The 2016 electorate was driven by despair and anger at the political establishment, both Democratic and Republican. As Michael Moore said, many voters just wanted to toss a human Molotov cocktail into the political system. Donald Trump was the only available weapon.
Two years earlier Seattle millionaire Nick Hanauer had warned of what was coming. He told his fellow zillionaires that “the pitchforks are coming … for us plutocrats.” (http://politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014.html#.VOItmVJ0zcs)
That might have been the case except for the protection provided by the political elite. According to journalist Ron Suskind, in March of 2009 when the people were furious with the Wall Street bankers after the financial crisis of late 2008, President Obama called the CEOs of the top 13 banks to the White House. They arrived fearing the newly elected President would crack down on them. Instead he offered his cooperation and protection, saying “I’m the only thing between you and the pitchforks.”
This was in keeping with the role our political elite has long adopted: protector and promoter of capitalists. Thus the voter anger of 2016 was turned against the political establishment rather than the capitalists they were serving.
A LITTLE HISTORY
Since World War II, as the dominant world power, the US political elite has promoted the development of capitalism around the world, first in the war torn countries of Europe and Japan, and then in the former colonies of the global South. From this has emerged a globalized capitalist system dominated by transnational corporate capital that is no longer beholden to nation-states. Indeed, those nation-states are being transformed into globalized states more attuned to serving the interest of transnational capital than their own national populations. This has led to a growing crisis of legitimacy for those states and their political elites.
For four decades Capital has been waging class war against working people. The gains that the popular classes had won through struggle in the 1930’s at a time when Capital had been weakened by its crisis, gains protected by a Welfare State, have been subsequently whittled away. Coming out of World War II, empowered popular classes saw government as an instrument to promote the common good. Roosevelt’s Economic Bill of Rights expressed this national consensus. Elements of this were achieved through the popular struggles of the 1960’s. But then President Ronald Reagan launched a major offensive against the New Deal under the banner of neoliberalism and in the 1990s House Speaker Newt Gingrich’s Contract on America further weakened government as an instrument of the popular classes. Gradually even liberals came to embrace the neoliberal belief in the superiority of the market as the governing principle of society.
The political elite abandoned working people as it became increasingly beholden to corporate Capital. State sponsored globalization off shored jobs and weakened labor at home. When the casino economy of financial capital collapsed, Wall Street was bailed out and Main Street and homeowners were abandoned. Inequality increased as the wealth of the 1% soared and wages of working people flattened or even declined. The resulting disempowerment of the citizenry disillusioned them and eroded the legitimacy of the elite.
CRISIS OF LEGITIMACY
This outcome was foretold in my 2012 book Recreating Democracy in a Globalized State (Clarity Press 2012). Let me quote from page 82.
With the globalization of capital, the state has become detached from the nation. Transnational capital now roams the planet in search of accumulation. Yet, the state still functions to serve the interests of the transnational corporations, even when that is against the nation in which it is based. Thus the globalized state finds itself against the nation. With neoliberalism, the state (in both core and peripheral countries) has abandoned the people for transnational capital.
We are seeing globalized states emerging in both the core and the periphery – states that can no longer represent the collective interests of their peoples because of a commitment to neoliberal trade and investment policies. With respect to their nations, they have become disarmed, whether by complicity or threat. The political elite turns a deaf ear to the people, claiming that international competitiveness prevents them from responding to their pleas for social justice. But with respect to capital, especially the transnational corporations, they remain powerful and active. Thus the state becomes ever more transparently the instrument of capital than ever before. And with that the liberal alliance between the popular classes and the national elite that had once made welfare developmentalist national projects possible unravels.
While the state in capitalist societies has always served the interest of capital, what made this politically acceptable during the era of national capitalism was that it could be plausibly claimed that the interests of other classes were linked to that of capital. But now with capital transnationalized, that link is weakening, if not vanishing. As a result, national popular classes have little reason to accept the political elite that has betrayed its trust – or even to accept the system of capitalism that they serve.
This presents a legitimation problem. As neo-liberal globalization has transnationalized capital and globalized states, it pits those states against their nations. More and more as the state is globalized, it is no longer able to promote the common welfare but acts to prevent it. Wages must be kept low in the name of competitiveness; workers must be kept disorganized (capital has long dreamed of a union-free workplace); health, safety and environmental regulations must be loosened (“get government off our backs,” intoned Ronald Reagan); the tax burden must be lifted from capital as an incentive to invest (thereby starving social programs); corporations are encouraged to move “off shore”, taking jobs with them, and on and on. When the people cry out in protest, the state responds, “The market made me do it” –feigning impotence in the face of the very market that it created.
