ntA few months ago on the TV news, I saw what was dubbed a “red day”. This consisted of a bunch of people dressing up in red jackets or shirts carrying Canadian flags in “support of the troops.” You were left with the feeling that anyone with the temerity to show up with a banner saying “Support the Troops – Bring Em Home” would not be popular, to put it mildly. These pro-war demonstrations were organized by the Conservative government and their allies in the military. I thought it strange that they would dress in the color of the Liberal Party to support a war that only the right-wing is enamored of. But that wasn't what troubled me. The sight of people wearing a kind of political uniform demonstrating in favor of war and militarism had a familiar and ominous feeling about it. “Ah, but I am just being paranoid,” I thought.
Then, a few weeks ago I went to a demonstration in support of a coalition to replace the minority Conservative government. The anti-coalition right wing showed up for their demonstration, and low and behold many of them were dressed in red and waving Canadian flags. The hatred most of them directed toward us was something I had not seen in a long time. As a friend of mine said. “These people would stick us in a concentration camp if they could.” and I had the feeling he was not far off base.
I am sure if you were to question the people in red, they would hold reactionary opinions on a whole set of issues such as women, trade unions, First Nations, Quebec, immigrants etc. A kind of quasi-fascism has been whipped up by the Conservative Party and we must not allow them to get away with this.
Some other thoughts on this. This “people in red” thing is really a US import. We Canadians traditionally view wrapping yourself in the flag as vulgar and American. Anglo-Canadian nationalism is low key and tends to emphasize opposition to the influence of the US government and corporations upon our way of life, rather than some sort of rabid “Canuckism.” A further irony is the Conservative Party is the US corporate state's Canadian arm or Fifth Column. This is the party that wanted to drag us into the Iraq war of aggression. This is the party that wants to hand us over, lock, stock and barrel to US corporations. This is the party that destroyed the old Tory party and has imported US-style right-wing politics into this country.
But I have seen this before in Chile. The Pinochetistas are rabid, flag wrapped, super-nationalists – who gave their country over to the Gringos on a silver platter. Who killed or drove into exile the very people who created their national culture. Like the “people in red”, their nationalism is little more than a lot of noise.
What we have then, is a kind of “comprador fascism” Under the mask of nationalism they persecute – or in the case of the Canadian variety – intend to persecute - the progressive forces. The far-right mass are made up of “little people”, fearful and bigoted lower middle class types, but behind them lies the corporate ruling class. There is no longer a “national bourgeoisie”. The ruling class of Canada and the US have the same essential interests, and for them there is but one country to whom they are loyal - “Capitalistan.”
Tuesday, December 30, 2008
Friday, December 19, 2008
This is What Democracy in Ohio Looks Like
From the local to the global, the ability of people to govern themselves is under assault. Some of the major sources of this attack are:
- Business corporations looking to make huge profits by converting what once had been “public” to “private” (“privatization, “ though a more descriptive term would be “corporatization”), including traditional public assets like water and sewer systems, roads, police and fire protection, and now even schools.
- Individuals looking to increase their power, status, and/or privileges by concentrating decision-making from many hands (We the People and government) to few (their own).
- A culture that reinforces notions that public policies are too complicated for ordinary people to understand (thus leaving policy making to experts); that distracts public attention away from self-determination toward the trivial and inane; that worships “the market” as the route to financial and economic salvation which is not to be regulated or controlled; that define certain arenas (economic in particular) as outside the scope of public input; that continues to erase memory of any/all historical examples of citizen control and definition of their lives; that equates anything that is “public” as being inefficient, wasteful, decrepit, and dangerous and anything “private” as efficient, modern and safe; and that keeps people separated to learn from one another and organize to (re)assert meaningful changes.
- Continual legal and constitutional definitions that further “enclose” and redefine “public” arenas as other “Ps”: “private,” “property,” “proprietary,” “privileged”—and thus beyond the reach of public planning, public shaping, and public evaluation.
- A national government that under the guise of “terrorism” has given itself permission to stifle dissent, intimidate dissenters and interrupt effort of self-determination.
But there is another side to this – a democratic/self-determination culture or “infrastructure.” In our communities and across the state exist alternatives to corporations, corporate governance and elite control.
Scores of documents, policies, institutions, structures and groups reflecting inclusiveness are in place – examples where those who are affected by decisions and policies have a legitimate role in the shaping and making of those decisions… or could if we made the effort. They are where We the People have a voice … or could have a real voice if we merely flexed our self-determination muscles.
Many of these documents, policies, institutions, structures and groups are built on the notion of the commons, broadly understood historically as any sets of resources (i.e. land, water, air) that a community recognizes as being accessible to any member of that community. Implied is that every member of the community with equal access to the commons has a voice in managing or maintaining them.
Not all of these are “governmental,” some are grassroots created and maintained alternative initiatives bypassing corporate and/or top down government versions of the same function. In the midst of dysfunctional, nonfunctional, undemocratic and/or corrupt state or corporate structures, these alternative grassroots initiatives represent “parallel” institutions that currently coexist with state or corporate power but could over time assume greater legitimacy, if not substitution, if they are more effective in fulfilling the needs of people and communities.
All together, this is what democracy in Ohio looks like!
Some of these are unique to Ohio, most are not. They are meant to inform and/or remind us what we may too often take for granted – that documents, policies, institutions structures and groups exist that are, once were, or for the very first time can become democratic/self-determining. When we fail to use them or be involved in them, they will wither and die. By our not being aware of them, they surely will be manipulated, eliminated or replaced by shells or shams controlled by corporations, top down government or the power elite.
The examples listed below are in no way equally “inclusive” or “democractic”—some, in fact, might quite rightly be argued to be at the moment not very inclusive or democratic at all. There are varying degrees of self-determination here, some more so on paper than in practice, some more so depending on the place, condition, and people involved. But all have democratic “openings” or possibilities. Where social change energies should be placed is a separate strategic question. They also reflect a basic human reality – institutions or structures, no matter how democratically constructed or configured, never alone ensure democratic outcomes. The commitment to and will of people in creating and nurturing authentic self-determination may be most important of all – the force needed to drive a wide and deep wedge into even the narrowest organizational democratic crack.
This directory is not meant to be useful primarily from a “consumer” perspective (i.e. in answering the questions, "Where's the nearest food coop?" or “Is there a public radio station in my town?”) but rather from a democracy/self-determination perspective. That is, it seeks to help readers value the democratic / self-determination openings which still exist or could exist with investment of activist energies. It also strives to reinforce the simultaneous need in working for social change to create or nurture alternatives while working to democratize existing laws, constitutions, policies, practices, and organizations. Finally, the goal of this directory is to stimulate awareness of and actions addressing the multiple threats to what are deemed “public” and available for common use by the constant and cancerous corporate and top-down governmental encroachment in the name of “privatization” or “corporatizaton.”
