“The Wizard”
Street art in Olhão, Portugal,
by artist Menau.
Photo by Menau.
Monthly Archives: August 2015
What’s Behind the Stock Market’s Rollercoaster Ride?
August 25, 2015
In an interview with Democracy Now!. economist Michael Hudson talked about the wild ride on Wall Street Monday that saw the Dow Jones Industrial Average initially fell a record 1,100 points before closing down nearly 600 points. “The real problem is that we’re still in the aftermath of when the bubble burst in 2008,” he told Amy Goodman, “that all of the growth in the economy has only been in the financial sector, in the monopolies—only for the 1 percent. And it’s as if there are two economies, and the 99 percent has not grown. And so, the American economy is still in a debt deflation. So the real problem is, stocks have doubled in price since 2008, and the economy, for most people, certainly who listen to your show, hasn’t grown at all.
Below is an interview with Hudson, followed by a transcript:
http://www.democracynow.org/embed/story/2015/8/25/casino_capitalism_economist_michael_hudson_onAMY GOODMAN: “Black Monday.” That’s how economists are describing yesterday’s market turmoil, which saw stock prices tumble across the globe, from China to Europe to the United States. China’s stock indexes fell over 8 percent Monday and another 7 percent today. On Wall Street, the Dow Jones Industrial Average initially fell a record 1,100 points before closing down nearly 600 points. The decline also caused oil prices to plunge to their lowest levels in almost six years.
Joining us now to try to make sense of what’s really behind the fluctuations in the market is economist Michael Hudson, president of the Institute for the Study of Long-Term Economic Trends, a Wall Street financial analyst and distinguished research professor of economics at the University of Missouri, Kansas City. His latest book, Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy.
MICHAEL HUDSON: Welcome to Democracy Now! It’s great to have you with us.
Thanks for having me again.
AMY GOODMAN: Professor Hudson, talk about what happened in China and what happened here in the United States.
MICHAEL HUDSON: Well, what happened in China doesn’t have very much to do at all with what happened in the United States. Wall Street would love to blame China, and the Obama administration would love to blame China, and Europe would love to blame China. But most of the Chinese stocks went down because small Chinese investors were borrowing from, let’s say, the equivalent of payday loan lenders to buy stocks. There was a lot of small speculation in Chinese stocks pushing it up. But this was an internal Chinese phenomenon. And China, as a whole, doesn’t really have the problems.
The real problem is that we’re still in the aftermath of when the bubble burst in 2008, that all of the growth in the economy has only been in the financial sector, in the monopolies—only for the 1 percent. And it’s as if there are two economies, and the 99 percent has not grown. And so, the American economy is still in a debt deflation. So the real problem is, stocks have doubled in price since 2008, and the economy, for most people, certainly who listen to your show, hasn’t grown at all.
So, finally, the stocks were inflated really by the central bank, by the Fed, creating an enormous amount of money, $4.5 trillion, essentially, to drop over Wall Street to buy bonds that have pushed the yields down so high—so low, to about 0.1 percent for government bonds, that pension funds and investors say, “How can we make money?” So they buy stocks. And they borrowed at 1 percent to buy up stocks that yield maybe 4 percent. But who are the largest people who buy the stocks? They’re the companies themselves that have done stock buybacks. They’re the managers of the companies that have used their earnings, essentially, to push up stock prices so they get more bonuses. Ninety precent of all the earnings of the biggest companies in America in the last five years have gone for stock buybacks and dividends. It’s not being invested. It’s not building new factories. It’s not employing more people.
So, the real problem is that we’re in a nonrecovery in America, and Europe is in an absolute class war of austerity. That’s what the eurozone is, an austerity zone. So that’s not growing. And that’s really what’s happening. And all that you saw on Monday was just sort of like a shift, tectonic shift, is people realizing, “Well, the game is up, it’s time to get out.” And once a few people want to get out, everybody sees the game’s up.
AMY GOODMAN: And China?
MICHAEL HUDSON: In China, it’s largely small borrowers who borrowed from intermediate lenders, that have borrowed from the big banks. So a lot of individuals in China that tried to get rich fast by riding the stock market all of a sudden find out that they have a lot of debt to intermediate, you know, non-bank lenders, insiders, people who banks will lend to. It’s like the British banks lending to real estate speculators to lend out to homebuyers. So this is essentially the attempt to get rich by riding the stock market in China went way overboard. Chinese stocks are still above what they were at the beginning of the year. This is not a crisis. This is not very much. It’s just that the artificial increase in the market has now ended some of the artificial push-up. And it’s still artificial, and it will still go down some more.
AMY GOODMAN: I’m surprised you say that what happened in China and what happened in the United States are not related.
MICHAEL HUDSON: They are related in a way, but the U.S. funds have not invested very much in the Chinese stocks. Most of the China fund stocks are inHSBC, which lends to China—the bank. The break first happened in China, but the break itself was within China. And this showed investors—this is a symptom—that what happened in China is going to happen in Europe, and it’s going to happen in the United States.
AMY GOODMAN: Talk about China as the world’s second largest economy, and what you think would be the healthiest relationship between China and the United States.
MICHAEL HUDSON: Well, the economy is not the stock market. China’s economy had to accumulate a large amount of foreign reserves just to withstand the kind of American financial war that brought the Asia crisis of 1997. So China acted defensively. It exported a lot, developed huge international reserves to make itself independent of the West. And now it’s in the middle of shifting away from an export economy to begin to produce for its own people. I mean, why should Chinese workers spend all their lives making goods for Wal-Mart to sell in the United States and Europe? Why don’t they make goods for themselves to raise their own standard of living? That was what China’s doing, and that means that China doesn’t have to export more, and there’s really nowhere to export to, if Europe isn’t growing and the U.S. consumers aren’t spending. Obviously, the attempt is to make China itself grow. But the Chinese took the money; instead of consumer goods, they bought stocks.
AMY GOODMAN: As markets in China plunged Monday, former U.S. treasury secretary and president emeritus of Harvard University, Larry Summers, tweeted this dire prediction: “As in August 1997, 1998, 2007 and 2008 we could be in the [early] stage of a very serious situation.” Is he overstating what’s going on?
MICHAEL HUDSON: The question is: What does he mean by “situation”? When he says “situation,” he means his constituency, the 1 percent. He doesn’t mean the economy as a whole, the 99 percent. He’s been wrong on almost everything that he’s called. What he’s calling for now is: You have to cut taxes on the 1 percent more; you have to give the 1 percent more money, and it will all trickle down. This is part of his patter talk, trying to support his usual right-wing position. But you have to be very careful when you listen to Larry Summers.
AMY GOODMAN: Michael Hudson, your book is titled Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy. Explain what you mean.
MICHAEL HUDSON: Well, most people think of parasites as sort of just taking, taking money from the economy, and the 1 percent is sort of sucking up all the income from the 99 percent. But in nature, what parasites do, they don’t simply take. In order to take, they have to take over the brain of the host. And economists have a word, “host economy.” It’s for a foreign country that lets American investors in. Smart parasites help the host grow. But the parasite, first of all, has to make the host believe that the intruder is actually part of the body, to be nurtured and taken care of. And that’s what’s happened in national income accounting in America and in other countries. The newspapers and the media—not your show, but most of the media—treat the financial sector as if that’s really the economy, and when the stock market goes up, the economy is going up. But the economy isn’t going up at all.
