What’s Good for Capital
The System is Working...for its Masters
“What’s Good for General Motors…”
“For years, I thought what was good for the country was good for General Motors and vice versa.” So said General Motors CEO Charles “Engine Charlie” Wilson to the U.S. Senate when President Dwight Eisenhower nominated him for Secretary of Defense in 1953. A Senator had asked Wilson if as secretary of defense he could make a decision adverse to the interests of General Motors (G.M.).
The notion of an identity of interests between G.M. and America may have once been comforting for a leading capitalist coordinator like Wilson, but it was a deadly illusion. The highly sub-divided work on the nation’s giant postwar automobile plants and on their sprawling assembly lines was alienating, dangerous, and exhausting, and strongly segmented by rigid inequalities of race and gender.1Along with other leading corporate players in the petro-industrial complex, moreover, G.M. and other two Big Three U.S. auto manufacturers (Ford and Chrysler) were centrally involved in the creation of an unsustainable, over-extended, oil-addicted, and carbon-spewing way of life that has produced an ecological apocalypse that is already upon us. Automobile dependency has ravaged America ’s cities and landscape for nearly a century now, helping turn the country into an over-extended, atomized, anomie-plagued, and polluted, “asphalt
A Conscious Decision to Kill
The role of G.M. in the creation of this disaster was more than merely accidental or structural. Over three decades preceding Wilson’s appointment to the Pentagon, G.M. pursued a deliberate strategy of dismantling the nation’s electrical railways – including urban streetcars and inter-urban railways – and replacing them with cars, trucks, and buses. In 1921, fully 90 percent of American trips were by rail, mainly electric rail. Just one in 10 Americans owned an automobile. There were 1,200 separate electric street and interurban railways in the U.S. – “a thriving and profitable industry with 44,000 miles of track, 300,000 employees, 15 billion annual passengers, and $1 billion in income.” Nearly every U.S. municipality with at least 2,500 residents enjoyed its own electric rail system.3
This was a problem for G.M., which set up a special unit charged with bringing about the great replacement through a variety of means: the use of freight leverage to compel railroads to abandon electric cars, the purchase and scrapping of electric lines, the use of financial (banker) leverage to encourage conversion to motor buses, the forming of holding companies to buy up electric lines and convert them to motor buses directly, the bribing of public transit officials. The conversion was complete by the early 1960s, when I recall my father taking me at the age of four to watch and photograph the very last run of a train on the inter-urban North Shore Line. That $50 million transit line was “the fastest electric service in the world, providing Wisconsin 's lakeshore cities and Chicago 's northern suburbs high-speed access to the downtown loop.” The state-of-the-art North Shore was purchased and taken down b G.M. and two bus lines (Greyhound and National City ). As the onetime U.S. Senate Counsel Bradford Snell noted, “The streetcar [and the inter-urban lines] did not die ….because of demographics or economics or disinvestments or evolution; [the] died because GM in 1922 made a conscious decision to kill [them] and, for the next several decades, pursued a strategy designed to accomplish this objective.” 4
The Golden Age: “Producing Always More and More”
Still, the notion of an identity of interests between G.M. and America held no small plausibility in the full flush of the post-WWII boom and the dawning of the “golden age” of U.S.-led western capitalism. It resonated because G.M. generated “many millions of jobs, not only in the direct manufacture, shipping and sale of cars, trucks, and other products, but in its peripheral stimulus for rubber, glass, and all the other components required to make a car” (Saul Landau).5 And it wasn’t just about G.M. (the first U.S. corporations to pay more than $1 billion in taxes), of course. The two decades following World War II marked the apex of what the historian Charles S. Maier calls “the [American] Empire of Production.”6 Fulfilling a potential for mass-productionist economic hegemony it had exhibited earlier in the century, the U.S. emerged from the war with its remarkable “Fordist” industrial apparatus intact and expanded, remarkably free of foreign competition in an industrialized world that had been laid low by bombs and artillery beyond U.S. shores (the U.S. ended the war as home to almost two-third of the planet’s industrial production)7 The explosion of pent-up market demand at home and abroad translated into the massive creation of livable wage union jobs with health care benefits and pensions for millions of American workers at giant corporations like G.M., Ford, Chrysler, Westinghouse, General Electric, DuPont, Xerox, Caterpillar, International Harvester, Boeing, Grumman, Lockheed, Northrup, U.S. Steel, Bethlehem Steel, Goodyear, Firestone, Dow, Monsanto, and Eastman Kodak. The contrast with the dark days of the Great Depression was stark, creating a dreamy state of satisfaction and security for masses of ordinary Americans. The struggles for workers’ control that had been waged from the bottom up in the late 19th and early 20th centuries and partly re-awakened during the 1930s had been lost.8 But who really cared about that defeat amidst the previously unimaginable plenty flowing to much of the populace with the flowering of “the American century”? General Motors and U.S. Steel et al. were thriving like no time in memory and so were an unprecedented number and share of ordinary American working folks.
