The Exploitative Alliance: How Corporate Strategies and Union Investments Undermine Worker Security

[ILLUSTRATION BY ALEX NABAUM]

By Peter S. Baron

A major obstacle to the collective well-being of workers is how corporate employers connect retirement funds to the stock market. This linking means that workers bear the brunt, as publicly traded companies aim to maximize profitability through cost-cutting measures that negatively impact their wages, job security, and working conditions. Similarly, labor unions like the United Auto Workers (UAW) channel membership dues into investment funds that often hold stocks in the very companies they may confront or negotiate with.

Recent history has witnessed a significant transformation in the structure of labor's retirement portfolios; they are now primarily sustained by individual contributions, with companies only occasionally offering modest matching contributions. Individuals now shoulder the entire risk, while corporations benefit from reduced financial liabilities and greater predictability in managing retirement expenses. Insidiously, as corporations have shifted financial risk onto individuals, they have also directed these investments toward financial management behemoths. These entities hold control over each individual investor’s voting rights, effectively seizing the collective power of working-class retirement funds. This power is then leveraged to amplify the relentless profit-driven mechanisms at the core of capitalism. Running parallel, organized labor’s advocacy power has been undermined by union bureaucrats who have chosen to tether the union's financial health to the success of the same corporate giants it should be challenging, effectively making the union a complacent, and likely complicit, partner in the very corporate strategies that exploit its members. 

These financial realities, carefully engineered by corporations and meekly accepted by labor, are riddled with contradictions that reveal the blatant exploitation at the core of the elite’s oppression of workers. They serve as stark reminders that security and well-being, let alone collective liberation, won't come from corporate investment schemes or the leadership of corporate bureaucratic puppets, but only from the solidarity and unified strength of the workforce. The power to dismantle this exploitation lies in workers rejecting the illusion of corporate benevolence and instead building unwavering unity to reclaim their future through collective action.

Background

Traditionally, workers' retirement funds were managed through Defined Benefit (DB) plans, which ensured a stable pension for retirees and placed the investment risk on employers, who shouldered the costs of employees' retirement benefits. Though these DB plans were similarly invested in the stock market, the companies themselves were responsible for ensuring that the retirement fund has enough resources to meet those guaranteed payouts, meaning the employer must cover any shortfall if investment returns do not meet expectations. These plans became seen as economically burdensome by corporate executives who aimed to maintain steadily growing profits in an era marked by rapid market shifts and increasing global competition (https://livewell.com/finance/why-have-employers-moved-from-defined-benefit-to-defined-contribution-plans/).

The transition to 401(k) and other Defined Contribution (DC) plans offloaded these risks onto employees, fundamentally transforming the nature of retirement savings. Defined Contribution plans prioritize contributions over guaranteed payouts, requiring employers and workers to allocate set amounts into individual retirement accounts. With the employer no longer liable to provide a guaranteed income, workers must now shoulder the burden of their own retirement funding, gambling their hard-earned savings in the unpredictable stock market. Though favorable returns can occur, sustained gains are elusive due to regular market crashes that occur every six years on average. This means that when the market plummets, it's the employees who bear the brunt, not the employers, exposing workers' financial security to the whims of an unstable market while leaving them vulnerable to navigating a system designed to shift the risks and costs of retirement away from corporations.

The neoliberal ideological shift that encouraged employers to search for cost-cutting measures also aligned with broader economic changes, including a shift from manufacturing to service and IT sectors, where new companies were more likely to adopt DC plans. Furthermore, legislation like the Pension Protection Act of 2006 facilitated this transition by imposing stricter funding requirements on DB plans and enhancing the attractiveness of DC plans through various incentives (https://www.ssa.gov/policy/docs/ssb/v69n3/v69n3p1.html).

Running parallel, the recent trend of labor unions—such as the massive United Auto Workers (UAW)—investing membership dues in the stock market, including in companies they might challenge or negotiate with, starkly illustrates how union bureaucracies are increasingly co-opted by the very corporate forces they are supposed to oppose. From the 1980s onward, the government-corporate alliance has evolved into a toxic web of aggressive market liberalization and ruthless deregulation. The calculated removal of oversight was a brazen move that handed corporations unchecked power while shredding public accountability. Worker protections were gutted, and investment returns soared on the backs of labor exploitation, as corporate greed flourished at the expense of those who toil.

The UAW, like many other unions, seized on the opportunity to increase their cash reserves and began channeling part of their dues and pension funds into the stock market. Superficially, this was a move to diversify and increase the assets available to serve and protect members. However, it effectively entangled the unions' financial interests with those of the very corporations they were meant to be monitoring and moderating, at the very least.

This alignment with corporate performance underscores a deeper ideological shift within the union bureaucracy, from champions of workers' rights to managers of complex financial portfolios. This shift has distanced the union's leadership from the everyday realities and immediate needs of their rank-and-file members, leading to decisions that favor long-term financial stability over aggressive advocacy for better wages, benefits, or working conditions.

In both scenarios, workers face a ridiculous contradiction: pursuing their true interest in collective emancipation from the exploitative capitalist class risks undermining their wages, benefits, and retirement savings.

The Paradox of Worker Investment in Corporate Profits

The transition from traditional pension plans to 401(k) plans encapsulates a critical transformation in the relationship between labor and capital, deeply embedded with ideological and material implications.

By investing their retirement savings in the stock market, workers are compelled to support, and indeed root for, the success of the very entities that exploit their labor. The corporate profits that boost their retirement funds are sourced directly from corporate strategies such as suppressing wages, reducing workforce sizes, and demanding increased productivity. This is effectively a transfer of wealth from workers to the rulers, who assume the title of “shareholders” and “executives.” Yet, this extraction of wealth is cleverly disguised as a harmless, or more often, benign, retirement savings scheme, misleading workers into passively acquiescing to their own exploitation.

Under the oppressive gears of capitalism, driven by the relentless hunger for perpetual growth, these savings plans don't just subtly coerce workers into endorsing their own exploitation—they force them to champion an ever-escalating cycle of exploitation. This vicious spiral is demanded by a system addicted to ceaseless profit increases year after year, chaining workers to a fate where they root for deeper cuts into their own flesh. Essentially, through these defined contribution plans, workers unwittingly empower their rulers to repeatedly enact the very cost-cutting measures that threaten their jobs, deny them raises, and increase their workload and hours.

Relinquishing Control

A troubling feature of 401(k) plans is the significant loss of control they impose on workers, who must hand over their financial decision-making to corporate giants like Vanguard, Blackrock, or State Street. Workers are compelled to hand over their retirement funds to corporations like Vanguard, Blackrock, or State Street because these financial goliaths contract with employers to manage 401(k) plans, effectively controlling the investment options and strategies available to employees. These management companies administer 401(k) plans, offering workers only a limited selection of investment options that are chosen to serve corporate goals rather than the financial needs or preferences of the employees themselves. This limited selection gives the appearance of choice, but in reality, it substantially diminishes workers' autonomy over their own retirement funds.

In other words, these managers make critical investment decisions without direct input from the workers, decisions that shape the potential growth and security of the workers' retirement savings. Consequently, workers are left on the sidelines, passive observers of their own financial destinies, reliant on the strategies and ethical considerations of entities that prioritize corporate profitability over individual security.

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Despite the fact that, collectively, the controlling stake in almost all publicly traded companies is technically "owned" by a broad base of worker-investors, the reality is starkly different. By channeling investments through entities like Vanguard, workers are stripped of any direct influence over corporate actions. When workers entrust their savings to financial behemoths like Vanguard, they effectively hand over their shareholder "voting rights," surrendering any semblance of control over the corporations their collective labor has built.

This arrangement starkly illustrates how capitalist structures co-opt workers’ assets for corporate gain, rendering them powerless in decisions that affect their own economic futures. Intermediaries like Vanguard wield our collective power to relentlessly pursue corporate profit growth, endorsing actions that ruthlessly undermine our interests as workers. They push for job cuts, relentless lobbying against fair wage laws, and environmental shortcuts—all leveraging our collective votes to bolster shareholder value at the expense of the very workforce that enables it.

The systemic channeling of worker investments into entities like Vanguard, Blackrock, and State Street is not merely a feature of modern financial management; it is a cornerstone of capitalist power dynamics. This process ensures that the vast pool of capital derived from workers' savings is used not to empower those workers as shareholders, but rather to fortify the very structures that oppress them. With our collective investments holding controlling stakes in nearly all publicly traded companies, the corporate elite deliberately divert this immense power into their own hands to maintain dominance. They design this system to crush any potential worker resistance, ensuring their agendas remain unchallenged while deepening economic disparities that empower the elite at the expense of the working majority.

