Dangerous Idea: Every American needs to SEE David Simon’s ‘My country is a horror show’ speech!


 
It’s a very big Internet, so you can be forgiven if you’ve missed David Simon’s absolutely incendiary op ed ‘There are now two Americas. My country is a horror show’ that was published on The Guardian’s website on December 7th. But if you’re reading this sentence, you no longer have an excuse and need to click over to said essay NOW and return here after you’ve read it.

You’ll thank me. Trust me, you’ll be smarter after you’ve read it. Go. Now. If there is anything worth your time, it’s THIS. Who wants to be ignorant? Not you, right? NOW.

In the days since it was published, Simon’s essay has turned into a shot heard ‘round the world. In my opinion it’s the most incredibly articulate, passionately argued, well-thought out meditation on America since, I dunno, something Mark Twain (or Kurt Vonnegut) wrote. I believe David Simon’s words to be of historical importance, that is to say future historians will read his essay in an effort to try to understand HOW the American people let it get THIS BAD and still allowed those responsible to continue to operate exactly as they had before. You’d think the economy crashing might have ushered in some change. And it has: Bad for the common man, but great for the capital-hoarding elites.

As Simon rhetorically asks—I’m paraphrasing here—“How much longer until the entire shithouse goes up in flames?”

David Simon’s words have incredible power. The kind of power that educates people, changes minds and makes them do something. It needs to be passed on and on and on until everyone has read it, even your idiot teabagger Fox News-watching Uncle Dumbshit. Especially him.

If you’ve already read Simon’s piece, what you may not be aware of (and the YouTube views thus far would seem to bear this out) is that the essay is actually an edited version of an extraordinary speech that The Wire creator gave in Australia at the Festival of Dangerous Ideas at the Sydney Opera House. Simon spoke for about 30 minutes and then there was an extended Q&A beyond.

Watch this and then pass it on. On and on and on. He’s not exactly offering much of a prescription here—that’s not his goal—but the diagnosis is spot on…
 

Written by Richard Metzger | Discussion
What Marx got right


 
This is a guest post from Charles Hugh Smith. His newest book is Why Things Are Falling Apart and What We Can Do About It

The crisis of capitalism has not been resolved; it’s simply been papered over.

First, a disclaimer: this is an interpretive discussion of some aspects of Marx’s analysis (which was based on the capitalism he observed in the late 19th century) applied to present-day cartel-state capitalism. It is not a scholarly or academic presentation.

The discussion covers a lot of ground, though, so please refill your beverage container and strap in….

That Marx’s prescription for a socialist/Communist alternative to capitalism failed does not necessarily negate his critique of capitalism. Marx spent hundreds of pages analyzing capital and capitalism and relatively few sketching out a pie-in-the-sky alternative that was not grounded in historical examples or working models.

So it is no surprise that his prescriptive work is an occasionally risible historical curiosity while his critique stands as a systemic analysis.

Marx got a number of things right, one of which appears to be playing out on a global scale. You probably know that Marx expected capitalism to experience a series of ever-larger boom-bust cycles that would eventually precipitate revolution and overthrow of the existing financial-political order.

One driver of these cycles was the interplay of increasing production and declining labor costs. In broad-brush, Marx recognized that industrial capital (as opposed to finance capital) could only increase profits and accumulate more capital by raising production and/or establishing a price-fixing cartel or monopoly.

Mechanization characterized industrial capitalism in the late 19th century, and Marx observed that as mechanization increased productivity, the marginal value of labor decreased on a per unit basis.

Here is a real-world example: When I first visited China in 2000, there was a massive glut of television production: the capacity to manufacture TVs had expanded far beyond China’s domestic demand for TVs. To wring out a profit in a highly competitive industry, manufacturers had to ramp up production while lowering the unit cost of labor and the unit cost of each TV to undercut the competition.

If an assembly line of 100 workers could produce 1,000 TVs a day, the only way to lower the price of the TV is to either lower the wages paid to the workers or invest capital in machinery that enables the same 100 workers to produce 2,000 TVs a day.

At 2,000 TVs a day, the per unit labor cost falls in half. For example, at 1,000 TVs a day, the labor cost per TV might be $40. At 2,000 TVs per day assembled by the same 100 workers, the labor cost per unit drops to $20.

The key point here is that labor’s share of the total production cost declines. If workers had taken home $1 million in pay to make 100,000 TVs at the old production rate of 1,000 TVs/day, they now take home $500,000 to make 100,000 TVs at the new production rate.

In other words, labor’s share of value creation constantly declines as mechanization boosts productivity. Marx described the impact of another factor: oversupply of labor. As rural agricultural workers flooded into cities for jobs that paid cash, there was an abundance of factory labor. Competition for jobs pushes wages lower, so workers faced a double-whammy: their share of production relentlessly declined as productivity rose, and the pressure on wages constantly rose as per unit labor costs declined.

The competition to outproduce industrial rivals with cheaper per-unit production costs and labor’s competition for jobs both generate a structural crisis in capitalism: as production of goods rises, both the cost per unit and the number of workers earning enough to buy the goods declines.

Keep reading ‘What Marx Got Right’ from Charles Hugh Smith after the jump…

Written by Richard Metzger | Discussion
How much longer can capitalism last when robots will do all the work?


 
Last month on 60 Minutes, reporter Steve Kroft filed a fascinating story about how technological advances in automation and robotics have totally revolutionized American business and manufacturing, while we’ve seen the number of decent paying jobs shrink.

After he indicated how information workers like paralegals are about to become as SOL as airport counter personal and travel agents, two of the Kroft’s interviewees, MIT professors Erik Brynjolfsson and Andrew McAfee, told him we ain’t seen nuthin’ yet:

Andrew McAfee: Our economy is bigger than it was before the start of the Great Recession. Corporate profits are back. Business investment in hardware and software is back higher than it’s ever been. What’s not back is the jobs.

Steve Kroft: And you think technology and increased automation is a factor in that?

Erik Brynjolfsson: Absolutely.

I’ve never really considered 60 Minutes to be much of a cutting edge outlet to “break” stories, instead I feel like once a story has made it to the highest rated American news magazine, that it’s been minted, or confirmed, as a legitimate mainstream thing (or celebrity or whatever). That’s to say that by the time 60 Minutes gets around to reporting on some sort of long-term trend we’re usually already mired DEEP within this event. Sometimes, not just as a nation, but in this case, as with global warming or AIDS, as a planet.

What is so remarkable to ponder—and it’s touched on somewhat in this piece—is how cost-efficient advances in automation will probably have the most negative consequences in countries like China and India, not the first world countries where automated manufacturing plants will probably mostly end up being built. Shipping to the US from China, for instance, adds a not inconsiderable amount of cost to the price of a given commodity. To purchase one of the robots featured in the segment would be cheaper than three years of Chinese labor. There’s cold comfort in that for the “Made in America” crowd, of course, as it’s not like there’s going to be that many more jobs created in America if production is brought back to these shores.

