A Critique of P3's From The Right

As regular readers will know I have been critical of P3's, public private partnerships, from the Left. Now here is an interesting critique of them from the Liberaltarians around the Von Mises (pronounced by Sylvester as von meeses) Institute.

Unfortunately the author misses the point that it was the neo-cons who promoted the Reinvention of Government the liberaltarian ideal of getting the State out of business and business to take up the slack of the state, in other words his arguement is upside down. In fact it is the folks at Von Mises and others like the CATO and Fraser Institutes that promote the so called free market ideology that promote P3's.

His critique of sustainable development suffers from a similar misunderstanding of the political economy of the neo-liberal state. The State has been run by the neo-cons for more than twenty years and sustainable development is their way of creating a Greener capitalism without actually investing in industrial ecology or social ecology.

Once again the Liberaltarians fail to understand the simple fact that the State is a manifestation of Capitalism. In their efforts to create a mythology of a pure and simple capitalism, they view the State as somehow apart and separate from its birthmother, modern capitalism. It is not the State that hinders capitalism, on the contrary it is the State which abets and promotes capitalism. Their argument is based upon a percieved American exceptionalism and thus remains a-historical and a flight of fantasy.

While their key argument that big business and its state hinder markets, competition, free association remain cogent, it not a question of either or but rather the elimination of both. See: Libertarian Dialectics

Public-Private Partnerships, The Undermining of Free Enterprise, and the Emergence of “Soft Fascism”

There are now thousands of public-private partnerships in place throughout the country, engaging in activities ranging from building roads and neighborhoods to providing waterand wastewater services to renovating government schools to overseeing the management
of real estate to providing health care. This number seems destined to grow in theimmediate future.

It is fair to say that public-private partnerships have been accepted
without question by the ‘mainstream’ of both government and business. This is because a new ‘paradigm’ for the relationship between the two has emerged, verygradually, over the past few decades. This ‘paradigm,’ of course, is that of sustainable development, which combines the power of the purse, one might call it, with the power of
the sword. The resources of business (the power of the purse) are utilized to do the work of “governance” (the power of the sword)—with the former’s full cooperation and support.

The reports we cited noted several examples of what appear to all intents and purposes to be successful public-private partnerships—successful, that is, in achieving the ends wanted within government.

Expansionist or interventionist government—the idea that government should undertake responsibility for managing huge portions of a country’s economy and infrastructure—is taken for granted, but limits on the capacity of government to effect change by itself are acknowledged. The solution to the problem of the limits on the capacity of government, in the new paradigm, is to employ the resources of business, in a way that brings business fully on board and enlists it as collaborator—or partner.

Of course, the larger the business the better, because bigger businesses tend to have deeper pocketbooks than smaller businesses. The critics of public-private partnerships usually cited in the favorable literature are not those who do not trust government but those who do not trust business.

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Jared Polis mocks Libertarians after they say they won’t run candidates if ‘liberty minded’ Republican is on Colorado ballot

Sara Wilson, Colorado Newsline
June 14, 2023,

Jared Polis (Screenshot)

The Libertarian Party of Colorado said it will not run candidates in future competitive races that have “strong liberty minded” Republican candidates, the two parties announced Tuesday.

“We are calling upon the Republican Party to take our goals and objectives into serious consideration and run strong liberty minded, anti-establishment candidates going forward. If the Republican party runs candidates who support individual liberties, we will not run competing candidates in those races,” Libertarian chairperson Hannah Goodman wrote in a letter to the Colorado GOP, adding that the party reserves the right to run candidates if there isn’t a “strong Liberty” option.

Goodman did not offer a definition of what such a candidate specifically supports.

In some races, a right-leaning, third-party candidate could act as a spoiler, winning a higher vote share than the margin of victory and affecting which major party candidate wins.

“The Libertarian Party of Colorado is a third party. But we are the third biggest political party in the country. And while our candidates do not win the majority of elections in which we participate, our candidates have an impact on the outcome of these elections,” Goodman wrote.

Republicans point to the victory of Democratic Rep. Yadira Caraveo over Republican State Sen. Barbara Kirkmeyer for Colorado’s new 8th Congressional District last year. Caraveo got 48.4% of the vote, while Kirkmeyer received 47.7% of the vote. A Libertarian candidate, Richard Ward, walked away with 3.9% of the vote, leading some to argue that Kirkmeyer could have won if he wasn’t running.

It’s not certain, however, that all of Ward’s voters would have turned out for Kirkmeyer if he wasn’t on the ballot. The Libertarian emphasis on smaller government, however, does align with historical Republican values.

Goodman and her vice chair, Eliseo Gonzalez, wrote that the state’s “uniparty rule” under Democrats creates a lack of checks and balances on the government.

Democrats swept Colorado’s elections in 2022, winning every statewide office, five of the eight congressional district seats, and increasing their majority in the General Assembly.

The Colorado GOP, which is chaired by former state Rep. Dave Williams, tweeted that “if (we) run more limited-government & pro-liberty nominees (the Libertarians) won’t run spoiler candidates. Together we can break the stranglehold of Democrats’ one-party rule over Colorado.” Williams did not reply to a request for comment.

OF COURSE ONE PARTY RULE IS OK WITH THE GOP AS LONG AS IT'S THE GOP

“The Libertarians will only stand down if we recruit and nominate candidates who are more pro-freedom than not. They are not looking for the perfect candidate but they are making clear that our Party needs more nominees who will fight for limited-government in Denver and Washington D.C.,” Williams wrote in an email to supporters.

