Puerto Rican Jubilee

All basic infrastructure in Puerto Rico is down and remains nearly out. Hurricane Maria made a direct hit on the U.S. colonial territory, whose people are American citizens, mas o menos. Maria obliterated Puerto Rica’s electrical grid, destroyed homes, schools, hospitals, and most facilities and supply lines of all kinds. The third record hurricane in the Caribbean this season, Maria had sustained winds at 155 miles per hour when it hit the island.


Because of the sophisticated satellite imagery, data processing, and computer models of NASA, NOAA, and the National Weather Service, they could forecast its general path and power days ahead of its impact. Yet, U.S. government response was delayed, slow, and partial at best. It appears another Katrina failure is underway, with little or no leadership at the top. The president’s focus on the island’s debt to Wall Street creditors and exorbitant claims of success still accompany “foot-dragging” on mobilizing the assets a genuine response requires.

Yes, 3.5 million U.S. citizens live on the island of Puerto Rico. Well, they are sort of citizens… The U.S. citizens of Puerto Rico cannot vote in presidential elections and their representatives in Congress cannot vote on legislation. Puerto Ricans are by law, second-class citizens, a colonial legacy. They are, after all, mostly Hispanic people of color and former colonial subjects. They are also classic victims of disaster capital.

Modern empire is more subtle in its methods of domination and exploitation than were the colonial powers of the past. Vulture capitalists exercise oppression with financial weapons. One of the most important but largely unacknowledged powers of holding great wealth is the ability to use money to extract more money from others through the imposition of debt structures. In Puerto Rico, as elsewhere, we blame the victim for “decades of poor management.” However poorly managed, a debt trap is a debt trap.

The Empty Clown Suit who stole the presidency through voter suppression, demagoguery, and Russian interference, conveniently contrasts Puerto Rico with Florida and Texas, by implying that in some sense it was their own fault. He tweeted:

“Texas & Florida are doing great but Puerto Rico, which was already suffering from broken infrastructure & massive debt, is in deep trouble..” (Donald J. Trump @realDonaldTrump 6:45 PM – Sep 25, 2017)

“…It’s old electrical grid, which was in terrible shape, was devastated. Much of the Island was destroyed, with billions of dollars….” (6:50 PM – Sep 25, 2017)

“…owed to Wall Street and the banks which, sadly, must be dealt with. Food, water and medical are top priorities – and doing well. #FEMA” (6:58 PM – Sep 25, 2017)

David Dayen in The Intercept, described Trump’s response as “…one of the most historically grotesque responses to a natural disaster, highlighting Puerto Rico’s debt difficulties.” It was not about human suffering or a federal mobilization to help. No, it was all about financial power. It was about doing as little as possible and making grandiose claims of “success.”

The bondholders who bought over 70 billion dollars in Puerto Rico’s indebtedness for pennies on the dollar, have offered new loans that would further indebt the island’s people to the Wall Street predators while contributing a paltry few million toward recovery from the devastation that itself caused over 70 billion dollars of damage. Instead, Puerto Rico ought to have a modern “jubilee” – the debt to vulture capitalists ought to be erased from the books.

Disaster Capital in Puerto Rico

Puerto Rico is a textbook example of Naomi Klein’s concept of “the shock doctrine” applied by the corporate state to weaker countries around the world to gain or retain control over their economies and resources. Puerto Rico is a bit different in that it “is a part” of the U.S. But then, so is the town of Port Arthur, Texas, a “sacrifice zone” near Houston; whose citizens of color suffered toxic devastation by the petrochemical industry long before Hurricane Harvey. FEMA ignored it too while wealthier districts were tended to. Home mortgages are now secured by worthless toxic-chemical infused devastated lots piled with rubble. The impact of the debt hanging over Puerto Rico is little different, though owed by its government and much larger.

To rescue Puerto Rico requires that it we somehow liberate its people and public institutions from the predatory vulture capitalists of the hedge funds and banks on Wall Street, who have squeezed Puerto Rico to the brink of economic death because the corporate state enables their destructive behavior.

