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Sitting there looking vainly at the growth, or lack of it to be more precise, of the British economy quarter by quarter following the introduction of austerity measures is a dubious use of time. So rather than sit there each quarter and discuss a dismal economy, I think the first step is to understand that we are in a world-wide economic crisis of the capitalist system. We also need to understand that the policies being introduced are actually not only extending the current crisis, but given that they are leading to increased income and wealth inequality, they will have a devastating impact upon the working classes in the countries introducing these measures. Moreover, the impact of austerity is not accident, it is being introduced specifically to create the economic contraction and  the increased wealth and income inequality in the hope that private sector will take over the state sector services being undermined.

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Triple-dip recession?

We need to understand that the introduction of austerity in an economic crisis does not lead to economic growth contrary to the absurd pronouncements of Prime Minister, David Cameron.  Essentially, following a slight blip caused by the Olympics, I suspect we will be witnessing rather bad news. The combination of “beggar thy neighbour” low corporate taxation (to supposedly encourage investment in Britain) and cuts to public spending, services and benefits is not leading to a reinvigoration of the economy; rather the opposite is occurring.

Quite simply, the fall in service sector activity (which accounts for 75% of British economic activity) for the first time in two years (note that it was not in great shape beforehand) means that the economy is contracting.

“The closely watched CIPS/Markit purchasing managers index (PMI) for services dropped from 50.2 to 48.9 in December, below the 50 mark that separates expansion from contraction. It is the lowest reading since April 2009 and substantially undershot analyst forecasts of a rise to 50.5 (http://www.guardian.co.uk/...).”
There are additional things that indicate future problems. The manufacturing sector is geared towards export; decreases in demand due to the introduction of austerity in the periphery in the EU are starting to be felt in Great Britain (http://www.guardian.co.uk/...), whether this will be balanced by increased demand for luxury cars in China (http://www.bbc.co.uk/...) is another important question depending on the amount of trade to each area.

The collapse into administration of three high street companies [Jessops (2000 jobs at risk), HMV (4500 jobs at risk) and Blockbuster (4190 jobs at risk) will clearly add to unemployment. The fact that the internet buying is replacing these businesses means that workers who have lost jobs will not be rehired by these companies and some of these companies pay minimal taxes in Britain (e.g., Amazon).

In Britain we are seeing declining productivity because businesses use cheap labour rather than making capital investments (it makes no sense to introduce capital and increase productivity both due to labour costs being so low and no demand for increased goods and services); it also indicates that they are keeping people on irrespective of declining demand for goods:

“Figures for the economy as a whole were not much better, with a 2.4% decline in productivity over the year. The figures take the sheen off supposedly buoyant employment statistics that showed companies continuing to create jobs throughout last year.
Some companies have retained staff by forcing employees to accept pay freezes, or in some cases a cut in wages. But, as productivity declined, labour costs per unit of output rose by more than 3% over the year to October (http://www.guardian.co.uk/...).”
If businesses are keeping workers on irrespective of demand for their goods and services and waiting for the economy to pick up, what will happen if the economy does not pick up? Clearly, they will sack workers if the economy contracts. Moreover, if the economy picks up, most probably, they will force an increase in productivity by using speed-up or forcing workers to work harder to raise productivity. In either case, it is not a good sign for employment possibilities for workers in the near future. Additionally, there may be some problems with the government’s argument that jobs are being created in the private sector as they seemed to have misused the employment statistics of Office of National Statistics by including as employed those in government programmes who are not being paid by employers but rather through benefits (http://www.guardian.co.uk/business/2013/jan/15/uk-jobs-soar-real?INTCMP=SRCH)  which are far lower than even the woefully inadequate minimum wage that is not a living wage.  

Government concentration on the supply side of the labour market, as though people are lazy and do not want to work is the reason for unemployment is more than an obvious denial of reality. It is part of a divide and rule campaign demonising the poor and disabled as scroungers rather than addressing the fact that there are no jobs. This amounts to punishing the victims of the economic system (the poor and unemployed) and those that quite simply are unable to work due to illness and chronic health conditions. Cutting benefit will not force people into work, there need to be available jobs for that to occur; it will simply increase impoverishment and misery. An estimated 200,000 children are being pushed into poverty by the government’s policy of a 1% benefit cap over the next three years, (http://www.guardian.co.uk/...), a statistic not being disputed by the government.
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Quite simply, the attack is hitting the most vulnerable: the disabled, single mothers, the elderly and the long-term unemployed who are already barely surviving on benefits that are meagre to say the least. The government’s argument when introducing the 1% cap on benefits that benefits should not increase faster than wages (when stagnating and decreasing wages is part of government policy and benefits are so very low) is playing off the working class and the poor against each other. In a period of deliberately created increases income and wealth inequality fuelled by the incorrect view that profits and the income of the wealthy are the basis for economic growth, it is the majority in British society that are paying for the class warfare being waged in the advanced capitalist world.

Austerity and its impact:

While leading members of the IMF claim that they underestimated the impact of the introduction of austerity and pretend to be shocked at the situation in Greece,  the British government pretends that it does not understand that austerity is introduced to contract an economic system in the short run; both claims are extremely dubious to any person that has studied mainstream macroeconomic theory.

