Blackmailing Bankers Now Stage A Coup In Greece

Strangulated Greece now experiences a coup by blackmailing bankers. It’s a show of bankers’ democracy, a worst form of democracy in the Age of Crises. It’s an invasion by bankers.

Honorable bankers have imposed their demands on the people in Greece. It’s their reciprocal democratic measure to the Greek people’s practice with democracy. They love to humiliate people, they love to wreck countries, they love to pauperize people. These acts make them rich and powerful.

The conditions imposed on Greece are already public. It’s a regime of measures aimed at punishing the Greek people, hurting their honor. The bankers are laughing with the pride of powerful: We can do whatever we want.

Casting away all veils of shame and hypocrisy they demanded Greek public property worth billions of dollars to be placed outside of Greece. There was a suggestion that $56 billion (about 50 billion euros) of Greek public assets be placed in an independent trust based in Luxembourg, which would be out of reach of Greek politicians, the proceeds of which from privatizations would go directly to pay off debts. An appropriate bankers’ proposal! The arrogant bankers don’t bother the way their demand actually takes shape: A robbery. Alexis Tsipras, the Greek prime minister, has said: We averted the transfer of public property abroad, we averted the plan to cause a credit crunch and the collapse of the financial system.”

The 17-hour Brussels-bargaining shows very significant parts of a part of the world capitalism and a few facts:

1. Division within the bankers’ camp.
2. Weakness and vulnerabilities within the camp.
3. Vulnerability of the eurozone project.
4. The bankers’ brutal character.
5. The bankers’ intolerance with people’s verdict.
6. Democracy is not universal. There are bankers’ democracy and people’s democracy. Bankers’ democracy is dictatorial in case of people. Bankers’ democracy now dictates the legislative assembly of Greece. A flagrant violation. But the bourgeois democratic world doesn’t find there any trampling of democracy.
7. Limit of bourgeois democracy is narrowing down in the Age of Crisis.
8. Sovereignty of countries is defined and demarcated by bankers. Sovereign power of legislative assembly? Bankers don’t bother with it. They need money.
9. There are limit to powers of bankers. They can’t demolish all resistances. They can’t stand slightest resistance. Resistance with a politically aware, organized people under the guidance of a matured leadership and with united front is invincible.
10. Its geopolitical aspect is very significant.

The bankers had to make compromise. It was difficult for them to reach a compromise. They also had to cede a space: A 95 billion dollars (86 billion euros) aid to Greece in the next three years to keep the eurozone intact, to keep Greece within the eurozone.

The hashtag #ThisIsACoup, says an AFP report, is now trending widely among users of internet in Greece, France, Germany and Britain. They claim: “Greece was effectively being stripped of fiscal sovereignty.”

According to the AFP report KostasKainakis, a marketing lecturer in Athens comments: “Germany is destroying Europe once again”. From Britain, AllanSkerratt, a non-partisan retired soldier and ex-teacher opines: “The Germans could not do it with tanks so now they try it with banks [and are] trying to STEAL Greek assets BrITS MUST vote to get out”. Barbara Lochbihler, a member of the European Parliament for Germany’s Greens party, tweets: “They talk about trust. Only to draft a proposal that is pure humiliation. Brilliant idea.” Paul Krugman, the Nobel-winning economist, writes: “The trending hashtag #ThisIsACoup is exactly right. This goes beyond harsh into pure vindictiveness, complete destruction of national sovereignty, and no hope of relief.” “It is, presumably, meant to be an offer Greece can’t accept; but even so, it’s a grotesque betrayal of everything the European project was supposed to stand for.”

It was a bitter struggle in Brussels. There were extreme conservative forces bent on humiliating and punishing Greece for the weak economy’s stand with dignity. Tsipras said: “We found ourselves before difficult decisions, tough dilemmas. We took the responsibility of the decision in order to avert the implementation of the more extreme aims of conservative circles in the European Union.” Nikos Filis, the parliamentary spokesman for the Syriza, said on ANT1 TV Monday: Greece is being “waterboarded” by eurozone leaders. He accused Germany of “tearing Europe apart” for the third time in the past century. The observation tells the weakness within the eurozone. It’s not the German strength; it’s the strength of bankers as they fear their weakness that they like to hide with their show of strength.

A part of the Greek people’s struggle has come to a point. The episode – fight the bankers’ blackmailing and coup – is political. Its financial and economic aspects will appear in a meaningful way if its political aspect is not missed. It’s bankers’ politics. It’s bankers reign. The bankers’ politics is to be faced with people’s politics. People’s solidarity movement in countries should be widened. Bankers reign should be exposed. The most valuable lesson of the incident is political, the question of democracy. The relation between democracy and economy, and control on economy and politics are to be highlighted among the citizens.

It was a steadfast fight waged by the people in Greece although a part of mainstream media is propagating the deal as capitulation. But they deny admitting that the extreme conservative forces within the EU failed to move with their design: Grexit. They know their weak spot. Next time, the people will stand again with the lessons learned. There is possibility that the awakening will be in countries in Europe. Spain is already experiencing the trend.

Going back to Davos as questions haunt

THE snow-capped Swiss village Davos is now free of 2,655 leaders, billionaires, tech-knights, financesters, economists. Weeks ago, their presence made Davos thriving as they joined the 43rd meeting of the World Economic Forum 2013 there. In terms of money- and political-power, the deciding-personalities participating in the summit are equivalent to emperors.
In Davos, the WEF 2013 witnessed meetings and ‘interactive sessions’. Many of these, as a press report said, were not ‘fully on-the-record (or even open to humble reporters)’. Discussions on the global financial and energy contexts, de-risking Africa, this century’s NGO model, the Moore’s Law, computing power doubles every two years or so, ‘the employment effects of technology’, jobs being turned obsolete by technology, ultra-superlight material, etc stuffed the summit. Bankers’ session and an initiative to fight malaria, tuberculosis and AIDS were also there. Axel Weber, chairman of the Swiss bank UBS, Tidjane Thiam, CEO of the insurance group Prudential, Zhu Min, deputy managing director of the International Monetary Fund, Paul Elliott Singer, founder and CEO of the hedge fund Elliott Management, and Andrey Kostin, president of the VTB Bank, one of Russia’s leading financial groups, contemplated strategic shifts and transformations changing the financial world. Davos discussed almost all important issues the world now faces, from economy to energy to environment. Finance was at the centre of all discussions that went on for hours. Observations, warnings, predictions were also made.
Gloomy crisisphere covering the last few WEF summits was absent in the 2013 summit. But there are questions that are haunting the system — world capitalism — the summit participants represent.

Depressing facts
DEPRESSING news accompanied the summit as Angel Gurria, secretary general of the Organisation for Economic Cooperation and Development, predicted a ‘hesitant recovery’. Recession was clinging to the eurozone and Japan. No one could confidently say whether euro crisis was over or not. The consultancy firm PWC’s survey found: As far as business confidence is concerned there is a global double-dip recession.
David Cameron announced Britain’s in-out referendum on European Union membership in 2017. Laurent Fabius, the French foreign minister, made a response: ‘If Britain wants out of the EU we will roll out the red carpet for you.’ Fabius continued: There could be no ‘Europe a la carte’ in which a country picked which rules applied to it. ‘Imagine we are a football club. You join the football club — but once you are in, you cannot say “Let’s play rugby”,’ he added. The French tone says something.
But the French are in trouble. In a radio interview the French labour minister Michel Sapin’s revelation, earthly, not divine, came: France ‘is a totally bankrupt state.’ The disclosure shook many. Banque de France said: There is a flight of capital. Business confidence in the French manufacturing industry, according to ISEE data, unexpectedly fell in January.
Portugal ‘is in the throes of the worst recession since 1975,’ said Diário Económico, the country’s economic and financial newspaper. In its third straight year of recession, the country drifted to privatising public schools, slash education budget, cut around 50,000 sector jobs. An IMF document virtually suggested ‘the end of a free and inclusive public school system.’ With a jobless rate of 16.3 per cent, more than 2 per cent of its population has emigrated in the past two years to Switzerland, the Netherlands, the United Kingdom, Germany, Angola, the oil-rich former Portuguese colony, and Mozambique; 240,000 persons since 2011. Most of them are young, highly educated. It’s a reverse, as they headed to the former colonies, variety of brain drain capitalism has not contemplated. With this trend what type of power does capitalism show? It now fails to retain brilliant minds in a developed economy.
With Spain’s worsening recession and shrinking GDP the fifth austerity package in a year was approved. The aim is to reduce the second largest, or a bulging, budget deficit in the eurozone.
The NRC Handelsblad, an evening daily from the Netherlands, said: The country ‘has fallen into its third recession’ since the debt crisis roared in 2008.
Further depressing news followed within weeks the Davos meet concluded.
A sceptic IMF apprehended: In 2013, a ‘mild recession’ would visit the eurozone. Warning came from the European Commission: In 2013, the eurozone recession will persist, the eurozone economy would shrink 0.3 per cent; Spain, France, Portugal are failing to cut their deficits to agreed targets. La Vanguardia, one of Spain’s leading dailies, wrote: ‘Worsening recession in the eurozone’. ‘The eurozone has become a recession zone,’ said La Tribune, one of leading business and financial dailies from France.
For the first time since 1978, an Aa1, downgraded credit rating, replaced the UK’s top rating of AAA.
Népszava from Budapest shocked its readers: Recession in Hungary is the fourth worst in Europe. Greece, Portugal and Cyprus exceed the country as the economy shrank 1.7 per cent in 2012. The daily said: ‘End of a fairy tale: economy goes into freefall.’ Népszava referred to a claim made in 2012 by the country’s economy minister György Matolcsy: ‘The Hungarian fairy tale or the Hungarian example will be successful within a year.’
‘Czech state sinks into longest recession in history,’ said Hospodářské noviny, the country’s leading daily.
It appears that depressing facts were joining hands to dominate the Davos participants’ jocund imagination. And, it appears that it’s not only a eurozone case; its wings have been unfolded over the countries identified as transition economies, the societies that formally sold their souls to the shylocks of world capitalism.