There are about 40,000 active, registered Libertarians in Colorado, making up about 1% of the active voter population, according to May data from the secretary of state’s office.

Colorado Gov. Jared Polis, a Democrat, mocked the tentative agreement between Libertarians and Republicans from his personal Twitter account.

“And if you run more pro-liberty candidates who support a woman’s right to choose, the freedom to marry who you love, reducing the income tax, private property rights to build housing on your own land, and legal Cannabis and Psilocybin small businesses then… maybe you can start calling your nominees Democrats,” he wrote.

LA REVUE GAUCHE - Left Comment: Search results for LIBERALTARIANS 

Colorado Democratic Party Chairman Shad Murib wrote in a text that spoiler candidates are not the roadblock to Republican victory.

“The Colorado Republican Party’s problem is not Libertarians spoiling elections for them – their problem is that their platform is opposed by the vast majority of Colorado voters. If their path to victory is to embrace folks who are even more extreme than then, I’d remind them that two wrongs don’t make a right,” he wrote.

Colorado Newsline is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Colorado Newsline maintains editorial independence. Contact Editor Quentin Young for questions: info@coloradonewsline.com. Follow Colorado Newsline on Facebook and Twitter.

China Burps Greenspan Farts Dow Hiccups

File this under; loose lips sink ships.

On Monday, Greenspan said a recession was possible, though it's difficult to predict the timing, a comment blamed in part for the global market decline this week.

Greenspaned the works. He actually speculated that America may be facing a recession. But now noticing the stink in the room he is waving his hand behind his butt to clear the air.US slump possible, not probable-Greenspan quoted

Then the Chinese government which is still unfamiliar with the operations of capitalism speculated on capital gains taxes, and the Chinese stock market listened, and crashed.

One does not speculate out loud about such things when you have a stock market. The market responds as it did to Greenspan's comments. Sighs for the good old days were heard through out the Chinese hierarchy.

But why the panicked selling in China? It certainly wasn't because of anything Greenspan said. Most news reports are declaring that it was the result of rumors about potential policy initiatives that the Chinese leadership might soon enact to cool off an economy that is growing too fast. Whether Premier Wen Jiabao is about to announce interest rate hikes or a capital gains tax is impossible to say, but what we do know is that the leadership is very concerned with attempting to rein in China's reckless growth. And that's probably a good thing for everyone.

So when Shanghai sneezes, the world's markets catch the bird flu? True or not, the fact that this story is even being told is testament to how far and how fast China has come. It's instructive to think back 10 years, to the Asian financial crisis of 1997. China managed to keep itself relatively immune from the devastation that ransacked its neighbors, in part because of its iron grip on its own currency, and possibly because it was less well integrated into the global economy than the rest of the region. Ten years later, it's China that's shaking up the status quo, with a little help from the United States. From that vantage point, the fact that on Wednesday the Shanghai stock exchange, so far, is keeping its cool could well be the single most significant data point in all the market madness racing around the globe over the past 24 hours.

The reality is that in 1997 China had NO international stock market and did not yet own the ultimate capitalist safe haven; Hong Kong. So the Yaun was protected by the Chinese and their stock market, being internal, did not suffer the meltdown the rest of the world did.

In this case China came of age, and created a global meltdown on what was a local event.

Pick a stock market, any market in our globalised, homogenised, sterilised, aneasthetised, dumbed down, interconnected ever shrinking globe... and it tanked.
But the original epicentre was somewhere new...that emerging sleeping giant that even Napoleon worried fleetingly about...China. Shanghai’s A share index – ie for Chinese investors only - slumped 9%.

Today it is a different world and China owns the majority of America's debt. And its stock market is now a world market place despite being a creature of the Chinese State.

China’s stock market had three unique features that made its rapid
development unique and interesting.

First, the government used it largely as a fund raising vehicle for
funding state-owned enterprises
Second, China’s stock market developed under a repressed financial
regime. Financial repression was created through a combination
of capital controls on international capital flows and administrative
measures imposed by the central government to dampen potential
competition among different financial assets (e.g., bank deposits, enterprise
stocks, enterprise bonds, and various kinds of government
bonds) within the domestic financial sector.5 While the capital controls
helped to prevent capital from flowing out of the country, the
competition-mitigating administrative controls sought to avoid the
driving up of returns on various financial assets and thus to allow the
government to maintain a source of cheap capital for financing SOEs’
investments.
Third, China’s stock market was developed under a weak legal
framework that offered shareholders little protection. On the widely
used indicators for shareholder rights protection developed by La
Porta et al. (1998), China scored 3, compared with the average score
of 3.61 for all other transitional economies.
The actual protection for shareholders in China, however, is lower
than what the index suggests because of the weak legal enforcement
in China. The development of China’s stock market therefore
presents a puzzling case for economists and financial analysts who
hold that legal shareholder protection is a prerequisite for the development
of a functioning capital market

So the result was a crash heard around the world. The reason is three fold, China burped, Greenspan farted and America had lower than expected trade income (from durable goods) thus they owed the Chinese even more money.

What happened Tuesday was a confluence of events, something of a "perfect storm," each of which precipitated pent-up doubts. There was the decline overnight of 9.2 percent in the Chinese stock market, in which U.S. investors purchased $5.2 billion in equities in 2006. Then there was a decline in orders for durable goods and Mr. Greenspan's comments.

