Today Oct 22 is the National Day of Protest to Stop Police Brutality, Repression and the Criminalization of a Generation, see https://www.facebook.com/events/1493373830919151/, http://stolenlives.org/, https://www.facebook.com/StolenLivesProject, http://october22.org/ and their various local chapter (NY, Chicago, L.A. etc) pages on facebook.

TO HIGHLIGHT THE EPIDEMIC OF RACIST POLICE TERRORISM (MAJORITY OF VICTIMS ARE PEOPLE OF COLOR) AND IN THE AFTERMATH OF ERIC GARNER’S, MICHAELS BROWN’S AND  MANY OTHER POLICE KILLINGS AND BEATINGS OF UNARMED (WO)MEN, WE DECIDED TO INTERVIEW MS. DANETTE CHAVIS, A MOTHER/ACTIVIST, TO SHED THE NEEDED LIGHT ON THIS CAUSE, WHICH IS A GLOBAL ONE. See also https://www.facebook.com/MotherAgainstPoliceBrutality

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INTERVIEW WITH DANETTE CHAVIS ON NATIONAL ACTION AGAINST POLICE BRUTALITY – www.change.org/petitions/national-action-against-police-brutality, https://www.facebook.com/NationalActionAgainstPoliceBrutality
UNIFIKATION:

– Can you talk a little bit about yourself and your social justice activism?

Danette Chavis: Greetings, I’d be happy to talk about my activism

*Ever since I can remember I’ve always been an advocate for justice looking to speak out on the behalf of the voiceless. I spent many years doing that as a Union representative at my previous place of employment and enjoyed it very much. But in October of 2004, I lost my only son at the age of 19 at the hands of law enforcement – which thrust me into an entirely new area of injustice. And for the last 10 years I’ve been fighting and advocating for justice on behalf of many.

– Is there an overall goal you’d like to achieve?

*The overall goal I would like to see fulfilled is a “nation wide” demand for justice. I believe that without a “national outcry” demanding police accountability, the murders, assaults and false incarcerations shall continue. To facilitate a “national out cry” I’ve initiated a petition demanding National Action Against Police Brutality.

– How is the progress going, regarding the petition and press coverage?

*The petition is doing fairly well. We have over 14,000 signatures and counting. As of yet, the press and mainstream media aren’t really aware of this action except for when press conferences and rally’s are held demanding justice for a family. It is mentioned to show the need for such action. Yet, I have done radio and cable television which has proved to be favorable.

– I noticed someone minimized the petition initiative, while others applaud it and sound thankful for the ability it has to connect on a national scale. See f.e. the many groups fighting for justice for victims of police brutality. How do you reply to people having this pessimistic approach?
*In any action initiated they will always be those who agree and those who disagree. I believe those who “disagree” do so because of the simplicity of a petition. They are unable to see justice brought about by a piece of paper with signatures upon it. And if you consider it on those terms I would have to agree. However, those are not the terms by which I initiated this action. The power of the petition is not the “signatures” but the people backing the demand. I would like for people to focus on “the power of the people” and not the “power of a petition”.

– Do you think the Ferguson case got more people ‘active’?

*There are many groups and organizations fighting and demanding justice and these things must be done because it lets the public know of an atrocity that occurred that otherwise would not receive news coverage. I applaud and support those efforts but I do not believe they are sufficient by themselves. There must be a “nation wide” demand for action – in addition to the marches and protests demanding justice! Because if there isn’t a “nation wide” demand there will be no “end” to the marches and protests concerning police murder. The marches and protests on the ground are dealing with the symptoms of a greater problem. It is my hope to deal with the problem “head on”.

– I remember you were being called ‘racist’ by someone for speaking out on racism, do you think the Ferguson case made more people willing to talk on the racism they or their families have faced from law enforcement?

*Not only did Ferguson get more people into activism – it brought to light the racism that yet exists in this country! America likes to pretend it doesn’t have a “race problem” and the election of Obama “confused” people into believing that the issues concerning race no longer existed and that whatever was being suffered by African Americans was of their own doing. I think more than anything Ferguson demonstrated not only that racism was “alive and well” but the system itself helped enforce and maintain it. And those attempting to “cover it” by media were themselves “arrested and assaulted” for doing so. It is my hope that whether or not media adequately “covers it” that families affected by racism, police brutality, and murder – continue to make their voices heard.

-I also remember some issues you observed some months ago about NY, because they sounded very familiar to the Chicago area where we reside. F.e.: often racial disparities/inequality when it comes to leisure – some people get criminalized through tickets for being out at night, while others don’t and instead enjoy the privilege of a night open gym. Over here, we also have a 24-7 gym. Connected to this is the growing gentrification process which I know affects New York too, do you have anything to say on this?
(SEE MUST-READS on gentrification on New York and beyond: http://www.alternet.org/culture/white-supremacy-stripped-bare-what-do-right-thing-tells-us-25-years-later?paging=off&current_page=1#bookmark, http://www.aljazeera.com/indepth/opinion/2014/05/peril-hipster-economics-2014527105521158885.html, via https://www.facebook.com/humboldtparknot4sale?fref=nf – http://www.alternet.org/violence-gentrification-american-cities, http://sfbayview.com/2014/03/sfpd-enforced-gentrification-killed-alex-nieto/ ,http://sfbayview.com/2014/04/degentrification-zones-a-poor-people-led-plan-to-take-back-this-stolen-and-gentrified-land-using-a-twist-on-the-mans-killer-plans/, http://sfbayview.com/2014/02/the-crime-of-ellis-act-evictions/, http://www.poormagazine.org/node/4433, http://www.poormagazine.org/homefulness, http://groundworkforpraxis.com/2014/05/09/round_table_1/, http://www.alternet.org/search/site/gentrification)

*As we look across the nation we see policies put in place under the guise of “crime prevention” in an attempt to solve “black on black” within the community. However, when the polices are examined we discover “racism” at the root as well as an attempt to incarcerate and criminalize the youth.

(NOTE; SEE UNIFIKATION DESIGN: http://www.zazzle.com/stop_criminalizing_the_youth_and_the_poor_t_shirt-235434292204873777) These policies such as “stops&frisks” not only violated rights underneath the constitution – but arrested “thousands upon thousands” of innocent people who were brutalized in the process. The data shows that less than 2% warranted being arrested and the policy did little to nothing, in regards to solving or preventing crime. It cost tax payers in New York City thousands of dollars and didn’t work. Yet, the fight to maintain and keep it enforced had to go all the way to the Supreme Court – which found it Unconstitutional! Despite the supreme courts decision, the Mayor and commissioner at that time filed an appeal on the supreme courts decision while the Mayor made public announcements that he should have had “more blacks arrested” than he did. These are public elected officials who are making and enforcing these policy’s that are racist and serve no purpose but to “arrest, brutalize, and even murder” in the name of “protecting and serving”. We must then ask the question: Who are you protecting and who are you serving? Because it is certainly not “us”. Our efforts concerning national action shall continue and I would like to encourage every one to not only sign the demand for action but extend your “support” as well. ***Donations of any amount are now being accepted and may be sent to the following: http://www.gofundme.com/POLICE-ACCOUNTABILITY ***

Thank you.

Danette Chavis

National Action Against Police Brutality – www.change.org/petitions/national-action-against-police-brutality, https://www.facebook.com/NationalActionAgainstPoliceBrutality

NAAPB@Icloud.com

http://www.youtube.com/watch?v=Vt4FQil90_s#t=51, MORE VIDEOS AT OFFICIAL CHANNEL http://www.youtube.com/channel/UC4hg6VF1WgDJugtvhC4d74g

AND ‘A Mother Speaks (The Game is Tag, Don’t be It). A mother who lost her son to police brutality shares her thoughts to a group of young people in the Bronx. Stay tuned for a recording of her poetry.’ http://www.youtube.com/watch?v=od-K26wdDGM

Image from: http://surf-link.com/prende/media/b1.jpg
By Carlos Vilas, in NACLA Report on the Americas, 19 June 1996

http://www.hartford-hwp.com/archives/40/066.html

Carlos Vilas is a sociologist and historian at the National Autonomous University of Mexico (UNAM), and a member of NACLA’s editorial board. The debt crisis of the early 1980s and the macroeconomic adjustment and neoliberal reforms that the region’s governments implemented to deal with it resulted in a dramatic increase in the number of people living in poverty. In 1980, 118 million Latin Americans–about a third of the region’s total population–were poor. By 1990, that number had increased to 196 million, or nearly half the total population. Eighty percent of these 78 million “new poor” live in cities, which helps explain the congestion and deterioration of many Latin American capitals.1 This 42% growth rate of the “new poor” between 1980 and 1990 was almost double the 22% population growth rate in the region during the same period.

This veritable process of poverty production contrasts sharply with socioeconomic trends of the preceding decades. The proportion of poor people within the overall population in Latin America fell from 51% in 1960 to 33% in 1980. During this 20-year period, the number of poor people increased by 9 million, or 8%, while the total population grew by 145 million, or 67%. This drop in the percentage of poor people was obtained without programs designed to “combat poverty.” It was, rather, the result of the overall functioning of the economy, which integrated large segments of the population by creating new jobs, and helped to progressively distribute income through business-labor negotiations regulated by the state.

