January 20, 2011

We Have A (Fascist) Command Economy

Filed under: Corporatism, Health Racket Bailout, Neo-feudalism — Tags: , , — Russ @ 6:39 am


1. I mean that in a precise sense. The economic definition of fascism, which is roughly synonymous with corporatism, is a command economy which maintains private rent extractions. (This is separate from other aspects of classical fascism – political authoritarianism, ideological obscurantism, censorship, destruction of civil liberties, tribalism, racism, military aggression. But as we’re seeing, most of these definitely follow from the economic aspect, and all are likely to follow in the end.)
2. Given that necessary part of the definition, there can be two manifestations of this command economy. It may be corporatized toward an ideological goal, as in the case of Nazism. In this case the rentiers are kept because they’re judged to be the most effective vehicle to achieve certain practical goals, e.g. fast rearmament in Hitler’s case. Or, the corporatization may be done for the sake of maximizing the extractions themselves. The already classic case is modern neoliberalism. In this case, the rentiers prefer to dispense with the full fascist phenomenon for as long as they can, since classical fascism generally means the thugs take over the operation, while the “legitimate businessmen” become the junior partners. Today’s corporatists want to maintain control of their thugs, and anyway there’s no need to go all the way to full fascism in the absence of any real leftist movement.
So it’s a fist/glove relationship, although which is the fist and which is the glove varies with the system. The Nazi Four Year Plan was based on building political prestige through a jobs program while the thing was really geared toward rearmament and war. (When Hitler was told about Keynes’ ideas, he grasped the essence immediately. To paraphrase, “It’s all propaganda. The government makes a show of force toward the economy, this causes the people to believe in the government and therefore the economy, and this actually makes the economy strong.” This wasn’t really classical Keynes, which was supposed to function in the context of liberal democracy, if capitalism weren’t actually totalitarian. But of course it is, and Hitler was thus an early exponent of Samuelson-Friedman-Krugman bastard Keynes.)
Neoliberalism flips this relationship over. State, party, war are all meant to serve as accoutrements of profiteering and greed fundamentalism. It’s robbery for its own sake, and everything else is meant to be instrumental toward this.
3. Examples.
*The Bailout. The big banks are permanently insolvent, and all government policy boils down to stealing from the people to hand the loot over to the banks. The banksters are then supposed to directly steal as much as possible in the form of “bonuses” and other “compensation”, as well as swindle, speculate, gamble, wage economic war on currencies and governments,  and commit any and every other financial crime they can think of. They’re not supposed to hold anything back. This is the most profound and evil Permanent War the US government wants to enshrine.
*The military wars of aggression. This is the Permanent War proper. The wars are launched with public money and resources. The main purpose of the wars is to convey stolen public money to an innumerable menagerie of corporate rackets. Weapons contractors are only the beginning. Beyond that, the Permanent War’s goals are to directly aggrandize big government, quell dissent, provide pretexts for further assaults on civil liberties, and keep the phony “war on terror” going as a political astroturf.
*The health racket bailout. Congress artificially commodified health care by propping up zombie “insurance” rackets. They did this first with an antitrust exemption which was meant to shield them from any market competition. Now this bailout, assisted by a corrupt judiciary, is trying to eliminate market competition in the form of non-participation. The government’s command goal is to maximize the forced market for the worthless Stamp, the mandated “insurance” policy, while stripping all cost controls and restrictions on it.
(The favorite lie of these corrupt judges and other system hacks, that “Congress didn’t create this market”, is one of the most brazen direct lies we’ve heard in recent times.)
*Food. The government is indirectly but inexorably trying to repress and strangle all competition for corporatized food.
*“Austerity”. Gut public interest spending and public services, take the money freed up and hand it over to the rich and to big corporations.
*Privatization. For decades now, governments at all levels have engaged in massive control fraud, simply handing over public property to private criminals for pennies on the dollar. (Of course the federal government has led the way.) The corrupt officials involved are paid off in direct bribes, quasi-direct bribes (bribery laundered as “campaign contributions”), and most of all, lucrative revolving door sinecures. This is simply corruption, bribery and embezzlement. It’s a capital crime.
(The commodification of education falls into this category.)
4. Here’s the command pattern.
A. The government borrows and/or prints (i.e. credits accounts), and hands the money directly or indirectly to corporations.
B. The government austeritizes and hands over the loot.
C. Bogus government programs (e.g. the Obama stimulus, or employer tax credits) are really just corporate loot conveyances.
D. The government is now planning to raise taxes on the non-rich. The VAT is one example often bruited. Such regressive levies are then meant to be handed over to the corporations and the rich. The health Stamp mandate is one such tax. Obama, the Democrats, and the Republicans now openly call it a tax.
E. Austerity and privatization are direct robbery. The Bailout-inflicted loss of interest income to pensioners and other savers is indirect robbery.
F. The eventual goal is to buy up all the land as well. (Foreclosuregate is a critical development. The people are still on the land. We could always morally seize it. It’s now clear we can legally seize it as well, even according to the banksters’ own rigged law. This blunder of the banks is a one-time opportunity. Our choice can be to stop paying, stay on the land, Jubilate in Place, and as industrial agriculture fails, we can work our own land as our own bosses. Or the other option is to meekly depart, let the banks take it all, let all land revert to the equivalent of REO, and end up working it as indentured debt slaves. Which of these outcomes we deserve will be demonstrated by the choice we make.)
G. Eventually the dollar collapses, hyperinflates, whatever. Or maybe the system can somehow maintain it, with the public owing all the debt. However it works, the rich and the corporations end up with all the real assets.
We worked for every cent that exists.
They stole every cent they have, and want to steal every cent still outstanding.
But if we let them steal the rest, then I guess Ayn Rand would be proven right, and they really were entitled after all.
So that’s the goal of neoliberalism. That’s the nature and the goal of today’s command economy. I think we can see why the term “fascist” would also be appropriate for it.


  1. At least the German corporations were patriotic. Ours are largely controlled by the Chinese government–through the profits they are allowed to make there.

    Those profits in turn are used to fund “campaign contributions” to our legislators, who then defend the corporations’ rights to send our jobs and technologies to China.

