Imagine

Living in a Socialist U.S.A.

Frances Goldin, Debby Smith, Michael Smith, Frances Goldin, Debby Smith, Michael Steven Smith

• Publisher: Harper Perennial
• Year: 2014
• Print ISBN:
  9780062305572
• eBook ISBN:
  9780062305589
• Topic: Politics & International Relations
• Subtopic: Social History
• Index: Politics & International Relations

The polar ice caps are melting, hurricanes and droughts ravish the planet, and the earth's population is threatened by catastrophic climate change. Millions of American jobs have been sent overseas and aren't coming back. Young African-American men make up the majority of America's prison population. Half of the American population are poor or near poor, living precariously on the brink, while the top one percent own as much as the bottom eighty. Government police-state spying on its citizens is pervasive. Consequently, as former President Jimmy Carter has said, "we have no functioning democracy."

Imagine: Living In a Socialist U.S.A., edited by Francis Goldin, Debby Smith, and Michael Steven Smith, is at once an indictment of American capitalism as the root cause of our spreading dystopia and a cri de coeur for what life could be like in the United States if we had economic as well as a real political democracy. This anthology features essays by revolutionary thinkers, activists, and artists—including Academy Award-winning filmmaker Michael Moore, civil rights activist Angela Davis, incarcerated journalist Mumia Abu Jamal, and economist Rick Wolff— addressing various aspects of a new society and, crucially, how to get from where we are now to where we want to be, living in a society that is truly fair and just.

This visionary anthology tackles the biggest crises of our time with concrete proposals for:

• A Vision for Socialism: Move beyond a simple critique of capitalism to a tangible vision for what a just, democratic, and fair society in the United States could be.
• Ecosocialism and Sustainability: Confront the ecological crisis head-on with proposals for a society that prioritizes planetary health over corporate profit, addressing the root causes of climate change.
• Economic and Social Justice: Tackle systemic problems from mass incarceration and racial inequality to housing and healthcare, with essays from leading thinkers like Angela Davis and Mumia Abu-Jamal.
• The Path Forward: Go beyond theory with actionable ideas for how to get from here to there, featuring a proposal from filmmaker Michael Moore on the future of grassroots political activism.

Section 1

WHAT’S WRONG WITH CAPITALISM?

Chapter 1

Capitalism: The Real Enemy

Paul Street

I threw families onto the street in Iraq only to come home and find families thrown onto the street in this country in this tragic and unnecessary foreclosure crisis. We need to wake up and realize that our real enemies are not in some distant land, and not people whose names we don’t know and cultures we don’t understand. The enemy is people we know very well and people we can identify. The enemy is a system that wages war when it’s profitable. The enemy is the CEOs who lay us off from our jobs when it’s profitable. It’s the insurance companies who deny us health care when it’s profitable. It’s the banks who take away our homes when it’s profitable. Our enemies are not 5,000 miles away: they are right here at home.

—Mike Prysner, testimony to the Iraq Veterans Against the War “Winter Soldier” Hearings, March 13, 2008

Mike Borosky’s Story

Where to begin in evoking the horrors of capitalism in the contemporary United States? We could start with the experience of Mike Borosky, a former factory worker from Pennsylvania. In January 2011, while the media focused on the democratic upheavals in Tunisia and Egypt, Borosky learned that the Coleman pop-up camper trailer factory in the town of Somerset, where he had been employed for more than thirty years, was shutting its doors. He got the news just as his wife was being wheeled into an operating room for spinal surgery.

“I was numb,” Borosky, then fifty-three, remembers. “My wife had just gone in for surgery, and I didn’t even have a job. I wasn’t even thinking that I didn’t have health insurance.”

It probably didn’t take long for that second terrible thought to register. The United States is the only country among modern industrialized “democracies” that doesn’t provide universal health care for its people. With its archaic system of employment-based health insurance, it is a nation in which workers fear not merely the loss of their jobs but consequently losing health insurance coverage for themselves and their families as well.

Soon Borosky learned that FTCA Inc., which had taken over the Coleman plant years before, had failed to pay the health insurance premiums for its workers. That left him stuck with more than $63,000 in medical bills. FTCA was owned by Blackstreet Capital, a private-equity firm that managed hundreds of millions of dollars in investment capital. Blackstreet claimed there were no funds left to pay the Coleman plant’s 150 employees any of the benefits owed them under their union contract. FTCA abruptly closed the factory without issuing the 60-day notice required under federal law. It cancelled workers’ health insurance and refused to pay severance and accrued vacation time or to make good on the contributions it owed to their 401(k) retirement accounts.

Borosky’s story was told in the winter 2012 issue of the United Steelworkers’ (AFL-CIO) magazine. That issue also reported that Whirlpool, the world’s leading appliance manufacturing corporation, would soon close its large refrigerator plant in Fort Smith, Arkansas, and send much of its production to Ramos Arizpe, Mexico. Whirlpool blamed sluggish demand for appliances—the same reason it gave in 2010 for closing a refrigerator factory in Evansville, Indiana, and transferring that plant’s work to Mexico. That move cost the United States a thousand jobs, a standard chapter in the familiar story of capitalists’ longstanding “globalization” campaign. The company had nothing to say about its thirst to boost profits by exploiting cheap labor and weaker environmental regulations abroad.