Blindness to Class Antagonisms

The financialization of workers' savings essentially turns their labor into a commodity. By reducing their economic agency to numbers in an investment portfolio, workers are disconnected from the real outcomes of their own economic contributions. As their hard-earned money is invested in large capitalist enterprises, it's managed under the guise of seeking growth and security. However, this management actually reinforces the power structures that limit workers' autonomy and freedom.

Investment funds serve as tools that embed workers deeper within the capitalist system, presenting their subordinate position as a necessary efficiency rather than exploitation. This makes the process seem like prudent financial management, but it's really about maintaining the status quo. This creates a cognitive and practical dissonance, where the worker’s financial planning for the future is tied up with strategies that undermine their present livelihood and working conditions.

As workers see their retirement savings—invested in volatile stock markets—potentially jeopardized by decisive labor actions, there arises a rational general reluctance to engage in or support extensive strikes or vigorous protests. This caution stems from the fear that disrupting the market, even temporarily, could diminish their financial security, despite the potential long-term benefits such actions could have on improving working conditions.

Without the backing of unorganized laborers whose retirement funds are entrenched in the stock market, organized labor faces a much tougher challenge in gaining public support for substantial changes that would shift power from the elite to the people. This dynamic introduces a significant delay in the class struggle, reducing the momentum for radical change. Thus, the capitalist class gains a buffer period to adjust and refine oppressive strategies, reinforcing the status quo and perpetuating the cycle of worker exploitation, all while maintaining a facade of empowering workers through financial participation.

The capitalist class exploits this lag, not only through overt repression but also through more subtle forms of coercion. By shaping norms and expectations—such as the prioritization of market stability over the improvement of labor conditions—they manipulate workers into accepting, and even defending, a system that fundamentally works against their interests. This ideological control helps sustain the status quo, continually diverting attention from the systemic exploitation that underpins the capitalist system and muffling the calls for transformative change that might otherwise resonate through the working class. This clever manipulation of worker priorities ensures that any potential disruptions to capitalist accumulation are blunted, securing ongoing dominance by the ruling elites.

The UAW’s Investment Strategy and Worker Conflict

Even within organized labor contexts such as unions, bureaucratic structures often paralyze workers into a passive acceptance of a system that purports to aid their financial well-being while subtly undermining their real interests, just as unorganized laborers, with their retirement funds tied to the stock market, passively support the corporate entities they should be challenging. In unions, this dynamic is replicated through bureaucratic controls that bind workers to the same detrimental financial entanglements, ensuring that even within organized frameworks, the mechanisms ostensibly designed to empower workers instead reinforce their submission to a system that undermines their genuine interests.

For example, the UAW bureaucratic apparatus derives a substantial portion of its revenue from indirect auto company subsidies and Wall Street investments. These funds have been used not just for operational costs but to swell the ranks of its high-paid staff and finance extravagant leadership conferences, from which the ordinary union member is conspicuously absent.

Dues from UAW members are funneled into various mutual funds and stocks globally, including stakes in companies whose workers are represented by the union. In essence, the auto workers' union is investing in the very companies they are negotiating with for better wages and conditions! Notably, the UAW also has investments in notorious hedge funds like Bardin Hill Investment Partners and Kohlberg Investors IX, firms infamous for harsh worker cuts, operating out of places like the Cayman Islands. Thus, the UAW is investing in both the employers that exploit their own members and in corporate entities that extract wealth from workers generally.

As a result, net spending for the UAW, excluding strike payouts, escalated dramatically from $258 million in 2022 to $318.4 million in 2023, with compensation for headquarters staff rising from $52.57 million to nearly $59 million. This investment strategy has undeniably benefitted from the stock market's recent boom, driven largely by Wall Street's aggressive undermining of the working class's social standing, particularly through widespread layoffs, wage suppression, and the denial or reduction of benefits.

Ostensibly, these vast reserves bolster the UAW's strike fund, yet strikes are rarely called and are often restricted in scope. Last year's "stand up strike" saw most auto workers continue to labor, while the employers’ revenues actually increased. The strike fund, rather than serving as a militant tool against corporate power, increasingly appears as a financial cushion for the union bureaucratic elite, not the workers it claims to represent.

This arrangement embodies a conflict: while the union fights for better wages and conditions, its financial health and the ability of its strike fund to grow are largely dependent on the prosperity of the same corporate entities they may be contesting. This interdependence complicates the union’s role and its strategies in advocating for workers' rights.

Conflict Between Worker Advocacy and Financial Interests

The financial maneuvers of the UAW, particularly its investments in the very companies its members labor under, reveal a stark betrayal orchestrated by union elites. These leaders—career unionists who have risen through the ranks—are entrenched in safeguarding their own positions, power, and privileges at the expense of the rank-and-file workers they claim to represent. These bureaucratic elites have distanced themselves from the daily struggles of the workforce, becoming gatekeepers who often suppress radical initiatives that could genuinely empower workers.

This leadership stratum, with its grip firmly on the union’s strategic levers, has consistently shunned aggressive labor actions that might jeopardize their investment portfolios and their cozy relationships with corporate powerhouses, or possibly even invite state backlash. Their risk-averse, conservative tactics dilute the potential for revolutionary changes, favoring instead incrementalistic policies that do little more than maintain the status quo. In negotiations, these leaders are quick to prioritize job security over substantial wage increases or essential adaptations to industry evolution, such as retraining for emerging technologies. This strategy goes beyond mere conservatism; it is actively complicit. It represents a deliberate choice by a self-interested bureaucratic elite to align with corporations and a co-opted state, entities that actively resist transformative changes.

Reflection

The seismic shift from defined benefit (DB) plans to defined contribution (DC) plans marks a significant transformation in the landscape of worker retirement security. This transition encapsulates a broader trend in the neoliberal economic agenda, prioritizing market solutions and individual responsibility over collective welfare and guaranteed benefits. By shifting the burden of retirement savings to individuals, workers find themselves compelled to invest in and support the very corporate systems that may undermine their job security and wage growth. The involvement of financial giants like Vanguard in managing these investments exemplifies a deep entrenchment of capitalist interests in workers' lives. These firms, by controlling vast pools of retirement funds, not only influence corporate governance but also align workers' financial futures with the health of the stock market and corporate profitability, effectively muting potential collective dissent against exploitative practices.

In parallel, the role of unions like the UAW in this financialized landscape reveals a troubling convergence of interests between union leadership and corporate power. As unions invest in the stock market, including in companies they negotiate with, there arises a conflict between advocating for robust labor rights and maintaining the financial performance of their investments. This duality suggests a corrosion of union solidarity, driven by a bureaucratic elite more attuned to the fluctuations of the market than to the struggles of the rank-and-file members. Such dynamics underscore a broader erosion of labor power, where the traditional role of unions as bulwarks against corporate excess is compromised, making them less a force for challenging the status quo and more a part of the financial systems they should be critiquing.

It's time to disengage from these capitalist structures that exploit us and instead cultivate solidarity rooted in class consciousness. Only by recognizing our collective power and prioritizing mutual welfare can we dismantle the financial machinery that subjugates workers and reclaim our future.

Peter S. Baron is the author of “If Only We Knew: How Ignorance Creates and Amplifies the Greatest Risks Facing Society” (https://www.ifonlyweknewbook.com) and is currently pursuing a J.D. and M.A. in Philosophy at Georgetown University.

Charter Schools Will Desert and Violate Thousands In 2024

By Shawgi Tell

Privately-operated charter schools have been around for 32 years. They fail and close every week, abandoning and harming hundreds of parents, students, teachers, education support staff, and principals. Neoliberals cynically call this “free-market accountability.”

These closures, moreover, are often sudden and abrupt, revealing deep problems and instability in the charter-school sector. Parents, students, teachers, education support staff, and principals often report being blindsided by such closures and how they have to anxiously scramble to find new schools for students.

Officially, 2,315 charter schools failed and closed between 2010-11 and 2021-22 alone (an 11-year period). On average, that is 210 privately-operated charter school failures and closures per year, or four charter school failures and closures per week. The real number is likely higher. Over the course of 30+ years more than 4,000 privately-operated charter schools have failed and closed. That is a high number given the fact that there are under 8,000 privately-operated charter schools in the country today.

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The top four reasons privately-operated charter schools fail and close every week include low enrollment, poor academic performance, financial malfeasance, and mismanagement. Thus, for example, every week the mainstream media is filled with articles on fraud, corruption, nepotism, and embezzlement in the charter school sector. Not surprisingly, arrests and indictments of charter school employees, trustees, and owners are common.

While fraud, corruption, nepotism, embezzlement, and scandal pervade many institutions, sectors, and spheres in America, such problems are more common and intense in the charter-school sector.

