Archive for the ‘Books’ Category

Martin J. Sklar on corporate liberalism

November 30, 2014

The giant business corporation is a type of institution which has made possible economic growth and creation of wealth on a scale never before seen in history.  It also is a concentration of economic and political power that is dangerous to a free and democratic nation.

One of the great issues of American public policy, for more than a century, has been how we the people can get the benefit of the corporate form of organization without allowing it to swallow up everything else in American life.

sklar.corporatereconstructionMarty Sklar, a college classmate of mine at the University of Wisconsin in the 1950s, went on to become a historian whose field of study was this issue.  I didn’t keep in touch with him after college, but I recently read magazine articles paying tribute to him as a historian on the occasion of his death.  I was intrigued enough to get a copy of his major book, which is out of print.

The Corporation Reconstruction of American Capitalism, written in 1988, is about the debate over corporate monopoly and anti-trust law in the era when corporations first came to dominate the U.S. economy.

It covers roughly the same period and issues as Altgeld’s America, but in a very different way.  Ray Ginger’s book is about the hurly-burly, corruption and violence of street-level politics and labor struggles in Chicago, while Sklar’s book is about high-level discussion of public policy.

American statesmen saw that corporate trusts and monopoly represented a dangerous concentration of power, which farmers, laborers and independent business owners could not withstand.  But at the same time, these same corporations increased economic efficiency and productivity and raised the American material standard of living to a level never before seen.

I remember Marty in his college student days as a strongly committed left-wing radical.  But in his book, he seems well-content with the workings of American capitalism and American statesmanship.


Altgeld’s America and the America of today

November 20, 2014

During the Progressive Era around the turn of the last century, the big issues facing the USA were much the same as those facing us today—corporate monopoly, the attack on organized labor, political corruption, the tariff and free trade, and military intervention and imperialism.

altgeldsamerica11009944I recently finished reading a book about that era—Altgeld’s America, 1892-1905: The Lincoln Ideal versus Changing Realities by Ray Ginger—in hope that it would give me a new perspective.

Americans in that era—at least in the North—regarded Abraham Lincoln as our national ideal.  Lincoln was born into a poor family and, without money or much formal education, because a successful lawyer, striving politician and eventually President of the United States, the highest office in the land.  But he never forgot or disavowed his origins  He always identified himself with the experience and the interests of the common people, never with the elite.

Within a couple of generations after Lincoln’s death, the USA had become something he would not have recognized.  Lincoln came of age in a nation dominated, at least in the North, by independent farmers, craftsmen and merchants, and by employers who knew all their employees by name.

The USA at the turn of the 20th century was dominated by large corporations and political machines in which the individual had little place.  For many, all that remained of the Lincoln ideal was the belief that someone of humble origins could rise to great wealth.

John Peter Altgeld

John Peter Altgeld

John Peter Altgeld, the governor of Illinois from 1893 to 1897, came as close to embodying the Lincoln ideal as anyone of that era could.

Ginger used his career as a thread to tie together the whole story of reform in Chicago in that era, involving, among others, the lawyer Clarence Darrow, the radical labor leader Eugene V. Debs, the social worker Jane Addams, the social critic Thorstein Veblen, the educator and philosopher John Dewey, the novelist Theodore Dreiser and the architect Frank Lloyd Wright—all of them free individuals who sought the public good in an age of large corporations organized for private profit.

All I had known about Altgeld prior to reading this book, aside from a poem by Vachel Lindsay, was that he opposed the use of federal troops to break the Pullman strike in Chicago, and that he sacrificed his political career to pardon the innocent but hated Haymarket anarchists, convicted of the killing of a policeman based on no evidence except their anarchist beliefs.

Actually, those two facts tell what’s essential to know—that Altgeld, like Lincoln, may have been ambitious, but he put justice ahead of ambition.


Paying the bill to stop climate change

October 28, 2014

This Moyers & Company broadcast was aired about a year ago.


Naomi Klein’s THIS CHANGES EVERYTHING: Capitalism vs The Climate has convinced me that, in order to maintain a habitable planet, it’s necessary to limit and maybe eliminate the burning of coal, oil and gas, and that energy companies will never do this unless they are forced to do so.

What I’m not convinced of is that it is possible to painlessly transition to some green utopia, in which everybody’s material standard of living is the same as it is now, except for a small group of plutocrats.

naomi-klein.book0coverMy house is heated with natural gas, and my gas bills lately have been low, due to an abundance of gas supplied by hydraulic fracturing (of which I disapprove).   My car runs on gasoline, and the computer on which I write this post is powered by electricity.