Jubilee for Puerto Rico

The answer, which those who would protect the criminals of Wall Street at all costs will immediately characterize as “impractical,” or “utopian,” is to declare a Puerto Rican Jubilee. Congress had already intervened several years ago in favor of Puerto Rico’s predatory creditors by establishing an outside “fiscal control board” that now governs Puerto Rico’s finances. Created by 2016 legislation called the Puerto Rico Oversight, Management, and Economic Stability Act, or PROMESA, it favors the Wall Street predators over Puerto Rican children’s health and education. Desperately needed normal operation of schools, hospitals, or other social services shrink to pay vulture capitalists. The island is bankrupt. Only relief from debt will allow a genuine recovery for Puerto Rico. It is time for the criminals of Wall Street to take a loss too.

Biblical references to “Jubilee” reflected formal, even legislative, return of land to its original owners, release of slaves, and cancelation of debts. Even the ancients recognized the ultimate dysfunction of excessive accumulation and concentration of wealth by the few and unbearable debt of the many, for the larger society. The combination of extreme wealth, computational technology, and political influence, has produced equally extreme inequities in the final phases of the industrial era. Puerto Rio’s plight epitomizes this process.

“Babylonian kings … occasionally issued decrees for the cancellation of debts and/or the return of the people to the lands they had sold. Such ‘clean slate’ decrees were intended to redress the tendency of debtors, in ancient societies, to become hopelessly in debt to their creditors, thus accumulating most of the arable land into the control of a wealthy few.” (See Wikipedia for a brief description of these ancient practices.) That is the exact position of Puerto Rico as a U.S. territory today.

The oppressive debt structure that Puerto Rico endures, demonstrates that there are no bounds to the rapaciousness of the modern creditors of nations. Puerto Rica’s marginal status – not quite a nation, not quite a U.S. state – makes it even more vulnerable, especially with the congressional collusion with the powerful Wall Street financial interests that enrich themselves through the suffering of millions. The history of our debt-based economy is a sorted one. It has produced great wealth and great poverty.

Economies do not have to be debt-based, but the power of the super-rich has forced the model of debt-funded economic growth upon most of the world. It cannot last, for very physical reasons having to do with resource depletion as well as ecological and climate destabilization. Harvey, Irma, and Maria reflect both normal weather patterns and their intensification by warmer seas resulting from global warming, which jacks up the energy and destructiveness of storms. And, this is only the beginning.

A Puerto Rican Jubilee is the only chance for the people of the island to rebuild and live on. Otherwise, mass migration may ensue. A number of scientists have studied the emerging risks of chaos and conflict when mass migrations respond to intolerable environmental conditions. Armed conflicts (such as in Syria) become more likely. Many great changes are in store for us all.

The sooner we recognize the mess the fossil-fueled societies have caused, the sooner we can mitigate them and adapt to the damaging effects already “in the pipeline.” In that sense, Puerto Rico could be a test case, an opportunity to rebuild in an ecologically sound way that will not contribute to the worsening climate destabilization we now experience. A Puerto Rican Jubilee would have to be a first step in establishing a model for the ecological communities necessary for human survival. The more likely “business as usual” course portends even greater disasters, mass migrations, food insecurity, suffering, and armed conflict around the world.

The Trouble with Economics: William Nordhaus and Pope Francis

Economics is perhaps the one social science “profession” that is most entrenched in the political economy of contemporary nations. Little economic thought escapes the halls of academia without the neoliberal stamp of theoretical approval. The trouble with most of the social sciences is that it is very difficult for them to actually be scientific. In the first place, complexity is amplified exponentially by the fact that human behavior is mediated by language. Moreover, the language of human affairs is saturated with concepts and terms that have implicit political content.

