The “new normal”: More than one in five Americans at risk of
destitution
By Barry Grey
29 July 2010

More than one in five Americans in 2009 suffered a household
income loss of 25 percent or more over the previous year,
according to a new report sponsored by the Rockefeller Foundation
and entitled “Economic Security at Risk.” The report documents a
steady increase in economic insecurity since the 1960s, and
concludes that annual income losses of 25 percent or greater
increased by 49.9 percent between 1985 and 2009.

“Putting this tend in terms of population,” the report states,
“approximately 46 million Americans were counted as insecure in
2007, up from 28 million in 1985.” The head of the research team
that prepared the report, Yale University Professor Jacob Hacker,
told an interviewer, “What we’re seeing, basically, is what we’re
calling ‘the new normal.’ We’re slowly ratcheting up this level of
economic insecurity.”

The research group has devised what it calls the Economic Security
Index (ESI), which measures the share of Americans in a given year
who experience at least a 25 percent decline in their available
household income and who lack a financial safety net to replace
the lost income. Such a sudden income drop—usually due to the loss
of employment, high medical expenses, or a combination of the
two—often leaves people facing destitution.

The report does not include 2010, when long-term joblessness has
become endemic. The ESI for this year will doubtless be
considerably higher than for 2009.

The study notes that a staggering 60 percent of Americans
experienced at least one income loss of 25 percent or more over
the 1966-2006 period, and that losses of this size have become
more common across most income sectors since the mid-1980s.

“Those with the most income and education have faced the least
insecurity,” the report states. “The less affluent, those with
limited education, African-Americans and Hispanics have faced the
most. Virtually all groups, however, experienced significant
increases in insecurity over the past 25 years.”

The study also found that the size of the typical income drop has
grown, from 38.2 percent between 1985 and 1995 to 41.4 percent
between 1997 and 2007. And the level of income insecurity relative
to unemployment at any given point has risen over the past quarter
century. In 1985, the unemployment rate was 7.2 percent and the
ESI was 12 percent. In 2002, when the jobless rate was 5.8
percent, the ESI was 17 percent.

The report relates the protracted rise in economic insecurity to
the explosive growth of both medical costs and household debt, and
the decades-long increase in the concentration of wealth at the
very top of the economic ladder. It notes the finding of the
Congressional Budget Office that between 1979 and 2006 average
after-tax income rose by 21 percent for the middle fifth of
American households, but increased by 112 percent for the richest
10 percent of households and 256 percent for the top 1 percent.

The sharp rise in economic insecurity documented by the
Rockefeller Foundation study is the outcome of a three-decade-long
offensive by the American ruling class against the jobs, wages and
living standards of the working class. This assault has only
intensified since the eruption of the financial crisis in
September 2008, which ushered in the worst recession since the
1930s. Under Obama, the drive to offload the crisis onto the
working class has been stepped up, in the form of wage cuts,
speedup and savage cuts in social spending at the state and local
level.

The Obama administration extended the Wall Street bailout launched
under Bush. It then signaled the intention of the ruling class to
use mass unemployment to permanently lower the wages and
conditions of American workers toward those of impoverished
workers in Asia when its Auto Task Force drove General Motors and
Chrysler into bankruptcy last year. This was done to impose new
plant closures and layoffs and slash the wages of newly hired auto
workers to half the previous level.

Next came the so-called health care “reform,” which will lower
health costs for businesses and the government by rationing care
and reducing benefits for tens of millions of workers and
retirees. Since the passage of the health care overhaul, the
administration has abandoned any economic stimulus measures in
order to focus on slashing the budget deficit by attacking basic
social programs upon which millions of working people rely.

The result of these policies is a record rise in corporate
profits, based almost entirely on the reduction in labor costs
through layoffs, wage and benefit cuts, and speedup. In many
cases, companies have reported sharply higher profits, even though
their sales and revenues have declined.

In an article headlined “Industries Find Surging Profits in Deeper
Cuts,” the July 26 New York Times reported that US corporate
profits jumped by 40 percent between late 2008 and the first
quarter of 2010. It noted that by next year, analysts expect
profit margins to reach 8.9 percent, a record high.

The Times wrote that among the S&P 500 companies that have
reported their second-quarter results, 175 in all, more than one
in ten had higher profits on lower sales, nearly twice the number
in a typical quarter before the current recession. Among the firms
that have reported earnings for the second quarter, revenues rose
6.9 percent on average while profits surged 42.3 percent.

The article cited the motorcycle producer Harley Davidson, which,
despite falling sales, last week posted a $71 million profit, more
than triple its profit a year ago. Last year the company cut 2,000
jobs, over a fifth of its work force, and plans to slash another
1,400 to 1,600 jobs by the end of next year. Harley stock surged
13 percent the day it released its quarterly results.

