The Militarization of the World
By ISMAEL HOSSEIN-ZADEH | CounterPunch | November 12, 2010
A bully or a mafia godfather would never run out of excuses to punish an insubordinate soul in “his territory.” Accordingly, U.S. imperialism has been very creative in invoking all kinds of excuses to punish Iran for its aspirations to national self-determination.
To justify the criminal economic sanctions against the Iranian people, the U.S. has for years insisted that Iran is supporting terrorism, threatening U.S. national interests, and pursuing a program of nuclear weapons manufacturing. As these harebrained allegations are increasingly losing credibility, the United States is now invoking a new ploy to justify its decision to further tighten the sanctions on Iran: “military dictatorship” and “human rights abuses,” as Secretary of State Hillary Clinton has occasionally grumbled about in recent months.
There are a number of obvious problems with this latest U.S. excuse for escalating sanctions against Iran. To begin with, it is a blatant interference in the internal affairs of Iran.
Second, considering the fact that the U.S. has armed its “allies” in the Middle East (and beyond) to the teeth, its condemnation of the rise of Iran’s military power is clearly hypocritical. According to the Stockholm International Peace Research Institute (SIPRI), cited in Wikipedia, while Iran’s military spending in 2009 was $9.174 billion (or 2.7% of its GDP), that of Saudi Arabia was $39.257 billion (8.2% of its GDP), that of Israel was $14.34 billion (7% of its GDP), and that of the United Arab Emirates was $13.5 billion (or 5.9% of its GDP).
Third, in light of the fact that the U.S. is the most militarized country in the world, it’s belly-aching about “militarization of Iran” (whose military spending is less than one percent of the U.S.) is patently ironic; it is a case of the pot calling the kettle black. Again, while Iran’s military spending in 2009 was $9.174 billion, that of the U.S. was $663.255 billion. However, the official $663.255 billion includes neither the Homeland Security budget, nor the costs of the Iraq and Afghanistan wars, nor a number of supplemental expenditures added to military spending during the fiscal year. Once these omitted (or hidden) expenditures are added to the official Pentagon budget, total U.S. military-security expenditures would easily amount to $1000 billion, or one trillion dollars. Even in relative terms, Iran’s military spending is infinitesimally small compared to that of the United States. For example, while Iran’s per capita military spending is $131 (9,174,000,000 : 70,000,000), that of the U.S. is $3333 (1,000,000,000,000 : 300,000,000). And whereas Iran’s military spending as a share of its GDP is 2.7% (9.174 billion : 340 billion), that of the United States is nearly 7% (1 trillion : 14 trillion) [Ibid.].
Fourth, in light of the fact that the U.S. is altogether silent in the face of heinous human rights violations under the rule of the regimes it calls “allies,” its alleged concern for “human rights abuses” in Iran is hypocritical and utilitarian: it uses the lofty ideal of defending human rights to disguise its nefarious intentions to impose economic sanctions or to embark on military aggression against that country. Hypocritical defense of human rights is often used to justify wars of aggression as humanitarian operations, or “just wars,” as they were called in times past. Just as this ruse was used in 1999 to wreak carnage on Yugoslavia, so it is now used to pave grounds for committing similarly heinous crimes against Iran.
Regrettably, many left/liberal/antiwar individuals and organizations often fall for this hoax, thereby endorsing (or remaining silent in the face of) U.S. wars of aggression on ethical grounds, that is, on grounds of fighting dictatorship or terrorism in the hope of achieving liberation and democracy. Of course, to make the ruse credible, champions of war and militarism usually start with demonization and distortion, and then proceed to aggression and invasion.
It must also be pointed out that the purported U.S. support for human rights tends to be narrowly focused on purely cultural issues such as life style and identity politics, that is, the politics of race, gender and sexual orientation. As such, it is largely devoid of basic economic needs for survival. Even a cursory comparison with the Universal Declaration of Human Rights and Freedoms (UDHRF), adopted on 10 December 1948 by the General Assembly of the United Nations, reveals some fundamental shortcomings of the U.S. human rights protocol. Human rights according to UDHRF include basic economic or survival needs such as:
“the right to work … to protection against unemployment … to just and favorable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection. . . . Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, and housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control. . . . Motherhood and childhood are entitled to special care and assistance. All children, whether born in or out of wedlock, shall enjoy the same social protection. . . . Everyone has the right to education.”
Human rights a la USA does not include any of these basic human needs—all the nauseating propaganda of championing human rights notwithstanding. Indeed, many of the basic economic rights, which came to be known as the New Deal reforms, and which were achieved through long and heroic struggles of the working people and other grassroots efforts, are now systematically undermined in order to pay for the gambling losses of the Wall Street financial giants.
Finally, and perhaps most importantly, to the extent that there has been an undeniable rise in the power of armed forces in Iran, as well as a corresponding curtailment of civil liberties there, such unfortunate developments have evolved as a direct consequence of the constant threats posed by U.S. imperialism and its allies. Iran’s strengthening of its armed forces has become a virtual necessity in self-defense against threats of war, destabilization, sabotage, sanctions and other kinds of covert and overt operations engineered by the imperialist-Zionist forces.
By dividing the world into “allies” and “enemies,” the powerful war profiteering interests in the Unites States, the military-industrial-security colossus, compel both “allies” and “enemies” to militarize. While “enemies” such as Iran, Venezuela, and North Korea are forced to strengthen their defense capabilities against imperialistic aggressions, “allies” such as the regimes ruling Egypt, Saudi Arabia and Colombia are driven to militarization against their own people, since regimes loved by U.S. imperialism are hated by the overwhelming majority of their own citizens.
Critics tend to bemoan the rise in the power of the Islamic Revolutionary Guards Corps (IRGC) in Iran without bothering to explain how the IRGC came to existence, or why it has expanded to where it is today. Who is to be blamed for the ascendancy of its influence in the Iranian politics and economics?
Those even faintly familiar with the history of the IRGC would recall that it came into existence as a resistance force against counter-revolutionary forces in Iran, which have always been supported by U.S. imperialism and its allies. Although it was formed in the spring of 1979 as a small paramilitary revolutionary force in the fight against the Shah’s rule, it remained for the U.S.-instigated invasion of Iran by Saddam Hussein to expand it to a fully-fledged military power in defense of Iran’s territorial integrity. The ensuing brutal 8-year Iran-Iraq war (1980-88), in which the U.S. and its allies wholeheartedly supported Saddam Hussein, and the Guards’ legendary sacrifices and heroic defense of Iran’s independence drastically enhanced their size, their prestige and their power.
Although Iraq’s war with Iran ended in 1988, other forms of U.S. wars against Iran have continued to this day. These have included destabilizing “soft-power” operations in the name of democracy, covert operations through all kinds of NGOs and fifth-column groupings, promotion of and support for terrorist operations such as those carried out by Jundullah and Mojadeen Khalgh (MKO, or MEK), constant military threats, psychological warfare, and economic sanctions. Not surprisingly, the role and the influence of IRGC and other security forces in Iran have increased accordingly. Also unsurprisingly, as the political power of Iran’s armed forces has thus increased, so has their economic power.
I say “unsurprisingly” because it is altogether in the nature of things that large standing armies gradually extend their military-security power to the realm of economics. The fully-fledged and the best example of this phenomenon is the rise of the monstrous military-industrial complex in the United States—which, contrary to the defensive nature of Iran’s military force, represents an offensive imperialistic force.
It is of course a truism that maintaining large standing armies will sooner or later lead to authoritarianism. It is equally obvious that by the same token that militarization of the world can be blamed largely on imperialistic U. S. foreign policies, so can the rise of many authoritarian regimes around the world be attributed to those oppressive policies.
When a country (whose only sin is its aspiration to national self-determination) is labeled by U.S. imperialism as “our enemy” and is, therefore, encircled and threatened by the U.S. military monster, that country’s political, economic and democratic growth is bound to be distorted or derailed from a path of a healthy, natural or spontaneous evolution. Finding themselves in the bull’s eye of the menacing U.S. war juggernaut, security forces of such beleaguered countries are bound to react nervously/harshly in the face of protest demonstrations of domestic opposition, even when such demonstrations are for legitimate reasons. The shameful history of covert U.S. operations abroad, including the violent overthrow of many democratically elected leaders through military coup d’états, shows that expressions of indigenous opposition or grievances in such “enemy” countries are often subverted by well-financed and well-armed U.S. agents, either penetrated from outside or recruited from within, thereby warping the development of a “healthy” political/democratic process in those countries.
