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His own words: The 14 principles of 'Xi Jinping Thought' – BBC Monitoring

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Sam Webb: Democracy, Socialism, and the Communist Movement

Democracy, Socialism, and the Communist Movement

• OCTOBER 27, 2017

Below is my reply to my good friend Juan Lopez, who thoughtfully commentedon an earlier post of mine. In hope of making it intelligible to the reader, it's written as five separate "observations." I know it's long, but I hope you will give it a read anyway. Thanks again to Juan.

1. My concern is with concentrated political power in a socialist society. This wasn't always so, but in the wake of the meltdown of the Soviet Union and much of the socialist world, it seemed like a no-brainer to take a fresh look at my thinking on this crucial matter (and many others). Standing in place made no sense to me.

Engels once said that revolutions by their very nature are "authoritarian." And the socialist revolutions of the 20th century gave proof to his observation. What Engels didn't anticipate was that the authoritarian moments of the revolutions in Russia and other countries would become but the first step in the centralization and monopolization of power by the communist parties that led them. As a result, after a short burst of freedom and mass participation, democracy and democratic institutions in workers' states turned hollow and formal; civil society, not the state, withered away; dissent retreated into the kitchen; competing parties were illegalized; and in the Soviet Union during the Stalin era, massive crimes were committed.

Socialism thus never became a democratic society of "self-governing producers," as envisioned by Marx and Engels. Notwithstanding the official rhetoric and ideology of the ruling communist parties, the working classes didn't become the architects and creators of a classless society in which "the free development of each is the condition for the free development of all." (Marx and Engels, Communist Manifesto) Nor was the state transformed from "an organ dominating society into one completely subordinate to it." (Marx, Critique of Gotha Programme) Instead, a command economy, a top-down political structure, a massive internal "security" apparatus, an overreaching state, and Marxist-Leninist parties that brooked no competitors became socialism's template — in the Soviet Union in the first place.

Twentieth century socialism, of course, did achieve successes, domestically and internationally, including some that were historic. Moreover, those successes were secured in conditions of economic backwardness and feudal traditions, not to mention invasions, blockades, and cold war.

But neither the achievements nor the difficulties erase the long arc of unfreedom that hung over and deeply wove itself into the fabric of socialist societies in the 20th century. Ultimately, this pervasive and persistent deficit proved to be a huge factor in undoing the Soviet Union and the Eastern European socialist countries.

And yet, through most of my years in the Communist Party USA, we ignored, minimized, and, on many occasions, justified, this reality. In doing so (and I say this in hindsight — I was on board with our talking points for much of that time), we compromised our politics, moral authority, and socialist vision.

How can we explain this?

Any explanation begins with the party's uncritical attitude towards the Soviet Union. Criticism of the premier country of socialism was a no-no, though there were a few brave souls who did. Gil Green, who'd headed the Party's youth organization in the '30s, spent years in a federal penitentiary, during the McCarthy period, and was a national leader for decades, publicly opposed our support of the Soviet intervention in Czechoslovakia in 1968. For this (and other positions that went against the party's positions) Gil was turned into an outlier.

But for most of us, criticism of the Soviet Union was the last thing on our minds. The first land of socialism, after all, had transformed a backward society into a powerful and advanced socialist country in the face of a bloody counterrevolution, proved decisive in the defeat of Nazi Germany, and was the foremost adversary of U.S. imperialism in the last half of the 20th century.

Moreover, the "Great October Revolution," was the stuff of legend in the communist movement. It enjoyed a revered status, provided tons of inspiration, and, to a degree, constituted a model of what a revolution should look like.

Indeed, the images of the October Revolution — dual power, insurrection from below, sharp breaks and ruptures, relentless struggle against right opportunism and liberalism, and the indomitable Lenin and his "party of a new type" — captured the imagination and fired the enthusiasm of U.S. communists. To be fair, though, the party also projected a more expansive vision, dictated by concrete realities and the country's democratic and radical traditions of struggle.

Finally, the Communist Party of the Soviet Union, in our view, stood at the center of the world communist movement. It didn't necessarily issue directives, but then it didn't have to. When it talked, we listened, as did many other communist parties around the world.

It was, in effect, above reproach. Even Stalin's massive crimes were, in our ideological-political gymnastics, if not fully justified, seen as a necessary price to pay, given the hostile conditions in which socialism was being built.

This uncritical attitude toward the USSR (and other socialist countries aligned to Moscow) was reinforced by our knee-jerk understanding of working class partisanship and an instrumentalist (ideas are instruments of action and their usefulness depends on their practical utility) and economistic approach to socialist democracy.

