The limits of capitalism

"We often hear about Capitalism's contraditions, but I think the most tragic one is that we teach children pro-social behaviors: to share, to be kind, to cooperate, and to work together. We try to raise them to be decent human beings. But then, when they grow up, they are rewarded for outcompeting others, being cutthroat and ruthless in the workplace, and if they achieve wealth and power, they are often rewarded for many anti-social behaviors." - David Graeber

The Monetary Component of Post-Civil-War USA

This is a response to Matt Stoller's concise summary of post-Civil War economics.

Dear Matt,

I loved your post-Civil War summary, but it omits a few items that are often ignored.

First, in the period leading up to the Civil War, as he was stealing the Southeastern US from the Cherokees, President Andrew Jackson also paid off the national debt in full in 1835 and decommissioned the US central bank. 

Both the national and Georgia Supreme Courts validated the Cherokees' title to their land, so Trump is not the first president to ignore the Supreme Court's decisions.

Since public currency is a component of national debt, just as an asset like your bank account is the bank's liability, terminating the central bank and paying off national debt meant public currency vanished, reducing people's savings. It was austerity on steroids.

In the aftermath of Jackson's massive financial bungle, people did their business with monetized gold ("specie") and over 7,000 varieties of private banknotes of varying reliability. There was no FDIC then, either.

So, as with all significant reductions in national debt, Jackson's debt payoff made the economy more fragile. A wave of asset forfeitures and foreclosures called the "Panic of 1835" ensued. One might even say this was a significant contributor to the tensions leading to the Civil War itself and the post-Civil War depressions.

The Civil War itself meant the Union had to spend lots of money to fight the seceding states. I've read that the bankers offered to lend Lincoln the money at 26% interest. Lincoln sidestepped handing the banks an enormous profit by issuing "greenbacks" from the Treasury as currency.  They were valuable because they were accepted in payment for taxes. 

The feds also abandoned traditional accounting for greenbacks issued and did not call them liabilities. This was a covert (re)expansion of national debt.

Post-war, government began withdrawing greenbacks from circulation. (See Lawrence Goodwin's The Populist Moment: A Short History of the Agrarian Revolt in America) Losing the Civil War meant the Confederacy lost most of its assets (slaves), none of its money was valuable, and all of its banks failed. As a consequence Connecticut alone had as much currency as the Confederate states put together. Southerners were very poor, and resented the Northern banks backing the creditors. There's even a continuing movement to deny ending slavery was what started the Civil War, saying Northern banks were the spark that set it off.

So...what do people do when there's no money and they need to buy seeds for their farm, and food for their family? They buy on credit. A credit store run by the "Furnishing Man" came along to cater to such customers. The name was later shortened to just "the Man," as in "Working for the Man every night and day" in the Creedence Clearwater Revival song.

The Man charged one price for cash and another for credit. The credit price would put today's payday lenders to shame. The security for credit extended was the "crop lien." The farmers bore all the risk of price swings and weather, while the Man often took advantage of such emergencies to foreclose and make tenant farmers out of farm owners. It was an example of "disaster capitalism" on steroids. The people in charge of rail transportation of crops also colluded to support the Man, refusing to take crops to markets where they might be more valuable.

One response to this crushing blow to the poor was the Farmers' Alliance. The Farmers' Alliance moved into politics in the early 1890s under the banner of the People's Party, commonly known as the "Populists." They elected people to political office both locally and federally, and were one of the driving forces behind the creation of the Federal Reserve and the State Bank of North Dakota, as well as farm co-ops.

The forces of austerity run in parallel to the monopolists you cover, saying we can't afford to house, treat, or constructively use poor people in our civilization because (Eeek!) we're running out of money. We've had plenty of historical examples of austerity. Every one precedes a significant economic downturn.

=========

Incidentally, today's post from Stoller is simply awesome. It answers the question previously asked by Congressman Pascarell: "Why is Congress so dumb?" 

von Mises' Economic Calculation Problem….. Debunked

Economic Calculation Problem….. Debunked

[historic.ly, 19 Jun 2026]

According to libertarians, the Economic Calculation Problem is the ultimate kryptonite against socialism — a decisive argument that no one has ever refuted. Austrian economist Ludwig von Mises presented it as a logical proof that socialism is inherently irrational….