Global risks
Experts cautioned the summit.
Climate change, predicted New York University economist Nouriel Roubini, will cause tremendous economic upheaval. Tim Palmer, Oxford University physicist, apprehended a warmer Earth leading to ‘catastrophic consequences for humanity’. ‘Water is the new oil,’ said Vali Nasr, dean of the School of Advanced International Studies at Johns Hopkins University. Many countries will start running out of water in the coming years, added Nasr. All the predictions and warnings, in ultimate analysis, move down to the root: capitalism, its ever expansionary character, its ‘psychology’ of profit at any cost.
Global Risk 2013, the famous Insight Report of the WEF, assessed, identified top risks, impact, centres of gravity, etc. The report presented Global Risk Landscape and Global Risk Map. Based on an annual survey of more than 1,000 experts from industry, government, academia and civil society the Global Risks 2013 presented a landscape of 50 global risks.
Severe income disparity, the respondents observed, was rated the most likely to manifest over the next 10 years. Major systemic financial failure was the risk rated as having the highest impact. Two other global risks appearing in the top five of both impact and likelihood were chronic fiscal imbalances and water supply crisis.
Continued stress on the global economic system and increasing stress on the Earth’s environmental system, the Global Risk Report assumed, could trigger the ‘perfect global storm’ with potentially insurmountable consequences. A sudden and massive collapse on one front, it said, is certain to doom the other’s chance of developing an effective, long-term solution. It mentioned likelihood of future financial crises and natural catastrophes. On the issue of climate change it felt: It is possible that we have already passed a point of no return.
Respondents in the survey, and the report itself also, revealed the undeniable fact told many times: Income disparity, systemic financial failure, future financial crisis, perfect global storm, etc. These are ‘products’ of capitalism, and capitalism can’t live and expand without creating disparity. Gradual ascendance of monopoly finance capital is bringing in financial failures. Even, it is bringing in failure of sovereignty of independent countries. In capitalism, capital is the only sovereign, only its sovereignty is guarded, country’s/state’s sovereignty is utilized to secure sovereignty of capital(s). Country’s/state’s sovereignty is shamelessly compromised in the interest of capital(s). Capitalism’s history bears the facts.
Greece is one of the recent examples, which is also an example of crude intervention by finance-force. Probably political scientists are redefining the terms ‘intervention’, ‘coup’, ‘regime change’. The present financial crisis has expanded area of this modus operandi of capitalism from poor, former colonies, neo-colonies, to developed capitalist countries. However, this bears risks, especially in socio-political area.

Lagarde’s choice
‘DO NOT relax,’ advised Christine Lagarde, the IMF boss. The advice came in Davos. She warned the eurozone was still in ‘a very fragile situation’. At the end of the summit, she said a ‘fragile and timid’ recovery depended on officials in the powerhouse economies of Europe, the US and Japan making ‘the right decisions’. Lagarde suggested European officials’ overseeing reforms so that failed banks don’t add to government debt through bailouts. These were a few of her choices.
So, there is, as the IMF boss suggested, need for (1) bureaucrats’ authority over bank capital, (2) nourishing and chiding of, control over and imposition of tougher, centralized supervision of bank capital as banks sometimes create hurdle on the path of government, which is tasked to smoothen the path of capital/bank. Doesn’t it mean that bank capital should not be allowed to freewheel? Doesn’t it mean that bank capital is not always wise? And, the statement, not by any opponent of capitalism, may sound strange although that’s the fact: mere employees/governance system, officials, engaged to serve capital is asked to oversee employer, capital. It’s a show of capital’s self- degenerative and self-destructive power.
Lagarde’s statement suggests that neither market nor capitalists, but bureaucrats, who are at the payroll of either capital or capital’s ruling machine — state — have the capacity, skill, power and authority to make ‘right decisions’. It, if factual, carries meaning and implication touching areas of capital’s limitation, breakneck competition between its parts, political ramification, etc. Moreover, shall this suggested mechanism ever work? It’ll not work as, in capitalism, despite separation of economic and political institutions economic interests ultimately dictate political mechanism including bureaucracy; in the present case, the Brussels bureaucracy and international bank bureaucracy.
Citing the need of ‘openness, inclusiveness and accountability’ (accountability in the financial sector — cleaning up elements such as shadow banking) Lagarde urged policymakers to do more to tackle inequality. But she, probably, preferred to forget that capitalist system is neither open nor inclusive nor accountable. The Great Financial Crisis has once again exposed the fact. Financial sector itself prefers shadow as shadow provides it an ideal setting to operate. It gets exposed during crisis. Investigations/inquiries on the GFC have uncovered this fact. Policymakers can’t tackle inequality as the system to which the policymakers are bonded lives on inequality while the system breeds inequality.
She cited unemployment as a vital issue for many countries. But she denied admitting that capitalism fails to eradicate the disease of unemployment as it needs unemployment, as it needs a reserve army of labour.
Policymakers should do more to help women enter the economy, she said. It’s known to her that during financial crisis and stagnation women are exploited more ruthlessly. Sometimes, it goes beyond human tolerance.
Lagarde, like a visionary, hoped the world can climb away from its recent ills to a better future, if leaders can embrace the values and principles of openness and collaboration at a new moment in history.
She knows it well that the system to which the leaders are tied can’t ‘embrace the values and principles of openness and collaboration’ as the system is rife with competition, the system worships the values and principles of competition, and competition compels the system to be a close, secret system governed by a few. Examples are in abundance, from any small company to any multinational corporation producing consumer goods or weapons to any energy demon to any financial gambler to any bank capital to any media giant to any defence contractor, etc, from any merger deal to any energy contract to any armaments sale to any land or food speculation venture to a section of lobbyists’ activities, from economic to financial to political deals, from ideological propaganda campaign to disinformation blitz to aggression/interference plan having roots in economic interests/plunder.
Identifying her biggest challenge in 2013, Lagarde said: It’s ‘keeping the momentum’. She will not be able to keep momentum unless the economy generates momentum, unless the economy gets out of stagnation, and in this time, getting out of stagnation is a difficult puzzle.

Hopes
YET, there are hopes and expectations nourished by a quarter. It’s told: ‘It’s time for a better capitalism’; ‘But what can — and hopefully will — emerge from the rubble is a capitalism that creates jobs, creates value, provides security and promotes fairness; the civil and civilised capitalism that was always promised’ (Deborah Orr, ‘It’s time for a better capitalism, one that creates jobs and provides security’, Guardian, December 29, 2012).
It’s also told: ‘[T]he market is making a pro-social and humane decision.’ The reason cited for such ‘pro-social and humane decision’ is: ‘It is choosing to sacrifice profits in order to save itself.... [C]ompanies slashing their profits in order to keep ticking over... [T]he recession is teaching businesses that people really are more important than profit (or at least that if people don’t have jobs then they don’t have customers). The rich are realising that they can’t keep getting richer if the poor keep getting poorer’ (ibid).
At least a bit, in an evasive way, of facts, is getting uncovered from the expressed hope: sacrifice to save self, slash to keep on, help poor to get rich. Behind this ‘benevolence’ are the following facts: (1) much profit endangers profiteer and stops ‘ticking over’; (2) profit turns more important than people; (3) the rich try to get richer by making people poorer.
Another fact is hidden behind the said ‘pro-social and humane’ attitude: Sacrificing for self-survival is not sacrifice, it’s self-serving; slashing profit to keep ticking over is preparing ground to make more profit including the slashed part; help people survive so that they turn consumers is to ensure profit making; and help the poor so that they don’t turn poorer is to ensure getting richer and securing the system that makes rich richer and the poor poorer; and it’s virtos post nummos, virtue after money. It’s a crude trick with a sophisticated face and a tax thief’s soul. Have not a number of tax thieveries by the rich already been exposed in a number of developed capitalist countries a few of which always advise a number of countries on ways to cut down corruption and increase their tax base? As of 2010, the top 1 per cent of the wealthiest people in the world had hidden away between $21 trillion to $32 trillion in secret tax exempt bank accounts (‘Tax Havens: Super-rich hiding at least $21 trillion”, BBC News, July 22, 2012).
It’s dreamed: ‘It is time now for capitalism to start doing all the things it claimed to do. Like providing jobs. Like offering a fair day’s pay for a fair day’s work. Like standing against protectionist monopolies. Like increasing prosperity and raising standards of living for all. Like providing the foundations of long-term stability instead of the conditions for short-lived booms’ (ibid).
CAPITALISM can’t do ‘all the things it claimed to do’ other than claiming larger, ever increasing profit as it doesn’t have the capacity to move along the other path as that move will nullify it. To capitalism, a fair pay is that amount of money, which is needed to keep labour’s capital reproduction capacity, not more than that as handing over more than that amount of money means slashing down profit, which is soul of capital. And, who can survive without soul? Capital can’t stand against protectionist monopoly. History of the rise of protectionist monopoly, an ‘output’ of concentration and centralisation of capital, shows its irreversible journey. Capital can’t increase prosperity and living standard for all as that cuts down its share, and capital’s sole motive is to ever increase its share. [Short-lived prosperity of a broader part of commoners in a country or a group of countries should not be wrongfully cited as that prosperity is in exchange of pauperising people and plundering nature in other lands, and that is cruder and crueller part of story. Moreover, a task of defining a character errs if it’s based on a single case, i.e. capitalism can’t be analysed on the basis of a single industrial unit or a single ‘benevolent’ capitalist.]
However, it’s now admitted: ‘[F]ree-marketeers maintained a Machiavellian attitude ....As has too often been the case under neo-liberalism, the large companies that cry “free market” are the very ones who use their domineering muscle to ensure that markets are loaded in favour of their own profiteering interests’‘Tax Havens: Super-rich hiding at least $21 trillion”, BBC News, July 22, 2012).
It’s told: ‘Capitalism, in the late 20th century, became a monster. Its idols were people who took over other companies, destroying jobs, value, security and fairness as they made profits for themselves and their shareholders. The results are now hideously apparent’ (ibid).
Now, the fact comes up as ultimately it’s never possible to ignore fact.

