Forty-Seven Trillion Dollars: Exploitation Writ Large

“Exploitation” is a word seldom encountered today. Its common usage roughly spans the heyday of socialist thinking, especially the era of Marx’s influence over socialist theory. It was and should still be the cornerstone of Marx’s critique of capitalism.

But the idea of labor exploitation-- capitalists taking uncompensated advantage of workers’ labor-- has largely disappeared outside of the Communist Parties. It is more common to find the word attached to sexual or animal abuse, cultural appropriation, or other sins outside the bounds of class. But class exploitation, the structural exploitation once fruitfully viewed as the centerpiece of capitalist relations of production, the basis for the era of capitalism, is out of fashion with today’s Western left.

That’s not to deny a concerted outrage over inequality of income and wealth; certainly, the broad spectrum of opinion from the center to the left decries the vast gap between the obscenely wealthy and those equally obscenely impoverished. But there is little attention paid to how that enormous chasm is produced and continually reproduced. Nor is there much imagination of life without it.

Hopefully that might change.

A recent article in Time magazine-- a popularization of a scholarly paper from the staid, ultra-conservative Rand Corporation-- declares dramatically in sensational headlines: America’s 1% Has Taken $50 Trillion From the Bottom 90%.

The Rand paper, Trends in Incomes From 1975 to 2018 argues with a great deal more nuance, but equal force, that if the thirty-year (1945-1975) trend of household income distribution had been maintained over the next forty-two years (1976-2018), the bottom 90% would have earned $47 trillion more over that period! 

Put another way, the bottom 90% would have received 67% more income than it actually did in the one year, 2018-- the final year of the study; those below the upper 10% threshold would share $2.5 trillion more than they actually received for their labor, $2.5 trillion in 2018 that went instead into the bank accounts of the highest 10% of earners.

As the authors of the Time article emphasize,
“This is not some back-of-the-napkin approximation…”, but a rigorous conclusion based upon the premise that 1945 to 1975 was a period of relative stability of inequality. That is, in the thirty-year post-war period, the gap between the rich and everyone else grew little and declined little. The French elites celebrate a similar era in Europe with the expression “les trente glorieuse”-- the thirty glorious years of relative prosperity. The majority maintained its lower status, but lost little ground to the rich.

While the Rand authors, C. Price and K. Edwards, do not explain this ‘equilibrium’ of inequality, an explanation is readily at hand. The Western powers were in an intense, winner-take-all competition with socialism and its friends after World War II. The ruling classes made an unspoken compact with respective labor movements in Europe and the US that they would encourage the idea that labor’s income would move proportionally with increases in productivity, effectively “freezing” social inequality in place.

In return, labor was expected to accommodate, even participate in Cold War foreign policy and embrace capitalism. In the political sphere, this compact guaranteed that the urge to reform or change would be contained in the Democratic Party or the European Social Democracies. Where mass Communist Parties emerged, the securities services would go to any length to aid and abet the center-left in denying them access to power.

In the US, the informal compact produced the purging of the left in the labor movement, cultural and intellectual conformity, and entrenchment of the two-party system.

As Price and Edwards demonstrate, the stability of income distribution, of class-income differences, changed dramatically after 1975. Income distribution shifted sharply to the benefit of the top 10% and even more so to the top 1%. The shift was so great in the post-1975 period that the authors calculate that 90% lost $47 trillion by 2018. But, again, they have no clear and comprehensive explanation, beyond noting that the “rise in inequality has been attributed to many different factors including technological advancement, decline in union membership, and globalization.”

While these conventionally cited factors may well have played some role in the shift in income distribution, they were hardly sufficient to explain the extremely sharp turn that Price and Edwards show.

Rather, the reversal came with the profound economic crisis of the 1970s: the oil crisis and intractable stagnation and inflation, two conditions that conventional economics (then Keynesian-influenced) could not even conceive of as occurring together. The concurrent fall in the rate of profit forced a radical reexamination of policy on the part of the ruling class (in the US as well as Europe). Welfare policies and class accommodation were jettisoned for a raw, no-holds barred assault on the income and living standards of the 90%.

