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Russia makes move on foreign firms leaving the country

Samizdat | May 25, 2022

Lawmakers have approved a bill allowing Moscow to introduce control over foreign companies’ assets in Russia if their owners have ceased activities in the country “for no apparent economic reasons.” The legislation passed in the first reading in the Russian State Duma on Tuesday.

The bill applies to companies in which foreign equities account for 25% or more if they are of ‘major’ significance for the Russian economy. They could be the only supplier of ‘critically important industries’, produce goods of prime necessity, or be a local economic mainstay.

The legislation is primarily aimed at firms that have left Russia and decided to do so “based on the anti-Russian sentiments in Europe and the US,” a statement published by the State Duma says.

External control could only be imposed by a court for a period of up to 18 months, the bill says. The measure could then be lifted before the scheduled date if shareholders that together own more than 50% of the stock file a request with the Russian authorities and remove the causes that led to the court decision.

A court would be able to impose external control over a company’s assets for a number of reasons, including supply-side shocks, key supply chain breaches, as well as job slashing and “actions or inaction” that could lead to casualties or technogenic disasters.

Moscow has been mulling the seizure of foreign assets for months after many foreign companies halted operations in the country over the fighting in Ukraine. Consumer protection groups such as the Public Consumer Initiative (OPI) have been calling for the measure to be introduced against the likes of Apple, IKEA, Microsoft, IBM, Shell, McDonald’s, Volkswagen, Porsche, Toyota, H&M, and others.

Under the proposed bill, external management would not mean full nationalization. Foreign owners would have the opportunity to get their assets back and resume operations in Russia, or sell their shares.

May 25, 2022 Posted by | Economics | , , , , , , , , , | Leave a comment

Ford and IBM May Have to Answer for Their Role in Apartheid

A Black Agenda Radio commentary by Glen Ford | April 23, 2014

The United States court system, whose value to anyone but the rich is rapidly disappearing, may yet play a role in the unfinished business of South African liberation. A federal district judge in Manhattan ruled that a group of South Africans can proceed with a suit against Ford Motor Company and IBM for doing business with the white regime during the time of apartheid. The plaintiffs include victims of torture and relatives of people killed by the racist government. They will have to prove, not only that the American corporations knew that their products would be used to oppress and torture South Africans, but that Ford and IBM’s purpose in doing business in the country was to “aid and abet” the white authorities.

That’s a very high burden of proof. However, it’s a better shot than the U.S. Supreme Court gave to a group of Nigerian refugees who tried to sue Shell Oil for helping the Nigerian military to systematically torture and kill environmentalists in the 1990s. The High Court’s interpretation of the relevant U.S. law was that the crimes committed in Nigeria didn’t have a close enough connection to the United States. However, the justices left the door open to other cases that might have a stronger connection to the U.S.

This week, federal judge Shira Scheindlin – the same judge who issued the sweeping ruling against New York City’s stop-and-frisk policies, last year – gave the South African plaintiffs permission to make their case. She also rejected Ford and IBM’s contention that multinational corporations are legally shielded from these kinds of lawsuits. Judge Scheindlin found no basis in law to argue that international laws against such things as genocide, slavery, war crimes and piracy “apply only to natural persons and not to corporations.”

The South African plaintiffs are part of the Khulumani Group, which was created as a response to the weaknesses of the Truth and Reconciliation Commission set up by the new Black government of South Africa. The Khulumani activists say the government failed to prosecute perpetrators from the old regime and paid out only paltry reparations to the victims. Most importantly, the Black government that came to power in 1994 and its reconciliation program provided no redress for the systematic social and economic crimes of apartheid. The Khulumani Group agreed with Frank Meintjies, a South African activist and intellectual who wrote that the Truth and Reconciliation Commission “failed to address the more collective loss of dignity, opportunities and systemic violence experienced by the oppressed.” He continued: “No hearings were held on land issues, on the education system, on the migrant labor system and on the role of companies that collaborated with, and made money from, the apartheid security system” – companies like Ford and IBM.

Thanks to the Khulumani Group’s lawsuit in Manhattan, two U.S.-based multinational corporations may finally have to explain why they gave aid and comfort to South African apartheid.

~

Glen Ford can be contacted at Glen.Ford@BlackAgendaReport.com.

April 24, 2014 Posted by | Economics, Ethnic Cleansing, Racism, Zionism, Subjugation - Torture | , , | Leave a comment

Bringing SOPA to the Trans-Pacific Partnership

Robert Holleyman in the Seat

By Binoy Kampmark | Dissident Voice | March 6, 2014

The machinery to dominate global intellectual property by American fiat was further tightened by the announcement of Robert Holleyman as deputy US trade representative.  President Obama’s announcement is just another reminder of what sources of inspiration are governing the drive by Washington to control the downloading and dissemination of information via the Trans-Pacific Partnership. After all, Holleyman was a former lobbyist of the Stop Online Piracy Act (SOPA), the bill introduced by US Rep. Lamar S. Smith (R-Tx) to gift US law enforcement authorities with the means to combat copyright infringements.

Indeed, Holleyman’s own blurb as an author for The Huffington Post considers him as “one of the 50 most influential people in the intellectual property world”, an individual who “was instrumental in putting into place the global policy framework that today protects software under copyright law.”  Such is the nature of mislabelled internationalism – Washington’s policy by another name.

Holleyman has also been heavily involved as a former president of the Business Software Alliance, a body representing the main software vendors including Apple, IBM, and Microsoft. Through the consortium, Holleyman unintentionally put the problems of SOPA, and its sister legislation, PROTECT-IP, in the bright spotlight. He found himself fighting, at least for a time, a losing battle. Protest against them was extensive, with January 18, 2012 featuring the “largest online protest in history”. Congress took heed, shelving the bills. The vendors pondered the next move.

SOPA’s reach would have been global, enabling US law enforcement the means to target websites and individuals outside its jurisdiction. The carceral provisions of the bill were also hefty – five year prison terms for downloading unauthorised content.

It would have also been a rather formidable mechanism to insinuate censorship into the Internet. The legislation would allow the content provider or the US Justice Department to block sites hosting material supposedly in breach of copyright. Having such a provision would effectively overburden internet service providers to err on the side of caution and “over-block” material. If ever you want to enshrine censorship, a fine way of doing so is frightening the hosts into censoring themselves.

The secret negotiations of the TPP have proven to be a feast of select company. The negotiators themselves, such as Stefan Selig, nominee for under-secretary for international trade at the Commerce Department, have a direct line to the Bank of America. Selig’s accounts have been inflated to the tune of $9.1 million in bonus pay and $5.1 million in incentive pay. Happy is the bank that can sue for diminished assets and target governments in courts of law.

The clubbable ones are the software demons who have been “cleared” to have briefings, some 700 “stakeholders”. The “cleared advisors” also represent groups such as the Pharmaceutical Research and Manufacturers of America, the Entertainment Software Association, and the Recording Industry Association of America.

