Privatizing public services from Barnet UK to Chicago Illinois

This video concerns a London borough called Barnet. It will be of interest to folks in Britain. But as we watch it, it could be Detroit MI or Stockton, Vallejo or Riverside here in California. It could be Central Falls Rhode island. Workers of the world unite makes sense when we see that what is happening here is happening thousands of miles away, an almost identical process. In the underdeveloped world it is happening in a slightly different and more openly brutal way. Striking miners shot in South Africa, garment workers that provide Walmart and other retailers with their wares murdered by criminal negligent bosses who refused to provide emergency exits in case of a fire and a fire killed them.

Workers and indigenous people being poisoned by energy companies in Latin America and Africa. The idea that those within a nation cannot be divided, are "one" is a ruse; workers and capitalists all Americans. We have more in common with workers throughout the world no matter what their language or cultural differences, we have a common class interests, the role we play in the production of human needs. We can only stop this madness because,  as Mario Savio famously said

"There's a time when the operation of the machine becomes so odious, makes you so sick at heart, that you can't take part! You can't even passively take part! And you've got to put your bodies upon the gears and upon the wheels…upon the levers, upon all the apparatus, and you've got to make it stop! And you've got to indicate to the people who run it, to the people who own it, that unless you're free, the machine will be prevented from working at all!"

The time is even more ripe now, we have to stop their machine and set ours in motion. We cannot make capitalism "nice". Capitalism is a permanent state of war. We have allies in India, Africa, Latin America, all the continents. We have the power to change the world and build a future for all humanity. Time will not wait forever. Below is a short report from some of the activity in Barnet against these measures.  We are all in the same boat. We can all fight back against the same enemy.

Misery, death and hunger an everyday reality for millions in India

This video is from Bloomberg Business Week.  It accompanies an article I read in the latest issue that gives a vivid account of life in an Indian village as told by an American whose father was born there.
What the article lacks of course is any serious criticism of capitalism.  India, the US capitalist class likes to boast, is the world's most populous democracy.  The problem though is corruption and "crony capitalism" and that India has not gone far enough in opening up its economy.  More of the so-called "free market.", that's what will cure India.

If India was a Stalinist state like the former Soviet Union, or the author was a Cuban exile retuning home and detailing the poverty and hunger that existed there, the article would very clearly explain that "communism" or "Socialism", in other words, the social system was at fault, was the reason the economy and society was unable to develop. But when it comes to capitalist economies, it's as if a social system of production doesn't exist.

That said, I found the piece very moving and a real glimpse in to the everyday misery that millions of Indians face every day.  1000 children a day die due to diseases related to insufficient water and sewage systems. Two million Indians are infected with tuberculosis each year and 400 million have no electricity at all. This is the the failure that capitalism is in India.

The author describes the sanitary situation, "Every act of nature requites a 15 minute walk to a field where pigs rot around in the remains of yesterday's visit."  And the small river that runs through the village, "Downriver from the village around a quick bend, the bank was a squelching, stinking toilet."

India, like the rest of us, needs less of the market not more. The article is to be found in the latest issue of Business Week

Obama's honeymoon will be short: crisis, conflict, class polarization is ahead.

by Sean O'Torrain

Obama's honeymoon? I think it will be short. I also think that it will be crisis ridden on many fronts.

He is already into trying to negotiate US capitalism's debt with the Republicans. The liberal wing of the Democrats will be pressing him to tax the rich. In the Republican Party the extreme right will try to hold their leaders to stand against this. Obama is liable to cave. This will increase tensions inside the Democratic Party maybe leading to splits.

This debate over the deficit shows the US economic system is in crisis, but also shows the political crisis of US capitalism. It is possible the Republicans could split in the next four years. This would open up a whole new political situation here where the two parties of US capitalism could begin to lose their political monopoly. This would be of world-wide significance.

This debacle of Petraeus and the top army brass who were conducting the wars in the Middle East will further discredit the US military, one of the few US capitalist institutions that was not looked upon with complete contempt. Read the descriptions of the shenanigans that were going on amongst these top brass and the so called hospitality groupies and the lavish dinners that these people held and the 20,000 to 30,000 emails that one general is reputed to have sent. Where did he get the time? No wonder US capitalism is losing the wars with its generals doing all this while the military rank and file were fighting and dying in the Middle East.

We should think of this serious crisis in the US military this way. Two Months after the Russian Revolution of 1917 formal ranks and the saluting of officers was banned. The salute is a recognition of the superiority and integrity of the officer caste, and the top ranks of all military's are from the ruling class or linked closely to it; the Bolsheviks got rid of it.  The salute is to make the soldier at every rank commit themselves to unquestionable loyalty to the chain of command.  Imagine what a soldier will think about now as he or she salutes Petraeus, or what appear to be an increasing number of others like him.  They will not be able to keep from laughing. This is a big blow to the military. And it was Petraeus remember who pushed Obama to stay longer in Afghanistan and launch a surge there against Obama's instincts.

