Lincoln, Marx, & the Civil War

The election of 1864 was a bitter one for the wounded United States, having still been severely torn on strict sectional divides. In a strategic effort to garner nonpartisan support, Lincoln attempted to appeal to the splintered Democratic Party where there was a rift between War Democrats and the Copperheads (anti-war Northerners). He ran under the "National Union Party," in an effort to show American unity during a time of severe crisis and chose Andrew Johnson, a War Democrat, as his running mate. They would go on the capture the imagination of the North, winning the election of 1864 in a landslide against former General George B. McClellan who was running on the Democratic ticket.

Shortly after the election victory, an uncanny letter was handed to U.S Ambassador Charles Francis Adams with the instructions being that it be given to newly-elect, Abraham Lincoln. It was from the First International, and it was written by Karl Marx himself, congratulating Lincoln's efforts during the United States' time of war. It was praising and optimistic of the future of labor in the United States. It read:

We congratulate the American people upon your re-election by a large majority. If resistance to the Slave Power was the reserved watchword of your first election, the triumphant war cry of your re-election is Death to Slavery.

Marx goes on to further show eloquently his sincere support and bright anticipation of the workers' future:

While the workingmen, the true political powers of the North, allowed slavery to defile their own republic, while before the Negro, mastered and sold without his concurrence, they boasted it the highest prerogative of the white-skinned laborer to sell himself and choose his own master, they were unable to attain the true freedom of labor, or to support their European brethren in their struggle for emancipation; but this barrier to progress has been swept off by the red sea of civil war. The workingmen of Europe feel sure that, as the American War of Independence initiated a new era of ascendancy for the middle class, so the American Antislavery War will do for the working classes. They consider it an earnest of the epoch to come that it fell to the lot of Abraham Lincoln, the single-minded son of the working class, to lead his country through the matchless struggle for the rescue of an enchained race and the reconstruction of a social world.

It becomes apparent from this writing that Marx understood the dilemma of the laborers in the United States. Divided between racism, a blemish that became more visible during the eve of the Civil War, the working class was unable to mobilize. They lacked the capacity in numbers and in heart - being divided by systemic racial scapegoating that pitted them against their fellowman. Karl Marx even directly mentions this in his book 'Das Capital.' He writes:

In the United States of North America, every independent movement of the workers was paralysed so long as slavery disfigured a part of the Republic. Labour cannot emancipate itself in the white skin where in the black it is branded.

It would be naive for anyone to believe that liberation and class struggle could properly take place with the institution of slavery still intact. Marx fully understood this. He considered it a necessary step in bourgeoisie history for it to be abolished; it being a vital precursor to real proletariat efforts. 

A reply to the commemorative letter from Marx was actually given by Ambassador Adams in January of 1865. Seemingly, Lincoln enjoyed the warm support he received from the First International:

So far as the sentiments expressed by it are personal, they are accepted by [President Lincoln] with a sincere and anxious desire that he may be able to prove himself not unworthy of the confidence which has been recently extended to him by his fellow citizens and by so many of the friends of humanity and progress throughout the world.

The rest of the response goes on to espouse a surprisingly internationalist tone:

Nations do not exist for themselves alone, but to promote the welfare and happiness of mankind by benevolent intercourse and example. It is in this relation that the United States regard their cause in the present conflict with slavery, maintaining insurgence as the cause of human nature, and they derive new encouragements to persevere from the testimony of the workingmen of Europe that the national attitude is favored with their enlightened approval and earnest sympathies.

It was perhaps, in this reply and in the events unfolding, the First International saw a glimmer a hope for the emancipation of the laborers in the United States. It was the start of a new 'epoch,' as they call it, but however it is disheartening to note that Marx wrote little to nothing on the events that would follow during the Reconstruction. He turned his attention elsewhere, abandoning the struggle in the Western Hemisphere and instead turning to a more Eurocentric revolutionary approach - which was perhaps a mistake in and of itself.