In the March 4, 1951 issue of This Week, a widely read Sunday newspaper supplement, the editor, William J. Nichols, published an article (subsequently reprinted in Readers Digest) titled “Wanted: A New Name for ‘Capitalism.’” Convinced that the word no longer properly matched the American system because “it stands for the primitive economic system of the nineteenth century,” Nichols felt that something new was required to describe “this system – imperfect but always improving, and always capable of further improvement – where men move forward together, working together, building together, producing always more and more, and sharing together in the rewards of their increased production.” He had already heard a large number of alternative descriptions, including “economic democracy,” “industrial democracy,” “distributism,” “mutualism,” and “productivism.” Nichols asked readers to write in with their own ideas for a “better term.” He received fifteen thousand responses in agreement with the notion that selfish and unequal “capitalism” no longer described the United States ’ underlying privately controlled and profits-oriented system of socioeconomic management. This judgment on the emergence of a supposed new “people’s capitalism” was echoed by the popular writer Frederick Lewis Allen. In his widely read book The Big Change: America Transforms Itself 1900-1950, Allen compared the “new American system” to a “transformed product which might be likened to an automobile continually repaired.” The new version, tested and proved masterful during WWII – when “Washington jammed the accelerator right down to the floor boards” and “the engine began to run smoothly and fast” – had “repealed the Iron Law of Wages” and brought about “a virtually automatic redistribution of income from the well-to-do to the less well-to-do.” For Allen this “big change” was rooted to no small extent in “the dynamic logic of mass production” pioneered by Henry Ford: “the principle that the more goods you produce, the less it costs to produce them; and that the more people are well off , the more they can buy, thus making this lavish and economical production possible.”9
No such re-“distributivist” transformation actually occurred. It is true that the Great Depression and war brought about a very slight downward redistribution of income from the top 20 percent to the rest of the U.S. population. But the trend was over by 1953, when the share of national income enjoyed by the top fifth rose, as did the share of the top 20th. In 1957, the top quintile received 45.3 percent of all income and the top 5 percent got more than the entire bottom 40 percent. Meanwhile, economists and statisticians estimate that the top 2 percent of income receivers owned as much as three fourths of all American corporate stock and that as many as 40 percent of Americans (soon to be featured in Michael Harrington’s justly famous book The Other America) lived in poverty As historians Melvyn Dubofsky and Athan Theoharis noted. “This functional [postwar U.S. ] economic system, which preserved privilege at the top, did not challenge poverty at the bottom.” But millions didn’t care all that much as the rising tide of “the golden age” lifted their boats in ways that made them indifferent to both the size and style of others’ yachts and the misery of others’ leaking rafts. Rising wages and salaries during the 1940s and 1950s pushed many Americans above the poverty and provided them with access to material comforts unimaginable in the 1930s – helping feed the false notion that the United States had moved beyond the evils of capitalism.10
The New Exterminism: Eco-Reckoning Sooner Than Expected
How far we have traveled from a time when the notion that what was good for big U.S. capital was good for the country seemed so easy to sell. The ecological price of the oil-driven model and ideology of growth - epitomized by Nichols’ celebration of Americans “producing always more and more” – pioneered by the U.S. profits system is coming due sooner than even some of the most pessimistic prognosticators expected in the 1970s and 1980s. The anthropogenic (human-generated) climate change produced by modern petro-capitalism and the related growth ideology of the wealthy Fewdoes not merely pose grave difficulties for “our grandchildren.” Massive deleterious transformation in core planetary processes and phenomenon – extreme weather, flooding, burning, deforestation, desertification, drought, erosion, water and food availability, species survival, bacteriology, and more – are no longer merely unavoidable. They are already underway. The eco-apocalypse created by the profits system is happening now. The need for human intervention was already urgent when President Jimmy Carter (who hosted a White House gathering for the anti-growth eco-economist E.F. Schumacher) tried in his own weak way to warn Americans off the “spiritual emptiness” and peril of “self-indulgence and consumption” – of “owning things” and “piling up material goods” in pursuit of an endless more. Now, as Bill McKibben shows in his important book Earth: Making a Life on a Tough New Planet, we see that we’ve waited too long. “Our old familiar globe is suddenly melting, drying, acidifying, flooding, and burning in ways that no human has ever seen. We’ve created, in short order, a new planet, still recognizable but fundamentally different. We may as well call it Eaarth...This,” McKibben muses, “is the biggest thing that has ever happened in human history.” The recent and ongoing flooding in Australia and Brazil is only the latest indication of the massive changes underway.12 Fordist and post-Fordist “productivism” is looking more and more exterminist with each passing day and glacier.
True, the worst consequences are being felt first in the “developing” world, where masses of people are most vulnerable to escalating disease, food shortages, flooding, extreme weather, and other environmental disasters. But the costs of climate-related eco-trastrophe and the related exhaustion of global fossil fuel resources have already been heavily felt in the rich world, contributing to disasters like Hurricane Katrina (2005) and a 2003 heat wave that killed hundreds in Europe and forcing vastly expensive infrastructure investments (e.g. giant dike improvements and other upgrades in the Netherlands and Venice) and other costs in the wealthy nations. Climate-related brush and forest fires have displaced many thousands of homeowners and killed hundreds across the rich world. New York City is already spending millions in anticipation of rising ocean levels. According to a study commissioned from the Harvard’s Center for Health and the Global Environment by Swiss Re (the world’s biggest insurance firm) six years ago, near-term climate change will create an increasing number of storms and other disturbances that will “overwhelm the adaptive capacities of even developed nations; large areas and sectors [will] become uninsurable; major investments [will] crash; and markets [will] crash….In effect, parts of the developed world would experience developing nation conditions for prolonged periods as a result of the natural catastrophes and increased vulnerability due to the abbreviated return times of extreme events.” McKibben notes that the over-exploitation of oil resources helped precipitate the financial collapse of 2008 by driving up gas prices to a degree that helped undermine suburban home values by raising the commuting cost of living in such residences.14
“Profits Are Booming, Why Not Jobs?”
