Category Archives: Economics
The Coronavirus Crisis Is a Monster Fueled by Capitalism by Mike Davis, In These Times, 3-20-20
…A year from now we may look back in admiration at China’s success in containing the pandemic and in horror at the US failure. Since at least 2000 we’ve repeatedly seen breakdowns in frontline healthcare. Both the 2009 and 2018 flu seasons, for instance, overwhelmed hospitals across the country, exposing the shocking shortage of hospital beds after years of profit-driven cutbacks of in-patient capacity. According to the American Hospital Association, the number of in-patient hospital beds declined by an extraordinary 39% between 1981 and 1999. The purpose was to raise profits, but the goal of 90% occupancy meant that hospitals no longer had the capacity to absorb patient influx during epidemics and medical emergencies.
In the new century, emergency medicine has continued to be downsized in the private sector by the ‘shareholder value’ imperative of increasing short-term dividends and profits, and in the public sector by fiscal austerity and reductions in state and federal preparedness budgets. As a result, there are only 45,000 ICU beds available to deal with the projected flood of serious and critical Corona cases. (By comparison, South Koreans have more than three times more beds available per thousand people than Americans.) According to an investigation by USA Today “only eight states would have enough hospital beds to treat the 1 million Americans 60 and over who could become ill with COVID-19.”
Local and state health departments – the vital first line of defense – have 25% less staff today than they did twelve years ago. Over the last decade, moreover, the CDC’s budget has fallen 10% in real terms. These shortfalls have only been exacerbated under Trump, who also closed the White House pandemic office established by Obama after the 2014 Ebola outbreak to ensure a rapid and well-coordinated national response to new epidemics.
We are in the early stages of a medical version of Hurricane Katrina. After disinvesting in emergency medical preparedness at the same time that all expert opinion has recommended a major expansion of capacity, we lack basic low-tech supplies as well as respirators and emergency beds. National and regional stockpiles have been maintained at levels far below what is indicated by epidemic models. The test kit debacle has coincided with a critical shortage of protective equipment for health workers. Militant nurses, our national social conscience, are making sure that we all understand the grave dangers created by inadequate stockpiles of protective supplies like N95 face masks. They also remind us that hospitals have become greenhouses for antibiotic-resistant superbugs such as S. aureus and C. difficile which may become major secondary killers in overcrowded hospital wards.
The outbreak has instantly exposed the stark class divide in our country. Those with good health plans who can also work or teach from home are comfortably isolated provided they follow prudent safeguards. Public employees and other groups of unionized workers with decent coverage will have to make difficult choices between income and protection. Meanwhile, millions of low-wage service workers, farm employees, the unemployed, and the homeless are being thrown to the wolves.
Universal coverage in any meaningful sense requires universal provision for paid sick days. A full 45% of the workforce is currently denied that right and virtually compelled to either transmit the infection or go hungry. Fourteen states have refused to enact the provision of the Affordable Care Act that expands Medicaid to the working poor, so nearly one in five Texans, for example, lacks coverage.
The deadly contradictions of private healthcare in a time of plague are most visible in the for-profit nursing home industry which warehouses 1.5 million elderly Americans, most of them on Medicare. It’s a highly competitive industry characterized by low wages, understaffing and illegal cost-cutting. Tens of thousands die every year from long-term care facilities’ neglect of basic infection control procedures and from government failure to hold management accountable. Many of these homes find it cheaper to pay fines for sanitary violations than to hire additional staff and provide them with proper training. So, it’s not surprising that the first epicenter of community transmission was the Life Care Center, a nursing home in the Seattle suburb of Kirkland. I spoke to Jim Straub, an old friend who’s a union organizer in Seattle area nursing homes. He characterized the facility as “one of the worst staffed in the state” and the entire Washington nursing home system “as the most underfunded in the country – an absurd oasis of austere suffering in a sea of tech money.” Straub pointed out that public health officials were overlooking the crucial factor that explains the rapid transmission of the disease from Life Care Center to nine other nearby nursing homes: “Nursing home workers in the priciest rental market in America universally work multiple jobs, usually at multiple nursing homes.” He says that authorities failed to find out the names and locations of these second jobs and thus lost all control over the spread of COVID-19. Across the country, many more nursing homes will become coronavirus hotspots. Many workers will eventually choose the food bank over working under such conditions and stay home. In this case, the system could collapse.
