Straight talk about the true nature of our economic problems
Barack Obama’s “Car Czar” and consummate Wall Street insider Steven Rattner writes up “a Christmas wish list for America’s hapless leaders” today in the FT. He wants Santa to bring him “straight talk from political leaders about the true nature of America’s economic problems, and some solutions for dealing with them”.
It’s a ludicrous request of course given that Rattner and his fellow elites crucially depend on misdirection and crooked talk to sustain their immense power; straight talk isn’t, as they say, an option that’s on the table.
The reason why it’s not is because actual straight talk begins with an understanding of the distribution of ownership within our society. As reported in my last post, the bottom 80% in the US own just 17% of wealth. But it’s even worse because that low figure includes home equity and other personal assets which aren’t productive. Economic freedom depends on the ownership of productive assets and the bottom 80% own a pathetic 7% of these as measured by financial wealth. The vast majority therefore have about as much economic freedom as the landless serfs of our feudal past. Going beyond illusions, the reality of actually existing capitalism is that most are completely dependent on “employment” from a master class owning all productive resources and will quickly sink into economic oblivion if it’s withheld.
As a matter of power, we seem little different than the Latin American latifundia societies in which a few elite landowners own all productive land while the majority is forced into effective serfdom. Replace “productive land” with “productive resources” and the straightest of talk can do nothing but conclude the US and the world have been fully latifundialized.
Here’s some straight talk from a commentator in England.
The “capitalist industrial system is … intolerably unstable and consequently presents an acute problem which must be solved under pain of social death.” “You have the great majority dispossessed” and “economically impotent…” “There will be under capitalism a conscious, direct, and planned exploitation of the majority…by the minority who are the owners”. “The possessors can make such terms with the non-possessors as shall make it certain that a portion of what the non-possessors have produced shall go to the possessors.” A grave strain “arises from the insecurity to which capitalism condemns the great mass of society, and the general character of anxiety and peril which it imposes upon all citizens, but in particular upon the majority, which consists, under capitalism, of dispossessed free men.”
“Property remains as an instinct perhaps with most of the citizens; as an experience and a reality it is unknown to nineteen out of twenty.” “Our legal machinery has become little more than an engine for protecting the few owners against the necessities, the demands, or the hatred of the mass of their dispossessed fellow citizens. The vast bulk of so called ‘free’ contracts are today leonine contracts: arrangements which one man was free to take or to leave, but which the other man was not free to take or to leave, because the second had for his alternative starvation.” “The fundamental social fact … is that livelihood is at the will of the possessors. It can be granted by the possessors to the non-possessors, or it can be withheld.” “Most men now fear the loss of employment more than they fear legal punishment, and the discipline under which men are coerced in their modern forms of activity in England is the fear of dismissal. The true master of the Englishman today is not the sovereign nor the officers of state, nor, save indirectly, the laws; his true master is the capitalist.
We can “reason with absolute certitude from the very nature of capitalism that its chief effect would be the destruction of security in human life”. “Where a few possess the means of production, perfectly free political conditions are impossible”.
This is a pretty straight talk description of today’s reality but in fact it was written exactly 100 years ago by a conservative Catholic, Hilaire Belloc in his book “The Servile State”. Capitalism has a crystal clear personality profile that was perfectly evident in the 19th century and, for Belloc, in 1912. Since the time Belloc wrote this, we’ve had two World Wars based largely on the drive for economic imperialism, a Great Depression, an economically based “Cold War” that led to millions of deaths in the “third world” and almost blew up the planet, massive inflation in the 1970’s, declining living standards ever since, and now yet another depression. And true to form, economically based military tensions are rising in the middle east, the Pacific and elsewhere. The only possible forecast for this latifundia system is ever more of the same if not worse.
Contra Rattner, the system critically depends on crooked talk for mass support and the “straight talk” solution he wants us to swallow is the standard elite call for ever lower health care and retirement security coupled with some “investment” in infrastructure and education which will do little if anything for the neo-serfs. Day after day we read the same numbing bullshit endlessly regurgitated by the small number of “experts” who have access to the mainstream press. I present it here in all its glory.
America’s future depends on refocusing its economy on high value-added, higher intellectual content sectors where it can compete effectively. That means educating and training American workers to higher levels, as well as investing more in infrastructure and research and development.
At present, growing fiscal constraints, combined with the public perception that government needs to step back, have prevented any progress towards these goals. If anything, ground has been lost. For example, burgeoning spending on social security and healthcare has cut government spending on capital programmes such as infrastructure in half, as a share of GDP.
Rattner, et al criticize the politicians but I’ve come to almost sympathize with them, being forced as they are to forever pretend we don’t live in a latifundia, that the majority is actually free and independent, and that there are real solutions within capitalism. All while Rattner and his ilk sit just off the sidelines screaming to the crowd, with much success, that the politicians are our problem rather than latifundia. No wonder most politicians are nuts.
The straight talk solution for achieving democracy and prosperity is to stay focused on overthrowing the latifundia. We mustn’t get sidetracked into thinking a modest redistribution of some of the benefits that flow to ownership will do the trick. Or, as some would have us believe, just some more central bank purchases of government bonds and a wee bit more inflation. “Full employment” ideas which seek to more fully “utilize” the human “commodity” are also ultimately bogus. We’ve tinkered with modest “social democratic” ideas for the past 100 years and the end result is the world as we see it today. They haven’t worked because they’ve done zero to undermine the undemocratic power that owns society. In the case of land based latifundias, the only effective solution is to sever the ownership rights of the small cabal of wealthy landowners. The same logic holds for our capitalist latifundia. This is bound to be the great struggle of the 21st century and it will certainly be quite messy. Let’s hope not quite as difficult as forseen by Jack London in his 1908 novel “The Iron Heel” in which many bloody centuries were required to overturn the US oligarchy. Until we’ve achieved democratic ownership though, we’ll continue in our serf-like subordinate position and life will always be insecure.