And the financial sector somehow depicts itself as the brains of the economy, and it would like to replace government. What Larry Summers said is what—governments have to pay their debts by privatizing more, essentially, by doing what Margaret Thatcher did in England. That’s his solution to the crisis: All the governments have to do is balance the budget, sell everything to Wall Street on credit, and we won’t have any more problem. And that’s basically—the financial sector is almost at war, not only against labor, as most of the socialists talk about, but against governments and against industry. It’s cannibalizing industry. So now most of the corporations in America are using their income not to do what industrial capitalism did a century ago, not to build more factories and employ more people and make more profits; they’re just using it, as I said, to push it to pay dividends and to buy back their shares and to somehow manipulate the financial sector in the stock prices, not the economy as a whole. So there’s been a divergence between the real economy and what I call the—economists call the FIRE sector—finance, insurance and real estate. And they’re going in separate directions.
AMY GOODMAN: You are—you have been an adviser to the Syriza party in Greece. You’re a friend of the former finance minister, Yanis Varoufakis. Can you talk about what’s happening there now and what that bodes for the economy, not only in Greece, but in Europe, maybe even here?
MICHAEL HUDSON: Well, the story begins, actually, about four years ago, when Greece had a very large foreign debt, taken on basically by the military government and what followed. And it was obvious that as soon as thePASOK, the socialist party, came in, they said, “Look, the debt’s much larger than we thought. We can’t pay it.” And they were going to write it down. TheIMF looked in and said, “Greece can’t pay the debts. We’ve got to write them down.” The board looked in, said they can’t pay the debts. But then the European central banks came in and said, “Look, our job as central bankers is to support the banks. Greece owes the debt to the, essentially, French banks and German banks, and we’ve got to support them.” So, despite the fact that the IMF was pushing for a debt write-down four years ago—the head of theIMF at that time, Dominique Strauss-Kahn, wanted to run for president of France, and he was told by French President Sarkozy, “Well, wait a minute, if French banks hold most of Greek debts, you can’t, at the IMF, say that we’re going to write down the debts.” So they didn’t. And meanwhile, the eurozone said, “We won’t let you, the IMF, be part of our program, the troika, if you don’t pretend that Greece can pay the debt.”
So Greece was left with a huge debt. It was pushed into depression. The GDP fell worse than it did in the 1930s. Finally, the Syriza party came in, in January, and Varoufakis and Tsipras thought, “Well, then, OK, we can explain to the finance ministers of Europe that you can’t expect to push Greece into a depression, push more austerity, and somehow austerity will enable us to repay the debt. That’s crazy.” And he thought that he could reason with them. And the Europeans, who he was reasoning with, the central bankers, said, “We’re not here to talk about economics. We’re lawyers. We’re here to collect money. It doesn’t matter that you’re going to go into a depression. It doesn’t matter that you’re going to have to have another 20 percent of your population emigrate. We’re only here to collect the payments. And if you don’t pay, then we’re going to pull the plug.”
And they pulled the plug on the Greek banks a few months ago and said, “We’re not going to accept any of the bank transfers, payments with Greek banks here. So, if you’re exporting and you want credit for export, you’re not going to give it to you. We’re going to treat Greece like America treated Cuba and America treated North Korea. You’re going to be the North Korea of Europe if you don’t succumb, surrender and pay.” And that’s why Tsipras said, “Oh, my—we don’t want to bring an absolute, you know, total breakdown, because that would bring the right wing to power.” Varoufakis said, well, he agrees that there’s no alternative but to sort of surrender for the present and try to join hands with Italy, Spain and Portugal, but he wasn’t going to be the administrator of the depression. So you had the referendum, and the Greeks now say, “Well, no matter what, we’re not going to pay.” And the eurozone says, “Then we’re going to just wreck you, or smash and grab.”
AMY GOODMAN: I want to ask you very quickly about presidential politics, about two of the Republican presidential candidates, Jeb Bush and John Kasich. Both worked for Lehman Brothers, Kasich after he ran for—after he was a congressman; Jeb Bush, according to The Wall Street Journal, Bush signed on with Lehman after leaving the Florida Governor’s Mansion, making it clear he wanted to work as a hands-on investment banker. I believe he made something like $14 million working for Lehman and then Barclays.
MICHAEL HUDSON: Well, almost—both parties are basically run by Wall Street. The Democratic Party, ever since Bill Clinton, was run by Robert Rubin. And all of the secretaries of the treasury, the officials, have basically come from Goldman Sachs, especially Tim Geithner. One of the problems in Greece, by the way, was that Obama and Geithner, coming from the Rubin group, met at the Group of Eight meetings and told—were told, basically, Greece, “You have to pay, because the American banks have made so many big bets on Greek bonds that if Greece doesn’t repay”—this is back in 2011—”then the American banks will go under, and if we go under, we’re going to pull Europe down.” So, the American banks basically—we’re talking about Wall Street investment firms. They don’t—they’re called investment bankers, but they don’t invest. They gamble. And we’re really much more in casino capitalism than finance capitalism.
So you have Wall Street people basically running politics, whether they’re the actual politicians—Obama didn’t work on Wall Street, but he worked with the real estate families. No matter who the president is, they’re going to appoint Treasury heads and Fed, Federal Reserve, heads from Wall Street. Wall Street has a veto power on all the major Cabinet positions, and so, essentially, the economy is being run by the financial sector for the financial sector. That’s the problem with politics in America today.
AMY GOODMAN: Michael Hudson, thank you very much for being with us, president of the Institute for the Study of Long-Term Economic Trends, a Wall Street financial analyst, distinguished research professor of economics at the University of Missouri, Kansas City. His latest book, Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy.
Fed acts to push US stocks higher
By Barry Grey
27 August 2015
A top official of the Federal Reserve Board broadly hinted Wednesday that the US central bank, contrary to previous indications, would not begin to raise its benchmark interest rate at the September meeting of its policymaking committee.
The statement by William Dudley, president of the Federal Reserve Bank of New York and vice chairman of the Fed’s Federal Open Market Committee (FOMC), was timed to buttress and expand an early morning rally on US stock exchanges, which had seen over $2 trillion in market capitalization wiped out in massive declines over the previous six trading sessions. Over those six days, the Dow lost 11 percent of its market value.
Speaking in New York about one hour after the 9:30 a.m. start of trading, Dudley said, “From my perspective, at this moment, the decision to begin the normalization process at the September FOMC meeting seems less compelling to me than it was a few weeks ago.” “Normalization” is Fed-talk for beginning to gradually lift the federal funds rate from near-zero, where it has remained since shortly after the September 2008 Wall Street crash.
Dudley’s remarks carry additional weight because he is known to be a close ally of Fed Chairwoman Janet Yellen. His statement was a calculated signal to Wall Street banks and other financial interests that the US central bank and government were prepared to open the cash spigot even wider and provide whatever public funds were necessary to shield the financial elite from the consequences of a new eruption of the global capitalist crisis.
When Dudley made his remarks, an opening bell surge of 430 points on the Dow Jones industrial average had fallen back to 300 points and fears were mounting of a repeat of Tuesday’s session, when an opening gain of 442 points turned into a rout in the final 30 minutes of trading, with the Dow closing down 205 points, or 1.3 percent.
Dudley’s intervention had the desired effect. Major investors went on a buying spree and drove the rally higher, resulting in massive gains for all three major indexes—the Dow, the Standard & Poor’s 500, and the technology-laden Nasdaq. The Dow finished with a gain of 619 points (3.5 percent), the S&P 500 closed 73 points higher (3.90 percent), and the Nasdaq gained 191 points (4.24 percent). These were the biggest one-day gains for all three indexes since the second half of 2011.
The surge on US markets came despite another down day on Chinese markets. An early rally on the Shanghai Composite Index collapsed, leading to a 1.3 percent loss at the close of trading. It was the fifth consecutive down session, during which the main Chinese exchange has lost more than a quarter of its value.
The loss was all the more significant in that it followed Tuesday’s announcement by the Chinese central bank of major moves, including a quarter percentage point cut in the benchmark interest rate and a reduction in bank reserve capital ratios, designed to push hundreds of billions of dollars worth of new cash into the country’s financial markets.
