Category Archives: Economics
I heartily recommend an article in today’s New York Times entitled “Beyond Low Vaccination Rates Lurks a More Profound Social Weakness” (the original title, in the print edition, was “What Causes Vaccine Hesitancy?”). Authored by Anita Sreedhar and Anand Gopal, it makes non-vaxxers, who I still think are illogical and not looking out for themselves and others, a lot more understandable. It also makes a very important point about what’s lacking in our public health system (the same as what’s lacking in our system as a whole). There’s still some connection to Trump’s disastrous politicization of the pandemic, but that’s not the whole story. He was/is capitalizing on some big holes and weaknesses in our society as a whole, a result, I think, of the two-party political system dominated by the corporate elite (the 1%). A system like this that doesn’t work for so many can’t and won’t meaningfully address big things like disease, climate change, resource depletion, etc. And it’s a worldwide system, dominated by a few “successful” countries, as the global migrant crisis, criticized by Pope Francis this weekend, shows. What the 1% and those hanging onto their coattails don’t realize is that they and their families will eventually suffer from the big problems, too. We’re all ultimately one, standing or falling together.
Winona LaDuke and many others have been trying to stop Enbridge’s Line 3 pipeline construction, which threatens the integrity of the headwaters of the Mississippi River area, where Winona and many of the other protestors live. This encapsulates all the major issues of our time: capitalism and fossil fuels vs. living in harmony with the earth, which is casting us off with a pandemic and global warming because we don’t recognize our place in the web of life and support its processes. As a group, the majority in this country also fail to honor non-white lives and cultures — the diversity, which nature exemplifies. I think we need to recognize that man-made laws and the police and military protect the capitalist, racist system and private property, rather than people or Life
Winona is currently in a local county jail, the powers-that-be hoping that the Stop Line-3 movement will fall apart without her on-site leadership. What they fail to recognize is that this is a leader-full movement that I hope will grow and continue. Native Lives and Livelihoods (wild rice, etc.) matter, and so does the earth and water on which all forms of life, including the mostly arrogant Western world, depends.
In 2019 Matthew Desmond wrote an article for the New York Times “1619 Project” that attributed the brutality of American capitalism to cotton-plantation slavery. There are many types of capitalist societies around the world, Desmond said, “ranging from liberating to exploitative, protective to abusive, democratic to unregulated.” America’s is what University of Wisconsin-Madison sociologist Joel Rogers calls “low-road. In a capitalist society that goes low, wages are depressed as businesses compete over the price, not the quality, of goods; so-called unskilled workers are typically incentivized through punishments, not promotions; inequality reigns; and poverty spreads.” The US ranks at the bottom in terms of trade union membership, regulation of temporary work arrangements, and ease of firing workers, often without severance pay. Desmond: “Those searching for reasons the American economy is uniquely severe and unbridled have found answers in many places (religion, politics, and culture). But recently, historians have pointed persuasively to slave-labor Southern cotton plantations as the birthplace of America’s low-road capitalism.
Slavery was a font of phenomenal wealth. By the eve of the Civil War, the Mississippi Valley was home to more millionaires per capita than anywhere else in the United States. Cotton grown and picked by enslaved workers was the nation’s most valuable export. The combined value of enslaved people exceeded that of all the railroads and factories in the nation. New Orleans boasted a denser concentration of banking capital than New York City. What made the cotton economy boom in the United States, and not other parts of the world with climates and soil suitable to the crop, was our nation’s willingness to use violence to extract land from Native Americans and labor from African-American slaves. Slavery helped turn a poor, fledgling nation into a financial colossus and created specific economic methods still used today.
Before the invention of the cotton gin in 1794, enslaved workers grew more cotton than they could clean. The gin broke the bottleneck, making it possible to clean as much cotton as you could grow. The other problem with cotton, its quick depletion of soil, was solved by expropriating millions of acres from Native Americans, often with military force, acquiring Georgia, Alabama, Tennessee, and Florida, then selling the land cheaply to white settlers. As slave labor camps [otherwise known as “plantations”] spread throughout the South, production surged. By 1831, the US was delivering nearly half the world’s raw cotton crop. Southern white elites grew rich, as did their counterparts in the North, who built textile mills to form, in the words of the Massachusetts senator Charles Sumner, an ‘unhallowed alliance between the lords of the lash and the lords of the loom.’ Cotton planters, millers, and consumers fashioned a new global economy whose beating heart was slavery.
