Friday, February 03, 2017

Democracy's Silent Killer

Neoliberalism in Canada and most other Western nations is the default political-economic operating system. Ushered in by Brian Mulroney and consolidated under Jean Chretien it was sold to a naive public with grand promises of an ever better future - more jobs, better wages.

Few of us realized what Mulroney pushed and Chretien normalized was actually a contagion, a malignancy.

Terminal diseases are sometimes described in "stages." As the disease progresses through these stages it becomes less treatable, more lethal.  Neoliberalism seems to follow a similar path.

There are markers that define the progression of the neoliberal disease. It begins with a weakening of the body politic as governments enter into trade pacts with each other for the mutual surrender of incidents of state sovereignty to the newcomer, the corporate sector.

It begins with surrender of control over access to markets. The Nike runner is a good example. Why pay a worker in Ohio $20 an hour plus benefits to produce runners when a worker in Vietnam costs $3 a day?

Of course moving that job only makes sense if you don't have to sell those runners where the going wage is $3 a day. Those workers can't afford a month's salary for a pair of runners. You want to pay nothing in wages to make them provided you can still sell them in a high wage market - like the one you just left.

So what is the advantage to the country that lost that well paid job only to see that product now from a low wage country on its store shelves? Cui bono? It's not the out of a job work force. It's not their families. It's not the community that once prospered from a high level of employment. No, the wealth that they once enjoyed has gone somewhere else. It's gone to the company that offshored those jobs, to its shareholders and its investors. The wealth associated with those runners, once distributed among all levels of society, now goes to the most advantaged level of society, the financial sector and the rentier class. That is the means by which economic and political power is transferred to the elite. It is the engine of inequality, wage stagnation and the dependence on consumer debt to indenture white and blue collar workers.

Some have predicted the neoliberal malignancy comes with markers.  It starts with what is called "political capture." This occurs where the corporate sector, especially the financial industry, insinuates itself between elected representatives and the voters who installed them in office. We see this manifested most clearly in America's "bought and paid for" Congress. This was chronicled in the 2014 study by Gilens (Princeton) and Page (Northwestern) that found America's legislators routinely allowed the corporate interest to prevail over the public interest.

After examining differences in public opinion across income groups on a wide variety of issues, the political scientists Martin Gilens, of Princeton, and Benjamin Page, of Northwestern, found that the preferences of rich people had a much bigger impact on subsequent policy decisions than the views of middle-income and poor Americans. Indeed, the opinions of lower-income groups, and the interest groups that represent them, appear to have little or no independent impact on policy.

When political capture has been achieved, the next stage in this malignancy is called "regulatory capture." This occurs when the government tribunals charged with regulating industries are themselves stacked with representatives of the regulated industries. The industries are allowed to corrupt the system by which they are themselves regulated. We've even had our own example in Canada's National Energy Board.

The theory of neoliberal malignancy has one final, terminal stage. This is where the corporate sector controls the executive. It doesn't merely influence it, it occupies it. The corporate sector and government merge as one. Trump is one. Many of his cabinet picks, most of them excluding, perhaps, a few generals well conditioned to obey orders, are of the corporate sector. Their job is to enshrine, perpetuate this form of rule - oligarchy, autocracy, an end to messy, unpredictable democracy.

All of this came flooding back as I read the latest warning from George Monbiot who writes:

Trump was prepared not only to promote the cause of corporations in government, but to turn government into a kind of corporation, staffed and run by executives and lobbyists. His incoherence was not a liability, but an opening: his agenda could be shaped. And the dark money network already developed by some American corporations was perfectly positioned to shape it. Dark money is the term used in the US for the funding of organisations involved in political advocacy that are not obliged to disclose where the money comes from. Few people would see a tobacco company as a credible source on public health, or a coal company as a neutral commentator on climate change. In order to advance their political interests, such companies must pay others to speak on their behalf.

Soon after the second world war, some of America’s richest people began setting up a network of thinktanks to promote their interests. These purport to offer dispassionate opinions on public affairs. But they are more like corporate lobbyists, working on behalf of those who fund them.


Long before Trump won, campaign funding in the US had systematically corrupted the political system. A new analysis by US political scientists finds an almost perfect linear relationship, across 32 years, between the money gathered by the two parties for congressional elections and their share of the vote. But there has also been a shift over these years: corporate donors have come to dominate this funding.

I could not do justice to Monbiot's narrative by attempting to summarize or excerpt it. His essay deserves to be read carefully in its entirely and I urge you to do that.

America, now in the terminal stage of neoliberalism, has provided us with a roadmap of what surely lies ahead for us if we continue our indifference to the threat facing our democracy.

I rebuked Justin Trudeau's abandonment of electoral reform not because he had broken another campaign promise but because he had done nothing to make it possible. I condemned him because, in the face of what's going on right next door, he's doing nothing - absolutely nothing - to restore our already ailing democracy. Trudeau is merely a handmaiden to the same process that brought America to where it is today and I cannot ignore that.


chris said...

The Mound of Sound said...

Thanks, Chris, I thought I had linked the Monbiot piece. Fixed.

Anonymous said...

One reaction to Neoliberalism ushered in by NAFTA with the loss promises of jobs and higher wages is to rip it up. Trump has said just that. You can't blame the populist appeal when citizens have been fucked over and the middle class gutted.

I often read the argument that the cost of salaries is the main determining factor to the overall cost of a good - it's not. The difference between the cost of a good produced domestically or abroad is often a small percentages once you factor in the total production cost ( this would include transport, etc... ) .

Greed and the quest for more and more profits is the effect of Neoliberalism - of course the system will be gamed when we adhere to it.

Anonymous said...