Another area of great crisis for Obama is liable to be the Middle East. What will happen there in the next four years? It is likely that Syria will explode, it is likely that different peoples divided up  and transferred in to many different states by imperialism in the past will, as war and fragmentation sweeps the area, seek to build their own national states again breaking up the existing states further. There will even be a tendency to going back to the tribal divides again. Something will also happen in the next four years over the nuclear program of Iran and the Zionist regime in Israel and due to the Zionist regime's stupidity and arrogance the Israeli Palestinian conflict will continue. 

Then there is the world economy. I cannot see how Obama will get through his next four years without a new and much worse 2008 type collapse and a much worse recession than the one we are coming  through. I also cannot see how trade and other tensions with China will get anything but worse. In China itself it is hard to see the ruling elite there getting through the next four years without a huge increase in uprisings and instability. At some point, there will be more open conflict between the Stalinist bureaucracy and the rising Chinese capitalist class.  This will inevitably lead to splits in the ruling party and a more confident and open capitalist class making a move for total control. I cannot see the Euro crisis getting anything but worse and the movement of the working class there increasing. In Russia, stability will also be hard to maintain; the country is already extremely volatile and divided. In Africa and Latin America we are also seeing increasing movements of the working class. The Venezuelan elections which have kept Chavez at the helm was a real blow to US imperialism in the latter area.

Within this process we will see the emergence of working class women as never before. Half the factory workers in the world are now women. They will not sit back. Already in advanced capitalist countries and in countries such as Bangladesh we have seen them take action. And in the Arab Spring there is increased struggles against the sexism of the Islamic regimes and ideology.

Not the normal approach to Staten Island

And of course there is the the big one; climate change, pollution and the general environmental devastation that is the result of the capitalist system of production. What cities, what areas, will either be submerged under water or be made inhabitable through drought, pollution and nuclear catastrophe in the next four years? The storm in the NE of the US and the Caribbean that brought 6 foot walls of water down the streets of Staten Island, the tsunami and nuclear catastrophe in Japan, Katrina, the oil spill in the Gulf, and the melting of the ice caps, these are signs of  the developing catastrophe under capitalism.

Yes Obama is going to have a second term of it. The inspiring struggles that are taking place will give great opportunities to the working class. In that sense we are in a very favorable period. Here in the US we would hardly know it but there have been massive strikes in South Africa that have threatened the world production of Platinum. These have been joined by strikes of farmworkers and it comes after the murder of 40 or so workers by the state. The workers will not be cowed; not like their present leaders.  Today, in Europe, there are protests and/or general strikes in 23 countries.  There are calls in some quarters for a mass Europe-wide march on the European Parliament in Brussels. The ongoing struggles in Latin America and China and among the world's indigenous people against the destruction of their lands are ongoing.   But if these opportunities are not taken, they will turn into their opposite. As we say democratic international socialism or catastrophe and the destruction of life on earth as we know it.

Obama and capitalism is going to have their hands full, and so are the working gclass.

Unless the working class takes power and replaces the present clique that control the means of production of human life, then life on earth as we know it will be destroyed.  I believe we need to fight to build mass united front type formations, with programs that take on, confront and are able to throw back the capitalist offensive and open up the door to a worldwide working class offensive. This would put on the agenda of the mass of the working class once again the issues of capitalism and socialism. This can come quickly. After all think that it was only slightly over 20 years ago when socialism was declared dead and that history had ended.

The workers' movement world-wide has already ended this period. Within these united fronts that I speak of, whether they initially take the form of united fronts or united front type parties we have to also build revolutionary socialist currents which will be able to draw the lessons of history and  put a cutting edge on these movements, a cutting edge on these great chisels----one that can allow them to end capitalism and build a democratic socialist society.

The US health care system, a lesson in market failure

Health care per cap spending country comparison (OECD

by Richard Mellor

 "I owe the public nothing"
  JP Morgan

As public services are cut along with the public sector jobs that provide them, and the Obama administration prepares for four more years of privatization policies, the extremely wasteful and inefficient US health care system continues to drain the public purse.  The inefficiency of the private sector is not just laid bare when rescued in times of severe crisis like the recent bank bailout; capitalism survives on permanent welfare handouts through its daily fraud and plunder of society's wealth. It's very existence is based on exploited Labor of course.

The US health care industry from the providers to the drugmakers and manufacturers of medical devices, feeds heavily from the public trough.  US healthcare spending went from from 9% of GDP in 1980 to 16% of GDP in 2008 and an all time high of more than 18% by 2011. The much maligned (by the US media)  Canadian health care system which in 2006 was 10% of Canada's GDP and was 70% funded by the government while the US spent 15.3% in that year with 46% funded by the government.  A major difference with regard to taxpayer funding is that in the US where the system is a business and more market oriented, the fraud and plundering of state resources is rampant and the taxpayer picks up the tab for those who that the market abandons as well.