Haunting questions
CHRISTINE Lagarde discussed ‘Resilient Dynamism’, the theme of Davos 2013. Mainstream, worshippers of capitalism, still banks on the system, its resilience and dynamism.
But the system’s resilience and dynamism are declining. Incidents that the system produces, experiences, and remedies that the system innovates are the evidences. Its each new crisis is wider and deeper, more threatening and carries more devastating power than the earlier ones. The first crisis having national proportion was in 1825-1826. The next one was in 1836-1837. These two and the following crises are in no way comparable to the latest one — the Great Financial Crisis — across continents: economies went/nearly-went bankrupt, too-big-to-fail financial giants melted down/tumbled, the total amount of bail out money, level on international/intercontinental initiatives, width and forcefulness in brutal imposition of austerity programmes, and the political crisis that followed in countries.
Now, the conditions for stagnation are more powerful and dangerous and have turned wider than the ones Engles mentioned in his famous book on the English working class: ‘The anarchic conditions of modern production and distribution of products, conditions of production which are governed by profit instead of by the satisfaction of needs, conditions under which every one works on his own independent line in the endeavour to enrich himself — such conditions cannot fail to result in frequent stagnation.’
Stagnation rooted deeper is now starker.
Global risks identified by the WEF reports over the last few years dwell closely. The ‘Evolving Risk Landscape’, as the 2013 report identified, shows ‘Global Risks in Terms of Impact’ over a seven-year period: 2007-2013. In the years 2007-2010 the first GRTI was asset price collapse. In 2011, it was fiscal crises. It evolved into major systemic financial failure in 2012 and 2013. In all these seven years, retrenchment from globalisation, chronic fiscal imbalances, extreme volatility in energy and agriculture prices were also in the list of top 5 GRTIs, other than those already mentioned. These were paired by interstate and civil wars/geopolitical conflict. The evolving picture turns grim as there are environmental issues also: water supply and food shortage crises, climatological catastrophes, pandemics, chronic disease. These are closely related, and one influences the rest. [In the Age of Crisis an almost similar pattern has been identified.] Of these, respondents in the Global Risks Perception Survey rated major systemic financial failure ‘as the economic risk of greatest systemic importance for the next 10 years.’ Should not an inquiry be made into the cause of systemic financial failure?
A grave setting emerges if only geopolitical issue as discussed in the WEF report is focused. In the geopolitical category, among others, critical fragile states, failure of diplomatic conflict resolution, global governance failure, militarisation of space, entrenched corruption and crime, terrorism, are included. (Considering the question of length of this article, environmental/climate and health issues identified in the report are skipped here.)
A graver scene comes forth if these (briefly mentioned in the above two paragraphs) are connected with competition, which ultimately takes political and military conflicts, i.e. war, intervention, instigated civil war, engineered civil strife as these turn the ultimate tool to resolve conflicts coming out of competition. The scene carries dangers that the competing interests ultimately can’t resolve. The danger ultimately hurts people.
So, despite ‘Resilient Dynamism’, perceived or dreamed by the mainstream, of the system the system is being haunted by unattended questions, its unresolved contradictions, within the system.
‘Death of starvation’, said Marx in his Inaugural Addresses of the Working Men’s International Association in October 1864, ‘rose almost to the rank of an institution, during this “intoxicating” epoch of economical progress, in the metropolis of the British Empire. That epoch is marked in the annals of the world by the quickened return, the widening compass, and the deadlier effects of the social pest called a commercial and industrial crisis.’
Now, about 150 years later, the reality has worsened. ‘The intoxicating ... economic progress’ is being enjoyed by a super rich class in more countries, not only in a single empire, commercial and industrial crisis is turning into financial, fiscal, political crises that pushes bankers to openly overthrow elected government (regime change in Greece, etc. countries), crisis pushes states to the brink of bankruptcy, poverty overwhelms societies once considered rich and free from starvation.
Consider the case of Greece. Only a few years ago, this country organised the Olympic Games, and now, it is reeling under poverty and starvation with suffering people, ailing hospitals and schools.
In Spain, the economy constructed a magnificent real estate boom with towns and mega-projects, and now these are lying vacant or only being dwelt by ghosts, and people going down the ladder of poverty are being evicted from their homes.
In the UK, a report exposed the way patients suffered although, only a few months ago, the economy proudly showcased its National Health Service in an Olympic Games session. ‘There were patients so desperate for water that they were drinking from dirty flower vases,’ prime minister David Cameron told parliament in a statement on the report. The report by lawyer Robert Francis, said: ‘This is a story of appalling and unnecessary suffering of hundreds of people.’ ‘They were failed by a system which ignored the warning signs and put corporate self-interest and cost control ahead of patients and their safety,’ Francis said in a televised statement as his report was published. ‘Elderly and vulnerable patients were left unwashed, unfed and without fluids. They were deprived of dignity and respect. Some patients had to relieve themselves in their beds when they were offered no help to get to the bathroom,’ he said. Some patients were left in excrement-stained sheets and some who could not eat or drink without help did not receive it. Medicines were prescribed but not given. This happened between January 2005 and March 2009 in an advanced capitalist country.
The poor, the homeless, the student debtors, the hungry children in the US are being discussed. About eight years ago, the Human Development Report 2005 by the UNDP, found: ‘A baby boy from a family in the top 5% of the US income distribution will enjoy a life span 25% longer than a boy born in the bottom 5%’ (p 58). The report added: ‘The infant mortality rate in the United States compares with that in Malaysia — a country with a quarter the income. Infant death rates are higher for African American children in Washington, DC, than for children in Kerala, India’ (p 59).
Now, the reality of a rich land with cruel poverty comes to light with more ‘stories’, statistics and Jonathan Kozol’s book Fire in the Ashes: Twenty-five Years Among the Poorest Children in America. The book talks about children and families trapped in poverty in the country.
The following ‘stories’ are only two of many:
ABC News reported on November 29, 2012: Three years after the death of Jermaine Edwards, his mother, 61-year-old Ella was still on the hook for his student loans. Jermaine went to college to study music production, and Ella agreed to co-sign his student loans to help him attend school. Jermaine died of natural causes in 2009 at age 24, leaving his mother responsible for the loans. ‘That’s when American Education Services and National Collegiate Trust turned my son’s dream into a nightmare for me and the two year old son he left behind,’ Ella wrote in the petition to forgive the loans. Her son had three student loans when he died, two federal and one private. The two government loans were forgiven, but the private loan company was refusing to forgive the loan.
On December 24, 2012, an AP report from Columbia, Missouri said: ‘University of Missouri junior Simone McGautha works three campus jobs and has accumulated $11,000 in student loans as she seeks to become the first in her family with a college degree. So when McGautha learned about a new campus food pantry for needy students, the 19-year-old was happy to have the help. “I use every bit of money I have for basic needs,” the Kansas City native said. “I don’t have family putting money in my bank account...” The student-run Tiger Pantry is among a growing number of programmes at university campuses. ... The pantry.... has given free food to nearly 150 people and their families, and an additional 100 people have expressed an interest. Food recipients include nearly three dozen graduate students and a similar number of university employees, as well as a handful of professors. Student organisers modelled the programme on a similar effort at the University of Arkansas known as the Full Circle Food Pantry. ... Tiger Pantry receives some money from student fees but primarily relies on donated food. Students can drop off donations in large bins around campus, and the local food pantry provided 2,500 pounds of food to help the Tiger Pantry get started. The University of Mississippi and Auburn University are also starting campus food pantries, joining schools such as Central Florida, Georgia, Iowa State, Oregon State and West Virginia. The University of California Los Angeles deploys “economic crisis response” teams that assist students struggling to pay bills and rent or who live on the streets.’
In addition to these, a decay in governance has gripped many states, once many minds considered, highly developed democracy: Curtailment of labour and democratic rights including practices of increasing surveillance and suppression, harassment of/repression on immigrants as the governing systems face increasing crisis in subduing its subjects.
At the same time, starvation is being experienced by not only by prisoners of wage in underdeveloped countries. It is also part of life in a number of developed countries. It is being experienced by (1) a vast population, victims of capital induced civil war, intervention, etc., (2) victims of profit hungry agriculture, trade, natural resource exploitation, speculation with food, (3) victims of environmental degradation and climate crisis. This is a regular phenomenon around the world. Reports of UN and non-governmental organisations concerned with the issues and press reports regularly cover these developments.
Samir Amin succinctly depicts the global scene in his essay ‘Seize the Crisis’: ‘[T]he capitalism of oligopolies; the political power of oligarchies; barbarous globalization; financialization; US hegemony; the militarization of the way globalization operates in the service of oligopolies; the decline of democracy; the plundering of the planet’s resources; and the abandoning of development for the South.’
Another contradiction lives there in the global capitalist system: ‘[A] globalizing economy within a nation-state based political system.’ (William I Robinson, ‘Global Capitalism Theory and the Emergence of Transnational Elites’, working paper no. 2010/02, UNU-WIDER, January 2010).
Trouble turns more complicated as the system faces questions of legitimacy. ‘[T]he crisis that exploded in 2008 with the collapse of the global financial system has exacerbated crises of legitimacy in many countries ... and seriously undermined the ability of transnational elites to reproduce their authority’ (ibid).
The reality carries questions that grow from within the system and persistently haunt the system. But the Davos 2013 summit failed to answer these as finding answer to the questions demands a journey to the root of the problems and an inquiry into the root demolishes premise of the system. This destiny, demolition of the system’s premise, prohibits the system to make an inquiry despite being haunted by unruly questions.

The Benghazi-Botch And No Retreat Now

A few unresolved old questions have once again been raised by the tragic incident in Benghazi.

Pankaj Mishra in his article “America’s Inevitable Retreat From the Middle East” in the September 24, 2012 issue of The New York Times said: “The drama of waning American power is being re-enacted in the Middle East and South Asia after two futile wars and the collapse or weakening of pro-American regimes.”

Mishra, author of From the Ruins of Empire: The Intellectuals Who Remade Asia, continued with his dissection: “[T]he United States […] missed the central event of the 20th century: the steady, and often violent, political awakening of peoples […] This strange oversight explains why American policy makers kept missing their chances for peaceful post-imperial settlements in Asia.”

He pinpoints a few embarrassing facts: “[President Woodrow Wilson], a Southerner fond of jokes about ‘darkies’, believed in maintaining ‘white civilization and its domination over the world’. Franklin D. Roosevelt was only slightly more conciliatory when, in 1940, he proposed mollifying dispossessed Palestinian Arabs with a ‘little baksheesh’.” Roosevelt changed his mind after meeting the Saudi leader Ibn Saud and learning of oil’s importance to the postwar American economy.”

A practical problem is identified by Mishra: “Given its long history of complicity with dictators in the region […] the United States faces a huge deficit of trust”.

He mentions another embarrassing incident that expresses a dilemma also: “It is not just extremist Salafis who think Americans always have malevolent intentions: the Egyptian anti-Islamist demonstrators who pelted Hillary Rodham Clinton’s motorcade in Alexandria with rotten eggs in July were convinced that America was making shady deals with the Muslim Brotherhood.”

