|
|
|
The New Print Edition of CounterPunch, Only for Our Newsletter Subscribers! How Cops Extort Confessions;
|
home / subscribe / donate / books / archives / search / links / feedback / events / faq
The New Print Edition of CounterPunch, Only for Our Newsletter Subscribers!
How Cops Extort Confessions;
How the U.S. “Justice System” Really WorksNinety-two per cent of felony convictions in the U.S. are obtained by plea bargains or confessions. Without them the “justice system” would grind to a halt. In an important piece in our latest newsletter, available only to subscribers, Emily Horowitz shows how totally innocent people will “confess” under police pressure, even without physical torture. Horowitz outlines the powerful case for banning confessions altogether. Also in this new edition Marcus Rediker, co-author of the legendary The Many Headed Hydra, writes of popular heroism and resistance in the favelas of Medellin, Colombia. Alexander Cockburn reports on how America’s oldest bank, patronized by the global elites, washed billions smuggled out of Russia, and how the Russians might win their money back, shaking the world’s banking system if they do so. Serge Halimi describes the real battle for the soul of Europe. Get your copy today by subscribing online or calling 1-800-840-3683 Contributions to CounterPunch are tax-deductible. Click here to make a donation. If you find our site useful please: Subscribe Now! CounterPunch books and gear make great presents.
|
Today's Stories August 23 / 4, 2008 Nicole Colson August 22, 2008 Boris Kagarlitsky Laura Carlsen Bob Barr Marwan Bishara Peter Morici Manuel Garcia, Jr. Charles Mostoller Sumbul Ali-Karamali Keith Rosenthal John F. Miglio Website of the Day August 21, 2008 Allan J. Lichtman Dave Lindorff Loserville: How Obama Blew It Ralph Nader Joanne Mariner Wajahat Ali Ron Jacobs Rostam Purzal Anthony Papa Website of the Day August 20, 2008 Michael Neumann Ray McGovern Eric Walberg Fidaa Abed Daniel Haack Mike Whitney Website of the Day August 19, 2008 Paul Craig Roberts Deepak Tripathi Marwan Bishara Saul Landau William S. Lind Martha Rosenberg James Brittain Pratyush Chandra David Macaray Website of the Day August 18, 2008 Tariq Ali Gary Leupp Uri Avnery John Ross Farooq Sulehria Luis Rodriguez Manuel Garcia, Jr. Noah Baker Merrill Charles Thomson Website of the Day August 16 / 17, 2008 Alexander Cockburn Jeffrey St. Clair Deepak Tripathi Conn Hallinan Mike Whitney Robert Fantina Ray McGovern Nicole Colson Fatima Bhutto Jean-Luis Rocca David Michael Green Ramzi Kysia Dave Lindorff Lisa Martinovic Richard Rhames Don Santina Rannie Amiri Ramzy Baroud John Stanton Howard Lisnoff Ron Jacobs Seth Sandronsky Poets' Basement Website of the Weekend
August 15, 2008 Steve Niva David Remington Michael Winship Paul Craig Roberts Farzana Versey Harvey Wasserman Felice Pace Julian Critchley Website of the Day August 14, 2008 Saul Landau / Conn Hallinan Mike Whitney Reza Fiyouzat Ralph Nader Christopher Brauchli The Cheerleader in China Jack Bradigan Spula Patrick Irelan John Walsh Dan Bacher Website of the Day
August 13, 2008 Paul Craig Roberts David Remington Brian Cloughley Glen Ford Brendan Cooney Dave Lindorff Tom Lewis Stan Cox Alan Farago Martha Rosenberg Website of the Day August 12, 2008 Uri Avnery Anthony DiMaggio Bill Christison Eric Walberg Kate Connolly Diane Farsetta Peter Morici Thom Rutledge Lee Patton Niranjan Ramakrishnan Website of the Day August 11, 2008 Ishmael Reed Paul Craig Roberts Gary Leupp Douglas Kammen William Willers Greg Moses Jeff Leys Cynthia McKinney Alan Farago Website of the Day August 9 / 10, 2008 Alexander Cockburn Jeffrey St. Clair Bruce Jackson Kevin Young Chris Floyd Joshua Frank Robert Fantina Brendan Cooney Mark Almond Lois Gibbs Rev. William Alberts Kathy Kelly John Ross David Michael Green Bill Moyers / Ron Jacobs Richard Rhames David Yearsley Lee Sustar Brenda Norrell Ben Terrall Poets' Basement Website of the Weekend August 8, 2008 Patrick Cockburn Manuel Garcia, Jr. M. Shahid Alam Andy Worthington Lawrence J. Korb David Model Alan Farago Diop Olugbala Firmin DeBrabander Website of the Day August 7, 2008 Dr. Trudy Bond William Blum Paul Craig Roberts Ralph Nader Robert Weitzel Jacob G. Hornberger Binoy Kampmark David Macaray Howard Lisnoff Website of the Day August 6, 2008 Marc Herold Greg Moses Sheldon Rampton Kevin Young Michael Estrada Robert Weissman Dr. Susan Block Cindy Sheehan Ace Hoffman Website of the Day August 5, 2008 Paul Craig Roberts Jeff Halper Patrick Cockburn Nancy Welch Peter Morici Sousan Hammad Eamon Martin Shepherd Bliss Tim Matson Website of the Day August 4, 2008 Uri Avnery Saul Landau David W. Remington Rev. Jesse Jackson Dave Lindorff Peter Morici Joanne Mariner Ramzy Baroud Christian Wright Website of the Day August 2 / 3, 2008 Alexander Cockburn Jeffrey St. Clair Patrick Cockburn Winslow T. Wheeler James Abourezk Andy Worthington Brian Cloughley Robert Fantina Benjamin Dangl Marlene Martin David Yearsley Fatemeh Keshavarz David Michael Green Obama as Dukakis Harvey Wasserman Jason Hribal Phyllis Pollack Laray Polk Ron Jacobs David Macaray David Rosen Dan Bacher Joe Allen Poets' Basement Website of the Weekend August 1, 2008 Jonathan Cook Nikolas Kozloff Rannie Amiri Peter Morici Christopher Brauchli M. K. Bhadrakumar Patrick Cockburn James J. Brittain Dan Bacher Website of the Day