What is utterly demagogical is that, having thus perverted the politico-democratic process in such countries, the U.S. propaganda machine then turns around and blames the religion or culture or leaders of those countries as inherently incompatible with democratic values. Regrettably, not only do most of the American people but also many people elsewhere, including in the countries targeted for destabilization, fall for this ruse—in effect, blaming the victim for the crimes of the perpetrator.
Viewed in this light, the rise in the influence of the military-security forces in the Iranian politics and economics is a direct result of the menacing imperial policies of the United States and its allies toward that country.
Thus, President Obama’s or Secretary Clinton’s or other U.S. policy makers’ bellyaching about the rise of the power of the armed forces in Iran represents a case of gross obfuscation, that is, a case of barking up the wrong tree: instead of blaming IRGC they should blame their own imperialistic foreign policies, which nurtures militarization and curtailment of civil liberties not only in Iran but also in many other parts of the world. Indeed, militarization of the world and the resulting proliferation of many (relatively smaller) military-industrial complexes around the globe are unmistakable byproducts of the monstrous U.S. military-industrial complex. The inherent dynamics of this monster as an existentially-driven war juggernaut compels other countries around the world (both “allies” and “enemies”) to embark on paths to militarism and authoritarianism.
Ismael Hossein-Zadeh, author of The Political Economy of U.S. Militarism (Palgrave-Macmillan 2007), teaches economics at Drake University, Des Moines, Iowa.
Obama’s Electric Vehicle Fetish
Cars for the Elite
By ROBERT BRYCE | November 11, 2010
Imagine an American president who, during a press conference, extols the importance of cars made by Mercedes Benz or BMW. The reaction, particularly on Fox News, is easily envisioned: outraged cries of “elitist” and “out of touch” would persist for days or even months afterward.
That, in essence, is exactly what President Barack Obama did last Wednesday. Obama acknowledged the thumping that the Democrats took at the polls on November 2, and went on to discuss the need for more all-electric vehicles, at one point saying “There’s a lot of agreement around the need to make sure that electric cars are developed here in the United States.”
Fine. Both Mercedes and BMW manufacture cars in the U.S. But here are two essential points: Those two automakers each control about the same percentage of the domestic car market that automotive analysts believe electric cars will have by 2020. Second, and perhaps more important: the same people who buy Benzes and Beemers – the wealthy – are the ones most likely to buy a new electric car.
Obama’s electric vehicle fetish reflects much of the inanity of our discussions about energy. The idea that oil is bad, and that we must therefore throw vast sums of money at efforts aimed at fueling our automotive fleet with something else – anything else – ignores both economic realities and the myriad problems inherent with EVs.
First, the economic realities. Earlier this year, Deloitte Consulting released a report on EVs which found that the most likely buyers are people with household incomes “in excess of $200,000” and “who already own one or more vehicles.” Furthermore, Deloitte expects those buyers to be “concentrated around southern California where weather and infrastructure allow for ease of EV ownership.”
Deloitte concluded that the US now has about 1.3 million consumers who “fit the demographic and psychographic profiles” of expected EV buyers. It went on, saying that mass adoption of the EV “will be gradual” and that by 2020, perhaps 3 percent of the US car market could be amenable to EVs. The report also says that the keys to “mass adoption are 1) a reduction in price; and 2) a driving experience in which the EV is equivalent to the internal combustion engine.”
Think about those numbers. Out of 300 million Americans, perhaps 1.3 million of them – with many of those living in areas in or around Los Angeles and San Diego — are likely to buy an EV.
Deloitte’s projections are exactly the same as those recently put forward by Johnson Controls Inc., a company that makes batteries for cars and is building two new plants in order to supply the EV market. Last month, the Wall Street Journal reported that Johnson Controls’ research “found that the pool of US customers for whom an electric car makes financial sense – those who travel many miles a year, but on short trips – is very small, about three percent of drivers.”
Hmmm. Three percent of drivers? In both 2009 and 2010, Mercedes and BMW each controlled about 2 percent of the US auto market.
Why will EVs be playthings for the rich? The answer is simple: the history of the EV is a century of failure tailgating failure. Consider this quote: In 1911, the New York Times declared that the electric car “has long been recognized as the ideal solution” because it “is cleaner and quieter” and “much more economical” that gasoline-fueled cars.
Whenever you hear about the wonders of the new hybrid-electric Chevrolet Volt, which at $41,000 per copy costs as much as a new Mercedes-Benz C350, consider this assessment by a believing reporter: “Prices on electric cars will continue to drop until they are within reach of the average family.” That line appeared in the Washington Post on Halloween, 1915.
And since the Volt is being built by GM, ponder this news item which declared that the carmaker has found “a breakthrough in batteries” that “now makes electric cars commercially practical.” The batteries will provide the “100-mile range that General Motors executives believe is necessary to successfully sell electric vehicles to the public.” That story was published in the Washington Post on September 26, 1979.
The problem today is the same as it was in 1911, 1915, and 1979: the paltry energy density of batteries. On a gravimetric basis, gasoline has 80 times the energy density of the best lithium-ion batteries. Of course, electric-car supporters will immediately retort that electric motors are about four times more efficient than internal combustion engines. But even with that four-fold advantage in efficiency, gasoline will still have 20 times the energy density of batteries. And that is an essential advantage when it comes to automobiles, where weight, storage space, and of course, range, are critical considerations.
Despite the all-electric automobile’s long history of failure, despite the fact that EVs will likely only be driveway jewelry for the wealthy, the Obama administration is providing more than $20 billion in subsidies and tax breaks for the development and production of cars that use electricity instead of oil.
Indeed, the administration keeps throwing money at EVs despite a January 2009 report published by the Department of Energy’s Office of Vehicle Technologies, which said that despite the enormous investments being made in plug-in hybrid-electric vehicles and lithium-ion batteries, four key barriers stand in the way of their commercialization: cost, performance, abuse tolerance, and life. The key problem, according the DOE analysts, was—predictably—the battery system. The report concludes that lithium-based batteries, which it calls “the most promising chemistry,” are three to five times too expensive, are lacking in energy density, and are “not intrinsically tolerant to abusive conditions.”
Remember when Barack Obama, the presidential candidate, berated the Bush administration for not paying attention to the science? In December 2008, shortly after being elected to the White House, he declared, “It’s time we once again put science at the top of our agenda and worked to restore America’s place as the world leader in science and technology.”
Restoring America’s leadership in science and technology is a worthy goal. But by attempting to pick winners in the car business — arguably the world’s single most competitive industry — the Obama administration is forgetting history and the panoply of problems that have kept EVs in the garage since the days of Thomas Edison. It’s time to unplug this subsidy-dependent industry and let the free market work.
Billionaire Launches Campaign to Slash Social Security
By Jane Slaughter – Labor Notes – 11/09/2010
Why does a billionaire want to take away your Social Security benefits?
Peter Peterson is 84 years old. He’s old enough to relax and enjoy the fruits of the years he was well paid for managing other rich people’s money. Why is he spending his fortune to convince politicians they should ruin the average guy’s retirement?
Today Peterson announced the next facet in his long campaign to hack Social Security, including a joke Presidential candidate named Hugh Jidette (“huge debt”) and a website called Owe No. His aim is to convince Congress to raise the retirement age, cut Social Security’s cost-of-living increases—and raise the payroll taxes we pay for Social Security and Medicare.
It wouldn’t matter what one cranky octogenarian billionaire had to say if he weren’t putting $6 million into ads, funding “expert” commissions, and spreading lies designed to panic the populace.
Maybe Peterson figures offense is better than defense—he’s got a lot to defend. He made his fortune as a hedge fund manager—that is, moving money around—so he ought to be living in fear. Someone might get the idea he and his buddies would be good folks to tax. It’s like Willie Sutton, the famous bank robber, once said. Asked why he robbed banks, Sutton replied, “Because that’s where the money is.”
Peterson and pals are the ones George Bush gifted with big tax breaks that are set to expire December 31. Although he says his top priority is reducing the deficit, Peterson doesn’t want to cut that deficit by putting his own taxes back where they were in the 1990s.
It’s hard to get your head around how rich Peterson is, and how many rich people there are in this country. But here’s how to put their money in perspective, in relation to Social Security. If Congress decides to extend those tax cuts, for households making $250,000 or more (the top 2 percent of earners), the money the Treasury will lose would be enough to put Social Security in the black for 75 years–and raise benefits by 2 percent.
