By Joe Leahy in Mumbai
Published: January 30 2009 00:10 | Last updated: January 30 2009 00:10
Early in the New Year, a small, moustachioed and otherwise unremarkable software industry executive shocked India and the world.
B. Ramalinga Raju, the chairman of Satyam Computer Services, India’s fourth largest information technology group by revenue, sent a letter to his board confessing to a crime so spectacular in its scale and brazenness that many could hardly believe it.
“Dear Board Members, It is with deep regret and tremendous burden that I am carrying on my conscience that I would like to bring the following facts to your notice …” Mr Raju began the letter, sent on January 7.
Apparently, Satyam’s balance sheet as of September was the numerical equivalent of a novel – an elaborate work of fiction in which everything from revenue and profits to most of its cash balance of Rs53.61bn ($1.1bn) was an invention. The fraud was carried out over a number of years, Mr Raju’s letter said, raising questions over how the company’s auditor, PWC, and stock market regulators failed to spot the scam.
Mr Raju may have unburdened his conscience with his confession. But in one step he undermined the confidence of India’s once unerringly self-assured business community, which had so far avoided the worst effects of the global slowdown.
“There has rarely been a case of a bull market not having left a few fraudulent residues, but the suo motu disclosure … by Ramalinga Raju, the chairman of Satyam, … must be categorised as the mother of all, at least in the Indian context,” said IIFL, the institutional research division of the Mumbai-based securities house, India Infoline.
“Symbolically, it is akin to the high profile frauds perpetrated by Enron, Worldcom or Parmalat, all of which had overstated profits and the value of assets on books.”
India’s beleaguered stock market has borne the brunt of the revelations. Since December 17, when the first signs emerged that all was not right at Satyam, the Bombay Stock Exchange’s benchmark Sensex Index, has fallen 13 per cent to 8.674.35 points as of January 23. On the day of the confession letter alone it fell 7.24 per cent.
Part of the reason the Satyam fraud was such a shock was that it occurred in in India’s multi-billion dollar information technology outsourcing business, regarded as one of the most progressive industries in the country’s corporate sector.
The episode began when Mr Raju on December 16 suddenly proposed that Satyam acquire the Maytas property and infrastructure companies belonging to his family in a deal worth $1.6bn.
The deal was approved by Satyam’s independent directors. But within hours Mr Raju was forced to abandon the plan after institutional investors launched an unprecedented rebellion against the transaction.
Unbeknown to these investors, Mr Raju was sitting on a time bomb. He had pledged his family’s 8 per cent stake in the company to lenders, which had started selling off the shares as Satyam’s stock fell in line with the broader market.
The Maytas deal was an attempt to cover up the fraud at Satyam. By January 7, the game was up. The lenders had sold almost all of the Raju family’s shares. The company’s share price had fallen to a fraction of its former value. Mr Raju confessed.
The question for analysts now is whether Satyam is an exception or whether, after a five-year stock market bull-run in India’s market that ended only last year, there are other long-running corporate frauds waiting to be discovered.
The scam has prompted calls for the government to tidy up loose corporate disclosure requirements. The most prominent need is to force controlling shareholders to reveal if they have pledged their shares in their companies to lenders.
In a market in which more than half of the key constituents of the Sensex are controlled by families, this is a sensitive issue. But the secretive pledging by controlling shareholders of shares to lenders is a key risk for unsuspecting minority investors. Once a stock that has been pledged hits a certain point, it will trigger a margin call, forcing the lender in question to begin selling those shares. This can collapse the stock price.
“All other disclosure requirements that apply to insider purchase and sell activities should be extended to pledging and loaning of shares,” said Credit Suisse in a report.
Two weeks after the confession letter was released, the Securities and Exchange Board of India, the stock market regulator, made it mandatory for controlling shareholders to reveal their share pledges.
The move was welcomed by the market but experts described it as “too little, too late”.
Professor Sandeep P. Parekh, visiting associate faculty at the Indian Institute of Management, Ahmedabad and former executive director of Sebi, said during his time at the regulator he spent three years developing new disclosure standards that have yet to be fully implemented.
Common complaints about India’s disclosure regime include the absence of a requirement on companies to file full balance sheets along with their quarterly results.
The other problem is enforcement. In the long queue of government investigative agencies waiting to interrogate Mr Raju, who at time of writing was in judicial custody in his home city in Hyderabad, Sebi seemed to be the last in line in spite of its role as the market regulator.
And few believe Mr Raju will see the inside of a prison again once he gets out on bail. Almost no serious white collar criminal in India has ever served time after sentencing because of the country’s laborious court system that can take years to reach a decision.
To be sure, India’s corporate governance system is still regarded as among the best in emerging markets. And investors are willing to vote with their legs. There has been a mass exodus from companies considered less transparent in recent weeks to those judged as following best practice. But the Satyam episode shows there is plenty of work that needs to be done by regulators and policymakers.
“Corporate crime in India can’t be addressed by more laws or indeed more governance,” said Krishnamurthy Vijayan, executive chairman of JP Morgan Asset Management in Mumbai, who says the country has “excellent” governance standards. “I suspect that rapid and forceful action against the perpetrators is the main answer.”
Showing posts with label novel. Show all posts
Showing posts with label novel. Show all posts
Friday 30 January 2009
Thursday 29 January 2009
Satyam - In a lighter vein
By all accounts, Satyam ex-chairman Ramalinga Raju is having a rollicking time in Chanchalguda jail. His popularity among the inmates, all of whom are in awe of a man who can make Rs 7,000 crore disappear, knows no bounds. "Some of us affectionately call him by his nickname Scamalinga," said a petty thief, "But most just call him Gurudev."
Reports have come in that Raju had 20 idlis for breakfast, five plates of rice and a bucket of rasam for lunch and 25 chapatis with two chickens for dinner. But the jail superintendent says these numbers are inflated. "You see, the habit is so deeply ingrained in Raju that he automatically inflates all figures," he added. Incidentally, his cellmate Srinivas Vadlamani, Satyam's ex-chief financial officer who has denied all knowledge of wrongdoing, said he didn't know whether he had any meals. "I am not aware whether I had breakfast, lunch or dinner," he said. "Am I in jail?" he asked.
Meanwhile, insiders say that Raju has decided to teach accountancy in order to impart his skills to a receptive audience. "I'm really excited at the prospect of being taught by such a master," said a murderer serving a life sentence. "My problem has been that I don't know where to hide the bodies," he explained, "I'm sure that a guy who can hide Rs 7,000 crore for so many years can easily hide a score of bodies."
A stream of visitors has also been arriving at the jail, all wanting to meet Srinivas Vadlamani. Inquiries revealed they were promoters of companies, NRIs from the GCC countries, eager to have him on their boards. "Where will I get such an ideal chief financial officer?" asked a person who said he was CEO of a company called Black Hole Ltd.
Even the jail superintendent says he is extremely happy with Raju. "He is a financial genius," he exclaimed. He said Raju had outlined a scheme that could save the jail a huge amount of money. "Raju explained that all I needed to do was to allow the inmates to choose their own guards. He said these guards would cost a fraction of the current salary being paid to jail warders. I was a little hesitant about prisoners choosing their own jailers at first, but relented when Raju said that it was exactly the same thing with companies — they all appoint their own auditors and nobody complains."
Incidentally, even the Naxalite prisoners lodged in the jail are very happy with Raju. "We have been working for decades to overthrow capitalism, with no effect," said their ringleader. "And then Comrade Raju comes along and wrecks the system from within, giving Indian capitalism a resounding blow." "We're electing him to the party's central committee," he added.
But Raju is unlikely to take up the offer. He has a job offer from Nigeria to run the huge network that sends scam emails to people promising to transfer billions of dollars lying in unclaimed money to them once they give their bank account numbers and a small advance payment. Unconfirmed reports say that to make the schemes look authentic they're thinking of asking accounting firm Pricewaterhouse to certify them.
Others say Raju is exploring a lucrative option in a related field. "He's thinking of becoming a godman," said a source, "Which is why he is reading religious books." Some also say that Raju is being paid a fat advance for a novel based on his Satyam swindle. "It's clear he has plenty of experience of writing fiction," pointed out a publisher.
And lastly, in a curious but related incident, teachers at a prestigious school in Hyderabad were shocked when young Bunty Reddy of class 5B told his class-teacher that his father was a male bar dancer. Investigations revealed, however, that his dad was actually an independent director on the boards of several companies. "In the circumstances, it's natural for the child to be ashamed of his parent," said the principal, "And that's why he tried to pass his dad off as a male stripper."