Latin America’s economy began to rebound from the economic recession in the mid-1980s. Gross domestic product (GDP) grew 9.5% between 1986 and 1990, and another 15% between 1991 and 1995.2 As poverty levels remained constant or increased despite economic growth, it became clear that structural adjustment does not by itself reduce poverty and macroeconomic recovery does not translate into significant social improvement. This provoked alarm among governments and the multilateral lending institutions like the World Bank and the Inter-American Development Bank (IDB) that were advising them on how to implement the adjustment measures. They saw this burgeoning poverty as a source of political instability, and as fertile terrain for demagogues and populists that might threaten the neoliberal restructuring process. As a result, these agencies began to emphasize the need to create programs to combat poverty.

In this way, social policy entered into the neoliberal reform agenda as a question of poverty and, in fact, was reduced to that. Neoliberalism considers the growth of poverty to be a pathology, not a consequence of the economic system. Hence it isolates poverty from the process of capital accumulation and economic development, and reduces the solution to designing specific social policies.

Any social policy performs two essential functions. First, it supports the process of capital accumulation through the social reproduction of the labor force. Second, it legitimizes the overall political order by offering social services that help create consensus among the population that benefits from them. The way in which these two functions are performed depends on the political and social dynamics of each country. Social policy is an arena of social and political conflict among social groups, whose outcome is expressed in government decisions.

Over the past decade, the passage from a Keynesian-Fordist model of economic development to a neoliberal one has had significant repercussions on the nature of social policy in Latin America. In the Keynesian-Fordist model, the state regulated economic activity and intervened in specific sectors, including the establishment of state-owned enterprises. Increases in economic productivity led to salary increases and expanded employment which benefited the population as a whole.

Social policy in this model reinforced the process of capital accumulation to the degree that it created externalities for private enterprises.3 For example, public investment in education, health care, worker training, and low-income housing represented a savings for the private sector, which would otherwise have had to invest in these areas. Meanwhile, employment, wage and pricing policies improved the purchasing power of individual workers and the domestic market as a whole. Social policy was seen as an element of investment, not an expense. Both economic and social policies in the Keynesian-Fordist model facilitated the incorporation of broad sectors of the poor, especially the urban poor, into the political and economic system.

Latin America during this period was characterized by widespread social mobility, stimulated–within certain limits–by the state. Together these varied elements helped constitute what was known as the “national-popular state,” or the “national-developmentalist state”–the Latin American proxy of the western European “welfare state.” Social policies contributed to capitalist development, were reformist by nature, and fed social mobility, which gave the political system broad legitimacy. Citizen rights were thus imbued with socioeconomic rights. Citizen rights were also expanded into the political realm, as women and indigenous people were granted the right to vote. The implicit paradigm of social policy–and of state policies in general–was integration.4

With variations from country to country, the Keynesian- Fordist model peaked between the 1930s and 1970s. It entered into crisis because of changes in the international system since the 1950s, increasing divergence between business interests and labor demands, and recurring fiscal crises. Military dictatorships, authoritarianism, and later, the debt crisis that detonated in 1982, led to the exhaustion of this model of development and its social policies.

Recognizing the limitations and inefficiencies of the Keynesian-Fordist model should not lead us to minimize its successes. The integrating dynamic of this model reduced poverty by moving labor from low-productivity activities to modern ones, improving employment levels and the quality of jobs, increasing disposable income through wage hikes and price subsidies for urban workers, and redistributive state social policies.

The crisis of the 1980s created the conditions for the application of the neoliberal model. This model is characterized by the deregulation of the economy, trade liberalization, the dismantling of the public sector, and the predominance of the financial sector of the economy from production and commerce. The state has abandoned its role as an agent of social development and integration. Instead, it helps define winners and losers in the marketplace by setting the exchange rate, interest rates and tax policy, all of which pump income toward the financial sector.

Social policy is reduced to a limited series of measures intended to compensate the initial negative effects of structural adjustment among certain sectors of the population. These negative effects, neoliberal policy makers purport, are rooted in the irrationality of the previous system’s distribution of resources. Social policy is considered transitory: after an initial painful phase, structural adjustment will reestablish basic macroeconomic equilibrium and promote economic growth without inflation. New jobs will be created within the modern sector of the economy–the “trickle-down” effect–which will raise incomes and leave only a small proportion of the population in need of public attention.

As a matter of principle, neoliberal economics does not concern itself with social policy. A strong economy, it is argued, will make permanent social policies unnecessary. Social issues are considered a government expense, not an investment; the concept of social development gives way to that of social compensation. With the drastic cuts in social spending, however, only minimal compensatory mechanisms can be sustained. As a result, social policy has contracted, and its two traditional functions–accumulation and legitimization–have experienced severe adaptations.

Neoliberal social policy helps promote capital accumulation through financial maneuvers. For example, the privatization of the retirement and pension systems in many Latin American countries handed over huge financial resources to the private capital market, thereby stimulating capital accumulation. For their part, social-investment funds promote capital accumulation by supporting small-business activities like repair shops and industrial homework enterprises.

For the rest, neoliberal social policy operates like a charity, directing aid toward the extremely poor. Rather than improving the working and living conditions of low-income groups, social policy tries to assist the many victims of structural adjustment, and to prevent further deterioration in the living standards of the population already below the poverty line. Neoliberal social policy doesn’t help these people get out of the hole of poverty; it simply tries to prevent them from sinking further into it.

These characteristics of neoliberal social policy severely limit its capacity to fulfill a legitimizing function for the political system. In fact, social policy is essentially reduced to putting out fires so that situations of extreme social tension do not become larger political problems. Neoliberals fear that such problems would create a climate of instability that might negatively affect the inflows of foreign capital, putting the whole economic model at risk. In this sense, social policy becomes closely linked to the politics of the moment. On the eve of the 1994 presidential elections in Mexico, for example, the government of Carlos Salinas poured huge sums of money into “Procampo,” a new program to provide temporary relief to the rural poor. The implicit objective of the Mexican social-investment fund, Pronasol, was to reduce the level of political conflict in those parts of the country where the opposition could gain ground.5

Central America’s health-sector reform dramatically illustrates the internal tensions and contradictions of neoliberal social policies in poverty-stricken countries. Although Central American governments began discussing the need to reform the health sector in the late 1980s, the recent adoption of health reform was prompted by loans offered by the World Bank and the IDB. These loans were granted only on the condition that governments implement broader public-sector reform. The development banks’ concern with health reform reflects their wider interest in macroeconomic adjustment and state deregulation. The scope and content of reform in the health sector are tailored to the overall goals of neoliberal reform.

Since macroeconomic reform usually involves sharp cuts in already meager public spending on infrastructure and social services, the impact of health reform is ambivalent and even contradictory. In Nicaragua, for example, public spending on health dropped from 5% of GDP in 1990 to 4.4% in 1994. Today the government spends an average of $19 per person a year on health services, or $1.50 per person per month. The figures for Guatemala are even worse. Public health expenditures dropped from 1.5% of GDP in 1980 to 0.9% in 1990, climbing to just over 1.3% in 1993. Costa Rica, on the other hand, spent 7.5% of its GDP on public health in 1993, an average of $60 per person.6 Efficiency, cost-cutting, and better managerial skills–all of which are all urgently needed in Central America–are emphasized. Yet, efficiency is undermined by budget cuts reducing the impact of policies and actions. Cost-cutting is urged upon countries that already devote meager resources to health and other social services. The emphasis on management skills and techniques is abstract, and frequently bears little relation to the specific character and needs of the health sector.

Most health ministries in Central America face increasing shortages in infrastructure, equipment and personnel– shortages that cannot be offset by the “self-management” of civil society in countries in which the overwhelming majority of the population is poor. In recent years, greater emphasis has been placed on improved training for health-care specialists, but low salaries and poor working conditions jeopardize efforts to recruit and retain skilled personnel. Since health is not–despite the rhetoric–a priority for most Central American governments, high turnover of personnel in top-level positions in health ministries reinforces the lack of continuity and the loose commitment to health-care reform.

Within this general framework, differences exist among countries. In Costa Rica, health-care reform is more independent from the multilateral lending agencies. Even as reform takes the shape that these agencies favor, the notion of health as a social service has been preserved. By contrast, in the health-reform program designed by the IDB in Guatemala, the Ministry of Health must get explicit IDB approval for 43 out of 63 components of the program in order to move to the next step and have funds disbursed.7

Neoliberal social policy has three basic characteristics, which are tightly interwoven: privatization, targeting, and decentralization. Privatizing social services is considered a way to alleviate the fiscal crisis, to make service delivery more efficient, and to avoid the micro- and macroeconomic distortions that arise from free public services. Users’ fees have been imposed or increased, and new operating principles based on the criteria of business and commercial profit have been introduced. These have had significant repercussions on the quality and breadth of coverage. Users’ fees, it is argued, are a way of reducing the financial burden assumed by lending agencies. They are also supposedly a way of ensuring that public services will be used only by those who really need them, avoiding the waste of resources.

