Category Archives: capitalism

The Debt Vultures

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From three corners of the debt square–education, housing and health–come stories to answer two repeated questions about Strike Debt: is this the right theme for OWS? And is this in any way different to standard issue capitalism? In short, yes and yes. And I think they might serve as an answer as to what to call predatory debt: I’m going for vulture debt. Because a group of vultures is known as a committee (true).

First, education. Student debt has been questioned by some as an elitist preoccupation or as too easily eliding with right-wing attacks on higher education. Today, a US Senate report of all things exposes for-profit higher education institutions, so beloved by the right-wing, as predatory loan garnishing machines. They exist solely to generate money with instruction as an afterthought:

Among the 30 companies, an average of 22.4 percent of revenue went to marketing and recruiting, 19.4 percent to profits and 17.7 percent to instruction. Their chief executive officers were paid an average of $7.3 million

80% of their revenues come from Federal grants on average. Here’s one specific example of why this is vulture debt:

The Apollo Group, which operates the University of Phoenix, the largest for-profit college, got $1.2 billion in Pell grants in 2010-11, up from $24 million a decade earlier. Apollo got $210 million more in benefits under the Post-9/11 G.I. Bill. And yet two-thirds of Apollo’s associate-degree students leave before earning their degree.

The more you read, the worse it gets. These “colleges” are more expensive than not-for-profit institutions, yet graduate far fewer of their students. In terms of debt:

Students at for-profit colleges make up 13 percent of the nation’s college enrollment, but account for about 47 percent of the defaults on loans. About 96 percent of students at for-profit schools take out loans, compared with about 13 percent at community colleges and 48 percent at four-year public universities.

These institutions are the right-wing solution to higher education: supposedly vocationally-oriented market-driven education, rather than the supposedly wasteful liberal arts schools. They are nothing but debt vultures.

Housing. I noted recently that student debt is getting noticeably worse for older people. Now it seems that foreclosures are biting the over-50s hard:

one and a half million Americans over the age of 50… lost their houses to foreclosure between 2007 and 2011. Of those, the highest foreclosure rate was for homeowners over 75.

In this report from the AARP it emerges that these are prime loans, not the marginal sub-primes so often discussed. Seniors are being affected by declining pensions, collapsed property values, rising medical costs, shrinking investment values and (although not mentioned in the report) the need to support children and grand-children. People who have been making payments since the 1960s are now being evicted. Whose interest does this really serve? How much is enough? For a vulture, that question makes no sense.

Finally, and most repellent, medical debt. Please don’t be eating while you read this. The major medical debt collector Accretive has been banned from Minnesota and fined $2.5 million. Why? Well, it did things like this:

Carol Wall, a 53-year-old Minnesota resident, said “a woman with a computer cart” told her she owed $300 as she was “vaginally hemorrhaging large amounts of blood” at an Accretive-affiliated emergency room.

The repellent company has issued the usual generic statement claiming such cases were  exceptions, and so on, and so on. Even the New York Times didn’t buy that:

Accretive Health contracts with some of the largest hospital systems in the country to help them recoup money on unpaid bills that have piled up during the financial crisis and the economic downturn.

In other words, this is how medical debt works: the system knows people can’t pay and has a mechanism to deal with it. Here the debt vultures are literally preying on the weak, requiring patients to pay before they can even see doctors, against all rules and regulations.

So: is debt a proper subject for OWS? I’d say that predatory, criminal enterprises that place profit before people and are fundamentally incapable of saying “enough is enough” are the prime target of Occupy. Further, the unique quality of the movement is to bring together issues that are deliberately kept apart so that we can see how things really are. The minor “fixes” that pass for policy from the political parties are helping almost nobody–this is statistically as well as morally true. From student debt to housing and medical debt, the debt vultures have shown that this is a fight to the death. Only social movements like Occupy can help.

Is this a different form of capitalism? Technically, the switch to debt as the dominant aspect of the money form is different. Certainly, rapacious capitalism is far from new, as a quick glance at Engels’s 1845 classic The Condition of the Working Class in England will show. However, the present delusions about the virtues of the rich have become so attenuated that it is considered daring  to suggest that government or society have any role in wealth creation whatsoever. The idea that government should mitigate the impoverishing effects of capitalism for any except the capitalists themselves is now “socialism.” When neo-liberalism emerged, Stuart Hall and others called it “Thatcherism” and were widely castigated for saying that capitalism had changed. But it had. And it continues to do so.

Debt servitude is predatory and relentless. It has shifted the target of neo-liberal expropriation from Heavily Indebted Poor Countries to Heavily Indebted Poor People. Fanon suggested that fascism was the application of colonial techniques to colonizing nations. We can say today that neo-liberalism is the application of neo-colonial techniques to all populations. No longer is there a “wages of colonization” (to adapt Du Bois’s concept of the “wages of whiteness”) in which being a citizen of the neo-colonial powers protects you. We are all targets now.

Certain scavenger species can eat themselves to death, unable to stop. The debt vultures are one such species. We have to stop them before it’s too late.