The pandemic illustrates the case for universal health coverage and paid leave with every step of its deadly advance. We must organize against evictions, layoffs, and employers who refuse compensation to workers on leave. But universal coverage and associated demands are only a first step. It’s disappointing that in the primary debates neither Sanders nor Warren highlighted Big Pharma’s abdication of the research and development of new antibiotics and antivirals. Of the 18 largest pharmaceutical companies, 15 have totally abandoned the field. Heart medicines, addictive tranquilizers, and treatments for male impotence are profit leaders, not the defenses against hospital infections, emergent diseases, and traditional tropical killers. A universal vaccine for influenza – that is to say, a vaccine that targets the immutable parts of the virus’s surface proteins – has been a possibility for decades, but has never deemed profitable enough to be a priority.
As the antibiotic revolution is rolled back, old diseases will reappear alongside novel infections and hospitals will become charnel houses. Even Trump can opportunistically rail against absurd prescription costs, but we need a bolder vision that looks to break up the drug monopolies and provide for the public production of lifeline medicines. As I wrote fifteen years ago in The Monster at Our Door: The Global Threat of Avian Flu, “Access to lifeline medicines, including vaccines, antibiotics, and antivirals, should be a human right, universally available at no cost. If markets can’t provide incentives to cheaply produce such drugs, then governments and non-profits should take responsibility for their manufacture and distribution. The survival of the poor must at all times be accounted a higher priority than the profits of Big Pharma.”
The current pandemic expands the argument: capitalist globalization now appears biologically unsustainable in the absence of a truly international public health infrastructure. But such an infrastructure will never exist until peoples’ movements break the power of Big Pharma and for-profit healthcare. This requires an independent socialist design for human survival that includes, but goes beyond a Second New Deal. Since the days of Occupy, progressives have successfully placed the struggle against income and wealth inequality on page one – a great achievement. But now socialists must take the next step and, with the healthcare and pharmaceutical industries as immediate targets, advocate social ownership and the democratization of economic power.
We must also make an honest evaluation of our political and moral weaknesses. The leftward evolution of a new generation and the return of the word ‘socialism’ to political discourse cheers us all, but there’s a disturbing element of national solipsism in the progressive movement. In addressing the pandemic, socialists should find every occasion to remind others of the urgency of international solidarity. We need to demand a massive scaling up of the production of test kits, protective supplies, and lifeline drugs for free distribution to poor countries. Disease knows know boundaries, so evenr if you don’t believe in global solidarity, ensuring universal, high-quality global healthcare is in everyone’s interest.
Mike Davis is the author of several books, including Planet of Slums and City of Quartz.
Written as Biden overtakes Bernie in the delegate count…I’m sad that so many voters — understandably in view of misleading corporate media and poor education — don’t realize which Democratic candidate will best serve their real, as opposed to emotional, needs. By poor education, I mean that most social studies (history) taught in US public schools is boring and geared more toward developing unthinking patriotism than encouraging critical thinking and highlighting class and other key issues. If Biden can beat Trump, which I doubt, he’ll be a figurehead for behind-the-scenes manipulation by Wall Street, corporations that profit from war, the NRA, and all the other usual elite 1% suspects. Same old, same old, taking us for sure over the climate change/economic breakdown cliff. I’m sad, but not surprised. What a rotten system; ironically, one most Americans are proud of. We need to, but apparently are not going to, grow up.
The Iowa caucus system is similar to the Electoral College in its lack of one-person-one-vote democracy, and the way it was conducted on Monday, using a faulty phone app (purposely created by Hillary supporters, Michael Moore says in his latest Rumble podcast), makes me think 2020 will be just like 2016 for Bernie. The establishment, which includes Clinton, Tom Steyer, Pete Buddigieg, Elizabeth Warren, and the DNC, would rather lose again to Trump — and maintain their privilege — than win with Bernie and the popularly supported, real, democratic change he represents. This is the road to full-blown fascism, since people want change in whatever form they can get it, and can obviously be manipulated by Trump-like hater demagogues. I’m avoiding a peaceful protest against the way the Republican Senate prevented Trump’s impeachment today as a waste of energy, as is, apparently, voting. Only revolution, beginning with something like a mass strike and ending with, at the very least, a new constitution, will create the kind of change we need. Otherwise, we’re headed for increasing dystopia, thanks to a greedy, mostly white, mostly male elite — just like the one that wrote our vaunted Constitution, fearful of the type of “mob rule” (democracy) they saw in Shay’s Rebellion (look it up).