Privatization implies the abandonment of the notion of public service, and its replacement with that of a business out to make a profit. Access to social services is no longer considered one’s right as a citizen, but is based on one’s ability to pay. The privatization of social services generates new social inequalities because only wealthier groups can now afford them. This explains the resistance to privatization from broad sectors of the lower and middle classes who believe that they have a right to health care and education. In Argentina, for example, low-income salaried workers lost access to medical attention when the social- security system was privatized. As a result, these workers are forced to rely on the public health system, which is already overwhelmed. In a domino effect, the poorest of the poor have ended up excluded from public hospitals. Making matters worse, after problems in his economic program became apparent last year, President Carlos Menem and his minister of economics, Domingo Cavallo, ordered further cuts in social spending. As a result, several public hospitals in Buenos Aires have been forced to close, leaving thousands of people completely without access to basic medical care.

Privatization also entails the loss or reduction of state financing for projects once run by the government as a function of its role as representative of the public interest. In El Salvador, for example, the government delegated to the Business Foundation for Educational Development (FEPADE), a business-oriented think tank, several important worker-training programs for ex-combatants from the Farabundo Marti National Liberation Front (FMLN) and demobilized members of the armed forces. The program was designed by FEPADE, and financed with foreign funds.

The efficiency of the privatization process usually depends on the state’s regulatory capacity. In Latin America today, however, the state has abdicated this function, paving the way for the formation or consolidation of oligopolies in the health, education, and social-security markets. As a result, social policy becomes shaped in ways amenable to particular groups and special interests that can exert the most pressure. In the case of the health sector, for example, medical laboratories, large private clinics, and professional organizations have gained significant influence. In housing policy, construction companies and banks have become major players.

With privatization, health and education are no longer rights. They are luxuries or, at least, pieces of merchandise to be bought and sold in the marketplace. If you cannot afford the merchandise, don’t buy it. In other words, if you can’t afford medical care, die. If you can’t pay for education, stay illiterate and sell chewing gum on the street corner. The privatization of pensions in Bolivia illustrates this logic with particular cruelty: the government set the age to begin to “enjoy” retirement benefits almost ten years higher than the life expectancy of the average Bolivian.

The second principal tenet of neoliberal social policy is targeting. Given the contraction of funds assigned to social policy, targeting is promoted as a way to guarantee that resources effectively reach those to whom they are directed. The arguments in favor of targeting echo the criticisms of the Keynesian-Fordist model. That model was based on the principle of universal, free social services. Neoliberals argue that the model benefited workers in the urban wage- labor force and the middle classes, but did not reach the poorest of the poor–the rural poor and the informal sector. Targeted social programs, specifically designed to reach the neediest, impose new management practices and efficiency criteria on state social policy. Clearly however, targeting responds less to the supposed inefficiencies of the Keynesian-Fordist social-security model, than to the need to respond to mounting social problems with scarce resources.

In theory, targeting aims to fulfill a basic requirement of any public policy: reaching the intended constituency, and optimizing the use of resources. The first obstacle is defining the beneficiary group given the magnitude of needs. This process normally involves much more than a technical breakdown of the population according to particular statistical indicators. Who benefits from these special programs is the outcome of a complex interplay of pressures and competition among potential beneficiary groups. In this sense, targeting is highly sensitive to struggles over income redistribution, which grow more acute as the economic crisis deepens and resources become scarcer. These programs are also used as patronage tools to create and maintain clientelistic relationships. In the same way, targeting is open to bureaucratic or political manipulation for electoral purposes.

Experience shows that it is extremely difficult to redirect resources that used to go to the middle class toward the poorest. In general, the poor exert little pressure, either because of their lack of experience or their sheer vulnerability. Moreover, it is middle-class professionals, not the poor, who design the projects. In Bolivia, for example, the Social Emergency Fund (FSE) did not reach the poorest Bolivians, since they are not the ones who most vocally and visibly demand resources. The majority of the projects were carried out in the wealthier or relatively less-impoverished areas, since there was little demand for funding from groups in the poorest regions of the country. Targeting may in fact aggravate inequality, since targeted programs can improve the situation of one particular community while others languish in poverty. In the end, the desire to keep people who are not poor from receiving benefits often results in the exclusion of many of the poor.

Targeting frequently puts a heavy burden on women. Especially with targeted community-based programs such as food supplements, the social policies rely on the direct involvement of women. Women can gain important organizing experience by participating in these programs, which have the potential to become the basis for a truly participatory social policy. At the same time, they make women’s workload heavier. As unpaid female labor grows, gender inequality is reinforced.8

But above all, the neoliberal approach to fighting poverty has proven incapable of answering a fundamental question: What does the notion of target groups mean when 60 to 80% of the population lives below the poverty line, either because of the impact of structural reform or for pre-existing or other reasons?

The final basic tenet of neoliberal social policy is decentralization. Neoliberals criticize the Keynesian-Fordist model for being too centralized. They argue that decisions concerning social policy should be assumed by lower echelons of government such as provinces or municipalities, and eventually by the local organizations of the affected population and other NGOs.

Decentralization can give people a sense of the importance of working together to directly confront their problems. It encourages the development of local leadership and gives poor people training in management practices. The Oramento Participativo–the participatory budget–under the municipal administrations of the Workers’ Party in Brazil is an example of genuine decentralization of social policy. Citizens participate directly in the decision-making process both in terms of defining government policies and determining how money is spent. This experience, however, belongs to a specific political project that is completely at odds with neoliberalism.

Up to now, decentralization in the neoliberal context has focused on program implementation, not program design. This amounts to functional decentralization–also referred to as “deconcentration”–but not political decentralization. This lack of political decentralization lends credence to the hypothesis that the objective of decentralization is not the democratization of social programs and policies, but rather achieving greater efficiency from scarce resources.

Making the transition from a highly centralized system to a decentralized one is complex and takes time. This is particularly true when the centralized structures have been around for more than a century and have become part of the mindset of the actors. One of the problems facing the decentralization process–including the operative kind–is the inability of actors at the local level to assume the tasks delegated to them. Virtually overnight, for example, municipalities have found themselves responsible for providing a gamut of social services without the necessary financial, human, administrative, and material resources. This often translates into inefficiency–at least initially– in service delivery, the deterioration in the quality of services, and the emergence of multiple entities that perform functions that used to be the responsibility of a single institution.

While it is true that grassroots participation in social- policy implementation is greater in local structures than in the centralized entities that were usually far away and bureaucratic, not all sectors of society get involved. Participation is the result of an array of factors that are normally absent, or exist to a lesser degree, in the neediest social groups: organizing capacity, a sense of efficacy, and basic education. Without the presence of a central state with the political will to correct inequalities, decentralization ends up leaving out the weakest social groups.

Criticism of the inefficiencies of the Keynesian-Fordist social policy points to its limitations and uneven reach, but doesn’t improve the results of neoliberal social policy. Even if we evaluate neoliberal social policy only in the limited sense of combating poverty, the results after a decade of neoliberalism are scarce. The majority of the poverty- alleviation programs represent a new form of relating with the poor, which hasn’t translated into a significant reduction in overall poverty.

Until now, neoliberal social programs have shown the capability to reduce the number of people living in extreme poverty. Emergency employment programs, food subsidies and the like can effectively attend to extreme needs. Rising out of poverty, however, is a much more complicated process that depends on a diverse set of economic, financial, political and institutional factors that go far beyond social policies.

All models of capital accumulation assume a given portion of “surplus population”–in other words, people who look for work, but don’t find it.9 Since neoliberalism privileges the financial sector of the economy over the productive one, it presumes a much larger portion of surplus population than the Keynesian-Fordist model of the past. In this context, one can expect little of neoliberal social policy, regardless of its technical merits.

Simply put, neoliberalism marginalizes and expels people at a greater rate than these programs can compensate. The case of Mexico is especially illustrative of the tension between the technical efficiency of a particular sectoral policy and the logic driving the overall economic model. While Pronasol, Salinas’ poverty-alleviation program, succeeded in reducing the number of extremely poor Mexicans by 1.3 million between 1989 and 1992, the very same number of people lost jobs in the industrial sector of the economy between 1988 and 1992.10

This kind of juxtaposition highlights the inability of targeting to have any significant impact given the profound social inequalities that the economic system generates. In Chile in 1970, for example, only 17% of households were poor; in 1989, after almost two decades of neoliberalism and dictatorship, poor households represented 38.1%.11 In 1995, the richest 20% of Chilean households earned 18 times the income of the poorest 20%. Chile, praised as a neoliberal success story, now has the fifth worst income distribution in the region.12

Overall neoliberal economic reform defines the possibilities and limitations of the new social policy much more than the technical limitations of the programs themselves or the “errors of the past.” For example, this year Mexico will have to make more than $32 billion in payments on its debt to foreign creditors, which equals 35-40% of the total value of its exports. In such circumstances, there isn’t much money left over to fight poverty or to promote social development.

