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

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

Although I’ve oftentimes heard the right demonize unions as dangerous to the delicate fabric of a free market, and oftentimes advocate enacting legislation to curb their power, there is no question the decrease in union membership has had a direct effect on the concentration of wealth in the United States and the middle class share of aggregate income. Here is are the results that were found by Karla Waters and David Madland of the at the Center for American Progress (CAP):
Now, before I get to the credit illusion, which is likely the culprit, first we have to dispel a few arguments against the stagnation of real wages in the United States – three of them specifically I want to talk about.
Q: Well, maybe workers’ productivity has not increased and their real wages are a direct result of a stagnation in their output? This cannot be true, hourly outputs per workers have actually been steadily increasingThis is based on information from the Bureau of Labor Statistics and Bureau of Economic Analysis; there is indeed a growing gap between output and real wages:
Q: The average income per household has gone up, isn’t that inconsistent in the stagnation of real wages? 
No, it is not. The Second Wave of feminism, which started in the early 60s, brought many more women to the workforce. It’s not that the workers are bringing more real income home, it’s that more people are working in the household. In an article in the journal article by Rebecca A. Clay of the American Psychological Association:

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

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

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

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

However, we have to look at this data with the increase in workers’ output rather than by itself. Since the year 2000, there has been especially a disconnect between real compensation per hour and output.
But this disconnect in average hourly compensation and productivity started far before the 00s; it actually began in the late 70s and got progressively worse since the Reagan years. Below is a graph from the Economic Policy Institute;
And although this graph does not show the growing gap between productivity and average hourly compensation since ’07, it has gotten much worse since then. So yes, average hourly compensation has been increasing but not as nearly as the same rate as productivity has.
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Now, for the topic of this post which may actually be shorter than the background information; Why aren’t the workers mobilizing and demanding higher wages as they did in the first half of the 20th century? There are many reasons; one being the destruction of unionism during the Reagan years and another being the of spending money you don’t actually have; the illusion of credit. Ever since real wages have become stagnant and the sharp decline of unionization in the 80s, there has been a sharp increase in household debt in the United States, which actually dissuades workers from demanding higher wages in some respects. It is this exploitative dichotomy that has kept corporate profits high and wages low; all in the guise of “buy now, pay later!” and ‘economic growth.
Below is a graph of household debt versus persona savings taken from ‘The Basis Point,’ a blog by mortgage banker Julian Hebron:
Why is the middle class shrinking and being anesthetized by credit? It is this type of behavior that drives society outside of its means and gives it working class families the false perception that their wages are increases; maybe nominally they are, which is deceptive in itself, but the main hurdle we must overcome is realizing the distraction of mass consumption by credit going forward. This requires questioning this entire system which has, for the most part, become based on credit and money yet to be paid. I highly fear the collapse of this ‘credit culture’ and the shaky foundation it is built on; And perhaps worst of all, we are unjustly condemning future posterity to debt bondage. What happened during the crisis of 2008 we may find to become a staple in the modern 21st century economic model; and since debt wasn’t properly liquidated, worse may be yet to come. The functionality of such an illusionary market method I am highly skeptical of, and its outcome will most definitely hurt the current mainstream liberal capitalist model.

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

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

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

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

 

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

 

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

 

But it seems that the leftist streak in Latin America may be changing this, hopefully soon. Some Latin American countries have already enacted legislation to redistribute unused private land to the poor, such as Hugo Chavez’s Plan Zamora in Venezuela. As of now, much of Latin American land remains in the hands of foreign investors. In Uruguay, the 2000 census showed that 17 percent of its arable land was foreign-owned, but it is predicted to be 20 to 30 percent today.  In Brazil, the Brazilian Institute for Colonization and Agrarian Reform estimates that 4.5 million hectares are owned by foreigners – but this figure is low and it may be twice as large, according to government officials. Argentinian authorities place its national estimates at 17 million hectares, about 10 percent of Argentinian territory, and about half of all arable land.
Moreover, sometimes when the land is returned back to “local hands” they’re heavily concentrated. The Landless Worker’s Movement in Brazil estimates, according to 1996 census records, that just 3% of the populations owns two-thirds of all arable land in Brazil. This only disempowers the majority and furthers economic inequality. According to World Development Indicators [2000] 10% of the population owns 47.6% of the wealth in Brazil. A study done by the Instituto de Pesquisa Econômica Aplicada (Institute of Applied Economic Research or IPEA) paints a even grimer picture “…in São Paulo the wealthiest 10% had 73.4% of while in Rio they retained 62.9% and in Salvador 67%.” A product of unequal land distribution caused by free trade and neo-colonialism, it seems.
The moral of the story; modern free trade is not fair trade. Business clusters that congregate around areas of high GDP are inherently exploitative of poorer regions, taking their land disproportionately. The last things these emerging nations want is foreign capital owning their assets and preventing them from prospering. This forced underdevelopment is imposed through laissez faire legislation, and kept in place by multiple transnational organizations that preach the same ideology. It is dangerous to the self-determination of peoples and their long-term prosperity. It is exploitative by nature, but it seems that some free market fundamentalists just cannot abandon their distorted dream. And then their obscurities are imposed on the rest of us, with disastrous global economic consequences.

