depression

Economic and Social Crises Keep Deepening: 48 Points That Will Shape the Future

By Shawgi Tell

Not only have the policies of the rich at home and abroad not stopped economic and social decline, the rich are actually taking social irresponsibility to new levels and making things worse worldwide. They are unable and unwilling to solve serious problems plaguing humanity. Opening the path of progress to society is not on their agenda.

Connecting just a few dots in an intelligible way produces a clear picture of the destruction unfolding worldwide. It is no accident that more people are writing about a miserable dystopian future where people will have to develop new creative ways of defending the rights of all. The information below is especially timely given the cheap euphoria displayed recently by the short-sighted rich and their political and media representatives about the “solid” 850,000 jobs the U.S. economy “added” in June 2021.

  1. Inflation is increasing rapidly at home and abroad and the dollar’s purchasing power is still falling.

  2. Globally, supply chains affecting many sectors are not operating smoothly; many are worried about contrived and non-contrived disruptions lasting for months, even years.

  3. Ransomware incidents and major cyberattacks are not diminishing.

  4. Millions of U.S. workers are misclassified as contractors, which means that they do not have (generally weak) protections.

  5.  Thousands of companies at home and abroad are “zombie companies”—i.e., they don’t make a profit after paying down their debts, they just live a dead life.

  6. Student debt in the U.S. keeps soaring.

  7. College tuition in the U.S. and elsewhere keeps climbing.

  8. Marriage rates in the U.S. are at an all-time low.

  9. Birthrates are declining globally.

  10. The U.S. experiences a higher infant mortality rate and a higher prevalence of obesity compared with most OECD member countries.

  11.  The number of Americans who have moved back in with family or friends over the past 18 months is extremely high.

  12. Homelessness is high nationwide and increasing significantly in some major U.S. cities; crime is also up.

  13. Various “reforms” in countless sectors in many countries are superficial, phony, and non-substantive.

  14. Anxiety and depression remain widespread worldwide.

  15. Anti-depressant use remains high.

  16. Mass murders and killings have increased in recent years in the U.S.; so have social and civil unrest.

  17. Everyone everywhere is skeptical of the mainstream media and struggling not to be confused, ambushed, and humiliated every hour.

  18. Around the world hundreds of millions have joined the ranks of the poor over the past 18 months.

  19. Globally, well over ten million business have disappeared permanently and thousands more will disappear in the next five years.

  20.  Leading economic experts and officials have no real solutions for anything and people continually have low levels of trust in “experts” and government; the rich continue to operate with impunity.

  21. There is more polarization, division, and anger in society.

  22. Poverty and inequality keep growing worldwide; wealth concentration is staggering and unprecedented.

  23. Digital addiction and attendant problems won’t stop increasing.

  24. More U.S. college and university administrators, trustees, and leaders are abandoning the intellectual mission of colleges, restricting faculty voice, and turning college into Disney and fun.

  25. Getting simple things done is taking longer and becoming more convoluted and frustrating, especially when dealing with retailers, companies, and various agencies.

  26. Surveillance and police-state arrangements are multiplying rapidly and becoming more diverse and sophisticated at home and abroad.

  27. The media blackout on thousands who continue to experience serious side effects from vaccines continues.

  28. Newly-elected “progressive” politicians in the U.S. and elsewhere are proving to be as ineffective as the “old guard.”

  29. Privatization and deregulation keep increasing and wreaking havoc worldwide.

  30. Anglo-American imperialism thinks that constantly treating China and Russia as bogeymen will keep fooling the gullible and divert attention from deep problems in the Anglo-American world.

  31. The unionization rate of American workers is at a historic low, which is bad for all workers in all sectors.

  32. More than 130 million working Americans can live off their savings for six months or less before going broke.

  33. Mergers and acquisitions continue apace in 2021, concentrating even more wealth in even fewer hands.

  34. Central banks around the world keep printing phantom money while stock market bubbles grow larger.

  35. The U.S labor force participation rate remains low.

  36. The number of long-term unemployed (27 weeks or more) in the U.S. is still increasing.

  37. Millions of Americans have started to lose their jobless benefits.

  38. More than 40% of Black families and Latino families in the U.S. have no access to an employer-sponsored retirement plan.

  39. Black and Latino Americans are experiencing the biggest decline in life expectancy in decades.

  40. In recent years, overall job quality for Americans has deteriorated significantly.

  41. At least thirty million Americans lack access to high-speed internet.

  42. The U.S. opioid overdose crisis, which pharmaceutical companies were recently found guilty of sponsoring, persists.

  43. In Africa, nearly 40% of employed youth are considered poor.

  44. Around the world, nearly one out of ten people experience hunger and the number of undernourished people has grown by millions in recent years.