Other companies that have improved their bottom lines despite
falling sales and revenues include General Electric, JPMorgan
Chase, Hasbro and Ford. The latter’s North American operations are
expected to earn more than $5 billion in 2010, despite a revenue
plunge of $20 billion since 2005. Over the 2005-2010 period the
company has slashed its North American workforce by nearly 50 percent.

The same day as the Times report, the Wall Street Journal ran an
article noting that the financial markets are generally punishing
companies that report expansion plans and rewarding those that
plan either no new hiring or further layoffs.

This class-war policy is further enriching the financial
aristocracy. The Wall Street Journal on Tuesday published its list
of the past decade’s highest paid US corporate CEOs. At the top
was Oracle chief executive Lawrence Ellison, who has pocketed
$1.84 billion over the past ten years.

His average yearly take of $184 million helped Ellison compile his
estimated fortune of $28 billion. Some idea of the lifestyle of
Ellison and his fellow CEOs can be gleaned from the fact that the
Oracle CEO owns several fighter jets, a $200 million estate in
California complete with a man-made lake, and mansions in Malibu
and Rhode Island.

The total income of the 25 CEOs on the Wall Street Journal list is
$13.5 billion, an average of $540 million per executive over the
decade.

Such avarice and obscene levels of wealth are the reverse side of
growing economic insecurity, poverty, homelessness and hunger for
millions of working people in America and billions more around the
world.

News from Blighty: the disparity in death rates between the well-off and the poor in the UK is now greater than at any time since 1921. The London Review of Books points to a new study by the British Medical Journal that shows that by 2007, “for every 100 people under the age of 65 dying in the best-off areas, 199 were dying in the poorest tenth of areas.”

The Journal study said that the data suggest “it was only prolonged and enthusiastic state intervention” that kept the disparity from being greater. On the other hand, the elite-coddling market jihadism of the Clintonian-Obamaish “New Labour” government (or as the BMJ more politely puts it, “the prolonged state disengagement in promoting equality in outcome”) helped stretch the yawning gap even further.

In other words, the few spare pence that the war criminals of the Labour government threw at the poor kept them from dying quite as fast as they would have done otherwise under the system of voracious corporate rapine that Labour entrenched and expanded after inheriting it from the Thatcherite Tories in 1997.

Now, even those few pence are being stripped away — gleefully — by what many say is the most extremist government Britain has ever seen, outstripping even Margaret Thatcher in the scope of its draconian cuts and the fervor of its market fundamentalism. The savage cutbacks and vast, churning upheavals being pushed through, at breakneck speed, by the new Conservative government (and its truly pathetic coalition “partner,” the lapdog Lib Dems) will sends millions of people tumbling down into a permanent underclass — and finally, after 60 years of trying, gut the national health service with a stealth “Americanization” that will turn the operation of local doctors’ offices over to private firms (many of them from the US) and privatize public hospitals, allowing them to “fail” — and close — if they don’t produce enough cash for their elite shareholders. Meanwhile, the schools are now in the hands of the arch-neocon Michael Gove, who is plotting with revisionist historian Niall Ferguson to impose a pro-Empire, pro-elite “national greatness” ideology on the young. Gove is also using “emergency” legislative procedures to strip public schools away from the oversight of democratically elected local government and put them into the hands of unaccountable corporations, religious groups and wealthy elites.

This Revolution of the Rich is being justified by a carefully crafted, constantly stoked panic about budget deficits, pointing to the example of the perpetually weak government and economy of Greece as a horror story to be avoided at all costs. Yet even if the Greek situation was as dire as the fearmongers make out, the fact remains that the cuts which the Tory-LapDog coalition is making in the much stronger, much more stable UK are actually far in excess than those being imposed upon Greece. As with the fearmongering about “Iraqi WMDs,” the “dangers of the deficit” are being exaggerated — and manufactured — in order to put into place a pre-existing (and transatlantic) ideological agenda: neo-feudal oligarchism.

But in almost all of these measures, the Tory-LapDog government is only entrenching and expanding the “market-led reforms” imposed by New Labour. And “New Labour” was of course a close copy of the “New Democrats” of Bill Clinton and his clique of “triangulating” bagmen for Big Money — scarcely distinguishable from the Reagan-Bush faction that preceded them, and then succeeded them in the Bush dynasty’s second turn in the White House. And we all know that “continuity” is the byword of the Obama administration, which is chock-a-block with holdovers not only from strangulating triangulators of the Clinton era but also the imperial militarists from the two Bush reigns.