Meanwhile the notion of an identity of purely economic interests – ecology aside (I say with no small chilling irony) – between big American capital and the rest of the country has considerably less plausibility than it did half a century ago. The tax cuts for the rich that Barack Obama recently agreed to inherit and pass on from George W. Bush – in what was already the industrialized world’s most unequal and wealth top-heavy society (one where the top 1 percent owns more wealth than the bottom 90 percent15) by far16 – have been sold to the American public as necessary for jobs and the expansion of recovery. Profits for the wealthy American few, the argument goes, mean more employment and income for the broad American populace.
The argument is transparently wrong in ways that are openly discussed in mainstream media. As the Associated Press (no leftist organ, to say the least) reported just 13 days after Obama signed the tax cut legislation, there is currently a savage disconnect between corporate interests and the needs of American working people. American corporate profits and stock prices are way up, the AP reported, but hiring is not. All but 4 percent of the nation’s top 500 companies reported profits in 2010. The stock market is approaching its highest peak since the financial meltdown of 2008. But the jobs dividend that is supposed to filter down to ordinary Americans when the American rich prosper is nowhere to be seen. The official unemployment rate crept back to 10 percent (the real or functional unemployment rate is closer to 20 percent) at the end of the year. The AP cited Harvard Business School Dean Nitin Nohria, who is concerned about the disparity between U.S. profits and U.S. job creation. Last November in the Harvard Business Review, Nohrira worried that “business leaders” will lose legitimacy in American society if U.S. corporations keep flourishing while millions of Americans struggle.17
In a recent article titled “Profits are Booming, Why Not Jobs?,” the New York Times reported that corporate “earnings” had exploded “even as 15 million Americans remain mired in unemployment [the real number is closer to 25 million – P.S.], a number without precedent since the Great Depression” and while the citizenry experiences “record levels of foreclosures and indebtedness.” At the current sluggish level of job growth, Times business writer Michael Powell noted, the U.S. economy will require 90 months just to replace the jobs lost in the Great Recession of 2008-2009. And that did not include the 5 million jobs required merely to keep up with population growth.
The Times found numerous logical reasons for the U.S. profits-jobs disconnect. Some big American firms are showing higher profits simply because their competition has collapsed. Following the financial collapse of 2008, for example, the Wall Street giants Goldman Sachs and Morgan Chase no longer had to compete with Bear Stearns, Lehman Bros. and Merrill Lynch. Many jobs disappeared with the departure of the defeated firms.
Many companies are sitting on capital and storing up liquidity like never before in the wake of the financial collapse. Firms who no longer believe they can borrow quickly have decided to keep a lot more cash on hand for precautionary purposes. Low interest rates produced by the recession create an incentive for many companies to simply “exploit the spread between a zero funds rate and rates on Treasury bonds.” This permits corporations to “mark profits without selling much or hiring anyone.”
A large reserve army of unemployed workers is a profits boon to corporate America . Desmond Lachman, a former managing director at Salomon Smith Barney who now works as a “scholar” at the influential right-wing policy group the American Enterprise Institute, speaks about this in candid terms. “Corporations,” Lachman told Powell, “are taking huge advantage of the slack in the labor market — they are in a very strong position and workers are in a very weak position,” he said. “They are using that bargaining power to cut benefits and wages, and to shorten hours.” 19 That’s not unemployment as an anomaly for capitalist profits; it is joblessness as a source of them. It’s straight out of Karl Marx (1818-1883) sixty years after William J. Nichols and Frederick Lewis Allen waxed eloquent on America ’s glorious transcendence of “primitive” and “nineteenth century” capitalism.
And then there’s the little matter of U.S. capital’s global nature – also consistent with the irrelevant writings of Marx. The “dynamic logic” of corporate-managed mass production for mass markets has left America ’s shores to no small extent and for some time. Lachman worries that capital’s wage- and benefit-cutting strategy “serves corporate and shareholder imperatives” but “very much jeopardizes our chances of experiencing a real recovery.” But how much does big “American” capital really care about America ’s economic health (or the economic health of any specific nation for that matter)? Another great factor behind the profits-jobs disconnect is the basic fact that the big U.S. companies are actually global outfits. Insofar as the rise in U.S. corporate profits is creating jobs at all, the Associated Press (AP) reported, the employment dividend is being enjoyed primarily abroad. The Economic Policy Institute (EPI) finds that American firms created 1.4 million jobs outside the U.S. in 2010, compared to less than 1 million in the U.S. Leading “American” firms like Caterpillar (which has invested in three new Chinese plants in the last two months), DuPont (which shrank its U.S. workforce by 9 percent and increased its Asia-Pacific workforce by 54 percent from 2005 to 2009), and Coca Cola (less than 13 percent of its 93,000 global employees are in the U.S.) are drawn to emerging middle-class markets and an increasingly skilled but low-cost workforce in south and east Asia. Reflecting on such facts, the EPI’s senior international economist Robert Scott told the AP that “There’s a huge difference between what is good for American companies and what is good for the American economy”20 – a total inversion of “engine Charlie” Wilson .
“We are a global player out to succeed in any geography,” a leading DuPont official told the AP – an honest statement. Nationally bound U.S. taxpayers bailed out big U.S. capital to the tune of more than $14 trillion in 2008 and 2009. We did so out of the belief that such massive state-capitalist corporate welfare was required to rescue the American economy. But elite U.S. capital – owned by the top 1 percent that insisted on and predictably (under the openly plutocratic rules of American “dollar democracy”) received the preservation of the Bush tax cuts – is not nationally bound. Its agents are brazenly “global players” whose only allegiance is their own bottom line, pure and simple. In the early 1990s, Ford Motor Company chief Alex Trotman told Robert Reich that “Ford isn’t even an American company, strictly speaking. We’re global. We’re investing all over the world. Forty percent of our employees already live and work outside the United States , and that’s rising. Our managers are multinational. We teach them to think and act globally.”21 America ’s elite business class holds no particular attachment to the people, communities, health, or even competitiveness of the United States per se.