Over the years I’ve read books by Lester R. Brown, George Monbiot , and Al Gore making the case that with smart technology, I can heat my house with solar energy and better insulation, I can ride a streetcar that is almost as convenient as a private automobile, and that electricity can be provided by windmills, solar panels, other innovative sources of energy and a smart electrical grid that eliminates waste in the system.

I don’t have the knowledge to question their proposals on technical grounds.  I agree with Arthur C. Clarke—that the only way to test the limits of the possible is to venture a little way into the impossible.   And the alternative to trying is to accept the “long emergency” foretold by James Howard Kunstler.

But even at best, the transition will cost enormous sums of money.  Who would pay?  Naomi Klein says that rich people in rich countries should pay, especially countries that enjoy a high level of consumption based on fossil fuels.   This means first and foremost the USA.


Blockadia: the climate fight’s new front

October 25, 2014

The fight against global warming consists of many local struggles that, at first glance, don’t have anything to do with climate change.

These struggles include resistance to hydraulic fracturing for natural gas, to the Alberta tar sands industry and the Keystone XL pipeline, to deep ocean oil drilling and to other destructive practices by oil, gas and coal companies.

Such destructive practices are necessary to keep the fossil fuel companies in business because all the easy-to-get oil, gas and coal has been used up.  And greenhouse gas emissions will decrease only when oil and gas drilling and coal mining decrease.

naomi-klein.book0coverNaomi Klein in her book, THIS CHANGES EVERYTHING: Capitalism vs The Climate, reported on how these scattered local resistance movements are coming to realize they are part of a common cause.

In just one chapter, she touched on protests in Greece, Rumania, Canada’s New Brunswick, England’s Sussex, Inner Mongolia, Australia, Texas, France, Ecuador, Nigeria, West Virginia, South Dakota, North America’s Pacific Northwest and Quebec—all related directly or indirectly to stopping fossil fuel operations that would produce greenhouse gasses.

She and others call this alliance “Blockadia”.   Unlike some of the big, established environmental organizations, the grass-roots protesters do not limit themselves to lawsuits and political lobbying.  They engage in nonviolent direct action, the kind of mass defiance that Gene Sharp advocated.   These movements, more than the lobbying and lawsuits of the Big Green environmental organizations, will determine the future climate, she wrote.


A liveable climate and its enemies

October 23, 2014

Here are links, with transcripts, to the complete Sept. 18, 2014 interview.

Naomi Klein on the Need for a New Economic Model to Address Ecological Crisis.

Naomi Klein on the People’s Climate March and the Global Grassroots Movement Fighting Fossil Fuels.

Naomi Klein on Motherhood, Geoengineering, Climate Debt and the Fossil Fuel Divestment Movement.


Naomi Klein thinks that, if governments had taken action in the 1990s to curb greenhouse gas emissions to control climate change, it could have been accomplished without drastic upheavals in society or in people’s lives..

Unfortunately another movement arose at the same time, a movement to remove restrictions on corporate activity, and this movement has proved more powerful than the climate movement.   The corporate movement has produced privatization, deregulation, repeal of anti-trust laws and a strong and enforceable body of international law to block environmental regulation and subsidies of renewal energy.

naomi-klein.book0coverThe first chapter of Klein’s new book, THIS CHANGES EVERYTHING: Capitalism vs the Climate, is about how the real objection of climate change deniers is their realization that climate change, if real, would mean an end to free enterprise as they know it.  She said they’re right.

Our economy is based on what Klein calls extractivism—the idea that there can be unlimited economic growth based on the burning of a limited amount of coal, oil and gas.

This is a process that will someday end in and of itself, when it is no longer feasible to dig out what little fossil fuels remain.  We the people can’t afford to wait until that happens, because emissions from burning fossil fuels will have heated up the planet to the point where it is barely liveable.  But moving away from extractivism is easier said than done.

An end to extractivism would require, first of all, the repeal of international trade treaties such as NAFTA and the World Trade Organization treaty that allow corporations to challenge national laws that favor local industry or interfere with the international movement of goods and services.