 

Capital and the Drought

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From the Guardian

There is devastating drought across about half of the US, caused by fossil fuel capitalism. The drought and resulting food shortages, price rises in basic foodstuffs and resulting inflation is likely to intensify the crisis of capitalism. There will be food riots in places where incomes are low and mostly spent on food. That may include parts of the fossil fuel intensive world, as well as the domain of the wretched of the earth. All the anxiety about the technicalities from CDOs to LIBOR may pale beside the fundamental crisis in producing food for humans and animals, should the drought continue.

The photograph above makes it clear that this set of circumstances is the product of a certain form of financial capital. The ostensible subject of the picture is the wizened corn, so dry that farmers would be delighted to salvage a third of the crop. Any neutral person is also going to want to know about that sign.

It indicates that the corn being grown is not “natural” but a proprietary product of Croplan by Winfield, number 6125VT3. This varietal is intended especially for use in the West. One of its alleged benefits is being drought-resistant:

Hybrids are selected for strong drought tolerance, even when planted at a high plant population. This is important in the western Corn Belt where low plant population is used as a hedge against drought.

Oops. Now you might think that this would lead to farmers not using these crops next year. But it’s not that simple. The seed always belongs to the supplier and contracts lock you in. The particular varietal shown drooping above is a test variant being tried out in various locations. According to a farmers’ chat site, Croplan

source their germ plasm from Monsanto, Syngenta, Pioneer, Mycogen

meaning the major GMO food monopolists. Croplan is part of WinField Solutions, the third largest seed company and number 1 pesticide outlet in the country. Both are owned by Land O’ Lakes, the dairy conglomerate, itself part of Dean Foods. As a result of these interfaces, Croplan is very keen on corn that is pesticide tolerant.

Again, the supposed benefit to the farmer is plants absorbing more moisture and nutrient.

So farmers have paid for expensive drought-resistant seed that didn’t deliver when really tested. The ramifications of this failure go in many directions. There are vast numbers of genetically modified varietals interacting with the existing seed population to unknown effect. It’s an article of faith among dog owners that GMO corn makes dogs allergic. What does it do to us? Food is becoming more expensive with food prices officially rising 4.8% in 2011 and likely to be much higher again in 2012. An economist with the Federal Reserve Bank in Kansas explains:

The impact of higher food prices is felt disproportionately by poorer Americans, Mr. Henderson said. For Americans in the bottom 20% of income, food typically takes up more than a quarter of household income, compared with about 10% for wealthier Americans.

So if food rises 10% in price over two years, you can be sure that the wages and salaries in the lower half of the economy have not risen to match. While the poorer will do worse, the corporate fear is that food will ignite inflation and reduce profits. Dean Foods, owner of the whole chain of corn and milk we’ve been discussing is down 22% in the stock market. I wonder if capital can survive another shock of this size, despite what Naomi Klein has called the “shock doctrine.” If the largest monopolies are struggling, who can take them over?

La Via Campesina in action

So climate change is not “just” a disaster caused by capitalism, which it is; but it’s also a disaster for capitalism. Last week, Via Campesina, the international land-use and peasants’ movement, concluded a successful conference in Indonesia. The Governor of West Sumatra returned expired land use contracts from corporations to ulayat (indigenous peoples/community rights). The final declaration called for the movement:

to incorporate other peoples who are threatened by the same current phenomena, including urban dwellers threatened with impoverishment and with eviction to make way for real estate speculation; peoples who live under military occupation; consumers who face ever higher prices for food of ever worsening quality; communities facing eviction by extractive industries; and rural and urban workers.

I would say that sounds like an agenda I can agree with, wouldn’t you? More than that, it sounds like the agenda we need.

 

Bring Back The Just Price!

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One of the first consolidated revolutionary gains was the idea of a just price for food. Direct action in the French Revolution (1789-99) enforced a consensed “maximum” for staple foods and punished speculators in foodstuffs. For nearly two centuries the French state set prices for bread, coffee and sugar. Now we treat the market as a force of nature, immune to all sense of fairness. Wholesale commodity food prices are rising rapidly, exacerbated by the climate-change generated drought across the U. S. Why should the very people that refused to mitigate the warming effects of climate change be able to profit from its effects? Time to remember the maximum. 

There’s plenty of nervous discussion in the media about food prices. Somehow they seem unaware that the prices those of us who actually shop for food are asked to pay have been rising for some time. There are concerns that cereal price rises similar to those that fuelled the Arab Spring might revive dissent. Today, soy prices hit an all-time high, while corn was 1% off a record. All of this is unfortunately great news for people who trade in commodity futures, like our old friends at Goldman Sachs.

Withered corn in the Midwest

So far 2012 has been the warmest six months on record and crops are withering. There’s a certain irony here. Fertilizer plus GMO Round Up resistant corn adds up to an almost automatic corn crop. Once planted corn requires only forty days of attention before harvest, allowing farm labor to have decreased to only 2% of the total. The one thing you need is rain. But all that fossil-fuel generated fertilizer has been one component in creating the climate change temperature rise that has been accurately predicted.

Seventy percent of the Midwest “corn belt” is in an official drought, the worse conditions for half a century. Result:

Grain prices pushed to record highs on Thursday as scattered rains in Midwest did little to douse fears that the worst drought in half a century will end soon

While you may never eat corn, it’s in just about everything, as Michael Pollan has shown. In order to appease voters in the wretched Iowa caucuses, ethanol is in almost all gasoline now, although there is no net carbon emission benefit. Corn is fed to cattle in feed-lots, although they are not evolved to digest it properly. On average there are ten pounds of grain used for every pound of beef, while ten calories of fossil fuel are used to make one calorie of meat.