The neoliberal hypothesis that economic growth ultimately generates increased employment and lessens poverty doesn’t hold up against the facts. The passage from economic crisis to economic recovery has not produced substantial social improvements. The increase in productivity and economic output have not generated corresponding increases in employment levels and working conditions. Employment, when it expands, does not keep pace with population growth. Real wages remain depressed as well. The biggest surge in employment is taking place in the informal sector, which offers work that is precarious and low-paying. Of the 15.7 million jobs created in all of Latin America over the last five years, 13.6 million of those came from the informal sector.13

Faced with the rigidities of the free market and the bias of public policies, there is little that neoliberal social policy can accomplish with respect to legitimation of the social order either. Job insecurity, violence, urban congestion, rising common crime and growing social inequality are products of the crisis of the 1980s and the social and economic policies adopted to confront that crisis. The economic recovery that followed the initial period of structural adjustment has left a trail of victims among small and medium business owners and employees, urban wage earners, women, rural communities, and children.

Costa Rica represents an example of the positive results that can be obtained in a public welfare system when equity is genuinely valued. Direct public subsidies through health programs, education, housing, food, social security, water and sewage have reduced total poverty by two-thirds over the course of the 1980s.14 Thanks to its heterodox, balanced and creative focus, Costa Rica is one of the two countries in Latin America that in that traumatic decade succeeded in reducing poverty levels, including in the countryside. The other country is Cuba.

Image From: http://stop-institutional-racism.blogspot.com/2006/12/shooting-of-sean-bell-and-resurgence.html
Professor Marjorie Cohn
Thomas Jefferson School of Law
JURIST Contributing Editor

The United States government’s walkout at the World Conference Against Racism, Racial Discrimination, Xenophobia and Related Intolerance in South Africa belies our commitment to eradicating racism in this country. Although framed as opposition to resolutions condemning Israel for its treatment of the Palestinians, the Bush Administration is really worried about international attention focusing on inequality here in the United States.

When the U.S. delegation left the conference, the South African government stated, “It will be unfortunate if a perception were to develop that the U.S.A.’s withdrawal from the conference is merely a red herring demonstrating an unwillingness to confront the real issues posed by racism in the U.S.A. and globally.”

Our country is a party to the International Convention on the Elimination of All Forms of Racial Discrimination. That treaty requires us to condemn racial discrimination and to pursue by all appropriate means and without delay a policy to eliminate racial discrimination. It also mandates that we guarantee to everyone without distinction as to race, color, or national or ethnic origin, the rights to public health, medical care, social security, social services and the right to education and training.

Yet 139 years after the Emancipation Proclamation, vast disparities with respect to race pervade every aspect of American life. Non-English-speaking minorities are discriminated against in the educational system and widespread segregation still exists in public elementary and secondary schools. Extensive job discrimination endures in both the public and private labor markets. There are discrepancies in the incomes of white and minority high school graduates.

Racial profiling from the initial police stop to the charging process and trial through the sentencing procedure has been widely documented. Mandatory sentences of life imprisonment are imposed disproportionately on minority defendants. Non-whites are much more likely than whites to be charged with and sentenced to death for substantially similar crimes.

Police brutality against minorities came out of the closet with the videotaped beating of Rodney King in Los Angeles, and the execution of Amadou Diallo and the sodomizing of Abner Louima in New York. The Rampart Scandal in the Los Angeles Police Department proves that the problem encompasses more than just a few bad apples.

Environmental racism has resulted in the location of toxic waste dumps in communities of color. Hate crimes against racial minorities persist. Immigrants, also frequent victims of hate crimes, are often abused by the U.S. Immigration and Naturalization Service.

The United States boycotted prior United Nations conferences on racism in 1978 and 1983, also ostensibly because of resolutions equating Zionism with racism. Siding with Israel isn’t based on the U.S. government’s great love for the Jews, or concern for them as an oppressed people. It is Israel’s strategic location in the Middle East, near the oil-rich Persian Gulf, that motivates the U.S. to support Israel, while disregarding repression in other global hotspots. The United States ignored the genocide in Rwanda, Turkey’s scorched earth campaign against the Kurds, and the ethnic cleansing of 200,000 Serbs from the Krajina reigon by the Croatian army in 1995.

U.S.-led NATO bombed the people of Yugoslavia for 78 days and then moved in to occupy Kosovo and Macedonia, not to stop ethnic cleansing, but to maintain American hegemony over European markets and transport routes for Caspian Sea oil. The United States will not, however, defy Israel by asking the United Nations to send observers or peacekeepers into the West Bank and Gaza, to stop the horrific bloodshed there.

Adjoa Aiyetoro, an attorney with the Women’s International League for Peace and Freedom in Washington, said of the U.S. decision to pull out of the conference: “We definitely believe it is a smoke screen . . . the United States is showing one more time [that] all this talk about freedom and liberty is a lie.” She added, “They need to stop hiding behind and supporting Israel when the United States isn’t even supporting its own people.”

The other issue that terrified the Bush Administration about the 2001 conference was a demand that the U.S. pay reparations to African-Americans for the damage done to them by slavery. Rep. John Conyers Jr. (D.-Mich.) reported that other delegates from the Congressional Black Caucus alleged the U.S. was using the Middle East issue as a smoke screen to avoid discussion of reparations.

Bush had decided not to send Secretary of State Colin Powell to South Africa for the conference, replacing him instead with a “mid-level” delegation, which staged the walkout. The Reverend Jesse Jackson aptly characterized this mid-level delegation as a “high-level insult.”

The United States government was insulted when it was kicked off the United Nations Commission on Human Rights earlier this year. The self-anointed global human rights policeman should attend to the inequality and injustice at home. U.N. Secretary General Kofi Annan told the delegates in South Africa, “Your anger can be valuable if you channel this into a worldwide racism struggle where all of your agendas converge.” By its high-level boycott of the conference, the United States government is pursuing its own agenda of denial of the institutional racism that persists in this country.

Marjorie Cohn is an associate professor at Thomas Jefferson School of Law in San Diego, where she teaches International Human Rights Law. She welcomes comments on this essay at.
September 5, 2001

From: http://www.globalresearch.ca/index.php?context=va&aid=14464

Part 1
by Andrew Gavin Marshall

Introduction

Humanity is on the verge of entering into the most tumultuous period in our history. The prospects of a global depression, the likes of which have never been seen before; a truly global war, on a scale never before imagined; and societal collapse, for which nations of the world are building totalitarian police states to control populations; are increasing by the day. The major global trend forecasters are sounding the alarms on economic depression, war, a return to fascism and a total reorganization of society. Through crisis, we are seeing the reorganization of the global political economy, and the transformation of capitalism into a totalitarian capitalist world government. Capitalism has never stayed the same through its history; it has always changed and will continue to do so. Its changes are explained and analyzed through political-economic theory, both mainstream theory and critical. The changes are undertaken over years, decades and centuries. The next phase of capitalism is one in which the world moves to a state-controlled economic system, much like China, of totalitarian capitalism.

The global political economy itself is being reorganized into a world government body, consisting of one center of global power where the socio-political-economic power of the world is centralized in one institution. This is not a conspiracy theory; it is a reality. Nor is this a subject confined to the realm of “internet conspiracy theorists,” but in fact, the concept of world government originates and evolves throughout the history of capitalism and the global political economy. Mainstream and critical political-economic theory has addressed the concept of world government for centuries.

The notion of a world government has such a long history, as the forces driving the world into such a structure intertwine with the history of the modern global political economy itself. The purpose of this report is to examine the history of the global political economy in taking steps toward forming a world government, in both theory and practice.

How did we get here and where are we going?

Why Study Theory?

Within the academic realm of Political Science, specifically the field of Global Political Economy (GPE), it is essential to understand the various theoretical perspectives of political economy so as to understand the actions and directions taken within the global political economy, and how capitalism has been and continues to be reorganized and altered. Theory provides the foundation upon which actors are understandable and actions are undertaken. As the political economist Robert Cox once stated, “Theory is always for someone and for some purpose.” It is important to understand and analyze the theoretical leanings of those making changes in the global political economy, in order to understand the changes being made, specifically the theoretical foundations of a world government. As well as this, it is important to examine critical theory in how it interprets both how and why a world government is being constructed.

Mercantilism

The history of political economic theory shows a continued fascination with the concept of constructing such a cosmopolitan or global community. The earliest forms of western Global Political Economy theorists lie in the early mercantilist period, and with the emergence of Liberal theory, following Adam Smith’s Wealth of Nations, mercantilist writers such as Friedrich List and Alexander Hamilton wrote critiques of the underlying Liberal concepts. List wrote in Political and Cosmopolitical Economy that Smith dispersed with the idea of a “national economy” in which nation’s determined economic conditions, and instead advocated replacing the “national” economy with a “cosmopolitical or world-wide economy.” List discusses the perspective of Jean-Baptiste Say (J.B. Say), a French liberal economist, saying that Say “openly demands that we should imagine the existence of a universal republic in order to comprehend the idea of general free trade.”[1]

List states that, “If, as the prevailing school [of political-economic thought] requires, we assume a universal union or confederation of nations as the guarantee for an everlasting peace, the principle of international free trade seems to be perfectly justified,” however, this prevailing thought “assumes the existence of a universal union and a state of perpetual peace, and deduces therefrom the great benefits of free trade. In this manner it confounds effects with causes.” List elaborates in explaining that, “Among the provinces and states which are already politically united, there exists a state of perpetual peace; from this political union originates their commercial union.” Further, “All examples which history can show are those in which the political union has led the way, and the commercial union has followed. Not a single instance can be adduced in which the latter has taken the lead, and the former has grown up from it.”[2]

It must be addressed that List is a mercantilist theorist. This means that he views the realm of the political and economic as an interacting realm in which they are intertwined and merged, however, the political realm remains above the economic, which is subject to the dictates of the political element. Liberal theorists believe that the political and economic realms are separate, and that they should be separated, so that political elements interact separately and without influence over the economic realm, which itself acts independently and separately of the political. This is the foundation for the ideas of the “free market” and the oft-quoted Adam Smith phrase, “the invisible hand of the free market,” which was only mentioned once in his entire volume of the Wealth of Nations. The ascension of liberal theorists marked a separation in the academic and theoretical studies, in which Political Economy was separated as a field, and saw the emergence of Political Science and Economics as separate studies.