Despite this, a portion of Marx's predictions came true. There was indeed a shift in the workers' mentality in the decades after the Civil War. The National Labor Union (NLU), founded in 1866, was the first national labor organization in the United States. Many such organizations formed likewise in the age of railroad tycoons, demanding higher wages and shorter hours. The telling revelation here is that, when compared to the building of the canals during the decades after the turn of the 19th century, the consciousness of the workingman changed. Over a thousand men died from swamp fever during the construction of the Eerie Canal, but little to no backlash followed. Many more worked long and difficult hours on similar projects during that time, but there were no strikes nor was there much violence. This only changed after the institution of slavery was abolished. Marx's optimism was therefore fulfilled, in some respects; The emancipation of slaves also emancipated the rest of the United States - in body and in mind. Frankly, although some initial momentum was lost after Reconstruction ended, it heightened the peoples' sensitivity to their impoverished state with which they responded by organizing - such that would be violently repressed years later during the wealth-concentrated time of the Gilded Age, where money was the utmost desire and politics was the wealthy man's game.

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The First International Letter to Lincoln, and the response, can be found here.
More writing by Marx on the Civil War can be found here.
Also, a letter exchange on this topic in the Fourth International (2009) can be found here.
And finally, here is an interesting article from International Socialist Review where they analyze Lincoln from a Marxist perspective.

The Tragedy of Privatization (II)

* Be sure to read part one first to understand this article in its full context.*

There a two phenomena when addressing private ownership that are absent form Hardin's famous article "The Tragedy of the Commons." Most of them are intertwined with general criticisms of the capitalist structure, but they also specific criticisms of Hardin's theoretical narrative.

For one, there have been innumerable examples of private rightsholders preventing a socially wanted outcome. Because each individual is working for his own pursuits, communal interests are excluded from the profit equation causing inherent inequity. This particular feature of private accumulation of capital and land has been called "The Tragedy of the Anti-Commons" and it is essentially the antithetical variant to Hardin's proposed scenario; when private individual ownership hinders the common good. Private owners essentially hurt the majority for their own individualistic ends, which is an incentive created only by the dollar motive. Such an outcome, I would argue, has been seen in much of the Third World with foreign ownership of resources. Arable land, oftentimes unused, is bought up by foreign investors, which strips the locals from share of their own resources. In Argentina, to take one example, foreign ownership owns about half of all land that can be used to grow crops. I've already talked about this in depth already in another post, so I won't go into it again, but more info on the inequity of land ownership in South American be found here and here.

The nature of this unequal distribution, which hurts the townsfolk of these regions, is a direct product of profit-drive economy and a privatized market structure; because the encouragement to go far and beyond to acquire foreign assets would not exist without it. This, I would argue, is the tragedy; the taking of land for the sole purpose of wealth accumulation and hurting the impoverished regional majority in the process.

Another phenomenon is something that some have called "The Comedy of the Commons," a 'parody' of Hardin's original assumption. It is when all of Hardin's absurd assumptions are found, but the outcome he predicts still does not occur. However, such an example is absent from the real world because his scenario is strictly an abstract concept. It does not pertain to the material; however, there have been examples in the virtual where value has actually increased with an open communal setting.

Wikipedia is a perfect example of this, and any online database or forum that is open to individual input. Anybody can use the information, but its value and database only increases with more communal activity and contribution. This begs the question; Why are individuals driven to contribute to a network or open system when they gain no monetary compensation? It seems that human action is driven by more than profit, especially in academia, where no worth can artificially be put on the pursuit of knowledge. It is this that privatization fails to compensate for; that ideas are invaluable 'commodities.' The downgrading of the humanities and others areas of academia are a perfect testament to this. Once you reach the area of intellectual thought, the price-determining element of capitalism seemingly cannot put a monetary number on it. This most certainly dissuades individuals wishing to pursue these respective fields, because now they are forced to fundamentally reshape their aspirations to be paid a better wage to live. I find this immensely limiting to the human spirit and mind, and it is incredibly dehumanizing to an intolerable degree.

A general article on the Tragedy of the Anti-Commons can be found here. It discusses the under-usage of resources with many private owners, completely undermining the "efficiency of the market." And here is an informative video on what motivates us, which especially pertains to academia.

