Some Drug Company Executives Criminally Charged in America’s Flawed Democracy

A major producer of opioids known as the Rochester Drug Cooperative has recently witnessed its executives criminally charged with illegally distributing controlled substances. With the prosecution of corporate criminals at a 20 year low in America, amidst a major wave of corporate crime — crime in the suites instead of crime in the streets — it is a notable development during the despair-ridden opioid crisis.

Much of this opioid crisis is attributable to the patent monopolies on prescription drugs, which enable American pharmaceutical companies to charge ridiculously high prices. A patent monopoly on a drug legally prevents competitors from producing or selling that drug, and the lack of governmental negotiation to rein in prices allows pharmaceutical companies to charge to a large extent whatever they want. Purdue Pharma would have had nowhere near as much incentive to market Oxycontin if it was sold at generic prices, but since they had a tremendous incentive, many communities have suffered as a result of the addictive drug.

The case of patent monopolies on prescription drugs such as Oxycontin is another example of the government using its power in a way that’s overall against the public interest. The government is not necessarily an evil or inefficient entity, as people sometimes believe or that propaganda might suggest. There is plenty of evidence that structured properly, the government can be a force for the common good — government-run programs such as Medicare and Social Security remain popular because they work well. The administrative overhead on Medicare is about 2 percent, while the administrative overhead on corporate health insurance is often 12 to 20 percent.

It is beneficial for much of the corporate sector if the public automatically despises the government and doesn’t pressure for public interest control of it. Unlike the corporate sector, where the boards of directors (those who run the corporations) are largely determined by top management, in a undemocratic process where one share of the corporation equates to one vote in the board of directors election, there is a built-in democratic process in the government. This built-in process of one person (rather than one share) and one vote may currently be quite dysfunctional, but it is a mechanism of democratic values nonetheless, and one of the things to be strengthened for an improved society.

About every year at least, the Bulletin of Atomic Scientists meets to discuss the most significant threats to human societies, and if necessary they adjust their famous Doomsday Clock. The Doomsday Clock measures the probability of major catastrophe by the minute hand’s closeness to midnight, and it is now 2 minutes to midnight, the closest it has ever been since 1953, when America and Russia detonated thermonuclear weapons. In 2019, the Bulletin of Atomic Scientists added a third major problem to climate change and the potential of nuclear war — the breakdown of and threats to democracy. This is significant because lively and functioning democracy offers perhaps the only way to solve many of the world’s most serious problems.

Activism that is deservedly popular (and therefore democracy-based, or majority supported) is very often how things change for the better, from worker’s rights to new government programs and movements producing a beneficial change in public consciousness. Instead of only examining problems, it’s necessary to remember that to achieve progress.

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2018 Midterm Elections in the United States

The 2018 midterms will have significant impacts on not only America but the world — see the Republicans being a more authoritarian example for other countries and being worse on issues such as climate change.

Usually the elections for federal and state offices that take place between the US presidential elections get considerably less attention than those taking place in the same year as the presidential race. This is not likely to be true in 2018.

As is always the case, the entire House of Representatives will be up for reelection. There will be elections for a third of the Senate (actually 35 of 100 senators because of a resignation) and state governors races in 36 of the 50 states, including nine of the ten largest. In addition, most state legislatures will be up for grabs in the election as well.

The main reason this election is so important is that Donald Trump has demonstrated an unprecedented level of disrespect for basic norms of democracy and the rule of law. Republicans in Congress, with almost no exceptions, have been willing to go along in his abuses of power. If the Republicans manage to maintain control of both houses of Congress, there will be little ability to block Trump’s attack on the basic institutions of democracy.

[…]

Trump and the Republican party are also looking for ways to disenfranchise voters to maintain their grip on power. It is important to recognize that the Republicans depend on being able to rule as a minority.

In 2016 Trump lost the nationwide popular vote by almost 3 million votes, or 2.1 percentage points. He nonetheless won the election because the presidential race is decided by the Electoral College in which most states the winner takes all. While electoral votes are partially proportionate to population (each state gets at least three votes regardless of its size), Trump won several large states by tiny margins, allowing him to get a majority in the Electoral College.

There is a similar story in the US Senate. Each state has two senators, which means that Wyoming, with less than 600,000 people, has the same number of senators as California with almost 40 million. With Republicans winning most of the small states’ senators, they are able to have a majority of the Senate even when they get much less than half of the vote for senators.