While the premise of having such vendors involved is ostensibly to protect innovation, the converse is true. The world of innovation does not matter to those who claim they have the ideas and want to protect them at cost. That is a recipe for sloppiness and envy.

The anti-democratic slant in the TPP process has also impressed itself upon observers. The press, and even members of Congress, have been kept at bay. Till parts of the treaty were published by WikiLeaks, elected officials could only view the document on visiting the Trade Representative Office. They would not be able to reproduce or transcribe it.

While SOPA and its twin PIPA were shelved indefinitely, the Obama administration has decided to shop in other forums to enforce some of their provisions. One way of doing so is through the faulty premise of free trade, which is simply another way of making some trade freer than others. The American firm features prominently in that guise of freedom.

Aspects of the leaked intellectual property chapter of the TPP so far indicate a model with SOPA trimmings. Provisions, for example, holding ISPs liable for hosting copyright infringement, have been preserved. The life of certain, corporate-owned copyrights will also be extended. In other words, this is SOPA by stealth, a process that “could not [be] achieved through an open democratic process.”

The fact that the Obama administration has also sought to sideline Congress in the debate is indicative of that. As Henry Farrell observed, “The United States appears to be using the non-transparent Trans-Pacific Partnership negotiations as a deliberate end run around Congress on intellectual property, to achieve a presumably unpopular set of policy goals.”  Senate Democrats have been mindful of their shrinking role, and have blocked the president’s attempt to obtain “fast-track authorisation”.

The effect of such authorisation would give the administration scope to limit congressional consultation while using its prerogative powers. Congress would become, in effect, a chamber of marionettes. Appointments such as Holleyman’s show little change of heart away from that policy. The copyright vanguard, along with the dance of secrecy, is digging its heels in.

Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge. He lectures at RMIT University, Melbourne and can be reached at: bkampmark@gmail.com.

March 7, 2014 Posted by | Civil Liberties, Corruption, Deception, Full Spectrum Dominance, Progressive Hypocrite | , , , , , | Leave a comment

Industry: biometrics business valued at $10 billion by 2018

According to a new report published by Global Industry Analysts, Inc., the President and CEO of biometrics firm SmartMetric posits that the industry will be worth $10 billion by 2018. 

SmartMetric, of course, “stands to capitalize significantly on this very large and fast growing market,” so perhaps that projection should be taken with a grain of salt.

But specific figures aside, the industry is undoubtedly booming, and in large part due to US military and law enforcement biometrics programs.

The FBI’s Next Generation Identification biometrics effort, housed in the Center for Biometric Excellence at the FBI-DoD operated Biometrics Technology Center, is the largest domestic operation. Local law enforcement are increasingly also using advanced biometric monitoring equipment, including face recognition and iris scanners.

If you are worried about how powerful biometrics technologies might be used in your city or state, click here to find out how to get involved at the local level to ensure police transparency and democratic accountability.

On the Wish List from the Boston Bombings – The Israelization of America

April 17, 2013 Posted by | Civil Liberties, Full Spectrum Dominance, Timeless or most popular, Video | , , , , , , , | Comments Off on Industry: biometrics business valued at $10 billion by 2018

FBI Sued for Info on Supersnooping Program

By RYAN ABBOTT | Courthouse News | April 10, 2013

WASHINGTON – The FBI refuses to provide information on a massive biometric identification database that can identify noncriminal civilians through iris scans, DNA, and facial and voice recognition, a watchdog claims in court.

The Electronic Privacy Information Center, or EPIC, sued the FBI in Federal Court, claiming that the bureau identified more than 7,000 pages of responsive records, but won’t release them.

EPIC claims the FBI began posting details on its website about its biometric identification system, known as Next Generation Identification (NGI), in 2009.
“When completed, the NGI system will be the largest biometric database in the world,” EPIC says in its complaint. “The vast majority of records contained in the NGI database will be of U.S. citizens.”

EPIC claims the NGI system will be able to identify people through fingerprints, iris scans, DNA profiles, voice identification profiles, palm prints and photographs, and will through facial recognition.

“The NGI database will include photographic images of millions of individuals who are neither criminals nor suspects,” the complaint states.

The Department of Homeland Security has spent “hundreds of millions of dollars” into the system, and wants to integrate it into state and local surveillance systems that may use other surveillance technology, giving the government the capability of real-time matching of live feeds from surveillance cameras, EPIC claims.

There are an estimated 30 million surveillance cameras in the United States, but not all of them will be used for law enforcement purposes, EPIC says in the complaint.

It claims private entities will also have access to the system.

EPIC claims the Orwellian system already is up and running in New York City, where police have been scanning irises of arrestees since 2010 and using a handheld device that “allows officers patrolling the streets to scan irises and faces of individuals and match them against biometric databases.”

At least 11 other states participate in the program: Arizona, Hawaii, Kansas, Maryland, Michigan, Missouri, Nebraska, New Mexico, Ohio, South Carolina and Tennessee, according to the complaint.

EPIC claims it submitted two FOIA request in 2012, seeking records on the FBI’s contracts with private contractors Lockheed Martin, IBM, Accenture, BAE Systems Information Technology, Global Science & Technology, Innovation Management & Technology Services, Platinum Solutions, the National Center for State Courts, and any other entities involved with the program.

The FBI said it found 7,380 pages of potentially responsive records but has failed to disclose a single agency record, the complaint states.
EPIC wants to see the records, and wants its FOIA fees waived.

It is represented by house counsel Ginger McCall. 

April 11, 2013 Posted by | Civil Liberties, Full Spectrum Dominance | , , , , , | Comments Off on FBI Sued for Info on Supersnooping Program

Another missionary in Africa: the Bill Gates myth

By Clairmont Chung* | PAMBAZUKA NEWS | 2012-05-24

This scathing indictment tracks the predatory career of Bill Gates and paints his high-profile philanthropy as capitalist adventurism that further impoverishes Africa.

WHO IS THE MAN?

Bill Gates is a walking talking Bill Gates commercial. It matters not that he retired from Microsoft. The Bill Gates image is still very serious business. Arguably his most famous quote is “Be nice to nerds. Chances are you’ll end up working for one.” He dresses the part: very casual with the preppy uniform of khakis and blue. His prepiness and nerdiness follow from his prep school background. But not too many nerds drop out of college, as Gates did. College is the place to find nerds; that’s where nerds get their revenge. Gates constructed the Microsoft company environment like a college campus. It’s part of the myth of that gentle, coed, carefree, nurturing, professorial and now the giving, philanthropist Bill Gates. It’s all very disarming.

The Bill and Melinda Gates Foundation (BMGF) leads the push to bring nutrition and health to Africa. But this move requires some scrutiny and a determination as to whether this is another image builder or worse: an attack by a modern day missionary on another unsuspecting indigenous population. Yes, some Africans are an indigenous population too.

