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HOW MODERN MONEY WORKS — Economist Alan Nasser presents a slashing indictment of the vicious nature of finance capitalism; The Bio-Social Facts of American Capitalism: David Price excavates the racist anthropology of Earnest Hooten and his government allies; Is Zero-Tolerance Policing Worth More Chokehold Deaths? Martha Rosenberg and Robert Wilbur assay the deadly legacy of the Broken Windows theory of criminology; Gaming the White Man’s Money: Louis Proyect offers a short history of tribal casinos; Death by Incarceration: Troy Thomas reports from inside prison on the cruelty of life without parole sentences. Plus: Jeffrey St. Clair on how the murder of Michael Brown got lost in the media coverage; JoAnn Wypijewski on class warfare from Martinsburg to Ferguson; Mike Whitney on the coming stock market crash; Chris Floyd on DC’s Insane Clown Posse; Lee Ballinger on the warped nostalgia for the Alamo; and Nathaniel St. Clair on “Boyhood.”
Do You Remember?

We Forget Our History

by ANDREW SMOLSKI

On March 3, 2014, the House Budget Committee, chaired by Rep. Paul Ryan, released a report on what it considered the results of the “War on Poverty”, a set of policies begun by President Lyndon B. Johnson after massive social pressure. The problem with this report, “The War on Poverty: 50 Years Later”, at least from my perspective, is not its apparent misuse of statistics or its sensationalizing of trivial matters. After all, statistics are misused regularly, as numbers are ripe for manipulation when removed from their specific context. And, sensationalizing everything, from who stole a child’s candy to which politician banged what lover in the bathroom, is par for the course in a country where the mass of the population is marginalized from participating in the decision-making process. This all seemed to me to be the norm for partisan reports of this kind, attacking programs that are quite popular according to polling data.

Rather, what was grotesquely appalling was the a-historical presentation of the report. It was as if decades of policy and decisions had never been made, except when considered beneficial by those preparing the report. Labor, as well, was absent from the report, except in the most superficial way. Taken together, it was as if political economy had been reduced to zero. All of these absences make the report a mockery of much of the hard academic labor put into the studies brutalized to make the report’s ridiculous claims. In this, a qualitative corrective is needed with history as my weapon. Foolishly I enter this endeavor, understanding well what Hegel wrote, “that peoples and governments never have learned anything from history, or acted on principles deduced from it.” Alas, I hope they learn now, the people that is.

I would like to endeavor then a synopsis of the 20th century post-World War II as a way to demonstrate the importance of history, political economy and social pressure from movements. I want readers to understand that the evisceration of the “War on Poverty” by the neoliberal reaction from Reagan onwards, touted as a necessary action with “scientific” backing, is false. These three missing factors are important, because as Zizek writes, “the economy is always a political economy, a site of political struggle- in other words that its de-politicization, its status as a neutral sphere of ‘servicing the goods,’ is in itself always already the outcome of a political struggle”. So, please stay with me as we move through history arriving at the report once again with a fully re-politicized economy to combat Ryan’s arrogant report.

Post-World War II a certain social contract is created objectively between Capital, the State, and Labor. When I state objectively, I am avoiding some ludicrous idea of their having been a meeting and a contract was signed. No, what happened was the State, acting as an arbiter in the continuous dispute between Capital and Labor (otherwise known as class war), reigned in some of Capital’s more egregious abuses. This is due to numerous factors, but primary was social movements, as well as a certain right endowed upon the majority of citizens for their efforts during the war. As well, economic expansion due to the war, and the historic trend of labor shortages in the US, gave Labor a powerful position when bargaining with Capital.

See, you don’t get beneficial social programs, like Social Security, because a benevolent government with enlightened technocrats deigns it to be so. As is oft quoted, “Power cedes nothing without struggle,” thank you very much Frederick Douglas. And so, the post-World War II saw a population flexing its muscle, demanding to be heard, and opening up the government to democratic participation. Contrary to a right-wing libertarian theory of the State as an abstract and automatically illegitimate entity, the State as a concrete entity services power unless directed to do so otherwise. This also means the State was not hell bent on creating dependent constituents with social programs, but was being forced to utilize those resources extracted from the population for the population (you know, democracy). As Noam Chomsky says in an interview, paraphrasing, tax day in a democracy would be a celebration, because that’s when we would come together to fund the social programs we had decided upon.

The historical democratic opening meant the people had become conscious of political economy and understood that their lives were not part of “natural” outcomes related to economic “laws”. The “War on Poverty” is a result of this democratic opening. This is a point so completely omitted by Ryan’s report it’s as if it wore a scarlet letter. It is omitted, because Ryan follows a long tradition of people who consider this era to be a “crisis” of democracy, rather than the blossoming of democracy. It is a crisis, because the budget began to reflect less a militaristic society, and instead a society focused on creating opportunities for all. Although Samuel P. Huntington, the political scientist, saw all that democracy negatively, he wrote that “the 1960’s witnessed a dramatic upsurge of democratic fervor in America” expressed “in the forms of marches, demonstrations, protest movements, and ‘cause’ organizations.”

