Customer Reviews

The Global Class War : How America's Bipartisan Elite Lost Our Future - and What It Will Take to Win it Back

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According to Jeff Faux, erstwhile president of the Economic Policy Institute in Washington DC, with the enfeebled nation-state and the absence of world government, the 2,000 plus people who manage and own the worlds largest multinational corporations meet every year at the World Economic Forum in Davos Switzerland to set the agenda for the global economy. Even though the event includes political leaders, academics, journalists, and an occasional movie star, they are mere window dressing accompanying the real movers and shakers. This elite is what Faux calls the "Party of Davos." There is no countervailing party other than the World Social Forum which celebrates the likes of Hugo Chavez and Fidel Castro, but they are of no consequence in the real order of things.

The Party of Davos is primarily the party of international global investors, who do their best to promote globalization and free trade. Elites around the world have bought into it, including the leadership of both the Democratic and Rebublican parties in the US, with the expectation that globalization would raise all economic boats, or so they would have us believe. However, this has not happened.

Faux correctly points out that prior to the age of globalization the US economy was more or less self-contained, and capital and labor were forced to deal with each other, thereby creating a social contract from which all parties benefited. What was once good for GM was also good for America; now it is only good for GM. (This may not be a good example since even the global investor is not happy with GM.) The point being that GM can now find cheaper labor and lower environmental standards in other countries.

Faux argues persuasively that globalization went astray with the Nafta agreement, which was supposed to protect workers and the environment in the US, Mexico, and Canada. Instead, thanks to the Clinton administration, multinational corporations were given a free hand in overriding those very protections. It's almost as if Ross Perot's "giant sucking sound" pulling high-wage jobs out of the US has been realized. Moreover, ten years and a WTO later, that giant sucking sound is pulling those jobs out of the entire Nafta block and ending up in China and India. The result is that workers' wages and middle-class living standards from all three Nafta countries have declined under "free trade".

Again Faux reminds us that rich countries have poor people and poor countries have rich people. The rich or the investor class in all countries have prospered whereas the middle-class and the poor have seen their fortunes decline.

To compound this problem, the US trade deficit was $726 billion last year and there is no evidence that it will decline in the future. Our manufacturing base is being hollowed out and the so-called knowledge economy is being outsourced. The primary job creation since the year 2000 has been in healthcare, government, finace, and the low-wage service sector. If this trend continues, it will become impossible to export our way out of this deficit, unless there is a significant devaluation of the dollar, which will inevitably lower our standard of living. This is going to happen no matter what policy is adopted in the near future, it is only a question of how much of a less prosperous future we will have.

Pat Buchanan in a recent article entitled "Our Hollow Prosperity" makes the same argument as Faux and indeed cites statistics from the Economic Policy Institute. Buchanan does not couch the argument in terms of class struggle (my main quibble with Faux's thesis), but he does believe when corporations are given the oppurtunity to find cheaper labor abroad they will do so and that the current free trade policy is undermining our prosperity. With the left and the right finding common cause against the corporate and political elite, there should be a significant political realignment when the next economic downturn hits.

What does Faux recommend? He is calling for a new global - or at least a regional, Nafta-wide - social contract. It looks something like managed trade. Let's face it, the economies that are running a surplus with us are practising managed trade. We should start bargaining for greater access to their markets and place a higher bar of entry to ours. Faux is not advocating protectionism, just smart policy instead of none at all.

We can now see the trajectory of globalization: Thomas Friedman proclaimed that it created a global and level playing field in the job market for workers heretofore excluded; Clyde Prestowitz proclaimed that the playing field was tilted against the industrialized world because our high wage requirements put us at a disadvantage; now Jeff Faux is saying that all workers are being sold short and that it's time to create a global social contract. Who says there is no such thing as progress?