The price rises that are now being passed on to us were, then, in the broad sense entirely foreseeable and foreseen. It was the corporate-funded climate “skeptics” that insisted this would never happen. So why should we and, more particularly, the global subalterns who are most vulnerable to food price rises have to subsidize their political action?

When sugar and coffee prices rose in Paris following the revolution in Saint-Domingue (Haiti), even government officials found it “sophism” that “the consumer’s fancy” should determine prices. So the supposed “law” of supply and demand is nothing more than a means of policing dissent. In 1793, the French popular forces were having none of it, and set their own prices. A police report of the time described what happened:

There was a woman of fairly good appearance, about five feet, one inch tall, thirty years old, with blonde hair, white skin and slightly red eyes.  . . . This woman did everything in her power to add to the sedition. She had gone on the inspection [of the warehouse]. And once they returned, it was she who set the price for soap at twelve sous per pound and for sugar at eighteen.

What this woman had done was cut the price of sugar from 60 sous (one-twentieth of a pound) to 18, lower than the pre-speculation price of 25. I’ve written here on a number of occasions about land-sharing among the freed (formerly enslaved). Egalitarian price control was the metropolitan equivalent. It was revolutionary direct action to make the food market benefit the people rather than speculators.

Following such direct actions, the Convention (as the French National Assembly was then known) legislated maximum prices on the following essentials:

fresh meat, salt meat and bacon, butter, sweet oil, cattle, salt fish, wine, brandy, vinegar, cider, beer, firewood, charcoal, coal, candles, lamp oil, salt, soda, sugar, honey, white paper, hides, iron, cast iron, lead, steel, copper, hemp, linens, woolens, stuffs, canvases, the raw materials which are used for fabrics, wooden shoes, shoes, turnips and rape, soap, potash, and tobacco.

That list gives you a sense of the life-world of an eighteenth-century French sans-culotte, the street radicals who had created the maximums. Soon afterwards, they abolished slavery. It was Carlyle’s “hero” Napoleon who re-introduced it.

Now that we have seen that the so-called free market has been comprehensively fixed with regard to interest rates and other supposedly naturally occurring phenomena, there should be renewed calls for price maximums, and an end to speculation in food prices. It’s happened before in the U. S. Voltairine de Cleyre described how in 1912

many persons will recall the action of the housewives of New York who boycotted the butchers, and lowered the price of meat; at the present moment a butter boycott seems looming up, as a direct reply to the price-makers for butter.

In the struggle to recognize the United Farm Workers:

According to polls, about 12 percent of US adults avoided table grapes in the late 1960s, and grower prices for table grapes fell.

Anti-apartheid boycotts were also a part of the successful long-term strategy against the racist regime. There’s history here.

 

 

Against Heroes and Hero-Worship

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From cinema to university sport, not to mention the bankster disasters, it is time once again to be against heroes, whether they have the most wins in college football history, a fancy O logo, or strut around pretending to be Gordon Gekko.

In 1840, the arch-conservative historian Thomas Carlyle gave an incredibly influential set of lectures called On Heroes and Hero Worship. You’ve probably never read them but you know his tag line: “Great men make history.” This phallocracy is alive and well, from the 600 page biography that no-one reads but get published anyway, to Aaron Sorkin’s fantasies of liberal heroes, the cult of sport and the worship of the Big Men of Finance.

Thomas Carlyle

Carlyle exalted the capacity of the Hero to “visualize” history, something ordinary people were utterly incapable of doing. It was the hero or anarchy. Interesting choice, you might say. Carlyle was disgusted by the French Revolution, appalled by the ending of slavery in Haiti’s revolution and afraid it would spread. His work was read by Hitler and used to justify Mussolini.

As a result no one quotes him any more, but the desire for Big Men, for heroes, who have what it takes is still everywhere. It is literally the patriarchy. And it’s just as much evident in the call for OWS to have leadership and hierarchy as it is in less savory locales, so let’s not assume that somehow we are past all this.

It took the FBI to finally prise Penn State’s fingers off their football heroes. A “sport” that should be banned for all the brain damage it causes to its players has now been thoroughly discredited–or at least it should be. As is the modern university system that lavishes money and facilities on sport, while classrooms are shabby and fees high. Penn State has one of the highest tuition rates of any state university at $15,500 for in-state students and an eye-popping $27,000 for out-of-state. So for all the alumni money that football supposedly generates, students are not seeing much benefit. Except that their Paterno Library is now revealed to be named after a child abuse enabler.

Banker worship was and is rampant in the Anglophone world. In Congress, senators and representatives fawn over Jamie Dimon, head of JP Morgan Chase, who revealed that their credit default swap losses in London were now $5.8 billion and, by his own estimate, criminal. The trader who dug this hole was known as The Whale or Voldemort, a hero to his fellow type-A macho men.

They believe they are unique human beings, capable of alchemy, as one banker characterizes his job:

an investment banker resembles a magician – his greatest trick is the disappearance and reappearance of money, an illusion he aptly executes with nicely designed and immaculate literature and an arsenal of free-flowing industry jargon intelligible mainly to his own circle

How thrilling it apparently is, all the champagne and bonuses awarded to those considered to be “Big Swinging Dicks” (to quote Michael Lewis’s characterization of Goldman Sachs).

