Archive for February, 2018

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NEWSWEEK FEB. 16 COVER

Just nine years ago, in the midst of the Second Great Depression, Newsweek declared that “we are all socialists now.”

Now, it’s true, editor-in-chief Jon Meacham demonstrated little understanding of the term socialism, identifying it simply with more government spending and regulation in a capitalist economy—something akin to “a modern European state.”

This is not to say that berets will be all the rage this spring, or that Obama has promised a croissant in every toaster oven. But the simple fact of the matter is that the political conversation, which shifts from time to time, has shifted anew, and for the foreseeable future Americans will be more engaged with questions about how to manage a mixed economy than about whether we should have one.

And that may be what millions of Americans—especially young Americans—think of when they express a favorable image of socialism. But I suspect there’s something more to it, and that their interest in socialism also includes a desire for less inequality and more fairness in economic and social outcomes and support for proposals that others (including probably Meacham himself) consider utopian: universal healthcare, free public higher education, large increases in workers’ wages, a guaranteed basic income for all, and so on.

But that still leaves us a large step removed from—and frankly far behind—the trenchant criticisms and ambitious projects of the utopian socialists of the late-eighteenth and early-nineteen centuries. I’m thinking of such figures as Henri de Saint-Simon, Charles Fourier, and Robert Owen. They sought both to radically remake people’s understanding of how human beings and social relations operate and to transform society itself by designing new economic and social institutions, all in an attempt to improve the condition of the working-classes of the time. They criticized everything, from private property and the structure of the family to the role of money and the degradation of workers being forced to submit to their employers and then sought to correct those problems—not just by promoting more government involvement, but by imagining and implementing radically different ways of organizing economic and social life.

There is a great deal to admire, then, in the ambitious theoretical and practical work of that first generation of utopian socialists. And yet today, utopian is a label that is invoked to dismiss any and all suggestions that things could be radically different—that socialism, however defined (beyond, of course, Meacham’s restrictive conception), is simply a pipe dream.

Unfortunately, people continue to hold to the idea that Marx and Engels, still the most important source for contemporary socialist thinking, likewise dismissed the ideas of the utopian socialists as unattainable or fanciful hopes or schemes. Yet, nothing could be further from the truth.

The main source of that view is, of course, the Communist Manifesto—specifically, chapter 3 on “socialist and communist literature.” There, Marx and Engels do in fact refer to “castles in the air” and the “fanatical and superstitious belief in the miraculous effects of their social science.” But they’re only talking about the disciples of the utopian socialists, those who in the middle of the nineteenth century continued to “hold fast by the original views of their masters,” because from the perspective of Marx and Engels they attempted “to deaden the class struggle and to reconcile the class antagonisms.”

But the authors of the Manifesto held a much more positive view of the writings of Saint-Simon, Fourier, and Owen. Marx and Engels credited them with attacking “every principle of existing society.”

Hence, they are full of the most valuable materials for the enlightenment of the working class.

They used the utopian label to refer to the practical measures proposed by the early socialists—”such as the abolition of the distinction between town and country, of the family, of the carrying on of industries for the account of private individuals, and of the wage system, the proclamation of social harmony, the conversion of the function of the state into a more superintendence of production”—that did not lead to “political action on the part of the working-class,” which by the mid-nineteenth century was beginning to take place.

The voluminous writings of Marx and especially Engels include many other discussions of the utopian socialists, many of them much more flattering than in the polemical Manifesto.

For example, Engels, of scientific socialism renown, wrote a series of articles on the development of radical social movements on the continent, between 1842 and 1844 in, of all places, Robert Owen’s periodical The New Moral World. They include this paragraph on Fourier:

Nearly at the same time with Saint-Simon, another man directed the activity of his mighty intellect to the social state of mankind — Fourier. Although Fourier’s writings do not display those bright sparks of genius which we find in Saint-Simon’s and some of his disciples; although his style is hard, and shows, to a considerable extent, the toil with which the author is always labouring to bring out his ideas, and to speak out things for which no words are provided in the French language — nevertheless, we read his works with greater pleasure; and find more real value in them, than in those of the preceding school. . .It was Fourier, who, for the first time, established the great axiom of social philosophy, that every individual having an inclination or predilection for some particular kind of work, the sum of all these inclinations of all individuals must be, upon the whole, an adequate power for providing for the wants of all. From this principle, it follows, that if every individual is left to his own inclination, to do and to leave what he pleases, the wants of all will be provided for, without the forcible means used by the present system of society.

We also need to take into account a much later text, the three chapters of Engels’s 1878 Herr Eugen Dühring’s Revolution in Science, which were published two years later as the famous pamphlet, “Socialism: Utopian and Scientific.”

There, Engels explains the appearance of utopian socialism in the late-eighteenth and early-nineteenth centuries by the disappointment with the social and political institutions created by the “triumph of reason” of the French Revolution.

All that was wanting was the men to formulate this disappointment, and they came with the turn of the century. In 1802, Saint-Simon’s Geneva letters appeared; in 1808 appeared Fourier’s first work, although the groundwork of his theory dated from 1799; on January 1, 1800, Robert Owen undertook the direction of New Lanark.

What follows is what can only be considered effusive praise for the ideals and ideas of Saint-Simon, Fourier, and especially Owen. Here he expresses his admiration at some length for Owen:

At this juncture, there came forward as a reformer a manufacturer 29-years-old – a man of almost sublime, childlike simplicity of character, and at the same time one of the few born leaders of men. Robert Owen had adopted the teaching of the materialistic philosophers: that man’s character is the product, on the one hand, of heredity; on the other, of the environment of the individual during his lifetime, and especially during his period of development. In the industrial revolution most of his class saw only chaos and confusion, and the opportunity of fishing in these troubled waters and making large fortunes quickly. He saw in it the opportunity of putting into practice his favorite theory, and so of bringing order out of chaos. . .Whilst his competitors worked their people 13 or 14 hours a day, in New Lanark the working-day was only 10 and a half hours. When a crisis in cotton stopped work for four months, his workers received their full wages all the time. . .

