On the fallacies of an Emerging Global Left

Socialism is unrealizable as an economic system because a socialist society would not have any possibility of resorting to economic calculation. This is why it cannot be considered as a system of society’s economic organization. It is a means to disintegrate social cooperation and to bring about poverty and chaos.” Ludwig von MisesMoney, Method, and the Market Process.

Recently, an article from the blog Poverty Matters (supported by the Bill and Melinda Gates Foundation) authored by Jayati Ghosh in the Guardian elaborates on how a new global left is emerging as a result of a transcendance of the traditional socialist paradigm.  Ghosh explains that this new global left has is currently transcending the traditional socialist emphasis on “centralised government control over an undifferentiated mass of workers, to incorporate more explicit emphasis on the rights and concerns of women, ethnic minorities, tribal communities and other marginalised groups, as well as recognition of ecological constraints and the social necessity of respecting nature.”  This transcendance is occurring via what Ghosh considers to be seven common threads that are not new but a result of a “collective failure of memory”.

These threads are:

  1. An attitude to what constitutes democracy,
  2. the rejection of overcentralisation,
  3. a more complex approach to property rights,
  4. a discourse in the language of “rights”,
  5. a realization that addressing issues only in class terms is not sufficient,
  6. a emphasis on gender as a a cause for addressing issues,
  7. an emphasis on environmental conservation, the protection of ecosystems, biodiversity and the integrity of a country’s genetic assets.

I wonder what Ghosh considered to be the traditional socialist paradigma.  Socialism and the ideas behind this socioeconomic system of collective ownership of the means of production is very diverse and it is incorrect and inaccurate to speak of a single socialist paradigm.  More so, what seems a New emergence of the left is in fact not occurring anywhere in the world.

Collectivism (inaccurately generalized as “the left”) in its many names and shapes continues developing itself within the same framework of ideas that have been used for centuries. While the historical context has changed the principles continue being the same.  As such, the thread number 1 which seems for Ghosh as a new attitude toward democracy is the result of the failure of the previous collectivist governments that have ruled the world.  There is no real change in the attitude toward democracy since collectivist ideas consider democracy as a means to the value they aim to achieve: collective power over the collective.  The only way of having a new attitude toward democracy would be in fact to reject it as a mean to achieve any end successfully.  This of course is not happening anywhere in the collectivist groups of the world.

As well, the point number two of overcentralisation is false since collectivism is a centralized system of organization in which at the end of the day the sole power over everything resides in the collective government.  The only change is not of how centralization happens but on how many people are to be managing that collective government (the Party, elites, corporations, oligarchies, et al).

Point number three and four have nothing new and are the same exact approaches that collectivism has had since it origin in regard to property and rights.  Collectivist philosophies consider all in essence the private ownership of the means of production to be evil, static in nature and inefficient to satisfy the needs of humanity. Its approach to rights is rooted on the principle that the only important rights are those of the collective and thus reject the individual rights of its members.

Points five, six and seven have also not changed in the collectivist mindset since they are rooted in the principles of class struggle that have only continued the trend of understanding society as a competing/destructive system based on gender, race, culture, religion, etc.  The principle continues the same: The so called  tension or antagonism continues to exists in their interpretation of society due to competing socioeconomic interests between people.

By definition, the only way in which any real change, evolution or overcoming of a collectivist philosophy in the globe will arise when the discourse starts by rejecting the philosophical principles in which they are rooted.  As such, unless they understand how and why the collectivist philosophy is full of fallacious principles that have caused death and poverty for centuries, there is nothing that will change.  There is no emergence of a new left, there is no resurgence of collectivism and the dialectics of historical materialism continue existing in the core of all collectivist philosophies.  It will be only until intellectuals have the common-sense and moral courage to question their philosophies of life that we may seem an end to centuries of collectivist failed projects of organizing society.  Until that day what we will continue seeing is the same social system that has destroyed the best within man for ages.

Discourse: Nationalization, Private Companies and Crony Capitalism

The neoliberal (a.k.a. crony capitalism) ruling of the world during the last 50 years is usually generalized as a “big fish eats small fish” relationship. The story continues, with the big fish in Washington, Brussels and Moscow fed themselves with the riches of the world and profited from globalization.  Meanwhile, the small fish continued breeding and feeding the always hungry lords.  This general discourse is repeated in most if not all the academic papers dealing with postcoloniality and globalization.

