# Capitalism

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## Can We Trust Monopolies to Play Fair?

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Photo credit: CaseyMartin / Shutterstock.com For the anti-monopoly movement, the past three months have been exciting but sobering. In late...

## I Read it in the Post

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Democrats have hammered home that putting Barrett on the court at this moment is an extraordinary power grab, and voters seem to agree. Turning attention away from the hearings would be useful for the Republicans when voters are on their way to the polls. Continue reading

The post I Read it in the <i>Post</i> appeared first on BillMoyers.com.

## A continent that burns. And a world that’s getting hotter. Welcome to the Pyrocene.

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Last summer’s catastrophic bushfires burnt more than 18.6 million hectares, destroyed over 5900 buildings (including 2779 homes) and killed at least thirty-four people. Fires started in Queensland in August, and large areas of land that normally ‘don’t burn’—like subtropical and cool temperate rainforest—went up in flames. Towns burnt to the ground, and huge internal displacement during the busy summer tourist season along the east coast saw direct economic costs likely to exceed the record $4.4 billion set by 2009’s Black Saturday blazes. Furthermore, an estimated three billion animals were killed and the ecological consequences are mind-boggling. To give a few examples from Victoria: 31 per cent of the state’s rainforests were burnt, as well as 24 per cent of wet or damp forests, and 34 per cent of lowland forests. All of the potential habitat of the East Gippsland galaxia (a small native fish) and more than 40 per cent of the Victorian habitats of the sooty owl, diamond python, long-footed potoroo, long-nosed bandicoot and brush-tailed rock wallaby were wiped out. It was a disaster that will be hard to forget. Fire has been an intrinsic part of our land for millions of years, and many hundreds of generations of traditional owners have used it as a land-management tool. But invasion and colonisation disrupted this long custodianship, and now settler society is trying to understand how fire should be used to manage the landscape so that it is a positive force for biodiversity, human safety and agricultural production. Following last summer’s fires there has been huge renewed interest in cultural burning, and a growing profile of Indigenous-led fire approaches, such as the Firesticks Alliance. But on top of this, we have the increasingly obvious hand of climate change. The world has heated as a result of human activity and now all fire events occur in a warmer environment. This is well documented. We have known it for years. Back in 2008 the Garnaut Climate Change Review’s final report said that predictions ‘suggest that fire seasons will start earlier, end slightly later, and generally be more intense’ and that ‘this effect increases over time, but should be directly observable by 2020’. More recently, the Emergency Leaders for Climate Action noted that: Australia’s Black Summer fires over 2019 and 2020 were unprecedented in scale and levels of destruction. Fuelled by climate change, the hottest and driest year ever recorded resulted in fires that burned through land two-and-a-half times the size of Tasmania. While unprecedented, this tragedy was not unforeseen, nor unexpected. There have been a range of government investigations into the fires, all of which have documented the impacts of climate change. The bushfire Royal Commission was explicitly asked to look at mitigation options, but not drivers of global heating. In spite of this, it found that further warming of the Australian climate over the next twenty years ‘appears to be inevitable’, meaning that catastrophic bushfire conditions will become more common. The NSW Bushfire Inquiry found that ‘climate change as a result of increased greenhouse gas emissions clearly played a role in the conditions that led up to the fires and in the unrelenting conditions that supported the fires to spread’. In Victoria, the Inspector-General for Emergency Management (IGEM) said ‘the incidence of large, severe and recurrent bushfire events in Victoria has increased exponentially over recent decades and shows no sign of slowing’. The IGEM elaborates on this, saying: The past is no longer a reliable guide to the influence of climate and weather upon bushfires into the future. Climate change is influencing the patterns of natural hazards globally. In Australia, increases in temperature and changes in rainfall patterns are contributing to an increase in extreme fire weather across much of the country. In south-east Australia there have been long-term decreases in rainfall. The bushfire season in the 21st century begins earlier and ends later. So why is this fact ignored by so many media outlets and commentators? Because of the politics of ‘business as usual’ and the culture war. Climate deniers are unable to accept material reality, and are trying to deflect the public debate into a ‘blame’ frame that lets the fossil-fuel companies and their backers in government off the hook. It also plays on people’s natural fear of wildfire to try to wedge the community away from environmental voices into a grossly simplified world view that sees fuel-reduction burning as the solution to bad fires. While the fires were raging, much of the conservative media ran the false claim that arson caused the fires. For instance, in January The Australian ran a story entitled, ‘Firebugs fuelling crisis as arson arrest toll hits 183’. In this, the mainstream media was playing into a right-wing extremist conspiracy pushed online by bots and trolls and enabled by the big tech companies. As noted in the Sydney Morning Herald, ‘Australia’s bushfire crisis—like other crises, including the burning of the Amazon rainforest in 2019—has been sucked into multiple overlapping fringe right-wing and conspiracy narratives, which are generating and amplifying disinformation in support of their own political and ideological positions’. However, as the NSW Bushfire Inquiry noted, arson was not a key factor in the catastrophic NSW bushfire season. The IGEM inquiry found that ‘almost every significant fire in Victoria during the 2019–20 season was as a result of lightning strike’. The next argument from the conservatives and climate deniers was that ‘greenies’ had stopped fuel-reduction burning and so were to blame for the scale of the fires. Once again, this simply isn’t true (apart from anything else, states set fuel-reduction targets, and the ALP and LNP, not the Greens or environmentalists, control all state and territory governments in the country). And, as noted in the IGEM report, ‘fuel reduction burning is not a simple panacea’. What do we need to do? The denialists will continue their campaigns, and once fires start this season we will see a continuation of the disinformation campaigns that have been prevalent in the northern hemisphere during their summer (such as the false claims that ‘antifa activists’ were deliberately lighting fires in Oregon). But in the real world, the fires will continue to grow, and we need to respond to this reality. Fire seasons will become longer and more intense, which has huge implications for ecosystems. For example, it is estimated that more than 90 per cent of snow-gum woodlands in Victoria have burnt in the past twenty years—multiple times in some areas. Up to 10,000 hectares of alpine ash forest face ‘ecological collapse’ in Victoria because of repeated fires. An extended fire season also has implications for our ability to fight fires. Currently, resources—people, trucks and planes—are shared between states and territories, and between countries. While we have a fleet of several hundred planes and helicopters to fight fires, many of these are leased through the international market. As California and Oregon suffer through a dreadful fire season, and as the fire season has already arrived in Queensland, there is overlapping, and thus greater, demand on planes. This will drive up the cost of fighting fires. If there are huge fires across large areas, as happened last summer, we simply won’t have enough crews and trucks to go around. In Victoria, the fires’ economic impact on tourism is estimated to have been between$330 million and $350 million in the first half of 2020. The cost of fighting the fires in that state is estimated at$1.5 billion, and by 2025 it is estimated to be around $2 billion. By 2055, modelling indicates that it might be almost$5 billion.

Then there is the fact that we don’t have enough firefighters. Australia has suffered a 10 per cent decline in the number of volunteer firefighters over the last decade. While the volunteer workforce has shrunk, the number of professionals has grown, which is good, but it clearly isn’t enough to offset the loss of volunteers.

