Occupy Forces Cancellation of Chicago G8 Summit

You may have already heard the news, but in case you haven't, The White House recently announced that the Chicago G8 Summit will be canceled on account of the Occupy Movement's incredible work organizing and planning resistance and demonstrations. Obama and company are moving the Global 1% summit to a remote location where masses of ordinary Americans won't be expected to show up and protest. The planners of the G8 are "cutting and running", so to speak, and changing their plans because of the resistance they expect to face if they "stay the course".

This should be seen as a victory for Occupy and the growing Left in the United States. And inasmuch as that is true, it should be seen as a serious defeat for Mayor 1% here in Chicago.

Rahm worked all of his Washington connections to bring NATO and the G8 to Chicago this Spring. At some point or other, it's likely that he used his leverage as former White House Chief of Staff to make a pitch to Obama something like the following: "Hey, trust me... bring the G8 to Chicago and I promise there won't be any fucking protests. And I'll find a way to raid the public purse to buy a bunch of riot cops and all the rest. Maybe I'll have to close a couple of libraries, schools and health clinics, along the way, but fuck 'em. So, what do you say?"

Obama, of course, said yes. And ever since Rahm public announced his plan to bring the G8 to town, he's been hammering away at anyone who's dared to question his decision. Of course, he never asked any actual Chicagoans whether they actually wanted to shell it out to throw a big party for the global 1%. But anyone who knows the Democrat Machine in Chicago knows that the Boss (whether its Daley or Rahm) simply does what the Boss wants around here. Asking the population what they need or prefer is not what the city government does in Chicago.

So, this time, Boss Emanuel decided that he wanted to throw a big party for the G8 on our dime. And he dug in his heels and used his command over the obedient City Council to force through anti-protest ordinances as well as measures that give him carte blanche to spend as much as he likes.

What's more, I think it would be fair to say that Rahm was excited about the whole thing. How could he not be? He and his minions planned and enthusiastically plugged it for months. He alone probably invested countless hours schmoozing with elites, chatting with millionaires, etc. to bring the representatives of the global 1% to town. Rahm recently said that "from city perspective, this will be an opportunity to showcase what is great about the greatest city in the greatest country." He was pumped.

But he didn't get his way. He lost. The G8 will not be coming to Chicago. Rahm's got to be pissed.

Of course, the ruling class politicians who organize these sorts of summits have an interest in concealing the nature of their decision to move the Summit. But try as they might, they can't fully conceal their intentions since circumstances make it so obvious that they're trying to avoid facing any public resistance to their agenda. Take, for example, the following statement from the White House:

"To facilitate a free-flowing discussion with our close G-8 partners, the President is inviting his fellow G-8 leaders to Camp David on May 18-19 for the G-8 Summit, which will address a broad range of economic, political and security issues," the White House announced this afternoon.

Yes, they moved it to facilitate a "free-flowing discussion". Translation: they realized that if they held the protest in the second largest city in the US, a city with a growing Occupy movement, that there would be massive public protests decrying the presence of a small clique of elites making decisions behind closed doors that will have grave consequences for the global 99%. This kind of mass showing of grass-roots resistance to the domination of the 1% in global affairs would, of course, disrupt their capacity to have a smooth, "free-flowing discussion." Better, then, to have it out in the middle of nowhere (see below).

That way there will far less public resistance to what is, quite obviously, a democratically illegitimate global organization.

But there's another dimension here is unlikely to be publicly addressed by Obama's White House. Let's not forget that it's an election year. Obama and the Democrats will be doing their best to try to rhetorically lull those sympathetic to the Occupy movement into voting for them. They will try to pose as the "party of the people", as the party that stands for taxing the rich and fighting for the 99%. But it's rather hard to do this effectively if there are massive protests underway in the President's hometown, especially since the very people on the streets will be the target of Democrat campaigning. A massive grass-roots confrontation has the potential to look rather bad for the man who desperately wants to position himself as the "President of the people" despite all of the evidence to the contrary.

So, once it became clear that the organizing efforts underway meant massive, large protests against the G8, Obama decided to renege on his decision.

Whatever he says publicly, we know that Rahm can't be pleased with this decision. Even the Boss of the Chicago Machine can be forced to relent when enough pressure is generated from below. We can take him on and win. He's not invincible. When we stand together and threaten to build mass movements that draw the majority of the population into active resistance, our leaders cannot fail to take notice.

This should be a lesson to everyone in Chicago fighting back against injustice and domination from above. We can stand together and defeat Rahm. We can challenge him and force him to back down. Because when the 99% stands together, it has a social power like no other. We--the 99%--do the work, we make this society run. When we are mobilized and organized, we have the ability knock our leaders off their thrones and force them to take notice.

Of course, in the midst of our victory celebrations, we have to be well aware of the challenges ahead. NATO, for the time being at least, is still scheduled to come to town. And, for all intents and purposes, NATO represents the exact same interests as the G8 (even the interests of French capitalists are served by NATO and they would be generally hard pressed to say otherwise). Still, we have a lot of work to do, probably no more or less than we had before us when both the G8 and NATO were slated to come.

But this victory has the potential to be a galvanizing factor as we move closer to May. It shows that we can win, it shows that what we do matters. Activists far and wide should seize upon the recent news to build the self-confidence of the movement and push participants to be even more ambitious in their demands. If we can win on this issue and force the President to relent, we can win on many others. We're just getting started.

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Is the Property of the 1% Legitimate?

The dominant ideology in our society would have us believe that whatever results from capitalist markets is presumptively just. The idea is that whatever the 1% gets from the market is authoritatively theirs. Thus, pre-tax income appears as something "natural" and taxation appears as something alien, which swoops in from the outside to "intervene" and "interfere" with the "natural" workings of the market.

Some accept this ideology, even as they call for increased taxation on the 1%. While arguing that the present wealth of the 1% is excessive, many continue to assume that pre-tax incomes in capitalist societies are in some sense "natural" and presumptively legitimate. This is expressed in the following thought: "maybe the rich should be taxed more heavily, but at least some of they have is legitimate theirs."

Now, within the horizons of this liberal perspective, I certainly agree that the wealth of the 1% is in some sense "excessive". I also agree that unmet human needs override any ownership claims that might be invoked to argue against re-distributive taxation in a capitalist society. But this concedes far too much to the rich and powerful. We shouldn't just say that the wealth of the 1% is excessive; we should say that it is illegitimate through and through.

To talk of redistribution, after all, is to talk of altering some prior production and distribution of goods. But how does that prior production and distribution come about? And what makes it legitimate in the first place?

It's obvious that the 1% has a vested interest in making sure that the majority of the population think that their wealth is legitimate. It hardly matters whether it's aristocratic privilege, family lineage, racial or sexual supremacy that makes a group dominant. Throughout history dominant groups always try to preserve the basis of their dominance.

Now, dominant groups have at least two (analytically distinct, but in practice interwoven) means of maintaining their dominance. The first is obvious. Dominant groups typically monopolize control of the means of exerting physical repression. If you push too hard against the status quo, dominant groups will always (if possible) push back with physical repression in order to protect their dominant status. This explains the violent force used against the Occupy movement all over the country.

But dominant groups can't maintain their dominance through naked violence alone, at least not for long. Thus all ruling classes are compelled to stabilize their rule by telling stories to the ruled about why their power and privilege is legitimate. As Marx and Engels put it in The German Ideology:

The ideas of the ruling class are in every epoch the ruling ideas, i.e. the class which is the ruling material force of society, is at the same time its ruling intellectual force. The class which has the means of material production at its disposal, has control at the same time over the means of mental production, so that thereby, generally speaking, the ideas of those who lack the means of mental production are subject to it. The ruling ideas are nothing more than the ideal expression of the dominant material relationships, the dominant material relationships grasped as ideas; hence of the relationships which make the one class the ruling one, therefore, the ideas of its dominance.

Think of the "divine right" of Kings, the "positive good" doctrine that purported to justify the dominance of Slave owners, the so-called "civilizing mission" that justified colonial domination, or the supposedly "scientific" expertise that justifies the power of bureaucracies. The stories the rich tell about the supposed legitimacy of their wealth are part of a long tradition of lying to the masses to the protect privilege and power of the few.

