Category Archives: Radical Islam

The Fallujah ISIS Convoy Bombing That Never Happened

Here.

I normally can’t stand this guy, and a lot of his stuff is just flat out wrong, but this time I think he is right on it.

Remember when the media cheered about the bombing of an ISIS convoy heading out of Fallujah that killed 250 ISIS fighters?

Well, it never happened.

As with so many things about those wars over there, the whole thing is pretty much made up.

First of all, yes, there was a vehicle convoy heading out of Fallujah at the end of the battle.

Yes, it was bombed by Iraqi and apparently also US planes.

Yes, many of the vehicles were destroyed, and it looks like quite a few people were killed and injured, though a journey to the site soon after the attack found few bodies.

The problem is that it wasn’t a convoy of ISIS fighters heading out of Fallujah. It wasn’t even a convoy of military vehicles heading out of Fallujah.

Instead it was a convoy of civilian vehicles heading out of the city. And it was filled with civilians, not with ISIS fighters.

There are a few clues that this is indeed the case.

  1. Soon after the bombing of the convoy, a call went out to Baghdad of many dead and wounded civilians in the Fallujah area. Multiple plane and helicopter trips were flown to the area and, many of the wounded were medevacced out. The medevac process took several hours. The area where the civilians were killed and wounded was in the same general area as the convoy bombing.
  2. The reason that a trip to the scene of the attack showed few dead bodies was because the dead and wounded had been for the most part medevacced out or were flown out in body bags.
  3. ISIS seldom if ever travels in such huge convoys. There have been only two or three reports of ISIS convoys this long in the region since ISIS started fighting. They tend to travel in convoys that are much shorter and harder to detect. There is no way that ISIS would lead a huge convoy that size out of that city at the last minute. They are not that stupid.
  4. When the US first heard about the convoy they were asked whether to attack it, and Air Command decided not to attack the convoy because they felt that there were civilians present. Later they bombed it anyway after the Iraqis bombed it.
  5. A trip to the scene of the attack revealed many burned out vehicles. However almost all of them seemed to be civilian vehicles like sedans and minivans. ISIS doesn’t use vehicles like that on the battlefield.

Sorting it all out, it appears that this civilian convoy was not as innocent as it seemed. The best analysis of what happened is that this was a convoy of the families of the ISIS fighters who stayed in the city for most of the battle but finally left after the city fell. You could argue that the families of the fighters should be killed too, but I would not agree with you on that one.

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Tolerance for Male Homosexuality in the Muslim World

Afghanistan, Pakistan and the Gulf countries tolerate it well, and it is said to be epidemic in places like Kuwait and Saudi Arabia. There is also quite of bit of it in Syria, Egypt and Morocco.

It is not tolerated at all in Iran, Iraq, or Shia Lebanon, as Shia Islam is much more condemning of male homosexuality than Sunni Islam.

It is not that Sunni Islam necessarily is more tolerant of male homosexuality but that there is more variation in the Sunni world.

Palestine is not tolerant of male homosexuality at all, as gay men are frequently killed there. They are also commonly killed in Iraq and Iran. Syria used to be relatively more tolerant, but the parts of Syria taken over Islamists are very intolerant of gay men to the point where they are murdering them.

I have no data on male homosexuality in Algeria, Tunisia, Libya, Jordan or Sunni Lebanon.

I also know nothing about it in the Muslim Sahel, Horn of Africa and West Africa.

I know nothing about male homosexuality in Muslim Europe such as Bosnia and Albania, although I assume it is more tolerated there than elsewhere.

Turkey is a mixed bag, as there is said to be a lot of male homosexuality, but it is also officially not tolerated. Sort of a don’t ask, don’t tell thing.

I know nothing of male homosexuality in the Caucasus, Muslim Russia, the Stans, India and Xinjiang.

I do not know what it was like before, but a lot of gay men are being murdered now in Bangladesh. I think there have been 30-40 such murders in the past couple of years. Gay rights advocates rather than gay men in general have been targeted.

I also know nothing about male homosexuality in Muslim Thailand, Muslim Burma, Muslim Cambodia, Malaysia, Brunei, Indonesia and the Southern Philippines. Male homosexuality is pretty well tolerated in Thailand and the Philippines, but I am not sure how ok it is in the Muslim parts of those nations.

Admittedly I am not the best person to ask about the situation for male homosexuality and gay men in the Muslim World.

Any further information would be interesting.

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Watching ISIS Videos

That’s what I have been doing a lot of these days. I do not like the execution videos, and I have seen enough executions anyway.

But there are a lot of really cool combat videos, and those are really cool to look at. Basically firefights with automatic weapons, RPG’s, machine guns, technical vehicles with guns, various types of mortars, rockets, and antiaircraft guns. There is a fair amount of night fighting, which is a trip.

