By James Thompson

On January 9, 2014 the bourgeois liberal Princeton faculty economist Paul Krugman, who completed the best US education money can buy at MIT and Yale, wrote an op-ed piece for the New York Times entitled “The War over Poverty.” http://www.nytimes.com/2014/01/10/opinion/krugman-the-war-over-poverty.html?_r=0out  In the piece, Prof. Krugman discusses the fallacious received view in this country and throughout the other capitalist controlled countries that the plight of the poor is due to some vague fault of the poor. Admirably, Prof. Krugman argues against this insane attempt to blame the poor.

He goes on to argue that low income people in the US “are much healthier and better nourished than they were in the 1960s” and ties this to the success of anti-poverty programs initiated 50 years ago. He concludes “the problem of poverty has become part of the broader problem of rising income inequality, of an economy in which all the fruits of growth seem to go to a small elite, leaving everyone else behind.”

The article elucidates the differences between liberals and conservatives on the issue of poverty. He characterizes conservatives as “callous and mean-spirited.” He sums up the conservative position as “government is always the problem, never the solution; they treat every beneficiary of a safety net program as if he or she were ‘a Cadillac driving welfare queen.’ And why not? After all, for decades their position was a political winner, because middle-class Americans saw ‘welfare’ is something that Those People got but they didn’t.”

He characterizes the liberals’ position as “Meanwhile, progressives are on offense. They have decided that inequality is a winning political issue. They see war-on-poverty programs like food stamps, Medicaid, and the earned income tax credit as success stories, initiatives that have helped Americans in need-and should be expanded. And if these programs enroll a growing number of Americans, rather than being narrowly targeted on the poor, so what?”

He draws the conclusion “So guess what: On its 50th birthday, the war on poverty no longer looks like a failure. It looks, instead, like a template for a rising, increasingly confident progressive movement.”

Although some of Prof. Krugman’s arguments are not completely without merit, he still remains a well-paid cheerleader for bourgeois liberal “safety net” programs. We must concede that such programs as Social Security, Medicare and Medicaid have benefited a great number of people across all economic classes. Even people among the wealthiest classes have benefited from “safety net” programs because they shamelessly shuffle their poorer loved ones off to these programs so they don’t have to pay for their subsistence. The same people hypocritically argue that “safety net” programs should be eliminated. Some doctors even argue that Medicaid and/or Medicare should be eliminated while they bill their patients’ Medicaid and/or Medicare.

What Prof. Krugman and his bourgeois liberal readers fail to recognize is that the US government functions to protect the interests of the capitalists with little or no regard to the interests of the people of this country. He makes a swift tangential reference to the “class war” but fails to recognize that the class war is raging in this country. Even Warren Buffett has warned us that the capitalists are winning the class war with little opposition from the people.

He also fails to recognize that interest among the people in alternative socioeconomic systems such as socialism or communism has grown remarkably recently. Since he does not recognize this reality, he cannot make the connection that income inequality leads to such tendencies.

Although the struggle between liberals and conservatives is real, Prof. Krugman does not seem to recognize that as long as the US government functions to protect the interests of the wealthy, reforms such as the “safety net” programs mentioned above will be under constant attack. And they can be eliminated by the government at any time if it is deemed to be in the interest of the capitalists.

Prof. Krugman also fails to recognize and factor in the fact that the most important interest of the capitalists is to constantly expand profits. Prof. Krugman has also failed to recognize that the necessity for capitalists to constantly expand their profits has led to an era of unending imperialist wars of occupation across the globe. Prof. Krugman fails to recognize that these wars have been conducted for the benefit of the capitalists so that they can continue to expand their profits. He also fails to recognize that the taxpayers have spent far more of their hard-earned money on the wars than the capitalists have made in expanded profits. It should be noted that throughout history capitalist governments have repeatedly spent taxpayer money to protect capitalist profits overseas and the money they spend to protect the profits exceeds the profits themselves.

In short, the Bush and Obama administrations have spent an extraordinary amount of money on killing working people in foreign countries to protect the profits of the capitalists in those countries. Unfortunately, the working man in the US foots the bill. It should be noted that the money expended is nothing compared to the loss of human life as well as permanent physical and mental injuries among the combatants and people in the foreign countries where the imperialist wars are conducted. Of course, the surviving, injured combatants return to the US and their working families must care for them using the pathetic “safety net” programs available. Prof. Krugman fails to note this point as well.

