I used to pass by The Moderate Voice once in a while. I stopped when the ‘moderate’ voice seemed to always be right-of-center. So I was surprised to find a great essay on the connection between the kind of crony corrupt capitalism that conservative Republicans have become champions of and the threats that kind of corruption is to democracy. What Capitalists Don’t Know: Without Democracy, Capitalism Dies
In the 1990s renowned political scientist and author Ben Barber wrote in Jihad vs McWorld that global capitalism was at war with democracy. He was right, of course, and the intensity of that war has only increased since then. Global corporations are battling democracy’s environmental regulations, taxation, labor laws, legislation aimed at fairness or income equality. They are battling democracy’s concern for the long-term survival of community or any values more human than economic.
Emblematic of the global assault is the massive campaign by Canadian oil and gas corporations to construct a transcontinental pipeline across the American heartland regardless of local environmental consequences. Emblematic, again, are the mining corporations suing Ecuador in the WTO to open up that country’s rivers, forests and indigenous landscape to destruction. Emblematic is the 2005 exemption of “fracking” from the U.S. Clean Water Act resulting in millions of gallons of poisoned waste water, allowing global corporations like Halliburton, (headquartered in Dubai), to override the interests of local American governments, farmers, ranchers and cities. Emblematic is Wal-Mart’s aggressive activity in Mexico, consciously subverting the rule of law. Democracy is not strong in Mexico; Wal-Mart has not made it stronger.
A symbol of the global war is in that one five-story building in the Cayman Islands which is the address of more than 18,000 corporations. The Caymens do not levy income taxes. So all the corporations that call that home are opting out of their responsibilities in the U.S.. Apple, Google, and Bank of America are exemplars. They say that they are simply following the tax code and being headquartered in the Caymens is not illegal. That’s right. But they are also turning their backs on an American society that gave them educated workers, roads and bridges, science, health care, and above all, courts and the rule of law. What these corporations do not say is that they spent millions lobbying the U.S. Congress to make tax havens legal. They have made it legal but they have not made it right.
It is clear that these offshore havens create a crisis for democracy by squeezing the money out of government. What may be less clear is that these legislated special privileges also create a crisis for capitalism. In the very short term capitalism may not look like it is in trouble: Major corporations are reporting record profits. Bonuses on Wall Street in 2010 exceeded $90 billion. The Dow Jones in 2012 has been mostly above 13,000. Wall Street appears to be healthy. A Republican-led U.S. House of Representatives thinks it will get even healthier if we just eliminate all government regulations.
Never was an elite in greater delusion. Predatory capitalism is killing the middle class goose that lays the golden egg. That’s the first danger. Secondly, it is unselfconsciously driving toward unlimited exponential growth that is producing climate change which eventually will lead to social and economic chaos. In the longer term therefore capitalism is killing the eco-system that makes golden geese possible. Finally, in both short and long terms capitalism’s oligarchs and supporters in Congress are fixated on a flimsy free market doctrine. In sum, the crisis of capitalism is created by the fact that today’s oligarchs still understand the world in terms appropriate for the agrarian 18th century, are opposed to regulation as if they were combatting a revolution of the proletariat, and their theoretical doctrine is to return to the simplicity of corporate life in times when monopolies were granted by kings.
The result is that today’s 1% are squeezing the blood out of the middle class, creating conditions of predictable eco collapse, and have no doctrine more sophisticated than Ayn Rand. But these, even combined, are not even the greatest danger that capitalism faces. The even greater danger to capitalism is plutocracy’s blindness toward the advantages that come from democracy. These are advantages in innovation, mobility, creativity, and productivity that all arise with popular government. Oligarchs have missed this point entirely. This month The New York Times carries a quote from a former Bain Capital associate of Mitt Romney’s who says, quite literally, “At base, having a small elite with vast wealth is good for the poor and middle class.” He could be an English aristocrat on the eve of the American Revolution.
What the Bain Capital investor and the rest of the elite do not seem to understand is how much he and they depend upon democracy. A prosperous economy requires reliability in contract, truth in science and medicine, widespread, popular education, and nonviolent processes of change. Without these, markets shrink, innovation is endangered, mistrust and corruption replace nonviolent process, and plutocrats themselves become insecure. For examples, look anywhere in the non-democratic world. Look at what is happening in China this month. Bo Xi Lai’s fall, and the power struggle in China that it represents, is no different than the fall of the Caesars, the Borgias, the Stewarts or the Bourbons. Insider power struggles, wrapped in secrecy and murder, rumors of pay offs and spying by one aristocrat upon another, are the hallmark of medieval Europe and still today of Russia, Central Asia, and Latin America, to say nothing of China.
Undermining democracy as the plutocrats seem wont to do undermines all values of equality and mutuality and, without these as a restraint, power concentrates, feudalism creeps back, plutocracy takes over and capitalism is itself endangered. Without democracy, the narrative to expect is like that of the Caesars killing the Republic in Rome, or the Medici’s suffocating the Republic in Florence, or communists stamping out the people’s revolution in 20th century Russia. They all tried democracy a little bit. But they then slid into plutocracy and cut themselves off at the knees.