Mises maintained that the information necessary for economic calculation cannot be directly derived from physical quantities alone. Steel, labor, coal, machinery, and land are qualitatively different inputs that cannot be compared through simple measurement. Market exchange generates prices that reduce these heterogeneous goods to a common monetary denominator, allowing alternative production plans to be compared. Millions of exchanges produce prices that summarize dispersed information about relative scarcity and demand. In his view, the market functions as a mechanism for coordinating information that no individual planner could assemble independently.(Mises 1949, 92–97; 1920; 1922).

Without price-based calculation, Mises concluded, socialist planning must be arbitrary, leading to waste, inefficiency, and eventual collapse….

A central assumption in Mises’s argument is that profitability indicates that resources are being used more effectively. If a producer cannot compete profitably, Mises argues that others have found a better use for the resources involved (Mises 1949, pp. 300–302, 334–336; see also 1920)

Yet profitability in this system often comes not from genuine improvements or feeding more people, but from engineered scarcity and the quiet destruction of life….

Prices embed existing inequalities and power relations rather than revealing objective scarcity or true societal value.For example, in order to mine cobalt (a critical input for electric vehicle batteries and other high-tech goods), children between the ages of 3–17 in the mining communities of the copper-cobalt belt in the Democratic Republic of Congo are heavily involved in the labor. According to a 2017 UC Berkeley CEGA white paper, 11% of children aged 3–17 work outside the household in these artisanal mining areas, while an additional 57% perform domestic household tasks that support the mining economy.Even when prices exist, they reflect the current structure of power and property relations, not moral value or labor input…."

=========

From your humble blogger: 

This debunk is yet another example of applying what classical economics calls the "law of declining profits." In a perfectly free market without barriers to entry, firms compete for business on (lower) price and (higher and higher-priced) quality.  This inevitably leads profits to decline.

Firm managers and investors know this inside out. Champion stock-picker Warren Buffett said he always looked for firms with "moats," to discourage competition, when he invested. Other strategies to avoid the law of declining profits include predatory labor practices (to lower costs), buying out other firms to make monopolies and oligopolies control markets, "dumping" - selling goods at lower-than-production costs to drive less capitalized competitors out of the market, and unproductive activities. 

The best example of unproductive activities is military expenditure. Nothing is less productive than a product literally designed to blow up. On top of that military acquisitions are often done with cost plus contracts. The "plus" is the profit, and is figured as a percentage of costs. So the more expensive the weapon, the better, at least from a profit perspective. Whether it works or not is secondary. Iran's drones are cheap, and the US/Israel countermeasures are easily hundreds of times more expensive...and they're not always reliable.

Of course seekers of profit are not shy about using warfare, too. Von Clausewitz said "War is politics by other means." One might add that "Economics is war by other means," too. 

The US used to manage it's "free" market very closely with measures like the Wright-Patman act that forbade price discrimination between big and little buyers. So when Walmart gets its soda at a difference price than mom-and-pop stores that's forbidden under Wright-Patman. Matt Stoller reports the FTC stopped enforcing that law, which would be very damaging to Walmart's business model.

 It also used to be illegal to buy back stock, or to pay executives with stock or options. A bipartisan effort rolled back these regulations. The political class has succumbed to the influence of the plutocrats, and public policy is the foundation of the current level of income inequality.

 

 

Today's Bee Letter (Published! ... kinda)

Responding to the Bee's publication 6/19/26 "Sacramento leader: The county's budget rewards failure, cuts public safety" by Rosario Rodriguez, on page B10

Supervisor Rodriguez' editorial fails to mention that the County's commitment to "safety" relies primarily on coercion after the fact rather than prevention. Cops, courts and cages are what she complains are being underfunded, despite being roughly 70% of the County's budget. Incarcerating for addiction is seven times the cost of medical treatment, and is less effective, but Rodriguez proposes no expansion of rehab. She just wants a jail expansion, even though the Mays decision settlement doesn't request it. 