There sure will be a hell of a lot fewer opportunities for employment in the Third World, though, this much seems assured.

It brings up the question of how the wealth of nations will be divvied up when only the holders (hoarders, if you prefer) of capital, employing armies of automatons and few human beings, will hold ALL the cards? Clearly not sustainable and besides that, WHO is going to buy their products anyway when no one will have a job or any money in the first place? In America, and around the world, too, we’re moving away from the notion of “Fordism” at a breakneck pace.

The long-term implications for the longevity of the capitalist system seem dire indeed when viewed through this lens (and let’s not forget, this sort of circling the toilet bowl endgame was predicted by a certain Mr. Karl Marx many, many years ago). The implications of all of this are enormous.

Labor unions will become obsolete in such a scenario, although in a sense, they’ll be replaced by much larger armies of the long-term unemployed!

The flipside of all this is a free-market sort of argument that holds as prices for automated “workers” would come down, there should be a corresponding explosion in small business innovation. Whereas, I do think that is possible with certain cases, how many people do you personally know who would make good entrepreneurs in this bold robotic future?

Unless there’s an Elon Musk born every second, we’re doomed!
 

Written by Richard Metzger | Discussion
Karl Marx’s ‘Das Kapital’ in Manga!
08.17.2012
07:00 am

Topics:
Books
Politics
Pop Culture
Thinkers

Tags:
Karl Marx
manga


 
You would think that it would be difficult to take a daunting 19th century masterpiece of economics, philosophy and history like Karl Marx’s Das Kapital and turn that imposing intellectual colossus (which is well over 1000 pages in length) into a simple, straightforward and easy to follow comic book, but you would be dead wrong.

In 2008, Tokyo-based publishing company East Press published a manga version of Das Kapital by Variety Artworks that flew off the shelves, selling 6000 copies in the first few days and getting discussed in the media the world over. The manga market is huge in Japan, generating billions of dollars, even so, Das Kapital: Manga de Dokuha (“Reading ‘Das Kapital’ through Manga”) was one of the publishing events of that year. Now it’s being published in a new English translation as Capital In Manga! by radical publishing house Red Quill Books.

I loved it. Admittedly, I’m one of those people who is all for recommending to someone who is considering taking on Marx’s thought, to TAKE THE EASIEST ROUTE. Reading Marx in the original is not something that’s easy to do, but trust me, if you want to “get the gist” of Marxian concepts, it’s not really as difficult as you might think. There is no better way to dive in than via popular books like Terry Eagleton’s highly readable Why Marx Was Right or Rius’ masterfully done cartoon primer Marx for Beginners, and now this new Marxist manga.

At first I found myself reading Capital In Manga! skeptically. How are they going to pull something like this off? Like most manga, the characters are simplistic, but in the case of trying to create a fictional bridge from this century back to Marx’s original writings about capital formation and surplus labor, and make that easy to understand, it’s not like it could really be any other way. If you are looking for nuanced character development, you’re not going to find it here.

The simple but effective narrative in Capital In Manga! follows Robin, an earnest young cheese maker who works alongside his widower father. The father and son make the best tasting cheese around and there are long lines at the market for what they produce. For the father, this is enough, but his son has other ambitions and fears poverty.

That’s when Daniel, a shrewd and cynical capitalist investor enters Robin’s life and offers to set him up in business (In a movie version, evil Daniel would be played by a young James Spader.) As the story plays out, the reader sees Robin’s moral dilemma with Daniel’s brutal exploitation of their employees, and we meet Carl, a brave worker at the cheese factory who fights back against the harsh working conditions and resents that he and the factory workers are making someone else wealthy with their labor. (It’s fun to consider how Capital In Manga!—which can be read in 45 minutes or less—is pretty much the Bizarro World polar opposite of Ayn Rand’s dryly unsubtle and overlong polemic novel Atlas Shrugged!)

Capital In Manga! renders Marxian concepts about as easy to understand as, well, Who Moved My Cheese? (or any comic book for that matter) and will set off several “light bulbs” over the reader’s head, just as that simple “parable” about business innovation did for the entrepreneurial types who made it a best-seller in the 1990s. Even someone who thinks that they’re hostile to Marxism might unexpectedly find something there for them when it is presented in this broadly drawn, but emotionally satisfying way.

To expect that even one person in 10,000 is going to care to slog through over a thousand pages of a dense 19th century philosophical treatise in 2012, is probably expecting too much, but this doesn’t mean that there aren’t new and novel ways to bring Marxism to a popular audience and it’s wonderful to see this novel Japanese publishing experiment successfully translated for English readers.  Just as this unconventional approach to Marx and manga has helped to spread the message of Marxism in modern day Japan (where nearly a third of the population is unemployed or underemployed and young people are increasingly pessimistic about their futures) this quirky attempt ito create a new kind of 21st century popular socialist meme is a welcome one.

(In case you are wondering what else is out there like this title, East Press has additionally published manga guides for Dante’s Divine Comedy, The Brothers Karamazov, Goethe’s Faust, Hitler’s Mein Kampf, The Metamorphosis by Kafka and Friedrich Nietzsche’s Thus Spoke Zarathustra (I’d love to see that one). In 2011 The Critique of Pure Reason by Immanuel Kant was given the manga treatment by Variety Artworks, the same company who are responsible for the original Japanese revisioning of Marx’s treatise.)

Written by Richard Metzger | Discussion
The (Not So Promising) Future of Shitty Jobs: Meet your noodle-making robot overlord
07.27.2012
10:11 am

Topics:
Economy

Tags:
Karl Marx
robots


 
Looks like it’s Ultraman who is gonna be the one to steal your job, gringo... Via Orange News:

A new noodle restaurant in China has captured diners’ attention by employing a noodle-making robot.

The restaurant in Jilin City, north-east China’s Jilin Province, has attracted many locals to come and try noodles made by ‘Ultraman’.

Restaurant owner Qian Hu bought the robot for 20,000 Yuan (£2,000) and believes its efficiency is twice that of a human worker.

He explained: “More importantly I don’t need to pay him, and for a consecutive work of 12 hours it only consumes 3 kWh of electricity. And the noodles it slices are even thinner than those of human workers.”

That’s right, he can do it better than you, puny human. Twice as good! Take that!

The thought of a world population of over 7 billion people being increasingly put out of work by robots—the most menial jobs will be the ones to go first—is a rather bleak thing to contemplate isn’t it? Then again, maybe there’s an opportunity in all off this somehow? Who knows?