So, why is austerity being introduced and how has the government (and the Troika for that matter) got the strange idea that austerity will lead to economic growth? This relates to the impact of these measures in the long-run which attempt to remove “imbalances” between the public and private sector in favour of the later; in fact, David Cameron alludes to this when he makes the absurd argument “that the public sector cannot create growth.” However, for those that have any memory of the post-war period, we are well-aware that the public sector can create growth; it does so in three ways:

1)    Hiring people in the public sector (direct government job creation) creates jobs and income for those that did not have it who then use that money to buy goods and services from the private sector;

2)    The social welfare state provides additional income for those that do not have it and also provides services so that income is not spent on things provided by the government (e.g., health care), this means that there is more income to buy goods and services from the private sector;

3)    The government demands goods and services from the private sector; this removes uncertainty for the private sector in terms of investment, output production, and job creation.

All of these things benefit the private sector and are part of what enable economic growth especially following a bust in the economy; both government investment and higher incomes can create economic growth. Austerity measures will not do this in the short run and it is debatable whether this will be a successful strategy for economic growth in the long-term; the increasing instability introduced by increased wealth and income inequality and lack of regulation will certainly lead to deeper and stronger fluctuations.  
However, the government and large numbers of people in extra-governmental agencies (e.g., the IMF and the World Bank) believe that it is the private sector that are so-called “wealth creators” and they believe that privatisation (which enables the private sector to make profits providing these services instead of the government) and squeezing wages will enable profitability leading to economic growth. What we are seeing is that while this ideological argument may sound wonderful, reality is quite another story.
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It is necessary to understand the interrelationships between production, consumption and distribution in the context of a capitalist economic system to understand what is happening today. The capitalist system hit a point of over-accumulation in the collapse of the financial sector in 2008 and we are still in an economic crisis. While the financial sector recovered from the crisis due to bank bailouts and centralisation of surviving capital, the rest of the economy is not faring as well as an understatement.  

We are seeing the result of the long-term attack on the standards of living of working people in the advanced capitalist world from the late 1970s forwards, falling rates of profits in the industrial/manufacturing sectors in the advanced capitalist world due to high wages and decent working conditions leading to MNCs shifting production to the capitalist periphery to cut both labour costs and costs of raw materials has led to the creation of persistent unemployment in the advanced capitalist world and the shift of the economies in the advanced capitalist world to dependence upon the service sector.  
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Instead of shoring up the social welfare state and the state sector to keep employment and income up following the crash to enable a recovery, austerity measures have been either forced upon so-called debtor countries or introduced by right-wing governments throughout the majority of the advanced capitalist world. Bailout of the financial sectors led to both rising government deficits and rising public debt/GDP, the introduction of “austerity measures” essentially forced the majority to pay for the crisis due to deficit and debt reduction policies that they had no responsibility in creating. Shrinking the public sector, privatisation of public sector services (e.g., public health services) and selling off of nationalised companies (e.g., Greece, Spain and Italy), lowering pensions directly (e.g., Greece) and through changes in inflation indices (e.g., Great Britain), decreasing benefits, and wage and pension freezes for state workers is a direct assault on incomes. The attack on the public sector has also led to increased unemployment and the ability to introduce a wage squeeze for those still employed.  While theoretically this will cut costs and raise profits, the problem arises that decreased incomes means that demand has decreased and there will be no increased investment, employment and output in the absence of demand for these goods and services.
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While this has limited effect on the export-oriented manufacturing sector, that sector will certainly be affected by the introduction of austerity in the periphery of Europe.

Who are the wealth creators?

When Cameron (and other leaders in the advanced capitalist world) describe businessmen as “wealth creators” they seem to have forgotten the contribution of labour; land lying fallow creates nothing except spontaneously, capital does nothing in and of itself … it is the direct application of human labour (in combination with land and capital) that enables the creation of wealth. In the absence of sale at a price ensuring that profits are returned, profits remain unrealised. It is the incomes of working people that enable the sale of goods and undercutting their incomes means that goods and services will remain unsold. This deliberate inversion of the reality of the capitalist system serves them ideologically, but demonstrates a lack of understanding of the interrelationship between production, consumption and distribution.

So while privatisation potentially creates an area of profitable exploitation for the private sector, the decreased incomes of the majority means that they are unable to purchase services that were formerly socialised.  For those on lower incomes and those on benefits, purchase of services is far too expensive and it is women that are filling in the gap in services (e.g., child-care, caring for the sick and elderly) in their homes.  Contrary to neoliberal expectations, the private sector has not jumped into fill the gap, that is, because demand is not being matched by the income to pay for these things and the private sector will not create growth in the absence of perceived increases in demand and hence profitability.  That means, that all these policies will do is eliminate access to services on the part of the majority as they cannot pay for them and further increase impoverishment. The so-called wealth creators cannot create wealth without labour both in production and in consumption.
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Perhaps, they are taking their inversion of reality too seriously ... without demand there is no growth, without income there is no demand, without labour there is neither production nor consumption!