Despite all this, a dishonest neoliberal narrative keeps insisting that these privately-operated schools are superior to the public schools that have been defunded and demonized by neoliberals for more than 40 years. The public is constantly under top-down pressure to ignore or trivialize persistent charter school failures and problems.

In this context, the public should reject relentless neoliberal disinformation that public schools are a commodity or some sort of “free market” phenomenon. It should discard the idea that parents and students are consumers who should fend-for-themselves while “shopping” for a school. The law of the jungle has no place in a modern society. Such a ruthless survival-of-the-fittest approach to individuals, education, and society is outmoded, guarantees winners and losers, perpetuates inequality, and increases stress for everyone.

The public should defend the principle that education in a modern society is a social human responsibility and a basic human right, not a commodity or consumer good that people have to compete for. A companion principle is that public funds belong only to public schools governed by a public authority worthy of the name.

Charter schools are not public schools. They are privatized education arrangements, which means that they should not have access to any public funds that belong to public schools. Public funds should not be funneled to private interests. School privatization violates the right to education.

Currently, about 3.7 million students are enrolled in roughly 7,800 privately-operated charter schools across the country. The U.S. public education system, on the other hand, has been around for more than 150 years and educates about 45 million students in nearly 100,000 schools.

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.

A Feature, Not a Bug: How Henry Kissinger is a Symbol of a Broader American Imperial Rot

By Sudip Bhattacharya

As legendary English metal band Iron Maiden sang in a 1988 track, “Only the good die young. All the evil seem to live forever.” Enter Henry Kissinger.

On May 27th, 2023, the former Secretary of State and National Security Advisor turned 100 years old. As Kissinger begins his second century on this planet, he remains a beloved figure within America’s political class. His multiple birthday parties were attended by many A-listers including Democrats John Kerry and Michael Bloomberg, and Republican James Baker. Yes, the elite outpouring for Dr. K — as Kissinger is affectionately known in establishment circles — is a bipartisan affair. But the exploited and colonized masses hold a much different view of the so-called diplomat.

Across the Third World, Kissinger’s legacy is that of a heartless war criminal. In the Nixon administration, Kissinger supported some of the world’s most brutal right-wing regimes in places like Argentina and Chile. He also greenlighted mass slaughters of Bangladeshis and the Timorese.

In a groundbreaking piece for The Intercept, Nick Turse analyzes formerly classified documents to uncover mass killings of Cambodian civilians during the Nixon era. Transcripts of calls unearthed by Turse prove Kissinger’s direct role in these massacres. In one particularly ominous phone conversation, Kissinger ordered a general to kill “anything that moves” with “anything that flies.”

This savage commitment to expanding American hegemony at all costs has left an indelible mark. Kissinger’s ideology is now a feature — not a bug — of the United States foreign policy establishment. So much so, in fact, that many of his diplomatic successors are even more extreme than him.

Revitalizing Empire

Henry Kissinger emerged at a time of mounting skepticisim toward American empire and the institutions that uphold it. In 1975, the Senate almost unanimously approved the creation of the bipartisan Church Committee — a body investigating security state abuses. At the same time, the Republican Party was home to the late Representative Paul Findley. The congressman from Illinois was fiercely pro-Palestine and anti-war. Findley couldn’t exist in today’s radicalized GOP, where support for Israeli apartheid and the war machine are prerequisites for membership.

Kissinger, alongside other odious characters like the Dulles brothers, represented a backlash to these currents. Dr. K was a staunch cold warrior. He believed strongly in using American military might to eliminate communism and defend corporate profitability at all costs.

And he found ideological allies in the Central Intelligence Agency (CIA). The agency’s upper echelons were full of anti-communist stalwarts and other extremist elements. As Stephen Kinzer writes in Overthrow, leaders of the CIA outright dismissed anything that might interfere with the aims of American multinationals.

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While occupying America’s most powerful diplomatic posts, Kissinger was a steward of this tendency. In fact, he accelerated and intensified some of the worst pattens already bubbling within the security state. While preaching diplomacy publicly, Kissinger showed an unnerving stomach for bombings and the so-called collateral damage they caused. This earned him favor among the morally bankrupt conservative and liberal elite. In 1973, they awarded Kissinger the Nobel Peace Prize despite him never meeting a war he did not like.

This underscores a reality that is fundamental to understanding Kissinger’s place in history. While Dr. K was a reaction to some currents within the American foreign policy scene, he was an intensification of others. In this sense, Kissinger was no anomaly. So much of the political establishment agreed with his ideas and participated in their implementation.

American Imperialism As a Bipartisan Project

After Nixon resigned in disgrace, and Gerald Ford lost the 1976 election, it became clear Kissinger had made an impression. On January 1st, 1977, Democratic President Jimmy Carter took office. Despite not occupying a spot in the opposition party’s new administration, Kissinger’s foreign policy proceeded apace. Carter even appointed Zbigniew Brzezinski — a sort of Democratic Kissinger — to be his Secretary of Defense.

Together, Carter and Brzezinski instituted policies Kissinger would have been proud of — and probably was. The duo funded the Mujahideen — and, by extension, Osama bin Laden — to fight the Soviets in Afghanistan. Anti-communism was the overriding imperative, even if it involved supporting theocratic armies who threw acid on women learning to read.

But the Carter administration was short-lived. The Georgia native lost the 1980 election to Ronald Reagan. But, while Carter and Brzezinski left office, Kissinger’s legacy most certainly did not.
The hard-right Reagan personified authoritarianism, neoliberalism, and American exceptionalism on steroids. While he claimed to want dialogue with the Soviets, Reagan funded extreme anti-communist groups throughout Central America. He also invaded Grenada and toppled its government following the country’s socialist revolution.

Kissinger’s imperial fervor continued into the Clinton years. The Democratic administration of the 1990s subjected Iraq to a brutal sanctions regime, killing thousands of Iraqis through deprivation. Clinton also opted to continue the Cuban embargo, which remains in place to this day.

After Clinton came George W. Bush, whose War on Terror exemplified the Kissinger protocol: non-stop intervention and destabilization with overtures to diplomacy and the proliferation of rights and freedom. Obama then advanced this protocol further still, albeit less intensely, but was nonetheless very much beholden to military intervention. He punished the Middle East in particular with drone strikes, sanctions, and alliances with Islamic militants and the Israeli state. Not to mention that fact that Obama turned a blind eye to Saudi war crimes against innocent Yemeni civilians.

Essentially, Kissinger’s views carried forth in spirit with every subsequent administration. Ironically, too, the “Kissinger effect” has led to elements within the foreign policy establishment becoming even more radicalized than him. Contemporary US-China relations provides seemingly endless examples of this.

Both Biden and Trump officials often signal their willingness to rachet tensions with China. Mike Pompeo, who Trump appointed to head the CIA and State Department, claims Xi Jinping seeks world domination. The current Secretary of State Antony Blinken has voiced similar sentiments. During his confirmation hearing, Blinken told the Senate that “China posed the most significant challenge… of any nation.” He has also accused the country of “crimes against humanity,” “genocide,” “repression,” and “crackdown[s] of basic rights.”

Kissinger sounds dovish by comparison. In a recent interview with The Economist, he stressed the importance of maintaining friendly US-China relations. Kissinger also poured cold water on some of the more gauche sinophobic hysterics. He insists Xi Jinping is not the next Hitler and that China has no plans of world domination. According to Kissinger, the Asian powerhouse does not even seek to impose its culture abroad.

a cog in a rotten system

In the end, Henry Kissinger must face justice. But we should aso view him as part of a broader network of war criminals. And that network is both continually expanding and a revolving door. Recently, President Joe Biden nominated Elliot Abrams — a man notorious for atrocities in Central America — to a federal diplomacy commission. Biden’s predecessor Donald Trump had made Abrams his Special Representative for Iran and Venezuela.

Those serious about overturning American imperium must address Kissinger and the forces beyond him — many of which he has inspired. True justice for the victims of United States foreign policy means nothing short of wholesale change to the entire apparatus. It is not just about punishing Kissinger but also stopping future Kissingers from ascending to power and harming more innocents.

This is a daunting task. United States progressives are already struggling to confront domestic issues, let alone global ones. Still, the task remains. To create a free and friendly world for the working class and the oppressed globally, the American empire must crumble. Its Kissingers must fall. While Dr. K may celebrate another birthday soon enough, it’s our responsibility to create a landscape that celebrates humanity instead.

Sudip Bhattacharya is a doctoral candidate in political science at Rutgers University. He also has a background as a reporter and continues to write for major outlets from Current Affairs to Protean and The Progressive.

Elias Khoury is the managing editor of the Hampton Institute.

