The Most Annoying Legacy of Occupy Wall Street

One of the greatest successes of the “Occupy” movement was its refusal to outline a specific platform and to thereby unite a broad coalition of groups based on a single, shared socioeconomic concern: inequality. I have on numerous occasions expressed my frustration with the divisions engendered by the non-profitization of the progressive movement and the concomitant reformist strategy. People focus on specific issues that they attempt to grapple with via policy changes and other mundane maneuvers. I have maintained, in contrast, that the only way to effect real social change is to create a united front based on a common critique of the global capitalist system. In support of this position, I described the way in which other issues (regarding race, gender, sexuality, etc.) stem from this fundamental social problem.

So, good for “Occupy” for trying to build a movement around basic socioeconomic concerns. My main problem with “Occupy” relates to some of the rhetoric used by the movement (which I already critiqued somewhat in this blog). However, it seems like the most lasting bit of discourse preserved from “Occupy” is the 99%/1% model that they used to characterize socioeconomic relations. At first it just seemed refreshing that anyone could even acknowledge that inequality really exists in the United States. Ultimately, however, the concept has serious weaknesses and the continued use of this terminology is getting a little irritating.

The main flaw of the 99%/1% rhetoric is that it tacitly presumes income distribution to be the most important feature of socioeconomic conditions. From a Marxist perspective, income distribution is a secondary – or even tertiary – concern. Of top significance is the way in which society – including economic activity – is organized. In other words, one must look at the relations of production, not income distribution, if one wishes to get to the root of the problem. All of this amounts to the fact (which I have already noted) that “Occupy” is not a comprehensive, systemic critique of capitalism, but merely a frustration with one of the more troubling manifestations of capitalism. The fact that “Occupy” would eventually have to contend with is that it is not possible to change the income distribution within the confines of capitalism.

This is more than just a theoretical error. It is a strategic blunder. Income distribution is a quantitative and not a qualitative phenomenon. Or, to put it another way, the criticism is based only on the feeling that the current income distribution is too skewed. But then the question becomes: what is an acceptable level of inequality? Where do we draw the line? No one (not even me!) is prepared to argue that income distribution should be completely even, so protesters have put themselves in a position where they are ultimately just haggling over numbers. This awkward position opens them to either the false criticism that they do support complete homogeneity, or the ideological criticism that they are jealous or unappreciative of the contributions of the creative people who rise to the top. The concept of “fairness” is nebulous and no one is going to agree about it what it means in practice.

If “Occupy” had initiated a discussion about the way in which capitalism organizes production and other social relations, and how that results in extreme income inequality, among many other things, it is true that they may have been just as easily dismissed by those people who are too devoted to neoliberal ideology to seriously think about any of their own assumptions. Yet, at least they would be opening to discussion certain considerations that have always remained outside of public discourse – and maybe, by bringing those arguments to light, many people who do not have such blind loyalty to neoliberal ideology may start to question the whole thing: the system and its ideological justification. That would be the start of a real conversation.

Retirement Heist

I wrote in my last post that the pension system has provided more security for employees than 401(k) and stock option plans. I argued that the transformation of the retirement industry (from the former to the latter) represents a shifting burden off of employer's shoulders and onto employees'.

Yet, pension plans are not entirely "safe" either. Journalist Rachel Heist has recently written a book, Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American Workers, in which she describes how employers have discovered ways to pilfer money that has contractually been set aside for employees' retirement.

I guess, no matter what actual "system" is in place, employers will always find a way to redistribute wealth in their own favor.

A Critique of Trickle-Down Economics

Recent use of the term "class warfare" reminds me that I still have some posts to write about language (in which, incidentally, I will be able to explain more fully the name of my blog). For now, I will once again set language aside and focus on one particular argument being made by those who decry "class warfare."

The essence of their argument is that taxes should not be raised on wealthier people because it will reduce their incentive to keep doing the things that made them wealthy in the first place - the very things that create jobs and grow the economy, thus raising the standard of living for everyone. Hence, the wealth of the country's richest citizens must be protected for the sake of the economy as a whole.

The first point (taxes reduce incentives) is more obviously ridiculous. It mirrors the argument that intellectual property rights are necessary to cultivate creativity, which I have already refuted. But beyond this, just think about what this claim is actually saying: in effect, that people would willingly choose to have less money (post-tax) so that they don't have to pay more in taxes. (Think, just as an example to illustrate a general principle: if somone could make $100,000 and pay $10,000 in taxes or $100,000,000 and pay $250,000 in taxes, who would really choose to have $90,000 rather than $750,000??) If someone really desires a lot of money, the likelihood that they will be deterred by tedious calculations concerning the increase in profit in comparison to additional required effort is fairly slim. Furthermore, there actually is not a proportional correlation between rate of profit and time/energy expended, so one cannot assume that "efforts" are any real consideration in this trade-off. It would really just be a matter of someone settling for less money overall so that they could pay less in taxes, and that is just silly, if the whole problem with taxes in the first place is that it diminishes one's income.