    So there’s a new downside to global fascism….

    Comment by godfree roberts — January 20, 2011 @ 10:46 am

    • They’re not controlled by China’s government, but in collaboration with them (and the US government) against the people of both countries.

      Comment by Russ — January 20, 2011 @ 3:19 pm

  2. Russ, so do you think it would be accurate to say that we now have economic fascism in the USA, and classical fascism or full political fascism is likely to follow unless we can somehow reverse the course of events? Because that’s more or less how I see it.

    And thanks to the links you provided me with earlier I’m trying to get better informed about corporate food and the other day came across a quote by Elias Canetti that I thought you might like if you haven’t already heard this one before: “Justice requires that everyone should have enough to eat. But it also requires that everyone should contribute to the production of food.”

    Comment by Frank Lavarre — January 20, 2011 @ 4:39 pm

    • Yeah, that seems to be the way things are going.

      I’m glad you find the links interesting. I’m not familiar with Canetti and don’t know the context of the quote, but it sounds good as is. That’s exactly what I believe.

      (Not that literally everyone has to directly participate in growing food, but certainly that everyone able-bodied contributes to the necessary work as some sort of craftsman and/or laborer. There’s few intellectual workers who are such geniuses that we’d need them to devote all their time to that, or who could completely earn their share of the produce in that way.

      The moment you start stratifying physical and non-physical work that way, the whole nightmare begins again.)

      Comment by Russ — January 20, 2011 @ 6:10 pm

      • The corporate food links you provided me are good, but also alarming. (And I’ll have more to say about this another day, once I’m better informed on the issue.)

        As for Canetti, I’ve never read him and don’t know anything about his work, I just came across the quote while looking for something else, and it seemed to fit in with your ideas.

        Comment by Frank Lavarre — January 20, 2011 @ 9:03 pm

      • My stint in academia has convinced me that intellectual work must be embedded within the context of a larger productive endeavour. Scientists are quick to insist that curiousity-driven basic research is essential to the process of discovery, that for scientific progress to continue apace, large sums of money must be handed over to them from the public purse essentially without strings attached, the idea being that the unfettered pursuit of whatever it is that scientist has an autistic obsession with will produce important insight. My general feeling is that this model is a sham. I’ll have to look up some of the meta-analyses which have been done on scientific productivity at some point, as I think the relationship between information work and physical work will need to change in significant ways going forward, and it’s something we’ll need to think about carefully.

        Comment by paper mac — January 21, 2011 @ 12:31 am

      • I don’t dispute the potential value of pure research. But I reject the notion that we need anyone to do only that, or that the fruits of any such research would be anything other than public property. The lyingest part of the mindset you describe is the part about money from the public purse “with no strings attached”. It’s been a long time since I read about any public money for anything which wasn’t clearly a corporatist project.

        (I also recall how, in any federal agency budget, earmarks have priority over any projects the agency bureaucrats themselves come up with. So even in the rare case that a true public servant existed and wanted to use public money for public interest research, he’d probably be aced out during the budgetary process.)

        Of course, wasn’t all government research money always intended to socialize the costs of research whose fruits were always intended to later be privatized and monetized? I’ve read ideological statements to that effect, that socialize-cost-privatize-profit should be the model. And in fact it always was. The Interent itself is a perfect example. It’s actually public property.

        Are most scientists really such sociopaths that they don’t recognize how everything they do is functionalized by the corporate system for profiteering purposes?

        Comment by Russ — January 21, 2011 @ 5:11 am

      • I looked up Canetti. It said he was a Bulgarian Jewish writer who won the nobel prize for literature. He wrote a lot about crowds and mob politics. They compared him to Kafka.

        Comment by Russ — January 21, 2011 @ 5:24 am

      • “Are most scientists really such sociopaths that they don’t recognize how everything they do is functionalized by the corporate system for profiteering purposes?”

        Russ, yes.

        paper mac is right in calling them autistic. A good number of them are, of course, actually autistic/Asperger’s types; I know this from first-hand experience. Having attended a premier “technical school”, I was surrounded by basically amoral people. Not necessarily immoral, but absolutely amoral. The minority who got involved in anything more largely political, or more humanist, ended up flunking out or, in any case, no longer pursuing the material they had majored in.

        Even the less cold-blooded examples among them, being so involved in their little hermetic world, devoted to it wholly, perhaps with some breaks to go out and get Chinese food… it really doesn’t dawn on them what they are doing. They may not even think to change their clothes or brush their teeth.

        They’re pushing the envelope of human knowledge, they’re not looking at the big picture, and the closest most get to politics and the “real world” are the university politics about grants and tenure and publishing and lab space, which they are forced to deal with largely against their will.

        I know perfectly sweet people who thought nothing of going to work for Lockheed Martin to build bombs, because they were specialists in some particular kind of switching, and dammit!, that switching mechanism was fucking COOL. It didn’t matter to them whether the switch triggered a toy or a bomb; it really didn’t.

        I had majored in biology, but there was only one course out of dozens that focused on anything as large as a cell; if you went into cell biology, you were “weird” and completely out of the loop, because that was not where the money and thus the cutting-edge research was at. Just to let you know that you can graduate with a very expensive top-level degree in biology without ever having studied ecology, anatomy, zoology, physiology, or even a cell. It’s that far removed from reality, in most cases.

        Then there were the most amoral of all, the ones who went into “consulting”…Bain was a very popular destination for my cohort. Bloodless vampires, quite frankly, who would slit your throat with a smile while giving a PowerPoint extolling the return to the company on the insurance policy they’d taken out on the odd chance that you’d meet foul play. Nothing personal, just business. Mitt Romney, of Bain, you’ll recall, strapped his dog to the roof of his car for a multi-hour drive, refusing to stop even when brown fluids streamed down the rear window. He had to make time and stick to his schedule.

        I recall one “friend” of mine in particular, talking to some administrative person on the phone who wasn’t giving him what he wanted, who said of this woman “she’s so broken”.

        People = things.
        Animals = things.
        Not an empathetic lot.