Gates’ retirement [1] from Microsoft allows him time to focus more intently on his image, his sales pitch and Africa. By contrast, the ‘Red’ campaign of Gap, Apple and a few other retailers, requires you buy the product to contribute to fighting AIDS, malaria and tuberculosis in Africa. The emphasis is always on buying and selling, not on the disease. So, if you buy a pair of Gap jeans with the red label, a portion of that money goes to the fund. The project, founded by U2’s Bono, is intended to capitalize on what we do anyway – buy stuff. Generally, no one argues against helping Africa, right? But with all the riches these corporations and individuals earn, why do we still have to buy something before they give something? Much of these earnings were as a result of raw materials sourced in Africa: even its music. Unlike Red, Gates requires no purchase from Microsoft, at least not directly. But we can’t separate Gates from Microsoft and its products. Moreover, Microsoft’s operating system is still the most popular, and for good reason, so we don’t have as much choice as we think. We are locked into buying MS DOS. It’s like English in the business world: the official language. Bill Gates knows this. He ‘engineered’ it.

In Africa, there is no need to buy raw material. You simply dig it up, add value, and sell it. This was once done to its indigenous inhabitants. As Arundhati Roy assessed foundations,

“Their enthralling history, which has faded from contemporary memory, began in the US in the early 20th century when, kitted out legally in the form of endowed foundations, corporate philanthropy began to replace missionary activity as Capitalism’s (and Imperialism’s) road opening and systems maintenance patrol.” [2]

Of note, Gap, like Apple, has been under scrutiny for its use of sweatshop labour. However, it has been reported that the clothing used in Gap’s Red promotion is now made in Lesotho (Africa) and not the cheaper China. Gates seems to want to distance his image from the carnage of capital greed by insightfully focusing on software. Perhaps his reasoning was that he would not be responsible for the slave-like exploitation of mostly women and sometimes children, who build hardware for Apple and others in China, or those children digging for gold and coltan in central Africa. The latter two are essential metals used in circuit boards for hardware. This is misguided. Neither a focus on software nor resignation from his baby, Microsoft, could cover the trail. Like banks and insurance companies that financed the flow of human cargo from Africa and claim they did nothing wrong, the builder of operating system software that drives the machines that use our exploited resources and now track our movements and speeches of dissent should not be allowed to claim innocence.

Bill Gates should not be allowed to say he only builds operating systems. In a racist criminal justice system, the legislators who passed the laws, the police who make the arrest, the prosecutors who make the charges stick and even the defense attorneys who seem not to care, need to acknowledge culpability in a system out of control. All actors mentioned purport to do good, as Bill Gates now promises. They all claim to fight evil: crime on one hand, starvation and disease on the other.

Africa does not need this kind of charity. It needs equality in trade and the exchange of leading technology. Instead, Gates, the world’s foremost technologist, brings experts on seeds and vaccines.

Contrary to popular belief, Bill Gates never invented anything. The real invention is the public belief in Bill Gates as the self-made mogul. He started with a ‘gift’ from IBM of the DOS platform. For that platform he adapted the MS-DOS system that operates all personal computers (PCs). Even the term personal computer really means operated by Microsoft DOS. This is so even if your ‘personal’ computer happens to be an Apple or using another operating system like Linux. Unless it’s Microsoft, it is not personal. To be a personal computer, a PC, it has to have a Microsoft DOS operating system. It’s not only the most widely used system, its personal.

It’s important to understand how these systems work before we look at what he is doing in Africa. Of course, Bill Gates is not alone. It’s a scorched earth policy, from the business culture that dominates the US landscape. It’s like the use of napalm and Agent Orange in Vietnam, when the intent was mass defoliation of all flora, including food crops, Microsoft used all kinds of tactics, some unlawful, to grab its market share at the expense of any other competitor irrespective of any benefit to the consumer. In Vietnam, Agent Orange led to deforestation; the loss of crops led to losses in wildlife and livestock and an environmental disaster. Eventually, a literally scorched earth would result and starvation, death; victory would follow. Naturally, if you destroyed everything, survivors would need you to rebuild. This is the plan of an empire.

COMING TO A COURTROOM NEAR YOU, THE WAR FOR THE MEANS OF PRODUCTION

Gates’ victories were not a war of nerds but one of lawyers. Gates in a 1994 Playboy [3] interview explained,

“Our restricting IBM’s ability to compete with us in licensing MS-DOS to other computer makers was the key point of the negotiation. We wanted to make sure only we could license it. We did the deal with them at a fairly low price, hoping that would help popularize it. Then we could make our move because we insisted that all other business stay with us. We knew that good IBM products are usually cloned, so it didn’t take a rocket scientist to figure out that eventually we could license DOS to others. We knew that if we were ever going to make a lot of money on DOS it was going to come from the compatible guys, not from IBM. They paid us a fixed fee for DOS. We didn’t get a royalty, even though we did make some money on the deal. Other people paid a royalty. So it was always advantageous to us, the market grew and other hardware guys were able to sell units.”

Part of this revelation is the importance of hardware ‘guys’ to the operation. It is not a separate exercise. What he neglected to explain was the enormous amount of litigation that accompanied and solidified this position and the almost continuous war that has followed this policy.

The Federal Trade Commission launched an investigation into Microsoft’s antitrust violations, only to seemingly lose steam and give up. Antitrust claims are simply claims that one company is attempting to kill off the competition. The Department of Justice, no less, then took up the fight and eventually settled for several hundred million dollars in fines. All during this time there were numerous lawsuits from wronged developers to burned competitors and even employees. This was some potent napalm. In Vizcaino v. Microsoft, 97 F.3d 1187 (9th Cir.1996), the court ruled against Microsoft and ordered it to pay benefits to workers who were denied benefits on account of their incorrect classification as independent contractors as opposed to employees. Welcome to our world.

i4i, of all the names, a software developer, filed a patent infringement suit and won against Microsoft. Microsoft refused to pay. Meanwhile, based on the stolen patents, Microsoft developed a replacement. Microsoft appealed to the highest court in the land. The United States Supreme Court ruled against Microsoft and ordered it pay the developer. Uniloc, Alcatel, and The Commonwealth of Massachusetts are just some of winners against Microsoft and its intent on domination. But they are still too few. Meanwhile, numerous claims have been buried under the costs of litigation and never came to light. I could go on forever listing claims against Microsoft for patent and business infringement, but you can use its search engine to find more. Of note the European Union (EU) fined Microsoft $1.4 billion for its anti-competitive practices. But these fines amounted to slaps on the wrist, as Microsoft continues in its scorched earth policy and more suits are being filed as well as patents being bought as we write.

In a practice known as defensive patenting [4], large companies like Microsoft are buying-up existing patents and seeking new ones to use as a basis to defend or attack in the event of war against their competitors. These patents serve no other useful purpose. The design is rarely manufactured. These patents, some ancient, are bought or brought with the idea that something in their intended use might resemble that of a new patent or one in the future and therefore form a basis to make a claim that it is stolen from Microsoft. If you develop a computer related patent, it is very likely that Microsoft owns one just like it, or partially like it, and can mount an attack against you based on that patent.

