January 13, 2014 archive

A Left Agenda

I frequently read (and hear) a question that goes something like this-

ek, it’s all very well that you are here documenting the atrocities and I understand the goals of your sites and writing are modest indeed, simply to provide a platform for others and encourage revolution in the small things, but I’m at my wits end!  What do I do?

To which my answer is invariably- stop rewarding bad behavior.

As your Mother said, this hurts me more than it does you.  The path of least resistance is appeasement and compliance, but spoiling pets, children, and politicians is the coward’s course.

The problem of resistance to the oligarchy

Ian Welsh

2014 January 12

You can also get change through making the lives of the rich unpleasant, or making them fear for their very lives.  Social peace has often been bought by treating ordinary people better, when the rich genuinely feared the army and police couldn’t protect them.

But if the elites think that their security forces can protect them, and especially if they live in a bubble where they never have to face people whose lives they have made miserable, as is the case for most of our rich, who fly by private jet, travel about the city in helicopters or chauffered limos and live in gated enclaves; and if you can’t cost them any real money, why should they let you have any of the surplus of society beyond the bare minimum you need to remain useful to them? (Not to survive: as the cutting of food stamps in the US indicates, that’s not a priority for the oligarchy.)

Be clear that distribution of goods and money in an economy is almost entirely unrelated to any ethical idea of merit or deservedness.  The bankers, amongst the best paid people in the world economy, destroyed far more money than they earned in the 00s, and yet are still paid billions of dollars in bonuses every year.  They receive the money they do because they had the power to make the government make them whole after they lost everything, then the power to make the government make them even richer than before.  They control a bundle of valuable rights from the state: the right to borrow at prime, the right to value assets to model (fantasy); the right to huge leverage; and the right lend, which is how money is actually created in our economy (aka. they can print money.)

This is why they’re rich: not because they produce net value: they destroy value; but because they have the power to make the government do what they want it to do and to make it not prosecute them when they break the laws, and even to change the laws so they can take even more money.

Distribution in an economy is based, virtually entirely, on power. A group receives goods and money because it can force others to give it to them.  The libertarian fantasy of free markets and free choice is exactly that. They don’t exist today, they have rarely existed in the past, and to the extent they have existed they owe their existence entirely to government making sure they exist.  As soon as any group gains enough power to take over government, they do, and free markets cease to exist because they make the government give them special rights,whether those are rights to print money, borrow low and lend high, or so-called intellectual property rights that let them continue to profit from ideas created 80 years ago.

Power, power is all that matters.  Even distribution, or something close to it, happens only when there is relatively equality between groups in society or there is an existential threat to society which requires the willing participation of all parts of society.

If you ever want to see raises for ordinary people again, you must figure out how they will become powerful: and power means “what can they do to hurt people who cross them, hurt them really, really badly.”


On This Day In History January 13

Cross posted from The Stars Hollow Gazette

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

January 13 is the 13th day of the year in the Gregorian calendar. There are 352 days remaining until the end of the year (353 in leap years).

It is still celebrated as New Year’s Eve (at least in the 20th & 21st centuries) by countries still using the thirteen day slower Julian calendar (Old New Year).

On this day in 1898, French writer Emile Zola’s inflammatory newspaper editorial, entitled “J’accuse,” is printed. The letter exposed a military cover-up regarding Captain Alfred Dreyfus. Dreyfus, a French army captain, had been accused of espionage in 1894 and sentenced in a secret military court-martial to imprisonment in a South American penal colony. Two years later, evidence of Dreyfus’ innocence surfaced, but the army suppressed the information. Zola’s letter excoriated the military for concealing its mistaken conviction.

Dreyfus Affair

Captain Alfred Dreyfus was a Jewish artillery officer in the French army. When the French intelligence found information about someone giving the German embassy military secrets, anti-semitism seems to have caused senior officers to suspect Dreyfus, though there was no direct evidence of any wrongdoing. Dreyfus was court-martialled, convicted of treason and sent to Devil’s Island in French Guiana.

LL Col. Georges Picquart, though, came across evidence that implicated another officer, Ferdinand Walsin Esterhazy, and informed his superiors. Rather than move to clear Dreyfus, the decision was made to protect Esterhazy and ensure the original verdict was not overturned. Major Hubert-Joseph Henry forged documents that made it seem that Dreyfus was guilty and then had Picquart assigned duty in Africa. Before leaving, Picquart told some of Dreyfus’s supporters what he knew. Soon Senator August Scheurer-Kestner took up the case and announced in the Senate that Dreyfus was innocent and accused Esterhazy. The right-wing government refused new evidence to be allowed and Esterhazy was tried and acquitted. Picquart was then sentenced to 60 days in prison.