Mound, someone had your number way back in 1976:

You are an old man who thinks in terms of nations and peoples. There are no nations. There are no peoples. There are no Russians, no east, no west, no Communists, no Third Worlds. There is only one holistic system of systems. One vast and immense, interwoven, interactive, multivariate, multinational dominion of dollars; petrol-dollars, electro-dollars, yens, pounds, roubles and sheckles. It is the international system of currency which determines the totality of life on this planet. That is the structure of the world today. That is the atomic, and sub-atomic, and galactic structure of things today. And you have meddled with the primal forces of nature, Mr. Beale, and you will atone. Am I getting through to you, Mr. Beale?

You get up on your twenty-one inch screen and howl about America and democracy. There is no America. There is no democracy. There is only IBM and ITT and AT&T and Dupont, Dow, Union Carbide and Exxon. Those are the nations of the world today. What do you think the Russians talk about in their Council of States? Karl Marx? They sit down with their statistical decision theories, lineal programming charts, and their Mini-Mac solutions and compute the cost-price probabilities of their stocks and transactions, just like we do. We no longer live in a world of nations and ideologies, Mr. Beale. The world is a collage of corporations, all inexorably determined by the immutable by-laws of business. The world is a business, Mr. Beale, and it has been ever since Man crawled out of the slime.

-- Network

In its day, this film was a satirical black comedy. Sometimes life imitates art.


the salamander said...

.. a thought Mound .. I often find I need a useful example or scenario.. to see the actual cutting edge of political process .. So for example re the 'captured' aspect I send you this link..

It shows how a captured government like Stephen Harper's went completely against what they were elected to do.. its dirt simple when you flash back to Harper, Flanagan, Kent, Ashfield, Shea, Novak et al destroying legislation protecting those small 'ditches' and 'sloughs' that would impede infrastructure of tar sands, fracking for Oil & LNG .. ... and pipelines. This was captured government selling us out at full speed ahead.. while pimping Norwegian farmed salmon infecting wild salmon.. Bottom line was kiss the 'tidewater' and the interior freshwater ecologists goodbye.. c'est dommage. That's herring, bear, orca, eagle, wolf, raven - you name it.. its all connected and now Justin is ploughing the same fetid ground.. & telling how wonderful it all is .. as the video will portray, some 16,000 jobs are directly reliant on a healthy Washington State salmon fishery.. and what then of British Columbia.. or Alaska ? So kill off the wild resources for whom exactly ..

The Mound of Sound said...

@ Anon, a few years ago I wrote of a growing group of historians, political scientists, economists and such who had come to refer to the 21st either as the "century of revolt" or the "century of chaos." Their common theme was that we're locked into a world that can't be fixed, only torn down.

Ralston Saul in his book "The End of Globalism" wrote, in 2005, that the free market fundamentalism/globalism paradigm had failed but was continuing during an interregnum while visionaries emerged to implement the "next great thing." Sadly that hasn't happened. We're still floundering under neoliberalism and no grand visionary is to be found on the horizon.

This seems to lend credence to the talk of chaos and revolt unless a third possibility now being floated transpires instead - neo-feudalism. At this stage I'm glad I don't have another 30 years to live.

The Mound of Sound said...

Hi, Cap. Yes, I remember the movie fairly well. It does seem prescient.

Reminds me of Warren Buffet's statement that the wealthy who accuse the left of spoiling for a class war are lying. The rich already fought and won the class war and - we lost.

Toby said...

Question: is Justine really duplicitous or is he stupid? I suspect both. He has all these smart people telling him what to do and he does what they tell him but he doesn't appear to think through the consequences. He mistakes celebrity with success.

The Mound of Sound said...

Hi, Sal. Thanks for the YouTube link. That sort of video resonates rather deeply with me. Maybe that's the level on which we need to focus our energies from now on.

Speaking of Harper, do you recall the Nexen deal? The company's shareholders had a chance to unload it on the Chinese. Harper interceded to let it slip through regulatory hurdles that would have otherwise blocked it. He did something along the same lines with PostMedia to let the owners prostitute this large news chain to US vulture capitalists. The public interest be damned.

Northern PoV said...

Cap's post reminded me of these words by the great Greg Brown....

"there'll be one corporation
selling one little box
it'll do what you want
and tell you what you want
and cost whatever you got"

Pamela Mac Neil said...

Harper implemented his neoliberal policies incrementally Mound. With the fervor of the true believer Trudeau can't seem to implement his neoliberal policies fast enough.

I think his advisors have told him that neoliberalism is what will grow the economy and make Canada financially successful and he believes it.

Thx. for posting. I always learn something when you talk about neoliberalism,

John B. said...

Now they don't even need the lobbyists.


"We're bringing back jobs, we're bringing down your taxes. We're getting rid of your regulations. And I think it's going to be some really very exciting times ahead. We're going to be doing -- we're doing it, we're going to be coming up with a tax bill soon, a health care bill even sooner. And it's really working out. ...

"And then they go crazy -- they'll meet very smart people that made money, why don't you let other people to run the economy? I said, no, we have to get the right people. And the people that voted for me understand that, and that's what they want.

"So when I campaigned for office, I promised the American people that I'd ask for our country's best and brightest, and we have that. ...

"We have a great plan, but I want to have your input on the plan in particular and to do what we have to do in terms of regulation. We have some of the bankers here. There is nobody better to tell me about Dodd-Frank than Jamie ...

"But we really want your input. We have the biggest, the brightest in the world. They’re in this country, in this case. ...

"But these are the biggest and the best minds in this country, and I really appreciate you being here."

- From Trump's opening remarks to the President's Strategy and Policy Forum

There you go, Mr. Beale: the face of God right in your face.