In case you wondered to whom I was referring in the video on the transnational capitalist class, it was, of course, Leslie Sklair who also wrote the book The Transnational Capitalist Class. This book is a must-read for anyone interested in the sociological study of the dominant class in the global system. Then, you should read William I. Robinson’s A Theory of Global Capitalism.
I have blogged pretty extensively on what I have called the New Sociopathy (see here) referring to the lack of empathy from the wealthy (and wealthier) towards the less fortunate. That theme has been since more discussed as a study came out pretty much validating the idea that wealth makes one less compassionate and less able to empathize.
“In fact, a number of new studies suggest that, in certain key ways, people with that much money are not like the rest of us at all. As a mounting body of research is showing, wealth can actually change how we think and behave—and not for the better. Rich people have a harder time connecting with others, showing less empathy to the extent of dehumanizing those who are different from them. They are less charitable and generous. They are less likely to help someone in trouble. And they are more likely to defend an unfair status quo. If you think you’d behave differently in their place, meanwhile, you’re probably wrong: These aren’t just inherited traits, but developed ones. Money, in other words, changes who you are.
As voters consider which presidential candidate to support in November, one thing is for sure: Whoever wins is going to have money and power to spare. In a world where our politicians are inevitably better off than most of the people they govern, the new research sheds fresh light on the nature of our elected leaders—and offers insight into why they so often seem oblivious to our problems.”
The studies themselves are interesting,
“Kathleen Vohs, a professor at the University of Minnesota’s Carlson School of Management, started working on the issue of “feeling rich” in 2006 along with coauthors Nicole Mead and Miranda Goode. In their research, subjects were given subliminal suggestions to think about money—a clue in a descrambling puzzle, a dollar-bill screensaver on a computer screen, a sheaf of Monopoly bills on a table—before being asked to make a number of decisions: How soon do you ask for help on an impossible drawing task? Do you help the clumsy lab assistant who just dropped all her pencils? Do you donate to a made-up charity? Do you choose to work in a team or alone?
The mere hint of money, the researchers found, made people less likely to ask for help, less helpful in gathering the lab assistant’s pencils, significantly less generous to the made-up charity, and far less likely to look for teammates. “When people are reminded of money, they get better at pursing their personal goals,” Vohs said. “On the negative side, they become poor at interpersonal functioning. They’re not all that nice to be around. They’re not openly mean or disagreeable, but they can be insensitive.”
Insensitivity can cover a range of sins, from the minor (being unhelpful) to the more serious—say, treating others like they are less than human. Further studies by Vohs and her colleagues have shown that prompting people to think about money—a technique known as “priming”—makes them less likeable and friendly, and more likely to agree with statements that support an unjust, social-Darwinist status quo (for example, “Some groups of people are simply inferior to others”). In a particularly disturbing part of one study, the team primed people with money, then gauged their empathy by eliciting reactions to a theoretical scenario involving a belligerent homeless person. The researchers offered the subjects a chance to agree with statements that dehumanized others (“Some people deserve to be treated like animals”). The money-primed group was more likely to agree.”
So, just thinking about money makes people less empathetic. On the flip side, there are significant empathy differentials by income levels:
“In 2009, Michael Kraus, Paul Piff, and Dacher Keltner, all then of Berkeley (Kraus is now at University of California, San Francisco), published research that divided up sample groups by family income as well as self-reported socioeconomic status. People of higher socioeconomic status were more likely to explain success or failure as a result of individual merit or fault; lower-class people, on the other hand, felt less control in their own lives and were more likely to blame events on circumstance. In other words, higher-status people were more likely to feel that they’d earned their high place in society, and that poorer people hadn’t.
More recently, similar research—involving not just surveys, but heart-rate measurements —has found that higher-status people tend to be less compassionate toward others in a bad situation than people of lower-class backgrounds.
The result of these differences, say researchers who work on money and social class, is that people who are confident in their status have a completely different worldview from those who lack that confidence: more self-involved, self-justifying, and even, as the dehumanization study suggests, crueler. And the higher up the spectrum you get, the stronger the effect: “It’s on a continuum,” Kraus said. In other words, a subject whose family income is over $75,000 will show more compassion and generosity than a subject with a family income over $150,000, and less than a subject with an income of $30,000.
You might think that electing poor or low-status people to positions of power could help solve the problem, but it turns out not to be so easy: Power itself can trigger similar changes.”
“Cast your mind back to the euro crisis talks last year, when the future ofGreece was being decided. How much Athens should pay its bailiffs in the banks, on what terms, and the hardship that ordinary Greeks would have to endure as a result.
There were times when the whole of 2011 seemed to be one long European summit, when you heard more about Papandreou and Merkozy than was strictly necessary. Yet you probably didn’t catch many references to Charles Dallara and Josef Ackermann.
They’re two of the most senior bankers in the world – among the top 1% of the 1%. Dallara served in the Treasury under Ronald Reagan, before moving on to Wall Street, while Ackermann is chief executive of Deutsche Bank. But their role in the euro negotiations, and so in deciding Greece’s future, was as representatives of the International Institute for Finance.