The Tragedy of Privatization (I)

In 1968, Garrett Hardin posted an article in the magazine Science called "Tragedy of the Commons" and it was an attempt at proving that private property was the most efficient method of rationing goods and maintaining resources efficiently. It is oftentimes used in arguments favoring the privatization of common resources. His theoretical scenario was as follows:

There is a plot of land in the middle of a small peasant town. The plot of land is commonly owned, and is used for grazing; it is open to anybody that wishes to send their cattle there. Each peasant owns livestock and must use that land to feed their livestock. Knowing that each individual wants to maximize what they can get from the fertile acreage, each peasant brings as many animals as they can to the pasture, therefore, ruining the pasture for everyone. This is what Hardin calls 'the tragedy.' Each peasant wants to maximize their 'grazing' because they knew that if they don't, somebody else would. Garrett Hardin calls this outcome "inevitable," which he says makes it all the more tragic. He goes on to say there are two possible solutions to prevent such an outcome: either through regulation by an overseeing government body or through privatization of the common pasture so each peasant is responsible for his or her piece of land.

The original article from 1968 can be found here. And here's a corresponding video with Garrett Hardin talking about his scenario.

Now, there's a few issues that arise when Hardin's scenario is contested in a real world environment. He makes three assumptions that do not stack up to what actually happened in the famous commons of England and elsewhere. They are as follows:

1. Each individual is working to maximize his or her profit
2. The peasants do not communicate with one another
3. That the pasture is open for anybody to use freely 

What actually happened in the commons of England, where the peasants lived after being freed from the shackles of feudalistic rule, was very different than Hardin describes. In these small villages, these commoners were very careful not to abuse the land that they had because they knew if they did the entire community would starve. The communicated with one another to prevent such happenings, and overgrazing was for the most part prevented. And since they were not functioning in a money economy, by growing their own food, they had little incentive to grow beyond what they needed - and if more was grown it was for surplus in case of shortages. And finally, these pastures were not open to everyone; it was established by common law, assumed through interaction, that the land was to be used only by those that have agreed to take care of it. Essentially, it was to be used only by the peasants living in the village itself. 

Common grazing areas for livestock were a commonplace from the Middle Ages until the beginnings of the modern era. Farms were oftentimes broken up into three sections; one for wheat, one for barley, and one for grazing. This three-section open field was popular even after feudalism collapsed, until the advent of a market economy which specifically required the enclosure of common pastures. So the tragedy Garrett Hardin actually describes was seemingly backwards; rather than privatization of the commons being the solution to overgrazing, it became the tragedy itself. 

Gilbert Slater, a British economist and social reformer, wrote a book in 1907 titled "The English Peasantry and the Enclosure of Common Fields." He describes the coercive methods of enclosure:

Enclosure of the common fields, meadows and pastures, of
any particular village may have taken place in the following
ways : — 

(1) By Act of Parliament, viz., (a) by a private Act, (b) under
the authority of the General Enclosure Acts of 1830 and 1836,
(c) by the Enclosure Commissioners and their successors, the
Board of Agriculture, under the General Enclosure Act of 1845
and its amending Acts.
(2) By common agreement of all the collective owners.
(3) By the purchase on the part of one owner of all conflicting
rights.
(4) By special licence of the Tudor monarchs.
(5) By various forms of force and fraud. 

Commonable waste may have been enclosed in any of the
above ways, and also under the Statutes of Merton and Win-
chester (1235 and 1285), which give Lords of the Manor the right
of enclosing commons provided proof is given that the tenants of
the manor are left sufficient pasture.

Specifically speaking, the most devastating were the Inclosure Acts passed by the Parliament of the United Kingdom that stripped away the rights of common ownership from the local peoples by government force. This completely replaced the common law once understood by the peasant class, and put in its place a codified method of enclosure that many of the poor farmers did not agree to - this was mostly because many were illiterate and did not understand (for the most part only the nobles were educated).

A 17th century poem fully describes the real tragedy this caused to the local folk:

The law locks up the man or woman
Who steals the goose from off the common
But leaves the greater villain loose
Who steals the common from off the goose.

