Uprisings as international class warfare

bedelende vrouwOne would have to be living in a cave to not notice that things are grumbling: protest movements in the Middle East, where Tunisia and Egypt were the spark that also lit things up in other MENA countries. But there are also protests in the UK against tax-dodging corporations and in the US against union-busting Republican governors, with something similar pushed by corporate interests in the UK:

“Business organisation the Institute of Directors (IoD) has called for collective bargaining to be scrapped for teachers and NHS staff. They are among a set of proposals the trades unions have described as a “Thatcherite fantasy world”. The IoD put a series of recommendations to government to cut red tape and boost private sector growth. It also wants an automatic right to ask for flexible working to be removed, in order to increase productivity.

The IoD has put forward 24 “freebie” proposals, which it says would cost the government nothing but would benefit growth, particularly in the private sector. Among the most controversial would be the call to curb trade union negotiating power in large public sector bodies, said BBC business correspondent Joe Lynam. The IoD also suggests that workers should pay a deposit of £500 when taking their employers to industrial tribunals to deter what it describes as “vexatious claims”. A spokesman for the Trades Union Congress said the IoD’s real aim was to make life easy for directors at the expense of their workforce and to lower pay and conditions in the NHS.”

The bottom line is: it is a global class warfare. The transnational capitalist class is going for broke on the rest of us, using its wealth, political clout, complicit media figures and proxy movements like the Tea Party to conclusively complete the capture of a decaying system.

The impetus for this is not hard to grasp: a massive financial crisis caused by the financial sector, but blamed on the poor and the not-white, that made quite visible the growth of social inequalities that have been papered over by easy credit that sustained consumption.

“As the dramatic events in North Africa continue to unfold, many observers outside the Arab world smugly tell themselves that it is all about corruption and political repression. But high unemployment, glaring inequality and soaring prices for basic commodities are also a huge factor. So observers should not just be asking how far similar events will spread across the region; they should be asking themselves what kind of changes might be coming at home in the face of similar, if not quite so extreme, economic pressures.

Within countries, inequality of income, wealth and opportunity is arguably greater than at any time in the last century. Across Europe, Asia and the Americas, corporations are bulging with cash as their relentless drive for efficiency continues to yield huge profits. Yet workers’ share of the pie is falling, thanks to high unemployment, shortened working hours and stagnant wages.

Paradoxically, cross-country measures of income and wealth inequality are actually falling, thanks to continuing robust growth in emerging markets. But most people care far more about how well they are doing relative to their neighbours, than to citizens of distant lands.

The rich are mostly doing well. Global stock markets are back. Many countries are seeing vigorous growth in prices for housing, commercial real estate, or both. Resurgent prices for commodities are creating huge revenues for owners of mines and oil fields, even as price spikes for basic staples are sparking food riots, if not wholesale revolutions, in the developing world. The internet and the financial sector continue to spawn new multimillionaires, and even billionaires, at a staggering pace.”

As Rogoff notes, political corruption and pool leadership does not help, but inequalities are at the core of these global movements.

It’s a plutocrats’ world, and the rest of us are just potential sources of rent.

And things can only get worse with food prices rising to critical levels:

“At one time food was considered a poor speculative investment, because it was too perishable to be stored until market conditions were right for resale. But that changed with the development of ETFs (exchange-traded funds) and other financial innovations. (…)

As first devised, speculation in food futures was fairly innocuous, since when the contract expired, somebody actually had to buy the product at the “spot” or cash price. This forced the fanciful futures price and the more realistic spot price into alignment. But that changed in 1991. In a revealing July 2010 report in Harper’s Magazine titled “The Food Bubble: How Wall Street Starved Millions and Got Away with It,” Frederick Kaufman wrote:

The history of food took an ominous turn in 1991, at a time when no one was paying much attention. That was the year Goldman Sachs decided our daily bread might make an excellent investment….

Robber barons, gold bugs, and financiers of every stripe had long dreamed of controlling all of something everybody needed or desired, then holding back the supply as demand drove up prices.

Some economists said the hikes were caused by increased demand by Chinese and Indian middle-class population booms and the growing use of corn for ethanol. But according to Professor Jayati Ghosh of the Centre for Economic Studies in New Delhi, demand from those countries actually fell by 3 percent over the period; and the International Grain Council stated that global production of wheat had increased during the price spike.