“The two major parties in this country rest on a contradiction,” Chris Morrill wrote on Truthout 12-15 in an article entitled “Intentionally or Not, Progressives Are Coaxing Us Back Into a Corporate Party.” Morrill says, “their mass bases are working- and middle-class people, but they get funds from and answer to a tiny elite at the top. It’s obvious with the Republicans. They whip up racism, heterosexism and other social issues to get people to vote against their economic interests. The Democrats masquerade as the ‘party of the people’ (appealing to workers, making progressive proposals), but act in the interests of the rich (lowering workers’ expectations and implementing policies that benefit their wealthy funders). Over the past 40 years, Democrats have actually implemented and overseen attacks on workers and marginalized groups. Joe Biden and Bill Clinton delivered crime bills that caused mass incarceration to skyrocket. Clinton hollowed out social programs in the name of ‘welfare reform.’ Barack Obama deported more people than Trump has, despite running in 2008 as a champion for immigrant rights. These years have created an even greater gulf than usual between the Democratic Party’s popular base and the corporate class to whom it answers, especially since the Great Recession and Obama’s indifference to those who suffered under it. Movements have sprung up against the trend: Occupy Wall Street, Black Lives Matter, and Standing Rock, along with a serious shift to the left, especially among those under 45.
Candidates like Biden and, in another fashion, Pete Buttigieg and former contender Beto O’Rourke, have acted like none of this ever happened, continuing to push the same moderate positions that Hillary Clinton did. Biden’s honest about it, while Buttigieg and O’Rourke have offered the same ‘hope and change’ trappings of Obama ‘08 and Clinton ‘92 to hide their centrist politics. Other Democrats, seeing the writing on the wall, have staked out more progressive positions and rhetoric, not to transform the country or build a progressive movement, but to win votes and revive the corporate Democratic Party. In the leadup to the 2020 campaign season, Cory Booker, one of the top three Senate recipients of campaign money from insurance companies last time he ran for office, signed onto Bernie Sanders’s Medicare for All bill. Kamala Harris marketed herself as an anti-racist, challenging Biden’s record on busing and school desegregation in her most dynamic debate moment. She pitched herself as a fighter ‘for the people,’ despite an extensive record of jailing and prosecuting mainly Black and poor folks. Elizabeth Warren is similarly trying to thread the needle, albeit more to the left than Booker or Harris. She’s positioning herself left enough to capture Sanders’s base, but right enough to not alienate moderates and her billionaire contributors. She offers Medicare for All with asterisks and hedges: a public option for kids, the poor, and middle-aged first, then real single-payer (supposedly) two years later. As Tom Moran wrote, praising Warren’s plan, ‘This isn’t the year for Democrats to take a risk like this, and Warren seems to understand that.’ She’s not for socialism but for ‘saving capitalism.’” Sanders, the only real progressive candidate, seems “strident” at times in his responses. I doubt the Democratic establishment will allow him to be nominated, even though I think he could beat Trump handily, because, as I’ve written time and time again, I think Trump was elected at least partly because Americans want real change, whatever it looks like. If by some miracle Sanders was elected, Congress – or at least the Senate – would block him at every turn. (As I’ve also written many times before, this is how the system was designed – to avoid “mob rule” (democracy). The whole thing needs to be completely revamped, and maybe Sanders’ election could be the beginning of that. I still think, however, that his movement would have been stronger if he’d run (both times, if a second time would have been necessary) as a third party candidate, the undisputed head of a progressive movement.
In addition to Sanders, as Morrill indicates, “the more progressive wing of the Democratic Party,” as represented by recently elected Rep. Alexandria Ocasio-Cortez (or, in the past, Dennis Kucinich), “recognizes the widening gulf threatening the party’s future, and is trying to save it, while facing opposition from the party’s still-dominant right wing. Obama, for example, recently admitted he’d seek to stop Sanders’s nomination if he got too close to victory.
