By Chris Townsend
January 4, 2023
The recent operational, economic, and political debacles in the railroad and airline industries – as evidenced by the Biden regime strikebreaking of the rail workers rebellion, followed by the airline industry meltdown at Christmas time – both episodes clearly exhibit all the hallmarks of what Lenin referred to as the “parasitism and decay” inherent in the developed capitalist system.
Both railroads and airlines are trustified industries. Both occupy near-monopoly status in their respective markets. Both enjoy super profits and extraordinary public subsidy. Both operate with a de facto immunity from any significant government penalties. Both industries increasingly drain out massive capital quantities in the form of stockholder dividends, stock repurchase schemes, and enormous management salaries and compensation. The outrageous state of both key industries in the current imperialist era is a virtual advertisement for a truly socialist nationalization and public ownership and operation of both critical sectors.
We have entered yet again a new stage of monopoly parasitism and decay, with endemic speculation having been substituted for productive investment – parasitism – and epic destruction – decay – left for the public and taxpayers to grapple with once the corporate leaders have completed their looting and departed for greener pastures. Lenin’s work on imperialism deserves fresh study in view of current events on several fronts, not the least of which is the burgeoning monopoly crises.
Lenin authored his landmark work “Imperialism: The Highest Stage of Capitalism” Imperialism: The Highest Stage of Capitalism – V.I. Lenin (intpubnyc.com) while in exile, in Switzerland, in the spring of 1916. Under such circumstances and in that time the availability of detailed economic and business research materials and up-to-date news was scant. Newspapers from abroad, letters from his contacts around Europe, repeated trips to public libraries, and some current economic texts that had found their way to him was what comprised the data for Lenin’s indictment of imperialism. It was a remarkable effort under the conditions. In the first few months of 1916, with many millions already massacred in “The Great War”, it was even then undeniable that the imperialist rivalries between the European powers and their corporate structures is what had triggered the holocaust that was eventually dubbed “World War One.”
Real Causes of the War
The aim of “Imperialism” was to identify and explain the real causes of the war and its devastation, and to rally the socialist forces of the time to redouble their efforts to make use of the wartime conditions to advance the socialist movement. Doing this while the war raged was no small task, with socialists around the world badly split into camps either supporting or opposing the war. The socialist forces opposing the war were also being victimized by mass state repression; as was the case here in the U.S. when among other things Socialist Party leader Gene Debs was arrested, tried, and jailed for the “crime” of speaking out publicly against U.S. participation in the war after our entry into the conflict in 1917.
Lenin set out to clearly and incontrovertibly prove that imperialist rivalries between the European capitalist combines had played the leading role in provoking the war. That the basis of the war was economic in nature, supplemented by other factors. He summed up the basic aspects of modern imperialism; that imperialism was born out of monopoly capitalism; aided and stimulated by the ever-growing and influential banks and financial concerns; and that the implementation of an aggressive colonial policy in search of markets and super-profits all contributed to the inevitable war. Lenin also pointed out that the natural outgrowth of all these policies was a tendency towards what he referred to as “parasitism and decay” on the part of the capitalist combines. Chapter 8 of his work is entitled, “The Parasitism and Decay of Capitalism”, and he explains that, “…like all monopoly, this capitalist monopoly inevitably gives rise to a tendency to stagnation and decay.” He was also able to detail how the imperialist system worked to conservatize sections of the working class in the home countries, which included an explanation for the development of backward and even reactionary labor leaderships at the head of many of the trade unions.
Monopoly: Trains and Planes
Big business, the banks, capitalism broadly, and the national governments firmly in their grip have grown enormously since Lenin’s appraisal in 1916, but the essence of the imperialist system and its consequences remain. “Parasitism and decay” are apparent all around, even more so than in Lenin’s time. Gargantuan amounts of capital now slosh across the planet in search of investments that will bring returns. This ocean of profits is the result of the natural progression of the imperialist and capitalist system; increasingly squeezed from billions of powerless wage slaves and concentrated in the hands of billionaires, corporations, and an assortment of banks and hybrid investment firms such as private equity firms and hedge funds. The development and spread of new monopolies is inescapable, an intrinsic part of the system.