That’s what I wrote back in 2011. The election of 2016 brought to the surface this crisis of legitimacy. Angry with the loss of the American Dream, many were easy marks for a masterful con artist who made scapegoats of immigrants, refugees and those who were Other. A democratic socialist candidate sought to bring his party back to its New Deal soul. But the neoliberal establishment had effective control of the liberal party machinery and was able to deny him the nomination in spite of his great popularity among its constituency. On the other hand, the conservative party establishment lost control to an entertaining candidate whom the commercial media boosted to stardom, thereby enabling him to channel the popular anger. Meanwhile, the liberal party remains in denial that its policies had fueled the voter revolt, attributing its defeat to sabotage and a poorly run campaign, rather than rethinking its message and corporate friendly agenda.
In November, angry with both the Democratic and Republican Party establishments, voters threw a Molotov cocktail into the political system, electing an authoritarian demagogue as President. He proceeded to consolidate what amounts to a hostile corporate take-over of the federal government with President Trump as the CEO. With that, Capital has achieved a decisive victory in the class war.
GLOBALIZATION
Our leaders sold us on the promise that globalization would bring us consumers cheaper goods. They neglected to tell us it would also bring lower wages, lost jobs, and precarious employment.
They also neglected to tell us how globalization would enrich transnational corporations. Our leaders said it would boost US businesses. Corporate profits have certainly risen. However, these are no longer US businesses (even though their headquarters may be in the US). Their profits and growing wealth does not benefit the people of the US.
The continuation of the economic crisis of 2008 up to the present has driven home a social trend that has been evident since the late 1970s, the decline of what is usually called "the middle class" and the accompanying American Dream.
As Richard Wolff has pointed out in Capitalism Hits the Fan: The Global Economic Meltdown and What to do About it, this upward mobility was a reality for most citizens of the United States for several generations, from 1820 to 1970. For 150 years, real wages rose. In the quarter century from 1947 to 1973, average real wages rose an astounding 75 percent. But that shared prosperity came to a halt in the mid '70s. In the next 25 years, from 1979 to 2005, wages and benefits rose less than 4 percent. The sustained rise in standards of living had been made possible by a conjunction of historical circumstances, circumstances that began to reach exhaustion by the mid 1970s.
Post WWII prosperity was based on 1. the global economic dominance of the United States; 2. pent up consumer demand from the depression and war years; 3. supportive social programs; 4. some political clout due to a strong union movement that could demand a share of the prosperity; and 5. Keynesian stimulus (military spending, infrastructure development like the interstate highway system, etc.).
FIXING AN OVERACCUMULATION CRISIS
By the mid 1970s, an overaccumulation crisis emerged, reflected in stagflation, which is simultaneous inflation and lack of economic growth. There were insufficient places to profitably invest all the surplus capital that had accumulated during the years of prosperity. In order to ensure "adequate" profits to capital, workers' incomes had to be curtailed.
The policies that made this suppression of incomes possible came to be called neoliberalism, a public ideology represented by President Ronald Reagan in the United States and Margaret Thatcher in England. It involved a withdrawal of government from directing the economy, leaving it instead to market forces. This meant deregulation, privatization of the commons and free trade. And that required weakening the collective hand of workers by an assault on unions and social benefits so as to strengthen the hand of capital.
Between 2001 and 2008, entry level wages declined 7 percent for college graduates and 4 percent for high school graduates. Entry into middle-level incomes is becoming more difficult.
Previously it had been possible for a young man just out of high school to get a good-paying unskilled job in a unionized factory, buy a house in the suburbs, with a federally-insured mortgage, and send his kids to college with government-supported student loans. This was a common road to the success promised in the American Dream. Millions achieved that coveted upward mobility. Under the illusion they were no longer working-class, they thought of themselves as a new class in the middle, somewhere between the poor and the rich - a middle class. It is neoliberal globalization that has now blocked that road for more and more people. For the first time in generations, the next generation has a lower standard of living than their parents.
With the offshoring of manufacturing, the industrial regions of the northeast and the Great Lakes were transformed into a Rust Belt. United States manufacturing employment peaked in 1979 at almost 20 million and fell under neoliberalism to about 11.5 million in 2010. Today, 80 percent of the world's industrial workforce is now in the global South. Most of it used to be in the United States. This is in no small measure the result of corporate policies over the last 30 years - policies encouraged by our political leaders - to offshore those low-skilled industrial jobs that used to be the entry point to the middle "class" for many.
It is important to understand that the undermining of the American Dream came at the hands of capital and government working in collusion. It is corporate capital's unquenchable thirst for profit and political leaders' eagerness to assist them that is destroying that dream. It is not blind economic forces operating with the inevitability of natural law, but the conscious policies of CEOs and political leaders that replace upward mobility with downward mobility. Political leaders, Democrats and Republicans alike, embrace Charles Wilson's adage that "what's good for General Motors is good for America." What truth might once have been embraced by this identification of the national interest with corporate interest has long since been invalidated by the globalization of capital.