How are the mighty falling. After all that “Dude, I’m opening the Bollinger“–the most expensive sort of Champagne–the LIBOR investigation is bringing things down to earth. Here’s a quick calculation by Sandy Chen reported in the Financial Times of the kind of damages a 5 basis points manipulation of LIBOR might entail over four years for one bank:

5bp x £1 trillion of notional contracts x 4 years = £2bn in potential damages. If these were covered by the US Sherman or RICO Acts, the damages/relief could be trebled.

Sherman and RICO are the statutes under which you prosecute organized crime, so the “mafia capitalism” meme has spread to the business papers! Total LIBOR related fines and costs are guess-timated at $22 billion without calculating for multiples under the organized crime legislation. Of course, there’s no calculation yet for what credit card holders, student loan or mortgage borrowers might expect back–but here’s my estimate: $0.00.

This all reinforces how important the anti-patriarchy aspects of Occupy’s strategy are and were to the movement. Whether it makes certain people impatient or not, such measures as circles, progressive stack and mutual respect are a pre-condition to creating an alternative to the phallocracy whose crimes and misdemeanors are becoming more evident on a daily basis.

 

Red-Line the Banks

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Perhaps calling what the banks have been up to in the past decade “mafia capitalism” is starting to become a slur on organized crime. Today we learned that major banks served as money laundering operations, openly discriminated against people of color, and that JP Morgan lost far more gambling than they had admitted. To try and cover this up, the NYPD launched a sad smear campaign against OWS that totally backfired.

In London, where regulations are so laughably weak that banks can do just what they want, HSBC was busted as a money-laundering front. Within the bank, this has been known for a long time and people in compliance who wanted to do something about it have been assaulted. Speculation is rampant that fines here may reach $1 billion for

the money laundering and terrorist finance vulnerabilities created when a global bank uses its US affiliate to provide US dollars, US dollar services and access to the US financing system to high-risk affiliates, high-risk correspondent banks and high-risk clients.

This is policy-speak from Congress about Iran. It shows that when the government actually cares about the outcome of an investigation, it is willing to use its powers to the full. By inference, then, it does not care very much about what happened in loans to its own citizens.

Elsewhere today, banks continued to display contempt for those citizens. Wells Fargo was merely the latest bank to admit that the long-standing practice of “red-lining” continues. That is to say, banks used to openly designate certain areas of cities where minorities lived as “red-lined,” meaning no loans were to be approved.

Here’s the official definition of red-lining:

Red areas represent those neighborhoods in which the things that are now taking place in the Yellow neighborhoods, have already happened. They are characterized by detrimental influences in a pronounced degree, undesirable population or infiltration of it. Low percentage of home ownership, very poor maintenance and often vandalism prevail.

 

This, then, was official policy in the 1920s and 30s. The impressive T-RACES digital project that has mapped these red-lined districts has shown that such neighborhoods continue to be financially disadvantaged and have a higher percentage of minority residents than favored areas for lending today.

Today, the hustle extends to selling more dubious products to people of color. Wells Fargo

steered more than 4,000 minority borrowers into costlier subprime mortgages when white borrowers with similar credit risk profiles had received regular loans.

African Americans paid an extra thousand dollars in fees per hundred thousand borrowed and were 2.9 times more likely to be made to take a sub-prime loan.

Now we’ve crossed $500 million in fines to major banks for racist loans of this kind but the reparations should just be beginning. Remember this clown?

Chicago trader Rick Santelli “spontaneously” rants against mortgage support for certain “people,” who will “drink the loan.” The flimsily-concealed racism has been a subtext to the entire Tea Party movement and the hostility to debt abolition. Now we can see that many of these loans were pushed on people who did not deserve (if anyone does but that’s another question) the high terms of a sub-prime mortgage. And then became targets of white resentment when the set-up-for-failure arrangement failed.

Tomorrow JP Morgan Chase will announce huge losses, somewhere between $2 and 9 billion for the quarter due to their terrible investments. These were pre-leaked today to try and minimize the impact. Do we think that there will be people on CNN and Fox ranting against Jamie Dimon? Of course not.

Instead yesterday the NYPD launched a bizarre allegation that someone in OWS must have been involved in a high-profile murder case because DNA found at a scene where some presumed OWS people had opened a subway gate matched that found at the murder. Except, oops, it turned out to be that of the Chief Medical Examiner. Somehow this cock-up found its way into all the newspapers. Retraction on p. 100 in the 4 point font. And last night irritated cops launched a totally unprovoked attack on people in Liberty Plaza, whose main offense appears to be “refusal to go away.”

No wonder the Democratic party wants the movement to concentrate on the generic “money out of politics” meme. Now the reality of what the finance capitalists actually did in this administration as well as the last is starting to emerge. Maybe we’re ready for a discussion on how to replace this morally and financially bankrupt system? Maybe it’s time to red-line the banks.