COMING TO AFRICA IN A TEST TUBE

It is with this background to his rise in wealth that Bill Gates launched the Bill and Melinda Gates Foundation, with its focus on Africa. Like a good missionary, he does not come empty-handed. He has brought experts and seeds. It’s worth noting that the man Gates hired to help oversee his Africa sojourn is former Monsanto Vice President, Robert Horsch. Gates has invested heavily in Monsanto [5]. It would be an irony, except it is so serious that Monsanto was the company that developed Agent Orange. The effect of that deadly chemical is still affecting Vietnamese people and American soldiers forty years later. It is the progeny of that science that led to Roundup [6], Monsanto’s world-renowned weed killer and killer of several other things. Horsch was a leading figure in developing Monsanto’s genetically modified seeds that were resistant to its own herbicide and pesticides and are now earning Monsanto billions in royalties. They have patented these seeds, which can cross pollinate and colonize existing seed and farms. In America’s Midwest, farmers find their fields filled with a corn they did not plant. […]

We know what happened in Vietnam. The people resisted imperialism and drove the French, first, and then the full might of the US military out of their country. So it is in this context that you must view Gates’ approach to spreading his software and now his seed money in Africa. Like Monsanto’s plan to use genetically modified organisms (GMOs) and pesticides to become the dominant if not the sole producer of seed and food, Gates routinely violated antitrust and patent and other laws to achieve the goal of destroying all weeds (all rival software). His new hire, Horsch, will serve as senior program officer and will apply the GMO technology toward improving crop yields in regions including sub-Saharan Africa, where the foundation recently launched a major drive in collaboration with the Rockefeller Foundation.

Equally misguided is the Foundation’s approach to disease. Malaria and HIV appear to be its focus in the development of vaccines. A cursory look at the history of vaccines will reveal its inherent volatility and high rates of failure. Many of these health issues are really wealth issues. By wealth I mean the means to eat a balanced diet. I maintain that Africa’s problem is one of poverty: its inability to provide regular balanced meals to all of its people. Its greatest epidemic is poverty. Find a vaccine for that. How is it that the near richest man, and the smartest nerd, on the planet cannot see the need for an infrastructure that would lead to adequate supplies of food and water? Instead, he focuses on experimenting with dangerous chemicals and more dangerous genes, purportedly to increase yield.

Out of the other side of his mouth he’s decreasing population. F. William Engdahl quotes Gates’ 2010 TED speech where Gates declares, “First we got population. The world today has 6.8 billion people. That’s headed up to about 9 billion. Now if we do a really great job on new vaccines, health care, reproductive health services, we lower that by perhaps 10 or 15 percent” [7]. Engdahl asserts that studies show that the chemicals used in the plan reflect reduction birth rates and that the Rockefeller Foundation has been involved with eugenics for some time. Its partnership with Gates and AGRA [8] is precisely for that stated purpose.

Gates sees the need, but the way he wants to fill it is in the mistaken belief that GMOs will provide the high yields to feed Africa and in the meantime he would vaccinate against diseases. Simultaneously, corporations like Monsanto and investors like Gates would reap billions in royalties from the use of its seed. The same GMOs banned by the European Union are acceptable in Africa. The result would be a monoculture that would eliminate centuries of farm practices and seed diversity that date back before the Bible and was partially disrupted by that other foreign intervention: the slave trade. Moreover, the colonialism that followed wanted cocoa, coffee, and cotton. These are not products that find their ways onto the plates of Africans. Stolen human resources along with forced agriculture for the European market set the stage for the shortages we find today.

Jonas Salk, credited with developing the Polio vaccine, when asked who owned the patent, is said to have responded, “There is no patent. Could you patent the sun?” [9] Gates and Monsanto have succeeded where others have failed. If you agree that the seed requires light to grow, preferably sunlight, likewise GMO seed, requires Monsanto’s permission and conditions for use; therefore, they control seed. They are the sun. They may not have patented the sun, but they patented the next best thing: control of the rights to whom, and in what conditions, their seed will access the energy of sun in order to grow. Vandana Shiva [10] refers to Monsanto’s actions as the colonization of seed.

I am no defender of patents and copyright. It’s just another tool to consolidate creativity in the hands of a few. But that is another blog. These empires, like Microsoft and Monsanto, are built on patents: on ownership, including ownership of the means of production. They no longer need to own factories. They only need to own the rights to what the factories produce. Observers like F. William Engdahl have noted that vaccinated children who drink water contaminated by feces are no healthier than they were before the vaccine. Providing that these untested vaccines are safe. Instead of cleaning up the water and sewage systems, they seek to compromise them even more by the use of pesticides and fertilizer needed for their push in agriculture.

“Life is not fair; get used to it.” Bill gates

As if Gates and Monsanto are not sufficient adversaries, President Obama recently appointed a former Monsanto CEO as senior advisor to the Commissioner of the Food and Drug Administration (FDA). Michael Taylor’s addition is in the context of the US governments plan Via AGRA (two words) to push its policies in Africa. Of course the FDA has refused to ban GMOs in the US and has refused to require foods be labeled, if containing GMOs. Gates is indeed visionary. He has singlehandedly determined the importance of food. It matters not that he could have asked any African child.

But this is a warning to the rest of us. The only other land and space available for full colonization is the Amazon rainforest. It won’t be around for long. But that is another blog. There is the Canadian Tundra and Mars, but first things first. Given the bad press and attention directed at the Amazon, Africa seemed the place with the most land lying seemingly unused. Governments have launched a campaign of terror to remove residents from lands they have occupied since before Columbus was conceived, let alone Microsoft. Though I do not hold Gates responsible for every peasant chased off land farmed for countless moons, I do blame him for adding to the hysteria of the land grab. His mere presence forces up the price of land. What one once farmed for free, soon one will not be able to farm for any money. But if you desire, there will be jobs on the new farm.

AN ALTERNATE CHEMICAL SOLUTION

Guyanese author Harry Narain wrote about high yield imported paddy rice in his collection of short stories, “Grass Roots People” [11], set in 1970s Guyana. The yield was so high that it bent the stalks lower to the ground than normal and ripened faster. The paddy was too heavy. Any rain would mean the end. It ripened so fast that there was not enough time to wait for the government loaned combines to get to his farm. Without money to hire a private combine, the rice crop would die in the field along with the farmer’s dreams of a pair of track shoes for his boy to play sports, earrings his little girl begged for, and a fridge for his wife. The yield was never so high again.

Despite and in spite of all the history and facts on Gates, there are still people who are going to say that Africa is in need and if Gates wants to contribute he should be allowed to do so. They will add that it’s people like this writer who have no money to contribute who are always trying to stop well-meaning people; and finally, Africa is on the rise as a result and here comes another no gooder, a crab, to pull the beneficiaries back down. It’s always the same arguments, on both sides. But facts are difficult to controvert. Denial is a sweet space to reside. No one comes to kick you out of there.