        Comment by Lidia — January 21, 2011 @ 7:29 pm

      • That’s a nasty account. That’s what it looks like to me from the outside, too.

        Comment by Russ — January 22, 2011 @ 2:33 am

      • I didn’t even put in the part about my BF at the time, who really did go around with a T-shirt saying “He who dies with the most toys wins,” the first time I had ever heard that phrase (this is maybe 1979?).

        If I only knew then what I know now (sigh).

        Comment by Lidia — January 22, 2011 @ 5:03 am

      • I eventually intend to write a fuller critique of the state of academia. I’ll elaborate on a few points here as a way of organising some of those thoughts. I apologise for the length, but the subject is one I think about quite a bit.

        I think the concept of academia being merely a functional extension of the corporate sphere denies important nuance that is itself revealing of how corporatism operates.

        Basic academic research is, to be sure, your typical corporate private gains/public losses scheme. Public money is used to fund a bewildering variety of projects, most of which have no commercial value. The handful that pan out into commercialisable technologies are skimmed off into the corporate realm. That said, the vast majority of scientists are not working on commercialisable projects, and will never have any significant interactions with corporations beyond the ones that operate the journals they publish in, and those that manufacture some specialized equipment and reagents.

        It’s also important to note that academia is about as economically independent of the corporate sphere as it’s possible to be. There are some earmarks put in place by bureaucrats (varies by nation and funding agency), but the vast majority of funding decisions are made by scientists themselves. Most of these decisions revolve simply around whether the project is likely to result in any high-impact publications within the funding period. The ability to get those kinds of publications has very, very little to do with corporate profits, and much more to do with the fashions and obsessions of reviewers (themselves scientists) than anyone would like to admit. So, to a substantial degree, the political economy of academia exists independent of the internal logic of the corporate world.

        I therefore reject the underlying premise of Russ’ rhetorical question: “Are most scientists really such sociopaths that they don’t recognize how everything they do is functionalized by the corporate system for profiteering purposes?”

        Most scientists don’t recognize this because it’s not actually true. The profitable portion of research has been functionalized. The grand corporatist project to render all research profitable has, however, been a miserable failure. In the late 90s and aughts, it was fashionable to build research facilities colocating corporate offices with academic research facilities. This is no longer the case- there is widespread recognition within the corporate world that, whatever the social value of basic research, little of it has any commercial value. Corporations outside the MIC by and large no longer do significant amounts of research, preferring to fob off the (relatively modest) costs on society at large. There are other symptoms of this recognition within the corporate sphere as well, such as the shift of institutional funds by thoroughly corporatised university administrations away from basic research to business schools and “translational” (ie profitable) fields. I could go on, but I think you get the point- the corporate project to subsume research under its economic umbrella has essentially come to an end. The result has been that some small parts of academic research have been successfully enclosed, but the majority of it remains outside the direct influence of the corporate sphere. Nothing is, of course, outside its indirect influence.

        The most interesting part of all of this, to me, is that academia has come to almost completely replicate the system of labour relations present within the corporate sphere, despite its nominal and actual economic independence. Academia is actually its own little ponzi scheme, with tens of thousands of freshly minted PhDs generated every year, and a mere handful of postdocs, much less faculty positions available (industry is basically a joke- as I noted, there is effectively no research occuring in industry outside the MIC). Miller Mccune had a good discussion of this last year:


        So we end up with a tiny superstratum of insanely privileged (mostly white male) faculty members autocratically running labs full of Chinese and Brazilian students and postdocs being paid, in many cases, substantially less than minimum wage. Sound familiar? The insane thing about this tiny microcosm of the global economy is that there is ABSOLUTELY NO REASON WHATSOEVER that it needs to exist. Scientists are perfectly capable of performing their work in an independent, democratic, self-organizing and self-regulating manner. We routinely do so on a day to day basis- supervisors, like their corporate analogues, have largely abdicated their mentorship and even supervisory functions in favour of the ethereal realm of “management”. This, to me, is the most perverse part of academia. The disease of neoliberal “capitalism” has so thoroughly infected our society that even those of us who are most free of its direct constraints are literally replicating almost ALL of its forms!!

        This line of thought makes me nearly apoplectic, so to conclude I’ll turn to address a couple of things I found of interest in Lidia’s remarks.

        With regard to the word “autist”- I’m somewhat hesitant to use it, because the sense in which I use it doesn’t correspond exactly to the medical sense. Lidia does nonetheless appear to understand precisely the meaning I am clumsily using it to denote. Many of these people have a very narrow analytical kind of intelligence, an obsessive drive, and that’s about it. The broader context of what they’re doing is irrelevant.

        I remember toward the end of one of my projects, where I was generating a transgenic mouse. I had to harvest some neonatal mouse calvariae. This is a nice way of saying that I had to remove the skulls of some baby mice. I remember sticking my hand into the pile of mouse pups in the cage, little soft pink kidney beans, and raising up my hands, and laughing, because there were about 10 or 12 pups just stuck all over my hand. They’ll grab on to just about anything, sticky little squeaking kidney beans, eyes still closed. They’re cute as anything. The next thing to do was to lay them out on a piece of paper towel and snip off their heads with scissors. I’d done it before, but there was something different about that day, and I nearly puked my guts out.

        I went back upstairs and described my revulsion to some of my coworkers. A couple understood, but several just didn’t get it (one appeared to pride herself on being unable to empathise with a mouse). I remember saying that I felt like the mouse equivalent of a Nazi concentration camp guard. All explicitly rejected that analogy. I concluded by saying that I supposed the only way for me to justify my actions was to fall back on moral worth theory- I don’t think any of them were familiar with it. Indeed, I don’t think I’ve met more than a handful of scientists who could clearly articulate the moral basis for conducting their work.

        In any case, my point with that story is to point out the absolute moral vacuum in which many scientists operate. It doesn’t surprise me to hear of Lidia’s perception that most scientists have a purely utilitarian or instrumentalist approach to life. This has been thoroughly inculcated in us by our education, which, I contend, deliberately excludes humanistic or moralistic topics. I would go so far as to say that this attitude typifies our elites in general. I’m not so sure that it has completely corrupted society at large, but we’re getting there.