Sketching a Theory of Fossil Imperialism

By Bernardo Jurema and Elias Koenig

This is a summary of the paper ‘State Power and Capital in the Climate Crisis: A Theory of Fossil Imperialism,’ presented by the authors during the “Confronting Climate Coloniality” - Paper Session at the American Association of Geographers (AAG) annual meeting on March 26th, 2023. It is also an overview of some of the main ideas that we hope to further develop this year. While the research behind the conference paper was carried out at Research Institute for Sustainability - Helmholtz Centre Potsdam (RIFS), the opinions and viewpoints expressed herein are our own and do not represent the standpoints of RIFS as a whole. This piece was originally published on the RIFS Potsdam website.

In recent years, both activists and researchers have started to invoke the term fossil imperialism to highlight the ways in which imperialist politics are tied up with the logic of fossil capitalism. Under fossil capitalism, ceaseless accumulation of capital necessitates continued expansion of an energy base of coal, oil, and natural gas. Imperial states play a key role in the process, which has in turn enabled a remarkable concentration of imperial power and continues to do so in today’s world order. Understanding fossil imperialism, therefore, is necessary for devising effective strategies of resistance to a planet-wrecking capitalist status quo.

Our model of fossil imperialism attempts to sketch the general workings of this relationship between imperial states and fossil capital in its historical development over the past two centuries and in its different varieties. It is principally based on the two general modes of expansion and obstruction. On the one hand, the expansion and protection of new fossil fuel resources and infrastructure are crucial to keeping the engine rooms of fossil capital well-supplied. On the other hand, the obstruction or destruction of the infrastructure of rivaling capital factions and states in order to maintain control over pricing and distribution has been equally integral to the history of fossil imperialism. In this way, the workings of fossil imperialism reflect the more general nature of capitalism as a mode of production and destruction.

It is important to take into account the specific characteristics of the three dominant sources of fossil energy (coal, oil, gas) when analyzing concrete cases. While all three energy sources still hold a significant share of the global fossil economy, each also corresponds to a distinct historical phase in the development of fossil imperialism. Coal powered the rise of the British Empire, the switch to oil marked the ascent of American hegemony in the 20th century, and fossil gas is increasingly at the core of the United States’ attempt to continue projecting its supremacy well into the 21st century. While there is growing concern over new forms of "green imperialism", especially in relation to the extraction and distribution of the raw materials supposedly required to decarbonize the economies of the North, current fossil-fueled conflicts such as the Russian war in Ukraine or the Saudi war in Yemen show that the age of fossil imperialism is - unfortunately - far from over.

There are at least five ways in which imperial states facilitate the interests of fossil capital: through colonization, the projection of military power, the suppression of anti-extractivist movements, economic warfare, and the domination of global institutions. This scheme makes plain the crucial role of fossil fuels, functioning variously as a driver, as an enhancer or as an outcome of imperial states' actions. It disentangles the ways in which contemporary politics are significantly influenced by fossil fuels, which have played a defining role in shaping the structure of capitalist corporations, settler-imperial states, and earth-transforming technoscience. These arrangements have had profound consequences for ecological destruction and the implementation of ecological management strategies.

Colonization is a form of direct political domination and subjugation of one people by another. It was perhaps most evident during the “golden” age of coal, the fossil fuel that powered the rise of the British Empire — from Australia to India, from South Africa to Borneo. Because coal extraction requires a large amount of disciplined labor, arguably, it also necessitates more comprehensive forms of social and political control than oil and gas extraction. At the same time, the British — in many cases — obstructed the rapid expansion of foreign coal industries to protect their own domestic industry.  Even in the case of oil and gas, many of the major private companies like BP and Shell still operate in markets shaped by colonial legacies.

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“Projection of military power” refers to different kinds of military interventions short of full-on colonization. Historically, states often deployed their own forces to protect fossil infrastructure abroad — a practice that continues today in various ways. Projection of military power also takes place through proxy armies, funded through a closed circuit of oil money and weapons contracts, as in the case of the Gulf monarchies. The 20th anniversary of the invasion of Iraq reminds us how current the role of military power remains. Twenty years after the regime-change military intervention, the United States still has 2500 troops stationed in the country. And, as has recently been revealed, BP and Shell, which had been barred from the country for decades, have extracted tens of billions of dollars in Iraqi oil post-invasion.

The pursuit of regional economic dominance on the part of fossil imperial states requires the suppression of anti-extractivist movements and other grassroots movements opposed to the social order. Interventionary military assistance was justified from the 1990s onwards on the basis of immigration enforcement, anti-narcotics control, and fighting against general criminality. For example, the role of the War on Drugs in continuing counterinsurgent practices against civilian population that were carried out until the late 1980s within a Cold War framework. However, according to Russell Crandall, professor at Davidson College in North Carolina and former Pentagon and National Security Council official under George W. Bush, the significant role in shaping outcomes is not primarily played by the U.S. military advisors, but rather by the "imperial diplomats" – the civilian officials within the U.S. foreign policy structure.

In his study of economic sanctions, Cornell historian Nicholas Mulder has demonstrated that modern-day sanctions developed out of mechanisms for energy control, blacklisting, import and export rationing, property seizures and asset freezes, trade prohibitions, and preclusive purchasing, as well as financial blockade — simply put, economic warfare. He shows that effectively isolating a whole nation from the intricate networks that support global trade requires the ability to gather information and generate knowledge. This involves mapping the intricate web of physical goods and resources that connect the specific country to the rest of the globe. Key factors in this process include having legal authority and access to more precise data and statistics. What makes it possible to impose this unilateral sanctions regime on the rest of the world is the domination of the global (financial and political) institutions that regulate the trade and distribution of fossil fuels. Both 19th-century British and 20th-century US-American dominance stemmed from their respective global leadership in corporate, regulatory, technological, and financial frameworks, which in turn was tightly linked to the pound sterling and later the US dollar being the chief reserve and trade currencies of their time.

In the age of American hegemony, the United Nations and other multilateral organizations — in particular, the Bretton Woods system (the International Monetary Fund and World Bank) — have become key means to maintain its armed primacy and fossil-based economic dominance. Significantly, the US-led bloc thwarted attempts by the newly decolonized countries in the postwar period to build a fairer world order by torpedoing the Third World agenda, the United Nations Conference on Trade and Development, the Non-Aligned Movement and the New International Economic Order.

Conclusion

It is impossible to understand imperialism without understanding the role of fossil fuels in its historical emergence and development. A climate movement that does not actively take into account the mechanisms of fossil imperialism risks being co-opted into imperialist false solutions to the climate crisis. Likewise, anti-imperial movements that fail to break definitively with the logic of fossil capitalism historically fall victim to various social and ecological contradictions. A case in point are the Pink Tide governments of the first decade of the 21st century. As University of Toronto political scientist Donald Kingsbury put it, when "faced with a choice between extraction and the local movements that made their governments possible,” these regimes “sided with extraction." A better understanding of the topic can therefore contribute to more effective climate justice activism, more strategic clarity and tactical innovation, and serve as a basis for more international solidarity.

A Beginner's Guide to Bank Failures

By Ahjamu Umi

Republished from Hood Communist.

According to a February 2023 Federal Deposit and Insurance Corporation (FDIC) audit, 563 U.S. banks have failed and/or come under regulatory authority since 2021. Here in California, U.S., the latest casualty has been the Silicon Valley Bank (SVB). This latest rash of bank failures, especially within the software start up SVB, have alarmed apologists for capitalism all over the world. With this piece, we are hopeful we can bring some fundamental understanding of “bank failure” and what’s happening for everyday working people.

First, it should be explained that the Federal Deposit Insurance Corporation (FDIC) is an institution of the U.S. federal government. It exists to provide some level of guarantees against bank failure. They do this by regulating banks, auditing them, and insuring bank deposits for up to $250,000 USD (aggregate deposits per institution). 

What Does This Mean?

Let’s say for example, you have $275,000 in liquid asset deposits in any U.S. bank. If that bank fails and/or comes under FDIC jurisdiction, your deposits for up to $250,000 are insured by the federal government, meaning the government should issue you a check for that amount. The remaining $25.000 in deposits that you had in the failed bank makes you now a creditor for that bank. This means they owe you that money, just as you owe your credit card companies, car finance institutions, etc.

Of course, like any creditor/borrower relationship, your ability to get repayment has no guarantee. The bank can come under bankruptcy protection, etc., which means you would lose all or most of that $25,000 in this hypothetical example. But that is a fundamental definition of the role of the FDIC. It’s worth noting that credit unions are governed by the National Credit Union Administration (NCUA), which serves the same general purpose for credit unions that the FDIC serves for banks, including insuring deposits for up to an aggregate $250,000 per customer/member per institution.