Under the cover of the foundation, Gates moved from paying little tax to paying no tax. That notwithstanding, there are a few things he can do for me. He must relinquish all his shares in Microsoft and donate half to Wangari Maathai’s Green Belt Movement. He must remove his two executives from AGRA’s board. He must distribute the rest of the shares among those families in China whose children jumped to their deaths from the Foxconn [12] factory dorm while employed in making things for us that included his friend Steve Jobs’, ‘I’ stuff. He must denounce child labour. He must lobby Microsoft to withhold software from companies who use slave-like and sweatshop labor for their products. He must divest from Monsanto. Oh! And endorse the Buffet Plan to pay more taxes for himself and Microsoft before he divests his shares and Buffet transfers all his shares to the BMGF. Even Buffet has said that 30 percent is not enough. I’ll stop there for now. I shouldn’t have to tell him everything. He should be thinking for his damn self.

On Buffet, the New York Times [13] recently reported Buffet’s increased stake in Wal-Mart and that it came just before the same paper published detailed allegations that Wal-Mart executives bribed retailers in Mexico to facilitate its expansion there. Was this mission Wal-Mart’s or Buffett’s or Berkshire Hathaway’s? In 2011, he gave $1.5 billion of his BerkshireHathaway [14] stock to the BMGF as part of a plan to transfer the majority his wealth to the foundation. This means little or no taxes.

Oh, Bill! When you talk to Buffet tell him that giving his wealth to your Bill and Melinda Gates Foundation will not absolve him, either. Tell him he would not be able to hide behind Berkshire Hathaway, Inc., the hedge fund he presides over. Smaller investors pool resources in a hedge fund for larger and more lucrative investments. However, as its name suggest, the Hedge fund is simply a hedge, a fence, between the money and the exploitation. Capitalism has not yet found a way to increase earnings without exploiting free or near free labour [15]. Wal-Mart’s record on wages and union busting is notorious. [16] It does not matter how prestigious sounding the name of the high and growing hedge between money and poverty. What Africa needs, finally, Brother Bill, is for you to get us some agent orange from your friends at Monsanto. So we can take care of the hedges ourselves.

* Clairmont Chung is a lawyer, consultant, filmmaker and arts critic. His latest film is a documentary, ‘W.A.R. Stories: Walter Anthony Rodney’. He edited a book of the interviews done in making the film, which is due out in October 2012 from Monthly Review Press entitled, ‘Walter Rodney: A Promise of Revolution’. Chung tours with his film and maintains a small practice in New York and New Jersey. He is writing a book on the legal history of Africans in the ‘New’ World up until the Wars on Drugs and Terror.

* Please send comments to editor[at]pambazuka[dot]org or comment online at Pambazuka News.

END NOTES

[1] Gates retired as CEO in 2008. He has not sold his shares in the company and until that happens he has more than a nominal interest in Microsoft. The continued association with him and the brand is as strong as ever. When you see him, you don’t think foundation. You think Microsoft. His transition from Microsoft to the Foundation may seem as a sudden change to some. But if you understand Gates, and the really wealthy, nothing is sudden and rarely anything changes except the increase in wealth. It’s always about the sales plan which is to get it for free, or close, and sell high.

[2] Arundhati Roy, “Capitalism: A Ghost Story: (Rockefeller to Mandela, Vedanta to Anna Hazare…. How long can the cardinals of corporate gospel buy up our protests?)” Outlook India, March 26, 2012

[3] The Bill Gates Interview, 1994, Playboy reprinted on About.com

[4] Defensive patenting is not a practice limited to Microsoft. But they have been one of the most ardent collectors. The Rt. Hon. Lord Justice Jacob in a 2006, UK Court of Appeal, case, Aerotel v. Telco, likened defensive patenting to an arms race that has spread worldwide.

[5] Maureen O’Hagan and Kristi Heim of The Seattle Times, Gates Foundation ties with Monsanto Under Fire from Activists, lists the investment as $US27.6 million.Though a small fraction of the BMGF’s $33 Billion endowment, it’s part of a plan to eventually transfer close to $US40 billion to the BMGF.

[6] Roundup is a widely distributed weedicide and herbicide against which Monsanto has developed GMO seeds that would resist Roundup and grow while weeds and non-Monsanto seed die. They went further and developed seed that would not grow unless sprayed with roundup. No one knows to what extent these seeds are distributed but Africa is being primed.

[7] F. William Engdahl ‘Bill Gates talks about ‘vaccines to reduce population” March 4,2010 Geopolitics and Geonomics

[8] Alliance for a Green Revolution in Africa (AGRA) describes itself as working on “integrated programs in seeds, soils, market access, policy and partnerships and innovative finance work to trigger comprehensive changes across the agricultural system” its Board includes two executives from the Bill and Melinda Gates Foundation and two from the Rockefeller Foundation as well as an assortment of dignitaries from the continent. It has a reputed budget of over US$400 million and has been operational since 2009.

[9] Johnson, George (November 25, 1990). “Once Again, A Man With A Mission”. The New York Times. Retrieved August 5, 2011

[10] Vandana Shiva has equated the colonization of the seed with the colonization of the future. She does not mean future colonization. She means your future is being colonized now.

[11] Narain, Harry, Grass Roots People, “A letter to the Prime Minister” (Casa de las Américas, Cuba 1981)

[12] The UK Guardian reported employees jumping from their dorm windows to their deaths rather than continue under the conditions in the Foxconn factories. Foxconn assembled goods for Apple and other prominent US companies. The owners placed nets around the building and had employees sign no-suicide clauses that absolved the company from suits filed by family members if anyone managed to succeed in killing themselves.

[13] David Barstow, The New York Times, April 12, 2012, Vast Mexico Bribery Case Hushed Up by Wal-Mart After Top-Level Struggle

[14] The Christian Science Monitor, July 8, 2011, Warren Buffett gives $1.5B in stock to Gates Foundation. The report described the gift as a plan to transfer the majority of his wealth to the BMGF. Buffet serves as trustee on the Board of the BMGF. Gates serves on the Board of Berkshire Hathaway. A real love affair has developed between the two.

[15] To be fair, neither has socialism found a way around cheap labor. Socialist governments have been as confrontational with unions as have capitalist, corporate, dominant governments. However, The basic needs of citizens appear best met through a socialist approach, while a market approach drives-up the cost of everything after forcing consolidation.

[16] See Huffington Post-Chicago Wal-Mart’s Union-Busting, ‘Preference For Poverty’ Described In Reader Interview, Updated May 25, 2011.

May 27, 2012 Posted by | Deception, Economics, Timeless or most popular | , , , , , , | Comments Off on Another missionary in Africa: the Bill Gates myth

Creating a Prison-Corporate Complex

Introduction

As cash-starved state governments scrape their way through this so-called recovery, they might as well hang signs with this message on their capitals: “Everything must go.”  States are hemorrhaging workers and selling off assets at a startling rate as they grapple with anemic tax revenues and dwindling federal dollars. So dire are the states’ economic woes that, in recent years, they’ve begun offloading a more unusual type of property: prisons.

