The Inability or Unwillingness to Delve Deeper

In my next series of posts, I will more focus on the way in which the world works on a larger frame, rather than dealing with specific current issues. I don’t believe in repeatedly posting on the same current issue when I really don’t have much else to add until some new events require a reassessment or further analysis. This post delves into the way in which many “critical” voices really act as traps within bourgeois progressive thought that restrict analyses to surface phenomena that are proposed to be open to fixing through systemic tweaks rather than understanding the more fundamental ways in which Western societies are dominated by the few.

The mainstream media and many in the commentariat deal with issues as individual phenomena unlinked from an overall worldview; their coverage becomes a series of events that “just happen”. Another device utilized is that of the liberal progressive lens, which sees the state as an independent entity which can be changed without fundamental changes to society and that what ails society can be fixed through incremental changes. This is aided by a mainstream economics designed specifically to not see the real world, but rather a make believe one where oligarchic power is not present. With practitioners trained and disciplined through many years of apprenticeship and selection for conformity (BA, MA, PhD, Associate Professor), and journals fully in control of the mainstream economics priesthood. The same goes for mainstream political science and sociology, the other two of the three disciplines which were consciously split out from the study of political economy that had become too insightful and therefore too dangerous to the oligarchs. Added to this are the culture industries which are dominated by those with the well-off parents needed to support a career where the vast majority are lowly paid and, in some cases even unpaid.

This vast army of media, intellectual and cultural warriors, together with the bought and paid for politicians, corporate CEOs, and well-paid management consultants create and maintain the hegemonic culture that is infected into the minds of the people through every social institution that they encounter. A set of beliefs about how the world works that hides the oligarchy, legitimizes its exploitation of the people, and blames the victims of its excesses for their victimhood.

We see an extreme version of this with respect to Apartheid Israel, where the population has been indoctrinated into believing that the Palestinians are truly untermenschen and that the “civilized” Israelis are the victims of the untermenschen’s barbaric acts; an attempted legitimation of ethnic cleansing that reverses reality. The same can be seen in fascist Ukraine, where a hatred of ethnic Russians has been embedded within all aspects of society. The same concept is that of the Other in Western cultures, whether it be Amerindians, Africans, Arabs, Muslims, Communists etc., a new “uncivilized” Other is created to legitimize foreign policy decisions. When the hegemonic culture is unable to fully ingest the minds of the people, then more direct means or the diversion of war, are required. This is the case with the Israeli extreme religious right that was attempting to undo basic liberal institutional arrangements and triggered what was turning into a near civil war. The Hamas attack provided the Netanyahu government with the perfect distraction, and the need to keep this distraction going may lead to decisions which may not be in the long-term interests of Israel as a whole.

Below I cover some examples of “critical” commentary which in many ways act to restrict the minds of the populace within the hegemonic culture by identifying issues while asserting that they can be solved within current societal arrangements.

Americans Are Fools for Pharma: Kim Witczak

Kim Witczak launched a personal crusade when her completely psychologically normal balanced husband committed suicide while taking Zoloft for problems with sleeping. Today, she sits on one of the US Food and Drug administration advisory committees that oversees new drugs coming to market. As she notes:

The pharmaceutical industry is driven by commercial interests, not public health, and this problem is compounded by a lack of transparency, conflicts of interests, manipulation of clinical trials, and undue corporate influence across the government.

After detailing the utter criminal basis of the large pharmaceutical corporations, their bought and paid for regulators and the bought and paid for researchers she falls back on to the standard bourgeois progressive mantras:

I only wish I had asked the hard questions, twenty years ago, before it was too late, and my husband was gone. And this is why after two decades, I am still advocating for a strong FDA and speaking to groups to hold this industry accountable. I don’t want others to have to experience what our family did. 

How are we going to have a “strong FDA” if we leave the criminal pharmaceutical industry in place with all its money to bribe the politicians and the regulators in a nation where money is equated with free speech? The real answer of course is the combination of a publicly funded healthcare system, regulated drug prices as in Europe to remove all those excess profits, the banning of all industry funding for university research, the banning of industry to consumer marketing, and industry to doctor contacts (including the bribery known as “conferences”). In the latter case, a central independent panel can be used to inform doctors of the drugs available rather than pharmaceutical salesmen. Then, in addition publicly funded labs to produce generic drugs and test all drugs prior to their release onto the market, together with the state holding the patents on new drugs developed using public funds

This would remove a huge chunk of the capitalist economy and the rentier profits made by private medical insurance, pharmaceutical companies and private hospitals while safeguarding the public and reducing overall costs (possibly by as much as 10% of GDP in the US). And that is the problem, as the US oligarchy is now heavily dependent on the rentier profits of a privatized and criminalized sick-care system; better to keep people profitably sick, than unprofitably healthy. Such a focus on health would also call into question the huge profits made by corporations that produce “food-like substances” which drive diabetes and numerous other health ailments.

So instead our tragic hero attempts to make a difference on the edges of the system rather than call out for wholesale change. This is the genius of the modern capitalist nations, giving options to “make a difference” at the edges to dissipate change-directed energy while creating a massive edifice that would need to be overcome to gain any real change. Let’s remember than President Biden spent decades representing the rotten borough of Du Pont and never met a pharmaceutical CEO he didn’t like.