Everything you do at work these days is tracked, recorded, and analyzed. This quantification feels like a cutting-edge approach to management, but many of these techniques were first developed by and for large Southern plantations during slavery. Like today’s titans of industry, planters understood that their profits climbed when they extracted maximum effort out of each worker, using both precise systems of record-keeping and the threat of vicious punishment for slacking. Overseers recorded each enslaved worker’s yield, not only after nightfall, when cotton baskets were weighed, but throughout the workday. Northern factories wouldn’t begin adopting these techniques until decades after the Civil War. During the 60 years leading up to the Civil War, the daily amount of cotton picked per enslaved worker increased 2.3% a year. That means that in 1862, the average enslaved fieldworker picked 400% as much cotton as his or her counterpart did in 1801. The technology that accompanies modern workplace supervision can make it feel futuristic, but it’s only the technology that’s new. The core impulse behind that technology pervaded plantations, which sought utmost control over the bodies of their enslaved work force. In most cases punishments were authorized by the higher-ups – it was the greed of the rich white planter that drove the lash. The violence was rational, capitalistic, part of the plantation’s design. Punishments were the worst when the price of cotton was high.
The cotton trade and the earlier trade in slave-produced sugar from the Caribbean accelerated worldwide commercial markets in the 19th century, creating demand for innovative contracts (including ‘futures’), novel financial products, and modern forms of insurance and credit. Enslaved people were used as collateral for mortgages centuries before the home mortgage became the defining characteristic of middle America. In colonial times, when land wasn’t worth much and banks didn’t exist, most lending was based on human property. Enslavers weren’t the first to securitize assets and debts in America; the land companies that thrived during the late 1700s relied on this technique, too. But enslavers made use of securities to such an enormous degree for their time, that they created a globalized financial market. As America’s cotton sector expanded, the value of enslaved workers soared. Between 1804 and 1860, the average price of men ages 21 to 38 sold in New Orleans grew to from $450 to $1,200. Because they couldn’t expand their cotton empires without more enslaved workers, ambitious planters needed to find a way to raise enough capital to purchase more hands. Enter the banks. The Second Bank of the United States, chartered in 1816, invested heavily in cotton. In the early 1830s, the slaveholding Southwestern states represented almost half the bank’s business.
When seeking loans, planters used enslaved people as collateral. Thomas Jefferson mortgaged 150 of his enslaved workers to build Monticello. People could be sold much more easily than land, and in multiple Southern states, more than eight in 10 mortgage-secured loans used enslaved people as full or partial collateral. As the historian Bonnie Martin has written, ‘slave owners worked their slaves financially, as well as physically from colonial days until emancipation’ by mortgaging people to buy more people. Global financial markets got in on the action. When Thomas Jefferson mortgaged his enslaved workers, it was a Dutch firm that put up the money. The Louisiana Purchase, which opened millions of acres to cotton production, was financed by Baring Brothers, the well-heeled British commercial bank. A majority of credit powering the American slave economy came from the London money market. Years after abolishing the African slave trade in 1807, Britain, and much of Europe along with it, was bankrolling slavery in the United States. To raise capital, state-chartered banks pooled debt generated by slave mortgages and repackaged it as bonds promising investors annual interest. During slavery’s boom time, banks did swift business in bonds, finding buyers in Hamburg, Amsterdam, Boston, and Philadelphia.
Some historians have claimed that the British abolition of the slave trade was a turning point in modernity, marked by the development of a new kind of moral consciousness when people began considering the suffering of others thousands of miles away. But perhaps all that changed was a growing need to scrub the blood of enslaved workers off American dollars, British pounds, and French francs, a need that Western financial markets quickly found a way to satisfy through the global trade in bank bonds. Here was a means to profit from slavery without getting your hands dirty. In fact, many investors may not have realized that their money was being used to buy and exploit people, just as many of us who are vested in multinational textile companies today are unaware that our money subsidizes a business that continues to rely on forced labor in countries like Uzbekistan and China and child workers in countries like India and Brazil. Call it irony, coincidence or maybe cause – historians haven’t settled the matter – but avenues to profit indirectly from slavery grew in popularity as the institution of slavery itself grew more unpopular.