"Almost every estimate is that 30% of US medical spending is unnecessary, including fraud" says Elliot Fisher, a Dartmouth College medical professor and director of the Dartmouth Atlas on medical disparities. And a federal report published today and reported in the Wall Street Journal claims that hundreds of nursing homes had billed the taxpayer for skilled services that weren't performed.  "They're billing for therapy they don't provide or which the patient doesn't need" says Jodi Nudelman, a New York state official.

This investigation is just the tip of the iceberg and reveals some $1.5 billion in Medicare theft.  The theft is so rampant the capitalist class feels a need to curb some of the excesses. The Obama administration has recovered some $3 .7 billion in stolen taxpayer funds over the last three years. Coupled with this latest find that would build a few schools I think.  It's unlikely that anyone went to jail for such destructive anti-social activity, no three strikes for them, not even ten or twenty strikes for the perpetrators of such felonious activity.

Those (including some mislead workers) who argue that the market has the answer to all things should take note.  This fraud is a result of the market, it is built in to the system, a system based on theft and exploitation.  Despite these minor efforts on the part of the capitalist class to curb some of the excesses and make an example of some of their naughty boys in the aftermath of the crash and the anger that has resulted from it, they will not rectify this problem. Readers may remember that the responsibility for framing the rules and regulations for deep water drilling were handed over by government regulators to the energy companies themselves.  Then we had the BP spill.  While we would not opposes regulation, the capitalist class cannot make the system nice, make it human and nature friendly.

The opportunities for profit making in the US sickness industrial complex are considerable. More than two dozen pharmaceutical companies made more than $1 billion in profits in 2008 while one report by Health Care for America Now, says that America’s five biggest for-profit health insurance companies ended 2009 with a combined profit of $12.2 billion, an increase of 56 percent as 2.7 million people lost their private coverage. Isn't freedom swell?  And we know that most bankruptcies in the US are related to medical expenses.

The market driven US health care system murders more people than all the terrorist groups put together.  I commented on the recent meningitis outbreak another example of market failure with devastating results.  The death toll now stands at 32 with 438 people infected in 19 US states.  The perp was the New England Compounding Center which made the steroids that the victims took for their pain.  Now, the FDA has found that Ameridose, another drug mixing pharmacy has not the best manufacturing practices either and is guilty of numerous violations of US manufacturing standards.  FDA inspectors found microbial contamination and that sterile gowns and equipment weren't sterilized at all. "Insects were observed to be located" in areas where the finished products were packaged and stored and "At least one bird was observed" in the same area the FDA reports.
The FDA claims that complaints of fetal stress, a result of the company's childbirth drug weren't treated seriously.

It turns out that the founder of Ameridose is Barry Cadden, the president of New England Compounding Center responsible for the meningitis deaths. Cadden jumped ship and resigned from Ameridose right after the meningitis hit the news a month ago.  Ameridose hasn't been linked (yet) to the outbreak but we can see how they're all connected these folks. In fact, these are the people that are applauded by the Wall Street Journal, by Forbes Inc and by all the serious journals of capital.  These are the people we owe our existence to because they create profits, therefore jobs.  They also create starvation and misery throughout the world and a small outbreak of meningitis here and there. The entrepreneur is the the good guy in capitalist society, the paragon of virtue and epitome of success.  It's not that they are bad or good though, it's that the system of production, the means by which we produce the needs of society is hostile to a healthy human existence and a healthy planet. 

Now this doesn't come as too much as a surprise.  Most Americans are well aware of the corrupt and ruthless nature of the system, look how many people don't vote and stay clear of politics altogether.  Even those who vote, hate politicians.  The heads of organized Labor offer no explanation for this crisis other than greed in the abstract and the left has no significant influence in the working class whatsoever. The biggest problem is that people do not see a way out.  The occupy movement offered a glimmer of hope and received tremendous support for a while but lost steam under the influence of forces that relied on hidden and unelected leaders and tactics that excluded political action and any serious mass orientation to the working class.

The caring of human beings, of whole populations is a social need and should not be a business. Take the profit out of health care and we will have healthy people and not richer health care carers and other leeches in the sickness industrial complex. The top executives at the nation's five largest for-profit health insurance companies pulled in nearly $200 million in compensation in 2009

A step toward a healthier society and a real health care system would include:

Fully staffed free clinics providing no charge, basic health care in every neighborhood

Free Comprehensive health benefits with an emphasis on preventative care

Vision care, dental and hearing aids . Women’s health care including birth control, morning after pill, and abortion on demand.

Alternative therapies with proven medical benefit such as acupuncture and chiropractic care . Mental

health care with emphasis on counseling, not just prescribing pills

Take the profit out of medical research

Create a publicly owned, democratically controlled organization to do medical research, widening and democratizing the current role of the National Institute for Health . The direction of medical research and the function of care to be made by elected councils of researchers, health care employees, and community members: Unite and Empower Healthcare Workers

Create an industry-wide union of healthcare workers to include every worker in a hospital from the janitor to the surgeon . Improve working conditions for healthcare workers: wages, shift lengths, nurse-to-patient ratios . Free medical education: Nurses, technicians and doctors to serve the public without decades of debt .