According to a study by the now-defunct Lehman Brothers, index fund speculation jumped from $13 billion to $260 billion from 2003 to 2008. Not surprisingly, food prices rose in tandem, beginning in 2003. Hedge fund manager Michael Masters estimated that on the regulated exchanges in the US, 64 percent of all wheat contracts were held by speculators with no interest whatever in real wheat. They owned it solely in anticipation of price inflation and resale. George Soros said it was “just like secretly hoarding food during a hunger crisis in order to make profits from increasing prices.”

An August 2009 paper by Jayati Ghosh, professor at the Centre for Economic Studies and Planning at Jawaharlal Nehru University in New Delhi, compared food staples traded on futures markets with staples that were not. She found that the price of food staples not traded on futures markets, such as millet, cassava and potatoes, rose only a fraction as much as staples subject to speculation, such as wheat.”

This predatory rent-seeking behavior knows no limit, financial, moral or geographical. The flip side of this is a deliberate strategy, once explicitly stated by Alan Greenspan, to maintain higher levels of insecurity for workers, after all, the Transnational Capitalist Class (TNC) does not need workers from any specific country, especially not the US. It needs to be able to freely roam the globe for financial opportunities to extract more rent.

But the gap in wealth along with the severing of national ties have also led to ideological hardening: the TNC (or the Cloud Minders, as I often call them, following David Korten and based on a Star Trek episode) thinks very poorly of the mere mortals.

This is something I have called elsewhere The New Sociopathy. As the article where the video comes from notes: ,,“The ranks of the very seriously wealthy grow and grow, and the gap between them and the societies they once belonged to, grows wider and wider. Could it be that the Arab sheikh, the Russian oligarch and the American internet magnate have more in common with each other than they have with the people they purport to live among?”

Well, yes, that is why they are the TNC. The TNC’s control of wealth allows them to live lives completely disconnected from the rest of the world’s population (even the upper middle classes of the West). Their political clout allows them to  have national governments divest themselves of their social responsibilities towards their populations while virtually wiping out taxation in the TNC. And their control of the media makes it possible for them to build and propagate narratives that blame the various dimensions of the crisis to the poor, the regulators (if only) and the minorities.

Narrative 1:

“There has been a concerted effort to bash public sector employees by either highlighting the few instances where pensions actually are exorbitant or just making things up. Untruths about Goldman Sachs, General Electric or any other major company rarely appear in the media, and are usually quickly corrected when they do. However, exaggerations or outright fabrication are a standard practice for those who report on state and local budgets when it comes to public employees.

The public has been bombarded with stories of public employees retiring with six-figure pensions while still in their early 50s. There may be some instances of such inflated pensions, but that is far from the typical story. If we look to New York State, the hotbed of bloated public budgets, we find that the state’s main retirement system pays an average pension of $18,300 a year. For many workers this is their whole retirement income since they were not covered by Social Security.

This is the general story of public pensions. Public sector workers are often better situated than their private sector counterparts, in that they even have pensions. But study after study shows that these workers paid for their pensions with lower wages than their private sector counterparts. It is tragic that so many private sector workers cannot count on a secure retirement, but it won’t help them to make workers in the public sector equally insecure.”

Narrative 2:

“When families take out a mortgage in the middle of a housing bubble, which may have been misrepresented at the time of sale, the homeowner has an obligation to repay the money to the bank. When people take on credit card debt, they absolutely have an obligation to repay the bank — even if it means changing the rules after the fact.

However, when the government signs a contract with workers, it doesn’t have to pay the workers’ pensions if it proves to be inconvenient. Of course, we may also throw in the fact that when the flood of bad mortgage loans issued by the banks threatened to push them into bankruptcy, the Treasury and the Fed give them trillions of dollars of loans at below market interest rates.”


“There certainly seems to be a pattern here. The story has nothing to do with preferences for the market or government intervention. The picture here is very simple: The rules get changed whenever it is necessary to make sure that money flows upward from ordinary workers to the rich. In 21st century America, upward redistribution seems to be the guiding principle.”