What stories do the rich tell in our society? By my count there are at least four. Now, it's worth noting that growing numbers of people don't need to be told that these stories are bogus. Millions of people are coming around to the idea that the wealth of the 1% isn't simply excessive, but fundamentally illegitimate. Still, it's worthwhile from time to time to puncture the self-image and self-justifications of those in power. It's worthwhile to go through and debunk the familiar myths handed down from above that purport to show us that the wealth of the ruling class is legitimate.

One common story is that the members of the 1% deserve what they have because they earned it. More precisely, they deserve what they get from the market because it represents their just reward for productive activity. According to this story, the market rewards productive contributions. Thus, the rich deserve their wealth because it must be their proportional reward for their productive contributions to society. Unfortunately this is nothing but a fairy tale. Set aside the bank bailouts showered upon failing financial elites. Capitalists—even the ideal capitalists of the textbook—earn from owning, not from working. The pure capitalist makes precisely zero productive contributions to society and does no productive labor. They pay others to do it and reap the rewards of what they produce. So it can't be that the profits raked in by capitalists are what they deserve for productive contributions to society, since they need not do anything productive.

The second story, related to the first, is that the wealth of the rich is legitimate because it represent their reward for having taken bold risks. The thought is this: capitalists assume risk when they invest their money, so whatever they get in profits must be legitimate. They could have lost it all, but they didn't, so what they get is legitimately theirs. But though this story is told often enough, it is actually quite obscure, even by its own lights. And then there's the fact that workers are forced to assume all of the risk (and then some) assumed by their employer, even though they are entitled to precisely zero of the benefits if the risk pays off. This story is ultimately unconvincing. Rather than proving that the wealth of the 1% is legitimate, upon reflection it undermines the legitimacy of their riches.

But there's a third story that we've yet to consider. That story is that the wealth of the 1% is legitimate because it arises from nothing except free market exchanges. If a voluntary exchange between two consenting adults is unobjectionable, and the accumulation of wealth by the rich arises from nothing but consensual market transactions, it must follow that their wealth is legitimately theirs. And anyone who disagrees must think that a third party should paternalistically "prohibit capitalist acts between consenting adults". But that can't be right. So the wealth of the 1% is legitimate.

Though this argument is rhetorically powerful at first glance, it falls apart rather quickly on closer inspection. First of all, in order for anything to be transferred or exchanged legitimately, it has to already be legitimate property. The market can't create legitimate titles; it can only circulate existing titles. But how did unowned things come to be legitimate property in the first place? How did, for example, natural resources or large swaths of lame come to be private property? By what historical process did society's means of production come to be the private property at all? A quick glance at history shows that violence, brute force, conquest, war, genocide, colonial expropriation and slavery explain the origins of this property. This is what Marx called "primitive accumulation." Insofar as the wealth of the 1% rests on a history of violence and obvious injustice, it is illegitimate, even if acquired through "voluntary" exchanges.

But there's an even deeper problem with this argument. Even if the historical legacy of "primitive accumulation" didn't undermine the legitimacy of the origins of existing property, the idea that capitalism is nothing but an aggregation of genuinely "free" market transactions is ludicrous. Unequal relations of power are constitutive of market exchanges. The equality of citizens deliberative together in a democratic general assembly is never reproduced in the market place. If I, for example, gouge you for a bottle of water during a drought, and you relent because there's nothing else for you to do but cough up $200 for the water, that is a "free" market exchange. You consent to buy the water and I consent to sell it. There are, to be sure, massive asymmetries of power between us, but the transaction satisfies the criterion of "consensual capitalist act between adults." But it is clearly illegitimate for me to profit from the misery and vulnerability of others. Less extreme cases bear the same problems. Workers, who by definition own and control no significant means of production, are forced to work for a capitalist to earn a living, even if they can choose which capitalist work for. But that mere fact gives capitalists a large degree of social power over workers. The labor contract struck between the individual, atomized worker and the employer, then, is hardly free or fair. But it fits the bill of "consensual capitalist acts between adults", because what other choice does the isolated, individual worker have except to consent to her exploitation so that she can earn a living? So much for the virtues of "free" market exchanges as a way of conferring legitimacy on the wealth of the 1%.

The fourth story is that the wealth of the rich is legitimate because it is necessary to produce the greatest overall amount of beneficial economic consequences for all. That is, massive wealth for the 1% is a necessary precondition for economic growth and prosperity. Without it, they would have no incentive to do all of the allegedly marvelous things that they do which, we're told, tend to produce jobs and prosperity for all.

For my money, this is by far the weakest argument of them all. As we've seen, capitalists don't need to do any work at all. They need not do anything productive to earn their profits. So, this argument doesn't even get off the ground, because it assumes that we actually need capitalists to have prosperity and a functioning system of social production. But the fact is that we don't. We do all the work: the boss needs us, but we don't need the boss.

The most obvious objection to this argument, however, arises out of the fact that we're in the midst of a protracted global economic crisis right now. And, perversely, profits have soared to record levels amidst sky-high unemployment and economic misery for the 99%. What's more, the misery of the 99% is directly tied to the record profits which have been largely reaped through bailouts and austerity. But this argument suggests that the cause of our misery is necessary to produce something the 99% does not presently enjoy, namely prosperity and economic security.

A more specific version of the above argument is that the wealth of capitalists is necessary to incentivize innovation. But this argument rests on nothing. It's not as if we have experimental data that prove that all non-capitalist means of generating innovations are flawed. Open-source software is an obvious counter-example, and there are too many others to name. Moreover, as I've already explained, capitalists don't actually do the innovating. That's what they pay R&D departments for (if, in fact, they pay them... often corporate R&D is public subsidized through universities). So the innovation incentive argument simply doesn't show us that the wealth of the 1% is legitimate.

Things aren't looking so good for the idea that the wealth of the 1% is legitimate. It is being undermined daily. After all, the mere fact that the State has to resort to acts of violence to repress resistance and protest from below shows that it's ideological hegemony is fractured and incomplete.

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What's the Point of Education?

If you ask Chicago's Rahm Emanuel—known locally as "Mayor 1%"—the point of education is to provide for the specific needs of the owners of big corporate firms. The owners sketch up the job descriptions, they decide what will be produced, according to what modes of organization, when and where. Schools, then, are nothing more than publicly-subsidized training centers whose curriculum matches the fleeting demands of profit-hungry corporate leaders.

In their classic, must-read book on the topic, Schooling in Capitalist America (2011, Haymarket Re-issue), radical economists Samuel Bowles and Herbert Gintis elaborate more on this perspective:

How can we best understand the relationship between education and the capitalist economy? Any adequate explanation must begin with the fact that schools produce workers. The traditional theory explains the increased value of an educated worker by treating the worker as a machine. According to this view, workers have certain technical specifications (skills and motivational patterns) which in any given production situation determine their economic productivity. Productive traits are enhanced through schooling...

...The motivating force in the capitalist economy is the employer's quest for profit. Profits are made through hiring workers and organizing production in such a way that the price paid for workers time—the wage—is less than the value of the goods produced by their labor. [If the price paid for the worker's time (i.e. the wage) wasn't less than the value of the goods the worker produces during her shift, the boss would have no reason to hire her in the first place -t]...

...Schools produce workers...Schools foster types of personal development compatible with the relationships of dominance and subordination in the economic sphere, and finally, schools create surpluses of skilled labor sufficiently extensive to render effective the prime weapon of the employer in disciplining labor—the power to fire and hire.

In short, according to the 1%, the basic goal of education—which includes everything from curriculum to methods of student and teacher evaluation—should be to foster and sustain corporate profitability. Considerations such as human development and flourishing are irrelevant. Developing the talents of students and enabling them to lead free lives doesn't even enter into the picture.

