January 20, 2018 - No. 2


Discussion on Economic Affairs


Workers Need an Economy that Guarantees the
Well-Being and Rights of All

Davos Forum on the Economy
Uneven Economic Development within the
Imperialist System of States

Reporting on the Deep Vein of Poverty Running
Through the U.S.

The Bitcoin Speculative Surge

Workers Need an Economy that Guarantees the Well-Being and Rights of All

Davos Forum on the Economy

The 48th Annual Meeting of the World Economic Forum, known as the Davos Forum, takes place from January 23-26. The Forum website says those attending range from "CEOs and industry leaders to members of our communities," besides the usual economists considered experts. This year "a record number of heads of state, government and international organizations alongside leaders from business, civil society, academia, the arts and media" are participating. Donald Trump and Justin Trudeau have confirmed they will be present as have French President Emmanuel Macron, British Prime Minister Theresa May and India's Narendra Modi. Modi will deliver the opening address and Trump will deliver a keynote address before the close of the meeting.[1]

The meeting is a concentrated expression of the rich and their representatives gathering to describe the plight of the poor and come up with schemes to attempt to escape the economic laws of development, which they vainly hope to defy. Some will wring their hands and talk passionately about the need to save the middle class and, as Justin Trudeau now puts it, "those aspiring to join the middle class" from becoming poorer as a result of neo-liberal nation-wrecking, recurring economic crises, war and the destruction of the productive powers worldwide.

In this vein, the Davos Forum website announces this year's meeting "aims to rededicate leaders from all walks of life to developing a shared narrative to improve the state of the world." A press statement says, "The programme, initiatives and projects of the meeting are focused on the theme Creating a Shared Future in a Fractured World." The promo for the meeting says it "will focus on finding ways to reaffirm international cooperation on crucial shared interests, such as international security, the environment and the global economy. The meeting comes at a time when geostrategic competition between states is generally seen to be on the rise."

Using the words of Professor Klaus Schwab, Founder and Executive Chairman, World Economic Forum, the press statement further describes certain problems plaguing the rule of the rich oligarchs:

"Alongside international cooperation, an additional priority of the meeting will be to overcome divisions within countries. These have often been caused by breakdowns in the social contract as a result of failure to protect societies from the transformational impacts of a succession of shocks, from globalization to the proliferation of social media and the birth of the Fourth Industrial Revolution. Collectively, these shocks have caused a loss of trust in institutions and damaged the relationship between business and society.

"Our world has become fractured by increasing competition between nations and deep divides within societies. Yet the sheer scale of the challenges our world faces makes concerted, collaborative and integrated action more essential than ever. Our Annual Meeting aims to overcome these fault lines by reasserting shared interests among nations and securing multi-stakeholder commitment to renewing social contracts through inclusive growth."

The Missing Discussion at Davos

One thing the meeting will not discuss is the aim of the imperialists to guarantee the highest rate of profit possible for themselves and their empires and how to satisfy this aim when the general trend mostly coming from increased productivity is toward a lower rate of profit. The unspoken solution to their problems is to defy economic laws including through various pay-the-rich schemes robbing the state treasuries to prop up certain private interests, something which has become common practice, forcing weaker countries to pay tribute to the centres of imperialism, selective destruction of the productive forces, savage predatory wars of aggression, blockades and sanctions resulting in the depopulating of entire countries and regions forcing many economies back to the stone age as one U.S. militarist famously put it and by other means.

The Davos meeting will block any rational discussion on the economy for the oligarchs have abandoned nation-building altogether and replaced it with wrecking to feed the appetite of the private interests which have formed cartels that vie for control. They will discuss facilitating arrangements that attempt to defy gravity so as to provide the highest rate of profit possible for the dominant imperialists. They will not analyze and discuss exactly what are the contradictions within a completely socialized modern economy of industrial mass production still trapped and controlled by narrow competing private interests, which constantly burst forth in crises. They will do everything their social wealth and state power can muster to stop the working people from having any discussion amongst themselves of how to move the economy forward to solve its internal contradictions and give it a modern aim to guarantee the well-being and rights of all.