The surge on Wall Street came as well against the backdrop of new losses on European markets. On Wednesday, the French CAC 40 closed down 1.40 percent, the German DAX lost 1.29 percent, and Britain’s FTSE 100 index declined by 1.68 percent.
There were other signs that the global deflationary pressures underlying the recent stock market selloffs were continuing unabated. The protracted fall in commodity prices continued, with oil prices falling in both the US and Europe. The drop in the US market followed the release of weekly US inventory data showing a drop in gasoline demand and record-high stockpiles of crude oil and petroleum products.
Copper prices were down 3.1 percent.
Besides the sharp slowdown in Chinese economic growth and collapsing commodity prices, the other acute expression of a worsening world slump and mounting financial problems is the crisis in the so-called emerging market economies. Countries ranging from Brazil, to Russia, Turkey, Indonesia, Thailand, and South Africa are reeling from falling stock and bond prices, plunging currencies, and increasing indebtedness.
They are being hit particularly hard by the slowdown in China, a major market for commodity exports, and the broader combination of plunging commodity prices and glutted markets. On Tuesday, South Africa, the biggest economy on the African continent, unexpectedly reported that its economic output contracted by 1.3 percent on an annualized basis in the second quarter. Economists had predicted a gain of 0.6 percent, itself a sharp decline from the country’s first-quarter 1.3 percent expansion.
In his morning remarks to reporters, Dudley alluded to the recent global stock market and currency turmoil. “International developments have increased the downside risk to US economic growth somewhat,” he said. “The slowdown in China and the sharp fall in commodity prices are increasing the strains on many emerging market economies and this could lead to a slower global growth rate and less demand for US goods and services.”
While implicitly acceding to demands from prominent financial figures, such as former Treasury Secretary Lawrence Summers, to delay any increase in interest rates, Dudley rebuffed the call made Tuesday by Summers and Ray Dalio, head of hedge fund giant Bridgewater Associates, for a new round of “quantitative easing,” i.e., Fed bond purchases, to directly pump additional billions of dollars into US financial markets.
“I’m a long way from quantitative easing. The US economy is performing quite well,” he said. He also held out the possibility of the Fed raising rates before the end of 2015, saying, “I really hope we can raise interest rates this year.”
But in signaling the Fed’s determination to do whatever is necessary to rescue the financial aristocracy from the consequences of its own speculative and semi-criminal activities, Dudley is making clear that the ruling class will continue to carry out the very policies that, far from producing a genuine recovery, have deepened the crisis announced by the Wall Street meltdown of 2008.
The US central bank and government, and their counterparts internationally, have focused all of their efforts on rescuing the financial oligarchy and creating the conditions for it to further enrich itself at the expense of the working class.
The primary means has been the provision of unlimited funds to subsidize and underwrite the parasitic activities of the banks and hedge funds. The main mechanism for promoting what the Fed calls the “wealth effect,” i.e., the enrichment of the financial-corporate elite, has been the stock market, with the Fed financing a massive inflation of share values by means of zero interest rates and money-printing in the form of quantitative easing.
Before the latest market turmoil, share values on US markets had tripled from their lows at the height of the financial crisis in early 2009, and stock markets internationally had hit record highs.
This has gone hand in hand with a relentless attack on the conditions of the working population by means of mass layoffs, wage-cutting and the gutting of social programs. Governments have been bankrupted by the diversion of funds to bail out the banks and speculators, whose debts have been shifted onto the balance sheets of the capitalist state, with the working class made to foot the bill.
Meanwhile, the real economy has been starved of productive investment and left to stagnate. The current stock market turmoil reflects the growth of deflationary forces in the global economy that threaten to overpower the efforts to inflate and maintain financial bubbles for the benefit of the rich.
Street art in Campobasso, Italy
“In The Light Of Artist”
Street art in Campobasso, Italy,
by Italian artist ZED1.
Photo by ZED1.
Dismaland, Banksy’s parody theme park
A despairing response to a complex world
By Kelly Taylor
26 August 2015
The announcement that artist Banksy was creating “Dismaland”, an installation parodying the theme park experience, created a huge wave of interest. (See the video trailer here.)
The website selling advance tickets for the show crashed due to the volume of people trying to make a purchase. Banksy issued apologies and follow-on announcements. Despite rumors that the process was a hoax, a spokeswoman for the artist insisted, according to the BBC, that the attraction’s website was “100 percent real” and had gone down under “huge demand”.
Dismaland at night
In any event, the ticket-buying experience was a taster for the theme park as a whole—how the process of life under capitalism of building hope, excitement and anticipation in youth becomes butchered by the reality of disappointment, anger and loss in adulthood. This was a sentiment expressed by one of the artworks, proclaiming, “Keep hold of your longings … going … going … gone”.
Banksy says he hit upon the location for the theme park while walking past the disused Art-Deco “Tropicana” Lido in the seaside resort of Weston-super-Mare (on the Bristol Channel, 18 miles southwest of Bristol) six months ago. There is some irony to the fact that the event is being held in the town. After the Second World War it became a popular holiday destination for workers from industrial Birmingham, but then fell, like many resorts, into a protracted decline in the 1970s. Today, with significant alcohol and drug problems, parts of Weston have turned into a real-life Dismaland.
A slogan at Dismaland
Entry to the theme park is via an airport-type security installation created by California-based artist and filmmaker Bill Barminksi. Actors play the roles of unhelpful and intimidating staff. For visitors, it is probably the only opportunity they will get to poke fun at security measures and not face further consequences.
This effort to warn about the threat of a militarised and locked-down society is married to another concern of Banksy—attendees bringing in pens, markers and paint. They are not allowed on site, for fear of attack on the artwork by opponents of Banksy who feel he has sold out to commercialism.
Coming through the main gates into Dismaland, one is confronted with a world that is terribly sick, where the staff are depressed, uncooperative and dreary, and the slowed-down Hawaiian-style holiday music continually bears down on you. The entire thing is a scene of surreal carnage, with a riot van operating as a fountain on the palace lake.
The show consists of three parts: the traditional Banksy dark view of modern life with old, battered fairground toys littered everywhere, along with works from his previous shows in Bristol and New York; a more traditional art exhibition inside the old main building; and an area of tents given over to the promotion of “political activism”. Throughout the exhibition there is a strong anarchistic theme, conveyed through simplistic slogans such as “Power Inherently Corrupts, Don’t Trust Experts”.
Dismaland brings together artists from all over the world and particularly the oppressed countries of the Middle East in an interactive art form, with Banksy in the role of curator. Some of the art works are sensitive and emotionally charged, and address the chaos and violence of the present class system, including:
* Banksy’s “Immigrants on a Boat”. This traditional seaside slot machine game allows visitors to steer boats across a pool, but with a difference. Numerous boats are packed with migrant workers, but one is a gunboat patrolling below the white cliffs of Dover while the attendant shouts out, “I see no borders, I see no race”. It comes as a shock to visitors to realise the water is littered with dead migrants or to discover they are steering the gunboat. The feeling that these people are human and deserve better is heightened by the intricate and individual detail in each migrant’s face, clothing and posture.
Migrants on a boat by Banksy
* Amir Schiby’s upside down image of four Palestinian boys playing on a beach, recalling the innocence and beauty of childhood and made all the more emotive knowing they were later killed by Israeli shelling.
* Jimmy Cauty’s UK town in the aftermath of a social uprising, the scale and detail of which is breathtaking. The flashing blue lights of the police light up the set. The streets are awash with soldiers and police, a few of whom spray “Fuck the P……” on a wall—a reminder of the false flags and provocations often carried out by the police to justify further oppression.