The forecast from the Bushfire and Natural Disaster CRC is for a ‘normal’ fire season this summer. This gives us time to be fully prepared for future seasons that may be more intense. Here are some ideas:

• Seriously engage with, and resource, traditional owners in relation to cultural burning. We need local knowledge to suit local ecosystems. The Victorian Traditional Owners Cultural Fire Strategy outlines six core principles  that underpin cultural burning practices in the state. State governments should continue to develop cultural burning programs with traditional owner groups. Groups that are already engaged in cultural burning programs, such as the Dja Dja Wurrung in Central Victoria, could be resourced to share knowledge with other traditional owner groups. Settler culture in Australia largely lives in denial of First Nations. Unlike in places such as Aotearoa/New Zealand, there are no treaties with First Nations peoples here. We have built economies that are deeply out of step with the reality of living on an old, dry and fire-prone continent. Without a treaty, we are living on stolen land. As climate change drives ever-worse fire seasons, I hope that we finally seize the opportunity to resolve the unfinished business that has flowed from invasion and colonisation. Our long-term survival on the continent depends on it.
• The fires of 2019–20 showed that, in a bad year, we just don’t have enough air capacity to fight wildfire. Before this summer starts, we need a deeper commitment from the federal government for firefighting. The Bushfire Royal Commission suggests that we invest in a ‘modest, Australian-based sovereign [very large aerial tanker/large aerial tanker] capability’, as the climate emergency means that northern- and southern-hemisphere fire seasons are running together.
• Include local knowledge in fire and fuel management. Around the country, land-care and local environmental groups act as custodians. Their knowledge should be invited into land management when it comes to fire. One proposal is to create local volunteer GreenFire groups to work with land managers on fuel reduction and fuel-load management, which might also involve the use of non-fire techniques and allow for maximum ecological benefits of land-management programs. Involving volunteer community groups will ensure that local ecological knowledge informs how and where burning programs occur. These groups may also seek direction and guidance from local traditional owner groups skilled in cultural burning and other land-use techniques.
• Victoria needs a new volunteer remote area firefighting team, as New South Wales and Tasmania already have, and the federal government needs to create a national remote-area firefighting team to help protect national parks and World Heritage Areas.
• We should be opening up volunteer opportunities for people based in large cities to get involved in firefighting efforts. Setting up urban brigades who can be deployed over summer would greatly add to the ‘surge capacity’ that is needed in a bad fire season.

And, of course, we must play our part and do everything possible to reduce Australia’s contribution to global warming. Reducing emissions won’t impact what happens next summer, but it is an investment in our collective future, as it is clear that more greenhouse pollution equals worse fire seasons in years to come.