Narrative 3: the public debt

“Nothing better shows corporate control over the government than Washington’s basic response to the current economic crisis. First, we had “the rescue”, then “the recovery”. Trillions in public money flowed to the biggest US banks, insurance companies, etc. That “bailed” them out (is it just me or is there a suggestion of criminality in that phrase?), while we waited for benefits to “trickle down” to the rest of us.<

As usual, the “trickle-down” part has not happened. Large corporations and their investors kept the government’s money for themselves; their profits and stock market “recovered” nicely. We get unemployment, home-foreclosures, job benefit cuts and growing job insecurity. As the crisis hits states and cities, politicians avoid raising corporate taxes in favour of cutting government services and jobs – witness Wisconsin, etc.

Might government bias favouring corporations be deserved, a reward for taxes they pay? No: corporations – especially the larger ones – have avoided taxes as effectively as they have controlled government expenditures to benefit them.”

In other words, the states are short of money not because they are too burdened by pensions and benefits but because corporations do not pay their proper share of taxes, as the rest of us (including public employees) do. It is the ideological triumph of the TNC that the general public has accepted their narrative of bad teachers, lazy government workers who need to be trimmed down.

And this how the Cloud Minders think of us.

The only solution is massive, global protest movements, a reverse shock doctrine directed at the TNC. It is in this context that the existence of organizations like Wikileaks become essential along with Net Neutrality. But that, in itself will not be enough. Fighting this means putting boots on the grounds and protesting not just the individuals (such as the Governor of Wisconsin or the Koch Brothers) but the entire system. And yes, such affairs are usually bloody. But what are the options? Obama is not going to be the labor’s knight in a shining armor.

  1. 3

    Pure retoriek
    Some economists said the hikes were caused by increased demand by Chinese and Indian middle-class population booms and the growing use of corn for ethanol. But according to Professor Jayati Ghosh of the Centre for Economic Studies in New Delhi, demand from those countries actually fell by 3 percent over the period; and the International Grain Council stated that global production of wheat had increased during the price spike.

    Maar wiki zegt over biofuels
    the U.S. market is expected to grow to upwards of 2 billion US gallons (7.6×10^6 m3) by 2010.(…)In 2004, almost 30 million US gallons (110×10^3 m3) of commercially produced biodiesel were sold

    (Het is ter illustratie)

  2. 4

    @JSK; Ja, maar vreten is redelijk primair, terwijl gesubsidieerd mais of koolzaad produceren ten behoeve van ethanol of biodiesel, nogal artificieel is. Haal morgen de subsidie eraf (en als de prijzen van voedsel genoeg stijgen kan dat zo maar gebeuren (al moeten ze zich in het MO dan wel effe rustig houden)), en boem – weg claim op landbouw-capaciteit.

  3. 7

    Verwachting voor de VS: risico op 15 tot 25% dalingen van huizenprijzen.

    Combineer dat met $100 voor een barrel olie — de grens waarboven energieprijzen remmend gaan werken en we hebben een nieuw 2008-scenario. Met het verschil dat bailouts zoals in 2008 veel harder bevochten zullen moeten worden (of d’r moet eerst een systeembank over ’t randje gaan).

  4. 8

    Meh. Dit weten we allemaal. De vraag is: wat kunnen we er echt aan doen? In Egypte is het poppetje (Moebarak) misschien weg, de poppenspelers (Het Egyptische leger), zijn er gewoon nog. Ik zie niet hoe we van deze ‘TNC’ af gaan komen. Wat niet wegneemt dat ik deze onderdrukkende honden graag op hun plaatst gezet zou zien.

  5. 10

    De poep slaat tegen de ventilator, de wereld is niet gek:


    Kan even duren, maar de regerende klasse ontkomt niet aan het collectieve geweten van miljoenen burgers die ieder stukje informatie zullen omkeren om zich met informatie te wapenen en uit alle macht zullen proberen de toekomst naar hun hand te zetten in een werled waarin zij zich bedonderd voelen door diezelfde regerende klasse.

    De oude methodes werken niet meer. De media heeft haar grip op de massa verloren. Nieuwe generaties zullen hun plaats in de geschiedenis opeisen en worden zich steeds meer bewust van de macht van het getal.

    In Egypte begrijpen ze dit. In Nederland lopen we altijd een beetje achter bij de rest van de wereld.