Home > Uncategorized > “Capitalism is the legitimate racket of the ruling class”

“Capitalism is the legitimate racket of the ruling class”

from David Ruccio

No, that’s not the democratic socialist candidate for the Democratic nomination. It was actually Al Capone who once said that “Capitalism is the legitimate racket of the ruling class.”*

That racket—and, with it, challenges to the legitimacy of capitalism—was evident in a wide variety of news stories yesterday.

life span

First, there was the issue of health. Once again, we’re learning that the capitalist racket is affecting health. In particular, the gap in life span between rich and poor is widening. The top 1 percent among American men live 15 years longer than the poorest 1 percent; for women, the gap is 10 years. These rich men and women have gained three years of longevity just in this century.  

And for some groups—especially white working-class men and women—death rates are actually rising.**

Public health experts say the rising white death rate reflects a broader health crisis, one that has made the United States the least healthy affluent nation in the world over the past 20 years. The reason these early deaths are so conspicuous among white women, these experts say, is because in the past the members of this comparatively privileged group have been unlikely to die prematurely. . .

[Anne] Case said that the whites who are dying are not America’s elites.

“They may be privileged by the color of their skin,” she said, “but that is the only way in their lives they’ve ever been privileged.”

Second, consider the problem of international trade. Michael Riordan challenged Carrier Corporation’s recent decision to transfer its Indianapolis plant’s manufacturing operations and about 1,400 jobs to Monterrey, Mexico.

The transfers of domestic manufacturing jobs to Mexico and Asia have benefited Americans by bringing cheaper consumer goods to our shores and stores. But when the victims of these moves can find only lower-wage jobs at Target or Walmart, and residents of these blighted cities have much less money to spend, is that a fair distribution of the savings and costs?

Recognizing this complex phenomenon, I can begin to understand the great upwelling of working-class support for Bernie Sanders and Donald J. Trump — especially for the latter in regions of postindustrial America left behind by these jarring economic dislocations.

And as a United Technologies shareholder, I have to admit to a gnawing sense of guilt in unwittingly helping to foster this job exodus. In pursuing returns, are shareholders putting pressure on executives to slash costs by exporting good-paying jobs to developing nations?

Even Lawrence Summers, desperate (like most mainstream economists) to maintain free international trade and global integration, had to admit that the globalization agenda has been a racket by and for those at the very top:

The core of the revolt against global integration, though, is not ignorance. It is a sense — unfortunately not wholly unwarranted — that it is a project being carried out by elites for elites, with little consideration for the interests of ordinary people. They see the globalization agenda as being set by large companies that successfully play one country against another. They read the revelations in the Panama Papers and conclude that globalization offers a fortunate few opportunities to avoid taxes and regulations that are not available to everyone else. And they see the kind of disintegration that accompanies global integration as local communities suffer when major employers lose out to foreign competitors.

Finally, when coupled with the revelations in the Panama Papers, there’s the growing suspicion that the 1 percent are both abandoning the rest of society (by hiding their money and avoiding taxes) and remaking the rules of the game (by using their money to influence elections and legislation). As Aditya Chakrabortty explains,

the Panama Papers confirm that the super-rich have effectively exited the economic system the rest of us have to live in. Thirty years of runaway incomes for those at the top, and the full armoury of expensive financial sophistication, mean they no longer play by the same rules the rest of us have to follow. Tax havens are simply one reflection of that reality. Discussion of offshore centres can get bogged down in technicalities, but the best definition I’ve found comes from expert Nicholas Shaxson who sums them up as: “You take your money elsewhere, to another country, in order to escape the rules and laws of the society in which you operate.” In so doing, you rob your own society of cash for hospitals, schools, roads…

But those who exited our societies are now also exercising their voice to set the rules by which the rest of us live. The 1% are buying political influence as never before. Think of the billionaire Koch brothers, whose fortunes will shape this year’s US presidential elections. In Britain, remember the hedge fund and private equity barons, who in 2010 contributed half of all the Conservative party’s election funds – and so effectively bought the Tories their first taste of government in 18 years.

Capitalism, of course, has always been a racket of the ruling class. Now, it seems—with revelations about unequal health and life spans, the costs of globalization, the ability of a tiny group at the top to exercise both exit and voice, and much more—its legitimacy is being called into question.

 

*Chicago’s most famous gangster was no anticapitalist radical. On the contrary:

“Listen,” he said, “don’t get the idea I’m one of those goddam radicals. Don’t get the idea I’m knocking the American system. The American system…” As though an invisible chairman had called upon him for a few words, he broke into an oration upon the theme. He praised freedom, enterprise and the pioneers. He spoke of “our heritage”. He referred with contempuous [sic] disgust to Socialism and Anarchism. “My rackets,” he repeated several times, “are run on strictly American lines and they’re going to stay that way”…his vision of the American system began to excite him profoundly and now he was on his feet again, leaning across the desk like the chairman of a board meeting, his fingers plunged in the rose bowls.

“This American system of ours,” he shouted, “call it Americanism, call it Capitalism, call it what you like, gives to each and every one of us a great opportunity if we only seize it with both hands and make the most of it.” He held out his hand towards me, the fingers dripping a little, and stared at me sternly for a few seconds before reseating himself.