  45. The official unemployment rate exceeds 10% in at least 12 countries in (Western and Eastern) Europe. Fourteen countries fall into this category for North and South America. The real numbers are higher.

  46. More than 27% of youth in Central Asia and Southern Asia are not in employment, training, or education.

  47. In the past five years more countries have experienced violent conflict, while violent crime across the world has also increased.

  48. Despite endless happy economic news in the mainstream media, economies around the world are far from recovering; many never recovered from the Great Recession of 2008 and mass vaccinations will not solve deep structural economic problems.

The list goes on and on. This is the tip of the iceberg. Numerous problems persist on all continents. The facts above do not paint a picture of a bright and promising future for humanity. Widespread destruction prevails in the obsolete neoliberal world.

But there are also openings and contradictions that people from all walks of life are being compelled to harness in order to advance the public interest and restrict the illegitimate control and authority of major owners of capital. The desire for real progress is palpable and growing; it emerges from the concrete conditions as they present themselves today. The international financial oligarchy cannot provide any solutions to the problems plaguing humanity today, they just have more catastrophes in store for everyone and are blocking the empowerment of the people. None of these serious problems can be solved, however, so long as the people remain marginalized and disempowered. A new direction, orientation, and public authority are urgently needed.

Humanity is entering a new and deeper crisis with qualitatively different and more dangerous features. Crisis is a turning point that contains both peril and opportunity. Crisis is not always just a negative thing; it means things cannot continue in the old way and something significant is going to have to eventually give. It usually takes a serious crisis or trauma to catalyze and propel much-needed change. In this way, crisis overcomes stagnation and complacency and sets the stage for something new. The negation of the negation operates with a greater vengeance in such defining moments, giving rise to a new synthesis, a new equilibrium, which gives rise to yet another dynamic which must assert itself sooner or later. The dialectic lives and cannot be extinguished. What comes next in the complicated here and now is unfolding consciously and spontaneously.

The pace and rate of change today is exhilarating and people’s desire to protect the social and natural environment is growing. The trial of strength between capital-centered forces and human-centered forces is bound to increase because conditions are demanding a new authority that affirms the rights of all. An alternative is necessary and possible. What this will look like is in the hands of the people themselves. Only they can be relied on to usher in a bright future for humanity free of privileged private interests wrecking the social and natural environment.

Shawgi Tell, PhD, is author of the book “Charter School Report Card.” His main research interests include charter schools, neoliberal education policy, privatization and political economy. He can be reached at stell5@naz.edu.

Why is the World Going to Hell? Netflix's 'The Social Dilemma' Tells Only Half the Story

By Jonathan Cooke

Republished from the author’s blog.

If you find yourself wondering what the hell is going on right now – the “Why is the world turning to shit?” thought – you may find Netflix’s new documentary The Social Dilemma a good starting point for clarifying your thinking. I say “starting point” because, as we shall see, the film suffers from two major limitations: one in its analysis and the other in its conclusion. Nonetheless, the film is good at exploring the contours of the major social crises we currently face – epitomised both by our addiction to the mobile phone and by its ability to rewire our consciousness and our personalities.

The film makes a convincing case that this is not simply an example of old wine in new bottles. This isn’t the Generation Z equivalent of parents telling their children to stop watching so much TV and play outside. Social media is not simply a more sophisticated platform for Edward Bernays-inspired advertising. It is a new kind of assault on who we are, not just what we think.

According to The Social Dilemma, we are fast reaching a kind of human “event horizon”, with our societies standing on the brink of collapse. We face what several interviewees term an “existential threat” from the way the internet, and particularly social media, are rapidly developing.

I don’t think they are being alarmist. Or rather I think they are right to be alarmist, even if their alarm is not entirely for the right reasons. We will get to the limitations in their thinking in a moment.

Like many documentaries of this kind, The Social Dilemma is deeply tied to the shared perspective of its many participants. In most cases, they are richly disillusioned, former executives and senior software engineers from Silicon Valley. They understand that their once-cherished creations – Google, Facebook, Twitter, Youtube, Instagram, Snapchat (WhatsApp seems strangely under-represented in the roll call) – have turned into a gallery of Frankenstein’s monsters.

That is typified in the plaintive story of the guy who helped invent the “Like” button for Facebook. He thought his creation would flood the world with the warm glow of brother and sisterhood, spreading love like a Coca Cola advert. In fact, it ended up inflaming our insecurities and need for social approval, and dramatically pushed up rates of suicide among teenage girls.