She also omits that Sheriff Cooper confessed his "cuts" were illusions. He is re-assigning deputies to existing vacancies, not reducing police staffing. It’s not news that cops just want more money, even if they solve less than 15% of crimes--and don't solve 85% of them. The world is scary enough without the Bee appealing to fear with this kind of incomplete reporting. Please start solving problems, and stop adding to them.

====

I might add that it's extraordinarily frustrating to have no interest from local publications in the editorial I wrote responding to Ms. Rodriguez appeal for more coercion. My writing has appeared in these publications previously, but they're just not interested in contradicting the belief that cops, courts and cages are the way to deal with the desparate people in Sacramento County. One example of a better way to prevent such desperation is Contra Costa County's "Destination Home," a program to provide people on the brink of losing their rental with some funds to keep their housing.

===========

After complaining that the Bee never publishes my stuff, they published this letter, edited.

Here's their version:

BUDGET REALITIES
Sacramento Supervisor Rosario Rodriguez's editorial fails to mention that the county's commitment
to "safety" relies primarily on coercion after the fact rather than prevention. Cops, courts andd cages are
what she complains are being underfunded, despite being roughly 70% of the county's budget. Incarceration for for addiction is seven times the cost of medical treatment, and it is less effective. But Rodriguez proposes no expansion of rehab. She just wants a jail expansion, even though the Mays decision settlement didn't request it. It's not news that cops just want more money without being more effective. Please start solving problerns, and stop adding to them.
 

Mark Dempsey
Orangevale 

That's 104 words, while the Bee solicits letters that are as long as 150 words. ... Omitted [Added]:

She also omits that Sheriff Cooper confessed his "cuts" were illusions. He is re-assigning deputies to existing vacancies, not reducing police staffing. It’s not news that cops just want more money [without being more effective], even if they solve less than 15% of crimes--and don't solve 85% of them. The world is scary enough without the Bee appealing to fear with this kind of incomplete reporting.  

===

Really Milquetoasts the message, doesn't it? Gee, I wonder how Trump gets traction with the "fake news" accusations...! Of course the Bee wouldn't publish the full editorial, although the Davis Vanguard did.

The Bipartisan War on Venezuela, Cuba, and Nicaragua

(from LA Progressive)

by Roger D. Harris and John Perry
Jun 18, 2026

While Democrats criticize Trump's foreign policy style, both parties continue to support sanctions, economic coercion, and efforts to reshape governments across Latin America and the Caribbean.

Donald Trump’s second term has precipitated a tsunami of criticism from Democrats over his foreign policy. Yet when it comes to Washington's efforts to dominate Latin America and the Caribbean, the substantive dispute – if there is any substance remaining, once stripped of partisan bickering – is less about ends than means.

Beneath the rhetoric of inter-party conflict lies a broad bipartisan consensus in favor of promoting US hemispheric hegemony and crushing governments that resist it – with Venezuela, Cuba, and Nicaragua at the forefront. While Democrats frequently portray Trump as reckless, they generally accept the underlying premises of economic coercion, political intervention, and regime-change pressure. Their objections mainly focus on the execution of policy rather than its legitimacy.

The central role of sanctions in projecting imperial coercive power

Under Democratic administrations, the US forged and institutionalized what may be its most effective instrument of hegemony. Coercive economic measures, commonly called “sanctions,” were first deployed by Franklin D. Roosevelt against Mexico in the 1930s. They were used by Dwight D. Eisenhower to pressure Guatemala in 1954 and then – most drastically – against Cuba by both Eisenhower and John F. Kennedy in 1960. Today, one-third of the world’s nations are under US sanctions.

Sanctions – a form of collective punishment – are held by legal experts to be contrary to international law. Paradoxically, not only does Washington disregard international law in imposing sanctions, but the US then behaves as if they are applying the law when, for example, they pirate a ship delivering humanitarian supplies to a sanctioned country.

Use of sanctions has accelerated because successive administrations have seen their unique advantages. Compared with “forever wars,” they are more easily justified to US voters as cost-free and as not imperiling US lives. If sanctions are the precursor to military intervention – as in Guatemala in 1954, Cuba in 1961, Grenada in 1983, Panama in 1989 and, of course, Venezuela in 2026 – the interventions have usually been limited, with few US casualties.