Economics, like sociology, political science, and psychology, is a “discipline” that is disciplined by ideology. In particular, in its contemporary form economics is a powerful influence over national and international political policies, especially as applied to economic forces in society. Economics is in turn powerfully influenced by the most prevailing societal forces in the world today – the machinations of financial elites. Academic economics is dominated by the so-called “free market” theories for which Milton Friedman is most famous. From his intellectual throne at the University of Chicago, Friedman and his minions have dominated the economic framework of U.S. international as well as domestic policies for decades. Of course, there is little human freedom in the corporate-controlled “free markets.” Many of these policies have been at the heart of U.S. imperial strategies of foreign domination in the later twentieth century right up to today. U.S. geopolitical strategies have been driven largely by attempts to control world fossil-fuel markets.

Empire of Emissions

Anyone so naïve as to believe that U.S. foreign policy is meant to “bring democracy” to other nations must read Confessions of an Economic Hit man, by John Perkins (2004). As an “economic hit man,” it was Perkins’ job to persuade leaders of developing nations to accept huge loans to build massive infrastructure projects that did little to aid the development of those nations. Instead, they were designed and structured to bring poor countries with rich resources into submission to U.S. corporations and indebtedness to the U.S. government and the Big Banks. The deals required the money from the loans to be spent with U.S. construction companies on projects that would never generate enough income to pay off the loans. Pressure was then brought to bear on such nations to comply with U.S. political demands for resource exploitation and political subservience. Perkins’ book is a fascinating on-the-ground account of the workings of the expansive imperial structure, the larger picture that Naomi Klein characterizes as “disaster capitalism” in her book, The Shock Doctrine: The Rise of Disaster Capitalism (2007).

Despite the exposure of the massive economic and social failings of the growth-at-any-cost form of predatory extractive capitalism that is ideologically propped up by the neoliberal economic theorists, not much has changed in “modern economics.” This is also true of the specialty of “environmental economics.” The latest effort to stand firm supporting “market mechanisms” as the means to solve all problems in the world, is made by William Nordhaus. His essay in the New York Review of Books, October 8, 2015, tries to destroy the economic credibility of Pope Francis’ recent encyclical, Laudato Si’: On Care for Our Common Home (Vatican Press, 2015. Available at w2.vatican.va).

Nordhaus is Sterling Professor of Economics at Yale University and a well established environmental economist. His attack on Pope Francis’ encyclical pretends to be grounded in supposed rock-solid economic facts of “effective” market approaches to restraining carbon emissions. He entirely ignores the strong evidence that carbon trading in Europe has been a dismal failure. Rather than having a basis in scientific findings, his analysis is actually grounded only in neoliberal economic ideology. It ignores both the severity of the economic and ecological facts of our destabilizing world and the moral questions raised by Pope Francis’ argument.

At least ecological economists examine economic systems as operating within the living earth systems that sustain all life, including economists and other humans. Norhaus’ failure – and that of economics in general – is that he treats earth systems as mere economic factors to be incorporated in the economists’ models of market forces. In fact, economies are human systems operating within and now seriously disrupting the earth systems upon which they rely. This is a direct result of the propagandistic role of economics in the political culture of the U.S. and most of the other industrially overdeveloped nations.

Immoral Economics

Nordhaus wants to protect the failed economic system by tweaking its damaging impacts. However, living earth systems are being so severely destabilized by the fundamental ways that system operates, that only a massive reorganization of human economic life will be sufficient to allow those systems to re-stabilize.

Nordhaus concludes his essay by chiding the pope for not endorsing a “market-based solution” such as carbon pricing (and the disaster that is carbon trading) as “the only practical policy tool we have” to turn back the dangerous trends of climate change. Certainly, such “solutions” would constitute the limit of action if we had to accept the corporate free market ideology. But Pope Francis has other ideas. He asserts the social immorality of a system that destroys climate stability and all that depend on it while creating more plutocracy and poverty. Pope Francis calls upon the people to turn away from compulsive consumerism. He calls upon world leaders to abandon the “magical conception of the market” and to turn away from the failed economic system they have allowed to rule us and severely damage the planet.