With the decline and disappearance of Soviet and Eastern European power, a decade or more later, the last elements of the post-war compact with labor and its allies were also jettisoned. The US ruling class perceived no need for any further accommodation with US working people. Capital mobility and the availability of an enormous new pool of skilled, but low-cost labor capped the period and placed enormous pressure on the incomes of Price and Edward’s 90%. Labor unions received this shock treatment and, without a militant left, struggled to respond. New logistical technologies smoothed the way for a sharp increase in global trade, investments, and job migration.

While Price and Edwards struggle with an explanation for the qualitative changes that occurred after 1975, Marxist theory offers a ready answer. Capital mounted a concerted offensive in the 1970s resulting in a massive increase in the rate of exploitation in response to a profound crisis and the failure of the policies of the immediate postwar era to answer that crisis. 

With the rate of profit under siege, the US ruling class unilaterally cast aside the Cold War compromises and ruthlessly attacked the income and living standards of the working-class majority. Wages have been essentially stagnant since the 1970s, while productivity and national product have grown, filling the coffers of the corporations and the bank accounts of the rich.

Characterizing this period as the rise of “neoliberalism,” as much of the left favors, obfuscates the deeper processes that spawned the dramatic shift in the rate of exploitation, the appropriation of an additional $47 trillion from one class to another in a forty-two year span. It wasn’t an intellectual victory in the policy wars, a spark of evil intent, the domination of the political right, or a temporary or contingent aberration of capitalism, but a strategic adaptation-- accepted by nearly the entire ruling class and its political minions-- in the appropriation of surplus value-- the exploitation of labor-- that accounts for the dramatic gains of the capitalist class and its hangers-on. 

Though they were agents in the change, Carter, Reagan, and Thatcher were only the faces of another stage in capitalism’s course correction. Those who think that the super-exploitation exposed by Price and Edwards can be tempered by a return to the “glory” of the immediate postwar period fail to understand the logic of capitalism. That period has long given way to a new dynamic. 

But the Price and Edward revelations succeed in exposing an important point. If the super-exploitation of the last forty-two years-- the appropriation of the $47 trillion-- is recognized as unjust, as the Time headline suggests, then the “ordinary” exploitation of the previous period is equally unjust since both lead directly to inequalities.

There is no escaping the conclusion that the economic inequality that more and more people are rejecting is itself deeply rooted in capitalism and its profit-generating, exploitative mechanism. Surely the scope of super-exploitation that Price and Edwards spotlight should challenge the legitimacy of capitalism, not only as it is today, but also how it was before it took a vicious turn. 

Greg Godels

zzsblogml@gmail.com

The Paid Pipers of Hypocrisy

Is there a word more abused by the monopoly media than the word “corruption”? For US journalists, corruption is the sin committed by bureaucrats, administrators, and politicians everywhere outside of the US and its closest allies. 

A glance at the map of corruption devised by Transparency International, an NGO favored by the capitalist punditry, shows a remarkable result: skin color and political independence correlate pretty closely with the magnitude of corruption in the eyes of the “scholars” at Transparency International. It seems that the darker-skinned people have a predilection to tolerate corruption, as do those people who fail to accept the leadership of the US and its Euro-Asian sycophants. Needless to say, poor Haiti-- both dark-skinned and unforgiven for its overthrow of colonialism-- is allegedly most cursed by corruption, as are Venezuela, Syria, DPRK, several African states, and some failed states wrecked by imperialism.

If this index, itself, seems curiously corrupted by bias, consider the exposure of what may be the most egregious, far-reaching corruption of recent years: the conflict of interest of US Federal judges. In a recent in-depth study of 685 cases heard before US Federal judges over the last decade, The Wall Street Journal found that 131 out of the 600 hundred or so Federal judges ruled on cases in which the judge or family members held interests-- securities-- in one of the litigants. In other words, almost one in five Federal judges bore a conflict of interest in the cases examined. 