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Tuesday 20 January 2009
If the state can't save us, we need a licence to print our own money
It bypasses greedy banks. It recharges local economies. It's time to think seriously about an alternative currency
- The Guardian, Tuesday 20 January 2009
In Russell Hoban's novel Riddley Walker, the descendants of nuclear holocaust survivors seek amid the rubble the key to recovering their lost civilisation. They end up believing that the answer is to re-invent the atom bomb. I was reminded of this when I read the government's new plans to save us from the credit crunch. It intends - at gobsmacking public expense - to persuade the banks to start lending again, at levels similar to those of 2007. Isn't this what caused the problem in the first place? Are insane levels of lending really the solution to a crisis caused by insane levels of lending?
Yes, I know that without money there's no business, and without business there are no jobs. I also know that most of the money in circulation is issued, through fractional reserve banking, in the form of debt. This means that you can't solve one problem (a lack of money) without causing another (a mountain of debt). There must be a better way than this.
This isn't my subject and I am venturing way beyond my pay grade. But I want to introduce you to another way of negotiating a credit crunch, which requires no moral hazard, no hair of the dog and no public spending. I'm relying, in explaining it, on the former currency trader and central banker Bernard Lietaer.
In his book The Future of Money, Lietaer points out - as the government did yesterday - that in situations like ours everything grinds to a halt for want of money. But he also explains that there is no reason why this money should take the form of sterling or be issued by the banks. Money consists only of "an agreement within a community to use something as a medium of exchange". The medium of exchange could be anything, as long as everyone who uses it trusts that everyone else will recognise its value. During the Great Depression, businesses in the United States issued rabbit tails, seashells and wooden discs as currency, as well as all manner of papers and metal tokens. In 1971, Jaime Lerner, the mayor of Curitiba in Brazil, kick-started the economy of the city and solved two major social problems by issuing currency in the form of bus tokens. People earned them by picking and sorting litter: thus cleaning the streets and acquiring the means to commute to work. Schemes like this helped Curitiba become one of the most prosperous cities in Brazil.
But the projects that have proved most effective were those inspired by the German economist Silvio Gessell, who became finance minister in Gustav Landauer's doomed Bavarian republic. He proposed that communities seeking to rescue themselves from economic collapse should issue their own currency. To discourage people from hoarding it, they should impose a fee (called demurrage), which has the same effect as negative interest. The back of each banknote would contain 12 boxes. For the note to remain valid, the owner had to buy a stamp every month and stick it in one of the boxes. It would be withdrawn from circulation after a year. Money of this kind is called stamp scrip: a privately issued currency that becomes less valuable the longer you hold on to it.
One of the first places to experiment with this scheme was the small German town of Schwanenkirchen. In 1923, hyperinflation had caused a credit crunch of a different kind. A Dr Hebecker, owner of a coalmine in Schwanenkirchen, told his workers that if they wouldn't accept the coal-backed stamp scrip he had invented - the Wara - he would have to close the mine. He promised to exchange it, in the first instance, for food. The scheme immediately took off. It saved both the mine and the town. It was soon adopted by 2,000 corporations across Germany. But in 1931, under pressure from the central bank, the ministry of finance closed the project down, with catastrophic consequences for the communities that had come to depend on it. Lietaer points out that the only remaining option for the German economy was ruthless centralised economic planning. Would Hitler have come to power if the Wara and similar schemes had been allowed to survive?
The Austrian town of Wörgl also tried out Gessell's idea, in 1932. Like most communities in Europe at the time, it suffered from mass unemployment and a shortage of money for public works. Instead of spending the town's meagre funds on new works, the mayor put them on deposit as a guarantee for the stamp scrip he issued. By paying workers in the new currency, he paved the streets, restored the water system and built a bridge, new houses and a ski jump. Because they would soon lose their value, Wörgl's own schillings circulated much faster than the official money, with the result that each unit of currency generated 12 to 14 times more employment. Scores of other towns sought to copy the scheme, at which point - in 1933 - the central bank stamped it out. Wörgl's workers were thrown out of work again.
Similar projects took off at the same time in dozens of countries. Almost all of them were closed down (just one, Switzerland's WIR system, still exists) as the central banks panicked about losing their monopoly over the control of money. Roosevelt prohibited complementary currencies by executive decree, though they might have offered a faster, cheaper and more effective means of pulling the US out of the Depression than his New Deal.
No one is suggesting that we replace official currencies with local scrip: this is a complementary system, not an alternative. Nor does Lietaer propose this as a solution to all economic ills. But even before you consider how it could be improved through modern information technology, several features of Gessell's system grab your attention. We need not wait for the government or the central bank to save us: we can set this system up ourselves. It costs taxpayers nothing. It bypasses the greedy banks. It recharges local economies and gives local businesses an advantage over multinationals. It can be tailored to the needs of the community. It does not require - as Eddie George, the former governor of the Bank of England, insisted - that one part of the country be squeezed so that another can prosper.
Perhaps most importantly, a demurrage system reverses the ecological problem of discount rates. If you have to pay to keep your money, the later you receive your income, the more valuable it will be. So it makes economic sense, under this system, to invest long term. As resources in the ground are a better store of value than money in the bank, the system encourages their conservation.
I make no claim to expertise. I'm not qualified to identify the flaws in this scheme, nor am I confident that I have made the best case for it. All I ask is that, if you haven't come across it before, you don't dismiss it before learning more. As we confront the failure of the government's first bailout and the astonishing costs of the second, isn't it time we considered the alternatives?
Yes, I know that without money there's no business, and without business there are no jobs. I also know that most of the money in circulation is issued, through fractional reserve banking, in the form of debt. This means that you can't solve one problem (a lack of money) without causing another (a mountain of debt). There must be a better way than this.
This isn't my subject and I am venturing way beyond my pay grade. But I want to introduce you to another way of negotiating a credit crunch, which requires no moral hazard, no hair of the dog and no public spending. I'm relying, in explaining it, on the former currency trader and central banker Bernard Lietaer.
In his book The Future of Money, Lietaer points out - as the government did yesterday - that in situations like ours everything grinds to a halt for want of money. But he also explains that there is no reason why this money should take the form of sterling or be issued by the banks. Money consists only of "an agreement within a community to use something as a medium of exchange". The medium of exchange could be anything, as long as everyone who uses it trusts that everyone else will recognise its value. During the Great Depression, businesses in the United States issued rabbit tails, seashells and wooden discs as currency, as well as all manner of papers and metal tokens. In 1971, Jaime Lerner, the mayor of Curitiba in Brazil, kick-started the economy of the city and solved two major social problems by issuing currency in the form of bus tokens. People earned them by picking and sorting litter: thus cleaning the streets and acquiring the means to commute to work. Schemes like this helped Curitiba become one of the most prosperous cities in Brazil.
But the projects that have proved most effective were those inspired by the German economist Silvio Gessell, who became finance minister in Gustav Landauer's doomed Bavarian republic. He proposed that communities seeking to rescue themselves from economic collapse should issue their own currency. To discourage people from hoarding it, they should impose a fee (called demurrage), which has the same effect as negative interest. The back of each banknote would contain 12 boxes. For the note to remain valid, the owner had to buy a stamp every month and stick it in one of the boxes. It would be withdrawn from circulation after a year. Money of this kind is called stamp scrip: a privately issued currency that becomes less valuable the longer you hold on to it.
One of the first places to experiment with this scheme was the small German town of Schwanenkirchen. In 1923, hyperinflation had caused a credit crunch of a different kind. A Dr Hebecker, owner of a coalmine in Schwanenkirchen, told his workers that if they wouldn't accept the coal-backed stamp scrip he had invented - the Wara - he would have to close the mine. He promised to exchange it, in the first instance, for food. The scheme immediately took off. It saved both the mine and the town. It was soon adopted by 2,000 corporations across Germany. But in 1931, under pressure from the central bank, the ministry of finance closed the project down, with catastrophic consequences for the communities that had come to depend on it. Lietaer points out that the only remaining option for the German economy was ruthless centralised economic planning. Would Hitler have come to power if the Wara and similar schemes had been allowed to survive?
The Austrian town of Wörgl also tried out Gessell's idea, in 1932. Like most communities in Europe at the time, it suffered from mass unemployment and a shortage of money for public works. Instead of spending the town's meagre funds on new works, the mayor put them on deposit as a guarantee for the stamp scrip he issued. By paying workers in the new currency, he paved the streets, restored the water system and built a bridge, new houses and a ski jump. Because they would soon lose their value, Wörgl's own schillings circulated much faster than the official money, with the result that each unit of currency generated 12 to 14 times more employment. Scores of other towns sought to copy the scheme, at which point - in 1933 - the central bank stamped it out. Wörgl's workers were thrown out of work again.