Creating a Shared Future

The announced Davos theme for their discussions is "Creating a Shared Future in a Fractured World." The theme admits to a “fractured world” but only working people are interested in analyzing and discussing the cause of the fractures, resolving the contradictions and moving forward. The dream of the rich is one of "creating a shared future" within the "fractured world." It is irrational. 

What "shared future" can there possibly be within the "fractured world" of empire-building and imperialist practices within the overall aim of securing the highest possible profit for competing private interests? Aside from fighting amongst themselves, the most powerful imperialists openly attack underdeveloped and super-exploited countries and workers on a global scale. They even attack their own communities, regions and sectors within the imperialist heartlands themselves. They are called “rust belts” or "unable to compete" with new technologies or "cheaper workers" found elsewhere.

Developing countries striving to be and even communities and entire regions within the imperialist economies are deprived of the ability to build stable self-reliant centres within an all-sided economy and culture. This forces inhabitants into poverty and in some cases desperation and starvation driving them to migrate to live in the large cities or abroad. Only non-permanent resource centres are allowed in mostly small communities and regions where the value workers produce from resource extraction is ripped out and taken to the imperialist centres in New York, London, Tokyo, Berlin, Paris and Toronto.

The social wealth workers produce is no longer tied to a nation but concentrated in the hands of imperialist cartels. They strut around the world as all-powerful oligarchs dictating actions that serve their narrow private interests, depriving peoples everywhere of their own nation-building projects and right to be. They love to parade their brilliance in defying the scientific laws of economic development through meetings such as Davos and in select universities, including Harvard, the school of economic theory originating in Chicago, and the London School of Economics.

Not much sharing goes on  between oligopolies. They  are private interests that have taken over governments in various places. They maraud around the world, using the state power they control, which includes private militaries that organize coups d’état and regime change where they are not in control, while constantly fighting with competing oligarchs both at home and abroad. This most certainly leads to both collusion and contention for power and social wealth but not much "sharing."

To speak of "sharing" without sorting out and resolving the basic contradictions in the modern economy and how people relate to one another within it is irrational. Not only irrational, it seeks to cover up that what the people lack is political power to settle scores with the aim of the imperialist system of states and the control of the oligarchs. The old aim is consumed with seizing the greatest amount of social wealth possible using any means necessary. This includes employing the most powerful imperialist militaries to rob the peoples of the world through war, plunder and unequal trade. This means using the state treasuries and pooled social wealth of the working class to pay the empires of the rich. This means spreading parasitism, decay and Ponzi-type schemes to claim money without producing and realizing actual value that workers produce. The stock and commodities exchanges and markets are centres of criminality where the rich attempt to fleece their way to greater fortunes. The recent Bitcoin craze is but one example of the next possible financial disaster in the making.

The working people should not fall into a state of mind or paralysis of bemoaning the current state of affairs as the fate of humankind or become diverted into declaring the bogus theories put forward by the rich and their representatives are not good enough and should be improved. Those theories are simply devices to fool the gullible into believing the oligarchs who rule can somehow escape the scientific laws that govern the economy and development of human society. The irrational theories reveal the rulers as unfit to rule.

The world is in constant change, development and motion and at this stage the working people are the essential human factor in building the new. The central task of the working people is to activate themselves and their social consciousness and develop the solutions and necessary institutions to bring into being a self-reliant all-sided economy with a modern aim that guarantees the well-being and rights of all. They must establish their own reference points and abandon once and for all the reference points the imperialists give themselves and seek to impose on the people.


1. For information on the Davos Forum participants and agenda, click here.

(Source: Davos website)

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Uneven Economic Development within the
Imperialist System of States

The economies of most of the world's peoples are becoming more skewered towards serving the powerful centres of imperialism -- the U.S, Europe and Japan. The unevenness of international trading relations appears in an October 12 report from the United Nations Conference on Trade and Development (UNCTAD).

The report details a growing dominance of a few raw material and agricultural exports within the economies of 91 countries concentrated mostly in Africa and South America. This number represents an increase of nine countries dependent on raw material and agricultural exports in relation to their total exports between 2010 and 2015 out of the 135 countries that UNCTAD classifies as developing.