Thus for more than 30 years, the world-dominating Anglo-American alliance has been under the sway of factions which, for all their internal squabbling and hair-splitting, are strongly united in their steadfast, unshakeable adherence to the perpetuation — and expansion — of elite power and privilege. They have shown themselves willing — eager — to degrade their own societies (and destroy many others) in the service of this brutal, barbaric, inhuman faith. The poor have no place in this system, which is a retrograde, hi-tech, rhetorically sugarcoated revival of the laissez-faire fantasies of the past, as Jeremy Seabrook notes:

“‘Pauperism’ long ago took on the colour of culpability. The distinction between the idle and improvident poor and the “deserving” goes back at least to the Elizabethan poor law. It took on a new force in the early industrial era, which saw an unprecedented growth in pauperism. The enthusiasts of laissez-faire concluded that the evil was compounded by efforts to relieve it, and helping the poor only increased their number. Everything indicated that “natural” processes should be allowed to take their course. …. In this version of the world, the market mechanism is as flawless a creation as the earth, and should remain untouched by the hand of meddlers, whose only effect is to upset its power to enrich us all. It is remarkable that the establishment of laissez-faire itself in the early 19th century required an enormous amount of government intervention and regulation …”

And so it is today. The “regulation” of the health care industry introduced by the Obama Administration is actually a gargantuan transfer of wealth, by force, from working people and the poor to a few huge corporations. The financial “regulation” signed into law is yet another sham that will leave the rapacious fools and fraudsters who brought down the global economy — and triggered the convenient “deficit crisis” by demanding massive bailouts of public money for their private businesses — at large and in charge of the world’s finances. Meanwhile, more and more government regulations restrict the right of ordinary citizens to challenge the rich and powerful in court, or to register a public protest (herding them instead into the truly hideous “free speech zones”) — even as the state grants corporations extraordinary privileges to interfere with the political process with their vast resources and protects their leaders from personal accountability for the ravages they commit. The government “intervention and regulation” on behalf of the industries and elites who service the endlessly expanding symbiosis of corporate, military and ’security’ power — stretching even to the countenancing and cover-up of torture and murder — is one of the defining elements of our age.

And as Glenn Ford notes, Obama is preparing to “regulate” the last tattered fragments of the social welfare system — already decimated by the progressive’s favorite good old boy, Bill Cinton — right out of existence:

“In April of this year, Obama once again reminded everyone that everything is and has always been “on the table,” as far as he’s concerned, including Social Security. His so-called “deficit commission” is stacked with rich sociopaths sharpening their knives to carve up, sell off or otherwise doom Social Security. It is a battle that safety net defenders thought they had won against George Bush. Barack Obama has picked up Bush’s marbles and put them back into play. He is the right wing’s most potent weapon, the one before which liberal Democrats throw up their hands in surrender without the dignity of a fight. Obama, working in plain sight over the past 18 months, has constructed and rigged a deficit commission to render a kind of death sentence to the foundational program of Roosevelt’s New Deal.”

This is the system — the creed, the extremist faith — that all “serious” players in all the “major” power faction on both sides of the Atlantic adhere to. Their god of greed demands human sacrifices: and so the poor must die. And to keep the system going, more and more people must be made poor: first those in the “outer darkness” of faraway lands, then finally those in the sacred “Homelands” themselves. We have been watching the latter process play out slowly in the past few decades — but it is accelerating now at dizzying speed.

As I once noted here awhile back of some our representative elites:

“Perhaps if they could obtain these same privileges as easily by other, less horrific means, they would. As it is, they take the world as they find it, and go about their business without fretting over the consequences — the dead, the ruined, the spreading hate, the poisoned planet. Why should they care? As the maggot cannot see beyond the meat, so too these [people] of greed-stunted understanding can see nothing of worth outside their own bottomless appetites.”

Chris Floyd is a frequent contributor to CounterPunch. His blog, Empire Burlesque, can be found at www.chris-floyd.com.

Update: Read Martin Wolf’s conclusions on the debate
Something strange happened to economics about a century ago. In moving from
classical to neo-classical economics — the dominant academic school today —
economists expunged land — or natural resources. Neo-classical value theory —
based on marginalism and subjective valuation — still makes a great deal of
sense. Expunging natural resources from the way economists think about the world
does not.
In classical economics, land, labour and capital were the three factors of
production. With neo-classical economics, the standard production function had
just two factors of production: capital and labour. Land — by which we mean the
totality of natural resources — was then incorporated into capital.

http://blogs.ft.com/martin-wolf-exchange/2010/07/12/why-were-resources-expunged-from-neo-classical-economics/#more-456

No medium of propaganda is as powerful and effective as film.
Think of the classics, the most notorious efforts to sway the
public with the electrifying and collective passion of cinema:
racial apartheid was justified in the US with Birth of a Nation.
The Soviets glorified their revolution with The Battleship
Potemkin. Then there was Triumph of the Will.

