Gangster Capitalism: The United States and the Globalization of Organized Crime
"The hidden hand of the market will never work without a hidden fist"
If you think that Yeltsin privatization (see
Harvard Mafia, Andrei Shleifer and the economic rape
of Russia) and rise of organized crime in Russia are two distinct phenomenon, think again.
Neoliberalism which declare profit as single and only moral value is in reality deeply
interconnected with organized crime both in methods and personalities. This is not very
noticed in the USA, but quite so in, say, Ukraine.
It's not accidental that Forbes
magazine recently placed two Mexicans, Carlos Slim and Joaquín Guzmán, high on their list of the most
powerful people in the world. Carlos Slim is the world’s third-richest man and CEO of a telecommunications
company and Joaquín Guzmán is the leader of the Sinaloa drug cartel.
The first researcher who explored this uncanny relationship
between that two and strong links between the neoliberal system of governance and organized crime was Michael Woodiwiss with his
Gangster Capitalism: The United States and the Globalization of Organized Crime (Paperback):
Everyone knows what organized crime is. Each year dozens of feature films, hundreds of books, and
thousands of news stories explain to an eager public that organized crime is what gangsters do.
Closely knit, ethnically distinct, and ruthlessly efficient, these mafias control the drugs trade,
people trafficking and other serious crimes. If only states would take the threat seriously and
recognize the global nature of modern organized crime, the FBI's success against the Italian mafia
could be replicated throughout the world. The wicked trade in addictive drugs could be brought to
The trouble is, as Woodiwiss demonstrates in shocking and surprising detail, what everyone
knows about organized crime is pretty much completely wrong. In reality the most important figures
in organized crime are employees of multinational companies, politicians and bureaucrats. Gangsters
are certainly a problem, but much of their strength comes from attempts to prohibit the market for
Even here they are minor players when compared with the intelligence and law enforcement
agencies that selectively enforce prohibition and profit from it. Woodiwiss shows how respectable
businessmen and revered statesmen have seized these opportunities in an orgy of fraud and illegal
A very timely book, November 16, 2008
Oppenheim (San Diego, CA USA) -
See all my reviews
What makes "Gangster Capitalism" so worthwhile is that it helps in understanding what has led
us to the 2007-8 financial meltdown. As the book shows, like during the 1920's, deregulation led
the way for powerful companies to allow the very wealthy to get wealthier at the expense of average
people by using poor working conditions, low wages, etc, plus at the same time supporting supposedly
moral movements (against gambling, alcohol, drugs, etc) which mainly served the purpose of
making these trades more profitable to crooks and therefore created rampant gangsterism there.
The result was such a society wracked with gangsterism at all levels, but because most people
felt they were prospering, few complained.
But, then it all collapsed with the 1929 crash and resulting Depression, which led the way for
FDR and the New Deal programs which increased regulation of corporations, repeal of Prohibition,
etc. Though the Depression lingered until WWII, the New Deal was successful in restructuring our
laws and public infrastructure to create a better footing for the prosperity which would follow.
The book effectively traces how much of this regulation was reduced piece by piece, beginning
in earnest with Nixon, using Cold War fears to tilt the nation toward more corporate power and away
from reform, support of right-wing dictators around the world, re-energizing a 'moral crusade' especially
by beginning the War on Drugs, thereby making the illegal drug trade super profitable, etc.
The nation had shifted Right and even Democratic presidents like Carter who was instrumental
in deregulating industry and Clinton who signed into law the repeal of Glass--Steagle weren't able
to stop the shift. Then, the 'Gangster Capitalism" went on steroids with G. W. Bush.
By 2003, corporate taxes only amounted to 7% of revenues, while payroll taxes amounted to 40%.
Of note, the book makes clear it is opportunity which leads to much crime, so the approach of
massive deregulation of corporations, plus focusing on arrests and imprisonment for victimless crimes
ends up with the wrong results, more entrenched crime, even allowing corporations to capitalize
on a prison industry.
The book is also good at highlighting how corporations and outright gangsters were able to corrupt
legal drugs (price-fixing), tobacco, asbestos, body parts, autos (Pintos), etc. Some other things
in the book, of note: Hamid Karzai included drug traffickers in his Afghan administration.
And, our support of Suharto (Indonesia), Mobuto (the Congo), and Marcos (the Philippines) allowed
'looting' of these countries.
A corrupt financial infrastructure included the BCCI bank and offshore banking to evade taxes
also developed. Plus, laundering money from illegal arms sales, drugs, and so many other illegal
activities passed through our financial system.
The book is definitely tilted toward a liberal way of looking at things, therefore it doesn't
go into the good things about capitalism, but there are disturbing patterns which are important
to understand, and this book does that very well.
Wasted opportunity, September 6, 2006
Despite the fact that I was predisposed to agree with many of the author's views, this book was
a huge disappointment. First, the basic premises:
- American business enterprise is singularly corrupt;
- Most of the crime that Americans suffer from is corporate crime;
- American methods of fighting crime focus on lurid fantasies of underworld conspiracy;
- The USA exports criminality through its foreign & trade policies.
Each of these premises could have been, and in other venues have been, well-argued. The first
three suffer from a lack of generally accepted, objective measures, but experts on criminology have
overcome worse obstacles. What we get instead is an unfocused, rambling listing of claims (plausible,
but very poorly documented) about the criminal underworld, anecdotes about corporate crime, and
extreme statements. No doubt "legitimate" business enterprise does rip off more money from customers
each year than do gangsters or mafiosi; but the latter also account for a tiny fraction of the total
US labor force. And comparing deaths from industrial accidents to mob hits is just over the top.
Woodiwiss says that the book "had its inception during a seminar series on transnational organized
crime run by Adam Edwards and Peter Gill... Adam and Peter put together several of the best academic
researchers from Europe and North America...." Yet the book is exasperatingly badly substantiated.
I noticed almost no original research. Woodiwiss's footnotes, which--like cops--are never around
when you need them (viz., when he is actually saying something that requires documentation), are
almost exclusively from articles in the *Guardian* or from other sensational exposes. Radical literature
has its place, of course, but saying, "US capitalism is just like organized crime... see, it says
so in 'The New Left Review'" is just a harangue, not evidence.
The back cover declaims: "..[T]he position of large multinational corporations...actually
provide the most enticing opportunities for illegal profit...Gangster Capitalism shows how
respectable businessmen and revered statesmen have seized these opportunities in an orgy of fraud
and illegal violence that would leave the most hardened mafiosi speechless."
In fact, it's a disappointing pile of clippings. With the exception of his claims--again, plausible
but unsubstantiated--you are not going to find any surprises here.
As I mentioned, he attacks conventional wisdom regarding the mafia and J. Edgar Hoover (who comes
off surprisingly well); unfortunately, Woodiwiss offers almost no support for those contentions
that are likely to be controversial. For example, on p.78 he mentions President [Nixon]'s Advisory
Council on Executive Organization, "Organized Crime Strike Force Report" , which included
a vaguely worded remark that the reliance on legal sanctions to fight drug abuse was actually causing
organized crime to flourish." This is footnoted. Then he says that Nixon was so horrified by this
that he ruthlessly suppressed the report. This is not footnoted. The next pargagraph (p.49) includes
a quote from a law enforcement officer claiming that gambling arrests were made just to pad the
arrest numbers; this is footnoted. The next paragraph declares that gampling is no more corrupt
than the rest of the economy. A surprising observation, it is predictibly not footnoted.
The result: lots of footnotes documenting that water is a bit on the damp side, but nothing to
support the controversial stuff. Only a small part is devoted to crime; the rest is a paste-up job
from two dozen radical critiques of the USA. Anything from the 1971 ditching of the gold exchange
standard to the various covert activities of the CIA are brought up, with no more compelling a connection
to Woodiwiss' original point than being bad things that Americans did.
The conclusions are so insipid (it calls for "fair trade" with no further specification of how
that would be any different... capital punishment for corporations--evidently Mr. Woodiwiss has
never heard of 'money laundering,' in which a vehicle corporation commits suicide), that it is pointless
to spend any time on them. Woodiwiss needs to actually learn something about economics; ironically
enough, for someone who claims business is closely tied to crime, he knows almost nothing about
it. He needs to know, and say what he knows, about law enforcement and business practices abroad,
so he can make a comparison. And finally, he needs to actually learn how to write.
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"... Here is an except from "A Colony in a Nation" by Chris Hayes that she recently discussed (Chris Hayes is also the author of Twilight of the Elites ) ..."
"... ...we have built a colony in a nation, not in the classic Marxist sense but in the deep sense we can appreciate as a former colony ourselves: A territory that isn't actually free. A place controlled from outside rather than within. A place where the mechanisms of representation don't work enough to give citizens a sense of ownership over their own government. A place where the law is a tool of control rather than a foundation for prosperity. ..."
"... A Colony in a Nation is not primarily a history lesson, though it does provide a serious, empathetic look at the problems facing the Colony, as well as at the police officers tasked with making rapid decisions in a gun-rich environment. ..."
"... Elsewhere, Hayes examines his own experiences with the law, such as an incident when he was almost caught accidentally smuggling "about thirty dollars' worth of marijuana stuffed into my eyeglass case" into the 2000 Republican National Convention. Hayes got away without so much as a slap on the wrist, protected by luck, circumstances and privilege. ..."
"Listening to this show by MSNB is so disguising that I lost any respect for it. "
I actually jumped the gun. That's does not mean that it should not be viewed. There are some positive
aspects of MSNBC http://www.msnbc.com/rachel-maddow-show
Here is an except from "A Colony in a Nation" by Chris Hayes that she recently discussed (Chris
Hayes is also the author of Twilight of the Elites )
...we have built a colony in a nation, not in the classic Marxist sense but in the deep
sense we can appreciate as a former colony ourselves: A territory that isn't actually free. A
place controlled from outside rather than within. A place where the mechanisms of representation
don't work enough to give citizens a sense of ownership over their own government. A place where
the law is a tool of control rather than a foundation for prosperity.
... ... ...
A Colony in a Nation is not primarily a history lesson, though it does provide a serious,
empathetic look at the problems facing the Colony, as well as at the police officers tasked with
making rapid decisions in a gun-rich environment.
Hayes takes us through his less-than-successful experience putting himself in the latter's
shoes by trying out an unusual training tool, a virtually reality simulator: "We're only one scene
in, and already the self-righteous liberal pundit has drawn his weapon on an unarmed man holding
a cinder block."
Elsewhere, Hayes examines his own experiences with the law, such as an incident when he
was almost caught accidentally smuggling "about thirty dollars' worth of marijuana stuffed into
my eyeglass case" into the 2000 Republican National Convention. Hayes got away without so much
as a slap on the wrist, protected by luck, circumstances and privilege.
For black men living in the Colony, encounters with the police are much more fraught. Racial
profiling and minor infractions can lead to "being swept into the vortex of a penal system that
captures more than half the black men his age in his neighborhood... an adulthood marked by prison,
probation, and dismal job prospects...."