If the number of watches of the documentary is any measure, disillusion with social media is spreading far beyond its inventors.

Children as guinea pigs

Although not flagged as such, The Social Dilemma divides into three chapters.

The first, dealing with the argument we are already most familiar with, is that social media is a global experiment in altering our psychology and social interactions, and our children are the main guinea pigs. Millennials (those who came of age in the 2000s) are the first generation that spent their formative years with Facebook and MySpace as best friends. Their successors, Generation Z, barely know a world without social media at its forefront.

The film makes a relatively easy case forcefully: that our children are not only addicted to their shiny phones and what lies inside the packaging, but that their minds are being aggressively rewired to hold their attention and then make them pliable for corporations to sell things.

Each child is not just locked in a solitary battle to stay in control of his or her mind against the skills of hundreds of the world’s greatest software engineers. The fight to change their perspective and ours – the sense of who we are – is now in the hands of algorithms that are refined every second of every day by AI, artificial intelligence. As one interviewee observes, social media is not going to become less expert at manipulating our thinking and emotions, it’s going to keep getting much, much better at doing it.

Jaron Lanier, one of the computing pioneers of virtual reality, explains what Google and the rest of these digital corporations are really selling: “It’s the gradual, slight, imperceptible change in your own behaviour and perception – that is the product.” That is also how these corporations make their money, by “changing what you do, what you think, who you are.”

They make profits, big profits, from the predictions business – predicting what you will think and how you will behave so that you are more easily persuaded to buy what their advertisers want to sell you. To have great predictions, these corporations have had to amass vast quantities of data on each of us – what is sometimes called “surveillance capitalism”.

And, though the film does not quite spell it out, there is another implication. The best formula for tech giants to maximise their predictions is this: as well as processing lots of data on us, they must gradually grind down our distinctiveness, our individuality, our eccentricities so that we become a series of archetypes. Then, our emotions – our fears, insecurities, desires, cravings – can be more easily gauged, exploited and plundered by advertisers.

These new corporations trade in human futures, just as other corporations have long traded in oil futures and pork-belly futures, notes Shoshana Zuboff, professor emeritus at Harvard business school. Those markets “have made the internet companies the richest companies in the history of humanity”.

Flat Earthers and Pizzagate

The second chapter explains that, as we get herded into our echo chambers of self-reinforcing information, we lose more and more sense of the real world and of each other. With it, our ability to empathise and compromise is eroded. We live in different information universes, chosen for us by algorithms whose only criterion is how to maximise our attention for advertisers’ products to generate greater profits for the internet giants.

Anyone who has spent any time on social media, especially a combative platform like Twitter, will sense that there is a truth to this claim. Social cohesion, empathy, fair play, morality are not in the algorithm. Our separate information universes mean we are increasingly prone to misunderstanding and confrontation.

And there is a further problem, as one interviewee states: “The truth is boring.” Simple or fanciful ideas are easier to grasp and more fun. People prefer to share what’s exciting, what’s novel, what’s unexpected, what’s shocking. “It’s a disinformation-for-profit model,” as another interviewee observes, stating that research shows false information is six times more likely to spread on social media platforms than true information.

And as governments and politicians work more closely with these tech companies – a well-documented fact the film entirely fails to explore – our rulers are better positioned than ever to manipulate our thinking and control what we do. They can dictate the political discourse more quickly, more comprehensively, more cheaply than ever before.

This section of the film, however, is the least successful. True, our societies are riven by increasing polarisation and conflict, and feel more tribal. But the film implies that all forms of social tension – from the paranoid paedophile conspiracy theory of Pizzagate to the Black Lives Matter protests – are the result of social media’s harmful influence.

And though it is easy to know that Flat Earthers are spreading misinformation, it is far harder to be sure what is true and what is false in many others areas of life. Recent history suggests our yardsticks cannot be simply what governments say is true – or Mark Zuckerberg, or even “experts”. It may be a while since doctors were telling us that cigarettes were safe, but millions of Americans were told only a few years ago that opiates would help them – until an opiate addiction crisis erupted across the US.

This section falls into making a category error of the kind set out by one of the interviewees early in the film. Despite all the drawbacks, the internet and social media have an undoubted upside when used simply as a tool, argues Tristan Harris, Google’s former design ethicist and the soul of the film. He gives the example of being able to hail a cab almost instantly at the press of a phone button. That, of course, highlights something about the materialist priorities of most of Silicon Valley’s leading lights.

