capitalism

By Jeremy Brecher - The American Prospect, February 4, 2022

When the Union Pacific Railroad closed its Global 3 Intermodal Ramp outside of Chicago in 2019, Union Pacific marketing executive Kenny Rocker promised that closing the facility would bring “more consistent, reliable and predictable service” to shippers who depend on rail. Union Pacific was cutting costs by consolidating its unloading facilities in Chicago, a national center of transshipment for goods that come by rail from ports.

Two years later, as the supply chain crisis gripped the country, the railroad had to abruptly reopen Global 3. In the meantime, Union Pacific stopped service between the all-important shipping hubs of Los Angeles and Chicago for one week last July while the company reconfigured its operations. Union Pacific’s remaining facilities in Chicago couldn’t keep up with the volume, nor could Union Pacific find enough workers or equipment to handle the goods. Industry analyst Larry Gross told Trains.com that Union Pacific “sacrificed surge capacity” when it closed Global 3. “If you don’t have any additional capacity in your hip pocket, even moderate disruptions put you in a world of hurt.” Gross estimated that Union Pacific’s weeklong suspension of service would keep roughly 40,000 containers stranded on the West Coast.

Every other major railroad suffered from supply chain snags in 2021. Another overwhelmed rail company, BNSF, ordered a slowdown of shipments into its Chicago facility. Two other remaining large rail companies, Norfolk Southern and CSX, received sharply worded letters from the head of their primary regulator, Surface Transportation Board Chairman Martin Oberman. In his letters, Chairman Oberman asked each railroad to respond to complaints from shippers—across different types of goods—of worsened service delays and higher costs.

But the freight railroads’ poor operational performance has not impaired their spectacular financial performance. If anything, the bottlenecks create more pricing power. Less than a week after his company reversed its 2019 decision and reopened Global 3, Union Pacific executive Rocker optimistically predicted on an earnings call that Union Pacific would be able to “take some pretty robust pricing on the market”—in other words, keep its prices high. The stock market shared Rocker’s optimism for all Class I railroads, whose stock prices rose in 2021, many by 20 percent or more. The last year was one more of a decade of financial prosperity for the industry as the stock price and total return of every publicly traded Class I railroad from the end of 2011 to the end of 2021, except for Canadian National, grew faster than the S&P 500. Union Pacific earned the second-highest total return in that period, getting investors an almost sixfold return on their money and beating the S&P 500 by over 100 points.

By Ryanne Pilgeram - In These Times, February 4, 2022

Most of the windows in the Dover, Idaho community hall face old Dover, still looking over the original mill workers’ houses and church that were transported upriver in 1922. Slipping into the kitchen and peering out the back window, however, is a reminder of how much Dover has changed. In the 1950s, it would have looked at a tangle of trees, then a deep meadow in the distance, and the community’s sandy beach just beyond that. Later, the view would include massive piles of woodchips, the birch trees providing some cover between the building and graying piles of sawdust.

Today, there’s a walking path that skirts the back of the community hall and, beyond that, brand-new homes. Dozens of buildings, from condominiums to bungalows to massive mansions, now sit in the fields where the mill once stood. Adorned with natural wood shingles and crisp white trim, the homes share a similar architectural style, meant to evoke the craftsman style that was popular when the buildings of old Dover were floating up the river. But the homes are unmistakably modern in their attempt to blend the ruggedness of the Pacific Northwest with the comforts of upper-middle-class living.

Lining freshly paved streets, the new homes nestle against the development’s headquarters, which features a fitness club and an upscale restaurant. The development was approved in 2004 after a lengthy and contentious struggle with the inhabitants of old Dover. Since then, new Dover has brought waves of new people to the community, drawn by the scenic beauty (and recreational potential) of the river and adjoining lake. 

When looking out the window of the old Dover community hall, the new homes are so close, it seems like you might be able to peer inside them. But the new homes are built with their backs to the community center so that they can face the lake and river. 

And so it is: old and new, back to back, a path winding between them. 

By Javier Sethness - The Commoner, January 27, 2022

published on The Commoner, 27 January 2022

This exclusive interview with Assembly, a magazine based in Ukraine, provides a fresh, on-the-ground perspective on the Russo-Ukrainian conflict. Writers from Assembly have published articles with The Commoner before, which you can find here. You may otherwise find their website here.

