Sunday, December 14, 2014

The Laws of Economics

People on the Right are fond of accusing Leftists of not understanding the Laws of Economics. Specifically, this blog has posted many articles schooling my Trotskyist friends in the dismal science. Though they apparently never learn.

Back in the day, we comrades responded by noting that economics is not like physics. Instead, it is a human activity, and therefore amenable to human intervention. There are no "laws" of economics, but merely conventions that (not coincidentally) serve the interests of the ruling class. Accordingly, the so-called "laws" were constructs of "bourgeois" economists, who unfailingly acted in connivance with the rulers. Their advice could be safely ignored.

So as I aspire to be an amateur economist, it behooves me to learn more about the basics of the discipline. Accordingly, I have spent the past couple of months working through Robert Gordon's text, Macroeconomics. I'm about half way through. I'm using the 11th edition that I picked up used for about ten bucks, published in 2009, and obviously written before that. Indeed, the biggest problem facing macro in those days was understanding the great moderation, i.e., the attenuation of the business cycle in the form of shallower recessions and weaker booms. Would that we had such problems today.

So I am now in a better position to judge the "laws" of economics, and surprisingly, I think my Trotskyist friends are at least partially right.

Macroeconomics (as best I can judge) is based on three sets of premises. The first are accounting identities, such as the requirement that a balance sheet has to balance. These are as true as the rules of arithmetic, essentially unchanged since Sumerian times. The key equation of macro is that Y = E, where Y stands for the economy's income, and E for its expenses. This has to be true simply by virtue of accounting.

That means that raising the income of fast food workers to $15/hour, for example, is going to raise expenses or lower income for somebody else in the economy. Or put more colorfully, there's no such thing as a free lunch--not even at a fast food place. This is a law of economics that not even a Trotskyist can deny.

The second set of premises are assumptions that are based on empirical observations. For example, it is assumed that raising the interest rate will diminish the gross domestic product, all else equal. This is held to be true because it makes plausible sense, and because it looks to have been true in the past. But there is nothing here that constitutes a "law." It's more like a reasonable assumption.

Indeed, a couple of years ago some talking heads on television were arguing that the Fed should raise interest rates because it would increase GDP. Current rates, they argued, were too low to clear the market. I don't know if this statement was true, but if true then it renders much of Mr. Gordon's book irrelevant. The equations will all get turned upside down.

It seems fairly clear that this second set of assumptions no longer holds true as much as it did prior to 2007. That's why macroeconomics is often thought to be in crisis. The "laws" they thought were true turn out not to be as true.

The third set of premises assumes that we can collect reliable data about the economy. Historically, for example, extensive data on gross domestic product (GDP) were tabulated. The implicit assumption was that GDP corresponded reasonably well with social utility, i.e, benefit to human beings. That was surely true for much of the Twentieth Century.

But it is arguably less true today. Google, for example, creates enormous social utility while contributing negligibly to GDP. Craigslist is an even more extreme example. This blog (like most other blogs) contributes (slightly) to social utility, but almost nothing at all to GDP. Therefor the relevance of GDP has been called into question, and accordingly the "laws" that Mr. Gordon elucidates are less useful. Similarly, more ambiguity has crept into measurements of the labor force, the money supply, and even interest rates. Hard data are harder to come by.

So the Trotskyists have a point: once one advances beyond accounting identities, the "laws" of economics lose their legality and simply become descriptions--only more or less accurate depending on circumstance. That's why nobody can agree about when the Fed should raise interest rates, if at all, or even on whether or not that decision is important.

Still, my former comrades are way off the rails. First is the conspiracy theory underlying their dismissal of mainstream economics. Economists, they claim, have all been bought out, or are too stupid to understand the brown-nosing role they play in the bourgeois scheme of things. I don't believe that, and neither does nearly anybody else.

More seriously, Trotskyists claim that because the economy is a human invention, it can be treated like any other human invention. Good engineers have designed excellent airplanes that can fly half way around the world. Similarly, a good, Marxist economist could design an economy that would maximize benefits to human beings, i.e., maximize social utility. The only thing stopping us is that malevolent ruling class whose greediness keeps much of the world in poverty.

The first objection to this theory is that capitalism already maximizes social utility. The Marxist slogan human needs before private profits is completely empty. Meeting human need, e.g., maxxing out social utility, requires private profits.

But more, human needs is such an amorphous, undefined term. There are seven billion humans in the world. Which one of those gets to define human needs? Marx famously wrote "from each according to his ability; to each according to his needs." But isn't that exactly what capitalism does? My wife and I want to buy a retirement home in Las Vegas. That's a human need. Who are Jack Barnes or Jeff Mackler to say that I shouldn't be allowed to do that?

Where in the grand central plan have they made way for my vacation home--the one I want and can afford? They haven't, of course. The most I'd ever get from socialism is a vacation cot in some barracks somewhere on a South Carolina beach.

Socialism only works if you assume that somebody else is going to pay for all the goodies. But that violates accounting identities, because eventually somebody else is going to run out of money. Then the goodies need to be paid for by people who work, i.e., by people who do things to meet other people's needs. That depends on my abilities and your needs, and vice versa. With seven billion people in the world, there's no way all those interactions can be centrally planned.

All you'd get from socialism is slave labor working for slave wages.