What about part 2 of the argument, then? Does capitalists' ability to accumulate large profits create jobs and grow the economy? The answer is "yes" according to neoliberal ideology. It is "no" according to empirical evidence and structural analysis. First, one must consider what "job creation" and a strong economy means, from a structural standpoint.

I have already commented on the role of fluctuating employment rates in a capitalist system. The important points are that 1) there is an optimal unemployment rate (and it is not zero!) to maximize profitability, and changes in employment are driven primarily by changes in productivity (in large part a matter of how the production process is organized); and 2) the creation or growth of a succesful business does not by any necessity result in more jobs. Business owners and entrepeneurs are not in that sense "job creators."

The strength of an economy is a matter of regional constraints to competition and the global organization of space/division of labor that is required for the capitalist system to function. Thus, while the economy in one area of the world may be strong, higher purchasing power/wages in one locale requires poverty in others. As a capitalist gets wealthier, some other people may become richer as a result, but overall, a lot more people will become impoverished. Everyone is linked within the global system.

Economic expansions (of the system as a whole) occur when, for a variety of reasons, capitalists are able to maintain regional constraints to competition, widen inter-regional inequalities, and keep supply within the bounds of demand. Yes, capitalists will become more prosperous, and, yes, so will some people in some regions of the world (most people will become significantly poorer), but that does not mean there is any causal relationship between capitalists' profits and the perceived "strong economy" in the "lucky" regions. Both are effects of the structural manipulations that allow for economic expansion.

For the past few decades we have been experiencing a global economic contraction. A LARGE one. It is, at its root, a crisis of overproduction. That means, quite simply, that capitalists have invested in the capacity to produce far much more than what there is demand for (or even what demand could be manufactured by the government). Our economic crisis is a crisis of too much stuff! Encouraging enterpernuership and investment will not save the economy. It will make it far, far worse.

At this point there can only be massive structural reorganization. Wealth will have to be redistributed, if only because the current distribution is so skewed as to render it unsustainable. Ironically, it is redistribution of wealth that could actually create the conditions that would allow capitalists to once again construct exploitative relationships from which they could glean massive profits. I hope that doesn't happen.

Forbes Rich List: Wealth Increased By 38%

Forbes released the 2011 Rich List.  "Shockingly" it appears that the world's wealthiest are getting even wealthier.  For example:

• "More than 200 people joined the billionaires list..."
• "The collective wealth of the billionaires on the list also hit a new record of $4.5tn"
• "There are 648 billionaires who increased their wealth in the past year. The fortunes of 160 fell, while 146 stayed even."

How is it possible that the richest people in the world are continuing to get richer in the midst of a global economic recession and a long-term decline in industrial profitability?

Accumulation of wealth is always a redistribution of wealth - skewed in favor of the wealthy.  Thus, as the richest people get richer, everyone else will necessarily become poorer.  The world does not possess unlimited resources and labor power; total value is limited.  The more surplus value that is appropriated by a handful of individuals, the less there is for everyone else in the world.

So, the world's richest increased their wealth by 38% in the face of a global economic recession.  Meanwhile, more than a billion of the world's 6.91 billion population lives on less than $1 a day.

Obama Is A Marxist/Anti-Colonial/Socialist/Racist/Muslim

Although these types of statements have been fairly habitual the past couple of years, a couple of recent ones have prompted me to devote a few posts to debunking these claims.

Now, for the purposes of this blog, I neither support nor oppose Obama (and honestly, that comes pretty close to my personal feelings as well).  I am not writing about this because I am an ardent follower of Obama.  I think it is relevant to my blog because the unspoken premises on which these claims are based form an important part of the ideological fabric which cloaks the forces of domination in this world.

I will start, in this post, with "Obama is a Marxist."

I wish.

Seriously, I wish.

On what grounds is this claim made?
-Actual policies?  Obama has continued, without hesitation, the economic strategies of his predecessors.  If Obama is a Marxist, then so is Ronald Reagan.

-Government take-over of healthcare?  Healthcare is probably the one area where Obama has appeared to do something different.  Appearances can be deceiving.  I will definitely devote a post to healthcare.  But, assuming Obama did make significant changes to the relationship between the state and the healthcare industry, considering that state subsidization and regulation of industry is endemic to capitalism, and considering that Marx envisioned a stateless society, this would still not make Obama a Marxist.

-Stated beliefs?  I never heard one thing come out of Obama's mouth that sounded the slightest bit Marxist.

-What about redistribution of wealth?  Obama may have made statements that directly or indirectly referenced this principle (though the accuracy of these quotes I cannot verify), but it certainly has not been a component of his platform.  Furthermore, redistribution of wealth is NOT A MARXIST PRINCIPLE!  Marxists are not so concerned with distribution of wealth per se as they are relations of production.  On the other hand, under the aegis of capitalism, a significant redistribution of wealth occurs every day - from the poor to the rich.  The excesses of millionaires are financed by the Third World.

-I am afraid of black people, especially when they attain positions of power?  Now we're getting somewhere...

So I say to all of you, as a proud Marxist, Obama is not one of us!!  Please don't call him a Marxist!