* Darren Cullen’s “Pocket Money Loans” installation, offering a satirical attack on payday loan companies. Children are offered a good price to sell their healthy teeth and get advance payments on their pocket money.
From Darren Cullen’s “Pocket Money Loans” installation
* The “Museum of Cruel Objects”, curated by Gavin Grindon, housed in a blacked-out bus with a timeline of war and oppression.
* Tammam Azzam’s reproduction of Gustav Klimt’s “The Kiss”, projected onto a bombed-out housing complex in Damascus, Syria.
The simple iconoclastic images in Dismaland and the one-liners that often accompany them offer the visitor an amusing, angry and healthy protest, but after a while their impact weakens and one is struck by the build-up of unrelenting despondency. Inevitably, hopelessness and the lack of belief that the situation can be improved create a certain cynicism.
However genuine Banksy’s opposition to the existing set-up may be, his outlook has never developed beyond a youthful anarchism gained on the trendier back streets of Bristol.
Tamman Azzam’s reproduction of Gustav Klimt’s “The Kiss”
Disneyland, like McDonalds, is an easy target and something of a cliché for artistic treatment. More problematic still is the thin line between attacking big-brand influence on economic and political life and blaming the working class for supposedly being wedded to consumerism and viewing a trip to Disneyland as the “holiday of a lifetime”. Attendants in various places hold bunches of black balloons—as if for sale-which read, “I am an imbecile”.
The resignation, passivity and fatalism expressed by the likes of Banksy become links in a causal chain. This is an artist who has had an impact on people. It is an evasion of responsibility simply to say “Oh, what a terrible world we live in, but there’s not much we can do about it”.
The limitations of the parody theme park raise the need for a far greater appreciation by artists of a host of historical and contemporary issues, including the crisis of working class leadership and perspective. Only such a deeper understanding will help break down the scepticism and pessimism that dominates in artistic circles, even the “oppositional” ones. And it might lead Banksy and others to avoid simply portraying working people as passive victims of the “consumer society”, but as the social force that can and will fight for something better.
The atrocities of ISIS and the US wars of sociocide
26 August 2015
Images posted Tuesday on social media have confirmed the destruction by the Islamic State of Iraq and Syria (ISIS) of the 2,000-year-old temple of Baal Shamin in the Syrian city of Palmyra. The images show ISIS fighters planting explosive charges throughout the ancient structure and then detonating them, reducing the temple to rubble.
The willful demolition of this site, one of the most important cultural centers of the ancient world and one of the best preserved Greco-Roman ruins in existence, followed the savage murder a week earlier of Professor Khaled Assad. The 82-year-old Syrian archeologist had participated in the excavation and restoration of Palmyra’s ruins and had remained there as the head of antiquities for nearly half a century. He was beheaded for refusing to assist ISIS in looting the site.
UNESCO, the United Nations cultural and educational agency, justifiably denounced these atrocities as “war crimes,” adding that “their perpetrators must be accountable for their actions.”
There is no question that those responsible for these acts and for far bloodier atrocities against the Syrian people are criminals and should be held accountable. The obstacle to bringing to justice those principally responsible, however, is the fact that they are the former and current chief officials in the White House, the Pentagon and the CIA.
It was they who laid waste to one Middle Eastern country after another, while working with the Islamist forces that comprise ISIS to carry out their wars of regime-change against a series of secular Arab governments.
The systematic destruction of a cultural heritage carried out by ISIS has a historical precedent in the crimes carried out by the Pol Pot regime and the Khmer Rouge in Cambodia from 1975 to 1979. This regime set out to erase the country’s cultural heritage, while carrying out a reign of terror and mass murder against the population.
The similarities between ISIS and the Khmer Rouge do not end with their barbaric assaults on culture and human life. In both cases, the preconditions for these atrocities had been created through the destruction of entire societies by US imperialism.
In Cambodia, a US bombing campaign dropped some 532,000 tons of explosives on the country in four years—more than three times the tonnage dropped on Japan during all of World War II. The resulting death toll is estimated as high as 600,000, while 2 million people out of a population of 7 million were made homeless and economic life was shattered.
ISIS and the current bloodshed across Syria and Iraq are the direct products of similar acts of sociocide on the part of US imperialism. In Iraq, the illegal US invasion of 2003, the subsequent occupation and the systematic destruction of what had been one of the most advanced health and social infrastructures in the Arab world claimed the lives of over 1 million Iraqis, while turning another 5 million into refugees. The divide-and-rule strategy pursued by the Pentagon stoked a sectarian civil war by deliberately manipulating tensions between Iraq’s Shia and Sunni populations.
The ramifications of this policy have long since spilled across national borders, with increasingly catastrophic consequences, all driven by Washington’s resort to militarism to advance its aim of hegemony over the energy-rich regions of the Middle East and Central Asia.
To this end, the US has been involved in wars for over 35 years, beginning with the CIA’s orchestration of the war for regime-change against the Soviet-backed government in Afghanistan, where it allied itself with Islamist forces, including Osama bin Laden and the other founders of Al Qaeda.
Nine months before the last US troops withdrew from Iraq in December 2011, Washington and its NATO allies launched another unprovoked war of aggression to topple the government of Muammar Gaddafi in Libya and impose their own puppet regime over the oil-rich North African country. The destruction of the Libyan state and the murder of Gaddafi plunged the country into chaos and bloodshed that continues to this day. Islamist militias used as US proxies in the Libyan war, along with tons of captured Libyan weapons, were subsequently funneled—with the aid of the CIA—into the civil war in Syria, strengthening ISIS and helping create the conditions for it to overrun more than a third of Iraq.
In the name of the never-ending “war on terrorism,” Washington is prosecuting another military campaign in alliance with the Shia-based government in Baghdad against ISIS in the predominately Sunni regions of Iraq, while in Syria it is stepping up military operations in alliance with Turkey, Saudi Arabia and the other Sunni Gulf monarchies, while attempting to find “moderate” Sunni Islamists it can utilize as proxies in the war to topple the government of President Bashar al-Assad.
The New York Times Tuesday published a lengthy article reflecting an internal debate within the Obama administration over whether to provide more direct US support to Ahrar al-Sham, a Sunni Islamist militia with multiple links to Al Qaeda. The group already receives extensive backing from key US allies Turkey and Qatar.
The horrific consequences of decades of US wars are now spilling into Europe, with the increasingly desperate flight of hundreds of thousands of refugees—in many cases at the cost of their own lives—from homelands that Washington has turned into killing fields.
Politically and morally, the US government and its top officials, starting with Bush and Obama, are totally responsible for all of the crimes, atrocities and human suffering resulting from the multiple wars of aggression they initiated.
None of them have been held to account. Representatives and defenders of an oligarchy of corporate billionaires, they are not, under the present political setup, answerable to the American people, whose opposition to war they routinely defy.
The task of bringing these war criminals to justice and putting an end to the succession of wars and growing threat of a new world war lies with the working class. It must mobilize its independent strength in a mass international antiwar movement.
Bill Van Auken
Street art in Montreal, Canada
From Birdo aka Jerry Rugg in Montreal, Canada.
As global selloff deepens, US stock market teeters on edge of collapse
By Barry Grey
25 August 2015
World stock markets continued to plummet Monday, fueled by another steep decline in Chinese shares and concerns over a marked slowdown in the world’s second-largest economy and turmoil in emerging market economies.
The Shanghai Composite Index fell 8.5 percent, its sharpest fall since February 2007, bringing its losses since June to nearly 40 percent. Major stock exchanges across Asia followed suit, with Japan and Hong Kong falling 4.6 percent and 5.2 percent, respectively.
The panic spread to Europe, with the British, German and French indexes plunging between 4.6 percent and 5.2 percent. Stocks also sank across the Middle East and in Latin America.