Written by Richard Metzger | Discussion
Global Crisis: the Convergence of Marx, Orwell and Kafka


 
A guest post from our esteemed, super-smart friend, Charles Hugh Smith, publisher of the Of Twos Minds blog and author of the new book, Resistance, Revolution, Liberation: A Model for Positive Change
 
The global crisis is best understood as the convergence of the modern trends identified by Marx, Orwell and Kafka. Let’s start with Franz Kafka, the writer (1883-1924) who most eloquently captured the systemic injustices of all powerful bureaucracies—the alienation experienced by the hapless citizen enmeshed in the bureaucratic web, petty officialdom’s mindless persecutions of the innocent, and the intrinsic absurdity of the centralized State best expressed in this phrase: “We expect errors, not justice.”

If this isn’t the most insightful summary of the Eurozone debacle, then what is? A lawyer by training and practice, Kafka understood that the the more powerful and entrenched the bureaucracy, the greater the collateral damage rained on the innocent, and the more extreme the perversion of justice.

The entire global financial system is Kafkaesque: the bureaucracies of the Central State have two intertwined goals: protect the financial Elites from the consequences of their parasitic predation, and protect their own power and perquisites.

While Marx understood the predatory, parasitic nature of Monopoly Capitalism, he did not anticipate the State’s partnering with Cartel/Crony Capitalism; in effect, the State has appropriated the appropriators, stripmining the citizenry to protect the financial sector from the consequences of their “business model” (leverage, fraud, embezzlement and the misrepresentation of risk). But the State doesn’t merely enable (“regulate”) the predation of financiers; it also stripmines the citizenry to fund its own expansion into every nook and cranny of civil society.

This is where Orwell enters the convergence, for the State masks its stripmining and power grab with deliciously Orwellian misdirections such as “the People’s Party,” “democratic socialism,” and so on.

Orwell understood the State’s ontological imperative is expansion, to the point where it controls every level of community, markets and society. Once the State escapes the control of the citizenry, it is free to exploit them in a parasitic predation that is the mirror-image of Monopoly capital. For what is the State but a monopoly of force, coercion, data manipulation and the regulation of private monopolies?

What is the EU bureaucracy in Brussels but the perfection of a stateless State?

As Kafka divined, centralized bureaucracy has the capacity for both Orwellian obfuscation (anyone read those 1,300-page Congressional bills other than those gaming the system for their private benefit?) and systemic avarice and injustice.

The convergence boils down to this: it would be impossible to loot this much wealth if the State didn’t exist to enforce the “rules” of parasitic predation. In China, the Elite’s looting proceeds along somewhat different rules from the looting of Europe and the U.S., but the end result is the same in all financialized, centrally managed economies: an expansive kleptocracy best understood as the convergence of Marx, Orwell and Kafka.

This has been a guest post from Charles Hugh Smith, publisher of the Of Twos Minds blog and author of the new book, Resistance, Revolution, Liberation: A Model for Positive Change

Written by Richard Metzger | Discussion
Is Marxism becoming mainstream with younger people?


 
There’s a “must read” article that appeared on The Guardian’s website—ironically on the 4th of July, America’s national celebration of revolution—about a new-found interest in the ideas of Karl Marx among younger people. Going on in London this week is a five-day seminar/festival, organized by the Socialist Workers’ Party, called Marxism 2012. The festival is expected to draw several thousand people, many of them in their 20s and early 30s.

At the start of the piece, French Marxist thinker Jacques Rancière lays out a remarkably blunt truth to Guardian editor Stuart Jeffries: “The domination of capitalism globally depends today on the existence of a Chinese Communist party that gives de-localised capitalist enterprises cheap labour to lower prices and deprive workers of the rights of self-organisation. Happily, it is possible to hope for a world less absurd and more just than today’s.”

Aren’t Marx’s venerable ideas as useful to us as the hand loom would be to shoring up Apple’s reputation for innovation? Isn’t the dream of socialist revolution and communist society an irrelevance in 2012? After all, I suggest to Rancière, the bourgeoisie has failed to produce its own gravediggers. Rancière refuses to be downbeat: “The bourgeoisie has learned to make the exploited pay for its crisis and to use them to disarm its adversaries [Tea party dupes, he is talking about YOU—RM]. But we must not reverse the idea of historical necessity and conclude that the current situation is eternal. The gravediggers are still here, in the form of workers in precarious conditions like the over-exploited workers of factories in the far east. And today’s popular movements – Greece or elsewhere – also indicate that there’s a new will not to let our governments and our bankers inflict their crisis on the people.”

That, at least, is the perspective of a seventysomething Marxist professor. What about younger people of a Marxist temper? I ask Jaswinder Blackwell-Pal, a 22 year-old English and drama student at Goldsmiths College, London, who has just finished her BA course in English and Drama, why she considers Marxist thought still relevant. “The point is that younger people weren’t around when Thatcher was in power or when Marxism was associated with the Soviet Union,” she says. “We tend to see it more as a way of understanding what we’re going through now. Think of what’s happening in Egypt. When Mubarak fell it was so inspiring. It broke so many stereotypes – democracy wasn’t supposed to be something that people would fight for in the Muslim world. It vindicates revolution as a process, not as an event. So there was a revolution in Egypt, and a counter-revolution and a counter-counter revolution. What we learned from it was the importance of organisation.”

This, surely is the key to understanding Marxism’s renaissance in the West: for younger people, it is untainted by association with Stalinist gulags. For younger people too, Francis Fukuyama’s triumphalism in his 1992 book The End of History – in which capitalism seemed incontrovertible, its overthrow impossible to imagine – exercises less of a choke-hold on their imaginations than it does on those of their elders.

This is extremely significant, as Jeffries rightly points out. Even in America this is increasingly the case. Young people who have graduated from college with crushing amounts of debt, no health insurance, and who work in dead end jobs (if they can get a job at all) with no clear path to begin their careers are becoming quite interested in understanding what the hell happened. It’s really no surprise that they’ve started to google Capitalism’s greatest critic and read up on his ideas. Many people who joined in various OWS protests around the country were further exposed to Marxist critiques of Capitalism and Slovenian Marxist philosopher Slavoj Žižek who has become an unlikely intellectual rockstar to young, politically active American leftists who hang on his every word. These recent “converts,” if you will, have only just started to do more research and talk to and exchange ideas with other like-minded people.

As today’s disillusioned, but media-savvy 20-somethings begin their own inroads to influencing the culture, expect that music, film, TV, blogs and even our mainstream news outlets will become more friendly to the ideas of Marx and Engels, even if they aren’t always given credit for them. Ideas that 160 years after they were originally formulated, are starting to make so much sense to intelligent young people living through an age of Capitalism in deep crisis. Will American ever embrace “Marxism,” per se? That seems doubtful, of course, simply due to the cultural knee-jerk taboo around this particular “ism,” but still there is the rather pressing issue of Marxism’s historical inevitability:

Call it whatever you want to, but a situation where a mere 1% of the population control most of the wealth doesn’t seem like it’s going end so well for the ones doing the hoarding.