July 31, 2008 Michael Hudson Carl Finamore Mike Whitney Joshua Frank Andy Worthington Ralph Nader Bill Moyers / Robert Weissman Dave Lindorff Website of the Day July 30, 2008 Brian M. Downing Chuck Spinney William S. Lind David Ker Thomson Karl Grossman Mike Whitney Martha Rosenberg James Murren Dave Lindorff Ron Jacobs Website of the Day July 29, 2008 Jeffrey St. Clair John Ross Peter Morici Alison Weir Gary Leupp David Macaray Brenda Norrell Marjorie Cohn Eric Ruder Website of the Day July 28, 2008 Dr. Bryant Welch Kathy Kelly Mike Whitney Peter Morici Christopher Brauchli Clifton Ross Stephen Lendman Website of the Day
|
Weekend Edition Does the Left Have Anything to Say?ObamanomicsBy JONATHAN M. FELDMAN Barack Obama, now decrying John McCain’s definition of rich people as those earning five million or more, has a clear populist streak to his campaign. Obama notes that McCain thinks that “the economy” is doing well. But what does the term, “the economy” really mean? The term is often illusive if not confusing. Some simply misuse the expression “the economy” for their own particular ideological purposes. The ambiguities attached to the expression create problems in understanding the presidential debate. There are significant limits to what so-called “policy analysts” or “experts” have to say on the matter. This is highly significant because voters now say that the most important issue in the election is “the economy.” It is not enough to simply argue that more growth and jobs are what make a good economy, as some (like Left ecologists) debate whether or not growth in itself is a good thing. If the right is often indifferent to questions of redistribution and equality, the Left itself sometimes simply deconstructs the capitalist system. It is evil and must be transformed. But how can this be done in a way that translates into a presidential election campaign? We can rant about outsourcing of jobs and “globalization,” but what can we really do about it all? Let’s start with defining the problem of economics. It’s more than just balancing the “free market” and “the state,” supply and demand, and the markets comprised by consumers, producers and labor. Part of the “economic problem” is economics itself. In The Economics of Innocent Fraud, John Kenneth Galbraith says that in seventy years of working as an economist, he “learned that to be right and useful, one must accept a continuing divergence between approved belief” or “the conventional wisdom” and “the reality.” The latter, “reality” was “obscured by social or habitual preference and personal or group pecuniary advantage in economics and politics.” The problem of elites and their interests colors economics and distorts it. Galbraith declared that economics could in fact be “fraudulent.” One foundation for this fraud was found in “traditional economics and its teaching and some from the ritual views of economic life.” These factors not only supported the particularistic interests of individuals or groups, but also “that of the more fortunate, articulate and politically prominent in the larger community.” These interests could “achieve the respectability and authority of everyday knowledge.” Obamanomics and the Political Economy of Deficits We might translate Galbraith’s views into the kind of economic populism that the Obama campaign has sometimes embraced. Yet, we also need to do much more. We need to examine how economics and journalistic accounts of economic reality are translated into campaign reporting and investigate whatever obfuscation exists. David Leonhardt’s interesting report, “How Obama Reconciles Dueling Views on Economy,” in the August 24th edition of The New York Times Magazine, offers us a useful text for understanding what’s at stake. Leonhardt reports that “policy experts and economists” who comprise the Democratic government-in-waiting share a consensus. These “agree that deficit reduction did an enormous amount of good,” helping to “usher in the 1990s boom and the only period of strong broad-based income growth in a generation.” Obama also embraces some elements of deficit reduction in his thinking. That’s not wrong in principle. Lower deficits can strengthen the value of the dollar, making imports less expensive. Lower federal budget deficits can make it harder to justify fiscal austerity that shrinks needed social welfare, training or public investments of various kinds. Government borrowing can crowd out private sector borrowing, making investments more costly. Yet, there is something missing here. What was a principle source of the mega-deficits that Clinton tackled? If we knew what caused the deficit problem in the beginning and addressed the problem at its source, might that be better than a remedial cure after the fact? It’s strange that the deficit reduction problem is treated more in terms akin to what most doctors do than what (economic) historians are supposed to do. How is it that the