Louis Proyect: The Unrepentant Marxist

January 30, 2008

Capitalist pig of the month

Filed under: capitalist pig,real estate — louisproyect @ 8:59 pm

Ira Rennert: capitalist pig of the month

This may be just the first in a continuing series based on the time I have available and on the availability of suitable candidates—I imagine that the second condition will be a lot easier to meet. It is written in the spirit of Keith Olbermann’s “Worst Person in the World” awards that he hands out on a fairly regular basis on his MSNBC cable show. As you can imagine, Bill O’Reilly is a multiple recipient. My approach will be somewhat different. I am far more interested in highlighting the sins of the super-rich, who are after all the ones who pay the piper. I should add that Ira Rennert received “The Awful Truth” award of the year in 1999 from Michael Moore (more below), so in a sense I am following in both of their footsteps.

As some of you will recall, I have referred to the Real Estate section of the weekly New York Observer as a kind of scandal sheet in which various shady characters are reported as buying or selling hugely expensive apartments. This included Jack Barnes and Mary-Alice Waters, the two leaders of the Socialist Workers Party, who sold a loft near party headquarters in the West Village last year for nearly 2 million dollars. The article was titled “Communists Capitalize on Village Sale—Get $1.87 M. for Loft”.

Earlier this month, Max Abelson, the Observer’s real estate reporter scooped the Barnes and Waters transaction, reported on another big sale (“Big Deal! Big-Hearted Baron Ira Rennert Buys Daughters Spreads in 740 Park, 778 Park for $60 M.-Plus)

Brooklyn-born Ira Rennert has an oceanic $185 million Hamptons compound, a few infamous smelting plants in Peru and Missouri, and a billion-dollar fortune from junk bonds and Hummer vehicles.

He also has something of a generous streak: Two sources told The Observer that Mr. Rennert has bought two of New York’s most expensive apartments, at two of the best-bred co-op buildings, for his two daughters…

Mr. Rennert, meanwhile, has his own multiunit spread nearby at 625 Park Avenue, plus his 63-acre oceanfront property—“the largest home in America,” The New York Times wrote in 1998. He’s also been known for a different kind of excess: According to a 2003 BusinessWeek article, the E.P.A. has ranked his Renco Group—a conglomerate based on mining and smelting—as the country’s 10th-biggest polluter.

The news that this scumbag is buying 60 million dollars worth of apartments for his useless offspring goes hand in hand with the fact that his corporation is the country’s 10th biggest polluter. With one he poisons the air and water and with the other helps turn Manhattan into a theme park for Eurotrash and hedge fund managers.

Ira Rennert’s 78,000 square foot house

Although the Observer does not mention it, there was quite of resistance to Rennert’s 78,000 square foot weekend retreat from his Hamptons neighbors, including the rich and powerful. On August 24, 1998, the Scottish Daily Record reported:

Eccentric Ira Rennert’s massive home is set to be twice the size of the White House when it is completed.

But millionaire locals, who include Steven Spielberg, have dubbed the plans “a monstrosity” and vowed to fight them every step of the way. Rennert, 63 – who made his fortune building Humvee military jeeps – calls his proposed palace Fair Field.

The 100 million pounds monster building is set to take up 63 acres on ocean-front land.

It will have 39 bathrooms, 29 bedrooms, a kitchen the size of a restaurant, garage space for 200 cars and a huge power plant.

And if the residents get bored, there will be two tennis courts, two bowling alleys, a 164- seat cinema, a basketball court and two outdoor sports pavilions.

But neighbours in the posh Hamptons area of New York state have set up a pounds 50,000 fighting fund in a bid to halt the project.

Movie director Spielberg is being joined by tycoons Mortimer Zuckerman and Donald Trump in his opposition to the plans.

When you have Donald Trump lining up against you on the basis that you are just too ostentatious and vulgar, then you have really broken free from the earth and sailed straight into the stratosphere.

As might be expected, a target as tempting as Ira Rennert invited the scrutiny of Michael Moore, who also has finely tuned antennae for capitalist pigs. On November 13, 1998, the NY Daily News reported on Rennert’s bid to prevent Moore from documenting his excesses.

A rich industrialist who is building one of the biggest private houses in America went to court yesterday to stop “Roger and Me” film maker Michael Moore from documenting his edifice complex.

Millionaire financier Ira Rennert filed a lawsuit to bar the ambush interviewing that is Moore’s hallmark, as the mischievous movie maker prepares a satire about Rennert whose 25-bedroom, 39-bathroom oceanfront digs has even his wealthy neighbors on Long Island’s East End alarmed.

Yet part of the suit, which was filed Tuesday in Manhattan Supreme Court, was abruptly withdrawn yesterday afternoon by Rennert.

The complaint had contained a sworn affidavit from Joanne Rullan, a receptionist at The Renco Group, the holding company for Rennert’s business empire, in which she charges she was assaulted by Moore on Nov. 5.

In 2000, Rennert made a bid to take over the RJB coal mining company in Great Britain. As The Independent reported in an article titled “Sex Offender Heads Renco Bid For Rjb”

on August 27 of that year, predatory investments seem to go hand in hand with sexual predation:

ONE OF the top executives at US company Renco Group, now in talks to take over RJB Mining, is a convicted sex offender who has just completed three years’ probation after admitting “sexual misconduct” with a teenager applying for a job with the company.

Marvin Koenig, the 70-year-old executive vice president and right-hand man to the group’s controversial founder, Ira Rennert, pleaded guilty to two counts of sexual misconduct concerning an incident in 1995.

Mr Koenig lured Pearl Higgins (not her real name) into his offices in New York’s Rockefeller Center one evening, after having offered her a $ 10 an hour clerical job.

Manhattan District Attorney papers allege that Mr Koenig pounced on her with a knife, forcing her to have oral sex before raping her on the boardroom table. The petrified teenager called the police and Mr Koenig was arrested on three counts of rape in the first degree, a class B felony which carries up to 25 years in prison.

Showing the utter disjunction between professed religious beliefs and one’s ethical behavior, Rennert is an orthodox Jew. As such, it should not come as any big surprise that he is a supporter of the most rightwing parties and causes in Israel. As the Zionist state becomes more and more isolated in the world, it finds that it can only rely on orthodox Jews and Christian fundamentalists for hard core support.

On February 10, 2003, the Jerusalem Report revealed how Rennert and other wealthy American Jews (including the equally disgusting Ronald Perlman who I reported on here) flout Israeli laws in order to fund their favorite rightwing politicians:

Six names emerge repeatedly in conversations with those in the know about American funding of Israeli politics: Edgar and Charles Bronfman, former Seagram’s owners; Slim-Fast diet food founder S. Daniel Abraham; Saban, cosmetics heir-philanthropist Ronald Lauder, and Ira Rennert, chairman and CEO of The Renco Group, which specializes in metals and makes the HUMVEE all-terrain vehicle.

Edgar Bronfman, president of the World Jewish Congress, his brother Charles, a noted philanthropist (and former chairman of The Report), and Abraham (a former Report part-owner), have been involved in political efforts at the left side of the Israeli political spectrum, with people like Shimon Peres and Barak. In the past, Saban reportedly donated hundreds of thousands of dollars to the campaigns of both Barak and former defense minister Yitzhak Mordechai. (Edgar Bronfman, Saban and Abraham did not respond to repeated interview requests.)

Lauder is close to former prime minister Benjamin Netanyahu, and reportedly paid the million-dollar-plus fee collected from the 1996 Netanyahu campaign by U.S. mega-consultant Arthur Finkelstein. A spokeswoman for Lauder declined to comment on his current contributions or what he had done in the past. She told The Report via e-mail that “since Mr. Lauder won’t make campaign contributions in Israeli elections, he isn’t able to offer any commentary on what others may do.”

Rennert, who is known as a big financial supporter of right-of-center candidates and causes, often donating through NPOs, also declined to comment.

La Oroya, Peru: victims of Rennert’s pollution

Evidently, some religious leaders­—closer in spirit to the holy texts than Rennert—decided to appeal to his better instincts, a mission that seems inspired more by a desire to put pressure on the greedy slob than actually change his behavior. In a web-only article that appeared on the Nation Magazine website last June, Sara Shipley Hiles described how “Religious Leaders Challenge a Polluter“. It is worth quoting in its entirety.

It’s a long way from the thin air of an impoverished mountain village outside Lima, Peru, to the tony atmosphere of the Hamptons. But a group of religious leaders from Peru recently traveled to New York to tell billionaire industrialist Ira L. Rennert that even if he can sleep at night, comfortably ensconced in his 110,000-square-foot estate in Sagaponack, God is watching.

The clerics want Rennert to improve health care and dramatically decrease emissions at a metals smelter in La Oroya, Peru, a town high in the Andes Mountains where thousands of children are suffering from lead poisoning. The smelter, known as Doe Run Peru, is a subsidiary of Rennert’s $2.4 billion private holding company, the Renco Group.

Peruvian Roman Catholic Archbishop Pedro Barreto publicly called upon Rennert, a well-known philanthropist and supporter of Orthodox Jewish causes, to honor his religious faith and work harder to solve La Oroya’s pollution problems.

“Our main purpose was to invite Ira Rennert to become a leader in social responsibility, under the assumption this is an ethical and moral issue,” Barreto said, during the group’s three-city visit to the United States this month.

Rennert declined to meet with Barreto and his colleagues, referring them to a local representative for the smelter in Lima. The religious delegation–which included an evangelical pastor, a Jewish leader and several Catholic nuns–instead visited with various religious agencies during the stop in New York City.

Calls to Rennert’s office at Rockefeller Center asking for comment on the visit were referred to Victor Belaunde, a Doe Run Peru spokesman in Lima. Belaunde said that company officials met with the religious leaders June 8 in Lima and updated them on ongoing environmental improvements.

Company officials claim Doe Run Peru has already committed more than $107 million to clean up the smelter in the decade since Renco acquired the facility. The company pays $1 million annually to fund a health program run by the government’s health ministry, Belaunde said. He added that the smelter is now in compliance with Peruvian standards for lead emissions.

Despite these investments, a recent study by St. Louis University scientists found that 97 percent of children in La Oroya are lead-poisoned, a condition that can cause mental and physical deficiencies. And a new report from LABOR, a Peruvian non-profit group, found that emissions of lead, arsenic and sulfuric acid have actually increased in the past two years, according to Friends of La Oroya, a group supporting the religious leaders’ delegation.