It’s just guys shooting at each other and blowing stuff up, so you hardly see any gore in the battle videos. However, at the end, sometimes they go to the position that they overran, and among all of the other things present at the camp there are typically the dead bodies of some of the folks that ISIS is fighting. They also have really cool music in the background. There are interviews with ISIS fighters, but I have no idea what they are saying.

The worst ISIS of all seem to be in Iraq. They look like a bunch of very, very pissed off guys. Boy are they mad!

The one thing that shines right through their rage and hatred is one word…revenge. ISIS in Iraq seems to be out for revenge. For what I am not sure, but 30% of ISIS in Iraq is former Iraqi military. I assume they are still angry that their country and leader was taken away from them in a US invasion and conquest whereby afterwards, an Iranian puppet regime was put in in place. The Iraqi Army was transformed from a radical Arab nationalist and pro-Sunni organization into a mostly Shia and objectively anti-Shia force. The Shia militias which operate separately from the Iraqi Army are particularly despised.

I have heard that the many of the people in back of ISIS at the very top are Baath Party people and former Iraqi military. Obviously they are out for revenge for the last 13 years. They want paybacks, and paybacks are a bitch.

The ISIS in Syria and Afghanistan don’t seem to be as pissed off, but I have not watched a lot of their videos out of Syria.

There’s nothing to be worried about watching these videos. I am sure that hundreds of thousands if not millions of people watch at least some of those videos. I know that the site I found the videos on is a US site, and almost all of the commenters have a savage hatred of ISIS. So the idea that watching ISIS videos means you’re a terrorist is crap. I would say far more ISIS haters watch their videos than ISIS supporters.

Just for the record, I utterly hate these scumbuckets, and if it ever comes down to it, I will grab an automatic weapon myself and try to kill them.  I am very much afraid of death, but dying fighting for your homeland and lifestyle against these hellions would actually be worth it. I would rather die fighting them than live under their rule, let’s put it that way, ok?

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Blowback in Turkey

Here.

It is such a terrible thing to say, but they really did ask for that airport attack. If you play with matches, you might just get burned. Turkey was playing with fire, and it got burned.

One might wonder why ISIS would even attack Turkey in the first place. Although of course ISIS networks are still huge all across Turkey, the state has been carrying out some raids recently. Quite a few jihadis have arrested, some have been tried and a few have been convicted and sentenced. A number of others have been thrown out of the country.

The MSM says that Turkey has been fighting ISIS in Syria since last year, but that is not really true, and Turkish jets surely do not attack ISIS in Syria. However, Turkey does allow its airbases to be used by the US and especially the West to bomb ISIS in Syria.

And perhaps most importantly of all, Turkey just completed a major security cooperation deal with Israel. No sooner had the ink dried on that document, a mere eight hours later, ISIS unleashed its attackers, one from Chechnya, another from Kyrgyzstan and another from Uzbekistan. They had probably been in a safe house in Turkey for some time, waiting for instructions to set off the hit. With the Israeli peace deal, the order came down from ISIS headquarters in Raqqa to unleash to jihadis to punish Turkey for cooperating with the Israelis.

The area is swarming with US intelligence and Turkish intelligence is also good and pervasive. But neither US, Turkish nor Israeli intel nor were able to intercept the go- ahead. These ISIS guys are pretty evil, but they’re damn good. Give em some credit. ISIS has possibly become one of the most skilled and deadly terrorist groups in recent history.

A US intelligence official said about Turkey,

“The summer of our discontent has begun.”

Before the US idiotically invaded Iraq in its Nazi-like war of aggression and conquest, the Arab League presciently warned,

You are about to unleash the gates of Hell.

Arabs are not stupid. They know their people better than we do. After the US conquered Baghdad, Robert Fisk said,

A modern Western Christian country has just conquered one of the most famous and powerful cities in the Arab Islamic World. This is a breathtaking event, stunning on a world scale. This will set into motion some very powerful forces. We will not see the end of this in my lifetime.

Fisk knows the region as well as the Arab League does. Fisk is still alive, but so far he is right.

First the US played with matches by invading and conquering one of the most powerful and legendary cities in the Arab Islamic world. The US played with fire and it got burned.

Then Turkey played with matches by letting the Hellspawn created by that insane invasion set up camp in its country. Turkey played with fire too,. They not only got burned, but they set off a nasty brush fire that will be very hard to put out.

If you don’t want to get burned, don’t play with fire!