But the meltdown was most intense in the United States. With pre-market futures for the Dow Jones Industrial Average down 700 points, the Dow collapsed at the opening bell, along with the S&P 500 and Nasdaq indexes.
Within four minutes of the trading start, the Dow had sunk by 1,089 points, or 6.6 percent, the biggest single-day point drop in US history. The Nasdaq dropped 400 points, or more than 8 percent, and the S&P 500 fell over 100 points, about 5 percent.
The massive and seemingly unstoppable wave of selling shocked market experts and commentators and provoked comparisons to the “Black Monday” trading disaster of 1987, when the Dow plunged 22 percent in one day. There were many indications that a full-scale meltdown was in progress.
Apple stock plunged 13 percent at the opening, prompting CEO Tim Cook to go on CNBC television to reassure Apple investors that the company’s business in China was not threatened. Apple ended the day with a 2.47 percent loss.
Online brokerage firms TD Ameritrade and Scottrade were swamped by a wave of sell orders, blocking many investors from gaining access to their accounts. Scottrade said that it experienced a 230 percent spike in trading volume at the opening.
The VIX, a market index that measures volatility and is known as the “fear index,” hit 53. The last time it was over 50 was in March 2009, when the market hit bottom following the September 15, 2008 Wall Street crash.
The atmosphere of panic was also reflected in a large-scale move from stocks to US government bonds. The yield on US ten-year Treasury notes, considered a safe haven, fell below 2 percent for the first time in months, reflecting a surge in demand for the bonds.
Yet five minutes after the initial US market collapse, a wave of buying cut the losses in half. At one point the Dow came within 115 points of breaking even. The selloff resumed later in the day and the Dow ended the session with a loss of 588 points, or 3.6 percent. The S&P 500 ended down 77 points, or 3.94 percent, and the Nasdaq closed with a loss of 179 points, a decline of 3.82 percent.
All three indexes are in “correction” territory, having declined by more than 10 percent from their recent highs.
There can be little doubt that the Federal Reserve Board and related government agencies intervened behind the scenes to organize the massive buying spree that halted the opening market plunge. Reports emerged later that the New York Stock Exchange had invoked an obscure and rarely used rule to preempt panic selling. Rule 48 speeds up the opening of trading by suspending a requirement that stock prices be announced at the beginning of the session. This may have been used to facilitate an intervention by the Fed.
Given the role of the Fed in financing the tripling of stock prices since the 2008-2009 crash by holding interest rates at near-zero and pumping trillions of dollars into the financial markets, such an intervention to once again rescue the financial elite would not be an aberration. The entire policy of the Fed and other major central banks and governments since the eruption of the crisis seven years ago has been focused on engineering a vast redistribution of wealth from the working class to the corporate-financial elite through a combination of austerity and record high stock prices.
The unprecedented bull market has been the main mechanism for further enriching the world’s multimillionaires and billionaires, even as the real economy was starved of productive investment and remained mired in stagnation. The current stock market panic reflects the growth of deflationary pressures in the global economy that are overpowering the efforts to inflate and maintain financial bubbles for the benefit of the rich and the super-rich.
The slowdown in China, marked by a decline in manufacturing and falling exports and investment, is itself an expression of a global downturn. China is hit particularly hard because it has been the main impetus for global economic growth since the 2008 crisis and is heavily dependent on expanding world production and markets for its industrial exports. Its attempts to stimulate growth through infrastructure projects, real estate speculation and an expansion of its stock markets have foundered against a general climate of stagnant or anemic growth in the US, Europe and Japan.
Analysts attributed Monday’s further decline in Chinese stocks to disappointment over the government’s failure to intervene more strongly to prop up the market after a series of sharp falls last week. The regime gave approval for Chinese pension funds, with some $550 billion in assets, to invest in the stock market, but failed to lower the level of bank reserves, which would free up cash to plough into the market.
“The pension fund signal didn’t work, which proves that investors have entirely lost confidence in the market,” said Wu Xianfeng, president of Longteng Asset Management in Shenzhen. “The market has been in a panic since last week.”
The slowdown in China and in the world economy more broadly, along with a rise in the US dollar, has undermined so-called emerging market economies from Brazil and Mexico to Turkey, Russia, Indonesia and South Africa, which depend on China as a market for their commodities exports. The financial markets and currencies of these countries have been plunging for weeks, exacerbating the international tendencies toward slump and threatening to spark a financial crisis.
A definitive expression of economic stagnation is the ongoing decline in commodity prices. US oil prices on Monday fell another 5 percent to six-year lows, dipping below $38 a barrel. Brent crude oil fell below $45 for the first time since 2009. London copper and aluminum futures also hit their lowest levels since 2009.
Since China devalued its currency two weeks ago following poor data on exports and industrial activity, trillions of dollars in market value worldwide have been wiped out as a result of falling stock prices. Germany’s DAX index has lost 22 percent since its April high.
“Until we have some sign that China and the emerging markets aren’t being sucked into some vortex from which they can’t recover…it is unlikely this selloff will stem,” Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, told Reuters.
A former adviser to ex-British Prime Minister Gordon Brown was more apocalyptic. Damian McBride tweeted advice on “the looming crash,” stressing the need to put “hard cash in a safe place” and not assume that banks will be open. Suggesting the eruption of civil strife and state repression, he counseled the need to stock up on “bottled water, tinned goods & other essentials at home to live a month indoors.”
He further advised the preparation of a “rally point” for loved ones “in case transport and communication get cut off.”
“We’ll die for this land”: when slum dwellers revolt
South African media often depict poor black protesters as angry and irrational. Supporting their struggle requires challenging this discursive trope.
Photo: A boy watches as the police moves into the Marikana slum, by Daneel Knoetze, via GroundUp.
Put your shoes into my shows
and wear me like a human being
would wear another human being.– Conway Payn of the Symphony Way Pavement Dwellers
In the aftermath of deadly communal violence that rocked the Cape Town township of Philippi East, where dozens of homes were destroyed and four killed, I meet a young man named Raymond in the new shack settlement of Old Marikana.
On this cold winter day amongst the corrugated zinc shacks, Raymond dons the popular K-Way branded beanie and a typical blue South African construction worker onesie – dirty, old and with plenty of holes. He wears his anger on his sleeve – a bit intense, crazed. Full of unruly energy both physically and verbally, he jumps from one topic to the next, rarely transitioning with explicit conceptual links.
Raymond’s mannerism offends Makhulu (‘Grandma’) Judith, the settlement’s assertive elder activist and ardent churchgoer. Yet standing amongst the makeshift plywood fencing that surrounds each home, I find him intriguing because he seems to exemplify the typical caricature of angry black youth in the South African media.
Raymond’s rational anger
His brother, Justice, relating to me Raymond’s particular intelligence, laments that he is “not right in the head” because of ‘tik’, the favored local variant of crystal meth. He complains that his brother, who does not have a formal job, recently stole his TV and destroyed his previous home in aid of his habit.
Yet Raymond’s stories of shepherding cows on the empty land that became Marikana and his persistent conflicts with police, arouse my curiosity. While it is difficult to discern which aspects of his stories are real and which are imagined, the stories themselves complicate the simplistic youth narrative.
“The anger of the poor can go in many directions,” explains shackdweller leader, S’bu Zikode.
In his engagement with me, Raymond knows that he is playacting the embodiment of the angry black youth. He is implying through his range of emotions what can happen to those who are mistreated and cornered into despairing ghettos — their righteous anger turning inwards onto their own community.
As a resident of Old Marikana, Raymond was not party to the protests and subsequent violence which began after electricity disconnections in New Marikana. He kept away knowing his vulnerability at confronting the ensuing mob from Lower Crossroads: “They have guns… I used to have a gun but it was taken away by police.”