That’s right — states are so broke they’ve resorted to selling off their correctional facilities (with the prisoners inside) as a way to cut costs and make ends meet. In 2011, for instance, Ohio sold one of its prisons for $73 million to the Corrections Corporation of America (CCA), the largest private prison company in the country. And make no mistake: CCA and its ilk are eager buyers. As reported in February, CCA sent a letter to 48 governors offering to buy — not just manage, but acquire entirely — prisons in their states. The company said it had earmarked $250 million for buying and running state-owned prisons as part of a “corrections investment initiative.”

But CCA, to borrow a trope from journalism, buried the “lede” in the governors’ letter. The real head-snapping revelation appeared in the third-to-last paragraph: in exchange for buying a state’s prison, CCA required that the state prison agency ensure that the prison remained at least 90% full. Translation: We’ll buy your prisons and keep ’em orderly and clean, so as long you keep the prisoners coming in.

This is just the latest episode in the decades-long takeover of the prison industry by private interests. Reagan’s “tough on crime” policies, as Michelle Alexander has written, caused spiraling incarceration rates, which in turn spawned a cottage industry of prison management companies looking to make a buck off the influx of inmates. CCA, for instance, has watched revenues grow by 500% in the past two decades.

Another growth industry in our Age of Incarceration is prison labor, putting inmates to work making everything from uniforms to furniture for a few cents an hour. As historians Steve Fraser and Joshua Freeman explain, prison labor has a long and sordid history that should make us anxious indeed for our own degraded economic moment.  Leasing prisoners to companies at wages from hell is a “Yankee invention” dating back almost 200 years that was modern then and, frighteningly enough, couldn’t be more modern today. – Andy Kroll

Locking Down an American Workforce
Prison Labor as the Past — and Future — of American “Free-Market” Capitalism

Steve Fraser and Joshua Freeman | TomDispatch | April 19, 2012

Sweatshop labor is back with a vengeance. It can be found across broad stretches of the American economy and around the world.  Penitentiaries have become a niche market for such work.  The privatization of prisons in recent years has meant the creation of a small army of workers too coerced and right-less to complain.

Prisoners, whose ranks increasingly consist of those for whom the legitimate economy has found no use, now make up a virtual brigade within the reserve army of the unemployed whose ranks have ballooned along with the U.S. incarceration rate.  The Corrections Corporation of America and G4S (formerly Wackenhut), two prison privatizers, sell inmate labor at subminimum wages to Fortune 500 corporations like Chevron, Bank of America, AT&T, and IBM.

These companies can, in most states, lease factories in prisons or prisoners to work on the outside.  All told, nearly a million prisoners are now making office furniture, working in call centers, fabricating body armor, taking hotel reservations, working in slaughterhouses, or manufacturing textiles, shoes, and clothing, while getting paid somewhere between 93 cents and $4.73 per day.

Rarely can you find workers so pliable, easy to control, stripped of political rights, and subject to martial discipline at the first sign of recalcitrance — unless, that is, you traveled back to the nineteenth century when convict labor was commonplace nationwide.  Indeed, a sentence of “confinement at hard labor” was then the essence of the American penal system.  More than that, it was one vital way the United States became a modern industrial capitalist economy — at a moment, eerily like our own, when the mechanisms of capital accumulation were in crisis.

A Yankee Invention

What some historians call “the long Depression” of the nineteenth century, which lasted from the mid-1870s through the mid-1890s, was marked by frequent panics and slumps, mass bankruptcies, deflation, and self-destructive competition among businesses designed to depress costs, especially labor costs.  So, too, we are living through a twenty-first century age of panics and austerity with similar pressures to shrink the social wage.

Convict labor has been and once again is an appealing way for business to address these dilemmas.  Penal servitude now strikes us as a barbaric throwback to some long-lost moment that preceded the industrial revolution, but in that we’re wrong.  From its first appearance in this country, it has been associated with modern capitalist industry and large-scale agriculture.

And that is only the first of many misconceptions about this peculiar institution.  Infamous for the brutality with which prison laborers were once treated, indelibly linked in popular memory (and popular culture) with images of the black chain gang in the American South, it is usually assumed to be a Southern invention.  So apparently atavistic, it seems to fit naturally with the retrograde nature of Southern life and labor, its economic and cultural underdevelopment, its racial caste system, and its desperate attachment to the “lost cause.”

As it happens, penal servitude — the leasing out of prisoners to private enterprise, either within prison walls or in outside workshops, factories, and fields — was originally known as a “Yankee invention.”

First used at Auburn prison in New York State in the 1820s, the system spread widely and quickly throughout the North, the Midwest, and later the West.  It developed alongside state-run prison workshops that produced goods for the public sector and sometimes the open market.

A few Southern states also used it.  Prisoners there, as elsewhere, however, were mainly white men, since slave masters, with a free hand to deal with the “infractions” of their chattel, had little need for prison.  The Thirteenth Amendment abolishing slavery would, in fact, make an exception for penal servitude precisely because it had become the dominant form of punishment throughout the free states.

Nor were those sentenced to “confinement at hard labor” restricted to digging ditches or other unskilled work; nor were they only men.  Prisoners were employed at an enormous range of tasks from rope- and wagon-making to carpet, hat, and clothing manufacturing (where women prisoners were sometimes put to work), as well coal mining, carpentry, barrel-making, shoe production, house-building, and even the manufacture of rifles.  The range of petty and larger workshops into which the felons were integrated made up the heart of the new American economy.

Observing a free-labor textile mill and a convict-labor one on a visit to the United States, novelist Charles Dickens couldn’t tell the difference.  State governments used the rental revenue garnered from their prisoners to meet budget needs, while entrepreneurs made outsized profits either by working the prisoners themselves or subleasing them to other businessmen.

Convict Labor in the ‘New South’

After the Civil War, the convict-lease system metamorphosed.  In the South, it became ubiquitous, one of several grim methods — including the black codes, debt peonage, the crop-lien system, lifetime labor contracts, and vigilante terror — used to control and fix in place the newly emancipated slave.  Those “freedmen” were eager to pursue their new liberty either by setting up as small farmers or by exercising the right to move out of the region at will or from job to job as “free wage labor” was supposed to be able to do.

If you assumed, however, that the convict-lease system was solely the brainchild of the apartheid all-white “Redeemer” governments that overthrew the Radical Republican regimes (which first ran the defeated Confederacy during Reconstruction) and used their power to introduce Jim Crow to Dixie, you would be wrong again.  In Georgia, for instance, the Radical Republican state government took the initiative soon after the war ended.  And this was because the convict-lease system was tied to the modernizing sectors of the post-war economy, no matter where in Dixie it was introduced or by whom.

So convicts were leased to coal-mining, iron-forging, steel-making, and railroad companies, including Tennessee Coal and Iron (TC&I), a major producer across the South, especially in the booming region around Birmingham, Alabama.  More than a quarter of the coal coming out of Birmingham’s pits was then mined by prisoners.  By the turn of the century, TC&I had been folded into J.P. Morgan’s United States Steel complex, which also relied heavily on prison laborers.