There’s a big problem that Capitalism increasingly faces: Because of the Internet, over the past fifteen years or so, the average person has easy access to information sources that they never dreamed of or knew existed in the first place. Before the mid-90s, it was much more difficult for the man on the street to be able draw a connection between the price of a particular drug and the net worth of the CEO of the pharmaceutical company that manufactures it. Today, they are beginning to understand that when a CEO of a pharmaceutical company is making $50,000,000 a year that they are paying a TAX ON THEIR OWN HEALTH for the sake of that rich asshole’s obscene salary with EVERY PILL THEY TAKE. Or consider the tax paid directly to the billionaire Walton family from EVERY product sold in a Wal-Mart. It’s a breath-taking con when you consider that ONE GODDAMN FAMILY basically gets to add their own personal tariff to every product sold in the world’s largest retail behemoth!

HOORAY FOR FUCKING CAPITALISM.

HOORAY FOR WALL STREET VAMPIRES.

Only a delusional idiot, the Royal family, the Walton family or a charter member of the 1%, would even wish for the current system to stand as it is. And the opinion of anyone who thinks America or Europe (or China or Russia for that matter) is still going to be doing business the same way in 2032 as it is done in 2012 should be dismissed with extreme derision.

Of course, the American people aren’t going to tip sales of The Communist Manifesto (the world’s #2 selling book of all time) to overtake The Bible any time soon, but then again they needn’t read a German philosophical treatise on how the price of a particular commodity is derived, either, when they’ve got folks like Jon Stewart, Cenk Uygur, Martin Bashir and Rachel Maddow to explain it to them.

In the same sense that ideas once common to the lunatic fringe of the John Birch Society have now achieved mainstream “respect” via Glenn Beck and Fox News, so will covertly Marxist ideas become mainstreamed as younger people coming of age with their eyes wide open in this shitty economy have their day. Eventually the major tenants of Marxism will arrive in the American marketplace of ideas in the guise of plain-talking, good old-fashioned common sense.

Back to Jeffries:

For a different perspective I catch up with Owen Jones, 27-year-old poster boy of the new left and author of the bestselling politics book of 2011, Chavs: the Demonisation of the Working Class. He’s on the train to Brighton to address the Unite conference. “There isn’t going to be a bloody revolution in Britain, but there is hope for a society by working people and for working people,” he counsels.

Indeed, he says, in the 1860s the later Marx imagined such a post-capitalist society as being won by means other than violent revolution. “He did look at expanding the suffrage and other peaceful means of achieving socialist society. Today not even the Trotskyist left call for armed revolution. The radical left would say that the break with capitalism could only be achieved by democracy and organisation of working people to establish and hold on to that just society against forces that would destroy it.”

Owen Jones is right. A violent revolution in America seems beyond a remote possibility, as well, whether from the left (not enough stomach for violence) or right (stomachs too fat for being able to inflict much violence). The future American revolution will be one won at the ballot box and through superior demographic numbers. As has been pointed out many, many times, in many, many places, the heyday of the reactionary right that began with Reagan is increasingly being seen in the country’s rear view mirror, demographically speaking. America will always have its conservative wingnuts, it’s just that we’ll have far fewer of them as the Tea partiers and Fox News viewers start to die off in the coming years. Democracy is a numbers game. It always has been.

Having toiled at a major daily newspaper myself, I won’t hold it against Stuart Jeffries that he was obliged to quote at least one “Debbie Downer” about the common, hackneyed misconception of what “Marxism” means, in this case Prof. Alan Johnson, of Edge Hill University, who thinks Communism, “[a] worldview recently the source of immense suffering and misery, and responsible for more deaths than fascism and Nazism, is mounting a comeback; a new form of leftwing totalitarianism that enjoys intellectual celebrity but aspires to political power,” on the World Affairs blog:

“The New Communism matters not because of its intellectual merits but because it may yet influence layers of young Europeans in the context of an exhausted social democracy, austerity and a self-loathing intellectual culture,” wrote Johnson. “Tempting as it is, we can’t afford to just shake our heads and pass on by.”

That’s the fear: that these nasty old left farts such as Žižek, Badiou, Rancière and Eagleton will corrupt the minds of innocent youth. But does reading Marx and Engels’s critique of capitalism mean that you thereby take on a worldview responsible for more deaths than the Nazis? Surely there is no straight line from The Communist Manifesto to the gulags, and no reason why young lefties need uncritically to adopt Badiou at his most chilling. In his introduction to a new edition of The Communist Manifesto, Professor Eric Hobsbawm suggests that Marx was right to argue that the “contradictions of a market system based on no other nexus between man and man than naked self-interest, than callous ‘cash payment’, a system of exploitation and of ‘endless accumulation’ can never be overcome: that at some point in a series of transformations and restructurings the development of this essentially destabilising system will lead to a state of affairs that can no longer be described as capitalism”.

That is post-capitalist society as dreamed of by Marxists. But what would it be like? “It is extremely unlikely that such a ‘post-capitalist society’ would respond to the traditional models of socialism and still less to the ‘really existing’ socialisms of the Soviet era,” argues Hobsbawm, adding that it will, however, necessarily involve a shift from private appropriation to social management on a global scale. “What forms it might take and how far it would embody the humanist values of Marx’s and Engels’s communism, would depend on the political action through which this change came about.”

This is surely Marxism at its most liberating, suggesting that our futures depend on us and our readiness for struggle. Or as Marx and Engels put it at the end of The Communist Manifesto: “Let the ruling classes tremble at a communist revolution. The proletarians have nothing to lose but their chains. They have a world to win.”

Read “Why Marxism is on the rise again” by Stuart Jeffries at The Guardian

Thank you, RU Sirius!

Written by Richard Metzger | Discussion
Das Kapital: Karl Marx credit card a hit in Germany
06.19.2012
08:50 am

Topics:
Amusing
Economy

Tags:
Germany
Karl Marx


 
“Workers of the world, shop til you drop!”

“When you’re short of Das Kapital, just reach for your Marx card, comrade…”

Oh the blessed irony of this, German bank Sparkasse Chemnitz held an online vote so the public could choose between ten different images for the bank’s new credit card.

Karl Marx won.

Via Reuters:

Before the fall of the Berlin Wall, citizens of Chemnitz - then known as Karl-Marx-Stadt - and the rest of East Germany would have seen Marx’s face on their 100-Mark banknotes.

Flattened during World War Two, Chemnitz was rebuilt as a model socialist city and still boasts a seven meter-tall bust of Marx in its center. The city has been economically depressed since the end of communism and its population has shrunk by 20 percent.

The east has witnessed a wave of nostalgia in recent years for aspects of the old East Germany, or DDR, where citizens had few freedoms but were guaranteed jobs and social welfare. The trend is not limited to the region.