Originally posted to Anti-Capitalist Meetup on Sun Jan 20, 2013 at 11:00 AM PST.

Also republished by ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement.

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Comment Preferences

  •  Tip Jar (23+ / 0-)

    "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

    by NY brit expat on Sun Jan 20, 2013 at 11:00:08 AM PST

  •  piece has been cross-posted at (11+ / 0-)

    "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

    by NY brit expat on Sun Jan 20, 2013 at 11:09:07 AM PST

  •  After they eat the whole pig and there's nothing (10+ / 0-)

    left, then what?   Even George Harrison knew that all things must pass.   The greed and stupidity is overwhelming.

    What we need is a Democrat in the White House.

    by dkmich on Sun Jan 20, 2013 at 11:15:44 AM PST

    •  the thing that really gets me angrier (8+ / 0-)

      is the deliberate impoverishment of people using economic policy that they know will lead to impoverishment, the demonisation of the poor and disabled over here is disgusting, and all of it is predicated on economic theory which does not hold in the real world, ideology that the private sector is more efficient (where efficient means less employment and profit maximising criteria) and where the private sector has no interest in anything but destroying wages, work conditions and protection and workers benefits. It is a cynical use of economic theory to destroy people's lives ... the greed and stupidity is overwhelming, I agree completely dkmich!

      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

      by NY brit expat on Sun Jan 20, 2013 at 11:19:46 AM PST

      [ Parent ]

    •  fighting for the long term looks like a better (5+ / 0-)

      deal at this point -- as long as they don't kill us (and themselves)off completely in the meantime!

      •  we definitely need to be building now (8+ / 0-)

        there is no doubt that the con-dems will be out of power at the next election, however, labour is not planning on overturning the measures passed under this government. What we really need is a united left, building the movement (domestically and internationally as they have done this in much of the capitalist periphery, there is incredible exploitation going on there and this is being done throughout the advanced capitalist world) and perhaps (depending on the country) building a left-wing broad party of the left to give people something else to vote for than neoliberals of whatever stripe.

        "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

        by NY brit expat on Sun Jan 20, 2013 at 11:29:18 AM PST

        [ Parent ]

      •  Who is fighting for the long term? (7+ / 0-)

        I see a bunch of bickering over the deck chairs, but I don't see anybody setting a "new" course.    For a delusional minute, I thought we had something when Lamont successfully primaried Lieberman.   The Democrats took less than a minute to give us a dirty look, pick up, brush off, and prop up Lieberman.    

        The game is rigged, and we aren't even in the ball park.

        What we need is a Democrat in the White House.

        by dkmich on Sun Jan 20, 2013 at 11:31:33 AM PST

        [ Parent ]

        •  this is where the importance of building (8+ / 0-)

          a left-wing movement and possibly a broad party of the left would be useful. We are not in the ball-park as you say, we cannot even get ideas that differ taken seriously, a movement will shift balance and a left electoral party would push the dems to move if it starts winning at local level. The two must be interlinked as co-optation is easily done if we do not have both.

          "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

          by NY brit expat on Sun Jan 20, 2013 at 11:40:32 AM PST

          [ Parent ]

        •  If we're not in the ball park, we might as well (7+ / 0-)

          actually get out of trying to provide a modified capitalist alternative in the hopes of winning over the liberals.  Eventually the conditions will help people see that these halfway alternatives are no real alternatives and turn to a analysis that at least has a chance of  working.

          •  Winning over the liberals? Now I'm really lost. (5+ / 0-)

            What liberals?  You can't mean the "pragmatists" here at dailykos, where reform takes a back seat to partisanship.      You can't mean the unions.   In a NY minute, they won't even exist.   The progressive caucus in Washington is a bad SNL skit.    

            Who are the liberals?   Where is the leadership?   WTF are they waiting for?   I have been here for what feels like decades.   I have longed for a front page plan that goes beyond more and better Democrats for almost a decade.      The three better the strategy elects each cycle is an uphill climb.   Meanwhile, the extremists on the right are methodically targeting and eliminating their problems and running the whole show.

            If there is a left, I honestly don't who is it and what is it doing.    And please, don't say it's me.    I have no power.  Not one bit.  And I'll be dipped and fried if I'll let Obama or anybody else sell me "the little engine that could".  

            Thanks for the conversation.

            What we need is a Democrat in the White House.

            by dkmich on Sun Jan 20, 2013 at 12:16:22 PM PST

            [ Parent ]

            •  Bravo!...Couldn't have said it better myself.... (5+ / 0-)

              I don't think you need to win over liberals as much as you need to get them together and give them a direction. Egypt and the other countries in Arab Spring were little engines that could after one event pushed them into the streets where they could see how many they were and how similar their dissatisfaction.

              We are the left. It is not that we are not out there, but as of yet, we have not been organized by any crystalline event to push back. Dissatisfaction is high, and a charismatic figure could capitalize on that and use it to create sweeping change. Obama proves that. Too bad the left doesn't have a real charismatic figure that believes in the left. I am very afraid the right will find one before we do.

