Conversations with Activists II: The Sociologist Charles Derber

Just before this week’s maddeningly tepid midterm elections, I had the pleasure of  interviewing the sociologist Charles Derber, professor at Boston College.  Charlie, along with his frequent co-author Yale Magrass, preserve and extend the sociological imagination, a tradition of the late C. Wright Mills.  Put simply by Mills, this framework compels an

awareness of the relationship between
personal experience and the wider society[.]

Though it’s difficult to convey the full range of topics Derber and Magrass tackle, of initial interest to me was Sociopathic Society, a discussion of American empire and the intrinsic sociopathy of capitalist and coercive organizations; I later learned of Bully Nation, an incredible reframing of bullying in American society as a necessary feature of capitalism and militarism.  Since I couldn’t complete the book before this interview, we only briefly touch on the subject.   Though the interested reader will find links for several of Charlie and Yale’s books below, a more complete list appears here.

I very much enjoyed my time with Charlie, (despite his stacking more books into my already hopelessly long reading list!), and like the interdisciplinarity of sociology, our discussion meandered among many important topics.  Certainly it’s worth starting at the beginning, though the reader ought feel free to jump in anywhere, as the water is fine.  Unfortunately, I’m suffering frustrating cognitive impairment as of this writing, and though my participation is slow throughout the discussion, I’ve tried editing to ensure the audio is easier hear.

 

Introduction to a Global Sociologist

Activist Origins

Regimes, Chomsky, Wallace, and Activism

Overcoming Discouragement

“Lucrative” Diversity, and a Rot in the Left

There Are Welfare Bankers in Welfare Jets

Fascism and the Evolution of Economic Divinity

Piketty, Rentiers, Gladiator Technocrats, and State-Sponsored High Tech

Globalist Worker Exploitation and “Immoral Morality”

Luck Can Demand Responsibility : Hope in High Tech?

Introduction to a Global Sociologist

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CharlesDerber

NP Slagle: Welcome to Scire Populum et Potentiam, to know the people and power. It’s my great pleasure to welcome Charles Derber, professor of sociology at Boston College, where he’s taught for over 30 years. Professor Derber’s the author of over twenty books covering people’s movements, identity politics, history, political science, and, notably, economics. Professor Derber and his frequent co-author, Professor Yale Magrass, more recently broke ground by explaining the bullying epidemic as an expected outcropping of a society where winners and losers, heroes and villains, militarize capitalism and, thus, the glorification of competitive violence have become the norm. Professor Derber, welcome.

Charles Derber: Thanks, Neil. That’s a nice introduction.

NPS: I thought you might approve, or at least I was hoping. The real question is whether I pronounced Professor Magrass’ last name correctly.

CD: You did. Perfectly.

NPS: Oh. Oh my goodness. Oh, wow.

CD: Yeah. As in most of my writing, much is driven by the idea that we live in a society in which people learn to identify all the problems or issues as purely psychologically and individually motivated rather than having anything to do with systemic institutional causes, which most people, that’s how it’s tracked. So, really, people don’t understand it very much.  As a sociologist, or a sort of a person who looks at institutional and systemic forces like capitalism itself, it’s important for me to try to offer is how to take seriously the kinds of personal and psychological issues that people struggle with, but to root them in social, structural realities that tend to be ignored. Elites, the economic and political elites, have a big stake in making sure that people think that way and that they blame individuals for problems or blame themselves rather than thinking about the way in which larger social institutions and the culture and so forth play a big role.  I grew up learning the material that I work with these days in the 60s and 70s and there was a sociologist you probably have heard of the name C. Wright Mills, who wrote The Sociological Imagination and The Power Elite. He said that sociology was all about contextualizing personal problems as social problems. In other words, what we experience as personal crises, or emotional problems or so forth, reflect very strongly structural institutional realities that tend to be read out of the national conversation, sort of excised and censored out. While in some societies, people are more naturally thinking in this way, such as in colonized societies, within western capitalist societies, there’s a kind of propagandistic ideological apparatus that really works very hard to get people into therapy or into purely psychological forms of conversation and thinking, which prevent them from making these connections between personal issues and societal issues.

NPS: Right, right. Yes. From the standpoint of algorithm design, it is the inability to see the global framework and how that actually sways local phenomena instead of just saying that it’s a localized phenomena. It’s interesting to me, because that is a substantive miss across the board when you look at the way that capitalism is designed, or at least the way that it’s propagandized. That each of us should pull ourselves up by our own bootstraps, and if we, in the school of Ayn Rand, seek only the maximization of our own profit that somehow that makes the entire system better.

CD: Right.  Beyond even that, sort of, and that’s a good formulation, Ayn Rand is a perfect example of it. Beyond even that, I think, if you take neoclassical economics, which is the dominant school of economics in the United States, there’s really not even a conception of anything but the individual, not anything of the idea of society or of a public good or the commons or however you want to think about these sort of, what you’re calling the macro-level realities, really kind of disappear because the market is constructed as the action of millions of atomized individuals who have no real interdependence on each other. They’re involves in purely transactional interactions on the market.

NPS: It was Margaret Thatcher that said that everything is just based on individuals. That that’s all that there is.

CD: Right. Right. I think capitalism as, think particularly the model developed in the United States, is very, very sort of punitive in that approach. There’s such a intense focus on individual that everything that goes wrong with a person is attributed to that person’s laziness or lack of intelligence and so forth. You see that really, really strongly in Trump’s discourse now and so forth. Figure out whet it’s racialized, or genderized, or so forth.

CD: Yeah, it’s a big issue and a lot of my writing has been, [though] I’m in a sociology department, I do write for a general public and you mentioned my field accurately, but it really does come out of this sort of fundamental recognition that societies are constituted by interdependent individuals. I’m all for individual expression and freedom, it’s really, really fundamental, but that can’t be established without creating a strong sense of sort of the integrity of society-

NPS: Society.

CD: Of social connections. Yeah.

NPS: Oh, right. Yeah. We are animals that could not survive on our own in the wild. It’s preposterous.

CD: Exactly.

NPS: Noam Chomsky likes to say, he can’t grow his own food. I certainly can’t grow my own food. At least he’s done some gardening. I haven’t. We depend very heavily on the super structure of society and, really, the state in the way that it provides for our needs and subsidizes agribusiness to make sure that there is cheap food available, even though there are children going hungry in this country. That’s another serious problem. There are so many different serious problems that I want to discuss with you. I’m so, so pleased to have you on the phone. This is great.

CD: Thanks, Neil. I appreciate your interest in my thinking. Yeah.

NPS: Well, the way that I came across your works, I was listening to Chomsky give a talk and he mentioned your name. Oftentimes, he’s referred to the atomization of American society and the deeply seated and rooted fear in our culture. Which I grew up in sort of an outcropping of the evangelical movement in Texas, so those are the things that I heard. Literally, I was taught to be terrified of black people in my hometown, and, of course, it couldn’t be further from the truth that they presented any danger at all. The opposite was actually true. There was police violence in my hometown that was never talked about in the daily newspaper that took place in the sort of black quarter of the city.  So, yeah, as I started to discover these things, by taking college history for one, that actually has the power to open one’s eyes, I saw a completely different world that I’ve not been able to turn my back to. But we’re not here to talk about me, as much as conversational narcissism may try to take hold.

CD: No, no. I’m very interested. Your background sounds very, very interesting. Your work is very interesting, so let’s make this a shared conversation.

NPS: Yeah, yeah. Well, we’ll … When we get to Bully Nation and discussing that, I can talk about some of the horror stories that I’ve experienced, particularly in these Fortune 500 companies, where … I’ve been asked questions many times about The New York Times article that was published a year or so ago where it was something of an expose of the internal culture. I was asked whether this was actually true, and I said, “Yes, it is.” The group that I was in, I was very much immune to that. Our group and pretty much our org, which was Amazon Logistics, so we did last mile planning to replace UPS and the postal services. We were fairly well immunized from the culture, because it was recognized how difficult the problem is that we were solving. Which, that gets back to solving a problem globally versus locally or greedily. In algorithmic circles, they’ve got this stuff down, but you still see people on LinkedIn, high technologists that I’m connected with, preaching the Ayn Randian way of optimization, despite the fact that they know in their own scientific work it doesn’t work.

Activist Origins: From New Deal to Leftist for Real

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NPS: Anyway, back to you, I want to ask you some questions about your beginnings. These are conversations with activists, in an effort to understand really this vast network of activists that have been in Americana all of this time but we don’t see you guys in. Well, I say, “you guys.” You gals and guys. We don’t see that network in mainstream media. We occasionally will see it in popular media like Hollywood, but we don’t see it in mainstream media for the most part.  You were born in Washington, D.C. Can you tell me some about your early beginnings and how that sort of informed your activism?

CD: Well, I think my family history plays a big role, because I grew up in a Jewish liberal family that my father was a New Deal economist[, Milton Derber, during] what I call the New Deal Regime, which was a period of American history stretching from 1932 to 1980, I would say-

NPS: Right, the Keynesian

CD: Yeah, sort of the Keynesian Era in America and where even Richard Nixon, in the 70s, looks pink compared to what we’re seeing

NPS: Absolutely.

CD: He was for minimum income and a guaranteed income for everybody and things like that. Even with the EPA and so forth.

NPS: OSHA.

CD: I grew up in a family where, at dinner, we talked every night about politics and society and the economy, and you just grow up in that world of thought. I grew up in … After I moved away from where I was born in D.C., my father was working at the Labor Department and he got a job in the Economics and Labor Institutes at the University of Illinois Champaign-Urbana.  We had this culture of conversation. I wonder now that the family dinner, now that I think about it, has sort of disappeared, how many people have lost that as a cultural breeding ground, because, sort of, that’s the way the New Deal kind of sensibility got transmitted to me. I remember my parents both being very, very engaged with issues of the New Deal and the Depression and, of course, the Holocaust was going on. The family was ripe for bringing up kids who had a focus on this.  Then, when I became adolescent and then went off to high school and college, I was primed for the good match between my family background and the political era that was emerging in the sixties so that I sort of naturally emerged as really, really well primed for the kind of social activism and social critique that was coming out of the civil rights movement and the anti-Vietnam War movement. I spent my formative, young adult years in that environment, in college and graduate school.   I was kind of, during that period, a full-time activist. I was literally in jail or in school reading Neo-Marxist or Herbert Marcusian-type political philosophy. It was just one of those … I think everyone in my generation was affected, impacted by that period of activists. I think that was the last real period of mass left engagement in the United States, and I just happened to be fortunate to sort of be at an age where I was being … I think there’s an age where people tend to get imprinted with their political dispositions for the rest of their life, and that was sort of what happened to me.  I moved sort of from the New Deal liberalism of my father to the really left activism of my own generation in the sixties. Really, it was just sort of, I think of people as being very shaped by their history and the global histories, so to speak, as well as your microhistory. They just converged to make me a very political person and a person very concerned with social justice for working people and for the downtrodden in general. The civil rights movement, of course, made me very sensitive to racial discrimination and the war made me-

NPS: You participated in the Freedom Rides, right?

CD: Yeah, and I went down to Mississippi in ’65 for the summer and was involved with all kinds of voter registration and other efforts down there. Spent the whole summer down there and worked with a lot of both black and white activists. Then came back. I went to graduate school in ’65 at the University of Chicago in sociology and spent almost all my time in jails and Washington, going there every weekend. Literally, almost every weekend during four years, protesting the war and becoming really, really immersed in activist culture and in sort of a kind of a protest intellectual struggle with the academic departments.  For example, in the sociology department at the University of Chicago, much like the economics department, which was a Milton Friedman, neoclassical economics department, there was a sociology department where it had people like Morris Janowitz, who, probably are not household names, but he was a well-known sociologist who has been very much in support of the Vietnam War. I had to grow up shaping my intellectual life in opposition or contestation with the powers that be intellectually. I was experiencing on a personal intellectual level the same thing that groups [were experiencing.]  I was relatively privileged economically, because my father was a white, upper-middle class professional person, but I had to contest a lot of the dominant intellectual forces in universities at the time.  There were just, I think, a whole set of factors, which, I think, helps to explain why it endured when much of the left fell apart in the seventies and we got into a regime change, as I call it.

Regimes, Chomsky, Wallace, Activism

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I don’t know if you ever looked at this Neil, but I wrote a couple of books, one is called Regime Change Begins at Home, and Hidden Power is a second book that’s sort of a paperback version of that but quite revised, which looks at American history as a series of internal regime changes and I argue there are five.  The first regime (these are since the Civil War) was the first corporate regime of the Gilded Age and the robber baron. Then the progressive regime of Teddy Roosevelt and then on to the New Deal Regime of my parents, which really extended up to the Reagan.  I called the 1920s the second corporate regime and the Reagan revolution, the third corporate regime. I just think it was natural of me to sort of get involved in regime change sort of politics at home, as well as afflicting people they involved, because of my Vietnam experience with global imperialism and [hegemony], the kind of stuff that Noam writes about so much …

NPS: Right. At a time when it was really hard to get even students to protest the war. At least before 1965, right?

CD: Yeah, at least initially. That’s right. That’s right. Noam writes about this. I’m actually working with Noam. I don’t know if you read that. I’ve had a long friendship with him. He’s been at MIT and in Boston until they moved to Arizona just a year or two ago. As you know, he responds to almost everybody who responds.

NPS: Oh my goodness. He responded to me five years ago, and we’ve been pen pals ever since. I actually flew up to meet him, and I’m hoping to get to interview him at the end of January. I actually composed and wrote him a birthday song since his next birthday coming up in December is really the big one.

CD: That’s right. The biggest. The big one, yeah.

NPS: It’s because we’ve got 10 fingers, so that’s why. Multiples of ten are great.  How did you meet him? You also knew Howard Zinn, right?

CD: Yes, I did.I was lucky because when I came [to Boston] and I was doing this kind of work, [though] after Reagan, the universities and intellectuals became, like, the whole culture became more conservative. I went into sociology not because of sociology, per se, but just because it’s very heterodox.  In psychology or political science, the discipline is more restricted, and I knew with sociology you could almost do anything and required a lot of history and a lot of economics and politics. It was a good choice because I could do political economy and get away with it and get tenure in the sociology department.  With regard to Howard and Noam. I had sent Noam some early stuff. He read everything, of course, and would blurb my early books right away. It was amazing because I couldn’t. He was so, even at that point, becoming very, very celebrated and incredibly busy, but he always maintained time. He’s a very generous person that way.

NPS: He is, indeed.

CD: As you know. Yeah, my connection with him was just very fortuitous, and I’ve maintained this long relation with him. I’m working with him closely now. I’m just mentioning this as part of a biography that might be relevant to you a bit.

NPS: Sure. Yeah, I read this, but I want it to be on here, as well. Yeah.

CD: Right. I had met a guy named Randall Wallace, who’s the grandson of Henry Wallace, who is the vice-president for Roosevelt in 1940 and would’ve probably ended the  We would’ve not had a Cold War if he had been kept on the ticket in ’44.

NPS: It was incredible, the story of Henry Wallace and how the Democratic party forced Harry Truman, which, Harry Truman was inept by comparison, and they-

CD: Absolutely. Wallace would’ve been the most progressive president in American history, probably, and he-

NPS: We were ripe for it. We were perfectly ripe–

CD: Yeah. We absolutely were, but the corporate elites were still strong enough to knock him out. Even though Eleanor really wanted him and so forth.  Anyway, he had some children and grandchildren and got quite a lot of money because he had been Secretary of Agriculture, and he had developed a breed of hybrid tomatoes and other genetically developed products. He became quite well-to-do and left a lot of money to his children.  His grandkids, now, one is actually running the Global Wallace Fund. His name is Scott Wallace. He runs the Global Wallace Fund, which gives out a lot of money to good Keynesian activists, I would say.  Liberal activists, progressive activists, but not far left. He’s running in a seat in Pennsylvania right now. He’s likely to win. He’s ahead right now, so he’ll be one of the new class of congresspeople. There’s this fellow, his name is Scott Wallace. If the Democrats take over the House.  His other brother is named Randall Wallace. Randall contacted me. Randall runs a fund called the Wallace Action Fund and he contacted me about five or six years ago, told me he’d be reading my books for years, and invited me to come out to California for a conference on the environment and politics and capitalism that he was running. We developed a friendship, and he began funding a relationship for several books on resistance and political activism and capitalism and so forth. The connection with Chomsky is that Randall Wallace, who is much more radical than his brother and very much sees Chomsky as sort of the single most important thinker today, and he and I worked together to sort of develop a kind of legacy project with Chomsky and his new wife. After Chomsky’s wife died, his first wife, Carol, he was on his own for a few years and then met and eventually married a lovely woman named Valeria. I don’t know if you’ve had a chance to talk to her, but she’s from Brazil. They just were in Brazil during this fascist takeover that’s going on down there.

NPS: He was telling me about it in our latest correspondence. Yeah.

CD: Yeah. Yeah. It was … He was with Lula in prison and so forth. Yeah. I’ve been in very close contact with him and I’m actually doing a lot of my work right now; I did a film, which actually I’d like to send to you.

NPS: Okay.

CD: Film called Noam Chomsky: Internationalism or Extinction. It deals with the sort of double barrel threat to survival of life of our planet from both climate change and nuclear war. Actually, if you just got to ChomskySpeaks.org, you can get it, or http://ChomskySpeaks.org, and you’ll get that.

NPS: Okay.

CD: You can get both a two minute trailer, and then the whole film, which is about an hour long. It’s based on a talk Noam gave in Boston a couple years ago.

CD: It’s full of really brilliant visuals that the film director that we got, we’re pulling in. It’s a powerful film, and we’re distributing it very widely. We’re trying to get Noam to get the transcript of his talk turned into a book with some introductory material and some response by activists to it, so people don’t get too bummed out and depressed by the whole thing. It doesn’t focus a lot, and so you know, it’s a hard message to hear.

NPS: It is, yeah.

CD: I’m actually, I’m going to try to get him to do a book where we, he’ll just give us the transcript and we’ll have some activist groups responding and other intellectuals responding to how, to the kind of argument he’s making there and so we hope to get a book out called Chomsky on Internationalism or Extinction and I’m writing sort of a companion piece called Resistance or Extinction. So, that’s one line of the work we’re doing and then–

NPS: Awesome.

CD: We’re also, out of that film we did some separate interviews with Noam and we’re putting out a book called Chomsky For Activists, which looks, do a series of both biographical and intellectual interviews with Noam, which we film. Which is, people won’t know about because it goes back to his childhood in Philadelphia and then looks at his whole history of activism. Because I think a lot of people find Noam depressing because he has this very critical, analytical view which is, has inspired millions of people, but a lot of people don’t understand that he’s also a genuine, a genuinely committed activist and has done a lot of, you know, social change work both personally and–

NPS: Absolutely. Yeah.

CD: His organization and so yeah. So anyway I’m all embedded in that work right now. So anyway, yeah. So I, I just, yeah, that’s my, the only thing I would add about my activism, and I just, I’m dwelling on it because I think activism is so critically important now–

NPS: It’s incredibly, yeah.

CD: Not only just because of the election although I think the election is very important where we’re talking three days before the election but, the November mid-term election but, the only other thing I would add is that, on my mother’s side, a number of her family was killed in the, with fascism, you know, the holocaust and on my father’s side out of Russia. And so this resurgence of fascism and particularly globally in Europe, and of course Trump’s sort of authoritarian and kind of version of neo-fascism, I think all of that stuff has played a role in sustaining my political involvement and so forth. So anyway, that’s enough about that.

Overcoming Discouragement

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CD:  Just, I do believe that, you know sort of capitalism is all about keeping people quiet and I’m always telling my students, you know, they ended the draft so you guys don’t get, you can stay detached from American militarism and you just don’t get bothered about politics. And I just feel like the main priority I have now is to wake people up to the small extent I can and recognize the power and importance that young people have, and ordinary people have, in making a difference right now, so.

NPS: You know, I was talking to my best friend, Robin Fitts is his name. And he is a, he’s a junior college professor of English and Literature in West Texas. I’ve been trying to get him, him and his wife and their little girl to leave Texas for a long time, to somewhere better. But he has been very much so involved in Beto O’Rourke’s campaign.

CD: Oh, cool.

NPS: And it’s, of course it’s easy to get discouraged because the media and sort of the superstructure of, of how we’re supposed to think in this country, the culture is, you by yourself can’t do anything.