The law demands that we atone
When we take things we do not own
But leaves the lords and ladies fine
Who take things that are yours and mine.

The poor and wretched don’t escape
If they conspire the law to break;
This must be so but they endure
Those who conspire to make the law.

The law locks up the man or woman
Who steals the goose from off the common
And geese will still a common lack
Till they go and steal it back. 

William Cobbett, an notable English pamphleteer and journalist, recorded what he saw after the land on the Isle of Thanet was appropriated by the wealthy:

"In this beautiful island every inch of land is appropriated by the rich. No hedges, no ditches, no commons, no grassy lanes: a country divided into great farms; a few trees surround the great farm-house. All the rest is bare of trees; and the wretched labourer has not a stick of wood, and has no place for a pig or cow to graze, or even to lie down upon. The rabbit countries are the countries for labouring men. There the ground is not so valuable. There it is not so easily appropriated by the few. Here, in this island, the work is almost all done by the horses. The horses plough the ground; they sow the ground; they hoe the ground; they carry the corn home; they thresh it out; and they carry it to market: nay, in this island, they rake the ground; they rake up the straggling straws and ears; so that they do the whole, except the reaping and the mowing. It is impossible to have an idea of anything more miserable than the state of the labourers in this part of the country." [1823]

Enclosure did much more than take away common land from the peasants; it was much more elaborate of a scheme. At the dawn of the Industrial Revolution, the newly emergent capitalist class in North Britain found a new labour supply - the landless disfranchised peasant class that was distraught from centuries of enclosures. The self-sufficient yeomen was crushed, and what was created was a class dependent on wage labour for which they had to relinquish their self-autonomy to feed their families; they had no choice, they had to work. It was this phenomenon that soon followed suit in much of the rest of the world, for England was a colonial power and its influence was global. 

One of the leading forces during the Industrial Revolution were textile mills and these required wool to function. The dilemma was, however, that it required taking away common land from the peasants to raise more sheep. The nobles of Britain than turned to Parliament, because they knew if the government forced the peasants to enclose, they would have no choice. Their lobbying and influence ultimately succeeded, and the majority of the Inclosure Acts were actually passed between 1750 and 1860, involuntarily taking away the land of the commoners. 

Many of the emerging industrialists and its supporters called the peasants lazy, and they used such justification in advocating for their usage as labourers. Many Quakers and English Protestants also found laziness, which they saw as sloth (one of the Seven Deadly Sins), to be repugnant to a moral English society. John Bellers, a Quaker himself and an educator, tells of such things in his book 'About the Improvement of the Physick' and his other writings and expressed his contempt for such idleness: 

“Our Forests and great Commons (make the Poor that are upon them too much like the Indians) being a hindrance to Industry, and are Nurseries of Idleness and Insolence." [1714]

Thomas Pennet, a noted Enlgish botanist, antiquarian, and noble, wrote of the peasants in his journal in 1772 while in Edinburgh, England and denounced them in the same fashion:

“I was informed that the labor is dear here... the common people not being yet got into a method of working, so do very little for wages." 

"...The manners of the native Highlanders may be expressed in these words: indolent to a high degree, unless roused to war, or any animating amusement.”

He goes on to describe their physique:

"The inhabitant live very poorly... The man are thin, but strong; idle and lazy... they are content with their hard fare, and will not exert themselves father than what they deem necessaries."

The general attitude of the landowners was much the same. A snippet from Commercial, Agricultural, and Manufactures' Magazine in 1800 read as follows:

"When a labourer becomes possessed of more land than he and his family can cultivate in the evenings... the farmer can no longer depend on him for constant work..."

This type of mentality was common amongst the industrialists at the time; if the poor were given enough land to be self-sufficient and independent, than they would not be forced to work in the factories. They would be given a choice which would ultimately hurt the industrial North of Britain. 