It’s important to also note that the FDIC was formed in 1933 as a result of the Banking Act legislation. This happened four years after the great stock market crash of 1929 which means the FDIC was created as a vehicle to encourage renewed trust in the U.S. banking system. It’s that question of trust that provides the basis for creating a simple way of analyzing and understanding what is happening with banks within the capitalist system and how to interpret these bank failures.

The Origins of the Banking System 

Contrary to popular opinion, the international banking system, and the concept of capital as the foundation of that system, did not start from the creative and intellectual genius of the fathers of the capitalist system. Instead, the start up capital for the international banking system came directly from proceeds produced from the enslavement of kidnapped Africans. The labor of their work was converted to revenues that were invested to initiate the banking system and the capital it would rely on to facilitate its existence. Every large international bank today from Chase to Barclays owes its origins to this nefarious beginning. If we understand and accept this irrefutable history, it should be easy to understand that the capitalist banking system, from its beginning, has been about exploitation and its that reality that paves the way for greater understanding of what’s happening today.

How Banks Work 

Banks operate by taking your deposits, no matter how large or small, and investing those deposits to generate capital. The more money you have to deposit, the greater incentives the banks provide you for doing so, for example: no fees, more services, slightly higher dividends (returns on your deposits), etc. Whether you have $250,000 deposited in a bank, or $25, the process works the same. Your money is used by the bank to invest in any number of financial projects designed to provide a positive return for the bank on your deposit. For the overwhelming majority of us, this is done with little to no return to you. 

Let’s say you have a job where your paycheck is directly deposited into your bank account every two weeks, say $2500 twice per month, and from each check you have $300 automatically transferred into your savings account. That means you are saving $600 USD per month. You will receive next to nothing for that money sitting and growing in that bank, but the bank will use your deposits and invest them in any number of profit generating projects— primarily exploitative projects around the world because those types of investments are the best suited to produce the highest return on the dollar. Think exploitative companies that steal resources from Africa for example. Companies like Dutch Royal Shell (Shell Oil) rob Nigeria’s Niger Delta blind drilling for oil. There is no oversight and the workers are paid peanuts. As a result, Shell’s profits continue to break records. Well, a bank will invest in Shell’s stocks and profit from Shell’s theft of resources from Nigeria. As Shell’s profits grow, the bank’s profits grow. And, by profits we mean capital i.e. money the bank earns that serves the sole and specific purpose of being reinvested for additional profits.

That’s why when the capitalist commentators talk about most U.S. banks being “well capitalized” they are actually telling the truth. These banks have millions of dollars – dollars they made investing your deposits – sitting around ready for them to invest to make even greater profits. Meanwhile, you get slim to nothing from them using your money and you will even be penalized if you come upon rough times and cannot maintain the minimum requirements they demand to keep your account(s) going. They have to make those demands of you because if your money isn’t available to them, they have nothing to invest and profit off of it. If you think about it, the banking model is basically the same as someone coming to you, taking your paycheck when you cash it, using your money to make additional money from it, and just returning to you what they took from you in the first place. And, if they are unable to get a return on your paycheck, they are usually supported by the government in their financial challenges while you are left to figure out how to proceed on your own with no help or support.

Silicon Valley Bank & Banks Playing With Your Money

That’s still not even the full story. Besides the example of investing in the exploitative practices of Shell and other criminal multi-national exploitative capitalist corporations, the banks invest heavily into shady and high risk ventures like securities from the secondary market. These types of investments are often bundled high risk mortgage loans, meaning loans provided to buyers who’s repayment potential is questionable, but who agreed to repayment terms at much higher, and profitable, interest rates. These types of unscrupulous business practices by banks have resulted in devastating consequences, such as the 2008 mortgage crash in the U.S. where everyday consumers were left houseless while the banks were bailed out by the 2009 multi-billion dollar gangster deal – compliments of the Obama Administration – one of the most lucrative welfare schemes in human history, recently eclipsed by the $2.2 trillion CARES Act of 2020. As it relates to banks like the Silicon Valley Bank in Santa Clara, California, U.S., the same principles apply. This bank was the home for software startup companies who invested incredible sums of money in highly questionable ventures for most of its 40 year existence. As has been alluded to, this has always been the program of capitalist banks, but in recent years we are seeing the limitations of this strategy much easier because the decline of capitalism has created conditions where the once assumed stability of capitalist banks is now more and more in question. 

Let the Banks Fall While We Rise  

This is a reality that will continue to create hardship for millions of people worldwide, but in the long run, this also has the potential to represent a new day for the masses of humanity where capital no longer controls the narrative everywhere on earth. There are a lot of variables to unpack in order to create that reality, but for now, the best thing all of us can do is engage every effort that we can to educate our communities about the role of banking institutions to profit from our continued exploitation and how the system is set up to support their existence, while making us the main source of accountability for ourselves and their greedy exploitative practices. This problem, like every other problem we face, cannot be resolved through any level of individual initiative. It cannot be resolved by any other approach to stabilizing the capitalist system. This problem is a reflection of the exploitative basis from which capitalism developed hundreds of years ago and it’s simply a manifestation that this profit over people model of operation is existing in its final days. This may be a scary thought to many, but at the end of the day, Kwame Ture was 100% correct when he said that “if we don’t struggle for revolution, we suffer so why don’t we organize and take the suffering as a pathway to our liberation and forward progress instead of just continuing to suffer with no end in sight?”  Capitalist banks are viewed as vehicles to provide us with houses, cars, loans, etc. What they are in reality is a criminal operation that is 100% supported by the U.S. government which is nothing more than a mouthpiece for international capitalism. The sooner we can do the necessary work to create broader consciousness around this, the sooner we can reclaim the resources that rightfully belong, not to a small and criminal elite, but  to the masses of people on earth. 

Ahjamu Umi is revolutionary organizer with the All African People's Revolutionary Party, adviser, and liberation literature author.

Imperial Roots of the Global Food System: A Review of Chris Otter's 'Diet For A Large Planet'

By Amy Leather

Republished from Climate & Capitalism.

Why do we eat what we do? This is the question Chris Otter seeks to answer in Diet for a Large Planet. It is very timely. In recent years there has been growing anger and horror at a food system that delivers both unhealthy and environmentally destructive diets. Food has become deeply politicized.

In 2019 the medical journal The Lancet published what it called a “planetary health diet.” Their conclusion was that “the world’s diets must change dramatically” to save the planet and ourselves. They argued that a Great Food Transformation is required — a move away from what is often called the Western Diet, high in red meat, refined grains, saturated fat and sugar, to a more plant based diet.

This is not in fact a new argument. Otter’s title deliberately echoes Diet for a Small Planet, first published 50 years ago, in which Frances Moore Lappe blamed a diet rich in meat and refined carbohydrates for environmental and health problems.

But when looking at today’s food systems most commentators tend to focus on the post war period, and in particular the role of the US in driving a model of industrialized food production and agriculture. This is a model epitomized by the ascendancy of processed foods, the growth of the fast food giants and supermarkets, and the scale and dominance of agribusiness.

However, Otter argues that “in order to understand the deeper history of today’s global food situation, it is necessary to explore post-1800 Britain.” He argues that “Britain laid the foundations for contemporary food systems. It was the nineteenth century’s dominant world power, controlling immense global resources, and creating long distance food chains to supply vast quantities of meat, wheat and sugar.” This is a good starting point. Locating our current food systems in a wider political and historical context, very much bound up with the development of capitalism and colonialism.

What stands out in the book is just how early the internationalization of food production developed for Britain. Britain was sourcing foods from round the globe in vast quantities from the mid 1800s, importing grain, meat and dairy products.

Otter shows this with a vast array of statistics. He outlines how “the volume of British food imports rose almost eightfold between 1850-52 and 1910-12, by which time they represented around two fifths of all British imports by value. Over four fifths of bread consumed in Britain came from imported grain by 1909.”

Initially Ireland had contributed much of Britain’s imports of grain, meat, butter and livestock but Britain soon became the world’s richest single consumer market for food and raw materials. In 1860 Britain received 49% of total Asian, African, and Latin American food exports. In 1930 with just under 3% of the world’s population Britain imported 99% of world’s exports of ham and bacon, 63% of its butter, 62% of its eggs, 59% of its beef, 46% of cheese, and 28% of its wheat and wheat flour.

Otter looks in detail at how Britain came to import so much meat, grain and sugar. For example, during the 1800s farmers in Britain had experimented with selective breeding to produce the cows and other animals ideal for meat production, such as short horn cows and Herefords. It soon became more profitable to ship these types of livestock out to new areas of the globe, such as the United States and Argentina, to be bred and reared on their huge pastures and their meat imported back to Britain.