All the main extractive industries of the South were, in fact, wedded to the system.  Turpentine and lumber camps deep in the fetid swamps and forest vastnesses of Georgia, Florida, and Louisiana commonly worked their convicts until they dropped dead from overwork or disease.  The region’s plantation monocultures in cotton and sugar made regular use of imprisoned former slaves, including women.  Among the leading families of Atlanta, Birmingham, and other “New South” metropolises were businessmen whose fortunes originated in the dank coal pits, malarial marshes, isolated forests, and squalid barracks in which their unfree peons worked, lived, and died.

Because it tended to grant absolute authority to private commercial interests and because its racial make-up in the post-slavery era was overwhelmingly African-American, the South’s convict-lease system was distinctive.  Its caste nature is not only impossible to forget, but should remind us of the unbalanced racial profile of America’s bloated prison population today.

Moreover, this totalitarian-style control invited appalling brutalities in response to any sign of resistance: whippings, water torture, isolation in “dark cells,” dehydration, starvation, ice-baths, shackling with metal spurs riveted to the feet, and “tricing” (an excruciatingly painful process in which recalcitrant prisoners were strung up by the thumbs with fishing line attached to overhead pulleys).  Even women in a hosiery mill in Tennessee were flogged, hung by the wrists, and placed in solitary confinement.

Living quarters for prisoner-workers were usually rat-infested and disease-ridden.  Work lasted at least from sunup to sundown and well past the point of exhaustion.  Death came often enough and bodies were cast off in unmarked graves by the side of the road or by incineration in coke ovens.  Injury rates averaged one per worker per month, including respiratory failure, burnings, disfigurement, and the loss of limbs.  Prison mines were called “nurseries of death.”  Among Southern convict laborers, the mortality rate (not even including high levels of suicides) was eight times that among similar workers in the North — and it was extraordinarily high there.

The Southern system also stood out for the intimate collusion among industrial, commercial, and agricultural enterprises and every level of Southern law enforcement as well as the judicial system.  Sheriffs, local justices of the peace, state police, judges, and state governments conspired to keep the convict-lease business humming.  Indeed, local law officers depended on the leasing system for a substantial part of their income.  (They pocketed the fines and fees associated with the “convictions,” a repayable sum that would be added on to the amount of time at “hard labor” demanded of the prisoner.)

The arrest cycle was synchronized with the business cycle, timed to the rise and fall of the demand for fresh labor.  County and state treasuries similarly counted on such revenues, since the post-war South was so capital-starved that only renting out convicts assured that prisons could be built and maintained.

There was, then, every incentive to concoct charges or send people to jail for the most trivial offenses: vagrancy, gambling, drinking, partying, hopping a freight car, tarrying too long in town.  A “pig law” in Mississippi assured you of five years as a prison laborer if you stole a farm animal worth more than $10. Theft of a fence rail could result in the same.

Penal Servitude in the Gilded Age North

All of this was only different in degree from prevailing practices everywhere else: the sale of prison labor power to private interests, corporal punishment, and the absence of all rights including civil liberties, the vote, and the right to protest or organize against terrible conditions.

In the North, where 80% of all U.S. prison labor was employed after the Civil War and which accounted for over $35 billion in output (in current dollars), the system was reconfigured to meet the needs of modern industry and the pressures of “the long Depression.”  Convict labor was increasingly leased out only to a handful of major manufacturers in each state.  These textile mills, oven makers, mining operations, hat and shoe factories — one in Wisconsin leased that state’s entire population of convicted felons — were then installing the kind of mass production methods becoming standard in much of American industry.  As organized markets for prison labor grew increasingly oligopolistic (like the rest of the economy), the Depression of 1873 and subsequent depressions in the following decades wiped out many smaller businesses that had once gone trawling for convicts.

Today, we talk about a newly “flexible economy,” often a euphemism for the geometric growth of a precariously positioned, insecure workforce.  The convict labor system of the nineteenth century offered an original specimen of perfect flexibility.

Companies leasing convicts enjoyed authority to dispose of their rented labor power as they saw fit.  Workers were compelled to labor in total silence.  Even hand gestures and eye contact were prohibited for the purpose of creating “silent and insulated working machines.”

Supervision of prison labor was ostensibly shared by employers and the prison authorities.  In fact, many businesses did continue to conduct their operations within prison walls where they supplied the materials, power, and machinery, while the state provided guards, workshops, food, clothing, and what passed for medical care.  As a matter of practice though, the foremen of the businesses called the shots.  And there were certain states, including Nebraska, Washington, and New Mexico, that, like their Southern counterparts, ceded complete control to the lessee.  As one observer put it, “Felons are mere machines held to labor by the dark cell and the scourge.”

Free market industrial capitalism, then and now, invariably draws on the aid of the state.  In that system’s formative phases, the state has regularly used its coercive powers of taxation, expropriation, and in this case incarceration to free up natural and human resources lying outside the orbit of capitalism proper.

In both the North and the South, the contracting out of convict labor was one way in which that state-assisted mechanism of capital accumulation arose.  Contracts with the government assured employers that their labor force would be replenished anytime a worker got sick, was disabled, died, or simply became too worn out to continue.

The Kansas Wagon Company, for example, signed a five-year contract in 1877 that prevented the state from raising the rental price of labor or renting to other employers.  The company also got an option to renew the lease for 10 more years, while the government was obliged to pay for new machinery, larger workshops, a power supply, and even the building of a switching track that connected to the trunk line of the Pacific Railway and so ensured that the product could be moved effectively to market.

Penal institutions all over the country became auxiliary arms of capitalist industry and commerce.  Two-thirds of all prisoners worked for private enterprise.

Today, strikingly enough, government is again providing subsidies and tax incentives as well as facilities, utilities, and free space for corporations making use of this same category of abjectly dependent labor.

The New Abolitionism

Dependency and flexibility naturally assumed no resistance, but there was plenty of that all through the nineteenth century from workers, farmers, and even prisoners.  Indeed, a principal objective in using prison labor was to undermine efforts to unionize, but from the standpoint of mobilized working people far more was at stake.

Opposition to convict labor arose from workingmen’s associations, labor-oriented political parties, journeymen unions, and other groups which considered the system an insult to the moral codes of egalitarian republicanism nurtured by the American Revolution.  The specter of proletarian dependency haunted the lives of the country’s self-reliant handicraftsmen who watched apprehensively as shops employing wage labor began popping up across the country.  Much of the earliest of this agitation was aimed at the use of prisoners to replace skilled workers (while unskilled prison labor was initially largely ignored).

It was bad enough for craftsmen to see their own livelihoods and standards of living put in jeopardy by “free” wage labor.  Worse still was to watch unfree labor do the same thing.  At the time, employers were turning to that captive prison population to combat attempts by aggrieved workers to organize and defend themselves.  On the eve of the Civil War, for example, an iron-molding contractor in Spuyten Duyvil, north of Manhattan in the Bronx, locked out his unionized workers and then moved his operation to Sing Sing penitentiary, where a laborer cost 40 cents, $2.60 less than the going day rate.  It worked, and Local 11 of the Union of Iron Workers quickly died away.