Naomi Klein’s new climate change book

October 22, 2014

Naomi KleinWe know that we are trapped within an economic system that has it backwards; it behaves as if there is no end to what is actually finite (clean water, fossil fuels and the atmospheric space to absorb their emissions) while insisting there are strict and immovable limits to what is actually quite flexible: the financial resources that human institutions manufacture, and that, if imagined differently, could build the kind of caring society that we need.

==Naomi Klein, This Changes Everything


Naomi Klein’s brilliant new book, THIS CHANGES EVERYTHING: Capitalism vs the Climate, underlines two important things I had not quite realized.

The first is that the built-in financial incentives of the fossil fuel corporations, or capitalism generally, make it impossible for corporate executives to do anything on their own that would limit the greenhouse gasses that cause climate change.

The second is that many seemingly unrelated struggles against abuses by fossil fuel companies, or abuses by corporations generally, tie in with fighting climate change.

hoax-cop15When native Americans fight to have Indian treaties recognized in law, when small towns in upstate New York pass ordinances against hydraulic fracturing for natural gas, when ranchers and Indians protest the Keystone XL pipeline, when other protestors object to corporate trade treaties such as NAFTA, when Occupy Wall Street protesters advocate economic democracy—all these things help other people in danger from the increase in droughts, floods and violent storms.

I confess that I did not see these connections, or did not fully realize their significance, until I read this book.  I had thought of the question of climate change as primarily a question of how and how much I and other people are willing to reduce their material standard of living, or give up hope of increasing their material standard of living, so that future generations will have a decent planet to live on.

This is a real and important question, but it is not the only question.  As Naomi Klein points out, the well-being livelihoods of many people are threatened by continuing on the present course.   That is because the era of easily-available oil, gas and coal is long gone, and the methods of extracting them—deep water ocean drilling, tar sands, fracking, mountaintop removal—are increasingly costly, dangerous and destructive.


The powerful and precarious rise of China

September 26, 2014

The rise of China is one of the most important historical events, maybe the most important, of our time.

Jonathan Fenby, an experienced reporter and former editor of the South China Morning Post, gave a good account of China’s rise in his 2012 book, TIGER HEAD, SNAKE TAILS: China Today, How It Got There and Where It is Heading.

I finished reading Fenby’s book a week or so ago.  It reminded me of histories of the United States in the late 19th century, the era of the so-called robber barons.

Like the USA then, China has sweatshops, child labor, pollution, slums, suppression of minorities and rampant bribery and corruption.  But also like the USA then, China is full of energy and optimism, growing in wealth and power, and a land of opportunity for its entrepreneurs.

fenby.tiger.headWhen I was a boy, most Americans thought China was eternally doomed to upheavals, poverty and famine.

From the Opium Wars to the death of Mao Zedong, that was China’s fate.  But during the past 40 years, the Chinese leaders have made their country one of the world’s great economic powers, brought population growth under control and provided a basic subsistence to all and prosperity to many.

From 1978 to 2012, China’s economy grew 17-fold.  China’s economy is the second-largest in the world, although still far smaller than the United States.  It has a positive balance of trade.   It is the largest trading partner of Australia, the largest trading partner of Africa and a growing presence in Latin America.

Chinese companies compete and expand worldwide, while China’s own territory attracts industry from the USA, Europe and Japan.

The Chinese challenge, however, is much different from the Japanese challenge of the 1980s.  The Japanese challenge was that Japanese companies made products of a higher quality than U.S.-based companies.  This resulted in a competition for quality that was good for both the United States and Japan.

This is a different from the Chinese challenge of making products more cheaply than U.S.-based companies.  This results in a race to the bottom which is bad for most countries.

While many Chinese companies make world-class products, others cut corners.  Chinese companies are noted for cheap imitations of foreign brand name products.  Violation of copyright and theft of patents are common.  Fenby reported that 80 percent of counterfeit goods seized in the USA and Europe originate in China.


Afghans unaware U.S. invasion sparked by 9/11

September 15, 2014

When the United States invaded Afghanistan, I thought that at least the invasion would be an object lesson to any government who thought of harboring terrorists who attacked the United States.

But Ted Rall, a writer and cartoonist who has visited and toured Afghanistan twice without protection of the U.S. military, said no such lesson was ever learned.   In an interview with Salon about his new book, After We Kill You, We Will Welcome You Back as Honored Guests: Unembedded in Afghanistan, Rall said this:

I’ve never met a single Afghan who had any understanding of the relationship between 9/11 and the U.S. presence in Afghanistan. 

In fact, I’ve never met a single Afghan who even understood what happened on 9/11, understood the scale of it.