Failure to acknowledge this harsh reality can lead to depressing Orwelliann absurdities. In mid-January of 2011, Obama won accolades from the business community for tapping General Electric’s president Jeffrey Immelet to head the White House’s newly formed President’s Council on Jobs and Competitiveness. "The council’s title referred to specifically American jobs and competitiveness – something that made Immelet’s appointment more than a little darkly Orwellian. With less than half its workers located in the U.S. and more than half of its revenue coming from non-U.S. activities, liberal New York Times columnist and Princeton economist Paul Krugman noted, “G.E.’s fortunes have very little to do with U.S. prosperity.” 22
Sadly but predictably, Obama’s 2011 State of the Union Address completely ignored the problem of corporate out-sourcing. In the name of “Winning the Future,” the president called for the United States to meet the challenge of increasing economic competition from foreign countries but never mentioned the multinational nature of the leading “American” business firms and the critical fact that “American” capital invests heavily in overseas labor, raw materials, and consumer markets.23
A Modern Henry Ford: “A Harsh Environment is a Good Thing”
The noted neoliberal “shock therapy” economist Jeffrey Sachs of Columbia University claims that “American” multinationals “have no choice” but to move their operations overseas, especially as the educational quality of the workforce beyond the U.S. has improved. He points out that the United States has declined in global rankings for higher education while other nations (most notably India and China ) have risen. “We are not fulfilling the educational needs of our young people,” Sachs says. “In a globalized world, there are serious consequences to that.”24
Sachs has a point, though it’s not just about higher education. The U.S. does not provide the technical and skill training that is standard for most of the workforce in more advanced industrial states like German and Japan . In an age of production when most of the standardized and repetitive tasks are automated, employers only require workers to perform the more skilled labor. 25 The United States ’ growing failure to develop basic skills including elementary literacy and numeracy and its relative lack of investment in vocational education imposes a real price on American working people in a global economy.
There are two other problems with Sachs’ formulation. First, it fails to give proper agency to the American capitalist elite – the most powerful actor by far in the making of U.S. domestic (including educational) policy – in the deterioration of American education. Sachs deletes the important and revealing fact that the ever more globalized American business class makes no serious effort to reverse the nation’s declining performance and investment in the critical areas of education, research, job training, infrastructure, health, energy efficiency, and the like. As EPI founder Jeff Faux noted in his 2006 book The Global Class War, “business elites that cared about America ’s future would be demanding new government investments” in quality education and national research and development and the like. “Instead, they send their lobbyists to demand more tax cuts, now.”26
Second, “American” capital is often drawn to foreign labor because of something very different than educational qualification. It gravitates towards the cheap and super-exploited status of labor in places like Foxconn's Longhua factory campus in Shenzhen, China— where “a dutiful army of 300,000 employees eats, sleeps, and churns out iPhones, Sony PlayStations, and Dell computers” (Bloomberg BusinessWeek) Employing more than 920,000 workers across 20 mainland Chinese factories, Foxconn “leverag[es] masses of cheap labor, mainly 18-to-25-year-olds from rural areas, to make products like the iPhone at seemingly impossible prices” (BloombergBusinessWeek reports). Foxconn does business with leading “American” multinationals, including IBM, Cisco, Microsoft, Sony, Hewlett-Packard, and Apple. Foxconn factor workers receive a mere ($176) per month in return for performing specialized labor tasks under conditions so alienating that 11 of the company’s workers committed suicide in early 2010, most of them by leaping from Foxconn’s high-rise worker dormitories. The company subsequently strung “more than 3 million square meters of yellow-mesh netting around its buildings to catch jumpers and set up a 24-hour counseling center staffed by 100 trained workers.” According to BloombergBusinessWeek, the entrance to the Longhua campus “looks like a border crossing, with seven toll-booth-like lanes and uniformed guards.” The “drab and utilitarian” production complex includes “huge LED screens that flash public-service announcements and cartoons, and a bookstore that sells, among other things, the Chinese-language translation of the Harvard Business Review.” The bookstore prominently displays biographies of Foxconn founder and CEO Terry Gou, the so-called “Henry Ford of China ” and the richest man in Taiwan , estimated by Forbes to have a personal fortune of $5.9 billion. One of the Gou biographies collects his many pithy aphorisms, including "work itself is a type of joy," "hungry people have especially clear minds," "an army of one thousand is easy to get, one general is tough to find,” and "a harsh environment is a good thing” – all no doubt comforting to the Foxconn workers telling the company’s crisis-line counselors of their depression. 27 How nineteenth century - Dickens would be as impressed as Orwell.
The difficult nature of working class life in Shenzen and across the super-exploited peripheries of the world economic system is a leading factor behind the fact that American workers no longer make any but a small portion of many of the consumer goods sold in the U.S. A harsh environment for developing country workers is a very good and profitable thing for globally mobile “American” capital.