Nordhaus will have none of it. He dismisses economists like Anthony Atkinson, Thomas Piketty, and Joseph Stiglitz, who recognize in different ways the relationship between capital gone wild and increasing inequality. By attacking the idea that climate disruption causes poverty, Nordhaus attempts to deflect attention from the fact that unrestrained predatory global capital causes both. He optimistically asserts that utilizing assumed magical qualities of market mechanisms can somehow undo the damage that unbridled global capital markets have wrought. That is the trouble with economics.

Moving Toward an Ecological Infrastructure. Part I: From Growth to Development

Economists are often confused by their own wallowing in esoteric but useless mathematical formulations of unquantifiable human complexities. But we just can’t afford their foolishness anymore. Investment in infrastructure is desperately needed, but not by merely restoring the infrastructure of the old growth economy. That needs to be replaced by a new viable infrastructure for an ecological society. This paradigm shift will require re-thinking core economic ideas to transform economic and social relations.

Great Recession Redux
Old notions die hard. Case in point: the recent/current “Great Recession” of 2008 was/is the inevitable outcome of endless-growth economic policy – which is also destroying the ecosphere upon which we depend. Yet political and financial elites cling to their failed economic ideas. Some politically ignored but eminent economists have cut through that veil of illusion. Paul Krugman, Dean Baker, and especially Joseph Stiglitz – only two of whom are Nobel laureates – see right through it. No complex mysterious forces of economic nature beyond human understanding were at work. Just centralized financial power and greed were enough.

More important, the political-economic response protected the perpetrators and perpetuated the economics of ecological disaster. I love Joseph Stiglitz’s metaphor on how it went down. A deranged paramedic rushes the DWI culprit to the hospital, leaving his victim to bleed out on the street. Similarly, Wall Street’s gamblers were bailed out while the American people were left with a newly bloated national debt. Time for a paradigm shift.

Responding to Crisis
The same accelerating concentration of wealth, and faltering employment and wages that accompanied the housing bubble continue today. The “solution” proposed by most economists is either to “grow” our way out or cut government spending — more plutocratic ideology. The real solution is clear: Resuscitate the victim and charge the perpetrators for their crimes. Neither has happened or is about to. As the combined climate-disruption and economic-instability crisis intensifies, we may see a surge of interest in an ecological economic policy that can slow climate disruption while stimulating a viable economy.

Aside from prosecuting Wall Street criminals, let’s look at the economic-ecologic mess that we’re in and how it might be fixed. With a trillion dollar loss in housing wealth, the American unemployed and under-employed cannot engage in the spending that would stimulate the economy. And the financial geniuses of Wall Street can still borrow from the Fed at near zero interest with “quantitative easing.” They can “lend” that money to the government for a few percent more. It’s a totally secure investment for the plutocrats using none of their own “reserves.” Don’t look to Wall Street for a solution.

The biggest corporations have no incentive to invest their huge cash reserves in the faltering economy. Without evidence of demand, they will hold onto their cash. As a bonus, they get to keep hundreds of billions of their cash income overseas and avoid income tax. Bottom line: neither the corporate nor financial elite will solve the crisis they created. These scofflaws will act to increase their power and wealth until the government bails them out of the next crisis they cause.

Ecological Infrastructure
Both the Keynesian and ecological economists would invest in infrastructure to improve both employment and economic health. This would stimulate demand in the economy and give the corporations a reason to invest in production. But just stimulating “economic growth,” without an ecologically grounded industrial policy would be like a band-aid without adhesive, or worse. Instead, a public investment policy heavily weighted toward investment in the replacement of carbon-based with carbon-neutral energy production is necessary. Throw in a living wage as public policy and the result will be a vibrant economy with minimized climate disruption.

Part II of this essay will discuss how infrastructure investment can energize the economy, but not by inducing unfettered “growth” for its own sake. Instead, we need big investments in stable ecologically viable development that simply retires the old fossil-fuel energy production and builds new industry for an ecological economy. Significant displacements of existing economic institutions will accompany such change, but they are necessary. The societal rewards will be immense.