First They Took Your House
Meanwhile, we have a big chunk of near-retirees today who have barely seen their wages rise at all during their working lifetimes, the last 30 years. They couldn’t save a huge amount; what they saved they had in home equity. And that was wiped away by the financial shenanigans of Peter Peterson and his ilk. There are millions of potential retirees who will have next to nothing except Social Security if they’re ever able to retire. It wasn’t enough for Wall Street to rob us of our houses’ worth and what we had in 401(k)s. Now they want to take Social Security too.
Like I said, I don’t understand it. Is there no shuffleboard court where this man could spend his golden years?
A friend wrote to me today. He’s working his butt off to keep Congress from raising the retirement age and cut back Medicare. He said:
My mother was an LPN in a nursing home. The last few years that she worked, her back and legs ached so much that she literally had to crawl up the stairs to her bedroom at night. If someone told her that she would have to work three more years before retirement because hedge fund managers don’t want to pay the same percentage of their income towards Social Security as she did, she would tell you what to do.
A slew of organizations is organizing a Call-In Day to Congress November 30. That’s the day before President Obama’s deficit commission is set to release its recommendations for raising the retirement age. They’re saying “Owe No You Don’t”—the goal is to create a groundswell of outrage that will make the recommendations dead on arrival. Find out more at strengthensocialsecurity.org and see Labor Notes’ package of fact sheets and info.
Wall Street gorges on record bonuses
Wall Street bonus payouts will be $144 billion for 2010 – NYT
This amount is equal to the U.S. stimulus package approved by Congress in 2008.
Phantom Jobs
By PAUL CRAIG ROBERTS | CounterPunch | November 8, 2010
If we cannot trust what the government tells us about weapons of mass destruction, terrorist events, and the reasons for its wars and bailouts, can we trust the government’s statement last Friday that the US economy gained 151,000 payroll jobs during October?
Apparently not. After examining the government’s report, statistician John Williams (shadowstats.com) reported that the jobs were “phantom jobs” created by “concurrent seasonal factor adjustments.” In other words, the 151,000 jobs cannot be found in the unadjusted underlying data. The jobs were the product of seasonal adjustments concocted by the BLS.
As usual, the financial press did no investigation and simply reported the number handed to the media by the government.
The relevant information, the information that you need to know, is that the level of payroll employment today is below the level of 10 years ago. A smaller number of Americans are employed right now than were employed a decade ago.
Think about what that means. We have had a decade of work force growth from youngsters reaching working age and from immigration, legal and illegal, but there are fewer jobs available to accommodate a decade of work force entrants than before the decade began.
During two years from December 2007 – December 2009, the US economy lost 8,363,000 jobs, according to the payroll jobs data. As of October 2010, payroll jobs purportedly have increased by 874,000, an insufficient amount to keep up with labor force growth. However, John Williams reports that 874,000 is an overestimate of jobs as a result of the faulty “birth-death model,” which overestimates new business start-ups during recessions and underestimates business failures. Williams says that the next benchmark revision due out next February will show a reduction in current employment by almost 600,000 jobs. This assumes, of course, that the BLS does not gimmick the benchmark revision. If Williams is correct, it is more evidence that the hyped recovery is non-existent.
Discounting the war production shutdown at the end of World War II, which was not a recession in the usual sense, Williams reports that “the current annual decline [in employment] remains the worst since the Great Depression, and should deepen further.”
In short, there is no employment data, and none in the works, unless gimmicked, that supports the recovery myth. The US rate of unemployment, if measured according to the methodology used in 1980, is 22.5%. Even the government’s broader measure of unemployment stands at 17%. The 9.6% reported rate is a concocted measure that does not include discouraged workers who have been unable to find a job after 6 months and workers who who want full time jobs but can only find part-time work.
Another fact that is seldom, if ever, reported, is that the payroll jobs data reports the number of jobs, not the number of people with jobs. Some people hold two jobs; thus, the payroll report does not give the number of employed people.
The BLS household survey measures the number of people with jobs. The same October that reported 151,000 new payroll jobs reported, according to the household survey, a loss of 330,000 jobs.
The American working class has been destroyed. The American middle class is in its final stages of destruction. Soon the bottom rungs of the rich themselves will be destroyed.
The entire way through this process the government will lie and the media will lie.
The United States of America has become the country of the Big Lie. Those who facilitate government and corporate lies are well rewarded, but anyone who tells any truth or expresses an impermissible opinion is excoriated and driven away.
But we “have freedom and democracy.” We are the virtuous, indispensable nation, the salt of the earth, the light unto the world.
Paul Craig Roberts was an editor of the Wall Street Journal and an Assistant Secretary of the U.S. Treasury. His latest book, HOW THE ECONOMY WAS LOST, has just been published by CounterPunch/AK Press. He can be reached at: PaulCraigRoberts@yahoo.com
Venezuelan Foreign Minister strikes up strategic alliance with Turkey
By Patrick J. O’Donoghue | VHeadline | November 5, 2010
During a visit to Turkey, Venezuelan Foreign Minister Nicolas Maduro has signed an important energy agreement with his Turkish counterpart, Ahmet Davutoglu.
The visit is seen as part of the Venezuelan government’s campaign to open up relations with what it considers key countries as part of its pluri-polar foreign policy.
Maduro stated that for Venezuela it is important to achieve agro-industrial, infrastructure and housing development and for that purpose it needed to transfer machinery and supplies from Asia to Venezuela. Venezuela’s approach to Turkey, Maduro declared, is to pursue an economic high-level agenda to establish “a new world financial architecture.”
Turkey’s Foreign Minister highlighted Venezuela’s strategic location with access to the Caribbean and the Atlantic Ocean. Turkey is hoping that it can access the rest of Latin America and the Caribbean via Caracas and Venezuela harbors the same hope to penetrate Asian and Middle Eastern markets through Turkey.
The keynote to the visit was the signing of an energy cooperation agreement to kick-start the strategic alliance. Turkey will invest in the Orinoco Oil Belt and refine Venezuelan crude. Maduro confirmed that Turkey will receive oil from Venezuela and then both nations will make joint oil investments in third countries.
Minister Maduro also met Turkey’s Foreign Trade Secretary, Ahmet Yakici to express his country’s interest in bilateral projects in housing, food and exports. Today, Maduro is expected in the Ukraine to open work sessions agreed to during President Chavez’ visit to that country three weeks ago.
Quantitative Easing: Elixir or Poison?
By Stephen Lendman | November 6, 2010
Ahead of the November 11 – 12 G-20 meeting in Seoul, South Korea, the Fed announced QE II, another $600 billion between now and end of June 2011, a flexible figure to be raised or lowered freely, the Fed saying it will:
“….regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.”
An additional $300 billion received from maturing securities will also be used. Easing, in fact, began around mid-year. Wall Street insiders knew it to take advantage, but not the public, QE being used to debauch the currency, harm the economy, and destroy, not create, jobs.
Market Ticker’s Karl Denninger calls QE “the largest tax ever imposed on the American people in the history of the nation. It is more than fourteen times the Bush tax cuts….Goldman Sachs believes that Bernanke will impose a total tax through (QE) of more than four trillion dollars over the next two years, or more than fifty-seven times the Bush tax cuts.”
How so? Because credit created is going into asset markets (stocks, bonds, commodities, etc.), not the economy. QE I’s tax, in fact, diluted stimulus funds, an offsetting tax “directly into the bankers’ pockets” for speculation, big salaries and bonuses.
Add to that inflation. According to James Grant of Grant’s Interest Rate Observer, QE will create unsustainable asset bubbles and debase the dollar, making products and services more expensive, ending “everyday low prices.” Bernanke wants inflation, a hidden tax. Devaluation is being used to get it, no matter the serious consequences.
Economist John Maynard Keynes in his 1920 book, “The Economic Consequences of the Peace,” warned us, saying:
“Lenin….was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
Denninger is just as blunt, saying unless public outrage stops this, “you’re all going to be effectively dead economically.
Your assets will be stripped.
All of them.
Your homes.
Your businesses.
Your savings….And, when the inevitable margin collapse comes in the corporate sector, your stock portfolio will detonate again and your pension funds, Medicare, Medicaid and Social Security will be” toast.
There’s no middle ground, no place to hide. Either “stop this madness or we all get destroyed. Those are the only choices,” or as Tom Lehrer’s memorable 1950s lyrics put it, referring then to potential nuclear annihilation, “we’ll all go together when we go.” All today except bankers, of course.
On November 4, on Bloomberg TV, David Stockman, Reagan’s Office of Management and Budget Director, explained it this way:
Fed QE “is injecting high grade monetary heroin into the financial system of the world, and one of these days it is going to kill the patient,” meaning economies and people.