              For a moment, I thought Occupy might supply the needed touchstone event, but the media machine got a hold of that and tore it asunder quickly enough. And, as much as I love rule by anarchist methods, those methods proved too slow to push the system before the system drown them out. I hope that is a lesson learned for the next time we are able to get some of us to coalesce behind one cause.

              •  Thanks. Sometimes I talk faster than I type. (3+ / 0-)
                Recommended by:
                TPau, NY brit expat, JayRaye

                Occupy was a valiant effort; but I'm not camping in the streets or making myself vulnerable to those crazy people with all the power and all the guns.    I don't see tea partiers getting beaten and maced; and if they can figure it out, why can't we?

                I think we have to deliberately hurt the Democratic Party.   Until we can, we have no power.   And if we have no power, we also have no place else to go.    That makes us as bad as Obama.  All huff and puff and no go.

                What we need is a Democrat in the White House.

                by dkmich on Sun Jan 20, 2013 at 12:58:54 PM PST

                [ Parent ]

                •  Tea parties are saying what the powerful... (3+ / 0-)
                  Recommended by:
                  NY brit expat, JayRaye, dkmich

                  want said. They don't need to be maced. If you want to get liberty, you will have to take some risks. Arabs were shot at and died for their freedom. We would be lucky to get off just camping outside and being maced.

                  I agree that the Dem Party is nothing more than Conservative Light. The left needs to walk away en mass to make a statement. That is going to be hard to accomplish without a charismatic leader in another party and with the two parties in control of the media, not allowing third party candidates to play, or even their own candidates if they do not adhere to the message the powerful want sent.

                  Possible options for a Third Party uprising:

                  Green Party: Probably the most powerful and organized at this time. Has run some good candidates in recent elections.

                  Peace and Freedom Party: They also ran some good candidates in the past.

                  Working Families Party: Up and coming, but still fairly new.

                  and there has been a long running Socialist Party in the US that has struggled along for decades.

                •  OWS did both hurt (and in my mind help) the DNC (4+ / 0-)
                  Recommended by:
                  NY brit expat, TPau, JayRaye, dkmich

                  by waking them up somewhat like the T Party did. the difference?  T Party had the big money from the CEO's and racists they fronted for (whether that was their intent or not). The big money was out to get OWS. Still, it was important to revitalizing people.  We do have some power.  We saw that when people went out to vote because Repubs wanted to take the vote away. Unfortunately, we are still only willing to use it in the most modest Dem reforms. But in a very small way we beat very big money for a moment. It's not enough. Not even really beyond what used to be the mainstream. But it did show something, as did OWS.  the T Party is beginning to choke and die on its own hatred.  thank god.  will we be in time to change things to live to fight another day.  I don't know, but if we don't fight back, we die for sure.

                •  If we did not have power, the powerful would... (4+ / 0-)
                  Recommended by:
                  NY brit expat, Geminijen, JayRaye, dkmich

                  have no reason to blatantly disregard the rule of law and the Constitution to make mass arrests of OWS or protestors at RNC/DNC. There would be no reason to have huge canisters of pepper spray.

                  Those things exist because the powerful fear the "powerless."

              •  May I ask... (2+ / 0-)
                Recommended by:
                JayRaye, NY brit expat
                And, as much as I love rule by anarchist methods, those methods proved too slow to push the system before the system drown them out. I hope that is a lesson learned for the next time we are able to get some of us to coalesce behind one cause.
                If OWS proved too slow, what has been faster lately? What has been better over the past several decades? What would you recommend to replace it?

                Hierarchical, bureaucratic unions? Committees of elites with cadres of subservient supporters? Just trying to get a sense of what people mean by these comments.

                OWS was a rather spontaneous uprising, and what many point to as a weakness was its strength, for many of those attending. The horizontalism was unfamiliar, of course, to people in a capitalistic, hierarchical society, and there was certainly a learning curve which some simply couldn't tolerate, but as a social experiment it was exhilarating, educational, and inspired many who would not otherwise have found inspiration any other way.

                Just because it couldn't undo centuries of corruption in a few months doesn't indicate it was too slow, or that non-hierarchical, horizontal organizing methods don't work. OWS needs to keep up the effort to making consensus a smoother process, which certainly can be improved with modifications and adaptations.

                But to conclude we must return to the inequality and slavery of hierarchy is not the answer, in my view.

                "In times of universal deceit, telling the truth will be a revolutionary act." -George Orwell

                by ZhenRen on Sun Jan 20, 2013 at 03:48:31 PM PST

                [ Parent ]

    •  While this analysis lays out a good Keyneisan (7+ / 0-)

      reformist fight against the corporate cows taking over the world, it is still assuming a capitalist mode of production which is based on exchange for money.  while it may seem utopian to talk about a system where the market is not the mode of distribution of goods in a society, it is helpful to give people a framework for a real anti-capitalist system.  Forty years ago, even though there was plenty of capitalist propaganda and the left was still small and not in a real prerevolutionaty state (in the US at least), many citizens could discuss options outside of the market (yes, marx among others), had a sense of community rather than focusing on the gains of a few, and did not necessarily see development as a product only of capitalist competition or markets.  40 years of brainwashing by the conservatives has made it almost impossible to talk to young people about alternatives as they have been raised so thoroughly in this free trade, exchange oriented superstructure. True, a great deal of the problem is that we no longer are a worker oriented/produtive society as corporations race to cheap labor in third world countries and these are objective conditions, but the  presentation of only market solutions does not help people break out of this mold to look for long term solutions.

