Portrait of a modern-day plutocrat: Larry Ellison, CEO of Oracle

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By Julien Kiemle
22 April 2014

Earlier this month, the data firm Equilar published its list of the highest paid CEOs for 2013. The report paints a picture of vast inequality, with extraordinary sums being paid to a tiny layer of the population. Pay for the top-earning 100 CEOs in the US increased by 9 percent last year, to $13.9 million a piece.

Topping the list was Larry Ellison, the CEO of Oracle Corporation, a man who exemplifies the social character of the ruling class and its manner of wealth accumulation.

Ellison’s total compensation for 2013 was $78.4 million, almost all of it in stock options. For the eight years that Equilar has tracked executive compensation, Ellison’s cumulative pay was $582 million, almost $83 million more than the runner-up, Tim Cook of Apple. His pay in 2013 was more than double that of the runner-up for that year, CEO Bob Iger of Walt Disney Company, paid $34.3 million.

Ellison’s pay was actually down $18 million from its high in 2012, perhaps a reflection of the slowing performance of Oracle’s stock. Ellison’s wealth consists largely of real estate, and his fortunes have been amassed primarily through the medium of the stock market—a practice that has become pervasive among the ruling class since the 1980s, and vastly accelerated by the policies of the Federal Reserve.

Indeed, Ellison is one of the intended beneficiaries of the Obama administration’s policy since the 2008 crash, which has consisted of making available an unlimited stream of cash to the financial system. The stock market has soared as a result, even as pay for the vast majority of the population has stagnated or declined, and unemployment remains at catastrophic levels.

Oracle Corp. is a developer of business software, such as supply chain management and enterprise resource planning, founded by Ellison and Bob Miner. One of the famed Silicon Valley startups, the company is now a tech giant, with revenues second only to Microsoft in the world of software development.

Ellison runs his company as something of a despot, even over its shareholders. Though Ellison himself owns only about a quarter of the company’s stock, their votes to roll back his pay package in two consecutive years were offered as nothing more than nonbinding suggestions, and promptly ignored.

Nominal management of the company has catapulted Ellison up the ranks of the super-rich. He is now the fifth-wealthiest person in the world, with a personal net-worth of about $50 billion. Ellison is a personification of the obscenity of contemporary capital accumulation, the object of a fawning media and his fellow aristocrats. A New York Times feature on the CEO recently proclaimed, “It is good to be the king. It is even better to be Larry Ellison.” In this they have surely not exaggerated.

Oracle’s CEO is well-known for his egomaniacal and costly pet projects. His recent sponsorship of the America’s Cup race in San Francisco at a cost of $100 million is a small expense compared with some of his previous undertakings, such as spending $250 million to buy up a third of Malibu.

In 2004 he commissioned a gargantuan custom “superyacht” for $377 million, and his 2012 purchase of the sixth-largest island in the Hawaiian chain, Lanai, was paid for with between $500 million and $600 million—cash. He continues to make changes and “develop” the island as a “model for environmentally sound living.”

Frugal in his own way, Ellison managed to cheat San Mateo County out of $3 million of property taxes by arguing that one of his mansions, an imitation of a Japanese Shogun estate, was “functionally obsolete” and worth hundreds of millions less than he paid for it. As a result, the public school system lost some $1.4 million in tax dollars.

Like many billionaires of his type, he gives freely to both political parties, including some of the most influential figures at the national level, such as Democratic Party House Majority Whip Kevin McCarthy and former Senator, now Secretary of State in the Obama administration, John Kerry.

Breaking down Ellison’s pay on the assumption of a 40-hour workweek means that the CEO makes more in an hour ($37,692.31) than a typical worker is likely to in a year—paying the much lower capital gains tax rate on almost all of it.

The tragedy of this spectacle hardly needs to be pointed out, when 12.5 percent of the globe’s population sits on the cusp of starvation. In the United States, Ellison’s home, a third of Americans experienced “poverty” in its narrow official definition between 2009 and 2011.

In a period when the most basic forms of assistance to the working class—food stamps, unemployment insurance, education, health care, nurturing of culture—are being systematically dismantled to free up resources for the accumulation of capital by the aristocracy of finance, the likes of Oracle Corp.’s “king” are the incarnation of reaction all down the line.

In the early years of Oracle, possessing a fortune several orders of magnitude smaller than today, Ellison invited the company’s co-founder Bob Miner to come along with him for a joyride on a hired fighter jet. Miner wrote back, perhaps more prophetically than he intended, “You obviously have far more money than you should. It’s things like this that caused the French Revolution.”

What goes for Ellison goes for the social layer of which he is a particular expression. Drunk on wealth, their relationship to society as a whole is fundamentally parasitic. They sit atop a social power keg—not unlike the aristocracy of the ancien regime. And similar causes produce similar effects.

Chicken Little and Inequality

Too Much
THIS WEEK
Folks who find themselves rich — and getting richer — typically tend to react psychologically in one of two ways. They can either see themselves as incredibly fortunate or incredibly deserving.

Those rich who come to see the luck in their lives also usually come to understand that they have no more talent — and work no more diligently —  than plenty of people who hold not much wealth at all. Those among the rich who see their wealth as a well-deserved reward, on the other hand, often come to see those without wealth as undeserving — of anything except contempt.

The latest sign of that contempt: The rush by localities to criminalize sleeping in cars. Communities where the wealthy predominate — like Palo Alto in Silicon Valley — have been particularly eager to do this criminalizing. Palo Alto last year had over 12 times more homeless people than available shelter beds.

We have housing meanness in America today. We also have housing madness. This week’s Too Much has a bizarre example of the latter. And lots more, too.

GREED AT A GLANCE
Last year’s congressional “fiscal cliff” deal raised the tax rate on ordinary income over $450,000 from 35 to 39.6 percent — and the tax on capital gains from 15 to 20 percent. On paper, taxpayers making over $2.6 million a year — America’s top 0.1 percent — should now each be paying about $232,000 more in federal taxes this year than last. In real life, many may not. The reason: Federal budget cuts have left the IRS, the Associated Press reports, with “fewer agents auditing returns than at any time since at least the 1980s.” IRS funding this year has dropped 7 percent. Last year the agency audited only 10.9 percent of taxpayers with over $1 million in income. This year’s audit rate, IRS chief John Koskinen acknowledged last week, will run lower. That will mean that “some people we should catch,” says Koskinen, “we’re not going to catch.”

Lee ScottThey pay Yahoo CEO Marissa Mayer the big bucks — $24.9 million last year — to make the big decisions. Mayer two years ago decided to hire Henrique De Castro to overhaul her stumbling company’s operations. De Castro, Mayer led everyone to believe, “had a unique set of highly valuable skills and experiences.” Fifteen months later, after still more corporate stumbling, Mayer gave Mr. Unique the heave-ho. De Castro is walking away, Yahoo has just disclosed, with $58 million in severance. Shareholders seem none too happy about that. Mayer’s answer? To calm down anger over Yahoo’s executive pay giveaways, she’s bringing on to the Yahoo board H. Lee Scott Jr., the retired Wal-Mart CEO. In his last year as Wal-Mart’s chief, Scott took home $30.2 million, over 1,500 times average Wal-Mart worker pay . . .

For generations, the Guardian reported earlier this month, “fine dining” has meant “haughty waiters, hushed rooms, starched table linen, and endless interruptions to pour wine and water.” But celebrity chefs these days are going casual. At the UK’s uber trendy House of Tides, for instance, Michelin-starred chef Kenny Atkinson has “dispensed” with “hovering waiters” — and has diners pouring their own wine.  And no fancy-pants dress code either. Atkinson doesn’t mind if people come dressed in jeans: “Their money is as good as anybody else’s.” Any diners in jeans will need, of course, to bring plenty of the money Atkinson so prizes. His tasting menu starts at $92.