Democracy/self-determination is not just aims but processes, not just ends but also means. Listed are examples of both – documents, policies, institutions, structures or groups actually reflecting democratic/self-determining values and principles and/or calling for them, even if the callers are not themselves the perfect practitioners.
This directory in many ways reflects and speaks to the need for what is called a “Solidarity Economy” – the growing global movement of people and organizations seeking a new framework for social and economic development based on the principles of social solidarity, cooperation, egalitarianism, sustainability and economic democracy that puts people and the planet before private profits and power. A national organization working in this direction that we plan to support is the US Solidarity Economic Network, http://www.ussen.org
There is no presumption that this list is exhaustive. Huge gaps exist beyond our limited awareness. It’s an ongoing work in progress, meant and, in fact, expected to be amended by readers. Please send additions, feedback, challenges and critiques to GColeridge@afsc.org. Updates will occur regularly.
This is what democracy in Ohio looks like!
Directory at
http://www.afsc.net/PDFFiles/InfrastructureDecember08.pdf
- Business corporations looking to make huge profits by converting what once had been “public” to “private” (“privatization, “ though a more descriptive term would be “corporatization”), including traditional public assets like water and sewer systems, roads, police and fire protection, and now even schools.
- Individuals looking to increase their power, status, and/or privileges by concentrating decision-making from many hands (We the People and government) to few (their own).
- A culture that reinforces notions that public policies are too complicated for ordinary people to understand (thus leaving policy making to experts); that distracts public attention away from self-determination toward the trivial and inane; that worships “the market” as the route to financial and economic salvation which is not to be regulated or controlled; that define certain arenas (economic in particular) as outside the scope of public input; that continues to erase memory of any/all historical examples of citizen control and definition of their lives; that equates anything that is “public” as being inefficient, wasteful, decrepit, and dangerous and anything “private” as efficient, modern and safe; and that keeps people separated to learn from one another and organize to (re)assert meaningful changes.
- Continual legal and constitutional definitions that further “enclose” and redefine “public” arenas as other “Ps”: “private,” “property,” “proprietary,” “privileged”—and thus beyond the reach of public planning, public shaping, and public evaluation.
- A national government that under the guise of “terrorism” has given itself permission to stifle dissent, intimidate dissenters and interrupt effort of self-determination.
But there is another side to this – a democratic/self-determination culture or “infrastructure.” In our communities and across the state exist alternatives to corporations, corporate governance and elite control.
Scores of documents, policies, institutions, structures and groups reflecting inclusiveness are in place – examples where those who are affected by decisions and policies have a legitimate role in the shaping and making of those decisions… or could if we made the effort. They are where We the People have a voice … or could have a real voice if we merely flexed our self-determination muscles.
Many of these documents, policies, institutions, structures and groups are built on the notion of the commons, broadly understood historically as any sets of resources (i.e. land, water, air) that a community
Not all of these are “governmental,” some are grassroots created and maintained alternative initiatives bypassing corporate and/or top down government versions of the same function. In the midst of dysfunctional, nonfunctional, undemocratic and/or corrupt state or corporate structures, these alternative grassroots initiatives represent “parallel” institutions that currently coexist with state or corporate power but could over time assume greater legitimacy, if not substitution, if they are more effective in fulfilling the needs of people and communities.
All together, this is what democracy in Ohio looks like!
Some of these are unique to Ohio, most are not. They are meant to inform and/or remind us what we may too often take for granted – that documents, policies, institutions structures and groups exist that are, once were, or for the very first time can become democratic/self-determining. When we fail to use them or be involved in them, they will wither and die. By our not being aware of them, they surely will be manipulated, eliminated or replaced by shells or shams controlled by corporations, top down government or the power elite.
The examples listed below are in no way equally “inclusive” or “democractic”—some, in fact, might quite rightly be argued to be at the moment not very inclusive or democratic at all. There are varying degrees of self-determination here, some more so on paper than in practice, some more so depending on the place, condition, and people involved. But all have democratic “openings” or possibilities. Where social change energies should be placed is a separate strategic question. They also reflect a basic human reality – institutions or structures, no matter how democratically constructed or configured, never alone ensure democratic outcomes. The commitment to and will of people in creating and nurturing authentic self-determination may be most important of all – the force needed to drive a wide and deep wedge into even the narrowest organizational democratic crack.
This directory is not meant to be useful primarily from a “consumer” perspective (i.e. in answering the questions, "Where's the nearest food coop?" or “Is there a public radio station in my town?”) but rather from a democracy/self-determination perspective. That is, it seeks to help readers value the democratic / self-determination openings which still exist or could exist with investment of activist energies. It also strives to reinforce the simultaneous need in working for social change to create or nurture alternatives while working to democratize existing laws, constitutions, policies, practices, and organizations. Finally, the goal of this directory is to stimulate awareness of and actions addressing the multiple threats to what are deemed “public” and available for common use by the constant and cancerous corporate and top-down governmental encroachment in the name of “privatization” or “corporatizaton.”
Democracy/self-determination is not just aims but processes, not just ends but also means. Listed are examples of both – documents, policies, institutions, structures or groups actually reflecting democratic/self-determining values and principles and/or calling for them, even if the callers are not themselves the perfect practitioners.
This directory in many ways reflects and speaks to the need for what is called a “Solidarity Economy” – the growing global movement of people and organizations seeking a new framework for social and economic development based on the principles of social solidarity, cooperation, egalitarianism, sustainability and economic democracy that puts people and the planet before private profits and power. A national organization working in this direction that we plan to support is the US Solidarity Economic Network, http://www.ussen.org
There is no presumption that this list is exhaustive. Huge gaps exist beyond our limited awareness. It’s an ongoing work in progress, meant and, in fact, expected to be amended by readers. Please send additions, feedback, challenges and critiques to GColeridge@afsc.org. Updates will occur regularly.
This is what democracy in Ohio looks like!
Directory at
http://www.afsc.net/PDFFiles/InfrastructureDecember08.pdf
Saturday, December 13, 2008
Questions About Cooperative Socialism
The following questions were based on the previous article "The Myth of Socialism as Statism"
Anders writes: It definitely makes sense that a system of local control of the economy and governmental functions is quite different from the statist national socialism the people associate with the word socialism today. I'd be curious to see several things.
Question
1. What prevents workers co-ops?
1a. Most rich people's wealth is primarily tied up in capital goods that give workers jobs and produce goods that ordinary people buy (e.g. cars, flat screen tvs, clothes, books, houses.)
To the degree that capital comes from workers pension funds, don't workers own the means of production?
Doesn't all of this serve the same social function as co-ops?
ANS. 1. Lack of capital. Lack of the sort of privileges that the state granted to capitalists in order to establish the capitalist system.
1a. Ownership without control is meaningless. Think of "owning" a house, but not allowed to live in it our have any say over what happens to it. Workers have no control of their pension funds and those same funds have little direct say over the companies they technically own part of. The thing about coops is that members have a direct say in the direction of the coops, and a share of the profits. In no capitalist corporation do workers have the former, and only a small minority the latter, and even then the vast bulk of the profits go to the top.
