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Thursday, December 30, 2010

Cooperatives Provide Viable Alternative to Capitalism


Cooperatives Provide Viable Alternative to Capitalism

D-L Nelson

by D-L Nelson

People talk of capitalism, socialism or communism as if these were the only three economic systems for the world to choose from. Little is said about co-operativism, one of the least-publicized economic systems,

Nelson_troutfarmers_p.jpgView larger image
El Salvadorian women were able to finance a fish farm because of their savings co-operative. Photograph courtesy of the World Council of Credit Unions
which nonetheless is a very large player functioning successfully alongside the other systems. Co-operatives make up a large percentage of the global market place. They provide over 100 million jobs around the world: 20% more than multi-national enterprises. In fact, co-op membership is now approaching a billion people!

Part of the reason co-ops are so infrequently discussed is that they aren’t traded on the stock market. They seldom make the business news, yet they are responsible for generating billions of dollars.

Baby boomers may remember the food co-ops of the 60s, when hippie groups bought food from local farmers and everyone then took turns managing the store for members in whatever basement they could rent. In reality, co-ops can be that simple, but they can also be extremely sophisticated.

What is a co-op? According to the International Co-operative Association (ICA) based in Switzerland, “a co-operative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.”

The most productive region in Italy, the one with the lowest unemployment and highest social safety net in Europe, is around Bologna. It is no accident that this is the area with the highest number of co-ops, which operate in several business sectors. Ranging from small-scale to multi-billion dollar businesses, co-operatives function across all industries, including agriculture, fisheries, dairy, insurance, manufacturing, financial services, and housing, to name but a few.

One of the major differences between capitalism and co-operativism is that co-ops put people at the heart of their businesses; however this doesn’t mean they ignore profitability. Rather, they don’t just talk about values in mission statements on websites: they live them. Because co-operatives are member owned and democratically controlled by their members, profit is balanced against member and community needs. This concept is over two centuries old, and it operates on all major continents.

Many countries have co-operative trade associations which in turn belong to ICA. ICA then represents their interests with the UN and promotes not just the cooperative concept but good governance as well. Founded in 1895, ICA is an independent, non-governmental association with 220 member organizations from 84 countries. They also work on gender, fair trade and HIV issues.

Most importantly, they work on promoting sound accounting practices and legislative frameworks, because even co-ops can fall victim to human greed. Without a structure in place, temptations are greater. However, to date, co-ops have not produced anything close to an Enron-level scandal.

In 2006, ICA launched the Global300 Project to call attention to “The importance of the world’s co-operative and mutual businesses – many of them successful, large-scale enterprises with social and ethical principles at the heart of their operations.” ICA wants to demonstrate that values and competitiveness can go hand in hand, and that alternatives to the dominant investor-oriented model not only can exist, but do succeed. A complete list of the successful 300 co-ops can be found on the Global300 website.

ICA has documented evidence that many of these major businesses, some over 100 years old, out perform stock-market businesses. Part of the reason is that co-ops satisfy their stockholders by looking for long-term rather than short term profits. Ninety percent of the companies in the Global 300 were formed before 1980. Together they represent more than US $888,383 million, more than many of the world’s largest economies. For example Canada, the ninth largest economy of the world, had a GDP of $1,113,810 billion in 2005, according to the World Bank.

People who belong to credit unions, one of the most common types of co-ops, know that unlike banks, credit unions return most of their profits to their members, with both higher interest rates on savings and lower interest rates on loans. They may be small, such as fifty women in Vietnam pooling their savings and loaning out small amounts to support a food stand for one of its members. Others, like the US Navy Federal Credit Union or the Canadian Vancity Credit Union, have billions in assets. Vancity, with 10.5 billion in assets, returns 30% of its profits to its community for a vast number of social service projects. However, almost all Canadian credit unions give at least five percent of its profits back to meet social needs.

Few credit union members realize they are part of a worldwide movement begun in Germany during the 1800s after a famine.

Although under-reporting of their success by the press is standard, co-ops include Switzerland’s largest employer, France’s largest bank, a New Zealand co-op that oversees a third of the international dairy trade, India’s largest food processing business, the Netherlands’ top healthcare provider, North America’s market leader in canned and bottled juices and juice drinks, and Canada’s largest multi-product insurer.

But some organizations do know co-ops exist: in 2004, the Co-ops International Labour Organization identified co-ops as “one of the pillars of national and international economic and social development.”

Moreover, the United Nations has declared July 7 as International Co-operative Day. The theme this year is “Co-operative Values and Principles for Corporate Social Responsibility."

This theme was chosen to highlight how cooperatives balance or integrate economic, environmental, and social imperatives while at the same time addressing member needs and expectations, stakeholder expectations yet promoting corporate social responsibility.

As the ICA says, “Co-ops are self-help, not charity; empowerment, not aid.” That alone is a good reason either to do business with co-ops or to become a member and/or employee of one.

• Readers interested in more information on alternative economic models, please read Katharine Daniels' editorial, "Riane Eisler Helps Us Get to the Point!" - ed.

About the Author
D-L Nelson is a Swiss-American living in Europe. She is the author of two novels, Chickpea Lover: Not a Cookbook and The Card.

She is also editor and publisher of www.Cunewswire.com an electronic news service for Canadian credit unions.

Elizabeth Warren: Foreclosure Scams Show Need for New Consumer Agency

The Economist

Foreclosure crisis

New consumer agency is frightfully necessary — and late

Alex Wong / Getty Images


No one has missed the headlines: Haphazard and possibly illegal practices at mortgage-servicing companies have called into question home foreclosures across the nation.

The latest disclosures are deeply troubling, but they should not come as a big surprise. For years, both individual homeowners and consumer advocates sounded alarms that foreclosure processes were riddled with problems.

While federal and state investigators are still examining exactly what has gone wrong and why, two things are clear.

First, several financial services companies have already admitted that they used “robo-signers,” false declarations, and other workarounds to cut corners, creating a legal nightmare that will waste time and money that could have been better spent to help this economy recover. Mortgage lenders will spend millions of dollars retracing their steps, often with the same result that families who cannot pay will lose their homes.

Second, this mess might well have been avoided if the Consumer Financial Protection Bureau had been in place just a few years ago.

The new consumer agency is one of the signature accomplishments of the Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law by President Obama this summer.

The new agency will take on oversight responsibilities that had been scattered among several federal agencies, and it will be a new cop on the beat that will end big loopholes in the regulatory system.

For the first time, banks and non-bank lenders (such as payday lenders, check cashers and mortgage brokers) will be subject to the same federal oversight to ensure that they are all playing by the same rules-no more turning sideways and slipping through the regulatory cracks.

Lost in much of the back-and-forth over wrongful foreclosures is the question of whether the scandal could have been prevented. The answer is yes.

The practices now under investigation took root and grew because there was no single federal regulator with both the responsibility and the tools to look out for consumers.

Had it existed, the new consumer agency could have stopped these problems before they multiplied. Many of the failures already admitted were not sophisticated scams that had been carefully concealed. By enforcing existing laws and involving state authorities early on, the agency could have made sure that the law was respected. No one would need to wonder whether the world of borrowing and lending works only one way: Families have to follow the legal rules, but the rules are optional for big banks.

Once it is fully operational, the new consumer agency will have supervisory authority over all large mortgage servicers. It will be able to examine them on a regular basis to make sure they follow the rules. If those servicers decide it is cheaper or faster to circumvent federal law, the consumer agency will have the tools to hold them accountable.

No one will be allowed to break the rules without triggering a strong and prompt federal response.

Currently, the federal interagency foreclosure task force, including the members of the Financial Services Oversight Council, is working along with the state Attorneys General to get to the bottom of these problems. The implementation team for the new consumer agency is also working to assemble and coordinate teams to deal with servicing and other issues.

These efforts are critical, but there is more work to do: We must ensure this kind of scandal-or some close cousin-does not happen again.

A mortgage is the biggest financial commitment most Americans will make in a lifetime, and the toll on Florida has been especially heavy and the need for oversight particularly apparent. A few weeks ago, I watched proceedings in a Fort Lauderdale foreclosure court and saw firsthand the painful outcomes for numerous families.

Unfair servicing practices can worsen a family’s already difficult economic situation, and the injury echoes from the family to the community and ultimately throughout the economy. Cops on the beat can stop problems before the damage spreads. If there ever was any doubt that the new consumer agency is necessary, the latest foreclosure developments should put that to rest.

Elizabeth Warren is the special advisor to the secretary of the Treasury for the Consumer Financial Protection Bureau and an assistant to the president.