After an analysis of the commons of England, it is apparent that the"Tragedy of the Commons" does not hold up to historical scrutiny. The reality is that peasants lived in harmony in the commons for centuries, and it was not until the emergence of a market economy do we see the dismantling the such a system. The 'inevitability of a tragedy' that Garrett Hardin theorizes is set in his own limited scenario; one that does not correlate with actual common ownership. The real tragedy here, it seems, is the exploitation of the peasant class from their land and state coercion that was involved in making them work as wage labourers. It is this state-market cooperative dynamic that will become a staple in the capitalist economy in the centuries ahead, and it is even more apparent in today's globalized economic system - albiet it's inherent problems are bit more subtle, but all the more the same just on a larger scale.

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John Beller's book: Proposals for Raising a Colledge of Industry (1696)
Gilbert Slater's book: The English Peasantry and the Enclosure of Common Fields (1907)
A short history of enclosure in Britain can be found here.
An article on how the English people became landless.
These enclosures did not come without backlash. Some info can be found here and here.

The Spanish Revolutionary Spirit

As eloquently described by George Orwell in 'Homage to Catalonia:'

"...It was the first time that I had ever been in a town where the working class was in the saddle. Practically every building of any size had been seized by the workers and was draped with red flags or with the red and black flag of the Anarchists; every wall was scrawled with the hammer and sickle and with the initials of the revolutionary parties; almost every church had been gutted and its images burnt. Churches here and there were being sytematically demolished by gangs of workmen. Every shop and café had an inscription saying that it had been collectivized; even the bootblacks had been collectivized and their boxes painted red and black. Waiters and shop-walkers looked you in the face and treated you as an equal. Servile and even ceremonial forms of speech had temporarily disappeared. Nobody said 'Señor' or 'Don' or even 'Usted'; everyone called everyone else 'Comrade' and 'Thou,' and said 'Salud!' instead of 'Buenos dias.'" 

"...There were no private motor cars, they had all been commandeered, and all the trams and the taxis and much of the other transport were painted red and black. The revolutionary posters were everywhere, flaming from the walls in clean reds and blues that made the few remaining advertisements look like daubs of mud. Down the Ramblas, the wide central artery of the town where crowds of people streamed constantly to and fro, and the loud-speakers were bellowing revolutionary songs all day and far into the night. And it was the aspect of the crowds tha was queerest thing of all. In outward appearance it was a town in which the wealthy classes had practically ceased to exist. Except for a small umber of women and foreigners there were no 'well-dressed' people at all. Practically everyone wore rough working-class clothes, or blue overalls or some variant of the militia uniform. All this was queer and moving. There was much was much in it that I did not understand, in some ways I did not even like it, but I recognized it immediately as a state of affairs worth fighting for. Also I believed that things were as they appeared, that this was really a workers' State.." 

Info on worker's self-management in the public transportation system of anarchist Catalonia can be found here. Also more general info on the Spanish anarchist experiment can be found by clicking on this link, here.

The Politics of Historical Revisionism

The American republic has been steadily degenerating in recent years - and it seems some want to resuscitate some lost patriotic zeal of the American dream with obscurity and contradictions. A deliberate false historic revisionism is happening; a 'rereading' of American history in an effort to make it fit with today's United States. This is the modern system that the founders envisioned, they argue, and we have to keep the status quo 'alive and well.' They are trying to put a square peg in a round hole and they have an entire rightist movement fooled. 

Thomas Jefferson, especially, has become a victim to this type of slander. He is portrayed, by the Tea Party and others, in cliché slogans of little to no historical significance. He is used falsely as a rallying call for free market-eteers; serving as an example that the United States was founded on the principles of "modern capitalism and democracy" and that this "still lives on today." In recent memory, he has been attributed to this false quote:

"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not,"

Fits right into the right-wing anti-Obama agenda, seldom a surprise.