The title appears borrowed from Sam Marcy's original work in 1979 on "The Global Class War and the Destiny of American Labor," but then, no one wanted to listen in the 1970's, when I did my first master's degree, to the three major themes in the political science literature:

1) Limits to Growth and need for Ecological Economics (Club of Rome, Herman Daly);

2) Global Reach of Multinational Corporations and the Home-Host Country Issues and Threats to Domestic Labor and Social Welfare (Barnett)

3) Need for World Government to address global issues (Falk).

This book is valuable for its one main point reiterated and documented over and over again: the American elite has joined with other elites world-wide to reach accommodations that favor the investors and the ruling elites over the individuals that are employees.

If I had not also read William Greider's The Soul of Capitalism: Opening Paths to a Moral Economy as well as John Perkins, Confessions of an Economic Hit Man and (over two decades ago), Lionel Tiger, Manufacture of Evil: Ethics, Evolution, and the Industrial System I might have seen this book in a different light. In the larger context of the 700+ books I have reviewed at Amazon, this book sums up a key factor that the public must consider when going to elect its leaders over the next few years.

As the author documents and discusses, the combination of neoliberalism and neo-conservatism has led to government being in the service of corporations and the wealthy, rather than the public and especially the working public. The author suggests, citing another author, that the working class is 62% of America, the middle class 36%, and the ruling class 2%. He also notes that America is no longer a mobile society, with 77% of the people "stuck" in their parent's rut, and with wages now BACK to where they were in the 1970's--in other words, no real gains in quality of life or purchasing power across the land.

The author spends a great deal of time on NAFTA, and his views are all negative. He is passionate on the topic of Mexico being a socio-economic bomb waiting to explode, and on how NAFTA and the deliberate tolerance of illegal immigration have essentially served as a pressure value, where the US imports poverty from Mexico in order to keep it from a worse explosion.

The author is quite provocative when he examines the "rescue" of Mexico by Secretary of the Treasury Rubin. He "follows the money" and discovers that the U.S. taxpayer did not bail out Mexico per se, but rather Goldman Sachs and all the other investors in Mexico, investors who were supposed to evaluate risk and take risk and accept the consequences, but instead used their Goldman Sachs brother in arms to bail them out at taxpayer expense. Today of course President Bush has just appointed another Goldman Sachs leader to be Secretary of the Treasury (after the more honest Paul O'Neil resigned when he discovered that Vice President Dick Cheney was making all the policies without regard to the Cabinet process (see my review of The Price of Loyalty: George W. Bush, the White House, and the Education of Paul O'Neill)

The author is compelling in discussing how the Reagan Revolution broke the backs of the labor unions and also broke up the postwar social safety nets. The author discusses how there is no corporate mind-set that puts the home country, the USA, first. He discusses at length how we are coming off decades during which multinational corporations, aided and abetted by their class collaborators in government and the media, have essentially broken the social contracts with each country's public, and disconnected their global investments from any social benefit for labor.

The author is very illuminating when he points out that it is NOT China that is flooding the US with cheap goods, but rather Wal-Mart and Wall Street, investing US dollars in China to leverage low-cost Chinese labor while off-shoring jobs and driving both salaries and quality down across the board within the USA where Wal-Mart has been proven to destroy small businesses for 50-100 miles around any one of its main stores (see my review of both the DVD Wal-Mart: The High Cost of Low Price and the book The Wal-Mart Effect: How the World's Most Powerful Company Really Works--and How It's Transforming the American Economy).

The author is an optimist and an idealist, and I will end my review with a quote that I hope a future enlightened President will support. The author says on page 246:

"To this end, a conference, or congress, of North American civil society, state and local officials and representatives of labor, and small businesses, should be held every year. One of its functions would be to do a public review of the state of continental integration and to discuss, debate, and make proposals for the future."

I am reminded of Falk's genius in knowing in the 1970's that we would one day need global council for both religions and peoples. Government has failed to be just or to represent the public. This book comes at a good time. In America, November 2006 is a necessary pre-requisite to electoral reform and getting an honest wise President and a Coalition Cabinet in 2008. To do that, enough people have to vote so as to defeat the extremist Republican skill at stealing elections that are close. It has to be a landslide.

