Cross-posted at Real Economics.
We are trapped in an era of failed ideologies. Capitalism, neo-liberalism, socialism, communism, Marxism, communitarianism, syndicalism have all been tried, and found wanting. None of them have been able to prevent the rise of a new global financial and corporate oligarchy, our slide into new neo-fuedal conditions of political and economic inequalities and inequities, and the destructive exploitation of our biosphere.
The most trenchant critics of these failed ideologies (such as Chris Hedges, Naomi Klein, Sheldon Wolin, Philip Mirowski, Kim Phillips-Fein, and Angus Burgin) have explained how the new oligarchs and their apologists have corrupted, twisted, and shaped the various ideologies to protect and perpetuate their own privileged positions of power.
I believe one of the most important books people should read now (and even re-read) is Lawrence Goodwyn’s The Populist Moment: A Short History of the Agrarian Revolt in America, which details the rise and development of the agrarian revolt in the years after the Civil War, and its transformation into the populist movement of the 1890s. In the Introduction (linked to above), Goodwyn observes,
…history does not support the notion that mass protest movements develop because of hard times. Depressed economies or exploitative arrangements of power and privilege may produce lean years or even lean lifetimes for millions of people, but the historical evidence is conclusive that they do not produce mass political insurgency. The simple fact of the matter is that, in ways that affect mind and body, times have been “hard” for most humans throughout human history and for most of that period people have not been in rebellion. Indeed, traditionalists in a number of societies have often pointed in glee to this passivity, choosing to call it “apathy” and citing it as a justification for maintaining things as they are.
This apparent absence of popular vigor is traceable, however, not to apathy but to the very raw materials of history -- that complex of rules, manners, power relationships, and memories that collectively comprise what is called culture. “The masses” do not rebel in instinctive response to hard times and exploitation because they have been culturally organized by their societies not to rebel. They have, instead, been instructed in deference.
More below the fleur de kos...
Deference to power is crippling. You see deference on the left as well as the right. Look at how Bill Clinton is still admired as the Big Dog, even though it is very clear by now that as President, he totally failed to reverse the de-industrialization and de-capitalization of the US economy, and the war on the working class begun under Nixon, Carter, and most especially Reagan. Have you ever been in a meeting with your Congressman or Senator? I have; and though I seethe inside with anger at his being part of the problem - part of The Village elite who have been consistently wrong headed on almost every major national policy for the past three decades - I have held back my tongue, not raised my voice, nor hurled a rotten tomato (or a shoe) at him. That, too, is a form of deference.
The sober fact is that movements of mass democratic protest -- that is to say, coordinated insurgent actions by hundreds of thousands or millions of people -- represent a political, an organizational, and above all, a cultural achievement of the first magnitude. Beyond this, mass protest requires a high order not only of cultural education and tactical achievement, it requires a high order of sequential achievement. These evolving stages of achievement are essential if large numbers of intimidated people are to generate both the psychological autonomy and the practical means to challenge culturally sanctioned authority. A failure at any stage of the sequential process aborts or at the very least sharply limits the growth of the popular movement....
How does mass protest happen at all, then -- to the extent that it does happen?
The Populist revolt -- the most elaborate example of mass insurgency we have in American history -- provides an abundance of evidence that can be applied in answering this question. The sequential process of democratic movement-building will be seen to involve four stages: (1) the creation of an autonomous institution where new interpretations can materialize that run counter to those of prevailing authority -- a development which, for the sake of simplicity, we may describe as “the movement forming”; (2) the creation of a tactical means to attract masses of people -- “the movement recruiting”; (3) the achievement of a heretofore culturally unsanctioned level of social analysis -- “the movement educating”; and (4) the creation of an institutional means whereby the new ideas, shared now by the rank and file of the mass movement, can be expressed in an autonomous political way -- “the movement politicized.”