The IIF is a lobby group for 450 of the biggest banks in the world, with members including Barclays, RBS and Lloyds. Dallara and Ackermann and their colleagues were present throughout those euro summits, and enjoyed rare and astounding access to European heads of state and other policy-makers. EU and IMF officials consulted the bankers on how much Greece should pay, Europe’s commissioner for economic affairs Olli Rehn shared conference calls with them.
You can piece all this together by poring over media reports of the euro summits, although be warned: you’ll need a very high tolerance threshold for European TV, and financial newswires. But Dallara and co are also quite happy to toot their own trumpets. After a deal was struck last July, the IIF put out a note bragging about its “catalytic” role and claiming its offer “forms an integral part of a comprehensive package”.
By now you’ll have guessed the punchline: that July agreement was terrible for the Greeks, and brilliant for the bankers. It was widely panned at the time, for slicing only 21% off the value of Greece’s loans, when Angela Merkel and many others agreed that financiers ought to be taking a much bigger hit. As the German government’s economic adviser, Wolfgang Franz, later remarked in an interview: “If you look at the 21% and our demand for a 50% participation of private creditors, the financial sector has been very successful.” Another way of putting it would be to say that the bankers overpowered even the strongest state in Europe.”
So, the financial element of the Transnational Capitalist Class flexed its muscles against the political component, and won. Meanwhile, the peasants didn’t think it was such a great idea but who cares:
“None of these voters, none of these opinions got even a fraction of the consideration, let alone the face time, that was extended to Dallara and Ackermann. At Corporate Europe Observatory in Brussels, Yiorgos Vassalos has been tracking the negotiations over Greece: by his reckoning only the IIF got to have such personal, close-up access. These were summits settling how much misery would be imposed on the Greek people – and no trade unions or civil society groups got a say in them. “The only key players in those meetings were European governments and the bankers,” says Vassalos.
So the bankers whose excesses helped land Europe in this mess then get to sit round the big EU table, like any other government, and decide who should pay for it. And the answer, unsurprisingly, is: not them. The bigger question is: why finance has been granted such power? In a forthcoming paper entitled Deep Stall, the Centre for Research on Socio-Cultural Change gives one compelling reason: because so many countries across Europe are, through both their public and private sectors, so dependent on financiers in other countries for credit. That includes Britain, which relies on 10 eurozone countries for loans worth over 70% of its annual national income – a higher proportion even than Italy. The tale of the IIF and how it got such a powerful say on the fate of ordinary Greeks is really a chapter in a much bigger story of how governments across the western world got swallowed up by their finance industries.”
The effects of this plutocratic and sociopathic governance based not just on economic but also on social capital are unsurprising and constitute the most obvious form of structural violence:
“Europe’s long-running euro crisis may be cooling. But the economic distress it has left in its wake is pushing a rising tide of workers into precarious straits in France and across the European Union. Today, hundreds of thousands of people are living in campgrounds, vehicles and cheap hotel rooms. Millions more are sharing space with relatives, unable to afford the basic costs of living.
These people are the extreme edge of Europe’s working poor: a growing slice of the population that is slipping through Europe’s long-vaunted social safety net. Many, particularly the young, are trapped in low-paying or temporary jobs that are replacing permanent ones destroyed in Europe’s economic downturn.
Now, economists, European officials and social watchdog groups are warning that the situation is set to worsen. As European governments respond to the crisis by pushing for deep spending cuts to close budget gaps and greater flexibility in their work forces, “the population of working poor will explode,” said Jean-Paul Fitoussi, an economics professor at L’Institut d’Études Politiques in Paris.
To most Europeans, and especially the French, it seems this should not be happening. With generous minimum wage laws and the world’s strongest welfare systems, Europeans are accustomed to thinking they are more protected from a phenomenon they associate with the United States and other laissez-faire economies.
But the European welfare state, designed to ensure that those without jobs are provided with a basic income, access to health care and subsidized housing, is proving ill-prepared to deal with the steady increase in working people who do not make enough to get by.
The trend is most alarming in hard-hit countries like Greece and Spain, but it is rising even in more prosperous nations like France and Germany.
“France is a rich country,” Mr. Fitoussi said. “But the working poor are living in the same condition as in the 19th century. They can’t pay for heating, they can’t pay for their children’s clothes, they are sometimes living five people in a nine-square-meter apartment — here in France!” he exclaimed, speaking of an apartment of about 100 square feet.“
And France is not the worst-off country in this respect.
However, it would be wrong to blame all this on the 2008 recession. The seeds were planted 30 years ago by the rising neoliberal economic and political class with predictable results, such as concentration of wealth at the very top of the social ladder, mass consumption maintained through high levels of credits and precarization through the progressive lowering of social safety nets and destruction of organized labor:
The Davos Class is an expression coined by Susan George:
“‘All for ourselves and nothing for other people” seems in every age of the world to have been the vile maxim of the masters of mankind,’i wrote Adam Smith in 1776 in The Wealth of Nations, universally considered the first comprehensive inquiry into the nature and practice of capitalism.
The masters of mankind are still with us: I call them the Davos class because, like the people who meet each January in the Swiss mountain resort, they are nomadic, powerful and interchangeable. Some have economic power and usually a considerable personal fortune. Others have administrative and political power, mostly exercised on behalf of those with economic power, who reward them in their own way. Contradictions among its members can most certainly exist – the CEO of an industrial company does not always have exactly the same interests as his bankers – but generally speaking, when it comes to societal choices, they will agree.
