“The role of oxygen atoms in supply side economics”

October 16, 2012

The title of this blog is meaningless. It was composed by cognitive scientist Daniel Dennett to highlight scientific reductionism; the abandonment of theory, laws, interactions, and deeper understanding of the connections between chemistry, physics, and biology and even social sciences in an attempt to unify them all into a category, which almost always leads to the idea of social Darwinism. What Dennett is saying, is that to break down theories to their bare minimum, and then to attach them to other broken down bare minimum theories in an attempt to unify them, is meaningless at best, and very dangerous at worst.

Recently, the musician Frank Turner revealed that whilst his fans quite enjoy his apparently left leaning political ideals – he is actually a Libertarian. He accuses people of not understanding politics, if they believe that from this, he is a Republican/Tory. He also claims that Fascism, is a Left wing phenomena. Here:

“To start with, most people don’t seem to understand what the difference between left and right is. For example, the BNP are a hard left party.”

– For those of you who don’t know, the BNP (British National Party) is a fascist political party based on race. It has ties to neo-nazi groups, and its leader Nick Griffin once said:

Without the White race, nothing matters. Other right-wing parties believe that the answer to the race question is integration and a futile attempt to create ‘Black Britons’, while we affirm that non-Whites have no place here at all and will not rest until every last one has left our land.”

– He also denies the holocaust happened, believes that there is a Jewish conspiracy to destroy White Europeans, and is good friends with David Duke. For all intents and purposes, the BNP is a neo-nazi. Fascist, at the very least. Which suggests that Frank Turner believes that Fascism is a product of the Left.

This idea – that ‘National Socialism’ or Fascism are products of the Left – is not new. It represents a deeply reductionist understanding of the political spectrum, dismissing all theory and motive, and ending up with ‘well the Nazi’s controlled the State centrally. And enacted some social protections. As did Communist regimes. Therefore, the Nazi’s are a left wing party‘. It is a very very weak understanding of the difference between Right and Left. For the record, I do not place Fascism on the far right. I think the ‘right’ has changed incalculably over the years. And that both Right and Left are almost entirely different to their early 20th century counterparts. As noted in my previous article, the conservatism of Disraeli is similar to the social democratic principles of a politician like Barack Obama today; of which most of those on the right would consider ‘socialist’, whilst 100 years ago, would certainly not have been. The right has (for the sake of argument, though this assertion is debatable also) become a beacon of free market ideals, mixed with a dose of patriotism/nationalism. In that sense, it is not libertarian, as it seeks to strengthen national borders, rather than diminish them. Libertarianism is specifically the free, unhindered movement of labour, capital and goods. It recognises no national borders.

It is fair to say that Fascism and Socialism may have traits in common; central economic planning for example. But, then, so does Libertarianism and Communism; no government, free association, no borders. But the motives and the differences in organisation are enough to render them entirely at odds. The same is true of Fascism and the Far Left.

Turner seems to be suggesting that central economic planning, means far left. Theory, motive, and overriding political aims are ignored entirely. It is supremely reductionist and ignorant. The blurred lines between left and right when it comes to totalitarian dictatorships are often exploited by both sides. Ignore theory, and motive for just a second, and you can come up with all sorts of comparisons.
We can say that Hitler centralised power, providing a dictatorship of the German people. Marxist-Leninism calls for a similar ruler and control over the economy.
We could say that the Nazi’s use of the term ‘work shy’, followed by punishment for refusing jobs, is eerily similar to right winged austerity rhetoric coming out of the Republican/Tory camp.
We could also point out that Thatcher took on, and crushed the power of the trade unions in the 1980s, as did Reagan. Similarly, after coming to power Hitler banned trade unionism entirely.
Both comparisons miss the point; the reason Fascism differs entirely from the far left, is because it bases its entire being, its essence on a community based on race/nationality. The driving force of history, to Fascists, is shared heritage that must be preserved and perpetuated. The central economy of Fascist States thus works to this end and nothing else. When Hitler replaced the trade union movement and imprisoned German socialist leaders in the mid-30s, he created a new movement in order to control the working classes. He called this the ‘German Labour Force’. The name is significant. Before this, the trade union movement and the German communist/socialist groups associated with it, were international in their scope. They supported their comrades around the World. There were not understood in terms of national borders. Suddenly, they became the ‘German’ labour force. Their whole point, was advancement of the nation state. Alongside this new movement cloaked in patriotism, was a list of ‘un-german activities’. This included striking. Anyone who turned down a job in both the public or private sector was named ‘work shy’ and imprisoned. 8.3% of the unemployed were conscripted. It is important to note that a Fascist State depends on the strength of its armed forces, this is Nationalism, not socialism. Here is a song sung by the new ‘German Labour Force’….