I venture to say tha there is a very tight connection between Congress being broken and corrupt, and the global class war. Labor unions and the middle class have been rolled back, standards and protective regulations have been rolled back, and on every front, "We the People" have been abused by those we have entrusted.

EDIT of 10 Dec 07: As I write this, Lou Dobbs on CNN is urging every American to register as an Independent, and Jim Turner, #2 Naderite, is telling me he hopes 100 million Americans will come back to vote the two broken parties out of office. Amen!

Jeff Faux's superb book helped me understand better why the political, corporate, and media elites love globalization while the rest of us feel so uncertain about our economic futures. He argues very effectively that there is a "Party of Davos"--an alliance of the top business leaders and government officials from throughout the world.
These elites basically set the rules for global commerce to benefit themselves, rather than the worker citizens of their various countries. Thus, deals like NAFTA have actually worsened the economic lives of the majority of workers in the U.S., Canada, and Mexico, while the elites have prospered from them. Faux is an excellent writer who cuts through the jargon of economists to describe cogently the need for a global "social contract" to force some of the benefits of globalization to go to working families. He urges a focus on North America as a starting point for a new global social contract.
I came away from "Global Class War" both optimistic that the rules of globalization can be shifted so that more people benefit, but also a little frightened that the interests of the top Republican AND Democrats as well as the corporate class have become so de-coupled from those of middle-class America. If you read Tom Friedman's "World is Flat" and felt uneasy about how great Globalization 3.0 will be, then read Jeff Faux and you'll understand why. In the debate over the jungle of globalization, Faux is the lion and Friedman the gazelle.

Ok, I admit it. I supported Ronald Reagan; the Democrats were devoid of ideas, he had some; his prescription of lower taxes and unbridled capitalism seemed at the time to have more pluses than minuses. And, maybe, just maybe, ol' Dutch would have had the good sense to know when enough was enough and reversed course.

Not so the Bushes, Clinton, and the politicians of the 1990s and the 2000s. So now we've got this combine of rich people -- nationality and party affiliation unimportant -- running the United States and the world for their own benefit. They get richer every year; and most people get poorer. They duped naive youngsters like Thomas Friedman of The New York Times into thinking that "globalization" is going to have widespread benefits. It's having benefits all right, but they're all going to the rich, increasingly a heriditary class.

Faux has writtten a warning about the way things are going in the world, focusing on NAFTA, free trade, and the relationships among Mexico, Canada, and the United States. Faux's thesis is that a global elite runs things for its own benefit. With every year that passes it's harder to argue against him. I won't give Faux's book my top rating, however, because his prescriptions for solving the problem are a bit wimpy. He looks to the EU as an example of a better way. Excuse me! The gnomes of Brussels as overlords are little, if any, better than Bill Gates. But he gets it right that we need a big step away from free trade -- which benefits the lowest wage countries, e.g. China, and the big corporations -- and a focus on the social/economic integration of North America with emphasis on people, not profits. I have little faith this will occur anytime soon, but at least people like Faux are thinking about it.

Faux needs to hire a smart middle school student to do his statistical work. On page 64, he says that America's ruling class consists of 50,000 persons, 1.7 percent of Americans. According to my calculation, 50,000 is .017 percent of the U.S. population. He's off by a factor of 100.

Smallchief

Bipartisan debate can blind us to the deeper current: as this book makes clear from the record, the elite in both American political parties, 'left'(??) and right, have fairly well sold us down the river in the sweepstakes of globalization. The author starts with the Nafta agreement and the way it was packaged to succeed,its real implications deliberately hyped over. To this day, 'slick Willy', the one and only, gets kudos, while a carefal perusal of the record shows that he exhibits the sellout process quite exactly.
At some point the music going to stop, and the swindle will be stand out for what it is in terms of long term trends of rising inequality and the shrinking middle class.