I’m not impugning anybody’s individual morality here – there are surely plenty of kind-hearted bankers, generous traders and socially responsible CEOs. I am simply saying that, as a class, they can be counted on to behave in certain ways if only because they serve a single system. The Davos class, despite its members’ nice manners and well-tailored clothes, is predatory. These people cannot be expected to act logically because they are not thinking about longer-term interests, usually not even their own, but about eating, right now.
You can find the Davos class in every country – its members do not belong to a conspiracy and its modus operandi can be readily observed and identified. Why bother with conspiracies when the study of power and interests will do the job? The Davos class is always extremely small relative to the society and its members naturally have money – sometimes inherited, sometimes self-made. More importantly, they have their own social institutions – clubs, top schools for their kids, neighbourhoods, corporate and charity boards, holiday destinations, membership organizations, exclusive fashionable social events, and so on – all of which help to buttress social cohesion and collective power. They run our major institutions, including the media, know exactly what they want and are much more united and better organized than we are.
But this dominant class has weaknesses too; one is that it has an ideology but virtually no ideas and no imagination. Their programme since the 1970s, usually called ‘neoliberalism’, is based on freedom for financial innovation, no matter where it may lead, on privatization, deregulation, and unlimited growth; on the supposedly free, self-regulating market and free trade that gave birth to the casino economy. This economy has failed spectacularly and is now thoroughly discredited, at least in the public mind.”
It is very reminiscent of Leslie’s Sklair’s transnational capitalist class.
And Goldman Sachs is its favorite organization from which to extend its power. Case in point: three former GS men now rule the European Central Bank, Italy and Greece:
“Qu’ont en commun Mario Draghi, Mario Monti et Lucas Papadémos ? Le nouveau président de la Banque centrale européenne, le président désigné du conseil italien et le nouveau premier ministre grec appartiennent à des degrés divers au “gouvernement Sachs” européen. La banque d’affaires américaine a en effet tissé en Europe un réseau d’influence unique sédimenté depuis des lustres grâce à un maillage serré, souterrain comme public.
A tout concours, il faut une hiérarchie. Le premier prix revient bien sûr à Mario Draghi, vice-président de Goldman Sachs pour l’Europe entre 2002 et 2005. Nommé associé, il est chargé des “entreprises et pays souverains”. A ce titre, l’une des missions est de vendre le produit financier “swap” permettant de dissimuler une partie de la dette souveraine, qui a permis de maquiller les comptes grecs. Vient ensuite Mario Monti, conseiller international depuis 2005. Arrive en troisième position Lucas Papadémos, qui vient d’être nommé premier ministre de la Grèce, qui fut gouverneur de la Banque centrale hellénique entre 1994 et 2002, qui a participé à ce titre à l’opération de trucage des comptes perpétré par GS. Le gestionnaire de la dette grecque est d’ailleurs un certain Petros Christodoulos, un ex-trader de la firme.
Deux autres poids lourds tiennent le haut du pavé dans la défenestration de l’euro, Otmar Issing, ex-président de la Bundesbank et Jim O’Neill, l’inventeur du concept des BRICS, l’acronyme désignant les marchés émergents à fort potentiel de croissance (Brésil, Russie, Inde, Chine et Afrique du Sud). Ex-président de Goldman Sachs International dont il est resté l’un des administrateurs, l’Irlandais Peter Sutherland a joué un rôle-clé dans le sauvetage de l’Irlande. Enfin, Paul Deighton, qui a passé 22 ans chez Goldman Sachs, est directeur général du comité organisateur des Jeux olympiques de Londres en 2012. La lanterne rouge car chacun sait que le sport comme l’amitié est hors concours.”
This is a global power elite that is beyond accountability and democratic governance. sociologist Leslie Sklair calls it the Transnational Capitalist Class. Sklair uses the term transnational to indicate that this class does not derive its power from any particular state or country but precisely from its cross-border capacity to mobilize different forms of capital (economic capital, such as financial assets; political and social capital such as power, influence and connections; technical and organizationalcapital such program design skills, drafting of trade treaties; cultural capital such as the production of content to promote the consumerist ideology, advertising).
The TCC is composed of four different groups. The corporate fraction is the dominant category in the TCC. It is composed of corporate executives of the major transnational corporations as well as major owners. This fraction’s power derives from its enormous economic and financial power. It is profit-driven and seeks to extend its dominance globally. The other fractions (state, technical and consumerist) are akin to a supporting cast and provide other forms of capital necessary for the global reach of the global capitalist system on top of which the corporate fraction sits.
Leslie Sklair’s Four Fractions of the Transnational Capitalist Classand their Types of Capital
Executives from transnational corporations and their local affiliates
Economic / Financial
Globalizing bureaucrats and politicians
Political / Social
Technical / Organizational
Merchants and media
The combination of economic, political, technical and ideological powers translates into the creation of a global system with global capitalism as dominant force. Based on this, Sklair outlines four basic propositions that define the actions of the TCC.
Leslie Sklair’s Four Propositions on the Transnational Capitalist Class (TCC)
“A transnationalist capitalist class based on the transnational corporations (TNCs) is emerging that is more or less in control of the processes of globalization.”