CD: Right, right.

NPS: You’re powerless. Americans are, have this overwhelming sense of impotence, that, that, is, it’s, and–

CD: You’re absolutely right, Neil. And particularly young people, I mean because I ask my students who are pretty privileged all the time, and they say, “Well I’m just one person, I don’t have any power, as a group we don’t have any power.” And that sense of impotence and, and powerlessness is, is you know very carefully nourished I think. And it’s, I mean I understand it, I feel it myself sometimes. So I, I understand them, but it’s just so important. And I think people like Beto O’Rourke, and even though he’s much further to the right than I am, he, he–

NPS: Absolutely, yeah.

CD: I think the Democrats are, I mean the one sense of positive energy I have, you know, in terms of electoral politics today, is that there is a little bit of a wave of, you know the left, sort of energizing you know people like Alexandria Cortez. And Bernie Sanders talking about socialism, and people like Beto O’Rourke even in the south, or Stacey Abrams, or any of these people. Sort of creating, you know maybe it starts in this very modest way of people feeling that just voting can make a difference. Of course, trying to vote, for a lot of people, is very hard these days but you’re right.

NPS: Yeah, yeah. I mean, with the regression [Shelby County v. Holder] on the Voting Rights Act under the Roberts–

CD: Yeah, oh my god, yeah, it’s just–

NPS: But what I, what I do tell my best friend, and I agree with you, I think Bernie Sanders actually way to the right of me and you also.

CD: Yeah. Oh sure.

NPS: But none the less, he upended 120 years of electoral conventional thinking around how money–

CD: Exactly.

NPS: Money runs the show. And this is what I told my friend Robin, that if Beto actually loses in Texas, it may be to his advantage. Because the fact remains that he’s not taking any money from PACs or corporations, and it’s still neck-and-neck in ruby red Texas with, I mean Ted Cruz is not particularly well liked, but none the less it shows that the young people are having a very powerful influence. It’s not just the change in demographics, well I guess that is a change in demographics, it’s not just that you’ve got more Hispanic people in Texas, it literally is that young people aren’t afraid of words like socialism. That’s why they were prepared to vote early.

CD: Right. Well that, that was really, I completely agree with you Neil, and I, I think that Bernie, just by calling himself a democratic socialist, and then getting a following, I often tell my students that, you know, the word most Googled the day he first mentioned that.  Oh I see you just sent me a song for Noam, thank you, I’ll enjoy looking at that.  That itself was transformative because, for the first time, and I’ve been teaching for you know almost fifty years, I, I’m seeing that people, the students are very, very, I mean they’ve always been receptive to the idea but the word socialism was sort of taboo. Even in university. And now, it’s a little bit different. In fact, there are a lot of interesting polls that you’ve probably seen and that I write about in some of my books where, you know, the Pew Institute and Gallup and others have been asking for about ten years people’s association with the word socialism and capitalism and so forth.

NPS: Right.

CD: And as you probably know, now, young people have about as strong, or more, a positive association with the word socialism than they do with the word capitalism and Bernie really helped push that along although it was emerging well before him. And in fact that’s true across a lot of the Democratic party and a lot of the Democratic party base. And in fact a lot of the whole American public is, in terms of issues per se, you know like money in politics and do they like labor unions, do they like big money in politics, do they like Medicare for all, you know, Medicaid for all and so forth, the public is pretty progressive. I’ve always felt like the left’s movement has got to meld more fully into conversation with the left wing of the Democratic party. And you’re seeing some of that begin, you know, with sort of the Bernie Sanders wing of the party, you know, sort of bleeding over into the movements to some degree.

NPS: Right.

CD: People like Nina Turner, people who are in congress and now running Sanders, or some grassroots organizations, I think that’s a very promising synergy. I mean I think the movements need to have a role, and you know the united front. If you look at Germany, you know I mean, there wasn’t this, Hitler got into power, all these right wing guys running around in the ’20s in Weimar Germany, were, they weren’t connecting enough to, between the cultural movements there, the political movements on the ground, and the parties. And I think that’s, that’s real something, a historical lesson to recognize today here. That political change is going to take a melding, you know sort of a united front of some form, which, whether it’s going to be a pretty big spectrum of views, but where you get less people on the ground, community activists on the ground of all kinds, melding in with electoral left wing Democratic party. And you know they’re never going to be the same kinds of people or groups exactly, but the synergy and interaction between them are really important, so.

NPS: It’s the one, it’s the one public institute, well it’s a public institution, and therefore it’s the only institution that they really have any sway over.

CD: Right.

NPS: And trying to work within that framework, although I do believe, and I’m curious to get your thoughts on some of the different things that we could do to change at least the structure of those institutions, like either increasing the court size or you know, substantially increasing the size of congress and gutting the power from the executive branch. And of course those are, those are hard, we have to be in power before we can even do those things.

CD: Right, yeah.

NPS: Or at least people on the streets, you know, having peaceful protests everywhere that might enough to really start moving us in that direction. I mean, for–

CD: Well I think it’s the only thing, I think it’s the only thing, Neil, really. I mean, beyond you know massive economic collapse and that kind of thing, is it’s popular movements on the street that will move. Because, because the legal system, the constitutional order is, and you were starting to, you know, enumerate some of those, are so structured to guarantee elite influence. I mean just the way the electoral college is constituted, the way the you know the way the senate is structured, I mean almost all the dominant political institutions are, are oriented to keep popular representation from being expressed.  And so that’s why I believe that you need popular movements on the ground. But that those will burn out if they don’t find ways of getting their voice heard.  At all levels of electoral politics as well. And you know, that’s not an easy argument to make, either to the Democratic party or to left activist groups. You know I mean, the left activist groups see the Democratic party as sell-outs and not worth cultivating very often and they elect, the Democratic party people are often so bought into the, the mainstream just because they need so much money for their campaigns and so forth.  And I think you’re beginning to see some, some productive you know shift in that where you’re getting a more progressive Democratic party person tied in, recognizing that their support is going to come partly from more left progressive movements on the ground. That’s a hopeful thing to me.

NPS: It’s interesting you mention that, I, I was at the café I frequent up the road yesterday and one of the bus girls who works there, her name is Karen, she wanted to know what I did for a living and she was wanting to go back to school and she had interest in mathematics but also an interest in activism. Of course I had your book, Sociopathic Society there with me, I take it there to make notes, and that’s what I was doing sort of in preparation for this interview. But I explained to her exactly what you said about people’s movements and that every single freedom that we can point to today comes from a people’s movement. And, and most often, it’s, it’s intertwined inextricably with labor movements.

CD: Right.

NPS: And that the 40 hour work week and paid vacation and, you know, holidays, literally in observance of holy days, none of that would have been possible without the brutal struggles that the labor movements had to endure in earlier parts of–

CD: And are still enduring in a massive way.

NPS: Oh yes, absolutely.

“Lucrative” Diversity, and A Rot in the Left

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CD: I don’t know if you had a chance to, the, one of my more recent books is Welcome to the Revolution, which is really focused on activism.

NPS: I just, right before we started this call, I was watching your interview with Chris Hedges about that book.

CD: Oh okay yeah because I developed that idea in the book and in that interview. And I mentioned it just because you were talking about how central the labor movement has been to that and I think what’s created such weakness on the left is the, and this is the center of the argument in the Welcome to the Revolution book, and my idea of universalization. Is that after the late ’60s, the left really kind of decomposed as it abandoned sort of issues about labor and capitalism and moved into a more narrow, sort of abstracted away from class concept of identity politics around race and gender and so forth.  And my, well yeah as you probably know from listening to that conversation with Hedges, I, I feel that that’s been a truly catastrophic you know problem on the left and it’s almost eliminated what I think of as a real left. Not that I don’t think race and gender aren’t very, very important issues, they’re obviously critical, but if you try to, you know, do a kind of civil rights, anti-racist politics or feminist kind of politics with that abstracted away from issues of economics and political economy and capitalism, you come out with some dangerous things. And some things that have been, that really–

NPS: That aren’t useful.

CD: You know in my judgment, undermine the whole idea of what the left is trying to do in some ways, so.

NPS: I can give you a really good example of that. So the only social media presence that I have, other than being on George Polisner’s civ.works is on LinkedIn because of my professional trade but I also want to promote articles, interviews from the activist side.

CD: Right.

NPS: But often times you will see perfectly well-meaning high technologists writing long winded arguments as to why diversity in the corporate structure is good for profits.

CD: Right.

NPS: And of course, the underlying theme there is that profits really are the proxy for welfare. For general welfare.

CD: Right, exactly.

NPS: And that nothing else is important. And so therefore, we just hope, we hold our breath, and cross our fingers, and close our eyes, believing that race and gender being more equally distributed into the corporate hierarchy, will in fact improve profits. Because if it doesn’t, or heaven forbid it actually detracts from profits, then it will not be something that was good. So that there’s this, this broken duality. Cathy O’Neill in her book Weapons of Math Destruction talks about this, this idea of boxing one particular metric for all of the others. I work in that kind of stuff every day at work, I work as a statistician on Bing ads. I hate to say that I’m in the financial sector but fortunately I’m not doing the vicious parts of the job.

CD: Right, right.

NPS: But it gets back to that problem of saying, “This is the one thing that matters. Everything else is secondary, so we only can hope that our, you know, heartfelt, you know, I’m really rooting for the underdog because I want the underdog to actually be the one that makes more money.” You know.

CD: Right, yeah. Well you know, it’s even, I think it’s even more serious than the way you framed it in a way because it’s, it’s, when you were talking about how diverse high-tech people think about corporate diversity as a solution, that is a good model but I think of things like Sheryl Sandburg, you know the, as sort of representing a third wave feminism which, you know you remember her famous book Lean In, which tells women the real nature of feminism is to get ahead in the corporation and get that corner office by getting women right into the top. And that is such a, you know, sociopathic version of feminism you know because it, it really says women just need to join the rat race to the top of the capitalist corporate circle. As if, somehow, if we have women running a ruthless capitalist global system, we’re going to have a much better society.  And I’m a strong feminist but I think her version of feminism is really dangerous, you know. And I think it’s pervaded a lot of what used to be called the left, you know, where you, you sort identify with progress of a specific identity community. Often which is very, very important, I mean like I said, I cut my teeth on black, you know, civil right activism and so forth. And I, I view, I view these communities as very important. But when the movements to empower them become separated from these larger systemic issues of capitalism, which they have been completely in the United States.  I mean, Martin Luther King, as I mentioned in the Hedges interview, you know while he did toward the end of his life really did focus on economics as a–

NPS: And anti-war. Yeah.

CD: And anti-war as sort of intersectional you know realities that were essential for any kind of civil rights or anti-racist kind of politics, it kind of got erased from the history of the movement. And pulling back a little bit, I noticed on his 50th anniversary there was, there was some discussion, there was, the media had some people who talked about his writing on Vietnam and on the economy and so forth but in general it’s been–

NPS: It’s whitewashed.

CD: It’s been erased. Yeah, whitewashed. And it’s been, it’s a catastrophe for the left. I think it’s one of the reasons the left is so weak in the United States.

NPS: Absolutely. Yeah. I didn’t hear any of those stories when I was in secondary school.

CD: Yeah.

NPS: In fact my, my US history teacher in high school refused to take us past the end of World War II because she thought the rest of it was too controversial to talk about.

CD: Wow.

NPS: So I mean, that, that’s–

CD: Well that was down in Texas, right?

NPS: Yep, yep. That’s a very extreme example of that kind of whitewashing is just, “Okay well we’re not going, we’re not going to touch it at all.” But I didn’t know those things about Martin Luther King until, well I guess my, my high school English teacher, favorite high school English teacher, Candace Zangoei is her name and she’ll probably read and listen to this interview, she, she did teach us some interesting items from American history because she was teaching us American literature. It’s funny that you have to go to the literature side, you have to go to the arts to hear history.

CD: Right. Right.

NPS: Depending on the system. But yeah, that, so what you were saying earlier about having more women leadership or people of color leadership so that this idea that a woman dictator’s better than a man dictator, so.

CD: Right. Exactly.

NPS: So that dictatorship is okay. That’s exactly what happened with Obama’s election.

CD: Yes.

NPS: The left withered, whatever you can call the left, I mean.

CD: Right.

NPS: You and I, you and I know what that means.

CD: Right.

NPS: The mainstream depiction of that is wrong. But we have the first black president so it doesn’t matter that he kills–

CD: Right. Exactly.

NPS: Civilians with drones. All of that’s okay.

CD: And you know, that had a really tangible and concrete political consequence because the peace movement for example, which had emerged against Bush during the Iraq war and so forth, really vanished under Obama. Even though Obama intensified a lot–

NPS: He was more hawkish.

CD: Of American militarism. So, so that’s a perfect example, right, of where you say, “Okay I don’t want to challenge a black president.” And so you allow the more toxic and lethal elements of the system, and by more I mean some of the most vicious aspects of the system, to go unchallenged. And the peace movement, you know, goes away.

NPS: Oh I’m sure, I’m sure that’s why the financial sector, yeah, I’m sure that’s why the financial sector ultimately endorsed Obama.

CD: Right.

NPS: Is they, they don’t care. They just want power and money. They don’t care what color it is or what party.

CD: Absolutely. In fact they legitimate themselves by virtue of their saying that, “Look, we’re technically, you know, we are open to women and blacks and everybody.” And that’s a hugely important legitimating force for, you know, for capitalism itself.

NPS: Right.

CD: So yeah, it’s an issue that’s really hard to deal with and it’s very important. And I’m glad we’re talking about it because it just can’t be talked about enough, you know.

NPS: Yeah.

CD: And it’s such a sensitive issue because, you know, people in these identity communities really do face tremendous struggles and they, they often thing this is some repetition of the white students of the late ’60s who sort of became dominant and sort of marginalized black and women and so forth. I mean I understand that, that concern, fully. And that’s why the, the new waves of feminist and global movements develop but, and the left itself created it but. I just think that today, Trump would not have been elected if the Democratic party, I mean sort of Hillary ran, and this is a problem that infects the left movements themselves, I mean the real left. And then it also, or let’s say what passes as closest to the real left in America today.

NPS: Right.

CD: And also the Democratic party, you know Hillary ran a campaign where she would trot out all these black faces and women and say just being a woman was. And, and you know, in regard to the movement, I really want to be careful because it can sound very patronizing for a white male to say, “Hey all you black and female people and brown people and gay people and so forth, don’t be so obsessed with your own particular thing.” I don’t mean it in that way.

NPS: Right.

CD: What I mean is that for, for the, for liberation let’s say, of black people or brown people or women or gays or whatever, Native Americans, disabled people, I mean, it’s really important that people build organizations among those communities but I think it’s crucially important to recognize that to get any kind of, first of all, to get the masses of people behind you, you need-

NPS: Momentum.

CD: … a broad systemic vision and momentum and two, you’re going to end up like Sheryl Sandberg, you know, competing for the pieces of the pie that the system is willing to allocate to you rather than questioning the system itself and that’s going to lead to perpetual hopelessness, so, yeah, it’s-

NPS: Temporarily.

CD: … just a really, really-

NPS: To temporarily pacify or supplicate these people so that then you can say-

CD: Right, right.

NPS: “Well, look, we do have a black President, so what are you complaining about?”

CD: Right, right.

NPS: And that’s-

CD: Or we passed this law. Yeah. It’s sort of a gramscian thing, right, you know, that capitalism legitimates itself by being able to say, well, hey, what do you got against us? Look at how much, you know, we can turn on the TV now and see black anchors and women in high positions and, you know, one wants to celebrate some of that, but when you recognize that oh, the wealth gap by blacks and whites has gone ten times up, you know, in the period after Obama, and-

NPS: Right, right, during the housing crisis.

CD: Same with women and, I mean, you recognize there’s something really, really wrong there and that it’s delicate to talk about, particularly if you’re a white male, and I’m sensitive to that, but it’s something that is just essential for people to think about and to organize around, and that’s really this book, Welcome to the Revolution, it’s really why I brought in a lot of different voices of people who were from these different communities but recognized that labor and economic, systemic, and political economy sorts of questions were central to all the, whether it’s Black Lives Matter or socialist, feminist, and so forth, these are issues that the hopeful thing is that I think more people in these identity movements are recognizing the importance of intersectionality and the intertwining of race, class, and gender and so forth and the need for organizing on the ground to have this kind of wider angle of vision.

There Are Welfare Bankers in Welfare Jets

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NPS: Seeing and understanding, being able to perceive the common ground that they have and that the game is already rigged, the power elites from the very beginning, pre-capitalists and post-capitalists, whatever capitalists really means, it’s really state-driven capitalism, but it’s-

CD: Right, right.

NPS: But nonetheless, the corporate masters have tried to divide people, have said, “Oh, well, you’re Italian, you don’t want to hang out with the Irish, and oh, we don’t want black and white farmers to join forces.” It’s kind of astonishing when you think about the Farmers’ Alliance being formed in Texas.

CD: That’s right.

NPS: The first farmer’s union.

CD: Kansas, yeah. Right, right.

NPS: My grandparents on my father’s side were farmers in North Dakota and they settled there, and it was interesting to talk to my grandfather before he died. Of course he had some really crazy, far out there evangelical views. He was so extreme that no church was good enough for him, that he knew better than all of them.

CD: Wow, wow.

NPS: But it was funny that we could talk about far right policies. He didn’t know I was gay, by the way, that would not have gone over well. But when it came to the state swooping in and supporting farmers if their harvest didn’t go well, or in his little community, the community actually keeping the café open even though it couldn’t make enough profits to justify itself under the economic system, all of that made perfect sense. It was very interesting.

CD: Right, right, right.

NPS: I like my slice of what the government does for me, but you shouldn’t get a slice. And that’s definitely what the top one permill, I want that word to catch on, because it’s the correct term, the top one tenth of one percent of Americans you talk about in Sociopathic Society that they rely more on the infrastructure of the government than any of us. They-

CD: Absolutely. Corporate welfare is the only real welfare in America. You know?

NPS: Yeah, the rest is like dirty pennies in the couch.

CD: Absolutely, it’s chump change, yeah.

NPS: That no one cares, no one should care about, but it keeps being trotted out as this huge issue. Oh my goodness, there’s a black woman who gets her nails done and she’s on welfare.

CD: Exactly, exactly.

NPS: How dare she be entitled to any decent survival?

Fascism and the Evolution of Economic Divinity

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NPS: Goodness gracious, we could go on forever. This is really good. I’m really enjoying this. I hope you are.

CD: Good, I absolutely am. Well, it’s really, really important. I mean, the issues we’re talking about are so central. I mean, one thing I wanted to add was, returning to the sort of fascist tide around the world with Trump and so forth. These kind of siloed kinds of left politics are not only dangerous to the left because they divide the left and keep people from focusing on some of the systemic things that are so central to all these kinds of hierarchies of oppression, but they’re also the things that open the floodgates to the Trumpists of the world and the sort of fascists of the world, because the white working classes, I just wrote a new book, it’s coming out in December, actually.

NPS: Wow.

CD: So, just in a couple months, called-

NPS: You know you’re adding, you’re making my reading list heavier and heavier. Thank you very much, it’s already got lots of books on it.

CD: Yeah, I should apologize for that.

NPS: No, not at all.

CD: Anyway, just to add to the weight, this new book, which is called Moving Beyond Fear, and it’s subtitled Upending the Security Stories of Capitalism, Fascism, and Democracy, and what I try to show in there is that when capitalism moves into periods of extreme crisis, this is a gramscian analysis, but that the traditional legitimation stories of capitalism, which is the American dream that everybody works hard to get ahead, and so if you think of capitalism as a sort of upstairs, downstairs house, people on the downstairs accept because they think the stairways going from the downstairs to the upstairs are wide enough that anybody who tries can try hard can make it up there and live very well. But when those stairways are clearly declining, the people upstairs, the elites have got to figure out a way to keep people in line and keep them believing in the house and the architecture of the house.  So actually as I reach back into pre-capitalist kinds of stories around security and fear where if you looked at the nobility and the aristocracy and the serfs in, say, the feudal era, there was never any chance of mobility so they built this idea of, you know, sort of chain of being based on God and security where the people on top simply were destined to be there for the well-being and protection against terrible threats and fears. In the Middle Ages there were these devils lurking everywhere, whether it’s disease or Satan or whatever, and the lords of the manor were there to prevent them, so I kind of look at the evolution of modern national security ideas from even these pre-capitalist things as sort of a basic form of capitalist legitimation and then, when things went really bad, this sort of fear-based enemy manufacturing, I know Noam has written a huge amount about this, but it’s really central to fascism, because capitalism can easily devolve into fascism when the economic situation is bad enough and when the elites are desperate enough that they’re willing to do what the Republican party has done, which is basically throw its lot in with these ultra nationalist sort of alt-right groups, which are based on sort of very authoritarian and-

NPS: Strong father model

CD: … divisions, the divisions of people. You have to divide people down within the downstairs, and you divide them as enemies of the people and people who are totally catastrophically dangerous to allow, so I said people with fear about that’s being generated from their lack of economic and social well-being are being told and come to believe that, well, it’s these people who are really enemies of the people, whether it’s black people or gay people or immigrants or whoever it is, and you know, they say it was that thing, it was that kind of model, in this book, I go into a lot of Hitler’s talk about immigrants and Jews and gay people and so forth, who used exactly this kind of legitimation politics to draw people from the Weimar Republic into serious fascism. So it’s a really, this is not just abstract kind of theorizing about the left in America right now. It’s something-

NPS: It’s real.