On the basis of a trend Mishra assumes “a strategic American retreat from the Middle East” as he observes, “the limits of both American firepower and diplomacy have been exposed. Financial leverage, or baksheesh, can work only up to a point […]”

This leads Mishra to conclude: “It is the world’s newly ascendant nations and awakened peoples that will increasingly shape events in the post-Western era. America’s retrenchment is inevitable. The only question is whether it will be as protracted and violent as Europe’s mid-20th century retreat from a newly assertive Asia and Africa.”

The opinion is accompanied by a report in the September 24, 2012 issue of The New York Times: “Attack in Libya Was Major Blow to C.I.A. Efforts”. The report said: The attack in Benghazi “has dealt the CIA a major setback […] at a time of increasing instability in the North African nation.”

It informed: “Among the more than two dozen American personnel evacuated from the city after the assault […] were about a dozen C.I.A. operatives and contractors, who played a crucial role in conducting surveillance and collecting information […]” The CIA’s surveillance targets include Ansar al-Sharia and suspected members of Al Qaeda’s affiliate in North Africa. “Eastern Libya is also being buffeted by strong crosscurrents that intelligence operatives are trying to monitor closely”, said the report.

Quoting an American official the report said: “It’s a catastrophic intelligence loss. We got our eyes poked out.” “Senior American officials acknowledged the intelligence setback, but insisted that information was still being collected using a variety of informants on the ground, systems that intercept electronic communications like cell phone conversations and satellite imagery. ‘The U.S. isn’t close to being blind in Benghazi and eastern Libya’, said an American official.”

The NYT report informed: Within months of the start of Libyan upheaval in February 2011, the CIA began building a meaningful but covert presence in Benghazi. American intelligence operatives helped train Libya’s new intelligence service. Though the agency has been cooperating with the new post-Qaddafi Libyan intelligence service, the size of the CIA’s presence in Benghazi apparently surprised some Libyan leaders. The deputy prime minister, Mustafa Abushagour, was quoted in The Wall Street Journal last week saying that he learned about some of the delicate American operations in Benghazi only after the attack on the mission, in large part because a surprisingly large number of Americans showed up at the Benghazi airport to be evacuated. The CIA personnel carried out their missions. The New York Times agreed to withhold locations and details of these operations at the request of Obama administration officials, who said that disclosing such information could jeopardize future sensitive government activities and put at risk American personnel working in dangerous settings.

Mishra will appear logical if one listens to Mohammed Morsi, Egypt’s president, and Barack Obama, US president, along with the NYT’s Benghazi-report and recent incidents in Egypt, Libya and Tunisia.

On the eve of his first visit to the US as Egypt’s president, Mohammed Morsi said he will demonstrate more independence from the US in decision-making. He told Washington not to expect Egypt to live by its rules. Morsi’s message was through an interview with The New York Times. The NYT asked Morsi if the US was an ally, “to which he replied with a laugh by saying: ‘That depends on your definition of ally.’ However, he quickly followed by saying he wants a real friendship with the US, ‘real friends’.”

On the other hand, President Obama responded at Mitt Romney’s criticisms of his handling of Syria and Iran, saying that if the Republican standard-bearer “is suggesting that we should start another war, he should say so.”

The tones of two presidents, one of independence and another of conciliation, may sound strange. Further developments in New York and Libya followed.

Hillary Clinton, US secretary of state, offered Libya more help stressing that Washington will remain a firm partner. Mrs. Clinton met Mohammed Magarief, the interim Libyan leader, in New York, and received his personal apology for the Benghazi attack. Citing a senior US official media report informed: Clinton reviewed US assistance to Libya and crack down on armed militia groups. “The secretary offered to intensify our support and help for the Libyan government in all of those areas”, the official said following the meeting. Despite a temporary drawdown in US personnel following the Benghazi attack, the official said security cooperation and training was ongoing and would expand.
In Libya, the country’s army has removed the heads of two of Benghazi's main militia groups, The February 17 Brigade’s Bukatif and Rafallah al-Sahati’s Ismail. The Ansar al-Sharia group was driven out of Benghazi. Two militant groups based in Derna were disbanded on Sunday. Magarief, on Sunday, issued a 48-hour deadline for militias to vacate state property. Magarief asserted: “[We want to] dissolve all militias and military camps which are not under the control of the state.”

In the Middle East, days of disorder lie ahead as competing capitals are trying to gain control. Africa, actually, is being re-conquered by the same competing interests. Interference, covert war and secret backing to bands are parts of regular activities by powerful players. Possessions are changing hands, and positions are being strengthened and widened in the continent. Business and investment reports, trade agreements and contracts, and political, diplomatic and military maneuvers in the region reveal the fact. Incidents in Libya, Egypt, Tunisia and Sudan are not isolated developments.

A single example: Hollande, the French leader, in his first appearance at the UN general assembly, is expected to call for backing for an international force to be sent to Mali to help dislodge Islamist militants who have taken over the north of the country. Examples of maneuver, to deepen involvement and extend hands, are abundant in the region and the continent. The continent carries lucrative promises for capital.

Neither the competition nor the contradiction is with the militants. Interests are there, who arm and train bands. The interests are competing, and competition is accelerating and intensifying.

In a time of compounded competition, the question of retreat is difficult to consider, at least now. Decline within doesn’t always lead to retreat. Arrangements, deals and agreements, widening area of operation, being done by competing interests don’t signal: It’s time to retreat.

The Benghazi-botch, the assault on the US consulate in Benghazi and murder of four Americans there, is not equal to the Tehran-thorn, seizure of the US embassy in Tehran in 1979. The situation is not also equal to the fall of Saigon, now Ho Chi Minh City, in 1975. These are neither in terms of local condition nor in terms of international array of forces.

The latest one, Benghazi incident, shows a number of limitations that may appear strange but not strange in real perspective. Is the incident a mere technical, security and intelligence, failure or assumption and management mistake? Are there shadow players, deeply entrenched, in the “game” with a long term agenda? Is there any trace of factionalism, not only in Libya and Egypt, elsewhere also? Unattended questions related to involvement, contradictions, imbalance of power, decline and aggressiveness move around while instigations are made and lives are lost.

All These Volatile Days

The days now are volatile and uncertain. Assange-incident now seemingly has gone to backyard. Same is the Occupy Movement anniversary. Flaring incidents in regions around the world are engulfing days and attention. Implications of the incidents are long-term. And, exposed are the perpetrators.

Iran front is tense since long. A shadow war is going on there. As goes the cyber war. That’s part of a great game. With expanding hands Iran is still holding its position.

Interventionists are flaring up Syria. That’s also part of a grand strategy. Stakes are higher in the area.

The war, virtually, is being waged from Pakistan to Syria, a large theater that touches fringe of Europe. Lebanon, Jordan, Kurdistan, Turkey, all have been made active party to the conflagration. Turkey has started taking hits. Lebanon is charged. The moment of formal burst out is unknown there.

Iraq and Afghanistan are regular headlines with deadly strikes and deaths.

Neither central Asia nor the Caspian region is cool. The Pacific, the South China Sea, the Far East are turning tense with each passing day and with each move by the jealous actors. Military moves are there in Australia and Indonesia. There is renewed military engagement between New Zealand and the US. Competition is beating war drum. But, war is not an easy strike.

Near to China, the island-trade by Japan isn’t a stray one. The customer, Japan, was well aware of the follow up tension. China’s reaction is fitting to the innocent appearing business deal. Not only China, any one will find provocation in the trade. The business has provided pretext to mobilize weapons and for conducting test of hybrid aircraft, defensive in appearance, in Japan.

Japan’s China invasion anniversary is an annual event. The Chinese people reiterate their independence and denounce the aggressor. But the assault on the US ambassador’s car in the Chinese capital is unprecedented. It’s a strong and loud message.

Neither the island- nor the car-incident happened without much exercise. None of these were thoughtless act.

From Moscow, news is dispatched: office of the USAID, the US official aid agency, in the Russian capital has been asked to close down. Moscow’s tone is strong. After the 90s, it’s unprecedented incident in Moscow. It’s also a significant message from the Kremlin bosses. The Kremlin has gone through much change. Change is also in Russian money-power. The change in attitude follows.

In Africa, maneuvers and incidents are many. Very significant initiatives are being taken by the world players there. Tough, almost cut throat competition is going on in the continent.

Europe is occupied with pains and problems of one of its biggest projects – the Union. Bankers’ interest is playing the biggest role in the present day Europe. Competitions are powerful. There are budget constraints, unemployment, sufferings. The electorates in Europe are frustrated, and turning restless. A section of the Europeans are migrating to Africa in search of employment. An astonishing shift!

Gloomy economy is charging political battle in the US. Its citizens are turning tired with wars. Painful news from Afghanistan is reaching the land. Expressions are not happy. Teachers’ strike, historic, emerged there.

Royal photo episode is trying to keep citizens busy. But, ultimately it attracts only the saucy news seekers, not the job seekers. There is legal action to secure royal dignity. The legal initiative shows there is limit to expression.

Suddenly, portions of a film mysteriously emerged. Its path of publicity is equally mysterious. Situation, from Indonesia to Tunisia, suddenly flared up. An analyst expressed doubt about the existence of the entire film. But, there is no doubt that portions of the film exist. Some aspects of the following events were unprecedented.

Impact of following events – in countries, in areas of election, military mobilization, geopolitics, alliance, political career and political equation – don’t miss any onlooker’s eyes. Along with loss of valuable lives burning questions of life in societies turned blurred and volatility emerged starkly.

Societies, in the North and in the South, reeling under crises – from financial, food and energy to climate and environment – are passing uncertain days overwhelmed with fundamental questions of survival. Hospitals and educational institutions are feeling burnt of the crises. So, the patients, physicians, students, teachers and guardians are. Profit seekers are taking hold of health care and education. Strikes are regular feature of citizens’ struggle in Europe. At times, the strikes with economic demands are turning political.

Food crisis is looming over the lives of millions. There is water crisis. Vanishing polar ice and rapidly retreating glaciers are sending alert messages. Extreme weather is declaring uncertain yield and time. The situation carries elements of volatility.

Arms traders need profit, the unquenched thirst. Strife and war are their requirement as they always require. State of some economies is hastening the requirement.

Is it that elements of volatility are rushing together? Or, are factors trying to create pretext for widening area of operation? Or, are efforts being made to influence election or geopolitical move? Or, is peoples’ attention being diverted? Answers to the questions are essential.