“We’ve even received inquiries from clients in western German states asking whether they could open a local account with us to get a card bearing Marx’s features,” Sparkasse’s Wirtz told Reuters.

A 2008 survey found 52 percent of eastern Germans believed the free market economy was “unsuitable” and 43 percent said they wanted socialism back.

As someone who has considered himself “a Marxist” for some 30 years, I was quite amused by this. If a bank ever offered me a credit card with Karl Marx’s face on it—not that this would be very likely in the US of A. of course—on principle, I’d max it out in one day and tell them to go fuck themselves…

“The last capitalist we hang shall be the one who sold us the rope.”

Priceless!

Written by Richard Metzger | Discussion
Books By Their Covers: Oliver Bevan’s Fabulous Op-Art Designs for Fontana Modern Masters

Fontana_Modern_Master_Books_1_10
 
In 1970, Fontana Books published the first of 7 paperback books in a series on what they termed Modern Masters - culturally important writers, philosophers and thinkers, whose work had shaped and changed modern life. It was a bold and original move, and the series launched on January 12th with books on Camus, Chomsky, Fanon, Guevara, Levi-Strauss, Lukacs, and Marcuse.

This was soon followed in 1971 with the next set of books on McLuhan, Orwell, Wittgenstein, Joyce, Freud, Reich and Yeats. And in 1972-73 with volumes on Gandhi, Lenin, Mailer, Russell, Jung, Lawrence, Beckett, Einstein, Laing, and Popper.

Fontana Modern Masters was a highly collectible series of books - not just for their opinionated content on the likes of Marx or Proust, Mailer or McLuhan, but because of Oliver Bevan’s fabulous cover designs.

This eye-catching concept for the covers came from Fontana’s art director, John Constable, who had been experimenting with a Cut-Up technique, inspired by William Burroughs and Brion Gysin and based on The Mud Bath, a key work of British geometric abstraction by the painter David Bomberg. It was only after Constable saw Oliver Bevan’s geometric, Op Art at the Grabowski Gallery in London, did Constable decide to commission Bevan to design the covers.

The first full set of books consisted of 9 titles. Each cover had a section of a Bevan painting, which consisted of rectilinear arrangements of tesselating block, the scale of which was only fully revealed when all 10 covers were placed together. Bevan designed the first ‘3 sets of 10’ from 1970-74. He was then replaced by James Lowe (1975-79) who brought his own triangular designs for books on Marx, Eliot, Pound, Sartre, Artaud and Gramsci. In 1980, Patrick Mortimer took over, with his designs based on circles.

The original Fontana Modern Masters regularly pop-up in secondhand bookshops, and are still much sought after. Over the years, I have collected about 20 different volumes, but have yet to create one complete painting. Here are a few samples, culled from my own collection and from the the web.
 
Fontana_Modern_Masters_Set
 
A small selection of Fontana Modern Master covers, after the jump…
 

Written by Paul Gallagher | Discussion
Karl Marx is STILL right


 
Nobel economist Michael Spence, working at the behest of the Council on Foreign Relations, has co-authored a startling new paper with NYU’s Sandile Hlatshwayo. The two did an enormous amount of number crunching and analyzing of how the US economy has been structured for the past 20 years, and in particular, they examined employment trends. It was not a pretty picture that emerged from all of those details.

Well, I guess that would all depend upon which side of the fork you’re on, wouldn’t it?

As the output and productivity of the American worker increased—a LOT, I should add—during the past two decades, jobs still continued to be outsourced to other countries with cheaper labor pools, and fewer opportunities for economic advancement presented themselves for many Americans. All the while, the $$$ for all of that increased productivity didn’t go to the worker bees themselves, it went to the top, to the capitalists and investors class. To parasites like Mitt Romney and his buddies at Bain Capital.

The CFR report’s conclusions are particularly grim for people who have found themselves slipping out of the middle class towards precarious lives and who feel hopeless to do anything about it, but it’s Marxism 101 for the economic literate.

It’s a race to the bottom and “tag” you’re it!

From Reuters:

The take-away is this: Globalization is making U.S. companies more productive, but the benefits are mostly being enjoyed by the C-suite. The middle class is struggling to find work, and many of the jobs available are poorly paid.

Here’s how Mr. Spence and Ms. Hlatshwayo put it: “The most educated, who work in the highly compensated jobs of the tradeable and nontradeable sectors, have high and rising incomes and interesting and challenging employment opportunities, domestically and abroad. Many of the middle-income group, however, are seeing employment options narrow and incomes stagnate.”

Mr. Spence notes the benefit to consumers of globalization: “Many goods and services are less expensive than they would be if the economy were walled off from the global economy, and the benefits of lower prices are widespread.” He also points to the positive impact of globalization, particularly in China and India: “Poverty reduction has been tremendous, and more is yet to come.”

I’m sure Americans living in “right to work” states are just jumping for joy to be competing with wage-earners in China and India.
 

 
Free trade and the free flow of capital means lower prices for the consumer, true, but when someone in China or India is doing that very same computer programming job that used to be your job in the midwest—information workers will have the most precarious jobs of all moving forward—it’s not like you’ll be able to afford much more than rice and beans at the Wal-Mart anyway.

Yes, there’s a high cost to low price. The two are pretty well interconnected, as we’ve seen, but this is what the “free market” is supposed to do, silly. And don’t forget, it was Wal-Mart that put the local shops out of business to begin with.

Karl Marx predicted all of this. ALL of it.

He’s the most accurate prophet in history, with a record a helluva lot better than Nostradamus!

And to all of the naysayers who claim that a “command economy” doesn’t work, I present to you Wal-Mart itself, the most successful example of a command economy the world has ever seen!

Mr. Spence’s paper should be read alongside the work that David Autor, an economist at the Massachusetts Institute of Technology, has been doing on the impact of the technology revolution on U.S. jobs. Mr. Autor finds that technology has had a “polarizing” impact on the U.S. work force — it has made people at the top more productive and better paid and hasn’t had much effect on the “hands-on” jobs at the bottom. But opportunities and salaries in the middle have been hollowed out.

Taken together, here’s the big story Mr. Spence and Mr. Autor tell: Globalization and the technology revolution are increasing productivity and prosperity. But those rewards are unevenly shared — they are going to the people at the top in the United States, and enriching emerging economies over all. But the American middle class is losing out.

It may seem surprising that it takes a Nobel laureate and sheaves of economic data to reach this conclusion. But the analysis and its provenance matter, because this basic truth about how the world economy is working today is being ignored by most of the politicians in the United States and denied by many of its leading business people.

Here’s where it gets much grimmer, as the article’s author, Chrystia Freeland (who has been the Global Editor-at-Large of Reuters since 2010) tells of a recent breakfast at the CFR that she moderated. The speaker that morning was Randall Stephenson, chief executive of AT&T.