The System is Working,for Its Owners
It is nice to see corporate media give some candid, reality-based coverage to the conflict between the interests of big American capital and those of American workers and communities. But critical matters must go unstated in that media and the broader ideological milieu. It is beyond the boundaries of doctrine in that media to root that conflict in how the profits system works. There’s a misleading sense of angry puzzlement and paradox in the recent coverage and commentary: “American corporate profits are booming, so why aren’t American jobs?” The message is that the system isn’t working the way it’s supposed to – the way it ought to function, on behalf of the common American good. But when has capitalism ever been about the creation of good jobs and lives for working people and the broad mass of citizens in the U.S. or any other specific country? As Karl Marx and Frederick Engels, those unparalleled chroniclers and critics of nineteenth century capitalism, noted in 1848:
‘The bourgeoisie, wherever it has got the upper hand…has left remaining no other nexus between man and man than naked self-interest, than callous “cash payment”. Constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into air, all that is holy is profaned…The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe. It must nestle everywhere, settle everywhere, establish connections everywhere.’
‘The bourgeoisie has through its exploitation of the world market given a cosmopolitan character to production and consumption in every country. To the great chagrin of Reactionists, it has drawn from under the feet of industry the national ground on which it stood. All old-established national industries have been destroyed or are daily being destroyed. They are dislodged by new industries, whose introduction becomes a life and death question for all civilised nations, by industries that no longer work up indigenous raw material, but raw material drawn from the remotest zones; industries whose products are consumed, not only at home, but in every quarter of the globe. In place of the old wants, satisfied by the production of the country, we find new wants, requiring for their satisfaction the products of distant lands and climes’.28
My Webster’s New Twentieth Century Dictionary (unabridged) defines cap/i-tal-ism, n. as follows: “the economic system in which all or must of the means of production and distribution as land, factories, railroads, etc., are privately owned and operated for profit, originally under fully competitive conditions; it has been generally characterized by a tendency toward concentration toward concentration of wealth, and, in its later phases, by the growth of great corporations, increased government control, etc.” Notice, please, the absence of any reference in that definition to various things that are routinely identified with capitalism in American political and intellectual discourse – democracy, human freedom, free trade, trade per se, and/or a “free market,” characterized by widespread competition and/or little or no government interference. Notice also the absence of any reference to any commitment to job creation in any specific nation or indeed in any location at all. Capitalism is about profit for the owners of capital, period, to be attained through any number of un-specified means, including simple and complex dispossession of land and materials, chattel slavery (for centuries prior to its outlawing in 1863-65 in the U.S.), the hiring of workers, the firing of workers, the “out-sourcing” of labor tasks across nations, purely speculative investment, monopoly formation and pricing, the dismantlement of competing firms, sectors, and industries, the pollution and perversion of the natural environment, the appropriation of public assets, the slashing and theft of wages and benefits, … etc…the list goes on.
When the profits system (capitalism) is properly understood for what it is really and only about (investor profit and nothing more), then there is nothing paradoxical about its failure to serve working people and the common good in the U.S. or anywhere else. If corporate profits are high, the system is working for its architects and intended beneficiaries – capitalists. Its great capital-agglomerating corporations are working precisely as they are supposed to under U.S. law, which holds (under the terms of the Michigan Supreme Court’s ruling in the Dodge v. Ford Motor Company 204 Mich. 459, 170 N.W. 668. [ Mich. 1919]) that “managers have a legal duty to put shareholder’s interests above all others and no legal authority to serve any other interests.”29
The Golden Age was the Real Anomaly
During the 1950s and early-to-mid 1960s, to be sure, there were seemingly credible reasons to think that what was good for big American capital was good for the country, particularly when it came to job creation. But how much longer do we wish to (ala Michael Moore) sentimentally and nostalgically treat that long lost period as anything like normative for our understanding of capitalism’s relationship to the health and welfare of the American economy and populace? Besides being riddled by remarkable inequalities of class, gender, and race and despite containing within it the seeds of the epic environmental crisis that is now already upon us, that great American post-WWII boom rested on the ephemeral foundations of the United States ’ unchallenged “Fordist” (productionist) supremacy. By the late 1960s and early 1970s, the rise of foreign industrial competition (equipped with the U.S.-assisted privilege of late development) combined with increased working class militancy to create a crisis of profitability to which U.S. capital responded with well- known neoliberal strategies: lay-offs, wage- and benefit cuts, de-unionization campaigns, shifting operations abroad, plant closings, automation, globalizing and shifting out of production and into parasitic financial and dispossession-ist strategies at home and abroad. This “Great U-Turn” and related “Deindustrialization of America” (to quote two key book titles from the period by left U.S. economists Barry Bluestone and Bennett Harrison) was well underway 40 years ago.30 (Northern black communities - who never enjoyed the post-WWII prosperity to anything like the degree as white America - experienced significant blue collar job loss from the late 1940s on31). The Golden Age (1945-1971) was the anomaly.
There were more than a few presentiments of the global abandonment to come even at the height of Maier’s “empire of production.” “As early as the 1950s,” Faux notes, “A Ford Motor executive corrected a U.S. senator who referred to the company as ‘an American firm. We’re an American company when we are in America ,’ he said, ‘and a British company when we are in Britain , and a Brazilian company when we are in Brazil .”32 American capital was never permanently or more than contingently committed to the U.S. per se, consistent with its identity as one faction of that world-historical class that Marx and Engels called “the bourgeoisie.” Perhaps as that class’s ongoing and hardly novel abandonment of American workers deepens et further it will become more apparent that the current “neoliberal” period – and not so much the anomalous post-WWII era – is a true reflection of the capitalist system and that real solutions – economic, social, and ecological – lay beyond the de facto dictatorship of capital, which is “unfit to rule because it is incompetent to assure [a worthwhile] existence to its slave”33 in the “world’s richest nation” as well as in the shantytown periphery. All who seek a just and sustainable American economy for the 21st century would do well to let go of the sense that there is any real inconsistency in rising American corporate profits not creating good American jobs. This "failure" is the result of “American” capitalism working well for its masters.