Working class power and state ownership of the means of production were considered the hallmarks, the true core, of socialism. By contrast, broad and meaningful democratic participation in every sphere of life were reduced to a means, not an end; not an indispensable feature of socialist society.

If it came down to a choice between the consolidation of class power (narrowly defined) or democracy in our calculus, it was no choice at all — class power won every time. The evisceration of socialism's democratic essence barely received a second thought. Never did we consider the political, human, and moral costs to socialism of such a posture and practice.

Is it any wonder then that when tens of millions of people, from Berlin to Moscow, took to the streets to express their dissatisfaction with socialism as they had experienced it, too many of us were dumbfounded and deaf to their democratic aspirations and desires. Our worldview, not surprisingly, couldn't accommodate their voices.

Instead, we vilified, with the fury of a lover spurned, Mikhail Gorbachev and his team of socialist and social democratic reformers, most of whom came of age during the "Khrushchev thaw," as class traitors, right-wing opportunists, and worse. Meanwhile, we nostalgically hoped against hope for a return to the glory days of Soviet power. And other than attaching the phrase "Bill of Rights" to the word socialism, we dug in our heels and doubled down on "Marxism-Leninism." A deep rethink of socialism and the role of communists wasn't in the cards at that point.

Of course, not everyone was of this mind. In fact, it was at our fractious national convention in Cleveland in 1991 that someone of stature stated forthrightly that Stalin should be unequivocally condemned.

That someone was Herbert Aptheker, a long-time party leader and an outstanding historian. Aptheker, who ironically had been an ardent defender of Soviet power earlier, declaimed with great passion that Stalin was guilty of unconscionable crimes, not mistakes.

The breaking of the silence on this matter, however, was only momentary. Soon after that convention, Aptheker and nearly half of the membership left the party and any discussion of Stalin's bloody and dictatorial rule and its degradation of the spirit and essence of socialism went with them.

In fact, not long after the convention, Ken Cameron, at the time a professor at New York University, presented to the party's National Board an unapologetic defense of Stalin. Although many of us were taken aback by his over-the-top apologia, neither I nor anyone else challenged him. It was only after Gus Hall's reluctant exit from his position as party chair in 2000 (at the age of 89) that the atmosphere changed and allowed for a critical look at Stalin, as well as a rethink of the nature of socialism and socialist democracy.

I won't speak for you, Juan, but I was ready to move on at the time. And had been for a while. Actually, not too long after the last rites were administered to the brightest star — the Soviet Union — in the galaxy of socialist states in 1991, I began a process of re-examination of the ideas and practices that had guided me since the 1970s, much of it while riding on a daily commuter train between New York and New Haven where I lived at the time.

In the course of this process, I came to realize that much of my thinking needed either a tune up or a complete overhaul. But to go into this is in any length is beyond the scope of this reply. Here, though, I will mention few things that pertain to our discussion.

First, I came to believe that the gateway to socialism and the realization of its full potential is ineluctably anchored in the broad democratic engagement of millions, in the self-empowerment of formerly subordinate classes and people in every sphere of life, and in substantive democracy and equality at every phase of the revolutionary process.

I also arrived at an understanding, first tentative and now definitive, that our depreciation — at times expunging — of democratic values, practices, and voices in socialist societies wasn't simply a result of the unyielding logic of events and adverse circumstances in Russia and elsewhere. It was also a result of our reduction of democracy to a secondary status relative to class and socialist struggles; our clumsy, undialectical embrace of economic determinism and the base-superstructure model; our distorted reading of Soviet history; our notion of the role of vertically organized and centrally directed "parties of a new type;" and our narrow — no wrongheaded — understanding of power and its dynamics at each phase of the revolutionary process.

Finally, I reached the conclusion that parties and movements of the left and marxism itself, if they are going to retain their vitality, have to be self-reflective and allow for critique of their premises and practices. And this has to be combined with the courage to move in new directions, even where it means going against the grain of long-held understandings and institutional practices.

2. I agree that power and democracy, as you write in your reply to me, should coexist and reinforce one another in socialist society, but I would add this caveat: such a relationship only works when power is rooted in a dense network of democratic institutions, parties, and practices, not to mention subject to legal and constitutional limits on its scope and exercise.

And unfortunately, this wasn't the case in 20th century socialist societies. There the locus of power was in the tight grip of the General Secretary and the Political Bureau of the ruling communist parties.

