‘People Get Ready: The Fight against a Jobless Economy and a Citizenless Democracy’ reviewed by Hans G Despain

Reviewed by Hans G Despain

About the reviewer

Hans G Despain is Professor of Economics and Department Chair at Nichols College, Massachusetts. He …

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The current oligopolistic economic order is not sustainable. Corporations are too big, too powerful, and they are becoming more and more antagonistic to the well-being of individual human beings. The policy and structural changes needed for a more healthy political economy are beyond the countenance of today’s political and corporate leaders. To create structures that would lead us away from monopoly-finance capitalism would “take an army of aroused and informed citizens” (19).

Capitalism Is No Alternative (CINA). The processes of accumulation, concentration and centralization march on, making giant firms titans of economic wealth and political power. In 1950, the one hundred largest firms in the U.S. accounted for 26 percent of GDP. In 2013, the one hundred largest firms account for 43 percent of U.S. GDP (69). Average gross profit per employee increased from $44.50 in 1953, to $224.11 in 2013. Average revenue per employee increased from $189.93 to $1504.46 (285). Titan transnational firms are getting bigger, richer, more powerful, and less accountable to citizens.

McChesney and Nichols say loudly and emphatically that the present trends of monopoly-finance capitalism point toward greater centralization, persistent underemployment and amplified precariousness of workers, increased inequality and poverty (105), and to the intensification of the antidemocratic supply-chains of the corporate-planning system.

The battle against the oligopolistic global capitalism is being fought worldwide. The frontline of that battle is the United States. McChesney and Nichols focus their attention on this frontline battle. US citizens and workers are losing spectacularly, and are massively outflanked.

McChesney and Nichols have a threefold purpose in People Get Ready: The Fight Against a Jobless Economy and a Citizenless Democracy. First, they demonstrate that monopoly-finance capitalism has contradictory tendencies that generate undesired excess capacity, joblessness and underemployment, inequality, and instability, all of which are both unsustainable and unjustifiable. Second, there is a severe democratic deficit whereby citizens and workers are left out of social decision-making and of the political process. Third, they aim to show that there is a long, glorious progressive democratic tradition in the history of the United States that can inform action today.

The primary thrust of the book concerns how US citizens are “overwhelmed by propaganda” from a corporate dominated media and “victimized by” various forms of voter suppression (115). A credible democratic process requires a political infrastructure that establishes rules (e.g., one person/one vote, free elections, transparency, etc.) and institutions (e.g., civic education, new party formation, limits on money, etc.) that empower the weakest in society to be effectively politically equal to the wealthiest members of society (28-9). Today in the US, there has been severe deterioration of democratic infrastructure (151-208).

There is a serious question whether the political system that supports US monopoly-finance capitalism today is democratic. McChesney and Nichols insist that if it is democratic, it is a “citizenless democracy” (115-50). The shriveled political culture of today has politicians making promises to all citizens during the election process, but only delivering policy to corporate interests. For example, Obama, when he was a presidential candidate, denounced free-trade deals during the campaign of 2008, but later supported them as President (136-7).

“Nothing says ‘shut up and give up’ quite so effectively as a candidate who” champions interests during the election, but explains that “he cannot possibly deliver on the promise” once he is in office (139). Consequently, voter turnout in the US is dismal. The US ranks 120th among countries of the world for turnout of eligible voters (148). The US political system is rigged in favor of corporate and money interests. Low taxes on corporate profits and capital gains, anti-labor policy, and global trade deals rule American politics. As one US Senator, Sherrod Brown of Ohio, recognized, “our trade deals amount to corporate handouts and worker sellouts” (134).

The US corporate news media helps sell the illusion that elections accurately represent the will of the people rather than the will of corporations. “What coverage remains of politics and elections tends to be superficial and spoon-feeds the public what elites are saying” and what corporations want said (23). “So much money flows into campaigns, and the lobbying that polices the governments that extend from those campaigns, that each new election cycle sets new records for campaign fund-raising and expenditures” (141). The US election and political process is best captured by former US Senator Russ Fiengold’s description of “legalized bribery” (140). “If you want to see what democracy looks like, put Washington DC in your rearview mirror” (170).

Compounding the democratic deficit is joblessness and precarious workers. The Great Recession has aggravated and highlighted the problem of sluggish growth and economists across the country speak of the emerging era of “long-term secular stagnation” (45; Despain 2015a).Hidden unemployment is currently near 10 percent (48) and labor participation has fallen significantly (55-6). Job growth has been has been slow (49) and significant numbers of high and middle-income jobs have been replaced by low income jobs (51, 65-6).

Technological change and automation has been causing a ‘jobocalypse’ (95). Rather than innovation increasing the job skill requirements of the US labor force, it has generated massive deskilling, as was predicted by Marx and documented by Harry Braverman (305 n.89, 310 n.163). Lord Robert Sidelsky warns: “Technological progress is now eating up the better jobs, too” (104). Mass unemployment, at best mass under-employment, is becoming an endemic characteristic of monopoly-finance capitalism (20-1).