You are about to unleash the gates of Hell…

We will not see the end of this in my lifetime…

The summer of our discontent has begun…

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ISIS Attacks Christian Village in Lebanon

Eight ISIS suicide bombers attacked Qaa, a mostly Christian village on the Syrian border in Lebanon. Five were killed and 30 more were wounded. ISIS is attacking Lebanon because Hezbollah is sending forces to fight ISIS in Syria, but they probably also want to attack this village to kill Christians.

Photos are interesting. Show older Lebanese Christian women from the village carrying AK-47’s on patrol. They look pretty uncomfortable with those weapons. I assume most of the men are away. The women were told by Lebanese soldiers to go home. The soldiers said they would take care of patrolling the village. Lebanon is notorious for not having a very good army. Hezbollah’s forces are better than the Lebanese army, and they’re a non-state actor!

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Khameini Is Dead

Unconfirmed reports. He has has been very ill with cancer for a long time.

No Islamists are all that great, but they are what they are, and the Muslim religion is what it is. It’s never  going to be this groovy Western  human rights and democracy religion that we want it to be. It’s just not that kind of a religion and Muslim civilization is just not that kind of a civilization. Trying to force this human rights and democracy and globalized neoliberalism on the Muslims is, to overuse a metaphor, like trying to pound a square peg into a round hole. There’s another metaphor I like better. Stalin said that trying to force Communism on the Poles was like trying to put a saddle on a cow.

Let’s get real. Sure, most of the West hates Muslims. But which ones do we hate? We hate the Muslims who are being real Muslims and who are being true to their religion. The perfect Muslim country for the West is a secular country, but that right there goes against Islam, and most Muslims do not want to live in secular countries.

Islamism is just Islam.

Islamists are just Muslims.

If we hate Islamism and Islamists, then we simply hate Islam and Muslims. There’s no other way to slice this cake.

That said, Khameini was orders of magnitude better than Khomeini, the original ayatollah. The Iranians have made great strides towards moving in the direction of a more humanist Islamism. They have  the advantage of Shiism. Like Catholicism, Shiism sees Islam as a moving target to be continuously reinterpreted in accordance with the times. Sort of like the living Constitutionalists. The Vatican is much the same way. These high priests see themselves as the interpreters and re-interpreters of religion, and the Shia clergy and in fact very similar to the high priests of the Vatican.

Hardly anyone in the West can see Khameini as a good man. But for an Islamist, he was very good of kind. And that’s about all we can expect from this religion of low expectations.

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Regime Change in Libya: Follow the Money

Here.

I have always thought that all of these wars were all about the money.

I remember in the run-up to that stupid Gulf War in 1991, I was arguing with my mechanic.

“It’s all about the money!” I said. “And the oil!”

My mechanic winked at me. “They all are.”

I checked him. “All wars are all about money?”

He shrugged his shoulders cynically. “Of course they are.”

That’s pretty sickening, isn’t it? You guys wonder why we socialists hate capitalism. Maybe now you are starting to get it.

So the French went to war to:

  1. Stop Ghaddafi’s Gold Dinar project, which was a threat France’s franc, which is used as reserve currency of choice (fiat currency) in Africa.
  2. Obtain (steal) Libya’s oil.
  3. Assert French domination over the region (French imperialism)
  4. Gain support for Sarkozy domestically (Bill Clinton wag to dog move).
  5. Assert French military power (by menacing Africa via French imperialism).
  6. Prevent Ghaddafi from gaining influence in what the French see as Francophone Africa.

Though the French-proposed U.N. Security Council Resolution 1973 claimed the no-fly zone implemented over Libya was to protect civilians, an April 2011 email [archived here] sent to Hillary with the subject line “France’s client and Qaddafi’s gold” tells of less noble ambitions.

The email identifies French President Nicholas Sarkozy as leading the attack on Libya with five specific purposes in mind: to obtain Libyan oil, ensure French influence in the region, increase Sarkozy’s reputation domestically, assert French military power, and to prevent Gaddafi’s influence in what is considered “Francophone Africa.”

Most astounding is the lengthy section delineating the huge threat that Gaddafi’s gold and silver reserves, estimated at “143 tons of gold, and a similar amount in silver,” posed to the French franc (CFA) circulating as a prime African currency. In place of the noble sounding “Responsibility to Protect” (R2P) doctrine fed to the public, there is this “confidential” explanation of what was really driving the war [emphasis mine]:

This gold was accumulated prior to the current rebellion and was intended to be used to establish a pan-African currency based on the Libyan golden Dinar. This plan was designed to provide the Francophone African Countries with an alternative to the French franc (CFA).

(Source Comment: According to knowledgeable individuals this quantity of gold and silver is valued at more than $7 billion. French intelligence officers discovered this plan shortly after the current rebellion began, and this was one of the factors that influenced President Nicolas Sarkozy’s decision to commit France to the attack on Libya.)