Yet sanctions are very potent: between 2010 and 2021, they caused around 560,000 deaths globally each year – more than five times the number of people killed annually in direct armed combat.

While sanctions are made more palatable by being described as “targeted” at governments or individuals seen as undesirable by Washington, in practice the “targeting” is deliberately far wider. Sanctions do most damage to the poorest sectors of societies – the sectors most likely to support progressive governments. The barely veiled message is that only by withdrawing this support will such communities be able to prosper and avoid the threat of even greater US intervention.

The frequent description of sanctions as “targeted” carries another implication – that they are intended to have a precise and conclusive effect. However, while sanctions cause severe economic damage, there is little evidence that they achieve intended regime change. Even so, sanctions on countries which refuse to change are maintained and – very frequently – intensified. Democrats are as guilty of this folly as Republicans.

Indeed, US sanctions have imperial utility through their “demonstration effect”: attempting to cripple progressive alternatives to the neoliberal world order. Recently subjected to draconian sanctions, Cuban President Díaz-Canel proclaimed: “Cuba is not a failed state; Cuba is a besieged state.” Still, infant mortality in Cuba is lower than among African Americans.

Transitioning to “democracy” in Venezuela

In the case of Venezuela, the Democrats have criticized the Republicans from the right, complaining that the cudgel of imperial power against essentially defenseless small states has not been wielded with sufficient malice.

Washington has imposed illegal unilateral coercive measures on Venezuela since 2015 in efforts to asphyxiate its Bolivarian Revolution. The transparently false rationale for continuing sanctions is that Venezuela poses an “extraordinary threat” to the national security of the US. Although the threat is obviously the other way around, mainstream Democrats have not exposed this lie. How could they, when it originated with Obama and was subsequently echoed by Biden and then Trump?

Despite the horrific toll of an estimated 100,000 excess deaths attributed to US-imposed sanctions, Venezuela has resisted and maintained an unbroken continuity of leadership from Hugo Chávez to Nicolás Maduro and to now Delcy Rodríguez. And that’s the rub for the Democrats.

Ranking Democrat members of the House and Senate foreign affairs committees, Representative Gregory W. Meeks and Senator Jeanne Shaheen, issued a “request [for] a clear explanation” of Trump’s Venezuela policy. Their meek missive came a full five months after the abduction of the Venezuelan president, an operation that resulted in more than 100 collateral deaths. Meanwhile, more than 200 occupants of small boats in the Caribbean and eastern Pacific have been subjected to extrajudicial murder by the Trump administration.

Yet these inconvenient facts are absent from the June 8 Democratic Party congressional foreign-policy leadership’s statement on Venezuela. Their complaint is that Trump’s White House has failed to sufficiently “exercise its leverage.” As they put it: “As of today, the [state] department has yet to provide any evidence the Trump Administration is doing any of this hard work.”

The contradiction of kidnapping a lawful head of state in the name of restoring democracy does not trouble the Democrats. Rather, they “strongly support the Venezuelan people’s right to choose their leaders,” … after the US abducts their president.

These Democrat leaders are also troubled that Venezuelan authorities were allowed to appoint a new attorney general and defense minister without apparent US interference. In addition, they express impatience with Trump’s lethargy in not yet overhauling Venezuela’s supreme court and electoral council.

To the extent that they make any concrete demand, the putative opposition party wants Trump to impose an “electoral timeline” on Venezuela. Yet, the same party has no problem with Volodymyr Zelenskyy in Ukraine who suspended elections after his legal term in office expired two years ago, banned opposition parties, shuttered critical media, and arrested political opponents.

Restoring “democracy” in Cuba

Democratic Party policy toward Cuba is perhaps best exemplified by Biden’s retention of the State Sponsor of Terrorism designation, which he inherited from Trump. Then, just six days before leaving office, Biden rescinded the designation with full certainty that the incoming Republican would – and did – reverse his decision.

Former National Security Council officer Ricardo Zúñiga was Obama’s adviser for the Americas and Biden’s special envoy for the Northern Triangle. He writes in Foreign Affairs offering advice on, rather than criticism of, Trump’s Cuba policy.