But his anger at almost everyone around him is immediately visible. He indicates that if he still had a gun and lived in New Marikana, he would have been forced to return fire to defend himself.
In a recent article on Donald Trump, journalist Oliver Burkeman notes that “nobody ever does ‘crazy things’; every behavior in which we engage makes some kind of sense, once you ‘understand the emotional premise’.”
This is true of Raymond as well.
One cannot understand the destruction nor the African National Congress (ANC) factional fights in the area, without comprehending how people like Raymond think and are situated emotionally. Raymond’s anger is powerful — in the way it unsettles people like Makhulu, in the way it has the potential for horrific violence, but also in its productive force. He is able to, politically speaking, cut straight to its underlying cause.
He interrupts my conversation with Makhulu about the destruction that had ensued a few weeks earlier exclaiming: “They treat us like dogs here!”, referring to the wealthy elite and the state forces who have forced him into this township ghetto. He is acutely aware of the structural onslaught against his humanity.
Discursive trope
It is a common discursive trope in South Africa — as elsewhere — to present poor black people, especially youth, as irrational.
This is not merely an expression of individual prejudice, but also a rhetorical device perfected in the colonial era to justify the domination of black civilization. As a crude social construct, it has been extended to further subjugate the female gender and oppress the poor.
South Africa is not an exceptional place in this regard. Apartheid, as Mahmood Mamdani points out in Citizen and Subject, was merely the deepening of racist colonialism on the African continent. Post-1994, in the most crucial ways,apartheid remains. Its ideology is stronger than ever, presenting blacks — i.e., all non-white South Africans, including those characterized as Indian and colored — as uncivilized and lacking reason.
During expressions of violence that emanate from oppressed communities, this trope is strutted out publicly by politicians, police, lawyers and media to justify repression. Recently, the most prominent example is mainstream media obsession, following the 2012 Marikana Massacre, with the use of Muti (traditional medicine) by striking miners in their struggle against Lonmin and the police. The racist vilification was even legitimated at the Farlam Commission as evidence that the miners had “lust for murder.”
Delving into the complexity of local community politics to show a hidden order and logic even in seemly incoherent situations helps challenge this mode of thought. The Symphony Way Corridor, as the site of continuous occupations since 2007, is an important example that allows us to understand this community rationality.
The pavement dwellers and other occupiers
During the 2007 Christmas holidays there was a massive occupation of over 1,000 newly built government houses along Symphony Way in Delft. After thousands were evicted two months later, the Democratic Alliance (DA) councilor who opportunistically supported the occupation, turned his back on the occupiers, instead advocating their removal to the “the human dumping ground” of Blikkiesdorp (Tin Can Town).
Those who resisted the political party machinations of the DA and the ANC staged a second occupation in February 2008 and became known as the Symphony Way Pavement Dwellers — one of the most inspiring intentional communities I have ever encountered. Following their 21-month blockade of the Symphony Way thoroughfare, they were forcibly removed to Blikkiesdorp where they are again in the news fighting expansion plans for Cape Town International Airport.
On the other side of the busy N2 Freeway along Symphony Way lies Philippi East. What was once poor farmland (sold to private investors who left it unused for decades), has now become a massive shack settlement of over 10,000 people.
This began in 2011 with the occupation of ‘Zone 14′. Two years later backyard dwellers from across the road in Lower Crossroads attempted to occupy adjacent land. They called their new home Marikana, they said, “because like the 34 miners shot by police, we are willing to die for this land.”
After months of evictions, reoccupations and protests, a small steadfast group of the original occupiers were able to gain a long-term foothold and challengedtheir eviction in court.
Then in July last year, some desperate families approached the Marikana community hoping to join their settlement. As often happens when struggles take legal routes, Marikana residents refused to let them build on the occupied land for fear that this could affect their eviction case.
However, there was a massive expanse of fallow land next-door and residents encouraged these families to settle there instead. The new occupation, ‘Rolihlahla’, after the lesser known Xhosa name of Nelson Mandela, consisted of only a dozen or so families during its first few weeks.
Yet in August 2014, word of their successful occupation suddenly spread. Thousands turned up and, in the space of only two weeks, the 10,000-strong ‘New Marikana’ land occupation was born.
Marikana residents seen protesting on the streets of Phillipi East.
Photo by Lulama Zenzile.
The militancy of the ‘poo protestors’
Most shack settlements in South Africa are organized along a continuum from democratically-elected to autocratically-appointed committees typical of communist-inspired anti-apartheid organizing. These committees are rarely at one or another end of the spectrum — usually put forward by local politicians with top-down sway but given tacit operating approval by residents. On the other hand, sometimes these committees are elected, but lose their democratic character as they are co-opted into existing local political structures.
New Marikana and Rolihlahla took such forms. The former affiliated with the ANC-aligned Ses’khona social movement and the later associated with another ANC faction that backed the local councilor. Old Marikana, on the other hand, retained a committee unaffiliated with party politics. Though it was militant for some time, its leadership and mobilization soon diminished as the threat of evictions faded.
However, New Marikana under the banner of Ses’khona, referred to disparagingly in local media as the “poo protesters” after they dumped bucket toilets in front of government buildings, has staged a number of large marches on the city government demanding basic services. Unsuccessful at compelling the DA-led City of Cape Town to acquiesce to their demands, New Marikana’s tactics, soon became more aggressive.
Rank-and-file were frustrated with queuing in long lines for water and not having their refuse removed. However, militant action was also stoked by top-level Ses’khona leadership looking to one-up the opposing ANC faction in nearby New Crossroads.
A community unmade by destruction
In late May, the New Marikana community’s electricity was cut. Jolene Henn, Western Cape spokesperson for the energy para-statal Eskom, responded to my questioning by blaming the outage in the area on “illegal electricity connections” by residents. She categorically denied any role in the disconnections.
However, reports coming from New Marikana indicate that electrical workers from either the City of Cape Town or Eskom had disconnected the settlement from the power grid.
Whatever the truth, it was this perception of forced disconnections which put hundreds of angry people on the streets. The police met the consequent road blockade of Symphony Way with a violent response employing semi-lethal means to disperse the crowds.
As frustration increased, the protests escalated. A small group of Marikana residents burned down the house of the local ANC councilor. An indignant old lady complaining about tire smoke had her Lower Crossroads house set alight as well. The last straw was the attempted incineration of a local school. In response, a group from Lower Crossroads struck back with the explicit aim of driving out all of Marikana’s 10,000 residents.
For a month following the violent clashes between groups from Marikana and Lower Crossroads, Symphony Way remained strewn with garbage, rocks, massive cement blocks and burned metal wiring that was once an assemblage of blazing Dunlop tires. Sections of the roads remained dug up and armored police Nyala APCs straddled the road with trailers of barbed wire previously used to separate the communities.
In Lower Crossroads, about a dozen formal “RDP” houses, including that of the local councilor, were burned down. In New Marikana and Rolihlahla, homes made from zinc sheeting were also scorched, demolished or abandoned. Approximately 40 burned-out shacks were visible from Symphony Way and many more homes were destroyed deep within the settlements. It took about a month before families who fled as refugees returned.
The media and the problem of reporting on violence
Generally, South Africa’s mainstream media descend like a pack of vultures at the slightest smell of large-scale violence — a well known performance actstarring various groups of protesters, police and journalists. This is generally the only time many newspapers bother to report on the lives of poor people.
However, the violence in Philippi East barely registered on the media’s radar except via the nonprofit news service GroundUp. This inattention was despite the massive destruction and week-long blockades impacting hundreds of thousands in the area, the dozens of families who lost their livelihoods, and the murder of four people in cold blood.