Answers to the questions are indefinite to many. Hatred charged situation harms peoples’ democratic struggle. Common problems of bread, peace and democracy are missed with spread of hatred and divisive force among people. Democracy faces new challenge as peoples’ solidarity and fraternity are breached, an act that capitals perform efficiently in societies during fickle time.

Powers initiate desperate projects as they realize self-limitations. It’s a desperado-game. They need diversionary tact. But, should people step in into the trap?

An Exercise In Imagination

Let’s imagine, the days are pre-’90s, 1969 or ’84 or ’88. The name of the country, in imagination, is USSR, popularly known as the Soviet Union, or GDR (DDR), popularly known as East Germany, or Bulgaria or Hungary or some other country with a post-revolutionary society.

Let’s imagine, the name of the ruler, termed dictator in mainstream parlance, is Brezhnev or Kosygin or Podgorny or Chernenko or an X, Y, Z considered as adherents of centralized planning and opposed to a world propagated free.

Let’s imagine, hundreds, thousands of citizens of that society have been pushed out of their homes and many of them are living in tents set up between railway tracks or living in subway stations or on pavements while thousands of homes silently stand vacant. Many of them are going hungry and they rely on breadlines to have their barest minimum human existence. Hundreds, thousands of children go hungry, they drop out of schools. Hundreds of schools are being closed down as revolutionary politicians are failing to arrange money for running the schools. The same reason pushes hundreds of teachers out of jobs. The post-revolutionary societies can’t arrange health care for hundreds of its citizens. The numbers may be more than hundreds or thousands. The numbers probably reach to millions. The centralized economy is throwing away, to mention in a sober way, thousands of its workers as it is failing to run its manufacturing units. But, the speculation market in this imagined society of dream is trading, actually gambling with, let’s name it, revolutionary bonds, worth of trillions of dollandro. The trillion dollandro transaction goes on only within a few days, not in a year. The centrally planned economies are of old age, keeping the count low, 200 years.

Let’s imagine, a number of towns, cities, municipalities in the post-revolutionary society has gone bankrupt or filed for bankruptcy due to bickering among the municipal revolutionary leadership or mismanagement or inefficiency or debt. In at least a municipality in the vast Soviet land citizens gathered and demanded pay cut of municipal leadership as it turned out that the revolutionaries were drawing salary of illogical and irrational size, too big. Individuals frustrated with the revolutionary tax officials have protested. At least one frustrated and desperate revolutionary guy tried to hit a tax office with a small plane. A number of schools in the Soviet land experienced incidents of shooting by students and number of students died. The type of the shooting is almost a regular event. And, the society regularly produces frustrated but trigger-happy shooters.

Let’s imagine, workers with revolutionary zeal have defied their Marxist trade union leadership and occupied at least a plant. And, in the land of revolutionary freedom at least a law can be found that stands on the way to organize unions and makes striking difficult, sometimes impossible.

The imagined land of revolutionary hope witnessed riots, sometimes by immigrants invited to run its factories, sometimes by youth and children. A number of those rioting young boys were in the age group of 11-14.

Institutions of higher learning in the imagined land are controlled by the state enterprises. There in the land, a lot of students are debt burdened. Sometimes, cases emerge that the debtor-student has completed her or his student life and has tuned old, but the debt is yet to be repaid as the former student failed to repay as the former student lacks capacity to repay.

Strange is the imagined revolutionary society! Sometimes, case emerges that this or that famous artist, film star or singer, turns drug addict, turns frustrated, commits suicide or dies in mysterious circumstance. The society produces such frustrated celebrities facing a hopeless horizon.

An amused environment, in truest sense, dominates the imagined land. Jovial persons are there in the society. They spend a lot, unimaginable amount of money, for drinks-dinning-dancing and all related activities while noteworthy number of children languish in den of misery.

Amazing vigor the society produces! One can always find some persons spewing hatred; sometimes against color, sometimes against religious belief.

Let’s forget these lower parts of these societies that propagate a nice world of revolutionary liberty and freedom.

Suddenly, it comes to light that an East German or a Hungarian revolutionary leader was provided with money by a despised dictator in Africa to smoothly conduct revolutionary election in the polit bureau or in the Supreme Soviet, the highest legislative body. Suddenly, it comes to light that another revolutionary leader from another revolutionary land was provided with money by an old lady equipped with revolutionary ideology. Suddenly, it comes to light that a section of members of the Supreme Soviet were tricking with bills they submitted with the authority. Suddenly, it comes to light that number of scandals with Supreme Soviet members is not a few.

Wise is the Supreme Soviet Court, the imagined highest revolutionary legal office that delivers justice! The court finds: Collective farms or state-run super-industries are person; so these are entitled rights of persons. As these turn persons, these production or business bodies contribute money, huge in amount, to elections so that their candidate of choice gets elected so that they can repay by formulating laws favorable to the collectivehood or industryhood.

The year 1984 was near to nose of citizens. Pravda, Izvestia, the main section of the press in the Soviet land, Tass, the main news agency of the country, Radio Berlin or Budapest TV, the main broadcaster or telecaster of the land started discussing the touted Orwell-novel Nineteen Eighty-Four. They were also discussing Animal Farm. Their media-comrades in other lands joined them and an inter-continental orchestra, at least 12-month long, was organized. The purpose was to make the world alert of big brother in a tyrannized land, who was always keeping eyes on its subjects, controlling and manipulating brains of citizens. It was a noble mission to alert ordinary citizens about dictatorial rule. But suddenly it came out that the imagined land of freedom was having a bigger eye, stronger manipulation, and an all encompassing ideology – greed and accumulate.

Anyhow, the revolutionary leadership organized an international sport event. To ensure safety of the event, the revolutionary leadership decided to mobilize missiles, but not the ICBMs, on rooftops of civilian citizens in Moscow or Warsaw.

Anyway, the Soviet polit bureau failed to forget the Roman rulers’ tact: Invade a country or wage a war anywhere whenever there is possibility of a rebellion in home. They were faithful to the Roman ruling tact.

Whatsoever, the economy in the imagined Soviet land required the wars. Those were not only for distracting and demobilizing the citizens. Wars were like life lines to the revolutionary economy claiming to be the best.

Whatever goes in the economy, there was revolutionary politics, and the politics inspired the Soviet Blackmail & Hacking magazine editor to press the chief of the imagined state to hasten the decision to invade a country.

The economy, wisest and most efficient in the world, was successfully keeping in abeyance contradictions with the society. That was the revolutionary efficiency. And, it was happy with its efficiency of keeping contradictions unresolved. It was more than confident that contradictions within can be kept unresolved for indefinite period. It was a hope-infinite.

This story can move on and on as it was a story of a system destined to bring peace, prosperity and happiness to the world humanity, as it was a society Conceived in Liberty. It will be an affront to the society and its leadership to compose short stories on the system. It requires epics. It’s a justified expectation.

Should not humanity prefer this society? If the imaginary exercise nose dives and finds the ground reality? And, if the ground reality shows that the society is capitalist society hundreds of years old? Should humanity prefer it?

Encounter With An Advanced Capitalist Economy

part I: Two Economies

The so-called American Dream overwhelmed many. It was a dream, an illusion.

It was not real, but seemed real; it was seemingly attractive and colorful, but there is no attractive color in the reality; it was seemingly accessible, but it’s a mirage in reality; it seemed attainable and achievable, but it’s unattainable and unachievable in the existing production-distribution structure. The Empire’s present crisis divulges this reality.

Crisis brings closer the realness many like to ignore. The Great Financial Crisis (GFC) has torn away the shroud that covered the unreal American dream.

Now, facts show, it was like a walk towards a mirage. Now, reality tells, it was an impossible journey. The GFC has helped understand the American reality, a reality generated by an advanced capitalist economy.

Now, many questions loom, overwhelm many minds. The questions expose the real life, the reality in the economy, the theories upholding and justifying the economy. Many elementary and primary facts are coming to light that once were ignored by many.

Readings in Macroeconomics (28th edition) tells in its “Introduction”: “It sometimes seems that the United States has not one, but two economies. The first economy exists in economics textbooks and in the minds of many elected officials. It is an economy in which no one is unemployed for long, families are rewarded with an ever-improving standard of living, and anyone who works hard can live the American Dream. In this economy, people are free and roughly equal, and each individual carefully looks after him- or herself, making voluntary choices to advance their own economic interests. Government has some limited roles in this world, but it is increasingly marginal, since the macroeconomy is a self-regulating system of wealth generation.” (Eds. Amy Gluckman, John Miller, Bryan Snyder, Chris Sturr, Dollars & Sense collective, Boston)

After tracing the first economy it adverts: “The second economy is described in the writings of progressives, environmentalists, union supporters, and consumer advocates — as well as honest business writers who recognize that the real world does not always conform to textbook models. This second economy features vast disparities of income, wealth, and power. It is an economy where economic instability and downward mobility are facts of life. Jobs disappear, workers suffer long spells of unemployment, and new jobs seldom afford the same standard of living as those lost. And, periodically, market economies unravel, much like today. As for the government, it sometimes adopts policies that ameliorate the abuses of capitalism, and other times does just the opposite, but it is always an active and essential participant in economic life.” On the basis of data, Readings in Macroeconomics eloquently exposes both, the first and second economies.

Advanced capitalist economies, Kurt Dopfer, Swiss economist, noted in 1976, are one of the best institutions to learn about bourgeois political economy. The world, especially the capitalist countries encountering the present crises provide ample evidence of failure of bourgeois economic thoughts. Failure to analyze present economic crisis is the full blown capacity of the bourgeois political economic thoughts.

A fuzzy process

Distance between reality and mainstream economics is noted by John Miller, professor of economics at Wheaton College. John writes in the Readings in Macroeconomics: “When economists at the National Bureau of Economic Research (NBER), a private research organization designated by the [US] Commerce Department as the nation’s arbiter of the business cycle, officially declare the Great Recession over, they will likely identify September 2009 as its end date and the beginning of the economic recovery. But people surely will not believe the recession is over, despite the NBER’s pronouncement, until jobs return and their economic well-being improves. And that could be quite a while.” (“When is a Recession over?”) And, has recovery really returned? A difficult question. What’s the problem in return of the cherished real recovery? Another difficult question.