Correction or Crash is the question on everyones lips this morning on day three of the crumbling of stock markets world wide. It's a crash. Just not a 1929 crash. Heck it isn't even a 1987 crash. Nor a 1997 meltdown. It's a hiccup the stock markets world wide are a thousand times higher than 1929, and in 1987 the stock market was only at 5000. Today it is over 12,000 in North America and around the world. But a crash none the less.

That was the ultimate Perfect Storm, as the 1987 crash proved. In 1987 the crash was as severe as it was in '29 but the impact was the clearing out of junk bonds, as it had been in '29 a clearing out of Mutual Funds, and other get rich quick schemes, and companies that collapsed were quickly bought up by those cash rich, which did not occur in '29.

The 1987 market crash, which greeted Greenspan just two months into his term and drained the stock markets of nearly one-quarter of their value in a single day, was widely thought at the time to be a precursor of recession. But the Fed chairman, beginning to establish his reputation for working miracles, avoided the inevitable by guaranteeing to pump enough money into the economy to keep anyone from going broke for lack of cash.

What folks forget in bull markets and boom economies, such as we have seen for the past twenty years is that crashes become cycles, called corrections by optimists, but the business cycle of the early 20th century are no longer as damaging to capitalist society as they were in 1929. Thanks to Keynes. Notice that even an Ayn Randist like Greenspan is not adverse to priming the pump to protect the Stock Market.

There was no priming the pump for the 1929 Wall Street Crash, as Keynes noted at the time. As Galbraith writes in his history of the Great Depression.

Galbraith writes with great wit and erudition about the perilous actions of investors and the curious inaction of the government. He notes that the problem wasn't a scarcity of securities to buy and sell: "The ingenuity and zeal with which companies were devised in which securities might be sold was as remarkable as anything." Those words become strikingly relevant in light of revenue-negative start-up companies coming into the market each week in the 1990s, along with fragmented pieces of established companies, like real estate and bottling plants. Of course, the 1920s were different from the 1990s. There was no safety net below citizens, no unemployment insurance or Social Security. And today we don't have the creepy investment trusts--in which shares of companies that held some stocks and bonds were sold for several times the assets' market value.

In 1929 Joe and Jane America were invested in the stock market for the first time through Mutual Funds, which were the junk bonds of their day. Workers , small businessmen, seniors, all could afford to invest in stocks. Gone were the days of the Robber Barons dominating the sanctuary of Wall Street.

Like insurance companies of the time, Mutual Funds and other stock market options were being peddled to the working class. For the first time ever in the boom economy of the Post War 1920's workers were secure in their jobs and could afford homes, cars, and yest putting a little aside for retirement either through insurance, bank savings, saving and loans mortgages or through stocks and mutual funds.

The perfect storm was the complete collapse of market capitalism, one that had no social safety net. Workers lost homes, business collapsed and the state called for chickens in every pot but provided no jobs. The chickens came home to roost for the free marketeers,their ideology was laughed at as irrelevant in light of historical facts of the crash and empirical fact's behind it. The U.S. market never recovered until the space age.

Over the long run, a European investing on Wall Street might do fairly well. But what if he had invested in the late ’20s, when America’s promise and success seemed most inevitable? Just ask the Ghost of ‘29. If he had invested his money just before the crash, he would have had to wait until ‘56 to break even! That is, he would have had to hold on through a Great Depression…another major world war…and practically until the end of the Eisenhower administration - a period of 27 years! After that, he would have enjoyed a good 10 years of capital growth - and then another setback.

Like today many folks are invested in the Stock Market, but mainly through their retirement savings, thus the impact on real cash, real value is softened. State capitalism saves the day, meaning crashes are reduced to corrections, the business cycle levels off instead of being a desperate spiral to Depression, and all is well with the world. Thus this weeks downward spiral is a hiccup instead of a stroke.

And while Rothbard would deny Keynes or Galbraiths solutions were valid, which history proved they were, his work on the Great Depression also shows that the much vaunted Free Market failed because it was dominated by criminal capitalists trying to make a fast buck. Something the right wing liberaltarians never consider in their free market mythology. But which is the reason for all such meltdowns in the marketplace as Enron showed.

The ability to now regain from a crash is part of the checks and balances of the stock markets, whether through state regulations, investor funding or computerization. And thus the need to continually keep armed, to have little wars world wide, are now part of the business cycle as well. Gone are the days when rearmament could save the market, today it is key to the well being of the market place.

The bull market effectively came to an end on September 3, 1929, immediately the shrewder operators returned from vacation and looked hard at the underlying figures. Later rises were merely hiccups in a steady downward trend. On Monday October 9, for the first time, the ticker tape could not keep pace with the news of falls and never caught up. Margin calls had begun to go out by telegram the Saturday before, and by the beginning of the week speculators began to realize they might lose their savings and even their homes. On Thursday, October 12, shares dropped vertically with no one buying, and speculators were sold out as they failed to respond to margin calls. Then came Black Tuesday, October 19, and the first selling of sound stocks to raise desperately needed liquidity.

So far all was explicable and might easily have been predicted. This particular stock market corrective was bound to be severe because of the unprecedented amount of speculation which Wall Street rules then permitted. In 1929 1,548,707 customers had accounts with America's 29 stock exchanges. In a population of 120 million, nearly 30 million families had an active association with the market, and a million investors could be called speculators. Moreover, of these nearly two-thirds, or 600,000, were trading on margin; that is, on funds they either did not possess or could not easily produce.