Though this internal email aims to summarize the motivating factors driving France’s (and by implication NATO’s) intervention in Libya, it is interesting to note that saving civilian lives is conspicuously absent from the briefing.

Instead, the great fear reported is that Libya might lead North Africa into a high degree of economic independence with a new pan-African currency.

French intelligence “discovered” a Libyan initiative to freely compete with European currency through a local alternative, and this had to be subverted through military aggression.

British, French and Egyptian special forces were on the ground almost immediately after the protests started (just like in Syria) training the Libyan rebels, already packed with fighters from Al Qaeda, the Libyan Islamic Fighting Group (LIFG) – basically Libyan Al Qaeda – and other Salafist jihadis. US emails show that we knew full well that the Libyan rebels we were supporting and arming with a seemingly endless supply of small arms flowing across the Egyptian border had strong Al Qaeda links, but we kept supporting them and supplying them anyway.

The same intelligence email from Sydney Blumenthal also confirms what has become a well-known theme of Western supported insurgencies in the Middle East: the contradiction of special forces training militias that are simultaneously suspected of links to Al Qaeda.

Blumenthal relates that “an extremely sensitive source” confirmed that British, French, and Egyptian special operations units were training Libyan militants along the Egyptian-Libyan border, as well as in Benghazi suburbs.

While analysts have long speculated as to the “when and where” of Western ground troop presence in the Libyan War, this email serves as definitive proof that special forces were on the ground only within a month of the earliest protests which broke out in the middle to end of February 2011 in Benghazi.

By March 27 of what was commonly assumed a simple “popular uprising” external special operatives were already “overseeing the transfer of weapons and supplies to the rebels” including “a seemingly endless supply of AK47 assault rifles and ammunition.”

Yet only a few paragraphs after this admission, caution is voiced about the very militias these Western special forces were training because of concern that, “radical/terrorist groups such as the Libyan Fighting Groups and Al Qa’ida in the Islamic Maghreb (AQIM) are infiltrating the NLC and its military command.”

Of course, the war propaganda lies started up almost immediately, and the American people fell for all of them, just like they always do. Suckers!

The first lie was that Ghaddafi was supplying his troops with huge supplies of Viagra so they could go on a mass rape campaign against enemy civilians (that he was using rape as a weapon of war). This lie, started by the Libyan rebels, was quickly debunked, but the mass media and the US government continued promoting it for a long time. The origin of the mas rape lie appears to have been with DNC sleazeball Sidney Blumenthal, Hillary’s intelligence aide at the time.

An equally weird charge was that Ghaddafi was places dead bodies in civilian areas in as a staged PR hoax to accuse the Coalition of killing Libyan civilians. Robert Gates, US Secretary of Defense, quickly said that the Pentagon had verified the hoaxed bodies story was true. No evidence has ever surfaced that the staged body hoax story was true. The ridiculous mass rape lie was soon parroted by Hillary’s henchwoman Samantha “humanitarian bomber” Power. Incredibly, Susan Rice, another Hillary acolyte, stood up in front of the UN Security Council and charged Libya with war crimes based on the mass rape lie.

Early in the Libyan conflict Secretary of State Clinton formally accused Gaddafi and his army of using mass rape as a tool of war. Though numerous international organizations, like Amnesty International, quickly debunked these claims, the charges were uncritically echoed by Western politicians and major media.

It seemed no matter how bizarre the conspiracy theory, as long as it painted Gaddafi and his supporters as monsters, and so long as it served the cause of prolonged military action in Libya, it was deemed credible by network news.

Two foremost examples are referenced in the latest batch of emails: the sensational claim that Gaddafi issued Viagra to his troops for mass rape, and the claim that bodies were “staged” by the Libyan government at NATO bombing sites to give the appearance of the Western coalition bombing civilians.

In a late March 2011 email, Blumenthal confesses to Hillary that,

I communicated more than a week ago on this story—Qaddafi placing bodies to create PR stunts about supposed civilian casualties as a result of Allied bombing—though underlining it was a rumor. But now, as you know, Robert gates gives credence to it. (See story below.)

Sources now say, again rumor (that is, this information comes from the rebel side and is unconfirmed independently by Western intelligence), that Qaddafi has adopted a rape policy and has even distributed Viagra to troops. The incident at the Tripoli press conference involving a woman claiming to be raped is likely to be part of a much larger outrage. Will seek further confirmation.

Not only did Defense Secretary Robert Gates promote his bizarre “staged bodies” theory on CBS News’ “Face The Nation,” but the even stranger Viagra rape fiction made international headlines as U.S. Ambassador to the UN Susan Rice made a formal charge against Libya in front of the UN Security Council.