Further Reading:

Sunday, December 7, 2014

Book Review: North Star

Peter Camejo's (1939 - 2008) memoir, North Star, was published after his death. I knew Peter (I will dispense with the formal Mr. Camejo) when we were both comrades in the Socialist Workers Party (SWP). He was the SWP's candidate for president in 1976. I was his chauffeur during his campaign trips to Chicago and Milwaukee. I certainly recall that, but I was on my way out of the Party by that time. I must have driven Peter around on several earlier occasions in the early 70s.

I remember him well. I wrote to him near the end of his life confessing my Republican sympathies. He returned with a very nice letter, admitting that he didn't remember me, stating that he was dying from cancer, and jokingly hoping that none of the candidates I supported would win any election. It is that fundamental civility and good-nature that I admired in him then and now.

Those traits permeate his memoir. He never misses a chance to say nice things about people, whatever their politics. He speaks kindly of Teddy Kennedy, despite the fact that he was a Democrat. He's very appreciative of help he got from the Bill Simon, a Republican. He has nice words for Jerry Rubin, yet another political opponent. This innate charity served him well, and made him much more influential than other Trotskyists, who insisted on using insulting terms such as class enemies or opponents.

As a comrade I was completely unaware of the jealousy and fear that he inspired in the SWP leadership. Jack Barnes, Barry Sheppard, Gus Horowitz, and others did what they could to sabotage his presidential campaign. They arranged to kick him out of the Party shortly afterwards. And no wonder--Peter was an enormously talented politico. He vastly outshone the mediocrities who fancied themselves as leaders. Left unhindered, Peter would have become the leader of the organization. So they had to get rid of him.

Peter fancied himself as a principled political leader--unbought and unbowed. I think that's probably a fair statement, but it's surprising that he never explicitly states what those principles were. So putting it in my own words, they reduce to

  1. Fighting for socialism, which he defined as democratic control of the economy;
  2. Uncompromising hatred of the Democratic Party, which he thought of as an unprincipled coalition supporting corporate power and imperialist war.
Peter came by his socialism early. While born in New York City, he was the child of an elite, Venezuelan family, growing up in that country. His father founded the Venezuelan tourist industry, building several beach resorts. On vacations Peter would take his current girlfriend and they'd go yachting off the coast of Venezuela. He had enormous respect and affection for his dad, but at the same time wondered about all the construction workers and hotel maids who went home to shantytowns at the end of the day. It was that experience that converted him to socialism.

Peter's adult life may be divided into three parts. In his early years, while still a student at MIT, he joined the SWP. His attraction to Trotskyism is no surprise, given that his principles overlapped theirs. He quickly became a leader of the affiliated Young Socialist Alliance (YSA), and became a leader of the antiwar movement in Berkeley, California. This was before I joined the movement, but it is clear that he was only loosely under the supervision of the New York office. He did things that my comrades and I would have regarded as ultraleft.

He was very successful at building the antiwar movement, and I'll let him tell that tale. I relate here some of my responses to his account.

First, he has fond memories about how he out-smarted then-Governor Ronald Reagan. And no doubt in some narrow tactical sense he occasionally did. But in the larger sense he didn't. Quite the contrary--Reagan leveraged his way to the presidency using the threat of unrest promised by the antiwar movement. It was Reagan who rolled Camejo, not the other way round. I don't think Peter ever realized that.

Second, even as he wrote his memoir he regarded the Vietnam war as a conflict between white hats and black hats. The white hats were the Vietnamese people heroically resisting the black hats in the form of U.S. imperialism. He never acknowledges any ambiguity. Peter doesn't mention the aftermath of the war--the killing fields or the boat people. The SWP supported not only the Vietcong, but also the Khmer Rouge during the entire war. Those groups were not democrats. If democratic control of the economy was Peter's goal, he was backing the wrong hats.

Finally, Peter's account of the FBI's efforts to infiltrate, disrupt and discredit the antiwar movement is painful to read. It is so easy for law enforcement to think they're above the law, and the temptation to use extra-constitutional means seems compelling. J. Edgar Hoover was not a friend of American democracy.

The second third of Peter's life began after he was expelled from the Party. He needed a job, and after a false start or two, a friend suggested that he become a salesman for Merrill Lynch. He suffered some pangs of conscience, but it turned out to be a perfect fit for him. He became very good at the job, and soon founded his own investment firm, Progressive Assets Management (PAM). The goal was to seek investments in companies that furthered progressive causes. The larger label was socially responsible investing (SRI).

Peter championed SRI, even writing a book on the topic. He claims it's a better investment than the stock market at large--a statement I find impossible to believe. Nevertheless, he had some successes. He was astonished to find that large environmental organizations had endowments invested in ExxonMobil and the like. Peter was able to convert them to SRI.

While he offers no details, there is no doubt that his investment efforts earned him a good living. During this time he married Morella, a distant relative from Venezuela. They remained married to the end of his life. He adopted her children and grandchildren as his own. None of them wanted for money.

The final episode in Peter's life was his affiliation with the Green Party. He fought two battles within that Party. First and most important, to prevent the organization from throwing support to Democratic candidates. And second, to expand the mission of the Party to include socialism generally, rather than just narrow environmental issues. He worked closely with two Trotskyist offshoots of the SWP, the International Socialist Organization and Solidarity.

He ran for governor of California three times: in 2002 against Gray Davis and Bill Simon. He got 5.3% of the vote. Peter was very proud of that campaign. When Davis was recalled in 2003 he ran again, coming in fourth in a field of 135. He felt partially betrayed by Arianna Huffington, whom he initially regarded as an ally. His last try was in 2006 against Arnold Schwarzenegger and Phil Angelides, the least successful attempt.