Similar projects took off at the same time in dozens of countries. Almost all of them were closed down (just one, Switzerland's WIR system, still exists) as the central banks panicked about losing their monopoly over the control of money. Roosevelt prohibited complementary currencies by executive decree, though they might have offered a faster, cheaper and more effective means of pulling the US out of the Depression than his New Deal.
No one is suggesting that we replace official currencies with local scrip: this is a complementary system, not an alternative. Nor does Lietaer propose this as a solution to all economic ills. But even before you consider how it could be improved through modern information technology, several features of Gessell's system grab your attention. We need not wait for the government or the central bank to save us: we can set this system up ourselves. It costs taxpayers nothing. It bypasses the greedy banks. It recharges local economies and gives local businesses an advantage over multinationals. It can be tailored to the needs of the community. It does not require - as Eddie George, the former governor of the Bank of England, insisted - that one part of the country be squeezed so that another can prosper.
Perhaps most importantly, a demurrage system reverses the ecological problem of discount rates. If you have to pay to keep your money, the later you receive your income, the more valuable it will be. So it makes economic sense, under this system, to invest long term. As resources in the ground are a better store of value than money in the bank, the system encourages their conservation.
I make no claim to expertise. I'm not qualified to identify the flaws in this scheme, nor am I confident that I have made the best case for it. All I ask is that, if you haven't come across it before, you don't dismiss it before learning more. As we confront the failure of the government's first bailout and the astonishing costs of the second, isn't it time we considered the alternatives?
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Sunday 18 January 2009
The Credit Card Dragnet
Problems with this universal piece of plastic
January 17, 2009 By Girish Mishra
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In Economics, by 'money', we mean anything that is accepted for clearing a debt. To illustrate, if we go to a bookshop and buy a book, priced at $15, the moment the deal is struck and the shopkeeper hands over the book to us, we become indebted to him and this debt can be cleared by handing him anything, ranging from grains, secondhand books, etc. to currency notes. We can also discharge this debt by transferring $15 from our bank deposit through cheque. Please note that cheque is not money but only an instrument to transfer a particular sum from our bank deposit, which is money. In case our bank deposit is nil or insufficient, the cheque becomes meaningless and is dishonoured.
Traditionally, a person's capacity to spend has been circumscribed by the cash with him, his total deposits in banks and his movable and immovable property. He can borrow against his term deposits in banks and his property. Normally, he cannot borrow against his property more than its market value. Obviously, his ability to buy goods and services is limited. Moreover, a sane person always tries to save money for future exigencies and other needs like old age, ceremonies, education of children and so on. Thus his capacity to spend has been generally restricted. No creditor has normally dared to lend him more than his present worth and against his future earnings.
This limit to his capacity to borrow and spend has disappeared once the credit card, popularly known as plastic money, has come into existence. He can now go on shopping till he becomes tired and falls to the ground. To translate a Sanskrit saying, "one can now borrow and drink refined butter!" This has given a great boost to the phenomenon of consumerism when, with the beginning of the ongoing globalization, credit cards has become internationally acceptable.
Even though the credit card came into existence in the 1950s, its concept was visualized by Edward Bellamy, a leading American novelist of the second half of the 19th century. Bellamy was a Marxian socialist. As early as 1887, he published his novel Looking Backward. Its hero, Julian West, goes into a deep slumber in Boston towards the end of the 19th century and gets up in the year 2000. He finds that he is still in Boston but everything else has changed beyond recognition. The world has changed and become completely stranger to him. He is naturally bewildered. Fortunately, he gets a guide in Doctor Leete who explains that socialism of Marxian conception has come to prevail. One of its facets is that people do not have to carry cash for making purchases. Instead, they carry a card which is widely accepted. Thus Bellamy visualizes the advent of credit (more appropriately, modern day debit) card in chapters 9-11, 13 and 25-26.
During the 1930s and 1940s, a rectangular metal plate (2½×1¼), bearing holder's name and his place of residence, was generally issued by merchants with a large number of branches to their regular customers whose credit worthiness was beyond doubt. They were billed at regular intervals.
The credit card in the present form was introduced in 1950 by Ralph Schneider and Frank X McNamara, the founders of Diners Club. This was followed by the Bank of America's card in 1958, which, in the course of time, came to be known as Visa card. This became acceptable in America and a number of countries abroad. In 1966, Master Card came into existence when a host of banks joined hands and established MasterCharge. It received a big boost when the Citibank merged its own Everything Card with it. Later on, other banks came with their own cards.
Every credit card holder has his PIN or Personal Identification Number whose genuineness is verified by the shopkeeper and the cardholder is then allowed to shop with no cash in his wallet, and on the basis of income likely to accrue to him in future. The shopkeeper, too, gains by increasing his sale. The company that has issued the card guarantees the payment to the shopkeeper and recovers it from the cardholder after a fixed period of time. In case the cardholder is unable to repay the debt, the company charges interest usually at very high rates. In some countries, coercion including muscle power is also used by the company to recover its dues.
Since a cardholder is allowed teleshopping, there are instances of his PIN being stolen and misused. There are organized criminal gangs, specializing in this business. Three years ago, The Guardian (November 8, 2005) wrote: 'Credit-card fraudsters are increasingly turning to the internet now that the "chip and pin" system has closed other money-making avenues, new figures show.
'"card-not-present" fraud—in which criminals get hold of people's credit and debit card details and use them to buy goods online, over the phone or by mail order—has grown by 29% in a year... Online banking fraud has also risen sharply.'
The 2006 documentary film, "Mixed Out: Hard Times, Easy Credit and The Era of Predatory Lenders" vividly depicts the various unsavoury aspects of credit cards. A credit card is used as an ATM card too and this has induced criminals to steal it along with the pass word and withdraw money from holder's account. Moreover, the credit card companies fleece holders by way of hidden costs and terms and conditions not being made explicit at the time of issuing cards.
With the onset of the worldwide recession, both the cardholders and credit-card companies are in trouble. With growing incidence of unemployment, the demand for cards has slumped and the arrears of bills of credit-card companies have been accumulating. In India, as a result, a prominent bank like the ICICI is in great trouble. Now credit- card companies are realizing their folly of issuing cards without properly evaluating the creditworthiness of the clients. In fact, till 2007, companies used to lure prospective clients by hook or by crook and give them cards. A large number of cardholders have simply disappeared without clearing their dues. Since they have lost jobs and vacated their rented apartments with no permanent address. It is extremely difficult to trace them out.
The situation in America is extremely bad. Out of the total population of 300 million, the number of cardholders is 70 million, i.e., roughly one-fourth. It is reported that, initially, card-issuing companies indulged in extortion by charging high rates and resorting to complex terms and conditions, which very few customers could comprehend. As The Christian Science Monitor (December 18, 2008) has reported, more than fifty per cent of the college-going students in the USA has four or more credit cards per head. In the present era of recession, they find it extremely difficult to clear off their dues to card-companies.
The Americans owe more than $1 trillion by way of arrears to card- companies. The growing pressure from the Federal Reserve has forced them to apply tough measures to recover the arrears and they have adopted strict norms for the issuance of cards. To quote a report by Bloomberg.com (Dec. 18), "Credit-card companies, facing an increase in defaults and a decline in consumer spending, and raising some rates, adding fees and cutting credit lines as the Federal Reserve makes the most sweeping changes to the industry in 30 years." On the other hand, existing cardholders have begun reducing their purchases. Consequently, there is a continuous decline in the volume of effective demand, adding fuel to the fire of recession. It is feared that during next one and a half years, there may be a decline to the tune of $2 trillion only due to strictness as regards credit cards.
It is needless to add that consumerism, banking, credit proliferation, etc. will be adversely affected.
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Friday 16 January 2009
Slumdog Millionaire could only have been made by a westerner
After its rapturous reception in Britain and America, knives are being sharpened for Slumdog Millionaire. "Vile," is how Alice Miles described the movie in The Times. "Slumdog Millionaire is poverty porn" that invites the viewer to enjoy the miseries it depicts, she adds.
Even that old iconic Bollywood blusterer, Amitabh Bachchan, has thrown his empty-headed two rupees' worth into the mix. "If Slumdog Millionaire projects India as a third-world, dirty, underbelly developing nation and causes pain and disgust among nationalists and patriots, let it be known that a murky underbelly exists and thrives even in the most developed nations," he bellowed. "It's just that the Slumdog Millionaire idea, authored by an Indian and conceived and cinematically put together by a westerner, gets creative global recognition," he added.