But the tool box nestled in our phones, full of apps, does not just satisfy our craving for material comfort and security. It has also fuelled a craving to understand the world and our place in it, and offered tools to help us do that.

Phones have made it possible for ordinary people to film and share scenes once witnessed by only a handful of disbelieved passers-by. We can all see for ourselves a white police officer dispassionately kneeling on the neck of a black man for nine minutes, while the victim cries out he cannot breathe, until he expires. And we can then judge the values and priorities of our leaders when they decide to do as little as possible to prevent such incidents occurring again.

The internet has created a platform from which not only disillusioned former Silicon Valley execs can blow the whistle on what the Mark Zuckerbergs are up to, but so can a US army private like Chelsea Manning, by exposing war crimes in Iraq and Afghanistan, and so can a national security tech insider like Edward Snowden, by revealing the way we are being secretly surveilled by our own governments.

Technological digital breakthroughs allowed someone like Julian Assange to set up a site, Wikileaks, that offered us a window on the real political world – a window through we could see our leaders behaving more like psychopaths than humanitarians. A window those same leaders are now fighting tooth and nail to close by putting him on trial.

A small window on reality

The Social Dilemma ignores all of this to focus on the dangers of so-called “fake news”. It dramatises a scene suggesting that only those sucked into information blackholes and conspiracy sites end up taking to the street to protest – and when they do, the film hints, it will not end well for them.

Apps allowing us to hail a taxi or navigate our way to a destination are undoubtedly useful tools. But being able to find out what our leaders are really doing – whether they are committing crimes against others or against us – is an even more useful tool. In fact, it is a vital one if we want to stop the kind of self-destructive behaviours The Social Dilemma is concerned about, not least our destruction of the planet’s life systems (an issue that, except for one interviewee’s final comment, the film leaves untouched).

Use of social media does not mean one necessarily loses touch with the real world. For a minority, social media has deepened their understanding of reality. For those tired of having the real world mediated for them by a bunch of billionaires and traditional media corporations, the chaotic social media platforms have provided an opportunity to gain insights into a reality that was obscured before.

The paradox, of course, is that these new social media corporations are no less billionaire-owned, no less power-hungry, no less manipulative than the old media corporations. The AI algorithms they are rapidly refining are being used – under the rubric of “fake news” – to drive out this new marketplace in whistleblowing, in citizen journalism, in dissident ideas.

Social media corporations are quickly getting better at distinguishing the baby from the bathwater, so they can throw out the baby. After all, like their forebears, the new media platforms are in the business of business, not of waking us up to the fact that they are embedded in a corporate world that has plundered the planet for profit.

Much of our current social polarisation and conflict is not, as The Social Dilemma suggests, between those influenced by social media’s “fake news” and those influenced by corporate media’s “real news”. It is between, on the one hand, those who have managed to find oases of critical thinking and transparency in the new media and, on the other, those trapped in the old media model or those who, unable to think critically after a lifetime of consuming corporate media, have been easily and profitably sucked into nihilistic, online conspiracies.

Our mental black boxes

The third chapter gets to the nub of the problem without indicating exactly what that nub is. That is because The Social Dilemma cannot properly draw from its already faulty premises the necessary conclusion to indict a system in which the Netflix corporation that funded the documentary and is televising it is so deeply embedded itself.

For all its heart-on-its-sleeve anxieties about the “existential threat” we face as a species, The Social Dilemma is strangely quiet about what needs to change – aside from limiting our kids’ exposure to Youtube and Facebook. It is a deflating ending to the rollercoaster ride that preceded it.

Here I want to backtrack a little. The film’s first chapter makes it sound as though social media’s rewiring of our brains to sell us advertising is something entirely new. The second chapter treats our society’s growing loss of empathy, and the rapid rise in an individualistic narcissism, as something entirely new. But very obviously neither proposition is true.

Advertisers have been playing with our brains in sophisticated ways for at least a century. And social atomisation – individualism, selfishness and consumerism – have been a feature of western life for at least as long. These aren’t new phenomena. It’s just that these long-term, negative aspects of western society are growing exponentially, at a seemingly unstoppable rate.

We’ve been heading towards dystopia for decades, as should be obvious to anyone who has been tracking the lack of political urgency to deal with climate change since the problem became obvious to scientists back in the 1970s.

The multiple ways in which we are damaging the planet – destroying forests and natural habitats, pushing species towards extinction, polluting the air and water, melting the ice-caps, generating a climate crisis – have been increasingly evident since our societies turned everything into a commodity that could be bought and sold in the marketplace. We began on the slippery slope towards the problems highlighted by The Social Dilemma the moment we collectively decided that nothing was sacred, that nothing was more sacrosanct than our desire to turn a quick buck.