The city of 33,000 people has been declared one of the world’s ten most polluted places by the Blacksmith Institute. Visitors to La Oroya first notice that the surrounding valley looks like a bomb crater, stripped bare of vegetation by acid rain. Then they notice the massive Doe Run smelter complex, which bathes city in choking fumes and toxic dust that contains cadmium, arsenic and lead.

To combat the dust, Doe Run organizes cadres of women to wash public streets and encourage children to wash their hands. The company has delayed some mandatory environmental work that was originally required to be completed in 2006. Now the work is set to be done by 2009, but even then, according to the company’s own study, many children in the town will still have blood-lead levels well above the acceptable standard.

“In the last few years the pollution in the air is worse, the soil has become infertile and the water has become polluted,” said Sister Mila Diaz, a Dominican nun from La Oroya who was part of the religious delegation. “We don’t want to fight with the company. We don’t want the company to close their doors. What we want is for them to comply with the promise they made to clean the air.”

The religious leaders’ tour also stopped in St. Louis, where Doe Run Peru’s former parent company, Doe Run Resources, has its headquarters. Company officials there declined to meet with the group, saying that Doe Run Peru is no longer its subsidiary; the Peruvian company now reports directly to Renco.

In addition, the group visited Herculaneum, Mo., where Doe Run operates the largest lead smelter of its kind in the United States. Longtime environmental activist Tom Kruzen took the group on a “toxic tour” to see the neighborhood where Doe Run was forced to buy out more than 140 homes surrounding the plant.

“You can pray all you want,” Kruzen said of Rennert, “but if you’re doing bad things to people, or if your endeavors do bad things to people, then you’re not a moral person.”

Rennert has grown rich using a formula of buying dirty companies, taking out steep loans and paying himself princely dividends, as documented in articles in Forbes and Business Week. Several of his companies have filed for bankruptcy, allowing Rennert to buy back assets for pennies on the dollar. Rennert’s empire of mining and manufacturing firms also includes AM General LLC , the maker of HUMVEE military vehicles and the gas-guzzling Hummer, as well as a magnesium producer and a steel manufacturer.

The wealthy financier also has given widely to charitable and civic causes. Rennert and his wife, Ingeborg, have contributed to restoring the Western Wall Tunnels in Jerusalem, where the visitor’s center bears the name “The Ingeborg and Ira Leon Rennert Hall of Light.” New York University has an endowed professor of entrepreneurial finance in Rennert’s name, and the Rennerts donated between $1 and $1.9 million to the World Trade Center Memorial .

At one time, Rennert lent his name to the Torah Ethics Project, an effort to remind Orthodox Jews of the importance of “living in accordance with the highest ethical standards.” A statement on the project’s website urges moral behavior in all business and personal matters that “adds luster to God’s sacred name.”

Rennert’s supporters have included Elie Wiesel, the Nobel Peace Prize-winning Holocaust survivor. At the prestigious Fifth Avenue Synagogue in New York, where Rennert is chairman, Rabbi Yaakov Kermaier defended Rennert’s reputation.

“I’m not really familiar with any of his business operations,” Kermaier said in an interview. “I know him as a person of extraordinary generosity and unimpeachable personal integrity.”

Congratulations, Ira Rennert, you are the Unrepentant Marxist’s capitalist pig of the month.

UPDATE: Marxmail subscriber Colin Brace wrote today: Louis, I heartily endorse your nomination. Rennert is a world-class bastard. Here is what I wrote several years ago on my short-lived blog about the activities of his company Doe Run in Peru.

January 29, 2008

The Crime Novels Of Patricia Highsmith

Filed under: Film,literature — louisproyect @ 2:41 pm

(Swans – January 28, 2008) Well-read Americans might not be familiar with the name Patricia Highsmith. At least this was the case for me before I stumbled across the movie Ripley’s Game on the IFC cable channel a couple of years ago.

Patricia Highsmith

Directed by Liliana Cavani and starring John Malkovich as Tom Ripley, a professional thief, it was quite unlike anything I had ever seen. Ripley, an American émigré living in rural France, pressures Jonathan Trevanny, a British frame shop owner in the local village who has never committed a crime in his life, to carry out a series of hits on Ripley’s enemies in the Italian mafia. Since Trevanny is suffering from leukemia, Ripley reasons that he would be amenable to killing complete strangers for a handsome fee in order to help meet family expenses after his death. Ripley has another motive in recruiting Trevanny. At the start of the movie, Ripley overhears Trevanny describing his estate as typically nouveau riche and out of character with the French countryside. Further study on my part would reveal that the Ripley films, and the nonpareil novels they are based on, nearly always involve such class resentments at their core.

Eventually I discovered that Highsmith’s Ripley’s Game also provided the narrative for Wim Wenders’s The American Friend that featured Dennis Hopper as Tom Ripley and Bruno Ganz as the frame-maker Jonathan Zimmermann (a Germanized character in keeping with the film’s relocation to Rotterdam from rural France). Wenders took some liberties with Highsmith’s novels that are not quite successful in my view. The Ripley character seems more in keeping with Dennis Hopper’s public image rather than the fictional character. With a cowboy hat lodged permanently on his head, Hopper’s Ripley is much more macho than Highsmith’s character, whose epicene malevolence is rendered far more successfully in Cavani’s movie.

Since Ripley’s Game was such an outstanding film, I was persuaded soon afterwards to watch The Talented Mr. Ripley, based on a much younger Tom Ripley’s introduction to the criminal world. Starring Matt Damon as the title character, it involves Ripley’s introduction to the world of the haute bourgeoisie. Hired by a shipping magnate to persuade his playboy son to return home to America from Italy, Tom Ripley allows himself to become the son’s paid companion in a relationship that has strong homoerotic implications, another theme that is omnipresent in Highsmith’s novels. When Tom Ripley learns that Dickie Greenleaf, the boating heir, has plans to dump him, he murders him and assumes his identity. Damon, like Malkovich, is adept at capturing the utterly cynical and amoral psyche of this most intriguing character.

Based on a Highsmith novel

As so often happens with excellent movies like Ripley’s Game, I make an effort to read the novel upon which the screenplay is based in order to find out more about the author. Eventually I discovered that Highsmith’s novels have inspired some of the finest movies over the past 50 years including her first, which provided the scenario for Alfred Hitchcock’s Strangers on a Train. Like the Ripley novels, Strangers on a Train involves homoerotic themes and a penetrating study of the lifestyles of the rich and infamous. Unlike the movies, however, the novels are blessed by Highsmith’s narrative voice, which is an utterly distinct one as demonstrated by this excerpt from Strangers on a Train.

That evening, Charles Anthony Bruno was lying on his back in an El Paso hotel room, trying to balance a gold fountain pen across his rather delicate, dished-in nose. He was too restless to go to bed, not energetic enough to go down to one of the bars in the neighborhood and look things over. He had looked things over all afternoon, and he did not think much of them in El Paso. He did not think much of the Grand Canyon either. He thought more of the idea that had come to him night before last on the train. A pity Guy hadn’t awakened him that morning. Not that Guy was the kind of fellow to plan a murder with, but he liked him, as a person. Guy was somebody worth knowing. Besides, Guy had left his book, and he could have given it back.

Continue reading here

January 28, 2008

Cockburn contrarianism

Filed under: Alexander Cockburn — louisproyect @ 8:15 pm

As many of you are no doubt aware, Alexander Cockburn has cultivated the image of contrarian for many years now. This is the stock-in-trade of both Cockburn and Christopher Hitchens, at least when he was part of the left. To outrage a reader serves the same purpose as a shock jock steaming up a listener; it is money in the bank. The philosophy seems to be “I don’t care what people say about me, as long as they are saying something.”

I suppose that it was only a matter of time before Alexander hooked up with Spiked Online, a group of ex-radicals who used to be known as the Revolutionary Communist Party (RCP) in Great Britain in the 1980s and 90s and who were also past masters of contrarianism. Led by a sociology professor named Frank Furedi, they are now responsible for a website called Spiked Online that is meant to outrage but barely causes a stir nowadays, at least on the left. After they reconfigured themselves as Cato Institute type libertarians, the average reaction would be something like “So Spiked is for nuclear power, what else is new? Dog bites man?” Of course, if you defend such positions using Marxist jargon, it will get a stir from self-declared Marxists like me.

Alexander shares Spiked Online’s outlook on global warming, as a conspiracy of fear-mongering environmentalists standing in the way of “progress”, which to most reasonable people seems to be mostly about corporate profits. Ten years ago when the RCP railed against the Green movement, it was in the name of the Communist Manifesto. After all, if Marx said that the bourgeoisie has played a most revolutionary role, who would want to stand in the way of an onslaught on feudal values. From the perspective of the RCP, the tree-huggers were trying to turn back the clock to the Dark Ages and who wants to live with the bubonic plague and outdoor plumbing.

James Heartfield: Spiked Online’s resident Marxist

Crucial to both Alexander and Spiked Online–even today–is the notion that global warming alarmism is a conspiracy against developing countries. Even though Spiked Online organizes conferences with some of the most vicious corporate sharks known to mankind, they still have the chutzpah to talk out of the left side of their mouth. James Heartfield, one of the few remaining self-avowed Marxists affiliated with Spiked Online, is a past master of carrying the banner of the global poor. In a December 18, 2007 article he writes:

The new climate deal struck at Bali seems to be about letting First World countries offset their industrial growth by persuading less developed countries to forego growth, and enlarge their forest reserves instead. In effect the West will use its financial leverage to keep the natives sitting in darkness and its own monopoly on technology intact.

I have to chuckle about the reference to “natives sitting in darkness”. This is utterly shameless but in keeping with the Spiked Online worldview. For them, “growth” is nothing but capitalist growth but they don’t quite have the guts to actually come out and use the words. In an odd way, they remind me of how the word “capitalism” was hardly ever used in the early 1960s. The preferred words were “free enterprise”. To use the word “capitalism” suggested that you were some kind of commie since it was commies who turned it into a dirty word. With the advent of neo-conservatism, the word capitalism has been dusted off and put on a pedestal. Who knows, with the way things have been going lately with home foreclosures, it might be put back into the closet.

If you go to the Spiked Online website, you will see an article by Alexander Cockburn titled “Intellectual blasphemy: the witch-hunting of a climate change sceptic“. “Witch-hunting” is a reference to articles written by George Monbiot and to a lesser extent by me. While I don’t have Monbiot’s clout, I do have credibility with the hard-core revolutionary left. For reasons known only to Cockburn, he has decided to stick his thumb in our eye by hanging out with Spiked Online (while curiously never referring to their sponsorship of a talk he gave recently in London) and by holding up a regular contributor to Lydon Larouche’s slimy journal as an authority on global warming. (It is brimming with global warming denialism, paeans to nuclear power–all couched in Larouche’s bizarre mixture of the New Deal and fascist-type demagogy.)