The House of Representatives awards seats to states based on the population. But because the Republicans controlled the last redistricting processes following the 2010 Census, they drew districts in a way that will require the Democrats to win the overall vote by 6 to 8 percentage points to retake the House. With a new Census in 2020, the governors who are elected this year will preside over the redistricting that takes place in 2021. This will be an opportunity for either party to lock in favorable districts for a decade.

There is also a basic issue of whether people are able to vote. Republicans have pursued a variety of measures intended to make it difficult for minorities to vote. In prior years, courts have overruled many of these measures since the right to vote is a fundamental right guaranteed by the constitution. In more recent years, Republican-appointed judges have approved many blatant acts of disenfranchisement. If they can maintain control of both houses of Congress, Republicans at both the federal and state level are likely to move more aggressively in implementing obstacles to minority voting.

For these reasons, there any many basic issues about democracy that will be at stake with the outcome of the 2018 election. While the US government has a long-standing democratic tradition and respect for the rule of law, these are very much up for grabs this year. We have a president and a major political party that care about neither.

Democratic Socialism in the Era of Ocasio-Cortez and Sen. Sanders

Democratic socialism has been more in the news lately since the most popular American politician — Senator Bernie Sanders — and a rising star in the progressive movement, Alexandria Ocasio-Cortez (who won an upset victory in a primary vs. an incumbent New York House politician) both profess to be democratic socialists. With this being the case, it is worth examining what the ideology represents and how it’s being used.

Democratic socialism (at least by what it should mean by definition) at its core means the democratic control over the means of production. This would mean that instead of institutions such as factories, banks, and media companies being controlled primarily by a small group of (often wealthy) people pretty much functioning outside of democratic controls, there would be much more stakes of shared ownership among the public. Under such an ideology, many more people would, for example, have the authority to join together and hire and fire their managers instead of the other way around.

When Ocasio-Cortez and Sanders mention democratic socialism though, they don’t usually say much about democratizing the distribution and organization of production. In truth, what they’re usually referring to is what’s called social democracy — letting the means of production still be controlled pretty undemocratically in capitalistic fashion, but at least in a way that also includes significant government intervention benefits for the general public. This includes a national healthcare system (which all OECD countries besides the U.S. and Mexico have), decently high taxes on rich people, educational costs being covered by the government, and a variety of other social programs such as paid maternity leave.

In the United States, subscribing to social democracy is often regarded as being pretty far left on the political spectrum. This is really just a reflection of the immense rightward shift of U.S. politics since the 1970s though. For one example, Republican president Dwight D. Eisenhower of the 1950s was a strong supporter of both unions and the New Deal social welfare programs implemented under president Franklin Roosevelt. Eisenhower said that those who didn’t accept the New Deal programs didn’t belong in the political system, but not accepting those programs has now become the norm among Republicans and among many Democrats as well. That Eisenhower would today be regarded as clearly on the left side of the political spectrum truly says a lot about American political discourse.

In terms of socialism, older Americans tend to associate socialism with the Soviet Union. The problem with that is that the Soviet Union practiced state socialism — there wasn’t any democratic distribution of resources there. The Soviet Union was in large part a dungeon for a lot of its people that provided some minimum subsistence benefits to let many of them survive.

And it should be noted that the achievements of the Soviet Union were when it was able to use the power of the state to direct people and resources to useful developmental ends, such as its space program. In the 20th century, it grew quickly from a largely poor and illiterate society that had been invaded multiple times to a world superpower for a few decades, and whatever criticisms of the USSR, there is something to be learned there. It’s a similar parallel to why China has grown and continues to grow as fast as it does — a fairly efficient use of resources (evidently quite powerful), even if the conditions that’s done under happen to be cruel.

The Soviet Union replaced the employers that hold so much power in capitalism with state officials. This didn’t change the fundamental dynamic of workers being quite disempowered, and in many ways made the situation in the Soviet Union worse than it would have been under capitalism. Democratic socialism seeks to absolve the everlasting struggle between the employer and employee, those who own and those who don’t, and in truth the ideology has never been tried much at scale. There are reasons to think that it would be a better way to organize society, such as research showing that today’s employees become more productive when given more autonomy, but there isn’t enough data to know for sure. The experiment of having a large worker cooperative sector of the economy could be run, just like the massive experiments of tax cuts for the rich have been run multiple times, although that’s obviously rather dangerous — it may actually provide a significant benefit to the lives of average working people.