medical paradigm has proven dominant, where an old fashioned exercise in cause and effect (or preventative medicine) might be far better? The answer I think is that doctors don’t usually like to ask their patients uncomfortable questions about their diet, personal habits and the like. This resulting discomfort is part of the kind of legitimacy problem that Galbraith was talking about. Economics has partially become a branch of the public relations industry. What is the embarrassing truth? A book by Wyatt Wells, American Capitalism, 1945-2000, explains that “total federal debt grew more rapidly in the 1980s than at any time since World War II.” The “Democrats blamed President Reagan’s tax cuts and defense build up, pointing out that between 1980 and 1986, in terms of percent of [Gross Domestic Product], income tax revenue fell by almost 20 percent and military outlays grew by 30 percent. This led to an increase in the deficit equal to about 3 percent of GDP.” Republicans for their part blamed increased social outlays. Wells himself argues that “at its core the deficit reflected anemic growth in productivity and income after 1973.” Wells says that if income had growth “as fast between 1970 and 1990 as between 1950 and 1970, revenue probably would have been sufficient to fund all of Washington’s obligations.” This analysis is misleading and partially misguided. One thing is that the Democrats went along with Reagan’s military budget hikes and civilian government cutbacks. The size of the civilian federal budget was too small. It allowed for pockets of hunger, homelessness, and ghettos. Reagan’s military build up was partially paid for by massive cutbacks in public housing programs and a failure to invest the billions of dollars necessary for cleaning up various environmental and social hazards—an obsolescent of means of production and transportation system wedded to polluting technologies, crumbling school buildings, and an economy segregated by race, class and gender. The Infrastructure Crisis and the Peace Dividend The infrastructure crisis can be defined by the absence of needed investments in various bridges, water pipelines, accessible mass transportation systems and other key areas considered within the realm of so-called “public goods.” Let’s not forget that in parts of the rural South (and elsewhere) the working poor have to choose between paying for food and fuel, so that starving one’s self a little makes it easier to get to work. Today, Obama says part of his infrastructure spending plan can be paid for by savings from cutbacks realized by savings from the Iraq War. Assuming he is able to fulfill such a pledge, he will still be faced with another military economy question. The economic historian Wells is right to say that deficits can be tied to anemic growth. Yet, part of the problem is that spending billions of dollars on wars and arcane weapons systems might be bad for productivity and technological innovation. There is a long standing debate about whether the military is “good” for “the economy.” The defense firms that profit from such spending are partial beneficiaries, except those companies like Grumman which were largely dismembered by a merger and consolidation wave in the 1990s that eliminated thousands of defense jobs. The diversion of hundreds of thousands of engineers into pursuing weapons innovation is regarded by some economists as a huge opportunity cost against developing needed consumer goods and various new wave ecological products like windmills and other alternative energy systems. Unfortunately, the problem of deficits has been translated by various factions of the Democratic Party into a problem of “fiscal discipline.” Others, like Robert Reich, have argued that the government should support infrastructure investments and worker training. Yet, Wells’s analysis cited above, suggests that the productive organization of the economy will promote the growth that lowers deficits. In my view this means that dramatic military budget reductions will be necessary. Moreover, if defense firms convert into civilian production, this wealth producing activity (with proper taxation policies) will further reduce deficits. Various articles by David Alan Aschauer show that infrastructure investments will increase productivity and growth. The problem is the size of such infrastructure investments. In theory, the more spent on civilian infrastructure, the more growth. Obama supports sustainable innovations and various infrastructure investments worth about $50 billion. The Iraq War may cost as much as $3 trillion. This difference has economic significance. The more money that is invested in alternative sustainable technologies, the lower their cost will be. In contrast, the more money diverted into military spending, the less funding for such sustainable pursuits. At a meeting concerned with green technology this June in Washington, D.C., I pointed out Obama’s linkage of Iraq War savings to the new monies that could be spent on alternative energy—the Iraq War peace dividend. A Congressman pointed out to me that there will be no such dividend as the war was paid for by