Bachchan is no doubt riled, as many other Bollwood no-talents will be, about the fact that the best film to be made about India in recent times has been made by a white man, Danny Boyle. Just as Spike Lee got hissy with Quentin Tarantino after he proved he could make hipper films about black people than Lee could (Lee ostentatiously criticised Tarantino's use of the word "nigger" while littering his own films with the same language), so many Indians will be upset about a westerner having a better understanding of their country than they do. Bachchan gave one of the worst English-language performances in cinematic history with his embarrassingly stupid portrayal of an ageing thespian in The Last Lear. Having failed miserably at cultivating a western audience, it must hurt him to be so monumentally upstaged by white folk on his home turf.
The bitter truth is, Slumdog Millionaire could only have been made by westerners. The talent exists in India for such movies: much of it, like the brilliant actor Irrfan Khan, contributed to this film. But Bollywood producers, fixated with making flimsy films about the lives of the middle class, will never throw their weight behind such projects. Like Bachchan, they are too blind to what India really is to deal with it. Poor Indians, like those in Slumdog, do not constitute India's "murky underbelly" as Bachchan moronically describes them. They, in fact, are the nation. Over 80% of Indians live on less than $2.50 (£1.70) a day; 40% on less than $1.25. A third of the world's poorest people are Indian, as are 40% of all malnourished children. In Mumbai alone, 2.6 million children live on the street or in slums, and 400,000 work in prostitution. But these people are absent from mainstream Bollywood cinema.
Bachchan's blinkered comments prove how hopelessly blind he and most of Bollywood are to the reality of India and how wholly incapable they are of making films that can address it. Instead, they produce worthless trash like Jaane Tu, Rock On!! and Love Story 2050, full of affluent young Indians desperately, and mostly idiotically, trying to look cool and modern.
Slumdog Millionaire is based on the novel, Q&A, by Vikas Swarup. I know Vikas – an Indian diplomat, he loves his country as much as anyone and did it the service of telling its truth with great warmth and humanity. And Danny Boyle's film continues in precisely the same vein. His innovative brilliance, fresh perspective and foreign money was vital. As an outsider, he saw the truth that middle-class Indians are too often inured to: that countless people exist in conditions close to hell yet maintain a breath-taking exuberance, dignity and decency. These people embody the tremendous spirit and strength of India and its civilisation. They deserve the attention of its film-makers. I have no doubt that Slumdog Millionaire will encourage many more honest films to be produced in India. But they should be ashamed that it took a white man to show India how to do it.
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Even that old iconic Bollywood blusterer, Amitabh Bachchan, has thrown his empty-headed two rupees' worth into the mix. "If Slumdog Millionaire projects India as a third-world, dirty, underbelly developing nation and causes pain and disgust among nationalists and patriots, let it be known that a murky underbelly exists and thrives even in the most developed nations," he bellowed. "It's just that the Slumdog Millionaire idea, authored by an Indian and conceived and cinematically put together by a westerner, gets creative global recognition," he added.
Bachchan is no doubt riled, as many other Bollwood no-talents will be, about the fact that the best film to be made about India in recent times has been made by a white man, Danny Boyle. Just as Spike Lee got hissy with Quentin Tarantino after he proved he could make hipper films about black people than Lee could (Lee ostentatiously criticised Tarantino's use of the word "nigger" while littering his own films with the same language), so many Indians will be upset about a westerner having a better understanding of their country than they do. Bachchan gave one of the worst English-language performances in cinematic history with his embarrassingly stupid portrayal of an ageing thespian in The Last Lear. Having failed miserably at cultivating a western audience, it must hurt him to be so monumentally upstaged by white folk on his home turf.
The bitter truth is, Slumdog Millionaire could only have been made by westerners. The talent exists in India for such movies: much of it, like the brilliant actor Irrfan Khan, contributed to this film. But Bollywood producers, fixated with making flimsy films about the lives of the middle class, will never throw their weight behind such projects. Like Bachchan, they are too blind to what India really is to deal with it. Poor Indians, like those in Slumdog, do not constitute India's "murky underbelly" as Bachchan moronically describes them. They, in fact, are the nation. Over 80% of Indians live on less than $2.50 (£1.70) a day; 40% on less than $1.25. A third of the world's poorest people are Indian, as are 40% of all malnourished children. In Mumbai alone, 2.6 million children live on the street or in slums, and 400,000 work in prostitution. But these people are absent from mainstream Bollywood cinema.
Bachchan's blinkered comments prove how hopelessly blind he and most of Bollywood are to the reality of India and how wholly incapable they are of making films that can address it. Instead, they produce worthless trash like Jaane Tu, Rock On!! and Love Story 2050, full of affluent young Indians desperately, and mostly idiotically, trying to look cool and modern.
Slumdog Millionaire is based on the novel, Q&A, by Vikas Swarup. I know Vikas – an Indian diplomat, he loves his country as much as anyone and did it the service of telling its truth with great warmth and humanity. And Danny Boyle's film continues in precisely the same vein. His innovative brilliance, fresh perspective and foreign money was vital. As an outsider, he saw the truth that middle-class Indians are too often inured to: that countless people exist in conditions close to hell yet maintain a breath-taking exuberance, dignity and decency. These people embody the tremendous spirit and strength of India and its civilisation. They deserve the attention of its film-makers. I have no doubt that Slumdog Millionaire will encourage many more honest films to be produced in India. But they should be ashamed that it took a white man to show India how to do it.
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Friday 2 January 2009
A World Without Borders
An interview with Howard Zinn
May 2006 By Howard Zinn[This essay is part of the ZNet Classics series. Three times a week we will re-post an article that we think is of timeless importance. This one was first published May, 2006.]
Howard Zinn, professor emeritus at Boston University, is perhaps this country's premier radical historian. He was an active figure in the civil rights and anti-Vietnam War movements of the 1960s. Today, he speaks all over the country to large and enthusiastic audiences. His book, A People's History of the U.S. continues to sell in huge numbers. His latest work is Original Zinn .
BARSAMIAN: Politicians use history as a kind of mystical element or device. We often hear that the U.S. is called on by history to do certain things in the world.
ZINN: History is always a good entity to call on if you are hesitant to call on God because they both play the same role. They are both abstractions, they both are actually meaningless until you invest them with meaning. I've noticed that President Bush calls on God a lot. I think he's hesitant to call on history because I think the word history throws him. He's not quite sure what to do with it, but he's more familiar with God.
Political leaders, I guess, suppose that the population is as mystified by the word history as they are by the word God and that they will accept whatever interpretation of history is given to them. So political leaders feel free to declare that history is on their side and the way is open for them to use it in whatever manner they want.
Donald Macedo, in the introduction to On Democratic Education , mentions the Tom Paxton song, "What Did You Learn in School Today?" He quotes a couple of the lyrics."I learned that Washington never told a lie/I learned that soldiers seldom die/I learned that everybody's free." What does a democratic education mean to you?
To me, a democratic education means many things: it means what you learn in the classroom and what you learn outside the classroom. It means not only the content of what you learn, but also the atmosphere in which you learn it and the relationship between teacher and student. All of these elements of education can be democratic or undemocratic.
Students as citizens in a democracy have the right to determine their lives and to play a role in society. A democratic education should give students the kind of information that will enable them to have power of their own in society. What that means is to give students the kind of education that suggests to the students that historically there have been many ways in which ordinary people can play a part in making history, in the development of their society. An education that gives the student examples in history of where people have shown their power in reshaping not only their own lives, but also in how society works.
In the relationship between the student and the teacher there is democracy. The student has a right to challenge the teacher, to express ideas of his or her own. That education is an interchange between the experiences of the teacher, which may be far greater than the student in certain ways, and the experiences of the student, since every student has a unique life experience. So the free inquiry in the classroom, a spirit of equality in the classroom, is part of a democratic education.
It was very important to make it clear to my students that I didn't know everything, that I was not born with the knowledge that I'm imparting to them, that knowledge is acquired and in ways in which the student can acquire also.
How do you as a teacher foster that sense of questioning and skepticism and how do you avoid its going over to cynicism?
Skepticism is one of the most important qualities that you can encourage. It arises from having students realize that what has been seen as holy is not holy, what has been revered is not necessarily to be revered. That the acts of the nation which have been romanticized and idealized, those deserve to be scrutinized and looked at critically.
I remember that a friend of mine was teaching his kids in middle school to be skeptical of what they had learned about Columbus as the great hero and liberator, expander of civilization. One of his students said to him, "Well, if I have been so misled about Columbus, I wonder now what else have I been misled about?" So that is education in skepticism.