        As a last note for Lidia- the kind of narrow molecular focus you speak of is no longer in vogue, and cell biology is back in fashion. We also now have the field of “systems biology”, which supposedly involves the study of the interdependency of elements in a system. Although this is still very much an issue of what terminology is sexy and will get you published, I think this is a deeply healthy development. I just wish that the scientists who claim that the holistic study of systems and interdependencies would begin analysing their own departments, institutions, and societies under that lens.

        Comment by paper mac — January 23, 2011 @ 7:46 pm

      • Thanks for that, paper mac. There’s lots of interesting points there.

        Based on what you replied to Lidia, I take it you weren’t rejecting my characterization “sociopathic”, but only that it was mostly being corporatized.

        As far as corporatization of research, part of my meaning was that research whose corporate utility isn’t immediately apparent is being neglected, defunded, marginalized, and disparaged. So that research is simply less and less likely to exist, while available funding is funneled into corporate-friendly research. I thought that sort of academic Darwinism was well-advanced. Are you saying that’s not the case?

        On a related topic, I don’t remember if we mentioned it here, but did you see this:


        Apparently being dean at a midwestern agricultural school means you don’t think science has anything to say about whether or not cattle evolved to eat corn (which is of course not indigenous to the Eastern Hemisphere where cattle originated).

        As I’ve always said, if there were a corporate reason to deny the theory of gravitation, we’d have the theory of Intelligent Falling.

        And sure enough, we now learn that there was actually corn in the Garden of Eden, and that’s what cattle originally ate there. They only ate grass after the Fall. Only then did they start having those four stomachs.

        So you see how nicely it fits into the story of the New World as a God-given bounty to European settlers. Put it together with Robert Reich’s important scriptural discoveries:


        and we can see how it all falls into place.

        Comment by Russ — January 24, 2011 @ 5:45 am

      • Paper mac, I can’t reply to your comment directly but I hope you see this: thank you for taking the time to sketch out the current state of things, as you see it. Particularly insightful are your observations about the labor structure. I’m heartened that there is a return to a more wholistic approach in biology, though I hope it is not merely a function of the fads that you also described.

        In recent thoughts about my earlier comments has been the difference between “science” and “technology”; “science” connotes knowing just for knowledge’s sake, a positive illumination, while “technology” connotes putting tools to practical use, generally ushering in the profit motive. What I experienced in my undergraduate education was less science and more technology. Looking back, this should not have been surprising but, at the young age at which one makes these sorts of choices, the confluence of the two might have been understandable.

        Re. the baby mice. Thank you for sharing that, as it is exactly the sort of thing I am talking about, and I agree that such desensitization is Nazi-esque. One acquaintance of mine ran a lab in which he routinely performed electrical experiments on the brains of living cats. It is “work” that I could not imagine doing. And yet there is faith that it is somehow necessary… to what justifiable end I cannot say.

        Another aspect of this autistic narrowing is quite similar, I think, to the narrowing of scope that we see in the practice of economics, that there are just “faith-based” assumptions about basic principles that are entirely wrong-headed, whose gross errors are invisible to the initiates of the cult. Not seeing the “garbage in”, they obviously don’t see the “garbage out”.

        A further case in point (different acquaintance, head of a stem-cell research lab) was a seemingly intelligent guy who, nonetheless, signed up for that cryogenic service where they’re going to freeze you in order to bring you back to life at some future point when humanity will have all the technology necessary to raise people from the dead. As if this weren’t absurd enough, he was going for just the head freezing! 😀

        I hope I don’t offend you in saying that, while I think that genetic experimentation is interesting as science, my instinct is to reject it as technology. The number of people who are likely to benefit from genetic research is miniscule compared with the number of people who could benefit from an equal amount of energy and thought and material resources applied to problems of potable water, of pollution, of overpopulation, or towards a serious approach to permaculture, just to name a few things.

        Aside from that, though, where will the money even come from in the future to continue funding such work in a process of catabolic collapse? I probably would not have said this back in the day, but looking at what seems to be our future, I don’t see how such research (regardless of its moral dimensions) has a practical future. Like growth in all other areas, growth in R&D is going to ultimately be constrained by physical limits. I know an international patent attorney here in Italy, who says that he has never seen anything like the current climate: that, from what he sees, companies are gutting their R&D budgets, a process he regards as self-defeating (here Greer’s use of the word “catabolic” would be apt).

        In the meantime, right in the good old USofA people are currently dying because of being kicked out of their homes, or kicked off their health insurance, so it seems immoral to me that these “cheap” things would not be addressed before pouring resources into esotericisms. But, you’re right, all our “education” has led in the direction of reductionism, so it’s hardly a surprise that we have ended up where we are, and we certainly do have some ways to go along this path, with a deliberate sea change not apparently in the cards.

        This brings up larger questions of the ethics and politics of individualism (which would seem to be a form of reductionism). I would dare to say that the predominant American religion is also a factor, rejecting interconnectedness in favor of a rigid dualism.

        P.S. Here’s a fantastic example of transgenics and “garbage in, garbage out”… literally:

        GMO pig is developed as a technology to “solve” part of the problem of the destructive technology of intensive gargantuan feedlot operations. I find this a very “Dominionist” approach to the problem.

        The article states that “[i]n 1940 the food system produced 2.3 calories of food energy for every calorie of fossil-fuel energy used in production. The energy cost included all aspects of production and delivery. In 2008 only one calorie of food energy at the supermarket was produced for every 10 calories of fossil-fuel energy used in production.” This—bizarrely enough— is cited as justification for the intensive gargantuan feedlot full of Enviropigs!! There is systematic resistance to asking the real question, which is “what were we doing right in 1940, and what are we doing wrong now?”. And yet that is exactly what a Real Scientist would, or should, ask. Instead, scientists are brought to bear in a process akin to leeching, furthering the degree of destruction with their nominal “cures”.

        Comment by Lidia — January 24, 2011 @ 8:28 am

      • Russ, I hadn’t seen your reply to paper mac before I commented, above, but I see that you, too, are picking up on the religious dimension at work here.

        I’m going to bookmark that King Corn article. It ties in nicely with Enviropig.

