Social Warfare keeps Johann Rupert awake at night

Social Warfare keeps Johann Rupert awake at night

Recent comments by South Africa’s most powerful business tycoon, Johann Rupert, gives interesting and penetrating insights into the current state of mind of the bourgeoisie. Rupert is clearly very disturbed by the current state of affairs, even admitting that they are keeping him awake at night.

Rupert-Johann-2004In a recent speech at the Financial Times Business of Luxury Summit in Monaco, a gathering for senior executives of the luxury goods industry, he said tension between the rich and the poor is set to escalate as robots and artificial intelligence fuel mass unemployment. “We cannot have 0.1 percent of 0.1 percent taking all the spoils,” he said to his fellow bourgeois friends surrounded by $130 million yachts, Macallan whiskey and Almas caviar.

He proceeded to ask his audience a loaded question: “How is society going to cope with the structural unemployment and the envy, hatred and social warfare?” This shows that Rupert has a clear grasp of the crisis his system is facing. The capitalist system has long ago ceased to be a progressive system, it now staggers along at an appalling cost to society. One of the key manifestations of this is the phenomenon of organic, structural mass unemployment which in South Africa officially stands at 25 percent. Rupert understands that this is a clear recipe for class struggle, and he admits that this is giving him sleepless nights: “We are destroying the middle classes at this stage and it will affect us. It’s unfair. So that’s what keeps me awake at night.”

He said that conflicts between social classes will make selling luxury goods more tricky as the rich will want to conceal their wealth. On this point, the Financial Times chipped in to give the rulers of our world some amusing advice: “Perhaps discretion will be in more demand: minimalist jewellery instead of bling; Audis instead of Ferraris; silver watches instead of gold chronometers. A yacht is hard to disguise, but it can be sailed out of sight of public beaches.” But it is unclear how wealth is to be concealed in a country like South Africa where the class divisions are so glaring that they are evident to the naked eye. Rich and poor literally stare each other in the face every day and both are disgusted at what they see. Rupert concluded his speech by giving his audience some disturbing advice: “We are in for a huge change in society. Get used to it. And be prepared.”

Johann Rupert knows a thing or two about “disturbing” changes in society from a bourgeois perspective. Together with the Oppenheimer family, the Ruperts were at the heart of efforts to  quell the revolutionary events of the 1980s and 1990s in South Africa, which nearly overthrew their entire system. In the end they were prepared to give all democratic rights to the masses as long as Capitalism as a whole was maintained.

Rupert knows the bourgeoisie intimately well. He is the chairman and chief executive officer of the Swiss luxury goods company Compagnie Financiere Richemont, which manufactures and sells jewellery, watches, leather goods, writing instruments, and menas and women’s clothes to the richest people on Earth. Their most famous brands include Cartier, IWC International Watch Co. AG, Jaeger-LeCoultre and Montblanc. Rupert also serves as Non-Executive Chair of VenFin and Remgro Ltd.

Johann Rupert can clearly hear the alarm bells going off. A few months back, he berated South Africa’s government for failing to address corruption and electricity shortages: “The leadership of this country, quite frankly, is becoming very, very hard to defend abroad,” Rupert told Remgro’s annual general meeting in Somerset West, near Cape Town. “The people who are running the country now were not given proper education [!]. Wherever you look we have got stagnation and really worrying signs.” Of course, this is rich coming from Rupert. The corruption which he is complaining about is of the bourgeoisie’s own doing. In their endeavour to stabilise South African Capitalism after the fall of the Apartheid regime, corruption as a means of controlling the new political elite and tying them to the bourgeoisie, was one of the main tools used by the ruling class. The problem now is that this has reached epidemic proportions. In the context of a sharp rise in the class struggle, the daily revelations about corruption which involves some of the most senior ANC leaders, including the Nkandla scandal which involves the president himself, is becoming a major cause for instability by enraging the tested South African masses.

At the same meeting in Somerset West, Rupert also had some gloomy news regarding the global economy. Asked by a shareholder about the company’s prospects, Rupert said the global economic outlook “is not looking too rosy”: “It doesn’t really matter who you listen to, whether it’s the IMF or whosoever, they are petrified,” he said. “The only way to get out of this is economic growth. I see nothing on the horizon to pull Europe out of its malaise.

These comments, by one of South Africa’s most influential bourgeois, strikingly confirms that some of the rulers of our world are deeply concerned about the state of their system. Some of them are overcome with a sense of dread and foreboding. Everywhere they look, they are confronted with a deep malaise in society. As a South African bourgeois, Johann Rupert can see nothing but trouble ahead. Recently he recalled author Ernest Hemingway’s quote that “man goes bust gradually … and then suddenly”. He believes South Africa was in the gradual stage, but the “sudden stage” could come at any time. It is not exactly clear whether or not Rupert knows it, but it is actually a profound dialectical quote, although from a deeply pessimistic point of view.

Johann Rupert only sees doom and gloom. But the bourgeois has every reason to dread the future. More than two decades ago the revolutionary South African proletariat came within a hair’s breadth of overthrowing capitalism. Only the lack of a revolutionary leadership prevented them from doing so. But today, the bourgeois faces a massive dilemma: whereas the ANC leaders of the past had enormous stature and authority, today’s leaders have very little of both. It would be very difficult for the current leaders to hold the masses back once they move to change society.