Read more: http://www.miamiherald.com/2010/12/22/1991294/new-consumer-agency-is-frightfully.html#ixzz19cu0JTWM

Participatory Economics: A Theoretical Alternative to Capitalism

New Formulation

Participatory Economics: A Theoretical Alternative to Capitalism

[We seek] a condition of society in which there should be neither rich nor poor, neither master nor master’s man, neither idle nor overworked, neither brain-sick workers, nor heartsick hand workers, in a world, in which all would be living in equality of condition and would manage their affairs unwastefully, and with the full consciousness that harm to one would mean harm to all—the realization at last of the meaning of the word commonwealth. — William Morris(1)

Anarchism is a definite intellectual current of social thought, whose adherents advocate the abolition of economic monopolies and of all political and social coercive institutions within society. In place of the capitalist economic order, Anarchists would have a free association of all productive forces based upon co-operative labor, which would have for its sole purpose the satisfying of the necessary requirements of every member of society. — Rudolf Rocker(2)

Anarchist thought and practice has always criticized capitalism as a social and economic system. What has been less developed is an idea of that with which we would replace capitalism: an anarchist vision. Michael Albert and Robin Hahnel have created a well-developed theoretical system—participatory economics—that is both an alternative to capitalism and consistent with the anarchist and left communist tradition.

The anti-globalization movement, for example, articulated many strong critiques of the World Trade Organization and of global capitalism generally, but not much thought was given to how things could be structured differently. What will life be like after capitalism? How can we run a factory collectively? How do we collectively decide who gets what? Some activists would point to cooperatives—for example, local food cooperatives such as the Mondragon Industrial Cooperative(3) in the Basque region or the Seikatsu Club(4) in Japan—as examples of the new world in the shell of the old. Others use science fiction novels—such as The Dispossessed(5)—as possible models of a new world. Mostly anarchists and other agitators argue that a vision is not important at all, that no one can predict what the new world will look like and that having a vision is authoritarian. Instead, they argue that the new world will spring out of the struggle against the old world.(6)

Peter Kropotkin thought differently. In the preface to Emile Pataud and Emile Pouget’s famous book, How We Shall Bring About The Revolution, he addressed the importance of vision. First, he summarized his critics: “It is often said that plans ought not to be drawn up for a future society. All such plans we are told, are of the nature of romances, and they have the disadvantage, that some day they may hamper the creative force of a people in Revolution.” Kropotkin counters, “On the other hand, it is necessary to have a clear idea of the actual concrete results that our Communist, Collectivist, or other aspirations, might have on society. For this purpose we must picture to ourselves these various institutions at work.” This is exactly what Michael Albert and Robin Hahnel have done in their work on participatory economics. Michael Albert notes that participatory economics should not be taken as a blueprint, but as a “broad understanding of new institutions to inform our dissent.”(7) Kropotkin similarly wrote that a “book is not a gospel to be taken in its entirety or to be left alone. It is a suggestion, a proposal—nothing more. It is for us to reflect, to see what it contains that is good, and to reject whatever we find erroneous in it.” May this multi-book review, then, contribute to the evaluation of Michael Albert and Robin Hahnel’s proposal on participatory economic vision.(8)

Both Michael Albert and Robin Hahnel see their work within the context of the libertarian communist tradition. In an earlier work, Albert and Hahnel wrote that communist anarchism and council communism share an affinity with their views.(9) More recently, the journal Science and Society ran a special issue on theoretical alternatives to capitalism in which Albert and Hahnel describe the roots of their work as within the left-wing libertarian tradition.(10)

Each of the books reviewed here discuss the participatory economic vision. Before examining each book, let’s first take a look at the basics of participatory economics.

Valuative Criteria
Participatory economics is an economic system developed to foster six broad values: equity, or fair and just outcomes; solidarity, or caring and mutual respect among all people; diversity of outcomes which would benefit everyone; participatory self-management, or having a say in decisions to the extent that one is affected by their outcomes; efficiency, or not wasting resources; and environmental sustainability, which requires leaving behind stocks of each kind of natural capital as large as those we enjoy today.(11) These values, argue Albert and Hahnel, are critical to the evaluation of economic systems, which either fetter these values or promote them. Albert and Hahnel critique different economic systems, including capitalism, state socialism, market socialism, and green bioregionalism, all of which, they argue, do not promote these basic six values. Participatory economics, they assert, is the theoretical alternative that fosters these values.

The Critique of Capitalism and other Alternatives to Capitalism
An economic system has three main tasks: to produce things, to consume things, and to distribute things in some way, which economists call allocation. “Capitalism is an economic system dedicated to production for profit and to the accumulation of value by private business firms.”(12) Capitalism’s main characteristics are the accumulation of value, private ownership of the means of production, production for profit, and hierarchical organization of the workplace, where some do boring and manual labor, while others do skilled work and still others make the decisions. In short, the producers of the surplus do not appropriate and distribute the surplus (surplus being that which exceeds what is necessary to replace the machinery, raw materials, and sustain the workers’ standard of living).

Capitalism’s consumption is characterized by the total neglect of others. Consumers think of only themselves and can ignore the effects of the goods they buy on the environment and on the workers who produced the goods. As Albert and Hahnel explain, “in capitalism it is nonsensical to consider others.”(13) This is also a critique of all markets, not just markets under capitalism.(14) In a capitalist economy, things are allocated by markets, but markets also allocate goods in other economic systems, such as market socialism, of which the Mondragon Cooperatives are a good example. Markets do not promote solidarity or concern for the well-being of others; actually they do the very opposite. Thus, Albert and Hahnel argue, a desirable economic system should not have markets allocate goods since this will promote rugged individualism.

Albert argues that capitalism violates all the basic values; it does not promote equity, solidarity, efficiency, environmental sustainability, self-management, or diversity. In fact, capitalism does the contrary. Capitalism generates atomized, self-interested behavior, not solidarity. Capitalism generates inefficiency since it is based on individual actors. Capitalisms’ environmental record speaks for itself; it destroys biodiversity. Capitalism generates huge income and wealth differentials. Capitalism does not promote self-management but instead generates a situation where a few make decisions for the many. Capitalism does not generate diversity, it pushes people into boring and repetitive jobs, and creates a consumer culture based on a few brand names.

Similarly, Albert and Hahnel argue that market socialism, central planning, and green bioregionalism do not promote the desirable values. Markets generate inequality, destroy diversity, do not promote self-management, promote individualistic behavior that counters the notion of solidarity, and miscalculate the prices of environmental resources. Central planning similarly violates the values. It breeds authoritarianism and this counters solidarity, equity, and self-management. Central planning is alienating and creates a class of bureaucrats and managers, what Albert and Hahnel call a coordinator class. Green bioregionalism is a vague system that is popular with some activists in the United States today. Albert criticizes bioregionalism, arguing that it does not promote an alternative system of allocation, that it is too focused on scale and self-sufficiency, and that this vision will not eliminate classes.

The ABCs of Participatory Economics

What a sad and tragic mistake! To give full scope to socialism entails rebuilding from top to bottom a society dominated by the narrow individualism of the shopkeeper. It is not as has sometimes been said by those indulging in metaphysical woolliness just a question of giving the worker “the total product of his labor”; it is a question of completely reshaping the relationships...in the factory, in the village, in the store, in production, and in distribution of supplies. All relations between individuals and great centers of population have to be made all over again, from the very day, from the very moment one alters the existing commercial organization. — Peter Kropotkin(15)

Participatory economics envisions a very different economy with new institutional arrangements. Instead of private ownership of capital, there is social ownership of the means of production, which means either there are no owners or everyone owns the means of production, so ownership does not generate income or power differences as it does in capitalism. Allocation has a different set of institutional arrangements; instead of markets, there is a system of democratic or participatory planning. Consumer councils create consumption plans, workplace councils create workplace plans, and facilitation boards (administrative institutions) try to refine the different plans and make them correspond. Everybody participates, everyone helps make decisions. Participatory economics has a few new elements that I will briefly introduce. First, it has democratic workers and consumer councils. Second, it is characterized by the concept of balanced-job complexes. Third, remuneration is determined according to one’s effort as judged by one’s work-mates. And, fourth, participatory planning is the allocation mechanism that replaces central planning and markets.

Workers are organized in workers’ councils. This is the first step in establishing non-hierarchical and dignified work. Every work place is governed by these workers’ councils. Albert and Hahnel recognize that democratic councils by themselves do not promote participation sufficiently because while some work is empowering, some work is not. Disempowered workers would come to the council (or not come) lacking information, skill, and energy to participate in a meaningful manner. To solve this problem, Albert and Hahnel propose balanced job complexes, which I think is their most valuable and original theoretical contribution.