What this new email confirms is that not only was the State Department aware of the spurious nature of what Blumenthal calls “rumors” originating solely with the rebels, but did nothing to stop false information from rising to top officials who then gave them “credence.”

It appears, furthermore, that the Viagra mass rape hoax likely originated with Sidney Blumenthal himself.

Note

[1] The most comprehensive and well-documented study of the plight of black Libyans is contained in Slouching Towards Sirte: NATO’s War on Libya and Africa (publ. 2012, Baraka Books) by Maximilian Forte, Professor Anthropology and Sociology at Concordia University in Montréal, Québec.

This article was originally published at the Levant Report.

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Hillary Clinton, Neoconservative Dream Candidate

Here.

Good God, she’s a nightmare. This election is going to be about who we despise least. I hate Trump, but I definitely despise Killary/Hitlery Clinton, neocon warmonger maniac.

Trump is truly catastrophic and must be stopped by all means. But Hillary is a nightmare. Hillary’s a turd, and Trump is 24 hour diarrhea. I really hate both of them, but I hate Hillary less. But that ain’t saying much, because there are few humans I hate more than Donald Trump.

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ISIS: Made in America

Here.

I have probably read hundreds of pages on this matter recently, and I still do not know what to make of it. I think this whole “War on ISIS:” is fake.

ISIS is armed by Saudi Arabia, Qatar and Turkey. The US shovels weapons to those three countries and then they give them to ISIS. ISIS is also supported by the UAE. The weapons are stockpiled in Turkey and then driven across the border to ISIS. Also I believe a lot of weapons are shipped to ISIS via Jordan.

The US knows full well that its own allies are supplying ISIS with weapons and that its ally Turkey is the main stockpile for the weapons. It knows that Turkey ships the weapons and supplies across the border to ISIS. Erdogan’s brother was the man running the ISIS oil smuggling out of Eastern Syria. The oil was smuggled out of East Syria to Turkey where it was then shipped to Israel. The Turkish government was neck deep in this. Erdogan’s sister was running a hospital that took care of wounded ISIS fighters.

If the US is fighting a war against ISIS, then why isn’t it stopping Qatar, UAE, Saudi Arabia and Turkey from supplying ISIS? Why aren’t we bombing the ISIS training camps and supply depots in Turkey. Last November, a German photojournalist shot video of a column of 100 trucks heading over the Turkish border carrying men, supplies, weapons, etc. going directly into ISIS territory.

Conclusion? We are not even fighting a war on ISIS at all! If we are, why are we not targeting their supply chain? The whole war against them is fake.

We must be keeping ISIS around for some reason. Probably we are keeping them around as a noose around the neck of Assad. ISIS is a great way to bleed Assad on the battlefield and threaten his regime. At the same time, if you hit Syria, you also hit Iran and Hezbollah. Iran and Hezbollah are also getting bloodied on the battlefield in Syria. So ISIS is a great way to bloody, weaken and threaten Assad and to bloody and weaken Hezbollah while possibly threatening them in the future (Al Nusra is already fighting battles with the Lebanese military and Hezbollah in Northern Lebanon.) ISIS is also useful to bleed and weaken Iran and its allies like the Yemeni Houthis.

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“Monopoly Capital and Capitalist Inequality: Marx after Piketty,” By Thomas E. Lambert

Great article that concludes that almost all of the massive wealth that has accumulated among the wealthy in the US in recent years has been due to an huge increase in the economic surplus which has been due to two factors: flat wage growth (high worker exploitation) and investment in unproductive sectors of the US economy. I believe he is correct. Piketty’s book is supposed to be great, but I have not yet read it.

Monopoly Capital and Capitalist Inequality: Marx after Piketty

By Thomas E. Lambert

Assistant Professor of Public Administration
Northern Kentucky University
Highland Heights, KY 41099
Lambertt1@nku.edu
502-403-9795 (cell)

Abstract

This paper proposes that one major explanation of growing inequality in the United States (US) is through the use of the concept of economic surplus. The economic surplus is a neo-Marxian term which combines the traditional Marxian tenet of surplus value with other ways that surplus value can be invested in a mature, advanced capitalist economy.

A rising economic surplus that is not absorbed through growing consumer spending, luxury spending or government spending results in stagnant wages and growing inequality via higher levels of underemployment and greater monopoly and monopsony power among a decreasing number of huge, powerful corporations. Therefore, the politics surrounding the growth of inequality in the US has to be understood first by understanding over accumulation of the economic surplus by those at the top of the US capitalist class.

This research note gives estimates of the rising economic surplus over the last several decades in the US as well as how these correlate with the level of inequality. The growth of the economic surplus gives rise and form to the politics of inequality and austerity. As time goes by, the politics of inequality and austerity in the US will be manifested by greater corporate influence in the political system, greater political polarization, less government effectiveness, and more debates about welfare spending, corporate taxation, taxes on upper income households, and taxes on wealth.