From a George Bush perspective, I read. Hence, I must be a Revolutionary. But for me reading is essentail. In Rafael's book, "Scaramouche", the establishment games the system by dueling the people's representatives with their skillfully commissioned swords. They literally kill the people's will. Today's fait accomplis are the skillfully commissioned penned instruments called NAFTA and WTO. The perpetrators behind these instruments were a political crew of bloodsuckers. On the American side they included: Robert Rubin, Bill Clinton, Alan Greenspan, Lawrence Summers, Al Gore and Henry Kissinger. These penned agreements were inserted with poison pills designed to adversely effect constitutiions throughout the world, including ours. But you'll never hear a discouraging word about them from the corporate mainsteam news. Get the REAL down and dirty of globalization and read "THE Global Class War". Read it and weep... for those you had placed your trust in, and to the republic they signed off on. Learn to distinguish between the interests of stateless transnationals and we the people whose economic fate is bounded by the nation. The poor class has already lost what little they had. Now the middle class is in the cross hairs and slowly being squeezed out. Unfortunately, they have taken us all aboard their hellbound corporate express called the bottom line. A must read for those who want the truth.

I read the book with a scant eye on the economists view of events but by the end of the first chapter I had a different attitude. I found myself thinking that my children must know this material in order to make sound decisions about their future and the future of the country. Every newscaster should be required to read this book before interviewing propective candidates for President. It has enlightend me on the workings of our government.

Jeff Faux gives an insightful overview of the causes behind the gradual decline in living standards and income of not only the American Middle Class, but its counterpart in every other country of the world, orchestrated by the newly-globalized power-elite class. Intriguing and thought-provoking, the book looks at the big picture and brings into focus the reasons for some of the world-wide developments of which everyday people have become victims. It will give readers a whole new, and probably even more cynical take on political leaders of the present era.

Faux has done a really smashing job in bringing many threads into a coherent picture. The witless rightwing reviewer who invoked Hayek, von Mises, etc., wretched wonks of the right and economic Darwinists all, did not even know what book he was reviewing - typical of the right. The idea of transnational elites, who screw their own countrymen, is not new. The way in Faux ties this to comtemporary economics, social movements and politics, is different and far more perusuading than the usual "the aliens have taken over the elites" junk available today.

The US has built its own pit, and still does not know when to stop digging. The corporations built a massive megaphone for the Right and scared the Left to death with threats. Fear is the currency of the day in any discussion about the future. We have a bunch of sheep in the Congress and confused, frightened polity which is seized with the distractors which have been provided: religion, abortion, immigration, homosexuality, etc., all bunk.

Above all, Faux point about the diminishing corporate investment in the US, in research, development, education, health, etc. is a clear sign that the use of the transnationals if over, if but for the current era. They have tolerated the insanity of the Bush regime since they dont really care, even if the US creates illegal and immoral wars -- which again distract us while the corporations go on about their business. The US has been under assault by the corporations for some 40 or so years, and has now bought out the infrastructure designed to stop this massive taking of ecomonic and legal power.

The price of our stupidity and cupidity in taking our eye off the real wolf is our being devoured.

I suspect that many Americans might be intimidated by the title of this book. Americans are told not to think in terms of conflicting class interests; after all, most people are supposedly middle class. Critiques of the wealthy and powerful are seen as expressions of envy, or of antique Stalinist, hippy, or New Deal thinking. In my opinion Jeff Faux does us all a valuable service by trying to revive the debate about the political nature of our world and its implications for our current lives and for our future. His writing is energetic and fresh; this is no dull social science text! At the same time, he presents a lot of evidence in making his arguments, reflecting thorough and careful scholarship. This is no simple partisan account; for example, chapter seven on NAFTA presents is hard-hitting in its critique of the alleged benefits of free trade, but the reader gets the feeling that Faux is basing his analysis on what his data revealed about its complex impacts on the majority of Americans, Canadians, and Mexicans. Overall, whether you are in America or Armenia, you will be entertained and provoked by Faux's writing.