If this is the mindset of the leaders of corporate America today, we’re doomed:

One of the Council of Foreign Relations members in the audience was Farooq Kathwari, the chief executive of Ethan Allen, the furniture manufacturer and retailer. Mr. Kathwari is a storybook American entrepreneur. He arrived in New York from Kashmir with $37 in his pocket and got his start in the retail trade selling goods sent to him from home by his grandfather.

He asked Mr. Stephenson: “Over the last 10 years, with the help of technology and other things, we today are doing about the same business with 50 percent less people. We’re talking of jobs. I would just like to get your perspectives on this great technology. How is it going to overall affect the job markets in the next five years?”

Mr. Stephenson said not to worry. “While technology allows companies like yours to do more with less, I don’t think that necessarily means that there is less employment opportunities available. It’s just a redeployment of those employment opportunities. And those employees you have, my expectation was, with your productivity, their standard of living has actually gotten better.”

HUH? Redeployment of employment opportunities? What the fuck IS this guy talking about?

I recently heard a radio report that indicated that there is ONE factory employing around 15 people in Japan that’s responsible for nearly 80% of the world’s output of a certain sized HD screen. Consider how many people would have worked at a Magnavox television plant in the mid-fifties. Where were those employment opportunities ultimately “redeployed?”

Cinnabon?

Bob Evans?

Starbucks?

7-Eleven?

With advanced automation, robotics and so forth, the American worker always was going to become obsolete in the long run, but the speed with which it is happening has gone from a trot to full gallop since the early 90s. Stephenson’s contention that standards of living have improved is ludicrous. Perhaps for him and for all the Cuban cigar-smoking fatcats at the country club in Westchester, but what about the rest of us?

Maybe the all-powerful, wise and benevolent free market will help us?!?!

(Sorry all of that cigar smoke is making me *cough*)

Mr. Spence’s work tells us that simply isn’t happening. “One possible response to these trends would be to assert that market outcomes, especially efficient ones, always make everyone better off in the long run,” he wrote. “That seems clearly incorrect and is supported by neither theory nor experience.”

Not to take anything away from Mr. Spence and Ms. Hlatshwayo, but there was this famous book written by a Mr. Marx and a Mr. Engels—two of the most dangerous minds in history—a hundred and fifty-some years ago that predicted all of this shit with amazing, laser-like accuracy.

Mr. Spence says that as he was doing his research, he was often asked what “market failure” was responsible for these outcomes: Where were the skewed incentives, flawed regulations or missing information that led to this poor result? That question, Mr. Spence says, misses the point. “Multinational companies,” he said, “are doing exactly what one would expect them to do. The resulting efficiency of the global system is high and rising. So there is no market failure.”

Okay, stop for a second. Read that last paragraph again, won’t you? Now read it a third time.

Mr. Spence is telling us that global capitalism is working, but that the American middle class is losing out anyway.

Yep, exactly like a certain Mr. Marx predicted would happen. What remains to be seen is how long it takes for the average American to wake up to what’s going on, when the elites are so hellbent on trying to keep them as confused as possible. Less sophisticated people can be forgiven for falling for conspiracy theories, when the REAL action is right out in the open: No one ever thinks to look there!

Mr. Spence admits he has no easy answers. American politicians are focused on a budget debate that is superficial, premature and ultimately about something pretty easy to figure out. Instead, we should all be working on the much bigger problem of how to make capitalism work for the American middle class.

Karl Marx had the answer to that, too…
 

 

Written by Richard Metzger | Discussion
Teachings of Marx for Girls and Boys


 
In the trailer for that upcoming Obama conspiracy theory movie, I spotted the cover for this book, Teachings of Marx for Girls and Boys and immediately set out to ABE Books online to find a copy. I didn’t score—how many of these puppies would have been printed in the first place, I wonder—but I did find POSTERS!

Yes, posters of this marvelous image are for sale at the Georgetown Bookstore’s website. Click here to order online.

The author of Teachings of Marx for Girls and Boys, William Montgomery Brown (1855 – 1937) or as he was also known, “Bad Bishop Brown,” was an Anglican clergyman from Ohio is remembered as the first Anglican Bishop to be tried for heresy since the Reformation. Additionally Brown, who evolved in his lifetime from being a missionary and the Bishop of Arkansas to a committed Marxist, was the first member of the clergy in America to be deposed (of any denomination) for being a heretic.

Brown felt that his real ministry began at age 71 when he started lecturing to the working class about Karl Marx and Socialism.

Written by Richard Metzger | Discussion
Get your pitchforks ready: A tale of a 1% greed-head that will fry your mind!


 
In The Objectivist Newsletter: Vol. 4, No. 12, December, 1965, Ayn Rand published an essay titled “Check Your Premises: What Is Capitalism?” 

In part 2 of the two-part article, Rand asked her followers:

“Why should Elvis Presley make more money than Einstein?” The answer is: Because men work in order to support and enjoy their own lives-and if many men find value in Elvis Presley, they are entitled to spend their money on their own pleasure. Presley’s fortune is not taken from those who do not care for his work (I am one of them) nor from Einstein—nor does he stand in Einstein’s way—nor does Einstein lack proper recognition and support in a free society, on an appropriate intellectual level.

Fair point, zealous defender of Capitalism crazy lady!

But how to square that argument against one of the single most egregious examples of corporate greed-headism that I have perhaps ever heard of in my entire life?

I don’t think it can be done.

In the past few days, articles relating to the outrageous compensation package paid to one John H. Hammergren, the CEO of the McKesson Corp., a giant medical-supply wholesaler based in San Francisco, have been popping up in different places around the Internet.

The Daily Beast’s Gary Rivlin referred to Hammergren as “...one of the nation’s highest-paid CEOs—and you’ve never heard of him.” That was true for me, too, at least until yesterday, but apparently he’s been hiding right in the open. Hammergren ranked 14th on Forbes’s 2011 executive-pay list and 22nd the year before.

I think at this point, though, Hammergren’s cover has been definitively blown:

Since taking over as the CEO of McKesson—which is the main pharmaceutical supplier to large retail chains like Wal-Mart and Rite Aid, hospitals and nursing homes—in 1999, when the previous management was ousted in an accounting scandal, Hammergren has made $500 million dollars.

That’s even more than the $442 million McKesson has set aside to settle a class-action lawsuit that was brought against it, charging that McKesson conspired to drive up the price of prescription drugs!

Read those last two paragraphs again, won’t you? How DO they set the wholesale costs of drugs, anyway?!?!? Not that these two matters have anything to do with it…!

From The Daily Beast:

For a moment, [New York-based compensation consultant, James] Reda is silent. “$40 million, $50 million a year is excessive, no matter what the yardstick,” he says. The average pay package for a CEO running a top 100 company these days, Reda says, is around $12 million. That includes everything, from salary to stock awards to contributions to a retirement account. Yet last year McKesson contributed more than $13 million just to Hammergren’s pension, according to company documents. Among the other perks he enjoys: a chauffeur to drive his company car, free use of the corporate jet for personal travel, and an extra $17,000 a year to pay for a financial planner because handling all those hundreds of millions is no doubt complicated stuff.

