Marx and Mondragon and Roubini, Oh My!

by Donna Schoenkopf

I’ve been thinking about politics and justice and heroes and The People more than usual these last couple of days. I’ve been thinking about it all because of the highly unusual comments made by Nouriel Roubini. I’ve never heard anything like it by someone who is of the establishment. But I think I’ll let you wait for those amazing comments until the end.

Let’s begin by climbing into our time machine and roll back a couple of thousand years to about 100 B.C.E. The Gracchi brothers, Tiberius and Gaius, born to a noble family, were schooled by the best Greek tutors, who taught the boys progressive and democratic views, which included the idea that all power belongs to The People.

When Tiberius was elected tribune he decided to do something about the huge disparity of wealth between , the Patricians (the rich landowners) and the Plebians (the peasants). The Patricians had gotten rich by funding Rome’s wars and then getting the spoils when those wars were won. Little by little they bought up most of the land. They then pushed the peasants off the land and replaced them with slaves. Much cheaper. The peasants were forced to beg in the streets to survive.

So what did Tiberius do? He enforced an old law that limited the amount of land a person could own, planning to redistribute the rest of the land to the peasants. The response to this idea was that he and 300 of his supporters were clubbed to death in the Forum by the Senators, aka the Patricians, who did not want to lose their vast holdings.

Gaius, having learned a lesson from the death of his brother, was more clever and practical. He revived the land reform program, but also fixed prices on grain for the poor, enhanced citizenship for people outside of Rome, gave power to the Equestrians (a middle-management group, essentially tax collectors), who then challenged the power of the elite, and enacted a lot of popular legislation, all of which gave him a wide range of support.

Gaius’ reward? He was killed along with 3,000 of his supporters. His corpse was beheaded and his skull was filled with lead and turned in to the authorities so the soldier who beheaded him could reap the reward, which was determined by the weight of the skull.

Money. The root of all evil.

Step back into the time machine, please. Before the 1200s open land in Europe was used by the peasants for haying and growing crops. The serfs gave the lords much of the proceeds of their efforts, in exchange for protection from barbaric hordes. Everybody got along for quite some time with this system—a thousand years, as I recall.

Then, during the 1200s, capitalism was invented. Before that time, the Catholic Church had proclaimed that it was a sin to lend money and get paid interest on the loan. They said that Christ wanted people to help each other without personal enrichment. But little by little interest started creeping in, and by the 1200s the Church had kind of let go of the interest thing. It was decreed that interest of less than 10% was okay. More was a sin. The sin of usury. Which was a mortal sin. You could go to hell for that one.

Another thing happened during the 1200s. The Statute of Merton and the Statute of Westminster proclaimed that strips of land next to the common land used by the peasants for haying and crop raising could be enclosed for use by (usually) rich landowners for (mostly) deer parks and sheep grazing. This new system was called enclosure.

Little by little peasants were forced off their land. They began to work for extremely low wages. That eventually led to masses of the poor, 75-90% of them, moving to the cities in order to survive. There they began roving the streets and creating problems like alcoholism and prostitution. Modern-day police were invented during that time, to keep the poor locked up so they wouldn’t cause so much trouble.

Back into the time machine. In 1518 Thomas More said that enclosure was responsible for most of the ills of society. His book Utopia, one of my favorites, describes a society that is free of the misery, poverty, and crime that ran through the working class. No one is idle in Utopia, and the fruits of labor are shared equally. He describes a six hour working day, leaving time for leisure and the pleasure of living. Wealth was not measured in gold or silver, but in the riches of the heart and mind. War was only for defense of the country or lifting the yoke of oppression from the oppressed. Utopians never enriched themselves from war.

As the years rolled by guilds began to form. The heads of these guilds, the merchants, could pay whatever they wanted to the workmen and apprentices who worked for them. So the workers secretly joined together to form the first unions. But you know the rich. They just couldn’t allow the workers more of the pie. The Combination Act, making it illegal for tradesmen and industrial workers to “combine” for fair wages, was enacted in England in 1799.

In 1832 a group of agricultural workers in Tolpuddle, England were arrested and convicted for swearing a secret oath as members of The Friendly Society of Agricultural Laborers, essentially a labor union. The Tolpuddle Martyrs were sent to Australia. Then something unusual happened. Ordinary working folks felt kinship with the Tolpuddlians, who were eventually deemed heroes by the people. So trade unions were saved.

Onward to the mid-1800s. In London, Karl Marx was spending years in the library of the British Museum studying the city’s records. These were the inspiration for his ideas of the problems of society. From those ideas he wrote Das Kapital, which described the exploitation of labor as the source of profit for capitalists who owned the means of production. He predicted the amassing of capital, the growth of wage labor, the decline of the profit rate. (He even foresaw globalization, which he called “the universal interdependence of nations.”) Workers were only cogs in the machinery of gigantic companies, sinking “to the level of a commodity,” causing man to be alienated from his fellow man, from nature, and even from himself.

(Meanwhile, the Industrial Revolution flowered. The Robber Barons who grew rich from it and their heavy-handed attitude toward workers produced people who organized and formed unions in the United States.)

Marx saw history moving inexorably toward its destiny—a classless society and full human freedom. He viewed work as man’s highest form of personal fulfillment. He saw capitalism evolving into a system of worker-owned businesses. This is what he meant by communism. We often condemn Marx for pushing revolution: “Workers of the world unite!” But few of us know that in his last years he saw justice for workers in the voting booth.

We are back in our time machine. It is after World War II. We are outside of the town of Mondragon, in the Basque region of Spain. Father José María Arizmendiarrieta, after failing miserably as a parish priest because he had no charisma in the pulpit, changed the history in the region by forming cooperatives—otherwise known as worker-owned businesses—because he saw that people needed jobs more than anything else. He began with a small technology school, then went on to manufacturing paraffin heaters.

Today the Mondragon Corporation is the seventh largest company in Spain, with almost 85,000 workers, and has cooperatives all over the world. They have agreed upon wage ratios from 3:1 up to 9:1, although there aren’t any workers who work at the lowest 9:1 wage. The workers decide the ratios.

Which leads to our final jump in time, and to Nouriel Roubini, an economist who has taught at Yale and worked with the International Monetary Fund, the Federal Reserve, the World Bank, and New York University. He has accurately predicted everything that has happened in our economy since the early 2000s—all the booms and busts and ins and outs.

Roubini says that Karl Marx was right. That capitalism has within itself the seeds of its own destruction. Those seeds are the lowering of wages and the amassing of capital in fewer and fewer hands. This creates a society in which fewer and fewer people can buy goods. That causes the market to plunge, and the economy to slump.

If you want to hear Nouriel say Karl Marx was right, you can hear it on the video below. It has been a long, long, long time coming, but maybe, maybe, the peasant, the serf, the worker will finally get justice.

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