Capitalism: “the horror, the horror”

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It is said that Eisenstein hoped to make a movie out of Marx’s Capital. If anyone wanted to make a movie out of today’s capitalism, it would be a horror film. Like all horror films, this is a sequel. The convergence of financial crisis, environmental disaster and stalled imperialism that we see today has recurred across the modern period, beginning in the eighteenth century. It’s catchphrase is “the horror, the horror,” first coined by Joseph Conrad in his 1899 novella Heart of Darkness concerning European imperialism, reapplied by Francis Ford Coppola to the Vietnam war. Today, as befits the third in a series, the crisis of capitalism, imperialism and the biosphere is planetary.

As the astonishing scandals unfolding at Barclay’s Bank indicate once more, if capital is the monster in this film, it is one that is now out of control. The particular issue concerns the fixing of interest rates by the bank to its own ends. Imagine that one month you want to pay credit card debt so you want interest rates low to keep the payment down. The next month you have some savings, so you want rates high so you can make a profit.  Of course, we have no choice. For banks, it’s different, as Reuters report:

Some 257 requests were made to rate submitters from at least 14 Barclays derivatives traders over four years. Traders at other banks also tried to influence Barclays’ rate, while Barclays’ traders put pressure on the rates offered by others. Most of the world’s biggest banks are under investigation…Barclays is the first to settle.

This is at one level another Bankster scandal, in which there’s one rule for them and another for us.

The traders making these fixes were nonetheless relatively low-level operatives. We tend to assume that behind them is some Dr. Evil figure manipulating the whole scheme, in the manner of Gordon Gekko. An oral history project on the financial crisis shows rather than no-one understood what was going on. The credit derivatives people relied on their computers to calculate what their trades had actually done. In 2008, they started to discover that they were losing more money than they could imagine every time they hit F9 to make the calculation. And these were the best informed people. One trader explained:

most in the bank didn’t understand our products. Even the risk and compliance people who were supposed to be our internal checks and balances …  I learned that the people high up know just enough for the role they’re in…

all major banks and corporations are doing this.

This is the horror–the machine you have created is out of control and you don’t know how to stop it. The trader developed night sweats, skin disease and has been diagnosed with PTSD. The interest rate fixes were sticking plaster over gaping wounds.

This does not get fixed by setting a new way to calculate LIBOR. As Christian Marazzi has put it, in his analysis of post-Fordist capitalism:

What is at stake is not only the understanding of our world, but our very being in this world.

Like Mr. Kurtz, we find ourselves in an existential crisis, in which the current ways of doing things are a horror, but so is the alternative: “the horror, the horror.” It is the apparent anonymity of the crisis that creates the horror–the very fact that the algorithms have done it. As Emmanuel Levinas put it in a different context:

In the night, when we are riven to it, we are not dealing with anything. But this nothing is not that of pure nothingness. There is no longer this or that; there is not “something.” But this universal absence is in its turn a presence, an absolutely unavoidable presence…The rustling of the there is…is horror.

As this suggests, for existentialism, the horror is in part the absence of God, or of rational purpose. Capitalism has claimed a spiritual dimension since Adam Smith’s fantasy of the “invisible Hand” and in modern America, capitalism is directly bonded with fundamentalism Christianity. So there is a reason that anti-capitalism is also anti-monotheism.

Imperialism sees itself as erasing nothingness, whether the terra nullius of supposedly empty space or the tabula rasa (clean slate) of the “heathen” mind, requiring conversion, the very “colonization of consciousness” (Jean and John Comaroff). When it looks at land it sees nothing but “wilderness as never having entered into any economic transaction” (Timothy Morton). What the missionary David Livingstone described as the Three Cs, “Christianity, Commerce and Civilization” were intimately linked. Perhaps there are in fact then three horrors.

Marlon Brando as Kurtz in "Apocalypse Now" (1979)

In Conrad’s roughly contemporary novel, it is only after Kurtz has been retrieved from his inland ivory station that he gets a glimpse of what he has truly done–“the horror, the horror.” The death and destruction wielded by his company in pursuit of accumulation finally becomes apparent to him. The devastation of the rain forest described here is still just a backdrop but this was a period in which carbon emissions escalated dramatically and biosphere extinction moved closer. You can’t simply endorse Conrad because part of his story is about Kurtz “going native” and adopting indigenous religion. Religion is part of the horror, above all colonizing Christianity, the third horror.

In today’s Congo region, millions have died since the Rwanda genocide of 1994 opened an era of wide-scale instability. From time to time, there are newspaper articles and the liberals shake their heads but, as Zizek has consistently pointed out, paying attention to the horror of the Congo then and now means not reforming the system but abolishing it.

So how does this movie end? There are those market apologists who suggest that the 1890s financial panic turned out great with a decade of prosperity following it. Most with a degree of perspective see it as the precursor to World War 1. I’m not sure that capitalism can revive itself without a dose of war profits, but present-day counterinsurgency warfare has proved spectacularly unprofitable for the population at large.

I do think we should refuse existentialist despair. The solution to the Congo question of the 1890s was in the end fairly simple: stop colonizing it. But once the new automobiles wanted rubber tires that was not going to happen. It’s fascinating how clearly the fossil-fuel economy that was modern capitalism’s first intensifier is still its last support now that the machine has gone crazy.

Against craziness and religion, we can offer rational solutions: Stop burning fossil fuels. End derivative markets. End imperialism, and use the massively reduced military budget to fund education, health care and a living wage. Here’s the thing. In the first reel of the movie, it almost seems possible that the monster will win but in the end it never does.