Jobs are a certain combination of tasks, and in our current system, certain jobs are intended to be rote jobs, while others are more rewarding. Jobs are organized in a very hierarchical manner. So if one would create a workplace council in such a place there would be power differences. Take for example a person, who has only been sweeping the floor all day, and another who has been meeting all day, thinking, and making decisions. The latter has much more information than the former. When these two people sit on the council, one will be in a position to participate on a different level, which will create a monopoly of knowledge. Thus, it is necessary to break up jobs so that they are more egalitarian. This is what a balanced job complex is—a restructuring of tasks that need to be performed so that instead of having one person run the place while the other sweeps it, tasks are combined and balanced in such a way that each job is equally rote and rewarding, and each person has a fair share of each sort of task. This concept of the balanced job complex is key to creating a more egalitarian world where people are empowered and have control over their own lives—a society that has neither masters nor slaves.

After people are provided with their basic needs, workers will be paid according to their effort, as judged by their work-mates. This system of remuneration is how participatory economics addresses problems of incentives. With this “payment” or “effort rating,” a worker will be allocated a certain amount of consumer goods beyond his or her needs. Similar to workers, consumers are organized in councils at different levels, from the neighborhood, the town or city, county, region, etc. Individual consumers can go to outlets to shop for different kinds of goods. These goods are allocated to these outlets through a participatory planning process.

In participatory planning, both workers’ and consumers’ councils participate directly in the formulation of a plan. The workers’ and consumers’ councils propose and revise their own activity prior to initiating those activities. “Indicative prices,” as determined in the planning process, are used as a communicative tool to estimate the full social costs and benefits of inputs and outputs. Indicative prices are only quantitative measures of social costs to supplement qualitative measures of the social costs of a product. This is an iterative and continuous process where every actor and every level proposes its own plans.

The process starts with the workers’ and consumers’ councils. The workers’ councils formulate a production plan and submit it to a federation of councils and finally to an iteration board. The council request certain inputs and submits a plan for outputs. Regional and industry-wide federations aggregate proposals and keep track of excess supply and demand.

Similarly, individuals and households submit consumption proposals for private goods to the neighborhood councils. Then the neighborhood councils submit the plans for collective and private goods to a federation of councils before it finally goes to the iteration board.

The iteration board compiles all of the plans and makes suggestions on revising the plans by changing the prices. The plans go back to the councils for revision, and this bargaining goes through successive iterations. This is done yearly, but at the same time this process is flexible enough to update the plans when things change.

This is a very short description of participatory economics and it is impossible to justice to the detailed and complex descriptions in the books by Albert and Hahnel.16 Now let’s look at three books by Michael Albert.

Thinking Forward: Learning to Conceptualize Economic Vision (1997)

The decadent international but individualistic capitalism ... is not a success. It is not intelligent, it is not beautiful, it is not just, it is not virtuous—and it doesn’t deliver the goods. In short, we dislike it and we are beginning to despise it. But when we wonder what to put in its place, we are extremely perplexed. — John Maynard Keynes(17)

Like Albert and Hahnel’s Looking Forward (1991) and The Political Economy of Participatory Economics (1991), Albert’s Thinking Forward describes participatory economics in detail, but it is set up very differently. It is divided into ten chapters. The book starts off by discussing the necessity of vision, then describes what an economy is and the six basic values that the economy should foster. In Chapter 2, Albert evaluates the existing visionary options. The ensuing chapters discuss values associated with production, consumption, and allocation. Then, based on these values, Albert argues for the basic institutions that make up a participatory economics. The last part of the book evaluates participatory economics and responds to its critics.

What is unique about this book is not only its accessibility, but also the way each chapter is structured. This book does not read as most books do. In the first part of each chapter, Albert challenges the reader to think by first describing certain concepts and then posing some rather difficult questions. At the end of each chapter, there is discussion of his answers to the questions. This makes the reader think and question throughout the book. When a question is posed, it makes the reader step back, think, grapple with the concepts, then try to answer it in her or his own way. In last part of the chapter, the reader can then read Albert’s answers. This set up is very instructive and helps readers understand this economic vision on a new level. The unique way this book is structured is conducive to really understanding the basic institutions of our economy, how participatory economics differs from the current model, and how it works. It is also conducive to learning how this method could be applied in other areas to create other visions or to modify this vision.

For those unfamiliar with participatory economics, Thinking Forward is an excellent introduction. For the reader interested in the debate that Albert and Hahnel’s vision has generated, the last forty-five pages of the book are dedicated to summaries of critiques of participatory economics, clarifications, and responses. These debates are very interesting and span a wide spectrum of perspectives, including those of activists and academics.(18) Some of these debates are engaged with proponents of other democratically planned economic visions, such Pat Devine, or with proponents of a market socialist vision, such as Thomas Weisskopf. Although Comparative Economic Systems scholars used to study the Soviet Union during the Cold War, today leftist economists who write about alternative economic systems have shifted their focus to debates between market socialism and participatory planning. The last chapter in Thinking Forward fits very nicely into this comradely but important brawl.

Moving Forward: Program For A Participatory Economy (2001)

The calloused hands of the fields and of the factories must clasp in fraternal salute because, truly, we workers are invincible; we are the force and we are the right. We are tomorrow. —Emiliano Zapata

In the wake of the anti-globalization protests in Seattle and in Washington D.C., Albert penned this program to speak to a new and emerging movement and address how it should move forward. “Great social movements need long-run goals for inspiration and guidance and need short-run programs for immediate orientation and agenda,” writes Albert.(19) This book provides suggestions for how participatory economics is the long-run economic vision and alternative to capitalism and provides a program for how to get there.

The book, divided in seventeen chapters, has six main parts: on just rewards, self-management, dignified work, participatory allocation, economics and society, and the participatory economics program. Each part has a discussion of the long-run goals, a discussion of a short-run program, and a hypothetical discussion between an advocate of participatory economics and a critic.

In the first part, for example, Albert argues that a good economy should reward only effort and sacrifice instead of profit, power, or output. A program that would support some of the basic six values of participatory economics would include supporting the fight for higher wages, enhancing affirmative action, and increasing taxes on profit, property, wealth, and income.Albert believes we should struggle for these reforms in a non-reformist way.(20) Throughout the book, he argues that activists should strive and fight for incremental change and that a sequence of incremental changes will ultimately bring about radical change as long as we have a vision for a better world in mind. While I fundamentally differ on the role of revolutionaries in bringing about social transformation,(21) I believe Albert’s ideas can help us understand and work within mass movements, or potential mass movements. While most of my activism certainly fights for small reforms, I see Albert’s strategy as sort of a non-strategy, a strategy that says “All Hands On Deck.” Much of Albert’s program is not much of a program at all and there exists no strategic focus on how to transform this world into a free society. Just keep on plugging away at all the things you are doing, we just need more people to be doing it, he argues. For Albert, the movement(s) need to grow and intensify. What is the task for revolutionaries? It is the same as that of the liberal, except that the revolutionary wants to use this reform to raise consciousness with the goal of fundamentally altering the basics of this society. Much of the program for participatory economics that Albert suggests falls within this framework.

Parecon: Life After Capitalism (2003)

It is necessary with bold spirit and in good conscience, to save civilization. We must halt the dissolution which corrodes and corrupts the roots of human society. The bare and barren tree can be made green again. Are we not ready? — Antonio Gramsci

Parecon is Albert’s latest book and is much longer and more comprehensive than his previous publications. This book is divided into four parts and 26 chapters and spans more than 300 pages. Much of the book covers material that is presented in its basic form in previous work by Albert and Hahnel. Part I discusses values and institutions. Part II describes the institutions and workings of the economic vision. Part III is an example of how a person would live their daily life under participatory economics to add richness to their abstract vision. Part IV addresses the critics of participatory economics. While Parecon does not add much new material or perspective to the previously developed vision—though it addresses some new criticisms—it is certainly nice to have a cleaned up version of the book that will reach a new audience.

Parecon does a very nice job of responding the critics. While most critics wonder whether participatory economics will be able to accomplish this or that practical task, few really critique its basic six values. Albert and Hahnel’s vision comes very much from the study of microeconomics, the study of individual behavior. I don’t think much of their efficiency criteria and I don’t think it should be of any concern to leftists, for it is not a value a good society should have. This concept comes out of the utilitarian tradition, a tradition I expect few readers of this review would hold dear. Efficiency basically refers to the idea that an analysis can or should determine the net balance between all the positive and negative effects of an economic action. For example, a cost-benefit analysis is done and all the benefits are added up, and all the costs are subtracted. If the positives outweigh the negatives the economic outcome is efficient and should be done. This of course, as you can imagine, creates huge problems. Can you identify and measure all effects? Who does it benefit? Can you just add up all the benefits and costs? Those familiar with utilitarianism can see the obvious relationship. Anarchists certainly don’t come out of this liberal philosophical tradition, so why should we bother with their conceptions of the world?(22)

While Michael Albert is very prolific, clear and accessible, his writing at times is not the best. For those who have seen him speak, his books read just as if he is speaking to you. Parecon does this the least of all the reviewed books and it is the most stylistically pleasing among them.