the Chinese (among others). I knew as much, but it’s also true that if the military budget is going to be reduced to even what could be called an irrational “normal” level, then thousands could lose their jobs. Defense cuts will usually translate into job loss unless domestic defense firms make something else. If they take the moral route, they will have to convert into civilian production. Here is another role for government in the economy that most mainstream economic discourse ignores. If the government does nothing and simply cuts the military budget, there will be a post-Iraq War backlash. The money wasted on the Iraq War is tied to thousands of jobs and voters. Without government planning to help ease the transition into new jobs for the firms, workers and regions tied to what James Cypher called “the war dividend,” militarism will limit or checkmate new investment priorities. The post-Iraq War jobs transition plan can’t simply be alternative infrastructure investments plus Afghanistan War bounty. Some firms will also respond to cuts by ratcheting up their arms exports programs. This problem embraces the U.S., Russia, Israel and other nations addicted to defense spending and trying to reduce unit costs by increasing their market through overseas sales. These exports contribute to the cycle of violence we claim to be fighting in places like Afghanistan and Iraq. Some kind of multilateral disarmament planning is needed. That’s hardly on most economists’ radar. Obama, to his credit, has noted the trade off between guns and butter in various speeches centered on the Iraq War. The media, economic pundits and perhaps voters suspicious of “policy wonks” help constrain a full appreciation about the link between a new green economy and the permanent war economy. And, to make the obvious point, monies spent on a continued war in Afghanistan represent an opportunity cost against needed infrastructure spending in the United States. Aside from ethanol perhaps, the public R&D budgets and support system for needed alternative energy and mass transit systems have been rather limited. The right in the Democratic Party and Republicans see ethanol as a disaster—the limits of picking winners. Yet, a cursory review of the history of ethanol production suggests it was supported by corporatist interests, i.e. the corporations who lie behind the market. The various environmentalists, academics and isolated innovators who supported wind and solar power were largely ignored until recently. From Redistribution to Design: The Social Organization of the Economy In Leonhardt’s article, Robert Rubin acknowledges that “distributional issues are more serious now.” Leonhardt adds, that “inequality looks like a bigger problem than economic growth.” This decoupling of equality from growth is somewhat misleading. Those interests who control growth are more likely to gain wealth. The redistribution of wealth can contribute to equality. One way to do this is by manipulating taxes. That is what the Obama campaign supports and there’s nothing wrong with that. Yet, while tax reform is an important strategy (and an acceptable discourse), it can be partially reactive. One can also promote redistribution by redistributing the ownership of firms, by changing the quality of the supply of jobs, and by democratizing capital investments. The first strategy of ownership redistribution can build on the bipartisan support that already exists in the tax code that supports worker owned firms through Employee Stock Ownership Plans (ESOPs). ESOPs are not cure alls. Such ESOPs can sometimes be part of bail outs of failing companies, tie workers to the global market that makes wage reductions necessary, or simply reward high paid executives and upper strata workers. Yet, today as Seymour Melman noted, capital or corporate firms are “abdicating the organization of work.” That often means if you can’t organize your own job (for which you need stronger unions and often ownership), you won’t have a job. Obama supports stronger unions, but with capital flight and global mobility of jobs even strong unions are insufficient. Or let’s think about it another way: even middle class African and Latino Americans can lose their jobs through global outsourcing, the restructuring of middle class jobs, and the relocation of bank jobs to China and India. So even affirmative action, tax cuts and retraining into a new economy job are not enough. In one of his books, Obama says that African American controlled small businesses can’t compete with global networks defined by scale economies. That’s a fair point. Yet, established economists don’t really talk about linking socially responsible or worker owned firms to global networks. Established business professors talk about “core capacities” and linking scale economies to narrow niches. They say this while highly diversified firms like Mitsubishi beat up their one dimensional American counterparts or supply goods like propulsion systems for mass transit markets that have no American suppliers. So much for U.S. global reach and scale economies. Being big has not meant being smart. Manipulating markets