The impact of the ideas of these intellectuals is widespread and not easily observable for the ignorant masses.  As such, when you read the newspapers in Latin America or Africa in regard to the “new” nationalizations being undertaken by the “new” socialist/anti-neoliberal governments in Argentina, Bolivia, Brazil, Greece, Lithuania, and Sri Lanka since 2011 people usually ignores that there is nothing “new” in these actions.

These nationalizations of privately owned assets have been in many of the cases actual renationalizations of companies that were not owned by the principles of free market ideas, but that had been privatized by corrupt social democratic governments 50, 40 or 10 years before and who created new privately owned privileged companies.  As a result of these social democrat and socialist governments many privately owned companies emerged as the bastions of crony capitalism, inefficiency and corruption.  The previous, generally increased as closer the national industries were owned by crony private companies that owned single-crop cultive exports and resource rich regions.

To mention short examples of the previous, recently in Argentina Yacimientos Petrolíferos Fiscales (YPF; English: “Treasury Petroleum Fields”) was renationalized (not nationalized) by the government under claims of corruption, inefficiency and negative benefits to their national interests.  In Bolivia, Transportadora de Electricidad (TDE) was nationalized by Evo Morales government.  However, TDE was also a fruit of the neoliberal and crony capitalist deals established in 1952 after a coup d’état that established a military socialist democracy with the party  Revolutionary Nationalist Movement (MNR) which allied into a military-nationalist clique that lasted for 50 years.

Privately owned companies produce always more efficient and better products than state-owned companies.  However, privately owned companies that have benefited from government granted privileges for decades not necessarily will produce more and better services and products than state-owned companies.  The previous is something that few of us dare to identify and explain with a non-contradictory historical and philosophical background.  Meanwhile, the great majority of academics influenced by collectivist philosophies will start writing articles and books applauding the “successful” renationalizations and condemning those free-market authors who will write back and fight.

Indeed, there is a difficult road in defending private property and privately owned businesses in the context of countries and regions that lack respect for individual rights and the rule of law.  As such, to defend the private vs collective in those circles it is necessary that first we identify how the societies are currently organized around the collective inefficient systems of social and economic organization.  In the case of Bolivia and Argentina it is necessary for us to identify how these business and societies are not structured and organized around the principles of free market and individual rights.  By understanding and explaining this clearly there will be a chance to change the discourse of discussion from “why is renationalization good?” to “why laissez faire capitalism is better than the privately owned business of crony capitalism?”

Corporatism (a.k.a. Neo-Patrimonialism) is not Capitalism

JP Morgan Chase Tower in Dallas, Texas.

Right now, there is a lot of talk about the evils of “capitalism”.  But it is not really accurate to say that we live in a capitalist system.  Rather, what we have in the United States today, and what most of the world is living under, is much more accurately described as “corporatism”.  Under corporatism, most wealth and power is concentrated in the hands of giant corporations and big government is used as a tool by these corporations to consolidate wealth and power even further.  In a corporatist system, the wealth and power of individuals and small businesses is dwarfed by the overwhelming dominance of the corporations.  Eventually, the corporations end up owning almost everything and they end up dominating nearly every aspect of society.  As you will see below, this very accurately describes the United States of America today.  Corporatism is killing this country, and it is not what our founding fathers intended.

The following is the definition of “corporatism” from the Merriam-Webster dictionary….

the organization of a society into industrial and professional corporations serving as organs of political representation and exercising control over persons and activities within their jurisdiction

Corporatism is actually not too different from socialism or communism.  They are all “collectivist” economic systems.  Under corporatism, wealth and power are even more highly concentrated than they are under socialism or communism, and the truth is that none of them are “egalitarian” economic systems.  Under all collectivist systems, a small elite almost always enjoys most of the benefits while most of the rest of the population suffers.

The Occupy Wall Street protesters realize that our economic system is fundamentally unjust in many ways, but the problem is that most of them want to trade one form of collectivism for another.

But our founding fathers never intended for us to have a collectivist system.

Instead, they intended for us to enjoy a capitalist system where true competition and the free enterprise system would allow individuals and small businesses to thrive.

In an article that was posted earlier this year on Addicting Info, Stephen D. Foster Jr. detailed how our founding fathers actually felt about corporations….