Participatory Economics is a very rich vision of what a better world can look like. Certain people argue that capitalism might not be great, but it the best we have, so all we can do is improve it and make it more tolerable. Albert’s books pull the rug from under this argument. Activists, organizers, and agitators often struggle to describe what kind of world we want; what would a world without cops or prisons look like? What would a world without private property look like? What would a world without patriarchy look like? Of course, many of these kinds of questions are impossible to really answer, but Albert and Hahnel have made an important contribution to envisioning what an alternative to capitalism might look like and how it might work. Whatever their flaws are, I hope that these books will be widely read and will foster much more pondering, talk, debate, and vision.


1. Cited in Michael Albert and Robin Hahnel, The Political Economy of Participatory Economics (Princeton: Princeton University Press, 1991).

2. Rudolf Rocker, Anarchism and Anarcho-Syndicalism (London: Freedom Press, 1988).

3. See the official website: http://www.mondragon.mcc.cs/. Roy Morrison’s We Build the Road as We Travel argues that Mondragon is the Third Way and a viable alternative to both capitalism and state socialism. For an anarcho-syndicalist critique, see Libertarian Labor Review, 19. For a book-length anthropological study and critique, see Sharon Kasmir, The Myth of Mondragon (Albany: State University of New York Press, 1996).

4. See Richard Evanoff, Social Anarchism 26, 1998, http://library.nothingness.org/articles/SA/en/display/248

5. Ursula LeGuin, The Dispossessed (New York: Harper & Row, 1974). Also see Marge Piercy, Woman on the Edge of Time (New York : Knopf, 1976).

6. For example, see “The Sad Conceit of Participatory Economics,” Northeastern Anarchist 8.

7. Michael Albert, Moving Forward: Program for a Participatory Economy, (Oakland: AK Press, 2001), 10.

8. All Kropotkin quotes from Emile Pataud and Emile Pouget, How We shall Bring About the Revolution: Syndicalism and the Cooperative Commonwealth (London: Pluto Press, 1990), xxxi-xxxvii.

9. Michael Albert and Robin Hahnel, Unorthodox Marxism: An Essay on Capitalism, Socialism and Revolution (Boston: South End Press, 1978), 314.

10. Science and Society 66, Spring 2002, 27.

11. These values are very nicely explained in many of their books. They are explained in most detail in Chapter 2 of Robin Hahnel, The ABCs of Political Economy: A Modern Approach (London: Pluto Press, 2002). For more on ecological economics and natural capital, see for example work by Herman Daly, especially Steady-State Economics.

12. Carol Heim, “Capitalism,” Political Economy Research Institute Working Paper 41, 2002, http://www.umass.edu/peri/pdfs/WP41.pdf This is a great article that briefly explains capitalism and its historical evolution.

13. Michael Albert and Robin Hahnel, Looking Forward: Participatory Economics for the Twenty First Century, (Cambridge: South End Press, 1991), 46.

14. For an excellent critique of markets, see Sam Bowles, “What Markets Can—and Cannot—do,” Challenge, July-August 1991.

15. Quoted in Albert and Hahnel, Looking Forward, 46.

16. For an abstract and more academic presentation of their model, see Michael Albert and Robin Hahnel, The Political Economy of Participatory Economics, (Princeton: Princeton University Press, 1991). For a less academic and more institutionally rich description of Parecon, see Albert and Hahnel, Looking Forward: Participatory Economics for the Twenty First Century (Cambridge: South End Press, 1991). This last book is available on-line: http://www.parecon.org

17. Cited in Albert, Thinking Forward, 11. Keynes was by no means a revolutionary and critiqued capitalism in his day to modify it in order to prevent revolution.

18. For those interested in some of these debates, see Michael Albert, Parecon: Life After Capitalism (New York: Verso, 2003), Science and Society, Spring 2002, and Review of Radical Political Economics, Fall and Winter 1992.

19. Albert, Moving Forward, 1.

20. Albert also writes about his strategy in The Trajectory of Change: Activist Strategies for Social Transformation, (Cambridge: South End Press, 2002). The basic strategy in the two books is the same. The Trajectory of Change is reviewed by Uri Gordon in “Chasing the Tornado,” The New Formulation, 2, no. 1, February 2003. While I would certainly disagree with much of Gordon’s critique, I also think he hits the point when he critiques the substance of Albert’s non-reformist reform strategy.

21. See my book review of Noel Ignatiev’s books in this issue of The New Formulation.

22. For a critique of efficiency, see Rick Wolff’s “Efficiency: Whose Efficiency?” in Post-Autistic Economics Review, no. 16, October 2002, http://www.paecon.net

Yes, America, there are Alternatives to Capitalism

Is There An Alternative to Capitalism?

by Paul Burrows

Edited from a rough transcript of a talk given as part of the SMAC forum on "Alternatives to Capitalism" (Wednesday, April 11th, 2001)

"Is there an alternative to capitalism?" The short answer to the question is "yes." In fact, there are many alternatives, though not all of these are necessarily or equally desirable. I usually talk to Marxists, anarchists, Wobblies, greens, and assorted rare strains of retro-socialists, and so simply telling people that there are alternatives to capitalism, telling people that competition, exploitation, imperialism, ecological destruction, and hierarchy are NOT inevitable, is at best redundant, at worst insulting. At least for my usual crowd.

But beyond this general agreement among progressives that capitalism is inherently unjust, and beyond this general hope and insistence that the alternative must be some kind of worker-run society, some kind of real democracy--meaning, a democracy which extends to the economic, not just the political, realm--beyond a quite passionate belief in these compelling (but somewhat vague) principles, the Left, frankly, doesn't know what it's talking about.

What do I mean "the Left doesn't know what it's talking about"? I certainly don't mean that progressive values are bad, or that the abolition of the market and its replacement by democratic planning is naïve. But I do think that progressives are often incoherent, stupidly dogmatic, and almost unintelligible to ordinary people.

I don't think, in practice, that we convey effectively our vision of a desirable future, nor do we convey a strategy for achieving it that seems…well, achievable. I don't think most self-described socialists (Marxist or otherwise) could tell you, in straight, ordinary language (and that's the key) what a market economy IS, what the essential institutions and features and dynamics of capitalism are, and how a worker-run economy might differ from it, be more fair, and still deliver the goods.

I don't think most self-described anarchists could tell you that either, or for that matter, tell you about the essential institutions and function of the State, and more importantly, how a non-hierarchical polity might differ from a capitalist or State-socialist one.

When we're actually intelligible, we're not necessarily saying anything relevant. And finally, the institutions, political parties, alternative businesses, and movements that we do create, often replicate the hierarchies, divisions of labour, and decision-making structures of both capitalism and patriarchy.

I'm not up here to outline and argue for my particular pet alternative to capitalism. For those who need to define their allies and enemies according to tidy labels, my own allegiances are well-known. I favour a "participatory economic" vision influenced by the libertarian Marxist, anarchist, and syndicalist traditions. But I think it would be redundant, a waste of everyone's time to stand up here and regurgitate yet another stand-alone variant of socialism.

Nor am I up here to say that anarchism is better than Marxism, or decentralization is better than central planning, or that the State will never wither away--it can only be smashed!--and I'm not going to talk about who screwed over whom in which revolution. In my opinion, these hair-splitting debates have about as much relevance to the public as two churches fighting over the number of angels dancing on the head of a pin.

So where does this leave us? What are better questions to ask, better debates to have, if we want to build an anti-capitalist movement? How do our different visions of a non-capitalist future affect the strategies we adopt today, and vice versa? How do our organizational forms and strategies today affect the people involved, the content of our media, the direction we want to take, and so on? And finally: What if the privileges we enjoy today lead us (without even being aware) to obscure class and structural problems in the alternative models we propose, create, and work within?

I think that if we want to build a popular movement, and create an alternative to capitalism, we need to start by asking such questions, and by articulating them in a language that's real. (Not many people are interested in the subtleties of the "dialectical relationship between base and superstructure." Get real!)

From an organizing perspective alone, we need to recognize that the language we use, the mannerisms, style, and tone we adopt, is at least as important as the substance of our message. We need to have a little humility--we need to be a little less attached to our conclusions, a little more questioning of our assumptions, a little less quick with our judgements and dismissals. We need to ask ourselves "What are we really doing to create a welcoming movement, a culture of resistance; what are we really doing to foster solidarity; when was the last time I reached out to someone who didn't already share my politics; when was the last time I actually had an impact on someone?"

Ultimately, we need to be less concerned about the alleged failings and ignorance of others, and more concerned about our own political relevance. The entire progressive, activist community (young and old, socialist or not) needs to build or expand upon its own institutions, and more importantly, the alternatives we create must embody the values we profess to hold.

Instead of saying "Anything short of complete 'Revolution' is reformist" (and then going home to watch TV), we need to recognize that no revolution begins with the overthrow of the State. The dismantling or seizure of the State is usually a reflection of a deep revolution already occurring at the grassroots, community, and workplace level.