CD: … that’s really embedded in the history of some of the most scary things that we can contemplate and so that’s why I think the things we’ve been talking about, about the way the left is structured, or the group that likes to think about itself as left. And again, I don’t mean to be that in a sanctimonious or punitive way, because I really appreciate any kind of activism on the progressive side that people are willing to do, people who have hard lives and it’s hard to-

NPS: Well, some forms of it are going to be more effective and some people are going to be-

CD: Exactly.

NPS: … more heavily burdened because of the system.

CD: Exactly.

NPS: There was something else along … oh, yes. The other thing I wanted to add in the vein of thought of what you were talking about with respect to security, and I’m very interested to see your book, is this interesting transitioning from divine intervention justifying the existence of the elites, the monarchs, the aristocracy-

CD: Right, right, right.

NPS: … to it becoming the holy market.

CD: Yeah, that’s an interesting transition, that’s right. Because, you know, in the middle ages, this sort of division between the aristocracy, the nobility, really we’re seeing is that a literally different blood. Blue blood you know, sort of godly and inspired nobility. It then becomes capitalism, you know, the feudal lords had a lot of contempt for the early merchants who would become the capitalists, but eventually, history evolved in ways that these merchants developed enough capital and enough power, but they always envied the kind of divine legitimacy, you know, the godly legitimacy of their older brothers who were, you know, the people who remained on the land and so forth, even as they were declining economically.  And they always, I’m doing another book with my co-author called Glorious Causes, something about why people vote against their own interests, or act against their own interest, and it’s that same argument that, you know, what we’re seeing here is that an ancient historical force that you can see through centuries and centuries of human history where you know, it’s like you said, elites constantly need to re-legitimate their system with these very ancient views that god or nature have somehow constructed them as natural and godly and the way in which morality is maintained.

NPS: There was this fabulous quote that you have in Sociopathic Society about John D. Rockefeller. I don’t have the exact quote.

CD: Yeah, “God gave me-“

NPS: Yeah, exactly, that’s God and Darwinism combined in one statement about why he has his wealth. I thought that was a fantastic quote.

CD: Yeah, and that Godly thing, you know, you go back … have you been to Newport where they, you know, the nineteenth century robber barons, the first real American capitalists of any great consequence, they built their summer homes and they literally brought over the castles from European nobility.  Capitalism itself can never really inspire the kind of moral and spiritual meaning that the aristocracy in pre-capitalist societies was able to provide, because it’s hard to get people completely morally inspired by the idea of just making a lot, being money grubbers and being successful about it.  And so I think there’s always been a need in capitalism to sort of move into these areas of pre-capitalist religious and spiritual kinds of legitimation and then you see that in, you know, Hitler was very much of a moralist and a spiritualist in talking about godly, I mean, to read Hitler is to think that you’re listening to a preacher, you know, because he’s talking about moral degeneration and his whole argument was, you know, he was happy to rely on capitalists, corporations from America to rebuild his military and military Keynesianism and so forth, but his core argument was really moral and spiritual, and I think it reflects the fact that capitalism is inherently challenged to create ideas that can, particularly given the tendencies of capitalism to-

NPS: It’s amoral.

CD: … push people down in the system. It’s amoral and it doesn’t deliver on the money-grubbing materialist sides of it, so it has to go towards these more spiritual, more elevated form.

Piketty, Rentiers, Gladiator Technocrats, and State-Sponsored High Tech

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CD: And you know, the economy ends up, this is the virtue I think of the work of Thomas Piketty, which I’m sure you’ve come across.

NPS: Oh sure.

CD: The French economist who really writes that-

NPS: That’s in my notes to talk to you about that, so, yeah.

CD: Yeah, I did a little book which I talked to him about, which is really a sort of exposition, a sort of “Reader’s Digest” view [Disinherited Majority], you know, sort of a simple view that people don’t want to read 800 pages of economic history. But, you know, his analysis–

NPS: It’s a hard book.

CD: Because really the capitalist … it’s a hard book to read, but it’s really interesting and it’s, one, because he writes a lot about history and he writes about the kind of culture of capitalist elite and he writes that-

NPS: It’s very well written, the translation.

CD: Yeah, very well written.

NPS: I love it.

CD: And he writes about how the capitalist elites always, back in England and much of Europe in the last three centuries, have always had this kind of aristocratic tendency, not only in their need to ape, to sort of emulate and claim blue blood, you know, glory of the kind that the feudal warrior class and nobility had, but they were basically ended up being rentiers, you know, where they basically made their money off of inherited wealth, and wealth was increasingly inherited as we see today, and Trump being a perfect example of a guy who was sort of buying into the, you know, trying to publicly promote the myth of walking and working your way up the stairs, but the guy we now know inherited, what, half a billion dollars, $423 million from his dad.

NPS: Yeah, he’s a phony. A phony.

CD: Yeah. And he didn’t work hard for his money.

NPS: No.

CD: In fact, we now know that he had taken what he inherited and simply had put it in a savings account, he would have more money than he has today, although we don’t know exactly how much he has, we know that he would have had a lot more money if he had just put it in the bank. So the guy is, in a way, a feudal lord who just inherited his money. We haven’t inherited an aristocratic class, which claims itself as a innovative, technologically advanced, and there’s just enough technological innovation where you know this from the world you work in that again, capitalism is fluid enough and you know, complex enough that you can make these arguments with some level of credibility. I don’t mean the Trump argument so much, but these broader arguments we’re talking about, about working hard and creative innovation and so forth, particularly in a high tech economy in ways.

NPS: In my social … I was just going to mention, insert into that, what I see on LinkedIn is this gladiator worship, the technocrats, my fellow technologists, technocrats, they worship these sort of proto-sociopathic magnates like Elon Musk and Jeff Bezos, Mark Zuckerberg. Like, they can do no wrong because they’re so brilliant that they created all of this wealth. I can speak to Jeff Bezos more directly because I worked at that company. I would say that there certainly are very sociopathic tendencies at work across that entire company, but these people are-

CD: Oh, absolutely.

NPS: These are people are put up on a pillar as something to be worshiped and emulated.

CD: You know, this is an idea, as I listen to you talk about this, this is, you have a particular perch, so to speak, in which to really talk about this. It’s really important, and you know, just intuitively, I don’t know the world internally the way you do, but, I mean, this world of high-tech business and culture, but it just sounds really right to me, and it really is, it’s really important, because you know, capitalism is evolving in this direction, so Jeff Bezos is the richest man in the world, these corporations are the dominant corporations increasingly, and they’re very much embodying this new model of kind of, well, of everything we’re talking about, right, of creating a really sociopathic kind of capitalism in the name of technological progress and general social well-being and so forth. And there’s just enough virtue and fun that comes from computers and all the electronic technology that we have that it becomes one of the guiding legitimating forces of a very sociopathic system, you know. So I think-

NPS: Without the historical context of the state actually creating, at least germinating all of this technology.

CD: That’s right, that’s right.

NPS: Then it later is taken on by private enterprise, like the internet was pretty much given over to private enterprise in the mid 90s after 50 years, really 60 years of at least thinking about it in the state circles.

CD: Well, you know, this is one of Noam’s big, I’m sure you probably got to know Noam that way, because working at MIT and seeing the way in which the state was funding so much of the technology in the Defense Department and that eventually would lead into the high tech revolution. That really became, you know, Noam has always called the Pentagon the sort of backdoor socialism of American capitalism.

NPS: It absolutely is, yeah. I ask people, fellow technologists, and people who are skeptical of the kinds of things you and I’ve been discussing for the last hour. I ask them the question, what would happen in the 1930s if somebody came into a corporate board room and said, “Give me $250 billion and in 70 years, I’ll give you $10 trillion.” The numbers may be off somewhat, but it sort of captures the spirit of it. They would have kicked his ass out. They would have said, “Hell no, we don’t want that kind of long term risk,” even if you can almost guarantee that there’s going to be this huge turnaround. Technology wouldn’t happen within a true capitalist system if we’d ever had one, this sort of laissez-faire imaginings of people who are trying toretrofit the history to say this is why we are great, and therefore invest all of our energy into emulating people like Musk and Bezos and Zuckerberg, which, I’m sure they’re actually aware of this, because they have to deal with the government at the highest levels just because of the way that their corporations are so intricately intertwined now with AWS at Amazon and Azure at Microsoft competing for government contracts to manage the cloud. But the people are taken aback by that.

CD: Yeah, and you know, this high tech stuff, I just wanted to say again to validate the importance of your ability to speak to the high tech, the Bezos, you know, high tech-

NPS: Worshipers.

CD: … model of worship, I mean, it’s really infected the university.

NPS: Absolutely.

CD: So I see students every day who, you know, who they’re, you know, if you looked like at a place like where I teach at Boston College, there’s just a massive, you know, migration of students from the liberal arts into the business schools, and they go into finance and technology, and they really do worship these people that you’re talking about, and they see this as a model of what their life will look, and these are people who are very oriented toward identity politics. You know, they’re a generation that is very open to-

NPS: Socially liberal, yeah.

CD: Socially liberal on all the socially liberal, you know, I can check off whether it’s racial diversity or you know, gender-

NPS: Marriage equality.

CD: … transgender acceptance and all that stuff and they really mean it, but on the other hand, they become completely … this is the danger of the kind of, quote, left politics that we talked about, or liberal politics, both where the socially liberal mentions of it get divorced from the systemic, you know, power and control.

NPS: Which I saw firsthand working for corporate Uber and working for corporate Amazon, so it … at corporate Amazon, I traveled to the UK and I traveled to California to tour delivery stations and go on last mile rides to just sort of get a feel for what the drivers on the ground are having to deal with, and as you might imagine, they are considered contractors. They’re not employees.

CD: Right, right, yes, I know.

NPS: Although there’s no National Labor Relations Board in the UK, but they have their equivalents over there. They are pretty much serving at the pleasure of the delivery stations that hire them. They don’t have any opportunity to unionize, the pay is terrible. They are held to standards that literally will cause them to have auto accidents because they have to go so fast to get everything delivered.  You see similar happenings at Uber. When I was flying back and forth from Seattle to San Francisco working at corporate Uber, I was doing that every week. I can’t believe that I did it. My husband told me that it was terrible idea but I did it anyway. I had nothing else to do when I was down there except work, and if you stayed in the office past 10:00 PM, they would give you a free Uber ride home. So I could order Uber Black, which is the limousine, you know, it’s really just a black SUV. I got to know over 70, seven zero, Uber drivers in the course of that whole enterprise, and this is real conversational narcissism, what I’m about to say, because I’m really proud of this.  With almost every one of them, I would keep them an extended period of time talking to them about American history, particularly the labor movements, and why the only thing that will work that will lift their standard of living, because I saw people whose wages dropped 30% over a period of 18 months, and this is their full time job, they have no labor protection because they’re contractors. I explained to them exactly what has worked in American history and they were enraptured. They were mesmerized because they’d never heard any of these things. They’ve not heard these aspects of American history.  I also told them, you know, the truth is, I could be fired for telling you these things, because corporate Uber is not going to be happy for me to tell those things to drivers, basically.

CD: So, so true, you know, and I shop at a local Whole Foods, which as you know has been taken over by Amazon, and I’ve been asking the people there what the new management is like and what it’s like for them as workers there. It’s a pretty sad story. You know, and you read about the warehouses, Amazon ware-  It’s a pretty sad story. Now, when you read about the warehouses, and then the warehouses, regrettably, how unsafe they are.

NPS: Oh, yeah. I’ve seen them, and it is terrible.

CD: I’ve never been in them but it seems just awful. And then what I did, I talk to these people on the know when I go shopping and looking for whole foods. They say that both the way the food is sourced, the way their work schedules, and so forth have taken on notable slide since Bezos took over whole foods. And I wasn’t that enchanted with his predecessor, although he kept talking about conscious capitalism and so forth.

NPS: Right. Right.

Globalist Worker Exploitation and “Immoral Morality”

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CD: So, yeah. So, I think, this discussion of way in which high-tech capitalism is shaping the toxic sociopathic forces with this. Another idea that you might … not to lay on you all these books–

NPS: That’s all right.

CD: I also wrote a book called Morality Wars which talks about the ideas of immoral moralities. It’s sort of the core concept. The idea is sort of this, that the more toxic the actual behavior that any particular institution takes on, the more likely it is that they will turn to morally, or spiritually, or religiously oriented high levels of moral discourse.  Well, pretty much, a linear correlation between the sociopathy of the behavior and the elevated morality, how elevated it is of this person that justifies it.

NPS: Sure. Yeah.

CD: And I sort of look at everything. Look at empires from the Roman Empire to fascism, all examples of incredibly, if you look at fascism, incredibly barbaric systems which were studiously legitimated under the most moral and spiritual. And, of course, slavery was often done in that way and, I mean, if you look-

NPS: Oh, yeah. They said they had to have slavery.  They told northern industrialists, “Well, you don’t support your black workers.”

CD: Right.  Yeah. They said, “You have wage slavery. We have a kind of welfare state for these people.”

NPS: And that’s a similar argument that remains in place to justify this state-driven, high-tech capitalism. That if you don’t do this then poor people won’t have jobs.

CD: Right. Well, on high tech, I’m focusing on this because it’s where you’re located. And I think it’s incredibly important because I noticed in the university, like I said before, that I think, even among the more socially liberal parts of the younger generation, the high-tech miracle, so to speak, is really what is a vast part of the new legitimating element of capitalism. People believe in the technology. Their lives have been changed by computers, and iPhones, and so forth. And that’s had a huge impact on the way they think about the world. And it makes them believe that capitalism can really, because I teach courses on capitalism, that they go back to these high-tech world as a way of believing that capitalism can produce miracles and-

NPS: All boats will rise.

CD: … moral giants like Jeff Bezos. Yeah. And it also does produce new contradictions because the high tech world, it produces a lot of creative stuff. And there is this tension within capitalism itself between sort of more cosmopolitan features of capitalism, which required a certain amount of critical thinking and scientific, innovative kind of discourse or way of understanding the world, and the more traditional forms of capitalism in their sort of core structures of capitalism, which are rooted in these primal, brutal forms of power. So I think the high-tech world really gives this kind of special, post-modern, 21st century kind of legitimacy to these ruling forms of oppression and hierarchy and stuff.

NPS: Right. You see it in the astonishing rates of sexual harassment in high tech, and we just had the big Google walkout this week.

CD: Oh, that’s right.

NPS: And it was covered on Democracy Now, and my uncle told me it was covered on CNN. I don’t watch anything other that what I … I read things online, and I listen to Democracy Now, and that’s about it for news. You get more out of Democracy Now in ten minutes than you do CNN in 24 hours.

CD: Right. Right.

NPS: But just to add another story to that, I remember – actually, it’s two different stories, but it’s basically the same idea – talking to some of the younger people that worked on my team and my sister team when I was in Amazon with last mile logistics. They were unaware that there are schools in this country that don’t have power, or places where you can’t drink the water, or the kids don’t have enough textbooks to go around and the textbooks are from the 1970s. They couldn’t believe that because that’s not what they’ve been taught. If they’re from a different country, it’s not really necessarily what they’ve been taught about America, at least the high-tech vision of what America looks like.  They also were completely unaware of a story that I saw on Democracy Now in which during one of the heatwaves that we had in the last couple of years, it must have been maybe five or six years ago now, in Pennsylvania, one of their fulfillment centers, they didn’t have air conditioning because you don’t need air conditioning up there a lot of the time from what I understand. I know we don’t need it in Seattle. But, in any case, they were experiencing this heatwave so the fulfillment center was just overbearing and terribly hot. And they didn’t want to open up the big doors that are used for freight transportation of goods because they were afraid the employees would steal from them.

CD: Hmm.

NPS: One of the experiences that I had in visiting the fulfillment center, it is like a damn prison. Getting in and out of there, if there were a fire, you’d die because just getting out is almost impossible.

CD: That’s very interesting and very, very believable. Yeah.

NPS: So what they decided to do was ask the city to send ambulances that just circled the fulfillment center for people as employees would have heatstroke’s.

CD: Wow.

NPS: I mean, you can’t make this shit up it’s so bad. And I was explaining it to my coworkers and they, of course, didn’t disbelieve me because they liked listening to me talk about history and various things that I would try to mix into the work that we were doing. But they couldn’t believe that Jeff Bezos, or his surrogates, or representatives would ever agree to such a thing because it’s so egregiously evil. And I explained, no. This is across the board. These wonderful, liberal, high-tech companies are engaged in horrific labor practices overseas, not to mention the ones that they’re doing in the United States. But it’s nothing compared to what’s going on in Africa and China and India.

CD: Right. Right. No, you’re so right. And it’s certainly my understanding of these places, although, I’ve had less direct experience with them. But it is, though, the contrast between the sort of glamorous and moralistic imagery of Amazon.  It’s really kind of third-world, capitalist enterprise in a way. I mean, kind of like a sweatshop because I have been in a lot of, in Asia and Africa, I’ve been in…

NPS: True sweatshops.

CD: Sweatshops, fulfillment centers of which just exactly, when you were talking, remind of what I saw in, say, Thailand or those kinds of places.

NPS: Were these Foxconn plants?

CD: This was about seven or eight years ago, but I went on a variety of tours of various kinds of western sweatshop, sneaker shops, but these were not high-tech places, per se. But they had the sort of sense of prison, and yet of being morally save because they were taking young women who were going to be, otherwise, brutalized on a farm. And, I mean, they were working in better conditions than they were before these companies came in and on the wall, in English, they would have in some of the Nike centers or whatever, Reebok centers, they would have corporate codes of conduct written in English that nobody could understand. And at the same time, I was able to talk to the workers and these young women were working in locked areas, which where there were fires meant many of them could die. Where you’ve heard on Bangladesh–

NPS: Oh, yeah.

CD: And where they would work 20 hours. Depending on the season, they would work 20 hours and sleep under their sowing machines and that sort of thing.

NPS: Oh, my God.

CD: So, yeah. I don’t know if you know Charlie Kernaghan, and the work he did, [though] he’s not doing this work anymore because of health reasons. But for many years he was the primary sort of presenter to the western audience. And he would bring these workers over.  I remember, because I was friends with Kernaghan and his partner, they would bring in from, say, Bangladesh these young women who were 17, 18 working in these American Disney cap or tee shirt sort of back sweatshops or whatever. And these girls, who were the same age as my students who are 18, 19. And they were talking about what their life was like, and how they were going to die at 30. And they were working 20 hours a day, and they wouldn’t have enough money to pay for a coffin because of the health conditions in the shop. And it just brought tears to these female students who were looking at them, the same age, and sort of wondering why am I who I am.

Luck Can Demand Responsibility : Hope in High Tech?

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NPS: Why am I lucky.

CD: Yeah. And how awful it was because the sweatshop workers were so … They weren’t exaggerating or in anyway asking for anything but people to listen or understand what their lives were like. It was very compelling.

NPS: Yeah. I’ve often thought … And in recent years, this has definitely been true. I mean, except in the last year because I’ve had some really bad health crises that have come up. But certainly, before this, I read about these things. It’s hard to watch video of these things. But I read about them. And part of the reason I read about them is not only to inform my actions and help me be a better citizen and try to work on these issues, but also, the gratitude that one can get from realizing that despite the fact … and I’ve told you in some of our email correspondence before this about the bullying that I experienced earlier in life, and there were a lot of things that I wish had been different. But my God, the life that I’ve had, it is literally like winning the lottery multiple times over to have been born in late 20th century America, and be white, and I’m tall.