Build a United Front direct action movement to drive the corporations and the profit motive out of this crucial social need and through this build an independent worker or Labor Party to strengthen the power of working people, the unions and community organizations*

*Much of this program comes from a Facts For Working People Health Care issue we published in March 2007. For a pdf of this issue send and e mail to we_know_whats_ up@yahoo.com

Capitalism's legacy of misery and insecurity. An inefficient system

by Richard Mellor

Back in 1986 when a group of coupon clippers, Kohlberg Kravis Roberts, bought Safeway stores in a leveraged buyout, the New York Times wrote of these deals being all the fashion but untested as they were based on debt. At that time, KKR as the leveraged buyout firm was called, came under fire for eliminating jobs in the process.  The Union leadership vilified Safeway for selling stores to non-Union owners as it reduced its operations from 2,326 stores to 1161. 

The sale of Safeway's Dallas division stores to nonunion operators put the company in a spotlight it wanted to avoid. In a speech, the Rev. Jesse Jackson blasted the chain for eliminating 9,000 jobs.  The company realized it would be better to make some sort of deal, the deals the Union officialdom are so eager to make.  Safeway agreed to sell the remaining  stores to Union operators in return for pay cuts so they could compete with non-Union (sound familiar). The Union hierarchy is very easy to please.

This disastrous tactic of the UFCW leadership and the entire leadership of organized Labor designed to maintain dues revenue, has brought us to the point where grocery workers with 41 years of service here in California can earn the dizzying sum of $21 an hour.  New hires receive less pay and worse benefits than their co-workers creating all sorts of hostility and division within the workforce. What this collaboration with the bosses has meant for all workers is a declining standard of living and Union power in the workplace and society as a whole.

The bosses were quite pleased of course as it is profits that that matter to them,  ''The fact that Safeway is healthier is due in large part to the cooperation the unions have shown us,'' said Peter Magowan, Safeway CEO at the time.

George Roberts, a KKR partner had this to say:
''We gave them the courage and the discipline to do what needed to be done. ''When you clear away the brush, you release the growth potential of the remaining trees, that's really what happened at Safeway.'' Sounds like a scene from Being There, the Peter Sellers' last movie.

William J. Olwell, a UFCW official and director of collective bargaining added:  ''It's kind of like contracting a dread disease for which the cure is very, very painful, and you're never the same afterward, but you survive''.

Yes, we survive "brother" Olwell.  Or some of us do.  Susan Faludi wrote an excellent piece about the Safeway calamity pointing out that a few years later, KKR "...sold 10% of the company (but none of their own shares) back to the public---at a price that values their own collective stake at more than $800 million more than four times their cash investment."

Not bad, not bad at all.  But what was the consequence of this for workers?  Faludi shares some details: "Employees......have considerable less reasons to celebrate....63,000 managers and workers were cut loose from Safeway through store sales or layoffs." It's true that some were hired back by the new owners of sold stores but as she points out, "...at lower wages...".  The rest were unemployed or forced in to part time work. When you add on the stress this causes to our families and our communities, the illness, depression, domestic violence, it is economic terrorism---it is class war.

Faludi shares one of the more extreme tragedies of this class war, a story about James White, "..a Safeway trucker for nearly 30 years in Dallas."  White was still unemployed a year after the deal and "..marked the one year anniversary of his last shift at Safeway this way: First he told his wife he loved her, then he locked the bathroom door, loaded his 22-caliber hunting rifle and blew his brains out."  "Safeway was James's whole life" said his widow. * 

That's the market at work, it makes a man out of you. Makes you strong. And it's worth it isn't it? At least it is for the coupon clippers. From its start in 1976 through September 2004, KKR's profits stand at about  $34.7 billion according to CNN Money. June 2005.

Firms like KKR, Goldman Sachs, Buffet's Berkshire Hathaway or Romney's Bain Capital are composed of parasitic gangs that suck the life blood from society.  The production of human needs is the basis for life, without production, life cannot exist.  The capitalist mode of production where production occurs not for need, not for the creation of use values, but for profit, is the most brutal and the most destructive.  It destroys us as human beings and is on its way to destroying the planet making it uninhabitable along the way. It's progressive historic phase has passed. It can no longer take human society forward.

KKR along with Goldman Sachs and other bloodsuckers have their slimy little paws in all sorts of deals today.  They bought the Texas utility TXU five years ago and we can see how destructive and inefficient these activities are for humanity.  TXU produces an important social product, electricity.  The coupon clippers paid $43.2 billion for it, money borrowed from investors.  The deal is not making money for the investors as of yet due to what Business Week calls "the company's troubles".
But these private equity guys are raking it in.