Introduction

According to a recent, nationwide opinion poll, approximately 63% of United States (US) survey respondents indicated that US wealth and income differences should be more equally distributed (Newport 2015). In many political discussions and discourse in the US, the topic of economic inequality is growing in importance, especially as one major candidate for US President has made it a cornerstone of his campaign (Talbot 2015).

Additionally, the notoriety of Thomas Piketty’s Capital in the Twenty-first Century (2014, English edition) has added grist to the debate since one of Piketty’s main points is that a large degree of economic inequality is the norm in a capitalistic system, not the exception. Piketty contends that some degree of inequality has been driven by the large increases in managerial and CEO pay over the years (p. 24), although a lot of research has failed to show a link between a management team’s pay and corporate performance (Collins 2001, Chemi and Giorgio 2014).

Add to this his assertion that rates of return on wealth and assets, or r, are greater than economic growth, or g, then in any society, most of national income tends to accumulate with the investor class, and part of this income becomes more assets and wealth. His central equation, r > g, explains why great concentrations of wealth yield even more wealth concentration as time goes by, especially if r is far above g.

Finally, with large concentrations of wealth, inherited wealth becomes more and more important in skewing the wealth toward those in the top income ranges, especially if inheritance and income taxes are kept low by national governments.

One solution to extremely skewed wealth distribution would be an international tax on wealth and/or inheritances, but Piketty believes these unlikely to come into effect. Therefore, despite astute analysis of why inequality persists and even becomes worse, Piketty’s recommendations to address it are tenuous given political power imbalances in most societies and the inability of nation-states to coordinate actions to solve problems.

Nonetheless, Piketty is at least concerned about the long term impacts of extreme inequality in most nations whereas some mainstream economists do not see it as a big problem if a problem at all. Instead, according to these economists, income and wealth inequalities within a society can be explained mostly by differences in labor productivity and educational attainment differences among those in the labor force (Feldstein 1999).

On the other hand, critics of extreme inequality claim that too much income and wealth inequality can result in greater political and social alienation or even turmoil on the part of the citizenry, possibly due to the development of a static class structure or rule by oligarchy (Solt 2008, Newman, Johnston and Lown 2015).

One school of neo-Marxist thought, the “monopoly capital” point of view (Baran and Sweezy 1966, Foster 2014 among others), posits that modern inequality exists because of traditional Marxist explanations of worker exploitation and because of the power of land owners in the past and in modern times (a rentier class) and mostly because of the political and market powers of large, modern day corporations (i.e., many oligopolistic and monopolistic consumer markets and monopsonistic labor markets).

Market concentration allows for restricted output (excess capacity), which in turn yields high markups on product prices. Restricted output lessens the demand for labor, which along with monoposonistic labor markets (in which workers are limited with regard to employer choices) limit the earnings of workers and raises the unemployment rate beyond what it would be otherwise.

In the monopoly capital school of thought, Piketty’s observation of r > g can be easily explained by the degree of corporate and upper class dominance in a society in that market concentration and power in product and labor markets yields higher returns and profits than in competitive markets relative to what workers can earn in wages (Foster and Yates 2014, Andrews 2014). With wages stagnant or not increasing fast enough to keep up with inflation, this makes the degree of labor exploitation even stronger (Piketty 2014, Lambert and Kwon 2015a).

Finally, since innovation and the resulting products from innovation usually reach a peak in sales and market share, g is usually low, and so the economy usually tends toward stagnation. That is, according to the monopoly capital point of view, the product life cycle of rapid growth, slow growth, and then peak sales occurs with all products, and if no further innovations are forthcoming to keep an economy growing, then slow or negative growth occurs.

This is compounded by the fact that as many industries cease to grow as rapidly as they have in their early stages, jobs are eventually shed as labor saving techniques are introduced, and this can exacerbate any unemployment and inequality problems. Finally, slow growing or declining sales in existing product markets and a lack of new products or markets in which to invest lead to fewer investment outlets for the upper capitalist class. This causes the “economic surplus” of a society to rise, which can be manifested in over accumulation of surplus or under consumption of goods and services.

According to Baran and Sweezy (1966), the economic surplus is the amount over and above what is required to produce a given level of output and is normally considered as comprised of things such business profits, property rents, interest payments, and wasteful expenditures on such things as luxury items, advertising, retailing, research and development1, finance, and military programs. Using Piketty’s equation (or inequality), since r > g, the surplus of the wealthier classes rises faster than what it can invest in productive investment or assets.