A typical propaganda film tugs at emotions and invokes fears. It
invokes dark threats to “the people,” and it offers up solutions
extolling state and corporate power. Unlike a political
documentary it will not criticize the state or corporations.
Instead it will celebrate great men as our leaders and saviors.
Distinct from a run-of-the-mill political documentary, a
propaganda film butchers the complexity and contradictions that
permeate politics and real life, presenting things in simplistic
moral terms. Functionally, propaganda is mobilized to secure
popular support for a primary, often hidden agenda that is not
apparent in the film’s narrative. Propaganda is a tool used by
elites to secure the consent of the masses, channeling their
anxieties.

Now hitting theaters is one of the most dangerous propaganda films
produced in decades. Countdown to Zero “traces the history of
the atomic bomb from its origins to the present state of global
affairs.” A promotional blurb on the film’s web site claims that
it “makes a compelling case for worldwide nuclear disarmament, an
issue more topical than ever with the Obama administration working
to revive this goal today.”

full: http://mrzine.monthlyreview.org/2010/bg220710.html

`Capitalism’ Not So Sacred to Americans as Mood Sours
By Mark Drajem – Jul 13, 2010

Capitalism, the bedrock of the U.S. economic system, isn’t a
favorite term these days among American citizens, opinion surveys
show.

The U.S. Chamber of Commerce released a poll today showing that 57
percent of Americans say they support capitalism, compared with
more than 70 percent who back free enterprise and free markets.
Polls by the Gallup Organization and the Pew Research Center for
the People & the Press earlier this year found similar lower
levels of enthusiasm for the term.

“There’s been an erosion of support for capitalism,” Steve
Lombardo, president of the Lombardo Consulting Group, which
conducted the poll for the Chamber of Commerce, said in an
interview. “It hasn’t become a bad word, but it’s less positive
than it has been.”

The Chamber’s poll found 20 percent of those polled were neutral
toward capitalism and 19 percent held negative views.

For the Chamber, corporate America’s biggest lobbying force in
Washington, that lack of support is a cause for worry, said Stan
Anderson, managing director of its Campaign for Free Enterprise.

“We need to do a better job of explaining the economic system in
the United States and how it is working,” Anderson said in an
interview. “We have been looking at anecdotal information that
there was a misunderstanding of capitalism.”

‘Big Business, Big Government’

Anderson said Americans’ support for the term “free enterprise,”
which was viewed positively by 78 percent of the respondents, may
show that they just oppose any “-isms.”

Charles Derber, a sociologist at Boston College, says the results
show the public’s unhappiness with the ties between “big business
and big government,” exemplified by the multi- billion dollar
bailout of banks in 2008.

“When people say they are down on capitalism, they mean they are
down on corporate capitalism,” Derber, author of books including,
“People Before Profit,” said in an interview. “They see capitalism
as it exists here as anything but a free market.”

‘Corporate Excesses’

A Gallup poll in April found that 52 percent of those surveyed had
a positive assessment of capitalism and 37 percent a negative
view. Socialism had a 29 percent positive assessment.

“Reaction to ‘capitalism’ is lukewarm among many demographic
groups,” Gallup editor Frank Newport wrote May 4. “Fewer than half
of young people, women, people with lower incomes and those with
less education react positively” to the term, he wrote.

“It is a reasonable hypothesis that in the midst of the current
downturn and the visibility of the corporate excesses that
negative assessments of capitalism have increased,” Newport said
today in an interview. Gallup hadn’t polled about the term before,
he said.

In addition to the findings on capitalism, the Chamber’s poll
found that 43 percent of those surveyed said the Obama
administration’s policies are making the economy worse compared
with 23 percent believing it is making it better.

“There is a major trust deficit,” Lombardo said.

http://www.politicalaffairs.net/article/articleview/9472/

The Political Activism of Karl Marx
By Bob Patenaude

Mention the name Karl Marx and most people will conjure an imagine a
gray long-haired, bearded man hunched over piles of books and papers in
the London Library. This is, of course, an accurate image of much of
what occupied Karl Marx’s life, not only the writing of his masterwork
“Capital” but a body of work which was to become the basis for a global
movement for socialism. Yet Marx was more than just a specter haunting
the reading rooms of the London library. He was also actively engaged in
many of the earliest struggles of the communist movement in which he
played such a vital role.