        Comment by Lidia — January 24, 2011 @ 8:37 am

      • I was mostly being facetious, comparing corporatist lies and myth-making with religious fundamentalism.

        Although those two are often interlinked, and sure have a lot in common, morally and intellectually.

        Your comments about building to the Tower of Babel higher and higher, as technicians must take ever more radical measures to temporarily fix the crises they themselves play such a role in generating, makes me think of the metabolic rift as described by Julius Liebig and Karl Marx, especially as exemplified by the “separation of town and country”:


        The classical problem: The soil cycle is broken, as nutrients which should have gone back into the soil as manure and crop refuse are instead removed from the farm and exported to the city, where they create a waste problem.

        Meanwhile those natural soil nutrients have to be replaced by imported commodified fertilizer (in the 19th century, guano; in the 20th, even more toxic synthetic). This weakens the soil, exposes it to erosion, and generates its own toxic waste problem.

        So capitalism took a well-balanced natural system and replaced it by two imbalances, two sets of artificial problems.

        Those environmental problems are in addition to all the socioeconomic detriments of the setup.

        Every aspect of it has gotten much worse since Liebig and Marx were writing.

        Comment by Russ — January 24, 2011 @ 8:59 am

      • Thanks for the discussion, folks. It is helping me clarify some of the issues I eventually want to try to articulate, although my thought process on this matter is still a little disjointed.

        “Based on what you replied to Lidia, I take it you weren’t rejecting my characterization “sociopathic”, but only that it was mostly being corporatized.

        As far as corporatization of research, part of my meaning was that research whose corporate utility isn’t immediately apparent is being neglected, defunded, marginalized, and disparaged. So that research is simply less and less likely to exist, while available funding is funneled into corporate-friendly research. I thought that sort of academic Darwinism was well-advanced. Are you saying that’s not the case?”

        The funding situation is more complex than that- as I noted, funds are mostly disbursed by scientists themselves, who by and large don’t have an agenda which is congruent with the profit motive of corporations. It’s true that some funds have been shifted into lines of inquiry that are more amenable to commercialisation, but that’s happened to a relatively limited extent over the last 30 years.

        We constantly hear scientists complain about funding. The reality is that funding levels have been more or less stable over the last 3 decades. For reference, 2006 was the first time that the NIH budget declined since the ’80s. Scientists like to talk about funding rates, not absolute levels of funding- e.g. 7% of NIH applications were funded in FY 2010, rather than, NIH disbursed x billion dollars in FY 2010. This is the ponzi scheme at work. Scientists take on 5, 6 PhD students at a time, those students go on to postdoctoral positions and start applying for faculty positions, and suddenly 10 years later 5 billion dollars has to be split up between many more researchers. “Funding rates” drop precipitously and everyone runs around screaming, but funding levels haven’t actually changed much.

        My contention is that scientists have actually done a pretty good job running academic research into the ground by themselves, and that external corporate influence has been less important to this decline than the “internal corporatisation” of science I described above- the wholesale adoption of the values, practices, and labour relations of the globalised neoliberal corporate world, despite the lack of any internal rationale requiring this. We even have our own absurd statistical measures of productivity which we juke for personal gain, just like the financial industry.

        I don’t deny the pernicious influence of corporations on institutional administration and so on. My broader point is that the fecklessness, the moral vacuity, and the complete and utter inability to address society’s actual problems are a function of a disease internal to the scientific community itself. This shows how easily an entire community which once prided itself on its humanistic values and moral leadership can be utterly corrupted merely by coexisting in the same economy as corporations. The presence of the corporate sphere is incompatible, in my view, with the practice of the scientific method.

        As to whether scientists are sociopaths, as individuals I would say some are, most are not. They are, however, tremendously ignorant. Lidia is correct to observe that an undergraduate education is essentially vocational training. It leaves students without a moral education, without a humanistic education, without a sense of their place in the world and the absolute requirement to place the scientific endeavour within a context that acknowledges the requirement that it advance the broader interests of society. Graduate education is little better.

        I should emphasize that the amounts of money scientists squabble over are rounding errors compared to military or corporate budgets, or the bailouts. I think of a few million as big time money, because I could run a highly productive lab with 10 or more staff for a couple years on that kind of cash. That said, I think Lidia is correct that in a state of catabolic collapse, it will be impossible to justify subatomic research or proteomics and the like. We’re starting to enter a “catabolic collapse”-type era in funding right now. The vicious cuts in the UK are a good example, as is the sudden transfer of Singapore’s lavish funding for basic science to translational research. People in the future will bemoan the destruction of science by the corporate sphere, but I want to bear witness to the fact that we did it to ourselves first.

        It is my firm belief, as I noted above, that the practice of science must be placed within the context of productive endeavours that benefit the group employing the scientist. Ideally, I would like to train everyone I work with, regardless of background, in the use of the scientific method. We don’t need multi-million dollar labs when every member of a cooperative knows how to run a little controlled experiment to determine the best, most ethical way to perform a task.

        “I hope I don’t offend you in saying that, while I think that genetic experimentation is interesting as science, my instinct is to reject it as technology. The number of people who are likely to benefit from genetic research is miniscule compared with the number of people who could benefit from an equal amount of energy and thought and material resources applied to problems of potable water, of pollution, of overpopulation, or towards a serious approach to permaculture, just to name a few things.”

        100% agree with you, and I’m speaking as someone whose bread and butter is hacking genomes. The priorities in science are completely disconnected from our actual needs- we need research into permaculture, pollution, energy, etc. We don’t need transgenic factory pigs and the like. Transgenic and knockout organisms are tremendously useful tools (sorry for the instrumentalist terminology) to study biological systems, but going forward I think in general they will not be a justifiable use of resources.

        That said, I see two legitimate uses for the generation of transgenic organisms. The first is educational. For a few grand and a few months work, I can do something like produce a zebrafish with a fluorescent protein in its cardiac myocytes that will allow a child to literally watch the embryonic fish heart be assembled in real time in the intact organism (zebrafish embryos are, conveniently, transparent). There is intrinsic value in this kind of thing, I think- being able to literally show someone how a few cells can self-organise into a beautiful, insanely complex life is very powerful, to me. The fish lives a normal, healthy life (other than its capitivity), a student gains wisdom and insight, and the resources involved are minimal.