For constructing the deal with this utility that should not be privately owned or managed,  the coupon clippers paid themselves $528 million in fees. Meanwhile, TXU has changed its name to Energy Future Holdings and is still massively in debt. "The company is technically insolvent" says Bloomberg with $52 billion in liabilities and $44 billion in assets.  Another group of social parasites, derivatives traders are betting that the company holding the debt will default within five years. No worries, taxpayers can always step to the plate on these matters.

Payments to the buyout firms so far include $300 million for their advice, yearly management fees of $171 million and $57 million for "consulting on debt deals".

This is an entity that produces energy for use in society.  "This is a utility, and its product is electricity that it sells to the public, but its really a debt house", says Tom Sanzillo the director for the Institute for Energy Economics and Financial Analysis.

This sort of activity is not production, it is gambling, it is crude exploitation of Labor and of the natural world.  It is criminal.

As workers, we are taught from birth that the owners of capital, the private sector are the creators of jobs.  That they take the risks.  But as I have repeatedly pointed out, most of society's important developments have come from public, not private funds and institutions.

We are not taught to think of capital, of money in the bank as our product.  But it is.  The capital that is used to employ Labor power and put it to use has its origin in past Labor power, the life activity of previous workers.  Sure, I can go mortgage my home which I partially own in conjunction with the bankers and if I have a job that pays anything decent borrow $50,000 and open a coffee shop and work for myself and maybe purchase the Labor power of a worker or two for $7.50 an hour. If it doesn't work out I can be homeless maybe or become a wage worker myself if I'm lucky. It's not likely I'll end up like Bill Gates.

But this capital is a collective product just like the billions that are borrowed to buy major corporations like Safeway that distributes food and other household products or utilities like TXU that provide us with a necessity like electricity. 

We must transform our thinking about this stuff called capital which consists of the surplus value created by human Labor power over time. It is ours, not "the banks" or bankers or hedge fund managers and other coupon clippers to allocate and use for further production. Contrary to all the propaganda, capitalism is an inefficient and wasteful system.  In the most successful and powerful capitalist economy in history it has never been able to provide the basic necessities for all and globally it has been a disaster. It has had its day as they say.

We are conditioned by their media, their schools, and their pulpits to think that workers can't govern society; that the capitalist mode of production, that they admit is flawed, is the end of civilization, the apex of human life and that there is no alternative.  That's what the feudal aristocracy said about their system and their rule. We are collective creatures and gregarious by nature, it is what helped us survive generations, long before the capitalist mode of production dominated. A democratic socialist society is not utopian, it is possible but more than that, it is a necessity if we want our children to live on a planet that can sustain productive human life in harmony with the natural world.

Society needs new managers.

Here are Some prominent coupon clippers of  various types.

Net worth:
Henry Kravis KKR : $4 billion           Leveraged buy outs
George Roberts KKR: $3.7 billion      Leveraged buy outs
Warren Buffet   $47 billion
Ronald Pearlman $12 billion   Leveraged buy outs
Carl Icahn    $14.8 billion Leveraged buy outs
John Paulson: $11 billion     Hedge fund manager
Koch Brothers $62 billion     diversified swindlers
Walton Family (Wal Mart) $105 billion   Idlers.
Source Forbes

* The Reckoning: Safeway LBO Yields Vast Profits but Exacts A Heavy Human Toll WSJ 5-16-1990 PDF

Are Chinese women too hairy? Where there's no market, capitalism creates one.

source: Bloomberg Business Week

by Richard Mellor

I received a response to one of my blogs the other day that was interesting.  It was from a right wing nutcase who attacked my defense of Chavez’ s record fighting illiteracy in Venezuela and how irrelevant the building of "22 Universities in 10 years" is if  “they are just indoctrinating students into Communism…”.  Comments like these are not uncommon from some Americans whose knowledge of the world and history comes from mouthpieces of the corporations like Rush Limbaugh.

The view that we have a “mind of our own”and that we “think for ourselves”, nonsense propagated by the big business media, is quite strong here.  We are free individuals we are supposed to believe, influenced by no outside forces; society is irrelevant.

If that were true, US corporations wouldn’t spend billions of dollars on advertising, trying to convince us to buy their products.  US advertising revenues (excluding Political and Olympics) hit $171.7 billion last year, and total advertising for the 2^nd quarter of 2012 finished the period at $34.4 billion---this  is no small sum. The ten largest advertisers spent $3.5 billion in that period. Lots of useful social projects wasted away in these expenditures.

Then there is all the money spent by US corporations abroad.  Global capitalism has mastered the art of deception and manipulation and is relentless in this ideological assault on the US population. Much of this advertising is spent convincing us to buy what we don’t need. Sociologists and psychiatrists are hired by corporations to help them influence what we think about ourselves and the world around us.  Influencing children is crucial in order to pressure their parents, whose lives are consumed by work and survival, to succumb and buy the goods. Eric Schlosser writes in Fast Food Nation, “Marketers now use different terms to explain the intended response to the ads---such as ‘leverage’, ‘the nudge factor’, ‘pester power’.  The aim of most children’s advertising is straightforward: get kids to nag their parents and nag them well.”