It should also be noted how puzzled some people in the media are by young Americans’ embrace of socialism over capitalism. A now well-known Harvard study that was conducted in 2016 — and was redone once since the ones commissioning it were stunned at the results — showed that 51 percent of young Americans rejected capitalism and 33 percent preferred socialism.

This isn’t really an acceptance of socialism — it’s more of a rejection of capitalism. Young people in general have a vague awareness that the system isn’t working real well for them. Letting the money speak, real wages (wages with respect to inflation) in the United States have been almost entirely stagnant for decades. The only times most workers have seen real wage gains since the late 1970s have been in the later 1990s and over some of the last several years. Both of these periods had tight labor markets from the Fed allowing interest rates to remain low. In the 1990s it was because Alan Greenspan was a somewhat atypical economist and, for some reason, bucked the mainstream of his profession by allowing interest rates to remain low — in other words, something akin to dumb luck. In recent years it was because the Great Recession forced the Fed to drop interest rates to zero and near zero in order to provide a stimulus to the economy (in other words, a massive disaster had to happen).

Additionally, it’s probably pretty irrational to regard capitalism as the only or most viable economic system. It’s just an economic system, but those who reject it are often deemed heretics. In America there are plenty of debates, but for a few generations at least, the debate over the fundamental distribution of resources has been to a significant degree left out.

One view on that though is that this debate between capitalism and a different economic system isn’t really necessary or prudent, and that it would be better to have the debate over how markets are structured and to advocate for structuring them in ways that don’t redistribute income upward. Good Keynesian economists that primarily represent the working class may tend to advocate this view. That may admittedly be a better way to help the modern working class, but will there nonetheless be a massive cost to future generations if capitalism is maintained?

Flawed NYT Article on Inequality

I definitely don’t agree with all of the analysis in this NYT article, but there are some interesting takeaways from it. The article only mentions political democracy and completely avoids any mention of economic democracy. This is an important point, as a strong political democracy requires a strong economic democracy. I know how counter that truth runs to the standard doctrine of the corporate propaganda system, but it needs to be said.

It’s also particularly jarring that the article assumes the U.S. is a democracy — in reality the country has dysfunctional democratic structures (see gerrymandering, the typical top-down structure of corporations, and voter suppression) and is better described as a plutocracy.

Most recently, Thomas Piketty, a French economist who is the author of “Capital in the Twenty-First Century,” has come up with a straightforward answer: Traditional parties of the left no longer represent the working and lower middle classes.

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There are those who would like to accept inequality and focus exclusively on issues like gender equality and anti-racism. I would never minimize the importance of combating gender inequality or racism/nativism, but if that means ignoring the policies that have led to the enormous inequality we now see, that is not a serious progressive agenda.

Mr. Boston — The Formerly Secretive Role of Gar Alperovitz in the Release of the Pentagon Papers

Democracy Now’s recent interview with Gar Alperovitz is important and well-done. Many more people should know about what’s being discussed here, due to both current threats to humanity and the values needed for a much more sustainable future.

Audio: 

For more than 40 years, Alperovitz kept a close secret. In 1971, he clandestinely helped Ellsberg distribute sections of the Pentagon Papers to 19 newspapers across the country, at a time when the Nixon administration was trying to block publication. Alperovitz would go on to become a well-known historian, professor and political economist, but he kept his role in the Pentagon Papers leak a secret, until this week, when he spoke to The New Yorker magazine. The identities of who else worked with Gar Alperovitz to aid Ellsberg remains a secret. Dan Ellsberg told The New Yorker the secret role this group played was so crucial in releasing the Pentagon Papers he gave them a code name: “The Lavender Hill Mob.” Alperovitz went by the alias “Mr. Boston.” Ellsberg told The New Yorker, quote, “Gar took care of all the cloak-and-dagger stuff.”

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GAR ALPEROVITZ: Well, two things, I think, brought me to this judgment it was time to actually talk about this. One, it came back into the news because of the big movie, The Post, which describes some of this, which had been out of the news and out of consciousness for a long, long time. So, it offered an opportunity to think about this subject in a very powerful way, because lots of folks have seen that movie, and it raised the subject. And secondly—so the context was there.

And secondly, the dangers of this administration. Particularly, I’ve written about nuclear weapons a great deal. The dangers of this administration, I think it’s time for people to really think through what they can do, however small, however they want, to find a way, to actually find, personally, to do something to try to begin to build up a more democratic option and a way to avoid some of the real dangers. The possibility of nuclear war in Korea is a real possibility. There has been nuclear war in Asia, obviously: the bombing of Hiroshima and Nagasaki, which is an area that I’ve written a great deal about. People, I think, need to think seriously about where they—what they can do to make for a more peaceful and a world that doesn’t repeat those mistakes.