Quote of the Week

“Even in this era of extreme partisanship, broad bipartisan agreement supports an agenda that helps the wealthy — including austerity budgets, free trade, big bank bailouts, and policing the world. Big Oil, Big Pharma, Big Agra, the health insurance industry, and Wall Street deploy legions of lobbyists to make it clear that messing with them costs dearly.”
Robert Borosage, Populism? Where are the pitchforks? April 16, 2014

PETULANT PLUTOCRAT OF THE WEEK
Howard LutnickRecreation? Howard Lutnick, the CEO at high-finance power Cantor Fitzgerald, can’t get enough of it. The 40-acre Hamptons estate he bought back in 2003 — at a cost of $56 million — came with a swimming pool, spa, and tennis court. Lutnick moved quickly to add a basketball court and a barn big enough to house an equestrian team. But three different zoning and planning boards refused to grant the permits for Lutnick’s additions. The chief exec then sued the boards — and all their individual members — for $56 million in damages. Wall Streeters who frolic in the Hamptons every summer, one of those sued noted last week, “don’t like to be told what you can or can’t do.” Lutnick’s lawsuits, he added, amount to an attempt at “’intimidation plain and simple.”

IMAGES OF INEQUALITY
Huguette Clark mansion

Get the dust mops ready. This French-style chateau in Connecticut’s New Canaan has gone empty the last 60-odd years. But fashion designer Reed Krakoff has just picked up the 52-acre estate for a relative song, a mere $14 million. The manse went on the market after the 2011 death of the long-time owner, Hugette Clark, the 104-year-old copper heiress. Clark had bought the manse in 1951 as a refuge in case the Russkies ever threatened to drop an atom bomb on her Manhattan isle home. She never moved in. She never even furnished the place.

Web Gem

Populist Majority/ This Campaign for America’s Future site tracks poll data to show that Americans remember when we shared our prosperity and want that America back.

PROGRESS AND PROMISE
PayWatch siteWith vivid graphics and first-person worker testimonials, the 2014 edition of the AFL-CIO’s online PayWatch is putting some needed new pressure on executive pay excess. CEOs at companies listed in the S&P 500, the labor site calculates, took home 331 times the pay of average American workers last year — and 774 times the take-home of minimum-wage workers. The backdrop for this gap: Corporate profits in 2013 — for the nation’s top 500 corporations — averaged $41,249 per employee, a 38 percent jump over the profit level in 2008. If the minimum wage had kept up with top 1 percent income gains since 1968, adds the new PayWatch, minimum-wage workers would now be making $31.45 per hour.

Take Action
on Inequality

At the new PayWatch site, Americans working at major firms can compare their pay to their CEO’s compensation — and CEO pay in their state. Spread the word and help build the charge for a smaller corporate pay gap.

inequality by the numbers
real wages since peak years

Stat of the Week

Oracle CEO Larry Ellison leads the latest New York Times list of America’s most highly paid CEOs. Ellison makes more per second, notes analyst Deborah Meier, then the current federal hourly minimum wage.

IN FOCUS

Why Our Sky Sometimes Does Start Falling

You don’t have to be a rocket scientist to be able to demonstrate the link between inequality and catastrophic environmental change. But a little help from rocket scientists can certainly help.

The sky, we all learn as children, is not falling — and never falls. Only silly Chicken Littles prattle about “precipitous collapses.”

Only silly Chicken Littles, apparently, and applied mathematicians.

One of those mathematicians, the University of Maryland’s Safa Motesharrei, has joined with two colleagues to publish a new paper that sees the “precipitous collapse” of our global order as a distinct possibility.

In fact, the three conclude, that possibility will become a hard-to-avoid probability unless the world becomes a far less unequal place.

Motesharrei and his fellow researchers — University of Maryland meteorologist Eugenia Kalnay, a former Goddard Space Flight Center exec, and University of Minnesota political scientist Jorge Rivas — reached that conclusion after running “a range of hypothetical scenarios” through an innovative model developed with funding support from NASA, America’s space agency.

Scientists at NASA usually spend their time looking up at the heavens. The investigators behind this new study kept their focus distinctly earth-bound.

Sophisticated human civilizations, the three investigators point out, have in the past collapsed and on a fairly regular basis. The Romans broke down, as did the Han in China and the Gupta in India, the Maya in Central America, and a variety of Mesopotamian civilizations.

These collapses, Motesharrei and his collaborators note, naturally raise the question whether we today remain “similarly susceptible.” Or can our modern civilization, with all our “greater technological capacity, scientific knowledge, and energy resources,” survive whatever did in our sophisticated predecessors?

And what did do in these predecessors? In previous collapses, we see some similar patterns. The doomed societies overextended themselves environmentally. They depleted their natural resources at an unsustainable pace — and failed to see, despite their sophistication, the warning signs of their impending implosion. They soldiered on, oblivious to the danger.

Or rather, to be more precise, the elite movers and shakers of these societies soldiered on. In deeply unequal societies, elites seldom feel the strain and pain that environmental degradation engenders — until that degradation has gone too far to reverse.

This “buffer of wealth,” as the Motesharrei team puts it, “allows elites to continue ‘business as usual.’”

Could we go down the same clueless path? The Motesharrei study explores that question with “the first model of its kind that studies the impacts of inequality on the fate of societies.” Under conditions “closely reflecting the reality of the world today,” the study finds an eventual collapse “difficult to avoid.”

Difficult but not impossible. We can avoid collapse, the Motesharrei paper notes, if we reduce the “per capita rate of depletion of nature” to a “sustainable level” and start distributing resources in a more “reasonably equitable fashion.”

For specifics on what that would actually mean in practice, we need to look elsewhere. The new Motesharrei paper soars at a theoretical level and offers no practical roadmap to a more sustainable and equal society.

Other analysts have made that effort, no one more so than Herman Daly, the former World Bank senior economist now widely considered the founding father of ecological economics.

Daly and his colleagues have been calling for a “steady-state economy” that acknowledges the limits of our physical world. We can’t go on, they contend, endlessly depleting our stocks of natural resources and polluting the world with the wastes from our resource exploitation.

“We need,” says Daly, “to build the physical constraints of a finite biophysical environment into our economic theory.”

And into that theory, he adds, we need to build justice, too. This past fall, Daly spelled out ten specific steps that could help us push back against our current unsteady state. Among them: “Limit the range of inequality in income distribution with a minimum income and a maximum income.”

“Rich and poor separated by a factor of 500,” Daly observes, “have few experiences or interests in common.”

Maybe not even, the new Motesharrei study suggests, avoiding a cataclysmic environmental collapse.

New Wisdom
on Wealth

Matt Taibbi, The Super Rich in America Have Become ‘Untouchables’ Who Don’t Go to Prison, Democracy Now! April 15, 2014. Our income gap reflects a “justice” gap.

Susan Holmberg, The Pay’s the Thing: How America’s CEOs Are Getting Rich Off Taxpayers, Next New Deal, April 16, 2014. The price we pay for tolerating the performance pay loophole.

Robert Reich, Antitrust in the New Gilded Age, April 16, 2014. America is facing the same concentrations of wealth and economic power that endangered democracy a century ago.

Howard Steven Friedman, American Inequality: Ticking Time Bomb, Huffington Post, April 17, 2014. Plutarch had it right: An “imbalance between rich and poor” remains our most “fatal ailment.”

Floyd Norris, Merely Rich and Superrich: The Tax Gap Is Narrowing, New York Times, April 17, 2014. A step toward a tax policy less hostile to work.

Will Hutton, Extravagant CEO pay doesn’t reflect performance, it’s all about status, Observer, April 19, 2014. We now live in an era of “conspicuous executive pay,” only understandable as a social phenomenon because its excess has ceased to have any economic logic.

Zoë Carpenter, Will Phony Populists Hijack the Fight Against Inequality? Nation, April 21, 2014. Plenty of top Dems are still arguing that wealth’s concentration doesn’t really matter.

The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class cover

Barbara Ehrenreich, Gar Alperovitz, and Jim Hightower would like you to read this book. Read this excerpt online and check out more details.

NEW AND notable

Do Americans Still Live in a Real Democracy?

Martin Gilens and Benjamin Page, Testing Theories of American Politics: Elites, Interest Groups, and Average CitizensPerspectives on Politics, forthcoming Fall 2014.

America’s political scientists have been arguing for generations over who really runs the United States. Do Americans have a democracy where the people rule? Or something else? Do American citizens, as political scientists Martin Gilens and Benjamin Page ask in this blockbuster new paper just published online, rate as “sovereign, semi-sovereign, or largely powerless”?

Gilens and Page, distinguished professors from Princeton and Northwestern, give a surprisingly chilling response to that question, based on their analysis of “a unique data set” that culled responses to 1,779 policy questions pollsters asked between 1981 and 2002.