Question
2.If all power dissolves to the local level - what is to prevent
a. people from seceding to have single family co-ops and businesses.
b. the local powers that be from oppressing newcomers and the younger generation.
c. the municipalities from being statist and failing just like real states? Similarly wouldn't the local municipalities that are most successful be like little hong kongs with comparatively few rules or municipal control?
d. didn't small scale socialist experiments always fail? similarly municipal socialism was always a drain on the local government. Privatization is important today precisely because the state needs productive private enterprise that it can tax, public enterprise is a drain on state resources.
e. How do co-ops and municipalities and various economic enterprises get created and how do the old ones disappear? In free enterprise firms dissolve and merge and get created from scratch.
f. what kind of violence would be necessary to maintain the system?
ANS. a. Nothing. And in a free society you could not put such restraints. But "all power would not dissolve to the local level." This is not political or economic autarky. As a paleao-libertarian, I am sure you are familiar with federalism and the subsidiary concept. They apply here and in questions b and c. As well.
b. A constitution and direct democracy of the town meeting/neighborhood assembly type combined with worker councils.
c. The municipalities would be situated within county, regional and national federations. Towns taken over by authoritarians would still have to deal with these federations.
d. I presume you are talking about either worker coops or "utopian" colonies.The former did in the 19th and early 20th Century due to severe under-capitalization due to working class poverty, governmental and corporate hostility. Today, there are thousands of worker coops and many of them are successful by any standard. Utopian colonies are not the pervue of this article, the vast majority did fail due to poor conception. The intentional communities of today, such as Georgist land trusts, eco villages, cooperative communities, and so forth have done rather well, all considered. I don't favor government ownership of any kind, so I really can't justify "municipal socialism", other than to say that I don't think that it has always been a drain on a community. Most municipal "nationalizations" were carried out not because of any ideology, but by conservative governments for practical reasons – corporate capitalism could not deliver the goods. I added "municipal ownership" because I am a political realist – Mutualists will not be the only tendency influencing events. (to say the least!)
e. Like any other business – people get together, form an association. They disappear when the members decide that they don't wish to continue with the project.
f As a system, very little. Since everyone would have a say in how their community is governed and the nature of the economy and workplace, since everyone would get a share of the wealth and extreme economic differences would disappear, there would be a restoration of community, and thus a decline in the social problems that create conflict with our present society.
I should add that none of the above is utopian. Coops already exist as do forms of direct democracy, decentralization and genuine federalism. All that is required is that such tendencies be generalized. And the countries that are the most egalitarian and democratic are also the ones with the least internal violence/social problems.
Anders writes: It definitely makes sense that a system of local control of the economy and governmental functions is quite different from the statist national socialism the people associate with the word socialism today. I'd be curious to see several things.
Question
1. What prevents workers co-ops?
1a. Most rich people's wealth is primarily tied up in capital goods that give workers jobs and produce goods that ordinary people buy (e.g. cars, flat screen tvs, clothes, books, houses.)
To the degree that capital comes from workers pension funds, don't workers own the means of production?
Doesn't all of this serve the same social function as co-ops?
ANS. 1. Lack of capital. Lack of the sort of privileges that the state granted to capitalists in order to establish the capitalist system.
1a. Ownership without control is meaningless. Think of "owning" a house, but not allowed to live in it our have any say over what happens to it. Workers have no control of their pension funds and those same funds have little direct say over the companies they technically own part of. The thing about coops is that members have a direct say in the direction of the coops, and a share of the profits. In no capitalist corporation do workers have the former, and only a small minority the latter, and even then the vast bulk of the profits go to the top.
Question
2.If all power dissolves to the local level - what is to prevent
a. people from seceding to have single family co-ops and businesses.
b. the local powers that be from oppressing newcomers and the younger generation.
c. the municipalities from being statist and failing just like real states? Similarly wouldn't the local municipalities that are most successful be like little hong kongs with comparatively few rules or municipal control?
d. didn't small scale socialist experiments always fail? similarly municipal socialism was always a drain on the local government. Privatization is important today precisely because the state needs productive private enterprise that it can tax, public enterprise is a drain on state resources.
e. How do co-ops and municipalities and various economic enterprises get created and how do the old ones disappear? In free enterprise firms dissolve and merge and get created from scratch.
f. what kind of violence would be necessary to maintain the system?
ANS. a. Nothing. And in a free society you could not put such restraints. But "all power would not dissolve to the local level." This is not political or economic autarky. As a paleao-libertarian, I am sure you are familiar with federalism and the subsidiary concept. They apply here and in questions b and c. As well.
b. A constitution and direct democracy of the town meeting/neighborhood assembly type combined with worker councils.
c. The municipalities would be situated within county, regional and national federations. Towns taken over by authoritarians would still have to deal with these federations.
d. I presume you are talking about either worker coops or "utopian" colonies.The former did in the 19th and early 20th Century due to severe under-capitalization due to working class poverty, governmental and corporate hostility. Today, there are thousands of worker coops and many of them are successful by any standard. Utopian colonies are not the pervue of this article, the vast majority did fail due to poor conception. The intentional communities of today, such as Georgist land trusts, eco villages, cooperative communities, and so forth have done rather well, all considered. I don't favor government ownership of any kind, so I really can't justify "municipal socialism", other than to say that I don't think that it has always been a drain on a community. Most municipal "nationalizations" were carried out not because of any ideology, but by conservative governments for practical reasons – corporate capitalism could not deliver the goods. I added "municipal ownership" because I am a political realist – Mutualists will not be the only tendency influencing events. (to say the least!)
e. Like any other business – people get together, form an association. They disappear when the members decide that they don't wish to continue with the project.
f As a system, very little. Since everyone would have a say in how their community is governed and the nature of the economy and workplace, since everyone would get a share of the wealth and extreme economic differences would disappear, there would be a restoration of community, and thus a decline in the social problems that create conflict with our present society.
I should add that none of the above is utopian. Coops already exist as do forms of direct democracy, decentralization and genuine federalism. All that is required is that such tendencies be generalized. And the countries that are the most egalitarian and democratic are also the ones with the least internal violence/social problems.
The Myth Of Socialism As Statism
This is from 2 years ago but an interesting set of questions was sent to me - appearing in the next posting based on this article.
What did the original socialists envision to be the owner and controller of the economy? Did they think it ought to be the state? Did they favor nationalization? Or did they want something else entirely? Let’s have a look, going right back to the late 18th Century, through the 19th and into the 20th, and see what important socialists and socialist organizations thought.
*Thomas Spence – farm land and industry owned by join stock companies, all farmers and workers as voting shareholders.
