Sunday, July 7, 2013

On Capital and the State, Thoughts Post-Socialism 2013


When you go to a conference for all you see and do, typically a few things stand out. One was a woman in a t-shirt that said “Texas Socialist” which coming in the midst of Texas’s attempts to limit women’s choices have made me think more about reproductive issues. But the most important line came in a panel on urban violence and poverty, when the speaker stated:

“Poverty is a part of capitalism, it’s not an exception.”


 

So, so, much can be explained from this line. As the speaker elaborated, “liberals” like to pretend that poverty is fluke, an unfortunate outcome. This is mistaken. Poverty, and the problems that are related, are a natural result of the process we call capitalism.  It’s very easy today, with so many issues of importance to feel pulled in different directions, to find AN issue that will straddle as many issues as possible. I was struck by, in that panel on urban violence, most of what was said was not really specific to urban violence (more on that in another post).

As people like me (somebody who would choose to spend two days cooped up in a hotel listening to lectures in May) tend to do, I picked up several books. These included “The Revolution Will Not Be Funded”, “The People’s Pension” and the “The Political Economy of NGOs”.  “The People’s Pension” is about the fight to preserve Social Security since Reagan-yes the simple concept of supporting seniors through their own money has been such as issue for the powerful that the explanation of its survival requires a LONG book (the thing is doorstop). “The Revolution Will Not Be Funded” is a collection of pieces regarding the outsized role foundations play (and have played) in controlling politics, especially progressive politics.  “The Political Economy of NGOs” is subtitled “State Formation in Sri Lanka and Bangladesh” and is about the role of NGOs in society, using Sri Lanka and Bangladesh as specific examples.

These are three books with, on the face of it, about very different topics. I have only just read the beginnings of “Revolution” and “NGOs” and skimmed “Pension” but there is a obvious theme here, the role capital has (in various forms) in shaping society. By "capital" I am referring broadly to large amounts of money controlled by private interests.  Full disclosure I have not read Marx or consider myself a Socialist per se, but I was astonished at how hard I was hit I was by the accuracy of Marxist-type descriptions of capitalism in “NGOs”.

For people who truly desire freedom—the real kind not the flag-waving I-have-mine maybe-you-have-yours kind—what to do about the state is always an issue. Many problems come from state control, leading even reasonable people to lean towards a libertarian philosophy-I admit to not read much libertarian literature either. But I have read enough to tell you that "libertarian" is more than what some right-wing pundits insist and has a strong history in the left politic. So on one hand there is a real desire to limit the state’s undesirable aspects-the imperialism and all that follows from it, the prison industrial complex, etc.—but strengthening the parts that help us and are actually more efficient when managed by a large, relatively neutral actor. This would include social services and social supports such as medical care, Social Security, SNAP. 

How to square this circle is not clear to me, but there are some obvious points.
First, in the question of which is more powerful, corporate interests or the state, currently the two are so closely linked, constantly reinforcing each other, that is almost becomes a chicken and egg question. By itself, it is not terribly a useful construct.  Therefore, I would argue, we should look at decreasing the power of capital overall and the state itself where appropriate. Some people like to argue that the days of the state strength are over, but as a Jude Fernando in “NGOs” states:
Shifts from progressive to regressive taxation, and from social welfare expenditure to the subsidization of private industry, are mistakenly interpreted as signs of the state’s declining power over the economy
. . . the state continues to remain as the guarantor of the rights of capital national or foreign. The reduction of investments by the state in social development does  not necessarily mean a diminishing of state power. (page 8) 
Shortened, don’t kid yourself, the state is as powerful as it has ever been. Right now, as it has historically, it favors capital. It does not have to be this way.