Thomas Paine's real reputation has also been ravaged and hijacked, even recently. The former conservative TV host Glenn Beck used to pride himself on being a scholar of the American founding fathers. He attempted to christen Thomas Paine as the new figure of conservatism - an obvious contradiction to anybody with a vague recollection of American revolutionary history. Thomas Paine was a radical leftist, an enemy of privilege and aristocracy, an anti-religious pamphleteer, a skeptic of capital accumulation, and a contrarian of his time. He died penniless and with little friends, a testament to his passion; in no alternate world would he ally himself with a wealthy Christian-conservative TV star. Not only that, he is diametrically opposed to the domestic conservative platform. He is credited as the precursor to the modern 'Social Security System,' in his work titled 'Agrarian Justice' he writes:

"In taking the matter upon this ground, the first principle of civilization ought to have been, and ought still to be, that the condition of every person born into the world, after a state of civilization commences, ought not to be worse than if he had been born before that period."

He goes on to advocate a 'National Fund' to guarantee such improvement:

"To create a national fund, out of which there shall be paid to every person, when arrived at the age of twenty-one years, the sum of fifteen pounds sterling, as a compensation in part, for the loss of his or her natural inheritance, by the introduction of the system of landed property:
And also, the sum of ten pounds per annum, during life, to every person now living, of the age of fifty years, and to all others as they shall arrive at that age."

He then goes into monetary details; breaking down costs in Britain at the time and how the system would be implemented. He also criticizes the institution the private property as being naturally restrictive and, if left to its own ends, would accumulate to a minority elite. He promoted his 'National Fund' idea to cure this malady of capitalism; and bear in mind this was formulated in a predominately pre-capitalist era. This was written over two centuries ahead of his time, remarkable in any respect.

Now, does this correspond with any right-wing rhetoric? This historical obscurity is a symptom of a broken political sphere where revisionism is deemed a valid strategy; this becoming the rule rather than the exception. Trying to push a ideology of 'American Exceptionalism' by disguising the historicity of American figures is dangerous in hindsight for it fools the public into believing that the modern status quo is what was intended at this nation's founding. It is this that perhaps, albeit subtly, discredits anybody questioning today's illusive 'American Dream.' The response has become "you're going against the American tradition." This is a kind of political religion, a type of dogma, and a false one at that.

And one just as the founders intended, surely - or so these modern 'patriots' claim. 

The Credit Illusion

It seems that the United States has grown economically, for the most part, throughout all of its history. And for much of its history, this growth was accompanied by corresponding increases in real wages. It was assumed that with economic growth, the purchasing power of your wage for all your hard work would pay off and it would increase with time; it was part of the American Dream.

Ever since the 60s, real wages have remained mostly stagnant  - even taking a downward trend in the past year. Although maybe our nominal wages have increased, our real wages have remained the same and even more alarming the purchasing power of income has plummeted. Even worse so, the price of food and energy has gone up in recent years and we're still working the same amount of hours, sometimes more. Where is the improvement and, most importantly, why is the middle class shrinking? Although all this issues would usually mean a rise in unionization amongst workers and rallies to demand for higher wages/benefits and perhaps more equal distribution of wealth, as happened during the Great Depression and the 1910s, union membership has actually paradoxically decreased in the last 50 years.The Bureau of Labor Statistics reports that only 6.9% of workers in the private sector are union members. 

Although I've oftentimes heard the right demonize unions as dangerous to the delicate fabric of a free market, and oftentimes advocate enacting legislation to curb their power, there is no question the decrease in union membership has had a direct effect on the concentration of wealth in the United States and the middle class share of aggregate income. Here is are the results that were found by Karla Waters and David Madland of the at the Center for American Progress (CAP):

Now, before I get to the credit illusion, which is likely the culprit, first we have to dispel a few arguments against the stagnation of real wages in the United States - three of them specifically I want to talk about;

Q: Well, maybe workers' productivity has not increased and their real wages are a direct result of a stagnation in their output?

This cannot be true, hourly outputs per workers have actually been steadily increasing. This is based on information from the Bureau of Labor Statistics and Bureau of Economic Analysis; there is indeed a growing gap between output and real wages: 

Q: The average income per household has gone up, isn't that inconsistent in the stagnation of real wages? 