SONY DSCI was repeatedly having to explain it to people, having to explain these buildings and how big they were and how many people were in them and how it affected the American psyche and so on.

Whenever you asked [Afghans], regardless of their age or their politics or their tribal affiliation, they’d all say the same thing: The only reason the U.S. was in Afghanistan was because the U.S. was the dominant superpower in the world; and from their point of view, whoever is the dominant superpower in the world at any given time invades Afghanistan.

So we’re just there because we could — they all think that.

If Americans think Afghans understand that whatever suffering they’re going through is somehow tied to 9/11, no; they should be disabused of that, because Afghans just don’t think that.  That’s just universally true.

They think we’re there because we hate Islam or because we want to steal Afghanistan’s natural resources or because it’s strategically important or “I don’t know, but they’re here, and I just have to deal with them!”

… … They always call us “the foreigners,” which just refers to the inevitable foreign presence that’s always there, whether it’s Soviet advisers in the 1960s and ’70s or the Red Army in the ’80s or whatever it is.

“There’s always foreigners here. We’re a weak country. We can’t defend our borders.  The foreigners come and go; we shoot a lot of them, and then they leave.”

Black humor is absolutely a huge survival tool for people who live in stressful circumstances — and Afghans are very, very funny people.

via Ted Rall’s “uncomfortable truths” –


Matt Taibbi on impunity for rich criminals

August 11, 2014

I can tell you, just from forty thousand feet, that some of the most damaging behavior on Wall Street, some of the least ethical behavior on Wall Street, wasn’t illegal.  That’s exactly why we have to change the laws.
        ==President Barack Obama, in 2011

Financial crimes are not victimless crimes.   Subprime mortgage fraud affected the financial solvency of thousands of municipalities and pension funds.   Many an American is paying higher taxes or facing retirement without a pension because of criminal activity on Wall Street.

Fraud is not necessarily something that is subtle or mysterious.   When someone misrepresents the value of what they sell, when they falsify financial documents, when they pledge the same collateral to several different lenders, you don’t need a law degree to understand that this is a crime.

Matt Taibbi

Matt Taibbi

Matt Taibbi, in his new book, The Divide, has a chapter about how all these things were done by Lehman Brothers, yet nobody in Lehman has ever been prosecuted.

Why don’t we prosecute financial crime?  Part of the reason is social.  Crooked Wall Street bankers come from the same social class as judges.

It is hard for judges to imagine people who might be their friends and neighbors as criminals, or to throw them into prison with violent common criminals.  But there are other, systemic reasons as well.

One is the doctrine of “collateral consequences,” first promulagated in a memo by Eric Holder, while a low-level Justice Department in the Clinton administration.  It is the principle that when deciding whether to prosecute corporations, you should take into consideration the side effects on innocent employees and the economy as a whole.

As an example, the accounting firm of Arthur Anderson Inc. was charged criminally by the Bush administration for helping Enron falsify its books.   Immediately afterward the company collapsed, and 28,000 jobs people, most of whom had done nothing wrong, were thrown out work.  That was sad, but the blame rests not with prosecutors, but with the dishonest Anderson management.

monopoly16The solution to such cases, it seems to Taibbi and also to me, is to prosecute individuals and not the corporation.  Justice would be served, the corporation itself would continue to exist and innocent individuals would not suffer.   Anyhow if a company really is too big to prosecute without damage to the economy as a whole, that is a reason to enforce the anti-trust laws and break it up.

Attorney-General Eric Holder and other members of the Obama administration don’t do this.  They content themselves with levying billion-dollar fines, which seem large to people like me and probably you, but are really small in relation to the overall size of the companies.  Prison is the real deterrent, and nobody in the “criminal rich class” (Theodore Roosevelt’s words) goes to prison anymore.

Another deterrent to prosecution, Taibbi says, is the fact that the largest companies have the best legal talent, and it is possible to have a good case and still lose by making some minor mistake.  The Obama administration is highly risk-averse and concentrates on cases they are sure they can win, which cases against smaller companies.  This is an explicit policy.  Taibbi quotes a Justice Department memo to this effect.

The problem is not only that rich criminals go free.  It is that honest bankers and financiers are penalized.  In a well-ordered capitalist system, the purpose of banking and finance is to turn savings into capital, to be invested in ways that contribute to the wealth and well-being of individuals and society as a whole.