Technological unemployment and oligopolistic joblessness is very bad news for a capitalistic economy. The system needs workers with decent incomes as consumers. Without consumers, capitalists do not have an incentive to reinvest. The loss of good jobs is necessarily shrinking the consumer base and is part of the contradictions generating secular stagnation (102). When Titan firms cannot “successfully sell at a profit all that [they] can produce”, it “leads to stagnation, underinvestment, unemployment, and never-ending demands for austerity” (109).

McChesney and Nichols contend that technological unemployment is not inevitable (206-7). Rather, it is how titan corporations use technology and innovation to control the workforce and augment profits in monopoly-finance capitalism (11-2), whereby joblessness become endemic (3-5, 21-6). They contend that there needs to be a fundamental re-thinking of the relationship between monopoly-finance capitalism and democracy on the one hand, and a reconstitution between employment opportunities and those offered by the monopoly-finance-capital-dominated technology on the other (24).

These twinned employment and democratic deficits are generated by the macroeconomic dynamic of monopoly-finance capitalism. However, the “solutions to the employment and economic crises” need to be understood as political (114). In fact, similar political solutions have been forthcoming throughout US history.

When American colonists suffered under the injustices of the mercantile system, Thomas Jefferson contended that such injustices might be “sufficiently” powerful to “hoop together” the colonists enduring those injustices (213-4). Likewise, E. P. Thompson documents in his celebrated The Making of the English Working Class that injustices generated mass mobilization and a Jeffersonian ‘hooping together’ of oppressed classes (216-20).

The gilded age from the 1870s to the 1910s hooped together various conservative, liberal and radical interests such that the massive monopoly capital that Lenin described in his Imperialism, the Highest Stage of Capitalism were put on the defensive. The financial and economic crises caused by monopoly capitalism were confronted with progressive policies in the 1910s and again in the 1930s.

The financial and economic crises caused by monopoly-finance capitalism today scream for a progressive response. McChesney and Nichols believe that the unsustainable circumstances of monopoly-finance capitalism, along with widespread insecurity, personal anxieties, worker precariousness, and ubiquitous suffering, has generated the conditions for a “transformational” moment that can be the basis for an economic and political revolution.

However, the revolution could be conservatively geared toward corporate fascism (34-42) and suppression of “excess democracy” (198-206) or towards an extension of working class democracy (245-76). In the United States the candidacy of Bernie Sanders represents the latter (241-2), while that of Donald Trump the former (note: the name Donald Trump is conspicuously not mentioned once in the book).

The movements in US politics regarding the “fight for fifteen” (i.e. for a minimum wage increase), health-care battles, the cooperative movements, efforts to nationalize the banks, environmentalist, student loan justice, civil rights and “black-lives-matter,” money-out-of-politics movements, campaign finance reform, and Ralph Nader-inspired anti-corporation sentiment, are the basis of the extension of democracy (234-40). “Education is where the major battle for the future is going on today” (251).

McChesney and Nichols do not have a pat agenda, but are rather more suggestive. They find inspiration in the “Four Freedoms” proposal (174-6) and in the “Economic Bill of Rights” both proposed by Franklin Roosevelt (176-183) which aimed to guarantee meaningful work and income, healthcare, education, housing, food, clothing, leisure activities, social security, and freedom from the private abuses of private monopolies (254). Today, one could add the green movement and the Economic Bill of Rights, which are remarkably topical.

WWII and then the Cold War politically undermined Roosevelt’s “Four Freedoms” and “Economic Bill of Rights.” The “Economic Bill of Rights” did play a major role in the “Universal Declaration of Human Rights” in 1948 (182), and was embraced by Martin Luther King Jr. and A. Philip Randolph in their drafting of the “Freedom Budget” in 1966 (187; Despain 2015b).

McChesney and Nichols propose that we democratize the constitution, democratize journalism, and limit the power, reach and scope of oligopolies. They contend that planning needs to be a larger part of how the economy is organized and that democracy needs to be extended to the workplace. These proposals are not necessarily offered as a playbook for policy, but for organizing our thinking toward a type of Blochian ‘not yet-ism.’ Capitalism Is No Alternative (CINA).

We remain in an employment crisis and a reoccurrence of the great financial crisis is likely. Political frustrations and civic cynicism are high. The illustration of the range of historically-inspired possibilities offered by McChesney and Nichols is important for any hope to limit the power of transnational titan oligopolies, to protect the environment, extend democracy, and improve the quality of life for everyone. People Get Ready!

6 June 2016

References

  • Despain, Hans G. 2015a Secular stagnation: Mainstream versus Marxian traditions Monthly Review vol. 67, no.4, pp.39–55.
  • Despain, Hans G. 2015b Review of 'The Freedom Budget for All Americans: Recapturing the Promise of the Civil Rights Movement in the Struggle for Economic Justice Today' by Michael D. Yates and Paul Le Blanc Marxism and Philosophy Review of Books July 3 https://marxandphilosophy.org.uk/reviewofbooks/reviews/2015/1898