“We demand from ourselves service to the end, even when no eyes are upon us.
We know that we should love our Fatherland more than our own life.
We vow that no one shall outdo us in loyalty,
That our life shall be one great labour service for Germany.
So in this solemn hour we pray for blessing on the oath we take,
We thank thee, Fuhrer, that we have now seen thee,
Do thou behold us as thine own creation?
May our hearts ever beat with thy heart’s pulses, Our lives find inspiration in thy love,
Behold us here! Thy Germany are we.”

– This highlights, again, the difference between Fascism and the far left. The far left bases its existence on class. It stands to obliterate class, ending in a completely classless society. Class is the driving force. Race, nationality, religion, sexuality and most other social constructs are not important. This is in stark contrast to what we see in this song. The German Labour Force had a purpose. That purpose was the advancement of the nation. The line: “We know that we should love our Fatherland more than our own life” is the key to the difference between Fascism and the far-left. The far-left is more often than not, completely obliterated by Fascist forces. The Fascism of Hitler attempted to destroy the far-left…. the Fascism of Saddam attempted to destroy the far-left. Fascism cannot abide the far-left. The two are vehemently opposed.

The Nazi Charter of Labour does not grant total control over the means of production to the workers, as you would expect if the Nazi’s truly were a party of the far-left. Instead, it states that the ‘leader of the enterprise’ (also known as the employer:

“……..makes the decisions for the employees and laborers in all matters concerning the enterprise.”

– This, along with the banning of trade unions, cut wages (from 20.4 to 19.5 cents an hour for skilled labour, and from 16.1 to 13 cents an hour for unskilled labour), the banning of strikes, the outlawing of collective bargaining, and the move to make the labour force a cog in the Nationalist machinery suggests unequivically that referring to the Nazi’s as a far-left party, could not be more ignorant of historical fact and the environment in which the left had to exist under a Nazi leadership.

Let us also not forget who supported, and who opposed Fascism. Communists and Socialists across the World opposed the Nazi’s. Between 1933 and 1939 150,000 Communists were imprisoned by the Nazis purely for being Far-left. A further 30,000 were executed. The oldest Communist party in Germany, the KDP started in 1919 (the biggest outside of Russia) was declared illegal by Hitler in 1933. All Communist publications were closed down. Other Socialist groups – The Baum Group, Red Orchestra, Home Front, the Uhrig Group – were routinely terrorised by the Nazis, imprisoned and executed. In 1944, there was a workers uprising in an attempt to inspire a socialist revolution, in which 200,000 workers were arrested. This isn’t far-left.
And yet, the support seemed to come not only from the Catholic Church, but also from big business. The Fascists in Spain were being aided by Ford and DuPont. Standard Oil also worked with Franco. US Steel and Alcoa supplied the Fascists with steel.
An exert from the United States Senate Committee on the Judiciary in 1974 stated:

In Germany, for example, General Motors and Ford became an integral part of the Nazi war efforts. GM’s plants in Germany built thousands of bomber and jet fighter propulsion systems for the Luftwaffe at the same time that its American plants produced aircraft engines for the U.S. Army Air Corps….
Ford was also active in Nazi Germany’s prewar preparations. In 1938, for instance, it opened a truck assembly plant in Berlin whose “real purpose,” according to U.S. Army Intelligence, was producing “troop transport-type” vehicles for the Wehrmacht. That year Ford’s chief executive received the Nazi German Eagle (first class).
On the ground, GM and Ford subsidiaries built nearly 90 percent of the armored “mule” 3-ton half-trucks and more than 70 percent of the Reich’s medium and heavy-duty trucks. These vehicles, according to American intelligence reports, served as “the backbone of the German Army transportation system.”….
After the cessation of hostilities, GM and Ford demanded reparations from the U.S. Government for wartime damages sustained by their Axis facilities as a result of Allied bombing… Ford received a little less than $1 million, primarily as a result of damages sustained by its military truck complex at Cologne.

– Are we saying that GM, and Ford are also far-left? Seriously?