Comrades, thank you for agreeing to this interview. We very much enjoyed your recent article in The Commoner, ‘The Time Has Come?’, about ongoing socio-economic resistance in Ukraine.

Today, the world looks on in horror as Russian President Vladimir Putin’s military is amassing over a hundred-thousand troops on Ukraine’s eastern border. These forces are reportedly composed of sixty battalion tactical groups (BTG’s), including Spetznatz special forces, hundreds of tanks, and dozens of ballistic-missile units—not to mention either the Black Sea Fleet or aerial forces. Although Ukraine gained formal independence from the collapsing Soviet Union in 1991, Putin has repeatedly expressed nostalgia for Tsarist and Soviet imperialism, while Maria Zakharova, spokesperson for the Russian Ministry for Foreign Affairs, has long belittled the idea of Ukrainian sovereignty.

Currently, the UK is selling light anti-tank weapons to Ukraine, while the US has supplied billions of dollars in military aid to the country since 2014, when the Russian military occupied and annexed Crimea. Some media sources suggest that Putin has not yet decided whether to order the invasion, which could spark the most destructive conflict in Europe since World War II, even if Ukraine is not a part of the North Atlantic Treaty Organisation (NATO). Now, following a breakdown in negotiations, President Joe Biden is reportedly considering sending thousands of NATO troops to the Baltic countries.

By Sarah Jones - Intelligencer, January 20, 2022

Over the last ten months, Brian Kelly has traveled, twice, from his home in Alabama to New York City. Kelly, along with roughly 900 of his co-workers, has been on strike since April 2021, a lengthy ordeal they pin on their employer Warrior Met Coal’s lackluster proposals for a new contract. In an unusual move for a labor strike, he and hundreds of workers came to protest the three hedge funds that own Warrior Met and pressure them to pressure the company’s management. It hasn’t been easy: Last November, the NYPD arrested Kelly and several others in front of the headquarters of BlackRock, the largest shareholder in Warrior Met.

A third-generation coal miner, Kelly worked for Warrior Met’s predecessor, Walter Energy, for two decades until it filed for bankruptcy protection in 2015. That’s when a judge allowed the private equity firms that took it over, including Apollo Global Management, Blackstone, and KKR, to reject prior labor contracts with Kelly’s union, the United Mine Workers of America, as the Financial Times previously reported. Miners accepted a pay cut of $6 an hour to keep their jobs. Health-insurance costs increased. “Then they forced us to work seven days a week, up to 16 hours a day,” Kelly recalled. “Overall, we made a sacrifice during that time.” The firms say they saved jobs; instead, miners say private equity prospered from their suffering. Though private equity no longer owns the company, the strike is arguably their legacy.

“All told, we estimate that this conglomerate of private equity firms realized about $1.1 billion in savings coming out of the bankruptcy court just over the past five years, that were essentially taken out of the pockets of workers,” said Phil Smith, a spokesperson for the United Mine Workers. A bigger payday was still to come. “Before its initial public offering in 2017, Warrior paid them a $190m dividend from cash on hand,” the Financial Times reported. “A few months later it paid a $600m dividend funded with cash as well as a $350m debt offering.” Austerity for some can be a windfall for others.

In statements, Apollo, Blackstone, and KKR all emphasized that they are no longer intertwined with Warrior Met. “Our former investment in Warrior Met saved the company’s mining operations from the brink of collapse, allowed the company to deleverage and invest in its business and preserved more than a thousand high-paying jobs in Alabama,” a spokesperson for Apollo said. “During the time of Apollo’s investment until our ultimate exit in 2019, the company thrived — its stock price increased, they had positive relations with its workforce and the representative union, and employees, who rank among the top earners in Alabama, received significant pay increases and bonuses.”

That likely won’t persuade Smith or the miners who make up his union. Smith calls the firms “vulture capitalists,” which he explained in detail. “What the vultures do is they see something lying down on the ground and they come and they eat it, right?” he said. Warrior Met’s predecessor, Walter Energy, “was lying dead in bankruptcy court,” he explained, when private equity swooped in. “They’re preying on distressed and dead companies and figuring out ways to extract more money for themselves and for their investors from the bones and the remains of those companies,” he added.