Hence, in order to use the excess surplus that is accumulated, the result is spending on many wasteful items according to Baran and Sweezy. Wasteful and non-wasteful activities are seen from a traditional Marxian perspective these that uses a non-productive and productive dichotomy for classifying economic activity and labor.2

Productive activity or labor includes those activities such as agriculture, manufacturing, mining, utilities, construction, transportation, and some forms of government activity such as education, sanitation, and emergency services (Baran and Sweezy 1966, Shaikh and Tonak 1994, Mohun 1996 and 2014 among others).

These activities and labor are considered productive because they produce surplus value and add value in that they satisfy the consumer needs of food, clothing, shelter, education, etc.

Those economic sectors that are classified as unproductive add little or no value and are only ancillary to the productive sectors of the economy. Yet, the unproductive sectors are necessary in order to provide an outlet for accumulated surplus that cannot be channeled into productive sectors if the latter are not growing (Baran and Sweezy 1966).

For Baran and Sweezy (1966) this combination of surplus value obtained from worker exploitation (where workers produced output greater than their wages) and expenditures for non-productive labor and activities made up their concept of the economic surplus.

Therefore, as wages remain stagnant or decline as prices and profits rise (which would cause r to increase even more relative to g in Piketty’s equation) and as non-productive sectors grow, then a nation’s economic surplus would grow. Along with this growth in economic surplus, as wages are stagnant or declining, one would expect to see rising inequality due to rising labor exploitation, and so there should be a high degree of correlation between the economic surplus and inequality.

This research note proceeds as follows. Next is a section in which the methods of evaluating the argument that the economic surplus and inequality are linked are discussed. Then a results section summarizes the findings. Finally, a discussion and conclusion elaborate on the research results and offers recommendations for further research.

Methods

This paper uses time series, least squares regression to predict the levels of income inequality (top 1% income share, including capital gains) and wealth inequality (net private wealth as a portion of all income3) in the US from 1929 to 2013 using the monopoly capital concept of economic surplus as a percentage of GDP. This is a method similar to that used by Lambert and Kwon (2015a) in which they predicted the percentage change in top income shares over a similar time period using different concepts of surplus and other variables.

The top 1% income share and wealth to total income numbers come from the World Wealth and Income Database, a database created by Piketty and other researchers of inequality (Alvaredo, Atkinson, Piketty , Saez, and Zucman 2016). The economic surplus as a portion of US GDP was used by Baran and Sweezy (1966) to illustrate the level of exploitation occurring in the US over time.

In an appendix by Joseph D. Phillips, the surplus as a portion of GDP is constructed as the sum of business profits, rent, property income, interest, dividends, depreciation, and the value of the “wasteful” sectors of the economy (e.g., finance, insurance, real estate, services, government etc.) divided by GDP.

Later, Shaikh and Tonak (1994) fine-tuned the economic surplus concept as a portion of GDP that is basically the value of Gross Domestic Product less the value of the wages and salaries in the productive sectors of the economy. This paper adapts their concept, which has also been used by other authors (Wolf 1987, Lambert and Kwon 2015a and 2015b). The source of the data is from the US Bureau of Economic Analysis (BEA) National Economics Accounts tables website, http://www.bea.gov/national/index.htm , and more specifically Table 1.1.5, Gross Domestic Product and Table 6.2A, Compensation of Employees by Industry.4

This paper contends that there should be a high degree of correlation between the economic surplus and two variables, income and wealth inequality, since capitalist wealth and income are extracted by high rates of labor exploitation and the wasteful investment of surplus into productive and non-productive activities.

Results

Figures 1 and 2 show that the economic surplus concept and the income and wealth shares are highly correlated and have strong, direct and positive relationships. Table 1, Model 1, shows the economic surplus as a percentage of GDP to be a statistically significant predictor of the income shares of the top 1%, and it explains about 88% of the variation in top 1% income shares.

A one percent increase in economic surplus is associated with around a 12% increase in top 1% income share on average. In Model 2, a 1% increase in economic surplus as a share of GDP predicts a 163% increase in the wealth to income percentage on average.

Model 2 shows the economic surplus variable to be statistically significant and explains about 73% of the variation in wealth to income. In using ordinary least squares analysis, the Durbin-Watson statistic is less than the lower critical value at α < 0.05 for both models indicating positive serial correlation, so Newey-West standard errors to correct for any autocorrelation or serial correlation are used in both models (Studenmund 2006, pages 334-335).

Discussion and Conclusion

The regression results support the hypotheses advanced by this paper. The bulk of the gains made by the upper classes in US society appear to have occurred because of increases in US economic surplus, which grew as a result of stagnant wages to labor (or greater labor exploitation) and greater investment in what Baran and Sweezy (1966) would characterize as “waste” – the unproductive sectors of the US economy (Lambert and Kwon 2015a).