Amazon, Facebook and Google: The new robber barons?
Amazon CEO Jeff Bezos in 2010. Credit:
Earlier this month Amazon,
plans to establish a second headquarters in North America. Rather than simply reveal which city would
become its second home, the Seattle-based tech company opted instead to open a bidding war. In an
document published on its website, Amazon outlined the criteria for prospective suitors, and
invited economic developers to submit proposals advocating for why their city or region should be
the host of the new location.
Its potential arrival comes with the claim that the company will invest more than $5 billion in
construction and generate up to 50,000 "high paying jobs." Mayors and governors, hard at work crafting
their bids, are no doubt salivating at the mere thought of such economic activity. Journalists and
editorial teams in eligible metropolises are also playing their parts, as newspapers have
published a series of articles and editorials
making the case for why
their city should be declared the winner.
Last Tuesday Bloomberg
reported that Boston was the early frontrunner, sending a wave of panic across the continent.
Much to the relief of the other contenders, Amazon quickly discredited the report as misinformation,
announcing in a series of
Wednesday that it is "energized by the response from cities across [North America]" and that, contrary
to the rumors, there are currently no front-runners on their "equal playing field."
That Amazon is "energized" should come as no surprise. Most companies would also be energized
by the taxpayer-funded windfall that is likely coming its way. Reporters speculate that the winner
of the sweepstakes!in no small part to the bidding war format!could be forced to cough up hundreds
of millions of dollars in state and local subsidies for the privilege of hosting Amazon's expansion.
Amazon has long been the beneficiary of such subsidies, emerging in recent years as a
to Walmart as the top recipient of corporate welfare. According to Good Jobs First, a Washington,
D.C. organization dedicated to corporate and government accountability, Amazon has received
more than $1 billion in
local and state subsidies since 2000. With a business plan dedicated to amassing long-term market
share in lieu of short-term profits, Amazon, under the leadership of its founder and chief executive,
Jeff Bezos, operates on razor-thin profit margins in most industries, while actually operating at
a loss in others. As such, these state and local subsidies have played an instrumental role in Amazon's
Advocates of free market enterprise should be irate over the company's crony capitalist practices
and the cities and states that enable it. But more so than simply ruffling the feathers of the libertarian-minded,
Amazon's shameless solicitation for subsidies capped off a series of summer skirmishes in the Democratic
left's emerging war against monopolies.
Earlier this summer when Amazon announced its $13.7 billion purchase of Whole Foods, antitrust
called upon the Department of Justice and the Federal Trade Commission's Antitrust Division to
block the sale and
update the United States government's legal definition of monopoly. Although the acquisition!which
approved in August!only gives Amazon a 1.5 percent market share in the grocery industry, it more
importantly provides the tech giant with access to more than 450 brick-and-mortar Whole Foods locations.
Critics say that these physical locations will
prove invaluable to its long term plan of economic dominance, and that it is but the latest advance
in the company's unprecedented control of the economy's
Google also found itself in the crosshairs of the left's anti-monopoly faction when, in late June,
the European Union imposed a $2.7 billion
fine against the tech company for anti-competitive search engine manipulation in violation of
its antitrust laws. The Open Markets Program of the New America Foundation subsequently published
a press release applauding the EU's decision. Two months later, the Open Markets Program was
axed . The former program director Barry Lynn
claims that his employers caved to pressure from a corporation that has donated more than $21
million to the New America Foundation. The fallout emboldened
journalists to share their experiences of being silenced by the tech giant, and underscores the
influence Google exerts over
think tanks and
Most recently, Facebook faced criticism after it was
discovered that a Russian company with ties to the Kremlin purchased $100,000 in ads from the
social media company in an effort to influence the 2016 presidential election. Facebook, as a result,
has become the latest subject of interest in Robert Mueller's special investigation into Russian
interference in last fall's election. But regardless of whether the ads influenced the outcome, the
report elicited demands for transparency and oversight in a digital ad marketplace that Facebook,
along with Google,
dominates . By using highly sophisticated algorithms, Facebook and Google receive more than
60 percent of all digital ad revenue, threatening the financial solvency of publishers and creating
a host of economic incentives that
pollute editorial autonomy.
While the Democratic left!in an effort to rejuvenate its
populist soul !has been at the front lines in the war against these
modern-day robber barons, Stacy Mitchell, co-director of the Institute of Local Self-Reliance,
suggests that opposition to corporate consolidation need not be a partisan issue. In a piece published
in The Atlantic , Mitchell traces the bipartisan history of anti-monopoly sentiment in American
If "monopoly" sounds like a word from another era, that's because, until recently, it was.
Throughout the middle of the 20th century, the term was frequently used in newspaper headlines,
campaign speeches, and State of the Union addresses delivered by Republican and Democratic presidents
alike. Breaking up too-powerful companies was a bipartisan goal and on the minds of many voters.
But, starting in the 1970s, the word retreated from the public consciousness. Not coincidentally,
at the same time, the enforcement of anti-monopoly policy grew increasingly toothless.
Although the modern Republican Party stands accused of cozying up with corporate interests, the
history of conservative thought has a rich intellectual tradition of being skeptical!if not hostile!towards
economic consolidation. For conservatives and libertarians wedded to the tenets of free market orthodoxy!or
dependent on campaign contributions from a donor class of Silicon Valley tycoons!redefining the
legal definition of monopoly and rekindling a bipartisan interest in antitrust enforcement are likely
But for conservatives willing to break from the principles of free market fundamentalism, the
encyclicals of the Roman Catholic Church, the
distributist thought of Hilaire Belloc and G.K. Chesterton, the
criticism of Christopher Lasch, and the
observations of agrarian
essayist Wendell Berry provide an intellectual framework from which conservatives can critique and
combat concentrated economic power. With a respect for robust and resilient localities and a keen
understanding of the moral dangers posed by an economy perpetuated by consumerism and convenience,
these writers appeal to the moral imaginations of the reader, issuing warnings about the detrimental
effects that economic consolidation has on the person, the family, the community, and society at
The events of this summer underscore the immense political power wielded by our economy's corporate
giants. To those who recognize the dangers posed by our age of consolidation, the skirmishes from
this summer could serve as a rallying cry in a bipartisan war for independence from our corporate
Daniel Kishi is an editorial assistant at The American Conservative . Follow him on
Twitter at @DanielMKishi
"... The MIC is their collective arm, and their collective fist. It is not the
American public's global enforcer; it is the American aristocracy's fist, around
the world. ..."
"... The MIC (via its military contractors such as Lockheed Martin) also constitutes
a core part of the U.S. aristocracy's wealth (the part that's extracted from the
U.S. taxpaying public via the U.S. government), and also (by means of those privately-owned
contractors, plus the taxpayer-funded U.S. armed forces) it protects these aristocrats'
wealth in foreign countries. Though paid by the U.S. government, the MIC does the
protection-and-enforcement jobs for the nation's super-rich. ..."
"... So, the MIC is the global bully's fist, and the global bully is the U.S.
aristocracy -- America's billionaires, most especially the controlling stockholders
in the U.S.-based international corporations. These are the people the U.S. government
actually represents . The links document this, and it's essential to know, if one
is to understand current events. ..."
"... This massacre didn't play well on local Crimean television. Immediately,
a movement to secede and to again become a part of Russia started, and spread like
wildfire in Crimea. (Crimea had been only involuntarily transferred from Russia
to Ukraine by the Soviet dictator Khrushchev in 1954; it had been part of Russia
for the hundreds of years prior to 1954. It was culturally Russian.) Russia's President,
Vladimir Putin, said that if they'd vote for it in a referendum, then Russia would
accept them back into the Russian Federation and provide them protection as Russian
"... The latest round of these sanctions was imposed not by Executive Order
from a U.S. President, but instead by a new U.S. law, "H.R.3364 -- Countering America's
Adversaries Through Sanctions Act" , which in July 2017 was passed by 98-2 in the
Senate and 419-3 in the House , and which not only stated outright lies (endorsed
there by virtually everyone in Congress), but which was backed up by lies from the
U.S. Intelligence Community that were accepted and endorsed totally uncritically
by 98 Senators and 419 Representatives . (One might simply assume that all of those
Senators and Representatives were ignorant of the way things work and were not intentionally
lying in order to vote for these lies from the Intelligence Community, but these
people actually wouldn't have wrangled their ways into Congress and gotten this
far at the game if they hadn't already known that the U.S. Intelligence Community
is designed not only to inform the President but to help him to deceive the public
and therefore can't be trusted by anyone but the President . ..."
The tumultuous events that dominate international news today cannot be accurately
understood outside of their underlying context, which connects them together,
into a broader narrative -- the actual history of our time . History
makes sense, even if news-reports about these events don't. Propagandistic motivations
cause such essential facts to be reported little (if at all) in the news, so
that the most important matters for the public to know, get left out of news-accounts
about those international events.
The purpose here will be to provide that context, for our time.
First, this essential background will be summarized; then, it will be documented
(via the links that will be provided here), up till the present moment -- the
current news: America's aristocracy
controls both the U.S.
federal government and
press , but (as will be documented later here) is facing increasing resistance
from its many vassal (subordinate) aristocracies around the world (popularly
called "America's allied nations"); and this growing international resistance
presents a new challenge to the U.S. military-industrial complex (MIC), which
is controlled by that same aristocracy and enforces their will worldwide. The
MIC is responding to the demands of its aristocratic master. This response largely
drives international events today (which countries get invaded, which ones get
overthrown by coups, etc.), but the ultimate driving force behind today's
international news is the aristocracy that the MIC represents, the billionaires
behind the MIC, because theirs is the collective will that drives the MIC.
The MIC is their collective arm, and their collective fist. It is not the
American public's global enforcer; it is the American aristocracy's fist, around
The MIC (via its military contractors such as Lockheed Martin) also constitutes
a core part of the U.S. aristocracy's wealth (the part that's extracted from
the U.S. taxpaying public via the U.S. government), and also (by means of those
privately-owned contractors, plus the taxpayer-funded U.S. armed forces) it
protects these aristocrats' wealth in foreign countries. Though paid by the
U.S. government, the MIC does the protection-and-enforcement jobs for the nation's
Furthermore, the MIC is crucial to them in other ways, serving not only directly
as their "policeman to the world," but also indirectly (by that means)
as a global protection-racket that keeps their many subordinate aristocracies
in line, under their control -- and that threatens those foreign aristocrats
with encroachments against their own territory, whenever a vassal aristocracy
resists the master-aristocracy's will. (International law is never enforced
against the U.S., not even after it invaded Iraq in 2003.) So, the MIC is
the global bully's fist, and the global bully is the U.S. aristocracy -- America's
billionaires, most especially the controlling stockholders in the U.S.-based
international corporations. These are the people the U.S. government
actually represents .