“The TCC is beginning to act as a transnational dominant class in some spheres.”
“The globalization of the capitalist system reproduces itself through the profit-driven culture-ideology of consumerism.”
“The transnational capitalist class is working consciously to resolves two central crises: (i) the simultaneous creation of poverty and increasing wealth within and between communities and societies (the class polarization crisis) and (ii) the unsustainability of the system (the ecological crisis).”
The existence and power of the TCC is made particularly visible every year when the World Economic Forum (WEF) meets at the exclusive ski resort in Davos, Switzerland. The WEF is an organization based in Geneva (Switzerland) that comprises business leaders (such as Bill Gates and the CEOs of the largest transnational corporations), past and present political leaders (such as presidents, prime ministers and other government officials), select intellectuals (Chancellors and professors from the most prestigious universities), journalists, and, sometimes, members of non-governmental organizations, in other words, it is a gathering of the TCC.
At the annual meeting in Davos, under very tight security, this elite discusses the economic and political issues of the world but it is also an opportunity to network and cultivate social capital as well as conduct business and shape policy on a global scale. The membership of the WEF clearly shows its exclusive nature: the vast majority of the membership is from the North America and Europe, with some representatives from developing Asia. One thousand companies, earning over one billion dollars are also invited, as long as they pay a $250,000 fee. Until 2001, there were no women represented to the board. Panels may be public but meetings are held behind closed doors.
The Davos meeting clearly illustrates that the TCC is indeed a class: a category of people who may come different parts of the world but think alike and share a common view of what the world should look like and what economic policies should be implemented. They all share a neo-liberal or globalist ideology.
Apart from the World Economic Forum, the TCC also exercises power through its membership in think tanks (such as the American Enterprise Institute) or corporate associations (such as the World Petroleum Council for the oil industry), and its control of the mass media (very large media conglomerate own most television channels, radio stations, internet service providers as well as book publishing companies), and countless charities and foundations as well as University boards.
And Goldman Sachs rules them all. It extends its power into transnational corporation, functions thanks to the transnational capitalist class, and obviously is thoroughly networked into the transnational state (to use William I. Robinson’s typology).
One would have to be living in a cave to not notice that things are grumbling: protest movements in the Middle East, where Tunisia and Egypt were the spark that also lit things up in other MENA countries.
“Business organisation the Institute of Directors (IoD) has called for collective bargaining to be scrapped for teachers and NHS staff.
They are among a set of proposals the trades unions have described as a “Thatcherite fantasy world”.
The IoD put a series of recommendations to government to cut red tape and boost private sector growth.
It also wants an automatic right to ask for flexible working to be removed, in order to increase productivity.
The IoD has put forward 24 “freebie” proposals, which it says would cost the government nothing but would benefit growth, particularly in the private sector.
Among the most controversial would be the call to curb trade union negotiating power in large public sector bodies, said BBC business correspondent Joe Lynam.
The IoD also suggests that workers should pay a deposit of £500 when taking their employers to industrial tribunals to deter what it describes as “vexatious claims”.
A spokesman for the Trades Union Congress said the IoD’s real aim was to make life easy for directors at the expense of their workforce and to lower pay and conditions in the NHS.”
The bottom line is: it is a global class warfare. The transnational capitalist class is going for broke on the rest of us, using its wealth, political clout, complicit media figures and proxy movements like the Tea Party to conclusively complete the capture of a decaying system.
The impetus for this is not hard to grasp: a massive financial crisis caused by the financial sector, but blamed on the poor and the not-white, that made quite visible the growth of social inequalities that have been papered over by easy credit that sustained consumption.
“As the dramatic events in North Africa continue to unfold, many observers outside the Arab world smugly tell themselves that it is all about corruption and political repression. But high unemployment, glaring inequality and soaring prices for basic commodities are also a huge factor. So observers should not just be asking how far similar events will spread across the region; they should be asking themselves what kind of changes might be coming at home in the face of similar, if not quite so extreme, economic pressures.
Within countries, inequality of income, wealth and opportunity is arguably greater than at any time in the last century. Across Europe, Asia and the Americas, corporations are bulging with cash as their relentless drive for efficiency continues to yield huge profits. Yet workers’ share of the pie is falling, thanks to high unemployment, shortened working hours and stagnant wages.
Paradoxically, cross-country measures of income and wealth inequality are actually falling, thanks to continuing robust growth in emerging markets. But most people care far more about how well they are doing relative to their neighbours, than to citizens of distant lands.
The rich are mostly doing well. Global stock markets are back. Many countries are seeing vigorous growth in prices for housing, commercial real estate, or both. Resurgent prices for commodities are creating huge revenues for owners of mines and oil fields, even as price spikes for basic staples are sparking food riots, if not wholesale revolutions, in the developing world. The internet and the financial sector continue to spawn new multimillionaires, and even billionaires, at a staggering pace.”
As Rogoff notes, political corruption and pool leadership does not help, but inequalities are at the core of these global movements.
It’s a plutocrats’ world, and the rest of us are just potential sources of rent.
And things can only get worse with food prices rising to critical levels:
“At one time food was considered a poor speculative investment, because it was too perishable to be stored until market conditions were right for resale. But that changed with the development of ETFs (exchange-traded funds) and other financial innovations.