The coverage that did take place neither problematized the violence nor bothered to try to understand it. The media discourse remained simple: uncivilized and angry poor black youth are once again fighting one another. The irrational violence has something vaguely to do with the (depoliticized category) ‘service delivery’.
Yet, much was happening behind the scenes showing an introspective and thriving group of communities attempting to remake the fabric of a township in which they have little control over their own lives.
Sign at the entry of the Marikana settlement. Photo by author.
Meeting and rebuilding
Within the context of the massive violence, communities led a counter-movement to rebuild social relations. Mass meetings were called, negotiations began and people sought to quell the tension through various collective acts. New Marikana leadership held meetings to decry the violence and extort its residents to stand down. They also went to meetings in Lower Crossroads to officially apologize and make amends.
Next-door, Rolihlahla held public meetings to address these issues. While they had not joined the protests, they were still targeted when residents of Lower Crossroads attacked. When I attended one of the meetings, at the invitation of their now deceased pro-bono lawyer and aspiring politician, Gcinikhaya Nqaqu, the main item on the agenda was restoring their relationship with Lower Crossroads.
In poor communities where residents lack home insurance and money to rebuild, the idea of collective reconciliation and restorative justice is not just an airy-fairy philosophy, but a practical way of ensuring the reconstruction of social relations after conflict.
Despite the fact that an individual community member had joined the New Marikana protests and was responsible for burning the house of the old lady across the road, a committee member named Thuliswa suggests that they collect 50 rand from each resident to fix it. After intense discussion and vacillation, residents collectively committed to both raising this money and volunteering their skills as builders, carpenters and electricians. This is what the rationale of the collective looks like in practice.
Directing anger
Back in Old Marikana, residents discussed the importance of heading off such violence in future. Makhulu lamented to me that “they [the residents of Lower Crossroads] are poor people like you; they are also staying in shacks before they get houses.” She wants people to direct their wrath at the government rather than at one another.
Makhulu’s words reminded me of a message that Conway Payn of the Symphony Way Pavement Dwellers narrated to me six years ago as part of the innovative anthology: No Land! No House! No Vote!
It was a message about a dog, backed into a corner, hurt, hungry, angry, and with no other way out than through the person who had trapped it. In his poetic tale of his own anger and resistance, Payn assures us that the dog will eventually develop the courage to pass through its jailer, and — if necessary — kill him in the process.
Directing his anger is something that Raymond, given his fractious situation, is unable to do despite being politically aware of where his oppression comes from. Ultimately, this is the primary difference between Conway and Makhulu’s ire and that of Raymond. It is also the key divergence between the mob-like violence that upended Philippi East and the original rebellion against electricity disconnections a few days earlier.
One of the recurring themes I have encountered where communities organize themselves is the importance of directing anger vertically, at those in power, rather than horizontally, at those who are suffering right beside you. It is this process and the subsequent tension with authority that creates space for maintaining strong social relationships and engaging in horizontal forms of organizing.
The collective struggle of the Symphony Way Pavement Dwellers recognized this and it was through this tension-laden process that they were able to virtually stamp out crime, ensure all of their children went to school, and build a vibrant and semi-autonomous community during their 21 months of occupation.
Yet this form of transformation remains beyond the current struggle in Marikana. There are many forces at hand using anger as a divide and rule tactic of governance. For instance, Ses’khona’s factional fights with the local ANC councilor are couched in a militant language of resistance hence easily fuel the misdirected violence.
While Marikana is a “community in movement,” to reword Raul Zibechi’s notion of Latin American movement organizing, it is difficult to predict whether that motion will be able to build autonomous forms of resistance from below, or if violence will continue to eat away at the social structure of these communities. However, for such struggles, it seems that one of the keys to achieving the former is the necessity of working with youth similar to Raymond to produce more enabling social environments that direct anger vertically.
For those of us who are on the outside, who may come from a privileged, middle-class background and often fall prey to the propaganda that present poor black people as irrational, our support for autonomous organizing must also include challenging this discursive trope. This begins with “wearing” the lives of people like Raymond.
Jared Sacks is a founder of a children’s NGO. Since 2007, he has been living in Cape Town working directly with a range of poor people’s movements. He is also a freelance journalist and the compiler of the anthology No Land! No House! No Vote!. He blogs at Medium and tweets at @jaredsacks1.
Why the Rich Love Burning Man
Burning Man became a festival that rich libertarians love because it never had a radical critique at its core.
In principle the annual Burning Man festival sounds a bit like a socialist utopia: bring thousands of people to an empty desert to create an alternative society. Ban money and advertisements and make it a gift economy. Encourage members to bring the necessary ingredients of this new world with them, according to their ability.
Introduce “radical inclusion,” “radical self-expression,” and “decommodification” as tenets, and designate the alternative society as a free space, where sex and gender boundaries are fluid and meant to be transgressed.
These ideas — the essence of Burning Man — are certainly appealing.
Yet capitalists also unironically love Burning Man, and to anyone who has followed the recent history of Burning Man, the idea that it is at all anticapitalist seems absurd: last year, a venture capitalist billionaire threw a $16,500-per-head party at the festival, his camp a hyper-exclusive affair replete with wristbands and models flown in to keep the guests company.
Burning Man is earning a reputation as a “networking event” among Silicon Valley techies, and tech magazines now send reporters to cover it. CEOs like Mark Zuckerberg of Facebook and Larry Page of Alphabet are foaming fans, along with conservative anti-tax icon Grover Norquist and many writers of the libertarian (and Koch-funded) Reason magazine. Tesla CEO Elon Musk even went so far as to claim that Burning Man “is Silicon Valley.”
Radical Self-Expression
The weeklong Burning Man festival takes place once a year over Labor Day weekend in a remote alkali flat in northwestern Nevada. Two hours north of Reno, the inhospitable Black Rock Desert seems a poor place to create a temporary sixty-thousand-person city — and yet that’s entirely the point. On the desert playa, an alien world is created and then dismantled within the span of a month. The festival culminates with the deliberate burning of a symbolic effigy, the titular “man,” a wooden sculpture around a hundred feet tall.
Burning Man grew from unpretentious origins: a group of artists and hippies came together to burn an effigy at Baker Beach in San Francisco, and in 1990 set out to have the same festival in a place where the cops wouldn’t hassle them about unlicensed pyrotechnics. The search led them to the Black Rock Desert.
Burning Man is very much a descendent of the counterculture San Francisco of yesteryear, and possesses the same sort of libertine, nudity-positive spirit. Some of the early organizers of the festival professed particular admiration for the Situationists, the group of French leftists whose manifestos and graffitied slogans like “Never Work” became icons of the May 1968 upsurge in France.
Though the Situationists were always a bit ideologically opaque, one of their core beliefs was that cities had become oppressive slabs of consumption and labor, and needed to be reimagined as places of play and revolt. Hence, much of their art involved cutting up and reassembling maps, and consuming intoxicants while wandering about in Paris.
You can feel traces of the Situationists when walking through Black Rock City, Burning Man’s ephemeral village. Though Black Rock City resembles a city in some sense, with a circular dirt street grid oriented around the “man” sculpture, in another sense it is completely surreal: people walk half-naked in furs and glitter, art cars shaped like ships or dragons pump house music as they purr down the street.
Like a real city, Burning Man has bars, restaurants, clubs, and theaters, but they are all brought by participants because everyone is required to “bring something”:
The people who attend Burning Man are no mere “attendees,” but rather active participants in every sense of the word: they create the city, the interaction, the art, the performance and ultimately the “experience.” Participation is at the very core of Burning Man.
Participation sounds egalitarian, but it leads to some interesting contradictions. The most elaborate camps and spectacles tend to be brought by the rich because they have the time, the money, or both, to do so. Wealthier attendees often pay laborers to build and plan their own massive (and often exclusive) camps. If you scan San Francisco’s Craigslist in the month of August, you’ll start to see ads for part-time service labor gigs to plump the metaphorical pillows of wealthy Burners.