The links document this, and it's essential to know, if one is to understand
For the first time ever, a global trend is emerging toward declining control
of the world by America's billionaire-class -- into the direction of ultimately
replacing the U.S. Empire, by increasingly independent trading-blocs: alliances
between aristocracies, replacing this hierarchical control of one aristocracy
over another. Ours is becoming a multi-polar world, and America's aristocracy
is struggling mightily against this trend, desperate to continue remaining
the one global imperial power -- or, as U.S. President Barack Obama often
referred to the U.S. government,
"The United States is and remains the one indispensable nation. That has
been true for the century passed and it will be true for the century to come."
To America's aristocrats, all other nations than the U.S. are "dispensable."
All American allies have to accept it. This is the imperial mindset, both for
the master, and for the vassal. The uni-polar world can't function otherwise.
Vassals must pay (extract from their nation's public, and then transfer) protection-money,
to the master, in order to be safe -- to retain their existing power, to exploit
their given nation's public.
The recently growing role of economic sanctions (more accurately called
"Weaponization of finance" ) by the United States and its vassals, has been
central to the operation of this hierarchical imperial system, but is now being
increasingly challenged from below, by some of the vassals. Alliances are breaking
up over America's mounting use of sanctions, and new alliances are being formed
and cemented to replace the imperial system -- replace it by a system without
any clear center of global power, in the world that we're moving into.
Economic sanctions have been the U.S. empire's chief weapon to impose its will
against any challengers to U.S. global control, and are thus becoming the chief
locus of the old order's fractures .
This global order cannot be maintained by the MIC alone; the more that the
MIC fails (such as in Vietnam, Iraq, Afghanistan, Syria, ), the more that economic
sanctions rise to become the essential tool of the imperial masters. We are
increasingly in the era of economic sanctions. And, now, we're entering the
backlash-phase of it.
A turning-point in escalating the weaponization of finance was reached
in February 2014 when a Ukrainian coup that the Obama Administration had started
planning by no later than 2011, culminated successfully in installing a rabidly
anti-Russian government on Russia's border, and precipitated the breakaway from
Ukraine of two regions (Crimea and Donbass) that had voted overwhelmingly for
the man the U.S. regime had just overthrown . This coup in Ukraine was the
most direct aggressive act against Russia since the Cold War had 'ended' (it
had actually ended on the Russian side, but
not on the American side, where it continues ) in 1991. During this coup
in Kiev, on February 20th of 2014, hundreds of Crimeans, who had been peacefully
demonstrating there with placards against this coup (which coup
itself was very violent -- against the police, not by them
the exact opposite of the way that "the Maidan demonstrations" had been portrayed
in the Western press at the time),
were attacked by the U.S.-paid thugs and scrambled back into their buses to
return home to Crimea but were stopped en-route in central Ukraine and an uncounted
number of them were massacred in the Ukrainian town of Korsun by the same group
of thugs who had chased them out of Kiev .
This massacre didn't play well on local Crimean television. Immediately,
a movement to secede and to again become a part of Russia started, and spread
like wildfire in Crimea. (Crimea had been only involuntarily transferred from
Russia to Ukraine by the Soviet dictator Khrushchev in 1954; it had been part
of Russia for the hundreds of years prior to 1954. It was culturally Russian.)
Russia's President, Vladimir Putin, said that if they'd vote for it in a referendum,
then Russia would accept them back into the Russian Federation and provide them
protection as Russian citizens.
On 6 March 2014, U.S. President Obama issued
"Executive Order -- Blocking Property of Certain Persons Contributing to the
Situation in Ukraine" , and ignored the internationally recognized-in-law
right of self-determination of peoples (though he recognized that right in Catalonia
and in Scotland), and he instead simply declared that Ukraine's "sovereignty"
over Crimea was sacrosanct (even though it had been imposed upon Crimeans
by the Soviet dictator -- America's enemy -- in 1954, during the Soviet
era, when America opposed, instead of favored and imposed, dictatorship around
the world, except in Iran and Guatemala, where America imposed dictatorships
even that early). Obama's Executive Order was against unnamed "persons who have
asserted governmental authority in the Crimean region without the authorization
of the Government of Ukraine." He insisted that the people who had just grabbed
control of Ukraine and massacred Crimeans (his own Administration's paid far-right
Ukrainian thugs, who were
racist anti-Russians ), must be allowed to rule Crimea, regardless of what
Crimeans (traditionally a part of Russia) might -- and did -- want. America's
vassal aristocracies then
imposed their own sanctions against Russia when on 16 March 2014 Crimeans voted
overwhelmingly to rejoin the Russian Federation . Thus started the successive
rounds of economic sanctions against Russia, by the U.S. government
and its vassal-nations . (As is shown by that link, they knew that this
had been a coup and no authentic 'democratic revolution' such as the Western
press was portraying it to have been, and yet they kept quiet about it -- a
secret their public would not be allowed to know.)
The latest round of these sanctions was imposed not by Executive Order
from a U.S. President, but instead by a new U.S. law,
"H.R.3364 -- Countering America's Adversaries Through Sanctions Act" , which
in July 2017 was passed by
98-2 in the Senate and
in the House , and which not only stated
outright lies (endorsed there by virtually everyone in Congress), but which
was backed up by lies from the U.S. Intelligence Community that were accepted
and endorsed totally uncritically by 98 Senators and 419 Representatives
. (One might simply assume that all of those Senators and Representatives were
ignorant of the way things work and were not intentionally lying in order to
vote for these lies from the Intelligence Community, but these people actually
wouldn't have wrangled their ways into Congress and gotten this far at the game
if they hadn't already known that
the U.S. Intelligence Community is designed not only to inform the President
but to help him to deceive the public and therefore can't be trusted by anyone
but the President .
It's basic knowledge about the U.S. government, and they know it, though
the public don't.) The great independent columnist Paul Craig Roberts headlined
on August 1st,
"Trump's Choices" and argued that President Donald Trump should veto the
bill despite its overwhelming support in Washington, but instead Trump signed
it into law on August 2nd and thus joined participation in the overt stage --
the Obama stage -- of the U.S. government's continuation of the Cold War that
U.S. President George Herbert Walker Bush had
secretly instituted against Russia on 24 February 1990 , and that, under
Obama, finally escalated into a hot war against Russia. The first phase of this
hot war against Russia is via the
"Weaponization of finance" (those sanctions). However, as usual, it's also
backed up by
major increases in physical weaponry , and by
the cooperation of America's vassals in order to surround Russia with nuclear
weapons near and on Russia's borders , in preparation for a possible
blitz first-strike nuclear attack upon Russia -- preparations that the Russian
people know about and greatly fear, but which are largely hidden by the Western
press, and therefore only very few Westerners are aware that their own governments
have become lying aggressors.
Some excellent news-commentaries have been published about this matter, online,
by a few 'alternative news' sites (and that 'alt-news' group includes all of
the reliably honest news-sites, but also includes unfortunately many sites that
are as dishonest as the mainstream ones are -- and that latter type aren't being
referred to here), such as (and only the best sites and articles will be linked-to
All three of those articles discuss how these new sanctions are driving other
nations to separate themselves, more and more, away from the economic grip of
the U.S. aristocracy, and to form instead their own alliances with one-another,
so as to defend themselves, collectively, from U.S. economic (if not also military)
aggression. Major recent news-developments on this, have included (all here
from rt dot com):
"'US, EU meddle in other countries & kill people under guise of human rights
concerns' – Duterte", and presented Philippine President Rodrigo Duterte explaining
why he rejects the U.S. aristocracy's hypocritical pronouncements and condemnations
regarding its vassals among the world's poorer and struggling nations, such
as his. Of course, none of this information is publishable in the West -- in
the Western 'democracies'. It's 'fake news', as far as The Empire is concerned.
So, if you're in The (now declining) Empire, you're not supposed to be reading
this. That's why the mainstream 'news'media (to all of which this article is
being submitted for publication, without fee, for any of them that want to break
their existing corrupt mold) don't publish
this sort of news -- 'fake news' (that's of the solidly documented type,
such as this). You'll see such news reported only in the few honest newsmedia.
The rule for the aristocracy's 'news'media is: report what happened, only on
the basis of the government's lies as to why it happened -- never
expose such lies (the official lies). What's official is
'true' . That, too, is an essential part of the imperial system.
The front cover of the American aristocracy's TIME magazine's Asian
edition, dated September 25, 2016, had been headlined
"Night Falls on the Philippines: The tragic cost of President Duterte's war
on drugs" . The 'news'-story, which was featured inside not just the Asian
but all editions, was
"Inside Philippine President Rodrigo Duterte's War On Drugs" , and it portrayed
Duterte as a far-right demagogue who was giving his nation's police free reign
to murder anyone they wished to, especially the poor. On 17 July 2017, China's
Xinhua News Agency bannered
"Philippines' Duterte enjoys high approval rating at 82 percent: poll" ,
and reported: "A survey by Pulse Asia Inc. conducted from June 24 to June 29
showed that 82 percent of the 1,200 people surveyed nationwide approved the
way Duterte runs the country. Out of all the respondents, the poll said 13 percent
were undecided about Duterte's performance, while 5 percent disapproved Duterte's
performance. Duterte, who assumed the presidency in June last year, ends his
single, six-year term in 2022." Obviously, it's not likely that the TIME
cover story had actually been honest. But, of course, America's billionaires
are even more eager to overthrow Russia's President, Putin.
Western polling firms can freely poll Russians, and
do poll them on lots but not on approval or disapproval of President Putin
, because he always scores above 80%, and America's aristocrats also don't like
finding that confirmed, and certainly don't want to report it. Polling is routinely
done in Russia, by Russian pollsters, on voters' ratings of approval/disapproval
of Putin's performance. Because America's aristocrats don't like the findings,
they say that Russians are in such fear of Putin they don't tell the truth about
this, or else that Russia's newsmedia constantly lie about him to cover up the
ugly reality about him.
However, the Western academic journal Post-Soviet Affairs (which is
a mainstream Western publication) included in their January/February 2017 issue
"Is Putin's Popularity Real?" and the investigators reported the results
of their own poll of Russians, which was designed to tap into whether such fear
exists and serves as a distorting factor in those Russian polls, but concluded
that the findings in Russia's polls could not be explained by any such factor;
and that, yes, Putin's popularity among Russians is real. The article's closing
words were: "Our results suggest that the main obstacle at present to the emergence
of a widespread opposition movement to Putin is not that Russians are afraid
to voice their disapproval of Putin, but that Putin is in fact quite popular."
The U.S. aristocracy's efforts to get resistant heads-of-state overthrown
by 'democratic revolutions' (which usually is done by the U.S. government to
overthrow democratically elected Presidents -- such as Mossadegh, Arbenz, Allende,
Zelaya, Yanukovych, and attempted against Assad, and wished against Putin, and
against Duterte -- not overthrowing dictators such as the U.S. government always
claims) have almost consistently failed, and therefore coups and invasions have
been used instead, but those techniques demand that certain realities be suppressed
by their 'news'media in order to get the U.S. public to support what the government
has done -- the U.S. government's international crime, which is never prosecuted.
