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Monday, 22 March 2010

Dead Peasants Dream of Pluto.

Classless and Free?
"You think you're so clever and classless and free, but you're still fucking peasants as far as I can see." - John Lennon

Those of you unconvinced of the nature of our politico-economic system, as skewed to the needs and wants of the wealthy few, should watch Michael Moore's new documentary Capitalism: a Love Story. In the documentary, many aspects of late capitalism are explored, including the phenomenon of "dead peasant" insurance. This is the kind of insurance corporations put on their employees, so that when a worker dies the corporation can profit from it. To "Corporate America" young women are particularly valuable, when dead. It's difficult to comprehend how this practice could ever be legal in any society. But it is also hard to comprehend why corporations are considered "legal persons" today. Lawyers seem to be responsible for it, the most cunning and ruthless that money can buy. This form of insurance is often referred to as "dead peasant" insurance, which says a lot about how the elites view the workforce. Companies that insure their workers in this way include: Avon Products, Coca-Cola Company, Wal-Mart, Woolworths and Nestle. Though, there are many more that are less well known.

Also featured  in Michael Moore's documentary Capitalism: a Love Story, were two very eye-opening reports, that coined and explained a new concept. The concept of plutonomy, which is a society in which economic growth is powered by and largely consumed by the wealthy few. The reports claim that the US, Canada and the UK are plutonomous states. The reports single out Japan, Scandinavia, France and Germany as belonging to an "egalitarian bloc". Though, the writers predict greater inequality in the current plutonomies while speculating that many other countries may turn to "plutonomics" in the future. These claims are reminiscent of arguments from the Left, that capitalist states like Britain and America are not democratic and many models have been proposed to explain what such states actually are - polyarchy, plutocracy, corporatocracy etc. But what is so astonishing about these two reports is that they did not come from the Left at all. These reports were written by Ajay Kapur, Niall Macleod and Narendra Singh, who are members of the research team for Citigroup. These reports were written in 2005 and 2006, they were leaked on the internet around 2008, before being featured in Capitalism: a Love Story.

The dissidents who claim that the Western capitalist states are not truly democratic, are often shot down and labelled "conspiracy theorists". John Perkins, a former "economic hit man", argues that the US is a corporatocracy, which is composed of multinational corporations who exercise power through the media and by funding political campaigns. At the tip of the corporatocracy, it's difficult to tell who is working for private companies or the government as they often move from one to the other and then back again. Perkins emphasises that the corporatocracy is not a formal and organised conspiracy, as they all work under the assumption that they must maximise profits regardless of the social and environmental costs. The implication being that the self-interest of corporations and the government converge. However, the theory taken by Robert Dahl, and later Noam Chomsky, that the US is a polyarchy is much more believable. A polyarchy is a system which is dominated by a few political parties, that are almost totally identical as they are dependent on the different sectors of private power for their own power. But all of this still sounds a bit too "conspiratorial" and "paranoid". So let's get back to those Citigroup reports.

There are many interesting lines early on in the reports, take this one for instance: "The earth is being held up by the muscular arms of its entrepreneur-plutocrats, like it, or not." The style in which the reports were written is one of smug effrontery, as the details of massive inequality are disgorged for their readers - probably less than 1% of Americans. Details like 1% of the American population account for 20% of overall US income, 33% of net worth and 40% of financial net worth. While the combined income and financial net worth of over 90% of Americans does not even come close. In the second report, it becomes apparent that the richest 10% of the populace own 57% of the wealth and the richest 20%  have a 68% share of the income. What is made clear in the first report, from October 2005, that in the US the richest 0.1% drives the fortunes of the richest 5% to 10% of Americans. So the "wealthy few", that power economic growth in a plutonomy, refers to the richest of the rich, which is probably 100,000 or less people.  These facts do not worry the research team, nor their readers I suspect, as the concentration of such vast wealth in so few hands, guarantees that rising oil prices will not effect the global economic system. Though, such prices will effect the poor. Instead of worrying, the team declares the uber-rich a "new managerial aristocracy" and goes on to flatter their readers with explanations of their "entrepreneurship" that verge on social darwinism.