The rich also hire sherpas to guide them around the festival and wait on them at the camp. Some burners derogatorily refer to these rich person camps as “turnkey camps.”
Silicon Valley’s adoration of Burning Man goes back a long way, and tech workers have always been fans of the festival. But it hasn’t always been the provenance of billionaires — in the early days, it was a free festival with a cluster of pitched tents, weird art, and explosives; but as the years went on, more exclusive, turnkey camps appeared and increased in step with the ticket price — which went from $35 in 1994 to $390 in 2015 (about sixteen times the rate of inflation).
Black Rock City has had its own FAA-licensed airport since 2000, and it’s been getting much busier. These days you can even get from San Carlos in Silicon Valley to the festival for $1500. In 2012, Mark Zuckerberg flew into Burning Man on a private helicopter, staying for just one day, to eat and serve artisanal grilled cheese sandwiches. From the New York Times:
“We used to have R.V.s and precooked meals,” said a man who attends Burning Man with a group of Silicon Valley entrepreneurs. (He asked not to be named so as not to jeopardize those relationships.) “Now, we have the craziest chefs in the world and people who build yurts for us that have beds and air-conditioning.” He added with a sense of amazement, “Yes, air-conditioning in the middle of the desert!”
The growing presence of the elite in Burning Man is not just noticed by outsiders — long-time attendees grumble that Burning Man has become “gentrified.” Commenting on the New York Times piece, burners express dismay at attendees who do no work. “Paying people to come and take care of you and build for you . . . and clean up after you . . . those people missed the point.”
Many Burners seethed after reading one woman’s first-person account of how she was exploited while working at the $17,000-per-head camp of venture capitalist Jim Tananbaum. In her account, she documented the many ways in which Tananbaum violated the principles of the festival, maintaining “VIP status” by making events and art cars private and flipping out on one of his hired artists.
Tananbaum’s workers were paid a flat $180 a day with no overtime, but the anonymous whistleblower attests that she and others worked fifteen- to twenty-hour days during the festival.
The emergent class divides of Burning Man attendees is borne out by data: the Burning Man census (yes, they have a census, just like a real nation-state) showed that from 2010 to 2014, the number of attendees who make more than $300,000 a year doubled from 1.4% to 2.7%. This number is especially significant given the outsize presence 1 percenters command at Burning Man.
In a just, democratic society, everyone has equal voice. At Burning Man everyone is invited to participate, but the people who have the most money decide what kind of society Burning Man will be — they commission artists of their choice and build to their own whims. They also determine how generous they are feeling, and whether to withhold money.
It might seem silly to quibble over the lack of democracy in the “governance” of Black Rock City. After all, why should we care whether Jeff Bezos has commissioned a giant metal unicorn or a giant metal pirate ship, or whether Tananbaum wants to spend $2 million on an air-conditioned camp? But the principles of these tech scions — that societies are created through charity, and that the true “world-builders” are the rich and privileged — don’t just play out in the Burning Man fantasy world. They carry over into the real world, often with less-than-positive results.
Remember when Facebook CEO Mark Zuckerberg decided to help “fix” Newark’s public schools? In 2010, Zuckerberg — perhaps hoping to improve his image after his callous depiction in biopic The Social Network — donated $100 million to Newark’s education system to overhaul Newark schools.
The money was directed as a part of then–Newark Mayor Cory Booker’s plan to remake the city into the “charter school capital of the nation,” bypassing public oversight through partnership with private philanthropists.
Traditionally, public education has been interwoven with the democratic process: in a given school district, the community elects the school board every few years. School boards then make public decisions and deliberations. Zuckerberg’s donation, and the project it was attached to, directly undermined this democratic process by promoting an agenda to privatize public schools, destroy local unions, disempower teachers, and put the reins of public education into the hands of technocrats and profiteers.
This might seem like an unrelated tangent — after all, Burning Man is supposed to be a fun, liberating world all its own. But it isn’t. The top-down, do what you want, radically express yourself and fuck everyone else worldview is precisely why Burning Man is so appealing to the Silicon Valley technocratic scions.
To these young tech workers — mostly white, mostly men — who flock to the festival, Burning Man reinforces and fosters the idea that they can remake the world without anyone else’s input. It’s a rabid libertarian fantasy. It fluffs their egos and tells them that they have the power and right to make society for all of us, to determine how things should be.
This is the dark heart of Burning Man, the reason that high-powered capitalists — and especially capitalist libertarians — love Burning Man so much. It heralds their ideal world: one where vague notions of participation replace real democracy, and the only form of taxation is self-imposed charity. Recall Whole Foods CEO John Mackey’s op-ed, in the wake of the Obamacare announcement, in which he proposed a healthcare system reliant on “voluntary, tax-deductible donations.”
This is the dream of libertarians and the 1 percent, and it reifies itself at Burning Man — the lower caste of Burners who want to partake in the festival are dependent on the whims and fantasies of the wealthy to create Black Rock City.
Burning Man foreshadows a future social model that is particularly appealing to the wealthy: a libertarian oligarchy, where people of all classes and identities coexist, yet social welfare and the commons exist solely on a charitable basis.
Of course, the wealthy can afford more, both in lodging and in what they “bring” to the table: so at Burning Man, those with more money, who can bring more in terms of participation, labor and charity, are celebrated more.
It is a society that we find ourselves moving closer towards the other 358 (non–Burning Man) days of the year: with a decaying social welfare state, more and more public amenities exist only as the result of the hyper-wealthy donating them. But when the commons are donated by the wealthy, rather than guaranteed by membership in society, the democratic component of civic society is vastly diminished and placed in the hands of the elite few who gained their wealth by using their influence to cut taxes and gut the social welfare state in the first place.
It’s much like how in my former home of Pittsburgh, the library system is named for Andrew Carnegie, who donated a portion of the initial funds. But the donated money was not earned by Carnegie; it trickled up from his workers’ backs, many of them suffering from overwork and illness caused by his steel factories’ pollution. The real social cost of charitable giving is the forgotten labor that builds it and the destructive effects that flow from it.
At Burning Man the 1 percenters — who have earned their money in the same way that Carnegie did so long ago — show up with an army of service laborers, yet they take the credit for what they’ve “brought.”
Burning Man’s tagline and central principle is radical self-expression:
Radical self-expression arises from the unique gifts of the individual. No one other than the individual or a collaborating group can determine its content. It is offered as a gift to others. In this spirit, the giver should respect the rights and liberties of the recipient.
The root of Burning Man’s degeneration may lie in the concept itself. Indeed, the idea of radical self-expression is, at least under the constraints of capitalism, a right-wing, Randian ideal, and could easily be the core motto of any of the large social media companies in Silicon Valley, who profit from people investing unpaid labor into cultivating their digital representations.
It is in their interest that we are as self-interested as possible, since the more we obsess over our digital identity, the more personal information of ours they can mine and sell. Little wonder that the founders of these companies have found their home on the playa.
It doesn’t seem like Burning Man can ever be salvaged, or taken back from the rich power-brokers who’ve come to adore it and now populate its board of directors. It became a festival that rich libertarians love because it never had a radical critique at its core; and, without any semblance of democracy, it could easily be controlled by those with influence, power, and wealth.
Burning Man will be remembered more as the model for Google CEO Larry Page’s dream of a libertarian state, than as the revolutionary Situationist space that it could have been.
As such, it is a cautionary tale for radicals and utopianists. When “freedom” and “inclusion” are disconnected from democracy, they often lead to elitism and reinforcement of the status quo.
https://www.jacobinmag.com/2015/08/burning-man-one-percent-silicon-valley-tech/
WORDVIRUS 