It is true that social media is pushing us towards an event horizon. But then so is climate change, and so is our unsustainable global economy, premised on infinite growth on a finite planet. And, more importantly, these profound crises are all arising at the same time.

There is a conspiracy, but not of the Pizzagate variety. It is an ideological conspiracy, of at least two centuries’ duration, by a tiny and ever more fabulously wealth elite to further enrich themselves and to maintain their power, their dominance, at all costs.

There is a reason why, as Harvard business professor Shoshana Zuboff points out, social media corporations are the most fantastically wealthy in human history. And that reason is also why we are reaching the human “event horizon” these Silicon Valley luminaries all fear, one where our societies, our economies, the planet’s life-support systems are all on the brink of collapse together.

The cause of that full-spectrum, systemic crisis is not named, but it has a name. Its name is the ideology that has become a black box, a mental prison, in which we have become incapable of imagining any other way of organising our lives, any other future than the one we are destined for at the moment. That ideology’s name is capitalism.

Waking up from the matrix

Social media and the AI behind it are one of the multiple crises we can no longer ignore as capitalism reaches the end of a trajectory it has long been on. The seeds of neoliberalism’s current, all-too-obvious destructive nature were planted long ago, when the “civilised”, industrialised west decided its mission was to conquer and subdue the natural world, when it embraced an ideology that fetishised money and turned people into objects to be exploited.

A few of the participants in The Social Dilemma allude to this in the last moments of the final chapter. The difficulty they have in expressing the full significance of the conclusions they have drawn from two decades spent in the most predatory corporations the world has ever known could be because their minds are still black boxes, preventing them from standing outside the ideological system they, like us, were born into. Or it could be because coded language is the best one can manage if a corporate platform like Netflix is going to let a film like this one reach a mass audience.

Tristan Harris tries to articulate the difficulty by grasping for a movie allusion: “How do you wake up from the matrix when you don’t know you’re in the matrix?” Later, he observes: “What I see is a bunch of people who are trapped by a business model, an economic incentive, shareholder pressure that makes it almost impossible to do something else.”

Although still framed in Harris’s mind as a specific critique of social media corporations, this point is very obviously true of all corporations, and of the ideological system – capitalism – that empowers all these corporations.

Another interviewee notes: “I don’t think these guys [the tech giants] set out to be evil, it’s just the business model.”

He is right. But “evilness” – the psychopathic pursuit of profit above all other values – is the business model for all corporations, not just the digital ones.

The one interviewee who manages, or is allowed, to connect the dots is Justin Rosenstein, a former engineer for Twitter and Google. He eloquently observes:

We live in a world in which a tree is worth more, financially, dead than alive. A world in which a whale is worth more dead than alive. For so long as our economy works in that way, and corporations go unregulated, they’re going to continue to destroy trees, to kill whales, to mine the earth, and to continue to pull oil out of the ground, even though we know it is destroying the planet and we know it is going to leave a worse world for future generations.

This is short-term thinking based on this religion of profit at all costs. As if somehow, magically, each corporation acting in its selfish interest is going to produce the best result. … What’s frightening – and what hopefully is the last straw and will make us wake up as a civilisation as to how flawed this theory is in the first place – is to see that now we are the tree, we are the whale. Our attention can be mined. We are more profitable to a corporation if we’re spending time staring at a screen, staring at an ad, than if we’re spending our time living our life in a rich way.

Here is the problem condensed. That unnamed “flawed theory” is capitalism. The interviewees in the film arrived at their alarming conclusion – that we are on the brink of social collapse, facing an “existential threat” – because they have worked inside the bellies of the biggest corporate beasts on the planet, like Google and Facebook.

These experiences have provided most of these Silicon Valley experts with deep, but only partial, insight. While most of us view Facebook and Youtube as little more than places to exchange news with friends or share a video, these insiders understand much more. They have seen up close the most powerful, most predatory, most all-devouring corporations in human history.

Nonetheless, most of them have mistakenly assumed that their experiences of their own corporate sector apply only to their corporate sector. They understand the “existential threat” posed by Facebook and Google without extrapolating to the identical existential threats posed by Amazon, Exxon, Lockheed Martin, Halliburton, Goldman Sachs and thousands more giant, soulless corporations.

The Social Dilemma offers us an opportunity to sense the ugly, psychopathic face shielding behind the mask of social media’s affability. But for those watching carefully the film offers more: a chance to grasp the pathology of the system itself that pushed these destructive social media giants into our lives.

Post-Pandemic America: Prelude to Socialism or Fascism?

