The chief, indeed the only, justification that Washington offered for its invasion of Iraq during its build-up for war between September 2002 and March 2003,was the need to “disarm” an Iraqi regime that Washington contended had broken UN resolutions banning weapons of mass destruction in that country. The problem, though, was that there was no hard evidence that Iraq, which had effectively destroyed its weapons of mass destruction in the 1990s under UN supervision, had any such weapons—or if it did that they were functional and constituted a significant threat. Nevertheless, the Bush administration continued to insist (based on speculation, hearsay, and what turned out to be fabricated evidence) that Iraq had such banned weapons in significant quantities and was actually deploying them. In an extraordinary propaganda campaign in which the whole mainstream media took part, the U.S. population was led to believe that they were in imminent danger of attack from these phantom weapons and had no choice but to support a pre-emptive invasion of that country | more…
If we learn nothing else from the war on Iraq and its subsequent occupation, it is that the U.S. ruling class has learned to make ideological warfare as important to its operations as military and economic warfare. A crucial component of this ideological war has been the campaign against “left-wing media bias,” with the objective of reducing or eliminating the prospect that mainstream U.S. journalism might be at all critical toward elite interests or the system set up to serve those interests. In 2001 and 2002, no less than three books purporting to demonstrate the media’s leftward tilt rested high atop the bestseller list. Such charges have already influenced media content, pushing journalists to be less critical of right-wing politics. The result has been to reinforce the corporate and rightist bias already built into the media system. | more…
Only a few years ago it was widely suggested that the capitalist economy had entered a new economic era. The rapid economic growth experienced during the brief period of the late 1990s, we were told, would become virtually endless, spurred on by rising productivity led by high technology and the New Economy. The circumstances that now confront us following the bursting of the speculative bubble could not be more different. The country is once again mired in economic stagnation. In the present “recovery”—if indeed we can call it that—new jobs remain few and far between. Of the four sources of demand that create economic activity—personal consumption, business investment, government spending, and net exports—it is mainly consumption, backed by increasing debt, that is currently keeping the economy from slipping deeper into stagnation. Indeed, many business leaders and economists fear the return of recession—referred to as the likelihood of a “double dip.” Behind this fear lies excess capacity in almost every industry, the absence of new growth stimuli, slow growth or recession in most of the rest of the world, and the aftereffects of the bursting of the speculative stock market bubble. All of this suggests that there is more at stake than the traditional business cycle. At the very least, there is reason to expect the continuation of the tendency of stagnation. | more…
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…
Jonathan Nitzan and Shimshon Bichler, The Global Political Economy of Israel (London and Sterling, Virginia: Pluto Press, 2002), 407 pages, cloth $75.00, paper $24.95.
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…