America needs a bigger, better bureaucracy: Noah Smith

As Noah states, the share of the US Federal budget that goes to paying actual government workers fell from 34% in the mid-1970s to 25% by the early 1980s and 18% now. A huge amount of the state bureaucracy has been outsourced to so-called “non-profits”, an army of outside consultants, and private corporations. It has even spread to the army where legions of “ancillary” activities have been outsourced, and even actual combat to mercenaries (a great way to keep official casualties down as mercenaries don’t count as official military casualties).

After detailing the extremely large problems produced by the reduced state capacity and increased bureaucracy Noah falls back on bourgeois progressive missives:

All of this requires a large, competent, well-funded bureaucracy. Yet I worry that neither progressives nor conservatives understand this need. Progressives still seem wedded to the idea of defending NEPA (National Environmental Policy Act, which farmed out the job of environmental regulation to citizens and the courts), while conservatives still seem wedded to the idea of slashing and burning any government agency they can. It’s a toxic equilibrium in which one side wants to drown the government in a bathtub and the other wants to outsource it to every NIMBY and nonprofit in the country. To reestablish U.S. state capacity, we have to sail between the rocks of both of these disastrous approaches. We have to rebuild the civil service, with sufficient long-term funding guarantees, talent, and size. For all our sake, we need to bring back the bureaucrat.

But how is this to be achieved? Is the problem really driven by one side that “wants to drown the government in a bathtub” and another that “wants to outsource it to every NIMBY and non-profit in the country?” Are these just surface phenomena that hide the underlying drivers of the problem? That high-watermark for government jobs in the mid-1970s coincided with the neoliberal fight-back to undo the falling rates of profit and increasing working-class power aided by full employment. The public sector represented a huge new area of rentier profit-making for the oligarchs to feed upon, and also a holdout of unionism to be destroyed. And have the oligarchs feasted! Just as with the healthcare sector, huge new areas for rentier profit-making have been opened up to keep the oligarch profit-train on the rails.

The New Deal period of 1935 to 1975 was an exception to a US history of a small state that always sided with the employer against the employee, unions that could never win against the corporation-state alliance, and hardly enforced weak regulations. Only the Great Depression with its implicit challenge to capitalism, together with the mass exertions of WW2, brought some level of democracy into state functions, new state services benefitting the many, and the support for unions to organize. The oligarchy is very happy with the return to the era of the Great Gatsby and the Robber Barons, while handsomely enjoying the tax cuts and rentier profits afforded by an outsourced state that hasn’t really shrunk but rather redirected its expenditures toward the benefit of the oligarchy and its funding to the “little people” as Leona Helmsley so notoriously stated.

A case in point is the consolidation of the Military Industrial Complex into a handful of corporate behemoths who lavish money and the promises of future jobs to corrupt both the politicians and the bureaucrats. Military expenditures now more go toward incredibly expensive, complex  and profitable new toys and outsourced provisioners than any boots on the ground and basic equipment; “forever wars” are a wonderful business opportunity.

As with the sick-care system, the US oligarchy is heavily dependent upon the state trough for its rentier profiteering. Any move toward a more rational system that actually serves the good of the nation rather than just filling the oligarchs’ pockets would be incredibly painful for the wealth and income of those that control the US state: the US capitalist oligarchy. So, nothing will change even though the current arrangements deeply threaten the long-term underpinnings of that oligarchy’s power and wealth.

To wit:

Why America Is Out of Ammunition: Matt Stoller

Matt Stoller writes about monopoly power, which after the deregulation and liberalization of the 1980s onwards and lack of any real enforcement of anti-trust laws, has reached new heights in the US. Monopolies (a single corporation that dominates a market) and oligopolies (a few corporations that dominate a market acting in a coordinated fashion) now dominate the US economy with the result that it has gone from being significantly cheaper in many areas than Europe to being significantly more expensive. Business planning in corporations now heavily consists of identifying areas where supply can be concentrated to deliver rentier monopoly profits. Corporations such as Walmart and Apple also work hard to dominate their suppliers, becoming a Monopsony (a monopoly on the buying side) to extract most of the profits for themselves.

Monopolies and oligopolies are not incentivized to increase production, but rather to limit production so that they can sell less at higher profit margins. Nowhere is this more apparent than with the corporations that operate within the US Military Industrial Complex. Without any real competition, such corporations are also not incentivized to maintain spare capacity or even to foster supplier networks that may become competitors. When asked to ramp up supply they will be extremely slow and also focused on gaining as much profit as possible for as little work as possible.

One of the more important side stories to the recent wars in Ukraine and Israel, and competition with China over Taiwan, is that the U.S. defense industrial base, composed of 200k plus corporations, is being forced to actually build weapons again. Defense is big business, and since the end of the Cold War, the government has allowed Wall Street to determine who owns, builds, and profits from defense spending.