During the debates, many progressives watch with the hope that Warren or Sanders get the jump on Biden or Buttigieg. The problem is, intentionally or not, these progressive candidates are coaxing us back into a thoroughly corporate party, with no guarantees we won’t face the same disappointments as ever. Far from leading us out to found a new party that’s accountable to ordinary people and not just the rich, these candidates are trapping us in.”
Sorry to be so depressing and “cynical,” but this is the reality. If we don’t face it and do something about it, we’ll end up with the same old shit. Aren’t you, like me, tired of that? Let’s stop wasting our limited energy on a false political map.
In an article entitled “Big Tech’s Big Defector” in the current (12-2-19) issue of the New Yorker magazine, Brian Barth reviews Roger McNamee’s 2019 book Zucked, which criticizes social media and the corporations (Facebook and Google) that support it (note that Facebook includes Instagram and Google includes YouTube), as well as merchandisers (especially Amazon) that track our every digital movement.
A corporate investor, McNamee started cashing in on the personal-computer revolution in the early ‘80s, adding investments in Amazon in the ‘90s, and Facebook in 2009 and 2010. Initially seeing the tech industry as “an experiment in creative and profitable problem-solving,” he started questioning its ethics in 2012. “‘These guys all wanted to be monopolists,’ he said recently. ‘They all want to be billionaires.’ McNamee was still convinced that Facebook was different, but in February 2016, shortly after he retired from full-time investing, he noticed posts that purported to support Bernie Sanders but seemed fishy. That spring, the social-media-fueled vitriol of the Brexit campaign seemed like further proof that Facebook was being exploited to sow division among voters – and that company executives had turned a blind eye. The more McNamee listened to Silicon Valley critics, the more alarmed he became: he learned that Facebook allowed facial-recognition software to identify users without their consent, and let advertisers discriminate against viewers. (Real-estate companies, for example, could exclude people of certain races from seeing their ads. Ten days before the presidential election, McNamee sent an e-mail to Zuckerberg, saying, ‘Facebook is enabling people to do harm. It has the power to stop the harm. What it currently lacks is an incentive to do so.’ Zuckerberg assured McNamee that Facebook was working to address the issues he’d raised, and dispatched a Facebook executive, Dan Rose, to talk to him. Rose told McNamee that Facebook was a platform, not a publisher, and couldn’t control all user behavior. This dismissiveness rattled McNamee. ‘These were my friends. I wanted to give them a chance to do the right thing. I wasn’t expecting them to go, “Oh, my God, stop everything,” but I did expect them to take it seriously. It was obvious they thought it was just a P.R. problem.’ He hasn’t spoken to Zuckerberg (who declined to comment for this article) since, and now refers to him as an ‘authoritarian.’
As Russian election interference became increasingly apparent, McNamee published a series of op-eds – in the Guardian, USA Today, Time, and elsewhere – arguing that the social-media business model thrived on divisive rhetoric: the more extreme the content, the more users shared it, and the more the algorithms amplified it, the more ad revenue was generated. As lawmakers prepared for hearings about Russian meddling in the fall of 2017, McNamee put together a curriculum for them, which he jokingly called ‘Internet Platforms 101.’ Adam Schiff, a member of the House Intelligence Committee, had been focused on foreign manipulation of social media, but, in a meeting, McNamee urged him to consider a broader problem – how the platforms were sowing discord among Americans. ‘Roger was really ahead of the curve,’ Schiff said, ‘and time has borne out his warnings.’
McNamee’s zeal for diagnosing problems soon evolved into a mission to devise a solution. He argued that piecemeal regulation would never get to the root of the problem: mining users’ private data for profit. In February 2019, he published Zucked: Waking Up to the Facebook Catastrophe, part memoir, part manifesto. He then embarked on a book tour that’s turned into an ongoing public-shaming campaign.
When interviewed, McNamee rattled off a frighteningly long list of things he believes have been ‘Zucked’: ‘your vote,’ ‘your rights,’ ‘your privacy,’ ‘your life,’ ‘everything.’ So far, the public is less alarmed. A recent Pew Research Center poll found that half of Americans think the tech industry is having a positive impact on society. (This view is on the decline, however: in 2015, seven in ten thought so.) Earlier this year, Google and Amazon came in second and third in a survey of millennials’ favorite brands. In general, people are more concerned about the behavior of banks and pharmaceutical companies, and most Americans have yet to meaningfully change their habits as tech consumers.