Such outsourcing, as Otter calls it, meant a vast infrastructure was built in these areas. As he outlines “there were nearly 70 million cattle in the US by the early 1930s. This heavily capitalized industry with its vast ranches and industrialized meat packing, operated on a much larger scale than Britain’s.” It’s not hard to see how this paved the way for the great acceleration of meat production after 1945 in the US.

There was a massive increase in the amount of wheat bread consumed in Britain between 1771-1879, and by 1911 wheat bread provided around half the working class calorie intake.

Otter outlines how Britain had been self-sufficient in wheat until about 1850. However, at that point wheat production started to become unprofitable and so grain began to be drawn from different and shifting areas of the globe, including Australia, India, Argentina and North America. By 1909 over 80% of British bread was made with imported grain.

Alongside meat and bread, sugar also became central to the British diet. In a short period of time it went from being a luxury to an essential. Otter makes the point that it became a cheap “fuel food” for the working class in Britain. By the late eighteenth century Britain consumed nearly half of all the sugar reaching Europe, and British consumption levels were over ten times higher than those in the rest of Europe. In 1750, the average Britain received 72 calories daily from sugar, by 1909-13 this figure was 395. Sugar still provides 12-15% of Britain’s calories.

Such cheap calories were a consequence of colonialism and slavery. Portuguese, Spanish, French and British colonial systems created a sugar industry linking Europe to the Caribbean and parts of South America. For Britain Barbados became particularly lucrative, with sugar becoming the island’s most important export by 1650. Jamaica was colonized from 1664, and by 1805, it was the world’s largest sugar exporter. By the 1830s Britain was using some two million overseas acres for sugar production.

Alongside exploring the internationalization of food production, Otter also shows how mass production techniques and food processing are not just a postwar invention. For example, the mass production of bread began in the 1870s. Traditional milling methods in Hungary and the US were replaced by roller milling and then introduced into Britain. It is fascinating to note that factory made American cheese was already cheaper than British cheddar in the 1860s — and arrived in Britain in increasing quantities. Mass production techniques meant that Britain was producing some 300,000 tons of biscuits by 1939 while sweets we know today such as fruit pastilles and fruit gums have been industrially produced since the late 1800s.

However, Otter seems to argue that this internationalization of food production or outsourcing was a consequence of what he terms a “large planet philosophy.” He defines this as “the premise that the entire earth was a potential source of material wealth and capital investments.”

The implication throughout the book is that the idea of sourcing food from across the globe was the driving force behind the developments rather than the dynamics of capitalism. Here the book is at its weakest. While Otter references Marxism in his introduction as a framework he will draw on, there is virtually no discussion of how the development of capitalism turned food into a commodity. There is nothing about how the competitive accumulation and the drive for profit at the heart of capitalism impacted on food production, including its expansion across the globe.

As Martin Empson points out in Land and Labour, “Marx understood how the development of industrial capitalism in one part of the world had the effect of shaping the agricultural economies of the rest of the world.”

In Capital, Marx writes that, “large scale industry, in all countries where it has taken root, spurs on rapid increases in emigration and the colonization of foreign lands, which are thereby converted into settlements for growing raw material of the mother country…. A new and international division of labour springs up, one suited to the requirements of the main industrial countries, and it converts one part of the globe into a chiefly agricultural field of production for supplying the other part, which remains a pre-eminently industrial field.”

Diet for a Large Planet often reads almost as a summary of political thought and as though food production was shaped by a battle of ideas. Of course there were competing ideas, for example over free trade, a requirement that underpinned cheap food imports. But these reflected real class interests, as well as divisions within the ruling class themselves. The battle over the Corn Laws of 1815 exemplified this — with the established landowning class wanting to keep grain prices high while the rising class of industrialist capitalists wanted cheaper grain, so they could pay their workers less.

Without such a framework of understanding the dynamic of capitalism, the drive for profit at the heart of it and how different class forces asserted themselves, the central arguments the book seeks to make are weakened.

While Otter makes some interesting points about food, power and racism, he downplays the centrality of slavery to the development of capitalism. And although he explores the Irish and Bengal famines he doesn’t emphasize the fact that food was exported from these countries during those famines.

The book contains a wealth of detail and a vast array of facts and figures, covering everything from imports to the size of working class kitchens, from animal slaughter techniques to historical records of calorific intake and tooth decay, from the working of grain elevators to the specifics of the sugar extraction process and beet production, and much more. This makes the book a useful resource, but at times I felt that the detail drowned out the big picture and obscured explanation and analysis.

Overall, Diet for a Large Planet is a useful, and at times thought provoking, contribution to the discussion of food systems, but I finished it with unanswered questions.

The Stimmy and the State

By Tyler Zimmer

Republished from Rampant Magazine.

In a recent piece in Jacobin, Matt Bruenig hails the new stimulus bill as a “watershed moment” in the fight against poverty in the United States. This dramatic “ideological reversal,” “a revolution in welfare state thinking,” as he describes it, has shattered a “25-year bipartisan consensus” against direct cash payments to the poor. “The fact that we had this debate and the pro-welfare side won is something to be happy about.”

Certainly there are provisions in the bill that benefit poor and working class people. But is this a major turning point in an ideological battle over the legitimacy of welfare state policies? Hardly.

It would be nice if our system of government was a forum for debating the merits of various ideological proposals to advance the common good. But this is simply not how the state under capitalism functions. 

Other things being equal, the state tends to promote the interests of the capitalist class at the expense of the working class majority. 

It does this for at least two reasons. First, the capitalist class spends enormous amounts of money influencing politicians—and this is why the two parties that dominate U.S. politics prioritize the interests of their corporate donors, not the majority of voters. 

Indeed, the 2020 election was the most expensive election in history, with more than $14 billion spent up and down the ballot, most of it paid for by super-PACs and extremely wealthy individuals. As Kim Moody noted in January, “the nation’s rich paid for the 2020 election, and they will be its major beneficiaries.”

Secondly, we’ve got to keep in mind that the state under capitalism depends upon tax revenue generated by capitalist economic activity—and this, in turn, puts governments under enormous pressure to promote a profitable investment climate for the ruling class. Because when profitability dips too low, capitalists lay people off, stop investing, tax revenues drop and a crisis ensues. 

This is a powerful barrier against reform absent sufficient pressure from below. 

These two reasons, then, are why capitalist states tend to consistently prioritize the interests of capital above those of workers. This explains, among other things, why huge banks were given enormous bailouts in 2008 whereas working class homeowners were left high and dry.  

Seen in this light, then, we have to ask: why has the government, which as we know is awash in corporate cash, recently decided to spend money on cash transfers and tax credits for the poor? And why has the ruling class itself been so vocal in supporting these measures? 

Context is important. As Bruenig himself points out, the most recent stimulus bill is not the first, but the third time in the last year that the government has sent out direct cash transfers, the first two coming when Donald Trump was still in the White House and Mitch McConnell was still Senate Majority Leader.

So, rather than representing a dramatic shift, the newest stimulus bill builds on what the previous ones already did. And far from having poverty reduction as their goal, these measures seemed quite obviously aimed at propping up demand and keeping the corporate profits afloat amidst the disruptions caused by the pandemic.

Let’s not forget that each infusion of stimulus had the effect of boosting the stock market—and, last I checked, these markets respond not to ideology as such but to expectations of profit. Indeed, at moments when deliberations over stimulus bills began to stall, markets often took a sudden plunge downward. 

There is indeed a shift going on, but it’s not an ideological shift in politician’s attitudes toward poverty—instead, what we’re seeing is better described as a shift in ruling class attitudes toward government spending and deficits as a way of stabilizing corporate profitability. 

This shift was well underway before Biden took office. As Robert Brenner pointed out months before Trump left office, “some $4.586 trillion, roughly 75 per cent of the total $6.286 trillion derived directly and indirectly from CARES Act money, [went to] the ‘care’ of the country’s biggest and best-off companies.” 

That’s “revolutionary” in a certain sense, but not in the sense that we (socialists) like. 

Still, the question remains: what explains the shift? The background is crucial: long-term stagnation and historically low rates of profit, combined with the sudden shock of the pandemic, caused the U.S. economy to shrink by 4-5% in 2020—the largest contraction since the 1930s. In these circumstances, the ruling class has come to prefer government deficit spending to the thin gruel of austerity, but not because they’ve experienced a sudden conversion to the cause of welfare and poverty reduction. On the contrary, massive infusions of cash from the government—whether in the form of fiscal or monetary policy—appear to be all that’s propping up their economic position. 