When you taught at Spelman College, and later at Boston University, you were teaching kids just coming out of high school. They come with a lot of baggage, a lot of embedded ideas. How difficult was it for you to reach them?
In the case of teaching at Spelman College, my students were African American and I was one of a few white teachers. For most of my students I was the first white teacher they had ever encountered.
I tried to have them realize that my values and ideas were different from those of the white-supremacist society they had grown up in, that I believed in the equality of human beings, and that I took the claims of democracy seriously, not only to try to break down the barrier between us by what I said in the classroom, but by how I behaved toward them, by not indicating that their education had been poor, which it very often was, by not making them feel that they were coming into this classroom handicapped.
Also by showing them that outside the classroom I was involved in the social struggle that related to their lives. When they decided to participate in this struggle and go to Atlanta and try to desegregate the public library or when they decided to follow the example of the four students in Greensboro, North Carolina and sit in, I was with them, I was supporting them, I was helping them, I was walking on picket lines with them, I was engaging in demonstrations with them, I was sitting in with them. More than anything, I tried to create an atmosphere of democracy in our relationship.
You've been a lifelong reader from the time when as a kid you found Tarzan and the Jewels of Opar in the street with the first few pages torn out. Later, your parents got you the complete collection of Charles Dickens's novels. What's the value of reading?
I don't know if my experience agrees with the experience of other people—I have talked to people, young people especially, who would say to me, "This book changed my life." I remember sitting in a cafeteria in Hawaii across from a student at the University of Hawaii and she had a copy of The Color Purple by Alice Walker. Since Alice Walker had been my student at Spelman, I didn't immediately say, "That's my student." I sort of cautiously said, "Oh, you're reading The Color Purple . What do you think of it?" The student said, "This book changed my life." And that startled me, a book that changed your life.
And also, I must say, in all modesty, that I have run into a number of students who have read A People's History of the United States , and who've said, in ways that I first did not believe but I'm almost beginning to believe now, "You know, your book changed my life."
There are books that have changed my life. I think reading Dickens changed my life. Reading Steinbeck's The Grapes of Wrath changed my life. Reading Upton Sinclair, yes, changed my life.
Today there are debates about the canon and what books are being taught and what topics. There are charges that campuses are run by leftists, by Marxist professors. Is this issue more acute now or does it ebb and flow?
Is this a more intense attempt to control the education of young people than we have had in the past? I think that may be so, for one reason. The stakes for the U.S. are higher than they ever were before. With the U.S. seeking to extend its power into more areas of the world, there is an enormous amount at stake for the establishment in bringing up a generation of young people who will accept what the U.S. government does and not be critical of it.
The economist John Kenneth Galbraith once said that the paradox of the U.S. was "private wealth and public squalor." There is a story on page 16 in the New York Times describing how in John Steinbeck's hometown of Salinas, California where they're facing record deficits. The town is closing the three public libraries, including those named for Steinbeck and one for Cesar Chavez.
It's interesting that that item appeared on page 16. It should have appeared on page 1 because it might have alerted more people to what is a horrifying development today. What is happening in Salinas, California, should be a wake-up call.
But this attack on libraries, on schools, is it part of a pattern of undermining the commons?
Let me interject my own personal note because I grew up in a cockroach-infested tenement in New York and we had no books in our house. I would go to a library in East New York on the corner of Stone and Sutter. I still remember that library. That was my refuge. It was a wonderful eye-opener and mind-opener for me.
But your question is a larger one. And that is, what is happening to the public commons? That is what Galbraith pointed to when he wrote The Affluent Society . What has been really one of the terrible consequences of the militarization of the country is the starving of the public sector, education, libraries, health, housing. This is why people become socialists. People become socialists in the way that I became a socialist when I read Upton Sinclair and when I read Karl Marx.
There are lots of distortions and misrepresentations attached to Marx. Should people be reading Marx today?
Yes, but I wouldn't advise them to immediately plunge into Volume II or III of Das Kapital , maybe not even Volume I, which is formidable. But I think The Communist Manifesto , although the title may scare people, is still very much worth reading because what it does is suggest that the capitalist society we have today is not eternal. The Communist Manifesto presents an historical view of the world in which we live. It shows you that societies have evolved from one form to another, one social system to another, from primitive communal societies to feudal societies to capitalist societies. That capitalist society has only come into being in the last few hundreds years and it came into being as a result of the failure of feudal society to deal with the change in technology which was inexorably happening—the commercialization, industrialization, new tools and implements. Capitalist society was able to deal with this new technology and to enhance it enormously.
I think another thing that would be important is Marx's view that when you look beneath the surface of political conflicts or cultural conflicts, you find class conflict. That the important question to ask in any situation is, "Who benefits from this, what class benefits from this?" If Americans understood this Marxian concept of class then, when they went to the polls and they had to choose between the Republican and Democratic Party, they would ask, "Which class does this party represent?"
There was a parade in Taos, New Mexico on February 15, 2003. The lead banner read, "No Flag Is Large Enough to Cover the Shame of Killing Innocent People." That's a quote from you. How is patriotism being used today?
Patriotism is being used today the way patriotism has always been used and that is to try to encircle everybody in the nation into a common cause, the cause being the support of war and the advance of national power. Patriotism is used to create the illusion of a common interest that everybody in the country has. I just mentioned about the necessity to see society in class terms, to realize that we do not have a common interest in our society, that people have different interests. What patriotism does is to pretend to a common interest. And the flag is the symbol of that common interest. So patriotism plays the same role that certain phrases in our national language play.
The U.S. is the only country in history to use weapons of mass destruction. The year 2005 marked the 60th anniversary of the bombings of Hiroshima and Nagasaki. That anniversary, incidentally, came amid reports that the U.S. was redesigning atomic weapons that would be sturdier and more reliable and last longer. Where were you when the bombs were dropped and what were your thoughts at the time?
I remember it very clearly because I had just returned from flying bombing missions in Europe. The war in Europe was over, but the war in Asia with Japan was still on. We flew back to this country in late July 1945. We were given a 30-day furlough before reporting back for duty with the intention that we would then go to the Pacific and continue in the air war against Japan.
We were there waiting at the bus stop and there was this newsstand and the big headline, "Atomic Bomb Dropped on Hiroshima." Because the headline was so big, although I didn't know what an atomic bomb was, I assumed it must be a huge bomb. And my immediate reaction was, well, maybe then I won't have to go to Japan. Maybe this means the end of the war on Japan. So I was happy.
I began to question the bombing of Hiroshima when I read John Hersey's book, Hiroshima , which is based on a series of articles he wrote for the New Yorker . He had gone to Hiroshima after the bombing and spoken to survivors. You can imagine what the survivors looked like—people without arms, legs, blinded, their skin something that you couldn't bear to look at. Hersey spoke to these survivors and wrote down their stories. When I read that, for the first time the effects of bombing on human beings came to me.
I had dropped bombs in Europe, but I had not seen anybody on the ground because when you're bombing from 30,000 feet, you don't see anybody, you don't hear screams, you don't see blood, you don't know what's happening to human beings. When I read John Hersey, it came to me, what bombing did to human beings. That book changed my idea not just about bombing, but it changed my view of war because it made me realize that war now, in our time, in the time of high-level bombing and long-range shelling and death at a distance inevitably means the indiscriminate killing of huge numbers of people and cannot be accepted as a way of solving problems.
How comfortable I am with those terms depends on who's using them. I'm not uncomfortable when you use them. But if somebody is using them who I suspect does not really know what those terms mean, then I feel uncomfortable because I feel they need clarification. After all, the term anarchist to so many people means somebody who throws bombs, who commits terrorist acts, who believes in violence. Oddly enough, the term anarchist has always applied to individuals who have used violence, but not to governments that use violence. Since I do not believe in throwing bombs or terrorism or violence, I don't want that definition of anarchism to apply to me.
Anarchism is also misrepresented as being a society in which there is no organization, no responsibility, just a kind of chaos, again, not realizing the irony of a world that is very chaotic, but to which the word anarchism is not applied.
Anarchism to me means a society in which you have a democratic organization of society—decision making, the economy—and in which the authority of the capitalist is no longer there, the authority of the police and the courts and all of the instruments of control that we have in modern society, in which they do not operate to control the actions of people, and in which people have a say in their own destinies, in which they're not forced to choose between two political parties, neither of which represents their interests. So I see anarchism as meaning both political and economic democracy, in the best sense of the term.
I see socialism, which is another term that I would accept comfortably, as meaning not the police state of the Soviet Union. After all, the word socialism has been commandeered by too many people who, in my opinion, are not socialists but totalitarians. To me, socialism means a society that is egalitarian and in which the economy is geared to human needs instead of business profits.