By Werner Lange

May 8 marks the 75th anniversary of the defeat of fascism in Europe, a historic victory over modern despotism that catapulted American capitalism to world domination by default. As the only combatant country with its cities and infrastructure left intact, the United States emerged from this colossal bloodbath as the single most potent economy on earth. Europe, especially Germany, lay in utter ruins and tens of millions, half of them civilians, lay in early graves. By contrast, the US economy flourished adding some 11 million jobs within the seven years following the war; the minimum wage increased; the poverty rate fell; farm incomes, dividends and corporate profits hit all-time highs; and bank failures along with unemployment had all but disappeared. American capitalism entered a Golden Age.

Fast forward to 2020, and suddenly everything has changed with the explosive advent of another worldwide war, an unprecedented and unforeseen one against an invisible enemy wreaking havoc upon the health and welfare of nearly every nation on earth, especially the USA. The tables have turned, irrevocably. No nation has been hit harder by this insidious invasive enemy than America; and none has suffered more from gross government malfunction and dire social dysfunction. The glittering structure built by American capital since its brief golden age exposed itself in this pandemic to be a top- heavy house of cards on the verge of collapse. What follows the coming collapse is open to debate. Objective forces favor socialism, but subjective ones point toward fascism.

The US economy suddenly hit a solid brick wall this fateful year bringing large sectors to a virtual standstill and driving countless small businesses into bankruptcy. The GDP fell by nearly 5% in the first quarter and is conservatively estimated to minimally shrink at annual rate of 30%, a disastrous decline not experienced since the Great Depression. As of early May, well over 30 million American workers have applied for unemployment insurance, and overwhelmed agencies are hard-pressed to deliver the desperately needed relief on time. Millions more, those either ineligible for such temporary survival compensation or blocked from applying, are also jobless and face destitution. The official unemployment rate, a gross underestimate of actual joblessness, stands at 17% and will likely skyrocket to well over 30% by summer, exceeding Great Depression levels. Loss of a job translates into loss of health insurance for millions of Americans who are now only one medical problem away from family bankruptcy. Soup lines common during the Great Depression now increasingly appear as miles-long stretches of cars lined up for emergency food supplies.

Whatever safety net there once was to absorb such economic shocks, inhumane concentration of wealth without work and politics without principle, both grave social sins, evaporated it. After some 50 years of steadily increasing class inequality, the richest 400 Americans now own more wealth than the bottom 150 million of us; the 5% at the top of our grossly stratified society own 66% of the nation’s wealth, while nearly 70% of US adults have less than $1,000 in savings and 20% have more credit-card debt than emergency savings; over 16 million Americans have negative net worth and one in four African-American families have zero net wealth. Such obscene concentrations of wealth and glaring gaps of inequality have not been experienced since 1928, right before the Great Depression.

Rather than enhance assistance to victims of this drastic decline, the Trump regime proposed massive cuts to America’s meager welfare programs - SNAP, TANF and WIC - which help keep millions of impoverished citizens from utter destitution. However, when it comes to corporate welfare, the flood gates of public funds are thrown wide open. The recently enacted CARES legislation is a thinly disguised gargantuan gift to America’s super-rich; some $500 billion in so-called loans are simply given to America’s largest corporations with no meaningful oversight or accountability. Because of a tax loophole an additional $1.2 million goes, on average, to 43,000 millionaires each, while struggling Americans may receive a one-time $1200 check. That generous gift to the super-rich comes on top of the $1 trillion generated for them by the 2017 statutory corporate tax rate cut and largely deposited in lucrative stock buybacks. Even during this pandemic billionaire wealth increased by nearly 10% and continues to do so.

At the other end of this unsustainable and unstable pyramid of parasitism are 150 million Americans living from paycheck to paycheck and 40 million officially poor Americans living day from day. An astounding 52% of US children are impoverished or low-income and 11 million children live in food insecure households; 50% of renters spend one-third of their modest income on housing; and some 49 million families carry a collective debt of $1.5 trillion in student loans. The richest country on earth harbors highly volatile levels of toxic financial insecurity on a pandemic trajectory toward eruption.