The East India Company was the largest corporation of its day and its dominance of trade angered the colonists so much, that they dumped the tea products it had on a ship into Boston Harbor which today is universally known as the Boston Tea Party. At the time, in Britain, large corporations funded elections generously and its stock was owned by nearly everyone in parliament. The founding fathers did not think much of these corporations that had great wealth and great influence in government. And that is precisely why they put restrictions upon them after the government was organized under the Constitution.

After the nation’s founding, corporations were granted charters by the state as they are today. Unlike today, however, corporations were only permitted to exist 20 or 30 years and could only deal in one commodity, could not hold stock in other companies, and their property holdings were limited to what they needed to accomplish their business goals. And perhaps the most important facet of all this is that most states in the early days of the nation had laws on the books that made any political contribution by corporations a criminal offense.

Our founding fathers would have never approved of any form of collectivism.  They understood that all great concentrations of wealth and power represent a significant threat to the freedoms and liberties of average citizens.

Are you not convinced that we live in a corporatist system?

Well, keep reading.

The following are 7 things about the monolithic predator corporations that dominate our economy that every American should know….

#1 Corporations not only completely dominate the U.S. economy, they also completely dominate the global economy as well.  A newly released University of Zurich study examined more than 43,000 major multinational corporations.  The study discovered a vast web of interlocking ownerships that is controlled by a “core” of 1,318 giant corporations.

But that “core” itself is controlled by a “super-entity” of 147 monolithic corporations that are very, very tightly knit.  As a recent article in NewScientist noted, these 147 corporations control approximately 40 percent of all the wealth in the entire network….

When the team further untangled the web of ownership, it found much of it tracked back to a “super-entity” of 147 even more tightly knit companies – all of their ownership was held by other members of the super-entity – that controlled 40 percent of the total wealth in the network. “In effect, less than 1 percent of the companies were able to control 40 percent of the entire network,” says Glattfelder. Most were financial institutions. The top 20 included Barclays Bank, JPMorgan Chase & Co, and The Goldman Sachs Group.

Unsurprisingly, the “super-entity” of 147 corporations is dominated by international banks and large financial institutions.  For example, JP Morgan Chase, Goldman Sachs, Morgan Stanley and Bank of America are all in the top 25.

#2 This dominance of the global economy by corporations has allowed global wealth to become concentrated to a very frightening degree.

According to Credit Suisse, those with a household net worth of a million dollars or more control 38.5% of all the wealth in the world.  Last year, that figure was at 35.6%.  As you can see, it is rapidly moving in the wrong direction.

For a group of people that represents less than 0.5% of the global population to control almost 40 percent of all the wealth is insane.

The dominance of corporations is also one of the primary reasons why we are witnessing income inequality grow so rapidly in the United States.  The following comes from a recent article in the Los Angeles Times….

An economic snapshot from the Economic Policy Institute shows that inflation-adjusted incomes of the top 1% of households increased 224% from 1979 to 2007, while incomes for the bottom 90% grew just 5% in the same time period. Those in the top 0.1% of income fared even better, with incomes growing 390% over that time period.

You can see a chart that displays these shocking numbers right here.

#3 Since wealth has become concentrated in very few hands, that means that there are a whole lot of poor people out there.

At a time when technology should be making it possible to lift standards of living all over the globe, poverty just continues to spread.  According to the same Credit Suisse study referenced above, the bottom two-thirds of the global population controls just 3.3% of all the wealth.

Not only that, more than 3 billion people currently live on less than 2 dollar a day.

While the ultra-wealthy live the high life, unimaginable tragedies play out all over the globe every single day.  Every 3.6 seconds someone starves to death and three-quarters of them are children under the age of 5.

#4 Giant corporations have become so dominant that it has become very hard for small businesses to compete and survive in the United States.

Today, even though our population is increasing, the number of small businesses continues to decrease.

According to the Bureau of Labor Statistics, 16.6 million Americans were self-employed back in December 2006.  Today, that number has shrunk to 14.5 million.

This is the exact opposite of what should be happening under a capitalist system.

#5 Big corporations completely dominate the media.  Almost all of the news that you get and almost all of the entertainment that you enjoy is fed to you by giant corporations.

Back in 1983, somewhere around 50 corporations controlled the vast majority of all news media in the United States.