* St. Simon – a system of voluntary corporations
* Ricardian Socialists – worker coops
* Owen – industrial coops and cooperative intentional communities
* Fourier – the Phlanistery – an intentional community
* Cabet - industry owned by the municipality (“commune” in French, hence commune-ism)
* Flora Tristan – worker coops
* Proudhon – worker coops financed by Peoples Bank – a kind of credit union that issued money.
* Greene – mutualist banking system allowing farmers and workers to own means of production.
* Lasalle – worker coops financed by the state – for which he was excoriated by Marx as a “state socialist”
* Marx – a “national system of cooperative production”
* Tucker - mutualist banking system allowing farmers and workers to own means of production.
* Dietzgen – cooperative production
* Knights of Labor – worker coops
* Parsons – workers ownership and control of production
* Vanderveldt – socialist society as a ‘giant cooperative”
* Socialist Labor Party – industry owned and run democratically thru the Socialist Industrial Unions
* Socialist Party USA – until late 1920’s emphasized workers control of production.
* CGT France, 1919 Program - mixed economy with large industry owned by stakeholder coops.
* IWW – democratically run through the industrial unions.
* Socialist Party of Canada, Socialist Party of Great Britain, 1904-05 program – common ownership, democratically run – both parties, to this very day, bitterly opposed to nationalization.
* SDP – Erfurt Program 1892 – Minimum program includes a mixed economy of state, cooperative and municipal industries. While often considered a state socialist document, in reality it does not give predominance to state ownership.
Well? Where’s the statism? All these socialisms have one thing in common, a desire to create an economy where everyone has a share and a say.
Why The Confusion
The state did play a role in the Marxist parties of the Second International. But its role was not to nationalize industry and create a vast bureaucratic state socialist economy. Put simply, the workers parties were to be elected to the national government, and backed by the trade unions, cooperative movement and other popular organizations, would expropriate the big capitalist enterprises. Three things would then happen: 1. The expropriated enterprises handed over to the workers organizations, coops and municipalities. 2, The army and police disbanded and replaced by worker and municipal militias. 3. Political power decentralized to the cantonal and
municipal level and direct democracy and federalism introduced. These three aspects are the famous “withering away of the state” that Marx and Engels talked about.
The first problem with this scenario was that the workers parties never got a majority in parliament. So they began to water-down their program and adopt a lot of the statist reformism of the liberal reformers. Due to the Iron Law of Oligarchy the parties themselves became sclerotic and conservative. Then WW1 intervened, splitting the workers parties into hostile factions. Finally, under the baleful influence of the Fabians, the Stalinists and the “success” of state capitalism in the belligerent nations, the definition of socialism began to change from one of democratic and worker ownership and control to nationalization and statism. The new post-war social democracy began to pretend that state ownership/control was economic democracy since the state was democratic. This, as we see from the list above, was not anything like the economic democracy envisaged by the previous generations of socialists and labor militants.
What did the original socialists envision to be the owner and controller of the economy? Did they think it ought to be the state? Did they favor nationalization? Or did they want something else entirely? Let’s have a look, going right back to the late 18th Century, through the 19th and into the 20th, and see what important socialists and socialist organizations thought.
*Thomas Spence – farm land and industry owned by join stock companies, all farmers and workers as voting shareholders.
* St. Simon – a system of voluntary corporations
* Ricardian Socialists – worker coops
* Owen – industrial coops and cooperative intentional communities
* Fourier – the Phlanistery – an intentional community
* Cabet - industry owned by the municipality (“commune” in French, hence commune-ism)
* Flora Tristan – worker coops
* Proudhon – worker coops financed by Peoples Bank – a kind of credit union that issued money.
* Greene – mutualist banking system allowing farmers and workers to own means of production.
* Lasalle – worker coops financed by the state – for which he was excoriated by Marx as a “state socialist”
* Marx – a “national system of cooperative production”
* Tucker - mutualist banking system allowing farmers and workers to own means of production.
* Dietzgen – cooperative production
* Knights of Labor – worker coops
* Parsons – workers ownership and control of production
* Vanderveldt – socialist society as a ‘giant cooperative”
* Socialist Labor Party – industry owned and run democratically thru the Socialist Industrial Unions
* Socialist Party USA – until late 1920’s emphasized workers control of production.
* CGT France, 1919 Program - mixed economy with large industry owned by stakeholder coops.
* IWW – democratically run through the industrial unions.
* Socialist Party of Canada, Socialist Party of Great Britain, 1904-05 program – common ownership, democratically run – both parties, to this very day, bitterly opposed to nationalization.
* SDP – Erfurt Program 1892 – Minimum program includes a mixed economy of state, cooperative and municipal industries. While often considered a state socialist document, in reality it does not give predominance to state ownership.
Well? Where’s the statism? All these socialisms have one thing in common, a desire to create an economy where everyone has a share and a say.
Why The Confusion
The state did play a role in the Marxist parties of the Second International. But its role was not to nationalize industry and create a vast bureaucratic state socialist economy. Put simply, the workers parties were to be elected to the national government, and backed by the trade unions, cooperative movement and other popular organizations, would expropriate the big capitalist enterprises. Three things would then happen: 1. The expropriated enterprises handed over to the workers organizations, coops and municipalities. 2, The army and police disbanded and replaced by worker and municipal militias. 3. Political power decentralized to the cantonal and
municipal level and direct democracy and federalism introduced. These three aspects are the famous “withering away of the state” that Marx and Engels talked about.
The first problem with this scenario was that the workers parties never got a majority in parliament. So they began to water-down their program and adopt a lot of the statist reformism of the liberal reformers. Due to the Iron Law of Oligarchy the parties themselves became sclerotic and conservative. Then WW1 intervened, splitting the workers parties into hostile factions. Finally, under the baleful influence of the Fabians, the Stalinists and the “success” of state capitalism in the belligerent nations, the definition of socialism began to change from one of democratic and worker ownership and control to nationalization and statism. The new post-war social democracy began to pretend that state ownership/control was economic democracy since the state was democratic. This, as we see from the list above, was not anything like the economic democracy envisaged by the previous generations of socialists and labor militants.
Monday, December 8, 2008
Solidarity Quebec Victory
Solidarite Quebec has won a seat in the Quebec election. Although this is
only one seat this indicates a growing radicalization. The QS is a party of
the social movements and rejects the neo-liberalism of the Parti Quebecois.
It is also more radical than the NDP and is the first new left-wing
See http://www.quebecsolidaire.net/
Friday, December 5, 2008
Conservatives – the Stupid Party?
Yes, there are intelligent people who call themselves conservatives. Most of these hearken back to the humanitarian side of classical liberalism or to old fashioned Tory social consciousness. But they are few in number, cruelly thrust aside by neoconservative or neoliberal barbarism. (See my previous posting.)