The history of the sequential development of the populist movement is the subject of Goodwyn’s book. It traces the history of how farmers learned enough self-respect to no longer give deference to economic and political elites - a process that took three decades, and involved a succession of crucial political battles in which the populists were forced to think through the nature of the financial and monetary systems, and develop workable alternatives to them. The major reason they succeeded – Goodwyn writes that the populist revolt was the only genuinely democratic political mass movement to challenge the economic status quo in American history – was that they self-consciously began to reach out to fellow farmers with a program of paid professional lecturers, who traveled the countryside and gave talks on what amounted to Greenback economic doctrines, and recruited members to the Farmers Alliances. Robert L. Morlan’s important history of the 1910s Non-Partisan League, Political Prairie Fire, also details the same principles and practice of self-organizing. The Non-Partisan League won political control of North Dakota for a few years, and instituted a number of populist reforms such as state-owned grain elevators and the State Bank of North Dakota (still the only state-owned bank in the United States) before being crushed by the anti-German hysteria of World War One.
In our own time, the sanctimonious depredations and corruption of the Dubya Bush (mal)administration jump started the process of building a mass movement. Millions of Americans disgusted by the pettiness and vindictiveness of what the Republicans and conservatives had become – not to mention the right-wing’s ongoing love affair with the application of state violence, whether locally or internationally – joined a number of new and old political organizations, such as Move On, Democracy for America, and Campaign for America's Future.
But I do not believe any of these or other groups has yet emerged with the sense of muscular educational outreach that characterized the Farmers Alliances and the Non-Partisan League. I believe the Occupy movement was moving in that direction, but it was crushed by what we now know was a multi-state para-military police action nationally coordinated at the highest levels of the Obama administration with Wall Street banks and other financial institutions through the Domestic Security Alliance Council. That untold numbers of people have been forced to see the Obama administration in this reactionary light is only part of the sequential process Goodwyn identifies; a part in which Democratic Party elites lose esteem in direct proportion to the rise in political self-esteem gained by activist citizens. That this process of elite deflation / activist inflation still needs to continue is indicated by MyDD founder Jerome Armstrong’s post in November 2013, A blogger is the first follower, not the leader. We can no longer afford to follow leaders unwilling or unable to move faster. We ourselves must lead.
So, to use Goodwyn’s paradigm, the movement is still forming. What I think is interesting, and crucial for us to recognize and understand, is that the capabilities of internet and cellular communications have scrambled the process, so that the steps of recruiting, educating, and politicizing are all happening concurrently, and have not really been interrupted by the police state smashing of Occupy.
A new ideology - or a reborn ideology?
So now we begin the task of creating and elucidating a new progressive ideology of political economy. This is a crucial endeavor we must all watch carefully, and assist and promote as best we can, as it will provide the deep, stable foundation for the promotion and enactment of policies and practices we all mostly agree on at this point: a more coherent, robust and time-urgent program to tackle global climate change; a reorientation of national economies away from growth based on consumption to a paradigm that is both sustainable and psychically enriching; a profound and lasting reversal of the trends toward concentration of economic power and growing wealth and income disparities. Only the building of such a foundation will allow us to overcome the historical and institutional inertia which the new oligarchy has achieved with its half-century promotion of the ideologies of neo-liberalism and radical free market anarchism.
I want to bring to your attention the best effort along these lines I am aware of, initiated by Ian Welsh in October 2013. What Welsh is doing is largely restating and recasting the key tenets of classical republican theory. (I am referring here to the theories of self-government developed in Rome and Florence, which informed the English Enlightenment and the American Revolution.) I have argued that what we need to do is revive the republican ideas of public virtue and especially the general welfare, while Welsh argues that these ideas may be historically pertinent, and even valid, but each new era requires a new restatement of those ideas in the understood language and idiom of the time.
Though I do not abandon my argument that classical republican theory can show us the way forward, I cannot really disagree Welsh, either. How many people today have read, let alone considered and debated, Tacitus or Livy? How many people know that Machiavelli's most important contribution to the development of republican theory was not The Prince, but his Discourses on Livy? How many people are familiar with how the contentious rivalry between Hamilton and Jefferson shaped the economy of the United States? Or that Jefferson's opposition to Hamilton's plans for industrialization and for capitalizing the debt, were based on Jefferson's belief that agriculturalists were the best, because least corruptible, repository of republican civil virtue? Obviously, the wisdom and knowledge of an era almost antique to us must be recast with purpose informed by the understanding that what was common knowledge then, no longer is.