does not in itself create and organize domestic work to serve those markets. Market incentives to promote innovation can add to jobs, but as I’ll show the large scale manufacturing success stories often depend on more than market tinkering. Leonhardt says with Obamanomics “there would be Reich-like investments in alternative energy, physical infrastructure and such, meant both to create middle-class jobs and to address long-term problems like global warming.” That sounds good, but let’s consider Thomas L. Friedman’s question to a recent panel on plug in electric vehicles organized by the Brookings Institution and Google (to paraphrase): “Will all the electric cars simply be made in China?” The only way to limit that possibility is by supporting industrial policies that reward Detroit in making the right technological choices and by democratizing some of the firms organizing the jobs. Government will have to use its procurement leverage to promote socially responsible and domestic investments in the green economy. Procurement power should also be used to strengthen the pockets of unionized industrial workers and firms. That’s what happens in Canada when municipalities (like Toronto) reward the domestic (Canadian) subway industry with contracts, i.e. local content provisions just like the Chinese use in China. If you think the government can’t pick winners, then look at Detroit’s miserable choices in technology that are now killing Ford and GM. Mainstream economists who say the government “can’t pick winners,” can not face the reality that some private companies “can’t pick winners.” They say that the market absorbs the costs of its failures, except when it comes to the big banks and investment houses who seem to define the limits of acceptable discourse. A bureaucrat in Washington who simply copied Toyota and issued orders to the Big Three would do far better than these managers (not that I support such Gosplan-type, top-down planning). If workers control their jobs, they won’t likely outsource them. In sum, the social control of the economy is just one of those Lefty policy wonk realities that is hard to sell politically but likewise hard to deny. Mainstream journalists and their media corporate employers can help regulate the boundaries of acceptable discourse. Leonhardt says that during the primaries Obama “pandered” in the direction of “trade barriers.” That is the only time in his article that he uses this charged word. At no other time did Obama “pander.” Trade barriers have been embraced by President Bush and countless other politicians, but are supposed to be an evil that constrains global trade. That’s an interesting view. Leonhardt notes that “as Europe’s regulated economies have struggled and Asia’s move to capitalism has spurred its fabulous boom, many liberals have…come to appreciate the virtues of markets.” In the Chinese, Taiwanese, and South Korean cases we know that the boom and growth was tied to various actions by both government agencies and assorted networks or structures beyond the market and state. Industrial policy and regulation were often, but not always, keys to growth. Yet, the “Asian miracle” is miraculously called a miracle of markets. The work of Bennett Harrison and Alice Amsden, among others, shows that this was not so. In contrast, European countries like Sweden and Finland have done relatively well by combining welfare states, government support of retraining and R&D, with high growth economies. High taxes did not limit growth. Government regulations, linked to Nordic specifications for mobile telephony for example, actually helped spur companies like Nokia and Ericsson. In the case of the Swedish-based Ericsson, Televerket (a quasi-governmental phone company) was a critical partner firm that was actually a key to the Swedish telephonic giant’s growth. None of this matters, however, because it does not fit into the mantra: markets are pro-growth and government and taxation are not. Obama writes in his second book, that “Reagan’s central insight—that the liberal welfare state had grown complacent and overly bureaucratic, with Democratic policy makers more obsessed with slicing the economic pie than with growing that pie—contained a good deal of truth.” Leonhardt writes that Obama’s “policies often involve setting up a government program to address a market failure but then trying to harness the power of the market within that program.” These observations contain some truth, but also a potential source of confusion. It’s true that if Democrats had supported economic cooperatives, ecologically sustainable firms, and democratic industrial development banks then they might have done far more good than redistributive programs that do nothing to increase the size of the economic pie. Yet, the notion that “growth equals markets” is simply wrong as I have shown. There is no homogeneous market. Markets can fail or succeed. The rhetoric about markets is useful ideological cover. One can’t blame a candidate for using the language, but any candidate should make sure that they don’t get burned later on by embracing the fallacies tied to the lingo. Market