“He doesn’t leave anything on the table, does he?” Reda asks.

Ya, think?

Now if you’ve ever gotten a medical bill for a $4 Q-tip or a $3 cotton ball, or you pay out-of-pocket each month for expensive pharmaceuticals to keep you alive, it might make you puke to realize that, well, considering the simple rules of mathematics (no higher authority is required here) there is a very high likelihood that you personally might be paying some small part of this fat cat’s income each and every month, because he’s quite literally making a killing—FROM SICK PEOPLE!

Perhaps buried in the price of each and every pill or injection that you yourself might take, is a contribution to the upkeep of the cushy lifestyle of this great and powerful MAN-GOD, the great John H. Hammergren.

How fucked up is that? Talk about getting your cut, right?

Welcome to free-market healthcare in America the Great! This farce is advanced capitalism as the lowest rung of a Dantean Hell:  I picture a hive of SICK worker bees chained to their honeycomb to produce royal jelly for the queen bee, or king bee in this instance, so they can live on to do it yet another day.

How much more visceral of an example would you require to convince you that the system is completely rigged for the wealthy?

Hell, this goes so far beyond that, it’s the fucking MATRIX, here and now!
.
Ever wonder why the costs of American health care are the highest in the world? I don’t, I’d just like to know how many more capitalist parasites like Hammergren there are taking their own cuts off the top of prescription medicine sales in this country, wouldn’t you? Makes you wonder HOW MANY OTHER PIGS ARE FEEDING AT THE BIG PHARMA TROUGH in a similar manner, doesn’t it?

Poking around, I saw that Hammergren’s compensation package has been questioned before, as Patrick McGeehan wrote in “Suits: The Pension’s In the Bag” published in the The New York Times on June 17, 2007:

John H. Hammergren has plenty of incentives to stay on as chairman and chief executive of the McKesson Corporation, the health care services giant based in San Francisco. But to pad his pension is not one of them.

Mr. Hammergren, who after six years as the chief executive is only 48, could quit tomorrow and immediately collect full pension benefits as if he had worked until retirement. How large would that lump sum be? Almost $76 million. McKesson disclosed that obligation in its latest proxy statement, though it said it had accounted for only about $35 million of it.

So if Mr. Hammergren resigns abruptly, shareholders will have 40 million more reasons to miss him.

But it keeps getting more and more absurd. Via The Daily Beast again:

“As far as I’m concerned, a board that keeps loading up its chief executive with more stock and options each year is, from a shareholder perspective, basically committing theft,” says Albert Meyer, a former accounting professor who runs a money-management firm called Bastiat Capital. It’s all legal, of course, but to Meyer you can tell if an enterprise exists for the benefit of shareholders or insiders by the number of options it awards its top executives. Options aren’t free; they dilute the worth of everyone’s shares. And the practice hurts more than the privileged few. Anyone who owns an index fund of the country’s 500 largest companies owns shares in McKesson, a Fortune 500 company. “It’s nothing short of a massive wealth transfer from the retirement accounts of middle-class Americans to a privileged few,” hidden in the guise of stock-option programs like McKesson’s, Meyer argues.

—snip—

The party won’t stop once the 52-year-old Hammergren retires. Among his lifetime benefits: a personal assistant and office, which the company figures will cost more than $200,000 a year, and the services of a financial counselor—a perk that will eat up $350,000 in profits, according to company estimates. The goodies keep coming even after he dies. If his wife survives him, she will continue receiving his base salary for six months and will also get $2 million in cash. That cash bonus would actually cost the company nearly twice that amount, as it’s promised to cover the widow’s cost of paying taxes on that money.

Okay, I’m sure that you must have a pretty good idea of what’s going on here by now. But do you really want to feel the love?

If Hammergren loses his gig because the company gets sold or there’s a stock takeover, he would get a $469 million payout. If you were him, wouldn’t you work like hell to make sure that happened? What kind of crazy, fucked up performance incentive is THAT?

And this means, of course, that FUTURE sick people will be able to pay that windfall down on McKesson’s behalf, with each and every month’s pharmacy bills!

It’s obscene, isn’t it?

Fox News and the Republican party would call this guy a “job creator.” I call him a parasitic greed-head, growing rich off sick people.

But for all of you Fox News watchers who also read DM, I’ll put it to you another way:

HOW is a compensation package like this NOT A HIDDEN TAX on people’s very lives? It’s free-market tax just on staying alive, paid “freely”(!) to the top executive of this corporation! How could this be seen otherwise, even by the very thickest people out there???

What has THIS GUY, this MAN-GOD John H. Hammergren done that is so great that he deserves some micropayment on your illness? Why is something like this allowed to happen?

It’s positively feudal!

Am I exaggerating here for comic effect?

Replace “arable land” with “pharmaceuticals.”

“Serfdom” with “a hospital stay” or “managing a chronic disease.”

The king’s men come around for a micropayment every time you pop a pill, bucko. How’s this any different? How much choice do you have in the matter? What, you’ll show the king and stop taking the meds that keep you going?

Here’s the thing, like Ayn Rand, I have no trouble with guys like Larry Ellison or Bill Gates or Larry Page (who all started their companies) or even the bloody Kardashians getting rich selling stuff that people want. No one forces any of us to buy any of their products, of course [How much they should be taxed on these vast fortunes is not a subject for now, but in brief, I think “a hell of a lot” should cover it]. But why the fuck should MAN-GOD John H. Hammergren get a micro-payment “tribute” each and ever time someone in the customer, um, “food chain” of the McKesson Corp. has to take a pill?

That’s “freedom” ain’t it?

It’s quite incredible to consider that this ONE MAN’S SALARY could literally raise the price of prescription drugs in this country.

And gosh darn it, why aren’t the major stockholders getting a cut like this, too? OR ARE THEY?

This is what happens when the profit motive is introduced into places where it should not be. Like healthcare. It’s a moral affront, nothing less.

I leave you with this: Guess who approves his own compensation package? Hammergren is the chairman of the board, too!

The board votes on it when he’s out of the room, sure, but guess who is setting their salaries, suckers?

The system is rigged… not for your benefit.

Written by Richard Metzger | Discussion
Karl Marx’s beard
09.21.2011
10:38 am

Topics:
Art

Tags:
Karl Marx


 
How I wish this was in my own home… Or maybe a smaller version? No, one this big!

Sculpture in steel wool by Ukrainian artist Nataliya Slinko. Now on display at the Walker Arts Center in Minneapolis, along with the “Baby Marx” exhibit I blogged about recently.