The human cost of neoliberal globalization can be seen in its starkest terms among less educated middle aged white males. Princeton economists Angus Deaton (the 2015 Nobel laureate in economics) and Anne Case documented that the number of deaths by suicide, alcohol use and drug use among working-class whites ages 45 to 54 has increased by 22 percent in the last 15 years. Such self-destructive behaviors are usually caused by stress, depression and despair. These working class men had built their lives on the promises of the American Dream. But now they find their lives going nowhere, their present is precarious, their hopes for the future shattered. The human costs of this are reflected in the unexpected rise in such social pathologies.
For generations it was the illusions of the American Dream that had undergirded political support for the two dominant parties. With neoliberal globalization this has been undermined. Indeed, there is an anger at the Establishments of both the Republican and Democratic parties. The political system and the elite that has managed it has lost legitimacy. Last November the pitchforks came at last. Only, and this is an important point, they were aimed at the political elite rather than the capitalists they had been shielding.
THE PROGRESSIVE MAJORITY: WHAT IS TO BE DONE?
As I said, for the moment Capital has achieved a decisive victory in the class war. Nevertheless, this is not a time to despair. In fact, this moment offers a great opportunity to move forward in new ways. There is a worldwide rebellion against neoliberalism. In our country those who are discontent with the neoliberal order are a majority. That is what drove the voter anger against the establishment in the election campaign. A racist demagogue diverted some of that anger against immigrants. But not everyone who voted for Trump was a racist. Nor was everyone who voted for Clinton for Clinton. What united voters across party lines was a discontent with neoliberal policies that have harmed working people. As President Trump doubles down on his neoliberal policies, there will be a rude awakening. Herein lies the opportunity to mobilize an alternative to the hard Right administration that is taking shape.
So, what is to be done? Organize, Protest, Resist, Obstruct, Disobey! Yes, all of the above. But more than that is also called for. We have to struggle to protect gains won through past struggle and to prevent the outrages likely to be coming. But we should not limit our activism to defense. This is an opportunity to go on the offensive on at least two fronts: ideological and organizational.
While there seems to be little hope for progress on the national scene, much can be done locally, particularly in cities where we are stronger. This is a time when we can build institutions at the grassroots level that empower people in their daily lives –institutions like cooperatives, public banks, the commons. These hold promise of giving people some measure of independence from the corporatocracy and nurture a sense of solidarity. This can help to sustain us in the difficult years ahead and serve as an example of the kind of non-capitalist society we hope for. This strategy was the focus of a major conference over two years ago and now explored in the book Moving Beyond Capitalism. Its ideas are more timely now than ever.
Secondly, with the widespread rebellion against neoliberalism, we have a unique opportunity to educate ourselves and each other. We must critique the hegemonic neoliberal ideology of corporate capitalism. We must construct a counter-hegemony. This decisive victory for Capital can become a decisive defeat for them in the class war. The vast majority of the citizens are horrified by what they see before them. And many who supported him may join the opposition as they experience the impact of his neoliberal policies. At this moment in history there is the opportunity to unmask neoliberal capitalism as the source of their common discontent. This is a teachable moment. Are we ready?
Of course, most USians never heard of ‘neoliberalism.’ But they do know that they no longer have unions strong enough to protect their interest as workers. They know that corporations have abandoned their communities, moving abroad. They know that public services they depend on have deteriorated for lack of funds or been privatized. They know that the social safety net has been shredded, making their lives more precarious. And they know that the rich and powerful have gotten richer and more powerful; that the system is rigged against them.
They know all of this from experience. We just have to name it. This is unbridled capitalism. Neoliberalism is the default position of capitalism when there is no social movement to restrain it. And at this stage of its evolution it has no other option except the state enabled market fundamentalism called neoliberalism. That is what we need to educate each other to understand.
The ideological justifications of capitalism have been our common sense for too long. Now that common sense is beginning to be questioned by many. We need to show how our discontents are the result of the system, not the result of its failings, but the result of its unrestrained normal functioning. But beyond that, we need to construct an alternative common sense, a counter hegemonic ideology. This is an ideology that understands that humans are naturally capable of cooperation, not just competition; that finds deeper satisfactions in wholesome human relations rather than endless consumerism; that values meaningful work in which the exercise of one’s abilities can serve a common good; that is open to the rich diversity of human cultures; that values institutions that contribute to the fuller development of human beings. This, and more, is a vision of what it means to be human and live in a human society. This is an alternative ideology that we need to offer as a new common sense to the dominant neoliberal capitalist ideology that has produced such widespread discontent.
This paper was presented as part of a panel discussion with Gregory Diamant and Joan Roelofs hosted by the Center for Global Justice on January 19, 2017.