Failure as a Failure of the Political Market Some say that we can’t afford to cut the military budget because of Russian imperialism and terrorism. Even if we ignore Bush’s provocations, the war hawk economists assume that more money spent on defense brings us more security. Military jets that create environmental hazards through their fuel or bombing campaigns also terrorize civilians and drive them into the fundamentalist camp and counter-military terror moves. But, even if we reject that view, there is an unspoken problem that looms larger. The Pentagon has failed to really defend us in key ways. This relates to a big failure in government that is rarely talked about these days. It’s not an election issue and it’s really too big to ignore in the long run. It has to do with how the military part of the State is robbing civilians. Recent books by Seymour Melman (After Capitalism, published in 2001) and Ishmael Hossein-Zadeh (The Political Economy of U.S. Militarism, published in 2006) should be required reading for the Obama campaign. Both books tell the story of hundreds of billions of dollars that the Pentagon can’t even find: “According to some estimates we cannot track $2.3 trillion in transactions,” then Secretary of Defense Donald Rumsfeld told reporters on September 10, 2001. Hossein-Zadeh notes that that sum was equivalent to “$8,000 for every man, woman, and child in the nation.” The sloppy accounting is tied to members of Congress who have been more concerned with Pentagon pork than fiscal responsibility in the view of seasoned observers. Hossein-Zadeh also explains that “the major bulk of weapons procurement is done without competitive bidding; it is often done through negotiation between Pentagon contractors and a high-ranking military official, a general or a colonel.” Contracts initially are bid at low sums to win over government skeptics. Then, costs are often inflated without fear of Pentagon sanctions. There’s no free market in all this. Hossein-Zadeh describes how military contractors “often do business in government-owned land or in government-owned buildings and facilities free of charge.” These companies don’t “pay for the government-owned machinery and equipment or other infrastructure facilities when they use them in their process of production.” If all this is in the interest of national security, we might ask ourselves what happened on 9-11 or why the Iraq War has worsened the terrorist threat according to various intelligence agencies. An Iraq War that could cost $3 trillion. $2.3 trillion that can’t be accounted for. It’s a lot of money that the economists have little to say about, even as the industrial belt in Ohio, Michigan, Wisconsin, New York State and other key presidential battlegrounds is rotting. Some of the money may have shown up in these states’ factories. Most went to military dependent regions in California and the South that face periodic droughts and can’t transport their population from home to work in a sensible way. It’s all a question of politics and how the economy is organized. Strangely enough, to understand our present dilemmas we have to forget about many a contemporary economist and instead embrace some of the key notions developed during the 1940s, 1950s and 1960s by writers like Paul Goodman and C. Wright Mills. They examined the emerging economic and social structures within the bureaucratic state and firm, and saw the resulting limits to the economic and political sphere. These thinkers were marginalized by the established academy and its discourses. In his biographical study of C. Wright Mills, Stanley Aronowitz says that Mills became a pariah when he made power elites and not pluralism the center of his argument. Dozens of academics wrote about Mills, but usually rejected his views. No matter, both Goodman and Mills embraced the kind of critical argument that Galbraith saw was missing in much contemporary economics. It’s not enough to say, as Leonhardt and Democratic Party reformers do, that firms sometimes succeed but sometimes fail (and have to be regulated as a result). The problem is that markets have to be designed. There are good designs and bad ones. Sometimes the key designers work in the government, sometimes they are consumers and other times producers. It’s far more important to discuss the designs of markets than to discuss the abstract trade offs between too much government and too little markets. The realm of designers includes not just business persons or economists but also philosophers, political scientists, consumer groups, professional trade associations, politicians, architects, artists, etc. Paul Goodman, in an essay called “Prudent Technology,” wrote that: “Whether or not it draws on new scientific research, technology is a branch of moral philosophy, not of science. It aims at prudent goods for the commonweal, to provide efficient means for these goods.” The status quo economists don’t understand Goodman’s argument or care to consider its implications. For example, Leonhardt notes: “What tends to distinguish Democratic economists is that they set out to uncover imperfections of the market and then