The Spanish Revolution of 1936-39 didn't just happen because the Spanish were more "radical" or "committed" than we are. It was the culmination of almost 70 years of organizing, making mistakes, building a popular base. Pre-existing structures and worker organizations made possible a workers' takeover of much of the Spanish economy (especially in Catalonia). Participation in radical unions, factory committees, and collectives for decades prior to the revolutionenabled Spanish workers to develop knowledge of their enterprises as well as a sense of their own competence, and gave them direct experience with collective organizational principles.

The struggle of the Spanish anarchists and communists offers many lessons--not the least of which is that revolution is a long-term agenda. (You might even call it…evolution!) Younger activists especially need to take this seriously, because they tend to think that militancy alone (regardless of popular support) will bring about a fast demise of capitalism. Unrealistic expectations are a fast road to burnout and despair.

At the same time, however, observing that the state-capitalist system is powerful, and believing that revolution is a long-term agenda, is not an excuse to stuff our nests, or avoid direct action. We need to maintain an "optimism of will, even if we have a pessimism of mind." In other words, we need to strike a balance between hope and reality--something that is absolutely necessary, if our efforts are to be sustained beyond youthful idealism into the rest of our lives.

We need to think hard about the meaning of solidarity. Solidarity is not about supporting those who share your precise politics. It's about supporting those who struggle against injustice--even if their assumptions, methods, politics, and goals differ from our own. Any anarchist who says they won't support Cuban solidarity efforts, or could care less about the U.S. embargo, because the Cuban revolution is "Statist" and "authoritarian," is in my opinion, full of crap. (This does not, however, imply that we should turn a blind eye to human rights violations in Cuba, nor that we should refrain from criticism of Cuba's economic system simply because we're worried about the declining number of post-capitalist experiments to support.)

Solidarity doesn't mean uncritical acceptance--it means that criticism should come from within a framework of solidarity, not outside it--and this applies as much to the local context, as it does to the global. Any activist who says they can't support indigenous struggles for hunting and fishing rights, or they can't support striking hog plant workers, because of animal liberation is full of crap. (But this doesn't negate for one second the compelling moral imperative of animal liberation.)

Any environmentalist who doesn't buy their paper from Humboldt's Legacy (or your local equivalent), because some of its prices actually include social and ecological costs, or because the store's not registered as a "non-profit," is full of crap.

Any activist who doesn't buy their groceries from Neechi foods, or Organic Planet, or some other place which is committed to community economic development on principle, because Safeway is "unionized" or the Megastore has this or that…is full of crap.

Any Marxist who doesn't buy their books at Mondragón or some similar organization, because the chain stores are more convenient, or they found a better discount at Borders, or they think anarchists are "petty-bourgeois," is likewise…full of crap.

I'm not saying this stuff just to be provocative, or to make anyone feel bad. I think people should be motivated to act by their positive convictions, not their sense of guilt. Solidarity is about putting your money where your mouth is. It's meaningless if it's simply theoretical.

Solidarity has to be put into practice, it has to be lived. I struggle with the need to overcome my own blinders and personal grievances all the time. It takes serious effort to make connections with people from diverse groups, and different generations, to disagree in a respectful fashion, and to support other struggles without compromising one's own principles.

Solidarity is about transcending divisions despite our political differences, and despite the inevitable personality conflicts--it's about transcending our divisions out of empathy and a sense of shared struggle. If we can't do this at home, we sure as hell can't take on the world-capitalist system. That's just a fact.

To go on, I'd like to come back, in a very round-about way, to the question of alternatives to capitalism. It seems important to emphasize that we should be less concerned about what we call our particular economic vision, and more concerned about its substance. We should be less concerned about regurgitating the slogans of dead people, or following a party line, and more concerned about asking new questions, based as much on our own experiences and common-sense, as upon the lessons of the past.

Do not take this as a rejection of learning from history, a rejection of learning from past thinkers. Anyone who knows me knows the value I place on history, on theory, on learning from the experiences of those who came before. But let's be serious: the point is to take the insights, to learn the lessons; it is not to adopt wholesale the assumptions and frameworks and baggage of people we admire.

Is there a future for "socialism"? As Mike Albert notes, it all depends on what you mean by "socialism." Some people use "socialism" to describe a particular economy, characterized by state or collective property, plus either markets or central planning, but in each case with typical corporate divisions of labour in the workplace.

Some people use "socialism" to mean an economy in which producers and consumers have appropriate empowerment, and receive fair and equitable incomes not based on any structural or class or personal advantage.

In my opinion, the first of these forms of socialism (which existed in the old Soviet Union and exists today in Cuba) should be off the revolutionary agenda--not because it doesn't work (it does, even by comparison to capitalism), but because it's not compatible with the greatest fulfillment and development of the majority, of the workers and consumers themselves.

Assuming it's attainable, only the second form of socialism seems worthy of pursuit--and I would argue, it's the only one that seems to be consistent with the aims of early theorists like Marx.

In any case, we need to ask ourselves what we stand for, beyond vague references to collectivizing the means of production. Let me loosely borrow four questions from Robin Hahnel:

  • Do we want an economy that rewards people according to differences in morally-arbitrary abilities, or do we want to reward people according to their labour and the sacrifices they make?
  • Do we want the few to conceive and coordinate the work of the many? Or do we want everyone to have an opportunity to participate in economic decision-making, to the degree they are affected by the outcome?
  • Do we want a structure for expressing preferences that is biased in favour of individual over social consumption? Or do we want people to be able to register preferences for parks, libraries, mass transit, and pollution-reduction, as easily as they can express their desires for cars, Slurpees, CD's, or chocolate-flavoured condoms?
  • Do we want economic decisions to be determined by competition between groups pitted against one another for their well-being and survival? Or do we want to plan our joint endeavors democratically, equitably, and efficiently?

There's nothing complex or mysterious about this--even though the High Priests of Capitalism (and some Marxists) work very hard to make economics seem that way. What do we value? What do we want an economy to achieve? Any attempt to conceptualize alternatives to capitalism must begin with these questions, if we want to interest ordinary people in the debate, if we want to be rooted in the real world.

One doesn't build a broad-based, anti-capitalist movement by pretending to understand the "labour theory of value," or by saying "capitalism sucks" (and not having a well-thought-out alternative model to put in its place). We need to ask straight-forward questions about what we want. We need to debate different proposals and options for how to best achieve our desires.

I don't care what you call this--communism, anarchism, participatory democracy, socialism as it was always meant to be--it really doesn't matter. But if we're going to develop a true alternative to capitalism, we need to be very clear about what values and principles we want to uphold. And if we can't communicate these values in everyday language, if we can't persuade anyone of anything, then we either don't know what we're talking about, or we're just plain wrong.

Paul Burrows is a co-founder of Mondragón Bookstore & Coffee House in Winnipeg, Canada

Capitalism is Unsustainable: TINA in a TGIF World

An Unsustainable System

Anti-Capitalism in Five Minutes


We know that capitalism is not just the most sensible way to organize an economy but is now the only possible way to organize an economy. We know that dissenters to this conventional wisdom can, and should, be ignored. There's no longer even any need to persecute such heretics; they are obviously irrelevant.

How do we know all this? Because we are told so, relentlessly -- typically by those who have the most to gain from such a claim, most notably those in the business world and their functionaries and apologists in the schools, universities, mass media, and mainstream politics. Capitalism is not a choice, but rather simply is, like a state of nature. Maybe not like a state of nature, but the state of nature. To contest capitalism these days is like arguing against the air that we breathe. Arguing against capitalism, we're told, is simply crazy.

We are told, over and over, that capitalism is not just the system we have, but the only system we can ever have. Yet for many, something nags at us about such a claim. Could this really be the only option? We're told we shouldn't even think about such things. But we can't help thinking -- is this really the "end of history," in the sense that big thinkers have used that phrase to signal the final victory of global capitalism? If this is the end of history in that sense, we wonder, can the actual end of the planet far behind?

We wonder, we fret, and these thoughts nag at us -- for good reason. Capitalism -- or, more accurately, the predatory corporate capitalism that defines and dominates our lives -- will be our death if we don't escape it. Crucial to progressive politics is finding the language to articulate that reality, not in outdated dogma that alienates but in plain language that resonates with people. We should be searching for ways to explain to co-workers in water-cooler conversations -- radical politics in five minutes or less -- why we must abandon predatory corporate capitalism. If we don't, we may well be facing the end times, and such an end will bring rupture not rapture.

Here's my shot at the language for this argument.

Capitalism is admittedly an incredibly productive system that has created a flood of goods unlike anything the world has ever seen. It also is a system that is fundamentally (1) inhuman, (2) anti-democratic, and (3) unsustainable. Capitalism has given those of us in the First World lots of stuff (most of it of marginal or questionable value) in exchange for our souls, our hope for progressive politics, and the possibility of a decent future for children.