CD: Right. Right.

NPS: And I’m also … I was good student and I was compliant. And those two things together are the reason that I’m sitting here talking to you now.

CD: Yeah. Yeah. Absolutely.

NPS: And I didn’t do anything to deserve those things. I’ve done nothing. There’s no … I don’t even believe that there’s some divine reason that I’ve been given these things. It is, literally, the roll of the cosmic dice. And I feel like that should be a call to action.

CD: Right. Well, you know, Noam’s view of social activism is really a form of education. And as you act, you educate yourself and you educate others. And, yeah. I think your story is very … I think you can attract and impact a large community by the particular nature of your experiences. And you’re an articulate guy as I’m listening to you.

NPS: I appreciate that.

CD: And I think you shouldn’t underestimate the way that your voice can make a difference.

NPS: I certainly believe that those of us who work in high tech have a degree of priv… We’re actually the last vestiges of the middle class in the neoliberal era. So, therefore, these people actually do have power. The people who work at Google and can walk out, they have power.

CD: Right. Right.

NPS: They can force corporate leadership at this gigantic, perhaps one of the most significant corporations that’s existed. They can sway leadership just by joining hands together and saying, “We’re not gonna work today.”

CD: Have you seen much of that? I mean, have you seen any emerging high tech sorts of activism that strike you as promising?

NPS: Well, certainly. I mentioned earlier George Polisner and his building of the social network product.

CD: Yeah, no. I know George. I was in touch with him 10 or 15 years ago. Yeah. I haven’t talked to him for a while but, yeah.

NPS: His work is really interesting. I actually did my first of these interviews was with him, and you’re number two. Yeah. He and I been chatting for quite a while because I discovered him on LinkedIn and saw his very public resignation from Oracle. So I saw that online, so I reached out to him. He resigned because Safra Catz, the CEO of Oracle, agreed to be part of Trump’s either transition team or-

CD: Oh, that’s right. Yes. Yes. I remember.

NPS: And so we started chatting and he was explaining to me some of the people that he’s known through the years through the work that he does. Not the activism but the actual high-tech work. So that is certainly something that gives me hope.

CD: Yeah. Yeah.

NPS: As far as the kind of organization that I would really like to see, and this doesn’t exist as far as I know, is a real union for technologist or a union for data science.

CD: Exactly. That’s funny that you’d say that because I was just thinking that there’s-

NPS: That’s precisely-

CD: … a terrible importance of getting because there would be a real potential. I mean, the laborism is strongest among professionals and among … What’s left of the labor movement is in the public sector and in professions. So as much as those groups are problematic in some ways, they are doing a lot of the organizing and, whether it’s nurses or teachers or scientists or whatever. I mean, that’s where a lot of the labor … So, I mean, I think they … it must be a right period now, given the conditions that we were talking about, for labor to get a foothold in.  And I’ll say that, in a sense, that would be the new, new deal would be trying to find the way to get, given the conditions of work on these huge, glamorous, high-tech companies, a labor movement addressing the issues you’ve been talking about would be really powerful, I think. The time is right, you know what I mean?

NPS: This has been awesome, and I can’t thank you enough.

CD: I’m glad you feel that way. Its been really nice talking to you and-

NPS: Your works are very powerful. And the way that you bring together, it’s the homogenization, the universalizing and all the this spirit that there’s more or less leaves on the tree and bringing it back together towards the trunk of the tree. It’s very powerful. So I want to-

CD: Thank you, Neil. I really appreciate you saying that. I’m really happy to hear it. And that’s very affirming because I spend so much time doing this stuff.

NPS: Absolutely.

CD: And whenever I get affirmation, it kind of really feels good. So let’s stay in touch. I’m really happy to meet you and talk to you. I think we’re very much in the same spirit and so forth.

NPS: Sure. Yeah.

CD: I’ve been really thinking about projects I can imagine you’re doing in the high tech domain that we talked about that our work of organizing on the ground. And maybe in terms of book-writing and so forth.

NPS: Yes. Absolutely.  A dream come true. So thank you Professor Derber for all the work you’ve done.

CD: Terrific. Well, thanks for your work. And call me Charlie. And we’ll stay in touch Neil.

NPS: All right, Charlie.

NPS: Awesome. All right.

CD: Okay.

NPS: You take care.

CD: Thanks for talking. Take care of yourself. I hope your health conditions go well. And I look forward to talking to you next time.

NPS: Likewise, thank you so much. Bye-bye.

CD: Okay. Take good care. Bye.

A Return to Gainesville

Returning to the issues of today has been overwhelming.  Last year, I suffered a health crisis nearly taking my life.  I’ve since returned to a better place, though I remain deficient.  So many issues are current and pressing, and it’s difficult to know where to begin.  The separation of children from their parents by Trump’s border gestapo seems in need of triage, though Trump seems to have understood that harming children isn’t a reasonable means of coercing cooperation from Democrats on the wall funding.  We could examine a myriad of issues, including North Korea, DuPont’s coverup of the dangers of teflon, Scott Pruitt’s $43K phone booth, the ongoing Mueller investigation and Trump’s repeated witness tampering, and so on.  But instead, I’d like to talk briefly about a journey I made recently.

Home Again

To support my best friend during a difficult loss, I returned to my hometown of Gainesville this past month.  Cathartic and lengthy, my visit permitted time to get a good look at how the city of my youth has changed in the eighteen years since I lived there, along with a reunification with my college history professor, Pat Ledbetter, faculty at North Central Texas College (NCTC), and my high school calculus instructor, E. Clyde Yeatts.  It just so happens that my twenty year class reunion transpired during the time I was there, as well as a town hall by Beto O’Rourke, Democratic representative from El Paso, and most recently candidate for the upcoming U.S. Senate election, pitting him against Ted Cruz.  I attended the latter, eschewing the former.  The town hall was lively and energized, though a fair amount of shallow, rally-around-the-flag banter and gladiator hero worship persisted.  I did manage to query Beto on economic issues during the question and answer, available around 50:00 or so in his recorded version.  The issues raised there, along with the drawn, sober look at my city of origin, are topical of this post.

IMG_1975

Beto, Piketty, and Income Inequality

My question specifically asked about the approach one might take in addressing income inequality, something we all understand, at least in the first order.  I referenced Thomas Piketty, the eminent French economist with rather dire predictions for industrialized nations with respect to the current balance of rents and labor.  In Capital in the Twenty-First Century, he describes an economic dystopia in which the super-wealthy need not invest in labor, as the return-on-investment (ROI) for capital exceeds that of material investment.  Put more simply, money by itself makes more money than any kind of investment benefiting the apocryphal middle class, so investing in manufacturing, science, health care, and so on, simply isn’t as lucrative as investing in real estate, credit cards, and the like.  Piketty describes this as a grim portent of political instability, as a larger and larger share of household wealth becomes inherited.  Once all capital is owned and controlled by heirs, the extreme poverty imposed on working class and indigent people reaches a breaking point.  It’s worth considering that fact for a moment.

The Role of Public Relations

Since the dawn of the public relations industry, sociologist Anne M. Cronin suggests that we’ve been told rather feverishly that occult forces, be it God, the market, patriotism, and so on require that we accept the station to which a would-be wizened corporate and political elite may assign us; it’s a kind of brainwashing, guaranteeing society-wide compliance in tyrannies historically entrenched.  Walter Lippmann said it best:

[t]he public must be put
in its place…so that
each of us may live
free of the trampling
and the roar of a
bewildered herd.

The framers believed this problem compelled the formation of a strong government:

[t]he primary function of
government is to protect
the minority of the
opulent from the
majority of the poor.

Edward Bernays, nephew of Sigmund Freud, spear-headed the wartime propaganda from within Woodrow Wilson’s administration by exploiting his uncle’s pioneering work in psychoanalysis to shape public attitudes.  As the great war ended, he recognized that these same mechanisms ought apply to peacetime attitudes as well; he successfully increased revenue for the American Tobacco Company after originating the “torches of freedom” campaign, a means of convincing women to smoke by equating the cigarette with a penis.  Subsequent to this and similar campaigns, Bernays emerged a superstar and corporate darling, fathering public relations, a watershed science capable of convincing very large numbers of people to purchase the unnecessary and ignore the uncomfortable.  These facts are public record, and they’re invaluable in partially contextualizing how my hometown has deteriorated since the post-war boom.

Gainesville, Boom and Bust

Gainesville prospered significantly following the second world war, benefiting principally by railways constructed in the nineteenth century and the intersection of two significant highways, one being I-35, an federal interstate running from Mexico to Canada, the other locally known as state highway 82.  Armco Steel and National Supply, steel and oil pump manufacturing companies, co-owned a plant where my grandfather and many other Gainesvilleans found employment.  The population dipped with the closing of the plant in the 1980s, and big retail became bigger retail, closing hosts of stores.  Thus, the Gainesville of my childhood was stagnant economically, and downtown rapidly became a series of vacant buildings and warehouses.  My grandmother recollected to me that municipal leadership of the town deliberately limited growth, though I’ve not been able to corroborate that.  Principal employers in the city were the local college, the independent school district, Weber Aircraft, and retail, grocery stores, and restaurants.  My mother worked for Weber for a couple years, but lack of jobs led my family out of town during the 1990s, though we returned for my high school years.

Gainesville Gambles, Floods, and Stagnates, Regressing Toward Trump?

In the years since I left town, the Winstar Casino opened across the Red River in rural Oklahoma.  Despite the pervasive religious overtones of Cooke County, its primary source of employment now is said casino. Crime rates spiked after my exit, though they settled downward in the decade to follow; a devastating Biblical flood struck the town in 2007, killing some people and destroying considerable property.

Is it possible many of the run-down buildings I saw in my recent visit were condemned after the flood?  I’m uncertain, but the demographics have changed, the poverty seems deeper, and Gainesville seems more dangerous to me.  On the other hand, some downtown stores have appeared, and there are places in town reminiscent of a more economically rich history.  In any case, should Gainesvilleans accept their station on the strength of the word of Trump or some other demagogue?  Considering that capital is more valuable than labor, the future is grim for a city with a quarter of residents living below the poverty line, per City Data.  A large number of toddlers and slightly older children fall into this category.   Eight-in-ten Gainesville voters selected Trump in the 2016 election.  This must include a large fraction of those quarter denizens below the poverty line.  With such striking numbers, I may very well know personally every person in Cooke County who didn’t vote for Trump…

Where Next?

To escape poverty and lack of jobs, many of us expatriated elsewhere; I also find the sharp support of far right politics reviling.  To that end, I found employment in the midcities, then Atlanta, and finally Seattle.  My good friend Pat Ledbetter, whom I’ll interview for this blog in the days ahead, mentioned to me that Texas needs “thinking people” now more than ever, and considerably moreso than does Seattle.  Though a permanent return to Texas isn’t on the radar, I do think it’s time to offer aid to my city of origin.  Beto’s campaign seems a good starting place.  He, like Bernie Sanders before him, refuses funding from PACs, relying on local and individual donors.  Perhaps there’s more to be done.  Pat, my former teacher Clyde Yeatts, and I will have to cogitate…

 

War No More : A Book Review

The Chalice of  War

Recent events with respect to our so-called enemies abroad, including Donald Trump’s

  • fruitless, impeachable knee-jerk bombing of Syria earlier this year, an act whose legal justifications rival the effectiveness and stated objectives in vacuousness,
  • inflammatory posturing toward Iran in an incredibly dangerous perpetuation of Washington’s Iranian foreign policy over the past thirty years, and
  • saber-rattling against North Korea as tensions escalate, virtually ignoring long proposed nuclear freeze proposals articulated by Noam Chomsky, proposals requiring the impossible act of American military retreat in that piece of the world,

underscore the precarious position in which we find ourselves in our 200,000 year run on this planet.  In the midst of these tumultuous times, there exists a specter looming over virtually all mainstream discussion, so far out of mind as to conjure moronic climate change denialism, differing in that most Americans, whether convinced of the overwhelming scientific evidence or not, are at least aware of the debate.  The bias should seem clear, as Trump’s illegal attack on Syria should indicate : articulate opinion virtually fell into lockstep admiration of Trump, for example,  the New York Times remarked,

in launching a military strike
just 77 days into his
administration, President
Trump has the opportunity, but
hardly a guarantee, to change
the perception of disarray in
his administration.

Glenn Greenwald of The Intercept pointed out this and many other instances of elite media reversal on Trump the instant bombs begin falling.  There exists a chalice of war, and Americans have been drinking deeply of it since the second world war; the mindset is pervasive, infiltrating our holidays, movies, video games, and most state-sanctioned celebrations of patriotism, whatever that actually happens to be.  Believe it or not, it hasn’t always been this way.  And there are a few voices rising above the rest to remind us.

David Swanson : Today’s Eugene Debs

I first encountered David Swanson’s works in the early days of George W. Bush’s warring administration. I had learned in college about the myriad military misadventures of American presidents, including

  • Harry S Truman’s illegal war of aggression in Korea, events out of which the brutal North Korean regime emerged,
  • Dwight D. Eisenhower’s acts of aggression in Guatemala to combat nationalism,
  • John F. Kennedy’s raving mad stance toward Cuba (to be discussed in an upcoming article in The Spanish Pearl series), and aggressive war against South Vietnam,
  • Lyndon Johnson’s lying about the Gulf of Tonkin incident to promote war in Vietnam and support of Israel’s illegal invasion of Lebanon,
  • Richard M. Nixon’s aggressive wars in Cambodia, Laos, and Vietnam, as well as the overthrow of Salvator Allende in Chile on September 11, 1973, the first so-called “9/11”,
  • James E. Carter’s support of Indonesian dictator Suharto in committing genocide against the East Timorese,
  • Ronald M. Reagan’s invasions of Grenada (a tiny defenseless island nation), bombing of Libya, drug runs in Columbia, war-making in El Salvador and Nicaragua, and propping up of Iraqi tyrant Saddam Hussein as a shield against Soviet influence in Iran,
  • George H.W. Bush’s invasion of Panama and escalation of the Gulf War,
  • William J. Clinton’s bombing of Serbia in 1999 despite warnings of heavy casualties among fleeing refugees,
  • George W. Bush’s invasion of Afghanistan and Iraq, the latter of which Chomsky labels the supreme crime of the 21st century, and
  • Barack Obama’s international drone assassination campaign, killing perhaps thousands of civilians in Yemen, Somalia, Pakistan, and Libya,

and the list could include crimes committed before 1945, though we’d require another article.  Suffice it to say that George Washington’s extermination of the Iroquois, Andrew Jackson’s mass murder of natives, destruction of native food sources by Ulysses S Grant, and the invasion and occupation of the northern half of Mexico by James K. Polk are but a few instances in the legacy of bloodlust the Europeans bore and continue to bear in conquering the western hemisphere.  We’ve mentioned the Spanish American War more recently as a light case study, and with this large body of historical evidence, it seems pretty clear another approach is warranted, especially when considered with respect to the forecast of virtually every credible intelligence agency in the world : violence generates rather than diminishes the threat of what we like to think of as terrorism.

David Swanson has long argued that not only is there an alternative to war, there is no alternative to peace.  A modern day Eugene Debs, this philosopher and activist has traveled the nation and the world to promote an ideology and dialog badly lacking in elite support.  Of interest in this article is his 2013 book War No More : The Case for Abolition.  In it, Swanson adeptly confronts many of the persistent myths, including the inevitability of perpetual war, the humanitarian war, the defensive war, the stabilizing war, and the like.  He also explains, quite effectively, the post-war shift of American culture in his earlier work War Is A Lie.

A Culture Drunk on War

Long before the Japanese bombing of Pearl Harbor in December 1941, Americans often were only very reluctantly conscripted into battle to fight for elite interests, as discussed earlier in the case of the Spanish American War.  We know now that desertion and reluctance to fire weapons at other human beings resulted in colossal ammunition waste in most of the wars through the twentieth century.  The psychology is simple, Swanson explains :

[m]ost human or primate
or mammalian conflicts
within a species involve
threats and bluffs and
restraint.

War is unnatural, he argues, citing further evidence that the grooves left in early human skeletal remains are bite marks from the large land dwelling predators we’ve since extinguished rather than battle scars from tribal skirmishes.  This in fact echoes earlier commentary on the most native violence experienced by Columbus in his expedition : light sparring with sticks and the like, only very rarely resulting in serious injury.  The conquistadors’ violence wrought upon the natives was something else entirely.

In any case, Swanson remarks that since the second world war, the military has become increasingly efficient in indoctrinating soldiers to kill.  A parallel public relations program has glorified war in film, print, and now video games, often with heavy consultation from weapon manufacturers and military personnel.  One need only look at the preponderance of blockbuster films these days to experience the influence.  Further still, military recruiters routinely lie and glorify the military way of life, enticing the poor with a phony carrot rather than the stick of the draft in earlier wars.  As before, the poor fight and die while elites shield themselves from the draft, such as

None of this should come as a surprise, as only a small percentage of human beings can truly stomach killing others.  It’s large enough that in our population we routinely hear of such violence, but, as Swanson often suggests with rhetorically surgical precision, imagine if the news stations spent as much time on nonviolence as they do violence.

Swanson helped me begin to identify the tremendous propaganda toward state violence after I read his comprehensive 2010 book War is a Lie; I had noticed in recent years, something he systematically demonstrates in his works, that a large fraction of cinema previews included a vast array of military tools, soldiers, and their deployment to the “battlefield,” a term Swanson very cleverly disabuses as an archaicism.  He points out that virtually every popular video game on the market features extreme amounts of gun violence and murder; though I am indeed a great fan of the game Skyrimvirtually anyone paying attention to the gameplay mechanics should notice that both men and mer would face imminent extinction with the pervasive, unremitting violence everywhere.  Skyrim isn’t alone, as the most popular video games these days exalt wholesale violence, enabling a broad range of sociopathic choices.  If a player kills virtually all citizens of the realm, who would grow the food, tend the livestock, write the books, etc.?  More broadly, one can note that almost all the holidays we observe in America are tied to violent acts, including, ironically, Easter, Thanksgiving, and the whole of Armistice Day, Memorial Day, Independence Day, and the like.  Our national anthem celebrates the violence of the Revolutionary War as a boon for freedom, despite the fact that life for 95% of colonists and virtually all natives, slaves, and women changed or worsened under the new management.

In any case, Swanson points out that dissidents are labeled derisively “anti-American” unless they blindly support ongoing wars under the mantra “support the troops,” even after elite sectors themselves disavow wars as unwinnable, strategic blunders.  Chomsky correctly points out that America is the only non-totalitarian state where such a notion of “anti-state” exists; Germans opposing Angela Merkel would never be described idiotically as “anti-German”.

Moreover, Swanson strongly argues the malignant effects of war on troops, rendering the catechismic “support our troops” phrase all the more ridiculous : we must continue the killing to honor the dead, lest we savage their memory.  I’ve witnessed dear friends and family thank troops publicly for their service, despite our military being the basis for human sacrifice : eighteen year-old boys must go die in some foreign land so we can ward off the undefinable, largely imaginary evil forces of tyranny, much like ancient cultures sacrificed humans to appease the gods of harvest.

I’m familiar with many mental health professionals who can confirm the extremely harmful effect of war service on human beings; post-traumatic stress disorder, coupled with loss of limbs, eyes, hearing, and the like mar not just our own soldiers, the only people elite sectors depict as “people,” but wreck nation after nation, killing millions and driving millions more into exile, prostitution, and violence.

The drone strikes themselves have raised a new generation of terrorists; case in point is Farea al-Muslimi, a young Yemeni student who spread good tidings about America back to his village until it was attacked by drones to kill an unarmed man accused of terrorism.  Instantly, a village hates the United States, despite the ease of placing the suspect in custody rather than destroying parts of their village and killing civilians.  This story isn’t unique, and it takes genius not to recognize how these policies further imperil both innocents and ourselves.

Even the non-partisan Brookings Institute recently warned that Trump may have the means, militarily or otherwise, (but not necessarily the mind) to finally

think seriously about
ending North Korea’s
nuclear ambitions by
creating a new order
in Northeast Asia.