By various - Tricontinental: Institute for Social Research, January 10, 2022

The most scandalous fact of the current period is that 2.37 billion people are struggling to eat. Most of them are in developing countries, but many are in advanced industrial states. Governments in developed countries say that there is not enough money to abolish hunger or any of the other afflictions of the modern era, whether it be illiteracy, ill health, or homelessness. However, during the pandemic, the central banks of these countries conjured up $16 trillion to protect the wavering capitalist system. Resources were readily available to save firms, but not to save hungry people: that is the moral compass of our times.

In this period, the research institutes of the capitalist states have set up new entities and published a slew of reports offering supposed remedies to ‘save capitalism’. Among these new institutions are the Council for Inclusive Capitalism (whose partners include the Bank of England and the Vatican) and the B Corporation Movement. The World Economic Forum (WEF) and the Financial Times have made the case for a ‘great reset’ to make capitalism ‘more inclusive’. ‘The pandemic represents a rare but narrow window of opportunity to reflect, reimagine, and reset our world’, says WEF Founder and Executive Chairman Klaus Schwab. Those who have brought us to the threshold of extinction and annihilation claim that they know how to fix our world. As expected, their ‘inclusive capitalism’ offers no clear programme, nothing beyond empty rhetoric.

Meanwhile, in mid-2021, twenty-six research institutes from around the world began to meet and discuss the production of a draft programme to address the current crisis. Under the leadership of the Bolivarian Alliance for the Peoples of Our America – Peoples’ Trade Treaty (ALBA-TCP), our meetings produced a document called A Plan to Save the Planet. That plan is published in this dossier. It is intended for discussion and debate.

Read the text (PDF).

By Harrison Carpenter-Neuhaus - Voices for New Democracy, December 9, 2021

The world’s climate is changing, and it’s surprising — and disappointing — how little our responses have changed since we first recognized the problem decades ago. Since the 1970s, the world has been well aware of climate impacts of burning fossil fuels and many have recognized how our political economy lies at the heart of the problem. Marxist thinkers in particular, like Paul Mattick, were quick to describe the irreconcilable contradiction between our extractive and growth-oriented economic systems and the carrying capacity of our natural ecosystems. But despite these prescient warnings, the world today is still clinging to the same economic systems and largely failing to resolve these tensions. In the face of the accelerating crisis, it’s worth reflecting on the clear trajectory that thinkers like Mattick identified, and what it means for our options in the present moment. 

In 1976, Mattick published his analysis of the problem in “Capitalism and Ecology,” just four years after scientist John Sawyer published the study Man-made Carbon Dioxide and the “Greenhouse” Effect in 1972. Sawyer’s study summarized the scientific consensus at the time around the Earth’s pressing climate concerns: the anthropogenic attribution of the carbon dioxide greenhouse gas, their widespread distribution and their exponential rise throughout the modern era. By the mid-70s, even the Club of Rome recognized the impending ecological crisis in The Limits to Growth. In short, everyone was beginning to recognize the issue: too many of us are using too many resources, too quickly, in too many places. 

As Mattick writes, Marx recognized that “the exhaustion of the earth’s wealth and relative overpopulation were the direct result of production for profit” (a point that has been explored in great detail by a new generation of eco-Marxists like John Bellamy Foster). And science bears this out. Our world has only become more productive, populated, and globalized since the Industrial Revolution, and this has correlated closely with rising levels of energy usage and greenhouse gas emissions every year. As our economic activity increases, we cannot avoid using more raw materials to keep the system moving and maintain profit margins.

Ultimately, it is capitalist social relations that drive this ecological crisis. “Social phenomena are ecological phenomena,” Mattick writes. To keep profit rates high (the motor driving the entire system), companies simply have no choice but to keep expanding and growing, and that always requires the use of raw materials — and as global capitalism expands (and demand grows as populations increase and more workers are brought out of the subsistence economy into the wage labor system), that rate of raw material consumption can only increase.

By Osprey Orielle Lake, John Foran, Asad Rehman, Kali Akuno, and Yeb Saño - System Change not Climate Change and Global Ecosocialist Network, November 22, 2021