In these circumstances, power and democracy didn't reinforce each other. In fact, as power became the exclusive franchise of the vanguard parties, popular democracy and civic activism became formalities in nearly all the socialist countries. Rather than democracy and popular participation deepening and expanding, they wilted, even though the outward democratic trappings remained.

In monopolizing power, the party/the communists turned the main creative force of socialist society — the people — into passive spectators and cynical observers. By the end, they became opponents of the existing regimes and of socialism itself.

I do realize that deep-going democratization is not easy, and that it brings considerable tensions, difficulties, and dangers. Robust democracy can be discordant and fractious. It can also become, as you say, a platform for people, parties, and social classes that are bitterly hostile to socialism and democracy.

You cite the example of the so-called "Southern Redeemers," who took advantage of democratic freedoms in the post-Civil-War South, the withdrawal of the Union army, and the use of unspeakable terror to restore themselves to power and institute a new racist order. To this we could add Nixon's electoral "Southern Strategy" that was in large measure a reaction to the civil rights revolution. And then there was the ascendancy of right-wing extremism in the 1980s that was a predictable push back against progressive democratic and cultural shifts as well as economic changes since the end of World War II.

On an international plane, the examples where counterrevolution followed on the heels of socialist advances are legion: Russia, Chile, Venezuela, to name a few.

Nevertheless, the danger of counterrevolution, as real as it is, can't become the rationale to submerge democratic values, structures, and practices until a more propitious moment arrives.

Lenin himself said,

"It would be a fundamental mistake to suppose that the struggle for democracy can divert the proletariat from the socialist revolution, or obscure, or overshadow it, etc. On the contrary, just as socialism cannot be victorious unless it introduces complete democracy [my boldface], so the proletariat will be unable to prepare for victory over the bourgeoisie unless it wages a many-sided, consistent and revolutionary struggle for democracy."

Or to put it differently, democratization is socialism's force multiplier by which people gain new understandings, deepen and extend their unity, and learn to govern a society that prioritizes non-exploitive, egalitarian, nonviolent, ecological, and humanist social relations. But more than that, democratization is the vector through which newly empowered people bring their creative energies and insights to bear on the problems, contradictions, and possibilities of any socialism that hopes to reach higher ground.

The German socialist Rosa Luxemburg famously wrote,

"Socialism in life demands a complete spiritual transformation in the masses degraded by centuries of bourgeois rule … No one knows this better, describes it more penetratingly; repeats it more stubbornly than Lenin. But he is completely mistaken in the means he employs. Decree, dictatorial force of the factory overseer, draconian penalties, rule by terror – all these things are but palliatives. The only way to a rebirth is the school of public life itself, the most unlimited, the broadest democracy and public opinion."

"Without general elections, without unrestricted freedom of press and assembly, without a free struggle of opinion," Luxemburg continued, "life dies out in every public institution, becomes a mere semblance of life, in which only the bureaucracy remains as the active element. Public life gradually falls asleep, a few dozen party leaders of inexhaustible energy and boundless experience direct and rule."

This is not an argument against political parties or capable leaders. But it is an argument for more than one party and for leaders who understand that the art of leading consists in resisting the real pressures to centralize power at various moments of the revolutionary process, while, at the same time, creatively facilitating its decentralization and devolution to people and democratic institutions.

It's an argument for an independent media, regular elections, and the periodic replacement of leaders. It's an argument for the embedding of democracy and egalitarianism in the culture and every sphere of life in socialist society.

It's also an argument for prohibitions on the exercise of unchecked power by governing authorities and individuals, no matter how unimpeachable their socialist pedigree, oratorical talents, and revolutionary credentials.

The abysmal record of the socialist countries on issues of democracy and constitutional rights prompted the following observations by the great British historian, E.P. Thompson:

"I am told that, just beyond the horizon, new forms of working class power are about to arise which, being founded upon egalitarian productive relations, will require no inhibition and can dispense with the negative restrictions of bourgeois legalism. A historian is unqualified to pronounce on such utopian projections. All that he knows is that he can bring in support of them no evidence whatsoever. His advice might be: watch this new power for a century or two before you cut down your hedges." (Whigs and Hunters)

I'm not sure if there are any guarantees that power, whether wrested either all at once or by degrees, will then be decentralized and distributed to democratic institutions, civil society, and people generally. So far there is scant evidence in the historical ledger for such a dynamic. But, by the same token, history doesn't rule it out either.