As first devised, speculation in food futures was fairly innocuous, since when the contract expired, somebody actually had to buy the product at the “spot” or cash price. This forced the fanciful futures price and the more realistic spot price into alignment. But that changed in 1991. In a revealing July 2010 report in Harper’s Magazine titled “The Food Bubble: How Wall Street Starved Millions and Got Away with It,” Frederick Kaufman wrote:
The history of food took an ominous turn in 1991, at a time when no one was paying much attention. That was the year Goldman Sachs decided our daily bread might make an excellent investment….
Robber barons, gold bugs, and financiers of every stripe had long dreamed of controlling all of something everybody needed or desired, then holding back the supply as demand drove up prices.
Some economists said the hikes were caused by increased demand by Chinese and Indian middle-class population booms and the growing use of corn for ethanol. But according to Professor Jayati Ghosh of the Centre for Economic Studies in New Delhi, demand from those countries actually fell by 3 percent over the period; and the International Grain Council stated that global production of wheat had increased during the price spike.
According to a study by the now-defunct Lehman Brothers, index fund speculation jumped from $13 billion to $260 billion from 2003 to 2008. Not surprisingly, food prices rose in tandem, beginning in 2003. Hedge fund manager Michael Masters estimated that on the regulated exchanges in the US, 64 percent of all wheat contracts were held by speculators with no interest whatever in real wheat. They owned it solely in anticipation of price inflation and resale. George Soros said it was “just like secretly hoarding food during a hunger crisis in order to make profits from increasing prices.”
An August 2009 paper by Jayati Ghosh, professor at the Centre for Economic Studies and Planning at Jawaharlal Nehru University in New Delhi, compared food staples traded on futures markets with staples that were not. She found that the price of food staples not traded on futures markets, such as millet, cassava and potatoes, rose only a fraction as much as staples subject to speculation, such as wheat.”
This predatory rent-seeking behavior knows no limit, financial, moral or geographical. The flip side of this is a deliberate strategy, once explicitly stated by Alan Greenspan, to maintain higher levels of insecurity for workers, after all, the Transnational Capitalist Class (TNC) does not need workers from any specific country, especially not the US. It needs to be able to freely roam the globe for financial opportunities to extract more rent.
But the gap in wealth along with the severing of national ties have also led to ideological hardening: the TNC (or the Cloud Minders, as I often call them, following David Korten and based on a Star Trek episode) thinks very poorly of the mere mortals.
This is something I have called elsewhere The New Sociopathy. As the article where the video comes from notes,
“The ranks of the very seriously wealthy grow and grow, and the gap between them and the societies they once belonged to, grows wider and wider.
Could it be that the Arab sheikh, the Russian oligarch and the American internet magnate have more in common with each other than they have with the people they purport to live among?”
Well, yes, that is why they are the TNC. The TNC’s control of wealth allows them to live lives completely disconnected from the rest of the world’s population (even the upper middle classes of the West). Their political clout allows them to have national governments divest themselves of their social responsibilities towards their populations while virtually wiping out taxation in the TNC. And their control of the media makes it possible for them to build and propagate narratives that blame the various dimensions of the crisis to the poor, the regulators (if only) and the minorities.
“There has been a concerted effort to bash public sector employees by either highlighting the few instances where pensions actually are exorbitant or just making things up. Untruths about Goldman Sachs, General Electric or any other major company rarely appear in the media, and are usually quickly corrected when they do. However, exaggerations or outright fabrication are a standard practice for those who report on state and local budgets when it comes to public employees.
The public has been bombarded with stories of public employees retiring with six-figure pensions while still in their early 50s. There may be some instances of such inflated pensions, but that is far from the typical story. If we look to New York State, the hotbed of bloated public budgets, we find that the state’s main retirement system pays an average pension of $18,300 a year. For many workers this is their whole retirement income since they were not covered by Social Security.
This is the general story of public pensions. Public sector workers are often better situated than their private sector counterparts, in that they even have pensions. But study after study shows that these workers paid for their pensions with lower wages than their private sector counterparts. It is tragic that so many private sector workers cannot count on a secure retirement, but it won’t help them to make workers in the public sector equally insecure.”
“When families take out a mortgage in the middle of a housing bubble, which may have been misrepresented at the time of sale, the homeowner has an obligation to repay the money to the bank. When people take on credit card debt, they absolutely have an obligation to repay the bank — even if it means changing the rules after the fact.
However, when the government signs a contract with workers, it doesn’t have to pay the workers’ pensions if it proves to be inconvenient. Of course, we may also throw in the fact that when the flood of bad mortgage loans issued by the banks threatened to push them into bankruptcy, the Treasury and the Fed give them trillions of dollars of loans at below market interest rates.”
“There certainly seems to be a pattern here. The story has nothing to do with preferences for the market or government intervention. The picture here is very simple: The rules get changed whenever it is necessary to make sure that money flows upward from ordinary workers to the rich. In 21st century America, upward redistribution seems to be the guiding principle.”
“Nothing better shows corporate control over the government than Washington’s basic response to the current economic crisis. First, we had “the rescue”, then “the recovery”. Trillions in public money flowed to the biggest US banks, insurance companies, etc. That “bailed” them out (is it just me or is there a suggestion of criminality in that phrase?), while we waited for benefits to “trickle down” to the rest of us.