In the course of restating his views on global warming, Alexander demonstrates a certain discomfort with his critics on the left:

There was a shocking intensity to their self-righteous fury, as if I had transgressed a moral as well as an intellectual boundary and committed blasphemy. I sometimes think to myself, ‘Boy, I’m glad I didn’t live in the 1450s’, because I would be out in the main square with a pile of wood around my ankles. I really feel that; it is remarkable how quickly the hysterical reaction takes hold and rains down upon those who question the consensus.

This experience has given me an understanding of what it must have been like in darker periods to be accused of being a blasphemer; of the summary and unpleasant consequences that can bring. There is a witch-hunting element in climate catastrophism. That is clear in the use of the word ‘denier’ to label those who question claims about anthropogenic climate change. ‘Climate change denier’ is, of course, meant to evoke the figure of the Holocaust denier. This was contrived to demonise sceptics. The past few years show clearly how mass moral panics and intellectual panics become engendered.

My suggestion to Alexander is to find some other line of work if he doesn’t like being on the receiving end of a sharp polemical attack. Indeed, for somebody who is associated with a newsletter called “Counterpunch”, he seems rather delicate in the face of a well-placed jab. Has Alexander become flabby in his old age? One can certainly understand how the life of a country gentleman in Northern California might have taken off the edge he once had. If “summary and unpleasant consequences” are too much of a cross to bear, perhaps he might consider writing about food and wine. There is a large market for such journalism as I understand it.

Agrees with Alexander Cockburn on how to avoid another Virginia Tech

For another example of Alexander’s shock jock mentality, you can also turn to an article he wrote shortly after the shootings at Virginia Tech. His recommendation? If the students had been properly armed, the tragedy would have been averted:

The answer is to disband SWAT teams and kindred military units, and return to the idea of voluntary posses or militias: a speedy assembly of citizen volunteers with their own weapons. Such a body at Columbine or Virginia Tech might have saved many lifes [sic]. In other words: make the Second Amendment live up to its promise.

If Alexander found Spiked Online to be a kindred spirit when it comes to global warming, he found another strange bedfellow in ultraright rock musician Ted Nugent who blamed gun control laws on the slaughter:

Pray for the families of victims everywhere, America. Study the methodology of evil. It has a profile, a system, a preferred environment where victims cannot fight back. Embrace the facts, demand upgrade and be certain that your children’s school has a better plan than Virginia Tech or Columbine. Eliminate the insanity of gun-free zones, which will never, ever be gun-free zones. They will only be good guy gun-free zones, and that is a recipe for disaster written in blood on the altar of denial. I, for one, refuse to genuflect there.

In making the case for posses, Cockburn brings up a law that might appear obscure to Counterpunch readers, although he used to raise it with some frequency in the 1980s when he was flirting with the militias in Montana, Michigan and elsewhere:

The left complain about SWAT teams, but doesn’t see that the progressives bear a lot of responsibility for their rise. If you confer the task of social invigilation and protection to professional janissaries–cops — and deny the right of self and social protection to ordinary citizens, you end up with crews of over-armed thugs running amok under official license, terrorizing the disarmed citizens. In the end you have the whole place run by the Army or the federalized National Guard, as is increasingly evident now with the overturning of the Posse Comitatus laws forbidding any role for the military in domestic law enforcement.

The Posse Comitatus laws were passed by Congress in 1878 and as Alexander points out were intended to forbid “any role for the military in domestic law enforcement”. Overturning this law would open the door to military dictatorship as he points out in another Counterpunch article, in this case referring to police brutality during the Seattle protests in 2000:

What happened in Washington was a replay of similar cop mayhem in Seattle last December. It’s now emerged that a big factor in cop violence was the US Army’s Delta Force ­ whose presence in Seattle was a clear violation of the Posse Comitatus Act of 1878, forbidding the US military any role in domestic law enforcement. This ban is increasingly a dead letter. The Delta Force was at Waco and came to Seattle under the pretext that there might be terrorist bio-chem assaults.

I never paid much attention to Alexander’s harping on the Posse Comitatus law of 1878 except to note that an ultrarightist named Gordon Kahl ran a would-be fascist outfit called Posse Comitatus in the early 1980s. He and his followers believed that they had the right to withhold their taxes from a Federal Government that they labeled as a “Synagogue of Satan under the 2nd plank of the Communist Manifesto.” Sigh, if only that were true.

It was only yesterday that I discovered the meaning of the 1878 Posse Comitatus law that Alexander holds close to his bosom. Indeed, the year that it was passed by Congress is a dead giveaway.

T.J. Stiles’s “Jesse James” is a masterful study of the outlaw that places him in the context of the Civil War and Reconstruction. While it is not made much of in the typical Hollywood film on the U.S.’s most famous old west bandit, including the latest starring Brad Pitt, Jesse James was a so-called “bushwhacker”. The bushwhackers were pro-slavery guerrillas operating in Missouri, a state that permitted slavery until the beginning of the Civil War. In James’s first train robbery, his gang wore Ku Klux Klan hoods. Stiles’s draws upon many scholarly accounts of the period to make his case that Jesse James was basically a white supremacist, including Eric Foner’s 500 page book on Reconstruction.

In the penultimate chapter titled “Assassins” that describes James’s last fling at robbery before he was killed by Robert Ford, there’s an account of an abortive attempt to arrest the bandit in his hideout in Kentucky. A posse led by a U.S. Marshal named W.S. Overton had tracked Jesse James down and was all set to storm the farmhouse where he and his brother lied in wait. But at the last minute, the lawmen withdrew. It turns out that they could not get an arrest warrant from local authorities. Here is Stiles’s explanation for the failure:

Thoroughly stymied, Overton went back to Major W.R. King of the army engineers; King promptly applied to Washington for troops to make the arrest. The matter landed on the desk of President Garfield himself, who referred it to the attorney general—who said that no soldiers would be forthcoming. He cited the Posse Comitatus Act of 1878 (actually a rider attached to an army appropriations bill). Passed at the insistence of resurgent anti-Reconstruction Democrats [like Jesse James himself], the act prohibited the use of the military in law enforcement, except in cases of insurrection. The law largely stripped the federal government of its police powers.

In other words, the Posse Comitatus law was designed to help turn the South into a terror state run by the Ku Klux Klan. One of the main goals of the Democrats and the Liberal Republicans in the 1876 election was rapprochement with the plantation-owners who would be solid allies in the persecution and super-exploitation of the freed slaves. In order to make this happen, it was necessary to keep the Federal Army out of the South.

It must be said that Jesse James was completely aware of the political fights taking place over the South’s future. When he decided to rob the Northfield Bank in Minnesota in 1876, the target was selected with the understanding that Adelbert Ames was an bank officer. Adelbert Ames was the son-in-law of General Benjamin Butler, one of the leading military men who were committed to ending racist violence during Reconstruction. Adelbert Ames was a northern General in the Civil War himself and appointed by Congress to be provisional Governor of Mississippi in 1868.

One might have hoped that Alexander Cockburn would have thought a bit about the usefulness of campaigning for the protection of the Posse Comitatus law in light of this history. While we share his concerns about the growing threat of authoritarianism in the U.S., it does not seem to be a good idea to make this bill which helped turn the South into a concentration camp run by the Ku Klux Klan a kind of litmus test for the left.

What is needed above all is a resistance to capitalist injustice and police state infringements on our rights that is based on clear thinking and solid class-based principles. Given Alexander’s recent drifting, one might hope that he reevaluate the usefulness of the shock jock approach to politics. It might generate lots of heat, but not very much light.

January 27, 2008

Introduction to Karl Marx’s Capital

Filed under: economics,Introduction to Marxism class,socialism — louisproyect @ 7:24 pm

(This was posted to the “Introduction to Marxism class” mailing list today.)

Marx’s decision to analyze the inner laws of the capitalist system was not primarily driven by intellectual curiosity. Faced with working class struggles breaking out all over Europe and challenged by theoretical debates in a socialist movement in its infancy, Marx decided that such a study would resolve political problems that were impeding future growth of the movement.

In this respect he was quite like Lenin who decided to analyze monopoly capital immediately after WWI broke out. When he was confronted by the immensity of the blood-letting and the betrayal of the socialist movement by its parliamentarians who voted for war, Lenin felt that it was necessary to look at the “latest stage” of the capitalist system, paying particular attention to the financial sector. In other words, economics for both Marx and Lenin is the handmaiden of politics.

Born in 1818 into a German Jewish family that had converted to Protestantism, Marx was a radical by his early 20s, just as was the case for just about everybody taking this class–including me. His early radicalism reflected the dominant current of his day, which was anarchism. If the anarchism of his time was as powerful as it is today, there was no alternate political movement that a young person could hook up with. Today you might have a choice at a place like Columbia University between an anarchist club and the ISO. In the late 1830s and early 1840s, anarchism and various forms of pre-scientific socialism were the only games in town.

As a challenge to the left in the 1830s, bourgeois economics largely served to justify existing class relationships in society and to represent the market as the most efficient way of generating wealth just as is the case today. Attempts at tampering with markets would only guarantee failure. There is nothing that a Thomas Friedman or one of Barack Obama’s advisers is saying now that has not already been said by Adam Smith. In attempting to answer both the anarchists and the bourgeois economists, Marx was forced to come to terms with their way of analyzing the world, which surprisingly overlapped in a number of ways.

When you first dive into Marx’s Capital with its terms like “use value” and “exchange value”, you might be led to the conclusion that Marx coined these terms himself. In reality, these terms had been around for a long time. Marx only hoped to redefine them using his own insights gathered from a study of the capitalist economy using a dialectical method he had adapted from Hegel.

In 1859, Marx wrote “A Contribution to the Critique of Political Economy “, which contained many of the concepts that he would elaborate on in Das Kapital. The earlier work contains an addendum to chapter one on “The Commodity” that is titled “Historical Notes on the Analysis of Commodities” and that gives credit to a number of others for having grasped that labor is the source of value. Among them is Benjamin Franklin, who wrote “Trade in general being nothing else but the exchange of labour for labour, the value of all things is, as I have said before, most justly measured by labour”.

