Cartoon of the day

Special mention

Lemon socialism

Back in the day, we called it lemon socialism—when workers were allowed to take over or at least own some stake in enterprises that were failing. And we never thought it was a particularly good test of whether or not worker-owned enterprises were a viable alternative to capitalism.

I was thinking about this after I heard one of the exchanges between Bill Moyers and Richard Wolff last evening:

BILL MOYERS: But how do you answer this viewer? “In 1994 when United Airlines was on the brink of financial collapse a deal was made creating the biggest employee-owned company in the US. In 2002 the airline filed for bankruptcy.”

RICHARD WOLFF: My answer is the following and it’s very important. For workers to own something is one thing. For workers to become the directors of their own enterprise is something else. Worker ownership means for example, and we have lots of examples both in the United States and around the world, that the workers become in a sense shareholders. They are the technical owners.

But if the workers who become owners, and I’m not against that, but if the workers who become owners don’t change the way the enterprise is operated it remains a capitalist enterprise. It still has a board of directors, a handful of people who make all the decisions. It’s true that the workers may vote for who those people are, but they’ve left the structure of the enterprise in the old form, hierarchical, top-down. That’s what was done in United Airlines. I was involved in that. I actually know.

BILL MOYERS: How so?

RICHARD WOLFF: They called me in at a couple points to participate in some of the discussions, the International Association of Machinists, which was the union that was part of that. So they left the old capitalist structure, they weren’t willing to go beyond saying, “We, the workers, become owners, but we leave the running of the enterprise, the directing of it, the day to day decisions in the old form made by the old experts.” Part of a movement away from capitalism to a cooperative enterprise requires that the people of the United States stop believing that the folks at the top have some magical entitlement to give them that position.

To give a bit of history: United Airlines was losing a great deal of money in 1991 and 1992 (after taking over some of Pan Am’s operations during the 1980s and as a result of increased competition from low-cost carriers). So, in 1994, it created an Employee Stock Ownership Plan, through which United’s pilots, machinists, bag handlers, and non-contract employees came to own 55 percent of United’s stock in exchange for 15–25 percentage salary concessions, accompanied by a mountain of tax breaks. In May 2000 United went through a bitter contract dispute with its pilots’ union over pay cuts and concessions to fund the ESOP and overtime work. And it continued to lose money ($2.14 billion in 2001), leading to Chapter 11 bankruptcy in December 2002, when the ESOP itself was terminated.

Now, it’s probably true the unions could have done much more with their ownership share in United. But United created the ESOP not to make the transition to an employee-controlled enterprise but in order to raise capital to run the airline much as it had before, although on a lower-cost basis (because of employee concessions and the tax advantages associated with ESOPs). And, because of its finances, it was heading toward bankruptcy anyway. No employee decisions, at least in a short period of time, were going to overcome that.

So, in my view, United isn’t a particularly good example of the potential success but actual failure of democratic enterprises. It’s just an example of why the possibility of workers owning and controlling the places where they work needs to encompass much more than lemon socialism.

Cartoon of the day

Special mention

Chart of the day

About a dozen folks have sent me the link to this video (which includes lots of charts).

It does a good job highlighting the grotesque levels of inequality in the distribution of wealth in the United States, along with Americans’ opinions both about how unequal the distribution actually is (much less equal than it actually is) and about how unequal it should be (much more equal than it is).*

However, the video is also a bit troubling, in terms of both its definition of socialism (who else in the world defines socialism as an equal distribution of wealth?) and its presumption that inequality is necessary for people to exert effort (why blithely assert that people have an incentive to work hard because wealth is unequally distributed—instead of, for example, those at the top merely finding ways of capturing and keeping more than their share of the wealth that is created?)

Still, the video is useful for showing how obscenely unequal the distribution of wealth is in the United States.

*I discussed the study the creator of this video is referring to back in 2010, and then again in 2011.

Clearly what we need are more detective stories

 

That’s because, according to Ludwig von Mises, detective stories are “the artistic superstructure of the epoch of labor unionism and socialization.”

The age in which the radical anticapitalistic movement acquired seemingly irresistible power brought about a new literary genre, the detective story. The same generation of Englishmen whose votes swept the Labour Party into office were enraptured by such authors as Edgar Wallace. One of the outstanding British socialist authors, G. D. H. Cole, is no less remarkable as an author of detective stories. A consistent Marxian would have to call the detective story—perhaps together with the Hollywood pictures, the comics and the “art” of strip-tease—the artistic superstructure of the epoch of labor unionism and socialization.