Lying 'news' media in order to 'earn' the American public's support, does not
produce enthusiastic support, but, at best, over the long term, it produces
only tepid support (support that's usually below the level of that of the governments
the U.S. overthrows). U.S. Presidents never score above 80% except when they
order an invasion in response to a violent attack by foreigners, such as happened
when George W. Bush attacked Afghanistan and Iraq in the wake of 9/11, but those
80%+ approval ratings fade quickly; and,
after the 1960s, U.S. Presidential job-approvals have generally been below 60%
President Trump's ratings are currently around 40%. Although Trump is not
as conservative -- not as far-right -- as the U.S. aristocracy wants him to
be, he is fascist ; just
not enough to satisfy them (and their oppostion isn't because he's unpopular
among the public; it's more the case that he's unpopular largely because their
'news'media concentrate on his bads, and distort his goods to appear bad --
e.g., suggesting that he's not sufficiently aggressive against Russia). His
fascism on domestic affairs is honestly reported in the aristocracy's 'news'media,
which appear to be doing all they can to get him replaced by his Vice President,
Mike Pence. What's not reported by their media is the fascism of the U.S. aristocracy
itself, and of their international agenda (global conquest). That's their secret,
of which their public must be (and is) constantly kept ignorant. America's aristocracy
has almost as much trouble contolling its domestic public as it has controlling
its foreign vassals. Investigative historian Eric Zuesse is the author, most
They're Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010
, and of
The Event that Created Christianity .
Recently from Author
America's Top Scientists Confirm: U.S. Goal Now Is to Conquer Russia
Why Readers Shouldn't Trust Staff Reporters
Why Sanders Supporters Should Vote for Trump
Fidelios Automata > ,
August 19, 2017 at 2:22 am GMT
exiled off mainstreet > ,
August 19, 2017 at 4:21 am GMT
Fascism is defined as a system that combines private monopolies and despotic
government power. It is sometimes racist but not necessarily so. By the
correct definition, every President since at least Herbert Hoover has been
fascist to some degree.
WorkingClass > ,
August 19, 2017 at 4:43 am GMT
One bit of silver lining in the deep-state propaganda effort to destabilise
the Trump regime is the damage to the legitimacy of the yankee imperium
it confers, making it easier for vassal states to begin to jump ship. The
claims of extraterritorial power used for economic warfare might confer
a similar benefit, since the erstwhile allies will want to escape the dominance
of the yankee dollar to be able to escape the economic extortion practised
by the yankee regime to achieve its control abroad.
Wally > ,
August 19, 2017 at 6:00 am GMT
Good news – The beast is dying. Bad news – We Americans are in its belly.
jilles dykstra > ,
August 19, 2017 at 6:31 am GMT
"America's aristocracy" = lying Israel First Zionists. Why doesn't Eric
Zuesse just say the truth? What is he afraid of?
Grandpa Charlie > ,
August 19, 2017 at 6:38 am GMT
" America's aristocracy has almost as much trouble controlling its domestic
public as it has controlling its foreign vassals. "
These foreign vassals had a cozy existence as long as the USA made it
clear it wanted to control the world. Dutch minister of Foreign Affairs
Ben Bot made this quite clear whan the Netherlands did not have a USA ambassador
for three months or so, Ben Bot complained to the USA that there should
be a USA ambassador.
He was not used to take decisions all by himself.
Right now Europe's queen Merkel has the same problem, unlike Obama Trump
does not hold her hand.
jilles dykstra > ,
August 19, 2017 at 6:40 am GMT
Yes, of course. I don't know about before Herbert Hoover, but certainly
during the 50s, business -- monopolistic or oligopolistic (like the old
Detroit auto industry) -- and government (including the MIC) were closely
integrated. Such was, indeed, as aspect of progressivism. It was considered
by most to be a good thing, or at least to be the natural and normal state
of affairs. Certainly, the system back then included what amounted to price-fixing
as a normal business practice.
On the other hand, the "despotic" thing is less clear. Some assert that
since FDR was effectively a dictator during World War II, that therefore
the Democratic Party represented despotism ever since FDR (or maybe ever
Having lived through that period of time, I have to say that I am not
so sure about that: if it was despotism, it was a heavily democratic and
beneficent despotism. However, it is evident that there was a fascist skein
running through the entirety of USA's political history throughout the 20th
Priss Factor > ,
August 19, 2017 at 7:52 am GMT
Fascism originates from Mussolini's Italy. It was anti socialist and
anti communist, it of course was pro Italian, Italy's great deeds in antiquity,
the Roman empire, were celebrated.
One can see this as racist, but as Italy consisted of mostly Italians,
it was not racist in the present meaning of the word at all. Italy was very
hesitant in persecuting jews, for example. Hitler depised Mussolini, Mussolini
was an ally that weakened Germany. Hitler and Mussolini agreed in their
hatred of communism.
Calling Hitler a fascist just creates confusion. All discussions of what
nowadays fascism is, our could mean, end like rivers in the desert.
jacques sheete > ,
August 19, 2017 at 11:42 am GMT
'Aristocracy' and 'fascist' are all weasel words. (I'm the only true
fascist btw, and it's National Humanism, National Left, or Left-Right.)
US is an ethnogarchy, and that really matters. The Power rules, but the
nature of the Power is shaped by the biases of the ruling ethnic group.
It is essentially ruled by Jewish Supremacists.
Now, if not for Jews, another group might have supreme power, and it
might be problematic in its own way. BUT, the agenda would be different.
Suppose Chinese-Americans controlled much of media, finance, academia,
deep state, and etc. They might be just as corrupt or more so than Jews,
BUT their agenda would be different. They would not be hateful to Iran,
Russia, Syria, or to Palestinians. And they won't care about Israel.
They would have their own biases and agendas, but they would still be
different from Jewish obsessions.
Or suppose the top elites of the US were Poles. Now, US policy may be
very anti-Russian BUT for reasons different from those of Jews.
So, we won't learn much by just throwing words like 'fascist' or 'aristocrat'
We have to be more specific. Hitler was 'fascist' and so was Rohm. But
Hitler had Rohm wiped out.
Surely, a Zionist 'fascist' had different goals than an Iranian 'fascist'.
One might say the Old South African regime was 'fascist'. Well, today's
piggish ANC is also 'fascist', if by 'fascist' we mean power-hungry tyrants.
But black 'fascists' want something different from what white 'fascists'
It's like all football players are in football. But to understand what
is going on, we have to know WHICH team they play for.
Jewish Elites don't just play for power. They play for Jewish power.
Anon > ,
August 19, 2017 at 12:56 pm GMT
Good summary of where we're at, but please don't call the ruling
goons aristocrats. The word, "aristocrat," is derived from the Ancient Greek
ἄριστος (áristos, "best"), and the ruling thugs in this country have never
been the best at anything except lies, murder and theft.
I realize that calling them violent bloodthirsty sociopathic parasites
is a mouthful, and that "plutacrats" doesn't have quite the appropriate
sting, but perhaps it's more accurate.
Or maybe we should get into the habit of calling them the "ruling mafiosi."
I'm open to suggestions.
jacques sheete > ,
August 19, 2017 at 1:42 pm GMT
and that threatens those foreign aristocrats with encroachments
against their own territory, whenever a vassal aristocracy resists the
They also -- through the joint action of Rating Agencies, the Anglosaxon
media, the vassal vassal states' media, make national debt's yield spreads
skyrocket. It's been the way to make entire governments tumble in Europe,
as well as force ministers for economics to resign. After obeisance has
been restored -- and an "ex Goldman Sachs man" put on the presidential/ministerial
chair, usually -- investors magically find back their trust in the nation's
economic stability, and yield spreads return to their usual level.
Jake > ,
August 19, 2017 at 1:46 pm GMT
These foreign vassals had a cozy existence
No doubt about it. That's how thugs rule; there are plenty of quivering
sell outs to do the rulers' bidding. Look at the sickening standing ovations
given to Netanyahoo by supposed "US" congresscreeps.
Joe Hide > ,
August 19, 2017 at 1:47 pm GMT
@Fidelios Automata Abraham Lincoln's economic policy was to combine
private monopolies with the Federal Government under a President like him:
one who ordered the arrests of newspaper editors/publishers who opposed
his policies and more 'despotic' goodies.
SolontoCroesus > ,
August 19, 2017 at 3:04 pm GMT
While the article favorably informs, and was written so as to engage
the reader, it lacks reasonable solutions to its problems presented. One
solution which I never read or hear about, is mandated MRI's, advanced technology,
and evidence supported psychological testing of sitting and potential political
candidates. The goal would be to publicly reveal traits of psychopathy,
narcissism, insanity, etc. Of course, the most vocal opposition would come
from those who intend to hide these traits. The greatest evidence for the
likelyhood of this process working, is the immense effort those who would
be revealed have historically put into hiding what they are.
Jake > ,
August 19, 2017 at 3:05 pm GMT
No way. How about Jewish terrorists ? Very few Italians in the
ruling "aristocracy." Lots of Jews.
jacques sheete > ,
August 19, 2017 at 3:36 pm GMT
Eric Zuesse is a nasty, hardcore leftist in the senses that matter most.
Often, he reveals his Leftism to be based on his hatred of Christianity
and his utter contempt for white Christians. But there is that dead clock
being correct twice per day matter. In this article, Zuesse gets a good
First, he delineates the American Elites well. The USA forged by
Abe Lincoln is not a real democracy, not a real republic. It is the worst
kind of oligarchy: one based on love of money almost exclusively (because
if a man does not love money well enough to be bribed, then he cannot be
trusted by plutocrats) while proclaiming itself focused on helping all the
little guys of the world overcome the power of the rich oppressors.
It is the Devil's game nearly perfected by the grand alliance of
WASPs and Jews, with their Saudi hangers-on.
Second, it is fair to label America's Deep State fascist , Elite
Fascist. And we should never forget that while Jews are no more than 3%
of the American population, they now are at least 30% (my guess would be
closer to 59%) of the most powerful Deep Staters. That means that per capita
Jews easily are the fascist-inclined people in America.
The most guilty often bray the loudest at others in hope of getting them
blamed and escaping punishment. And this most guilty group – Deep State
Elites evolved from the original WASP-Jewish alliance against Catholics
– is dead-set on making the majority of whites in the world serfs.
Third, the US 'weaponization of finance' seems to have been used against
the Vatican to force Benedict XVI to resign so that Liberal Jesuit (sorry
for the redundancy) Jorge Bergolgio could be made Pope. The Jesuits are
far and away the most Leftist and gay part of the Catholic Church, and the
American Deep State wanted a gay-loving, strongly pro-Jewish, strongly pro-Moslem
'immigrant' as Pope.
Fourth, that America's Leftists of every stripe, America's Neocons, and
America's 'compassionate conservatives' all hate Putin is all you should
need to know that Putin is far, far better for Russia's working class, Russia's
non-Elites, than our Elites are for us.
Priss Factor > ,
August 19, 2017 at 3:44 pm GMT
@Brabantian Good comments.They apply to a few others around here as
well, particularly this.
who mixes some truth with big lies
jacques sheete > ,
August 19, 2017 at 3:46 pm GMT
Charlottesville, Occupy Wall St And The Neoliberal Police State. Charlottesville
was a Neoliberal ambush designed to crush the Alt Right once and for all.