The Australia Institute is proposing a National Climate Disaster Fund, funded by a levy of $1 per tonne of all coal, gas and oil produced in Australia, to help pay for some of the increasing costs of these climate disasters, fuelled in large part by these very industries. This would require confronting the powerful grip that fossil-fuel companies have on our democracy. A$1 levy on fossil-fuel production in Australia would currently raise around $1.5 billion a year. While the institute suggests that the money could be allocated to sectors and communities that are affected by climate change, such as First Nations and farmers, some of it could also be allocated to firefighting capacity, including planes. We are clearly in a rapidly deepening climate crisis and we must respond at emergency speed to reduce climate pollution. Furthermore, we must hardwire justice and human rights into our response to the crisis. We must simultaneously: • mitigate impact by drastically reducing emissions and changing land-management practices • build resilience in communities to respond to emergencies such as fires • build our capacity to fight fire • plan for long-term habitation in Australia. At present, many of our land-use practices are based on exploitative and short-term thinking—for instance, continued land clearing, farming practices that destroy topsoil and rely on dangerous chemicals, over-extraction of water from rivers and groundwater, and low-density sprawl that destroys remnant vegetation and farmland. Our economy is still based on a ‘quarry’ approach of exporting vast volumes of raw materials while actively pursuing economic policy that has seen the destruction of our manufacturing sector. Our cities and urban areas are poorly prepared for the realities of living on what is already the driest inhabited continent in a time of climate change. The COVID-19 pandemic has highlighted the problems of our economy: growing social exclusion and inequality, and the failure of the neoliberal model. Ultimately, we need a transformation of our political and economic structure. Late-modern capitalism is simply not up to the task. ### WILL THE FIRES CHANGE EVERYTHING? Alison Caddick, Mar 2020 We are passing into an elemental moment, but do we have the language for grasping this? ## ‘Rentier Capitalism’: A conversation with Brett Christophers – 8th December Published by Anonymous (not verified) on Sun, 11/10/2020 - 4:58pm in ### Tags Rentier Capitalism Brett Christophers in conversation with Will Davies ### 3-4pm, 8th December How have economies such as Britain’s become so unequal? As Brett Christophers shows in his new book, Rentier Capitalism, a fundamental driver is the rise of rent-seeking, in which ownership of key types of scarce assets – land, intellectual property, natural resources, digital platforms – is dominated by a few unfathomably wealthy companies and individuals. Profits grow increasingly linked to having rather than doing. With profound lessons for other countries subject to rentier dominance, Christophers’ examination of the UK case is indispensable to those wanting not just to understand this insidious economic phenomenon but to overcome it. Christophers will join us on Zoom to discuss rentier capitalism with PERC Director, Will Davies. To join, please register via Eventbrite here. ## The War Hawks Come Home To Roost Published by Anonymous (not verified) on Fri, 09/10/2020 - 2:01pm in ### Tags In 1960, the writer Albert Camus said: "The welfare of the people in particular has always been the alibi of tyrants." Both statements are correct and interwoven. So when will we finally see through the spin to ensure there's no more war? Author, Dan Kovalik met up with host Ross Ashcroft to discuss. The post The War Hawks Come Home To Roost appeared first on Renegade Inc. ## The War Hawks Come Home To Roost Published by Anonymous (not verified) on Fri, 09/10/2020 - 2:01pm in ### Tags In 1960, the writer Albert Camus said: "The welfare of the people in particular has always been the alibi of tyrants." Both statements are correct and interwoven. So when will we finally see through the spin to ensure there's no more war? Author, Dan Kovalik met up with host Ross Ashcroft to discuss. The post The War Hawks Come Home To Roost appeared first on Renegade Inc. ## Desperate BoJob Repeats the Tories’ Broken Promises Published by Anonymous (not verified) on Wed, 07/10/2020 - 6:48am in ### Tags The signs are definitely increasing that Boris may be on his way out. His personal popularity has plunged to the point where a poll of Tory party members has rated him the second most unsatisfactory member of the cabinet. A poll a few weeks ago found that he was less popular than Keir Starmer, the duplicitous leader of the Labour party, who seems far keener on finding reasons to purge the party of genuine socialists and supporters of Jeremy Corbyn than opposing the Conservatives. Rishi Sunak, the current Chancellor of the Exchequer, according to a similar poll a few weeks or so ago is actually far more popular. Zelo Street has published a series of articles speculating that as Boris shows himself to be ever more clueless and incompetent, the Tories and the press are starting to consider his removal and replacement. The Murdoch press has published a series of articles criticising him, while the Heil joined in to give him the same treatment they dished out to Corbyn and Ed Miliband. The rag published an article about Tom Bower’s latest book, which happens to be a biography of BoJob’s father, Stanley. This claims that he once hit BoJob’s mother so hard that he sent her to hospital with a broken nose. Bower’s last book was a biography of former Labour leader Jeremy Corbyn, which cast various aspersions on him. Of course, the Mail has more than a little previous when it comes to attacking politicians through their fathers. It published a nasty little piece a few years ago smearing Ed Miliband’s father, Ralph, as ‘the man who hated Britain’ when Miliband junior was leader of the Labour party. Ralph Miliband was a Marxist intellectual and I think he was Jewish Belgian, who immigrated to this country. He despised the British class system and its elite public schools, but nevertheless joined the army to defend his new homeland during World War II. Which is far more than could be said for the father of the Heil’s former editor, Paul Dacre, who spent the war well away from the front line as the paper’s showbiz correspondent. Reading between the lines of an interview one of the Tory rags published with Michael Gove, Zelo Street suggested that Boris’ former ally was possibly being considered as his successor. But if Johnson does go, it’ll have to be through a coup like that which ousted Thatcher. Former speaker of the House of Commons John Bercow is undoubtedly right: no matter how unpopular Johnson becomes, he won’t leave voluntarily because he’s unaccountable. So with things looking ominous and the vultures circling, Johnson today gave an upbeat speech in which he promised to build 40 new hospitals, more houses and increase the amount of power generated from green and renewable sources. Mike in his piece about Johnson’s falling popularity includes a Tweet from ‘Russ’, who helpfully points out that Johnson also made the same promise to build 40 hospitals a year ago. And hasn’t done it. He’s allocated £3 billion for their construction, although the real cost of building them is £27 billion. As for his promise to have a greater proportion of this country’s power generated by renewables, like more wind tunnels out in the Severn, we’ve also heard this before. Remember how dodgy Dave Cameron told the British voting public that his would be the greenest government ever and stuck a little windmill on the roof of his house? That lasted just as long as it took for Cameron to get both feet into No. 10. As soon as he was over the threshold he very definitely went back on his promise, giving his support to fracking while the windmill disappeared. Johnson’s promise is no different. It’s another lie from the party of lies and broken electoral promises. Like when Tweezer told everyone she wanted to put workers in company boardrooms. It’s like the Tories’ promises on racism and racial inequalities. After the Black Lives Matter protests, Johnson promised to set up an inquiry into it. Just like Tweezer did before him. All lies, empty lies that the Tories never had any intention of honouring. And then there was his promise to build more houses. This was fairly bog-standard Thatcherite stuff. Johnson declared that he was going to build more houses so that more people would be able to own their own homes. But this wouldn’t be done by the state. He would do it by empowering people, who would be able to paint their own front doors. Eh? This seems to make no sense at all. It does, however, repeat some of the points of Thatcher’s rhetoric about homeownership from the 1980s. Thatcher aimed at making Britain a home-owning nation of capitalists. She did by selling off the council houses and passing legislation forbidding councils from building new ones. This was supposed to allow everyone, or at least more people, to own their own homes. Many council tenants did indeed buy their homes, but others had them bought by private landlords. A few years ago Private Eye published a series of articles about the plight of these former council tenants, whose new landlords were now raising the rents to levels they couldn’t afford, or evicting them in order to develop the properties into more expensive homes aimed at the more affluent. And one of the reasons behind the present housing crisis is the fact that many properties are simply too expensive for people to afford. This includes the so-called ‘affordable housing’. This is set at 80 per cent of the market value of similar houses, whose price may be so high that even at this reduced price the affordable houses may be well beyond people’s ability to purchase. Thatcher’s housing policy needs to be overturned. Not only do more houses need to be built, but more genuinely affordable properties and council houses for those, who can only rent. Johnson isn’t going to do any of that. He just repeated the usual Thatcherite rhetoric about people owning their own homes and empowering them against the state. Just as Thatcher said that there was no society, only people and the Tories talked about rolling back the frontiers of the state. It’s just another set of empty promises. In the clip I saw on the news, Johnson didn’t say how many he’d build, nor who would build them if the state wasn’t. Like the promises to build the hospitals and increase green energy, it’s another promise he doesn’t even remotely mean to keep. Just like all the others the Tories have made. https://zelo-street.blogspot.com/2020/10/bozo-gets-miliband-corbyn-treatment.html https://zelo-street.blogspot.com/2020/09/murdoch-abandons-bozo.html ## How the History of Class Struggle is Written on the Stock Market Published by Anonymous (not verified) on Tue, 06/10/2020 - 3:27am in ### Tags It was a Thursday in August when all hell broke loose. The place was Logan County, West Virginia. The year was 1921. Over the next week, one million rounds of ammunition would be fired. Up to a hundred people were killed. All told, it was the largest armed uprising since the American Civil War. Yet you’ve probably never heard of it. That’s because the battle was a labor dispute. It was called the Battle of Blair Mountain. On one side were some 10,000 coal miners fighting to unionize West Virginian coal mines. On the other side was Sheriff Don Chafin, who commanded a private army backed by mine owners. The battle resembled modern warfare. Chafin hired private planes to drop poison gas and explosive bombs left over from World War I. Army bombers patrolled the skies. The fighting ended when Federal troops arrived and the miners fled. In the aftermath, the West Virginian government indicted 985 miners for murder and treason. None of the anti-union militia (to my knowledge) were indicted. ✹ ✹ ✹ The Battle of Blair Mountain is part of a larger history of class struggle in the United States. It’s a history that has largely been forgotten.1 In this post, I’ll jog our collective memories. True, many histories of working-class struggles have already been written. Howard Zinn’s A People’s History of the United States remains the classic.2 As I tell the story of US class struggle, I’ll be honest. I lack Zinn’s grasp of history. And I’m not blessed with his story-telling talent. I do, however, have one thing on my side — a bold new idea. I’m going argue that the history of US class struggle is written in the most unlikely of places … on the stock market. ### Bichler and Nitzan’s radical idea The idea that the stock market reflects class struggle is not my own. It comes from political economists Shimshon Bichler and Jonathan Nitzan. In ‘Stocks Are Up. Wages Are Down. What Does it Mean?’, I summarized their thinking (as I understand it). Before you continue here, I recommend reading that post. But if you’re pressed for time, here’s the gist of their argument. Class struggle, Bichler and Nitzan observe, is a part of all hierarchical societies. But capitalism is the first social order to quantify this struggle. It does so through prices, which Bichler and Nitzan propose indicate power. Take, as an example, the price of stocks. To mainstream economists, a stock price indicates a firm’s productive capacity. But to Bichler and Nitzan, this price indicates power. Here’s their reasoning. Stock prices are determined by capitalizing a firm’s income stream. But this income stream stems not from productive capacity, but from property rights — the institutional power to exclude.3 So stock prices, Bichler and Nitzan argue, indicate the power of owners to earn income. If we’re interested in class struggle, we want to