Haiku Politics

William Pfaff of the International Herald Tribune has written an interesting article that places the current conflict in France in the context of broader changes that he sees taking place in the world economy.

Pfaff believes that a series of changes have taken place in global capitalism since the 1960s that are having dire consequences for the future of capitalism. One of the changes, he argues, is that a new corporate model has taken over in which

corporation managers are responsible for creating short-term "value" for owners, as measured by stock valuation and quarterly dividends.

The practical result has been constant pressure to reduce wages and worker benefits (leading in some cases to theft of pensions and other crimes), and political lobbying and public persuasion to lower the corporate tax contribution to government finance and the public interest.

The result, he argues, is that

In short, the system in the advanced countries has been rejigged since the 1960s to take wealth from workers, and from the funding of government, and transfer it to stockholders and corporate executives.

Pfaff seems to hold in his mind an ideal vision of an idyllic capitalism of yore. In reality, capitalism, based on the profit motive, has always been geared toward this end. The idea of capitalists seeking to make more money at the expense of workers and social needs is hardly new; it has been around since the beginning of capitalism. If it is true, as Pfaff argues, that the worst traits of capitalism have started to become exacerbated in the last 40-50 years, the question is, why is this happening, and why now? This is something that requires serious analysis, and rather than praising some past capitalism of another era, one might ask what it is about capitalism that seems to have inevitably taken us to the state we are in today. And although Pfaff does not say this, I believe that what is really new about Pfaff's "new model" of capitalism is that the old social democratic (or, in US parlance, liberal) model of trying to tame capitalism and rein in its worst excesses is now clearly failing, and has been failing for some time. Can the profit motive really be "tamed"? It seems to me it cannot. And that is the real problem--liberalism and social democracy, as reformist rather than radical ideologies, were ill equipped to fight the evils of capitalism, and ultimately capitalism won.

Pfaff also describes the process of globalization as having a critical impact on the evolution of modern capitalism. Globalization, as he points out, "puts labor into competition with the poorest countries on earth." Again, there is nothing particularly new about this particularly critique of globalization, but it is Pfaff's conclusion that is quite interesting. He writes:

We need go no further with what I realize is a very complex matter, other than to note the classical economist David Ricardo's "iron law of wages," which says that in conditions of wage competition and unlimited labor supply, wages will fall to just above subsistence.

There never before has been unlimited labor. There is now, thanks to globalization - and the process has only begun.

These are serious conclusions, and it is fascinating to find these words, not on the pages of a marxist journal, but in a serious bourgeois newspaper. When he writes of "the human consequences of a capitalist model that considers labor a commodity and extends price competition for that commodity to the entire world", he is not writing anything that any socialist would not have said over the course of the last century and a half. And yet, Pfaff is no socialist. That does not prevent him from understanding the crisis that is overtaking capitalism at this point in history. And if even supporters of capitalism are beginning to understand this, there is hope that those of us with a different vision may be more able to get our own message out.

Posted by The Haikuist at 12:48 PM | Permalink | Comments

The San Francisco Chronicle reports that Cruz Bustamante, who is the leading Democratic Party candidate for California state insurance commissioner, has accepted $120,000 in campaign contributions from--you guessed it--the insurance industry! (Those would be the very people he supposedly will be regulating if he is elected.)

Posted by The Haikuist at 12:37 PM | Permalink | Comments

Michael Berg, the father of Nick Berg, whose beheading in Iraq was videotaped, is running an antiwar campaign for Congress as a Green in Delaware. The New York Times article reports that

As he bicycles across the state giving speeches at schools and churches and holding fund-raising house parties, he says he has found a receptive audience, not just to his call for an immediate withdrawal of all American forces from Iraq but also to the rest of his platform: universal health care, a livable wage and increased spending on education.

"A lot of voters are frustrated by the lack of options beyond the two major parties," Mr. Berg said. "And a lot of these people have not been voting before."

The article adds a comment that Berg made which should be nominated for quote of the year:

Mr. Berg said that he was originally approached by a representative of the state's Democratic Party to oppose Mr. Castle but that he opted to go with the Greens because "the Democrats have the money to get the message out, but they have the wrong message."

Indeed, that is the problem with the Democrats--they have the wrong message. As if to underscore this point, in the next paragraph of the article, we see a quote from the Democratic Party candidate for Congress, Dennis Spivak, who said, "We don't want to pull out in a way that will make things worse in that region, especially at a time when Iraq is on the verge of a civil war." This is pretty much the standard position of the Democratic Party--a reluctance, if not outright opposition, to an immediate withdrawal from Iraq. Even John Murtha's supposed "immediate" withdrawal from Iraq is nothing but a redeployment to elsewhere in the region, and it isn't even particularly immediate.