Politically, greater labor exploitation and greater inequality in both wealth and income make for a potentially volatile situation according to Piketty (2014).

Toward the end of his book The Theory of Capitalist Development (1970 (1942 original), set in the US during the Great Depression and on the eve of its entry into World War II, Paul Sweezy speculates on the question of whether fascism is inevitable in a society which has suffered and continues to suffer a major economic crisis.

Similar to the nations that suffered trauma during and after World War I because of economic hardships, military defeat and/or subsequent economic crisis (e.g., Germany and Italy), the US was dealing with high unemployment and excess industrial capacity, although the US had come out of World War I stronger than any other nation in the world.

Sweezy believes that a nation which has embarked in imperialist ventures in the past (i.e., has had colonies or territories) and has a capitalist economy, although a faltering one, and has suffered some type of national trauma (war, depression, etc.) is a good candidate for a fascistic takeover of the government. He rejects this as an inevitability for the US during the time of his writings for the book, but leaves open the possibility for a later date should circumstances change.

Have circumstances changed enough since then? Other writings on fascism and socialism offer some clues as to possible future scenarios. The US has possibly suffered the greatest economic crisis since the Great Depression due to the 2007-2009 Great Recession and its aftermath.

Subsequent economic growth after the recession’s “end” in 2009 has been very slow, with stagnant wages, a great number of people dropping out of the labor force, an increase in the official poverty rate, and now an apparent slowdown in the global economy, which could spell more trouble for the US economy (Greenhouse and Leonhardt 2006, Foster and Magdoff 2009, Lambert 2011, Mongiovi 2015, Patnaik 2016).

Although illegal immigration has declined during this time period, there still persists a common belief among the working classes that a large number of illegal immigrants are harming the working class (Goo 2015). Additionally, the aftermath of wars in Afghanistan and Iraq and continued problems with terrorist groups such as Al Qaeda and ISIS have put the nation almost on a perpetual wartime footing since 2001.

Fascism has been generally defined as a political and economic system which arises from national political and/or economic turmoil and wherein capitalism is seen as chaotic and has to be managed by a strong, nationalistic government led by elites which seeks to unite labor and upper class interests rather than try to exploit class struggle.

The capitalist class, however, is allowed to retain its property rights and business interests, although it now has to submit to a “managed” form of capitalism in which industry is organized into large and cooperative cartels (Sabine and Thorson 1973, Carsten 1980, Renton 1999, Amin 2014). In return for full and steady employment, labor gives up its unions and a large number of its rights, which assists with an austerity efforts to balance national budgets and pay off debts.

Such a compromise goes a long way in managing social spending that cannot keep up with the chaos (economic downturns), unemployment, poverty, and inequality brought about due to capitalism’s excesses (O’Connor 1973). Piketty (2014) acknowledges that much of the austerity movement in developed and developing countries has emanated from the fact that most bondholders are from the world’s wealthy and upper classes, and therefore, austerity is imposed to make sure that the debt is properly serviced and paid, even if it means harsh conditions for debtor nations.

Fascism does seem plausible in other nations that are undergoing austerity due to having to repay debts to the IMF or other financial institutions. Repressive regimes could arise when faced with labor and working class strife arising from a negative reaction to austerity measures. Although there is a more remote chance in the US since many of its financial institutions hold such debt, it is not entirely out of the question.

This is due to the possibility of chronic deficits and a debt level at 100% of GDP which the nation does not seem capable of adequately addressing in the current political climate. Inaction with regard to increasing taxes or significantly decreasing spending seems to be the norm now, although this may change if the economy becomes very bad in the future.

O’Connor (1973) speculates that greater and greater levels of social spending are necessary in a monopoly capitalist economy due to capitalist interests being able to shift more and more social problems on to the government (spending on unemployment, welfare, and job training, for example). Yet at the same time, capitalist interests resist greater levels of taxation.

With the resistance to higher taxes and a rising budget deficit and debt level, austerity and cutbacks are the next option, which in turn could lead to a working class revolt. The reaction to such a revolt could lead to some type of politically and economically repressive regime. This is a grim but possible scenario unfortunately.

Table 1: Times Series, Least Squares
Model 1: Dependent Variable is US Top 1% Income Shares including Capital Gains, 1929 to 2013
b
(Newey-West standard errors)

Constant -21.672
Econ Surplus as Pct. GDP 12.011***
(0.559)

Adjusted r2 : 0.883

n = 85

Model 2: Dependent Variable is Net Private Wealth as Pct. Of Income, 1929 to 2013
b
(Newey-West standard errors)

Constant -110.008
Econ Surplus as Pct. GDP 163.091***
(34.098)

Adjusted r2 : 0.731

n = 85

***p < 0.01

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