But by far the most significant advocate of the view that labor creates value is the British economist David Ricardo, who like Marx was born into a Jewish family. Of Ricardo, Marx writes:

David Ricardo, unlike Adam Smith, neatly sets forth the determination of the value of commodities by labour-time, and demonstrates that this law governs even those bourgeois relations of production which apparently contradict it most decisively. Ricardo’s investigations are concerned exclusively with the magnitude of value, and regarding this he is at least aware that the operation of the law depends on definite historical pre-conditions.

In terms of the “determination of the value of commodities by labour-time”, Ben Franklin gives a useful example as cited by Marx: “As, suppose one man is employed to raise corn, while another is digging and refining silver; at the year’s end, or at any other period of time, the complete produce of corn, and that of silver, are the natural price of each other; and if one be twenty bushels, and the other twenty ounces, then an ounce of that silver is worth the labour of raising a bushel of that corn.”

What distinguishes Marx from Ricardo or the good Ben Franklin, however, was his ability to see how labor is exploited to produce surplus value. In the world of Ricardo and Ben Franklin, there is no exploitation. The man producing corn and the man producing silver are free agents who meet each other in the marketplace. But in capitalist society, the producer is a worker who receives a wage that is less than the value of the commodity he or she is producing. In the pre-capitalist epoch, exploitation was much easier to perceive. A Lord would come collect 10 percent of the corn produced by a Serf at the end of the growing season. Under capitalism, the wage relationship is mystified as a kind of contract between equals and thus less susceptible to exposure. It was Marx’s breakthrough to throw a powerful light on this kind of exploitation.

The other giant of bourgeois economics that Marx entered into battle with is the aforementioned Adam Smith. For Smith, the source of all wealth is the division of labor, which in conjunction with the free market, makes for a more efficient economy. This schema shares Ricardo’s emphasis on the individual free agent that assumes society to be organized on the basis of millions of Robinson Crusoes pursuing a rational path to their own enrichment that will automatically benefit everybody else.

Marx kept notebooks titled “Grundrisse der Kritik der Politischen Ökonomie ” (Outlines of the Critique of Political Economy) that like the aforementioned “A Contribution to the Critique of Political Economy” was to become transformed into Das Kapital. In the introduction, he wrote:

Individuals producing in Society – hence socially determined individual production – is, of course, the point of departure. The individual and isolated hunter and fisherman, with whom Smith and Ricardo begin, belongs among the unimaginative conceits of the eighteenth-century Robinsonades, which in no way express merely a reaction against over-sophistication and a return to a misunderstood natural life, as cultural historians imagine. As little as Rousseau’s contrat social, which brings naturally independent, autonomous subjects into relation and connection by contract, rests on such naturalism. This is the semblance, the merely aesthetic semblance, of the Robinsonades, great and small.

Annette Rubinstein, the great Marxist literary critic who died last year at the age of 97, had the last word on Robinson Crusoe’s island as a prototype of capitalist civilization in her magnum opus “The Great Tradition: From Shakespeare to Shaw”:

The emphasis is not on wonderful and terrible events but on resourceful and effective activity. The initiative comes from man throughout. Nature is raw material for his shaping, not a god for his worship. Sometimes stubborn and difficult, it is never purposeful or malicious and can therefore be mastered and used by any educated, intelligent, self-reliant, hard working and prudent man who has a reasonable share of good luck—just such a share as the laws of probability (or the goodness of God) is likely to afford him.

For bourgeois economics to work, it is absolutely necessary to make the individual the principal economic actor. As Margaret Thatcher once said, “And, you know, there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first.” It was Marx’s most subversive insight to tackle this myth and drive a stake into its heart.

Given Adam Smith and David Ricardo’s commitment to the capitalist system, it is somewhat surprising to discover that many of their ideas were reflected in Pierre-Joseph Proudhon’s “The Philosophy of Poverty”. Born in 1808 and 13 years older than Karl Marx, the French father of anarchism was a pivotal figure in the radical movement that Marx joined up with as a youth.

Initially Marx viewed Proudhon in favorable terms. In the 1844 “The Holy Family “, Marx hails Proudhon:

Now Proudhon has put an end to this unconsciousness once for all. He takes the human semblance of the economic relations seriously and sharply opposes it to their inhuman reality. He forces them to be in reality what they imagine themselves to be, or rather to give up their own idea of themselves and confess their real inhumanity. He therefore consistently depicts as the falsifier of economic relations not this or that particular kind of private property, as other economists do, but private property as such and in its entirety. He has done all that criticism of political economy from the standpoint of political economy can do.

But as Marx deepened his understanding of the capitalist mode of production, he was forced to disassociate himself from the anarchist and wrote a sharp polemical attack in 1848 titled “The Poverty of Philosophy ” that inverted Proudhon’s title. This was the first work in which Marx began to rigorously define the terms that would crop up in Das Kapital.

Before turning to Marx’s critique, it would be useful to take a look at Proudhon’s work, which is available on the Marxism Internet Archives, where most of our readings can be found. In chapter 3, titled “Labor as the Efficient Cause of the Domain of Property”, you find a wholesale adoption of Adam Smith’s division of labor:

Let us admire Nature’s economy. With regard to these various needs which she has given us, and which the isolated man cannot satisfy unaided, Nature has granted to the race a power refused to the individual. This gives rise to the principle of the division of labor, — a principle founded on the speciality of vocations.

The satisfaction of some needs demands of man continual creation; while others can, by the labor of a single individual, be satisfied for millions of men through thousands of centuries. For example, the need of clothing and food requires perpetual reproduction; while a knowledge of the system of the universe may be acquired for ever by two or three highly-gifted men. The perpetual current of rivers supports our commerce, and runs our machinery; but the sun, alone in the midst of space, gives light to the whole world. Nature, who might create Platos and Virgils, Newtons and Cuviers, as she creates husbandmen and shepherds, does not see fit to do so; choosing rather to proportion the rarity of genius to the duration of its products, and to balance the number of capacities by the competency of each one of them.

Furthermore, where Proudhon writes about the capacity of labor to create value, it is done in a fashion that owes more to Ricardo than to the revolution in thinking carried out by Karl Marx. In language that is addressed to the boss rather than the worker (anarchism of this sort has a natural tendency to appeal to the boss’s better nature), Proudhon only asks for a fair deal and generously assures the boss that since “you have contributed to the production, you ought to share in the enjoyment”:

The price is not sufficient: the labor of the workers has created a value; now this value is their property. But they have neither sold nor exchanged it; and you, capitalist, you have not earned it. That you should have a partial right to the whole, in return for the materials that you have furnished and the provisions that you have supplied, is perfectly just. You contributed to the production, you ought to share in the enjoyment. But your right does not annihilate that of the laborers, who, in spite of you, have been your colleagues in the work of production.

Marx throws a Molotov cocktail into this cheerful chatter:

In English society the working day thus acquired in 70 [years] a surplus of 2,700 per cent productivity; that is, in 1840 it produced 27 times as much as in 1770. According to M. Proudhon, the following question should be raised: why was not the English worker of 1840 27 times as rich as the one of 1770? In raising such a question one would naturally be supposing that the English could have produced this wealth without the historical conditions in which it was produced, such as: private accumulation of capital, modern division of labor, automatic workshops, anarchical competition, the wage system — in short, everything that is based upon class antagonism. Now, these were precisely the necessary conditions of existence for the development of productive forces and of surplus labor. Therefore, to obtain this development of productive forces and this surplus labor, there had to be classes which profited and classes which decayed.

Proudhon’s socialism was basically a romantic yearning for a return to the days of the small proprietor. When he wrote that property is theft, his hope was not to abolish private property but to establish the conditions for individual proprietorship. While Marx accepted the reality of those seventy years of the private accumulation of capital, Proudhon longed to turn the clock back as Hal Draper made clear in Volume IV of “Karl Marx’s Theory of Revolution”, titled “Critique of other Socialisms”:

Early socialism—from the traveling salesman Fourier to the peasant-minded Proudhon, from the fashionable ladies’ tailor Weitling to the semi-proletarian artisans of the Communist League—was tied by a network of threads to petty-bourgeois producers caught in the act of turning into modern workers. All of socialism began with the tension between hostility to, and hope in, the state. This could be resolved only by a thought-through theory of the state, but the tension lasted for most of the nineteenth century.

There was, then, a vast reservoir of inchoate antistatism, lapping around the borders of the socialist movement, for a very long time, continually renewed as new streams of raw, undeveloped, unclass-conscious workers poured into the reservoir from the sea of peasantry. The history of anarchism—its flare-up and decline in one area after another, from the Jura Mountains to the plains of Andalusia—is one of history’s best cases of correspondence between politics and technology.

In volume one of “Karl Marx’s Theory of Revolution” it was stressed that pre-Marx socialism usually entailed hostility to politics; it was social-ism counterposed to political-ism. This early socialism was inhospitable to concern with the major political issues of the day (constitutional democracy above all), which it saw as of interest only to the bourgeoisie or the “politicians.” It was a theoretical advance when Marx showed how it was possible to link the “Social Question” up with the “political question” in a single programmatic approach, which he called a “new direction.” The primitive state of mind in the movement, general antipoliticalism, was the source of several isms, including pure-and-simple trade-unionism and cooperativism, and only in a specially abstract form did it also show itself as an ingredient of anarchism.

So to conclude on the note that we started with, Karl Marx’s economic theory was a challenge to the prevailing anti-political mood of the existing radical movement. By identifying the underlying and inescapable class antagonisms of the capitalist system, he hoped to make it abundantly clear that the only way to live freely and justly was by abolishing that system and replacing it with one that was in the interests of the overwhelming majority of the planet: communism.

Tomorrow evening I will post readings and study questions for Volume One of Capital. Feel free to discuss this post but understand that detailed questions and comments about “exchange value”, etc. would make more sense until we have had a chance to look at the readings tomorrow.

January 25, 2008

Introduction to Marxism class

Filed under: socialism — louisproyect @ 6:55 pm

In response to a query about how one gets a “training in Marxism” from a Marxmail subscriber (the mailing list I moderate), I am organizing an Introduction to Marxism class that will operate as a mailing list. Information on the class is at: http://groups.yahoo.com/group/marxism_class/

Here is an introduction to the class:

This is a proposal for what we might want to cover in this class. Before I suggest any readings, I want to make sure that all of your concerns are being addressed. If you think that something should be added, changed or even deleted, please feel free to speak up. There are only 17 of us here and there is no need to feel shy.

1. Marxist economics: What is a commodity? The labor theory of value? Falling rate of profit? Etc., etc.

2. Marxist philosophy: What is dialectical materialism? Or, perhaps, what is the Marxist method? What are the origins of Marxist philosophy? Is Marxism a science?