Posted by The Haikuist at 11:15 AM | Permalink | Comments

The mass strikes and demonstrations by students and workers in France against the new labor law that Dominique Villepin rammed through the National Assembly illustrate once again the intense problems that Western capitalism faces over the powerful pressures of neoliberalism.

Villepin has made matters for him worse by committing serious tactical mistakes. Villepin is an appointee who has never been elected to any office, and his incompetence as a politician clearly showed in his handling of this matter. But the reality is that to focus on tactical mistakes is to miss the broader picture. While his interior minister and fellow party member Nikolas Sarkozy may be distancing himself from Villepin's tactics, the overall principles of neoliberalism are embraced by broad sectors of his party and by the leading capitalist interests in France. More importantly, the problem that the opposition Socialist Party faces in France is whether they are capable of offering a truly radical vision that can oppose the enormous market pressures that have led governments throughout Europe, even those supposedly of the "left", to abandon the interests of workers and students in favor of policies of neoliberalism and globalization. Given the history of the Socialist Party when it has been in power in France, this seems unlikely.

The reality is that European social democrats, which includes the French Socialist Party, are caught in a bind of their own. Embracing many of the details of market capitalism, and eschewing class warfare in favor of accommodation with capitalist principles, the French socialists haven't figured out how to ensure a viable economic system that can both guarantee protections of workers and yet still bow to the pressures of the market economy that they are unwilling to seriously challenge. As a result, they pay lip service to the interests of the working class while being unwilling to challenge the immense problems that the market economy poses. Unemployment is held hostage to the power of the global marketplace, and globalization will continue to serve as both a lure and a yoke around the neck of the French people until they are willing to overturn the powerful class interests that rule their country.

Naturally, we should support the efforts of students and workers to protect their rights against a reactionary onslaught such as what Villepin has proposed. But those of us on the left need to accompany our support for these mass demonstrations with radical demands of our own, because it is only by making radical change can the French people--not to mention all other people in the corporate-dominated economies of the West--really resolve the quandary that they face. This can only be solved by overturning corporate power and giving the people democratic, social control over economic resources and the means of production, replacing profit with human needs as the basis of economic activity. And this is something that ultimately cannot just be solved in France, but must take place around the world.

Posted by The Haikuist at 9:16 AM | Permalink | Comments

My previous posting, about the cozy relationship between modern-day Democratic Party liberalism and corporate interests, is borne out by an AP news story that was released today. The article documents Hillary Clinton's close relationship with Wal-Mart over the years, which included a six-year stint on the board of directors. According to the article, "Clinton had kind words for Wal-Mart as recently as 2004, when she told an audience at the convention of the National Retail Federation that her time on the board 'was a great experience in every respect.'

In addition, the article points out:

Throughout the 1980s, both Bill and Hillary Clinton nurtured relationships with Walton, a conservative Republican and by far Arkansas' most influential businessman.

Among other things, Hillary Clinton sought Walton's help in 1983 for Bill Clinton's so-called Blue Ribbon Commission on Education, a major effort to improve Arkansas' troubled public schools. The overhaul became a centerpiece of Clinton's governorship.

And Wal-Mart's Made in America campaign, which for years touted the company's sales of American products in its stores, was launched after Bill Clinton persuaded Walton to help save 200 jobs at an Arkansas shirt manufacturing plant. The Made in America campaign has virtually vanished in recent years, as the company's manufacturing has gradually moved overseas — another point of criticism by many anti-Wal-Mart activists.

The Clintons also benefited financially from Wal-Mart. Hillary Clinton was paid $18,000 each year she served on the board, plus $1,500 for each meeting she attended. By 1993 she had accumulated at least $100,000 in Wal-Mart stock, according to Bill Clinton's federal financial disclosure that year. The Clintons also flew for free on Wal-Mart corporate planes 14 times in 1990 and 1991 in preparation for Bill Clinton's 1992 presidential bid.

The close ties that the Clintons have exhibited with Wal-mart are par for the course, although it is interesting that they were particularly close with a company that embodies many of the worst corporate abuses.

Posted by The Haikuist at 1:54 PM | Permalink | Comments

The last great antitrust action by the US government against a major American corporation was carried out in 1984, when AT&T was broken up into various "Baby Bells" which provided local phone service, while AT&T itself provided long distance phone service. In the intervening years since that action, we have seen the gradual reconsolidation of these various phone companies. This reconsolidation has, in essence, undermined the original act of breaking up the original monopoly. The latest example of this is the buyout of BellSouth by AT&T. This serves as yet another nail in the coffin of the 1984 antitrust settlement.