In early 2009, economist Michael Hudson said:
“The (US) economy has reached its debt limit and is entering its insolvency phase. We are not in a cycle but (at) the end of an era. The old world of debt pyramiding to a fraudulent degree cannot be restored,” only delayed to postpone a painful day of reckoning.
Piling new debt on old exacerbates a bad situation. Hudson explained more in his latest article titled, “US ‘Quantitative Easing’ is Fracturing the Global Economy.”
Quantitative Easing (QE) Defined
In simple terms, it’s monetary policy to increase the money supply – literally creating it out of thin air. Wikipedia calls it a central bank policy “to increase the supply of money by increasing excess reserves of the banking system. This policy is usually invoked when the normal methods to control the money supply have failed.” Or have been exhausted in cases where interest rates are near zero, today’s situation in America, Japan and elsewhere.
Central banks do it electronically, thereby increasing their own accounts to use any way they wish, but not risk free. Though not evident so far, too much money chasing too few goods causes inflation. Currency debasing, including the dollar, is another issue, very relevant today, given that it’s part of the Fed’s plan. Gold prices reflect it, rising from under $300 in 2002 to nearly $1,400 currently, experts believing it’s heading much higher. Bond rates so far are low, reflecting economic weakness, but once inflation is sensed, they’ll rise proportionately to the risk.
Project Censored’s top 2009-10 story is the plan to replace the dollar, perhaps by debasing it to worthlessness. However, other nations have reacted, in Michael Hudson’s words by “creat(ing) an international monetary system in which central bank savings do not fund (America’s massive debt). Russia, China, India and Brazil have taken the lead.”
Others will likely follow. “Finance has become the new mode of warfare.” Currency wars are in play for economic competitiveness, nations jockeying with each other during a period of economic weakness, a game putting them all at risk.
QE “is based on the wrong-headed idea that if the Fed provides liquidity, banks will… lend out credit at a markup, ‘earning their way out of debt’ – inflating the economy in the process.”
Not the economy most people think of, however. The Fed is targeting “asset markets – above all real estate, as 80% of (US) bank loans” are for mortgages.
Importantly, Fed gamesmanship puts international finance at risk. “This is what US economic policy and even its foreign policy is now all about, including de-criminalizing financial fraud.” In the 1980s, greed was called good, plenty of fraud, of course, came with it. Today though, it’s massive theft in amounts never before imagined in unknown multi-trillions, lots more to come unless stopped.
Instead of healing ailing economies, they’re being wrecked. Hoped for new borrowing isn’t happening. Instead, “banks have been tightening their loan standards rather than lending more to US homeowners, consumers and businesses since 2007.”
Rather than lend domestically, dollars are flooding world currency markets, hoping insolvent banks can earn their way out of debt, and make America more competitive by debasing the dollar, perhaps replacing it.
Domestically, the market is “loaned up.” Borrowing is shrinking, not expanding, a sure way to prevent economic growth. QE I, the $1.7 trillion created from March 2009 to March 2010, failed. More worrisome is that QE II entails:
“consequences that Federal Reserve policy makers have not acknowledged. For one thing, the banks have used (bailout and liquidity funds) to increase their profits and to continue paying high salaries and bonuses. What their lending is inflating are asset prices,” not output and employment. “And asset price inflation is increasing the power of property over living labor and production, elevating the FIRE sector (finance, insurance, and real estate) further over the ‘real’ economy.”
Moreover, QE II is a zero sum game. It can only work at the expense of other economies. That’s why it’s “financial aggression,” destroying global currency stability. It also harms America, the greater economy sacrificed for the FIRE sector, especially Wall Street, destroying countries and human beings for profit.
Today’s “global economy is being turned into a tributary system, achieving what military conquest sought in times past.” It’s “implicit in QE II.” However, other countries are reacting, “taking defensive measures against this speculation (and) ‘free credit’ takeovers” with cheap dollars, using various methods to do it.
The Reserve Bank of India just raised rates for the sixth time to 6.25%. The Reserve Bank of Australia increased theirs for the seventh time to 4.75%. In mid-October, China raised its rates. Brazil raised its tax on foreign investment in government bonds. South Korea may reinstate a withholding tax on foreign investors’ holdings in some securities. Watch for other nations to impose similar measures, mindful of Fed policy.
Today, says Hudson, the “major international economic question… is how national economies can achieve greater stability by insulating themselves from predatory (Fed) financial movements,” a zero sum game they’ll lose if they can’t.
Effectiveness of Quantitative Easing Questioned
QE I failed. Will QE II do better? Many economists think not, including Bernanke, having argued (with former Fed vice chairman Alan Blinder) against it in 1988. Minneapolis Fed president Narayana Kocherlakota agrees. Speaking in London in early October, he explained several reasons why, a key one that banks, flush with reserves, aren’t lending.
Pimco’s co-CEO Mohamed El-Erian also thinks QE II will fail, headlining on November 4 in the Financial Times, “QE2 blunderbuss likely to backfire,” saying:
“….liquidity injections and financial engineering are insufficient to deal with the challenges that the US faces. Without meaningful structural reforms, part of the Fed’s liquidity injection will (cause) another surge of capital flows to other countries,” precisely what they don’t need or want.
Fed policy will force other countries to protect their currencies, perhaps by capital controls, protectionism and other measures. As a result, the dollar’s reserve currency status will erode, what’s now happening incrementally.
“The unfortunate conclusion is that QE II will be of limited success in sustaining high growth and job creation in the US, and will complicate life for many other countries.” That seems what Fed policy intends, wrecking world economies for greater FIRE sector profits and empowerment. Will it work is at issue, or will reckless Fed meddling destroy predators with their prey.
Economics Nobel laureate Christopher Pissarides believes QE II won’t produce jobs. In a brief comment, economics Nobel laureate Paul Krugman also expressed doubt it can work. Former Fed vice chairman Donald Kohn said it won’t turn around the US economy. At best, it might help marginally. Economics Nobel laureate Joseph Stiglitz in the Financial Times said it’s “folly to place all our trust in the Fed,” adding:
“It should be obvious that monetary policy has not worked to get the economy out of its current doldrums.” Having failed so far, “monetary authorities have turned to quantitative easing. Even most advocates of monetary policy agree the impact of this is uncertain. What they seldom note, though are the potential long-term costs.”
Stiglitz prefers fiscal over monetary policy, targeting education, technology and infrastructure. Even though government debt will be increased, “the assets on the other side of the balance sheet are increased commensurately,” and over time, their return on investment far exceeds the cost. On the other hand, planned austerity, hoping monetary policy can work is “sheer folly.” Machiavellian destructiveness better describes it.
Economist David Rosenberg is also skeptical, saying in a November 4 commentary that he sees QE II having “no visible impact on the willingness to borrow, the money multiplier or velocity, which is what we would need to see to declare this radical policy experiment a success.” QE I also provided none. It was a total flop, suggesting QE II won’t fare better. Worse still, Rosenberg sees destructive currency wars intensifying, leading to trade wars that don’t “tend to end very well.”
Market analyst Bob Chapman calls QE II a futile way to keep the economy and financial system afloat. For one thing, it drives out real investment, “the kind that creates jobs and profits.” Fed policies are the opposite, producing debt and speculative excess. In the process, “they also crowd out other borrowers, which ultimately leads to higher interest rates and offsets banks’ ability to lend.” Moreover, consumers are gravely harmed. Their purchasing power declines, the economy, as a result, pushed “deeper into depression.”
Deflation now besets America, but reckless money creation eventually causes inflation, “to be followed by hyperinflation and ultimately deflationary depression.”
George Bernard Shaw observed that “If governments devalue the(ir) currenc(ies) in order to betray all creditors, you politely call this procedure ‘inflation.’ ” It doesn’t just happen. It’s from reckless monetary and/or fiscal policies.
Moreover, the combination of government-created debt for wars and corporate handouts as well as QE II will “bury the economy.” It will do nothing to increase demand, reverse the housing crisis, create jobs, or stimulate growth, what sick economies need to get well.
Financial expert and investor safety advocate Martin Weiss worries that the Fed is “unleash(ing) a whole new round of monetary stimulus, potentially driving more liquidity into gold, commodities, foreign currencies, and emerging markets, noting also “one of the greatest disconnects of all time between:
— a sinking economy on the one side, and
— the real possibility of roaring bull markets in certain asset classes on the other side.”
On November 3, Bloomberg’s Joshua Zumbrun suggested that Republican electoral strength may restrain Fed policy. Don’t bet on it. The die is cast. QE II will be unchecked, the announced $600 billion an amount to be raised or lowered freely.