In spite of all this, Owen was not content. The existence which he secured for his workers was, in his eyes, still far from being worthy of human beings. “The people were slaves at my mercy.” The relatively favorable conditions in which he had placed them were still far from allowing a rational development of the character and of the intellect in all directions, much less of the free exercise of all their faculties. . .

His advance in the direction of Communism was the turning-point in Owen’s life. As long as he was simply a philanthropist, he was rewarded with nothing but wealth, applause, honor, and glory. He was the most popular man in Europe. . .But when he came out with his Communist theories that was quite another thing. Three great obstacles seemed to him especially to block the path to social reform: private property, religion, the present form of marriage.

He knew what confronted him if he attacked these – outlawry, excommunication from official society, the loss of his whole social position. But nothing of this prevented him from attacking them without fear of consequences, and what he had foreseen happened. Banished from official society, with a conspiracy of silence against him in the press, ruined by his unsuccessful Communist experiments in America, in which he sacrificed all his fortune, he turned directly to the working-class and continued working in their midst for 30 years. Every social movement, every real advance in England on behalf of the workers links itself on to the name of Robert Owen.

I could go on. Clearly, Engels admired both Owen and his utopian socialist proposals and projects.

There’s no doubt that Marx and Engels engaged in running battles with other radical (socialist, anarchist, and so on) thinkers of their own time, reserving particular scorn for Pierre-Joseph Proudhon (best exemplified by the Poverty of Philosophy) but, even then, they retain their respect for the utopian socialists, both of which we can see in Marx’s 1866 letter to Ludwig Kugelmann:

Proudhon has done enormous harm. His pseudo-critique and his pseudo-confrontation with the Utopians (he himself is no more than a philistine Utopian, whereas the Utopias of such as Fourier, Owen, etc., contain the presentiment and visionary expression of a new world) seized hold of and corrupted first the ‘jeunesse brillante’ the students, then the workers, especially those in Paris, who as workers in luxury trades are, without realising it, themselves deeply implicated in the garbage of the past.

But we do know, of course, that Marx and Engels did in fact reject “utopian socialism” for their own time, in the middle of the nineteenth century, during the formation and development of the First International. On what basis?

As I see it, their rejection of utopian socialism (and their defense of so-called scientific socialism) rests on two main pillars: the role of the working-class and the project of critique.

There’s no doubt, Marx and Engels envisioned the movement beyond capitalism not in terms of realizing some ideal scheme, no matter how well inspired and worked-out, but as the task of the growing working-class. In other words, the idea was that capitalism produces its own grave-diggers. The growth of capitalism—the widening and deepening of capital—was accompanied by the growth of a class that had both the interest and the means to overturn the rule of capital. A class that could challenge the pretensions of capital to become a universal class, by posing its own universal aspirations—not for everyone to become a laborer but to criticize and eventually abolish the wages system itself and lay the basis for a different, noncapitalist way of organizing economic and social life.

Today, as capitalism continues to produce ever more obscene levels of inequality and to leave workers in ever greater depths of despair, we need both to defend utopian thinking—to recover the radical spirit of earlier utopian socialists and their critics—and to take up the challenge of defining what a socialism for our own time will look like.

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According to the Tax Justice Network, the United States ranks second in the 2018 Financial Secrecy Index. This is based on a secrecy score of 59.8, which is practically unchanged from 2015. The only country ahead of the United States is Switzerland, with a secrecy score of 76. The rise of the United States continues a long-term trend, as the country was one of the few to increase their secrecy score in the 2015 index.

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The continued rise of the United States in the 2018 index comes on the back of a significant change in the U.S. share of the global market for offshore financial services. Between 2015 and 2018, the United States increased its market share by 14 percent. In total, the United States accounts for 22.3 percent of the global market in offshore financial services.

So, actually, we’re #1!

History

The United States has long been a secrecy jurisdiction or tax haven at the federal level. For example, the 1921 Revenue Act exempted interest income on bank deposits owned by non-US residents, and this was explicitly justified at the time as a measure to a attract (tax-evading) foreign capital to the United States.

Another factor influencing policy makers later on was the Vietnam War, which opened up growing external balance of payments deficits—after a long history of surpluses. The United States increasingly needed foreign loans to finance these deficits and it did so, in significant part, by a attracting the proceeds of tax evasion and other illicit foreign money. Foreigners invested in the United States for many reasons, not least the fact of the U.S. dollar being the global reserve currency—but secrecy and tax-free treatment were also key attractions.

Alongside this history of U.S. federal-level secrecy, individual U.S. states have been hosting the formation of secretive shell companies—especially as several states (such as Delaware, Wyoming, and Nevada) have engaged in a race to the bottom to outbid one other in offering ever more egregious secrecy facilities.

Here is how it works. A wealthy Ukrainian, say, sets up a Delaware shell company using a local company forma on agent. That Delaware agent will provide nominee officers and directors (typically lawyers) to serve as fronts for the real owners, and their details and photocopies of their passports can be made public but that gets you no closer to who the genuine Ukrainian owner of that company is: if the nominees are lawyers they are bound by attorney-client privilege not to reveal the information (if they even have it: the owner of that shell company may be another secretive shell company or trust somewhere else). The company can run millions through its bank account but nobody—whether domestic or foreign law enforcement—can crack through that form of secrecy in any efficient or effective way.