 

 

 

 

 

 

Anti-Capitalism and the Great Extinction

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How should we think of the past year? One way is to realize that in that time, any possibility of making serious changes to the global deterioration of the biosphere has dramatically receded. Whether you’re an environmental activist, a “that’s so terrible” headshaker, or an “it’s all about capitalism” person has become irrelevant. Short of major collapse, disaster or unforeseen events, we’re past the point of being able to do anything about this. What might get your attention is that the signs are that what worked for the climate issue is now being applied to capitalism–denial, displacement and legal enforcement.

The last surviving Pinta tortoise, Lonesome George, died in the Galapagos on Sunday. The species is now extinct.

If you have not been paying much attention, you may even not be aware that the UN Rio+20 environmental summit came and went last week. Rio was supposed to make good the promises of the earlier Earth summit and lead towards more sustainable development. The inevitable communiqué was dismissed as “283 paragraphs of fluff” by Greenpeace. Occupy activists did interrupt the closing ceremony to make a statement but were soon silenced. There was minimal media coverage and relatively little awareness in Occupy. When the COP17 Climate Change conference in South Africa collapsed in similar fashion early last December, there was a day of action at Zuccotti Park. Last week, as wildfires devastated Colorado, Arctic ice levels fell to record lows, and an early tropical storm flooded Florida, no comparable action took place.

Along with many others, I’ve been pushing this issue throughout this project to little effect. We did hold an Occupy Theory Assembly on climate. It started well but became becalmed in demands that we endorse a long submission to the Rio conference. Proposals for direct action against the fossil fuel industry were more promising. However, the idea of lying down in front of coal trains was a little daunting. It was not that people did not see the urgency of the issue but that they could not see how to make headway with it.

And here’s why. Yesterday, the US Court of Appeals in DC ruled against a suit attempting to prevent the Environmental Protection Agency from regulating green house gases. The judgment scathingly noted against the so-called climate skeptics:

This is how science works….The E.P.A. is not required to reprove the existence of the atom every time it approaches a scientific question.

However, the Republican attorney general of Virginia gave notice that he will appeal the ruling. Any guesses as to how the Supremes will rule on this?

On the same day, we learned that, despite the disaster in the Gulf, Shell Oil will get off-shore drilling permits for Alaska. What’s so tawdry about this transparent election-year vote grubbing from the Obama Administration is that not a single Republican or Independent that wasn’t going to vote Democrat will do so as a result of this move. But one of the few remaining pristine landscapes will be ruined and yet more animals will die.

Humans are now causing what is known as the Sixth Great Extinction, a mass slaughter comparable to whatever it was that killed the dinosaurs, except that we’re doing it on purpose and we know we are. About 30,000 species a year are becoming extinct from megafauna like the Pinta tortoise to frogs. Insects are thriving and will inherit the planet.

Leave the disasters, extinctions, floods and fires to one side: we’ve got used to grey smog as the permanent condition in all the global cities, to a hole in the ozone layer, to holes in the floor of the ocean leaking oil, to the disappearance of drinking water, the spread of deserts and once-tropical diseases. If we’re ok with all this, do we expect debt and unemployment to generate a mass anti-capitalist movement?

For capitalism, this is all business-as-usual, what they like to call “creative destruction.” It’s also a new way to profit, as the wave of green-washing ads from oil companies makes clear. For anti-capitalists of all stripes, from the mildest reformist to the most wild-eyed revolutionary, our collective failure to develop anything other than rhetorical purchase on the survival of life is devastating. Not just to the biosphere, human and non-human life, but to the chances of pushing back neo-liberal capitalism.

 

Mafia Capitalism

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During the course of some back-and-forth discussions over the past two days about the OWS messaging in relation to debt, David Graeber coined the phrase “mafia capitalism” to express the palpable element of violent coercion at the heart of financial globalization. The latter phrase sounds technical, even clean. The reality, as we see around the empire, is that the debt machine has responded to mild setbacks with a dramatic escalation of force.

In Empire, Hardt and Negri reminded us that what Marx had called “primitive accumulation” was always part of capitalism’s process. This violent disruption separated the producer and the means of production, while also accumulating basic raw materials from colonies. There is, then, a

relationship between wealth and command and between inside and outside.

That is, in the case of England, the wealth came from outside (from the empire) and the command arose internally. This process was reversed outside Europe, so that wealth was created internally and command came from the outside.

In 2000, it seemed that this model was giving way to one of immaterial production. Today we might suggest that the new form is rather one where the command is internal in order to preside over a forcible transfer of what internal wealth there is to those in command. The form of that transfer is legalized violence and the end of state concern for the welfare of its population. In short, if this trend continues, we are no longer in the period of governmentality in which the management of population was the prime concern of government, so much as in a moment of internal colonization.

The debt crisis of the 1990s was a sovereign debt crisis in which Heavily Indebted Poor Countries (as the IMF rhetoric has it) [HIPCs] were compelled to borrow in order to repay their existing loans. Today, Heavily Indebted People are being forced to borrow more and more to survive. Or not. And the difference now is that, like the Mafia, authority no longer cares what happens to you, it just wants you to pay. Or else.