3. Historical materialism: How does a Marxist understand history? Does history have some kind of logic? What is the role of the class struggle in history?

4. How are revolutions made? What is a bourgeois revolution? How does it differ from a socialist revolution? What is the role of a revolutionary party? What kinds of strategy and tactics must a revolutionary party develop in order to succeed?

5. Problems of socialism in power. What accounts for the rise of Stalin and the collapse of socialism in the USSR? Was the USSR ruled by a social class?

I think we can spend at least a couple of days in thinking these questions through before we decide on the readings, although I definitely have some things in mind. Also, I encourage to speak up and introduce yourself and to say what you hope to get out of the class. I have already heard from at least one person that their time is limited and that they might not have time to keep up with the readings. Don’t worry. You will definitely learn something just through the discussion, although there is of course no substitute for reading some of the classics that we will be covering.

January 24, 2008

Orthodox Stance

Filed under: Film — louisproyect @ 2:44 am

Dmitriy Salita (black trunks) in the ring

Dmitriy Salita putting on tefilin

Opening on January 25th at the Cinema Village in New York, “Orthodox Stance” is the finest sports documentary I have seen since the 1994 “Hoop Dreams.” Besides dramatizing a young man’s struggle to achieve success in professional boxing, “Orthodox Stance” is as much a story about prizefighter Dimitriy Salita’s search for faith as an Orthodox Jew. In keeping with the lively intelligence that characterizes this documentary by first-time director Jasun Hutt, the title is a clever reference to the traditional right-handed boxing stance as opposed to the southpaw stance of an Oscar de la Hoya.

The dramatic tension that propels this documentary forward grows out of the contradictions between the brutality of Salita’s profession and traditional Orthodox Jewish aversion to violence of any sort. Even in Israel, those who follow Hasidic teachings are exempt from military service although the Lubavitcher Hasidim that originally won Salita to its views does serve. For non-observant Jews, boxing no longer has the attraction that it did in the 1920s and 30s when the field was dominated by Jews, including greats like Benny Leonard and Barney Ross.

Ironically, it was social conditions for his immigrant Russian-Jewish family that led young Dmitriy to enter the ring for the first time. As Dmitriy puts it, “In the beginning my family struggled, we were on welfare and food stamps. Kids made fun of me. I wore bad clothes. I got into a lot of fights, a lot of arguments, and then at the age of 13 my brother and I started to discuss the idea of boxing.”

Boxing also provided him for an outlet for the psychic pain he endured after his mother succumbed to cancer not long after he took up boxing. He said, “It helped me lock out the pain and give me a purpose. I knew that I was winning and I knew it was something that I had, that kept me feeling good.”

Like most Russian Jews, the Salitas were not observant but when his mother was being treated at Sloan-Kettering Hospital (where I worked in the mid 1980s), he discovered that the woman who was in the next bed was involved with the Lubavitcher Hasidim and before long began attending their services. Unlike most other Hasidic groups, the Lubavitchers perform a kind of missionary work among non-observant Jews. About five years ago, you could spot them at the front gates of Columbia University where they would approach men like myself walking past them to ask, “Excuse me, are you Jewish?” That would be the first step in persuading the person to go into a van parked near by and put on tefilin, the leather straps that terminate in a little box containing scripture.

You can see Dmitri putting on tefilin throughout the film as well as preparing and eating kosher food with his manager and spiritual adviser Israel Liberow. Like everybody else in this altogether winning movie, Liberow is a fascinating character. The youngest of 11 children from a Lubavitcher family, Liberov grew up in London without a television but developed a love of boxing at an early age. With his Bar Mitzvah gift money, he purchased a Sony Walkman and began listening to fights on BBC. While at Yeshiva, he would sneak out of dorms to watch boxing matches at friends’ houses.

The press notes state:

Israel met Dmitriy six months after Dmitriy began coming to his brother’s synagogue. Israel says in the film, “Dmitriy was shocked at how much I blabbered on about boxing and couldn’t believe I was Zalman’s brother–like I was in disguise, with a clip on beard.” Because of his knowledge and passion for both boxing and Judaism, he calls their relationship “divine providence.”

While watching “Orthodox Stance,” I was tremendously impressed with Dmitriy’s strength of character and beliefs. Like other famous Jewish athletes such as Sandy Koufax and Hank Greenberg who would not play baseball on High Holy Days, Dmitriy would not fight on the Sabbath, even more of an obstacle for a professional career.

In some ways, the rigors of Orthodoxy are as demanding as that of boxing. If you have to get up early to say your prayers and follow a strict dietary laws, that requires the same kind of discipline as doing roadwork and keeping within a certain weight limit. If you’ve followed the career of a Mike Tyson or have seen the movie “Raging Bull”, based on the life of Jake LaMotta, you’ll know that discipline does not come easy to many fighters.

If watching this young boxer’s attempts to reconcile his religious beliefs with a violent sport were not sufficient in themselves to draw you to “Orthodox Stance,” the film’s insights into boxing as a business are an extra incentive. Put simply, there has never been a documentary that reveals the nitty-gritty, frustrating details of trying to make a living as a boxer. For all of the success stories of a Floyd Mayweather Junior, whose bout with a British boxer Ricky Hatton earned him millions and endless hype on HBO, the struggle to make it for Dmitriy and other boxers not in the upper tier requires infinite patience and a wary eye toward the promoters who would fleece them. Watching Dmitriy haggling over a contract with some of these sharks makes you wonder whether they can do more damage than a left jab when all is said and done.

The world of the Jewish boxer is of great interest to me. As a young boy in the 1950s, I used to spend time chatting with Barney Ross who was working as a greeter at a nightclub in my Catskill Mountains village. Although I was too young to really understand the boxing profession, I sensed that there was something unusual about this man, who was as kosher as my parents and the top fighter pound for pound for a time in the 1930s.

Written by Douglas Century (the author of a great biography of Barney Ross), the chapter on Jewish boxers in the 3 volume “Jews and American Popular Culture” concludes as follows:

The Jewish presence in boxing today is a story of a new breed of striving immigrants, immigrants from the former Soviet bloc via Israel. Junior welterweight and welterweight contender, Dimitriy Salita, born in Odessa, Ukraine (a historic center of Jewish life), immigrated to Israel and later Brooklyn. Yuri Foreman, a junior middleweight, born in Belarus, spent his teenage years in Israel, and also boxes out of Brooklyn; heavyweight Roman Greenberg was born in Russia, raised in Tel Aviv, and boxes out of London, England. All three fighters proudly embrace their Jewish identity; like hundreds of fighters in the 1920s and 1930s, they fight with the Star of David on their trunks. Salita, a follower of Chabad Lubavicher, even attracts a passionate and incongruous black-hat-wearing Hasidic fan base to his fights. Detractors say they are contenders whose promoters have cherry-picked opposition to capitalize on the promotional goldmine of a promising Jewish contenders. American-born Jewish prizefighters of the first rank may have vanished, but the interest in their bygone era is experiencing a marked resurgence among scholars and artists.

If you want to see this new breed up close, go see “Orthodox Stance”. It is unforgettable cinema.

Orthodox Stance Website

Dmitriy Salita Website

January 18, 2008

A sectarian version of the lessons of Nicaragua

Filed under: Latin America,nicaragua — louisproyect @ 6:41 pm

Typical Nicaraguan home: Permanent Revolution
could have brought peace and prosperity, however

As somebody who was very involved with Nicaragua solidarity in the 1980s, I was curious to see what Claudio Villas had to say in an article titled “Nicaragua: Lessons of a country that did not finish its revolution” that appears on the In Defense of Marxism website. For those who are not familiar with the Internationalist Marxist Tendency (IMT) that produces this website, a word or two of introduction might be necessary.

The IMT is a fairly orthodox Trotskyist grouping that is the result of a split by the late Ted Grant and Alan Woods from the so-called Militant Tendency now led by Peter Taaffe. Both groups project themselves as the core members of a Fourth International that will supposedly vindicate Leon Trotsky’s political legacy. Neither group has shown the slightest interest in rethinking what the Bolshevik experience might mean in a context other than turn-of-the-century Czarist Russia, but the Grant-Woods tendency has demonstrated an enthusiasm for the Bolivarian revolution in Venezuela that does not fit exactly into the October 1917 template.

Villas states that his article studies “the lessons of the Nicaraguan Revolution” in order to help “understand the ongoing processes in Venezuela today.” As becomes obvious in no time at all, Nicaragua becomes one of those negative examples that the Trotskyist movement dotes on. Forever wagging its finger at the mass movement, it assumes that calling attention to a betrayal is conducive to correct revolutionary practice. This is what I call the subway preacher school of Marxism. Once a week or so, I get stuck on the number one train going up to Columbia University with a free-lance preacher who lectures the subway car about the perils of sin. Let me put it this way, preaching against sin or reformist betrayal might make the preacher feel good but it hardly changes people’s behavior.

I was struck by the similarities between Villas’s article and those I have read about Cuba in the Trotskyist press, which revolve around the incapacity and unwillingness of the guerrillas to link up to the working class. As one example, he writes, “For the first time, the workers in the cities mobilised in a massive and independent manner with their own political slogans. But because there was no revolutionary leadership of the workers’ movement this meant that all the attention and expectations of the working class became focused on the FSLN, in spite of the fact that the Sandinistas only had 500 armed guerrillas.”

Keeping in mind that the total population of Nicaragua in the 1970s was about 3 million, an army of 500 combatants would amount to something like 50,000 in a country the size of the USA. What are the chances that a rebel army this size could be put together without a massive and powerful movement in the cities? Next to zero, I would say.

Part one of Villas’s article is filled with idealist errors that are hardly worth commenting on. He analyzes everything that went wrong in Nicaragua as a function of an incorrect theory, namely a belief in the progressive bourgeoisie that the FSLN picked up from the CP. It includes a patronizing swipe at both Augusto Sandino and Carlos Fonseca, who launched the FSLN in a bid to consummate Sandino’s struggle against imperialism in the 1920s. Both men, unlike the Grant-Woods tendency, believed in collaborating with the “national-colonial bourgeoisie”. For his part, Villas understands the way forward even though the misguided reformists will not listen:

The extinguishing of capitalism in Russia in 1917, in China in 1949 and in Cuba in 1960 demonstrated that social and economic development in the underdeveloped countries could only be achieved on a non-capitalist economic basis, in other words, on a socialist economic basis that involved a break with private property and the taking over of the means of production and finance. There are no exceptions to this law.