Moreover, to the extent that music, arts, and the humanities fail to provide corporate owners with the sorts of traits that the 1% is looking for, they should be completely eliminated. (Although they're less commonly the object of direct ruling-class ire, I note that the natural sciences are distorted and abused by this educational program as well—especially on the question of how grant money is allocated and so forth). This is just a way of saying that the knowledge and skills woven through disciplines such as literature, philosophy, history, art, anthropology, languages, culture and so on are—as far as the 1% is concerned—useless at best, and dangerous at worst. What's needed, instead, is a surplus of people who empathize with orders, defer gratification, respect the authority of bosses, come to work on time, who possess the technical skills needed to do whatever the boss needs them to do. (For more on this see this (esp. 6:40-onward) as well as this (as yet unreleased) book Capitalism and Education)

***

It's clear that there is no space in this educational vision for the interests of educators, parents and students to be voiced. Their job is to take orders from above. The goals are set for them in advance. Their only use lies in efficiently maximizing those ready-made goals.

It comes as little surprise, then, that more and more of the people charged with running school systems and universities are drawn directly from the corporate world. For example, in the case of the Chicago City Colleges (which used to be called "Peoples' Colleges") a corporate business executive with no specific expertise in higher education, Cheryl Hyman, has been charged with overseeing their "reinvention." In this task, Hyman been assisted by a slew of corporate consultants. As the Reader reports:

[Hyman] was assisted by consultants from McKinsey & Company and the Civic Consulting Alliance (the consulting arm of the Commercial Club of Chicago) who worked, initially pro bono, to "dig into the metrics" with her. By midsummer she'd hired former McKinsey consultant (and Renaissance 2010 Fund official) Alvin Bisarya as vice chancellor of strategy and institutional intelligence. In March 2011, Donald Laackman, a principal at the Civic Consulting Alliance, was installed as president of Harold Washington College. And last January, McKinsey was awarded a half-million-dollar contract for work on City Colleges changes this year.

The idea is that educational institutions should be completely subordinate to, and take their orders from, corporate "experts". Accordingly, the "ignorant" public—students, teachers, and parents—have no meaningful role to play in determining how schools are run. After all, as far as the corporate "experts" are concerned, the students, parents and teachers are noting more than the passive objects of "reform" rather than agents whose interests the school system should serve. For those parents, students or teachers who dare to dissent from this ruling-class consensus, the reply—which is actually a threat—is something like this:

Look, if you're going to survive in this society, you need a job. But to get a job, you have to do what exactly we say. We—the "job creators"—decide what jobs there are and who gets them. If you disobey us, we'll freeze you out of the system and leave you with nothing. So it's either a life of obedience to ready-made goals and (if you're lucky) precarious employment, or a life of destitution and marginalization.

This goes for students and parents as much as it does for teachers. Students and parents are denied a voice and threatened with marginalization if they don't do what the system asks of them. And if educators themselves speak up and try to resist the corporate re-structuring of their curriculum, they are scapegoated, threatened, attacked and punished. Rahm Emanuel and his brutal assault on the Chicago Teachers Union is a case in point.

And, aside from the fact that teachers unions are the most powerful organized labor force in the contemporary United States today—which makes them a clear target for an employing class on a warpath to smash the union movement entirely—unionized educators are also in a position to resist commands from above demanding that they teach only what corporate leaders want them to teach. Hence, the corporate elites have a clear interest in bludgeoning,discrediting and otherwise attacking teachers unions.

The most perverse part of this is that ruling elites use the threat of unemployment to make it appear as if they're performing some kind of philanthropic service by using educational institutions to shoehorn people into low-paying, precarious jobs. By exploiting high unemployment and the economic misery of the 99% (caused by austerity and the global crisis—both forced upon us by the 1%), Rahm and his goons are attempting to sell themselves as "job-creating saviors" of the 99%.

But it's not hard to see through this sham, even by their own lights. If Boeing wants 100 more workers to enter the labor market today (because, say, they want to drive wages down in order to make hiring new people maximally profitable), there's no guarantee that they'll want those 100 people next year. Maybe they'll change their mind because their profit margins aren't high enough, or maybe they'll leave Chicago in search of a more easily exploitable labor force. Though educational institutions are being forced to serve corporate interests, it's not the case that corporate elites are being asked to reciprocate. There is nothing to stop corporations from benefiting in a one-sided way from public funds in the short-run, only to pack up and leave thousands unemployed at a later date.

***

Often, political struggles within the sphere of education are struggles over the question of access: who is granted access to which schools, who isn't, and why. The struggle over access is the struggle against school closures, against teacher layoffs, against tuition hikes and user fees. It is the struggle against a university system financed through the exploitative—and fabulously profitable—student loan industry. Traditionally, working class people and oppressed minorities were completely excluded from the university system. Struggles from below created inroads for previously excluded groups to get a foothold in the university system. But today, the ranks of those being entirely excluded is growing by the day as austerity causes living standards to plummet and tuition and fees to soar. The question of access is a key question. In the context of cruel regimes of austerity being imposed from above, it is perhaps the central question facing millions of ordinary people in the 99% right now.

But the question of access, taken by itself, is only one part of the struggle. After all, what is it that we are fighting to gain access to?

The only way to answer this question is to put forward a perspective on what the point of education is. We already saw the 1%'s answer: educational institutions should either be made to subsidize corporate profits or they should cease to exist entirely. But what kind of answer should the 99% give?

***

Human beings flourish when they are able to cultivate their talents and exercise their capacities for imaginative thinking and creative activity. Living a rich and meaningful life requires that we have the space to reflect and figure out who we are and what we really care about. Leading a free life means honing one's capacity for critical thinking—for seeing the world as it really is rather than the way our leaders want us to see it. Living a free life also means learning about our own history, that is, the often untold stories of groups women and men who struggled against forms oppression and exploitation in the past—in contrast to history-as-seen-from-above which focuses on the alleged "heroics" of a small group of "Great Men". These important—indeed necessary—goals can only be accomplished through education. I don't say that education is sufficient to accomplish these goals, since that would play into the hands of those who argue that teachers and educators should be made responsible for solving all the world's problems. The only way to fully realize human potential is to fight for a different kind of society—a socialist society—where the material conditions for human flourishing could be secured for all. Nonetheless, though hardly sufficient, I do claim that education is a necessary part of fully realizing the promise of such a society.

I stress that these goals I describe above are not "luxuries". They do not describe a life that should only be available to a select few. On the contrary, the goals described above speak to basic human interests that exceed the the narrow goals imposed on us from above by capitalism. As G.A. Cohen puts it:

We have needs beyond the needs to consume and these aren't recognized by capitalism. We have a need, for example, to develop and exercise our talents. When our capacities lie unused, they don't enjoy the zest for life that comes from having one's capacities flourish. People are able to develop themselves only when they get good education. But in a capitalist society, the education of children is threatened by those who would contort education to fit the narrow demands of the labor market....We shouldn't stake our children's future on the hope that the capitalist market will need what's good for them.

...There's a lot of talent in almost every human being. But in a lot of cases that talent goes undeveloped, because people lack the time, energy, resources and facilities to develop it. Throughout history, only a leisured minority has enjoyed this fully. And they did so (and continue to do so) on the backs of a toiling majority...

...The ruling class wants education to be geared toward restoring profitability to the system... But it's dangerous to educate the young too much, because they will become cultivated people who are likely to be less satisfied with the low-paying jobs the market offers them. This might create aspirations that capitalism can't match.... Therefore, people must be "educated to know their place"...

This is a powerful diagnosis of the problem and a vision for how things should be different. The most basic claim is that we shouldn't cater to the tendency in capitalism to view people only as sources of profit, and when they can't be profitably exploited, as redundant and expendable.

Even the members of the ruling class cannot deny the power of this argument. That is why, by and large, the arts and humanities are well-funded and relatively protected at elite colleges and universities. If Rahm and the 1% in Chicago are openly and publicly calling for the complete corporatization of the City Colleges—largely populated by working-class people of color, a large number of them recent immigrants—they are not suggesting that the University of Chicago be transformed into a training facility in which professors and administrators are the mere servants of corporate leaders.