compare this capitalist power to the power of workers. Here’s a simple way to do so. We compare the price of stocks to the price of wage labor. Bichler and Nitzan call this ratio the ‘power index’: $\displaystyle \text{power index} = \frac{\text{average stock price}}{\text{average wage}}$ This index quantifies the power struggle between capitalists and workers.4 When applied to the United States, Bichler and Nitzan define the US power index as: $\displaystyle \text{US power index} = \frac{\text{S\&P 500 price}}{\text{average US wage}}$ My goal here is to test Bichler and Nitzan’s thesis. Does the power index quantify US class struggle? We’ll get to the test shortly. But first, let’s look at the power index itself. Figure 1 shows how the US power index has changed over the last 150 years. Figure 1: Eras of capitalism, oscillations of power. The blue line shows Bichler and Nitzan’s power index — the ratio of the S&P 500 price to the average US wage. The red line shows the smoothed trend. Shaded regions show four different eras of capitalism. [Sources and methods] From the oscillation of the power-index, four eras of capitalism emerge. The power index rose in the late-19th century during the era of robber-baron capitalism. It declined in the early-20th century as the labor movement was born and monopolies were broken up. The power index reached a minimum in the decades after World War II — a period known as the ‘golden age of capitalism’. Then, from 1980 onward, the power index rose to new heights. The neoliberal era was born. Take a mental snapshot of these power-index oscillations. We’ll revisit them throughout the post. Although a simple ratio of two prices, the power index, Bichler and Nitzan claim, tells us about class conflict at large. When the power index falls, workers are winning the struggle. When the power index rises, capitalists are winning. Is Bichler and Nitzan’s claim true? In this post, I look at the evidence. I test how three different indicators of class struggle relate to the power index. Here’s what I find. When workers strike more, win a living minimum wage, and get government to progressively tax the rich, the stock market declines relative to wages. My conclusion is that Bichler and Nitzan are onto something. The history of class struggle does seem to be written on the stock market. ### The struggle to strike When I was a teaching assistant at York University, my extended-healthcare benefits were better than at any job I’ve had before or since. Why? Was I more ‘productive’ as a TA? Doubtful. I’ve worked hard at every job I’ve had. Was York University intrinsically more generous? No. While I was there, the university actively sought to reduce TA benefits. (It didn’t succeed.) So why the great benefits? The reason is simple. At York, the TA union was militant. We went on strike twice during my 7-year tenure. And one of those strikes (in 2018) was the longest university strike in Canadian history. So the reason I received good benefits was because York TAs were willing to flex their collective muscles. They were willing to strike. My experience is anecdotal. But there’s no reason that it shouldn’t generalize. The more workers strike, the more power they’ll have relative to capitalists. So striking, I propose, is a key measure of class struggle. With this idea in mind, let’s look at something I call strike density. This is the portion of the labor force involved in strikes. Figure 2 shows strike density in the United States over the last century and a half. (Note that the vertical axis uses a logarithmic scale.) Figure 2: Strike density in the United States. I plot here the portion of the US labor force involved in strikes (in each year). [Sources and methods] With the strike data in hand, let’s review some US labor history. Today the right to strike is protected by the government. But this was not always the case. Prior to 1935 (when the right to strike was first legislated), workers went on strike at their own peril. The Battle of Blair Mountain was perhaps the most extreme example of this peril. In the melee, one million rounds of ammunition were fired. Up to a hundred people were killed. All for a labor dispute. Today, this level of violence seems unthinkable. But in the early-20th century, US strikes often involved gunfire. Coal-mine strikes were particularly brutal. Consider another poorly known event — the Ludlow Massacre. In 1914, striking coal miners set up a tent colony in Ludlow, Colorado. The mine owner, John D. Rockefeller Jr., didn’t approve. And so he orchestrated a massacre. On April 20, 1914, the Colorado National Guard and anti-union militia rained machine-gun fire onto the colony. Twenty-one people were killed. Commenting on the massacre, Howard Zinn writes that it was “the culminating act of perhaps the most violent struggle between corporate power and laboring men in American history”. (See his book The Politics of History for an account of the massacre.) Despite the danger they faced, US workers still managed to strike. In the late-19th century, about 1% of the labor force was involved in strikes (see Figure 2). Unfortunately, there’s a gap in the data from 1905 to 1927, so we don’t know what strike density was like in the early-20th century. But we know that by the mid-1930s, strikes were on the rise. Strike density peaked in 1946 in a period of raucous labor unrest. Now known as the strike wave of 1945–1946, roughly 6% of the workforce went on strike (at the peak). That’s about 1 in every 16 workers. In response to the unrest, the US government passed the 1947 Taft-Hartley Act. Still in effect today, the act restricted the rights of unions. It banned political donations by unions and outlawed ‘closed shops’ (workplaces that hire only union members). The Taft-Hartley Act also paved the way for the union-crushing … sorry, ‘right-to-work’ laws that are now enacted in 27 states. Although union rights were restricted after 1947, during the 1950s and 1960s strike density remained high. This fact is worth remembering, as the post-WWII era was not a period of instability. It was the most prosperous era in US history. By the 1980s, things began to change. The defining event happened in 1981, when 13,000 air traffic controllers went on strike. Ronald Reagan, then president, declared the strike illegal and ordered the controllers back to work. When only 1,300 controllers returned to the job, Reagan fired the remaining 11,000. (He also banned them from government employment for life.) The message from government was clear: strike at your own peril. Given this stark message, it’s no surprise that in the ensuing decades, strike density collapsed. Let’s reflect on the scale of this collapse. During the strike wave of 1945–1946, about 5% of the labor force was involved in strikes. During the 1950s and 1960s, this figure remained high, at around 2%. Then came the neoliberal drop. By the 2000s, only about 0.09% of the workforce participated in strikes. That’s a 20-fold drop from the 1950s. The absolute minimum came in 2009, when only 0.008% of the workforce participated in strikes. That’s a 700-fold drop from the peak in 1946. (And it’s not like workers were refusing to strike in 2009 because things were great. That was the era of the Great Financial Crisis.) So we have, in Figure 2, a quantitative history of US strikes. Few people would deny that this history is about class struggle. What’s not clear, however, is that this strike history relates to the stock market. And yet it does. Figure 3 shows the correlation between strike density and the US power index. When more workers go on strike, the power index tends to fall — meaning stock prices decline relative to wages. When fewer workers go on strike, the power index tends to rise — meaning stock prices grow relative to wages. Figure 3: The US power index vs. strike density. The vertical axis shows Bichler and Nitzan’s power index — the ratio of the S&P 500 price to the average US wage. The horizontal axis shows US strike density. [Sources and methods] Here’s the take-home message. When workers flex their muscles by striking, this power seems to be reflected on the stock market. Point for Bichler and Nitzan’s hypothesis. ### The struggle for a living minimum wage Strikes aren’t the only way that workers can flex their muscles. Another option is for workers to influence government policy. They can get government to set a living minimum wage.5 Think of a minimum wage as setting a lower bound on the price of labor. That’s good for low-wage workers — it gives them a decent standard of living. But it’s bad for capitalists — it raises their costs. So if workers had their way, the minimum wage would be high. But if capitalists had their way, the minimum wage would be low (or not exist). So the size of the minimum wage reflects the balance of power between workers and capitalists. With this dynamic in mind, let’s look at the history of the US minimum wage. Figure 4 plots the federal minimum wage since its inception in 1938. (The first state minimum wage was set by Massachusetts in 1912.) Figure 4: The dollar value of the US federal minimum wage. I plot here the value of the minimum wage with no adjustment for inflation. Presidential administrations are shown in red/white. [Sources and methods] When you look at the dollar value of the minimum wage, the picture looks rosy. Since its inception, the minimum wage has grown by a factor of 29. That’s progress, right? Maybe. The problem is that over the last 80 years, it’s not just the minimum wage that’s grown. All prices have increased. So the next thing we need to ask is — what’s the minimum wage’s purchasing power. To measure this purchasing power, we’ll compare the minimum wage to the consumer price index. (The consumer price index measures the average price of frequently-bought commodities.) When we measure the minimum wage’s purchasing power, the results aren’t as rosy. Figure 5 shows the trend. Instead of a step-wise trend to better wages (as in Figure 4), we now have a saw-tooth dance. It’s composed of two parts. When the minimum wage rises, its purchasing power shoots upward instantly. But then inflation slowly wears away at this gain. The result is a saw-tooth dance between wage policy and inflation. Figure 5: The purchasing power of the US federal minimum wage. I’ve divided the federal minimum wage by the consumer price index and set the resulting purchasing power to equal 1 in 1938. Presidential administrations are shown in red/white. [Sources and methods] What’s more interesting than the saw-tooth shape is the long-term trend in the wage’s purchasing power. This trend gives a clear indication of who’s influencing government. For the first 30 years after the minimum wage’s inception, it’s clear that workers got their way. Between 1938 and 1968, the wage’s purchasing power grew by about 250%. Then came the 1970s, which were a period of stasis. Under Nixon, the wage’s purchasing power declined somewhat, mostly because inflation was high and Nixon raised the minimum wage only once. Ford and Carter then held the wage constant (against inflation). That brings us to Ronald Reagan. As president, Reagan made clear that he was on the side of business. Unsurprisingly, he was the first president to refuse to raise the minimum wage. The result was a massive decline in the wage’s purchasing power during the 1980s. When Reagan left office, the wage’s purchasing power didn’t recover. Instead, ensuing presidents held it roughly constant. Today, the purchasing power of the federal minimum wage is about 40% less than it was in 1968. Figure 5 tells a dreary tale of minimum-wage workers being beaten back. And yet the tale gets worse. That’s because the most important aspect of the minimum wage isn’t its purchasing power. What’s most important is the relative income it provides. Here’s the difference. Imagine two people, Alice and Bob. Alice is a cook who earns minimum wage. Her wage grows with time, but just enough to match inflation. Bob, in contrast, is a C-suite executive who earns far more than minimum wage. And to make things worse, his income grows faster than inflation. So relative to Bob, Alice’s income isn’t just staying constant. It’s actually declining. Sadly, this isn’t a hypothetical example. It’s what has happened in the United States. Since the 1980s, the income of minimum-wage workers has barely kept up with inflation. Yet top executives have seen their inflation-adjusted income skyrocket. So in relative terms, the minimum wage has actually declined. Here’s one way of quantifying this decline. We’ll assume that a minimum-wage earner works full time — 40 hours per week, 52 weeks a year. We’ll calculate their annual income and compare it to the American average. (We’ll measure average income using gross domestic income per capita.) Figure 6 shows the resulting trend in relative income. It’s far worse than the trend in purchasing power (Fig. 5). Since the 1970s, the relative income of a full-time minimum-wage worker has plummeted. Figure 6: The relative income of a full-time minimum-wage worker. I assume here that a minimum-wage earner works 40 hours per week, 52 weeks per year. I compare their annual earnings to US gross domestic income per capita. [Sources and methods] With Figure 6 in hand, let’s talk minimum-wage history. The federal minimum wage was created in 1938 by Franklin D. Roosevelt as part of his New Deal. Roosevelt had previously tried to legislate a minimum-wage in 1933, but the bill was struck down by the Supreme Court. At its inception, the minimum wage was$0.25 per hour. Today, this sum seems meagre. But at the time it is generous, giving a full-time minimum-wage worker about 80% of the average American income. To put this value in perspective, note that after 1940 it was never reached again. This testifies to the progressiveness of Roosevelt’s New Deal.