One of his earliest forays into political activity was as a radical
journalist. In 1842, at the age of 24 Marx became the editor of Neue
Rheinische Zeitung, As a result of Marx’s fiery articles opposing
Prussian authoritarianism the paper was suppressed by the authorities.
After the closing of NRZ Marx made his way to Paris in 1843 where he
edited Deutsch-Franzosische Jahrbucher. He hoped to open up new lines of
communication between French Communists and the German left Hegelians
with this new effort. The publication did not last long, however. Only
one issue appeared ,and it failed to open the lines of communication
Marx had hoped to develop.

It was also during this time in Paris that Marx made what would become
his lifelong friendship with Friedrich Engels. Engels would become
Marx’s closest collaborator and confidant. Engles would also financially
support Marx and his family through much of the rest of their lives.

For his journalism and political activism, Marx was expelled from Paris
in 1844. He spent the next three years in Brussels. During this time he
became a member of the Communist League. It was during a conference of
the Communist League in 1847 that Marx and Engels were appointed to
write a short and accessible document stating the Position of the CL.
The resulting work appeared in 1848 when Marx and Engels published the
Communist Manifesto. “The Manifesto” would become the most popular
exposition of the principles of socialism as developed by Marx and
Engels during their time in the Communist League. It remains a statement
of the core principles of socialism to this day.

In 1848 Marx found himself, once again, in Paris. There he attempted to
revive Neue Rheinische Zeitung. The Communist League by this time had
all but collapsed allowing Marx to devote his full attention to the
publication of the new NRZ. It was also during this period that Marx
began a newly intensified study of political economy which would lead
ultimately to “Capital,” Marx’s masterwork and, arguably, the best
exposition on the nature and function of capitalism ever penned.

It would seem clear from this brief survey of Marx’s early political
activity that he was anything but an isolated academic. His work on Neue
Rheinische Zeitung and Deutsch-Franzosische Jahrbucher represented more
than simple radical journalism. At the age of 24 Marx had managed to
intimidate and politically unnerve some of the most powerful and
reactionary people and institutions in Europe. This lead to repeated
expulsions from France and German. Finally, he found himself exiled in
London. He would spend the rest of his life there. He died on March 14,
1883 at the age of 64.

It is interesting to note that early in his career, even with the
multiple pressures of his radical journalistic projects, the constant
expulsions and uprooting of his life Marx managed to pen one of his most
important contributions to socialist theory; “The Economic and
Philosophic Manuscripts of 1844.” Even work on “Capital” which is
generally considered his magnum opus was repeatedly interrupted and
delayed because of his work in the First International. The first volume
of Capital would not see publication until 1867. The latter two volumes
would be published by Engels after his death.

Marx was elected to the general council of the first international in
1864. He became especially active in preparing for the International’s
annual congresses as well as leading the struggle against Mikail Bakunin
who was the leading political and theoretical voice of the Anarchists
within the International.

Even in the final years of his life with his health failing and unable
to do the kind of sustained work that characterized his life up until
then he remained active in contemporary politics. He wrote “A Critique
of the Gotha Program” which started out as a letter to Eisenach faction
of the German social democratic movement (Which Marx and Engels
supported) in 1875. The critique was a polemic against Wilhelm Liebknect
and August Bebel, both of whom considered themselves followers of Marx.
In the Critique Marx attacks their position of compromise with Ferdinand
Lasalle Lassalle was an advocate of state socialism and Liebknect and
Bebel felt without a compromise the socialist party would be unable to
maintain unity. Critique of the Gotha program is thought by many to be
Marx’s clearest exposition on practical politics.

Marx’s life and work serves as an example to both activists and
theoreticians. He showed that in the pursuit of radical political change
both action and theory depend on each other in their mutual attempts to
understand and change the world. Marx was a living embodiment of
revolutionary praxis.

–Bob Patenaude is executive director of the Niebyl Proctor Marxist
Library in Berkeley, California.

Throwing Down the Gauntlet: A Review of Michael Lebowitz’s Socialist
Alternative
by Douglas W. Greene

Michael Lebowitz. The Socialist Alternative: Real Human
Development. New York: Monthly Review Press, 2010. Pp 192; $15.95

The Socialist Alternative: Real Human DevelopmentOnly about ten or
fifteen years ago, leftist theory was in a sorry state. It seemed as if
socialism had ceased to be a viable project with the fall of the Soviet
Union. Instead of an alternative to capitalism, theorists were singing
the praises of the third way or the idea of changing the world without
taking power. Today, however, capitalism is facing its worst crisis in
decades and socialism is hailed from Venezuela to Nepal. At this new
conjuncture, Michael Lebowtiz’s Socialist Alternative helps to provide a
theoretical way for twenty-first century socialism.