So, a combination of multiple imperialist wars being fought for the benefit of the wealthy at the expense of the poor working people as well as the wholesale exportation of jobs and industry to foreign countries in pursuit of the lowest wages possible have resulted in sustained high unemployment in the US. Meanwhile, the stock market rises and profits continue to expand because capitalists benefit when wages fall. However, there is an end to this process and it is called a crisis of overproduction commonly referred to as an economic depression.

What Prof. Krugman and other bourgeois liberal pundits fail to discuss is that the responsibility for the downward spiral of the economy rests with the capitalist system itself. As long as the system functions to benefit the capitalists, working people will continue to suffer and their suffering will expand proportionally with the expansion of profits.

Another thing that conservatives and liberals are oblivious to is that “safety net” programs tend to perpetuate inequalities between rich and poor. “Safety net” programs are carefully designed to provide a subsistence level for certain segments of the population such as elderly, disabled and to a lesser extent, unemployed pregnant mothers. They allow certain impoverished individuals to survive and such programs are funded by extracting a minimum amount of money from the public wealth created by working people. This enables the wealthy to continue extracting a maximum amount from the public wealth created by working people. In other words, if the public wealth was conceptualized as a pie, “safety net” programs would be a mere sliver. On the other hand, the piece of the pie reserved for the wealthy would be gigantic. The “safety net” programs also serve to reduce the general misery of the public just enough to prevent them from engaging in revolutionary activities. The capitalists must walk a fine line to provide just enough misery relief to prevent revolution and at the same time must limit the misery relief in order to expand their profits. This serves as the basis for the struggle between liberals and conservatives.

Herein lies the difference between bourgeois liberals and Marxist-Leninists. Social democratic bourgeois liberals fight for reforms that they justify on the basis of charity and maintain it is the right thing to do. They characterize their detractors as “callous and mean-spirited.” Marxist-Leninists agree that reforms that benefit working people and the poor are for the good. However, we recognize that such reforms are not sufficient and can easily be overturned and/or manipulated by the capitalists when socioeconomic conditions permit. Marxist-Leninists maintain that only by advancing from capitalism to socialism can humanity build a system which benefits all working people. In a socialist system, workers would achieve political dominance and would form a government that would function to protect the interests of workers.

Perhaps such ideas were not taught to Prof. Krugman and his classmates at MIT and Yale. Such ideas would probably not be received very well at Princeton either.

PHill1917@comcast.net

By James Thompson

As the catastrophe unfolds as a result of the recent earthquake and tsunami in Japan, a question emerges about the ownership of nuclear power plants in particular and utility companies in general. Given the as yet unknown horrors which will undoubtedly result from the damage to the three nuclear reactors near the giant metropolis of Tokyo, the world must consider the wisdom of such dangerous enterprises being under the control of privately held companies. The nuclear reactors in question are owned by the Tokyo Electric Power Company (TEPCO).

The TEPCO corporate overview statement written before the present calamity makes note that one of their power stations remains closed since it was damaged in 2007. The statement also complains that market competition has made it difficult for the company to operate.

Anyone in their right mind knows that nuclear reactors are not toys with which to play. Gambling on humanity’s future and the survival of people living in the vicinity of such facilities is a crime against humanity. Many anti-nuclear activists argue that reactors are too dangerous to be reliable sources of energy for human beings. This incident proves their point.

It is outrageous for such facilities to be in the hands of corporations whose primary goal is not the safety of people, but the amassing of continually expanding profits. As profits fall during times of crisis, corporations cut more and more corners by reducing personnel and slashing safety standards in order to increase profits.

Reports also indicate that the reactors were designed by the multinational corporation General Electric. Again, a private company designing such a facility is truly frightening. As corporations compete with each other for lucrative contracts, the company that can undercut all the others is likely to win. This means lowering safety standards, reducing staff, etc. to increase the profit margin.