        The second is the engineering of bacteria and other microscopic organisms for use in contained systems. I don’t see any ethical issue in modifying bacterial genomes, and I believe that a well-informed cooperative work unit could effectively implement the use of engineered bacteria to perform industrial and chemical processes that would otherwise be well beyond their reach. Their value as an asymmetric weapon against corporate domination of complex chemical processes (water purification, production of medicine, etc) merits the consideration of their use in limited circumstances. I do believe, however, that only a truly democratic society is capable of safely and wisely using genetic engineering techniques.

        Thanks for letting me ramble on!!

        Comment by paper mac — January 25, 2011 @ 12:54 am

      • Thanks again for your perspective. The corruption wrought by corporatism goes way beyond just direct domination, as you describe.

        Such attitudes have permeated the people in general in many ways.

        I agree with your thoughts on how science has to be embedded in the community, and how much of its most beneficial work could be undertaken on a broader basis than that claimed by advocates of hyper-sepcialization and academic credential enclosure.

        It seems to me that science, taken as a “sector”, has mostly matured just like the capitalist economic sectors. It’s true we don’t yet have a cure for cancer, but other than a few things like that I just don’t see how technology isn’t at the stage of worthless embellishment to prop up the equivalent (or actuality) of brand diffentiation of things which, for all functional purposes, have already reached their most worthwhile state.

        It’s also obviously true that under these tyrannical conditions, even if science did nominally find a cancer cure, that cure wouldn’t really exist since it would be commodified and rationed by wealth. Even though the people paid for the research.

        And yet the technophile brainwashing (including the notion that it has to be done on an elite hierarchical basis) runs deep. Even among anarchists who don’t work in any such field, I’ve found people prone to bristle at the suggestion that from the people’s point of view there’s no longer such a thing as scientific progress, at least under these kleptocratic conditions. I didn’t bother trying to argue that the sectors are largely mature regardless.

        Comment by Russ — January 25, 2011 @ 2:24 am

  3. Yep. Looks like economic fascism to me. Profits matter, people don’t matter. Personally I think good old mother earth will eventually shake off this superfluous civilization like a dog shakes water off its back. At least that is what I’m hoping for. Call it what you want, things are not likely to get better through the so-called democratic process any time soon. In the meanwhile like you, Russ and readers, I try to educate my fellow citizens as to what is happening and what it all means (I meet with considerable opposition, too!) But having direct experience living under fascism (Pinochet in the 70s), I estimate 9 of 10 of my countrymen don’t have a clue what fascism is and moreover would welcome it. At least that is my opinion. Keep up the good work, one and all.

    Comment by Kurt — January 20, 2011 @ 9:28 pm

    • Thanks Kurt, and happy hunting for your good work as well!

      For the average middle class conformist, did the Pinochet “order” seem much different from what we have here?

      And were many of his victims taken by surprise at the outset? Very few leftists fled Germany immediately when Hitler came to power. Amazing as it sounds today, most of them laughed and said, “Now he’ll fall flat on his face, since he can’t just bluster anymore. Now he has to deliver on his promises.”

      So most of them were taken completely by surprise when within a few weeks they were arrested and thrown into makeshift concentration camps. That’s how fast and “without warning” it happened there.

      I suppose it couldn’t have been that much of a surprise in Chile, since Pinochet came to power through a violent coup in the first place.

      Comment by Russ — January 21, 2011 @ 5:18 am

  4. Yes, the coup was a surprise and a relief to suffering middle class chileans in 1973. However, no one anticipated that the Pinochet order would last so long or be so repressive. A poster of the era depicted the generalissimo holding a little girl with the caption !Tu futuro!

    There are similarities between then and now, between there and here: the excessive militarism, the blatant propaganda, the financialization of fraud, the commodification of risk, the relentless grind of neo-liberalism.

    This week I received a survey from my congressman who shall remain nameless due to the acute embarrassment I suffer every time he appears in the press. He asks me to prioritize the 112th Congress’s work: my choices are lowering unemployment, reducing federal spending, stopping illegal immigration, reforming entitlement programs, and HUNTING DOWN TERRORISTS! The Pinochet propaganda machine used to talk about hunting down subversives. The American propaganda machine talks about hunting down terrorists. The same old shit with a different set of flies.

    Another question asks whether Congress should completely repeal 100% of the government takeover of health care? Yes or no. Personally, I would prefer to have precisely what my representative has: government health care! His duplicity is completely lost on his constituents. So, like middle class chileans then, middle class Americans now will flap like leaves which ever way the wind blows, at least in these parts. During the health care debate in the prior year, several hotheads about punched me in the face for simply asking what was the difference between a corporate bureaucrat and a government bureaucrat anyway?

    Be happy and God bless!

    Comment by Kurt — January 21, 2011 @ 10:33 am

    • several hotheads about punched me in the face for simply asking what was the difference between a corporate bureaucrat and a government bureaucrat anyway

      Yup. An authoritarian’s an authoritarian, whether he’s been brainwashed into direct corporatism or liberal statism. Which is really the same corporatism, but they launder it through support for big government; and conservatives support big government as well, but launder it through support for corporate welfare disguised as “the market”.

      Comment by Russ — January 21, 2011 @ 2:54 pm

  5. We just had the perfect example of corporatist regulatory capture. Jeff Immelt has just been named to replace Paul Volcker. Immelt is a full-blown corporatist. Among other things, Immelt used his position on the Board of the New York Fed to get the FDIC to insure the toxic mortgage backed securities sitting in GECC for $126 billion in US taxpayer money. Immelt is a senior member of the Mafiocracy that has crushed the US middle class during its occupation of America.

    For those Goldmanites, who want cap-and-trade to tax what’s left of America’s middle class into the poorhouse, Jeff Immelt is there man. How’s this for a brief dissertation of GE’s US Government takover?

    “Except for maybe Google, no company has been closer and more in synch with the Obama administration than General Electric.