At this point, some people may be asking: If ours is an era of failed ideologies, why bother resurrecting the ideas of the American Revolution? Wasn't the United States founded as a slave society? Wasn't the United States irrevocably cast as a predatory, exploitative capitalist economy, designed to benefit only wealthy white men? My answers are that such questions fail to understand the American Revolution and Constitution are a great historical shift from rule by elites, to common self-government. In American Republicanism: Roman Ideology in the United States Constitution, University of Maryland law professor Mortimer N. S. Sellers wrote, in 1994:
Whatever one thinks of the United States Constitution and its republican conclusions, the debate that formed it represents the most sophisticated and sustained popular examination of political first principles the world has ever seen. It shaped the modern era. Republicanism provided ideas, courage, and vocabulary to all America's nascent institutions and particularly to the United States Constitution.Social critic and political activist Naomi Wolf also grappled with exactly these questions, and came to the same conclusion in her 2008 book, Give Me Liberty: A Handbook for American Revolutionaries. In her Introduction, Wold writes:
We can be citizens of a republic; we can have a Constitution and a Congress; but if we, the people, have fallen asleep top the meaning of the Constitution and to the radical implications of representative and direct democracy, then we aren't really Americans anymore.Finally, we should be aware that at the time of the American Revolution, and the framing of the Constitution, the concept of "capitalism" had not yet been formed as we understand it today. The words "capitalism" and "capitalist" appear no where in the Constitution, or even in The Federalist Papers. Actually, I do not really recall ever seeing them in any of the many letters, reports, speeches, and excerpts thereof, I have read over the past thirty years or more. So, it is more than a stretch to argue that the United States was deliberately formed as an exploitative capitalist economy. Which is not to say that is not what the U.S. has become. As One Pissed Off Liberal noted with great sadness yesterday, explaining why he was emigrating, "I've always loved what this country was supposed to be, which only makes the pain of what it has actually become that much greater."
Or as Martin Luther King said, in words that still roil the American landscape like close thunder, the "architects of our republic" wrote "a promissory note to which every American was to fall heir." And though the payments on that promissory note have become stingier and stingier, and now seem to have ceased altogether,
...we refuse to believe that the bank of justice is bankrupt. We refuse to believe that there are insufficient funds in the great vaults of opportunity of this nation. And so, we've come to cash this check, a check that will give us upon demand the riches of freedom and the security of justice.Actually, we should examine the historical development of capitalism with an eye toward the actions and intents of those who have never reconciled themselves to the American experiment in self-government. It is more than a little interesting to ask what cultural norms and ideological beliefs accompanied the infusion of funds from the City of London, which played so large a role in financing the early American economy. Indeed, one of the reasons Jefferson so adamantly opposed Hamilton was that Jefferson feared Hamilton as Secretary of the Treasury was copying too closely the English system of finance and central banking, and creating a concentration of economic power that would eventually engulf the republic.
At the same time, I must admit that there are two serious shortcomings in merely reviving the classical republican theories of governance and statecraft. First, since the concept of capitalism was inchoate and not fully formed until well into the nineteenth century, it is extremely difficult to assert that classical republican theories have anything explicit to say about economics. Yet, there are clear inferences that can be made, and the broad outline of key precepts can be readily discerned. In a fundamental way, making these inferences and outlining these precepts will help put individual citizens back in control of economic policies and processes, by strongly delimiting and circumscribing the range, scope, and power, of not just corporations, but the rich as well.
But here we should carefully heed Goodwyn's warning in his Introduction:
....“class” is a treacherous tool if handled casually and routinely -- as it frequently is. For example, offhand “class analysis,” when applied to the agrarian revolt in America, will merely succeed in rendering the Populist experience invisible. While classes in agricultural societies contain various shadings of “property-consciousness” on the part of rich landowners, smallholders, and landless laborers (“gentry,” “farmers,” and “tenants,” in American terminology), these distinctions create more problems than they solve when applied to the agrarian revolt. It is a long-standing assumption... that “landowners” must perforce behave in politically reactionary ways. The political aspirations of the landless are seen to deserve intense scrutiny, but the politics of “the landed” cannot be expected to contain serious progressive ideas. The power of this theoretical assumption can scarcely be understated. It permits the political efforts of millions of human beings to be dismissed with the casual flourish of an abstract category of interpretation... The Populist experience... puts this proposition to a direct and precise test, for the agrarian movement was created by landed and landless people. The platform of the movement argued in behalf of the landless because that platform was seen as being progressive for small landowners, too. Indeed, from beginning to end, the chief Populist theoreticians -- “landowners” all -- stood in economic terms with the propertyless rural and urban people of America.Secondly, we should not simply resuscitate the founding principles of republicanism while ignoring the new knowledge and technologies we have developed, especially in psychology, sociology, and other social sciences. Actually, synthesizing classical republicanism with this new knowledge strengthens it immeasurably. As gjohnsit pointed out last week, in The rich really are different, a number of clinical studies have repeatedly shown that the rich generally are much more psychopathic and have much less empathy than the average citizen. These findings only bolster the tenets of classical republicanism, which holds that the two great internal threats to a republic are a standing army, and the rich.