No, it is not. The Second Wave of feminism, which started in the early 60s, brought many more women to the workforce. It's not that the workers are bringing more real income home, it's that more people are working in the household. In an article in the journal article by Rebecca A. Clay of the American Psychological Association:

In 1940, according to the Employment Policy Foundation's Center for Work and Family Balance, 66 percent of working households consisted of single-earner married couples. By 2000, that percentage had dropped to less than 25 percent. By 2030, the center estimates, a mere 17 percent of households will conform to the traditional "Ozzie and Harriet" model.

It is this phenomenon that has caused an increase in average income per household - there are now many more new sources income per family, but that doesn't necessarily tell us anything about the average real wage for each individual bringing it home.

Q: You are not adding benefits to the real wage. The Bureau of Labor statistics has shown there has been a upward trend in real compensation per hour since the 1940s. Does this not explain the stagnation of wages?

It is true there has been a steady increase of real compensation (wages + benefits) per hour, below is a graph taken from the Bureau of Labor Statistics;

However, we have to look at this data with the increase in workers' output rather than by itself. Since the year 2000, there has been especially a disconnect between real compensation per hour and output. 

But this disconnect in average hourly compensation and productivity started far before the 00s; it actually began in the late 70s and got progressively worse since the Reagan years. Below is a graph from the Economic Policy Institute;

And although this graph does not show the growing gap between productivity and average hourly compensation since '07, it has gotten much worse since then. So yes, average hourly compensation has been increasing but not as nearly as the same rate as productivity has. 

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Now, for the topic of this post which may actually be shorter than the background information; Why aren't the workers mobilizing and demanding higher wages as they did in the first half of the 20th century? There are many reasons; one being the destruction of unionism during the Reagan years and another being the of spending money you don't actually have; the illusion of credit. Ever since real wages have become stagnant and the sharp decline of unionization in the 80s, there has been a sharp increase in household debt in the United States, which actually dissuades workers from demanding higher wages in some respects. It is this exploitative dichotomy that has kept corporate profits high and wages low; all in the guise of "buy now, pay later!" and 'economic growth.' 

Below is a graph of household debt versus persona savings taken from 'The Basis Point,' a blog by mortgage banker Julian Hebron:  

Here is a chart taken from the Federal Reserve Bank of San Francisco. It was a study pertaining to the entire United States:

Why is the middle class shrinking and being anesthetized by credit? It is this type of behavior that drives society outside of its means and gives it working class families the false perception that their wages are increases; maybe nominally they are, which is deceptive in itself, but the main hurdle we must overcome is realizing the distraction of mass consumption by credit going forward. This requires questioning this entire system which has, for the most part, become based on credit and money yet to be paid. I highly fear the collapse of this 'credit culture' and the shaky foundation it is built on; And perhaps worst of all, we are unjustly condemning future posterity to debt bondage. What happened during the crisis of 2008 we may find to become a staple in the modern 21st century economic model; and since debt wasn't properly liquidated, worse may be yet to come. The functionality of such an illusionary market method I am highly skeptical of, and its outcome will most definitely hurt the current mainstream liberal capitalist model. 

Free Trade in Death

The United States is often credited with reaching global economic status with free trade; that laissez faire capitalism and open trade with all nations brought us to modernity.

In actuality though, protectionism was vital in establishing American economic dominance and hegemony. The American System first promulgated by Henry Clay was critical of the British variant of economic thought and advocated high tariffs, a central bank, and federal subsidization of internal improvements (i.e canals, schooling, roads) amongst other things. It was built on Hamiltonian principles and the infant industry argument - that smaller industries must be protected from larger foreign competitors because they do not have the monetary means to compete. 

Usually this put regional interests at end and created a bitter American divide - the North wanted high tariffs and subsidization and the South wanted complete free trade to be able to sell its goods (predominately cotton) to Britain and other foreign markets. It was one of the main causes of the Civil War; the clash of economic ideologies. South's dependence on foreign markets was so strong that it firmly believed it could fully sustain itself without the North's industry. The "King Cotton" ideology was used as a slogan to convince Southern public opinion; Southern legislatures promoted the message that since Britain's and France's dependence on Southern cotton for their textile mills was so strong, they would be forced to aid them in their struggle of secession. As the Union began blocking Southern seaports, this rallying call proved to be unfounded - foreign markets just found elsewhere to purchase cotton. The British Empire turned back to its colonies for cotton markets. India increased its cotton production by 700% and Egypt did likewise. The South was severely crippled and took many decades to recover. In addition, their laissez faire ideology was downgraded. The Republican (former Whig) American System became the dominant school of economic thought.