Worst of all was to imagine this debased form of work as a model for the proletarian future to come.  The workingman’s movement of the Jacksonian era was deeply alarmed by the prospect of “wage slavery,” a condition inimical to their sense of themselves as citizens of a republic of independent producers.  Prison labor was a sub-species of that dreaded “slavery,” a caricature of it perhaps, and intolerable to a movement often as much about emancipation as unionization.

All the way through the Gilded Age of the 1890s, convict labor continued to serve as a magnet for emancipatory desires.  In addition, prisoners’ rebellions became ever more common — in the North particularly, where many prisoners turned out to be Civil War veterans and dispossessed working people who already knew something about fighting for freedom and fighting back.  Major penitentiaries like Sing Sing became sites of repeated strikes and riots; a strike in 1877 even took on the transplanted Spuyten Duyvil iron-molding company.

Above and below the Mason Dixon line, political platforms, protest rallies, petition campaigns, legislative investigations, union strikes, and boycotts by farm organizations like the Farmers Alliance and Grange cried out for the abolition of the convict-lease system, or at least for its rigorous regulation.  Over the century’s last two decades, more than 20 coal-mine strikes broke out because of the use of convict miners.

The Knights of Labor, that era’s most audacious labor movement, was particularly exercised.  During the Coal Creek Wars in eastern Tennessee in the early 1890s, for instance, TC&I tried to use prisoners to break a miners’ strike.  The company’s vice president noted that it was “an effective club to hold over the heads of free laborers.”

Strikers and their allies affiliated with the Knights, the United Mine Workers, and the Farmers Alliance launched guerilla attacks on the prisoner stockade, sending the convicts they freed to Knoxville.  When the governor insisted on shipping them back, the workers released them into the surrounding hills and countryside.  Gun battles followed.

The Death of Convict Leasing

In the North, the prison abolition movement went viral, embracing not only workers’ organizations, sympathetic rural insurgents, and prisoners, but also widening circles of middle-class reformers.  The newly created American Federation of Labor denounced the system as “contract slavery.”  It also demanded the banning of any imports from abroad made with convict labor and the exclusion from the open market of goods produced domestically by prisoners, whether in state-run or private workshops.  In Chicago, the construction unions refused to work with materials made by prisoners.

By the latter part of the century, in state after state penal servitude was on its way to extinction.  New York, where the “industry” was born and was largest, killed it by the late 1880s.  The tariff of 1890 prohibited the sale of convict-made wares from abroad.  Private leasing continued in the North, but under increasingly restrictive conditions, including Federal legislation passed during the New Deal.  By World War II, it was virtually extinct (although government-run prison workshops continued as they always had).

At least officially, even in the South it was at an end by the turn of the century in Tennessee, Louisiana, Georgia, and Mississippi.  Higher political calculations were at work in these states.  Established elites were eager to break the inter-racial alliances that had formed over abolishing convict leasing by abolishing the hated system itself.  Often enough, however, it ended in name only.

What replaced it was the state-run chain gang (although some Southern states like Alabama and Florida continued private leasing well into the 1920s). Inmates were set to work building roads and other infrastructure projects vital to the flourishing of a mature market economy and so to the continuing process of capital accumulation.  In the North, the system of “hard labor” was replaced by a system of “hard time,” that numbing, brutalizing idleness where masses of people extruded from the mainstream economy are pooled into mass penal colonies.  The historic link between labor, punishment, and economic development was severed, and remained so… until now.

Convict Leasing Rises Again

“Now,” means our second Gilded Age and its aftermath.  In these years, the system of leasing out convicts to private enterprise was reborn.  This was a perverse triumph for the law of supply and demand in an era infatuated with the charms of the free market.  On the supply side, the U.S. holds captive 25% of all the prisoners on the planet: 2.3 million people.  It has the highest incarceration rate in the world as well, a figure that began skyrocketing in 1980 as Ronald Reagan became president.  As for the demand for labor, since the 1970s American industrial corporations have found it increasingly unprofitable to invest in domestic production.  Instead, they have sought out the hundreds of millions of people abroad who are willing to, or can be pressed into, working for far less than American workers.

As a consequence, those back home — disproportionately African-American workers — who found themselves living in economic exile, scrabbling to get by,  began showing up in similarly disproportionate numbers in the country’s rapidly expanding prison archipelago. It didn’t take long for corporate America to come to view this as another potential foreign country, full of cheap and subservient labor — and better yet, close by.

What began in the 1970s as an end run around the laws prohibiting convict leasing by private interests has now become an industrial sector in its own right, employing more people than any Fortune 500 corporation and operating in 37 states.  And here’s the ultimate irony: our ancestors found convict labor obnoxious in part because it seemed to prefigure a new and more universal form of enslavement.  Could its rebirth foreshadow a future ever more unnervingly like those past nightmares?

Today, we are being reassured by the president, the mainstream media, and economic experts that the Great Recession is over, that we are in “recovery” even though most of the recovering patients haven’t actually noticed significant improvement in their condition.  For those announcing its arrival, “recovery” means that the mega-banks are no longer on the brink of bankruptcy, the stock market has made up lost ground, corporate profits are improving, and notoriously unreliable employment numbers have improved by several tenths of a percent.

What accounts for that peculiarly narrow view of recovery, however, is that the general costs of doing business are falling off a cliff as the economy eats itself alive.  The recovery being celebrated owes thanks to local, state, and Federal austerity budgets, the starving of the social welfare system and public services, rampant anti-union campaigns in the public and private sector, the spread of sweatshop labor, the coercion of desperate unemployed or underemployed workers to accept lower wages, part-time work, and temporary work, as well as the relinquishing of healthcare benefits and a financially secure retirement — in short, to surrender the hope that is supposed to come with the American franchise.

Such a recovery, resting on the stripping away of the hard won material and cultural achievements of the past century, suggests a new world in which the prison-labor archipelago could indeed become a vast gulag of the downwardly mobile.

Steve Fraser is Editor-at-Large of New Labor Forum, co-founder of the American Empire Project (Metropolitan Books).  He is, most recently, the author of Wall Street: America’s Dream Palace. He teaches history at Columbia University.

Joshua B. Freeman teaches history at Queens College and at the Graduate Center of the City University of New York and is affiliated with its Joseph S. Murphy Labor Institute. His forthcoming book, American Empire, will be the final volume of the Penguin History of the United States.

[Further Reading: For those interested in learning more about the history of prison labor and the convict-leasing system, we highly recommend three books that were crucial to us in writing this essay: Rebecca M. McLennan’s The Crisis of Imprisonment: Protest, Politics, and the Making of the American Penal State, 1776-1941, Alex Lichtenstein’s Twice the Work of Free Labor: The Political Economy of Convict Labor in the New South, and Douglas A. Blackmon’s Slavery by Another Name: The Re-Enslavement of Black Americans from the Civil War to World War II.]

April 19, 2012 Posted by | Civil Liberties, Corruption, Solidarity and Activism, Timeless or most popular | , , , , , | Comments Off on Creating a Prison-Corporate Complex