This is, however, not simply a matter of bad judgement on the part of the judges, but a violation of a 1974 law that explicitly makes it illegal for Federal judges or their family members to hold investments in companies coming before the court:

Nothing bars judges from owning stocks, but federal law since 1974 has prohibited judges from hearing cases that involve a party in which they, their spouses or their minor children have a “legal or equitable interest, however small.” That law and the Judicial Conference of the U.S., which is the federal courts’ policy-making body, require judges to avoid even the appearance of a conflict. Although most lawsuits don’t directly affect a company’s stock price, the Supreme Court in 1988 said the law’s purpose is to promote confidence in the judiciary. (WSJ)

And yet no Federal judge has ever been charged, not to mention convicted, under this law. The Federal judiciary, a cornerstone of our three branches of national governance, is therefore riddled with conflicts of interest and, by any rational measure, corruption. 

The WSJ story, a powerful exposé of corruption at the highest level of the US government, immediately follows the late September announcement of the resignations of two Federal Reserve Presidents, who engaged in extensive security trades while the Federal Reserve was embarking on policy changes potentially advantageous to the trades. While both denied any wrongdoing, many commentators saw a rather blatant conflict of interest. The widespread suspicion of insider trading-- high level corruption-- likely prompted the resignations.

In both cases, attention sank like an anchor in the media maelstrom.

While a few major media outlets made matter-of-fact reports of the two cases, outrage was noticeable for its absence. The pundits who are scandalized by customs officials in developing countries accepting $5 bribes to expedite the shuffling of papers were strangely silent over Federal judges’ rulings in cases where they held financial interests and Federal Reserve officials profiteering. The politicians exclaiming the corruption of foreign leaders showed little interest in the shameful behavior of high officials appointed to decide matters of greatest import to the people of the US.

As author and law school educator, Dan Kovalik, points out regarding the Federal judges:

One might think that all of this would create a huge scandal, and maybe even a US Department of Justice investigation to root out corrupt judges to at least try to bring some fairness and equity to our legal system. But no such righting of the US system will come – not any time soon, anyway. Instead, the US, true to its long-standing practice of projecting its own sins on others so it doesn’t have to get to grips with its own, is focused on rooting out corruption – both real and fabricated – in other countries.

To guarantee that no one dwelled on rampant Federal corruption, four days after the WSJ article appeared in the print edition, the International Consortium of Investigative Journalism, a well-connected Washington DC-based organization, released a brief summary of the so-called Pandora Papers, allegedly a massive anonymous dump of data on off-shore tax havens used by important people in numerous countries. Media outrage ensued. Pitchforks were sharpened. 

The ICIJ is an oddity. Created as a depository for leaked information along the lines of WikiLeaks, ICIJ has never received the kind of violent hostility visited upon WikiLeaks and especially its founder, Julian Assange. Instead, ICIJ’s “scandalous” findings have been met with media enthusiasm and official acceptance or, at worst, indifference. Since little that it reveals is actually illegal, ICIJ findings are essentially celebrity-shaming. 

Astute observers have pointed to several curiosities. Ben Norton noted that the Pandora Papers shames few prominent United States personalities, a blatant failing shared by the aforementioned Transparency International. Apologists have offered the ludicrous explanation that favorable US tax policy makes it unnecessary for the rich in the US to seek tax havens. 

Norton also chronicles the funding for ICIJ, the usual pack of US CIA fronts, collaborators, phony NGOs, and the ubiquitous Soros Foundation.

Which, of course, raises the question of the source of the data dump, billed as a “trove of more than 11.9 million confidential files…” Does any individual or organization beyond the CIA, NSA, or other counterpart intelligence agency have the resources to acquire the data released in the Pandora Papers? Or the other leaks that preceded it? The Panama Papers? China Cables? Paradise Papers?