In the 1950s and 1960s, the relative value of the minimum wage remained high. During this time, a full-time minimum-wage worker earned about 70% as much as the average American. But by the 1970s this income began to decline. When Reagan ushered in the neoliberal era, the decline accelerated. It continued under all subsequent presidents. By 2019, a full-time minimum-wage worker took home just 23% of the average US income. Compared to the wage’s peak in 1939, that’s a near 4-fold drop.

The trend in Figure 6 is a clear indicator of class struggle. The creation of the minimum wage (in 1938) was the result of years of activism. The fact that the wage was ample — and remained so for the next 30 years — testifies to workers’ power during this period. But during the neoliberal era, business seized power. And so the relative value of the minimum wage plummeted.

While the battle over the minimum wage is obviously about class struggle, it’s not clear that this struggle has anything to do with the stock market. And yet it does.

Figure 7 compares the relative income of a minimum-wage worker to Bichler and Nitzan’s power index. When the relative income of a minimum-wage worker increases, the power index decreases — meaning the stock market declines relative to the average wage. Conversely, when the relative income of minimum-wage worker decreases, the power index increases — meaning the stock market grows relative to the average wage.

Figure 7: The US power index vs. the relative income of a full-time minimum-wage worker. The vertical axis shows Bichler and Nitzan’s power index — the ratio of the S&P 500 price to the average US wage. The horizontal axis shows the earnings of a full-time minimum-wage worker relative to the US average income (gross domestic income per capita). [Sources and methods]

Again, it appears that Bichler and Nitzan are onto something. The price of stocks (relative to wages) seems to reflect a wider class struggle. When workers fail to win a living minimum wage, stocks surge.

### The struggle to tax the rich

Think of a generous minimum wage as a social safety net. It stops incomes from getting too small. The corollary for the rich is the social safety whip. If incomes get too large, we whip them down to size. How? Using taxes.

It makes sense then that the history of class struggle should be written in tax rates. Here’s the dynamic at its most basic. Workers want to tax the rich. Capitalists want to tax the poor.

Yes, this is a simplification … but a reasonable one. People who earn income from wages and salaries tend not to be rich, and so favor progressive taxation. But people who earn most of their income from property tend to be rich, and so favor regressive taxation. The structure of taxation therefore tells us who’s winning the labor-vs-capital class struggle.

Let’s have a look at this tax structure. We’ll start with the simplest measure of how the rich are taxed — the top marginal tax rate. Figure 8 plots this rate since the inception of federal income tax in 1913.

Figure 8: The top marginal income tax rate in the United States. [Sources and methods]

When income tax was first introduced, the top tax rate was a mere 7%. This rate was immediately hiked during World War I. But when the war ended, the top tax rate was lowered. By the late-1920s it was down to roughly 25%. During the 1930s, the top tax rate rose again as the New Deal was passed. It stayed high during World War II, peaking at a rate that is today unimaginable. In 1945, the top tax rate was 94%.

When World War II ended, something interesting happened. Instead of plummeting (as it had after WWI), the top tax rate remained high. During the 1950s and 1960s, it averaged 85%. Again, it’s worth remembering that this was a period of unprecedented prosperity. (High taxes, it seems, don’t kill the economy.)

It wasn’t until the 1980s, when Ronald Reagan took office, that taxes were slashed. During his tenure, Reagan cut the top tax rate from 70% to 28%. No president since has managed to raise this rate significantly. Today, the top marginal tax rate is about 37%. That may sound high, but it’s a 2.5-fold drop from the 1945 peak.

Let’s move on to another measure of how the rich are taxed. We’ll look at the tax rate that top earners actually pay. This is called the effective tax rate — taxes actually paid as a portion of total income. The effective tax rate usually differs from the official tax rate because there are many ways of avoiding taxes. Some methods are legal (such as exploiting tax loopholes). Other methods are illegal (such as hiding money in tax havens). Regardless of the method, the rich usually pay less tax than the official tax rate.

In their book The Triumph of Injustice, Emmanuel Saez and Gabriel Zucman estimate what the rich actually pay in taxes. Figure 9 shows their data — the effective tax rate paid by the top 0.1% of US earners.

Figure 9: The effective tax rate paid by the top 0.1% of US earners. [Sources and methods]

The trend in the effective tax rate (an inverted U) looks similar to the trend in the official top marginal tax rate. The effective tax level, however, is quite different. During the 1950s and 1960s, for instance, the official top tax rate averaged 85%. But the effective tax rate was far less — averaging about 54%.

I’ve marked in Figure 9 the 50% tax threshold (the dashed horizontal line). It’s a threshold that is mentally significant. Above this rate, top earners give more than half of their income to the government. An effective tax rate over 50% was first achieved in the 1930s and lasted until the late-1970s. But since then, the effective tax rate paid by top earners has plummeted.

In 2018, US taxation passed a dubious threshold — it became truly regressive. In that year, the 400 richest individuals paid an effective tax rate that was lower than the rate paid by the bottom 10% of earners. (See the data visualized in this New York Times article.) Here’s how billionaire Warren Buffet framed this absurdity. Despite earning far more money, he paid an effective tax rate that was lower than his employees.

Clearly, US workers are losing the struggle to tax the rich. It’s a loss that plays out daily in the media. Any talk of progressive taxation elicits screams of ‘class warfare’. Of course taxing the rich is class warfare. But what goes unmentioned is the opposite class war that’s been waged successfully. For the past forty years, the rich have used tax law to wage war on the poor.

So we have, in Figures 8 and 9, a history of the struggle to tax the rich. It’s a history that’s obviously about class conflict. But what’s not obvious is that this struggle over taxes relates to the stock market. And yet it does.

Figure 10 compares the top marginal tax rate to Bichler and Nitzan’s power index. When the top tax rate increases, the power index decreases — meaning stock prices decline relative to wages. Conversely, when the top tax rate decreases, the power index increases — meaning stock prices grow relative to wages.

Figure 10: The US power index vs. the top marginal tax rate. The vertical axis shows Bichler and Nitzan’s power index — the ratio of the S&P 500 price to the average US wage. The horizontal axis shows the US top marginal tax rate. [Sources and methods]

The same trend appears when we look at the effective tax rate of the rich. Figure 11 compares the effective tax rate paid by the top 0.1% to Bichler and Nitzan’s power index. Again, when the tax rate increases, the power index decreases — meaning stock prices decline relative to wages. Conversely, when the top tax rate decreases, the power index increases — meaning stock prices grow relative to wages.

