Reports from the Economic Front

a blog by Marty Hart-Landsberg

Monthly Archives: November 2016

Exile From A Future Time

Although this is not my typical post, I hope readers will find this poem, The Bellbuoy by Sol Funaroff, useful.  I read it periodically and it strengthens my resolve.

The most moving part for me follows:

I am that exile

from a future time,

from shores of freedom

I may never know,

who hears, sounding in the surf,

tidings from the lips of waves

that meet and kiss

in submarine gardens

of a new Atlantis

where gold colored fishes

paint the green gloom.

 

Here is the complete poem:

The Bellbuoy by Sol Funaroff

 

At the ebb and flow of the sea

near the shore’s edge

I stand and watch the low grey clouds

whistling in the winds weather,

and hear the bellbuoy,

rocked with the sea swell,

give sound and meaning

to the unknown currents, seawhispers,

subdued voices, the undersea of living.

 

New world navigator

I sound uncharted depths.

For the longings of sailors

I sing a voyage of discovery;

lands where bleached river beds

like mammoth bones lie dry;

and ancient cities,

built by slaves,

doomed by the slaver’s whip,

Crumble in their wreckages.

 

In a city of hulks,

battered tenements,

with creatures swarming

in slime and weeds,

stars lit by electric fish

flash in the marine night

and the moon sinks down,

a foundering ship.

 

In this human deep

the derelict’s dreams are drowned

in absinthe solitudes,

and hopes are drowned

with the dreams of drowning.

There are dark gulfs,

hollowed by the tears of oceans,

where the weeping of waters

is like the weeping of women

in a nation at war

and the sea is salt and bitter

with the blood of the slain.

 

There in subterranean caverns

the long rains,

in travels underground

seeping through the graves of paupers,

drip an age of sorrows

frozen in stalagmite;

and from the abyss,

deep as the tones of organs,

echos swell in reply,

a surge of voices

the rebel exile often hears

in the far, hidden tides

of his native land.

 

I am that exile

from a future time,

from shores of freedom

I may never know,

who hears, sounding in the surf,

tidings from the lips of waves

that meet and kiss

in submarine gardens

of a new Atlantis

where gold colored fishes

paint the green gloom.

 

And where the cracked heart of the world

sobs through great fissures

whose boiling hells

raise volcanic fires

and tears of stone,

in huge convulsions,

waterspouts and steam,

eternity gives birth,

and from its watery womb

emerges a continent

from the slime of oceans.

 

Then tossed by seas rebellious and proud

with stormy syllables in mass cascades

my songs are sung.

The Trump Victory

The election of Donald Trump as president of the United States is the latest example of the rise in support for right-wing racist and jingoistic political forces in advanced capitalist countries.  Strikingly this rise has come after a sustained period of corporate driven globalization and profitability.

As highlighted in the McKinsey Global Institute report titled Playing to Win: The New Global Competition For Corporate Profits:

The past three decades have been uncertain times but also the best of times for global corporations–and especially so for large Western multinationals. Vast markets have opened up around the world even as corporate tax rates, borrowing costs, and the price of labor, equipment, and technology have fallen. Our analysis shows that corporate earnings before interest and taxes more than tripled from 1980 to 2013, rising from 7.6 percent of world GDP to almost 10 percent.  Corporate net incomes after taxes and interest payments rose even more sharply over this period, increasing as a share of global GDP by some 70 percent.

global-profit-pool

As we see below, it has been corporations headquartered in the advanced capitalist countries that have been the biggest beneficiaries of the globalization process, capturing more than two-thirds of 2013 global profits.

advanced-economies-dominate

More specifically:

On average, publicly listed North American corporations . . . increased their profit margins from 5.6 percent of sales in 1980 to 9 percent in 2013. In fact, the after-tax profits of US firms are at their highest level as a share of national income since 1929. European firms have been on a similar trajectory since the 1980s, though their performance has been dampened since 2008. Companies from China, India, and Southeast Asia have also experienced a remarkable rise in fortunes, though with a greater focus on growing revenue than on profit margins.