Similarly, we have accumulated massive scientific evidence of the ill effects of large inequalities in income and wealth. A standard reference on this point we should all become familiar with is Kate Pickett's and Richard Wilkinson's 2011 report on their thirty years of research, The Spirit Level: Why Greater Equality Makes Societies Stronger. If Franklin and Jefferson and the other founders celebrated the cross-fertilization of the Scientific Enlightenment with the Political Enlightenment, we can do them no greater honor than to apply this new knowledge as a ruthless refutation of the favorite "shrink government in the bathtub" policy nostrums conservatism, libertarianism, and neo-liberalism have crippled our society and economy with.
The preferred business model today is to make it so that no one owns anything: everything is unbundled, instead of owning it, your lease or rent it and the moment you can’t pay it all goes away. This is what “cloud” computing is about: a revenue stream. Lose your revenue, lose everything. Ownership of DNA sequences, ownership of seeds, effective ownership of your intellectual property because it appears in someone else’s pipe (like Google using people’s endorsements without compensating them), you will own nothing, and all surplus value you produce in excess of what you need to (barely) survive will be taken from you.The next day, Welsh posted A New Ideologyin which he wrote that “An ideology tells us what is thinkable and what is unthinkable, what is moral or immoral, ethical or unethical,” and discussed how the ideology of American capitalism has crippled our ability to solve social problems.
To put it another way, the current business model is value stripping. All excess value is stripped from the social sphere (as with google taking almost all of the value that content producers create by taking almost all of the value of ads, and they control almost the entire ad market.) People who cannot gain enough of the excess value they create become economic cripples. Since the companies that make almost all the profit today are either financial companies, IP exploitation companies or are taking value from the environment (like oil companies), there is not enough real economic growth, whatever the GDP numbers show (financial innovation isn’t, JP Morgan and Goldman Sachs profits actually damage the real economy, stripping out value, not creating it.)
There is no coherent ideology opposing this, there is no coherent alternative. Marxism died with the USSR, whether it should have or not. No new alternative to what is laughably called “capitalism” (it isn’t) has arisen.
That was followed by How to Create a Viable Ideology, in which Welsh discussed the sources and uses of power.
Power comes in a number of flavors. You have violence. You have productive capacity. You have consumptive ability. You have social ties. You have ideological production. The more of each of these any group has, the more power they have. The more power they have, the more of the surplus production of their society… they are able to control. If you want prosperity, you want power spread as evenly throughout your society as possible. You never want complete equality in outcome, because you do want some competition, it helps drive society forward, but right now our problem is the exact opposite: too much concentration of power, too little equality.In his next posting, Welsh did a great job of enumerating 44 Explicit Points on Creating a Better World. Among them:
Each of those groups... will compete against each other. Different people have different interests. If one group or a coalition of groups gains more power, they will also gain more of the productive surplus. Part of an ideology’s job is to make it so that, as much as possible, everyone’s interests in society are similar.... if you want any increases in production to go to everyone, you have to make that happen, and to make it happen you have to believe it should happen. But the step before that is making sure that power is divided relatively evenly through society, so that it does happen. But, again, that is an ideological choice: many people don’t believe that everyone should have relatively equal power.
To have relatively equal power you cannot allow the means of production or violence to be overly concentrated. Jefferson was making a profoundly practical statement when he warned that banks and standing armies were dangerous to a republic and democracy. Banks allow people to print money, those who print money make money, it gives them a powerful advantage over people who cannot do so. Those who control violence: well, I’m sure I don’t have to make that point....