As usual, the “trickle-down” part has not happened. Large corporations and their investors kept the government’s money for themselves; their profits and stock market “recovered” nicely. We get unemployment, home-foreclosures, job benefit cuts and growing job insecurity. As the crisis hits states and cities, politicians avoid raising corporate taxes in favour of cutting government services and jobs – witness Wisconsin, etc.
Might government bias favouring corporations be deserved, a reward for taxes they pay? No: corporations – especially the larger ones – have avoided taxes as effectively as they have controlled government expenditures to benefit them.”
In other words, the states are short of money not because they are too burdened by pensions and benefits but because corporations do not pay their proper share of taxes, as the rest of us (including public employees) do. It is the ideological triumph of the TNC that the general public has accepted their narrative of bad teachers, lazy government workers who need to be trimmed down.
The only solution is massive, global protest movements, a reverse shock doctrine directed at the TNC. It is in this context that the existence of organizations like Wikileaks become essential along with Net Neutrality. But that, in itself will not be enough. Fighting this means putting boots on the grounds and protesting not just the individuals (such as the Governor of Wisconsin or the Koch Brothers) but the entire system. And yes, such affairs are usually bloody. But what are the options? Obama is not going to be the labor’s knight in a shining armor.
“Amid great secrecy, about 200 of America’s wealthiest and most powerful individuals from the worlds of finance, big business and rightwing politics are expected to come together on Sunday in the sun-drenched California desert near Palm Springs for what has been billed as a gathering of the billionaires. They will have the chance to enjoy the Rancho Mirage resort’s many pools, spa treatments and tennis courts, as well as walk in its 240 acres away from the prying eyes of TV cameras.
But the organisers have made clear that the two-day event is not just “fun in the sun”. This will be a meeting of “doers”, men and women willing to fight the Obama administration and its perceived attack on US free enterprise and unfettered wealth.
As the invitation says: “Our goal must be to beat back the unrelenting attacks and hold elected leaders accountable.”
The reference to the accountability of America’s elected leaders is ironic, bearing in mind that the gathering has been convened by two brothers who have never been elected to public office and are among the most unaccountable and secretive political players in the country.”
Considering how friendly to business and wealth accumulation Obama has been (after all, Obama bailed out at least the financial, pharmaceutical, health insurance sectors), the only explanation for this attitude is that the wealthy demand absolute submission from politicians, in perception and reality. Anything that these wealthiest of the wealthy interpret as slight sign of not-total submission must be met with swift opposition.
And, of course, these men may be secretive but their views will be propagated by their media lapdogs:
“By similar vein, the guestlist for their gathering on Sunday is unknown. Past attendees at the twice-yearly event include supreme court judges, rightwing media celebrities such as Glenn Beck and Rush Limbaugh, prominent governors of southern states such as Bobby Jindal (Louisiana) and Haley Barbour (Mississippi), as well as leading figures from Wall Street and energy companies, and titans of industry.
The format of the gathering will be similar to previous Koch events, the last of which was held in Aspen, Colorado, in June. The assembled tycoons will talk about some of the Koch brothers’ pet horrors – the growth of government and state regulations, what they call climate change “alarmism” and “socialised” healthcare.
Then they will share ideas about how to tighten their grip on politics and the judiciary by shaping election campaigns.”
Again, there is no such thing as socialized health care or climate change alarmism or growth of regulations (one wishes). Those are code words that have been rendered meaningless, used only as dogwhistles. But this is clearly a perfect illustration of the way extreme wealth undermines democracy and why its accumulation should be restricted.
At the same time, of course, the Transnational Capitalist Class (the global version of the power elite) is having its annual meeting in Davos. And the TCC, of course, is not a diverse bunch.
“The skewed gender balance at Davos is a sensitive topic for the WEF, an organisation founded in 1971 by the German business school professor Klaus Schwab, which aims to bring together the planet’s top decision-makers to swap ideas on global economics and politics each January.
In the corridors, halls and meeting rooms of the Davos congress centre, there appears, at first glance, to be a decent proportion of women among the grey male suits. But many are spouses, media representatives or staff.
Only a few hundred actually have a sought-after white pass designating them fully fledged WEF delegates with access to the forum’s pointy-headed policy discussions and “ideas labs”. They include Germany’s chancellor Angela Merkel, blogging supremo Arianna Huffington, Facebook’s chief operating officer, Sheryl Sandberg, and Cynthia Carroll, the head of mining group Anglo American.
“Many of my generation of women have grown up in an era where we’ve kind of got used to it,” says Naina Lal Kidwai, the head of HSBC in India, breaking off from a chat over coffee with London’s mayor Boris Johnson. “In a number of the sessions I’ve been to – on the environment and finance – there have been no women on the panel and not many in the audience.””
Interestingly, Christine Lagarde states something that researchers on gender socialization have been saying for years:
“France’s finance minister, Christine Lagarde, told the New York Times that the “male-dominated chemistry” at her earlier visits to Davos had been galling: “You know you’re competent, you’ve look at your files, but somehow you feel inhibited.””