      •  I concur with this. (8+ / 0-)

        When I discuss labor movements with my students (I teach lit so its in a roundabout way) they don't seem to grok connections between the past and present. For example, the Triangle Shirtwaist Fire happened sometime around the Civil War, and anyway, such events are safely entombed in the sepia-toned past.

        Unions, pensions... they very idea of a vibrant middle class (bourgeois as it may be)- all are in the process of being consigned to the dustbin of history. These kids --many of whom are quite caring and smart-- don't seem to have a sense of the cyclical trends that repeat throughout history.

      •  It is an examination of the current situation (7+ / 0-)

        as such, an analysis of the situation requires understanding what is going on. I agree that we should be talking about what we would propose instead as socialists instead of an analysis of what is going on.

        I have been presenting basic transitional programmes in everything that I have written; while the argument appears Keynesian, it actually is not. Marx criticised Say's law and argued that realisation crises were not only possible but probable in his discussion of capitalist crisis in Volume I of Capital; we know that Keynesian policy proposals only ameliorate capitalist crisis but cannot and will not eliminate them; Keynes knew it was not possible.

        However, what comes after this system is determined by those that change it. We can make proposals and I think that is appropriate, but I am really tired of top-down policies by so-called leaders. What needs to be decided is what the majority wants in the context of an anti-capitalist non-market, ecosocialist perspective.

        Irrespective of the destruction of industry and manufacturing in the advanced capitalist world, I still think that the vast majority are working class, they may not be doing manual labour, but they are working class. We also need to discuss the lack of identification with that label and the fantasy that class does not exist or that everyone is "middle class" whatever that means.  Raising discussions of race, class and gender and ecosocialism is essential.

        This piece is merely a criticism of what the apologists of the system are saying (economists and politicians) and how they are deliberately destroying people's lives. I really think that we need to understand what is going on, get people to understand what is going on and only make general prescriptions as I think that it is the job of people in a real democracy to choose the particulars of the answer for everyone.  

        "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

        by NY brit expat on Sun Jan 20, 2013 at 12:09:35 PM PST

        [ Parent ]

      •  Gem--very true, the last time we faced an econ... (5+ / 0-)

        crisis this big or this long lasting, populists discussed abandonment of the market, return to the gov coining money (end of federal reserve banking), printed local currency, socialism, worker-ownership and more. FDR was in some ways forced into concessions with the middle class to avoid the radical direction the US was heading at the time. Had he not given those concessions, the far left and the right would have had a showdown. Our world might have been very different indeed by now.

        •  The last time there was a crisis this bad (4+ / 0-)

          there was a strong vibrant left ... that is what is really absent now. Years of a capital-labour accord, wages increasing with productivity, destruction of industry and manufacturing and a weak trade union movement and the consolidation of neoliberalism and no political representation of the majority means that we actually have no weight to throw.

          FDR was not forced into concessions with the middle class as that was a small group at the time; he was forced to make concessions to the working class which was politically organised both as a class and in trade unions.

          If he did not give those concesssions, yes, we would be living in a far different world than the one we are living in ... there was a strong left wing movement, people were radicalised. He gave those concessions to save the system not out of the goodness of his heart.

          "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

          by NY brit expat on Sun Jan 20, 2013 at 12:45:17 PM PST

          [ Parent ]

          •  The working class at that time consisted of... (3+ / 0-)

            small farmers, immigrants, people of color. Not people with a lot of power. People living very hand to mouth.  I don't think there was a strong union movement already in place in the 20's--I think that was an outgrowth of the events of the 30's and 40's (FDR's presidency.) Even media was not nearly what it is now.

            What was different was an independent mindset. Now we are almost all employees with no community backing to speak of.

            We also have what can only be called brainwashing starting with an educational system that says, "Obey!" at very early age and continuing with TV's repetitive messages over and over until they are assimilated. "You need to buy (fill in the blank) to be beautiful and whole." "Be afraid. Only the powerful can protect you." "You have no power."  

            That is all nonsense of course. We do have power. Frightening amounts of it. What we lack is the courage to use it.

            •  The AFL was founded in the 19th century (3+ / 0-)
              Recommended by:
              Geminijen, JayRaye, annieli

              representing crafts unions (http://www.spartacus.schoolnet.co.uk/...) and in 1935, the Congress of industrial organization (CIO) was founded. Then add in the IWW founded in 1905 (and its peak was in the 1920s) see http://en.wikipedia.org/....  Then we can also add in the Socialist Party and then the Communist Party. Do not underestimate the power of the unions at the time and the left (those that ran in elections actually did have support).

              There was no effective middle class, that comes after the post-war period (WWII). Workers at the time include miners, iron production, steel production, agricultural producers, shipbuilders, longshoremen and dock-workers, metal workers of various types, textile workers. These existed before the great depression and were strenghtened after. Heck, there were even autoworkers ... fordism was introduced as a term in 1934 by Gramsci (http://en.wikipedia.org/...) ... mass production existed before WWII. Sorry, you need to check your dates.