There is contradiction in the American profits-jobs disconnect, but the contradiction is not internal to the profits system. It exists, rather in the conflict between the selfish, amoral, and borderless logic of capital and the material and social needs of ordinary people within the U.S. Let the de-legitimization of America ’s not-so American capitalists feared by Nitin Nohria begin. And let those “business leaders” beloved profits system lose even more face along the way!
Support for Socialism...in the Headquarters of Global Capitalism
The de-legitimization appears to have started, in fact. As the left social critic Charles Derber noted, reflecting on some fascinating polling data last year:
‘According to the conventional wisdom, the US is a center-Right country. But a new poll by Pew casts doubt on that idea. It shows widespread skepticism about capitalism and hints that support for socialist alternatives is emerging as a majoritarian force in America ’s new generation.’
‘Carried out in late April and published May 4, 2010, the Pew poll, arguably by the most respected polling company in the country, asked over 1500 randomly selected Americans to describe their reactions to terms such as “capitalism,” “socialism,” “progressive,” “libertarian” and “militia.” The most striking findings concern “capitalism” and “socialism.” We cannot be sure what people mean by these terms, so the results have to be interpreted cautiously and in the context of more specific attitudes on concrete issues, as discussed later.’
‘Pew summarizes the results in its poll title: “Socialism not so negative; capitalism not so positive.” This turns out to be an understatement of the drama in some of the underlying data.’
‘Yes, “capitalism” is still viewed positively by a majority of Americans. But it is just by a bare majority. Only 52% of all Americans react positively. Thirty-seven percent say they have a negative reaction and the rest aren’t sure.’
‘A year ago, a Rasmussen poll found similar reactions. Then, only 53% of Americans described capitalism as “superior” to socialism.’
‘Meanwhile, 29% in the Pew poll describe “socialism” as positive. This positive percent soars much higher when you look at key sub-groups, as discussed shortly. A 2010 Gallup poll found 37% of all Americans preferring socialism as “superior” to capitalism.’
‘Keep in mind these findings reflect an overview of the public mind when Right wing views seem at a high point – with the Tea Party often cast as a barometer of American public opinion. The polls in this era do not suggest a socialist country, but not a capitalist-loving one either. This is not a “Center-Right” America but a populace where almost 50% are deeply ambivalent or clearly opposed to capitalism. Republicans and the Tea Party would likely call that a Communist country.’
‘The story gets more interesting when you look at two vital sub-groups. One is young people, the “millennial generation” currently between 18 and 30. In the Pew poll, just 43% of Americans under 30 describe “capitalism” as positive. Even more striking, the same percentage, 43%, describes “socialism” as positive. In other words, the new generation is equally divided between capitalism and socialism.’
‘The Pew, Gallup and Rasmussen polls come to the same conclusion. Young people cannot be characterized as a capitalist generation. They are half capitalist and half socialist. Since the socialist leaning keeps rising among the young, it suggests—depending on how you interpret “socialism”—that we are moving toward an America that is either Center-Left or actually majoritarian socialist.’ 34
There’s a “big change” that might have intrigued Frederick Lewis Allen and surprised William J. Nichols. Now if we only had an organized and institutional Left ready, willing, and able to harness and act up on the unreported radical sentiments of much of the American populace and particularly of its youth.
Paul Street (www.paulstreet.org) is the author of many articles, chapters, speeches, and books, including Empire and Inequality: America and the World Since 9/11 (Boulder, CO: Paradigm, 2008); Racial Oppression in the Global Metropolis (New York: Rowman & Littlefield, 2007; Segregated Schools: Educational Apartheid in the Post-Civil Rights Era (New York: Routledge, 2005); Barack Obama and the Future of American Politics (Boulder, CO: Paradigm, 2008); and The Empire’s New Clothes: Barack Obama in the Real World of Power (Boulder, CO: Paradigm, 2010). Street is currently completing a book titled Crashing the Tea Party, co-authored with Anthony DiMaggio. He can be reached at firstname.lastname@example.org
1 Thomas Sugrue, Origins of the Urban Crisis: Race and Inequality in Postwar Detroit ( Princeton , NJ : Princeton University Press, 2005), 91-124; James Geschwender, Class, Race, and Worker Insurgency: The League of Revolutionary Black Workers (New York: Cambridge University Press, 1977); B.J. Widick, “Black Workers: Double Discontents,” in Auto Work and its Discontents ( Baltimore : Johns Hopkins University Press).
2 Jane Holtz Kay,Asphalt Nation: How the Automobile Took Over America and How We Can Take it Back (Berkeley: University of California Press, 1997)
3 Branford Snell, “The Streetcar Conspiracy: How General Motors Deliberately Destroyed Public Transit” (1995) athttp://www.lovearth.net/
4 Snell, “Streetcar Conspiracy.” See also Stephen B. Goddard, Getting There: The Epic Struggle Between Road and Rail in the American Century (Chicago: University of Chicago, 1996).
5 Saul Landau, “Welcome to the 2011 American Dream,” ZNet (January 11, 2011) at http://www.zcommunications.
6 Charles Maier, Among Empires: American Ascendancy and its Predecessors ( Cambridge , MA : Harvard University Press, 2006), 191-237,
7 Eric Hobsbawm, The Age of Extremes: A History of the World,1914-1991 (New York: Pantheon, 1994), 258. “By 1913, the U.S. had already become the largest economy in the world, producing over one third of its industrial output – just under the combined total for Germany , Great Britain , and France . In 1929 it produced over 42 percent of the total world output, as against just under 28 percent for the three European industrial power.” Hobsbawm, Age of Extremes, 97.