The theme of the World Social Forum, which is held annually, is "Another World Is Possible." If you were to close your eyes for a moment, what kind of world might you envision?
The world that I envision is one in which national boundaries no longer exist, in which you can move from one country to another with the same ease in which we can move from Massachusetts to Connecticut, a world without passports or visas or immigration quotas. True globalization in the human sense, in which we recognize that the world is one and that human beings everywhere have the same rights.
In a world like that you could not make war because it is your family, just as we are not thinking of making war on an adjoining state or even a far-off state. It would be a world in which the riches of the planet would be distributed in an equitable fashion, where everybody has access to clean water. Yes, that would take some organization to make sure that the riches of the earth are distributed according to human need.
A world in which people are free to speak, a world in which there was a true bill of rights. A world in which people had their fundamental economic needs taken care of would be a world in which people were freer to express themselves because political rights and free speech rights are really dependent on economic status and having fundamental economic needs taken care of.
I think it would be a world in which the boundaries of race and religion and nation would not become causes for antagonism. Even though there would still be cultural differences and still be language differences, there would not be causes for violent action of one against the other.
I think it would be a world in which people would not have to work more than a few hours a day, which is possible with the technology available today. If this technology were not used in the way it is now used, for war and for wasteful activities, people could work three or four hours a day and produce enough to take care of any needs. So it would be a world in which people had more time for music and sports and literature and just living in a human way with others.
You've said that you became a teacher for a very modest reason: "I wanted to change the world." How close have you come to achieving your goal?
All I can say is, I hope that by my writing and speaking and my activity that I have moved at least a few people towards a greater understanding and moved at least a few people towards becoming more active citizens. So I feel that my contribution, along with the contribution of millions of other people, if they continue, and if they are passed on to more and more people, and if our numbers grow, yes, one day we may very well see the kind of world that I envision.
David Barsamian is director of Alternative Radio (www. alternativeradio.org) and author, with Tariq Ali, of Speaking of Empire & Resistance .
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Friday 24 October 2008
Definitions: The Proletariat
By Gaither Stewart
17 September, 2008
Countercurrents.org
"Suppose that some great disaster were to sweep ten million families out to sea and leave 'em on a desert island to starve and rot. That would be what you might call an act of God, maybe. But suppose a manner of government that humans have set up and directed, drives ten million families into the pit of poverty and starvation? That's no act of God. That's our fool selves actin' like lunatics. What humans have set up they can take down….Whoever says we've got to have a capitalist government when we want a workers' government, is givin' the lie to the great founders of these United States…."
A Stone Came Rolling
Olive Tilford Dargan
(Rome-Asheville, N.C.) I was back in Asheville where I started out. I found her gravesite in the obscure Green Hills Cemetery in the frontier territory of the West Bank part of this mountain city, across the French Broad River that the Cherokee called Tahkeostee.
OLIVE TILFORD DARGAN
JAN. 10,1869
JAN.22, 1968
HER HUNDREDTH YEAR
The poet is now forgotten. Her tomb lies far from the monumental cemetery-resting place of other Asheville writers such as Thomas Wolfe and O. Henry. In her long life she was neglected because she was a proletarian writer, no easy undertaking in her times in Western North Carolina. Concerning the workers' struggles in America last century, Dargan admitted that literature was secondary to her social commitment. 'The struggles lie closer to real experience than the flutter of an eyelid which has occupied bourgeois writers ….' A widely traveled Radcliff graduate, Olive Tilford Dargan lived most of her life in Asheville, NC. Acclaimed poet and novelist and in Who's Who, she was blacklisted during the McCarthy Communist Scare in 1950s. Other writers labeled her writings propaganda because she "hobnobbed" with Communists.
Dargan described her first novel, Call Home the Heart, published in 1932 by Longmans, Green and Company, under the pseudonym of Fielding Burke—as 'a proletarian novel depicting the role of mountain folks in the Gastonia, North Carolina cotton mill strikes,' also largely forgotten as are the wave of violent textile worker strikes that swept through North Carolina in 1929. The strike in Gastonia reflected the tensions rising from the industry's rapid development in the South after World War I when northern capitalists took over the southern mills to exploit cheap labor. Since Gastonia was the epicenter of the phenomenon, mountaineers from the Smokies swept into town to work in the mills. The Loray Mill (pronounced Low-Ray) was the first in the South to undergo new "techniques" such as speed-ups forced on the worker rather than new technology. That exploitation of labor ignited the anger of textile workers in the region until walkouts began. The strike in the Loray Mills was the most famous and the most violent.
I still remember the red brick buildings, the chain-link fences and the little houses in Loray Village in West Gastonia that we passed each time we arrived in Gastonia where my grandparents lived. At that point my father always said, "Well, we're at Loray, so we're nearly there."
Mill owners and state law enforcement crushed those strikes so viciously that subsequent attempts to organize labor in the North Carolina textile plants were unsuccessful. Yet the history of the strike remains, recorded in novels like those of Dargan and in the writings of one of the organizers of the Gastonia strike, Vera Buch Weisbord, a Communist and member of the National Textile Workers Union, NTWU. No less than Marxist writings, such histories of the battles for social justice throw light on the eternal struggle between labor and capital.
The history of the clash in Gastonia offers the perfect setting for an epic film or a social play of an insurrection. All the classic characters are present: evil capitalist mill owners, exploited workers in hot dusty factories, tiny ragged children and their emaciated mothers and wives in the square wooden houses, strikers, scabs and strike-breakers and dedicated and corrupt union leaders.
Dargan claimed the sequel to her first novel—A Stone Came Rolling, same publisher, same pseudonym—was even more proletarian. She claimed that she strove not to write propaganda while she fought with conflicting feelings about writing poetry and her social responsibility. Can one combine the two? she wondered. Or are fiction and social reality destined to take separate paths?
Dargan was an idealistic dreamer. To the end she continued to see good in a southern folk that has always been not only violent and brutal but also lacking in any kind of class-consciousness. They were no shield against the capitalism she detested. Neither her Asheville nor strike-ridden Gastonia 100 miles away were safe places for radicals.
PROLETARIANS, THE PROLETARIAT AND CLASS CONSCIOUSNESS
This article should be dedicated to wage earners—especially in the USA and Europe—as well as to those peoples of the world who have no wages at all, the potentially class-conscious proletarians who have the capability of changing the reigning social-economic order.
The prologue to this historical play begins in ancient Rome where the proletariat was the lowest class, the plebs, the masses. Then, a jump forward through the English Revolution to the French Revolution where the curious wage earner-spectator finds the same lower classes now represented by the sans culottes, the ragged have-nots of society, ruled over by the bourgeois and the royalty. Then, a half century later, Marx attaches the old label of proletariat to the workingmen and the downtrodden masses capable of war against the bourgeoisie. By the time of the Russian Revolution the working class there has become class-conscious and in the vest of the industrial proletariat—no longer simply ignorant masses—executes its revolution.
Ten years later, when those textile workers strikes spread over the American South, bombs flew, agitation was real and the potential for proletarian revolution was in the air. The missing factor in America was effective leadership as in Russia. There were only strikers for more pay, strikebreakers, scabs and suffering people.
Online I found this eloquent testimony in the book by John A. Salmond, The General Textile Strike of 1934, From Maine To Alabama, University of Missouri Press, Columbia and London.
WE DIDN'T HAVE NO BACKING.... WE SHOULDN'T
have done it. The South hadn't even begun to organize
well by then, " remembered Kasper Smith, former textile
worker and striker. "What happened in 1934 has a whole lot to do with
people not being so union now." The veteran organizer, Solomon Barkin,
made much the same point at a 1984 symposium commemorating the
strike's outbreak. The strike's leaders had had little "experience with lead-
ing large strikes, " he asserted; there was no money to sustain the effort;
"organizational preparation was practically nil"; there was little support
from other unions, the federal bureaucracy or the president, "preoccu-
pied" as he then was "with recovery rather than labor relations." More-
over, the AFL generally had failed its local union base, especially those
"which had been spontaneously formed" in the wake of the NIRA's pas-
sage. They were essentially left to their own resources during the strike.
There was no national direction, no widespread public or union support.
This was not a national strike at all, but rather the sum of thousands
of essentially local efforts, often with differing impulses and aims, and
this was especially true of the cotton textile South, the strike's supposed
epicenter, where the workers' sacrifices were the greatest, the repression
the most severe, and the consequences of failure the most long-lasting.