As a nation, we are as unequal as we have ever been—few economists dispute this and nearly all consider it a problem. Is this an accident? No. 
 Capitalism . . . requires continually increasing surplus value created by maximizing the economic inequality between those who control capital and             those who provide the labor required to translate capital into wealth. . . . The fact that the extraction of surplus value depends on perpetual inequality             between capital and labor means that that capitalism is always prone to two overlapping crises. The crisis of accumulation refers to the  legitimization involves the obstacles to securing the stable social acceptance of accumulation in response to the social, economic, and environmental crises it generates. (page 25)

Is this not describing the current situation? Put another way, when you attempt to squeeze every last dime out of the system, when you get as much productivity out of your employees as possible-but keep those gains for yourself, there are going to be problems. When you are a multi-million dollar CEO but you have employees who require government assistance, when you do not actually pay your employees what small amount they were promised, when you require your employees to pay to get paid, there will be problems. Many “social ills”—while needs to looked at with gender and race concerns—can be seriously migrated if not eliminated if capital’s power was disrupted if not destroyed.

I think we can put forth as an overall goal to try to limit the power of capital-either through actions directly aimed at capital itself or limiting capital’s power through the state. This will certainly require various strategies and working with different groups and people. The vast majority-not everything of course-but the vast majority of what is wrong with our country can be attributable to capital’s power. Some, although not enough, people understand that capital itself needs to be battled in many ways, through higher income taxes, the Robin Hood Tax/Financial Transaction Tax (also, for a full presentation see the www.cepr.net website under "events"), the fight for labor representation. It is worth noting that even mainstream financial writers will cite decline in unionism as a factor in equality rise.  Yet the media constantly puts the narrative of “greedy unions”.  CEOs are not greedy? This is so obvious that there is a lot of energy put into Other Reasons People Cannot Get a Job. It is technology, it is education, and it is not the “right” type of education. For the most part, this is all nonsense.  The simple fact is that employment is down for all areas, and that a depressed job market heavily favors employers and drives down wages.

It is vital, however, to recognize that the state itself it contributes significantly to the power of the capital. Obvious ways include handouts given to corporate interests and “regulatory capture”, most notably of the financial sector.  There is no other misused term than “free market” as very few aspects of modern capitalism truly are “free” instead they are highly protected but that protectionism is such a part of the system we frequently do not notice it.

This is well documented in Dean Baker’s book, “The End of Loser Liberalism, Making Markets Progressive.” (It’s free, so there’s no excuse not to at least look at it ok?) Among other topics the book focused on a little recognized state-protected monopoly-copyright protections and patents.  Contrary to popular belief both copyright protection and patents are relatively recent creations of the modern state and they create large distortions that benefit the 1%. While the concept of the  “creator” or “inventor” is highly promoted in our society the reality is it is giant corporations that benefit the most from these laws. While radical reform in these areas is far off, even small changes could produce significant effects, limiting the types of patents, decreasing copyright time to start. Of course the US has the most restrictive copyright and patent protections in the world, and is looking to make these laws global through “trade” pacts, the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership Agreement (the European deal). I have written previously about TPP here, the Euro agreement is similar.

The point is, we are here because of political choices “our” political leaders have made. There is a tendency to think that things “just happen”. They do, inequality can be explained by political decisions. It was a political decision to give huge handouts in 2008 to corporations in order to “save” an inherently corruption system. By comparison, that money would have gone a lot farther and done more for the economy had it been given to homeowners—this does not even address the rampant corruption in the whole foreclosure crisis. It is a political decision to arrest drug users, but not the CEOs of banks that provide the monetary backing for the drug trade. More than any other factor it is political (lack of) support that has hurt unions. It is political rhetoric that complains about how people who have paid all their life into pensions, now expecting them, are “bleeding the taxpayer”. Who pays the most taxes anyways? It’s not corporations.
To sum up, we need to fight the system on all levels. Resistance can take many forms. But we must not lose sight of who ultimately holds the cards. It is the state, and it is really only through political system we can change it.



Fernando, Jude L. (2011) The Political Economy of NGOs, London: Pluto Press

 The Revolution Will Not Be Funded: Beyond the Non-Profit Industrial Complex, (2007) Ed. INCITE Women of Color Against Violence. Boston: South End Press

Laursen, Eric. The People’s Pension, (2012) Oakland: AK Press

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