8 David Montgomery, Workers’ Control in America : Essays in the History of Work, Technology, and Labor Struggles (Cambridge University Press, 1980).
9 Frederick Lewis Allen, The Big Change: America Transforms Itself 1900-1950 (New York: Harper, 1952), 100, 251.
10 Melvyn Dubofsky and Athan Theoharis, Imperial Democracy: The United States Since 1945 (Englewood Cliffs, NJ: Prentice Hall, 1988), 66.
11 The rich have long underwritten the core Western notion that “growth” is the solution to social crises resulting from inequality, poverty and unemployment. A "rising tide lifts all boats," the standard Western maxim (carried over from the New Deal era into the neoliberal age) maintains, making angry comparisons between the Few's yachts and the Many's rowboats and rafts obsolete. "Expanding the pie," the conventional wisdom holds, abolishes the question of socioeconomic redistribution - of how the pie is shared out. "To escape any reevaluation," the French ecological writer Herve Kempf notes, "the oligarchy keeps repeating the dominant ideology according to which the solution to the social crisis is production growth. This is supposedly the sole means of fighting poverty and unemployment." Abundant data over the last three-and-a-half decades shows that economic growth does not in fact reliably undo those and other social evils. Besides being demonstrably false on its own terms, moreover, the reigning doctrine ignores growth's giant negative impact on an increasingly fragile environment. See Herve Kempf, How the Rich Are Destroying the Earth ( White River Junction, VT: Chelsea Green, 2007). For other useful reflections on growth ideology as the economic elite’s ecologically disastrous response to demands for economic justice, see William Greider, Come Home America: The Rise and Fall (and Redeeming Promise) of Our Country (New York: Rodale, 2009), 192-217; James Gustav Speth, The Bridge at the End of the World: Capitalism, The Environment, and Crossing from Crisis to Sustainability (New Haven, CT: Yale University Press, 2008), 46-66.
12 An abundance of recent data and observation demonstrates that even many of the most pessimistic climate scientists got it wrong when they started warning about global warming in the late 1980s and early 1990s. The carbon-emission problem is worse and quicker than anyone knew at the moment of its discovery. This is for the simple reason that “global warming is a huge experiment. We’ve never watched it happen before,” Bill McKibben observes, “so we didn’t know how it would proceed.” And “no one really knew where the red line was – it was impossible to really know in advance at what point you’d cross a tripwire and set off a bomb. Like, say, melting all the ice in the Arctic .” For quite a while, the experts seemed to think that that the tipping point was at 550 carbon dioxide parts per atmospheric million (double the historical norm of 275 parts per million.” The more accurate measure, recently discovered, is closer is closer to 350, a benchmark we have already passed. We are currently at 390 parts per million and projected to hit 650 before final collapse barring any fundamental change in our energy use patterns. And already, at 390 we have triggered a number of ominous and viciously circular warming-induced “feedback effects” that exacerbate the warming problem. The melting of Arctic ice “replace[s] a shiny white mirror” that reflects the suns rays back to space “with a dull blue ocean that absorbs most of those rays.” Inland glaciers and snowpacks in the Himalayas, Andes, Sierras, and Rockies are retreating, threatening local and global water and food supplies. They are “melting very fast, and within decades the supply of water to the billions of people living downstream may dwindle” The thawing out of artic tundra and icy ocean “calthrates” releases massive quantities of methane, a major heat-trapping and climate warning gas. Melting northern peat moss releases carbon in large amounts. Scientists have recently reported that northern marshes and ponds are staying unfrozen over the winter because methane is gurgling up from below. Beyond the massive amount of carbon we have extracted from the old earth and pumped into the new one (Eaarth) through our tailpipes and chimney, we are now setting off the planet’s own internal “carbon bombs.” We’ve caused it but “we’re not directly releasing that methane” and “we can’t shut it off.” To make matters worse, the heat-induced softening of permafrost and the drying up of peat moss opens new northern lands to oil drilling. As the last reservoirs of readily accessible petroleum run dry in a new era of “peak oil,” we will increasingly “rely on even more use of our most abundant fossil fuel, good old coal. And the certain result of using more coal will be…more global warming, since it’s the dirtiest of all fossil fuels, producing twice the carbon dioxide of oil.” Meanwhile the growing market for relatively inefficient bio-fuel production combines with warming to drive global deforestation, which exacerbates climate heating and triggers erosion, mudslides, and epic flooding. Climate heating allows certain beetles known to destroy certain trees to “overwinter” and thrive, to the detriment of forests, which become more vulnerable to fires, which themselves spew carbon into the air. The retreat of the Amazonian rainforest – the great “lungs of the planet” (currently “drying on its margins and threatened at its core”) is depriving Latin America and the U.S. corn belt of critically needed regular rainfall and removes one of the world’s great oxygenating carbon sinks (forests suck in carbon and breathe out oxygen). The “great boreal North America is dying in a matter of years.” The decomposition of forest is itself a great source of carbon release. The list and interplay of disastrous negative feedback loops like this goes on. And it is going on now: “global warming is no longer a philosophical threat, no longer a future threat, no longer a threat at all. It’s our reality” in ways that are “already wrecking thousands of lives daily” (xiii-xiv) in the poorest parts of the world where, where climate-related food crises and environmental collapse are most pressing and people have fewer defenses. The American State Department’s chief scientist projects famines related to climate change and likely to effect a billion people a time over the next decades.Global warming has created a resurgence of the deadly dengue fever in Southwest Asia ad Latin America – a consequence of the fact the mosquito which carries the dengue virus feed more heavily and hatch the virus more rapidly at higher temperatures. Bill McKibben, Earth: Making a Life on a Tough New Planet ( New York , 2010).