It makes some sense that the wealthy and powerful should wish to conserve their power and wealth, even though this is done at our expense. It also makes sense that a host of toadies, such as loyal servants, hangers-on and wannabees, would have similar ideas to their masters. Then there are the various religious hate cults which the wealthy and powerful encourage. These "Christians" can be counted on to hate their neighbor, to be obsessed with the sins of the poor and ignore the atrocities committed by the master class. Combine the rich, the toadies and the nuts and you maybe get 20% of the population. But the cons can get up to 40% support. What about the other 20%?
It is hard for any rational, thoughtful person to be a right-winger. Even a basic knowledge of history shows us that to be "right" is to always be wrong. On every single issue of importance for the last 300 years the forces of progress have been correct and the forces of reaction dead wrong. Consider this list:
Parliament vs. the king. The right chose the king, parliament won. Slavery – the right supported the slave-owners. Universal male suffrage – the right opposed. Democratic and human rights for women, the right opposed. Colonialism – the left opposed, the right supported. Fascism, the left opposed, the right appeased, aided and abetted. Independence for the colonies, the right opposed. The US Civil Rights Movement, the right opposed. The women's movement, the right opposed. Environmentalism, the right opposed. Global warming, the right denies...
While the great mass of conservatives are not well educated and lack cultural sophistication, they in a sense, choose to be stupid. Ignorance is no excuse these days. With the Internet one can find an entire library of information on any subject in history with in seconds. Ignorance today is willful ignorance. To be willfully ignorant is to be stupid, even though you may not be so innately. To be willfully ignorant is to deliberately block out that which you do not want to know about, in other words, to be in a state of denial. But denial is not a conscious choice, like choosing brands of soup, but is rooted in sub-conscious repression.
Does the Conservative Mass Suffer From Stockholm Syndrome?
Dr. Gabor Mate in an interview given recently on CHLY, stated that people who are prejudiced against certain groups, in this case the homeless and drug addicts, are themselves emotionally wounded, but in a state of denial. In denying their own pain they deny it in others. The walking reminders of their own suffering, suffering that they have repressed, and therefore on the surface able to "cope with life", creates the "blame the victim" scenario. We are all familiar with the self-righteous letters to the editor (or even, shamefully enough, editorials) along the lines of "I was abused as as child but I didn't end up __________ " Or "These people could stop doing drugs if they wanted to." "They need to buck up, that's all." "The residential schools closed years ago, they are just an excuse."
I would take this further. One of the key aspects of conservative politics is the authoritarian personality. Statistically, someone with an authoritarian personality is far more likely to be attracted to the right than the left. Authoritarianism does not come out of the air, but is inculcated by authoritarian parenting. Such parenting by its very nature is abusive, as it is based upon repression, fear, and neglect of the child's emotional needs. The children of authoritarian parents are not allowed to express the rage that results from their parenting and thus repress it, giving rise to the state of denial. As adults they will fervently claim they adore their parents and their upbringing was the best imaginable.
Everyone with an authoritarian personality is a wounded individual. For the mass of ordinary people who have been subjected to an authoritarian parenting, the abuse does not end there. Throughout their lives they will be humiliated, bullied, and exploited by a range of authority figures such as teachers, police, bosses, politicians, bureaucrats and so forth. (Keep in mind these abusive officials are themselves deeply wounded individuals.)
What we then get is a form of Stockholm Syndrome. The dominated and humiliated tend to identify with their oppressors, in the same way that the kidnapped victims of terrorists sometimes identify with their captors. While the captive's affirmation of the terrorists is a result of both traumatization and the usually just cause (but not methods) of their captors, the mass conservative form is rooted in childhood trauma and subsequent repression.
The prejudices promoted by the rulers are similar to those that the conservative victim has learned from his parents. This provides the ideological link, in the same way the terrorists claims of fighting for freedom and justice, provide the link for the kidnapped. The childhood trauma and denial allow a shift from "I love my parents" (Who abused me - which is repressed) to "I love my boss" (Who bullies and exploits me – repressed) and "I love my President/Prime Minister" (Who sends my children off to be killed and squanders my tax money – repressed.)
A growing tendency toward humane parenting since WW2 has helped to undermine the dominant nature of the authoritarian personality. The right knows this, and hence the so-called culture war. It would be fine if we had several hundred years, but we don't. We face a triple threat – global economic crisis, global warming and peak oil. How do we neutralize the impact of, if not help cure the victims of conservative Stockholm Syndrome?
It makes some sense that the wealthy and powerful should wish to conserve their power and wealth, even though this is done at our expense. It also makes sense that a host of toadies, such as loyal servants, hangers-on and wannabees, would have similar ideas to their masters. Then there are the various religious hate cults which the wealthy and powerful encourage. These "Christians" can be counted on to hate their neighbor, to be obsessed with the sins of the poor and ignore the atrocities committed by the master class. Combine the rich, the toadies and the nuts and you maybe get 20% of the population. But the cons can get up to 40% support. What about the other 20%?
It is hard for any rational, thoughtful person to be a right-winger. Even a basic knowledge of history shows us that to be "right" is to always be wrong. On every single issue of importance for the last 300 years the forces of progress have been correct and the forces of reaction dead wrong. Consider this list:
Parliament vs. the king. The right chose the king, parliament won. Slavery – the right supported the slave-owners. Universal male suffrage – the right opposed. Democratic and human rights for women, the right opposed. Colonialism – the left opposed, the right supported. Fascism, the left opposed, the right appeased, aided and abetted. Independence for the colonies, the right opposed. The US Civil Rights Movement, the right opposed. The women's movement, the right opposed. Environmentalism, the right opposed. Global warming, the right denies...
While the great mass of conservatives are not well educated and lack cultural sophistication, they in a sense, choose to be stupid. Ignorance is no excuse these days. With the Internet one can find an entire library of information on any subject in history with in seconds. Ignorance today is willful ignorance. To be willfully ignorant is to be stupid, even though you may not be so innately. To be willfully ignorant is to deliberately block out that which you do not want to know about, in other words, to be in a state of denial. But denial is not a conscious choice, like choosing brands of soup, but is rooted in sub-conscious repression.
Does the Conservative Mass Suffer From Stockholm Syndrome?
Dr. Gabor Mate in an interview given recently on CHLY, stated that people who are prejudiced against certain groups, in this case the homeless and drug addicts, are themselves emotionally wounded, but in a state of denial. In denying their own pain they deny it in others. The walking reminders of their own suffering, suffering that they have repressed, and therefore on the surface able to "cope with life", creates the "blame the victim" scenario. We are all familiar with the self-righteous letters to the editor (or even, shamefully enough, editorials) along the lines of "I was abused as as child but I didn't end up __________ " Or "These people could stop doing drugs if they wanted to." "They need to buck up, that's all." "The residential schools closed years ago, they are just an excuse."