In short, either we change or we die -- spiritually, politically, literally.

1. Capitalism is inhuman

There is a theory behind contemporary capitalism. We're told that because we are greedy, self-interested animals, an economic system must reward greedy, self-interested behavior if we are to thrive economically.

Are we greedy and self-interested? Of course. At least I am, sometimes. But we also just as obviously are capable of compassion and selflessness. We certainly can act competitively and aggressively, but we also have the capacity for solidarity and cooperation. In short, human nature is wide-ranging. Our actions are certainly rooted in our nature, but all we really know about that nature is that it is widely variable. In situations where compassion and solidarity are the norm, we tend to act that way. In situations where competitiveness and aggression are rewarded, most people tend toward such behavior.

Why is it that we must choose an economic system that undermines the most decent aspects of our nature and strengthens the most inhuman? Because, we're told, that's just the way people are. What evidence is there of that? Look around, we're told, at how people behave. Everywhere we look, we see greed and the pursuit of self-interest. So, the proof that these greedy, self-interested aspects of our nature are dominant is that, when forced into a system that rewards greed and self-interested behavior, people often act that way. Doesn't that seem just a bit circular?

2. Capitalism is anti-democratic

This one is easy. Capitalism is a wealth-concentrating system. If you concentrate wealth in a society, you concentrate power. Is there any historical example to the contrary?

For all the trappings of formal democracy in the contemporary United States, everyone understands that the wealthy dictates the basic outlines of the public policies that are acceptable to the vast majority of elected officials. People can and do resist, and an occasional politician joins the fight, but such resistance takes extraordinary effort. Those who resist win victories, some of them inspiring, but to date concentrated wealth continues to dominate. Is this any way to run a democracy?

If we understand democracy as a system that gives ordinary people a meaningful way to participate in the formation of public policy, rather than just a role in ratifying decisions made by the powerful, then it's clear that capitalism and democracy are mutually exclusive.

Let's make this concrete. In our system, we believe that regular elections with the one-person/one-vote rule, along with protections for freedom of speech and association, guarantee political equality. When I go to the polls, I have one vote. When Bill Gates goes the polls, he has one vote. Bill and I both can speak freely and associate with others for political purposes. Therefore, as equal citizens in our fine democracy, Bill and I have equal opportunities for political power. Right?

3. Capitalism is unsustainable

This one is even easier. Capitalism is a system based on the idea of unlimited growth. The last time I checked, this is a finite planet. There are only two ways out of this one. Perhaps we will be hopping to a new planet soon. Or perhaps, because we need to figure out ways to cope with these physical limits, we will invent ever-more complex technologies to transcend those limits.

Both those positions are equally delusional. Delusions may bring temporary comfort, but they don't solve problems. They tend, in fact, to cause more problems. Those problems seem to be piling up.

Capitalism is not, of course, the only unsustainable system that humans have devised, but it is the most obviously unsustainable system, and it's the one in which we are stuck. It's the one that we are told is inevitable and natural, like the air.

A tale of two acronyms: TGIF and TINA

Former British Prime Minister Margaret Thatcher's famous response to a question about challenges to capitalism was TINA -- There Is No Alternative. If there is no alternative, anyone who questions capitalism is crazy.

Here's another, more common, acronym about life under a predatory corporate capitalism: TGIF -- Thank God It's Friday. It's a phrase that communicates a sad reality for many working in this economy -- the jobs we do are not rewarding, not enjoyable, and fundamentally not worth doing. We do them to survive. Then on Friday we go out and get drunk to forget about that reality, hoping we can find something during the weekend that makes it possible on Monday to, in the words of one songwriter, "get up and do it again."

Remember, an economic system doesn't just produce goods. It produces people as well. Our experience of work shapes us. Our experience of consuming those goods shapes us. Increasingly, we are a nation of unhappy people consuming miles of aisles of cheap consumer goods, hoping to dull the pain of unfulfilling work. Is this who we want to be?

We're told TINA in a TGIF world. Doesn't that seem a bit strange? Is there really no alternative to such a world? Of course there is. Anything that is the product of human choices can be chosen differently. We don't need to spell out a new system in all its specifics to realize there always are alternatives. We can encourage the existing institutions that provide a site of resistance (such as labor unions) while we experiment with new forms (such as local cooperatives). But the first step is calling out the system for what it is, without guarantees of what's to come.

Home and abroad

In the First World, we struggle with this alienation and fear. We often don't like the values of the world around us; we often don't like the people we've become; we often are afraid of what's to come of us. But in the First World, most of us eat regularly. That's not the case everywhere. Let's focus not only on the conditions we face within a predatory corporate capitalist system, living in the most affluent country in the history of the world, but also put this in a global context.

Half the world's population lives on less than $2 a day. That's more than 3 billion people. Just over half of the population of sub-Saharan Africa lives on less than $1 a day. That's more than 300 million people.

How about one more statistic: About 500 children in Africa die from poverty-related diseases, and the majority of those deaths could be averted with simple medicines or insecticide-treated nets. That's 500 children -- not every year, or every month or every week. That's not 500 children every day. Poverty-related diseases claim the lives of 500 children an hour in Africa.

When we try to hold onto our humanity, statistics like that can make us crazy. But don't get any crazy ideas about changing this system. Remember TINA: There is no alternative to predatory corporate capitalism.

TGILS: Thank God It's Last Sunday

We have been gathering on Last Sunday precisely to be crazy together. We've come together to give voice to things that we know and feel, even when the dominant culture tells us that to believe and feel such things is crazy. Maybe everyone here is a little crazy. So, let's make sure we're being realistic. It's important to be realistic.

One of the common responses I hear when I critique capitalism is, "Well, that may all be true, but we have to be realistic and do what's possible." By that logic, to be realistic is to accept a system that is inhuman, anti-democratic, and unsustainable. To be realistic we are told we must capitulate to a system that steals our souls, enslaves us to concentrated power, and will someday destroy the planet.

But rejecting and resisting a predatory corporate capitalism is not crazy. It is an eminently sane position. Holding onto our humanity is not crazy. Defending democracy is not crazy. And struggling for a sustainable future is not crazy.

What is truly crazy is falling for the con that an inhuman, anti-democratic, and unsustainable system -- one that leaves half the world's people in abject poverty -- is all that there is, all that there ever can be, all that there ever will be.

If that were true, then soon there will be nothing left, for anyone.

I do not believe it is realistic to accept such a fate. If that's being realistic, I'll take crazy any day of the week, every Sunday of the month.

Robert Jensen is a journalism professor at the University of Texas at Austin and a member of the board of the Third Coast Activist Resource Center. He is the author of The Heart of Whiteness: Race, Racism, and White Privilege and Citizens of the Empire: The Struggle to Claim Our Humanity. He can be reached at rjensen@uts.cc.utexas.edu.

Wednesday, December 29, 2010

ObamaCare – Far Worse Than You Thought

Dissident Voice: a radical newsletter in the struggle for peace and social justice

ObamaCare – Worse Than You Thought

Prod a Democrat Party loyalist on the shortcomings of ObamaCare and you are likely to get two retorts: come 2014 at least everyone will be covered; and from the moment when Obama signed the law pre-existing conditions can no longer be used by the insurers to deny coverage. It turns out, however, that neither of these claims is true.

Let’s take universal coverage first. It turns out that in 2016, two years into full implementation of ObamaCare, there may be 30-40 million Americans sans coverage. From whence and whom comes such a number? No less than Dr. Robert Kocher, former special assistant to Obama on health care who directed the simulations to get these numbers in his new post at McKinsey and Co., an international consulting company. The simulations involved a detailed county by county analysis across the country.

Asked who would remain uninsured, Kocher replied: “There will always be a residual pool of uninsured that includes the following populations: undocumented [foreigners], people between jobs, those who may lose coverage from either changes in income [or from] rolling off of Medicaid. Also, the [people whose employer-based coverage] was dropped but who haven’t yet purchased insurance; those eligible and not enrolled in Medicaid; and those [who have not enrolled in insurance] by choice.”

OK, then, our Obama loyalist might say, at least as of the moment the president put pen to paper to pass ObamaCare, the insurance robbers were themselves robbed of the ability to deny coverage based on pre-existing conditions. Perhaps in theory, but that does not turn out to be the case either. It turns out that although 6 million Americans are eligible for the “Pre-Existing Condition Insurance Plan” provided in ObamaCare, only 8011 are enrolled. Why the shockingly low number? Two reasons emerge. First, most people and physicians do not know who is eligible or how to enroll, a recurrent problem in a health care system designed for the insurers not the insured. And, second, the cost, the monthly premiums for the plan ranging from $320 to $570 a month.