The consequences, as with much of our economic machinery, are predictable. Higher prices, worse quality, lower output. Wall Street and private equity firms prioritize cash out first, and that means a once functioning and nimble industrial base now produces more grift than anything else. As Lucas Kunce and I wrote for the American Conservative in 2019, the U.S. simply can’t build or get the equipment it needs. There are at this point a bevy of interesting reports coming out of the Pentagon. The last one I wrote up earlier this year showed that unlike the mid-20th century defense-industrial base, today government cash goes increasingly to stock buybacks rather than actual armaments. And now, with a dramatic upsurge in need for everything from missiles to artillery shells to bullets, we’re starting to see cracks in the vaunted U.S. military.

The government can’t actually solicit bids from multiple players for most major weapons systems, because there’s just one or two possible bidders. So that means there’s little incentive for firms to expand output, even if there’s more spending. Why not just raise price?

As Matt points out “There’s no policy or guidance on mergers, and DOD doesn’t even require contractors or subcontractors to tell them that there is new ownership when an acquisition occurs. In fact, the Pentagon relies on public news to learn of mergers”. As he accepts, nothing will change “because doing something about our industrial base means thwarting Wall Street, and that’s generally not something that’s considered on the table among normie policymakers.”

The MIC has provided a huge opportunity for rentier profiteering, and this worked wonderfully when the weapons didn’t actually have to work well because no peer-to-peer war was envisaged in the heights of the unipolar moment. Shooting goat-herders and attacking nations of only 17 million people that have been destroyed by sanctions for over a decade doesn’t show up the showy expensive garbage that masquerades as US military might. One weapon system after another fails to meet its requirements and is many, many years overdue but that doesn’t matter as long as the rentier profits roll in and no well-equipped opponents have to be engaged. It has been found that 61% of the military’s assets cannot be accounted for, the US Defence Department has failed at providing audited accounts for year after year after year.

There also seems to be a significant issue with recruitment for the armed services, not helped by the low pay, massively underfunded Military Health Insurance and Veteran’s Affairs department, bad treatment within the military, young people becoming much more knowledgeable about abusive and untruthful recruitment processes, and a fall in the legitimacy and respect of the US armed services. This is certainly not where the defence budget largesse is being spent. Fifty percent of servicemen get injured every year, in peacetime!

The Ukraine War has shown up the utter failure of so many US and Western wunderwaffe, from the increasing Russian interceptions of the incredibly expensive US MLRS missiles, to the destruction of Western tanks by cheap drones, the uselessness of US anti-air systems against Russian missiles and drones, to the interceptions of the vaunted UK Storm Shadow missiles. But the greatest problem is the utter inability of the Western MIC to ramp up the production of basic things such as MANPADS (Man Portable Air Defence Systems), ATGMs (Anti-Tank Guided Missiles), artillery shells, mines and machine gun bullets to supply even the Ukrainian proxy war. They have been put to shame by the predominantly government-owned and controlled Russian MIC that is focused on producing useful weapons and munitions at cost effective prices rather than in maximizing monopoly profits. And as for the industrial powerhouse that is China … A major part of the issue is that so much of US manufacturing has been moved abroad or simply sourced from foreign manufacturers, that the US no longer has the home-grown ability to ramp up production. In many cases, even MIC producers are dependent on supplies from countries that have been defined as future possible enemies.

But to change this will require the US oligarchs to give up a significant proportion of those rentier profits, a move which will significantly reduce the earnings of the MIC Corporations and their share prices. Such a move would also take decades, the same decades that China needed to build up its world-class manufacturing capacity with the help of offshoring US corporations. Thankfully for Russia, the siloviki managed to protect the core of the Russian MIC from the ravages of the 1990s, allowing it to be rebuilt in the new century. The Stockholm International Peace Research Institute (SIPRI) estimates that in 2023 the US spent US$877 billion on defence, while China spent US$292 billion and Russia spent US$86.4 billion. From what we see in Ukraine, the Russians have achieved much with only 1/10^th of the US budget, even still 1/5^th if purchasing power parity is taken into account.

What Matt doesn’t want to delve into is that those “normie policy makers” are really the courtiers of the US capitalist oligarchy that from the mid-1970s onwards decided to turn everything in the US that they could into a rentier profiteering activity to overcome the falling profits inherent in losing the competitive edge in so many industries. Instead of the hard work of competing, less profitable business segments were sold off, off-shored, or outsourced to “global supply chains”. Stable businesses were treated as “cash cows” to fund more profitable activities such as a wave of anti-competitive takeovers, financial engineering and share buybacks (very profitable for the executives with their stock options). Rentier profiteering now represents a very significant share of the US economy which reduces the effectiveness and efficiency of the state, supports outright corruption and unpunished illegal behaviour, and makes so many goods and services more expensive and of less value.

Without a new Great Depression style crisis, the new Gilded oligarchy will not give up its extensive rentier profiteering and is in fact expanding it day after day. No amount of bourgeois progressivism will change that, and what we are actually seeing is an increasingly autocratic Mafia-State in response to any challenges to current societal arrangements. Many understand what is required, a retrenchment abroad and a rebalancing at home, but are at a loss to see how that will be achieved in the face of oligarchic resistance and inertia. So they end up providing us with the hope that incremental changes will make a difference.