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

Today, while I was fidgeting around with the American flag, I kindly asked my youngest 6 year old brother to say the Pledge of Allegiance, not expecting much. He said it word for word and, despite irregular pauses between phrases, managed to recite it fully and was overly-content when he finished.

I then asked him what it meant, and I was sincerely surprised at his answer even though I should have known better; he didn’t have the slightest idea. He was just telling it as he was taught in school, without any any comprehension of what he was proudly repeating every morning in school.

Frankly, this is seemingly a product of – to borrow a word from the lexicon of Michael Parenti – Superpatriotism. He describes it in these words;

 

Superpatriots are those people who place national pride and American supremacy above every other public consideration, those who follow leaders uncritically, especially in their war policies abroad.

Parenti goes on to describe it ideologically in more detail;

The superpatriot’s America is a simplified ideological abstraction, an emotive symbol represented by other abstract symbols like the flag. It is the object of a faithlike devotion, unencumbered by honest history. For the superpatriot, those who do not share in this uncritical Americanism ought to go live in some other country.

Is the American school system raising a passive society of ‘Superpatriots?’ Although too young to understand ideological connotations and public policy or to form their own opinions, one of first lessons in elementary education is instilling vibrant nationalism, indulging them in American Exceptionalism,’ and learning the Pledge of Allegiance. This, to me, is nationalistic madness because it is this type of ideology that drives self-destructive policies and cultivates, either intentionally or not, a breed of obedience that is dangerous to civic duties and functions.

This you are either with or against us’ nationalist fervor is a true danger to a societal vigilance; if anything nationalism should be reasoned, discussed, and accepted voluntarily (if even that) at a certain coming of age, not imposed on the feeblest of minds.

Moreover, why are we replacing skepticism with blind love of the state? As Howard Zinn said: “Dissent is the greatest form of patriotism!” 

In modern history courses, it is implied the age of colonialism ended after the decolonization of Africa in the years after WW2. After the mass exploitation of indigenous persons, the destruction of their cultures, and the genocide of their peoples – the Western powers are sorry for what they’ve done, and they’ve shown their gratitude by leaving them to their own. The “White Man’s Burden” is over; we’ve changed.

But what do we make of the humanitarian wars and the imposed economic globalization through international institutions? Is this something to embrace, or is it rather neocolonialism “with a human face?

If there is one thing we can learn from the tragedy of 19th and 20th century colonialism is that the interests are seldom explicitly stated. It is illustrated as the noblest of causes; it was the duty of ‘civilized’ to help those less fortunate and rid them of their immoral cultures. It is this relationship between the colony and the colonizers that is seemingly most dangerous, and established cultural hegemony [a term borrowed from Anton Gramsci’s writings] on those under occupation, making them disillusioned of what the future held. In of itself, this creates an atmosphere of implied prejudice and dependence that severely dismantles the cultural balance and solidarity among the peoples of that area. On a tangible level it strips them of their natural resources, impoverishing them, and leaving them to wallow in their suffering.