come up with incremental, market-based solutions to these imperfections.” For example, the cap-and-trade program uses all kinds of market systems to create a market price for pollution and gives firms the incentive to trade pollution rights. This is a far cry from redesigning firms so that they don’t pollute in the first place. Where is the right we might have to have zero emissions? In various books, like Making Peace with the Planet, Barry Commoner long ago argued that pollution prevention was the cure to the ecological crisis and that cure required redesign of the “ecosphere.” We have used the market to export pollution to China and India, a kind of ecological imperialism that many mainstream economists think is just dandy. The failures of the market are all shaped by questions and problems of power. They are tied to the absence or weakness of regulations and regulators, the limited imagination and greed of top corporate planners who couldn’t make a sustainable and smaller-sized car quickly enough, and the limited number of firms who have taken the “high road” in reorganizing worker to gain productivity advantages through workers’ participation and control. The failure and breakdown of anti-trust provisions and practices, justified by global competition, simply fuels the fires of stupidity, greed and short term thinking. Ralph Nader has brought some of this into the margins of presidential campaign discourse. The political design of markets (and the firms who comprise them) is the obvious question that is ignored. This question centers on what can be said about who can and should design markets, who benefits from the policies of incumbent market designers, and the potential role for non-market forces in the social economy. This expression refers to the larger economic sphere that can be organized by governments, cooperatives and socially responsible firms as well as the ignored actors Goodman had in mind. What C. Wright Mills called The Power Elite is now tied to a series of institutions that are jeopardizing the whole fabric of American society. The culprits include: banks that serve as loan sharks, firms that take the form of what Reich once called “casino capitalists,” companies that don’t produce but serve as trade reps for the Chinese, schools that don’t teach critical thinking but blind subservience, governments that waste taxes and budgets on military adventurism, and other exemplars of what can best be called, an emerging “Fifth Column Society.” In the old days we had racism, sexism, inequality and war. Today, we have those things, but even those who were supposedly co-opted into the system (like industrial workers and middle class professionals) are being rejected by the elites through outsourcing and deindustrialization. The politics of the design of institutions has become more central than ever. The language of Goodman and Mills is key. As an example, we’re told that automation and new technologies destroy jobs, but the central role of a rational and socially responsible banking and productive industrial system in holding up the economy is ignored. The mantra is that everything is cheaper in China and India or former Eastern European nations that are part of the global labor force. That is true for sure. Yet, how historically have wage rates been taken out of competition? One way is through automation that led to productivity enhancing investments where the resulting profits were partially used to reinvest in “upskilling” the domestic workforce (see Seymour Melman, Profits without Production, 1983). Many firms don’t do that any more. Instead, they use technology to destroy jobs or move them. One key exception to this job destroying pattern can be seen in networks of progressive firms where the network is more loyal to labor than capital. In the Mondragon network of cooperatives in Spain, productivity gains have been used to generate profits and jobs directly within the network. The design of the network, not the market or the state, requires that corporate wealth is translated directly into investments within the networks’ banks, laboratories and retraining program. There are no plundering intermediaries to waste the workers’ treasure. Japanese firms also did some of this before they succumbed to the greed of globalization and parasitical global capitalism. Also, don’t forget that in an industrial enterprise manufacturing costs can be as small as 40 percent of the selling price and of that direct labor costs can be something like only twelve percent of these manufacturing costs (see JT: Black, The Design of the Factory with a Future, 1991, page 14). Quality improvements, delivered to a segment of cost indifferent consumers, can often be far more important than cheap labor and goods. With growing sustainability consciousness, many disposable Walmart goods will prove to be things of the past. To fully benefit from such a paradigm shift, business schools, engineering programs, federal R&D initiatives, and future entrepreneurs will have to get smart fast. The acceptable wisdom will doom both economy and ecosphere. The boundary conditions shaped by mainstream economics