Interestingly, one of the topics of concerns of the gathering is that White men no longer seem to be the masters of the world:
“The second obvious dynamic is the asymmetric nature of the pick-up in activity, which has been heavily skewed towards emerging markets, most notably those in Asia. There is a real east-west vibe at this year’s gathering, summed up by the title of one session today: The west isn’t working.”
Translation: the Chinese, Brazilians and South Africans are beating us… at our own rigged game… no fair!
“A jobless recovery. Entrenched levels of high unemployment among the young. More than 1.5 billion people – half the global working population – in vulnerable or insecure jobs.
Those are the key findings of the latest health check on employment trends across the world released by the International Labour Organisation last night.
The ILO report makes depressing reading. Despite a relatively robust pick-up in growth during 2010, economic recovery made virtually no dent in the unemployment caused by the worst recession in the global economy since world war two. The official jobless figure stood at 205m in 2010, but that is almost certainly an underestimate since many of those who would like a job have given up hope of finding one, while millions more are working part-time when they would prefer full-time employment.”
This is where it is useful to recall Leslie Sklair’s notion that the transnational capitalist class has a political component, not just a corporate one. It ensures that global governance works the way the TCC wants it, at least that is Jean Gadrey’s point on his blog. As Gadrey bluntly states, for the very rich, the crisis is over.
High net worth individuals (HNWIs) – those whose wealth is over $1 million ready to be invested minus value of primary residence – have levels of wealth similar to those before the recession. This recovery is partly due to taxpayers coming to the rescue. After all, rescuing the very rich has been presented as beneficial to the common good. There is also great levels of inequalities among these HNWIs: over a third of their wealth is held by 0.9% of them.
If that is the case then, Gadrey proposes a tax on extreme wealth: 1.5% tax on assets, applied to the richest 0.15%. This would provide $600 billion, enough to fully fund the Millenium Development Goals. Because it would be global, it would be impossible for these super-rich to run from one country to the next to avoid paying it: a world wealth tax.
It is only fair, after all, the transnational capitalist class has raided the budgets of several nations to compensate themselves for the high-stake games they played, courtesy of taxpayers and the complicity of the political component of the TCC. This is one of the ways in which the poor and the unemployed subsidize the wealthy. Now that they have regained their wealth, these individuals are free to advocate for austerity and deficit-reduction policies and use the media component of the TCC to carry the ideological water.
And if the riff-raff protest (as with the G20 meeting in Toronto), well, the nation-state still has monopoly of violence.
Having the right name opens doors and gives access irrespective (and sometimes in spite of) merit and qualification. This is not exactly something new. It is classical social reproduction of class position and privileges. But, as I have mentioned before, the American society does not have a discourse of class except to reject the very notion in the name of a mythological meritocracy. Anyone who dares to bring up the issue is quickly accused of fomenting class warfare from the privileged (whoc have a clear interest in keeping the illusion of classlessness alive and kicking).
But as Chris Floyd demonstrates, lack of class analysis and awareness is something found on the liberal and progressive side of the spectrum as well, using an article from Walter Benn Michaels as support for his argument. Says WBM:
In other words, the switch from class analysis to identity politics as basis for progressive policy reveals something equally well-known: the New Left was never left at all. It was always the nice and cool side of neo-liberalism. Greater tolerance (and some legal rights) may give the illusion of greater social justice while discreetly (or not so discreetly) eating away at class conditions. It is a distraction from economic hegemony. Indeed, WBM uses the arrest of Henry Louis Gates as an example of how class analysis is absent in the accounts of the incident. Race is the almost exclusive focus of any narrative.
William I. Robinson (2004), A Theory of Global Capitalism – Production, Class and State in a Transnational World , Baltimore (MD): Johns Hopkins University Press.
"Governments are undertaking restructuring and serve the needs of transnational capital not simply because they are ‘powerless’ om the face of globalization, as the ‘weak state’ thesis would suggest, but because a particular historical constellation of social forces now exists that presents an organic social base for this global restructuring of capitalism. (…) Hence it is not that nation-states become irrelevant or powerless vis-à-vis transnational capital and its global institutions. Rather, power as the ability to issue commands and have them obeyed, or more precisely, the ability to shape social structures, shifts from social groups and classes with interests in national accumulation to those whose interests lie in new global circuits of accumulation. These latter groups realize their power and institutionalize it in emerging TNS [Transnational State] apparatuses that include supranational organizations and also existing states of nation-states that are captured and reorganized by transnational groups and become, conceptually, part of an emergent TNS apparatus. (…)
Far from the ‘global’ and ‘national’ being mutually exclusive fields, the global becomes incarnated in local social structures and processes. The disciplinary power of global capitalism shifts actual policymaking power within national states to the global capitalist bloc, which is represented by local social forces tied to the global economy. The new managers of the neoliberal national states are part of a new global ruling class and represent some of the more charismatic executive functionaries of a TNS." (109-110)
Except, of course, that governments are not really back in the driver seat. Take two examples here. The first is Matt Taibbi’s already classical report on Goldman Sach’s power over the global economy and the US government.
It is against this backdrop that it makes sense to argue for a strong global covenant, to borrow the expression from David Held although it is difficult to see at this time, such strong version being proposed even by continental Europe.
Saskia Sassen is, of course, a famous sociologist who coined the phrase "global city" to indicate the confluence and convergence of global processes enmeshed in national and local dynamics in the urban centers of the world, global North and South alike to create centers of economic and financial power.