Banks issued tens of millions of dollars in loans on the assumption that rising cotton prices would go on forever. Speculation reached a fever pitch in the 1830s, as businessmen, planters and lawyers convinced themselves that they could amass real treasure by joining in a risky game that everyone seemed to be playing. If planters thought themselves invincible, able to bend the laws of finance to their will, it was most likely because they’d been granted the authority to bend the laws of nature to their will, to do with the land and the people who worked it as they pleased. Du Bois wrote: “The mere fact that a man could be, under the law, the actual master of the mind and body of human beings had to have disastrous effects. It tended to inflate the ego of most planters beyond all reason; they became arrogant, strutting, kinglets.” What are the laws of economics to those exercising godlike power over an entire people?
In 1799 the state of New York passed the first of a series of laws that would gradually abolish slavery over the coming decades, but the investors and financiers of the state’s primary metropolis, New York City, invested heavily in the growth of Southern plantations, catching the wave of the first cotton boom. Southern planters who wanted to buy more land and black people borrowed funds from New York bankers and protected the value of bought bodies with policies from New York insurance companies. New York factories produced the agricultural tools forced into Southern slaves’ hands and the rough fabric called “Negro cloth” worn on their backs. Ships originating in New York docked in the port of New Orleans to service the trade in domestic and (by then, illegal) international slaves. As the historian David Quigley has demonstrated, New York City’s phenomenal economic consolidation came as a result of its dominance in the Southern cotton trade, facilitated by the construction of the Erie Canal. It was in this moment – the early decades of the 1800s – that New York City gained its status as a financial behemoth through shipping raw cotton to Europe and bankrolling the boom industry that slavery made. (In 1711, New York City officials decreed that ‘all Negro and Indian slaves that are let out to hire be hired at the Market house at the Wall Street Slip.’ It’s uncanny, but perhaps predictable, that the original wall for which Wall Street is named was built by the enslaved at a site that served as the city’s first organized slave auction. The capital profits and financial wagers of Manhattan, the United States and the world still flow through this place where black and red people were traded and where the wealth of a region was built on slavery.)
Speculation continued to drive cotton production up to the Civil War, and it’s been a defining characteristic of American capitalism ever since. It’s the culture of acquiring wealth without work, growing at all costs, and abusing the powerless. It’s the culture that brought us the Panic of 1837, the stock-market crash of 1929, and the recession of 2008 – the culture that’s produced staggering inequality and undignified working conditions. If today America promotes a particular kind of low-road capitalism – a union-busting capitalism of poverty wages, gig jobs, and normalized insecurity; a winner-take-all capitalism of stunning disparities not only permitting but rewarding financial rule-bending; a racist capitalism that ignores the fact that slavery didn’t just deny black freedom but built white fortunes, originating the black-white wealth gap that annually grows wider – one reason is that American capitalism was founded on the lowest road there is.”
You may think you understand history, politics, and economics, but a lot depends on who you’re reading or listening to. I just finished reading David McNally’s 2020 book “Blood and Money,” and I heartily recommend it for a thorough shakeup of your previous concepts. Turns out money really is the root of all evil! (No, it’s treating others like “others,” ’cause then you need to do rude things like insist that the items you’re exchanging be absolutely equal in value — as measured in monetary units. You might even want to steal their land, their stuff, or their bodies (enslave them). Did you know that slaves were the first major “goods” traded, back in the 700s BC?) If you don’t want to buy the book and wade through it yourself (McNally takes us from those early days to the present, with war and cruelty connected to economics all the way), I’m about to post my notes on it on this site under Resources/Books (top menu).
Believing that Trump chose Tulsa, OK and 6-19-20 as the place and time to kick off his 2020 presidential campaign deliberately, Robin D. G. Kelley, professor of American history at UCLA, described it in a 6-24-20 interview on The Intercept podcast as a “white rally,” opposing black emancipation, celebrated on Juneteenth, and mocking the killing of over 300 black Tulsans in “the Tulsa race massacre of 1921. Choosing Tulsa wasn’t an accident. Just like choosing Juneteenth, June 19th, as the original date for this event wasn’t an accident. Tulsa has a very interesting story, not because of what we typically talk about – the destruction of the Greenwood community in 1921, which was a Black community often called Black Wall Street. After destroying this community, including hospitals, libraries, and churches, with the support of the police and deputized white men, the city interned 7,000 Black people in camps and held them there through the winter of 1921-1922. So imagine you’re rendered homeless and you’re forced into internment camps for the crime was being Black. Trump’s choice of Tulsa is a slap in the face to that history.