Tipping points need Paradigm Shifts: Paradigm Shifts are Tipping Points

If you are familiar with the history of science you have probably heard of The Structure of Scientific Revolutions.  In it, Thomas Kuhn describes how science progresses not by gradual evolution but by revolutionary transitions or “paradigm shifts” between “normal science” and new models of reality.  Normal science chips away at small areas of ignorance around the fringes to build out the basic accepted framework of knowledge. The new model or paradigm, on the other hand, incorporates all the information explained by the previous framework, but also explains incongruities in the old “normal” or accepted view, as well as incorporating new observations and problematic evidence that the previous paradigm could not explain.  A classic example would be the shift from Newtonian physics and Einstein’s relativity theory.

We very well may be at a point today where economics is undergoing a paradigm shift from the classical paradigm based on the assumption of perpetual growth, to a new ecological economics that takes into account the finite resource base, the ecological basis of human societies, and the planetary population limits that classical economic theory ignores entirely.

French mathematician René Thom developed catastrophe theory in the 1960’s to describe sudden transformations in natural systems.  Under certain conditions, a system will sudden transition into new very different kinds of behavior. This bifurcation value of the parameter is sometimes also called the “tipping point.”  The concept was popularized by Malcolm Gladwell in his immensely popular book by that name, in which he describes situations in everyday life in which such sudden fundamental transformations occur.

Today, we appear to be at or very near a “tipping point,” in our relationship to the earth system of which we are a part.  Much evidence now supports the idea that if we do not experience a cultural tipping point immediately, we will shortly find ourselves at a catastrophic ecological tipping point – beyond human control – that will lead to a fairly rapid slide into conditions that will force species extinction in a matter of a few decades.

What will it take to turn the corner from the “business as usual” approach which attempts to apply old imaginary entities such as “free markets” and Adam Smith’s metaphor of the “invisible hand” in attempting to respond to the economic implications of climate disruption, which is fundamentally outside the old economic paradigm?  That is the question of our time.  Only by a rapid cultural paradigm shift in political economy will humanity be able to respond adequately to the catastrophic consequences of the old model on the biosphere.

As markets developed in corporate industrial economies, and as corporations and cartels extended their domination over economies, the concept of free markets became irrelevant of to actual economic systems controlled by a few corporations.  Yet, the “science” of economics, as well as the practice of corporate business held onto the concept as a useful ideological tool to maintain political power. But both the ideology and the practice of market economics are increasingly detrimental to any scientific understanding of the relationship of economic behavior and systems to the biosphere on which we all depend.

Tipping points and paradigm shifts are like chickens and eggs.  Tipping points in human systems are constituted by cultural paradigm shifts.  The evidence of the failure of classical economics to operate as an “invisible hand,” guiding an ideal distribution of income and wealth without political intervention is now overwhelming, despite the political and economic power of corporate and academic “free market” ideologues.  The evidence of the severe damage of corporate-industrial economies to the planet is now irrefutable.

Yet the existing institutional interests fight hard to retain their cultural and political control.  The consequent inability of the political economy to respond to the ecological crises it has generated is now so obvious as to be undeniable [except, of course, by Senator Inhofe and a few other corrupt science deniers].  Not only is the paradigm no longer defensible as a framework for economics, but its ecological consequences are no longer tolerable from the perspective of human survival.

It is increasingly clear that a massive reduction in resource extraction and a re-allocation of existing resources by means of a comprehensive reorganization of society to effectively change the ways in which we live – in order to drastically reduce carbon emissions –  is necessary in the near term.  Otherwise, global warming will continue to the point where human action becomes futile and human survival is no longer possible.

The Great Jobs Myth and the Transformation of the Growth Economy, Part II

The pervasive acceptance of conventional economic theory as a “natural science” that gives us guidance for dealing with our economic lives is one of the biggest obstacles to understanding and making rational choices about the converging crises of our time.  Simply put, the fundamental flaw in conventional economics is that the economic system it promotes as a natural system operates in an ecological vacuum.  In the real world, however, economic policy confronts actual obstacles to its illusion of endless economic growth that it cannot overcome.  That is why the choices ahead are so difficult and will require massive social change.