AMY GOODMAN: The issue of nuclear war, again, raised once again by President Trump, you know, talking about expanding the nuclear arsenal, in his State of the Union address this week, and reportedly saying to his chiefs of—to the Joint Chiefs of Staff, “If we have nuclear weapons, why don’t we use them?” You are a longtime historian, have written eloquently about the bombing of Hiroshima and Nagasaki. Can you talk about this? Why not use them?

GAR ALPEROVITZ: Well, they are—the weapons we have today are so many times more powerful than anything was used in World War II at Hiroshima and Nagasaki—and, I would mention, at that point, against the will of the Joint Chiefs of Staff, all of whom came out after the war, all the top military leaders, with the one exception, publicly, after the war, saying the bombing was totally unnecessary in Hiroshima. We are now in a case where nuclear weapons are many, many, many times more powerful, and many, many thousands of them, and very, very dangerous because they are so easily launched.

And my hope is, both a public action will begin to build up, understanding that this is a threshold that should not be crossed, and that I hope, actually, some people within the government, just as during World War II the Joint Chiefs tried to stop that action, which was unnecessary and they knew was unnecessary, I would hope people begin to think, “What could we do?” What could they can do personally? And I think that’s an individual decision for everyone to make, what kind of things they can do in the circumstances they face. But I think the trillion dollars that’s now about to be spent to upgrade and increase the nuclear weapon supply—a trillion dollars—we are going into a whole new phase and with a government that is, so far, irresponsible in so many other ways, that this is a very dangerous period of American history.

AMY GOODMAN: You write a lot about changing the system, a lot about economics. Has that also played a role, given the passage of the tax law? You discuss the issue of inequality. We’re seeing the greatest growth of inequality in this country than any time in history.

GAR ALPEROVITZ: I don’t think we’re going to change what we do in foreign policy in a fundamental way, until we change what we do in the system. And I think we’re at a place where we’re facing what I would call a slow-boiling systemic crisis—traditional corporate capitalism producing great inequality, ecological destruction, increasing tensions in racial matters and gender matters, violence abroad. That process, the danger of slipping over into some form of formal or informal repression is very real. On the other hand, if the corporate capitalist system fails, the state socialist system also fails.

The basis of a new society and a new direction is really thinking through what can be a genuinely community-sustaining, peaceful vision of what the next system is. I’m a historian and political economist, and I see it as: How do we build the next two to three decades? Maybe taking off from what Bernie has shown us, taking off from what activists in the black community and the gay community and the feminist movement, the environmental community. There is a building-up process that has to go well beyond the politics of today towards a transformative vision that is much different than the vision that now supports the nuclear weapons and the military outreach. I think we’re in that period, and it could be a long period. But the lesson of all this, for me, is that we need to go both deeper and more boldly and begin building right from the bottom up, with a view to understanding—let me say it carefully: Systems change all the time in history. I think we have the opportunity to establish the conditions, if we’re serious, of laying down the foundations for a transformation. I didn’t say change the system tomorrow, I said building the basis of a transformation.

AMY GOODMAN: Gar, as we wrap up, are you proud of what you did in helping Dan Ellsberg get the Pentagon Papers out?

GAR ALPEROVITZ: “Proud” is a funny word. I did what I thought was necessary, what was important to do. I don’t think of it as pride, but I’m glad I did it.

AMY GOODMAN: I want to thank you for being with us. Gar Alperovitz, historian, political economist, revealed this week he secretly helped Dan Ellsberg leak the Pentagon Papers. Gar Alperovitz is author, most recently, of Principles of a Pluralist Commonwealth and co-founder of the Democracy Collaborative and co-chair of its Next System Project.

Harvard Study Shows Why Big Telecoms Are Petrified by Community ISPs

Monopoly pricing leads to monopoly profits, and that’s the reason for big ISPs attempting to limit competition. If democracy is such an important value, then why shouldn’t ISPs — which control access to the key infrastructure known as the Internet — be run democratically by regional communities?

A new study out of Harvard once again makes it clear why incumbent ISPs like Comcast, Verizon and AT&T are so terrified by the idea of communities building their own broadband networks.

According to the new study by the Berkman Klein Center for Internet and Society at Harvard University, community-owned broadband networks provide consumers with significantly lower rates than their private-sector counterparts.