Glenn Beck once claimed that ‘social justice’ was a term used by both the left and the Nazis, in an attempt to draw links between the two. And yet, one of the main strands of Nazism; harsh restrictions on trade unionism was adopted by the American Right Wing of which Beck belongs. It is illegal in the US for unions to ask other unions to picket alongside them. In 2001 a contractor named Ruzicka Electric hired to build a student centre at Lindenwood University were picketed by the union representing their staff for paying too low wages. In support of the union, other unions working at Lindenwood picketed alongside them. The Eighth Court and Supreme Court ruled that:

The picketing will be unlawful if there is an expectation or a hope or a desire that employees of the secondary employer will be induced or encouraged to take concerted action to quit working behind the picket line…Ruzicka Electric presented evidence that Local 1 agents, acting as observers at the neutral gate, engaged in picketing activity, asking neutral employees to refuse to work. If believed, this evidence establishes Local 1 engaged in unlawful secondary activity.

– It is thus illegal to ‘expect’ or ‘hope’ that another union might picket alongside your union. If Beck was truly anti-Nazi, he would recognise that limits to unionism is not only undemocratic, it is totalitarian in principle.

Motive is the key.

Economic centralising is meaningless without a purpose. The purpose of the Fascist centralised state is perpetuation of the Nation based on perceived heritage – be it race, religion, or any other man-made social phenomena that they claim is a natural way to order society. All economic planning in a Fascist centralised economy is geared toward the advancement of the Nation. It is a war economy. By contrast Left wing economic centralisation does not hold the Nation, or race to be a great natural truth that must be protected and advanced. It works to create a more equal society based on wealth distribution. It is international in its approach to social relations, and has absolutely no regard for perceived social heritage.

The Nazi’s certainly pushed social policies, and abhorred Capitalism when it suited them (we can call this left wing, if we wish), but they also promoted Nationalistic principles (we can call this right wing, if we wish). We can find Left leaning policies and rhetoric coming out of Fascist States, we can just as easily find Right leaning policy and rhetoric coming out of Fascist States.

Turner, whilst insisting that it is the rest of the World that doesn’t particularly understand political spectrum, makes a hugely ironic mistake. In an interview with ‘Moon and Back music’, he says:

“I consider myself a libertarian”

And yet, in 2011, in an interview with ‘Huck Magazine’ he says:

“I’ve got no problem with using taxes to pay for essential things like defence or the basics of a healthcare system.”

– It is my understanding of Libertarianism, that they believe taxation to be evil. A Libertarian system would include no taxation whatsoever. No healthcare system. No publicly funded anything. Libertarianism calls for free association without state coercion. It is the belief that taxation is theft (seriously ridiculous) and all government should be voluntarily funded, rather than collectively (because collective = evil). It is based on the premise that all wealth is individually obtained, and that the owner of wealth has no duty toward the rest of society. It is the ultimate in Hobbesian hell. A Libertarian’s fundamental beliefs are that individuals should be free to acquire property, without any State coercion, and form voluntary associations paid for by the individuals within the group, if they wish. The moment you believe in a tax payer funded program of any sort, you are not a Libertarian. Frank Turner is not a Libertarian, if he believes in any sort of state funded ‘basics of a healthcare system’. He’s just a little more Right Winged than Thatcher.

Turner makes the very fundamental mistake that a lot of commentators make when they attempt to attribute labels to political ideas; they reduce the complexity of methods and motives and aims and the roles of institutions, down to their simplest explanations. They do this, because they fail to note that ideology is dogmatic; free from the context in which they are placed. Whether a country be rich, poor, racist, liberal, democratic or totalitarian…. to ideologues, it doesn’t matter. We see this in the way that Communism was forced upon a largely unprepared agricultural Russia in 1917. The Nazi’s were neither a party of the left, nor the right. They incorporated methods for both, their motives were strictly Nationalistic, their aims were oppressive if they came into conflict with anti-Nationalist forces. This is neither a doctrine permitted by Marxism, or promoted by Friedman-ite New Right. Whilst the far-left strives for human equality, Nazism strived for human inequality in which the group (white German’s in this case) are superior.

Frank Turner, does not understand the very basics of political thought.

During the Bush years, Keith Olberman of MSNBC called Bush a Fascist. During Obama’s Presidency, Fox News have attempted to draw links between Obama and Fascism. It is simply propaganda in a simplistic attempt to discredit the Right or the Left, using very loose comparisons lacking any sort of context, without much thought and absolutely no analysis, drawn from flawed reductionism.