I would have thought that his 2004 Green Party run for vice-president (with Ralph Nader) was the highlight of his political life. But he didn't see it that way. He was bitterly disappointed by the "capitulators," i.e., people who refused to support him because they felt compelled to vote for the "lesser-evil" Democratic Party. He is especially upset with Michael Moore and Howard Zinn, but his book contains a long list of famous progressive names. He wonders how you can oppose the war (now in Iraq, and again completely clueless), and then support warmongers among the Democrats. He even calls John Kerry a "murderer" because of what he did in Vietnam.

Peter considered the 2004 race to be a failure.

Peter had intelligence, charm, charisma, and courage. He really was unbought and unbowed. I agree with him on many things. The Democratic Party really is an unprincipled coalition of special interests. We do need to legalize the status of immigrants already in the US. Some reform of our law enforcement agencies looks overdue.

But on the bigger issues he's just plain wrong. Socialism--especially the utopian variant he championed--is both impossible and undesirable. Look at Peter's native Venezuela for the most recent example of socialism's abysmal failure. 

No doubt there is ambiguity aplenty in our wars in Vietnam and Iraq. In both cases one can legitimately ask if we should've gotten involved in the first place. But given our involvement, it would have been much better for all concerned if we had won those wars. Vietnam would today be a wealthy country if we had. Iraq would surely be better off than it is now. Peter refused to see any ambiguity. Despite his personal charity, he was incapable of seeing any good or humanitarian potential in our war efforts.

Peter's book is charming and sentimental. I appeals to people like me, who have a personal connection with him. I doubt somebody without that connection will find it as interesting. Even I found it a tad too long--I skipped over parts.

It's a good book, but not an important one.

Further Reading:

Sunday, November 30, 2014

The Black Underclass

I comment on two articles that riff off the Ferguson tragedy. One is by Michael Jeffries, a professor of American Studies at Wellesley University, appearing in the Boston Globe. The second is by Nicholas Kristof of the New York Times. Both of them ding white people generally for the killing of Micheal Brown.

Mr. Jeffries argues by exaggeration. He presents anti-blackness, a concept larger than racism in that it requires no intent. Instead, anti-blackness
is not simply about hating or penalizing black people. It is about the debasement of black humanity, utter indifference to black suffering, and the denial of black people’s right to exist.
Even if Mr. Brown's death were a cold-blooded, unjustified shooting, it is a gross overstatement to claim our society expresses utter indifference to black suffering, much less the denial of black people's right to exist. Surely there is some middle ground between disagreeing with the grand jury and Mr. Jeffries' over-the-top assertions. There simply are too many white people who care deeply about what happens to black folks. Indeed, many of those white people are police officers.

But Mr. Jeffries' article convinces me that there is a problem. Our criminal justice system is clearly out of whack. Black men are justified in believing the odds are stacked against them. He blames stereotypes and built-in anti-blackness, which I suppose he believes is a genetic trait common to white people. In his view, these problems will be solved by us white folks facing up to anti-blackness, even though it makes us uncomfortable.

Mr. Kristof suggests a specific mechanism through which anti-blackness (he doesn't use that term) can be confronted--a South Africa-style Truth & Reconciliation Commission, consisting of six whites and six blacks.
A new commission could jump-start an overdue national conversation and also recommend evidence-based solutions to boost educational outcomes, improve family cohesion and connect people to jobs.
Wow! That's a pretty impressive day's work for twelve people, especially given the failure of the New Deal, the Civil Rights movement, and the Great Society programs to accomplish the same thing. But never mind--the hundreds of billions of dollars we've spent on those august programs will pale in comparison to the "evidence-based solutions" now to come forth.

The very unreality of these proposals demonstrates the failure of big government liberalism. That two leading thinkers can't come up with anything more practical is a scandal. To find out what a real Truth & Reconciliation Commission might hear, all you have to do is read the comments to the two articles. Perhaps there's some truth there, but not much hint of reconciliation.

The problem with both articles is they fail to understand the root causes of the issue. That core problem is that black people (or, more specifically, African Americans--the descendants of former slaves) are an underclass. That means they have lower status than any other ethnic group in America.

The problem with status is that it's a zero-sum game. If we raise the status of black people, then somebody else will have the lowest status in America. That's why nobody (except maybe black people) wants to raise their status. Next in line for the honor might be the Scots-Irish of Appalachia--certainly one reason why the Democratic Party has crashed spectacularly in those states.

Low-status people exist in every society. In much of Europe the Roma (Gypsies) fill the role. In India it's Dalits (untouchables) or Muslims. In Syria it was the Alawites, until Hafez al-Assad took power. In much of the Arab world it's the Palestinians.

The problem with low-status people is they have nothing to lose. That alone explains the high criminality in black neighborhoods. It describes why black men resort to physical intimidation to assert dominance--all other status markers are closed to them. Low-status people are the folks who burn down their own neighborhood when things don't go their way (see, e.g., the Palestinians in Gaza).

Status correlates with money, but probably not the way you think. If you have high status, you usually make some money--see Bill Clinton or Bill Gates. On the other hand, give low status people some cash (e.g., former NFL players such as OJ Simpson), and they'll still be low status. In a word relative poverty is a symptom of low status, not a cause. Unlike status, wealth is not a zero-sum game--people can all get richer at the same time.

Some conservative whites mock blacks for their low status behavior. That's rude and crude, but at least it's honest. Liberals, on the other hand, are just hypocritical. People like Mr. Kristof cry crocodile tears over the plight of black people, but offer no useful suggestions about how to change anything. Fixing inequality or improving education--as valuable as those may be in their own right--will not address the status difference.