According to Schlosser, dream research has found that about 80% of children’s dreams up till the age of six are about animals so market researchers attempt to create mascots, imaginary characters that can help them sell their products, “imaginary characters who perfectly fit the targeted age group’s level of cognitive and neurological development.” Says Schlosser. The capitalist class reigns supreme when it comes to preying on children, no “pervert” database for them. This ideological terrorism kills a lot more people than any "foreign terrorists" for sure.

We are all targets in this war to influence our thinking.  Having the right appearance in order to find a mate, achieve success or feel confident in the big wide world out there is a must.  The marketer must convince us we are in need of their product; for this they have the “personal care” industry.  Second quarter spending on personal care hit $1.9 billion according to Kantor Media that tracks such things.  There’s a lot of competition among leading marketers of cosmetics, hair care and skin care products not to mention new cures for new ailments like baldness, erectile dysfunction and restless leg syndrome to name a few.  But women are a prime target.

The changes in China have opened up new markets for the purveyors of products. I touched on the emerging “look pretty”industry in a previous commentary in particularly, in the case of Chinese women and their physical structural appearance.  

The makers of Veet hair removal cream are making big moves in China, a market that has incredible potential.  But a major problem is that Chinese women don’t have a great deal of body hair.  No worries, the corporation will deal with what is at hand and has “embraced a new marketing plan” writes Bloomberg Business Week *.  Veet, owned by Reckitt Benckiser (Wreckit indeed) has new ads that equates “Hair free skin with health, confidence, and ‘shining glory’” , BW reports.   The assault is pervasive and vicious, “It’s not how much hair you have”, Veets top dog in China says, “ …it’s how much you think you have.”  Veet wants to make every Chinese woman “conscious of every stray follicle”, this is what will bring results, “If your concern level is high enough, even one hair is too much” says the Veet executive.So we will make sure we convince you that you are ugly as you are.   Beauty will be determined by Madison Avenue and in the main, men will determine it .

A promotion, a raise, a husband, these things are all tied to successful body hair removal even if you don’t have much of it in the first place.  The product’s website reminds its victims of those moments in life when “…you’re not prepared for anything….. In fact you’ve got stubby legs, a fuzzy bikini line, and you’ve just fallen head over heels in front of the whole office.  It’s moments like this you need Veet.”

This is free will is it?  It is free will for the rising middle class as there aren’t too many Chinese women working in offices. Those working in the factories that supply Wal Mart, Apple and all the other western retailers are a little less susceptible to such an assault and have less money, but the manufacturers are working on it.

Benjamin Voyer, a social psychologist and an assistant professor of Marketing at the European Business School hits the nail on the head explaining that this approach, “Creates an awareness, which subsequently creates a feeling of shame and need”. That’s right, but I have to wonder what he’s doing working where he is, maybe he should change jobs.

What is behind this drive to sell products all the time?  Why convince us to buy products we don’t need really or that are harmful to us?  After all, with Veet for example, the chemicals used to weaken a woman’s body hair to the point that it can be scraped off smell so nasty they add yet another nicer smelling chemical to it to mask the odor. And who knows the long-term affects of all this stuff. The psychological and physiological damage done to us as human beings by this war on consciousness, especially young women, cannot be understated and is perhaps for us to explore another time.

But why this situation exists is where Marx comes in.  I am not an economist or expert when it comes to the complex details and specifics of economies and I need not go on too long.  But I do understand and accept the general process at work that Marx explained in his writings on the capitalist mode of production.  Unlike feudalism a predominantly agricultural system of production that was in the main a self-sustaining economy, one in which production was mainly for use and where wealth was in the ownership of land, the capitalist mode of production is one where the products made are for sale in the marketplace; initially a fairly localized marketplace, but today in the global market. It is the commodity that is king in capitalism.

In the capitalist mode of production, a commodity is created through a labor process bringing together human labor power (our ability to work) and the raw materials, machinery and technology needed to create the finished product. This finished product is not the property of the worker that made it, but the capitalist who has purchased the worker’s labor power and other means necessary for production to take place. The production process belongs to the capitalist.

The purpose for the capitalist is to produce commodities whose value is greater than the combined value of the labor power and means of production consumed (used up) in the process of production. The source of their wealth is due to them paying less value for labor power (wages) than the value created through its use. In other words, we work over and above the time needed to create our own wages. That value, the capitalist gets for nothing.

So a commodity, say a car that we buy, a personal care product, or a computer, contains within it, value the capitalist paid for and value they received for free.  This added value, surplus value, cannot be realized though without the sale of the commodity.  The commodity created by labor must be sold.  This is what is behind the constant, never ending and treacherous efforts by the capitalist to sell the product. It’s the goose that lays the golden egg.  It is the source of the lying ads, the politicians’ seemingly immoral behavior and the slaughter of millions in wars as capitalists from different nations struggle for control over the world’s resources and markets.