Of course, these inconvenient facts haven’t stopped the political boosters of the Biden Administration from engaging in a full-court press to tout the progressive credentials of the stimulus bill. Why they should be so eager to paint it as a historic move to eliminate poverty is obvious: the Democrats, in control of the White House and both chambers of Congress, have reneged on a slew of promises they made to voters in November. For example, they declined to raise the minimum wage to $15 an hour, they have more or less maintained most of Trump’s draconian anti-immigrant measures—we could continue. 

Meanwhile, economic inequality continues to soar as billionaires get richer; rates of unionization continue to stagnate or fall; unemployment and underemployment remain persistently damaging to millions of workers; and come September when the temporary measures from the stimulus will have run their course, bills, rent, mortgages and debts will still be there.

The only way to turn things around is to increase the organization and disruptive power of the working class. Hoping shifts in elite opinion about fiscal policy will morph into a new era of social democratic renewal is not going to cut it. 

Now, someone might reply that insurgent left politicians—like Bernie Sanders and “the Squad”—are the reason this shift in elite opinion is occurring. The idea would be this: Because Sanders ran a campaign that popularized certain pro-worker policies, politicians have been forced to make concessions to our side and reluctantly pass bills sending cash transfers to the poor.  

This strikes me as thoroughly unconvincing. Sanders relentlessly campaigned on a $15 minimum wage and even helped force Biden to give rhetorical support for the measure as a way of securing votes in the November election. But the $15 federal minimum wage is currently dead in the water, despite Sanders’s dogged support for it and despite the fact that the measure is enormously popular with voters. Denying a raise to tens of millions of underpaid workers isn’t exactly what you expect from a government that has been allegedly won over to the imperative of poverty reduction. 

It’s instructive to think about Amazon here. Certainly, Amazon’s owners don’t want a minimum wage hike, since this would dramatically increase their wage bill and eat into profits. But government deficit spending that temporarily boosts the purchasing power of the poor during a recession is clearly worth supporting. 

And let us not forget, of course, that Amazon is a major donor to the Democratic Party—as are similarly large corporations that would suffer a dip in profits if wages were suddenly hiked to $15/hr. Though unions donated a measly $100 million to support Biden’s campaign, the corporate employers who profit on the backs of non-union, low-wage workforces gave much, much more. 

The moral of the story, then, is that we should probably hold off on celebrating the stimulus bill as a major ideological shift to the left or as a substantial victory for our side. After all, capitalist economic expansion often results in some benefits for workers in the way of decreasing unemployment and rising wages—but we don’t celebrate cyclical upswings as victories for the left. 

Victories for the left occur when workers and the oppressed organize themselves, confront the powers that be and force them to grant us concessions. Genuine victories don’t simply make the lives of ordinary people better: they also teach them that, collectively, they have the power to push back against the ruling class and win. 

Though I’m happy that there are self-avowed socialists in Congress making arguments in favor of reform, this layer is currently small and lacks the power to veto policy or force through measures that the corporate-friendly majority opposes. And, outside the halls of government, the organization and combativity of social movements is not presently at a high enough level to wrest concessions from the ruling class. This means that we aren’t in a position to exert a strong influence on policy-making at the moment. 

To change that, we need more power. So in its relative absence, it doesn’t do the left any favors to pretend that we’re winning. And it certainly isn’t good to pretend, when it plainly isn’t true, that the Biden Administration and the Democratic establishment are our allies. 

What, then, is the alternative? 

There aren’t any shortcuts that I can see. But we’ve got to continue to recruit people to join socialist organizations. We’ve got to keep building on the explosion of activism against white supremacy from last summer. We need to find a way to renew the labor movement and spark a drive to organize the unorganized. And we’ve got to elect more self-avowed socialists to government. 

But none of these goals are well served by pretending that the current administration is sympathetic to our cause. The way forward has to include a sober assessment of the obstacles we face. 

The Tragedy of the American Carceral System

By Aneesh Gogineni

On January 31st, 1865, abolitionists countrywide celebrated as the 13th amendment narrowly passed in the 39th Congress of the United States. Taught in American schooling systems through a very whitewashed, watered-downed version of history, most Americans view the 13th as the ultimate blow to slavery set us on track to the illusion in which we live now, where conditions seem equal for all on the surface level. Similarly, many Americans believe that legal segregation stopped after the Civil Rights act. However, both of these conclusions indirectly forwarded to the population by American schooling are far from the truth.

The 13th amendment provided a loophole to maintain and mask the subjugation deemed necessary by capitalism to exploit labor and prevent class solidarity by removing any perception of a problem with capitalism but rather shifting it to criminals. Section 1 of the text of the 13th amendment reads, “Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.” The text rules slavery and involuntary servitude illegal in all instances EXCEPT that of punishment for convicted criminals. In this new era of Reconstruction, white capitalists needed a new method of legal subjugation of black people to distract white workers and continue implicit racial biases. And thus, the Prison Industrial Complex was born.

Since its inception, the Prison Industrial Complex has not served to protect our communities but rather has served to protect property and subjugate minority populations. Through the Jim Crow era, the prison industrial complex did what it does best — incarcerate large populations of black people. However, heading into the 1970s and 80’s as policies were becoming more progressive, prison populations globally and domestically were dropping. Crime rates and the need for law enforcement/imprisonment were very low. Incomes arguably the worst president of the 20th century — Ronald Reagan. As Reagan introduced trickle-down economics and the drug war, prisons were built in California although the crime rates were dropping. As Reagan criminalized marijuana, crack cocaine, and all drug “abuse”, he was able to drastically alter our incarceration rates. Through methods like supporting the Contras, a far-right drug organization stopping socialist change in Nicaragua through having them SELL DRUGS TO BLACK COMMUNITIES IN LA. This is one example of the true impact of the War on Drugs. It justified Reagan and the CIA intervening throughout Latin America, exploiting the resources and labor of workers in the Global South, and then incarcerating millions of black people in the US. Through laws like the 3 strikes law, America was able to justify its mass incarceration of predominantly black people and low-income workers throughout the US.

The 13th amendment has allowed slavery and Jim Crow to manifest themselves within the prison industrial complex. Prisoners work for hours a day with almost no pay. They live in horrible conditions and have no true education or rehabilitation. They have no true chance of re-entering society with a second chance. Reminiscent of Jim Crow, released felons cannot vote, don’t have access to the same housing benefits, job benefits, unemployment, etc. This essentially screws them over and incentivizes them to commit more crimes. Therefore, the US has the highest reincarceration rate in the world, nearing 50%. This has become an industry (thus the label “Prison Industrial Complex” as a critique of the system). With private prison corporations like CoreCivic (formerly the CCA) teaming up with the Drug Enforcement Administration to imprison black people, these corporations have capital incentive to imprison people. This results in tragedies like judges being paid to sentence black teens to longer sentences so that the corporations can make money. The problem extends farther than just carcerality, but also within our capitalist systems that lead to inevitable exploitation of workers subjugated in these conditions. This system justifies these carceral systems within the US.

This rotten system has evolved and maintained its dominance through “acts of purity.” By enacting superficial police and prison reform like body cameras, this reform has justified and legitimized the system without attacking the true roots of the system. Thus, we must aim for more radical means to infiltrate/abolish the system than simple reform. Abolitionist justice involves more than attacking carceral systems head-on, but rather dealing with the root cause of this very problem. Through wealth redistribution, education, and programs like AdvancePeace or CureViolence, Abolitionists must engage in these radical means as a method to reach ultimate abolition of these systems. Social programs and services must also happen simultaneously as abolition as a means of empowering the workers of the world to reach the ultimate end goal of communism/socialism.

Notes

For more information and in-depth analysis on issues of carcerality, these two books are wonderful sources.

The New Jim Crow: Mass Incarceration in the Age of ColorBlindness— by Michelle Alexander.

https://static1.squarespace.com/static/5e0185311e0373308494e5b6/t/5e0833e3afc7590ba079bbb4/1577595881870/the_new_jim_crow.pdf

Are Prisons Obsolete — by Angela Davis

https://theanarchistlibrary.org/library/angela-y-davis-are-prisons-obsolete.pdf

We Have To Stop Valorizing Black Cops

By Mary Retta

Republished from Black Agenda Report.

The purpose of policing—to jail and kill Black folks—remains the same regardless of the officers’ race. 

Policing in America is facing a PR crisis. Following the May 25th murder of George Floyd by Minneapolis police officer Derek Chauvin, the term “defund the police” has become a rallying cry for thousands across the country. Six months later, however, America has not defunded its police force––and in fact, has in some cases taken steps to give police departments even more money. Instead, police forces across America have taken an insidious approach: painting their departments in blackface.

After the January 6th Trump riot at the Capitol building , Yoganda Pittman, a Black woman, was named the new Chief of Capitol Police. Her appointment followed the resignation of former Chief Steven Sund and the arrest and firing of several white police officers who were found to be in attendance at the MAGA riot. Pittman’s appointment appeased many liberals who falsely believe that allowing Black folks to infiltrate or run law enforcement agencies will lead to higher levels of safety for Black Americans. The termination of several officers  who took part in the riot has convinced many that we are one step closer to “reforming” the police by weeding out the racist, bad apples within the department. 

This is a nice narrative, but a false one; in order to understand why, we must look at the history of policing in this country. Modern policing in America was originally created as a replacement for America’s slave patrol system wherein squadrons made up of white volunteers were empowered to use vigilante tactics to enforce laws related to slavery. These “enforcers” were in charge of locating and returning enslaved people who had escaped, crushing uprisings led by enslaved people, and punishing enslaved workers who were found or believed to have violated plantation rules. After slavery was legally abolished in 1865, America created its modern police force to do the exact thing under a different name: maintain the white supremacist hierarchy that is necessary under racial capitalism. The purpose of policing––to jail and kill Black folks––remains the same regardless of the officers’ race. 

Liberal media has also contributed to the recent valorization of Black cops. In the days after the January 6th riot, many news outlets aggressively pushed a story about Eugene Goodman, a Black capitol police officer who led several rioters away from the Congress people’s hiding places while being chased by a white supremacist mob. Several news outlets published testimonials of Black police officers disclosing instances of racism within the department. A January 14th article in ProPublica  notes that over 250 Black cops have sued the department for racism since 2001: some Black cops have alleged that white officers used racial slurs or hung nooses in Black officer’s lockers, and one Black cop even claimed he heard a white officer say, “Obama monkey, go back to Africa.” 

These white officers’ racism is unsurprising, and I am not denying any of these claims. But focusing on these singular, isolated moments of racism wherein white cops are painted as cruel and Black cops are the sympathetic victims grossly oversimplifies the narrative of structural racism that modern American policing was built upon. After hearing these slurs that they were allegedly so disgusted by, these Black cops still intentionally chose to put on their badge, don their guns, and work alongside these white police officers who insulted and demeaned them, laboring under a violent system with the sole purpose of harming and terrorizing Black and low-income communities. Similarly, while Goodman’s actions most likely saved many lives during the riot, we cannot allow one moment of decency to erase centuries of racist violence. 

The great Zora Neale Hurston once said: “All my skinfolk ain’t kinfolk.” Her words ring ever true today, and these Black police officers are an excellent example of why. It’s tempting to believe that putting Black folks on the force will solve racial violence, but this is a liberal myth we must break free of. Allowing Black people into inherently racist systems does not make those systems better, safer, or more equitable: a quick look at many Black folks in power today, such as Barack Obama, Kamala Harris, Lori Lightfoot, and Keisha Lance Bottoms immediately prove this to be the case. Everyone supporting racial capitalism must be scrutinized and held accountable, regardless of their identity. We cannot on the one hand say that ‘all cops are bastards’ and then suddenly feel sympathy when those cops are not white. If we want to defund and abolish the police, we must resist the narrative that Black cops have anything to offer us.

No, We Are Not Going to Beat Capitalism on the Stock Market

By Nathaniel Flakin

Republished from Left Voice.

Given the news over the past week, you would be forgiven for thinking that Occupy Wall Street had come back with a vengeance. Back in 2011, activists occupied a small park in front of a Lower Manhattan bank — now they seem to be “occupying the stock market” itself. Ten years ago, the bankers and brokers could just get their cops to arrest the pesky occupiers — but now, with the loss of billions of dollars at stake, armed thugs in blue are not going to do the trick.

The stock surge for GameStop has rattled financial markets. A motley horde of Internet users have been giving hedge fund managers a run for their money. Those who bet that shares of the retail chain GameStop would lose value (short sellers) have been thrashed as the stock price surged higher and higher, thanks to the targeted actions of thousands of small investors.

The bankers, who for more than a generation have been praising deregulation and the “invisible hand of the market,” are now calling on the government to protect them from losses. So have “little guys” taken over the stock market? Will the revolution be organized on Reddit?

Of course not. This was never going to take down the hedge fund system. At best, its greatest “hope” was to do some short-term mischief and maybe kill one small fund. Melvin Capital Investment is losing billions and might collapse — but Reuters has reported that Blackrock, the biggest asset management in the world, stands to earn $2.4 billion from the rising stock price. As Derek Thompson has explained in The Atlantic, Melvin Capital Investment was betting on GameStop’s stock to fall — and that was always a risky bet:

[GameStop’s] stock had already fallen from $56 a share in 2013 to about $5 in 2019. GameStop’s short sellers were essentially betting that a company publicly valued as “horrendous” should really be valued at a level commensurate with the notion of “truly horrendous.” They risked billions of dollars on the financial equivalent of a qualifying adverb. It’s really risky to aggressively short a company whose stock, having fallen 95 percent, is floating around $5; there just aren’t a lot of numbers under five.

A Rigged System

The discussion around GameStop has shown that the system is hopelessly rigged: even when small investors manage to exploit the rules to their advantage, those rules are simply changed to prop up the big capitalists.

But that’s only the beginning of how it is rigged. Virtually all stocks are controlled by a tiny minority of capitalists. How are all the working people in the world, even if they invested all their savings into the stock market, supposed to compete with the gargantuan sums owned by the likes of Elon Musk, Jeff Bezos, and their wealthy corporate cronies?

The rumblings have led Democratic Party “progressives” such as Elizabeth Warren to call for new regulations. She wants action to “ensure that markets reflect real value, rather than the highly leveraged bets of wealthy traders or those who seek to inflict financial damage on those traders.” Those “highly leveraged” traders,” by the way, are the hedge funds. Warren is worried about someone inflicting damage on them. 

How Capitalism Works

The entire episode is making lots of people wonder: Is this any way to organize an economic system? After all, as the back-and-forth trading has unfolded through these rather absurd machinations, who has been thinking about the effect on the livelihoods of tens of thousands of GameStop employees?

But this casino is how all decisions are made in the capitalist system. Where is housing built, and who gets to live in it? Which medical breakthroughs get funding? Which wars are waged? The same rules deciding the future of GameStop decide all these questions as well.

The stock market and its fictitious capital which condenses all the absurdities of the capitalist system into one small space. So much of the market is about “fictitious capital” — money lacking any material basis in actual commodities or productive activity. As the Marxist economist Rudolf Hilferding explained:

On the stock exchange, capitalist property appears in its pure form, as a title to the yield, and the relation of exploitation, the appropriation of surplus labour, upon which it rests, becomes conceptually lost. Property ceases to express any specific relation of production and becomes a claim to the yield, apparently unconnected with any particular activity. Property is divorced from any connection with production, with use value. The value of any property seems to be determined by its yield, a purely quantitative relationship. Number is everything; the thing itself is nothing! The number alone is real, and since what is real is not a number, the relationship is more mystical than the doctrine of the Pythagoreans.

A Way Forward

Within this absurd system, thousands of working-class people, investing their stimulus checks, might be able to steal a little something back from Wall Street — with the help of an app cynically named Robinhood. 

Yes, the ruling class is pissed that normal people are disrupting their casino. But the market remains their casino. The experience of this kind of “activism” will lead people to draw the wrong conclusions. We’re already seeing calls for more “democratic” and “fair” rules for the stock market, rather than for toppling the stock market itself.

And what happens if small investors are successful? Then some of them might become big investors. So, this kind of activism may create some new capitalists — but it’s no way to beat the capitalist class. In a fight over stocks, the rulers will always have an advantage.

But you’re in luck: Marxism is a 150-year-old science of how to eliminate the bourgeoisie and its exploitation and oppression. If we pool our money, we shouldn’t invest it in stocks; — we should use it to build up organizations that will fight for our interests —, not by trading stocks, but by organizing our strength in terms of material force.

A Problematic Ally

If you’re not convinced, consider one troubling figure who has been cheering on the small investors against the short sellers: pandemic profiteer and Internet troll Elon Musk. He understands the giant casino that passes for a global economy. After all, he has leveraged a small, almost completely unprofitable car company into a personal fortune of $180 billion. Musk is obviously not trying to bring down the system that is rewarding him with such vast wealth, nor does he have some personal vendetta against short sellers. Instead, Musk understands that this is capitalism at work.

Musk might have several hundreds of billions of dollars, but he’s a small part of the global capitalist system. We don’t need to buy him out, or beat his ilk at the stock market game. We can use our strength to take power and expropriate them. A workers’ government can put all those riches at the service of all humanity. Now that’s a project worth “investing” in.