These objective conditions of unprecedented inequality and insecurity have generated subjective conditions of unprecedented mass frustration increasingly giving rise to displaced aggression, scapegoating directed against the victims not victimizers of the crisis. Every economic decline is coupled with a rise in racism to some degree. Yet the looming collapse of our failing capitalist economy carries with it the potential to unleash and empower even more nefarious social forces. Fascism in America is a possibility, thanks to the openly racist Trump regime and mass false consciousness among its rabid base. To prevent this calamity, defeat of Trump this November is necessary, but not sufficient. The social and psychological roots giving rise to his pathetic presidency and sustained popularity despite its abysmal failures need to be addressed. And these run deep within the American psyche and society. Racism, a stepping stone to fascism when unchecked, remains securely at home within the American social fabric, far beyond Trump’s nationalist base. So does its uterine twin, social darwinism. The coronavirus pandemic has stimulated this ideological virus in forms not witnessed since the heyday of the eugenics movement.

Inspired by resurgent social darwinist thought, there is an expanding willingness to let select populations die from the pandemic just so the ailing capitalist economy may be restored to health. According to the barbaric billionaire in the White House, the cure must not be worse than the disease and holding the pandemic death count to 100,000 would be a “great win”; according to one of his cheerleaders in elected office in Texas, grandparents are willing to die to save the economy; according to a popular right-wing pundit, those dying from the pandemic were on their last legs anyway; and another conservative commentator claims everyone is making “actuarial deductions about the costs” in human lives by lifting lockdown orders. Precious little institutional concern is expressed over the rising body count of prisoners, like the 30 year-old Lakota woman who died in federal custody after giving birth while on a ventilator in late April. To accelerate re-opening the country for business, a group of former health officials recently urged Congress to pay infected low-income Americans $50 per day to self- isolate in empty hotel rooms.

Such passive measures in thinning out the herd, a plan straight out of the social darwinist handbook, are slowly and steadily taking their toll in prisons, jails, nursing homes, VA facilities, warehouses, and food-processing plants throughout our troubled land. A more active approach to thinning and targeting certain cohorts manifested itself recently at several state capitals. Angry protestors, many armed with military assault weapons, demanded an immediate end to pandemic containment policies wisely imposed by state governments. Some invaded state capital buildings brandishing their weapons motivating some legislators to wear bullet-proof vests; others vociferously called for select governors to be locked up or even strung up; and among the ubiquitous Trump/Pence flags were occasional swastikas. While not officially a gang of brown shirts, the armed thugs of intimidation at these right-wing rallies, embraced as “good people” by Trump, are their functional equivalent.

Our embattled country is deeply divided and its political polarization grows with each passing day. Yet there is a way out of the current crisis, one decisively declared by a courageous group of American revolutionaries facing another bitter tyranny: “But when a long train of abuses and usurpations pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government and to provide new Guards for their future security”. If Americans heed this historic patriotic call to duty during this despotism, then a new America, a socialist one, will eventually emerge from the coming collapse of capitalism. If not, the despotism will intensify diabolically and decay into fascism. The struggle continues, and the fate of a people caught in the belly of a wounded beast hangs in the balance.

Capitalism's Overproduction Problem: A Primer

By Prabhat Patnaik

Republished from Monthly Review.

It is in the nature of capitalism to have “over-production crises”, i.e., crises arising from “over-production” relative to demand. “Over-production” does not mean that more and more goods keep getting produced relative to demand, so that unsold stocks keep piling up. This may happen only for a brief period in the beginning; but as stocks pile up, production gets curtailed, causing recession and greater unemployment.

“Over-production”, in short, is ex ante, in the sense that if production were to occur at full capacity use (or at some desired level of capacity utilisation), then the amount produced could not be sold because of a shortage of demand. But it manifests itself in reality in terms of recession and greater unemployment.

It is a mistake to believe that such crises are only cyclical in nature, i.e., that they get automatically reversed after a certain period of time. On the contrary, the Great Depression of the 1930s, which was a classic over-production crisis, lasted nearly a decade and was finally overcome because of the war, or, to be precise, because of military expenditure in preparation for the Second World War.

Since 2008, there has again been an over-production crisis that has persisted with varying intensity right until now. There is, thus, no question of an over-production crisis under capitalism automatically disappearing. But what was striking about the erstwhile socialist economies of the Soviet Union and Eastern Europe is that they were free from over-production crises. The question is why?

Over-production crises under capitalism arise because of two main reasons. One, investment decisions under capitalism depend upon the expected growth of demand, for which the current growth of demand is taken as a clue: if demand slows down then investment gets restrained. Two, whenever investment gets restrained, so does consumption and hence total income (this is called the “multiplier” effect of investment).

Both these factors were eliminated under socialism. Investment was undertaken according to a plan and not the dictates of profitability; hence, there was no question of investment being curtailed when the growth of demand slowed down for any reason. This is not to say that there were no fluctuations in the level of investment. These fluctuations, however, arose not in response to profit expectations, but for entirely exogenous reasons, of which, two in particular were important.

