Back to the Future

Ideologies that serve elite interests never really go away, they just reconstitute in new guises.

In A Brief History of Neoliberalism, author David Harvey argues provocatively that neoliberalism is a continuation of early capitalism, whereby modern corporations are busy re-privitizing the commons.

“Accumulation by dispossession is the main mechanism whereby neoliberalism achieved this redistribution of wealth. Also, accumulation by dispossession is an extension of the Marxian concept of primitive accumulation whereby during the onset of capitalism, common lands were privatized, labour was commodified, and exchange was monetized and financialized.”

At this point, it’s probably a good idea to examine the origins of capitalism. Early capitalism in Great Britain necessitated the enclosure laws, where peasants where driven off the land by government force at the behest of the factory owners who required a large desperate workforce to slave away in their dangerous factories. Before the enclosure laws, peasants could hunt, gather and maintain a small garden plot, enabling them to make a living and enjoy some measure of autonomy.

In The Invention of Capitalism: Classical Political Economy and the Secret History of Primitive Accumulation, Michael Perelman examines early capitalism and reminds us that economic writers such as Adam Smith portrayed early capitalism as “a natural system of voluntary market relations, which are devoid of conflict, and benefitted all of mankind.”

What really happened was the violent seizure of other people’s means of production– primitive accumulation.

As Perelman articulates, the peasants were “forced into the factories with the active support of the same economists who were making theoretical claims for capitalism as a self-correcting mechanism that thrived without needing government intervention.”

In reality, capitalism absolutely necessitated government intervention. Violent intervention. The peasants were forced off their land by the British government who attacked the economic independence of the rural peasantry through a series of Enclosure Acts.

“Some enclosures had to be carried out by force and many sparked resistance from users of the common land, including the tearing down of fences used to enclose the land. As a historically significant process of land privatization, the Enclosure Acts are sometimes seen as one or both of building blocks of capitalism and theft by major landowners from the peasantry.”

Silly peasants. How are capitalists supposed to make their fortune without a vast pool of workers willing to perform any number of hazardous jobs to stay alive? The great thing about early capitalism, at least from the perspective of the owners, was that the early capitalist didn’t have to take care of their workers. This was a new development unlike centuries past where the feudal lord owed some measure of care to the serfs.

Wealth in America was acquired much the same way as in Great Britain, through primitive accumulation. British colonialism of North America was simply the next stage. Capitalism requires new markets, raw materials, and workers to grow, which it must. Having a new world to plunder was essential.

In A Peoples History of the United States, Howard Zinn makes this abundantly clear. ” …the frenzy in the early capitalist states of Europe for gold, for slaves, for products of the soil, to pay the bondholders and stockholders of the expeditions, to finance the monarchical bureaucracies rising in Western Europe, to spur the growth of the new money economy rising out of feudalism, to participate in what Karl Marx would later call the ‘primitive accumulation of capital’.”

OK, so the British colonists used primitive accumulation to acquire wealth. Didn’t we have a glorious American revolution to overthrow the redcoats and end this plunder?

Not exactly.

The new American elite quickly used the success in the revolt against Great Britain for primitive accumulation of their own. The American revolution was an elite revolution, after all. This salient fact helps explain the differing response from the aristocrats of Europe to the French Revolution versus their response to the American Revolution. One was deeply threatening because of the proletariat nature of the revolutionaries whereas the other was just swapping one set of elite for another.

Certainly we’ve moved past that now, right?

Progress, while uneven, does happen. Decades of struggle combined with the shock of the Great Depression brought New Deal reforms to the US.

However, by the 1970’s the liberal regulatory state just wasn’t working out for the wealthy. They didn’t have all the money and there was a real lack of bowing and scraping going on. Under neoliberalism, the privatization of previously publicly owned parts of the mixed economy was instituted as a means to reconstitute class power.

In essence, neoliberals re-privitized the commons.

The conservative architects of the neoliberal economic transformation were clever. To enact their agenda they needed to do what rulers have done for centuries–divide and rule. As writer Rick Perlstein, makes abundantly clear in his seminal work Nixonland, conservatives bent on overturning New Deal reforms set about employing a Southern strategy to convince poor whites to vote against their own economic self interests as a backlash against the Civil Rights laws passed by the Johnson Administration.

The Christian right was also deployed to further neoliberal economic and political goals. These conservative Christians viewed the liberal state as providing special privileges to groups such as gays and lesbians (same sex marriage), and women (abortion), which they morally disagreed with. That these ruinous economic policies hurt these denizens of the Christian right who came from the poorest part of the United States and stood to lose the most from an adoption of neoliberal economic reforms was a bonus. Instead of casting blame on the real villains, these Christian conservatives just doubled down in their hatred of government.

Wash, rinse, repeat.

What has this corporate seizure of the commons brought us? Crumbling infrastructure, schools and roads. And, with corporations keeping profits offshore to prevent taxation, and opposition in government to public spending, the only solution offered is more privatization. The corporations that presently sit astride the commons, keep jacking up the price of living with their rent gauging and contractual rip-offs. Examples are everywhere–Monsanto, Tyson, Goldman Sachs, Comcast, Verizon, AT&T, Wal-Mart, etc. Especially pernicious are the payday loan and check cashing services.

The privatization of roads, utilities, schools and water have returned us to a semi-feudal state, and made it near impossible to exist outside the corporate universe. How much better would it be if we had public infrastructure to allow us to make a living as a small businessman or craftsman? Or, being able to live your life on your own terms, without a ton of dough? And, what about having time and space to create a vibrant society, where moms or dads have the time to take care of kids and or parents, volunteer for community service, coach Little League, or mentor a Scout troop?

These are the questions we ought to be asking of our government officials.

Political/economy is who gets what, and who pays the price. By re-privatizing the commons, corporations are enriching themselves and impoverishing the rest of us.

There is another way available to us. Progressive era economist, Simon Patten believed that keeping infrastructure in the public domain would reduce the overall price structure and allow small businesses to flourish. What Patten referred to as the forth factor of production, would help foster an economy where all could participate. 

Simon Patten (1852–1922) argued that “…freeing markets from one source of economic rent (by taxing land rent) would merely leave the surplus to be taken by other monopolists and rent extractors (railroads, Wall Street trusts, and basic privatized utilities). To prevent unearned income (economic rent) from adding to the economy’s cost of living and doing business, potentially rent-yielding infrastructure should be kept in the public domain as a “fourth factor of production.” Instead of rentiers making a profit by charging access fees and user fees, the return to public investment should take the form of reducing the economy’s overall price structure.”

Here’s a great example of how it can be done, with the FCC chairman proposing that we treat the internet as a public utility.

“In an op-ed to Wired magazine posted online, Federal Communications Commission Chairman Tom Wheeler said his plan would regulate Internet service much like phone service or any other public utility by applying Title II of the 1934 Communications Act.”

 

 

 

 

 

 

 

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