Of course, there are trends—even in the halls of so-called "elite" institutions—toward corporatization. And they need to be rooted out, criticized and fought against. The systematic underfunding and debt-financing of graduate programs in music, creative writing, visual art and film (among other endeavors) is a grave problem even at the "top schools".

But it remains true that the "plan for transformation" of the City Colleges in Chicago—and elsewhere—evinces racist and anti-working-class assumptions on the part of those at the top.

After all, Rahm isn't sending his own children to the corporatized charter schools or public military academies that he favors as models for the Chicago Public School system. He sends his kids to an expensive private school where students have full access to art, music and other "luxuries". And we can bet that he isn't going to send his children to the City Colleges when they graduate from high school. So, for the children of wealth and power, there's one kind of education. But for the children of working class people—and especially working class people of color—there's another kind of education. For Rahm and his buddies, the people at the bottom should be "educated to know their place" so that they can effectively and willingly fill the role that the 1% has selected for them—whether it's as a temporary part of the corporate workforce or as member of the unemployed industrial reserve army.

***

There's a profound contradiction between what the capitalist system—premised as it is on profitability for the employing class—requires and what flourishing human beings require. As long as the basic priorities of society are determined by forces outside of our control, we will be faced with this contradiction. The proponents of the system as it is will say that education should be a mere means for efficiently satisfying ready-made goals determined by the employing class. Proponents of the human interests of the 99% will insist that education be part of putting ordinary human beings in a position to decide for themselves what the basic goals should be.

As long as the priority of the social system is shackled to the ready-made goal of profit maximization for the rich, it will always be possible to paint "non-productive" forms of knowledge as "useless", "irrelevant" or, at best, mere "luxuries" available only to the children of the rich. It will possible to make high-stakes testing and corporatized school structures look necessary and unavoidable.

But right now these market ideologies that are regularly used to legitimize the system are ringing hollow for millions of people. Masses of people rose up and took to the streets last Fall in the US because they are sick and tired of living underneath an economic and political system dominated by the 1%. The Occupy movement awoke a sleeping giant which, although disturbed from its slumber, has yet to realize the full extent of its power to change society. Millions of people are coming around to the idea that the system doesn't serve their interests—and they are hungry for alternatives. The only way to resolve the contradictions plaguing education in a profit-based society is to fight for a different kind of society—one in which the social forces of production are controlled democratically and made to work for human ends rather than for the iron laws of profit accumulation.

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Is the Wealth of the Rich Legitimate? Part 2

In a previous post I argued that the wealth of the rich (more precisely: of capitalists) could not be justified by reference to the principle that "each person deserves that amount of wealth that reflects her productive contributions". Capitalists need not do anything productive in order to be capitalists. The pure capitalist earns everything from owning and nothing from working (that is, to the extent that a capitalist can be said to earn from working, she is to that extent not a pure capitalist).

But, as I discussed in the previous post, this story about desert and productive contributions is only one among many. Another (perhaps the most popular?) story that's told to legitimate the wealth of capitalists is that their wealth is a reward for having taken bold risks. Or, put another way, since the capitalist risks her capital when she invests it in some business venture, she deserves exclusive rights to all of the returns above and beyond costs paid out for raw materials, wages for workers, etc.

This story is told so frequently that it almost seems odd to question its plausibility. But how plausible is it?

Let's try to first figure out exactly what its saying. Is it saying that people should be rewarded in proportion to how much risk they take on? That can't be right. That would mean that the riskier I behave, the more I should be rewarded (whether or not the risk pays off). But, of course, it's a fact about risks that they can turn out for better or for worse (otherwise they wouldn't be risks). Risks always involve some element of luck and chance wherein the risk could turn out badly. But nobody in their right mind would say that the mere fact that I've taken on some risk (whether or not it pans out) means that I should be rewarded. For example, no one would say that some particular capitalist, just because they take on risks, deserves a return on their investment. If I, for example, invest in a business that has a 10% chance of succeeding, and it doesn't succeed, nobody thinks that this entitles me a cash "reward" of any kind.

But if that's not what's meant by "reward for risk", what is? Perhaps what's meant is that the capitalist's riches are her reward for having taken a risk that ended up panning out. If I bet against the odds and win, then it looks like what I get is my reward. Why not say the same about capitalists whose investments pay off?

There are several things to say here. First, it's just false that risky capitalist activity actually gets higher rewards when it pays off. Sometimes it does, sometimes it doesn't. And lots of capitalist activities aren't risky at all. An investment need not be risky to be very lucrative. If some public asset (a natural monopoly, say) is privatized and I get ownership of it, I may be able to charge fees and earn big profits even though there is virtually no risk. Or, consider that many financial institutions are, and they know that they are, "too big to fail."

We must also take into account that risk context sensitive in various respects. What may be risky for me (given my situation) may be less so for you (given your situation). Imagine a working class person who saved money for years to open up a small coffee shop. This is surely a risky activity since she will need to take out big loans on a project that could very easily go bust (and it's not as if they have millions to spare if it does). Now, imagine that I invest $40 million of a $140 million fortune in relatively low-risk securities that turn out to pay out big dividends. Instead of risking my capital on start-ups, I put it all in well-established, multinational corporations. So, I'm reaping large cash "rewards" from my investments, much larger (even in proportional terms) than the returns a successful small coffee shop owner will ever earn. But I am taking on very little risk whereas the newly petit bourgeois coffee shop owner is taking on a great deal of risk. There are innumerable examples of this sort. What they show is that capitalism doesn't, as a matter of fact, distribute wealth in accordance with the principle that riskier bets (that pan out) receive larger cash rewards than those that involve less risk.

But this isn't likely to satisfy defenders of the "risk and reward" view of why the capitalist's earnings are legitimate. They will probably reply by offering two different objections. The first has to do with the idea that capitalism is a fair game where the winner deserves to take all the spoils of victory. The second has to do with incentives and innovation. I'll examine (and refute) each in turn.

The first objection is as follows. Capitalism can be thought of as a fair game in which everyone (legally speaking) has a chance to be a successful capitalist. As long as the rules of this game are fair, then whatever outcome results from it is legitimate. So, for example, when I play blackjack and the casino hasn't rigged the game in their favor, and both the casino and I have consented to play the game, whatever I take home in winnings is legitimately mine. Capitalism, you might think, is the same way. If I risk $10 million on a risky investment and it pans out, why aren't I entitled to (or deserving of) all of the cash returns in the same way that I'm entitled to the cash returns of the game of black jack? In fact, wouldn't taxing the capitalist's profits be similar to stealing a gambler's winnings, even though she made a fair bet in both cases?

There are a number of things to say here. We might ask whether the "game" of capitalism really is fair (I shall argue that it isn't, and that the gambling/investing metaphor is misleading). But even if it is fair, we might still ask whether it makes sense to structure our economy like a winner-take-all casino game. I shall argue that there are deep problems (both structural as well as normative) with allowing the economy to be run like a casino.

Let's examine the fairness of the "game of capitalism." First, recall where capitalism comes from (read Part 8 of Capital for a detailed historical analysis): the expropriation and killing of indigenous peoples and European peasants, the forcible seizure and enclosure of commonly owned land, colonial domination and forced labor, the enslavement of human beings, and so on and so forth. And we could add that capitalism didn't leave imperialism, violence, oppression, racial domination, coercion, theft, and expropriation behind after the 17th and 18th century: these have been permanent features of the system throughout its existence. So the "game" is rigged from the start. There has never been a "level playing field" from which to begin the game.

But, suppose that there was a level playing field. Would that fix capitalism's problems? Would that mean that the "game of capitalism" is actually procedurally fair? I think not. First of all, not everyone can play the game of capitalism. In order to play, you must have something to invest (because that's one of the rules of the game). Now, defenders of capitalism will say that nobody is legally excluded from playing the game. But that's clearly a flawed argument. First of all, it's a fact that lots of people, indeed the vast majority of people, do not have the discretionary funds to play the game. David Schweickart makes the second point forcefully as follows.

