Wednesday, February 3, 2010

An Epidemic of Capitalism

by Michael K. Smith

As capitalism's "happy talk" about recovery saturates the public airwaves, keep in mind that food banks throughout the country are seeing a sharp spike in demand for their services.

According to the Regional Food Bank of Los Angeles a university or technical degree is no protection against hunger. Nearly one million residents of Los Angeles county, including the relatively well-educated, now must resort to food charity to stay alive. (One in four people seeking food in food banks have a university or technical degree). Nearly half - 48% - of people who go to food banks have to choose between buying food or paying for basic services like water and electricity. Forty-six percent have to choose between eating and paying the rent.

Even those who have food often eat poorly. Dr. Jonathan Fielding, Director of the Department of Public Health for Los Angeles county, explains that poor people often choose low quality food - like soft drinks or fast food - for economic reasons, that is, because balanced, nutritional foods cost more and are often unavailable in poor neighborhoods. Also, poor people frequently lack adequate kitchens, which makes pre-packaged and fast foods the only realistic option, though these foods cause long-term health problems like obesity and heart attacks.

Such dismal social welfare outcomes are not merely incidental results of the latest market crash, though financial deregulation has certainly exacerbated the problem of hunger in the U.S., but rather, are characteristic features of capitalism, where the profit hunger of banks and corporations is always fed more than empty bellies. Ownership has its priorities, and they are not pretty.

In the 1930s capitalism produced a situation in which farmers were pauperized by the very abundance of their crops. It proved cheaper for them to destroy food amidst widespread hunger than it was to bring their crops to market, where prices had fallen far below production costs. While hungry masses starved, desperate farmers plowed "surplus" food into the ground hoping to reverse the decline in prices.

The problem, of course, is that the poor lack money with which to make the market respond to their unmet needs, and the wealthy cannot eat for the entire country. Even the greediest diner won't eat 100 meals a day.

Today, financial deregulation has once again rewarded the rich for plundering the poor and middle class, leaving increased millions in misery and the country on the brink of financial ruin. The inventors of nearly worthless paper assets refuse to allow the "free market" to determine their (now collapsed) value, forcing the public to underwrite inflated values, at the cost of our homes, jobs, and pensions. In short, the real economy has been displaced by the paper economy, forcing the general public into the worst economic misery since the Great Depression.

But this is a re-run of an old story.

By the beginning of Ronald Reagan's second term, Reaganomics had created a large surge in homelessness and hunger. In Chicago, Dr. Howard B. Levy, Chairman of Pediatrics at Mount Sinai Hospital, publicly declared that his caseload of advanced malnutrition diseases like kwashiorkor and marasmas was increasing. "Malnutrition has clearly gone up in the last few years. We have more low-birth-weight babies. We are seeing so much TB (tuberculosis) that my house staff is no longer excited by it." With the federal government abandoning its commitment to the poor, hospitals and clinics were besieged by scavengers sifting through medical garbage and newly admitted patients requesting food in advance of treatment.

In the breadbasket of the world, the cities were starving. Mother Theresa's Missionaries of Charity arrived from Calcutta to help feed them.

President Reagan never ceased explaining poverty away as the product of personal choice. When he withdrew the government from the public housing market, hundreds of thousands of Americans expressed a sudden "preference" for living in the great outdoors. Reagan appeared on Good Morning America refuting charges of callousness: "One problem that we've had, even in the best of times," said the president, "is the people who are sleeping on the grates, the homeless who are homeless, you might say, by choice."

A study put out by the Economic Policy Institute on Labor Day 1992 painted a bleak picture of the results of 12 years of Reaganomics. "Most Americans are working longer hours for lower wages and considerably less security," the report said, and "the vast majority" are "in many ways worse off" than in the late 1970s. Post-1987 real wages had declined even for the college educated. "Poverty rates were high by historic standards," and "those in poverty in 1989 were significantly poorer than the poor in 1979."

A congressional report released several days later estimated that hunger had grown by 50% since the mid 1980s to include some 30 million people. Other studies showed that one in eight children suffered hunger, a problem that had been eliminated by government programs from the 1960s, but reappeared in 1982. Two researchers reported that nationwide "the number of hungry American children grew by 26 percent" as aid to the poor declined during the 1980s boom. At Boston City Hospital researchers found that the number of malnourished, underweight babies increased sharply following the coldest winter months, when families had to choose between paying for heat and paying for food. At the hospital's clinic for malnourished children, the waiting time to receive care reached two months, forcing hospital staff to resort to triage. Some suffered Third World levels of malnutrition.

But hunger hardly tells the whole story.

In 1973, Harvey Brenner published data on 750,000 New York state mental patients going back 127 years. He demonstrated that the only meaningful variable influencing mental hospital admissions was the rate of employment. When unemployment went up, vacancies at mental hospitals went down. Compared to unemployment, factors like biochemistry, genetics, and childhood trauma were simply irrelevant. Only joblessness allowed one to forecast mental breakdown with complete consistency. The same year Richard Light in the Harvard Educational Review published a report on child abuse indicating that the "variable that shows up most frequently as somehow related to child abuse is father's unemployment."

Job loss practically programmed middle-aged men for strokes and heart attacks, and the suicide rate for working men of all ages peaked with each peak in unemployment.