When you reduce this paragraph to its essence, you will discover that it contains a tautology that can be reduced to a few words: “Socialism can only be achieved through socialist revolution”. Keeping in mind that everybody on the socialist left, from Alan Woods to the late Gus Hall, agrees that socialism is the goal, the only real difference would be about the need for revolution and for resolute struggle against the bourgeoisie. Unfortunately, the intellectual recognition of such a task does not translate easily into practical politics.

For its over 75 year existence in Latin America (not to speak of the world), Trotskyism has remained a very marginal force, including in Nicaragua itself where voices similar to Villas’s were heard. Why did the FSLN gain the allegiance of the masses and why did the Trotskyists stay small and irrelevant? I would suggest that the appeal of both Sandino’s movement and the FSLN would be lost on the comrades of the In Defense of Marxism website, who have a mechanical understanding of Bolshevism. Leaving aside the question of the FSLN’s “reformism”, there is something quite different about the way that they got started and the way that Villas believes revolutionary parties should be built.

Unlike the IMT, the FSLN rooted its program and language in the Nicaraguan framework. By utilizing Augusto Sandino as a symbol of their revolution, they tapped into the psyche of the Nicaraguan people. They also eschewed the iconography of the Russian Revolution, which is a dead giveaway for a sectarian mindset. For example, the IMT home page has images of Marx, Engels, Lenin and Trotsky on the left and a hammer-and-sickle on the right. These images might appeal to those “in the know” but not to the average Nicaraguan peasant who went to church every Sunday. Whatever mistakes the FSLN made (and they were plenty), they did not make the mistake of such sectarianism. As we look back at the wreckage of the 20th century revolutionary movement, we have to come to terms with sins of commission and sins of omission–to return once again to the example of the subway preacher. Everybody knows that the CP’s have sins of commission to repent for, but what about the Trotskyists? By maintaining sectarian habits that keep them small and marginal, don’t they have a responsibility for the failures of revolutions to succeed in countries where they have a toehold? These “sins of omission” will prevent you from getting into communist heaven.

Part two of Villas’s article consists mainly of a lecture derived from Lenin’s “State and Revolution”, whose sage advice the FSLN refused to pay attention to. Instead of setting up Soviets, creating militias, nationalizing Nicaraguan industry, dividing up the land and extending the socialist revolution beyond their borders, they were content to operate what amounted to a Nicaraguan version of Kerensky’s government, which soon fell apart because of its inner contradictions. He writes:

The Sandinista leadership ruled the country together with the treacherous national bourgeoisie during the first months of the revolution. However, the economic crisis continued to get worse. But the bourgeoisie, by now reassured that the FSLN leadership had halted the revolution, left the economic problems for the Sandinistas to sort out. The first move of the FSLN in the National Reconstruction government (made up of just 5 people) was to install a State Council. This was a bourgeois-democratic body made up of 33 members in which all the social, political and trade union forces that accepted the Sandinista leadership were represented. In 1984, this parliament was transformed into the Nicaraguan National Assembly, by now a bourgeois parliament with a leftwing majority.

In this manner, the FSLN leadership preserved the traditional parliament and government structures of the capitalist state. Executive power was concentrated in the hands of the National Directorate which was chaired by the President of the Republic. In 1984 in a few days more than 80% of the population over the age of 16 registered on the electoral register. The election results revealed the huge support of the masses for the FSLN.

One of the most remarkable things about this entire exercise is the almost entirely absent reference to American imperialism and the terrorist army it funded and organized. The word “contra” is mentioned infrequently and not assigned its proper weight. Villas even blames the FSLN for giving backhanded support for the terrorists: “While the government was subsidising the private sector through tax cuts to get its support and collaboration, the capitalists boycotted the economy and supported the Contras!” He also thought that it was not really responsible for the collapse of the revolution: “Despite their treacherous role, it was not the fascist Contra paramilitaries that defeated the revolution. Popular resistance had demoralised the Contra and they had been cornered by the mid-1980s.” Unfortunately, the Nicaraguan people were so demoralized after a decade of war that they gave their vote to a candidate supported by the USA who promised an end to the war if and only if she was elected.

Most people in touch with reality understand that nothing can stop a country that is 100 times the size of a country it wants to destroy from its goal, including the correct application of the Permanent Revolution. In 2006, the GDP of Nicaragua was 5 billion dollars, while that of the USA was 13 trillion, or 13,000 billion. Try to imagine what an economy that is nearly 3000 times as large as the economy of its victim can do. Apparently, the IMT cannot. Even if the FSLN had carried out the strictures set down by Villas, the revolution was doomed from the beginning. It occurred at the very moment that the USSR was transforming itself into a capitalist society and had no interest in lining up with an enemy of its new friends in Washington, DC.

Villas’s solution to Nicaragua’s economic woes are laughable: “The narrowness of the productive base of a country as small as Nicaragua, which had fewer inhabitants than Caracas or Havana, meant that to stimulate genuine development what was required was a truly revolutionary initiative such as the expulsion of the bourgeoisie, and the establishment of a Socialist Federation with Cuba.” A Socialist Federation with Cuba? Good grief. It was just around this period that the socialist foundations of the Russian economy were being dismantled and support for Cuba cut off. This led to an “emergency period” that most commentators viewed as coming close to destroying Cuba as well as Nicaragua. Talk of a “socialist federation” is simply empty rhetoric. Words are cheap for a sectarian group that has never had responsibility anywhere in the world–and never will–for putting food on a worker’s table.

I have my own analysis of why the Sandinista revolution collapsed and would recommend that people read it in its entirety here.

I would only like to conclude with this excerpt:

Trotsky sharpened his insights as a participant and leader of the uprising of 1905, which in many ways was a dress-rehearsal for the 1917 revolution. He wrote “Results and Prospects” to draw the lessons of 1905. Virtually alone among leading Russian socialists, he rejected the idea that workers holding state power would protect private property:

“The political domination of the proletariat is incompatible with its economic enslavement. No matter under what political flag the proletariat has come to power, it is obliged to take the path of socialist policy. It would be the greatest utopianism to think that the proletariat, having been raised to political domination by the internal mechanism of a bourgeois revolution, can, even if it so desires, limit its mission to the creation of republican-democratic conditions for the social domination of the bourgeoisie.”

Does not this accurately describe the events following the Bolshevik revolution in October, 1917? The workers took the socialist path almost immediately. If this alone defined the shape of revolutions to come, then Trotsky would appear as a prophet of the first magnitude.

Before leaping to this conclusion, we should consider Trotsky’s entire argument. Not only would the workers adopt socialist policies once in power, their ability to maintain these policies depended on the class-struggle outside of Russia, not within it. He is emphatic:

“But how far can the socialist policy of the working class be applied in the economic conditions of Russia? We can say one thing with certainty–that it will come up against obstacles much sooner than it will stumble over the technical backwardness of the country. Without the direct State support of the European proletariat the working class of Russia cannot remain in power and convert its temporary domination into a lasting socialistic dictatorship.”

While there is disagreement between Lenin and Trotsky on the exact character of the Russian revolution, there is none over the grim prospects for socialism in an isolated Russia. We must keep this uppermost in our mind when we consider the case of Nicaragua. Well-meaning Trotskyist comrades who castigate the Sandinistas for not carrying out permanent revolution should remind themselves of the full dimensions of Trotsky’s theory. According to this theory, Russia was a beachhead for future socialist advances. If these advances did not occur, Russia would perish. Was Nicaragua a beachhead also? If socialism could not survive in a vast nation as Russia endowed with immense resources, what were Nicaragua’s prospects, a nation smaller than Brooklyn, New York?

January 17, 2008

Still Life

Filed under: Film — louisproyect @ 3:36 pm

Opening tomorrow at the IFC Center in New York, Jia Zhang-ke’s “Still Life” (Sanxia haoren) is a no-holds-barred assault on the dubious progress wrought by the Three Gorges Dam. Shot on location in the town of Fengjie, which was demolished by the state and then deluged by the Yangtze River, it is one of the most radical-minded films coming out of China to date and takes its place alongside “Blind Shaft,” a movie about coal miners. Indeed, one of the two main characters is Sanming, a coal miner who has come to Fengjie in search of a daughter he hasn’t seen in 16 years. The moment he arrives he takes a job demolishing houses.

One evening after work Sanming shares impressions with a fellow worker about the immense changes taking place around them. His comrade rebukes him by saying that he is too “nostalgic”. As irrefutable proof of this, we hear Sanming play a downloaded ring tone on his cell phone, which is an old Red Army anthem—a perfect symbol of the paradoxes of Chinese society today: in the name of Communism, a brutal forced march toward capitalist modernization proceeds apace.

In another scene that takes place in a restaurant terrace, a couple of party bureaucrats gaze in admiration at a bridge over the river – a fulfillment of Mao’s promise to “tame the Yangtze” – but are annoyed that the bridge is not lighted. After an underling throws a switch to light up the bridge like a Christmas tree, they beam in satisfaction.

We see a group of laid-off workers, some of whom have lost a limb on the job, demanding compensation from their former employer, another party hack. He urges patience and patriotism, but they threaten a suit. Taking in this confrontation is one Shen Hong, a nurse who has come to Fengjie in search of her estranged husband, a manager at the factory.

Shen Hong looks up her husband’s friend, who is an archaeologist supervising a dig nearby the Yangtze River. He explains to her that he is in a rush to find and preserve 2000 year old relics that are about to be lost forever under the water. Like the relics, the citizens of Fengjie also face an imminent deluge that will sweep them away.

The 37 year old Jia Zhang-ke is a remarkable director who is decidedly contrarian when it comes to his nation’s “economic miracle”. His 2005 “The World” (Shijie), which I have not seen, is an assault on globalization and free trade, using the tacky Beijing World Park that includes replicas of some 100 tourist attractions from five continents in the same way that “Still Life” uses the Three Gorges Dam.

In an interview with the Village Voice, Zhang-ke explained how he decided to make “Still Life”:

“I had no plan to make Still Life,” says Jia. “But there are so many things happening during the Three Gorges Dam project, it warranted another film.”

Reportedly displacing close to two million people and moving 13 full-sized cities, the Three Gorges Dam epitomizes the tragic costs of China’s growth (and also makes a cameo as an example of environmentally unsound industry in Jennifer Baichwal’s recent documentary Manufactured Landscapes). Still Life follows two unrelated stories of a man and woman returning to the affected area to search for long-lost loved ones. In a wry exchange typical of Jia, the coal-miner protagonist gets a ride to his old (now flooded) address from a peroxide-haired young motorcyclist, who says: “That little island out there, that was your street.”