The danger of this growth in margin trading was compounded by the mushrooming of investment trusts which marked the last phase of the bull market. Traditionally, stocks were valued at about ten times earnings. With high margin trading, earnings on shares, only one or two percent, were far less than the eight to ten percent interest on loans used to buy them. This meant that any profits were in capital gains alone. Thus, Radio Corporation of America, which had never paid a dividend at all, went from 85 to 410 points in 1928. By 1929, some stocks were selling at 50 times earnings. A market boom based entirely on capital gains is merely a form of pyramid selling. By the end of 1928 the new investment trusts were coming onto the market at the rate of one a day, and virtually all were archetype inverted pyramids. They had "high leverage"—a new term in 1929—through their own supposedly shrewd investments, and secured phenomenal stock exchange growth on the basis of a very small plinth of real growth. United Founders Corporation, for instance, had been created by a bankruptcy with an investment of $500, and by 1929 its nominal resources, which determined its share price, were listed as $686,165,000. Another investment trust had a market value of over a billion dollars, but its chief asset was an electric company which in 1921 had been worth only $6 million. These crazy trusts, whose assets were almost entirely dubious paper, gave the boom an additional superstructure of pure speculation, and once the market broke, the "high leverage" worked in reverse.

Hence, awakening from the pipe dream was bound to be painful, and it is not surprising that by the end of the day on October 24, eleven men well-known on Wall Street had committed suicide. The immediate panic subsided on November 13, at which point the index had fallen from 452 to 224. That was indeed a severe correction but it has to be remembered that in December 1928 the index had been 245, only 21 points higher. Business and stock exchange downturns serve essential economic purposes. They have to be sharp, but they need not be long because they are self-adjusting. All they require on the part of the government, the business community, and the public is patience. The 1920 recession had adjusted itself within a year. There was no reason why the 1929 recession should have taken longer, for the American economy was fundamentally sound. If the recession had been allowed to adjust itself, as it would have done by the end of 1930 on any earlier analogy, confidence would have returned and the world slump need never have occurred.

Instead, the stock market became an engine of doom, carrying to destruction the entire nation and, in its wake, the world. By July 8, 1932, New York Times industrials had fallen from 224 at the end of the initial panic to 58. U.S. Steel, the world's biggest and most efficient steel-maker, which had been 262 points before the market broke in 1929, was now only 22. General Motors, already one of the best-run and most successful manufacturing groups in the world, had fallen from 73 to 8. These calamitous falls were gradually reflected in the real economy. Industrial production, which had been 114 in August 1929, was 54 by March 1933, a fall of more than half, while manufactured durables fell by 77 percent, nearly four-fifths. Business construction fell from $8.7 billion in 1929 to only $1.4 billion in 1933.

Unemployment rose over the same period from a mere 3.2 percent to 24.9 percent in 1933, and 26.7 percent the following year. At one point, 34 million men, women, and children were without any income at all, and this figure excluded farm families who were also desperately hit. City revenues collapsed, schools and universities shut or went bankrupt, and malnutrition leapt to 20 percent, something that had never happened before in United States history—even in the harsh early days of settlement.

This pattern was repeated all over the industrial world. It was the worst slump in history, and the most protracted. Indeed there was no natural recovery. France, for instance, did not get back to its 1929 level of industrial production until the mid-1950s. The world economy, insofar as it was saved at all, was saved by war, or its preparations. The first major economy to revitalize itself was Germany's, which with the advent of Hitler's Nazi regime in January, 1933, embarked on an immediate rearmament program. Within a year, Germany had full employment. None of the others fared so well. Britain began to rearm in 1937, and thereafter unemployment fell gradually, though it was still at historically high levels when war broke out on September 3, 1939. That was the date on which Wall Street, anticipating lucrative arms sales and eventually U.S. participation in the war, at last returned to 1929 prices.

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Edward Gibbon Wakefield

In searching for a pithy definition of Fete Accompli I came across this in Wikipedia.

Like Stephen Harper here is another Tory politician Quebecers liked; Edward Gibbon Wakefield.

But unlike Harper his motto was; if elected I will not serve. Which meant they liked him a lot.

While active with the New Zealand Company, Edward Gibbon had maintained his interest in Canadian affairs. He was involved with the North American Colonial Association of Ireland, NACAI. At his instigation, the NACAI were trying to purchase a large estate just outside Montreal where they wanted to establish another Colonial settlement. Edward Gibbon pushed the scheme with his usual energy; apparently, the government did not object in principle but they strenuously objected to Edward Gibbon having any part of it.

But trusted or not by the politicians, Edward Gibbon was involved in the scheme. The NACAI sent him back to Canada as their representative; he arrived in Montreal in January of 1842 and stayed in Canada for about a year. At this stage , Canada was still coming to terms with the union of Upper and Lower Canada. There were serious differences between the French and English Canadians with the English Canadians holding the political clout. Edward Gibbon skillfully manipulated these differences; it was fairly easy for him to get the support of the French Canadians. By the end of that year he had got himself elected to the Canadian Parliament. It is perhaps typical of Edward Gibbon that, having been elected, he immediately returned to Britain and never took up his seat.

He went back to Canada in 1843 and spent some months there. However when he heard of his brother Arthur's death at the Wairau Affray, he immediately quit Canada and never returned. This appears to be the end of his involvement with Canadian affairs except that he was paid about twenty thousand pounds by the NACAI for his work in Canada. As always with Edward Gibbon, principles and profit seemed to go neatly together.

Edward Gibbon Wakefield was a scoundrel and a cad, a free land advocate, a realitor , opposed to the British Mercantile State Monopoly, and thus he was not trusted by them. Despite being in business with them in forming colonies as their real estate agent.