First, a few words about the author. Michael Lebowitz is a long-time
activist. In the 1960s, he was active in Students for a Democratic
Society. In the 1970s, he served as an economic policy chair for the
New Democratic Party in Canada. Currently, Lebowitz is working in
Venezuela at the Centro Internacional Miranda. Lebowitz has authored a
number of books on Marxist theory such as Beyond Capital: Marx’s
Political Economy of the Working Class (Winner of the Isaac Deutscher
Memorial Prize in 2004), Build It Now, and Following Marx. All of
Lebowitz’s works are inspired by a solid grounding in Marx’s method and
a deep revolutionary vision.

In this sense, Socialist Alternative is no different. Yet the timing
could not be better: a work that reaffirms the socialist vision in the
midst of the Great Recession. That is what Lebowitz sets out to do.
His work “draws upon the Venezuelan experiment to develop a general
vision of socialism and concrete directions for struggle” (9). Lebowitz
begins by asking a question: “What is a good society?” (12). Lebowitz
believes that “a good society is one that permits the full development
of human potential” (12).

As Lebowitz puts it, “the logic of capital generates a society in which
all human values are subordinated to the pursuit of profits” (16). The
logic of capital entails the exploitation of workers. Capital alienates
workers from the products of their labor, crushes them with the speed-up
and extended workday, and deforms the human being. Capitalism also
brings with it a hierarchical division of labor, self-interest, and
unemployment. Lebowitz points out that capitalism is an organic system
that continually reproduces itself.

Lebowitz’s analysis of capitalism is important to his development of a
socialist alternative. Just as capitalism is an organic system with its
own relations and mode of production, socialism must also be an organic
system. That requires revolutionary practice where, in order “to change
a structure in which all relations coexist simultaneously and support
one another, you have to do more than change a few elements in that
structure; you must stress at all times the hub of these relations —
human beings as subjects and products of their own activity” (129). For
Lebowitz, this means that the key to any potential socialist
transformation is the self-activity of the masses.

Here is a clear strength of Lebowitz’s book: it is not a rehash of
Soviet-style “socialism” or social democracy. Lebowitz criticizes the
USSR for its alienated and undemocratic society that was ruled from the
top down. Lebowitz also believes social democracy is not willing to
take the measures necessary to confront capital. Neither of these
systems can serve as an alternative to capitalism. (For those on the
left not affiliated to either social democracy or the USSR, this is old
news.) That brings us to the following question: if capitalism does not
produce a good society that ensures human development, what type of
alternative can?

Lebowitz answers this by laying out the socialist triangle. The
socialist triangle consists of three necessary parts: social ownership
of the means of production, social production organized by workers, and
the satisfaction of communal needs. It would be useful to look at each
side of the triangle to elaborate what all this means.

The first part of the triangle is the social ownership of the means of
production. Social ownership “implies a profound democracy from below
rather than decisions by a state that stands over and above society”
(41). This means that factories are run by the workers, not bosses or
bureaucrats. Lebowitz does a good job here in differentiating state
ownership (with its hierarchical and undemocratic relations) from the
democratic control of the workers. Social ownership is necessary to
satisfy the needs of all people, rather than just the needs of private
owners.

The second part of the triangle is social production organized by
workers. Under capitalism, production is organized by capital which
exploits workers. Workers are also degraded by capital and unable to
develop their full human potential. Social production organized by
workers is necessary to build “relations of cooperation and solidarity”
(86). When workers organize production, they develop their human
capabilities, which is necessary for socialism.

The third part of the triangle is the satisfaction of communal needs.
With communal production “where the associated producers engage in
productive activity for the needs of the community, there is the
continuous process of development of the capabilities of producers”
(81). Lebowitz contrasts communal needs to individual needs. Where
self-interest or material incentives are the driving force, this
reproduces the defects of capitalism. As Lebowitz makes abundantly
clear, socialism can’t be built with the tools of capitalism.

Thus, the socialist triangle is an organic system that seeks to overcome
the defects of capitalism. For example, without the goal of producing
for communal needs, an attempt at socialism can lead back to capitalism.
Lebowitz clarifies this point by using the example of Yugoslav
factories. There, workers had some control over their factories
(although there was also a large managerial layer), but the factories
“were driven by one thing — self-interest” (74). In running factories
for self-interest, the Yugoslav experiment led back to a capitalist
system. Thus, without all the parts of the triangle in place, socialism
cannot function as an organic system.

Lebowitz goes into how to make the socialist triangle an organic system.
He discusses the role of workers’ councils, connections between
producers in different communities, and expansion of the commons.
However, Lebowitz doesn’t offer a blueprint for the future. Rather, he
emphasizes “that each country must invent its own path” (128). Although
clearly inspired by the Venezuelan Revolution, Lebowitz doesn’t believe
it has found the golden road to socialism.

