By Thomas Neuburger
I want to examine two pieces that touch the same theme: how neoliberalism as an economic system enshrines the extraction of rent over industrial production (the making or real things); and how this trend would end in the failure of the West, absent a climate-crossed future. Music at the end.
The Sale of Our Manufacturing to Enrich the Rich
Consider the following pieces as a set.
Welsh starts by comparing the creation of EV charging stations in the US and China. The US government spent $7.5 billion in subsidies; the Chinese government spent $10 billion roughly. Total stations produced by the $7.5 billion program: seven stations.
Total EV charging stations in the US: 186,200.
Total in China: seven million, of which 2.2 million are public.
Then he makes his larger point, that the neoliberal system in the US is designed not to produce.
[Y]ou can’t run industrial policy or a war economy under neoliberalism. It’s impossible. … Washington spends 7.5 billion for 7 charging stations. This isn’t just incompetence, this is corruption. Yes, China and Russia have corruption. Lots of it. It is nothing compared to American and European corruption, not even on the same scale. In China, especially, most corruption is “honest corruption” — you can take a slice, but you have to actually deliver. If X number of homes or charging stations are to be produced, you’ve got to produce them.
Which leads to this:
Simply put, neoliberalism is about unearned money: about capital gains; PE plays where you buy a company with debt, load it with the debt and then dump it; monopolies and oligopolies and getting government to juice asset prices or pay you far more than you deserve for shoddy goods (see mil-industrial complex.)
All this is true. China’s industrial policy enriches the country at the expense of the rich. U.S. industrial policy enriches the rich at the expense of the country.
As a result (Welsh argues) China now creates good products — like its latest electric cars, which U.S. politicians fear — while we create crap. And now (Welsh would add) there’s no going back for us; the future is theirs.
I’ll add, it would be theirs if it’s anyone’s at all. Sadly, this century will be no one’s.
The message: Don’t count on the donor class to fix this mess. They want it this way.
• Finance Capitalism versus Industrial Capitalism: The Rentier Resurgence and Takeover (Michael Hudson)
Thanks to a fascinating piece at Naked Capitalism on Apple’s awkwardly on-the-nose “Crush” ad (see below), I’m pointed to an address given by Michael Hudson on the same theme, the West’s surrender to finance capitalism and what that means for the world:
One must conclude that America has chosen no longer to industrialize but to finance its economy by economic rent—monopoly rent from information technology, banking, and speculation—and leave industry, research, and development to other countries. Even if China and other Asian countries did not exist, there is no way that America can regain its export markets or even its internal market with its current overhead debt and its privatized and financialized education, health care, transportation, and other basic infrastructure. The underlying problem is not competition from China but neoliberal financialization. Finance capitalism is not industrial capitalism. It is a lapse back into debt peonage and rentier neo-feudalism. Bankers play the role today that landlords played up through the nineteenth century, making fortunes without corresponding value from capital gains for real estate, stocks, and bonds on credit and from debt leveraging—whose carrying charges increase the economy’s cost of living and doing business.
Not much different from Welsh’s point. Welsh carries it further, predicting the collapse of Western hegemony. Hudson makes no such prediction, but like Welsh, identifies the current war between West and East as a fight between economies, not countries:
Today’s new Cold War is a fight to internationalize this rentier capitalism by globally privatizing and financializing transportation, education, health care, prisons and policing, the post office and communications, and other sectors that formerly were kept in the public domain. In Western economies, such privatizations have reversed the drive of industrial capitalism.
Whatever else they’re doing, Russia and China still make things — thus, at least in part, Hudson’s “new Cold War.”
Is Apple a Manufacturer?
To return to Apple for a moment, one product of this thought is that Apple is no longer part of the manufacturing economy, but has become a rent-seeker instead.
Naked Capitalism quotes Jathan Sadowski saying this…
Rather than representing some disruptive new “subscription” paradigm, however, what all these companies are doing — including Apple — is revitalizing of an old form of rentier capitalism that we long associated with landlords and feudalism. Whether we call it platform capitalism, surveillance capitalism, or just next-gen rentier capitalism, this model for how capital operates uses mediation and enclosure to achieve extraction and control over its subjects. “Rentier” refers to a relationship where an asset owner charges others to access that asset, just as a landlord charges tenants to rent a home the landlord owns.
…and points to a 2019 piece in Salon titled “Pay us forever: Apple wants you to rent your life from them”:
Apple, a tech company renowned for its gadgets, held an event on Monday in which it announced five new offerings, only one of which was an actual gadget (the little under-the-TV box known as the Apple TV). The rest of its new products were “services,” an ethereal category so profitable that it has become the second-biggest revenue generator at the most valuable public company in the world. What “services” refers to, really, are things that you subscribe to and pay for forever, or at least until your subscription terminates. But Apple, like every other subscription business model, would prefer your subscription doesn’t terminate.
Life in a landlord’s world. They want it this way.
That Apple Ad
As if the thought of this much predation wasn’t enough, the Apple “Crush” ad hits the heart as well. It shows the destruction of what we use to make art — brushes and paint; trumpets, pianos, guitars — plus mannequins and toys, things that bring us delight — compressed with brute force into a hardware platform whose tools we must rent to use.
Play the following with sound off to get the effect.
And in case you missed what Apple did so wrong, here’s the ad in reverse:
Still loving them Apples now?
Music
I couldn’t resist. Here’s a remastered performance of Pink Floyd’s “Money.”
For music theory fans, note this is 7/4 time, counted 3 + 3 + 1. (You might compare this with the 5/4 rhythm in the song “Je suis jalouse” from a previous post.)
Truth. And when you add in that all americans who vote and both parties that they vote for are in on the grift... it becomes easy to understand why this is such a shithole (for the 99.9% at the bottom).
Then read some history. Start with the 1929 crash, forward through the election of '32 and then get detailed about what FDR and J.M. Keynes taught us/US... that worked spectacularly. And then begin again in 1980 when the orgasm of repeal of everything we learned about fixing the great depression and most of the anti-hate advances since the civil rights movement.
Now, again, realize that it's BOTH parties and 99.3% of everyone who votes who is the cause of this.