Overcoming Ideology: New Actions and New Ideas

Efforts to find a viable path to mitigating climate chaos and forging an ecologically viable economy are just not moving fast enough. They seem bogged down in struggles over old ideas and inadequate actions. Even some of the most esteemed liberal economists who are not on the corporate bandwagon have failed to escape this trap.

Paul Krugman and Joseph Stiglitz, both highly respected liberal economists, oppose the crass neo-conservative economic ideology of corporate imperialism. Yet, in his own way each remains trapped in the general economic ideology of extractive capitalism as the only way forward. Krugman imagines robust restrictions on carbon emissions without curtailing economic growth. Stiglitz imagines a ‘reformed’ capitalism where healthy competition can be restored. The imaginary and the possible are not necessarily the same.

French economist Thomas Piketty’s recent book, Capital in the Twenty-First Century, has received vastly more attention and sales than ever expected of a heavy economic tome. Piketty seems to expect inequality to be reduced by expanding economic growth. A simpler version of the myth of sharing a “bigger economic pie” or the “rising tide lifts all boats” story is available in any Econ. 101 class. Unfortunately for these fables, inequality is a positive feedback loop – greater power begets greater power.

Meanwhile, Krugman argued in his September 18, 2014 New York Times column, that carbon emissions can be reduced cheaply amidst strong economic growth. He does not mention the skyrocketing depletion rates of many important industrial materials – including petroleum – upon which continued economic growth depends. The connection between economic growth, growing poverty, and climate disruption is nowhere to be found.

Stiglitz writes in last September’s Harper’s Magazine, that Piketty is wrong in concluding that inequality is an inevitable outcome of capitalism. Instead, he says, ‘capitalism as we know it’ isn’t truly competitive like a capitalist system should be. Our system’s growing extreme disparities in income and wealth have been engineered by the wealthy. Stiglitz would reform capitalism.

Ending Economic Ideology

Stiglitz and Krugman are stalwart and articulate critics of the neoliberal economic ideology that attempts to justify corporate dominion over economic and political policy. However, despite their rather sophisticated economic analyses, our present economic system is what it is because it is not allowed to be reformed. The concentration of both wealth and income in the hands of a small elite is inherent in any economy in which excessive political power accrues to the financial elite. Inequality is becoming extreme, extractive demands of industrial production grow ever stronger as resources are depleted, and the devastation of the planet continues. Reform? You can’t get there from here.

As the international death dance continues around failed commitments to reduce carbon emissions, sufficient national and international actions to curtail climate chaos seem ever more unlikely. We know a lot about carbon emissions and the most important sources. Technically, the necessary reduction of greenhouse gas emissions could be planned as effectively as the U.S. mobilized the entire economy upon entering World War II. But execution is a political matter and therein lays the collective failure. Another way is needed and not even the most sincere and smart conventional economists seem able to help.

Increasing poverty, massive concentration of income and wealth, and accelerating climate disruption all have the same cause. The economy of endless growth required by the debt-driven imperatives of extractive capital is not susceptible to political reform. The very financial and corporate elites that drive the economy have captured and completely control the key players in the political process. We must look elsewhere for solutions. And elsewhere we will find them.

Resistance and Replacement: Actions Reforming Ideas

The people and the planet desperately need resistance to and replacement of the very institutions that even the most liberal critics of economic and environmental failure cannot give up. As neo-conservative economic policies still seek to solidify the empire of growth, progressive leaning conventional economists seek to reform what needs to be replaced. Powerful financial and corporate elites do not give up easily. Consider Jamie Diamond’s arrogant dismissal of Elisabeth Warren’s desire to regulate Wall Street’s excesses. The conversation in which it occurred is noted in the Afterward to the paperback re-issue of her book, A Fighting Chance.

Neither resistance nor replacement will be easy. But both will be nurtured by the growing sense among more and more people that we are on a path to catastrophe and need an immediate course correction. There is much to learn from non-violent movements of resistance that have succeeded, as reported in Peter Ackerman and Jack Duvall’s A Force More Powerful: A Century of Nonviolent Conflict. Even so, new models of resistance must involve accelerated withdrawal from the consumerist complex – no easy task. There is still a place for the forms of resistance seen in the Occupy and Arab Spring movements. But Gene Sharp, whose From Dictatorship to Democracy: A Conceptual Framework for Liberation, inspired those movements’ strategies, urged practical agility and creativity in fighting oppressive forces.

Today’s forces of oppression, especially in the ‘industrially advanced’ nations, are of a different order than the old dictatorships. The “inverted totalitarianism” with a façade of democratic formalism, as Sheldon Wolin describes in Democracy Incorporated, calls for new creative forms of resistance. Naomi Kline argues for ideologically driven forms of resistance in This Changes Everything: Capitalism vs. the Climate. However, new ideologies of humane social and economic relations, economic justice, and ecological society must be shaped by resistance that has direct and meaningful relationships to the immediate crises we face.