As political economist Robert Cox stated, “Theory is always for someone and for some purpose.” The purpose of this separation was to compartmentalize academic thought and separate the realms of politics and economy, so as to better control both – as the banking interests, which dominated both the realms of politics and economics since the late 1600s, continued to view the world in terms of political-economic theory. It was a strategy of “divide and conquer,” in which theory and academia was divided in order to conquer and control thought on both sides. This separation continues to this day, as even the field of Political Economy is placed underneath and subjective to Political Science, whereas it would make more sense that Political Science and Economics would be under the umbrella of Political Economy. Again, compartmentalize thought and then the control of discussion and debate becomes much easier.

What List was arguing in his essay was a critique of the liberal concept of a cosmopolitical society, in which all nations are united in a world federation. Naturally, this was not the case in that era, it was an incorrect and dubious assumption on the part of liberal theorists. List explained that never before had economic or commercial interdependence and union led to a political union. List postulated that history showed that political union had to precede an economic union. However, List was writing in the first half of the 19th century, and history has changed the course of events and Political Economic theory. I would argue that the major banking interests, essentially made up of a dynasty of banking families (the Rothschilds, Warburgs, and later the Morgans and Rockefellers, among many others), decided to chart a different course, in which they would pursue a strategy in which economic union would be incrementally undertaken with the aim of constructing a political union to follow in its footsteps.

Central Banking

Thus, liberal economic theory came to the forefront, championed by the global hegemonic power of the day, Great Britain, which was firmly under the control of the banking dynasties. In 1694, the Bank of England was formed as a private central bank, which would issue the currency of the nation, lending it to the government and industry at interest, which would be paid back to the Bank of England’s shareholders, made up of these private banking dynasties.[3] The 16th to the 19th centuries was the period in which both the nation-state and capitalism emerged, soon followed by central banking in the late 1600s. This is when the origins of what was known as a “world economy” took place. Mercantilist economic theory dominated this period, in which the economy was secondary and submissive to the political structure of nations.

Liberal theorists rose in opposition to this. Adam Smith wrote the Wealth of Nations in 1776, the same year that the American colonies revolted against the British imperial forces in the country, and ultimately gained independence from the British Empire. Among many of the primary motivating factors for the Revolution were the British military presence in the American colonies, acting above the law; a heavy imposition of colonial taxes, particularly on tea and other imports from foreign nations such as France, in an effort to promote the mercantilist assumptions that the colony should only survive and trade with the metropole (imperial hegemon) – which extracts the resources of the nation in trade for material goods to that nation, creating a dependence upon the colonial power. Arguably one of the primary motivations for the Revolution was the control of currency by a foreign imperial power, with the ability to control inflation and devaluation, essentially controlling the entire economic conditions of the colony from abroad. The Founding Fathers of the United States understood the necessity of controlling one’s own currency if one was to preserve sovereignty and independence.

Following Britain’s humiliating defeat, which was aided by the French who supported the American revolt, European banking interests suffered a significant blow against their mercantilist expansion. Capitalism functions in that it constantly needs to expand and consume more. Central banking functions in a very similar, although much more dubious manner, in which it needs to expand its control over industry, nations and people through the expansion of debt, continually needing to bring more individuals, nations and industries under debt bondage. Debt is the source of all power and wealth for the central banking system – as they do not actually produce any tradable good, such as industry; nor do they provide any necessary service, such as government. Interest on debt is the source of income and authority for the central banking system, and thus, it needs to continually advance credit and expand debt. Thus, the loss of the American colonies as a source of expansionary credit and debt was a massive blow to their entrenched interests.

The European banking interests quickly learned their lesson regarding not falling under the imperial hubris of believing people of a given region or nation could never defeat imperial might and armies. Revolution had become a great threat to the entrenched capitalist, and particularly, banking interests.

Within a decade of the American Revolutionary War, which ended in 1783, another nation was going down the road of revolutionary zeal, in part inspired by the American example. However, this nation was no colony, but rather a mercantilist imperial power, and thus, its loss would be too great a loss to allow. In 1788, the French Monarchy was bankrupt, and as tensions grew between the increasingly desperate people of France and the aristocratic and particularly monarchic establishment, European bankers decided to pre-empt and co-opt the revolution. In 1788, prominent French bankers refused “to extend necessary short-term credit to the government,”[4] and they arranged to have shipments of grain and food to Paris “delayed” which triggered the hunger riots of the Parisians.[5] This sparked the Revolution, in which a new ruling class emerged, driven by violent oppression and political and actual terrorism. However, its violence grew, and with that, so too did discontentment with the Revolutionary Regime, and its stability and sustainability was in question. Thus, the bankers threw their weight behind a general in the Revolutionary Army named Napoleon, whom they entrusted to restore order. Napoleon then gave the bankers his support, and in 1800, created the Bank of France, the privately owned central bank of France, and gave the bankers authority over the Bank. The bankers owned its shares, and even Napoleon himself bought shares in the bank.[6]

The bankers thus sought to control commerce and government and restore order to their newly acquired and privately owned and operated empire. However, Napoleon continued with his war policies beyond the patience of the bankers, which had a negative impact upon commercial activities,[7] and Napoleon himself was interfering in the operations of the Bank of France and even declared that the Bank “belongs more to the Emperor than to the shareholders.”[8] With that, the bankers again shifted their influence, and remained through regime change.[9]

The Rothschilds ascended to the throne of international banking with the Battle of Waterloo. After having established banking houses in London, Paris, Frankfurt, Vienna and Naples, they profited off of all sides in the Napoleonic wars.[10] The British patriarch, Nathan Rothschild, was known for being the first with news in London, ahead of even the monarchy and the Parliament, and so everyone watched his moves on the stock market during the Battle of Waterloo. Following the battle, Nathan got the news that the British won over 24 hours before the government itself had news, and he quietly went into the London Stock Exchange and sold everything he had, implying to those watching that the British lost. A panic selling ensued, in which everyone sold stock, stock prices crumbled, and the market crashed. What resulted was that Rothschild then bought up the near-entire British stock market for pennies on the dollar, as when news arrived of the British victory at Waterloo, Rothschild’s newly acquired stocks soared in value, as did his fortune, and his rise as the pre-eminent economic figure in Britain.[11]

As Goergetown University History professor, Carroll Quigley wrote in his monumental Tragedy and Hope, “The merchant bankers of London had already at hand in 1810-1850 the Stock Exchange, the Bank of England, and the London money market,” and that:

In time they brought into their financial network the provincial banking centers, organized as commercial banks and savings banks, as well as insurance companies, to form all of these into a single financial system on an international scale which manipulated the quantity and flow of money so that they were able to influence, if not control, governments on one side and industries on the other.[12]

The period from 1815 to 1914 was known as the British Imperial Century, in which they adopted the liberal economic concepts of Adam Smith, and manipulated and distorted them for their own imperial ambitions. Mercantilism was still strong in practice, but rode under the banner of a liberal economic order, “free markets” and the “invisible hand.” The “invisible hand” was in fact, connected to a body made up of government and industry, molding the “free market” according to its designs, and the body was controlled by the brain, the central bank, the Bank of England. Markets were hardly “free” and the hand was visible to those who could see the rest of the body.

The Liberal Revolution

It was during this British imperial century that other nations, such as Germany and the United States, were pursuing mercantilist economic practices in order to protect their own nations from the British free-trade imperialism. It was in this context that mercantilist theorists such as Alexander Hamilton in the United States, and Friedrich List in Germany were writing in criticism of liberal economic theory.

Mercantilism was dominant in political-economic theory until the mid 19th century when the ‘liberal revolution’ manifested, largely in critical opposition to mercantilism. In liberal economic theory, the economic realm is autonomous and separate from the political realm, and functions according to its own logic. Within this theory, politics and economics, though separate spheres, are still connected, but remain independent of one another. Whereas mercantilists see the state as the primary actor in the global political economy, liberals see the individual (both producer and consumer) as being the major actor.