UNCTAD points out that dependence on raw material and agricultural exports as a large percentage of exports usually goes hand in hand with widespread poverty and other social ills within a country. UNCTAD uses the term "commodity" to denote unrefined or partially refined raw material and agricultural commodities. Other commodities, such as manufactured goods are referred to as merchandise.

In presenting the report "The State of Commodity Dependence" UNCTAD Secretary-General Mukhisa Kituyi said, "In the context of dramatic volatility in commodity prices, developing countries will struggle to achieve the Sustainable Development Goals unless they break the chains of commodity dependence. Many developing countries have been commodity-dependent for the past three decades, and it is worrying to see that the numbers are going up."

How do developing countries "break the chains of commodity dependence" without uniting in struggle to break the chains of the U.S-led imperialist system of states? The UN's detachment from exposing the root cause of these problems and indifference towards proposing solutions reveal its subservience to imperialism. In simply describing a global situation of one-sided trade that favours the narrow interests of competing imperialist forces without explaining why it exists and suggesting a way forward towards trade for mutual benefit and development is unhelpful to say the least.

For some reason unknown to UNCTAD, the Democratic People's Republic of Korea (DPRK) is a new entrant on the list. The report seems oblivious to the fact that U.S. imperialism has subjected the DPRK to a complete economic blockade and constant military threats and provocations since the armistice ending the U.S. military's open aggression in 1953 and its permanent occupation of south Korea and brutal suppression of any movement towards reunification of ancient Korea. With the collapse of the Soviet Union in 1989, the economic blockade of the DPRK has intensified, including a prohibition on using the international financial system. This leaves the country with no viable trading options except China, which is also being pressured to halt any trading relations with the DPRK. Just last week, the U.S. President imposed sanctions on several Chinese companies and individuals for their economic relations with the DPRK.

The DPRK is not alone in suffering attacks from U.S. imperialism. Cuba, Iran, Afghanistan, Iraq, Libya, Yemen, Syria, Venezuela, and Zimbabwe are just a few on the list of 91 countries that have been subjected to U.S.-led economic blockades, aggression, overt and non-covert operations to bring about regime change and other disruptive interference either directly or through paid mercenaries.

The UNCTAD report finds that the rise in dependence on raw material and agricultural exports within economies was most noticeable in Africa, where seven new economies entered the dependent category in 2014-2015, bringing the total to 46 on the continent out of a total of 57. Again, this situation is described without explanation and certainly without giving any indication as to how to change the direction, which appears to be worsening. The full list of countries is available in the report here.

Regarding the type of exports, the report says the dependence is predominantly on agricultural commodities. This was the case for 41 per cent of the 91 countries, while 30 per cent depended on fuel exports and 23 per cent on minerals, ores and metals.

UNCTAD defines a country as "commodity dependent" if the raw material and agricultural exports account for more than 60 per cent of its total exports in value terms. When this share exceeds 80 per cent, the country is considered "strongly commodity export dependent," which was the case for seventy per cent of the 91 "commodity-dependent developing economies" in 2014-2015.

The report contains 135 individual country profiles, each comprising 40 indicators mostly related to the dependence on exports and imports of raw material and agricultural commodities. The report includes a set of indicators that shows how dependence on raw material and agricultural external trade to the exclusion of all-sided development of trade and internal industrial and consumer manufacturing, public services and social programs "tends to negatively affect poverty alleviation and food security" and puts downward pressure on "human development indicators like life expectancy, education, and per capita income."

The report does not include any mention or encouragement of the organized struggles of political forces around the world led by their Communist Parties to defeat the global military, political, economic and cultural control and annexation of their countries within the U.S.-led imperialist system of states.

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Reporting on the Deep Vein of Poverty
Running Through the U.S.

The Guardian newspaper in December published a new feature in which Professor Philip Alston, the United Nations' special rapporteur on extreme poverty and human rights, leads Guardian reporter Ed Pilkington "through some of the most impoverished communities in the country: in Los Angeles, San Francisco, small towns in Alabama and West Virginia." The article and photo essay, The Guardian notes, expose "the dark side of the American Dream."