Frederick Engels presciently wrote in 1895:

" The time of surprise attacks, of revolutions carried through by small conscious minorities at the head of unconscious masses, is past. Where it is a question of a complete transformation of the social organization, the masses themselves must also be in it, must themselves already have grasped what is at stake, what they are going in for with body and soul. The history of the last fifty years has taught us that."

A few decades later, Italian communist leader Antonio Gramsci, writing from a prison cell in fascist Italy argued that millions of people will have to acquire a new "common sense" — a new set of values, sensibilities, and understandings — if they hoped to scale the ramparts of capitalism and build a democratic socialist society. (Prison Notebooks)

If the formation of an aroused and politically astute majority is a necessary condition for effecting a transition to socialism, doesn't it follow, especially in the harsh light of socialism's egregious failures in the late 20th century, that the presence of a majoritarian movement of millions, distinguished by its depth of understanding, democratic sensibility, and sustained activity, remains as vital in the socialist phase of the revolutionary process, if socialism's democratic and liberating potential is to see the light of day.

Who else will be the protagonists for and guardians of democracy at every stage of socialism's development? Who else has the capacity to demand that power be embedded in every crevice of social life? Who else will be able to resist the likely entreaties, usually in the name of short-term expediency and at the urgings of authoritative leaders, to centralize power?

Again, I'm not arguing against leaders and parties. Indeed, both Engels and Gramsci, each in their own way, were insistent that a leadership in the form of a political party of the left, possessing strategic depth, tactical acumen, political creativity, and organic connections to the masses of people, was absolutely necessary.

But "vanguard" parties, as they evolved in the 20th century didn't fit this bill. They were too narrowly constructed — theoretically, politically, organizationally, and culturally. Thus, some other formation or party or movement — call it what you will — constructed on new foundations and embracing new sensibilities is necessary.

What will it look like? The answer to that question will take a larger conversation among today's activists. I will only make a few brief observations:

First, a new formation of the left will make a difference only if it possesses a deep democratic, egalitarian and ecological disposition and distinguishes itself by its commitment to such practices at every phase of struggle.

Class, class struggles, and class power are social categories of great analytical and practical power. And they should figure prominently in the analysis and activity of the left. But they will limp if they claim a singular status that reduces everything else to a subordinate, ancillary role. It is in their dialectical connection and mutual constitution with race, gender, and other social categories and struggles that they acquire their greatest capacity to shed light on questions of theory, strategy, and political program and their maximum power to effect political transformations.

Class-economic populism fails this test. And thus it is no match for an authoritarian president and the right wing generally that traffics heavily in racist (especially anti-black), misogynist, anti-immigrant, and hyper nationalist rhetoric and policies. Nor will it acquit itself any better over the longer term when more radical-democratic-egalitarian strivings and alternatives arise. Anything that takes the struggle against racism, which should be uppermost and constant in the democratic, progressive, and radical mind, out of the field of vision relinguishes its transformative power.

Second, a new formation of the left should operate on the assumption that a militant minority is no substitute for an immense majority. Indeed, only such a majority, energized by democratic and egalitarian as well as class desires, resisting racism, sexism, and other backward ideologies and practices, and resting on the strategic alliance of working people, communities of color — the African American people in the first place — women, immigrants, and young people, has the capacity to turn emancipatory dreams into embedded social realities.

Third, a keen strategic eye that takes into account the actual balance of forces in society and the class and democratic tasks that follow is imperative. While broad abstractions should have a place in any analysis and methodology, they are but the starting point in the elaboration of program, strategy, and tactics. Concreteness is imperative.

Fourth, the revitalization of the labor movement should be high in its priorities, although to think that labor's role in any progressive turn in the near term will mirror labor's role in the people's surge of the 1930s is wishful thinking. Labor's full revitalization, more likely, will come on the heels of an actual political turn in a progressive and left direction.

Fifth, electoral-democratic politics should be figure at the center of its activity. It should reject any suggestion that electoral politics is a lesser-order form of struggle or its counterposition to struggle in the streets. It is hard to envision any movement toward, or transition to socialism in which electoral politics and the electoral path don't play an outsized role.

Sixth, marxism should occupy a prominent, but not exclusive, place in its theoretical activities. And analytical weight should rest on the development of theory and policy in line with new experience, conditions, and challenges. Nor should its theoretical work be a strictly in-house affair; a dialogue with the broader movement would serve everybody well.

Finally, if the left hopes to move into the mainstream and become a major player in U.S. politics, it has to scrub out the sectarian modes of thinking, habits, and practices from its politics and culture. After a half century on the political stage, they deserve a fitting, but immediate burial.