Jia had never visited the Three Gorges region before. Prior to the controversial dam, the area was noted for its scenic vistas and—apropos of Jia’s capitalist concerns—its image graces the back of the 10-yuan note. “But after getting there,” he says, “I realized that this is a 2,000-year-old city that just vanished overnight. And I was really shocked at the rapid destruction of these places. It was as if it [was hit by] an alien invasion or nuclear fallout.” (Jia makes explicit the alien metaphor—UFOs make an occasional appearance in the landscape.)

Highly recommended.

January 16, 2008

Klimt

Filed under: art — louisproyect @ 4:14 pm

At the risk of sounding like a complete philistine, I have to confess that I had more interest in Gustav Klimt as a mover and shaker in fin-de-siècle Vienna than as an artist. When I received a DVD of the 2006 movie “Klimt” from Koch-Lorber, it sat on my desk for a month or two. I finally decided to take a look at it when I discovered that the Neue Galerie, a nearby museum specializing in German and Austrian art, was running a show devoted to the artist. After watching the movie, attending the show this weekend and reading the chapter on Klimt in Carl E. Schorske’s “Fin-De-Siècle Vienna: Politics and Culture,” I am now ready to say a few words about a very interesting artist who lived in a very interesting period with some strong similarities to our own.

While there is no denying the power and beauty of Klimt’s paintings, some people might have the same reaction that I do to them. They strike me as somewhat kitschy, especially since they frequently adorn the windows of those tacky poster and reproduction shops that you find in cities everywhere. They usually can be found next to a picture of Al Pacino or a New Yorker cartoon. One of the most famous–”The Kiss”–adorned the cover of a Danielle Steele novel (shown above to the left).

But in his time, Klimt was anything but kitschy. He defied conventional attitudes about what constituted art and became an early martyr in the kind of culture wars that have embroiled Robert Mapplethorpe photographs, Andres Serrano’s “Piss Christ” and Chris Ofili’s dung Madonna in recent years.

Gustav Klimt with a friend

Gustav Klimt started off as a traditional figurative artist. Many of his early works can be seen at the Neue Galerie and are nearly photographic in their realism and detail. Even early in his career, Klimt was fixated on nude bodies and was not shy about depicting female genitalia in a fairly openly erotic manner.

Although Klimt led a rather conventional existence as an artist (he never married and lived with his mother and sisters as an adult), he also had a ravenous sexual appetite and fathered 30 out-of-wedlock children by some accounts. As a typical fin-de-siecle figure, he shared Freud’s belief in the need to combat sexual repression by any means necessary. He wore flowing smocks in his studio with nothing on underneath (one was on display at the Neue Galerie) in the belief that clothing inhibited his artistic and psychological creativity.

A seed of rebelliousness that was always present came to full fruition in 1897 when Klimt and like-minded artists (including Egon Schiele, who is a character in the biopic) launched the Vienna Secession Movement, a bid to break with the academy that forced artists to work in the sterile “historicism” vein, which involved painting pictures of Greek or Roman gods, the Saints, etc. in a dated style.

The Vienna Secession was part and parcel of a cultural trend in pre-WWI Vienna that posed some of the basic issues associated with modernism. In music, Schoenberg was a prototypical figure as was Karl Kraus in belles-lettres. The artist, writer and philosopher of this period was conscious of imperial decline, but lacked the class insights to conceive of an alternative. Liberation was seen not so much in terms of breaking with the bourgeoisie, but carving out a space in society so as to allow the beautiful soul and his or her follower to breathe free.

One of the more interesting figures in this general current was the physicist and philosopher Ernst Mach whose Cartesian-like belief in the power of subjectivity was greeted with open arms by Gustav Klimt. He interpreted Mach’s philosophy as legitimating his own rather fantastic visions of people and the world. (As some of you might now, Mach was a bête noir for Lenin who regarded his influence on the Bolshevik party as a threat to Marxism.)

Friedrich Jodl: Klimt’s nemesis at the U. of Vienna

At the pinnacle of his prestige in 1894, Klimt was commissioned to paint murals for the Law, Medical and Philosophy departments of the University of Vienna, which were so out of whack with the prevailing tastes of the professorate that a petition drive was organized to remove them from the premises. However, Friedrich Jodl, the petition drive organizer, was not the typical yahoo of today like Rudolph Giuliani who used “Piss Christ” as a rallying cry for New York City reactionaries. Jodl was a highly respected progressive who founded the Vienna Ethical Culture movement in the spirit of the American Ethical Culture society in order to promote a scientific morality freed from religious dogma. According to Schorske, Jodl championed woman’s emancipation, civil liberties and an adult education program that was meant to reduce class inequalities.

One might understand how Jodl’s very rationalism mitigated against his ability to appreciate Klimt’s murals since they were drenched in obscure, sexually explicit and somewhat confrontational imagery that hearkened back to Bosch and Breughel. Jodl told a liberal newspaper that it is “not against nude art, nor against free art that we struggle, but against ugly art.”

If his critics were not exactly true to form reactionaries, neither were his defenders particularly the kind of people you would find on the barricades. Indeed, the Austrian state looked to the Secessionist movement as a battering ram against the resentful nationalist movements that felt oppressed by the Empire, even as it was now devoted to Enlightenment values. The ruling class of Austria considered economics and culture two highly strategic areas to consolidate its power. On the economics front, the symbol of this struggle was Minister of Finance Eugen Boehm-Bawerk who was charged with developing a progressive taxation structure. Some of you might know Boehm-Bawerk as one of the earliest critics of the Marxist theory of value. He was one of the first to address what is called the “transformation problem”, which revolves around the alleged failure of prices to map to the labor time required in commodity production. In this instance, the “transformation problem” was clearly understood by Boehm-Bawerk as a way to undermine the revolutionary appeal of Marxism. What he failed to understand is that exploitation is felt deeply by workers, whatever theories are deployed to explain it away.

On the cultural front, the work of Gustav Klimt and his associates was understood as a means of “defending a purely Austrian culture” in the words of a woman in the Secessionist movement. In taking this approach, the Austrian state clearly saw their work as performing the kind of function that the State Department and the CIA reserved for the Abstract Expressionists, who were trotted out as proof of the kind of freedom that the American Empire could only guarantee. Schorske writes:

Within this framework of supra-national policy, state encouragement of the Secessionist movement made complete sense. Its artists were as truly cosmopolitan in spirit as the bureaucracy and the Viennese upper middle class. At a time when nationalist groups were developing separate ethnic arts, the Secession had taken the opposite road. Deliberately opening Austria to European currents, it had reaffirmed in a modern spirit the traditional universalism of the Empire. A Secession spokesperson had explained her commitment to the movement as “a question of defending a purely Austrian culture, a form of art that would weld together all the characteristics of our multitude of constituent peoples into a new and proud unity,” what, in another place, she called a “Kunstvolk” (an art people). The Minister of Culture, even before the formation of the Koerber ministry, revealed in strikingly similar terms the assumptions of the state in creating an Arts Council in 1899 as a body to represent its interest. He singled out the potential of the arts for transcending nationality conflict: “Although every development is rooted in national soil, yet works of art speak a common language, and, entering into noble competition, lead to mutual understanding and reciprocal respect.” Even while proclaiming that the state would favor no particular tendency and that art must develop free of regimentation, according to its own laws, the minister showed special solicitude for modern art. He urged the new Council “to sustain . . . the fresh breeze that is blowing in domestic art, and to bring new resources to it.” Thus it came about that, while other European governments still shied away from modern art, the ancient Habsburg monarchy actively fostered it.

Klimt’s run-in with the University of Vienna faculty left him bitter and convinced him to give up making universal statements about the human condition that would be similarly misunderstood. From around 1905 until his death in 1918, Klimt focused more on landscapes and portraits commissioned by the Viennese bourgeoisie, particularly the Jews who tended to be more open-minded. One of his patrons was Karl Wittgenstein, who had made a fortune in the mining industry and who was the father of the philosopher Ludwig Wittgenstein. Ludwig Wittgenstein, along with Ernst Mach, was largely responsible for the positivist turn in modern philosophy. Although Lenin would have been just as hostile to Wittgenstein as he was to Mach, he certainly would have appreciated Wittgenstein’s professed sympathies for the USSR. One of Klimt’s most famous paintings from this period is a portrait of Ludwig’s sister, Margaret Stonborough-Wittgenstein.

 

Margaret Stonborough-Wittgenstein

Although Klimt would have come to mind as the prototypical “decadent” artist for the Nazis, Hitler’s Gauleiter in Vienna, Baldur von Schirach, organized a Klimt show in Vienna in 1943 that was far more ambitious than the one at the Neue Galerie. In keeping with Nazi standards, however, the displayed art had largely been looted from a leading Jewish family, Serena and August Lederer. In an article on the Neue Galerie show, the New York Jewish Forward reported on November 7th that the Lederers had taken possession of the murals spurned by the U. of Vienna. Shortly after the 1943 show, the Nazis prepared for “total war” with the USSR that led to the destruction of these paintings as the Forward reported:

Von Schirach’s Klimt retrospective ended up being the last hurrah of his ambitious Austrian cultural program. The war’s turning point had come just a few days before the exhibition opened with the surrender of the Germans at Stalingrad. By March 1943, the entire Third Reich had been mobilized for “total war,” and, as the threat posed by air raids became increasingly real, it was determined that the Klimts would be better off in storage. Soon after the exhibition closed, more than 10 paintings from the Lederer collection, including the three faculty pictures — along with a number of other Klimt canvases — were hidden in a castle in Immendorf, a hamlet in lower Austria not far from the Czech border. (The Beethoven Frieze was stored elsewhere.) In May 1945, as the Russians came over that border, the German unit that had been garrisoned in the castle retreated, but not before laying explosives. Between May 8 and May 11, the building and its contents burned to the ground.

I want to conclude with some brief remarks about the Klimt biopic, which I would have probably appreciated more–but not much more–if I were more familiar with the artist’s life beforehand. Directed by Raoul Ruiz, the 66 year old Chilean who fled the country in 1973, it is a surrealist exercise that is far less interested in the facts of Klimt’s life than it is in creating vivid, dream-like images that actually have more to do with the surrealist tradition than Klimt’s own. It is arguably not even a true biopic, but a film that is only “inspired” by Klimt’s life.