In fact, liberals don't really want to improve black's status, for otherwise their's will fall. Their efforts are accordingly half-hearted and symbolic. They help in infantilizing and patronizing ways, such as through affirmative action, or race-based welfare programs. Helping black people is cause rather like saving whales.

President Obama's response is revealing. His father was a very high status individual in Kenya, with multiple wives. His mother was a highly educated, modestly successful, white anthropologist. In no case does Mr. Obama share the heritage of African Americans. It is thus not surprising that he keeps his distance from racial, hot-button issues. (His wife and his daughters do share the African American culture, but it's hard to class them as low status. They've escaped the ghetto.)

The only people who can raise the status of black people are black people themselves. They will do so against the strenuous opposition of other groups who do not want to be displaced in the status sweepstakes. Certainly that includes poor whites, who will resist them to the last breath. It also pits them against Latinos, many of whom are making a run for the middle class.

Gregory Clark notes that status differences persist over centuries, and disappear only gradually through intermarriage. Thus it is not easy to be optimistic about race relations in America. Blacks will continue to seethe at their low station in life, and everybody else will continue to fear and distrust them.

The best we can hope for is a reasonably peaceful modus vivendi. That depends on an impartial rule of law, including a reasonably honest criminal justice system. Unfortunately, I don't think either Mr. Jeffries' or Mr. Kristof's articles help with that effort.

Further Reading:




Sunday, November 23, 2014

The North Star

I have added a new webpage to This Blog's Beat: The North Star. The title is inspired by the late Peter Camejo's memoir, who in turn borrowed the term from the newspaper published by abolitionist Frederick Douglass. Mr. Camejo chose the title because he didn't want to use Russian symbols (hammer and sickle) for what he thought was a home-grown, American movement.

The name is a poor choice. Googling North Star yields results from astronomy, banking and real estate. The relevant result only shows up only on page two. Further, there is nothing in the title that indicates socialism, radicalism, or workers' rights. The reference to Douglass is too obscure.  Beyond this, the aesthetics of the page are atrocious--who ever came up with that design?

I don't know when North Star started--the About page is no help. But articles date back to at least the beginning of 2013. I stumbled across the site most recently through Louis Proyects blog. Indeed, let's consider the congratulatory article Mr. Proyect wrote for the page.

Mr. Proyect, a one-time comrade of mine in the Socialist Workers Party (SWP), has long regretted his participation in a vanguard party. He has been arguing against Leninism in a series of articles (one reviewed by me here). Accordingly, he has championed the thought of Bert Cochran (1913-1984, born Alexander Goldfarb). Mr. Cochran turns out to be a limpid writer, and Mr. Proyect quotes him at length.

In 1954 Mr. Cochran wrote,
If I may be permitted to draw my own design of the consensus that I believe has been achieved, I would state as the first proposition that the day of organizing a radical movement in this country as a branch office of the Russian concern—is over; and thank God! And that is true whether it is a branch office that gets its instructions from Stalin or Khrushchev or Lenin or Trotsky. This country is too big, too diversified, too self-sufficient and self-confident, it has too many people, it has too powerful a tradition of its own to tolerate a radicalism whose source of inspiration or whose hidden allegiances reside abroad.
This prescient excerpt inspired not only Mr. Proyect, but also Mr. Camejo. It is undoubtedly true.

Mr. Cochran continues.
The second proposition that I would list on which there has been a significant meeting of many minds is the realization that a new movement cannot be built representing simply one of the existing factions, or revolve around one of the existing factions. The fact is all of these have been trying to build the Left party of the American people for many years, and all of them have failed.
 Again, this is also true. Abe Denken in another post at North Star puts it very dramatically.
The vanguard. 
It’s what American Marxist-Leninists and Trotskyist-Leninists have aspired to become ever since McCarthyism obliterated the Communist Party and its influence over the working class and the union movement. The Socialist Workers Party, the International Socialists, the Revolutionary Communist Party, the Progressive Labor Party, and the Communist Party (Marxist-Leninist) of the 1960-1970s all emerged convinced that they and they alone were America’s Bolsheviks, the nucleus of a future vanguard party, destined to triumph over their (Menshevik) competitors. 
All of them were wrong. 
Not one of them developed a mass following among working people. Not one of them exerted any influence over the direction or policies of the union movement. And it’s not like they didn’t try.
But here we run up against an ineluctable truth of Marxism. Marxists take history very seriously. It needs to be properly understood and interpreted. Vanguardists are people who have studied history and have the correct understanding of the historical relationship of forces. Without that proper understanding, any hope of leading the working class is doomed to failure.

Unfortunately, Marxism is wrong. History is, at least in major part, simply a sequence of random events. Not only is there no correct understanding, it is by its very nature incomprehensible. This, of course, leads Marxists to divergent interpretations of current events: some support Assad, others the Syrian rebels; some support a free Ukraine, others the Russian resistance to Western imperialism. These differences are irreconcilable, and if you take history as seriously as Marxists do, then it becomes impossible for sundry groups to work together.

For history is of whole cloth--disagree on one point, and the entire fabric is rent asunder. Marxism is by definition fissiparous.

How long, for example, will Mr. Proyect be able to support both Counterpunch and North Star? What is the difference between these two magazines? However insignificant distinctions seem now, they will grow into an unbridgeable gap. The anti-sectarians will, themselves, become sectarian.