In the US, the Supreme Court, having presided over an electoral coup in 2000, has now become the legislative branch. It has enabled corporations to legally buy elections in the manner of mobsters of old. Yesterday, it authorized police to become immigration officers on the basis of mere suspicion. And tomorrow it will overturn a Republican-inspired health care plan because any concession from corporations to employees is now seen as being not just unnecessary, but illegal. The radical right don’t need to win elections: it can just rely on the Court. There is no solution for this dilemma  in the present constitution, whereby the Court invalidates laws it doesn’t like, and then legislates things that it does. Here, the force of law, backed by the simple violence of its enforcers, has become whatever the Heads of the Five Families (aka the 5-4 conservative majority) says that it is.

In the UK, where the Conservative government (technically a coalition with the Liberal Democrats) has been shown to be the creature of Rupert Murdoch, it has responded not by toning down but ramping up its attacks on the welfare system. Prime Minister David Cameron proposes ending housing benefit for young people and limiting child benefit to three children. These are deliberately nasty policies, aimed at pleasing the older (and racist) voter, who believes that hordes of (non-white) benefit “scroungers” are getting away with something, just as the tabloids have claimed for years. With not inconsiderable audacity, the Old Etonians that lead the government have denounced a “culture of entitlement” in those qualifying for benefits, just after they cut taxes for the rich.

Finally, it is worth noting that Israel, so often the paradigm-shaper for its purported dominant partners, has also turned its tactics on its internal population, cutting and privatizing services, reinforced with a police force well trained in violence.

There might be a certain schadenfreude for Palestinians and their allies in watching (presumably) Jewish Israelis complaining about police violence. This is an old lesson: colonial authority will always use the force it develops in the colony, or occupied territory, at “home.”

Just as it has done since the 1970s, neo-liberalism responds to a crisis by intensifying its operations, as Gilles Deleuze would have put it. Indeed, the Israeli Defence Force now read Deleuze as a tactical guide to defeating Palestinian resistance. This resort to force is, then, not in fact a sign of strength but of the continued inability of capitalism to match its rhetoric of wealth creation with the reality of internal wealth transfer. Welcome to mafia capitalism.

Never Mind the B@#$%^&*, Here’s the Real Jubilee

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My country of origin, the UK, is about to make a global fool of itself over the monarch’s so-called diamond jubilee, commemorating the apparently endless “reign” of Elizabeth Windsor. Altogether forgotten in all this noise has been the devastating report of the Jubilee Debt Campaign, which shows the much better side of the country. Established in 2000, the campaign has had some success in debt cancellation. Now it reports that things are getting worse.

Once again, then: No to a royal jubilee and yes to a global debt jubilee.

The key facts from the report make the case for debt abolition in themselves:

In the 1950s and 1960s the number of governments defaulting on their debts averaged four every twenty years. Since the 1970s this has risen to four every year….

 

The current First World Debt Crisis has led to debts in impoverished countries increasing. Their government foreign debt payments will increase by one-third over the next few years.

 

The Mozambique, Ethiopia and Niger governments could be spending as much on foreign debt payments in a few years as they were before debt relief.

These are countries where the Gross National Income–which is not what the average person earns but an estimate based on all final goods and services–is less than $1005 per person per annum. Even a High Income country averages only $12,276 or more. Compare that to the high-rollers on Wall Street.

A 2011 research paper for that well-known left organization the Bank of England demonstrated that, compared to the Bretton Woods system:

The current system has coexisted, on average, with: slower, more volatile, global growth; more frequent economic downturns; higher inflation and inflation volatility, larger current account imbalances; and more frequent banking crises, currency crises and external defaults.

In short: neo-liberalism is a disaster for everyone except creditors. The rhetoric of the one percent used by Occupy is more or less accurate in fact as well as emotional force.

Debts need to be cancelled. The Jubilee campaign has some practical suggestions to this end. They call for a system of debt audit and an international debt court with powers to arbitrate between creditors and debtors and/or cancel debt as they see fit.

However, in 2011 the IMF and the World Bank brought to an end the Heavily Indebted Poor Countries initiative, the sole international system for dealing with debt crisis, having given “aid” to only 32 countries in 17 years. Some countries ended up spending more on debt repayment after involvement in the process than they were before. On the other hand, Jamaica is considered too “rich” for debt relief due to its GNI of about $6500, which, if you’ve ever seen anything of the country outside the resorts, beggars belief. In 2011-12, one-quarter of government revenues were spent on foreign debt payments. There has been a 20% drop in the number of children completing elementary school in Jamaica since 1990 down to 73% from a former 95%.

This is the pattern for the global majority: increased debt, increased poverty, declining services. The IMF and World Bank themselves reported in March that of 68 low and middle income countries (GNI of $12,275 or less):

  • 5 are in default on at least some of their debt payments
  • 15 are at high risk of not being able to pay their debts
  • 23 are at moderate risk of not being able to pay their debt
  • 25 are at low risk of not being able to pay their debts

So there are no countries not at risk of default in the world’s poorest nations. Loans are increasing, often to repay earlier loans. Speculative loans are widespread.