2 comments

  1. Thank you for a very clear and instructive review, Professor.
    As usual, you have provoked some questions.
    The numbers that you quote on profit and income per employee over a 60 year span, give me some difficulty in understanding. I would appreciate some instruction.
    Firstly, the figures say that profit per employee increased 5-fold in 60 years. I find this difficult to follow. Suppose the intensity of labour doubled and suppose that the working time increased from 8 hours per day to 16 hours per day, on average. This would generate a 4 -fold increase in surplus. The extra bit to bring it to 5-fold, we may say is due to cheaper consumer products. But my suppositions seem rather extreme to me. So, I wonder whether we are seeing an “Apple” procedure here. I am referring to the Apple Corp of course, who very clearly, I think, are transferring surplus-value engendered in China or where ever, into profits ‘created’ in the USA or in Europe. In brief, does this 5-fold increase in profit per employee include remittances, tribute if you like, from poor countries?
    Secondly, my question is more technical, yet. The numbers seem to say that there has been a nearly 8-fold increase in revenue per employee. Apart from the question above, can we attribute this rather large increase to the fact that “revenue” here, presumably the average price of the commodities produced by the employees, includes the constant capital, which would be expected to increase substantially in 60 years?

    Thirdly, and quite unrelated, I would argue with the authors of the book about whether the North American Empire is democratic. I am not an American. From a great distance, I observe that the USA was founded on genocide and slavery, followed from the inception of the US by aggressive, expansionist imperialism. Many people are confused because they think of Empires like the Spanish, Portuguese or especially the English 17th and 18th Century Empires. But there is the example of the ancient Persian Empire, which in contrast to the Roman Empire, did not create a ‘territorial’ empire. The Persians allowed the locals to continue ruling and bribed them. But the ‘colonies’ had to pay annual tributes of gold, and other valuables; just like the current North American Empire.
    And finally, I will address the question of “Democracy” theoretically. Democracy is when the populace take the decisions either directly or indirectly through representatives. But, here we must look to current medical practice fro practical guidance. Doctors are required by law both in Europe and in the US to ensure that patients are “fully and truthfully” informed about all the possible benefits and especially the dangers of any clinical trial before they are recruited. Courts have ruled repeatedly that without INFORMED consent, the consent is valueless. When has capitalist ‘democracy’ ever provided truthfull information? Indeed, the question that needs to be addressed is whether capitalism can ever provide truthful and full information. IMHO, that has never been the case and capitalism cannot ever alter that. Capitalism is not democratic, never has been and never will be.

    I will end up by pointing out that the title chosen by the authors reveals their erudition. The phrase “Jobless Economy and a Citizenless Democracy” is a powerful oxymoron, appropriately and well-used. But some people, I have observed, have used the notion of a “jobless economy” or a “factory without workers” as a “Robinson Crusoe” example. Both “Robinson Crusoe” and “a factory without workers” are both fatuous nonsense.

  2. Sydney,
    Thanks for your comments.

    You bring forward some interesting observations. The exact source, as you suggest by the form of your question, of the increase in revenue and profit of Titan firms is not clear. For sure, some of the increase is technological change. In addition, there is certainly significant evidence that it has been in part from an increase in the rate of surplus value (i.e. an increase in exploitation). It is also in part from the asymmetric nature of contemporary supply chains. And further in part from the ability of Titan firms to set mark-up prices.

    The book “Imperialism in the Twenty-First Century” by John Smith, recently reviewed here on MPRB, attempts to get at exactly the points you make. The so-called value-added by Apple and other transnational firms, is less value-added and more monopoly pricing – from the wages and capital costs of subcontractor producing for the Transnational brand name (e.g. Foxconn for Apple) during the production phase, on the one hand, and on the other hand the ability to simply have a large mark-up on the sale price of the good during the realization phase (e.g. Apple markup on computers etc.). The key in both cases is the “degree of monopoly” power involved (to use Michal Kalecki’s excellent term).

    As to the undemocratic nature of capitalism, I fully agree. Although McChesney and Nichols are sensitive to the contradiction between the undemocratic nature of capitalist production, there is a tension here.

    Likewise, in Richard D. Wolff’s excellent book “Democracy at Work” (which I reviewed here on MPRB) the degree of which democracy can be extended in monopoly capitalism is greatly limited. The reason that I choose not to critique this tension in either book is that the paradox is not in the books of McChesney and Nichols, or Wolff, but the paradox is in capitalism itself. It seems to me that the initial phase of “post-capitalism” will necessarily have to confront this contradiction. First by attempting to overcome the contradiction of antidemocratic workplaces, and then by choosing between capitalism and democracy.

    McChesney and Nichols do say that Fascism is choosing capitalism over democracy, i.e. it is a promotion of capitalism and the suppression of democracy.

    I also agree with you that capitalism is founded, not only on exploitation, but violence and imperialism. As such, it has never been based on “Truth” and informative decision making. Quite the contrary, as revealed by advertising of oligopolies, oligopoly capitalism is based on propaganda, illusions, emotional manipulation. In the United States this is the very basis of our culture. Today our most popular sporting event is the Super Bowl (i.e. American football champion), 40 percent of viewers say they watch for the commercials. 80 percent say that the Super Bowl commercials are entertainment; only 16 percent say they wish the advertisers would forgo the multimillion dollars ads and pass the savings on to consumers.

    Again thanks for your comments.

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