Competing schemes of colonial emigration with different implications for equality were promoted to create more consumers of British manufactured goods and producers of food. Edward Gibbon Wakefield’s plans were designed to recreate in British North America the inequalities associated with labour’s divorce from capital as necessary for social and economic development, but others sought the same end by means of the greater social equality that came from reuniting labour with capital. The poor and dispossessed in Britain who produced and consumed little could be transformed into agrarian property-holders in colonial societies dominated by such petty producers. A degree of inequality would persist, but the resulting colonial societies were far more egalitarian and therefore socially and politically democratic than Britain itself. In such a social context, nineteenth-century liberalism—its celebration of independence and equation of individual economic success with virtue—seemed especially plausible to contemporaries.

Herr Doctor Professor Karl Marx outlines the origin of American Libertarianism, that shocked Wakefield; its exceptionalism as a free soil political economy, not a capitalist one. America was a truly free market economy as long as land was held as a public trust for private use.

As a commercial colonizer Wakefield was shocked his experiment had failed. It had not created a capitalist colony bound to the Mother Country, rather it had given free men, free land. But then again he was an idle speculator, a salesman of colonies for his masters.

And so in desperation as Marx points out Wakefield offers his masters a solution to end the free labour republic, taxation, expropriation of the land by the State and then selling it back to free men at such a high cost they have to become wage slaves instead of independent landowning producers.

This then is the secret of the political economy of Capitalism. That it must destroy the real free market by imposition of Statist taxation for capital accumulation. America as a colonial experiment had evolved into a Republic of Free Labour and Free Soil, something that most American Libertarians acknowledge as their exceptionalism. But this was too much for Old World capitalism and it needed a State that would tax property and then sell it off to the highest bidder. That as Marx says and they would concur;

that the capitalist mode of production and accumulation, and therefore capitalist private property, have for their fundamental condition the annihilation of self-earned private property; in other words, the expropriation of the laborer.

While vulgar liberaltarians leave out the capitalist and simply decry the State and Taxation as the villains genuine American descendants of the libertarian independent producers would embrace instead the ideal of the cooperative commonwealth as a way of challenging the State and its taxation of their 'public property'.

It is ironic that Marx who is assaulted as a statist by the right would embrace the libertarian ideal that the truly independent producer is also the owner of his own property, that is land. But as Marx says the secret to this form of private property is its communal ownership as public property of the producers.

• A View of the Art of Colonization by Edward Gibbon Wakefield, 1849.

• The Modern Theory of Colonisation last chapter in Karl Marx's Capital, Vol I focused on Wakefield's theory.

It is the great merit of E.G. Wakefield to have discovered, not anything new about the Colonies, but to have discovered in the Colonies the truth as to the conditions of capitalist production in the mother country. As the system of protection at its origin attempted to manufacture capitalists artificially in the mother-country, so Wakefield’s colonization theory, which England tried for a time to enforce by Acts of Parliament, attempted to effect the manufacture of wage-workers in the Colonies. This he calls “systematic colonization.” First of all, Wakefield discovered that in the Colonies, property in money, means of subsistence, machines, and other means of production, does not as yet stamp a man as a capitalist if there be wanting the correlative — the wage-worker, the other man who is compelled to sell himself of his own free-will. He discovered that capital is not a thing, but a social relation between persons, established by the instrumentality of things.

“If,” says Wakefield, “all members of the society are supposed to possess equal portions of capital... no man would have a motive for accumulating more capital than he could use with his own hands. This is to some extent the case in new American settlements, where a passion for owning land prevents the existence of a class of laborers for hire.” So long, therefore, as the laborer can accumulate for himself — and this he can do so long as he remains possessor of his means of production — capitalist accumulation and the capitalistic mode of production are impossible. The class of wage-laborers, essential to these, is wanting.

We have seen that the expropriation of the mass of the people from the soil forms the basis of the capitalist mode of production. The essence of a free colony, on the contrary, consists in this — that the bulk of the soil is still public property, and every settler on it therefore can turn part of it into his private property and individual means of production, without hindering the later settlers in the same operation. This is the secret both of the prosperity of the colonies and of their inveterate vice — opposition to the establishment of capital. “Where land is very cheap and all men are free, where every one who so pleases can easily obtain a piece of land for himself, not only is labor very dear, as respects the laborer’s share of the produce, but the difficulty is to obtain combined labor at any price.”

As in the colonies the separation of the laborer from the conditions of labor and their root, the soil, does not exist, or only sporadically, or on too limited a scale, so neither does the separation of agriculture from industry exist, not the destruction of the household industry of the peasantry. Whence then is to come the internal market for capital? “No part of the population of America is exclusively agricultural, excepting slaves and their employers who combine capital and labor in particular works. Free Americans, who cultivate the soil, follow many other occupations. Some portion of the furniture and tools which they use is commonly made by themselves. They frequently build their own houses, and carry to market, at whatever distance, the produce of their own industry. They are spinners and weavers; they make soap and candles, as well as, in many cases, shoes and clothes for their own use. In America the cultivation of land is often the secondary pursuit of a blacksmith, a miller or a shopkeeper.” With such queer people as these, where is the “field of abstinence” for the capitalists?