Using digital profiles to predict and influence our behavior is at the heart of Google’s and Facebook’s business models. In The Age of Surveillance Capitalism, published earlier this year, Shoshana Zuboff, an emerita professor at Harvard Business School, warns of a ‘rogue mutation of capitalism,’ in which tech behemoths surveil humans, and eventually control them. McNamee speaks often about surveillance capitalism, and credits Zuboff with informing his views and bringing academic clout to the cause of Silicon Valley reform.
McNamee offers himself as a case study in how to be Google-free. He uses DuckDuckGo, a search engine that presents itself as a privacy-oriented alternative to Google, and has largely renounced Gmail, Maps, Docs, and the company’s other apps. He argues that Facebook should be used for staying in touch with friends and family rather than for political debates, which the platform alchemizes into screaming matches. ‘Outrage and fear are what drive their business model, so don’t engage with it,’ he told me. ‘I was as addicted as anybody, but we have the power to withdraw our attention.’ His life is made easier by the fact that he has relatively few complaints about Apple, which he praises for taking steps to protect user privacy. Since 2017, the company’s Safari browser has blocked third-party cookies, one ubiquitous tool for gleaning personal data. And its new Apple Card, unlike many other credit cards, including American Express and Mastercard, doesn’t share transaction histories with third parties. On the other hand, researchers have found that iPhones send a steady stream of personal data to third parties, much as the Android phones McNamee decries do. The company is also a pioneer in Bluetooth beacons, tiny devices used by retailers which glean data from phones as people move about in public spaces.
The 2018 Cambridge Analytica scandal is the quintessential example of how people can be turned into puppets. By collecting data from Facebook without user consent, the company was able to identify micro-populations of voters, then serve up customized ads encouraging them to vote for Donald Trump. Cambridge Analytica obtained user data through duplicitous means, but similar data sets are widely and legally available; micro-targeting is commonplace on nearly all political campaigns. One of the most popular answers to this is that antitrust law should be used to take on Big Tech’s power. Elizabeth Warren, who’s met with McNamee and called him ‘one of the clearest voices’ on tech reform, has made the breakup of tech giants a central part of her campaign. Bernie Sanders has also pledged to press the antitrust issue if elected; Joe Biden has said that he’ll investigate it. In March, McNamee was invited to give a lecture at the Department of Justice’s antitrust division. In the following months, the D.O.J. and the F.T.C., along with various state legislatures and congressional committees, announced antitrust investigations aimed at Facebook, Google, Amazon, and Apple.
Several data-privacy bills circulating in Congress draw inspiration from California’s Consumer Privacy Act, which goes into effect on January 1st, and from Europe’s recently enacted General Data Protection Regulation. Such laws expand consumers’ control over their data and give them new legal tools for holding companies accountable. Many privacy advocates, including McNamee, argue that they’re critically flawed, however. Under G.D.P.R. rules, companies must ask users to opt in before their data can be processed by third parties, but, as soon as consumers consent, it’s more or less back to business as usual. And the rules are relatively loose when it comes to metadata. Even if the contents of a phone call are protected, the time of the call or the parties involved might not be. This is more revealing than it seems: as a memo by the Electronic Frontier Foundation notes, a tech giant that doesn’t know your name might still ‘know you called a gynecologist, spoke for a half hour, then called an abortion clinic’s number.’
McNamee believes antitrust action will be effective only after comprehensive privacy reforms are enacted – otherwise, it’ll simply create smaller companies that behave in the same ways the big ones do now. ‘I want to prevent the data from getting into the system in the first place,’ he told me. The reform that would really have teeth, he says, is one that would ‘ban all third-party commerce in private information – financial information, location information, health information, browser history, and scanning of e-mail.’ Companies would be allowed to collect data needed for their services, but nothing else: a wellness app could store your height or weight but not the location of your gym – and none of this information could be shared with Facebook. The idea, McNamee explained, is that you could log a workout without then being bombarded by ads for nearby Zumba classes. Tim Wu, a law professor at Columbia, has pointed out that few of the current proposed policies would have any effect on whether a company can collect private data, only on how it can be used. Under McNamee’s plan, most of Google’s and Facebook’s revenues would disappear overnight, since nearly 90% of both companies’ money comes from ads. (Tech companies that don’t depend on targeted-ad revenue would remain relatively unaffected.)”