One of the more egregious liberties taken with Klimt’s biography is to represent him as psychotic in the style of Russell Crowe in “A Beautiful Mind”. Throughout the film, John Malkovich as Klimt has extended conversations with a character that nobody else can see or hear. While this might have some value dramatically (provided that it is done well as it is in “A Beautiful Mind”), it has never had anything to do with medical science. Schizophrenia does not involve visual hallucinations of this sort. It is mostly a disease of the emotions that is typified by auditory hallucinations, which involve humiliating and shameful accusations against the sufferer. One might hope that screenwriters might find a way to put this cliché to rest, but I don’t hold out much hope.

Ronald Lauder: barbarian at the gate

One final word on Ronald Lauder, the Jewish billionaire who launched the Neue Galerie in 2001. Heir to the Estee Lauder cosmetics fortune, he is reportedly worth $3 billion. He is a leading figure in the Republican Party and served as Deputy Assistant Secretary of Defense for European and NATO policy under Reagan. In 1989 Lauder vied with Rudolph Giuliani to become Mayor of New York, spending an obscene $20 million in the failed venture. Politically, he staked out the same ground (pro-death penalty, etc.) but lost out to the more “appealing” Giuliani.

When he is not dabbling in politics, Lauder has taken up the cause of Jewish families like the Lederers whose art was looted by the Nazis. His performance in this area leaves something to be desired, according to the wiki article on the rightwing billionaire:

Lauder has been instrumental in some cases of recovering “lost” art from the Nazi period. However, he has been broadly criticized for failing to step forward and resolve a case involving the Museum of Modern Art, which in 1997 exhibited some paintings owned by Rudolph Leopold, a Viennese doctor. An investigative article in the New York Times on Dec. 24, 1997 — “A Singular Passion for Amassing Art, One Way or Another” — outlined a case involving Portrait of Wally by Egon Schiele, which was in the MoMA exhibition but was obtained by Leopold soon after the Nazi era. The Manhattan DA stepped in to help restore the piece to descendants of its owner, but ownership of the painting is still in contention, nearly 10 years later. Lauder did nothing on the case, despite being MoMA chairman at the time.

How did Buñuel put it? The discreet charm of the bourgeoisie?

January 9, 2008

Obama’s economic advisers

Filed under: economics,Obama — louisproyect @ 5:06 pm

Austan Goolsbee: U. of Chicago neoclassicist and “Sicko” critic

David Cutler: Harvard economist who believes
that high health costs are good for the economy

Jeffrey Liebman: another Harvard economist and
former Clinton adviser who favors privatizing social security

Last night I was on my stationary exercise bike watching early MSNBC news coverage of the New Hampshire primaries prior to vote totals being reported. The pundits were falling all over each other in praise of Barack Obama’s campaigning skills. I was especially struck by Tom Brokaw’s describing the Black candidate as “A thoroughbred who has broken away from the pack,” a perfect encapsulation of the idiotic horse race character of these elections.

Despite the intense rivalry between Obama and Hillary Clinton, they both are cut from the same mold, namely the Bill Clinton presidency. In his 2004 speech to the Democratic Party convention titled “The Audacity of Hope”, Obama adopted the bipartisan, centrist pose perfected by Hillary’s husband during his regime:

The pundits, the pundits like to slice-and-dice our country into Red States and Blue States; Red States for Republicans, Blue States for Democrats. But I’ve got news for them, too. We worship an “awesome God” in the Blue States, and we don’t like federal agents poking around in our libraries in the Red States.

Since Obama’s speeches are rather thin on substance, you have to extrapolate their meaning from sentences such as the following, which occurred in the same 2004 address:

Now, don’t get me wrong. The people I meet — in small towns and big cities, in diners and office parks — they don’t expect government to solve all their problems. They know they have to work hard to get ahead, and they want to. Go into the collar counties around Chicago, and people will tell you they don’t want their tax money wasted, by a welfare agency or by the Pentagon.

Since welfare was gutted long ago, we can only presume that this reference was meant to establish Obama’s belt-tightening fiscal outlook. Although it is not widely understood, Obama is pretty much committed to the neoclassical economics outlook of his home-town University of Chicago. Since becoming Senator, he has relied on the advice of a professor named Austan Goolsbee, who calls himself “a centrist, market economist” (Washington Times, July 16, 2007).

Goolsbee has been a columnist for Slate.com and the NY Times, as well as a standup comedian. His economics are not meant as a joke, as I understand it. His columns are written very much in the same vein as fellow U. of Chicago neoclassical economist Steven Levitt’s “Freakonomics,” examining everyday problems such as “Why you get stuck for hours at O’Hare.” Most are fairly uncontroversial except for the swipe he took at Michael Moore’s “Sicko”, whose single-payer recommendations violate his free market principles.

Another adviser with a particular interest in health care is David Cutler, a Harvard economist who was also an adviser to Bill Clinton–surprise, surprise. Cutler wrote an article for the New England Journal of Medicine in 2006 asserting that “The rising cost … of health care has been the source of a lot of saber rattling in the media and the public square, without anyone seriously analyzing the benefits gained.”

Anxious to show the good side of rising costs, Cutler and a group of other economists defend the idea that a powerful and profitable medical industry can serve as an engine of economic growth in the USA as the wretched Gina Kolata reported in the August 22, 2006 NY Times.

By 2030, predicts Robert W. Fogel, a Nobel laureate at the University of Chicago Graduate School of Business, about 25 percent of the G.D.P. will be spent on health care, making it ”the driving force in the economy,” just as railroads drove the economy at the start of the 20th century…

Other economists agree.

”We have to spend our money on something,” says Robert E. Hall, a Stanford University economist.

In a paper published in The Quarterly Journal of Economics, Dr. Hall and Charles I. Jones of the University of California, Berkeley, write: ”As we get older and richer, which is more valuable: a third car, yet another television, more clothing — or an extra year of life?”

David Cutler, an economist at Harvard, calculated the value of extra spending on medicine. ”Take a typical person aged 45,” he said. ”They will spend $30,000 more over their lifetime caring for cardiovascular disease than they would have spent in 1950. And they will live maybe three more years because of it.”

I guess this is why they call economics the dismal science. It should be noted in passing that the aforementioned Robert W. Fogel was the co-author with Stanley Engerman of “Time on the Cross”, a book that argued that slaves actually had it pretty good under the plantation system. His latest book is titled “The Escape from Hunger and Premature Death, 1700–2100: Europe, America, and the Third World” that posits a “technophysio evolution” that is filled with Panglossian enthusiasm about capitalism’s ability to bring prosperity to the developing world.

Another Harvard University adviser to Obama is Jeffrey Liebman, a Harvard economist who co-authored a paper on the feasibility of privatizing social security when he was an adviser to Bill Clinton. Apparently, the momentum toward adopting such a proposal was halted after the Monica Lewinsky affair put the president on the defensive. Liebman has co-authored a book on social security “reform” with Martin Feldstein, another Harvard economist who was–appropriately enough–the chairman of the Council of Economic Advisors under Ronald Reagan. In an article titled “The Rich, the Poor, and the Economists” that appeared in the January 2002 Monthly Review, Michael Yates notes the following:

Before he became Reagan’s chief economist, he [Feldstein] was an expert on the economics of social security. In published papers, he claimed to have empirically demonstrated that the social security system in the United States inhibited savings. Since savings are the source of capital investment, the implication of his research was that the social security system also reduced investment and thereby reduced the growth rate of the economy, since investment is the engine of economic growth.

Feldstein’s work fit nicely into the growing conservative movement which arose after the post World War Two boom came to an end in the early 1970s. The Keynesian economics that was gospel during my college years was giving way to a return to the pre-Keynesian theory that “freely” operating markets (free from the poison of government control and regulation) were the only solution to all economic problems. Led by the famous “Chicago Boys,” especially Milton Friedman, the anti-Keynesians carried the day in the economics profession and still do. No wonder, then, that when Ronald Reagan became president, he tapped Feldstein to chair the Council. For years, Reagan had been railing against social security from his General Electric radio pulpit. Now here was an economist who could lend professional credence to Reagan’s reactionary views. Social Security would be a tough nut to crack. It was an extremely popular program, run with great efficiency and effective in sharply reducing poverty among the elderly.

There was just one problem. Feldstein’s research was fatally flawed. Two staff economists at the Social Security Administration asked Feldstein for his supporting data. After three years of repeated requests, he sent the data to them. When they tried to use Feldstein’s numbers to replicate his results, however, they could not. They uncovered an error in the computer program Feldstein had used, and when they corrected the error, the results were exactly the opposite of Feldstein’s. That is to say, the social security system actually encouraged savings and, according to Feldstein’s cherished “free market” theory, facilitated capital formation and economic growth. (For more on this, see “‘Superstar’ Feldstein and His Little Mistake” in Dollars & Sense, Dec. 1980, pp. 1-2 and the citations therein.)

One imagines that the average primary voter in Iowa or New Hampshire has not even the slightest clue that Obama is carrying around such baggage. For most of them, the mantras of “change” and “hope” are supposed to be sufficient to earn their vote, at least that was what was expected in New Hampshire. In utter defiance of the media coronation of Obama, Hillary Clinton was the choice of the people in this miserable, economically stagnant New England state. The World Socialist Website, whose political insights are sometimes undermined by their boilerplate calls for building revolutionary parties (i.e., their own) has a rather astute explanation for Clinton’s victory:

The outcome of the Democratic primary suggests that Clinton benefited from a growing concern among working class voters over the state of the US economy. Clinton was the only candidate to raise the growing danger of recession in Saturday’s televised debate, and exit polls showed that the economy was the number one issue of those who turned out to vote, whether they cast a Democratic or a Republican ballot. A staggering 98 percent of those who voted in the Democratic primary said they were “very” or “somewhat” worried about the economy.

Clinton ran ahead of Obama in the working class industrial city of Manchester, New Hampshire’s largest, and there were significant class and economic distinctions between their voters. Clinton led Obama by sizeable margins among those with family incomes less than $100,000 a year, among union members, among those without college degrees, among those who felt that the state of the US economy is poor, and among those with children in the home. Her largest margin was among single working women.

Perhaps the most striking distinction between Clinton and Obama voters concerned feelings about their family’s economic futures. Those who said their families were “getting ahead” backed Obama by 48 to 31 percent. Those who said their families were “falling behind”—a much larger group—voted for Clinton by 43 to 33 percent.

Of course, they will eventually be disappointed in a Clinton presidency because her economic program and his are virtually identical. In considering the “differences” between the two, I am reminded of what Fred Halstead used to say when he was running for president on the Socialist Workers Party ticket exactly 40 years ago: “Whoever wins the election, the American people will end up the losers.”

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