It's about the American Dream: the idea that you can be born poor but work hard enough for a home and car and good schools - that's all collapsed. We profess to like the values of democracy, so public opinion should have an influence on policy and the government should carry out actions determined by the population, but the privileged sector doesn't like democracy. We have extreme inequality with a super wealthy group in the top 1/10th of the top one percent. It's unjust in itself, but it's got a corrosive effect on democracy.
Concentration of wealth yields concentration of power, especially as costs of elections skyrocket forcing politicians into the pockets of corporations. This translates into legislation that increases the concentration of wealth through fiscal policy (taxes, deregulation, rules of corporate governance) designed to increase the concentration of wealth and power in a vicious cycle of progress.
Adam Smith described this in 1776 in The Wealth of Nations: England's principal architects were merchants and manufacturers who will made sure their own interests are well cared for however grievous the impact on citizens. Now financial institutions and multinational corporations are doing the same thing.
"All for ourselves and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind" (Chapter IV).
#1. Reduce Democracy (Also see this Truthout article from 2014).
There's an ongoing clash between pressure for more freedom and democracy from below, and efforts at greater domination from above. This goes back to James Madison, the main framer of the constitution. The US is designed so power is in the hands of the wealthy - the more responsible men, and it's seen in the structure of the constitution which originally placed most power in hands of the unelected Senate:
"Landholders ought to have a share in the government, to support these invaluable interests and to balance and check the other. They ought to be so constituted as to protect the minority of the opulent against the majority. The senate, therefore, ought to be this body; and to answer these purposes, they ought to have permanency and stability....the longer they continue in office, the better will these views be answered."If everyone has a free vote, the poor majority will take the property of the rich, so democracy must be prevented. This goes back to Aristotle's Politics. He said the best system is a democracy, but the same dilemma exists. But Aristotle had the opposite solution: to reduce inequality so the poor would be more content.
The history of the US is the struggle between these tendencies of democratization and a backlash against it. In the 1960s, people were highly involved. They became organized and actively changed things like minority rights, women's rights, concern for the environment, opposition to aggression, and concern for other people. They were all civilizing effects, but they caused great fear in the upper class.
#2. Shape Ideology
There was a business offensive in the 1970s. The Powell Memorandum, sent to the Chamber of Commerce and Business Lobby by Supreme Court Justice Lewis F. Powell, warned that business is losing control over society and something has to be done to counter the forces:
"No thoughtful person can question that the American economic system is under broad attack. This varies in scope, intensity, in the techniques employed, and in the level of visibility.... The fundamental premise of this paper, namely, is that business and the enterprise system are in deep trouble, and the hour is late."It was a call for business to use control over resources to take control over society. On the liberal side came the first major report from the Trilateral Commission, a group of liberal internationalists that staffed the Carter administration who were appalled by the democratizing tendencies of the 1960s, called "The Crisis of Democracy":
"The essence of the democratic surge of the 1960s was a general challenge to existing systems of authority, public and private....some of the problems of governance in the United States today stem from an excess of democracy."The passive parts of the population - special interest groups - were trying to enter the political arena. It was seen as a failure on the part of the schools to adequately indoctrinate the young. Private business wasn't seen as a special interest because they affect all of society, so it was okay if they influenced politics, but the rest must be subdued. A major backlash running parallel to all this was a redesigning of the economy.
#3. Redesign the Economy (This bit is reminiscent of Reich's Inequality for All.)
Since 1970, there's been an effort on people with power to shift the economy by increasing the role of financial institutions: banks, insurance companies, investment companies. By 2007, financial institutions controlled 40% of corporate profits, far beyond anything prior.
In the 1950s, the economy was based on production and manufacturing. The task of finance was to distribute unused assets to create credit for merchants and citizens. Banks were regulated and no financial crashes happened during periods of regulation. In the 1970s, the increase in the flow of speculative capital allowed more risky and complex investment. Former directors were engineers, but now they're all from business schools where they learned financial trickery. They make more profit playing with money than by producing anything.