Isn’t it odd that unnamed sources can, seemingly with ease, steal private data “troves” and pass them anonymously on to a group (“...the biggest [mainstream] journalism partnership in history…”) without revealing a hint of the chain of events that led to the disclosures? Even more bizarrely, no one in the media-- no “premier” investigative journalist-- seems in the slightest interested in discovering this pathway. It just happened. No interest on the part of the FBI. No charges of data theft. Of hacking.

Compare this to the intense media bonfires kindled by leaks ranging from the Clinton campaign revelations to the Jeffrey Epstein scandal. Apparently, the Pandora Papers, despite open questions over the legality of their acquisition, have the stamp of official propriety.

Maybe it has something to do with the media’s determination to spin the findings to embarrass Vladimir Putin and Bashar al-Assad and other targets of US and EU policies.

Call it a conspiracy theory, but the Pandora Paper’s convenient release overshadowed stories that the media had already chosen to ignore. It served nicely as a distraction. Corruption at the highest levels of US governance never made the Britney Spears/Gabby Petito news cycle.

Some might argue that our channels of information, our chronicles of events, are broken and compromised. Some cynically see our media as a megaphone of officialdom. Certainly the evidence is there for both views.

The simple fact is that monopoly news is no news at all.

Postscript: Today’s WSJ (October 16, 2021) reveals that 61 of the 131 Federal judges cited actually traded stocks of litigants while they were adjudicating cases involving those litigants, a blatant basis for conflict of interest charges in violation of the 1974 statute! Corruption!

Greg Godels

zzsblogml@gmail.com

Occupy in the Rearview Mirror

Ten years ago, September 17, 2011, protesters settled in Zuccotti Park in the New York City financial district, a privately held park owned by Brookfield Office Properties and named after its former chairman. This action acquired the simple, straightforward, but somewhat misleading moniker, “Occupy Wall Street.”

While the specific motivations of the congregation are debated, there is a general agreement that the 2007-2009 economic crisis, and especially the failure to punish its perpetrators, was an instigation. Occupy became a phenomenon, even a brand in the era of memes, social media, and ultra-consumerism. Occupy-like copycats sprang up around the country and in different forms of activism. 

In its initial form, Occupy was an open invitation to gather in a public or semi-public space and hold it. The participants resisted a program, organizational structure, or leadership. Like previous efforts at anarchist levelling-- so-called “radical” or “participatory democracy” -- everyone was nominally of equal voice and stature. And like its anti-structure antecedents in the New Left, the Zapatistas, the anti-Globalization movement, the Indignados, etc., one can only wonder how its spokespeople, organizers, “facilitators,” or anti-leaders, are democratically selected in the absence of some structure. 

The common thread that runs through all of the celebrated anti-hierarchical organizations is a semi-religious confidence in spontaneity. All worship at the altar of this elusive idea, despite the fact that there is no successful historical precedent to support faith in its success. 

Though the Occupy movement succumbed after two months to a brutal assault by the coercive forces of the US ruling class, it left a popular slogan that continues to be embraced by a large sector of the US left: “We are the 99 percent!”

The Ten-Year Retrospective

Not surprisingly, various estimations of the value of Occupy are springing up on the 10th anniversary of the initial occupation. They range from the romantically naive, crediting Occupy with spurring every struggle since 2011, including the minimum wage fight and the teacher strike wave of 2018, to the coldly skeptical viewing of Occupy as an opportunity lost to “performative acts” or merely an historical “blip.” 

Michael Levitin, writing in The Atlantic contends that Occupy “made protesting cool again… it brought the action back into activism…” In fact, protesting has never been “cool;” it requires a sacrifice on the part of participants. More importantly, it should conjure a commitment beyond an event, a performance, a statement. Protesting requires the uncool tedium of building a movement that can grow sufficiently to tackle the unequal power of the rulers, a goal difficult to achieve without leadership, organization, and structure. The “1%” is more than the economically privileged; the “1%” has also accumulated massive power largely immune to the incantations of a general assembly. 