Suppose you and I flip a fair coin; we each bet a dollar per round; heads I get your dollar, tails you get mine. The game is "fair" in the sense that we both face the same odds at any toss of the coin. However, a complication arises when we look at the game in light of its initial conditions. If I enter the game with $20 and you with $10, you are twice as likely as I to go bust. If you do go broke, and another player enters with $10, he will be three times more likely to be cleaned out than will I (because my initial stake has been supplemented by your losings)... So the large investor, although he has more to lose, is less likely to lose than is the small investor. Add to this that wealth gives one access to information, expert advice, and opportunities for diversification that the small investor lacks, and we see that the balance between magnitude of loss tilts toward the wealthy.

What this shows is that even textbook "ideal" capitalism isn't a fair game.

But there are further problems with this game, even if it was "fair". First of all, it presupposes that some people are playing the game--the capitalist investors--while others, who own no capital to invest, do the work--the workers. And while the capitalists are busy playing the casino-like game of capitalism, workers have no say in what is going on. Yet, and this is key, they stand to lose even more than the capitalists if the bet fails. That is, if a capitalist investor loses $10 million on a deal, but still has $3 million back at home, it's not as if he will be going hungry any time soon. But if 2,000 workers lose their jobs, we can be sure that they don't have million dollar nest eggs sitting at home waiting to be spent. Unemployment, as millions of Americans know first hand, can be absolutely devastating--particularly when wages and benefits are so meager even during periods of full-time employment. Capitalists, of course, stand to lose more in absolute dollar terms, but because of the diminishing marginal utility of money, it means much less to them. Think of the way that the economic crisis has gone thus far. The reckless, profit-driven investments of the financial sector produced a global crisis that has had devastating effects on working class living standards at the same time that it has primed the pumps for austerity administered from above. The point is this: casino capitalism is unfair because it presupposes a class of working people who can't play the game but, nonetheless, stand to lose a great deal if the capitalist's gambles don't pan out.

Imagine a capitalist who replies to a labor union as follows. "I risked all of my capital on this business, so who are you to collective bargain to get a piece of it? That's unfair because I assume all the risk, yet you want to share in the rewards." Now, we've already seen that this doesn't work because the workers do share in the risk--the risk of losing their job--even though they are guaranteed none of the winnings. But we can also add that it's not as if the workers were asked to share in the risk. It's not as if the boss will ever say: look, if you like, we can make this a worker-owned and worker-run collective in which we all share the risk (and the profit) equally. So it doesn't make sense to complain that workers share none of the risk.

One further thing to say regarding the idea that our economy is best thought of as a casino-like game in which the winner takes all. It is not clear that it makes any sense to structure basic economic institutions in this way at all. The economic system should exist to draw on the mutual benefits that we get from social cooperation. What we can accomplish together is far greater than what we can accomplish alone: that should be the basic organizing principle of any just economic system. The casino-style setup, however, exploits the fact that an economy requires mass participation, takes this mass participation for granted, and then haphazardly doles out lump sums to individuals who happen to get a good roll on the dice. That makes no sense to me. Let's use the power of economies of scale and increased productivity to maximize human capabilities, to meet socially recognized needs, to do great things together that we couldn't have done alone. Rather than being trapped inside a casino that I never asked to enter in the first place, I'd rather be a member of a self-governing community in which the condition for the free development of each individual is the free development of all.

But there is one last objection to my argument--which has to do with incentives and innovation--that I mentioned above. It goes as follows. A flourishing society requires that people take risks, innovate, try out new methods and techniques, and produce new things that may not ever pay off. I agree so far, but the objection isn't finished. It continues: in order to get people to take risks and innovate, they must be motivated by large cash rewards. And that means that capitalism is the only system in which innovation and risk-taking can flourish, because without the big cash rewards that the market hands out to successful businesses people wouldn't be motivated to innovate.

First of all, we've seen that capitalists don't need to do any innovating at all. They can pay someone else to do it. Capitalism--where there is private ownership of the means of production which are run in order to enrich the owners--does not distribute wealth in accordance with who is the most innovative or who takes on the most risk to make some socially useful good. There is no close connection between being a capitalist and being an innovator. R&D departments--many of them subsidized by public funds (this is called "externalizing costs")--do that. Much R&D is located within universities--which are more feudal, guild-like institutions than they are capitalist.

Second, it is demonstrably false that people need huge cash rewards in order to innovate and do great things. Great scientists, great novelists, great musicians and artists, and so forth rarely do what they do out of a single-minded focus on cash reward. Think of those who develop open-source software. I think it is true of a lot of people that if they were guaranteed a basic standard of living, they would be happy to spend a large portion of their time developing open-source, free software for the betterment of all. There are too many examples here to count. People, of course, want an adequate standard of living in which they don't want for any basic necessities, in which they have adequate leisure and a degree of discretionary spending. But that doesn't mean they have to have huge million-dollar rewards to socially-useful things.

Finally, capitalism thwarts a ton of really important innovation while it privileges others. Many know about the strange murder of the electric car. There are other examples of this kind --particularly green technologies that aren't profitable or undermine the profitability of natural resource extraction. In fact, we may never know how many great ideas are out there that haven't been given a try simply because capitalist production can't earn a profit off them (or because they take too much long-term planning or upfront investment, as is the case with much green technology). To be sure, there is a place for competition to determine who should win socially-produced funds for some new innovative project. But that doesn't require capitalism. Despite encroachment from corporations and moneyed interests, grant funding for scientific projects doesn't involve capitalist markets or profits.

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Is the Wealth of the Rich Legitimate? Part 1

Is the wealth of the rich in contemporary capitalist societies legitimate? Of course not. But the rich have a vested interest in making sure that the majority of the population --who aren't rich-- think that their wealth is legitimate. It hardly matters whether it's aristocratic privilege, family lineage, racial or sexual supremacy that makes a group dominant. It remains true that dominant groups almost always try to preserve the basis of their own dominance.

Dominant groups typically have two (analytically distinct, but in practice interwoven) means of maintaining dominance. The first is obvious. Dominant groups typically monopolize control of the means of exerting physical repression. If you push too hard against the status quo, dominant groups will always (if possible) push back with physical repression in order to protect their dominant status.

But dominant groups never maintain their dominance through naked violence alone. They have another means at their disposal: ideology. That is, dominant groups stabilize their rule by telling stories about why their rule is legitimate. Think of the "divine right" of Kings, the "positive good" doctrine that purported to justify the dominance of Slave owners, the so-called "civilizing mission" that Colonization attempted to carry out, the supposedly "scientific", technical expertise of bureaucrats. The stories the rich tell about the supposed legitimacy of their wealth are a key part of this long tradition of lying to the masses to protect privilege and power.

What are those stories? The most common one is that the rich deserve their wealth because they work hard to produce it. Because the wealthy (the "job creators"!) make such important productive contributions to society, the story goes, they deserve every cent they earn. Another story is that the rich deserve their wealth because they undertake a great deal of risk when they invest it. Yet another story that is told, perhaps the least plausible of all of them, is that the rich deserve their wealth because they sacrifice more than others (by saving and foregoing consumption). Finally, there is the claim that the wealth of the rich is legitimate because they are legally entitled to it in a regime of private property where ownership titles are distributed by way of voluntary exchanges.

Now, in practice these legitimating narratives are often run together and interwoven. The war of ideas is never as clear cut and organized as academic discourse aims to be. But for our purposes --that is, for the purpose of showing that all of these stories are pure fiction-- we'll examine them each separately in a series of blog posts (of which this is the first). In examining each, I'll follow closely along the lines of the arguments put forward in David Schweickart's excellent book Against Capitalism. Anyone interested in seeing a detailed, rigorous refutation of every familiar argument in favor of capitalism would do well to pick up a copy. In what follows, we'll just examine the first. The other stories will be taken up in subsequent blog posts.

The first story says that the wealth of the rich is legitimate because it is their reward for making productive contributions to society. A more technical way to say this would be the following: in a "purely competitive free market" what the wealthy earn directly corresponds to their marginal productive contribution in the economy. In neoclassical economic theory --which is little more than an elaborate way of cheerleading for (rather than critically analyzing) capitalism-- this is called the "marginal productivity theory of distribution." As an early defender of this view puts it, "the natural effect of capitalist competition is... to give each producer the amount of wealth that he specifically brings into existence."