If you want a society, then, which is prosperous and egalitarian, with the proceeds of increased production going to everyone and not just a few, you must have an internal structure of power which gives ordinary people quite a bit, makes concentration of power in private hands difficult, makes the government unable to use too much power against its own citizenry while (and this is the important bit) still being able to defend itself externally, and able to resist internal putsches. Egalitarian societies which cannot defend themselves get overwhelmed by hierarchical societies which are better at violence.
10) Most profits today are extracted value, they are not actual surplus value. Instead they represent destruction of actual economic productivity. Every cent the financial sector “earned” from 2000 to 2007 was destroyed, ten times over, in the crisis and the depression after the crisis.
11) Actual value is not rewarded. A janitor or a garbageman or a teacher or a nurse or an assembly line worker or an engineer produces real value. If the CEO does not come in tomorrow, so what? If the janitor doesn’t, everyone is complaining immediately. The people we call value creators today are mostly value extractors: their job is to squeeze hard, to monetize, not to create new products which are genuinely beneficial to the world, not to create workers who are well paid and thus able to provide demand, not to create better paying work, but worse paying work....
28) We can all be prosperous, but we can’t all be rich. Having hundreds of billionaires is exactly why you haven’t had a real raise in 30 years.
29) Concentrations of wealth are used to protect that wealth and buy up the system. That is why they can’t be allowed. The first thing someone does who wins the market, is buy the market, and that means buying the government.
In What is an economy?, Welsh reiterates a definition of money that allows us to use it in a manner coherent with the classical republican theory the United States was founded on (discussed below):
Money, as my friend Stirling Newberry has noted, is permission: it is the right to decide what other people do with their time. Money lets you buy up people who spend all day lobbying government, it lets you create political movements, it lets you buy up think tanks and universities, it lets you create your own mercenary army. If you are throwing off more money than other industries, it lets you take over those industries. It lets you buy government, and thus control the rules.
The discussion of money is continued in Too Much Money Chasing The Wrong Returns. Welsh lays it out in starkly simple terms:
Money is a social creation, it is permission to tell people what to do. You do not give money, and permission, to those who use it badly.... A basic rule of economic governance is this: when the “private” sector is not doing productive things with money, you must either change the incentives so they are, or simply take the money away from the people who are using it in unproductive ways and spend it yourself.... The first step to getting out of our current mess, then, is 95% marginal tax rates on all income over 5 million, 90% on all income over 1 million, and a huge increase of corporate tax rates to over 70% unless they are doing what is in the public interest. (Tax breaks on 20% corporate taxation rates do not affect corporate behavior.).... Do not give money, free money, to people who are not spending it in ways beneficial to society as a whole.If there is one post by Welsh you should read, I suggest it is How the structure of everyday life creates sociopathic corporate leaders. It is loaded with insight and clues to what we need to do to ensure the free enterprise works as much for the common good as it does private gain.
And take away money from people who are spending it in harmful ways.
A corporation exists to create a profit, it has no other innate purpose, this is embedded in the law. The corporation is structured so as to remove liability for criminal acts from its owners, and in practical terms, it also somewhat shields those who control it (its executives and corporate officers) for liability from actions....
Anything another company does which increases their profits, no matter how unethical, if not forbidden by effective law (as opposed to theoretical, aka. unenforced law) you must also do.
What is important about this is that the drive for profits above all and the requirement to gain an unfair advantage as dictated by modern strategic thinking... means that you have to do evil. If your competitors use cheap conflict metals from the Congo, the control of which is gained by mass campaigns of rape, you must do so. If an insurance company denies healthcare to people who are desperately sick, it makes more money. If a power company doesn’t spend money on anti-pollution equipment, or dumps untreated effluents rather than treated ones, it makes more money. If a clothing manufacturer doesn’t spend money on safety equipment for its highly flammable factories, it makes more money.