[…]

A lack of competition in countless US broadband markets consistently contributes to not only high prices and slower speeds, but some of the worst customer service ratings in any industry in America. This lack of competition is another reason why ISPs can get away with implementing punitive and arbitrary usage caps and overage fees.

Harvard’s latest study found that community-owned broadband networks are not only consistently cheaper than traditional private networks, but pricing for broadband service also tends to be notably more transparent, more consistent, and less confusing.

[…]

ISPs also have a nasty habit of trying to make direct price comparisons impossible as well, lest the public realize what a profound impact the lack of competition has on broadband pricing. It’s a major reason why the FCC spent $300 million in taxpayer dollars on a national broadband map that completely omits pricing data at incumbent ISP request.

“Language in the website “terms of service” (TOS) of some private ISPs strongly inhibits research on pricing,” noted the Harvard study. “The TOS for AT&T, Verizon, and Time Warner Cable (now owned by Charter), were particularly strong in deterring such efforts; as a result, we did not record data from these three companies.”

[…]

To retain this status quo, ISPs have spent decades writing and buying state laws that prohibit towns and cities from exploring community owned and operated broadband networks. More than twenty-one states have passed such laws, which not only hamstring municipal broadband providers, but often ban towns and cities from striking public/private partnerships.

It’s also why ISPs like Comcast pay countless think tankers, academics, consultants, and other policy voices to endlessly demonize community-run broadband networks as an automatic taxpayer boondoggles, ignoring the countless areas where such networks (like in Chattanooga) have dramatically benefited the local community.

[…]

ISPs like Comcast could nip this movement in the bud by simply offering cheaper, better service. Instead, they’ve decided to buy protectionist laws, spread disinformation about how these networks operate, and sue local communities for simply trying to find creative solutions to the broadband monopoly logjam.

As we’ve noted previously, community owned and operated broadband networks are a fantastic alternative to the broken status quo. For those outraged by the Trump administration’s attempt to kill net neutrality (and soon all remaining oversight of the nation’s entrenched monopolies) building or supporting local broadband networks is one practical avenue for retaliation.

Another Instance Lacking Economic Democracy, Israeli Corporation Teva Edition

Israel, which (as with other governments) is supposed to derive the legitimacy of its power by operating in the public interest, granted Teva about $6 billion in tax breaks and subsidies over the last decade. Now Teva’s board of directors — undemocratically elected by its major shareholders — has fired 14,000 workers because the corporation is having difficulty sustaining the costs of its poor managerial decisions. A small number of rich people on a board of directors, making key decisions that affects many thousands of people, is thus the antithesis of economic democracy.

The first homegrown, global success story and one of Israel’s largest employers, Teva is both a source of pride and a symbol of the country’s financial ambitions. Its place in the Israeli public’s imagination is similar to the one General Motors, in its heyday, occupied in America — but in a nation with a population about the size of New York City’s. The company’s shares are owned by so many pension funds that it is known informally as the people’s stock.

Today, many of those people are furious. Management missteps and tectonic shifts in the pharmaceutical business have battered Teva, which faces declining prices for generic drugs and the loss of a patent on a major branded drug. More than $20 billion has been shorn from the company’s market capitalization since 2017 began, cutting Teva’s value roughly in half.

[…]

About the only positive reaction to this news came from investors, who sent Teva shares up about 14 percent. Prime Minister Benjamin Netanyahu said in a statement that he would urge the company to “retain its Israeli identity,” words that seemed to mollify no one.

Three days after Teva’s announcement, some workers burned tires outside a Teva plant while others tied up rush-hour traffic with street protests. It went beyond workers, with people across the country taking part in a half-day strike that closed banks, government institutions, the stock exchange and Ben-Gurion International Airport near Tel Aviv.

Teva employees continued to protest for days. “There is uncertainty, fear,” said Lital Nahum, a 25-year-old lab worker who was sitting on a wall outside a Teva plant in Jerusalem last week, as two dozen other striking workers milled around. “Nobody thought it would come to this.”

With domestic plants targeted for closing, many people argued that Teva factories in India and Ireland should be closed before any in Israel. Mr. Netanyahu agreed and said that the government would use “various means at our disposal” to urge the company to keep its plants in Jerusalem open.

Mr. Netanyahu did not specify what those means might be, but a guilt trip appeared to be his only weapon. Teva has enjoyed tax breaks and subsidies worth nearly $6 billion over the last decade.