No, the idea of the proletariat is not passé. The word proletariat still conveys the sense of resistance to oppression, of action, of force and strength, of an ideal. The words labor and capital, as Marx used them, are real-life categories. The capitalist and the wage earner are the personification of capital and wage labor. To disparage such words or use them in derision is to deny the dignity of human existence. For today as yesterday the proletariat is no less than the great masses of the world. It is the people. It is one of those words that are exciting and stimulating … but in the abstract. In fact the concrete proletariat is hard to touch.
Though those masses personified by proletariat constitute a class, they themselves are seldom aware of it. To become a class of action the proletariat requires leadership, something those furious, hungry, striking textile workers did not have.
The proletariat is complex. It comprises much more than the industrial proletariat of the Russian Revolution. It comprises any wage earner, the property-less class, which sells its labor to the class of property, money and power who however do not work.
Thus those two classes—those who work and those who don't—stand face to face on the stage of life, interdependent, but forever at war with each other. The capitalist class understands instinctively this eternal dichotomy dividing men since the Persians, Mesopotamians and the Greeks. But the super-indoctrinated American working class dulled by the "American dream" does not get it. On the other hand the middle class in America and Europe has not grasped that they too are now part of the proletariat.
Having a mortgaged home, a car and a TV does not change the proletarian's status because his very lifestyle depends on wages determined by the capitalist class which controls property, power and money. The wage earner depends on money lent him by the capitalist bank to buy his home, his car and his TV. The current subprime crisis demonstrates eloquently that those loans make the wage earner a prisoner of his employer, be it industry or banks or the state bureaucracy.
Though the man who works for wages, blue collar or middle class, is a member of the working class, his wage earner status does not make him automatically a class-conscious revolutionary. He can be anything, from a priest to the blackest reactionary, which unfortunately is often the case in the USA.
Modern history shows that the American wage earner—the potential proletarian—is in reality the staunchest flag-waving defender of the capitalist system that exploits him, does nothing for him except pay him unfair wages, sends him to war to defend capitalist interests, and throws him aside at will. American wage earners are so amorphous, so blunted in their ballyhooed ignorance, so unstructured and ill-organized that they do not even constitute a class. Their ignorance and their acceptance of their situation represents one of the great victories of capitalism.
The arrangement doesn't make any sense at all.
Many Europeans workers are still class-conscious. But not the reactionary American workingman. The absence of class-consciousness of the American workingman exemplifies Marx's statement that "the working class is either revolutionary or it is nothing."
Even more: not even the mildly class-conscious workingman is aware that he is willy-nilly engaged in a war with the capitalist class. He continues to accept his role as an indistinct part of an illusion of a society, as an abstraction of a cradle-to-grave category, destined to make no mark on society, to leave no traces of his passage though life.
However, those 1930s textile strikes in North Carolina show that his illusions may one day fall away. The day he and his new middle class companions wake up from their incubus and genuine, fully developed class awareness arrives, the newborn proletariat can then become revolutionary.
That day will be the death of American capitalism, as we know it.
Meanwhile, caution. Let's don't confuse revolution with either liberal reform or armed insurrection. Reform is adjustment made by the rulers in order to maintain power, as happened for decades in Tsarist Russia. As a rule, reforms are too little and too late. Insurrection on the other hand is a local, spontaneous and one-issue matter, as was the 1929 Gastonia cotton mill strike. Insurrection is not revolution.
Since drastic and radical social-political change should be the goal of thinking world citizens today, everything that inhibits social solidarity, the blossoming of resistance, the redistribution of wealth, and the creation of a rebellious mindset against a negative myth are obstacles to be overcome.
But wait a minute! A myth? What myth? In this case—the myth is America itself. The Greeks too wondered how can you battle a myth? In the aftermath of the fall of Troy, Menelaus stood before Helen with his sword raised: he stared at the traitoress and let his sword fall. He couldn't kill her. Helen was a myth. Menelaus wondered how you can kill a myth. He was not a revolutionary. In the final countdown, myths too, that is illusions and false consciousness, must be destroyed to make room for legitimacy.
Speaking of myths, let's keep in mind that though born out of solidarity and resistance and reason, the United States of America has always harbored violence in its soul. We now see that peaceful, anti-war, mankind-loving America is a myth. A parallel violent world lives within American society. In America, violence and war are so much a part of life that non-violent opposition to its inbred violence seems to be hopeless folly and unreason. In comparison to America's homebred terrorism and violence, just a heartbeat away from mainline life, al-Qaeda is stuff for babies and schoolgirls. In comparison to today's institutional terrorism, past student non-violent protest or even pistol-armed Black Panthers and Weather Underground insurrections appear as innocent as breaking plate-glass windows.
Another illusion to be overcome is that the abstract workingman-proletarian can develop class-consciousness alone. Class-consciousness must be instilled from outside the class. That role inevitably falls to the intelligentsia and activists. Marx wrote in German Ideology that "one of the most difficult tasks confronting philosophers (let's say, educated people), is to descend from the world of thought to the actual world." That is, to the world where the workingman lives.
Yet, proletarians reject interference by intellectuals. The American workingman appears allergic to knowledge and history. Therefore he is the most truant in class awareness. The American working people have forgotten that they constitute a class, that classes even exist. They act as if the class idea belongs to another planet. To the world of Communism! That it too is an illusion.
Moreover, the poor economic classes of America accept the American Dream rhetoric that the rich deserve to be rich because they are smarter. Wealth is proof of their virtue. It is good to be rich. The poor are guilty for their poverty. As John Steppling points out on these pages, the American poor produce and reproduce the values of the ruling class, the values and ideals of the rich. The poor live in the illusion of real choices in life while in reality they live their little lives in servitude.
While the "people" are as if paralyzed, blind and dumb, in its name travesty after travesty are committed by those same capitalist leaders who betray the people routinely and abominably, making themselves traitors in the process and making the people complicit in their crimes against humanity. In Nazi Germany it was "we didn't know." In America today it is "we don't want to know". No false airs, please. That's un-American. Who cares about social theories? Who cares where Laos is located? Or Georgia? If Saddam Hussein wasn't responsible for 9/11, he could have been, which is the same thing. Only evildoers and anti-Americans believe he didn't have weapons of mass destruction. The wide admiration for ignorance, I think, is in imitation of the ignorance of the nation's leaders. And, as we know, ignorance is the handmaiden of the crime of Fascism.
By a strange coincidence I just opened at random the book The Origins Of Bolshevism by one of the forgers of the Russian Revolution, the Menshevik Theodore Dan, and found his remark about the "open war of the Orthodox folk (in pre-revolutionary Russia) with educated people." Also then, in those different but analogous circumstances of pre-revolutionary Russia, educated people were isolated from the masses. From that perspective the working class in the US has become politically worse than nothing. As a collective it has been molded into a reactionary force that keeps the power elite in power. Conditioned, brainwashed and hoodwinked, the bribed workers seem to believe ignorance is for their own good.
So what happened to the collective? Or, worse, was it always that way? Except for sporadic insurrections in face of starvation in the depression years and isolated periods of resistance, the American collective has never emerged in the glory it must harbor somewhere.
Therefore Marx said that if the proletariat is not revolutionary, what good is it? And that is the pertinent question today. Is the American workingman, the wage earner, the proletariat, reformable? I pose that question for that American wage earner who does not pose the question himself.
At this point we can't go much further in the American part of the proletarian tragedy without some class distinctions. Today, up there on the political stage we see the prancing billionaire puppets of the capitalist class who control property, money, and, consequently political power. Whom they decide to place at the top of the pyramid today to represent their interests and misrepresent the masses should be a matter of indifference to the blue collar-middle class wage earner masses. In my mind not voting for any of them is an acceptable choice if accompanied by compensatory revolutionary activity. The most one can say is that a growing number of Americans, now approaching a majority, either through choice or indifference have opted for the non-vote route, while a tiny minority finds satisfaction in minimal grassroots agitation.
And here, another character mentioned above steps on stage. Today, as in recent centuries in the Occident, there is an in-between class. It is part of the middle class, elsewhere and at other times called the petty bourgeois, from which emerge America's liberals and progressives. Many petty bourgeois beyond America's borders, chiefly in Europe, prefer to label themselves Social Democrats. Far from wanting to transform society in the interests of revolutionary proletarians, they aspire to making the existing society tolerable … for themselves. In their own interests they want to counteract the rule of capital by the transference of as much power and employment as possible to the state of which they are an integral part.
HOWEVER, in their conception of state and society, the workers, the wage earners, the proletariat, are to remain forever workingmen, wage earners, proletariat. Therefore the petty bourgeois (again, the liberals and progressives) social programs for better wages and security for the workers, with which they bribe the workers to stay in line.
That was the warning Marx and Engels brought to the Central Committee of the Communist League in 1850. But how modern it rings.