The researchers crunched this set of response data by income level and then probed to see whose policy preferences actually prevailed.

“Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy,” they conclude, “while mass-based interest groups and average citizens have little or no independent influence.”

One analyst is already calling this new Gilens-Page paper “the first-ever scientific study” of the question whether the United States can rightfully claim to be a democracy. Gilens and Page, for their part, pull no academic punches.

“Our analyses suggest that majorities of the American public,” the pair write, “actually have little influence over the policies our government adopts.”

The nation, the scholars note, does sport “many features central to democratic governance,” everything from elections to freedom of speech and association.

“But we believe that if policy making is dominated by powerful business organizations and a small number of affluent Americans,” they go on to add, “then America’s claims to being a democratic society are seriously threatened.”

Google: the unelected superpower

Google has cosied up to governments around the world so effectively that its chairman is a White House advisor
Google Glass, smart glasses under development by Google are seen in handout photo

If Google Glass is widely adopted, it will be able to clock everything we see Photo: Reuters

Researchers at Princeton and Northwestern universities have pored over 1,800 US policies and concluded that America is an oligarchy. Instead of looking out for the majority of the country’s citizens, the US government is ruled by the interests of the rich and the powerful, they found. No great surprises there, then.

But the government is not the only American power whose motivations need to be rigourously examined. Some 2,400 miles away from Washington, in Silicon Valley, Google is aggressively gaining power with little to keep it in check.

It has cosied up to governments around the world so effectively that its chairman, Eric Schmidt, is a White House advisor. In Britain, its executives meet with ministers more than almost any other corporation.

Google can’t be blamed for this: one of its jobs is to lobby for laws that benefit its shareholders, but it is up to governments to push back. As things stand, Google – and to a lesser extent, Facebook – are in danger of becoming the architects of the law.

Meanwhile, these companies are becoming ever more sophisticated about the amount of information they access about users. Google scans our emails. It knows where we are. It anticipates what we want before we even know it. Sure there are privacy settings and all that, but surrendering to Google also feels nigh on impossible to avoid if you want to live in the 21st century. It doesn’t stop there either. If Google Glass is widely adopted, it will be able to clock everything we see, while the advance of Google Wallet could position the company at the heart of much of the world’s spending.

One source at the technology giant put it well when she referred to the company as an “unelected superpower”. I think this is a fair summary. So far, we are fortunate that that dictatorship is a relatively benign one. The company’s mantra is “do no evil”, and while people may disagree on what evil means, broadly speaking, its founders are pretty good guys. But Larry Page and Sergey Brin will not be around forever. Nor should we rely on any entity that powerful to regulate its own behaviour.

The government in America, and its counterparts around the world, should stop kowtowing to Google and instead work in concert to keep this and any other emerging corporate superpowers firmly in check.

The Rise of the Digital Proletariat

In open systems, discrimination and barriers can become invisibilized,’ says author and activist Astra Taylor. (Deborah DeGraffenreid.)

Astra Taylor reminds us that the Internet cannot magically produce revolution.

BY Sarah Jaffe

It really challenges the notion that we’re all on these social media platforms purely by choice, because there’s a real obligatory dimension to so much of this.

The conversation about the impact of technology tends to be binary: Either it will save us, or it will destroy us. The Internet is an opportunity for revolution; our old society is being “disrupted”; tech-savvy college dropouts are rendering the staid elite obsolete. Or else our jobs are being lost to automation and computers; drones wipe out families on their wedding day; newly minted millionaires flush with tech dollars are gentrifying San Francisco at lightning speed.

Neither story is completely true, of course. In her new book, The People’s Platform: Taking Back Power and Culture in the Digital Age, out now from Metropolitan Books, Astra Taylor takes on both the techno-utopians and the techno-skeptics, reminding us that the Internet was created by the society we live in and thus is more likely to reflect its problems than transcend them. She delves into questions of labor, culture and, especially, money, reminding us who profits from our supposedly free products. She builds a strong case that in order to understand the problems and potentials of technology, we have to look critically at the market-based society that produced it.

Old power dynamics don’t just fade away, she points out—they have to be destroyed. That will require political action, struggle, and a vision of how we want the Internet (and the rest of our society) to be. I spoke with Taylor about culture, creativity, the possibility of nationalizing Facebook and more.

Many people know you as a filmmaker or as an activist with Occupy and Strike Debt. How do you see this book fitting in with the other work you’ve done?

Initially I saw it as a real departure, and now that it’s done, I recognize the continuity. I felt that the voices of culture makers were left out of the debate about the consequences of Internet technology. There are lots of grandiose statements being made about social change and organizing and about how social media tools are going to make it even easier for us to aggregate and transform the world. I felt there was a role I could play rooted in my experiences of being a culture maker and an activist. It was important for somebody grounded in those areas to make a sustained effort to be part of the conversation. I was really troubled that people on all sides of the political spectrum were using Silicon Valley rhetoric to describe our new media landscape. Using terms like “open” and “transparent” and saying things were “democratizing” without really analyzing those terms. A big part of the book was just trying to think through the language we’re using and to look at the ideology underpinning the terminology that’s now so commonplace.

You make the point in the book that the Internet and the offline world aren’t two separate worlds. Can you talk about that a bit more?

It’s amazing that these arguments even need to be made. That you need to point out that these technologies cannot just magically overcome the structures and material conditions that shape regular life.

It harkens back to previous waves of technological optimism. People have always invested a lot of hope in their tools. I talk about the way that we often imbue our machines with the power to liberate us. There was lots of hope that machines would be doing all of our labor and that we would have, as a society, much more free time, and that we would have this economy of abundance because machines would be so dramatically improved over time. The reasons that those predictions never came to pass is because machines are embedded in a social context and the rewards are siphoned off by the elite.

The rise of the Internet really fits that pattern. We can see that there is this massive shifting of wealth [to corporations]. These gigantic digital companies are emerging that can track and profit from not just our online interactions, but increasingly things that we’re doing away from the keyboard. As we move towards the “Internet-of-things,” more and more of the devices around us are going to have IP addresses and be leaking data. These are avenues for these companies that are garnering enormous power to increase their wealth.

The rhetoric a few years ago was that these companies are going to vanquish the old media dinosaurs. If you read the tech books from a few years ago, it’s just like “Disney and these companies are so horrible. Google is going to overthrow them and create a participatory culture.” But Google is going to be way more invasive than Mickey Mouse ever was.

Google’s buying drone companies.

Google’s in your car, Google’s in your thermostat, it’s in your email box. But then there’s the psychological element. There was this hope that you could be anyone you wanted to be online. That you could pick an avatar and be totally liberated from your offline self. That was a real animating fantasy. That, too, was really misleading. Minority groups and women are often forced back into their real bodies, so to speak. They’re not given equal access to the supposedly open space of the Internet.

This is one of the conversations that I think your book is incredibly relevant to right now. Even supposedly progressive spaces are still dominated by white people, mostly men, and there’s a real pushback against women and people of color who are using social media.

It’s been amazing how much outrage can get heaped on one person who’s making critical observations about an institution with such disproportionate power and reach.

The new media elites end up looking a whole lot like the old ones. The other conversations about race and gender and the Internet recently has been about these new media websites that are launched with a lot of fanfare, that have been funded in many cases by Silicon Valley venture capital, that are selling themselves as new and rebellious and exciting and a challenge to the old media—the faces of them are still white men.

The economic rewards flow through the usual suspects. Larry Lessig has done a lot of interesting work around copyright. But he wrote basically that we need to cheer on the Facebooks of the world because they’re new and not the old media dinosaurs. He has this line about “Stanford is vanquishing Harvard.” We need something so much more profound than that.

This is why I really take on the concept of “openness.” Because open is not equal. In open systems, discrimination and barriers can become invisibilized. It’s harder to get your mind around how inequitable things actually are. I myself follow a diverse group of people and feel like Twitter is full of people of color or radicals. But that’s because I’m getting a very distorted view of the overall picture.

I think it’s helpful to look at the handful of examples of these supposedly open systems in action. Like Wikipedia, which everyone can contribute to. Nonetheless, only like 15 percent of the editors are women. Even the organizations that are held up as exemplars of digital democracy, there’s still such structural inequality. By the time you get to the level of these new media ventures that you’re talking about, it’s completely predictable.