Consider this in light of Chomsky’s aforementioned comments from a Democracy Now interview in April :

no matter what attack it
is, even a nuclear attack,
would unleash massive
artillery bombardment of
Seoul, which is the biggest
city in South Korea, right
near the border, which
would wipe it out, including
plenty of American troops.
That doesn’t—I mean, I’m no
technical expert, but as far
as I can—as I read and can
see, there’s no defense
against that.

In other words, stray too far into that dark place in which Kim Jung Un feels no escape, and the human cost could be tremendous.  Is there an alternative?  One need only read history, a sample of which I’ve written here, to know that America typically preaches peace and diplomacy, yet we maintain self-proclaimed nuclear first strike power, occupy over 800 military bases in 80 foreign countries as reported by The Nation in 2015, and have committed the supreme crime of aggressive war innumerable times just since the second world war, generally arguing publicly the desire to sue for peace, to supplicate the needy in humanitarian crises, or, earlier on, simply saying nothing.

Freedom isn’t Free, But War Won’t Buy It

It turns out that war fails to improve our freedom, as we’ve argued repeatedly here echoing the writings of Howard Zinn, Noam Chomsky, Glenn Greenwald, and Amy Goodman : dedicated resistance and a cohesive, powerful labor movement have so far proved to be sufficient, if not essential to the civility and freedom we enjoy in the modern era.  Swanson argues, alongside them, that war historically always has the opposite effect, reducing freedom while fomenting unrest and division.  One need only look at the various wars to discover that many dissenters have gone to jail, including Swanson’s historical doppelganger Eugene Debs; Debs encouraged antiwar speech during World War I.  War resisters during the Revolutionary War faced violence, confiscation of property, murder, and expulsion to Canada.

During World War II, the government imprisoned Japanese and German Americans.  My grandparents worked at Camp Howze, a POW camp near my hometown of Gainesville, Texas.  Woodrow Wilson argued during World War I that “disloyal” dissidents

had sacrificed their
right to civil liberties.

We can certainly recall suppression of resistance to Vietnam, and the immediate passage of the fascist PATRIOT Act upon the second 9/11.  The point is, not only does freedom not flourish under war, Swanson argues that it cannot flourish.  Learning the former must precede the latter, and Swanson articulates a very strong argument for both.  So what of the good wars?

Apologists for War

Most rational Americans have come to believe that war is primarily a tool for control.  During the Vietnam and Korean Wars, Americans were conscripted to fight for what the Pentagon Papers revealed to be control of the “tin, oil, and rubber“, among other economic objectives. The Project for a New American Century (PNAC), mentioned in earlier posts, was a late twentieth century neo-conservative think tank whose manifesto stumps for conquering Iraq, Afghanistan, Libya, Syria, and Iran in order to secure American interests in the region.  Swanson raises the intriguing coincidences of both Iraqi and Libyan leadership electing to deny the dollar preeminence in oil purchases, Hussein opting for the euro and Gaddafi the gold dinar, both immediately preceding our violent intervention; certainly intelligence agencies in America and elsewhere knew very well Saddam had no weapons of mass destruction remaining.  Lost in this is that Saddam offered to exile himself, handing Iraq over to NATO provided he could abscond with one billion dollars; considering the trillion dollars the war has cost, wouldn’t that have made more sense?

Swanson reminds us of Eisenhower’s admonishment of the rise of the military industrial complex, a largely unaccountable cadre of business and military interests hell-bent on self-sustainment in the face of an increasingly peaceful world.  Ironically, as Swanson points out, war doesn’t make market sense, as it would be more efficient to spend the money on renewable energy, infrastructure, education, health, and the like, even aside from the pesky problem of human life.

In any case, PNAC’s manifesto laments that we must

fight and decisively
win multiple, simultaneous
major-theater wars

to preserve the so-called “Pax Americana”, conceding that the American public no longer will tolerate protracted wars.  Despite years of carefully composed propaganda and rhetoric, the political elites have yet to convince the public that war with Iran is necessary.  Trump’s wild approach may prove fatal in this instance, as he, like power-mad elites preceding him, fumes when “enemy” nations comply with sanctions.  Nonetheless this reluctance speaks to the increased civility of society.

On the other hand, Americans continue to support war mythology with the firm belief that at least in the Revolutionary War, the Civil War, and World War II, we defeated tyranny, slavery, and fascism, respectively.  We’ve already addressed the farce that is the first of the three above.  The Civil War was easily preventable through diplomatic means, though the times were different.  Rather obviously, however, the union states simply could have attempted to purchase the slaves, perhaps to the tune of one billion dollars, as opposed to spending three billion to destroy countless cities and leave a buyer cultural resentment still harming us today (in an upcoming article, I’ll try to address the notion of white privilege and the legacy of slavery.)  If the north had really wanted a peaceful settlement, it could have permitted secession and encouraged slaves to flee into the free states.  The dirty secret is that the north no more wanted freed slaves than did the south.  In any case, Swanson debunks these wars with ease, leaving us with the last ace of the warmonger : the second world war.

Swanson Takes Down the “Good War”

For brevity, I’ll leave most of Swanson’s arguments about the so-called “good war” to the reader.  But suffice it to say that America was already in the war long before the Japanese bombed Pearl Harbor, actively cutting off supply lines and providing weapons and equipment to the European allies.  Truman famously quipped on the Senate floor that we should

help the Russians when
the Germans are winning
and the Germans when
the Russians are
winning[... s]o each
may kill off as many
as possible of the other.

Are these the words of a man pursuing peace and freedom?

Swanson further argues means of preventing Hitler’s rise through a less ridiculous settlement than the Treaty of Versailles at the conclusion of the first world war, deescalation of his militarism through discussion and diplomacy, and rescue of the Jewish refugees initially expelled from Hitler’s caustic, totalitarian empire.  Instead, we, along with Britain and France, isolated Germany, refused to aid the refugees, and in our case sold weapons to Britain and France while strengthening the Pacific navy, cutting off Japanese supplies in Manchuria, and conducting military exercises off the coast of Japan.  Americans actually held a rather favorable view of Hitler, as anti-Semitism was rampant among elite sectors here; both Joseph Kennedy and Prescott Bush, fathers of presidents-to-be, either held business dealings with or openly supported the Nazis even after America officially entered the war.  Fanta became Coca-Cola’s means of remaining in Germany, and Henry Ford placed a portrait of Hitler on his desk.  In fact, when Confessions of a Nazi Spy, a thriller starring Edward G. Robinson, premiered in Milwaukee, pro-Nazis burned the theater to the ground; even the far right Senators of the day wished to investigate Robinson and the film as Jewish propaganda angling for American entry into the war.

Enshrining the Holocaust only became important to the American political class with Israel’s invasion of Lebanon in 1967, an unsolicited but helpful gesture in advancing American hegemony.  Though there’s much to add, suffice to say the one good war killed over seventy million people, or equivalently twenty percent of our current population.  Was that really necessary?  We touched on the atomic bombs dropped in 1945 at the conclusion of the war.  Are we better off for creating them?

A Great Read

Like all of David Swanson’s books and articles I’ve read, he powerfully confronts the folly of pro-war propaganda and the arguments, lofty or low-brow, for the perpetuation of war.  He eloquently rearranges the pieces of the puzzle to expose the idiocy of the arguments advanced by the state in support of violence, such as this gem with respect to our government offering protection to people facing chemical warfare :

[k]illing people to
prevent their being
killed with the wrong
kind of weapons is a
policy that must come
out of some sickness
[... c]all it Pre-
Traumatic Stress 
Disorder.

I highly recommend this and his other works, as he, like the great activists before him, tells the truth.  His words are more prescient than ever before as we confront the problems of the twenty-first century.

 

The Conservative Nanny State : A Book Review Part Six : Small Business, Taxation, Public versus Private, and Roots of Mythology

In our concluding article analyzing Dean Baker’s The Conservative Nanny State, we touch on the role of the archetypal small business, taxation, and the persistent, seemingly immortal debate on private versus public infrastructure, all with respect to the pantheon of the mythology.

Small Business Blight

Baker argues that the small business occupies a unique, critical niche within the mythology : nanny state purveyors sell policy decisions often on the basis of how said policies affect small businesses in aggregate, based on the pervasive perspective that small businesses are a highly desirable feature of the economy.  Analysts across the political spectrum laud small business in editorial after editorial, such as left-leaning Huffington Post and right-leaning Forbes.  It’s so deeply embedded in our framework that to even ask whether small businesses are, in fact, better for the economy remains anathema.  Arguments range from job creation, financial independence, patent creation relative to big businesses, and the like.  Of course, we previously discussed whether patents really do represent innovation, to say nothing of encouraging it.

Before answering either way, Baker lists cases in which nanny state enthusiasts leverage the widely accepted propaganda to argue policy.  For example, Congress very nearly repealed the estate tax in the early years of George W. Bush’s administration, offering up the hapless small farmer as a would-be victim of the vicious “death tax.”  Baker argues reasonably well that the example is mostly nonexistent, owing largely to the zero bracket and the fact that most of the so-called small businesses affected are not genuine small businesses, but rather partnerships designated to be tax shelters, defined by the Congressional Joint Committee on Taxation.  The New York Times remarked in 2001 that the American Farm Bureau was unable to locate any families who lost their farms due to the estate tax.  The Center on Budget and Policy Priorities suggests recently with Donald Trump’s mad push for dissolving the tax that the true effect of repeal is shielding most inherited wealth from any taxation, as much accumulated wealth among those touched by the tax is untaxed income.  A similar argument applies to Trump’s insistence that most taxes, incidentally perhaps the only taxes he’s paid recently, should be lower to encourage economic growth.  Another interesting discussion on this topic is Nicholas Johnson’s article analyzing the actual effects of a 2012 tax break in North Carolina, promoted of course disingenuously as small business support.

In any case, Baker moves on to argue that the job creation precept of small businesses is actually misdirection, echoed later by The Fiscal Times : small businesses destroy perhaps as many jobs as they create, promoting uncertainty and churn in employment.  Further, he observes that tenure at larger firms is longer, benefits are better, and stability is greater.  More recently, a refrain from critics of the Affordable Care Act is the would-be damage to small businesses.  And yet the mandated requirements actually nudge employment quality in small businesses closer to that of larger firms.

The ACA debate hints at a larger argument that regulation inherently hurts businesses, reliably trumpeted by the conservative Heritage Foundation.  Of course, their arguments, promoted by debunked supply-siders, mandate we accept that a job is universally good, irrespective of the quality or pay.  Their predictable argument is that regulations

may be treated as "unnecessary"
if (1) the costs they impose
exceed the benefits they produce,
or (2) even though they produce
benefits that may exceed costs,
they do so in an unnecessarily
costly manner because of an
inefficient method or approach[.]

Their optimization strategy places money first, captured nicely by the following : if I successfully lobby the government to revoke that pesky “regulation” preventing me from lawfully confiscating my neighbor’s cache of groceries, I’ll save money.  Further, it is indeed inefficient for me to simply not have access to my neighbor’s food, as I have to obtain my own food otherwise.  How does this differ?  Multiply this argument into “externalities” such as dumping lead and other toxins into the water supply and relaxing safety regulations in manufacturing, and one begins to appreciate that more than the job is at stake.

Baker argues further that small businesses receive powerful nanny state protections, such as adjusted tax framework, reduced interest loans, lax safety protocols, minimum wage exemptions, and laughably ineffective self-disclosure regulation of environmental violations.  It turns out that the tax framework permits small business owners to deduct all manner of goods and services, perhaps required regardless of whether that person is a business owner (such as an automobile or a computer), costing the taxpayers.  Further, government subsidies for loans to failed small businesses can be staggering, described in Forbes and a few more hysterical right wing libertarian blogs.  That is, we the taxpayer foot the bill for unstable, mostly failed businesses who enjoy nanny state protections against labor, wage, and environmental regulation and means of pocketing breaks.  He correctly observes that citizens requiring TANF benefits to feed their children receive near universal excoriation while failed businesses and illegal deductions rarely enter the discussion, let alone suffer bad press.

Admittedly, small businesses contribute some desirable dynamism to the economy, but the usual question is whether they are an optimal instrument within free market or social experiment framework; if they were, they wouldn’t require such strong protections to succeed.

Taxes, Taxes…

Baker argues rather holistically against the ignorant perspective of nanny state promoters, that taxes are a voluntary donation.  I’ve listened for decades to family and friends bemoaning of the prospect of a single red cent of their hard-earned money finding its way to welfare recipients.  I remarked that the rate of welfare fraud, coupled with the infinitesimal fraction of discretionary spending moving into the hands of these people is virtually zero; money of higher orders of magnitude flows freely into the mass murder machine of the military and, as suggested earlier, giant tax deductions by corporations.  Tax evasion is rampant in the U.S., a partial list of which appears in Wikipedia; Baker cites a study by the IRS reported in the New York Times in 2006 demonstrating an escalation in high-dollar evasion.  It shouldn’t be a surprise that most evasion cases never reach prosecution.  What’s worse, as of 2006 thirty percent of federal taxes remained uncollected, meaning that if the evaders paid their fair share,

tax rates could be reduced
for everyone by twenty-five
percent, and the federal
government would have the
same amount money.

By contrast, if all TANF recipients, as the nanny state supporters like to suggest, got jobs and got off the government dole, we could reduce our tax burden by a whopping 1.4%.  The conservative nanny state mythology appears more and more to be a carnival mirror of stupidity.

More recently, Trump has stumped for lowering the corporate tax rates, arguing as expected that the current burden is overwhelming to American companies.  And yet the assertion, like most parroted by Donald, is patently false, as documented in April by the Center on Budget and Policy Priorities.  Corporate profits are growing, and the rich are getting richer.  How would reducing a largely unpaid tax burden help working people?  It’s worth remembering the the top individual income tax rate in 1944 was ninety-four percent for earnings above $200,000, or $2.5 million in 2017 dollars.  Innovation, economic growth, and a vibrant technology sector generated by state spending were humming along nicely.

Baker points out that this nanny state gentlemen’s agreement on evasion doesn’t extend to filers requiring the Earned Income Tax Credit (EITC), discussed by the New York Times; audit rates are readily available by income level from the IRS, documented by USA Today.  The gist is that twenty percent of those filing for the EITC receive requests for additional information, akin to a mini-audit.  By contrast, less that twenty percent of earners with income above $10 million ever receive an audit.

Baker continues with a discussion on internet sales, quite interesting in and of itself; suffice it to say that retail giants such as Amazon had escaped paying sales taxes because of ambiguities in managing purchases across state lines.  The public relations defense against self-disclosure was simply that the administrative burden was too high; this is patently false.  When I worked in Amazon Last Mile Logistics, we routinely handled varying jurisdictions in the company’s deliveries.  The complexity of operating in multiple geographies scales easily, as anyone familiar with the space should know.

Finally, he tackles the curious distinction between stock trading, casino gambling, and ordinary scratch-off and lottery tickets.  The taxation rates are astonishingly regressive, ordinary lottery wins being roughly thirty percent, casino gambling seven percent, and stock trading a brutal 0.003%!

Why is Private Better?

We’ve argued at length in previous posts about state capitalism, the economic system, despite all smoke and mirrors, under which we operate.  A pervasive argument of conservative pundits and nanny state babies is that private corporations can easily outperform public agencies because of waste intrinsic to their structure.  That is to say, without the pressure of profit mandates, shareholder backlash, and market principles, government agencies can profligately expend resources enriching themselves and preserving their positions.  By contrast, private organizations, we’re told, operate more efficiently with minimal largess.

I shouldn’t even have to quote statistics or studies to undermine this absurd notion, as anyone who’s ever worked in corporate America knows this simply isn’t true.  It isn’t to say that customer service, after a fashion, might be better in private agencies, as public agencies are generally quite underfunded, part of a scheme by conservatives to “starve the beast,” a notion to which we’ll return.  But this suggests not that all products and services are more sensibly driven by markets, as the destructive nature of markets is well-understood (and there would be no nanny state if this weren’t the case), rather perhaps customer service itself is better left to private organizations.

Donald Kettl, professor at the University of Maryland, penned an interesting op-ed in Excellence in Government, arguing a dual blame to so-called liberals and conservatives : liberals forgot to work out the details of their big ideas, and conservatives have actively, successfully fought to starve and dismantle the administrative state, an oft-mentioned strategy in connection to the recently fired Steven Bannon.  I’d disagree on some of the terminology, but Kettl correctly argues that the political left in this country ceased to operate among the political elites many decades ago.

Baker’s key arguments are that Social Security and Medicare operate on remarkably low overhead, as marketing and monstrous compensation packages for executives simply don’t exist.  He goes on to sketch an argument we’ve mentioned previously, that health insurance ought to be nationalized for the sake of the population.  As David Swanson so aptly put it, Americans can discover, oddly, that other countries exist, and that they’re leveraging universal health insurance programs, as Physicians for a National Health Program have long advocated.  We need not repeat all the arguments here, but as Noam Chomsky so often describes our current, fragmented joke of a system, it’s

an international scandal.
It’s roughly twice the per
capita costs of comparable
countries, and some of the
worst outcomes, mainly because
it’s privatized, extremely
inefficient, bureaucratized,
lots of bill paying, lots of
officials, tons of money wasted,
healthcare in the hands of
profit-seeking institutions,
which are not health
institutions, of course.

Considering, as we have previously, that virtually all technology which we take for granted originated in the state sector, and that no private agency would underwrite such long term investments, it should be glaringly obvious the role the nanny state plays in generating technology, then handing it off to private interests once it’s become marketable.  The nanny state mythology, astonishingly, convinces even highly educated people that the market somehow spins all of this from whole cloth.

Summary : Why A Nanny State?

In summary, Dean Baker’s book is an awesome read, filled with powerful arguments of which we can only scratch the surface.  He has many more recent works with additional facts and figures worth perusing, but The Conservative Nanny State is a primer for many a discussion on the proper role of government in the economy.

So why does the mythology tickle so many ears?  I grew up hearing so much of the rhetoric, and I’ll admit it seemed reasonable at the time.  With much research, I must confess the answers are quite disturbing.  As Chomsky mentions quite frequently, the rise of the public relations industry under Edward Bernays was a product of the remarkable success of the Department of Information (later the Ministry of Information) in convincing not particularly violent citizenry into warring against their white brethren in World War One.  Walter Lippmann and other premiere intellectuals of the day discovered that the power to “manufacture consent” was the only tool remaining in the toolbox, as violence eventually won’t work in an increasingly democratic setting.  Relegating the rabble, the “meddlesome outsiders” to passive spectatorship in policy and active villainy in war is a monumental achievement, and crucial to this effort is a series of scares, beginning with Wilson’s Red Scare, the propaganda around Cuba’s communist roots of the 1920s mentioned earlier, McCarthyism, and the like.  I can remember my uncle reminiscing about listening to records of Ronald Reagan during elementary and middle school, in which Ronnie explained that universal healthcare is a thing of the communists.  Of course, he neglected to mention that his government positions ensured glorious medical care well into his sad last days of Alzheimer’s dementia; unfortunately, he neglected to offer an appropriate avenue for poor white brethren to secure similar, reasonable old age accommodations, to say nothing of the black and brown.

The gist is that the conservative nanny state mythology is a remarkable feat of propaganda and avarice, designed effectively to persuade poor spectators into stumping for obscenely wealthy men with whom they’ll never associate.  Rush Limbaugh, one of the principal advocates for said state, has argued that income mobility ensures egalitarianism in our system.  Would that his variant of egalitarianism cure his stupidity.

The simplest explanation, as William of Ockham once suggested, might be correct.  Power and money has enabled an overclass to systematically hijack the debate, reframing policy discussions in their own image, just as is suggested in the Powell Memorandum.  As for the book, read it.

The Conservative Nanny State : A Book Review Part Five : Richly Bankrupt and Terrific Torts

In our penultimate article in the series on Dean Baker’s The Conservative Nanny State, we examine his discussion on bankruptcy, so-called tort reform, and “takings.”

Bankruptcy : A Nanny State Protection for Me But Not You, But Where is Personal Responsibility?