Monopoly realities now dominate entire industries in the U.S. today, as best evidenced by the deplorable situation in the railroad and airline industries. Today, after an era of unfettered deregulation and merger-mania blessed by both political parties for the past 50 years, the number of Class 1 railroads has been reduced from several hundred 100 years ago to just 5 today. The Class 1 railroads are the largest in both size, revenue, and profits, and dominate the entire industry on a truly national scale. The recent railroad union negotiations battle and near strike – cynically sabotaged by President Biden – was a rebellion against this monopoly state of affairs, where working conditions have been beaten down to the point that workers are tied to their jobs with an inability to win virtually any time off. This industrial serfdom – borne out of draconian corporate attendance policies was ignored by the Biden regime, who instead decided to curry favor with the monopolists of the five gigantic rail trusts.
Merry Christmas from the Monopolists
The recent Christmas week debacle with several airlines also showcases the monopoly climate in that industry. Four gigantic airline corporations dominate two thirds of the entire U.S. market, dictating travel patterns, choices, and prices to the helpless public. Hundreds of thousands of airline passengers, primarily on Southwest Airlines – were unceremoniously abandoned after cancelled flights during the Christmas week events. This debacle clearly illustrates the nature of the monopoly situation in that industry. With public attention and anger now focused on this disaster it is being revealed that the Southwest company had systematically under-invested in critical computer hardware and instead enriched shareholders and corporate leadership with the ample cash on hand. This simple but profitable behavior is a hallmark of monopoly conduct where there is little effective regulation, near unlimited freedom to abandon passengers, and such tight domination of the market by a handful of “competitors”.
The situations in both the rail and airline industries cry out for massive re-regulation and anti-trust enforcement, where the monopoly companies would be broken up, new corporate mergers would be prohibited, prices capped, and consumers protected. But there is little chance of any of this taking place in the current political climate, despite a situation justifying the overdue nationalization of both critical parts of the nation’s transportation infrastructure. The miserable and timid actions of the Biden regime to both recent crises in these industries is more proof of the monopoly lock on the situation. The laughable “response” of Transportation Secretary Buttigieg to the air traveler calamity further indicates the near-complete subordination of federal regulators to the monopoly air carriers. The disaster of stranded passengers too numerous to count now brings forth a chorus of competent voices who have warned of this eventuality for many years. Revolving Door Project | Release: Sec. Buttigieg Could Have Prevented The Southwest Debacle | Revolving Door Project (therevolvingdoorproject.org)
Buttigieg can however take consolation from the fact that none of his predecessors in his position had taken any significant action on these matters for the past 40 years either, so captive is the regulatory apparatus by the corporations they are tasked with regulating. Now new hearings will be held, letters will be written by the regulators and politicians, public relations releases will go out by both sides, but one can be certain that no substantial action will be taken against the companies. And, if recent regulatory cases are any measure, even if fines and penalties are levied somehow against Southwest they will eventually be reduced to a pittance or even dismissed as the entire process drags on for months and even years. The rail and airline companies have nothing to fear. They no longer control the industry and its markets alone, they increasingly own the political and regulatory world tasked with keeping order.
Monopolies Saturate Our Economy
The liberal Open Markets Institute has decried the spread of monopoly conditions across virtually all economic sectors, and in recent decades they have occupied an NGO niche with few competitors. The issues of monopoly concentration, price fixing, market manipulation, and the political corruption spawned in the process are virtually ignored today. Monopoly by the Numbers — Open Markets Institute Corporate monopoly conditions exist not only in the rail and airline industries, but in an extensive list of U.S. economic sectors. Banking, public accounting, retail food stores, pharmaceuticals, oil refining, eyeglasses, mattresses, meat processing, milk, health care and insurance, drug stores, specialty glass manufacturing, auto parts, large appliances, athletic shoes, distilled spirits, office supply retailing, advertising, semiconductors, rental cars, oil and gas drilling services, food service providers, and candy manufacturing just to name a few. All these sectors have seen unimaginable and runaway concentration of corporate control and domination, most with as few as 2 to 5 companies controlling these industries today.
Monopoly Control of the “Defense” Industry
The so-called ”defense” industry has seen a similar progression towards monopoly, with the top 100 military contract companies now reduced through mergers and buyouts to only 5 companies in just the past 30 years. This hyper-concentration now enables a mere handful of “defense” contractors to milk the government on a legendary scale, as both Republicans and Democrats fall over themselves year after year to feed the more than 1 trillion dollar “defense budget.” (Interested observers should consider that the official U.S. “Defense” budget just passed by Congress at $858 billion dollars annually – and supported nearly unanimously by members of both parties – does not include the gigantic expenditures for the VA Hospital system, the cost of the so-called “Intelligence” agencies that all conduct military operations, huge “black book” expenditures kept secret from Congress and the public, interest on the national debt on money borrowed for military wars and costs, for foreign military aid, and for many of the so-called “Space” projects and other high-tech endeavors that all amount to concealed military projects, among others. The Pentagon has failed every audit since 1990 Defense Spending Reaches Record High as Pentagon Fails Its Audit – For Fifth Time – Union of Concerned Scientists (ucsusa.org) and any reasonable accounting of the entire military budget would place it conservatively at more than $1.6 trillion dollars annually, almost double the advertised amount.)