...Once you ascend to the senior corporate ranks, your bonuses are based on short term performance and are large enough that after a few years, and sometimes just one, you have enough money you’ll never have to work again. So you don’t care about the long term, because you don’t need the company to be there long term, only to make as much money as fast as possible. As a low ranked boss, you terrorize your employees, treat them badly in whatever way is required to make short term profits and are promoted upwards. As a high level executive you make strategic decisions that require you to hurt people you’ve never met through pollution, failing to invest in safety, or political corruption.
The summary of all this is that the structure of your life, of incentives, in the corporate world, sorts out people who are willing to hurt other people, now and in the future, for their own benefit and to corrupt their own system of government and law for short term advantage. If you aren’t willing to do these things, you are unlikely to rise far in a modern corporation, and almost certain not to make it to the CEO level.... You wind up with people who, if they aren’t clinical sociopaths and psychopaths, act like them.
We will briefly return to 44 Explicit Points on Creating a Better World:
22) The most important rule of all is this: your elites must experience the same life as ordinary people. They must go to the same shitty schools (no private schools, no enriched schools, no Ivy League). They must fly on the same planes and go through the same security (they don’t), they must use the same healthcare and stew in the same wards in the same rooms as the poorest of the citizens. They must eat the same food, rather than being able to buy high quality food the poor can’t. If they don’t experience what you experience, they will not care what is happening to you. And they don’t. Why should they when they’re the richest riches the world has ever known. The world is great, to the rich and powerful.
I want to explore further how much of what Welsh writes coheres closely with classical republican theory, which holds that a general equality of income and wealth is required for the maintenance of republican self-government. The second most influential work, after The Federalist Papers, in securing the ratification of the Constitution was Noah Webster's October 1787 An Examination into the Leading Principles of the Federal Constitution, in which we read:
Wherever we cast our eyes, we see this truth, that property is the basis of power; and this, being established as a cardinal point, directs us to the means of preserving our freedom.... A general and tolerably equal distribution of landed property is the whole basis of national freedom.... An equality of property, with a necessity of alienation, constantly operating to destroy combinations of powerful families, is the very soul of a republic--While this continues, the people will inevitably possess both power and freedom; when this is lost, power departs, liberty expires, and a commonwealth will inevitably assume some other form.
In The Federalist No. 10, Madison argues that economic inequality will arise because of "different and unequal faculties of acquiring property", but the price of preventing economic inequality -- ending liberty -- is too high. Madison’s discussion here implies a crucial point that most people, including scholars, pass over. Madison is not arguing that economic inequality is desirable or even acceptable. Rather, he is arguing that it is inevitable, and, moreover, economic inequality is so dangerous and so pernicious, that the entire framework of government is being erected with an eye toward checking and corralling its political effects. Just look at the first words of the last sentence from this passage:
So strong is this propensity of mankind to fall into mutual animosities, that where no substantial occasion presents itself, the most frivolous and fanciful distinctions have been sufficient to kindle their unfriendly passions and excite their most violent conflicts. But the most common and durable source of factions has been the various and unequal distribution of property. Those who hold and those who are without property have ever formed distinct interests in society. Those who are creditors, and those who are debtors, fall under a like discrimination. A landed interest, a manufacturing interest, a mercantile interest, a moneyed interest, with many lesser interests, grow up of necessity in civilized nations, and divide them into different classes, actuated by different sentiments and views. The regulation of these various and interfering interests forms the principal task of modern legislation, and involves the spirit of party and faction in the necessary and ordinary operations of the government.In the 1760s, Benjamin Franklin, enumerating Some Good Whig Principles, defined liberty as "having an actual share in the appointment of those who frame the laws, and who are to be the guardians of every man’s life, property, and peace;" and further noted that "the poor man has an equal right, but more need, to have representatives in the legislature than the rich one." I added the emphasis, and direct the reader to reflect on how well the Roberts Supreme Court comported with Father Franklin's principles in their deservedly infamous Citizens United decision.
For too long, we have allowed conservatives and libertarians to assert that their ideas of limited government are more patriotic and more in line with the intentions of the Founders. Their argument is entirely unfounded. Classical republican theory was concerned above all with preventing imbalances of power, whether political or economic. This is the real, fundamental reason massive accumulations of wealth must be taxed and redistributed in a republic. Reclaiming the ideology of republican self-government, and restating and strengthening it with the knowledge of our own age, will give us the means to show that our opponents are nothing more than shills in the service of oligarchy.