3. I agree, Juan, that the Cuban experience is unique. It is fair to wonder if Cuban socialism could have survived in the face of the relentless pressure from U.S. imperialism without the leadership of Fidel Castro, Raul Castro, and others, not to mention the courage and determination of the Cuban people.

Like you, I consider the extension of economic and social rights to the Cuban people for the first time, the creation of popular, if not perfect, forms of democratic governance, the solidarity extended, time after time, to the people of the global south fighting imperialism, and its overcoming of the special period after the Soviet Union fell extraordinary feats, given the unrelenting pressure on them from the U.S. government.

And also like you, I consider Fidel Castro to be a remarkable and inspirational leader to hundreds of millions worldwide.

And yet it seems to me — and I'm no expert on Cuba — that the Cuban socialist model never fully moved out of its top-down configuration. Perhaps that has begun to change in recent years. At any rate, I don't think that such a model, as I have written above, is in keeping with the desires and sensibilities of people in this century. Something else is necessary — more substantive democracy — if socialism is to measure up to its claims.

4. As we ponder what a transition to socialism might look like in our country, the experience and difficulties of countries like Chile and Venezuela is worth studying, as you mention. In both cases, as you also mention, the political/electoral terrain of struggle was utilized by the left coalitions in both countries. In Chile the socialist oriented government of Salvador Allende was crushed a half century ago and in Venezuela, the movement begun and led by Hugo Chavez, is encountering powerful opposition from within and outside the country — from our government in the first place.

And yet I don't think, and I know you agree, that the utilization of the political/electoral path here should be mothballed because of these difficulties, complexities, and results. In fact, I'm sure we agree that the experiences of both countries reveal not only the difficulties, but also the possibilities of this terrain of struggle. Thus, the challenge is — and I'm sure we're on the same page — to study and learn from this experience so that when the American people begin such a journey we are prepared to negotiate this difficult terrain in our march to a new society.

5. In your observations on the overthrowing of Reconstruction in the South following the Civil War, you note the decision to withdraw federal troops from that region gave the defeated political bloc of former slave owners and its other white allies a clear field to reimpose its bloody, racist rule. I couldn't agree with you more, but I would also add that another factor that contributed to this outcome was an earlier decision by the Congress to limit the democratization process in the war's aftermath.

This limitation of democracy tellingly included the refusal of Congress to legislate radical redistribution of land in the former slave states, as advocated by Thaddeus Stevens and some other radical Republicans. Such a measure would have provided an independent base for a new class of Black and white yeoman farmers. It would also have cut the economic (and political) legs out from under the politically defeated slave holding class and its allies. But the demand for "40 acres and a mule" died stillborn.

What resulted was a new form of debt peonage and servitude that ensnared both former slaves and poor whites into a web of super-exploitation and dependence. And when combined with the withdrawal of the Union army, a rollback of democratic rights, and the unleashing of terror against the Black community, the fate of Reconstruction was sealed and a new order — Jim Crow — was violently born. And for the next 75 years it reigned.

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John Case
Harpers Ferry, WV

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Enlighten Radio Podcasts:Podcast: The Moose Turd Cafe: 10.30.17 Insect Armageddon and a Meuller Omelet

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Enlighten Radio:The Moose Turd Cafe AND The Halloween Poetry Show -- MONDAYS!!

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Paul Krugman: Trump’s Deadly Narcissism

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Paul Krugman: Trump's Deadly Narcissism // Economist's View
http://economistsview.typepad.com/economistsview/2017/09/paul-krugman-trumps-deadly-narcissism.html

"Trump truly is unfit for this or any high office":

Trump's Deadly Narcissism, by Paul Krugman, NY Times: According to a new Quinnipiac poll, a majority of Americans believe that Donald Trump is unfit to be president. That's pretty remarkable. But you have to wonder how much higher the number would be if people really knew what's going on.

For the trouble with Trump isn't just what he's doing, but what he isn't. In his mind, it's all about him — and while he's stroking his fragile ego, basic functions of government are being neglected or worse.

Let's talk about two stories that might seem separate: the deadly neglect of Puerto Rico, and the ongoing sabotage of American health care. What these stories have in common is that millions of Americans are going to suffer, and hundreds if not thousands die, because Trump and his officials are too self-centered to do their jobs.

Start with the disaster in Puerto Rico and the neighboring U.S. Virgin Islands.