Mr. Cochran's third point (as quoted by Louis Proyect) is similarly problematic.
The third proposition is that the new movement will have to effect a wedding between radicalism and democracy all over again. It was a fatal error that an estrangement was permitted between the two, and reconciliation will have to be consummated, not as a matter of mutual convenience, but of true love. Socialism can have appeal and attractive power in America again only if it rests on the democratic achievements that have been wrested thus far and seeks to extend them, only if works to realize the American dream one of whose main components is freedom and democracy.
Recall this was written as the world began to learn the true meaning of Stalinism. Rather than deny, apologize for, or explain away Stalin, Mr. Cochran suggested that Americans should reject the Russian model altogether. Democracy was simply too much a part of the American tradition, and Leninism-Stalinism wasn't much worth emulating anyway.

How refreshing this is compared with the SWP's cynical attitude toward "bourgeois democracy." In the Party's view, democratic rights were to be used and abused by revolutionaries to take state power. They had no intrinsic value of their own. The SWP favors elections only until the Communists win--after that no elections are necessary anymore (see Cuba). Mr. Cochran--to his credit--disagreed with that.

But sadly, socialism, democracy and freedom are incompatible concepts. Socialism precludes people from managing their own economic affairs--we're only allowed to buy things the government thinks we need. Thus socialism and freedom are not simultaneously possible. Democracy only works if the power of government is strictly limited, as our Constitution prescribes. Otherwise majority rule morphs into mob rule, which is the enemy of democracy. Unlimited democracy, for example, allows the majority to deprive a minority of the right to vote.

I don't think North Star will succeed in its political mission. Socialism is simply impossible. While people still want government handouts, a large majority in this country realize that some level of free enterprise is essential to a functioning economy. As a political movement, socialism is a dead letter.

I added North Star to my beat because even today I continue to admire and respect Peter Camejo, whom I knew from my days in the SWP. Especially in honor of Mr. Camejo's honest courtesy and civility, I wish the North Star editors much journalistic and popular success. But their political goal--a socialist "revolution" in America--is impossible and will never happen.

Further Reading:

Saturday, November 15, 2014

The People Are Stupid

The people are stupid is the mantra of every Trotskyist's analysis of this (or any other) election campaign. The recently infamous Jonathan Gruber, a chief architect of Obamacare, has nothing on my Marxist friends when it comes to dissing the intelligence of Americans.

The leader of the effort for this cycle is Socialist Action's Jeff Mackler. Not only are voters all stupid, but so must be his readers. Mr. Mackler never misses a chance for utterly incredible exaggeration--completely unconvincing to anybody besides a complete idiot. Here are just a couple of examples (emphases mine).
The Democrats and Republicans spent an unprecedented mid-term, if not all-time, election total of $4 billion, roughly $2 billion each. The giant corporations that footed the bills for their chosen candidates undoubtedly will get trillions of dollars in return, as is always the case in capitalist elections.
Trillions? Recall that US GDP is about $18 trillion annually, and so for a paltry of $4 billion the ruling class will stuff their pockets with a major fraction of all the wealth in the country. Bill Gates, the richest man in the world, is worth about $80 billion. He's famously apolitical and probably donated peanuts to the election campaign, but by Mr. Mackler's account he'll surely at least double his net worth.

If you believe that, you're as dumb as Mr. Mackler thinks you are.

He gets more specific about the amount.
Obama gifted only $30 trillion or so to the corporate elite in bailouts of every sort. During 2012-13 he granted the great banks through the Federal Reserve’s “Quantitative Easing” or “economic stimuli to the rich” policy only $89 billion per month. The same crooked banks, the largest in the country, sold the government essentially worthless mortgages. They were eventually fined several billion, a mere “slap on the wrist” fraction of what they stole. No jail for anyone! In contrast, George Bush only granted the corporate elite a mere $1 trillion or two during his reign.
Again, it boggles the imagination to think anybody believes this. Mr. Mackler asserts that Obama stole 30 trillion dollars out of the economy and gave it to his cronies. Not even the folks at ZeroHedge will sign on to that--they who are unfailing critics of crony capitalism.

That's the funny part about Mr. Mackler's claim--he's the only person in the world who understands the depths of corruption in our society. Nobody else has a clue. We're all worried about theft on the order of millions, or maybe even hundreds of millions. But Mr. Mackler knows the truth--it's really trillions being swept under the table.

Where is all this money going? So far it's disappeared without a trace. Perhaps there's some Bat Cave somewhere where the Banksters hide their gold coins? (Oddly, there's been no shortage of gold coins recently.) Since Mr. Mackler is such an expert on the world economy, perhaps he can explain to us how this massive disappearance of money doesn't show up in any tabulation of global statistics.

No Trotskyist conspiracy theory would be complete without mentioning quantitative easing. In Mr. Mackler's theory, $89 billion per month were being shoveled into the pockets of Jamie Dimon and Lloyd Blankenfein. (There is a whiff of antisemitism in ZeroHedge's account of the same vile plot.) Believing this requires that you ignore some important facts about banking. Banks accept deposits and make loans. The money in a bank is not the personal property of the CEO, and QE is not primarily a gift to the banks. It's mostly a guarantee for depositors.

Sure enough--there is plenty of room for fraud. They can cheat on the fees, or skim off the top. That might add up to millions or tens of millions. But the assertion that the banks made off wholesale with the entire QE effort, undetected by anybody except Jeff Mackler, is simply fantastic. Only your Trotskyist knows.