We really need to think through these issues on a social level. I tried to steer the debate away from our addiction to our devices or to crappy content on the Internet, and really take a structural view. It’s challenging because ultimately it comes down to money and power and who has it and how do you wrest it away and how do you funnel some of it to build structures that will support other types of voices. That’s far more difficult than waiting around for some new technology to come around and do it for you.

You write about this tension between professional work from the amateurs who are working for free and the way the idea of doing work for the love of it has crept in everywhere. Except people are working longer hours than ever and they’re making less money than ever, and who has time to come home at the end of your two minimum wage jobs and make art?

It would be nice to come out and say follow your heart, do everything for the love of it, and things’ll work out. Artists are told not to think about money. They’re actively encouraged to deny the economic sphere. What that does though is it obscures the way privilege operates—the way that having a trust fund can sure be handy if you want to be a full time sculptor or digital video maker.

I think it’s important that we tackle these issues. That’s where I look at these beautiful predictions about the way these labor-saving devices would free us all and the idea that the fruits of technological advancement would be evenly shared. It’s really interesting how today’s leading tech pundits don’t pretend that [the sharing is] going to be even at all. Our social imagination is so diminished.

There’s something really off about celebrating amateurism in an economy where people are un- and under-employed, and where young people are graduating with an average of $30,000 of student debt. It doesn’t acknowledge the way that this figure of the artist—[as] the person who loves their work so much that they’ll do it for nothing—is increasingly central to this precarious labor force.

I quote this example of people at an Apple store asking for a raise and the response was “When you’re working for Apple, money shouldn’t be a consideration.” You’re supposed to just love your work so much you’ll exploit yourself. That’s what interning is. That’s what writing for free is when you’re hoping to get a foot in the door as a journalist. There are major social implications if that’s the road we go down. It exacerbates inequality, because who can afford to do this kind of work?

Of course, unpaid internships are really prevalent in creative fields.

Ultimately, it’s a corporate subsidy. People are sometimes not just working for free but then also going into debt for college credit to do it. In a way, all of the unpaid labor online is also a corporate subsidy. I agree that calling our participation online “labor” is problematic because it’s not clear exactly how we’re being exploited, but the point is the value being extracted. We need to talk about that value extraction and the way that people’s free participation feeds into it.

Of course we enjoy so much of what we do online. People enjoy creating art and culture and doing journalism too. The idea that work should only be well-compensated and secure if it makes you miserable ultimately leads to a world where the people who feel like they should make a lot of money are the guys on Wall Street working 80 hours a week. It’s a bleak, bleak view.

In many ways the problem with social media is it does break down this barrier between home and work. You point this out in the book–it’s everywhere, you can’t avoid it, especially if you are an independent creative person where you have to constantly promote your own work, or it is part of your job. There’s now the Wages for Facebook conversation—people are starting to talk about the way we are creating value for these companies.

It really challenges the notion that we’re all on these social media platforms purely by choice, because there’s a real obligatory dimension to so much of this. Look also at the way we talk to young people. “Do you want a college recruiter to see that on your Facebook profile?” What we’re really demanding is that they create a Facebook profile that appeals to college recruiters, that they manage a self that will help them get ahead.

I was at a recent talk about automation and the “end of jobs,” and one researcher said that the jobs that would be hardest to automate away would be ones that required creativity or social intelligence—skills that have been incredibly devalued in today’s economy, only in part because of technology.

Those skills are being pushed out of the economy because they’re supposed to be things you just choose to do because they’re pleasurable. There is a paradox there. Certain types of jobs will be automated away, that can be not just deskilled but done better by machines, and meanwhile all the creative jobs that can’t be automated away are actually considered almost superfluous to the economy.

The thing about the jobs conversation is that it’s a political question and a policy question as well as a technological question. There can be lots of different types of jobs in the world if we invest in them. This question of what kind of jobs we’re going to have in the future. So much of it is actually comes down to these social decisions that we’re making. The technological aspect has always been overhyped.

You do bring up ideas like a basic income and shorter working hours as ways to allow people to have time and money for culture creation.

The question is, how do you get there? You’d have to have a political movement, you’d have to challenge power. They’re not just going to throw the poor people who’ve had their jobs automated away a bone and suddenly provide a basic income. People would really have to organize and fight for it. It’s that fight, that element of antagonism and struggle that isn’t faced when we just think tools are evolving rapidly and we’ll catch up with them.

The more romantic predictions about rising prosperity and the inevitable increase in free time were made against the backdrop of the post-war consensus of the 1940s, ‘50s and ‘60s. There was a social safety net, there were structures in place that redistributed wealth, and so people made predictions colored by that social fabric, that if there were advancements in our tools that they would be shared by people. It just shows the way that the political reality shapes what we can collectively imagine.

Finally, you make the case for state-subsidized media as well as regulations—for ensuring that people have the ability to make culture as well as consume it. You note that major web companies like Google and Facebook operate like public utilities, and that nationalizing them would be a really hard sell, and yet if these things are being founded with government subsidies and our work, they are in a sense already ours.

The invisible subsidy is the thing that we really have to keep in mind. People say, “Where’s the money going to come from?” We’re already spending it. So much innovation is the consequence of state investment. Touchscreens, the microchip, the Internet itself, GPS, all of these things would not exist if the government had not invested in them, and the good thing about state investment is it takes a much longer view than short-term private-market investment. It can have tremendous, socially valuable breakthroughs. But all the credit for these innovations and the financial rewards is going to private companies, not back to us, the people, whose tax dollars actually paid for them.

You raise a moral question: If we’re paying for these things already, then shouldn’t they in some sense be ours? I think the answer is yes. There are some leverage points in the sense that these companies like to talk about themselves as though they actually are public utilities. There’s this public-spiritedness in their rhetoric but it doesn’t go deep enough—it doesn’t go into the way they’re actually run. That’s the gap we need to bridge. Despite Silicon Valley’s hostility to the government and the state, and the idea that the Internet is sort of this magic place where regulation should not touch, the government’s already there. We just need it to be benefiting people, not private corporations.

Sarah Jaffe is a staff writer at In These Times and the co-host of Dissent magazine’s Belabored podcast. Her writings on labor, social movements, gender, media, and student debt have been published in The Atlantic, The Nation, The American Prospect, AlterNet, and many other publications, and she is a regular commentator for radio and television. You can follow her on Twitter @sarahljaffe.

Thom Hartmann: How America Killed Its Middle Class


We’re heading into a world that looks like a Charles Dickens novel.

There’s nothing “normal” about having a middle class. Having a middle class is a choice that a society has to make, and it’s a choice we need to make again in this generation, if we want to stop the destruction of the remnants of the last generation’s middle class.

Despite what you might read in the Wall Street Journal or see on Fox News, capitalism is not an economic system that produces a middle class. In fact, if left to its own devices, capitalism tends towards vast levels of inequality and monopoly. The natural and most stable state of capitalism actually looks a lot like the Victorian England depicted in Charles Dickens’ novels.

At the top there is a very small class of superrich. Below them, there is a slightly larger, but still very small, “middle” class of professionals and mercantilists – doctor, lawyers, shop-owners – who help keep things running for the superrich and supply the working poor with their needs. And at the very bottom there is the great mass of people – typically over 90 percent of the population – who make up the working poor. They have no wealth – in fact they’re typically in debt most of their lives – and can barely survive on what little money they make.

So, for average working people, there is no such thing as a middle class in “normal” capitalism. Wealth accumulates at the very top among the elites, not among everyday working people. Inequality is the default option.

You can see this trend today in America. When we had heavily regulated and taxed capitalism in the post-war era, the largest employer in America was General Motors, and they paid working people what would be, in today’s dollars, about $50 an hour with benefits. Reagan began deregulating and cutting taxes on capitalism in 1981, and today, with more classical “raw capitalism,” what we call “Reaganomics,” or “supply side economics,” our nation’s largest employer is WalMart and they pay around $10 an hour.

This is how quickly capitalism reorients itself when the brakes of regulation and taxes are removed – this huge change was done in less than 35 years.

The only ways a working-class “middle class” can come about in a capitalist society are by massive social upheaval – a middle class emerged after the Black Plague in Europe in the 14th century – or by heavily taxing the rich.