This story must be told.
No way. How about Jewish terrorists ? Very few Italians in the ruling
"aristocracy." Lots of Jews.
Very few Italians in the ruling "aristocracy."
Another common misconception is to associate the mafia with Italians
mostly. The Italian mafiosi are pikers compared to the American ones of
Eastern European descent. The real bosses are not the Italians.
Bugsy Siegel, Louis "Lepke" Buchalter, Longy Zwillman, Moe Dalitz, Meyer
Lansky and many many others.
Even the Jewish Virtual Library admits to some of it.
New York, Chicago, Las Vegas, LA, Miami, and many others all dominated
by non-Italian mobsters, not to mention the US government.
Fred C. Dobbs
June 17, 2017 at 01:59 AM
(Is this anything?)
June 17, 2017 at 08:10 AM
The Amazon-Walmart Showdown That
Explains the Modern
NYT - Neil Irwin - June 16
With Amazon buying the high-end grocery chain Whole Foods,
something retail analysts have known for years is now
apparent to everyone: The online retailer is on a collision
course with Walmart to try to be the predominant seller of
pretty much everything you buy.
Each one is trying to become more like the other - Walmart
by investing heavily in its technology, Amazon by opening
physical bookstores and now buying physical supermarkets. But
this is more than a battle between two business titans. Their
rivalry sheds light on the shifting economics of nearly every
major industry, replete with winner-take-all effects and huge
advantages that accrue to the biggest and best-run
organizations, to the detriment of upstarts and second-fiddle
That in turn has been a boon for consumers but also has
more worrying implications for jobs, wages and inequality.
To understand this epic shift, you can look not just to
the grocery business, but also to my closet, and to another
retail acquisition announced Friday morning. ...
Walmart to Buy Bonobos, Men's Wear Company, for $310
When you lose confidence in your
Fred C. Dobbs -
June 17, 2017 at 10:19 AM
existing biz you buy bizes
It turns out Neil Irwin has
June 17, 2017 at 10:41 AM
a thing for fine dress shirts.
WTF? Amazon has not lost confidence in creating a monopsony
for buying and selling stuff. It just expanded their empire
June 17, 2017 at 12:35 PM
Cornering as many markets as possible
June 17, 2017 at 02:38 PM
is a fools mission
corporations get to keep their cash flow
Review the nonsense oil companies got into when rolling in
Thanks to OPEC
WTF? You clearly never looked at Amazon's income statement.
June 17, 2017 at 04:28 PM
Amazon's business model is to become the dominant
intermediary between producers and consumers.
June 17, 2017 at 12:38 PM
positions it to ideally serve this role in every local market
in America...one stop shopping, whether you're buying from
China or from the local Chinatown.
When a company like Amazon is capturing market share,
profits don't matter, as its stock price shows.
And Bezos ownerships of the Washington Post gives him a
powerful bully pulpit against anyone with thoughts about
anti-trust...that and his deep pockets.
I wouldn't call it confidence. Any line or mode of business
can be grown only to a certain size. At some point S-curve
effects and scale complexity lead to diminishing returns,
even if the business is managed as well as it can be. Also in
some cases there may simply not be enough demand for the one
or few things the company does.
June 17, 2017 at 01:31 PM
Then companies have to
branch out into other ways of business, typically outside
their current activities. Sometimes there is synergy,
sometimes not, and it's just about buying market and revenue
with the imagination one can manage it better to a higher
rate of profit.
June 17, 2017 at 04:40 PM
They can turn into passive cash cows
Yes, though usually there is a growth mandate imposed by
management or "investors".
June 18, 2017 at 07:11 AM
Now we are in the heart of darkness
June 17, 2017 at 10:19 PM
Where growth is earnings
Or revenues or market shares or
And indeed too often
management v stock holders mandates overt or tacit obtain
Comment over brunch: Must be getting late in the cycle.
Amazon shrewdly using it's internet valuation to buy tangible
June 18, 2017 at 07:11 AM
May 26, 2017 at 05:55 AM
An enlightening discussion on the tendency toward monopoly among data gathering disrupters.
Especially important seems to be the possibility of fine-grained price discrimination. While saying
not all price discrimination is considered negative by economists without studying it, it does
seem discrimination should be taken as prima facie evidence of monopoly.
While the article talks about monopoly and capture in this area, let me reiterate that looking
around the more regular corporate ecosystem there is increasing concentration among buyers and
often among suppliers that seems not to attract anti-trust attention as long as the final consumer
seems to be not harmed. "Not harmed" does not include missing out on falling prices no longer
Valletti, who is also a Professor of Economics at the
Imperial College Business School and the University of Rome Tor Vergata, discussed the
EC's investigation into the Facebook-WhatsApp merger during the panel. Facebook, he
said, had "lied" to European regulators about its ability to absorb WhatsApp's user
data, but the larger issue was market definition.
"Would the decision on the merger have changed had the
Commission known that information at the time?" asked Valletti, who joined theEC in
2016. "At the time, the Commission defined the relevant market as non-search
advertising. This is a huge market. In that ocean, even Facebook doesn't have a lot of
market power. If instead the market definition had been, for instance, advertising on
social networks, [it's]likely theywould have concluded that Facebook would have been
dominant in that particular market, and that integrating that useful information from [WhatsApp]
could have enhanced its market power." Valletti also stressedthe importance of having
individual-level data when discussing issues like competition at the advertising market,
and not just looking at market shares.
Pasquale and Taplin, meanwhile, criticized U.S. antitrust
authorities, with Taplin saying that digital platforms have "done very well because they
have a certain regulatory capture" and Pasquale remarkingthat "U.S. antitrust policy is
rapidly becoming a pro-trust policy."
As an example of this "pro-trust" policy, Pasquale cited
the FTC's lawsuit against online
contact lens retailer 1-800 Contacts
. 1-800 Contacts was sued by the FTC last
yearfor having reached agreements with 14 other online contact lens sellers that they
would not advertise to customers who had searched for 1-800 Contacts online."You would
imagine that given the power of these [companies], and given the activity in Europe and
many other nations, our enforcers would be extremely concerned about these platforms.
They are-they're concerned about little companies hurting the platforms," he said.
The FTC, added Pasquale, had pursued the 1-800 Contacts
case aggressively. "I'm not here to comment on the merits of this case, but I think that
the choice of this enforcement target speaks volumes. What does it say? It says that if
small firms arebeing exploited or hurt by a big digital behemoth, or think [they]are,
don't try in any way to coordinate or maintain your independence. What you should do is
all combine and merge and become a giant, say, contacts firm. In the media, they should
all combine and merge and maybe all be bought by Comcast, so that then they can
negotiate with Google in a way that they are relatively of the same size and power.
That's the pro-trust message we're getting under current non-enforcement U.S. antitrust
"... Eros the bittersweet ..."
April 26, 2017 at 4:11 pm
April 26, 2017 at 7:55 pm
You mean if Borders had become Barnes
& Noble? Well, B&N is struggling, too.
Just like Walmart, Amazon's business model ELIMINATES the competition.
In my view, every Amazon purchase is a rock thrown through the window of
a local retailer, large or small. Personally, if I ever throw rocks, they're
going to be aimed bigger and better targets than that.
April 26, 2017 at 4:12 pm
B&N closed their Georgetown (DC)
store a couple of years ago, IIRC
right before the xmas season got
started. It was an oasis on a side
of town that would rather sell you a
$500 pair of pants dotted with
embroidered lobsters. The building
was a nicely reclaimed three-floor
warehouse space with coffee and
lounging areas, and it had become a
nice excuse to go into DC and hang
April 26, 2017 at 4:14 pm
because noone can afford what a new (dead
tree) book costs. I get everything used for a
few bucks a book.
April 26, 2017 at 5:34 pm
but but but used books have to start as
new books sometime
April 26, 2017 at 7:31 pm
I'm not sure this is entirely true. Just
as an example, a trade paperback I bought in
1998 for a cover price of $12.95 (Anne
Eros the bittersweet
has a cover price of $13.95, only a dollar
more. The BLS's CPI calculator says the book
should cost $19.54 in today's dollars.
That doesn't strike me as unaffordable.
It's possible that if I went out and bought
a copy of the book now, the printing might
be worse, or the paper of a lower quality,
but I cannot imagine it being much worse
than the copy I already own.
Use interlibrary loan and never buy
another book at all.
"Our Efforts to Deal With Tech Firms' Market Dominance in the U.S.
Have Been an Abject Failure"
: ...Q: The five largest internet and
tech companies-Apple, Google, Amazon, Facebook, and Microsoft-have
outstanding market share in their markets. Are current antitrust
policies and theories able to deal with the potential problems that
arise from the dominant positions of these companies and the vast data
they collect on users?
Our efforts to deal with the problems in the United States have been
an abject failure. ...I might note that Facebook's dominant position
in the market is due in part to its role as an innovator and partly to
"network externalities"... Microsoft's dominant position is also
attributable in part to network externalities...
But the antitrust agencies have not taken sufficient measures to
remedy abuses of this advantage.
Q: Is there a connection between the growing inequality in the U.S.
and concentration, dominant firms, and winner-take-all markets?
I believe there is. The evidence of rising wealth inequality,
especially through the work of Piketty and co-authors, is compelling.
Less well known is evidence compiled at M.I.T. of strongly rising
inequality of compensation, especially at the top executive levels.
The nexus has not to my knowledge been fully articulated.
Here's my hypothesis: In recent decades, most publicly-traded
corporations, at least in the United States, have embraced executive
compensation consultants to advise the board of directors on executive
compensation levels. Those consultants provide data on compensation
averages and distributions for companies in peer industries. But then
the Lake Wobegon effect goes to work. The boards say, "Surely, our guy
isn't below average," to the average reported by the compensation
consultants becomes the minimum standard for compensation. If each top
executive receives at least the minimum reported pay and often more,
the average rises steadily.
Indeed, and here I tread on weaker ground, those compensation costs
are built into the costs considered by companies in their product
pricing decisions (in a kind of rent-seeking model), and so price
levels rise to accommodate rising compensation. I might note that this
dynamic applies not only for chief executives, but trickles down to
embrace most of companies' management personnel. ...
March 22, 2017 at 11:04 AM
As I said a couple days ago, "Good to see economists finally
addressing issues that John Kenneth Galbraith raised 50 years
ago...but were largely ignored since then by 'librul'
economists who didn't want to cross the folks who had funded
their academic chairs."
March 22, 2017 at 12:44 PM
For the past 40 years, corporate
strategic planning has been all about market dominance. Back
in the late 1970s Harvard Business School professor Michael
Porter was all the rage along with the Boston Consulting
Group, Mitt Romney's Bain Capital, and GE's Jack Welch. the
mantra was that if you couldn't dominate a market, best get
out. Weaker players were tolerated mostly to allay anti-trust
Meanwhile, Republicans tacitly supported it, Democrats
turned a blind eye, and 'librul' economists were off doing
whatever they do.