At the same time, bipartisan support for austerity will gravely harm millions of Americans. They’re on their own with no help from Washington, newly elected bums even worse than repudiated ones. To their chagrin, voters will realize it once the 112th Congress convenes, what they already should know about a president who betrayed them.
A Final Comment
QE can work if used constructively, not destructively, as planned. Colonial America proved it, Massachusetts first in 1691 with its own paper money, backed by the full faith and credit of the government. Other colonies followed using scrip, freeing them from British banks, letting them grow their economies prosperously, inflation-free, with no taxation for 25 years. The secret was not issuing too much, recycling created money back into local economies for productive growth.
In other words, everything was kept proportionally in balance. Moreover, local governments paid no interest on their own money, created for growth, not banker enrichment at the expense of commerce, industry, and the public.
Lincoln did the same thing, again with government created money. His accomplishments and what followed turned America into the world’s greatest industrial giant by launching the steel industry, a continental railroad system, and a new era of farm machinery and cheap tools. Free education was also established. The Homestead Act gave settlers ownership rights and encouraged land development. Government supported all branches of science. Mass production methods were standardized. Labor productivity rose by up to 75%, and still more was achieved during the post-civil war years, America’s greatest period of growth before the Fed’s 1913 creation.
By abolishing or nationalizing it, America could again be sustainably prosperous under a publicly-run banking system, everyone benefiting from inflation-free growth. Predatory lenders would be eliminated. Government would control its own money, creating it as needed interest-free. Federal taxes could be reduced or eliminated. Moreover, if states and local communities had their own banks, like North Dakota, it would work as well for them.
Under today’s privately-run Fed and predatory banking system, Wall Street runs America, wrecking it for profit, QE its latest scheme. What could be used productively is a weapon of mass destruction. As a result, harder than ever hard times are coming, what only civil action can prevent, including demanding that government control its own money, what the Constitution’s Article 1, Section 8 mandates.
Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net. Also visit his blog site at sjlendman.blogspot.com
The Political Economy of Israel’s Occupation: Repression Beyond Exploitation
Shir Hever’s analysis attempts to answer important questions such as why the Palestinians in the Occupied Territories live in poverty, and whether Israel benefits from their condition.
By Alex Snowdon | CounterFire | 31 October 2010
Shir Hever, The Political Economy of Israel’s Occupation: Repression Beyond Exploitation (Pluto Press, 2010), 240pp.
Shir Hever, a radical Israeli economist, recently wrote an article which posed the question: ‘Why does Israel continue to occupy the Palestinians?’ That is also one of the major questions addressed in his new book, an ambitious work on the political economy of the occupation.
Hever is an academic/activist on the Israeli Left with a consistently critical perspective on the Israeli state. As a researcher based at Jerusalem’s Alternative Information Centre, he is able to draw on a wealth of sources for this tremendously well-informed account of the economic dynamics of the Israeli occupation. He provides an invaluable historical perspective, tracing developments since 1967, when Israel massively expanded its occupation of Palestinian land. Perhaps surprisingly considering the topic, Hever’s book is highly accessible to those who don’t specialise in economics.
The analysis seeks to address some important questions: why is it that Palestinians in the Occupied Territories live in such awful poverty? Does Israel benefit from Palestinian poverty, and if so how? A great strength here is Hever’s skillful avoidance of simplification. The focus is on ‘the economic aspects of the relations between the Israeli authorities and the occupied Palestinians’, noting that these are frequently neglected yet just as important as military and geopolitical aspects. Nonetheless, he rejects the reductionist, over-simplistic idea that Israel is driven to maintain its occupation solely by economic factors, narrowly conceived. The reality is more complex. He insists that that ‘profit alone cannot explain the actions of the many actors perpetuating or resisting the occupation.’
Economic inequality is a recurring theme. While it is true that ‘certain Palestinian businesspeople and politicians are much better-off than certain Israelis of the lower socioeconomic classes’, overall inequality lies principally between Israelis and Palestinians. Acute poverty is widespread in the Occupied Territories; the Palestinian economy as a whole is prevented from developing, as part of a broader process of exploitation and subjugation.
Hever never loses sight of the fact that he is writing about a part of the world which, while very small, is the focus for a huge amount of global attention. Israel is famously a recipient of a vast amount of US ‘overseas aid’, while international aid of a different kind is essential for many desperately poor Palestinians. Israeli policy towards Gaza has been ‘to keep it constantly on the verge of a humanitarian catastrophe’, as a deliberate policy intended to suppress resistance and self-organisation. But Hever also stresses the persistent, and essentially irrational, contradictions in Israeli policy, which are shaped by the contradictions and irrationality of both capitalism in general and the particularities of the occupation.
For example, while the occupation is certainly now uneconomic from the point of view of the wider Israeli economy and society, there are very particular military and business interests which do well from it. In other respects, Israel has at times in the past allowed a rise in Palestinians’ standard of living in order to ‘make them more docile’, but then it has launched ‘brutal attacks which destroy the infrastructure necessary for the survival of the Palestinian population’. Israel has welcomed international aid to the occupied Palestinians, as it relieves it of some responsibility. Yet Israel then erects a variety of obstacles to this aid actually reaching those for whom it is designed.
Hever also avoids treating the economics of occupation as ahistorical and unchanging. Quite the opposite in fact: I was fascinated to discover how economic relationships have evolved over the forty years or so since the Gaza Strip and West Bank were occupied, though in general it is a miserable tale of worsening conditions for the occupied Palestinians. After 1967 there was a period of relative prosperity, influenced by Israel’s preference for cultivating Palestinian co-operation rather than seeking to subjugate them violently. At that stage, consent was more important than coercion. Nonetheless, Israel prevented the development of a viable independent Palestinian economy, ensuring the occupied population was heavily dependent upon Israeli imports, Israeli financial institutions and employment by Israeli companies. Hever writes:
‘As local sources of income were suppressed by Israeli authorities, the main source of income to the Palestinians became remittances from Palestinian workers living in Israel, in the Jewish settlements in OPT [Occupied Palestinian Territories], and in the Gulf states.’
The 1980s saw a change for the worse. Falling oil prices led to falling demand for Palestinian migrant workers in the Gulf states. A collapse in the Israeli stock market led to problems for Palestinian workers in Israel: a fall in income combined with the tightening of work opportunities for Palestinians, accompanied by discrimination and abuse. The growth of Jewish settlements inside the Occupied Territories involved the theft of Palestinian land, damaging the local economy. And Israeli policy became more belligerent, shifting away from seeking consent and accommodation. All these factors influenced the emergence of the first intifada, the militant rebellion by Palestinians against oppression which started in 1987.
Fast forward to the Oslo process, which began in 1993. This did nothing for the Palestinian economy; indeed there was a fall in living standards, which was (again) one factor behind the eruption of resistance in the start of the second intifada in 2000. A major problem in these years was the increasing curtailment of employment opportunities for Palestinians seeking work inside Israel. Growing poverty and discrimination fed bitterness and disillusionment.
A gulf opened up during the Oslo years (1993-2000): while the Israeli economy boomed, the Palestinian economy contracted. For Palestinians, poverty and unemployment grew. Living standards fell still further after 2000, when Palestinians in Gaza and the West Bank became increasingly reliant on overseas aid to avoid humanitarian disaster. In the West Bank the Palestinian Authority (PA) has failed to even marginally improve conditions for the local population, but has often colluded with Israeli occupation policies. Neve Gordon has referred to this, in an evocative turn of phrase, as Israel ‘outsourcing the occupation’ to the PA.
Hever highlights how expensive the occupation actually is, especially in terms of vast spending on a complex security apparatus. An assessment of the costs and profits of occupation concludes that three groups pay for its maintenance: Israeli citizens (through taxation), Palestinians (via exploitation of cheap labour) and the US (donating ‘aid’ which helps sustain the fragile Israeli economy). But there are also profits to be reaped. It will come as no surprise to learn there ‘was a rapid rise in the market value and business of the military-surveillance sector of the Israeli economy after the September 11, 2001 attacks.’ International oil companies, arms manufacturers and the ‘security’ industry have all made handsome profits from the occupation.
More generally, the occupation and Israeli policies in recent years have proved good for business: ‘the neo-liberal policies of the Israeli government enable large companies to extract high profits with minimal regulation and taxes, and to buy government assets cheaply while the government is engaged in a rush to privatisation. Those who profit from the Israeli crisis have no incentive to help in resolving it.’