French economist Thomas Piketty has talked about this at great length in his groundbreaking new book, Capital in the Twenty-First Century. He argues that the middle class that came about in Western Europe and the United States during the mid-twentieth was the direct result of a peculiar set of historical events.

According to Piketty, the post-World War II middle class was created by two major things: the destruction of European inherited wealth during the war and higher taxes on the rich, most of which were rationalized by the war. This brought wealth and income at the top down, and raised working people up into a middle class.

Piketty is right, especially about the importance of high marginal tax rates and inheritance taxes being necessary for the creation of a middle class that includes working-class people. Progressive taxation, when done correctly, pushes wages down to working people and reduces the incentives for the very rich to pillage their companies or rip off their workers. After all, why take another billion when 91 percent of it just going to be paid in taxes?

This is the main reason why, when GM was our largest employer and our working class were also in the middle class, CEOs only took home 30 times what working people did. The top tax rate for all the time America’s middle class was created was between 74 and 91 percent. Until, of course, Reagan dropped it to 28 percent and working people moved from the middle class to becoming the working poor.

Other policies, like protective tariffs and strong labor laws also help build a middle class, but progressive taxation is the most important because it is the most direct way to transfer money from the rich to the working poor, and to create a disincentive to theft or monopoly by those at the top.

History shows how important high taxes on the rich are for creating a strong middle class.

If you compare a chart showing the historical top income tax rate over the course of the twentieth century with a chart of income inequality in the United States over roughly the same time period, you’ll see that the period with the highest taxes on the rich – the period between the Roosevelt and Reagan administrations – was also the period with the lowest levels of economic inequality.

You’ll also notice that since marginal tax rates started to plummet during the Reagan years, income inequality has skyrocketed.

Even more striking, during those same 33 years since Reagan took office and started cutting taxes on the rich, income levels for the top 1 percent have ballooned while income levels for everyone else have stayed pretty much flat.

Coincidence? I think not.

Creating a middle class is always a choice, and by embracing Reaganomics and cutting taxes on the rich, we decided back in 1980 not to have a middle class within a generation or two. George H.W. Bush saw this, and correctly called it “Voodoo Economics.” And we’re still in the era of Reaganomics – as President Obama recently pointed out, Reagan was a successful revolutionary.

This, of course, is exactly what conservatives always push for. When wealth is spread more equally among all parts of society, people start to expect more from society and start demanding more rights. That leads to social instability, which is feared and hated by conservatives, even though revolutionaries and liberals like Thomas Jefferson welcome it.

And, as Kirk and Buckley predicted back in the 1950s, this is exactly what happened in the 1960s and ’70s when taxes on the rich were at their highest. The Civil Rights movement, the women’s movement, the consumer movement, the anti-war movement, and the environmental movement – social movements that grew out of the wealth and rising expectations of the post-World War II era’s middle class – these all terrified conservatives. Which is why ever since they took power in 1980, they’ve made gutting working people out of the middle class their number one goal.

We now have a choice in this country. We can either continue going down the road to oligarchy, the road we’ve been on since the Reagan years, or we can choose to go on the road to a more pluralistic society with working class people able to make it into the middle class. We can’t have both.

And if we want to go down the road to letting working people back into the middle class, it all starts with taxing the rich.

The time is long past due for us to roll back the Reagan tax cuts.

New study finds US to be ruled by oligarchic elite

by Jerome Roos on April 17, 2014

Post image for New study finds US to be ruled by oligarchic elite

Political scientists show that average American has “near-zero” influence on policy outcomes, but their groundbreaking study is not without problems.

 

It’s not every day that an academic article in the arcane world of American political science makes headlines around the world, but then again, these aren’t normal days either. On Wednesday, various mainstream media outlets — including even the conservative British daily The Telegraph — ran a series of articles with essentially the same title: “Study finds that US is an oligarchy.” Or, as the Washington Post summed up: “Rich people rule!” The paper, according to the review in the Post, “should reshape how we think about American democracy.”

The conclusion sounds like it could have come straight out of a general assembly or drum circle at Zuccotti Park, but the authors of the paper in question — two Professors of Politics at Princeton and Northwestern University — aren’t quite of the radical dreadlocked variety. No, like Piketty’s book, this article is real “science”. It’s even got numbers in it! Martin Gilens of Princeton and Benjamin Page of Northwestern University took a dataset of 1,779 policy issues, ran a bunch of regressions, and basically found that the United States is not a democracy after all:

Multivariate analysis indicates that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence. The results provide substantial support for theories of Economic Elite Domination and for theories of Biased Pluralism, but not for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism.

The findings, of course, are both very interesting and very obvious. What Gilens and Page claim to have empirically demonstrated is that policy outcomes by and large favor the interests of business and the wealthiest segment of the population, while the preferences of the vast majority of Americans are of little to no consequence for policy outcomes. As the authors show, this new data backs up the conclusions of a number of long-forgotten studies from the 1950s and 1960s — not least the landmark contributions by C.W. Mills and Ralph Miliband — that tried to debunk the assertion of mainstream pluralist scholars that no single interest group dominates US policymaking.

But while Gilens and Page’s study will undoubtedly be considered a milestone in the study of business power, there’s also a risk in focusing too narrowly on the elites and their interest groups themselves; namely the risk of losing sight of the broader set of social relations and institutional arrangements in which they are embedded. What I am referring to, of course, is the dreaded C-word: capitalism — a term that appears only once in the main body of Gilens and Page’s text, in a superficial reference to The Communist Manifesto, whose claims are quickly dismissed as empirically untestable. How can you talk about oligarchy and economic elites without talking about capitalism?

What’s missing from the analysis is therefore precisely what was missing from C.W. Mills’ and Miliband’s studies: an account of the nature of the capitalist state as such. By branding the US political system an “oligarchy”, the authors conveniently sidestep an even thornier question: what if oligarchy, as opposed to democracy, is actually the natural political form in capitalist society? What if the capitalist state is by its very definition an oligarchic form of domination? If that’s the case, the authors have merely proved the obvious: that the United States is a thoroughly capitalist society. Congratulations for figuring that one out! They should have just called a spade a spade.

That, of course, wouldn’t have raised many eyebrows. But it’s worth noting that this was precisely the critique that Nicos Poulantzas leveled at Ralph Miliband in the New Left Review in the early 1970s — and it doesn’t take an Althusserian structuralist to see that he had a point. Miliband’s study of capitalist elites, Poulantzas showed, was very useful for debunking pluralist illusions about the democratic nature of US politics, but by focusing narrowly on elite preferences and the “instrumental” use of political and economic resources to influence policy, Miliband’s empiricism ceded way too much methodological ground to “bourgeois” political science. By trying to painstakingly prove the existence of a causal relationship between instrumental elite behavior and policy outcomes, Miliband ended up missing the bigger picture: the class-bias inherent in the capitalist state itself, irrespective of who occupies it.

These methodological and theoretical limitations have consequences that extend far beyond the academic debate: at the end of the day, these are political questions. The way we perceive business power and define the capitalist state will inevitably have serious implications for our political strategies. The danger with empirical studies that narrowly emphasize the role of elites at the expense of the deeper structural sources of capitalist power is that they will end up reinforcing the illusion that simply replacing the elites and “taking money out of politics” would be sufficient to restore democracy to its past glory. That, of course, would be profoundly misleading. If we are serious about unseating the oligarchs from power, let’s make sure not to get carried away by the numbers and not to lose sight of the bigger picture.

Jerome Roos is a PhD candidate in International Political Economy at the European University Institute, and founding editor of ROAR Magazine.

Obama, Monopoly Capitalism, and Global Hegemony

Time for an Accounting
http://img2.timeinc.net/people/i/2013/news/130429/president-obama-600.jpg

by NORMAN POLLACK

We’ve seen enough to know that the US is on track to push structural-ideological tyranny to a new level, not so much the reproduction of 20th century fascism (although that historical experience has created an indelible mark on the mindset of present-day geopolitical strategists in defining what might be possible in violating international law without thoroughly antagonizing the world community) as, instead, using a cloak of liberal humanitarianism to assert military power in pursuit of traditional imperialism. The same goals, different label.