often result in a failure to consider national security questions as economic problems. In Leonhardt’s article, Lawrence Summers, the leading Democratic economist famous for his own endorsement of ecological imperialism, notes that “we’re not looking so good on infrastructure and education.” He means that “we” are doing a better job in addressing problems the market can solve rather than those it can’t. The problem, here, is that when I asked Summers at a conference over a decade ago why he didn’t embrace Seymour Melman’s ideas about cutting the military budget and investing in infrastructure (in contrast to his then notion that the problem was that Americans did not save enough), he simply suggested that Melman was some kind of a quack who didn’t understand economics. Again, how will we pay for the infrastructure at the rate at which the investments (in the trillions not billions) are needed? If Summers represents the kind of economist who likes to divorce economic security from national security, there are others who divorce economics and national security itself from energy and environmental security. Every investment in wind power and solar energy is going to strengthen the United States in economic, national security and ecological terms—far more than an anti-ballistic missile. Fortunately, Obama has understood some if not much of this, acknowledging that our GNP statistics are limited. He consistently links sustainable investments and military budget reductions. Obama is right to tax the rich, to support ecological infrastructure and to have suspicions about big government bureaucracy. He’s competing against a media and Republican candidate whose ideas are outmoded and often dangerous. The voters are not always sympathetic to his most progressive ideas. Yet, if his presidency, and perhaps campaign, is to succeed, he will have to go far beyond the proscriptions of accepted Democratic Party economists and pundits. One senses that some of his policy wonks are wrong headed. I understand that by picking some established wonks, like Rubin, Obama sends a signal to parts of the power elite who help his campaign. Yet, one can drown in a sea of pro-establishment wonks—the ability to reach suffering voters will be diminished. Obama gets economic populism and in his books, he’s talked about “the elites.” Yet, he will eventually have to do more. Every region that has been screwed over by Bushanomics is associated with data that can easily be documented. One could easily create a regional video almanac showing the failures of this Administration in every state in the union. Obama will not only have to address the conversion problem of a permanent war economy, but he will also have to discuss who has power in the civilian economy. He won’t be able to limit his argument to the equation that tax cuts will stimulate the economy when such cuts can easily be used for an increasing range of imported goods and services (including high end jobs in banks and programming). The manipulation of markets will not in itself organize production, ownership and designs in a way that it is either socially equitable or even economically productive for the domestic economy, i.e. jobs, wealth distribution and ecological outcomes. The big bucks questions, of run away military budgets and waste, suggest that if Obama wants to take up the mantle of President Kennedy he will have to look at his ideas about the structure of an alternative international relations system. Obama can start with Kennedy’s famous American University address (on June 10, 1963) where the President talked about the limits of the arms races and the benefits of disarmament. This Kennedy, reflecting some of the ideas of John Kenneth Galbraith, is one both journalists and economists have buried. Here’s a discourse that is worth studying. Where is the mechanism to link Obama to these far sighted ideas? As I have suggested elsewhere, it is partially up to us. We have to redesign our own movements so that they extend their reach into the millions but also hold any potential reformer like Obama accountable to the alternatives considered here. We also have to strengthen his hand on issues we care about. Otherwise, left wing economic ideas will be summarily ignored—just as they pretty much were in the last cabinet in which Robert Reich served. Jonathan Feldman is an Associate Professor at the Department of Economic History at Stockholm University. He is a member of the Economic Reconstruction network (www.economicreconstruction.com).
|
Now Available from The Inside Story of the Shannon Five's Smashing Victory Over the
RED STATE REBELS:
Edited by  Buy End Times Now! CounterPunch Books of the Crossroads: HOW THE IRISH INVENTED SLANG By Daniel Cassidy AMERICAN BOOK AWARD!  Click Here to Buy! Click Here for Dates & Venues Michael Neumann's Devastating Rebuttal of Alan Dershowitz  Click Here to Buy! Saul Landau's Bush and Botox World with a Foreword by Gore Vidal  Click Here to Order! How They Made a Killing on the War on Terrorism     
    
 
 Humanitarian Imperialism By Jean Bricmont               CITY BEAUTIFUL By Tennessee Reed                   |