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The myth of the job creators

October 5, 2012

This is my second time in the US. I’m currently in a house in Michigan, reading a leaflet posted through the door from the Romney campaign. The right winged rhetoric is as poignant on every line of text as it has ever been. I’m not sure why we call it right winged. Prior to the Thatcherite revolution, the right were markedly more Keynesian than anything else. One nation conservatism was far closer to what Barack Obama is today, than the conservatism of Mitt Romney. Most one nation conservatives believed the rich had a moral duty to protect the poor. Disraeli passed a plethora of social reform; the Employers and Workmen Act made it possible for employees to sue their employers if the employer broke a contract. The Factory Act expanded regulation beyond anything seen before; it prevented children under 10 being employed, it set maximum working hours for women, and it set compulsory education for children up to 10 years old. The Public Health Act set minimum requirements for house building including running water and internal drainage. Disraeli was a Conservative Prime Minister. Can you imagine Mitt Romney proposing any sort of tough regulation on the extremities of Capitalism? In the eyes of the 21st century right wing; Disraeli was a terrible socialist. In the eyes of the 21st century right wing; every President pre-Reagan, was a terrible socialist.
The point being, Conservative governments have not always been addicted to horrendous free market anti-government dogma.

The leaflet posted through the door makes clear several times that Romney is committed to free market fundamentalism. His is simply an extension of new right thinking. He isn’t new, he isn’t presenting a credible plan for growth. He is rehashing the same tired old Friedman-ite economic philosophy that has dominated Western thought for the past thirty years, and has failed miserably every time. It fails, because it is ideology set apart from, and applied to a nation regardless of the contemporary economic or social context. We see the failure again in the UK. Since coming to power the epitome of new right economic thinking have forced through economic austerity leading necessarily to high unemployment, stagnating wages, rising poverty rates, increased gap between rich and poor, and most tellingly of all; the biggest double dip recession since the 1950s. That is the legacy of the myth of the job creators.

We have called it supply-side, we have called it trickle-down, now the rhetoric has moved on to labeling anyone with money as a ‘job creator’. This is a fallacious argument for several reasons…

I recently started up my own small business. As you’d expect, business isn’t exactly booming in the current climate. The reason for this lack of business isn’t the fact that I need a tax break. I really don’t. The reason for that is the fact that by cutting social programmes that helped those on low and middle incomes, the people and families affected no longer have enough, if any disposable income to spend on little luxuries. Instead, they work to survive and nothing else. Three years ago, a family with a teenager who went to college, could rely on the Educational Maintenance Allowance given to students who stay on into higher education for their food, and their travel. I know this, because I received EMA. It paid my petrol to and from college every day, as well as my food. I also worked part time in the evenings and at weekends, for extra money to spend on luxuries…. like the kind offered by my Photography business. Luxuries keep a consumer economy running. By taking away EMA, that little bit extra is lost from the pockets of the young. Which means they spend less. Which has a knock on effect in which businesses take less money, because there is less money. And so they lay off employees. Who are now on unemployment benefits. But unemployment benefits that have been cut. So they have less money again. And so the cycle continues.The point being, my business, whilst it is staying afloat, is struggling not because I need a tax cut, but because demand has been completely wiped out.

By giving me a tax cut, the new right is expecting me to help fill the employment gap created when it cuts ‘government’. The problem with this idea is again, related to demand. Why on earth would I employ somebody new? There is not enough demand currently for me to fill. The extra money i’d save in tax reductions would simply soon be lost, plus a little more, to the cost of employing someone, to help cope with demand that isn’t there. I am not going to ‘create jobs’ with saved tax money. Nor am I going to expand. It may give an advantage to large business, who by their very nature, don’t need a dose of corporate socialism. Employing new people, especially for small businesses, is a measure of last resort. A tax break for the lower and middle classes – the masses – will help to stimulate demand, as do effective governmental programmes aimed at elevating the burden of necessities – soaring gas and electric costs; education costs, petrol, healthcare costs (of which a universal system, is by far the most advantageous for a growing, civilised society). Taxing the wealthy, to pay for programmes that benefit the middle and lower classes, benefits everyone economically whilst building a compassionate society. It is the only possible way forward. We must not fall for the rhetoric of “all the best people will leave”. No they wont. It takes a lot to up and move country. Uprooting your children from schools, leaving your family and friends. It is a big life changing decision.

The myth of the job creators is as evident in the US as it is in the UK. Romney’s running mate, Paul Ryan once stated:

The other thing, in the tax side is permanent tax increases on job creators doesn’t work to grow the economy. It’s actually fueling the uncertainty that is hurting job growth right now. And don’t forget the fact that most small businesses file taxes as individuals. So, when you are raising these top tax rates, you’re raising taxes on these job creators where more than half of Americans get their jobs from in this country.

– The key to this quote is “when you’re raising these top tax rates”….. Top tax rates.
Similarly, over at Romney/Ryan headquarters, Fox News said of the proposed Obama top rate of tax hike to 39.6%:

….a clear majority of all small business profits face taxation at this top marginal income tax rate.