According to Sassen, the destabilization of non-urban economies in the global South is going to accelerate the massive urbanization already taking place. At the same time, tent cities are also cropping up in the United States. Urban poverty is on the rise and it is affecting the middle classes and not just the usual poor and homeless. Large cities in the global North have seen their revenues plummet and therefore have cut back on services.
Global cities are an integral infrastructure of the global financial systems. It is at their heart that these new and risky financial "products" were designed. They are also the prime target for the crisis. The urban embedding of global cities with global financial flows also makes them vulnerable. Indeed, London and New York City, for instance, are being dramatically affected.
Financial flows targeted the cities themselves as investment objects, with the same short-term focus and high ROI. Look at Dubai with its massive luxury real estate developments not based on housing needs but on pure speculation (capital in search of profitable investments). Similarly, the sub-prime loans were based on the same logic. The financial world created extremely complicated instruments to extract wealth from modest households with high ROI. For Sassen, these mechanisms are destructive for the cities as housing units are now abandoned by the millions.
The globalization of cities has also produced similar structures in world cities: same business districts, same commercial centers and shopping malls, same luxury chain hotels, same airports with nice international terminals, all for the transnational capitalist class. For Sassen, this urban environment is dedicated to dominant economies but at the same time, cities compete through economic specialization.
So, what kind of stimulus do cities need? For Sassen, sustainable development is key to create jobs, private / public partnerships. Businesses badly need cities, their infrastructures and networks. This places cities in a favorable position to negotiate with the private sector.
I hate to use the Cloud Minders’s metaphor again but it does seem appropriate as illustration of a class who has been and still is plundering the Treasury with no sense of responsibility and a great sense of entitlement (because they are so competent and uniquely qualified, you see). Their disconnection from the rest of the social structure creates an in-group culture and their privileged position provides power to have one’s deluded vision (business as usual) validated through governmental policy rather than dismissed for what it is (collapsed system).
The type of thinking depicted by Elizabeth Warren is fostered in a specific environment: MBA programs at the most prestigious institutions:
Apparently not. Read the whole article and contrast the arrogance and entitlement that characterizes the culture of the program with Elizabeth Warren’s grasp of the notion of public service and the morality of financial issues:
Read the whole thing and you will see that it does not really matter what the political color of the executive administration is. The financial class (the most significant segment of the transnational capitalist class) is the true ruling class and the other segments of the TCC provide the necessary assistance from other parts of the social structure. The ultimate result is a major socialization of risks and privatization of bailouts.
As lone gunwoman without a gun, Elizabeth Warren does not stand much of a chance, armed that she is with her integrity and her sense of public duty and ethic.
Financial help now or spending peacekeepers later… that is the alternative put on the table by Liberia President Ellen Johnson-Sirleaf as the effects of the economic downturn are deeply felt in Africa, with dramatic reductions in investments, trade and tourism. Countries that, not too long ago were embroiled in civil wars might find themselves again in conflict. However, President Johnson-Sirleaf assumes that rich countries would actually care about yet another African conflict, which, is recent history is any indication, is doubtful.
Nevertheless, African countries are pushing their case for increased access to aid:
It is interesting to see the African leaders making the case for a stimulus of the world economy through aid to Africa as more productive than national programs.
However, for one thing, Western countries are also facing their political battles related to economic conditions and stimulus-related class conflicts. And for another, if these countries are going to pay attention to conflicts, Iraq and Afghanistan and potential conflicts in Pakistan will be the chosen ones (to use Virgil Hawkes’s concepts) whereas African conflicts are more likely to remain stealth.
Not unrelatedly, Muhammad Yunus made the case for reforming the economic system to make it work for the poor.
Moreover, Yunus also argued that the financial crisis is not the only crisis around but because it affects mostly the richest countries, more attention is paid to it. After all, the financial meltdown was preceded by a major food crisis and we still have not adequately dealt with the coming energy and climate crises. Ultimately, for Yunus, all these crises are the product of structural faults in the global economic system that is exclusively geared towards the maximization of profits.
At the same time, this crisis is an opportunity to radically change this failing system, after all, according to none other than Martin Wolf:
So, for Yunus, time to design a system that works for the people and not just the Transnational Capitalist Class and the Transnational Corporations. Indeed, it is this small number of people that have created such a disastrous situation. The real victims, for Yunus, are those who are losing their jobs and incomes and there is no bailout in place for them. [Heck, even Maddoff’s victims will get tax privileges while people will have to absorb their losses on their pension plans and 401ks.] I am guessing (since the article does not mention it) that he is referring to his social business model.
And since this crisis is global, then so should be the reforms of the financial system, and maybe, just maybe, the reforms should start at the bottom:
Color me unconvinced. As much as I find Joseph Stiglitz one of the most persuasive economists, and with all due respect, we already have global economic institutions and they were not able to prevent this disaster and are not able to provide solutions or reforms. And the proposed world economic council would be useless if it is made up of the same kinds of people who already shaped the global institutional structure of the world economy.
And besides, designing a reformed global economic system would require some calm reflection and analysis and that is just not going to happen as long as global financial institutions keep shocking the system to extract more money from the US Treasury with some high class form of blackmail.