America transcends the recent past, including its share in constructing a system of power politics, in favor of more ambitious unilateral dominance which takes advantage of the increasing cultural pluralism arising from the fragmentation of the commercial-financial order. Counterterrorism is the fig leaf for achieving greater wealth-concentration at home, aided by massive surveillance to induce social control of the population (informal boundaries on permissible dissent) for purposes of creating on the base of formal democracy a national-security state, and for achieving in the world, a predator state charged with the mission of resisting the societal democratization of emerging and industrial economies alike. Both are necessary, compliancy here and abroad, a tightly-woven structure of wealth and power, if US capitalism, penetrating every nook and cranny of the globe, followed—or sometimes preceded—by military intervention, bases, naval power, hard-nosed diplomacy, paramilitary efforts at regime change, is to sustain acceptable rates of profits at acceptable levels of risk. American capitalist preeminence in a not-deviating capitalist world, firmly grounded in the dynamics of counterrevolution (the US as guardian of the global system) is at the crux of what others perceive as the Exceptionalist Nightmare or the divine right of hegemony.

The fig leaf of counterterrorism, which has supplanted anticommunism to the same end of habituating the American people to still more invidious extremes of wealth differentiation and resulting class power, is still, however, not sufficient for the stabilization of capitalism at this level of intense concentration; for needed as well is the popularization of Reaction and Repression. Obama is the man for the job. His race —thanks to liberal guilt and political correctness—alone saves him from critical scrutiny (neatly played out, as though making Reagan’s Teflon presidency amateurish by comparison), as he, like none before him, integrates capitalist, military, intelligence, and media resources, i.e., the communities represented by the elites of each, into a finely-honed authoritarian backdrop for manifesting and executing national power. And yet, liberals slobber at his feet, their moral bankruptcy and lack of political wisdom and will nowhere more evident.

The putsch has become outmoded; the bowdlerization of race and gender is a sufficient cause of false consciousness, of feel-good celebration of diversity, as the upper 0.1% tightened their hold on the levers of power. A black president? a woman president? What would Paul Robeson think—or Rosa Luxemburg! If a white president abused power, from Espionage Act prosecutions to the hit list of drone assassinations, in the way Obama has, one might hope to see street demonstrations—a hope perhaps futile given the decline of societal awareness already rife in the way war crimes, corporate giveaways, and the celebration of wealth pass unnoticed.

Time for an accounting, then, before it’s too late. From whence, though? It is important to recognize how much America has changed, since, say, the early 1950s. At least, then, anticommunism was met by (often painful and unsuccessful) resistance, for as repression mounted so also did the clarity of struggle and need to fight back. Taft-Hartley, Peekskill, legislation, events, large and small, the purging of “reds” from labor unions (and like UE, whole unions themselves)—a time to be alive, the very lies being met in response by forthright declarations of freedom.

Those who took the Fifth, and found themselves fired; those like Claude Pepper of Florida, who in the 1950 Senate race had been smeared by the Miami Herald with a faked composite showing him embracing Joe Stalin, and Pepper’s opponent, campaigning around the state hissing that his opponent’s sister was a—thespian. Even as late as 1956, I followed Adlai Stevenson for three days during the California Democratic primary, and while hardly a flaming radical, he had, as I recall, dead-tired, standing on the railroad tracks somewhere around San Jose, expressed a vision of social awareness seldom found since. With Kennedy, the fascistization of America had begun in earnest.

The process continues, now accelerated.

Norman Pollack has written on Populism. His interests are social theory and the structural analysis of capitalism and fascism. He can be reached at pollackn@msu.edu.

 

http://www.counterpunch.org/2014/04/16/obama-monopoly-capitalism-and-global-hegemony/

 

 

Google, once disdainful of lobbying, now a master of Washington influence

Google’s Eric Schmidt is no stranger to D.C. He has spent lots of time at the White House and on Capitol Hill lobbying on behalf of his titan technology company. But his relationship with Washington and the Obama administration has not always been a comfortable one.

WRITTEN BYTom HamburgerMatea Gold

PUBLISHED: APRIL 12

In May 2012, the law school at George Mason University hosted a forum billed as a “vibrant discussion” about Internet search competition. Many of the major players in the field were there — regulators from the Federal Trade Commission, federal and state prosecutors, top congressional staffers.

What the guests had not been told was that the day-long academic conference was in large part the work of Google, which maneuvered behind the scenes with GMU’s Law & Economics Center to put on the event. At the time, the company was under FTC investigation over concerns about the dominance of its famed search engine, a case that threatened Google’s core business.

In the weeks leading up to the GMU event, Google executives suggested potential speakers and guests, sending the center’s staff a detailed spreadsheet listing members of Congress, FTC commissioners, and senior officials with the Justice Department and state attorney general’s offices.

“If you haven’t sent out the invites yet, please use the attached spreadsheet, which contains updated info,” Google legal assistant Yang Zhang wrote to Henry Butler, executive director of the law center, according to internal e-mails obtained by The Washington Post through a public records request. “If you’ve sent out the invites, would it be possible to add a few more?”

Butler replied, “We’re on it!”

On the day of the conference, leading technology and legal experts forcefully rejected the need for the government to take action against Google, making their arguments before some of the very regulators who would help determine its fate.

The company helped put on two similar conferences at GMU around the time of the 18-month investigation, part of a broad strategy to shape the external debate around the probe, which found that Google’s search practices did not merit legal action.

The behind-the-scenes machinations demonstrate how Google — once a lobbying weakling — has come to master a new method of operating in modern-day Washington, where spending on traditional lobbying is rivaled by other, less visible forms of influence.

(Read the e-mails between Google and GMU officials)

That system includes financing sympathetic research at universities and think tanks, investing in nonprofit advocacy groups across the political spectrum and funding pro-business coalitions cast as public-interest projects.

The rise of Google as a top-tier Washington player fully captures the arc of change in the influence business.

Nine years ago, the company opened a one-man lobbying shop, disdainful of the capital’s pay-to-play culture.

Since then, Google has soared to near the top of the city’s lobbying ranks, placing second only to General Electric incorporate lobbying expenditures in 2012 and fifth place in 2013.

The company gives money to nearly 140 business trade groups, advocacy organizations and think tanks, according to a Post analysis of voluntary disclosures by the company, which, like many corporations, does not reveal the size of its donations. That’s double the number of groups Google funded four years ago.

This summer, Google will move to a new Capitol Hill office, doubling its Washington space to 55,000 square feet — roughly the size of the White House.

Google’s increasingly muscular Washington presence matches its expanded needs and ambitions as it has fended off a series of executive- and legislative-branch threats to regulate its activities and well-funded challenges by its corporate rivals.

Today, Google is working to preserve its rights to collect consumer data — and shield it from the government — amid a backlash over revelations that the National Security Agency tapped Internet companies as part of its surveillance programs. And it markets cloud storage and other services to federal departments, including intelligence agencies and the Pentagon.

“Technology issues are a big — and growing — part of policy debates in Washington, and it is important for us to be part of that discussion,” said Susan Molinari, a Republican former congresswoman from New York who works as Google’s top lobbyist. “We aim to help policymakers understand Google’s business and the work we do to keep the Internet open and spur economic opportunity.”

Molinari added, “We support associations and third parties across the political spectrum who help us get the word out — even if we don’t agree with them on 100 percent of issues.”

Susan Molinari, a Republican former congresswoman from New York, works as Google’s top lobbyist in Washington.

Susan Molinari, a Republican former congresswoman from New York, works as Google’s top lobbyist in Washington.

As Google’s lobbying efforts have matured, the company has worked to broaden its appeal on both sides of the aisle. Executive Chairman Eric Schmidt is a well-known backer of President Obama and advises the White House. Google’s lobbying corps — now numbering more than 100 — is split equally, like its campaign donations, among Democrats and Republicans.

Google executives have fostered a new dialogue between Republicans and Silicon Valley, giving money to conservative groups such as Heritage Action for America and the Federalist Society. While also supporting groups on the left, Google has flown conservative activists to California for visits to its Mountain View campus and a stay at the Four Seasons Hotel.

The company has also pioneered new and unexpected ways to influence decision-makers, harnessing its vast reach. It has befriended key lawmakers in both parties by offering free training sessions to Capitol Hill staffers and campaign operatives on how to use Google products that can help targetvoters.

Through a program for charities, Google donates in-kind advertising, customized YouTube channels and Web site analytics to think tanks that are allied with the company’s policy goals.

Google “fellows” — young lawyers, writers and thinkers paid by the company — populate elite think tanks such as the Cato Institute, the Competitive Enterprise Institute and the New America Foundation.