And, consistent with globalizing tendencies, it has been the largest corporations that have captured most of the profit generated.  As the McKinsey report explains:

The world’s largest companies (those topping $1 billion in annual sales) have been the biggest beneficiaries of the profit boom. They account for roughly 60 percent of revenue, 65 percent of market capitalization, and 75 percent of profits. And the share of the profit pool captured by the largest firms has continued to grow. Among North American public companies, for instance, firms with $10 billion or more in annual sales (adjusted for inflation) accounted for 55 percent of profits in 1990 and 70 percent in 2013. Moreover, relatively few firms drive the majority of value creation. Among the world’s publicly listed companies, just 10 percent of firms account for 80 percent of corporate profits, and the top quintile earns 90 percent.

bigger-the-better

Significantly, most large corporations have chosen not to use their profits for productive investments in new plant and equipment.  Rather, they built up their cash balances.  For example, “Since 1980 corporate cash holdings have ballooned to 10 percent of GDP in the United States, 22 percent in Western Europe, 34 percent in South Korea, and 47 percent in Japan.”  Corporations have often used these funds to drive up share prices by stock repurchase, boost dividends, or strengthen their market power through mergers and acquisitions.

In short, it has been a good time for the owners of capital, especially in core countries.  However, the same is not true for most core country workers.  That is because the rise in corporate profits has been largely underpinned by a globalization process that has shifted industrial production to lower wage third world countries, especially China; undermined wages and working conditions by pitting workers from different communities and countries against each other; and pressured core country governments to dramatically lower corporate taxes, reduce business regulations, privatize public assets and services, and slash public spending on social programs.

The decline in labor’s share of national income, illustrated below, is just one indicator of the downward pressure this process has exerted on majority living and working conditions in advanced capitalist countries.labor-share

Tragically, thanks to corporate, state, and media obfuscation of the destructive logic of contemporary capitalist accumulation dynamics, worker anger in the United States has been slow to build and largely unfocused.  Things changed this election season.  For example, Bernie Sanders gained strong support for his challenge to mainstream policies, especially those that promoted globalization, and his call for social transformation.  Unfortunately, his presidential candidacy was eventually sidelined by the Democratic Party establishment that continues, with few exceptions, to embrace the status-quo.

However, another “politics” was also gaining strength, one fueled by a racist, xenophobic, misogynistic right-wing movement that enjoyed the financial backing of the most reactionary wing of the capitalist class.  That movement, speaking directly to white (and especially male) workers, offered a simplistic and in its own way anti-establishment explanation for worker suffering: although corporate excesses were highlighted, the core message was that white majority decline was caused by the growing demands of “others”—immigrants, workers in third world countries, people of color, women, the LGBTQ community, Muslims, and Jews—which in aggregate worked to drive down wages, slow growth, and misuse and bankrupt governments at all levels.  Donald Trump was its political representative, and Donald Trump is now the president of the United States.

His administration will no doubt launch new attacks on unions, laws protecting human and civil rights, and social programs, leaving working people worse off.  Political tensions are bound to grow, and because capitalism is itself now facing its own challenges of profitability, the new government will find it has little room for compromise.

According to McKinsey,

After weighing various scenarios affecting future profitability, we project that while global revenue could reach $185 trillion by 2025, the after-tax profit pool could amount to $8.6 trillion. Corporate profits, currently almost 10 percent of world GDP, could shrink to less than 8 percent–undoing in a single decade nearly all the corporate gains achieved relative to world GDP over the past three decades. Real growth in corporate net income could fall from 5 percent to 1 percent per year. Profit growth could decelerate even more sharply if China experiences a more pronounced slowdown that reverberates through capital-intensive sectors.

future

History has shown that we cannot simply count on “hard times” to build a powerful working class movement committed to serious structural change.  Much depends on the degree of working class organization, solidarity with all struggles against exploitation and oppression, and clarity about the actual workings of contemporary capitalism.  Therefore we need to redouble our efforts to organize, build bridges, and educate. Our starting point must be resistance to the Trump agenda, but it has to be a resistance that builds unity and is not bounded in terms of vision by the limits of a simple anti-Trump alliance.   We face great challenges in the United States.