Mercantilists see the international arena as inherently conflictual, justifying their policies of colonialism and empire building in an international arena in which if one state does not colonize foreign lands and extract resources, another state will, and thus, will deprive the state that does not create an empire of resources and economic growth. In this sense, mercantilists view the world in terms of a zero-sum gain, in which the progress of one state requires the regression of another. Liberal theorists argue that the international arena, made up of individuals, constitutes a positive-sum gain, in which all individuals act according to self-interest, and in doing so, benefit everyone, and foster cooperation and interdependence. In this sense, the international arena is not inherently conflictual, but rather a cooperative and interdependent sphere in which order and stability is upheld by international regimes – such as the British liberal imperial order and the gold standard it instituted.

Where mercantilists view history as an amalgamation of conflicts and decisions made by states, liberal theorists view history as the sum of the unintended consequences of actions made by private individuals and activities. This implies almost an inherently natural progression of history – that it is not shaped by powerful forces in any designed or intended way, but is merely a natural response and reaction to the actions of individuals. This ties into the liberal concept of the natural state of a liberal economic order, bringing in the idea of the “invisible hand of the free market” which will determine economic activities.

Adam Smith’s notion of the “invisible hand” has been used to advance the idea that private individuals who seek personal wealth and gain through self-interest will unintentionally aid the interests of all of society. However, the “invisible hand” was mentioned merely once in Smith’s monumental Wealth of Nations, and was taken out of context. Smith was discussing how “Every individual naturally inclines to employ his capital in the manner in which it is likely to afford the greatest support to domestic industry, and to give revenue and employment to the greatest number of people of his own country.” In addition to employing “his capital in the support of domestic industry,” the private individual would “direct that industry that its produce may be of the greatest value.” Therefore, the individual “neither intends to promote the public interest, nor knows how much he is promoting it.” Smith explains that:

“By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.”[13]

Smith had conceptualized the “invisible hand” as the “natural inclination” of an individual to promote domestic interests, yet the phrase has been manipulated to promote the concept of a “self regulating market” in which the less regulation and restrictions there are, the better all society will be, because industry will naturally benefit all people. The manipulation of this phrase has taken the notion of the “invisible hand” away from the actions of individuals and transferred it to promoting non-regulation of economic activities. That is a far cry from Smith’s contention.

Smith even stated in the Wealth of Nations that, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.”[14]

In discussing regulation regarding wages for workers and resolving equity issues between the employers, or “masters” and the labour class of “workers,” Smith explained that, “Whenever the legislature attempts to regulate the differences between masters and their workmen, its counselors are always the masters. When the regulation, therefore, is in favour of the workmen, it is always just and equitable; but it is sometimes otherwise when in favour of the masters.” Further, “When masters combine together in order to reduce the wages of their workmen, they commonly enter into a private bond or agreement, not to give more than a certain wage under a certain penalty. Were the workmen to enter into a contrary combination of the same kind, not to accept a certain wage under a certain penalty [such as a union], the law would punish them very severely; and if it dealt impartially, it would treat the masters in the same manner.”[15]

These quotes by Adam Smith tend to fly in the face of the common perceptions and usage of Smith’s ideas, proving that liberal economy in practice is a far cry from the intent of its original theorist.

In the 1870s, the notion of a “liberal economic order” was challenged as the major European empires undertook an incredible extension of their imperial presence across the globe, itself a mercantilist practice – the idea of obtaining colonies in order to extract its resources, create a captive market for the imperial nations manufactured goods, and deprive its economic competitors of access to that market. Between 1878 and 1913, European empires extended their control over much of the world, specifically with the Scramble for Africa, in which all of Africa, save Ethiopia, was colonized by European powers.

This “new imperialism,” as it was known, proliferated throughout Europe following the rapid expansion of banking throughout the continent, and the pre-eminence of international financiers over governments.[16] The growth of the continent-wide banking networks “fed the growth of colonial empires” as it stimulated a system in which “creating debt that then had to be serviced by the purchase of more infrastructure,” and expansion of territory.[17] This led European nations to undertake a massive imperial effort across much of the globe, to find and control foreign markets and expand their capital.

The Emergence of Marxism

In the 19th century, the rise of critical IPE (International/Global Political Economy) theories emerged in opposition to the growing dominance of Liberal IPE. The most profound of these criticisms arose from Karl Marx. Marxism, as Marx’s critical theory came to be known, put an extensive focus on the relations of classes within society, as the class that owns the means of production is the central and most powerful class, subverting the other classes to a submissive position. Marxists also view capitalism as being inherently exploitative. Within this theory, the political and economic realms are not seen as separate spheres of action, but are seen as intertwined and internally related. Within this theory, the purpose of the state is not to serve the interests of the broader population that inhabits it, but to secure, maintain and advance the interests of the capitalist class. Marxist theorists also put emphasis on the nature of war and conflict as being intrinsically related to the expansionary nature of capitalism, which is one of the primary roles of states in advancing the interests of the capitalist ruling class.

Marx defines what he perceives as capitalism: a system which is governed by capital, which is money that has been invested in order to generate more money; production, which is dominant within capitalist society, is designed for sale, not use – in that, it moves beyond subsistence and into what we refer to today as materialism and consumption; labour is commodified, thus people, through their labour, themselves become a tradable commodity; exchange occurs with money; ownership of the means of production is in the hands of the capitalist class; and competition between various capitalist forces is the logic of interaction.

Marx places a large focus on the circuit of capital, in how money transforms into capital. Money (M), is invested in purchasing a Commodity (C), and then into Labour Power (LP) and the Mean of Production (MP), which make up the Production circuit (P), which produces a new Commodity (C1), which is then sold, creating expanding money (M1), or earned profits. Capital, thus, is money that is invested into production. Marx postulates that the inherent exploitative nature of capitalism is most apparent in the Production circuit, specifically with Labour Power.

Diverging From Marx

However, with the exploration and understanding of the central banking system, some of the circuit of capital must be called into question. Central banking functions not on “investment” of capital, but on the expansion and creation of money and debt, which is lent at interest, thus serving as the source of income for the central banking system. This cannot be called productive capital, for its purpose and intent is not to produce a new commodity, there is no labour power or means of production involved, and new money is not produced from the sale of such a new commodity, but rather profit is extracted from interest on the original money. This, for the sake of argument, can be called the Circuit of Debt:

M –> L –> I –> M1 –> LID –> DB

M = Money

L = Loan

I = Interest

M1 = New Money

LID = new money Loaned to debtor to pay Interest on Debt

DB = debtor falls into Debt Bondage; owned by creditor

Through the Marxist perspective of exploitation, there is no labour to exploit within the Circuit of Debt, so where does exploitation come into play? Exploitation comes into the process in that the debt (or loan) issued, is designed to exploit whoever the debtor is, be it an individual, a nation, or a corporation. Within this paradigm, class structure, although playing a significant part of the process of overall exploitation and exercise of power within the capitalist system is not the only, or arguably, even primary target of control and oppression within capitalism, as we know it. The target is the individual, the nation, and industry to the submission of the predatory nature of the central banking system.

The central banking system has, from its inception, acted in ways which monopolize industry (thus negating Adam Smith’s concept of a “free market” and “competition”); militarize nations (financing wars and conquest, imperialism); merging the interests of both the economic and political realms into a holistic ruling class (modeled upon the dual nature of a central bank itself – holding the authority and power of a government body, but representing the interests and submitting to the ownership of private individuals). Thus, the ruling class itself is a social construct which this tiny elite formed, hardly capable of the numbers to be termed a class, especially since class is most often defined in national terms, whereas this elite is international in nature.

The central bank of a nation finances monopoly industry and imperial states, both of which are created out of debt bondage to the central bank. Both the commercial/industrial elites and political elites merge their interests – the state will pursue imperial policies that have the effect of benefiting industry, while industry will support the building of a strong, powerful state (and provide a cozy job for the political elite upon leaving the public sector). This makes up the ruling class of a nation, the capitalists, or owners of the means of production, merging with the political rulers of the nation. One does not represent or overpower the other, but rather, both serve the interests and are owned through interest, by a tiny international elite.

One must ask: What would capitalism look like if it were not for the advent of the central banking system?

Accumulation by Dispossession

In discussing Marxist theory, I am not advocating a total support of its theoretical discussion and perspective. However, it is vital to address, as historically and presently, it has served as a very powerful source of criticism against the capitalist system and its importance cannot be underestimated. Having said that, it is also important to address in that it does, as a theory, identify many accurate and important aspects of how the capitalist system functions. For that reason, many of the critiques have been and are currently prescient and justified.

In Marxist theory, the nature of accumulation plays a very important part, in that it holds a dual character. One is known as accumulation as expanded reproduction, which is concerned with commodity markets and production (the circuit of capital), where money is made through the labour process. The other nature of accumulation is accumulation by dispossession, which is usually framed in terms of relations between capitalist and non-capitalist modes of production. This is accumulation derived from dispossessing someone of something. The Atlantic slave trade was an example of accumulation by dispossession, as Africans were dispossessed of their lives and freedom. Colonialism is another example, where resources are extracted, dispossessing the nation of its own resources.

Perhaps it would be helpful to expand upon Marx’s ideas of accumulation by dispossession in regards to the central banking system. Central banking, not falling into the circuit of capital, and thus, accumulation as expanded reproduction, better represents an example of accumulation by dispossession. Money is given in loans at interest, to which the debtor is never meant to fully repay, and is dispossessed of its freedom and wealth through interest payments and debt bondage. Debt is just another word for slavery, therefore, the central banking system itself, functions through a system of accumulation by dispossession.