Evidence in support of Sherer's hypothesis can be found in
Tom DiPrete et al's 2010 article in AJS: Compensation
Benchmarking, Leapfrogs, and the Surge in Executive Pay. They
write: "Scholars frequently argue whether the sharp rise in
chief executive officer (CEO) pay in recent years is
"efficient" or is a consequence of "rent extraction" because
of the failure of corporate governance in individual firms.
This article argues that governance failure must be
conceptualized at the market rather than the firm level
because excessive pay increases for even relatively few CEOs
a year spread to other firms through the cognitively and
rhetorically constructed compensation networks of "peer
groups," which are used in the benchmarking process to
negotiate the compensation of CEOs. Counterfactual simulation
based on Standard and Poor's ExecuComp data demonstrates that
the effects of CEO "leapfrogging" potentially explain a
considerable fraction of the overall upward movement of
executive compensation since the early 1990s."
March 22, 2017 at 01:08 PM
The story told is nearly exactly the one Warren Buffett has
been telling since 95, maybe earlier, so I do not know who
"... Labor market anyone -- where market power also translates to political power -- if labor has decent market power? Toothless (as in no penalty for crushing unions for 80 years) institutions are the reality. ..."
"... Do you guys ever talk about anything other but what the other guys talk about? ..."
Overview The U.S. economy has a "market power" problem, notwithstanding our strong and extensive
antitrust institutions. The surprising conjunction of the exercise of market power with well-established
antitrust norms, precedents, and enforcement institutions is the central paradox of U.S. competition
Market power in the U.S. economy today : As this policy brief explains, the harms from the exercise
of firms' market power may extend beyond individual markets affected to include slower overall economic
growth and increased economic inequality. The implications for future economic productivity and welfare
are troubling, but before detailing these consequences, it is necessary to understand why market
power is a major issue despite well-established antitrust enforcement institutions and legal precedents.
anne : ,
March 20, 2017 at 11:34 AM
mulp : ,
March 20, 2017 at 12:26 PM
March 19, 2017
"There Is Convincing Evidence That Concentration Has Been Rising"
Interview of John E. Kwoka
Five Walmarts competing with each other would not raise worker wages above the wages Walmart pays.
In fact, it would lower wages.
pgl -> mulp... ,
March 20, 2017 at 01:09 PM
I remember Milton Friedman's Newsweek columns circa 1970 which are deep behind a paywall so
I can't even find a date and title.
I remember one where he argued for utility deregulation and introduction of competition to
lower prices of electricity and telephone service.
He argued that the PUC was captured by the utility that by regulation made a business profit
only on ROIC plus a small rent on operating costs. By regulation, capital was always depreciating,
thus a power plant or the wires and poles distributing power were constantly falling in value.
The depreciation was an expense plus the labor costs which determined the base rate, with a 8-10%
return on capital, the original labor costs of the power plant and wires and poles minus depreciation
and a rent on operating labor.
So, how does a utility earn higher profit?
It must pay workers with capital to build more assets, more power plants, more and better power
wires and poles. And it must pay more to workers to operate the utility.
In other words, profit increased the more paid to labor. The PUC had to approve these labor
costs as prudent, but paying prevailing union wages was prudent. Thus, the utility could meet
the demands of unions for higher wages, for more people on the job.
Worse, the PUC would get hammered with complaints if the utility was unreliable, so most regulators
approved utility requests to build redundant power plants and build redundant power lines, plus
hire redundant workers who could be put to work recovering from storm damage.
Thus, in Milton Friedman's view, government sanctioning a monopoly resulted in too much, too
reliable service that paid too many workers too much money at the expense of all customers, especially
customers who did not need the reliability.
Worse, the utilities were constantly trying to get customers to buy more to justify building
more capital assets to increase profits.
And even worse, too many workers were paid too much which resulted in too much consumption,
thus too much production, and that created too much demand for labor, driving up wages and increasing
the number of workers, driving up I incomes and consumption.
He noted that the rush to build nuclear power plants was driven by their high capital costs
and nearly purely utility labor operating costs - the utility did not pay for coal for which it
got no business profit.
Thus his efforts to deregulate utilities: cutting labor costs, cutting business profits. He
argued for fewer workers operating utilities and building capital assets, with economic profits
driving investment decisions. Ie, a 20% profit would drive more investment, but a 5% profit would
drive layoffs and cuts in reliability. Any individual who needed reliability would simply pay
more to get higher reliability.
And as utilities were deregulated as he called or as best as it could be done, we have seen
job losses, pay cuts, higher unreliability, sometimes bankruptcy, and other times extremely high
profits, often both at the same time. When PURPA was implemented by States and utilities forced
to sell power generation, then nuclear power plants were sold below the book capital cost, by
these forced sales were deemed takings, so the losses from sales became stranded costs added to
the rate base as depreciation. Meanwhile, as investment in new power plants fell, nuclear power
plants became very profitable as market prices rose. So, the utility was going bankrupt after
forced to sell assets while the assets were generating 20% or more on purchase price returns,
but less than 10% on construction cost.
Friedman made the same argument for passenger airlines. Airlines paid high wages and had large
cabin crews and most were profitable enough to work hard to increase customer demand. They got
approval to offer low fares at the last minute to students and other classes of non-customers.
Thanks to regulation. Then deregulation happened, and every airline but one went bankrupt, service
quality declined, worker wages slashed, crews in the air and on the ground cut.
Friedman argued that everyone benefits from competition and is harmed by monopoly, especially
regulated monopoly, because too many workers are paid too much, and those workers consume too
much, and everyone is forced to pay too much to live.
Thus the creation of free lunch economics: Driving down prices but increasing profits will
make everyone better off as those evil workers get less pay, costing consumers much less.
Workers are not valued consumers. Valued consumers are not workers.
Milton Friedman was not a worker, but a valued intellectual and consumer.
"Five Walmarts competing with each other would not raise worker wages above the wages Walmart
pays. In fact, it would lower wages."
JohnH : ,
March 20, 2017 at 01:09 PM
So you accept the Economism view of labor markets where monopsony power does not exist? Sorry
but the labor market evidence questions this perfectly competitive view of labor markets.
Good to see economists finally addressing issues that John Kenneth Galbraith raised 50 years ago...but
were largely ignored since then by 'librul' economists who didn't want to cross the folks who
had funded their academic chairs.
pgl -> JohnH... ,
March 20, 2017 at 01:10 PM
So John Kenneth Galbraith was a right winger? Could you please stop this silly parade that liberal
economists have never talked about what they often talk about. It is beyond pointless.
JohnH -> pgl... ,
March 20, 2017 at 01:45 PM
Oh, please. 'Librul' economists have mostly ignored monopoly and oligopoly for years. And Galbraith
was definitely NOT a conservative, but academic economists largely ignored his valuable contributions.
JohnH -> JohnH... ,
March 20, 2017 at 01:52 PM
As a measure of 'librul' concern about monopoly and oligopoly, Krugman talks about this even less
than he talks about inequality...less than twice a year.
JohnH -> pgl... ,
March 20, 2017 at 07:05 PM
Market concentration, monopoly, and oligopoly aren't even listed as categories at economistsview!
Flat Eric -> JohnH... ,
March 21, 2017 at 06:58 AM
Yet pgl tries to assure us that 'librul' economists take this issue seriously...guffaw, guffaw.
Nor are labor economics, trade or public economics. So what?
Denis Drew : ,
March 20, 2017 at 02:08 PM
Competition economics is still a huge and very active topic within the discipline. Indeed,
the last but one Nobel winner, Jean Tirole, works extensively in this area.
"Overview The U.S. economy has a "market power" problem, notwithstanding our strong and extensive
point : ,
March 20, 2017 at 05:54 PM
Labor market anyone -- where market power also translates to political power -- if labor
has decent market power? Toothless (as in no penalty for crushing unions for 80 years) institutions
are the reality.
Do you guys ever talk about anything other but what the other guys talk about?
"The U.S. economy has a "market power" problem, notwithstanding our strong and extensive antitrust
institutions. The surprising conjunction of the exercise of market power with well-established
antitrust norms, precedents, and enforcement institutions is the central paradox of U.S. competition
point -> point... ,
March 20, 2017 at 09:46 PM
Left off the subsequent list of possible explanations is that the first above statement just
may be false.
Thinking especially about the "notwithstanding our strong and extensive antitrust institutions"
"... The matter with ATT was originally made public in 2014 and also involved two companies that actually applied the unauthorized charges, Tatto and Acquinity. ..."
Posted by BeauHD on Thursday December
08, 2016 @06:25PM from the money-back-guaranteed dept. An anonymous reader quotes a report from Network
Some 2.7 million ATT customers will
share $88 million in compensation for having had unauthorized third-party charges added to their
mobile bills , the Federal Trade Commission announced this morning. The latest shot in the
federal government's years-long battle against such abuses, these refunds will represent the most
money ever recouped by victims of what is known as "mobile cramming," according to the FTC.
From an FTC
press release :
"Through the FTC's refund program, nearly 2.5 million current ATT customers will receive
a credit on their bill within the next 75 days, and more than 300,000 former customers will receive
a check. The average refund amount is $31. [...] According to the FTC's complaint, ATT placed
unauthorized third-party charges on its customers' phone bills, usually in amounts of $9.99 per
month, for ringtones and text message subscriptions containing love tips, horoscopes, and 'fun
facts.' The FTC alleged that ATT kept at least 35 percent of the charges it imposed on its customers."
The matter with ATT was originally made public in 2014 and also involved two companies that
actually applied the unauthorized charges, Tatto and Acquinity.
From Encyclical Letter Laudato Si' of the Holy Father Francis, On Care For
Our Common Home:
The basic problem goes even deeper: it is the way that humanity has taken
up technology and its development according to an undifferentiated and one-dimensional
paradigm. This paradigm exalts the concept of a subject who, using logical
and rational procedures, progressively approaches and gains control over
an external object. This subject makes every effort to establish the scientific
and experimental method, which in itself is already a technique of possession,
mastery and transformation. It is as if the subject were to find itself
in the presence of something formless, completely open to manipulation.
Men and women have constantly intervened in nature, but for a long time
this meant being in tune with and respecting the possibilities offered by
the things themselves. It was a matter of receiving what nature itself allowed,
as if from its own hand. Now, by contrast, we are the ones to lay our hands
on things, attempting to extract everything possible from them while frequently
ignoring or forgetting the reality in front of us. Human beings and material
objects no longer extend a friendly hand to one another; the relationship
has become confrontational. This has made it easy to accept the idea of
infinite or unlimited growth, which proves so attractive to economists,
financiers and experts in technology. It is based on the lie that there
is an infinite supply of the earth's goods, and this leads to the planet
being squeezed dry beyond every limit. It is the false notion that "an infinite
quantity of energy and resources are available, that it is possible to renew
them quickly, and that the negative effects of the exploitation of the natural
order can be easily absorbed"
"The technocratic paradigm also tends to
dominate economic and political life. The economy accepts every advance
in technology with a view to profit, without concern for its potentially
negative impact on human beings. Finance overwhelms the real economy. The
lessons of the global financial crisis have not been assimilated, and we
are learning all too slowly the lessons of environmental deterioration.