Juneteenth also represents emancipation as the date, June 19, 1865, when Galveston, Texas was occupied by the Union army and there was a declaration that slavery had come to an end. Juneteenth is a day of celebration of abolition, but also, historically, at least for the last century and a half, a day of reflection and organizing on the part of Black communities. There’s a long history of Juneteenth representing the opposite of what Trump tried to claim, and his trying to turn that date into a reassertion of his authoritarian rule.
Oklahoma as a whole is an interesting place for another reason, which is that the Homestead Act of 1862, a means of dispossessing Indigenous peoples, also created an opportunity to have all-Black towns, and Oklahoma had more all Black towns than any other state in the Union. Many of these towns were, like the Greenwood district, places of Black autonomy and economic independence, and they were subject to racial pogroms and violence. Many of them were razed, destroyed. So, in some respects, Oklahoma has been a battleground state between Black freedom and white supremacy for a long time. During the late 19thand early 10th century period of Black disfranchisement, Oklahoma was also one of those places where many poor whites were disfranchised. That’s something that few of the 6,000 people at Trump’s rally have an understanding of – that even in the framework of white supremacy, class rule can lead to the disfranchisement of poor white people.”
Scahill added that “at that same rally in Tulsa, Trump claimed that Democrats want ‘rioters and looters’ to have ‘more rights than law-abiding citizens.’ How is Donald Trump using that word ‘looters’ in this instance? Set it in the historical context of this country.”
“The tradition in this country has been to identify looting as criminal behavior, which justifies the state’s relentless use of lethal violence against episodic political violence by people trying to fight back or take advantage of a temporary crisis to try to get commodities. In 2020 this is happening in a context where over 40 million people have applied for unemployment. In the 1960s, the same question was posed. Why do people loot? The answer’s always wide-ranging: it’s economic, political, criminal, senseless, normative, deviant, all these things. But one thing that came out of the ‘60s articles on the subject became the prevailing theory of law enforcement. Looters were identified as hard-core criminals, thugs who just hadn’t been caught yet – an expression of latent criminal tendencies in Black communities rather than people acting during a lack of restraint or responding to a crisis. This became the basis of the broken windows theory, now repudiated, that ignored the structural racism creating horrific conditions in these communities, suppressing home values, and the divestment of services for working people, people of color, and the poor in urban communities. In some ways, it was like a self-fulfilling prophecy. You create policies that quite literally kill people, deny them basic goods and services, deny them employment, deny them a livelihood, and then you police them at that level of desperation with a fascist structure of violence, rendition, and torture. You’re criminalizing a community rather than dealing with crime, allowing the police to function with almost no boundaries on the basis of a racist untruth. To me, that’s part of the story of looting. Another part is to flip the question of ‘What’s a looter? Who’s doing the looting?’ And what we’ve seen, often, is that it’s the system of racial capitalism.”
Scahill’s asked him to explain that term, and Kelley said, “Racial capitalism is the idea that capitalism isn’t distinct from racism, that racism is a by-product of capitalism, a way to divide workers. It’s a way to extract greater value from, say, enslaved people, Indigenous people, etc. But Cedric Robinson argued that the ground of the civilization in which capitalism emerges is already based on racial hierarchy. If you think of race as assigning meaning to whole groups of people, ideologically convincing others that some people are inferior to others, that some people are designed as beasts of burden, what you end up getting is a system of extraction that allows for a kind of super-exploitation of Black and brown people. Racial capitalism also relies on an ideology or racial regime that convinces a lot of white people, who may get the crumbs of this extraction, to support or shore it up, even though their own share of the spoils is minuscule.