Émile Zola risked his career and even his life on 13 January 1898, when his “J’accuse“, was published on the front page of the Paris daily, L’Aurore. The newspaper was run by Ernest Vaughan and Georges Clemenceau, who decided that the controversial story would be in the form of an open letter to the President, Felix Faure. Émile Zola’s “J’Accuse” accused the highest levels of the French Army of obstruction of justice and antisemitism by having wrongfully convicted Alfred Dreyfus to life imprisonment on Devil’s Island. Zola declared that Dreyfus’ conviction came after a false accusation of espionage and was a miscarriage of justice. The case, known as the Dreyfus affair, divided France deeply between the reactionary army and church, and the more liberal commercial society. The ramifications continued for many years; on the 100th anniversary of Zola’s article, France’s Roman Catholic daily paper, La Croix, apologized for its antisemitic editorials during the Dreyfus Affair. As Zola was a leading French thinker, his letter formed a major turning-point in the affair.

Zola was brought to trial for criminal libel on 7 February 1898, and was convicted on 23 February, sentenced, and removed from the Legion of Honor. Rather than go to jail, Zola fled to England. Without even having had the time to pack a few clothes, he arrived at Victoria Station on 19 July. After his brief and unhappy residence in London, from October 1898 to June 1899, he was allowed to return in time to see the government fall.

The government offered Dreyfus a pardon (rather than exoneration), which he could accept and go free and so effectively admit that he was guilty, or face a re-trial in which he was sure to be convicted again. Although he was clearly not guilty, he chose to accept the pardon. Émile Zola said, “The truth is on the march, and nothing shall stop it.” In 1906, Dreyfus was completely exonerated by the Supreme Court.

The 1898 article by Émile Zola is widely marked in France as the most prominent manifestation of the new power of the intellectuals (writers, artists, academicians) in shaping public opinion, the media and the state.

Naked Capitalism

The Power Parable

Ian Welsh

January 9, 2014

Imagine that you have crawled out of the desert. You have not drunk in days, and if you do not have water soon you will die. Only one man has water, but he will not give it to you for free, he wants to be paid.

What is that water worth? To put it another way, what is your life worth?

One answer is that your life is worth everything you will ever earn, minus the cost of subsistence. The water-seller might say “if you die, you will never earn anything again. Therefore everything you earn is because I gave you water. So this water is worth your life’s income.”

Now you might not find life worth living under these circumstances, which amount to slavery. If the water-seller had many possible customers crawling out of the desert, he might find that too many people would rather die than pay, and might reduce his price somewhat to maximize his profit. If one quarter of people would rather die than pay, he might reduce the price to two-thirds of his customers life earnings, and see if most of them were willing to pay that.

Over time he might find that, knowing he’d take two-thirds, once saved his customers wouldn’t work very hard: just enough for subsistence and some alcohol, perhaps. So he might continue to experiment-how much could he take to maximize his profits?

But there is another possibility, back at the original bargain “your earnings, or your life?” What if you decide to take the water whether the water-seller wants you to have it or not? What if you’re willing to use violence? You’re weak, you might not win and if you lose you’re dead, but you might win and if you do you don’t have to pay anything. And if you win, you could start selling water yourself.

The water-seller has to take this into account. Which means he either has to reduce the price he charges so it’s not worth people trying to kill him, or he has to spend some of his profits on security. Thugs, pretty much.

But why pay for his own thugs? Why not pay government, and use its thugs? Everybody chips in some money, the government creates police and an army, and they make sure that customers don’t just take the water. They also solve another problem we hadn’t mentioned, making sure that people keep paying up later once they are no longer dying for thirst. The government enforces the water-seller’s contracts.

It should be pointed out that the water-payer is getting a lot more out of the governments thugs than most ordinary people are. Even if we assume the new police enforce all contracts and stop violence against everyone (as best they can), this guy has a lot more enforcement needs and a lot more people who want to kill him than an ordinary person. So even if everyone pays, say, 10% of income for the police, our water-seller is doing well out of this.

But why should the water-seller pay 10%? If the government has politicians whose money is separate from the government’s money, who can’t just use it as their purse, why not give them personally, say, 2% in gifts. That’s enough money to make them, personally, filthy rich. And they can lower water-seller taxes (after all, he saves lives and is a lynchpin of the economy) and raise them on other people. With a bit of work he might not pay any direct taxes, only gifts, and the rest of the population will pay for the enforcement of his contract rights. Yes, that reduces the post-subsistence money he gets from the people whose lives he saved, but for every dollar spent on enforcement he would have only gotten two-thirds anyway.

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