To critics, Google’s investments have effectively shifted the national discussion away from Internet policy questions that could affect the company’s business practices. Groups that might ordinarily challenge the policies and practices of a major corporation are holding their fire, those critics say.

“Google’s influence in Washington has chilled a necessary and overdue policy discussion about the impact of the Internet’s largest firm on the future of the Internet,” said Marc Rotenberg, a Georgetown University law professor who runs the Electronic Privacy Information Center, a watchdog and research organization.

CONTINUED:  http://www.washingtonpost.com/politics/how-google-is-transforming-power-and-politicsgoogle-once-disdainful-of-lobbying-now-a-master-of-washington-influence/2014/04/12/51648b92-b4d3-11e3-8cb6-284052554d74_story.html?wpmk=MK0000200

Tens of thousands in France, Italy protest austerity measures

By Kumaran Ira
14 April 2014

On Saturday, tens of thousands of people took to the streets in France and in Italy, protesting the social-democratic governments’ austerity measures and pro-market labour reforms.

The Paris demonstration. Banner: “No to austerity policies”

The protest in Rome, attended by tens of thousands of people, ended in violence as police attacked protesters. The police used tear gas and baton-charged demonstrators. There were dozens of lighter injuries among police and protesters, and at least six arrests, police said.

In France, the protest was called by the unions and their pseudo-left supporters, the New Anti-capitalist Party and the Left Front, a coalition of the Stalinist French Communist Party (PCF) and the Left Party of Jean-Luc Mélenchon. In the rally, Alexis Tsipras, the chairman of the Greek Coalition of the Radical Left (SYRIZA), marched alongside Pierre Laurent of the PCF, Mélenchon and NPA spokesman Olivier Besancenot. Tsipras is the European Left (EL) candidate for the Presidency for the European Commission in the European elections.

Turnout at the Paris protest was around 25,000 people, according to police estimates, though the PCF claimed 100,000 participated. Several other protests were also called in other French cities, including a protest of 1,600 in Marseille.

The protest in Paris. Banner: “Capitalists cost too much, let’s give it back to them an eye for an eye.”

In Paris, protesters carried banners criticizing austerity measures being carried out by the Socialist Party (PS) government of President François Hollande. Banners read, “Enough, Hollande,” “If you’re left-wing, you tax the financial sector,” “If you’re left-wing, you help the workers,” or “If you’re left-wing, Europe means people first.”

The relatively low turnout for the rally in Paris, despite deep opposition to the social agenda of the EU and of France’s PS government, reflects deepening popular disillusionment and anger with the reactionary politics of the European pseudo-left. The rally drew largely on the membership and periphery of the pseudo-left parties and had the air of a family festival.

A banner in the Paris protest says, “PS equals pseudo-socialist”

The Left Front and the NPA play a similar role to their counterpart, Syriza, which helped the “troika”—the European Commission, International Monetary Fund (IMF) and European Central Bank—impose devastating austerity measures on the Greek working class. While making tactical criticisms of EU policy, Syriza did everything to block social opposition and tacitly backed the crushing of strikes against austerity. This allowed the “troika” to cut wages by 30 percent or more and destroy hundreds of thousands of jobs.

As for the PS, after a humiliating defeat in the March municipal election that saw a significant victory for the neo-fascist National Front (FN), it is shifting further to the right, vowing to intensify austerity and making law-and-order appeals to the FN. The government is planning to slash €50 billion in yearly public spending under Hollande’s so-called “Responsibility Pact.”

The sharp turn to the right reflects the disintegration of bourgeois “left” politics in France and Europe as a whole. Workers’ deep social opposition to these reactionary policies finds no expression in the reactionary politics of the protest organisers, the NPA and Left Front, however, which are key allies of the PS and supporters of the EU.

Their empty opposition to Hollande is a political fraud. The NPA and the Left Front supported Hollande against right-wing incumbent Nicolas Sarkozy during the 2012 presidential elections, working to promote illusions in the PS. While acknowledging that Hollande would carry out austerity policies, they claimed that the PS could be pressured to adopt left-wing policies. These claims have proven completely bankrupt.

After the rally, the Left Front and the NPA cynically claimed that they would not allow the PS to carry out austerity measures. Besancenot said, “The message is clear, Manuel Valls is starting out with a first protest, and it’s important because this means a new political scenario is opening.”

Mélenchon said, “This is a message sent to the government… There is a left in this country, and it is unacceptable for it to be usurped to carry out a right-wing economic policy.”

Such remarks are a backhanded acknowledgement of the widespread sentiment in the population that there is no political left in France, and that the PS and its allies, including the Left Front and the NPA, are indifferent or hostile to workers’ interests.

The verbal opposition of Mélenchon and Besancenot to the PS offers nothing to workers seeking to fight EU-dictated austerity measures, however. They are mere political shadows of the PS itself. Their aim in calling this protest is to subordinate the working class to the reactionary agenda of the EU and the PS government, blocking a politically independent movement of the working class against the capitalist ruling elite.

The protest in Rome was called against rising housing costs, unemployment and labour market reforms amid a slowdown of the Italian economy. Protesters denounced the social-democratic Democratic Party (PD) government of Matteo Renzi, who is planning to reform labour rules to make it easier for companies to hire and fire employees.

Renzi was brought to power after his predecessor Enrico Letta failed to carry out economic reforms demanded by the European Union. Renzi has pledged that his government will enact economic reforms quickly, slashing public spending.

Mobilizing for the common: some lessons from Italy

By Jerome Roos On April 14, 2014

Post image for Mobilizing for the common: some lessons from ItalySaturday’s protest in Rome was the latest in a series of actions around a common project. What can organizers elsewhere learn from Italy’s movements?

 

Tens of thousands of protesters marched on Rome this Saturday to denounce the austerity measures and economic reforms of Matteo Renzi’s new government and to restate their call for income, housing and dignity for all. Dozens were injured as clashes broke out towards the end of the march and police violently charged forward into the crowds, indiscriminately beating protesters and trampling over those who got caught in the way. What the police could not trample, however, was the resolve of the movements to step up their resistance in the wake of last October’s sollevazione generale (“general uprising”), which brought a hundred thousand people into the streets of Rome.

Saturday’s events are particularly remarkable for two reasons: first of all, the Italian movements had been fairly lackluster in responding to the European debt crisis when it first broke in 2010-’11. Apart from a massive demonstration in Rome on October 15, 2011, which quickly degenerated into tactless violence, theindignados-Occupy wave largely passed the country by, even as an unelected technocratic government headed by former Goldman Sachs adviser Mario Monti took power. This somewhat ambivalent recent history makes the ongoing mobilizations all the more important, especially since the housing and unemployment crises have deepened significantly since.

The second reason we should be paying attention to Italy, however, strikes closer to home for most. Saturday’s protest occurred against a backdrop of relative demobilization across the rest of Europe and North America. Right when anti-austerity movements elsewhere appear to be on the retreat, the Italian movements are gradually stepping up their resistance. This raises an interesting question: do we have anything to learn from the grassroots processes currently underway in Italy? I believe the answer is yes — and I think we should be paying particular attention to the broad social composition and the “common project” that underpin these grassroots processes.

Revamping the Resistance

But let’s first take a step back. Last week, I briefly touched upon a number of challenges that the international movements face in their current phase of relative demobilization. I proposed that some of the main reasons for the “lack of protest” nowadays have to do with (1) the social atomicity induced by the increasingly precarious nature of work in the crisis and under financialized capitalism more generally; (2) the isolating effects of anxiety generated by neoliberalism’s demands for constant connectivity and permanent productivity, combined with police repression and the aforementioned rise of precarity; (3) the overwhelming sense of futility experienced by large parts of the population. To these factors, one reader rightly added the mental and physical exhaustion stemming from unsustainable forms of activism.

Now if movements elsewhere are interested in revamping the resistance, I believe they will have to find ways to directly target these interrelated factors — and the Italian movements may provide us with at least one clue on where to start: by sitting down together and carefully spelling out a common projectbehind which disparate political groups, autonomous movements and isolated individuals can unite. What is needed is a single banner capable of sustaining a broad popular coalition behind a set of shared aims and principles. In Italy, this project is referred to as una sola grande opera: casa e reddito per tutti – “only one big endeavor: housing and income for all.” This project in turn builds on a decade of local experience in organizing around “the right to the common” (for a useful primer on the subject, check out this talk by Michael Hardt).