Pointing out that the United States is one of the world's wealthiest nations and nonetheless 41 million people are living in poverty, The Guardian says that Prof. Alston, wants to know why.

"Alston's epic journey has taken him from coast to coast, deprivation to deprivation," The Guardian's reporter Ed Pilkington writes. "Starting in LA and San Francisco, sweeping through the Deep South, traveling on to the colonial stain of Puerto Rico then back to the stricken coal country of West Virginia, he has explored the collateral damage of America's reliance on private enterprise to the exclusion of public help."

Pilkington notes that at the start of the fact-finding tour in Los Angeles, Republicans in Congress were voting for tax cuts that "will exacerbate wealth inequality that is already the most extreme in any industrialized nation." He also notes that of the 41 million people living in poverty in the U.S., "nine million have zero cash income -- they do not receive a cent in sustenance."

Alton's trip across the U.S. highlighted how race factors into extreme poverty, as Pilkington writes during their trip to Lowndes County in Alabama:

"The racial element of America's poverty crisis is seen nowhere more clearly than in the Deep South, where the open wounds of slavery continue to bleed. The UN special rapporteur chose as his next stop the "Black Belt," the term that originally referred to the rich dark soil that exists in a band across Alabama but over time came to describe its majority African American population.

"The link between soil type and demographics was not coincidental. Cotton was found to thrive in this fertile land, and that in turn spawned a trade in slaves to pick the crop. Their descendants still live in the Black Belt, still mired in poverty among the worst in the union.

"You can trace the history of America's shame, from slave times to the present day, in a set of simple graphs. The first shows the cotton-friendly soil of the Black Belt, then the slave population, followed by modern black residence and today's extreme poverty -- they all occupy the exact same half-moon across Alabama."

The two also travelled to Guayama, Puerto Rico, three months after Hurricane Maria devastated the island. But, as Pilkington notes, "Puerto Rico's plight long predates Maria."

"The island has twice the proportion of people in poverty (44 per cent) than the lowliest U.S. state, including Alabama (19 per cent). And that was before the hurricane, which some estimates suggest has pushed the poverty rate up to 60 per cent," he writes.

Ultimately, Pilkington concludes, Alton hopes to shed light on the extreme poverty spread throughout this wealthy nation, a problem unaddressed by Washington, D.C.

"Washington is very keen for me to point out the poverty and human rights failings in other countries. This time I'm in the U.S.," Alston says. "What I see is the failure of society. I see a society that let that happen, that is not doing what it should. And it's very sad."

Alston's report became public on December 15. In it, he lambasts the Trump administration for exacerbating the homelessness crisis and argues that American democracy is crumbling as a result of widespread poverty and homelessness. He writes:

"The proposed tax reform package stakes out America's bid to become the most unequal society in the world, and will greatly increase the already high levels of wealth and income inequality between the richest one per cent and the poorest 50 per cent of Americans. The dramatic cuts in welfare, foreshadowed by the President and Speaker Ryan, and already beginning to be implemented by the administration, will essentially shred crucial dimensions of a safety net that is already full of holes." [...]

"Successive administrations, including the present one, have determinedly rejected the idea that economic and social rights are full-fledged human rights, despite their clear recognition not only in key treaties that the U.S. has ratified (such as the Convention on the Elimination of All Forms of Racial Discrimination), and in the Universal Declaration of Human Rights which the U.S. has long insisted other countries must respect. But denial does not eliminate responsibility, nor does it negate obligations. International human rights law recognizes a right to education, a right to healthcare, a right to social protection for those in need, and a right to an adequate standard of living. In practice, the United States is alone among developed countries in insisting that while human rights are of fundamental importance, they do not include rights that guard against dying of hunger, dying from a lack of access to affordable healthcare, or growing up in a context of total deprivation." [...]

"I have been struck by the extent to which caricatured narratives about the purported innate differences between rich and poor have been sold to the electorate by some politicians and media, and have been allowed to define the debate. The rich are industrious, entrepreneurial, patriotic, and the drivers of economic success. The poor are wasters, losers, and scammers. As a result, money spent on welfare is money down the drain. To complete the picture we are also told that the poor who want to make it in America can easily do so: they really can achieve the American dream if only they work hard enough.