With offshore production, trade was reconstructed, and it put working people in competition with each other worldwide. Americans were pitted against the poorly paid workers in China. The capital was free to move, but the workers weren't. Adam Smith said that free circulation of labour is the foundation of any trade system, so this was in opposition to his foundational ideas.
The policy was designed to increase security. Alan Greenspan testified to congress about his success:
"Atypical restraint on compensation increases have been evident for a few years now and appears to be mainly the consequence of greater worker insecurity."If we keep workers insecure, then they'll stop asking for better wages. It's good for the masters, but devastating for the people, and it led to a vicious cycle of concentrated wealth and power.
#4. Shift the Burden
The idea of the American Dream is partly symbolic. The 1950s-60s was the golden age with egalitarian growth in which the lowest fifth improved about as much as the upper fifth. There were some welfare state measures imposed. It was possible for a black worker to get a descent job, home, car, and send his kids to a good school. Manufacturers were concerned with their own consumers, so Henry Ford raised the salary of his workers to enable them to buy cars.
This shifted to a Plutonomy with a small percentage of the population gathering increasing wealth and becoming less concerned with consumers. The goal became profit in the next quarter even if it's due to financial manipulations. It created another class, the Precariat - precarious proletariat - the working people of the world who live increasingly precarious lives. During great growth, taxes on wealth were far higher. The tax system was redesigned so taxes paid by the wealthy were reduced and tax on the rest increased.
The pretext is that it increases investment and jobs, but there's no evidence of that. To increase investment and job, give more money to the poor to stimulate purchasing, which stimulates production and investment and leads to job growth and so on. Corporations have shifted the burden of sustaining society on to the rest of the population.
#5. Attack Solidarity (Also see this video of Chomsky from last May).
The new view is that solidarity is dangerous. You must care about yourself and not others. Compare that to Adam Smith who saw sympathy as a fundamental human trait. This was driven out of people's head. It's okay for the rich and powerful, but devastating for the rest. It took a lot of effort to drive human emotions out of us.
We see it today in policy formation, like attacks on social security. Social security is based on a principle of solidarity; we pay taxes for the widow across town to buy groceries. But it's of no use to the rich, so they destroy it by defunding it. Then it won't work and is fodder for privatized systems. We see this in attacks on public schools: we pay taxes so everyone can go to school. This was a jewel of American society. The golden age was because of free public education. Now most students leave college with debt and are then trapped in crappy jobs unable to actually use their higher education.
In the 1950s, we were a much poorer society, but we could manage free mass education. Now we're much richer, but claim there's not enough resources for it. It's a general attack on principles that are humane and the basis for the prosperity and health of this society.
#6. Run the Regulators (Also see Inside Job for this history lesson.)
Look over the history of regulation - railroad, financial... quite commonly it's either initiated by economic concentrations being regulated or supported by them. They know sooner or later they can take over regulators in a regulatory capture and become self-regulating with lobbyists writing laws about lobbying. In the 1970s, lobbying expanded enormously as the business world tried to control the population.
Nixon was the last New Deal president advocating for consumer safety, safe workplaces, the EPA... Businesses didn't like regulations and began coordinated efforts to overcome them through lobbying and deregulation. There was no crash in the 50s and 60s because the regulatory apparatus of the New Deal was still in place. But then it was dismantled by business pressure and financial pressure.
It started in 70s and took off in 80s. Everyone is safe if the government will come to rescue. Reagan bailed out banks and ended his term with the savings and loan crisis. In 1999, regulation was dismantled to separated commercial and investment banks. 2008 brought the Bush bailout. And now we're building up for the next one. Each time the taxpayer is called on to bail out those who created the crisis. A true capitalist system wouldn't do that, but the rich and powerful don't want true capitalism. They want a nanny state so they can get bailed out by citizens when they need to, and they call it "too big to fail." Economists like Stiglitz and Krugman disagree with the course we're following, but none were approached.