In his conclusion, Hever outlines the cases for a two-state solution and a one-state solution, specifically examining the economic dimensions of the question. He leans heavily towards a one-state solution, i.e. a single secular and democratic state encompassing the whole of historic Palestine. He is realistic about the problems, but writes that it would at least create the framework and tools required for tackling many of the current economic injustices.
He also praises the efforts of the international boycott movement, pointing to the anti-apartheid movement which targeted South Africa as a relevant precedent. It can be effective because Israel’s business sector is so dependent on international trade. The boycott movement is vital in working towards ‘the replacement of the existing system of repression through the creation of a democratic state to represent everyone who lives in the area currently controlled by Israel.’
Broder and Israel’s Goldilocks war against Iran
By Paul Woodward | War in Context | November 1, 2010
What kind of institutional entity do the hacks in Washington constitute such that they can have a “dean”?
When David Broder is referred to as the dean of the Washington press corps, I guess it’s just a complimentary way of saying the old guy. But Broder’s nine years younger than Helen Thomas. How come she never rose to the same stature? Is baldness a requirement?
In spite of his institutional stature, Broder’s mental capacities have in recent years come into question and his op-ed in the Washington Post on Sunday provides yet another occasion to wonder what is going on inside this man’s brain as he pushes for war against Iran.
War and peace influence the economy.
Look back at FDR and the Great Depression. What finally resolved that economic crisis? World War II.
Here is where Obama is likely to prevail. With strong Republican support in Congress for challenging Iran’s ambition to become a nuclear power, he can spend much of 2011 and 2012 orchestrating a showdown with the mullahs. This will help him politically because the opposition party will be urging him on. And as tensions rise and we accelerate preparations for war, the economy will improve.
I am not suggesting, of course, that the president incite a war to get reelected. But the nation will rally around Obama because Iran is the greatest threat to the world in the young century. If he can confront this threat and contain Iran’s nuclear ambitions, he will have made the world safer and may be regarded as one of the most successful presidents in history.
So another war is going to rescue the economy? But just a minute — if war’s such an excellent economic tonic, how come we aren’t already in great shape? A decade of war just hasn’t been quite enough?
It’s easy to mock Broder’s prescription and even to wonder whether he’s lost his grip on reality, but maybe he’s not quite as crazy as he sounds. Read more carefully, this is not actually a call for war — it is a call for the continuously escalating threat of war.
This is indeed the most likely “lesson” that some have drawn from the experience of Iraq: that the best kind of war is the one that has yet to be fought. A war that can be budgeted for, equipped for, and around which politicians can construct their postures of strength, resolution and righteousness. The context is one in which we have been encouraged to think that war is normal. War is in fact so normal that Washington pundits can now present it as a useful economic tool.
Washington’s lead comes from Israel, which has less interest in starting a war with Iran than in promoting the idea that war might be just over the horizon — a kind of Goldilocks war, not too far away and not too close, but just close enough. In this delicately modulated threat of mayhem, Iran itself remains politically and economically boxed in, while issues which merit more urgent attention — namely the intractable Israeli-Palestinian conflict — can be shunted to one side.
Two countries so heavily invested in manufacturing the means for engaging in war, actually have less interest in wars being fought than in a war-footing constantly being maintained. The problem is, a war posture can only be maintained for so long and momentum only be built up so much before a turning point is reached: war either then becomes inevitable or a real alternative has to be pursued.
Only through the hubris which metastasizes inside the brains of those trapped inside the Washington bubble, can anyone fail to see that the process of backing Iran into a corner risks the United States becoming trapped by the narrow logic of its own strategy. War is not normal. It is a failure of imagination.
Who Were the Witches? – Patriarchal Terror and the Creation of Capitalism
By Alex Knight | November 5, 2009
This Halloween season, there is no book I could recommend more highly than Silvia Federici’s brilliant Caliban and the Witch: Women, the Body, and Primitive Accumulation (Autonomedia 2004), which tells the dark saga of the Witch Hunt that consumed Europe for more than 200 years. In uncovering this forgotten history, Federici exposes the origins of capitalism in the heightened oppression of workers (represented by Shakespeare’s character Caliban), and most strikingly, in the brutal subjugation of women. She also brings to light the enormous and colorful European peasant movements that fought against the injustices of their time, connecting their defeat to the imposition of a new patriarchal order that divided male from female workers. Today, as more and more people question the usefulness of a capitalist system that has thrown the world into crisis, Caliban and the Witch stands out as essential reading for unmasking the shocking violence and inequality that capitalism has relied upon from its very creation.
Who Were the Witches?
Parents putting a pointed hat on their young son or daughter before Trick-or-Treating might never pause to wonder this question, seeing witches as just another cartoonish Halloween icon like Frankenstein’s monster or Dracula. But deep within our ritual lies a hidden history that can tell us important truths about our world, as the legacy of past events continues to affect us 500 years later. In this book, Silvia Federici takes us back in time to show how the mysterious figure of the witch is key to understanding the creation of capitalism, the profit-motivated economic system that now reigns over the entire planet.
During the 15th – 17th centuries the fear of witches was ever-present in Europe and Colonial America, so much so that if a woman was accused of witchcraft she could face the cruellest of torture until confession was given, or even be executed based on suspicion alone. There was often no evidence whatsoever. The author recounts, “for more than two centuries, in several European countries, hundreds of thousands of women were tried, tortured, burned alive or hanged, accused of having sold body and soul to the devil and, by magical means, murdered scores of children, sucked their blood, made potions with their flesh, caused the death of their neighbors, destroyed cattle and crops, raised storms, and performed many other abominations” (169).
In other words, just about anything bad that might or might not have happened was blamed on witches during that time. So where did this tidal wave of hysteria come from that took the lives so many poor women, most of whom had almost certainly never flown on broomsticks or stirred eye-of-newt into large black cauldrons?
Caliban underscores that the persecution of witches was not just some error of ignorant peasants, but in fact the deliberate policy of Church and State, the very ruling class of society. To put this in perspective, today witchcraft would be a far-fetched cause for alarm, but the fear of hidden terrorists who could strike at any moment because they “hate our freedom” is widespread. Not surprising, since politicians and the media have been drilling this frightening message into people’s heads for years, even though terrorism is a much less likely cause of death than, say, lack of health care.1 And just as the panic over terrorism has enabled today’s powers-that-be to attempt to remake the Middle East, this book makes the case that the powers-that-were of Medieval Europe exploited or invented the fear of witches to remake European society towards a social paradigm that met their interests.
Interestingly, a major component of both of these crusades was the use of so-called “shock and awe” tactics to astound the population with “spectacular displays of force,” which helped to soften up resistance to drastic or unpopular reforms.2 In the case of the Witch Hunt, shock therapy was applied through the witch burnings – spectacles of such stupefying violence that they paralyzed whole villages and regions into accepting fundamental restructuring of medieval society.3 Federici describes a typical witch burning as, “an important public event, which all the members of the community had to attend, including the children of the witches, especially their daughters who, in some cases, would be whipped in front of the stake on which they could see their mother burning alive” (186).
Witch burning was the medieval version of “Shock and Awe”
The book argues that these gruesome executions not only punished “witches” but graphically demonstrated the repercussions for any kind of disobedience to the clergy or nobility. In particular, the witch burnings were meant to terrify women into accepting “a new patriarchal order where women’s bodies, their labor, their sexual and reproductive powers were placed under the control of the state and transformed into economic resources” (170).
Federici puts forward that up until the 16th century, though living in a sexist society, European women retained significant economic independence from men that they typically do not under capitalism, where gender roles are more distinguished. “If we also take into account that in medieval society collective relations prevailed over familial ones, and most of the tasks that female serfs performed (washing, spinning, harvesting, and tending to animals on the commons) were done in cooperation with other women, we then realize… [this] was a source of power and protection for women. It was the basis for an intense female sociality and solidarity that enabled women to stand up to men.”
The Witch Hunt initiated a period where women were forced to become what she calls “servants of the male work force” (115) – excluded from receiving a wage, they were confined to the unpaid labor of raising children, caring for the elderly and sick, nurturing their husbands or partners, and maintaining the home. In Federici’s words, this was the “housewifization of women,” the reduction to a second-class status where women became totally dependent on the income of men (27).
The author goes on to show how female sexuality, which was seen as a source of women’s potential power over men, became an object of suspicion and came under sharp attack by the authorities. This assault manifested in new laws that took away women’s control over the reproductive process, such as the banning of birth control measures, the replacement of midwives with male doctors, and the outlawing of abortion and infanticide.4 Federici calls it an attempt to turn the female body into “a machine for the reproduction of labor,” such that women’s only purpose in life was supposedly to produce children (144).