Via Neatorama

Written by Richard Metzger | Discussion
Baby Marx


 
“Baby Marx” is an ongoing TV pilot project by Mexican artist Pedro Reyes currently on exhibit at the prestigious Walker Art Center in Minneapolis from August 11 to November 27.

Reporting on the advent of the Second French Empire in 1851, Marx famously repeated an insight he had read in a letter from Engels, itself a variation on Hegel: if all great world-historical facts and personages occur twice, the first time they do so as “grand tragedy,” the second as “rotten farce.” A century and a half ago, Marx and Engels regarded this repetition with despair, brandishing the category of farce as a denunciation of Louis-Napoléon Bonaparte’s dictatorship.

In the context of advanced capitalism, however, Pedro Reyes (Mexico City, 1972) asks us, with Baby Marx, to re-evaluate the political inheritance of both repetition and farce.

Taking up a recent trend in the production of Hollywood blockbusters, Reyes proposes to “reboot” the nineteenth century debate between socialism and capitalism. Media moguls such as Ronald D. Moore (Battlestar Galactica) and J.J. Abrams (Star Trek) have similarly resurrected dystopian, Cold War-era visions of the future to great commercial success. Repetition recommends itself in these latter contexts principally as a means of streamlining the production process itself: brand recognition has been subsidized in advance, capitalizing on consumers’ prior emotional investments in the franchise’s narrative.

Reyes and his team are actually shooting new scenes for “Baby Marx” at the Walker Art Center. The behind the scenes process is what the exhibit is all about. I think this is a funny idea, but I don’t think it’s funny enough. I’ve read that Reyes hired two writers from an Adult Swim show to help punch it up a bit in that department. “Baby Marx” has been pitched to HBO and Japanese TV execs, who both apparently turned it down. In the age of The Daily Show, South Park and Bill Maher, something like this would require an absolutely savage satirical wit to make it come alive and so far this project lacks that, in my never so humble opinion. It’s cool, but it could be a lot better.

The first installment of “Baby Marx,” produced for Japan’s Yokohama Triennial in 2008:
 

 
More “Baby Marx” (and Monty Python’s “Communist Quiz Show” sketch) after the jump…

Written by Richard Metzger | Discussion
The Global Class War & The End of Capitalism Go Mainstream


The Ouroboros eats its own tail.

“We thought the markets work. They’re not working.”—Dr. Nouriel Roubini

I have always maintained that the global future will ultimately be a socialist one, but it was not easy to “keep the faith” after the collapse of the Soviet bloc and the (seemingly) robust (dot)economy of the Clinton years. However, these days Marx’s predictions for voracious end-stage capitalism seem well-vindicated by what we’re seeing take place in Greece, Israel, Iceland and especially in England. The system hollowed itself out from the inside far faster than I ever would have thought possible in 1999.

So as someone whose politics have been more or less wildly out of step with American mainstream opinion for my entire life, I have watched with great bemusement at the surprisingly Marxist-tinged rhetoric that is now being espoused in places like TIME, the Wall Street Journal and Forbes. It doesn’t get much more “establishment” than these venerable publications, I think you’ll agree, which is why they’ve always been such credible markers of where the cultural conversation is headed.

Try this one for size. Joel Kotkin writing at Forbes, “The U.K. Riots And The Coming Global Class War”:

The riots that hit London and other English cities last week have the potential to spread beyond the British Isles. Class rage isn’t unique to England; in fact, it represents part of a growing global class chasm that threatens to undermine capitalism itself.

The hardening of class divisions   has been building for a generation, first in the West but increasingly in fast-developing countries such as China. The growing chasm between the classes has its roots in globalization, which has taken jobs from blue-collar and now even white-collar employees; technology, which has allowed the fleetest and richest companies and individuals to shift operations at rapid speed to any locale; and the secularization of society, which has undermined the traditional values about work and family that have underpinned grassroots capitalism from its very origins.

All these factors can be seen in the British riots. Race and police relations played a role, but the rioters included far more than minorities or gangsters. As British historian James Heartfield has suggested, the rioters reflected a broader breakdown in “the British social system,” particularly in “the system of work and reward.”

In the earlier decades of the 20th century working class youths could look forward to jobs in Britain’s vibrant industrial economy and, later, in the growing public sector largely financed by both the earnings of the City of London and credit. Today the industrial sector has shrunk beyond recognition. The global financial crisis has undermined credit and the government’s ability to pay for the welfare state.

With meaningful and worthwhile work harder to come by — particularly in the private sector — the prospects for success among Britain working classes have been reduced to largely fantastical careers in entertainment, sport or all too often crime. Meanwhile, Prime Minister David Cameron’s supporters in the City of London may have benefited from financial bailouts arranged by the Bank of England, but opportunities for even modest social uplift for most other people have faded.

Forbes. That’s right, that was from Forbes.

On the Project-Syndicate website, and widely covered and quoted elsewhere (including TIME), Nouriel Roubini (aka “Dr. Doom”), the NYU economist who became a high-profile “big brain” pontificator after he accurately predicted the global economic meltdown a few years before everybody else, asked “Is Capitalism Doomed?

Usually, when such thing is posed as a query, the answer in the text tends toward the affirmative. Roubini writes:

So Karl Marx, it seems, was partly right in arguing that globalization, financial intermediation run amok, and redistribution of income and wealth from labor to capital could lead capitalism to self-destruct (though his view that socialism would be better has proven wrong). Firms are cutting jobs because there is not enough final demand. But cutting jobs reduces labor income, increases inequality and reduces final demand.

Recent popular demonstrations, from the Middle East to Israel to the UK, and rising popular anger in China – and soon enough in other advanced economies and emerging markets – are all driven by the same issues and tensions: growing inequality, poverty, unemployment, and hopelessness. Even the world’s middle classes are feeling the squeeze of falling incomes and opportunities.

To enable market-oriented economies to operate as they should and can, we need to return to the right balance between markets and provision of public goods. That means moving away from both the Anglo-Saxon model of laissez-faire and voodoo economics and the continental European model of deficit-driven welfare states. Both are broken.

The right balance today requires creating jobs partly through additional fiscal stimulus aimed at productive infrastructure investment. It also requires more progressive taxation; more short-term fiscal stimulus with medium- and long-term fiscal discipline; lender-of-last-resort support by monetary authorities to prevent ruinous runs on banks; reduction of the debt burden for insolvent households and other distressed economic agents; and stricter supervision and regulation of a financial system run amok; breaking up too-big-to-fail banks and oligopolistic trusts.

Over time, advanced economies will need to invest in human capital, skills and social safety nets to increase productivity and enable workers to compete, be flexible and thrive in a globalized economy. The alternative is – like in the 1930s - unending stagnation, depression, currency and trade wars, capital controls, financial crisis, sovereign insolvencies, and massive social and political instability.

Below, Roubini interviewed by the Wall Street Journal:
 

Written by Richard Metzger | Discussion
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