So even these minimal benefits turn out to be an illusion. And as we in Massachusetts are learning from RomneyCare, the model for ObamaCare, costs are not controlled by such programs. Premiums continue to rise here and now the insurers are beginning to provide physicians with global budgets for their patients with financial incentives for the docs to withhold care. We can expect more of that under ObamaCare.

But at its core the worst thing about ObamaCare is that it does not provide egalitarian care. That is, health care is not a right. We must pay bribes (aka premiums) to the insurers for our health care and better care comes to those who can pay the bigger bribe. And for those who can’t, who are too poor to pay any bribes, there is Medicaid whose coverage in some states is no different from having no coverage at all, based on the outcomes.

One wonders whether it would not be better if ObamaCare failed in the courts leaving us with the reasonable two choices: Medicare for all, as in Canada and France, or a National Health Service, as in the UK. Progressives might well want to ponder joining the suits against ObamaCare.

John V. Walsh can be reached at john.endwar@gmail.com. Read other articles by John.

This article was posted on Wednesday, December 29th, 2010 at 7:00am and is filed under Health/Medical, Obama.

Welcome to the Collapse

Dissident Voice: a radical newsletter in the struggle for peace and social justice

Welcome to the Collapse

The spinmeisters are playing the same record over and over, recovery, recovery, scratch, scratch, recovery’s in da house! The Associated Press trumpeted, “After two years of recession, Christmas 2010 will go down as the moment when Americans rediscovered how much they like to shop.” On December 28th, Yahoo Finance reassured us at 9AM, “The recovery is on track,” but an hour later, it featured a new headline, “Consumer Confidence Unexpectedly Falls in December.”

With its attendant social chaos, crime and despair, the country is sinking into an economic quicksand, yet Americans are injected daily with a massive dose of tranquilizing nonsense. Today’s top stories, “Elton John Becomes a Dad,” “Air Force Mascot Goes Missing at Game,” “10 Best Celebrity Hair Moments” and “Synchronized Walking Routine.”

The cheeky and cheery are occasionally contradicted by grimmer admissions, however. Even Voice of America, that Cold War relic and official mouthpiece of Washington, has this exchange:

[VOA]: “How does it feel from the beginning of the Christmas season from your point of view?

[Cashier]: “It’s not that good. It’s like so-so, you know.”

[VOA]: “So business isn’t so great right now.”

[Cashier]: “No I don’t think so. Because people don’t have the money to buy, there are lots of people who don’t have jobs.”

[VOA]: “Is your job in danger?”

[Cashier]: “Yeah.”

Weird, such candor from the VOA. Maybe their CIA check bounced? In any case, let’s meet some denizens of Philadelphia’s the Gallery, my local shopping center. Mrs. Fischel runs a meat and cheese shop. Business has steadily declined over several years now. To make matters worse, management has raised her rent, to make up for the other merchants who have closed shops or who are behind in their payments. The third level of this mall is completely dead, and the second is barely hanging on. Just this week, Payless Shoes as well as G&G, Unica and Sunshine Blues, all clothing stores, have gone belly up.

Fischel’s son, a recent graduate of law school, has moved back home from Orange County. He has no job, only mushrooming debts from student loans and credit cards. He loved California and never expected to live in Philly again. It used to be that once you moved out, you stayed out. It was an American right of passage. By 2006, however, two thirds of American college graduates were already returning to their parents. Now, the number is up to 85%.

Meet Mr. Ali, who runs a modest kiosk offering cheap purses, belts and watches made in China. He used to sell Gucci and Coach labels — not the bags, just the labels — which were sewn onto knockoffs by the customers themselves. Many of our poorest are infatuated with brand names. With a CK, say, slapped onto their person, they feel instantly higher class.

An immigrant from Pakistan, Ali’s first job was at a Seven Eleven, before he saved enough to buy a gas station. With his current business, it was no big deal to sell $1,500 daily. Now, he’s lucky to gross $500. Whenever this mall’s open, Ali’s in there. All he does is work. Even if there were 12 inches of snow on the ground, Ali would be there at 9AM, waiting for his first customer.

When he had saving, Ali made the fatal mistake of investing in Fannie Mae and Citigroup, among other supposedly blue chip stocks. Like millions of others worldwide, he lost his shirt. A hundred-and-forty-six thousand dollars gone. Ali sold his home and his new truck, hired a lawyer to consolidate his credit card debts. He now drives an unheated lemon. “In a couple of years, I’ll buy another house for my wife and children,” he insists even as his earning nosedives. He’s lost money the last two Christmases.

Meet Mr. Giuliani, who used to make $28 an hour as a computer repairman. He supplemented his day job by freelancing, charging $85 and up for each home visit. Replaced by technicians from India, Giuliani became a transit police officer. The goal of globalism has always been to outsource jobs and import labor. To maximize profits, bosses must minimize costs. At $15 an hour, Giuliani now patrols the Gallery to make sure teenagers don’t go berserk after they get off the trains.

Some of these kids like to pick fights with each other, shopkeepers or even security guards. With no jobs and little money, their idea of fun is to raise hell, inside this shopping mall or wherever. In March, a 73-year-old man and a 41-year-old woman were hospitalized after beatings by a gang of kids around 12-years-old. Playing a game called “catch and wreck,” they chanted “Fight! Fight!” and called Belinda Moore a “bald-headed bitch” as they pummeled her, knocked her to the ground, snatched her bag and stomped on her hat. Moore told the Philadelphia Daily News, “I don’t know if these kids hate society or hate life itself but I cannot believe they could do that to someone. Where is all that hatred coming from when you’re only 11 or 12?” Also in Philadelphia, an 18-year-old killed a 68-year-old woman with a frying pan, stole her truck, then blogged on MySpace two days later, “Bored as fuck! Meh and Mira bout 2 go touch city hall! put sum more money in mah mouth!”

Back to Giuliani: he inherited his house, so Giuliani doesn’t have to worry about a mortgage, but thanks to the housing bubble, his property tax has ballooned. For sentimental reasons, Giuliani doesn’t want to sell his childhood home, but he may have to. With ten rooms, the heating bill is enormous, and there won’t be too many buyers lining up.

The Gallery is a hub for commuter and subway trains. This design brings in more customers, sure, but the labyrinthine concourses also provide a haven for many homeless people. Dazed, they wander among shoppers, to be shooed away by guys like Giuliani. Dozing in wheelchairs, collapsing in corners or picking through trash cans, these resilient men and women seem oddly unaware that the recovery is in full swing, and that even dogs, according our cynical media, got expensive toys this holidays.

The collapse will not be televised. Ignored and alone, each of us will experience it singly. As blemish and accusation, you will be photo-shopped from the American Dream group portrait. The lower you slip, the more invisible you will become. The disconnect between what’s real and what’s broadcast will become even more obscene by the day.

Linh Dinh is the author of two books of stories and five of poems, and a just released novel, Love Like Hate. He's tracking our deteriorating socialscape through his frequently updated photo blog, State of the Union. Read other articles by Linh.

This article was posted on Wednesday, December 29th, 2010 at 7:01am and is filed under Capitalism, Classism, Corporate Globalization, Disinformation, Economy/Economics.

Tuesday, December 28, 2010

15 Dirty Big Pharma Tricks That Rip You Off and Risk Your Health for Profit

15 Dirty Big Pharma Tricks That Rip You Off and Risk Your Health for Profit

Even during a recession, pharma is still the nation's third most profitable sector. Here are some of the dirty tricks it employs to stay on top.

Even during a two-year recession with people losing their homes and jobs, pharma is still the nation's third most profitable sector. How does it do that? In part by cheating the government, misrepresenting science, bribing doctors, patients and pharmacies, and squeezing the FDA. Other than that, the industry plays completely fair. Pharma has often been criticized for lack of creativity in developing new drugs. But these dirty tricks show its creativity is alive and well when it comes to putting the public at risk just to turn a profit.

1. Astroturf Patients?

Pharma promotes fake patient advocacy groups to lobby for its interests.

These front groups often push the FDA to approve an expensive drug that has acceptable, cheaper alternatives. Or, they'll try to prevent Medicaid from switching to the less pricey drug. One of the largest faux groups, the "grassroots" National Alliance on Mental Illness (NAMI), was investigated by Sen. Charles Grassley for undisclosed pharma links. He found the 10 top NAMI state chapters received $3.84 million from pharma in less than five years, the biggest largesse from Eli Lilly, AstraZeneca and Bristol-Myers Squibb.

How else can you tell an astroturf group? Their Web sites look just like the pharma companies that fund them.

2. Cheating the Government

Pharma is now a top defrauder of the federal government. “Desperate to maintain their high margin of profit in the face of a dwindling number of important new drugs,” pharma illegally promotes unapproved uses of drugs and deliberately overcharges Medicare and Medicaid, says Dr. Sidney Wolfe, director of Public Citizen’s Health Research Group. Pharmaceutical companies have been hit with $14.8 billion in wrongdoing settlements in the last five years. But that's still cheaper for Big Pharma than going about things the old-fashioned, legal way. So the fraud continues.