Sadly, these movements had to be stopped, at least if the system was to continue as a capitalist one. Capitalism is not, at least in the conceptualization I follow, backed by historical evidence, a system of “free enterprise” or “free markets”. Nor is it opposed to the State. Rather, Capitalism is a historical system rooted in the collusion of the State and Capitalists built on the enclosure of the commons, colonialism, and the extraction of surplus value both internally to the nation-state and externally in a world-economy of core, semi-periphery and periphery nation-states in order to drive the endless accumulation of capital. Therefore, to save this system, a bipartisan consensus was developed fusing the economic ideology of Austrian economics with neoclassical economics, what has become known as neoliberalism.

Here is where it all gets really spicy, or maybe that is a callous way to put it. The neoliberal shift meant suffering for millions in America. Neoliberalism is defined as a redirecting of the State towards corporate America, a reduction of its social function, and a disenfranchisement of the general population from the political process. Neoliberal policies up to the present have included tax cuts for corporations and the wealthy, “free trade” deals such as NAFTA, the deregulation of the financial sector, the deregulation of labor, the deregulation of the environment, and “reforms” of welfare programs. All of this is considered to be for the betterment of the economy, because the market is a self-regulating entity. This is of course complete bollocks, but it sounds nice.

These policies truly took off under Reagan, leading to massive increases in the budget in order to pay for the tax cuts and increased military appropriations. Some would call these giant handouts, corporate welfare and a conservative nanny State. For Reagan, and his ilk, it was about freedom. And it didn’t stop at giveaways to the rich; it was also about attacking the poor and harming the country’s sense of shared responsibility. Reagan was fully endorsing Thatcher’s line about society not existing, just individuals. A decade after the launch of the “War on Poverty”, Reagan was leading the “War on Welfare”. There were budget cuts to social security disability benefits, Aid to Families with Dependent Children, food stamps, and most other forms of welfare. And unemployment rose.

But, this wasn’t enough; welfare had to be “reformed”. As, manufacturing jobs were going overseas and the economy was being hollowed out, people had to be “incentivized” to work. You must understand helping the working poor is a “disincentive” to work, at least according to Ryan’s report. The actual line is, “almost immediately, people [unnamed] identified disincentives” with one problem being that “welfare receipt itself provided an income floor for individuals.” I think the last part could be rewritten as, you were able to not starve and this was bad. Fear of starvation is an incentive to work, and apparently our society is supportive of having that threat. So, in that climate welfare “reform” was pushed during the Clinton presidency as a bipartisan endeavor.

The population was for it, as long as it was an attack on welfare. As Howard Zinn points out, “A New York Times/CBS News poll conducted in early 1992 showed that public opinion on welfare changed depending on how the question was worded.” So, welfare bad, but help for the poor was good. Seeing as campaigns are run off of polling, politicians most likely understood this point very well. This makes it all the more cynical. It was pitting the society against itself with discourse. Without social pressure, it was a breeze to pass welfare “reform”. Aid to Families with Dependent Children became Temporary Assistance to Needy Families and another nail was put in the coffin of the “War on Poverty”. No wonder it is around this time Tupac raps the lyrics, “Instead of war on poverty, they got a war on drugs so the police can bother me”.

From the 80s onward wages had stagnated and/or declined. Full employment, considered to be around 5% unemployment, was harder to reach after each reoccurring crisis. After, welfare “reform”, which tied benefits to finding a job, the dot com bubble burst and unemployment rose once more. This made their already malicious gesture that much more horrendous. No benefits, no jobs, just suffering. And as we all know, this continues to the present and is exacerbated even further by a financial crisis created by the same people pushing for tax cuts, deregulation and cuts to welfare. It is exacerbated at a time when union membership is at an all-time low, manufacturing has been cut down by at least a 1/3, if not more, and social inequality continues to grow. So, I think if we are talking about the “War on Poverty” it ended by the beginning of the 80s. Or, more radically, as Zinn states, “President Lyndon Johnson’s War on Poverty in the sixties became a victim of the war in Vietnam, and Jimmy Carter could not go far so long as he insisted on a huge outlay of money for the military, much of this to stockpile more nuclear weapons.” Which I guess is a way to state, if the “War on Poverty” happened, it was just barely.

Nor is this a history isolated to the United States. If we do cross-country comparisons, we see around the world the same rolling back of beneficial social policy as part of multiple ideological, political and economic attacks being carried out by centers of capitalist and technocratic power. The unfinished business of combating poverty globally, as well as domestically, runs up against the limits of our societies, embedded as they are in capitalist power relationships. This is always why we have to have a return to political economy, to a consciousness about the economy as always a place of struggle. It is a battle ground of competing interests, and because we are class society, however ignored that may be, makes those class interests. This is the case nationally and internationally.

This then is my counter-hegemonic narrative. It also seems to be the narrative that has more fidelity to the actual history and not the fantasy so many elective representatives seem to live in and construct. It is a narrative that makes policy political once again, rather than the mere tweaking of models for the production of better outcomes. It is that very form of representing social problems as de-politicized natural economic processes that is meant to cover up this very real history. Ryan’s error was not in producing an ideological report, but in acting as if the report was non-ideological by shrouding it in the veneer of expert legitimacy through the use of social research, while ripping that research from any historical context. It is impossible, understanding the history of social movements, to maintain the position that welfare is the result of certain political parties or the government wanting to develop dependent constituents. Rather, these programs were seen and are still seen by the majority of the population as what a decent society should possess in order to protect its most exploited members. By treating welfare as a black box tool for cooption, and not the moral imperative or ethical necessity that it is, the report makes itself ridiculous.

Andrew Smolski is an anarchist sociologist based in Texas. He can be reached at andrew.smolski@gmail.com