“Profits Booming, Why Not Jobs?”

A New York Times article published around the same time that Mike Borosky got knocked numb by Blackstreet Capital was titled “Profits Are Booming, Why Not Jobs?” Times business correspondent Michael Powell reported that corporate “earnings” had exploded “even as fifteen million Americans remain mired in unemployment, a number without precedent since the Great Depression” and while the citizenry experienced “record levels of foreclosures and indebtedness.” At the current sluggish level of job growth, Powell noted, the US economy would require seven and a half years just to replace the jobs lost at the beginning of the Great Recession of 2008–2009. Another five million jobs would be needed just for employment to keep up with population growth.

Meanwhile, American businesses reported that profits in the third quarter of 2010 had risen at an annual rate of $1.66 trillion, “the steepest annual surge since officials began tracking such matters 60 years ago. It was the seventh consecutive quarter in which corporate profits climbed,” Powell noted.

Powell found numerous reasons for the profits-jobs disconnect. US-based corporations now made a remarkable portion of their profits overseas. Thanks to lax American tax laws, “these companies return fewer of those profits to American shores than in the past.”

Some big American firms were showing higher profits simply because their competition had collapsed. After the financial crash of 2008, for example, Wall Street giants Goldman Sachs and JPMorgan Chase no longer had to compete with Bear Stearns, Lehman Brothers, and Merrill Lynch. Many jobs disappeared with the departure of the defeated firms.

In the wake of the crash, many companies sat on capital and stored up liquidity like never before. Firms who no longer believed they could borrow quickly decided to keep a lot more cash on hand as a precaution. The falling interest rates produced by the recession gave corporations an incentive to simply “exploit the spread” between the low cost of borrowing and the higher rates of return on federal Treasury bonds they purchased with cheap loans. This let them make money without selling much or hiring new workers.

Meanwhile, a large reserve army of unemployed workers was a profits boon to corporate America. Desmond Lachman, a former managing director at Salomon Smith Barney and now a “scholar” at the American Enterprise Institute, an influential right-wing think tank, spoke about this candidly. “Corporations,” Lachman told Powell, “are taking huge advantage of the slack in the labor market—they are in a very strong position and workers are in a very weak position. They are using that bargaining power to cut benefits and wages, and to shorten hours”—and thereby to increase profits.

“A Harsh Environment Is a Good Thing”

“American” capital was also continuing to shift jobs to lower-wage countries. In the era of global capitalism, US capital has gravitated to places like Foxconn’s Longhua factory campus in Shenzhen, China, where wages are low enough for the company to “make products like the [Apple] iPhone at seemingly impossible prices,” as Bloomberg Businessweek wrote.

The entrance to the Longhua campus, the magazine said, “looks like a border crossing, with seven tollbooth-like lanes and uniformed guards.” It has 300,000 workers, who also manufacture Sony PlayStations and Dell computers.

Foxconn employs more than 920,000 workers across 20 mainland Chinese factories. It manufactures products for leading “American” multinational corporations, including IBM, Cisco, Microsoft, and Hewlett-Packard. The workers, mostly 18-to-25-year-olds from rural areas, live in dormitories and are paid a mere $176 per month. The conditions are so alienating that 11 workers committed suicide in early 2010, most of them by leaping from the high-rise dormitories. The company subsequently strung more than 30 million square feet of yellow nets around its buildings and set up a 24-hour counseling center with 100 workers on staff.

The “drab and utilitarian” production complex, as Businessweek described it, includes “huge LED screens that flash public-service announcements and cartoons” and a bookstore that sells the Chinese-language translation of the Harvard Business Review. The bookstore prominently displays biographies of Foxconn CEO Terry Gou, the “Henry Ford of China” and the richest man in Taiwan; Forbes estimates his personal fortune at $5.9 billion. One of the Gou biographies collects his many pithy aphorisms, including the following Dickensian maxims: “Work itself is a type of joy,” “Hungry people have especially clear minds,” and “A harsh environment is a good thing.”

The arduous nature of working-class life in Shenzhen and similar manufacturing zones around the world—Bangladesh, the Philippines, the maquiladoras along the US-Mexican border—is a leading reason why US workers now make only a small portion of many of the consumer goods sold in the United States. A harsh environment for developing-country workers is a good (i.e., profitable) thing for globally mobile “American” capital.

“Ready to Lead”

The American “homeland” has also become a much harsher environment for its working-class citizens. Mike Borosky’s ordeal is one of millions unfolding at the hands of capital here. Since the monumental financial collapse in the fall of 2008 that shook the world and plunged the United States into an epic recession, the signs of destitution have intensified:

• The 2010 Census revealed that a record-setting one in fifteen Americans now live in “deep poverty,” on an income of less than $11,157 for a family of four—less than half the amount the federal government defines as “poverty.”