The Importance Of Solidarity

As we begin to take stock of the political moment in the United States and strategize ways to build a movement strong enough to resist the policies of the Trump administration and confident enough to project a new social vision, it is important to learn from the efforts of people in other countries facing similar challenges.  South Korea for example.

Park Geun-hye, the current president of South Korea, took office in February 2013.  The daughter of Park Chung-Hee, the brutal military dictator who ruled the country from 1961 until his assassination in 1979, Park Geun-hye presented herself as a “soft” conservative during the presidential campaign.  But once elected she moved quickly and decisively, with the support of the country’s security forces, to expand the neoliberal and anti-democratic policies of her conservative predecessor and crush any opposition.

The consequences of her rule have been devastating for the great majority of Koreans.  Some highlights: her deregulation of health and safety standards led directly to the sinking of a ferry carrying over 400 students; more than 300 of whom drowned.  Her labor initiatives include laws to increase the precariousness of work and difficulty of unionization, and lower the wages of regular workers.  Her education policies require that public school teachers use only state written history books.  Her militarist policies include the construction of a new naval base for US warships on Jeju island, over the objections of the residents; an intensification of war games directed against North Korea; the closure of the Kaesong industrial zone; and the welcoming of a US THAAD anti-missile battery aimed at China and Russia on South Korean soil.  And she has advanced her policies by outlawing demonstrations, arresting hundreds of union leaders, and dissolving a political party.

Korean social movements, led by the Korean Confederation of Trade Unions, have responded to this rightward movement with ever larger demonstrations, despite the jailing of many labor leaders.  Now, the balance of forces appears to be decisively shifting against the government.  The reason: new revelations point to the fact that many of Park’s policies were made either in consultation with or in response to the dictates of an unelected confidant, the daughter of a now deceased cult leader.

As the website Zoom in Korea explains:

Since late October, when news broke of the government corruption scandal involving South Korean president Park Geun-hye, South Korean citizens have demanded the removal of Park and her administration from office. Last week on November 5, close to 200,000 people took to the streets of Seoul to demand her resignation. A diverse range of people from different social enclaves of South Korean society joined together to send a common message to their government – “Park Geun-hye, step down.”

Throughout the streets of Seoul, one could see recently politicized high school students marching side by side with elderly folks who had experienced past revolutionary moments in South Korean history.

Here is a short clip which shows what it looks like when 200,000 people crowd the streets of Seoul to demand change.

For more on the growing movement in South Korea, its demands and its challenges, read the rest of the Zoom in Korea article here.

 

We are not alone in facing powerful dictatorial rightwing political forces.  As we develop our own response here in the United States we need to keep solidarity in mind, which means both supporting and learning from struggles elsewhere.

 

November 12 update

Zoom in Korea reports:

1 Million in Historic Protest to Oust Park Geun-hye
As of 8:30 pm (Seoul time) on Saturday, November 12, 2016

South Korean media report 1 million gathered at Gwanghwamun Plaza to demand Park Geun-hye’s resignation. This is the largest protest South Korea has seen since the democratic uprising of June 1987. People from across the country, including conservative strongholds Busan and Daegu have traveled to Seoul to join the protest. Youth in school uniforms and mothers with children are among the protest.

Protesters on the way to the Blue House are blocked by a barricade of police buses near Gyeongbok Palace. The police have also blocked off entrances to subway stations between the police barricade and the presidential residence. Protesters are intent on reaching the Blue House but so far remain peaceful.

Seoul Mayor Park Won-soon refused to supply water from the city’s fire hydrants to the police, which had threatened to use water cannons to block protesters.  Referring to the death of farmer Baek Nam-gi, hit by a high-pressure water cannon at a mass demonstration in November 2015, Mayor Park said in a radio interview, “No more.” He added, “Water from fire hydrants is intended for putting out fires, not peaceful protests.”  A reporter outside the Blue House says protesters can be heard from the Blue House, which has been in a state of emergency since Saturday morning but has not issued an official response to the calls for the president’s resignation.

The Korean Confederation of Trade Unions has vowed a general strike if Park Geun-hye refuses to resign.