Micah L Sifrey, writing in The New Republic, references a somewhat chastened Occupy Wall Street organizer, Jonathan Smucker from his book:

Occupy wasn’t just a success in putting class back on the American agenda.

It was also “a high-momentum mess that ultimately proved incapable of mobilizing beyond a low plateau of usual suspects.” As he wrote in his book Hegemony How-To, “We were not merely lacking in our ability to lead the promising social justice alignment that our audacious occupation kicked off; many of the loudest voices were openly hostile toward the very existence of leadership, along with organization, resources, engagement with the mainstream media, forging broad alliances, and many other necessary operations that reek of the scent of political power.” Because Occupy’s general assemblies were so time-consuming and so easily hijacked, much of the real work and decision-making went elsewhere, “into underground centers of informal power,” he writes. 

It’s possible to look at Occupy as an experiment for its time-- 2011 was the year of the rise of Spain’s anti-austerity movement, the Indignados. Occupy came shortly after the Tunisian Jasmine Revolution which sparked the Arab Spring. All shared the elements of non-violence (by protesters), spontaneous or near-spontaneous risings, absence of a clear program, an allergy to hierarchies, and cross-class engagement. None were led by traditional leftist parties or ideologies (apart from a nebulous connection with anarchism). And-- a conclusion that none of the commentators want to accede-- all faded away, leaving the balance of power essentially unchanged.

Occupy did demonstrate the power of social media and internet communication. Old-timers were in awe at the ease and speed that people could be rallied around actions and events. Time proved that the new technologies came with a downside: action came almost too easily and with minimal commitment or understanding. Activism often sprang from the same emotional immediacy as going to a concert or movie. One commentator called Occupy “exhilarating” -- a kind of political Woodstock?

Arun Gupta, writing in In These Times, casually notes: “Every movement reaches the end of the road, and a decade later Occupy-style protest has smacked into a dead end.” 

Yes, Occupy-style protest is exhausted today, but Gupta’s dismissing that demise with a shrug reflects a measure of political immaturity. Any movement bent upon challenging inequality, injustice, capital, or, most importantly, capitalism, cannot accept a dead end as an inevitability. Quite the opposite, any movement promising success must stay the course if it holds out any hope of winning against an unprecedented accumulation of power in so few hands and a long history of falling short. Occupy lacked that vision.

Gupta writes of the “authenticity” of Occupy and the satisfaction drawn by its participants. Insofar as it served as a “pre-school” for a generation of young people deeply scarred by student loans, poor job prospects or unemployment, and deeply disappointed with the political establishment, Occupy was a worthy introduction. Insofar as political elders, movement veterans, and theorists accept Occupy as the road forward and offer no alternate routes, they bear much of the responsibility for the collapse of the movement.

The Lessons

Clearly, many feel strongly that the legacy of Occupy is worth fighting over. Witness the statement by the Metropolitan Anarchist Coordinating Council, claiming Occupy as its own. Or the debate in The Nation: Was Occupy Wall Street More Anarchist or Socialist? 

Undoubtedly, Occupy served to introduce thousands of young people to collective action, to resistance to the rich and powerful. With “the 99 percent” slogan, many saw social life in the US through a rudimentary lens of class division for the first time, a reality denied us by our education system, our media, and our leaders.

But “the ninety-nine percent versus the one percent” construction was far too simplistic and far too crude to capture the differences or reflect the structure of twenty-first century capitalism. It failed to explain the divisions that kept the ninety-nine percent or its various strata and classes from uniting against the one percent. It failed to fit this simplification into the dynamics of the two-party system-- a system of control fundamentally owned by the one-percent and its allied strata-- while denying effective power to everyone else. It failed to offer a road map either inside or outside of that decadent structure. 

In short, “the ninety-nine percent” was analytically far too blunt of an instrument to advance Occupy beyond well-intended street theater. 

What was needed was a deeper class analysis that more accurately distinguished between the exploited and the exploiters. If they would have bothered to look, Occupiers might have found that more profound analysis in Marxism-Leninism.