              "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

              by NY brit expat on Sun Jan 20, 2013 at 02:15:42 PM PST

              [ Parent ]

              •  But, expat, you left out one important point. (2+ / 0-)
                Recommended by:
                NY brit expat, annieli

                Yes, the AFL was mostly made up of craft unions, but within the AFL was also the might United Mine Workers, which was an industrial union, a very large industrial union. At times the UMW had as many as 500,000 members (I'm talking about pre-1920) and made up more than 1/3 of the total union members of the AFL  about 1.5 mil, altho numbers did fluctuate widely from 1890-1920.

                It is no accident that the mighty UMW built the CIO in the 30s, and lead the way organizing steel and auto. And even during the 20s the UMW was knocked down but was never knocked out.

                To say there was no real working class prior to the 30s simply isn't true. The labor struggles from 1900-1912 forced the Senate Commission on Industrial Relations which led to many of the reforms of Progressive Era.

                The Trade Unionist who got their training during those terrible struggles built the CIO.

                WE NEVER FORGET Our Labor Martyrs: a project to honor the men, women and children who lost their lives in Freedom's Cause. For Jan: USW Local Mourns Fallen Brother

                by JayRaye on Sun Jan 20, 2013 at 04:21:28 PM PST

                [ Parent ]

                •  I did not forget, it was in the link (1+ / 0-)
                  Recommended by:
                  JayRaye

                  on the AFL which described the formation of the UMW and the CIO which was founded by the leader of the UMW; both were organising before the great depression, the model T came before the great depression. Shall we forget the uprising of the 20,000 and the formation of the trade union league, ACTWU, ILGWU ... unions and the left were incredibly active. longshoremen, etc ... the IWW and the Lawrence Strike, our history is during this period. There were unions in the 19th century, the knights of labour and the AFL both existed then. There was a developed working class, not small workers. I cannot agree with you more. I am thinking that maybe another history lesson is needed and so glad that you are putting up the piece next sunday ... I actually blinked! If mass production existed (and it did) there was a working class just like there was in the UK at the time.

                  "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

                  by NY brit expat on Sun Jan 20, 2013 at 04:35:08 PM PST

                  [ Parent ]

                  •  I am heart and soul with the great (1+ / 0-)
                    Recommended by:
                    NY brit expat

                    United Mine Workers of America. I love them above all other unions.

                    Thanks for giving them this extra plug.

                    We owe them so much.

                    WE NEVER FORGET Our Labor Martyrs: a project to honor the men, women and children who lost their lives in Freedom's Cause. For Jan: USW Local Mourns Fallen Brother

                    by JayRaye on Sun Jan 20, 2013 at 04:46:24 PM PST

                    [ Parent ]

                    •  I love them also ... I have to (1+ / 0-)
                      Recommended by:
                      JayRaye

                      admit that Matewan is one of my favourite movies. It amazes me that I have soft-spots for some unions over others; without the UMW I do not know where we would be today!

                      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

                      by NY brit expat on Sun Jan 20, 2013 at 04:54:37 PM PST

                      [ Parent ]

            •  Actually, the working class that organized in (2+ / 0-)
              Recommended by:
              NY brit expat, JayRaye

              response to the depression was the industrial semi-skilled workers - that was the CIO. Often they were in fact one generation from the farm, immigrants and some people of color, but predominantly white and male and factory workers.

              •  The CIO organizing drive was led by the veterans (1+ / 0-)
                Recommended by:
                NY brit expat

                of the labor struggles of 1900-1920, particularly from the UMW, which also supplied most of the money for organizing auto and steel.

                WE NEVER FORGET Our Labor Martyrs: a project to honor the men, women and children who lost their lives in Freedom's Cause. For Jan: USW Local Mourns Fallen Brother

                by JayRaye on Sun Jan 20, 2013 at 04:24:21 PM PST

                [ Parent ]

                •  and the CIO was the more radical union (1+ / 0-)
                  Recommended by:
                  JayRaye

                  group, it had communist led unions in it. The organisation of black workers in the brotherhood of sleeping car porters is in 1925 and it caused one hell of a fight in the AFL (http://en.wikipedia.org/...). There was incredibly strong union activity in the teens, 20s and 30s. The welfare state in the UK was started in response to general strikes and it was promised to be delivered in full after WWII ended. Without the strikes, without the agitation there would have been no social welfare state in the UK or in the US.

                  I will talk to Le Gauchiste who is a specialist on Lochner vs New York which was in response to bakers unions demanding better wages and working conditions. The decision was not overturned until the Roosevelt period and ask him to write on it.

                  "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

                  by NY brit expat on Sun Jan 20, 2013 at 04:47:25 PM PST

                  [ Parent ]

                  •  Yes that would be great. (1+ / 0-)
                    Recommended by:
                    NY brit expat

                    And at some point down the road, I would like to write about William Z Foster. I have a few of his books: his autobio, (also a bio), the one on the steel strike of 1919, and the his HX of the CP in the USA, which is about the CP's role in the struggles of the day, a great read.