The government doesn't really pursue antitrust cases much anymore. There was an abortive attempt at breaking up Microsoft a few years ago, but it never actually took place. Antitrust laws are seen as rather passe by the political establishment of both political parties these days. It used to be that antitrust action was seen by liberalism as an important tool in fighting corporate power. The Sherman Antitrust Act, and later acts of trustbusting by reformers during the Progressive Era of the early 1900s, served as a response to the power of corporations. Of course, this posture of trustbusting came back at a time when liberals thought that corporate power was a problem that actually needed to be addressed. Such is not the case anymore, when Democratic Party politicians and corporate interests are deeply intertwined, when members of the Clinton Administration and corporate executives moved back in forth between their mutually interlocking spheres.

There is, of course, an inherent problem with antitrust enforcement, and this is highlighted by what we have seen in the telecommunications industry since that 1984 antitrust settlement. The natural tendency of corporations under capitalism is to grow and consolidate. An antitrust enforcement is only a temporary remedy; over time, as we have seen with the Baby Bells and AT&T, the corporations will simply merge once again into larger and larger corporate entitiess, until competition once again diminishes. This is the nature of capitalism. Thus antitrust laws only work as a temporary reversal of an inevitable process in capitalist economies.

Antitrust laws are inherently self-contradictory. This is because such laws are predicated on a celebration of the virtues of competition--and as such, their goal is to stimulate more competition by trying to undo the very thing that competition inevitably leads to. Competition is good, according to this theory--but as soon as we increase competition via antitrust action, we have created the very conditions under which competition will diminish.

There is another, more fundamental, underlying problem with this philosophy of celebrating competition. Competition lies at the heart of market economics, and it is the anarchic nature of market economics that serves as one of the most serious indictments of capitalism. Competition produces an irrational and ruthless system by which profits, rather than human needs, serves as the basis of economic activity. Competition also means business failures, layoffs, unemployment, and massive disparities in wealth. By celebrating competition, we celebrate "letting the market decide". But the market isn't always very good about deciding things. The market doesn't care anything about human needs. You can't separate competition from the various attendant evils of market economics.

The very process of corporate consolidation, which is also a by-product of competition, often produces more of these very evils. Such consolidation almost inevitably leads to layoffs--it is likely that this AT&T takeover of BellSouth will result in job cuts.

These failures of antitrust policy have highlighted the failure of liberalism as a means of reforming capitalism. American liberals, out of an apparent desire to disassociate themselves from socialism as much as possible, generally did not call for nationalization of large corporations. The sole hope they offered for countering corporate power, during those times when they actually cared about such things, was a failed attempt at limiting the power of the trusts by breaking them up. This strategy, which over the past century has proven to be a failure, has left liberalism with no viable tools to offer as a means of reforming corporate power. As a result, modern liberalism, especially as manifested by its electoral organ the Democratic Party, doesn't even bother to oppose corporate power anymore. The Clinton Administration, for example, maintained a close relationship with Monsanto. As a 1999 newspaper article by Tom Rhodes of the London Times reported:

[Monsanto's] ties with the White House are strong. Mickey Kantor, the former trade representative and chairman of Bill Clinton's 1992 presidential campaign, is a board member. Marcia Hale, Monsanto's international regulatory director, was a top presidential assistant. Linda Fisher, the vice-president for federal government affairs, mapped pesticide policy for the Bush White House. Michael Taylor, a former FDA commissioner, has been hired as a strategist.

Shapiro has courted the Clintons, sponsoring the president's welfare-to-work programme and involving Monsanto in the micro-enterprise summit for developing nations, one of Hillary Clinton's pet interests. The White House views Monsanto as a "Democratic company" and actively promotes biotechnology through the good offices of Madeleine Albright, the secretary of state, and Al Gore, the vice-president.

This is what liberalism and the Democratic Party are left with--close ties with corporate interests. No longer even bothering to attack big business, liberal politicians now lie in bed with it instead.

With the failure liberalism and the Democratic Party to address corporate power, we are now left with an economic system in which market forces are allowed to operate full throttle. Simply hoping to renew antitrust enforcement is a naive response to the problem. The solution to corporate power lies not in breaking it up, but in society taking control of "the commanding heights of industry" and managing the economy on the basis of human need rather than profits.

Posted by The Haikuist at 9:16 AM | Permalink | Comments