I would take this further. One of the key aspects of conservative politics is the authoritarian personality. Statistically, someone with an authoritarian personality is far more likely to be attracted to the right than the left. Authoritarianism does not come out of the air, but is inculcated by authoritarian parenting. Such parenting by its very nature is abusive, as it is based upon repression, fear, and neglect of the child's emotional needs. The children of authoritarian parents are not allowed to express the rage that results from their parenting and thus repress it, giving rise to the state of denial. As adults they will fervently claim they adore their parents and their upbringing was the best imaginable.
Everyone with an authoritarian personality is a wounded individual. For the mass of ordinary people who have been subjected to an authoritarian parenting, the abuse does not end there. Throughout their lives they will be humiliated, bullied, and exploited by a range of authority figures such as teachers, police, bosses, politicians, bureaucrats and so forth. (Keep in mind these abusive officials are themselves deeply wounded individuals.)
What we then get is a form of Stockholm Syndrome. The dominated and humiliated tend to identify with their oppressors, in the same way that the kidnapped victims of terrorists sometimes identify with their captors. While the captive's affirmation of the terrorists is a result of both traumatization and the usually just cause (but not methods) of their captors, the mass conservative form is rooted in childhood trauma and subsequent repression.
The prejudices promoted by the rulers are similar to those that the conservative victim has learned from his parents. This provides the ideological link, in the same way the terrorists claims of fighting for freedom and justice, provide the link for the kidnapped. The childhood trauma and denial allow a shift from "I love my parents" (Who abused me - which is repressed) to "I love my boss" (Who bullies and exploits me – repressed) and "I love my President/Prime Minister" (Who sends my children off to be killed and squanders my tax money – repressed.)
A growing tendency toward humane parenting since WW2 has helped to undermine the dominant nature of the authoritarian personality. The right knows this, and hence the so-called culture war. It would be fine if we had several hundred years, but we don't. We face a triple threat – global economic crisis, global warming and peak oil. How do we neutralize the impact of, if not help cure the victims of conservative Stockholm Syndrome?
Banks Bankrupt Democracy
The billions upon billions of dollars thrown at banks and insurance companies over the last few months has been beyond comprehension. Has there ever been a time when government has been so lavishly generous to assist, if not bailout, the most economically and politically powerful sector of business corporations?
Under the guise of “too big to fail,” our tax dollars have gone to bailout “Wall Street” with few conditions. Meanwhile, our “main streets,” ”side streets,” and “backstreets” suffer and crumble from neglect.
Those who came before us who struggled for political and economic freedom would be ashamed of our lack of outrage, not to mention resistance.
Public fear and anger toward commercial banks have been a historic reality -- for good reason. Those who control money control credit. Those who control the money supply shape governments and non-financial corporations.
Denial of loans by banks to finance wars brought Kings to their knees. Supplying money to industrial corporations enabled mass production and massive profits
The early founders of Ohio and this nation understood the inherent power of financial interests. Thomas Jefferson said, “We must crush in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government, and bid defiance to the laws of our country.”
In an 1802 letter to his Treasury Secretary Albert Gallatin, Jefferson also reflected:
I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.
Early Ohio governance was based on similar fears. The Ohio Legislature awarded charters, granting the privilege for corporations to exist and operate in the state, to corporations one at a time. The terms were
rigid, especially for banking corporations. In the 1808 law to incorporate the Bank of Marietta, the Ohio General Assembly established stringent defining rules, including:
- The charter was granted for only 10 years
- The maximum interest on loans was set at 6%
- All directors had to reside in the same country as
the bank
- Bank debts could not exceed 3 times the sum
value of capital stock
- Bank directors were personally liable for excessive
debt
The public through the state legislature possessed and used their authority repeatedly to establish defining rules under which banks had to operate.
Business corporations violating the terms of their charters were severely punished by having their charters repealed, effectively dissolving their enterprises with assets distributed to the community and/or among those directly harmed. Banks were frequent violators and targets.
In an act to repeal the charter of the German Bank of Wooster in Wayne County and close its doors, the Ohio legislature stated:
It shall be the duty of the court of common pleas... or any judge of the supreme court...to restrain said bank, its officers, agents and servants or assignees, from exercising any corporate rights, privileges, and franchises whatever, or from paying out, selling, transferring, or in any way disposing of, the lands, tenements, goods, chattels, rights, credits, moneys, or effects whatsoever, of said bank... and force the bank commissioners to close the bank and deliver full possession of the banking house, keys, books, papers, lands, tenements, goods, chattels, moneys, property and effects of said bank, of every kind and description whatever...
The legislature authorized that the bank commissioners,
...shall possess the powers common to sheriffs... and may break open any house, or other building, in which any property, money, books, papers, or effects of said bank may be, having first made demand of entrance into such building; and if the said bank has made any assignment or transfer of its effects, books, property, papers, etc. for the settlement or with a view to its insolence, or for the purpose of avoiding the operations of this law, the same shall be deemed and treated as absolutely void.
Violators of the terms shall be deemed guilty of a crime, and, upon conviction, thereof, shall be imprisoned in the penitentiary and kept at hard labor, not less than one, nor more than 10 years.
Ohioans through their elected state legislature took this controlling bank business seriously. The state legislature in 1816 passed the “bonus law” which extended the charters of existing banks and tax exemption in exchange for a percentage of direct public ownership.
When the federally-chartered Second National Bank called in their debts as a result of the 1819 US economic collapse, Ohio banks were unable to come up with enough gold or silver to meet their $100,000 obligation. Ohioans would suffer as most could not pay off loans at that time. In response, the state legislature passed the “crowbar law” which taxed both state branches of Second National $50,000 each and authorized the state auditor to collect. Ohio auditor, Ralph Osborn, responded by entering one of the branches, showed officials a warrant he had signed, entered the vault, scooped up notes and currency estimated at $100,000 and left.
It was not only the state legislature but the state courts who felt compelled to ensure that citizen sovereignty was protected from rising banking power. The Ohio Supreme Court concluded in four rulings in 1853, all concerning commercial banks, that a corporate charter was not a contract – a direct challenge to an 1819 US Supreme Court decision Dartmouth v Woodward. The Ohio court ruled that bank charters were at root not about individual property rights but public self-governing rights and could be fundamentally controlled.
One of the four cases was Knoup v the Piqua Bank. In its ruling, the Ohio Supreme Court stated:
…[A] banking institution is a public institution, appointed for public purposes – never legitimately created for private purposes… its operations are subject to the control of that public, who may, from time to time, as the public good may require, enlarge, restrain, limit, modify its powers and duties, and, at pleasure, dispense with its benefits.
Our government if founded upon that sublime truth, acknowledged in both our present and old constitutions, as well as in the Declaration of Independence, that all men are created free and equal, and that every exemption, immunity or privilege, is an invasion of the primordial estate, and natural rights of other citizens. Whenever, therefore, a franchise is conferred, upon a corporation, or an individual, nothing but the public good is to be considered: the private advantage which may result to the corporation or individual, is but incidental to the chief object and cannot ripen into a right of property.