The economics profession initially struggled to be recognized as a science, just like physics.  That recognition eventually came, but was not entirely justified.  Philip B. Smith and Manfred Max-Neef[1] have powerfully demonstrated how the scientific limits of economics were overcome by clever conceptual illusions and political alignment with the forces of wealth and power in society.  That has gone so far that, for example, the Koch brothers now control the hiring of economics faculty at Florida State University, having cut a deal that allows them veto power over faculty hiring in exchange for monetary support for the department.  So much for independent intellectual exploration in that academic setting.  The economics departments of high ranking universities around the nation are more subtly influenced by expectations tied to financial support from major corporations.  No wonder fields like ecological economics, which examines economic systems in relation to the ecological systems in which they operate, are so commonly excluded from such programs.

A few forward looking economists such as Rob Dietz and Dan O’Neill,[2] and Richard Heinberg,[3] have begun to unmask the myths of the orthodoxy of the Economics of Endless Growth and the false assumptions at its base.  As we reach the planetary limits to economic growth, the new ecological economics is an emerging attempt to build a basis for a steady state economy consistent with the carrying capacity of the biosphere.  Much remains to be done on figuring out how to respond to and manage the Great Transformation to the new economic reality.  The economists mentioned here have outlined some of the changes needed, but little has been said of how to accomplish them.  Gar Alperovitz[4] has extended that discussion, focusing on nascent democratizing economic organizations forming at the grass roots level.  That will be increasingly important, but strategy and tactics for getting there from here are the key factor which is both most important and least elucidated.

It is quite clear that electoral politics are so dominated by the corporate forces that sustain conventional growth-at-any-cost economics in their own short-term interests [quarterly profits and stock prices as well as obscene executive pay and bonuses] that getting reasonable independent people elected in the near term is highly unlikely.  The only other option is the building of a social movement from the bottom up.  The American people are not nearly as stupid as the plutocracy imagines.  People know something is very wrong, even when they don’t connect it to their own economic behavior.  Extant climate disruption has already overcome the corporate propaganda of climate-denial, but what’s a concerned citizen to do?

The news that a coalition of seventeen of the world’s biggest private foundations has announced that they are divesting their holdings of nearly $1.8 billion from fossil fuels corporations[5] indicates one thing.  Consciousness can change and change can become exponential; that is how emerging non-violent social movements are realized.  350.org was initially ridiculed for its plan to pressure educational institutions to divest their endowments from the fossil fuel industry.  But it is happening.  A much broader movement is needed, however.

Integral to modernity is the decline of the solidarity of natural social groupings (family, village, clan, etc.).   The discontent resulting from economic individualism could be countered by engagement in the very kinds of social movement that are needed to confront the otherwise overpowering force of corporatocracy.  Out of participation will come change in self-awareness.  If [when] Obama’s absurd “all of the above” [ultimately anti-ecological] energy policy results in approval of the Keystone XL pipeline, a new surge of activism will facilitate the larger social movement – and solidarity – necessary for change when conventional politics are locked out by corporate financial control.  What most middle-class “progressives” don’t quite understand, yet, is that the necessary massive reductions in CO2 and methane emissions will radically alter their consumer “lifestyle.”  That shock, sobering as it will be, must lead to massive collective action by new social groupings grounded in the human interest – not individual selfish short-term interests –  so that the broken fossil-fuel economy can be transformed into a new ecological economy never before seen.

[1] Philip B. Smith & Manfred Max-Neef, Economics Unmasked: From Power and Greed to Compassion and the Common Good. Devon, UK: Green Books, 2011.

[2] Rob Dietz & Dan O’Neill, Enough is Enough: Building a Sustainable Economy in a World of Finite Resources.  San Francisco: Berrett-Koehler, 2013.

[3] Richard Heinberg, The End of Growth: Adapting to Our New Economic Reality. Gabriola Island, BC, Canada: New Society Publishers, 2011.

[4] Gar Alperovitz, What Then Must We Do? Straight Talk About the Next American Revolution.  White River Junction, VT: Chelsea Green, 2013