Mobilizing for the Common

The concept of the common has been gaining popularity in activist circles around the world in recent years, but it is perhaps being spelled out most explicitly in the cycle of struggles taking place in Italy right now. As my friend and fellow EUI researcher Alfredo Mazzamauro pointed out in an excellent article for ROAR earlier this year, the remarkable thing about the sollevazione generale of October 19, 2013 was precisely that it cut across the dividing lines that for so long have kept the Italian left and its social movements divided and fighting among themselves. It was largely through the identification of a common enemy (neoliberal capitalism) and the formulation of a common project (around income and housing) that these disparate groups were able to join forces and are now starting to craft an autonomous political strategy from below.

That this narrative revolves fundamentally around housing and income is not a coincidence: 40% of Italy’s youth are now out of work and in 2013 alone some68.000 families received eviction notices, 90% of whom because they had failed to pay their rent or mortgages as a result of insufficient income. But the rallying cry for income and housing is not just a moderate reformist plea in the face of a devastating crisis. When protesters in Rome call for the reddito, most are referring to unconditional basic income; and when they talk about housing they refer to it not just as a human right but as a common good. So the movements are not simply making a demand upon the government. Rather, they are restating a revolutionary aim to separate the human need for shelter and sustenance from the social dependence on wage labor and exchange. This constitutes a radical re-imagination of value in and of itself.

Basic Income, Social Housing

The formulation of housing as a common good and income as a universal benefit therefore has the potential to greatly widen our political horizons. First of all, the notion of basic income shatters the exploitative idea that ordinary people should sell their labor power to some luckier human being (their employer) just to survive. It recognizes the fact that our societies (at least in Europe and North America) have accumulated more than enough capital over the ages to provide everyone with at least the basic necessities of a modest livelihood. And it provides a concrete alternative to combat the profound sense of anxiety wrought by labor precarity. Make no mistake: breaking down the dependence on wage labor for basic needs would have profoundly transformative implications for social relations and the nature of everyday life.

Secondly, as David Harvey has repeatedly pointed out in recent years (including in his recent talk at the LSE), the notion of housing as a common good has similarly radical implications at the foundational level of the capitalist economy. By breaking down the contradiction between use value and exchange value, housing as common good recognizes the superior value of the basic need for shelter and security over the unproductive and entirely fictitious value of speculative investment in real estate. As such, it dispenses with the market fundamentalist idea that a house is first and foremost an exchange value; an utterly irrational conviction that has produced a world in which millions of homeless people now sit side-by-side with millions of peopleless homes.

Building Broad Coalitions

In Italy, framing the struggle explicitly in these terms has allowed for the construction of a broad coalition that brings together unlikely allies like the squatting and social center movements from the big cities and the radically autonomous no-TAV movement (which struggles in defense of local communities and the environmental commons against the construction of a high-speed railway through Val Susa), with precarious workers in the logistics sector and unemployed Italians and migrants who risk being evicted from their homes. As Alfredo Mazzamauro put it, “together [these groups] highlighted the contrast in spending over 26 billion euros of public money on the construction of a train line which is destabilizing entire communities and which is of questionable benefit for the low-income classes in the region, while at the same time refusing to set up an emergency plan to resolve the housing crisis.”

Similar broad coalitions briefly came into existence elsewhere in the course of 2011, but in most cases these coalitions could not be held together as they quickly extinguished their negative energy and mostly failed to articulate a shared vision and a concrete political project that protesters could positively commit to and continue to organize around. In the absence of such a common project, the coalitions of 2011 took, for the largest part, a rather ephemeral or transient form: a common enemy was identified (Mubarak, Wall Street, Erdoğan), but beyond the crucial re-invention of the popular assembly, few steps were taken to construct an alternative political imaginary and long-term revolutionary strategy.

Diversity of Tactics

Developing such a common political project is not the same as cramming the multitude of social forces and political imaginaries into a single unified structure. Most importantly, it is not about crafting a political party out of the patchwork of social movements, as the more traditional leftists keep insisting we should do. Rather, the example of the Italian movements is instructive because it shows how various left-wing tendencies can successfully keep a coalition together while staying true to their own political convictions. Some elements within the movements are pursuing political work, organizing themselves into parties (whether pre-existing or new), while other elements stress their autonomy (whether moderate or radical) from the political system, focusing instead on building alternative institutions from the grassroots up.

In this respect, it should again be stressed that a common project is not the same as a political program. To call for housing and income for everyone is not the same as demanding housing and income for everyone. Few of the protesters in Rome would be naive enough to believe that Renzi’s government would ever implement such radical demands in the first place. This is why diversity of tactics remains very important: to realize both immediate and long-term objectives, the movements will have to be strategically determined but tactically flexible. Direct action by the squatting movement, for instance, is already freeing up living space for people who have been evicted from their homes and who cannot afford to wait for future reform or revolution. Meanwhile, the more long-term organizing of other groups may lay the groundwork for larger-scale victories through more established channels, as happened with the movements’ resounding victory in the2011 referendums, in which the Italian people overwhelmingly rejected the privatization of water — another common good.

Diversity of tactics also means that the more militant activists should not endanger the safety and well-being of peaceful demonstrators (as they did during the self-defeating militant actions of October 15, 2011), while the pacifists within the movement should at the same time allow space for militant action and more confrontational tactics. In Italy, this informal establishment of a diversity of tactics within the broader coalition of social forces has led to an interesting reversal. In October 2011, militant protesters were recklessly drawing peaceful protesters into violent clashes with police while peaceful protesters were shamelessly arresting militant activists and turning them over to the same policemen. In October 2013, by contrast, militant protesters stood their ground at the Ministry of the Economy and protected the peaceful majority from police assault. The next day, the peaceful majority aligned behind the more militant elements to demand the release of six activists who had been arrested during the clashes. This is how a movement closes its ranks and effectively disarms the divide-and-rule tactics of the state’s ideological and repressive apparatus.

Adapting to the Context

Needless to say, each movement arises in its own particular context and will therefore need to devise its own particular narratives, tactics and strategies in order to build broad coalitions around the common good. There are promising signs that this is already starting to happen in some places. In Europe and North America, the Spanish movements are probably most advanced in this respect. Take the inspiring example of the Platform of Mortgage Victims (PAH), which brings together weathered activists and lawyers with migrants, workers and the unemployed, and which combines direct action (blocking home foreclosures, occupying bank offices and organizing escraches in front of politicians’ homes) with more traditional pressure tactics to repeal anti-social laws or pass legislation in defense of homeowners. At the same time, the PAH works in close cooperation with other groups and movements within the various national coordinadoras. Like the “one big project” in Italy, PAH proposes to treat housing as a human right and a common good, and similarly calls for a basic income.

In North America and other European countries, similar coalitions are possible, as long as activists manage to identify the common causes that can be leveraged in order to bring together disparate groups of people who otherwise would not speak the same political language and who would not be very inclined to work together. The trick is to identify the weak spots of the system and pinpoint the everyday grievances that lie at the root of our social ills and at the basis of the day-to-day reproduction of capitalism. This would allow the movements to challenge the system’s foundational power relations through highly targeted interventions whose impacts can be felt directly — think of the movements in Cochabamba winning the Bolivian water wars, for instance. It’s worth noting that some of these ideas are already informing struggles elsewhere, like Save Greek Water, the anti-privatization campaign in Athens.

Of course we shouldn’t read too much into the Italian experiment. While the grassroots processes look promising, the Italian left is still — as everywhere else — fighting a defensive battle against an overwhelming neoliberal offensive. Still, it seems to me that there is an important message here: perhaps one way to overcome the paralysis in which many movements now find themselves would be to start crafting a much clearer vision of where we actually want to go. Some will call this vision anarchism, others may call it socialism or communism, and most people probably don’t want to give it any name at all. But until we start translating these contested concepts into concrete objectives that can actually bring us together, rather than dogmatic abstractions that continue to tear us apart, that may just be a helpful first step in overcoming our countless differences, broadening our political horizons, and regaining a sense of direction for the tough years that lie ahead.

Jerome Roos is a PhD candidate in International Political Economy at the European University Institute and founding editor of ROAR Magazine.