Average tariffs percentages were at their highest from 1865 - 1900; when the United States underwent its second Industrial Revolution. Despite the predictions of the powers of Europe, who believed the American Experiment would never recuperate from the Civil War, the United States underwent the one of the greatest economic growth periods in its history and established itself as a great power and then ultimately, much later, as a superpower. The Gilded Age ensued, which was arguable one of the most corporate-concentrated periods of power in U.S history; where the pervading ideology was that the wealthy were the "best of society" and the poor "did not work hard enough." It was this concept that gave rise to the illusion of the American Dream and dissuaded the working class from mobilizing, in some respects. It worked in the interests of the wealthy most definitely. 

But aside from that, in looking at today's economic situation; why are we imposing free trade on other developing nations if we did not prosper from it ourselves when we were emerging as a power? The IMF and its associate organizations parade around promoting free trade and pressuring other nations to open to foreign capital only to further fill the pockets of the Western ruling class, and further impoverishing those not in high positions of power. 

In South America, locals have been exploited for over a century by foreign ownership of land. Many of the legislatures have been complicit with the policies of the United States and the West and allowed for large corporate entities to buy out land; usually unused and to save for "later use." Is this the benefit of free trade? The disproportionate ownership of global assets by Western powers? To make matters worse, a failure to allow foreign capital can have disastrous consequences. Many Latin American countries had coups staged, usually led by American interests, to halt any redistributing of land to the peasants. It is apparent that the First World depends on the Third World's impoverished state to maintain their hegemony and economic superiority; they want these impoverished nations to remain dependent on their capital and investment. Well-calculated and planned underdevelopment, as its called. 

But it seems that the leftist streak in Latin America may be changing this, hopefully soon. Some Latin American countries have already enacted legislation to redistribute unused private land to the poor, such as Hugo Chavez's Plan Zamora in Venezuela. As of now, much of Latin American land remains in the hands of foreign investors. In Uruguay, the 2000 census showed that 17 percent of its arable land was foreign-owned, but it is predicted to be 20 to 30 percent today.  In Brazil, the Brazilian Institute for Colonization and Agrarian Reform estimates that 4.5 million hectares are owned by foreigners - but this figure is low and it may be twice as large, according to government officials. Argentinian authorities place its national estimates at 17 million hectares, about 10 percent of Argentinian territory, and about half of all arable land. 

Moreover, sometimes when the land is returned back to "local hands" they're heavily concentrated. The Landless Worker's Movement in Brazil estimates, according to 1996 census records, that just 3% of the populations owns two-thirds of all arable land in Brazil. This only disempowers the majority and furthers economic inequality. According to World Development Indicators [2000] 10% of the population owns 47.6% of the wealth in Brazil. A study done by the Instituto de Pesquisa Econômica Aplicada (Institute of Applied Economic Research or IPEA) paints a even grimer picture "...in São Paulo the wealthiest 10% had 73.4% of while in Rio they retained 62.9% and in Salvador 67%." A product of unequal land distribution caused by free trade and neo-colonialism, it seems.

The moral of the story; modern free trade is not fair trade. Business clusters that congregate around areas of high GDP are inherently exploitative of poorer regions, taking their land disproportionately. The last things these emerging nations want is foreign capital owning their assets and preventing them from prospering. This forced underdevelopment is imposed through laissez faire legislation, and kept in place by multiple transnational organizations that preach the same ideology. It is dangerous to the self-determination of peoples and their long-term prosperity. It is exploitative by nature, but it seems that some free market fundamentalists just cannot abandon their distorted dream. And then their obscurities are imposed on the rest of us, with disastrous global economic consequences. 

More info on the land crisis of Latin American can be found here and here. Statistics and general info on Brazil's widening wealth gap and poverty crisis can be found here.