Before we show why capitalism is not a system in which each receives according to what each produces, we need to do a bit of table setting. In order to produce anything at all, two things are required: labor and means of production (e.g. factory equipment, instruments, technical knowledge, land, space, etc.). It is a fact about capitalist societies that the vast majority of those who labor for a living do not own the means of production they use at work. The owners of the means of production are usually distinct from the group uses those means. Up to this point we've been talking about "the rich" or "the wealthy" --but to be more precise we're actually interested in capitalists (i.e. that group who earns a living by owning, rather than using, the means of production).

Now, everyone knows that those who labor (by using means of production) to produce goods make productive contributions to society. Auto workers, for example, use their own two hands to build cars that wouldn't have existed if they hadn't built them. Their productive contribution is clear, and so it is with all workers in society. But what we want to know is whether capitalists actually make any productive contributions to society in order to receive their income. If they did, and if capitalism rewarded their productive contributions proportionately, it would look like their wealth was pretty legitimate.

But what is the productive contribution of capitalists in our economy? Notice that we can't just define their productive contribution in terms of what they receive from the market, since that is circular. We want to know whether the market actually gives each what they deserve. So we can't very well say that what people deserve is what the market gives them --that begs the question. What we're trying to figure out is whether the market actually distributes according to productive contribution.

Some will say that the contribution capitalists is their entrepreneurial spirit and innovating attitude. Others will say that capitalists do a lot of work co-ordinating and managing the productive process. No doubt ingenuity and creativity are required to make a capitalist firm successful. Even a socialist society would require ingenuity, innovation and "entrepreneurial" spirit of some kind or other. Likewise, co-ordination and workplace organization are essential. But notice that capitalists can simply pay someone else to do all of the innovating, all of the managing, and all of the co-ordinating. And they often do. If I'm a capitalist, I can hire a management consultant, an industrial engineer, and a research and development team to do all of the managing, organizing and innovating. But I'm still a capitalist --and I'll still earn handsome sums of cash for myself (indeed, I'm in a position to earn far more than anyone else in the entire firm even though I don't do any real work). So in this case, where's the productive contribution that supposedly legitimizes my massive sums of wealth?

Some will say that what I'm doing is "providing capital". After all, we said that two things --means of production and labor-- were needed to produce goods. We know that workers make contributions by laboring to produce things. But it is, of course, true that the means of production (e.g. capital, the factory space, instruments, etc.) add value to the final product. And capitalists, by definition, own and control the means of production. So aren't they performing an essential productive function by providing it? Couldn't we say, then, that this is productive contribution that justifies capitalist wealth?

But let's think about this for a moment. What exactly is going on when a capitalist provides capital? They are doing nothing more than "allowing it to be used". They are doing no more than granting permission to make use of an already existing material thing --e.g. factory equipment, raw materials, etc. But, as Schweickart points out:

...an act of granting permission, in and of itself, is not a productive activity. If laborers cease to labor, production ceases in any society. But if owners cease to grant permission, production is affected only if their authority over the means of production is respected. If it is not, then production need not diminish at all. Workers can continue doing exactly what they were doing before --producing corn and bread and steel and machine tools and all the other commodities required by their society. Whatever the owners are doing when they grant permission for their assets to be used, it should not be called 'productive activity'.

To drive the point home, consider the following example.

Suppose a government suddenly nationalizes the means of production, then does nothing else but charge workers a tax to make use of it. We wouldn't say, would we, that the government is engaging in productive activity, or that the tax is a return for the government's productive contribution? Not even if the tax rate is exactly equal to the marginal product of the productive labor.

But some will reply here that there's a difference between providing physical means of production (e.g. raw materials, tools, factory equipment, etc.) and providing capital investment funds to finance a productive endeavor. Surely providing an already existing material thing --whether it be factory tools, land, etc.-- is not a productive activity. It is no more than granting permission. But isn't financing production by lending capital a productive activity that takes a great deal of skill? Schweickart gives us an excellent example here: "Consider a person with a chest full of cash, eager to invest. How he acquired it need not concern us. We want to understand how his disposal of it will increase production. To produce something, there must be brought together equipment, raw materials, and laborers. Let our investor lend his money to an entrepreneur who purchases these necessaries. The laborers are set to work with the machinery and raw materials, and soon goods are produced. It is all quite simple. But notice, this is also a matter of granting permission. The workers, the raw materials, and the machinery already exist. The workers could begin production themselves, except that property rights intervene. They cannot gain access to the machinery and raw materials, for these things are the property of others. To use them, one must have permission, which the entrepreneur secures by means of her borrowed capital." But permission is only needed if one respects the authority of the legal titles to ownership of the things needed to produce. So the workers could produce just as well without permission if they didn't respect that authority. It follows, then, that permission is in no way a productive contribution.

Take another of Schweickart's examples:

Suppose, instead of relying on our friend with the chest full of money, the government simply rolled out its presses to produce the same quantity of crisp bills and gave them to our entrepreneur. Exactly the same production would result. But would we want to call the printing of the money a productive activity? That would surely be misleading, perhaps dangerously so, tempting officials to believe that rolling the presses longer and longer would miraculously generate wealth.

The point of all of this is that "providing capital" is not a productive activity. But if that's true, then we are forced to conclude that capitalists, qua capitalists, make zero productive contributions even though the market gives them the lion's share of the surplus created by society. As even John Kenneth Galbraith put it,

No grant of feudal privilege has ever equaled, for effortless return, that of the grandparent who bought and endowed his descendent's with a thousand shares of General Motors or General Electric. The beneficiaries of this foresight have become and remain rich by no exercise or intelligence beyond the decision to do nothing, embracing as it did the decision not to sell.

Or, if you'd like another example, examine a graph showing real wages for workers and worker productivity from 1973 to the present. What you'll notice is that productivity goes way up whereas wages stagnate. Someone reaped all of the difference and got filthy rich, but it wasn't the workers who were producing more and more each year. Again, we see that market distributions don't reflect productive contributions.

So what explains the fact that capitalists own the vast majority of wealth in our society? They don't receive this wealth as a result of any productive contribution they make. When they earn interest or dividends on their invested wealth, they need not do anything productive at all. When they make millions from arbitrage, they haven't done anything productive whatsoever. So in virtue of what do they earn such vast sums of wealth? In virtue of their ownership. Whereas the vast majority of us have no choice but to earn a living from the work that we do, capitalists earn their riches merely by owning things. But if the vast majority --the 99%-- does 100% of the productive activities in society, how could be legitimate that the unproductive 1% owns and controls the lion's share of the wealth produced? Good question.

So, what I've shown is that a certain argument, i.e. that capitalism distributes wealth according to productive contributions, is false. In a series of upcoming posts, we'll look at other fairy tales told by the rich to protect their wealth and power.

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Is the Problem the 1% or the System?

The occupy movement has brought the issue of class power to the forefront in an unprecedented way. The entire framing of the movement's politics --the 99% against the 1%-- speaks against a political and economic system dominated by a wealthy ruling class. If the media was all-consumed by the ideologically-tendentious issue of deficit reduction only a few months ago, that focus has been shattered (or at least destabilized) by the rapid proliferation of occupy movements from Portland, OR to Orlando, FL.

But within the movement, questions remain. The vast majority of participants agree that the 1% enjoys a concentration of economic and political power that is highly unjust. A key goal of the movement everywhere is to challenge the entrenched power of an unelected dominant group --the 1%-- that lords over us. There is also a sense that the 1% is responsible for the crisis (and should therefore be made to pay for it). Among the most popular chants at Occupy Chicago are "banks got bailed out, we got sold out!" and "how to fix the deficit? tax, tax, tax the rich!".