The team present a thesis that high dopamine levels are connected to "curiosity" and "entrepreneurship". According to them, there is a high dopamine intensity among the populations of America, Britain, Canada and Australia, this is the reason such states are plutonomous. This explains the Americentrism of the reports and the sheer arrogance of it's authors. The view they have taken is that inequality is a natural result of our evolution. But they also list six drivers of plutonomics: 1. an ongoing revolution in technology. 2. governments favourable to capitalism and certain tax regimes. 3. globalisation, greater mobility among elites and desperate workers. 4. greater financial innovation. 5. the rule of law. 6. patent protections. The team point to the fact that these drivers are all present in America, Britain, Canada and Australia. They list Eastern Europe, China, India and Russia as "embracing many of these attributes". And point to Continental Europe stating that it may too "succumb" and be "seduced" by the drivers of plutonomy. The oligarchs of Russia, Chinese manufacturing tycoons and Indian software moguls are exemplars of this. But this system is not all powerful and is vulnerable to certain actions from a particular section of society.

Plutonomy is based on income inequality and a society which will tolerate or endorse income inequality is more likely to tolerate plutonomy. There are obvious threats to this system, an organised backlash from the lower-classes being the main threat. So long as the working-class are willing to work at longer hours and lower wages, whilst the possibility of redundancy lurks around the corner, a plutonomy can sustain itself. The team point out that the masses have equal voting power to the rich as a source of anxiety and fear. As a well organised mass-movement could easily "kill off" a plutonomy. However, they explain that this could be avoidable as the electorate seem to believe they can become a "Pluto-participant" one day if they just work hard enough. "Why kill it off when you can join it?" the writers explain before declaring this to be the "embodiment of the American dream." A backlash is probable, but it's not going to happen so long as the economy continues to grow and the electorate feel that they too are benefiting from that growth. Their readers that they describe as "managerial aristocrats", "pluto-participants and "plutonomists", are safe for now because the "rabble" have been sated. It would appear that George Carlin was right when he said "It's called the American dream, because you have to be asleep to believe it."


Laurel Kornfeld said...

Please try to use words other than "plutonomy" and "plutocracy" to describe corporatocracy and rule by the wealthy. The first two words are also used as descriptions for supporters of the planet Pluto. Clyde Tombaugh, who discovered Pluto in 1930 (and most certainly was not rich) once said, "I'm not a Republican or a Democrat. I'm a Plutocrat," and by that he meant a supporter of Pluto's planet status. I am a progressive who agrees with practically everything in this film and am eager to get going on the revolution. However, I request that you not allow the wealthy and supporters of the wealthy to co-opt and steal terms associated with the planet Pluto to indicate people and systems that are much more insidious and certainly not deserving of these names.

Joshua White said...

That's a fair point and I concur that language should not be shaped according to the whims of the wealthy few. Pluto, as in the dwarf-planet, was named after the Roman God of the underworld. "Plutonomy" and "plutocracy", on the other hand, are derived from Ancient Greek - ploutos meaning wealth, kratos meaning to rule and nomos meaning law. I myself, prefer the term "polyarchy" to explain the political system of the US, and many other Western states, to terms like "plutonomy" and "plutocracy". But in the Citigroup reports, the team specifically use the terms in reference to the politico-economic structure. So I was compelled to write of the terms, due to their relevance in the leaked documents.

Laurel Kornfeld said...

Thanks for the response. Also, Pluto and all dwarf planets are full-fledged planets, in spite of the controversial IAU decision. Only four percent of the IAU voted on this, and most are not planetary scientists. Their decision was immediately opposed in a formal petition by hundreds of professional astronomers led by Dr. Alan Stern, Principal Investigator of NASA’s New Horizons mission to Pluto. Stern and like-minded scientists favor a broader planet definition that includes any non-self-luminous spheroidal body in orbit around a star. The spherical part is important because objects become spherical when they attain a state known as hydrostatic equilibrium, meaning they are large enough for their own gravity to pull them into a round shape. This is a characteristic of planets and not of shapeless asteroids and Kuiper Belt Objects. Pluto meets this criterion and is therefore a planet. Under this definition, our solar system has 13 planets: Mercury, Venus, Earth, Mars, Ceres, Jupiter, Saturn, Uranus, Neptune, Pluto, Haumea, Makemake, and Eris.

Joshua White said...

It's interesting how things change.

Chris Horner said...

plutocracy comes from the Greek -ploutos -meaning wealthy.

Josh is using the name correctly


are both valid suffixes. Astonomy need not be invoked.