We are seeing a lot of global catastrophes these days as a result of this privatization of energy companies and their Hell-bent drive for profits. The BP catastrophes in the Gulf of Mexico and Texas City are two such examples. It is reported that there have been upwards of 800 earthquakes in North Central Arkansas over the last six months which some experts attribute to unbridled natural gas companies’ explorations there.

The safety of human beings and other inhabitants of the world should take precedence over corporate profits. Also, it should be remembered that many humans invest their life savings in such corporate monsters. When catastrophes like the ones mentioned above occur, those people who have invested their money find themselves in poverty after a life of hard work, a frugal lifestyle and careful investing in powerful corporations.

What is needed is a mass movement for the nationalization of utility and energy companies on an international scale. UN oversight and regulation should be implemented to ensure the safest possible conditions for humans and other species living on our very fragile globe. Maximum safety regulations and enforcement of such dangerous industries should be maintained as well as funding for research for the development of such industries and the development of alternative sources of fuel and conservation.

How many more BP, TEPCO, GE and other corporate madness inspired apocalypses will be necessary to put humanity on a sane path to a safe, clean environment? How many more disasters can we, as global residents, survive? What will it take to break the stranglehold that corporations have on our lives and the lives of our children? Fightback must begin now and on a global scale if humanity is to survive the ravages of capitalism!

PHill1917@comcast.net

By James Thompson

There have been many attempts to define fascism in an effort to understand it. Some maintain that fascism is the capitalists’ last option. Others ask, “What is fascism but the death throes of capitalism?”

Fascism has also been described as “the open terrorist dictatorship of the most reactionary, most chauvinistic and most imperialist elements of finance capital.” According to Georgi Dmitrov in a collection of his reports in 1935 and 1936 Against Fascism and War, fascism is “the power of finance capital itself. It is the organization of terrorist vengeance against the working class and the revolutionary section of the peasantry and intelligentsia. In foreign policy, fascism is jingoism in its most brutal form, fomenting bestial hatred of other nations.”

He points out that German fascism, i.e. Nazism or National Socialism, has been the most reactionary form of fascism. He explains, “It has the effrontery to call itself National Socialism, though it has nothing in common with socialism. German fascism is not only bourgeois nationalism, it is fiendish chauvinism. It is a government system of political gangsterism, a system of provocation and torture practiced upon the working class and the revolutionary elements of the peasantry, the petty bourgeoisie and the intelligentsia. It is medieval barbarity and bestiality, it is unbridled aggression in relation to other nations.”

Fascism has manifested itself in many other nations, including most notably, Italy, where Mussolini declared that fascism should be more appropriately called “corporatism” since it represents the merger of the state and corporations. It also appeared in Spain under Franco and other countries. It is important to remember that fascism can be thought of as a logical extension of capitalism. It is one of the forms of rule that can take place under capitalism. It is not an economic system in and of itself. Fascism is a form of government intended to protect the interests of the capitalists through violence and oppression.

The capitalist press has been very effective in blurring the distinction between fascism and communism. Many people in the U.S.A. equate and confuse the terms. The main difference is that fascism is a form of government which safeguards and promotes the interests of the capitalists, whereas communism safeguards and promotes the interests of working people. Fascism is anti-democratic and only allows the political will of the capitalists to be expressed, whereas communism is pro-democratic and only allows the political will of the working people to be expressed.

There has been discussion among leftists in the U.S.A. as to whether the Bush administration was a fascist government. Many maintain that the policies of Bush and his cronies were fascist in nature. Others argue that the policies were different from those seen in fascist countries between the two World Wars. Norman Markowitz in his article “On Guard Against Fascism” published in Political Affairs (May, 2004) states “The domestic policy of fascism was to destroy the independent labor movement, all socialist and communist parties and all democratic movements of the people. The foreign policy of fascism was to completely militarize the society and organize the people to fight imperialist wars and accept and glorify such wars on nationalist and racist grounds…As both ideology and policy, fascism was the rabid response of a decaying capitalism threatened by the workers’ movement at home and anti-colonial movements abroad. The forms that fascism takes can change and be updated, but these are its essential characteristics.”