Me, I’m partial to historical mysteries (such as An Instance of the Fingerpost, by Ian Pears). Do they count?

After the end of history

I have often made the argument that capitalism faces a legitimation crisis, that it has not delivered on its promises.

Bhaskar Sunkara [ht: sm] makes a similar argument, beginning with the visions of tomorrow presented at the 1939 World’s Fair in New York, continuing through the “new economies” of the 1970s and 1990s, and ending with the Great Recession of 2008-09.

For many in my generation, the ideological underpinnings of capitalism have been undermined. That a higher percentage of Americans between the ages of 18 and 30 have a more favorable opinion of socialism than capitalism at least signals that the cold war era conflation of socialism with Stalinism no longer holds sway.

Sunkara then presents an alternative vision:

Marxism in America needs to be more than an intellectual tool for mainstream commentators befuddled by our changing world. It needs to be a political tool to change that world. Spoken, not just written, for mass consumption, peddling a vision of leisure, abundance, and democracy even more real than what the [sic] capitalism’s prophets offered in 1939. A socialist Disneyland: inspiration after the “end of history”.

We have met the enemy. . .

Obama’s willingness to give away the store in current negotiations over the budget is driving liberal-minded Americans crazy. As for the Left, well, ‘nuf said.

Obama and the rest of the Democratic Party now stand for tax cuts on all but the wealthiest Americans? And they’re willing to cut future Social Security benefits in exchange for a budget deal?

Clearly, the official structure of U.S. politics has shifted to the Right. The Tea Party nutters now run the Republican Party, which can’t even muster enough votes to raise taxes on the .01 percent, while the Democrats have lost whatever working-class soul remained in the aftermath of the Clinton takeover of the party.

Which is pretty much the view of Bruce Bartlett. And, of course, of many others. What’s interesting about Bartlett’s analysis is that he identifies two main factors: the decline of the trade union movement and the collapse of the Soviet Union.

When the AFL-CIO was strong, it looked out for the working class as a whole. Its leadership understood that improving the pay and benefits of all workers was ultimately to the benefits of unionized workers. Labor support was critical to the passage of every important piece of social welfare legislation since the 1930s. Hence the decline of unionization has deprived liberals of their most important ally.

Secondly, the collapse of the Soviet Union essentially led to the collapse of support for socialism worldwide. I think voters bought the idea that the economist F.A. Hayek made during World War II that socialism impoverishes people and necessarily becomes totalitarian eventually. The disappearance of socialism as a viable political philosophy deprived liberals of their ideological anchor, causing liberalism itself to drift rightward with the tide.

Let me focus on the second point. In my view, socialist ideas haven’t disappeared. Not entirely. But, in the United States at least, it is certainly much more difficult to call oneself a socialist and to put forward openly socialist ideas than it has been for much of the past century (even with the end of the Cold War). The result is both a decline of the Left and, in Bartlett’s analysis, a shift to the Right of the once-liberal Democratic Party.

And that raises an important point: it’s not that the resurgence of more conservative ideas has made life difficult for the Left (which is what many left-wing types seem to want to believe). Rather, it’s the virtual disappearance, at least in public life, of socialists and socialist ideas that has permitted a shift to the right of the Democratic Party (and, with it, of course, the Republican Party).

In other words, as Pogo would say, we have met the enemy and he us is.

Socially blind and deaf

source [ht: sm]

As part of a wider set of attacks on Hellen Keller by the mainstream media, the editor of the Brooklyn Eagle wrote that her “mistakes sprung out of the manifest limitations of her development.” In 1912, Keller responded, referring to having met him before he knew of her political views:

At that time the compliments he paid me were so generous that I blush to remember them. But now that I have come out for socialism he reminds me and the public that I am blind and deaf and especially liable to error. I must have shrunk in intelligence during the years since I met him. Surely it is his turn to blush. It may be that deafness and blindness incline one toward socialism. Marx was probably stone deaf and William Morris was blind. Morris painted his pictures by the sense of touch and designed wall paper by the sense of smell.