**Consider this extraordinary statistic:

Compared with a scenario in which mortality rates for whites continued to fall steadily after 1998, roughly 650,000 people have died prematurely since 1999 — around 450,000 men and nearly 200,000 women.

That number nearly equals the death toll of the American Civil War.

  1. April 14, 2016 at 8:12 pm

    For humans to fight over resources and wealth is not news. But what is news is the extent to which the rich and powerful (the 1%) have managed to undermine opposition to their remaking the world for their own benefit. Joe Hill’s plea today goes unheard, unspoken, and un-believed by many.
    Workers of the world awaken. Break your chains, demand your rights.
    All the wealth you make is taken, by exploiting parasites.
    Shall you kneel in deep submission from your cradle to your grave?
    Is the height of your ambition to be a good and willing slave?
    “Workers of the World Awaken” (1915)

    Aldous Huxley was prophetic in “Brave New World.” We live in the utopia of endless sports and entertainment, of twitter and facebook, of predigested politics. And of brutal economic inequality, injustice, and exploitation. And 99% of us don’t even notice.

  2. April 15, 2016 at 2:42 pm

    Do we include land ownership and speculation in its value as a part of capitalism? Actually its something different which was changed when John Bates Clerk managed to confuse the matter in about 1900. So now our incorrectly named capitalists hold useful land out of use for personal gain when its value rises. To know which sites to speculate in involves corruption through the local authority of development plans. When this opportunity to use natural resources is withheld, that in use becomes more costly with the result that the goods produced on the land (urban as well as rural) become more expensive and less get purchased. This results in a slow-down of what should be a prosperous economy and poverty, homelessness and crime result. This is where the “capitalists” which include the banks, make their greedy and immoral gains.

  3. blocke
    April 15, 2016 at 3:00 pm

    There was a LEFT in America in the first half of the 20th century. The socialist Eugene Debs got 20% of the vote for president in 1920. It was still present after WWII up to 1980. Then it disappeared in the great transformation of us politics, when the Republican party went south, and the Democratic Party ceased to be a voice for the working classes.

    • blocke
      April 15, 2016 at 3:24 pm

      Memory served me badly, Deb’s biggest popular vote as candidate for President of the Socialist Party was 6% in 1912.

    • April 15, 2016 at 7:52 pm

      Hear, hear! But why did the Democratic Party change? Was it co-opted as some accuse? Or did it just forget how to make a political argument and a political battle? I grew up with and through Texas Democratic politics, especially South Texas Democratic politics in the 1950s to 1980s. Sometimes their tactics may have been questionable but these Democrats knew how to make a strong political argument and fight political battles. What happened to that?

      • blocke
        April 16, 2016 at 12:28 pm

        So you were on the spot in Texas when the Democratic Party, after Johnson’s Great Society, changed. Was racism the source of the Democratic Party’s demise as power broker in
        Texas?

      • April 17, 2016 at 4:30 am

        The Democratic Party in TX as in most southern states had always been a struggle between the conservative members and the New Deal members. The latter group was weaker in TX than in most other southern states. Primarily I think because of leadership. After the Civil War whites in Texas streamed into the Democratic Party as blacks streamed into the Republican Party. These roles and movements were reversed in the 1960s when the Democratic Party lead the Civil Rights and Voting Rights moves in Congress. With most Southern Democratic members, including Lyndon Johnson in opposition. Johnson supported the New Deal but did not support integration. But he kept the state inline for a while after the Civil Rights and Voting Rights were passed. And his loyalty to JFK was astonishing to watch. He made certain energy major part of JFK’s program was enacted. Just as the Democrats had appealed to racism to pack its membership in the 19th and early 20th centuries beginning in the 1960s Republicans appealed to racism to attract members in TX and the South. And there was lots of racism to appeal to. I was at Baylor in 1968 when the first black student enrolled. He had five and only five friends at Bayor. I’m proud to say I was one of them. But five friends in a student population of 8,000 is disturbing. The U. of Texas had been integrated more than 10 years before. But private, and particularly religious colleges were slow to follow. And the fights over integration of restaurants, hotels, theaters, etc. were legendary. Going on into the 90s. And then things got worse. People we called crazies and wackos began being elected to office and people like me became unwelcome. I left in 1981 and have not been back. TX had racial problems but now it has even more of these as well as record inequality, a continually growing anti-environmental movement, and a Christian orthodoxy that bridges on theocracy. TX has become a scary place. Thank God except for Austin, which remains very cool.

      • April 18, 2016 at 10:47 pm

        That’s quite wrong about LBJ. Far from being opposed to civil & voting rights, he strongly supported them and was clearly the most effective US politician in favor of them. As Senate Majority Leader he shepherded the first civil rights bill since the Civil War into law. JFK’s civil rights agenda was stalled in Congress before his assassination, but Johnson’s legislative skill got it through

      • April 19, 2016 at 6:54 am

        All you say is correct. Johnson was in favor of full civil and voting rights for all Americans. He formed those views early in his life. Before he got into elected office. But he like many New Deal Democrats in the South were not certain that forcing integration would help that situation. In fact, many worried it would actually worsen it. That’s the point I am making.

  4. April 16, 2016 at 9:59 am

    The disappearance of the Soviet Union was a boost for the capitalists. They no longer had to worry about the working class seeing that as an example to imitate. Many in the “left” (in the broad sense of the word) do not acknowledge the shadow that phenomenon is still casting over us.

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