Gerald Horne, in his article “Threat Needs Study” in Political Affairs (July, 2004), calls for more study of the fascist movement in this country. He points out that there are organizations such as the Southern Poverty Law Center which track the activities of the extreme right. He also notes that the Center for Responsive Politics tracks political donations. He suggests that donations from certain sectors of finance capital could be tracked to political candidates and organizations.

Horne points out that many scholars maintain that fascism has historically developed as a reaction to the development of strong progressive movements which support the interests of working people. He goes on to note that some academics don’t think a fascist movement is likely to develop in the U.S.A. because there is no strong progressive movement currently. Whether there is a viable progressive movement in the U.S.A. is debatable, especially considering the mass movements which have been so conspicuous in 2006. As the right wing has mounted its assault on working people, the positive achievements of the twentieth century in civil rights, education, social security and health care become more apparent. One can conceptualize the recent actions of the right wing as a reaction to the gains of the progressive movement.

From a dialectical materialist point of view, we can see that the development of capitalist, fascist, socialist and communist movements are developments in the struggle between the owners of the means of production and the workers. As Marx pointed out, “All human history hitherto is the history of the class struggle.” The interests of fascism and communism are just as opposed and irreconcilable as the interests of working people and capitalists. As capitalism weakens, its options narrow and it is more likely that it will desperately grasp for fascist methods to sustain itself. Much as a wounded animal is more likely to bite, capitalism in its final stages is more likely to use direct violence against working people. However, just as the animal ensures its own destruction through violence, so it will go for capitalism.

It is noteworthy that there are similarities between the tactics employed by Bush and fascist movements in the past. Don Sloan, in his article “The ‘F’ Word” in Political Affairs (May, 2004) does a good job of comparing fascist tactics and those of the Bush administration. Sloan warns “It can’t happen here? It can happen here? It is happening here.”

It is easy to use the label “fascism or fascist” when trying to discredit our opponents. We, the people of conscience on the left, should be careful however when we apply labels. Applying labels tends to de-humanize people and is a tactic used in military training. Soldiers are taught to think of their “enemies” as subhuman thus making it easier to kill them. We must remember that a number of people apply labels to us. Do we really want to respond to mudslinging by mudslinging ourselves? People on the left use “fascist” far too easily these days to label people promoting policies they don’t like. It would be more useful and productive to attack the policies we do not like and explain that the reason we do not like them is that they are harmful to working people. Throwing around labels and failing to use a class analysis is counterproductive at best. Such tactics may actually hurt the credibility of progressive movements who engage in such behavior.

We do not like the “fascist like” tactics employed by our government, but it is important to remember that unlike Nazi Germany, we still have trade unions, opposition political parties such as the CPUSA, and a progressive press to include the People’s World and others. Writers such as Michael Parenti and publishing companies such as International Publishers are still publishing articles and books. We have not had book burnings and university professors are not clubbed and imprisoned. No Communist in the U.S.A. has been put in a concentration camp by the Bush or Obama administrations.

Nevertheless, it will be important for people on the left to keep identifying clearly those tactics and developments that are not in the interest of the working class and mount united struggles against each and every one of them. This is already happening in the case of the War in Iraq, immigration policy, and the struggle to save social security. These struggles will move our country forward and will help build a strong progressive movement that can bring about positive social change. We cannot forget and must not abandon the gains made in the last century. Indeed, it is time to start making new gains for this century.

Bibliography

Georgi Dmitrov, Against War and Fascism, (International Publishers, New York, 1986).

Gerald Horne, “Threat Needs Study,” Political Affairs, (July, 2004).

Norman Markowitz, “On Guard Against Fascism,” Political Affairs, (May, 2004)

Don Sloan, “The ‘F’ Word,” Political Affairs, (May, 2004).

by Prabhat Patnaik

Original URL: http://mrzine.monthlyreview.org/2010/patnaik221010.html

John Maynard Keynes, though bourgeois in his outlook, was a remarkably insightful economist, whose book Economic Consequences of the Peace was copiously quoted by Lenin at the Second Congress of the Communist International to argue that conditions had ripened for the world revolution. But even Keynes’ insights could not fully comprehend the paradox that is capitalism.