    First, there’s the policy overlap: Obama wants cap-and-trade, GE wants cap-and-trade. Obama subsidizes embryonic stem-cell research, GE launches an embryonic stem-cell business. Obama calls for rail subsidies, GE hires Linda Daschle as a rail lobbyist. Obama gives a speeech, GE employee Chris Matthews feels a thrill up his leg. I could go on.

    Then there’s the personal connections: CEO Jeff Immelt sits on the President’s Economic Recovery Advisory board and was asked by Obama’s Export-Import Bank to the opening act for the President at the most recent Ex-Im conference.

    Finally, there’s the philosophical similarities. Days after Obama promised in his inauguration to “remak[e] America,” Immelt wrote to shareholders:

    “The interaction between government and business will change forever. In a reset economy, the government will be a regulator; and also an industry policy champion, a financier, and a key partner.”

    Immelt and his GE cronies are also the corporate kings of outsourcing.

    “While there are no numbers, anecdotal evidence suggests that scores, perhaps hundreds, of former GE executives and consultants play key roles as both suppliers of outsourced services and customers for them. “Every time we have an outsourcing forum, it’s like a GE alumni association meeting,” says Sunil Mehta, vice-president of NASSCOM, India’s software industry association.”

    “GE initially owned all of Genpact, then cut its stake to 40% in a 2005 deal with the two private equity firms.” GE netted $500 million on that sale of the outsourcing firm it created.

    In 2010, “General Electric Co. collected another $300 million by selling half its stake in Genpact Ltd., the India-based outsourcing firm it started”

    “GE was among the first American companies to set up business processing outsourcing operations in India, taking advantage of the large pool of English-speaking workers ready to work for low wages and tech-savvy entrepreneurs in the South Asian nation.”

    Comment by black swan — January 21, 2011 @ 10:57 pm

    • I thought it was funny how many commentators were calling this a good thing because “this guy actually knows how to make stuff; he’s a real businessman.”

      I don’t know how many of them were ignorant of the fact that he’s primarily just another bankster, and how many were lying.

      (I can picture the ignoramuses who make up the Obama cult thinking GE is still a maunfacturing company.)

      Comment by Russ — January 22, 2011 @ 2:38 am

    • “The interaction between government and business will change forever. In a reset economy, the government will be a regulator; and also an industry policy champion, a financier, and a key partner.”

      That quote perfectly encapsulates the economic fascism this post was about.

      Comment by Russ — January 22, 2011 @ 2:40 am

    • Black swan , good to see you again. Excellent comment.

      Comment by Lidia — January 22, 2011 @ 5:46 pm

  6. Russ, I really enjoyed your typo ‘Interent’ in one of the early rejoinders; I’m hoping that it will become part of the current lexicon. Food wars are all the rage. Most of the ‘middle class’ don’t know that they’ve never been in it. The middle class is Timmah. If you can’t find a buyer for your $1.5 million house, then I guess you’re with him; otherwise you’re Poor. People, Get Ready, Unite!

    Comment by tawal — January 22, 2011 @ 4:08 am

    • Ha, yes. The rentiers trying to turn it into the Inter-rent.

      I guess it will become more and more clear to the former middle class that they’re no longer in it, if things keep going the way they are.

      Comment by Russ — January 22, 2011 @ 5:10 am

  7. Russ,

    Interesting discussion over at NC responding to the Matt Stoller post that I’m just now finding the time to read.
    When you, lambert strether and others challenged Stoller’s idea for reforming the system with “trusted public entities” (hah, that’s a good one!), he basically just threw up his hands and admitted he had no ideas whatsoever.

    I guess these people are not used to being challenged at all, they’re used to being listened to instead.

    I liked your response: “On the contrary, it’s the reformists who keep proposing ad nauseum the same things which have already failed who are clearly throwing up their hands since they’re out of ideas.”

    Then why do they keep wasting our time with this crap that all we need to do is to somehow find a mythical creature known as a better Democrat or a better elite?

    Just another sign, as if we needed one, that the system is truly corrupted beyond reform.

    Comment by Frank Lavarre — January 22, 2011 @ 9:31 am

    • Thanks, Frank. I guess for most people who are going to evolve at all, the evolution takes time and goes in stages. At least acknowledging kleptocracy is a step further than most have gone. The next step is to reject both Washington parties. The next step is to acknowledge representative government and capitalism themselves as intrinsically malign and certainly as failed, by any human standard.

      Then one finally accepts true political and economic democracy.

      It took me a while to get there. (Although I skipped the Washington step, never having embraced either Party. But for a long time I still thought vaguely in terms of “alternatives”, before I realized we don’t need and shouldn’t want “parties” or “government” at all.)

      Comment by Russ — January 22, 2011 @ 10:04 am

    • Did you see that Brad DeLong issued an interesting repudiation of a few of his previously held tenets?:


      here are five things that I thought I knew three or four years ago that turned out not to be true:

      I thought that the highly leveraged banks had control over their risks. With people like Stanley Fischer and Robert Rubin in the office of the president of Citigroup, with all of the industry’s experience at quantitative analysis, with all the knowledge of economic history that the large investment and commercial banks of the United States had, that their bosses understood the importance of walking the trading floor, of understanding what their underlings were doing, of managing risk institution by institution. I thought that they were pretty good at doing that.

      I thought that the Federal Reserve had the power and the will to stabilize the growth path of nominal GDP.

      I thought, as a result, automatic stabilizers aside, fiscal policy no longer had a legitimate countercyclical role to play. The Federal Reserve and other Central Banks were mighty and powerful. They could act within Congress’s decision loop. There was no no reason to confuse things by talking about discretionary fiscal policy–it just make Congress members confused about how to balance the short run off against the long run.

      I thought that no advanced country government with as frayed a safety net as America would tolerate 10% unemployment. In Germany and France with their lavish safety nets it was possible to run an economy for 10 years with 10% unemployment without political crisis. But I did not think that was possible in the United States.