Some circles maintain that current economics and technology will solve all
environmental problems, and argue, in popular and non-technical terms, that
the problems of global hunger and poverty will be resolved simply by market
growth. They are less concerned with certain economic theories which today
scarcely anybody dares defend, than with their actual operation in the functioning
of the economy. They may not affirm such theories with words, but nonetheless
support them with their deeds by showing no interest in more balanced levels
of production, a better distribution of wealth, concern for the environment
and the rights of future generations. Their behavior shows that for them
maximizing profits is enough. Yet by itself the market cannot guarantee
integral human development and social inclusion. At the same time, we have
"a sort of 'superdevelopment' of a wasteful and consumerist kind which forms
an unacceptable contrast with the ongoing situations of dehumanizing deprivation",
while we are all too slow in developing economic institutions and social
initiatives which can give the poor regular access to basic resources. We
fail to see the deepest roots of our present failures, which have to do
with the direction, goals, meaning and social implications of technological
and economic growth."
If you look back on past American wars, like the Spanish-American war in Cuba that also
seized the Phillipines, that was a war for Corporate Globalization. President McKinley
even said so. It as a war to "open up markets", including China, which was closed
to American business. So were wars and many occupations in Central and South America,
from the earliest beginnings of America on through today. Revolutionary movements
of peasants and campesinos would sometimes try to overthrow the mostly-Spanish European
oligarchs and their dictators, and American would come in and repress the peasants, or in
the case of a truly democratic government that supported the will of their people, they
would overthrow or kill their leaders or actually send in Marines. This is what Marine
Commandant General Smedley Butler was explaining, when he wrote "I
was a gangster for capitalism" and "War
is a Racket".
World Wars One and Two also had their geo-political and geo-strategic factors for America,
in terms of dominating global trade with fractured Europe, and beating back the British
Empire. Hitler beat back BOTH Britain and France, as well as Belgium and ... well
... about ALL of Europe, some of America's biggest imperial competitors. Hitler and
Mussolini also crushed communism and labor activism growing in popularity in Germany and
France, and Hitler nearly destroyed the newly founded USSR. (Stalin signed a non-aggression
pact with Hitler only after Britain refused to sign a mutual defense pact with Stalin, and
some in British govt and Intell were covertly helping the Nazis.
Wall Street heavily helped the
Even the invasion of North America and annihilating the native population was to find new
sources of raw capital for European corporations, and the American Revolution was to get
rid of unfair taxes and control over American corporations by what was being seen as a foreign
By the way, it's not about "liberals hate corporations". Every corporation is a quasi-government
entity. It's not simply a "large company". Someone could incorporate a solo
The point is, it's a contract or "charter" that a company takes, via a relationship and
agreements with government, for protection against personal liability, elimination or limitation
of personal responsibility. This relationship is defined by mountains of Corporate
Law precedents and rules. There is really no such thing as a "private corporation".
The Corporation is a legal tool for growth of capitalism, but "no legal responsibility"
is dangerous for society, because "society" is excluded.
Yet at the same time, every US corporation is considered a "person" due "equal protection" under
the the 14th Amendment in the sense of "civil liberties" -- these legal instruments can
claim all the protections that the Bill of Rights guarantees to humans, but this "equal
protection" gives corporations far more power than human beings. "Treaties" and "Agreements"
have been in process for many years, setting up non-democratic institutions that manage
global corporatism. They place the "divine" right to profits over any rights of human
beings. We've been trumped. So getting back on track ... To summarize a long point, in the Military-Industrial-Finance-Corporate-Media-Security-Infotainment
complex, the heads of many of the largest corporations and conglomerates include former
military intelligence officers, bankers, and former/future govt appointees. Most govt.
appointees are not lifetime politicians, they're corporate officers, chiefs, lawyers, bankers.
The Central Intelligence Agency, which has never been about collecting information but 80%
covert ops, according to retired agents, it's directors are typically Wall Street bankers
and lawyers, not military intelligence.
Most people know that
Pepsico owned both
Taco Bell and KFC, and many more companies.
Most people have heard about "holding companies" and "corporate shells", giant conglomerate
umbrellas, like Altria Group, previously known as Philip-Morris (Marlboro, other tobacco),
that has owned Miller Beer, Kraft Foods, Nabisco, and more. But not just smokes and food.
consist of a former Secretary of Defense and Wall Street bankers. Read some of
these biographies: Govt positions, Airline deregulation, Aerospace, SALT II treaty, Brookings
Institution, Neuro medicine, UK politics, Fox Entertainment, Travellers, US Airways Group,
Lehman Brothers Private Equity, Federal Reserve, U.S. Treasury, Overseas Private Investment
Corporation (govt), Marriott International, National Geographic Society, Citigroup, New
York Stock Exchange, Lazard FrÃ¨res & Co. LLC (Wall St), etc.
Get it? This financial shit is interlocked and layered, with subsidiaries and shells
and cross-linking. Corporate CEOs, lawyers, and bankers run the government. Govt officials
support multi-national corporations. It's a revolving door.
The Boards of Directors of most major Fortune 500 companies are cross-linked with other
companies, often with competitors.
Since the average Corporate Director sits on 14 Boards, these boards include people from
across Industry, Media, Food, Medicine, Military Contractors, and more. This is called
"interlocking Boards of Directorate", a financial and control infrastructure. Approximately
the top 1% (or less) of America basically owns or controls the entire country, 99% of corporate
property, including land. This is simply an economic fact.
This is how the world is really organized. The White House, Congress, Cabinet, Departments,
Judiciary, CIA is just one more set of players.
Then there's high military intelligence, what some call "Shadow Govt".
As a matter of fact, most CIA directors do not come from a military background, but rather
Wall Street lawyers and bankers.
Friedman said, "The hidden hand of the market will never work without a hidden fist"
of the U.S. military. (Why
is that? Why does buying and selling and free trade require armed force? Isn't
it just like shopping? Doesn't everyone want to make money? Who brandishes heavy
weapons to go shopping ... except for a robbery?)
"What we in America call terrorists are really groups of people that reject the international
system..." - Henry Kissinger
Charles Townsend, former CEO of Avis, wrote a critical guide for successful corporations
called "Up the Organization". He mentioned that a mere 5000 people control the "commanding
heights" of the US economy, and that this ruling elite "regard this country as their own
whore house and they treat each president as their private towel boy." So there ya
Increasingly, there appears to be a connection between neoliberalism and the development of anomie.
Such an association is unsurprising considering that neoliberalism encourages individuals to achieve
ever greater success even though such a goal is unrealistic. In response to being blocked from realizing
their never-ending aspirations,
argues that people in success-driven societies will feel deprived and frustrated as a divide forms
between idealistic ambitions and factual reality. While such a divide has traditionally been the
widest in developed capitalist states like the U.S.,
Passas (2000) contends that the growth of neoliberalism has exacerbated this problem in countries
throughout the world. As a result, anomie, or the "withdrawal of allegiance from conventional norms
and a weakening of these norms' guiding power on behavior" has increased on a global scale (Passas
2000:20). Oozing with the anomie brought about by constant strain, neoliberalism can intensify the
occurrence of violence as frustrated people struggle to live and to succeed in an unequal society.
In response to this idea, it appears that as neoliberalism becomes more prominent in a country,
it can be expected that anomie and, as a result, interpersonal violence within that country will
When it comes to success-driven societies, both
Durkheim (1951) and Merton (1968) argue that such environments can lead to the development
of anomie as a result of the imbalance between societal expectations and realistic opportunities.
Both scholars agree that the occurrence of means-ends discrepancies can cause to people to feel
highly strained and frustrated. And, as people become increasingly aware of power and economic asymmetries,
especially as globalization and neoliberalism become more prominent in a country, this sense of
strain and frustration can grow. In response, some may choose to either partially or fully disregard
previously internalized societal norms that no longer seem useful. As Passas (2000) explains, this
means that conventional norms may lose much of their meaning and/or that they may lose their ability
to guide pro-social behavior. Such a loss of norms results in anomie, or normlessness. Unfortunately,
individuals dealing with anomie typically have limited options when it comes to turning to the state
for help. This is because neoliberal policies have often already done away with many of the welfare
programs, forms of assistance, and safety nets that had previously kept individuals afloat (Passas
2000). The loss of the state as form of relief can then further encourage the evolvement of anomie
within a society.
Considering that anomie results in the full or partial loss of social norms, it is not surprising
that anomie can lead to deviance. As Passas (2000) points out, normlessness almost necessitates
deviance when legitimate means to success are blocked. Individuals facing such a reality feel less
of a need to follow previously internalized social norms and more of a need to engage in deviant
activities in order to reach their goals. This desire to succeed at all costs paired with a disregard
for social rules can easily result in violence. As an example of this idea,
Fullilove et al. (1998) found that the occurrence of a violence epidemic in Washington Heights,
a neighborhood in New York City, was the result of growing anomie as the neighborhood disintegrated
in the midst of social disarray.
Braithwaite et al. (2010) further contend that recent violence in Indonesia was the result of
societal-level anomie. Other studies (e.g.,
Messner and Rosenfeld 1997;
2000), too, have indicated that there exists a strong relationship between anomie and violence.
These findings are not counterintuitive. It makes sense that when people are feeling strained that
their frustration (and the loss of previously held norms against deviance) can transform into acts
In an effort to more clearly articulate this overall premise, consider the case of Russia. As
explained by Passas (2000), Russia began to slowly embrace neoliberal policies in the 1980s. By
the mid-1990s, these policies had resulted in lifting import and export tariffs, liberalizing prices,
removing domestic trade restrictions, minimizing the role of government, and privatizing public
property. Hungry for freedom, the Russian populace lapped up these neoliberal ideas as consumptionist
ideals replaced previously held socialist goals. Unsurprisingly, this zealous transition from socialism
to capitalism brought about many consequences including severe and growing social inequality. Unable
to overcome structural obstacles and unable to attain success, Passas writes that strain and frustration
resulted in many Russians becoming increasingly anomic. Simultaneously, deviance began to increase
as old social norms fell out of favor and the Russian government lost much of its autonomy. In response,
rising anomie and deviance resulted in a criminal explosion. Since the collapse of the USSR in 1991,
already high levels of homicide have increased dramatically, making Russia one of the world's hotspots
for murder (Pridemore 2002).
Chervyakov et al. (2009) further note
that, unlike in the USSR, murders in Russia are now much more likely to involve aggravating circumstances
like rape or robbery. Bringing these findings together,
(2005:111) research suggests that violence in Russia after the transition to capitalism "resulted
from inequitable distribution of wealth, rapid privatization, [and] a fall in real income" as well
as the loss of the social safety net and an increase in organized crime. Altogether, Russia is a
prime example of how the strain and frustration induced by neoliberalism can lead to anomie and,
eventually, to violence.