According to the NBER, there were nine complete business cycles in the US economy since World War II. But “[t]he NBER’s Dating Committee, currently a group of seven economists, admits that the dating process is ‘fuzzy’. The committee has no rigid rules for determining the start or end of a business cycle. The members reach a consensus after studying a broad array of macroeconomic indicators. In short, they eyeball the data. The committee’s founders worked with 46 indicators. Today the NBER’s Business Conditions Digest lists around 1,000 measures.” (ibid.)

They, the Dating Committee, study the GDP, industrial production, employment, real income, trade, several interest rates, and personal income, the index of coincident indicators that measures employment, income, output, and sales, and similar many.

“The Great Recession shows how hard it is to date business cycles. … It takes time for the federal government to publish official GDP figures. And the committee looks for several indicators to show that a decline in activity has spread across the economy before it feels comfortable declaring a recession.” (ibid.)

And, instead of calculation, mainstream sometimes conduct survey to gather opinion, relies on perception, which is subjective. To draw conclusion, science does not rely on perception.

The way a section of scholars in poor, underdeveloped countries imagine – the advanced economies are super smart and their knowledge machine is efficient – is not the sweet fact. Their “science” is hazy or mechanism they have is weak. Encountering this bitter fact will free the scholars from inferiority complex, and help get rid of vulgar thoughts, ideas and imaginations.

The zero decade

The capitalist economy has taken away an entire decade from the life of the common persons although it has amassed unimaginable resources. “After reviewing the feeble expansion and devastating recession that followed, economist and New York Times columnist Paul Krugman suggested that we call the first decade of this century ‘the zero decade’. Job creation for the decade was basically zero. Zero economic gains for the typical family. Zero gains for homeowners. And zero gains on the stock market, even before taking inflation into account.” (ibid.)

A number of poor economies in the South has not experienced similar zero decade. These poor economies are burdened with external debt and interest, ridden with corruption and inefficiency, weak in know how, dictated and tutored by imperial masters, and pressed by many other problems. Legislature, judiciary, democratic process, financial measures, education, and many more in these poor countries are designed and advised by the imperial masters through their organizations and employees. It’s not a strange reality. It’s the reality of the world system that feels proud with its inefficiency. Actually, a part is producing wealth while another is reeling under crisis, and the wealth is flowing to the sick part that tries to keep it strong.

Figures strikingly tell the zero-reality of the mature capitalist economy. Alejandro Reuss, economist and historian, cites real US GDP figures in 2009 and in 2006. Both were nearly the same — just under $13 trillion. “The Bureau of Economic Analysis reports figures of $12.8806 trillion … for 2009 and $12.9762 trillion for 2006. … [T]he figures for the number of workers employed and the number of work hours required to produce that output are strikingly different. In 2006, about 138.7 million workers … were employed, compared to only about 134.4 million in 2009. The total time spent at work, by all workers … was about 18 billion hours less in 2009 than in 2006.” (“Same output + Fewer Hours = Economic Crisis?”, Readings in Macroeconomics)

The figures present a cruel fact. “Producing the same quantity of output in fewer hours means that labor productivity has increased. There are several possible causes: increased intensity or pace of work (or ‘speed up’), increased worker skill, improved production methods, or greater quantity or quality of tools used. During the current crisis, multiple factors may have been involved. High unemployment itself reduces workers’ bargaining power. Employers know that there are plenty of unemployed workers who are desperate for a job. Meanwhile, workers who do have jobs are desperate to keep them. This makes it relatively easy for employers to push down wages or demand a faster pace of work. It may also be that workers’ average skill level has increased, if for no other reason than that less-skilled workers are disproportionately represented among those laid of. There may also have been innovation in production methods and technology that explain part of this productivity increase.” (ibid.) The “mystery” of prosperity and abundance of, and also luxury by, a few is buried in this process.

Real life narratives are harsher. Katherine Faherty, a Dollars & Sense intern, narrates in the Readings in Macroeconomics: “Seven months after graduating I have secured an unpaid internship and a part-time job, which puts me in the same boat as many of my classmates. … My roommate, who has a master’s degree in art history, has only been able to find an unpaid internship at an auction house plus a part-time receptionist job. Even without the part-time job, the Bureau of Labor Statistics would count her as employed because she goes to ‘work’ at the auction house every day. She is among the hordes of recent graduates holding unpaid internships that were once the sole province of college students — a viable route only for grads with family resources to fall back on. Another friend has been on a constant job search since March. She moved back into her parents’ house and returned to her old summer job as a bank teller. Then she took a job at the local mall so she could make her student-loan payments. She gets a great discount at her store, but she’s not putting her double degree in economics and psychology to use. Like almost 32% of workers under 25, she is “underemployed.” Along with those who want full-time jobs but can find only part-time ones, underemployed workers are counted as employed. (“A dismal Time to Graduate”) Then, there comes bonuses of CEOs. Everyone now knows it. And, then, Jenny McCarthy, a single mother, posed nude for Playboy in the magazine’s July/August issue. Jenny finds: “Evan’s tuition was really expensive this year,’ she said on the Today show, referring to her 10-year-old autistic son.” (A-Line, June 25, 2012) Is it a cruel economy?

This narration is from a land famous for abundance, opportunity and dream, from a land that has accumulated wealth unimaginable in human history, from a land that teaches and sermons others on ways to prosperity. But reality exposes an advanced capitalist economy. Its age is not 70 years as was the age of the economy in the former Soviet Union. The advanced capitalist economy’s age is much more than 70 years. Then, why the old economy fails to ensure affordable and appropriate tuition for all children?

Part II: Consumption

Consumption has many faces, many interpretations and many implications.

A poor person’s consumption is completely different from a rich. The rich interpret the issue as their interest defines while a poor spends whole life simply to arrange a bare minimum with an output of failure. A section of economists try to gauge level of success of their design by counting the quantity a poor consumes and comparing it with the quantity the poor once used to consume. This section ignores the fact: capital requires consumption by the poor. The poor can’t move wheels if they don’t consume, and wheel’s movement is required by capital to generate more profit.

Ignorance, actually immaturity, about persons behind wheels encourages a section of petty sized nouveau capital in some poor countries to tell or write: It’s not capital’s business to look after the quantity or quality labor consumes. A sheer nonsensical statement! Sense of class interest discourages rascals even from issuing such statement.

Consumption by the rich is totally different from that of the poor. There is luxury, indulgence, waste, flouting, boosting, getting impregnated with newly bought identity of aristocracy and power. They are completely concerned with their consumption no matter how big carbon footprint is being made.

The US economy has different types of consumptions: of the rich, of the poor, capital induced and crisis pressed. In sum, it discloses aspects of the economy.

Jonathan Rowe, fellow at the Tomales Bay Institute and a former contributing editor at the Washington Monthly, writes: “Much consumption today is addictive […] Millions of Americans are engaged in a grim daily struggle with themselves to do less of it. They want to eat less, drink less, smoke less, gamble less, talk less on the telephone — do less buying, period. Yet economic reasoning declares as growth and progress, that which people themselves regard as a tyrannical affliction. Economists resist this reality of a divided self, because it would complicate their models beyond repair. They cling instead to an 18th century model of human psychology — the “rational” and self-interested man — which assumes those complexities away.” (“The Growth Consensus Unravels”, Readings in Macroecnomics, 28th edition) Jonathan died in March 2011. But his voice for the millions struggling for survival with minimum consumption shall echo.

There are consumptions not essential for human survival. But the advanced economy needs it for its survival. Jonathan writes: “Then too there’s the mounting expenditure that sellers foist upon people through machination and deceit. People don’t choose to pay for the corrupt campaign finance system or for bloated executive pay packages. The cost of these is hidden in the prices that we pay at the store. As I write this, the Washington Post is reporting that Microsoft has hired Ralph Reed, former head of the Christian Coalition, and Grover Norquist, a right-wing polemicist, as lobbyists in Washington. When I bought this computer with Windows 95, Bill Gates never asked me whether I wanted to help support a bunch of Beltway operators like these. This is compulsory consumption, not choice, and the economy is rife with it today. People don’t choose to pay some $40 billion a year in telemarketing fraud. They don’t choose to pay 32% more for prescription drugs than do people in Canada. (‘Free trade’ means that corporations are free to buy their labor and materials in other countries, but ordinary Americans aren’t equally free to do their shopping there.) For that matter, people don’t choose to spend $25 and up for inkjet printer cartridges. The manufacturers design the printers to make money on the cartridges because, as the Wall Street Journal put it, that’s ‘where the big profit margins are.’” (ibid.) The mainstream can’t deny it now.

The pattern – compelling consumers to purchase a commodity that they wouldn’t have purchased had there an opportunity – shows capital’s dictatorial power over consumers. It’s an autocratic power, more powerful than political autocracy. Actually, this dictatorial power determines power and limits of political authority. In ordinary situation, consumers can’t escape this “wish” of the seller. Only an organized initiative of aware consumers can alter the seller’s tact.

Jonathan exposes more facts as he argues:

“The economy in such cases doesn’t solve problems so much as create new problems that require more expenditure to solve. Food is supposed to sustain people, for example. But today the dis-economies of eating sustain the GDP instead. The food industry spends some $21 billion a year on advertising to entice people to eat food they don’t need. Not coincidentally there’s now a $32 billion diet and weight loss industry to help people take of the pounds that inevitably result. When that doesn’t work, which is often, there is always the vacuum pump or knife. There were some 110,000 liposuctions in the United States [in 2001]; at five pounds each that’s some 275 tons of flab up the tube. It is a grueling cycle of indulgence and repentance, binge and purge. Yet each stage of this miserable experience, viewed through the pollyanic lens of economics, becomes growth and therefore good.” (ibid.)

Further facts of the economy are there:

“Americans spend some $5 billion a year in gasoline alone while they sit in traffic and go nowhere. As the price of gas increases this growth sector will expand. Commerce deplores a vacuum, and the exasperating hours in the car have spawned a booming subeconomy of relaxation tapes, cell phones, even special bibs. Billboards have 1-800 numbers so commuters can shop while they stew. Talk radio thrives on traffic-bound commuters, which accounts for some of the contentious, get-out-of-my-face tone. The traffic also helps sustain a $130 billion a year car wreck industry; and if Gates succeeds in getting computers into cars, that sector should get a major boost.” (ibid.)

There is demand, and there is supply, and there is market, actually markets, and there is markets’ dictation, and the markets are free, free for the seller. Shall there be equilibrium? Shall there be an opportunity for buyer? There is opportunity, and there is no opportunity. Power of ownership determines the extent of opportunity. A person owning a few bucks in a pocket have opportunity and a person gripping millions or billions have opportunity. The first one has the opportunity to buy a food item and have no opportunity to buy an opportunity to buy proper medical treatment, and the second one has the opportunity to buy many commodities, opportunities, power, influence.