The Jubilee campaign does not report on high income nations so here’s some data from a random search of today’s financial media:

  • Germany sold bonds for 0.07% annual interest last week. Spain, however, has to pay 6% and is insisting that this is intolerable. Italy sold bonds at 6.504% today. The bonds in my retirement account are making 1.76%.
  • Christine Lagarde, head of the IMF, pays no tax on her salary of $467,940 and has a built-in pay rise every year of her contract. Sporting a deep tan, Lagarde last week told Greece “it’s payback time,” arguing that all Greeks had to pay their taxes.
  • Facebook founder Eduardo Saverin took citizenship in Singapore to avoid $67 million in capital gains tax, because paying 15% tax is too much for the one per cent.
  • Meanwhile law professor Alex Tsesis is quoted in the Times as being “skeptical about the ability of a retail purchaser to be able to play on a level field in the market.” The poor chap lost $2200 on Facebook shares rather than making the instant cash-in “investors” feel entitled to get.
  • Told that New Jersey faces a $1.3bn budget deficit thanks to his tax cuts for the rich, Gov. Chris Christie called the auditor the “Dr Kevorkian of the numbers.”
  • Russian oil magnate Mikhail Fridman has taken his TNK corporation out of  BP: it generated $19bn in dividends to its UK parent since it was created in 2003. Steal oil in Russia, spill it in the Gulf: BP.
  • When shareholders vote on executive pay, companies used their block votes so that “less than 3 per ended up losing the votes.”
  • Retail sales in Spain are down 11% on the year and a staggering 25% over a five-year period–since the end of the housing boom in other words.

In short, we all need a Jubilee: not a grey-haired German lady taking a ride in a horse-drawn carriage with an irascible Greek aristocrat, but a debt jubilee that returns the financial system to a level of decency. That would be the sensible, NGO-style demand that could be made. But the Jubilee Debt Campaign has been making this case brilliantly for years and the situation just gets worse. No demands. No royals. But I think a quick listen to the Sex Pistols might be in order.

After Striking

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For the first time at OWS you can hear the words “After May Day.” It seems almost surreal after so much planning for this day. When the events of May are over, it’s a fair bet that the global social movements will once again have the world’s attention. What will we do with this second chance? It’s time to begin imagining how to connect our issues.

So as not to lay this on anybody else, I’m going to explore this by means of the most popular topic in my own project–namely student debt–and the least, which would be climate change. How can we avoid being co-opted on the former and ignoring the latter?  No answers, no demands, just questions for the Spring.

Student debt has become a viral topic in the past four months. Barely mentioned in the media until recently, it was theme of the week in the presidential and congressional elections. And what was until this week a mostly OWS slogan is now in the mix:

Romney Super PAC ad

Yes, Mitt Romney’s Super PAC called American Crossroads has used the Occupy Student Debt slogan in an attack ad against Obama. The quote marks in this still I made from their video suggest that they even know where it comes from. The theme of the ad is that while Obama is off being a “celebrity,” real problems have been mounting for American young people.

Obama has indeed done little to mitigate the student debt crisis, although the subject was one of his most reliable applause lines in 2008. Romney has no solution at all, certainly not the one proposed by OSDC: free public education. He knows Obama won’t argue for anything like that. If this meme goes viral across the Right, we risk losing one of the most effective OWS projects.

On the other hand, from micro to macro, climate change is  dropping out of sight in Occupy. When I post about it, as I noticed when I did finally look at the stats before going to Madison, readership plummets. In the Occupy global action week coming up in mid-May, climate is not mentioned at all, no doubt for fear of this alienating effect.

A news item this week seemed to encapsulate this dilemma. As I’ve mentioned a couple of times, workers at a French steel plant owned by the multinational giant ArcelorMittal  have been occupying it to try and prevent its closure. However, an article in Le Monde this week clarified why the plant is not opened or closed.

This is a bit complicated, so here’s the takeaway: the steel producers are using climate change carbon credits to make a load of money for doing nothing. In more detail: under the terms of the European Union carbon trading agreement, companies were given a “free” level of pollution in 2005. Emissions would have to be paid for if they exceeded this level but a credit could be achieved by reducing them below it. ArcelorMittal has “reduced” its emissions by simply closing its plants. While some of its credits have been stored, others have been cashed in, allowing them to make $140 million in 2010: for doing nothing at all.

So if François Hollande wins the presidential election and gives ArcelorMittal an incentive to reopen the plant, it will have to be sufficiently large to exceed this free money and all the costs of actually producing. That’s not allowed by the “market,” the same market that gave all these credits to ArcelorMittal in the first place. They can cash them in, or hold the French government to ransom for a few jobs, with any actual steel production being carried out in India without tiresome regulations.

Here we see the pincer movement of financialized capital. The most widely accepted solution to the financial crisis from the Paul Krugman wing of the Democratic Party to the left is economic growth. For the green left, however, growth means more carbon emissions and accelerated climate change. For anarchists, it’s now taken as read that the current permanent expansion of capitalism must collapse because there are not infinite resources to exploit.

However, if you can capitalize total inactivity at technically an infinite rate of profit–and don’t forget all those tax deductions for the declining hardware and the savings on salary–this implosion may allow for a continued rate of profit even if there is widespread climate change.

I don’t have a simple answer to these dilemmas. I do think it suggests that a new form of affinity group is going to have to think how to cross the lines of the existing working groups to imagine a form of systemic critique that goes beyond the perhaps self-evident anti-capitalism. And that’s precisely as not simple as it sounds. The upside is that the space created by the activism of May gives enough time to get on it.