In a famous essay “Economic Possibilities for Our Grandchildren”, written in 1930, Keynes had argued: “Assuming no important wars and no important increase in population, the economic problem may be solved, or be at least within sight of solution, within a hundred years. This means that the economic problem is not, if we look into the future, the permanent problem of the human race” (emphasis in the original).

He had gone on to ask: “Why, you may ask, is this so startling? It is startling because, if instead of looking into the future, we look into the past, we find that the economic problem, the struggle for subsistence, always has been hitherto the most pressing problem of the human race. . . . If the economic problem is solved, mankind will be deprived of its traditional purpose.” He had then proceeded to examine how mankind could fruitfully use its time in such a world.

True, after Keynes had written there was the Second World War, but thereafter mankind has had six and a half decades without any “important war” of the sort that could interrupt what he had called the “era of progress and invention”. And the rate of population growth has also not accelerated to a point that can be considered to have invalidated Keynes’ premise. And yet if we take mankind as a whole, it is as far from solving the economic problem as it ever was. True, there has been massive accumulation of capital, and with it an enormous increase in the mass of goods available to mankind; and yet, for the vast majority of mankind, the “struggle for subsistence” that Keynes had referred to has continued to remain as acute as ever, perhaps in some ways even more acute than ever before.

To say that this is only because not enough time has passed, that over a slightly longer time period Keynes’ vision will indeed turn out to be true, is facile. The fact that the bulk of mankind continues to face an acute struggle for subsistence is not a matter of degree; it is not as if the acuteness of this struggle for this segment of mankind has been lessening over time, or that the relative size of this segment has been lessening over time. We cannot therefore assert that the passage of more time will lift everybody above this struggle.

Dichotomy Structurally Inbuilt in Capitalism

Likewise, to say that, while enormous increases have taken place in the mass of goods and services available to mankind (the increase in this mass being more in the last hundred years than in the previous two thousand years, as Keynes had pointed out), its distribution has been extremely skewed and hence accounts for the persistence of the struggle for subsistence for the majority of the world’s population is to state a mere tautology. The whole point is that there is something structural to the capitalist system itself, the same system that causes this enormous increase in mankind’s capacity to produce goods and services, which also ensures that, notwithstanding this enormous increase, the struggle for subsistence must continue to be as acute as before, or even more acute than before, for the bulk of mankind.

Keynes missed this structural aspect of capitalism. His entire argument in fact was based on the mere logic of compound interest, i.e. on the sheer fact that “if capital increases, say, 2 percent per annum, the capital equipment of the world will have increased by a half in twenty years, and seven and a half times in a hundred years”. From this sheer fact it follows that output too would have increased more or less by a similar order of magnitude, and mankind, with so much more of goods at its disposal, would have overcome the struggle for subsistence. The reason Keynes assumed that an increase in the mass of goods would eventually benefit everyone lies not just in his inability to see the antagonistic nature of the capitalist mode of production (and its antagonistic relationship with the surrounding universe of petty producers), but also in his belief that capitalism is a malleable system which can be moulded, in accordance with the dictates of reason, by the interventions of the State as the representative of society. He was a liberal and saw the state as standing above, and acting on behalf of, society as a whole, in accordance with the dictates of reason. The world, he thought, was ruled by ideas; and correct, and benevolent, ideas would clearly translate themselves into reality, so that the increase in mankind’s productive capacity would get naturally transformed into an end of the economic problem. If the antagonism of capitalism was pointed out to Keynes, he would have simply talked about state intervention restraining this antagonism to ensure that the benefit of the increase in productive capacity reached all.

The fact that this has not happened, the fact that the enormous increase in mankind’s capacity to produce has translated itself not into an end to the struggle for subsistence for the world’s population, but into a plethora of all kinds of goods and services of little benefit to it, from a stockpiling of armaments to an exploration of outer space, and even into a systematic promotion of waste, and lack of utilization, or even destruction, of productive equipment, only underscores the limitations of the liberal world outlook of which Keynes was a votary. The state, instead of being an embodiment of reason, which intervenes in the interests of society as a whole, as liberalism believes, acts to defend the class interests of the hegemonic class, and hence to perpetuate the antagonisms of the capitalist system.