That's where the proletariat must step forward and shout, NO!
It's true that every event that happens leaves traces. It is something like mirrors and their reflections. Except that in the mirror's reflections, the left is right, and the right is left. Illusions all! Illusions are like words unspoken that are no longer words at all. Sometimes we have to banish all possibilities of illusion. Sometimes we have to stop, close our eyes, and allow ourselves to see real reality, not illusion where right is left, and left right. Reality free of brainwash. Free of all those words and euphemisms we hear on TV and read in the establishment press. We can trust none of it.
One problem facing the wage earner-proletariat is the lack of a suitable program. I can't see an acceptable program for changing the world. The "Another World Is Possible" movement is at best a loose agreement around the planet that change would be a good thing. One answer to those who wonder what the new resistance wants is simple: they want a just society.
Sometimes it is comforting—but not much more than that—to recall that though protest movements of the past have been broken and scattered by Power, many of those people and like-minded others are still out there in society. They could rejoin the growing number of mature people with eyes to see and ears to hear.
But what are they to do? one wonders.
That has always been the question.
Studies show that the class of Power in the USA is surprisingly small, numbering in the tens of thousands. The potential opposition on the other hand is enormous, including all those Che Guevara had in mind when he quipped, "If you tremble in indignation at injustice then you are my comrade." El Che had in mind the proletariat of the world.
Though much of the ruling class is stashed away in corner offices on top floors behind batteries of secretaries, apparently in hiding, out of its vanity it still wants to be seen. For what is Power if no one knows YOU hold it? Members of the Power class are visible on stage each day, in TV, in Congress, in the military hierarchy, in diplomacy, multinationals, religions and the universities. The higher they ascend the ladder of Power, the more entrenched in the Power system they become. However, those at the very summit are in hiding, the rulers who really rule. The most dangerous are those who meet in secret societies like the Bilderbergers. We can suspect who they are.
Since it seems that the people sitting in the top tiers of our political-social theater have abdicated from the struggle, we tend to underestimate their power. For they too have a stake in the land. One forgets the potential force of those textile strikes of the 1930s. One forgets that organized workers can bring a small city like Asheville in North Carolina or a metropolis like New York or a company like General Motors to a standstill in a matter of hours. The reason that seldom happens is because the people have forgotten their own strength.
People don't think about their strength because of Power's astute use of myth and illusion: the myth of freedom and the illusion of happiness made of comfort and ease. And today, above all, more and more out of fear!
Though most people seem to prefer ignorance, some people are learning to distinguish between myth and reality. For many issues are glaringly real and evident: the Iraq War, globalization, US imperialism, legalized torture and genocide, the new American police state, and the degradation of social life in the West in general.
Solidarity too is growing. Resistance spreads. The superiority of "the American way of life" has revealed itself to be a great lie. The result of extended and prolonged resistance is inevitably state violence against dissent. State violence in turn has a multiplier effect: when Power steps in to taser dissenters, it intensifies resistance. An explosion becomes inevitable. First collective action, then civil disobedience, then state violence, then the explosion. For police-state laws change our thinking about legitimacy. This time around the explosion can become something much different than Power imagines. An organized people can shut down the nation without firing a shot.
The people! Today the American people are broken, fragmented and bewildered, devoid of unity of purpose, as existed briefly, let's say, during the Vietnam War. According to recent studies the vast majority of American people are still unaffected by America's ongoing permanent war. The discussion about whether 70,000 or over one million Iraqis have been massacred has a certain theoretical-academic air about it. Not even the mothers of the American dead in Iraq can get organized.
At the same time more and more people have lost faith in the electoral system. Some of them have taken on the job of breaking down the natural passivity of the dissatisfied and fragmented people who, though in potential agreement with revolutionary analyses, are unused to resistance because of the illusionist spin conducted by Power. Therefore the suggested antidote of not voting for any of them.
Then there are the wars to be ended. If the people can't share the government's war effort, it can share in anti-war objectives. There is vast and growing poverty and social injustice to be resolved. There is a dramatic need for universal health care. There is a corrupt and mean political class to be removed. All of it. Both parties. There is every need to give power back to the people.
Grassroots organizer Abigail Singer, co-founder of Rising Tide North America and of a recent Southeast Climate Convergence conference in Asheville, North Carolina, said in an interview that voting is not enough because the electoral process has been sold to the highest bidder and that people who get into positions of power have to sacrifice whatever principles they started out with to the point that systemic change is impossible. Real change can come only from the grassroots.
At the same time a growing number of people are losing faith in nonviolence. Singer points out that capitalism itself is extremely violent. "If you're not nice and polite, some people consider that violence. But most violence is in business as usual and capitalism grinding on, killing workers, forests and oceans. We're surrounded by normalized violence and don't recognize it for what it is. Confronting this normalized violence in a direct way is not violent; it's necessary."
While liberals and progressives argue that you have to work within the system, the modern activist is mutating because the political climate has changed. The violence of government repression creates violent reaction in the same way war against Iraq creates new shahids. Violent resistance is nothing new: Black Power backed up the Civil Rights movement. Historically the US government didn't grant more workers rights because it became good but because people rose up and demanded their rights. People organizing to defend themselves reaches back through the history of man. Today in America some few people are coming together and developing new ideas of resistance. Their number is destined to grow to the degree that government repression grows.
After my youth in America I have lived my adult abroad. Traveling to the USA today is to go abroad. Therefore I have acquired a double sensibility about my homeland. When I arrive there, abroad, but also at home, I feel double tensions in the air: the tension connected with the widespread fear of losing "the American way of life" and the tension of a minority of dissatisfied people also fearful because it knows it is living an illusion, and that mutiny—still so nebulous as to appear a chimera—will be necessary to change things. In America I sense both a fear of action and a fear of non-action. Perhaps also a fear of change, fear that things can only get worse. The fear, as one friend wrote me today, that something very bad is about to happen to America. A fear like that of a people inhabiting the wrong house, or the haunting fear that the real house it once inhabited is today occupied by usurpers and has lost its soul.
One senses also a disturbing atmosphere of sick pragmatism and a depoliticalization coupled with widespread contentment with just analyzing the current situation rather than challenging it.
It is a good sign that across the land some grassroots activists are working to break down indifference. Radical change presupposes an end to blind acceptance of Power's fictionalized version of reality. Activists no longer need feel alone. Each person arrested in anti-war demonstrations acquires new faith in resistance and each of them creates new converts.
Acceptance of the legitimacy of Power, indifference to Power's deviations and passivity in the face of Power's threats against external enemies seem to have peaked. More and more people believe that Power gone mad has to be put aside. The eventual end of acceptance and passivity could result in a kind of explosion the world has never seen.
Today however that clash is still more hope than reality. Hope that a new strategy of liberation from the oppression of illegal American Fascism will mushroom. In other times, in an older language, that strategy would be called revolutionary theory. The old Leninist concept is apt here: there can be no revolutionary movement without a revolutionary theory. The theory here, the strategy, must explain that it is not just George W. Bush, the system's current representative, or his replacement, who must go, but the system itself run by that tiny minority at the top.
But people don't rebel easily. People prefer reforms. People do everything possible to avoid social convulsion and upheaval, even compromising with a Fascist police state, precisely as happened in Nazi Germany and Fascist Italy.
On the other hand, today's US government is aware that the spirit of mutiny/revolution is brewing. That is why it has armed itself with a set of illegal and anti-constitutional laws to crush it. At this juncture the alternative to ousting today's corrupt American system is a permanent police state, which if it becomes any more fixed than it is now just might last a thousand years.
The American people will have to decide what to do and how to act. Meanwhile many non-Americans agree that the most extreme problem of this century for mankind is the confused, powerful and violent United States of America.
Finally, as an epilogue, see what Henry David Thoreau (1817-78), great American author and philosopher, wrote in his "On the Duty of Civil Obedience":
"All men recognize the right of revolution; that is, the right to refuse allegiance to, and to resist, the government, when its tyranny or its inefficiency are great and unendurable. Those who, while they disapprove of the character and measures of a government, yield to it their allegiance and support, are undoubtedly its most conscientious supporters, and so frequently the most serious obstacles to reform.
"If the injustice is part of the necessary friction of the machine of government, let it go, let it go…. if it is of such a nature that it requires you to be the agent of injustice to another, then I say, break the law. Let your life be a counter-friction to stop the machine. What I have to do is to see, at any rate, that I do not lend myself to the wrong, which I condemn.
"But what shall I do? You ask. My answer is, If you really wish to do anything, resign your office. When the subject has refused allegiance, and the officer has resigned from office, then the revolution is accomplished."
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