But it is also commonplace for participants to argue that the problem is our broken economic and political system. This is an argument familiar to many on the Left who have argued that it is the internal contradictions of capitalism, not a failure of regulation or a climate of greed, that produced this economic crisis. But on the face of it, this emphasis on the system doesn't appear to cohere with the "dominant group" perspective that pins responsibility for the crisis --and the push for austerity-- on the ruling class (the 1%). Why? Because the "it's the system" perspective seems to suggest that the ruling class isn't responsible for the crisis in the sense that they made imprudent or unethical decisions. The "it's the system" perspective emphasizes the ways in which the system pushes individuals in the ruling class to act in ways that produce deep recessions and crises.

So, is it the system that's the root of the problem? Or is it the dominance of the ruling class? You probably saw this one coming, but I'm going to argue that this is a false dilemma. It is both the system and the dominant group within that system that is at the root of crisis.

Before I say what I think about this, I'd like to flag the fact that these questions have a long history in the Marxist tradition. The system vs. dominant group question was taken up in the famous Miliband-Poulantzas debate that raged in the pages of New Left Review in the 60s and 70s. This sparked several other debates internal to the Marxist tradition on the question of the state, the most interesting of which (in my view) being the arguments among German Marxists in the 1970s involving Hirsch, Offe, Altvater, and others. For an excellent introduction to these debates, see Simon Clarke's overview here, or read Martin Carnoy's The State and Political Theory (esp. chapter 5).

First, let me say a little bit about the 1% as a dominant group. We all know that the 1% has colonized the political system in the US for its own purposes. This is uncontroversial. The 1% spends vast sums each election cycle funding the candidates of both major parties. Presidential campaigns are simply a struggle between the Democrats and Republicans to garner more support and funding from corporate elites. The 1% also spends vast sums on PR and propaganda (this includes political advertisements as well as ostensibly non-political commercials, e.g. an Exxon-Mobil ad that ends with the jingle "Energy for a stronger America"). We can also add here that the 1% spends vast sums on pro-business interest groups (e.g. the US Chamber of Commerce, etc.). In addition to dominating the election system, the 1% also spends vast sums on lobbying efforts to fight for legislation friendly to their interests. Even when popular demands for reforms surface, the 1% uses its influence and power to mold reform proposals to fit its interests as much as possible. Consider, for instance, the Sherman Act, which was ostensibly passed to break up industrial monopolies, but ended up being used to break unions rather than business cartels. Or, take the following example. Commenting on the popular demand for a public Commission to regulate railroad corporations, an earlier U.S. Attorney General said that:

It satisfies popular clamor for a governmental supervision of railroads, at the same time that that supervision is almost entirely nominal. Further, the older such a Commission gets to be, the more inclined it will be found to take the business and railroad view of things. It thus becomes a barrier between the railroad corporations and the people and a sort of protection against hasty and crude legislation hostile to railroad interests... The part of wisdom is not to destroy the Commission but to utilize it. (quoted from Charles E. Lindblom's excellent Politics and Markets).

It is also well-known that government and industry interpenetrate one another through revolving-door arrangements. The person regulating a particular industry ends up as a highly-paid employee of that industry. High-ranking officials in a particular industry wind up with the public job of regulating that same industry (only to wind up, once again, with a cushy position in private industry afterward). This is a basic feature of how the political system in the US functions. Virtually all elected officials are either already wealthy businesspeople before they get elected, or they become wealthy business people in the course of their tenure.

There's still more to say here, however, about the various ways that the ruling class has colonized the state to serve its interests. Businesspeople have, as Charles Lindblom famously argued in Politics and Markets, a privileged position within government. They are not just another "special interest group". They stand above all other "interest groups" because of their position in society. They have direct access to governing politicians in ways that no other citizens have. Why? Because business leaders are, more or less, unelected public officials who make big decisions about the direction of our society, whether it be decisions about investment, employment, wages and benefits, location of factories and production, etc.

In any society, certain basic decisions must be carried out. Decisions must be made about what is to be produced, how it will be produced, according to what organizational structure, by whom, etc. Decisions must be made regarding the investment of capital in production, the allocation of resources, whether to use certain technologies, the amount of money devoted to innovation, etc. Decisions must be made regarding where plants and factories will be located, how many workers they will employ, whether workers will be laid off if profits fall, etc. Decisions must be made about how much compensation and bonuses executives should be paid. All of these decisions must be made by someone, no matter what kind of society we live in. And what's more --these are hugely important decisions that have massive consequences for the well-being and life chances of all of us. They have a huge impact on the standard of living, employment levels, wages, economic growth, prices and so forth.

But who makes these decisions in our society? Unelected business people. The majority of us do not have any say in these matters. The majority has no means of making the unelected public officials of the 1% accountable to our interests. This is not a new development. By definition, a capitalist society is one in which the basic structure of the economy --the means of production-- is privately owned and controlled by a small class. The productive instruments, the resources, the capital and so forth are all privately owned and controlled by a small class of owners --the 1%. According to our present legal/political system, to allow the democratic will of the people to determine these decisions would be to interfere with the private property of the 1%. Genuine democracy of, by, and for the people is incompatible with the private property of the 1%. In other words, the class power of the 1% is fundamentally at odds with the ideal of a democratically self-governing society.

So, business people (or, if you like, the ruling class, or the 1%) are basically unelected public officials. They make decisions of huge importance for all of us. Unsurprisingly, then, elected officials take the class power of the 1% seriously. They know that if business turns against their government, bad consequences will follow: rises in unemployment, stagnant growth due to a failure to invest, capital flight, etc. They know that they must try to induce (not command) business --with tax breaks, subsidies, lax regulations, etc.-- to fulfill its function in the system so that the economy does well according to its own standards. Whether elected officials in capitalist societies like it or not, they must take seriously the structural economic imperative to make the 1% happy. This is an example of how the power of the 1% places constraints upon what governments can and cannot do.

Governments have, since the very beginning of capitalism, taken on a basic supportive role vis-a-vis business. Costly investments in fixed capital and infrastructure, because they are not profitable in the short term, are often taken on by government in order to grease the axles of private businesses. Likewise with "early federal policy on banks, canals, and roads; governmental profligacy in indulgences to railroads; the judicial interpretation of anti-monopoly legislation to restrict unions rather than industry; the deployment of Marines to protect American enterprise in Latin America; the use of public utility regulation to protect business earnings; and the diversion of fair trade laws from their ostensible public purposes to the protection of monopolistic privilege" (Lindblom, p.174).

This leads us into a discussion of the system. Thus far, we've seen how the State in capitalist society is a class State. We've seen the multiple avenues through which a dominant group, i.e. the ruling class, can directly influence the actions of government. When government officials aren't themselves former (or current, or future) ruling class members, they are subject to the influence of corporate campaign finance, intense lobbying efforts, as well as influence generated by the concentrated economic power of business people. We've also seen that the class power of the 1% places constraints on what governments can and cannot do, no matter how strong its popular mandate from the people. But now I'd like to connect this discussion to an indictment of the system.

The first thing to say is that the sorry state of affairs discussed above didn't come about by accident. Nor did it come about in a vacuum. It is not the result of a co-ordinated conspiracy by people who know one another personally and communicate regularly about how to maintain their dominance. This state of affairs is the result of hundreds of years of capitalist development.

Capitalism is a system in which the basic structure of the economy is privately owned and used for the sole purpose of accumulating profit. Whether capitalists like it or not, they are compelled to maximize profit. They are forced, on pain of insolvency, to compete against other capitalist firms in order to survive. And winning out in competition means accumulating large profits, and reinvesting those profits in expanded production to accumulate still more profit. "Accumulate, accumulate, accumulate!" more or less summarizes the basic priorities of the system.

When the accumulation process is interrupted, the system seizes up and goes into crisis. There are many different reasons why interruptions occur, but one important reason is overproduction. Overproduction occurs when capitalists accumulate more capital, resources, or means of production than they can profitably make use of. So, when sufficient profitable investment opportunities are not forthcoming, what do capitalists do? They hoard their capital and try to wait out the storm. It doesn't matter whether mass unemployment or food shortages ensue: in periods of economic crisis the ruling class will hoard its wealth until profitable investment opportunities re-emerge.