If you think of capitalism as racial capitalism, you realize that you can’t eliminate or overthrow it without the complete destruction of white supremacy. The main function of the police is to protect capital, property of all kinds, including slaves. The whole system of policing is organized around property, so we shouldn’t be surprised that the violent acts of the police are supported by capital, which needs force to terrify people. When we look at the relationship between the cost of police, police budgets, and the amount of money being shelled out to settle police misconduct cases, we’re talking about billions. In my city, Los Angeles, $880 million was shelled out between 2005 and 2018 over police misconduct suits, wrongful death suits, these kinds of things. Why do we let that happen? Companies like Target and Walmart give money to police foundations to make sure the police are operable. Wall Street benefits from police violence. You’d think that capitalists trying to be as efficient as possible would say this has to stop. But imagine if you have a police force that’s not a terror force. A police force that says, ‘of course, labor has a right to strike and to occupy a workplace. Of course, people have a right to protest and to protest freely and engage in forms of civil disobedience that disrupts business as usual.’ That’s not going to work. And we allow ourselves to be mentally deputized, brainwashed into calling the police whenever we think something, however minor, is amiss. And, too often this results in police killing someone, most often a Black man. Part of defunding the police is a recognition that the police, as constituted, make life more dangerous for vulnerable populations even as it creates a false sense of safety for white people. Part of what we have to think about is, how do we get out of the habit, or the reflex, of calling the police to solve issues that should have evoked simple compassion, neighborliness, and other thoughtful responses. Unless we learn how to care for one another, we’re going to continue to have this situation where we call the police and the police continue to kill us.”
Scahill mentioned Kelley’s new book, Black Bodies Swinging, in which he wrote, “‘Reverend William Barber [one of the leaders of the Poor People’s Campaign] is right – we’re living through a third Reconstruction, and the great rebellion of the summer of 2020 marks a moment of reckoning between real freedom and fascism.’ Can you expand on that?”
“There are two things I’m trying to deal with in this book. One is to amplify the fact that this generation of abolitionists have the most visionary conception of abolition in history. The first Reconstruction in the 1860s, an effort to expand social democracy to include everyone, faced a backlash, and was crushed under the weight of racial terror, Jim Crow, and disfranchisement. The second Reconstruction, responding to the civil rights movement of the 1960s, an attempt to expand the democracy we had to include all people, and deal with some of the social justice issues of housing and police violence, was based on the idea that the constitutional basis of our system was sound; we just had to tweak it to include everyone. This generation is saying it’s not sound and never has been. It’s been based on dispossession, white supremacy, and gender violence. This vision of abolition isn’t better jails, better police, and better training. It’s no police, no jails, and no prisons. It’s creating a new means of justice based not on criminalization, but affirmation and reparation – trying to repair relationships that have been damaged and destroyed as a result of five centuries of warfare against Indigenous peoples, Africans, poor white people, Asian-Pacific Americans, and Latinx populations. It’s an opportunity to transform not just the nation, but the entire world.
In the 1970s, after the second Reconstruction, the Klan was resurrected and the prison-industrial complex expanded – another backlash and retrenchment. After 2020, we’ll see either more fascism or true abolition. This is a very exciting time, and what the book tries to do isn’t so much predict what’s going to happen, but understand that 500-year history through the stories of particular individuals who have died over the last few years and recognizing what’s unique about the generation that’s emerged since the late 1990s.”
Scahill asked for Kelley’s “big picture thoughts on what that says about our society that Trump and Biden are the two major-party candidates at this moment in history.”
“It says something about the failure of electoral politics to solve this problem. Because, imagine a political conundrum that leaves us with the choice of going back to Clinton-era policies that stripped us of the protections of Glass-Steagall, expanded the prison-industrial complex, and criminalized immigration even further than before. Biden represents that, and if we see this as ‘elect Biden by any means necessary,’ I think we’ve lost. A continued Trump White House, with the backing of the apparatus of state violence, is a much more difficult place to fight these fights, but at the same time, I think that this radical generation sees that no matter who is elected, the fight has to continue because it isn’t just a fight to restore an old democracy, but to create a new one. We can’t silence the critique of Biden and the Clintons and Obama or continue to have a foreign policy built on war and drone strikes, the same kind of violence that’s replicated in the cities of the United States, in the Arab world, and elsewhere.”