I know this seems afar from what this commentary began with but for me, it is what allows me to understand it all; not because I have an unhealthy “cult of the personality” admiration for Marx; but because his explanation of how the real world works corresponds with objective reality, make the world concrete.  Capitalism must create a market where there is not one all and all’s fair in this war. My entire life has been spent as a wage-worker, in construction mostly but also grueling factory work. I am proud of my contribution to this world as all workers should be; after all, labor is the source of all wealth.

I will close with a statement from Mr. Marx that for me sums it up quite succinctly:

“Use values must therefore never be looked upon as the real aim of the capitalist; neither must the profit on any single transaction.  The restless never-ending process of profit-making alone is what he aims at.  This boundless greed after riches, this passionate chase after exchange value, is common to the capitalist and the miser; but while the miser is merely a capitalist gone mad, the capitalist is a rational miser.   The never ending augmentation of exchange value, which the miser strives after, by seeking to save his money from circulation, is attained by the more acute capitalist, by constantly throwing it afresh in to circulation." From, Capital; The General Formula For Capital

* Convincing Women in China They’re Too hairy

An after thought.

I wanted to mention, for the sake of working class readers who follow this blog and are fairly new to socialist or Marxist ideas about things like economics. The surplus value that I refer to above was also what kept the feudal lord in a comfortable existence in feudal society.  But it was much easier to see that.  The peasant paid their masters in kind, in produce of their labor they physically gave over to them in return for a small plot of land on which they could produce their own keep.  They maintained their households, farms and land. The exploitation was clear.  Capitalism is a little more complicated as we are "free", not tied to the land or a particular feudal estate.  We get paid wages for our labor and how we are cheated in that set up is less visible although all workers know it in our gut. 


A very good book about the transition from feudalism to capitalism  if my memory serves me right is Leo Huberman's Man's Worldly Goods.  I never read the last chapter which appeared to me to champion the merits of Stalinism. But I loved the rest.

US capitalism on the road to ruin

"The time during which the laborer works, is the time during which the capitalist consumes the labor-power he has purchased of him." Capital: Vol 1 chap 10

by Richard Mellor

As the British economist Michael Roberts pointed out in a recent post,  Oliver Blanchard, the IMF's top economist warned his colleagues before the upcoming World Bank meeting in Tokyo that “It’s not yet a lost decade. But it will surely take at least a decade from the beginning of the crisis for the world economy to get back to decent shape.”The bankers and their system that has brought us this far is in a funk.  It's not a question of  a lack capital either.  Excluding banks and utilities, corporations in Standard and Poor's 500 stock index are "rolling in cash" writes Bloomberg Business Week, stashing away $1.2 trillion in the first quarter alone, almost a record.

This cash would certainly go a long way to building up the country's dilapidated infrastructure, what BW once described as the "Third Deficit", putting people to work in the process.  Unemployment is still high which is good for bosses in the sense that it places downward pressure on wages as the employed are more cautious about fighting back when there's 20 to 30 million of us waiting outside the gates. The US economy has a long way to go having recovcered only 4.1 million of the 8.8 million jobs lost in this recession of theirs.

Consumers are still paying down debt they were encouraged to accumulate in order to keep the market economy from collapsing earlier, debt allows capitalism to go beyond its limits, but at some point, like a stretched elastic band, it has to snap back to within those limits as happened in 2007. Jobs, plant, and production has to be destroyed in order to prepare the ground for further growth which will lead to profits, further capital accumulation and another slump.

The serious journals of capitalism are most revealing in their coverage of events in the system they govern.  Joseph Stiglitz points out in Business Week this week that real estate investment is "still half of what it was" and as we know, the three trillion or so that was pumped in to the economy in the first decade of this century found a home in real estate.  Agents in Las Vegas, one of the worst communities for foreclosures as overbuilding was rampant, were earning $500,000 a year "filling out forms" one commentator explained. The bubble burst and she sharkfest is over at terrible costs to society except for a few lucky ones and the super rich.  As for home building, "The only good news..." Stiglitz tells Charlie Rose, "....is that the houses were shoddily constructed and in maybe 5 or 10 years we'll have to reconstruct them.".  This is par for the course for free markets. No doubt the free market apologists will blame the carpenter, the plumber, the electrician or state and federal regulations for such shoddy workmanship, "If only the market were allowed to work its magic."

Well, the market worked its magic, that's why were here; that's why the BP spill occurred, Fukushima happened and bridges collapsed in Milwaukee.

So the 1%, or more accurately the .01% sit on their $1 trillion or more they raked in in the first quarter. They will add much of that to the more than $21 trillion they have in offshore tax havens.  Capitalists will not invest in society if there is no profit in it. This is not a moral question, it is a political and economic one.