Bankruptcy has long been a feature of Anglo-American law, owing to creditors’ need for a lawful, orderly way of involuntarily dispossessing debtors, all merchants, of properties and freedom in the late sixteenth century.  In the United States, most bankruptcy laws passed within the first half of the nineteenth reflected this philosophy, exhibited in court battles wherein state-directed debt relief remained under debate.  With the ascent of the Whig party in the 1840 elections, the federal government established voluntary bankruptcy protections in an 1841 act; the government repealed the act a mere two years later, but the philosophy clearly was shifting.  By 1867, debts of the confederate states left northern states clamoring for more legislation.  It turns out that the many pushes for changes to bankruptcy laws often follow an economic downturn, generally at the request of large creditors; this ping-pong persisted well into the twentieth century, with repeal efforts following any slight accommodation for debtors.  In 1910, Congress offered corporations voluntary mechanisms for voluntary debt discharge, something fought vehemently by creditors hoping for harsher provisions.  For twenty years, the battle waged on, edging finally into the Great Depression during Herbert Hoover’s administration.  As expected, creditors and debtors alike rushed to the nanny state for new protections in light of unforeseen, devastating economic realities.  By 1938, sufficient support was available to pass the Chandler Act, named for its primary advocate Congressman Walter Chandler, Democrat from Tennessee, reviewed in an article appearing in The Fordham Law Review in 1940.  Though we’ll pass over the technical details, suffice it to say the Chandler Act represented a study-driven overhaul aimed at updating the Nelson Act of 1898.  For forty years, minor changes appeared here and there, until the passage of the Bankruptcy Reform Act of 1978, a culmination of ten years of hearings and studies, replacing the Nelson Act entirely.  In the years to follow, Congress continued adjustments here and there, representative of the dual difficulties in corporations and creditors fighting to further ensnare debtors while often suffering the same fate themselves.  The complete history is quite interesting, and one can find a worthy read in Charles Jordan Tabb’s The History of the Bankruptcy Laws of the United States.

Dr. Baker’s discussion focuses more on the most recent overhaul of bankruptcy law, the constructively-named Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.  Nanny state apologists suggest individuals who file for bankruptcy are irresponsible spend thrifts who deserve to suffer, but shareholders can escape such difficulties through mechanisms described above.  Well understood is that medical bills sit nicely in the plurality of causes, as described in a report in 2013 by CNBC.  Baker frames the issue quite effectively, describing the large jump in total credit card debt from $100 billion in 1980 to $800 billion in 2004, the time of his writing.  Value Penguin reports more recent statistics gathered from the Census Bureau and the Federal Reserve, exhibiting a peak of $900 billion at the time of the financial crisis, a slump, but later exceeding the 2004 level as of 2016.  Baker argues that the explosion of this kind of volatile debt indicates

that the risk of default on these
loans was not a serious obstacle
to credit card lending[.]

Further, according to Jeremy Simon while writing for CreditCards.com , the so-called bankruptcy reform passed in 2005, misleadingly called “Bankruptcy Abuse Prevention and Consumer Protection Act,” increases the deluge of credit offers to recent filers of bankruptcy : the longer waiting period and tighter restrictions for a subsequent filing offers these sharks the opportunity to bathe in the blood of consumers.

Baker attacks the absurd bankruptcy reform from a different perspective : first, true proselytes of the free market should not want government protection for lenders who make bad choices; in a free market, they would naturally default themselves.  Second, this very protection expands conservative nanny state’s role in the economy rather significantly by empowering it further as a debt collector, contravening further the argument that smaller government is a genuine objective.  As suggested above, the leap in national credit card debt in recent years can’t possibly follow the capacity for repayment, so these lending institutions generally need not concern themselves with stated objectives of offering credit; upon failure to collect bad debts, they can, as Noam Chomsky says, “run cap in hand to the nanny state.”  The bankruptcy bill is one such startling example, though the ugliest hypocrisy of all followed with the bank bailout during the financial crisis : banks need the government to help them crush consumers, but when they run aground, they require a big, powerful state to save them.

Any discussion on bankruptcy leads to consideration of the International Monetary Fund (IMF), a financial agency designed to protect financial institutions in international exchanges.  Baker describes some of the history, particularly how the IMF originally regulated exchange rates under the Bretton Woods system until 1973; the IMF thereafter played the role of international debt collector.  We’ve discussed Bretton Woods before, an international framework designed by Harry Dexter White and John Maynard Keynes in 1944 to prevent repeats of the Great Depression.  For nearly thirty years, the United States experienced tremendous economic growth with no recessions.  In 1971, Richard Nixon eliminated the dollar’s status as a commodity currency, or currency based on gold, transmuting our bills into fiat currency, or currency by governmental decree.  With that and other unilateral decisions in what historians call Nixon Shock.  Though a more thorough treatment of the history of Bretton Woods is instructive (see Chomsky’s discussion), suffice it to say that both purposes of the IMF serve at the pleasure of the nanny state, though the latter day purpose as debt collector serves the financial sector more directly.  Free of the Bretton Woods regulatory apparatus, the financial sector has become extremely wealthy with unrestricted flow of capital diminishing regulation.  The IMF, to Baker’s point, imposes harsh austerity (discussed in a previous post) on nations if they refuse to meet terms imposed by creditors; that is, the IMF protects collectively foreign investors, much like that institution we’re taught is so destructive : the union.  Baker says it best, arguing that

[i]n a free market, there is no place
for a supranational institutional
like the IMF to rewrite the rules to
ensure that creditors are protected.

In a more competitive environment, any creditor could loan any nation needed funds, easily undercutting adversary firms with lower interest rates.  Creditors instead unionize through the IMF to drive nations into bankruptcy.  Baker argues that risk is the business of lenders, and they should suffer the consequences for making bad choices.

Fat Lawyers Gave You McDonald’s Coffee Lawsuit

Baker takes up the topic of tort reform, a favorite windmill the quixotic chicken-littles of the nanny state frequently fan in the faces of the public.  We’re told frequently that greedy lawyers and ne’er-do-wells are robbing hardworking industrialists blind, and that the nanny state must artificially curtail the requisite damages paid by these innocent business elites.  It’s most reminiscent of Ronald Reagan’s inane, racist complaint that “welfare queens” are driving “welfare Cadillacs”.  In fact, the conservative nanny state caters to a host of fascinating topics losing the good hard-working conservatives hours of sleep at nightly, including criminal innocence-by-insanity, lazy people loafing off disability benefits, and, most recently, insistence that illegal immigrants are committing vicious, hideous crimes, a blatant and highly destructive lie repeated ad nauseum by Donald Trump.  It turns out, quite expectedly for anyone willing to devote a paltry few minutes to research, that none of these would-be blights on society actually exist to any appreciable extent.  In fact, tax fraud by wealthy elites is a far more pervasive problem than any of the strawmen aforementioned.

And yet these myths leave an indelible imprint on the impressionable minds of the nanny state’s protectors.  Take torts for instance; Baker describes two stories I remember growing up hearing, the black woman who sued McDonald’s for burning her with coffee, and the story of a property owner sued by an intruder who was injured on the owner’s property in the course of a burglary.  Astonishingly powerful is the propaganda surrounding the cases, as we in a poorer segment of society literally would fall over ourselves to defend the honor of McDonald’s and this property owner.

I happened upon the McDonald’s case again during a legal presentation at Southern Methodist University; the legal scholar offered a piece of the case I hadn’t heard in my household : the woman only asked for medical coverage from McDonald’s, as they had received hundreds (more likely thousands) of complaints through the years that coffee served at 180 degrees Fahrenheit is dangerously hot.  Baker points out one more piece of the puzzle : McDonald’s served their coffee at such a high temperature to mask the bad taste of a cheap brew, thereby increasing profits while distributing the cost to burned consumers.  Again, this is reminiscent of the Ford Pinto case we discussed previously.

The Consumer Attorneys of California offer a good read on the McDonald’s case; suffice it to say a 79 year-old woman spilled the coffee on her thighs, burning herself so badly that she required skin grafting.  McDonald’s, putting customers first, refused to help her until a court compelled them to make up for their mistakes.  The case of the burglary really was about a high school student climbing on the roof of a gym on school property, and a skylight, painted over, gave way when he stepped on it.  A court correctly asserted that public facilities ought to have better protections in place.

Both of these cases are rare instances in which a court awards damages for torts, or wrongs leading to civil liability.  It turns out that less than three percent of civil cases ever lead to a jury trial, as most are decided much earlier, generally through settlement.  It’s revealing to consider a favorite of the tort reformists, medical malpractice.  In the last four decades, tort reform aimed at streamlining the malpractice liability system has managed to shift larger and larger profits into the pockets of insurance companies; Kenneth Thorpe, professor at Emory, published an article in Health Affairs discussing trends in states adopting caps on medical damages, finding a statistically significant decrease in premiums but inconclusive on whether the liability system is genuinely deterring substandard care.  Further, it might come as a surprise that few victims of malpractice actually sue; a Harvard study published some years ago found that only one in eight victims ever leverage the court system.  More recent work appearing in Medscape suggests the number is closer to one in twelve, and that doctors have at their disposable proven means of reducing the probability of lawsuits.  Interestingly, members of my family have had opportunities here and there to sue for malpractice, yet they never did, often citing the “litigious” nature of society, a win for propagandists.

Baker continues the discussion with a partial explanation of the more general costs associated with the current legal system, and that standardizing law and removing much arcane procedure could drive down prices.  But he contends, I think correctly, that limiting fees for lawyers’ services contravenes market ideology.  Fighting corporations is nasty business, as anyone who’s ever had to deal with a medical insurance company knows.  And despite what nanny state conservatives may tell us, the deck is very heavily stacked in their favor.

He also points to the importance of punitive damages, in that suing and punishing a corporation for endangering the public is, in fact, a public service.  It’s hard to even quantify the damage done by McDonald’s broiling hot coffee policy, all in the name of profits.  I’m reminded of all the time one waits on hold when trying to reach customer service for any company, be it cell phone providers, internet providers, or, as mentioned before, insurance companies.  In the interest of profits, these companies understaff their departments, using badly recorded music and automated menus to delay customers for several minutes, sometimes hours.  These hidden costs, or externalities, don’t directly figure into their budgets, as someone else pays that price.  Punishing them for bad service seems perfectly in keeping with market ideology.

Takings : Gimme More, Take Less…

Baker ends the chapter with a short discussion on “takings,” or costs exacted by the government in exchange for property confiscation or laws and regulations which reduce the value of property.  That is, so-called property owners, or corporations, might be quite unhappy when the government enforces regulation limiting how much they can pollute on their property, perhaps cutting down profits or lessening the value of owning the property.  And yet, when government intervention substantially increases the value of property through infrastructure and habitat clean-up, property owners happily accept the benefits without a direct repayment to the taxpayer.  For instance, farmland along the major interstate near my hometown, Interstate 35, was not particularly valuable before the interstate was constructed.  Commercial zones along the interstate are quite a boon for landowners, as gas stations become quite important along long stretches of highways.

The major point here is that nanny state conservatives dislike any regulatory action diminishing property value but freely accept every last penny they can bilk from beneficial government action.  Baker nicely suggests that true devotees of market ideology ought to accept freely that lessening of property values due to government intervention is a cost of doing business, and if they were savvier customers, they’d have foreseen it, harkening to the dogma of personal responsibility they hold so dear.

Next time, we’ll conclude this series with a brief summary of Baker’s discussion on small businesses and taxes.

Marking a Solemn Week in A Sea of Solemnity

This week marks the seventy-second anniversary of an event showcasing both the ascent of the human species to the top of the evolutionary ladder and its descent into what could be the darkest and final chapter of our roughly 200,000 year run on this planet : the bombing of Japan by the United States with nuclear weapons.

On August 6, 1945, the United States Air Force deployed the atomic bomb over Hiroshima, incinerating a few thousand acres of densely populated city, killing anywhere from 70,000 to 100,000 people in the blast; perhaps another 70,000 died from exposure.  On August 9, the U.S. continued by dropping a plutonium bomb on Japan over the city of Nagasaki, killing maybe 40,000 instantly and another 40,000 from the aftermath.  American apologists offer that these mass murders were essential in ending the Second World War while minimizing Allied casualties.  Certainly, that’s what I learned growing up, the pertinent question being whether this is true; it wasn’t until I took world history under Dr. Pat Ledbetter, longtime activist, jurist, and professor, that I ever heard the decision to deploy the atom bomb against Japan come into question.

Quite relevant today is Donald Trump’s quite harsh rhetoric toward the nation of North Korea as reported by the New York Times.  His outrageous words,

[t]hey will be met with fire
and fury like the world has
never seen[,]

as usual exhibit the uncensored, grotesque gaffes we’ve come to expect from him.  They also eerily echo similar words by Harry S Truman, president at the conclusion of the Second World War :

[the Japanese can] expect a
rain of ruin from the air,
the like of which has never
been seen on this earth.

The parallel may have been on purpose, as Trump seems to fancy himself the most accomplished president of our time, and Truman, in Americana, is widely regarded to have successfully ended the single most destructive conflict in history.  Trump can rest at ease spiritually, according to “faith leader” Robert Jeffress : contravening Romans chapter twelve’s directive to refrain from repaying evil for evil, he suggests that God’s instructions don’t apply to the government, and thus this same, loving “god” has bestowed upon Trump license to obliterate North Korea.  Certainly some hearts, are indeed, “desperately wicked.”

Though the philosophies of extremist devotees of Trump might not be all that surprising in their rapacity and blood-lust, the the claim that the atomic bombs were necessary to save American lives at the conclusion of the second world war, is, in fact, propaganda.  It turns out that the Japanese had suggested a surrender months before the bombs landed, asking only that they keep their emperor, largely a figure head and cultural symbol.  Washington refused, despite General Eisenhower, among others, urging Truman that

it wasn't necessary to hit them
with that awful thing … to use
the atomic bomb, to kill and 
terrorize civilians, without even 
attempting [negotiations], was a 
double crime[.]

Additionally, Admiral William Leahy, Truman’s chief of staff, apparently argued that

[t]he use of this barbarous weapon…was
of no material assistance in our war
against Japan[;] [m]y own feeling was
that in being the first to use it, 
we had adopted an ethical standard common 
to the barbarians of the Dark Ages [...] 
I was not taught to make wars in that 
fashion, and wars cannot be won by 
destroying women and children.

The Nation suggested in an investigative report released on the seventieth anniversary of the bombings quite accurately that we Americans need to face the ugly truth that the war was ready for a bloodless conclusion before Truman ordered the mass execution of hundreds of thousands of people.  Military head after military head uniformly agreed that the bombing was unnecessary, raising the more serious question of why one would wreak such horrendous havoc unnecessarily on civilians, and why no one exacted a political price for it.

One can easily point to an incredible misinformation campaign demonizing the Japanese as subhuman, feral monsters, documented by Anthony Navarro in A Critical Comparison Between Japanese and American Propaganda during World War II.  He offers a critique of both sides, but the imagery is striking.  Lingering resentment about Pearl Harbor eased propagandizing Americans, despite the attack being retribution for America freezing supply lines in Manchuria and conducting war exercises a few hundred miles off the coast of Japan, facts conveniently missing from the American consciousness.  We Yankees, perhaps, simply didn’t think the Japanese deserved to live.

It’s reminiscent of the euphoria when Barack Obama announced that Osama bin Laden was dead, murdered by a special operation in Pakistan which incidentally risked nuclear war; elite media and governments alike believed murder of a suspect without a trial was a monumental achievement, documented on Wikipedia‘s summary of official statements.  It seemed lost on interested parties that constitutional protections, inherited from Magna Carta, simply don’t matter in certain cases where the state deems them unnecessary.  I myself was stunned at the hysterical outpouring of happiness on Facebook and other social media.  I found myself nearly alone asking whether the dissolution of basic human rights in the case of a defenseless suspect made any sense.  It’s true that if he were actually guilty of masterminding the terrorist attacks on September 11, 2001, his was a vicious, malevolent crime.  But then again, Harry S Truman, Dwight D. Eisenhower, John F. Kennedy, Lyndon B. Johnson, Richard Nixon, Ronald Reagan, George H.W. Bush, and George W. Bush committed atrocities, uncontroversially, so far off the spectrum by comparison that it’s impossible to even imagine, documented by Noam Chomsky.  Standing next in line are Barack Obama with the drone assassination campaign, Bill Clinton in Serbia, and, yes, even dear Jimmy Carter in complicity in the Indonesian invasion of East Timor under Suharto, documented by Joe Nunes.

In any case, historian Hanson Baldwin argued in The Great Mistakes of the War that Washington’s “unconditional surrender” demands needlessly cost lives and lengthened the duration of the war; he wrote

[b]ut, in fact, our only warning
to a Japan already militarily
defeated, and in a hopeless
situation, was the Potsdam demand
for unconditional surrender issued 
on July 26, when we knew Japanese
surrender attempts had started.

Even the conservative Mises Institute editorializes that the bombing was one of the greatest crimes ever committed; John Denson argued in The Hiroshima Myth that the bombing was knowingly unnecessary.  In a more recent article, Ralph Raico continued the critique with a quote from physicist Leo Szilard, one of the originators of the Manhattan project :

[i]f the Germans had dropped atomic
bombs on cities instead of us,
we would have defined the
dropping of atomic bombs on
cities as a war crime, and we
would have sentenced the Germans
who were guilty of this crime to
death at Nuremberg and hanged them.

Dr. Szilard was making the obvious point that what evils others do seem to resonate while our own crimes either languish in the vat of forgotten history or simply cease to be crimes.  I’ve long argued that if Hitler had won the war, we would have eventually either forgotten his crimes or exalted them; after all, isn’t this precisely what we’ve done with Truman and the atomic bombs, Jackson and the Trail of Tears, Washington and the extermination of the Iroquois in the Sullivan expedition, and so on.  At worst, state apologists would argue that these events, like the tragedies of the Vietnam and Iraq Wars, were perhaps strategic blunders rather than the more deserved casting of “fundamentally immoral,” a description with which 52% of Americans surveyed in 1995 by Gallup agreed; that of course requires the events to even remain in public consciousness.

Returning to the atomic bombs dropped in 1945, Japanese historian Tsuyoshi Hasegawa summarized a lengthy search through official Japanese records, communiques, and memoranda in a 2007 article appearing in The Asia Pacific Journal, titled The Atomic Bombs and the Soviet Invasion: What Drove Japan’s Decision to Surrender?“,

what decisively changed the views
of the Japanese ruling elite was
the Soviet entry into the war [...]
[i]t catapulted the Japanese
government into taking immediate
action [...] [f]or the first time,
it forced the government squarely to
confront the issue of whether it
should accept the Potsdam terms.

That is, the overwhelming evidence is that the Japanese military elites acceded to the Potsdam requirements because of fear of Soviet aggression, further undermining the assertion that the nuclear bombs ended the war.  The hideous irony is that the Allied forces permitted Japan’s emperor to remain in place at the time of surrender, the only condition the Japanese leaders required in their earlier attempts.

The historical question is whether the Japanese really would have surrendered; I’ve unfortunately seen monstrous commentary online to this effect, suggesting that hundreds of thousands of lives were easily forfeit next to a demand made by the Allied leadership eventually tossed by the way side.   If there were even a chance for peace by accepting what really was a trivial request by comparison to the massive loss of life to follow, shouldn’t we, as activist David Swanson often suggests, give peace a chance?

Establishing that the dropping of the bombs wasn’t necessary to end the war seems academic; further, we know now the architects of said wanton decision were even aware it was unnecessary.  So why carry out such an action, as we asked earlier?  It turns out that the answer is akin to why a child might pull wings of of butterflies : just to see what happens.  Echoed later by Deputy Chief of Mission Monteagle Stearns in Senate testimony about escalating the bombing of civilians in Laos after Lyndon Johnson ordered a halt on the bombing of North Vietnam in 1968, the rationale boiled down to

[w]ell, we had all those planes
sitting around and couldn’t
just let them stay there with
nothing to do.

Further, Truman felt a display of force was necessary to place the tenuously-held alliance with Moscow on notice, intended to restrict the Soviet sphere of influence once the spoils of the Second World War became available, as Howard Zinn argues with much historical evidence in his final book, The Bomb.

The myopic jingoists over at The National Interest argue otherwise, suggesting the savage butchery of hundreds of thousands was an understandable price to pay :

would even one more Allied
death have been worth not dropping
the bomb, in the minds of the 
president and his advisors, after
six years of the worst fighting
in the history of the human race?

Tom Nichols goes on to argue that Truman would have faced impeachment if he’d revealed the existence of the bomb later to war-weary Americans, and that they would have thirsted for blood if they learned of a more expedient conclusion.  His argument is approximately the same as that from a propaganda piece from The Atlantic published in 1946, seventy years earlier : physicist Karl Compton argued, seriously if you can believe it, that the Japanese wouldn’t have ever surrendered, as a “well-informed Japanese officer” told him

[w]e would have kept on fighting
until all Japanese were killed,
but we would not have been
defeated[.]