Instead of rescuing banks and investment firms from the follies and crimes of their managers, the  government should indict criminals for their crimes, liquidate failed companies instead of bailing them out, and sell their assets at bargain rates to firms with honest and competent management.


But, as Taibbi wrote, the problem is not just leniency for high-level crime.  It is the contrast between the administration of justice to people at the top of society and those at the bottom.   This will be the subject of my next post.


Above the law and below it in the USA

August 11, 2014

To no one will we sell, to no one deny or delay right or justice.
==The Magna Carta

The basic principle of a free society is the rule of law.  That is the principle that laws are the same for everybody.   Nobody, however rich or powerful, is above obedience to the law.  Nobody, however poor or humble is below protection of the law.

The.Divide.Matt.TaibbiI recently finished reading a new book, THE DIVIDE: American Injustice in the Age of the Wealth Gap by Matt Taibbi which shows how far the United States has gotten from that ideal.  There is a class of powerful rich people who can commit financial crimes with impunity, and there are classes of people—poor young black men in big cities, unauthorized immigrants, welfare recipients—for whom due process of law does not exist.

Taibbi is a smart and fearless investigator, a brilliant and readable writer and, above all, a great explainer.   His specialty has been reporting on finance for Rolling Stone magazine.  In this book he combines accounts of high-level crime and low-level injustice, and the combination will make any normal person’s blood boil.

In New York City, under the stop-and-frisk policy, police stop young black men and ask them to turn out their pockets, ostensibly in search of illegal handguns [1].  It is legal to have a small amount of marijuana in your pocket provided you aren’t trying to sell it.  But the minute you take it out of your pocket, you are in violation.  Thousands of harmless people are charged in this way every year.

Taibbi told the story of a hardworking, law-abiding black man who was arrested for “obstructing pedestrian traffic” by standing in the doorway of his own apartment building at 1 o’clock in the morning when nobody else was on the street.

It wasn’t the first time this particular person was arrested for virtually nothing.  He in fact had a hard time figuring out what to do in order not to be arrested.  But in this case, he decided to fight the case.  What’s striking is how nobody involved in the process—prosecutor, public defender, judge—could get their minds around the idea that somebody would plead “not guilty” simply because they were, in fact, not guilty.

They were all annoyed with the defendant, not with the police officer who’d made a false charge.

The attitude of judges was exactly the opposite in the case of real criminals—a cabal of financial speculators who conspired to destroy a company, by means not only of spreading false information, but harassing the company officers and clients on the telephone and even, in one case, actually committing burglary, in order to make money by short sales of the company’s stock (essentially a bet the company’s stock price would fall.)

But when the victims brought a lawsuit, the judge dismissed the case, on the grounds that it was brought in New Jersey and not in New York.

Taibbi told the story of a law-abiding young musician who stopped on the street to roll some tobacco into a cigarette, and was, without warning, assaulted by strangers in leather jackets.  He thought he was being mugged until he was handcuffed and thrown in jail with a lot of desperate characters.

He found he had been charged with a drug offense, later reduced to a tampering-with-evidence offense.  Presumably the police thought he was smoking marijuana, and were doubly suspicious because he was white in a predominantly-black neighbor.   These may have been reasonable grounds for suspicion, but the point is that they didn’t bother to stop and see if their suspicions had any basis.

In contrast, HSBC, the large international bank, ran a money-laundering operation for the Mexican drug cartels.  The bank even had special windows in some of their branches for processing of large amounts of cash.   They served the interest of some of the world’s most brutal and murderous criminals, known for dismembering victims with chain saws.   But HSBC was let off with a fine, which was less than the profit earned from criminal activities.  Unlike with the musician, nobody spent any time in jail.

 Taibbi’s book is full of stories like this, true stories that make my blood boil, stories about a justice system that is harsh and merciless to harmless poor poor people, while granting every consideration to what Theodore Roosevelt called “the criminal rich class.”

Click on TruthOut to read an excerpt from Matt Taibbi’s The Divide.

Click on Democracy Now for an interview with Matt Taibbi.

[1]  This is an aspect of gun control that liberals should think about.

Matt Taibbi’s The Divide is the newest addition to my Books I Recommend page, which is a short list of readable books that provide a good understanding of current issues.

[Added 8/28/14]

Here are some of my other posts on Matt Taibbi’s The Divide

Matt Taibbi on impunity for rich criminals

The incentives to ignore due process of law

A predatory business model based on lawbreaking


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