For those unfamiliar with the Marxist vocabulary and method, this book
will not be easy. Yet this book is necessary. Those who dare to read
will find a bold vision of a profoundly humanistic socialism. Those
looking for answers to the miseries produced by the financial crash and
imperialist war should start with The Socialist Alternative.
Doug Greene is a Marxist historian and part-time teacher living in
Massachusetts. He can be reached at .

http://www.marxmail.org/msg79706.html

Last month, a funny thing happened on the way to the best-seller list. A
66-year-old treatise by a long-dead Austrian-born economist began flying
off the shelves, following an hourlong endorsement from a right-wing
television host better known for pumping political thrillers than for
rocking political theory.

The economist was Friedrich von Hayek, the book was “The Road to
Serfdom” and the host was Glenn Beck, who compared Hayek’s book to “a
Mike Tyson (in his prime) right hook to socialism in Western Europe and
in the United States.” As it happens, “The Road to Serfdom” — a classic
attack on government planning as an inevitable step toward
totalitarianism, published in 1944 and kept in print since then by the
University of Chicago Press — had already begun a comeback of sorts. It
sold 27,000 copies in 2009, up from about 7,000 a year before the
inauguration of Barack Obama. But Beck’s endorsement catapulted the book
to No. 1 at Amazon.com, bringing a temporary end to at least one
tyranny, that of Stieg Larsson. Since the program was broadcast on June
8, 100,000 copies have been sold.

That’s an impressive number for an academic-press book, if a bit anemic
compared with the 1.2 million views for “Fear the Boom and Bust,” a
Hayek versus John Maynard Keynes rap video that went up on YouTube in
January. (Kickoff line: “Party at the Fed!”) But in fact “The Road to
Serfdom” has a long history of timely assists from the popular media.

When Hayek began formulating his ideas in the early 1930s, he was an
émigré professor at the London School of Economics, watching events in
both Europe and Britain with alarm. Like many others, Hayek was
frightened by the rise of Nazism. He interpreted it, however, in an
unorthodox way, not as the defeat of democratic socialism but as its
logical culmination. Hayek started writing the book after World War II
began, as a contribution to the war effort. Looking ahead, “Hayek was
also worried about what would transpire if the Allies won,” as Bruce
Caldwell puts it in his introduction to “THE ROAD TO SERFDOM”: Text and
Documents — The Definitive Edition (University of Chicago, $17). In
ominously titled chapters like “The Totalitarians in Our Midst” and “Why
the Worst Get on Top,” Hayek laid out his case against “socialists of
all parties” who he believed were leading the Western democracies into
tyranny that mirrored the centrally planned societies of Germany and the
Soviet Union.

This theme, being taken up today by Beck and other antigovernment sorts,
had a plausible basis at the time. Caldwell quotes a 1942 Labour Party
pamphlet that declared, “There must be no return to the unplanned
competitive world of the interwar years. . . . A planned society must
replace the old competitive system.”

When it appeared in 1944, “The Road to Serfdom” received a courteous if
mixed reception in Britain (where paper shortages limited the print
run). Keynes, Hayek’s friend and lifelong intellectual opponent, called
it “a grand book,” adding, “Morally and philosophically, I find myself
in agreement with virtually the whole of it.” George Orwell, more
equivocal, conceded that Hayek “is probably right” about the
“totalitarian-minded” nature of intellectuals but concluded that he
“does not see, or will not admit, that a return to ‘free’ competition
means for the great mass of people a tyranny probably worse . . . than
that of the state.”

It was in the United States, however, that Hayek met with his greatest
success — and the most intense hostility. Rejected by several trade
publishers, “The Road to Serfdom” was picked up by Chicago, which
scheduled a modest print run. It got a boost when Henry Hazlitt, a
prominent free-marketeer, assessing it on the cover of The New York
Times Book Review in September 1944, proclaimed it “one of the most
important books of our generation,” a call to “all those who are sincere
democrats and liberals at heart to stop, look and listen.” The political
scientist Herman Finer, on the other hand, denounced it as “the most
sinister offensive against democracy to emerge from a democratic country
for many years.” But the most important response came from the staunchly
anti-Communist Reader’s Digest, which ran a condensed version of the
book in April 1945, with reprints available through the Book of the
Month Club for 5 cents each. The condensation sold more than a million
copies.

Reading the book today, it’s easy to see why Hayek’s message caught on
with a public divided over the New Deal, struggling with the transition
from a regulated wartime economy and concerned about rising Soviet
power. But unlike some of his champions in 2010, Hayek didn’t oppose all
forms of government intervention. “The preservation of competition,” he
wrote, is not “incompatible with an extensive system of social services
— so long as the organization of these services is not designed in such
a way as to make competition ineffective over wide fields.” This
qualification, however, was left out of a comic-book version of “The
Road to Serfdom” printed in Look magazine in 1945 (and distributed as a
pamphlet by General Motors), which showed well-intentioned regulation
giving way to more sinister forms of control. “In an unsuccessful effort
to educate people to uniform views,” one caption read, “‘planners’
establish a giant propaganda machine — which coming dictator will find
handy.”