But we also learn that this was just one component of a broader move by Church and State to ban all forms of sexuality that were considered “non-productive.” For example, “homosexuality, sex between young and old, sex between people of different classes, anal coitus, coitus from behind, nudity, and dances. Also proscribed was the public, collective sexuality that had prevailed in the Middle Ages, as in the Spring festivals of pagan origins that, in the 16th-century, were still celebrated all over Europe” (194). To this end, the Witch Hunt targeted not only female sexuality but homosexuality and gender non-conformity as well, helping to craft the patriarchal sexual boundaries that define our society to this day.
Capitalism – Born in Flames
What separates Caliban from other works exploring the “witch” phenomenon is that this book puts the persecution of witches into the context of the development of capitalism. For Silvia Federici, it’s no accident that “the witch-hunt occurred simultaneously with the colonization and extermination of the populations of the New World, the English enclosures, [or] the beginning of the slave trade” (164). She instructs that all of these seemingly unrelated tragedies were initiated by the same European ruling elite at the very moment that capitalism was in formation, the late 15th through 17th centuries. Contrary to “laissez-faire” orthodoxy which holds that capitalism functions best without state intervention, Federici posits that it was precisely the state violence of these campaigns that laid the foundation for capitalist economics.
Thankfully for the reader, who may not be very familiar with the history of this era, Federici outlines these events in clear and accessible language. She focuses on the Land Enclosures in particular because their significance has been largely lost in time.
Many of us will not remember that during Europe’s Middle Ages, before the Enclosures, even the lowliest of serfs had their own plot of land which they could use for just about any purpose. Federici adds, “With the use of land also came the use of the ‘commons’ – meadows, forests, lakes, wild pastures – that provided crucial resources for the peasant economy (wood for fuel, timber for building, fishponds, grazing grounds for animals) and fostered community cohesion and cooperation” (24). This access to land acted as a buffer, providing security for peasants who otherwise were mostly subject to the whim of their “Lord.” Not only could they grow their own food, or hunt in the relatively plentiful forests which were still standing in that era, but connection to the commons also gave peasants territory with which to organize resistance movements and alternative economies outside the control of their masters.
The Enclosures were a process by which this land was taken away – closed off by the State and typically handed over to entrepreneurs to pursue a profit in sheep or cow herding, or large-scale agriculture. Instead of being used for subsistence as it had been, the land’s bounty was sold away to fledgling national and international markets. A new class of profit-motivated landowners emerged, known as “gentry,” but the underside of this development was the trauma experienced by the evicted peasants. In the author’s words, “As soon as they lost access to land, all workers were plunged into a dependence unknown in medieval times, as their landless condition gave employers the power to cut their pay and lengthen the working-day” (72).
For Federici, then, the chief creation of the Enclosures was a property-less, landless working class, a “proletariat” who were left with little option but to work for a wage in order to survive; wage labor being one of the defining features of capitalism.
Cut off from their traditional soil, many communities scattered across the countryside to find new homesteads. But the State countered with the so-called “Bloody Laws”, which made it legal to capture wandering “vagabonds” and force them to work for a wage, or put them to death. Federici reveals the result: “What followed was the absolute impoverishment of the European working class… Evidence is the change that occurred in the workers’ diets. Meat disappeared from their tables, except for a few scraps of lard, and so did beer and wine, salt and olive oil” (77). Although European workers typically labored for longer hours under their new capitalist employers, living standards were reduced sharply throughout the 16th century, and it wasn’t until the middle of the 19th century that earnings returned to the level they had been before the Enclosures.5
According to Federici, the witch hunts played a key role in facilitating this process of impoverishment by driving a sexist wedge into the working class that “undermined class solidarity,” making it more difficult for communities to resist displacement from their land (48). While women were faced with the threat of horrific torture and death if they did not conform to new submissive gender roles, men were in effect bribed with the promise of obedient wives and new access to women’s bodies. The author cites that “Another aspect of the divisive sexual politics to diffuse workers’ protest was the institutionalization of prostitution, implemented through the opening of municipal brothels soon proliferating throughout Europe” (49). And in addition to prostitution, a legalization of sexual violence provided further sanction for the exploitation of women’s bodies. She explains, “In France, the municipal authorities practically decriminalized rape, provided the victims were women of the lower class” (47). This initiated what Federici calls a “virtual rape movement,” making it unsafe for women to even leave their homes.
The witch trials were the final assault, which all but obliterated the integrity of peasant communities by fostering mutual suspicion and fear. Amidst deteriorating conditions, neighbors were encouraged to turn against one another, so that any insult or annoyance became grounds for an accusation of witchcraft. As the terror spread, a new era was forged in the flames of the witch burnings. Surveying the damage, Silvia Federici concludes that “the persecution of the witches, in Europe as in the New World, was as important as colonization and the expropriation of the European peasantry from its land were for the development of capitalism” (12).
A Forgotten Revolution
Federici maintains that it didn’t have to turn out this way. “Capitalism was not the only possible response to the crisis of feudal power. Throughout Europe, vast communalistic social movements and rebellions against feudalism had offered the promise of a new egalitarian society built on social equality and cooperation” (61).
Caliban‘s most inspiring chapters make visible an enormous continent-wide series of poor people’s movements that nearly toppled Church and State at the end of the Middle Ages. These peasant movements of the 13th – 16th centuries were often labelled “heretical” for challenging the religious power of the Vatican, but as the book details they aimed for a much broader transformation of feudal society. The so-called “heretics” often “denounced social hierarchies, private property and the accumulation of wealth, and disseminated among the people a new, revolutionary conception of society that, for the first time in the Middle Ages, redefined every aspect of daily life (work, property, sexual reproduction, and the position of women), posing the question of emancipation in truly universal terms” (33).
Silvia Federici shows us how the heretical movements took many forms, from the vegetarian and anti-war Cathars of southern France to the communistic and anti-nobility Taborites of Bohemia, but were united in the call for the elimination of social inequality. Many put forth the argument that it was anti-Christian for the clergy and nobility to live in opulence while so many suffered from lack of adequate food, housing or medical attention.
Another common thread weaving the European peasant movements together was the leadership of women. Federici describes that, “[Heretical women] had the same rights as men, and could enjoy a social life and mobility that nowhere else was available to them in the Middle Ages… Not surprisingly, women are present in the history of heresy as in no other aspect of medieval life.” (38). Some heretical sects, like the Cathars, discouraged marriage and emphasized birth control – advocating a sexual liberation which directly challenged the Church’s moral authority.
The gender politics of peasant movements proved to be a strength, and they attracted a wide following that undercut the power of a feudal system which was already in crisis. Federici explains how the movements became increasingly revolutionary as they grew in size. “In the course of this process, the political horizon and the organizational dimensions of the peasant and artisan struggle broadened. Entire regions revolted, forming assemblies and recruiting armies. At times, the peasants organized in bands, attacking the castles of the lords, and destroying the archives where the written marks of their servitude were kept” (45).
What started as a religious movement became increasingly revolutionary. For example, in the 1420s and 30s, the Taborites fought to liberate all of Bohemia, beating back several Crusades of 100,000+ men organized by the Vatican (54-55). The uprisings became contagious all across Europe, so much so that in the crucial period of 1350-1500, unprecedented concessions were made including the doubling of wages, reduction in prices and rents, and a shorter working day. In the words of Silvia Federici, “the feudal economy was doomed” (62).
The author documents that the initial reaction by elites was to institute the “Holy Inquisition,” a brutal campaign of state repression that included torturing and even burning heretics to death. But as time went on, ruling class strategy shifted from targeting heretics in general to specifically targeting female community leaders. The Inquisition morphed into the Witch Hunt.
Soon, simple meetings of peasant women were stigmatized as possible “Sabbats,” where women were supposedly seduced by the devil to become witches, but as Federici clarifies, it was the rebellious politics and non-conforming gender relations of such gatherings which were demonized (177). Strong, defiant women were murdered by the tens of thousands, and along with them the Witch Hunt also destroyed “a whole world of female practices, collective relations, and systems of knowledge that had been the foundation of women’s power in pre-capitalist Europe, and the condition for their resistance in the struggle against feudalism” (103).