Then, what’s the production process if consumption is utilization of material benefits of the process? Can everyone utilize the material benefits? Many, almost uncountable, are excluded. Doesn’t this type of consumption affect production? Should this sort of consumption be discarded? Why it can’t be done? These and similar questions will lead to question the very essence of the economy.

In this market, consumers have to see, have to hear, listen, have to laugh, have to mould habit, have to buy, consume, have to be happy until a shock, a crisis, externalities create reaction that compel consumers to get away from this pattern.

The advanced capitalist economy is vibrant with more activities:

“C. Everett Koop, the former Surgeon General, estimates that some 70% of the nation’s medical expenses are lifestyle induced. Yet the same lifestyle that promotes disease also produces a rising GDP. …The automobile gave rise to car wash franchises, drive-in restaurants, fuzz busters, tire dumps, and so forth. Television produced an antenna industry, VCRs, soap magazines, ad infinitum. The texts present this phenomenon as the wondrous perpetual motion machine of the market — goods beget more goods. But now the machine is producing complementary ills and collateral damages instead. Suggestive of this new dynamic is a pesticide plant in Richmond, California, which is owned by a transnational corporation that also makes the breast cancer drug tamoxifen. Many researchers believe that pesticides, and the toxins created in the production of them, play a role in breast cancer. ‘It’s a pretty good deal,’ a local physician told the East Bay Express, a Bay Area weekly. ‘First you cause the cancer, then you profit from curing it.’ Both the alleged cause and cure make the GDP go up, and this syndrome has become a central dynamic of growth in the U.S. today. …The fastest-growing occupations in the country include debt collectors and prison guards. What would we do without our problems and dysfunctions? The problem is especially acute for those at the bottom of the income scale who have not shared much in the apparent prosperity. For them, a bigger piece of a bad pie might be better than none. This is the economic conundrum of our age. No one has more than pieces of an answer, but it helps to see that much growth today is really an optical illusion created by accounting tricks. The official tally ignores totally the cost side of the growth ledger—the toll of traffic upon our time and health for example.” (ibid.)

It’s not a single country-picture. In countries, rich and poor, this “amazing” picture is at hand. But the economy teaches not to minutely observe the background of the picture, not to question the economy. Lessons of economics being imparted also induce learners’ minds to ignore these facts, to isolate these facts from other aspects of the economy.

Shall these facts be mentioned while lessons will be run in class rooms? Shall students be asked to find out similar facts in their societies? Shall they be asked to find out reasons driving these practices in an economy, and the factors shaping such an economy? Even the forward-looking student activists, who unhesitatingly unfurl flags of rebellion, shall not formulate demand to redesign curriculum and syllabus so that these issues are raised and discussed in class rooms of economics, so that instructions rely on up-to-date information and problems that the Readings in Macroecnomics and similar other books identify.

People in countries are searching for alternatives. There are innovations and initiatives. They are not waiting for a section of over-active student activists in some countries, who are having no time to question curriculum and syllabus being followed in class rooms as they are busy in organizing revolution.

“Sooner or later”, Jonathan informed in the Readings in Macroecnomics, “we’ll need different ways of thinking about work and growth and how we allocate the means of life. This is where the social economy comes in, the informal exchange between neighbors and friends. There are some promising trends. One is the return to the traditional village model in housing. Structure does affect content. When houses are close together, and people can walk to stores and work, it encourages the spontaneous social interaction that nurtures real community. New local currencies, such as Time Dollars, provide a kind of lattice work upon which informal nonmarket exchange can take root and grow.” (ibid.)

Carlos Perez de Alejo, co-director of Third Coast Workers for Cooperation in Austin, Texas, informs: “In the midst of mounting economic insecurity, fueled by widespread unemployment, foreclosures and budget cuts, many people are seeking alternative models to business as usual. From community gardens to bartering networks, grassroots efforts are sprouting up across the [US].” (“Embrace the Cooperative Movement”, Austin American-Statesman, Oct. 26, 2010)

In the US, according to Carlos, more than 29,000 cooperatives are operating in nearly all sectors of the economy. There are more than 130 million members in these cooperatives. Under the shadow of the ongoing economic crisis, many people have got organized in worker cooperatives owned and controlled by the people. By providing stable jobs and higher wages worker cooperatives have an impressive track record. The movement in the US has become increasingly organized. In May 2004, members of the worker co-op community founded the US Federation of Worker Cooperatives, a national membership-based organization “of and for worker cooperatives, other democratic workplaces, and the organizations that support the growth and continued development of worker cooperatives.” Membership in the Federation has grown 25% per year.

In the face of crisis and hardship people are creating their spaces. Of course, there are limitations. Possibilities of set backs are there also. Fundamental questions are yet to be identified and resolved. But it’s a part of a process. People learn in their way whatever the dominating economy dictates. These lessons encourage, energize and strengthen people’s initiatives.

Part III: The “Insignificant” trillions of dollars

One of today’s undeniable facts is women’s labor almost all over the world are underpaid and unpaid.

Now-a-days many are asking: “[Are] housewives paid [with] wages? By the government? That may seem outlandish to some, but consider the staggering amount of unpaid work carried out by women.” The International Wages for Housework Campaign, a network of women in Third World and industrialized countries, demands unwaged work that women do are to be recognized as work in official government statistics, and this work be paid. Lena Graber and John Miller discuss the issue in their “Wages for housework: the movement & the numbers”: “Producing credible numbers for the value of women’s work in the home is no easy task. Calculating how many hours women spend performing housework […] is just the first step. The hours are considerable in both developing and industrialized economies.” (Eds. Amy Gluckman, John Miller, Bryan Snyder, and Chris Sturr, Readings in Macroeconomics, 28th edition)

As example of hours spent by women in household work Lena and John refer to a set of data related to the issue. In Australia, 2 hours and 27 minutes were spent for child care per day in a household by a woman in 1997. In the UK in 2000, it was one hr. and 26 min. while in Nepal the time spent for the same purpose in 1996 was two minutes more than that of the UK. In Norway, it was 42 min. in 2000 while in Japan it was 24 min. in 1999. Time spent for food preparation was: Australia – 1 hr 29 min., Norway – 49 min., the UK – 1 hr. 8 min., Nepal – 5 hr. 30 min. Time spent for water and fuel collection in Nepal was 1 hr 10 min while in Norway it was 1 min. Time was also spent for cleaning and shopping. The total time spent was: Australia – 3 hr. 39 min., Japan – 3 hr. 34 min., Norway – 3 hr. 56 min., the UK – 4 hr. 55 min. The sources of this information were: www.abs.gov.au/ausstats; www.unescap.org/stat (Japan); www.ssb.no/tidsbruk_en (Norway); www.statistics.gov.uk/themes/social_finances/TimeUseSurvey; www.cbs.nl/isi/iass (Nepal). A number of data were not available. The data cited are not comparable between the countries referred here because of difference between the economies and time period of data gathering. However, the data provide a picture of women labor deprivation. All the economies cited here are capitalist and all but Nepal are advanced capitalist countries.

Citing the International Labor Organization Lena and John say: In 1990, women carried out two-thirds of the world’s work for 5% of the income. In 1995, the UN Development Programme’s Human Development Report estimated that women’s unpaid and underpaid labor was worth $11 trillion worldwide, and $1.4 trillion in the US. The share of the advanced economy is more than one-tenth.

Paying women the wages for the household work, the economists argue, “would go a long way toward undoing these inequities and reducing women’s economic dependence on men.” The UN 4th World Conference on Women developed a Platform for Action in 1995 that called on governments to calculate the value of women’s unpaid work and include it in conventional measures of national output, for example, in GDP.

Only a handful of countries including Trinidad & Tobago and Spain have passed legislation mandating the new accounting. A number of countries including Australia, Bangladesh, Canada, the Dominican Republic, India, Japan, Nepal, New Zealand, Tanzania, and Venezuela have undertaken extensive surveys to determine how much time is spent on unpaid household work. (ibid.)

There are different approaches to put value to the household work: output-based evaluation, input of household production, opportunity cost based calculation, specialist-replacement method. These techniques produce quite different results.

“In Canada, a government survey documented the time men and women spent on unpaid work in 1992. Canadian women performed 65% of all unpaid work, shouldering an especially large share of household labor [….] (Men’s unpaid hours exceeded women’s only for outdoor cleaning.) […] In Great Britain […] unpaid labor hours are high for an industrialized country […], far greater relative to GDP. […W]hen valued using the opportunity cost method, unpaid work was 112% of Britain’s GDP in 1995! With the specialist-replacement method, British unpaid labor was still 56% of GDP—greater than the output of the United Kingdom’s entire manufacturing sector for the year. In Japan […] women perform over 80% of unpaid work […] The Japanese Economic Planning Agency calculated that counting unpaid work in 1996 would add between 15.2% (generalist-replacement method) and 23% (opportunity-cost method) to GDP. Even at those levels, the value of unpaid labor still equaled at least half of Japanese women’s market wages.” (ibid.)

“While estimates vary by country and evaluation method, all of these calculations make clear that recognizing the value of unpaid household labor profoundly alters our perception of economic activity and women’s contributions to production. ‘Had household production been included in the system of macro-economic accounts,’ notes Ann Chadeau, [a researcher with the Organization for Economic Cooperation and Development] ‘governments may well have implemented quite different economic and social policies.’ For example, according to the UNDP, ‘the inescapable implication [of recognizing women’s unpaid labor] is that the fruits of society’s total labor should be shared more equally.’ For the UNDP, this would mean radically altering property and inheritance rights; access to credit; entitlement to social security benefits, tax incentives, and child care; and terms of divorce settlements. (ibid.)

The Great Financial Crisis has aggravated the situation. Burden on women has increased. It has spread outside of households. “Since the Great Recession began in December 2007,” writes Heather Boushey, senior economist at the Center for American Progress, in the Readings in Macroeconomics, “there [in the US] has been a sharp rise in the number of married couples where a woman is left to bring home the bacon because her husband is unemployed.” The reason is “men have experienced greater job losses than women over the course of this recession, losing three out of every four jobs lost.” (“Women Breadwinners, Men Unemployed”)

In 2009, share of families having unemployed men while women held job rose sharply compared to 2007. In the first five months of 2009, 5.4% of working wives had an unemployed husband at home compared to an average of 2.4% over the first five months of 2007. In terms of number about 2 million working wives with an unemployed husband. (ibid.)