      And I thought that economists had an effective consensus on macroeconomic policy. I thought everybody agreed that the important role of the government was to intervene strategically in asset markets to stabilize the growth path of nominal GDP. I thought that all of the disputes within economics were over what was the best way to accomplish this goal. I did not think that there were any economists who would look at a 10% shortfall of nominal GDP relative to its trend growth path and say that the government is being too stimulative.

      These are things that make one want to laugh right out loud! And yet this is one of the LESS-deluded professional economists…

      Frank, your comment, “I guess these people are not used to being challenged at all, they’re used to being listened to instead,” made me think of this recent post. The commenters there are frequently other academics, and it’s painfully clear the sort of bubble they live in.

      Comment by Lidia — January 22, 2011 @ 3:10 pm

      • I didn’t read that post, but I saw excerpts from it, and had the same response you did. It’s hard to believe anyone could have been stupid enough to ever believe that stuff. Doesn’t this guy know any history? Or simply have common sense?

        I don’t know him anywhere near as well as Krugman, but they say he and Krugman are basically the same weenie neoliberal trickle-down corporatist who tries to be evil but doesn’t have the belly for it.

        This idiot really thinks that the likes of Stanley Fischer and Robert Rubin are respectable people, and can’t see that they’re nothing but gutter criminals ornamented by a kleptocratic system which has simply legalized history’s worst organized criminal enterprises.

        Somebody ought to start a blog dedicated to drawing up detailed New Nuremburg indictments against all the upper-echelon figures of the neoliberal conspiracy against peace. The counts could even be the same as at the old tribunal, since almost everywhere it’s gone neoliberalism has meant vicious massacre and war.

        Comment by Russ — January 22, 2011 @ 4:09 pm

      • DeLong was apparently brainwashed when he worked under Summers in the Clinton Treasury. How could he possibly have guessed that the Commodity Futures Modernizztion Act of 2000, nicknamed “the Enron loophole”, could destroy the US Economy? The Clinton Treasury, with Rubin, Summers, Geithner, DeLong and Roubini, turned out to be the banksters’ Trojan Horse.

        Aside from passing the Enron loophole, these guys were able to repeal the Glass-Steagall Act and vitiate the States’ rights to enforce anti-bucket shop laws. So now, after only 21 years, DeLong is contrite. Sorry Brad, much too little, much too late.

        Comment by black swan — January 22, 2011 @ 4:14 pm

      • I forgot that he was a Summers flunkey. Yeah, he’s quite a piece of work. No wonder he idolizes Rubin.

        Comment by Russ — January 22, 2011 @ 6:15 pm

      • Krugman is absolutely one of the “autistics”, as I see it.

        Living abroad, the only US periodical I follow recently is the New Yorker, just because it is a real “magazine”, i.e., grab-bag of various stuff. They did a (relatively fond) profile of Krugman, and he is the perfect poster child for this sort of academic/institutional personage:

        I don’t think DeLong and Krugman “try to be evil”. I think they are concerned with the general welfare to the extent that they can be. But I also see that they have been co-opted as tools, through money and other perks. They may have had integrity at one time in the distant past.


        ““We first fell in love with St. John,” Krugman says. “It was New York lawyers who’d decided to give up on the whole thing and live on a houseboat and wear their gray ponytails.”
        “But St. John went too upscale,” Wells says.
        “Our complex is more Midwesterners. Retired car dealers and so on.”

        My ex-business partner goes yearly to St. John. It’s the retreat for a certain type of “unassuming” liberal-acquisitive upper-middle-class, as far as I can tell. You can fly down there, camp on the beach, and pretend you’re not part of the bourgeoisie! cough, cough…

        Comment by Lidia — January 22, 2011 @ 6:18 pm

      • Well, Krugman’s the kinda guy who feels the need to admit that Goldman Sachs is “bad for America” in the same column where he insists that nevertheless we had no choice but to bail out them and all the banks, and live under their tyranny in perpetuity.


        Then there was his shilling for the health racket bailout where from day to day he kept flipping manic-depressively between saying “it’s not very good, but we can build on it” and calling it a “great progressive achievement!”

        Not to mention how he was so eloquently against Bush’s war but has nothing to say now that it’s Obama’s war. He can’t quite bring himself to openly support it, however much he no doubt would like to do it for the team. (Needless to say, he no longer opposes it. If he still opposes a war of aggression but keeps his mouth shut out of partisan deference, that’s the most despicable thing of all.)

        So those are examples of why I say he’s evil but squeamish about it.

        (Although on second thought, he wasn’t squeamish at all in his globalizer salad days in the 90s. Back then he was writing manifestos with titles like “In Praise of Low Wages” and celebrating factory farms.)

        But you may be right about his technocratic traits as well. This discussion made me recall a comical incident not long ago where Krugman and Delong were exchanging ideas on how “maybe we need to infuse economics with some moral ideas!”

        Good idea – but these clowns clearly had no clue how to go about it. Not their thing, as their criminal careers demonstrate.

        Comment by Russ — January 22, 2011 @ 6:38 pm

  8. The man who shaped Obama’s economic policy0–’nuff said:

    “WASHINGTON — Top White House economic adviser Lawrence Summers received about $5.2 million over the past year in compensation from hedge fund D.E. Shaw, and also received hundreds of thousands of dollars in speaking fees from major financial institutions.

    A financial disclosure form released by the White House Friday afternoon shows that Mr. Summers made frequent appearances before Wall Street firms including J.P. Morgan, Citigroup, Goldman Sachs and Lehman Brothers. He also received significant income from Harvard University and from investments, the form shows.

    In total, Mr. Summers made a total of about 40 speaking appearances to financial sector firms and other places, with fees totaling about $2.77 million. Fees ranged from $10,000 for a Yale University speech to $135,000 for an appearance paid for by Goldman Sachs & Co.

    The disclosure — in a financial report that is required for federal office holders — comes as Mr. Summers is involved in shaping the Obama administration’s policy decisions on the financial meltdown as well as the broader recession. Among the many decisions the economic team has wrestled with has been whether to step up regulation of hedge funds, one of the most contentious subjects during a summit of world leaders this week. European nations pushed for tougher rules, while the Obama administration preferred a less stringent approach.”

    Comment by black swan — January 22, 2011 @ 8:14 pm

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