If Socialist Action's election account is stupid, then The Militant's is pathetic. Their summary article follows Dan Fein around on his quixotic campaign for governor of Illinois (won, I am happy to say, by the Republican, Bruce Rauner). Mr. Fein wasn't on the ballot, so no surprise he didn't win the election. He ran for governor of New York in 2010--if memory serves he was on the ballot for that election. Not that it made any difference.

For the first time in many decades the Socialist Workers Party candidates were not on the ballot in any state. The Party is shrinking off the radar screen.

Mr. Fein spent the campaign season walking picket lines across Chicagoland. He marched with the teachers' union in Waukegan (they settled the next day). He picketed with the Teamsters in Skokie, trying to organize a moving & storage company. And finally, he stood with the nine members of the Machinists' union in East Dundee, who have been standing outside a Chevrolet dealership since July!

So much for the turn to basic industry. How far they have fallen.

Mr. Fein, while more humble and honest than his comrades over at Socialist Action, nevertheless promulgates a fundamental myth of Trotskyism.
“... I’m for a labor party that mobilizes the working class to fight,” Fein said. “Change doesn’t come through elections, but in the course of class battles against the bosses and their government, through which we can transform our unions, ourselves and society.”
Also,
“Lesser-evil politics is a trap for working people,” Fein said. “We need to organize against the capitalist Democratic, Republican and Green parties. A fighting Labor Party is needed.”
In the Trotskyist imagination, there is no difference between Democrats and Republicans. Sarah Palin and Al Sharpton both share bourgeois politics. They're identical under the skin. Again, only your Trotskyist knows.

Louis Proyect, in an article written before the election, illustrates this point well. It's an expletive-laden tirade against Bernie Sanders, whom he accuses of being a fake socialist. Maybe, though Mr. Sanders is enough of a socialist that I'll never vote for him. Mr. Proyect's beef is that Mr. Sanders has supported other Democrats--may the heavens forfend. Specifically, he supported Mark Begich, Kay Hagan, and Mary Landrieu.

Now I'm overjoyed that none of those worthies won reelection--they're all too socialist for my taste. But Mr. Proyect dings them for perfectly reasonable positions.

Mr. Begich gets knocked for supporting oil and gas drilling on the North Slope, and for supporting the Keystone pipeline.

Ms. Landrieu is slammed for supporting the oil and gas industry in Louisiana, and also for supporting the Keystone pipeline.

Ms. Hagan is vilified for supporting the tobacco industry.

All of these candidates are working to defend the livelihoods of citizens in their states. Oil and gas supports hundreds of thousands of people in this country. The growth of the business has kept gasoline prices low, despite turmoil in the Middle East. Yet Mr. Proyect (who lives in Manhattan) thinks all those people should be summarily thrown out of work. Further, Americans should be required to pay $5 or $10 or more per gallon, just so Mr. Proyect (who likely doesn't own a car) can be happy.

What a selfish jerk!

That's the problem with socialists of all stripes: they are pro-poverty. In their view, the only legitimate role for citizens is to be on the welfare dole. Nobody is allowed to earn an honest living. That's why they like places like Cuba and Venezuela and North Korea. In those countries poverty is progressing by leaps and bounds. That's why they're called progressive.

I say Down With Poverty.

That's why I'm a Republican.

Further Reading:

Thursday, November 6, 2014

Socialist Action's Convention

Trotskyists, armed with the Marxist ideological arsenal, pride themselves on offering a unique and intelligent opinion of world affairs. So it is a disappointment to read excerpts from Michael Schreiber's World Political Situation Report only to discover warmed-over, cherry-picked conventional wisdom.

Socialist Action (SA) has apparently not inherited Jack Barnes' talent for storytelling. Mr. Barnes' convention reports are masterful exercises in persuasive, sentimental argument, aimed primarily at comrades, but readable by a larger public. Importantly, he gets his facts mostly right. By contrast, SA's documents are sloppy, full of over-the-top claims that seem unlikely to be true.

The piece in question is about Europe's economy. The lede sets the tone.
Capitalism’s offensive against the world’s working class—which gathered momentum as a consequence of the major economic recession that began in late 2007—continues unabated. Even in the major industrial nations, the ruling class has been waging an all-out struggle to make working people shoulder the debilitating effects of the economic crisis.
The premise is completely wrong. Capitalists make money by selling better products at lower prices to more people. How can that be interpreted as an "offensive against the world's working class?" Quite the contrary, capitalism enriches all of us. Perhaps Mr. Schreiber has purchased the new iPhone 6, or maybe he recently flew on the Boeing Dreamliner airplane, or perhaps like me he takes statins for high cholesterol. Maybe he just bought a car with intelligent cruise control. And he certainly posts articles on to the web. My family buys fresh blueberries in January, imported from Chile. They're no more expensive than the blueberries we buy in the summer imported from New Jersey.

Gas prices are down by 20%. My wife is flying half-way round the world for less money than it cost her three years ago. Even food prices are starting to go down.

How can this guy claim that we're all getting poorer and keep a straight face? There's no way.

Well, there is a way, and of course it involves Greece--a cherry-picked example if there ever was one. German capitalists (evil bastards) sold the Greeks a bunch of new Mercedes on credit--money that now needs to be paid back. Mr. Schreiber doesn't give German workers any credit for building fine motorcars for Greek drivers, but now complains when they want to get paid for it. The problem is the Greeks want a free lunch (or at least a free Mercedes).