…[W]hen the legislature authorizes… a bank to make currency, it grants what belongs to the public. The resumption of which privilege by the public affects no property, impairs no contract, infringes no right, but merely restores to its proper place, so much of popular sovereignty as was claimed by a grant of questionable authority, in clear derogation of common right.
Fears and anger toward economic and political power of banks were not just felt by Ohioans, but by citizens across the land. The Populist movement from the 1870’s to 1890’s focused their educational and organizational resistance to railroads and banks – believing that these corporations were impoverishing farmers and workers and destroying democracy. Their political party treatise, the Omaha Platform, stated:
We demand a national currency, safe, sound, and flexible, issued by the general government only, a full legal tender for all debts, public and private, and that without the use of banking corporations, a just, equitable, and efficient means of distribution direct to the people…
The Federal Reserve Act of 1913 only fueled the fear and anger toward banks and banking power in the minds of millions of citizens. The creation of the private grossly misnamed Federal Reserve Bank centralized currency creation and money supply in the hands of private bankers largely beyond the reach of the public. The Act established basic financial rules defined largely by the largest US banks. It created a financial cartel with all the concentration of economic wealth and political power that goes with it. Money could be created literally out of thin air on bank ledgers as loans issued to individuals, businesses, even governments.
Money is no longer backed by gold, silver or anything of real, intrinsic value or worth. In an economic crisis, whether recession or depression, more money is just added to the economy. This is inflationary.
Over the last several decades, financial institutions have rushed to the government to be bailed out. Risky investments in the 1980’s resulted in the collapse of hundreds of Savings and Loans and cost taxpayers $150 billion (some say twice this amount).
The current financial bailout of $700 billion to rescue the largest US banks in simply the latest installment of the privatizing profits and socializing losses scheme. This doesn’t include the $144 billion to bailout insurance giant AIG.
The financial sector has invested in politicians for years to ensure favorable treatment in the event of conditions like this. The financial sector was the single largest investor to George Bush’s 2004 campaign ($33.8 million) according to Open Secrets. The financial sector in 2008 was the second largest sector investor to Barack Obama’s campaign ($33.1 million) and the largest sector investor to John McCain’s campaign ($26.2 million) just to make sure all their political bases were covered.
This is probably enough to make sure no bank or financial corporation CEO is “imprisoned in the penitentiary and kept at hard labor, not less than one, nor more than 10 years” as was the case in the past to bank officials in Ohio. A little hard labor in a penitentiary, however, certainly seems more appropriate for some of these CEOs than a golden parachute.
When the government bailed out Freddie Mac and Fannie Mae, the two critically wounded government-sponsored mortgage behemoths, to the amount of $200 billion; the Treasury Department effectively took them over….again. Originally these financial entities were public.
That may be the direction to take now – not simply public investment but public control. If banks want public dollars, the public should use their financial leverage to gain public control.
A second option is creating rules that reduce bank size. If banks are too big to fail (and have too much political influence), then they’re too big to exist. Break them up. Instead, recent federal rules coupled with funds from the $700 bailout package have resulted in further bank consolidation, including the acquisition of Cleveland-based National City bank by PNC bank of Pittsburgh.
Third, consideration should be given to revoking the charter of banks that have acted recklessly through risky investments, in particular those of buying and repackaging high risk mortgages for resale as quickly as possible. A charter revocation does not automatically mean a corporation has to be abolished and jobs lost – just remade under different terms. This could include holding managers and directors personally liable for reckless actions.
A fourth option is employee control. The top-down, private corporation is not the only business model known to the human species. If we feel greater democracy is required in our political spheres, what’s wrong with it in our economic spheres?
Economic Cooperatives are enterprises where workers and/or users are also owners. Decisions are democratically made by members (defined in different ways depending on the firm). There are still managers but they are beholden not to stockholders (who have power based on a “one dollar or share, one vote” system) but to members (based on a one person, one vote system). It’s an economic system mirroring our political system.
Banking corporations that may for good reason deserve to have their charters revoked would be prime candidates to have new terms defined encouraging a cooperative business model. If you think such a notion is complete pie-in-the-sky, just consider credit unions – financial institutions that are member owned and directed.
Finally, somewhere along the way the so-called and misnamed Federal Reserve Bank must be either significantly changed or abolished. Private banking corporations should not have the power to issue national currency.
Greater public awareness, action and resistance leading to greater sovereignty of our personal and national finances and financial institutions in not only sound economics but also essential to prevent the further bankruptcy of whatever amount of democracy we have left.
Under the guise of “too big to fail,” our tax dollars have gone to bailout “Wall Street” with few conditions. Meanwhile, our “main streets,” ”side streets,” and “backstreets” suffer and crumble from neglect.
Those who came before us who struggled for political and economic freedom would be ashamed of our lack of outrage, not to mention resistance.
Public fear and anger toward commercial banks have been a historic reality -- for good reason. Those who control money control credit. Those who control the money supply shape governments and non-financial corporations.
Denial of loans by banks to finance wars brought Kings to their knees. Supplying money to industrial corporations enabled mass production and massive profits
The early founders of Ohio and this nation understood the inherent power of financial interests. Thomas Jefferson said, “We must crush in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government, and bid defiance to the laws of our country.”
In an 1802 letter to his Treasury Secretary Albert Gallatin, Jefferson also reflected:
I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.
Early Ohio governance was based on similar fears. The Ohio Legislature awarded charters, granting the privilege for corporations to exist and operate in the state, to corporations one at a time. The terms were
rigid, especially for banking corporations. In the 1808 law to incorporate the Bank of Marietta, the Ohio General Assembly established stringent defining rules, including:
- The charter was granted for only 10 years
- The maximum interest on loans was set at 6%
- All directors had to reside in the same country as
the bank
- Bank debts could not exceed 3 times the sum
value of capital stock
- Bank directors were personally liable for excessive
debt
The public through the state legislature possessed and used their authority repeatedly to establish defining rules under which banks had to operate.
Business corporations violating the terms of their charters were severely punished by having their charters repealed, effectively dissolving their enterprises with assets distributed to the community and/or among those directly harmed. Banks were frequent violators and targets.
In an act to repeal the charter of the German Bank of Wooster in Wayne County and close its doors, the Ohio legislature stated:
It shall be the duty of the court of common pleas... or any judge of the supreme court...to restrain said bank, its officers, agents and servants or assignees, from exercising any corporate rights, privileges, and franchises whatever, or from paying out, selling, transferring, or in any way disposing of, the lands, tenements, goods, chattels, rights, credits, moneys, or effects whatsoever, of said bank... and force the bank commissioners to close the bank and deliver full possession of the banking house, keys, books, papers, lands, tenements, goods, chattels, moneys, property and effects of said bank, of every kind and description whatever...