Barth concludes that the tech-reform movement can be hard to take seriously when some of its most prominent activists are also some of the most prominent tech-company shareholders,” and notes that “McNamee ends his talks by saying that the solution will be the ‘biggest business opportunity’ ever.”
In an 11-28-19 Guardian article entitled “There’s only one way to take on big tech: by reining in big money and big state,” Evgeny Morozov says that “the Warren-style critique of big tech rests on a powerful myth of domestic politics gone wrong.” He adds that “it’s easy to mistake Warren’s populist stance – let’s just break up the tech giants! – for some kind of leftism; but all it really is is a repetition of the (neo)liberal creed that well-policed, competitive markets yield prosperity. A Warren-style critique presents the rise of big tech as a series of policy errors by distracted or corrupt technocratic regulators, rather than the result of careful policy planning by Washington elites keen to use every tool possible to consolidate America’s global power. Focused almost entirely on domestic affairs, the Warren-style account rarely situates big tech alongside big money – Saudi Arabia, SoftBank and JP Morgan – and the big state – the Pentagon, with its massive contracting orders, and the NSA, with its massive spying apparatus. Positioned properly inside this troika, big tech emerges as an almost inevitable consequence of global financialized and militarized capitalism.
Not surprisingly, Warren’s account remains blind to the real reason American big tech isn’t smaller: big money and the big state need it to remain big — the former to make sure Wall Street can recoup its loss-making investments, the latter to ensure that America’s defense and intelligence needs are met swiftly, efficiently, and on the cheap. Positioned properly inside this troika, big tech emerges as an almost inevitable consequence of global financialized and militarized capitalism. Making big tech smaller, thus, can only be accomplished by trying to rein in the powers of Wall Street and the Pentagon and accepting that America should play a humble role in the global order. None of this is likely to happen, especially given American anxieties about China’s global ascent in all three dimensions – technology, finance, and military might. Smaller tech would mean America losing its ability to project its power geopolitically; and the odds that the Pentagon, Wall Street, and Silicon Valley – let alone the ‘America first’ Trump administration – would agree to this are nil. They’ll probably remain nil even if someone like Warren – whose foreign policy views are rather conventional, even by Washington standards – gets elected.
The powers of the nefarious troika of the big tech, big money, and big state could – and should be – contested. But this has to be done directly – by explicitly invoking and contesting the links between the financial, military, and technology dimensions of US power – and not indirectly, by discussing tendencies towards monopolization in digital capitalism. The first approach lends itself to a properly progressive political agenda; the second only to the utopian expectations that a new generation of technocrats might resolve some of the contradictions of global capitalism. In the absence of such a program, leftists should ditch the ‘big tech vs small tech’ dichotomy and speak of corporate vs non-corporate tech instead. The ownership – not just of companies but also of sensors, networks, data and services – is more important than the size of the key players. This doesn’t mean we should follow the likes of Warren in treating them as utilities, however; to do so would be to impose a ban on the kind of institutional imagination that the rise of digital technologies should have provoked – but still hasn’t – on the left.
The utilities model is problematic for many reasons, the chief of which is that data – the intimate residue of our intellectual, social and political life – unlike water, gas, and electricity, is suffused with meaning, lending itself to a multiplicity of interpretations and action plans. How this total ensemble of meanings and actions get assembled, by whom, and with what rationale isn’t a question that can be answered with any certainty in advance. The data ensemble can, as it does now, empower the advertising industry, feed virtual disinformation campaigns, and help banks extend more loans – i.e., ensure that the wheels of capitalism roll smoothly. It could also seed non-market behaviors grounded in solidarity and mutual respect, doing for the knowledge society what the welfare state once did for industrial society: create durable foundations for human flourishing. By shoving solutions to the problem of big tech into the institutional straitjacket of the utilities model, we’re giving up the opportunity to create a radically new institutional landscape – one which will de-commodify everyday life the same way the welfare state de-commodified working life almost a century earlier. This genuinely leftwing agenda doesn’t provide a simplistic, clean, but ultimately utopian answer along the lines of ‘small’ or ‘humane’ tech. But in calling out big tech as a function of American corporate power it at least gets the diagnosis right.”