However, conventional understanding of accumulation by dispossession describes it as an interaction between capitalist and non-capitalist modes of production, where the capitalist mode will dispossess the non-capitalist mode of production. Central banking, however, is the pinnacle of the capitalist system, and ultimately, the primary source and avenue of its power, so it can hardly be said to be an interaction between capitalist and non-capitalist modes, as it is an interaction between central banks and ALL modes of production which need money – including the entirety of the capitalist system. Thus, industry/commerce, governments/nations, and individuals/people, are dispossessed of their freedom through debt bondage. This cannot simply be predicated in terms of class warfare or class-centric theory, but rather, an assault against all individuals, individuality, and freedom, in any and all forms. It is within this context that class structures are created, so as to play off one against the other – to compartmentalize people into classes, and thus, better control and manipulate the masses. It is a strategy of dividing and conquering people. Class, including the upper capitalist class, is constructed in an effort to conform thought within each class, and thus direct collective action of that class accordingly. The freethinking individual is the target in all cases. Individuality is to be removed from commerce, government, and society as a whole.

The Communist Manifesto

In the Communist Manifesto, published in 1848, Marx proclaims in the opening subtitle that, “The history of all society hitherto is the history of class struggles.” However, if class itself is a construct of powerful individuals, albeit throughout human history, can it not be argued instead that the history of all society is the history of the struggle of the individual against collectivity and control? Class itself is a collective grouping designed to control a mass of people, whether it is upper class or lower class. Individuals are stifled within all classes, and thus, the history of class struggles itself, is a history of the struggle between the free thinking individual and the collective form of control.

Within the Communist Manifesto, Marx (and Engels) outlined an initial program for an “advanced” nation to undertake in order to create a Communist system, with ten major points. (1) Abolition of property in land and application of all rents of land to public purposes; (2) A heavy progressive or graduated income tax; (3) Abolition of all right of inheritance; (4) Confiscation of the property of all emigrants and rebels; (5) Centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly; (6) Centralization of the means of communication and transport in the hands of the state; (7) Extension of factories and instruments of production owned by the state – the bringing into cultivation of waste lands, and the improvement of the soil generally in accordance with a common plan; (8) Equal liability of all to labour – Establishment of industrial armies, especially for agriculture; (9) Combination of agriculture with manufacturing industries – gradual abolition of the distinction between town and country by a more equable distribution of the population over the country; and (10) Free education for all children in public schools – Abolition of children’s factory labour in its present form [and] Combination of education with industrial production.[18]

Of particular importance is number 5, in which a central bank is advocated. If nations have the ability to create and issue a currency through a Treasury department or even on a more regional or local level, why centralize and monopolize creation of a currency to a central bank? It should be noted that the recommendation was to have it centralized “in the hands of the state,” however, central banks are today, still widely perceived as being within the purview of governmental authority, while acting and functioning totally outside of it and above it. Imposing a tax on one’s income (2), also seems to promote the commodification of labour, in that instead of industry exploiting one’s labour and extracting a profit from it, that becomes the job of the state. All property would be owned by the state (1), and virtually the entire economy is subject to the control of the state. Even education, while free, is directed by the state. With the “Confiscation of the property of all emigrants and rebels,” what room is there for dissenting thought in such a society? Dissent would not be encouraged within the “free education” system. In fact, conformity would be enshrined. Is this not a form of “accumulation by dispossession” in which the individual is dispossessed of free thought and action and submitted to the will of and restricted thinking allowed by the state? Within this paradigm the state accumulates power and authority by dispossessing people of individuality in thought and expression.

The Communist Manifesto ends with the declaration of, “Workers of all countries, Unite!” This, in and of itself, promotes class divisions within society, placing focus on the need for an international mobilization of the global working class to rise up against the capitalist class. Marx outlines that any successful workers’ revolution must be international.[19] Thus, this promotes the cosmopolitical notion of an international community, at least in initial terms of a transnational class system. Essentially, Marx argues that as capitalism expands, what we will later term “Globalizes,” so too must the working class of the world “globalize” and “internationalize.” In a sense, this makes Marx, himself, an early globalist theorist, in promoting the concept of an international class uprising against the capitalist class. Ultimately, would this not simply replace the tyranny of one class for the tyranny of another? Throw out the capitalists and bring in the communists! Substituting one form of oppression for another is hardly a change in the right direction. In both systems, the individual suffers and free thought is stifled.

Though much Marxist criticism is extremely pointed in analyzing the functions and structure of the capitalist system, such theory itself, even though critical, must be critically examined.

Retaking America

The history of the United States from its founding through the 19th century to the early 20th century, was marked by a continual political battle revolving around the creation of a central bank of the United States. Mercantilists such as Alexander Hamilton, who was the first Treasury Secretary, were in favour of such a bank, and his advice won over George Washington, much to the dismay of Thomas Jefferson, who was a strong opponent to central banking. However, “[Alexander] Hamilton, believing that government must ally itself with the richest elements of society to make itself strong, proposed to Congress a series of laws, which it enacted, expressing this philosophy,” and that, “A Bank of the United States was set up as a partnership between the government and certain banking interests,”[20] which lasted until the charter expired in 1811.

Again, during the tenure of Andrew Jackson (1829-1837), the primary political struggle was with the entrenched financial interests both domestic and from abroad (namely Western Europe), on the issue of creating a central bank of the US. Andrew Jackson stood in firm opposition to such a bank, saying that, “the bank threatened the emerging order, hoarding too much economic power in too few hands,” and referred to it as “The Monster.”[21] Congress passed the bill allowing for the creation of a Second Bank of the United States, however, Andrew Jackson vetoed the bill, much to the dismay of the banking interests.

It was in the later half of the 1800s that “European financiers were in favor of an American Civil War that would return the United States to its colonial status, they admitted privately that they were not necessarily interested in preserving slavery,” as it had become unprofitable.[22] The Civil War was not based upon the liberation of slaves, it was, as Howard Zinn described it, a clash “of elites,” with the northern elite wanting “economic expansion – free land, free labor, a free market, a high protective tariff for manufacturers, [and] a bank of the United States. [Whereas] The slave interests opposed all that.”[23] The Civil War, which lasted from 1861 until 1865, resulted in hundreds of thousands of deaths, during which, “Congress also set up a national bank, putting the government into partnership with the banking interests, guaranteeing their profits.”[24]

As Lincoln himself stated:

The money powers prey on the nation in times of peace and conspire against it in times of adversity. The banking powers are more despotic than monarchy, more insolent than autocracy, more selfish than bureaucracy. They denounce as public enemies all who question their methods or throw light upon their crimes.

I have two great enemies, the Southern Army in front of me, and the bankers in the rear. Of the two, the one at my rear is my greatest foe. As a most undesirable consequence of the war, corporations have been enthroned, and an era of corruption in high places will follow. The money power will endeavor to prolong its reign by working upon the prejudices of the people until the wealth is aggregated in the hands of a few, and the Republic is destroyed.[25]

Throughout much of the 1800s and into the 1900s, the United States suffered several economic crises, one of the most significant of which was the Great Depression of 1873. As Howard Zinn explained:

The crisis was built into a system which was chaotic in its nature, in which only the very rich were secure. It was a system of periodic crises – 1837, 1857, 1873 (and later: 1893, 1907, 1919, 1929) – that wiped out small businesses and brought cold, hunger, and death to working people while the fortunes of the Astors, Vanderbilts, Rockefellers, Morgans, kept growing through war and peace, crisis and recovery. During the 1873 crisis, Carnegie was capturing the steel market, Rockefeller was wiping out his competitors in oil.[26]

Massive industrial consolidation by a few oligarchic elites was the rule of the day, as J.P. Morgan expanded total control over railroad and banking interests, and John D. Rockefeller took control of the oil market, and expanded into banking. Zinn explained that, “The imperial leader of the new oligarchy was the House of Morgan. In its operations it was ably assisted by the First National Bank of New York (directed by George F. Baker) and the National City Bank of New York (presided over by James Stillman, agent of the Rockefeller interests). Among them, these three men and their financial associates occupied 341 directorships in 112 corporations. The total resources of these corporations in 1912 was $22,245,000,000, more than the assessed value of all property in the twenty-two states and territories west of the Mississippi River.”[27]

These banking interests, particularly those of Morgan, were very much allied with European banking interests. On the European side, specifically in Britain, the elite were largely involved in the Scramble for Africa at this time. Infamous among them was Cecil Rhodes, who made his fortune in the diamond and gold mining in Africa, as “With financial support from Lord Rothschild and Alfred Beit, he was able to monopolize the diamond mines of South Africa as De Beers Consolidated Mines and to build up a great gold mining enterprise as Consolidated Gold Fields.”[28] Interestingly, “Rhodes could not have won his near-monopoly over South African diamond production without the assistance of his friends in the City of London: in particular, the Rothschild bank, at that time the biggest concentration of financial capital in the world.”[29] As historian Niall Ferguson explained, “It is usually assumed that Rhodes owned De Beers, but this was not the case. Nathaniel de Rothschild was a bigger shareholder than Rhodes himself; indeed, by 1899 the Rothschilds’ stake was twice that of Rhodes.”[30]