Replacement of the failed perpetual-growth political economy and its extractive energy-production and consumption practices requires even more creativity and organization. Various books, magazines, and Web sites, such as John Brown Childs, Trans-Communality, David Korten, Change the Story, Change the Future, Yes! Magazine, and Resilience.org – to name just a few – seek alternative cultural and political as well as economic paths. Works like that of Juliet B. Schor, author of True Wealth: How and Why Millions of Americans Are Creating a Time-Rich, Ecologically Light, Small-Scale, High-Satisfaction Economy, point to the formation of a new society grounded in humanity’s relationship to the earth and all its inhabitants. The idea of the good life is captured in that title. Many families and communities are experimenting with new ways of living outside of institutional entanglements. But much more is needed and on a much larger scale.

The hard part, of course, is getting it done, especially with so little time before catastrophic consequences of our current path become unavoidable. Some argue that it is too late. But that claim is pointless. We fight not because we will win; we fight because we must win.

Why a Return to Progressive Taxation is necessary…and Right

The accelerating concentration of income and wealth in the upper 1% of the upper 1% of the population and the failure of the “growth” economy to serve the population that supports it, are not only moral questions of fairness. The distribution of income and wealth are also important elements of the health of the economy itself. Between 30% and 75% of aggregate income in the past 30 years has gone to the top 10% and most of that has gone to the top 1%. After the “great recession” of 2008, almost all of new income went to the top of the top 1%. If this trend continues, the circulation of money and therefore the health of the economy will stagnate even further.

It is fortunate that French economist Thomas Piketty’s new book, Capital in the 21st Century, is making such an international splash. Piketty raises fundamental questions about the economy that most economists, in their pandering to the power elites, have avoided ever since crowning Adam Smith patron saint of mainstream economics.

What classical economics, as practiced throughout the industrial era, has ignored is the inherent tendency of capital to concentrate among the wealthiest individuals and corporations, unless mitigated by social policies that assure the broader circulation of money throughout the economy.  It’s really quite simple. The economic power of those who control the most wealth and income gives them advantages that enable them to accumulate wealth at increasing rates, to the disadvantage of everyone else in the economy.  Without economic regulations that dampen the special advantages of wealth, such as the progressive income tax that once benefited the economy, extreme disparities in income and wealth cause all sorts of problems.

The evidence of that destructive process is grossly obvious in the current economies of the industrial nations, especially in the United States. That is exactly what happened before the Great Depression of the 1930s, causing economic collapse due to excessive concentration of wealth among the richest class in America. Yes, class, that concept so long banned from discussion in the U.S. Forget the fancy academic analyses of socioeconomic class and status in social relations. It’s simply a matter of an inevitable distortion of the distribution of wealth and circulation of money when the tendency for concentration is not tempered by some kind of social policy designed to limit concentration by re-balancing the circulation of money in the economy. Such policies were enacted in the 1930s, but, under pressure from the most privileged, have been abandoned, allowing further distortion of income and wealth.

The concentration of wealth and income was moderated when we had a progressive income tax system. The simplest and most practical approach to staving off plutocracy (rule by the wealthiest members of society) and reducing damage to the economy that results from unfettered accumulation of wealth, is to return to a progressive system of taxation of income and the return of the tax on inheritance. There is simply no economic reason, let alone moral justification, for allowing the economy to spin out of control and fail to serve the public interest in order to allow the wealthiest members of society to become that much wealthier, simply because they already have excessive economic power.

At the same time, the obsession with reducing the federal debt by further cutting expenditures that support the general population, such as social security, medical insurance coverage, and public education, serves no earthly purpose other than to make the rich richer. The biggest con of all these days is the one that characterizes the ‘rentier’ class – those who merely make money on the value of the wealth they have already accumulated – is that their income and wealth ought to be protected from taxation because they are the “job creators.” They are no such thing, and their excessive income is of benefit to nobody, not even themselves – you can only spend so much before reaching absurd redundancy.  But the quest for power knows no bounds.

Restoring the progressive income tax would be fit medicine to help restore the health of an economy suffering from the cancerous growth of the ‘cells’ of the richest class of Americans and the corporations they control. The federal revenue gained thereby could be applied not only to the national debt, but to investing the desperately needed transformation of the fossil-fuel driven economy to a carbon neutral economy in order to minimize the damage of climate disruption. After all, it is the 1% and their fossil fuel related investments that have driven us to the brink of climate catastrophe.

Bottom line: an economy is not an economy of the whole society without consistently adequate circulation of money throughout the population.  It is both immoral and foolish to continue on the path of accelerating concentration of wealth to the detriment of the entire society. Privilege and wealth will not disappear with progressive taxation. Look at the post WW-II 1940s and 1950s, when the marginal tax rate on income above $200,000 — the tax rate on the part of income above the first $200,000 earned, and there were 23 brackets below that with progressively lower rates — was 91%; adjusted for inflation, that would be the rate for income above $2.41 million today. We should have such a healthy economy today!