But in the colonies, this pretty fancy is torn asunder. The absolute population here increases much more quickly than in the mother-country, because many laborers enter this world as ready-made adults, and yet the labor-market is always understocked. The law of supply and demand of labor falls to pieces. On the one hand, the old world constantly throws in capital, thirsting after exploitation and “abstinence”; on the other, the regular reproduction of the wage-laborer as wage-laborer comes into collision with impediments the most impertinent and in part invincible. What becomes of the production of wage-laborers into independent producers, who work for themselves instead of for capital, and enrich themselves instead of the capitalist gentry, reacts in its turn very perversely on the conditions of the labor-market. Not only does the degree of exploitation of the wage-laborer remain indecently low. The wage-laborer loses into the bargain, along with the relation of dependence, also the sentiment of dependence on the abstemious capitalist. Hence all the inconveniences that our E. G. Wakefield pictures so doughtily, so eloquently, so pathetically. The supply of wage-labor, he complains, is neither constant, nor regular, nor sufficient. “The supply of labor is always not only small but uncertain.” “Though the produce divided between the capitalist and the laborer be large, the laborer takes so great a share that he soon becomes a capitalist.... Few, even those whose lives are unusually long, can accumulate great masses of wealth.” The laborers most distinctly decline to allow the capitalist to abstain from the payment of the greater part of their labor. It avails him nothing, is he is so cunning as to import from Europe, with his own capital, his own wage-workers. They soon “cease... to be laborers for hire; they... become independent landowners, if not competitors with their former masters in the labor-market.” Think of the horror! The excellent capitalist has imported bodily from Europe, with his own good money, his own competitors! The end of the world has come! No wonder Wakefield laments the absence of all dependence and of all sentiment of dependence on the part of the wage-workers in the colonies. On account of the high wages, says his disciple, Merivale, there is in the colonies “the urgent desire for cheaper and more subservient laborers — for a class to whom the capitalist might dictate terms, instead of being dictated to by them.... In ancient civilized countries the laborer, though free, is by a law of Nature dependent on capitalists; in colonies this dependence must be created by artificial means.”

What is now, according to Wakefield, the consequence of this unfortunate state of things in the colonies? A “barbarising tendency of dispersion” of producers and national wealth. The parcelling-out of the means of production among innumerable owners, working on their own account, annihilates, along with the centralization of capital, all the foundation of combined labor. Every long-winded undertaking, extending over several years and demanding outlay of fixed capital, is prevented from being carried out. In Europe, capital invests without hesitating a moment, for the working-class constitutes its living appurtennce, always in excess, always at disposal. But in the colonies! Wakefield tells and extremely doleful anecdote. He was talking with some capitalists of Canada and the state of New York, where the immigrant wave often becomes stagnant and deposits a sediment of “supernumerary” laborers. “Our capital,” says one of the characters in the melodrama, "was ready for many operations which require a considerable period of time for their completion; but we could not begin such operations with labor which, we knew, would soon leave us. If we had been sure of retraining the labor of such emigrants, we should have been glad to have engaged it at once, and for a high price: and we should have engaged it, even though we had been sure it would leave us, provided we had been sure of a fresh supply whenever we might need it.”

After Wakefield has constructed the English capitalist agriculture and its “combined” labor with the scattered cultivation of American peasants, he unwittingly gives us a glimpse at the reverse of the medal. He depicts the mass of the American people as well-to-do, independent, enterprising, and comparatively cultured, whilst “the English agricultural laborer is miserable wretch, a pauper.... In what country, except North America and some new colonies, do the wages of free labor employed in agriculture much exceed a bare subsistence for the laborer? ... Undoubtedly , farm-horses in England, being a valuable property, are better fed than English peasants.” But, never mind, national wealth is, once again, by its very nature, identical with misery of the people.

How, then, to heal the anti-capitalistic cancer of the colonies? If men were willing, at a blow, to turn all the soil from public into private property, they would destroy certainly the root of the evil, but also — the colonies. The trick is how to kill two birds with one stone. Let the Government put upon the virgin soil an artificial price, independent of the law of supply and demand, a price that compels the immigrant to work a long time for wages before he can earn enough money to buy land, and turn himself into an independent peasant. The fund resulting from the sale of land at a price relatively prohibitory for the wage-workers, this fund of money extorted from the wages of labor by violation of the sacred law of supply and demand, the Government is to employ, on the other hand, in proportion as it grows; to import have-nothings from Europe into the colonies, and thus keep the wage-labor market full for the capitalists. Under these circumstances, tout sera pour le mieux dans le meilleur des mondes possibles. This is the great secret of “systematic colonization.” By this plan, Wakefield cries in triumph, “the supply of labor must be constant and regular, because, first, as no laborer would be able to procure land until he had worked for money, all immigrant laborers, working for a time for wages and in combination, would produce capital for the employment of more laborers; secondly, because every laborer who left off working for wages and became a landowner would, by purchasing land, provide a fund for bringing fresh labor to the colony.” The price of the soil imposed by the State must, of course, be a “sufficient price” — i.e., so high “as to prevent the laborers from becoming independent landowners until others had followed to take their place.” This “sufficient price for the land” is nothing but a euphemistic circumlocution for the ransom which the laborer pays to the capitalist for leave to retire from the wage-labor market to the land. First, he must create for the capitalist “capital,” with which the latter may be able to exploit more laborers; then he must place, at his own expense, a locum tenens [placeholder] on the labor-market, whom the Government forwards across the sea for the benefit of his old master, the capitalist.

However, we are not concerned here with the conditions of the colonies. The only thing that interests us is the secret discovered in the new world by the Political Economy of the old world, and proclaimed on the housetops: that the capitalist mode of production and accumulation, and therefore capitalist private property, have for their fundamental condition the annihilation of self-earned private property; in other words, the expropriation of the laborer.