By briefly evaluating the case of Russia, it is hopefully clearer how neoliberalism can directly
contribute to anomie and indirectly contribute to violence. By creating incredible amounts of stress
for those blocked by society's goals (Durkheim 1957; Merton 1968), neoliberalism increases
the amount of anomie found within a society. This anomie, research has indicated, can then manifest
itself in frustration, deviance, and violence (Messner and Rosenfeld 1997; Fullilove et al. 1998;
Savolainen 2000; Braithwaite et al. 2010) just as it has done in Russia (Pridemore 2002; Collier
2005; Chervyakov et al. 2009). Without a doubt, the occurrence of violence furthers the development
of anomie in a society. This thus suggests that there exists a non-recursive relationship between
anomie and violence in that each variable can exacerbate the negative effects of the other. In an
effort to dismantle this relationship, Fullilove et al. (1998) argue that communities need to be
improved from within while having structural problems addressed from the outside. Doing so, of course,
would require very anti-neoliberal policies which, realistically, seem very unlikely to occur in
the near future.
For further reading:
Braithwaite, John. 2010. Anomie and Violence: Non-Truth and Reconciliation in Indonesian Peacebuilding.
Canberra, Australia: The Australian National University.
Chervyakov, Valeriy V., Vladimir M. Shkolnikov,
William Alex Pridemore, and Martin McKee. 2002. "The Changing Nature of Murder in Russia." Social
Science and Medicine 55(10):1713-1724.
Paul. 2005. Understanding Civil War: Europe, Central Asia, and Other Regions. Washington,
DC: The International Bank for Reconstruction and Development/The World Bank.
Durkheim, Emile. 1951 . Suicide. New York: Free Press.
Fullilove, Mindy Thompson, Veronique Heon, Walkiria Jimenez, Caroline Parsons, Lesley L. Green,
and Robert E. Fullilove. 1998. "Injury and Anomie: Effects of Violence on an Inner-City Community."
American Journal of Public Health 88(6):924-927.
K. 1968. Social Theory and Social Structure. New York: The Free Press.
Messner, Steven F., and Richard Rosenfeld.
1997. "Political Restraint of the Market and Levels of Criminal Homicide: A Cross-National Application
of Institutional-Anomie Theory." Social Forces 75(4):1393-1416.
Passas, Nikos. 2000. "Global Anomie, Dysnomie, and Economic Crime: Hidden Consequences of Neoliberalism
and Globalization in Russia and Around the World." Social Justice 27(2):16-44.
Pridemore, William Alex. 2002.
"Vodka and Violence: Alcohol Consumption and Homicide Rates in Russia." American Journal of Public
Jukka. 2000. "Inequality, Welfare State, and Homicide: F
Crisis, Populist Neoliberalism and the Limits to Democracy in Mexico Global Research
Organized Crime, Militarization and Populist Neoliberalism in Mexico
Recently, the outreach of organized crime linked to drug cartels has spread throughout the country,
even to Mexico's Southern border with Guatemala. Right after the dubious and contested 2006 presidential
election, Calderón tried to gain legitimacy by imposing an iron fist policy on organized crime through
mobilizing the military. Since 2006, fifty thousand federal soldiers have been deployed throughout
the country. This was partly seen by many sectors of the population as a positive step toward decreasing
the levels of violence, particularly in states where it is widely believed that organized crime
has infiltrated police forces and local institutions. This has become Calderón's strategy to gain
popular support in order to increase his bargaining power vis-à-vis the opposition while controlling
organized crime to maintain the political stability necessary for the functioning of markets.
The PRI claims that political stability was ensured under its presidential administrations and
blames the PAN for the rising levels of violence in the country. At the same time, the PRI is evoking
rosy political images of the past, which recall its clientelistic practices through which the party
used to allocate a small proportion of illegally appropriated funds to subordinated classes in order
to maintain the legitimacy of the party outside democratic mechanisms. These practices have been
maintained at the state and local level, resulting in a growing support for the PRI at the local
level from those sectors of the population increasingly marginalized in the past years by neoliberal
Both the PAN and the PRI have been carrying out campaigns of fear to stay in power. On the one
hand, Calderón is trying to increase his party's strength by stressing that his policy of militarization
is the only way to fight organized crime and disrupt alliances between drug cartels, police forces
and some state and local authorities. And that this policy can only be maintained if the PAN wins
the 2012 presidential election. On the other hand, the PRI is stressing that voting for the PAN
has only increased marginalization and violence. Thus, the PRI depicts itself as the only political
option for the 2012 presidential election. The disillusionment with the PAN over economic hardship
and growing violence can be seen in the 2009 mid-term elections for seats in the lower house, six
state governments and about 500 mayors in 11 states – the PRI won 36.7 percent of the seats in the
lower legislative house as well as most state and local posts. Thus both parties are employing populist
strategies to gain popular support around issues of violence and insecurity. At the same time, they
both have demonstrated their commitment to domestic austerity, on the one hand, and discretionary
government spending, on the other, to empower those groups that can maintain the neoliberal agenda.
Austerity from Within: the 2010 Mexican Budget
The 2010 Budget Initiative proposed by Calderón contradicts his previous rhetoric regarding the
counter-cyclical response to the crisis through more government spending and less taxes for the
majority of the population. The initiative he sent to Congress included a 0.5 percent of the GDP
deficit and a two percent rise in the goods and service tax, from 15 to 17 percent. While Calderón
argued that this two percent would be channeled to social programs to fight poverty, the aim of
expanding regressive taxation was in fact to increase state funding to prevent a credit-rating downgrade
of the country's debt. Interestingly enough, the measures contained in this initiative differ from
some of the prescribed policies of the World Bank, International Monetary Fund and the Organization
of Economic Cooperation and Development, which suggested avoiding regressive taxation and a temporary
deficit of 2.5 percent of the GDP to encourage state spending.
When the initiative was first sent to Congress, the PRI and the centre-left Party of the Democratic
Revolution (PRD) opposed the Executive's proposal. As negotiations between the president's party
and the PRI progressed, a new consensus around the budget was evident. The budget passed by Congress
kept a one percent increase in regressive taxation and included a request to the Executive to elaborate
an austerity program by March 15, 2010.
The alliance between the PRI and the PAN and the failure of the PRD to oppose the budget shows
the limits of electoral liberalization, a liberalization that has allowed the PRI and the PAN to
monopolize power in the Legislative and Executive branch in order to favour particular forces within
their parties. In this alliance, the PRI, which holds the majority of seats in the Lower House,
supported an expansion of regressive taxation as long as the PAN agreed to channel more funds to
state governments, which are mostly controlled by the PRI, as well as to remove transparency and
accountability mechanisms on state and municipal spending and cut federal social programs. In fact,
the states that received large benefits from this budget were the Estado de México, whose governor
is considered the main contender for the presidential candidacy of the PRI in 2012, and Oaxaca,
whose governor was found guilty of human rights violations by the Mexican Supreme Court. This budget
allows PRI governors to use public money in a discretionary way to gain support in their own states,
increase their clientelistic networks and enhance the party's position in the forthcoming 2012 presidential
election. Both the PRI and the PAN, along with other parties such as Convergencia and the Green
Party and some factions of the PRD, also agreed to the creation of an austerity program provided
that the big budgets of the political parties and the Legislative, which include personal expenses
and private medical insurance for legislators, would not be decreased.
The budget negotiations reveal two limits to the democratization of economic decision-making
in the country. First, Congress' request for an austerity program shows that austerity has not necessarily
been imposed from abroad, but rather it is Mexico's domestic balance of forces, particularly its
'representative institutions,' that have internalized capitalist discipline within the country.
Second, the 2010 budget negotiations illustrate how societal demands have been isolated from economic
decision-making and partisan politics. The marginalization of popular demands only benefits a small
group, particularly financial capital, whose investment in government debt and the Mexican peso
is guaranteed by the funding available in next year's public budget.
It might seem puzzling that Calderón and the PAN legislators decided to negotiate a budget with
the PRI that increases the latter's authoritarian power at the state level, at a high political
cost for the PAN in the upcoming 2012 presidential election. One reason for this generous gift to
the PRI was that the austerity budget could not pass without the votes of PRI legislators. Also,
Calderón needs the PRI support in the Senate for the confirmation of Agustín Carstens as the new
president of the central bank, who is one of Calderón's closer collaborators and orchestrator of
the new regressive tax, in order to increase the president's hold over economic policy. The other
reason is that both parties agree on the continuation of the neoliberal agenda and the exclusion
of progressive forces from the political realm. And both are being pressured to move forward in
this direction by the big business associations. The two parties, with some exceptions, have supported
the sudden closure of the public electricity company, Luz y Fuerza del Centro, and the attack on
the Mexican Electrical Workers Union (SME) while protecting other unions that support the current
neoliberal agenda such as the Teachers' National Union (SNTE). The PAN might even be willing to
allow the PRI to enhance its power as long as it leaves the neoliberal agenda intact and does not
allow progressive social forces to participate in policy-making. While there seems to be a consensus
between the PRI and the PAN regarding the neoliberal trajectory of the country, such consensus remains
fragile because of internal conflict within each of the parties of Mexican neoliberalism.
The Fragmentation of the Mexican Neoliberal Political Project: Spaces for Resistance
Mexico's current conjuncture has produced growing tensions among the supporters of the neoliberal
project itself. While previous administrations constructed a consensus around the neoliberal agenda,
disagreement on these policies have become evident during Calderón's presidency. The 2010 budget
disrupted the PAN's unity when PAN Senators, in particular, resented Calderón's pressure to move
forward on the tax increases and grant more leeway for state governors' discretionary spending.
Also, the close relations between Calderón and the business sector have become strained after the
2010 budget negotiations. In the most recent Mexican Business Summit in Monterrey, some of the largest
Mexican corporations not only expressed their disapproval of Calderón's budget but also of the "government-promoted
model of the past 25 years, which has only generated slow rates of growth and low levels of employment."
The tensions between big business and the PAN as well as within both the PAN and the PRD have
combined with popular discontent to open spaces of resistance for opposition forces at the local,
state and national level. However, divisions within the Mexican Left need to be overcome in order
to take advantage of these spaces. The electoralist focus and the internal conflicts within the
PRD have not allowed this party to forge close alliances with labour and grassroots organizations
at the national level. Also, there are regional differences regarding the issues that are considered
relevant to an alternative agenda to neoliberalism. For instance, people in Northern Mexico, including
progressive social organizations, which are mostly concerned with drug-related violence and maquiladora
issues, might not necessarily identify themselves with the struggles in Central and Southern Mexico
such as the mobilization of the Mexican Electrical Workers and the Zapatista movement. In general,
it is necessary to find commonalities among Mexican progressive socio-political movements and organizations
at the national level in order to create consensus around a democratic agenda that can gain momentum
in the current conjuncture.
Hepzibah Muñoz-Martínez is a researcher and writer living in Mexico.
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