Cecil Rhodes was also known for his radical views regarding America, particularly in that he would “talk with total seriousness of ‘the ultimate recovery of the United States of America as an integral part of the British Empire’.”[31] Rhodes saw himself not simply as a money maker, but primarily as an “empire builder.” As historian Carroll Quigley explained, in 1891, three British elites met with the intent to create a secret society. The three men were Cecil Rhodes, William T. Stead, a prominent journalist of the day, and Reginald Baliol Brett, a “friend and confidant of Queen Victoria, and later to be the most influential adviser of King Edward VII and King George V.” Within this secret society, “real power was to be exercised by the leader, and a ‘Junta of Three.’ The leader was to be Rhodes, and the Junta was to be Stead, Brett, and Alfred Milner.”[32]

In 1901, Rhodes chose Milner as his successor within the society, of which the purpose was, “The extension of British rule throughout the world, the perfecting of a system of emigration from the United Kingdom and of colonization by British subjects of all lands wherein the means of livelihood are attainable by energy, labour, and enterprise . . . [with] the ultimate recovery of the United States of America as an integral part of a British Empire, the consolidation of the whole Empire, the inauguration of a system of Colonial Representation in the Imperial Parliament which may tend to weld together the disjointed members of the Empire, and finally the foundation of so great a power as to hereafter render wars impossible and promote the best interests of humanity.”[33] Essentially, it outlined a British-led cosmopolitical world order, one global system of governance under British hegemony. Among key players within this group were the Rothschilds and other banking interests.[34]

In the early 20th century, European and American banking interests achieved what they had desired for over a century within America, the creation of a privately owned central bank. It was created through collaboration of American and European bankers, primarily the Morgans, Rockefellers, Kuhn, Loebs and Warburgs.[35] After the 1907 banking panic in the US, instigated by JP Morgan, pressure was placed upon the American political establishment to create a “stable” banking system. In 1910, a secret meeting of financiers was held on Jekyll Island, where they planned for the “creation of a National Reserve Association with fifteen major regions, controlled by a board of commercial bankers but empowered by the federal government to act like a central bank – creating money and lending reserves to private banks.”[36] President Woodrow Wilson followed the plan almost exactly as outlined by the Wall Street financiers, and added to it the creation of a Federal Reserve Board in Washington, which the President would appoint.[37] The Federal Reserve, or Fed, “raised its own revenue, drafted its own operating budget and submitted neither to Congress,” while “the seven governors shared power with the presidents of the twelve Reserve Banks, each serving the private banks in its region,” and “the commercial banks held stock shares in each of the twelve Federal Reserve Banks.”[38]

The retaking of the United States by international banking interests was achieved with barely a whimper of opposition. Where the British Empire failed in taking the United States militarily, international bankers succeeded covertly through the banking system. The Federal Reserve also had the effect of cementing an alliance between New York and London bankers.[39]

Notes

[1] George T. Crane, Abla Amawi, The Theoretical evolution of international political economy. Oxford University Press US, 1997: pages 48-49

[2] George T. Crane, Abla Amawi, The Theoretical evolution of international political economy. Oxford University Press US, 1997: pages 50-51

[3] John Kenneth Galbraith, Money: Whence it Came, Where it Went (Boston: Houghton Mifflin Company, 1975), 31

[4] Donald Kagan, et. al., The Western Heritage. Volume C: Since 1789: Ninth edition: (Pearson Prentice Hall: 2007), 596

[5] Curtis B. Dall, F.D.R. : My Exploited Father-in-Law. (Institute for Historical Review: 1982), 172

[6] Carroll Quigley, Tragedy and Hope: A History of the World in Our Time (New York: Macmillan Company, 1966), 515

Robert Elgie and Helen Thompson, ed., The Politics of Central Banks (New York: Routledge, 1998), 97-98

[7] Carroll Quigley, Tragedy and Hope: A History of the World in Our Time (New York: Macmillan Company, 1966), 516

[8] Robert Elgie and Helen Thompson, ed., The Politics of Central Banks (New York: Routledge, 1998), 98-99

[9] Carroll Quigley, Tragedy and Hope: A History of the World in Our Time (New York: Macmillan Company, 1966), 516

[10] Sylvia Nasar, Masters of the Universe. The New York Times: January 23, 2000: http://query.nytimes.com/gst/fullpage.html?res=9C04E3D6123AF930A15752C0A9669C8B63

BBC News. The Family That Bankrolled Europe. BBC News: July 9, 1999

http://news.bbc.co.uk/1/hi/uk/389053.stm

[11] New Scientist. Waterloo Windfall. New Scientist Magazine: Issue 2091, July 19, 1997

http://www.newscientist.com/article/mg15520913.300-waterloo-windfall.html

BBC News. The Making of a Dynasty: The Rothschilds. BBC News: January 28, 1998

http://news.bbc.co.uk/2/hi/uk_news/50997.stm

[12] Carroll Quigley, Tragedy and Hope: A History of the World in Our Time (New York: Macmillan Company, 1966), 51

[13] Adam Smith, The Wealth of Nations. U. of Chicago Edition, 1976: Vol. IV, ch. 2: 477

[14] Adam Smith, An inquiry into the nature and causes of the wealth of nations. Regnery Gateway, 1998: page 152

[15] Adam Smith, An inquiry into the nature and causes of the wealth of nations. Regnery Gateway, 1998: pages 166-167

[16] Patricia Goldstone, Aaronsohn’s Maps: The Untold Story of the Man who Might Have Created Peace in the Middle East. (Harcourt Trade, 2007), 29-30

[17] Patricia Goldstone, Aaronsohn’s Maps: The Untold Story of the Man who Might Have Created Peace in the Middle East. (Harcourt Trade, 2007), 31

[18] Karl Marx, Friedrich Engels, Philip Gasper (ed.), The Communist manifesto: a road map to history’s most important political document. Haymarket Books, 2005: pages 70-71

[19] Karl Marx, Friedrich Engels, Philip Gasper (ed.), The Communist manifesto: a road map to history’s most important political document. Haymarket Books, 2005: page 67

[20] Howard Zinn, A People’s History of the United States. Harper Perennial: New York, 2003: page 101

[21] Michael Waldman, My Fellow Americans: The Most Important Speeches of America’s Presidents, from George Washington to George W. Bush. Longman Publishing Group: 2004: page 25

[22] Dr. Ellen Brown, Today We’re All Irish: Debt Serfdom Comes to America. Global Research: March 15, 2008: http://www.globalresearch.ca/index.php?context=viewArticle&code=BRO20080315&articleId=8349

[23] Howard Zinn, A People’s History of the United States. Harper Perennial: New York, 2003: page 189

[24] Howard Zinn, A People’s History of the United States. Harper Perennial: New York, 2003: page 238

[25] Steve Bachman, Unheralded Warnings from the Founding Fathers to You. Gather: June 19, 2007: http://www.gather.com/viewArticle.jsp?articleId=281474977031677

[26] Howard Zinn, A People’s History of the United States. Harper Perennial: New York, 2003: page 242

[27] Howard Zinn, A People’s History of the United States. Harper Perennial: New York, 2003: page 323

[28] Carroll Quigley, Tragedy and Hope: A History of the World in Our Time (New York: The Macmillan Company, 1966), 130

[29] Niall Ferguson, Empire: The Rise and Demise of the British World Order and the Lessons for Global Power (New York: Basic Books, 2004), 186

[30] Niall Ferguson, Empire: The Rise and Demise of the British World Order and the Lessons for Global Power (New York: Basic Books, 2004), 186-187

[31] Niall Ferguson, Empire: The Rise and Demise of the British World Order and the Lessons for Global Power (New York: Basic Books, 2004), 190

[32] Carroll Quigley, The Anglo-American Establishment. GSG & Associates, 1981: page 3

[33] Carroll Quigley, The Anglo-American Establishment. GSG & Associates, 1981: page 33

[34] Carroll Quigley, The Anglo-American Establishment. GSG & Associates, 1981: page 34

[35] Murray N. Rothbard, Wall Street, Banks, and American Foreign Policy. World Market Perspective: 1984: http://www.lewrockwell.com/rothbard/rothbard66.html

[36] William Greider, Secrets of the Temple: How the Federal Reserve Runs the Country. (New York: Simon and Schuster, 1987), 276

[37] William Greider, Secrets of the Temple: How the Federal Reserve Runs the Country. (New York: Simon and Schuster, 1987), 277

[38] William Greider, Secrets of the Temple: How the Federal Reserve Runs the Country. (New York: Simon and Schuster, 1987), 50

[39] William Engdahl, A Century of War: Anglo-American Oil Politics and the New World Order. (London: Pluto Press, 2004), 51

Andrew Gavin Marshall is a Research Associate with the Centre for Research on Globalization (CRG). He is currently studying Political Economy and History at Simon Fraser University.

Andrew Gavin Marshall is a frequent contributor to Global Research. Global Research Articles by Andrew Gavin Marshall