Both arguments are absurd, as Americans can easily learn that a more expedient, less destructive conclusion was available as of May 1945, and yet only a few of us in the margins believe Truman should have faced a war crimes tribunal.  In a similar vein, the Taliban in Afghanistan offered to hand over Osama bin Laden, provided we offered him a fair trial and not continue to bomb their country.  Would they have?  We’ll never know, as Bush scoffed in his repulsive drawl, “We know he’s guilty.”  But then again, what is a couple hundred thousand Afghans, or 200,000 Japanese lives to America-first chauvinists, a question now coming to haunt us with Trump’s incisive, menacing rhetoric?

As we’ve discussed previously, nuclear war is one of two existential threats looming over human civilization, both of which the Republican party has committed to accelerating : escalate both ecological catastrophe and the growing atomic maelstrom.  Trump’s threats toward a small nation with whom we can genuinely pursue peace imperils millions of lives and risks war with both China and Russia.  Our series on Cuba aims to demonstrate that harsh sanctions, imperialism, and aggression universally backfire, as one can see with one example after another in our history, and to further expose the many near-misses the nuclear age has wrought on a hapless species, many of which appear in The Bulletin of Atomic Scientists, gatekeepers of the Doomsday Clock.

So during this solemn week, let’s remember that history can repeat itself if we allow it.  We Americans can stop Trump and the warmongering political elites, if only we organize and resist.  Some decent references on getting involved to move us to a nuclear-free world are Waging Peace, the Campaign for Nuclear Disarmament, and the Simon’s Foundation.

We’ll close with words from the only officially recognized survivor of both nuclear blasts, Tsutomu Yamaguchi :

[t]he only people who should
be allowed to govern countries
with nuclear weapons are mothers,
those who are still breast-feeding
their babies.

 

The Conservative Nanny State : A Book Review Part Four : Demonized Unions and Glorified Patents

Continuing our series analyzing Dean Baker’s The Conservative Nanny State, we’ll touch on a few key features quite effective in funneling wealth upward with no obvious systemic advantage : undercutting of collective bargaining and bestowal of monopoly status for intellectual property.  Baker argues, astutely, that neither of these features really make sense in a free market system, as collective bargaining is a market-based strategy for assuring at least a living wage for tradespersons vying for limited jobs, and government-conferred monopolies are illogical when producing, say a life-saving drug, is incredibly cheap.

Repeat After Me : Unions are Evil, Unions are Evil…

Baker touches briefly on elite hostility to organized labor for mid-to-lower income tradespersons, arguing that it’s an important feature of the conservative nanny state.  It’s certainly easy to see why, as trade unions, as we’ve discussed previously, generated most of the benefits we derive from employment, including paid holidays, vacation, healthcare, weekends off, and the like.  Yet the prevailing sentiment is often quite negative, as documented by Gallup since 1936.  Even in my own work experience have I witnessed the effects of this propaganda.  In working for the aforementioned defense contractor, I remember a strike executed by union members when the parent company chose to slash benefits.  Coworkers scoffed at and mocked the picketers, bemusing of the scabs and the internal contortions to cover the labor loss.  I heard internally that an upper level manager actually physically assaulted one of the picketers after a heated exchange.  The strike failed, the union workers sustained a more undesirable benefits package than had been offered previously, a remarkable victory for anti-unionists among the elites.

My own personal experiences in corporate America offer further revealing data regarding elite hostility toward unionization : both in working for corporate Uber and Amazon, I encountered many of the low wage employees (dubiously mislabeled as free contractors) among the drivers, cabbies in the case of Uber and delivery drivers in the case of Amazon.  I met probably seventy drivers while working for Uber, as the company would spring for free Uber rides home if I remained in the office past ten o’clock at night.  Though the drivers were understandably reticent to discuss with me, a corporate employee at the time, their opinions on Uber’s downward pressure on their wages, I generally could ease them into opening up after I shared the long labor history of America with them.  The picture was universally bleak : living, breathing people trying to survive sharp increases in the cost-of-living in San Francisco found themselves in a harsh, highly competitive trade with a quite hostile corporate sponsor.  Uber routinely would fire drivers with little or no warning, all based on a very arbitrary rating system with very little means of disputing a bogus negative rating.  Uber also sharply cut wages on these drivers.  The picture among Amazon drivers was very similar : no benefits and fast firings were the law of the jungle, true even in more liberal democracies such as the United Kingdom.  I informed virtually all of these drivers I met that the only proven means of driving wages upward is collective bargaining through unionization, something the drivers tell me Uber harshly demonizes; see The Verge for a discussion on Seattle’s efforts to protect Uber drivers.

America’s sordidly violent labor history features an unusually sharp hostility toward trade unions for semi-to-unskilled labor, as they are harmful to profits.  A rather salient piece to the puzzle is the National Labor Relations Act (or Wagner Act) of 1935, conferring the right of private sector employees to organize unions and participate in collective bargaining; the National Labor Relations Board received special attention during my Uber employee orientation, as one of the chief legal officers lambasted the committee as desperate bureaucrats hell-bent on squeezing money out of the innocent drivers.  In remarkably effective legalese rhetoric, she argued that the NLRB is out-of-touch and irrelevant in a world where Uber drivers can nab a fortune in driving, thus, it’s a charity to classify drivers as contractors.  Though she aptly described the experience some of the earlier “contractors” enjoyed, an unnervingly large fraction of latter-day drivers never managed to attain this golden driver’s seat.  Certainly, Uber represents something of a revolution in ride-sharing, but why not support one’s workforce?

Returning more to the historical context, the Taft-Hartley Act of 1947 outlawed secondary strikes, strikes instigated by workers of one trade expressed in solidarity with another trade’s ongoing strike.  You read that correctly : a painter’s union cannot legally strike in solidarity with carpenters participating in a union strike.  Though there is much to discuss on the topic of organized labor (and we’ll touch briefly on a few of Baker’s further points momentarily), suffice it to say the corporate nanny state mythology somehow manages to convince highly-compensated workers that not only is labor solidarity unnecessary (the market argument), but that they themselves derive no protectionism from said nanny state or any other well-to-do analog of the trade union, the former of which is a remarkable feat of propaganda, the latter of which Baker quite powerfully decimates as we discussed earlier.

Patent Trolls and Copyright Cows : The Geese Laying Golden Eggs

Baker turns attention to two extremely powerful, state granted protections for individuals and corporations : patents and copyrights.  Again, conservative nanny state apologists might consider these instruments to be laws of nature, naturally forming optimal strategies in the fantasy land of free markets.  By contrast, Baker aptly describes them correctly as “government-granted monopol[ies].”  That is, an agency, be it individual, government, non-profit, or corporation, can apply for patent or copyright protection on an invention, idea, artistic expression, and so on, ensuring that agency time-limited monopolistic control over usage and sales.  The argument in favor of these anti-market practices is that they encourage innovation and creativity, generally socially positive notions.  In fact, the power derives directly from the U.S. Constitution : under Article I, Section 8, we have that Congress has the power

[t]o promote the Progress of Science and
useful Arts, by securing for limited 
Times to Authors and Inventors the 
exclusive Right to their respective 
Writings and Discoveries.

This power owes to the guild and apprentice system from the Middle Ages, Baker explains, as a means of increasing innovation and scientific discovery.  Yet, are these the most optimal means of doing so?  Certainly, executives of Merck, Pfizer, Apple, Google, Amazon, and a lengthy list of other companies are quite wealthy.  But do these state-guaranteed monopolies efficiently generate innovation?  My own background includes an understanding of the evolution of software development, and the open source standard (free and open to the public) has grown tremendously in popularity in recent years.  Well-known to software developers is the superior reliability in Unix-based operating systems relative to that of proprietary models.  It’s reasonably understood history that the biggest software firms in large part owe their success to IBM’s PC open architecture strategy, suggesting an open OS standard could have created a proliferation of competitive products in both basic kernel (OS) space operations and those in the user space.  Though we have many advances now in personal computing, much of the game-changing advancement has occurred either in the state sector (discussed in previous posts) or in highly competitive, less monopolistic settings.

Baker describes an interesting economic parallel : dead-weight loss is the difference between patent-protected and market-based prices, though he scoffs that his fellow economists find no fault with this loss with respect to pharmaceutical prices, despite their hostility toward the same loss incurred in tariffs.  Technical economics aside, Baker poses the critical question : are patents and copyrights the most optimal instruments of their kind for encouraging and rewarding innovation?

To answer the question, Baker points to a highly controversial beneficiary of the patent system : the drug research lobby.  If we are to believe conservative nanny state apologists, he argues, the patent system should be the most capable protection in assuring innovation in medical advances and lifesaving technology.  Patents account for a factor four multiplier in drug costs, meaning if a generic costs one dollar, the corresponding brand-name drug costs four dollars, according to the final Statistical Abstract of the United States, the 2012 edition.  (We could discuss the highly politicized, stupid decision to discontinue this long running report published by the U.S. Census Bureau, but we’ll defer for now.)  As of the publishing date of the book, the factor was three, meaning the divide has grown by thirty-three percent.  Pharmaceutical companies offer exactly the argument as described above, despite large fractions of profits wasted on marketing and executive salaries.  Overall, Baker reports $220 billion in drug sales in 2004, confirmed by the aforementioned report.  By 2010, this number grew to nearly $270 billion.

Because patent protection ensures higher drug prices than could otherwise be paid, literally millions of Americans each year skip medications to save money.  Harvard Health Publications reported in 2015 cites a survey by researchers Robin Cohen and Maria Villarroel that eight percent of all Americans fail to take medications as directed because of lack of money.  As expected, older and less well-insured Americans missed dosages in higher numbers, but astonishingly, six percent of Americans with private insurance skimped on their medications.  That is to say, the private insurance system, adored by conservative nanny state apologists, forces Americans further into poverty and costs too much.  A report in 2012 by The Huffington Post indicates that these pharmaceutical companies spend nineteen times as much on marketing as they do on research, suggesting that the huge windfall of patent protection isn’t really going to good use.

Baker points to an even more serious consequence of artificially ballooning prices : black market drugs.  A strategy comparable to “medical tourism,” discussed earlier, leads Americans to order potentially dangerous drugs from foreign countries.  This steady flow of both illegally and legally obtained medicines is completely expected under a system in which these millions of Americans self-report failing to take drugs for lack of money, a failure of the patent system.

Perhaps most damning is Baker’s argument with regard to copycat drugs, or drugs designed to mimic the behavior of a patented, available drug.  Pharmaceutical companies have discovered that hitching themselves onto bandwagons of popular, patent-protected drugs of high import (such as allergy, diarrhea, and heartburn medications) is extremely lucrative.  That is, rather than invest money and energy on new lifesaving drugs and technologies, they try to replicate something in the mainstream by tweaking a few formulas.  As of 2004, two-thirds of all newly approved drugs in America were copycats, according to the Food and Drug Administration.  That leads to a startling number with regard to where the research money goes : sixty percent of research dollars goes to such wasteful creations.  So sixty percent of medical dollars, private and public, do not promote innovation at all, because of the patent system.  Other inefficiencies of said system appear in a 2015 report by BBC : for instance, many drug companies employee “floors of lawyers” to fight in court for patent extensions, a strategy interestingly called evergreening.  Dr. Marcia Angell, former editor for The England Journal of Medicine, discussed in The Canadian Medical Association Journal drug companies copying their own drugs for patent extensions, an example being Nexium and Prilosec developed by AstraZeneca : the drug company hiked the price on the outgoing to migrate patients onto the incoming, hoping to retain marketshare once the patent expired on the outgoing.

The aforementioned pair of drugs are examples of enantiomers, or drug molecules equivalent in structure and form, one a mirror image of the other.  These arise naturally in the course of development, often with very similar physiological interactions; thus, the practice of patenting both separately is rather suspect.  In “Enantiomer Patents: Innovative or Obvious?” appearing in the Pharmaceutical Law & Industry Report, Brian Sodikoff, et al. discusses the legal standards in doing so, suggesting the patent system overly caters to the corporations.  A few other examples of double-dipping are Lexapro and Celexa, and Ritalin and Focalin.

It turns out that drug companies leverage several tricks in the spirit of the foregoing to stretch the lifetimes of patents, including

  • rebranding mixtures of existing drugs, such as Prozac and Zyprexa to obtain Symbiax,
  • morphing generic drugs into new drugs by adjusting dosages, such as Doxepin into Silenor,
  • repackaging an existing drug as is for a new purpose, such as Wellbutrin and Zyban, and Prozac and Sarafem,
  • creation of extended release variants of existing drugs by established mechanisms, such as Ambien and Ambien CR, and Wellbutrin and Wellbutrin XL,
  • changes of delivery mechanisms, such as Ritalin as a pill and Daytrana as a topical patch,

among others.  In each of these cases, big pharma manages to hike the price substantially, even when cheaper generics are available with adjustable dosages.  These corporations argue they should receive full patent protection as though they devoted the same amount of resources for researching the copycat as they did for developing a brand-new therapy from scratch, a preposterous claim. What’s worse, drug reps, or prettified agents armed with high discretionary credit routinely accost physicians, offering expensive samples and lavish luncheons for free; NPR reported earlier this year that the drug rep interaction significantly increases the number of costly prescriptions written by doctors.  Though we could discuss these inefficiencies and contradictions more, we’ll leave it at that.

By the previous arguments, we certainly can begin to believe that patents and copyrights probably aren’t the most efficient means of promoting innovation, as Baker correctly asserts.  So how does one promote innovation?  Baker suggests raising government investment in research, establishing a grant and prize system aimed at spurring innovation.  Researchers would strive toward successful development of lifesaving medical technology, competing jointly for grants to fund their work.  Upon successful innovation, they could receive prize money commensurate with the societal benefit.  Upon acceptance and approval, their contributions would become public domain, so drug manufacturers could compete on the open market for the cheapest way to produce the drugs, much like application developers could leverage IBM’s open architecture.  As Baker observes, this isn’t the only approach, but it certainly is worth trying, considering the current system is so remarkably wasteful.  Since the government confers the patents and copyrights for the public good, the government could ostensibly leverage other instruments to promote “the Progress of Science and Art.”

Next time, we’ll consider Baker’s arguments on bankruptcy, torts, and takes.

Shyam Kirti Gupta and Shyam Kelly Gupta contributed to this article. 

The Conservative Nanny State : A Book Review Part Three : Myths of Corporations and Truths of the Federal Reserve

Continuing our series of analysis on Dean Baker’s The Conservative Nanny State, we attempt to disrobe the corporation as the nanny state fraud it has become, and demystify the role of the Federal Reserve in profoundly affecting the livelihoods of low income earners.

In the Beginning, God Created the Corporation…

Baker offers quite a thoughtful analysis around the mythology surrounding corporations, a key feature of the conservative nanny state.  The typical argument is that corporations, free and independent, would follow the market harmoniously but for unnecessary, inefficient government interference; this laughable, demonstrably false assertion is an astonishing feat of propaganda, given even a slight historical context.

Helpful in this discussion is a few notes on the definition and history of what is this assumed-to-be essential feature of a market system : in Anglo-American law, a corporation, historically, was an organization created by a state-issued charter to raise capital for advancing some good-will state objective, such as building a bridge or paving roads.  Incorporation was a temporary status, as corporations generally (with a few notably understandable examples, such as in those managing railroads, trade, and shipping) dissolved upon completion of the state’s tasks appearing explicitly in said charter.  Charters of increasingly long duration appeared as the machine of war industry raged feverishly during America’s conflict with Britain in 1812, as discussed more thoroughly in Mansel Blackford’s The Rise of Modern Business in Great Britain, the United States, and Japan.

So if the corporate charter historically traces roots to some set of concrete state goals, why ought investors bother asking the government for articles of incorporation for other business endeavors?  After all, businessmen were free, as they certainly are now, to form partnerships to accomplish whatever financial objectives they chose.  It turns out that articles of incorporation offer something that private partnerships do not : limited liability, or state-conferred immunity for shareholders from both civil and criminal penalties, as well as a guarantee that personal losses cannot exceed the value of one’s investment in said corporation.  That is to say, I can invest, say, $100 in a corporation.  If the corporation commits any and all manner of illegality, I cannot to a large extent suffer any legal charge or punishment, unless I were actually “directly” complicit in the crimes.  More clearly, an investor is not liable for damages rendered with his investment, unless he directed or carried out damages himself.  Further, if my $100 becomes $1000, I get to keep the $900 profit.  But if the company files for bankruptcy with colossal debts say proportionate to thousands or millions with respect to my original investment, I can only lose my $100, and nothing more; lenders to the corporation eat the cost.  Sounds like a fantasy, doesn’t it?

This happens to be an example of what Baker terms takes, or one-sided exchanges offered by the nanny state to individuals.  In data science and statistics, we have another term for this phenomenon : a capped loss function, a loss being a penalty we incur given some random event.  A curious, yet substantial boon for shareholders is that of capped, left-skewed loss function; that is, they take a risk in investing their money, but they can lose no more than that, even if a company, such as Lehman Brothers, defrauds millions with overly risky speculative financial instruments, as in the financial crisis of 2007, or the Enron bankruptcy in 2001, costing thousands their retirements.

It shouldn’t be a surprise that now the government forges charters of indefinite duration.   And the masters of these corporations want more than just the perks listed above : they claim these tyrannies are, in fact, flesh-and-blood persons.  For instance, we can point to the infamous Citizens United decision in the U.S. Supreme Court in 2010 declaring that corporations can contribute vast sums to political causes under the guise of first amendment protection.  More recently, a 2014 decision in Burwell v. Hobby Lobby Stores, Inc. asserted freedom of religion for corporations by exempting them from the mandate to provide contraceptive care under the Affordable Care Act.   Though these decision receive deservedly bad press about being turning points in corporate take-over of our democratic institutions, it’s worth remembering that corporations have enjoyed the rights of personhood for quite a long time.  In 1886, the Supreme Court declared that corporations should receive equal protection under the Fourteenth Amendment of the Constitution in Santa Clara County v. Southern Pacific Railroad Co., despite the intent of the amendment being protection for emancipated slaves.  For more on the history of the corporate personhood dogma, see a report by the Brennan Center for Justice.

So Baker is quite correct in asserting that such a Big Rock Candy Mountain experience wouldn’t be imaginable without a powerful nanny state to guarantee its advantages.  Further, he argues quite pointedly that

...a serious discussion must begin with a
basic truth : the corporation does not
exist in a free market[,]

meaning the free market ideology wouldn’t bear risk of the magnitude corporations routinely undertake.  A familiar theme by now should be that the fantasy begins and ends with government intervention.  Another amenity Baker raises is shareholder anonymity : if I want to invest in a company which participates in child labor exploitation where it’s legal, I can do so without much concern about being discovered.

As it turns out, this is increasingly unavoidable with creation of multinationals, or conglomerates of varied businesses who deal across continents where legal protections for citizens vary.  It might not come as a surprise that these multinationals tend to farm out factory and dangerous work to countries where they need not observe ethical labor practices; Amnesty International has long documented such practices in Indonesia, including slave and child labor on palm oil plantations.  Other examples include Apple’s use of child labor through the manufacturing giant Foxconn and Walmart profiting from prison labor, though we can point to countless other examples of labor abuse, human trafficking, and complicity in organized crime, documented in various media reports and by the International Consortium of Investigative Journalists.

And as it turns out, the story gets worse : what should be a state tool designed to improve the general welfare has enjoyed ever-diminishing oversight while a narrowing of focus : in 1919 the Supreme Court ruled that profits are the lone objective of incorporated companies in the decision Dodge v. Ford.  That is, not only are they a shield from prosecution for shareholders and a safety net against personal financial liability, they must pursue profits, placing any other priorities as secondary.  Everything else is public relations, something to which we’ll return later.  Sounds rather destructive, doesn’t it?