Figure 11: The US power index vs. the effective tax rate paid by the top 0.1%. The vertical axis shows Bichler and Nitzan’s power index — the ratio of the S&P 500 price to the average US wage. The horizontal axis shows the effective tax rate paid by the top 0.1% of US earners. [Sources and methods]

Again, it appears that Bichler and Nitzan are onto something. The struggle to tax the rich — a clear indicator of class conflict — seems to be written on the stock market.

### Does the stock market reflect class struggle?

Let’s take stock (pun intended). Bichler and Nitzan propose that stock prices, when compared to wages, reflect the class struggle between capitalists and workers. When capitalists win, stocks should go up. When workers win, stocks should go down.

This claim is just a hypothesis. But it’s one that is surprisingly well-supported by the evidence. When we look at indicators that are obviously about class struggle — strike density, the size of the minimum wage, and the taxation of the rich — we find that they correlate well with Bichler and Nitzan’s power index. When workers strike less, fail to win a living minimum wage, and fail to progressively tax the rich, stock prices rise relative to wages.

Does this evidence mean that Bichler and Nitzan are correct? The scientist in me would answer conservatively. The evidence ‘supports’ Bichler and Nitzan’s hypothesis that the stock market reflects class struggle. But the activist in me would answer more boldly. Karl Marx and Friedrich Engels once proclaimed that “the history of all hitherto existing society is the history of class struggles”. The evidence here suggests an equally bold proclamation: ‘In capitalist societies, the history of class struggle is the history of the stock market’.

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[Cover image: ‘Pyramid of Capitalist System’ (an IWW poster from 1911) is from Wikipedia. I’ve overlaid a stock ticker image from pixabay.]

### Sources and methods

In Figures 1, 2, 5, 6, 8, and 9, I calculate the smoothed trend using a locally-weighted polynomial regression.

#### Power index

Data for the US power index is from:

• 1865–2016: Bichler and Nitzan’s A CasP Model of the Stock Market
• 2016–present: S&P 500 price is from FRED, series SP500. The average US wage is from Bureau of Labor Statistics series CEU0500000003, Average Hourly Earnings of All Employees, Total Private

#### Strike density

I calculate strike density by dividing the number of people involved in ‘work stoppages’ by the size of the labor force. I call this the ‘strike’ density’ (not the ‘work stoppage density’), because most work stoppages are strikes, not lockouts.6

Work stoppage data is from:

• 1881–1946: Historical Statistics of the United States Bicentennial Edition, Table D970-985. (I index this data to the BLS values in 1947.)
• 1947–present: Bureau of Labor Statistics, series WSU010

Labor force data is from:

• 1881–1889: Historical Statistics of the United States Bicentennial Edition, Table D11
• 1890–1946: Historical Statistics of the United States Millenial Edition, Table Ba470
• 1947–present: Bureau of Labor Statistics series LNU01000000

I index labor force series backwards in time from the BLS data, and then interpolate linearly to estimate data for missing years.

#### Minimum wage

Data for the US federal minimum wage is from the Department of Labor.

To calculate the wage’s purchasing power, I divide the minimum wage by the consumer price index (Bureau of Labor Statistics, series CUUR0000SA0.)

To calculate the relative size of this wage, I estimate the income earned for a minimum-wage earner working full time. I multiply the federal minimum wage by 40 hours per week × 52 weeks per year.

I then divide this income by gross domestic income per capita. US gross domestic income data is from the Bureau of Economic Analysis, Table 1.10.

US population data is from:

• 1938–1958: Angus Maddison’s Historical Statistics of the World Economy: 1-2008 AD
• 1959–present: Federal Reserve Economic Data, series POPTHM

#### Top marginal income tax rate

Data for the top US marginal tax rate is from the Tax Policy Center.

#### Effective income tax rate of the top 0.1%

Data for the effective tax rate of the top 0.1% is from Emmanuel Saez and Gabriel Zucman, compiled for their book The Triumph of Injustice. You can download the data from Zucman’s website.

### Notes

1. Case in point: before doing the research for this post, I’d never heard of The Battle of Blair Mountain. Given that we share a name, my ignorance is a bit embarrassing.
2. As sign of the times, Donald Trump recently called for Zinn’s text to be removed from high school curriculum. Zinn’s approach to history, Trump declared, is “ideological poison, that if not removed will dissolve the civic bonds that tie us together.”
3. Without the power to exclude, firms would have no income. Commenting on this fact, Nitzan and Bichler observe:

Money spent on having your engineers invent open-source technology or on making your workers create physical capacity that everyone can freely use is money gone down the drain. The only way such spending can become a profit-yielding investment is if others are prohibited from freely utilizing its outcome. In this sense, capitalist investment – regardless of how ‘productive’ it may appear or how much growth it seems to ‘generate’— remains what it always was: an act of limitation.

(Nitzan and Bichler in Capital as Power)

4. Bichler and Nitzan are the first to note that the power index is not the quantification of class struggle. It is a quantification of class struggle — one of many that are possible.
5. Nothing rankles mainstream economists more than talk of a minimum wage hike. “It will increase unemployment of unskilled workers”, they say. “It will distort the labor market,” they continue.

This is no straw man argument. In the 2003 edition of his undergraduate textbook Principles of Economics, Gregory Mankiw notes that 79% of economists agree that a minimum wage ‘increases unemployment among young and unskilled workers’. In the 2011 edition of his textbook Principles of Microeconomics, Mankiw writes:

[A] minimum-wage law distorts the market for low-wage labor.

Mankiw’s language is telling. When you see the word ‘distort’ in mainstream economics, take note. It’s code for ‘the real world ruins my theory’.

6. Regarding work stoppages, the Historical Statistics of the United States Bicentennial Edition has this to say:

Work stoppages include strikes and lockouts. A strike is defined as a temporary stoppage of work by a group of employees to express a grievance or to enforce a demand. A lockout is defined as a temporary withholding of work from a group of employees by an employer (or a group of employers) to enforce acceptance of the employer’s terms. Most work stoppages are strikes rather than lockouts. (emphasis added)

Bichler, S., & Nitzan, J. (2016). A CasP model of the stock market. Real-World Economics Review, (77), 119–154.

Fix, B. (2020). How the rich are different: Hierarchical power as the basis of income size and class. Journal of Computational Social Science, 1–52.

Huber, E., Huo, J., & Stephens, J. D. (2017). Power, policy, and top income shares. Socio-Economic Review, 0(0), 1–23. https://doi.org/10.1093/ser/mwx027

Nitzan, J., & Bichler, S. (2009). Capital as power: A study of order and creorder. New York: Routledge.

Saez, E., & Zucman, G. (2019). The triumph of injustice: How the rich dodge taxes and how to make them pay. WW Norton & Company.

Shogan, R. (2006). The Battle of Blair Mountain: The story of America’s largest labor uprising. Basic Books.

Zinn, H. (1970). The politics of history. Boston: Beacon Press.

Zinn, H. (1980). A people’s history of the United States: 1492–present. Harper & Row.

## Was Mussolini’s 1931 Policy on the Banking Crash Better than Britain’s 2008 Bail-Out?

### Tags

Here’s another interesting question posed by the changing policies of the Italian Fascist state towards industry and the financial sector. Fascism celebrated and defended private industry as the essential basis of the Italian economy and society. When Mussolini first took power in the early 1920s, he declared that Fascism stood for ‘Manchester School’ capitalism – privatisation, cuts to public services and expenditure and the lowering of wages and welfare benefits. But this changed with the development of the Fascist state through the establishment of the corporations – industrial organisations combining the employers’ organisations and the trade unions, which were supposed to take over the management of industry – autarky, which aimed to make Italy self-sufficient and the movement to a centrally planned economy.