So, in order for a capitalist system to function (in order for people to have jobs, in order for people to be able to purchase the necessities of life, in order for tax revenues to be generated to fund government salaries, the legal system, roads, the military, etc.) the accumulation process must be in full swing. When accumulation is disrupted, crisis ensues and the vast majority suffers as a result.

Now, at this point, we have to ask: if the above is true, what does it say about the basic function of the State in capitalist societies? The answer should be clear. The capitalist State's function is to cultivate and maintain favorable conditions for accumulation. In short, the fundamental role of the State in capitalism is to secure the conditions for profitability.

Let's expand upon this a bit. We've already established that the State is structurally dependent on the accumulation process. That is, the State is funded through resources derived from the private accumulation process (collected via taxation). Moreover the viability of a particular governing group within the State is dependent upon economic "success" (as opposed to stagnation and crisis). In this context, State officials are compelled --by their own institutional self-interest-- to try to ensure that the accumulation process runs smoothly. If they don't, they are liable to face sharp drops in tax revenues as well as other bad economic consequences (e.g. unemployment, stagnation, capital flight, etc.). This is what politicians --from both corporate parties-- mean when they talk about "creating a good business climate", or adopting policies that are "pro growth". This need to ensure that the accumulation process continues is what drove the construction of the Interstate Highway System as well as other big public works projects in U.S. history. The goal was to socialize the costs overhead and infrastructure to encourage private investment for profit. Likewise, this basic role is what explains the massive bailouts of financial institutions, the giveaways dolled out through "quantitative easing", and the big tax breaks handed out by Obama and the Democrats. Governing officials are trying to find ways to jump start the accumulation process --no matter what the human cost.

So, as we've seen, the function of the State is to secure the conditions for the accumulation of profit. But in order to do that well, the State has to act in the interests of the capitalist class as a whole. And what is in the interest of the capitalist class as a whole may not be the same as what is in the interest of some particular capitalist firm. Recall that capitalists confront one another in the marketplace as rivals in competition. Let us add here the Marxist complaint that capitalist production is anarchic, haphazard and unplanned. Although the capitalist class a whole may act together to secure legislation on shared goals (e.g. union-busting), there will a lot that they disagree on, given that their priority is maximizing their own profit and bumping off competitors. What this makes clear is that the self-interest of a particular capitalist firm may not coincide with the class interest of all capitalists.

But the basic role of the State is to ensure that the accumulation process runs smoothly, i.e. to serve the interests of the capitalist class as a whole. Thus we should expect the capitalist State to periodically do things that buck the will of a particular capitalist firm. In fact, this happens all the time. Alternatively, because of special direct access and influence to State officials, sometimes capitalists are able to persuade governing officials to serve the interests of their particular firm more than the interests of the capitalist class as a whole. The point is that there may be a contradiction here: between the basic function of the state and the ways that particular members of the ruling class influence the state directly.

This isn't the only contradiction. The State in capitalist societies involves electoral competition. That means that different factions of establishment groups, organized into dominant political parties, compete against one another to determine which will head up the State. Regardless of which of them governs, of course, the basic function of the State remains the same. But the cycle of elections every four years in the U.S. means that particular governing officials can be removed from office and replaced by others. Thus, governing officials are compelled to seek popular support in order to reproduce their own power. In a word --their continued existence as public officials requires that they seek legitimation from the public. That doesn't mean that the rule of State officials must actually be legitimate --it merely means that their rule must appear to be so. If a governing party does not secure legitimation, it threatens to lose power to representatives from another establishment party. So, for reasons of self-interest, elected officials in capitalist societies must try to make it appear as if they are uniquely qualified to fulfill their role in the system. The need to secure legitimation also means that the State must speak in the language of universality and general interests. When it advertises itself publicly, it will always say that it stands for generalizable interests and popular goals --as opposed to the goals and particular interests of the capitalist class. If the capitalist state advertises itself as what it really is, it would not be able to secure legitimation. Thus, as Claus Offe puts it, "the State can only function as a capitalist state by appealing to symbols and sources of support that conceal its nature as a capitalist state; the existence of a capitalist state presupposes the systematic denial of its nature as a capitalist state."

However, in periods of social struggle, sometimes governing officials are compelled to grant concessions to popular movements in order to secure legitimation. But many --indeed the vast majority-- of reforms demanded by the population brush against the grain of the accumulation process. This reveals a profound contradiction in capitalist societies, i.e. the contradiction between accumulation and legitimation.

On the one hand, the capitalist State has to secure legitimation from the population. That doesn't mean that it has to actually be legitimate --it means that it is compelled to secure the appearance of being legitimate. In periods of intense struggle, this means granting concessions to popular movements (because otherwise it would reveal that the State doesn't serve the interests of the majority). But granting concessions or passing reforms contradicts the need to ensure that the accumulation process runs smoothly. Hence the contradiction and all of the instability that comes with it.

Austerity is an excellent example of how this contradiction manifests itself. Take Greece, where a nominally "socialist" party is in power. Presumably, it is not part of the party's program that their basic goal is to gut the welfare state and lower working-class living standards. Presumably the party is committed in writing to favoring basic center-Left demands, including maintenance of the welfare state. But, nonetheless, the ruling PASOK government in Greece is caught between the need to secure legitimation and the need to secure the conditions for the accumulation of profits. Through its actions, however, we see very clearly which conjunct of the contradiction has a stronger pull on the government. PASOK has pushed through a punishing program of deep cuts, austerity, layoffs, union busting, and tax increases on workers. But it is doing all of this in order to try to protect the profits of the European ruling classes and to re-establish the conditions for steady accumulation. But in doing this, the Greek state is showing itself for what it is: a class state. Hence, it is losing legitimacy by the day. As a PASOK MP describes the situation,

"The anger over the austerity measures is so deep that many PASOK MPs no longer dare to appear in public. “We can’t even leave our homes to go to a taverna any more,” the Guardian quotes an anonymous MP of the governing party as saying. “You’re called a pig or a traitor for passing measures none of us wanted to pass. It’s not a life.”

I don't doubt that many of the PASOK MP's didn't want to pass the punishing austerity packages. But they passed them nonetheless, because of the web of power relations in which the State is situated. The EU, dominated by French and German capital, has been pushing hard to protect the assets of the European ruling classes. They have made economic threats: capital flight, economic misery, inflation, isolation, etc. They have made political threats some of which hint at the possibility of military coercion and "regime change" if their harsh conditions are not met. At the same time, PASOK is under the tutelage of domestic Greek capital as well. Whatever the aims of the PASOK government officials themselves, the systemic pressure --and the pressure of tremendously concentrated class power coming from France and Germany-- are forcing them to put profits over the vast majority of the population.

So let us take stock of what's been said above. How is the dominance of the 1% related to the system? The 1% are dominant in virtue of their role within the system. If the particular individuals in the 1% simply disappeared, others would take their place and the problems would remain. Their position of dominance is facilitated by the structure of the system in such a way that we can only oppose their rule if we oppose the system that makes it possible. Furthermore, we see that the particular interests of individual members of the 1% sometimes contradict the overall interests of the whole 1%. This fact is, again, true because of the competitive, anarchic nature of capitalist production. This compels ruling class members to push very hard for subsidies, tax breaks, no bid contracts, etc. and milk the government for money and favors. This would be true even in a perfectly competitive "free" market, because the very nature of the capitalist system compels them to do this.

Finally, the connection between the dominance of the ruling class and the capitalist system explains why it is pointless to expect moral suasion to move the 1% to change its ways. The system isn't in crisis merely because of callousness and greed --though these vices are no doubt highly prevalent among the 1%. The system is in crisis because of its irrational drive to accumulate for its own sake in the face of growing contradictions and environmental limits. And the ruling class is forced --by competition-- to participate in this mad race toward destruction. Appealing to their conscience is pointless --we need to change the system. You don't ask Kings to be more benevolent and less cruel --you demand that they be dethroned. Likewise, we shouldn't ask that our rulers be more "socially conscious" or "less greedy". We should instead demand that the system that facilitates their dominance be overturned.

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