Zúñiga advocates achieving regime change in Cuba through “diplomacy” rather than “force.” Scare quotes are used because, for this Democrat, brute economic strangulation is regarded as diplomacy. Zúñiga would “forswear military action,” but only if Cuba submits to US dictates. And so long as “pro-market reforms” are adopted, “democracy” can wait.

Without a hint of opprobrium, Zúñiga casually references the US invasion of Iran and the kidnapping of the Venezuelan president as policy options that would not be effective in Cuba. Given these examples, he then complains that Cubans remain resistant to “American views on democracy and human rights.”

He acknowledges that even if Trump wished to selectively roll back the murderous sanctions currently imposed on Cuba, he would face opposition not only from Republicans but also from Democrats. Where this Democrat differs from Republicans is in his supremely hypocritical conclusion: “It is ultimately Cuban citizens who will determine their country’s future” … after the US overthrows their government.

Promoting “democracy” in Nicaragua

Tiny Nicaragua is also labelled an “extraordinary threat” to the US. While the harshest and most successful sanctions against it were applied during the Reagan administrations, when an economic blockade and the US-financed Contra war eventually unseated the Sandinista government in 1990, economic pressure quickly resumed once the Sandinistas returned to power in 2007. Both the Bush and then Obama administrations made cuts in aid, and it was under Obama that Democrats joined with Republicans to launch the NICA Act, eventually implemented (under Trump) in 2018.

While Trump signed the NICA Act and sanctioned various Nicaraguan functionaries, Democrat senators took the lead in formulating stronger measures in the RENACER Act, signed by Biden in 2021. This led to an estimated loss of $500 million annually in development finance that would have been directed at Nicaragua’s poorest communities. Democrat senator Tim Kaine, with Marco Rubio, put forward new legislation in 2023 that was intended to strengthen the RENACER Act and ensure even greater damage.

Biden officials were consistently aggressive toward Nicaragua. In 2022, his nominee for ambassador to Managua, Hugo Rodríguez, promised the US Congress that he would “support using all economic and diplomatic tools to bring about a change in direction in Nicaragua.” As a result, Rodríguez was never accepted as ambassador and the post remains unfilled.

In 2024, Biden’s trade representative launched a hostile investigation clearly aimed at disrupting trade with Nicaragua and possibly at excluding it from the regional trade treaty, CAFTA. When it eventually reported in late 2025 it recommended punitive tariffs, but only relatively mild penalties were actually implemented by Trump.

Marco Rubio regularly imposes sanctions on individual Nicaraguans, including a hundred more just this month. More than 2,300 have now been sanctioned by successive administrations. Nevertheless, hardline Democrats, as well as Republicans, are pushing Rubio to do far more.

Two parties, one strategy

The shared strategic objective of the bipartisan Washington consensus is the projection of US hemispheric dominance. The two major parties differ mainly in messaging and, to a lesser extent, on tactics. Their theatrical contention is neither between intervention and nonintervention, nor between coercion and diplomacy. More often, it is between competing methods for achieving the same strategic objective.

Republicans may be more inclined toward overt confrontation, selective military assaults and maximal pressure; Democrats typically prefer a combination of inhumane sanctions, diplomatic isolation, and multilateral coercion. But both approaches rest on the assumption that Washington has the right to shape the political future of other nations.

Despite differences in tone and tactics, the supposed opposition party offers not an articulated alternative to the Trump Corollary to the Monroe Doctrine but, at the very most, a variation of it.

The opinions expressed here are solely the author's and do not reflect the opinions or beliefs of the LA Progressive.
 

CubaNicaraguaTrump RegimeVenezuelaLatin America

By Roger D. Harris


Roger D. Harris is a founding member of the Venezuela Solidarity Network and is active with the Task Force on the Americas and the SanctionsKill Campaign.

By John Perry

John Perry is a writer based in Nicaragua and writes on Central America for the Nation, the London Review of Books, openDemocracy, the Council on Hemispheric Affairs, and other outlets.

The cost of the suburbs

 

Downtowns and mixed use neighborhoods subsidize the suburbs. pic.twitter.com/DQP7pBMNQP

— Mark R. Brown, AICP, CNU (@CompletedStreet) June 13, 2026

The Supervisor Rodriguez Conundrum

(c) by Mark Dempsey

In Sacramento County Supervisor Rosario Rodriguez's latest newsletter, she decries the County's budget deficit as a threat to public safety. Why? Because cops, courts and cages are not fully funded. And this, she says, is a big, big problem.