This was partly achieved in the early 1930s when Mussolini set up two state institutions to buy out the Italian banks following the Wall Street crash of 1929 and the ensuing depression. These not only bought out the banks, but also the industries these banks owned and controlled, so that the Italian state ended up owning just under a fifth of the Italian economy.

This is described in a passage in the article ‘Industry’ in Philip V. Cannistraro’s Historical Dictionary of Fascist Italy (Westport, Connecticut: Greenwood Press 1982). This runs

Two public agencies were created to save banks and crucially affected industries: the Istituto Mobiliare Italiano (IMI) on November 13, 1931, which was to control credit; and the Istituto per la Ricostruzione Industriale (IRI) on January 23, 1933. IRI was by far the more radical solution, for it purchased all the shares of stock in industrial, agricultural, and real estate companies previously held by banks. (The banking law of 1936 prohibited banks from extending long-term credit to industrial concerns). Although the industrialists fully expected a return to “normalcy” and to private enterprise after the crisis had passed, Mussolini had successfully created an instrument for the permanent intervention of government in the economy. By 1939 IRI controlled a series of firms representing 44.15 percent of the capital of Italian stock values and 17.80 percent of the total capital of the country – hence, the Fascist government controlled a proportionately larger section of national industry than any other government in Europe except the Soviet Union. (p. 278).

This allowed the government to interfere and restructure the Italian economy leading to the expansion of the manufacturing economy and a reduction in imports. On the other hand, poor government planning and an inefficient bureaucracy meant that Italian domestic manufactures were frequently inferior and the country had a lower growth rate than many other western European countries.

But this contrasts very strongly with policy of Britain and America to the financial sector after the 2008. The banks were bailed out with public money, but were not nationalised and the government has continued with its ‘light touch’ approach to regulation. Meaning that the banks have been free to carry on pretty much as before. Public spending, especially on welfare, has been drastically cut. Despite the Tories claiming that this would boost the economy and they’d pay of the debt within a couple of years or so, this has very definitely not happened. In fact, the debt has massively increased.

This has added to the long term problems of Britain’s manufacturing industry. Left-wing economists have pointed out that Britain’s domestic industries suffer from a lack of capital because the financial sector is geared towards overseas investment. A situation that has no doubt got worse due to globalisation and the personal investment of many Tory and New Labour MPs in foreign industry and their savings in offshore tax havens. British industry has also suffered from the ignorance and neglect of successive prime ministers from Maggie Thatcher onwards. Thatcher couldn’t understand that her policy of keeping the Pound strong would damage British exports, and in any case did not want to rescue failing British industries. They were either to be allowed to go under, or else sold to foreign companies and governments. Tony Blair went further, and believed that manufacturing industry’s place in the British economy could be successfully taken over by the financial sector and the service industries.

But this has also been a failure. Ha-Joon Chang in his 23 Things They Don’t Tell You About Capitalism has pointed out that manufacturing industry is still very much of vital importance. It’s just that it has grown at a slower rate than the other sectors.

Fascist Italy was a totalitarian dictatorship where Mussolini ruled by fear and violence. There was no freedom of speech or conscience in a system that aimed at the total subordination of the individual, economy and society. Mussolini collaborated with Hitler in the persecution of the Jews, although mercifully this wasn’t quite so extreme so that 80 per cent of Italian Jews survived. The regime was aggressively militaristic aiming at the restoration of a new, Roman-style empire in the Mediterranean. Albania, Greece and Ethiopia were invaded along with Tripoli in Libya and Fascist forces were responsible for horrific atrocities as well as the passage of race laws forbidding racial intermixture with Black Africans.

It was a grotesque, murderous regime which was properly brought to an end by the Allied victory of the Second World War. It must never be revived and Fascism must be fought every where. But it does appear that Mussolini’s policy towards the banks and industry was better than that pursued by our supposedly liberal democracies. But the governments of our own time are also becoming increasingly intolerant and authoritarian. The danger of our country becoming similar repressive dictatorship under Boris and the Tories is very real.

We desperately need the return to power of a genuinely socialist Labour government, committed to investment in the welfare state and public services with a nationalised NHS, a mixed economy and positive commitment to democracy and freedom of speech rather than the illusion maintained by the mainstream media and Tory press.

And that will mean overturning over three decades of Thatcherite orthodoxy on the banks and financial sector, just as Mussolini changed his policies towards them with the aim of restoring and expanding Italian industry.

## Government abandons the arts: what’s to be done?

### Tags

In Cathy Wilcox’s cartoon for the Age and Sydney Morning Herald of 17 July  2020, students are depicted leaving a boarded-up university building and queuing for information at the Job Trainer tent, where a young man is being asked: ‘Have you thought of becoming a celebrity handyman?’ The scene reflects a government that champions trades and has abandoned support for any local culture other than reality television.