Occupy follows a long trajectory of “new” radicalism in the US shaped by subtle, but long-festering anti-Communism. Since the purging of Communists and their allies from US social and political life in the post-war era, every version of revitalized resistance pays subtle, but uncompromising homage to the religion of anti-Communism-- a silent loyalty oath. From the student-based New Left to Occupy, it was understood that the limits of tolerance ended at the door to authentic Marxism-Leninism.

Instead, every emerging movement ostentatiously showcased its commitment to “democracy” in stark contrast to the caricature of Communism and its alleged soulless hostility to the individual. The cult of the individual and a utopian “participatory” democracy is meant to demonstrate a breed of radicalism distinctly different from the Cold War image of Communism. Thus was born a kind of individualistic, petty-bourgeois anarchism characteristic of US activists from early SDS to Chomsky and to Occupy.

Where anathema to the lessons of over a hundred and fifty years of Communist and socialist (and anarchist, as well) practice were not purposely obscured, different outcomes ensued. The Chilean student movement, though concurrent with the Occupy phenomenon, is a case in point. Though virtually ignored by the media and the US left, Chilean high school and university students demonstrated from 2011 until 2013 for educational reform. 

Unlike Occupy, the protests were highly organized, welcomed democratically chosen leadership, and constructed a coherent set of demands. In addition, the students engaged and were joined by the Chilean labor movement. The left political parties collaborated and enjoyed growth from their engagement, particularly the Chilean Communist Party. The successful socialist candidate for president in 2013, Michelle Bachelet placed educational reform at the top of her agenda.

Students again sparked the August 2019 protests that continued through the next two years, with over a million Chileans in the streets on October 25, 2019 in Santiago alone.

Unlike Occupy, the Chilean student protests of 2011 led directly to the empowerment of the left, electoral gains, and a referendum opening the way to a new constitution.

The political maturity of the Chilean movement and its successes serve as a stark counterpoint to the shortcomings of the Occupy model of resistance.

To its credit, Occupy broke the pattern of movement quiescence during a Democratic Party administration. For decades, anti-war and reformist protests only took on a mass character when the Republicans were in power. The anti-war demonstrations of the Bush administration were never duplicated, not even when Obama engineered the troop surge in Afghanistan. The dominant liberal and social democratic wings of the left fear antagonizing the Democratic Party torchbearers, unleashing street heat only when Republicans are in power. Allergic to electoral politics, the anarchists at the core of Occupy fearlessly and determinedly pressed forward during the Obama years.

Nonetheless, after two months of intense media attention, exhilarating public theater, and sincerely felt protest, the Occupy movement was swept away by military-like operations of the police. With no deep moorings, no road map, and no lieutenants or captains, the movement was shattered into many pieces. Some, in frustration, sought to change the Democratic Party; some sold their souls to the social-change-industry of NGOs, foundation grants, and non-profit social engineering; some returned to academia; and some, out of cynicism, simply dropped away.

An unlikely chronicler, loyal Democrat Robert Reich, noted perceptively that a contemporary right-wing populist movement, the Tea Party, expressing outrage against the powers-that-be from a different perspective, found much more success in shaping the political terrain. With its focus on performance over program, form over content, spontaneity over organization, Reich could understandably not see any hope that Occupy would change the course of history.

Well before Reich’s skepticism, V.I. Lenin railed against spontaneity in his classic polemic against the enemies of organized leadership, in What Is to Be Done? Lenin mocked actions that came to be called “participatory democracy” as examples of “toy” or “primitive” democracy. While they appear to be ultra-democratic, they actually inhibit serving the cause of the people with their endless obsession over procedure. 

Occupy ran aground on the shoals of procedural sectarianism, organizational chaos, and the lack of a programmatic compass. Will the lessons be heeded or will the US left continue to flirt with “toy” democracy over substance, cultural expression over political engagement?

Greg Godels

zzsblogml@gmail.com