So I'll grant Mr. Schreiber that bit of his argument--people in Greece are poorer now than they were ten years ago. But if this is argument by cherry-picking, then I can pick cherries better than he can. The country with the largest proven reserves of crude oil is--wait for it--Venezuela. By all rights it should be a wealthy place.

Yet Venezuela, once the darling of the American Left, has destroyed its oil industry. Today the oil fields have gone to rot, with infrastructure lying in ruins. Venezuelans are much poorer today than they use to be. There are shortages of toilet paper and milk, along with most other consumer products. Caracas has one of the highest crime rates in the world.

Mr. Schreiber's article contains some glaring contradictions. In one paragraph, he complains on behalf of European heating oil refiners that the market is completely glutted, in part by imports of American oil and gas. Accordingly, in Italy 3500 jobs are at risk.

The very next paragraph, however, claims that "imperialist powers" are falling all over themselves to invest in Ukraine, which "might have the fourth largest deposits of frackable shale gas in the world." Go figure. Why would they do that if there's a huge glut of oil and gas on the market? This is what happens when you cherry-pick factoids and have no understanding of underlying economic principles.

Mr. Schreiber goes further and claims that "[t]his explains, for example, the intense interest of Western capitalism in bringing Ukraine into the European Union and into NATO, while muscling Russian capitalism out of the picture." Since when? There isn't a single country willing to put any boots on the ground to make Ukraine part of NATO. And it boggles the mind that anybody wants it in the (disintegrating) European Union. Mr. Schreiber lives in a fantasy land.

The summary of "facts" concludes with this howler.
In summary, despite continued and heightened attacks on the working class by international capitalism—leading to a huge increase in poverty worldwide and a huge shift of wealth upward to the already wealthy— none of the efforts by the masses to thwart these attacks has yet resulted in lasting victories.
There is no huge increase in global poverty. For example, China has suffered a slowdown since 2007--today it's growing at only 7% annually. Given 1% annual population growth, it's hard to see how the Chinese are getting poorer. Likewise, the US has been growing at 2-3% annually since 2010, again significantly above population growth. While some aspects of the American lifestyle are worse than before (most notably, job security), there is little evidence that people are actually poorer. On a global scale, among nations participating in the global economy, that is clearly not true.

Mr. Schreiber points out that Germany's economy shrank by 0.2% last year, after increasing for the past five years. Germany's population isn't growing at all, so this represents at worst an extremely modest decline in the standard of living. But given persistent deflation in the Eurozone, it probably doesn't even mean that much. Like the rest of us, Germans have a higher standard of living than they have ever had before in history.

At the end of the article Mr. Schreiber recounts how the European working class is reacting to this supposedly dire state of affairs. He starts oddly, with the demonstrations in Hong Kong! Not sure what the relevance of that is.

Then he talks about the rise of far right parties in Europe, from the Sweden Democrats to France's National Front. He asserts that the "absence of effective working-class leadership has allowed ultra-right, ultra-nationalist, and fascist parties to grow in some areas, luring petty bourgeois and even working-class sectors into their ranks with rhetoric that blames social problems on immigrants or minority ethnic populations."

But the rise of the extreme right has nothing to do with "working-class leadership," or, for that matter, even economics. It is, instead, because of the democracy deficit intrinsic to the European Union. A bunch of technocrats in Brussels claim to know what's best for every country, and the people never really get a say in the matter. Of course they object to that.

There are crises in Europe--a democracy deficit, and a currency union that doesn't make social sense. The European Union has gotten too big and too powerful. It needs to be reduced to the free trade area it was originally.

But growing European-wide poverty is not the problem. Because there isn't any.

Further Reading:

Saturday, November 1, 2014

Dorothy Day

I've been an admirer of the Catholic Worker (CW) movement for a long time, albeit from a distance and not uncritically. A comparison with Trotskyism is appropriate.

Founded in 1933 by Dorothy Day (1897 - 1980) and Peter Maurin (1877 - 1949), the Catholic Worker newspaper has been published ever since. Peter Maurin was the intellect behind the effort, but the legs (and most of the credit) go to the amazing Dorothy Day. By comparison, The Militant was first published in 1928, and apart from a brief, early interruption, is also still around.

The CW movement sponsors houses of hospitality, that today we might recognize as homeless shelters. In the 1930s, however, at the depths of the depression, many otherwise working class people needed assistance.

Dorothy was a Leftist before she was a Catholic. She had close friends in the Communist Party in her early years. She wrote for the Daily Worker, and also for The Masses. I don't believe she seriously encountered Trotskyism, and I think she would have seen it as equivalent to Stalinism.