3. Trials and Fibulations

Presiding over clinical trials can make a doctor thousands per patient. But they wouldn't compromise patient safety just to make a buck, would they? Medical College of Georgia psychiatrist Richard Borison and his colleague Bruce Diamond did 13 years ago when they tested Zyprexa, Risperdal and 20 other drugs and ended up in jail. So did Baystate Medical Center's Scott Reuben, who went to prison earlier this year for fraudulent Celebrex, Neurontin and Lyrica trials. And a Tucson facility testing asthma drugs Symbicort, Advair and Singulair doctored data and risked patients' health to net as much as $10,000 per patient, according to a whistleblower and government and court documents. How many other drugs were tested for such fiscal outcomes? Not counting recalled ones, of course.

4. More Trials and Fibulations

Even without fraud, pharma-sponsored studies can deceive. Trials that only determine that a drug is "not worse" than another one or impute safety before real data are available -- as in the case of Vioxx and Avandia's threat of heart attacks -- can skew results. And some research is not meant to be accurate to begin with. The Johnson & Johnson Center for Pediatric Psychopathology Research at Massachusetts General Hospital was founded to "move forward the commercial goals of J.& J." according to unsealed court documents. Its head, Harvard's Joseph Biederman, promised J.& J. a proposed drug trial "will support the safety and effectiveness of risperidone [Risperdal] in this age group," before it was ever conducted. Why leave things up to science?

5. Overseas Adventurism

As pharma increasingly eyes poorer countries for new markets and cheaper manufacturing it also eyes them for cheaper clinical trials. In 1996, 11 Nigerian children died in trials testing Pfizer's not-yet-approved antibiotic Trovan. While Pfizer paid the Nigerian government and state of Kano millions in a settlement, documents released by Wikileaks show that Pfizer tried to extort Nigeria's former attorney general to drop the lawsuits. Trovan was withdrawn from U.S. markets in 2001 for liver toxicity, though "safety signals" may have appeared sooner.

6. Clueless Institutional Review Boards

Institutional review boards, charged with overseeing clinical trials, should catch the unsafe drugs and shady trials. But a Congress and General Accountability Office sting conducted last year on a Colorado review board raises serious doubts. When asked to oversee a study of Adhesiabloc, a product designed to reduce scar tissue after surgery, Coast Independent Review Board said...when do we start? Even though the product did not exist -- nor did its developer or lead researcher!

7. 'Previous Government Experience Desirable'

In the fight against medical fraud, the Justice Department is beginning to file criminal, not just civil, charges against pharma. More employees also are turning whistleblower thanks to provisions that entitle whistleblowers to 15 and even 30 percent of fraud settlements, in some cases. But the other side has a big advantage. As long as politicians like former Louisiana Rep. Billy Tauzin, who left government to head the industry trade group PhRMA, and former CDC director Julie Gerberding, now head of Merck vaccines, are willing to commit a career's worth of knowledge, judgment and relationships to sell product, the government is fighting itself.

8. Double Dealing at the Pharmacy

The best thing that ever happened to pharma (after direct-to-consumer advertising) is Pharmacy Benefit Managers (PBMs). Their job is to negotiate the best drugs for their clients, which are heath and pension plans. But they seem far more adept at taking money to push pharma’s top branded drugs, regardless of the cost.

Recently CVS' pharmacy benefit manager, AdvancePCS, sent letters to doctors extolling the benefits of the expensive drug Zyprexa on behalf of drug giant Eli Lilly. Had a generic drug been prescribed over Zyprexa, savings would have been huge.

9. FDA Foreplay

A sneaky way pharma tries to get FDA to approve a drug -- even when the science isn’t there -- is to float the drug to the public. That's where directed marketing comes in. When “patients” (these are often astroturf groups), really want a drug approved, it puts huge pressure on the FDA to be sensitive to the public’s wishes. This tactic famously flopped for Boehringer-Ingelheim this year when it tried to sell a medication for "hypoactive sexual desire disorder" (HSDD) in women (first it had to sell the disease itself). Even though BI debuted its pink Viagra at a medical conference last year and rolled out its elaborate "Sex Brain Body: Make the Connection" Web site with TV personality Lisa Rinna soon after, FDA said no. Seems even though Boehringer-Ingelheim was effective in "raising awareness" about female sexual dysfunction, something else wasn't effective: the drug. And when it came to foreplay, the FDA had a headache.

10. Pharma Service Announcements

Public service announcements are messages for your own good, like, "Do You Know the Seven Warning Signs of Cancer?" But a lot of the awareness messages and warning signs you hear now are not from the government or medical groups, but pharma.

“Voices of Meningitis” ads on mom sites and online TV, for example, look like they are raising awareness of meningitis, but they were actually funded by maker Sanofi Pasteur, which makes a meningitis vaccine.

"Unbranded" advertising appears to have legit origins, like the National Association of School Nurses, which sponsors the Sanofi Pasteur’s meningitis ads. But when TV, radio and web messages push "awareness" of diseases like ADHD, irritable bowel syndrome (IBS), restless legs syndrome (RLS) or excessive sleepiness (ES), be suspicious. Real diseases aren't given initials for quick recall and easy reference. Nor do they come with snappy self-quizzes and pretty patient models. Unbranded messages also pimp the PSA (public service announcement) money that media outlets have for actual public issues.

11. National 'Interests' of Health

The National Institutes of Health are supposed to fund research for the public health with the public's tax dollars. But recently, a researcher who was stripped of his own NIH grant because of his huge financial links to pharma, is ruling on other researchers' grants on NIH committees, reports the Chronicle of Higher Education. The researcher, psychiatrist Charles Nemeroff, was also allowed to keep NIH funds when he moved to the University of Miami after being disqualified from them at Emory University. Clearly, when it comes to conflicts of interest at the top of level of government research, the fox is guarding the henhouse (or pork house).

12. Big Pharma Sends Schools Doctors

Continuing Medical Education (CME) are courses that doctors are required to take to keep their state licenses and stay up-to-date with current practice and treatment guidelines. But many are created by pharma, which covers the cost of the course for the doctor in exchange for unvarnished sales pitches. Worse, many are embarrassingly dumbed down.

A recent "course" offered by Medscape was titled "Quadrivalent HPV Vaccine May Be Effective in Women 24 to 45 Years Old." Participants were told that after taking the course, they would be able to "specify the currently recommended age range" for the vaccine (especially if they could read the title!). Another course manipulates participants to "lobby your legislators" for pharma-related Medicare funding. Congress recently investigated the billion-dollar continuing education industry for illegal marketing -- too bad Congress couldn’t investigate for stupidity.

13. Ghostwriting

Ghostwriting -- papers written by medical marketing writers, with doctors only posing as the authors -- was rampant until 2008 Congressional investigations. But even though it's now prohibited, few journals have retracted ghostwritten articles that sold Vioxx, Fen Phen, Prempro and probably Avandia. Asked about the papers ghostwritten "by" Lila Nachtigall, a professor in the Department of Obstetrics and Gynecology, Deborah Bohren, vice president for public affairs at New York University's Langone Medical Center said, "If we had received a complaint, we would have investigated."

A Congressional investigation doesn't qualify as a complaint?

14. Crooked Books and Slanted Messages

Pharma is often accused of ghostwriting articles that end up in medical journals under doctors' names who had nothing to do with the writing or research. But this month an entire textbook was accused of being funded and approved by pharma. The 1999 textbook, written to help primary care doctors diagnose psychiatric conditions, was funded entirely by GlaxoSmithKline (GSK) -- which makes pills for... psychiatric conditions! Nor were its authors, two prominent psychiatrists, strangers to GSK. Alan Schatzberg is on GSK's speakers bureau and Charles Nemeroff was investigated by Congress for undeclared GSK income. Did the authors write the book themselves or was it ghostwritten by pharma or its marketing company? Does it matter?

15. May I Take Your Order?

Have you ever waited in a doctor's office with a 102-degree fever, only to have pharma reps swinging Vytorin totes see the doctor first, just because they brought free samples or lunch and are dressed for a music video (pharma tends to employ attractive people to hawk their wares)? Until Congressional investigations brought about the Physician Payments Sunshine Act, some doctors in medical centers say they never paid for a meal. Nor did pharma largesse end there. One doctor told AlterNet her entire group was jetted to a Caribbean island courtesy of her Paxil rep. Even medical students were schmoozed until the 62,000-member American Medical Student Association (AMSA) sought to end the pharma practice of gifts and free meals. Now pharma must report what it spends on doctors.

Martha Rosenberg frequently writes about the impact of the pharmaceutical, food and gun industries on public health. Her work has appeared in the Boston Globe, San Francisco Chronicle, Chicago Tribune and other outlets.