When Hurricane Maria struck ... it knocked out power to the whole of Puerto Rico, and it will be months before the electricity comes back. Lack of power can be deadly..., but what's even worse is that ... much of the population still lacks access to drinkable water. How many will die because hospitals can't function, or because of diseases spread by unsafe water? Nobody knows. ...

So have we seen the kind of full-court, all-out relief effort such a catastrophe demands? No. ...

Trump spent days after Maria's strike tweeting about football players. When he finally got around to saying something about Puerto Rico, it was to blame the territory for its own problems.

The impression one gets is of a massively self-centered individual who can't bring himself to focus on other people's needs, even when that's the core of his job.

And then there's health care.

Obamacare repeal has failed again, for the simple reason that Graham-Cassidy, like all the other G.O.P. proposals, was a piece of meanspirited junk. But while the Affordable Care Act survives, the Trump administration is openly trying to sabotage the law's functioning. ...

Why are the Trumpists doing this? ... A.C.A. sabotage is best seen not as a strategy, but as a tantrum. We can't repeal Obamacare? Well, then, we'll screw it up. It's not about achieving any clear goal, but about salving the president's damaged self-esteem.

In short, Trump truly is unfit for this or any high office. And the damage caused by his unfitness will just keep growing.


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Re: [socialist-econ] International evidence shows that low corporate tax rates are not strongly associated with stronger investment

Very important srticle!!  Thanks very much. JOHN!!!

On Oct 29, 2017 7:00 AM, "John Case" <jcase4218@gmail.com> wrote:

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International evidence shows that low corporate tax rates are not strongly associated with stronger investment // Blog | Economic Policy Institute
http://www.epi.org/blog/international-evidence-shows-that-low-corporate-tax-rates-are-not-strongly-associated-with-stronger-investment/

The Trump administration's Council of Economic Advisers (CEA) released a paper last week arguing that cuts in the statutory corporate tax rate would lead to gains in business investment, productivity, and wages. I noted in a piece released yesterday why this was unlikely to be true.

The key piece of evidence the CEA claimed was "highly visible in the data" and showed the wage-boosting effect of corporate tax cuts was simply a graph that showed faster unweighted wage growth in just two years in a set of "low-tax" countries relative to a set of "high-tax" countries. I noted in my paper yesterday why this was so unconvincing: a serious test of this claim would look at corporate tax rate changes (not levels), would look over a longer time-period than four years, and would not allow three countries with a combined national income that is less than 0.4 percent of American national income to drive the results.

But, the CEA report did make me curious if we would see anything "highly visible in the data" linking changes in statutory corporate tax rates to nations' capital stocks. The key theory behind claims that corporate rate cuts will boost wages is the idea that these rate cuts will lead to substantially faster investment in productivity-enhancing plants and equipment, boosting the nation's capital stock and making workers more productive. We can assess the first link in that chain of causation below, asking simply "are lower corporate tax rates associated with a larger capital stock"? Figure A shows a scatterplot of the relationship between the average statutory corporate tax rate between 2000 and 2014 the capital-to-labor ratio in 2014. The hypothesis is that low-tax countries should have attracted more capital investment and hence should have accumulated a large stock of capital relative to their workforce by the end of the period. (The data on capital stocks and employment comes from the Penn World Table 9.0.)

Figure A

As the trendline through the scatter indicates, the relationship actually goes the wrong way—countries with higher corporate tax rates over this period had larger capital stocks by 2014. This positive relationship is not particularly significant, either statistically or economically, but that's largely the point: tax cuts are an extremely weak lever with which to attempt to move capital investment.

Some might argue that looking at the average rate over a 14 year period might hide the fact that some countries went from high rates at the beginning of the period to low rates in the end. In this case, the large change in rates could likely have affected capital investment, but this would be obscured by our long-run averages. This is fair enough—though it highlights once again the CEA report's inappropriate use of averages over a short-run period. But Figure B below shows the change in corporate tax rates versus the growth rate of capital inputs into production (a measure of capital investment used in productivity analysis).

Figure B

Again, the correlation here goes the wrong way for sustaining claims that slashing corporate rates would increase capital investment; countries that saw larger reductions in the statutory rate saw slower growth of capital inputs.

The international evidence presented above just re-confirms what we already know: no binding constraint on American economic growth exists today that would be helped at all by cutting corporate income taxes. Instead, such cuts would simply boost incomes for owners of corporations—a group that is already overwhelmingly among the richest households in America. Promises of gains to investment, productivity and wage growth that will force these tax cuts to trickle down to typical American households are completely empty.


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