"The reality that I have seen, however, is very different. It is a fact that many of the wealthiest citizens do not pay taxes at the rates that others do, hoard much of their wealth off-shore, and often make their profits purely from speculation rather than contributing to the overall wealth of the American community.

"There is no magic recipe for eliminating extreme poverty, and each level of government must make its own good faith decisions," Alston writes. "But at the end of the day, particularly in a rich country like the USA, the persistence of extreme poverty is a political choice made by those in power. With political will, it could readily be eliminated."

(The Guardian, December 16, 2017)

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The Bitcoin Speculative Surge

The parasitism and decay within the economy is so pronounced, pay-the-rich schemes and scams have become normal and officially acceptable. In this regard, Bitcoin has begun trading on the "legitimate" Chicago Board Options Exchange and the Chicago Mercantile Exchange, giving it credibility, or so the people are told.

The Bitcoin speculative surge reflects how degeneration has seeped into every pore of the imperialist economy. Those who buy bitcoin to circumvent the stranglehold of the banks or U.S. dollar, beware. The rich are quite happy and eager to seize money-value without work or having any workers produce, distribute or circulate actual commodities.

The work-time of the working class puts value in commodities. If the market price of a commodity goes greatly above the price of production representing the value workers put into a commodity, then value must come from other commodities through a reduction of their market price or otherwise cause disruption in the economy. This follows the basic economic law that what workers have not produced cannot be consumed.

Bitcoin is said to be operating as a medium of exchange. Virtually any commodity can act as a medium of exchange if enough people recognize it as such. That is not the issue with Bitcoin or any of the other numerous digital currencies competing to be used and traded.

The problem stems from the aim of the imperialist economy for the highest possible profit on all transactions and to pay the rich regardless of the social and economic consequences. The imperialist aim has led to the current extreme concentration of social wealth in the hands of a few. The economy has degenerated into parasitism, decay and recurring crises throughout the world rather than mobilizing the incredible productive powers of industrial mass production to guarantee the well-being and rights of all. The imperialist aim is consumed with empire-building and waging endless predatory wars to dominate all humanity.

Bitcoin and other digital currencies may act as means of exchange but for the rich the point is to use it to make money for nothing, to push up its speculative value so that those who buy it or created it in the beginning will become rich beyond their wildest dreams. It represents a world gone mad with becoming rich through speculation and war.

Bitcoin acts like a Ponzi pyramid scheme on digital steroids. As long as people continue to put money into a Ponzi scheme or continue to buy Bitcoins at the price demanded, the scam will persist. But Bitcoin's speculative value only exists if the buying continues. As long as people are willing to buy it and a certain hype around it remains then many people will believe in the phenomenon because the imperialist outlook is pervasive. When the buying stops for whatever reason, including state regulation forced by a certain section of the rich who want to rein in the competition for available realized value, and the faith begins to fade, people will cash out, demanding the current inflated speculative amount -- which no one will want to pay -- collapsing the bubble.

The money-value will evaporate similar to a run on a bank as people pull out their money in panic. The actual amount in the bank's vault is far less than the amount people are owed because ten or a hundred times the total of their accounts has gone out the door in loans that cannot be called back because the money has been spent to be returned only little by little over time.

For imperialist schemes to persist, they rely heavily on hype and acceptance of the outlook and aim of the economy for the highest possible profit and to pay the rich. Official hype comes in the form of state-sanctioned institutions such as the Chicago exchanges and media promotion.

The Bulgarian government announced recently that the Bitcoins it apparently bought a while back now hold enough speculative money-value to pay down one-fifth of its national debt when cashed out. It is a risky venture because the value a Bitcoin represents when cashed out, if people are willing to buy them, has to come from somewhere in the productive economy, a value workers have produced through work-time transforming the natural bounty of Mother Earth into the use-value of a good or service. The Bitcoin speculative value may move from hand to hand as they are bought and sold and new ones are "mined" but they cannot increase the initial money-value that was put into them. Any increase when cashed out and used to purchase commodities must come from value workers have produced, thus decreasing or robbing value from somewhere else in the economy. To repeat a well-known fact: What workers have not produced cannot be consumed.

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