The unemployment rate also has an obvious connection to crime. In 1994, John Irwin and James Austin published a book documenting the fact that the typical inmate in the vast Gulag that was (and is) the U.S. prison system was a young, nonwhite male who initially became involved in petty crime because no avenues to a legal life of conventional satisfactions existed. He had typically not finished high school, had no job skills, had never enjoyed steady employment, and was not working at the time of his arrest. The top five predictors of his crime referred to capitalist economic conditions: business failure rate, number of unemployment claims, number of workers on strike, number of personal bankruptcies, and the incidence of mortgage foreclosure.

When will the Surgeon General appear on T.V. denouncing an inter-generational epidemic of capitalism?


"In L.A. Hunger Reaches Everyone," La Opinion, February 3, 2010

John Irwin and James Austin, It's About Time: America's Imprisonment Binge, (Wadsworth, 1994)

Hugh Drummond, Doctor Drummond's Spirited Guide To Health Care in a Dying Empire, (Grove, 1980)

Noam Chomsky, Year 501 - The Conquest Continues, (South End, 1993)

Jonathan Kozol, Rachel and Her Children - Homeless Families in America, (Fawcett-Colombine, 1988)

Paul Slansky, The Clothes Have No Emperor - A Chronicle of the American 80s, (Simon and Schuster, 1989)

-----Michael K. Smith is the author of "Portraits of Empire" and "The Madness of King George," (illustrations by Matt Wuerker) from Common Courage Press. He can be reached at


Anonymous said...

I found this article interesting and informative if not a little scary. I also find it interesting that the later blog about David Irving and the Holocaust provoked debate yet, the fact that in the richest country in the world, today, people go hungry and people die because of the economic system goes uncommented on.


Mickey said...

So why were/are capitalist countries so much richer than socialist ones? Why did the last 2 centuries witness incredible rises in living standards for the large majority of the populations of these capitalist countries?

Michael Smith said...

There were/are no socialist countries, at least if socialism is taken to mean countries in the hands of the working class, which is the only definition of socialism that makes any sense.

But what is the relevance of the question? My article points out the appalling inability of capitalism to distribute wealth in any kind of decent manner. Are you saying that if "socialism" can be demonstrated to be even worse, then starvation amidst abundance is therefore acceptable?

Mickey said...

It looks as if it's a case of heads you win, tails I lose. You resemble the Western communists who absolved themselves from the failures and crimes of Stalinism by claiming that Soviet communism had been only an regrettable example of state capitalism.

But to continue your game of defining terms - how can we identify these working classes? How are they different from the middle classes, for instance? Is there to be any managerial or ruling class in your putative worker's paradise?

Michael Smith said...

Mine is not an arbitrary definition. All through the 19th century the goal of socialist movements was to put the workers into power. Capitalism has been unrelentingly hostile to this objective, even as it declares itself the victor over a socialist system it has refused to allow to exist. That truly IS a game of heads they win, tails we lose.

"Middle class" people have to rent themselves to the private owners of the capitalist economy just like everyone else.

I haven't spoken of a worker's "paradise." I've spoken of the workers holding power, quite another matter. In principle there should be no "ruling class." If democracy is a value, management should be accountable to workers, not to private owners.

But this has nothing to do with the article I wrote. Living standards were rising under the slaveocracy of the American South, too, but that hardly justified such arrangements and the system was thankfully destroyed.

Why is it that capitalism in the U.S. puts the poor into prisons instead of decent jobs? Why are so many people without enough food to eat? Why is labor a commodity and workers almost completely without rights and security? Why is capitalism's pro-unemployment policy allowed to ruin millions of lives?

From starvation alone, capitalism has killed far more people than Communism. According to Nobel prize winning economist Amartya Sen, India killed more people with its capitalist social policy between 1949 and 1979 than all the Communist states did put together going back to 1917.

Michael Smith said...

And furthermore, the "lower" living standards of the USSR, for example, were based on having been the "service area" for capitalist exploitation prior to the 1917 revolution. So the USSR started from a much lower point than the Western European countries whose elite groups exploited Russia and Eastern Europe before the Bolsheviks removed it as an area for exploitation. Then the West's counterrevolution invaded and occupied the USSR using every conceivable barbarity to strangle the revolution in its crib. This went on for the entire life of the USSR, and in spite of that the USSR lifted its population from backbreaking labor on the land to a modern standard of living in a single generation, which no Western country had ever managed. And Communist China's record of development was even faster. So the assumption that capitalism has the better record on standard of living is just a point of dogma. If the elimination of poverty and rapid development are values, the West is backward compared even to "totalitarian" socialist states.And none of the West's capitalist states have been invaded, plundered, blockaded by socialist enemies. . . . . . . . . . . The late William Blum summed it up best: "The boys of Capital, they also chortle in their martinis about the death of socialism. The word has been banned from polite conversation. And they hope no one will notice that every socialist experiment of any significance in the twentieth century - without exception - was either overthrown, invaded, corrupted, perverted, subverted, destabilized or otherwise had life made impossible for it, by the United States and its allies. Not one socialist government or movement - from the Russian Revolution to the Sandinistas in Nicaragua, from Communist China to the FMLN in El Salvador - not one was permitted to rise or fall solely on its own merits; not one was left secure enough to drop its guard against the all-powerful enemy abroad and freely and fully relax control at home. It's as if the Wright brothers' first experiments with flying machines all failed because the automobile interests sabotaged each test flight. And then the good and god-fearing folk of the world looked upon these catastrophes, nodded their heads wisely, and intoned solemnly: Humankind shall never fly."

-----William Blum, "Killing Hope: U.S. Military and CIA Interventions Since World War II."