The road trip is a staple of modern American literature. But nowhere in American literature, until now, has an economist hit the road, observing and interpreting the extraordinary range and spectacle of U.S. life, bringing out its conflicts and contradictions with humor and insight. | more…
In the 1920s Andrew Mellon, who served as secretary of the treasury under Presidents Harding, Coolidge, and Hoover (it was sometimes said that they served under him), introduced a series of gargantuan tax cuts culminating in what was known as the Mellon Plan. This consisted of a huge cut in the income tax rates of the rich along with reductions in other taxes paid by the wealthy. High income tax rates, Mellon claimed, “tend to destroy individual initiative and enterprise and seriously impede the development of productive enterprise.” When Mellon’s foes, such as the great Progressive Senator Robert La Follette, declared that Mellon was trying to “let wealth escape” its fair share of taxation, he sought to turn the tables on them by charging that they were engaging in class warfare. “The man who seeks to perpetuate prejudice and class hatred,” the treasury secretary stated, “is doing America an ill service. In attempting to promote or defeat legislation by arraying one class of taxpayers against another, he shows a complete misconception of the principles of equality on which the country was founded” | more…
For a long time now it has been widely understood within economics that under the capitalism of giant firms, corporations no longer compete primarily through price competition. They engage instead in what economists call “monopolistic competition.” This consists chiefly of attempts to create monopoly positions for a particular brand, making it possible for corporations to charge more for the branded product while also expanding their market share. Competition is most intense in what Thorstein Veblen called the “production of salable appearances,” involving advertising, frequent model changes, branding of products, and the like. Once this logic takes over in twentieth and now twenty-first century capitalism it is seemingly unstoppable. All human needs, relationships and fears, the deepest recesses of the human psyche, become mere means for the expansion of the commodity universe under the force of modem marketing. With the rise to prominence of modem marketing, commercialism—the translation of human relations into commodity relations—although a phenomenon intrinsic to capitalism, has expanded exponentially. | more…
A key feature of neoliberal economic policies in both poor and rich nations is the mania for the privatization of socially-owned assets and services. The shift from publicly to privately-produced goods and services is designed to phase out public programs and to repudiate governmental responsibility for social welfare. Socially-owned land, infrastructure, and enterprises are to be sold to private investors. Or, in a less direct approach, advocated commonly in the United States, there is partial privatization. Instead of directly producing public services (such as highway construction and education), the state finances their provision either by purchasing the services from private vendors (contracting out), or else by providing vouchers to individuals, agencies, or corporations to purchase the services. Although the two forms of privatization are not the same, privatizers of all stripes have always made it clear that their ultimate goal is to eliminate the base of political support for government spending for social purposes | more…
“The American health care system is confronting a crisis.” This was the not very surprising conclusion of a study by a National Academy of Science panel on the U.S. health care system, carried out at the request of the administration and released in November 2002 www.nap.edu/books/0309087074/html. The report, entitled Fostering Rapid Advances in Health Care, describes conditions that are little short of horrendous. Health care costs are increasing at an annual rate in excess of 12 percent. The insured are receiving far fewer benefits while paying much more in out-of-pocket expenses. States in fiscal trouble are cutting benefits for Medicaid and other health programs. The number of uninsured has climbed to 41.2 million or 14.5 percent of the U.S. population. This means that one in seven individuals in the United States lacks any health care coverage whatsoever, and many more have inadequate coverage. A quarter of U.S. children aged to nineteen to thirty-five months are deficient in immunizations. Tens of thousands of individuals die every year from medical errors and many more than that from injuries caused by the health system | more…
The dramatic expansion of intellectual property rights represents a new stage in commodification that threatens to make virtually every- thing bad about capitalism even worse. Stronger intellectual property rights will reinforce class differences, undermine science and technology, speed up the corporatization of the university, inundate society in legal disputes, and reduce personal freedoms. | more…