Antagonisms in Three Distinct Ways

These antagonisms perpetuate in three quite distinct ways the struggle for subsistence in which the bulk of mankind is caught. The first centres around the fact that the level of wages in the capitalist system depends upon the relative size of the reserve army of labour. And to the extent that the relative size of the reserve army of labour never shrinks below a certain threshold level, the wage rate remains tied to the subsistence level despite significant increases in labour productivity, as necessarily occur in the “era of progress and innovation”. Work itself therefore becomes a struggle for subsistence and remains so. Secondly, those who constitute the reserve army of labour are themselves destitute and hence condemned to an even more acute struggle for subsistence, to eke out for themselves an even more meager magnitude of goods and services. And thirdly, the encroachment by the capitalist mode upon the surrounding universe of petty production, whereby it displaces petty producers, grabs land from the peasants, uses the tax machinery of the State to appropriate for itself, at the expense of the petty producers, an amount of surplus value over and above what is produced within the capitalist mode itself, in short, the entire mechanism of “primitive accumulation of capital”, ensures that the size of the reserve army always remains above this threshold level. There is a stream of destitute petty producers forever flocking to work within the capitalist mode but unable to find work and hence joining the ranks of the reserve army. The antagonism within the system, and vis-à-vis the surrounding universe of petty production, thus ensures that, notwithstanding the massive increases in mankind’s productive capacity, the struggle of subsistence for the bulk of mankind continues unabated.

The growth rates of world output have been even greater in the post-war period than in Keynes’ time. The growth rates in particular capitalist countries like India have been of an order unimaginable in Keynes’ time, and yet there is no let-up in the struggle for subsistence on the part of the bulk of the population even within these countries. In India, precisely during the period of neo-liberal reforms when output growth rates have been high, there has been an increase in the proportion of the rural population accessing less than 2400 calories per person per day (the figure for 2004 is 87 percent). This is also the period when hundreds of thousands of peasants, unable to carry on even simple reproduction, have committed suicide. The unemployment rate has increased, notwithstanding a massive jump in the rate of capital accumulation; and the real wage rate, even of the workers in the organized sector, has at best stagnated, notwithstanding massive increases in labour productivity. In short our own experience belies the Keynesian optimism about the future of mankind under capitalism.

But Keynes wrote a long time ago. He should have seen the inner working of the system better (after all Marx, who died the year Keynes was born, saw it), but perhaps his upper-class Edwardian upbringing came in the way. But what does one say of people who, having seen the destitution-“high growth” dialectics in the contemporary world, still cling to the illusion that the logic of compound interest will overcome the “economic problem of mankind”? Neo-liberal ideologues of course propound this illusion, either in its simple version, which is the “trickle down” theory, or in the slightly more complex version, where the State is supposed to ensure through its intervention that the benefits of the growing mass of goods and services are made available to all, thereby alleviating poverty and easing the struggle for subsistence.

But this illusion often appears in an altogether unrecognizable form. Jeffrey Sachs, the economist who is well known for his administration of the so-called “shock therapy” in the former Soviet Union that led to a veritable retrogression of the economy and the unleashing of massive suffering on millions of people, has come out with a book where he argues that poverty in large parts of the world is associated with adverse geographical factors, such as drought-proneness, desertification, infertile soil, and such like. He wants global efforts to help these economies which are the victims of such niggardliness on the part of nature. The fact that enormous poverty exists in areas where nature is not niggardly, but on the contrary bounteous; the fact that the very bounteousness of nature has formed the basis of exploitation of the producers on a massive scale, so that they are engaged in an acute struggle for existence precisely in the midst of plenitude; and hence the fact that the bulk of the world’s population continues to struggle for subsistence not because of nature’s niggardliness but because of the incubus of an exploitative social order, are all obscured by such analysis. Keynes’ faith in the miracle of compound interest would be justified in a socialist order, but not in a capitalist one.

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Prabhat Patnaik is an Indian economist, who has achieved international acclaim with his incisive analyses of various aspects of economics and politics. He is a professor at the Centre for Economic Studies and Planning in the School of Social Sciences at Jawaharlal Nehru University in New Delhi. Patnaik is currently Vice-Chairman of the Planning Board of the Indian state of Kerala. This article was first published in People’s Democracy (5 July 2009); it is reproduced here for non-profit educational purposes.