For elite European nobles and clergy, the Witch Hunt succeeded in stifling a working class revolution that had increasingly threatened their rule. Even more, Silvia Federici puts forward that the Witch Hunt facilitated the rise of a new, capitalist social paradigm – based on large-scale economic production for profit and the displacement of peasants from their lands into the burgeoning urban workforce. In time, this capitalist system would dominate all of Europe and be dispersed through conquistadors’ “guns, germs and steel” to every corner of the globe, destroying countless ancient civilizations and cultures in the process.6 Federici’s analysis is that, “Capitalism was the counter-revolution that destroyed the possibilities that had emerged from the anti-feudal struggle – possibilities which, if realized, might have spared us the immense destruction of lives and the environment that has marked the advance of capitalist relations worldwide” (22). How might things be different if the forgotten revolution had won?
Conclusion – Rediscovering the Magic of Truth-Telling
Caliban and the Witch is a book that challenges many important myths about the world we live in. First and foremost among these is the widely-held belief that capitalism, though perhaps flawed in its current form, started out as a “progressive” development that liberated workers and improved the conditions of women, people of color and other oppressed groups. Silvia Federici has done impressive work to take us back to the very foundations of the capitalist system in late-medieval Europe to uncover a secret history of land dispossession and impoverishment, gender and sexual terror, and brutal colonization of non-Europeans. This terrible legacy leads her to the profound conclusion that the system is “necessarily committed to racism and sexism” (17).
Most strongly, she writes, “It is impossible to associate capitalism with any form of liberation or attribute the longevity of the system to its capacity to satisfy human needs. If capitalism has been able to reproduce itself it is only because of the web of inequalities that it has built into the body of the world proletariat, and because of its capacity to globalize exploitation. This process is still unfolding under our eyes, as it has for the last 500 years” (17).
It’s been said that we can measure a society by how it treats its women. This book provides compelling documentation to suggest that capitalism is and has always been a male dominated system, which reduces opportunities and security for women as well as marginalizing those who don’t fit within narrow gender boundaries. In particular, Silvia Federici uses the story of the Witch Hunt to illuminate the inner workings of capitalism to show the restraining, silencing, and demonizing of female sexual power built into it.7 Responding to our question that started this essay, she writes, “The witch was not only the midwife, the woman who avoided maternity, or the beggar who eked out a living by stealing some wood or butter from her neighbors. She was also the loose, promiscuous woman – the prostitute or adulteress, and generally, the woman who exercised her sexuality outside the bonds of marriage and procreation… The witch was also the rebel woman who talked back, argued, swore, and did not cry under torture” (184).
In other words, the witches were those women who in one way or another resisted the establishment of an unjust social order – the mechanical exploitation of capitalism. The witches represented a whole world that Europe’s new masters were anxious to destroy: a world with strong female leadership, a world rooted in local communities and knowledge, a world alive with magical possibilities, a world in revolt.
We need not despair for the world that has been lost. Indeed, it is still with us today in the struggles of people everywhere organizing for justice.
Notes
1 – Harvard University researchers released a study on Sept. 17, 2009 showing that approximately 45,000 Americans die unnecessarily from lack of medical coverage every year, unfortunately many times more than the number killed in the September 11 terrorist attacks. See this article for more on the Harvard study: http://www.reuters.com/article/healthNews/idUSTRE58G6W520090917
2 – “Shock and Awe”, Wikipedia. Online at http://en.wikipedia.org/wiki/Shock_and_awe. Accessed Nov. 2, 2009.
3 – This “shock therapy” strategy is examined with detailed case studies by Naomi Klein in the excellent The Shock Doctrine: The Rise of Disaster Capitalism. Metropolitan Books 2007. For example she offers that the US-led devastation of Iraq’s social infrastructure, including destruction of hospitals, schools, and food and water systems traumatized the Iraqi people such that they could not mobilize to prevent the highly unpopular privatization of the country’s oil wealth.
4 – for more on the Witch Hunt’s effect on the male domination of reproduction and medicine, see Barbara Ehrenreich’s Witches, Midwives and Nurses: A History of Women Healers, The Feminist Press at CUNY 1972, pamphlet.
5 – “The high point of wages was immediately preceding the ‘long’ sixteenth century [roughly 1450], and the low point was at its end [roughly 1650]. The drop during the sixteenth century was immense.” Wallerstein, Immanuel. The Modern World-System. Capitalist Agriculture and the Origins of the European World-Economy in the Sixteenth Century. New York: Academic Press, 1974. pg. 80.
6 – see Guns, Germs and Steel: The Fates of Human Societies, W.W. Norton Press 2005. Jared Diamond’s study of the rise of Europe focuses more on ecology than patriarchy, but is nonetheless useful for exposing the carnage of the colonization process.
7 – for a brilliant collection of insights into the many ways female sexuality is still under attack, see Friedman, Jaclyn & Jessica Valenti. Yes Means Yes! Visions of Female Sexual Power and A World Without Rape. Seal Press 2008. My review of this book can also be found here: http://endofcapitalism.com/2009/05/17/review-of-yes-means-yes-visions-of-female-sexual-power-and-a-world-without-rape/
Related articles
- Reproduction and Labor: Silvia Federici and a Feminist Reconstruction of the Commons (marymackfemtech.wordpress.com)
- “The Accumulation of Labor and the Degradation of Women: Constructing ‘Difference’ in the ‘Transition’ to Capitalism” (biopoliticsracegender.wordpress.com)
Child Labour in Jordan Valley Settlements
By Dorien Vanden Boer – Palestine Monitor – 30 October 2010
Child labour is a serious problem in the Jordan valley. The Palestinian Central Bureau of Statistics found more than 7,000 children between five and 17 were working there in 2008, the highest concentration in the Palestinian Territories. That figure has risen since.
The statistics don’t tell the full story, as there is no data for many of the children working secretly in settlements. The lack of information makes the problem difficult to deal with at a political level, even if the will existed to affect change.
The legal age for workers in Palestine was recently increased from 14 to 16, but this change has not materialised on the ground. Settlers avoid this law by recruiting through subcontractors, so that they have no direct contracts with minors, who have no official employee status or rights. Nonetheless, settlers are fully aware that children are working on their fields.
In 2007, The Israeli Ministry of Trade and Industry extended the minimum wage law to include Palestinians employed in Jewish settlements, but no authority enforces it. While the legal minimum wage in Israel is $5.51 an hour, Palestinians in settlements earn $2 an hour or less. For a day of eight hours, with only a half hour break they receive around 55 to 60 shekels ($15-16). The child workers are not insured and are given no holidays or sick leave. They often work on dangerous construction sites that do not comply with Israeli health & safety regulations. When the frequent accidents occur they receive no protection from their employer and are simply cast out.
Youssef is the headmaster of the school in Fasayil. He tells me about his nephew who got badly injured after an accident with a tractor in one of the settlements. As he was not insured by his employer and nor was the tractor, he had no right to any compensation. His family received the 10,000 shekel hospital bill. Only through “the strong solidarity between families in the village,” were they were able to pay the hospital costs and avoid total impoverishment.
Although child labour is a large-scale problem in the occupied territories, little action is being taken by humanitarian groups. Iman Nijem, a programme manager of Save the Children UK, told us his NGO is the only one in Palestine working to address the problem. Their project is just a year old.
Iman feels the main reasons for the child labour epidemic relate to the occupation. In the Jordan Valley, movement restrictions are uniquely acute, as settlements comprise approximately 50% of its territory, in addition to closed military zones and ‘nature reserves’ that eat into Palestinian land. Water is also appropriated in vast quantities for use in settlements, leaving severely limited resources for Palestinian agriculture.
While Palestinian industry is handicapped and adults cannot earn a living, children are a solution. By sending them to work in the settlements they may earn a family enough to escape the worst ravages of poverty, although their cheap labour advances the expansion of the settlements which strangle the Palestinian population. It is short-term survival that causes long-term suffering.
Child labour in settlements is not confined to the Jordan Valley. Subcontractors in South Hebron were prosecuted this year for smuggling children at night to work in agriculture and construction for settlements. The employers themselves escaped criminal charges.
The legal system makes it easy to use child labour. In C areas, the Israeli military are the only law and are notoriously reluctant to prosecute Israeli settlers. The Ministry of Trade and Industry, which is responsible for the inspection of settlements in the West Bank, rarely does so, which it justifies by claiming a lack of resources.
Save the Children wants to develop a monitoring system for child labourers. Working together with the Palestinian Authority’s Ministry of Labour and Social Affairs the organisation hopes to establish a system that supervises children to ensure they are not involved in hazardous work or dropping out of school. The system would include vocational training for the children and awareness programs for the parents. A similar programme in 2003 had to be stopped due to a lack of funding. It is hoped this new scheme may finally expose the shocking and consistent abuse of children.
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