                    Most of my labor hx library is 1880-1920. But I do have one box of books that covers 1920-1940. And buying more all the time.

                    WE NEVER FORGET Our Labor Martyrs: a project to honor the men, women and children who lost their lives in Freedom's Cause. For Jan: USW Local Mourns Fallen Brother

                    by JayRaye on Sun Jan 20, 2013 at 05:00:48 PM PST

                    [ Parent ]

                    •  WZ Foster!! oh my! (1+ / 0-)
                      Recommended by:
                      JayRaye

                      close to crying now! I have a feeling that you and I have similar shelving problems in that we do not have too many books (as there are never too many books) but we have run out of shelf space! Would love to see your library, drool! Yes, I am a real weirdo, when I go to someone's house, I actually check their libraries to see what they are into ... I was floored when visiting a relative and I couldn't find a book in the house, I had no idea what to say beyond what a clean and large house you have here! :D

                      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

                      by NY brit expat on Sun Jan 20, 2013 at 05:35:09 PM PST

                      [ Parent ]

          •  FDR was forced into concessions (2+ / 0-)
            Recommended by:
            NY brit expat, JayRaye

            by politicians like Huey Long, who caused him to adopt more populist positions to ensure his political survival. From Wikipedia:

            Long created the Share Our Wealth program in 1934 with the motto "Every Man a King", proposing new wealth redistribution measures in the form of a net asset tax on corporations and individuals to curb the poverty and homelessness endemic nationwide during the Great Depression. To stimulate the economy, Long advocated federal spending on public works, schools and colleges, and old age pensions. He was an ardent critic of the Federal Reserve System's policies.
            and
            In 1929, Long called a special session of both houses of the legislature to enact a new five-cent per barrel "occupational license tax" on production of refined oil, to help fund his social programs. The bill met with fierce opposition from the state's oil interests. Opponents in the legislature, led by freshman Cecil Morgan of Shreveport, moved to impeach Long on charges ranging from blasphemy to corruption, bribery, and misuse of state funds. Long tried to cut the session short, but after an infamous brawl that spilled across the State Legislature on what was known as "Bloody Monday", the Legislature voted to remain in session and proceed with the impeachment.
            Things really haven't changed in terms of what the establishment wants versus what we need. The difference is that there is no political figure in either state or national politics that threatens the status quo. On the other hand, Long was assassinated in 1935, and his reputation suffered both at the time and posthumously in literary treatments by respected liberal authors from Sinclair Lewis to Robert Penn Warren, who went full Godwin on him. Maybe politicians since are a little less likely to rock the boat.

            "We are monkeys with money and guns". Tom Waits

            by northsylvania on Sun Jan 20, 2013 at 02:59:23 PM PST

            [ Parent ]

          •  This is so true, expat! nt (1+ / 0-)
            Recommended by:
            NY brit expat

            WE NEVER FORGET Our Labor Martyrs: a project to honor the men, women and children who lost their lives in Freedom's Cause. For Jan: USW Local Mourns Fallen Brother

            by JayRaye on Sun Jan 20, 2013 at 04:07:23 PM PST

            [ Parent ]

            •  Great diary! (1+ / 0-)
              Recommended by:
              NY brit expat

              WE NEVER FORGET Our Labor Martyrs: a project to honor the men, women and children who lost their lives in Freedom's Cause. For Jan: USW Local Mourns Fallen Brother

              by JayRaye on Sun Jan 20, 2013 at 04:39:46 PM PST

              [ Parent ]

              •  thank you! so glad to see you! (1+ / 0-)
                Recommended by:
                JayRaye

                looking forward to your piece next week; I realised I forgot to post the schedule and then it was too late. It seems that we need to be reminded of our history again! :) and I also love your stuff! :)

                "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

                by NY brit expat on Sun Jan 20, 2013 at 05:02:53 PM PST

                [ Parent ]

            •  I know, I blinked when I saw that (1+ / 0-)
              Recommended by:
              JayRaye

              if not for the strength of the unions, if not for the threat of the socialists, communists and anarchists there would never have been a welfare state. Our weakness today enables them to destroy what people forced them to concede.

              "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

              by NY brit expat on Sun Jan 20, 2013 at 04:48:38 PM PST

              [ Parent ]

        •  I agree - though I don't know if it would be a (3+ / 0-)
          Recommended by:
          NY brit expat, TPau, JayRaye

          better or worse world depending on if we won or lost -- and that is always the rub.  The stakes are very high.

  •  Brilliant mocking (albeit dry!) of the inability (9+ / 0-)

    of the 1% leisure class to understand basic economics.

    These CEOs and other parasites are creations of the MBA phenom. Its often said (but bears repeating) that even the otherwise odious Henry Ford understood that his employees needed to be able to afford the produces they were making. While this is not true for every industry, the larger point remains- a rising tide lifts all boats.

    This makes the job creator myth especially pernicious --in fact, Orwellian-- in its deceptive turn of phrase.