On the topic of the noble portrayal of colonialism – each Empire had their own distinct form of doublespeak used for garnering support. For the French and Portuguese it was the “civilizing mission,” all in effort to tame the ‘backward people’ in order to forcibly assimilate them into the social mores of the respective empire. For the Americans, and the British also, it was predominately the “White Man’s Burden” based on a poem by Rudyard Kipling which portrayed the imperialism as a noble enterprise and seemingly divinely sanctioned. For other empires, their reasons were almost explicitly nationalistic with little ‘noble’ justification. The German and Italian Empires both wanted their “place in the sun,” especially Germany after Kaiser Wilhelm II’s rise to power and his doctrine of Weltpolitk. The Japanese empire was the only non-western imperialistic power and they based their doctrine on anti-western ideals and nationalism; the foreign policy of the Shōwa period was dominated by the concept of the “Greater East Asia Co-Prosperity Sphere” which attempted to create a domineering Japanese presence in Eastern Asia. It’s underlying motive was similar to that of the American ideology of “Manifest Destiny” and many Japanese felt it was self-evident they would expand after the many wars Japan engaged in, particularly with China and Russia. 

Not surprisingly so, much of the language used during the apex of what I call ‘classical modern colonialism’ is still prevalent today, albeit in a different more obscure context. The public reasons for militarization and dominance have changed and the functions of a physical empire have exhausted their use; however, the motivations for a commercial one are still very present in policy – and the reasoning may very well be very much the same; It is the public admission that we’re “civilizing” them, but not with culture this time [as least not directly], but rather with “democracy” and “liberal capitalism.” This was the justification for American-backed coups d’état of the 20th century, to eliminate any threat to American hegemony on the global stage, which was then communism. It was driven by fear and perhaps even more fundamentally ‘American Exceptionalism’ of which is staple of any imperialistic power. The reality of the Iraq War, the United States’ current occupation of Afghanistan, and the drone strikes all over the Middle East only enforces that this concept is still very fresh in the minds of American policymakers. It seems Americans have already forgot the tragedy of Vietnam, which they swore they would never allow to happen again. Noam Chomsky described the danger of this anomaly as such:

“Historical amnesia is a dangerous phenomenon, not only because it undermines moral & intellectual integrity, but also because it lays the groundwork for crimes that lie ahead..”

And in this respect, I cannot agree more. Historical amnesia and an ignorant public is always benefit to the policymakers – it is institutionalized ignorance and a product of exactly how the system was created to function in an effort to engineer a passive social order, and the assumed ‘benevolence’ of today’s major powers is only the tip of the iceberg sadly enough.

Aside from the United States, Western Europe is engaging in very similar neo-imperial activity to maintain at least some form of economic, political, or military control on the former colonies. France’s policy of Françafrique, which was once hailed to be a mutually beneficial relationship, is inherently exploitative. France’s supporting, and subtle funding, of resource-rich dictatorships such as that of the Democratic Republic of Congo [dictatorship until 1997] and Gabon [whose dictator died in 2009, but his son is now in power] are dissuading and rendering it near impossible for the native people there to establish their own system. This populist disconnect from policy and reality is a feature created by the former colonizers and was mostly promulgated during the Cold War, with the establishment of anti-Communist dictatorships, but is still very much a systemic staple of Western foreign policy today; all done in the name of safety, democracy, and ‘moral doctrines.

Although current French President Sarkozy has attempted to distance himself from Françafrique, it’s implications are still felt and still being pursued. France has been in more military operations in the past few years than it has been in the last 50; its intervention in its former colony Ivory Coast, its intervention in the Libyan Civil War (which it conducted before the emergency meeting of Western powers in Paris), its co-opting [with the U.S primarily] of the 2004 Haitian coup d’état of former president Jean-Bertrand Aristide, its troop deployment into the former French colony of Chad, and its military involvement in the Afghanistan War. All of these, claimed to be purely humanitarian wars, have much of the criteria of a neo-colonial mentality – and aims at establishing French (or Western) dominance in these regions of the world.

And perhaps equally commercially imperialistic is the World Bank and the WTO, where the World Bank gives loans to autocratic regimes in the Third World, only to see that money go to waste and then asking the WTO to demand repayments; which always comes in the form of severe cuts for programs necessary for those not in power. It is this dynamic that is exploitative and ultimately prevents these nations from ever reaching real global status, among other things.

Seemingly so, ignorance always benefits the state – and that certainly holds true in this case. The disillusionment of the public on foreign policy is rather frightening, and the imperial trends will continue to be cyclic and unbroken until it is realized. I take an anti-imperialist stance from an ethical, philosophical, and morally-pragmatic perspective; because the self-determination of peoples in realizing their own destinies cannot be undermined, no matter how elusively humble the cause or how great the safety that is promised thereafter.

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