So here is my understanding of what CW represents, in bullet points.
  • They are principled pacifists. Dorothy distinguished herself from Communists saying that she was "a pacifist even in the class war." CW is long associated with people like A. J. Muste (a former SWP comrade), Thomas Merton, and Daniel Berrigan.
  • They accept the Marxist meme: We're poor because the rich people stole all the money. That led to Dorothy's sympathy for Stalin, Mao, and Castro, among others. But unlike the Communists, she never forgave them for their mass murder and persecution of religion.
  • CW is resolutely Catholic. While they have disagreed with the Church on individual issues (just war theory, for example, as that conflicts with their pacifism), they subscribe to Catholic morality. They oppose abortion. I think many of them oppose birth control. Dorothy from her own personal experience deeply opposed the "free love" movement, and accordingly took issue with much of second-wave feminism. I recall some years ago reading the reminiscences of a long-time Leftist who spent his early years around CW. He eventually fell away, finally realizing that they were really serious about their Catholic faith, which he didn't share. The name wasn't (and isn't) just a historical artifact.
  • They believe that physical labor is essential to humanity. They assert the dignity of the working man and woman. Dignity is a stronger reason for full employment than the wage (though that's important, too).
  • Most important, they subscribe to personalism, i.e., the essential purpose of good works is made at the level of the individual. Not for them is the mass movement, nor are they concerned about changes in GDP. The Catholic Worker newspaper frequently features extended obituaries of homeless people, often mentally ill.
For CW, the most important words of Jesus are these:
37 “Then the righteous will answer him, ‘Lord, when did we see you hungry and feed you, or thirsty and give you something to drink? 38 When did we see you a stranger and invite you in, or needing clothes and clothe you? 39 When did we see you sick or in prison and go to visit you?’ 
40 “The King will reply, ‘Truly I tell you, whatever you did for one of the least of these brothers and sisters of mine, you did for me.’
I have just finished reading Ross Douthat's book Bad Religion: How We Became a Nation of Heretics. One of the heresies he discusses is that of the social gospel, i.e., elevating the quoted Bible verses above all others. In America the social gospel as a heresy was founded by Walter Rauschenbusch in the early 20th Century, and rewritten for our own time by Harvard's Harvey Cox. Many Protestant denominations and Catholic orders fell for it, subsuming the entire Christian faith into those short verses, and gradually rendering themselves irrelevant in the process. Mr. Douthat offers the Jesuits as an example.

But by hewing closely to the rest of Catholicism, Dorothy Day and CW has managed to avoid that heresy. They have successfully combined the social gospel with a vibrant, durable Christian faith. She resolutely rejected the notion of founding a religious order, though as a movement it had a charism that emphasized care of the poor and physical labor. But charism and heresy are two different things. Dorothy never dispensed with the rest of Catholicism.

I first heard of the Catholic Worker (CW) movement from a comrade in Portland when I was a new member of the Socialist Workers Party (SWP). Curiously, I don't recall a single mention of the Catholic Worker movement ever in The Militant, nor in any of its latter day offspring.
That oddity is the subject of this essay.

To my knowledge, no CW house was located in Portland in the early 70s, and so I never encountered CW directly until much later in life. In those days, CW appealed to the counterculture and attracted some hippies. Much to Dorothy's dismay, some houses tolerated pot and sex. Each house was independent--there was no overarching hierarchy, and accordingly wide variations in house rules. So the Catholic part of the mission was occasionally lost and the house degenerated into a hippie commune. Somehow Dorothy managed to keep enough of them on the straight and narrow to maintain the integrity of the movement.

The SWP regarded CW as irrelevant--we would have called them Jesus freaks. Given CWs aversion to mass movements (that they regarded, correctly, as incipiently totalitarian), we never encountered them at antiwar demonstrations. They preferred nonviolent terrorism, such as breaking into military bases and spilling red paint onto ICBMs. Still, in a larger sense, they would have been part of the antiwar coalition that the SWP led in the early 1970s.

The political role of CW was anarchism. In this they are very much like Marina Sitrin, recently described in a piece in Socialist Action (see here). Ms. Sitrin obviously does not share CW's Catholic faith, but in most other respects her political point of view is identical. They both subscribe to the Marxist meme, they both reject "state power," and they both believe in social change from the bottom up.

But CW is a more durable, truer face of anarchism. The only reason to care about the poor is for moral or spiritual reasons. From any standpoint of practical economics, the poor are irrelevant. The contribution of sub-Saharan Africa to the world economy is negligible. Fortunately, the moral and spiritual motivates lots of people (and not just Leftists), and so much effort is devoted to helping the poor. The difference between CW and Marina Sitrin--and, for that matter, the SWP and Socialist Action--is that CW explicitly recognizes the moral and spiritual dimensions of poverty. They quote a Bible verse to prove it.

By any reasonable measure Dorothy Day has been phenomenally successful. Arguably, Pope Francis is an adherent to the Catholic Worker movement, with his emphasis on voluntary poverty, help for the poor, and his devotion to the Franciscan tradition. Far from being a voice in the wilderness, CW now has the ear of the Vatican establishment. They're not exactly happy about that, and they are resisting the canonization of Dorothy Day.

I take issue with CW on two things.  Recognizing the spiritual and moral necessity of helping the poor is one thing, but it is not necessary to throw out everything we know about economics. Their adherence to the Marxist meme is destructive and does not help the poor. Capitalism helps the poor, partly because most capitalists want to get through the eye of that needle, but mostly because it makes everybody richer. As we've mentioned, today's homeless are not at all the same population as the poor people in Dorothy's depression era. In the way Dorothy understood it, there simply aren't any poor people in the United States today.

The second thing is faith. I'm a practicing Catholic (because of my wife), but not a believing one. I don't have faith. She put it this way.
I had a conversation with John Spivak, the Communist writer, a few years ago, and he said to me, "How can you believe? How can you believe in the Immaculate Conception, in the Virgin birth, in the Resurrection?" I could only say that I believe in the Roman Catholic Church and all she teaches. I have accepted Her authority with my whole heart. At the same time I want to point out to you that we are taught to pray for final perseverance. We are taught that faith is a gift, and sometimes I wonder why some have it and some do not. I feel my own unworthiness and can never be grateful enough to God for His gift of faith.
 I, sadly, do not have that gift of faith. But I admire people who do. I admire Dorothy Day.

Further Reading: