Tag Archive: capital flight


Et Tu, Barack?

Awhile ago I posted on Hillary Clinton’s connections to Wal-Mart. The link to that post, and all the articles I mention, will be posted at the end of this discussion.

I concluded with: “Quite frankly, Hillary’s appeals to labor and claims to want to increase the American “middle class” are hollow, empty appeals towards an audience, the American labor force (not to mention Wal-Mart’s notorious international sweatshop labor force, local communities affected by Wal-Mart’s practices, etc), that Hillary seems perpetually intent on betraying. A vote for Hillary is a vote against the poor and the working class.”

At the time, I defended Obama, after Kucinich was systematically and undemocratically prevented by the powers-that-be from getting his message out. But a few things have come out that are changing my mind, and to be intellectually honest, I must post on Obama as well.

Obama, too, seems to have been co-opted by global capitalist class, if he had not been already. He claimed a desire to help the U.S. working class, and opposition to NAFTA. Let’s examine some important moves he’s made since becoming the nominee.

About his earlier aim to ‘renegotiate NAFTA’ . . .

Joe Nichols of “The Nation” reports the following:

“In her interview with the candidate, Fortune‘s Nina Easton reminded Obama that earlier this year he had called NAFTA “devastating” and “a big mistake” and suggested that he would use an opt-out clause in the trade agreement between the United States, Canada and Mexico to demand changes that would be more favorable to workers and farmers in all three countries.”

Obama’s taking a stand for the working class in Canada, Mexico, and the United States . . . committed to saving American jobs, ending foreign exploitation, gaining some democratic ground over the hegemonic dominance of international capital . . . oh, wait. Never mind. That would be the result if he had taken a stand. He actually said:

“Sometimes during campaigns the rhetoric gets overheated and amplified . . . politicians are always guilty of that, and I don’t exempt myself.” In short, he doesn’t mean it, New World Order. So rest peacefully.

In his Fortune Interview, he says:

“”There’s a reason why the business community in Chicago as a whole has been very supportive of me . . . they know I am a pro-growth guy, and I’m a pro-market guy. And I always have been. What I do get frustrated with is an economy that is out of balance, that rewards a very few – with rewards that are all out of proportion to their actual success – while ordinary, hardworking Americans continue to get squeezed. Over the last decade or so, this economy grew substantially, and more than half of the total growth was captured by the top 1%.”

Is the economy out of balance? Do the top 1% capture most of the results of growth? Absolutely; Obama is correct. Had Obama been sincere, he would realize that this is an inherent consequence of ‘free markets’ and the laws of the capitalist system itself, yet he remains a ‘pro-market guy’. I think that Obama is trying to appease business while simulaneously looking objective. For example:

He simultaneously says that part of the economic causes of this are that “with globalization and with global capital being able to move everywhere it wants . . . it has meant a winner-take-all environment.” This is true. Capital flight gives international capital a huge bargaining tool over governments unwilling to impose sanctions or invest in capital itself. But yet, he says: ”

“I still believe that the business of America is business . . . but what I also think is that with all that power and talent, and all those resources at their disposal, comes some responsibilities – to not game the system, to not oppose increased transparency in the marketplace, to not oppose fiscally prudent measures to balance our budget.”

How does Obama plan on imposing responsibility with so much of the game rigged as a consequence of Market operations alone? Exactly. Obama has turned face, given in. Strike one.

Perhaps he can be redeemed. Who are his economic advisors? They will both reflect his ideology, his aims, and color the options he sees for the future.

David Sirota of the Creators’ Syndicate reports:

“For every loud speech Obama has given about making sure trade pacts “are good not just for Wall Street, but also for Main Street,” he has made a quiet move reassuring Wall Street that Main Street will be ignored. Last week, for example, he named Jason Furman as his top economic adviser. Furman has spent the last few years defending Wal-Mart and working closely with Bob Rubin, the Citigroup chairman who championed NAFTA as Bill Clinton’s Treasury secretary.”

Furman, Wal-Mart defender and associate of a NAFTA champion?  Hmm . . .

Naomi Klein of “The Nation” further reports:

“Furman is one of Wal-Mart’s most prominent defenders, anointing the company a “progressive success story.” On the campaign trail, Obama blasted Clinton for sitting on the Wal-Mart board and pledged, “I won’t shop there.” For Furman, however, it’s Wal-Mart’s critics who are the real threat: the “efforts to get Wal-Mart to raise its wages and benefits” are creating “collateral damage” that is “way too enormous and damaging to working people and the economy more broadly for me to sit by idly and sing ‘Kum-Ba-Ya’ in the interests of progressive harmony.””  I won’t analyze that argument . . . it’s incoherent.  But besides Furman’s ridiculous, lie-filled, and callous attempt at defending Wal-Mart, it appears that Obama will, in fact, shop at Wal-Mart . . . but not for cheap-foreign-sweatshop-made goods, but for economic advisors.

In addition to Furman, “He chose as his chief economic adviser Austan Goolsbee, a University of Chicago economist on the left side of a spectrum that stops at the center-right. Goolsbee, unlike his more Friedmanite colleagues, sees inequality as a problem. His primary solution, however, is more education — a line you can also get from Alan Greenspan. In their hometown, Goolsbee has been eager to link Obama to the Chicago School. “If you look at his platform, at his advisers, at his temperament, the guy’s got a healthy respect for markets,” he told Chicago magazine. “It’s in the ethos of the [University of Chicago], which is something different from saying he is laissez-faire.””

Perhaps I should go into why no one supportive of the Chicago School of Economics should ever touch anything that affects human beings due to their irrationality, poor economics, and more importantly, complete and utter heartlessness and shameless classism . . . but I won’t for now.  What is more important is that Obama seems to be in bed with these people.

It appears that, until he shows otherwise, Obama seems committed to handing American domestic policy to the forces that oppress people in this country and abroad, betraying the working class and the suffering.  I suppose that his message of ‘change’ still can hold, perhaps: he simply doesn’t seem to want the changes that would actually help America, or its poor and suffering.

In the paraphrased words of Julius Caesar: Et tu Barack?

Hillary Clinton and Wal-Mart: https://practicalutopian.wordpress.com/2008/05/07/wal-mart-hilary-clinton-and-unions/

Sirota’s Article: “Obama’s Clearest Path to the Presidency: Talk About Wages” : http://www.alternet.org/story/88791/

Nichols’ Article: “Obama Goes Soft on Free Trade”: http://www.alternet.org/election08/88754/

The Fortune Interview: http://money.cnn.com/2008/06/20/magazines/fortune/easton_obama.fortune/?postversion=2008062308

Naomi Klein’s article: “What Does Obama’s ‘Love of Markets’ Mean for Our Economic Future?”:

http://www.alternet.org/election08/88093/

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Imagine a world where the means of production are owned by society. Profits are collected and go towards Public benefit, and decisions are made by those who will be affected. Would that world not be superior than our own? The system of private ownership allows individuals to profit off the labor of others, externalize social costs, and manipulate and erode popular control over the political, social, and economic spheres. What does the current system do that it has advocates?

The primary law of the system is profit. Jerry Mander examines 11 laws of corporate behavior, generalizable to individuals in the capitalist system by way of inference, and to the system as a whole by necessity (“The Rules of Corporate Behavior”, The Case Against the Global Economy (1996), edited by Jerry Mander and Edward Goldsmith, pp. 309-22). They are:

(1) “the profit imperative” (315), where individuals and corporations, by the laws of the capitalist system,
must take in more income than they expend. Mander says “the profit imperative and te hgrowth imperative are the most fundamental corporate drives; together they represent the corporation’s instinct to live” (315).

(2) “the growth imperative” (316), where growth of the company, and its profits (and its corollaries among individuals and political bodies) it transformed into an imperative. If profits are a necessary requirement for maintaining class status generally, and profits are consequently valued, then of course the push for ever greater profits increases in importance, at the expense of one’s competitors, competition in the market, and society at large.

(3)”competition and aggression,” where the individual and corporate pushes towards profits and growth lead to a dog-eat-dog, zero sum game. You must secure your position, for no one is looking out for you . . . you are consequently expected to cooperate and seek the benefit of the Team, but are constantly looking for an aggressive edge over your competition in the job market–above other corporations, capitalists, employees, etc.

(4) “amorality,” where “corporations do not have morals or altruistic goals . . . so decisions that may be antithetical to community goals or environmental health are made without misgivings” (317).

(5) “hierarchy,” where “corporate law requires that corporations be structured into classes of superiors and subordinates within a centralized pyramidical structure” (317).

(6) “quantification, linearity, and segmentation,” where “corporations require that subjective information be translated into objective form, that is, into numbers . . .[which] excludes from the decision-making process all values that cannot be quantified in such a way” (318).

(7) “dehumanization,” where “corporations make a conscious effort to depersonalize” (318), creating elaborate structures of rules for behavior on the job, and managerial discipline.

(8) “exploitation,” where “profit equals the difference between th amount paid to an employee and the economic value of the employee’s output . . . [and thus] is based on paying less than actual value for workers and resources” (319).

(9) “ephemerality [the quality of being transitory] and mobility,” where “corporations . . . have no commitment to locality, employees, or neighbors . . . [and so in] having no morality, no commitment to place, and no physical nature . . . a corporation ca nrelocate all of its operations to another place at the first sign of inconvenience” (319).

(10) “opposition to nature” where “corporations themselves and corporate societies are intrinsically committed to intervening in, altering, and transforming the natural world . . . [where] all manufacturing activity depends upon intervention in and reorganization of nature” (320).  This fact, combined with the imperative to grow, results in an ever-increasing consumption of natural resources, many of which either reproduce less quickly than they are extracted, or do not reproduce.  In other words, “the net effect is the corporate ravaging of nature” (320).  This results in a variety of phenomenon, from pollution to corporate contributions to global warming.

Finally, (11) “homogenization,” where “all corporations share an identical economic, cultural, and social vision and seek to acceperate the social and individual acceptance of that vision . . . [and so] life-styles and economic systems that emphasize sharing commodities and labor, that do not encourage commodity accumulation, or that celebrate nonmaterial values, are not good for business” (320-21).

Why is this relevant?  Corporations and corporate interests are the driving forced behind the global economic and political structures today.  They are the distributors of wages and goods, they control the media and the government, and they operate by these laws.  In this first examination of the laws of the corporation, we can already ask–do we want anything that operates by these laws determining the future of our world?

Capitalism tends to go through crises in general–its laws of distribution result in some sort of overconcentration in investment (the organic composition of capital is the technical term), or production beyond consumption, or a lack of investment and the like. Regardless of the specific cause of the business cycle, the effects are similar; capitalists make some mistake in investment by investing in what they can’t sell, or they sit on their own capital instead of circulating it. The problem is that in a capitalist economy whose primary laws are “Profit!” and “Grow!,” staying stationary will simply cause the system to surpass you and push you out of the economy. Grow or die. Consequently, an inability to invest or grow such as in business crises will result in capitalists pushing on labor to increase profitability–firing, working longer, harder, etc. In every case where there is a systematic crash, labor suffers first even when it is capital’s fault.

Lets get to my point. In a systematic transition from capitalism to socialism, capitalist profitability will decrease or get squeezed out–consumerism will stop fueling them, the state will push industry to sell, or the like. But since it is the transition to socialism, it is still under capitalist laws, and capitalists will try to consolidate power however they can. If a particular nation tries to socialize, capital flight will likely occur, or an increase in corporations trying to bolster political influence while increasing profitability (because, as always, the will be the last to take a hit economically), or appealing to the WTO which will undoubtably attempt trade sanctions. All these actions will significantly hurt the population of a nation (or the international community–but it’s hard to see how it would get worse in places like India, say, or sub-Saharan Africa), and it would be left to charities or the government(s) to compensate, but dependence on charities are iffy at best, and governments would have to develop the infrastructure (remember: this is the transition to socialism, it has not yet occured, but is in process). Consequently, in the birth pangs of socialism, labor and the needy would be sacrificed unless there are places set up outside the capitalist system to house, feed, educate, and take care of them. Socialists need to concentrate on building places that are safe havens from capitalism–think Noah’s Ark on land. This is completely necessary–because before the international community attains socialism, corporations and capitalists will squeeze every last bit of profitability out of workers, and funnel it into every political means before they have no choice, and consequently within the current system the lower classes will be the first to suffer, and suffer much without a safe haven.