Today, control of the news media is concentrated in the hands of just six incredibly powerful media corporations.

#6 Big corporations completely dominate our financial system.  Yes, there are hundreds of choices in the financial world, but just a handful control the vast majority of the assets.

Back in 2002, the top 10 banks controlled 55 percent of all U.S. banking assets.  Today, the top 10 banks control 77 percent of all U.S. banking assets.

The “too big to fail” banks just keep getting more and more powerful.  For example, the “big six” U.S. banks (Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo) now possess assets equivalent to approximately 60 percent of America’s gross national product.

#7 Big corporations completely dominate our political system.  Because they have so much wealth and power, corporations can exert an overwhelming amount of influence over our elections.  Studies have shown that in federal elections the candidate that raises the most money wins about 90 percent of the time.

Politics in America is not about winning over hearts and minds.

It is about who can raise the most cash.

Sometimes this truth leaks out a bit in the mainstream media.  For example, during a recent show on MSNBC, Dylan Ratigan made the following statement….

“The biggest contributor to Barack Obama’s presidential campaign is Goldman Sachs. The primary activities of this president relative to banking have been to protect the most lucrative aspect of that business, which is the dark market for credit default swaps and the like. That has been the explicit agenda of his Treasury Secretary. This president is advocating trade agreements that allow enhanced bank secrecy in Panama, enhanced murdering of union members in Colombia, and the refunding of North Korean slaves.”

Later on, Ratigan followed up by accusing both political parties of working for the bad guys….

“But I guess where I take issue is, this president is working for the bad guys. The Democrats are working for the bad guys. So are the Republicans. The Democrats get away with it by saying, ‘Look at how crazy the Republicans are; at the Democrats pretend to care about people.’ BUT THE FACT IS THE 2-PARTY POLITICAL SYSTEM IS UTTERLY BOGUS.”

Wow – nobody is actually supposed to say that on television.

Today, most of our politicians are bought, and most of them actively help the monolithic predator corporations accumulate even more wealth and even more power.

In fact, as I wrote about recently, the big Wall Street banks are already trying to buy the election in 2012.

Fortunately, it looks like the American people are starting to wake up.  According to one recent survey, only 23 percent of all Americans now trust the financial system, and 60 percent of all Americans are either “angry” or “very angry” about the economy.

Unfortunately, many of them are joining protest movements such as Occupy Wall Street which are calling for one form of collectivism to replace another.

The American people are being given a false choice.

We don’t have to choose between corporatism and socialism.

We don’t have to choose between big corporations and big government.

Our founding fathers actually intended for corporations and government to both be greatly limited.

The following is a famous quote from Thomas Jefferson….

“I hope that we shall crush in its birth the aristocracy of our monied corporations, which dare already to challenge our government to a trial of strength, and bid defiance to the laws of our country.”

Unfortunately, things did not turn out how Jefferson wanted.  Instead of us controlling the corporations, they now control us.

This next quote is from John Adams….

“Banks have done more injury to the religion, morality, tranquility, prosperity, and even wealth of the nation than they can have done or ever will do good.”

But who dominates our economy today?

The big banks.

Perhaps we should have listened to founding fathers such as John Adams.

Lastly, here is another quote from Thomas Jefferson….

“If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered.”

How prescient was that quote?

Last year, over a million American families were booted out of their homes by the big banks.  The financial institutions actually now have more total equity in our homes than we do.

Unemployment is rampant, but corporate profits are soaring.  The number of Americans on food stamps has increased by more than 70 percent since 2007, and yet the incomes of those at the top of the food chain continue to increase.

We need a system that allows all Americans to start small businesses, compete fairly and have a chance at success.

Instead, what we have is a corporatist system where the big corporations have most of the wealth, most of the power and most of the advantages.

We need to get the American people to understand that corporatism is not capitalism.

Corporatism is a collectivist system that allows the elite to accumulate gigantic amounts of wealth and power.

The answer to such a system is not to go to a different collectivist system.

Rather, we need to return as much power as possible to individuals and small businesses.

Our founding fathers intended for us to live in a country where power was highly decentralized.

Why didn’t we listen to them?

Source of the article: Corporatism Is Not Capitalism: 7 Things About The Monolithic Predator Corporations That Dominate Our Economy That Every American Should Know