• By 2010, the total number of Americans living in official poverty reached a historic high of 46.2 million. Over 15 percent of the nation’s population (more than one in seven Americans) lived below the federal poverty line, on incomes of less than $11,139 for a single person or $22,314 for a family of four, a standard that many consider grossly inadequate.

• By 2011, one in six Americans (fifty million, a population twice the size of Texas) had no health insurance, and 14.5 percent of American households were defined as “food insecure”—having difficulties putting enough food on the table.

• A Census report commissioned by the New York Times in the fall of 2011 showed that one in three Americans lived either in official poverty or in “near poverty,” at less than 150 percent of the poverty level.

As usual, the crisis fell hardest on people of color:

• Four of every ten black people of working age were unemployed at some point during 2008 and 2009.

• In thirty-five of America’s biggest cities, during the first half of 2010, the official joblessness rate among black people ranged from 30 to 35 percent—a measure equal to the worst days of the Great Depression.

• The real combined unemployment rate for black and Latino workers (including workers who were involuntarily underemployed) in 2010 was 25 percent.

• The black poverty rate rose to 26 percent, double that of white poverty.

• The difference between the median wealth of white and black households rose to nearly 15 to 1. The median black household’s net worth was only 7 percent of the median white household’s.

• By 2010, more than half the homes bought by black Americans in 2006 had been foreclosed on.

• In 2010, an astonishing half of all US children and 90 percent of black US children had depended on food stamps at some point during their lives.

A De Facto Dictatorship in the Heartland of “The Beacon to the World of the Way Life Should Be”

The Whirlpool Corporation’s sprawling and plush global headquarters is located on the edge of Benton Harbor, Michigan. Its predominantly white managers and staff steer clear of the city proper, whose 11,000 people are 89 percent black. Site of a riot sparked by police brutality in the summer of 2003 (the National Guard was called in), Benton Harbor has a poverty rate of more than 50 percent, a child poverty rate above 60 percent, a deep poverty rate of 26 percent, and a per capita income of around $10,000.

It is plagued by the standard ills that accompany poverty in the militantly business-ruled nation that Senator Kay Bailey Hutchinson (R-Texas) once called “the beacon to the world of the way life should be”: mass unemployment, failing and underfunded schools, crime, drugs, broken government, and endemic despair. Over the last thirty-five years, the once-thriving manufacturing town has been stripped of industrial jobs (Whirlpool and other local manufacturers left for cheaper labor elsewhere); of retail stores (Sears and J.C. Penney left town years ago); of environmental health (the departing manufacturers left behind hundreds of acres of polluted fields and wetlands, including a Superfund site contaminated by radioactive paint); of a favorite local beach (recently appropriated by Whirlpool and upscale developers to create a fancy lakeside golf resort); and now even of its last remnants of formal democracy.

In April 2011, Benton Harbor’s local government was handed over to an “emergency fiscal manager”—a de facto dictator appointed to run the city under a chilling law passed by Michigan’s militantly pro-corporate governor and state legislature. Governor Rick Snyder issued an order removing all powers from the local city council. As the Reverend Jesse Jackson said soon afterward, “No money can be spent, no taxes raised or lowered, no bonds issued, no regulations changed without his approval.”

This can accurately be described as “fiscal martial law.” In the name of balancing the city’s budget, the new czar can sell public assets, revoke labor contracts, dismiss pension boards, and take over pension funds.

Jamie Dimon’s “Earnings”: $57,000 a Day

While lower- and working-class people suffer—particularly people of color—a tiny minority is accruing obscene fortunes and sits atop huge piles of capital. There are more than 3.1 million millionaires in the United States: the proverbial “1 percent.”

Above them are the not quite 57,000 people (0.05 percent of the US population) who have been identified by the global wealth-intelligence firm Wealth X as “ultra-high net worth” individuals. The firm defines these outrageously rich people as anyone with at least $30 million in wealth, “including shares in companies, real estate, cash, art collections, private planes, and other investable assets.”

At the very top, “the beacon to the world of the way life should be” has over 400 billionaires. At the pinnacle, according to Forbes magazine’s list in early 2012, are three men: Bill Gates (net worth $61 billion), Warren Buffett ($44 billion), and Lawrence Ellison ($36 billion). Their combined wealth exceeded the total recession-induced budget shortfalls of every US state government in 2011.

The ultra-rich club includes J.P. Morgan CEO Jamie Dimon, whose net worth is $200 million. Acc...

Table of contents

• Epigraph
• Contents
• Preface by Frances Goldin
• Introduction by Debby Smith and Michael Steven Smith
• Section 1: What’s Wrong with Capitalism?
• Section 2: Imagining Socialism
• Section 3: Getting There: How to Make a Socialist America
• Contributors’ Biographies
• Index
• Praise for IMAGINE: Living in a Socialist USA
• Copyright
• About the Publisher