We therefore live in a time of two crises, one of democracy, another of capitalism. They are intertwined. The solution to the democracy crisis is probably the only long lasting solution for the capitalists. Apparently, most corporate leadership does not understand this. Unfortunately, without that understanding today’s oligarchs are apt to bring both down.
Craig Barnes is the author of Democracy At The Crossroads, Princes, Peasants, Poets and Presidents Struggle for (and against) the Rule of Law. His website is http://www.craigbarnes.com
Most Democratic bloggers say the same things in smaller chunks almost every day. It’s nice to see a condensed version of what we’re talking about put so well in one place. The part that addresses the environment is one of the issues hard to get across. The far Right and even some liberals make it sound it is all about saving polar bears or some little known fish. While those are real issues they are also symbols of the larger issue of sustainability. To under stand that it helps to have had some science education or done some reading on one’s own. With a few exceptions politicians are awful at explaining how the economy depends on clean water, healthy oceans, mountains whose tops are not dynamited by mining companies. There is no economy without the environment. There is just those dystopian science fiction films come to life. The majority of American workers wage slaves in a joyless society who needs a dictionary to explain what picnics and surf fishing were. The crony capitalist are like cocaine addicts. Some studies have shown that some people get off on money (and power) the way some people get off on drugs like cocaine. So while we’re talking about politics and public policy on one level, underneath we’re talking about an addiction to destructive behavior. And like any other hard-core addict the vulture capitalists will do or say whatever they feel they need to in order to continue getting high. I don’t think anyone would care that much if the addictions of the top ten percent were manageable and mostly self-destructive. Conservatives are satisfied with keeping their anti-democracy ways a personal matter, they’re foisting them on the entire country. And since The U.S. still wields so much economic power we’re forcing it on the rest of the world as well. It was the conservative claim via Milton Friedman – that capitalism was inexorably linked with freedom. If you’re buying and selling stuff in a free market system, political freedom follows. Political leaders in China probably think of Friedman as a stand-up comedian since they’ve proved you can have a fired up capitalism without the political freedom. It looks like the Paul Ryan’s(R-WI), Romneys, Koch brothers, Sheldon Adelson and assorted conservative patrons of crony capitalism are going to also going to prove that the top ten percent can still keep their money, their power, their freedom, while destroying freedom for everyone else.
Barack Obama has been rightly dinged from the left for his soft approach to Wall Street, but there’s a reason why Big Capital is shunning him and pouring money into Romney’s campaign. Romney’s answer to the financial meltdown is to do absolutely nothing; to abandon even any pretense of reining in Wall Street bad behavior, to return us to the pre-crash regulatory status quo.
That’s suicidal. The U.S. economy may well skip over JPMorgan’s folly without any serious long-term damage. But that’s not the point. What we learned from the financial crisis is that the real danger inherent in Wall Street’s endless orgy of speculative trading is the prospect that multiple bets could go bad simultaneously when there is a big external shock to the system — like the housing bust. That’s when a downturn becomes a crash.
I can’t say with certainty that Dodd-Frank will do a good job of protecting us from a replay of the great financial crash of 2008. But the prospect of electing someone as president who is promising Wall Street that he will let them blithely self-regulate? That seems even stupider than JPMorgan’s $2 billion bad bet.
Let’s see. Those crazy leftist radicals who wanted stricter regulation, a strong Volcker Rule and to bring back Glass-Steagall would have saved JP $2 billion dollars. The conservatives who try to pass themselves off as free market mavens got their way and it cost $2 billion. In summary Those who want more regulation and competition are called decent Americans, those against are oligopolists crooks.
Make no mistake: all this Ayn Rand libertarian me-first-and-the-rest-of-you-go-to-hell stuff — the there’s-no-government-like-no-government theology that’s now being piously intoned as Holy Received Truth by everybody, male and female, in the GOP — is, very precisely, the kind of politics you’d come up with if you were a 16-year-old boy trying to explain away his dependence on Mom.
Parents? I don’t have any parents. I raised myself, on roots and berries and small vermin I dug up in vacant lots. That lady hanging around, feeding me and nagging me and picking up my socks and driving me to practice? She’s just the nanny state. That bitch. I hate her.
Society? There’s no such thing as society. There’s only what I want right now, which is the ultimate good in my universe. And what I want right now is more time on the XBox, pizza money, and the keys to the family car.
The future? If I pursue everything I want now, then the future will magically take care of its self. Dinner will appear. So will clean socks and the next-gen XBox.
Obligations? I am God’s gift to the world. I don’t owe it anything. In fact: it owes me — just for being so magnificent, cute and special. (Even my mom thinks so.)
On behalf of America’s mothers, let me say: I have had enough of this. I don’t care how cute they are: it’s high time these so-called “libertarian” freeloaders get off the couch, stand up, and show some respect to the rest of us who’ve done the hard work that makes their cushy lives possible.
In the classic depictions of Atlas he is holding up the world – Rand pictured the modern Atlas as something akin to our modern financial leaches by Jamie Denton. In the real world outside of the mythical one created by conservative Republicans and rightie libertarians is a world held up by bus drivers, carpenters, nurses, chemists, programmers, demographer, fire fighters, writers, and violinists. We call them ordinary people, but they are the ones who make our cultural and economic world go round. The false heroes of the right are just taking a free ride. One of the biggest welfare rides in history.