– It simply isn’t true.
According to the non-partisan ‘Center on Budget and Policy Priorities’ and backed up by ‘Urban-Brookings Tax Policy Center’, only 1.9% of small businesses make enough profit to fall into either of the top two income tax brackets. Visually, it looks like this:

So, let’s move my small business to the US. If suddenly, I am making $300,000 a year, by raising my rate by 4%, I will be paying about $6000 a year more. I’m not sure that would prevent me from hiring someone new, given that demand is high enough for me to be earning so much in the first place. Raising the top rate of tax, does not affect job creation. If it were the case that lower taxes on the wealthy lead necessarily to job creation, and higher taxes killed jobs, as suggested by Ryan and Fox, then we would today be absolutely fine for jobs. The opposite is true. Here is the evidence:

– Note how low the top rate of tax will STILL be, after the President’s proposed tax rise in 2013. Note also, that between 1993, and 2000, the top rate of tax was …. 39.6%… exactly as the President has proposed for 2013. The period between 1993 and 2000 was the largest period of US growth in history. Note also just how high the top rate was under Reagan. Prior to Reagan, in order to be eligible for a tax cut, a company would be required to use a portion of its profits to reinvest. Reagan put a stop to that, and gave a tax break up front. The companies thus invested elsewhere (offshore) and got the tax cut in the US. Isn’t ‘freedom’ wonderful?

The irrational phobia of ‘big government’ is a jobs killer. The Romney leaflet makes clear that government does not create wealth. This is disingenuous at best, and horribly dismissive of the millions of Americans that help drive the economy forward from the public sector. Schools create inquisitive minds and help to create an equipped workforce that both intellectually and materially drives the economy. Road building, property protection (being a policeman, is a job), fire protection and so on, all help to create an environment for which capitalism can flourish. It is true that the Government should not be the main force for economic growth. But they help, they protect, and they foster private growth. Without the government, we would belong to a Hobbesian hell hole. Libertarianism is as dangerous as Communism.

Evidence suggests that when the top rate of tax is higher, so is growth. When it is lower, economic inequality grows, not the economy.

Romney has pledged to reduce tax rates by 20%. It is no surprised that whilst market fundamentalists hail this as the beginning of an economic miracle, those who rely on evidence and analysis paint a different picture. According to a report by The Brookings Institution, the Romney tax plan would see taxpayers who earn over $1,000,000 given an extra 8.3% after tax; an average tax cut of $175,000, whilst taxpayers earning less than $30,000 would see a tax rise of about 0.9%; an average rise of $130. They go further:

“Offsetting the $360 billion in revenue losses necessitates a reduction of roughly 65 percent of available tax expenditures. Such a reduction by itself would be unprecedented, and would require deep reductions in many popular tax benefits ranging from the mortgage interest deduction, the exclusion for employer-provided health insurance, the deduction for charitable contributions, and benefits for low- and middle-income families and children like the EITC
and child tax credit.”

– The Romney/Ryan tax plan, is based on fundamentalist dogma devoid of all context, and based on an even more extreme form of failed economics. We see market fundamentalism, and austerity programmes failing all across Europe. Romney seems to be ignorant to the plight of those living under deep austerity, choosing instead to emulate it in America. It doesn’t work.

It is more evident to me being here, that the Right-leaning US electorate ignore evidence of what actually works, and instead choose to cling to outdated dogma – government bad/private business great – borne out of the fear of the big bad tyrannical government. Government is portrayed as the enemy, out to destroy your freedom, maliciously rubbing their hands whilst the country burns. It is the reason the US has resisted universal healthcare, despite the FACT that nations with universal healthcare continuously – as I noted here – out-perform the US in all healthcare league tables. To the US, Disraeli inspired conservatism is apparently Marxism. Any form of government help, is Marxism. They have chosen to ignore what actually works, in order to fight a misplaced war on what they perceive as Marxism. It is terrifyingly inaccurate and ignorant, as well as fundamentalist.

It is simply not true that those who enjoy profits that place them in the top rate of tax bracket, are job creators. They ride the tide of demand. The term ‘job creator’ is a deliberate attempt to create an almost moral argument for extending and perpetuating economic privileges for the very wealthy, without providing any evidence that it is beneficial for the rest of us. Manipulative language apparently negates the necessity for a reasoned argument. For free market fundamentalists; manipulative language is all they have ever had.

Demand creates jobs. Not tax cuts for the wealthy.