The capitalist system is in the middle of its deepest crisis ever, and it is global. Together with this, come roaring revolutionary mass movements from Egypt, Turkey, Brazil and Burkina Faso. On the other hand, Marxists look to the future with enormous optimism. Where the Johann Ruperts of the world are petrified by the advance of modern technologies like robots, Marxists welcome technological advances wholeheartedly. Under Capitalism advances in technology are solely aimed at improving the rate of profit and the bottom line. But under socialism, robots and other technologies will be used solely for human advances and needs. It would be a terrible mistake to believe that the ruling class will give up their position in society without a desperate fight to the finish. They will fight, claw and scratch to keep their privileges, interests and positions as the ruling class of society.

class warfare captain

Monopoly Monetary Elite Man

But all of their attempts would be no match for the strength of the workers and poor once they start to move. It is not the sudden “going bust” of mankind that Ruperts is prophesising, but the doom of his own class which is terrified by its own impotence in the face of the rising class struggle.

Reprinted from Bloomberg

Why We Must Stop Pre-Distributions to the Rich

Why We Must Upend PreDistributions to the Rich


You often hear inequality has widened because globalization and technological change have made most people less competitive, while making the best educated more competitive.

“The answer to this problem is not found in economics. It is found in politics.”

There’s some truth to this. The tasks most people used to do can now be done more cheaply by lower-paid workers abroad or by computer-driven machines.

But this common explanation overlooks a critically important phenomenon: the increasing concentration of political power in a corporate and financial elite that has been able to influence the rules by which the economy runs.

As I argue in my new book, “Saving Capitalism: For the Many, Not the Few” (out this week), this transformation has amounted to a pre-distribution upward.

Intellectual property rights — patents, trademarks, and copyrights — have been enlarged and extended, for example, creating windfalls for pharmaceutical companies.

Boom and Bust Man

Boom and Bust Man

Americans now pay the highest pharmaceutical costs of any advanced nation.

At the same time, antitrust laws have been relaxed for corporations with significant market power, such as big food companies, cable companies facing little or no broadband competition, big airlines, and the largest Wall Street banks.

As a result, Americans pay more for broadband Internet, food, airline tickets and banking services than the citizens of any other advanced nation.

Bankruptcy laws have been loosened for large corporations — airlines, automobile manufacturers, even casino magnates like Donald Trump — allowing them to leave workers and communities stranded.

But bankruptcy has not been extended to homeowners burdened by mortgage debt or to graduates laden with student debt. Their debts won’t be forgiven.

The largest banks and auto manufacturers were bailed out in 2008, shifting the risks of economic failure onto the backs of average working people and taxpayers.

Fiat Currency with QE monry printing

Fiat Currency with QE monry printing

Contract laws have been altered to require mandatory arbitration before private judges selected by big corporations. Securities laws have been relaxed to allow insider trading of confidential information.

CEOs now use stock buybacks to boost share prices when they cash in their own stock options.

Tax laws have special loopholes for the partners of hedge funds and private-equity funds, special favors for the oil and gas industry, lower marginal income-tax rates on the highest incomes, and reduced estate taxes on great wealth.

Meanwhile, so-called “free trade” agreements, such as the pending Trans Pacific Partnership, give stronger protection to intellectual property and financial assets but less protection to the labor of average working Americans.

Today, nearly one out of every three working Americans is in a part-time job. Many are consultants, freelancers and independent contractors. Two-thirds are living paycheck to paycheck.

And employment benefits have shriveled. The portion of workers with any pension connected to their job has fallen from just over half in 1979 to under 35 percent today.

Labor unions have been eviscerated. Fifty years ago, when General Motors was the largest employer in America, the typical GM worker, backed by a strong union, earned $35 an hour in today’s dollars.

Now America’s largest employer is Walmart, and the typical entry-level Walmart worker, without a union, earns about $9 an hour.

More states have adopted so-called “right-to-work” laws, designed to bust unions. The National Labor Relations Board, understaffed and overburdened, has barely enforced collective bargaining.

All of these changes have resulted in higher corporate profits, higher returns for shareholders and higher pay for top corporate executives and Wall Street bankers – and lower pay and higher prices for most other Americans.

They amount to a giant pre-distribution upward to the rich. But we’re not aware of them because they’re hidden inside the market.

The underlying problem, then, is not just globalization and technological changes that have made most American workers less competitive. Nor is it that they lack enough education to be sufficiently productive.

The more basic problem is that the market itself has become tilted ever more in the direction of moneyed interests that have exerted disproportionate influence over it, while average workers have steadily lost bargaining power — both economic and political — to receive as large a portion of the economy’s gains as they commanded in the first three decades after World War II.

Reversing the scourge of widening inequality requires reversing the upward pre-distributions within the rules of the market, and giving average people the bargaining power they need to get a larger share of the gains from growth.

The answer to this problem is not found in economics. It is found in politics. Ultimately, the trend toward widening inequality in America, as elsewhere, can be reversed only if the vast majority join together to demand fundamental change.

The most important political competition over the next decades will not be between the right and left, or between Republicans and Democrats. It will be between a majority of Americans who have been losing ground, and an economic elite that refuses to recognize or respond to its growing distress.

Robert B. Reich is the chancellor’s professor of public policy at UC-Berkeley and former secretary of labor under the Clinton administration. Time Magazine named him one of the 10 most effective cabinet secretaries of the 20th century. He is also a founding editor of theAmerican Prospect magazine and chairman of Common Cause. His new film, Inequality for All, was released in 2013. You can follow him on Twitter at @RBReich.

Will Not Happen Under Capitalism

13 things that cannot happen under Capitalism:

  1.  Full employment
  2. The end of poverty
  3. World peace

    Why Do I Care ?

    Why Do I Care ?

  4. Decolonization
  5. Full equality of all social classes
  6. A lastingly stable economy
  7. Abolition/effective reformation of prisons/schools
  8. Ethical consumption
  9. Permacultural and fair global food system
  10. Retirement of all senior citizens
  11. Functional anarchy (looking at you, an-caps)
  12. Free association
  13. Direct democracy