Oh, ridiculous Brooklyn Eagle! What an ungallant bird it is! Socially blind and deaf, it defends an intolerable system, a system that is the cause of much of the physical blindness and deafness which we are trying to prevent. The Eagle is willing to help us prevent misery provided, always provided, that we do not attack the industrial tyranny which supports it and stops its ears and clouds its vision. The Eagle and I are at war. I hate the system which it represents, apologizes for and upholds. When it fights back, let it fight fair. Let it attack my ideas and oppose the aims and arguments of Socialism. It is not fair fighting or good argument to remind me and others that i cannot see or hear. I can read. I can read all the socialist books I have time for in English, German and French. If the editor of the Brooklyn Eagle should read some of them, he might be a wiser man and make a better newspaper. If I ever contribute to the Socialist movement the book that I sometimes dream of, I know what I shall name it: Industrial Blindness and Social Deafness.

What’s in a word?

Apparently, ”socialism” and “capitalism” were the two most frequently looked-up words at Merriam-Webster.com this year.

And, unfortunately, this is what they found:

Country of the takers

Is anyone else reminded of the last scene in Planet of the Apes when listening to or reading Republicans’ attempt to make sense of Tuesday’s election results?

[riding down the beach in the last scene] Oh my God… I’m back. I’m home. All the time it was… we finally really did it. [screaming] YOU MANIACS! YOU BLEW IT UP! OH, DAMN YOU! GODDAMN YOU ALL TO HELL! (camera pans to reveal the half-destroyed Statue of Liberty sticking out of the sand)

Here, to choose one example, is John Hinderaker on “The Meaning of Yesterday’s Defeat”:

Put bluntly, the takers outnumber the makers. The polls in this election cycle diverged in a number of ways, but in one respect they were remarkably consistent: every poll I saw, including those that forecast an Obama victory, found that most people believed Mitt Romney would do a better job than Barack Obama on the economy. So with the economy the dominant issue in the campaign, why did that consensus not assure a Romney victory? Because a great many people live outside the real, competitive economy. Over 100 million receive means tested benefits from the federal government, many more from the states. And, of course, a great many more are public employees. To many millions of Americans, the economy is mostly an abstraction.

Then there is the fact that relatively few Americans actually pay for the government they consume. To a greater extent than any other developed nation, we rely on upper-income people to finance our federal government. When that is combined with the fact that around 40% of our federal spending isn’t paid for at all–it is borrowed–it is small wonder that many self-interested voters are happy to vote themselves more government. Mitt Romney proclaimed that Barack Obama was the candidate of “free stuff,” and voters took him at his word.

The question is, can this vicious cycle ever be broken? Once we are governed by a majority that no longer believes in the America of the Founding, is there any path back to freedom and prosperity? The next four years will bring unprecedented levels of spending, borrowing and taxation. The national debt will rise to $20 trillion or more. When interest rates increase, as they inevitably must, interest costs will squeeze out other government spending. That might not be all bad, except that defense will go first. If Obama’s second term turns into a disaster, fiscal or otherwise, voter revulsion may return the Republicans to power. But that doesn’t mean that America will be saved.

To me, the most telling incident of the campaign season was a poll that found that among young Americans, socialism enjoys a higher favorability rating than free enterprise. How can this possibly be, given the catastrophic failure of socialism, and the corresponding success of free enterprise, throughout history? The answer is that conservatives have entirely lost control over the culture. The educational system, the entertainment industry, the news media and every cultural institution that comes to mind are all dedicated to turning out liberals. To an appalling degree, they have succeeded. Historical illiteracy is just one consequence. Unless conservatives somehow succeed in regaining parity or better in the culture, the drift toward statism will inevitably continue, even if Republicans win the occasional election.

And then there’s Hinderaker’s final scene:

The stark question posed by the country’s unmistakable drift to the left is, does America have a future? Can we once again become a beacon of freedom, or will talented young Americans be forced to look elsewhere for opportunity? Barack Obama’s budget–the one that was too extreme to garner a single vote in either the House or the Senate–projects that in four years, we will have a $20 trillion debt. That debt will be paid off by a relatively small minority of our young people, the most productive. If you were in that category, and had to make a choice between staying in the United States and inheriting a debt that could well be $1 million or more, and starting fresh in another country, what would you do? And if you were an investor, where would you put your money? In the United States, where hopelessness reigns and where high unemployment and close to zero growth are now accepted as normal, or in a country with limited government and a dynamic, growing economy?

These are dark days, indeed.