The hardship in household increases as family budget gets strained “since women typically earn only 78 cents for every dollar men earn. In the typical married-couple family where both spouses work, the wife brings home just over a third — 35.6% — of the family’s income.” (ibid.)

If the issue of unpaid household work is set aside temporarily for the sake of putting “things simply” the hard fact that comes up is of “giving” women labor less money compared to men, and asking, actually compelling, women labor to take larger burden.

A single area can be cited as example of hardship. Heather writes: “[M]ost families receive health insurance through the employers of their husbands. So when husbands lose their jobs, families are left struggling to find ways to pay for health insurance at the same time they are living on just a third of their prior income.”

The hardship increases when the family has child. Heather provides data: “Families with children have been hit especially hard hit by unemployment. Among working wives in families with a small child — under age six — at home, 5.9% have an unemployed husband. […T]here are 1 million working wives with children at home, but an unemployed husband.”

Heather moves further with hard data that provides harder aspect of life during the period: “There has also been a sharp rise in the share of families where both the husband and wife are unemployed. Between the first five months of 2007 and of 2009, the share of married-couple families with both spouses unemployed rose to 0.5% from 0.1%, meaning that one in 500 families is struggling with dual unemployment. The share of families with a child under age 18 with both parents unemployed is 0.6%, meaning that one in 165 families with children have both parents looking for work.”

These facts show the cruel face of the economy that is concerned only with profit. The hardship of women labor can be gauzed fully if necessary labor time and surplus labor time are considered. With less wage women labor has to survive, make arrangement for survival of family members, work unpaid in household. But she isn’t allowed to produce less. This is an economy that at times even cares not to wear mask of humanity.

Part IV: Productive Investment? No

Inequality and capitalism are indivisible. Today, even proponents of capitalism don’t deny it. In the US as in other capitalist countries, increasing inequality is undeniable. The Empire is now residence of deep inequality.

Joseph Stiglitz observes: “America has the highest level of inequality of any of the advanced countries – and its gap with the rest has been widening. In the “recovery” of 2009-2010, the top 1% of US income earners captured 93% of the income growth. Other inequality indicators – like wealth, health, and life expectancy – are as bad or even worse. The clear trend is one of concentration of income and wealth at the top, the hollowing out of the middle, and increasing poverty at the bottom. (“The Price of Inequality and the Myth of Opportunity”, Project Syndicate, June 6, 2012)

“Economic inequality”, James M. Cypher, professor of economics at California State University, Fresno, writes, “has been on the rise in the United States for 30-odd years.” (“Slicing up at the long barbeque”, Readings in Macroecnomics, 28th edition, Eds. Amy Gluckman, John Miller, Bryan Snyder, Chris Sturr)

The inequality gives a lot of money, unimaginable, in total trillions of dollars, to a few. At the same time questions born. Does that huge money brings in any or produces something good? Answers to the questions reveal the type of activities the advanced capitalism is carrying out. At the same time, with the ultimate output the economy can claim legitimacy or can forfeit its rationale for existence.

James provides the answer with a number of facts. “[T]he big money has not gone into productive investments in the United States. Stripping out the money pumped into the residential real estate bubble, inflation-adjusted investment in machinery, equipment, technology, and structures increased only 1.4% from 1999 through 2005 — an average of 0.23% per year. Essentially, productive investment has stagnated since the close of the dot-com boom. Instead, the money has poured into high-risk hedge funds. These are vast pools of unregulated funds that are now generating 40% to 50% of the trades in the New York Stock Exchange and account for very large portions of trading in many U.S. and foreign credit and debt markets. And where is the income from these investments going? Last fall media mogul David Geffen sold two paintings at record prices, a Jasper Johns ($80 million) and a Willem de Kooning ($63.5 million), to two of “today’s crop of hedge-fund billionaires” whose cash is making the art market “red-hot,” according to the New York Times. Other forms of conspicuous consumption have their allure as well. Boeing and Lufthansa are expecting brisk business for the newly introduced 787 airplane. The commercial version of the new Boeing jet will seat 330, but the VIP version offered by Lufthansa Technik (for a mere $240 million) will have seating for 35 or fewer, leaving room for master bedrooms, a bar, and the transport of racehorses or Rolls Royces. And if you lose your auto assembly job? It should be easy to find work as a dog walker: High-end pet care services are booming, with sales more than doubling between 2000 and 2004. Opened in 2001, Just Dogs Gourmet expects to have 45 franchises in place by the end of 2006 selling hand-decorated doggie treats. And then there is Camp Bow Wow, which offers piped-in classical music for the dogs (oops, “guests”) and a live Camper Cam for their owners. Started only three years ago, the company already has 140 franchises up and running. According to David Butler, the manager of a premiere auto dealership outside of Detroit, sales of Bentleys, at $180,000 a pop, are brisk. But not many $300,000 Rolls Royces are selling. “It’s not that they can’t afford it,” Butler told the New York Times, “it’s because of the image it would give.” Just what is the image problem in Detroit? Well, maybe it has something to do with those Delphi workers facing a 40% pay cut. Michigan’s economy is one of the hardest-hit in the nation. GM, long a symbol of U.S. manufacturing prowess, is staggering, with rumors of possible bankruptcy rife. The best union in terms of delivering the goods for the U.S. working class, the United Auto Workers, is facing an implosion. Thousands of Michigan workers at Delphi, GM, and Ford will be out on the streets very soon. (The top three domestic car makers are determined to permanently lay of three-quarters of their U.S. assembly-line workers—nearly 200,000 hourly employees. If they do, then the number of auto-workers employed by the Big Three—Ford, Chrysler, and GM—will have shrunk by a staggering 900,000 since 1978.) So, this might not be the time to buy a Rolls. But a mere $180,000 Bentley—why not? But perhaps those who decry the trend can find at least symbolic hope in the new boom in yet another luxury good. Private mausoleums, in vogue during that earlier Gilded Age, are back. For $650,000, one was recently constructed at Daytona Memorial Park in Florida—with matching $4,000 Medjool date palms for shade. Another, complete with granite patio, meditation room, and doors of hand cast bronze, went up in the same cemetery. Business is booming, apparently, with 2,000 private mausoleums sold in 2005, up from a single-year peak of 65 in the 1980s. Some cost “well into the millions,” according to one of the nation’s largest makers of cemetery monuments. Who knows: maybe the mausoleum boom portends the ultimate (dead) end for the neo-Gilded Age.” (ibid.)

What happens in a society with this type and level of consumption by this sect of persons? Krugman has an answer.

“Should we be worried about the increasingly oligarchic nature of American society? Yes, and not just because a rising economic tide has failed to lift most boats. Both history and modern experience tell us that highly unequal societies also tend to be highly corrupt. […] And I’m with Alan Greenspan, who […] has repeatedly warned that growing inequality pose a threat to “democratic society”. (Paul Krugman, “Graduates versus Oligarchs”, New York Times, Feb. 27, 2006)

A sharper tone tells: “[…] America looks more and more like a class-ridden society. […] Our political leaders are doing everything they can to fortify class inequality, while denouncing anyone who complains […] as a practitioner of ‘class warfare’.” (Paul Krugman, “The Death of Horatio Alger”, The Nation, Jan. 5, 2004)

Destiny of this journey is not a happy place for the advanced capitalist society. Krugman asks: “Where is this taking us? Thomas Piketty, whose work with Saez has transformed our understanding of income distribution, warns that current policies will eventually create ‘a class of rentiers in the U.S., whereby a small group of wealthy but untalented children controls vast segments of the US economy and penniless, talented children simply can’t compete.’ If he’s right – and I fear that he is – we will end up suffering not only from injustice, but from a vast waste of human potential.” (ibid.) The economy is sowing seeds of class conflict as it destroys human potential.

There is poverty, there is poor along with the rich. There is debate also on identifying the poor. Ellen Frank, who teaches economics at the University of Massachusetts-Boston, writes: “The poverty line is widely regarded as far too low for a household to survive on in most parts of the United States. For one thing, as antipoverty advocates point out, since 1955 the proportion of family budgets devoted to food has fallen from one-third to one-fifth.” (“Measures of Poverty”, Readings in Macroecnomics, 28th edition,)

There is an opposite view. “Poverty calculations also have critics on the right. Conservative critics contend that the official poverty rate overstates poverty in the United States.” (ibid.)

The fact that comes out is: Methodology is not even spared of class interest. Conservative interests like to deny existence of the poor. An ostrich policy is preferable to the interests instead of resolving the problem of poverty. And, interests make them incapable of resolving the problem. It’s an inherent limitation.

There is need to revise the poverty line. Scientific approach requires this. It will be easier to propagate conservative class interests without a proper measurement method; but that will ultimately hurt the interests although the interests with short sighted view prefer immediate profit. Jeannette Wicks-Lim, assistant research professor at the Political Economy Research Institute at the University of Massachusetts-Amherst, writes: “Without revising the official poverty line to reflect the actual costs of families’ basic need, the key statistics we use to understand economic deprivation in the United States will not only undercount the poor, but it will do so by a larger margin every passing year.” (“Lies, Damned Lies, and Poverty Statistics”, Readings in Macroecnomics)

The poverty line controversy also reveals another fact: State of scientific knowledge in an advanced capitalist economy, signs of a moribund society.

Stiglitz describes the state of the society: “America likes to think of itself as a land of opportunity, and others view it in much the same light. But, while we can all think of examples of Americans who rose to the top on their own, what really matters are the statistics: to what extent do an individual’s life chances depend on the income and education of his or her parents?

Nowadays, these numbers show that the American dream is a myth. There is less equality of opportunity in the United States today than there is in Europe – or, indeed, in any advanced industrial country for which there are data. […] In a country where money trumps democracy, such legislation has become predictably frequent. […] Inequality leads to lower growth and less efficiency. […] The Great Recession has exacerbated inequality, with cutbacks in basic social expenditures and with high unemployment putting downward pressure on wages. […] America has become a country not “with justice for all,” but rather with favoritism for the rich and justice for those who can afford it […] America can no longer regard itself as the land of opportunity that it once was. (“The Price of Inequality …”, op. cit.)

The “story” is almost endless as it’s of a vast empire. However, the story helps understand capitalism, its present state, its limitations, and the need to have a new economy that shall not breed and increase inequality.