Sunday, March 31, 2013

The Neo-Feudal path of ailing Capitalism

When we study the causes behind the French Revolution, we see that they were the following:

1. All effective power was concentrated in the upper classes (castes if you wish), while the bulk of the people had no effective influence in actual government. Almost exactly as today (in spite of all the pretenses of formal "democracy" the effective influence of the mega-rich is all-encompassing: governments, media, etc.)

2. There was a huge problem of public debt, caused by misspending with the wrong priorities: wars and privileges of the elites. Exactly as today.

3. The bulk of taxation fell over the poor, with the rich and hyper-rich getting away with almost no taxes. Exactly as today. 

4. Widespread private taxes hampered the economy to no avail. 

This last aspect appeared to me less important or even non-existent in the modern context, however it seems now obvious that I was blind to reality. While state and regional tolls tend to be abolished, a whole network of new private tolls actually exists and is growing by the moment everywhere. 

Liberal economical blog Naked Capitalism (which is generally a great read in spite of not being revolutionary but just reformist) discusses today this last issue as it is becoming more and more relevant in the USA:

Apparently Obama’s idea of a Holy Week sacrifice is to feed American citizens to rapacious bankers, this time through the device of “public/private partnerships” to support infrastructure spending. Some NC readers were correctly alarmed by a speech by Obama on Friday on using public/private partnerships to fund infrastructure spending. This is not a new idea; Obama first unveiled it in his Statue of the Union address. But it is a singularly bad idea, that is, if you are anyone other than a promoter of or investor in these deals.
As we’ve discussed at length earlier, these schemes are simply exercises in extraction. Investors in mature infrastructure deals expect 15% to 20% returns on their investment. And that also includes the payment of all the (considerable) fees and costs of putting these transactions together. The result is tantamount to selling the family china and then renting it back in order to eat. There is no way that adding unnecessary middlemen with high return expectations improves the results to the public. In fact, the evidence is overwhelmingly the reverse: investors jack up usage fees and skimp on maintenance. And their deals are full of sneaky features to guarantee their returns. For instance, Truthout noted:
Infrastructure privatization contracts are full of “gotcha” terms that require state or local governments to pay the private contractors. For example, now when Chicago does street repairs or closes streets for a festival, it must pay the private parking meter contractor for lost meter fares. Those payments put the contractors in a much better position than the government. It gets payments, even though Chicago did not get fares when it had to close streets…
Highway privatization contracts also often include terms that forbid building “competing” roads or mass transit. Some even require making an existing “competing” road worse. For example, the contract for SR-91 in Southern California prohibited the state from repairing an adjacent public road, creating conditions that put drivers’ safety at risk. A proposed private highway around the northwest part of Denver required that local governments reduce speeds and install speed humps and barriers and narrow lanes on “competing” roads to force drivers to use the privatized road…
Virginia decided to promote carpooling to cut down on pollution, slow highway deterioration and lessen highway and urban congestion. As a result, Virginia must reimburse the private contractor for lost revenues from carpoolers, even though not all of the people in a car would otherwise have driven individually….

(... more at Naked Capitalism).

All this is obviously just a scam and abuse on the citizenry on the purely ideological grounds that such public services must be owned by private actors.

And it's not just highways and parking meters, the reality is that with the Thatcherite obsession with privatization of public services takes their toll on us in just every aspect of life: tap water is private even if the investment is mostly public, we pay that way taxes to private middlemen, electricity is private even if again the investment is mostly public, in Spain at least much of education is private, yet paid by the state, the railroads and buses are private even if again most of the investment is public, parking tolls are private even if it is a public interest measure, highways are private even if they are public services, my local government is spending billions in the High Speed Train (AHT-TAV) even if it will be managed and profited by private actors again. Never mind the once public savings banks, which are being demolished and privatized by the moment, acting in all aspects are merely private ones. Or TV... whose few allowed channels are more and more concentrated in few greedy and power-mongering hands.

Wait and see for even more brutal abuses. This is the decadent madness of ailing Capitalism: a public power which is totally in the hands of the exploiters and rents them for mere peanuts all the stuff we need to live and work, what, in turn, produces a system of generalized abusive private taxes in every aspect of life. We get to pay brutal taxes just for food and they get negative rent payments while they evade all their money to tax heavens and are even allowed to close vital business or move them to other parts of the world without any penalty.

A revolution is much needed.

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