Schahill then brought up Kelley’s “book from a couple decades ago, Hammer and Hoe, which tells the story of how in the 1930s and ‘40s, coming out of the Great Depression, Communists took on Alabama’s repressive, racist police state, and engaged in a battle not so different from the analysis that you’re offering now from this newer generation of radical abolitionists. I’m wondering if you could share with people an overview of that book, and share some of the stories that you researched and brought to life in it.”
“That book told the story of a party made up of overwhelmingly Black working people in rural areas, as well as in cities like Birmingham and Montgomery, who fought for the right to organize, for relief for the unemployed, against home eviction, and ultimately for democracy in the South and throughout the country. It preceded the civil rights movement and it had a vision of social democracy that even the civil rights movement didn’t. The Communist Party in Alabama had some white membership, and organized white working people. It actually tried to organize former Klansmen into the organization and got some in there. They saw themselves as a multiracial movement that could create a democratic, anti-capitalist society – true abolition for the entire United States, in solidarity with what they saw as a worldwide movement.
One of the things that made the Communist Party in Alabama different than, say, other movements was the confidence that they had that they were part of a global insurgency. I interviewed people, like a man named Lemon Johnson. When cotton pickers went on strike in 1935, he believed that any significant violence from the planter class would be met with the possibility of Stalin sending troops through Mobile, Alabama to protect them, to engage in class warfare against the planter class.
There are many lessons to be learned from the Communist Party of Alabama, but there’s also a lesson about how movements can be wiped out, and how their history can be destroyed, because by the Cold War, by 1948, though individual communists continued to do their work, the party wasn’t simply outlawed – it was crushed under the pressure of Bull Connor and his regime. We need to come to terms with that history, because I think that the best of this generation is an echo of that moment, and it proves to me, and this is a really important lesson, that anti-racism and class solidarity are not mutually exclusive. It shows the importance of fighting all forms of oppression – not just race and class, but gender oppression, sexism, transphobia, homophobia, and ableism – that none of these things can be separated off and left to the side, that a truly, fundamental abolitionist future requires that they all be held together. And the Communist Party of Alabama shows that that actually could happen.”
Scahill: “Arundhati Roy, the great Indian writer, described coronavirus as a portal, and I’m wondering what your assessment is of the racial capitalist system at this moment in an election year with this rebellion that shows no signs of ceasing, with Trump in power and with so many people having their lives and their livelihoods put in the sniper scope of the government and the pandemic.”
“The pandemic is a portal. And as a portal, it’s just an opening. And as an opening, nothing’s guaranteed, but it’s an opening because it exposed the structure of racial and gendered capitalism and the violence meted out to the people who are most vulnerable. The fact that people are already dying from Covid-19 and then dying from state violence, with the video of Ahmaud Arbery, for example, the killing of Breonna Taylor, that these kinds of things exposed both the underside of the health crisis, but also the top side of it – the continuation of racial violence, state-sanctioned violence. So when folks carry the sign around a protest saying “Stop killing us,” that’s a slogan we’ve been carrying for centuries. In some ways, it’s aimed at ending state-sanctioned racist violence, but also ending the violence of poverty, the violence of an unequal health care system, the violence of dilapidated housing, and the violence of economic strangulation. It’s not an accident that these things converge. The question is: What are we going to do in this portal? Do we have the political will to basically recognize the fact that all these conditions are inseparable, that with all these conditions, you can’t simply reform your way out of it? They have to be destroyed and a humane society created that cares about human beings and life itself, over wealth accumulation and property. Whether that happens or not remains to be seen. But I don’t think many portals open up. And this particular portal wasn’t simply rendered open by Covid-19. It was rendered open by what Covid-19 revealed in terms of the contradictions of society that claims to be a democracy and claims to care about people, but actually cares more about property and wealth accumulation than the lives of the most vulnerable. Inequality was foundational to capitalism, and as long as we hold onto those ideas and as long as capitalism exists as a means of accumulating wealth through exploitation, those ideas aren’t going to go away. To me, this is not a matter of a kind of slight redistribution, like let’s give more crumbs to the poor. Nor is it about just ending poverty as we know it. It is about creating a structure of caring and repair in which we can all benefit from our labor and our kind of collective generosity and create a whole new ethos, not just for the United States but for the world.”