See:

Jamestown; The Birth of Capitalism

The Era Of The Common Man

1666 The Creation Of The World

The Many Headed Hydra

Libertarian Anti-Imperialism

William Appleman Williams

Libertarian Dialectics

War and the Market State




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Ding Dong Monopoly

Bell Canada known as BCE owner of the Globe and Mail, CTV, Bell mobility, etc. has moved into the income trust business, in order to avoid taxes. The Toronto Star has an interesting take on this Curtain falls on flawed business strategy

Bell had a monopoly in Eastern Canada, built as it was on a contiental basis in the Eastern seaboard of the US and Canada. It never made it out west, due to expense and risk. So instead provincial governments and the City of Edmonton created competing phone systems.

In the case of Emonton Telephones it was a private company which was sold to the city in the early 20th Century. Alex Taylor took advantage of the fact that neither Bell nor Alberta Government Telephones saw fit to build a telephone line to the city. It later was sold to AGT in the ninties, wtoghether they became the privatized Telus, Bells largest competitor.

In order to have competition between monopolies they have to be large enough corporate behemoths to take each other on. Sort of like Gozilla versus Mothra, or the silent dinosaur movies of the twenties. The liberaltarians believe that a mythical state-free market would eliminate monopoly, it is a myth. The inherent drive of capital is to centralize itself and thus to create a state capable of allowing for monopoly and oligopoly. It does not want competition but centralization and collusion.

Telus has gone into creating an income trust fund so flush with capital that it needs to hide it under the bushel of this ponzi tax avoidance mechanism.

Bell on the other hand is bleeding capital, and as the Tor Star article points out going the income trust route is counter intuitive. Instead of investing capital for profit they are divesting themselves of profit in a trust which pays out high income to investors and managers.

Once again the capitalism shows it is not capable of operating an efficient system of production and distribution. Captial and the capitalist is always distracted by the next get rich quick scheme to maximizes it's profit from credit and interest.


See:

Unproductive Capital


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Trade Not Aid Redux

Did you know there are Christians in the Middle East. Why of course you did. But it seems to be forgotten in the propaganda war we experience daily.

Did you know that their are Christians in Palestine. And they are farmers. Did you know that they experience the same repression that their fellow Palestinians do at the hands of the Zionist occupation. Well of course you did.

Now here is an interesting point of view from one of them. A pig farmer whose land is being annexed by Israel and their Berlin Wall. Their bulldozers have destroyed the basic farm economy of the Palestinians. Their security wall and military outposts do not allow Palestinians access to the market. And they have been doing this for years before Hamas took power. So lets not use that as an excuse. The Wall Destroys Palestine's Olives, Farmers and Agriculture

Like their attack on Lebanon their occupation and domination of the Palestinians is as much an economic war as it is a political one. They do not want competition from the Palestian farmers whose lands are fertile and productive. And have been the source of the agriculture exports of both countries since Israel was formed. So they destroy their economic competition and have done so since 1967. Now they are doing it with bulldozers, illegal settlements and the security wall.

Palestinian farmers fear advance of West Bank wall

Fellow farmers in Jayyous, in the region known as the “garden” of the northern West Bank, made a living selling their fruits and vegetables before the wall was built there in 2004. Up to half of the population of 3,500 people now get aid from organisations such as the World Food Programme.

The wall separates the farmers of Jayyous from two-thirds of their land and six water wells, which are now on the Israeli side of the barrier. Two gates that were supposed to allow them access were closed by Israel during harvest times and fruit rotted on the vines.

Mr Sous does not want aid. The Hamas-run Palestinian Authority is under a western aid embargo aimed at moderating the militant group but Mr Sous has no need of aid, so far. “I don’t want to sell my land or leave. I just need to be able to make my living.”

See the farmers don't want Aid they want Trade. This should appeal to the capitalist sensabilities of the the right wing in North America. Any Blogging Tories, neo-cons, liberaltarians or free traders willing to take up their cause? Nope, they would rather critize CUPE for calling for a boycott of the Israeli Aparthied State.

A state which benefits by its monopoly of power over the farmers, their competitors in Palestine. A state which uses the Palestinians as a cheap labour source. A state which isolates them and keeps them imprisoned in occupation zones.

The agricultural sector in Gaza has a significant position within the local society as it supplies food products to the majority of the local population. Moreover, its contribution to the economy of the area is noteworthy as an earner of foreign exchange. Its share of the GDP is about 10 %. About 20 % of the employed labour force in Gaza worked in the agricultural sector in 2004, with many more considered to be active in informal agriculture . Moreover, in times of political-economical difficulties such as the prevailing intifada, the sector is known to absorb large numbers of unemployed people who lost their jobs in Israel or in other local sectors of the shrinking economy (PARC, 2004)Gaza Urban Agriculture Palestine

The resulting destruction of agriculture in the West Bank and Gaza are increasing the desertification of the area. The environmental damage to Palestine is key to the occupation efforts. With the destruction of farmland comes further settlement opportunities and urban construction on occupied territory, which creates an economic boom for real estate and construction companies in Israel.

Since the founding of Israel in 1948 the Zionists have justified this destruction of the farmlands by promoting the myth that the Palestinians are lazy and unproductive. It was because the Palestians were in direct competition with them for agricultural exports and still are.

War is just capitalist competition by another name.