Making matters worse, the situation of supposedly “regulated” monopoly industries such as public utilities must be appraised for their renewed monopoly characteristics. With deregulation waves having gutted or abolished meaningful government oversight of most electric, gas, telephone, water, sewer, sanitation, and cable television industries the price of all of these critical services have skyrocketed while reliability has sunk. Once again, monopoly control of these industries has allowed the private interests who own them to abscond with billions in super-profits while mismanaging the aging infrastructures. Even where ostensibly “public” ownership and control exists, the management of the concerns inevitably follow the corporate play book as the standard operating procedure.
John Bogle on “Parasitism and Decay”
No less an authority than John Bogle– founder of the Vanguard investment funds and capitalist extraordinaire – lamented late in his life that the U.S. and world capitalist investment scene had become captive to waste, fraud, rampant speculation, and an unsustainable momentum towards corporate lawlessness, all aided and abetted by government regulatory agencies looking the other way. In a 2014 interview Bogle summed it up. His conclusion that 99.2% of all U.S. stock and bond trading activity was speculative and parasitic, while only .8% was aimed at investment and capital formation, is astonishing. All indications are that this situation has worsened since that interview, with increasing amounts of capital now allocated to corporations created solely for their speculative profit possibilities often in open defiance of any reasonable chance of eventual conventional profitability. These “zombie” companies are in abundance, existing on a flow of investment capital instead of profits. The tech industry is overloaded with such firms, as is the rideshare sector and other so-called “disruptor” companies. Cryptocurrency corporate schemes fill a special corner of the “parasitism and decay” universe, with the product itself a mystery to most, its true value strictly based on daily speculation, the primary illicit uses for the product well known, and as the FTX swindle exposes many billions of dollars can be conned even from presumably intelligent investors in the search of elusive super profits. A sobering thought when John Bogle, a lifetime Republican, advocated more meaningful and systematic financial and corporate regulation than every U.S. political regime in more than 50 years.
Lenin’s Admonition to Turn Left
While parasitism and decay are but one symptom of a wider imperialist era, the logical end points of the forces playing out the imperialist process is war, even more ruthlessly exploited workers, expanded neo-colonialism worldwide, massive further environmental destruction, and the enrichment of the billionaire class on a new and astounding scale. The U.S. experience has shown the failure of regulatory and reformist “solutions” to the monopoly situation, among others. Lenin’s admonition of his time was for socialists and workers to move towards revolutionary, and not reformist goals and solutions, especially as that avenues for those reforms had been shut down. In Lenin’s time the revolutionary moment was delivered by the wartime conditions. Today, in the U.S., the avenues for reforms of any significant caliber are blocked by the sheer weight of the business control of virtually all aspects of governance. Even the most ardent and dedicated reformers and corporate regulators are exhausted, having worked for the last several decades with virtually nothing to show for it. Blocked at every turn by the corporate lobby, the corruption of both political parties, and the mind-numbing array of manufactured legal opposition to all corporate regulation. This leaves little way forward even for those wanting to – at least – slow the growing monopoly menace.
An overdue “left turn” in thinking and in action is urgently needed. I am reminded of the prophetic words of W.E.B. DuBois, in his letter requesting membership in the Communist Party in 1961; “Today, I have reached a firm conclusion. Capitalism cannot reform itself; it is doomed to self-destruction. No universal selfishness can bring social good to all.” And as the facts clearly show today, as they did in 1916, the labor and socialist movements will find a path forward by turning left and not merely turning farther into the swamp of blocked and therefore failed reformism and regulation. This is not to refute the role of reforms and regulations, to abandon them entirely, or to abandon agitation for them, but to recognize that the end path forward will not follow the reformist paths of the past. New and revolutionary roads must be devised, and then taken.
-Chris Townsend was most recently the Amalgamated Transit Union (ATU) International Union Organizing Director. Previously he was an International Representative and Political Action Director for the United Electrical Workers Union (UE), and he has held local positions in both the SEIU and UFCW.