One of the characteristics of much academic writing is an obsession with theory at the expense of empirical investigation. It is rare to find a book that combines genuinely novel theoretical exploration with rigorous empirical study, the more so in fields such as political science where abstraction seems to have become the norm. It is for this reason that The Global Political Economy of Israel is such a gripping read. A remarkable investigation into the concrete workings of the Israeli and U.S. economies that avoids the fatuous generalities of much of the globalization literature, it presents a challenging theoretical framework that not only clarifies the past but also seeks to understand the present | more…
Among the major countries of the world, the United States has the highest per capita income, and it is often assumed therefore that the ordinary American is materially better off than his or her counterpart anywhere else in the world. In fact, this proposition is practically taken for granted within U.S. national culture, since it is constantly being drummed into our ears by the media and educational institutions. Yet, as a logical proposition it is simply false. This was recently pointed out by Paul Krugman, a leading mainstream economist and columnist for the New York Times, in an article (“For Richer,” New York Times Magazine, October 20, 2002) dedicated to explaining exactly why this national myth is mistaken. “Life expectancy in the U.S.,” Krugman observes, “is well below that in Canada, Japan and every major nation in Western Europe. On the average, we can expect lives a bit shorter than those of Greeks, a bit longer than those of Portuguese. Male life expectancy is lower in the U.S. than it is in Costa Rica” | more…
Officially Washington’s current policy toward Iraq is to bring about a “regime change”—either through a military coup, or by means of a U.S. invasion, justified as a “preemptive attack” against a rogue state bent on developing and deploying weapons of mass destruction.* But a U.S. invasion, should it take place, would not confine its objectives to mere regime change in Baghdad. The larger goal would be nothing less than the global projection of U.S. power through assertion of American dominance over the entire Middle East. What the world is now facing therefore is the prospect of a major new development in the history of imperialism | more…
Representatives of the established order were unprepared for the mas- sive 1999 demonstrations in Seattle against the World Trade Organziation (WTO) and remain on the defensive in the face of the inter- nationally coordinated actions against neoliberal globalization that have followed. On an ideological level, they have responded by seeking to undermine the legitimacy of antiglobalization activists, especially those in the developed capitalist world, by claiming that these activists oppose the very policies and institutions that are in the best interest of the poor in the third world. One example: the former head of the WTO, Mike Moore, declared that “The people that stand outside and say they work in the interests of the poorest people …they make me want to vomit. Because the poorest people on our planet, they are ones that need us the most.” | more…
John Saul has had an extensive and committed involvement with Southern Africa. His analyses are taken seriously in left circles in South Africa. Sadly, perhaps understandably, his most recent extended visit to this country has left him feeling deeply disappointed (“Cry for the Beloved Country: The Post-Apartheid Denouement,” Monthly Review 52, no. 8, January 2001, pp. 1–51). This sense of disappointment is rooted, I would guess, partly in the intellectual, organizational and even emotional energies that Saul, like many others, invested in the solidarity struggle against apartheid, and in legitimate expectations for a post-apartheid South Africa. There is also, and I want to underline my own empathy with his irritation on this score, a hint of personal hurt: “The most startling thing I personally discovered about the New South Africa is just how easy it has become to find oneself considered an ultraleftist!” (p. 1) This sense of disappointment, even of betrayal, is also present in many progressive circles within South Africa, and indeed among many cadres of our movement. Despite all of this there is, I believe, something seriously off-beam in Saul’s analysis | more…
It is interesting that, on one of the two main fronts of inquiry opened up in my original essay, Jeremy Cronin professes—despite the wounded tone he adopts throughout and for all his talk about my “frozen penultimates,” “sneers,” and “derision”—to be in considerable agreement with me. This concerns my reading of the overall trajectory of socioeconomic policy that the African National Congress (ANC) government has adopted since 1994. As he puts the point, “Saul goes on to argue that the ANC liberation front has erred seriously on two critical fronts—the choice of economic policies, and the relative demobilization of our mass constituency (except during electoral campaigns). I agree with Saul on both counts.” Indeed, he adds, “I agree substantially with the broad analysis of the last twelve years or so in South Africa that Saul makes in his pessimism of the intellect mode,” including, it would appear, my criticisms of the “government’s macroeconomic policy (the Growth Employment and Redistribution framework—GEAR), privatization policies, excessive liberalization measures, the failure to mobilize our mass base, or concerns about the growing bureaucratization and the influence of an emerging black bourgeois stratum on policy” | more…