The erasure of culture from the national agenda during the current Coalition government is striking. In Canberra, the arts office is now buried under bitumen, somewhere down the corridors of the Department of Infrastructure, Transport, Regional Development and Communications. Government expenditure on cultural activity has dropped by at least 5 per cent since 2007. By contrast, the aim of 2 per cent GDP of the budget for defence has projected an increase of 6.2 per cent in real terms. And now there is the punitive increase in fees for undergraduate humanities courses, which recently led to a 12 million cut to the Arts Faculty at the University of Melbourne. While this has met fierce opposition from the arts sector, it is unlikely to cause outrage in the electorate. There has been a 25 per cent decline in public support for public arts funding over the past decade. We need some analysis of why this is so. ### The clerisy Reactionary though it may be, there is something to learn from how the Right approaches this. Voices such as that of Joel Krotkin on platforms like Quillette (founded by an Australian journalist) present the knowledge class as a ‘clerisy’. This class of academics, North Atlantic journalists and tweeters are seen to support the technocratic elites in a neo-feudal alignment based on a priestly surveillance of liberal values at the expense of workers’ concerns. While not necessarily celebrating Trump, this critique gives credence to his electoral success. If Trump loses the election, this critique of neo-feudalism is likely to focus on the vice-presidential candidate, Kamala Harris, a Californian with the strong support of Silicon Valley. Though Australia does not have technology elites, US-based political tribalism has a parallel here in the growing insularity of art forms. The cultural field increasingly contains separate bubbles of practitioners making work for each other within different forms. So in relation to poetry, whereas in the past there were national laureates like Judith Wright, the audience for verse now seems increasingly specialist, constituted by other poets. ### Peers This insularity became institutionalised in 2013 with the changes to assessment panels at the Australia Council. Art-form boards were replaced by panels of peers. I’m not claiming that this is a corrupt process. It’s been necessitated partly by funding cuts and a call to channel maximum funds to arts workers. I’ve been a peer on a couple of panels and have witnessed an entirely honourable process, with strict adherence to conflict-of-interest protocols. But it’s hard to argue for consideration of public value against direct benefits to the artist, even if that artist is located overseas making work for a foreign audience. Without an independent board, there is no clear focus for strategic audience engagement. During lockdown, the Australia Council offered marketing webinars using the same techniques as would apply to any other commodity. In the visual arts, I’ve been frequenting contemporary art exhibitions over the years and have seen the growingly esoteric nature of gallery spaces unwilling to engage with audiences outside the personal networks of the artists. Much video performance seems self-obsessed and without any enduring value beyond a frisson of creative freedom. ### Creatives It’s worth rethinking ‘creative freedom’. The knowledge class has been lauded as a vanguard of liberalisation and development. Richard Florida heralded the arrival of ‘creatives’, who consist of a mix of artists and design and media professionals. Following on from the radical politics of university students, this class cultivates a responsible awareness of other interests, including colonised peoples, non-binary genders and non-humans. But this plurality of interests often retreats from social justice as a collective endeavour. Recently, Thomas Piketty critiqued those who focus on cultural diversity rather than progressive taxation: …western democracies are now dominated by two rival elites, reflected in many two-party electoral systems: a financial elite (or ‘merchant right’) that favours open markets, and an educational elite (or ‘Brahmin left’) that stands for cultural diversity, but has lost faith in progressive taxation as a basis for social justice. With these as the principal democratic options, nativist parties prosper, opposing educational and economic inequality, but only on the basis of tighter national borders. There is a vacancy for parties willing to defend internationalism and redistribution simultaneously. Also from the left corner, Asad Haider in Mistaken Identity: Race and Class in the Age of Trump invoked Malcolm X in championing collective struggle above sectional politics: ‘The framework of identity reduces politics to who you are as an individual and to gaining recognition as an individual, rather than your membership in a collectivity and the collective struggle against an oppressive social structure’. I would slightly disagree: there are forms of solidarity in identity politics that transcend the individual, such as diversity initiatives now prevalent in institutions and corporations. Nonetheless, these do not cohere around a general ideology of liberation as might be found in socialism. Locally, the swap of political allegiance between tradies to the right and professionals to the left has become a refrain of Guy Rundle’s Crikey columns. In his overview of the first twenty years of the millennium, Rundle opined that the knowledge class: had become blind to the degree that it was an advancement of their own knowledge class interests, disguised as the old general interest of humanity that the socialist movement was once held to represent. Regardless of the ideals upheld by the knowledge class, it cannot be sustained without some engagement with the majority. This needn’t involve the kind of compromise associated with arguing the economic case for the creative industry. But it must come with some reform to its more institutional forms. The year-long lockdown offers a rare window to consider how the knowledge class might become more relevant. ### Rewilding We hear much talk of ‘rewilding’ as a solution to current dilemmas. This goes beyond urban legends of dolphins in the canals of Venice. In the Guardian, Suzanne Moore used the phrase to resist the reflex goal of returning to normal life: ‘Does normal mean stadium tours by big bands with ticket prices in three figures?’ These questions are timely, but essentially the article is about more state support for public art rather than any review of how art is produced. Those structures themselves may need changing. Arts development is often presumed to be a matter of increasing formalisation. Arts become an ‘industry’ that fights for the interests of its ‘sector’. The boards of arts organisations take an increasingly corporate interest in ‘compliance’ ‘risk management’ and ‘brand value’. The industrial mindset is an inevitable response to the pressures of a growing population. But left to its own devices, it can become a machine with little sign of organic artistic life. Rather than an organic ‘culture’ with its own shared meanings, the arts ‘industry’ is an aggregate of individual interests. The retreat of the market during lockdown has exposed the absence of culture. I was struck recently in an Oxfam Zoom meeting with artisan organisations who spoke of the devastating loss to exports. Representatives from Kenya and the Philippines admitted that the only market for their crafts today was export and foreign tourists. For locals themselves, craft is often seen as a backward and precarious activity by contrast with office work in the city. With a Midas touch, the practice of outsourcing culture seems to have resulted in a mirror of Western consumerism. Why should these traditional crafts depend on foreign capital? Wasn’t there a time when such a culture could flourish in far poorer conditions than those of today? Lockdown has seen some serious examination of this arrangement. I’ve been interested to follow the many YouTube, Zoom and LinkedIn discussions featuring Tyson Yunkaporta. His book Sand Talk: How Indigenous Thinking Will Save the World wilfully bypasses academic conventions. Rather than footnotes, Yunkaporta ties his argument to a series of weapons that he has carved, which he occasionally brandishes to ground his ideas. With a Buddha-like equanimity, Yunkapora speaks to a broad cross-section of people about the illusions of Western modernity. His use of the ngal—‘us-two’—pronoun eschews any role for the symbolic as a formalised structure of meaning. There are no ‘isms’ for a reader to extract, though in his conversations he sometimes invokes systems theory, particularly what’s popularly known as ‘Game B’. Yunkaporta is one of the most engaging expressions of the ‘rewilding’ Zeitgeist. This involves zooming out from the civilising mission of the arts to the extractive world system it has come to serve. We are yet to see what will emerge once this particular enzyme has loosened up our cultural structures. Given the apocalyptic vision outlined by Justin Clemens in Arena Quarterly, it’s tempting to be overwhelmed by pessimism. We should, rather, be provoked to find what Antonio Gramsci advocates as an ‘optimism of the will’. ### Useful Rewilding may take different artistic forms, such as turning suburban streets into galleries or performing classical music in a bar. As an advocate for the crafts, I’ve struggled against the demeaning representations of them, involving satire of hipsters or lockdown hobbies. In the current predicament, the role of crafts goes beyond nostalgia. The craft world bridges studio and workshop. It is a means not just of representing the world as a mirror but also of introducing a meaningful object into everyday life. You usually find craft in the gallery shop, where objects are taken home or bought as gifts. While it is regularly overlooked as a serious artistic pursuit, craft does produce goods that continue to give value to everyday life. Take, for example, Melbourne ceramicist Vipoo Srivilasa, who tirelessly creates projects that work with communities, such as the Monster project to creatively engage production-line workers in a Thai ceramics factory. The lower cost of living is luring many artists to small country towns, where there is greater potential to work outside the bubble, as in the artist residency in the tiny northern Victorian town of Boorhaman. As part of a ‘slow art’, Chaco Kato used an accessible technique like knotting to bring locals together, even engaging with a local rope factory. This doesn’t have to be parochial. Through the Crosshatched project, Tallarook potter Sandra Bowkett regularly hosts Indian potters who produce chai cups and round mudka water vessels for a local market. There is also promise in local businesses, such as Wonderpants in Castlemaine, that offer useful products that engage a loyal following. This may not be considered ‘creative’, but it does imbue the product with meaning and connection. The sudden need for masks, combined with isolation from global supply chains, has been a catalyst for the repurposing of textile studios into production workshops. Historical moments like the Arts and Crafts movement and Bauhaus showed how creativity can be applied to objects that combine usefulness and social change. The Japanese platform One Village One Product offers a model of rejuvenation through specialisation. The Vietnamese have now taken up this model to become an international national movement. For the time being, it is important to nurture local markets for useful products that add meaning to people’s lives. ### Back to the garden In the end, we have to do something. National politics seem set on a course of cultural destruction, evoking the Taliban in results if not in means. With an exclusive focus on retail kitchen politics, anything that conflicts with the ideology of short-term self-interest will be starved of support. The universities have played a critical role in creative arts, providing salaries for its leading practitioners and scholarships for others. During the coalition government, this field is likely to decline along with state funding. Resources for the Australia Council and the ABC are likely to be cut even further in upcoming budgets, and states will be hard-pressed to sustain current levels of support. This is not to deny the need for the arts as a critical mirror on our world. Their institutions are essential for long-term cultural memory. But it’s important to renew their purpose by occasionally going wild, venturing beyond the familiar. The philanthropic sector has shown impressive leadership here. The report by arts thinktank A New Approach A View from Middle Australia replaces the stock ‘creative industry’ with ‘arts and culture’, reflecting lived experience. In May this year, Philanthropy Australia’s Arts Funders network offered 1,400 artists1000 each, rather than the usual winner takes all approach of grant funding.

The recent death of artist’s artist John Nixon evoked memories of art as a vocation. I remember visiting his acolytes at the Prahran Store 5 Gallery, drawn to the intensity of their aesthetic mission. Though Nixon’s authority emerged from outside the system, the Guardian’s obituary reverted to the corporate language of the arts: ‘Australian arts industry pays tribute…’.

The arts have been built on a modernist critique of traditional authority. But there comes a time when the arts themselves must be rebuilt—a time when we must, as Milton wrote, ‘reform the Reformation’.

The industry is dead. Long live the industry!