See:

Israel

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Russian Oligarchy

The New Zealand Herald has published a mini bio of the ruling class in Russia. Ruling Class. Not party apparatchiks, not the central committee, though many of them came out of the ruling one party state. The AZ of Russian oligarchs
Contrary to the ideological mythology of the liberaltarians, when state capitalist regimes embrace capitalism they do not become free markets, or markets period. They merely become monopoly capitalism. And the difference between state capitalism and monopoly capitalism (the military industrial complex) is an illusion.


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National ID Card

Yep coming to a government office near you the new Canadian Bio-Metric National ID card. Why cause George Bush says so. U.S. says border passport a must

But our PM and his Peter of course toughed it out with the Americans and now;Border ID cards coming, PM says

Yep tough negotiators those Tories, can't wait till Stockwell Day meets with the Republican Homeland Security folks in the U.S. MacKay makes no headway in slowing controversial border ID plan

Of course no-one will admit that their whole border issue is not about security but good old fashioned Yankee anti-Mexican immigration jingoism. THE PREDATORY ESCALATION OF ‘IMMIGRATION POLICIES’

And while these ID cards will be embraced by those who live on both sides of the Canada US border the likelyhood of them being embraced by folks in North Carolina or Georgia is well zip, nada, zero.

But don't worry the majority of Americans don't travel farther than a few hunderd miles from home. To them thats a big deal. We are dealing with an insular nation of navel gazers, here folks.

America is a nation who in order to keep Mexican and Central American migrants out will impose a National ID card on us. And of course the Security Statist Tories will push it through for their own authoritarian purposes. And they will be supported by the Liberals who already planned for the National ID cards.

So where is the outrage from the right wing Liberaltarians and their ilk at the Blogging Tories?


See:
Migration

Development Versus Population Growth

Free Labour


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Capitalist Environmentalism

The fetish of the market and private ownership that the liberaltarians in the U.S. cite as their solution to the environmental crisis takes a new twist. Environmental terrorism for profit.

Mr. Reumayr, 55, is accused of plotting to blow up the Trans-Alaska Pipeline in a scheme designed to drive up the value of energy futures. His alleged plan was to buy oil, gas and electricity futures that would likely rise in value when oil supplies were disrupted, and then to stage a series of attacks on the pipeline in Alaska and on another pipeline in Canada.
Man loses final bid to stop extradition to US


See: Climate Change

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France: Crisis of the Capitalist State

For my Left Libertarian friends and Liberaltarians who insist that there is some ideal capitalism that has existed without the state, some anarcho-capitalist ideal, the current crisis of capitalism and it's state in France proves once again what I have said here, ad nauseaum, that there is no modern State without Capitalism.

They go together like a horse and carriage as the song says.

Or as Herr Doctor Marx once said; the State is the "executive committee of the ruling class."

Business leaders tell Villepin to stand firm

Another executive who attended the meeting and declined to be identified was less optimistic.

"There was a feeling among many of the participants that if the law is withdrawn you can kiss goodbye to reform for the next 10 years," he said, according to his spokesman. "It would send a terrible signal.".

The businessmen's comments come against a backdrop of escalating social unrest over the First Employment Contract, an initiative known by its French initials as the CPE and closely associated with the prime minister, who drafted the new law in an effort to ease double-digit youth unemployment.

Six weeks after student organizations and labor unions embarked on their campaign to have the new contract scrapped, the latest battle on France's streets goes well beyond the fate of one unpopular law.

It has become a critical test of another French government to carry out economic change and has emboldened an opposition that has rallied around job security ahead of next year's presidential election.

"We are now at a point that is well- known in France: the point at which a reform measure has become a symbol of reform itself," said Elie Cohen, a member of the Council of Economic Analysis, a panel of independent economists advising the prime minister. "This is no longer just about the CPE, it is about the ability to reform France."

As the IWW preamble says; The Employing class and the working class have nothing in common.It's class war in France. France under threat of general strike Less than six months after violent riots erupted across its cities, France is in turmoil again as opposition to a controversial new employment law threatens to shut down the country.


And as we syndicalists say Political Power, parliamentarism, will change nothing. And France as much as America is the home of the revolutionary syndicalism.



It will take the whole of the proletariat, employed and unemployed workers, students, housewives, immigrants, sans papiers, etc. to mobilize direct action, to overthrow the neo-liberal State whether the new bosses are the Left or Right of Capital.

If the executive class of Capitalism in France fails to get what it wants with a Right Wing government well there is always the Left Wing it can appeal to. Which shows that to mobilize itself as class for itself, even the traditional Left must be superceded by the revolutionary proletariat.

Beigbeder, another prominent entrepreneur, said that any future French government - even if it was a Socialist government - would have to attempt labor reform to jump-start economic growth.

"In the end there will be a flexible labor contract in France, even if we are the last in Europe to adopt this kind of reform," said Beigbeder, who also leads the research and innovation arm of the French employers' union, Medef.

Indeed, he said it might take a leftist government to win the fight on labor market reform in France.

"If the left wins," he added, referring to the 2007 elections, "they will present a similar contract, maybe even a better one, because sometimes it's easier for the left to get the support of the unions and others from the left."

So far, business has been slow to take a public stance on the contract, fearing that this could create an even-greater backlash against a law regarded by many as a charter for exploiting young employees.

As I have said this is a revolutionary situation in France, not unlike May 68, and like the mass strike wave of a decade ago. It comes as a rejection of Blairs Thatcherism for Europe, and the EU constitution which would transform the member nations into modern neo-liberal captialist states. Like Britain.

And for a different view from the student/workers side of the Barricades see: Parisian riots, take two



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