    •  I have to be honest, I don't know (8+ / 0-)

      which irritates me more, the "job creator" myth or the "wealth creator" lie ... the inversion of reality simply infuriates me; there is a similarity to Walras's treatment of land, labour and capital as land capital, labour capital and capital proper, where everything becomes capital as opposed to recognising that without labour there is no deliberate production, creation of surplus value (as in Smith, Ricardo and Marx) and creation of wealth. For an economist trained in classical theory, it is simply absurd. But most people do not remember that stuff and they have no idea about reality and the inter-relation between production, consumption and distribution in the capitalist economic system. I couldn't believe my ears when this dribbled out of David Cameron's mouth ... not only does he lie, he pushes dribble as well as hate.

      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

      by NY brit expat on Sun Jan 20, 2013 at 11:38:03 AM PST

      [ Parent ]

      •  Good point, but even Smith, Ricardo and Marx in (4+ / 0-)

        most cases were writing from within the confines of the capitalist system -- when they talk about production, they still talk about it in a market system dmoinated by exchange.

        •  in all cases (3+ / 0-)

          except where Smith, Ricardo and Marx were discussing the "early and rude state" or the "state of Nature" or simple comodity production, they were discussing the capitalist economic system. In the cases of the former, while they recognised the problems in the system (low incomes and demand in Smith; the impact of the introduction of machinery on wages and employment in Ricardo), they still maintained that the system in spite of crises would provide for all until it finally crashed. Marx in Capitaldescribed the laws of motion that led to constant economic crises and the long-run tendency towards a falling rate of profit (again, only a tendency). So while in the advanced capitalist world the rate of profits in manufacturing and industry is low, the cheaper raw materials, the low wages and the high rate of exploitation enables higher profitability in those sectors. That is why they moved to the capitalist periphery and the emergent economies.

          The destruction of incomes of the majority in the advanced capitalist world in a period of low growth is part of an attempt to keep up profitability while waiting for China, India and Brazil to take off. Meanwhile, wages (and the social welfare states) there are still low or only developing and in the advanced capitalist world they are destroying everything that people fought so long for and the majority while not necessarily buying into the argument are resigned and see no way out; the lie that bourgeois democracy provides representation for all in system are being rapidly disproved.

          "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

          by NY brit expat on Sun Jan 20, 2013 at 01:01:20 PM PST

          [ Parent ]

    •  These newer CEO's & MBAs are products (1+ / 0-)
      Recommended by:
      JayRaye

      of shareholder capitalism run amok. (actually, I'd argue it is the only path that shareholder capitalism can run) Now a return to managerial capitalism seems unlikely & backward so maybe a fling at consumer capitalism is in the offing. Social networkers tend to believe so. But how so when all these austerity policies & privatization schemes are destroying demand?
      Of course,the largest and most important questions regarding whether a co-operative sustainable capitalism model is even possible is barely examined. But I wonder what Kim Kardashian is gonna name her baby?

      "George RR Martin is not your bitch" ~~ Neil Gaiman

      by tardis10 on Sun Jan 20, 2013 at 07:57:07 PM PST

      [ Parent ]

  •  please join (8+ / 0-)

    me over at this diary which really hits the nail on the head.  i'm keeping both windows open.

    this is the first set of numbers i have seen which nails down the idea that scarcity is a construction of the wealthy and powerful.

    http://www.dailykos.com/...

    Donate to Occupy Wall Street here: http://nycga.cc/donate/

    by BlueDragon on Sun Jan 20, 2013 at 11:53:51 AM PST

  •  As always.... (2+ / 0-)
    Recommended by:
    JayRaye, NY brit expat

    capitalism sucks :)

    •  AMEN! (1+ / 0-)
      Recommended by:
      NY brit expat
      God spare me the Heart to fight them..
      I'll fight the Pirates to the finish!

      Mother Jones
      Pratt W Va
      Military Bastile
      3-3-1913

      WE NEVER FORGET Our Labor Martyrs: a project to honor the men, women and children who lost their lives in Freedom's Cause. For Jan: USW Local Mourns Fallen Brother

      by JayRaye on Sun Jan 20, 2013 at 04:38:37 PM PST

      [ Parent ]

    •  and has for a while ... (1+ / 0-)
      Recommended by:
      JayRaye

      and will continue to suck until we get rid of this system! :)

      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

      by NY brit expat on Sun Jan 20, 2013 at 04:49:22 PM PST

      [ Parent ]

      •  At some point it will collapse on its own... (1+ / 0-)
        Recommended by:
        JayRaye

        or a new left alternative will finally emerge.   The world needs a modern left with fresh views that has rejected the mistakes of the past.   That's what is desperately needed.

        •  it won't collapse on its own, I think we will (0+ / 0-)

          have to get rid of it. They will hold on and hold on, crises are normal unfortunately and the rate of profits is not depressed in mfg and industry outside of the advanced capitalist world. So, it will require a lot of work and organising from those opposed to the system.

          "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

          by NY brit expat on Mon Jan 21, 2013 at 06:55:31 AM PST

          [ Parent ]

          •  Of course.... (0+ / 0-)

            it will never be change unless there is a viable alternative left.  I think the left needs to move on from the past.  The traditional ML views have failed.  

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