While Hayek, who moved to the University of Chicago in 1950, built an
ardent following of admirers (including Milton Friedman),­ his fame
gradually waned. By the time he won the Nobel Prize in 1974 he was
largely forgotten by the public and marginalized within his profession.
In graduate programs in the early 1980s, the economist William Easterly
recalled recently on his blog, “Hayek was seen as so far right that you
would be considered a nut to read him.” (His sunny view of the Chilean
dictator Augusto Pinochet probably didn’t help.)

Today, Hayek continues to inspire noisy ideological debate. In his
recent book “Ill Fares the Land,” a passionate defense of the democratic
socialist ideal, the historian Tony Judt writes that Hayek would have
been (justly) doomed to obscurity if not for the financial difficulty
experienced by the welfare state, which was exploited by conservatives
like Margaret Thatcher and Ronald Reagan. The economist Paul Samuelson,
in a reminiscence of Hayek published last December, was more dismissive
still. “Where are their horror camps?” he asked, referring to right-wing
bugaboos like Sweden, with its generous welfare spending. Almost 70
years after Hayek sounded his alarm, “hindsight confirms how inaccurate
its innuendo about the future turned out to be.”

Hayek also cropped up in the recent controversy over the Texas Board of
Education’s new high school curriculum, which will now include him and
Friedman alongside Adam Smith, Karl Marx and Keynes. In a post on The
Times’s Freakonomics blog, Justin Wolfers, a professor at the Wharton
School, noted that a search of scholarly literature found Hayek, with a
mere 1,745 references, lagging far behind Smith (25,626), Keynes
(4,945), Friedman (8,924) and even Lawrence Summers (2,064). “The
message from the Texas Board of Education seems to be: If you can’t win
in the marketplace of ideas, turn to government institutions to prop you
up,” Wolfers wrote, adding sardonically, “I don’t think Hayek would
approve.”

Another blogger, redoing Hayek’s count, tallied 9,385 citations. But
intellectual legacies don’t stand or fall on such bean-counting.
Besides, Hayek, whose later work on the self-organizing nature of
information has been influential far beyond economics, himself said “The
Road to Serfdom” was more a “political book” than an economic one.

But how relevant is the book to Glenn Beck’s America? In his 1960 essay
“Why I Am Not a Conservative,” Hayek observed, “Conservatism may often
be a useful practical maxim, but it does not give us any guiding
principles which can influence long-range developments.” Then again, his
own strange road to best-sellerdom illustrates that a book’s reputation
can be determined not just by its contents but by the company it keeps.

Jennifer Schuessler is an editor at the Book Review.

Dan La Botz knows with certainty that President Barack Obama is no socialist.

He’s sure because he’s one himself, and finds little in common with the politics of the 44th president of the United States.

“I don’t support Obama. If I did, I would be a Democrat,” La Botz said. “I find it astonishing that people would think he’s a socialist. He’s given trillions of dollars to bankers, billions to General Motors, created a health care system that supports the health insurance companies … his foreign policy is consistent with Bush’s foreign policy.”

La Botz, of Clifton, is running for a seat in the U.S. Senate this year on the Socialist ticket.

Since President Obama was elected, “socialism” is a word on the lips of many conservative politicians, tea party supporters and political pundits. A CBS News/New York Times poll in April showed 92 percent of tea party supporters believe Obama is moving the country toward socialism – while 52 percent of all Americans held the same belief.

Socialists shake their heads – but they don’t really mind the attention.

Dan La Botz knows with certainty that President Barack Obama is no socialist.

He’s sure because he’s one himself, and finds little in common with the politics of the 44th president of the United States.

“I don’t support Obama. If I did, I would be a Democrat,” La Botz said. “I find it astonishing that people would think he’s a socialist. He’s given trillions of dollars to bankers, billions to General Motors, created a health care system that supports the health insurance companies … his foreign policy is consistent with Bush’s foreign policy.”

La Botz, of Clifton, is running for a seat in the U.S. Senate this year on the Socialist ticket.

Since President Obama was elected, “socialism” is a word on the lips of many conservative politicians, tea party supporters and political pundits. A CBS News/New York Times poll in April showed 92 percent of tea party supporters believe Obama is moving the country toward socialism – while 52 percent of all Americans held the same belief.

Socialists shake their heads – but they don’t really mind the attention.