They went to Robert Rubin and Goldman Sach to fix the problem they created. Neo-liberalism provides one set of rules for the rich and the opposite for the poor. The next crash is so expected that credit agencies are counting the next bailout into their calculations. As wealth gets more and more concentrated this should come as no surprise. It's what happens when you put power into the hands of a narrow sector of wealth dedicated to increasing power for itself.
#7. Engineer Elections
Concentration of wealth yields concentration of political power particularly as the cost of elections skyrockets which forces political parties into the pockets of major corporations. The Citizens United Supreme Court decision used a 14th Amendment provision: "no person's rights can be infringed without due process of law." The intent of that was to protect freed slaves, but it was used for businesses instead so their rights can't be infringed. Gradually corporations became persons under the law in a legal fiction.
Under the 14th Amendment, no undocumented alien can be deprived of rights if they're persons. Migrants aren't counted as persons, but GM is. The perversion of elementary morality and the obvious meaning of the law is quite incredible.
The 1970s courts decided money is a form of speech in the Buckley V. Valeo case. Then the Citizens United trial of 2009-10 read the right of free speech to mean corporations could spend as much money as they want, and that can't be curtailed. They're free to buy elections. This is a tremendous attack on the residue of democracy.
#8. Keep the Rabble in Line (Klein was on about this in The Shock Doctrine.)
Organized labour is one force which has traditionally been in the forefront of efforts to improve the lives of the general population and act as a barrier to corporate tyranny. There's been a fanatic attack on unions because they are a democratizing force; they want popular rights generally, which interferes with prerogatives in power that own and manage society. The fundamental core of labour rights is the right of free association, which means right to form unions, but the US has never ratified that. They're alone among major societies in that respect. It's so far out of the spectrum of US politics, it's never been considered.
We've had a long, violent labour history. By the 1920s, labour unions were virtually crushed by police with guns and tear gas. By the mid-30s, it began to reconstruct under Roosevelt who informed labour leaders that, in order to get it passed, they had to force him to do it: to go out and demonstrate, organize, protest. Only when the popular pressure is sufficient, will he be able to put through the legislation they want. In 1934, Roosevelt said:
"I am not for a return to that definition of liberty, under which for many years a free people were being gradually regimented into the service of a privileged few. I prefer that broader definition of liberty."The combination of a sympathetic government and popular activism enabled unions to form. Industrial actions and sit-down strikes were one step from saying, "We don't need bosses; we can run this ourselves." Business leaders were appalled; this was a hazard that had to be repressed.
After WWII, businesses acted in force with the Taft-Hartley Act, written for only one purpose: to restore justice and equality in labour-management relations. McCarthyism was used as propaganda to stop unions. And during the Reagan era, he made it acceptable to break strikes, suggesting workers forfeit their jobs after 48 hours on strike. It all went through the roof with Bush in the 90s. Now less than 7% of private sector workers have unions. The counterforce has dissolved.
Those in power want to maintain class consciousness for themselves, but eliminate it for everyone else. In the 19th century, working people were very conscious that wage labour wasn't much different from slavery, just temporary. Now those in power drive that idea out of our heads. We just don't talk about class. Who gives the orders and who follow them - that basically defines class.
#9. Manufacture Consent (Check out Adam Curtis' Century of the Self for more on this.)
The public relations industry is a phenomenon developed in the freest countries: Britain and the US. In a free country, it's not going to be easy to control the population by force, so they had to have other means of controlling people - through control of beliefs and attitudes. The best way to control them according to Thorstein Veblen was to fabricate consumers. [He's the "conspicuous consumption" guy.] We have to fabricate wants, direct people to the superficial things in life, and the people will be trapped into becoming consumers. This doctrine is found through all progressive intellectual thought including Walter Lippmann, a major progressive intellectual of the 20th century, who said in The Phantom Public (chapter 14):
"A false ideal of democracy can lead only to disillusionment and to meddlesome tyranny. If democracy cannot direct affairs, then a philosophy which expects it to direct them will encourage the people to attempt the impossible; they will fail, but that will interfere outrageously with the productive liberties of the individual. The public must be put in its place, so that it may exercise its own powers, but no less and perhaps even more, so that each of us may live free of the trampling and the roar of a bewildered herd."Like Madison and Powell, he thought citizens should be spectators, not participants. The advertising industry exploded with the goal of fabricating consumers. The ideal is what you see today where teenage girls spend free Saturday afternoons in the mall, not the library or park. The idea is to control everyone. The perfect system is based on a dyad - the pair is you and the internet -in which one presents you with the proper life and you spend your time and effort gaining those things. Currently that's the measure of a decent life.