 We can actually point to a much more comprehensive list of corporate atrocities in the name of profit-seeking, such as

  • vicious atrocities in Central America (described somewhat in earlier posts) perpetrated by the United Fruit Company, as described in Big Fruit,
  • business decisions to intentionally continue production of the ill-fated Ford Pinto, discussed in Mother Jonesdespite critiques of the hype of the article, the central thesis remains : Ford executives decided killing customers was the right business decision,
  • the deliberate contamination of Hinkley groundwater by Pacific Gas and Electric, the subject of the film Erin Brokovich,
  • the deliberate cover-up and falsification of research linking sugar consumption to heart disease and obesity by the Great Western Sugar Company, carefully documented in the film Sugar Coated,
  • the falsification of research by tobacco firms, documented in the thriller The Insider,
  • the burying of significant scientific research on climate change for forty years by Exxon Mobile, documented by Exxon Knew,

and so on.  In each of the cases, shareholders could lose no more than the value of their investment, despite their money financing criminal actions.  This is an extremely important point, worth belaboring.  If I personally hired someone to poison my community’s water supply, I could face capital murder.  But if I pay a corporation to do it as a shareholder, I’m in the clear.  Certainly we can argue about fine legal points such as intent, but the metaphor is apt with respect to outcomes.  So Baker suggests conservatives and market ideologues whining about the minimal government oversight of these tyrannies remember that they can always go into business together through private contracts, surrendering this limited liability.  In any case, they don’t want markets nor personal responsibility, often repeated ideals of the conservative nanny state; rather, they want a welfare safety net for themselves.

Baker nicely summarizes with the following :

[i]t takes a conservative nanny
state to create an institution...
that allows investors to cause
harm and not be held accountable.

Baker continues with more highly elucidating discussion on corporate perks, all worth reading, but I’ll move on after addressing one point I find rather important which will come up again later : the corporate income tax.  Donald Trump’s incessant shrieking that the corporate income tax being too high echoes repeated mantras from conservative pundits and think tanks (like U.S Chamber of Commerce and the ultra-conservative Heritage Foundation), complaining of crushing of entrepreneurial initiative and unfair “double taxation.”  And yet these purveyors of the nanny state fail to mention that many of the largest corporations for whom they serve as mouthpieces never pay a penny through this tax, as documented by the Institute on Taxation and Economic Policy.  Further, even if we suspend belief to partake of the melodrama, this is a very, very small price to pay for the aforementioned incredible legal protection.  So Baker correctly points out that this is a voluntary tax, meaning individuals need not incorporate to do business; the tax is a fee for the overwhelming advantage of limited liability, among other amenities conferred by government-issued charters.  If entrepreneurs don’t want to pay the fee, they can assume the risk.

So what is a reasonable, market-based alternative?  As discussed earlier, Western European countries offer some interesting possibilities.  Further, worker-owned corporations (documented earlier by the National Center for Employment Ownership), limits on charter issuance, and requirements within the charters for leadership to be liable to stakeholders rather than just shareholders would be a good start.  If all else fails, traditional contracts and partnerships are perfectly suitable approaches.

Even beyond charter issuance, most large corporations owe their beginnings to extreme government investment and intervention, something Baker calls takes, to which we’ll return later.  In that vein, how about a return-on-investment for taxpayers?  Walmart wouldn’t have been possible without the Interstate Highway System; Amazon wouldn’t be possible without the internet; where’s the taxpayer’s return?

Among the objections to the aforementioned, corporatists like to claim that “stakeholders” are customers, and that they vote with their dollars, leading to a perverse propaganda that corporations actually aren’t tyrannies.  Even if we are to believe such a preposterous framework, one must have a dollar to vote under said theory, marginalizing the poor and the disinterested customers immediately.  More still, this framework is even more preposterous when we consider externalities, or effects of transactions not taken into account.  For instance, Walmart may decide to build a supercenter near me, multiplying traffic by a factor of twenty and causing awful pollution, yet, they don’t simply vanish just because I don’t patronize their stores.  Further, even high school students learn about oligopolies and the aforementioned U.S. Chamber of Commerce, examples of special interest collectivism designed to diminish the well-known destructive effect of markets on profits; with a twist of irony, they also hate collectivism when leveraged by working people (code-named unions), to which we’ll return later.  In any case, these purveyors of the nanny state may decry these possible reforms as “government meddling in the economy”, but the corporation is  by definition precisely that.  Another objection is that progress slows without the risk protection conferred by the nanny state, as investors won’t want to take chances with their savings.  Considering that we’re decimating the ecology around us, perhaps some forms of “progress” ought to slow down.  In any case, requiring these corporatists to accept personal responsibility in making careful, conservative, thoughtful investments is better aligned with the demands they make of poor people everyday.

In summary, conservative nanny state mythology demands we accept as a law of nature that corporations are an essential feature of the most optimal economic strategy, a proposition easily debunked with elementary analysis.  Again, corporations would not survive in a true market-based system.  Alternatives are appearing throughout the economic landscape, as we’ve mentioned earlier.

What is the Federal Reserve?

Baker continues his discussion of the nanny state by unveiling the purpose of the Federal Reserve; its chairperson, a position previously held by appallingly lauded Alan Greenspan, wields perhaps the greatest power over the economy of any individual.  By shifting the so-called federal funds rate, or the short-term rate for lending between banks, this chairperson can adjust the speed of the economy; cutting rates increases lending, borrowing, and job production, while hiking them has the opposite effect.

Perhaps the dirtiest secret of this process is a preplanned unemployment rate, meaning that in order to ensure downward pressure on wages in large segments of the economy, a steady, large supply of unemployed workers must remain available.  Ironic as it seems, this heavy-handed intervention in the economy seems perfectly natural to free market ideologues, as they generally are among the beneficiaries of such policies.  Baker discusses the Beige Book, a report published by the Federal Reserve eight times a year; during periods of low unemployment, particularly 1997 to 2000, employers lamented the increased benefits and wages necessary to entice employees from other companies, even in trades traditionally plagued with low income in the neoliberal period.  As vicious and malevolent as this form of social planning might seem, elites claim it is necessary to ensure inflation remains stable.  The human cost seems less important, as employers enjoy more access to the Federal Reserve board members, and competing on the open market for employees is something they’d prefer not to do.  Baker further discusses how Greenspan disproved conventional thinking by economists of the day that low unemployment would accelerate inflation in the late nineties, undercutting the very rationale for retaining a buffer of unemployment.  Likely, precluding inflation is a convenient cover for pressing a large swathe of the population into stagnation.  Baker describes a bit of the makeup of the agency itself, referring the reader to the official website for more detailed explanations.

Suffice it to say, the governing bankers and economists vary greatly in policy design regarding inflation and unemployment, and Baker very correctly points out that a one or two percent rise in unemployment matters significantly less to well-compensated bankers than to autoworkers or other tradespersons of mid-to-low income.  Conversely, said bankers likely will balk at even meager increases in inflation, considering this undercuts the value of existing loans.  Baker’s point is that the very people running the Federal Reserve carry a heavy bias toward policy hostile to most of the working class, something rather obvious when one considers the matter seriously.  He further remarks that the most recent three chairmen, Paul Volcker, Alan Greenspan, and Benjamin Bernanke enjoy fanciful reputations as “inflation fighters,” generally with little-to-no acknowledgement of the overwhelming sacrifices demanded of working class people who lose their jobs when these fighters hike interest rates to stem inflation. In fact, Baker, Andrew Glyn, David Howell, and John Schmitt discuss remarkable alternatives to controlling inflation with unemployment in Unemployment and Labor Market Institutions: The Failure of the Empirical Case for Deregulation; they discuss substantive case studies in collective labor bargaining with employers in Sweden, Ireland, and other western democracies, finding that when workers’ associations assess wage change on the economy at large, both inflation and unemployment remain lower than those in the United States.  Unfortunately, the vicious assault on collective bargaining here in the states has shriveled union participation to less than ten percent of workers; by contrast, a large majority of working class people in the aforementioned democracies are card-carrying union members.  And it benefits them greatly.

Next time, we’ll discuss unions more thoroughly, along with special nanny state provisions which contravene markets.

The Conservative Nanny State : A Book Review Part Two : Job Protectionism and Differing Sets of Rules

Continuing our discussion of Dean Baker’s The Conservative Nanny State, we’ll address a powerful function of the nanny state : job protectionism.  Conventional wisdom among the elite and intellectual sector is that though lower income earners face harsh competition because of a heightened labor supply (read : too many people vying for the same job), we in the higher income brackets don’t face competition because we were sufficiently lucky or prudent to seek work for which little labor supply exists.  It turns out that this self-congratulation is a bit premature.

Poor People Should Compete with Foreign Workers, But I Don’t Have To… I Shouldn’t Have ToHelp Me Nanny State!

Baker begins with discussing a rather well-known feature of the neoliberal program : the offshoring of labor and the import of foreign labor which pits low-to-mid income earning tradespersons in the United States against very cheap labor in the third world.  Thus, despite close to a doubling of the economy and worker output since 1980, these income earners’ wages have quite predictably stagnated.  Despite this, those of us in the top five percent have experienced great wealth gains in the same period, also a rather well-known but perhaps harder to explain phenomenon.  Baker suggests that the stock answer to why this is the case tickles the ears of the purveyors of the conservative nanny state, as highly compensated persons in the aforementioned bracket are important in maintaining the mythology : go to school, work hard, then make big bucks; those who ignore this advice deserve poverty.  In fact, highly educated acquaintances of mine from across the political spectrum often happily claim that the sum total of their income is due to their substantial, innate value after heeding the mythology, yet poor people either should get off their lazy asses (the conservative version) or utilize government incentives for vocational training (the so-called liberal version), a dichotomy Baker coincidentally references almost verbatim.   So what is the truth?  Baker offers a rather astonishing observation : the U.S. immigration policy, discussed in Eric Freeman’s Barriers to Foreign Professionals Working in the United States, along with protective licensing agencies and diffuse, indeterminate standards, ensures that fewer highly skilled professionals are available than are needed.  A few years ago, both the New York Times and The Atlantic offered a discussion of the difficulties facing foreign doctors in obtaining licenses to practice medicine in the U.S., describing the labyrinthine procedural hurtles depriving these competent, well-trained, desperately needed professionals of a career here in the States.  The New York Times reported in 1997 that the U.S. government actually paid hospitals in New York not to train foreign doctors.  Imagine if the U.S. government actually paid an automotive firm not to offshore manufacturing?  Baker continues by spelling out the cost of this protectionism, coinciding nicely with its very justification :

[i]f free trade in physicians brought doctors'
salaries down to European levels, the savings
would be close to $100,000 per doctor,
approximately $80 billion a year... [ten]
times as large as standard estimates of the
gains from NAFTA.

It’s worth remembering that the absurdly mislabeled “free trade agreements” NAFTA and CAFTA have virtually nothing to do with higher-compensated trades such as doctors, lawyers, and technocrats.  After all, it wouldn’t do to compete with every competent Chinese or Indian doctor, even if the healthcare savings conferred to the weary working class would be immense.  Yet anecdotally, doctors tell me that skyrocketing tuition, malpractice insurance, and the cost-of-living require much higher salaries.  Baker doesn’t address tuition and rising costs-of-living directly in this book, though I speculate he’d attribute at least the former if not both to the conservative nanny state.  Noam Chomsky has speculated that tuition hikes are a mechanism for control of young college students rather than an economic necessity in sustaining the university system.  Baker’s point here is that the protectionist barriers for doctors, lawyers, and technocrats have absolutely nothing to do with market principles, as none of us could compete in an absolutely free and open market with the wages we receive today.  The incredibly high cost of the American medical system drives hundreds of thousands of people into bankruptcy each year, roughly sixty percent of the 1.5 million people who file each year, according to The Huffington Post in 2015, no doubt partially explaining a phenomenon known as medical tourism, or Americans traveling abroad to receive medical treatment.  CNN reports that the increasingly growing industry grants Americans access to world-class healthcare at maybe thirty to forty percent the cost of the same care here.

Yet another device of protection for physicians is the American Medical Association, an organization of physicians with substantial political clout, largely responsible for ensuring tough immigration standards and difficult standards.  It turns out we have another label for this : a trade union.  “Union” has become a terribly dirty word in Americana, as what should be a revered, indispensable public institution has largely succumbed to a massive, unremitting campaign of propaganda; we’ll return to this topic shortly.

So is this really happening?  Baker suggests that denialism is the most widely cited defense against these allegations.  He refers to hilarious anecdotes such as “my doctor is Pakistani” as the defense mounted by those who stand the most to lose by acknowledging this protectionism.  I could make the same observation that I’ve worked with many foreigners over the course of my career in technology, so even my initial knee jerk response was disbelief.  Baker retorts that citing a Mexican avocado in an American grocery store as proof that the U.S. government doesn’t restrict agricultural trade would receive unbridled derision and heart laughter right out of the economics profession.  Per Baker, we should treat this denialism in kind.  He argues, rather poignantly, that

[t] truth is that the "free traders" don't
want free trade--they want cheap nannies--
but "free trade" sounds much more noble.

So what can we do?  First, we recognize the protectionism extant in our own fields; next, we recognize the solidarity we should share with those less fortunate tradespersons not conferred the enormous benefits of said protectionism.  Finally, we fight for a better path forward.  Baker’s proposal, which he by no means claims is the only means of improvement, is to enact true free trade agreements which establish international standards meeting or exceeding our own in each industry.  Further, highly-skilled professionals migrating to America could pay a percentage of their incomes back to their home nation for the purpose of training other professionals; many repatriates send money home to their families in any case, generating demand in third world nations, an obviously desirable feature if we’re to speak of serious market application.

Baker ends this section with an important point about a more egalitarian market-based approach reducing salaries for highly compensated earners : if the cost of doing business falls because of an increased pool of workers, the cost transfers to the population at large.  This, in turn, tends to reduce the cost of living for everyone.  None of these changes would happen immediately, but it’s nonetheless worth remembering that reductions in healthcare costs means more money for wages for everyone, including those of us in the technocracy.

The other point worth making here is that protectionism, if applied at all, ought to apply equally.  Factory workers, welders, and janitors ought to receive equal protection for their livelihood.  As we’ve suggested before, the rise of Trump easily follows from a highly disenchanted working class marginalized by globalization and a hostile overclass enemy; these are issues not just critical to good citizenship, but now perhaps for the very survival of our species.

Never Make a CEO Compete…

Before moving on, I feel it’s important to address thoroughly one point Baker omits in his discussion on protectionism for the well-to-do (though he picks up the general topic later in the book) : the most highly-compensated sliver of the economy, particularly CEOs.  I’ve worked in technology companies for over a decade, some of whom are in the Fortune 500, and an (admittedly) anecdotally pervasive theme is the frustration with, disapproval of, and devaluing of each respective executive leadership team.  Generally the sentiment is that chief executive officers (CEOs) and their directs are pampered, overpaid, egotists whose positive contribution dwindles as the machine grows : by the time corporation reaches a slow stage of monolithic decay, say as in a defense contractor, the CEO doesn’t seem to serve any function except to drain resources from the remaining parts of the business.  My first job, stated before, was in precisely such a company, and we referred to the executives collectively as “mahogany row,” owing to the rather beautifully polished paneling in their luxury, separate-but-not-equal building complete with covered parking (fellow Texans understand that perk, considering heat and hailstorms).  Our offices, by contrast, reminded me of my elementary school : seemingly ancient construction with doubtless asbestos-filled flooring and lowered ceilings to conceal the cigarette smoke stains, an artifact of the smoke-filled days of yesteryear.  In any case, my thinking is somewhat more elementary : whatever skills an executive requires to perform his duties no doubt exist elsewhere.

Considering the well-documented, exorbitant increase in CEO pay with no obvious, market-based cause, we might suspect they somehow are gaming the system.  Baker describes CEO pay later in the book, referencing L. Mishel, et al.’s The State of Working America, an exposition on the stunning explosion of the CEO-to-average worker pay factor, roughly forty in the 1970s, obscene three hundred in late 1990s, then back to still obscene two hundred as of the mid 2000s.   He also points to The Growth of Executive Pay by Lucian Bebchuk and Yaniv Grinstein, a discussion measuring pay of the top five executives in each of 1500 corporations over 1993 to 2003; they conclude that CEO pay jumped at least twice as quickly as could be explained by a number of success metrics, including company profits, industry mix (concentration by region of business types), and market capitalization (the total value of the corporation).  That is to say, scarcity and demand of a business, value of the business, and profitability of the business fail to explain skyrocketing executive pay over the period studied.  Continuing with Mishel’s analysis, Baker explains that CEO pay in the United States is two-and-a-half to five times larger than that of CEOs in Canada, France, and Japan, despite industry leaders in these nations wresting substantial market share from their American competitors, meaning the American system somehow rewards incompetence with skyrocketing wages.  Worse yet, American executives often enjoy zany contract clauses conferring the so-called golden parachute, a severance package so exorbitant that ordinary Americans could easily retire on it.  Imagine living in a world where taking a job is win-win; even if you find yourself fired for aforementioned incompetence by the board of trustees, you’ll depart with barrels of cash.  Aside from the astonishingly anti-market nature of this practice in principle, there are many measurable, deleterious effects in action as well, documented in Bebchuk et al.‘s “Golden Parachutes and the Wealth of Shareholders” appearing in the Journal of Corporate Finance.  In any case, the practice persists : what a country club indeed.

So what explains stratospheric CEO pay?  It seems rather elementary, as American CEOs can raise their own wages by appointing friends to his corporate board, the body responsible for setting his wages.  He, in turn, serves on their respective boards, returning the favor in a spectacularly golden tsunami of quid pro quo, unaccountable to shareholders because of the difficulties of organizing them and the many shenanigans encoded in the corporation’s charter, such as stock proxying; that is, if the shareholders hold a vote on replacing the current CEO, any shareholder who fails to vote by default votes for the CEO to remain.  Imagine if that were common practice in our government elections : the incumbents would be virtually unbeatable!  Baker concludes his chapter on CEO pay with suggestions on how to improve the system, including tying executive pay not to profits only (such as what happens when the cost of oil skyrockets), but relative performance to the industry, and more Congressional oversight.  He cites the Private Securities Litigation Reform Act, passed by Newt Gingrich’s Congress in 1995 over Bill Clinton’s veto to further diminish shareholders’ access to the courts when executives manipulate stock prices, as an example of the power Congress can exercise, though this was in a destructive direction.  As usual, empowering the super-rich and undercutting everyone else somehow receives the lyrical moniker “reform”, a staple of the conservative nanny state’s propaganda.

It turns out there’s more to the story on how CEOs siphon vast cash reserves from corporate profits above and beyond what first-order effects can explain : anecdotal discussions with corporate insiders reveal a rather odd practice of organizing compensation committees intent on basing CEO pay on some arbitrary percentile, say the seventy-fifth, of market pay.  Any astute data scientist understands such implications : a steady-state solution requires CEO pay to grow until all resources deplete.  That is, if a CEO joins a company, the committee decides his pay should target the 75th percentile.  By increasing the rate of pay of a single CEO, the 75th percentile gradually eases upward independent of other market metrics.  Recent scholarship by the Economic Policy Institute lends credence to rather dodgy practice, apparently owing to what economists call “rents”, or excessive increases in market cost for whatever purpose. Aside from the silly, baseless justifications for this practice, why not let CEOs compete on the open market?  Again, to one of Baker’s central theses, markets simply aren’t the desired mechanism for these folks.

So how can we make these folks compete?  We’ll touch on corporations in an upcoming part of the series, but suffice it to say there are many examples of worker owned businesses, documented by the National Center for Employee Ownership in 2016, designed often so that if employees want management changes, they fire their leadership.  Imagine if an incoming CEO recognized fully that he is accountable to the employees?  It turns out that employee-owned companies could be a means of requiring the shareholders and the stakeholders to be more closely aligned.  Another key question is to what extent an organization of employees needs a CEO : decentralized autonomous organizations represent one extreme possibility, in which leadership largely follows computer-encoded rules; some of these organizations exist as of the time of this writing.  Certainly, a robot CEO wouldn’t ask for extreme pay.  In any case, it seems as though more democratic control within the organization could ensure that unnecessary leadership overhead vanishes, and where leadership is required, greater control would rest with the employees; perhaps employees could take turns playing the CEO.  In the world of start-ups and technology, businesses could operate more easily in this mold, adopting as part of their charter a constitution, if you will, fostering a more egalitarian, democratic operating principle.  As Baker points out, and we’ll discuss it more thoroughly later, the classic corporation framework isn’t necessarily the optimal solution (and we have pretty good evidence to the contrary), nor is it a law of nature.

We’ll continue in the next discussion with trade unions, and Baker’s definition of the Federal Reserve.