One was agricultural output fluctuations. In years when the agricultural output went down for weather-related, or some other, reasons, investment was cut, in order to prevent excessive upward pressures on food prices; correspondingly when agricultural output revived, so did investment. These investment fluctuations, however, had nothing to do with any calculations of profitability on investment; they were unavoidable even in a planned economy.

The second reason was the operation of “echo effects”. Suppose, for instance, that a whole lot of new investment had been installed in a bunched manner at a certain date, say the beginning of the planning period. These pieces of equipment would become due for retirement again in a bunched manner around the same time some years later, which would, therefore, push up the investment plan, and hence the real gross investment around that time, so that both net investment and replacement needs are accommodated. The investment figure, therefore, would not show a steady growth but would exhibit fluctuations. But these fluctuations again had nothing to do with any calculations of profitability; they arose because of past investment history.

But even when such investment fluctuations occurred, socialist economies ensured that they did not lead to fluctuations in consumption and income, i.e., those economies snapped the multiplier relationship that necessarily characterises capitalism. This is because all firms in the economy were asked to produce to their capacity, and, if demand was low because of investment being curtailed, then they were asked to lower their prices until whatever they produced got sold.

At these “market-clearing” prices, some firms would make losses, while others would still make profits; but this would not matter since both the profit-making and the loss-making firms belonged to the State, which could, therefore, cross-subsidise the loss-making ones from the profits of the profit-making ones. And taking both groups of firms together, there would always be positive net profits as long as investment was positive (even if lower than would have been otherwise).

This was a remarkable break from what happens under capitalism, and provides a clue to why output and employment fall in a crisis there. Under capitalism, a firm does not produce when prices do not cover costs; and when demand is low, prices do not fall, because they are “administered” through collusion among the oligopolistic firms. Instead, output, and hence employment, fall in order to equate supply with demand, and to eliminate stocks which might have got built up briefly.

The matter can be looked at somewhat differently. A fall in price, with money wages and employment given, which is what happened under socialism, meant a rise in the share of wages in total output; income distribution in short shifted in favour of the workers. Since workers more or less consume their entire wages, such a shift in income distribution in favour of the workers raised the share of consumption in total output. Thus, socialist economies never experienced over-production crises because even when investment fell for some reason, output was kept unchanged and the share of consumption rose to compensate for the fall in investment (through a rise in the workers’ share in output).

This, however, can never happen under capitalism because capitalists would never voluntarily agree to a lowering of their share in output and a corresponding increase in workers’ share, even in a situation of inadequate aggregate demand. This is why capitalism experiences over-production crises: income distribution here is a matter of intense class-struggle where there is no question of capitalists agreeing to lower their own share and correspondingly raise workers’ share for the sake of overcoming a situation of over-production.

The “multiplier” that operates under capitalism, whereby a reduction in investment causes a reduction in consumption and hence total output, occurs because of income distribution not being adjustable. The “multiplier”, in other words, is predicated upon the relative shares among capitalists and workers being given.

In fact, under capitalism, far from the workers’ share rising to offset the problem of insufficient demand, the tendency in periods of crisis is the exact opposite, namely, to cut wages and raise the share of profits, which, in a situation of reduced investment that brought about the crisis in the first place, actually compounds the crisis. A 10% fall in investment in such a situation does not just bring about a 10% fall in output, as the “multiplier” analysis would suggest, but a more than 10% fall in output, say a 15% fall, because an additional squeeze on consumption through a fall in workers’ share (via the wage cut) is further superimposed upon the reduction in investment.

The fact that the relative share of the workers is not allowed to increase in order to offset the tendency towards over-production, which is a basic characteristic of capitalism, also shows its supreme irrationality as a system. It shows that the system would rather have larger unutilised capacity and unemployment, i.e., a sheer waste of productive resources for lack of demand, than produce as before by avoiding this waste through giving more to the workers. From its point of view, wasted resources are preferable to using these resources to improve workers’ consumption. True, not being a planned system, it does not make such calculations consciously; but that is what its immanent tendencies amount to. Socialism avoids any waste or slack, such as is caused by a crisis, by raising the consumption of workers appropriately to avert it.

As the collapse of the Soviet Union recedes further into history, people increasingly forget that a system had existed there, which, notwithstanding its many limitations and defects, had nonetheless been free of unemployment, of over-production crises and of the irrationality of capitalism.

Prabhat Patnaik is Professor Emeritus at the Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi. His books include Accumulation and Stability Under Capitalism (1997), The Value of Money (2009), and Re-envisioning Socialism (2011).