Markets are supposed to be based on informed consumers making rational courses. If we had a system like that, a true market system, then a television ad would consist on GM putting up information saying what they have for sale. That's not what an ad is. The point is to create uninformed consumes who will make uninformed choices. That's what advertising is all about. When the PR system runs elections, they do it the same way. They want to create an uninformed electorate who will make uninformed choices against their own desires.
Obama didn't really promise anything; that's mostly an illusion. There was very little discussion of policy because public opinion on policy is sharply disconnected from what leaders want. Policy is focused on private interests that fund the campaigns with the public being marginalized.
#10. Marginalize the Population
A leading political scientist, Martin Gilens, determined that 70% of the population has no way of influencing policy, and the population knows it. It's led to a population that's angry, frustrated, and hates institutions. They're not acting constructively to respond to this but are very self-destructive with unfocused anger: attacks on one another and on vulnerable targets. It's corrosive of social relations in order to get people to hate and fear each other and look out only for themselves and don't do anything for anyone else.
April 15th is that day we pay taxes. It's a measure of democracy that it should be a day of celebration as the population decides to fund the programs they agreed on, but instead it's a day of mourning - a day in which some alien power is coming down to steal your hard-earned money.
The tendencies described in the US, unless they're reversed, will create an extremely ugly society based on Adam Smith's warning of a vile maxim, "All for myself, nothing for anyone else." A society in which normal human instinct and emotions of sympathy, solidarity, and mutual support are driven out - that's a society so ugly I don't even know who'd live in it.
If the society is based on the control of private life, it will reflect those values - of greed, and the desire to maximize personal gain at the expense of others. Now, any society, a small society based on that principle is ugly, but it can survive. A global society based on that principle is headed for massive destruction.
I don't think we're smart enough to design, in any detail, what a perfectly just and free society would be like. I think we can give some guidelines. And more significant, we can ask how we can progress in that direction.
John Dewey, a leading social philosopher in late 20th century [who responded to Lippmann in The Public and Its Problems], - argued that until all institutions, production, commerce, media, unless they're all under participatory democratic control, then we will not have a functioning democratic society: "As long as politics is the shadow cast on society by big business, the attenuation of the shadow will not change the substance."
Where there are structures of authority, domination, hierarchy, somebody gives the order, somebody takes them, they are not self-justifying. They have to justify themselves. They have a burden of prof to meet. Well fi you - usually they can't justify themselves. If they can't then we should be dismantling them. Progress over the years has been just that. The way things change is because lots of people are working all the time - in their communities, workplace, or wherever they happen to be, building up the basis for popular movements, which are going to make changes. That's the way everything has ever happened in history
For example, freedom of speech isn't in the Bill of Rights or the Constitution. It began in the 1960s through the civil rights movement, which demanded rights and refused to back down. They established a high standard of free speech. The same thing happened with women's rights. That's how rights are won. Flaws in institutions have to be corrected by operating outside the framework that is commonly accepted.
Activists are people who have created the rights that we enjoy; they carry out the policies and contribute to the understanding. We have to try to do things, learn about what the world is like, and that feeds back to the understanding. In a free society, the government has limited capacity to coerce, so lots can be done if people struggle for their rights.
As Howard Zinn said, "What matters is the countless small deeds of unknown people who lay the basis for the significant events that enter history." They're the ones who have done things int eh past. They're the ones who will do things in the future.