So capitalism produces too much.  When they talk of a lack of demand, they mean lack of profit. It does not mean that people are satisfied with their existence in the sense that their most important needs are met by society, shelter, food security, health care, a productive work life etc.  For  coupon clippers, the lack of demand means that the commodity can't be purchased, the sale can't be made and the surplus value contained within it realized. 

What anarchy capitalist production is. Perhaps more than any other country we are bombarded with sales ads in the US.  The advertising of prescription drugs, banned in many countries is relentless here.  A doctor friend of mine told me she was getting calls from people who claimed they had diseases she'd never heard of; they had seen them on TV, "call your doctor and ask them if "blank" is right for you" the ads say. And why should a home be an investment, it is human shelter?

In order to keep pace with the need to sell the product US consumers had a very low savings rate prior to the crash, close to zero of disposable income.  This has risen to close to 5% as workers and the middle class have been shaken by the severity of the crisis and are too cautious or busy paying down debts they were encouraged to accumulate to purchase commodities. They might just have no money.  What an insane system; they need us to buy so they encourage us to borrow money from them as social Labor produces more in value than it is paid in wages, now they are encouraging saving in order to provide a pool of capital their banks can use to invest in production so the economy can get on its feet and repeat this process all over again.

Meanwhile, more US job cuts are on the way in the effort to return to equilibrium and a more profitable environment.  BofA is looking to eliminate 30,000 jobs, Hewlett Packard is also in the process of eliminating  30,000 worldwide, Staples is shutting 15 stores throughout the US.  Meredith Whitney, the renowned capital adviser estimates that another 50,000 to 100,000 layoffs need to occur in the securities industry for things to improve and Federal Express is moving to offer buyouts to improve profitability. Sweet commerce.

US capitalism is bogged down in wars it cannot win.  Its domestic infrastructure is in dire straits.  Inequality is at its highest level in decades as tax rates at the top were lowered and deregulation, begun under Carter and continued under Reagan allowed the market free rein that lead to tragic events like the BP disaster.  In that case, government regulators allowed the energy industry to design its own deep sea regulations.  The two big business parties, Democrats and Republicans, are responsible for this state of affairs that led to financial capital enjoying what Larry Summers referred to as a "Sumptuous feast",  at the expense of the rest of us and our environment that is. With the onset of the Great Recession, Martin Wolf pointed out in the FT that, the ratio of global financial assets to annual world output rose from 109 per cent in 1980 to 316 per cent in 2005 when the global stock of core financial assets reached $140,000bn.(Financial Times 6-18-08).  Some 40% of all corporate profits went to the financial sector as they gambled away.

We have stated many times on this blog that the US capitalist class has to drive US workers and our living standards back to conditions that prevailed prior to the great uprisings and workplace occupations of the 1930's.  The rise of the Occupy Movement with all its weaknesses and mistakes is a glimpse of what is to come as the US working  class will be forced to fight to defend its interests with mass action, open defiance of their laws and the building of an independent political party of workers the poor and small community businesses that are crushed by the weight of big capital. The Occupy Movement was a reaction to the inequality in US society as thousands upon thousands of highly educated young people find themselves in massive debt and without the chance of work.  There are those that condemn it in total which is wrong---no mass movement comes ready made and with no established force that can lead, the confusions and obstacles to success can be greater. Whether the Occupy Movement is though we can't say.  What we can say is its just the beginning.

So there is still a long way to go and as this election approaches all establishment candidates at the federal and local level will be doing their best to dodge the bullet and get you to vote for them, but you will also hear their words aimed at the moneyed interests that they will be "fiscally responsible" "realistic" etc.  But the material conditions that gave rise to the "American Dream" are gone, never to return.  US capitalism is in decline and we will see rising tensions globally as countries like China continue to threaten US dominance on the world stage.  Oh for the good old cold war and the Bi-Polar world.  This doesn't mean that we can't turn things around.  But it does mean that we cannot simply vote for a candidate in these elections and things will change;  It does mean that we have to involve ourselves and realize that no one can "do it for us".  Electoral politics for socialists can be used to build a mass direct action movement, we cannot vote the system out of office. The emancipation of the working class can only be realized by the working class itself Marx argued.

I think it was in the New Yorker that I was reading a column that said that during the debate there was one question the moderators would never ask.  That was which of the two candidates were prepared to say that "There will be no austerity on my watch".  We all know the answer to that one.
I leave you with this, a handy piece of advice:

“Use values must therefore never be looked upon as the real aim of the capitalist; neither must the profit on any single transaction.  The restless never-ending process of profit-making alone is what he aims at.  This boundless greed after riches, this passionate chase after exchange value, is common to the capitalist and the miser; but while the miser is merely a capitalist gone mad, the capitalist is a rational miser.   The never ending augmentation of exchange value, which the miser strives after, by seeking to save his money from circulation, is attained by the more acute capitalist, by constantly throwing it afresh in to circulation." Marx: The Transformation of Money in to Capital