13 The term “exterminism” belongs to the great British radical historian Edward Palmer Thompson: “Notes on Exterminism: the Last Stage of Civilization,” New Left Review (May-June 1980). For Thompson, the term referred to a system bureaucratic mass annihilation behind the then escalating nuclear arms race between the U.S. and the Soviet Union – an irrational drift toward human self-elimination that defied standard Marxist notion of a rational historical teleology and progress through class struggle. While the threat of nuclear war remains alive and well in the post-Cold War era, the true irrational exterminism may well prove to be ecological. Possessed with means of destruction and hegemony that the historical Left's leading 19th century thinkers could hardly imagine, the "late capitalism" of the long multinational-corporate era seems as likely to be the gravedigger of humanity – a plague or cancer threatening the continued viability of the human experiment (not to mention the lives of numerous other species) – as the “midwife of socialism.” Thanks to the increasingly urgent ecological issue, its “[ecologically sustainable] socialism or barbarism if we’re lucky” (Istvan Meszaros).
14 McKibben. Eaarth.
15 Nicholas D. Kristof, “A Hedge Fund Republic ?” New York Times, November 17, 2010 at http://www.nytimes.com/2010/
16 Edward N. Wolff, Top Heavy: A Study of Increasing Wealth Inequality in America (New York: Twentieth Century Fund, 1995), 21-25.
17 Pallavi Gogoi, ““Where are the Jobs? For Many Companies, Overseas,” Associated Press, December 28, 2010, athttp://news.yahoo.com/s/ap/
18 Jack Rasmus, “Obama's Horns & Predictions 2011,” Z Magazine (January 2011) at http://www.zcommunications.
19 Michael Powell, “Profits are Booming, Why Not Jobs?” New York Times, Section 4, January 9, 2011. http://www.nytimes.com/
20 Gogoi, “Where are the Jobs?”
21 Jeff Faux, The Global Class War: How America’s Bipartisan Elite Lost Our Future and What It Will Take to Win it Back (New York: Wiley, 2006), 168.
22 Paul Krugman, “The Competition Myth,” New York Times, January 24, 2011. Former U.S. labor secretary Robert Reich spoke in similar terms on the “Public” Broadcasting System’s New Hour, counseling Obama to “not be seduced into thinking that the interests of big business are the same as the interests of the American economy, or, for that matter, the interests of American workers.” As Reich explained: “Big companies like General Electric and others have made profits recently, indeed, for the last 30 years, but more intensively over the last 10 years, by actually cutting their payrolls, by laying people off, by reducing wages and benefits…. after 30 years of outsourcing, of shaving payrolls, of putting pressure on unions to provide wage concessions and benefit concessions, and also doing all sorts of things that reduce, automate, that use the technologies to get rid of jobs, most Americans just simply are not part of the global economy in terms of American prosperity any longer.” NEED SOURCE. Some Obama fans applauded Immelt’s appointment, claiming that he represents a company that actually produces goods rather than just being a parasitic manipulator of paper, financial wealth. But this praise was misplaced since, as Krugman added, “G.E. derives more revenue from its financial operations than it does from manufacturing.”
23 For related and further reflections on the address and Obama’s relationship to the U.S. corporate and financial sectors, see Paul Street , “State (of) Capitalist Absurdity: Reflections Before and After Obama’s State of the Union Address,” ZNet (January 28, 2011) at http://www.zcommunications.
24 Sachs is quoted in Gogoi, “Where are the Jobs?”
25 Noam Chomsky, Introduction to Anton Pennekoek, Workers’ Councils ( Oakland , CA : AK Press, 2003), x.
26 Faux, Global Class War, 187-190.
27 Frederick Balfour and Tim Culpan “The Man Who Makes Your Iphone,” Business Week, September 9, 2010 athttp://www.businessweek.com/
28 Karl Marx and Frederich Engels, The Communist Manifesto (New York: Norton, 1988), 58, 72.
29 Joel Bakan, The Corporation: The Pathological Pursuit of Profit and Power ( New York : Free Press, 2004), 36-37. This is know as “‘the best interests of the corporation’ principle,” whereby “Corporate social responsibility is thus illegal – at least when its genuine.”
30 Among many sources, see Barry Bluestone and Bennett Harrison, The Deindustrialization of America (New York: Basic Books, 1982), 140-149 and passim; Barry Bluestone and Bennett Harrison, The Great U-Turn: Corporate Restructuring and the Polarizing of America(New York: Basic Books, 1988), 3-13 and passim; Samuel Bowles, David Gordon, and Thomas E. Weiskopf, Beyond the Wasteland: A Democratic Alternative to Economic Decline (Garden City, NJ: Anchor Press/Doubleday, 1983); David Gordon, Fat and Mean: the Corporate Squeeze of Working Americans and the Myth of Managerial “Downsizing” (New York: Free Press, 1996), 80.
31 See Sugrue, Origins of the Urban Crisis, 125-152; Paul Street , Racial Oppression in the Global Metropolis: A Living Black Chicago History ( New York : Rowman & Littlefield, 2007), 117-118; Michael Brown et al., Whitewashing Race: The Myth of a Color-Blind Society( Berkeely , CA : University of California-Berkeley Press, 2003), 90-92.
32 Faux, Global Class War, 87.
33 Marx and Engels, Communist Manifesto, 66..
34 Charles Derber, “Capitalism: Big Surprises in Recent Polls,” Common Dreams (May 19, 2010) at http://www.commondreams.org/