Sure:

• Incarceration is seven times more expensive than medical treatment for addiction (rehab) 
• The US incarcerates at five times the world average, per-capita. 
• Funding for cops, courts and cages has increased, nationwide, four times faster than US population growth since the '80s, and 
• Police solve less than 15% of crimes (13.2% of felonies in California in 2022). 

But we must have more policing!

Per-capita, Canada incarcerates one-seventh as many as the US, yet has lower crime rates. Of course the US has more than half a million medical bankruptcies annually, while Canada has single-payer healthcare, so social services might actually be cheaper and more effective at preventing crime.

She asserts that the Mays Decision - a lawsuit the County Jail lost for mistreating prisoners - requires physical improvements to the jail. That's not true, but the likes of Ms. Rodriguez would love a multi-million-dollar mega-jail renovation there. Why we don't incarcerate nearly enough people at five times the world's average per-capita rate!

In fairness, the jail is full. But 60-80% of the prisoners are not convicted of anything other than being unable to pay bail. In Sacramento County, you're not "innocent until proven guilty," you're "guilty until proven wealthy."

And if you believe prosecutors don't use that pre-trial incarceration as a lever to extort plea bargains, then I've got a bridge in Brooklyn to sell you. It's not justice; it's an extortion racket.

Is there any discussion of no-cash bail (as Illinois currently has) or pre-trial supervision? Not that I can detect. 

The Supervisor also complains that the County's maintenance costs are rising. Is there any move to deny land speculators their big payday, and curtail edge city development? Not that I can detect. After all, the region has 20 years' worth of unbuilt infill, and infill maintenance costs half as much to maintain as edge city development since the roads and utilities are shorter and already in place.

What Ms. Rodriguez (and her predecessor) are advocating is the domestic equivalent of the "No war is too expensive to fund or fight" international policy that has the US starting wars it can neither afford nor finish. That domestic equivalent isn't e pluribus unum ("from many, one"), it's "The beatings will continue until morale improves." 

Update #1: Signs of Reform - German prisons inspire changes. (appears in the same issue of the Davis Vanguard where the original essay appeared.

Update #2: The Mays Decision (settlement summary) In case you're wondering whether Rodriguez argument we need to expand the jail is true (it's not):

"On June 10, 2019, the parties submitted a joint notice of settlement in the form of a proposed Consent Decree, which involved a Remedial Plan requiring the County to expand its mental health programs and services, provide constitutionally-adequate medical care, provide additional safeguards to reduce suicides by people in custody, identify people with disabilities and ensure that they receive appropriate accommodations, and expand mental health input into the jail's disciplinary and use of force practices. Under the proposed Consent Decree, the Court retained jurisdiction to enforce the Consent Decree and the agreement would last for six years from the date it was entered by the court." 

Update #3: Internal records expose no real layoffs for Sacramento deputies

[From the Sacramento News & Review: It turns out the budget "cuts" are an illusion summoned in service to further the Copaganda]

Sheriff Jim Cooper has warned publicly that Sacramento County’s proposed 2026-27 budget would force his department to gut specialized units and trigger a “public safety crisis,” claiming patrol deputies and detectives would drop from 480 to 394.

County Supervisor Rosario Rodriguez echoed the alarm on social media, posting that the proposed budget would “significantly reduce law enforcement services” and weaken neighborhood safety.

An examination of the Sheriff’s Office’s internal budget submittal, obtained by The Observer, tells a different story.

The sheriff proposed eliminating approximately 140 positions and several specialized units to meet county budget targets, but the document states those positions would be reassigned into existing vacancies rather than eliminated.

In other words, the proposed budget would lay off no active law enforcement personnel.

....

Warnings of an impending safety crisis also are undercut by the sheriff’s own crime data.

The office investigated 18 homicides in 2025, down from 37 in 2024, 38 in 2023, and 39 in 2022. Spokesperson Lt. Amar Gandhi told the Sacramento Bee in January that last year’s figure represents the lowest annual homicide total the office has investigated since the 1980s.