saying goes. The people would be the politicians.

Short term limits and the threat of immediate recall vote (even of the president) would keep officials in line with the desires of voters. If, say, 60% of Americans felt the president wrongly vetoed a measure passed by the people, he or she could be overruled by national vote. If the president (or any politician) refused to enforce laws, a 60% majority vote could remove him or her from office immediately.

Karl Marx, in The Communist Manifesto, wrote that the common people must become the ruling class, to “win the battle of democracy.”

He wasn’t just talking about liberals and socialists.

The Socialism of Martin Luther King Jr.

“If we are to achieve a real equality, the U.S. will have to adopt a modified form of socialism.”

A short African American minister with a black mustache penned these words in a Selma, Alabama jail cell in 1965 (see David Garrow, Bearing the Cross). He had just been arrested during a voting rights demonstration.

Dr. Martin Luther King, Jr. was not just a brilliant orator and champion of black rights.

Though it has largely been erased from American memory, Dr. King was anti-war, anti-capitalism, and pro-socialism. He saw capitalism as exploitative by nature, an economic structure that bred poverty and injustice.

This should come as no surprise, as Dr. King studied Karl Marx’s works, wrote of Marxism in essays like “How Should a Christian View Communism?” and “My Pilgrimage to Nonviolence,” and worked closely with radicals like his mentor, socialist A. Phillip Randolph, and his close advisor, communist Jack O’Dell.

He spoke of his desire to fundamentally change society several times, not into an authoritarian socialism or communism, in which the State owns and directs and profits from all business, but a democratic socialism, in which the workers collectively own and direct and profit from the businesses in which they work.

He saw capitalism as a method of organization that produced an extremely wealthy upper class, but left huge numbers in dire poverty. Coretta Scott King wrote that her husband believed “a kind of socialism has to be adopted” because “he looked at the poor…so many people were in ill health with no way for them to pay their medical expenses” (See The “S” Word: A Short History of an American Tradition…Socialism, John Nichols).

King condemned the minority poverty bred by centuries of white oppression. He said in 1966 to his staff:

You can’t talk about solving the economic problem of the Negro without talking about billions of dollars. You can’t talk about ending the slums without first saying profit must be taken out of slums. You’re really tampering and getting on dangerous ground because you are messing with folk then. You are messing with captains of industry. Now this means that we are treading in difficult water, because it really means that we are saying that something is wrong with capitalism. There must be a better distribution of wealth, and maybe America must move toward a democratic socialism.

Socialist ownership would replace a system in which the few (the business owners, “captains of industry”) grow rich off the labor of the many (the workers). See this article to study democratic socialism further.

At the 1967 Southern Christian Leadership Conference convention in Atlanta, in his “Where Do We Go From Here?” speech, King spoke of how the ownership of business by the few led to wealth for the few:

The movement must address itself to the question of restructuring the whole of American society. There are forty million poor people here. And one day we must ask the question, Why are there forty million poor people in America?

And when you begin to ask that question, you are raising questions about the economic system, about a broader distribution of wealth. When you ask that question, you begin to question the capitalistic economy.

And I’m simply saying that more and more, we’ve got to begin to ask questions about the whole society. We are called upon to help the discouraged beggars in life’s marketplace. But one day we must come to see that an edifice which produces beggars needs restructuring.

It means that questions must be raised. You see, my friends, when you deal with this, you begin to ask the question, Who owns the oil? You begin to ask the question, Who owns the iron ore?…

Similarly, Harry Belafonte writes in his memoir My Song that King said he wasn’t a capitalist, explaining:

The trouble is that we live in a failed system. Capitalism does not permit an even flow of economic resources. With this system, a small privileged few are rich beyond conscience and almost all others are doomed to be poor at some level… That’s the way the system works. And since we know that the system will not change the rules, we’re going to have to change the system.

He also spoke, in his “Where Do We Go From Here?” speech, of the need to use the massive tax wealth of the United States to end poverty, calling for a guaranteed income and hinting at dissatisfaction with the rich and powerful that determined domestic and foreign policy:

[A] guaranteed annual income could be done for about twenty billion dollars a year… If our nation can spend thirty-five billion dollars a year to fight an unjust, evil war in Vietnam, and twenty billion dollars to put a man on the moon, it can spend billions of dollars to put God’s children on their own two feet right here on earth…

In Where Do We Go From Here: Chaos or Community?, he wrote, “[T]he solution to poverty is to abolish it directly by a now widely discussed matter: the guaranteed income… We must create full employment, or we must create incomes.”

King believed the government served the interests of the rich, saying: “This country has socialism for the rich, rugged individualism for the poor.”

Likewise, capitalist ownership of private firms largely served the interests of the few who controlled the means of production, rather than the many who were paid dismal wages to operate the means of production, garnering profits that were used as desired by those in control.

He wrote to Coretta Scott on July 18, 1952, about a year before they married:

I imagine you already know that I am much more socialistic in my economic theory than capitalistic.

And yet I am not so opposed to capitalism that I have failed to see its relative merits. It started out with a noble and high motive, viz., to block the trade monopolies of nobles, but like most human systems it fell victim to the very thing it was revolting against.

So today capitalism has out-lived its usefulness. It has brought about a system that takes necessities from the masses to give luxuries to the classes.

He repeated the same phrasing in his late 1950s speech “A Realistic Look at the Question of Progress in the Area of Race Relations,” in which he described a    

…new world in which men will be able to live together as brothers. This new world in which all men will respect the dignity and worth of all human personality. This new world, in which men will beat their swords into plowshares, and their spears into pruninghooks. Yes, this new world in which men will no longer take necessities from the masses to give luxuries to the classes. (See King, The Papers of Martin Luther King, Jr.)

He believed that the natural outcomes of capitalism, such as private property, fierce competition, the profit motive, consumerism, individualism, and materialism, shifted focus away from the needs of fellow human beings, encouraging complacency in the face of virulent racism or the deaths of millions during U.S. bombings and invasions. He said in his 1967 “Beyond Vietnam: A Time to Break the Silence” speech:

We must rapidly begin the shift from a “thing-oriented” society to a “person-oriented” society. When machines and computers, profit motives and property rights are considered more important than people, the giant triplets of racism, materialism, and militarism are incapable of being conquered.

He wrote in 1967:

We must recognize that we can’t solve our problem now until there is a radical redistribution of economic and political power… this means a revolution of values… We must see now that the evils of racism, economic exploitation and militarism are all tied together… you can’t really get rid of one without getting rid of the others… the whole structure of American life must be changed.

Socialism, a philosophy and worldview claimed by many people before him and many after, was to Dr. King the way to create a better world. New, more democratic forms of ownership and political decision-making could do far better at abolishing poverty, racism, and war than a capitalistic society ruled by the rich few.

In “Beyond Vietnam,” Dr. King declared:           

These are revolutionary times. All over the globe, men are revolting against old systems of exploitation and oppression, and out of the wombs of a frail world new systems of justice and equality are being born. The shirtless and barefoot people of the land are rising up as never before. The people who sat in darkness have seen a great light.