The legislature authorized that the bank commissioners,
...shall possess the powers common to sheriffs... and may break open any house, or other building, in which any property, money, books, papers, or effects of said bank may be, having first made demand of entrance into such building; and if the said bank has made any assignment or transfer of its effects, books, property, papers, etc. for the settlement or with a view to its insolence, or for the purpose of avoiding the operations of this law, the same shall be deemed and treated as absolutely void.
Violators of the terms shall be deemed guilty of a crime, and, upon conviction, thereof, shall be imprisoned in the penitentiary and kept at hard labor, not less than one, nor more than 10 years.
Ohioans through their elected state legislature took this controlling bank business seriously. The state legislature in 1816 passed the “bonus law” which extended the charters of existing banks and tax exemption in exchange for a percentage of direct public ownership.
When the federally-chartered Second National Bank called in their debts as a result of the 1819 US economic collapse, Ohio banks were unable to come up with enough gold or silver to meet their $100,000 obligation. Ohioans would suffer as most could not pay off loans at that time. In response, the state legislature passed the “crowbar law” which taxed both state branches of Second National $50,000 each and authorized the state auditor to collect. Ohio auditor, Ralph Osborn, responded by entering one of the branches, showed officials a warrant he had signed, entered the vault, scooped up notes and currency estimated at $100,000 and left.
It was not only the state legislature but the state courts who felt compelled to ensure that citizen sovereignty was protected from rising banking power. The Ohio Supreme Court concluded in four rulings in 1853, all concerning commercial banks, that a corporate charter was not a contract – a direct challenge to an 1819 US Supreme Court decision Dartmouth v Woodward. The Ohio court ruled that bank charters were at root not about individual property rights but public self-governing rights and could be fundamentally controlled.
One of the four cases was Knoup v the Piqua Bank. In its ruling, the Ohio Supreme Court stated:
…[A] banking institution is a public institution, appointed for public purposes – never legitimately created for private purposes… its operations are subject to the control of that public, who may, from time to time, as the public good may require, enlarge, restrain, limit, modify its powers and duties, and, at pleasure, dispense with its benefits.
Our government if founded upon that sublime truth, acknowledged in both our present and old constitutions, as well as in the Declaration of Independence, that all men are created free and equal, and that every exemption, immunity or privilege, is an invasion of the primordial estate, and natural rights of other citizens. Whenever, therefore, a franchise is conferred, upon a corporation, or an individual, nothing but the public good is to be considered: the private advantage which may result to the corporation or individual, is but incidental to the chief object and cannot ripen into a right of property.
…[W]hen the legislature authorizes… a bank to make currency, it grants what belongs to the public. The resumption of which privilege by the public affects no property, impairs no contract, infringes no right, but merely restores to its proper place, so much of popular sovereignty as was claimed by a grant of questionable authority, in clear derogation of common right.
Fears and anger toward economic and political power of banks were not just felt by Ohioans, but by citizens across the land. The Populist movement from the 1870’s to 1890’s focused their educational and organizational resistance to railroads and banks – believing that these corporations were impoverishing farmers and workers and destroying democracy. Their political party treatise, the Omaha Platform, stated:
We demand a national currency, safe, sound, and flexible, issued by the general government only, a full legal tender for all debts, public and private, and that without the use of banking corporations, a just, equitable, and efficient means of distribution direct to the people…
The Federal Reserve Act of 1913 only fueled the fear and anger toward banks and banking power in the minds of millions of citizens. The creation of the private grossly misnamed Federal Reserve Bank centralized currency creation and money supply in the hands of private bankers largely beyond the reach of the public. The Act established basic financial rules defined largely by the largest US banks. It created a financial cartel with all the concentration of economic wealth and political power that goes with it. Money could be created literally out of thin air on bank ledgers as loans issued to individuals, businesses, even governments.
Money is no longer backed by gold, silver or anything of real, intrinsic value or worth. In an economic crisis, whether recession or depression, more money is just added to the economy. This is inflationary.
Over the last several decades, financial institutions have rushed to the government to be bailed out. Risky investments in the 1980’s resulted in the collapse of hundreds of Savings and Loans and cost taxpayers $150 billion (some say twice this amount).
The current financial bailout of $700 billion to rescue the largest US banks in simply the latest installment of the privatizing profits and socializing losses scheme. This doesn’t include the $144 billion to bailout insurance giant AIG.
The financial sector has invested in politicians for years to ensure favorable treatment in the event of conditions like this. The financial sector was the single largest investor to George Bush’s 2004 campaign ($33.8 million) according to Open Secrets. The financial sector in 2008 was the second largest sector investor to Barack Obama’s campaign ($33.1 million) and the largest sector investor to John McCain’s campaign ($26.2 million) just to make sure all their political bases were covered.
This is probably enough to make sure no bank or financial corporation CEO is “imprisoned in the penitentiary and kept at hard labor, not less than one, nor more than 10 years” as was the case in the past to bank officials in Ohio. A little hard labor in a penitentiary, however, certainly seems more appropriate for some of these CEOs than a golden parachute.
When the government bailed out Freddie Mac and Fannie Mae, the two critically wounded government-sponsored mortgage behemoths, to the amount of $200 billion; the Treasury Department effectively took them over….again. Originally these financial entities were public.
That may be the direction to take now – not simply public investment but public control. If banks want public dollars, the public should use their financial leverage to gain public control.
A second option is creating rules that reduce bank size. If banks are too big to fail (and have too much political influence), then they’re too big to exist. Break them up. Instead, recent federal rules coupled with funds from the $700 bailout package have resulted in further bank consolidation, including the acquisition of Cleveland-based National City bank by PNC bank of Pittsburgh.
Third, consideration should be given to revoking the charter of banks that have acted recklessly through risky investments, in particular those of buying and repackaging high risk mortgages for resale as quickly as possible. A charter revocation does not automatically mean a corporation has to be abolished and jobs lost – just remade under different terms. This could include holding managers and directors personally liable for reckless actions.
A fourth option is employee control. The top-down, private corporation is not the only business model known to the human species. If we feel greater democracy is required in our political spheres, what’s wrong with it in our economic spheres?
Economic Cooperatives are enterprises where workers and/or users are also owners. Decisions are democratically made by members (defined in different ways depending on the firm). There are still managers but they are beholden not to stockholders (who have power based on a “one dollar or share, one vote” system) but to members (based on a one person, one vote system). It’s an economic system mirroring our political system.
Banking corporations that may for good reason deserve to have their charters revoked would be prime candidates to have new terms defined encouraging a cooperative business model. If you think such a notion is complete pie-in-the-sky, just consider credit unions – financial institutions that are member owned and directed.
Finally, somewhere along the way the so-called and misnamed Federal Reserve Bank must be either significantly changed or abolished. Private banking corporations should not have the power to issue national currency.
Greater public awareness, action and resistance leading to greater sovereignty of our personal and national finances and financial institutions in not only sound economics but also essential to prevent the further bankruptcy of whatever amount of democracy we have left.
Subscribe to:
Comments (Atom)